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EXHIBIT 10.28
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LOAN AGREEMENT
BETWEEN
THE MECKLENBURG COUNTY INDUSTRIAL FACILITIES
AND POLLUTION CONTROL FINANCING AUTHORITY
AND
STERIGENICS INTERNATIONAL
Dated as of
March 1, 1996
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Relating to the Issuance of:
$9,000,000
The Mecklenburg County Industrial Facilities and
Pollution Control Financing Authority
Industrial Development Revenue Bonds
(SteriGenics International Project), Series 1996
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Certain rights of The Mecklenburg County Industrial Facilities and
Pollution Control Financing Authority (the "Issuer") under this Loan Agreement
have been assigned and pledged to, and are subject to a security interest in
favor of Bank One, Columbus, N.A. Columbus, Ohio, as trustee (the "Trustee")
under the Indenture of Trust, dated as of even date herewith, as amended or
supplemented from time to time, between the Issuer and the Trustee, which
secures $9,000,000 in aggregate principal amount of the Issuer's Industrial
Development Revenue Bonds (SteriGenics International Project), Series 1996.
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LOAN AGREEMENT
TABLE OF CONTENTS
(The Table of Contents for this Loan Agreement is for convenience of reference
only and is not intended to define, limit or describe the scope or intent of any
provisions of this Loan Agreement.)
ARTICLE I
DEFINITIONS AND CERTAIN RULES OF INTERPRETATION 2
Section 1.1. Definitions 2
Section 1.2. Certain Rules of Interpretation 4
Section 1.3. Other Defined Terms 4
ARTICLE II
REPRESENTATIONS 5
Section 2.1. Representations by the Issuer 5
Section 2.2. No Representation or Warranty by Issuer as to Project 6
Section 2.3. Representations by the Company 6
Section 2.4. Modification and Termination of Special Tax Covenants 8
Section 2.5. Purchase of Bonds by Issuer and Company 8
Section 2.6. Further Assurances 8
ARTICLE III
ISSUANCE OF THE BONDS; ACQUISITION, CONSTRUCTION,
INSTALLATION AND FINANCING OF PROJECT 9
Section 3.1. Acquisition, Construction and Equipping of the Project 9
Section 3.2. Agreement to Issue Bonds; Application of Proceeds; Project Fund
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Section 3.3. [INTENTIONALLY OMITTED] 9
Section 3.4. [INTENTIONALLY OMITTED] 9
Section 3.5. Limitation of Issuer's Liability 9
Section 3.6. Disclaimer of Warranties 9
Section 3.7. Cost of Project 10
Section 3.8. [INTENTIONALLY OMITTED] 10
Section 3.9. Investment of Funds 10
Section 3.10. Special Arbitrage Certifications 10
Section 3.11. Depositories of Moneys and Security for Deposit 10
ARTICLE IV
PROVISIONS FOR PAYMENT 11
Section 4.1. Title to the Project 11
Section 4.2. Payment Obligations of the Company 11
Section 4.3. Credit Facility; Alternate Credit Facility; Confirmation;
Substitute Confirmation 12
Section 4.4. Administrative Expenses 13
Section 4.5. Obligations of the Company Absolute and Unconditional 13
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Section 4.6. Company Consent to Assignment of Loan Agreement
and Execution of Indenture 14
Section 4.7. Company's Performance Under Indenture 14
ARTICLE V
PARTICULAR AGREEMENTS 15
Section 5.1. Maintenance, Operation and Insuring of Project; Taxes;
No Operation of Project by Issuer 15
Section 5.2. Local Government Commission's, Issuer's, Trustee's and
Paying Agent's Expenses; Release and Indemnification
Provisions 15
Section 5.3. Maintenance of Existence 16
Section 5.4. [INTENTIONALLY OMITTED] 16
Section 5.5. Agreement of Issuer Not to Assign or Pledge 16
Section 5.6. Redemption of Bonds 16
Section 5.7. Reference to Bonds Ineffective After Bonds Paid 17
Section 5.8. Assignment, Sale or Lease of Project 17
Section 5.9. Non-Arbitrage Covenant 17
Section 5.10. Notice of Bonds Outstanding and Owners of Bonds 17
Section 5.11. Financing Statements 17
Section 5.12. Arbitrage Rebate 18
Section 5.13. Use of Proceeds; Tax Covenants and Other Matters 18
Section 5.14. Compliance with Reimbursement Agreement 21
Section 5.15. Inspection of Project 21
Section 5.16. Project List 21
Section 5.17. No Warranty of Condition or Suitability by Issuer 21
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES 22
Section 6.1. Events of Default Defined 22
Section 6.2. Remedies 23
Section 6.3. No Remedy Exclusive 24
Section 6.4. Agreement to Pay Counsel Fees and Expenses 24
Section 6.5. Waiver of Events of Default and Rescission of Acceleration 24
ARTICLE VII
PREPAYMENT UNDER LOAN AGREEMENT 25
Section 7.1. Option to Prepay in Full 25
Section 7.2. Mandatory Prepayment 25
Section 7.3. Option to Prepay in Part 25
Section 7.4. Relation of Options to Indenture 25
Section 7.5. Obligations After Payment of Note and Termination
of Loan Agreement 25
ARTICLE VIII
MISCELLANEOUS 26
Section 8.1. Term of Loan Agreement 26
Section 8.2. Notices 26
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Section 8.3. Binding Effect 27
Section 8.4. Severability 27
Section 8.5. Amounts Remaining in Bond Fund 27
Section 8.6. Reliance by Issuer 27
Section 8.7. Issuer's Obligations Limited 27
Section 8.8. Immunity of Directors, Officers and Employees of Issuer and
the Local Government Commission 28
Section 8.9. Payments by Credit Provider; Confirming Bank 28
Section 8.10. Amendments, Changes and Modifications 28
Section 8.11. Counterparts 28
Section 8.12. Captions 29
Section 8.13. Amendment of Loan Agreement 29
Section 8.14. Law Governing Construction of Loan Agreement 29
Section 8.15. No Third Party Beneficiary 29
EXHIBIT A DESCRIPTION OF PROJECT
EXHIBIT B FORM OF NOTE
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LOAN AGREEMENT
This LOAN AGREEMENT (the "Loan Agreement") is entered into as of March 1,
1996, between THE MECKLENBURG COUNTY INDUSTRIAL FACILITIES AND POLLUTION CONTROL
FINANCING AUTHORITY (the "Issuer"), a political subdivision and body corporate
and politic, duly organized and existing under the laws of the State of North
Carolina, and STERIGENICS INTERNATIONAL, a California corporation (the
"Company");
PREAMBLES
WHEREAS, the Issuer is a political subdivision and body corporate and
politic, duly organized and existing under the State of North Carolina pursuant
to the Industrial and Pollution Control Facilities Financing Act, Chapter 159C
of the North Carolina General Statutes, as amended (the "Act"), with full lawful
power and authority to enter into this Loan Agreement by and through its
governing body;
WHEREAS, the Issuer is authorized by the provisions of the Act to issue
its revenue bonds from time to time and lend the proceeds thereof to a private
corporation as provided in the Act for the purpose of paying for all or any part
of an industrial or manufacturing facility, including an industrial development
facility such as the Project (as hereinafter defined) authorized under the Act;
WHEREAS, the Issuer is further authorized by the provisions of the Act to
mortgage and pledge any or all of such facilities, whether then owned or
thereafter acquired, as security for the payment of the principal of, premium,
if any, and interest on any such revenue bonds issued thereunder and any
agreements made in connection therewith and to pledge or assign the revenues and
receipts from such facilities or loan or from any other source to the payment of
such bonds;
WHEREAS, by resolution adopted pursuant to and in accordance with the
provisions of the Act, the Issuer has determined that the financing of (i) the
acquisition of an approximately 5.5 acre site at 10811 ▇▇▇▇▇▇▇ Cove Park Drive,
Charlotte, Mecklenburg County, North Carolina, (ii) the acquisition,
construction and equipping of an approximately 64,000 square foot contract
radiation sterilization processing facility thereon and (iii) the acquisition
and installation of machinery, equipment and other personal property to be used
in connection therewith, to be used primarily for the sterilization of health
care, laboratory, pharmaceutical and packaging products (collectively, the
"Project"), which constitutes an industrial project under the Act, is in the
public interest and has authorized and undertaken to finance the Project and to
obtain the funds therefor by the issuance of its $9,000,000 Industrial
Development Revenue Bonds (SteriGenics International Project), Series 1996 (the
"Bonds") under an Indenture of Trust securing such Bonds, between the Issuer and
Bank One, Columbus, N.A., as trustee (the "Trustee"), dated as of the date
hereof (the "Indenture");
WHEREAS, the Issuer proposes to loan the proceeds for the sale of the
Bonds to the Company to finance the costs of the Project upon the terms and
conditions hereinafter set forth;
WHEREAS, the Company has agreed under this Loan Agreement to make, or
cause to be made, payments sufficient to pay when due (whether at stated
maturity, upon redemption, by acceleration, upon purchase or otherwise) the
principal of, premium, if any, and interest on the Bonds; and
WHEREAS, in order to further secure the Company's obligation to make the
payments due under this Loan Agreement and to provide for the purchase of Bonds,
the Company and Comerica Bank California (the "Credit Provider") have entered
into the Reimbursement Agreement (as defined below) pursuant to which the Credit
Provider will issue its irrevocable, direct pay letter of credit in an amount
not
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to exceed $9,148,000 in favor of the Trustee at the request and for the account
of the Company upon the terms set forth in the Reimbursement Agreement, and
which will be confirmed by Comerica Bank, a Michigan state banking corporation
(the "Confirming Bank"), through the issuance of its confirmation letter (the
"Confirmation") providing for the Confirming Bank to honor conforming drawings
under the Credit Facility to the extent that such drawings are not honored by
the Credit Provider in accordance with the terms and conditions of the Credit
Facility.
NOW THEREFORE, for and in consideration of the premises and the respective
representations and agreements and mutual covenants contained in this Loan
Agreement, the Issuer and the Company covenant and agree as follows:
ARTICLE I
DEFINITIONS AND CERTAIN RULES OF INTERPRETATION
Section 1.1. DEFINITIONS. In addition to the words and terms elsewhere
defined herein, the following words and terms as used herein shall have the
following meanings unless the context or use clearly indicates another or
different meaning or intent, and any other words and terms defined in the
Indenture shall have the same meanings when used herein as assigned them in the
Indenture unless the context or use clearly indicates another or different
meaning or intent:
"CHAIRMAN" means the Chairman or the Vice Chairman of the Issuer.
"COMPANY DOCUMENTS" means this Loan Agreement, the Note, the Placement and
Remarketing Agreement and the Credit Provider Documents.
"COST OF PROJECT" with respect to the Project shall be deemed to include
the cost of all items permitted to be financed under the provisions of the Act,
including those items set forth in Section 3.7.
"COUNTY " means the County of Mecklenburg, North Carolina, a political
subdivision of the State.
"CREDIT PROVIDER DOCUMENTS" means the Reimbursement Agreement, the
Environmental Indemnity, the Deed of Trust and the Security Agreement.
"CREDIT PROVIDER REPRESENTATIVE" means each person at the time designated
to act on behalf of the Credit Provider by written certificate furnished to the
Company and the Trustee containing the specimen signature of each such person
and signed on behalf of the Credit Provider by a Vice President or its
President. Such Certificate may designate an alternate or alternates.
"DEED OF TRUST" means the Deed of Trust dated as of March 1, 1996,
executed and delivered by the Company to the deed of trust trustee named therein
for the benefit of the Credit Provider, as amended, modified or supplemented
from time to time.
"DEFAULT" means an event or condition the occurrence of which would, with
the lapse of time or the giving of notice or both, become an Event of Default
hereunder.
"EVENT OF DEFAULT" means one of the events so denominated and described in
Section 6.1 hereof.
"ENVIRONMENTAL INDEMNITY" means the unsecured environmental indemnity
agreement dated as of March 1, 1996 by and between the Company and the Credit
Provider.
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"INDENTURE" means the Indenture of Trust, of even date herewith, between
the Issuer and the Trustee, pursuant to which the Bonds are to be issued and
secured, including any amendments, supplements, alterations or modifications
thereto from time to time.
"INDEPENDENT ARCHITECT" means an architect, engineer or firm of architects
or engineers selected by the Company, which architect, engineer or firm of
architects or engineers must have no specific interest, direct or indirect, in
the Company, and, in the case of individual, must not be a director, officer or
employee of the Company and, in the case of a firm, must not have a partner,
director, officer or employee who is a director, officer or employee of the
Company.
"INDEPENDENT COUNSEL" means an attorney, or firm thereof, admitted to
practice law before the highest court of any state in the United States of
America or the District of Columbia and not an employee on a full-time basis of
either the Issuer, the Trustee, the Credit Provider or the Company (but who or
which may be regularly retained by any one or more of them).
"INDEPENDENT ENGINEER" means an engineer or engineering firm registered
and qualified to practice the profession of engineering under the laws of the
State and not an employee on a full-time basis of either the Issuer or the
Company (but who or which may be regularly retained by either).
"LOAN AGREEMENT" means this Loan Agreement as it now exists and as it may
hereafter be amended, modified or supplemented from time to time pursuant to
Article XII of the Indenture.
"LOCAL GOVERNMENT COMMISSION" or "LGC" means the Local Government
Commission of North Carolina, a division of the Department of State Treasurer,
and any successor or successors thereto.
"NET PROCEEDS OF SALE OF THE BONDS" means those proceeds of the sale of
the Bonds remaining after payment of all expenses in connection with the
issuance of the Bonds and the deposit of all accrued interest (if any) received
from the sale of the Bonds in the Bond Fund.
"NOTE" means the promissory note of the Company in the principal amount of
$9,000,000, dated as of March 8, 1996, in the form attached hereto as Exhibit B,
issued pursuant hereto and delivered to the Issuer as consideration for the loan
of the proceeds of the Bonds for the acquisition, construction and equipping of
the Project, and any amendment or supplement thereto or substitution therefor.
"OWNER" or "OWNERS" means the registered owner of any Bond shown on the
bond registration books kept by the Paying Agent as Registrar.
"PAYMENT IN FULL OF THE BONDS" specifically encompasses the situations
referred to in Article XI of the Indenture.
"PLEDGED REVENUES" means and shall include:
(a) the payments required to be made by or on behalf of the Company
under this Loan Agreement except payments to (i) the Trustee and the
Paying Agent for services rendered as Trustee under the Indenture and as
Paying Agent for the Bonds and payments to be made to any Co-Trustee for
services rendered under the Indenture and (ii) expenses, indemnification
and other payments required to be made pursuant to Sections 5.2 and 6.4
hereof;
(b) all moneys and securities from time to time held by the Trustee
under the Indenture in any fund or account (other than the Rebate Fund)
and any proceeds which arise with respect to 3
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any disposition of any of the property, money, securities and interests
granted by the Issuer to the Trustee under the Granting Clause of the
Indenture; and
(C) all moneys received by the Trustee from time to time as a result
of a draw under the Credit Facility or the Confirmation, if applicable.
"PROJECT" means (i) the acquisition of an approximately 5.5 acre site at
10811 ▇▇▇▇▇▇▇ Cove Park Drive, Charlotte, Mecklenburg County, North Carolina,
(ii) the acquisition, construction and equipping of an approximately 64,000
square foot contract radiation sterilization processing facility thereon and
(iii) the acquisition and installation of machinery, equipment and other
personal property to be used in connection therewith, to be used primarily for
the sterilization of health care, laboratory, pharmaceutical and packaging
products, as more fully described on Exhibit A hereto.
"SECRETARY" means the Secretary or Assistant Secretary of the Issuer.
"SECURITY AGREEMENT" means the Security Agreement dated as of March 1,
1996, between the Company and the Credit Provider, as amended, modified or
supplemented from time to time.
"TAX REGULATORY AGREEMENT" means the Arbitrage and Tax Regulatory
Agreement dated as of March 1, 1996 executed among the Issuer, the Company and
the Trustee.
TRUSTEE FEES" means the periodic fees and expenses charged by the Trustee
in order to serve as Trustee under the Indenture.
"U.C.C." means the Uniform Commercial Code of the State, as now or
hereafter amended.
Section 1.2. CERTAIN RULES OF INTERPRETATION. The definitions set forth in
Section 1. I shall be equally applicable to both the singular and plural forms
of the terms therein defined and shall cover all genders.
"HEREIN," "HEREBY," "HEREUNDER," "HEREOF," "HEREINBEFORE," "HEREINAFTER"
and other equivalent words refer to this Loan Agreement and not solely to the
particular Article, Section or subdivision hereof in which such word is used.
Reference herein to an Article number (eg., Article IV) or a Section
number (eg., Section 6.2) shall be construed to be a reference to the designated
Article number or Section in this Loan Agreement unless the context or use
clearly indicates another or different meaning or intent.
Section 1.3. OTHER DEFINED TERMS. Capitalized terms used herein and not
otherwise defined in this Loan Agreement shall have the meanings given such
terms in the Indenture.
[End of Article I
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ARTICLE II
REPRESENTATIONS
Section 2.1. REPRESENTATIONS BY THE ISSUER. The Issuer makes the following
representations as the basis for the undertakings on its part herein contained:
(a) ORGANIZATION AND AUTHORITY. The Issuer is a political
subdivision and body corporate and politic, duly organized and validly existing
pursuant to the provisions of the Act. The Issuer has all requisite power and
authority under the Act to (i) issue the Bonds, (ii) lend the proceeds thereof
to the Company to reimburse the Company for certain costs incurred in acquiring,
constructing and equipping the Project, and (iii) enter into, and perform its
obligations under this Loan Agreement, the Placement and Remarketing Agreement
and the Indenture.
(b) PENDING LITIGATION. To the knowledge of the Issuer, there are no
actions, suits, proceedings, inquiries or investigations pending, or to the
knowledge of the Issuer threatened, against or affecting the Issuer in any court
or before any governmental authority or arbitration board or tribunal, which
involve the possibility of materially and adversely affecting the transactions
contemplated by this Loan Agreement, the Placement and Remarketing Agreement or
the Indenture or which, in any way, would materially and adversely affect the
validity or enforceability of the Bonds, the Indenture, the Placement and
Remarketing Agreement, this Loan Agreement or any agreement or instrument to
which the Issuer is a party and which is used or contemplated for use in the
consummation of the transactions contemplated hereby or thereby.
(c) ISSUE, SALE AND OTHER TRANSACTIONS ARE LEGAL AND AUTHORIZED. The
issuance and sale of the Bonds and the execution and delivery by the Issuer of
this Loan Agreement, the Placement and Remarketing Agreement and the Indenture,
and the compliance by the Issuer with all of the provisions of each thereof and
of the Bonds (i) are within the purposes, powers and authority of the Issuer,
(ii) have been done in full compliance with the provisions of the Act, are legal
and will not conflict with or constitute an THE part of the Issuer a violation
of or a breach of or default under, or result in the creation of any lien,
charge or encumbrance upon any property of the Issuer (other than as
contemplated in the Indenture) under the provisions of, any activating
resolution, by-law, indenture, mortgage, deed of trust, note agreement or other
agreement or instrument to which the Issuer is a party or by which the Issuer is
bound, or to the best of Issuer's knowledge any license, judgment, decree, law,
statute, order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Issuer or any of its activities or properties, and
(iii) have been duly authorized by all necessary corporate action on the part of
the Issuer.
(d) GOVERNMENTAL CONSENTS; COMPLIANCE WITH LAWS. No further
approval, consent or withholding of objection on the part of, or filing,
registration or qualification with, any regulatory or governmental body,
federal, State or local, is required in connection with (1) the execution,
issuance, sale and delivery of the Bonds by the Issuer, (2) the execution or
delivery of or compliance by the Issuer with the terms and conditions of this
Loan Agreement, the Placement and Remarketing Agreement and the Indenture, or
(3) the assignment by the Issuer of its rights under the Loan Agreement and the
Note. The consummation by the Issuer of the transactions set forth in the manner
and under the terms and conditions as provided herein will comply with all
applicable State, local and federal laws and any rules and regulations
promulgated thereunder by any regulatory authority or agency.
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(e) NO DEFAULTS; NO CONFLICTS. To the best of the Issuer's
knowledge, no event has occurred and no condition exists with respect to the
Issuer which would constitute an "event of default" as defined in this Loan
Agreement, the Placement and Remarketing Agreement or the Indenture or which,
with the lapse of time or with the giving of notice or both, would become such
an "event of default." To the best of the Issuer's knowledge, the Issuer is not
in default in the payment of principal of or interest on any of its indebtedness
for borrowed money and, to the best of the Issuer's knowledge, is not in default
under any instrument under or subject to which any indebtedness for borrowed
money has been incurred, and no event has occurred and is continuing under the
provisions of any such instrument that with the lapse of time or the giving of
notice, or both, would constitute an event of default thereunder. The Issuer is
not (1) in violation of the resolution creating it or any existing law, rule or
regulation applicable to it or (2) to the best of the Issuer's knowledge, in
default under any indenture, mortgage, deed of trust, lien, lease, contract,
note, order, judgment, decree or other agreement, instrument or restriction of
any kind by which it or any of its assets are or may be bound or affected. The
execution and delivery by the Issuer of this Loan Agreement, the Indenture and
the issuance of the Bonds and compliance with the terms and conditions hereof
and thereof will not conflict with or result in the breach of or constitute a
default under any of the above described instruments or other restrictions,
(f) NO PRIOR PLEDGE. Neither this Loan Agreement nor any of the
Pledged Revenues have been pledged or hypothecated in any manner or for any
purpose other than as provided in the Indenture as security for the payment of
the Bonds.
(g) NATURE AND LOCATION OF PROJECT. The financing of the Cost of
Project is authorized under the Act and is in furtherance of the public purpose
for which the Issuer was created. The Issuer authorizes the Company, subject to
the terms and conditions set forth in this Loan Agreement, which terms and
conditions the Issuer determines to be necessary, desirable and proper, to
provide for the acquisition, construction and equipping of the Project by such
means as shall be available to the Company and in the manner determined by the
Company.
Section 2.2. NO REPRESENTATION OR WARRANTY BY ISSUER AS TO PROJECT. The
Issuer makes no representation or warranty concerning the suitability of the
Project for the purpose for which it is being undertaken by the Company. The
Issuer has not made any independent investigation as to the feasibility or
creditworthiness of the Company, and any bond purchaser, assignee of the Loan
Agreement or any other party with any interest in this transaction, shall make
its own independent investigation as to the creditworthiness and feasibility of
the Project, independent of any representation or warranties of the Issuer.
Section 2.3 REPRESENTATIONS BY THE COMPANY. The Company makes the
following representations as the basis for the undertakings on its part herein
contained:
(a) ORGANIZATION AND POWER. The Company (a) is a corporation (i)
duly organized, validly existing and in good standing under the laws of the
State of California and (ii) duly qualified as a foreign corporation, validly
existing and in good standing under the laws of the State of North Carolina and
(b) has all requisite power and authority and all necessary licenses and permits
to own and operate its properties and to carry on its business as now being
conducted and as presently proposed a) be conducted except where failure to
obtain or retain a license or permit would not have a materially adverse effect
on the Company's business.
(b) PENDING LITIGATION. There are no proceedings pending, or to the
knowledge of the Company threatened, against or affecting the Company in any
court or before any
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governmental authority, arbitration board or tribunal which if adversely
determined, would materially and adversely affect the transactions contemplated
by this Loan Agreement, the Placement and Remarketing Agreement or the Indenture
or which, in any way, would materially and adversely affect the properties,
business, prospects, profits or condition (financial or otherwise) of the
Company, or the ability of the Company to perform its obligations under the
Company Documents. The Company is not in default with respect to an order of any
court, governmental authority, arbitration board or tribunal.
(c) AGREEMENTS ARE LEGAL AND AUTHORIZED. The execution and delivery
by the Company of each of the Company Documents and the compliance by the
Company with all of the provisions hereof and thereof (i) are within the
corporate power of the Company, (ii) will not conflict with or result in any
breach of any of the provisions of, or constitute a default under, or result in
the creation of any lien, charge or encumbrance upon any property of the Company
under the provisions of, any agreement, articles of incorporation, by-laws or
other instrument to which the Company is a party or by which it may be bound, or
any license, judgment, decree, law, statute, order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company or any
of its activities or properties, (iii) will not result in a violation of any
constitutional or statutory provision or order, rule, regulation, decree or
ordinance of any court, government or governmental authority having jurisdiction
over the Company or its property, and (iv) have been duly authorized by all
necessary corporate action on the part of the Company.
(d) GOVERNMENTAL CONSENT. Neither the Company nor any of its
businesses or properties, nor any relationship between the Company and any other
person, nor any circumstances in connection with the execution, delivery and
performance by the Company of the Company Documents or the offer, issue, sale or
delivery by the Issuer of the Bonds, is such as to require the consent, approval
or authorization of, or the filing, registration or qualification with, any
governmental authority on the part of the Company other than those already
obtained; provided, however, that no representation is made as to any consents,
approvals or authorizations required in connection with the construction or
occupancy of the Project.
(e) NO DEFAULTS. No event has occurred and no condition exists with
respect to the Company that would constitute an "event of default"under any of
the Company Documents or which, with the lapse of time or with the giving of
notice or both, would become such an "event of default." The Company is not in
violation in any material respect of any agreement, articles of incorporation,
by-laws or other instrument to which it is a party or by which it may be bound.
The Company is not in default in the payment of principal of or interest on any
of its indebtedness for borrowed money and is not in default under any
instrument under and subject to which any indebtedness has been incurred, and no
event has occurred and is continuing under the provisions of any such instrument
that with the lapse of time or the giving of notice, or both, would constitute
an event of default thereunder.
(f) COMPLIANCE WITH LAW. The Company is not in violation in any
material way of any laws, ordinances, governmental rules or regulations to which
it is subject and has not failed to obtain any licenses, permits, franchises or
other governmental authorizations necessary to the ownership of its properties
or to the conduct of its business, which violation or failure to obtain might
materially and adversely affect the properties, business, prospects, profits or
conditions (financial or otherwise) of the Company.
(g) RESTRICTIONS ON THE COMPANY. The Company is not a party to any
contract or agreement that materially and adversely affects the business of the
Company.
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(h) INDUCEMENT. The issuance of the Bonds by the Issuer and the
lending of the proceeds thereof to the Company to reimburse the 'Company for
certain costs incurred in acquiring, constructing and equipping the Project have
(i) induced the Company to locate the Project in the County and (ii) will assist
the Company in providing continued employment and industry in the County.
(i) COMPLETION OF THE PROJECT. The Project was completed and placed
into service on September 9, 1994.
(i) LOCATION OF THE PROJECT. The Project is located entirely within
the geographical boundaries of the County of Mecklenburg, North Carolina.
(k) OPERATION OF THE PROJECT. The Company will own and operate the
Project, or cause it to be operated, as an "industrial project"within the
meaning of the Act until the Bonds are no longer outstanding.
Section 2.4. MODIFICATION AND TERMINATION OF SPECIAL TAX CONVENANTS.
Subsequent to the issuance of the Bonds and prior to their payment in full (or
provision for the payment thereof having been made in accordance with the
provisions of the Indenture), neither this Loan Agreement nor the Note may be
amended, changed, modified, altered or terminated except as permitted herein and
by the Indenture and with the written consent of the Company, the Trustee and
the Credit Provider. Subject to Article XII of the Indenture, the Issuer, the
Trustee, and the Company hereby agree to amend this Loan Agreement to the extent
required or permitted, in the opinion of Bond Counsel, in order for interest on
the Bonds to be excluded from gross income of the Owners thereof for federal
income tax purposes under Section 103(a) of the Code. The party requesting such
amendment shall notify the other party to this Loan Agreement and the Trustee of
the proposed amendment, with a copy of such requested amendment to Bond Counsel.
After review of such proposed amendment, Bond Counsel shall render to the
Trustee an opinion as to the effect of such proposed amendment upon the
includability of interest on the Bonds in the gross income of the recipient
thereof for federal income tax purposes.
Section 2.5. PURPOSE OF BONDS BY ISSUER AND COMPANY. Except for purchases
to pay the Purchase Price of Bonds tendered or deemed tendered under the
Indenture or to retire Bonds, the Issuer and the Company agree that they shall
not purchase any Bonds, directly or indirectly.
Section 2.6. FURTHER ASSURANCES. The Company will execute and deliver such
other documents, instruments, agreements and certificates, and do such further
acts, as the Trustee under the Indenture may reasonably require for the better
assuring, assigning and confirming to the Trustee the amounts assigned under the
Indenture for the payment of the Bonds.
[End of Article II]
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ARTICLE III
ISSUANCE OF FREE BONDS; ACQUISITION, CONSTRUCTION,
INSTALLATION AND FINANCING OF PROJECT
Section 3.1. ACQUISITION, CONSTRUCTION AND EQUIPPING OF THE PROJECT. The
Company has completed the Project as described in Exhibit A and the Company has
obtained all licenses, permits and consents required for the acquisition,
construction and installation of the Project, and the Issuer shall have no
responsibility therefor. The Company will not take any action or fail to take
any action which would adversely affect the qualification of the Project under
the Act or the exclusion of the interest on the Bonds from gross income of the
Owners thereof for federal income tax purposes.
Section 3.2. AGREEMENT TO ISSUE BONDS; APPLICATION OF PROCEEDS; PROJECT
FUND. In order to provide funds to make a loan to the Company for the payment of
a portion of the cost of acquiring, constructing and equipping the Project, the
Issuer agrees that as soon as possible it will authorize, validate, sell and
cause to be delivered to the initial purchaser or purchasers thereof, the Bonds,
bearing interest and maturing as set forth in Article II of the Indenture, at a
price to be approved by the Company and Credit Provider, and it will thereupon
make the loan of the proceeds of the Bonds received from the sale thereof by
depositing the sale proceeds in the Project Fund created under the Indenture.
the moneys in the Project Fund shall be used to reimburse the Company for
certain costs incurred in acquiring, constructing and equipping the Project and
for paying certain of the costs of issuing the Bonds.
Section 3.3. [INTENTIONALLY OMITTED].
Section 3.4. [INTENTIONALLY OMITTED].
Section 3.5. LIMITATION OF ISSUER'S LIABILITY. ANYTHING CONTAINED IN THIS
LOAN AGREEMENT TO THE CONTRARY NOTWITHSTANDING, ANY OBLIGATION THE ISSUER MAY
INCUR IN CONNECTION WITH THE UNDERTAKING OF THE PROJECT FOR THE PAYMENT OF MONEY
SHALL NOT BE DEEMED TO CONSTITUTE A DEBT OR GENERAL OBLIGATION OF THE ISSUER,
THE COUNTY, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF, BUT SHALL BE PAYABLE
SOLELY FROM THE REVENUES AND RECEIPTS DERIVED BY IT FROM THIS LOAN AGREEMENT AND
THE NOTE, INCLUDING PAYMENTS RECEIVED UNDER THE NOTE, AND FROM PAYMENTS MADE
PURSUANT TO THE CREDIT FACILITY. NO PROVISION IN THIS LOAN AGREEMENT OR ANY
OBLIGATION HEREIN IMPOSED UPON THE ISSUER, OR THE BREACH THEREOF, SHALL
CONSTITUTE OR GIVE RISE TO OR IMPOSE UPON THE ISSUER, THE COUNTY, THE STATE OR
ANY POLITICAL SUBDIVISION THEREOF A PECUNIARY LIABILITY OR A CHARGE UPON ITS
GENERAL CREDIT OR TAXING POWERS. NO OFFICER OR MEMBER OF THE ISSUER, THE COUNTY,
THE STATE OR ANY POLITICAL SUBDIVISION THEREOF SHALL BE PERSONALLY LIABLE ON
THIS LOAN AGREEMENT.
Section 3.6 DISCLAIMER OF WARRANTIES. The Company recognizes that since
the Project has been acquired, constructed and equipped by the Company and by
contractors and suppliers selected by the Company, NEITHER THE ISSUER NOR THE
TRUSTEE MAKES ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT
TO THE MERCHANTABILITY, CONDITION OR WORKMANSHIP OF ANY PART OF THE PROJECT OR
ITS SUITABILITY FOR THE PURPOSES OF THE COMPANY OR THE EXTENT TO WHICH PROCEEDS
DERIVED FROM THE SALE OF THE BONDS WILL PAY THE COST TO BE INCURRED IN
CONNECTION THEREWITH.
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Section 3.7 COST OF PROJECT. Anything herein notwithstanding, no item of
cost which exceeds with all other such items (a) five percent (5 %) of the net
proceeds (including investment proceeds) of the Bonds which is not a qualified
cost under the Code, including but not limited to (i) costs paid or incurred
prior to October 13, 1992, (ii) interest on the Bonds following completion of
the acquisition, construction and equipping of the Project, or (iii) (a) the
costs of issuance of the Bonds, or (b) two percent (2%) of the principal amount
of the Bonds which is an issuance cost, shall be considered a Cost of Project
that is eligible to be paid or reimbursed from the proceeds of the Bonds. To the
extent permitted by law without affecting the exclusion of the interest on the
Bonds from gross income of the Owners thereof for federal income tax purposes,
if the Company determines that it has exceeded the foregoing limitation, it
shall immediately repay to the Project Fund sufficient monies to bring it into
compliance with such limitation.
Section 3.8. [INTENTIONALLY OMITTED].
Section 3.9. INVESTMENT OF FUNDS. Except for amounts on deposit in the
Rebate Fund, any moneys held in the Bond Fund or the Project Fund or any other
fund created under the Indenture shall be invested or reinvested by the Trustee
as set forth in Article X of the Indenture, to the extent permitted by law, in
the Permitted Investments (as defined in the Indenture), at the telephonic or
oral direction (confirmed in writing) of the Company Representative. Amounts on
deposit in the Rebate Fund shall be invested pursuant to Section 5.12. All such
investments shall at all times be a part of the fund (the Project Fund, the Bond
Fund or such other fund created under the Indenture, as the case may be) from
where the moneys used to acquire such investments shall have come, and all
income and profits on such investments shall be credited to, and losses thereon
shall be charged against, such fund.
Section 3.10. SPECIAL ARBITRAGE CERTIFICATIONS. The Company covenants with
the Issuer, the Trustee and the Owners from time to time of the Bonds that so
long as any Bond remains Outstanding, moneys on deposit in any fund or account
in connection with the Bonds, whether or not such moneys were derived from the
proceeds of the sale of the Bonds or from any other sources, will not be used in
a manner which will cause the Bonds to be "arbitrage bonds," within the meaning
of Section 148 of the Code and any lawful regulations promulgated or proposed
thereunder. The Issuer and the Company each covenant and agree on their own
behalf that they shall not take any action, cause any action to be taken, omit
to take any action or cause any omission to occur which would cause the interest
on the Bonds to become includible in the gross income of the Owners thereof for
federal income tax purposes.
Section 3.11. DEPOSITORIES OF MONEYS AND SECURITY FOR DEPOSIT. All moneys
received by the Issuer in connection with the issuance of the Bonds (other than
for its fees and expenses) shall be deposited in accordance with the Indenture
in the Project Fund created under the Indenture. All such moneys deposited shall
be applied in accordance with the terms and for the purposes herein set forth
and shall not be subject to lien or attachment by any creditor of the Issuer.
The Issuer and the Company agree for the benefit of each other and for the
benefit of the Trustee and the Owners of the Bonds that the Net Proceeds of the
sale of the Bonds will not be used in any manner which would affect the
exclusion from gross income for federal income tax purposes of the interest on
the Bonds.
[End of Article III]
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ARTICLE IV
PROVISIONS FOR PAYMENT
Section 4.1. TITLE TO THE PROJECT. The Issuer acknowledges that (i) the
Issuer will not be vested with any interest in the Project as a result of its
authorization, validation, sale, or issuance of the Bonds to finance the cost of
the acquisition, construction and equipping thereof, and (ii) that the only
security for the Bonds will be the Credit Facility or the Confirmation, if
applicable, the moneys deposited in the funds and accounts (other than the
Rebate Fund) created under the Indenture and the other property and rights
constituting the Trust Estate.
Section 4.2. PAYMENT OBLIGATIONS OF THE COMPANY.
(a) As consideration for the issuance of the Bonds and the lending
of the Bond proceeds to the Company by the Issuer in accordance with the
provisions of this Loan Agreement, the Company agrees to execute and
deliver the Note to the Issuer. In addition, the Company agrees (i) except
as provided in subsection (b) of this Section, to make prompt payment to
the Trustee, as assignee and pledgee of the Issuer, for deposit in the
Bond Fund, of all payments on the Note as and when the same shall be due
and payable, and (ii) to pay pursuant hereto and the Note sums sufficient
to pay the principal and purchase price of, premium, if any, and interest
on the Bonds (whether at maturity, upon redemption or acceleration, upon
any Purchase Date or otherwise) when and as the same shall be due and
payable. All such payments shall be made to the Trustee at its Principal
Office in lawful money of the United States of America, except as may be
otherwise agreed to by the Trustee.
(B) In order to provide for the payments required in subsection (a)
of this Section, the Company shall cause the Credit Provider to deliver
the Credit Facility and the Confirming Bank to deliver the Confirmation to
the Trustee simultaneously with the original issuance and delivery of the
Bonds, and hereby authorizes and directs the Trustee to draw moneys under
the Credit Facility and the Confirmation in accordance with the provisions
of the Indenture to the extent necessary to make any payments of principal
and purchase price of, and interest on the Bonds as and when the same
become due. The Company shall receive as a credit against its obligations
to make the payments described in subsection (a) of this Section all
payments made by the Credit Provider under the Credit Facility and the
Confirmation and all other amounts described in Section 3.02 or 6.06 of
the Indenture.
(c) If the Company should fail to make any of the payments required
in subsection (a) and (b) above, the item or installment which the Company
has failed to make shall continue as an obligation of the Company until
the same shall have been fully paid, and the Company agrees to pay the
same with interest thereon at the rate per annum borne by the Bonds until
paid in full.
(d) In addition, the Company agrees to pay the costs of issuing the
Bonds which are not being paid with the proceeds from the sale of the
Bonds by depositing the same with the Trustee. Such moneys shall be
disbursed by the Trustee in accordance with written instructions from the
Company.
(e) Anything herein, in the Indenture or in the Bonds to the
contrary notwithstanding, the obligations of the Company hereunder shall
be subject to the limitation that payments constituting interest under
this Section shall not be required to the extent that the receipt of such
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payment by the Owner of any Bond would be contrary to the provisions of
law applicable to such Owner which limit the maximum rate of interest
which may be charged or collected by such Owner.
Section 4.3. CREDIT FACILITY; ALTERNATE CREDIT FACILITY; CONFIRMATION;
SUBSTITUTE CONFIRMATION.
(a) The Credit Facility delivered to the Trustee simultaneously with
the original issuance and delivery of the Bonds constitutes an irrevocable
obligation of the Credit Provider to pay to the Trustee, upon request and
in accordance with the terms thereof, up to an amount equal to the
principal amount of Bonds Outstanding plus (i) if the Bonds initially bear
interest at a Variable Rate, during any Variable Rate Period, 50 days'
interest on the Bonds, computed at a rate per annum equal to the Maximum
Rate and on the basis of the actual number of days elapsed during a 365
day or 366 day year, as appropriate, or (ii) if the Bonds initially bear
interest at a Term Rate, during any Term Rate Period, 204 days' interest
on the Bonds (or, if the Term Rate Period to be established will consist
of fewer than 6 months, the number of days' interest on the Bonds obtained
by adding 20 days to the number of days in such Term Rate Period) computed
at a rate per annum equal to the Maximum Rate and on the basis of a 360
day year of twelve 30 day months.
(b) The Company shall have the option from time to time to provide
the Trustee with an Alternate Credit Facility in accordance with the
provisions of Section 6.08 of the Indenture. If at any time there shall
have been delivered to the Trustee an Alternate Credit Facility, together
with the other documents and opinions required by Section 6.08 of the
Indenture, then the Trustee shall accept such Alternate Credit Facility
and promptly surrender the previously held Credit Facility to the issuer
thereof for cancellation, in accordance with the terms of such Credit
Facility. If at any time there shall cease to be any Bonds Outstanding
under the Indenture, the Trustee shall promptly surrender the Credit
Facility to the Credit Provider, in accordance with the terms of such
Credit Facility, for cancellation. The Trustee shall comply with the
procedures set forth in the Credit Facility relating to the termination
thereof.
(c) The Confirmation delivered to the Trustee simultaneously with
the original issuance and delivery of the Bonds constitutes an irrevocable
obligation of the Confirming Bank to pay to the Trustee, upon request and
in accordance with the terms thereof, up to an amount equal to the
principal amount of Bonds Outstanding plus (i) if the Bonds initially bear
interest at a Variable Rate during any Variable Rate Period, 50 days'
interest on the Bonds, computed at a rate per annum equal to the Maximum
Rate and on the basis of the actual number of days elapsed during a 365
day or 366 day year, as appropriate, or (ii) if the Bonds initially bear
interest at a Term Rate, during any Term Rate Period, 204 days' interest
on the Bonds (or, if the Term Rate Period to be established will consist
of fewer than 6 months, the number of days' interest on the Bonds obtained
by adding 20 days to the number of days in such Term Rate Period) computed
at a rate per annum equal to the Maximum Rate and on the basis of a 360
day year of twelve 30 day months.
(d) The Company shall have the option from time to time to provide
the Trustee with a Substitute Confirmation in accordance with the
provisions of Section 6.08 of the Indenture. If at any time there shall
have been delivered to the Trustee a Substitute Confirmation, together
with the other documents and opinions required by Section 6.08 of the
Indenture, then the Trustee shall accept such Substitute Confirmation and
promptly surrender the previously held Confirmation to the issuer thereof
for cancellation, in accordance with the terms of such Confirmation. If at
any time there shall cease to be any Bonds outstanding under the
Indenture, the Trustee shall promptly surrender the Confirmation to the
Confirming Bank, in accordance with the terms of such
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Confirmation, for cancellation. The Trustee shall comply with the procedures set
forth in the Confirmation relating to the termination thereof.
Section 4.4. ADMINISTRATIVE EXPENSES. The Company shall pay, or cause to
be paid, an amount equal to (i) the fees and charges of the Trustee incurred in
connection with the rendering of its ordinary and extraordinary services as
Trustee under the Indenture, as and when the same become due, including the
reasonable fees of its Counsel, (ii) the fees and charges of the Paying Agent
for acting as Paying Agent for the Bonds, including the fees and expenses of its
Counsel, (iii) the fees and expenses of the Placement Agent for serving as
Placement Agent for the Bonds, including the fees and expenses of its Counsel,
and any other amounts due and payable to the Placement Agent under the Placement
and Remarketing Agreement, (iv) the fees and expenses of the Remarketing Agent
for serving as Remarketing Agent for the Bonds, including the fees and expenses
of its Counsel, and any other amounts due and payable to the Remarketing Agent
under the Placement and Remarketing Agreement, (v) the fees and expenses of the
Rating Agency for issuing and maintaining its securities rating on the Bonds and
(vi) the out-of-pocket expenses, administrative expenses and Counsel fees of the
Issuer. The Company may, without constituting grounds for an Event of Default
hereunder, withhold payment of any such fees and charges of the Trustee or the
Paying Agent, to contest in good faith the necessity for any extraordinary
services of the Trustee and the reasonableness of any extraordinary expenses of
the Trustee, or to contest in good faith the necessity for any services
performed and expenses paid or incurred by, and the reasonableness of any fees,
charges or expenses of, the Paying Agent. If the Company should fail to make any
of the payments required in this Section, the item or installment which the
Company has failed to make shall continue as an obligation of the Company until
the same shall have been fully paid, with interest thereon at the rate per annum
borne by the Bonds until paid in full.
Section 4.5. OBLIGATIONS OF THE COMPANY ABSOLUTE AND UNCONDITIONAL.
Subject to the provisions of Section 6.5 hereof, the obligations of the Company
to make or to cause (pursuant to the Credit Facility) to be made the payments
required in Sections 4.2 and 4.4 and to perform and observe the other agreements
on its part contained herein shall be absolute and unconditional and shall not
be subject to diminution by set-off, counterclaim, abatement or otherwise by
reason of any action or inaction of the Trustee, the Issuer or any third party.
Until such time as the principal of, and the interest on, the Bonds shall have
been paid in full, the Company (a) will not suspend or discontinue any payments
provided for in Sections 4.2 and 4.4 except to the extent the same have been
prepaid, (b) will perform and observe all its other agreements contained herein,
and (c) except as provided in Article VII hereof, will not terminate this Loan
Agreement for any cause, including, without limiting the generality of the
foregoing, any acts or circumstances that may constitute failure of
consideration, sale, loss, eviction or constructive eviction, destruction of or
damage to the Project, condemnation, commercial frustration of purpose, any
change in the tax or other laws of the United States of America or of the State
or any political subdivision of either, or any failure of the Issuer to perform
and observe any agreement, whether express or implied, or any duty, liability or
obligation arising out of or in connection herewith or with the Indenture.
Notwithstanding the foregoing, the obligation of the Company to make payments
hereunder shall be satisfied and discharged to the extent moneys are received by
the Trustee pursuant to the Credit Facility or the Confirmation, if applicable,
remarketing proceeds (with respect to the Purchase Price) or other available
sources under the Indenture. Nothing contained hi this Section shall be
construed to release the Issuer from the performance of any of the agreements on
its part herein contained; and if the Issuer should fail to perform any such
agreement, the Company may institute such action against the Issuer as the
Company may deem necessary to compel performance so long as such action shall
not impair the agreements on the part of the Company hereunder.
Nothing contained herein shall be construed as a waiver of any rights
which Company may have against the Issuer under this Loan Agreement, or against
any person under this Loan Agreement, the Indenture or otherwise, or under any
provision of law; provided, however, that the Company shall pursue any rights or
remedies against the Issuer, the Trustee, any Owner or any third party in
connection
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herewith, or in connection with the Indenture, the Company Documents or
otherwise relating to the Bonds and security therefor only in a separate action,
and not by way of any set-off, counterclaim, cross-claim or third party action
in any suit brought to enforce the rights of the Owners, the Trustee or the
Issuer under this Loan Agreement, the Indenture, the Company Documents or
otherwise in connection herewith; and provided further, that in order to
preserve the right of the Company to raise such issues in any separate suit, any
claim of the Company which, but for this Section 4.5 would be a compulsory
counterclaim, shall be identified as such in the first responsive pleading filed
by the Company to any action brought by the Issuer, Trustee, any Owner or any
person.
Section 4.6. COMPANY CONSENT TO ASSIGNMENT OF LOAN AGREEMENT AND EXECUTION
OF INDENTURE. The Company understands that the Issuer will, pursuant to the
Indenture and as security for the payment of the principal of, premium, if any,
and the interest on the Bonds, assign and pledge to the Trustee, and create a
security interest in favor of the Trustee in certain of its rights, title and
interest in and to this Loan Agreement (including all Pledged Revenues)
reserving, however, the Unassigned Rights; and the Company hereby agrees and
consents to such assignment and pledge. The Company acknowledges that it has
received a copy of the Indenture and consents to the execution of the same by
the Issuer; provided, however, such consent does not constitute a representation
as to the accuracy of any representations or warranties made thereunder.
Section 4.7. COMPANY'S PERFORMANCE UNDER INDENTURE. The Company agrees,
for the benefit of the Owners, to do and perform all acts and things
contemplated in the Indenture to be done or performed by it.
[End of Article IV]
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ARTICLE V
PARTICULAR AGREEMENTS
Section 5.1. MAINTENANCE, OPERATION AND INSURING OF PROJECT; TAXES; NO
OPERATION OF PROJECT BY ISSUER. The Company hereby agrees that it will at its
own expense maintain and operate all portions of the Project during their useful
lives or until they are replaced with facilities necessary to the operation of
the Project. This Loan Agreement does not prevent the Company from merging or
consolidating with another entity as permitted by Section 5.3. The Company
further agrees that, except for taxes contested in good faith, it will pay all
taxes levied with respect to the Project and the income therefrom and that it
will at its own expense keep the Project properly insured against loss or damage
from such perils usually insured against by businesses operating or owning like
properties and maintain public liability insurance and all such worker's
compensation or other similar insurance as may be required by law. Evidence of
such insurance will be furnished to the Trustee, the Issuer and the Credit
Provider upon request. Nothing contained in this Loan Agreement shall be deemed
to authorize or require the Issuer to operate the Project or to conduct any
business enterprise in connection therewith.
Section 5.2. LOCAL GOVERNMENT COMMISSION'S, ISSUER'S, TRUSTEE'S AND PAYING
AGENT'S EXPENSES; RELEASE AND INDEMNIFICATION PROVISIONS. The Company agrees,
whether or not the transactions contemplated by the Company Documents and the
Indenture shall be consummated, to indemnify and hold harmless (i) the Local
Government Commission and (ii) the Issuer and its officers, commissioners,
directors, officials, employees and agents, including the Trustee, the Paying
Agent and Counsel to the Issuer (any and all of the foregoing being hereinafter
referred to as the "Indemnified Persons"), from and against any and all claims,
actions, suits, proceedings, expenses, judgments, damages, penalties, fines,
assessments, liabilities, charges or other costs (including, without limitation,
all attorneys' fees and expenses incurred in connection with enforcing this Loan
Agreement or collecting any sums due hereunder and any claim or proceeding or
any investigation in connection therewith) relating to, resulting from or in
connection with (a) any cause whatsoever in connection with the Project,
including, without limitation, the acquisition, design, construction,
installation, equipping, operation, maintenance or use thereof or the financing
thereof including any expenses arising from the failure to make payment of
principal and interest on the Bonds; (b) any act or omission of the Company or
any of its agents, contractors, servants, employees or licensees, in connection
with the Project; (c) the issuance and sale of the Bonds; and (d) a
misrepresentation or breach of warranty by the Company hereunder or under any of
the Company Documents, or any violation by the Company of any of its covenants
hereunder or under any of the other Company Documents. In addition, the Trustee
shall be indemnified for (i) any actions taken or omitted by the Trustee in
accordance with the terms of this Loan Agreement, the Bonds, the Placement and
Remarketing Agreement, the Credit Facility, the Note or the Indenture and (ii)
any actions taken at the request of or with the consent of the Company. The
foregoing indemnities are effective only with respect to any loss incurred by
the Indemnified Persons not due to willful misconduct, gross negligence, or bad
faith on the part of such Indemnified Persons. In case any action or proceeding
shall be brought against one or more of the Indemnified Persons and in respect
of which indemnity may be sought, as provided herein, such Indemnified Person or
Indemnified Persons shall promptly notify the Company in writing and the Company
shall promptly assume the defense thereof, including the employment of counsel
reasonably satisfactory to such Indemnified Person or Indemnified Persons,
payment of all expenses and the right to negotiate and consent to settlement;
but the failure to notify the Company as provided herein shall not relieve the
Company from any liability that it may have (i) under this Section, so long as
the Company is given the reasonable opportunity to defend such claim, and (ii)
otherwise than under this Section. Any one or more of the Indemnified Persons
shall have the right to employ separate counsel in any such action and to
participate in the defense thereof, but the reasonable fees and expenses of such
counsel shall be at the
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expense of such Indemnified Persons or Indemnified Persons unless (1) the
employment of such counsel has been specifically authorized in writing by the
Company, (2) the named parties to any such action (including any impleaded
parties) include both the Company and such Indemnified Person or Indemnified
Persons and representation of both the Company and such Indemnified Person or
Indemnified Persons by the same counsel would be inappropriate due to actual or
potential differing interests between them, or (3) the Indemnified Person or
Indemnified Persons have been advised that one or more legal defenses may be
available to any or all of them which may not be available to the Company in
which case the Company shall not be entitled to assume the defense of such suit
notwithstanding its obligation to bear the fees and expenses of such counsel.
The Company shall not be liable for any settlement of any such action effected
without its consent, but if settled with such consent or if there is a final
judgment in any such action with or without consent, the Company agrees to
indemnify and hold harmless the Indemnified Person or Indemnified Persons from
and against any loss by reason of such settlement or judgment.
The provisions of this Section shall survive the termination of this Loan
Agreement.
Section 5.3. MAINTENANCE OF EXISTENCE. The Company agrees that so long as
any Bonds remain outstanding it shall maintain its existence as a corporation
organized under the laws of the State of California and shall not merge or
consolidate with any other entity and shall not transfer or convey all or
substantially all of its property, assets and licenses; provided, however, the
Company may, without violating any provision hereof, consolidate with or merge
into another domestic entity (ie., an entity existing under the laws of one of
the states of the United States of America or the District of Columbia) or
permit one or more other domestic entities to consolidate with or merge into it,
or transfer all or substantially all of its assets to another domestic entity,
but only on the condition that:
(a) the assignee entity or the entity resulting from or surviving
such merger (if other than the Company) or consolidation or the entity to
which such transfer is made expressly assumes in writing and agrees to
perform all of the Company's obligations hereunder and under the other
Company Documents;
(b) in connection with any such consolidation, merger or transfer,
the Credit Provider shall expressly ratify and affirm that the Credit
Facility remains in full force and effect;
(c) the surviving entity shall preserve and keep in full force and
effect all licenses and permits necessary to the proper conduct of its
business; and
(d) the Company obtains and delivers to the Issuer, the Trustee, and
the Credit Provider an opinion of Bond Counsel to the effect that the
proposed transaction will not adversely affect the exclusion from gross
income of interest on the Bonds of the Owners thereof for federal income
tax purposes.
Section 5.4. [INTENTIONALLY OMITTED]
Section 5.5. AGREEMENT OF ISSUER NOT TO ASSIGN OR PLEDGE. Except for the
assignment and pledge of the Trust Estate in the Indenture, the Issuer agrees
that it will not attempt to further assign, pledge, transfer or convey its
interest in or create any assignment, pledge, lien, charge or encumbrance of any
form or nature with respect to any of the property, moneys, securities and
rights granted by the Issuer to the Trustee under the Granting Clauses of the
Indenture.
Section 5.6. REDEMPTION OF BONDS. The Issuer or the Trustee, at the
request at any time of the Company and if the same are then redeemable, shall
forthwith take all steps that may be necessary under the applicable redemption
provisions of the Indenture to effect redemption of all or any portion of the 16
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Bonds, as may be specified by the Company, on the earliest redemption date on
which such redemption may be made under such applicable provisions or upon the
date set for the redemption by the Company pursuant to Article VD hereof. As
long as no Event of Default on behalf of the Company exists hereunder and the
Issuer is not obligated to call Bonds pursuant to the terms of the Indenture,
neither the Issuer nor the Trustee shall redeem any Bond prior to its stated
maturity unless requested to do so in writing by the Company.
Section 5.7. REFERENCE TO BONDS INEFFECTIVE AFTER BONDS PAID. Upon Payment
in Full of the Bonds and all fees and charges of the Issuer, the Trustee and the
Paying Agent, all references herein to the Bonds, the Paying Agent and the
Trustee shall be ineffective and neither the Issuer, the Paying Agent, the
Trustee nor the Owners of any of the Bonds shall thereafter have any rights
hereunder and the Company shall have no further obligation hereunder, saving and
excepting those that shall have theretofore vested and any right of any
Indemnified Person (as defined in Section 5.2) to indemnification under Section
5.2, which right shall survive the payment of the Bonds and the termination of
this Loan Agreement. Reference is hereby made to Article XI of the Indenture
which sets forth the conditions upon the existence or occurrence of which
Payment in Full of the Bonds shall be deemed to have been made.
Section 5.8. ASSIGNMENT, SALE OR LEASE OF PROJECT. The Company may assign
its interest in this Loan Agreement and may sell, lease or otherwise dispose of
the Project, in whole or in part, provided that (i) the purchaser, lessee or
transferee in such transaction shall be bound by the terms and provisions of
this Loan Agreement, (ii) such transaction shall not affect the liability of the
Credit Provider under the Credit Facility, and (iii) an opinion of Bond Counsel
is provided to the Issuer, the Trustee, and the Credit Provider to the effect
that such transaction will not adversely affect the exclusion of the interest on
the Bonds from gross income of the Owners thereof for federal income tax
purposes. Notwithstanding the foregoing, the Company will remain primarily
liable for its obligations hereunder until provision has been made for Payment
in Full of the Bonds.
Section 5.9. NON-ARBITRAGE COVENANT. The Company hereby covenants and
agrees with the Issuer and the Trustee for the benefit of the Owners of any
Bonds, present and future, that it will not make, or permit, any use of the
proceeds of the Bonds which will cause the Bonds to be "arbitrage bonds" within
the meaning of Section 148 of the Code. The Company shall deliver to the Issuer
its certificate, evidencing the reasonable expectations of the Company, in such
reasonable form as the Issuer shall specify and upon which the Issuer may rely
in furnishing its own certificate. The covenants contained in this Section are
in addition to, and not in limitation of, the covenants contained in Sections
2.4 and 3.10 hereof.
Section 5.10. NOTICE OF BONDS OUTSTANDING AND OWNERS OF BONDS. The Company
agrees that on or prior to July 15 of each year it will deliver or cause to be
delivered to the Issuer and the Local Government Commission a certificate
stating the principal amount of the Bonds Outstanding as of the close of
business on June 30 of such year, and, upon request of the Local Government
Commission, a list of the registered Owners of the Bonds as of such June 30.
Section 5.11. FINANCING STATEMENTS. The Company hereby covenants and
agrees with the Issuer and the Trustee that it shall furnish to the Credit
Provider and the Trustee, quinquennially on or before the 1st day of March of
each fifth year (commencing March 1, 2001), an Opinion of Counsel in a form
acceptable to the Credit Provider, to the effect that all financing or
continuation statements have been filed, and all other action has been taken, to
perfect and validate continuously from the date hereof the security interests
granted by the Indenture. The cost of preparing and filing all such financing
statements and continuation statements shall be paid by the Company.
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Section 5.12. ARBITRAGE REBATE.
(a) The Company acknowledges having read Sections 5.07 and 5.08 of
the Indenture and agrees to perform all duties expressly or implicitly
imposed upon it by such Sections and by the Tax Regulatory Agreement
referred to therein. Insofar as Sections 5.07 and 5.08 of the Indenture
and the Tax Regulatory Agreement expressly or implicitly impose duties and
responsibilities on the Company, they are specifically incorporated herein
by reference.
(b) Nothing contained in this Loan Agreement or in the Indenture
shall be interpreted or construed to require the Issuer to pay the Rebate
Amount, such obligations being the sole responsibility of the Company.
Section 5.13. USE OF PROCEEDS; TAX COVENANTS AND OTHER MATTERS.
(a) USE OF PROCEEDS; PROHIBITED USE OF PROJECT, ETC. Neither the
Issuer nor the Company shall cause any proceeds of the Bonds to be expended,
except pursuant to the Indenture and this Loan Agreement. The Company shall not
(i) requisition or otherwise allow payment out of proceeds of the Bonds (A) if
such payment is to be used for the acquisition of any property (or an interest
therein) unless the first use of such property is pursuant to such acquisition,
provided that this clause (A) shall not apply (1) to any building (and the
equipment purchased as a part thereof, if any) if the "rehabilitation
expenditures," as defined in Section 147(d) of the Code, with respect to the
building equal or exceed 15% of the portion of the cost of acquiring the
building (including such equipment) financed with the proceeds of the Bonds, or
(2) to any other property if the rehabilitation expenditures with respect
thereto equal 100% of the cost of acquiring such property financed with the
proceeds of the Bonds; (B) if as a result of such payment, 25 % or more of the
proceeds of the Bonds would be considered as having been used directly or
indirectly for the acquisition of land (or an interest therein); (C) if, as a
result of such payment, less than 95 % of the net proceeds of the Bonds,
expended at the time of such acquisition would be considered as having been used
for costs of the acquisition, construction, or reconstruction or improvement of
land or property of a character subject to the allowance for depreciation,
within the meaning of Section 144(a)(1)(A) of the Code ("Qualifying Costs"); or
(D) if such payment is used to pay issuance costs (including counsel fees and
placement fees) of the Bonds in excess of an amount equal to 2% of the principal
amount of the Bonds; (ii) take or omit, or permit to be taken or omitted, any
other action with respect to the use of such proceeds the taking or omission of
which has or would result in the loss of the exclusion of interest on the Bonds
from gross income of the Owners thereof for federal income tax purposes; or
(iii) take or omit, or permit to be taken or omitted, any other action the
taking or omission of which has or would cause the loss of such exclusion.
Without limiting the generality of the foregoing, the Issuer and the Company
will not used the proceeds of the Bonds, or permit such proceeds to be used
directly or indirectly, for the acquisition of land (or an interest therein) to
be used for farming purposes, or to provide (x) any facility the primary purpose
of which is retail food and beverage services, automobile sales or service or
the provision of recreation or entertainment, (y) any airplane, skybox or other
private luxury box, any health club facility, any facility primarily used for
gambling, any store the principal business of which is the sale of alcoholic
beverages for consumption off premises, any private or commercial golf course,
country club, massage parlor, tennis club, skating facility (including roller
skating, skateboard and ice skating), racquet spots facility (including any hand
ball or racquetball court), hot tub facility, suntan facility, or race track, or
(z) single or multifamily residences. The Company shall not permit the use of
the Project by any person to whom any part of the aggregate authorized face
amount of the Bonds would be allocated pursuant to Section 144(a)(10) of the
Code if the amount so allocated when increased as provided in Section 144(a)(10)
of the Code would exceed $40,000,000.
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23
(b) COMMENCEMENT OF CONSTRUCTION; FIRST USERS. The Company hereby
represents that (i) neither "construction" nor "acquisition" or "installation"
of the Project "commenced" prior to October 13, 1992 within the meaning of the
Treasury Regulations promulgated under the Code; (ii) no person, firm or
corporation who was a "substantial user" of the Project (within the meaning
described in such term under the Code) before the date of issuance of the Bonds
and was or will be a "substantial user" of the Project following its being
placed in service, has received or will receive, directly or indirectly, any
proceeds from the issuance and sale of the Bonds; and (iii) the Project was not
first used prior to the date 18 months prior to die issuance of the Bonds.
(c) ECONOMIC LIFE OF PROJECT. The Company hereby represents that the
weighted average maturity of the Bonds does not exceed 120% of the "average
reasonably expected economic life" of the components comprising the Project,
determined pursuant to Section 147(b) of the Code. The Company agrees that it
will not make any changes in the Project which would, at the time made, cause
120% of the "average reasonably expected economic life" of the components of the
Project, determined pursuant to Section 147(b) of the Code, to be less than the
"weighted average maturity" of the Bonds.
(d) CERTIFICATE OF INFORMATION; INTERNAL REVENUE SERVICE FORM 8038.
(Internal Revenue Service Form 8038.) The Company hereby represents that the
information contained herein and in the Tax Regulatory Agreement delivered in
connection with the issuance of the Bonds with respect to the compliance with
the requirements of Section 103 and Sections 141 through 150 of the Code,
including the information in Internal Revenue Service Form 8038 (excluding the
issue number and the employer identification number of the Issuer) filed by the
Issuer with respect to the Bonds and the Project, is true and correct in all
material respects.
(e) ARBITRAGE AND REBATE. Neither the Company nor the Issuer shall
(i) take or omit to take any action, or approve, the making by the Company of
any investment or use of any proceeds of the Bonds or any other moneys within
their respective control (including, without limitation, the proceeds of any
insurance or any condemnation award with respect to the Project), or the taking
or omission of any other action, which would cause the Bonds to be "arbitrage
bonds" within the meaning of Section 148 of the Code, or (ii) approve the use of
any proceeds from the sale of the Bonds otherwise than in accordance with this
Loan Agreement or the Tax Regulatory Agreement, barring any unforeseen
circumstances, in which event, the Company and the Issuer shall use such
proceeds with due diligence and shall otherwise comply with this Loan Agreement.
Without limiting the generality of the foregoing, the Company shall at its sole
expense take all action required under Section 148 of the Code and Treasury
Regulations thereunder to prevent loss of the exclusion of the interest on the
Bonds from gross income of the Owners thereof for federal income tax purposes
under such Section, including, but not limited to, paying on behalf of the
Issuer the "rebatable arbitrage amount" to the United States of America in
accordance with the requirements set forth in the related Treasury Regulations
and complying with the requirements of Section 5.08 of the Indenture, including
making the annual calculations and deposits required therein. The Company shall
also comply with any similar requirements contained in any Treasury Regulations
adopted in place of the existing Treasury Regulations and all other requirements
of any such Treasury Regulations, to the extent applicable to the Bonds. The
Company shall, upon request of the Issuer, provide the Issuer a copy of all
calculations, compliance reports and all other documents prepared in compliance
with Section 148 of the Code, the Tax Regulatory Agreement, this Section 5.13(e)
and Section 5.08 of the Indenture. All costs and expenses incurred in connection
with the satisfaction of such requirements shall be paid by the Company.
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24
(f) USE BY UNITED STATES OF AMERICA OR ITS AGENCIES. The Company has
not permitted and shall not permit the Project to be used or occupied
other than as a member of the general public in any manner for
compensation by the United States of America or an agency or
instrumentality thereof, including any entity with statutory authority to
borrow from the United States of America (in any case within the meaning
of Section 149(b) of the Code) unless, with respect to any future use of
the Project, the Company shall deliver to the Trustee an Opinion of Bond
Counsel in form and substance satisfactory to the Trustee to the effect
that such will not impair the exclusion of interest on the Bonds from
gross income of the Owners thereof for federal income tax purposes.
(g) OTHER BONDS TO BE ISSUED. Neither the Company nor any related
person (or group of related persons which includes the Company) has
guaranteed, arranged, participated in, assisted with, borrowed the
proceeds of, or leased facilities financed by, private activity bonds
within the meaning of Section 141 of the Code which are sold at
substantially the same time as the Bonds, sold pursuant to the same plan
of financing as the Bonds and are reasonably expected to be paid from
substantially the same source of funds as the Bonds.
(h) LIMIT ON AMOUNT OF BONDS, REPORTS. The Company represents that
on the date of the issuance of the Bonds (i) obligations were not assumed,
expenditures were not made and outstanding obligations did not exist that
will cause the "aggregate face amount" of the Bonds as computed under the
provisions of Section 144(a) and related sections of the Code to exceed
$10,000,000, and (ii) outstanding obligations did not exist that would
cause the "aggregate face amount" of the Bonds allocated to any
"test-period beneficiary," as defined in Section 144(a)(10) of the Code,
when increased by such obligations as provided in Section 144(a)(10) of
the Code, to exceed $40,000,000. During the three-year period beginning on
the date of the issuance of the Bonds (or, in the case of clause (B)
below, the date the Project is placed in service, unless the Company
provides to the Trustee an Opinion of Bond Counsel that such restriction
is no longer applicable), the Company shall not make any expenditure,
assume any obligation, permit the use of the Project by any person or take
or permit other action that would cause the "aggregate face amount" of the
Bonds as computed under the provisions of Section 144(a) and related
sections of the Code (A) to exceed $10,000,000 or such other maximum
dollar amount then permitted by the Code, or (B) allocated to any
"test-period beneficiary", when increased by such obligations as provided
in Section 144(a)(10) of the Code, to exceed $40,000,000, and shall on the
anniversary date of the issuance of the Bonds until the third anniversary
date of the issuance of the Bonds or the date on which the Project is
placed into service, whichever is later, file a report with the Trustee
setting forth all capital expenditures and bond issues used in calculating
such limits under Section 144(a) of the Code since the last report
received by the Trustee, accompanied by a certificate of the Company
Representative certifying compliance with the requirements of this
Section.
The Company and the Issuer shall file any reports or statements and
take any other action as may be required from time to time with respect to the
qualification of the Bonds as qualified small issue bonds within the meaning of
Section 144(a) of the Code.
(i) ELECTION. The Issuer hereby elects to have the provisions of
Section 144(a)(4) of the Code apply to the Bonds.
( j) COVENANT TO MAINTAIN TAX EXEMPTION. The Issuer and the Company
hereby covenant and agree on their own behalf that they shall not take any
action, cause any action to be taken, omit to taken any action or cause
any omission to occur which would cause the interest on
25
the Bonds to become includible in the gross income of the Owners thereof
for federal income tax purposes.
Section 5.14. COMPLIANCE WITH REIMBURSEMENT AGREEMENT. The Company hereby
covenants and agrees that it will comply with all covenants and obligations
applicable to it in the Reimbursement Agreement from time to time in effect or,
if the Reimbursement Agreement is terminated prior to the termination of this
Loan Agreement, the Company agrees to comply with all covenants and obligations
applicable to it in the Reimbursement Agreement as in effect immediately prior
to the termination thereof until the termination of this Loan Agreement and the
payment of the Company's obligation hereunder.
Section 5.15. INSPECTION OF PROJECT. The Issuer, the Trustee and their
duly authorized agents shall have the right at all reasonable times to enter
upon any part of the premises of the Company at which the Project is located and
examine and inspect the same as may be reasonably necessary for the purpose of
determining whether the Company is in compliance with its obligations under
Section 5.1 or in the event of failure of the Company to perform its obligations
under Section 5. 1, and the Issuer, the Trustee and their duly authorized agents
shall also have the right at all reasonable times to examine the books and
records of the Company insofar as such books and records relate to the
acquisition, construction, installation and maintenance of the Project.
Section 5.16. PROJECT LIST. The Company shall maintain at the Project site
a list setting forth in reasonable detail all items constituting the Project,
and, to the extent applicable, all plans and specifications relating to the
Project.
Section 5.17. NO WARRANTY OF CONDITION OR SUITABILITY BY ISSUER. The
Company recognizes that the Issuer does not deal in goods of the kind comprising
components of the Project or otherwise hold itself out as having knowledge or
skill peculiar to the practices or goods involved in the Project, and that the
Issuer is not one to whom such knowledge or skill may be attributed by its
employment of an agent or broker or other intermediary who by his occupation
holds himself out as having such knowledge or skill. The Company further
recognizes that since the components of the Project have been designated and
selected by the Company, THE ISSUER HAS NOT MADE AN INSPECTION OF THE PROJECT OR
OF ANY FIXTURE OR OTHER ITEM CONSTITUTING A PORTION THEREOF, AND, EXCEPT AS
OTHERWISE PROVIDED HEREIN, THE ISSUER MAKES NO WARRANTY OR REPRESENTATION,
EXPRESS OR IMPLIED OR OTHERWISE, WITH RESPECT TO THE SAME OR TO THE LOCATION,
USE, DESCRIPTION, DESIGN, MERCHANTABILITY, FITNESS FOR USE FOR ANY PARTICULAR
PURPOSE, CONDITION OR DURABILITY THEREOF, TO THE QUALITY OF THE MATERIAL OR
WORKMANSHIP THEREIN, IT BEING AGREED THAT ALL RISKS INCIDENT THERETO ARE TO BE
BORNE BY THE COMPANY, IN THE EVENT OF ANY DEFECT OR DEFICIENCY OF ANY NATURE IN
THE PROTECT OR ANY FIXTURE OR OTHER ITEM CONSTITUTING A PORTION THEREOF, WHETHER
PATENT OR LATENT, THE ISSUER SHALL HAVE NO RESPONSIBILITY OR LIABILITY WITH
RESPECT THERETO. THE PROVISIONS OF THIS SECTION HAVE BEEN NEGOTIATED AND ARE
INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY WARRANTIES OR
REPRESENTATIONS BY THE ISSUER, EXPRESS OR IMPLIED (TO THE EXTENT PERMITTED BY
APPLICABLE LAW), WITH RESPECT TO THE PROJECT OR ANY FIXTURE OR OTHER ITEM
CONSTITUTING A PORTION THEREOF, WHETHER ARISING PURSUANT TO THE U.C.C. OR
ANOTHER LAW NOW OR HEREAFTER IN EFFECT OR OTHERWISE.
[End of Article V]
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ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
Section 6.1. EVENTS OF DEFAULT DEFINED. The following shall be "Events of
Default" hereunder and the term "Event of Default" shall mean, whenever it is
used herein, any one or more of the following events:
(a) failure by the Company to make any payment required to be made
under the Note or Section 4.2(a) when the same becomes due and payable.
(b) failure by the Company to comply with the provisions of Section
` 7.2;
(c) failure by the Company to observe or perform any agreement
hereunder or on its part to be observed or performed, other than as
referred to in subsection (a) or (b) of this Section, for a period of
thirty (30) days after written notice, specifying such failure and
requesting that it be remedied, given to the Company and to the Credit
Provider by the Issuer or the Trustee, unless the Issuer and the Trustee
shall agree in writing to an extension of such time prior to its
expiration; provided, however, if the failure stated in the notice cannot
be corrected within the applicable period, the Issuer and the Trustee will
not unreasonably withhold their consent to an extension of such time if it
is possible to correct such failure and corrective action is instituted by
the Company or the Credit Provider within the applicable period and
diligently pursued until the failure is corrected; or in the case of any
such default which can be cured with due diligence but not within such
thirty-day period, the Company's or Credit Provider's failure to proceed
promptly to cure such default and thereafter prosecute the curing of such
default with due diligence;
(d) any representation by or on behalf of the Company contained in
this Loan Agreement or in any instrument furnished in compliance with or
in reference to this Loan Agreement, the Indenture or the Reimbursement
Agreement proves false or misleading in any material respect as of the
date of the making or furnishing thereof;
(e) an "Event of Default" occurs and is continuing under the
Indenture;
(f) an "Event of Default" occurs and is continuing under the
Reimbursement Agreement;
provided, however, that the occurrence of an event described in Section 6.1(d)
shall not constitute an "Event of Default" hereunder, without the prior written
consent of the Credit Provider.
Upon the occurrence of an Event of Default hereunder, the Trustee shall
promptly notify in writing the Issuer, the Paying Agent, the Remarketing Agent
the Credit Provider and the Local Government Commission of such occurrence.
The Company and the Issuer hereby authorize the Credit Provider to do any
and all things necessary to correct any Event of Default described in subsection
(c) above on behalf of the Company.
The foregoing provisions of subsection (c) of this Section are subject to
the following limitations: If by reason of force majeure, the Company is unable
in whole or in part to carry out the agreements on its part therein referred to,
the failure to perform such agreements due to such inability shall not
constitute
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an Event of Default nor shall it become an Event of Default upon appropriate
notification to the Company or the passage of the stated period of time. The
term "force majeure" as used herein shall mean, without limitation, the
following: acts of God; strikes, lockouts or other industrial disturbances; acts
of public enemies; orders of any kind of the government of the United States of
America or of the State or any of their departments, agencies, political
subdivisions or officials, or any civil or military authority; insurrections;
riots; epidemics; landslides; lightning; earthquakes; fires; hurricanes;
tornadoes; storms; floods; washouts; droughts; arrests; restraint of government
and people; civil disturbances; explosions; breakage or accident to machinery,
transmission pipes or canals; partial or entire failure of utilities; or any
other cause or event not reasonably within the control of the Company. The
Company agrees, however, to remedy with all reasonable dispatch the cause or
causes preventing the Company from carrying out its agreements; provided, that
the settlement of strikes, lockouts and other industrial disturbances shall be
entirely within the discretion of the Company, and the Company shall not be
required to make settlement of strikes, lockouts and other industrial
disturbances by acceding to the demands of the opposing party or parties when
such course is, in the judgment of the Company, unfavorable to the Company.
Section 6.2. REMEDIES. Whenever an Event of Default has occurred and is
continuing, the Trustee, as the assignee and pledgee of the Issuer under the
Indenture, shall take any one or more of the following remedial steps:
(a) The Trustee may declare all payments of principal and accrued
interest required to be made under Section 4.2(a) and the Note to be
immediately due and payable, whereupon the same shall become immediately
due and payable. If the Trustee elects to exercise the remedy afforded in
this subsection (a) and accelerates all payments required to be made under
Section 4.2(a) and the Note, the Trustee must accelerate the payment of
the Bonds under Section 7.02 of the Indenture and amount then due and
payable by the Company as accelerated payments hereunder shall be the sum
of (i) the aggregate principal amount of the outstanding Bonds, (ii) all
interest on the Bonds then due and to become due to the date of payment of
the principal of the Bonds, and (iii) all other amounts due and payable to
the Issuer, if any, to the Owners or to the Trustee with respect to the
payment of the Bonds, including Counsel fees actually incurred; or
(b) Subject to the provisions of Section 6.5 hereof, the Trustee may
take whatever action at law or in equity may appear necessary or desirable
to collect any sums then due and thereafter to become due hereunder or to
enforce performance and the observance of any agreement of the Company
hereunder or under the Note; or
(c) The Trustee may exercise any remedies provided in the Indenture.
Any amounts collected pursuant to any action taken under this
Section shall be paid into the Bond Fund and applied in accordance with
the provisions of the Indenture and after Payment in Full of the Bonds and
the payment of any costs occasioned by an Event of Default hereunder, any
excess moneys in the Bond Fund shall be returned to the Company.
The Company hereby authorizes the Trustee to draw moneys under the Credit
Facility in accordance with the Indenture upon a declaration of acceleration of
payment of the Bonds in an amount equal to (i) the aggregate principal amount of
all outstanding Bonds, (ii) redemption premium thereon, if any (if the Credit
Facility provides for the payment of such redemption premium) and (ii) all
interest on the Bonds due and to become due to the date of payment. The
obligation of the Company to accelerate payment of all payments required to be
made by the Company pursuant to Section 4.2 upon a declaration of acceleration
of payment of the Bonds shall be deemed satisfied and discharged by a
corresponding drawing and payment under the Credit Facility.
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Section 6.3. NO REMEDY EXCLUSIVE. Subject to the provisions of Section
6.5, no remedy herein conferred upon or reserved to the Trustee is intended to
be exclusive of any other remedy, but each and every such remedy shall be
cumulative and shall be in addition to every other remedy hereunder or now or
hereafter existing at law, in equity or by statute. No delay or omission to
exercise any right or power accruing upon the occurrence of any Event of Default
shall impair any such right or power or shall be construed to be a waiver
thereof, but any such right or power may be exercised from time to time and as
often as may be deemed expedient. The Trustee and the Owners of the Bonds,
subject to the provisions of the Indenture, shall be entitled to the benefit of
all agreements herein contained.
Section 6.4. AGREEMENT TO PAY COUNSEL FEES AND EXPENSES. If there should
occur a default or an event of default hereunder and the Trustee or the Issuer
should employ Counsel or incur other expenses for the collection of sums due
hereunder or the enforcement of performance or observance of any agreement on
the part of the Company herein contained, the Company agrees that it will on
demand therefor pay to the Trustee or the Issuer the reasonable fee of such
Counsel and such other reasonable expenses so incurred by the Trustee or the
Issuer.
If the Company should fail to make any payments required in this Section,
such item shall continue as an obligation of the Company until the same shall
have been paid in full, with interest thereon from the date such payment was due
at the rate per annum borne by the Bonds until paid in full.
Section 6.5. WAIVER OF EVENTS OF DEFAULT AND RESCISSION OF ACCELERATION.
If, in compliance with the requirements of Section 7.09 of the Indenture, the
Trustee waives any event of default as therein defined with the written consent
of the Credit Provider (if such consent is required by the Indenture) and its
consequences or rescind any declaration of acceleration of payments of the
principal of, premium, if any, and interest on the Bonds, such waiver shall also
waive any event of default hereunder and its consequences and such rescission of
a declaration of acceleration of the principal of, premium, if any, and interest
on the Bonds shall also rescind any declaration of any acceleration of all
payments required to be made under Section 4.2. In case of any such waiver or
rescission, or in case any proceeding taken by the Trustee on account of any
such event of default shall have been discontinued or abandoned or determined
adversely, then and in every such case the Issuer, the Company, the Trustee, the
Credit Provider and the Owners of the Bonds shall be restored to their former
positions and rights hereunder, but no such waiver or rescission shall extend to
any subsequent or other event of default or impair any right consequent thereon.
[End of Article VI]
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ARTICLE VII
PREPAYMENT UNDER LOAN AGREEMENT
Section 7.1. OPTION TO PREPAY IN FULL. Unless there has been a
determination which could result in a Determination of Taxability described in
Section 7.2, and subject to requirements under the Indenture for Available
Moneys in certain instances, the Company shall have the option to prepay in full
the Note and terminate this Loan Agreement prior to Payment in Full of the Bonds
by (a) paying to the Trustee an amount of cash or Federal Securities which,
together with existing investments in the Bond Fund, will provide the Bond Fund
with cash or Federal Securities, the principal of and interest on which will be
sufficient, in the opinion of the Trustee, (1) to redeem in accordance with the
relevant section of the Indenture all Bonds then outstanding and to pay all
amounts, if any, required by Section 4.01 of the Indenture on the date on which
the Bonds are to be redeemed, (2) to pay at maturity all Bonds maturing prior to
or simultaneously with such redemption, (3) to pay interest on all Bonds
outstanding prior to their redemption or payment at maturity, and (4) to pay the
reasonable fees and expenses of the Trustee and any other expenses for which the
Company may be responsible under this Loan Agreement, the Note or the Indenture,
and (b) by making arrangements satisfactory to the Trustee for giving the
required notice of redemption.
Section 7.2. MANDATORY PREPAYMENT. The Company shall be obligated to
prepay the Note in full (a) upon the occurrence of a Determination of Taxability
or the Cessation of Operations as defined in the Indenture, or (b) as otherwise
provided in Section 3.01 of the Indenture.
Section 7.3. OPTION TO PREPAY IN PART. The Company shall have the option
to prepay the Note in part, and the Issuer agrees that the Trustee may accept
such payments to be paid to the Trustee for deposit in the Bond Fund and used
for redemption or, at the election of the Company, purchase of Outstanding Bonds
in the manner and to the extent provided in the Indenture. The principal amount
of each Bond so purchased, delivered or credited shall be appropriately credited
by the Trustee against the obligation of the Company to make future payments on
the Note.
Section 7.4. RELATION OF OPTIONS TO INDENTURE. The options granted to the
Company in this Article shall be prior and superior to the Indenture and may be
exercised whether or not the Company is in default under this Loan Agreement,
provided that any such default will not result in the non-fulfillment of any
condition to the exercise of any such option.
Section 7.5. OBLIGATIONS AFTER PAYMENT OF NOTE AND TERMINATION OF LOAN
AGREEMENT. Anything contained herein to the contrary notwithstanding, the
obligations of the Company contained in Sections 4.2(c),4.4,5.2 and 6.4 shall
continue after payment of the Note and termination of this Loan Agreement.
[End of Article VII]
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ARTICLE VIII
MISCELLANEOUS
Section 8.1. TERM OF LOAN AGREEMENT. Except as provided in Section 7.5,
this Loan Agreement shall terminate when Payment in Full of the Bonds shall have
been made.
Section 8.2. NOTICES. All notices, approvals, consents, requests and other
communications hereunder shall be in writing and shall be deemed to have been
given when delivered by hand or mailed by first class registered or certified
mail, return receipt requested, postage prepaid, and addressed as follows or
(unless specifically prohibited) when telexed or telecopied to the telex or
telecopy numbers as follows:
(a) If to the Issuer: The Mecklenburg County Industrial Facilities and
Pollution Control Financing Authority
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chairman
(b) If to the Company: SteriGenics International
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Facsimile Transmission Number: (▇▇▇) ▇▇▇-▇▇▇▇
(c) If to the Trustee: Bank One, Columbus, N.A.,
in care of Bank One Trust Company, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Department
Facsimile Transmission Number: (▇▇▇) ▇▇▇-▇▇▇▇
(d) If to the
Credit Provider: Comerica Bank-California
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile Transmission Number: (▇▇▇) ▇▇▇-▇▇▇▇
(e) If to the
Remarketing Agent: Wheat, First Securities, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Money Market Trading
Facsimile Transmission Number: (▇▇▇) ▇▇▇-▇▇▇▇
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(f) If to the
Paying Agent: Bank One, Columbus, N.A.,
in care of Bank One Trust Company, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Department
Facsimile Transmission Number: (▇▇▇) ▇▇▇-▇▇▇▇
A duplicate copy of each notice, approval, consent, request or other
communication given hereunder by the Issuer, the Company, the Trustee, the
Remarketing Agent or the Credit Provider to any one of the others shall also be
given to all of the others. The Issuer, the Company, the Trustee, the Credit
Provider, the Remarketing Agent and the Paying Agent may, by notice given
hereunder, designate any further or different addresses to which subsequent
notices, approvals, consents, requests or other communications shall be sent or
persons to whose attention the same shall be directed.
Section 8.3. BINDING EFFECT. This Loan Agreement shall inure to the
benefit of and shall be binding upon the Issuer, the Company and their
respective successors and assigns.
Section 8.4. SEVERABILITY. If any provision hereof shall be held invalid
or unenforceable by any court of competent jurisdiction, such holding shall not
invalidate or render unenforceable any other provision hereof.
Section 8.5. AMOUNTS REMAINING IN BOND FUND. It is agreed by the parties
hereto that any amounts remaining in the Bond Fund and Project Fund upon
expiration or sooner termination of this Loan Agreement, after Payment in Full
of the Bonds, payment of the fees, charges and expenses of the Trustee, the
Remarketing Agent, the Paying Agent and the Credit Provider (including, without
limitation, the fees and expenses of their respective Counsel), and payment of
all other amounts required to be paid under the Indenture and under the
Reimbursement Agreement, including payment of rebatable arbitrage, shall be paid
immediately to the Company by the Trustee.
Section 8.6. RELIANCE BY ISSUER. The Issuer shall have the right at all
times to act in reliance upon the authorization, representation or certification
of the Company Representative or the Trustee.
Section 8.7. ISSUER'S OBLIGATIONS LIMITED. Except as otherwise expressly
herein provided, no recourse under or upon any obligation or agreement contained
in this Loan Agreement or in any Bond or under any judgment obtained against the
Issuer, or by the enforcement of any assessment or by any legal or equitable
proceeding by virtue of any constitution or statute or otherwise or under any
circumstances, under or independent of the Indenture, shall be had against the
Issuer.
Anything in this Loan Agreement to the contrary notwithstanding, it is
expressly understood and agreed by the parties hereto that (a) the Issuer may
rely conclusively on the truth and accuracy of any certificate, opinion, notice
or other instrument furnished to the Issuer by the Trustee or the Company as to
the existence of any fact or state of affairs required hereunder to be noticed
by the Issuer; (b) the Issuer shall not be under any obligation hereunder to
perform any record-keeping or to provide any legal services, it being understood
that such services shall be performed either by the Trustee or the Company; and
(c) none of the provisions of this Loan Agreement shall require the Issuer to
expend or risk its own funds or to otherwise incur financial liability in the
performance of any of its duties or in the exercise of any of its rights or
powers hereunder, unless it shall first have been adequately indemnified to its
satisfaction against the cost, expenses and liability which may be incurred
thereby.
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Notwithstanding anything herein contained to the contrary, any obligation
which the Issuer may incur under this Loan Agreement or under any instrument
executed in connection herewith which shall entail the expenditure of money
shall not be a general obligation of the Issuer but shall be a limited
obligation payable solely from the Pledged Revenues.
Section 8.8. IMMUNITY OF DIRECTORS, OFFICERS AND EMPLOYEES OF ISSUER AND
THE LOCAL GOVERNMENT COMMISSION. No recourse shall be had for the enforcement of
any obligation, promise or agreement of the Issuer contained in the Indenture,
this Loan Agreement or in any Bond issued under the Indenture for any claim
based thereon or otherwise in respect thereof, against any director, officer,
employee or agent, as such, in his individual capacity, past, present or future,
of the Issuer or the Local Government Commission, either directly or through the
Issuer or the Local Government Commission, whether by virtue of any
constitutional provision, statute or rule of law, or by the enforcement of any
assignment or penalty or otherwise; it being expressly agreed and understood
that the Bonds, the Indenture and this Loan Agreement are solely corporate
obligations, and that no personal liability whatsoever shall attach to, or be
incurred by, any director, officer, employee or agent, as such, past, present or
future, of the Issuer or the Local Government Commission, either directly or
through the Issuer or the Local Government Commission, under or by reason of any
of the obligations, promises or agreements entered into between the Issuer and
the Company whether contained in this Loan Agreement or to be implied therefrom
as being supplemental hereto or thereto, and that all personal liability of that
character against every such director, officer, employee or agent is, by the
execution of this Loan Agreement and the Indenture, and as a condition of, and
as part of the consideration for, the execution of this Loan Agreement and the
Indenture, expressly waived and released.
Section 8.9. PAYMENTS BY CREDIT PROVIDER; CONFIRMING BANK. The Credit
Provider and the Confirming Bank shall, to the extent of any payments made by it
or the Confirming Bank pursuant to the Credit Facility or the Confirmation, if
applicable, be subrogated to all rights of the Issuer or its assigns (including,
without limitation, the Trustee) as to all obligations of the Company with
respect to which such payments shall be made by the Credit Provider or the
Confirming Bank, but, so long as any of the Bonds remain outstanding under the
terms of the Indenture, such right of subrogation on the part of the Credit
Provider shall be in all respects subordinate to all rights and claims of the
Issuer for all payments which are then due and payable under the Indenture or
otherwise arising under this Loan Agreement, the Indenture or the Bonds. The
Trustee will, upon request, execute and deliver any instrument reasonably
requested by the Credit Provider or the Confirming Bank, if applicable, to
evidence such subrogation and the Trustee shall assign to the Credit Provider or
the Confirming Bank, if applicable, its rights in any obligations of the Company
with respect to which payment of the entire principal balance and accrued
interest thereon shall be made by the Credit Provider or the Confirming Bank, if
applicable.
Section 8.10. AMENDMENTS, CHANGES AND MODIFICATIONS. Except as otherwise
provided herein or in the Indenture, subsequent to me date of issuance and
delivery of the Bonds and prior to their payment in full, this Loan Agreement
and the Note may not be effectively amended or terminated without the written
consent of the Company, the Trustee and the Credit Provider. In addition to the
foregoing, any provisions contained in this Loan Agreement or any supplement
hereto relating to any notice to, approval of, indemnification of, or action by
the Local Government Commission may not be amended or supplemented without me
prior consent of the Local Government Commission.
Section 8.11. COUNTER PARTS. This Loan Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument.
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33
Section 8.12. CAPTIONS. The captions and headings herein are for
convenience only and in no way define, limit or describe the scope or intent of
any provisions hereof.
Section 8.13. AMENDMENT OF LOAN AGREEMENT. The Board of Commissioners of
the Issuer must approve all amendments of this Loan Agreement. This Loan
Agreement may not be effectively modified, altered, amended or supplemented
without the prior written consent of the Company, the Trustee and the Credit
Provider and in accordance with the provisions of the Indenture.
Section 8.14. LAW GOVERNING CONSTRUCTION OF LOAN AGREEMENT. This Loan
Agreement shall be governed by, and construed and enforced in accordance with,
the laws of the State.
Section 8.15. NO THIRD PARTY BENEFICIARY. It is specifically agreed
between the parties executing this Loan Agreement that neither this Loan
Agreement nor any of the provisions hereof are intended to establish in favor of
the public or any member thereof, other than as expressly provided herein,
including the assignment of the Issuer's rights under this Loan Agreement to the
Trustee pursuant to the Indenture, the rights of a third party beneficiary
hereunder, as to authorize any one not a party to this Loan Agreement to
maintain a suit for personal injuries or property damage pursuant to the terms
or provisions of this Loan Agreement. The duties, obligations and
responsibilities of the parties to this Loan Agreement with respect to third
parties shall remain as imposed by law.
[End of Article VIII]
29
34
IN WITNESS WHEREOF, the Issuer and the Company have caused this Loan
Agreement to be executed in their respective corporate names and their
respective corporate seals to be affixed hereto and attested by their authorized
officers, all as of the date first above written.
THE MECKLENBURG COUNTY INDUSTRIAL
FACILITIES AND POLLUTION CONTROL
FINANCING AUTHORITY
By: [SIG]
------------------------------
Chairman
(SEAL)
Attest:
By: [SIG]
-------------------------------
Secretary
[SIGNATURE PAGES CONTINUED ON THE FOLLOWING PAGE.]
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35
[COUNTERPART SIGNATURE PAGE TO LOAN AGREEMENT]
STERIGENICS INTERNATIONAL
By: [SIG]
-----------------------------
Title: Vice President Finance
--------------------------
(CORPORATE SEAL)
Attest:
By:
--------------------------
Title:
-----------------------
31
36
EXHIBIT A
to
LOAN AGREEMENT
DESCRIPTION OF PROJECT
The Project consists of the acquisition of an approximately 5.5 acre site
at 10811 ▇▇▇▇▇▇▇ Cove Park Drive, Charlotte, Mecklenburg County, North Carolina,
and the acquisition, construction and equipping of an approximately 64,000
square foot contract radiation sterilization processing facility thereon, and
the acquisition and installation of machinery, equipment and other personal
property to be used in connection therewith, to be owned and operated by the
Company for the sterilization of health care, laboratory, pharmaceutical and
packaging products.
37
EXHIBIT B
FORM OF NOTE
PROMISSORY NOTE
STERIGENICS INTERNATIONAL
$9,000,000 March____, 1996
SteriGenics International, a California corporation (the "Company"), for
value received, hereby promises to pay to The Mecklenburg County Industrial
Facilities and Pollution Control Financing Authority (the "Issuer"), or assigns,
on March 1, 2016, the principal sum of Nine Million Dollars ($9,000,000),
subject to prior payment, with interest on the unpaid principal sum, from
March___, 1996, until said principal sum shall be paid, and to the extent
permitted by law, interest on overdue installments of such interest, at the then
interest rate provided in the Bonds, as hereinafter defined. Interest shall be
payable at the interest rates payable on the Bonds, and the principal of,
premium, if any, and interest on this Note shall be payable at the times as set
forth in more detail in the Loan Agreement and the Indenture (as such terms are
defined below).
Payments shall be made in lawful money of the United States of America in
immediately available funds on the date payment is due, at the principal
corporate trust office of Bank One, Columbus, N.A., as Paying Agent (the "Paying
Agent"), in Columbus, Ohio, or at such other place as the Trustee may direct in
writing.
Anything herein to the contrary notwithstanding, any amount held by Bank
One, Columbus, N.A., as trustee (the "Trustee"), in the Bond Fund referred to in
the Indenture, which is available to be used to pay the principal of, premium,
if any or interest on the Bonds, shall, at the request of the Company, be
credited against the next succeeding payment hereunder and shall reduce the
payment to be made by the Company, provided that at any time during which a
Credit Facility, as defined in the Indenture, is in effect, such amounts shall
be in Available Moneys, as defined in the Indenture, before such credit shall be
made. If the amount held by the Trustee in the Bond Fund should be sufficient to
pay at the times required the principal of, premium, if any, and interest on the
Bonds then remaining unpaid and to pay all fees and expenses of the Trustee, the
Issuer and the Paying Agent accrued and to accrue through final payment of the
Bonds (provided that at any time during which a Credit Facility is in effect
such amounts constitute Available Moneys), then the Company shall not be
obligated to make any further payments hereunder, except to the extent losses
may be incurred in connection with investment of moneys in the Bond Fund.
The Issuer, by the execution of the Indenture, as hereinafter defined, and
the assignment form attached to this Note, is assigning this Note and the
payments thereon to the Trustee acting pursuant to the Indenture of Trust, dated
as of March 1, 1996 (the "Indenture"), between the Issuer and the Trustee as
security for the Issuer's $9,000,000 in aggregate principal amount of The
Mecklenburg County Industrial Facilities and Pollution Control Financing
Authority Industrial Development Revenue Bonds (SteriGenics
38
International Project), Series 1996 (the "Bonds"), as issued pursuant to the
Indenture. Payments of principal of, premium, if any, and interest on this Note
shall be made directly to the Trustee for the account of the Issuer pursuant to
such assignment and applied only to the principal of, premium, if any, and
interest on the Bonds. All obligations of the Company hereunder shall terminate
when all sums due and to become due pursuant to the Indenture, this Note, the
Loan Agreement, as hereinafter defined, and the Bonds have been paid.
In addition to the payments of principal, premium, if any, and interest
specified in the first paragraph hereof, the Company shall also pay such
additional amounts, if any, which, together with other moneys available therefor
pursuant to the Indenture, may be necessary to provide for payment when due
(whether at maturity, by acceleration or call for redemption, mandatory
purchase, purchase upon optional tenders, sinking fund redemption or otherwise)
of principal and purchase price of, premium, if any, and interest on the Bonds.
The Company shall have the option or may be required to prepay this Note
in whole or in part upon the terms and conditions and in the manner specified in
the Loan Agreement, dated as of March 1, 1996 (the "Loan Agreement"), between
the Issuer and the Company.
This Note is issued pursuant to the Loan Agreement in satisfaction of the
Company's payment obligation in Section 4.2(a) thereof and is entitled to the
benefits and subject to the conditions thereof, including the provisions of
Section 4.5 thereof that the Company's obligations thereunder and hereunder
shall be unconditional as provided in such Section 4.5 All the terms, conditions
and provisions of the Loan Agreement and the applicable provisions of the Bonds
and the Indenture are, by this reference thereto, incorporated herein as a part
of this Note, including, without limitation, the provisions of Section 8.8 of
the Loan Agreement entitled "Immunity of Directors, Officers and Employees of
Issuer and the Local Government Commission. "
In case an Event of Default, as defined in the Loan Agreement, shall
occur, the principal of, premium, if any, and interest on this Note may be
declared immediately due and payable as provided in the Loan Agreement. Ibis
Note shall be governed by, and construed in accordance with, the laws of the
State of North Carolina.
[SIGNATURE PAGE CONTINUED ON THE FOLLOWING PAGE]
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39
IN WITNESS WHEREOF, the Company has caused this Note to be executed in its
corporate name and its seal to be hereunto affixed and attested by its duly
authorized officers, all as of the date first above written.
STERIGENICS INTERNATIONAL
By:
-----------------------------
Title:
--------------------------
(CORPORATE SEAL)
Attest:
By:
---------------------------
Title:
------------------------
3
40
ASSIGNMENT
The Mecklenburg County Industrial Facilities and Pollution Control
Financing Authority (the "Issuer"), hereby irrevocably assigns, without
recourse, the foregoing Note to Bank One, Columbus, N.A., as trustee (the
'Trustee"), under the Indenture of Trust, dated as of March 1, 1996 (the
"Indenture"), between the Issuer and the Trustee and hereby directs SteriGenics
International, a California corporation, as the maker of the Note to make all
payments of principal of, premium, if any, and interest thereon directly to the
Trustee at its principal corporate trust office in Columbus, Ohio, or at such
other place as the Trustee may direct in writing. Such assignment is made as
security for the payment of $9,000,000 in aggregate principal amount of the
Issuer's Industrial Development Revenue Bonds (SteriGenics International
Project), Series 1996, issued pursuant to the Indenture.
THE MECKLENBURG COUNTY INDUSTRIAL
FACILITIES AND POLLUTION CONTROL
FINANCING AUTHORITY
By:
-------------------------------
Chairman