1
EXHIBIT 10.5
SERIES 1985A LOAN AGREEMENT
Between
TRINITY RIVER INDUSTRIAL DEVELOPMENT AUTHORITY
And
RADIATION STERILIZERS, INCORPORATED
Dated as of November 1, 1985
Series 1985A
$2,150,000
2
LOAN AGREEMENT
TABLE OF CONTENTS
(The Table of Contents is not a part of the Loan Agreement but is for
convenience of reference only)
Page
----
PARTIES 1
ARTICLE I. DEFINITIONS AND CERTAIN
RULES OF INTERPRETATION
Section 1.1. Definitions 1
Section 1.2. Certain Rules of Interpretation 13
ARTICLE II. REPRESENTATIONS
Section 2.1. Representations by the Issuer 13
Section 2.2. No Warranty by Issuer of Condition
or Suitability of the Facilities 16
Section 2.3. Representations by the Company 16
ARTICLE III. ACQUISITION, CONSTRUCTION AND
INSTALLATION OF THE FACILITIES;
ISSUANCE OF THE BONDS
Section 3.1. Acquisition, Construction and
Installation of the Facilities 22
Section 3.2. Agreement to Issue Bonds;
Application of Proceeds 22
Section 3.3. Disbursements from
the Construction Fund 22
Section 3.4. Obligation to Furnish
Documents to Trustee 27
Section 3.5. Establishment of Completion Date 27
Section 3.6. Company Required to Pay
Costs of Facilities If
Construction Fund Insufficient 28
Section 3.7. Remedies Against Suppliers,
Contractors and Subcontractors
and Their Sureties 29
Section 3.8. Investment of Bond Fund and
Construction Fund Moneys Permitted 29
Section 3.9. Title to the Facilities 29
3
Page
----
ARTICLE IV. LOAN BY THE ISSUER TO THE
COMPANY; REPAYMENT OF LOAN
Section 4.1. Loan By the Issuer to the
Company; Repayment of Loan;
Obligations Unconditional 30
Section 4.2. Company Consent to Assignment of
Agreement and Execution of Indenture;
Company's Performance Under Indenture 31
Section 4.3. Prepayment of Loan 32
Section 4.4. Delivery of Letter of Credit
to Trustee 34
Section 4.5. Satisfaction of Company's Obligation 35
Section 4.6. Alternate Letter of Credit;
Alternate Credit Facility 35
Section 4.7. Extension of Letter of Credit 36
Section 4.8. Notice of Prepayments;
Issuer to Effect Redemption 36
Section 4.9. Relative Position of this
Article and the Indenture 36
Section 4.10. Place of Payment 37
Section 4.11. Payments to the Remarketing Agent
and the Paying Agent 37
ARTICLE V. PARTICULAR COVENANTS
Section 5.1. Maintenance of Existence 37
Section 5.2. Qualification in the State 38
Section 5.3. Indemnification of Issuer
and Trustee
Section 5.4. Payment of Trustee's Fees 39
Section 5.5. Maintenance and Operation
of the Facilities 40
Section 5.6. Covenants of Company and Issuer with
Respect to Exemption of Interest
from Federal Income Taxation 40
Section 5.7. Insurance Required 43
Section 5.8. Taxes, Other Governmental
Charges and Utility Charges 44
Section 5.9. Damage, Destruction and Eminent Domain 44
Section 5.10. Company's Obligation To Pay
Certain Fees Expenses of the Issuer 45
Section 5.11. Application of Certain Proceeds
Prior to the Expiration Date
of the Letter of Credit 45
Section 5.12. Non-Arbitrage Covenant; Compliance
with Special Arbitrage Rules 46
Section 5.13. Fixed Interest Rate 52
4
Page
----
ARTICLE VI. EVENTS OF DEFAULT AND REMEDIES
Section 6.1. Events of Default 52
Section 6.2. Remedies on Events of Default 54
Section 6.3. No Remedy Exclusive 55
Section 6.4. Agreement To Pay Attorneys'
Fees and Expenses 56
Section 6.5. No Additional Waiver
Implied by One Waiver 56
ARTICLE VII. MISCELLANEOUS
Section 7.1. Termination of Agreement 56
Section 7.2. Confidential Information 57
Section 7.3. Cancellation of Bonds 57
Section 7.4. Amounts Remaining in Bond Fund,
Construction Fund and
Other Funds and Accounts 57
Section 7.5. Notices 57
Section 7.6. Binding Effect; Parties in Interest 57
Section 7.7. Extent of Covenants of the
Issuer; No Personal Liability 58
Section 7.8. Amendments, Changes and Modifications 58
Section 7.9. Execution Counterparts 58
Section 7.10. Severability 58
Section 7.11. Captions 58
Section 7.12. Payments Due on Non-Business Days 59
Section 7.13. Governing Law 59
TESTIMONIUM
SIGNATURES AND SEALS
EXHIBIT A
5
SERIES 1985A LOAN AGREEMENT
Between
TRINITY RIVER INDUSTRIAL DEVELOPMENT AUTHORITY
and
RADIATION STERILIZERS, INCORPORATED
THIS SERIES 1985A LOAN AGREEMENT made as of the 1st day of November, 1985,
between the TRINITY RIVER INDUSTRIAL DEVELOPMENT AUTHORITY, a non-profit
industrial development corporation created and existing under the laws of the
State of Texas (the Issuer), and RADIATION STERILIZERS, INCORPORATED, a
corporation organized and existing under the laws of the State of California and
qualified to do business in the State of Texas.
WITNESSETH:
That the parties hereto, intending to be legally bound hereby, and for and
in consideration of the premises and the mutual covenants hereinafter contained,
do hereby covenant, agree and bind themselves, as follows; provided, that any
obligation of the Issuer created by or a rising out of this Agreement shall
never constitute a debt or a pledge of the faith and credit or the taxing power
of the Issuer or any political subdivision or taxing district of the State of
Texas but shall be payable solely out of the "Trust Estate" (defined in the
Trust Indenture hereinafter referred to), anything herein contained to the
contrary by implication or otherwise notwithstanding:
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:
Act - The Development Corporation Act of 1979, Article 5190.6 V.A.T.C.S.,
as amended.
Adjustment Date - After the Conversion Date, the Interest Payment Date
next preceding the Expiration Date of
6
the Alternate Credit Facility or the Expiration Date of the Letter of Credit, as
the case may be,
Agreement - This Series 1985A Loan Agreement as from time to time
supplemented or amended in accordance with the provisions hereof and of the
Indenture.
Alternate Credit Facility - A credit facility other than the Letter of
Credit, including without limitation, an irrevocable letter of credit or bond
insurance policy, which provides for payment of the principal of, and the
interest on, the Bonds, when due.
Alternate Letter of Credit - An irrevocable letter of credit issued in
accordance with Section 4.6 of this Agreement.
Authorized Company Representative - The person at the time designated to
act on behalf of the Company by written certificate furnished to the Issuer, the
Bank and the Trustee, containing the specimen signature of such person and
signed on behalf of the Company by its President or any Vice President. Such
certificate may designate an alternate or alternates.
Authorized Issuer Representative - The person at the time designated to
act on behalf of the Issuer by written certificate furnished to the Company, the
Bank and the Trustee containing the specimen signature of such person and signed
on behalf of the Issuer by its President or Vice President. Such certificate may
designate an alternate or alternates. Such person must be satisfactory to the
Company and shall be replaced by the Issuer upon the written request of the
Company.
Available Moneys - Moneys on deposit in trust with the Trustee for a
period of at least one hundred twenty-three (123) days during which no petition
in bankruptcy or similar insolvency proceeding has been filed by or against the
Company.
Bank - The issuer of the Letter of Credit, initially, ▇▇▇▇▇ Fargo Bank,
N.A., San Jose, California, a national banking association.
Bond Fund - The Bond principal and interest payment fund created in
Section 702 of the Indenture and within which has been established a general
account and a special account. Any reference herein to the "Bond Fund" without
further limitation or explanation shall be deemed to be a reference to the
general account in the Bond Fund.
2
7
Bond Payment Date - Any date upon which the principal of, and the
redemption premium (if any) or interest on, the Bonds shall be payable pursuant
to the Indenture, whether at stated maturity, by redemption, by acceleration or
otherwise.
Bond Resolution - The resolution adopted by the Issuer authorizing the
issuance of the Bonds, as the same may be amended, modified or supplemented by
any amendments or modifications thereof and supplements thereto entered into in
accordance with the provisions of the Indenture.
Bondholder, owner or holder of the Bonds - The registered owner of any
Bond.
Bonds - The Trinity River Industrial Development Authority Variable Rate
Demand Industrial Development Revenue Bonds (Radiation Sterilizers, Incorporated
Project), series 1985A, in the aggregate principal amount of $2,150,000, issued
pursuant to the provisions of the Indenture.
Business Day - Any day, other than a Saturday or Sunday, on which banks
located in the cities in which the principal corporate trust office of the
Trustee and the principal office of the Bank are located and in New York, New
York, are not required or authorized by law to remain closed and on which The
New York Stock Exchange, Inc. is not closed.
Code - The Internal Revenue Code of 1954, as amended, and the applicable
Income Tax Regulations thereunder.
Commission - The Texas Economic Development Commission, and its successors
and assigns.
Commitment Date - November 28, 1983, the date of the "official action"
resolution by which the Issuer agreed in principle to issue the Bonds for the
benefit of the Company to assist in the financing of the Facilities.
Company - Radiation Sterilizers, Incorporated, a corporation organized
under the laws of the State of California and qualified to do business in the
State, and its lawful successors and assigns including any surviving, resulting,
or transferee entity as provided in Section 5.1
Completion Date - The date of completion of the acquisition, construction
and equipping of the Facilities as that date shall be certified as provided in
Section 3.5.
3
8
Construction Fund - The construction fund created with the Depository in
Section 601 of the Indenture.
Construction Period - The period between the beginning of acquisition,
construction or equipping of the Facilities or the date on which Bonds are first
delivered to the Original Purchasers, whichever is earlier, and the Completion
Date.
Conversion Date - The date upon which the Bonds begin to bear interest at
the Fixed Interest Rate, which date shall be established in accordance with
Section 402 of the Indenture.
County - Tarrant County, a political subdivision of the State.
default - 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.
Depository - Initially, First City Bank of Dallas, or such other
depository appointed in accordance with Section 1218 of the Indenture.
Determination of Taxability - A determination that the interest income on
any of the Bonds is subject to Federal income taxation as a result of an Event
of Taxability, which determination shall be deemed to have been made upon the
occurrence of the first to occur of the following:
(a) the date on which the Company files (in compliance with its
obligations hereunder) any Supplemental Statement which discloses that an
Event of Taxability has occurred;
(b) the date on which the Company is advised in writing by the
Commissioner or any District Director of the Internal Revenue Service
that, based upon any filings of the Company, or upon any review or audit
of the Company, or upon any other grounds whatsoever, an Event of
Taxability has occurred;
(c) the date on which the Company receives notice from the Trustee
in writing that the Trustee has been advised by any holder or former
holder of a Bond that the Internal Revenue Service has issued a statutory
notice of deficiency or similar notice to such holder or former holder
which asserts in effect that the interest on the Bonds of such holder or
former holder is includable in the gross income of such holder or former
holder due to the occurrence of an Event of Taxability;
4
9
(d) the date on which the Company is advised in writing by the
Commissioner or any District Director of the Internal Revenue Service that
there has been issued a public or private ruling of the Internal Revenue
Service or a technical advice memorandum issued by the national office of
the Internal Revenue Service that the interest on the Bonds is includable
for Federal income tax purposes in the gross income of any holder or
former holder of a Bond due to the occurrence of an Event of Taxability;
or
(e) the date on which the Company is advised in writing that a final
determination, from which no further right of appeal exists, has been made
by a court of competent jurisdiction in the United States of America in a
proceeding with respect to which the Company has been given written notice
and an opportunity to participate and defend that the interest on the
Bonds is includable in the gross income of any holder or former holder of
a Bond due to the occurrence of an Event of Taxability;
provided, however, no Determination of Taxability shall occur under subparagraph
(b), (c) or (d) of this paragraph unless the Company has been afforded the
opportunity, at its expense, to contest any such conclusion and/or assessment
and, further, no Determination of Taxability shall occur until such contest, if
made, has been finally determined. The Company shall be deemed to have been
afforded the opportunity to contest if it shall have been permitted to commence
and maintain any action in the name of any holder or former holder of a Bond to
judgment and through any appeals therefrom or other proceedings related thereto.
Eligible Investments - Has the following meanings:
(a) any bonds or other obligations of the United States of America
which as to principal and interest constitute direct obligations of the
United States of America, or any obligations of subsidiary corporations of
the United States of America fully guaranteed as to payment by the United
States of America;
(b) obligations of the Federal Land Bank;
(c) obligations of the Federal Home Loan Bank;
(d) obligations of the Federal Intermediate Credit Bank;
(e) obligations of the Central Bank for Cooperatives;
5
10
(f) certificates of deposit of national or state banks located
within the State including the Trustee of any of its affiliates which have
deposits insured by the Federal Deposit Insurance Corporation and
certificates of deposit of Federal savings and loan associations and state
building and loan associations located within the State which have
deposits insured by the Federal Savings and Loan Insurance Corporation
(including the certificates of deposit of any bank, savings and loan
association or building and loan association acting as depository,
custodian or trustee for any proceeds of the Bonds); provided however,
that the portion of such certificates of deposit in excess of the amount
insured by the Federal Deposit Insurance Corporation or the Federal
Savings and Loan Insurance Corporation, if any, shall be secured by
deposit with the Federal Reserve Bank of Dallas, Texas, or other Federal
Reserve Bank or with any national or state bank located within the State,
of any of the obligations included in (a), (b), (c) , (d) or (e) above;
and
(g) repurchase agreements with respect to obligations included in
(a), (b), (c), (d) or (e) above and any other investments;
provided, however, that "Eligible Investments" with respect to any proceeds
resulting from a draw under the Letter of Credit shall mean only Government
Obligations maturing on or prior to the date payment is due of the obligation
for which the draw was made .
Event of Default - One of the events so denominated and described in
Section 6.1 of this Agreement.
Event of Taxability - The date on which the interest income on any of the
Bonds becomes subject to Federal income taxation as a result of any of the
following conditions or circumstances:
(a) as it result of Section 103(b) (6) (D) Capital Expenditures being paid
or incurred with respect to the Local Facilities, the aggregate face amount of
the Bonds determined in accordance with the provisions of Section 103(b) (6) (D)
of the Code exceeds the limit permitted by said Section 103 (b) (6) (D); or
(b) the Bonds constitute "arbitrage bonds" within the meaning of Section
103(c) of the Code; or
6
11
(c) the weighted average maturity of the Bonds exceeds the weighted
average estimated economic life of the components comprising the Facilities by
more than 20%, determined pursuant to Section 103(b)(14) of the Code; or
(d) (i) more than 25% of the net proceeds of the sale of the Bonds are
used to provide a facility the primary purpose of which is one of the following:
retail food and beverage services (including eating and drinking places, but
excluding grocery stores), automobile sales or service, or the provision of
recreation or entertainment; or
(ii) any portion of the net proceeds of the sale of the Bonds is
used to provide the following: any private or commercial golf course,
country club, massage parlor, tennis club, skating facility (including
roller skating, skateboard and ice skating), racquet sports facility
(including any handball or racquetball court), hot tub facility, suntan
facility or racetrack; or
(iii) any portion of the net proceeds of the sale of the Bonds is
used to provide any airplane, skybox or other luxury box, any health club
facility, any facility primarily used for gambling, or any store the
principal business of which is the sale of alcoholic beverages for
consumption off premises; or
(iv) any portion of the net proceeds of the sale of the Bonds is
used (directly or indirectly) for the acquisition of land (or an interest
therein) to be used for farming purposes, or 25% or more of the net
proceeds of the sale of the Bonds is used (directly or indirectly) for the
acquisition of land (or an interest therein) other than land to be used
for farming purposes; or
(v) any portion of the net proceeds of the sale of the Bonds is used
for the acquisition of any property the first use of which property is not
pursuant to such acquisition, except with respect to any building (and the
equipment therefor) if the rehabilitation expenditures with respect to
such building equal or exceed 15% of the portion of the cost of acquiring
such building (and equipment) financed with the proceeds of the Bonds; or
(e) the Facilities are operating as a facility the primary purpose of
which causes the Facilities to constitute a prohibited facility within the
meaning of Section 103(b) of the Code; or
7
12
(f) the sum of the authorized face amount of the Bonds allocable to each
"test-period beneficiary" (as defined in Section 103(b) (15) (D) of the Code)
plus the respective aggregate face amount of all tax-exempt industrial
development bonds presently outstanding (not including any obligations which are
to be redeemed from the proceeds of the Bonds) which are allocable to each such
test-period beneficiary exceeds $40,000,000; or
(g) less than substantially all of the net proceeds of the sale of the
Bonds are used to pay the costs of land or property of a character subject to
the allowance for depreciation under Section 167 of the Code; or
(h) the taking of any action by the Issuer, the Company or any person
acting on the Company's behalf or upon the Company's direction, or the failure
of the Issuer, the Company or any such person to take any action, or any mistake
in or untruthfulness of any representation of the Issuer or the Company
contained in this Agreement or in any certificate of the Issuer or the Company
delivered pursuant to this Agreement or the Indenture or in connection with the
issuance of the Bonds, if such act or omission, or such mistake in or
untruthfulness of such representation, has the effect of causing the interest
income on the Bonds to be or become subject to Federal income taxation;
provided, however, that no Event of Taxability shall be deemed to have occurred
with respect to any Bond if the interest income thereon shall be subject to
Federal income taxation for any period solely because during that period such
Bond was held by a person who is a Substantial User or a Related Person; and,
provided further, that no Event of Taxability shall be deemed to have occurred
if the interest income on any of the Bonds becomes subject to Federal income
taxation as a result of a Taxability Change.
Excess Investment Earnings Account - The excess investment earnings
account created pursuant to Section 804 of the Indenture.
Expiration Date of the Alternate Credit Facility - The date established in
the Alternate Credit Facility for the expiration thereof, and in the event such
date is extended, such date as extended.
Expiration Date of the Letter of Credit - The date established in the
Letter of Credit for the expiration thereof in accordance with its terms,
initially April 15, 1988, and in the event such date is extended, such date as
extended.
8
13
Facilities - The real, personal and mixed property identified in Exhibit A
attached hereto, together with any additions and improvements thereto,
modifications thereof and substitutions therefor.
Financing Statements - Any and all financing statements (including
continuation statements) filed for record from time to time to perfect the
security interests created or assigned.
Fixed Interest Rate - A fixed nonfloating interest rate on the Bonds
established in accordance with Section 402 of the Indenture.
Force Majeure - 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 a state of the United States of America 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 or storms; floods;
washouts; droughts; arrests; restraints of governments and people; civil
disturbances; explosions; breakage or accident to machinery, transmission pipes
or canals; partial or entire failure of utilities; or any cause or event not
reasonably within the control of the Company.
Government Obligations - (a) direct obligations of the United States of
America for the payment of which the full faith and credit of the United States
of America is pledged, or (b) obligations issued by a person controlled or
supervised by and acting as an instrumentality of the United States of America,
the payment of the principal of, premium, if any, and the interest on which is
fully guaranteed as a full faith and credit obligation of the United States of
America (including any securities described in (a), or b) issued or held in
book-entry form on the books of the Department of the Treasury of the United
States of America), which obligations, in either case, are not subject to
redemption prior to maturity at less than par by anyone other than the holder.
Governmental Unit - The Trinity River Authority Of Texas.
Indenture - The Trust Indenture between the Issuer and the Trustee, of
even date herewith, as the same may be amended, modified or supplemented by any
amendments or modifications thereof and any supplements thereto entered into in
accordance with the provisions thereof.
9
14
Independent Counsel - An attorney or firm thereof duly 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 or the Company (but who or which may be regularly retained by
either).
Independent Engineer - 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).
Independent Tax Counsel - Independent Counsel selected by the Company and
satisfactory to the Trustee, experienced in matters relating to the exemption
from Federal income tax of interest on obligations issued by states or their
political subdivisions.
Interest Payment Date - With respect to the Bonds prior to and including
the Conversion Date the first Business Day of each calendar month commencing
January 2, 1986, and after the Conversion Date the first day of each November
and May.
Interest Rate for Advances - A rate per annum which is equal to the sum of
two percent (2%) and the Prime Rate.
Interest Reserve Requirement - $108,902.
Issuer - The Trinity River Industrial Development Authority, a public body
corporate and politic created and existing pursuant to the provisions of the
Act, and its successors and assigns.
Letter of Credit - The irrevocable letter of credit issued by the Bank
contemporaneously with the original issuance of the Bonds, except that upon the
issuance and delivery of an Alternate Letter of Credit, "Letter of Credit" shall
mean such Alternate Letter of Credit, and upon the delivery of an Alternate
Credit Facility, "Letter of Credit" shall, unless the context otherwise
requires, include reference to the Alternate Credit Facility.
Letter of Credit Agreement - The Series A Reimbursement Agreement, dated
as of November 1, 1985, between the Company and the Bank, pursuant to which the
Letter of Credit is issued by the Bank and delivered to the Trustee, and any and
all modifications, alterations, amendments and supplements thereto, and includes
any agreement between the Company and the Bank pursuant to which any Alternate
Letter of Credit is issued or any Alternate Credit Facility is made available.
10
15
Loan Term - The period commencing on the date of this Agreement and ending
on the date on which the Bonds have been fully paid (or provision for their
payment has been made) in accordance with the provisions of the Indenture.
Local Facilities - "facilities" (as the term "facilities" is used in
Section 103(b) (6) (E) of the Code) of which the Company or a Related Person
thereto is or will be the Principal User and which are located wholly within the
County. For purposes of this definition, a contiguous or integrated "facility"
located on both sides of the border between any two or more political
jurisdictions shall be considered as being located wholly within each such
political jurisdiction.
Net proceeds of the sale of the Bonds - 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, together with investment earnings on such
net proceeds Earned prior to the Completion Date.
Net Proceeds - When used with respect to any insurance proceeds or any
condemnation award, means the gross proceeds thereof less the payment of all
expenses (including attorneys fees and any extraordinary fees and expenses of
the Trustee) incurred in the collection of such gross proceeds.
Notice Address - Has the following meanings:
(a) As to the Company: Radiation Sterilizers, Incorporated
Attention : President
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(b) As to the Issuer: Trinity River Industrial
Development Authority
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
Attention: Secretary/Treasurer
(c) As to the Bank: ▇▇▇▇▇ Fargo Bank, N.A.
Real Estate Industries Group
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
Vice President
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
11
16
(d) As to the Trustee: Bank One Trust Company, N.A.
Attention: Corporate Trust
Administration
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
or such address as may hereafter be provided pursuant to Section 7.5.
Person - Any natural person, corporation, cooperative, partnership, trust
or unincorporated organization, government or governmental body or agency,
political subdivision or other legal entity as in the context may be
appropriate.
President - The President of the Issuer.
Prime Rate - The rate of interest as announced from time to time by ▇▇▇▇▇
Fargo Bank, N.A. , San Francisco, California, as its prime rate of interest,
such rate changing automatically and immediately from time to time effective as
of the effective date of each such announced change.
Principal User - With respect to any "facilities" (as the term
"facilities" is used in Section 103(b) (6) (E) of the Code), a "principal user"
of such "facilities" within the meaning of Section 103 (b) (6) of the Code.
Related Person - When used with reference to any Principal User or any
Substantial User, means a "related person" within the meaning of Section 103 (b)
(6) of the Code.
Secretary - The Secretary of the Issuer.
Section 103(b)(6)(D) Capital Expenditures - Capital expenditures described
in Section 1.103-10(b) (2) (ii) of the income Tax Regulations, but shall not
include capital expenditures described as "excluded expenditures" in Section
1.103-10(b) (2) (iv) of the Income Tax Regulations.
Security interest or security interests - Refer to the security interests
created in the Indenture and shall have the meaning set forth in the U.C.C.
State - The State of Texas.
Substantial User - With respect to any "facilities" (as the term
"facilities" is used in Section 103(b) (6)(E) of the Code), a "substantial user"
of such "facilities" within the meaning of Section 103 (b) (13) of the Code.
12
17
Supplemental Statement - Any statement, supplemental statement or other
tax schedule, return or document filed with the Internal Revenue Service
(whether pursuant to Income Tax Regulations Section 1.103-10(b) (2) (vi), as the
same may be amended or supplemented, or otherwise).
Taxability Change - Any change in the Constitution or laws of the United
States of America or the applicable Income Tax Regulations thereunder occurring
after the date of issuance of the Bonds which results in the interest on any of
the Bonds being included in the gross income of any holder (other than a holder
who is a Substantial User or a Related Person).
Taxable Period - With respect to a Bond, the period which elapses from the
Event of Taxability until payment in full of such Bond.
Trustee - The Trustee at the time serving as such under the Indenture.
"Principal Office" of the Trustee means the principal corporate trust office of
the Trustee, which office at the date of this Agreement is located at the
address hereinbefore specified under the definition, "Notice Address".
U.C.C. - 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 1.1 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 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 number hereof unless the context or use clearly
indicates another or different meaning or intent.
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:
13
18
(a) Organization and Authority. The Issuer is a non-profit industrial
development corporation, created and validly existing pursuant to the
Constitution and laws of the State, including particularly 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 enable the Company
to acquire, construct and install the Facilities, and (iii) enter into, and
perform its obligations under, this Agreement and the Indenture.
(b) Pending Litigation. There are no actions, suits, proceedings,
inquiries or investigations pending, or to the knowledge of the Issuer
threatened, against or affecting the Issuer in any court or before any
governmental authority or arbitration board or tribunal, which involve the
possibility of materially and adversely affecting the transactions contemplated
by this Agreement or the Indenture or which, in any way, would adversely affect
the validity or enforceability of the Bonds, the Indenture, this 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 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 on
the part of the Issuer a violation of or a breach of or default under, or result
in the creation of any lien, charge or encumbrance upon any property of the
Issuer (other than as contemplated by this Agreement and the Indenture) under
the provisions of, any charter instrument, 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 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. Neither the nature of the Issuer nor any of its
activities or properties, nor any relationship between the Issuer and any other
person, nor any circumstance in connection with the offer, issue, sale or
delivery of any of the Bonds is such as to require the consent, approval or
authorization of, or the filing,
14
19
registration or qualification with, any governmental authority on the part of
the Issuer in connection with the execution, delivery and performance of this
Agreement and the Indenture or the offer, issue, sale or delivery of the Bonds,
other than those already obtained.
(e) No Defaults. No event has occurred and no condition exists with
respect to the Issuer which would constitute an "Event of Default" as defined in
this Agreement or the Indenture or which, with the lapse of time or with the
giving of notice or both, would become an "Event of Default" under this
Agreement or the Indenture. The Issuer is not in default under the Act or under
any charter instrument, by-law or other agreement or instrument to which it is a
party or by which it is bound.
(f) No Prior Pledge. Neither this Agreement nor the Trust Estate has 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) Disclosure. Neither the representations of the Issuer contained in
this Agreement and the Indenture nor any written statement relating to the
Issuer furnished to the Original Purchasers of the Bonds by or on behalf of the
Issuer in connection with the transactions contemplated hereby, contains any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements contained herein and therein not misleading.
(h) Nature and Location of Facilities. The financing of the Facilities is
in furtherance of the public purpose intended to be served by the Act. The
Facilities will be located within the County.
(i) No Other Outstanding Industrial Development Bonds. The issuer has no
outstanding issues of "industrial development bonds" (as defined in Section
103(b) (2) of the Code), the proceeds of which have been or will be used with
respect to the Local Facilities.
(j) Official Action. By resolution duly adopted on November 28, 1983, the
Issuer took "official action" (within the meaning of Section 1.103-8(a) (5) of
the Income Tax Regulations under the Code) providing for the acquisition,
construction and installation of the Facilities and the financing of the cost of
the Facilities, in whole or in part, through the issuance of the Bonds.
(k) Limited Obligations. Notwithstanding anything herein contained to the
contrary, any obligation the Issuer
15
20
may hereby incur for the payment of money shall not constitute an indebtedness
of the State or of any Political subdivision thereof within the meaning of any
state constitutional provision or statutory limitation and shall not give rise
to a pecuniary liability of the State or a political subdivision thereof, or
constitute a charge against the general credit or taxing power of said State or
a political subdivision thereof, but shall be limited obligations of the Issuer
Payable solely from the Trust Estate.
Section 2.2. No Warranty by Issuer of Condition or Suitability of the
Facilities. The Issuer makes no warranty, either express or implied, as to the
condition the Facilities or as to the suitability of the Facilities for the
Company's purposes.
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) Corporate Organization and Power. The Company (i) is a corporation
duly organized, validly existing and in good standing under the laws of the
State of California and is qualified to do business and is in good standing
under the laws of the State, and (ii) has all requisite power and authority and
all necessary licenses and permits to own and operate its properties and to
carry on its business as now being conducted and as presently proposed to be
conducted.
(b) Pending Litigation. There are no proceedings pending, or to the
knowledge of the Company threatened, against or affecting the Company in any
court or before any governmental authority or arbitration board or tribunal
which involve the possibility of materially and adversely affecting the
properties, business, prospects, profits or condition (financial or otherwise)
of the Company, or the ability of the Company to perform its obligations under
this Agreement or the Letter of Credit Agreement. The Company is not in default
with respect to an order of any court, governmental authority or arbitration
board or tribunal.
(c) Agreements Are Legal and Authorized. The execution and delivery by the
Company of this Agreement and the Letter of Credit Agreement and the compliance
by the Company with all of the provisions hereof and thereof (i) a re 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, charter document, by-law or other
instrument to which the Company is a party or by which it may be bound, or any
16
21
license, judgment, decree, law, statute, order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company or any of
its activities or properties, and (iii) have been duly authorized by all
necessary corporate action on the part of the Company.
(d) Governmental Consent. Neither the Company nor any of its business or
properties, nor any relationship between the Company and any other person, nor
any circumstances in connection with the execution, delivery and performance by
the Company of this Agreement and the Letter of Credit Agreement 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.
(e) No Defaults. No event has occurred and no condition exists with
respect to the Company that would constitute an "Event of Default" under this
Agreement, the indenture or the Letter of Credit Agreement or which, with the
lapse of time or with the giving of notice or both, would become an "Event of
Default" under this Agreement, the Indenture or the Letter of Credit Agreement.
The Company is not in violation in any material respect of any agreement,
charter document, by-law or other instrument to which it is a party or by which
it may be bound.
(f) Compliance with Law. The Company is not in violation 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, or subject to any charter or other corporate restriction,
that materially and adversely affects the business of the Company. The Company
is not a party to any contract or agreement that restricts the right or ability
of the Company to incur or guarantee indebtedness for borrowed money.
(h) Disclosure. Neither the representations of the Company contained in
this Agreement and the Letter of Credit Agreement, nor any written statement
relating to the Company furnished by or on behalf of the Company to the Issuer
or the Original Purchasers of the Bonds in connection with the transactions
contemplated hereby or thereby, contains any
17
22
untrue statement of a material fact or omits to state a material fact necessary
to make the statements contained herein or therein not misleading. There is no
fact that the Company has not disclosed to the Issuer and to the Original
Purchasers of the Bonds in writing that materially and adversely affects or in
the future may (so far as the Company can now reasonably foresee) materially and
adversely affect the acquisition, construction, installation, ownership or
operation of the Facilities, or the properties, business, prospects, profits or
condition (financial or otherwise) of the Company, or the ability of the Company
to perform its obligations under this Agreement, the Letter of Credit Agreement
or any documents or transactions contemplated hereby.
(i) Inducement. The issuance of the Bonds by the Issuer and the lending of
the proceeds thereof to the Company to enable the Company to acquire, construct
and install the Facilities have induced the Company to locate the Facilities in
the County which will directly result in a retention of employment opportunities
in the County for approximately 40 persons.
(j) Operation of Facilities. The Company intends to operate the Facilities
from the Completion Date to the expiration or sooner termination of this
Agreement as provided herein as a "project" within the meaning of the Act and so
long as the Bonds remain outstanding the Company agrees that it shall not
operate the Facilities as a facility the primary purpose of which causes the
Facilities to constitute a prohibited facility within the meaning of Section 103
(b) of the Code.
(k) Nature of Facilities. Substantially all of the net proceeds of the
sale of the Bonds will be used to acquire land or property of a character
subject to the allowance for depreciation under Section 167 of the Code and such
costs representing proceeds so used are properly chargeable to a capital account
of the Company for Federal income tax purposes or would be so chargeable either
with a proper election by the Company or but for a proper election by the
Company to deduct the costs.
(1) Commencement of Construction. The acquisition, construction and
installation of the Facilities commenced after November 28, 1983, and no
obligation relating to the acquisition, construction or installation of the
Facilities was paid or incurred prior to such date.
(m) Prior Issues. Except for the Bonds, no bonds, notes or other
obligations of any state, territorial possession or any political subdivision of
the United States of
18
23
America or any political subdivision of any of the foregoing or of the District
of Columbia have been issued since April 30, 1968, and are now outstanding, the
proceeds of which have been or are to be used primarily with respect to the
Local Facilities.
(n) Composite Issues. There are no other obligations heretofore issued or
to be issued by or on behalf of any state, territory or possession of the United
States, or political subdivision of any of the foregoing, or of the District of
Columbia, for the benefit of the Company or any Related Person, which constitute
"industrial development bonds" within the meaning of Section 103(b) of the Code
and which (i) were or are to be sold at substantially the same time as the
Bonds, (ii) were or are to be sold at substantially the same interest rate as
the interest rate of the Bonds, (iii) were or are to be sold pursuant to a
common plan of marketing as the marketing plan for the Bonds, and (iv) a re
payable directly or indirectly by the Company or from the source from which the
Bonds are payable.
(o) Capital Expenditures. The principal amount of the Bonds and the amount
of all Section 103(b) (6)(D) Capital Expenditures that have been paid or
incurred with respect to the Local Facilities during the three years next
preceding the date of issue of the Bonds other than out of the proceeds of the
sale of the Bonds do not in the aggregate exceed the sum of $10,000,000.
(p) Election Information. The information furnished by the Company and
used by the Issuer in preparing the election which has been filed by or on
behalf of the Issuer with the Internal Revenue Service pursuant to Section 103
(b) (6) (D) of the Code was true and complete as of the date of filing of said
election.
(q) I.R.S. Form 8038 Information. The information furnished by the Company
and used by the issuer in preparing I.R.S. Form 8038, "Information Return for
Private Activity Bond Issues", which has been filed by or on behalf of the
Issuer with the Internal Revenue Service Center in Philadelphia, Pennsylvania,
pursuant to Section 103(l) of the Code, was true and complete as of the date of
filing thereof.
(r) Limitation on Maturity. The weighted average maturity of the Bonds
does not exceed the weighted average estimated economic life of the components
comprising the Facilities by more than 20%, determined pursuant to Section
103(b) (14) of the Code.
19
24
(s) Restrictions on Financing and Operation of Certain Facilities. At no
time will:
(i) more than 25% of the net proceeds of the sale of the Bonds be
used to provide a facility the primary purpose of which is one of the
following: retail food and beverage services (including eating and
drinking places, but excluding grocery stores), automobile sales or
service, or the provision of recreation or entertainment; or
(ii) any portion of the net proceeds of the sale of the Bonds be
used to provide the following: any private or commercial golf course,
country club, massage parlor, tennis club, skating facility (including
roller skating, skateboard and ice skating), racquet sports facility
(including any handball or racquetball court), hot tub facility, suntan
facility or racetrack; or
(iii) any portion of the net proceeds of the sale of the Bonds be
used to provide any airplane, skybox, or other private luxury box, any
health club facility, any facility primarily used for gambling, or any
store the principal business of which is the sale of alcoholic beverages
for consumption off premises; or
(iv) any portion of the net proceeds of the sale of the Bonds be
used (directly or indirectly) for the acquisition of land (or an interest
therein) to be used for farming purposes, or 25% or more of the net
proceeds of the sale of the Bonds be used (directly or indirectly) for the
acquisition of land other than land to be used for farming purposes; or
(v) any portion of the net proceeds of the sale of the Bonds be used
for the acquisition of any property the first use of which property is not
pursuant to such acquisition, except with respect to any building (and the
equipment therefor) if the rehabilitation expenditures with respect to
such building equal or exceed 15% of the portion of the cost of acquiring
such building (and equipment) financed with the proceeds of the Bonds; or
(vi) the Facilities be operated as a facility the primary purpose of
which causes the Facilities to constitute a prohibited facility within the
meaning of Section 103(b) of the Code,
(t) Aggregation of Issues for Single Project. The Facilities are not a
part of a single building, an enclosed
20
25
shopping mall, or a strip of offices, stores or warehouses using substantial
common facilities, and with respect to which any other bonds, notes, or other
obligations have been or will be issued under Section 103(b) of the Code.
(u) Aggregate Limit Per Taxpayer for Small Issue Exemption. The sum of the
authorized face amount of the Bonds allocable to each "test-period beneficiary"
(as defined in Section 103(b) (15) (D) of the Code) plus the respective
aggregate face amount of all tax-exempt industrial development revenue bonds
presently outstanding (not including any obligations which are to be redeemed
from the proceeds of the Bonds) which are allocable to each such test-period
beneficiary, does not exceed $40,000,000.
(v) Reasonable Expectations. Based on current facts, estimates and
circumstances, it is expected that:
(i) the acquisition, construction and installation of the Facilities
and the expenditure of all Bond proceeds will be completed by that date
which is not more than six months from the Original Issuance Date of the
Bonds,
(ii) work on the Facilities (which has commenced) will proceed with
due diligence to completion,
(iii) the net proceeds of the sale of the Bonds are needed for the
purpose of paying all or a part of the cost of the acquisition,
construction and installation of the Facilities, and
(iv) the Facilities will not be sold or disposed of, in whole or in
part, prior to payment in full of the Bonds.
(w) Substantial Binding Obligation. Various contracts providing for the
acquisition, construction and installation of the Facilities have been entered
into and the amounts required to be paid under said contracts exceed $100,000 or
2 1/2%, whichever is less, of the estimated total cost of the Facilities.
(x) The Company represents to the Issuer and the Commission that (i) the
Project will contribute to the economic growth or stability of the Governmental
Unit by (aa) increasing or stabilizing employment opportunities in the
Governmental Unit, (bb) significantly increasing or stabilizing the property tax
base of the Governmental Unit and (cc) promoting commerce within the
Governmental Unit and the State of Texas; (ii) it has no present intention of
moving or disposing of any part of the Project; and (iii) it
21
26
has no present intention of directing the Project to a use other than the
purposes represented to the Governmental Unit and the Commission.
ARTICLE III.
ACQUISITION, CONSTRUCTION AND
INSTALLATION OF THE FACILITIES;
ISSUANCE OF THE BONDS
Section 3.1. Acquisition, Construction and Installation of the Facilities.
The Company agrees that the acquisition, construction and installation of the
Facilities will be completed as promptly as practicable after receipt of the
proceeds from the sale of the Bonds, delays incident to strikes, riots, acts of
God or the public enemy or other causes beyond the reasonable control of the
Company only excepted, but if such acquisition, construction and installation is
not completed, there shall be no resulting liability on the part of the Issuer
and no diminution in or postponement of the payments required to be paid by the
Company hereunder.
Section 3.2. Agreement to Issue Bonds; Application of Proceeds. In order
to provide funds for the payment of the cost of the acquisition, construction
and installation of the Facilities (including capitalized interest), the Issuer
agrees that as soon as possible it will authorize, validate, sell and cause to
be delivered to the Original 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 it will thereupon deposit an amount equal to the interest
Reserve Requirement into the Bond Fund and will deposit the balance of the
proceeds received from said sale in the Construction Fund.
The Company may cause such changes to be made to the "Description of
Facilities" attached hereto as Exhibit A as it may desire provided that such
changes shall not result in (i) the Facilities not being a "project" within the
meaning of the Act, (ii) the Facilities constituting a prohibited facility
within the meaning of Section 103(b) of the Code, (iii) less than substantially
all of the net proceeds of the sale of the Bonds being used to pay the costs of
land or property of a character subject to the allowance for depreciation under
Section 167 of the Code, and (iv) a violation of the limitation on maturity of
the Bonds under Section 103(b) (14) of the Code.
Section 3.3. Disbursements from the Construction Fund. The Issuer will in
the Indenture authorize and direct the
22
27
Depository to use the moneys in the Construction Fund for the following purposes
but subject to the provisions of Section 3.8, for no other purposes:
(a) payment of the initial or acceptance fee of the Trustee and the
Depository and fees and expenses of their respective counsel, the fees for
recording the deeds whereby the appropriate title in and to the Facilities has
been acquired by the Company, payments for title examination and insurance, and
any title curative documents that the Company may deem desirable to file for
record in order to perfect or protect its title in and to the Facilities and the
fees and expenses in connection with any actions or proceedings that the Company
may deem desirable to bring in order to perfect its title in and to the
Facilities;
(b) payment to the Company of such amounts, if any, as shall be necessary
to reimburse the Company in full for all advances and payments made by it prior
to or after the delivery of the Bonds for expenditures in connection with the
acquisition by the Company of appropriate title in and to the Facilities
(including the cost of such acquisition and of any rights-of-way for the purpose
of providing access to and from the Facilities), clearing the site, site
improvement, the preparation of plans and specifications for the Facilities
(including any preliminary study or planning of the Facilities or any aspect
thereof), the acquisition, construction and installation of the Facilities and
the acquisition, construction and installation necessary to provide utility
services or other facilities including trackage to connect the Facilities with
public transportation facilities, and all real or personal properties deemed
necessary in connection with the Facilities, or any one or more of said
expenditures (including architectural, engineering and supervisory services)
with respect to any of the foregoing;
(c) payment of, or reimbursement of the Company and the Issuer for, the
legal and accounting fees and expenses, financial consultants' fees, financing
charges (including underwriting or placement fees) and printing and engraving
costs incurred in connection with the authorization, sale and issuance of the
Bonds, the preparation of this Agreement, the Letter of Credit Agreement, the
Letter of Credit, the Indenture, the Bond Purchase Agreement, the Financing
Statements and all other documents in connection therewith and in connection
with the acquisition of appropriate title in and to the Facilities, including
fees for filing the Financing Statements;
(d) payment of, or reimbursement of the Company for, labor, services,
material, supplies and/or equipment used or
23
28
furnished in site improvement and in the construction of the Facilities, all as
provided in the plans and specifications therefor, payment for the cost of the
acquisition and installation of the Facilities, payment for the cost of
acquisition, construction and installation of utility services or other
facilities including trackage to connect the Facilities with public
transportation facilities, and all real and personal properties deemed necessary
in connection with the Facilities and payment for the miscellaneous expenses
incidental to any of the foregoing;
(e) payment of, or reimbursement of the Company for, the fees, if any, for
architectural, engineering and supervisory services with respect to the
Facilities;
(f) payment of, or reimbursement of the Company and the Issuer for, as
such payments become due, the fees and expenses of the Trustee, the Registrar,
the Bond Registrar, the paying agent(s) and the fees and expenses of their
counsel properly incurred under the Indenture that may become due during the
Construction Period; and payment into the Bond Fund of sufficient moneys to pay
interest on the Bonds accruing during the Construction Period or to reimburse
the Bank for drawings under the Letter of Credit to pay interest on the Bonds
accruing during the Construction Period, as the case may be;
(g) payment of, or reimbursement of the Company and the issuer for, any
other legal and valid costs and expenses relating to the Facilities;
(h) all moneys remaining in the Construction Fund (including moneys earned
on investments made pursuant to the provisions of Section 3.8) after the
Completion Date and payment in full of the cost of the acquisition, construction
and installation of the Facilities, and after payment of all other items
provided for in the preceding subsections of this Section then due and payable,
shall at the direction of the company be (i) subject to Section 5.6(f), and
subject to the prior written approval of the Bank, which may be withheld in its
sole and absolute discretion used to acquire, construct and install additions,
extensions and improvements to the Facilities in accordance with amended plans
and specifications therefor duly filed with the Issuer, (ii) transferred to the
Trustee which shall redeem Bonds, to the maximum extent practicable consistent
with making partial redemptions in amounts of not less than $50,000 or integral
multiples thereof, or, on or after the Conversion Date, $5,000 or integral
multiples thereof, at the earliest date permitted by the Indenture or to
purchase Bonds for the purpose of cancellation at any time prior to the earliest
date permitted by the Indenture for the redemption of Bonds, (iii) paid into the
Bond Fund to pay interest on the Bonds, or (iv) a combination of (I), (ii)
24
29
and/or (iii) as is provided in such direction, provided that amounts approved by
the Authorized Company Representative and the Authorized Issuer Representative
shall be retained by the Depository in the Construction Fund for payment of
costs not then due and payable. Any balance remaining of such retained moneys
after full payment of all such costs shall be used by the Trustee as directed by
the Company in the manner specified in clauses (i), (ii), (iii) or (iv) of this
subsection. Amounts directed by the Company to be used by the Trustee in the
manner specified in clause (ii) shall not, pending such use, be invested at a
yield which exceeds the yield on the Bonds. Amounts in excess in the aggregate
of 5% of the net proceeds of the sale of the Bonds shall not be directed by the
Company to be used for the purposes described in clauses (i), (ii), (iii) or
(iv) without providing the Trustee with an opinion of Independent Tax Counsel
stating that such use will not impair the exemption of the interest on the Bonds
from Federal income taxation pursuant to Section 103(b) of the Code.
The payments specified in subsections (a) through (g) of this Section
shall be made by the Depository only upon receipt of the following:
(1) a written requisition for such payment signed by the Authorized
Company Representative and the Authorized issuer Representative;
(2) a certificate by the persons signing such requisition
certifying:
(i) that an obligation in the stated amount has been incurred
(A) in connection with the issuance of the Bonds, or (B) and is
required to reimburse the Bank for a drawing under the Letter of
Credit, or (C) in connection with the acquisition, construction and
installation of the Facilities;
(ii) that such obligation is a proper charge against the
Construction Fund and has not been the basis of any previous
withdrawal from the Construction Fund, and specifying the purpose
and circumstances of such obligation in reasonable detail and the
name and address of the person to whom such obligation is owed,
accompanied by a ▇▇▇▇ or statement of account for such obligation;
(iii) that (A) they have no notice of any vendors',
materialmen's, mechanics', suppliers' or other similar liens or
right to liens, chattel mortgages or conditional sales contracts, or
other
25
30
contracts or obligations which should be satisfied or discharged
before payment of such obligation is made, or (B) such requisition
is for the purpose of obtaining funds to be used to satisfy or
discharge a lien or contract of the type described in (A) above;
(iv) that such requisition contains no request for payment on
account of any portion of such obligation which the Company is, as
of the date of such requisition, entitled to retain under any
retained percentage agreements;
(v) that payment of such obligation when added to all other
payments previously made from the Construction Fund will not result
in less than substantially all of the net proceeds of the sale of
the Bonds expended at such time being used to provide land or
property of a character subject to the allowance for depreciation
under Section 167 of the Code; and
(vi) that such requisition contains no request for payment on
account of any obligation paid or incurred prior to November 28,
1983; and
(3) with respect to any such requisition for payment for labor,
services, material, supplies and/or equipment, an additional certificate,
signed by the Authorized Company Representative, certifying that insofar
as such obligation was incurred for labor, services, material, supplies
and/or equipment in connection with the acquisition, construction and
installation of the Facilities, such labor and/or services were actually
performed in a satisfactory manner and such material, supplies and/or
equipment were actually used in or about the construction or delivered at
the site of the Facilities for that purpose and that the item of equipment
with respect to which any payment is requested constitutes a portion of
the Facilities. Such requisition and certification shall be in
substantially the form attached hereto as Exhibit B and by this reference
thereto made a part hereof.
In approving or certifying any requisition under this Section, the Issuer
may rely as to the completeness and accuracy of all statements in such
requisition upon the approval of or certification to such requisition by the
Authorized Company Representative, and the Company hereby agrees to indemnify
and save harmless the Issuer, its directors, officers, agents and employees from
any liability
26
31
incurred in connection with any requisition so approved or certified.
In making any such payment from the Construction Fund the Depository may
rely on any such requisitions and any such certificates delivered to it pursuant
to this Section and the Depository shall be relieved of all liability with
respect to making such payments in accordance with any such requisitions and
such supporting certificate or certificates without inspection of the Facilities
or any other investigation.
Anything herein to the contrary notwithstanding, the Depository hereby
agrees that it will not make any disbursement from the Construction Fund without
the prior written approval of the Bank (subject to certain pre-approvals of
disbursements by the Bank) .
The issuer and the Company agree for the benefit of each other and for the
benefit of the Depository, the Trustee and the holders of the Bonds that the
proceeds of the Bonds will not be used in any manner which would result in the
loss of the exemption from Federal income taxation of the interest on the Bonds.
Section 3.4. Obligation to Furnish Documents to Depository. The Issuer and
the Company agree to cooperate with each other in furnishing to the Depository
the documents referred to in Section 3.3 that are required to effect payments
out of the Construction Fund, and to cause such requisitions and certificates to
be directed by the Authorized Company Representative and the Authorized Issuer
Representative to the Depository as may be necessary to effect such payments.
Such obligation of the Issuer and the company is subject to any provisions
hereof or of the Indenture requiring additional documentation with respect to
payments and shall not extend beyond the moneys in the Construction Fund
available for payment under the terms of the Indenture.
Section 3. 5. Establishment of Completion Date. The Completion Date shall
be evidenced to the Depository by a certificate signed by the Authorized Company
Representative stating that, except for amounts retained by the Trustee for
costs of the Facilities not then due and payable as provided in Section 3.3(h).
(a) the acquisition, construction and installation of the Facilities have
been completed substantially in accordance with the plans and specifications
therefor and all labor, services, materials, supplies and/or equipment used
27
32
in such acquisition, construction and installation have been paid for,
(b) all other facilities necessary in connection with the Facilities have
been acquired, constructed and installed substantially in accordance with
the plans and specifications therefor and all costs and expenses incurred
in connection therewith have been paid,
(c) the Facilities and all other facilities in connection therewith have
been acquired, constructed and installed to his satisfaction and are
suitable and sufficient for the efficient operation of the Facilities for
its intended purposes,
(d) substantially all of the net proceeds of the sale of the Bonds have
been used to acquire land or property of a character subject to the
allowance for depreciation under Section 167 of the Code and such costs
representing proceeds so used are properly chargeable to the capital
account of the Company for Federal income tax purposes or would be so
chargeable either with a proper election by the Company or but for a
proper election by the Company to deduct the costs, and
(e) a certificate of occupancy, if required, and any other permissions
required of governmental authorities for the occupancy of the Facilities
have been obtained.
Notwithstanding the foregoing, such certificate by the Authorized Company
Representative shall state that it is given without prejudice to any rights
against third parties which exist on the date of such certificate or which may
subsequently come into being and shall be in substantially the form attached
hereto as Exhibit C and by this reference thereto made a part hereof. The
Company agrees to furnish a copy of such certificate to the Issuer at the same
time such document is furnished to the Trustee.
Section 3.6. Company Required to Pay Costs of Facilities If Construction
Fund Insufficient. If the moneys in the Construction Fund available for payment
of the cost of the Facilities should not be sufficient to pay the cost thereof
in full, the Company agrees to complete the Facilities and to pay all that
portion of the cost of the Facilities as may be in excess of the moneys
available therefor in the Construction Fund. The Issuer does not make any
warranty, either express or implied, that the moneys which will be paid into the
Construction Fund and which, under the provisions of this Agreement, will be
available for payment of the cost of the Facilities will be sufficient to pay
all costs which will be incurred in that connection. The Company
28
33
agrees that if after exhaustion of the moneys in the Construction Fund the
Company should pay any portion of the cost of the Facilities pursuant to the
provisions of this Section, it shall not be entitled to any reimbursement
therefor from the Issuer or from the Trustee or from the holders or owners of
any of the Bonds, nor shall it be entitled to any diminution in or postponement
of the payments required to be made hereunder.
Section 3.7. Remedies Against Suppliers, Contractors and Subcontractors
and Their Sureties. The Company may prosecute or defend any action or proceeding
or take any other action involving any defaulting supplier, contractor,
subcontractor or surety therefor which the Company deems reasonably necessary,
and in such event the Issuer agrees to cooperate fully with the Company, to the
extent it might lawfully do so, in any such action or proceeding. Any moneys
recovered by way of damages, refunds, adjustments or otherwise in connection
with the foregoing shall belong to the Company.
Section 3.8. Investment of Bond Fund and Construction Fund Moneys
Permitted. Any moneys held in the Bond Fund of the Construction Fund shall be
invested or reinvested by the Trustee upon the oral or written request and
direction of the Company, and, if oral, promptly confirmed in writing, in
Eligible Investments, to the extent permitted by the laws of the State. Such
investments shall be made upon direction of the Authorized Company
Representative and shall mature in such amounts and at such times as may be
necessary to provide funds when needed to make payments from the Bond Fund or
the Construction Fund. The Trustee may make any and all such investments through
its own investment department. Any interest or gain received from such
investments shall be credited to and held in the Bond Fund or the Construction
Fund and any loss from such investments shall be charged against the Bond Fund
or the Construction Fund and paid by the Company at such time as there are
insufficient moneys in any such Fund to make a required payment. The Trustee
shall not be responsible or liable for any loss suffered in connection with any
investment of funds made by it in accordance with the provisions of Article VI I
I of the Indenture. The provisions of this Section 3.8 shall be subject to the
provisions of Section 5. 12(b) of this Agreement and Section 804 of the
Indenture.
Section 3.9. Title to the Facilities. The Issuer acknowledges and agrees
that it will not be vested with any interest in the Facilities by virtue of
executing, delivering and performing this Agreement or issuing the Bonds to
finance the cost of the acquisition, construction and
29
34
installation thereof and that the Facilities will not constitute any part of the
security for the Bonds.
ARTICLE IV.
LOAN BY THE ISSUER TO THE COMPANY;
REPAYMENT OF LOAN
Section 4.1. Loan By the Issuer to the Company; Repayment of Loan;
Obligations Unconditional. The Issuer shall lend from time to time, pursuant to
Section 3.3, to the Company the proceeds of the sale of the Bonds for the
purposes provided in this Agreement. The Company will repay said loan, as
follows: On each Bond Payment Date until the principal of, and the redemption
premium (if any) and the interest on, all Bonds shall have been fully paid (or
provision for the payment thereof shall have been made in accordance with the
provisions of the Indenture) a sum in immediately available funds which, when
added to the balance which is then in the Bond Fund and available for such
purpose, shall be equal to the amount payable as principal of, and redemption
premium (if any) and interest on, Bonds then outstanding under the Indenture on
such Bond Payment Date.
Not later than the fifth (5th) Business Day next succeeding each interest
Payment Date prior to the Interest Payment Date next preceding the Expiration
Date of the Letter of Credit, the Company shall pay an amount equal to the
difference between the Interest Reserve Requirement and the aggregate amount of
Available Moneys on deposit in or credited to the Bond Fund on the Business Day
next succeeding such interest Payment Date.
In any event, the amount payable under this Section 4.1 on any Bond
Payment Date shall be sufficient to pay the total amount due with respect to the
principal of, and redemption premium (if any) and interest on, the Bonds on such
Bond Payment Date. If, after making any transfer from the Construction Fund to
the Bond Fund required by the Indenture, on any Bond Payment Date the balance in
the Bond Fund is insufficient to make required payments of principal of, and
redemption premium (if any) and interest on, the Bonds on such date, the Company
shall forthwith pay to the Trustee, on behalf of the Issuer for deposit into the
Bond Fund, any such deficiency; provided, however, that if at any time all the
outstanding Bonds are paid and discharged as provided in Article X of the
Indenture no further such payments shall be required. In the Indenture, the
Issuer has directed the Trustee to apply such payments in accordance with the
provisions of the Indenture and this Agreement.
30
35
The obligations of the Company to make the payments required in this
Section 4.1 and in Section 4.3 in the amounts and at the times specified and to
perform and observe the other agreements on its part contained herein shall be
absolute and unconditional and shall not be affected by any circumstance,
including, without limitation, any set-off, counterclaim, recoupment, defense
(other than payment itself) or other right which the Company may have against
the Issuer, the Trustee, or anyone else for any reason whatsoever. The Company
hereby waives, to the extent permitted by applicable law, any and all rights
which it may now have or which at any time hereafter may be conferred upon it,
by statute or otherwise, to terminate or cancel this Agreement except in
accordance with the express terms hereof. Nothing contained in this Section 4.1
shall be construed to release the Issuer from the performance of any of the
agreements on its part herein contained; and in the event the Issuer should fail
to perform any such agreement on its part, the Company may institute such action
against the Issuer as the Company may deem necessary to compel performance or
recover its damages for nonperformance so long as such action will not be
inconsistent with the agreements on the part of the Company contained in the
first sentence of this paragraph.
In the event the Company should fail to make any of the payments required
in this Section 4.1, the item or installment so in default shall continue as an
obligation of the Company until the amount in default shall have been paid in
full. The Company agrees to pay interest on all overdue amounts which represent
repayments of principal of, or redemption premium on, the Bonds at the rate
borne by such Bonds.
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 payment by the holder of any
Bond would be contrary to the provisions of law applicable to such holder which
limit the maximum rate of interest which may be charged or collected by such
holder.
Section 4.2. Company Consent to Assignment of Agreement and Execution of
Indenture; Company's Performance Under Indenture. The Company understands that
the Issuer, as security for the payment of the principal of, and the redemption
premium (if any) and the interest on, the Bonds, will assign and pledge to, and
create a security interest in favor of, the Trustee pursuant to the Indenture
certain of its rights, title and interest in and to this Agreement
31
36
including all Revenues, reserving, however, its rights (a) pursuant to this
Agreement providing that notices, approvals, consents, requests and other
communications be given to the Issuer, (b) to reimbursement and payment of costs
and expenses under Sections 5.3, 5.10 and 6.4, and (c) to indemnification and to
exemption from liability, both individual and corporate, under Section 5.3, 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.
The Company agrees, for the benefit of the bondholders, to do and perform
all acts and things contemplated in the Indenture to be done or performed by it.
Section 4.3. Prepayment of Loan.
(a) Mandatory Prepayment of the Loan. The Company shall be obligated to
prepay unpaid amounts of the loan made by the Issuer to the Company pursuant to
Section 4.1 prior to the stated maturity of the Bonds in the event that the
Bonds are required to be redeemed pursuant to Section 301 of the Indenture.
(b) Optional Prepayments Pursuant to the Indenture. The Company shall have
the right, at its option, to direct the Issuer to effect the redemption of the
Bonds pursuant to Section 301 (a) or (c) of the Indenture.
(c) Optional Prepayments upon Condemnation of Facilities. After the
Conversion Date, in the event that title to or the temporary use of the
Facilities, or any part thereof, shall be taken under the exercise of the power
of eminent domain by any governmental body or by any person, firm or corporation
acting under governmental authority, any Net Proceeds received from any award
made in any such eminent domain proceedings may, at the option of the Company
(which option must be exercised within ninety (90) days of the date of entry of
a final order in any eminent domain proceedings granting condemnation), be paid
to the Trustee in prepayment of unpaid amounts of the loan made by the Issuer
pursuant to Section 4. 1 and shall be applied by the Trustee as shall be
directed in writing by the Authorized Company Representative (i) to the
redemption of all of the Bonds or purchase of Bonds in the open market for the
purpose of cancellation pursuant to the Indenture upon exercise of the
prepayment option set forth in Section 4.3(d) below,, or (ii) to the redemption
of less than all of the Bonds pursuant to the Indenture or payment into the Bond
Fund; provided that, in the case of (ii), the Company shall furnish the Issuer
and the Trustee (x) a certificate of an Independent Engineer
32
37
selected by the Company stating (A) that the property forming a part of the
Facilities that was taken by such condemnation was not essential to the
character of the Facilities as industrial facilities, or (B) that the Facilities
have been restored to a condition substantially equivalent to their condition as
industrial facilities prior to the taking by such condemnation proceedings, with
such changes, alterations and modifications (including the substitution and
addition of other property) as may be desired by the Company and as will not
materially impair the character of the Facilities as industrial facilities, or
(C) that improvements have been acquired which are suitable for the operation of
the Facilities as industrial facilities, and (y) an opinion of Independent Tax
Counsel or a ruling of the Internal Revenue Service to the effect that such
application of the Net Proceeds will not jeopardize the exemption of interest on
the Bonds from Federal income taxation.
(d) Optional Prepayments in Certain Events. After the Conversion Date, the
Company shall have the right, at its option, within ninety (90) days following
the event under clause (i) or (ii) below authorizing the exercise of such
option, of at any time during the continuation of an event under clause (iii) or
(iv) below authorizing the exercise of such option, to give written notice to
the Issuer and the Trustee of its exercise of such option and to prepay, or
cause to be prepaid, all the amounts payable pursuant to Section 4.1 and such
other amounts as specified in this Section 4.3(d) within ninety (90) days
following the giving of notice of such exercise, if any of the following shall
have occurred:
(i) all or a substantial part of the Facilities shall have been
damaged or destroyed (A) to such extent that the Company deems it not
practicable or desirable to restore such damaged or destroyed property
within a period of three (3) consecutive months to the condition thereof
immediately preceding such damage or destruction, or (B) to such extent
that the Company is thereby reasonably expected to be prevented from
carrying on its normal operations at the Facilities for a period of three
(3) consecutive months;
(ii) title to, or the temporary use of, all or a substantial part of
the Facilities shall have been taken, or condemned under the exercise of
the power of eminent domain, by any governmental authority, person, firm
or corporation acting under governmental authority (including such a
taking or takings as result in the Company's being reasonably expected to
be prevented from carrying on its normal operations at the Facilities for
a period of three (3) consecutive months);
33
38
(iii) changes in costs or economic availability of energy, labor,
raw materials, operating supplies, including fuel, power, or facilities
necessary for the operation of all or a substantial part of the Facilities
shall have occurred, or such technological or other changes shall have
occurred, which in the Company's reasonable judgment render continued
operation of all or a substantial part of the Facilities impracticable or
uneconomic for their purpose; or
(iv) any court or administrative body shall enter a judgment, order
or decree, or shall take administrative action, requiring the Company to
cease all or any substantial part of its operations at the Facilities to
such extent that the Company is or will be prevented from carrying on its
normal operations at the Facilities for a period of three (3) consecutive
months.
For purposes of this Section 4.3(d), the term "substantial part" when used with
reference to the Facilities shall mean any part of the Facilities as to which
the total acquisition, restoration and equipping cost amounted to (i) at least
twenty-five percentum (25%) of the aggregate principal amount of Bonds issued
pursuant to the Indenture, or (ii) an amount equal to the aggregate principal
amount of Bonds then outstanding, whichever is less.
The amount payable by the Company in the event it is required to prepay
the loan pursuant to subsection (a) of Section 4.3 or it exercises the option
granted to it in subsection (d) of this Section 4.3 shall be a sum which, when
added to the moneys and investments held for the credit of the Bond Fund and all
other funds and accounts then held by the Trustee in respect of the Bonds and
available for the purpose, will be sufficient pursuant to the provisions of
Article X of the Indenture to pay and discharge all the then outstanding Bonds
on the first possible date for redemption, plus an amount of money payable to
the Trustee equal to the Trustee's and Paying Agent's fees, charges and expenses
under the Indenture accrued and to accrue until such final payment and
redemption of the Bonds.
The amount payable by the Company in the event it exercises the option
granted to it pursuant to subsection (b) of this Section 4.3 shall be sufficient
pursuant to Section 301 (a) or Section 301 (c) of the Indenture to pay the
applicable redemption price of the Bonds to be redeemed.
Section 4.4. Delivery of Letter of Credit to Trustee. The Company shall
cause the Letter of Credit to be issued and delivered to the Trustee on the
Original Issuance Date of the Bonds. The Company hereby authorizes and directs
the
34
39
Trustee to draw moneys under the Letter of Credit, in accordance with the
provisions of the Letter of Credit Agreement and the Indenture.
Section 4.5. Satisfaction of Company's Obligation. The obligation of the
Company to make any payments required under Sections 4.1 and 4.3 of this
Agreement shall be deemed to be satisfied and discharged to the extent of (a)
the corresponding payment made by the Bank to the Trustee under the Letter of
Credit, or (b) payments of principal of, or interest on, the Bonds from moneys
transferred from the Construction Fund pursuant to Section 3.3(h), or (c) Net
Proceeds of insurance or condemnation awards which are applied to the payment of
principal of, or interest on, the Bonds.
Section 4.6. Alternate Letter of Credit; Alternate Credit Facility. At any
time prior to the sixtieth (60th) day next preceding the Expiration Date of the
Letter of Credit, the Company may, at its option, provide for and deliver to the
Trustee an Alternate Letter of Credit. An Alternate Letter of Credit shall be an
irrevocable letter of credit, other than the Letter of Credit issued by the Bank
and delivered to the Trustee on the Original Issuance Date of the Bonds, issued
by a commercial bank, the terms of which shall in all material respects be the
same as the Letter of Credit. At least forty-six (46) Business Days but not more
than sixty (60) days prior to the date of delivery of an Alternate Letter of
Credit, the Company shall (i) deliver to the Trustee an opinion of Independent
Tax Counsel stating that the delivery of such Alternate Letter of Credit to the
Trustee is authorized under this Agreement and the Act, complies with the terms
of this Agreement and will not adversely affect the exemption from Federal
income taxation of interest on the Bonds, (ii) deliver to the Trustee written
evidence from ▇▇▇▇▇'▇, if the Bonds are rated by ▇▇▇▇▇'▇, and S&P, if the Bonds
are rated by S&P, in each case to the effect that such rating agency has
reviewed the proposed Alternate Letter of Credit and that the substitution of
the Alternate Letter of Credit for the Letter of Credit will not, by itself,
result in a reduction of its rating of the Bonds from that which then prevails,
and (iii) direct that the Trustee notify the Bank and the holders of outstanding
Bonds, in accordance with of Section 302 of the Indenture, that an Alternate
Letter of Credit will be delivered to the Trustee.
On or after the Conversion Date or the Interest Payment Date next
preceding the Expiration Date of the Letter of Credit, the Company may provide
for the delivery of an Alternate Credit Facility to provide security for payment
of the principal of, and the interest on, the Bonds; provided
35
40
that the Company shall (i) deliver to the Trustee an opinion of Independent Tax
Counsel stating that the delivery of such Alternate Credit Facility is
authorized under this Agreement and the Act, complies with the terms of this
Agreement and will not adversely affect the exemption from Federal income
taxation of interest on the Bonds, and (ii) direct the Trustee to notify the
Bank and the holders of outstanding Bonds, in accordance with Section 302 of the
Indenture, that an Alternate Credit Facility will be delivered to the Trustee.
In the event that such Alternate Credit Facility is to be delivered prior to the
Conversion Date, such Alternate Credit Facility may provide for payment of the
purchase price of Bonds delivered to the Trustee in accordance with Section 302
of the Indenture.
Any Alternate Letter of Credit or Alternate Credit Facility shall have an
initial term of not less than one (1) year.
Section 4.7. Extension of Letter of Credit. The Company may, at its
election and with the consent of the Bank, provide for one or more extensions of
the Letter of Credit for any period commencing after December 15, 1988.
Section 4.8. Notice of Prepayments; Issuer to Effect Redemption. If the
Company shall be required or determines to make any payments, or cause any
payments to be made, pursuant to subsections (a), (b), (c) or (d) of Section
4.3, it shall give notice in writing of such intention to the Issuer and the
Trustee, which notice shall state the provisions of the Indenture under which
the Issuer is to apply such payment. In such event or in the event that moneys
in the Bond Fund are sufficient to redeem all the Bonds then outstanding under
the Indenture and to pay interest to accrue thereon to the redemption date, the
Issuer (or the Company upon the request and on behalf of the Issuer) will, but
only upon the direction of the Company, forthwith take all steps that may be
necessary to effect the redemption of all or part of the then outstanding Bonds
as specified by the Company, on the earliest redemption date on which such
redemption may be made under the applicable provisions of the Indenture. Except
as otherwise provided in said subsections (c) and (d) of Section 4.3, such
notice must be received by the Issuer and the Trustee prior to the first date on
which the Issuer would be required to give notice to the Trustee or to take any
other action in respect to the Issuer's right to effect the redemption of Bonds
pursuant to the appropriate provision of the Indenture.
Section 4.9. Relative Position of this Article and the Indenture. The
rights and options granted to the Company in this Article shall be and remain
prior and superior to the
36
41
Indenture and may be exercised whether or not the Company is in default under
this Agreement, provided that such default will not result in nonfulfillment of
any condition to the exercise of any such right or option.
Section 4.10. Place of Payment. All amounts payable by the Company
pursuant to Section 4.1 or Section 4.3 of this Agreement shall be paid directly
to the Trustee at its Principal Office on behalf of the Issuer for deposit into
the Bond Fund as provided in the Indenture and the Issuer consents to said
amounts being paid in such manner.
Section 4.11. Payments to the Remarketing Agent and the Paying Agent. The
Company shall pay to the Remarketing Agent and the Paying Agent amounts equal to
the amounts to be paid by the Paying Agent or the Remarketing Agent pursuant to
Section 401 (g) of the Indenture or by the Paying Agent pursuant to Section 401
(h) of the Indenture, such amounts to be paid by the Company to the Remarketing
Agent or the Paying Agent on the dates such payments are to be made pursuant to
said Sections 401 (g) or 401 (h), respectively; provided, however, that the
obligation of the Company to make any such payments hereunder shall be reduced
by the amount of any moneys available for such payments under clause (i) or (ii)
of said Section 401 (g) or clause (i) of said Section 401 (h); and provided,
further, that the obligation of the Company to make any payment hereunder shall
be deemed to be satisfied and discharged to the extent that payment is made
using moneys described in clause (iii) of said Section 401 (g) or clause (ii) of
said Section 401 (h).
ARTICLE V.
PARTICULAR COVENANTS
Section 5.1. Maintenance of Existence. The Company agrees that during the
Loan Term it will maintain its existence, will not voluntarily dissolve or
otherwise dispose of all or substantially all of its assets and will not
consolidate with or merge into another entity or permit one or more other
entities to consolidate with or merge into it; provided, that the Company may,
without violating the agreements contained in this Section 5.1, consolidate with
or merge into another entity, or permit one or more other entities to
consolidate with or merge into it, or sell or otherwise transfer to another
entity all or substantially all (of its assets as an entirety and thereafter
dissolve, provided that if the surviving, resulting or transferee entity, as the
case may be, is other than the Company, such surviving, resulting or transferee
entity is solvent,
37
42
assumes in writing all of the obligations of the Company hereunder, is organized
under the laws of the United States of America, a state thereof or the District
of Columbia and is qualified to do business in the State.
If consolidation, merger or sale or other transfer is made as provided in
this Section 5.1, the provisions of this Section 5.1 shall continue in full
force and effect and no further consolidation, merger or sale or other transfer
shall be made except in compliance with the provisions of this Section 5.1.
Section 5.2. Qualification in the State. The Company warrants that it is
and throughout the Loan Term it will continue to be an entity either organized
under the laws of the State or qualified to do business in the State as a
foreign entity.
The Company shall preserve and keep in full force and effect all licenses
and permits necessary to the proper conduct of its business.
Section 5.3. Indemnification of Issuer and Trustee. The Company shall
indemnify and save the Issuer, the Commission and the Trustee harmless against
and from all claims by or on behalf of any person, firm or corporation arising
from the conductor management of, or from any work or thing done on, the
Facilities during the Loan Term, and against and from all claims arising during
the Loan Term from
(a) any condition of the Facilities caused by the Company,
(b) any failure on the part of the Company in the performance of any
of its obligations hereunder,
(c) any contract entered into in connection with the acquisition,
construction and installation of the Facilities,
(d) any act of negligence of the Company or of its agents,
contractors, servants, employees or licensees, and
(e) any act of negligence of any assignee or sublessee of the
Company, or of any agent, contractor, servant, employee or licensee of any
assignee or sublessee of the Company.
The Company shall indemnify and save the Issuer, the Commission and the Trustee
harmless from and against all
38
43
costs and expenses incurred in or in connection with any action or proceeding
brought thereon, and upon notice from the Issuer or the Trustee, the Company
shall defend them or either of them in any such action or proceeding. The
Company shall indemnify and save the Trustee harmless from and against any loss,
liability, expense or advance incurred or made without gross negligence or bad
faith on the part of the Trustee, arising out of or in connection with the
acceptance or administration of the trusts established under the Indenture and
this Agreement, including the costs and expenses of defending itself against any
claim of liability in the premises.
The Company agrees to pay to the Trustee any and all sums of money
required to be paid by the Issuer pursuant to Section 1202 of the indenture.
The provisions of this Section shall survive the termination of this
Agreement.
Section 5.4. Payment of Trustee's Fees, Except as paid out of the
Construction Fund pursuant to Section 3.3 of this Agreement, the Company agrees
to pay to or upon the order of the Trustee, (i) an amount equal to the fees of
the Trustee, as Trustee, which will be payable on such dates as shall be
mutually agreeable to the Trustee and the Company for the Ordinary Services of
the Trustee rendered and its Ordinary Expenses incurred under the indenture,
(ii) the reasonable fees, charges and expenses of the Trustee, as Bond Registrar
and Paying Agent (including any charges imposed with respect to the transfer of
registration or exchange of Bonds), and of Paying Agents on the Bonds for acting
as Paying Agents as provided in the Indenture, as and when the same become due,
and (iii) the reasonable fees, charges and expenses of the Trustee for
Extraordinary Services rendered and Extraordinary Expenses incurred by it under
the Indenture, as and when the same become due; provided that the Company may
contest in good faith the necessity for any such Extraordinary Services and
Extraordinary Expenses and the reasonableness of any such fees, charges or
expenses after payment of the same (so long as such action shall not impair the
agreements of the Company contained in this Section 5.4), and such contest or
action shall not constitute a default or an Event of Default hereunder,
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, and the Company agrees to pay the same with interest thereon at the
interest Rate for Advances until paid in full,
39
44
Section 5.5. Maintenance and Operation of the Facilities. The Company
agrees that during the Loan Term it will keep the Facilities including all
appurtenances thereto in good repair and good operating condition at its own
cost. The Company has represented in Section 2.3(j) its intention with respect
to the operation of the Facilities; provided, however, the Company shall not be
under any obligation to operate the Facilities if, in the judgment of the
Company, such operation is not in the best interest of the Company.
The Company shall have the privilege of remodeling the Facilities or
making additions, modifications, substitutions and improvements to the
Facilities from time to time as it, in its sole discretion, may deem to be
desirable for its uses and purposes, provided that such remodeling, additions,
modifications, substitutions and improvements, when constructed do not
materially adversely affect the character of the Facilities as an industrial
facility, or cause the Facilities to cease to be a "project" within the meaning
of the Act, or cause the Facilities to constitute a prohibited facility with the
meaning of Section 103(b) of the Code. The cost of such remodeling, additions,
modifications, substitutions and improvements shall be paid by the Company or,
to the extent permitted by this Agreement and the Indenture, from the
Construction Fund.
The Company may remove and dispose of any items included as Facilities
which the Company determine have become inadequate, obsolete, worn out,
unsuitable, undesirable or unnecessary, provided that any such removal will not
materially impair the character of the Facilities as an industrial facility, or
cause the Facilities to cease to be a "project" within the meaning of the Act,
or cause the Facilities to constitute a prohibited facility within the meaning
of Section 103(b) of the Code. In the event any such removal causes damage to
the remaining Facilities, the Company shall restore the same or repair such
damage.
The Company may from time to time, in its sole discretion, and at its own
expense, install additional property in conjunction with the Facilities. Such
property may be modified or removed at any time, provided that such modification
or removal will not materially adversely affect the character of the Facilities
as an industrial facility, or cause the Facilities to cease to be a "project"
within the meaning of the Act, or cause the Facilities to constitute a
prohibited facility with the meaning of Section 103(b) of the Code.
Section 5.6. Covenants of Company and Issuer with, Respect to Exemption of
Interest from Federal Income Taxation. The Bonds are being issued by the Issuer
in
40
45
compliance with the conditions necessary for the interest income on the Bonds to
be exempt from Federal income taxation pursuant to the provisions of Section
103(b) (6) (D) of the Code relating to "industrial development bonds" issued as
part of an issue the aggregate authorized face amount of which is $10,000,000 or
less and substantially all of the proceeds of which are to be used for the
acquisition, construction, reconstruction or improvement of land or property of
a character subject to the allowance for depreciation under Section 167 of the
Code. It is the intention of the parties hereto that the interest on the Bonds
be and remain free from Federal income taxation, and, to that end, the Issuer
and the Company do hereby covenant with each other, the Trustee and each of the
holders of any Bonds, as follows:
(a) that the Issuer will not cause and the Company will not cause or
permit the proceeds of the Bonds to be used in a manner which will cause
the interest on the Bonds to lose the exemption from Federal income
taxation conferred by Section 103(b) (6) (D) of the Code;
(b) that during the three-year period immediately following the date
of the issuance and delivery of the Bonds, neither of them shall make or
cause or permit to be made any Section 103(b) (6) (D) Capital Expenditures
with respect to the Local Facilities which would cause the Interest
payable on the Bonds to be or become subject to Federal income taxation;
(c) that should the circumstances set forth in Sections 103(b)(6)
(D) and (E) of the Code occur (during the six-year period referred to
therein), either through the fault of the Company or through circumstances
beyond the Company's control, and there shall occur a Determination of
Taxability, the Company shall prepay all amounts payable under Section 4.1
and cause such amounts to be applied by the Trustee to the redemption of
all outstanding Bonds and otherwise as provided in Section 4.3(a) and
Section 301 of the Indenture;
(d) that, promptly following the filing of the company's Federal
income tax return for each of its fiscal years which covers any portion of
the three-year period following the date of issuance and delivery of the
Bonds it will furnish to the Trustee a copy of each Supplemental Statement
filed by the Company in connection with each such Federal income tax
return or that portion of each such Supplemental Statement which
41
46
reports Section 103(b)(6)(D) Capital Expenditures relating to the Local
Facilities;
(e) that, during the term of this Agreement, the Company will fully
comply with all effective rules, rulings and regulations promulgated by
the Department of the Treasury or the Internal Revenue Service, with
respect to bonds issued under Section 103(b) (6)(D) of the Code so as to
maintain the tax-exempt status of the interest payable on the Bonds;
(f) that the Company will make no change in the plans and
specifications for the Facilities which would result in (i) the Facilities
not being a "project" within the meaning of the Act, (ii) the Facilities
constituting a prohibited facility within the meaning of Section 103(b) of
the Code, (iii) less than substantially all of the net proceeds of the
sale of the Bonds being used to pay the costs of land or property of a
character subject to the allowance for depreciation under Section 167 of
the Code, or (iv) a violation of the limitation on maturity of the Bonds
under Section 103(b) (14) of the Code;
(g) that at no time will:
(i) more than 25% of the net proceeds of the sale of the Bonds
be used to provide a facility the primary purpose of which is one of
the following: retail food and beverage services (including eating
and drinking places, but excluding grocery stores), automobile sales
or service, or the provision of recreation or entertainment; or
(ii) any portion of the net proceeds of the sale of the Bonds
be used to provide the following: any private or commercial golf
course, country club, massage parlor, tennis club, skating facility
(including roller skating, skateboard and ice skating), racquet
sports facility (including any handball or racquetball court), hot
tub facility, suntan facility or racetrack; or
(iii) any portion of the net proceeds of the sale of the Bonds
be used to provide any airplane, skybox, or other private luxury
box, any health club facility, any facility primarily used for
gambling, or any store the principal business of which is the sale
of alcoholic beverages for consumption off premises; or
(iv) any portion of the net proceeds of the sale of the Bonds
be used (directly or indirectly)
42
47
for the acquisition of land (or an interest therein) to be used for
farming purposes, or 25% or more of the net proceeds of the sale of
the Bonds be used (directly or indirectly) for the acquisition of
land other than land to be used for farming purposes; or
(v) any portion of the net proceeds of the sale of the Bonds
be used for the acquisition of any property the first use of which
property is not pursuant to such acquisition, except with respect to
any building (and the equipment therefor) if the rehabilitation
expenditures with respect to such building equal or exceed 15% of
the portion of the cost of acquiring such building (and equipment)
financed with the proceeds of the Bonds; or
(vi) the Facilities be operated as a facility the primary
purpose of which causes the Facilities to constitute a prohibited
facility within the meaning of Section 103(b) of the Code; and
(h) that at no time during the three-year period beginning on the later of
the date the Facilities are placed in service or the date of issuance and
delivery of the Bonds will the Company permit any person to be an owner or
Principal User of the Facilities if the sum of the authorized face amount of the
Bonds allocable to such person plus the aggregate face amount of all tax-exempt
industrial development bonds presently outstanding which are allocable to such
person exceeds $40,000,000.
Section 5.7. Insurance Required. Throughout the Loan Term the Company
shall keep the Facilities continuously insured against such risks as are
customarily insured against by businesses of like size and type, paying as the
same become due all premiums in respect thereto. The insurance hereby required
may be contained in blanket policies now or hereafter maintained by the Company
and may provide for such deductible provisions as are customary with businesses
of like size and type. In addition, the Company shall comply, or cause
compliance, with applicable workers' compensation laws of the State.
All such policies, or a certificate or certificates of the insurers that
such insurance is in force and effect, shall be deposited with the Trustee and
shall contain a provision that such policy may not be cancelled unless the
Trustee is notified at least thirty (30) days prior to cancellation; and at
least thirty (30) days prior to
43
48
expiration of any such policy, the Company shall furnish the Trustee with
written evidence that the policy has been renewed or replaced or is no longer
required hereby.
Section 5.8. Taxes, Other Governmental Charges and Utility Charges. The
Company agrees to pay, as the same respectively become due, all taxes,
assessments whether general or special, and governmental or utility charges of
any kind whatsoever that may at any time be lawfully assessed, levied or imposed
against or with respect to or incurred in the operation, maintenance or use of
the Facilities (including, without limiting the generality of the foregoing, all
sales and ad valorem taxes and any taxes levied upon or with respect to the
receipts, income or revenues of the Issuer from this Agreement) which, if not
paid, may become or be made a lien or a charge on the amounts payable by the
Company under this Agreement.
The Company may, at its expense and in its own name and behalf, in good
faith contest any such taxes, assessments or charges and, in the event of any
such contest, may permit the taxes, assessments or charges so contested to
remain unpaid during the period of such contest, including any appeal period,
unless by nonpayment of any such items prior to the final adjudication if said
contest (i) the ability of the Company to make the payments hereunder will be
materially endangered, or (ii) the moneys or investments in the Bond Fund or the
Construction Fund will be subject to loss or forfeiture, or (iii) the continued
proper and efficient operation of the Facilities will be materially threatened,
and in any such event such taxes, assessments or charges shall be paid promptly.
Section 5.9. Damage, Destruction and Eminent Domain. If at any time during
the Loan Term, the Facilities, or any portion thereof, shall be damaged or
destroyed by fire, flood, windstorm or other casualty or title to, or the
temporary use of, the Facilities, or any portion thereof, shall have been taken
by the exercise of the power of eminent domain, the Company (unless it shall
have exercised its option to prepay the loan pursuant to Section 4.3(c) Or
4.3(d)) shall cause the Net Proceeds from insurance or condemnation or an amount
equal thereto (i) to be used for the repair, reconstruction, restoration or
improvement of such Facilities, or such portion thereof, as industrial
facilities, or (ii) to be used for the acquisition, construction or improvement
of additional industrial facilities within the County for use in connection with
operational facilities of the company, provided that the Company shall first
have obtained an opinion of Independent Tax Counsel or a ruling of the Internal
Revenue Service that the proposed
44
49
use pursuant to this clause (ii) will not cause the interest on the Bonds to
become included in the gross income of the holders of the Bonds for the purposes
of Federal income taxation, or (iii) to be deposited into the Bond Fund (but
only for application, as instructed by the Authorized Company Representative, to
the purchase of Bonds in the open market for the purpose of cancellation at
prices not exceeding the then open market price of the Bonds or to the
redemption of the Bonds at the next available optional redemption date in the
manner provided in the Indenture), or (iv) to be used for any combination of the
purposes permitted by (and subject to the conditions described in) clauses (i),
(ii) and (iii) above.
Notwithstanding anything to the contrary contained in this Loan Agreement,
until the first to occur of (a) the expiration of the Letter of Credit or (b) a
material default by the Bank in connection therewith, the provisions of the
Reimbursement Agreement shall control with respect to the payment and
application of insurance and condemnation proceeds.
Section 5.10. Company's Obligation To Pay Certain Fees Expenses of the
issuer. The Company agrees to pay to the Issuer reasonable out-of-pocket or
extraordinary expenses of the issuer, related to the Facilities and incurred as
a result of a request of the Company or a requirement (in the reasonable
judgment of the Issuer) of this Agreement or the Indenture, and which are not
otherwise required to be paid by the Company under the terms of this Agreement,
including but not limited to the fees and expenses incurred in complying with
Section 503 of the Indenture.
In consideration of the issuance and delivery of the Bonds by the Issuer
and the lending of the proceeds thereof to the Company to enable it to acquire,
construct and install the Facilities, the Company agrees to pay to the Issuer on
the Original Issuance Date of the Bonds, an amount equal to 1/8 of 1% of the
principal amount of the Bonds, and on each anniversary of the Original Issuance
Date of the Bonds, an amount equal to $400 per $1,000,000 of Outstanding Bonds
as of such date.
In the event the Company should fail to make any of the payments required
in this Section 5.10, the item or installment so in default shall continue as an
obligation of the Company until the amount in default shall have been fully
paid, and the Company agrees to pay the same with interest thereon until paid at
the Interest Rate for Advances.
The provisions of this Section shall survive the termination of this
Agreement.
45
50
Section 5.11. Application of Certain Proceeds Prior to the Expiration Date
of the Letter of Credit. Notwithstanding the provisions of Section 5.9 of this
Agreement, prior to the Expiration Date of the Letter of Credit, any moneys
available for application in accordance with clause (iii) of Section 5.9 of this
Agreement shall be held by the Trustee in a separate account for a period of one
hundred twenty-three (123) days from the date of receipt thereof. If during said
one hundred twenty-three (123) day period no petition in bankruptcy or similar
insolvency proceeding has been filed by or against the Company or by the Issuer,
such moneys shall be applied to the maximum extent possible to the purchase for
cancellation or redemption of Outstanding Bonds, and any moneys remaining
thereafter shall be applied to payment of interest on the Bonds on the Interest
Payment Date next following said one hundred twenty-three (123) day period.
Section 5.12. Non-Arbitrage Covenant; Compliance with Special Arbitrage
Rules.
(a) The Company hereby covenants and agrees with the Issuer and the
Trustee for the benefit of the holders of any of the Bonds, present and future,
that it will proceed with due diligence to spend the "gross proceeds"
(hereinafter defined) of the Bonds in connection with the acquisition,
construction and installation of the Facilities and 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 103(c) of the Code and any
Income Tax Regulations promulgated thereunder as such regulations may apply to
obligations issued as of the date of the Bonds. 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 the certificate required by Section 207 of the Indenture.
(b) The Company hereby further covenants and agrees with the Issuer and
the Trustee, and with the holders of any of the Bonds, present and future, as
follows:
(1) All of the gross proceeds of the Bonds, other than gross proceeds held
in a "bona fide debt service fund" (hereinafter defined) will be expended on the
Facilities within six (6) months of the date of issuance and delivery of the
Bonds, or
(2) If any part of the gross proceeds of the Bonds has not been expended
on the Facilities within six (6) months of the date of issuance and delivery of
the Bonds, the Company shall invest or cause such gross proceeds to be invested
in
46
51
the manner described in subparagraph (A) below and shall pay or cause to be paid
to the United States the amounts described in subparagraph (B) below in
accordance with the terms and conditions set forth therein.
(A) Except during any "temporary period" (hereinafter defined), the
aggregate amount of gross proceeds of the Bonds which are invested in
"nonpurpose obligations" (hereinafter defined) having a "yield"
(hereinafter defined) higher than the yield on the Bonds shall at no time
during any "bond year" (hereinafter defined) exceed one hundred fifty
percentum (150%) of the "debt service" (hereinafter defined) on the Bonds
for such bond year. In addition, the aggregate amount of gross proceeds of
the -Bonds invested hereunder in nonpurpose obligations having a yield
higher than the yield on the Bonds shall be promptly and appropriately
reduced as the amount of outstanding Bonds is reduced (whether by payment
at maturity, mandatory sinking fund redemption, redemption prior to
maturity, or otherwise). The Company shall not be required to sell or
dispose of nonpurpose obligations if such sale or disposition would result
in the realization of a loss, for Federal income tax purposes, that
exceeds the amount that would be rebated to the United States pursuant to
the provisions of subparagraph (b) (2) (B) below (but for such sale or
disposition), at the time of such sale or disposition if a rebate were due
at such time. The provisions of the foregoing sentence shall not apply to
the extent that other nonpurpose obligations acquired with the gross
proceeds of the Bonds may be sold or disposed of without incurring the
loss described above, and in any event the provisions of the foregoing
sentence shall cease to apply thirty (30) days after the last day of the
first "computation period" (defined in subparagraph (b)(2) (B)) ending
thereafter on which such nonpurpose obligations can be sold or disposed of
without incurring the loss described hereinabove. The provisions of this
subparagraph (A) shall not apply to gross proceeds of the Bonds which are:
(i) invested for the initial temporary period provided in Section
1.103-14(b) (1) of the Income Tax Regulations;
(ii) held in a bona fide debt service fund for the Bonds and
invested for the 13-month temporary period provided in Section 1.103-14(b)
(10) of the Income Tax Regulations;
(iii) invested for either of the temporary periods provided for a
sinking fund for the Bonds in
47
52
Sections 1.103-14(b)(8) and 1.103-14(b)(12) of the Income Tax Regulations;
(iv) invested during the one-year temporary period provided for
investment earnings derived from, invested proceeds of the Bonds and from
the investment of amounts held in a sinking fund for the Bonds under
Sections 1.103-14(b)(6) and 1.103-14(b)(9) of the Income tax Regulations;
(v) invested for the temporary period provided for proceeds of a
refunding issue in Section 1 103-14(e) (3) of the Income Tax Regulations;
or
(vi) held in a "revolving fund" (within the meaning of Section
1.103-14(b) (11) of the Income Tax Regulations) and invested during the
three-year temporary period set forth therein.
(B) At the time or times hereinafter set forth, the Company shall
pay or shall cause the Trustee to pay to the United States an amount,
hereinafter referred to as the "Rebate Amount", which is equal to the sum
of:
(i) the excess of --
(a) the aggregate amounts earned from the Original Issuance
Date of the Bonds on all nonpurpose obligations in which gross
proceeds of the Bonds have been invested (other than nonpurpose
obligations attributable to an excess described herein) over
(b) the aggregate amounts which would have been earned if the
yield on such nonpurpose obligations (other than nonpurpose
obligations attributable to an excess described herein) had been
equal to the yield on the Bonds, plus
(ii) any income attributable to the excess described in clause (i)
above.
The Rebate Amount payable to the United States shall be determined annually by
the Company for each bond year during which Bonds remain outstanding and upon
retirement of the last of the Bonds (each such period is hereinafter referred to
as a "computation period"). The Rebate Amount determined for one bond year shall
not be reduced or offset as a result of any determination of the Rebate Amount
for any other bond year. Such Rebate Amounts shall be deposited annually in the
Excess Investment Earnings Account created pursuant to the provisions of Section
804 of the Indenture. The Rebate
48
53
Amount shall be paid to the United States in installments, as follows:
(1) subject to clause (III) below, the first such installment shall
be paid no later than thirty (30) days after the end of the fifth (5th)
bond year of the Bonds;
(11) subject to clause (111) below, an additional installment shall
be paid on or prior to the last day of each additional installment payment
period during which any of the Bonds remain outstanding. For purposes of
this clause (II), an installment payment period shall commence on the last
day on which a preceding installment of the Rebate Amount was required to
be paid, and shall end on the day preceding the fifth (5th) anniversary of
such payment date;
(III) anything herein to the contrary notwithstanding, the last
installment shall be paid no later than thirty (30) days after the last of
the Bonds has been retired; and
(IV) each installment shall be in an amount which, when aggregated
with the amount of any prior installments paid to the United States
hereunder, will equal at least ninety percentum (90%) of the total Rebate
Amount payable to the United States hereunder as of the date such
installment is paid; provided, however, that the last installment shall be
in an amount equal to the entire remaining balance of the Rebate Amount
payable to the United States hereunder.
The Company shall maintain or cause to be maintained records of such
determinations for each computation period until six years after payment in full
of the Bonds and shall make such records available to the Issuer, the Trustee
and their representatives upon reasonable request therefor. The Issuer and the
Trustee hereby agree to cooperate with the Company in making the determinations
for each computation period required pursuant to this subparagraph (b),
To that end the Trustee, as Construction Fund and Bond Fund custodian, has
covenanted and agreed in Section 804 of the Indenture that it will, on or before
each anniversary of the date of issuance of the Bonds, prepare and file with the
Issuer and the Company a report with respect to the Construction Fund and the
Bond Fund setting forth the total amounts invested during the preceding bond
year, the investments made with the moneys in the Construction Fund and the Bond
Fund and the investment earnings (and losses) resulting from the investments in
each such Fund, respectively,
49
54
together with such additional information concerning such Funds and the
investments therein, respectively, as the Issuer or the Company shall reasonably
request.
(3) For purposes of clause (a) of subparagraph (2) (B) (i) of this
subparagraph (b), the Company, in determining the aggregate amounts earned on
all nonpurpose obligations acquired with gross proceeds of the Bonds--
(A) will take into account any gain or loss incurred on the
disposition of any such nonpurpose obligation, and
(B) unless the Issuer otherwise elects, will not take into account
any amounts earned on nonpurpose obligations held in a bona fide debt
service fund for the Bonds during any bond year in which the gross
earnings on such fund do not exceed One Hundred Thousand Dollars
($100,000).
(4) Except as provided in Section 1.103-15AT(d) (6) of the Temporary
Income Tax Regulations with respect to the purchase of obligations of the United
States Treasury directly from the United States Treasury, at no time shall any
of the gross proceeds of the Bonds be invested in (A) nonpurpose obligations
having a purchase price which is not equal to the fair market value of
comparable obligations or producing a yield which is not equal to the fair
market yield of comparable obligations, or (B) in any other manner resulting in
a "prohibited payment" (within the meaning of Section 1.103-15 AT(d) (6) of the
Temporary Income Tax Regulations) of any portion of the Rebate Amount, directly
or indirectly, to a party other than the United States.
(5) Notwithstanding the provisions of subparagraph (b) (1), if gross
proceeds of the Bonds subsequently arise following the end of the six-month
period commencing on the date of issuance and delivery of the Bonds (whether due
to sale of the Project, condemnation of the Project, damage or destruction to
the Project, or otherwise) the provisions of subparagraph (b)(1) shall cease to
apply and the Company shall be obligated to (i) make the payments to the United
States set forth in subparagraph (b) (2) ( B) with respect to the gross proceeds
of the Bonds which arise following the end of such six-month period (but not
with respect to gross proceeds of the Bonds expended during such six-month
period) and perform the other duties set forth in subparagraph (b) (2) (B), and
(ii) limit the amount of gross proceeds of the issue and perform the other
duties set forth in subparagraph (b)(2)(A) above.
50
55
(c) For purposes of construing this Section and Section 804 of the
Indenture, the following definitions shall apply:
(1) "bona fide debt service fund" shall have the meaning set forth
in Income Tax Regulation Section 1 103-13(b) (12);
(2) "bond year" shall mean the one-year period commencing on
Original Issuance Date of the Bonds and ending one year later, and each
one-year period thereafter until payment in full of the Bonds;
(3) "debt service" shall have the meaning set forth in Code Section
103(c) (6) (C) (iii) and Temporary Income Tax Regulation Section
1.103-15AT(b) (5) and Temporary Income Tax Regulation Section
1.103-15AT(c)(4);
(4) "gross proceeds" shall have the meaning set forth in Temporary
Income Tax Regulation Section 1.103-15AT(b) (6) and shall include:
(i) original proceeds of the Bonds;
(ii) investment proceeds of the Bonds;
(iii) transferred proceeds of the Bonds;
(iv) amounts held in a sinking fund for the Bonds;
(v) amounts held in a reasonably required reserve or
replacement fund for the Bonds;
(vi) securities or obligations pledged as security for the
payment of debt service on the Bonds;
(vii) amounts received with respect to acquired purpose
obligations acquired with the proceeds of the Bonds;
(viii) any other amount to be used to pay debt service on the
Bonds; and
(ix) any amounts received as a result of investing any amounts
described in (i) through (viii) above;
(5) "nonpurpose obligations" shall have the meaning set forth in
Code Section 103(c) (6) (H) (ii)
51
56
and Temporary Income Tax Regulation Section 1.103-15AT(b) (2);
(6) "temporary period" shall mean the temporary periods set forth in
Temporary Income Tax Regulation Section 1.103-15AT(c) (2) and described in
clauses (i)-(vi) of subparagraph (b) (2) (A) above; and
(7) "yield" shall have the meaning set forth in Code Section 103(c)
(6) (C) (ii) and Temporary Income Tax Regulation Section 1.103-15AT(b) (3)
and Temporary Income Tax Regulation Section 1.103-15AT(c) (4).
(d) The covenants and agreements contained in subparagraph (b) above are
intended to assure compliance with Section 103(c) (6) of the Code and with
Temporary Income Tax Regulation Section 1.103-15AT. In the event such Temporary
Income Tax Regulations are hereafter modified, or Final Income Tax Regulations
are promulgated in substitution for such Temporary Income Tax Regulations, and
such modifications or such Final Income Tax Regulations modify or delete any
element of the covenants contained in subparagraph (b) above, the Company shall
be relieved of its obligation to comply with such covenants to the extent of
such modification or deletion. In the event such modifications or Final Income
Tax Regulations impose additional requirements which are applicable to the
Bonds, the Company hereby covenants and agrees to comply with the provisions of
the Temporary income Tax Regulations, as modified, or with such Final Income Tax
Regulations.
Section 5.13. Fixed Interest Rate. The Company acknowledges that the
interest rate on the Bonds shall be converted to the Fixed Interest Rate upon
the happening of certain events specified in Section 402 of the Indenture. The
Company agrees to use its best efforts to deliver to the Trustee an opinion of
Independent Tax Counsel to the effect that conversion to the Fixed Interest Rate
will not adversely affect the exemption of the interest on the Bonds from
Federal income taxation.
ARTICLE VI.
EVENTS OF DEFAULT AND REMEDIES
Section 6.1. Events of Default. An Event of Default shall mean one or more
of the following described events:
(a) failure by the Company to pay any amounts required to be paid under
Section 4.1 or 4.3 of this Agreement on or
52
57
prior to the date on which payment is required to be made by said Section 4.1 or
4.3;
(b) failure by the Company to observe and perform any covenant, condition
or agreement on its part to be observed or performed under this Agreement, other
than as referred to in paragraph (a) of this Section 6.1 or in Section 5.6 or
Section 5.12 of this Agreement, and the continuance thereof for a period of
sixty (60) days after written notice, specifying such failure and requesting
that it be remedied, has been given to the Company by the Issuer or the Trustee,
unless the Trustee shall agree to an extension of such time prior to its
expiration, or if the failure be such that it cannot be corrected within the
applicable period, it shall not constitute an Event of Default if corrective
action is instituted by the Company within the applicable period and diligently
pursued until the failure is corrected;
(c) any representation by or on behalf of the Company contained in this
Agreement or in any instrument furnished in compliance with or in reference to
this Agreement or the Indenture proves false or misleading in any material
respect as of the date of the making or furnishing thereof;
(d) the Company shall (i) apply for or consent to the appointment of, or
the taking or possession by, a receiver, custodian, trustee or liquidator of the
Company or of all or a substantial part of its property, (ii) admit in writing
its inability to pay its debts as such debts become due, (iii) make a general
assignment for the benefit of its creditors, (iv) commence a voluntary case
under the Federal Bankruptcy Code (as now or hereafter in effect), (v) file a
petition seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, winding up, or composition or adjustment of debts,
(vi) fail to controvert in a timely or appropriate manner, or acquiesce in
writing to, any petition filed against the Company in an involuntary case under
said Federal Bankruptcy Code, or (vii) take any action for the purpose of
effecting any of the foregoing;
(e) a proceeding or case shall be commenced, without the application or
consent of the Company, in any court of competent jurisdiction, seeking (i) the
liquidation, reorganization, dissolution, winding-up, or composition or
readjustment of debts, of the Company, (ii) the appointment of a trustee,
receiver, custodian, liquidator or the like of the Company or of all or any
substantial part of its assets, or (iii) similar relief in respect of the
Company, as the case may be, under any law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts, and such
proceedings or case shall continue undismissed, or an order, judgment or decree
approving or
53
58
ordering any of the foregoing shall be entered and continue unstayed and in
effect, for a period of sixty (60) days from commencement of such proceeding or
case, or an order for relief against the Company shall be entered in an
involuntary case under said Federal Bankruptcy Code; or
(f) an "Event of Default" occurs and is continuing under Section 1101 of
the Indenture.
The provisions of subsection (b) of this Section are subject to the limitation
that if, by reason of Force Majeure, the Company is unable in whole or in part
to carry out its agreements on its part herein contained, other than the
obligations on the part of the Company contained in Sections 4.1, 4.3, 5.3, 5.4,
5.6, 5.7, 5.8 and 5.12, the Company shall not be deemed in default during the
continuance of such inability. The Company agrees, however, to use all
reasonable efforts 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.
The declaration of an Event of Default under subsections (d) or (e) of
this Section 6.1, and the exercise of remedies upon any such declaration, shall
be subject to any applicable limitations of Federal bankruptcy law affecting or
precluding such declaration or exercise during the pendency of or immediately
following any bankruptcy, insolvency or reorganization proceedings.
The provisions of Sections 6.1 and 6.2 are subject to the further
limitation that the rescission or annulment of a declaration that all the Bonds
outstanding under the Indenture are immediately due and payable shall also
constitute a rescission or annulment of any corresponding declaration made
pursuant to Sections 6.1 or 6.2 and a waiver and rescission of the consequences
of such declaration and of the Event of Default with respect to which such
declaration had been made, provided that no such waiver or rescission shall
extend to or affect any subsequent or other Event of Default or impair any right
consequent thereon.
Section 6.2. Remedies on Events of Default. Whenever any Event of Default
referred to in Section 6.1 shall have happened and be subsisting, any one or
more of the following remedial steps may be taken; provided, however, that if an
Event of Default under subsection (b) of Section 6.1 occurs
54
59
as a result of the failure to observe or perform any covenants or agreements
under Section 5.5, the remedies of the Issuer and the Trustee shall be limited
to those provided in subsections (c) and (d) of this Section 6.2:
(a) the Issuer or the Trustee may, or the Trustee, under the
circumstances provided in Section 1102 of the Indenture, shall be
obligated to, declare, as the case may be, all unpaid amounts payable
pursuant to Section 4.1 or 4.3 of this Agreement to be immediately due and
payable, whereupon the same shall become immediately due and payable;
(b) the Issuer may at its option, or the Trustee, as provided in
Section 1103 of the Indenture, may at its option take or shall be
obligated to take, as the case may be, whatever action at law or in equity
may appear necessary or desirable to collect the amounts then due and
thereafter to become due;
(c) the Issuer or the Trustee may take whatever action at law, or in
equity may appear necessary or desirable to enforce performance and
observance of any obligation, agreement or covenant of the Company under
this Agreement; and
(d) in the event any of the Bonds shall at the time be outstanding
and unpaid, the Issuer or the Trustee may have access to and inspect,
examine and make copies of the books and records and any and all accounts
and data of the Company as the Issuer may reasonably request but only,
however, insofar as they pertain to the Facilities.
Any amounts collected pursuant to action taken under this Section 6.2 shall be
paid into the Bond Fund and applied in accordance with the provisions of the
Indenture or, if the Bonds have been fully paid (or provision for payment
thereof has been made in accordance with the provisions of the Indenture), and
all reasonable fees, charges and expenses of the Trustee and Paying Agents
provided for herein have been paid, shall be paid to the Bank to the extent that
any moneys are owed to the Bank pursuant to the Letter of Credit Agreement and,
otherwise, to the Company; provided, however, that any such amounts which do not
represent payments which the Company is required to make pursuant to Section 4.1
or 4.3 of this Agreement shall be paid to the party to whom such amounts are
owed.
Notwithstanding the foregoing, in the event the Bank has fully funded the
Letter of Credit, neither the Issuer
55
60
nor the Trustee shall have any right to pursue remedies under subsections (b)
and (c) above.
Section 6.3. No Remedy Exclusive. No remedy conferred upon or reserved to
the Issuer or the Trustee by this Agreement is intended to be exclusive of any
other available remedy or remedies, but each and every such remedy shall be
cumulative and shall be in addition to every other remedy given under this
Agreement or now or hereafter existing at law, in equity or by statute. No delay
in exercising or omission to exercise any right or power accruing upon any Event
of Default shall impair any such right and power which may be exercised from
time to time and as often as may be deemed expedient. In order to entitle the
Issuer or the Trustee to exercise any remedy reserved to it in this Article VI,
it shall not be necessary to give any notice, other than such notice as may be
herein expressly required.
Section 6.4. Agreement To Pay Attorneys' Fees and Expenses. Should an
Event of Default occur or in the event the Company should default under any of
the provisions of this Agreement and the Issuer or the Trustee should employ
attorneys or incur other expenses for the collection of the amounts payable
hereunder by the Company or for the enforcement of performance or observance of
any obligation or agreement on the part of the Company contained in this
Agreement, the Company agrees that it will on demand therefor reimburse the
lawful and reasonable fees of such attorneys and such other expenses so
incurred. If any such fees and expenses are not so reimbursed, the amount
thereof, together with interest thereon from the date of demand for payment at
the Interest Rate for Advances, shall, to the extent permitted by law,
constitute indebtedness secured hereby and by the Indenture, and in any action
brought to collect such indebtedness, the Trustee or the Issuer, as applicable,
shall be entitled to seek the recovery of such fees and expenses in such action
except as limited by law or by judicial order or decision entered in such
proceedings.
The provisions of this Section shall survive the termination of this
Agreement,
Section 6.5. No Additional Waiver Implied by One Waiver. In the event any
agreement contained in this Agreement should be breached by either party and
thereafter waived by the other party, such waiver shall be limited to the
particular breach so waived and shall not be deemed to waive any other breach
hereunder.
56
61
ARTICLE VII
MISCELLANEOUS
Section 7.1. Termination of Agreement. This Agreement shall be in full
force and effect from the date hereof until the end of the Loan Term, at which
time the obligations of the Issuer and the Company hereunder shall terminate,
provided that any obligations of the Company with respect to the payment of
costs and expenses under this Agreement shall survive such termination and
continue in effect until such costs and expenses are paid in full.
Section 7.2. Confidential Information. The Company shall not be required
to disclose, or to permit the Issuer, the Trustee or others to acquire access
to, any information deemed by the Company to be proprietary or confidential.
Section 7.3. Cancellation of Bonds. The Company shall have the right to
cause Bonds to be delivered to the Trustee for cancellation, and the Issuer
shall cause the Trustee to cancel any Bonds so delivered to the Trustee.
Section 7.4. Amounts Remaining in Bond Fund, Construction Fund and Other
Funds and Accounts. It is agreed by the parties hereto than any amounts
remaining in the Bond Fund, the Construction Fun or any other fund or account
created under this Agreement or the Indenture and held by the Trustee after
payment in full of the Bonds (or provision for payment thereof having been made)
in accordance with the provisions of the Indenture and the fees, charges and
expenses of the Trustee and Paying Agent and all other amounts required to be
paid under the Indenture or under this Agreement shall belong to and be paid by
the Trustee to the Bank to the extent that any moneys are owed to the Bank
pursuant to the Letter of Credit Agreement and, otherwise, to the Company;
provided, however, any amounts remaining in the Excess Investment Earnings
Account shall be held and disbursed solely in accordance with the provisions of
Section 5. 12(b) hereof and Section 804 of the Indenture.
Section 7.5. Notices. All notices, certificates, requests or other
communications hereunder shall be sufficiently given and shall be deemed given
when mailed by registered mail, postage prepaid, addressed to the Notice
Address. A duplicate copy of each notice, certificate, request or other
communication given hereunder to the Issuer, the Company, the Bank or the
Trustee shall also be given to the others. The Company, the Issuer, the Bank and
the Trustee may, by notice given hereunder, designate any further or different
addresses to which subsequent notices, certificates, requests or other
communications shall be sent or persons to whose attention the same shall be
directed.
57
62
Section 7.6. Binding Effect; Parties in Interest. This Agreement shall
inure to the benefit of and shall be binding upon the Issuer, the Company and
their respective successors and assigns, subject, however, to the limitations
contained in Sections 4.1 and 5.1, and subject to the further limitation that
any obligation of the Issuer created by or arising out of this Agreement shall
not be a general debt of the Issuer but shall be a limited obligation payable
solely out of payments, revenues and other income, charges and moneys realized
under this Agreement, the sale of the Bonds or the Net Proceeds as provided
herein. Nothing in this Agreement is intended or shall be construed to give to
any person, firm or corporation other than the Trustee, the Bank and the parties
hereto any legal or equitable remedy or claim under or in respect of this
Agreement or any provision herein contained.
Section 7.7. Extent of Covenants of the Issuer; No Personal Liability. All
covenants, stipulations, obligations and agreements of the Issuer contained in
this Agreement shall be effective to the extent authorized and permitted by
applicable law. No such covenant, stipulation, obligation or agreement shall be
deemed to be a covenant, stipulation, obligation or agreement or any present or
future director, officer, agent or employee of the Issuer in his individual
capacity, and neither the directors of the Issuer nor any officer executing the
Bonds shall be liable personally on the Bonds or be subject to any personal
liability or accountability by reason of the issuance thereof or by reason of
the covenants, stipulations, obligations or agreements of the Issuer contained
in this Agreement or in the Indenture.
Section 7.8. Amendments, Changes and Modifications. Except as otherwise
provided in this Agreement or in the Indenture, subsequent to the initial
issuance of Bonds and prior to payment of the Bonds in full (or provision of the
payment thereof having been made) in accordance with the provisions of the
Indenture, this Agreement may not be effectively amended, changed, modified,
altered or terminated without the prior written consent of the Trustee, and
prior to the Expiration Date of the Letter of Credit, the Bank.
Section 7.9. Execution Counterparts. This Agreement may be executed in
several counterparts, each of which shall be regarded as an original and all of
which shall constitute but one and the same Agreement.
Section 7.10. Severability. If any clause, provision or section of this
Agreement shall be held illegal or invalid by any court, the invalidity of such
clause, provision or section shall not affect any of the remaining
58
63
clauses, provisions or sections hereof and this Agreement shall be construed and
enforced as if such illegal or invalid clause, provision or section had not been
contained herein. In case any agreement or obligation contained in this
Agreement shall be held to be in violation of law, then such agreement or
Obligation shall be deemed to be the agreement or obligation of the Issuer or
the Company, as the case may be, to the full extent permitted by law.
Section 7.11. Captions. The captions or headings in this Agreement are for
convenience only and in no way define, limit or describe the scope or intent of
any provisions or sections of this Agreement.
Section 7.12. Payments Due on Non-Business Days. After the Conversion
Date, in any case where the date for any payment required to be made hereunder
or under the Indenture shall not be a Business Day, then payment need not be
made on such date but may be made on the next succeeding Business Day with the
same force and effect as if made on the date fixed for such payment, and if such
payment is made on the next succeeding Business Day no interest shall accrue for
the period after such date.
Section 7.13. Governing Law. This Agreement shall be governed exclusively
by, and construed in accordance with, the laws of the State.
59
64
IN WITNESS WHEREOF, the Issuer and the Company have caused this Agreement to be
executed in their respective corporate names by their duly authorized officers,
all as of the date first above written.
TRINITY RIVER INDUSTRIAL
DEVELOPMENT AUTHORITY
(CORPORATE SEAL) By: [SIG]
-------------------------------
President
Attest:
[SIG]
--------------------------------
Secretary
RADIATION STERILIZERS,
INCORPORATED
(CORPORATE SEAL)
By: /s/ ▇▇▇▇▇ ▇▇▇▇
-------------------------------
President
Attest:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇.
--------------------------------
Secretary
60
65
EXHIBIT A
DESCRIPTION OF THE PROJECT
1. A brief description of the Project, its location and intended use are as
follows:
The Project is the construction of a 21,000 square foot manufacturing
facility located on 1.25 acres of land at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇. The facility will be used to provide radiation sterilization
services to the disposable medical device industry on a contractual basis.
Cobalt-60 is the radioisotope used as the energy source in the
sterilization process. This type of facility must be licensed and
regulated by the Nuclear Regulatory Commission and the appropriate state
agencies. Construction will be of steel frame with an exterior wall of
concrete and/or brick. The proposed Project consists of an industrial
building that houses a radiation cell. The cell is a reinforced concrete
structure that is built over a stainless steel lined pool of water (the
isotope is lowered into the water when personnel access to the cell is
required). A major component of each facility is a proprietary,
computer-controlled conveyor system that transports the materials to be
sterilized through the radiation cell.
2. The estimated number of new jobs to be created as a result of the Project
is 40 with an estimated annual payroll of $1,200,000. The new jobs will
consist of plant managers, technical employees, production managers and
assembly and warehouse personnel.
3. The following is a statement of the present ownership of the Project site
describing liens and encumbrances and the acquisitions, necessary
interests, access, approvals, permits, consents and authorizations
The Project site is currently owned by the User and was purchased in
January, 1984 for the sum of $65,005.20. An additional 3,000 square feet
of contiguous property was purchased in February, 1985 for $4,370.30.
There are no liens or encumbrances on the Project site. All necessary
access roads, utilities and drainage facilities have been or can be
provided. All approvals, permits, consents or authorizations of any
governmental or public agency, authority or person required in connection
with the construction installation and operation of the Project have been
or can be obtained.
4. The estimated cost of the Project and sources of payment are as follows:
Land $ 70,000
Building 725,000
Machinery & Equipment 3,312,000
Total Financing Charges 202,700
Bond Counsel Fee $ 23,000
User Counsel Fee 4,800
Trustee Fee 3,000
Financial Advisory Fee 9,600
Issuer Administrative Fee 14,700
TEDC Application Fee 4,600
TEDC Allocation Request Fee 4,600
Rating Agency Fee 8,000
Bond Discount 69,000
Letter of Credit Fee 59,400
Lever of Credit Bank's Expenses 2,000
RADIATION STERILIZERS, INCORPORATED
66
Interest During Construction $ 25,000
Architecture & Engineering 25,000
Reserve Fund 253,000
----------
TOTAL PROJECT COSTS $4,612,700
==========
FINANCED FROM AGGREGATE BOND PROCEEDS $4,600,000
Series 1985A $ 2,150,000
Series 1985B 2,450,000
The balance of the Project, $12,700, will be paid by the User.
5. The estimated dates of commencement and completion of the Project are as
follows:
Commencement: June 1985
Completion: October 1985
RADIATION STERILIZERS, INCORPORATED
67
EXHIBIT B
REQUISITION AND CERTIFICATION
Request No. Date:
Bank One Trust Company, N.A., as Trustee
under the Trust Indenture,
dated as of November 1, 1985,
relating to $2,150,000 Trinity River
Industrial Development Authority
Variable Rate Demand Industrial
Development Revenue Bonds
(Radiation Sterilizers, Incorporated
Project), Series 1985A
Attention: Corporate Trust Administration
The undersigned Authorized Company Representative and Authorized Issuer
Representative designated pursuant to the terms of a Loan Agreement, dated as of
November 1, 1985 (the "Agreement"), between Trinity River Industrial Development
Authority, a non-profit industrial development corporation created and existing
under the laws of the State of Texas (the "Issuer"), and Radiation Sterilizers,
Incorporated, a California corporation (the "Company") hereby request that there
be paid from the Construction Fund (hereinbelow described) the sum of $
___________ , and in that connection with respect to the use of the proceeds of
the $2,150,000 Trinity River Industrial Development Authority Variable Rate
Demand Industrial Development Revenue Bonds (Radiation Sterilizers, Incorporated
Project), Series ▇▇▇▇▇ (▇▇▇ "▇▇▇▇▇"), DO HEREBY CERTIFY, as follows:
1. The requested payment is a proper charge against Trinity River
Industrial Development Authority Construction Fund -- Radiation
Sterilizers, Incorporated Project, 1985A and has not been the basis of any
previous withdrawal from said Construction Fund.
2. Payment should be made to:
Name:
Address:
3. Attached hereto is a ▇▇▇▇, statement of account or a schedule
showing in reasonable detail the items with respect to which payment is
being requested and, if the Company or the Issuer is to be reimbursed,
proof of payment of such items is attached hereto,
68
which proof is satisfactory to the undersigned and the Trustee may act
thereon.
4. Payment of this obligation when added to all other payments
previously made from said Construction Fund will not result in less than
substantially all of the net proceeds of the sale of the Bonds (net
proceeds being those proceeds remaining after paying all expenses incurred
in connection with the issuance of the Bonds, together with investment
earnings on such net proceeds earned prior to the "Completion Date"
(defined in the Agreement)) being used to provide land or property of a
character subject to the allowance for depreciation under Section 167 of
the Internal Revenue Code of 1954, as amended.
5. (a) The Company has no notice of any vendors', materialmen's,
mechanics', suppliers' or other similar liens or right to liens, chattel
mortgages or conditional sales contracts, or other contracts or
obligations which should be satisfied or discharged before payment of such
obligation is made, or (b) this requisition is for the purpose of
obtaining funds to be used to satisfy or discharge a lien or contract of
the type described in (a) above.
6. This requisition contains no request for payment on account of
any portion of such obligation which the Company is, as of the date
hereof, entitled to retain under retained percentage agreements.
7. The obligation does not represent a cost paid or incurred by the
Issuer or the Company prior to November 28, 1983.
As provided in Section 3.3 of the Agreement, the Issuer may rely upon the
Company as to the completeness and accuracy of all statements contained herein.
By:
Authorized Company Representative
By:
Authorized Issuer Representative
With respect to any such item representing payment for labor, services,
material, supplies and/or equipment, insofar as such obligation was incurred for
labor, services, material, supplies and/or equipment in connection with the
acquisition, construction and installation of the "Facilities" (defined in the
Agreement), (i) such labor and/or
69
services were actually performed in a satisfactory manner, and (ii) such
material, supplies and/or equipment were actually used in or about the
construction of the Facilities or delivered at the site of the Facilities for
that purpose and the item of equipment with respect to which such payment is
requested constitutes a portion of the Facilities.
By :
Authorized Company Representative
70
EXHIBIT C
CERTIFICATE OF COMPLETION
The undersigned Authorized Company Representative designated pursuant to
that certain Loan Agreement (the "Agreement"), dated as of November 1, 1985,
between Trinity River Industrial Development Authority, a non-profit industrial
development corporation created and existing under the laws of the State of
Texas, and Radiation Sterilizers, Incorporated, a California corporation (the
"Company"), DOES HEREBY CERTIFY, as follows:
l. The acquisition, construction and installation of the "Facilities" as
described in the Agreement have been completed substantially in accordance with
the plans and specifications therefor and all labor, services, material,
supplies and/or equipment used in such acquisition, construction and
installation have been paid for, except for amounts retained in the
"Construction Fund" created in the Agreement for costs of the Facilities not yet
due and payable.
2. All other facilities necessary in connection with the Facilities have
been acquired, constructed and installed substantially in accordance with the
plans and specifications therefor and all costs and expenses incurred in
connection therewith have been paid, except for amounts retained in said
Construction Fund for costs of the Facilities not yet due and payable.
3. The Facilities and all other facilities in connection therewith have
been acquired, constructed and installed in a satisfactory manner and are
suitable and sufficient for the efficient operation of the Facilities for its
intended purposes.
4. Substantially all of the net proceeds of the $2,150,000 in aggregate
principal amount of Trinity River Industrial Development Authority Variable Rate
Demand Industrial Development Revenue Bonds (Radiation Sterilizers, Incorporated
Project), Series ▇▇▇▇▇ (▇▇▇ "▇▇▇▇▇") (net proceeds being those proceeds
remaining after paying all expenses incurred in connection with the issuance of
the Bonds, together with investment earnings on such net proceeds earned prior
to the "Completion Date" (defined in the Agreement)), have been used to acquire
land or property of a character subject to the allowance for depreciation under
Section 167 of the Internal Revenue Code of 1954, as amended, and such costs
representing proceeds so used are properly chargeable to the capital account of
the Company for Federal income tax purposes or would be so chargeable
71
either with a proper election by the Company or but for a proper election by the
Company to deduct the costs.
5. A certificate of occupancy and all other permissions required of
governmental authorities for the occupancy of the Facilities have been obtained.
This Certificate is given without prejudice to any rights against third
parties which exist on the date of this Certificate or which may subsequently
come into being.
This ______ the day of ______________, 1985.
RADIATION STERILIZERS,
INCORPORATED
By :
Authorized Company Representative