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EXHIBIT 10.32
LOAN AGREEMENT
between
City of Elkhart, Indiana
and
▇▇▇▇▇▇▇ Inns, Inc.
--------------------------------------
$3,305,000
City of Elkhart, Indiana
Adjustable Rate Economic Development Revenue Refunding Bonds,
Series 1999
(▇▇▇▇▇▇▇ Inns, Inc. Project)
Dated
as of
December 1, 1999
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INDEX
(This Index is not a part of the Agreement
but rather is for convenience of reference only)
Preambles Page
ARTICLE I DEFINITIONS 1
Section 1.1 Use of Defined Terms 1
Section 1.2 Definitions 1
Section 1.3 Interpretation 4
Section 1.4 Captions and Headings 4
ARTICLE II REPRESENTATIONS, WARRANTIES AND COVENANTS 5
Section 2.1 Representations, Warranties and Covenants of the Issuer 5
Section 2.2 Representations, Warranties and Covenants of the Borrower 6
ARTICLE III ISSUANCE OF THE PROJECT BONDS 8
Section 3.1 Issuance of the Bonds; Application of Proceeds 8
Section 3.2 Investment of Fund Moneys 8
Section 3.3 Rebate Fund 9
ARTICLE IV LOAN BY ISSUER; REPAYMENT OF THE LOAN;
LOAN PAYMENTS AND ADDITIONAL PAYMENTS 10
Section 4.1 Loan Repayment; Delivery of Notes and Letter of Credit 10
Section 4.2 Additional Payments 11
Section 4.3 Place of Payments 11
Section 4.4 Obligations Unconditional 11
Section 4.5 Assignment of Agreement and Revenues 11
Section 4.6 Letter of Credit 12
ARTICLE V ADDITIONAL AGREEMENTS AND COVENANTS 13
Section 5.1 Right of Inspection 13
Section 5.2 Sale, Lease or Grant of Use by Borrower 13
Section 5.3 Indemnification 13
Section 5.4 Borrower Not to Adversely Affect Exclusion from Gross Income
of Interest on Project Bonds 14
Section 5.5 Assignment by Issuer 15
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Section 5.6 Borrower's Performance Under Indenture 15
Section 5.7 Compliance with Laws 15
Section 5.8 Taxes, Permits, Utility and Other Charges 15
Section 5.9 Continued Existence 15
Section 5.10 Removal of Portions of the Project 15
Section 5.11 Prevailing Wage Rate 16
ARTICLE VI REDEMPTION OF PROJECT BONDS 17
Section 6.1 Optional Redemption 17
Section 6.2 Extraordinary Optional Redemption 17
Section 6.3 Mandatory Redemption of Project Bonds 18
Section 6.4 Actions by Issuer 18
Section 6.5 Required Deposits for Optional Redemption 18
ARTICLE VII EVENTS OF DEFAULT AND REMEDIES 20
Section 7.1 Events of Default 20
Section 7.2 Remedies on Default 21
Section 7.3 No Remedy Exclusive 22
Section 7.4 Agreement to Pay Attorneys' Fees and Expenses 22
Section 7.5 No Waiver 22
Section 7.6 Notice of Default 22
ARTICLE VIII MISCELLANEOUS 23
Section 8.1 Term of Agreement 23
Section 8.2 Notices 23
Section 8.3 Extent of Covenants of the Issuer; No Personal Liability 23
Section 8.4 Binding Effect 23
Section 8.5 Amendments and Supplements 23
Section 8.6 Execution Counterparts 24
Section 8.7 Severability 24
Section 8.8 Governing Law 24
Section 8.9 Amounts Remaining in Funds 24
Exhibit A - PROJECT A-1
Exhibit B - PROJECT SITE B-1
Exhibit C - PROJECT NOTE C-1
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LOAN AGREEMENT
THIS LOAN AGREEMENT is made and entered into as of December 1, 1999
between the City of Elkhart, Indiana, a municipal corporation existing under the
laws of the State of Indiana (the "Issuer"), and ▇▇▇▇▇▇▇ Inns, Inc., a Georgia
Corporation (the "Borrower"), under the circumstances summarized in the
following recitals (the capitalized terms not defined above or in the recitals
being used therein as defined in or pursuant to Article 1 hereof):
A. Pursuant to the provisions of Indiana Code 36-7-11.9 and 12, the Issuer
has heretofore issued the Prior Bonds to provide financing for costs of the
Project, and to reduce the financing costs of the Project the Issuer has now
determined to issue, sell and deliver the Project Bonds and to loan the proceeds
thereof to the Borrower to be used to effect the refunding of the Prior Bonds.
B. The Borrower and the Issuer have full right and lawful authority to
enter into this Agreement and to perform and observe the provisions hereof on
their respective parts to be performed and observed.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein 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 not be a general debt on its part but shall
be payable solely out of the Revenues, as defined in the Indenture):
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DEFINITIONS
1.1 Section. Use of Defined Terms . Words and terms defined in the
Indenture shall have the same meanings when used herein, unless the context or
use clearly indicates another meaning or intent. In addition, the words and
terms set forth in Section 1.2 hereof shall have the meanings set forth therein
unless the context or use clearly indicates another meaning or intent.
1.2 Section. Definitions . As used herein:
"Additional Payments" means the amounts required to be paid by the
Borrower pursuant to the provisions of Section 4.2 hereof.
"Agreement" means this Loan Agreement, as amended or supplemented from
time to time.
"Engineer" means an individual or firm acceptable to the Trustee and
qualified to practice the profession of engineering or architecture under the
laws of the State.
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1.11 "Event of Default" means any of the events described as an Event of
Default in Section 7.1 hereof.
1.12
1.13 "Force Majeure" means any of the causes, circumstances or events
described as constituting Force Majeure in Section 7.1 hereof.
1.14 "Indenture" means the Trust Indenture, dated as of even date herewith,
between the Issuer and the Trustee, as amended or supplemented from time to
time.
1.15
1.16 "Loan" means the loan by the Issuer to the Borrower of the proceeds
received from the sale of the Project Bonds.
1.17
1.18 "Loan Payment Date" means any date on which any of the Loan Payments
are due and payable, whether at maturity, upon acceleration, call for redemption
or prepayment, or otherwise.
1.19
1.20 "Loan Payments" means the amounts required to be paid by the Borrower
in repayment of the Loan pursuant to the provisions of the Notes and of Section
4.1 hereof.
1.21
1.22 "Notes" means the Project Note and any Additional Notes.
1.23
1.24 "Notice Address" means:
1.25
(a) As to the Issuer: City of Elkhart, Indiana
City Hall
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: City Attorney
(a) As to the Borrower: ▇▇▇▇▇▇▇ Inns, Inc.
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, #▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: __________
(a) As to the Trustee: Firstar Bank, N.A.
▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Corporate Trust Dept.
(a) As to the Bank: Firstar Bank, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇
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(e) As to the Remarketing Agent, at:
Banc One Capital Markets, Inc.
One Bank ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
or such additional or different address, notice of which is given under Section
8.2 hereof.
"Prior Bonds" means the Issuer's Economic Development Bonds, Series
1986 (Signature Elkhart, Ltd. Project), dated as of December 24, 1986, in the
original principal amount of $3,885,000.
"Prior Bonds Trustee" means Bank One Trust Company, NA, as trustee for
the Prior Bonds.
"Project" means the real and personal property, including undivided
interests or other interests therein, identified in Exhibit A attached hereto as
a part hereof, including the Project Site, or acquired, constructed or installed
as a replacement or substitution therefor or an addition thereto, or as may
result from any revision thereof in accordance with the provisions of this
Agreement.
"Project Bonds" means the City of Elkhart, Indiana Adjustable Rate
Economic Development Revenue Refunding Bonds, Series 1999 (▇▇▇▇▇▇▇ Inns, Inc.
Project) authorized in the Indenture in the original principal amount of
$3,305,000.
"Project Note" means the promissory note of the Borrower, dated as of
even date with the Project Bonds, in the form attached hereto as Exhibit C and
in the principal amount of $3,305,000 evidencing the obligation of the Borrower
to make Loan Payments.
"Project Site" means the real estate and interests in real estate
constituting the site of the Project, as described in Exhibit B attached hereto
as a part hereof.
"Tax Certificate" means the Tax Compliance Certificate of the Borrower
delivered in connection with the initial issuance and delivery of the Project
Bonds.
"Trustee" means the Trustee at the time acting as such under the
Indenture, originally Firstar Bank, N.A., as Trustee, and any successor Trustee
as determined or designated under or pursuant to the Indenture.
"Unassigned Issuer's Rights" means all of the rights of the Issuer to
receive Additional Payments under Section 4.2 hereof, to be held harmless and
indemnified under Section 5.3 hereof, to be reimbursed for attorney's fees and
expenses under Section 7.4 hereof, and to give or
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withhold consent to amendments, changes, modifications, alterations and
termination of this Agreement under Section 8.5 hereof.
Section 1.3. Interpretation . Any reference herein to the Issuer, to
the Issuing Authority or to any member or officer of either includes entities or
officials succeeding to their respective functions, duties or responsibilities
pursuant to or by operation of law or lawfully performing their respective
functions.
Any reference to a section or provision of the Constitution of the
State or the Act, or to a section, provision or chapter of the Indiana Code or
to any statute of the United States of America, includes that section,
provision, chapter or statute as amended, modified, revised, supplemented or
superseded from time to time; provided, that no amendment, modification,
revision, supplement or superseding section, provision, chapter or statute shall
be applicable solely by reason of this provision if it constitutes in any way an
impairment of the rights or obligations of the Issuer, the Holders, the Trustee,
the Bank or the Borrower under this Agreement.
Unless the context indicates otherwise, words importing the singular
number include the plural number, and vice versa; the terms "hereof", "hereby",
"herein", "hereto", "hereunder" and similar terms refer to this Agreement; and
the term "hereafter" means after, and the term "heretofore" means before, the
date of delivery of the Project Bonds. Words of any gender include the
correlative words of the other genders, unless the sense indicates otherwise.
Section 1.4. Captions and Headings . The captions and headings in this
Agreement are solely for convenience of reference and in no way define, limit or
describe the scope or intent of any Articles, Sections, subsections, paragraphs,
subparagraphs or clauses hereof.
(End of Article I)
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ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.1. Representations, Warranties and Covenants of the Issuer.
The Issuer represents and warrants that:
(a) It is a duly organized and validly existing municipal corporation and
political subdivision under the laws of the State.
(b) It has full legal right, power and authority pursuant to the Act to
finance the Project through the issuance of the Prior Bonds and to refinance the
Project and refund the Prior Bonds through the issuance of the Project Bonds;
has made the necessary findings of public purpose, has given any necessary
notices and has taken all other steps and followed all procedures required by
the Constitution and laws of the State (including the Act) in connection
therewith; and has full legal right, power and authority to (i) enter into this
Agreement, the Bond Purchase Agreement, the Letter of Representations and the
Indenture, (ii) issue, sell and deliver the Project Bonds and (iii) carry out
and consummate all other transactions contemplated by this Agreement, the Bond
Purchase Agreement, the Letter of Representations and the Indenture.
(c) It has duly authorized (i) the execution, delivery and performance of
this Agreement, the Project Bonds, the Bond Purchase Agreement, the Letter of
Representations and the Indenture, and (ii) the taking of any and all such
actions as may be required on the part of the Issuer to carry out, give effect
to and consummate the transactions contemplated by such instruments.
(d) This Agreement, the Bond Purchase Agreement, the Letter of
Representations and the Indenture constitute legal, valid and binding
obligations of the Issuer, enforceable in accordance with their respective
terms; this Agreement, the Bond Purchase Agreement, the Letter of
Representations and the Indenture have been duly authorized and executed by the
Issuer; and, when authenticated by the Trustee in accordance with the provisions
of the Indenture, the Project Bonds will have been duly authorized, executed,
issued and delivered and will constitute legal, valid and binding special
obligations of the Issuer in conformity with the provisions of the Act and the
Constitution of the State.
(e) There is no action, suit, proceeding, inquiry, or investigation at law
or in equity or before or by any court, public board or body, pending or, to the
best of the knowledge of the Issuer, threatened against the Issuer, nor to the
best of the knowledge of the Issuer is there any basis therefor, which in any
manner questions the validity of the Act, the powers of the Issuer referred to
in paragraph (b) above or the validity of any proceedings taken by the Issuer in
connection with the issuance of the Project Bonds or wherein any unfavorable
decision, ruling or finding could materially adversely affect the transactions
contemplated by this Agreement or which, in any way, would adversely affect the
validity or enforceability of the Project Bonds, the Letter of Representations,
the Indenture, the Bond Purchase Agreement or this Agreement (or of any other
instrument required or contemplated for use in consummating the transactions
contemplated thereby and hereby).
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(f) The execution and delivery by the Issuer of this Agreement, the Project
Bonds, the Bond Purchase Agreement, the Letter of Representations and the
Indenture in compliance with the provisions of each of such instruments will not
conflict with or constitute a breach of, or default under, any material
commitment, agreement or other instrument to which the Issuer is a party or by
which it is bound, or under any provision of the Act, the Constitution of the
State or any existing law, rule, regulation, ordinance, judgment, order or
decree to which the Issuer is subject.
(g) The Issuer will do or cause to be done all things necessary, so far as
lawful, to preserve and keep in full force and effect its existence or to assure
the assumption of its obligations under this Agreement, the Indenture, the
Letter of Representations and the Bonds by any successor public body.
Section 2.2. Representations, Warranties and Covenants of the Borrower.
The Borrower represents, warrants and covenants that:
(a) The Borrower is a corporation duly organized and validly existing under
the laws of the State of Georgia and is duly authorized to do business in the
State. The Borrower has full power and authority to execute, deliver and perform
this Agreement, the Bond Purchase Agreement, the Reimbursement Agreement, the
Remarketing Agreement and the Project Note and to enter into and carry out the
transactions contemplated by those documents. That execution, delivery and
performance do not, and will not, violate any provision of law applicable to the
Borrower or its Articles of Incorporation or Bylaws and do not, and will not,
conflict with or result in a default under any agreement or instrument to which
the Borrower is a party or by which the Borrower is bound.
(b) This Agreement, the Bond Purchase Agreement, the Remarketing Agreement,
the Reimbursement Agreement and the Project Note, by proper corporate action,
have been duly authorized, executed and delivered by the Borrower and are valid
and binding obligations of the Borrower.
(c) The Project is owned by the Borrower and is leased to and operated by
▇▇▇▇▇▇▇ Hospitality, L.L.C. The Project has created or preserved jobs and
employment opportunities within the boundaries of the State and Issuer, and the
Project is and will be operated and maintained in such manner as to conform in
all material respects with all applicable zoning, planning, building,
environmental and other applicable governmental rules and regulations and as to
be consistent with the Act.
(d) The Borrower is not in default in the payment of principal of, or
interest on, any of the Borrower's indebtedness for borrowed money, or in
default under any instrument under which, or subject to which, any indebtedness
has been incurred, and no event has occurred and is continuing under the
provisions of any material agreement involving the Borrower that, with the lapse
of time or the giving of notice, or both, would constitute an event of default
thereunder.
(e) No litigation at law or in equity nor any proceeding before any
governmental agency or
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other tribunal involving the Borrower is pending or, to the knowledge of the
Borrower, threatened, in which any liability of the Borrower is not adequately
covered by insurance and in which any judgment or order would have a material
and adverse effect upon the business or assets of the Borrower or would
materially and adversely affect the Project, the validity of this Agreement, the
Bond Purchase Agreement, the Reimbursement Agreement, the Remarketing Agreement
or the Project Note or the performance of the Borrower's obligations thereunder
or the transactions contemplated hereby.
(f) The Borrower shall not use or operate the Project, or permit the
Project to be used or operated, in any way which would affect the qualification
of the Project under the Act or impair the exclusion from gross income for
federal income tax purposes of the interest on the Project Bonds.
(g) The representations contained in the Tax Certificate (which is
incorporated herein by this reference thereto) are true and correct and the
Borrower will observe the covenants contained therein as fully as if set forth
herein.
(h) The Bank does not control, either directly or indirectly through one or
more intermediaries, the Borrower. Likewise, the Borrower does not control,
either directly or indirectly through one or more intermediaries, the Bank.
"Control" for this purpose has the meaning given to such term in Section 2(a)(9)
of the Investment Company Act of 1940. The Borrower agrees to provide written
notice to the Trustee, the Remarketing Agent, and the Bondholders thirty days
prior to consummation of any transaction that would result in the Borrower
controlling or being controlled by the Bank or any provider of an Alternate
Letter of Credit or Supplemental Credit Facility.
(i) The Borrower represents that the Reimbursement Agreement and the
documents referenced therein constitute the entire agreement between the
Borrower and the Bank respecting the Loan.
(j) The Borrower covenants that it will not take any action, directly or
indirectly (including, but not limited to, any amendment to the Reimbursement
Agreement), nor fail to take any action, directly or indirectly, which would
cause any payment under the Letter of Credit to be a voidable preference under
Section 547 of Title 11 of the United States Code, U.S.C. ss.101 et. seq. (the
"Bankruptcy Code") which is recoverable under Section 550(a) of the Bankruptcy
Code in the event of the filing of a petition in bankruptcy by or against the
Borrower or the Issuer.
(End of Article II)
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ARTICLE III
ISSUANCE OF THE PROJECT BONDS
Section 3.1. Issuance of the Bonds; Application of Proceeds. To provide
funds to make the Loan for purposes of refunding the Prior Bonds and thereby
refinancing costs of the Project, the Issuer will issue, sell and deliver the
Project Bonds upon the order of the Underwriter as provided in the Bond Purchase
Agreement. The Project Bonds will be issued pursuant to the Indenture in the
aggregate principal amount, will bear interest, will mature and will be subject
to redemption as set forth therein. The Borrower hereby approves the terms and
conditions of the Indenture and the Project Bonds, and the terms and conditions
under which the Project Bonds will be issued, sold and delivered.
The proceeds from the sale of the Project Bonds shall be loaned to the
Borrower and paid over to the Trustee which shall deposit them in the Project
Fund as provided in the Indenture. The Trustee is hereby instructed to disburse
the entire balance in the Project Fund to the Prior Bonds Trustee immediately
upon receipt thereof. Such disbursement shall be made in immediately available
funds on the date of the initial delivery of the Project Bonds. Pursuant to the
trust indenture pursuant to which the Prior Bonds were issued, the Prior Bonds
Trustee shall, and is hereby directed to, use the proceeds of the Prior Bonds,
together with other funds provided by the Borrower and available for such
purpose, to effect the redemption of the Prior Bonds in whole.
At the request of the Borrower, and for the purposes and upon
fulfillment of the conditions specified in the Indenture, the Issuer may provide
for the issuance, sale and delivery of Additional Bonds and loan the proceeds
from the sale thereof to the Borrower.
Section 3.2. Investment of Fund Moneys. At the written or oral request
(promptly confirmed in writing) of the Authorized Borrower Representative, any
moneys held as part of the Bond Fund (except moneys held in the Bond Fund from
draws on the Letter of Credit, which moneys shall be held in cash and not
invested), the Project Fund or the Rebate Fund shall be invested or reinvested
by the Trustee in Eligible Investments. The Issuer and the Borrower each hereby
covenants that it will restrict that investment and reinvestment and the use of
the proceeds of the Project Bonds in such manner and to such extent, if any, as
may be necessary, after taking into account reasonable expectations at the time
of delivery of and payment for the Project Bonds, so that the Project Bonds will
not constitute arbitrage bonds under Section 148 of the Code.
The Borrower shall provide the Issuer with, and the Issuer may base its
certifications as authorized by the Bond Legislation on, a certificate of the
Borrower for inclusion in the transcript of proceedings for the Project Bonds,
setting forth the reasonable expectations of the Borrower on the date of
delivery of and payment for the Project Bonds regarding the amount and use of
the proceeds of the Project Bonds and the facts, estimates and circumstances on
which those expectations are based.
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Section 3.3. Rebate Fund. The Borrower agrees to make such payments to
the Trustee as are required of it under Section 5.11 of the Indenture. The
obligation of the Borrower to make such payments shall remain in effect and be
binding upon the Borrower notwithstanding the release and discharge of the
Indenture.
The Borrower and the Issuer each covenants to the owners of the Project
Bonds that, notwithstanding any other provision of this Agreement or any other
instrument, it shall take no action, nor shall the Borrower direct the Trustee
to take or approve the Trustee's taking any action or direct the Trustee to make
or approve the Trustee's making any investment or use of proceeds of the Project
Bonds or any other moneys which may arise out of or in connection with this
Agreement, the Indenture or the Project, which would cause the Project Bonds to
be treated as "arbitrage bonds" within the meaning of Section 148 of the Code.
In addition, the Borrower covenants and agrees to comply with the requirements
of Section 148(f) of the Code as it may be applicable to the Project Bonds or
the proceeds derived from the sale of the Project Bonds or any other moneys
which may arise out of, or in connection with, this Agreement, the Indenture or
the Project throughout the term of the Project Bonds. No provision of this
Agreement shall be construed to impose upon the Trustee any obligation or
responsibility for compliance with arbitrage regulations, except as provided in
the Indenture.
(End of Article III)
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ARTICLE IV
LOAN BY ISSUER; REPAYMENT OF THE LOAN;
LOAN PAYMENTS AND ADDITIONAL PAYMENTS
Section 4.1. Loan Repayment; Delivery of Notes and Letter of Credit.
Upon the terms and conditions of this Agreement, the Issuer will make the Loan
to the Borrower. In consideration of and in repayment of the Loan, the Borrower
shall make, as Loan Payments, payments sufficient in time and amount to pay when
due all Bond Service Charges, all as more particularly provided in the Project
Note and any Additional Note. The Project Note shall be executed and delivered
by the Borrower concurrently with the execution and delivery of this Agreement.
All Loan Payments shall be paid to the Trustee in accordance with the terms of
the Notes for the account of the Issuer and shall be held and applied in
accordance with the provisions of the Indenture and this Agreement. To the
extent of payments made with respect to Bond Service Charges pursuant to draws
upon the Letter of Credit, the Borrower shall receive a credit against its
obligation to make Loan Payments under this Agreement and the Project Note.
In connection with the issuance of any series of Additional Bonds
permitted by the Bank, the Borrower shall execute and deliver to the Trustee an
Additional Note in a form substantially similar to the form of the Project Note.
All such Additional Notes shall: 1.4
(a) provide for payments of interest equal to the payments of interest on
the corresponding Additional Bonds;
(b) require payments of principal and prepayments and any premium equal to
the payments of principal, redemption payments and sinking fund payments and any
premium on the corresponding Additional Bonds;
(c) require all payments on any such Additional Notes to be made no later
than the due dates for the corresponding payments to be made on the
corresponding Additional Bonds; and
(d) contain by reference or otherwise optional and mandatory prepayment
provisions and provisions in respect of the optional and mandatory acceleration
or prepayment of principal and any premium corresponding with the redemption and
acceleration provisions of the corresponding Additional Bonds.
All Notes shall secure equally and ratably all outstanding Bonds,
except that, so long as no Event of Default described in paragraph (a), (b),
(c), (g) or (h) of Section 7.01 of the Indenture has occurred and is continuing,
payments by the Borrower on the Project Note shall be used by the Trustee to
reimburse the Bank for drawings on the Letter of Credit used to pay Bond Service
Charges on the Project Bonds.
Upon payment in full, in accordance with the Indenture, of the Bond
Service Charges on any series of Bonds, whether at maturity or by redemption or
otherwise, or upon provision for the payment thereof having been made in
accordance with the provisions of the Indenture, the
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Note issued concurrently with those corresponding Bonds shall be deemed fully
paid, the obligations of the Borrower thereunder shall be terminated, and any
such Note shall be surrendered by the Trustee to the Borrower, and shall be
canceled by the Borrower.
Except for such interest of the Borrower and the Bank as may hereafter
arise pursuant to Section 5.07 or 5.08 of the Indenture, the Borrower and the
Issuer each acknowledge that neither the Borrower nor the Issuer has any
interest in the Bond Fund and any moneys deposited therein shall be in the
custody of and held by the Trustee in trust for the benefit of the Holders and,
to the extent of amounts due under the Reimbursement Agreement, the Bank.
Section 4.2. Additional Payments. The Borrower shall pay to the Issuer,
as Additional Payments hereunder, within five (5) days after request therefore
made in writing and specifying such costs and expenses with reasonable
particularity any and all costs and expenses actually incurred or to be paid by
the Issuer in connection with the issuance and delivery of the Project Bonds and
Additional Bonds or otherwise related to actions taken by the Issuer under this
Agreement or the Indenture.
The Borrower shall pay to the Trustee its reasonable fees, charges and
expenses for acting as such under the Indenture.
Any payments under this Section not paid when due shall bear interest
at the Interest Rate for Advances.
Section 4.3. Place of Payments. The Borrower shall make all Loan
Payments directly to the Trustee at its Operations Office. Additional Payments
shall be made directly to the person or entity to whom or to which they are due.
Section 4.4. Obligations Unconditional . The obligations of the
Borrower to make Loan Payments, Additional Payments and any payments required of
the Borrower under Section 4.3 hereof shall be absolute and unconditional, and
the Borrower shall make such payments without abatement, diminution or deduction
regardless of any cause or circumstances whatsoever including, without
limitation, any defense, set-off, recoupment or counterclaim which the Borrower
may have or assert against the Issuer, the Trustee, the Bank or any other
Person; provided that the Borrower may contest or dispute the amount of any such
obligation (other than Loan Payments) so long as such contest or dispute does
not result in an Event of Default under the Indenture.
Section 4.5. Assignment of Agreement and Revenues. To secure the
payment of Bond Service Charges, the Issuer shall assign to the Trustee, by the
Indenture, all its right, title and interest in and to the Revenues, the
Agreement (except for Unassigned Issuer's Rights) and the Project Note. The
Borrower hereby agrees and consents to that assignment.
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Section 4.6. Letter of Credit. Simultaneously with the initial delivery
of the Project Bonds pursuant to the Indenture and the Bond Purchase Agreement,
the Borrower shall cause the Bank to issue and deliver to the Trustee the Letter
of Credit, in substantially the form attached to the Reimbursement Agreement and
made a part thereof. The Letter of Credit may be replaced by an Alternate Letter
of Credit complying with the provisions of Section 5.09 of the Indenture.
(End of Article IV)
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ARTICLE V
ADDITIONAL AGREEMENTS AND COVENANTS
Section 5.1. Right of Inspection. Subject to reasonable security and
safety regulations and upon reasonable notice, the Issuer, the Bank and the
Trustee, and their respective agents, shall have the right during normal
business hours to inspect the Project.
Section 5.2. Sale, Lease or Grant of Use by Borrower. With the written
consent of the Bank and subject to any other agreement to which the Borrower is
a party or by which it is bound, the Borrower may sell, lease or grant the right
to occupy and use the Project, in whole or in part, to others, provided that:
(a) No such sale, lease or grant shall relieve the Borrower from the
Borrower's obligations under this Agreement or the Notes;
(b) In connection with any such sale, lease or grant the Borrower shall
retain such rights and interests as will permit the Borrower to comply with the
Borrower's obligations under this Agreement and the Notes;
(c) No such sale, lease or grant shall impair materially the purposes of
the Act to be accomplished by operation of the Project as herein provided or
adversely affect the exclusion from gross income for federal income tax purposes
of the interest on the Bonds. (f)
Section 5.3. Indemnification. The Borrower releases the Issuer from,
agrees that the Issuer shall not be liable for, and shall indemnify the Issuer
against, all liabilities, claims, costs and expenses, including attorneys fees
and expenses, imposed upon, incurred or asserted against the Issuer on account
of: (a) any loss or damage to property or injury to or death of or loss by any
person that may be occasioned by any cause whatsoever pertaining to the
acquisition, construction, installation, equipping, maintenance, operation or
use of the Project; (b) any breach or default on the part of the Borrower in the
performance of any covenant or agreement of the Borrower under this Agreement,
the Reimbursement Agreement, the Project Note or any related document, or
arising from any act or failure to act by the Borrower, or any of the Borrower's
agents, contractors, servants, employees or licensees; (c) the authorization,
issuance, sale, trading, remarketing, redemption or servicing of the Project
Bonds, and the provision of any information or certification furnished in
connection therewith concerning the Project Bonds, the Project, or the Borrower
including, without limitation, the Preliminary Offering Memorandum and the
Offering Memorandum (each as defined in the Bond Purchase Agreement), any
information furnished by the Borrower or the Bank for, and included in, or used
as a basis for preparation of, any certifications, information statements or
reports furnished by the Issuer, and any other information or certification
obtained from the Borrower or the Bank to assure the exclusion of the interest
on the Project Bonds from gross income of the Holders thereof for federal income
tax purposes; (d) the Borrower's failure to comply with any requirement of this
Agreement or the Code pertaining to such exclusion of that interest, including
the covenants in Section 5.4 hereof; and (e) any claim, action or proceeding
brought with respect to the matters
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set forth in (a), (b), (c), or (d) above.
The Borrower agrees to indemnify the Trustee for, and to hold it
harmless against, all liabilities, claims, costs and expenses incurred without
negligence or willful misconduct on the part of the Trustee on account of any
action taken or omitted to be taken by the Trustee in accordance with the terms
of this Agreement, the Bonds, the Reimbursement Agreement, the Letter of Credit,
the Notes or the Indenture, or any action taken at the request of or with the
consent of the Borrower, including the costs and expenses of the Trustee in
defending itself against any such claim, action or proceeding brought in
connection with the exercise or performance of any of its powers or duties under
this Agreement, the Bonds, the Indenture, the Reimbursement Agreement, the
Letter of Credit or the Notes.
In case any action or proceeding is brought against the Issuer or the
Trustee in respect of which indemnity may be sought hereunder, the party seeking
indemnity promptly shall give notice of that action or proceeding to the
Borrower, and the Borrower upon receipt of that notice shall have the obligation
and the right to assume the defense of the action or proceeding; provided, that
failure of a party to give that notice shall not relieve the Borrower from any
of the Borrower's obligations under this Section unless that failure materially
prejudices the defense of the action or proceeding by the Borrower. An
indemnified party at its own expense may employ separate counsel and participate
in the defense. The Borrower shall not be liable for any settlement made without
the Borrower's consent.
The indemnification set forth above is intended to and shall include
the indemnification of all affected officials, directors, officers and employees
of the Issuer and the Trustee, respectively. That indemnification is intended to
and shall be enforceable by the Issuer and the Trustee, respectively, to the
full extent permitted by law.
Section 5.4. Borrower Not to Adversely Affect Exclusion from Gross
Income of Interest on Project Bonds. The Borrower hereby represents that the
Borrower has taken or caused to be taken, and covenants that the Borrower will
take or cause to be taken, all actions that may be required of the Borrower or
any lessee of the Project, alone or in conjunction with the Issuer, for the
interest on the Project Bonds to be and remain excluded from gross income for
federal income tax purposes, and represents that the Borrower has not taken or
permitted to be taken, and covenants that the Borrower will not take or permit
to be taken, any actions that would adversely affect such exclusion under the
provisions of the Code.
If the Borrower becomes aware of any actions or facts which have caused
or will cause the interest on the Project Bonds to be includable in gross income
for federal income tax purposes, the Borrower promptly shall (a) notify the
Trustee and the Remarketing Agent of such actions or facts and (b) take such
steps as are necessary to cause redemption of the Project Bonds in whole at the
earliest practicable date.
Section 5.5. Assignment by Issuer. Except for the assignment of this
Agreement to the Trustee, the Issuer shall not attempt to further assign,
transfer or convey its interest in the
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Revenues or this Agreement or create any pledge or lien of any form or nature
with respect to the Revenues or the payments hereunder.
Section 5.6 . Borrower's Performance Under Indenture . The Borrower has
examined the Indenture and approves the form and substance of, and agrees to be
bound by, its terms. The Borrower, for the benefit of the Issuer and each
Bondholder, shall do and perform all acts and things required or contemplated in
the Indenture to be done or performed by the Borrower. The Borrower is a third
party beneficiary of certain provisions of the Indenture, and Section 8.05 of
the Indenture is hereby incorporated herein by reference.
Section 5.7 . Compliance with Laws . The Borrower shall, throughout the
term of this Agreement, promptly comply or cause compliance in all material
respects with all laws, ordinances, orders, rules, regulations and requirements
of duly constituted public authorities which may be applicable to the Project or
to the repair and alteration thereof, or to the use or manner of use of the
Project or to the Borrower's and any lessee's operations on the Project Site.
Notwithstanding the foregoing, the Borrower shall have the right to contest or
cause to be contested the legality or the applicability of any such law,
ordinance, order, rule, regulation or requirement so long as, in the opinion of
counsel satisfactory to the Trustee and the Bank, such contest shall not in any
way materially adversely affect or impair the obligations of the Borrower
hereunder or any right or interest of the Trustee or the Bank in, to and under
the Indenture or this Agreement.
Section 5.8 . Taxes, Permits, Utility and Other Charges . The Borrower
shall pay and discharge or cause to be paid and discharged, promptly as and when
the same shall become due and payable, all taxes and governmental charges of any
kind whatsoever that may be lawfully assessed against the Issuer, the Trustee,
the Bank or the Borrower with respect to the Project or any portion thereof. The
Borrower may in good faith contest or cause to be contested any such tax or
governmental charge, and in such event may permit such tax or governmental
charge to remain unsatisfied during the period of such contest and may appeal
therefrom unless in the opinion of counsel satisfactory to the Trustee and the
Bank by such action any right or interest of the Trustee or the Bank in, to and
under the Indenture or this Agreement shall be materially endangered or the
Project or any part thereof, shall become subject to imminent loss or
forfeiture, in which event such tax or governmental charge shall be paid prior
to any such loss or forfeiture.
Section 5.9 . Continued Existence . Except as otherwise provided in or
permitted pursuant to the Reimbursement Agreement, or unless otherwise provided
by law, the Borrower shall maintain its existence and continue to be a duly
formed and validly existing corporation under the laws of the State of Georgia.
Section 5.10 . Removal of Portions of the Project . The Borrower shall
have the right, from time to time, subject to the terms of the Reimbursement
Agreement, to remove, substitute or modify any portion of the Project, provided
that such removal, substitution or modification shall not impair the character
of the Project as a "project" within the meaning of the Act. Any such
substituted or modified property shall be included under the terms of this
Agreement as part of the Project.
(End of Article V)
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ARTICLE VI
REDEMPTION OF PROJECT BONDS
Section 6.1 . Optional Redemption. Provided no Event of Default shall
have occurred and be continuing at any time and from time to time, the Borrower
may deliver moneys to the Trustee in addition to Loan Payments or Additional
Payments required to be made and direct the Trustee to use the moneys so
delivered for the purpose of purchasing Project Bonds or of reimbursing the Bank
for drawings on the Letter of Credit used to redeem Project Bonds called for
optional redemption in accordance with the applicable provisions of the
Indenture.
Section 6.2 . Extraordinary Optional Redemption. With the written
consent of the Bank, the Borrower shall have, subject to the conditions
hereinafter imposed, the option to direct the redemption, at a redemption price
of 100% of principal amount and accrued interest, of the entire unpaid principal
balance of the Project Bonds in accordance with the applicable provisions of the
Indenture upon the occurrence of any of the following events:
(a) The Project or Project Site shall have been damaged or destroyed to
such an extent that (1) the Project or Project Site cannot reasonably be
expected to be restored, within a period of three months, to the condition
thereof immediately preceding such damage or destruction or (2) normal use and
operation of the Project or the Project Site is reasonably expected to be
prevented for a period of three consecutive months;
(b) Title to, or the temporary use of, all or a significant part of the
Project or Project Site shall have been taken under the exercise of the power of
eminent domain (1) to such extent that the Project or Project Site cannot
reasonably be expected to be restored within a period of three months to a
condition of usefulness comparable to that existing prior to the taking or (2)
as a result of the taking, normal use and operation of the Project or Project
Site is reasonably expected to be prevented for a period of three consecutive
months;
(c) As a result of any changes in the Constitution of the State, the
constitution of the United States of America, or state or federal laws, or as a
result of legislative or administrative action (whether state or federal) or by
final decree, judgment or order of any court or administrative body (whether
state or federal) entered after the contest thereof by the Issuer, the Trustee
or the Borrower in good faith, this Agreement shall have become void or
unenforceable or impossible of performance in accordance with the intent and
purpose of the parties as expressed in this Agreement, or if unreasonable
burdens or excessive liabilities shall have been imposed with respect to the
Project or Project Site or the operation thereof, including, without limitation,
federal, state or other ad valorem, property, income or other taxes not being
imposed on the date of this Agreement other than ad valorem taxes presently
levied upon privately owned property used for the same general purpose as the
Project or the Project Site; or
(d) Changes in the economic availability of raw materials, operating
supplies, energy sources or supplies, or facilities (including, but not limited
to, facilities in connection with the disposal of Economic wastes) necessary for
the operation of the Project or the Project Site shall have
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occurred or technological or other changes shall have occurred which the
Borrower cannot reasonably overcome or control and which in the Borrower's
reasonable judgment render the operation of the Project or the Project Site
uneconomic.
The Borrower also shall have the option, with the written consent of
the Bank, in the event that title to or the temporary use of a portion of the
Project or the Project Site shall be taken under the exercise of the power of
eminent domain, even if the taking is not of such nature as to permit the
exercise of the redemption option upon an event specified in clause (b) above,
to direct the redemption, at a redemption price of 100% of the principal amount
thereof prepaid, plus accrued interest to the redemption date, of that part of
the outstanding principal balance of the Project Bonds as may be payable from
the proceeds received by the Borrower (after the payment of costs and expenses
incurred in the collection thereof) in the eminent domain proceeding, provided
that the Borrower shall furnish to the Issuer and the Trustee a certificate of
an Engineer stating that (1) the property comprising the part of the Project or
the Project Site taken is not essential to continued operations of the Project
in the manner existing prior to that taking, (2) the Project has been restored
to a condition substantially equivalent to that existing prior to the taking, or
(3) other improvements have been acquired or made which are suitable for the
continued operation of the Project.
To exercise any option under this Section, the Borrower within 90 days
following the event authorizing the exercise of that option, or at any time
during the continuation of the condition referred to in clause (d) of the first
paragraph of this Section, shall give notice to the Issuer and to the Trustee
specifying the date of redemption, which date shall be not more than ninety days
from the date that notice is mailed, and shall make arrangements satisfactory to
the Trustee for the giving of the required notice of redemption.
The rights and options granted to the Borrower in this Section may be
exercised whether or not the Borrower is in default hereunder; provided, that
such default will not relieve the Borrower from performing those actions which
are necessary to exercise any such right or option granted hereunder.
Section 6.3 . Mandatory Redemption of Project Bonds. If, as provided
in the Project Bonds and the Indenture, the Project Bonds become subject to
mandatory redemption, upon the date requested by the Trustee, the Borrower shall
pay to the Trustee moneys sufficient to pay in full the Project Bonds in
accordance with the mandatory redemption provisions relating thereto set forth
in the Indenture.
Section 6.4 . Actions by Issuer. At the request of the Borrower or the
Trustee, the Issuer shall take all steps required of it under the applicable
provisions of the Indenture or the Bonds to effect the redemption of all or a
portion of the Bonds pursuant to this Article VI.
Section 6.5 . Required Deposits for Optional Redemption. Except with
the prior written consent of the Bank (except with respect to mandatory sinking
fund redemptions required by the Indenture), the Trustee shall not give notice
of call to the Holders pursuant to the optional
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redemption provisions of Section 4.01 of the Indenture and Sections 6.1 and 6.2
hereof unless, prior to the date by which the call notice is to be given, there
shall be on deposit with the Trustee Eligible Funds sufficient to redeem at the
redemption price thereof, including premium (if any) and interest accrued to the
redemption date, all Project Bonds for which notice of redemption is to be
given.
All amounts paid by the Borrower pursuant to this Article which are
used to pay principal of, premium, if any, or interest on the Bonds, or to
reimburse the Bank for moneys drawn under the Letter of Credit and used for any
such purposes, shall constitute prepaid Loan Payments.
(End of Article VI)
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ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.1. Events of Default. Each of the following shall be an
Event of Default:
(a) The Borrower shall fail to pay when due any Loan Payment;
(b) Any representation or warranty by the Borrower contained herein or in
any certificate or instrument delivered by the Borrower pursuant hereto or in
connection with the issuance of the Project Bonds or any Additional Bonds is
false or misleading in any material respect;
(c) The Borrower shall fail to observe and perform any other agreement,
term, covenant or condition contained in this Agreement, and the continuation of
such failure for a period of 30 days after notice thereof shall have been given
to the Borrower by the Issuer or the Trustee, or for such longer period as the
Issuer and the Trustee may agree to in writing; provided, that if the failure is
other than the payment of money and is of such nature that it can be corrected
but not within the applicable period, that failure shall not constitute an Event
of Default so long as the Borrower institutes curative action within the
applicable period and diligently pursues that action to completion;
(d) The Borrower shall: (i) admit in writing its inability to pay its debts
generally as they become due; (ii) have an order for relief entered in any case
commenced by or against it under the federal bankruptcy laws, as now or
hereafter in effect; (iii) commence a proceeding under any other federal or
state bankruptcy, insolvency, reorganization or similar law, or have such a
proceeding commenced against it and either have an order of insolvency or
reorganization entered against it or have the proceeding remain undismissed and
unstayed for 90 days; (iv) make an assignment for the benefit of creditors; or
(v) have a receiver or trustee appointed for it or for the whole or any
substantial part of its property;
(e) There shall occur an "Event of Default" as defined in Section 7.01 of
the Indenture.
(f) Notwithstanding the foregoing, if, by reason of Force Majeure, the
Borrower is unable to perform or observe any agreement, term or condition hereof
which would give rise to an Event of Default under subsection (c) hereof
(provided that such failure is other than the payment of money), the Borrower
shall not be deemed in default during the continuance of such inability.
However, the Borrower shall promptly give notice to the Trustee and the Issuer
of the existence of an event of Force Majeure and shall use its best efforts to
remove the effects thereof; provided that the settlement of strikes or other
Economic disturbances shall be entirely within the Borrower's discretion.
The term Force Majeure shall mean, without limitation, the following:
(a) acts of God; strikes; lockouts or other Economic disturbances; acts of
public enemies; orders or restraints of any kind of the government of the United
States of America or of the State
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or any of their departments, agencies, political subdivisions or officials, or
any civil or military authority; insurrections; civil disturbances; riots;
epidemics; landslides; lightning; earthquakes; fires; hurricanes; tornados;
storms; droughts; floods; arrests; restraint of government and people;
explosions; breakage, malfunction or accident to facilities, machinery,
transmission pipes or canals; partial or entire failure of utilities; shortages
of labor, materials, supplies or transportation; or
(b) any cause, circumstance or event not reasonably within the control of
the Borrower.
The declaration of an Event of Default under subsection (d) above, and the
exercise of remedies upon any such declaration, shall be subject to any
applicable limitations of federal bankruptcy law affecting or precluding that
declaration or exercise during the pendency of or immediately following any
bankruptcy, liquidation or reorganization proceedings.
Section 7.2. Remedies on Default . Whenever an Event of Default shall
have happened and be continuing, any one or more of the following remedial steps
may be taken:
(a) If and only if acceleration of the principal amount of the Bonds has
been declared pursuant to Section 7.03 of the Indenture, the Trustee shall
declare all Loan Payments and Notes to be immediately due and payable, whereupon
the same shall become immediately due and payable;
(b) The Bank or the Trustee may have access to, inspect, examine and make
copies of the books, records, accounts and financial data of the Borrower
pertaining to the Project; and
(c) The Issuer or the Trustee may pursue all remedies now or hereafter
existing at law or in equity to collect all amounts then due and thereafter to
become due under this Agreement, the Letter of Credit or the Notes or to enforce
the performance and observance of any other obligation or agreement of the
Borrower under those instruments.
Notwithstanding the foregoing, the Issuer shall not be obligated to
take any step which in its opinion will or might cause it to expend time or
money or otherwise incur liability unless and until a satisfactory indemnity
bond has been furnished to the Issuer at no cost or expense to the Issuer. Any
amounts collected as Loan Payments or applicable to Loan Payments and any other
amounts which would be applicable to payment of Bond Service Charges 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 or, if the
outstanding Bonds have been paid and discharged in accordance with the
provisions of the Indenture, shall be paid as provided in Section 5.08 of the
Indenture for transfers of remaining amounts in the Bond Fund.
The provisions of this section are subject to the further limitation
that the rescission by the Trustee of its declaration that all of the Bonds are
immediately due and payable also shall constitute an annulment of any
corresponding declaration made pursuant to paragraph (a) of this Section and a
waiver and rescission of the consequences of that declaration and of the Event
of
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Default with respect to which that declaration has been made, provided that
no such waiver or rescission shall extend to or affect any subsequent or other
default or impair any right consequent thereon.
Section 7.3. No Remedy Exclusive. No remedy conferred upon or reserved
to the Issuer or the Trustee by this Agreement is intended to be exclusive of
any other available remedy or remedies, but each and every such remedy shall be
cumulative and shall be in addition to every other remedy given under this
Agreement, the Letter of Credit or any Note, or now or hereafter existing at
law, in equity or by statute. No delay or omission to exercise any right or
power accruing upon any default shall impair that right or power or shall be
construed to be a waiver thereof, but any such right and power may be exercised
from time to time and as often as may be deemed expedient. In order to entitle
the Issuer or the Trustee to exercise any remedy reserved to it in this Article,
it shall not be necessary to give any notice, other than any notice required by
law or for which express provision is made herein.
Section 7.4. Agreement to Pay Attorneys' Fees and Expenses. If an
Event of Default should occur and the Issuer or the Trustee should incur fees
and expenses, including attorneys' fees, in connection with the enforcement of
this Agreement, the Letter of Credit or any Note or the collection of sums due
thereunder, the Borrower shall reimburse the Issuer and the Trustee, as
applicable, for the reasonable fees and expenses so incurred upon demand.
Section 7.5. No Waiver. No failure by the Issuer or the Trustee to
insist upon the strict performance by the Borrower of any provision hereof shall
constitute a waiver of their right to strict performance and no express waiver
shall be deemed to apply to any other existing or subsequent right to remedy the
failure by the Borrower to observe or comply with any provision hereof.
The Issuer and the Trustee may waive any Event of Default hereunder
only with the prior written consent of the Bank.
Section 7.6. Notice of Default. The Borrower or the Issuer shall
notify the Trustee and the Bank immediately if it becomes aware of the
occurrence of any Event of Default hereunder or of any fact, condition or event
which, with the giving of notice or passage of time or both, would become an
Event of Default.
(End of Article VII)
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ARTICLE VIII
MISCELLANEOUS
Section 8.1. Term of Agreement. This Agreement shall be and remain in
full force and effect from the date of initial delivery of the Project Bonds
until such time as all of the Bonds shall have been fully paid (or provision
made for such payment) pursuant to the Indenture and all other sums payable by
the Borrower under this Agreement and the Notes shall have been paid, except for
obligations of the Borrower under Sections 3.3, 4.2, 5.3 and 7.4 hereof, which
shall survive any termination of this Agreement.
Section 8.2. Notices. All notices, certificates, requests or other
communications hereunder shall be in writing and shall be deemed to be
sufficiently given when mailed by registered or certified mail, postage prepaid,
and addressed to the appropriate Notice Address. A duplicate copy of each
notice, certificate, request or other communication given hereunder to the
Issuer, the Borrower, the Bank or the Trustee shall also be given to the others.
The Borrower, the Issuer, the Bank and the Trustee, by notice given hereunder,
may designate any further or different addresses to which subsequent notices,
certificates, requests or other communications shall be sent.
Section 8.3. Extent of Covenants of the Issuer; No Personal Liability.
All covenants, obligations and agreements of the Issuer contained in this
Agreement or the Indenture shall be effective to the extent authorized and
permitted by applicable law. No such covenant, obligation or agreement shall be
deemed to be a covenant, obligation or agreement of any present or future
member, officer, agent or employee of the Issuer or the Issuing Authority in
other than his official capacity, and neither the members of the Issuing
Authority nor any official executing the Bonds shall be liable personally on the
Bonds or be subject to any personal liability or accountability by reason of the
issuance thereof or by reason of the covenants, obligations or agreements of the
Issuer contained in this Agreement or in the Indenture.
Section 8.4. Binding Effect. This Agreement shall inure to the benefit
of and shall be binding in accordance with its terms upon the Issuer, the
Borrower and their respective successors and assigns; provided that this
Agreement may not be assigned by the Borrower (except in connection with a sale,
lease or grant of use pursuant to Section 5.2 hereof) and may not be assigned by
the Issuer except to the Trustee pursuant to the Indenture or as otherwise may
be necessary to enforce or secure payment of Bond Service Charges. This
Agreement may be enforced only by the parties, their assignees and others who
may, by law, stand in their respective places.
Section 8.5. Amendments and Supplements. Except as otherwise expressly
provided in this Agreement, any Note or the Indenture, subsequent to the
issuance of the Project Bonds and prior to all conditions provided for in the
Indenture for release of the Indenture having been met, this Agreement or any
Note may not be effectively amended, changed, modified, altered or terminated
except in accordance with the applicable provisions of Article XI of the
Indenture.
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Section 8.6. Execution Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be regarded as an original and
all of which shall constitute but one and the same instrument.
Section 8.7. Severability. If any provision of this Agreement, or any
covenant, obligation or agreement contained herein, is determined by a court of
competent jurisdiction to be invalid or unenforceable, that determination shall
not affect any other provision, covenant, obligation or agreement, each of which
shall be construed and enforced as if the invalid or unenforceable portion were
not contained herein. That invalidity or unenforceability shall not affect any
valid and enforceable application thereof, and each such provision, covenant,
obligation or agreement shall be deemed to be effective, operative, made,
entered into or taken in the manner and to the full extent permitted by law.
Section 8.8. Governing Law. This Agreement shall be deemed to be a
contract made under the laws of the State and for all purposes shall be governed
by and construed in accordance with the laws of the State.
Section 8.9. Amounts Remaining in Funds. Any amounts in the Bond Fund
remaining unclaimed by the Holders of Bonds for four years after the due date
thereof (whether at stated maturity, by redemption or pursuant to any mandatory
sinking fund requirements or otherwise), shall be paid to the Borrower; provided
that if the Trustee shall have drawn on the Letter of Credit, and the Bank is
owed any amount by the Borrower pursuant to the Reimbursement Agreement, such
amounts remaining in the Bond Fund shall belong and be paid first to the Bank to
the extent of such unpaid amounts. With respect to that principal of and any
premium and interest on the Bonds to be paid from moneys paid to the Borrower or
the Bank pursuant to the preceding sentence, the Holders of the Bonds entitled
to those moneys shall look solely to the Borrower for the payment of those
moneys.
Further, any amounts remaining in the Bond Fund (subject to any
limitations in the Indenture) and any other special funds or accounts (other
than the Rebate Fund) created under this Agreement or the Indenture after all of
the outstanding Bonds shall be deemed to have been paid and discharged under the
provisions of the Indenture and all other amounts required to be paid under this
Agreement, the Notes and the Indenture have been paid, shall be paid (to the
extent that those moneys are in excess of the amounts necessary to effect the
payment and discharge of the outstanding Bonds) first to the Bank to the extent
that any amount is owed by the Borrower to the Bank under the terms of the
Letter of Credit or Reimbursement Agreement, and then to the Borrower.
(End of Article VIII)
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IN WITNESS WHEREOF, the Issuer and the Borrower have caused this
Agreement to be duly executed in their respective names, all as of the date
first above written.
CITY OF ELKHART, INDIANA
By:
--------------------------------
Mayor
(Seal)
Attest:
----------------------------
Clerk
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▇▇▇▇▇▇▇ INNS, INC.
By:
--------------------------------
Its: President
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EXHIBIT A
PROJECT
The economic development facilities consisted of the acquisition,
construction and equipping of a 125-room motel located in the City of Elkhart,
Indiana, located at the intersection of the Indiana East-West Toll Road and
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
▇▇
▇▇▇▇▇▇▇ ▇
PROJECT SITE
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EXHIBIT C
PROJECT NOTE
$3,305,000 December 1, 1999
▇▇▇▇▇▇▇ Inns, Inc., a Georgia Corporation (the "Borrower"), for value
received, promises to pay to Firstar Bank, N.A., as trustee (the "Trustee")
under the Indenture hereinafter referred to the principal sum of
THREE MILLION THREE HUNDRED FIVE THOUSAND DOLLARS
($3,305,000)
and to pay (i) interest on the unpaid balance of such principal sum from and
after the date of this Note at the interest rate or interest rates borne by the
Project Bonds and (ii) interest on overdue principal, and to the extent
permitted by law, on overdue interest, at the interest rate provided under the
terms of the Project Bonds.
This Note has been executed and delivered by the Borrower pursuant to a
certain Loan Agreement (the "Agreement"), dated as of December 1, 1999, between
the City of Elkhart, Indiana (the "Issuer") and the Borrower. Terms used but not
defined herein shall have the meanings ascribed to such terms in the Agreement
and the Indenture, as defined below.
Under the Agreement, the Issuer has loaned the Borrower the proceeds
received from the sale of $3,305,000 aggregate principal amount of City of
Elkhart, Indiana Adjustable Rate Economic Development Revenue Refunding Bonds,
Series 1999 (▇▇▇▇▇▇▇ Inns, Inc. Project), dated as of the date of their issuance
(the "Project Bonds"), to be applied to assist the Borrower in the refinancing
of the Project. The Borrower has agreed to repay such loan by making Loan
Payments at the times and in the amounts set forth in this Note. The Project
Bonds have been issued, concurrently with the execution and delivery of this
Note, pursuant to, and are secured by, the Trust Indenture (the "Indenture"),
dated as of December 1, 1999, between the Issuer and the Trustee.
To provide funds to pay the Bond Service Charges on the Project Bonds
as and when due, or to reimburse the Bank for draws under the Letter of Credit
to make such payments, the
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32
Borrower hereby agrees to and shall make Loan Payments as follows: (a) on each
Interest Payment Date the amount equal to interest due on the Project Bonds on
such Interest Payment Date, and (b) annually on each December 1, as specified in
Appendix I attached hereto as a part hereof, the amount specified opposite such
date in such Appendix I, pursuant to the mandatory redemption provisions of
Section 4.01 of the Indenture or upon maturity of the Project Bonds (each such
day being a "Loan Payment Date"). In addition, to provide funds to pay the Bond
Service Charges on the Project Bonds as and when due at any other time, the
Borrower hereby agrees to and shall make Loan Payments on any other date on
which any Bond Service Charges on the Project Bonds shall be due and payable,
whether upon acceleration, call for redemption or otherwise.
If payment or provision for payment in accordance with the Indenture is
made in respect of the Bond Service Charges on the Project Bonds from moneys
other than Loan Payments, this Note shall be deemed paid to the extent such
payments or provision for payment of Bond Service Charges has been made. The
Borrower shall receive a credit against its obligation to make Loan Payments
hereunder to the extent of the moneys delivered to the Trustee under and
pursuant to the Letter of Credit for the payment of Bond Service Charges and any
other amounts on deposit in the Bond Fund and available to pay Bond Service
Charges on the Project Bonds pursuant to the Indenture. Subject to the
foregoing, all Loan Payments shall be in the full amount required hereunder.
All Loan Payments shall be payable in lawful money of the United States
of America, in immediately available funds, and shall be made to the Trustee at
its Operations Office for the account of the Issuer, deposited in the Bond Fund
and used as provided in the Indenture.
The obligation of the Borrower to make the payments required hereunder
shall be absolute and unconditional and the Borrower shall make such payments
without abatement, diminution or deduction regardless of any cause or
circumstances whatsoever including, without limitation, any defense, set-off,
recoupment or counterclaim which the Borrower may have or assert against the
Issuer, the Trustee, the Bank or any other person.
This Note is subject to optional, extraordinary optional and mandatory
prepayment, in whole or in part, upon the terms and conditions set forth in
Article VI of the Agreement. Any optional or extraordinary optional prepayment
is also subject to satisfaction of any applicable notice, deposit or other
requirements set forth in the Agreement or the Indenture.
Whenever an Event of Default under Section 7.1 of the Agreement shall
have occurred, the unpaid principal amount of and any premium and accrued
interest on this Note may be declared or may become due and payable as provided
in Section 7.2 of the Agreement; provided that any annulment of a declaration of
acceleration with respect to the Bonds under the Indenture shall also constitute
an annulment of any corresponding declaration with respect to this Note.
33
IN WITNESS WHEREOF, the Borrower has signed this Note as of the date
first above written.
▇▇▇▇▇▇▇ INNS, INC.
By:
-----------------------------------------
President
34
APPENDIX I
Date Principal Payment
December 1, 2000 $85,000
December 1, 2001 90,000
December 1, 2002 100,000
December 1, 2003 110,000
December 1, 2004 120,000
December 1, 2005 130,000
December 1, 2006 145,000
December 1, 2007 160,000
December 1, 2008 175,000
December 1, 2009 190,000
December 1, 2010 210,000
December 1, 2011 230,000
December 1, 2012 255,000
December 1, 2013 280,000
December 1, 2014 310,000
December 1, 2015 340,000
December 1, 2016 375,000
35
TRUST INDENTURE
between
City of Elkhart, Indiana
and
Firstar Bank, N.A.
as Trustee
----------------------------------------
Securing:
$3,305,000
CITY OF ELKHART, INDIANA
ADJUSTABLE RATE ECONOMIC DEVELOPMENT
REVENUE REFUNDING BONDS,
SERIES 1999
(▇▇▇▇▇▇▇ INNS, INC. PROJECT)
----------------------------------------
Dated as of December 1, 1999
----------------------------------------
----------------------------------------
TRUST INDENTURE
36
TABLE OF CONTENTS
-----------------
PAGE
----
ARTICLE I DEFINITIONS 4
Section 1.01. Definitions 4
Section 1.02. Interpretation 17
Section 1.03. Captions and Headings 17
ARTICLE II AUTHORIZATION AND TERMS OF PROJECT
BONDS; ADDITIONAL BONDS 18
Section 2.01. Authorized Amount of Bonds 18
Section 2.02. Issuance of Project Bonds 18
Section 2.03. Maturity and Interest 19
Section 2.04. Tender Options 21
Section 2.05. Mandatory Tender Upon Conversion to a New Interest Rate Mode 24
Section 2.06. Mandatory Tender Upon Delivery of an Alternate Letter of Credit 25
Section 2.07. Mandatory Tender Upon Expiration of the Letter of Credit 25
Section 2.08. Delivery of Project Bonds 26
Section 2.09. Issuance and Delivery of Additional Bonds 27
ARTICLE III TERMS OF BONDS GENERALLY 29
Section 3.01. Form of Bonds 29
Section 3.02. Variable Terms 29
Section 3.03. Execution and Authentication of Bonds 29
Section 3.04. Source of Payment of Bonds 30
Section 3.05. Payment and Ownership of Bonds 30
Section 3.06. Transfer and Exchange of Bonds 31
Section 3.07. Mutilated, Lost, Wrongfully Taken, Undelivered or Destroyed Bonds 32
Section 3.08. Cancellation of Bonds 33
ARTICLE IV REDEMPTION OF BONDS 34
Section 4.01. Terms of Redemption of Project Bonds 34
Section 4.02. Partial Redemption 36
Section 4.03. Issuer's Election to Redeem 37
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37
TABLE OF CONTENTS
-----------------
(CONTINUED)
PAGE
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Section 4.04. Notice of Redemption 37
Section 4.05. Payment of Redeemed Bonds 39
Section 4.06. Variation of Redemption Provisions 39
ARTICLE V PROVISIONS AS TO FUNDS,
PAYMENTS, PROJECT AND AGREEMENT 40
Section 5.01. Creation of Project Fund 40
Section 5.02. Disbursements From and Records of Project Fund 40
Section 5.03. Creation of Bond Fund; Letter of Credit 40
Section 5.04. Creation of Remarketing Reimbursement Fund 43
Section 5.05. Investment of Bond Fund, Project Fund,
Rebate Fund and Remarketing Reimbursement Fund 43
Section 5.06. Moneys to be Held in Trust 44
Section 5.07. Nonpresentment of Bonds 45
Section 5.08. Repayment to the Bank or the Borrower from the Bond Fund 45
Section 5.09. Alternate Letter of Credit 45
Section 5.10. Compliance with Section 148 of the Code 46
Section 5.11. Rebate Fund 46
ARTICLE VI THE TRUSTEE AND REMARKETING AGENT 48
Section 6.01. Trustee's Acceptance and Responsibilities 48
Section 6.02. Certain Rights and Obligations of the Trustee 49
Section 6.03. Fees, Charges and Expenses of Trustee 52
Section 6.04. Intervention by Trustee 52
Section 6.05. Successor Trustee 53
Section 6.06. Appointment of Co-Trustee 53
Section 6.07. Resignation by the Trustee 54
Section 6.08. Removal of the Trustee 54
Section 6.09. Appointment of Successor Trustee 54
Section 6.10. Adoption of Authentication 55
Section 6.11. Dealing in Bonds 55
Section 6.12. Representations, Agreements and Covenants of Trustee 56
Section 6.13. Concerning the Remarketing Agent 56
Section 6.14. Qualifications of Remarketing Agent 56
Section 6.15. Remarketing of Project Bonds 57
Section 6.16. Delivery of Purchased Project Bonds and Remarketing
of Pledged Bonds 59
ii
38
TABLE OF CONTENTS
-----------------
(CONTINUED)
PAGE
----
ARTICLE VII DEFAULT PROVISIONS AND REMEDIES
OF TRUSTEE AND HOLDERS 61
Section 7.01. Defaults; Events of Default 61
Section 7.02. Notice of Default 62
Section 7.03. Acceleration 62
Section 7.04. Other Remedies; Rights of Holders 63
Section 7.05. Right of Holders to Direct Proceedings 64
Section 7.06. Application of Moneys 64
Section 7.07. Remedies Vested in Trustee 65
Section 7.08. Rights and Remedies of Holders 66
Section 7.09. Termination of Proceedings 66
Section 7.10. Waivers of Events of Default 67
ARTICLE VIII SUPPLEMENTAL INDENTURES 68
Section 8.01. Supplemental Indentures Generally 68
Section 8.02. Supplemental Indentures Not Requiring Consent of Holders 68
Section 8.03. Supplemental Indentures Requiring Consent of Holders 69
Section 8.04. Acceptance of Supplemental Credit Facility 71
Section 8.05. Consent of Borrower 71
Section 8.06. Authorization to Trustee; Effect of Supplement 71
Section 8.07. Opinion of Counsel 72
Section 8.08. Modification by Unanimous Consent 72
ARTICLE IX DEFEASANCE 73
Section 9.01. Release of Indenture 73
Section 9.02. Payment and Discharge of Bonds 73
Section 9.03. Survival of Certain Provisions 74
ARTICLE X COVENANTS AND AGREEMENTS
OF THE ISSUER 76
Section 10.01. Covenants and Agreements of the Issuer 76
Section 10.02. Observance and Performance of Covenants, Agreements
Authority and Actions 77
Section 10.03. Payment Solely From Sources Described in Indenture
and Agreement 77
iii
39
THIS TRUST INDENTURE (the "Indenture") dated as of December 1, 1999 by
and between the City of Elkhart, Indiana, a municipal corporation existing
under the laws of the State of Indiana (the "Issuer"), and Firstar Bank, N.A.,
Richmond, Indiana, a national banking association operating and duly authorized
to exercise corporate trust powers in the State of Indiana, as trustee (the
"Trustee"), under the circumstances summarized in the following recitals (the
capitalized terms not defined in the recitals and granting clauses being used
therein as defined in Article I hereof):
A. By virtue of the authority of the laws of the State of
Indiana, and particularly Indiana Code 36-7-11.9 and 12, as it may from time to
time be supplemented and amended, and pursuant to the Bond Ordinance referred
to below, the Issuer is authorized to enter into this Indenture and to do or
cause to be done all the acts and things herein provided or required to be
done, to issue the Project Bonds, and to use the proceeds of the Project Bonds
to make a loan that will provide moneys to effect the redemption of the Prior
Bonds which were issued in 1986 to assist in financing the Project, as defined
in the Loan Agreement, which Project created diversification of economic
development and promotion of job opportunities in or near such Issuer;
B. The Issuer has determined to issue and sell the Project Bonds
in the principal amount of $3,305,000 for the purpose described above and to
enter into this Indenture and secure the Bonds by the pledge and assignment of
the Revenues;
C. All acts and conditions required to happen, exist and be
performed precedent to and in the issuance of the Project Bonds and the
execution and delivery of this Indenture have happened, exist and have been
performed, or at the delivery of the Project Bonds will exist, will have
happened and will have been performed (i) to make the Project Bonds, when
issued, delivered and authenticated, valid obligations of the Issuer in
accordance with the terms hereof and (ii) to make this Indenture a valid,
binding and legal trust agreement for the security of the Bonds in accordance
with its terms; and
D. The Trustee has accepted the trusts created by this
Indenture, and in evidence thereof has joined in the execution hereof;
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that to secure the payment
of Bond Service Charges on the Bonds, to secure the performance and observance
of all of the covenants, agreements, obligations and conditions contained
therein and herein, and to declare the terms and conditions upon and subject to
which the Bonds are and are intended to be issued, held, secured and enforced,
and in consideration of the premises and the acceptance by the Trustee of the
trusts created herein and of the purchase and acceptance of the Project Bonds
by the Holders, and for other good and valuable consideration, the receipt of
which is acknowledged, the Issuer has executed and delivered this Indenture and
absolutely assigns hereby to the Trustee, and to its successors in trust, and
its and their assigns, all right, title and interest of the Issuer in and to
(i) the Revenues, including, without limitation, all Loan Payments and other
amounts receivable by or on behalf of the Issuer under the Agreement in respect
of
2
40
repayment of the Loan and all moneys and investments in the Bond Fund and the
Project Fund; (ii) the Agreement, except for the Unassigned Issuer's Rights;
and (iii) the Project Note; all of which the Trustee shall hold subject to the
following:
(a) except as provided otherwise herein, for the equal and proportionate
benefit, security and protection of all present and future Holders of the
Bonds,
(b) for the enforcement of the payment of the principal of and interest
and any premium on the Bonds, when payable, according to the true intent and
meaning thereof and of this Indenture, and
(c) to secure the performance and observance of and compliance with the
covenants, agreements, obligations, terms and conditions of this Indenture;
in each case, without preference, priority or distinction, as to lien
or otherwise, of any one Bond over any other by reason of designation, number,
date of the Bonds or of authorization, issuance, sale, execution,
authentication, delivery or maturity thereof, or otherwise, so that each Bond
and all Bonds shall have the same right, lien and privilege under this
Indenture and shall be secured equally and ratably hereby, it being intended
that the lien and security of this Indenture shall take effect from the date
hereof, without regard to the date of the actual issue, sale or disposition of
the Bonds, as though upon that date all of the Bonds were actually issued, sold
and delivered to purchasers for value; provided, however, that moneys drawn
under the Letter of Credit shall be applied only to the payment of the
principal of and interest on the Project Bonds or the purchase price of the
Project Bonds or Beneficial Ownership Interests; and provided further however,
that
(i) if the principal of the Bonds and the interest due or to become due
thereon together with any premium required by redemption of any of the Bonds
prior to maturity shall be well and truly paid, at the times and in the manner
to which reference is made in the Bonds, according to the true intent and
meaning thereof, or the outstanding Bonds shall have been paid and discharged
in accordance with Article IX hereof, and
(ii) if there shall have been paid (or provided for) to the Issuer, the
Trustee and the Bank, all sums of money due or to become due to them in
accordance with the terms and provisions hereof and of the Loan Agreement, this
Indenture and the rights assigned hereby shall cease, determine and be void,
except as provided in Section 9.03 hereof with respect to the survival of
certain provisions hereof; otherwise, this Indenture shall be and remain in
full force and effect.
All Bonds issued hereunder and secured hereby are to be issued,
authenticated and delivered, and all Revenues assigned hereby are to be dealt
with and disposed of, as provided in this Indenture. The Issuer has agreed and
covenanted, and agrees and covenants with the Trustee and with each and all
Holders, as follows:
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41
ARTICLE I
DEFINITIONS
Section 1.01. Definitions . In addition to the words and terms defined
elsewhere in this Indenture, the words and terms defined in this Section shall
have the meanings herein specified unless the context or use clearly indicates
another or different meaning or intent. Those words and terms not expressly
defined herein and used herein with initial capitalization where rules of
grammar do not otherwise require capitalization, or which are otherwise defined
terms under the Agreement, as hereinafter defined, shall have the meanings
assigned to them in the Agreement.
"Act" means Indiana Code 36-7-11.9 and 12, as supplemented and
amended.
"Additional Bonds" means Bonds which may be issued under Section 2.09
of this Indenture.
"Additional Notes" means any non-negotiable promissory note or notes,
in addition to the Project Note, delivered by the Borrower to the Trustee in
connection with the issuance of Additional Bonds, as provided in the Agreement.
"Adjustable Rate" means any interest rate to be borne by the Project
Bonds other than the Fixed Interest Rate.
"Agreement" means the Loan Agreement dated as of even date with this
Indenture, between the Issuer and the Borrower, as amended or supplemented from
time to time.
"Alternate Letter of Credit" means an irrevocable letter of credit
authorizing drawings thereunder by the Trustee issued by a bank, a trust
company or other financial institution and meeting the requirements of Section
5.09 hereof, which Alternate Letter of Credit shall be the same in all material
respects (except as to expiration date) as the Letter of Credit.
"Authorized Borrower Representative" means the person designated at
the time pursuant to the Agreement to act on behalf of the Borrower by written
instrument furnished to the Issuer and the Trustee, containing the specimen
signature of such person and signed by any officer of the Borrower. Such
instrument may designate an alternate or alternates.
"Bank" means Firstar Bank, N.A., a national banking association, and
its successors and assigns. Upon issuance and effectiveness of any Alternate
Letter of Credit, "Bank" shall mean the issuer thereof and its successors and
assigns.
"Beneficial Owner" means, with respect to the Project Bonds, a Person
owning a Beneficial Ownership Interest therein, as evidenced to the
satisfaction of the Trustee.
4
42
"Beneficial Ownership Interest" means the beneficial right to receive
payments and notices with respect to the Project Bonds which are held by the
Depository under a book entry system.
"Bond Counsel" means an attorney-at-law or firm of attorneys (other
than an employee of the Borrower but including any law firm serving as counsel
to the Borrower) satisfactory to the Trustee, the Bank and the Issuer and
nationally recognized as experienced in matters relating to the tax exemption
of interest on bonds of states and political subdivisions.
"Bond Fund" means the Bond Fund created in Section 5.03 hereof.
"Bond Legislation" or "Bond Ordinance" means (a) when used with
reference to the Project Bonds, the ordinance providing for their issuance and
approving the Agreement, this Indenture, the Bond Purchase Agreement, the
Letter of Representations and related matters; (b) when used with reference to
an issue of Additional Bonds, the ordinance providing for the issuance of the
Project Bonds, to the extent applicable, and the ordinance providing for the
issuance of the Additional Bonds and approving any amendment or supplement to
the Agreement, any Supplemental Indenture and related matters; and (c) when
used with reference to Bonds when Additional Bonds are outstanding, the
ordinance providing for the issuance of the Project Bonds and the ordinance
providing for the issuance of the then outstanding and the then to be issued
Additional Bonds; in each case as amended or supplemented from time to time.
The Bond Legislation is incorporated herein by reference.
"Bond Purchase Agreement" means, as to the Project Bonds, the Bond
Purchase Agreement dated as of or after the date hereof but prior to the
initial delivery of the Project Bonds, among the Issuer, the Underwriter and
the Borrower and, as to any Additional Bonds, the bond purchase agreement
provided for in the Bond Legislation providing for the issuance of the
Additional Bonds.
"Bond Purchase Date" means any Bond Purchase Date as defined and
provided for in Sections 2.04, 2.05 or 2.06 hereof.
"Bond Service Charges" means, for any series of Bonds, the principal
of, premium, if any, and interest on such Bonds for any period or payable at
any time, whether due on an Interest Payment Date, at maturity or upon
acceleration or redemption.
"Bonds" means the Project Bonds and any Additional Bonds.
"book entry form" or "book entry system" means, with respect to the
Project Bonds, a form or system, as applicable, under which (i) the Beneficial
Ownership Interests may be transferred only through a book entry and (ii)
physical Project Bond certificates in fully registered form are registered only
in the name of a Depository or its nominee as Holder, with the physical Project
Bond certificates "immobilized" in the custody of the Depository. The book
entry system maintained by and the responsibility of the Depository and not
maintained by or the
5
43
responsibility of the Issuer or the Trustee is the record that identifies, and
records the transfer of the interests of, the owners of book entry interests in
the Project Bonds.
"Borrower" means, ▇▇▇▇▇▇▇ Inns, Inc., a Georgia Corporation.
"Business Day" means a day of the year, other than (i) a Saturday,
Sunday, or a legal holiday on which the Drawing Office of the Bank, the
principal office of the Remarketing Agent, or the Operations Office of the
Trustee, is not open for the purpose of conducting substantially all of the
Bank's, the Remarketing Agent's or the Trustee's business activities, or (ii) a
legal holiday on which the principal offices of commercial banks in New York,
New York are closed, or (iii) a day on which The New York Stock Exchange is
closed.
"Clerk" means the Clerk of the Issuer.
"Closing Date" means, with respect to the Project Bonds, the date of
delivery of and payment for the Project Bonds.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time. References to the Code and Sections of the Code include relevant
applicable regulations and proposed regulations thereunder (and under the
related provisions of the Internal Revenue Code of 1954, as amended) and any
successor provisions to those Sections, regulations or proposed regulations.
"Depository" means any securities depository that is a clearing agency
under federal law operating and maintaining, with its participants or
otherwise, a book entry system to record ownership of book entry interests in
Bonds, and to effect transfers of book entry interests in Bonds in book entry
form, and includes and means initially The Depository Trust Company (a limited
purpose trust company), New York, New York.
"Determination of Taxability" means and shall occur when, (i) the
Trustee receives written notice from the Borrower, supported by an opinion of
Bond Counsel, that interest on the Project Bonds is includable in the gross
income of Holders of the Project Bonds for federal income tax purposes or (ii)
the Internal Revenue Service shall claim in writing that interest on the
Project Bonds is includable in the gross income of Holders of the Project Bonds
for federal income tax purposes; provided, that such a claim shall not be
deemed a Determination of Taxability unless the Borrower is afforded reasonable
opportunity (at the Borrower's sole expense and for a period not to exceed 2
years) to pursue any judicial or administrative remedy available to the
Borrower with respect to such claim.
"Direct Participant" means a Participant as defined in the Letter of
Representations.
"Drawing Office" means the office maintained by the Bank or any
affiliate of the Bank at which documents required to effect draws on the Letter
of Credit must be presented, which office is initially located in Louisville,
Kentucky.
6
44
"Eligible Funds" means (i) with respect to funds used to pay principal
and interest on the Bonds, amounts on deposit in a separate account of the Bond
Fund (other than funds derived from a draw on the Letter of Credit) for a
continuous period of 91 consecutive days during which there shall not have
occurred the filing of a voluntary or involuntary petition in bankruptcy under
the United States Bankruptcy Code (as it may be amended from time to time), or
the commencement of a proceeding under any other applicable laws concerning
insolvency, reorganization or bankruptcy, by or against the Borrower or the
Issuer, unless such petition or proceeding shall have been dismissed and such
dismissal shall be final and not subject to appeal, and (ii) with respect to
funds used to pay premium on Bonds, any amount on deposit in the Bond Fund.
"Eligible Investments" means any of the following which at the time
are legal investments under the laws of the State for moneys held hereunder and
then proposed to be invested therein:
(i) Government Obligations;
(ii) bonds, debentures, notes or other evidences of indebtedness
issued by any agency or other governmental or government-sponsored
agencies which may be hereafter created by the United States,
provided, however, that the full and timely payment of the securities
issued by each such agency or government-sponsored agency is secured
by the full faith and credit of the United States;
(iii) certificates of deposit of, or time or demand deposits in,
any bank (including the Trustee and any of its affiliates) or savings
and loan association rated or having securities rated at the time of
purchase in one of the three highest rating categories (without regard
to modifiers) of Moody's or S&P;
(iv) certificates which evidence ownership of the right to the
payment of the principal of and interest on obligations described in
clauses (i) and (ii) of this definition, provided that such
obligations are held in the custody of a bank or trust company
acceptable to the Trustee in a special account separate from the
general assets of such custodian;
(v) obligations which are rated, at the time of purchase, in one
of the two highest rating categories (without regard to modifiers) of
Moody's and the interest on which is not includible in gross income
for federal income tax purposes and the timely payment of the
principal of and interest on which is fully provided for by the
deposit in trust or escrow of cash or obligations described in clauses
(vi) or (ii) of this definition;
(vi) guaranteed investment contracts or other similar financial
instruments with a commercial bank, insurance company or other
financial institution (including the Trustee and any of its
affiliates) whose long term debt obligations are rated, at the time of
7
45
purchase, in one of the two highest rating categories (without regard
to modifiers) by Moody's;
(vii) mutual funds invested primarily in obligations described in
clauses (i), (ii) and (viii) of this definition, including any
proprietary mutual fund of the Trustee for which the Trustee or an
affiliate of the Trustee serves as investment advisor or provides
other services to such mutual fund and receives reasonable
compensation therefor, and rated, at the time of purchase, in one of
the two highest rating categories (without regard to modifiers) by
Moody's;
(viii) repurchase agreements issued by financial institutions
(including the Trustee and any of its affiliates) (a) insured by the
Federal Deposit Insurance Corporation or (b) whose senior debt
obligations at the time of purchase are rated in any of the three
highest rating categories (without regard to modifiers) by Moody's;
provided, such repurchase agreements are subject to perfected security
interests in the investment securities of the kind specified in
paragraphs (i) or (ii) above, which have a fair market value,
exclusive of accrued interest, at least equal to the amount invested
in the repurchase agreement; and provided further (1) the Trustee or a
custodian acting on behalf of the Trustee has possession of the
collateral, (2) the Trustee has a perfected first security interest in
the collateral, (3) the collateral is free and clear of any
third-party liens, (4) failure to maintain the requisite collateral
percentage will require the Trustee to liquidate the collateral, and
(5) the Trustee has received an opinion of counsel that the repurchase
agreement meets the requirements of this subpart (viii); and
(ix) any other security or obligation constituting a permitted
investment under the Act, provided that the Bank and the Borrower
consent to the investment of funds in such security or obligation.
"Event of Default" means an Event of Default hereunder as described in
Section 7.01 hereof.
"Executive" means the Mayor of the Issuer.
"Extraordinary Services" and "Extraordinary Expenses" means all
services rendered and all reasonable expenses properly incurred by the Trustee
under this Indenture, other than Ordinary Services and Ordinary Expenses.
"First Optional Redemption Date" means the December 1 occurring in the
year which is a number of years after the year in which the Fixed Interest Rate
Commencement Date occurs equal to the number of full years between the Fixed
Interest Rate Commencement Date and the maturity date of the Bonds, multiplied
by 1/2 and rounded up to the nearest whole number.
"Five Year Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the
8
46
applicable Interest Rate Adjustment Date, to be the lowest interest rate, for
the Interest Rate Period commencing on the applicable Interest Rate Adjustment
Date and ending on the May 31 or November 30 nearest to but not later than the
date which is five years from the Interest Rate Adjustment Date, in the
judgment of the Remarketing Agent (taking into consideration current
transactions and comparable securities with which the Remarketing Agent is
involved or of which it is aware and prevailing financial market conditions) at
which, as of such Interest Rate Determination Date, the Project Bonds could be
remarketed at par, plus accrued interest (if any), on the Interest Rate
Adjustment Date for that Interest Rate Period or (b) in the event that the
Remarketing Agent has been removed or has resigned and no successor has been
appointed or the Remarketing Agent has failed to determine the Five Year
Interest Rate for whatever reason, or the Five Year Interest Rate cannot be
determined pursuant to clause (a) for whatever reason, the interest rate then
in effect with respect to the Project Bonds, without adjustment; provided that
in no event shall the Five Year Interest Rate exceed the Maximum Rate.
"Fixed Interest Rate" means (a) the fixed rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Period Reset Date, to be the
lowest interest rate, for the period from the Interest Period Reset Date to the
final maturity date of the Project Bonds, in the judgment of the Remarketing
Agent (taking into consideration current transactions and comparable securities
with which the Remarketing Agent is involved or of which it is aware and
prevailing financial market conditions) at which, as of such Interest Rate
Determination Date, the Project Bonds could be remarketed at par, plus accrued
interest (if any), on the Interest Period Reset Date or (b) in the event that
the Remarketing Agent has been removed or has resigned and no successor has
been appointed or the Remarketing Agent has failed to determine the Fixed
Interest Rate for whatever reason, or the Fixed Interest Rate cannot be
determined pursuant to clause (a) for whatever reason, the interest rate then
in effect with respect to the Project Bonds, without adjustment; provided that
in no event shall the Fixed Interest Rate exceed the Maximum Rate.
"Fixed Interest Rate Commencement Date" means the Interest Period
Reset Date from and after which the Project Bonds shall bear interest at the
Fixed Interest Rate, as that date shall be established as provided in Section
2.03 hereof.
"Government Obligations" means (a) direct obligations of the United
States of America for the payment of which the full faith and credit of the
United States of America is pledged, (b) obligations issued by a person
controlled or supervised by and acting as an instrumentality of the United
States of America, the payment of the principal of, premium, if any, and
interest on which is fully guaranteed as a full faith and credit obligation of
the United States of America (including any securities described in (a) or (b)
issued or held in book-entry form on the books of the Department of Treasury of
the United States of America or Federal Reserve Bank), and (c) securities which
represent an interest in the obligations described in (a) and (b) above.
"Holder" or "Holder of a Bond" or "Bondholder" means the Person in
whose name a Bond is registered on the Register.
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"Indirect Participant" means a Person utilizing the book entry system
of the Depository by, directly or indirectly, clearing through or maintaining a
custodial relationship with a Direct Participant.
"Indenture" means this Trust Indenture, as amended or supplemented
from time to time.
"Interest Payment Date" or "Interest Payment Dates" means, (a) as to
the Project Bonds, (i) while the Project Bonds bear interest at the Six Month
Interest Rate, the One Year Interest Rate, the Five Year Interest Rate or the
Fixed Interest Rate, the first day of each June and December, and (ii) while
the Project Bonds bear interest at the Weekly Interest Rate, the One Month
Interest Rate, or the Three Month Interest Rate, the first Business Day of each
month commencing the first Business Day of January, 2000, and (b) as to
Additional Bonds, each date or dates designated as an Interest Payment Date or
Dates in the applicable Supplemental Indenture or Bond Ordinance.
"Interest Period Reset Date" means the date on which the interest rate
on the Project Bonds converts from the Interest Rate Mode applicable to the
Project Bonds prior to such date to a new Interest Rate Mode. An Interest
Period Reset Date shall be the first Business Day of a month; provided that
upon conversion from a Six Month, One Year or Five Year Interest Rate Mode, an
Interest Period Reset Date shall be the first day of a month; and provided
further, that except when converting from a Weekly Interest Rate Mode, an
Interest Period Reset Date may not occur prior to the end of the preceding
Interest Rate Period and shall be the first day or Business Day after the end
of such preceding Interest Rate Period.
"Interest Rate Adjustment Date" means any date on which the interest
rate on the Project Bonds may be adjusted, either as the result of the
conversion of the interest rate on the Project Bonds to a different Interest
Rate Mode, or by adjustment of the interest rate on the Project Bonds within
the applicable Interest Rate Mode. Except as otherwise provided with respect to
an Interest Rate Adjustment Date which is also an Interest Period Reset Date,
an Interest Rate Adjustment Date shall be the first day of the first month of
the Interest Rate Period if the Project Bonds bear interest at the Six Month,
One Year or Five Year Interest Rates; the first Business Day of a month if the
Project Bonds bear interest at the One Month or Three Month Interest Rates; and
if the Project Bonds bear interest at the Weekly Interest Rate, then the
Interest Rate Adjustment Date shall be Wednesday of each week.
"Interest Rate Determination Date" means (i) with respect to the Three
Month Interest Rate, the Six Month Interest Rate, the One Year Interest Rate,
the Five Year Interest Rate and the Fixed Interest Rate, the tenth Business Day
preceding an Interest Rate Adjustment Date, (ii) with respect to the One Month
Interest Rate, the seventh Business Day preceding an Interest Rate Adjustment
Date, and (iii) with respect to the Weekly Interest Rate, not later than 2:00
p.m. according to local time at the Operations Office of the Trustee on Tuesday
of each week, or the next preceding Business Day if such Tuesday is not a
Business Day; provided that upon any conversion to the Weekly Interest Rate
from a different Interest Rate Mode, the first Interest Rate
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Determination Date shall mean not later than 2:00 p.m. according to the local
time at the Operations Office of the Trustee on the Business Day preceding the
Interest Period Reset Date.
"Interest Rate for Advances" means a rate per annum which is equal to
two percent (2.00%) per annum plus the Prime Rate.
"Interest Rate Mode" means any of those modes of interest with respect
to the Project Bonds permitted by this Indenture, specifically, the Weekly
Interest Rate, the One Month Interest Rate, the Three Month Interest Rate, the
Six Month Interest Rate, the One Year Interest Rate, the Five Year Interest
Rate and the Fixed Interest Rate.
"Interest Rate Period" means that period of time for which the
interest rate with respect to the Project Bonds has been determined by the
Remarketing Agent or otherwise as provided in the definition of the applicable
Interest Rate Mode, commencing on the applicable Interest Rate Adjustment Date,
and terminating on the day immediately preceding the following Interest Rate
Adjustment Date.
"Issuer" means the City of Elkhart, Indiana, a municipal corporation
of the State of Indiana.
"Issuing Authority" or "Legislative Authority" means the Common
Council of the Issuer.
"Letter of Credit" means (A) the irrevocable letter of credit to be
issued by the Bank and delivered to the Trustee on the same date as the initial
delivery of the Project Bonds and being an irrevocable obligation to make
payment to the Trustee of up to the amounts therein specified with respect to
(a) the principal amount of the Project Bonds outstanding to enable the Trustee
to pay (i) the principal amount of the Project Bonds when due at maturity or
upon redemption or acceleration, and (ii) an amount equal to the principal
portion of the purchase price of any Project Bonds or Beneficial Ownership
Interests tendered for purchase by the Holders or Beneficial Owners thereof,
plus (b) the amount of interest due on the Project Bonds but not to exceed 45
days' accrued interest (or 195 days interest if the Project Bonds bear interest
at the Six Month Interest Rate, the One Year Interest Rate, the Five Year
Interest Rate or the Fixed Interest Rate) at the Maximum Rate to enable the
Trustee to pay (i) interest on the Project Bonds when due and (ii) an amount
equal to the interest portion, if any, of the purchase price of any Project
Bonds or Beneficial Ownership Interests tendered for purchase by the Holders or
Beneficial Owners thereof; as the same may be transferred, reissued, extended,
amended to change the interest coverage period as contemplated in Section 2.03
hereof, or replaced in accordance with this Indenture, the Reimbursement
Agreement and the Letter of Credit and (B) upon the issuance and effectiveness
thereof, any Alternate Letter of Credit.
"Letter of Credit Termination Date" means the expiration date of the
Letter of Credit (presently December 31, 2002) or of any Alternate Letter of
Credit.
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"Letter of Representations" means the Letter of Representations dated
the Closing Date by and among the Issuer, the Trustee, the Remarketing Agent
and the Depository.
"Loan" means the loan by the Issuer to the Borrower of the proceeds
received from the sale of the Bonds.
"Loan Payments" means the amounts required to be paid by the Borrower
in repayment of the Loan pursuant to the provisions of the Notes and Article IV
of the Agreement.
"Mandatory Bond Purchase Date" means a Mandatory Bond Purchase Date as
defined in Section 2.07 hereof.
"Maximum Rate" means ten percent (10%) per annum.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., a Delaware
corporation, and its successors and assigns.
"Notes" means the Project Note and any Additional Notes.
"One Month Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
lowest interest rate, for the Interest Rate Period commencing on the applicable
Interest Rate Adjustment Date to and including the day preceding the first
Business Day of the next month, in the judgment of the Remarketing Agent
(taking into consideration current transactions and comparable securities with
which the Remarketing Agent is involved or of which it is aware and prevailing
financial market conditions) at which, as of such Interest Rate Determination
Date, the Project Bonds could be remarketed at par, plus accrued interest (if
any), on the Interest Rate Adjustment Date for that Interest Rate Period or (b)
in the event that the Remarketing Agent has been removed or has resigned and no
successor has been appointed, or the Remarketing Agent has failed to determine
the One Month Interest Rate for whatever reason, or the One Month Interest Rate
cannot be determined pursuant to clause (a) for whatever reason, the interest
rate then in effect with respect to the Project Bonds, without adjustment;
provided that in no event shall the One Month Interest Rate exceed the Maximum
Rate.
"One Year Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
lowest interest rate, for the Interest Rate Period commencing on the applicable
Interest Rate Adjustment Date and ending on the May 31 or November 30 nearest
to but not later than the date which is one year from the Interest Rate
Adjustment Date, in the judgment of the Remarketing Agent (taking into
consideration current transactions and comparable securities with which the
Remarketing Agent is involved or of which it is aware and prevailing financial
market conditions) at which, as of such Interest Rate Determination Date, the
Project Bonds could be remarketed at par, plus accrued interest (if any),
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on the Interest Rate Adjustment Date for that Interest Rate Period or (b) in
the event that the Remarketing Agent has been removed or has resigned and no
successor has been appointed, or the Remarketing Agent has failed to determine
the One Year Interest Rate for whatever reason, or the One Year Interest Rate
cannot be determined pursuant to clause (a) for whatever reason, the interest
rate then in effect with respect to the Project Bonds, without adjustment;
provided that in no event shall the One Year Interest Rate exceed the Maximum
Rate.
"Operations Office" means the office maintained by the Trustee or any
affiliate of the Trustee for payment of Bond Service Charges, which office is
initially located at ▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇.
"Ordinary Services" and "Ordinary Expenses" means those services
normally rendered, and those expenses normally incurred, by a trustee under
instruments similar to this Indenture.
"Outstanding Bonds" or "Bonds outstanding" means, as of the applicable
date, all Bonds which have been authenticated and delivered, or which are being
delivered by the Trustee under this Indenture, except:
(a) Bonds canceled upon surrender, exchange or transfer, or canceled
because of payment or redemption on or prior to that date;
(b) Bonds, or the portion thereof, the payment, redemption or purchase for
cancellation of which sufficient money has been deposited and credited with the
Trustee pursuant to this Indenture on or prior to that date for that purpose
(whether upon or prior to the maturity or redemption date of those Bonds);
provided, that if any of those Bonds are to be redeemed prior to their
maturity, notice of that redemption shall have been given or arrangements
satisfactory to the Trustee shall have been made for giving notice of that
redemption, or waiver by the affected Holders of that notice satisfactory in
form to the Trustee shall have been filed with the Trustee;
(c) Bonds, or the portion thereof, which are deemed to have been paid and
discharged or caused to have been paid and discharged pursuant to the
provisions of this Indenture; and
(d) Bonds in lieu of which others have been authenticated under Section
3.07 of this Indenture;
provided that, in determining whether the Holders of the requisite
percentage of Bonds have concurred in any demand, direction, request, notice,
consent, waiver or other action under this Indenture, Bonds, other than Pledged
Bonds, that are owned by the Borrower or any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Borrower shall be disregarded and deemed not to be outstanding for the purpose
of any such determination; provided that for the purposes of determining whether
the Trustee shall be protected in relying on any such direction, consent or
waiver, only such Bonds which the Trustee knows are so owned shall be
disregarded. Bonds so owned that have been pledged in good faith may be regarded
as Outstanding for such purpose, if the pledgee shall establish to the
satisfaction
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of the Trustee the pledgee's right to vote such Bonds and the pledgee is not a
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Borrower. In case of a dispute as to such
right, any decision by the Trustee taken upon the advice of counsel shall be
full protection to the Trustee.
"Person" or words importing persons means firms, associations,
corporations, partnerships (including without limitation, general and limited
partnerships), joint ventures, societies, estates, trusts, corporations, public
or governmental bodies, other legal entities and natural persons.
"Pledged Bonds" means Project Bonds or Beneficial Ownership Interests
registered or recorded in the name of the Bank and securing obligations of the
Borrower under the Reimbursement Agreement as provided in Section 6.16 hereof.
"Predecessor Bond" of any particular Bond means every previous Bond
evidencing all or a portion of the same debt as that evidenced by the particular
Bond. For the purposes of this definition, any Bond authenticated and delivered
under Section 3.07 of this Indenture in lieu of a lost, stolen or destroyed Bond
shall, except as otherwise provided in Section 3.07, be deemed to evidence the
same debt as the lost, stolen or destroyed Bond.
"Prime Rate" means a variable per annum rate of interest equal at all
times to the rate of interest established and quoted by the Bank as its "Prime
Rate", such rate to change contemporaneously with each change in such
established and quoted rate, provided that it is understood that the Prime Rate
shall not necessarily be representative of the rate of interest actually charged
by the Bank on any loan or class of loans.
"Prior Bonds" means the Issuer's Economic Development Bonds, Series
1986 (Signature Elkhart, Ltd. Project), dated as of December 1, 1986, in the
original principal amount of $3,885,000.
"Prior Bonds Trustee" means Bank One Trust Company, NA, as trustee for
the Prior Bonds.
"Project Bonds" means the City of Elkhart, Indiana, Adjustable Rate
Economic Development Revenue Refunding Bonds, Series 1999 (▇▇▇▇▇▇▇ Inns, Inc.
Project), in the original principal amount of $3,305,000 authorized in the Bond
Legislation and Section 2.02 hereof.
"Project Fund" means the Project Fund created pursuant to Section 5.01
hereof.
"Project Note" means the promissory note of the Borrower, dated as of
even date with the Project Bonds initially issued, in the form attached to the
Agreement as Exhibit A and in the principal amount of $3,305,000 evidencing the
obligation of the Borrower to make Loan Payments.
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"Rating Service" means either ▇▇▇▇▇'▇ or S & P.
"Rebate Fund" means the Rebate Fund created pursuant to Section 5.11
hereof.
"Register" means the books kept and maintained by the Trustee for
registration and transfer of Bonds pursuant to Section 3.06 hereof.
"Regular Record Date" means, with respect to any Bond, the Business Day
next preceding an Interest Payment Date applicable to that Bond.
"Reimbursement Agreement" means the Reimbursement Agreement dated as of
December 1, 1999 between the Bank and the Borrower, as amended and supplemented
from time to time. Upon the issuance of any Alternate Letter of Credit,
"Reimbursement Agreement" shall mean the reimbursement or similar agreement
relating to such Alternate Letter of Credit, entered into between the Borrower
and the issuer of such Alternate Letter of Credit.
"Remarketing Agent" means, initially, Banc One Capital Markets, Inc.,
and any Person meeting the qualifications of Section 6.14 hereof and designated
from time to time to act as Remarketing Agent under Section 6.13 hereof.
"Remarketing Reimbursement Fund" means the Remarketing Reimbursement
Fund created in Section 5.04 hereof.
"Revenues" means (a) the Loan Payments, (b) all of the moneys received
or to be received by the Issuer or the Trustee in respect of repayment of the
Loan, (c) all moneys and investments in the Bond Fund, including without
limitation moneys received by the Trustee under or pursuant to the Letter of
Credit, (d) any moneys and investments in the Project Fund, and (e) all income
and profit from the investment of the foregoing moneys.
"S&P" means Standard & Poor's Ratings Group and its successors and
assigns.
"Six Month Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
lowest interest rate, for the Interest Rate Period commencing on the applicable
Interest Rate Adjustment Date and ending on the May 31 or November 30 nearest to
but not later than the date which is six months from the Interest Rate
Adjustment Date, in the judgment of the Remarketing Agent (taking into
consideration current transactions and comparable securities with which the
Remarketing Agent is involved or of which it is aware and prevailing financial
market conditions) at which, as of such Interest Rate Determination Date, the
Project Bonds could be remarketed at par, plus accrued interest (if any), on the
Interest Rate Adjustment Date for that Interest Rate Period or (b) in the event
that the Remarketing Agent has been removed or has resigned and no successor has
been appointed, or the Remarketing Agent has failed to determine the Six Month
Interest Rate for whatever reason,
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or the Six Month Interest Rate cannot be determined pursuant to clause (a) for
whatever reason, the interest rate then in effect with respect to the Project
Bonds, without adjustment; provided that in no event shall the Six Month
Interest Rate exceed the Maximum Rate.
"Special Record Date" means, with respect to any Bond, the date
established by the Trustee in connection with the payment of overdue interest on
that Bond pursuant to Section 3.05 hereof.
"State" means the State of Indiana.
"Supplemental Credit Facility" means a credit facility, agreement or
arrangement in addition to the Letter of Credit, including, without limitation,
a bond insurance policy, collateral arrangement, surety bond, standby placement
agreement or similar arrangement the purpose of which is to enhance the credit
of the Project Bonds in order to obtain or maintain a rating on the Project
Bonds.
"Supplemental Indenture" means any indenture supplemental to this
Indenture entered into between the Issuer and the Trustee in accordance with
Article VIII hereof.
"Three Month Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
lowest interest rate, for the Interest Rate Period commencing on the applicable
Interest Rate Adjustment Date to and including the day preceding the first
Business Day of the March, June, September or December nearest to but not later
than the date which is three months from the Interest Rate Adjustment Date, in
the judgment of the Remarketing Agent (taking into consideration current
transactions and comparable securities with which the Remarketing Agent is
involved or of which it is aware and prevailing financial market conditions) at
which, as of such Interest Rate Determination Date, the Project Bonds could be
remarketed at par, plus accrued interest (if any), on the Interest Rate
Adjustment Date for that Interest Rate Period or (b) in the event that the
Remarketing Agent has been removed or has resigned and no successor has been
appointed, or the Remarketing Agent has failed to determine the Three Month
Interest Rate for whatever reason, or the Three Month Interest Rate cannot be
determined pursuant to clause (a) for whatever reason, the interest rate then in
effect with respect to the Project Bonds, without adjustment; provided that in
no event shall the Three Month Interest Rate exceed the Maximum Rate.
"Trustee" means the Trustee at the time acting as such under this
Indenture, originally Firstar Bank, N.A., Richmond, Indiana, as Trustee, and any
successor Trustee as determined or designated under or pursuant to this
Indenture.
"Unassigned Issuer's Rights" means the Unassigned Issuer's Rights as
defined in the Agreement.
"Underwriter" means Banc One Capital Markets, Inc.
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"Weekly Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
lowest interest rate, for the Interest Rate Period of one week (or less in the
case of any such Interest Rate Period commencing on an Interest Period Reset
Date which is not a Wednesday or ending on the day preceding an Interest Period
Reset Date) commencing on the applicable Interest Rate Adjustment Date, in the
judgment of the Remarketing Agent (taking into consideration current
transactions and comparable securities with which the Remarketing Agent is
involved or of which it is aware and prevailing financial market conditions) at
which, as of such Interest Rate Determination Date, the Project Bonds could be
remarketed at par, plus accrued interest (if any), on the Interest Rate
Adjustment Date for that Interest Rate Period or (b) in the event that the
Remarketing Agent has been removed or has resigned and no successor has been
appointed, or the Remarketing Agent has failed to determine the Weekly Interest
Rate for whatever reason, or the Weekly Interest Rate cannot be determined
pursuant to clause (a) for whatever reason, the interest rate then in effect
with respect to the Project Bonds, without adjustment; provided that in no event
shall the Weekly Interest Rate exceed the Maximum Rate.
Section 1.02 . Interpretation . Any reference herein to the Issuer or
to any officer, employee or official thereof includes entities, officers,
employees or officials succeeding to their respective functions, duties or
responsibilities pursuant to or by operation of law or who are lawfully
performing their functions.
Any reference to a section or provision of the Indiana Constitution or
the Act, or to a section, provision or chapter of the Indiana Code, or to any
statute of the United States of America, includes that section, provision or
chapter as amended, modified, revised, supplemented or superseded from time to
time; provided, that no amendment, modification, revision, supplement or
superseding section, provision or chapter shall be applicable solely by reason
of this paragraph, if it constitutes in any way an impairment of rights or
obligations of the Issuer, the Holders, the Trustee, the Bank, the Remarketing
Agent or the Borrower under this Indenture, the Bond Ordinance, the Bonds, the
Letter of Credit, the Reimbursement Agreement, the Bond Purchase Agreement, the
Notes or any other instrument or document entered into in connection with any of
the foregoing, including without limitation, any alteration of the obligation to
pay Bond Service Charges in the amount and manner, at the times, and from the
sources provided in the Bond Ordinance and this Indenture, except as permitted
herein.
Unless the context indicates otherwise, words importing the singular
number include the plural number, and vice versa. The terms "hereof", "hereby",
"herein", "hereto", "hereunder", "hereinafter" and similar terms refer to this
Indenture; and the term "hereafter" means after, and the term "heretofore" means
before, the date of delivery of this Indenture. Words of any gender include the
correlative words of the other genders, unless the sense indicates otherwise.
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Section 1.03. Captions and Headings. The captions and headings in this
Indenture are solely for convenience of reference and in no way define, limit or
describe the scope or intent of any Articles, Sections, subsections, paragraphs,
subparagraphs or clauses hereof.
ARTICLE II
AUTHORIZATION AND TERMS OF PROJECT BONDS; ADDITIONAL BONDS
Section 2.01. Authorized Amount of Bonds. No Bonds may be issued under
the provisions of this Indenture except in accordance with this Article. The
total authorized principal amount of Project Bonds which shall be issued under
the provisions of this Indenture is $3,305,000. The Issuer may issue, sell and
deliver one or more series of Additional Bonds for the purposes, upon
satisfaction of the conditions and in the manner provided herein.
Section 2.02. Issuance of Project Bonds. It is determined to be
necessary to, and the Issuer shall, issue, sell and deliver $3,305,000 principal
amount of Project Bonds to provide funds to finance the Project. The Project
Bonds shall be designated "City of Elkhart, Indiana Adjustable Rate Economic
Development Revenue Refunding Bonds, Series 1999 (▇▇▇▇▇▇▇ Inns, Inc. Project)";
shall be issuable, unless a Supplemental Indenture shall have been executed and
delivered pursuant to Section 8.02(g) hereof, only in fully registered form,
substantially as set forth in Exhibit A to this Indenture; shall be numbered in
such manner as determined by the Trustee in order to distinguish each Project
Bond from any other Project Bond; shall be in the denominations of $100,000 and
any integral multiple of $5,000 in excess thereof; shall be subject to optional
and mandatory redemption in the amounts, upon the conditions, and at the times
and prices set forth herein; and shall be dated as of the date of their initial
delivery. Upon any exchange or transfer and surrender of any Project Bond in
accordance with the provisions hereof, the Issuer shall execute and the Trustee
shall authenticate and deliver one or more new Project Bonds in exchange
therefor as provided herein.
The Project Bonds shall be originally issued only to a Depository to
be held in a book entry system and: (i) the Project Bonds shall be registered
in the name of the Depository or its nominee, as Bondholder, and immobilized in
the custody of the Depository; (ii) unless otherwise requested by the
Depository, there shall be a single Bond certificate for each Bond maturity;
and (iii) the Project Bonds shall not be transferable or exchangeable, except
for transfer to another Depository or another nominee of a Depository, without
further action by the Issuer as set forth in the next succeeding paragraph of
this Section. While the Project Bonds are in book entry only form, Project
Bonds in the form of physical certificates shall only be delivered to the
Depository.
So long as a book entry system is in effect for the Project Bonds,
except as hereinafter provided with respect to Beneficial Ownership Interests,
the Issuer and Trustee shall recognize and treat the Depository, or its
nominee, as the Holder of the Project Bonds for all purposes, including payment
of Bond Service Charges, giving of notices, and enforcement of remedies. The
crediting of payments of Bond Service Charges on the Project Bonds and the
transmittal of notices and other communications by the Depository to the Direct
Participants in whose Depository account the Project Bonds are recorded, and
such crediting and transmittal by Direct
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Participants to Indirect Participants or Beneficial Owners and by Indirect
Participants to Beneficial Owners, are the respective responsibilities of the
Depository and the Direct Participants and Indirect Participants and are not
the responsibility of the Issuer or the Trustee; provided, however, that the
Issuer and the Trustee understand that neither the Depository or its nominee
shall provide any consent requested of Holders of Project Bonds pursuant to
this Indenture, and that the Depository will mail an omnibus proxy (including a
list identifying the Direct Participants) to the Issuer which assigns the
Depository's, or its nominee's, voting rights to the Direct Participants to
whose accounts at the Depository the Project Bonds are credited as of the
record date for mailing of requests for such consents. Upon receipt of such
omnibus proxy, the Issuer shall promptly provide such omnibus proxy (including
the list identifying the Direct Participants attached thereto) to the Trustee,
who shall then treat such Direct Participants as Holders of the Project Bonds
for purposes of obtaining any consents pursuant to the terms of this Indenture.
As long as the Project Bonds are registered in the name of a
Depository, or its nominee, the Trustee agrees to comply with the terms and
provisions of the Letter of Representations, including the provisions of the
Letter of Representations with respect to any delivery of the Project Bonds to
the Trustee, which provisions shall supersede the provisions of this Indenture
with respect thereto.
If any Depository determines not to continue to act as a Depository
for the Project Bonds held in a book entry system, the Issuer may attempt to
have established a securities depository/book entry system relationship with
another Depository under this Indenture. If the Issuer does not or is unable to
do so, the Issuer and the Trustee, after the Trustee has made provision for
notification of the Beneficial Owners by appropriate notice to the then
Depository, shall permit withdrawal of the Project Bonds from the Depository
and shall authenticate and deliver Project Bonds certificates in fully
registered form to the assignees of the Depository or its nominee or to the
Beneficial Owners. Such withdrawal, authentication and delivery shall be at the
cost and expense (including costs of printing or otherwise preparing and
delivering such replacement Project Bonds) of the Borrower. Such replacement
Project Bonds shall be in the denominations specified in the first paragraph of
this Section 2.02, with a minimum denomination of $100,000.
Section 2.03. Maturity and Interest . The Project Bonds shall bear
interest from the most recent date to which interest has been paid or duly
provided for or, if no interest has been paid or provided for, from their date
of initial delivery, payable on the first Business Day of January, 2000 and
thereafter on each Interest Payment Date. The Project Bonds shall bear interest
at an Adjustable Rate or the Fixed Rate all as more specifically set forth
hereinafter. The Project Bonds shall mature on December 1, 2016, subject to
prior redemption as set forth in Section 4.01 hereof.
From the date of their initial delivery through Tuesday of the
following week, the interest rate on the Project Bonds shall be that rate per
annum, not to exceed the Maximum Rate, as shall be established in the Bond
Purchase Agreement. Thereafter, except as provided in this
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Section 2.03, the Project Bonds shall bear interest at the Weekly Interest Rate
and, for each succeeding Weekly Interest Rate Period, the interest rate on the
Project Bonds shall be the Weekly Interest Rate for such Weekly Interest Rate
period as established on the Interest Rate Determination Date immediately
preceding the commencement of such Weekly Interest Rate period.
On the first Business Day of February, 2000, and on any Interest Period
Reset Date thereafter, the interest rate on the Project Bonds may be converted
to a different Interest Rate upon receipt by the Trustee and the Remarketing
Agent of a written direction from the Borrower, approved in writing by the Bank,
given on behalf of the Issuer, not less than 45 days prior to such Interest
Period Reset Date, to convert the interest rate on the Project Bonds to an
Interest Rate Mode other than the Interest Rate Mode then in effect. Except when
converting from the Weekly Interest Rate Mode, no Interest Period Reset Date
shall be earlier than the day after the end of the last Interest Rate Period for
the Interest Rate Mode in effect on the date of such direction from the
Borrower, the end of such Interest Rate Period to be determined as if such
direction had not been given. Such direction to convert the interest rate on the
Project Bonds to a different Interest Rate Mode shall be accompanied by (a) an
opinion of Bond Counsel selected by the Borrower delivered to the Issuer, the
Trustee, the Bank and the Remarketing Agent, stating that such conversion to the
specified Interest Rate Mode will not adversely affect the exclusion of the
interest on the Project Bonds from gross income for federal income tax purposes,
(b) a written certificate of the Remarketing Agent stating that the interest
coverage period provided by the Letter of Credit is appropriate for the Interest
Rate Mode directed to be in effect and that the Letter of Credit Termination
Date is no earlier than 15 days after the end of the new Interest Rate Period,
or if the conversion is to the Fixed Interest Rate, that the termination date of
the Letter of Credit is no earlier than 15 days after the First Optional
Redemption Date, and (c) a written certificate of the Remarketing Agent stating
that it has received certifications, opinions or other evidence satisfactory to
it that there has been or will be compliance with any applicable state or
federal securities law requirements. If the Project Bonds bear interest at the
Weekly Interest Rate, the One Month Interest Rate or the Three Month Interest
Rate, the interest coverage period for the Letter of Credit shall be at least 45
days of interest at the Maximum Rate. If the Project Bonds bear interest at the
Six Month Interest Rate, the One Year Interest Rate, the Five Year Interest Rate
or the Fixed Interest Rate, then the interest coverage period for the Letter of
Credit shall be at least 195 days of interest at the Maximum Rate. The Borrower
shall be required to provide a Letter of Credit or an Alternate Letter of Credit
which will provide the appropriate interest coverage. Notwithstanding any
provision of this paragraph, no conversion shall be effective (i) if the
proposed conversion is to a One Year Interest Rate, Five Year Interest Rate or
Fixed Interest Rate and the Borrower makes an election on or prior to the day
immediately succeeding any Interest Rate Determination Date not to proceed with
the proposed conversion or (ii) the Trustee has not received on the effective
date of such conversion an opinion of Bond Counsel to the same effect as
described in clause (a) of this paragraph above. In either such event, the
Interest Rate Mode for the Project Bonds will remain as the Interest Rate Mode
then in effect for the Project Bonds without regard to any proposed conversion
and the Remarketing Agent shall determine the interest rate no later than the
scheduled effective date of the proposed conversion. The Project Bonds will
continue to be
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subject to tender for purchase on the scheduled effective date of the proposed
conversion without regard to the failure of such proposed conversion. If the
Trustee shall have sent any notice to Holders regarding the proposed conversion
then in the event of a failure of such conversion, as specified above, the
Trustee shall promptly notify all Holders of such failure, of the reason for
such failure, and of the continuation of the Interest Rate Mode then in effect.
On each Interest Rate Determination Date, the Remarketing Agent shall
give the Trustee telephonic notice (immediately confirmed in writing) of the
interest rate to be borne by the Project Bonds for the following Interest Rate
Period; provided that if the interest rate is determined pursuant to clause (b)
of the definition of the applicable Interest Rate Mode, on the Interest Rate
Determination Date, the Trustee shall give notice to the Borrower and the Bank
as above provided.
If the interest rate on the Project Bonds is converted to a different
Interest Rate Mode, at least 30 days prior to the Interest Period Reset Date
the Trustee shall notify the Holders of all outstanding Project Bonds by first
class mail that upon such Interest Period Reset Date the Project Bonds shall be
converted to a different Interest Rate Mode, which Interest Rate Mode shall be
specified, and that all Project Bonds and Beneficial Ownership Interests shall
be subject to a mandatory tender pursuant to Section 2.05 hereof, subject to
the right of the Holders or Beneficial Owners to affirmatively elect to waive
the mandatory tender and retain their Project Bonds or Beneficial Ownership
Interests.
Interest shall be calculated on the basis of a 360-day year of twelve
30-day months so long as interest is payable at the Six Month Interest Rate,
the One Year Interest Rate, the Five Year Interest Rate or the Fixed Interest
Rate. Interest shall be calculated on the basis of a year of 365 or 366 days,
as applicable, for the number of days actually elapsed so long as interest is
payable at the Weekly Interest Rate, the One Month Interest Rate or the Three
Month Interest Rate. Interest shall be payable on each Interest Payment Date
for the period commencing on the immediately preceding Interest Payment Date
and to and including the day immediately preceding such payment date. Any
calculation of the interest rate to be borne by the Project Bonds shall be
rounded to the nearest one-hundredth of one percent (0.01%). The computation of
the interest rate on the Project Bonds by the Remarketing Agent or the Trustee,
as applicable, shall be binding and conclusive upon the Borrower, the Bank and
the Holders of the Project Bonds.
Notwithstanding anything to the contrary in this Indenture, nothing in
this Indenture shall require the Bank to extend the expiry date of, or to
increase the interest coverage provided in, the Letter of Credit.
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Section 2.04. Tender Options.
(a) While the Project Bonds bear interest at the One Month Interest Rate,
the Three Month Interest Rate, the Six Month Interest Rate, the One Year
Interest Rate or the Five Year Interest Rate, on each Interest Rate Adjustment
Date (each a "Bond Purchase Date") each Holder and each Beneficial Owner shall
have the option to tender for purchase at 100% of the principal amount thereof,
all of the Project Bonds owned by such Holder, or all Beneficial Ownership
Interests owned by such Beneficial Owner, as applicable, or (in either case)
such lesser principal amount thereof (in denominations of $100,000 or integral
multiples of $5,000 in excess thereof, provided that the untendered portion of
any Project Bond or Beneficial Ownership Interest shall be $100,000 or more in
principal amount) as such Holder or Beneficial Owner, as applicable, may
specify in accordance with the terms, conditions and limitations hereinafter
set forth. The purchase price for each such Project Bond or Beneficial
Ownership Interest, or portion thereof, shall be payable in lawful money of the
United States of America, shall equal the principal amount, or such portion
thereof, to be purchased and shall be paid in full on the applicable Bond
Purchase Date.
(b) While the Project Bonds bear interest at the Weekly Interest Rate,
each Holder and each Beneficial Owner shall have the option to tender for
purchase, at 100% of the principal amount thereof plus accrued interest to the
purchase date (a "Bond Purchase Date"), all of the Project Bonds owned by such
Holder, or all Beneficial Ownership Interests owned by such Beneficial Owner,
as applicable, or (in either case) such lesser principal amount thereof (in
denominations of $100,000 or integral multiples of $5,000 in excess thereof,
provided that the untendered portion of any Project Bond or Beneficial
Ownership Interest shall be $100,000 or more in principal amount) as such
Holder of Beneficial Owner, as applicable, may specify in accordance with the
terms, conditions and limitations hereafter set forth. The purchase price of
each such Project Bond or Beneficial Ownership Interest shall be payable in
lawful money of the United States of America, and shall be paid in full on the
applicable Bond Purchase Date.
(c) To exercise the option granted in Section 2.04(a) hereof, the Holder or
Beneficial Owner, as applicable, shall (1) no earlier than fifteen days before
the Bond Purchase Date and no later than 11:00 a.m. according to the local time
at the Operations Office of the Trustee on the eighth Business Day prior to the
Bond Purchase Date, or in the event the Project Bonds bear interest at the One
Month Interest Rate, the fifth Business Day prior to the Bond Purchase Date,
give notice to the Trustee by telecopy or in writing which states (i) the name
and address of the Holder or Beneficial Owner, as applicable, (ii) the principal
amount, CUSIP number and Bond numbers of the Project Bonds or Beneficial
Ownership Interests to be purchased, (iii) that such Project Bonds or Beneficial
Ownership Interests are to be purchased on such Bond Purchase Date pursuant to
the terms hereof, and (iv) that such notice is irrevocable; (2) in the case of a
Beneficial Owner, provide the Trustee with evidence satisfactory to the Trustee
of such Beneficial Owner's Beneficial Ownership Interest; (3) in the case of a
Holder, no later than 10:00 a.m. according to the local time at the Operations
Office of the Trustee on the seventh day preceding such Bond Purchase Date (or
the next preceding Business Day if such seventh day is not a Business Day), or
in the event the Project Bonds bear interest at the One Month Interest
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Rate, the fourth day preceding such Bond Purchase Date (or the next preceding
Business Day if such fourth day is not a Business Day), deliver to the
Operations Office of the Trustee the Project Bonds to be purchased in proper
form, accompanied by fully completed and executed Instructions to Sell, the
form of which shall be printed on the Project Bonds; and (4) in the case of a
Beneficial Owner, no later than 10:00 a.m. (according to the local time at the
Operations Office of the Trustee) on the Bond Purchase Date, cause the transfer
of the Beneficial Owner's Beneficial Ownership Interest on the records of the
Depository, in accordance with the instructions of the Trustee.
To exercise the option granted in Section 2.04(b) hereof, the Holder or
Beneficial Owner, as applicable shall (1) give notice to the Trustee by telecopy
or in writing which states (i) the name and address of the Holder or Beneficial
Owner, as applicable, (ii) the principal amount, CUSIP number and Bond numbers
of the Project Bonds or Beneficial Ownership Interests to be purchased, (iii)
the date on which such Project Bonds or Beneficial Ownership are to be
purchased, which Bond Purchase Date shall be a Business Day not prior to the
seventh (7th) day and not later than the fifteenth (15th) day next succeeding
the date of giving of such notice to the Trustee and, if the interest rate on
the Project Bonds is to be converted from the Weekly Interest Rate to a new
Interest Rate Mode, is a date prior to the Interest Period Reset Date with
respect to the new Interest Rate Mode, and (iv) that such notice is irrevocable;
(2) in the case of a Beneficial Owner, provide the Trustee with evidence
satisfactory to the Trustee of such Beneficial Owner's Beneficial Ownership
Interest; (3) in the case of a Holder, no later than 10:00 a.m. according to the
local time at the Operations Office of the Trustee on the second Business Day
immediately preceding the applicable Bond Purchase Date, deliver to the
Operations Office of the Trustee the Project Bonds to be purchased in proper
form, accompanied by fully completed and executed Instructions to Sell, the form
of which shall be printed on the Project Bonds; and (4) in the case of a
Beneficial Owner, no later than 10:00 a.m. (according to the local time at the
Operations Office of the Trustee) on the Bond Purchase Date, cause the transfer
of the Beneficial Owner's Beneficial Ownership Interest on the records of the
Depository in accordance with the instructions of the Trustee.
Any Project Bonds for which a notice of tender has been given by the
Holder, shall be deemed to be tendered for remarketing notwithstanding any
failure of delivery of such Project Bonds to the Trustee. Subject to the right
of such Holders to receive the purchase price of such Project Bonds(and subject
to the conditions set forth in Section 3.07 hereof), such Project Bonds shall be
null and void and the Trustee shall authenticate and deliver new Project Bonds
in replacement thereof pursuant to the remarketing of such Project Bonds or the
pledge of such Project Bonds to the Bank in lieu of remarketing such Project
Bonds as described in Section 6.16 hereof. Any Beneficial Owners who have
elected to tender Beneficial Ownership Interests shall be obligated to transfer
such Beneficial Ownership Interests on the records of the Depository.
(d) Upon the giving of the notice pursuant to Section 2.04(c) hereof with
respect to Project Bonds or Beneficial Ownership Interests or portions of
either, the Holder's tender of such Project Bonds or portions thereof or the
Beneficial Owner's tender of Beneficial Ownership Interests or portions thereof
shall be irrevocable. Upon receipt of the Project Bonds, the Trustee shall
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determine whether Instructions to Sell have been properly submitted and its
determination shall be binding. If less than all of a Project Bond so delivered
or deemed tendered is to be purchased, the Trustee shall, pursuant to this
Indenture authenticate one or more Project Bonds in exchange therefor,
registered in the name of such Holder, having the aggregate principal amount
being retained by such Holder, and shall deliver such authenticated Project
Bond or Project Bonds to such Holder.
(e) While tendered Project Bonds are in the custody of the Trustee pending
purchase pursuant hereto, the tendering Holders thereof shall be deemed the
owners thereof for all purposes, and interest accruing on tendered Project
Bonds through the day preceding the applicable Bond Purchase Date is to be paid
from the Bond Fund as if such Project Bonds had not been tendered for purchase.
(f) Notwithstanding anything herein to the contrary, any Project Bond or
Beneficial Ownership Interest or portion thereof tendered under Sections 2.04,
2.05, 2.06 or 2.07 hereof will not be purchased if such Project Bond or portion
thereof matures or is redeemed on or prior to the applicable Bond Purchase
Date.
Section 2.05 . Mandatory Tender Upon Conversion to a New Interest Rate
Mode. If at any time the Issuer at the direction of the Borrower shall convert
the interest rate on the Project Bonds to a different Interest Rate Mode in
accordance with the provisions of Section 2.03 hereof, on the Interest Period
Reset Date upon which such conversion is effective, all Project Bonds and
Beneficial Ownership Interests shall be subject to mandatory tender by the
Holders or Beneficial Owners thereof for purchase on the Interest Period Reset
Date (a "Bond Purchase Date") at a price of 100% of the principal amount thereof
plus accrued interest to such Bond Purchase Date. Notwithstanding such mandatory
tender, any Holder or Beneficial Owner may elect to retain its Project Bonds or
Beneficial Ownership Interests by delivering to the Trustee a written notice no
later than 11:00 a.m. according to the local time at the Operations Office of
the Trustee on the eighth Business Day prior to such Interest Period Reset Date
or by 11:00 a.m. according to the local time at the Operations Office of the
Trustee on the fifth Business Day prior to such Interest Period Reset Date if
the Interest Rate Mode is to be converted to the One Month Interest Rate, which
notice shall state that (a) such Holder or Beneficial Owner realizes that the
Project Bonds are being converted to bear interest at the applicable Interest
Rate Mode, (b) unless the interest rate on the Project Bonds is being converted
to the Weekly Interest Rate, such Holder or Beneficial Owner realizes that the
next Bond Purchase Date upon which the Project Bonds or Beneficial Ownership
Interests may be tendered for purchase is the next Interest Rate Adjustment Date
or, if such Project Bonds are being converted to the Fixed Interest Rate, that
such Project Bonds or Beneficial Ownership Interests may no longer be tendered
for purchase, (c) such Holder or Beneficial Owner realizes that any securities
rating on the Bonds may be withdrawn or lowered, and (d) such Holder or
Beneficial Owner affirmatively elects to hold its Project Bonds or Beneficial
Ownership Interests and receive interest at the applicable Interest Rate Mode.
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Project Bonds or Beneficial Ownership Interests with respect to which
the Trustee shall not have received the election required by the preceding
paragraph shall be deemed to have been tendered for purposes of this Section
2.05 whether or not the Holders or Beneficial Owners shall have delivered such
Project Bonds or Beneficial Ownership Interests to the Trustee and without
further action by the Beneficial Owners with regard to Beneficial Ownership
Interests. Subject to the right of the Holders or Beneficial Owners of such
Project Bonds or Beneficial Ownership Interests to receive the purchase price of
such Project Bonds or Beneficial Ownership Interests(and subject to the
conditions set forth in Section 3.07 hereof), such Project Bonds or Beneficial
Ownership Interests shall be null and void and the Trustee shall authenticate
and deliver new Project Bonds in replacement thereof or new Beneficial Ownership
Interests shall be recorded on the records of the Depository pursuant to the
remarketing of such Project Bonds or Beneficial Ownership Interests or the
pledge of such Project Bonds or Beneficial Ownership Interests to the Bank in
lieu of remarketing such Project Bonds or Beneficial Ownership Interests as
described in Section 6.16 hereof.
Section 2.07 . Mandatory Tender Upon Delivery of an Alternate Letter of
Credit. If at any time the Borrower shall provide for the delivery to the
Trustee of an Alternate Letter of Credit in accordance with the provisions of
Section 5.09 hereof, on the Replacement Date, as defined in Section 5.09 hereof
(a "Bond Purchase Date"), all Project Bonds and Beneficial Ownership Interests
shall be subject to mandatory tender by the Holders or Beneficial Owners, as
applicable, for purchase at a price of 100% of the principal amount thereof plus
accrued interest to such Bond Purchase Date. At least 45 days prior to a Bond
Purchase Date, if the Project Bonds are then rated by a Rating Agency, the
Trustee shall give notice of the provision of the Alternate Letter of Credit to
each Rating Agency which then has a rating on the Project Bonds. At least 30
days prior to such Bond Purchase Date the Trustee shall notify the Holders of
all outstanding Project Bonds by first class mail that an Alternate Letter of
Credit is to be delivered by the Borrower to the Trustee. Such notice shall
advise the Holders of the Bond Purchase Date, that the requirements of the
Indenture and the Project Bonds relating to Alternate Letters of Credit have
been met, the name of the financial institution issuing the Alternate Letter of
Credit, the rating, if any, on the Project Bonds upon the provision of the
Alternate Letter of Credit and that all Project Bonds and Beneficial Ownership
Interests shall be subject to mandatory purchase from the Holders and Beneficial
Owners thereof, subject to the right of each Holder or Beneficial Owner to
affirmatively elect to waive the mandatory tender for purchase and retain its
Project Bonds or Beneficial Ownership Interests.
Notwithstanding such mandatory tender, any Holder or Beneficial Owner
may elect to retain its Project Bonds or Beneficial Ownership Interests by
delivering to the Trustee a written notice no later than 11:00 a.m. according to
the local time at the Operations Office of the Trustee on the eighth Business
Day prior to such Bond Purchase Date, which notice shall state that (a) such
Holder or Beneficial Owner has received notice of and realizes that the Borrower
is delivering an Alternate Letter of Credit to the Trustee pursuant to Section
5.09 and (b) such Holder or Beneficial Owner affirmatively elects to retain its
Project Bonds or Beneficial Ownership Interests.
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Project Bonds or Beneficial Ownership Interests with respect to which
the Trustee shall not have received the election required by the preceding
paragraph shall be deemed to have been tendered for purposes of this Section
2.06 whether or not the Holders shall have delivered such Project Bonds to the
Trustee and without further action by the Beneficial Owners with regard to
Beneficial Ownership Interests. Subject to the right of the Holders or
Beneficial Owners of such Project Bonds or Beneficial Ownership Interests to
receive the purchase price of such Project Bonds or Beneficial Ownership
Interests(and subject to the conditions set forth in Section 3.07 hereof), such
Project Bonds or Beneficial Ownership Interests shall be null and void and the
Trustee shall authenticate and deliver new Project Bonds in replacement thereof,
or new Beneficial Ownership Interests shall be recorded on the records of the
Depository, pursuant to the remarketing of such Project Bonds or Beneficial
Ownership Interests or the pledge of such Project Bonds or Beneficial Ownership
Interests to the Bank in lieu of remarketing such Project Bonds or Beneficial
Ownership Interests as described in Section 6.16 hereof.
Section 2.07. Mandatory Tender Upon Expiration of the Letter of Credit.
The Project Bonds and Beneficial Ownership Interests are subject to mandatory
tender in whole on the Interest Payment Date which next precedes the Letter of
Credit Termination Date (the "Mandatory Bond Purchase Date"), for purchase at a
price of 100% of the outstanding principal amount thereof plus accrued interest
to such Mandatory Bond Purchase Date unless, at least 45 days prior to any such
Mandatory Bond Purchase Date, (a) the Bank shall have agreed to an extension or
further extension of the Letter of Credit Termination Date to a date not earlier
than one year from the Letter of Credit Termination Date being extended, or (b)
pursuant to Section 5.09 hereof, the Borrower shall have obtained and delivered
to the Trustee an Alternate Letter of Credit with a termination date not earlier
than one year from the Letter of Credit Termination Date of the Letter of Credit
being replaced. The mandatory tender of Project Bonds or Beneficial Ownership
Interests on a Mandatory Bond Purchase Date may not be waived by the Holders or
Beneficial Owners thereof.
At least 30 days, but not more than 45 days, prior to such Mandatory
Bond Purchase Date pursuant to this Section 2.07, the Trustee shall notify the
Holders of all outstanding Project Bonds by first class mail of the Mandatory
Bond Purchase Date and advise the Holders that all Project Bonds and Beneficial
Ownership Interests shall be subject to mandatory tender on such Mandatory Bond
Purchase Date and that such mandatory tender may not be waived.
Project Bonds or Beneficial Ownership Interests not tendered for
purchase as required by the preceding paragraph shall be deemed to have been
tendered without further action by the Holders or Beneficial Owners thereof,
subject to the right of the Holders or Beneficial Owners of such Project Bonds
or Beneficial Ownership Interests to receive the purchase price of such Project
Bonds or Beneficial Ownership Interests.
Not less than 90 days prior to any Letter of Credit Termination Date,
the Trustee shall provide written notice to the Borrower, the Bank and the
Remarketing Agent of the Letter of Credit
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Termination Date. Failure of the Trustee to provide notice of the Letter of
Credit Termination Date to the Borrower, the Bank and the Remarketing Agent
shall not affect the Project Bonds being subject to mandatory purchase on any
Mandatory Bond Purchase Date.
Section 2.08. Delivery of Project Bonds. Upon the execution and
delivery of this Indenture, and satisfaction of the conditions established by
the Issuer in the Bond Legislation and in the Bond Purchase Agreement for
delivery of the Project Bonds, the Issuer shall execute the Project Bonds and
deliver them to the Trustee. Thereupon, the Trustee shall authenticate the
Project Bonds and deliver them to (or accept them as custodian for) the
Depository, as directed by the Issuer in accordance with this Section 2.08.
Before the Trustee delivers any Project Bonds, the Trustee shall have
received a request and authorization to the Trustee on behalf of the Issuer,
signed by the Executive, to authenticate and deliver the Project Bonds to the
Depository, upon payment to the Trustee of the amount specified therein, which
amount shall be deposited as provided in Sections 5.01 and 5.03 hereof.
Section 2.09 . Issuance and Delivery of Additional Bonds. At the
request of the Borrower, but subject to the written approval of the Bank, the
Issuer may issue Additional Bonds from time to time for any purpose permitted by
the Act.
Any Additional Bonds shall be on a parity with the Project Bonds
(except with respect to any moneys drawn by the Trustee on the Letter of Credit)
and any Additional Bonds theretofore or thereafter issued and outstanding as to
the assignment to the Trustee of the Issuer's right, title and interest in the
Revenues, the Agreement and the Project Note and the Borrower's right, title and
interest in any Revenues comprised of undisbursed Bond proceeds on deposit in
the Project Fund to provide for payment of Bond Service Charges on the Bonds;
provided, that nothing herein shall prevent payment of Bond Service Charges on
any series of Additional Bonds from (i) being otherwise secured and protected
from sources or by property or instruments not applicable to the Project Bonds
and any one or more series of Additional Bonds, or (ii) not being secured or
protected from sources or by property or instruments applicable to the Project
Bonds or one or more series of Additional Bonds.
Before the Trustee shall authenticate and deliver any Additional Bonds,
the Trustee shall receive the following items:
(a) Original executed counterparts of any amendments or supplements to the
Agreement and the Indenture entered into in connection with the issuance of the
Additional Bonds, which are necessary or advisable, in the opinion of Bond
Counsel, to provide that the Additional Bonds will be issued in compliance with
the provisions of this Indenture.
(b) One or more Additional Notes, as required by the Agreement, in an
aggregate principal amount equal to the aggregate principal amount of the
Additional Bonds.
(c) A copy of the written request from the Borrower to the Issuer for
issuance of the Additional Bonds.
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(d) A copy of the applicable Bond Ordinance, certified by the Clerk of the
Issuer.
(e) A request and authorization to the Trustee on behalf of the Issuer,
signed by the Executive, to authenticate and deliver the Additional Bonds to,
or on the order of, the purchaser thereof upon payment to the Trustee of the
amount specified therein (including without limitation, any accrued interest),
which amount shall be deposited as provided in the applicable Bond Ordinance or
Supplemental Indenture.
(f) The written opinion of counsel, who may be counsel for the Issuer,
reasonably satisfactory to the Trustee, to the effect that: (i) the documents
submitted to the Trustee in connection with the request then being made comply
with the requirements of this Indenture; (ii) the issuance of the Additional
Bonds has been duly authorized; (iii) all filings required to be made under
Section 10.01 of this Indenture have been made; and (iv) all conditions
precedent to the delivery of the Additional Bonds have been fulfilled.
(g) A written opinion of Bond Counsel (who also may be the counsel to
which reference is made in paragraph (f)), to the effect that: (i) when
executed for and in the name and on behalf of the Issuer and when authenticated
and delivered by the Trustee, those Additional Bonds will be valid and legal
special obligations of the Issuer in accordance with their terms and will be
secured hereunder equally and on a parity (except with respect to any moneys
drawn by the Trustee under the Letter of Credit) with all other Bonds at the
time outstanding hereunder as to the assignment to the Trustee of the Issuer's
right, title and interest in the Revenues, the Agreement and the Bond Fund
(except as to and any provision made by or pursuant to Sections 4.05, 5.06 or
5.07 hereof) and the moneys and investments therein to provide for payment of
Bond Service Charges on the Bonds; and (ii) the issuance of the Additional
Bonds will not result in the interest on the Bonds outstanding immediately
prior to that issuance becoming includable in gross income for purposes of
federal income taxation.
(h) A written opinion of counsel to the Borrower, reasonably satisfactory
to the Trustee, to the effect that the amendments or supplements to each of the
Agreement and any Additional Notes have been duly authorized, executed and
delivered by the Borrower, and that the Agreement, as amended or supplemented,
and any Additional Notes constitute legal, valid and binding obligations of the
Borrower, in accordance with their respective terms, subject to exceptions
reasonably satisfactory to the Trustee for bankruptcy, insolvency and similar
laws and the application of equitable principles.
(i) The written approval of the Bank to the issuance and delivery of the
Additional Bonds.
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When (i) the documents listed above have been received by the Trustee,
and (ii) the Additional Bonds have been executed and authenticated, the Trustee
shall deliver the Additional Bonds to or on the order of the purchaser thereof,
but only upon payment to the Trustee of the specified amount (including without
limitation, any accrued interest) set forth in the request and authorization to
which reference is made in paragraph (e) above.
(End of Article II)
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ARTICLE III
TERMS OF BONDS GENERALLY
Section 3.01. Form of Bonds. The Bonds, the certificate of
authentication, the form of assignment and the Instructions to Sell shall be
substantially in the respective forms thereof set forth in Exhibit A to this
Indenture with, in the case of Additional Bonds, any omissions, insertions and
variations which may be authorized or permitted by the Bond Ordinance
authorizing, or the Supplemental Indenture entered into in connection with,
those Additional Bonds, all consistent with this Indenture.
All Bonds, unless a Supplemental Indenture shall have been executed
and delivered pursuant to Section 8.02(g) hereof, shall be in fully registered
form, and, except as provided in Section 3.05 hereof and as provided in
Sections 2.02, 2.04, 2.05, 2.06, 2.07, 6.15 and 6.16 with respect to Beneficial
Ownership Interests, the Holder of a Bond shall be regarded as the absolute
owner thereof for all purposes of this Indenture.
The Bonds of one series shall bear any designations which may be
necessary or advisable to distinguish them from Bonds of any other series. The
Bonds shall be negotiable instruments in accordance with the Act, and shall
express the purpose for which they are issued and any other statements or
legends which may be required by law. Each Bond of the same series shall be of
a single maturity, unless the Trustee shall approve the authentication and
delivery of a Bond of more than one maturity.
Section 3.02. Variable Terms. Subject to the provisions of this
Indenture, each series of Bonds shall be dated, shall mature in the years and
the amounts, shall bear interest at the rate or rates per annum, shall be
payable on the dates, shall be of the denominations, shall be subject to
redemption on the terms and conditions and shall have any other terms which are
set forth or provided for in this Indenture in the case of the Project Bonds,
and in this Indenture, the applicable Bond Ordinance and the Supplemental
Indenture, in the case of any issue of Additional Bonds.
Section 3.03. Execution and Authentication of Bonds. Unless otherwise
provided in the applicable Bond Ordinance, each Bond shall be signed by the
Mayor and attested by the Clerk (provided that such signatures may be
facsimiles), and may bear the seal of the Issuer or a facsimile thereof. In case
any officer whose signature or a facsimile of whose signature appears on any
Bond shall cease to be that officer before the issuance of the Bond, the
officer's signature or the facsimile thereof nevertheless shall be valid and
sufficient for all purposes, the same as if he or she had remained in office
until that time. Any Bond may be executed on behalf of the Issuer by an officer
who, on the date of execution is the proper officer, although on the date of the
Bond that person was not the proper officer.
No Bond shall be valid or become obligatory for any purpose or shall
be entitled to any security or benefit under this Indenture unless and until a
certificate of authentication,
68
substantially in the form set forth in Exhibit A to this Indenture, has been
signed by the Trustee for that series on behalf of the Trustee. The
authentication by the Trustee upon any Bond shall be conclusive evidence that
the Bond so authenticated has been duly authenticated and delivered hereunder
and is entitled to the security and benefit of this Indenture. The certificate
of the Trustee may be executed by any person authorized by the Trustee, but it
shall not be necessary that the same authorized person sign the certificates of
authentication on all of the Bonds.
Section 3.04. Source of Payment of Bonds. To the extent provided in and
except as otherwise permitted by this Indenture, (i) the Bonds shall be special
obligations of the Issuer and the Bond Service Charges thereon shall be payable
equally and ratably solely from the Revenues, (ii) the payment of Bond Service
Charges on the Bonds shall be secured by the assignment of Revenues hereunder
and by this Indenture, and (iii) payments due on the Bonds also shall be secured
by the Notes, provided, however, that payment of Bond Service Charges on any
series of Additional Bonds may be otherwise secured and protected from sources
or by property or instruments not applicable to the Project Bonds and any one or
more series of Additional Bonds, or not secured and protected from sources or by
property or instruments applicable to the Project Bonds or one or more series of
Additional Bonds. The Bonds and the interest payable thereon do not constitute a
debt or liability of the Issuer, the State or any political subdivision thereof
within the meaning of the provisions of the Constitution or the statutes of the
State, or a pledge of the faith and credit or the taxing power of the Issuer,
the State or any political subdivision thereof, but shall be payable solely from
the funds pledged therefor in accordance with this Indenture.
Section 3.05. Payment and Ownership of Bonds. The principal of and any
premium on any Bond shall be payable when due to a Holder upon presentation and
surrender of such Bond at the Operations Office of the Trustee. Interest on any
Bond shall be paid on each Interest Payment Date by check or draft which the
Trustee shall cause to be mailed on that date to the person in whose name the
Bond (or one or more Predecessor Bonds) is registered at the close of business
on the Regular Record Date applicable to that Interest Payment Date on the
Register at the address appearing therein. Notwithstanding the foregoing and
while the Bonds are held by a Depository interest on any Bond shall be paid by
wire transfer in immediately available funds to the bank account number and
address filed with the Trustee by such Holder. If and to the extent, however,
that the Issuer shall fail to make payment or provision for payment of interest
on any Bond on any Interest Payment Date, that interest shall cease to be
payable by the Issuer to the Person who was the Holder of that Bond (or of one
or more Predecessor Bonds) as of the applicable Regular Record Date; when moneys
become available for payment of the interest, (a) the Trustee shall, pursuant to
Section 7.06(d) hereof, establish a Special Record Date for the payment of that
interest which shall be not more than 15 nor fewer than 10 days prior to the
date of the proposed payment, and (b) the Trustee shall cause notice of the
proposed payment and of the Special Record Date to be mailed by first class
mail, postage prepaid, to such Holder at its address as it appears on the
Register no fewer than 10 days prior to the Special Record Date and, thereafter,
the interest shall be payable to the Persons who are the Holders of such Bonds
(or their respective Predecessor Bonds) at the close of business on the Special
Record Date. Bond Service Charges shall be payable in lawful money of the United
States of America without deduction for the services of the Trustee.
69
Notwithstanding anything herein to the contrary, when any Bond is
registered in the name of a Depository or its nominee, the principal and
redemption price of and interest on such Bond shall be payable in next day or
federal funds delivered or transmitted to the Depository or its nominee.
Subject to the foregoing, each Bond delivered under this Indenture
upon transfer thereof, or in exchange for or in replacement of any other Bond,
shall carry the rights to interest accrued and unpaid, and to accrue on that
Bond, or which were carried by that Bond.
Except as provided in (i) Sections 2.02, 2.04, 2.05, 2.06, 2.07, 6.15
and 6.16 with respect to Beneficial Ownership Interests, and (ii) this Section
3.05 and the first paragraph of Section 3.07 hereof, (x) the Holder of any Bond
shall be deemed and regarded as the absolute owner thereof for all purposes of
this Indenture, (y) payment of or on account of the Bond Service Charges on any
Bond shall be made only to or upon the order of that Holder or its duly
authorized attorney in the manner permitted by this Indenture, and (z) neither
the Issuer nor the Trustee shall, to the extent permitted by law, be affected
by notice to the contrary. All of those payments shall be valid and effective
to satisfy and discharge the liability upon that Bond, including without
limitation, the interest thereon, to the extent of the amount or amounts so
paid.
Section 3.06. Transfer and Exchange of Bonds. So long as any of the
Bonds remain outstanding, the Issuer will cause books for the registration and
transfer of Bonds, as provided in this Indenture, to be maintained and kept at
the Operations Office of the Trustee.
Subject to the provisions of Section 2.02 hereof, unless otherwise
provided in the applicable Bond Ordinance or Supplemental Indenture, Bonds may
be exchanged, at the option of their Holder, for Bonds of the same series and of
any authorized denomination or denominations in an aggregate principal amount
equal to the unmatured and unredeemed principal amount of, and bearing interest
at the same rate and maturing on the same date or dates as, the Bonds being
exchanged. The exchange shall be made upon presentation and surrender of the
Bonds being exchanged at the Operations Office of the Trustee, together with an
assignment duly executed by the Holder or its duly authorized attorney in any
form which shall be satisfactory to the Trustee.
Subject to the provisions of Section 2.02 hereof, any Bond may be
transferred upon the Register, upon presentation and surrender thereof at the
Operations Office of the Trustee together with an assignment duly executed by
the Holder or its duly authorized attorney in any form which shall be
satisfactory to the Trustee. Upon transfer of any Bond and on request of the
Trustee, the Issuer shall execute in the name of the transferee, and the
Trustee shall authenticate and deliver, a new Bond or Bonds of the same series,
of any authorized denomination or denominations in an aggregate principal
amount equal to the unmatured and unredeemed principal amount of, and bearing
interest at the same rate and maturing on the same date or dates as, the Bonds
presented and surrendered for transfer.
70
In all cases in which Bonds shall be exchanged or transferred
hereunder, the Trustee shall authenticate and deliver Bonds in accordance with
the provisions of this Indenture. The exchange or transfer shall be made without
charge; provided that the Issuer and the Trustee may make a charge for every
exchange or transfer of Bonds sufficient to reimburse them for any tax or excise
required to be paid with respect to the exchange or transfer. The charge shall
be paid before a new Bond is delivered.
All Bonds issued upon any transfer or exchange of Bonds shall be the
valid obligations of the Issuer, evidencing the same debt, and entitled to the
same benefits under this Indenture, as the Bonds surrendered upon transfer or
exchange. Neither the Issuer nor the Trustee shall be required to make any
exchange or transfer of a Bond during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Bonds of such series and ending at the close of business on the day of such
mailing or to transfer or exchange any Bonds selected for redemption, in whole
or in part; provided, however, the foregoing provisions shall not preclude an
exchange or transfer of a Bond in the case of an optional or mandatory tender
under Sections 2.04, 2.05, 2.06 or 2.07 hereof.
In case any Bond is redeemed in part only, on or after the redemption
date and upon presentation and surrender of the Bond, the Issuer shall cause
execution of, and the Trustee shall authenticate and deliver, a new Bond or
Bonds of the same series in authorized denominations in an aggregate principal
amount equal to the unmatured and unredeemed portion of, and bearing interest
at the same rate and maturing on the same date or dates as, the Bond redeemed
in part. Notwithstanding the foregoing, however, if a Depository is the sole
Bondholder, delivery of a notation of partial redemption of Bonds shall be made
in such manner as is mutually agreed upon by the Trustee and the Depository.
Section 3.07. Mutilated, Lost, Wrongfully Taken, Undelivered or
Destroyed Bonds. If any Bond is mutilated, lost, wrongfully taken or destroyed,
or any tendered Bond or Bond deemed to have been tendered is not delivered
pursuant to the terms of this Indenture, in the absence of written notice to the
Issuer and the Trustee that a lost, wrongfully taken or destroyed or undelivered
Bond has been acquired by a bona fide purchaser, the Trustee shall authenticate
and deliver a new Bond of like date, maturity and denomination and of the same
series as the Bond mutilated, lost, wrongfully taken, destroyed or undelivered;
provided, that (i) in the case of any mutilated Bond, the mutilated Bond first
shall be surrendered to the Trustee, (ii) in the case of any lost, wrongfully
taken or destroyed Bond, there first shall be furnished to the Issuer and the
Trustee evidence of the loss, wrongful taking or destruction satisfactory to the
Issuer and the Trustee, together with indemnity to the Issuer, the Trustee, the
Borrower and the Bank satisfactory to each of them, and payment of any out of
pocket costs of the Issuer, and (iii) in the case of any tendered Bond which is
undelivered there shall be satisfactory loss indemnity furnished to the Issuer,
the Trustee, the Borrower and the Bank by the nondelivering Holder.
If any lost, wrongfully taken, undelivered or destroyed Bond shall
have matured, instead of issuing a new Bond, the Authorized Borrower
Representative may direct the Trustee to pay that Bond without surrender
thereof upon the furnishing of satisfactory evidence and indemnity
71
as in the case of issuance of a new Bond. The Issuer and the Trustee may charge
the Holder of a mutilated, lost, wrongfully taken, undelivered or destroyed
Bond their reasonable fees and expenses in connection with their actions
pursuant to this Section.
Every new Bond issued pursuant to this Section by reason of any Bond
being lost, wrongfully taken, undelivered or destroyed (i) shall constitute, to
the extent of the outstanding principal amount of the Bond lost, taken or
destroyed, a contractual obligation of the Issuer, regardless of whether the
lost, wrongfully taken or destroyed Bond shall be enforceable at any time by
anyone and (ii) shall be entitled to all of the benefits of this Indenture
equally and proportionately with any and all other Bonds issued and outstanding
hereunder.
Section 3.08. Cancellation of Bonds. Except as provided in Section 3.06
hereof, any Bonds surrendered pursuant to this Article for the purpose of
payment or retirement or for exchange, replacement or transfer shall be canceled
upon presentation and surrender thereof to the Trustee.
The Issuer, or the Borrower on behalf of the Issuer, may deliver at
any time to the Trustee for cancellation any Bonds previously authenticated and
delivered hereunder, which the Issuer or the Borrower may have acquired in any
manner whatsoever. All Bonds so delivered shall be canceled promptly by the
Trustee. Certification of the surrender and cancellation shall be made to the
Issuer and the Bank by the Trustee at least once each calendar year. Those
canceled bonds shall be destroyed by the Trustee by shredding or incineration.
The Trustee shall provide certificates describing the destruction of canceled
Bonds to the Issuer, the Borrower and the Bank.
(End of Article III)
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ARTICLE IV
REDEMPTION OF BONDS
Section 4.1 . Terms of Redemption of Project Bonds. The Project Bonds
are subject to redemption prior to stated maturity as follows:
(a) Mandatory Sinking Fund Redemption. The Project Bonds are subject to
mandatory redemption pursuant to mandatory sinking fund requirements, at a
redemption price of 100% of the principal amount redeemed plus interest accrued
to the redemption date, on each December 1, commencing December 1, 2000, in the
following principal amounts:
(b)
Date of Principal Principal Amount
Redemption to be Redeemed
----------------- ----------------
2000 $ 85,000
2001 $ 90,000
2002 $100,000
2003 $110,000
2004 $120,000
2005 $130,000
2006 $145,000
2007 $160,000
2008 $175,000
2009 $190,000
2010 $210,000
2011 $230,000
2012 $255,000
2013 $280,000
2014 $310,000
2015 $340,000
2016 (maturity) $375,000
The aggregate of the Loan Payments specified in Section 4.1 of the
Agreement, which are to be deposited in the Bond Fund on each Loan Payment Date,
as defined in the Agreement, shall include amounts sufficient to redeem the
principal amount of Project Bonds subject to mandatory redemption pursuant to
mandatory sinking fund requirements (less the amount of any credit as provided
below).
The Issuer, or the Borrower on behalf of the Issuer, shall have the
option to deliver to the Trustee for cancellation Project Bonds in any aggregate
principal amount and to receive a credit against the then current mandatory
sinking fund requirement (and corresponding mandatory redemption obligation) of
the Issuer. That option shall be exercised by the Issuer, or the Borrower on
behalf of the Issuer, on or before the 45th day preceding the applicable
mandatory
73
sinking fund redemption date, by furnishing the Trustee a certificate, executed
by the Executive or the Authorized Borrower Representative, as the case may be,
setting forth the extent of the credit to be applied with respect to the then
current mandatory sinking fund requirements, and the Project Bonds to be so
credited. If the certificate and the Project Bonds to be credited are not timely
furnished to the Trustee, the mandatory sinking fund requirement (and
corresponding mandatory redemption obligation) shall not be reduced. With the
prior written consent of the Bank, credit against the then current mandatory
sinking fund requirement (and corresponding mandatory redemption obligation)
also shall be received by the Issuer for any Project Bonds which prior thereto
have been redeemed (other than through the operation of the mandatory sinking
fund requirements) or purchased for cancellation and canceled by the Trustee, to
the extent not applied theretofore as a credit against any redemption
obligation.
Except as otherwise provided in the preceding paragraph, each Project
Bond previously redeemed, or purchased and canceled, shall be credited by the
Trustee at 100% of the principal amount thereof against the mandatory sinking
fund requirements (and corresponding mandatory redemption obligations) in
inverse order of the maturity of the mandatory sinking fund requirements.
(b) Mandatory Redemption Upon a Determination of Taxability. Upon the
occurrence of a Determination of Taxability, the Project Bonds are subject to
mandatory redemption in whole at a redemption price equal to 100% of the
outstanding principal amount thereof, plus interest accrued to the redemption
date, at the earliest practicable date selected by the Trustee, after
consultation with the Borrower, but in no event later than 45 days following
receipt by the Trustee of notice of the Determination of Taxability. The
occurrence of a Determination of Taxability with respect to the Project Bonds
will not constitute an Event of Default under this Indenture.
Within five Business Days after receipt by the Trustee of written
notice of a Determination of Taxability, the Trustee shall give written notice
thereof to the Holders of all Project Bonds then outstanding, as shown by the
Register, and shall also give written notice to the Borrower, the Issuer and the
Bank.
(c) Optional Redemption. Unless previously redeemed, the Project Bonds are
subject to redemption (from funds other than those deposited in accordance with
the mandatory sinking fund requirements of this Section 4.01), at the option of
the Issuer, upon the direction of the Borrower (subject to compliance with
Section 4.03 hereof), (1) if the Project Bonds do not bear interest at the Fixed
Interest Rate, in whole or in part (in integral multiples of $5,000, provided
that the unredeemed portion of any Bond redeemed in part shall be $100,000 or
more) on any Interest Payment Date if the Bonds bear interest at the Weekly
Interest Rate, and on any Interest Rate Adjustment Date if the Bonds bear
interest in another Adjustable Interest Rate Mode, in each case at a redemption
price of 100% of the principal amount redeemed plus accrued interest thereon to
the redemption date, and (2) after the Fixed Interest Rate Commencement Date and
on or after the First Optional Redemption Date, in whole or in part (in integral
multiples of $5,000, provided that the unredeemed portion of any Bond redeemed
in part shall be $100,000 or more)
74
at any time at a redemption price equal to the following percentages of the
principal amount redeemed, plus in each case accrued interest to the date fixed
for redemption.
Redemption Date Optional Redemption Price
--------------- -------------------------
First Optional Redemption
Date, through the following
last day of November 103%
First Anniversary of the First
Optional Redemption Date,
through the following
last day of November 102%
Second Anniversary of the
First Optional Redemption
Date, through the following
last day of November 101%
Third Anniversary of the First
Optional Redemption Date and
thereafter 100%
(d) Extraordinary Optional Redemption. The Project Bonds are also subject
to redemption by the Issuer in the event of the exercise by the Borrower of its
option (subject to compliance with Section 4.03 hereof) to direct that
redemption upon occurrence of any of the events described in Section 6.2 of the
Agreement, (a) at any time in whole, or (b) at any time in part upon the
occurrence of the events permitting such partial redemption, as provided in
Section 6.2 of the Agreement, in each case at a redemption price of 100% of the
principal amount redeemed, plus interest accrued to the redemption date.
(e) Use of Certain Funds to Redeem Project Bonds. Except as provided in
Section 9.02 hereof, the Trustee shall pay the redemption price on all Project
Bonds redeemed under this Section 4.01 in the same manner and from the same
sources as provided in Section 5.03 hereof for the payment of Bond Service
Charges.
Section 4.02 . Partial Redemption. If fewer than all of the outstanding
Bonds of a series that are stated to mature on different dates are called for
redemption at one time, those Bonds which are called shall be called in inverse
order of the maturities of the Bonds of that series to be redeemed. If fewer
than all of the Bonds of a single maturity are to be redeemed, the selection of
Bonds to be redeemed, or portions thereof, in amounts equal to $5,000 or any
integral multiple thereof shall be made by lot by the Trustee in any manner
which the Trustee may determine; provided that the Trustee shall select Project
Bonds for redemption so as to assure that after such redemption no Holder shall
retain Bonds in an aggregate amount less than $100,000; and
75
provided further that, if less than all of an outstanding Bond of one maturity
in a book entry system is to be called for redemption, the Trustee shall give
notice to the Depository or the nominee of the Depository that is the Holder of
such Bond, and the selection of the beneficial interests in that Bond to be
redeemed shall be at the sole discretion of the Depository and its participants.
In the case of a partial redemption of Bonds by lot each unit of face value of
principal thereof equal to $5,000 (each such $5,000 unit is hereinafter referred
to as a "Unit") shall be treated as though it were a separate Bond in the amount
of such Unit. If it is determined that one or more, but not all of the Units
represented by a Bond are to be called for redemption, then upon notice of
redemption of a Unit or Units of Bonds, the Holder of that Bond shall surrender
the Bond to the Trustee (a) for payment of the redemption price of the Unit or
Units of Bonds called for redemption (including without limitation, the interest
accrued to the date fixed for redemption and any premium), and (b) for issuance,
without charge to the Holder thereof, of a new Bond or Bonds of the same series,
of $100,000 or amounts in excess thereof in such integrals as are permitted
hereunder, aggregating a principal amount equal to the unmatured and unredeemed
portion of, and bearing interest at the same rate and maturing on the same date
as, the Bond surrendered.
Section 4.03. Issuer's Election to Redeem. Except in the case of
redemption pursuant to any mandatory sinking fund requirements or pursuant to
other mandatory redemption provisions hereof, Bonds shall be redeemed only by
written notice from the Issuer to the Trustee and the Bank, given at the
direction of the Borrower, or by written notice from the Borrower to the Trustee
and the Bank on behalf of the Issuer. That notice shall specify the redemption
date and the principal amount of each maturity of Bonds to be redeemed, and
shall be given at least 45 days prior to the redemption date or such shorter
period as shall be acceptable to the Trustee. Except with the prior written
consent of the Bank, in the case of any optional redemption of Project Bonds
pursuant to Section 4.01(c) or (d) hereof (other than any such redemption made
pursuant to the requirements of the Reimbursement Agreement), there shall be
Eligible Funds on deposit with the Trustee prior to the giving of the notice
required by Section 4.04 hereof in an amount which will be sufficient to redeem
at the redemption price thereof and interest accrued to the redemption date, all
of the Project Bonds for which notice of redemption is to be given.
Section 4.04. Notice of Redemption. Unless waived by any Holder of
Bonds to be redeemed, official notice of any such redemption shall be given by
the Trustee on behalf of the Issuer by mailing a copy of an official redemption
notice by first class mail at least 30 days and not more than 60 days prior to
the date fixed for redemption (except in the case of a Section 4.01(b)
redemption, in which case such notice shall be given at least 5 days and not
more than 15 days prior to the date fixed for redemption) to the registered
owner of the Bond or Bonds to be redeemed at the address shown on the Register
or at such other address as is furnished in writing by such registered owner to
the Trustee.
All official notices of redemption shall be dated and shall state:
(1) the redemption date,
76
(2) the redemption price,
(3) if less than all outstanding Bonds are to be redeemed, the
identification by designation, letters, numbers or other distinguishing marks
(and, in the case of partial redemption, the respective principal amounts) of
the Bonds to be redeemed,
(4) that on the redemption date the redemption price will become due and
payable upon each such Bond or portion thereof called for redemption, and that
interest thereon shall cease to accrue from and after said date, and
(5) the place where such Bonds are to be surrendered for payment of the
redemption price, which place of payment shall be the Operations Office of the
Trustee.
In addition to the foregoing notice, further notice shall be given by
the Trustee as set out below, but no defect in said further notice nor any
failure to give all or any portion of such further notice shall in any manner
defeat the effectiveness of a call for redemption if notice thereof is given as
above prescribed.
1. Each further notice of redemption given hereunder shall contain the
information required above for an official notice of redemption plus (i) the
CUSIP numbers of all Bonds being redeemed; (ii) the date of issue of the Bonds
as originally issued; (iii) the rate of interest borne by each Bond being
redeemed; (iv) the maturity date of each Bond being redeemed; and (v) any other
descriptive information needed to identify accurately the Bonds being redeemed.
2. Except in the case of a mandatory sinking fund redemption pursuant to
Section 4.01(a) hereof, each further notice of redemption shall be sent at least
30 days before the redemption date by registered or certified mail or overnight
delivery service to all registered securities depositories then in the business
of holding substantial amounts of obligations of types comprising the Bonds
(such depositories now being Depository Trust Company of New York, New York,
Midwest Securities Trust Company of Chicago, Illinois, Pacific Securities
Depository Trust Company of San Francisco, California and Philadelphia
Depository Trust Company of Philadelphia, Pennsylvania) and to one or more
national information services that disseminate notices of redemption of
obligations such as the Bonds.
3. Upon the payment of the redemption price of Bonds being redeemed, each
check or other transfer of funds issued for such purpose shall bear the CUSIP
number (if any) identifying, by issue and maturity, the Bonds being redeemed
with the proceeds of such check or other transfer.
Failure to receive notice by mailing or any defect in that notice
regarding any Bond, however, shall not affect the validity of the proceedings
for the redemption of any other Bond.
Notice of any redemption hereunder with respect to Bonds held under a
book entry system shall be given by the Trustee only to the Depository, or its
nominee, as the Holder of such Bonds. Selection of book entry interests in the
Bonds called for redemption is the responsibility
77
of the Depository and any failure of any Direct Participant, Indirect
Participant or Beneficial Owner to receive such notice and its contents or
effect will not affect the validity of such notice or any proceedings for the
redemption of such Bonds.
Section 4.05. Payment of Redeemed Bonds. Notice having been mailed to
the registered owner of the Bond or Bonds to be redeemed in the manner provided
in Section 4.04 hereof, and, in the event of optional redemption pursuant to
Section 4.01(c) or (d) hereof, upon money being deposited as and if required by
Section 4.03 hereof, the Bonds and portions thereof called for redemption shall
become due and payable on the redemption date, and upon presentation and
surrender thereof at the place or places specified in that notice, shall be paid
at the redemption price, including interest accrued to the redemption date. The
Trustee shall make a drawing under the Letter of Credit to pay the principal of
and interest due on the Project Bonds being redeemed. Any moneys received by the
Trustee from the Borrower which are available to be applied toward the payment
of such principal and interest, shall be paid to the Bank to reimburse the Bank
for any drawing made under the Letter of Credit to pay such principal and
interest.
Subject to the provisions of Section 13.05 hereof, if money for the
redemption of all of the Bonds and portions thereof to be redeemed, together
with interest accrued thereon to the redemption date, is held by the Trustee on
the redemption date, so as to be available therefor on that date and if notice
of redemption has been deposited in the mail to the registered owner of the Bond
or Bonds to be redeemed as aforesaid, then from and after the redemption date
those Bonds and portions thereof called for redemption shall cease to bear
interest and no longer shall be considered to be outstanding hereunder. If those
moneys shall not be so available on the redemption date, or that notice shall
not have been deposited in the mail as aforesaid, those Bonds and portions
thereof shall continue to bear interest, until they are paid, at the same rate
or rates as they would have borne had they not been called for redemption.
All moneys deposited in the Bond Fund and held by the Trustee for the
redemption of particular Bonds shall be held in trust for the account of the
Holders thereof and shall be paid to them, respectively, upon presentation and
surrender of those Bonds, except as provided in Section 3.06 hereof.
Section 4.06. Variation of Redemption Provisions. The provisions of
this Article IV, insofar as they apply to issuance of any series of Additional
Bonds, may be varied by the Supplemental Indenture providing for that series.
(End of Article IV)
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ARTICLE V
PROVISIONS AS TO FUNDS,
PAYMENTS, PROJECT AND AGREEMENT
Section 5.01. Creation of Project Fund. There is created by the Issuer
and ordered maintained as a separate deposit account (except when invested as
provided hereinafter) in the custody of the Trustee, a trust fund designated
"City of Elkhart, Indiana - ▇▇▇▇▇▇▇ Inns, Inc. Project Fund". The proceeds of
the Project Bonds shall be deposited therein; provided, however, any proceeds
representing accrued interest on the Project Bonds shall be deposited in the
Bond Fund. Unless otherwise set forth in the applicable Bond Ordinance or
Supplemental Indenture relating to the issuance of a series of Additional Bonds,
there shall be deposited in the Project Fund the proceeds of the sale of any
Additional Bonds, other than any proceeds representing accrued interest which
shall be deposited in the Bond Fund pursuant to Section 5.03 hereof.
If the unexpended proceeds of a prior issue of Bonds remain in the
Project Fund upon the issuance of any Additional Bonds, the Trustee shall
establish a separate subaccount within the Project Fund, for accounting
purposes, for the deposit of the proceeds of the issue of Additional Bonds in
accordance with this Section.
Pending disbursement pursuant to the Agreement, the moneys and Eligible
Investments to the credit of the Project Fund shall constitute a part of the
Revenues assigned to the Trustee as security for the payment of the Bond Service
Charges.
Section 5.02. Disbursements From and Records of Project Fund. Moneys
held in the Project Fund representing proceeds of the sale of the Project Bonds
shall be disbursed by the Trustee in accordance with the provisions of the
Agreement to the Prior Bonds Trustee, to be used together with other moneys
provided by the Borrower to pay and redeem in whole the Prior Bonds.
The Trustee shall cause to be kept and maintained adequate records
pertaining to the Project Fund and all disbursements therefrom. If requested by
the Bank, the Issuer or the Borrower, the Trustee shall file copies of the
records pertaining to the Project Fund and all disbursements from such fund with
the Bank, the Issuer and the Borrower.
Upon the occurrence and continuance of an Event of Default hereunder
because of which the principal amount of the Bonds has been declared to be due
and payable immediately pursuant to Section 7.03 hereof, any moneys remaining in
the Project Fund shall be promptly transferred by the Trustee to the Bond Fund.
Section 5.03. Creation of Bond Fund; Letter of Credit. There is created
by the Issuer and ordered maintained as a separate deposit account (except when
invested as hereinafter set forth) in the custody of the Trustee a trust fund to
be designated "City of Elkhart, Indiana - ▇▇▇▇▇▇▇ Inns, Inc. Bond Fund". Unless
otherwise set forth in the applicable Bond Legislation or Supplemental Indenture
relating to the issuance of a series of Additional Bonds, there shall be
79
deposited in the Bond Fund (and credited, if required by this Indenture or the
Agreement to appropriate accounts therein), from the proceeds of the sale of the
Bonds, any accrued interest paid by the purchasers of the Bonds.
Except as otherwise provided herein, the Trustee shall deposit in the
Bond Fund upon receipt all Revenues other than Bond proceeds deposited in the
Project Fund, including all moneys received upon drawings made under the Letter
of Credit (except as otherwise provided in Section 6.15 hereof) and any other
amounts which, under the terms of this Indenture, the Notes, the Agreement, the
Reimbursement Agreement, or the Letter of Credit are to be applied to the
payment of Bond Service Charges. Except as provided herein, the Bond Fund (and
accounts therein for which provision is made herein or in the Agreement) and the
moneys and Eligible Investments therein shall be used solely and exclusively for
the payment of Bond Service Charges as they fall due at stated maturity, or by
redemption or pursuant to any mandatory sinking fund requirements or upon
acceleration, all as provided herein and in the Agreement.
The Trustee shall establish separate accounts within the Bond Fund for
each separate series of Bonds. The Trustee shall establish separate subaccounts
within each separate series account in the Bond Fund for each source of deposit
(including any investment income thereon) made into the Bond Fund so that the
Trustee may at all times ascertain the date of deposit, the amounts, and the
source of the funds in each subaccount. Moneys received from drawings on the
Letter of Credit shall be deposited in a separate subaccount and shall never be
commingled with moneys from any other source.
Moneys in the Bond Fund shall be used to pay Bond Service Charges with
respect to the Project Bonds and for the redemption of Project Bonds prior to
maturity and as otherwise provided in this Indenture only in the following
order:
FIRST: Amounts drawn by the Trustee under the Letter of Credit and
deposited into a separate account in the Bond Fund;
SECOND: Any Eligible Funds on deposit in the Bond Fund;
THIRD: Any other amounts available in the Bond Fund.
The Issuer hereby authorizes and directs the Trustee to draw on the
Letter of Credit pursuant to its terms, in the amounts and at the times
necessary to pay Bond Service Charges on the Project Bonds (excluding any
premium) pursuant to this Section 5.03.
The Trustee shall draw upon the Letter of Credit in accordance with the
terms thereof under the following circumstances:
(a) On or before 11:00 a.m., local time at the Drawing Office of the Bank,
on the Business Day prior to any Interest Payment Date or Mandatory Bond
Purchase Date (or the maturity date or any date set for a redemption of Project
Bonds which is not an Interest Payment Date), and on
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or before 11:30 a.m. local time at the Drawing Office of the Bank on each Bond
Purchase Date, the Trustee shall determine the amount necessary to make all
required payments of principal and interest on the Project Bonds or purchase
price payments on the next succeeding Interest Payment Date, maturity date,
other redemption date or such Bond Purchase Date or Mandatory Bond Purchase
Date, and shall present to the Bank the required documents under the Letter of
Credit in such amount, so as to permit the timely transfer of funds from the
Bank to the Trustee for payment of interest on the Bonds on each Interest
Payment Date, for payment of the principal of and interest on the Project Bonds
when due, whether at maturity or upon prior redemption, or the payment of the
purchase price of Project Bonds or Beneficial Ownership Interests when due on
the applicable Bond Purchase Date or Mandatory Bond Purchase Date.
(b) Upon acceleration of the Project Bonds upon the occurrence of an Event
of Default under Section 7.01 hereof, the Trustee, on or before 11:00 a.m.,
local time at the Drawing Office of the Bank, on the Business Day prior to the
date on which principal and interest shall be due and payable pursuant to the
declaration of the acceleration of the Project Bonds pursuant to Section 7.03
hereof, shall present to the Bank the required documents under the Letter of
Credit for payment of the entire amount due pursuant to Section 7.03 hereof with
respect to the Project Bonds.
In no circumstances shall the Trustee use moneys drawn on the Letter of
Credit to pay Bond Service Charges on any Additional Bonds, or to pay premium,
if any, on the Project Bonds.
The Trustee shall promptly notify the Borrower by oral or telephonic
communication confirmed in writing if the Bank has not transferred funds in
accordance with the Letter of Credit upon the presentment of any such drawing
certificate.
In calculating the amount to be drawn on the Letter of Credit for the
payment of the purchase price of Project Bonds or Beneficial Ownership Interests
on a Mandatory Bond Purchase Date or for the payment of principal of and
interest on the Project Bonds, whether on an Interest Payment Date, at maturity
or upon redemption or acceleration, the Trustee shall not take into account the
receipt or potential receipt of funds from the Borrower under the Agreement, or
the existence of any other moneys in the Remarketing Reimbursement Fund, the
Project Fund or Bond Fund, but shall draw on the Letter of Credit for the full
amount of such purchase price or the full amount of the principal and interest
coming due on the Project Bonds. If sufficient moneys are available in the
Remarketing Reimbursement Fund to pay the purchase price of the Project Bonds or
Beneficial Ownership Interests tendered for purchase on a Bond Purchase Date,
the Trustee shall not draw on the Letter of Credit but shall forward such
amounts directly to the tendering Holder or Beneficial Owner. The Trustee shall
draw on the Letter of Credit to pay the purchase price of Project Bonds or
Beneficial Ownership Interests tendered for purchase on a Bond Purchase Date
only to the extent that moneys in the Remarketing Reimbursement Fund are
insufficient to purchase the Project Bonds or Beneficial Ownership Interests so
tendered. In calculating the amount, if any, to be drawn on the Letter of Credit
for the purchase of Project Bonds or Beneficial Ownership Interests on a Bond
Purchase Date, the
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Trustee shall take into account funds received from the purchasers of tendered
Project Bonds or Beneficial Ownership Interests or from the Remarketing Agent by
11:00 a.m. local time at the Drawing Office of the Bank on such Bond Purchase
Date with respect to the remarketing of such Project Bonds or Beneficial
Ownership Interests or otherwise, and by 11:30 a.m. local time at the Drawing
Office of the Bank on the applicable Bond Purchase Date shall draw on the Letter
of Credit only such amounts as may be necessary to purchase such Project Bonds
or Beneficial Ownership Interests on a Bond Purchase Date after taking into
account all funds received by 11:00 a.m. local time at the Drawing Office of the
Bank on such date which are attributable to the remarketing of such Project
Bonds or Beneficial Ownership Interests. Upon receipt of such moneys from the
Bank, the Trustee shall deposit the amount representing a draw on the Letter of
Credit for the payment of principal and interest on the Project Bonds in a
separate account in the Bond Fund and apply the same only to the payment of such
principal and interest when due on the Project Bonds, shall deposit the amount
representing a draw on the Letter of Credit for the purchase of Project Bonds or
Beneficial Ownership Interests in the Remarketing Reimbursement Fund and
disburse said amount only to the tendering Holders or Beneficial Owners of
Project Bonds or Beneficial Ownership Interests being purchased and, so long as
there does not exist an Event of Default described in Section 7.01(g) herein,
and subject to the prior satisfaction of all Bond Service Charges and purchase
price payments then due or on account of which funds shall have been paid to the
Trustee by the Borrower or shall have been obtained by the Trustee by a drawing
or drawings on the Letter of Credit, by wire transfer shall pay, on behalf of
the Borrower, but only from and to the extent of Loan Payments or any other
moneys available in the Project Fund, the Bond Fund or the Remarketing
Reimbursement Fund any amounts due and payable to the Bank under the
Reimbursement Agreement for any drawing made on the Letter of Credit.
Except as provided in Section 5.07 and 5.08 hereof, neither the Issuer
nor the Borrower shall have any interest in the Bond Fund or the moneys and
Eligible Investments therein, all of which shall be held in trust by the Trustee
for the sole benefit of the Holders and Beneficial Owners and, to the extent of
amounts due under the Reimbursement Agreement, the Bank.
The provisions of this Section are subject to the provisions of Section
9.02 hereof.
Section 5.04. Creation of Remarketing Reimbursement Fund. There is
created by the Issuer and ordered maintained as a separate deposit account in
the custody of the Trustee a trust fund to be designated "City of Elkhart,
Indiana - ▇▇▇▇▇▇▇ Inns, Inc. Remarketing Reimbursement Fund." The Remarketing
Reimbursement Fund shall not be considered a part of the Revenues but shall be
used solely in connection with the remarketing of Project Bonds and Beneficial
Ownership Interests as set forth in Section 6.15 hereof. Certain provisions
regarding the Remarketing Reimbursement fund are set forth in Section 5.03.
Section 5.05. Investment of Bond Fund, Project Fund, Rebate Fund and
Remarketing Reimbursement Fund. Except as hereinafter provided, moneys in the
Bond Fund, the Project Fund and the Rebate Fund shall be invested and reinvested
by the Trustee in Eligible Investments at the oral or written direction of the
Authorized Borrower Representative, but if
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oral, confirmed promptly in writing. Investment of moneys in the Bond Fund shall
mature or be redeemable without penalty at the option of the Trustee at the
times and in the amounts necessary to provide moneys to pay Bond Service Charges
as they become due at stated maturity, by redemption or pursuant to any
mandatory sinking fund requirements. Each investment of moneys in the Project
Fund, the Bond Fund and the Rebate Fund shall mature or be redeemable without
penalty at such time as may be necessary to make payments when necessary from
such fund.
Subject to any directions from the Authorized Borrower Representative
with respect thereto, and any restrictions contained in Section 5.11 hereof
relating to the Rebate Fund, from time to time, the Trustee may sell Project
Fund, Rebate Fund and Bond Fund investments and reinvest the proceeds therefrom
in Eligible Investments maturing or redeemable as aforesaid. Any of those
investments may be purchased from or sold to the Trustee, a Remarketing Agent or
any bank, trust company or savings and loan association affiliated with any of
the foregoing. The Trustee shall sell or redeem investments credited to the Bond
Fund at the best price reasonably obtainable to and at the times required for
the purposes of paying Bond Service Charges when due as aforesaid, and shall do
so without necessity for any order on behalf of the Issuer and without
restriction by reason of any order. An investment made from moneys credited to
the Bond Fund, the Project Fund or the Rebate Fund shall constitute part of that
respective fund, and each respective fund shall be credited with all proceeds of
sale and income from investment of moneys credited thereto.
Moneys drawn on the Letter of Credit and deposited in the Bond Fund
shall be deposited in a separate account in the Bond Fund, shall be held in cash
and not be invested and shall be held in such account pending application
pursuant to the terms of Section 5.03 or Section 6.15 hereof. Notwithstanding
any inconsistent or contrary provision hereof, such funds shall be applied only
to the satisfaction of the specific Bond Service Charges for which they were
drawn and any funds not so applied shall be paid to the Bank, subject to the
provisions of Section 5.08 hereof.
Moneys deposited in the Remarketing Reimbursement Fund shall be held in
cash and not invested. Moneys drawn on the Letter of Credit and deposited in the
Remarketing Reimbursement Fund shall be deposited in a separate account therein
and shall be held in such account pending application pursuant to the terms of
Section 5.03 and 6.15 hereof.
Section 5.06. Moneys to be Held in Trust. Except where moneys have been
deposited with or paid to the Trustee pursuant to an instrument restricting
their application to particular Bonds, all moneys required or permitted to be
deposited with or paid to the Trustee under any provision of this Indenture, the
Agreement or the Letter of Credit, and to be used to pay Bond Service Charges,
or the Notes, and any investments thereof, shall be held by the Trustee in
trust. Except (i) for moneys deposited with or paid to the Trustee for the
redemption of Bonds, notice of the redemption of which shall have been duly
given, (ii) for moneys held by the Trustee pursuant to Section 5.07 hereof,
(iii) for moneys in the Remarketing Reimbursement Fund, and (iv) for
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moneys held in the Rebate Fund, all moneys described in the preceding sentence
held by the Trustee shall be subject to the lien hereof while so held.
Section 5.07. Nonpresentment of Bonds. In the event that any Bond shall
not be presented for payment when the principal thereof becomes due in whole or
in part, either at stated maturity, by redemption or pursuant to any mandatory
sinking fund requirements, or a check or draft for interest is uncashed, if
moneys sufficient to pay the principal and premium, if any, then due on that
Bond or to pay such check or draft shall have been made available to the Trustee
for the benefit of its Holder, all liability of the Issuer to that Holder for
such payment of the principal and premium, if any, then due on the Bond or
interest on such Bond represented by such check or draft thereupon shall cease
and be discharged completely. Thereupon, it shall be the duty of the Trustee to
hold those moneys, without liability for interest thereon, in a separate account
in the Bond Fund for the exclusive benefit of the Holder, who shall be
restricted thereafter exclusively to those moneys for any claim of whatever
nature on its part under this Indenture or on, or with respect to, the principal
and premium, if any, then due on that Bond or interest on such Bond represented
by such check or draft.
Any of those moneys which shall be so held by the Trustee, and which
remain unclaimed by the Holder of a Bond not presented for payment or check or
draft not cashed for a period of four years after the due date thereof, shall be
paid to the Bank free of any trust or lien unless the Bank shall have confirmed
to the Trustee in writing that no moneys are then due under the Reimbursement
Agreement in which case such moneys shall be paid to the Borrower. Thereafter,
the Holder of that Bond shall look only to the Borrower for payment and then
only to the amounts so received by the Borrower or paid to or on behalf of the
Borrower (including to the Bank pursuant to this paragraph), without any
interest thereon, and the Trustee shall not have any responsibility with respect
to those moneys.
Section 5.08. Repayment to the Bank or the Borrower from the Bond Fund.
Except as provided in Section 5.07 hereof, any amounts remaining in the Bond
Fund (i) after all of the outstanding Bonds shall be deemed paid and discharged
under the provision of this Indenture, and (ii) after payment of all fees,
charges and expenses of the Trustee and of all other amounts required to be paid
under this Indenture, the Agreement and the Notes, shall be paid to the Bank
unless the Bank shall have confirmed to the Trustee in writing that no moneys
are then due under the Reimbursement Agreement in which case such moneys shall
be paid to the Borrower, to the extent that those amounts are in excess of those
necessary to effect the payment and discharge of the outstanding Bonds.
Section 5.09. Alternate Letter of Credit. The Letter of Credit expires
December 31, 2002, or earlier as provided therein.
The Borrower may, at its option, provide for the delivery to the
Trustee of an Alternate Letter of Credit to take effect on a date selected by
the Borrower (the "Replacement Date"). If the Project Bonds are bearing interest
at the Weekly Interest Rate or the Fixed Interest Rate, the Replacement Date may
be any Interest Payment Date selected by the Borrower, provided, however, that
such date allows the Trustee reasonable time to comply with the notice
provisions
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of Section 2.06 hereof. If the Project Bonds are bearing interest at
the One Month Interest Rate, the Three Month Interest Rate, the Six Month
Interest Rate, the One Year Interest Rate or the Five Year Interest Rate, the
Replacement Date shall be (i) an Interest Rate Adjustment Date selected by the
Borrower or (ii) the Fixed Interest Rate Commencement Date if the Bonds are to
bear interest at the Fixed Interest Rate (provided, however, that such date
allows the Trustee reasonable time to comply with the notice provisions of
Section 2.06 hereof). The expiration date of the Alternate Letter of Credit
shall be not earlier than the later of the expiration date of the Letter of
Credit being replaced and the date which is fifteen (15) days after the end of
the Interest Rate Period applicable or to be applicable to the Project Bonds, or
if the Project Bonds bear or are to bear interest at the Fixed Interest Rate,
the expiration date of the Alternate Letter of Credit shall be not earlier than
fifteen (15) days after the First Optional Redemption Date. Prior to the
replacement of a Letter of Credit with an Alternate Letter of Credit, the
Trustee shall give notice to the Holders and, if the Project Bonds are then
rated by a Rating Service, to each Rating Service which then has a rating on the
Project Bonds of such event and shall have received the following not less than
forty-five (45) days prior to the Replacement Date:
(A) an opinion of counsel for the issuer of the Alternate Letter
of Credit that it constitutes a legal, valid and binding
obligation of the issuer in accordance with its terms;
(B) an opinion of counsel acceptable to the Trustee to the effect
that payments under the Alternate Letter of Credit will not
constitute voidable preferences in the event of a bankruptcy
of the Borrower;
(C) an opinion of Bond Counsel that such replacement will not
cause interest on the Project Bonds to become includable in
gross income for federal income tax purposes; and
(D) the Alternate Letter of Credit.
Section 5.10. Compliance with Section 148 of the Code. The Trustee
shall cause to be kept and maintained adequate records pertaining to investment
of all proceeds of the Bonds sufficient to permit the Borrower, on behalf of the
Issuer, to determine the amount of rebate, if any, required to be paid to the
United States of America pursuant to Section 148 of the Code.
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Section 5.11. Rebate Fund.
(a) The Trustee shall establish and maintain so long as any Bonds are
Outstanding and are subject to a requirement of the Code that arbitrage profits
be rebated to the United States of America, a rebate fund designated "City of
Elkhart, Indiana - ▇▇▇▇▇▇▇ Inns, Inc. Rebate Fund". The Trustee shall make
information regarding the Bonds and investments hereunder available to the
Borrower. The Trustee shall make deposits and disbursements from the Rebate Fund
in accordance with the written instructions received from the Borrower, shall
invest the amounts held in the Rebate Fund pursuant to written instructions from
the Borrower and shall deposit income from such investments immediately upon
receipt thereof in the Rebate Fund. Anything in this Indenture to the contrary
notwithstanding, the immediately preceding sentence of this Indenture and
Subsections (b) and (c) hereof may be superseded or amended by new instructions
delivered by the Borrower and accompanied by an opinion of Bond Counsel
addressed to the Trustee to the effect that the use of the new instructions will
not cause interest on the Bonds to be included in gross income for federal
income tax purposes.
(b) If a deposit to the Rebate Fund is required as a result of the
computations made or caused to be made by the Borrower, the Trustee shall upon
receipt of written direction from the Borrower accept such payment for the
benefit of the Borrower. If amounts in excess of that required to be rebated to
the United States of America accumulate in the Rebate Fund, the Trustee shall
upon written direction from the Borrower transfer such amount to the Borrower.
Records of the determinations required by this Section and the instructions must
be retained by the Trustee until six (6) years after the Bonds are no longer
outstanding.
(c) Not later than thirty (30) days after December 1, ____ (or such other
date as the Borrower may choose, provided the Borrower receives an opinion of
Bond Counsel that such change will not cause interest on the Project Bonds to be
included in gross income for federal income tax purposes) and every five (5)
years thereafter until final retirement of the Project Bonds, upon written
direction from the Borrower, the Trustee shall pay to the United States of
America ninety percent (90%) of the amount required to be on deposit in the
Rebate Fund as of such payment date. Not later than thirty (30) days after the
final retirement of the Bonds, upon written direction from the Borrower the
Trustee shall pay to the United States of America one hundred percent (100%) of
the balance of the amount required to be on deposit in the Rebate Fund or such
lesser amount as the Borrower shall direct.
(End of Article V)
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ARTICLE VI
THE TRUSTEE AND REMARKETING AGENT
Section 6.01. Trustee's Acceptance and Responsibilities. The Trustee
accepts the trusts imposed upon it by this Indenture, and agrees to observe and
perform those trusts, but only upon and subject to the terms and conditions set
forth in this Article, to all of which the parties hereto and the Holders agree:
(a) Prior to the occurrence of an Event of Default (as defined in section
7.01 hereof) of which the Trustee has been notified, as provided in paragraph
(f) of Section 6.02 hereof, or of which by that paragraph the Trustee is deemed
to have notice, and after the cure or waiver of all Events of Default which may
have occurred,
(i) the Trustee undertakes to perform only those duties and
obligations which are set forth specifically in this Indenture, and no
duties or obligations shall be implied to the Trustee;
(ii) in the absence of bad faith on its part, the Trustee may rely
conclusively, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture;
but in the case of any such certificates or opinions which by any
provision hereof are required specifically to be furnished to the
Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Indenture.
(b) In case an Event of Default has occurred and is continuing hereunder
(of which the Trustee has been notified, or is deemed to have notice), the
Trustee shall exercise those rights and powers vested in it by this Indenture
and shall use the same degree of care and skill in their exercise, as a prudent
man acting as a fiduciary would exercise or use under the circumstances.
(c) No provisions of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(i) this subsection shall not be construed to affect the
limitation of the Trustee's duties and obligations provided in
subparagraph (a)(i) of this Section or the Trustee's right to rely on
the truth of statements and the correctness of opinions as provided in
subparagraph (a)(ii) of this Section;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by any one of its officers, unless it shall be
established that the Trustee was negligent in ascertaining the
pertinent facts;
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(iii) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Bank or the Holders of at least a majority in
aggregate principal amount of the Bonds then outstanding relating to
the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture, as provided in Sections 7.04
and 7.05 hereof; and
(iv) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers if it shall have reasonable grounds for
believing that payment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section
6.01.
Section 6.02. Certain Rights and Obligations of the Trustee. Except as
otherwise provided in Section 6.01 hereof:
(a) The Trustee (i) may execute any of the trusts or powers hereof and
perform any of its duties by or through attorneys, agents, receivers or
employees (but shall be answerable therefor only in accordance with the standard
specified above), (ii) shall be entitled to the advice of counsel concerning all
matters of trusts hereof and duties hereunder, and (iii) may pay reasonable
compensation in all cases to all of those attorneys, agents, receivers and
employees reasonably employed by it in connection with the trusts hereof. The
Trustee may act upon the opinion or advice of any attorney (who may be the
attorney or attorneys for the Issuer or the Borrower) approved by the Trustee in
the exercise of reasonable care. The Trustee shall not be responsible for any
loss or damage resulting from any action taken or omitted to be taken in good
faith in reliance upon that opinion or advice.
(b) Except for its certificate of authentication on the Bonds, the Trustee
shall not be responsible for:
(i) any recital in this Indenture or in the Bonds,
(ii) the validity, priority, recording, rerecording, filing or
re-filing of this Indenture or any Supplemental Indenture,
(iii) any instrument or document of further assurance or collateral
assignment,
(iv) any financing statements or amendments thereto,
(v) insurance of the Project or collection of insurance moneys,
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(vi) the validity of the execution by the Issuer of this Indenture,
any Supplemental Indenture or instruments or documents of further
assurance,
(vii) the sufficiency of the security for the Bonds issued hereunder
or intended to be secured hereby,
(viii) the value of or title to the Project, or
(ix) the maintenance of the security hereof,
except that, in the event that the Trustee enters into possession of any
property pursuant to any provision of any instrument or document, the Trustee
shall use due diligence in preserving that property. The Trustee shall not be
bound to ascertain or inquire as to the observance or performance of any
covenants, agreements, or obligations on the part of the Issuer or the Borrower
under the Agreement except as set forth herein; but the Trustee may require of
the Issuer or the Borrower full information and advice as to the observance or
performance of those covenants, agreements or obligations. Except as otherwise
provided in Section 7.04 hereof, the Trustee shall have no obligation to observe
or perform any of the duties of the Issuer under the Agreement.
(c) The Trustee shall not be accountable for the application by the
Borrower or any other Person of the proceeds of any Bonds authenticated or
delivered hereunder.
(d) The Trustee shall be protected, in the absence of bad faith on
its part, in acting upon any notice, request, consent, certificate, order,
affidavit, letter, telegram, or other paper or document reasonably believed by
it to be genuine and correct and to have been signed or sent by the proper
Person or Persons. Any action taken by the Trustee pursuant to this Indenture
upon the request or authority or consent of any Person who is the Holder of any
Bonds at the time of making the request or giving the authority or consent,
shall be conclusive and binding upon all future Holders of the same Bond and of
Bonds issued in exchange therefor or in place thereof.
(e) As to the existence or nonexistence of any fact for which the
Issuer, the Borrower or the Bank may be responsible or as to the sufficiency or
validity of any instrument, document, report, paper or proceeding, the Trustee,
in the absence of bad faith on its part, shall be entitled to rely upon a
certificate signed on behalf of the Issuer, the Bank or the Borrower by an
authorized officer or representative thereof as sufficient evidence of the facts
recited therein. Prior to the occurrence of a default or Event of Default
hereunder of which the Trustee has been notified, as provided in paragraph (f)
of this Section, or of which by that paragraph the Trustee is deemed to have
notice, the Trustee may accept a similar certificate to the effect that any
particular dealing, transaction or action is necessary or expedient; provided,
that the Trustee in its discretion may require and obtain any further evidence
which it deems to be necessary or advisable; and, provided further, that the
Trustee shall not be bound to secure any further evidence. The Trustee may
accept a certificate of the officer, or an assistant thereto, having charge of
the appropriate
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records, to the effect that legislation has been enacted or adopted by the
Issuer in the form recited in that certificate, as conclusive evidence that the
legislation has been duly enacted or adopted and is in full force and effect.
(f) The Trustee shall not be required to take notice, and shall
not be deemed to have notice, of any default or Event of Default hereunder,
except Events of Default described in paragraphs (a), (b), (c) and (g) of
Section 7.01 hereof, unless the Trustee shall be notified specifically of the
default or Event of Default in a written instrument or document delivered to it
by the Issuer, the Borrower, the Bank, or by the Holders of at least ten percent
(10%) of the aggregate principal amount of the Bonds then outstanding. In the
absence of delivery of a notice satisfying those requirements, the Trustee may
assume conclusively that there is no default or Event of Default, except as
noted above.
(g) At any reasonable time, the Trustee and its duly authorized agents,
attorneys, experts, engineers, accountants and representatives (i) may inspect
and copy fully all books, papers and records of the Issuer pertaining to the
Project, the Letter of Credit and the Bonds, and (ii) may take any memoranda
from and in regard thereto as the Trustee may desire.
(h) The Trustee shall not be required to give any bond or surety with
respect to the execution of these trusts and powers or otherwise in respect of
the premises.
(i) Notwithstanding anything contained elsewhere in this Indenture, the
Trustee may demand any showings, certificates, reports, opinions, appraisals and
other information, and any corporate or partnership action and evidence thereof,
in addition to that required by the terms hereof, as a condition to the
authentication of any Bonds or the taking of any action whatsoever within the
purview of this Indenture, if the Trustee deems it to be desirable for the
purpose of establishing the right of the Issuer to the authentication of any
Bonds or the right of any Person to the taking of any other action by the
Trustee; provided, that the Trustee shall not be required to make that demand.
(j) Before taking action hereunder pursuant to Section 6.04 or Article VII
hereof (with the exception of any action required to be taken under Sections
7.02 or 7.03 hereof and except with respect to drawings made under the Letter of
Credit), the Trustee may, if reasonably necessary, require that a satisfactory
indemnity bond be furnished to it for the reimbursement of all expenses which it
may incur and to protect it against all liability by reason of any action so
taken, except liability which is adjudicated to have resulted from its
negligence or willful misconduct. The Trustee may take action without that
indemnity, and in that case, the Borrower shall reimburse the Trustee for all of
the Trustee's expenses pursuant to Section 6.03 hereof.
(k) Unless otherwise provided herein, all moneys received by the Trustee
under this Indenture shall be held in trust for the purpose for which those
moneys were received, until those moneys are used, applied or invested as
provided herein; provided, that those moneys need not be segregated from other
moneys, except to the extent required by this Indenture or by law. The
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Trustee shall not have any liability for interest on any moneys received
hereunder, except to the extent expressly provided herein.
(l) Any legislation enacted or adopted by the Issuer, and any opinions,
certificates and other instruments and documents for which provision is made in
this Indenture, may be accepted by the Trustee, in the absence of bad faith on
its part, as conclusive evidence of the facts and conclusions stated therein and
shall be full warrant, protection and authority to the Trustee for its actions
taken hereunder.
(m) The Trustee shall be entitled conclusively to rely upon the
determination of the interest rates made and delivered to the Trustee by the
Remarketing Agent.
Section 6.03. Fees, Charges and Expenses of Trustee. The Trustee shall
be entitled to payment or reimbursement by the Borrower, as provided in the
Agreement, for reasonable fees and expenses for its Ordinary Services rendered
hereunder and for all advances, counsel fees and other Ordinary Expenses
reasonably and necessarily paid or incurred by it in connection with the
provision of Ordinary Services. For purposes hereof, fees for Ordinary Services
provided for by its standard fee schedule shall be considered reasonable. In the
event that it should become necessary for the Trustee to perform Extraordinary
Services, it shall be entitled to reasonable extra compensation therefor and to
reimbursement for reasonable and necessary Extraordinary Expenses incurred in
connection therewith.
Without creating a default or an Event of Default hereunder, however,
the Borrower may contest in good faith the necessity for any Extraordinary
Service and Extraordinary Expense and the reasonableness of any fee, charge or
expense.
The Trustee shall not be entitled to compensation or reimbursement for
Extraordinary Services or Extraordinary Expenses occasioned by its neglect or
willful misconduct. The payment to which the Trustee is entitled hereunder shall
be made only from (i) the Additional Payments made by the Borrower pursuant to
the Agreement, or (ii) from other moneys available therefor. Any amounts payable
to the Trustee pursuant to this Section 6.03 shall be payable upon demand and
shall bear interest from the date of demand therefor at the Interest Rate for
Advances.
Section 6.04. Intervention by Trustee. The Trustee may intervene on
behalf of the Holders, and shall intervene if requested to do so in writing by
the Holders of at least twenty-five percent (25%) of the aggregate principal
amount of Bonds then outstanding, in any judicial proceeding to which the
Issuer, the Bank or the Borrower is a party and which in the opinion of the
Trustee and its counsel has a substantial bearing on the interests of Holders of
the Bonds. The rights and obligations of the Trustee under this Section are
subject to the approval of that intervention by a court of competent
jurisdiction. The Trustee may require that a satisfactory indemnity bond be
provided to it in accordance with Sections 6.01 and 6.02 hereof before it takes
action under this Section.
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Section 6.05. Successor Trustee. Anything herein to the contrary
notwithstanding,
(a) any corporation or association (i) into which the Trustee may be
converted or merged, (ii) with which the Trustee or any successor to it may be
consolidated or (iii) to which it may sell or transfer its assets and trust
business as a whole or substantially as a whole, or any corporation or
association resulting from any such conversion, merger, consolidation, sale or
transfer, ipso facto, shall be and become successor Trustee hereunder and shall
be vested with all of the title to the whole property or trust estate hereunder;
and
(b) that corporation or association shall be vested further, as was its
predecessor, with each and every trust, property, remedy, power, right, duty,
obligation, discretion, privilege, claim, demand, cause of action, immunity,
estate, title, interest and lien expressed or intended by this Indenture to be
exercised by, vested in or conveyed to the Trustee, without the execution or
filing of any instrument or document or any further act on the part of any of
the parties hereto.
Any successor Trustee, however, shall be a trust company or a
commercial bank having the powers of a trust company, authorized to exercise
trust powers in the State, and shall have a reported capital and surplus of not
less than $10,000,000.
Section 6.06. Appointment of Co-Trustee. It is the purpose of this
Indenture that there shall be no violation of any law of any jurisdiction
(including without limitation, the laws of the State) denying or restricting the
right of banks or trust companies to transact business as trustees in that
jurisdiction. It is recognized that, (a) if there is litigation under this
Indenture or other instruments or documents relating to the Bonds and the
Project, and in particular, in case of the enforcement hereof or thereof upon a
default or an Event of Default, or (b) if the Trustee should deem that, by
reason of any present or future law of any jurisdiction, it may not (i) exercise
any of the powers, rights or remedies granted herein to the Trustee, (ii) hold
title to the properties, in trust, as granted herein, or (iii) take any action
which may be desirable or necessary in connection therewith, it may be necessary
that the Trustee appoint an individual or additional institution as a
co-Trustee. The following provisions of this Section are adopted to these ends.
In the event that the Trustee appoints an individual or additional
institution as a co-Trustee, each and every trust, property, remedy, power,
right, duty, obligation, discretion, privilege, claim, demand, cause of action,
immunity, estate, title, interest and lien expressed or intended by this
Indenture to be exercised by, vested in or conveyed to the Trustee shall be
exercisable by, vest in and be conveyed to that co-Trustee, but only to the
extent necessary for it to be so vested and conveyed and to enable that
co-Trustee to exercise it. Every covenant, agreement and obligation necessary to
the exercise thereof by that co-Trustee shall run to and be enforceable by it.
Should any instrument or document in writing from the Issuer reasonably
be required by the co-Trustee so appointed by the Trustee for vesting and
conveying more fully and certainly in and to that co-Trustee those trusts,
properties, remedies, powers, rights, duties, obligations, discretions,
privileges, claims, demands, causes of action, immunities, estates, titles,
interests and
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liens, that instrument or document shall be executed, acknowledged
and delivered, but not prepared, by the Issuer. In case any co-Trustee or a
successor to it shall die, become incapable of acting, resign or be removed, all
of the trusts, properties, remedies, powers, rights, duties, obligations,
discretions, privileges, claims, demands, causes of action, immunities, estates,
titles, interests and liens of the co-Trustee shall be exercised by, vest in and
be conveyed to the Trustee, to the extent permitted by law, until the
appointment of a successor to the co-Trustee.
Section 6.07. Resignation by the Trustee. The Trustee may resign at any
time from the trusts created hereby by giving written notice of the resignation
to the Issuer, the Borrower, the Bank and the Remarketing Agent and by mailing
written notice of the resignation to the Holders as their names and addresses
appear on the Register at the close of business fifteen (15) days prior to the
mailing. The resignation shall take effect upon the appointment of a successor
Trustee.
Section 6.08. Removal of the Trustee. The Trustee may be removed at any
time by an instrument or document or concurrent instruments or documents in
writing delivered to the Trustee, with copies thereof mailed to the Issuer, the
Bank, the Remarketing Agent and the Borrower, and signed by or on behalf of the
Holders of at least a majority in aggregate principal amount of the Bonds then
outstanding.
The Trustee also may be removed at any time for any breach of trust or
for acting or proceeding in violation of, or for failing to act or proceed in
accordance with, any provision of this Indenture with respect to the duties and
obligations of the Trustee by any court of competent jurisdiction upon the
application of the Issuer, the Bank or the Holders of not less than twenty
percent (20%) in aggregate principal amount of the Bonds then outstanding under
this Indenture.
Any removal of the Trustee shall take effect upon the appointment of a
successor Trustee.
Section 6.09. Appointment of Successor Trustee. If (i) the Trustee
shall resign, shall be removed, shall be dissolved, or shall become otherwise
incapable of acting hereunder, (ii) the Trustee shall be taken under the control
of any public officer or officers, or (iii) a receiver shall be appointed for
the Trustee by a court, then a successor Trustee shall be appointed by the
Issuer, with the written consent of the Borrower; provided, that if a successor
Trustee is not so appointed within ten (10) days after (a) a notice of
resignation or an instrument or document of removal is received by the Issuer,
as provided in Section 6.07 and 6.08 hereof, respectively, or (b) the Trustee is
dissolved, taken under control, becomes otherwise incapable of acting or a
receiver is appointed, in each case, as provided above, then, so long as the
Issuer shall not have appointed a successor Trustee, the Holders of at least a
majority in aggregate principal amount of Bonds then outstanding may designate a
successor Trustee by an instrument or document or concurrent instrument or
documents in writing signed by or on behalf of those Holders. If no appointment
of a successor Trustee shall be made pursuant to the foregoing provisions of
this Section, the Holder of any Bond outstanding hereunder, the Bank or any
retiring Trustee may apply to any court of competent jurisdiction to appoint a
successor Trustee. Such court may thereupon, after such notice, if any, as such
court may deem proper and prescribe, appoint a successor Trustee.
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Every successor Trustee appointed pursuant to this Section shall be a
trust company or a bank having the powers of a trust company and shall have a
reported capital and surplus of not less than $25,000,000 and shall be willing
to accept the trusteeship under the terms and conditions of this Indenture. In
addition, unless an Event of Default hereunder or under the Agreement shall have
occurred and remain uncured, the appointment of any successor Trustee shall be
subject to the written consent of the Borrower, such consent not to be withheld
unreasonably.
Every successor Trustee appointed hereunder shall execute and
acknowledge, and shall deliver to its predecessor, the Issuer, the Bank, the
Remarketing Agent and the Borrower, an instrument or document in writing
accepting the appointment. Thereupon, without any further act, the successor
shall become vested with all of the trusts, properties, remedies, powers,
rights, duties, obligations, discretions, privileges, claims, demands, causes of
action, immunities, estates, titles, interests and liens of its predecessor.
Upon the written request of its successor, the Issuer, the Bank or the Borrower,
the predecessor Trustee (i) shall execute and deliver an instrument or document
transferring to its successor all of the trusts, properties, remedies, powers,
rights, duties, obligations, discretions, privileges, claims, demands, causes of
action, immunities, estates, titles, interests and liens of the predecessor
Trustee hereunder, and (ii) shall take any other action necessary to duly
assign, transfer and deliver to its successor all property (including without
limitation, all securities and moneys and after first deducting any fees and
expenses owed to the Trustee) held by it as Trustee. Should any instrument or
document in writing from the Issuer be requested by any successor Trustee for
vesting and conveying more fully and certainly in and to that successor the
trusts, properties, remedies, powers, rights, duties, obligations, discretions,
privileges, claims, demands, causes of action, immunities, estates, titles,
interests and liens vested or conveyed or intended to be vested or conveyed
hereby in or to the predecessor Trustee, the Issuer shall execute, acknowledge
and deliver that instrument or document.
In the event of a change in the Trustee, the predecessor Trustee shall
cease to be custodian of any moneys which it may hold pursuant to this Indenture
and shall transfer such moneys to the successor Trustee, which shall become
custodian therefor.
Section 6.10. Adoption of Authentication. In case any of the Bonds
shall have been authenticated, but shall not have been delivered, any successor
Trustee may adopt the certificate of authentication of any predecessor Trustee
and may deliver those Bonds so authenticated as provided herein. In case any
Bonds shall not have been authenticated, any successor Trustee may authenticate
those Bonds either in the name of any predecessor or in its own name. In all
cases, the certificate of authentication shall have the same force and effect as
provided in the Bonds or in this Indenture with respect to the certificate of
authentication of the predecessor Trustee.
Section 6.11. Dealing in Bonds. The Trustee, the Bank, their
affiliates, and any directors, officers, partners, employees or agents thereof,
in good faith, may become the owners of Bonds
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secured hereby with the same rights which it or they would have hereunder if the
Trustee or the Bank did not serve in those capacities.
Section 6.12. Representations, Agreements and Covenants of Trustee. The
Trustee hereby represents that it is a national banking association duly
organized and validly existing under the laws of the United States and duly
authorized to exercise corporate trust powers in the State, and that it has an
unimpaired reported capital and surplus of not less than $10,000,000. The
Trustee covenants that it will take such action, if any, as is necessary to
remain duly authorized to exercise corporate trust powers and that it will
maintain an unimpaired reported capital and surplus of not less than
$10,000,000. The Trustee accepts and agrees to observe and perform the duties
and obligations of the Trustee to which reference is made in any instrument or
document providing security for any of the Bonds. On or before April 30 of each
year, the Trustee shall provide a written notice to the Issuer specifying the
principal amount of Bonds outstanding as of the preceding December 31.
Section 6.13. Concerning the Remarketing Agent. Banc One Capital
Markets, Inc. is hereby appointed the Remarketing Agent. Any subsequent
Remarketing Agent shall be appointed by the Bank with the consent of the
Borrower and shall meet the qualifications set forth in this Section and Section
6.14 hereof. The Remarketing Agent shall designate to the Trustee its principal
remarketing office and signify its acceptance of the duties and obligations
imposed upon it hereunder by a written instrument of acceptance delivered to the
Issuer, the Bank, the Borrower and the Trustee. In addition, the Remarketing
Agent will agree particularly to:
(a) compute the Weekly Interest Rate, the One Month Interest Rate, the
Three Month Interest Rate, the Six Month Interest Rate, the One Year Interest
Rate, the Five Year Interest Rate and the Fixed Interest Rate, as applicable,
and give notices of such computations to the Trustee on each applicable Interest
Rate Determination Date, all in accordance with this Indenture; and
(b) keep such records relating to its computations of interest rates for
the Project Bonds as shall be consistent with prudent industry practice and to
make such records available for inspection by the Issuer, the Trustee, the Bank
and the Borrower at all reasonable times.
The Remarketing Agent shall be entitled to advice of legal counsel on
any matter relating to the Remarketing Agent's obligations hereunder and shall
be entitled to act upon the opinion of such counsel in the exercise of
reasonable care in fulfilling such obligations.
The Remarketing Agent shall be entitled to appoint additional
co-Remarketing Agents to assist in the performance of the Remarketing Agent's
obligations under this Indenture, and any such appointment shall be effective
without any action by the Issuer, the Borrower or the Bank being necessary;
provided that any such co-Remarketing Agent, shall have a capitalization of at
least $5,000,000, or shall have a line of credit with a commercial bank in the
amount of at least $5,000,000, shall be in conformity with all standards and
requirements of the Municipal Securities Rulemaking Board and the Securities and
Exchange Commission, and shall be authorized by law to perform all the duties
imposed upon it by this Indenture.
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Section 6.14. Qualifications of Remarketing Agent. The Remarketing
Agent shall have a capitalization of at least $5,000,000, or have a line of
credit with a commercial bank in the amount of at least $5,000,000 and shall be
authorized by law to perform all the duties imposed upon it by this Indenture.
The Remarketing Agent may at any time resign and be discharged of the duties and
obligations created by this Indenture by giving at least thirty (30) days'
notice of such resignation to the Issuer, the Borrower, the Bank and the
Trustee. The Remarketing Agent may be removed at any time by the Borrower, with
the written consent of the Bank. To effect such removal, the Borrower shall give
at least thirty (30) days' notice of such removal to the Remarketing Agent, the
Issuer, the Bank and the Trustee.
Upon any resignation of the Remarketing Agent, the departing
Remarketing Agent shall pay over, assign and deliver any moneys and Project
Bonds and Beneficial Ownership Interests held by it in such capacity to its
successor or, if there be no successor, to the Trustee.
In the event that the Remarketing Agent shall resign, or be removed or
dissolved, or if the property or affairs of the Remarketing Agent shall be taken
under the control of any state or federal court or administrative body because
of bankruptcy or insolvency, or for any other reason, and the Bank shall not
have appointed a successor Remarketing Agent, the Trustee, notwithstanding the
provisions of the first paragraph of this Section, shall ipso facto be deemed to
be the Remarketing Agent until the appointment by the Borrower of a successor
Remarketing Agent; provided, however, that the Trustee shall not remarket
Project Bonds or Beneficial Ownership Interests or fix the interest rate for the
Project Bonds, but shall be required only to implement the purchase of Project
Bonds and Beneficial Ownership Interests pursuant to a draw on the Letter of
Credit as provided for in Section 5.03 hereof.
The Trustee, within thirty (30) days of the resignation or removal of
the Remarketing Agent or the appointment of a successor Remarketing Agent, shall
give notice thereof by registered or certified mail to the applicable Rating
Service (if the Project Bonds have been rated) and to the registered Holders of
the Project Bonds.
Section 6.15. Remarketing of Project Bonds. No later than 3:00 p.m.
local time at the Operations Office of the Trustee on (a) the eighth Business
Day prior to each Bond Purchase Date while the Project Bonds bear interest at
the Three Month Interest Rate, the Six Month Interest Rate, the One Year
Interest Rate or the Five Year Interest Rate, or (b) the sixth calendar day
prior to each Bond Purchase Date or the next succeeding Business Day if such
sixth day is not a Business Day while the Project Bonds bear interest at the
Weekly Interest Rate, or (c) the fifth Business Day prior to each Bond Purchase
Date while the Project Bonds bear interest at the One Month Interest Rate, the
Trustee shall give notice to the Remarketing Agent by telephone or telecopy,
confirmed on the same day in writing, which states (i) the name and address of
each Holder or Beneficial Owner which has given notice of exercise of an option
with respect to such Bond Purchase Date as provided in paragraph (c) of Section
2.04 hereof, and the principal amount of Project Bonds or Beneficial Ownership
Interests to be tendered by such Holder or Beneficial Owner or deemed tendered
by such Holder, and (ii) the aggregate principal amount of
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Project Bonds or Beneficial Ownership Interests which are deemed to be tendered
pursuant to Sections 2.05 or 2.06 hereof. Additionally, no later than 1:00 p.m.
local time at the Operations Office of the Trustee on the eighth Business Day or
the fifth Business Day, whichever is applicable, prior to each Bond Purchase
Date upon which there is a mandatory tender of Project Bonds or Beneficial
Ownership Interests pursuant to Sections 2.05 or 2.06 hereof, the Trustee shall
give notice to the Remarketing Agent by telephone, telecopy or in writing, which
states the aggregate principal amount of Project Bonds with respect to which the
Trustee has not received an election to retain pursuant to Sections 2.05 or 2.06
hereof.
Based upon such notices from the Trustee, the Remarketing Agent shall
use its best efforts to sell all Project Bonds or Beneficial Ownership
Interests, as applicable, tendered pursuant to Sections 2.04, 2.05 and 2.06
hereof for settlement on the applicable Bond Purchase Date. Except as
hereinafter provided, any such sale shall be at such rate of discount or premium
as, in the judgment of the Remarketing Agent, having due regard to prevailing
financial market conditions, shall be necessary.
The Remarketing Agent shall have the right to remarket any Project
Bonds or Beneficial Ownership Interests (or portion thereof) tendered pursuant
to Sections 2.04, 2.05 or 2.06 hereof; provided, however, that no such Bond or
Beneficial Ownership Interest shall be remarketed at a price less than 100% of
the principal amount thereof plus accrued interest (if any) without the prior
written consent of the Borrower and the Bank. The Remarketing Agent shall have
the right to purchase any Project Bond and Beneficial Ownership Interest
tendered or deemed tendered pursuant to Sections 2.04, 2.05 or 2.06 hereof at
100% of the principal amount thereof, and to thereafter sell such Project Bond
or Beneficial Ownership Interest. Any such purchase shall constitute a
remarketing hereunder.
The Remarketing Agent shall not remarket any Project Bond or Beneficial
Ownership Interest to the Issuer, the Borrower, any guarantor of the Bonds
(excluding the Bank) or any person which is an "insider" of the Issuer, the
Borrower or any such guarantor within the meaning of the United States
Bankruptcy Code.
No later than 11:00 a.m. according to the local time at the Drawing
Office of the Bank on each Bond Purchase Date, the Remarketing Agent shall pay
to the Trustee, in immediately available funds, the proceeds theretofore
received by the Remarketing Agent from the remarketing of Project Bonds and
Beneficial Ownership Interests tendered for purchase on such Bond Purchase Date;
provided, that the Remarketing Agent may use its best efforts to cause the
purchasers of the remarketed Project Bonds and the Beneficial Ownership
Interests to pay the purchase price plus accrued interest (if any) to the
Trustee in immediately available funds. The proceeds from the remarketing of the
Project Bonds and Beneficial Ownership Interests shall be segregated from any
funds of the Borrower or the Issuer and shall in no case be considered to be or
be assets of the Borrower or the Issuer.
There shall be deposited in the Remarketing Reimbursement Fund, on each
Bond Purchase Date, the remarketing proceeds received by the Trustee pursuant to
this Section plus, if
97
necessary, any moneys from a draw on the Letter of Credit to be used to pay the
purchase price of tendered Project Bonds and Beneficial Ownership Interests
required to be purchased on such Bond Purchase Date. There shall also be
deposited in the Remarketing Reimbursement Fund, on each Mandatory Bond Purchase
Date, the moneys drawn on the Letter of Credit to be used to pay the purchase
price of Project Bonds and Beneficial Ownership Interests required to be
purchased on such Mandatory Bond Purchase Date. The Trustee shall use the
amounts deposited in the Remarketing Reimbursement Fund to pay the purchase
price of tendered Project Bonds and Beneficial Ownership Interests. If the
Trustee fails to receive moneys pursuant to a draw properly made on the Letter
of Credit to pay the purchase price of tendered Project Bonds or Beneficial
Ownership Interests, (a) any amount paid by the Bank on such draw shall be
deposited in the Bond Fund and (b) pursuant to Section 7.03 hereof, the Trustee
shall declare the Bonds to be due and payable.
Section 6.16. Delivery of Purchased Project Bonds and Remarketing of
Pledged Bonds. On or before the Business Day next preceding each Bond Purchase
Date, the Remarketing Agent, by telephonic advice, shall notify the Trustee and
the Bank of (i) the principal amount of Project Bonds or Beneficial Ownership
Interests to be sold by the Remarketing Agent pursuant to Section 6.15 hereof
and the purchase price, names, addresses and social security numbers or other
tax identification numbers of the proposed purchasers thereof and (ii) the
principal amount of Project Bonds or Beneficial Ownership Interests tendered for
purchase on such Bond Purchase Date which will not be sold by the Remarketing
Agent pursuant to Section 6.15 hereof. Such telephonic advice shall be confirmed
by written notice delivered or mailed on the same date as the telephonic advice.
Project Bonds and Beneficial Ownership Interests purchased by the
Trustee on a Bond Purchase Date shall be delivered as follows:
(a) Project Bonds sold by the Remarketing Agent pursuant to Section 6.15
hereof shall be delivered to the purchasers thereof. With respect to Beneficial
Ownership Interests sold by the Remarketing Agent pursuant to Section 6.15
hereof, the Remarketing Agent and the Trustee shall take such actions as may be
necessary to reflect the transfer of such Beneficial Ownership Interests to the
purchasers thereof in the book entry system maintained by the Depository.
(b) Project Bonds and Beneficial Ownership Interests not sold by the
Remarketing Agent pursuant to Section 6.15 hereof shall be held as Pledged
Bonds, by the Trustee, as agent for the Bank (provided that if the Project Bonds
are then held in book entry form, the interest of the Trustee in the Pledged
Bonds, as agent for the Bank, shall be recorded through the Depository and no
physical delivery of the Pledged Bonds shall be required), subject to any
instructions from the Bank to deliver the Pledged Bonds to the Bank (or to
record evidence of the Bank's book entry interest therein) and to the pledge in
favor of the Bank created pursuant to the provisions of the Reimbursement
Agreement. Any Pledged Bonds held by the Trustee shall not be released or
transferred except to the Bank or to the Remarketing Agent at the written
direction of the Bank as provided in the last paragraph of this Section.
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Project Bonds or Beneficial Ownership Interests (other than Pledged
Bonds) delivered as provided in this Section shall be registered (or recorded
through the Depository) in the manner directed by the recipient thereof. Pledged
Bonds shall be registered (or recorded through the Depository) in the name of
the Bank or its designee, as requested by the Bank.
The Remarketing Agent shall use its best efforts to remarket Pledged
Bonds, provided, however, that the Remarketing Agent shall not remarket Pledged
Bonds tendered as a result of a mandatory tender pursuant to Section 2.07 hereof
prior to receiving written notice from the Trustee that the Letter of Credit or
any Alternate Letter of Credit has been replaced with an Alternate Letter of
Credit which satisfies the requirements of Section 5.09 hereof. Upon the
remarketing of the Pledged Bonds, the Remarketing Agent shall notify the Bank,
the Trustee and the Borrower of such remarketing, the name, address and social
security or other tax identification number of the purchaser, and the date (the
"Placement Date") that the purchaser shall deliver the purchase price to the
Trustee or the Remarketing Agent by 11:00 a.m. local time at the Operations
Office of the Trustee. The Placement Date shall be at least two Business Days
after the date the notice of the purchase is given by the Remarketing Agent.
No later than 11:00 a.m. according to the local time at the Operations
Office of the Trustee on each Placement Date, the Remarketing Agent shall pay to
the Trustee, in immediately available funds, the proceeds theretofore received
by the Remarketing Agent from the remarketing of Pledged Bonds on such Placement
Date; provided, that the Remarketing Agent may use its best efforts to cause the
purchasers of the remarketed Pledged Bonds to pay the purchase price plus
accrued interest (if any) to the Trustee in immediately available funds. The
proceeds from the remarketing of the Pledged Bonds shall be segregated from any
funds of the Borrower or the Issuer and shall in no case be considered to be or
be assets of the Borrower or the Issuer. The Trustee shall deposit such funds in
the Remarketing Reimbursement Fund and shall pay the Bank such funds by wire
transfer on the Placement Date. The Bank shall deliver any Pledged Bonds held by
the Bank (or evidence of book entry interests in such Pledged Bonds) which have
been so remarketed to the Trustee against payment on the Placement Date. With
respect to any Pledged Bonds not so held by the Bank, the Bank shall direct the
Trustee to release such Pledged Bonds which have been so remarketed to the
Remarketing Agent against payment therefor on the Placement Date. On the
Placement Date, the Trustee shall authenticate and deliver, if applicable, new
Bonds in replacement of the remarketed Pledged Bonds to the purchasers thereof.
(End of Article VI)
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ARTICLE VII
DEFAULT PROVISIONS AND REMEDIES
OF TRUSTEE AND HOLDERS
Section 7.01. Defaults; Events of Default. The occurrence of any of the
following events is defined as and declared to be and to constitute an Event of
Default hereunder:
(a) Failure to pay when due any interest on any Bond;
(b) Payment of the principal of or any premium on any Bond shall not be
made when and as that principal or premium shall become due and payable, whether
at stated maturity, by redemption, pursuant to any mandatory sinking fund
requirements, by acceleration or otherwise;
(c) Failure to pay on a Bond Purchase Date or Mandatory Bond Purchase Date
amounts due to the Holder of any Project Bonds or the Beneficial Owner of any
Beneficial Ownership Interests tendered or deemed tendered to the Trustee
pursuant to Section 2.04, 2.05, 2.06 or 2.07 hereof;
(d) Failure by the Issuer to observe or perform any other covenant,
agreement or obligation on its part to be observed or performed contained in
this Indenture or in the Bonds, which failure shall have continued for a period
of 30 days after written notice, either by registered or certified mail, to the
Issuer, the Bank and the Borrower specifying the failure and requiring that it
be remedied, which notice may be given by the Trustee in its discretion and
shall be given by the Trustee at the written request of the Bank or the Holders
of not less than 25 percent in aggregate principal amount of Bonds then
outstanding;
(e) The occurrence and continuation of an Event of Default as defined in
Section 7.1 of the Agreement;
(f) Receipt by the Trustee of a written notice from the Bank that an Event
of Default has occurred and is continuing under the Reimbursement Agreement and
directing the Trustee to accelerate the maturity of the Project Bonds;
(g) Failure of the Bank to honor any drawing properly made in accordance
with the terms of the Letter of Credit;
(h) The Bank shall: (i) commence a proceeding under any Federal or state
insolvency, reorganization or similar law, or have such a proceeding commenced
against it and either have an order of insolvency or reorganization entered
against it or have the proceeding remain undismissed and unstayed for 90 days;
or (ii) have a receiver, conservator, liquidator or trustee appointed for it or
for the whole or any substantial part of its property; and
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(i) Receipt by the Trustee of written notice from the Bank by the fifth
Business Day following the honoring of an interest drawing on the Letter of
Credit that the amount available to be drawn by the Trustee under the Letter of
Credit has not been reinstated to an amount not less than 100% of the
outstanding principal of, plus 45 days' interest on the Project Bonds (or 195
days' interest on the Project Bonds if the Interest Rate Mode on the Project
Bonds is six months or longer) computed at the Maximum Rate.
The term "default" or "failure" as used in this Article means (i) a
default or failure by the Issuer in the observance or performance of any of the
covenants, agreements or obligations on its part to be observed or performed
contained in this Indenture or in the Bonds, or (ii) a default or failure by the
Borrower under the Agreement, in either case, exclusive of any period of grace
or notice required to constitute a default or failure an Event of Default, as
provided above or in the Agreement.
The provisions of paragraph (h) above are subject to the conditions
that (1) none of the acts or circumstances specified therein shall constitute an
Event of Default if the Borrower, within sixty (60) days thereafter, provides an
Alternate Letter of Credit meeting the requirements of Section 5.09 hereof and
the Trustee shall have complied with the mandatory tender notice provisions of
Section 2.06 hereof and (2) the declaration of an Event of Default due to any of
the acts or circumstances specified therein, and the exercise of remedies upon
any such declaration, shall be subject to any applicable limitations of
bankruptcy, insolvency or receivership laws applicable to the Bank affecting or
precluding such declaration or exercise during the pendency of or immediately
following any bankruptcy, insolvency, receivership, liquidation or
reorganization proceedings.
Section 7.02. Notice of Default. If an Event of Default shall occur,
within five (5) days of obtaining knowledge of such Event of Default, the
Trustee shall give written notice of the Event of Default, by registered or
certified mail, to the Issuer, the Borrower, the Bank and the Remarketing Agent
for the Bonds.
Section 7.03. Acceleration. Upon the occurrence of an Event of Default
as specified in paragraphs (a), (b), (c), (f), (g), or (i) of Section 7.01
hereof, the Trustee shall declare, by a notice in writing delivered to the
Issuer and the Borrower, the principal of all Bonds then outstanding (if not
then due and payable), together with interest accrued thereon, to be due and
payable immediately. Upon the occurrence of any other Event of Default (except
an Event of Default as specified in paragraph (h) of Section 7.01 hereof), the
Trustee shall, upon the written direction of the Bank, declare by a notice in
writing delivered to the Issuer and the Borrower the principal of all Bonds then
outstanding (if not then due and payable), together with interest accrued
thereon, to be due and payable immediately. Upon the occurrence of an Event of
Default described in paragraph (h) of Section 7.01 hereof, if there is not then
existing an Event of Default described in paragraphs (a), (b), (c), (f), (g) or
(i) of Section 7.01 hereof, then the Trustee, without the consent of the Bank,
may, and upon the written request of the Holders of not less than 25% in
aggregate principal amount of Bonds then outstanding shall, declare the
principal of all Bonds then outstanding, together with the interest accrued
thereon, to be due and payable immediately.
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Any such declaration shall be by notice in writing to the Issuer, the
Holders, the Bank, the Remarketing Agent and the Borrower, and, upon said
declaration, principal and interest on all Bonds shall become and be immediately
due and payable. The Trustee immediately upon such declaration shall give
written notice thereof to the Holders. Such notice shall specify the date on
which payment of principal and interest shall be tendered to the Holders of the
Bonds. Interest shall accrue to the payment date determined by the Trustee
(which date shall be within the period for which principal and interest on the
Bonds is covered by the amounts available under the Letter of Credit) pursuant
to such declaration or the actual payment date, if later. Upon any declaration
of acceleration hereunder, the Trustee shall immediately exercise such rights as
it may have under the Agreement and the Notes to declare all payments thereunder
to be immediately due and payable and, pursuant to paragraph (b) in Section 5.03
hereof, shall draw upon the Letter of Credit to the full extent permitted by the
terms thereof.
Section 7.04. Other Remedies; Rights of Holders. With or without taking
action under Section 7.03 hereof, upon the occurrence and continuance of an
Event of Default, the Trustee may pursue any other available remedy to enforce
the payment of Bond Service Charges or the observance and performance of any
other covenant, agreement or obligation under this Indenture, the Agreement, the
Notes or any other instrument providing security, directly or indirectly, for
the Bonds, provided that the Trustee shall not pursue any such remedy without
the prior written consent of the Bank so long as no Event of Default described
in Section 7.01(g) or (h) has occurred and is continuing.
If, upon the occurrence and continuance of an Event of Default, the
Trustee is required so to do by the Holders of at least a majority in aggregate
principal amount of Bonds outstanding or by the Bank (if no Event of Default
under Section 7.01(g) or (h) has occurred and is continuing), the Trustee
(subject to the provisions of Sections 6.01 and 6.02 hereof and particularly
subparagraph 6.01(c)(iv) and Subsection 6.02(j) of those Sections) shall
exercise any rights and powers conferred by this Section and by Section 7.03
hereof. Anything in this or the next succeeding paragraph to the contrary
notwithstanding, so long as no Event of Default under Section 7.01(g) or (h)
hereof has occurred and is continuing, the Bank shall have the exclusive right
to give any such directions to the Trustee.
No remedy conferred upon or reserved to the Trustee (or to the Holders)
by this Indenture is intended to be exclusive of any other remedy. Each remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or otherwise to the Trustee or to the Holders now or hereafter
existing.
No delay in exercising or omission to exercise any remedy, right or
power accruing upon any default or Event of Default shall impair that remedy,
right or power or shall be construed to be a waiver of any default or Event of
Default or acquiescence therein. Every remedy, right and power may be exercised
from time to time and as often as may be deemed to be expedient.
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No waiver of any default or Event of Default hereunder, whether by the
Trustee or by the Holders, shall extend to or shall affect any subsequent
default or Event of Default or shall impair any remedy, right or power
consequent thereon.
As the assignee of all right, title and interest of the Issuer in and
to the Agreement (except for the Unassigned Issuer's Rights), the Trustee is
empowered to enforce each remedy, right and power granted to the Issuer under
the Agreement.
Section 7.05. Right of Holders to Direct Proceedings. Anything to the
contrary in this Indenture notwithstanding, the Holders of at least a majority
in aggregate principal amount of Bonds then outstanding shall have the right at
any time to direct, by an instrument or document or instruments or documents in
writing executed and delivered to the Trustee, the method and place of
conducting all proceedings to be taken in connection with the enforcement of the
terms and conditions of this Indenture or any other proceedings hereunder;
provided, that (i) any direction shall not be other than in accordance with the
provisions of law and of this Indenture, (ii) the Trustee shall be indemnified
as provided in Sections 6.01 and 6.02 hereof, (iii) the Trustee may take any
other action which it deems to be proper and which is not inconsistent with the
direction, and (iv) anything in the foregoing to the contrary notwithstanding,
so long as no Event of Default under Section 7.01(g) or (h) hereof has occurred
and is continuing, the Bank shall have the exclusive right to give any such
directions to the Trustee.
Section 7.06. Application of Moneys. All moneys received by the Trustee
after acceleration of the maturity of the Bonds and derived from any drawing
made upon the Letter of Credit shall be applied by the Trustee to and only to
the payment of principal of or interest on the Project Bonds. Subject to the
foregoing, after payment of any costs, expenses, liabilities and advances paid,
incurred or made by the Trustee in the collection of moneys pursuant to any
right given or action taken under the provisions of this Article or the
provision of the Agreement or the Notes (including without limitation,
reasonable attorneys' fees and expenses, except as limited by law or judicial
order or decision entered in any action taken under this Article VII) and all
fees owing to the Trustee for Ordinary or Extraordinary Services and Expenses,
and all amounts owed to the Issuer pursuant to the Unassigned Issuer's Rights,
all moneys received by the Trustee, shall be applied as follows, subject to any
provision made pursuant to Sections 4.05, 5.06 or 5.07 hereof:
(a) Unless the principal of all of the Bonds shall have become, or shall
have been declared to be, due and payable, all of those moneys shall be
deposited in the Bond Fund and shall be applied;
First -- To the payment to the Holders entitled thereto of all
installments of interest then due on the Bonds, in the order of the dates of
maturity of the installments of that interest, beginning with the earliest date
of maturity and if the amount available is not sufficient to pay in full any
particular installment, then to the payment thereof ratably, according to the
amounts due on that installment, to the Holders entitled thereto, without any
discrimination or privilege, except as to any difference in the respective rates
of interest specified in the Bonds; and
103
Second -- To the payment to the Holders entitled thereto of the unpaid
principal of any of the Bonds which shall have become due (other than Bonds
previously called for redemption for the payment of which moneys are held
pursuant to the provisions of this Indenture), whether pursuant to any mandatory
sinking fund requirements, in the order of their due dates, beginning with the
earliest due date, with interest on those Bonds from the respective dates upon
which they become due at the rates specified in those Bonds, and if the amount
available is not sufficient to pay in full all Bonds due on any particular date,
together with that interest, then to the payment thereof ratably, according to
the amounts of principal due on that date, to the Holders entitled thereto,
without any discrimination or privilege, except as to any difference in the
respective rates of interest specified in the Bonds.
(b) If the principal of all of the Bonds shall have become due or shall
have been declared to be due and payable pursuant to this Article, all of those
moneys shall be deposited into the Bond Fund and shall be applied to the payment
of the principal and interest then due and unpaid upon the Bonds, without
preference or priority of principal over interest, of interest over principal,
of any installment of interest over any other installment of interest, or of any
Bond over any other Bond, ratably, according to the amounts due respectively for
principal and interest, to the Holders entitled thereto, without any
discrimination or privilege, except as to any difference in the respective rates
of interest specified in the Bonds.
(c) If the principal of all of the Bonds shall have been declared to be due
and payable pursuant to this Article, and if that declaration thereafter shall
have been rescinded and annulled under the provisions of Section 7.10 hereof,
subject to the provisions of paragraph (b) of this Section in the event that the
principal of all of the Bonds shall become due and payable later, the moneys
shall be deposited in the Bond Fund and shall be applied in accordance with the
provisions of Article V hereof.
(d) Whenever moneys are to be applied pursuant to the provisions of this
Section, those moneys shall be applied at such times, and from time to time, as
the Trustee shall determine, having due regard to the amount of moneys available
for application and the likelihood of additional moneys becoming available for
application in the future. Whenever the Trustee shall direct the application of
those moneys, it shall fix the date upon which the application is to be made,
and upon that date, interest shall cease to accrue on the amounts of principal,
if any, to be paid on that date, provided the moneys are available therefor. The
Trustee shall give notice of the deposit with it of any moneys and of the fixing
of that date, all consistent with the requirements of Section 3.05 hereof for
the establishment of, and for giving notice with respect to, a Special Record
Date for the payment of overdue interest. The Trustee shall not be required to
make payment of principal of and any premium on a Bond to the Holder thereof,
until the Bond shall be presented to the Trustee for appropriate endorsement or
for cancellation if it is paid fully, subject to the provisions of Section 3.06
hereof.
Section 7.07. Remedies Vested in Trustee. All rights of action
(including without limitation, the right to file proof of claims) under this
Indenture or under any of the Bonds may be enforced by the Trustee without the
possession of any of the Bonds or the production thereof in any trial
104
or other proceeding relating thereto. Any suit or proceeding instituted by the
Trustee shall be brought in its name as Trustee without the necessity of joining
any Holders as plaintiffs or defendants. Any recovery of judgment shall be for
the benefit of the Holders of the outstanding Bonds, subject to the provisions
of this Indenture.
Section 7.08. Rights and Remedies of Holders. A Holder shall not have
any right to institute any suit, action or proceeding for the enforcement of
this Indenture, for the execution of any trust hereof, or for the exercise of
any other remedy hereunder, unless:
(a) there has occurred and be continuing an Event of Default of which the
Trustee has been notified, as provided in paragraph (f) of Section 6.02 hereof,
or of which it is deemed to have notice under that paragraph,
(b) the Holders of at least twenty-five percent (25%) in aggregate
principal amount of Bonds then outstanding shall have made written request to
the Trustee and shall have afforded the Trustee reasonable opportunity to
proceed to exercise the remedies, rights and powers granted herein or to
institute the suit, action or proceeding in its own name, and shall have offered
indemnity to the Trustee as provided in Sections 6.01 and 6.02 hereof, and
(c) the Trustee thereafter shall have failed or refused to exercise the
remedies, rights and powers granted herein or to institute the suit, action or
proceeding in its own name.
At the option of the Trustee, that notification (or notice), request,
opportunity and offer of indemnity are conditions precedent in every case, to
the institution of any suit, action or proceeding described above. Anything in
the foregoing to the contrary notwithstanding, no Holder of any Bond shall have
any right to institute any suit, action or proceeding at law or in equity for
the enforcement of this Indenture or for the execution of any trust hereof or
for the appointment of a receiver or any other remedy hereunder unless an Event
of Default under Section 7.01(g) or (h) hereof shall have occurred and be
continuing.
No one or more Holders of the Bonds shall have any right to affect,
disturb or prejudice in any manner whatsoever the security or benefit of this
Indenture by its or their action, or to enforce, except in the manner provided
herein, any remedy, right or power hereunder. Any suit, action or proceedings
shall be instituted, had and maintained in the manner provided herein for the
benefit of the Holders of all Bonds then outstanding. Nothing in this Indenture
shall affect or impair, however, the right of any Holder to enforce the payment
of the Bond Service Charges on any Bond owned by that Holder at and after the
maturity thereof, at the place, from the sources and in the manner expressed in
that Bond.
Section 7.09. Termination of Proceedings. In case the Trustee shall
have proceeded to enforce any remedy, right or power under this Indenture in any
suit, action or proceedings, and the suit, action or proceedings shall have been
discontinued or abandoned for any reason, or shall have been determined
adversely to the Trustee, the Issuer, the Trustee, the Bank and the Holders
shall be restored to their former positions and rights hereunder, respectively,
and all rights,
105
remedies and powers of the Trustee shall continue as if no suit, action or
proceedings had been taken.
Section 7.10. Waivers of Events of Default. Except as hereinafter
provided, at any time, in its discretion, the Trustee, but only with the express
written consent of the Bank, other than in the case of an Event of Default
described in Section 7.01(a), (b), (c), (g) or (h) hereof, may waive any Event
of Default hereunder and its consequences and may rescind and annul any
declaration of maturity of principal of the Bonds. The Trustee shall do so upon
the written request of the Bank (other than in the case of an Event of Default
described in Section 7.01 (a), (b), (c), (g) or (h) hereof). Notwithstanding the
foregoing, prior to waiving any Event of Default described in Section 7.01(f) or
(i) hereof, the Trustee shall have received written confirmation from the Bank
that the Letter of Credit has been reinstated to an amount not less than 100% of
the outstanding principal of, plus 45 days interest (or 195 days interest if the
Interest Rate Mode on the Project Bonds is six months or longer) on, the Project
Bonds computed at the Maximum Rate.
There shall not be so waived, however, any Event of Default described
in paragraphs (a), (b), (c), (g) or (h) of Section 7.01 hereof or any
declaration of acceleration in connection therewith rescinded or annulled except
with the written consent of the Holders of all Bonds then outstanding and of the
Bank. In the case of the waiver or rescission and annulment, or in case any
suit, action or proceedings taken by the Trustee on account of any Event of
Default shall have been discontinued, abandoned or determined adversely to it;
the Issuer, the Trustee, the Bank and the Holders shall be restored to their
former positions and rights hereunder, respectively. No waiver or rescission
shall extend to any subsequent or other Event of Default or impair any right
consequent thereon.
(End of Article VII)
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ARTICLE VIII
SUPPLEMENTAL INDENTURES
Section 8.01. Supplemental Indentures Generally. The Issuer and the
Trustee may enter into indentures supplemental to this Indenture, as provided in
this Article and pursuant to the other provisions therefor in this Indenture.
Section 8.02. Supplemental Indentures Not Requiring Consent of Holders.
Without the consent of, or (except as provided in Section 8.04 hereof) notice
to, any of the Holders, the Issuer and the Trustee, but with the prior consent
of the Bank and the Borrower, may enter into indentures supplemental to this
Indenture which shall not, in the opinion of the Issuer and the Trustee, be
inconsistent with the terms and provisions hereof for any one or more of the
following purposes:
(a) To cure any ambiguity, inconsistency or formal defect or omission in
this Indenture;
(b) To grant to or confer upon the Trustee for the benefit of the
Holders any additional rights, remedies, powers or authority that lawfully may
be granted to or conferred upon the Holders or the Trustee;
(c) To assign additional revenues under this Indenture;
(d) To accept additional security and instruments and documents of further
assurance with respect to the Project;
(e) To add to the covenants, agreements and obligations of the Issuer under
this Indenture, other covenants, agreements and obligations to be observed for
the protection of the Holders, or to surrender or limit any right, power or
authority reserved to or conferred upon the Issuer in this Indenture including,
without limitation, the limitation of rights of redemption so that in certain
instances Bonds of different series will be redeemed in some prescribed
relationship to one another for the protection of the Holders of a particular
series of Bonds;
(f) To evidence any succession to the Issuer and the assumption by its
successor of the covenants, agreements and obligations of the Issuer under this
Indenture, the Agreement and the Bonds;
(g) To permit the exchange of Bonds, at the option of the Holder or Holders
thereof, for coupon Bonds of the same series payable to bearer, in an aggregate
principal amount not exceeding the unmatured and unredeemed principal amount of
the Predecessor Bonds, bearing interest at the same rate or rates and maturing
on the same date or dates, with coupons attached representing all unpaid
interest due or to become due thereon if, in the opinion of Bond Counsel
selected by the Borrower and acceptable to the Trustee, that exchange would not
result in the interest on any of the Bonds outstanding becoming subject to
federal income taxation;
107
(h) To permit the Trustee to comply with any obligations imposed upon it by
law;
(i) To specify further the duties and responsibilities of, and to define
further the relationship between, the Trustee and the Remarketing Agent;
(j) To achieve compliance of this Indenture with any applicable federal
securities or tax law;
(k) To evidence the appointment of a new Remarketing Agent;
(l) To make necessary or advisable amendments or additions in connection
with the issuance of Additional Bonds in accordance with Section 2.09 hereof as
do not adversely affect the Holders of outstanding Bonds;
(m) To permit any other amendment which, in the judgment of the Trustee, is
not to the prejudice of the Trustee or the Holders including, but not limited
to, changes required in order to obtain or maintain a rating on any series of
Bonds from a Rating Service; and
(n) To accept a Supplemental Credit Facility as provided in Section 8.04
hereof.
The Trustee may also accept, without the consent of or notice to any
of the Holders, an Alternate Letter of Credit or any amendments to the Letter of
Credit necessary to continue the effectiveness of the Letter of Credit as
originally intended or which in the judgment of the Trustee are not to the
prejudice of the Holders.
The provisions of Subsections 8.02(h) and (j) hereof shall not be
deemed to constitute a waiver by the Trustee, the Issuer or any Holder of any
right which it may have in the absence of those provisions to contest the
application of any change in law to this Indenture or the Bonds.
Section 8.03. Supplemental Indentures Requiring Consent of Holders.
Exclusive of Supplemental Indentures to which reference is made in Section 8.02
hereof and subject to the terms, provisions and limitations contained in this
Section, and not otherwise, with the consent of the Holders of not less than a
majority in aggregate principal amount of the Bonds at the time outstanding,
evidenced as provided in this Indenture, with the consent of the Borrower and
the Bank, the Issuer and the Trustee may execute and deliver Supplemental
Indentures adding any provisions to, changing in any manner or eliminating any
of the provisions of this Indenture or any Supplemental Indenture or restricting
in any manner the rights of the Holders. Nothing in this Section or Section 8.02
hereof shall permit, or be construed as permitting:
(a) without the consent of the Holder of each Bond so affected and the
Bank, (i) an extension of the maturity of the principal of or the interest on
any Bond, (ii) a reduction in the principal amount of any Bond or the rate of
interest or premium thereon, or (iii) a reduction in the amount or extension of
the time of paying of any mandatory sinking fund requirements, or
108
(b) without the consent of the Holders of all Bonds then
outstanding and the Bank, (i) the creation of a privilege or priority of any
Bond or Bonds over any other Bond or Bonds, or (ii) a reduction in the aggregate
principal amount of the Bonds required for consent to a Supplemental Indenture.
If the Issuer shall request that the Trustee execute and deliver any
Supplemental Indenture for any of the purposes of this Section, upon (i) being
satisfactorily indemnified with respect to its expenses in connection therewith,
and (ii) receipt of the Borrower's and Bank's consent to the proposed execution
and delivery of the Supplemental Indenture, the Trustee shall cause notice of
the proposed execution and delivery of the Supplemental Indenture to be mailed
by first class mail, postage prepaid, to all Holders of Bonds then outstanding
at their addresses as they appear on the Register at the close of business on
the fifteenth day preceding that mailing.
The Trustee shall not be subject to any liability to any Holder by
reason of the Trustee's failure to mail, or the failure of any Holder to
receive, the notice required by this Section. Any failure of that nature shall
not affect the validity of the Supplemental Indenture when there has been
consent thereto as provided in this Section. The notice shall set forth briefly
the nature of the proposed Supplemental Indenture and shall state that copies
thereof are on file at the Operations Office of the Trustee for inspection by
all Holders.
If the Trustee shall receive, within a period prescribed by the Issuer,
of not less than sixty (60) days, but not exceeding one year, following the
mailing of the notice, an instrument or document or instruments or documents, in
form to which the Trustee does not reasonably object, purporting to be executed
by the Holders of at least a majority in aggregate principal amount of the Bonds
then outstanding (which instrument or document or instruments or documents shall
refer to the proposed Supplemental Indenture in the form described in the notice
and specifically shall consent to the Supplemental Indenture in substantially
that form), the Trustee shall, but shall not otherwise, execute and deliver the
Supplemental Indenture in substantially the form to which reference is made in
the notice as being on file with the Trustee, without liability or
responsibility to any Holder, regardless of whether that Holder shall have
consented thereto.
Any consent shall be binding upon the Holder of the Bond giving the
consent and, anything herein to the contrary notwithstanding, upon any
subsequent Holder of that Bond and of any Bond issued in exchange therefor
(regardless of whether the subsequent Holder has notice of the consent to the
Supplemental Indenture). A consent may be revoked in writing, however, by the
Holder who gave the consent or by a subsequent Holder of the Bond by a
revocation of such consent received by the Trustee prior to the execution and
delivery by the Trustee of the Supplemental Indenture. At any time after the
Holders of the required percentage of Bonds shall have filed their consents to
the Supplemental Indenture, the Trustee shall make and file with the Issuer a
written statement that the Holders of the required percentage of Bonds have
filed those consents. That written statement shall be conclusive evidence that
the consents have been so filed.
109
If the Holders of the required percentage in aggregate principal amount
of Bonds outstanding shall have consented to the Supplemental Indenture, as
provided in this Section, no Holder shall have any right (a) to object to (i)
the execution or delivery of the Supplemental Indenture, (ii) any of the terms
and provisions contained therein, or (iii) the operation thereof, (b) to
question the propriety of the execution and delivery thereof, or (c) to enjoin
or restrain the Trustee or the Issuer from that execution or delivery or from
taking any action pursuant to the provisions thereof.
Section 8.04. Acceptance of Supplemental Credit Facility. Upon the
request of the Borrower, the Trustee will accept a Supplemental Credit Facility
presented by the Borrower in order to obtain or maintain a rating on the Bonds,
provided the Trustee is provided with the following:
(a) An opinion of Bond Counsel selected by the Borrower and acceptable to
the Trustee to the effect that acceptance of the proposed Supplemental Credit
Facility will not impair the exemption of interest on the Bonds from Federal
income taxation;
(b) Written evidence reasonably satisfactory to the Trustee, that
upon issuance and delivery of the Supplemental Credit Facility, the Bonds will
be rated by a Rating Agency in one of its three highest rating categories; and
(c) The written consent of the entity which will be the Bank after
the acceptance of such Supplemental Credit Facility.
Notice of the proposed delivery of any Supplemental Credit Facility
shall be given by the Trustee to the Bondholders at least 30 days prior to the
effectiveness of such Supplemental Credit Facility. Such notice shall specify
the issuer of the Supplemental Credit Facility and the proposed effective date.
Upon the effectiveness of the Supplemental Credit Facility, the Trustee shall
mail notice to each Bondholder confirming that the Supplemental Credit Facility
has been delivered and is effective.
Section 8.05. Consent of Borrower. Anything contained herein to the
contrary notwithstanding, a Supplemental Indenture executed and delivered in
accordance with this Article VIII shall not become effective unless and until
the Borrower shall consent in writing to the execution and delivery of that
Supplemental Indenture.
Section 8.06. Authorization to Trustee; Effect of Supplement. The
Trustee is authorized to join with the Issuer in the execution and delivery of
any Supplemental Indenture in accordance with this Article and to make the
further agreements and stipulations which may be contained therein. Thereafter,
(a) that Supplemental Indenture shall form a part of this Indenture;
110
(b) all terms and conditions contained in that Supplemental
Indenture as to any provision authorized to be contained therein shall be deemed
to be a part of the terms and conditions of this Indenture for any and all
purposes;
(c) this Indenture shall be deemed to be modified and amended in
accordance with the Supplemental Indenture; and
(d) the respective rights, duties and obligations under this Indenture of
the Issuer, the Borrower, the Trustee, the Bank, the Remarketing Agent and all
Holders of Bonds then outstanding shall be determined, exercised and enforced
hereunder in a manner which is subject in all respects to those modifications
and amendments made by the Supplemental Indenture.
Express reference to any executed and delivered Supplemental Indenture
may be made in the text of any Bonds issued thereafter, if that reference is
deemed necessary or desirable by the Trustee or the Issuer. A copy of any
Supplemental Indenture for which provision is made in this Article shall be
mailed by the Trustee to the Remarketing Agent. The Trustee shall not be
required to execute any Supplemental Indenture containing provisions adverse to
the Trustee.
Section 8.07. Opinion of Counsel. The Trustee shall be entitled to
receive, and shall be fully protected in relying upon, the opinion of any
counsel approved by it as conclusive evidence that (i) any proposed Supplemental
Indenture complies with the provisions of this Indenture, and (ii) it is proper
for the Trustee to join in the execution of that Supplemental Indenture under
the provisions of this Article. That counsel may be counsel for the Issuer or
the Borrower.
Section 8.08. Modification by Unanimous Consent. Notwithstanding
anything contained elsewhere in this Indenture, the rights and obligations of
the Issuer and of the Holders, and the terms and provisions of the Bonds and
this Indenture or any Supplemental Indenture, may be modified or altered in any
respect with the consent of (i) the Issuer, (ii) the Holders of all of the Bonds
then outstanding, (iii) the Bank, (iv) the Borrower, and (v) if such
modifications or alterations contain provisions adverse to the Trustee, the
Trustee.
(End of Article VIII)
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ARTICLE IX
DEFEASANCE
Section 9.01. Release of Indenture. If (i) the Issuer shall pay all of
the outstanding Bonds, or shall cause them to be paid and discharged, or if
there otherwise shall be paid to the Holders of the outstanding Bonds all Bond
Service Charges due or to become due thereon, and (ii) provision also shall be
made for the payment of all other sums payable hereunder or under the Agreement
and the Notes, then this Indenture shall cease, determine and become null and
void (except for those provisions surviving by reason of Section 9.03 hereof in
the event the Bonds are deemed paid and discharged pursuant to Section 9.02
hereof), and the covenants, agreements and obligations of the Issuer hereunder
shall be released, discharged and satisfied.
Thereupon, and subject to the provisions of Section 9.03 hereof, if
applicable,
(i) the Trustee shall release this Indenture (except for those
provisions surviving by reason of Section 9.03 hereof), and shall
execute and deliver to the Issuer any instruments or documents in
writing as shall be requisite to evidence that release and discharge or
as reasonably may be requested by the Issuer, and
(i) the Trustee shall assign and deliver to the Issuer any
property subject at the time to the lien of this Indenture which then
may be in its possession, except amounts in the Bond Fund required (a)
to be paid to the Bank under Section 5.08 hereof, or (b) to be held by
the Trustee under Section 5.07 hereof or otherwise for the payment of
Bond Service Charges.
Section 9.02. Payment and Discharge of Bonds. All or any part of the
Bonds shall be deemed to have been paid and discharged within the meaning of
this Indenture, including without limitation, Section 9.01 hereof, if:
(a) the Trustee shall have received, in trust for and irrevocably committed
thereto, sufficient moneys which are Eligible Funds or the proceeds of drawings
under the Letter of Credit used to make such payment, or other moneys if
accompanied by an opinion of bankruptcy counsel in a form acceptable to the
Trustee and the Rating Service (if any) for the Bonds, or
(b) the Trustee shall have received, in trust for and irrevocably committed
thereto, noncallable Government Obligations (purchased with Eligible Funds or
the proceeds of drawings under the Letter of Credit, or other moneys if
accompanied by an opinion of bankruptcy counsel in a form acceptable to the
Trustee and the Rating Service (if any) for the Bonds) which are certified by an
independent public accounting firm of national reputation to be of such
maturities or redemption dates and interest payment dates, and to bear such
interest, as will be sufficient together with any moneys to which reference is
made in subparagraph (a) above, without further investment or reinvestment of
either the principal amount thereof or the interest earnings therefrom (which
earnings are to be held likewise in trust and so committed, except as provided
112
herein), for the payment of all Bond Service Charges on those Bonds, on and to
the next Interest Rate Adjustment Date, or prior redemption date, as the case
may be; provided, if any of those Bonds are to be redeemed prior to the maturity
thereof, notice of that redemption shall have been duly given or irrevocable
provision satisfactory to the Trustee shall have been duly made for the giving
of that notice; and further provided that no Bonds, or any part thereof, shall
be deemed to have been paid and discharged within the meaning of this Section
9.02 (i) if the Interest Rate Mode of such Bonds is other than the Fixed
Interest Rate, unless such Bonds are to be redeemed on or prior to the next
Interest Rate Adjustment Date for such Bonds and notice of that redemption shall
have been duly given or irrevocable provision satisfactory to the Trustee shall
have been duly made for the giving of that notice, or (ii) if the Interest Rate
Mode of such Bonds is a Weekly Interest Rate.
Notwithstanding anything herein to the contrary, if any Bonds are then
rated by a Rating Service, no such Bonds shall be deemed to have been paid and
discharged by reason of any deposit pursuant to paragraphs (a) and/or (b) above
(other than any deposit of moneys, or Government Obligations purchased with
moneys, which are the proceeds of drawings under the Letter of Credit) unless
each such Rating Service shall have confirmed in writing to the Trustee that its
rating will not be withdrawn or lowered as the result of any such deposit.
Any moneys held by the Trustee in accordance with the provisions of
this Section may be invested by the Trustee only in noncallable Government
Obligations having maturity dates, or having redemption dates which, at the
option of the Holder of those obligations, shall be not later than the date or
dates at which moneys will be required for the purposes described above. To the
extent that any income or interest earned by, or increment to, the investments
held under this Section is determined from time to time by the Trustee to be in
excess of the amount required to be held by the Trustee for the purposes of this
Section, that income, interest or increment shall be transferred at the time of
that determination in the manner provided in Section 5.08 hereof for transfers
of amounts remaining in the Bond Fund.
If any Bonds shall be deemed paid and discharged pursuant to this
Section 9.02, then within fifteen (15) days after such Bonds are so deemed paid
and discharged the Trustee shall cause a written notice to be given to each
Holder thereof as shown on the Register on the date on which such Bonds are
deemed paid and discharged. Such notice shall state the numbers of the Bonds
deemed paid and discharged or state that all Bonds of a particular series are
deemed paid and discharged, set forth a description of the obligations held
pursuant to subparagraph (b) of the first paragraph of this Section 9.02 and
specify any date or dates on which any of the Bonds are to be called for
redemption pursuant to notice of redemption given or irrevocable provisions made
for such notice pursuant to the first paragraph of this Section 9.02.
Section 9.03. Survival of Certain Provisions. Notwithstanding the
foregoing, any provisions of the Bond Legislation and this Indenture which
relate to the maturity of Bonds, interest payments and dates thereof, optional
and mandatory redemption provisions, credit against mandatory sinking fund
requirements, exchange, transfer and registration of Bonds, replacement of
mutilated, destroyed, lost or stolen Bonds, the safekeeping and cancellation of
Bonds, non-
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presentment of Bonds, the holding of moneys in trust, the Rebate Fund, and
repayments to the Bank from the Bond Fund, and the duties of the Trustee and the
Remarketing Agent, in connection with all of the foregoing, shall remain in
effect and be binding upon the Trustee, the Remarketing Agent and the Holders
notwithstanding the release and discharge of this Indenture. The provisions of
this Article and Section 6.03 hereof shall survive the release, discharge and
satisfaction of this Indenture.
(End of Article IX)
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ARTICLE X
COVENANTS AND AGREEMENTS
OF THE ISSUER
Section 10.1. Covenants and Agreements of the Issuer. In addition to
any other covenants and agreements of the Issuer contained in this Indenture or
the Bond Ordinance, the Issuer further covenants and agrees with the Holders and
the Trustee as follows:
(a) Payment of Bond Service Charges. The Issuer will pay all Bond
Service Charges, or cause them to be paid, solely from the sources provided
herein, on the dates, at the places and in the manner provided in this
Indenture.
(b) Revenues and Assignment of Revenues. The Issuer will not assign the
Revenues or create or authorize to be created any debt, lien or charge thereon,
other than the assignment thereof under this Indenture.
(c) Recordings and Filings. At the direction and expense of the Borrower,
the Issuer will cause this Indenture, and any related instrument or documents
relating to the assignment made by it under this Indenture to secure the Bonds,
to be recorded and filed in the manner and in the places (if any) which may be
required by law in order to preserve and protect fully the security of the
Holders and the rights of the Trustee hereunder.
Not more than once every five (5) years the Trustee may reasonably
request at Borrower's expense an opinion of counsel, addressed to the Issuer and
the Trustee stating that based upon the law in effect on the date of such
opinion no filing, registration or recording and no refiling, reregistration or
rerecording of any agreement or instrument, including any financing statement or
amendments thereto, or any continuation statements or instruments of a similar
character relating to the pledges and assignments made by the Issuer or the
Borrower to secure the Bonds, is required by law, in order to fully preserve and
protect the security of the Trustee and the rights of the Trustee under the
Indenture, or if such filing, registration, recording, refiling, reregistration
or rerecording is necessary, setting forth the requirements in respect thereto.
The Borrower, with such assistance and cooperation from the Issuer as the
Borrower may reasonably request, shall take or cause to be taken all actions
necessary to satisfy any such requirements. Promptly after any filing,
registration, recording, refiling, reregistration or rerecording of any such
agreement or instrument, the Trustee may request at Borrower's expense an
opinion of counsel on behalf of the Issuer and the Trustee to the effect that
such filing, registration, recording, refiling, reregistration or rerecording
has been duly accomplished and setting forth the particulars thereof. The
Trustee shall be reimbursed by the Borrower for the reasonable fees paid in
connection with such opinions of counsel.
(d) Inspection of Books. All books, instruments and documents in the
Issuer's possession relating to the Project and the Revenues shall be open to
inspection and copying (at the expense of the Person making such copies) at all
times during the Issuer's regular business hours by any
115
accountants or other agents of the Trustee, the Borrower or the Bank which the
Trustee, the Borrower or the Bank may designate from time to time.
(e) Register. At reasonable times and under reasonable regulations
established by the Trustee, the Register may be inspected and copied (at the
expense of the Person making such copies) by the Borrower, by the Bank, or by
Holders of twenty-five percent (25%) or more in aggregate principal amount of
the Bonds then outstanding, or a designated representative thereof.
(f) Rights and Enforcement of the Agreement. The Trustee may enforce, in
its name or in the name of the Issuer, all rights for and on behalf of the
Holders, except for Unassigned Issuer's Rights, and may enforce all covenants,
agreements and obligations of the Borrower under and pursuant to the Agreement,
regardless of whether the Issuer is in default in the pursuit or enforcement of
those rights, covenants, agreements or obligations. The Issuer, however, will do
all things and take all actions on its part necessary to comply with covenants,
agreements, obligations, duties and responsibilities on its part to be observed
or performed under the Agreement, and will take all actions within its authority
to keep the Agreement in effect in accordance with the terms thereof.
(g) Federal Tax Exemption. The Issuer covenants that it (i) will take, or
require to be taken, all actions that may be required of the Issuer for the
interest on the Bonds to be and remain excluded from gross income for federal
income tax purposes and (ii) will not take or authorize to be taken any actions
that would adversely affect that exclusion under the provisions of the Code.
Section 10.02. Observance and Performance of Covenants, Agreements,
Authority and Actions. The Issuer will observe and perform faithfully at all
times all covenants, agreements, authority, actions, undertakings, stipulations
and provisions to be observed or performed on its part under the Agreement, the
Indenture, the Bond Ordinance and the Bonds which are executed, authenticated
and delivered under this Indenture, and under all proceedings of the Issuer
pertaining thereto. The Issuer represents and warrants that:
(a) It is duly authorized by te laws of the State, particularly and without
limitation the Act, to issue the Project Bonds, to execute and deliver this
Indenture, the Agreement and the Bond Purchase Agreement and to provide the
security for payment of the Bond Service Charges in the manner and to the extent
set forth in this Indenture.
(b) All actions required on its part to be performed for the issuance, sale
and delivery of the Project Bonds and for the execution and delivery by the
Issuer of this Indenture, the Agreement and the Bond Purchase Agreement have
been or will be taken duly and effectively.
(c) The Project Bonds will be valid and enforceable special limited
obligations of the Issuer according to their terms.
Section 10.03. Payment Solely From Sources Described in Indenture and
Agreement . The Issuer shall not be required to pay any Bond Service Charges or
any other charges, fees or
116
expenses in connection with the Bonds, this Indenture, the Agreement, the Letter
of Credit or the enforcement of any rights and remedies exercised by parties
other than the Issuer under the Bonds, this Indenture, the Agreement or the
Letter of Credit from any funds or sources other than those provided under this
Indenture and the Agreement.
(End of Article X)
117
ARTICLE XI
AMENDMENTS TO THE AGREEMENT,
THE NOTES AND THE LETTER OF CREDIT
Section 11.01. Amendments Not Requiring Consent of Holders. Without the
consent of or notice to the Holders, the Issuer and the Trustee, with the
written consent of the Bank, may consent to any amendment, change or
modification of the Agreement, a Note, or the Letter of Credit as may be
required (i) by the provisions of the Agreement, a Note, the Letter of Credit or
this Indenture, (ii) in connection with the issuance of any Additional Bonds
under this Indenture, (iii) for the purpose of curing any ambiguity,
inconsistency or formal defect or omission in the Agreement, a Note, the Letter
of Credit or the Indenture, (iv) in connection with an amendment or to effect
any purpose for which there could be an amendment of this Indenture pursuant to
Section 8.02 hereof, or (v) in connection with any other change therein which is
not to the prejudice of the Trustee or the Holders of the Bonds, in the judgment
of the Trustee; provided that if the Bonds of any series are then rated by a
Rating Service, no amendment, change or modification of the Letter of Credit
shall be consented to by the Issuer or the Trustee unless such Rating Service
shall have confirmed in writing that such rating will not be reduced or
withdrawn if such amendment, change or modification is made.
Section 11.02. Amendments Requiring Consent of Holders. Except for the
amendments, changes or modifications contemplated by Section 11.01 hereof,
neither the Issuer nor the Trustee shall consent to:
(a) any amendment, change or modification of the Agreement, a Note, or the
Letter of Credit which would change the amount or times as of which Loan
Payments or drawings on the Letter of Credit are required to be paid, without
the giving of notice as provided in this Section of the proposed amendment,
change or modification and receipt of the written consent thereto of the Bank
and the Holders of all of the then outstanding Bonds affected by such amendment,
change or modification, or
(b) any other amendment, change or modification of the Agreement, a Note or
the Letter of Credit without the giving of notice as provided in this Section of
the proposed amendment, change or modification and receipt or the written
consent thereto of the Bank and the Holders of at least a majority in aggregate
principal amount of Bonds then outstanding affected by such amendment, change or
modification.
The consent of such Holders shall be obtained as provided in Section
8.03 hereof with respect to Supplemental Indentures.
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If the Issuer and the Borrower shall request at any time the consent of
the Trustee to any proposed amendment, change or modification of the Agreement,
a Note or the Letter of Credit contemplated in subparagraph (a) or (b), upon
receipt of the written consent of the Bank thereto and upon being indemnified
satisfactorily with respect to expenses, the Trustee shall cause notice of the
proposed amendment, change or modification to be provided in the manner which is
required by Section 8.03 hereof with respect to notice of Supplemental
Indentures. This notice shall set forth briefly the nature of the proposed
amendment, change or modification and shall state that copies of the instrument
or document embodying it are on file at the Operations Office of the Trustee for
inspection by all Holders.
(End of Article XI)
119
ARTICLE XII
MEETINGS OF HOLDERS
Section 12.01. Purposes of Meetings. A meeting of the Holders of Bonds
may be called at any time and from time to time pursuant to the provisions of
this Article XII, to the extent relevant to the Holders of all of the Bonds or
of Bonds of that series, as the case may be, to take any action (i) authorized
to be taken by or on behalf of the Holders of any specified aggregate principal
amount of the Bonds, or of that series, (ii) under any provision of this
Indenture or (iii) authorized or permitted by law.
Section 12.02. Call of Meetings. The Trustee may call at any time a
meeting of Holders pursuant to Section 12.01 hereof to be held at any reasonable
time and place the Trustee shall determine. Notice of such meeting, setting
forth the time, place and generally the subject thereof, shall be mailed by
first class mail, postage prepaid, not fewer than fifteen (15) nor more than
ninety (90) days prior to the date of the meeting to the Holders at their
addresses as they appear on the Register on the fifteenth day preceding such
mailing, which fifteenth day preceding the mailing shall be the record date for
the meeting.
If at any time the Issuer, the Borrower, the Bank or the Holders of at
least twenty-five percent (25%) in aggregate principal amount of the Bonds, or
if applicable, the affected series of Bonds, then outstanding, shall have
requested the Trustee to call a meeting of Holders, by written request setting
forth the purpose of the meeting, and the Trustee shall not have mailed the
notice of the meeting within twenty (20) days after receipt of the request, then
the Issuer, the Borrower, the Bank or the Holders of Bonds in the amount above
specified may determine the time and the place of the meeting and may call the
meeting to take any action authorized in Section 12.01 hereof by mailing notice
thereof as provided above.
Any meetings of Holders of Bonds affected by a particular matter shall
be valid without notice if the Holders of all Bonds, or if applicable, the
affected series of Bonds, then outstanding are present in person or by proxy, or
if notice is waived before or after the meeting by the Holders of all Bonds, or
if applicable, the affected series of Bonds, outstanding who were not so present
at the meeting, and if the Issuer, the Borrower, the Bank and the Trustee are
either present by duly authorized representatives or have waived notice, before
or after the meeting.
Section 12.03. Voting. To be entitled to vote at any meeting of
Holders, a Person shall (a) be a Holder of one or more outstanding Bonds, or if
applicable, of the affected series of Bonds, as of the record date for the
meeting as determined above, or (b) be a person appointed by an instrument or
document in writing as proxy by a person who is a Holder as of the record date
for the meeting, of one or more outstanding Bonds, or, if applicable, of the
affected series of Bonds. Each Holder or proxy shall be entitled to one vote for
each $100,000 principal amount of Bonds held or represented by it.
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The vote upon any resolution submitted to any meeting of Holders shall
be by written ballots on which shall be subscribed the signatures of the Holders
of Bonds or of their representatives by proxy and the identifying number or
numbers of the Bonds held or represented by them.
Section 12.04. Meetings. Notwithstanding any other provision of this
Indenture, the Trustee may make any reasonable regulations which it may deem to
be advisable for meetings of Holders, with regard to:
(a) proof of the holding of Bonds and of the appointment of proxies,
(b) the appointment and duties of inspectors of votes,
(c) recordation of the proceedings of those meetings,
(d) the execution, submission and examination of proxies and other evidence
of the right to vote, and
(e) any other matters concerning the conduct, adjournment or reconvening of
meetings which it may think fit.
The Trustee shall appoint a temporary chair of the meeting by an
instrument or document in writing, unless the meeting shall have been called by
the Issuer, the Borrower, the Bank or by the Holders, as provided in Section
12.02 hereof, in which case the Issuer, the Bank, the Borrower or the Holders
calling the meeting, as the case may be, shall appoint a temporary chair in like
manner. A permanent chair and a permanent secretary of the meeting shall be
elected by vote of the Holders of at least a majority in principal amount of the
Bonds represented at the meeting and entitled to vote.
The only Persons who shall be entitled to be present or to speak at any
meeting of Holders shall be the Persons entitled to vote at the meeting and
their counsel, any representatives of the Trustee and its counsel, any
representatives of the Issuer and its counsel, any representatives of the
Borrower and its counsel, any representatives of the Bank and its counsel and
any representatives of the Remarketing Agent and its counsel.
Section 12.05. Miscellaneous . Nothing contained in this Article XII
shall be deemed or construed to authorize or permit any hindrance or delay in
the exercise of any right or rights conferred upon or reserved to the Trustee or
to the Holders under any of the provisions of this Indenture or of the Bonds by
reason of any call of a meeting of Holders or any right conferred expressly or
impliedly hereunder to make a call.
(End of Article XII)
121
ARTICLE XIII
MISCELLANEOUS
Section 13.01. Limitation of Rights. With the exception of rights
conferred expressly in this Indenture, nothing expressed or mentioned in or to
be implied from this Indenture or the Bonds is intended or shall be construed to
give to any Person other than the parties hereto, the Borrower, the Remarketing
Agent, the Bank and the Holders of the Bonds any legal or equitable right,
remedy, power or claim under or with respect to this Indenture or any covenants,
agreements, conditions and provisions contained herein. This Indenture and all
of those covenants, agreements, conditions and provisions are intended to be,
and are, for the sole and exclusive benefit of the parties hereto, the Borrower,
the Bank, the Remarketing Agent, the Beneficial Owners and the Holders of the
Bonds, as provided herein. Notwithstanding any provisions hereof to the
contrary, the Bank shall not have any rights hereunder, including, without any
limitation, any right to give any direction or to give or withhold consent,
unless (i) the Letter of Credit is in full force and effect and no Event of
Default has occurred and is continuing under paragraphs (g) or (h) of Section
7.01 hereof or (ii) amounts are owed to the Bank for reimbursement of drawings
under the Letter of Credit.
Section 13.02. Severability. In case any section or provision of this
Indenture, or any covenant, agreement, stipulation, obligation, act or action,
or part thereof, made, assumed, entered into or taken under this Indenture, or
any application thereof, is held to be illegal or invalid for any reason, or is
inoperable at any time, that illegality, invalidity or inoperability shall not
affect the remainder thereof or any other section or provision of this Indenture
or any other covenant, agreement stipulation, obligation, act or action, or part
thereof, made, assumed, entered into or taken under this Indenture, all of which
shall be construed and enforced at the time as if the illegal, invalid or
inoperable portion were not contained therein.
Any illegality, invalidity or inoperability shall not affect any legal,
valid or operable section, provision, covenant, agreement, stipulation,
obligation, act, action, part or application, all of which shall be deemed to be
effective, operative, made, assumed, entered into or taken in the manner and to
the full extent permitted by law from time to time.
Section 13.03. Notices. Except as provided in Section 7.02 hereof or
elsewhere herein, it shall be sufficient service or giving of any notice,
request, complaint, demand or other instrument or document, if it is duly mailed
by first class mail or delivered. Notices to the Issuer, the Bank, the Borrower,
the Remarketing Agent and the Trustee shall be addressed as follows:
122
(a) If to the Issuer, at:
City of Elkhart, Indiana
City Hall
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: City Attorney
(b) If to the Borrower, at:
▇▇▇▇▇▇▇ Inns, Inc.
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, #▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ______________
(c) If to the Trustee, at:
Firstar Bank, N.A.
▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Corporate Trust Dept.
(d) If to the Bank, at:
Firstar Bank, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇
(e) If to the Remarketing Agent, at:
Banc One Capital Markets, Inc.
One Bank ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
123
Duplicate copies of each notice, request, complaint, demand or other instrument
or document given hereunder to any of such parties also shall be given to the
others. The foregoing parties may designate, by written notice given hereunder,
any further or different addresses to which any subsequent notice, request,
complaint, demand or other instrument or document shall be sent.
In connection with any notice mailed pursuant to the provisions of this
Indenture, a certificate of the Trustee, the Issuer, the Bank, the Borrower, the
Remarketing Agent or the Holders of the Bonds, whichever or whoever mailed that
notice, that the notice was so mailed shall be conclusive evidence of the proper
mailing of the notice.
Section 13.04. Suspension of Mail. If because of the suspension of
delivery of first class mail, or for any other reason beyond its control, the
Trustee or any other Person shall be unable to mail by the required class of
mail any notice required to be mailed by the provisions of this Indenture, the
Trustee or any other Person shall give such notice in such other manner as in
the judgment of the Trustee or such Person shall most effectively approximate
mailing thereof, and the giving of the notice in that manner for all purposes of
this Indenture shall be deemed to be in compliance with the requirement for the
mailing thereof. Except as otherwise provided herein, the mailing of any notice
shall be deemed complete upon deposit of that notice in the mail and giving of
any notice by any other means of delivery shall be deemed complete upon receipt
of the notice by the delivery service.
Section 13.05. Payments Due on Saturdays, Sundays and Holidays. If any
Interest Payment Date, Bond Purchase Date, Mandatory Bond Purchase Date, date of
maturity of the principal of any Bonds, or date fixed for the redemption of any
Bonds is not a Business Day, then payment of interest, principal and any
redemption premium or any purchase price payment need not be made by the Trustee
on that date, but that payment may be made on the next succeeding Business Day
with the same force and effect as if that payment were made on the Interest
Payment Date, Bond Purchase Date, Mandatory Bond Purchase Date, date of maturity
or date fixed for redemption, and no interest shall accrue for the period after
that date; provided, however, if the Project Bonds bear interest at any of the
Weekly Interest Rate, the One Month Interest Rate or the Three Month Interest
Rate, interest shall accrue from the scheduled date of purchase of Project Bonds
or Beneficial Ownership Interests or from the scheduled date of any maturity or
redemption due date of the Project Bonds until the Business Day on which such
payment is made.
Section 13.06. Instruments of Holders. Any writing, including without
limitation, any consent, request, direction, approval, objection or other
instrument or document, required under this Indenture to be executed by any
Holder may be in any number of concurrent writings of similar tenor and may be
executed by that Holder in person or by an agent or attorney appointed in
writing. Proof of (i) the execution of any writing, including without
limitation, any consent, request, direction, approval, objection or other
instrument or document, (ii) the execution of any writing appointing any agent
or attorney, and (iii) the ownership of Bonds, shall be sufficient for any of
the purposes of this Indenture, if made on the following manner, and if so made,
shall be conclusive in favor of the Trustee with regard to any action taken
thereunder, namely:
124
(a) The fact and date of the execution by any person of any writing may be
proved by the certificate of any officer in any jurisdiction, who has power by
law to take acknowledgments within the jurisdiction, that the person signing the
writing acknowledged that execution before that officer, or by affidavit of any
witness to that execution;
(b) The fact of ownership of Bonds shall be proved by the Register
maintained by the Trustee.
Nothing contained herein shall be construed to limit the Trustee to the
foregoing proof, and the Trustee may accept any other evidence of the matters
stated therein which it deems to be sufficient. Any writing, including without
limitation, any consent, request, direction, approval, objection or other
instrument or document, of the Holder of any Bond shall bind every further
Holder of the same Bond, with respect to anything done or suffered to be done by
the Issuer, the Trustee, the Bank, the Borrower or the Remarketing Agent
pursuant to that writing.
Section 13.07. Priority of this Indenture. The Indenture shall be
superior to any liens which may be placed upon the Revenues or any other funds
or accounts created pursuant to this Indenture.
Section 13.08. Extent of Covenants; No Personal Liability. All
covenants, stipulations, obligations and agreements of the Issuer contained in
this Indenture are and shall be deemed to be covenants, obligations and
agreements of the Issuer to the full extent authorized by the Act and permitted
by the Constitution of the State. No covenant, stipulation, obligation or
agreement of any present or future member, officer, agent or employee of the
Issuer or the Issuing Authority shall be enforceable against such member,
officer, agent or employee of the Issuer or the Issuing Authority in anything
other than that person's official capacity. Neither the members of the Issuing
Authority nor any official of the Issuer executing the Bonds, this Indenture,
the Agreement or any amendment or supplement hereto or thereto shall be liable
personally on the Bonds or subject to any personal liability or accountability
by reason of the issuance or execution hereof or thereof.
No recourse shall be had for the payment of the principal of or premium
or interest on any of the Bonds or for any claim based thereon or upon any
obligation, covenant or agreement in this Indenture contained against any past,
present or future officer, member, employee or agent of the Issuer, or the
Issuing Authority as such, either directly or through the Issuer, under any rule
of law or equity, statute or constitution, or by the enforcement of any
assessment or penalty or otherwise, and all such liability of any such officers,
members, employees or agents as such is hereby expressly waived and released as
a condition of and consideration for the execution of this Indenture and the
issuance of such Bonds.
Section 13.09. Rating Categories. Except as otherwise expressly
provided herein, any reference herein to a rating category established by a
Rating Service shall mean such category without regard to any modification
thereof by the addition of a plus or minus sign or a number indicating relative
standing within such category.
125
Section 13.10. Binding Effect. This Indenture shall inure to the
benefit of and shall be binding upon the Issuer and the Trustee and their
respective successors and assigns, subject, however, to the limitations
contained herein.
Section 13.11. Counterparts. This Indenture may be executed in any
number of counterparts, each of which shall be regarded as an original and all
of which shall constitute but one and the same instrument.
Section 13.12. Governing Law. This Indenture and the Bonds shall be
deemed to be contracts made under the laws of the State and for all purposes
shall be governed by and construed in accordance with the laws of the State.
(End of Article XIII)
126
IN WITNESS WHEREOF, the Issuer and the Trustee, as Trustee, have
executed this Trust Indenture all as of the date first above written.
CITY OF ELKHART, INDIANA
By:
----------------------------------
Mayor
(Seal)
Attest:
--------------------------
Clerk
127
FIRSTAR BANK, N.A., as Trustee
By:
Its:
128
TABLE OF CONTENTS
-----------------
(CONTINUED)
PAGE
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ARTICLE XI AMENDMENTS TO THE AGREEMENT,
THE NOTES AND THE LETTER OF CREDIT 79
Section 11.01. Amendments Not Requiring Consent of Holders 79
Section 11.02. Amendments Requiring Consent of Holders 79
ARTICLE XII MEETINGS OF HOLDERS 81
Section 12.01. Purposes of Meetings 81
Section 12.02. Call of Meetings 81
Section 12.03. Voting 81
Section 12.04. Meetings 82
Section 12.05. Miscellaneous 82
ARTICLE XIII MISCELLANEOUS 83
Section 13.01. Limitation of Rights 83
Section 13.02. Severability 83
Section 13.03. Notices 83
Section 13.04. Suspension of Mail 85
Section 13.05. Payments Due on Saturdays, Sundays and Holidays 85
Section 13.06. Instruments of Holders 85
Section 13.07. Priority of this Indenture 86
Section 13.08. Extent of Covenants; No Personal Liability 86
Section 13.09. Rating Categories 86
Section 13.10. Binding Effect 87
Section 13.11. Counterparts 87
Section 13.12. Governing Law 87
iv
129
ESCROW DEPOSIT AGREEMENT
DATED DECEMBER 22, 1999
BY AND AMONG
▇▇▇▇▇▇▇ INNS, INC.
ATLANTA, GEORGIA
CITY OF ELKHART, INDIANA
ELKHART, INDIANA
BANK ONE TRUST COMPANY, NA
AS ESCROW TRUSTEE
AND
BANK ONE TRUST COMPANY, NA
AS PRIOR TRUSTEE
130
ESCROW DEPOSIT AGREEMENT
This Escrow Deposit Agreement, dated December 22, 1999 (the "Escrow
Deposit Agreement"), by and among ▇▇▇▇▇▇▇ Inns, Inc., a corporation duly
organized and existing under the laws of the State of Georgia (the "Company"),
the City of Elkhart, Indiana (the "Issuer"), Bank One Trust Company, NA,
(successor in interest to The Indiana National Bank) as trustee (the "Prior
Trustee") under a Trust Indenture dated as of December 1, 1986 (the "Prior
Indenture") from the Issuer and Bank One Trust Company, NA, as escrow trustee
(the "Escrow Trustee").
WITNESSETH:
WHEREAS, the Issuer is authorized under Indiana Code 36-7-11.9 and -12,
as amended (collectively, the "Act"), among other things, to issue revenue bonds
and to lend the proceeds therefrom for the purpose of financing and refinancing
the cost of construction and equipping of industrial development projects and
vests the Issuer with powers that may be necessary to enable it to accomplish
such purposes; and
WHEREAS, the Issuer has heretofore executed and delivered the Prior
Indenture for the purpose of providing for the issuance of its Economic
Development Revenue Bonds, Series 1986 (Signature Elkhart Ltd. Project) issued
in the original principal amount of $3,885,000, $3,305,000 of which are now
outstanding (the "Series 1986 Bonds");
WHEREAS, which Series 1986 Bonds maturing after December 1, 1999 (the
"Refunded Bonds") are being refunded by the hereinafter described Series 1999
Bonds and are being defeased by cash; and
WHEREAS, the net proceeds from the issuance and sale of the Series 1986
Bonds were used by the predecessor to the Company to finance or refinance
acquisition, construction and equipping of their existing facilities; and
WHEREAS, the Company has determined that it is in its best interests to
refund the Refunded Bonds in order to achieve a debt service savings; and
WHEREAS, the Issuer is issuing its Adjustable Rate Economic Development
Revenue Refunding Bonds, Series 1999 (▇▇▇▇▇▇▇ Inns, Inc. Project) in the
aggregate principal amount of $3,305,000 (the "Series 1999 Bonds"), under and
pursuant to the terms of a Trust Indenture dated as of December 1, 1999 (the
"Indenture") from the Issuer to Firstar Bank, N.A., as Trustee (the "Trustee");
and
1
131
WHEREAS, the Issuer intends to lend the proceeds of the Series 1999
Bonds pursuant to the provisions of a Loan Agreement dated as of December 1,
1999 (the "Loan Agreement") to the Company to refund the Refunded Bonds; and
WHEREAS, the Company has determined to provide for the payment of the
Refunded Bonds by depositing with the Escrow Trustee the proceeds of the Series
1999 Bonds sufficient to pay, without consideration of the reinvestment thereof,
when due upon redemption of the principal of, interest on and premium, if any,
on the Refunded Bonds as described on Exhibit B;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants hereinafter set forth, the parties hereto agree as follows:
Section 1. Receipt of Documents by Escrow Trustee; Incorporation by Reference.
Receipt of true and correct copies of the Prior Indenture, the Loan Agreement,
Mortgage and Security Agreement dated as of December 1, 1986, between the
Company and the Issuer (the "Prior Loan Agreement"), the Indenture and the Loan
Agreement is hereby acknowledged by the Escrow Trustee, and reference herein to
or citation herein of any provision of said documents shall be deemed to be
incorporated as part hereof in the same manner and with the same effect as if
they were fully set forth herein.
Section 2. Creation of Escrow Fund. There is hereby created and established with
the Escrow Trustee a special and irrevocable trust fund designated the "▇▇▇▇▇▇▇
Inns, Inc. Escrow Fund" (the "Escrow Fund") to be held in the custody of the
Escrow Trustee as a trust fund for the benefit of the holders of the Refunded
Bonds separate and apart from other funds of the Company or the Issuer, if any,
or of the Escrow Trustee. The Escrow Fund will contain the cash and the
Governmental Obligations deposited pursuant to Section 3 hereof, which are,
without consideration of the reinvestment thereof, at least sufficient to pay
when due upon redemption the principal of, premium, if any, on and interest on
the Refunded Bonds as described on Exhibit B.
Section 3. (a) Funding of the Escrow Fund; Purchase of Governmental Obligations.
(a) Concurrently with the execution of this Escrow Deposit Agreement there is
herewith deposited with the Escrow Trustee immediately available moneys in the
amount of $3,350,659.72, $3,305,000 of which is from proceeds of the Series 1999
Bonds (the "Series 1999 Proceeds"), $7,798.10 of which is released from the
Interest Fund under the Prior Indenture, $1,195.27 of which is released from the
Bond Fund under the Prior Indenture, and $36,666.35 of which is released from
the Debt Service Reserve Fund under the Prior Indenture (collectively, the
"Prior Bond Proceeds" and with the cash and Series 1999 Proceeds collectively,
the "Proceeds").
(b) The Escrow Trustee acknowledges receipt of the Proceeds and agrees to
immediately invest $____________ of the Proceeds in the Governmental Obligations
described in Exhibit A and to deposit such Governmental Obligations in the
Escrow Fund. The Escrow Trustee will hold $______ of the Proceeds as cash.
2
132
Section 4. Transfers of Funds; Redemption of Refunded Bonds;
Publication of Notice of Redemption. Simultaneously with the issuance of the
Series 1999 Bonds and the creation of the Escrow Fund, the Company shall direct
the Prior Trustee to transfer certain moneys, investments, or other securities
held by the Prior Trustee under the Prior Indenture for deposit with the Escrow
Trustee. The Issuer and the Company hereby instruct the Escrow Trustee to call
the Refunded Bonds for redemption on January 21, 2000, and send the Notice of
Redemption attached hereto as Exhibit C as required by the Prior Indenture.
Section 5. Irrevocable Trust; Application of Escrow Fund. The deposit
of the moneys and Governmental Obligations in the Escrow Fund shall constitute
an irrevocable deposit of said moneys and Governmental Obligations, which,
together with the interest earned thereon and any increment thereto, shall be
held in trust for the benefit of the holders of the Refunded Bonds and shall be
applied solely to the payment of the principal of, premium, if any, and interest
on the Refunded Bonds as described in Exhibit B, with any excess to be applied
as provided in Section 8 hereof.
Section 6. Acceptance of Trust; Investment Powers; Substituted
Governmental Obligations.
(b) The Escrow Trustee hereby accepts the moneys and Governmental
Obligations deposited in the Escrow Fund pursuant to this Escrow Deposit
Agreement. The Escrow Trustee shall apply the moneys and Governmental
Obligations deposited in the Escrow Fund together with any increment thereto and
interest earned thereon, in accordance with the provisions hereof.
(c) The Escrow Trustee hereby accepts the trusts imposed upon it by this
Escrow Deposit Agreement and agrees to perform these trusts as a corporate
trustee ordinarily would perform such trusts under a corporate indenture. The
Escrow Trustee may execute any of the trusts or powers hereof and perform any of
its duties by or through attorneys, agents, receivers or employees but shall not
be answerable for the conduct of the same if appointed in accordance with the
standard specified above, and shall be entitled to advice of counsel concerning
all matters of trusts hereof and the duties hereunder, and may in all cases pay
such reasonable compensation to all such attorneys, certified public
accountants, agents, receivers and employees as may reasonably be employed in
connection with the trusts hereof. The Escrow Trustee may act upon the opinion
or advice of any attorney (who may be the attorney or attorneys for the
Company). The Escrow Trustee shall not be responsible for any loss or damage
resulting from any action or non-action in good faith in reliance upon such
opinion or advice. To the extent permitted by law, the Company shall defend,
indemnify and hold the Escrow Agent and the holders of the Refunded Bonds
harmless from all claims, demands and actions resulting from or arising out of
any alleged deficiency in the Escrow Fund which is not caused by gross
negligence or willful misconduct of the Escrow Agent. This indemnity shall
survive the termination of this Escrow Agreement.
133
(c) The Escrow Trustee shall have no power or duty to invest any moneys
held hereunder except for the purchase of the Governmental Obligations described
in Exhibit A.
Section 7. Payment of Refunded Bonds. On or before the payment dates
for the Refunded Bonds, the Escrow Trustee shall transfer to the Prior Trustee
funds sufficient to pay interest on, premium, if any, on and principal of the
Refunded Bonds as more specifically described on Exhibit B hereto.
Section 8. Application of Escrow Fund after Payment of Refunded Bonds.
After payment of the principal of, premium, if any, and interest on the Refunded
Bonds as indicated on Exhibit B, all remaining moneys and Governmental
Obligations, if any, together with any increment thereto and interest earned
thereon, in the Escrow Fund, shall be paid over promptly by the Escrow Trustee
to the Company. An amount sufficient to pay, when presented for payment, the
Refunded Bonds which have not been presented for payment when due, including
amounts currently held for such purposes, shall be held by the Prior Trustee
under and pursuant to the requirements of the Prior Indenture.
Section 9. Lien of Holders of Refunded Bonds on Escrow Fund; Obligation
of Issuer. The trusts created hereby shall be irrevocable and the holders of the
Refunded Bonds shall have, and are hereby granted, an express first lien and
security interest and the Escrow Trustee and the holders of the Series 1999
Bonds and all other bonds issued under the Bond Indenture shall have, and are
hereby granted, an express second lien and security interest on all moneys and
Governmental Obligations, including any increment thereto and the interest
earned thereon, in the Escrow Fund until applied in accordance with this Escrow
Deposit Agreement. The Refunded Bonds shall remain an obligation of the Issuer
in accordance with the Prior Indenture but shall only be payable from the Escrow
Fund.
Anything in this Escrow Deposit Agreement to the contrary
notwithstanding, the performance by the Issuer of all duties and obligations
imposed upon it hereby, the exercise by it of all powers granted to it
hereunder, the carrying out of all covenants, agreements and promises made by it
hereunder, and the liability of the Issuer for all warranties and other
covenants hereunder, shall be special and limited obligations of the Issuer,
payable solely from and secured exclusively by the Escrow Fund. Neither this
Escrow Deposit Agreement, nor the obligations of the Issuer hereunder, shall be
in any respect a general obligation of the Issuer, the State of Indiana (the
"State") or any political subdivision thereof, nor shall this Escrow Deposit
Agreement, or the obligations of the Issuer hereunder, be payable in any manner
from revenues raised by taxation. Neither this Escrow Deposit Agreement, nor the
obligations of the Issuer hereunder, shall constitute nor give rise to any
pecuniary liability of the Issuer, the State or any political subdivision
thereof, or a charge against the general credit or taxing powers of the Issuer,
the State or any political subdivision thereof. Neither this Escrow Deposit
Agreement, nor the obligations of the Issuer hereunder, shall constitute an
indebtedness of the Issuer, the State or any political subdivision thereof
within any constitutional or statutory limitation.
134
No recourse shall be had for any claim based on this Escrow Deposit
Agreement against any past, present or future member, officer, agent, servant or
employee of the Issuer, or any incorporator, member, officer, agent, employee,
director or trustee of any successor body, as such, either directly or through
the Issuer or any successor body, under any constitutional provision, stature or
rule of law or by the enforcement of any assessment or penalty or otherwise, all
such liability and all such claims being hereby expressly waived and released as
a condition of, and as consideration for, the execution of this Escrow Deposit
Agreement. Specifically, the members, officers, employees, agents, servants of
the Issuer are not subject to personal liability or accountability by reason of
any act authorized under the Act, including without limitation the execution of
this Escrow Deposit Agreement.
Section 10. Fees of Prior Trustee and Escrow Trustee. In consideration
of the services rendered and to be rendered by the Escrow Trustee and Prior
Trustee under this Escrow Deposit Agreement, the Company will pay to the Escrow
Trustee and Prior Trustee their proper fees and expenses for duties to be
performed hereunder. Neither the Escrow Trustee nor the Prior Trustee shall have
any lien whatsoever upon any of the amounts in the Escrow Fund for the payment
of any further fees and expenses. The Escrow Trustee and the Prior Trustee agree
not to use the amounts in the Escrow Fund for fees and expenses or in any manner
except as expressly set forth in the Escrow Deposit Agreement.
Section 11. Termination of Escrow Deposit Agreement. This Escrow
Deposit Agreement shall terminate when Refunded Bonds have been paid and
discharged in full in accordance with this Escrow Deposit Agreement and the
Prior Indenture, and any remaining moneys and Governmental Obligations together
with any increment thereto and interest earned thereon in the Escrow Fund have
been paid over by the Escrow Trustee to the Company.
Section 12. Tax Covenant. Each of the Company, the Prior Trustee and
the Escrow Trustee covenants and agrees that the proceeds from the sale of the
Series 1999 Bonds, any moneys attributable to the proceeds of the Series 1986
Bonds, amounts received from the investment of the proceeds of the Series 1999
Bonds and the Series 1986 Bonds and any other amounts treated as proceeds of the
Series 1999 Bonds under the provisions of the Internal Revenue Code of 1954, as
amended, and the Internal Revenue Code of 1986, as amended (collectively, the
"Code"), or any of the regulations and rules adopted pursuant thereto shall not
be invested or otherwise used in a manner which would cause the Series 1999
Bonds or the Series 1986 Bonds to be "arbitrage bonds" within the meaning of
Section 148 of the Code and such regulations or rules adopted pursuant to the
Code as may be applicable.
Section 13. Irrevocable Agreements and Amendments. This agreement is
made for the benefit of the Company and the holders from time to time of the
Refunded Bonds and it shall not be revoked, repealed, altered or amended without
the written consent of all such holders, the Prior Trustee, the Escrow Trustee,
the Issuer, and the Company; provided, however, that the Company, the Issuer,
the Prior Trustee and the Escrow Trustee may, without the consent of, or notice
to, such holders amend this Escrow Deposit Agreement or enter into such
agreements
135
supplemental to this Escrow Deposit Agreement, as shall not materially adversely
affect the rights of such holders, for any one or more of the following
purposes:
(i) to cure any ambiguity or formal defect or omission in the
Escrow Deposit Agreement,
(ii) to grant to, or confer upon, the Escrow Trustee or the Prior
Trustee for the benefit of the holders of the Series 1986
Bonds, any additional right, remedies, powers or authority
that may lawfully be granted to or conferred upon, the Escrow
Trustee or the Prior Trustee for the benefit of the holders of
the Refunded Bonds,
(iii) to include under this Escrow Deposit Agreement additional
funds, securities or properties.
Section 14. Severability. If any one or more of the covenants or
agreements provided in this Escrow Deposit Agreement on the part of the parties
to be performed should be determined by a court of competent jurisdiction to be
contrary to law, such covenant or agreement shall be deemed and construed to be
severable from the remaining covenants and agreements herein contained and shall
in no way affect the validity of the remaining provisions of this Escrow Deposit
Agreement.
Section 15. Successor Escrow Trustee. It is understood that the Escrow
Trustee reserves the right to resign as Escrow Trustee at any time by giving
written notice of its resignation, specifying the effective date thereof, to
each other party hereto. Within thirty (30) days after receiving the aforesaid
notice, the other party or parties hereto shall appoint a successor Escrow
Trustee to which the Escrow Trustee may distribute the property then held
hereunder. If a successor Escrow Trustee has not been appointed and has not
accepted such appointment by the end of such thirty (30) day period, the Escrow
Trustee may apply to a court of competent jurisdiction for the appointment of a
successor Escrow Trustee.
Section 16. Counterparts; Headings. This Escrow Deposit Agreement may
be executed in several counterparts, all or any of which shall be regarded for
all purposes as an original and shall constitute and be but one and the same
instrument. For purposes of the Indiana Uniform Commercial Code, however, the
original of this instrument held by the Escrow Trustee shall be deemed and
treated as the only original counterpart hereof. The paragraph headings used in
this instrument are for convenience of reference only.
136
IN WITNESS WHEREOF, the parties hereto have each caused this Escrow
Deposit Agreement to be executed by their duly authorized officers as of the
date first above written.
▇▇▇▇▇▇▇ INNS, INC.
By
ATTEST:
By
▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
By:
ATTEST:
By
138
BANK ONE TRUST COMPANY, NA
as Prior Trustee
By:
ATTEST:
By
BANK ONE TRUST COMPANY, NA
as Escrow Trustee
By:
ATTEST:
By
139
EXHIBIT A
GOVERNMENTAL OBLIGATIONS
Type of Maturity First Interest Par Purchase
Security Date Payment Date Amount Price
------------------------------------------------------------------------------------------
US T-▇▇▇▇ 1/20/00 1/20/00 $3,364,000 $3,350,002.02
140
EXHIBIT B
REFUNDED BONDS PRINCIPAL, INTEREST
AND PREMIUM PAYMENTS
Interest: $ 45,659.72
Principal: 3,305,000.00
Premium: -0-
141
EXHIBIT C
NOTICE OF REDEMPTION
Owners of the $3,305,000 in aggregate principal amount of the City of
Elkhart, Indiana Economic Development Revenue Bonds, Series 1986 (Signature
Elkhart Ltd. Project), dated December 1, 1986, maturing after December 1, 1999
(the "Bonds"), are hereby notified that all such outstanding Bonds will be
redeemed upon presentation at the principal corporate trust office of Bank One
Trust Company, NA, Indianapolis, Indiana, on January 21, 2000, at 100% of face
value, plus accrued interest to January 21, 2000. All such Bonds being redeemed
on January 21, 2000, shall cease to bear interest on January 21, 2000.
Dated this 22nd day of December, 1999.
BANK ONE TRUST COMPANY, NA, as
Trustee
By:
Title:
142
IRREVOCABLE LETTER OF CREDIT
FIRSTAR BANK, N.A.
Global Services Division
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dated: December 22, 1999
Irrevocable Letter of Credit No. _________
Beneficiary:
Applicant:
Firstar Bank, N.A., as Trustee ▇▇▇▇▇▇▇ Inns, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Amount: $3,346,312
Expiration Date: December 31, 2002
Ladies and Gentlemen:
FIRSTAR BANK, N.A. (sometimes hereinafter referred to as the "Bank")
hereby establishes in your favor for the benefit of the Bondholders for the
account of ▇▇▇▇▇▇▇ Inns, Inc. (the "Corporation"), its Irrevocable Letter of
Credit (this "Letter of Credit") in a maximum amount of up to Three Million
Three Hundred Forty-six Thousand Three Hundred Twelve Dollars ($3,346,312) (as
more fully described below) effective immediately and expiring at 4:00 p.m.,
Cincinnati, Ohio time, on December 31, 2002 (the "Expiration Date"), or if the
Expiration Date is not a business day (as hereinafter defined) on the next
succeeding business day, unless terminated earlier in accordance with the
provisions hereof or unless extended by us.
This Letter of Credit is being issued in connection with that certain
Trust Indenture (the "Indenture") between the City of Elkhart, Indiana (the
"Issuer"), and you dated as of the 22nd day of December, 1999, as amended, to
authorize, issue and sell certain Adjustable Rate Economic Development Revenue
Refunding Bonds, Series 1999 (▇▇▇▇▇▇▇ Inns, Inc. Project) (the "Bonds"), in the
aggregate principal amount of $3,305,000, the payment of which is secured by,
among other things, this Letter of Credit. All capitalized terms used but not
defined herein shall have the meanings ascribed thereto in the Indenture.
143
As used in this Letter of Credit, the term "Business Day" shall mean a
day of the year, other than (a) a Saturday, (b) a Sunday, (c) a day on which
banks located in any city in which the principal office of the Trustee or our
principal offices are located are required or authorized by law to remain closed
and (d) a day on which The New York Stock Exchange is closed.
You, as Trustee pursuant to the Indenture, are hereby irrevocably
authorized to draw on us, for the account of the Corporation, in accordance with
the terms and conditions hereof and subject to increases and reductions in
amounts as hereinafter set forth, an aggregate amount not exceeding Three
Million Three Hundred Forty-six Thousand Three Hundred Twelve Dollars
($3,346,312) (the "Stated Amount"), of which (A) an aggregate amount not
exceeding $3,305,000.00 may be drawn upon for payment of the unpaid principal
amount of the Bonds or the portion of the purchase price corresponding to the
principal amount of the Bonds or Beneficial Ownership Interests (as hereinafter
defined), and (B) an aggregate amount not exceeding $41,312.00 may be drawn upon
for payment of up to 45 days accrued interest on the Bonds or the portion of the
purchase price of the Bonds or Beneficial Ownership Interests corresponding to
accrued interest. All drawings under this Letter of Credit will be paid with our
own funds and not with funds of the Corporation, the Issuer or any other person,
and prior to any reimbursement thereof.
Funds under this Letter of Credit are only available to you against
your sight draft(s) drawn on us, substantially in the form of Exhibit 1 hereto,
stating on their face: "Drawn under FIRSTAR BANK, N.A. Letter of Credit No.
_______" and upon your presenting to us one or more of the following written
certificates:
(A) If the drawing is made with respect to the payment of the principal
amount of and accrued interest on the Bonds or Beneficial Ownership Interests
delivered to you for purchase pursuant to Sections 2.04 or 2.05 of the
Indenture, but not for purchases under Sections 2.06 or 2.07 of the Indenture, a
written certificate signed by you in the form of Exhibit 2 attached hereto
appropriately completed;
(B) If the drawing is being made for a payment of interest on the
Bonds, a written certificate signed by you in the form of Exhibit 3 attached
hereto appropriately completed;
(C) If the drawing is being made for the payment of principal of the
Bonds due upon redemption, acceleration or scheduled maturity, a written
certificate signed by you in the form of Exhibit 4 attached hereto appropriately
completed; or
(D) If the drawing is being made with respect to the payment of the
principal amount of and accrued interest on the Bonds or Beneficial Ownership
Interests delivered to you for purchase under Sections 2.06 or 2.07 of the
Indenture, a written certificate signed by you in the form of Exhibit 5 attached
hereto appropriately completed.
Presentation of such draft(s) and certificate(s) shall be made on a
business day at our office located at Firstar Bank, N.A., Global Services
Division, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or any other place
which may be designated by us by written notice delivered to you. If we receive
any of your drafts drawn hereunder at such office, all in strict
144
conformity with the terms and conditions of this Letter of Credit, on or prior
to the termination hereof, we will honor the same and make payment hereunder. If
requested by you, payment may be made by deposit of such funds into a designated
bank account that you maintain. If demand for payment is made by you hereunder
at or prior to 11:00 A.M. (Cincinnati, Ohio time) on a Business Day, and
provided that such demand for payment and the drawing certificate presented in
connection therewith conform in all particulars to the terms and conditions
hereof, payment shall be made to you of the amount demanded, in immediately
available funds, on or prior to 11:00 A.M. (Cincinnati, Ohio time) on the next
succeeding Business Day. If demand for payment is made by you hereunder at or
prior to 10:30 A.M. (Cincinnati, Ohio time) on a Business Day relating to a
certificate in the form of Exhibit 2 or Exhibit 5 attached hereto, and provided
that such demand for payment and the drawing certificate presented in connection
therewith conform in all particulars to the terms and conditions hereof, payment
shall be made to you of the amount demanded, in immediately available funds on
the same Business Day.
Upon receipt from you of a written certificate signed by you in the
form of Exhibit 6 attached hereto appropriately completed, stating that a
payment of principal of the Bonds has been made from funds other than amounts
drawn under this Letter of Credit, in accordance with the terms of the
Indenture, the Stated Amount of this Letter of Credit shall be reduced by the
amount of the reduction set forth in such certificate. Drawings in respect of
payments hereunder honored by us shall not, in the aggregate, exceed the Stated
Amount, as the Stated Amount may have been reinstated by us as set forth below.
Upon payment of a drawing hereunder, the Stated Amount of this Letter of Credit
shall be reduced by the amount of such payment except as follows:
(a) Immediately after we honor your demand under this Letter of
Credit accompanied by a certificate in the form of Exhibit 2
attached hereto, an amount equal to such payment shall be
automatically reinstated to the amount of this Letter of
Credit; and
(b) Five Business Days after we honor your demand under this
Letter of Credit accompanied by a ____________________
certificate in the form of Exhibit 3 hereto, an amount equal
to such payment shall be automatically reinstated to the
amount of this Letter of Credit unless (i) you shall have
received our notice to you by hand delivery, telecopy or
registered mail prior to the end of such five Business Day
period that (x) we have not been reimbursed for such payment
in accordance with the terms of the Reimbursement Agreement
dated as of December 22, 1999 between the Borrower and us (the
"Reimbursement Agreement") or (y) any Other Event of Default
under the Reimbursement Agreement has occurred and is
continuing, and as a consequence thereof there shall be no
such reinstatement, or (ii) the fifth Business Day after such
presentation would be after the expiration date of this Letter
of Credit.
Reductions in the Stated Amount which are the result of payments under
the Letter of Credit honoring a demand accompanied by a certificate in the form
of Exhibit 4 hereto or in the form of Exhibit 5 hereto shall not be reinstated.
145
The Stated Amount shall be reduced upon our receipt of a certificate in
the form of Exhibit 6 hereto and such reduction shall not be subject to
reinstatement.
Only you, as Trustee, or your transferee pursuant to the terms of this
Letter of Credit, may make a drawing under this Letter of Credit. Upon the
payment to you, as Trustee, of the amount specified in a draft drawn hereunder,
we will be fully discharged of our obligation under this Letter of Credit with
respect to such draft and shall not thereafter be obligated to make any further
payments under this Letter of Credit in respect of such draft to you or any
other person who may have made to you or makes to you a demand for payment of
principal of or interest on any Bond. By paying to you an amount demanded in
such draft we make no representation as to the correctness of the amount
demanded in such draft.
This Letter of Credit applies only to the payment of principal of the
Bonds, and up to 45 days' interest accruing on the Bonds on or prior to the
expiration of this Letter of Credit and does not apply to any interest that may
accrue thereon or any principal that may be payable with respect thereto after
such date.
This Letter of Credit shall automatically terminate without any action
or notice and shall be delivered to us for cancellation upon the earliest of:
(i) the honoring of the final drawing not subject to reinstatement available to
be made hereunder; (ii) our receipt of a written certificate signed by your
officer and an officer of the Corporation in the form of Exhibit 7 hereto
appropriately completed, stating that: (a) no Bonds are Outstanding within the
meaning of the Indenture; and (b) such officers are duly authorized to sign such
certificate on behalf of you and the Corporation, respectively; (iii) our
receipt of a written certificate signed by your officer and an authorized
officer of the Corporation in the form of Exhibit 8 hereto appropriately
completed, stating that: (a) an Alternate Letter of Credit (as defined in the
Indenture) has been accepted by the Trustee, and (b) such officers are duly
authorized to sign such certificate on behalf of you and the Corporation; or
(iv) the occurrence of the Expiration Date.
Pursuant to the terms of the Reimbursement, on September 15, 2002 and
thereafter on September 15 of each year, the Expiration Date of this Letter of
Credit may be extended in our sole discretion for an additional period of one
year from the date of expiry then in place, provided that the Corporation has
delivered to us a written request for such extension by no later than December
31 of the year prior to the year in which this Letter of Credit will expire
(assuming an Expiry Date of December 31). Written notice of our decision
regarding the Corporation's request shall be delivered to the Corporation and to
you not later than two (2) months following our receipt of the financial
statements required to be delivered by the Corporation pursuant to Section
8.13(i) of the Reimbursement Agreement. Failure on our part to give notice
within such time period shall be deemed denial of the extension request.
As used herein, "Beneficial Ownership Interest" means the beneficial
right to receive payments and notices with respect to the Bonds which are held
by the Depository (as defined in the Indenture) under a book entry system. As
used herein, "Beneficial Owner" means with respect to the Bonds, a person (as
defined in the Indenture) owning a Beneficial Interest therein, as evidenced to
your satisfaction.
146
This Letter of Credit is subject to the "Uniform Customs and Practice
for Documentary Credits, 1993 Revision, International Chamber of Commerce
Publication No. 500" (the "Uniform Customs"). This Letter of Credit shall be
deemed to be made under the laws of the State of Indiana, and shall, as to
matters not governed by the Uniform Customs, be governed by and construed in
accordance with the laws of the State of Indiana.
Communications with respect to this Letter of Credit shall be in
writing and shall be addressed to us at Global Services Division, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, specifically referring to the number
of this Letter of Credit. We will address all communications with respect to
this Letter of Credit to the Trustee at the address set forth on the front page
hereof or to such other address as the Trustee may direct in writing.
In accordance with Article 48 of the Uniform Customs, this Letter of
Credit is transferable in its entirety to any transferee who has succeeded you
as Trustee under the Indenture. Each letter of credit issued upon any such
transfer may be successively transferred. Transfer of the available balance
under this Letter of Credit to such transferee shall be effected by the
presentation to us of this Letter of Credit accompanied by a certificate
substantially in the form of Exhibit 9 attached hereto and payment of a transfer
fee equal to .25% of the Stated Amount then available for draw. Following such
presentation, and as soon as this original Letter of Credit is returned to us
and we have been paid our customary fee, we shall forthwith transfer the same to
your transferee or, if so requested by your transferee, issue an irrevocable
letter of credit to your transferee with provisions therein consistent with
those of this Letter of Credit.
This Letter of Credit sets forth in full our undertaking and shall not
in any way be modified, amended, amplified or limited by reference to any
document, instrument or agreement referred to herein (including, without
limitation, the Bonds and the Indenture), except only the certificate(s) and the
draft(s) referred to herein; and any such reference shall not be deemed to
incorporate herein by reference any document, instrument or agreement except for
such certificate(s) and such draft(s).
Very truly yours,
FIRSTAR BANK, N.A.
By:
-----------------------------------------
Its:
----------------------------------
By:
-----------------------------------------
Its:
----------------------------------
147
EXHIBIT 1
SIGHT DRAFT
----------------------
Pay on sight to the order of: ________________ U.S. ________________ Dollars
(U.S. $_____).
Charge to account of ▇▇▇▇▇▇▇ Ins, Inc.
Drawn under FIRSTAR BANK, N.A. Letter of Credit No. ________.
TO: FIRSTAR BANK, N.A.
Global Services Division
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
The sum drawn does not exceed the difference between (I) the maximum
aggregate amount to be drawn under the Letter of Credit less (II) the aggregate
amount of all previous drawings made under the Letter of Credit which have not
been reinstated pursuant to the terms thereof.
FIRSTAR BANK, N.A., as Trustee
By:
-----------------------------------------
Its:
-----------------------------------------
By:
-----------------------------------------
Its:
-----------------------------------------
148
EXHIBIT 2
CERTIFICATE FOR DRAWING UNDER
SECTIONS 2.04 OR 2.05 OF INDENTURE
Re: Firstar Bank Irrevocable Letter of Credit No. _____
The undersigned hereby certifies to Firstar Bank, N.A. (the "Bank")
with reference to Irrevocable Letter of Credit No. _____ (the "Letter of
Credit"; the terms "Bonds," "Indenture," "Stated Amount," "Beneficial Owner" and
"Beneficial Ownership Interest" used herein shall have their respective meanings
set forth in the Letter of Credit) that:
1. The undersigned is the Trustee under the Indenture.
2. The undersigned is making this demand for payment under the
Letter of Credit with respect to the payment of the principal
amount of and accrued interest on the Bonds or Beneficial
Ownership Interests delivered to the Trustee for purchase in
accordance with sections 2.04 or 2.05 (but not 2.06 or 2.07)
of the Indenture.
3. The principal amount of Bonds or Beneficial Ownership
Interests which are to be purchased and with respect to the
payment of which the Trustee does not have available amounts
pursuant to section 6.15 of the Indenture, or otherwise, that
are to be applied to such payment prior to moneys demanded
under the Letter of Credit is $____________.
4. The accrued interest on the Bonds or Beneficial Ownership
Interests referred to in paragraph 3 above and with respect to
the payment of which the Trustee does not have available
amounts pursuant to section 6.15 of the Indenture, or
otherwise, that are to be applied to such payment prior to
moneys demanded under the Letter of Credit is $__________.
5. The sum of the amounts set forth in paragraphs 3 and
4 above is $_________ and is the amount of the drawing with
respect to this Certificate.
6. Immediately upon your payment of the amount demanded hereby,
such Bonds or Beneficial Ownership Interests will be held by
us, as your agent and for your benefit as Beneficial Owner,
pending your further instructions to the undersigned.
7. The amount hereby demanded was computed in accordance with the
Indenture and does not exceed the Stated Amount.
149
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Certificate as of this ______ day of ____________, _____.
FIRSTAR BANK, NA,
as Trustee
By:
-----------------------------------------
Its:
--------------------------------------
150
EXHIBIT 3
CERTIFICATE FOR INTEREST DRAWING
Re: Firstar Bank Irrevocable Letter of Credit No. _____
The undersigned hereby certifies to Firstar Bank, N.A. (the "Bank")
with reference to Irrevocable Letter of Credit No. _____ (the "Letter of
Credit"; the terms "Bonds," "Business Day," "Indenture" and "Stated Amount" used
herein shall have their respective meanings set forth in the Letter of Credit)
that,
1. The undersigned is the Trustee under the Indenture.
2. The undersigned is making a demand for payment under the
Letter of credit with respect to the payment of interest on
the Bonds.
3. The amount of interest on the Bonds which is due and payable,
or will be due and payable within two Business Days after the
date hereof, is $__________, and the amount of the drawing
with respect to this Certificate does not exceed such amount.
4. The amount hereby demanded was computed in accordance with the
Indenture and does not exceed the Stated Amount,
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Certificate as of the _______ day of ____________, _____.
FIRSTAR BANK, NA,
as Trustee
By:
-----------------------------------------
Its:
--------------------------------------
151
EXHIBIT 4
CERTIFICATE FOR PRINCIPAL DRAWING UPON
REDEMPTION, ACCELERATION OR SCHEDULED MATURITY
Re: Firstar Bank, N.A. Irrevocable Letter of Credit No. _____
The undersigned hereby certifies to Firstar Bank, N.A. (the "Bank")
with reference to Irrevocable Letter of Credit No. _____ (the "Letter of
Credit"; the terms "Bonds," "Business Day," "Indenture" and "Stated Amount" used
herein shall have their respective meanings set forth in the Letter of Credit)
that:
1. The undersigned is the Trustee under the Indenture.
2. The undersigned is making a demand for payment under the
Letter of Credit with respect to the payment of principal of
the Bonds.
3. The amount of principal of the Bonds which is due and payable,
or will be due and payable within two Business Days after the
date hereof, is $__________, and is the amount of the drawing
with respect to this Certificate.
4. The amount hereby demanded was computed in accordance with the
Indenture and does not exceed the stated Amount.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Certificate as of the _______ day of ____________, _____.
FIRSTAR BANK, NA,
as Trustee
By:
-----------------------------------------
Its:
--------------------------------------
152
EXHIBIT 5
CERTIFICATE FOR DRAWING UNDER SECTIONS 2.06 AND 2.07 OF THE
INDENTURE
Re: Firstar Bank, N.A. Irrevocable Letter of Credit No. _____
The undersigned hereby certifies to Firstar Bank, N.A. (the "Bank")
with reference to Irrevocable Letter of Credit No. _____ (the "Letter of
Credit"; the terms "Bonds," "Indenture," "Stated Amount," "Beneficial Owner" and
"Beneficial Ownership Interest" used herein shall have their respective meanings
set forth in the Letter of Credit) that:
1. The undersigned is the Trustee under the Indenture.
2. The undersigned is making this demand for payment under the
Letter of Credit with respect to the payment of the principal
amount of and accrued interest on the Bonds or Beneficial
ownership interests delivered to the Trustee for purchase in
accordance with sections 2.06 or 2.07 of the Indenture.
3. The principal amount of Bonds or Beneficial Ownership
interests which are to be purchased is $__________.
4. The accrued interest on the Bonds or Beneficial Ownership
Interests referred to in paragraph 3 above is $__________.
5. The sum of the amounts set forth in paragraphs 3 and 4 above
is $__________ and is the amount of the drawing with respect
to this Certificate.
6. Immediately upon your payment of the amount demanded hereby,
such Bonds or Beneficial ownership Interests will be held by
us, as your agent and for your benefit as Beneficial Owner,
pending your further instructions to the undersigned.
7. The amount hereby demanded was computed in accordance with the
Indenture and does not exceed the Stated Amount.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Certificate as of the _______ day of ____________, _____.
FIRSTAR BANK, NA,
as Trustee
By:
-----------------------------------------
Its:
--------------------------------------
153
EXHIBIT 6
CERTIFICATE OF REDUCTION IN STATED AMOUNT
FIRSTAR BANK, N.A.
Global Services Division
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Re: FIRSTAR BANK, N.A. Irrevocable Letter of Credit No. _____
Ladies and Gentlemen:
The undersigned, a duly authorized officer of FIRSTAR BANK, N.A., as
Trustee (the "Trustee"), hereby certifies to FIRSTAR BANK, N.A. (the "Bank")
with reference to FIRSTAR BANK, N.A. irrevocable ________ (the "Letter of
Credit," the capitalized terms defined therein and not defined herein being used
as therein defined) issued by the Bank in favor of the Trustee that:
(1) The Trustee is the Trustee under the Indenture for the holders of
the Bonds.
(2) On the date hereof, a payment or a credit towards payment of
principal on the Bonds in the amount of $_______ has been made from funds other
than amounts drawn under the Letter of Credit in accordance with the terms of
the Indenture.
(3) In accordance with the Letter of Credit, upon your receipt of this
certificate, the Stated Amount of the Letter of Credit is reduced by
$________________, which amount equals the sum of: (i) the amount of principal
so paid, plus (ii) 45 days' interest on such amount of principal. You may adjust
your records accordingly.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
certificate as of the ______ day of ___________________.
FIRSTAR BANK, N.A., as Trustee
By:
-----------------------------------------
Its:
-----------------------------------------
By:
-----------------------------------------
Its:
-----------------------------------------
154
EXHIBIT 7
CERTIFICATE THAT NO BONDS ARE OUTSTANDING
FIRSTAR BANK, N.A.
Global Services Division
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Re: FIRSTAR BANK, N.A.
Irrevocable Letter of Credit No. _____
Ladies and Gentlemen:
The undersigned, a duly authorized officer of FIRSTAR BANK, N.A., as
Trustee (the "Trustee"), and a duly authorized officer of ▇▇▇▇▇▇▇ Inns, Inc.
(the "Corporation"), hereby certify to FIRSTAR BANK, N.A. (the "Bank") with
reference to FIRSTAR BANK, N.A. irrevocable ______ (the "Letter of Credit," the
capitalized terms defined therein and not defined herein being used as therein
defined) issued by the Bank in favor of the Trustee that:
(1) The Trustee is the Trustee under the Indenture for the holders of
the Bonds.
(2) No Bonds are outstanding within the meaning of the Indenture.
(3) The undersigned officers are duly authorized to sign this
certificate on behalf of the Trustee and on behalf of the Corporation,
respectively.
Pursuant to the Indenture, we are delivering herewith the Letter of
Credit for cancellation.
155
IN WITNESS WHEREOF, the Trustee and the Corporation have executed and
delivered this certificate as of the ______ day of ___________________.
FIRSTAR BANK, N.A., as Trustee
By:
-----------------------------------------
Its:
-----------------------------------------
By:
-----------------------------------------
Its:
-----------------------------------------
▇▇▇▇▇▇▇ INNS, INC.
By:
-----------------------------------------
Title:
-------------------------------------
156
EXHIBIT 8
CERTIFICATE OF ACCEPTANCE OF ALTERNATE LETTER OF CREDIT
FIRSTAR BANK, N.A.
Global Services Division
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Re: FIRSTAR BANK, N.A.
Irrevocable Letter of Credit No. _____
Ladies and Gentlemen:
The undersigned, a duly authorized officer of FIRSTAR BANK, N.A., as
Trustee (the "Trustee"), and a duly authorized officer of ▇▇▇▇▇▇▇ Inns, Inc.
(the "Corporation"), hereby certify to FIRSTAR BANK, N.A. (the "Bank") with
reference to FIRSTAR BANK, N.A. irrevocable ________ (the "Letter of Credit,"
the capitalized terms defined therein and not defined herein being used therein
defined) issued by the Bank in favor of the trustee that:
(1) The Trustee is the Trustee under the Indenture for the holders of
the Bonds.
(2) An Alternate Letter of Credit (as defined in the Indenture) has
been accepted by the Trustee.
(3) The date on which such Alternate Letter of Credit becomes the
"Letter of Credit" for all purposes under the Indenture is ______________.
(4) The undersigned officers are duly authorized to sign this
certificate on behalf of the Trustee and on behalf of the Corporation,
respectively.
157
IN WITNESS WHEREOF, the Trustee and Corporation have executed and
delivered this certificate as of the _____ day of _________________.
FIRSTAR BANK, N.A., as Trustee
By:
-----------------------------------------
Its:
-----------------------------------------
By:
Its:
▇▇▇▇▇▇▇ INNS, INC.
By:
-----------------------------------------
Title:
--------------------------------------
158
EXHIBIT 9
CERTIFICATE OF TRANSFER OF
LETTER OF CREDIT TO SUCCESSOR TRUSTEE
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
-------------------------------------
(Name of Transferee)
-------------------------------------
(Address)
as Successor Trustee under the Indenture (as defined in the above-referenced
Letter of Credit) all rights of the undersigned beneficiary to draw under the
above Letter of Credit in its entirety.
By this transfer, all rights of the undersigned beneficiary in such
Letter of Credit are transferred to the transferee and the transferee shall have
the sole rights as beneficiary thereof, including sole rights relating to any
amendments whether increases or extensions or other amendments and whether now
existing or hereafter made. All amendments are to be advised direct to the
transferee without necessity of any consent of or notice to the undersigned
beneficiary.
The original Letter of Credit (and any amendments thereto) is returned
herewith, and we ask you to endorse the transfer on the reverse thereof, and
forward it direct to the transferee with your customary notice of transfer.
SIGNATURE AUTHENTICATED Yours very truly,
FIRSTAR BANK, NA,
as trustee
--------------------------------
(Bank)
By:
-------------------------------- ----------------------------------
(Authorized Signature) Its
-------------------------------
159
REIMBURSEMENT AGREEMENT
BETWEEN
▇▇▇▇▇▇▇ INNS, INC.
AND
FIRSTAR BANK, N.A.
DATE
DECEMBER 22, 1999
160
REIMBURSEMENT AGREEMENT
THIS REIMBURSEMENT AGREEMENT is entered into as of the 22nd day of
December, 1999 by and between ▇▇▇▇▇▇▇ INNS, INC. as borrower (the "Borrower")
and FIRSTAR BANK, N.A., a national banking association (the "Bank").
1. Definitions And Accounting Terms.
1.1 Defined Terms. As used in this Reimbursement
Agreement, the following, terms shall have the meaning set forth respectively
after each:
"Agreement" means this Reimbursement Agreement,
either as originally executed or as it may from time to time be supplemented or
amended.
"ALTA Policy" means the policy of title insurance
covering the Property required pursuant to Section 5.1.1(f) of this Agreement.
"Bond Documents" means all of the instruments and
agreements which may be executed from time to time by the Issuer, the Trustee
and/or the Borrower in connection with the Bonds, including without limitation
the following, as from time to time supplemented or amended:
(i) the Trust Indenture;
(ii) the Bonds;
(iii) the Letter of Representations; and
(iv) the Bond Purchase Agreement.
"Bond Purchase Agreement" means the certain Bond
Purchase Agreement dated the 22nd day of December, 1999 among the Issuer, the
Borrower and the Underwriter, as from time to time supplemented or amended with
the written consent of the Bank.
"Bond Proceeds" means the proceeds from the sale of
the Bonds.
"Bonds" means the Series 1999 Bonds issued pursuant
to and in the form incorporated in the Trust Indenture for the purpose of
refunding and retiring prior bonds.
"Borrower" means ▇▇▇▇▇▇▇ Inns, Inc., a Georgia
corporation.
"Borrower's Representative" means each of one or
more Persons authorized in Writing from time to time by the Borrower, with the
approval of the Bank, to deliver certificates and other documents, instruments
and material to the Bank pursuant to this Agreement.
161
"Business Day" means any day of the year, other than
(a) a Saturday, (b) a Sunday, (c) a day on which commercial banks located in
the cities in which the principal corporate trust office of the Trustee or the
principal offices of the Bank are located are required or authorized by law to
remain closed; or (d) a day on which the New York Stock Exchange is closed.
"Closing Date" means December 22, 1999.
"Default Interest Rate" means a fluctuating rate per
annum (computed on the basis of a year of 360 days but calculated on the actual
number of days outstanding) equal to two percent (2%) per annum in excess of
the Prime Rate.
"Depository" means any securities depository that is
a clearing agency under federal law operating and maintaining, with its
participants or otherwise, a book entry system to record ownership of book
entry interests in the Bonds, and to effect transfers of book entry interests
in Bonds, and includes and means initially The Depository Trust Company (a
limited purpose trust company), New York, New York.
"Event of Default" means each of those events so
designated in Article 10 of this Agreement.
"Financing Statements" means the UCC-1 financing
statements covering the Personal Property in which security interests are
created pursuant to the Letter of Credit Documents required pursuant to Section
4.1(c) of this Agreement, as from time to time supplemented or amended.
"Fiscal Quarter" means any fiscal quarter of the
Fiscal Year of the Borrower.
"Fiscal Year" means the fiscal year of the Borrower.
"Improvements" means the improvements now or
hereafter located on the Property.
"Issuer" means City of Elkhart, Indiana.
"Firstar" means Firstar Bank N.A., a National
Banking Association and issuer of the Letter of Credit.
"Letter of Credit" means the letter of credit to be
issued by the Bank pursuant to this Agreement, either as originally executed or
as it may from time to time be modified, extended, renewed or replaced by
Firstar.
"Letter of Credit Documents" means, collectively,
this Agreement and the Security Documents, as from time to time supplemented or
amended with the written consent of the Bank.
- 2 -
162
"Letter of Representations" means the Letter of
Representations from the Issuer, the Trustee, the Registrar (as defined in the
Trust Indenture) and the Paying Agent (as defined in the Trust Indenture) to
the Depository, as supplemented and amended from time to time.
"Mortgage" means the Mortgage, Assignment of Rents
and Security Agreement dated as of the 22nd day of December, 1999 from the
Borrower in favor of Firstar Bank, N.A.
"Other Loan Documents" shall mean any and all
documents evidencing or securing any indebtedness whatsoever from Borrower to
Firstar, including loans unrelated to the Project or Property described in the
Security Documents.
"Permitted Encumbrances" means exceptions nos.
_____, _____, in Schedule B of that certain commitment for title insurance from
Lawyers Title Insurance Company dated November 16, 1999.
"Person" means and includes an individual,
corporation, partnership, limited liability company, trust, unincorporated
organization or association and a government or any department or agency
thereof.
"Personal Property" means all of the Borrower's
right, title and interest in and to all furnishings, fixtures or equipment now
owned or hereafter acquired, located on, or used in connection with, the
Property; all permits, licenses and approvals necessary to operate the Project;
and all of the Borrower's accounts arising from all the rents, payments for the
use of rooms or facilities, payments for lodging and all other revenues of the
Project, including those now due, past due, or to become due, by virtue of any
lease, license or other agreement for the occupancy or use of all, or any
portion, of the Project.
"Required Account" means the ▇▇▇▇▇▇▇ Inns, Inc.
Account to be established and maintained with the Bank, pursuant to Section
5.1.1(q) and 8.14 hereof.
"Prime Rate" means the per annum interest rate
established by FIRSTAR BANK, N.A. from time to time as such bank's prime rate,
whether or not such rate is publicly announced. The Prime Rate may not be the
lowest interest rate charged by FIRSTAR BANK, N.A. for commercial or other
extensions of credit. Subject to any minimum or maximum rate limitations
specified by applicable law, the Prime Rate will automatically and immediately
change from time to time effective as of the effective date of each such change
in the prime commercial rate of such bank.
"Project" means the Property, the Project Facilities
and the Personal Property, which are owned and operated by the Borrower.
"Property" means the Signature Inn located at
___________ in Elkhart, Indiana , being the land described on Exhibit B
together with all buildings and improvements
- 3 -
163
located thereon, all appurtenant rights and privileges and all personal
property, furniture, fixture and equipment used in connection with the
operation of the Signature Inn, all as more particularly described in the
Mortgage.
"Security Documents" means, collectively, the
Mortgage, Assignment of Rents and Security Agreement, the Assignment of Leases
and Rents, the Financing Statements, the Subordination of Master Lease, and any
other deed of trust, mortgage, security agreement, financing statement,
guaranty or assignment now, heretofore or hereafter executed to secure the
obligations of the Borrower under this Agreement, in each case either as
originally executed or as the same may from time to time be supplemented or
amended with the written consent of the Bank.
"Trustee" means Firstar Bank, N.A. a national
banking association with an office located in Cincinnati, Ohio, and its
successors and assigns, as trustee under the Trust Indenture.
"Trust Indenture" means the Trust Indenture dated as
of the 22nd day of December, 1999, as amended, executed and delivered by the
Issuer and the Trustee, as from time to time supplemented or amended.
1.2 Use of Defined Terms. Any defined term used in the
plural shall refer to all members of the relevant class, and any defined term
used in the singular shall refer to any number of the members of the relevant
class.
1.3 Accounting Terms. All accounting terms not
specifically defined in this Agreement shall be construed in conformity with,
and all financial data required to be submitted by this Agreement shall be
prepared in conformity with GAAP.
1.4 Exhibits. All Exhibits to this Agreement, either as
now existing or as the same may from time to time be supplemented or amended,
are incorporated herein by this reference.
2. Bonds. The Borrower has entered into the Bond Documents in
order to cause the issuance of the Bonds, so that the Bond Proceeds could be
used to refund and retire prior bonds.
3. Letter of Credit. The Borrower has requested the Bank to
issue an irrevocable letter of credit in the form attached hereto as Exhibit
"A" in an aggregate amount not exceeding Three Million Three Hundred Forty Six
Thousand Three Hundred Twelve Dollars ($3,346,312), of which an amount not
exceeding $3,305,000 shall be available to pay the principal amount of the
Bonds, and an amount not exceeding $41,312 shall be available to pay for
interest accrued on the Bonds for up to a maximum of 45 days at the actual
interest rates on the Bonds, all as more particularly provided in the Letter of
Credit. The Bank is willing to issue the Letter of Credit on the terms and
conditions contained in this Agreement and the other Letter of Credit
Documents.
- 4 -
164
4. Letter of Credit Documents.
4.1 Security Documents. In consideration of the Bank's
entry into this Agreement and the other Letter of Credit Documents, and as
security for the prompt payment when due of all sums of principal, purchase
price and interest advanced by the Bank pursuant to the Letter of Credit as
well as for payment of any other sums owing pursuant to this Agreement or any
of the other Letter of Credit Documents, together with any and all extensions,
renewals, modifications and amendments thereof and as security for the
performance and observance of all of the covenants, agreements and conditions
contained in the Letter of Credit, this Agreement and all of the other Letter
of Credit Documents, and as security for Borrower's performance of all
obligations under the Other Loan Documents, the Borrower shall, at its sole
expense, execute and deliver or cause to be executed and delivered to the Bank
and record or cause to be recorded, if appropriate, the following documents,
each of which shall be in such form and content, and executed by such persons
and/or entities, as the Bank shall in its reasonable discretion require:
(a) the Mortgage, Assignment of Rents and Security
Agreement;
(b) the Assignment of Leases and Rents;
(c) the Financing Statements;
(d) Environmental Indemnity Agreement;
(e) Assignment and Subordination of Master Lease
Agreement.
4.2 Other Documents and Actions. The Borrower agrees to
execute, acknowledge and/or deliver or cause to be executed, acknowledged
and/or delivered to the Bank such other instruments, agreements and documents,
and to take such actions, upon request by the Bank, as the Bank may reasonably
require in order to carry out the purposes of this Agreement and the other
Letter of Credit Documents, and the transactions contemplated thereby, to
effect the cross-default and cross collateralization arrangements with respect
to the Other Loan Documents, and to protect and/or further the validity,
priority and/or enforceability of the Security Documents or subject to the
Security Documents and the security interests thereby created, any property,
together with any renewals, additions, substitutions, replacements or
betterments thereto, intended by the terms of this Agreement or the other
Letter of Credit Documents to be covered by the Security Documents.
4.3 Right of Set-Off Against the Borrower; Additional
Collateral.
(a) Upon the occurrence and during the
continuance of any Event of Default hereunder, the Bank is hereby authorized at
any time and from time to time, without prior notice to the Borrower (any such
notice being expressly waived by the Borrower) and to the fullest extent
permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by the Bank to or for the credit or the account
of the Borrower, against any and all of the obligations of the Borrower now or
hereafter existing under this Agreement or the Letter of Credit Documents,
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irrespective of whether or not the Bank shall have made any demand hereunder
and although such obligations may be unmatured.
(b) The Bank agrees promptly to notify the Borrower
after any such set-off and application, provided that the failure to give such
notice shall not affect the validity of such set-off and application. The
rights of the Bank under this Section 4.3 are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which the
Bank may have.
5. Conditions to Issuance, Closing and Post-Closing Conditions.
5.1 Conditions to Issuance. The obligation of the Bank
to issue the Letter of Credit is subject to the following conditions precedent,
unless specifically waived in writing by the Bank:
5.1.1 The Bank shall have received all the following,
each of which shall be in form and substance satisfactory to the Bank:
(a) manually executed counterparts of the
Letter of Credit Documents and the fees and expenses required by Section 6.1 of
this Agreement to be paid on the date of issuance of the Letter of Credit;
(b) all the opinions, certificates, and other
documents specified in, or requested by the Bank pursuant to the Letter of
Credit Documents;
(c) a written opinion of counsel for the
Borrower in form and substance satisfactory to the Bank;
(d) a written opinion of counsel, in form
and substance satisfactory to the Bank, opining as to exclusion of interest on
the Bonds from income for federal income tax purposes and covering such matters
relating to the Bond Documents as may be required by the Bank;
(e) a current survey (or current
certification of an existing survey) of the Property certified to the Bank and
the title insurance company issuing, the ALTA Policy issued by a registered
surveyor in conformity with the Bank's survey requirement standards attached
hereto and locating the buildings on the Property, all access roads, easements
and other encumbrances set forth in the ALTA Policy;
(f) (i) a commitment for a standard ALTA 1970
Form B mortgagee title insurance policy with 1984 revisions, in form and
substance and issued by a title insurance company satisfactory to the Bank, an
insured closing letter from the title insurance company regarding the title
agent, together with satisfactory evidence of reinsurance of a portion of the
title insurance company's obligations under the final policy of title insurance
if required by the Bank in its discretion, naming the Bank as insured in a
policy amount of not less than $3,346,312 reflecting the Borrower's marketable
title in and to the Project, insuring the validity
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and first priority of the Bank's Mortgage or Deed of Trust and containing only
exceptions acceptable to the Bank; and (ii) after closing and recording, a
final policy of title insurance on the ALTA 1970 (Revised 1984) form naming the
Bank as insured, containing no exceptions for filed or unfiled mechanics' or
materialmen's liens, the rights of parties in possession or as to matters of
survey, together with such other endorsements and coverages as may from time to
time be required by the Bank, and insuring the Mortgage as a valid first lien
on the Project, subject only to Permitted Encumbrances, all in conformity to
the Bank's title insurance requirements;
(g) policies or certificates of: (i)
liability insurance with respect to the Project, naming the Bank as an
additional insured, in amounts and with a company or companies satisfactory to
the Bank; and (ii) fire and extended coverage insurance for the Project, in
amounts and issued by a company or companies satisfactory to the Bank and
written or endorsed as to make losses, if any, payable to the Bank, in addition
to the Borrower, as their respective interests may appear, together with
evidence of the obligation of the insurance company or companies not to cancel
such policies without first giving written notice thereof to the Bank at least
30 days in advance of such cancellation, in accordance with the Bank's
insurance requirements and the other insurance requirements set forth in the
Mortgage;
(h) evidence satisfactory to the Bank that
there is satisfactory ingress to and egress from the Property;
(i) evidence satisfactory to the Bank
indicating that no portion of the Property is located in a flood hazard area
designated by the U.S. Department of Housing and Urban Development, receipt of
which by the Bank is hereby acknowledged;
(j) receipt with respect to the Project of:
(i) a current zoning letter from the appropriate governmental authority
indicating the final and unappealable zoning classification of the Project, a
copy of the applicable portion of the zoning code indicating the permitted uses
and restrictions in such zoning classification, and a certificate of the
Borrower or the Borrower's engineer, that the Project is in compliance
therewith; (ii) evidence of the availability of public water, sewer and all
other utilities necessary for the use and operation of the Project and that the
capacities of each such utility are sufficient to adequately service the
Project; and (iii) copies of all governmental approvals required to occupy and
operate the Project;
(k) receipt of (i) an ACSM ▇▇▇▇-▇ "▇▇▇▇▇
▇" environmental report in conformity with the Bank's Phase I environmental
report requirements for the Project addressed to the Bank prepared by a
licensed environmental engineering firm acceptable to the Bank, which report
must indicate to the Bank's satisfaction that the Project is free from
hazardous substance contamination and (ii) such other evidence of compliance of
the Project with applicable federal, state and local environmental laws,
regulations and requirements as the Bank may require, receipt of which by the
Bank is hereby acknowledged;
(l) receipt with respect to the Borrower
of: (i) a current certified copy of its Articles of Incorporation, as amended,
certified by the Secretary of the State of Georgia; (ii) a validity of existing
corporation certificate from the Secretary of the State of
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Georgia; (iii) a copy of its Bylaws, as amended, certified by its Secretary or
Assistant Secretary; and (iv) a certificate of foreign corporation admitted to
do business in Kentucky and Indiana;
(m) receipt of certified copies of the
resolution of the Board of Directors of the Borrower authorizing the execution
and delivery of the Letter of Credit Documents, which resolution shall
designate the names of the officers of the Borrower authorized to execute such
documents;
(n) the financial statements of the Borrower
for the fiscal year ended the 31st day of December, 1998, and for the second
quarter period ended the 30th day of June, 1999, in form and substance
satisfactory to the Bank;
(o) a transcript of the Bond Documents;
(p) an appraisal of the Project with a
minimum fair market value of $____________, which has been reviewed by the Bank
and accepted by the Bank in its discretion;
(q) Borrower must have on deposit with Bank
a sum not less than $500,000, $250,000 of which must be in a non-interest
bearing account (amounts required to be on deposit pursuant to other
Reimbursement Agreements and loan transactions between Bank and Borrower
(including any subsidiary of Borrower) may be included in determining whether
these minimum deposit requirements are met.); and
(r) such additional certificates, documents,
consents or opinions, in form and substance satisfactory to the Bank, as the
Bank may reasonably request.
5.2 Confirmation of Filing. The Bank shall have received
confirmation to its satisfaction that the Letter of Credit Documents have been
duly executed, acknowledged, delivered and recorded or filed, as appropriate.
6. Reimbursement and Other Payments; Extension.
6.1 Reimbursement and Other Payments. The Borrower hereby
agrees to pay to the Bank or as directed by the Bank:
(a) on the date of any Principal Drawing or
Interest Drawing (as such terms are defined in the Letter of Credit), but only
after the Bank has paid the related drawing under the Letter of Credit, a sum
equal to the amount of such Principal Drawing or Interest Drawing plus the sum
of One Hundred Dollars ($100) for each Drawing made on the Letter of Credit;
(b) on demand, all reasonable amounts expended,
advanced or incurred by the Bank to satisfy any obligation of the Borrower
under this Agreement or any other Letter of Credit Document or to enforce the
rights of the Bank under this Agreement or any other Letter of Credit Document
or Bond Document (including without limitation any costs incurred by the Bank
in connection with any insolvency or bankruptcy proceeding affecting the
Borrower
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or any of the Security Documents), which amounts will include all court costs,
reasonable attorneys' fees, fees of auditors and accountants and investigation
expenses reasonably incurred by the Bank in connection with any such matters;
(c) on demand, except as otherwise provided
herein, interest on any and all amounts unpaid by the Borrower to the Bank when
due under this Agreement or any other Letter of Credit Document from the date
such amounts become due until paid in full at the Default Interest Rate;
(d) on demand, any other amounts owing to the
Bank by the Borrower under this Agreement or any of the other Letter of Credit
Documents;
(e) on the date of issuance of the Letter of
Credit: (i) a commitment fee of 1/2 of one percent of the amount available for
draw under the Letter of Credit; (ii) all attorneys' fees and out-of-pocket
expenses incurred by the Bank, Bank counsel, and bond counsel in connection
with the negotiation, preparation and execution of this Agreement, the Letter
of Credit and any and all of the other Letter of Credit Documents and security
documents in connection therewith, and any amendment to the Bond Documents or
consents or waivers hereunder or thereunder; (iii) fees and charges of ▇▇▇▇▇'▇
Investors Service in connection with rating of the Letter of Credit; and (iv)
all fees, charges or taxes for the recording or filing of Security Documents
paid by the Bank and for issuance of a policy of title insurance; and
(f) for each year that the Letter of Credit
remains in effect, the Borrower will pay to the Bank, as compensation to it,
for the one-year period commencing on the date of issuance and each anniversary
thereof (a "Fee Period") an annual fee (the "Annual Fee") equal to one and
25/100 percent (1.25%) of the undrawn amount available to be drawn under the
Letter of Credit on such date (which amount will take into account all
reductions or increases in such undrawn amount through such date and will be
computed on the basis of a year of 360 days but calculated on the actual number
of days the Letter of Credit will be outstanding)(the "Undrawn Amount"),
payable as follows: (i) one and 25/100 of one percent (1.25%) of the Undrawn
Amount payable on each January 1, commencing January 1, 2000. The Bank shall
submit invoices to the Borrower for the fees due under this Section 6.1(f).
6.2 Payments. All payments by the Borrower to the Bank
hereunder shall be made in lawful currency of the United States of America and
in immediately available funds before 2:00 p.m., Louisville, Kentucky time on
the date when such payment is due at the office of the Bank at ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇, or at such
other location as the Bank shall designate to the Borrower from time to time in
writing. Any payment received and accepted by the Bank after such time shall be
considered for all purposes (including the calculation of interest, to the
extent permitted by law) as having been made on the Bank's next following
business day (as defined in the Letter of Credit).
If the date for any payment hereunder falls on a
day that is not a business day, then for all purposes of this Agreement the
same shall be deemed to have fallen on the next following business day, and
such extension of time shall in such case be included in the computation of
payments of interest.
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6.3 Increased Costs Due to Change in Law. If any change
in any law or regulation or in the interpretation thereof by any court or
administrative agency shall either (i) impose, modify or deem applicable to the
Bank any reserve requirement, special deposit requirement or similar
requirement against or in connection with the Letter of Credit issued by the
Bank, or (ii) subject the Bank to any tax, charge, fee, deduction or
withholding of any kind in connection with the Letter of Credit (other than
changes in the rates of income taxation generally applicable to the Bank); or
(iii) impose any condition upon or cause in any manner the addition of any
supplement to or increase of any kind to the capital or cost base of the Bank
for issuing or maintaining the Letter of Credit that results in an increase in
the capital requirement supporting either the Letter of Credit; or (iv) impose
upon, modify, require, make or deem applicable to the Bank any capital
requirement, increases capital requirement or similar requirement, such as
deeming the Letter of Credit to be assets held by the Bank for capital adequacy
calculation or other purposes and the result of the events described in (i),
(ii), (iii) or (iv) shall be to increase the cost in any way to the Bank of
issuing or maintaining the Letter of Credit or to reduce the amount payable by
the Borrower hereunder or to reduce the return on capital, as a consequence of
issuing or maintaining the Letter of Credit, to a level below that which the
Bank could have achieved but for such results, in any case by such amount as
the Bank in its discretion appropriate, then and in such event, (a) the Bank
shall so notify the Borrower, and (b) upon receipt of such notice from the
Bank, the Borrower shall promptly (i) pay to the Bank from time to time as
specified by the Bank additional amounts which shall be sufficient to
compensate the Bank for such increased costs, together with interest on each
such amount for the period from the date of such notice until payment in full
thereof at the Default Interest Rate or (ii) cause the original Letter of
Credit to be delivered to the Bank and cause the Trustee to release Bank from
any and all obligations under the Letter of Credit. The Borrower shall cause
the Bank to be reimbursed for any additional costs for items described in (i)
through (iv) above prior to the time the original Letter of Credit is delivered
to the Bank and a release is obtained from Trustee . The Bank (as the case may
be) shall provide the Borrower with a certificate regarding a claim for costs
under this Section 6.3 and Borrower may have opportunity to review the same. A
certificate setting forth in reasonable detail a claim for increased cost under
this Section 6.3 incurred by the Bank as a result of any such event and
submitted by the Bank to the Borrower, shall be prima facie evidence, absent
manifest error, as to the amount thereof.
6.4 Obligations Absolute. The obligations of the
Borrower under this Agreement shall be absolute, unconditional and irrevocable,
and shall be paid and performed strictly in accordance with the terms of this
Agreement, under all circumstances whatsoever, including, without limitation,
the following circumstances:
(a) any lack of validity or enforceability of
the Letter of Credit, or any of the Letter of Credit Documents or the Bond
Documents or any other agreement or instrument related thereto;
(b) any amendment or waiver of, or any consent to
or departure from, the terms of the Letter of Credit or any of the Letter of
Credit Documents or the Bond Documents or any other agreement or instrument
related thereto;
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(c) the existence of any claim, set-off, defense
or other right which the Borrower may have at any time against the Trustee, any
beneficiary or any transferee of the Letter of Credit (or any Person for whom
the Trustee, any such beneficiary or any such transferee may be acting), the
Bank or any other Person, whether in connection with this Agreement, the Letter
of Credit, any of the other Letter of Credit Documents, the Bonds, the Other
Loan Documents or any other agreement or instrument related thereto, or in
connection with the Project or any unrelated transaction;
(d) any statement, draft or any other document
presented under the Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect, or any statement therein being untrue or
inaccurate in any respect whatsoever (except to the extent acceptance or
reliance upon any such statement, draft or other document is a result of the
Bank's gross negligence or willful misconduct);
(e) the surrender or impairment of any security
for the performance or observance of the terms of this Agreement, any of the
other Letter of Credit Documents or any other agreement related thereto; or
(f) any other circumstance, happening or
omission whatsoever, whether or not similar to any of the foregoing, provided,
that such circumstance, happening or omission is not a result of the Bank's
gross negligence or willful misconduct.
6.5 Termination and Extension of Letter of Credit. The
Letter of Credit shall terminate in accordance with the terms and conditions of
the Letter of Credit; provided, however, that, subject to such terms and
conditions, the Expiration Date, as set forth in the Letter of Credit, may be
extended pursuant to, and otherwise in accordance with, the following terms and
conditions:
(a) On September 15, 2002, and on each successive
September 15 thereafter, if the Extension Request (as hereinafter described)
shall have theretofore been timely delivered by the Borrower to the Bank, the
Expiration Date may be extended for one full year in the sole discretion of the
Bank. If the Expiration Date is so extended, the Trustee shall, not later than
thirty (30) days after the effective date of the extension, surrender the
outstanding Letter of Credit to the Bank and accept, upon such surrender, a
substitute irrevocable letter of credit in the form of Exhibit A to this
Agreement, dated the date of such substitution and having an Expiration Date
which is one year later than the Expiration Date, but otherwise having terms
identical to the surrendered Letter of Credit. In lieu of surrendering the
Letter of Credit and accepting a substitute therefor, the Trustee may accept a
written notice of extension from the Bank notifying the Trustee that the Bank
has extended the Expiration Date for a period of one year.
(b) Not later than December 31, 2001, and,
provided the Borrower has theretofore timely given the Bank the Extension
Request, not later than December 31 in each subsequent year, the Borrower may
request in writing given by the Borrower to the Bank (the "Extension Request")
that the Expiration Date be extended in accordance with paragraph (a) of this
Section 6.5. The Bank agrees to give the Borrower written notice of its
decision regarding
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such request no more than two (2) months after the Bank's receipt of the
financial statements required to be delivered by the Borrower pursuant to
Section 8.14(i) of this Agreement. Provided, however, that notwithstanding the
foregoing, any extension of the Letter of Credit must be in a writing delivered
to the Borrower in order to become effective.
6.6 Reinstatement. In the event of an Interest Drawing,
the Stated Amount shall automatically be reinstated in the amount of the
related Interest Drawing at the close of business on the tenth day following
the date of such drawing unless the Bank shall have delivered to the Trustee a
notice in the form of Exhibit 5 to the Letter of Credit in the event the Bank
has not been reimbursed for such drawing or an Event of Default has occurred
under this Agreement and is continuing.
7. Representations and Warranties by the Borrower. As a
material inducement to the Bank's entry into this Agreement and the
transactions contemplated hereby, the Borrower represents and warrants to the
Bank that:
7.1 Organization of the Borrower. The Borrower (a) is a
corporation duly organized and validly existing in good standing under the laws
of the State of Georgia, (b) has all requisite power and authority to conduct
its business and to own its properties, (c) is duly qualified to do business in
every jurisdiction in which the nature of business conducted by it makes such
qualification necessary or where failure to so qualify would have a material
adverse effect on its business or financial condition or its performance of its
obligations under the Letter of Credit Documents or Bond Documents and (d)
possesses all material regulatory licenses, approvals and professional
accreditations needed to operate its businesses and is in good standing with
respect thereto and no circumstances are known to Borrower to have occurred or
to be pending that could jeopardize the foregoing.
7.2 Execution, Delivery and Performance of Letter of
Credit Documents and Bond Documents.
7.2.1 The Borrower has all requisite power and
authority to execute and deliver, and to perform all of its obligations under,
the Letter of Credit Documents and the Bond Documents to which it is a party.
7.2.2 The execution and delivery by the Borrower
of, and the performance by the Borrower of all of its obligations under, each
Letter of Credit Document and Bond Document to which it is a party have been
duly authorized by all necessary corporate action of the Borrower and do not
and will not:
(a) require any consent or approval not
heretofore obtained of any directors, shareholders or officers of the Borrower;
(b) violate any provision of, or require
any consent not heretofore obtained under the Articles of Incorporation or
Bylaws, as amended, of the Borrower or actions or resolutions of the
shareholders or directors of the Borrower;
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(c) result in or require the creation or
imposition of any mortgage, deed of trust, pledge, lien, security interest,
claim, charge, right of others, or other encumbrance of any nature (other than
as contemplated under the Letter of Credit Documents or the Bond Documents)
upon or with respect to any property or assets now owned or leased or hereafter
acquired by the Borrower;
(d) violate any provision of any law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
presently in effect having applicability to the Borrower; or
(e) result in a breach of or constitute
a default under, or cause or permit the acceleration of any obligation owed
under, any indenture or loan or credit agreement, lease, or other instrument to
which the Borrower or any Guarantor (if any) is a party or by which the
Borrower or any of its property or assets, is bound or affected.
7.2.3 At the time of execution of this Agreement,
the Borrower is not in default in any respect that is materially adverse to the
interests of the holders of the Letter of Credit Documents or the Bond
Documents or that would have any material adverse effect on the financial
condition of the Borrower, or the conduct of the Borrower's business, under any
law, rule, regulation, order, writ, judgment, injunction, decree,
determination, award, indenture, agreement, lease or instrument described in
Section 7.2.2(d) or Section 7.2.2(e), above.
7.2.4 No authorization, consent, approval, order,
license, exemption from, or filing or registration or qualification with, any
court or governmental department, public body, authority, commission, board,
bureau, agency, or instrumentality, not heretofore obtained or which will have
been obtained prior to the issuance of the Letter of Credit is or will be
required to authorize, or is otherwise required in connection with the
following:
(a) the execution and delivery by the Borrower
of, and the performance by the Borrower of all of its obligations under, the
Letter of Credit Documents and the Bond Documents; or
(b) the creation of the liens, security
interests, or other charges or encumbrances described in the Letter of Credit
Documents or the Bond Documents.
7.2.5 Each of the Letter of Credit Documents and
the Bond Documents, when executed and delivered, will constitute the legal,
valid, and binding obligations of the Borrower (to the extent the Borrower is a
party thereto or obligated thereunder), enforceable against the Borrower in
accordance with its terms, except to the extent that its enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
and equitable principles in effect from time to time affecting the rights of
creditors generally as such laws and insolvency, reorganization, or moratorium
relate to the Borrower, and subject to limitations which may be imposed on
equitable remedies.
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7.2.6 The officers of the Borrower executing the
Letter of Credit Documents and the Bond Documents to which it is a party on
behalf of the Borrower are fully authorized to do so.
7.3 Financial Statements. The financial statements of the
Borrower and its Affiliates for its fiscal year ending December 31, 1998, a
copy of which has been delivered to the Bank, fairly present the assets,
liabilities, capital and surplus and statements of income and expense of the
Borrower on a consolidated basis as of the date thereof, all in conformity with
generally accepted accounting principles consistently applied.
7.4 No Material Adverse Change. There has been no
material adverse change in the business or condition, financial or otherwise,
of the Borrower or the Affiliates since the date of the financial statements
described in Section 7.3 above.
7.5 Tax Liability. The Borrower has filed all tax returns
(federal, state and local) required to be filed and has paid all taxes shown
thereon to be due and all property taxes due, including interest and penalties,
if any; provided, however, that the Borrower shall be required to pay and
discharge any such tax so long as the legality thereof shall be promptly and
actively contested in good faith and by appropriate proceedings. The Borrower
and the Affiliates has established and will maintain adequate reserves for tax
liabilities, if any (including any tax liabilities contested pursuant to this
Section 7.5).
7.6 Compliance with Laws. Each of the Borrower and the
Affiliates is and shall remain in compliance in all material respects with all
laws, regulations and requirements applicable to its business, and has obtained
all authorizations, consents, approvals, orders, licenses, exemptions from, and
has accomplished all filings or registrations or qualifications with, any court
or governmental department, public body, authority, commission, board, bureau,
agency or instrumentality, that are necessary for the transaction of its
business.
7.7 Litigation. Except as disclosed on Schedule 7.7 to
this Agreement, there are no material actions, suits, or proceedings pending or
threatened against or affecting the Borrower, or the property or assets of the
Borrower, before any court or governmental department, public body, authority,
commission, board, bureau, agency or instrumentality other than those actions,
suits or proceedings which have already been disclosed to the Bank in writing.
7.8 Statements. Any certificate or written statement or
the most recent projections furnished prior to the issuance of the Letter of
Credit by the Borrower to the Bank or to the Trustee or any other Person in
connection with the negotiation of this Agreement or any of the other Letter of
Credit Documents or the Bond Documents or the transactions contemplated thereby
to the best knowledge of the Borrower after reasonable inquiry does not contain
any untrue statement of a material fact and does not omit any material fact
necessary to make the statements contained herein or therein, in the light of
the circumstances under which it was made, not misleading.
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7.9 Pension Plan Liabilities. No pension plan for the
benefit of the employees of the Borrower or its Affiliates ("Pension Plan") has
been terminated; the Borrower has not incurred any liability to the Pension
Benefit Guaranty Corporation other than for required insurance premiums which
have been paid when due; no Reportable Event described in Section 4043
("Reportable Event") of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") or in the regulations issued thereunder, or other event or
condition which presents a risk of termination of any Pension Plan by the
Pension Benefit Guaranty Corporation has occurred; the Borrower has not
withdrawn from any pension plan prescribed in Section 4001(a)(3) of ERISA, as
amended by the Multiemployer Pension Plan Amendment Act of 1980, as amended
("Multiemployer Plan") in a complete withdrawal or a partial withdrawal; and no
Pension Plan, and no other employee pension benefit plan described in Section 3
of ERISA to which the Borrower is a party, has engaged in a transaction
prohibited under Sections 406 or 407 of ERISA or under Section 4975 of the
Internal Revenue Code of 1986, as amended.
7.10 Environmental Matters. Other than the conditions
disclosed in a certain report dated December 22, 1998, prepared by EMG, Inc., a
copy of which report having been given to the Bank prior to the date hereof,
the Borrower (a) has no actual knowledge of the permanent placement, burial or
disposal of any Hazardous Substances (as hereinafter defined) on any real
property owned, leased, or used by the Borrower including, but not limited to,
the Project (the "Premises"), of any spills, releases, discharges, leaks, or
disposal of Hazardous Substances that have occurred or are presently occurring
on, under, or onto the Premises, or of any spills, releases, discharges, leaks
or disposal of Hazardous Substances that have occurred or are occurring off the
Premises as a result of the Borrower's improvement, operation, or use of the
Premises which would result in non-compliance with any of the Environmental
Laws (as hereinafter defined); (b) is and has been in compliance with all
applicable Environmental Laws; (c) knows of no pending or threatened
environmental civil, criminal or administrative proceedings against the
Borrower relating to Hazardous Substances; (d) knows of no facts or
circumstances that would give rise to any future civil, criminal or
administrative proceeding against the Borrower relating to Hazardous
Substances; and (e) will not permit any of its employees, agents, contractors,
subcontractors, or any other person occupying or present on the Premises to
generate, manufacture, store, dispose or release on, about or under the
Premises any Hazardous Substances which would result in the Premises not
complying with the Environmental Laws.
As used herein, "Hazardous Substances" shall mean
and include petroleum products and byproducts and all hazardous and toxic
substances, wastes, materials, compounds, pollutants and contaminants
(including, without limitation, asbestos, polychlorinated biphenyls, and
petroleum products) which are included under or regulated by the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, 42 U.S.C.
ss.9601, et seq., the Toxic Substances Control Act, as amended, 15 U.S.C.
ss.2601, et seq., the Resource Conservation and Recovery Act, as amended, 42
U.S.C. ss.6901, et seq., the Water Quality Act of 1987, as amended, 33 U.S.C.
ss.1251, et seq., and the Clean Air Act, as amended, 42 U.S.C. ss.7401, et
seq., and any other federal, state or local statute, ordinance, law, code,
rule, regulation or order regulating or imposing liability (including strict
liability) or standards of conduct regarding Hazardous Substances (hereinafter
the "Environmental Laws"), but does not include such substances as are
permanently incorporated into a structure or any part thereof in such a
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way as to preclude their subsequent release into the environment, or the
permanent or temporary storage or disposal of household hazardous substances by
the Borrower, and which are thereby exempt from or do not give rise to any
violation of the Environmental Laws.
The Borrower hereby indemnifies the Bank and
holds the Bank harmless from and against any loss, damage, cost, expense or
liability (including strict liability) directly or indirectly arising out of,
or attributable to, the generation, storage, release, threatened release,
discharge, disposal or presence of Hazardous Substances on, under or about the
Premises (whether by the Borrower, or any employees, agents, contractors or
subcontractors of the Borrower, or any predecessor in title or any third
persons occupying or present on the Premises), or the breach of any of the
representations and warranties regarding the Premises, including, without
limitation: (a) those damages or expenses arising under the Environmental Laws;
(b) the costs of any repair, cleanup or detoxification of the Premises,
including the soil and ground water thereof, and the preparation and
implementation of any closure, remedial or other required plans; (c) damage to
any natural resources; and (d) all reasonable costs and expenses incurred by
the Bank in connection with clauses (a), (b) and (c) including, but not limited
to, reasonable attorneys' fees.
The indemnification provided for herein shall
not apply to any losses, liabilities, damages, injuries, expenses or costs
which: (i) arise from the gross negligence or willful misconduct of the Bank,
or (ii) relate to Hazardous Substances placed or disposed of on the Premises
after the Bank acquires title to the Premises through foreclosure or otherwise.
8. Affirmative Covenants of the Borrower. For so long as any
obligation of the Borrower in connection with the Bond Documents, this
Agreement or any of the other Letter of Credit Documents remains outstanding,
the Borrower, to the extent applicable, shall, unless the Bank otherwise
consents in writing:
8.1 Protection of Lien on the Project. Maintain the lien
created by the Security Documents as a first lien, subject only to Permitted
Encumbrances, upon the Property, the Personal Property, and all revenues, rents
receivables or accounts from the operation of the Property and take such
actions and execute and deliver to the Bank such instruments and documents as
the Bank may reasonably require from time to time in connection therewith.
8.2 Insurance. Insure, or cause to be insured, the
Project in accordance with and comply with the insurance provisions of the
Mortgage.
8.3 Compliance with Property Requirements. Comply with
all conditions, covenants, restrictions, easements, reservations, rights,
rights of way and all applicable laws, ordinances, regulations, use permits,
occupancy permits, building permits and other requirements, including without
limitation those affecting or relating to the Property, or the Borrower's or
the Guarantors' operations thereon.
8.4 Books and Records. Maintain full and complete books
of account and other records reflecting the results of the operations (in
conjunction with any other ventures as well as specifically with respect to the
Project) in accordance with generally accepted accounting
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principles applied on a consistent basis, and provide to the Bank, promptly
after request by the Bank therefor, such financial statements and other
information pertaining to the Borrower and the assets and operations of the
Borrower as the Bank may from time to time request. The Bank and its duly
authorized agents shall have the right to examine and make copies of all of the
books and records of the Borrower at reasonable times and at reasonable
intervals.
8.5 Notice of Litigation. Give notice to the Bank,
within 10 days of learning thereof, of any of the following:
(a) any litigation materially affecting or
relating to the Project;
(b) any dispute between the Borrower or any
Guarantor and any municipal or other governmental authority relating to the
Project, the adverse determination of which might materially affect the
Project; and
(c) any threat or commencement of proceedings
in condemnation or eminent domain relating to the Project.
8.6 Notice of Certain Events. Promptly notify the Bank
if (a) the Borrower learns of the occurrence of any event which constitutes,
or will, with the passage of time or the giving of notice or both, constitute
an Event of Default or a default under this Agreement or any of the other
Letter of Credit Documents or any of the Bond Documents, together with a
detailed statement by the Borrower specifying the nature thereof and what
action the Borrower is taking or proposes to take with respect thereto, or (b)
the Borrower receives any notice from, or the taking of any other action by,
the holder of any promissory note, debenture or other evidence of indebtedness
of the Borrower or of any security (as defined in the Securities Act of 1933,
as amended) of the Borrower with respect to a claimed default, together with a
detailed statement by the Borrower specifying the notice given or other action
taken by such holder and the nature of the claimed default and what action the
Borrower is taking or proposes to take with respect thereto, or (c) the
Borrower learns of the existence of any legal, judicial or regulatory
proceedings affecting the Borrower or any of its properties or assets in which
the amount involved is material and is not covered by insurance or which, if
adversely determined, would cause a material, adverse change in the business,
prospects, profits, properties, assets or condition (financial or otherwise) of
the Borrower, or (d) there shall occur or exist any other event or condition
causing a material adverse change in the business, prospects, profits,
properties, assets or condition (financial or otherwise) of the Borrower.
8.7 Opinions and Notices. Deliver to the Bank,
concurrently with the delivery thereof to the Trustee, a copy of each opinion
of counsel and notice given pursuant to the Bond Documents, addressed to the
Bank.
8.8 Defaults of Others. Use their best efforts to cure
or cause to be cured all defaults of the Trustee under the Bond Documents, if
economically practical and/or required in order to avoid an Event of Default
under the Bonds.
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8.9 Security of Project. Take such measures to prevent
waste and protect the physical security of the Project as the Bank may
reasonably deem advisable.
8.10 ERISA. With respect to the pension plans of the
Borrower, if any: (a) at all times make prompt payment of contributions
required to meet the minimum funding standards set forth in Section 302 through
305 of ERISA with respect to any such plan, (b) promptly, after the filing
thereof, furnish to the Bank copies of each annual report required to be filed
pursuant to Section 103 of ERISA in connection with any such plan for the plan
year, including any certified financial statements or actuarial statements
required pursuant to said Section 103, (c) notify the Bank immediately of any
fact, including, but not limited to, any "Reportable Event," as that term is
defined in Section 4043 of ERISA, arising in connection with the plan which
might constitute grounds for termination thereof by the Pension Benefit
Guaranty Corporation or for the appointment by the appropriate United States
District Court of a trustee to administer the plan, (d) notify the Bank of any
"Prohibited Transaction" as that term is defined in Section 406 of ERISA, (e)
not engage in any such Prohibited Transaction and (f) not terminate any such
plan in a manner which could result in the imposition of a lien on the property
of the Borrower pursuant to Section 4068 of ERISA.
8.11 Payment of Taxes and Claims. Pay before they become
delinquent (a) all taxes, assessments and governmental charges or levies
imposed upon it or its property; and (b) all claims or demands of materialmen,
mechanics, carriers, warehousemen, landlords, bailees and other like persons
which, if unpaid, might result in the creation of a lien or encumbrance upon
its property, provided that items of the foregoing description need not be paid
while being contested in good faith and by appropriate proceedings and provided
further that adequate book reserves have been established with respect thereto
and provided further that the title of the Borrower and the Guarantors to, and
their right to use, their property is not materially adversely affected
thereby.
8.12 Maintenance of Property and Existence. The Borrower
shall (a) maintain its properties in good condition and make all renewals,
replacements, additions, betterments and improvements thereto which are deemed
necessary by the Borrower; (b) maintain, with financially sound and reputable
insurers, insurance with respect to its properties and businesses against such
casualties and contingencies, of such types (including but not limited to fire
and casualty, public liability, products liability, larceny, embezzlement or
other criminal misappropriation insurance) as are commonly maintained by
reasonably prudent operators of similar properties; (c) keep true books of
records and accounts in which full and correct entries will be made of all its
business transactions, and reflect in its financial statements adequate
accruals and appropriations to reserves; (d) do or cause to be done all things
necessary (i) to preserve and keep in full force and effect the existence,
rights and franchises of the Borrower, and (ii) to maintain the status of the
Borrower as a corporation duly organized, validly existing and in good standing
under the laws of the state of its formation; (e) not acquire, incur or assume
directly or indirectly, any material contingent liability in connection with
the release of any toxic or hazardous waste or substance into the environment,
or dispose of, or allow to be disposed of, or otherwise release hazardous or
toxic substances or solid wastes on or into any of the real property of the
Borrower, and (f) not be in material violation of any laws, ordinances, or
governmental rules and regulations or fail to obtain any licenses, permits,
franchises or other
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governmental authorizations necessary to the ownership of their properties or
to the conduct of their businesses, which violation or failure to obtain might
materially and adversely affect the businesses, prospects, profits, properties
or condition (financial or otherwise) of the Borrower.
8.13 Financial Statements of Borrower and Affiliates.
Deliver to the Bank (i) within 120 days after the end of each fiscal year of
the Borrower an audited financial statement of the Borrower, on a consolidated
basis, prepared in accordance with generally accepted accounting principles
consistently applied, containing a balance sheet, statements of income and
surplus, statements of cash flows and reconciliation of capital accounts
certified in form satisfactory to the Bank by independent certified public
accountants acceptable to the Bank, (ii) within 30 days of filing with the
Internal Revenue Service, a copy of the federal income tax return(s) of the
Borrower, and (iii) within 30 days after the end of each quarter, (A) financial
statements of the Borrower in form acceptable to the Bank, including a balance
sheet and statement of income and surplus, certified by the chief financial
officer of the Borrower to be prepared on a consolidated basis in accordance
with GAAP, and (B) a certificate in form acceptable to the Bank, certified by
the chief financial officer of the Borrower, that the Borrower and the
Guarantors are in full compliance with all of the terms and provisions of the
Letter of Credit Documents and the Bond Documents.
8.14 Required Deposits. Borrower shall maintain accounts
on deposit with Bank in an amount not less than $500,000, $250,000 of which
must be in a non-interest bearing account. Amounts deposited pursuant to other
Reimbursement Agreements or other Loan Agreements between Bank and Borrower
dated in December, 1999 may be included in determining whether these minimum
deposit requirements are met.
8.15 Subordination of Operating Leases. The Master Lease
Agreement with respect to the Project with ▇▇▇▇▇▇▇ Hospitality, LLC. must be
subordinated to the lien of the Mortgage under a Subordination Agreement in
form and substance satisfactory to the Bank. All rents, revenues, receivables
and accounts from or attributable to the operation of the Project must be
assigned to Borrower by ▇▇▇▇▇▇▇ Hospitality, LLC. as security for the
performance of ▇▇▇▇▇▇▇ Hospitality, LLC's obligations under the Master lease
Agreement and Borrower must assign its interest in the revenues, rents,
receivables and accounts to Bank to secure Borrower's obligations under the
Letter of Credit Documents and Security Documents.
9. Negative Covenants of the Borrower. For so long as any
obligation of the Borrower in connection with the Bond Documents, this
Agreement or any of the other Letter of Credit Documents remains outstanding,
the Borrower shall not, unless the Bank otherwise consents in writing:
9.1 Liens and Encumbrances.
(a) Negative Pledge of Assets. Cause or permit
or agree or consent to cause or permit in the future (upon the happening of a
contingency or otherwise), any of its property, whether now owned or hereafter
acquired, to be subject to a lien or encumbrance except:
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(i) liens securing taxes, assessments
or governmental charges or levies
or the claims or demands of
materialmen, mechanics, carriers,
warehousemen, landlords and other
like persons provided the payment
thereof is not at the time required
by Section 8.12;
(ii) liens incurred or deposits made in
the ordinary course of business in
connection with workmen's
compensation, unemployment
insurance, social security and
other like laws;
(iii) attachment, judgment and other
similar liens arising in connection
with court proceedings, provided
the execution or other enforcement
of such liens is effectively stayed
and the claims secured thereby are
being actively contested in good
faith and by appropriate
proceedings;
(iv) inchoate liens arising under ERISA
to secure the contingent liability
of the Borrower;
(v) the Permitted Encumbrances; and
(vi) liens, security interests and
mortgages in favor of the Bank
securing Borrowers obligations
under other Reimbursement
Agreements between Borrower and
Bank dated December, 1999.
(b) Negative Pledge with respect to
Subsidiaries and Affiliates. Cause or permit or agree or consent to cause or
permit in the future (upon the happening of a contingency or otherwise), any
pledge of its controlling or ownership interest or any other corporation or
entity over which the Borrower has direct or indirect control.
(c) Other Negative Pledge Agreements. Grant or
agree to provide in the future (upon the happening of a contingency or
otherwise), a "negative pledge" or other covenant or agreement similar to the
agreement contained in this Section 9.1 in favor of any other lender, creditor
or third party.
9.2 Transfers of Project or Bond Document Obligations.
Except as provided in the Mortgage, assign or delegate any of the obligations
of the Borrower under the Bonds, this Agreement or any of the other Letter of
Credit Documents or Bond Documents, or sell, lease, exchange, convey, mortgage,
assign, pledge, encumber or otherwise transfer the Project or any interest
therein except for (a) dispositions of personal property permitted pursuant to
Section 9.6 hereof, (b) the Permitted Encumbrances, (c) leases permitted
pursuant to Section 9.3 hereof, (d) easements, licenses, rights of way or title
restrictions granted pursuant to Section 9.4 hereof, and (e) transfers of
portions of the Property as provided in the Mortgage other than with the
express
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prior written consent of the Bank, which consent may be granted or withheld in
its sole discretion.
9.3 Leases. Enter into any leases or other agreements
pursuant to which any person other than ▇▇▇▇▇▇▇ Hospitality, Inc. is given any
right to occupy any portion of the Project (subject to the requirement for
subordination of the ▇▇▇▇▇▇▇ Hospitality, Inc. leases).
9.4 Easements. Grant, convey or cause to be effective
any easement, license, right of way, or title restriction or limitation
affecting the Property or any portion of the same without the express prior
written consent of the Bank (which consent shall not be unreasonably withheld);
provided, however, that the Borrower may grant routine easements which are
reasonably necessary and required by governmental or quasi-governmental
entities or utility companies for the furnishing of utilities or services to
the Property without the requirement of such consent by the Bank, so long as
such easements shall not materially weaken, diminish or impair the security of
the Mortgage or interfere with the intended use of the Property.
9.5 Amendments to Documents. Enter into or agree to any
amendment, change or modification of, or any waiver of any provision of, or
grant any consent in respect of, the Trust Indenture, the Bonds or any other
Letter of Credit Document or Bond Document.
9.6 Removal of Personal Property. Remove or permit the
removal from the Property of any items of Personal Property other than in
accordance with the provisions of the Mortgage. Borrower may transfer title to
Personal Property, subject to the security interest of the Bank, to Borrower's
affiliate who is the lessee of the Property if necessary to comply with
regulations applicable to the ownership of personal property by real estate
investment trusts. The Borrower shall keep detailed records of each such
removal, substitution, sale or other disposition and make such records
available to the Bank upon its request from time to time, and shall execute and
deliver to the Bank such instruments and documents as the Bank may require in
connection with the attachment and perfection of the security interest of the
Bank in and to any new or replacement items of Personal Property.
9.7 Sale of Assets, Merger, Subsidiaries and Tradenames
of the Borrower. Except in the ordinary course of business, sell, lease,
transfer or otherwise dispose of, any of its assets, provided that the
foregoing restriction does not apply to the sale of assets for a cash
consideration to one or more persons if the value of all assets so sold in one
twelve-month period (with the assets being valued at the greater of net book or
fair market value) does not exceed $500,000. The Borrower shall not, without
the prior written consent of the Bank, consolidate with or merge into any other
entity, or permit any other entity to consolidate with or merge into it. The
Borrower shall not create or acquire any subsidiaries or conduct business under
any tradename without the prior written consent of the Bank, which consent
shall not be unreasonably withheld.
9.8 Other Borrowings and Contingent Liabilities. Borrow
money secured by the Project or guarantee, endorse, or otherwise become surety
for or upon the obligations of others, except by endorsement of negotiable
instruments for deposit or collection in the ordinary course of business.
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9.9 Ownership and Management. Cause, permit, suffer or
sustain a change in control or a material change in the management or ownership
of the Borrower without the prior written consent of the Bank. A "material
change in management" shall be deemed to occur upon the resignation or
termination of a majority of Borrower's Board of Directors within any rolling
twelve-month period.
10. Events of Default and Remedies Upon Default.
10.1 Events of Default. The occurrence of any one or more
of the following whatever the reason therefor, shall constitute an Event of
Default hereunder:
(a) The Borrower shall fail to pay any amount
of principal, interest or any other sum owing under the Bonds, the Project
Note, the Trust Indenture, this Agreement or any other Letter of Credit
Document on the due date thereof or within any grace period specifically
provided for in the applicable document; or
(b) The Borrower shall fail to perform or
observe any other term, covenant or agreement contained in this Agreement or in
any other Letter of Credit Document on its part to be performed or observed and
such failure shall continue for a period of thirty (30) days after written
notice of such failure by the Bank to the Borrower, as applicable; or
(c) The Borrower shall fail to perform or
observe any term, covenant or agreement contained in (i) Section 8.2 or 8.3 of
this Agreement and such failure shall continue for a period of thirty (30)
days, or (ii) in the Mortgage; or
(d) The occurrence of an Event of Default (as
that term is defined in the Trust Indenture) under the Trust Indenture or the
occurrence of an event of default under the terms of any other Bond Document or
any Letter of Credit Document, or the obligation to make payment on the Bonds
is accelerated for any reason; or
(e) The Borrower shall fail to perform or
observe any term, covenant or agreement contained in any of the Bond Documents
on its part to be performed or observed and the continuance thereof through the
expiration of any applicable grace period provided in the Bond Documents; or
(f) Any covenant, representation or warranty in
any of the Letter of Credit Documents or Bond Documents or in any certificate,
agreement, instrument or other document made or delivered pursuant to or in
connection with any of the Letter of Credit Documents or Bond Documents proves
to have been incorrect in any material respect when made; or
(g) Final judgment for the payment of money to
any Person other than the Bank shall be rendered against the Borrower and not
covered by any insurance policy in place, in excess of $250,000, net of any
reimbursement to which the Borrower may be entitled,
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and the same shall remain undischarged for a period of thirty (30) consecutive
days during which execution shall not be effectively stayed; or
(h) The Borrower shall fail to pay any
indebtedness owing to any Person other than the Bank totaling in the aggregate
in excess of $250,000 for borrowed money owing by the Borrower, or any interest
or premium thereon, beyond any applicable period of grace after such
indebtedness, interest or premium is due, whether such indebtedness shall
become due by scheduled maturity, by required prepayment, by acceleration, by
demand or otherwise (provided, however, that the Borrower may contest in good
faith and by appropriate proceedings any disputed indebtedness, so long as the
Borrower has notified the Bank of such dispute and contest and provided further
that adequate book reserves have been established with respect thereto and
provided further that the Borrower's title to, and its right to use, its
property is not materially adversely affected thereby), or the Borrower shall
fail to perform beyond any period of grace with respect thereto any term,
covenant or agreement on their part to be performed under any agreement or
instrument evidencing or securing or relating to such indebtedness owing by the
Borrower or any Guarantor, when required to be performed, if, in each case, the
effect of such failure is to accelerate, or to permit the holder or holders of
such indebtedness or the trustee or trustees under any such agreement or
instrument to accelerate, the maturity of such indebtedness, unless such
failure to perform shall be waived in writing, by the holder or holders of such
indebtedness or such trustee or trustees; or
(i) The Borrower shall (i) apply for or consent
to the appointment of a receiver, trustee, liquidator or custodian, (ii) admit
in writing its inability to pay its debts generally as they become due, (iii)
make a general assignment for the benefit of creditors, (iv) be adjudicated
bankrupt or insolvent, (v) commence a voluntary case under the federal
bankruptcy laws of the United States of America or file a voluntary petition or
answer seeking reorganization, an arrangement with creditors or an order for
relief or seek to take advantage of any insolvency law or file an answer
admitting the material allegations of a petition filed against the Borrower in
any bankruptcy, reorganization or insolvency proceeding; or action shall be
taken by the Borrower for the purpose of effecting any of the foregoing, or
(vi) if without the application, approval or consent of the Borrower, a
proceeding shall be instituted in any court of competent jurisdiction, under
any law relating to bankruptcy, insolvency, reorganization, dissolution,
winding up, liquidation, a composition or arrangement with creditors, a
readjustment of debts, the appointment of a trustee, receiver, liquidator or
custodian or the like of the Borrower, or of all or any substantial part of the
assets of the Borrower, or other like relief in respect thereof under any
bankruptcy or insolvency law, and, if such proceeding is being contested by the
Borrower in good faith, the same shall (A) result in the entry of an order for
relief or any such adjudication or appointment or (B) continue undismissed,
pending and unstayed, for any period of 60 consecutive days; or
(j) The Project suffers a loss by fire or other
casualty and Borrower does not comply with all the terms and provisions of
Sections 1.3 and 1.5 of the Mortgage regarding insurance, restoration or
repair, and deposit of the excess of the cost of restoration over the available
insurance proceeds.
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(k) The Project, or any material portion
thereof, is subject to a condemnation proceeding and such proceeding would give
Bank the option to accelerate the Indebtedness (as defined in the Mortgage)
under the terms of Section 1.4 of the Mortgage; or
(l) The Borrower defaults under the terms and
provisions of any other obligation owed to the Bank by the Borrower pursuant to
reimbursement agreements entered into in connection with the issuance of
letters of credit to provide credit enhancement for refunding bonds issued by
the Cities of Terra Haute, IN, Florence, KY or Jefferson County, KY or the
occurrence of a default under any mortgage, security agreement, assignment or
document or instrument evidencing or securing such obligation and the
continuance thereof through the expiration of any applicable grace period
provided in such document or instrument, or a default by Borrower under any
note evidencing or creating any indebtedness secured by mortgages encumbering
Signature Inns owned by the Borrower or its affiliates in South Bend, IN,
Muncie, IN, Kokomo, IN or Evansville, IN or defaults in any mortgage, security
agreement, assignment of leases and rents or assignment and subordination of
master lease entered into in connection with said notes; or
10.2 Remedies Upon Default. Upon the occurrence of any
Event of Default, the Bank may, at its option, do any or all of the following:
(a) Declare the principal of all amounts owing
under this Agreement and the other Letter of Credit Documents (including all
obligations secured by the Security Documents) and all other indebtedness of
the Borrower to the Bank, together with interest thereon, to be forthwith due
and payable, regardless of any other specified maturity or due date, without
notice of default, presentment or demand for payment, protest or notice of
nonpayment or dishonor, or other notices or demands of any kind or character
other than notice of Bank's exercise of the rights and remedies described in
this Section 10.2, and without the necessity of prior recourse to any security;
(b) Implement any remedies available to the
Bank under or in connection with the Bond Documents, including without
limitation instructing the Trustee, in the Bank's sole discretion, to
accelerate the maturity of or issue a notice of mandatory tender of the Bonds
and causing and paying a full or partial drawing under the Letter of Credit
(whether or not any amounts have previously been paid under the Letter of
Credit) and exercising all of the rights and remedies available to the Bank in
connection therewith;
(c) If the Event of Default may be cured by the
Bank by taking actions or making payments of money, the Bank shall have the
right (but not the obligation) to take such actions (including without
limitation the retention of attorneys and the commencement or prosecution of
actions on its own behalf or on behalf of the Borrower), make such payments and
pay for the costs of such actions (including without limitation attorneys' fees
and court costs) from its own funds; provided, that the taking of such actions
at the Bank's expense or the making of such payments by the Bank out of the
Bank's own funds shall not be deemed to cure such Event of Default, and the
same shall not be so cured unless and until the Borrower shall have reimbursed
the Bank for such payment, together with interest at the Default Interest Rate
from the date of such payment until the date of reimbursement. If the Bank
advances its own funds for
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such purposes, such funds shall be secured by the Security Documents,
notwithstanding that such advances may cause the total amount advanced
hereunder to exceed the amount committed to be advanced pursuant to this
Agreement, and the Borrower shall immediately upon demand reimburse the Bank
therefore with interest at the Default Interest Rate from the date of such
advance until the date of reimbursement; and
(d) Exercise any and all of its rights under
the Letter of Credit Documents or the Bond Documents, or otherwise as a secured
creditor, including, without limitation, foreclosing on any security, and
exercising any other rights with respect to security whether under the Security
Documents or any other agreement or as provided by law, all in such order and
in such manner as the Bank in its sole discretion may determine.
10.3 Cumulative Remedies; No Waiver. All remedies of the
Bank provided for herein are cumulative and shall be in addition to any and all
other rights and remedies provided in the Letter of Credit, the Security
Documents, the Bond Documents or any of the Letter of Credit Documents, or
provided by law from time to time. The exercise of any right or remedy by the
Bank hereunder shall not in any way constitute a cure or waiver of default
hereunder or under the Letter of Credit, the Security Documents, the Bond
Documents, or any of the Letter of Credit Documents, nor invalidate any notice
of default or any act done pursuant to any such notice, nor prejudice the Bank
in the exercise of any rights hereunder or under the Letter of Credit, the
Security Documents, the Bond Documents or the Letter of Credit Documents,
unless in the exercise of said right, the Bank realizes all amounts owed to it
under the Letter of Credit, this Agreement, the Security Documents, the Bond
Documents and the Letter of Credit Documents and all Events of Default are
cured. No waiver by the Bank of any default or breach by the Borrower hereunder
shall be implied from any omission by the Bank to take action on account of
such default if such default persists or is other than the default expressly
made the subject of the waiver. Any such express waiver shall be operative only
for the time and to the extent therein stated. Any waiver of any covenant, term
or condition contained herein shall not be construed as a waiver of any
subsequent breach of the same covenant, term or condition. The consent or
approval by the Bank to or of any act by the Borrower shall not be deemed to
waive or render unnecessary consent or approval to or of any subsequent act.
11. Miscellaneous.
11.1 Actions. The Bank shall have the right to commence,
appear in and defend any action or proceeding affecting the rights or duties of
the Borrower hereunder, or the payment of any funds, and in connection
therewith the Bank may pay necessary expenses, employ counsel and pay
reasonable attorneys' fees. The Borrower agrees to pay to the Bank, on demand,
all costs and expenses incurred by the Bank in connection therewith, including
without limitation reasonable attorneys' fees, together with interest from the
date of demand at the Default Interest Rate. The Borrower's obligation to repay
such expenses shall be secured by the Security Documents.
11.2 Nonliability of the Bank. The Borrower acknowledges
and agrees that:
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(a) The Bank shall not be responsible or liable
to the Borrower for the use which may be made of the Letter of Credit or for
any acts or omissions of the Trustee and any beneficiary or transferee in
connection therewith;
(b) The Bank shall not be responsible or liable
to the Borrower for the validity, sufficiency or genuineness of documents
(except as to the Bank's signatures thereon), or of any endorsements thereon,
even if such documents should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent, or forged (except to the extent
acceptance or reliance upon such documents is a result of the Bank's gross
negligence or willful misconduct); and
(c) The Bank shall not be responsible or liable
to the Borrower as a result of any circumstances in any way related to the
making or failure to make payment under the Letter of Credit, other than as a
result of the gross negligence or willful misconduct of the Bank.
11.3 No Representations by the Bank. By accepting or
approving anything required to be observed, performed or fulfilled, or to be
given to the Bank pursuant to this Agreement or any of the other Letter of
Credit Documents or Bond Documents, including any certificate, statement of
profit and loss or other financial statement, survey, appraisal or insurance
policy, the Bank shall not be deemed to have warranted or represented the
sufficiency, legality, effectiveness or legal effect of the same, or of any
term, provision or condition thereof, and such acceptance or approval thereof
shall not be or constitute any warranty or representation to anyone with
respect thereto by the Bank. The Bank may accept documents in connection with
the Letter of Credit or any of the other Letter of Credit Documents or Bond
Documents which appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary.
11.4 No Third Parties Benefited. This Agreement is made
for the purpose of defining and setting forth certain obligations, rights and
duties of the Borrower and the Bank in connection with the Letter of Credit. It
is made for the sole protection of the Borrower and the Bank, and the Bank's
successors and assigns. No other Person shall have any rights of any nature
hereunder or by reason hereof, except to the extent that the Trustee is
expressly granted rights hereunder.
11.5 Indemnity by the Borrower. The Borrower hereby
indemnifies and holds harmless the Bank and the Participants and their
respective directors, officers, agents and employees (collectively the
"indemnitees") from and against:
(a) any and all claims, demands, actions or
causes of action that are asserted against any indemnitee by any Person if the
claim, demand, action or cause of action directly or indirectly relates to a
claim, demand, action or cause of action that the Person has or asserts against
the Borrower, whether in connection with the Letter of Credit, the Bonds, any
of the Bond Documents, any of the Letter of Credit Documents or this Agreement,
or otherwise;
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(b) any and all claims, demands, actions or
causes of action that are asserted against any indemnitee by any Person and
arising from or in connection with (i) any statement or omission by Borrower,
its agents or employees, actual or alleged, in the Bond Documents, or (ii) any
breach or default, actual or alleged, of the representations, warranties,
covenants, conditions or agreements of Borrower, its agents or employees
contained in this Agreement or any of the other Letter of Credit Documents or
in any of the Bond Documents; and
(c) any and all liabilities, losses, costs or
expenses (including court costs and attorneys' fees) that any indemnitee
suffers or incurs as a result of the assertion of any claim, demand, action or
cause of action specified in Section 11.5(a) or Section 11.5(b) of this
Agreement.
Any obligation or liability of the Borrower to any
indemnitee as provided in this Section 11.5 shall be secured by the Security
Documents. The indemnity contained in this Section 11.5 shall not extend to any
claims, demands, actions, causes of action, liabilities, losses, costs or
expenses which result solely from the negligence or willful misconduct of the
Bank.
11.6 Commissions. The Borrower hereby indemnifies and
holds the Bank harmless from any responsibility, cost and/or liability,
including any attorneys' fees incurred, in connection with any claim by any
Person for the payment of any commission, charge or brokerage fee in connection
with the Bonds or any of the other transactions contemplated in connection with
this Agreement arising by virtue of any action taken, directly or indirectly,
by the Borrower.
11.7 Binding Effect. This Agreement shall be binding upon
and inure to the benefit of the Borrower and the Bank and their respective
successors and assigns. The Bank is authorized in its sole discretion to
participate interests in the Letter of Credit and security therefor to
Participants.
11.8 Execution in Counterparts. This Agreement and any
other Letter of Credit Document may be executed in any number of counterparts
and any party hereto or thereto may execute any counterpart, each of which when
executed and delivered will be deemed to be an original and all of which
counterparts of this Agreement or any other Letter of Credit Document, as the
case may be, taken together will be deemed to be but one and the same
instrument. The execution of this Agreement or any other Letter of Credit
Document by any party hereto or thereto will not become effective until
counterparts hereof or thereof, as the case may be, have been executed by all
the parties hereto or thereto.
11.9 Prior Agreements; Amendments; Consents. This
Agreement contains the entire agreement between the Bank and Borrower with
respect to the subject matter hereof, and all prior negotiations,
understandings and agreements with respect thereto are superseded by this
Agreement. No amendment, modification, supplement, termination or waiver of any
provision of this Agreement or any of the Letter of Credit Documents, and no
consent to any departure by the Borrower therefrom, may in any event be
effective unless in writing signed by the Bank, and then only in the specific
instance and for the specific purpose given.
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11.10 Cumulative Remedies; No Waiver. The rights, powers
and remedies of the Bank under the Letter of Credit Documents are cumulative
and not exclusive of any right, power or remedy provided by law or equity or
otherwise. No failure or delay on the part of the Bank in exercising any right,
power or remedy may be, or may be deemed to be, a waiver thereof; nor may any
single or partial exercise of any right, power or remedy preclude any other or
further exercise of any other right, power or remedy.
11.11 Inclusion of Expenditures in Indebtedness. Except as
otherwise provided herein, all sums paid or expended by the Bank under the
terms of this Agreement shall bear interest at the Default Interest Rate, from
the date such sums are paid or expended, shall be secured by the Security
Documents and shall be immediately due and payable by the Borrower upon demand.
11.12 Survival of Representations and Warranties. All
representations and warranties of the Borrower contained herein or in any other
Letter of Credit Document will survive the delivery of the Letter of Credit,
and are material and have been or will be relied upon by the Bank,
notwithstanding any investigation made by the Bank or on behalf of the Bank.
For the purpose of the foregoing, all statements contained in any certificate,
agreement or other writing delivered by or on behalf of the Borrower pursuant
hereto or pursuant to any other Letter of Credit Document or in connection with
the transactions contemplated hereby or thereby shall be deemed to be
covenants, representations and warranties of the Borrower contained herein or
in the other Letter of Credit Documents, as the case may be.
11.13 Notices. All notices, requests, demands, directions
and other communications provided for in this Agreement and under any of the
other Letter of Credit Documents must be in writing and must be mailed,
telegraphed, delivered or sent by telex, telecopy or cable to the appropriate
party at its address as follows:
If to the Borrower:
▇▇▇▇▇▇▇ INNS, INC.
Suite 8050
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President/CFO
If to the Bank:
With respect to Letter of Credit
administration:
FIRSTAR BANK, N.A.
Global Services Division
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
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with a copy to
▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇
Commercial Real Estate Dept.
Firstar Bank, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With respect to all Trustee matters:
FIRSTAR BANK, N.A.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: Mr. ▇▇▇▇▇▇ ▇▇▇▇▇
Addresses for purposes of notice may be changed from time to time by written
notice sent to the other party in accordance with this Section 11.13. Any
notice, request, demand, direction or other communication given by telegram,
telex, telecopy or cable must be confirmed within 24 hours by letter mailed or
delivered to the appropriate party at such party's respective address. If any
notice, request, demand, direction or other communication is given by mail it
will be effective upon the earlier of (a) three (3) days after the postmark
date of mailing in the U.S. Mail, certified or registered mail, return receipt
requested postage prepaid; (b) the date after delivery to an overnight courier;
or (c) actual receipt, if given by telecopy or personal delivery.
11.14 Further Assurances. The Borrower shall, at its
expense and without expense to the Bank, do, execute and deliver such further
acts and documents as the Bank from time to time reasonably requires for the
purpose of assuring and confirming unto the Bank the rights hereby created or
intended now or hereafter so to be, or for carrying out the intention or
facilitating the performance of the terms of any Letter of Credit Document, or
for assuring the validity of any security interest or lien under any Security
Document.
11.15 Governing Law. This Agreement shall be governed by,
and construed and in accordance with, the laws of the state of Indiana.
11.16 Severability of Provisions. Any provision in any
Letter of Credit Document that is held to be inoperative, unenforceable or
invalid shall be inoperative, unenforceable or invalid without affecting the
remaining provisions, and to this end the provisions of all Letter of Credit
Documents are declared to be severable.
11.17 Headings. Article and section headings in this
Agreement are included for convenience of reference only and are not part of
this Agreement for any other purpose.
11.18 Time of the Essence. Time is of the essence for all
purposes under this Agreement and the other Letter of Credit Documents.
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11.19 WAIVER OF JURY TRIAL. THE BANK AND THE BORROWER,
WAIVE ANY RIGHT EITHER OF THEM MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION
BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY RELATED INSTRUMENT OR
AGREEMENT, OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREBY, OR ANY COURSE OF
CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF EITHER OF
THEM WITH RESPECT THERETO. NEITHER THE BORROWER NOR THE BANK SHALL SEEK TO
CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY ACTION IN WHICH A JURY TRIAL HAS
BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT
BEEN WAIVED. THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY
RESPECT OR RELINQUISHED BY EITHER THE BORROWER OR THE BANK EXCEPT BY A WRITTEN
INSTRUMENT EXECUTED BY BOTH OF THEM.
IN WITNESS WHEREOF, the Borrower has caused this Agreement to be
executed on its behalf by its duly authorized representative and the Bank has
caused this Agreement to be executed on its behalf by its duly authorized
officer as of the date first above written.
FIRSTAR BANK, ▇.▇. ▇▇▇▇▇▇▇ INNS, INC.
By: By:
---------------------------- ----------------------------------
Title: Title:
------------------------- -----------------------------
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190
EXHIBIT "A"
IRREVOCABLE LETTER OF CREDIT
FIRSTAR BANK, N.A.
Global Services Division
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dated:
----------------
Irrevocable ________ of Credit No. [_________]
Beneficiary:
Applicant:
Firstar Bank, N.A., as Trustee ▇▇▇▇▇▇▇ Inns, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Amount: $3,346,312
Expiration Date: December 31, 2002
Ladies and Gentlemen:
FIRSTAR BANK, N.A. (sometimes hereinafter referred to as the "Bank")
hereby establishes in your favor for the benefit of the Bondholders for the
account of ▇▇▇▇▇▇▇ Inns, Inc. (the "Corporation"), its Irrevocable Letter of
Credit (this "Letter of Credit") in a maximum amount of up to Three Million
Three Hundred Forty-six Thousand Three Hundred Twelve Dollars ($3,346,312) (as
more fully described below) effective immediately and expiring at 4:00 p.m.,
Cincinnati, Ohio time, on December 31, 2002 (the "Expiration Date"), or if the
Expiration Date is not a business day (as hereinafter defined) on the next
succeeding business day, unless terminated earlier in accordance with the
provisions hereof or unless extended by us.
This Letter of Credit is being issued in connection with that certain
Trust Indenture (the "Indenture") between the City of Elkhart, Indiana (the
"Issuer"), and you dated as of the 22nd
By: And:
----------------------------- ------------------------------
Authorized Signature Authorized Signature
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191
day of December, 1999, as amended, to authorize, issue and sell certain
Economic Development Revenue Refunding Bonds, Series 1999 (▇▇▇▇▇▇▇ Inns, Inc.)
(the "Bonds"), in the aggregate principal amount of $3,305,000, the payment of
which is secured by, among other things, this Letter of Credit. All capitalized
terms used but not defined herein shall have the meanings ascribed thereto in
the Indenture.
As used in this Letter of Credit, the term "Business Day" shall mean a
day of the year, other than (a) a Saturday, (b) a Sunday, (c) a day on which
banks located in any city in which the principal office of the Trustee or our
principal offices are located are required or authorized by law to remain
closed and (d) a day on which The New York Stock Exchange is closed.
You, as Trustee pursuant to the Indenture, are hereby irrevocably
authorized to draw on us, for the account of the Corporation, in accordance
with the terms and conditions hereof and subject to increases and reductions in
amounts as hereinafter set forth, an aggregate amount not exceeding Three
Million Three Hundred Forty-six Thousand Three Hundred Twelve Dollars
($3,346,312) (the "Stated Amount"), of which (A) an aggregate amount not
exceeding $3,305,000 may be drawn upon for payment of the unpaid principal
amount of the Bonds or the portion of the purchase price corresponding to the
principal amount of the Bonds or Beneficial Ownership Interests (as hereinafter
defined), and (B) an aggregate amount not exceeding $41,312 may be drawn upon
for payment of up to 45 days accrued interest on the Bonds or the portion of
the purchase price of the Bonds or Beneficial Ownership Interests corresponding
to accrued interest. All drawings under this Letter of Credit will be paid with
our own funds and not with funds of the Corporation, the Issuer or any other
person, and prior to any reimbursement thereof.
Funds under this Letter of Credit are only available to you against
your sight draft(s) drawn on us, substantially in the form of Exhibit 1 hereto,
stating on their face: "Drawn under FIRSTAR BANK, N.A. Letter of Credit No.
[_______]" and upon your presenting to us one or more of the following written
certificates:
(A) If the drawing is made with respect to the payment of the
principal amount of and accrued interest on the Bonds or Beneficial Ownership
Interests delivered to you for purchase pursuant to Sections 2.04 or 2.05 of
the Indenture, but not for purchases under Sections 2.06 or 2.07 of the
Indenture, a written certificate signed by you in the form of Exhibit 2
attached hereto appropriately completed;
(B) If the drawing is being made for a payment of interest on the
Bonds, a written certificate signed by you in the form of Exhibit 3 attached
hereto appropriately completed;
By: And:
----------------------------- ------------------------------
Authorized Signature Authorized Signature
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(C) If the drawing is being made for the payment of principal of
the Bonds due upon redemption, acceleration or scheduled maturity, a written
certificate signed by you in the form of Exhibit 4 attached hereto
appropriately completed; or
(D) If the drawing is being made with respect to the payment of
the principal amount of and accrued interest on the Bonds or Beneficial
Ownership Interests delivered to you for purchase under Sections 2.06 or 2.07
of the Indenture, a written certificate signed by you in the form of Exhibit 5
attached hereto appropriately completed.
Presentation of such draft(s) and certificate(s) shall be made on a
business day at our office located at Firstar Bank, N.A., Global Services
Division, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or any other
place which may be designated by us by written notice delivered to you. If we
receive any of your drafts drawn hereunder at such office, all in strict
conformity with the terms and conditions of this Letter of Credit, on or prior
to the termination hereof, we will honor the same and make payment hereunder.
If requested by you, payment may be made by deposit of such funds into a
designated bank account that you maintain. If demand for payment is made by you
hereunder at or prior to 11:00 A.M. (Cincinnati, Ohio time) on a Business Day,
and provided that such demand for payment and the drawing certificate presented
in connection therewith conform in all particulars to the terms and conditions
hereof, payment shall be made to you of the amount demanded, in immediately
available funds, on or prior to 11:00 A.M. (Cincinnati, Ohio time) on the next
succeeding Business Day. If demand for payment is made by you hereunder at or
prior to 10:30 A.M. (Cincinnati, Ohio time) on a Business Day relating to a
certificate in the form of Exhibit 2 or Exhibit 5 attached hereto, and provided
that such demand for payment and the drawing certificate presented in
connection therewith conform in all particulars to the terms and conditions
hereof, payment shall be made to you of the amount demanded, in immediately
available funds on the same Business Day.
Upon receipt from you of a written certificate signed by you in the
form of Exhibit 6 attached hereto appropriately completed, stating that a
payment of principal of the Bonds has been made from funds other than amounts
drawn under this Letter of Credit, in accordance with the terms of the
Indenture, the Stated Amount of this Letter of Credit shall be reduced by the
amount of the reduction set forth in such certificate. Drawings in respect of
payments hereunder honored by us shall not, in the aggregate, exceed the Stated
Amount, as the Stated Amount may have been reinstated by us as set forth below.
Upon payment of a drawing hereunder, the Stated Amount of this Letter of Credit
shall be reduced by the amount of such payment except as follows:
(a) Immediately after we honor your demand under this Letter of
Credit accompanied by a certificate in the form of Exhibit 2
attached hereto, an amount equal to such
By: And:
----------------------------- ------------------------------
Authorized Signature Authorized Signature
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payment shall be automatically reinstated to the amount of
this Letter of Credit; and
(b) Five Business Days after we honor your demand under this
Letter of Credit accompanied by a certificate in the form of
Exhibit 3 hereto, an amount equal to such payment shall be
automatically reinstated to the amount of this Letter of
Credit unless (i) you shall have received our notice to you
by hand delivery, telecopy or registered mail prior to the
end of such five Business Day period that (x) we have not
been reimbursed for such payment in accordance with the terms
of the Reimbursement Agreement dated as of December 22, 1999
among the Borrower and us (the "Reimbursement Agreement") or
(y) any Other Event of Default under the Reimbursement
Agreement has occurred and is continuing, and as a
consequence thereof there shall be no such reinstatement, or
(ii) the fifth Business Day after such presentation would be
after the expiration date of this Letter of Credit.
Reductions in the Stated Amount which are the result of payments under
the Letter of Credit honoring a demand accompanied by a certificate in the form
of Exhibit 4 hereto or in the form of Exhibit 5 hereto shall not be reinstated.
The Stated Amount shall be reduced upon our receipt of a certificate
in the form of Exhibit 6 hereto and such reduction shall not be subject to
reinstatement.
Only you, as Trustee, or your transferee pursuant to the terms of this
Letter of Credit, may make a drawing under this Letter of Credit. Upon the
payment to you, as Trustee, of the amount specified in a draft drawn hereunder,
we will be fully discharged of our obligation under this Letter of Credit with
respect to such draft and shall not thereafter be obligated to make any further
payments under this Letter of Credit in respect of such draft to you or any
other person who may have made to you or makes to you a demand for payment of
principal of or interest on any Bond. By paying to you an amount demanded in
such draft we make no representation as to the correctness of the amount
demanded in such draft.
This Letter of Credit applies only to the payment of principal of the
Bonds, and up to 45 days' interest accruing on the Bonds on or prior to the
expiration of this Letter of Credit and does not apply to any interest that may
accrue thereon or any principal that may be payable with respect thereto after
such date.
This Letter of Credit shall automatically terminate without any action
or notice and shall be delivered to us for cancellation upon the earliest of:
(i) the honoring of the final drawing not subject to reinstatement available to
be made hereunder; (ii) our receipt of a written certificate
By: And:
----------------------------- ------------------------------
Authorized Signature Authorized Signature
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signed by your officer and an officer of the Corporation in the form of Exhibit
7 hereto appropriately completed, stating that: (a) no Bonds are Outstanding
within the meaning of the Indenture; and (b) such officers are duly authorized
to sign such certificate on behalf of you and the Corporation, respectively;
(iii) our receipt of a written certificate signed by your officer and an
authorized officer of the Corporation in the form of Exhibit 8 hereto
appropriately completed, stating that: (a) an Alternate Letter of Credit (as
defined in the Indenture) has been accepted by the Trustee, and (b) such
officers are duly authorized to sign such certificate on behalf of you and the
Corporation; or (iv) the occurrence of the Expiration Date.
Pursuant to the terms of the Reimbursement Agreement, on September 15,
2002 and thereafter on September 15 of each year, the Expiration Date of this
Letter of Credit may be extended in our sole discretion for an additional
period of one year from the date of expiry then in place, provided that the
Corporation has delivered to us a written request for such extension by no
later than December 31 of the year prior to the year in which this Letter of
Credit will expire (assuming an Expiry Date of December 31). Written notice of
our decision regarding the Corporation's request shall be delivered to the
Corporation and to you not later than two (2) months following our receipt of
the financial statements required to be delivered by the Corporation pursuant
to Section 8.13(i) of the Reimbursement Agreement. Failure on our part to give
notice within such time period shall be deemed denial of the extension request.
As used herein, "Beneficial Ownership Interest" means the beneficial
right to receive payments and notices with respect to the Bonds which are held
by the Depository (as defined in the Indenture) under a book entry system. As
used herein, "Beneficial Owner" means with respect to the Bonds, a person (as
defined in the Indenture) owning a Beneficial Interest therein, as evidenced to
your satisfaction.
This Letter of Credit is subject to the "Uniform Customs and Practice
for Documentary Credits, 1993 Revision, International Chamber of Commerce
Publication No. 500" (the "Uniform Customs"). This Letter of Credit shall be
deemed to be made under the laws of the State of Indiana, and shall, as to
matters not governed by the Uniform Customs, be governed by and construed in
accordance with the laws of the State of Indiana.
Communications with respect to this Letter of Credit shall be in
writing and shall be addressed to us at Global Services Division, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, specifically referring to the number
of this Letter of Credit. We will address all communications with respect to
this Letter of Credit to the Trustee at the address set forth on the front page
hereof or to such other address as the Trustee may direct in writing.
In accordance with Article 48 of the Uniform Customs, this Letter of
Credit is transferable in its entirety to any transferee who has succeeded you
as Trustee under the
By: And:
----------------------------- ------------------------------
Authorized Signature Authorized Signature
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Indenture. Each letter of credit issued upon any such transfer may be
successively transferred. Transfer of the available balance under this Letter
of Credit to such transferee shall be effected by the presentation to us of
this Letter of Credit accompanied by a certificate substantially in the form of
Exhibit 9 attached hereto and payment of a transfer fee equal to .25% of the
Stated Amount then available for draw. Following such presentation, and as soon
as this original Letter of Credit is returned to us and we have been paid our
customary fee, we shall forthwith transfer the same to your transferee or, if
so requested by your transferee, issue an irrevocable letter of credit to your
transferee with provisions therein consistent with those of this Letter of
Credit.
This Letter of Credit sets forth in full our undertaking and shall not
in any way be modified, amended, amplified or limited by reference to any
document, instrument or agreement referred to herein (including, without
limitation, the Bonds and the Indenture), except only the certificate(s) and
the draft(s) referred to herein; and any such reference shall not be deemed to
incorporate herein by reference any document, instrument or agreement except
for such certificate(s) and such draft(s).
Very truly yours,
FIRSTAR BANK, N.A.
By:
----------------------------------------
Its:
---------------------------------
By:
----------------------------------------
Its:
---------------------------------
By: And:
----------------------------- ------------------------------
Authorized Signature Authorized Signature
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EXHIBIT 1
SIGHT DRAFT
----------------------
Pay on sight to the order of: ________________ U.S. ________________ Dollars
(U.S. $_____).
Charge to account of ▇▇▇▇▇▇▇ Inns, Inc.
Drawn under FIRSTAR BANK, N.A. Letter of Credit No. [________].
TO: FIRSTAR BANK, N.A.
Global Services Division
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
The sum drawn does not exceed the difference between (I) the maximum
aggregate amount to be drawn under the Letter of Credit less (II) the aggregate
amount of all previous drawings made under the Letter of Credit for which
FIRSTAR BANK, N.A. has not reinstated, as certified to us in any Certificate of
Nonreinstatement heretofore delivered by you.
FIRSTAR BANK, N.A., as Trustee
By:
------------------------------
Its:
------------------------------
By:
------------------------------
Its:
------------------------------
By: And:
----------------------------- ------------------------------
Authorized Signature Authorized Signature
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EXHIBIT 2
CERTIFICATE FOR DRAWING UNDER
SECTIONS 2.04 OR 2.05 OF INDENTURE
(TENDER OPTIONS FOR CHANGE IN INTEREST RATE OR CHANGE IN
INTEREST RATE MODE)
Re: Firstar Bank Irrevocable Letter of Credit No. _____
The undersigned hereby certifies to Firstar Bank, N.A. (the "Bank")
with reference to Irrevocable Letter of Credit No. _____ (the "Letter of
Credit"; the terms "Bonds," "Indenture," "Stated Amount," "Beneficial Owner" and
"Beneficial Ownership Interest" used herein shall have their respective meanings
set forth in the Letter of Credit) that:
1. The undersigned is the Trustee under the Indenture.
2. The undersigned is making this demand for payment under the
Letter of Credit with respect to the payment of the principal
amount of and accrued interest on the Bonds or Beneficial
Ownership Interests delivered to the Trustee for purchase in
accordance with sections 2.04 or 2.05 (but not 2.06 or 2.07)
of the Indenture.
3. The principal amount of Bonds or Beneficial Ownership
Interests which are to be purchased and with respect to the
payment of which the Trustee does not have available amounts
pursuant to section 6.15 of the Indenture, or otherwise, that
are to be applied to such payment prior to moneys demanded
under the Letter of Credit is $____________.
4. The accrued interest on the Bonds or Beneficial Ownership
Interests referred to in paragraph 3 above and with respect to
the payment of which the Trustee does not have available
amounts pursuant to section 6.15 of the Indenture, or
otherwise, that are to be applied to such payment prior to
moneys demanded under the Letter of Credit is $__________.
5. The sum of the amounts set forth in paragraphs 3 and 4 above
is $_________ and is the amount of the drawing with respect to
this Certificate.
By: And:
--------------------------------- -------------------------------
Authorized Signature Authorized Signature
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6. Immediately upon your payment of the amount demanded hereby,
such Bonds or Beneficial Ownership Interests will be held by
us, as your agent and for your benefit as Beneficial Owner,
pending your further instructions to the undersigned.
7. The amount hereby demanded was computed in accordance with the
indenture and does not exceed the Stated Amount.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Certificate as of this ______ day of ______________, ____.
FIRSTAR BANK, NA,
as Trustee
By:
------------------------------------
Its:
--------------------------------
By: And:
--------------------------------- -------------------------------
Authorized Signature Authorized Signature
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199
EXHIBIT 3
CERTIFICATE FOR INTEREST DRAWING
Re: Firstar Bank Irrevocable Letter of Credit No. _____
The undersigned hereby certifies to Firstar Bank, N.A. (the "Bank")
with reference to Irrevocable Letter of Credit No. _____ (the "Letter of
Credit"; the terms "Bonds," "Business Day," "Indenture" and "Stated Amount" used
herein shall have their respective meanings set forth in the Letter of Credit)
that,
1. The undersigned is the Trustee under the Indenture.
2. The undersigned is making a demand for payment under the
Letter of credit with respect to the payment of interest on
the Bonds.
3. The amount of interest on the Bonds which is due and payable,
or will be due and payable within two Business Days after the
date hereof, is $__________, and the amount of the drawing
with respect to this Certificate does not exceed such amount.
4. The amount hereby demanded was computed in accordance with the
Indenture and does not exceed the Stated Amount,
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Certificate as of the _______ day of ______________, ____.
FIRSTAR BANK, NA,
as Trustee
By:
------------------------------------
Its:
--------------------------------
By: And:
--------------------------------- -------------------------------
Authorized Signature Authorized Signature
-10-
200
EXHIBIT 4
CERTIFICATE FOR PRINCIPAL DRAWING UPON
REDEMPTION, ACCELERATION OR SCHEDULED MATURITY
Re: Firstar Bank, N.A. Irrevocable Letter of Credit No. _____
The undersigned hereby certifies to Firstar Bank, N.A. (the "Bank")
with reference to Irrevocable Letter of Credit No. _____ (the "Letter of
Credit"; the terms "Bonds," "Business Day," "Indenture" and "Stated Amount" used
herein shall have their respective meanings set forth in the Letter of Credit)
that:
1. The undersigned is the Trustee under the Indenture.
2. The undersigned is making a demand for payment under the
Letter of Credit with respect to the payment of principal of
the Bonds.
3. The amount of principal of the Bonds which is due and payable,
or will be due and payable within two Business Days after the
date hereof, is $__________, and is the amount of the drawing
with respect to this Certificate.
4. The amount hereby demanded was computed in accordance with the
Indenture and does not exceed the stated Amount.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Certificate as of the _______ day of ___________, _____.
FIRSTAR BANK, NA,
as Trustee
By:
------------------------------------
Its:
--------------------------------
By: And:
--------------------------------- -------------------------------
Authorized Signature Authorized Signature
-11-
201
EXHIBIT 5
CERTIFICATE FOR PRINCIPAL AND ACCRUED INTEREST
PURSUANT TO SECTIONS 2.06 AND 2.07 OF THE INDENTURE
Re: Firstar Bank, N.A. Irrevocable Letter of Credit No. _____
The undersigned hereby certifies to Firstar Bank, N.A. (the "Bank")
with reference to Irrevocable Letter of Credit No. _____ (the "Letter of
Credit"; the terms "Bonds," "Indenture," "Stated Amount," "Beneficial Owner" and
"Beneficial Ownership Interest" used herein shall have their respective meanings
set forth in the Letter of Credit) that:
1. The undersigned is the Trustee under the Indenture.
2. The undersigned is making this demand for payment under the
Letter of Credit with respect to the payment of the principal
amount of and accrued interest on the Bonds or Beneficial
ownership interests delivered to the Trustee for purchase in
accordance with sections 2.06 or 2.07 of the Indenture.
3. The principal amount of Bonds or Beneficial Ownership
interests which are to be purchased is $__________.
4. The accrued interest on the Bonds or Beneficial Ownership
Interests referred to in paragraph 3 above is $__________.
5. The sum of the amounts set forth in paragraphs 3 and 4 above
is $__________ and is the amount of the drawing with respect
to this Certificate.
6. Immediately upon your payment of the amount demanded hereby,
such Bonds or Beneficial ownership Interests will be held by
us, as your agent and for your benefit as Beneficial Owner,
pending your further instructions to the undersigned.
7. The amount hereby demanded was computed in accordance with the
Indenture and does not exceed the Stated Amount.
By: And:
--------------------------------- -------------------------------
Authorized Signature Authorized Signature
-12-
202
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Certificate as of the _______ day of ____________, _____.
FIRSTAR BANK, NA,
as Trustee
By:
------------------------------------
Its:
--------------------------------
By: And:
--------------------------------- -------------------------------
Authorized Signature Authorized Signature
-13-
203
EXHIBIT 6
CERTIFICATE OF REDUCTION IN STATED AMOUNT
FIRSTAR BANK, N.A.
Global Services Division
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Re: FIRSTAR BANK, N.A. Irrevocable Letter of Credit No. _____
Ladies and Gentlemen:
The undersigned, a duly authorized officer of FIRSTAR BANK, N.A., as
Trustee (the "Trustee"), hereby certifies to FIRSTAR BANK, N.A. (the "Bank")
with reference to FIRSTAR BANK, N.A. irrevocable ________ (the "Letter of
Credit," the capitalized terms defined therein and not defined herein being used
as therein defined) issued by the Bank in favor of the Trustee that:
(1) The Trustee is the Trustee under the Indenture for the holders
of the Bonds.
(2) On the date hereof, a payment or a credit towards payment of
principal on the Bonds in the amount of $_______ has been made from funds other
than amounts drawn under the Letter of Credit in accordance with the terms of
the Indenture.
(3) In accordance with the Letter of Credit, upon your receipt of
this certificate, the Stated Amount of the Letter of Credit is reduced by
$________________, which amount equals the sum of: (i) the amount of principal
so paid, plus (ii) 45 days' interest on such amount of principal. You may adjust
your records accordingly.
By: And:
--------------------------------- -------------------------------
Authorized Signature Authorized Signature
-14-
204
IN WITNESS WHEREOF, the Trustee has executed and delivered this
certificate as of the ______ day of __________________.
FIRSTAR BANK, N.A., as Trustee
By:
-----------------------------------------
Its:
-----------------------------------------
By:
-----------------------------------------
Its:
-----------------------------------------
By: And:
--------------------------------- -------------------------------
Authorized Signature Authorized Signature
-15-
205
EXHIBIT 7
CERTIFICATE THAT NO BONDS ARE OUTSTANDING
FIRSTAR BANK, N.A.
Global Services Division
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Re: FIRSTAR BANK, N.A.
Irrevocable Letter of Credit No. _____
Ladies and Gentlemen:
The undersigned, a duly authorized officer of FIRSTAR BANK, N.A., as
Trustee (the "Trustee"), and a duly authorized officer of ▇▇▇▇▇▇▇ Inns, Inc.
(the "Corporation"), hereby certify to FIRSTAR BANK, N.A. (the "Bank") with
reference to FIRSTAR BANK, N.A. irrevocable ______ (the "Letter of Credit," the
capitalized terms defined therein and not defined herein being used as therein
defined) issued by the Bank in favor of the Trustee that:
(1) The Trustee is the Trustee under the Indenture for the holders
of the Bonds.
(2) No Bonds are outstanding within the meaning of the Indenture.
(3) The undersigned officers are duly authorized to sign this
certificate on behalf of the Trustee and on behalf of the
Corporation, respectively.
Pursuant to the Indenture, we are delivering herewith the Letter of
Credit for cancellation.
By: And:
--------------------------------- -------------------------------
Authorized Signature Authorized Signature
-16-
206
IN WITNESS WHEREOF, the Trustee and the Corporation have executed and
delivered this certificate as of the ______ day of ___________________.
FIRSTAR BANK, N.A., as Trustee
By:
-----------------------------------------
Its:
-----------------------------------------
By:
-----------------------------------------
Its:
-----------------------------------------
▇▇▇▇▇▇▇ INNS, INC.
By:
-----------------------------------------
Title:
---------------------------------------
By: And:
--------------------------------- -------------------------------
Authorized Signature Authorized Signature
-17-
207
EXHIBIT 8
CERTIFICATE OF ACCEPTANCE OF ALTERNATE LETTER OF CREDIT
FIRSTAR BANK, N.A.
Global Services Division
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Re: FIRSTAR BANK, N.A.
Irrevocable Letter of Credit No. _____
Ladies and Gentlemen:
The undersigned, a duly authorized officer of FIRSTAR BANK, N.A., as
Trustee (the "Trustee"), and a duly authorized officer of ▇▇▇▇▇▇▇ Inns, Inc.
(the "Corporation"), hereby certify to FIRSTAR BANK, N.A. (the "Bank") with
reference to FIRSTAR BANK, N.A. irrevocable ________ (the "Letter of Credit,"
the capitalized terms defined therein and not defined herein being used therein
defined) issued by the Bank in favor of the trustee that:
(1) The Trustee is the Trustee under the Indenture for the holders
of the Bonds.
(2) An Alternate Letter of Credit (as defined in the Indenture)
has been accepted by the Trustee.
(3) The date on which such Alternate Letter of Credit becomes the
"Letter of Credit" for all purposes under the Indenture is
______________.
(4) The undersigned officers are duly authorized to sign this
certificate on behalf of the Trustee and on behalf of the
Corporation, respectively.
By: And:
--------------------------------- -------------------------------
Authorized Signature Authorized Signature
-18-
208
IN WITNESS WHEREOF, the Trustee and Corporation have executed and
delivered this certificate as of the _____ day of _________________.
FIRSTAR BANK, N.A., as Trustee
By:
-----------------------------------------
Its:
-----------------------------------------
By:
-----------------------------------------
Its:
-----------------------------------------
▇▇▇▇▇▇▇ INNS, INC.
By:
-----------------------------------------
Title:
---------------------------------------
By: And:
--------------------------------- -------------------------------
Authorized Signature Authorized Signature
-19-
209
EXHIBIT 9
CERTIFICATE OF TRANSFER OF
LETTER OF CREDIT TO SUCCESSOR TRUSTEE
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
-----------------------------------
(Name of Transferee)
-----------------------------------
(Address)
as Successor Trustee under the Indenture (as defined in the above-referenced
Letter of Credit) all rights of the undersigned beneficiary to draw under the
above Letter of Credit in its entirety.
By this transfer, all rights of the undersigned beneficiary in such
Letter of Credit are transferred to the transferee and the transferee shall have
the sole rights as beneficiary thereof, including sole rights relating to any
amendments whether increases or extensions or other amendments and whether now
existing or hereafter made. All amendments are to be advised direct to the
transferee without necessity of any consent of or notice to the undersigned
beneficiary.
The original Letter of Credit (and any amendments thereto) is returned
herewith, and we ask you to endorse the transfer on the reverse thereof, and
forward it direct to the transferee with your customary notice of transfer.
SIGNATURE AUTHENTICATED Yours very truly,
FIRSTAR BANK, NA,
as trustee
-------------------------------
(Bank)
By:
------------------------------- ------------------------------
(Authorized Signature) Its
---------------------------
By: And:
--------------------------------- -------------------------------
Authorized Signature Authorized Signature
-20-
210
MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT
THIS MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT
(hereafter referred to as the "Mortgage") is made and entered into as of the
22nd day of December, 1999, from ▇▇▇▇▇▇▇ INNS, INC., a Georgia corporation
(hereafter referred to as "Borrower"), whose address is 8 ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ to FIRSTAR BANK, N.A., a National
Banking Association (hereafter referred to as "Mortgagee"), whose address is ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
W I T N E S S E T H:
FOR and in consideration of the premises, the sum of Ten and
No/100 Dollars ($10.00) and other good and valuable consideration, the receipt
and sufficiency whereof are hereby acknowledged, and in order to secure the
indebtedness and other obligations of Borrower hereafter set forth, Borrower
does hereby grant, bargain, sell, convey, mortgage, warrant, assign, transfer,
pledge and set over unto Mortgagee and the successors and assigns of Mortgagee
all of the following (hereafter collectively referred to as the "Property"):
A. All that tract or parcel of land located in Elkhart,
Indiana as more particularly described in Exhibit A, attached hereto and
incorporated herein by this reference (hereafter referred to as the "Land");
B. All buildings, structures and improvements of every nature
whatsoever now or hereafter situated on the Land, including, without limitation,
all gas and electric fixtures, radiators, pipes, heaters, furnaces, engines and
machinery, escalators, boilers, ranges, elevators, motors, plumbing and heating
fixtures, carpeting and other floor coverings, fire extinguishers, sprinklers,
and any other safety equipment required by governmental regulation or law,
washers, dryers, water heaters, mirrors, mantels, air conditioning apparatus
(including, without limitation humidity control equipment), refrigeration
plants, refrigerators, cooking apparatus and appurtenances, window screens,
awnings and storm sashes, alarm devices of any type, automatic sprinkler
systems, carpet, cabinets and shelving, partitions, paneling, and wall covering,
and windows of every type, which are or shall be attached to the Land or said
buildings, structures, or improvements and all other fixtures, machinery,
equipment, furniture, furnishings, appliances, vehicles, building supplies and
materials, books and records, chattels, inventory, accounts, receivables, farm
products, consumer goods, general intangibles and personal property of every
kind and nature whatsoever (other than personal property which may be or deemed
to be toxic or Hazardous Materials, as defined herein) now or hereafter owned by
Borrower and located in, on, or about, or used or intended to be used with or in
connection with the use, operation, or enjoyment of the Property, including all
extensions, additions, improvements, betterments, after-acquired property,
renewals, replacements and substitutions, and proceeds from a sale of any of the
foregoing, and all right, title and interest of Borrower in any such fixtures,
machinery, equipment, furniture, furnishings, appliances, vehicles, and goods to
become fixtures, and personal property subject to or covered by any prior
security agreement, conditional sales contract, chattel mortgage or similar lien
or claim, together with the benefit of any deposits or payments now or hereafter
made by Borrower or on behalf of Borrower, all tradenames,
211
trademarks, servicemarks, logos and goodwill which in any way are now owned or
hereafter belong, relate or appertain to the Property or any part thereof or are
now owned or hereafter acquired by Borrower and which relate or pertain to the
Property; and all inventory, accounts, chattel paper, documents, equipment,
fixtures, farm products, consumer goods and general intangibles constituting
proceeds acquired with cash proceeds of any of the property described
hereinabove, all of which are hereby declared and shall be deemed to be fixtures
and accessions to the Land and a part of the Property as between the parties
hereto and all persons claiming by, through or under them, and which shall be
deemed to be a portion of the security for the indebtedness herein described and
to be secured by this Mortgage;
C. All easements, rights-of-way, strips and gores of land,
vaults, streets, ways, alleys, passages, sewer rights, waters, water courses,
water rights and powers, shrubs, crops, trees, and timber now or hereafter
located on the Land or under or above the same or any part or parcel thereof,
and all estates, rights, titles, interests, minerals, royalties, easements,
privileges, liberties, tenements, hereditaments and appurtenances, reversion and
reversions, remainder and remainders whatsoever, in any way belonging, relating
or appertaining to the Property or any part thereof, or which hereafter shall in
any way belong, relate or be appurtenant thereto, whether now owned or hereafter
acquired by Borrower;
D. All present and future income, rents, issues, profits,
accounts, receivables and revenues of the Property from time to time accruing
(including, without limitation, all Borrower's rights and interest in all
payments under leases or tenancies, all payments and revenues for the use of
guest rooms or any other facilities or services at the Property and all advance
deposits for rooms, meeting or banquet space), unearned premiums on any
insurance policy carried by Borrower for the benefit of Mortgagee and/or the
Property, tenant security deposits, escrow funds and all awards or payments,
including interest thereon and the right to receive same, growing out of or as a
result of any exercise of the right of eminent domain, including the taking of
any part or all of the Property or payment for alteration of the grade of any
road upon which said Property abuts, or any other injury to, taking of or
decrease in the value of said Property to the extent of all amounts which may be
owing on the indebtedness secured by this Mortgage at the date of receipt of any
such award or payment by Borrower, and the reasonable attorneys' fees, costs and
disbursements incurred by Mortgagee in connection with the collection of such
award or payment), and all the estate, right, title, interest, property,
possession, claim and demand whatsoever at law or in equity, of Borrower of, in
and to the same; reserving to Borrower only the right to collect the same as
long as no default or event of default as defined in Paragraph 2.1 shall have
occurred; and
E. All insurance policies and proceeds thereof, contracts,
permits, licenses, plans or intangibles now or hereafter dealing with, affecting
or concerning the Property, including, without limitation, all rights accruing
to Borrower from any and all contracts with all contractors, architects,
engineers or subcontractors relating to the construction of improvements on or
upon the Property, including payment, performance and/or materialmen's bonds and
any other related choices in action;
TO HAVE AND TO HOLD the Property and all parts, rights,
members, and appurtenances thereof, for the use, benefit and behoof of Mortgagee
and the successors and
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assigns of Mortgagee, IN FEE SIMPLE forever; and Borrower covenants that
Borrower is lawfully seized and possessed of the Property as aforesaid, and has
good right to convey and mortgage the same, that the same are unencumbered
except as to those matters expressly set forth in Exhibit B, attached hereto and
incorporated herein by this reference (hereafter referred to as the "Permitted
Exceptions"), and that Borrower does warrant and will forever defend the title
thereto against the claims of all persons whomsoever, except as to the Permitted
Exceptions.
This instrument is given to secure the payment of the
following in such manner as Mortgagee in its sole discretion shall determine
(hereafter collectively referred to as the "Indebtedness"):
A. All payment and performance obligations of Borrower under
that certain Reimbursement Agreement dated the 22nd day of December, 1999 by and
between Borrower and Mortgagee in connection with Mortgagee's issuance of a
Letter of Credit in the amount of $3,346,312 for the account of Borrower
(hereafter referred to as the "Agreement") together with any and all renewals,
extensions, substitutions, modifications and consolidations of the indebtedness
arising from the Agreement;
B. Any and all additional advances made by Mortgagee to
protect or preserve the Property or the security title or interest created
hereby on the Property, or for taxes, assessments or insurance premiums as
hereafter provided, or for performance of any of Borrower's obligations
hereunder, or for any other purpose provided herein (whether or not the original
Borrower remains the owner of the Property at the time of such advances),
provided, however, nothing herein shall be deemed to obligate Mortgagee to make
any such advances;
C. Any and all obligations and covenants of Borrower under any
other document, instrument or agreement now or hereafter evidencing, securing or
otherwise relating to the Agreement secured hereby (the Agreement, the Letter of
Credit issued pursuant to the Agreement, this Mortgage, the Assignment of Leases
and Rents, the Assignment and Subordination of Master Lease, the Environmental
Indemnity Agreement, the UCC Financing Statements, the Borrower's Affidavit
[each of the foregoing being dated of even date herewith], and the Commitment
between Borrower and Firstar Bank, N.A. dated October 15, 1999 [hereafter
referred to as the "Commitment"] and all of such other documents, instruments
and agreements are hereafter sometimes referred to collectively as the "Letter
of Credit Documents"), and all costs of collection, including reasonable
attorneys' fees.
Provided, always, and it is the true intent and meaning of the
parties, that when Borrower shall pay or cause to be paid to Mortgagee, its
successors or assigns, the Indebtedness according to the conditions and
agreements of the Agreement and of this Mortgage and shall keep, perform and
observe all of the covenants, obligations and agreements contained in the Letter
of Credit Documents, all without delay, as required thereunder and hereunder,
then this Mortgage shall cease, terminate and be null and void; otherwise this
Mortgage shall remain in full force and effect.
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213
Borrower hereby further covenants and agrees with Mortgagee
as follows:
1.1 Payment of Indebtedness, Covenants and Warranties.
A. Borrower will pay the sums required by the Agreement
according to the terms thereof and will pay all other sums now or hereafter
secured hereby at the time and in the manner provided under the Agreement, this
Mortgage, any instrument evidencing a future advance and any other Letter of
Credit Document and Borrower will otherwise perform, comply with and abide by
each and every of the stipulations, agreements, conditions and covenants
contained in the Agreement, this Mortgage and every other Letter of Credit
Document, the Bond Documents ( as defined in the Agreement) and any lease or
other agreement with respect to the Property to which Borrower is a party. The
final maturity date of this Mortgage shall be December 31, 2006.
B. Borrower shall protect, indemnify and hold Mortgagee
harmless from and against all liabilities, obligations, claims, damages,
penalties, causes of action, costs, and expenses (including, without limitation,
attorneys' fees and court costs) imposed upon or incurred by Mortgagee by reason
of this Mortgage or in exercising, performing, enforcing, or protecting its
rights, title, or interests set forth herein, and any claim or demand whatsoever
which may be asserted against Mortgagee by reason of any alleged obligation or
undertaking to be performed or discharged by Mortgagee under this Mortgage. In
addition, Borrower covenants and agrees that it shall:
[1] not initiate, join in or consent to any change in any
covenant, easement, or other public or private restriction, limiting or defining
the uses which may be made of the Property, or any part thereof, without
Mortgagee's prior written consent;
[2] not take any action or fail to take any action which will
result in any imposition affecting the Property, Borrower, the Agreement or this
Mortgage;
[3] indemnify and hold Mortgagee harmless from any and all
costs, damages or liabilities resulting from, arising out of, or related to, the
creation or existence of liens, impositions or encumbrances by or against
Borrower or Borrower's predecessor in title, or the Property;
Borrower hereby represents, warrants, and agrees as follows:
[1] Borrower has neither done any act nor failed to do any act
which might prevent Mortgagee from, or limit Mortgagee in, acting under any of
the provisions of this Mortgage;
[2] neither the execution and delivery of this Mortgage, nor
the performance of each and every covenant of Borrower under this Mortgage, nor
the satisfaction of each and every condition contained in this Mortgage,
conflicts with, or constitutes a breach or default under, any agreement,
indenture, or other instrument to which Borrower is a party or is
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214
subject, or any law, ordinance, administrative regulation, or court decree which
is applicable to Borrower;
[3] no action has been brought or, to the best of Borrower's
knowledge, is threatened, which would interfere in any way with the right of
Borrower to execute this Mortgage and perform all of Borrower's obligations
contained in this Mortgage;
[4] this Mortgage, the Agreeement and the Letter of Credit
Documents, constitute legal, valid and binding obligations of Borrower,
enforceable against Borrower in accordance with their terms;
[5] the financial statements submitted with the Commitment,
and the representations and warranties of Borrower contained in this Mortgage,
the Agreement and the Letter of Credit Documents, are true and correct as of the
date of this Mortgage;
[6] there is no litigation, arbitration, investigation, or
administrative proceeding of or before any court, arbitrator or governmental
authority, pending or threatened [a] by or against Borrower, [b] with respect to
or against the Property, [c] with respect to the Letter of Credit Documents, or
[d] which could have a material adverse affect on the business, operations,
property, or general condition of Borrower, or any principal of Borrower;
[7] the Property is in full compliance with all standards and
requirements specified under or required by Title III of the Americans With
Disabilities Act of ▇▇▇▇ (▇▇▇ "▇▇▇"), ▇▇ ▇.▇.▇.▇. ▇▇▇▇▇, et seq., including but
not limited to all applicable Accessibility Guidelines and any other regulations
promulgated thereunder; and
[8] Borrower has tested the components of all building systems
at the Property (including but not limited to HVAC, lighting, elevators,
security, mechanical, electrical and plumbing) and those components have been
determined to be capable of correctly and accurately processing, providing or
receiving data from, into and between the years 1999 and 2000 and beyond and the
building systems will not operate abnormally or inaccurately or cease to operate
as a result of the inability to correctly and accurately process, provide or
receive data from, into and between the 20th and 21st centuries and the years
1999 and 2000 and beyond.
1.2 Taxes, Liens and Other Charges
A. In the event of the passage of any law, order, rule or
regulation subsequent to the date hereof, in any manner changing or modifying
the taxation of mortgages or security agreements or debts secured thereby or the
manner of collecting taxes so as to affect Mortgagee adversely, Borrower shall
promptly pay any such tax on or before the due date thereof. If Borrower fails
to make such prompt payment or if, in the opinion of Mortgagee, any such law,
order, rule or regulation prohibits Borrower from making such payment or would
penalize Mortgagee if Borrower makes such payment or if, in the opinion of
Mortgagee, the making of such payment might result in the imposition of interest
beyond the maximum amount permitted by applicable law, then the entire balance
of the Indebtedness secured by this Mortgage and all accrued interest thereon
shall, at the option of Mortgagee, become immediately due and payable.
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215
B. Borrower shall pay, before the due date thereof, all taxes,
levies, license fees, permit fees, liens, judgments, assessments and all other
expenses, fees and charges (in each case whether general or special, ordinary or
extraordinary, or foreseen or unforeseen) of every character whatsoever now or
hereafter levied, assessed, confirmed or imposed on, or with respect to, or
which may be a lien upon, the Property, or any part thereof, or any estate,
right, or interest therein, or upon the rents, issues, income or profits
thereof, or incurred in connection with the Agreement, the Indebtedness or any
of the Letter of Credit Documents, and all premiums on policies of insurance
covering, affecting, or relating to the Property, as required pursuant to
Paragraph 1.3 hereof, and shall submit to Mortgagee such evidence of the due and
punctual payment of all such taxes, assessments, insurance premiums and other
fees and charges as Mortgagee may require.
C. Borrower shall not suffer any mechanic's, materialman's,
laborer's, statutory or other lien to be created, filed of record or to remain
outstanding upon all or any part of the Property.
1.3 Insurance.
A. Borrower shall, at its expense, procure for, deliver to and
maintain for the benefit of Mortgagee until the Indebtedness is fully repaid,
original, fully paid insurance policies (or if such policy is a "blanket" policy
which includes land, improvements, personalty, or income other than the Property
or income derived from the Property, a certified copy of such blanket policy and
an original certificate from the insurer evidencing the allocation of coverage
to the Property and the income from the Property), providing the following types
of insurance relating to the Property, issued by insurance companies with a
Best's rating of A VI or better, in such amounts, in such form and content and
with such expiration dates as are approved by Mortgagee, in Mortgagee's sole
discretion, such policies to provide that the insurer shall give Mortgagee at
least thirty (30) days' prior written notice of cancellation, amendment,
non-renewal or termination, in the manner provided for the giving of notices
under Paragraph 3.5 hereof and to provide that no act done or omission by the
insured shall invalidate or diminish the insurance provided to Mortgagee and,
except for liability policies, to contain a standard Mortgagee clause
satisfactory to Mortgagee:
[1] Broad form property insurance against all risks of
physical loss, including, without limitation, fire, extended coverage,
vandalism, malicious mischief, earthquake, flood, and collapse, with waiver of
subrogation, to the extent of the full replacement cost of the improvements to
the Property, without deduction for depreciation, either without co-insurance
requirements or with agreed amount endorsement attached;
[2] Public liability insurance covering all liabilities
incident to the ownership, possession, occupancy and operation of the Property
and naming Mortgagee as an additional insured thereunder, having limits of not
less than $2,000,000 each accident, $2,000,000 each person, and $1,000,000
property damage. Mortgagee reserves the right to require increased coverage
under this Subparagraph [2];
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[3] Rent or business interruption insurance against
loss of income arising out of any hazard against which the Property is required
to be insured under this Section 1.3, in an amount not less than six months
gross rental income from the Property; and
[4] Flood hazard insurance if the Property is in a
special flood hazard area.
[5] Such other insurance with respect to the Property
or any replacements or substitutions therefor, in such amounts as may from time
to time be required by Mortgagee, against other insurable casualties which at
the time are commonly insured against in the case of properties of similar
character.
B. Borrower covenants and agrees that Mortgagee is hereby
authorized and empowered, at its option, to adjust, compromise or settle any
loss under any insurance policies maintained pursuant hereto, and to collect and
receive the proceeds from any policy or policies. Each insurance company is
hereby authorized and directed to make payment for all such losses directly to
Mortgagee, instead of to Borrower and Mortgagee jointly. In the event any
insurance company fails to disburse directly and solely to Mortgagee but
disburses instead either solely to Borrower or to Borrower and Mortgagee
jointly, Borrower agrees immediately to endorse and transfer such proceeds to
Mortgagee. Upon the failure of Borrower to endorse and transfer such proceeds as
aforesaid, Mortgagee may execute such endorsements or transfers for and in the
name of Borrower, and Borrower hereby irrevocably appoints Mortgagee as its
agent and attorney-in-fact to do so. After deducting from said insurance
proceeds all of its expenses incurred in the collection and administration of
such sums, including attorneys' fees, Mortgagee may apply the net proceeds or
any part thereof, at its sole option [i] to a prepayment of the obligations
under the Agreement without prepayment premium or penalty, [ii] to the repair
and/or restoration of the Property, upon such conditions as Mortgagee may
determine, and/or [iii] for any other purposes or objects for which Mortgagee is
entitled to advance funds under this Mortgage, all without reducing or impairing
the lien of this Mortgage or any obligations secured hereby. Any balance of such
proceeds then remaining shall be paid to Borrower or any other person or entity
lawfully entitled thereto.
Notwithstanding the foregoing, Mortgagee shall release the net
insurance proceeds to Borrower to be utilized by Borrower for the repair,
rebuilding, or restoration of the improvements to the Property to as good or
better condition as such improvements were in immediately prior to any casualty
on account of which such proceeds are paid (the "Restoration"), provided that
such net proceeds shall be released upon fulfillment of the following conditions
to the satisfaction of Mortgagee, Mortgagee exercising its sole discretion:
[1] Mortgagee shall have determined that the
improvements to the Property can be restored to as good or better
condition as such improvements were in immediately prior to the
casualty on account of which such proceeds were paid;
[2] Mortgagee shall have determined that such net
proceeds, together with any funds paid by Borrower to Mortgagee, shall
be sufficient to complete the Restoration;
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[3] No default, and no event or failure which, with
the passage of time or the giving of notice, would constitute a default
under the Agreement, this Mortgage, the Bond Documents (as defined in
the Agreement) or any of the Letter of Credit Documents, shall have
occurred;
[4] Such casualty shall have occurred prior to the
first day of the calendar year during which the Letter of Credit is
scheduled to expire;
[5] The value of the Property as determined by
Mortgagee shall be sufficient so that the Loan does not exceed 65% of
the amount available for draw under the Letter of Credit and so that
net rental revenue from the Property, after payment of operating
expenses, is sufficient, as determined by Lender, to establish a debt
service coverage ratio of 1.25 to 1.0 with respect to all debt secured
by the Property; and
[6] Mortgagee shall have approved the plans and
specifications to be used in connection with the Restoration and shall
have received written evidence, satisfactory to Mortgagee, that such
plans and specifications have been approved by all governmental and
quasi-governmental authorities having jurisdiction and by all other
persons or entities required to approve such plans and specifications.
Net proceeds in excess of the amount necessary to
complete the Restoration shall, at the option of Mortgagee, be applied to the
outstanding Indebtedness, in such order as Mortgagee may determine in its sole
discretion.
If, within a reasonable period of time after the
occurrence of any casualty, Borrower shall not have submitted to Mortgagee, and
received Mortgagee's approval of, plans and specifications for the Restoration
or shall not have obtained approval of such plans and specifications from all
governmental authorities and other persons and entities whose approval is
required, or if Borrower shall fail to commence promptly such Restoration, or if
thereafter Borrower fails to carry out diligently such Restoration or is
delinquent in the payment to mechanics, materialmen or others for the costs
incurred in connection with such Restoration, or if Mortgagee determines that
any other condition of this paragraph is not satisfied within a reasonable
period of time after the occurrence of any such loss or damage, then in addition
to all other rights herein set forth, at Mortgagee's option [x] Mortgagee may
declare that an Event of Default has occurred and/or [y] Mortgagee may dispose
of such net proceeds as provided in this Paragraph 1.3B and/or [z] Mortgagee, or
any lawfully appointed receiver of the Property may, but shall not be obligated
to, perform or cause to be performed such Restoration and may take such other
steps as they deem advisable to carry out such Restoration and may enter upon
the Property for any of the foregoing purposes, and Borrower hereby waives, for
itself and all others holding under it, any claim against Mortgagee and such
receiver (other than a claim based upon the alleged gross negligence or
intentional misconduct of Mortgagee or any such receiver) arising out of
anything done by them or any of them pursuant to this Paragraph 1.3B and
Mortgagee may, in its discretion apply any insurance proceeds held by it to
reimburse itself and/or such receiver for all amounts expended or incurred in
connection with the performance of such Restoration, including attorneys' fees,
and any excess costs shall be paid by Borrower to
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Mortgagee and Borrower's obligation to pay such excess costs shall be secured by
the lien of this Mortgage and shall bear interest at the default rate set forth
in the Agreement, until paid.
C. At least twenty (20) days prior to the expiration date of
each policy maintained pursuant to this Paragraph 1.3, a renewal or replacement
thereof satisfactory to Mortgagee shall be delivered to Mortgagee. Borrower
shall deliver to Mortgagee receipts evidencing the full payment of premiums for
all such insurance policies and renewals or replacements. The delivery of any
insurance policies hereunder shall constitute an assignment of all unearned
premiums as further security hereunder. In the event of the foreclosure of this
Mortgage or any other transfer of title to the Property in extinguishment or
partial extinguishment of the Indebtedness, all right, title and interest of
Borrower in and to all insurance policies maintained pursuant to this Paragraph
1.3 then in force shall belong to the purchaser and Mortgagee is hereby
irrevocably appointed by Borrower as attorney-in-fact for Borrower to assign any
such policy to said purchaser, without accounting to Borrower for any unearned
premiums therefor.
1.4 Condemnation. If all or any portion of the Property shall be
damaged or taken through condemnation (which term when used in this Mortgage
shall include any damage or taking by any governmental or quasi-governmental
authority and any transfer or grant by private sale made in anticipation of or
in lieu thereof), either temporarily or permanently, then the entire
Indebtedness shall, at the option of Mortgagee, become immediately due and
payable without prepayment premium and without notice to Borrower or any other
person or entity. Promptly upon learning of the institution or the proposed,
contemplated or threatened institution of any condemnation proceeding, Borrower
shall notify Mortgagee of the pendency of such proceedings, and no settlement
respecting awards in such proceedings shall be effected without the consent of
Mortgagee. Mortgagee shall be entitled to receive all compensation, awards,
proceeds and other payments or relief relating to or payable as a result of such
condemnation. Mortgagee is hereby authorized, at its option, to commence, appear
in and prosecute, in its own or in the name of Borrower, any action or
proceeding relating to any condemnation, and to settle or compromise any claim
in connection therewith. All such compensation, awards, damages, claims, rights
of action and proceeds and the right thereto are hereby assigned by Borrower to
Mortgagee. If Mortgagee does not elect to declare the entire Indebtedness
immediately due and payable, as provided above, then Mortgagee, after deducting
from said condemnation proceeds all of its expenses incurred in the collection
and administration of such sums, including, without limitation, attorneys' fees,
may apply the net proceeds or any part thereof, at its option, [i] to a
prepayment of the Agreement, without prepayment premium, [ii] to the repair
and/or restoration of the Property upon such conditions as Mortgagee may
determine, and/or [iii] for any other purposes or objects for which Mortgagee is
entitled to advance funds under this Mortgage, all without reducing or impairing
the lien of this Mortgage or any obligations secured hereby. Any balance of such
moneys then remaining shall be paid to Borrower or any other person or entity
lawfully entitled thereto. Mortgagee shall not be obligated to see to the proper
application of any amount paid over to Borrower. Borrower agrees to execute such
further assignment of any compensation, awards, damages, claims, rights of
action and proceeds as Mortgagee may require. If, prior to the receipt by
Mortgagee of such award or proceeds, the Property shall have been sold on
foreclosure of this Mortgage, or as a result of other legal action relating to
this
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Mortgage or the Agreement, Mortgagee shall have the right to receive such
award or proceeds to the extent of any unpaid Indebtedness following such sale,
with legal interest thereon, whether or not a deficiency judgment on this
Mortgage or the Agreement shall have been sought or recovered, and to the extent
of attorneys' fees, costs and disbursements incurred by Mortgagee in connection
with the collection of such award or proceeds.
Notwithstanding the foregoing, Mortgagee shall release the net
proceeds of any award paid to it for any taking of a portion of the Property to
Borrower to be utilized by Borrower in the restoration of the Property and the
improvements thereon to as good or better condition as existed immediately prior
to such taking, to the extent possible in light of the taking (the
"Restoration"), provided that such net proceeds shall be released upon such
conditions as Mortgagee shall determine, including fulfillment of the following
conditions to the satisfaction of Mortgagee, Mortgagee exercising its sole
discretion:
[1] Mortgagee shall have determined that the Property
and the improvements thereon can be restored to as good or better condition as
existed immediately prior to such taking, taking into account diminution of the
Property as a result of such taking;
[2] Mortgagee shall have determined that such net
proceeds, together with any funds paid by Borrower to Mortgagee, shall be
sufficient to complete the Restoration;
[3] No default, and no event or failure which, with
the passage of time or the giving of notice, would constitute a default under
the Agreement, this Mortgage, the Bond Documents (as defined in the Agreement)
or any of the Letter of Credit Documents, shall have occurred;
[4] Such taking shall have occurred prior to the
first day of the calendar year during which the Letter of Credit is scheduled to
expire;
[5] The remaining Property shall comply with all
applicable land use, zoning and subdivision regulations and all parking
requirements under all Leases;
[6] The value of the Property as determined by
Mortgagee shall be sufficient so that the Loan does not exceed 65% of the amount
available for draw under the Letter of Credit and so that net rental revenue
from the Property, after payment of operating expenses, is sufficient, as
determined by Lender, to establish a debt service coverage ratio of 1.25 to 1.0
with respect to all debt secured by the Property; and
[7] Mortgagee shall have approved the plans and
specifications to be used in connection with the Restoration and shall have
received written evidence, satisfactory to Mortgagee, that such plans and
specifications have been approved by all governmental and quasi-governmental
authorities having jurisdiction and by all other persons or entities required to
approve such plans and specifications.
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Net proceeds in excess of the amount necessary to complete the
Restoration shall, at the option of Mortgagee, be applied to the outstanding
Indebtedness, in such order as Mortgagee may determine in its sole discretion.
If, within a reasonable period of time after the occurrence of
any such taking, Borrower shall not have submitted to Mortgagee, and received
Mortgagee's approval of, plans and specifications for the Restoration or shall
not have obtained approval of such plans and specifications from all
governmental authorities and other persons and entities whose approval is
required, or if Borrower shall fail to commence promptly such restoration, or if
thereafter Borrower fails to carry out diligently such Restoration or is
delinquent in the payment to mechanics, materialmen or others for the costs
incurred in connection with such Restoration, or if Mortgagee determines that
any other condition of this paragraph is not satisfied within a reasonable
period of time after the occurrence of any such taking, then in addition to all
other rights herein set forth, at Mortgagee's option [x] Mortgagee may declare
that an Event of Default has occurred and/or [y] Mortgagee may dispose of such
net proceeds as provided in this Paragraph 1.4 and/or [z] Mortgagee, or any
lawfully appointed receiver of the Property may, but shall not be obligated to,
perform or cause to be performed such Restoration and may take such other steps
as they deem advisable to carry out such Restoration, and may enter upon the
Property for any of the foregoing purposes, and Borrower hereby waives, for
itself and all others holding under it, any claim against Mortgagee and such
receiver (other than a claim based upon the alleged gross negligence or
intentional misconduct of Mortgagee or any such receiver) arising out of
anything done by them or any of them pursuant to this Paragraph 1.4 and
Mortgagee may, in its discretion apply any such net proceeds held by it to
reimburse itself and/or such receiver for all amounts expended or incurred in
connection with the performance of such Restoration, including attorneys' fees,
and any excess costs shall be paid by Borrower to Mortgagee and Borrower's
obligation to pay such excess costs shall be secured by the lien of this
Mortgage and shall bear interest at the default rate set forth in the Agreement,
until paid.
1.5 Care of Property.
A. Borrower shall keep all improvements of any kind now or
hereafter erected on the Land or any part thereof in good condition and repair,
shall not commit or suffer any waste, and shall not do or suffer to be done
anything which would or could increase the risk of fire or other hazard to the
Property or any part thereof or which would or could result in the cancellation
of any insurance policy carried with respect to the Property.
B. Borrower shall not remove, demolish or materially alter,
enlarge or change any structure or other improvement located on the Land without
Mortgagee's consent, nor shall any new improvements be constructed on the
Property without Mortgagee's consent. Borrower shall not remove or permit to be
removed from the Land any fixture, chattel or part of the Property without the
consent of Mortgagee, except where appropriate replacements are immediately made
which are free of any lien, security interest or claim superior to that of this
Mortgage and which have a value and utility at least equal to the value and
utility of the fixture or chattel removed, which replacement shall, without
further action, become subject to the lien of this Mortgage.
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C. Mortgagee or its representative is hereby authorized to
enter upon and inspect the Property at all reasonable times.
D. Borrower will perform and comply promptly with, and cause
the Property to be maintained, used and operated in accordance with, any and all
[i] present and future laws, ordinances, rules, and regulations, including
without limitation, all applicable federal, state and local laws pertaining to
air and water quality, hazardous waste, waste disposal, air emissions and other
environmental matters, all zoning and other land use matters, and rules,
regulations and ordinances of the United States Environmental Protection Agency
and all other applicable federal, state and local agencies and bureaus; [ii]
policies of insurance at any time in force with respect to the Property. If
Borrower receives any notice that Borrower or the Property is in default under
or is not in compliance with any of the foregoing, or notice of any proceeding
initiated under or with respect to any of the foregoing, Borrower will promptly
furnish a copy of such notice to Mortgagee.
E. If all or any part of the Property shall be damaged by fire
or other casualty, Borrower shall give immediate written notice thereof to
Mortgagee and shall promptly restore the Property to the equivalent of its
original condition; and if a part of the Property shall be damaged through
condemnation, Borrower shall promptly restore, repair or alter the remaining
portions of the Property in a manner satisfactory to Mortgagee. In the event all
or any portion of the Property shall be damaged or destroyed by fire or other
casualty or by condemnation, Borrower shall promptly deposit with Mortgagee a
sum equal to the amount by which the estimated cost of the restoration of the
Property, as determined by Mortgagee, exceeds the actual net insurance or
condemnation proceeds received by Mortgagee in connection with such damage or
destruction.
1.6 Security Agreement.
A. With respect to any of the machinery, apparatus, equipment,
fittings, fixtures, building supplies and materials, articles of personal
property, chattels, chattel paper, documents, inventory, accounts, receivables,
revenues from the use of the Property or facilities thereon, farm products,
water rights, consumer goods and general intangibles or other property or rights
described in granting clauses B through E in this Mortgage or in any way
connected with the use and enjoyment of the Property, including any personal
property or fixtures included within the definition of the term "Property"
(other than any personal property which may be now or hereafter deemed to be
toxic or Hazardous Materials) whether now owned or hereafter from time to time
acquired, together with all substitutions, replacements, additions, attachments,
accessories and all of the rents, issues, income, revenues, receivables,
accounts, security deposits and profits derived from the Property (hereafter
collectively referred to as the "Collateral"), this Mortgage is hereby also made
and declared to be a security agreement encumbering each and every item of such
property comprising a part of the Collateral, in compliance with the provisions
of the Uniform Commercial Code as enacted in the state where the Land is
located, and Borrower hereby grants Trustee, for the benefit of Mortgagee a
security interest in all such property. Upon request by Mortgagee, at any time
and from time to time, a financing statement or statements reciting this
Mortgage to be a security agreement affecting all of such property shall be
executed by Borrower and Mortgagee and appropriately filed. The remedies for any
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violation of the covenants, terms and conditions of the security agreement
contained in this Mortgage shall include, but not be limited to those [i]
prescribed herein, or [ii] prescribed by general law, or [iii] prescribed by the
specific statutory consequences now or hereafter enacted and specified in said
Uniform Commercial Code, all at Mortgagee's sole election. Said security
interest shall attach thereto as soon as Borrower obtains any interest in any of
the Collateral and before the Collateral becomes fixtures or before the
Collateral is installed or affixed to other collateral for the benefit of
Mortgagee, to secure the Indebtedness, and all other sums and charges which may
become due hereunder or thereunder. The security interest held by Mortgagee
shall cover cash and non-cash proceeds of the Collateral, but nothing contained
herein shall be construed as authorizing, either expressly or by implication,
the sale or other disposition of the Collateral by Borrower, which sale or other
disposition is hereby expressly prohibited without the Mortgagee's prior written
consent, or as otherwise provided herein. No personal property or business
equipment owned by any Tenants (as hereafter defined) holding under Borrower is
included within this Mortgage, except to the extent of Borrower's landlord's
lien with respect thereto.
In the event of default under this Mortgage, Mortgagee,
pursuant to said Uniform Commercial Code, shall have the option of proceeding as
to both real and personal property in accordance with its rights and remedies in
respect of the real property, in which event the default provisions of the
Uniform Commercial Code shall not apply. The parties agree that, in the event
Mortgagee elects to proceed with respect to the Collateral separately from the
real property, the requirement of the Uniform Commercial Code as to reasonable
notice of any proposed sale or disposition of the Collateral shall be met if
such notice is mailed to the Borrower, as hereafter provided, at least five (5)
days prior to the time of such sale or disposition. Borrower agrees that,
without the prior written consent of Mortgagee, Borrower will not remove or
permit to be removed from the real property hereby conveyed, any of the
Collateral unless the same is replaced immediately with unencumbered collateral
of a quality and value equal or superior to that which it replaces. All such
replacements, renewals and additions shall become and be immediately subject to
the security interest of this Mortgage and be covered thereby. Borrower warrants
and represents that all Collateral now is, and that all replacements thereof,
substitutions therefor or additions thereto will be, free and clear of liens,
encumbrances or security interests of others, except as to the Permitted
Exceptions.
B. Borrower warrants that [i] Borrower's (that is, "Debtor's")
name, identity, and principal place of business are as referred to in the first
paragraph of this Mortgage, [ii] Borrower (that is, "Debtor") has been using or
operating under said name and identity without change since January 1, 1994, and
[iii] the location of all tangible collateral is upon the Land. Borrower
covenants and agrees that Borrower will furnish Mortgagee with notice of any
change in the matters addressed by clauses [i] or [iii] of this Subparagraph
1.6B within thirty (30) days of the effective date of any such change, and
Borrower will promptly execute any financing statements or other instruments
deemed necessary by Mortgagee to prevent any filed financing statement from
becoming misleading or losing its perfected status.
C. Some of the items of property described herein are goods
that are or are to become fixtures related to the real estate described herein,
and it is intended that, as to those goods, this Mortgage and Security Agreement
shall be effective as a financing statement filed as
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a fixture filing from the date of its filing for record in the real estate
records of the county in which the Land is located. Information concerning the
security interest created by this instrument may be obtained from the Mortgagee,
as "Secured Party," or Borrower, as "Debtor," at their respective mailing
addresses set out in Paragraph 3.5 hereof.
D. Borrower further covenants and agrees that all of the
aforementioned personal property shall be owned by Borrower and shall not be the
subject matter of any lease or other instrument, agreement or transaction
whereby the ownership or beneficial interest thereof or therein shall be held by
any person or entity other than Borrower, except to the extent Mortgagee
consents in writing to any lease of any of such property, which consent may be
withheld or delayed in Mortgagee's sole discretion; nor shall Borrower create or
cause to be created any security interest covering any such property, other than
[i] the security interest created herein in favor of Mortgagee, [ii] the rights
of tenants lawfully occupying the Property pursuant to leases approved by
Mortgagee, and [iii] the Permitted Exceptions.
1.7 Further Assurances; After-Acquired Property. At any time, and from
time to time, at Borrower's expense and upon request by Mortgagee, Borrower
shall make, execute and deliver or cause to be made, executed and delivered, to
Mortgagee and, where appropriate, cause to be recorded and/or filed and from
time to time thereafter to be re-recorded and/or refiled at such time and in
such offices and places as shall be deemed desirable by Mortgagee, any and all
such other and further deeds to secure debt, mortgages, deeds of trust, security
agreements, financing statements, continuation statements, instruments of
further assurances, certificates and other documents as may, in the opinion of
Mortgagee, be necessary or desirable in order to effectuate, complete or
perfect, or to continue and preserve, [i] the obligations of Borrower described
in the Agreement and under this Mortgage and [ii] the lien of this Mortgage as a
first and prior lien upon and security interest in and to all of the Property,
whether now owned or hereafter acquired by Borrower, subject only to the
Permitted Exceptions. Upon any failure by Borrower so to do, Mortgagee may make,
execute, record, file, re-record and/or refile any and all such deeds to secure
debt, mortgages, deeds of trust, security agreements, financing statements,
continuation statements, instruments, certificates and documents for and in the
name of Borrower, and Borrower hereby irrevocably appoints Mortgagee the agent
and attorney-in-fact of Borrower so to do. The lien and security interest hereof
shall automatically attach, without further act, to all after-acquired property
attached to and/or used in the operation of the Property or any part thereof, to
the extent permitted by law.
1.8 Expenses. Borrower shall indemnify Mortgagee and hold Mortgagee
harmless from and against, and pay or reimburse Mortgagee, upon demand therefor,
for all attorneys' fees, costs and expenses incurred by Mortgagee in any suit,
action, legal proceeding or dispute of any kind in which Mortgagee is made a
party or appears as a party plaintiff or defendant, affecting the Indebtedness,
this Mortgage, or the interest created herein, or the Property, including,
without limitation, any foreclosure proceedings, any condemnation action
involving the Property, any federal bankruptcy proceeding or state insolvency
proceeding involving the priorities or rights of creditors, any action to
protect the security hereof, or any action or proceeding commenced by
governmental authority with respect to the storage, disposal or clean-up of
toxic or Hazardous Materials on, under or about the Property; and any such
amounts paid by Mortgagee shall be
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added to the Indebtedness secured by the lien of this Mortgage and shall bear
interest from and after the date when paid at the default rate in effect under
the Agreement.
1.9 Subrogation. To the full extent of the Indebtedness, Mortgagee is
hereby subrogated to the liens, claims and demands, and to the rights of the
owners and holders of each lien, claim, demand and other encumbrance on the
Property which is paid or satisfied, in whole or in part, out of the proceeds of
the Indebtedness, and the respective liens, claims, demands and other
encumbrances shall be, and each of them is hereby, preserved and shall pass to
and be held by Mortgagee as additional collateral and further security for the
Indebtedness, to the same extent they would have been preserved and would have
been passed to and held by Mortgagee had they been duly and legally assigned,
transferred, set over and delivered unto Mortgagee by assignment,
notwithstanding the fact that any instrument providing public notice of the same
may be satisfied and canceled of record.
1.10 Transfer of the Property; Secondary Financing.
A. The identity and expertise of Borrower were and continue to
be material circumstances upon which Mortgagee has relied in connection with,
and which constitute valuable consideration to Mortgagee for, extending the
Indebtedness to Borrower, and any change in such identity or expertise could
materially impair or jeopardize the security for the payment of the
Indebtedness. Borrower covenants and agrees with Mortgagee, as part of the
consideration for extending the Indebtedness to Borrower, that without
Mortgagee's prior written consent, Borrower shall not, voluntarily or by
operation of law: [i] sell, transfer, convey, pledge, encumber, assign or
otherwise hypothecate or dispose of, all or any part of the Property or any
interest therein whether or not as collateral security for any other obligation
of Borrower; [ii] (if Borrower is a corporation, partnership, trust, or other
entity) sell, transfer, encumber or otherwise dispose of voting control or more
than fifty percent (50%) of the financial interest in Borrower or change its
general partners; nor [iii] cause or permit any junior encumbrance or lien to be
placed on the Property or other security for the Indebtedness. Any purported
transaction in violation of the foregoing shall be void and shall entitle
Mortgagee to declare the entire Indebtedness immediately due and payable without
notice or demand. Such consent may be given or withheld by Mortgagee in its sole
discretion and may be conditioned upon payment to Mortgagee of a fee for
processing the request for consent and other administrative costs incurred in
connection therewith, and/or an increase in the rate of interest on the unpaid
balance of the Indebtedness to a then current market rate, and/or a change in
the term of the Agreement, and/or other changes in the terms of the Letter of
Credit Documents, all of which Borrower hereby agrees are reasonable conditions
to the approval of any such transfer. In all events, if Mortgagee consents to
any such sale, transfer, conveyance, pledge, encumbrance, assignment,
hypothecation or disposition, at the option of Mortgagee the manager of the
Property shall remain the same before and after the transfer and the transferee
shall be a creditworthy person or entity of sound financial reputation.
B. The consent by Mortgagee to any sale, transfer, conveyance,
pledge, encumbrance, assignment, creation of a security interest in or other
hypothecation or disposition of the Property or the beneficial interests of
Borrower shall not be deemed to constitute a novation of the Indebtedness or a
consent to any further sale, transfer, pledge, encumbrance, creation of a
security interest or other hypothecation or disposition, or to waive Mortgagee's
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right, at its option, to exercise its remedies for default, without notice to or
demand upon Borrower or to any other person or entity upon any such sale,
transfer, pledge, encumbrance, creation of a security interest in or other
hypothecation, or disposition to which Mortgagee shall not have consented.
1.11 Limit on Interest. If from any circumstances whatsoever,
fulfillment of any provision of this Mortgage, the Reimbursement Agreement or
any other Letter of Credit Document, at the time performance of such provision
shall be due shall involve transcending the limit on interest presently
prescribed by any applicable usury statute or any other applicable law, with
regard to obligations of like character and amount, then Mortgagee may, at its
option [i] reduce the obligations to be fulfilled to such limit on interest, or
[ii] apply the amount that would exceed such limit on interest to the reduction
of the outstanding principal balance due under the Reimbursement Agreement, and
not to the payment of interest, with the same force and effect as though
Borrower had specifically designated such sums to be so applied to principal and
Mortgagee had agreed to accept such extra payment(s) as a premium-free
prepayment, so that in no event shall any exaction be possible under the
Reimbursement Agreement or Mortgage, that is in excess of the applicable limit
on interest. It is the intention of Borrower and Mortgagee not to create any
obligation in excess of the amount allowable by applicable law. The provisions
of this paragraph shall control every other provision of this Mortgage, and any
provision of the Letter of Credit Documents in conflict with this Paragraph
1.11.
1.12 Performance by Mortgagee of Defaults by Borrower. Borrower
covenants and agrees that, if it shall default in the payment of any tax, lien,
assessment, or charge levied or assessed against the Property; in the payment of
any utility charge, whether public or private; in the payment of any insurance
premium; in the procurement of insurance coverage and the delivery of the
insurance policies required hereunder; or in the performance or observance of
any other covenant, condition or term of this Mortgage, then Mortgagee, at its
option, but without obligation and without notice, may pay, perform or observe
the same, and all payments made or costs incurred by Mortgagee in connection
therewith shall be secured hereby and shall be, without demand, immediately
repaid by Borrower to Mortgagee with interest thereon, from the date such
payment is made or expense is incurred by Mortgagee to the date Mortgagee is
reimbursed therefor, at the default rate provided in the Agreement. Mortgagee
shall be the sole judge of the legality, validity and priority of any such tax,
lien, assessment, charge, claim and premium, of the necessity for any such
actions and of the amount necessary to be paid in satisfaction thereof.
Mortgagee is hereby empowered to enter and to authorize others to enter upon the
Property or any part thereof for the purpose of performing or observing any such
defaulted covenant, condition or term without thereby becoming liable to
Borrower or any person in possession of any portion of the Property holding
under Borrower. Borrower expressly acknowledges and agrees, however, that
notwithstanding anything contained in this Paragraph 1.12 to the contrary,
Mortgagee shall not be obligated under this Paragraph 1.12 to incur any expense
or to perform any act whatsoever. Borrower further acknowledges that no
performance by Mortgagee of Borrower's obligations shall cure Borrower's default
or release Borrower from those or any other obligations under this Mortgage.
Borrower hereby indemnifies Mortgagee against any and all costs, liabilities or
damages, arising from or in any way related to the performance of Borrower's
obligations by Mortgagee.
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1.13 Assignment of Leases, Franchise Agreement, Management Contracts
and Rents.
A. As additional collateral and to further secure the
Indebtedness and other obligations of Borrower, Borrower does hereby absolutely,
presently and irrevocably assign, grant, transfer, and convey to Mortgagee, its
successors and assigns, all of Borrower's right, title, and interest in, to, and
under all leases, master leases, subleases, tenant contracts, rental agreements,
agreements for the rental of rooms and facilities at the Property, franchise
agreements, management contracts, construction contracts and other contracts,
licenses and permits, map approvals and conditional use permits, whether written
or oral, now or hereafter affecting all or any part of the Property to the
extent the same is attributable to the ownership and operation of the Property,
together with Borrower's rights as landlord pursuant to any landlord's lien or
as secured party with respect to any security agreement contained in or security
interest granted by any master lease or operating lease. Borrower also
irrevocably assigns, transfers and conveys all of Borrower's right title and
interest in any agreement for the use or occupancy of all or any part of said
Property which may have been made heretofore or which may be made hereafter,
including any and all extensions, renewals, and modifications of the foregoing
and guaranties of the performance or obligations of any tenants thereunder, and
all other arrangements of any sort resulting in the payment of money to Borrower
or in Borrower becoming entitled to the payment of money for the use of the
Property or any part thereof whether such user or occupier is tenant, guest,
invitee, or licensee (all of the foregoing hereafter referred to collectively as
the "Leases" and individually as a "Lease", and said tenants, invitees, and
licensees are hereafter referred to collectively as "Tenants" and individually
as "Tenant" as the context requires), which Leases cover all or portions of the
Property; together with all of Borrower's right, title, and interest in and to
all income, accounts, receivables, rents, issues, royalties, profits, rights and
benefits and all Tenants' security and other similar deposits derived with
respect to the Leases and with respect to the Property, including, without
limitation, all base and minimum rents, percentage rents, additional rents, room
and facility rentals, payments in lieu of rent, expense contributions, and other
similar such payments (hereafter collectively referred to as "Income"), and the
right to collect the same as they become due, it being the intention of the
parties hereto to establish an absolute transfer and assignment of all of the
Leases and the Income to Mortgagee, and not just to create a security interest.
For purposes hereof, the income, rents, royalties, issues, rights and benefits,
etc., which are attributable to the Property shall include the Base Rent (as
defined in the Master Lease as defined below) directly attributable to the Rooms
(as defined in the Master Lease) in the Property and the Percentage Rent (as
defined in the Master Lease) generated by the Property. "Percentage Rent
generated by the Property" means the difference between: (i) Percentage Rent due
and owing utilizing the Percentage Rent calculation set forth in Section 3.1(b)
of the Master Lease using all Rooms for the applicable period; and (ii)
Percentage Rent due and owing utilizing the Percentage Rent calculation set
forth in Section 3.1(b) of the Master Lease using all Rooms for the applicable
period except those Rooms comprising the Property.
B. Borrower hereby represents, warrants, and agrees as
follows:
[1] Borrower is the sole holder of the landlord's
interest under the Leases, is entitled to receive the Income from the Leases and
from the Property (subject to the
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terms of the Master Lease with ▇▇▇▇▇▇▇ Hospitality, Inc. dated May 7, 1999 (the
"Master Lease")), and has the full right to sell, assign, transfer, and set over
the same and to grant to and confer upon Mortgagee the rights, interests,
powers, and authorities herein granted and conferred;
[2] Borrower has made no pledge or assignment of the
Leases or Income, prior to the date hereof, and Borrower shall not, after the
date hereof, make or permit any such pledge or assignment;
[3] Borrower has neither done any act nor failed to
do any act which might prevent Mortgagee from, or limit Mortgagee in, acting
under any of the provisions of this Mortgage;
[4] The Leases are valid, enforceable, and in full
force and effect, and Borrower has delivered to Mortgagee true, complete, and
correct copies of all Leases with respect to the Property or any part thereof;
[5] The Master Lease provides for rental to be paid
monthly and Borrower has not accepted, and shall not, after the date hereof,
accept or permit payment of rental or other Income under any of the Leases for
more than one (l) month in advance of the due date thereof;
[6] No security deposit has been made by any Tenant
under the Master Lease or any other Lease except as set forth in such Lease;
[7] To the best of Borrower's knowledge, there exists
no default or event of default or any state of facts which would or could, with
the passage of time or the giving of notice, or both, constitute a default or
event of default on the part of Borrower or by any Tenant under the terms of the
Master Lease or any of the Leases;
[8] Neither the execution and delivery of this
Mortgage or the Master Lease or any of the Leases, nor the performance of each
and every covenant of Borrower under this Mortgage, the Master Lease and the
Leases, nor the satisfaction of each and every condition contained in this
Mortgage, the Master Lease and the Leases, conflicts with, or constitutes a
breach or default under, any agreement, indenture, or other instrument to which
Borrower is a party or is subject, or any law, ordinance, administrative
regulation, or court decree which is applicable to Borrower;
[9] No action has been brought or, to the best of
Borrower's knowledge, is threatened, which would interfere in any way with the
right of Borrower to execute this Assignment and perform all of Borrower's
obligations contained in this Mortgage and in the Leases; and
C. Borrower hereby covenants and agrees as follows:
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[1] Borrower shall provide Mortgagee with a
fully-executed original counterpart of each Lease, amendment, modification or
alteration thereto;
[2] Borrower shall authorize and direct, and does
hereby authorize and direct, each and every present and future Tenant of the
whole or any part of the Property, including the Lessee under the Master Lease
to pay all rental from the Property to Mortgagee from and after the date of
receipt of written demand from Mortgagee to do so;
[3] Borrower shall [i] fulfill, perform, and observe
each and every condition and covenant of landlord or lessor contained in each of
the Leases; [ii] give prompt notice to Mortgagee of any claim of default under
the Master Lease or any other Leases, whether given by a Tenant to Borrower, or
given by Borrower to a Tenant, together with a complete copy of any such notice;
[iii] at no cost or expense to Mortgagee, enforce, short of termination, the
performance and observance of each and every covenant and condition of the
Master lease or other Leases to be performed or observed by the Tenants
thereunder; [iv] if so requested by Mortgagee, diligently and in good faith
enforce the Master lease and any other Leases and all remedies available to
Borrower against the Tenants in the event of default under any Lease by any
Tenant; [v] if so requested by Mortgagee, diligently and in good faith appear in
and defend any action arising out of, or in any manner connected with, any of
the Master Lease or other Leases, or the obligations or liabilities of Borrower
as the landlord thereunder, or of the Tenant or any guarantors thereunder; and
[vi] execute such additional documents as Mortgagee may require to evidence and
confirm such assignment;
[4] Borrower shall not, without the prior written
consent of Mortgagee, [i] enter into any lease of all or any part of the
Property, [ii] modify, amend, or alter, or agree to the modification, amendment,
or alteration of the Master Lease or any of the Leases; [iii] terminate the
term, accept the surrender of, or otherwise cancel any of the Master Lease or
any of the Leases; [iv] permit the prepayment of any rents under the Master
Lease or any of the Leases or other Income for more than one (l) month prior to
the due date thereof; [vi] discount any future accruing rents under the Master
Lease or other Leases or other Income; [vii] give any consent to any assignment
or sublease by any Tenant under the Master Lease or any of the Leases if such
assignment or subletting would result in the assignor or sublessor being
released from liability under its Lease; [viii] grant any rental concessions in
connection with the Master Lease or any of the Leases; or [ix] assign its
interest in, to, or under the Master Lease or the Leases or Income to any person
or entity other than Mortgagee and any attempt to violate the provisions of this
Subparagraph C shall be void;
[5] Borrower shall take no action that will cause or
permit the estate of any Tenant under the Master Lease or any of the Leases to
merge with the interests of Borrower in the Property or any portion thereof;
[6] Borrower shall protect, indemnify, and hold
Mortgagee harmless from and against all liabilities, obligations, claims,
damages, penalties, causes of action, costs, and expenses (including, without
limitation, attorneys' fees and court costs) imposed upon or incurred by
Mortgagee by reason of this Mortgage or in exercising, performing, enforcing, or
protecting its rights, title, or interests set forth herein, and any claim or
demand whatsoever
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which may be asserted against Mortgagee by reason of any alleged obligation or
undertaking to be performed or discharged by Mortgagee under this Mortgage;
[7] Borrower shall not do, or fail to do, any act if
such action or failure would constitute a violation of the Master Lease or any
of the Leases, or commit any act or omission that may create in any Tenant a
right to cease or reduce payment of rent or terminate its Lease or otherwise
affect or impair the benefits of this Mortgage;
[8] Borrower shall require that any master lease
entered into after the date of this assignment as a replacement or renewal of
the Master Lease will require the Tenant thereunder to execute assignment and
subordination of such Lease; and
D. Although this Mortgage constitutes an absolute, present and
current assignment of all Income from the Property, as long as no default or
event of default as defined in Paragraph 2.1 below, on the part of Borrower
shall have occurred, Mortgagee shall not demand that such Income be paid
directly to Mortgagee, and Borrower shall have a license to collect, but not
more than one (l) month prior to the due date thereof all such Income from the
Property (including, without limitation, all rental payments under the Leases).
E. Borrower acknowledges that this instrument is an absolute
transfer and assignment of all Leases and the Income to Mortgagee. Upon
termination, as determined by Mortgagee, of Borrower's obligations to Mortgagee
as set out in the Letter of Credit Documents, Mortgagee shall relinquish its
rights to such Leases and Income and return said rights granted by this
instrument to Borrower.
1.14 Books, Records, Accounts and Monthly Reports. Borrower shall keep
and maintain, or shall cause to be kept and maintained, at Borrower's cost and
expense, proper and accurate books, records and accounts reflecting all items of
income and expense in connection with the operation of the Property and in
connection with any services, equipment, or furnishings provided in connection
with the operation of the Property. Borrower shall furnish to Mortgagee annually
within 120 days after the end of Borrower's fiscal year, at Borrower's expense,
an accrual statement of the operation of the Property for such fiscal year
showing in detail all revenues derived from rents, profits and all other
sources, and all expenses and disbursements made in connection with the
Property, annual balance sheets, profit and loss statements, and all supporting
schedules covering the operation of the Property. From and after default
Mortgagee may require that any such statements shall be audited and/or prepared
and certified by an independent certified public accountant selected or approved
by Mortgagee. All of the foregoing financial statements shall fairly and
accurately present the financial condition of the subject thereof as of the
dates thereof and shall be certified by Borrower's principal financial or
accounting officer. In the event that Borrower shall refuse or fail to furnish
any statement as aforedescribed, or in the event such statement shall be
inaccurate or false, or in the event of failure of Borrower to permit Mortgagee
or its representatives to inspect the Property or the said books and records,
such acts of Borrower shall be a default hereunder and Mortgagee may proceed in
accordance with the rights and remedies afforded it under the provisions hereof.
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1.15 Hazardous Materials.
A. Borrower represents and warrants that except as disclosed
in the report of EMG, Inc. dated December 22, 1998, no Hazardous Materials exist
on, under or about the Property or, to the best of Borrower's knowledge after
diligent inquiry, have been transported to or from the Property or used,
generated, manufactured, stored or disposed of on, under or about the Property,
and the Property is not in violation of any federal, state or local law,
ordinance or regulation relating to industrial hygiene or the environmental
conditions on, under or about the Property, including, without limitation, soil
and groundwater conditions. Hazardous Materials shall include: [i] oil,
flammable substances, explosives, radioactive materials, hazardous wastes or
substances, toxic wastes or substances or any other materials or pollutants
which pose a hazard to the Property or to persons on or about the Property,
cause the Property to be in violation of any local, state or federal law or
regulation, or are defined as or included in the definition of "hazardous
substances", "hazardous wastes", "hazardous materials", "toxic substances",
"contaminants", "pollution", or words of similar import under any applicable
local, state or federal law or under the regulations adopted or publications
promulgated pursuant thereto, including, but not limited to: [A] the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended. 42 U.S.C. ss.9601, et seq.; [B] the Hazardous Materials Transportation
Act, as amended, 49 U.S.C. ss.1801, et seq.; [C] the Resource Conservation and
Recovery Act, as amended, 42 U.S.C. ss.6901, et seq.; and [D] regulations
adopted and publications promulgated pursuant to the aforesaid laws; [ii]
asbestos in any form which is or could become friable, urea formaldehyde foam
insulation, transformers or other equipment which contain dielectric fluid
containing levels of polychlorinated biphenyls in excess of fifty (50) parts per
million; [iii] underground storage tanks; and [iv] any other chemical, material
or substance, exposure to which is prohibited, limited or regulated by any
governmental authority or may or could pose a hazard to the health and safety of
the occupants of the Property or the owners and/or occupants of property
adjacent to or surrounding the Property. As used in this Mortgage, the term
"Hazardous Materials law" shall include laws, rules, regulations, statutes, and
requirements pertaining or relating to Hazardous Materials.
B. Borrower shall, at its sole cost and expense, prevent the
imposition of any lien against the Property for the cleanup of any Hazardous
Material, and shall comply and cause [i] all Tenants under any Lease or
occupancy agreement affecting any portion of the Property, and [ii] any other
person or entity on or occupying the Property, to comply with all federal, state
and local laws, regulations, rules, ordinances and policies concerning the
environment, health and safety and relating to the presence, generation, use,
handling, transport, production, disposal, discharge or storage of Hazardous
Materials in, on or about the Property. Without limiting the generality of the
foregoing, Borrower represents, covenants and agrees that the Property does not
and will not contain any Hazardous Materials. Borrower hereby grants to
Mortgagee, its agents, employees, consultants and contractors an irrevocable
license to enter upon the Property and to perform such tests on the Property as
are reasonably necessary in Mortgagee's sole discretion to conduct an
investigation and/or review
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C. Borrower shall promptly take any and all necessary remedial
action in response to the presence, storage, use, disposal, transportation or
discharge of any Hazardous Materials on, under or about the Property; provided,
however that Borrower shall not, without Mortgagee's prior written consent, take
any remedial action in response to the presence, generation, use, handling,
transport, production, disposal, discharge or storage of any Hazardous Materials
on, under, or about the Property, nor enter into any settlement agreement,
consent decree, or other compromise in respect to any claims, proceedings,
lawsuits or actions, completed or threatened pursuant to any Hazardous Materials
laws or in connection with any third party, if such remedial action, settlement,
consent or compromise might, in Mortgagee's sole determination, impair the value
of Mortgagee's security hereunder; Mortgagee's prior consent shall not, however,
be necessary in the event that the presence, generation, use, handling,
transport, production, disposal, discharge or storage of Hazardous Materials on,
under, or about the Property either [i] poses an immediate threat to the health,
safety or welfare of any individual, or [ii] is of such a nature that an
immediate remedial response is necessary and it is not possible to obtain
Mortgagee's consent prior to undertaking such action. In the event Borrower
undertakes any remedial action with respect to any Hazardous Materials on, under
or about the Property, Borrower shall immediately notify Mortgagee of any such
remedial action, and shall conduct and complete such remedial action [A] in
compliance with all applicable federal, state and local laws, regulations,
rules, ordinances and policies, [B] to the satisfaction of Mortgagee, and [C] in
accordance with the orders and directives of all federal, state and local
governmental authorities
D. Borrower shall protect, defend, indemnify and hold
Mortgagee, its parent corporation, subsidiaries and affiliates and each of their
directors, officers, employees and agents, and any successors to Mortgagee's
interest in the Property, and any other person or entity who acquires any
portion of the Property at a foreclosure sale, by the receipt of a deed in lieu
of foreclosure, or otherwise through the exercise of Mortgagee's rights and
remedies under the Letter of Credit Documents, and any successors to any such
other person or entity, and all directors, officers, employees and agents of all
of the aforementioned indemnified parties, harmless from and against any and all
claims, proceedings, lawsuits, liabilities, damages, losses, fines, penalties,
judgments, awards, costs and expenses (including, without limitation, attorneys'
fees and costs and expenses of investigation) which arise out of or relate in
any way to any presence, generation, use, handling, transport, production,
disposal, discharge or storage of any Hazardous Materials in, on or about the
Property whether by Borrower or any Tenant or any other person or entity,
including, without limitation: [i] all foreseeable and all unforeseeable
consequential damages directly or indirectly arising out of [A] the presence,
generation, use, handling, transport, production, disposal, discharge or storage
of Hazardous Materials by Borrower, any prior owner or operator of the Property,
or any person or entity on or about the Property, or [B] any residual
contamination affecting any natural resource or the environment, and [ii] the
costs of any required or necessary repair, cleanup, or detoxification of the
Property and the preparation of any closure or other required plans (all such
claims, proceedings, lawsuits, liabilities, losses, fines, penalties, costs,
damages, and expenses referred to in this Paragraph 1.15D hereafter referred to
as "Expenses"). The foregoing indemnification obligations of Borrower shall
survive satisfaction of the Mortgage, and any foreclosure hereunder or a deed in
lieu of foreclosure. In addition, Borrower agrees that in the event any
Hazardous Material is caused to be removed from the Property by Borrower,
Mortgagee, or any other person or entity,
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the number assigned by the Environmental Protection Agency to such Hazardous
Material shall be solely in the name of Borrower and Borrower shall assume any
and all liability for such removed Hazardous Material. In the event Mortgagee
pays any Expenses, such Expenses shall be additional Indebtedness secured hereby
and shall become immediately due and payable without notice and with interest
thereon at the default rate specified in the Agreement
E. In the event that Borrower shall fail to timely comply with
the provisions of this Paragraph 1.15, Mortgagee may, but shall not be obligated
to, either [i] declare that an event of default shall have occurred, and/or [ii]
in addition to any rights granted to Mortgagee hereunder, do or cause to be done
whatever is necessary to cause the Property to comply with the applicable law,
rule, regulation or order, and the cost thereof shall be additional Indebtedness
secured hereby, and shall become immediately due and payable without notice and
with interest thereon at the default rate specified in the Agreement. Borrower
shall give Mortgagee and its agents and employees access to the Property for the
purpose of effecting such compliance and hereby specifically grants to Mortgagee
an irrevocable license, effective [x] immediately if, in the opinion of
Mortgagee, irreparable harm to the environment, the Property, or persons or
material amounts of property is imminent, or [y] otherwise, upon expiration of
the applicable cure period, to do whatever necessary to cause the Property to so
comply, including, without limitation, to enter the Property and remove
therefrom any Hazardous Materials. Borrower shall pay or reimburse Mortgagee for
any and all loss, cost, damage and expense (including, without limitation,
attorneys' fees and costs incurred in the investigation, defense and settlement
of claims) that Mortgagee may incur as a result of or in connection with the
assertion against Mortgagee of any claims relating to the presence or removal of
any Hazardous Material, or compliance with any federal, state or local laws,
rules, regulations or orders relating thereto, and the amount(s) thereof shall
be additional Indebtedness secured hereby and shall become immediately due and
payable without notice and with interest thereon at the default rate specified
in the Agreement
1.16 Purpose. The obligations under the Agreement which are secured by
this Mortgage have been incurred and made solely to induce Mortgagee to issue
its Letter of Credit for the account of Borrower.
Section 2. Defaults, Remedies and Waivers
2.1 Events of Default.
A. The terms "Default," "default," "Event of Default" or
"event of default," wherever used in this Mortgage, shall mean any one or more
of the following events:
[1] Failure by Borrower to pay or perform any
obligation under the Agreement, the Letter of Credit Documents, the Bond
Documents (as defined in the Agreement) or other indebtedness secured by this
Mortgage within ten (10) days from the date when due and payable;
[2] Any transfer under Paragraph 1.10 to which
Mortgagee shall not have first consented in writing;
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[3] An event shall occur which under the specific
terms of Paragraph 1.4 shall give the Mortgagee the option to accelerate the
maturity of the Indebtedness;
[4] Failure by Borrower duly to observe or perform
any other term, covenant, condition or agreement of this Mortgage or the
Agreement within 30 days after written notice of such failure; provided,
however, if such failure cannot be cured within such 30 day period, then failure
by Borrower to commence the curing thereof within such 30 day period and
diligently to prosecute such curing to completion within a reasonable time
thereafter;
[5] The fact that any representation or warranty of
Borrower contained in this Mortgage or in the Agreement or any other Letter of
Credit Document proves to be untrue or misleading in any respect as of the time
made or as of any subsequent time prior to the satisfaction in full of all of
the Indebtedness;
[6] The occurrence of any Default, default, event of
default or Event of Default under any of the other Letter of Credit Documents or
Borrower's default under the Bond Documents;
[7] The filing of any federal tax lien against the
Property;
[8] The filing by Borrower or any endorser of the
Agreement of a voluntary petition in bankruptcy pursuant to any federal, state
or other statute, law or regulation relating to bankruptcy, insolvency or other
relief for debtors (hereafter referred to collectively as "Bankruptcy Law") or
the issuing of an order for relief against Borrower or any endorser or guarantor
of the Agreement under any such Bankruptcy Law, or the filing by Borrower or
endorser of the Agreement of any petition or answer seeking or acquiescing in
any reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief for itself under any present or future Bankruptcy
Law;
[9] Borrower's or any such endorser's or guarantor's
seeking or consenting to or acquiescing in the appointment of any trustee,
custodian, receiver, or liquidator of Borrower, any such endorser or guarantor,
or of all or any substantial part of the Property or of any or all of the
income, rents, revenues, issues, earnings, profits or income thereof or of any
other property or assets of Borrower, or of such endorser or guarantor; or the
making by Borrower or any such endorser or guarantor of any general assignment
for the benefit of creditors, or the admission in writing by Borrower or any
such endorser or guarantor of its inability to pay its debts generally as they
become due, or the commission by Borrower or any such endorser or guarantor of
any act providing grounds for the entry of an order for relief under any
Bankruptcy Law;
[10] Failure to cause the dismissal of any
involuntary petition in bankruptcy brought against Borrower or any endorser or
guarantor of the Agreement within 60 calendar days after the same is filed but
in any event prior to the entry of an order, judgment, or decree approving such
petition;
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[11] The Property is subjected to actual or
threatened waste, or all or any part thereof is removed, demolished, or
materially altered without the prior written consent of Mortgagee;
[12] Borrower or any endorser of the Agreement (if a
corporation) is liquidated or dissolved or its charter expires or is revoked, or
Borrower or such endorser (if a partnership or business association) is
dissolved or partitioned, or Borrower or such endorser (if a trust) is
terminated or expires, or Borrower or such endorser (if an individual) dies;
[13] The filing by any person or entity of any claim
in any legal or equitable proceeding challenging the first priority lien of this
Mortgage, subject only to the Permitted Exceptions if such action is not
dismissed or stayed within sixty (60) days following such filing;
[14] Without the prior written consent of Mortgagee,
Borrower enters into, or terminates or cancels any agreement pertaining to
management of the Property; amends or modifies any such management agreement, or
consents to any such amendment or modification, without Mortgagee's prior
written consent, such consent not to be unreasonably withheld; or consents to
any termination, cancellation, amendment or modification of any such management
agreement;
[15] Default by Borrower under any other loan secured
by a lien on any portion of the Property and the expiration of any applicable
notice and/or cure period;
[16] The filing of any action under any federal or
state law, which permits forfeiture of Borrower's interest in the Property,
including but not limited to, any indictment under the Racketeer Influence and
Corrupt Organization Act of 1970 (RICO) if such action is not dismissed or
stayed within sixty (60) days following such filing; or
[17] Default by Borrower under the reimbursement
agreement or mortgage securing the reimbursement agreement or a default under
any letter of credit documents all of which have been entered into by Borrower
in connection with the refunding of certain economic development revenue bonds
issued in connection with the financing of Signature Inn properties in Florence
KY, Jefferson County, KY or Terre Haute, IN.
2.2 Acceleration of Maturity. If an Event of Default shall have
occurred, then the entire Indebtedness shall, at the option of Mortgagee, become
immediately due and payable without notice or demand other than notice of
Mortgagee's exercise of its option to accelerate the Indebtedness, which are
hereby expressly waived, time being of the essence of this Mortgage; and no
omission on the part of Mortgagee to exercise such option when entitled to do so
shall be construed as a waiver of such right.
2.3 Mortgagee's Right to Enter and Take Possession, Operate and Apply
Revenues.
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A. If an Event of Default shall have occurred, Borrower, upon
demand of Mortgagee, shall forthwith surrender to Mortgagee the actual
possession of the Property and if, and to the extent, permitted by law,
Mortgagee itself, or by such officers or agents as it may appoint, may enter and
take possession of all the Property without the appointment of a receiver, or an
application therefor, and may exclude Borrower and its respective agents and
employees wholly therefrom, and may have joint access with Borrower to the
books, papers and accounts of Borrower.
B. If Borrower shall for any reason fail to surrender or
deliver the Property or any part thereof after such demand by Mortgagee,
Mortgagee may obtain a judgment or decree conferring upon Mortgagee the right to
immediate possession or requiring Borrower to deliver immediate possession of
the Property to Mortgagee, to the entry of which judgment or decree Borrower
hereby specifically consents. Borrower will pay to Mortgagee, upon demand, all
expenses of obtaining such judgment or decree, including reasonable compensation
to Mortgagee, its attorneys and agents; and all such expenses and compensation
shall, until paid, be secured by the lien of this Mortgage.
C. Upon every such entering upon or taking of possession,
Mortgagee may hold, store, use, operate, manage and control the Property and
conduct the business thereof and, from time to time [i] make all necessary and
proper maintenance, repairs, renewals, replacements, additions, betterments and
improvements thereto and thereon and purchase or otherwise acquire additional
fixtures, personalty and other property; [ii] insure or keep the Property
insured; [iii] manage and operate the Property and exercise all the rights and
powers of Borrower to the same extent as Borrower could in its own name or
otherwise with respect to the same; [iv] enter into any and all agreements with
respect to the exercise by others of any of the powers herein granted Mortgagee,
all as Mortgagee from time to time may determine to be in its best interest; and
[v] perform all acts required of Borrower as lessor under any lease of all or
any part of the Property, all as Mortgagee may from time to time determine to be
to its best advantage. Mortgagee may collect and receive all the income, rents,
issues, profits and revenues from the Property, including those past due as well
as those accruing thereafter, and, after deducting [A] all expenses of taking,
holding, managing and operating the Property (including compensation for the
services of all persons employed for such purposes); [B] the cost of all such
maintenance, repairs, renewals, replacements, additions, betterments,
improvements, purchases and acquisitions; [C] the cost of such insurance; [D]
such taxes, assessments and other similar charges as Mortgagee may at its option
pay; [E] other proper charges upon the Property or any part thereof; and [F] the
compensation, expenses and disbursements of the attorneys and agents of
Mortgagee, Mortgagee shall apply the remainder of the moneys and proceeds so
received by Mortgagee to the payment of principal and interest in whatever order
or priority Mortgagee may elect. Anything in this Paragraph 2.3 to the contrary
notwithstanding, Mortgagee shall not be obligated to discharge or perform the
duties of a landlord to any tenant or incur any liability as the result of any
exercise by Mortgagee of its rights under this Mortgage, and Mortgagee shall be
liable to account only for the rents, incomes, issues, profits, and revenues
actually received by Mortgagee.
D. For the purpose of carrying out the provisions of this
Paragraph 2.3, Borrower hereby irrevocably constitutes and appoints Mortgagee
the true and lawful attorney-in-
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fact of Borrower to do and perform, from time to time, any and all actions
necessary and incidental to such purpose, and Borrower does, by these presents,
ratify and confirm any and all actions of said attorney-in-fact.
E. In the event that all such interest, deposits and principal
installments and other sums due under any of the terms, covenants, conditions
and agreements of this Mortgage, shall have been paid and all Events of Default
cured and satisfied, and as a result thereof, Mortgagee surrenders possession of
the Property to Borrower, the same right of taking possession shall exist if any
subsequent Event of Default shall occur
2.4 Receiver. If an Event of Default shall have occurred, Mortgagee,
upon application to a court of competent jurisdiction, shall be entitled as a
matter of strict right without notice and without regard to the sufficiency or
value of any security for the Indebtedness or the solvency of any party bound
for its payment, to the appointment of a receiver to take possession of and to
operate the Property and to collect and apply the income, rents, issues,
profits, and revenues thereof. The receiver shall have all of the rights and
powers permitted under the laws of the state within which the Land is located.
Borrower shall pay to Mortgagee upon demand all expenses, including receiver's
fees, attorneys' fees, costs, and agent's compensation, incurred pursuant to the
provisions of this Paragraph 2.4; and all such expenses shall be secured by this
Mortgage.
2.5 Enforcement.
A. If a Default shall have occurred, Mortgagee, at its option,
may institute legal proceedings for the foreclosure of this Mortgage.
B. Mortgagee shall have the right from time to time to enforce
any legal or equitable remedy against Borrower, including, without limitation,
suing for any sums, whether interest, principal or any installment of either or
both, taxes, penalties or any other sums required to be paid under the terms of
this Mortgage, as the same become due, without regard to whether or not all of
the Indebtedness shall then be due, and without prejudice to the right of
Mortgagee thereafter to enforce any other remedy, including, without limitation,
an action of foreclosure, whether or not such other remedy be based upon a
Default which existed at the time of commencement of an earlier or pending
action, and whether or not such other remedy be based upon the same Default upon
which an earlier or pending action is based.
2.6 Purchase by Mortgagee. Upon any foreclosure sale, Mortgagee may bid
for and purchase the Property and shall be entitled to apply all or any part of
the Indebtedness as a credit to the purchase price.
2.7 Application of Proceeds of Sale. In the event of a foreclosure sale
of all or any portion of the Property, the proceeds of said sale shall be
applied, in whatever order Mortgagee in its sole discretion may decide, to the
expenses of such sale and of all proceedings in connection therewith, including
attorneys' fees, to insurance premiums, liens, assessments, taxes and charges,
including utility charges, advanced by Mortgagee, to payment of the outstanding
principal balance of the Indebtedness, together with any prepayment premiums,
fees or charges
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herein or in the Agreement provided, or to the accrued interest on all of the
foregoing, and finally the remainder, if any, shall be paid to Borrower
2.8 Borrower as Tenant Holding Over. In the event of any such
foreclosure sale by Mortgagee, Borrower shall be deemed a tenant holding over
and shall forthwith deliver possession to the purchaser or purchasers at such
sale or be summarily dispossessed according to provisions of law applicable to
tenants holding over.
2.9 Leases. Mortgagee, at its option, is authorized to foreclose this
Mortgage subject to the rights of any tenants of the Property, and the failure
to make any such tenants parties to any such foreclosure proceedings and to
foreclose their rights will not be, nor be asserted to be by Borrower, a defense
to any proceedings instituted by Mortgagee to collect the Indebtedness.
2.10 Discontinuance of Proceedings. In case Mortgagee shall have
proceeded to enforce any right, power or remedy under this Mortgage by
foreclosure, entry or otherwise, and such proceeding shall have been withdrawn,
discontinued or abandoned for any reason, or shall have been determined
adversely to Mortgagee, then in every such case [i] Borrower and Mortgagee shall
be restored to their former positions and rights, [ii] all rights, powers and
remedies of Mortgagee shall continue as if no such proceeding had been taken,
[iii] each and every Default declared or occurring prior or subsequent to such
withdrawal, discontinuance or abandonment shall be deemed to be a continuing
Default, and [iv] neither this Mortgage, nor the Agreement, nor the
Indebtedness, nor any other of the Letter of Credit Documents shall be or shall
be deemed to have been released or otherwise affected by such withdrawal,
discontinuance or abandonment; and Borrower hereby expressly waives the benefit
of any statute or rule of law now provided, or which may hereafter be provided,
which would produce a result contrary to or in conflict with the above.
2.11 No Reinstatement. If a Default under Paragraph 2.1A[1] shall have
occurred and Mortgagee shall have proceeded to enforce any right, power or
remedy permitted hereunder, then a tender of payment by Borrower or by anyone on
behalf of Borrower of the amount necessary to satisfy all sums due hereunder
made at any time prior to foreclosure, or the acceptance by Mortgagee of any
such payment so tendered, shall not constitute a reinstatement of the Agreement
or this Mortgage.
2.12 Remedies Cumulative. No right, power or remedy conferred upon or
reserved to Mortgagee by this Mortgage or any other Letter of Credit Document is
intended to be exclusive of any other right, power or remedy, but each and every
such right, power and remedy shall be cumulative and concurrent and shall be in
addition to any other right, power and remedy given hereunder or now or
hereafter existing at law or in equity or by statute.
2.13 Suits to Protect the Property. Mortgagee shall have the power [i]
to institute and maintain such suits and proceedings as it may deem expedient to
prevent any impairment of the Property by any acts which may be unlawful or in
violation of this Mortgage, [ii] to preserve or protect its interest in the
Property and in the income, rents, accounts, receivables, issues, profits and
revenues arising therefrom, and [iii] to restrain the enforcement of or
compliance with any legislation or other governmental enactment, rule or order
that may be unconstitutional or
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otherwise invalid, if the enforcement of or compliance with such enactment, rule
or order would impair the security hereunder or be prejudicial to the interest
of Mortgagee.
2.14 Mortgagee May File Proofs of Claim. In the case of any
receivership, insolvency, bankruptcy, reorganization, arrangement, adjustment,
composition or other proceedings affecting Borrower, its creditors or its
property, Mortgagee, to the extent permitted by law, shall be entitled to file
such proofs of claim and other documents as may be necessary or advisable in
order to have the claims of Mortgagee allowed in such proceedings for the entire
amount of the Indebtedness at the date of the institution of such proceedings
and for any additional amount of the Indebtedness after such date.
2.15 Marshalling. At any foreclosure sale, the Property may, at
Mortgagee's option, be offered for sale for one total price, and the proceeds of
such sale accounted for in one account without distinction between the items of
security or without assigning to them any proportion of such proceeds, Borrower
hereby waiving the application of any doctrine of marshalling; and in the event
Mortgagee, at its option, elects to sell the Property in parts or parcels, said
sales may be held from time to time, and this Mortgage shall not terminate until
all of the Property not previously sold shall have been sold.
2.16 Waiver of Appraisement, Valuation, Etc. Borrower agrees, to the
full extent permitted by law, that in case of a Default on the part of Borrower
hereunder, neither Borrower nor anyone claiming through or under Borrower will
set up, claim or seek to take advantage of any moratorium, reinstatement,
forbearance, appraisement, valuation, stay, extension, homestead right,
entitlement or exemption, or redemption laws now or hereafter in force, in order
to prevent or hinder the enforcement or foreclosure of this Mortgage or the
absolute sale of the Property or the delivery of possession thereof immediately
after such sale to the purchaser at such sale, and Borrower, for itself and all
who may at any time claim through or under it, hereby waives to the full extent
that it may lawfully so do, the benefit of all such laws, and any and all right
to have the assets subject to the security interest of this Mortgage marshaled
upon any foreclosure.
2.17 Waiver of Homestead. Borrower hereby waives and renounces all
homestead right, entitlement, and exemption provided for by the Constitution and
the laws of the United States of America and of any state, in and to the
Property as against the collection of the Indebtedness, or any part hereof.
2.18 Security Deposits. If Borrower shall obtain from a tenant or
subtenant of the Property, or a part thereof, a deposit to secure such tenant's
or subtenant's obligations, such funds, following any default under this
Mortgage, shall be deposited with Mortgagee in an account maintained by
Mortgagee in its name; but any such deposit shall be returned to Borrower when
required, by the terms of any such lease, sublease or occupancy agreement, to be
paid over to the tenant or subtenant; and Borrower represents that the
provisions of any applicable laws relating to security deposits have been
satisfied with respect to each existing tenant, subtenant or occupant of the
Property and agrees that they will be satisfied with respect to each new tenant,
subtenant, or occupant of the Property; and Borrower will furnish details of
such satisfaction from time to time upon the request of Mortgagee in such detail
as Mortgagee may require.
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Section 3. Miscellaneous
3.1 Successors and Assigns. Subject to Paragraph 1.10A hereof, this
Mortgage shall inure to the benefit of and be binding upon Borrower and
Mortgagee and their respective legal representatives, successors, and assigns.
Whenever a reference is made in this Mortgage to Borrower or Mortgagee, such
reference shall be deemed to include a reference to the heirs, devisees, legal
representatives, successors, and assigns of Borrower or Mortgagee, whether so
expressed or not.
3.2 Terminology. All personal pronouns used in this Mortgage whether
used in the masculine, feminine, or neuter gender, shall include all other
genders; the singular shall include the plural, and vice versa. Titles of
Articles are for convenience only and neither limit nor amplify the provisions
of this Mortgage itself and all references herein to Articles, Paragraphs, or
Subparagraphs shall refer to the corresponding Articles, Paragraphs, or
Subparagraphs of this Mortgage.
3.3 Severability. If any provision of this Mortgage or the application
thereof to any person or circumstance shall be invalid or unenforceable to any
extent, the remainder of this Mortgage and the application of such provisions to
other persons or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by law.
3.4 Applicable Law. This Mortgage shall be interpreted, construed and
enforced according to the laws of the state of Indiana.
3.5 Notices, Demands, and Requests. All notices, demands or requests
provided for or permitted to be given pursuant to this Mortgage shall be in
writing and shall be delivered in person or sent by registered or certified
United States mail, postage prepaid, return receipt requested, or by overnight
courier, to the addresses set out below or to such other addresses as are
specified by no less than ten (10) days' prior written notice delivered in
accordance herewith:
If to Mortgagee:
FIRSTAR BANK, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Commercial Real Estate Dept.
If to Borrower:
▇▇▇▇▇▇▇ INNS, INC.
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention:
All such notices, demands and requests shall be deemed effectively given and
delivered three (3) days after the postmark date of mailing, the day after
delivery to the overnight courier or, if
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delivered personally, when received. Rejection or other refusal to accept or the
inability to deliver because of a changed address of which no notice was given
in accordance with the time period provided herein, shall be deemed to be
receipt of the notice, demand, or request sent.
3.6 Consents and Approvals. All approvals and consents hereunder shall
be in writing and no approval or consent shall be deemed to have been given
hereunder unless evidenced in a writing signed by the party from whom the
approval or consent is sought.
3.7 Waiver. No delay or omission of Mortgagee to exercise any right,
power or remedy accruing upon any default shall exhaust or impair any such
right, power or remedy or shall be construed to be a waiver of any such default,
or acquiescence therein; and every right, power and remedy given by this
Mortgage to Mortgagee may be exercised from time to time and as often as may be
deemed expedient by Mortgagee. No consent or waiver, express or implied, by
Mortgagee to or of any breach or default by Borrower in the performance of the
obligations hereunder shall be deemed or construed to be a consent or waiver to
or of any other breach or default in the performance of the same or any other
obligations of Borrower hereunder. Failure on the part of Mortgagee to complain
of any act or failure to act or to declare an Event of Default, irrespective of
how long such failure continues, shall not constitute a waiver by Mortgagee of
its rights hereunder or impair any rights, powers or remedies consequent on any
breach or default by Borrower.
3.8 Assignment. This Mortgage is assignable by Mortgagee, and any
assignment hereof by Mortgagee shall operate to vest in the assignee all rights
and powers herein conferred upon and granted to Mortgagee.
3.9 Time of the Essence. TIME IS OF THE ESSENCE with respect to each
and every covenant, agreement, and obligation of Borrower under this Mortgage,
the Agreement and any and all other Letter of Credit Documents.
3.10 Attorneys' Fees. The meaning of the terms "legal fees" or
"attorneys' fees" or any other reference to the fees of attorneys or counsel,
wherever used in this Mortgage, shall be deemed to include, without limitation,
all legal fees relating to litigation or appeals at any and all levels of courts
and administrative tribunals.
3.11 Covenants Run With the Land. All of the grants, covenants, terms,
provisions and conditions herein contained shall run with the land and shall
apply to, bind and inure to the benefit of, the successors and assigns of
Borrower and Mortgagee.
3.12 Further Stipulations. The covenants, agreements, and provisions,
if any, set forth in Exhibit D attached hereto are hereby made a part of this
Mortgage. In the event of any conflict between such further stipulations and any
of the printed provisions of this Mortgage, such further stipulations shall be
deemed to control.
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IN WITNESS WHEREOF, Borrower has executed, sealed and
delivered this Mortgage the day, month, and year first above written.
BORROWER:
▇▇▇▇▇▇▇ INNS, INC.
By:
----------------------------------
Print or Type Name:
------------------
Title:
------------------------------
STATE OF ____________ )
) ss
COUNTY OF ___________ )
Before me, a Notary Public in and for the State and County aforesaid personally
appeared ______________________, who is known to me or was proven by
satisfactory evidence to be the person who executed the within instrument as
_____________________ of ▇▇▇▇▇▇▇ Inns, Inc. and who acknowledged execution as
his free act and deed and the free act and deed of ▇▇▇▇▇▇▇ Inns, Inc. In witness
whereof I have affixed my hand and seal this __ day of December, 1999.
-------------------------------------
Notary Public
Print or Type Name:
------------------
My commission Expires:
---------------------
County of Residence:
---------------------
This instrument prepared by:
-------------------------------
L. ▇▇▇▇ ▇▇▇▇▇, ▇▇.
▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇, PLLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
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EXHIBIT A
MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT
LEGAL DESCRIPTION
243
EXHIBIT B
MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT
PERMITTED EXCEPTIONS
1. The lien of ad valorem real estate taxes assessed against the
Property but not yet due and payable, provided the same are paid as required
under this Mortgage.
2. Rights of tenants, as tenants only, under Leases of the Property
permitted under this Mortgage and the other Letter of Credit Documents.
3. Matters shown as exceptions on the loan policy of title insurance
issued in favor of Mortgagee insuring the lien of this Mortgage.
4. Cross collateralization rights of Morgagee under documents securing
other properties of Mortgagor.
244
EXHIBIT C
MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT
REIMBURSEMENT AGREEMENT
(Attached)
245
EXHIBIT D
MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT
FURTHER STIPULATIONS
1.1 Additional Granting Clause. A new Granting Clause (F) is hereby
added to this Mortgage, as follows:
All Receivables arising from the operation of the Property, whether now
existing or hereafter arising, and however evidenced or acquired, or in which
Borrower now has or hereafter acquires any rights. The term "Receivables" means
and includes accounts receivable, rents or other payments for the use of rooms
and facilities at the Property contract rights, instruments, notes, drafts,
acceptances, documents, chattel paper, general intangibles, and all forms of
obligations owing to Borrower, and all of Borrower's rights to any merchandise
(including without limitation any returned or repossessed goods and the right of
stoppage in transit) which is represented thereby.
1.2 Cross-Default. In addition to the Agreement, Borrower has entered
into three other reimbursement agreements in connection with the issuance of
three letters of credit for the account of Borrower as credit enhancement for
Economic Development Revenue Refunding Bonds issued by the City of Terre Haute
in Indiana, the City of Florence, Kentucky, and Jefferson County, Kentucky.
Those reimbursement agreements are secured by mortgages encumbering Signature
Inn properties owned by Borrower in Terre Haute, IN, Florence, KY, and
Louisville, KY. Any default under the reimbursement agreements entered into in
connection with the issuance of the letters of credit enhancing the Terre Haute,
▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇▇ County bond issues or any default under the mortgages, any
security agreement, any assignment of leases or any assignment of master leases
or operating agreements securing the payment and performance of obligations
under said reimbursement agreements shall be a default under this mortgage. In
addition, Mortgagee has made certain loans to Borrower secured by mortgages and
assignments of rents and leases encumbering Signature Inn properties in South
Bend, IN, Kokomo, IN, Muncie, IN and Evansville, IN. Any default under the notes
evidencing those loans or any default under any mortgage, security agreement or
assignment of rents and leases encumbering the Signature Inn properties in
Elkhart, Muncie, Kokomo, or Evansville, IN will constitute a default under this
mortgage and the Agreement.
Borrower further agrees that any default under the Agreement, this
Mortgage or the Letter of Credit Documents will constitute a default under the
notes from Borrower to Mortgagee relating to the Elkhart, Muncie, Kokomo and
Evansville Signature Inns and will also constitute a default under any mortgage
or other security document securing those notes and encumbering the Elkhart,
Muncie, Kokomo or Evansville Signature Inns.
246
1.3 Receivables. A new Paragraph 1.17 is hereby added to this Mortgage,
as follows:
Special Provisions Concerning Receivables.
(a) Borrower shall keep all of its books and records relating
to Receivables at the location of the Property or at the offices of Borrower
shown in Paragraph 3.05 hereof.
(b) From time to time, as Mortgagee may request of Borrower,
Borrower shall provide Mortgagee with schedules describing all Receivables
created or acquired by Borrower, provided, however, that the failure of Borrower
to execute and deliver such schedules shall not affect or limit Mortgagee's
security interest or other rights in and to any such Receivables. Together with
each schedule, Borrower shall, if requested by Mortgagee, furnish copies of
customers' invoices or the equivalent, and original certificates of delivery and
acceptance, for all merchandise sold, and Borrower warrants the genuineness
thereof.
(c) (i) Unless and until Mortgagee gives Borrower other
instructions, Borrower shall collect all Receivables and may use the same to
carry on its business in accordance with sound business practice and otherwise
subject to the terms hereof.
(ii) After a default has occurred hereunder and in the event
Mortgagee requests the Borrower to do so.
(A) All instruments and chattel paper at any time
constituting part of the Receivables (including any postdated checks) shall,
upon receipt by Borrower, be immediately endorsed to and deposited with
Mortgagee in the same form as received by Borrower; and/or
(B) Borrower shall instruct all account debtors to remit all
payments in respect of Receivables to a lockbox to be maintained by Mortgagee
under the sole custody and control of Mortgagee.
(iii) After a default has occurred hereunder, Mortgagee or its
designee may notify Borrower's customers or account debtors at any time that
Receivables have been assigned to Mortgagee or of Mortgagee's security interest
therein and either in its own name, Borrower's name, or both, demand, collect
(including without limitation through a lockbox analogous to that described in
clause (c)(ii)(B) above), receive, receipt for, ▇▇▇ for, compound, and give
acquittance for, any or all amounts due or to become due on Receivables, and in
Mortgagee's discretion file any claim or take any other action or proceeding
which Mortgagee may deem necessary or appropriate to protect and realize upon
the security interest of Mortgagee in Receivables.
D-2
247
(iv) In the event Mortgagee has exercised any or all of its
rights under clauses (c)(ii) or (iii) above, Mortgagee may, at any time, cause
all instruments, chattel paper, monies or other proceeds received by Mortgagee
to be deposited, handled, and administered, in and through a remittance account
and Borrower acknowledges that the maintenance of such an account by Mortgagee
is solely for the convenience of Mortgagee and that Borrower does not have any
right, title, or interest in and to such account or any accounts at any time
standing to the credit thereof. When final payment of checks, instruments, or
other items received by Mortgagee as collections of Receivables have been
received by Mortgagee the same shall be applied by Mortgagee in payment of the
Indebtedness in accordance with the terms of the Agreement.
1.4 Indiana Responsible Property Transfer Law. Borrower represents and
warrants to Mortgagee that the Property is not subject to the Indiana
Responsible Property Transfer Law (Indiana Code ss.13-7-22.5-1 et seq.)
D-3
248
ASSIGNMENT OF LEASES AND RENTS
THIS ASSIGNMENT OF LEASES AND RENTS (the "Assignment") is made and
entered into as of the 22nd day of December, 1999, from ▇▇▇▇▇▇▇ INNS, INC.,
whose address is 8 ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇ (hereafter referred to as "Borrower"), to FIRSTAR BANK, N.A., a
National banking association whose address is ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (hereafter referred to as "Bank");
W I T N E S S E T H:
FOR VALUE RECEIVED, Borrower does hereby absolutely, presently and
irrevocably assign, grant, transfer, and convey to Bank, its successors and
assigns, all of Borrower's right, title, and interest in, to, and under, to the
extent they are attributable to the Property (as defined below), all leases,
master leases, subleases, tenant contracts, rental agreements, rents, room
revenues, banquet or meeting space rentals, fees for the use of all or any part
of the Property, accounts receivable from room or space rentals, advance
deposits or payments for rooms or meeting or banquet space, franchise
agreements, management contracts, construction contracts and other contracts,
licenses and permits, map approvals and conditional use permits, whether written
or oral, now or hereafter affecting all or any part of the Property, and any
agreement for the use or occupancy of all or any part of said Property which may
have been made heretofore or which may be made hereafter, including any and all
extensions, renewals, and modifications of the foregoing and guaranties of the
performance or obligations of any tenants thereunder, and all other arrangements
of any sort resulting in the payment of money to Borrower or in Borrower
becoming entitled to the payment of money for the use of the Property or any
part thereof whether such user or occupier is tenant, invitee, or licensee (all
of the foregoing hereafter referred to collectively as the "Leases" and
individually as a "Lease", and said tenants, invitees, guests and licensees are
hereafter referred to collectively as "Tenants" and individually as "Tenant" as
the context requires), which Leases cover all or portions of certain property
(the "Property") located in Elkhart, Indiana, more particularly described in
Exhibit A, attached hereto and incorporated herein by this reference (the term
"Premises", wherever used herein, shall mean the Property and all improvements
now or hereafter situated thereon); together with all of Borrower's right,
title, and interest in and to all income, rents, issues, royalties, profits,
rights and benefits and all Tenants' security and other similar deposits derived
with respect to the Leases and with respect to the Property, including, without
limitation all base and minimum rents, percentage rents, additional rents,
payments in lieu of rent, accounts receivable, payments for the use of rooms at
the Property, expense contributions, and other similar such payments (hereafter
collectively referred to as "Income"), and the right to collect the same as they
become due, it being the intention of the parties hereto to establish an
absolute transfer and assignment of all of the Leases and the Income to Bank,
and not just to create a security interest.
For purposes hereof, the income, rents, royalties, issues, rights and
benefits, etc., which are attributable to the Property shall include but not be
limited to the Base Rent (as defined in the Master Lease Agreement between
Borrower and ▇▇▇▇▇▇▇ Hospitality, L.L.C. covering a number of different
properties, including the Property, dated May 7, 1999, as amended and referred
to hereafter as the "Master Lease") directly attributable to the Rooms (as
defined in the Master Lease) in the Property and the Percentage Rent (as defined
in the Master Lease) generated by the Property.
249
"Percentage Rent generated by the Property" means the difference between: (i)
Percentage Rent due and owing utilizing the Percentage Rent calculation set
forth in Section 3.1(b) of the Master Lease using all Rooms for the applicable
period; and (ii) Percentage Rent due and owing utilizing the Percentage Rent
calculation set forth in Section 3.1(b) of the Master Lease using all Rooms for
the applicable period except those Rooms comprising the Property.
TO HAVE AND TO HOLD unto Bank, its successors and assigns forever,
subject to and upon the terms and conditions hereafter set forth. This
Assignment is made in connection with the execution of the Letter of Credit
Documents (as hereinafter defined).
1. REPRESENTATIONS, WARRANTIES, AND COVENANTS
1.1 Representations and Warranties of Borrower. Borrower hereby
represents, warrants, and agrees as follows:
a. Borrower is the sole holder of the landlord's interest under the
Leases, is entitled to receive the Income from the Leases and from the Property,
and has the full right to sell, assign, transfer, and set over the same and to
grant to and confer upon Bank the rights, interests, powers, and authorities
herein granted and conferred;
b. Borrower has made no pledge or assignment of the Leases or
Income, prior to the date hereof, and Borrower shall not, after the date hereof,
make or permit any such pledge or assignment;
c. Borrower has neither done any act nor failed to do any act which
might prevent Bank from, or limit Bank in, acting under any of the provisions of
this Assignment;
d. The Leases are valid, enforceable, and in full force and effect,
and Borrower has delivered to Bank true, complete, and correct copies of all
Leases with respect to the Property or any part thereof;
e. All Leases provide for rental to be paid monthly and Borrower
has not accepted, and shall not, after the date hereof, accept or permit payment
of rental or other Income under any of the Leases for more than one (l) month in
advance of the due date thereof;
f. No security deposit has been made by any Tenant under any Lease
except as set forth in such Lease;
g. To the best of Borrower's knowledge, there exists no default or
event of default or any state of facts which would or could, with the passage of
time or the giving of notice, or both, constitute a default or event of default
on the part of Borrower or by any Tenant under the terms of any of the Leases;
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250
h. Neither the execution and delivery of this Assignment or
any of the Leases, nor the performance of each and every covenant of Borrower
under this Assignment and the Leases, nor the satisfaction of each and every
condition contained in this Assignment and the Leases, conflicts with, or
constitutes a breach or default under, any agreement, indenture, or other
instrument to which Borrower is a party or is subject, or any law, ordinance,
administrative regulation, or court decree which is applicable to Borrower;
i. No action has been brought or, to the best of Borrower's
knowledge, is threatened, which would interfere in any way with the right of
Borrower to execute this Assignment and perform all of Borrower's obligations
contained in this Assignment and in the Leases; and
1.2 Covenants of Borrower. Borrower hereby covenants and agrees as
follows:
[a] Borrower shall provide Bank with a fully-executed original
counterpart of each Lease, amendment, modification or alteration thereto;
[b] Borrower shall authorize and direct, and does hereby
authorize and direct, each and every present and future Tenant of the whole or
any part of the Property, including the Lessee under the Master Lease to pay all
rental attributable to the Property to Bank from and after the date of receipt
of written demand from Bank to do so;
[c] Borrower shall [i] fulfill, perform, and observe each and
every condition and covenant of landlord or lessor contained in each of the
Leases; [ii] give prompt notice to Bank of any claim of default under the Master
Lease or any other Leases, whether given by a Tenant to Borrower, or given by
Borrower to a Tenant, together with a complete copy of any such notice; [iii] at
no cost or expense to Bank, enforce, short of termination, the performance and
observance of each and every covenant and condition of the Master lease or other
Leases to be performed or observed by the Tenants thereunder; [iv] if so
requested by Bank, diligently and in good faith enforce the Master lease and any
other Leases and all remedies available to Borrower against the Tenants in the
event of default under any Lease by any Tenant; [v] if so requested by Bank,
diligently and in good faith appear in and defend any action arising out of, or
in any manner connected with, any of the Master Lease or other Leases, or the
obligations or liabilities of Borrower as the landlord thereunder, or of the
Tenant or any guarantors thereunder; and [vi] execute such additional documents
as Bank may require to evidence and confirm such assignment;
[d] Borrower shall not, without the prior written consent of
Bank, [i] enter into any lease of all or any part of the Property, [ii] modify,
amend, or alter, or agree to the modification, amendment, or alteration of the
Master Lease or any of the Leases; [iii] terminate the term, accept the
surrender of, or otherwise cancel any of the Master Lease or any of the Leases;
[iv] permit the prepayment of any rents under the Master Lease or any of the
Leases or other Income for more than one (l) month prior to the due date
thereof; [vi] discount any future
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251
accruing rents under the Master Lease or other Leases or other Income; [vii]
give any consent to any assignment or sublease by any Tenant under the Master
Lease or any of the Leases if such assignment or subletting would result in the
assignor or sublessor being released from liability under its Lease; [viii]
grant any rental concessions in connection with the Master Lease or any of the
Leases; or [ix] assign its interest in, to, or under the Master Lease or the
Leases or Income to any person or entity other than Bank and any attempt to
violate the provisions of this Subparagraph C shall be void;
[e] Borrower shall take no action that will cause or permit
the estate of any Tenant under the Master Lease or any of the Leases to merge
with the interests of Borrower in the Property or any portion thereof;
[f] Borrower shall protect, indemnify, and hold Bank harmless
from and against all liabilities, obligations, claims, damages, penalties,
causes of action, costs, and expenses (including, without limitation, attorneys'
fees and court costs) imposed upon or incurred by Bank by reason of this
Assignment or in exercising, performing, enforcing, or protecting its rights,
title, or interests set forth herein, and any claim or demand whatsoever which
may be asserted against Bank by reason of any alleged obligation or undertaking
to be performed or discharged by Bank under this Assignment;
[g] Borrower shall not do, or fail to do, any act if such
action or failure would constitute a violation of the Master Lease or any of the
Leases, or commit any act or omission that may create in any Tenant a right to
cease or reduce payment of rent or terminate its Lease or otherwise affect or
impair the benefits of this Assignment;
[h] Borrower shall [i] fulfill, perform, and observe each and
every condition and covenant of landlord or lessor contained in each of the
Leases; [ii] give prompt notice to Bank of any claim of default under any of the
Leases, whether given by a Tenant to Borrower, or given by Borrower shall
authorize and direct, and does hereby authorize and direct, each and every
present and future Tenant of the whole or any part of the Property to pay all
rental to Bank from and after the date of receipt of written demand from Bank to
do so; and
1.3 Right to Collect Rents, Termination, and Tenant Subordinations.
a. Although this Assignment constitutes an absolute, present
and current assignment of all Income, as long as no default or event of default
as defined in Paragraph 2.1 below, on the part of Borrower shall have occurred,
Bank shall not demand that such Income be paid directly to Bank, and Borrower
shall have a license to collect, but not more than one (l) month prior to the
due date thereof, all such Income from the Property (including, without
limitation, all rental payments under the Leases).
b. Borrower acknowledges that this Assignment is an absolute
transfer and assignment of all Leases and the Income to Bank. Upon expiration of
the Letter of Credit without a draw having occurred or upon repayment in full of
all amounts owed and performance of all
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obligations under the Reimbursement Agreement, Bank shall relinquish its rights
to the Leases and Income and return said rights granted by this Assignment to
Borrower. A recording of a valid release of the Mortgage shall automatically
constitute a release and termination of this Assignment without further action
on the part of Bank. Borrower hereby indemnifies and agrees to hold each Tenant
free and harmless from and against all liability, loss, cost, damage or expense
suffered or incurred by Tenant by reason of its compliance with any demand for
payment of Income by Bank contemplated by this Agreement.
c. Notwithstanding any other provisions of this Assignment,
Borrower shall not hereafter enter into any Lease without the prior written
consent of Bank, which consent may be granted or withheld in Bank's sole
discretion, and even if Bank's consent is obtained, only upon the following
conditions: [i] each such Lease shall contain a provision that the rights of the
parties thereunder are expressly subordinate to all of the rights and title of
Bank under this Assignment; [ii] each such Lease shall contain a provision
whereby the parties thereunder expressly recognize and agree that,
notwithstanding such subordination, Bank may sell the Property in the manner
provided herein, and thereby, at the option of Bank, sell the same subject to
such Lease; and [iii] at or prior to the time of execution of any such Lease,
Borrower shall, as a condition to such execution, procure from the other party
or parties thereto an agreement in favor of Bank, in form and substance
satisfactory to Bank, under which such party or parties agree to be bound by the
provisions hereof, regarding the manner in which Bank may foreclose under the
Mortgage. At Bank's option any Lease may be required to be made superior to
Bank's interest under this Assignment.
1.4 Certain Definitions. As used herein, the following terms have the
meanings set forth opposite each such term:
a. "Commitment" shall mean the Letter of Credit Commitment
between Borrower and Bank dated October 15th, 1999 for the sum of
$12,266,438.00.
b. "Indebtedness" shall have the same meaning herein as set
forth in the Mortgage.
c. "Indemnity" shall mean that certain Environmental
Indemnity Agreement of even date herewith, executed by Borrower for the benefit
of Bank.
d. "Letter of Credit Documents" shall mean the Letter of
Credit, the Reimbursement Agreement, the Mortgage, this Assignment, the
Commitment, and all other documents executed in connection with the
Indebtedness.
e. "Mortgage" shall mean that certain mortgage, deed of trust,
or other security instrument of even date herewith executed by Borrower
encumbering the Property and securing the Reimbursement Agreement and all
renewals, extensions, modifications and rearrangements thereof.
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253
f. "Reimbursement Agreement" shall mean the Reimbursement
Agreement entered into between Borrower and Bank on the 22nd day of December,
1999 in connection with the Bank's agreement to issue a Letter of Credit in the
amount of $3,346,312.
g. "Letter of Credit" shall mean that certain Irrevocable
Letter of Credit No. _______ issued by the Bank for the account of Borrower as
credit enhancement for those certain Revenue Refunding Bonds Series 1999 issued
by the City of Elkhart, Indiana.
2. DEFAULT
2.1 Events of Default. The term "default" or "event of default",
wherever used in this Assignment, shall mean any one or more of the following
events:
a. The failure by Borrower to pay or perform any obligation
under the Reimbursement Agreement or any other indebtedness secured by the
Mortgage or any other sum that may be due and payable under any of the Letter of
Credit Documents, within ten (10) days from the date when due and payable;
b. The failure by Borrower duly to observe or perform any
term, covenant, condition, or agreement of this Assignment within 30 days after
written notice of such failure; provided, however, if such failure cannot be
cured within such 30 day period, then failure by Borrower to commence the curing
thereof within such 30 day period and diligently to prosecute such curing to
completion within a reasonable time thereafter;
c. The fact that any representation or warranty of Borrower
contained in this Assignment or in any other Letter of Credit Document proves to
be untrue or misleading in any material respect; or
d. The occurrence of any default, Default, event of default or
Event of Default under any of the other Letter of Credit Documents.
2.2 Remedies. Upon the occurrence of any default or event of default,
whether before or after the Note is declared to be due and payable or whether
before or after the exercise by Bank of any default remedies contained in any of
the Letter of Credit Documents, Bank may, at its option, with or without notice
or demand of any kind, exercise any or all of the following remedies:
a. Declare any part or all of the indebtedness secured by the
Mortgage or this Assignment to be due and payable, whereupon the same shall
become immediately due and payable;
b. As Borrower's attorney-in-fact, coupled with an interest,
Bank being hereby so irrevocably designated, [i] collect, receive, ▇▇▇ for,
attach, levy, endorse checks or drafts evidencing the payment of Income, and
apply the Income without taking possession of the
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254
Property, [ii] if Bank so elects, control, operate, and manage, at the expense
of Borrower, the Property and exercise and perform all rights and obligations of
Borrower under the Leases (including the curing of any or all defaults under the
Leases) or such part of the foregoing Property or Leases as Bank shall elect,
and [iii] exercise, enforce, perform, and protect all other right, title, and
interest which is granted by Borrower herein or granted in any one or more of
the other Letter of Credit Documents. More specifically, but without limiting in
any way the immediately preceding sentence, Bank shall be entitled in the event
of such a default to collect, receive, ▇▇▇ for, attach, levy, and apply all
Income as herein authorized and may [A] use such measures as Bank may deem
necessary or desirable to enforce the payment of such Income, or, in the event
option [ii] above is elected, to secure possession of all or any part of the
Property or Leases, [B] institute, conduct, or defend any legal action in
connection with said Letter of Credit Documents, Property, or Leases, as Bank
may deem necessary or desirable, [C] from time to time, make any or all repairs,
replacements, and alterations to the Property as Bank may deem necessary or
desirable, [D] insure and reinsure the Property on such terms as Bank shall deem
necessary or desirable, [E] lease the Property or any part or parts thereof in
such parcels and for such periods and on such terms as Bank deems desirable,
including Leases for terms expiring after the expiry date of the letter of
credit, [F] cancel or modify any Lease with or without cause, and/or [G] take
whatever measures Bank from time to time deems necessary or desirable to
exercise, enforce, perform, or protect Bank's right, title, or interest in any
or all of the Letter of Credit Documents;
c. Apply the Income collected pursuant to Paragraph B above in
whatever order of priority Bank, in its sole discretion may elect, against [i]
all costs and expenses (including, without limitation, attorneys' fees) incurred
in connection with the operation of the Property, the performance of Borrower's
obligations under the Leases, and collection of the Income thereunder,
including, without limitation, all expenses for maintenance, repairs,
replacements, alterations, special assessments, taxes, and insurance, [ii] all
of the costs and expenses, including, without limitation, reasonable attorneys'
fees, incurred in the collection of any or all of the obligations secured by the
Letter of Credit Documents, including, without limitation, all costs, expenses,
and attorneys' fees incurred in seeking to realize on or to protect or preserve
Bank's interest in any other collateral securing any or all of the obligations
secured by the Letter of Credit Documents, [iii] all other expenses pertaining
to any part or all of the Property or the Leases, [iv] any or all accrued but
unpaid interest on amounts owed under the Reimbursement Agreement or secured by
the Letter of Credit Documents; and [v] any or all unpaid amounts owed under the
Reimbursement Agreement or secured by the Letter of Credit Documents.
d. Right to Exercise Remedies. Bank shall have full right to
exercise any or all of the foregoing remedies without regard to the adequacy of
security for any or all of the amounts secured by the Letter of Credit
Documents, without regard to other security, without releasing Borrower from any
obligation, and with or without the commencement of any legal or equitable
action or the appointment of any receiver or trustee, and shall have full right
to enter upon, take possession of, use, and operate, all or any portion of the
Property which Bank in its sole discretion deems desirable, to effectuate any or
all of the foregoing remedies, and shall be
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255
entitled to exercise, enforce, perform, and protect all of the aforesaid rights,
titles, and interests available to Bank hereunder, as well as all other rights,
titles, and interests available at law or in equity in and to the control,
operation, and management of the Property and Leases. Bank shall not be held
responsible for the failure to exercise diligence in taking any action permitted
hereunder.
e. Expenses and Liabilities of Bank. At the expense of
Borrower, Bank is hereby given the authority to employ agents, attorneys, and
others in exercising, enforcing, performing, or protecting Bank's rights, title,
or interests herein. To the extent that the Income is insufficient, Borrower
agrees to reimburse Bank for all monies advanced by Bank in so exercising,
enforcing, performing, or protecting Bank's rights, titles, or interests herein,
together with interest from day to day on all such advances by Bank, at a rate
equal to the default interest rate specified in the Reimbursement Agreement
(said interest rate being hereby incorporated herein by this reference). In the
event Bank incurs any liability, loss, cost, or damage by reason of this
Assignment, or in the defense of any claim or demand arising out of or in
connection with this Assignment, the amount of such liability, loss, cost, or
damage (including, without limitation, fees in connection with any appeal) shall
be added to the amounts secured by the Letter of Credit Documents, and shall
bear interest at the default interest rate specified in the Reimbursement
Agreement from the date incurred until paid, and shall be payable on demand.
3. GENERAL PROVISIONS
3.1 No Waiver. The failure of Bank at any time to avail itself of any
of the rights or remedies provided herein or in any of the other Letter of
Credit Documents shall not be construed to be a waiver of any of such rights or
remedies, but Bank shall have full power and authority to exercise, enforce,
perform, or protect such rights and remedies at any time or times that it deems
fit, subject to the other terms and conditions hereof. To be effective, any
waiver of any of the terms, covenants, or conditions hereof must be in writing
and shall be valid only to the extent clearly set forth in such writing. This
Assignment shall constitute a prior and continuing first lien on all Income. No
exercise, enforcement, performance, or protective action taken with respect to
any of the rights, titles, and interests assigned or granted herein shall be
construed as a cure of any default in any of the Letter of Credit Documents.
3.2 Remedies Cumulative. By accepting this Assignment, the Bank shall
in no manner be prejudiced in its right to exercise, enforce, perform, or
protect any one or more rights, titles, or interests available to it in any of
the Letter of Credit Documents or at law or in equity, including, without
limitation, its rights to foreclose the lien of the Mortgage or any other right,
title, or interest granted to it by the terms of any of the Letter of Credit
Documents or granted pursuant to applicable law or equity, it being intended
that all of such rights, titles, and interests are cumulative and may be
exercised, enforced, performed, or protected concurrently with or independently
of any one or more of such rights, titles, or interests to the extent deemed
advisable by Bank in the exercise of its sole discretion from time to time. It
is intended that this clause shall be broadly construed so that all remedies
herein provided or otherwise available to
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256
Bank shall continue and be each and all available to Bank until the indebtedness
evidenced or secured by the Letter of Credit Documents shall have been paid in
full.
3.3 Conflict. In the event of any conflict between the respective
assignments of rents and leases contained in the Mortgage and this Assignment,
this Assignment shall prevail. Except with respect to any such conflict, both of
said assignments of rents and leases shall be enforceable collectively or
separately as Bank shall elect from time to time.
3.4 No Mortgagee in Possession. In no event do the parties hereto
intend that Bank will be, nor shall Bank be, a mortgagee in possession by
acceptance of this Assignment or exercise of rights and remedies hereunder.
3.5 Successors and Assigns. This Assignment shall inure to the benefit
of and be binding upon Borrower and Bank and their respective heirs, executors,
legal representatives, successors and assigns subject to the limitations on the
transfer of the Property contained in Paragraph 1.10 of the Mortgage. Whenever a
reference is made in this Assignment to "Borrower" or "Bank", such reference
shall be deemed to include a reference to the heirs, executors, legal
representatives, successors and assigns of Borrower or Bank.
3.6 Terminology. All personal pronouns used in this Assignment, whether
used in the masculine, feminine, or neuter gender, shall include all other
genders, and the singular shall include the plural, and vice versa. Titles of
articles are for convenience only and neither limit nor amplify the provisions
of this Assignment.
3.7 Severability. If any provision of this Assignment or the
application thereof to any person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Assignment and the
application of such provisions to other persons or circumstances shall not be
affected thereby and shall be enforced to the greatest extent permitted by law.
3.8 Applicable Law. This Assignment shall be interpreted, construed,
and enforced according to the laws of the state of Indiana.
3.9 No Third Party Beneficiaries. This Assignment is made solely for
the benefit of Bank and its assigns. No Tenant, nor any other person, shall have
standing to bring any action against Bank as the result of this Assignment, or
to assume that Bank will exercise any remedies provided herein, and no person
other than Bank shall under any circumstances be deemed to be a beneficiary of
any provision of this Assignment. Neither this Assignment nor any action or
inaction on the part of Bank shall constitute an assumption on the part of Bank
of any obligation or liability under any of the Leases.
3.10 No Oral Modifications. Neither this Assignment, nor any provisions
hereof, may be changed, waived, discharged, or terminated orally, but only by an
instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge, or termination is sought.
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3.11 Cross-Default. An event of default by Borrower under this
Assignment shall constitute an event of default under all other Letter of Credit
Documents.
3.12 Counterparts. This Assignment may be executed in any number of
counterparts all of which taken together shall constitute one and the same
instrument, and any of the parties or signatories hereto may execute this
Assignment by signing any such counterpart.
3.13 Further Assurances. At any time and from time to time, upon
request by Bank, Borrower will make, execute, and deliver, or cause to be made,
executed, and delivered, to Bank and, where appropriate, cause to be recorded
and/or filed and from time to time thereafter to be re-recorded and/or refiled
at such time and in such offices and places as shall be deemed desirable by
Bank, any and all such other and further assignments, deeds to secure debt,
mortgages, deeds of trust, security agreements, financing statements,
continuation statements, instruments of further assurance, certificates, and
other documents as may, in the opinion of Bank, be necessary or desirable in
order to effectuate, complete, or perfect, or to continue and preserve [a] the
obligations of Borrower under this Assignment and [b] the interest created by
this Assignment as a first and prior entitlement in and to the Leases and the
Income from the Property. Upon any failure by Borrower so to do, Bank may make,
execute, record, file, re-record and/or refile any and all such assignments,
deeds to secure debt, mortgages, deeds of trust, security agreements, financing
statements, continuation statements, instruments of further assurance,
certificates, and other documents for and in the name of Borrower as may, in the
opinion of Bank, be necessary or desirable in order to effectuate, complete, or
perfect, or to continue and preserve [a] the obligations of Borrower under this
Assignment and [b] the security interest created by this Assignment as a first
and prior security interest upon the Leases and the Income from the Property,
and Borrower hereby irrevocably appoints Bank the agent and attorney-in-fact of
Borrower to do so.
3.14 Notices. All notices, demands or requests provided for or
permitted to be given hereunder shall be in writing and shall be delivered in
person or sent by registered or certified United States mail, postage prepaid,
return receipt requested, or by overnight courier, to the addresses set out
below or to such other addresses as are specified by no less than ten (10) days'
prior written notice delivered in accordance herewith:
If to Bank: FIRSTAR BANK, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn:
If to Borrower: ▇▇▇▇▇▇▇ INNS, INC.
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
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All such notices, demands and requests shall be deemed effectively given and
delivered three (3) days after the postmark date of mailing, the day after
delivery to the overnight courier or, if delivered personally, when received.
Rejection or other refusal to accept or the inability to deliver because of a
changed address of which no notice was given in accordance with the time period
provided herein, shall be deemed to be receipt of the notice, demand, or request
sent.
3.15 Modifications, etc. Borrower acknowledges that this Assignment is
absolute and agrees that no modification or surrender of any security
arrangements, security interests, or collateral pledges shall affect the
validity of this Assignment. Borrower hereby consents and agrees that Bank may
at any time, and from time to time, without notice to or further consent from
Borrower, either with or without consideration, surrender any property or other
security of any kind or nature whatsoever held by it or by any person, firm, or
corporation on its behalf or for its account, securing the indebtedness secured
by the Letter of Credit Documents; substitute for any collateral so held by it,
other collateral of like kind, or of any kind; extend or renew the Letter of
Credit for any period; grant releases, compromises, and indulgences with respect
to Mortgage or this Assignment to any persons or entities now or hereafter
liable thereunder or hereunder; release any guarantor or endorser of the
Reimbursement Agreement or any other of the Letter of Credit Documents; or take
or fail to take any action of any type whatsoever; and no such action which Bank
shall take or fail to take in connection with the Letter of Credit Documents, or
any of them, or any security for the payment of any obligation arising under the
Reimbursement Agreement or secured by any of the Letter of Credit Documents or
for the performance of any obligations or undertakings of Borrower, nor any
course of dealing with Borrower or any other person, shall release Borrower's
obligations hereunder, affect this Assignment in any way, or afford Borrower any
recourse against Bank. The provisions of this Assignment shall extend and be
applicable to all renewals, amendments, extensions, consolidations, and
modifications of the Letter of Credit Documents and the Leases, and any and all
references herein to the Letter of Credit Documents or the Leases shall be
deemed to include any such renewals, amendments, extensions, consolidations, or
modifications thereof.
IN WITNESS WHEREOF, Borrower has executed this Assignment under seal,
as of the day and year first above written.
[Remainder of Page Intentionally Left Blank]
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BORROWER:
▇▇▇▇▇▇▇ INNS, INC.
By:
-----------------------------------------
Print or Type Name:
-------------------------
Title:
--------------------------------------
STATE OF __________________________)
) SS
COUNTY OF _________________________)
Before me, a Notary Public in and for the State and County aforesaid
personally appeared ______________________, who is known to me or was proven by
satisfactory evidence to be the person who executed the within instrument as
_____________________ of ▇▇▇▇▇▇▇ Inns, Inc. and who acknowledged execution as
his free act and deed and the free act and deed of ▇▇▇▇▇▇▇ Inns, Inc.
In witness whereof I have affixed my hand and seal this ____ day of
December, 1999.
--------------------------------------------
Notary Public
Print or Type Name:
-------------------------
My commission Expires:
----------------------
County of Residence:
------------------------
This instrument prepared by:
-------------------------------
L. ▇▇▇▇ ▇▇▇▇▇, ▇▇.
▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇ PLLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
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260
EXHIBIT A
ASSIGNMENT OF LEASES AND RENTS
LEGAL DESCRIPTION
261
ASSIGNMENT AND SUBORDINATION
OF MASTER LEASE
THIS ASSIGNMENT AND SUBORDINATION OF MASTER LEASE (the
"Agreement") is made as of the 22nd day of December, 1999 by ▇▇▇▇▇▇▇ INNS, Inc.,
a Georgia corporation ("Lessor"), and ▇▇▇▇▇▇▇ HOSPITALITY, LLC, a Georgia
limited liability company ("Lessee") for the benefit of FIRSTAR BANK, N.A., a
national banking association ("Bank").
W I T N E S S T H:
WHEREAS, Lessor and Lessee entered into a certain Master Lease
dated as of May 7, 1999 (said Master Lease, together with any and all present or
future modifications, amendments, extensions, and renewals thereof and
supplements thereto, being hereinafter referred to as the "Master Lease"),
whereby Lessee has leased for the purpose of operating and managing the
improvements (the "Project") located upon that certain real property in Elkhart,
Indiana, and described in Exhibit A attached hereto and made a part hereof (the
Project and said real property being hereinafter referred to as the "Property")
and certain other real property also described in the Master Lease; and
WHEREAS, in order to obtain financing for the Property, Lessor
is executing a Mortgage, Assignment of Rents and Security Agreement (the
"Mortgage") to be recorded concurrently herewith, encumbering the Property and
securing Lessor's obligations under a Reimbursement Agreement of even date
herewith entered into in connection with the issuance by Bank of a Letter of
Credit for the account of Lessor in the sum of $3,346,312 (the "Letter of
Credit"); and
WHEREAS, Lessor desires expressly to assign its rights as
Lessor under the Master Lease as additional security for performance of Lessor's
obligations under the Reimbursement Agreement; and
WHEREAS, Lessee desires expressly to subordinate its interests
in the Master Lease insofar as they relate to or are attributable to the
Property to the lien and terms of the Mortgage, subject to the terms hereof; and
WHEREAS, Bank is not willing to issue the Letter of Credit and
enter into the Reimbursement Agreement unless Lessor and Lessee enter into this
Agreement;
NOW THEREFORE, for value received, the receipt and sufficiency
of which is hereby acknowledged, and in order to induce Bank to issue its Letter
of Credit and enter into the Reimbursement Agreement, it is hereby agreed as
follows:
262
1. In the event of any default by either Lessor or Lessee under the
Master Lease, the nondefaulting party shall give Bank written notice of such
default to the address set forth in paragraph 8 below and Bank shall be
permitted an opportunity (not less than thirty days from receipt of said notice)
to cure such default; provided, however, that Bank shall in no event be required
to effect any such cure, and any cure by Bank shall not release Lessor or Lessee
from any of its obligations under the Master Lease. Bank shall have the right to
appear in and defend any action or proceeding purporting to affect the Property
or the rights and powers of Bank hereunder. Lessor agrees to protect, defend,
indemnify and hold Bank harmless from and against any and all losses, damages,
claims, liabilities, costs, and expenses (including but not limited to
attorneys' fees) incurred in connection with any such actions or measures taken
by Bank or otherwise incurred in the exercise of any other rights or remedies of
Bank under this Agreement. Lessor agrees that all sums so expended by Bank in
curing any default by Lessor or Lessee, or in appearing in or defending any
action or proceeding, or in taking any other action permitted hereby, in each
case together with interest thereon at the Default Rate (as defined in the
Reimbursement Agreement) shall be immediately due and payable and shall be
secured by the Mortgage and any other security held for the Reimbursement
Agreement.
2. This Agreement shall inure to the benefit of Bank, its successors
and assigns, and shall bind the parties hereto and their respective successors
and assigns.
3. In the event of a default on the part of Lessor hereunder or under
the Reimbursement Agreement, the Mortgage, or the Master Lease, then, without
regard for the adequacy of the security for the Reimbursement Agreement, Bank
shall have the right (but not the obligation) to [i] take possession of the
Property and exercise and enjoy all right title and interest of Lessor under the
Master Lease with respect to the Property; [ii] whether or not possession of the
Property is taken, to receive all funds, issues, and profits under the Master
Lease which are attributable to the Property and apply the same, less costs and
expenses of taking possession of the Property, operation and collection,
including reasonable attorney fees, upon any indebtedness due under the
Reimbursement Agreement or Mortgage whether or not then due and in such order as
Bank may determine; [iii] enforce or terminate the Master Lease with respect to
the Property, but not with respect to any other properties covered thereby; [iv]
acquire a substitute Lessee acceptable to Bank; and [v] do any acts which Bank
deems proper to protect the Property or Bank's security interest therein or lien
thereon, and thereupon and without further notice to Lessor, Lessor shall not
have any further rights under the Master Lease which would conflict with,
impair, or interfere with any rights of Bank hereunder. Neither Bank's entering
upon and taking possession of the Property nor the exercise of any of the
aforesaid remedies shall cure or waive any such default on the part of Lessor or
waive, modify or affect any notice of default under the Mortgage or invalidate
any act done pursuant to such notice.
4. Lessor and Lessee agree not to modify or terminate the Master Lease
without the prior written consent of Bank. Lessor further agrees the Lessee of
the Property shall not be changed without Bank's prior written consent. Lessor
and Lessee represent that there is no presently existing default by either party
under the Master Lease or other event which with notice and/or the passage of
time may be a default by either party, and that the Master Lease has not been
modified and is currently in full force and effect.
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5. Lessee agrees that any and all liens, rights, and interest owned,
claimed, or held by it, in and to the Property, and any receivables, revenues,
rents, accounts or payments for the use of all or any part of the Property, are
and shall be in all respects subordinate to the lien and security interest
created by the Mortgage and to the rights of Bank under that certain Assignment
of Leases and Rents executed by Lessor in favor of Bank of even date herewith.
In the event of a default by Lessor under the Reimbursement Agreement or
Mortgage [i] Lessee at the written request of Bank shall continue performance
under the Master Lease in accordance with the terms thereof, and [ii] the Master
Lease may, at the option of Bank, be terminated with respect to the Property
upon thirty days written notice by Bank to Lessor and Lessee at no cost or
liability to Bank, notwithstanding anything set forth in the Master Lease to the
contrary. In the event of any sale of the Property pursuant to foreclosure of
the Mortgage, or a deed in lieu of foreclosure, Lessee agrees that it will not
exercise any rights it may have to terminate the Master Lease with respect to
the Property. Notwithstanding the foregoing, Lessee agrees that such foreclosure
or deed in lieu of foreclosure shall operate to cut off, extinguish, and
otherwise terminate all liens that Lessee, and those claiming by, through, or
under Lessee, may now or hereafter have in and to the Property, and Lessee
agrees that Bank or any purchaser at a foreclosure sale under Bank's lien may
terminate the Master Lease with respect to the Property upon foreclosure or at
any time thereafter. Upon any termination of the Master Lease with respect to
the Property, whether or not pursuant to this ▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇ agrees to
deliver copies of all records, files, financial statements, and any other
documents pertaining to management and operation of the Project to Lessor.
6. All notices, demands or requests provided for or permitted to be
given hereunder shall be in writing and shall be delivered in person or sent by
registered or certified United States mail, postage prepaid, return receipt
requested, or by overnight courier, to the addresses set out below or to such
other addresses as are specified by no less than ten (10) days' prior written
notice delivered in accordance herewith:
If to Bank: FIRSTAR BANK, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Commercial Real Estate Department
If to Lessor: ▇▇▇▇▇▇▇ INNS, INC.
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
If to Lessee: ▇▇▇▇▇▇▇ HOSPITALITY, LLC
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
All such notices, demands and requests shall be deemed effectively given and
delivered three (3) days after postmark date of mailing, the date of delivery to
the overnight courier or, if delivered personally, when received. Rejection or
other refusal to accept or the inability to deliver because
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of a changed address of which no notice was given in accordance with the time
period provided herein, shall be deemed to be receipt of the notice, demand, or
request sent.
7. Lessor acknowledges and agrees that any default under, or breach of,
any covenant or representation contained in this Agreement by Lessor shall
constitute an Event of Default under the Mortgage, entitling Bank to exercise
any or all of its rights and remedies provided for thereunder upon the
occurrence of an Event of Default; provided Lessor shall have a period of thirty
(30) days after written notice from Bank in which to cure any such default or
breach under this Agreement. Bank shall not be obligated to perform or
discharge, nor does it hereby undertake to perform or discharge, any obligation,
duty or liability under the Master Lease, and Lessor does hereby agree to
indemnify Bank and hold it harmless from and against any and all liabilities,
claims, demands, losses, damages, costs, and expenses (including but not limited
to attorneys' fees) which Bank may incur under the Master Lease or under or by
reason of this Agreement and of and from any and all claims and demands
whatsoever which may be asserted against it by reason of any alleged or actual
obligation or undertaking on its part to perform or discharge any of the terms,
covenants, or agreements contained in the Master Lease.
8. This Agreement shall be interpreted, construed, and enforced in
accordance with the laws of the State of Indiana. This Agreement may be executed
in counterparts which taken together shall constitute one agreement.
9. In the event any term or provision of this Agreement or the
application thereof to any person or circumstance, the deletion of which would
not adversely affect the receipt of any material benefit hereunder, shall, for
any reason or to any extent be invalid or unenforceable, the remaining terms and
provisions of this Agreement, or the application of any such provision to
persons or circumstances other than those as to whom or which it has been
determined to be invalid or unenforceable, shall not be affected thereby, and
every provision of this Agreement shall be valid and enforceable to the fullest
extent permitted by law.
10. Upon the expiration of the Letter of Credit without any draw having
been made against the Letter of Credit or upon repayment in full of all amounts
due under the Reimbursement Agreement, this Agreement shall become void and of
no effect. Any and all indemnity covenants and agreements contained herein shall
survive the termination of this Agreement and the satisfaction of the
Reimbursement Agreement.
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IN WITNESS WHEREOF, Lessor and Lessee have executed this Agreement as
of the day and year first above written.
LESSOR:
-------
▇▇▇▇▇▇▇ INNS, INC.
By:
----------------------------------------
Print or Type Name:
------------------------
Name:
--------------------------------------
Title:
--------------------------------------
LESSEE:
-------
▇▇▇▇▇▇▇ HOSPITALITY, LLC
By:
----------------------------------------
Print or Type Name:
------------------------
Name:
--------------------------------------
Title:
--------------------------------------
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266
STATE OF ______________________)
) ss
COUNTY OF______________________)
Before me, a Notary Public in and for the State and County aforesaid
personally appeared ______________________, who is known to me or was proven by
satisfactory evidence to be the person who executed the within instrument as
_____________________ of ▇▇▇▇▇▇▇ Inns, Inc. and who acknowledged execution as
his free act and deed and the free act and deed of ▇▇▇▇▇▇▇ Inns, Inc.
In witness whereof, I have affixed my hand and seal this __ day of
December, 1999.
-------------------------------------
Notary Public
Print or Type Name:
------------------
My commission Expires:
--------------------
County of Residence:
--------------------
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267
STATE OF __________________________)
) SS
COUNTY OF _________________________)
Before me, a Notary Public in and for the State and County aforesaid
personally appeared ______________________, who is known to me or was proven by
satisfactory evidence to be the person who executed the within instrument as
_____________________ of ▇▇▇▇▇▇▇ Hospitality, LLC. and who acknowledged
execution as his free act and deed and the free act and deed of ▇▇▇▇▇▇▇
Hospitality, LLC.
In witness whereof, I have affixed my hand and seal this __ day of
December, 1999.
-------------------------------------
Notary Public
Print or Type Name:
------------------
My commission Expires:
--------------------
County of Residence:
--------------------
This instrument prepared by:
-------------------------------
L. ▇▇▇▇ ▇▇▇▇▇, ▇▇.
▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇, PLLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
7
268
EXHIBIT A
(LEGAL DESCRIPTION)
8
269
ENVIRONMENTAL INDEMNITY AGREEMENT
THIS ENVIRONMENTAL INDEMNITY AGREEMENT (this "Agreement") is
made the 22nd day of December, 1999 by ▇▇▇▇▇▇▇ INNS, INC., a Georgia Corporation
("Indemnitor"), to and for the benefit of FIRSTAR BANK, N.A., a National Banking
Association ("Bank").
RECITALS
A. Indemnitor is the present owner of the real property more
particularly described in Exhibit A attached hereto and certain other interests
and personal property more particularly described in the Mortgage (collectively,
the "Property");
B. Pursuant to a Commitment for issuance of a Letter of Credit dated
October 15th, 1999, Indemnitor will execute and deliver to Bank a Reimbursement
Agreement of even date herewith, secured by, among other things, a Mortgage,
Assignment of Rents, and Security Agreement of even date herewith (the
"Mortgage") encumbering the Property described in the Mortgage; and
C. As a condition precedent to entering into the Reimbursement
Agreement, Bank requires the execution of this Agreement.
AGREEMENTS
NOW, THEREFORE, in order to induce Bank to issue its Letter of
Credit and to enter into the Reimbursement Agreement secured by a Mortgage on
the Property, and in consideration of the matters described in the foregoing
Recitals, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Indemnitor hereby agrees as
follows:
2. Recitals. The Recitals are incorporated herein by reference.
3. Covenants, Representations and Warranties of Indemnitor.
(a) Indemnitor represents and warrants that except as
disclosed in the report of EMG, Inc. dated December 22, 1998, no Hazardous
Materials (as defined below) exist on, under or about the Property or, to the
best of Indemnitor's knowledge after diligent inquiry, have been transported to
or from the Property or used, generated, manufactured, stored or disposed of on,
under or about the Property, and the Property is not in violation of any
federal, state or local law, ordinance or regulation relating to industrial
hygiene or the environmental conditions on, under or about the Property,
including, without limitation, soil and groundwater conditions. Hazardous
Materials shall include: [i] oil, flammable substances, explosives, radioactive
materials, hazardous wastes or substances, toxic wastes or substances or any
other materials or pollutants which pose a hazard to the Property or to persons
on or about the Property, cause the Property to be in violation of any local,
state or federal law or regulation, or are defined as or included in the
definition of
270
"hazardous substances", "hazardous wastes", "hazardous materials", "toxic
substances", "contaminants", "pollution", or words of similar import under any
applicable local, state or federal law or under the regulations adopted or
publications promulgated pursuant thereto, including, but not limited to: (A)
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, 42 U.S.C. ss.9601, et seq.; (B) the Hazardous Materials
Transportation Act, as amended, 49 U.S.C. ss.1801, et seq.; (C) the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. ss.6901, et seq.; and (D)
regulations adopted and publications promulgated pursuant to the aforesaid laws;
[ii] asbestos in any form which is or could become friable, urea formaldehyde
foam insulation, transformers or other equipment which contain dielectric fluid
containing levels of polychlorinated biphenyls in excess of fifty (50) parts per
million; [iii] underground storage tanks; and [iv] any other chemical, material
or substance, exposure to which is prohibited, limited or regulated by any
governmental authority or may or could pose a hazard to the health and safety of
the occupants of the Property or the owners and/or occupants of property
adjacent to or surrounding the Property. As used in this Agreement, the term
"Hazardous Materials law" shall include laws, rules, regulations, statutes, and
requirements pertaining or relating to Hazardous Materials.
(b) Indemnitor shall, at its sole cost and expense, prevent
the imposition of any lien against the Property for the cleanup of any Hazardous
Material, and shall comply and cause [i] all tenants under any lease or
occupancy agreement affecting any portion of the Property, and [ii] any other
person or entity on or occupying the Property, to comply with all federal, state
and local laws, regulations, rules, ordinances and policies concerning the
environment, health and safety and relating to the presence, generation, use,
handling, production, disposal, discharge or storage of Hazardous Materials in,
on or about the Property. Without limiting the generality of the foregoing,
Indemnitor represents, covenants and agrees that the Property does not and will
not contain any Hazardous Materials. Indemnitor hereby grants to Bank, its
agents, employees, consultants and contractors an irrevocable license to enter
upon the Property and to perform such tests on the Property as are necessary in
Bank's sole discretion to conduct an investigation and/or review.
(c) Indemnitor shall promptly take any and all necessary
remedial action in response to the presence, storage, use, disposal,
transportation or discharge of any Hazardous Materials on, under or about the
Property; provided, however that Indemnitor shall not, without Bank's prior
written consent, take any remedial action in response to the presence,
generation, use, handling, production, disposal, discharge or storage of any
Hazardous Materials on, under, or about the Property, nor enter into any
settlement agreement, consent decree, or other compromise in respect to any
claims, proceedings, lawsuits or actions, completed or threatened pursuant to
any Hazardous Materials laws or in connection with any third party, if such
remedial action, settlement, consent or compromise might, in Bank's sole
determination, impair the value of Bank's security for Indemnitor's obligations
under the Reimbursement Agreement and Mortgage; Bank's prior consent shall not,
however, be necessary in the event that the presence, generation, use, handling,
production, disposal, discharge or storage of Hazardous Materials on, under, or
about the Property either [i] poses an immediate threat to the health, safety or
welfare of any individual, or [ii] is of such a nature that an immediate
remedial response is necessary and it is not possible to obtain Bank's consent
prior to undertaking such action. In the event Indemnitor undertakes any
remedial action with respect to any Hazardous Materials on, under or about the
Property, Indemnitor shall
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immediately notify Bank of any such remedial action, and shall conduct and
complete such remedial action (A) in compliance with all applicable federal,
state and local laws, regulations, rules, ordinances and policies, (B) to the
satisfaction of Bank, and (C) in accordance with the orders and directives of
all federal, state and local governmental authorities.
(d) Indemnitor shall protect, defend, indemnify and hold Bank,
its parent corporation, subsidiaries and affiliates, and each of their
directors, officers, employees and agents, and any successors to Bank's interest
in the Property, and any other person or entity who acquires any portion of the
Property at a foreclosure sale, by the receipt of a deed in lieu of foreclosure,
or otherwise through the exercise of Bank's rights and remedies under the
Reimbursement Agreement or Mortgage, and any successors to any such other person
or entity, and all directors, officers, employees and agents of all of the
aforementioned indemnified parties, harmless from and against any and all
claims, proceedings, lawsuits, liabilities, damages, losses, fines, penalties,
judgments, awards, costs and expenses (including, without limitation, attorneys'
fees and costs and expenses of investigation) which arise out of or relate in
any way to any presence, generation, use, handling, production, transportation,
disposal, discharge or storage of any Hazardous Materials in, on or about the
Property whether by Indemnitor or any tenant or any other person or entity,
including, without limitation: [i] all foreseeable and all unforeseeable
consequential damages directly or indirectly arising out of (A) the presence,
generation, use, handling, production, disposal, discharge or storage of
Hazardous Materials by Indemnitor, any prior owner or operator of the Property,
or any person or entity on or about the Property, or (B) any residual
contamination affecting any natural resource or the environment, and [ii] the
costs of any required or necessary repair, cleanup, or detoxification of the
Property and the preparation of any closure or other required plans (all such
claims, proceedings, lawsuits, liabilities, losses, fines, penalties, costs,
damages, and expenses referred to in this subparagraph (d) hereafter referred to
as "Expenses"). The foregoing indemnification obligations of Indemnitor shall
survive satisfaction of the Mortgage, and any foreclosure thereunder or a deed
in lieu of foreclosure. In addition, Indemnitor agrees that in the event any
Hazardous Material is caused to be removed from the Property by Indemnitor,
Bank, or any other person or entity, the number assigned by the Environmental
Protection Agency to such Hazardous Material shall be solely in the name of
Indemnitor, and Indemnitor shall assume any and all liability for such removed
Hazardous Material. In the event Bank pays any Expenses, such Expenses shall be
additional indebtedness secured by the Mortgage and shall become immediately due
and payable without notice and with interest thereon at the default rate
specified in the Reimbursement Agreement.
(e) In the event that Indemnitor shall fail to timely comply
with the provisions of this ▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ may, but shall not be obligated
to, either [i] declare that an event of default shall have occurred, and/or [ii]
in addition to any rights granted to Bank hereunder, do or cause to be done
whatever is necessary to cause the Property to comply with the applicable law,
rule, regulation or order, and the cost thereof shall be additional indebtedness
secured by the Mortgage and shall become immediately due and payable without
notice and with interest thereon at the default rate specified in the
Reimbursement Agreement. Indemnitor shall give Bank and its agents and employees
access to the Property for the purpose of effecting such compliance and hereby
specifically grants to Bank an irrevocable license, effective (x) immediately
if, in the opinion of
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272
Bank, irreparable harm to the environment, the Property, or persons or material
amounts of property is imminent, or (y) otherwise, upon expiration of the
applicable cure period, to do whatever necessary to cause the Property to so
comply, including, without limitation, to enter the Property and remove
therefrom any Hazardous Materials. Indemnitor shall pay or reimburse Bank for
any and all loss, cost, damage and expense (including, without limitation,
attorneys' fees and costs incurred in the investigation, defense and settlement
of claims) that Bank may incur as a result of or in connection with the
assertion against Bank of any claims relating to the presence or removal of any
Hazardous Material, or compliance with any federal, state or local laws, rules,
regulations or orders relating thereto, and the amount(s) thereof shall be
additional indebtedness secured by the Mortgage and shall become immediately due
and payable without notice and with interest thereon at the default rate
specified in the Reimbursement Agreement.
4. Duration of Indemnity. This Agreement shall not be construed to
impose any liability on Indemnitor for loss or damage resulting from any
Hazardous Material first placed on the Property after Bank shall have become
owner of the Property, but shall be fully applicable to conditions existing both
before and after Bank became owner of the Property.
5. Notices from Indemnitor. Indemnitor shall immediately advise Bank in
writing of [i] any governmental or regulatory actions instituted or threatened
under any Hazardous Material law affecting the Property or the matters
indemnified hereunder including, without limitation, any notice of inspection,
abatement or noncompliance, [ii] all claims made or threatened by any third
party against Indemnitor or the Property relating to damage, contribution, cost
recovery, compensation, loss or injury resulting from any Hazardous Material,
[iii] Indemnitor's discovery of any occurrence or condition on any real property
adjoining or in the vicinity of the Property that could cause the Property to be
classified in a manner which may support a claim under any Hazardous Material
law, and [iv] Indemnitor's discovery of any occurrence or condition on the
Property or any real property adjoining or in the vicinity of the Property which
could affect transferability or use of the Property under any Hazardous Material
law. Indemnitor shall immediately deliver to Bank any documentation or records
as Bank may request in connection with all such notices, inquiries, and
communications above and shall advise Bank of any subsequent developments.
6. Notice of Claims Against Bank. Bank shall give written notice to
Indemnitor of any action against Bank which might give rise to a claim by Bank
against Indemnitor under this Agreement. If any action is brought against Bank,
Indemnitor, at Bank's sole option and Indemnitor's expense, may be required to
defend against such action with counsel satisfactory to Bank and, with Bank's
sole consent and approval, to settle and compromise any such action. However,
Bank may elect to be represented by separate counsel, at Indemnitor's expense,
and if Bank so elects any settlement or compromise shall be effected only with
the consent of Bank. Bank may elect to join and participate in any settlements,
remedial actions, legal proceedings or other actions included in connection with
any claims under this Agreement.
7. Payment of Bank's Expenses. If Bank retains counsel for advice or
other representation [i] with respect to this Agreement, [ii] in any litigation,
contest, dispute, suit or
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273
proceeding (whether instituted by Bank, Indemnitor, or any other party) in any
way relating to this Agreement and the agreements or the indemnities described
herein, or [iii] to enforce Indemnitor's obligations hereunder, then all of the
reasonable attorneys' fees arising from such services and all expenses and costs
shall be payable on demand by Indemnitor to Bank unless Indemnitor is adverse to
Bank in any such action and is the prevailing party therein.
8. Waivers. Indemnitor hereby waives notice of, and Indemnitor's
liability is in no way limited or impaired by: (a) Bank's acceptance of this
Agreement; (b) Indemnitor's grant to Bank of a security interest, lien or
encumbrance in any of the Indemnitor's assets; (c) Bank's modification of this
Agreement or Indemnitor's or any other party's obligations hereunder, or any
release, waiver or modification of any security interest, lien or encumbrance in
any other party's guaranty or any other Letter of Credit Document (as defined in
the Reimbursement Agreement); (d) Bank's amendment of the Reimbursement
Agreement or any other agreement or instrument referred to therein; (e)
presentment, demand, notice of default, nonpayment, partial payment and protest,
and all other notices or formalities to which Indemnitor may be entitled; (f)
extensions of time of payment of the Note or for performance required by any of
the Letter of Credit Documents granted to Indemnitor; (g) any sale or transfer
of all or any part of the Property by Indemnitor, whether by operation of law,
voluntary acts, or otherwise; and (h) acceptance from Indemnitor (or any other
party) of any partial payment or payments on the Reimbursement Agreement or any
collateral securing the payment thereof or the settlement, subordination,
discharge or release of the Reimbursement Agreement. Indemnitor agrees that Bank
may have or at any time may do any or all of the foregoing actions in such
manner, upon such terms and at such times as Bank, in its sole discretion, deems
advisable, without in any way impairing, affecting, reducing or releasing
Indemnitor from its obligations under this Agreement, and Indemnitor hereby
consents to each of the foregoing actions.
9. No Waiver. Indemnitor's obligations hereunder shall in no way be
impaired, reduced or released by reason of (a) Bank's omission or delay to
exercise any right described herein; or (b) any act or omissions of Bank in
connection with any notice, demand, warning or claim regarding violations of
codes, laws or ordinances governing the Property.
10. Separate Action. Indemnitor agrees that the indemnifications
contained in this Agreement are separate, independent of and in addition to
Indemnitor's undertakings under the Reimbursement Agreement, the Mortgage, and
the other Letter of Credit Documents. Indemnitor agrees that a separate action
may be brought to enforce the provisions of this Agreement which shall in no way
be deemed to be an action on the Reimbursement Agreement, the Mortgage, and the
other Letter of Credit Documents, whether or not Bank would be entitled to a
deficiency judgment following a judicial foreclosure or trustee's sale under the
Mortgage.
11. Payments. Payments under this Agreement in respect of all Expenses
shall be due and payable as such Expenses are incurred. Within a reasonable time
after any such Expenses are incurred, Bank shall give notice thereof to
Indemnitor; provided, however, that failure by Bank to give such notice shall
not relieve Indemnitor from any liability, duty or obligation hereunder.
Indemnitor will pay interest on any amount not paid from the date that notice of
such Expenses was
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given at the default rate of interest specified in the Reimbursement Agreement,
but in no event to exceed the maximum interest rate allowed by law.
12. Proceedings. In any action or proceeding that may be brought
against Bank or to which Bank may be a party and which relates to the subject
matter of this Agreement, Indemnitor shall be conclusively liable for the
results obtained by Bank with Indemnitor's consent (which consent shall not be
unreasonably withheld or delayed), including, without limitation, the amount of
any judgment or any good faith, out-of-court settlement or compromise. In
addition, Indemnitor shall be liable for any and all costs and expenses,
including, but not limited to, all attorneys' fees, that Bank incurs in
connection with any such action or proceeding as provided in Section 3 above.
13. Successors and Assigns. This Agreement and the indemnities
contained in this Agreement shall be continuing, irrevocable and binding on the
Indemnitor and its respective successors and assigns, and shall inure to the
benefit of Bank and Bank's successors and assigns.
14. Survival. All representations and warranties of Indemnitor
contained in this Agreement shall survive the execution and delivery of this
Agreement. All agreements and liabilities of Indemnitor under this Agreement
shall survive the exercise by Bank of its rights and remedies under the Letter
of Credit Documents, including, without limitation, the release or foreclosure
of the Mortgage, or the exercise of any power of sale contained therein, or
delivery of a deed in lieu of foreclosure.
15. Notices. All notices, demands or requests provided for or permitted
to be given hereunder, shall be in writing and shall be delivered in person or
sent by registered or certified United States mail, postage prepaid, return
receipt requested, or by overnight courier, to the addresses set out below or to
such other addresses as are specified by no less than ten (10) days' prior
written notice delivered in accordance herewith:
If to Indemnitor: ▇▇▇▇▇▇▇ INNS, INC.
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
If to Bank: FIRSTAR BANK, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Commercial Real Estate Department
All such notices, demands and requests shall be deemed
effectively given and delivered three (3) days after the postmark date of
mailing, the day after delivery to the overnight courier or, if delivered
personally, when received. Rejection or other refusal to accept or the inability
to deliver because of a changed address of which no notice was given in
accordance with
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the time period provided herein, shall be deemed to be receipt of the notice,
demand, or request sent.
16. Entire Agreement. This Agreement constitutes the entire agreement
and supersedes all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter contained in this
Agreement.
17. Amendment and Waiver. This Agreement may be amended and observance
of any term of this Agreement may be waived only with the written consent of
Bank.
18. Governing Law. This Agreement shall be governed and controlled as
to interpretation, enforcement, validity, construction, effect and in all other
respects by the laws, statutes and decisions of the State of Indiana.
19. Severability. All provisions contained in this Agreement are
severable and the invalidity or unenforceability of any provisions shall not
affect or impair the validity or enforceability of the remaining provisions of
this Agreement.
20. Headings. The descriptive headings of the paragraphs of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
IN WITNESS WHEREOF, this Agreement has been executed as of the date
first above written.
▇▇▇▇▇▇▇ INNS, INC.
By:
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Title:
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