Loan Agreement between Rapides Finance Authority and Cleco Power LLC Dated as of November 1, 2007
between
Rapides
Finance Authority
and
Cleco
Power LLC
Dated
as of November 1, 2007
$60,000,000
Rapides
Finance Authority
Revenue
Bonds
(Cleco
Power LLC Project)
Series
2007
Table
of Contents
|
ARTICLE
I
DEFINITIONS
AND INTERPRETATIONS
|
|||
|
SECTION
1.1.
|
Definitions
|
-3-
|
|
|
SECTION
1.2.
|
Interpretations
|
-7-
|
|
|
ARTICLE
II
ACQUISITION
AND CONSTRUCTION OF THE PROJECT
|
|||
|
SECTION
2.1.
|
Acquisition
and Construction of the Project
|
-8-
|
|
|
SECTION
2.2.
|
Completion
|
-8-
|
|
|
ARTICLE
III
SALE
OF THE BONDS; LOAN;
DISPOSITION
OF LOAN PROCEEDS
|
|||
|
SECTION
3.1.
|
Issuance
of the Bonds
|
-9-
|
|
|
SECTION
3.2.
|
Loan
|
-9-
|
|
|
SECTION
3.3.
|
Investment
of Fund Moneys
|
-9-
|
|
|
SECTION
3.4.
|
Redemption
of Bonds
|
-9-
|
|
|
SECTION
3.5.
|
Security
Interests
|
-9-
|
|
|
SECTION
3.6.
|
Disbursements
|
-9-
|
|
|
SECTION
3.7.
|
Completion
|
-10-
|
|
|
ARTICLE
IV
LOAN
PAYMENTS AND OTHER MATTERS
|
|||
|
SECTION
4.1.
|
Loan
Payments; Purchase Price Payments
|
-11-
|
|
|
SECTION
4.2.
|
Bond
Fund
|
-11-
|
|
|
SECTION
4.3.
|
Payments
to Issuer
|
-11-
|
|
|
SECTION
4.4.
|
Payments
to Trustee and Remarketing Agent
|
-12-
|
|
|
SECTION
4.5.
|
Company's
Option to Designate Interest Rate Determination Methods
|
-12-
|
|
|
SECTION
4.6.
|
Purchase
of Bonds
|
-12-
|
|
|
SECTION
4.7.
|
Reimbursement
of Bond Insurer Expenses
|
-13-
|
|
|
SECTION
4.8.
|
Excess
Funds
|
-13-
|
|
|
SECTION
4.9.
|
Nature
of Obligations of the Company
|
-13-
|
|
|
SECTION
4.10.
|
Company
Obligations Under the Indenture
|
-14-
|
|
|
ARTICLE
V
MAINTENANCE,
INSURANCE, MODIFICATIONS AND ABANDONMENT
|
|||
|
SECTION
5.1.
|
Maintenance
and Insurance
|
-15-
|
|
|
SECTION
5.2.
|
Modifications
|
-15-
|
|
|
SECTION
5.3.
|
Issuer
Relieved from Responsibility to Maintain Project
|
-15-
|
|
-i-
|
ARTICLE
VI
CASUALTY
AND CONDEMNATION
|
||
|
SECTION
6.1.
|
Casualty
or Condemnation of the Project
|
-16-
|
|
SECTION
6.2.
|
Effect
of Casualty or Condemnation
|
-16-
|
|
SECTION
6.3.
|
Cooperation;
Sale in Lieu of Condemnation
|
-16-
|
|
ARTICLE
VII
PREPAYMENT
OF LOAN PAYMENTS
|
||
|
SECTION
7.1.
|
Prepayment
and Payment of Loan
|
-17-
|
|
SECTION
7.2.
|
Mandatory
Acceleration of Loan Payments; Preservation of Tax Status
|
-17-
|
|
ARTICLE
VIII
SPECIAL
REPRESENTATIONS AND COVENANTS
|
||
|
SECTION
8.1.
|
Indemnification
|
-18-
|
|
SECTION
8.2.
|
Representations
of the Company
|
-19-
|
|
SECTION
8.3.
|
Filing
|
-19-
|
|
SECTION
8.4.
|
Representations
and Covenants of the Issuer
|
-20-
|
|
SECTION
8.5.
|
Removal
of Liens
|
-20-
|
|
SECTION
8.6.
|
Special
Covenants
|
-20-
|
|
SECTION
8.7.
|
Bonds
are Limited Obligations
|
-20-
|
|
SECTION
8.8.
|
Net
Agreement
|
-21-
|
|
SECTION
8.9.
|
No
Warranty of the Project
|
-21-
|
|
SECTION
8.10.
|
Reserved
|
-21-
|
|
SECTION
8.11.
|
Representations
Regarding the Project
|
-21-
|
|
SECTION
8.12.
|
Tax
Representations and Covenants
|
-21-
|
|
SECTION
8.13.
|
Financial
Information
|
-24-
|
|
ARTICLE
IX
ASSIGNMENT
|
||
|
SECTION
9.1.
|
Consolidation,
Merger and Assignment by the Company
|
-26-
|
|
SECTION
9.2.
|
Issuer's
Rights of Assignment
|
-26-
|
|
ARTICLE
X
EVENTS
OF DEFAULT AND REMEDIES
|
||
|
SECTION
10.1.
|
Enumeration
of "Events of Default"
|
-27-
|
|
SECTION
10.2.
|
Remedies
|
-27-
|
|
SECTION
10.3.
|
No
Remedy Exclusive
|
-28-
|
|
SECTION
10.4.
|
Agreement
to Pay Attorneys' Fees and Expenses
|
-28-
|
-ii-
|
ARTICLE
XI
GENERAL
|
||
|
SECTION
11.1.
|
Force
Majeure
|
-29-
|
|
SECTION
11.2.
|
Waiver
of Rights
|
-29-
|
|
SECTION
11.3.
|
Notices
|
-29-
|
|
SECTION
11.5.
|
Term
of Agreement
|
-31-
|
|
SECTION
11.6.
|
Company's
Approval of Indenture
|
-31-
|
|
SECTION
11.7.
|
Auction
Rate Requirement
|
-31-
|
|
SECTION
11.8.
|
Third
Party Beneficiaries
|
-31-
|
|
EXHIBIT
A
|
Description
of the Project
|
|
|
EXHIBIT
B
|
Description
of the Site
|
|
|
EXHIBIT
C
|
Form
of Note
|
|
|
EXHIBIT
D
|
Form
of Completion Certificate
|
|
-iii-
This
Loan
Agreement
dated as of November 1, 2007 (together with any amendments or supplements
hereto, this "Agreement"), is by and between the Rapides Finance
Authority (the "Issuer"), a public trust and public corporation
established for public purposes for the benefit of the State of Louisiana (the
"State") by a certain Trust Indenture dated December 14, 1978, as amended on
December 9, 1991, December 20, 1994 and April 18, 1995, and created and existing
under and pursuant to the Louisiana Public Trust Act, being Chapter 2-A of
Title
9 of the Louisiana Revised Statutes of 1950, as amended (the "Act"), and
Cleco Power LLC, a Louisiana limited liability company
(together with any permitted successors or assigns under this Agreement, the
"Company").
W
i t n e s s e t h :
WHEREAS,
Issuer is a public trust and
public corporation of the State of Louisiana (the "State") created and existing
pursuant to the provisions of the Act, and is authorized and empowered by the
Act to issue its revenue bonds and use the funds derived from the sale thereof
for the purpose of acquiring, constructing, purchasing, equipping, maintaining,
installing, leasing, subleasing, holding, extending, enlarging, remodeling,
storing, operating, repairing and administering liquid and solid waste disposal,
collection, treatment and drainage facilities and services, antipollution and
air, water, ground and subsurface pollution abatement and control facilities
and
activities; and
WHEREAS,
the Company has requested that
the Issuer issue its revenue bonds for the purpose of acquiring, constructing
and installing a plant, equipment and other facilities for use as solid waste
disposal facilities, recycling facilities, resource recovery facilities or
industrial sewage and wastewater treatment facilities at the Company's solid
fuel power plant to be located in Boyce, Rapides Parish, Louisiana (the
"Project") and paying the costs of issuance of the Bonds, through the issuance
by the Authority of $60,000,000 aggregate principal amount of Rapides Finance
Authority Revenue Bonds (Cleco Power LLC Project) Series 2007 (the "Bonds"),
pursuant to an Indenture of Trust (the "Indenture") between the Issuer and
The
Bank of New York Trust Company, N.A., as trustee (the “Trustee”), the proceeds
of which Bonds are to be loaned to the Company pursuant to this Agreement;
and
WHEREAS,
the Issuer has determined,
based upon representations of the Company, that the issuance of the Bonds to
finance the cost of the Project will be in furtherance of the public purposes
of
the Act; and
WHEREAS,
the Issuer proposes hereby to
lend the proceeds of the Bonds to the Company and the Company desires to borrow
the proceeds of the Bonds upon the terms and conditions set forth herein and
use
the proceeds to finance the cost of the acquisition, construction and
improvement of the Project for the purposes of the Act; and
WHEREAS,
pursuant to this Agreement,
the Company will agree to make payments in an amount sufficient to make timely
payments of principal of, premium, if any, and interest on the Bonds and to
pay
such other amounts as are required by this Agreement;
NOW,
THEREFORE, in consideration of the
premises and other good and valuable consideration and the mutual benefits,
covenants and agreements herein expressed, the Issuer and the Company agree
as
follows (provided that any obligation of the Issuer created by or arising out
of
this Agreement shall not impose a debt or pecuniary liability upon the State
or
any political subdivision thereof, or a charge upon the general credit or taxing
powers of such bodies, but shall be payable solely out of the revenues and
receipts derived pursuant to this Agreement and, to the extent provided in
this
Agreement, out of the proceeds of the
-1-
sale
of
the Bonds and any temporary investment thereof and any insurance and
condemnation awards as herein provided).
-2-
ARTICLE
I
DEFINITIONS
AND INTERPRETATIONS
SECTION
1.1. Definitions. The
following terms shall have the meanings assigned to them below whenever they
are
used in this Agreement, unless the context clearly otherwise
requires. Except where the context otherwise requires, words
imparting the singular number shall include the plural number and vice
versa. Capitalized terms used but not otherwise defined herein shall
have the meanings assigned such terms in the Indenture or in the form of the
Bonds attached thereto.
"Act"
means Chapter
2-A of Title 9 of the Louisiana Revised Statutes of 1950, as amended, and all
future acts supplemental thereto and amendatory thereof.
"Affiliate"
is defined
in the Indenture.
"Agreement"
means this
Loan Agreement dated as of November 1, 2007 between the Issuer and the
Company.
"Authorized
Company
Representative" is defined in the Indenture.
"Authorized
Issuer
Representative" is defined in the Indenture.
"Bank"
is defined in
the Indenture.
"Bond
Documents" means
the Financing Documents and all other agreements, certificates, documents and
instruments ever delivered in connection with any of the Financing
Documents.
"Bond
Fund" is defined
in the Indenture.
"Bond
Insurance
Policy" means the municipal bond new issue insurance policy issued by
the Bond Insurer that guarantees payment of principal of and interest on the
Bonds.
"Bond
Insurer" means
Financial Guaranty Insurance Company, a New York stock insurance company, or
any
successor thereto.
"Bondholder"
or
"holder" is defined in the Indenture.
"Bonds"
means the
bonds defined as such in the recitals of this Agreement, which are issued and
delivered pursuant to Article II of the Indenture.
"Business
Day" is defined in the Indenture.
"Claims" is defined in Section 8.1 of this Agreement.
"Code"
means the
Internal Revenue Code of 1986, as amended, from time to time. A
reference to any specific section of the Code shall be deemed also to be a
reference to the comparable provisions of any enactment that supersedes or
replaces the Code.
"Communication"
is
defined in Section 11.3 of this Agreement.
-3-
"Company"
means Cleco
Power LLC, a Louisiana limited liability company, and its successors and
assigns.
"Company
Event of
Bankruptcy" means (a) an order of relief shall be issued by a United
States Bankruptcy Court having valid jurisdiction granting the Company relief
under the provisions of the United States Bankruptcy Code, or any other court
having valid jurisdiction shall issue an order or decree under applicable
federal or state law providing for the appointment of a custodian, receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) of
the
Company or of any substantial part of its property, or ordering the winding
up
or liquidation of its affairs, and the continuance of any such decree or order
unstayed and in effect for a period of sixty (60) consecutive days; or (b)
the
Company shall have consented to the institution of proceedings in bankruptcy
against it, or the Company shall have consented to the institution of any
proceeding against it under any federal or state insolvency laws, or the Company
shall have consented to the filing of any petition, application or complaint
seeking the appointment of a custodian, receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Company or of any substantial
part of its property, or the Company shall have made an assignment for the
benefit of creditors, or the Company shall admit in writing its inability to
pay
its debts as they become due.
"Completion
Date"
means the date the Project has been completed and placed in
service.
"Computation
Date"
means any date selected by the Company pursuant to Section 1.148-3(e) of the
Regulations.
"Construction
Fund" is
defined in the Indenture.
"Event
of Default" or
"Default" is defined in Section 10.1 of this
Agreement.
"Final
Computation
Date" means the last date on which Bonds are outstanding.
"Final
Payment Date"
means the date on which all amounts of Proceeds payable with respect to the
acquisition and construction of the Project have been requisitioned or
transferred from the Construction Fund.
"Financing
Documents"
means this Agreement, the Bonds, the Indenture, the Note, the Remarketing
Agreement, the Reimbursement Agreement and the Pledge and Security
Agreement.
"Force
Majeure" is
defined in Section 11.1 of this Agreement.
“Gross
Proceeds" means
any Proceeds of the Bonds and any Replacement Proceeds for the
Bonds.
"Indemnified
Parties"
means the Issuer, the Trustee, the Paying Agent, and any of their respective
officers, directors, members, trustees, commissioners, attorneys, employees,
agents, servants and any other person acting for or on behalf of the Issuer,
the
Trustee or the Paying Agent.
"Indenture"
means that
certain Indenture of Trust by and between the Issuer and the Trustee dated
as of
the date of this Agreement, together with any amendments or supplements
thereto.
"Inducement
Date"
means November 10, 2005.
"Interest
Payment
Date" means each date upon which an interest payment on the Bonds
becomes due and payable under the Indenture.
-4-
"Investment Proceeds" means any amounts actually or
constructively
received from investing Proceeds of the Bonds.
"Issuance Costs" means costs incurred by or on behalf of the Company in
connection with the making of the Loan by the Issuer to the
Company. The parties hereby express their understanding and agreement
that the sole purpose for the issuance of the Bonds is to enable the making
of
the Loan to the Company in order to effect the public purposes of the Act and
that all costs incurred in connection with the issuance of the Bonds are
incurred incident to the making of such Loan at the request and for the benefit
of the Company and, therefore, are properly chargeable as costs incurred by
or
on behalf of the Company; therefore, such costs include, among others, payment
of financial, legal, accounting and appraisal fees, expenses and disbursements,
the Issuer's fees and expenses attributable to the issuance of the Bonds, the
fee of the State Bond Commission, the cost of printing, engraving and
reproduction services, Rating Service fees, legal fees and expenses for Bond
Counsel, counsel to the Bank, counsel to the Underwriter, Issuer's counsel
and
Trustee's counsel, the initial or acceptance fee of the Trustee, the premium
of
the Bond Insurer, the fees and disbursements of the Trustee payable in
accordance with the Indenture prior to the Completion Date and all other fees,
charges and expenses incurred in connection with the issuance of the Bonds
(including all costs, fees, expenses and other amounts (other than interest,
principal or prepayment premiums on the Bonds) which may be payable by the
Company or the Issuer under any bond purchase agreement or agreements pursuant
to which the Bonds are sold) and the preparation and filing or recording of
any
Bond Document.
"Issue
Date" is defined in the Indenture.
"Issue
Price" means
"issue price" as defined in section 1.148-1(b) of the Regulations and,
generally, is the first price at which a substantial number of Bonds is sold
to
persons other than bond houses, brokers or similar persons or organizations
acting in the capacity of underwriters, placement agents or
wholesalers.
"Issuer"
means the
Rapides Finance Authority, and its successors and assigns.
"Loan"
means the loan
made by the Issuer to the Company under this Agreement.
"Loan
Payments" means
the payments to be made by the Company pursuant to Section 4.1(a) of this
Agreement.
"Losses"
is defined in
Section 8.1 of this Agreement.
"Nonpurpose
Investment" means an investment described in section 1.148-1(b) of the
Regulations as a nonpurpose investment.
"Note"
means the note
issued by the Company to the Issuer evidencing the Loan made on behalf of the
Issuer to the Company under this Agreement, substantially in the form of the
note attached hereto as Exhibit C.
"Opinion
of
Counsel" means
an opinion or
opinions in writing, signed by legal counsel who, unless otherwise specified,
may be counsel to the Company, the Trustee or the Issuer. As to any
factual matters involved in an opinion of counsel, such counsel may rely, to
the
extent that they deem such reliance proper, upon a certificate or certificates
setting forth such matters which have been signed by an official, officer,
general partner or authorized representative of a particular governmental
authority, corporation, firm or other person or entity.
-5-
"Outstanding" when used with respect to the Bonds has the same meaning
as that specified in the Indenture.
"Paying Agent" is defined in the Indenture.
"Person"
is defined in the Indenture.
"Plans and Specifications" means the plans and specifications prepared
for the Project, as the same may be implemented and detailed from time to time
and as the same may be revised from time to time in accordance with this
Agreement, a copy of which is on file with the Company.\
"Principal Office" is defined in the definitions of Trustee, Paying
Agent, and Remarketing Agent in the Indenture.
"Proceeds"
means any
Sale Proceeds and any Investment Proceeds of the Bonds.
"Project"
means the
property and improvements described as such in
Exhibit A.
"Project
Costs" means
the cost of acquisition, construction, reconstruction, improvement and expansion
of the Project, including the cost of the acquisition of all land,
rights-of-way, property rights, easements and interests, the cost of all
machinery and equipment, financing charges, inventory, raw materials and other
supplies, research and development costs, interest prior to and during
construction and for one year after completion of construction whether or not
capitalized, necessary reserve funds, cost of estimates and of engineering
and
legal services, plans, specifications, surveys, estimates of cost and of
revenue, other expenses necessary or incident to determining the feasibility
and
practicability of acquiring, constructing, reconstructing, improving and
expanding the Project, administrative expense and such other expense as may
be
necessary or incident to the acquisition, construction, reconstruction,
improvement and expansion thereof, the placing of the same in operation and
the
financing or refinancing of the Project, including the refunding of any
outstanding obligations, mortgages or advances issued, made or given by any
person for any of the aforementioned costs, and any other cost permitted to
be
paid out of proceeds of the Bonds by the Act; provided, however, that Issuance
Costs are not Project Costs.
"Purchase
Price
Payments" means the payments to be made by the Company pursuant to
Section 4.1(b) of this Agreement.
"Qualifying
Costs"
means the Project Costs that were paid or incurred after the Inducement Date
and
that are incurred for those parts of the Project that constitute "solid waste
disposal facilities" within the meaning of section 142(a)(6) of the Code and
facilities functionally related and subordinate thereto within the meaning
of
sections 1.103-8(a)(3) of the Regulations, and which for federal income tax
purposes are chargeable to the capital account(s) of such items of property
included in the Project or would be so chargeable either with a proper election
or but for a proper election to deduct such Project Costs.
"Rebate
Amount" means
that amount computed in accordance with section 148(f) of the Code and section
1.148-3(b) and 1.148-3(c) of the Regulations as of any Computation Date within
the meaning of section 1.148-3(e) of the Regulations.
"Rebate
Fund" is
defined in the Indenture.
-6-
"Regulations"
means
the applicable proposed, temporary or final Income Tax Regulations promulgated
under the Code, or, to the extent applicable to the Code, under the Internal
Revenue Code of 1986, as such regulations may be amended or supplemented from
time to time.
"Remarketing
Agent"
means ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
"Replacement
Proceeds"
means any amounts described in section 1.148-1(c) of the
Regulations.
"Sale
Proceeds" means,
with respect to the Bonds, any amounts actually or constructively received
from
the sale (or other disposition) of any Bond that is part of the issue, including
amounts used to pay underwriters' discount or compensation and accrued interest
other than pre-issuance accrued interest.
"Site"
means the tract
of land which is described in Exhibit B
hereto.
"State"
means the
State of Louisiana.
"Stated
Maturity" when
used with respect to the Bonds or any installment of interest thereon means
any
date specified therein as the fixed date on which the principal of the Bonds
or
any installment thereof or the fixed date on which such installment of interest
thereon is due and payable.
"Trustee"
means The
Bank of New York Trust Company, N.A., serving as trustee pursuant to the
Indenture, and any successor trustee.
"Unassigned
Rights"
means the rights of the Issuer under Sections 4.3, 8.1 and 10.4 this Agreement
and the right to receive notices hereunder.
"Yield"
means the
yield as determined in accordance with section 148(h) of the Code, and
generally, is the yield which when used in computing the present worth of all
payments of principal and interest to be paid on an obligation produces an
amount equal to the Issue Price of such obligation.
SECTION
1.2. Interpretations
. The table of contents and article and section headings of this
Agreement are for reference purposes only and shall not affect its
interpretation in any respect.
-7-
ARTICLE
II
ACQUISITION
AND CONSTRUCTION OF THE PROJECT
SECTION
2.1. Acquisition
and Construction of the Project . The Company agrees to cause the
Project to be acquired, constructed and installed on the Site substantially
in
accordance with the Plans and Specifications. The Company agrees to
pay all Project Costs which are not or cannot be paid or reimbursed from the
proceeds of the Bonds.
Anything
in this Agreement to the
contrary notwithstanding, the Company shall not be obligated to complete the
acquisition, construction and installation of the Project or any part thereof
upon (i) acceleration of the payment of all amounts to be paid by the Company
pursuant to the provisions of Article VII hereof and (ii) the making of any
such
payment in the amount required by, and in accordance with the terms of, this
Agreement.
SECTION
2.2. Completion
. There shall be no diminution in or postponement of the payments
required in Section 4.1 hereof or any other payment required under this
Agreement to be paid by the Company because of any delay in the completion
of
the Project.
-8-
ARTICLE
III
SALE
OF THE BONDS; LOAN
DISPOSITION
OF LOAN PROCEEDS
SECTION
3.1. Issuance
of the Bonds . The Issuer agrees that immediately following the
delivery of this Agreement, it will execute and deliver the Indenture and issue,
sell and deliver the Bonds in the aggregate principal amount specified by the
Company. The Bonds shall be limited obligations of the Issuer and
shall be payable by the Issuer solely out of the Revenues derived from or in
connection with the Note and this Agreement. The Bonds shall never be
payable out of any other funds of the Issuer except such
Revenues. The Company agrees to pay all Issuance Costs not otherwise
paid from the Construction Fund in accordance with Section 3.6(b), promptly
following demand therefor (including without limitation all out-of-pocket
expenses and costs of issuance reasonably incurred by the Issuer in connection
with the issuance of the Bonds), and to make such payments in compliance with
Section 8.12 of this Agreement.
SECTION
3.2. Loan
. The proceeds of the sale of the Bonds which are deposited into the
Construction Fund pursuant to Section 6.2 of the Indenture are hereby lent
by
the Issuer to the Company. The Loan shall be evidenced by the
Company's creation and issuance of the Note, dated as of the date of the Bonds
and payable to the order of the Issuer.
SECTION
3.3. Investment
of Fund Moneys . The Issuer hereby authorizes the Company to
prepare and provide instructions to the Trustee as to the investment and
reinvestment of moneys held as part of any fund under the Indenture ("Fund"),
subject to the limitations specified in the Indenture.
SECTION
3.4. Redemption
of Bonds . The Issuer agrees that, at the request at any time of
the Company and if permitted by the Indenture, it will, at its option, forthwith
take all steps that may be necessary under the applicable redemption provisions
of the Indenture to effect redemption of all or part of the then outstanding
Bonds, as may be specified by the Company, on the redemption date designated
by
the Company and on which such redemption may be made under such applicable
provisions, and if for any reason the Issuer shall fail promptly to take such
steps upon the request of the Company, the Company may, to the extent permitted
by law, take such steps on behalf and in the name of the Issuer.
SECTION
3.5. Security
Interests . The Company acknowledges and consents to the Issuer's
grant of security interest to the Trustee in all amounts at any time deposited
in any Fund established under the Indenture (other than the Rebate Fund),
including all investments and reinvestments made with such amounts and the
proceeds thereof. The Company hereby authorizes and directs the
Trustee to hold such amounts, investments, reinvestments and proceeds, and
to
invest and disburse such amounts and proceeds in accordance with the Indenture
and this Agreement. The Company shall not direct the Trustee to make
any investments or reinvestments other than those permitted by law, the
Indenture and this Agreement.
SECTION
3.6. Disbursements
. (a) Except as provided in the Indenture in case of
acceleration of maturity of the Bonds, the Trustee shall disburse the money
in
the Construction Fund in accordance with this Section.
(b)
The Trustee shall disburse (or
transfer to the Bond Fund) amounts in the Construction Fund to pay Project
Costs
with respect to the Project or Issuance Costs upon receipt of a Disbursement
Request in substantially the form of Exhibit B to the Indenture signed by an
Authorized Company Representative stating: (i) the requisition number, amount
to
be paid, the name of the Person to whom payment is to be made and a Project
Costs description; (ii) that there has been expended, or is being expended
concurrently with the delivery of such certificate (or in the case of interest
which the Trustee is directed to transfer to the Bond
-9-
Fund after the Completion Date, will be expended within one year following
the Completion Date), an amount on account of Project Costs or Issuance
Costs at
least equal to the amount set forth in such certificate; (iii) that no
other
certificate in respect of such expenditure is being or previously has been
delivered to the Trustee; (iv) that at least 95% of the total of all amounts
previously disbursed plus the amount requested by such certificate to be
disbursed from the Construction Fund have been and will be used to pay
Qualifying Costs of the Project; and (v) the sum of the amount of such
requisition in respect of Issuance Costs, if any, plus amounts previously
paid
for Issuance Costs, does not exceed 2% of the amount of the Sale
Proceeds.
(c)
Concurrently with the delivery of
the certificate required under Section 3.7 of this Agreement, the Company shall
direct the Trustee in writing to transfer any amounts then on deposit in the
Construction Fund (other than the retainage described in clause (iii) of Section
3.7 if the Final Payment Date has not occurred) to the Bond Fund to be used
(i)
to redeem Bonds pursuant to Article X of the Indenture on the first date the
Bonds are subject to redemption at a price of par plus accrued interest or
(ii)
to purchase Bonds on the open market for cancellation.
SECTION
3.4. Completion
. Immediately after the Completion Date (and immediately after the
Final Payment Date if such dates are not the same), and after requesting
pursuant to Section 3.6 any amounts then permitted to be disbursed thereunder,
the Company shall deliver to the Trustee a certificate (the "Completion
Certificate") in substantially the form of Exhibit D hereto signed by an
Authorized Company Representative certifying: (i) as appropriate, (A)
that as of the Completion Date specified in the certificate the Project has
been
completed and placed in service, or (B) that the Final Payment Date has
occurred; (ii) the amount of Proceeds expended for Qualifying Costs, for Project
Costs that were not Qualifying Costs and for Issuance Costs; and (iii) if such
certificate is delivered prior to the Final Payment Date, the amount which
the
Trustee is to retain in the Construction Fund for payment of amounts then
subject to dispute or not then due.
-10-
ARTICLE
IV
LOAN
PAYMENTS AND OTHER MATTERS
SECTION
4.1. Loan
Payments; Purchase Price Payments . (a) To repay the
Loan evidenced by the Note, the Company shall make or cause to be made Loan
Payments in installments, so as to provide amounts for the timely payment of
the
principal of, premium, if any, and interest on the Bonds in the amounts and
at
or before the opening of business on the dates as follows: (i) on each Interest
Payment Date, an aggregate amount equal to the sum of (x) the accrued interest
coming due on such date on all outstanding Bonds, plus (y) the principal amount
of all outstanding Bonds maturing on such date; (ii) on each date on which
any
of the Bonds are to be redeemed, the principal amount of, and premium, if any,
and interest (including interest accrued or to be accrued to such date) on
the
Bonds to be redeemed on such date in accordance with the provisions of the
Indenture; and (iii) on any date on which all the Bonds shall be declared to
be
and shall become due and payable prior to their Stated Maturity pursuant to
the
provisions of the Indenture, the aggregate amount of principal, premium, if
any,
and interest so becoming due and payable on all the Bonds in accordance with
the
terms of the Indenture. Any amount in cash held in or concurrently
paid to the Bond Fund or otherwise held by the Trustee which may, pursuant
to
the provisions of the Indenture, be applied to the payment of the principal
of
and interest and premium, if any, on the Bonds and which is in excess of the
amount, if any, required for payment of any past due principal of (whether
by
maturity or redemption) and premium, if any, on any Bonds theretofore matured
or
called for redemption and any past due interest, if any, on the Bonds shall
be
credited against the installment of the Loan Payments then required to be made
by the Company. If on any date of payment referred to in clause (i),
(ii) or (iii) of this Section 4.1(a), the amount in cash held in the Bond Fund
or otherwise held by the Trustee and available in accordance with the provisions
of the Indenture for the payment of the principal of and interest and premium,
if any, on the Bonds shall not be sufficient to pay all principal, interest
and
premium, if any, then due or overdue, the Company forthwith shall also pay
the
amount of such deficiency on such date to the Trustee in immediately available
funds.
(b)
The Company will pay to the Paying
Agent for deposit in the Bond Purchase Fund, on or before 2:30 p.m., New York
City time, on each day on which a payment of purchase price of a Bond which
has
been tendered for optional or mandatory purchase shall become due, an amount
which, together with other moneys held by the Paying Agent under the Indenture
and available therefor, will enable the Paying Agent to make such payment in
full in a timely manner.
SECTION
4.2. Bond
Fund . The Company shall pay the Loan Payments required of it
under this Agreement by remitting or causing to be remitted the same directly
to
the Trustee for deposit in the Bond Fund which is to be established under the
Indenture and administered by the Trustee as provided in the
Indenture.
SECTION
4.3. Payments
to Issuer . Out of money from the proceeds from the sale and
delivery of the Bonds or out of funds provided by the Company, there shall
be
paid (i) all of the Issuer's reasonable actual out-of-pocket expenses and
Issuance Costs in connection with the Bonds, and (ii) on the Issue Date, an
issuance fee in the amount of $15,000. The Company agrees to make
administrative payments directly to the Issuer on June 1 of each year in an
amount equal to 1/10th of 1% of the outstanding Bonds on January 1 of each
year,
if billed by the Issuer. The administrative payments shall be used
for the purpose of paying administrative and related costs of the Issuer, but
shall not include Trustee fees or expenses incurred by the Issuer in enforcing
the provisions of this Agreement. The Issuer agrees that it will bill
the Company by March 15 of each year if it imposes such administrative payments
for such year, and such bill shall advise the Company of the amount that is
to
be paid (not to exceed 1/10 of 1% per annum), the date on which payment is
due,
and where such payment is to be remitted. In the event the Company
should fail to pay such
-11-
administrative expenses then due, the payment shall continue as an
obligation of the Company until the amount shall have been fully paid,
and the
Company agrees to pay the same with interest thereon (to the extent legally
enforceable) at a rate per annum equal to the interest rate in effect from
time
to time on the Bonds, until paid.
SECTION
4.4. Payments
to Trustee and Remarketing Agent . (a) The Company
agrees to pay (i) the initial acceptance fee of the Trustee and reasonable
costs
and expenses incurred by the Trustee in entering into and executing the
Indenture and (ii) until the principal of, premium, if any, and interest on
the
Bonds shall have been fully paid or provision for the payment thereof shall
have
been made in accordance with the provisions of the Indenture, (A) an amount
equal to the annual fee of the Trustee for the ordinary services of the Trustee,
as trustee, rendered and its reasonable ordinary expenses incurred under the
Indenture, including reasonable attorneys fees and expenses, as and when the
same become due, (B) the fees, charges and expenses of the Trustee, as bond
registrar and as Paying Agent, and any other bond registrar or Paying Agent
on
the Bonds, as and when the same become due, (C) the reasonable fees, charges
and
expenses of the Trustee for the necessary extraordinary services rendered by
it
and extraordinary expenses incurred by it under the Indenture or this Agreement,
as and when the same become due, including reasonable attorneys fees and
expenses, (D) the reasonable fees and expenses of any co-trustee appointed
under
the Indenture, and (E) the cost of printing any Bonds required to be furnished
by the Issuer. In the event the Company should fail to make any of
the payments required in this Section 4.4, the item or installments shall accrue
interest at the prime rate of the Trustee (or its primary banking affiliate)
and
shall continue as an obligation of the Company until the amount shall have
been
fully paid.
(b)
The Company agrees to pay to the
Remarketing Agent as set forth in the Remarketing Agreement, until the principal
of, premium, if any, and interest on the Bonds shall have been fully paid or
provision for the payment thereof shall have been made in accordance with the
provisions of the Indenture and provided that they are providing services as
Remarketing Agent, (i) an amount equal to the reasonable annual fee of the
Remarketing Agent for the ordinary services of the Remarketing Agent rendered
and its reasonable ordinary expenses incurred under the Indenture and the
Remarketing Agreement, as and when the same become due, and (ii) the reasonable
fees, charges and expenses of the Remarketing Agent for the necessary
extraordinary services rendered by it and extraordinary expenses incurred by
it
under the Indenture and the Remarketing Agreement, as and when the same become
due, including reasonable attorneys fees. In the event the Company
shall fail to make any of the payments required in this Section, the item or
installments shall continue as an obligation of the Company until the amount
shall have been fully paid.
SECTION
4.5. Company's
Option to Designate Interest Rate Determination Methods . The
Company is hereby granted the option to designate from time to time changes
in
interest rate determination methods in the manner and to the extent set forth
in
Section 3.3 of the Indenture. In the event the Company elects to
exercise any such option, the Company agrees that it shall cause notices of
changes in interest rate determination methods to be given to the Issuer, the
Trustee, the Bank, if any, the Bond Insurer and the Remarketing Agent in
accordance with Section 3.3(b) of the Indenture.
SECTION
4.6. Purchase
of Bonds . (a) The Company shall cause the necessary
arrangements to be made and to be thereafter continued whereby owners from
time
to time of the Bonds may deliver Bonds for purchase and whereby such Bonds
shall
be so purchased. In furtherance of the foregoing covenant of the
Company, the Issuer, at the direction of the Company, has set forth in Article
V
of the Indenture the terms and conditions relating to the delivery of Bonds
by
the registered holders thereof to the Remarketing Agent for purchase and has
set
forth in the Indenture or the Remarketing Agreement the duties and
responsibilities of the Remarketing Agent with respect to the purchase and
remarketing of Bonds. The Company hereby authorizes and directs the
Remarketing Agent to purchase, offer, sell, and deliver Bonds in accordance
with
the provisions of Article V of the Indenture.
-12-
Without
limiting the generality
of the foregoing covenant of the Company, the Company covenants, for the
benefit
of the owners of the Bonds, to pay, or cause to be paid, to the Trustee such
amounts as shall be necessary to enable the Paying Agent to pay the Purchase
Price of the Bonds delivered to it for purchase or deemed delivered for
purchase, all as more particularly described, in the Indenture; provided,
however, that the obligation of the Company to make, or cause to be made,
any
such payment hereunder shall be satisfied only, in order of priority, first,
by
funds received by the Paying Agent from the remarketing of the Bonds by the
Remarketing Agent, second, in the event sufficient funds are not available
from
such remarketing, from draws upon the Credit Facility, if any, and third,
from
funds provided by the Company.
(b)
The Issuer shall have no obligation
or responsibility, financial or otherwise, with respect to the purchase of
Bonds
or the making or continuation of arrangements therefor other than as expressly
set forth in subsection (a) of this Section 4.6, except that the Issuer shall
generally cooperate with the Company and the Remarketing Agent as contemplated
by the Indenture.
SECTION
4.7. Reimbursement
of Bond Insurer Expenses . The Company shall pay or reimburse the
Bond Insurer for any and all charges, fees, costs, and expenses that the Bond
Insurer may reasonably pay or incur in connection with the following: (i) the
administration, enforcement, defense, or preservation of any rights or security
hereunder or under any other transaction document; (ii) the pursuit of any
remedies hereunder, under any other transaction document, or otherwise afforded
by law or equity; (iii) any amendment, waiver, or other action with respect
to
or related to this Agreement or any other transaction document whether or not
executed or completed; (iv) the violation by the Company of any law, rule,
or
regulation or any judgment, order or decree applicable to it; (v) any advances
or payments made by the Bond Insurer to cure defaults of the Company under
the
transaction documents; or (vi) any litigation or other dispute in connection
with this Agreement, any other transaction document, or the transactions
contemplated hereby or thereby, other than amounts resulting from the failure
of
the Bond Insurer to honor its payment obligations under the Bond Insurance
Policy. The Bond Insurer reserves the right to charge a reasonable
fee as a condition to executing any amendment, waiver, or consent proposed
in
respect of the Indenture, this Agreement or any other transaction
document. The obligations of the Company to the Bond Insurer shall
survive discharge and termination of the Indenture and this
Agreement.
SECTION
4.8. Excess
Funds . After all of the Bonds have been retired and all interest
and applicable premiums, if any, due thereon have been paid or provision for
such retirement and payment has been made, and all compensation and expenses
of
the Trustee and any Paying Agent have been paid as set forth in any of the
Financing Documents or provision for such payment has been made, any excess
moneys remaining in the Bond Fund and the Construction Fund shall forthwith
be
paid by the Trustee to the Company in the manner prescribed respectively, by
Sections 6.4 and 7.4 of the Indenture.
SECTION
4.9. Nature
of Obligations of the Company . Until all of the Bonds shall be
deemed to have been paid within the meaning of Section 17.1 of the Indenture,
the obligations of the Company to pay the Loan Payments and Purchase Price
Payments as provided in this Agreement and to make or cause to be made all
other
payments required herein shall be absolute and unconditional, irrespective
of
any rights of set-off, recoupment or counterclaim the Company might otherwise
have against the Issuer, the Trustee or any other Person or Persons, and the
Company will not suspend or discontinue any such payment or (except in
accordance with Article VII of this Agreement) terminate this Agreement for
any
cause including, without limiting the generality of the foregoing, any event
constituting force majeure, any acts or circumstances that may constitute an
eviction or constructive eviction, failure of consideration, failure of title,
or commercial frustration of purpose, or any damage to or destruction of all
or
part of the Project, or the failure to obtain any permit or order from any
governmental agency which is required to be obtained in connection with the
operation of the Project or the taking or condemnation of title to or the use
or
possession of all or any part
-13-
of the Project, or any change in the laws of the United States, or
any
state, or any political subdivision thereof, or any failure of the Issuer
to
perform and observe any agreement or covenant, whether express or implied,
or to
discharge any duty, liability or obligation arising out of or connected
with
this Agreement or any other agreement between the Company and the
Issuer. The preceding sentence shall not be construed to release the
Issuer from the performance of any of its obligations contained in this
Agreement, or except to the extent provided in this Section, prevent or
restrict
the Company from asserting any rights which it may have against the Issuer,
the
Trustee or any other persons under this Agreement or under any provision
of law
or prevent or restrict the Company, at its own cost and expense, from
prosecuting or defending any action or proceeding against or by third parties
or
taking any other action to secure or protect its rights of purchase,
acquisition, possession and use of the Project and its rights under this
Agreement.
SECTION
4.10. Company Obligations
Under the Indenture . The Company agrees that it will perform all
obligations imposed on the Company under the Indenture.
-14-
ARTICLE
V
MAINTENANCE,
INSURANCE, MODIFICATIONS AND ABANDONMENT
SECTION 5.1.
Maintenance and Insurance . Subject to the other provisions of
this Agreement, the Company shall not be required to maintain, repair or replace
any portion of the Project, but may from time to time do any and all of the
foregoing as it, in its sole discretion, shall deem appropriate. The
Company shall provide (including through self-insurance) for such insurance
coverage including assumption of the risk of damage or destruction as is
customarily carried by Persons engaged in the same business as and having the
financial capability of the Company with respect to operating facilities like
the facilities that comprise the Project.
SECTION
5.2. Modifications
. Subject to the provisions of Sections 8.11 and 8.12 of this
Agreement, the Company shall have the right to remodel or alter the Project,
make substitutions, additions and improvements thereto and abandon or remove
any
part thereof, all as the Company, in its sole discretion, may deem to be
desirable.
SECTION
5.3. Issuer
Relieved from Responsibility to Maintain Project . The Company
and the Issuer hereby expressly acknowledge and agree that the Issuer is under
no responsibility to maintain, operate or repair the Project and the Company
expressly relieves the Issuer from any such responsibility.
-15-
ARTICLE
VI
CASUALTY
AND CONDEMNATION
SECTION
6.1. Casualty or
Condemnation of the Project . If (a) any material damage or
destruction of the Project or any portion thereof shall occur or (b) title
to or
the temporary use of any portion of the Project shall be taken in any
condemnation proceedings or by the exercise of the power of eminent domain
by
any governmental body or by any person acting under governmental authority,
the
Company shall (i) in its sole judgment, restore or not restore the Project
or
portions thereof so damaged, destroyed or condemned, (ii) be entitled to dispose
of the proceeds of any such insurance or condemnation awards in any manner
it
deems proper, and (iii) not be obligated to notify the Issuer with respect
to
such actions.
SECTION
6.2. Effect
of Casualty or Condemnation . The occurrence of a casualty or
condemnation shall not entitle the Company to any abatement, postponement or
reduction in the amount of the Loan Payments or Purchase Price Payments payable
under this Agreement and the Company hereby waives the benefits and provisions
of all laws and rights which, by reason of the casualty or condemnation, might
relieve the Company from any of its obligations under this
Agreement.
SECTION
6.3. Cooperation;
Sale in Lieu of Condemnation . The Issuer agrees that, if and to
the extent that the Company may request, it will cooperate with the Company
at
the expense of the Company in all matters relating to any casualty to or
condemnation of all or any part of the Project and to this end the Issuer hereby
authorizes the Company to take any and all action, in its own name or in the
name of the Issuer as the Company may elect, which the Issuer could take in
respect of such matters.
-16-
ARTICLE
VII
PREPAYMENT
OF LOAN PAYMENTS
SECTION
7.1. Prepayment
and Payment of Loan . The Company may at any time deliver moneys
and/or Governmental Obligations to the Trustee with instructions to the Trustee
to hold such moneys and/or Governmental Obligations in the special segregated
fund referred to in Section 17.1 of the Indenture in connection with a discharge
of the Indenture.
No
payment of or on account of the Loan Payments need be made during the term
of
this Agreement or thereafter when and so long as the amount in the Bond Fund,
together with any other amounts then held by the Trustee and available for
the
purpose, is sufficient to retire all of the Bonds then outstanding in accordance
with the Indenture, including any applicable redemption premium on such Bonds
and the amount of interest due and thereafter to become due on the Bonds on
and
prior to such retirement. However, if, subsequent to a date on which
the Company is not obligated to pay the Loan Payments or any installment thereof
pursuant to the preceding sentence, losses (net of gains) shall be incurred
in
respect of the investments in the Bond Fund and such net losses or any other
event shall have reduced the amounts in the Bond Fund, together with any other
amounts then held by the Trustee and available for the purpose, below the amount
sufficient at the time of such occurrence or other event to redeem or pay,
in
accordance with the provisions of the Indenture, on the next date on which
redemption or payment is to be effected, the principal amount of the Bonds,
and
the amount of interest and premium, if any, due or to become due on the Bonds
on
and prior to such redemption or payment, the Trustee shall notify the Company
of
such fact and thereafter, the Company, as and when required for purposes of
such
Bond Fund, shall pay to the Trustee for deposit in the Bond Fund the amount
of
any such reduction below such sufficient amount.
SECTION
7.2. Mandatory
Acceleration of Loan Payments; Preservation of Tax Status . The
Company covenants that it will not take any action or omit to take any action
required under this Agreement, the Code and the Regulations, as applicable,
which act or omission will cause the interest paid on the Bonds to become
includable in the gross income of the holders thereof for federal income tax
purposes. The payment of the Loan Payments shall be accelerated, in
whole or in part, upon the mandatory redemption of the Bonds as provided in
Section 10.1(b) of the Indenture.
The
provisions of this Section 7.2
shall be deemed a separate and independent covenant for the benefit of the
holders of the Bonds. Acceleration pursuant to this Section 7.2 shall
not limit or discharge any remaining obligations which the Company may
have.
-17-
ARTICLE
VIII
SPECIAL
REPRESENTATIONS AND COVENANTS
SECTION
8.1. Indemnification
. The Company agrees that it will at all times indemnify and hold
harmless each of the Indemnified Parties against any and all losses, costs,
damages, expenses and liabilities (collectively herein called "Losses") of
whatsoever nature (including but not limited to reasonable attorney's fees
and
expenses, the reasonable allocated costs and expenses of in-house counsel,
litigation and court costs, amounts paid in settlement and amounts paid to
discharge judgments) directly or indirectly resulting from, arising out of,
or
related to one or more Claims, as hereinafter defined, even if such Losses
or
Claims, or both, directly or indirectly result from, arise out of or relate
to
or are asserted to have resulted from, arisen out of, or related to, in whole
or
in part, one or more negligent or grossly negligent acts or omissions of the
Indemnified Parties (except for the Trustee and the Paying Agent, which will
be
liable for their own negligent and grossly negligent acts and omissions unless
the Trustee or Paying Agent was acting in accordance with a direction upon
which
it is entitled to rely under the Financing Documents, in which event this
exception shall not apply) in connection with the issuance of the Bonds, arising
out of or in connection with the execution and performance of the Financing
Documents, or in connection with the Project. The term "Claims" as
used herein shall mean all claims, lawsuits, Internal Revenue Service audits
in
connection with the Bonds, causes of action and other legal actions and
proceedings of whatsoever nature, including but not limited to claims, lawsuits,
causes of action and other legal actions and proceedings, involving bodily
or
personal injury or death of any person or damage to any property (including
but
not limited to persons employed by the Issuer, the Trustee, the Company, the
Paying Agent or any other Person and all property owned or claimed by any
Indemnified Party, the Company, any affiliate of the Company or any other
Person) or involving damages relating to the issuance, offering, sale or
delivery of the Bonds brought against any Indemnified Party or to which any
Indemnified Party is a party, even if groundless, false or fraudulent, that
directly or indirectly result from, arise out of, or relate to the design,
construction, installation, operation, use, occupancy, maintenance or ownership
of the Project or any part thereof or from the issuance, offering, sale or
delivery of the Bonds, and including but not limited to all claims for
indemnification of the Trustee arising out of or in connection with the
performance of any of its powers or duties under and in accordance with the
terms of the Indenture or any of the other Financing
Documents. Without limiting the generality of the foregoing, the term
"Claims" shall include Claims brought under federal or state environmental
or
hazardous materials laws. The obligations of the Company under this
Section 8.1 shall apply to all Losses or Claims, or both, that result from,
arise out of, or are related to any event, occurrence, condition or relationship
prior to termination of this Agreement, whether such Losses or Claims, or both,
are asserted prior to termination of this Agreement or
thereafter. The obligations of the Company under this Section 8.1
shall not be affected by any assignment or other transfer by the Issuer of
its
rights, titles or interests under this Agreement to the Trustee pursuant to
the
Indenture or the resignation or removal of the Trustee for any reason, or the
termination of the Financing Documents or the payment or defeasance of the
Bonds
and will continue to inure to the benefit of the Indemnified Party both prior
to
and after any such assignment or transfer or resignation or
removal. None of the Indemnified Parties will be liable to the
Company for, and the Company hereby releases each of them from all liability
to
the Company for, all injuries, damages or destruction of all or any part or
parts of any property owned or claimed by the Company that directly or
indirectly result from, arise out of or relate to the design, construction,
operation, use, occupancy, maintenance or ownership of the Project or any part
thereof, even if such injuries, damages or destruction directly or indirectly
result from, arise out of or relate to, in whole or in part, one or more
negligent or grossly negligent acts or omissions of the Indemnified Parties
in
connection with the issuance of the Bonds, in connection with the execution
and
performance of the Financing Documents or in connection with the
Project. Each Indemnified Party, as appropriate, shall reimburse the
Company for payments made by the Company pursuant to this Section 8.1 to the
extent of any proceeds, net of all expenses of collection, actually received
by
them from any insurance with respect to the loss sustained. Each
Indemnified Party may, but shall not have the duty to claim any such
-18-
insurance proceeds and, to the extent of any such claim, such Indemnified
Party shall assign its rights to such proceeds, to the extent of such required
reimbursement, to the Company. In case any action shall be brought or
to the knowledge of any Indemnified Party threatened against any of them
in
respect of which indemnity may be sought against the Company, the Indemnified
Party shall promptly notify the Company in writing and the Company shall
have
the right to assume the investigation and defense thereof including the
employment of counsel and the payment of all expenses. The Company
shall not settle any such case without the consent of the affected Indemnified
Party, which consent shall not be unreasonably withheld. The
Indemnified Party shall have the right to employ separate counsel in any
such
action and participate in the investigation and defense thereof, but the
fees
and expenses of such counsel shall be paid by the Indemnified Party unless
(a)
the employment of such counsel has been specifically authorized by the Company,
in writing, or (b) the Company has failed to assume the defense and to employ
counsel or (c) the named parties to any such action (including any impleaded
parties) include both an Indemnified Party and the Company, and said Indemnified
Party shall have been advised by its counsel that there may be one or more
legal
defenses available to it which are different from or additional to those
available to the Company (in which case, if the Indemnified Party notifies
the
Company in writing that it elects to employ separate counsel at the Company's
expense, the Company shall not have the right to assume the defense of such
action on behalf of such Indemnified Party, it being understood, however,
that
the Company shall not, in connection with any one such action or separate
but
substantially similar or related actions in the same jurisdiction arising
out of
the same general allegations or circumstances, be liable for the reasonable
fees
and expenses of more than one separate firm of attorneys for the Indemnified
Parties provided that any Indemnified Party which has been advised by counsel
that there may be one or more legal defenses available to it which are different
from or additional to those available to any other Indemnified Party shall
have
the right to employ separate counsel whose reasonable fees and expenses shall
be
paid by the Company, which firm shall be designated in writing by said
Indemnified Party). The Indemnified Party, as a condition of such
indemnity, shall use its best efforts to cooperate with the Company in the
defense of any such action or claim. The Company shall not be liable
for any settlement of any such action without its consent but, if any such
action is settled with the consent of the Company or if there be final judgment
for the plaintiff in any such action, the Company agrees to indemnify and
hold
harmless the Indemnified Parties from and against any Loss by reason of such
settlement or judgment.
In
the event of failure by the
Company to observe the covenants, conditions and agreements contained in this
Section 8.1, any Indemnified Party may take any action at law or in equity
to
collect amounts then due and thereafter to become due, or to enforce performance
and observance of any obligation, agreement or covenant of the Company under
this Section 8.1.
SECTION
8.2. Representations
of the Company . The Company represents that it is duly organized
and existing under the laws of the State, that it is and it (or its successors
hereunder) will remain duly qualified to do business in the State, that it
has
duly accomplished all conditions precedent necessary to be accomplished by
it
prior to issuance and delivery of the Bonds and execution and delivery of this
Agreement, that it is not in default under any agreement, indenture or other
instrument in any manner which would impair the Company's ability to carry
out
its obligations hereunder, that it has power to enter into the transactions
contemplated by this Agreement, that it has been duly authorized to execute
and
deliver this Agreement and that it will not, except as provided in this Section,
voluntarily take any action that would adversely affect its
existence.
SECTION
8.3. Filing
. The Company will cause all financing and continuation statements
related to this Agreement and the Indenture and all supplements to either of
the
foregoing, as well as such other security agreements, financing and continuation
statements and all supplements thereto and other instruments as may be required
from time to time to be kept and filed in such manner and in such places as
may
from time to time be required by law in order to preserve and protect fully
the
security of the holders and the rights of
-19-
the
Trustee hereunder and under the Indenture and to take or cause to be taken
any
and all other action necessary to perfect the security interest created under
the Indenture or this Agreement.
SECTION
8.4. Representations
and Covenants of the Issuer . The Issuer represents that it is
duly organized and existing under the Act, that it has duly accomplished all
conditions precedent necessary to be accomplished by it prior to issuance and
delivery of the Bonds and execution and delivery of this Agreement and the
Indenture, that it is not in default under any of the provisions contained
in
the laws of the State or any agreement to which it is a party in any manner
which would impair its ability to carry out its obligations hereunder, that
it
has power to enter into and perform the transactions contemplated by this
Agreement and the Indenture, that it has been duly authorized to execute,
deliver and perform this Agreement and the Indenture, and that it will not
voluntarily take any action that would adversely affect its
existence.
The
Issuer will not knowingly take any affirmative action or omit to take any action
within its control, which act or omission will adversely affect the exclusion
from gross income for federal income tax purposes of interest paid on the Bonds,
and in the event it should unknowingly do so or omit to do so, will promptly
upon having such event brought to its attention take such reasonable actions
as
may rescind or otherwise negate its unknowing action or omission.
SECTION
8.5. Removal of
Liens . If any lien, encumbrance or charge of any kind based on
any claim of any kind (including, without limitation, any claim for income,
franchise or other taxes, whether federal, state or otherwise), shall be
asserted or filed against any amount paid or payable by the Company under or
pursuant to this Agreement or any order (whether or not valid) of any court
shall be entered with respect to any such amount by virtue of any claim of
any
kind, in either case so as to:
(a)
interfere with the due payment of
such amount to the Trustee or the due application of such amountby the Trustee
pursuant to the applicable provisions of the Indenture,
(b)
subject the holders of the Bonds to
any obligation to refund any moneys applied to payment of the Bonds,
or
(c)
result in the refusal of the
Trustee to make such due application because of its reasonable determination
that liability might be incurred if such due application were to be
made,
then
the
Company will promptly take such action (including, but not limited to, the
payment of money) as may be necessary to prevent, or to nullify the cause or
result of, such interference, such obligation or such refusal, as the case
may
be.
SECTION
8.6. Special
Covenants . The Issuer and the Company agree that all proceeds
received from the sale of the Bonds, as well as all Loan Payments paid by the
Company and other moneys received by the Issuer pursuant to this Agreement,
shall be applied solely in the manner and for the purposes specified in this
Agreement and the Indenture. The Issuer further agrees that it will
observe the covenants made by it in the Indenture and that the Company may
have
and exercise all the rights, powers and benefits stated to be in the Company
in
this Agreement and the Indenture and that, without the prior written consent
of
the Company, the Indenture, the Bonds and any bond purchase agreement pursuant
to which the Bonds are to be sold shall not be modified in any
manner.
SECTION
8.7. Bonds
are Limited Obligations . The Bonds shall be limited obligations
of the Issuer, payable solely out of the Revenues derived from or in connection
with this Agreement (including all sums deposited in any Fund (other than the
Bond Purchase Fund and the Rebate Fund) from time to time pursuant to this
Agreement, the Indenture, and the Note) and, in certain events, out of amounts
attributable
-20-
to
Bond
proceeds or amounts obtained through the exercise of any remedy provided
for in
the Indenture. The Bonds shall never be paid out of any other funds
of the Issuer except such Revenues. No recourse under the Bonds shall
be had against any past, present or future officer or director of the
Issuer. The Bonds shall never be paid in whole or in part out of any
funds raised or to be raised by taxation or out of any other revenues or
assets
of the Issuer or the State except those Revenues pledged by the
Indenture. The principal of, and premium, if any, and interest on the
Bonds are secured, as set forth in the Indenture, by an assignment by the
Issuer
of certain of its rights under this Agreement and the Note, including a pledge
of certain of the Revenues derived from and in connection with this
Agreement.
THE
BONDS ARE LIMITED AND SPECIAL
OBLIGATIONS OF THE ISSUER AND DO NOT CONSTITUTE OR CREATE AN OBLIGATION,
GENERAL OR SPECIAL, DEBT, LIABILITY OR MORAL OBLIGATION OF THE STATE OR ANY
POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL OR
STATUTORY PROVISIONS WHATSOEVER AND NEITHER THE FAITH OR CREDIT NOR THE TAXING
POWER OF THE STATE OR OF ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO
THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR THE INTEREST ON THE
BONDS. THE BONDS ARE NOT A GENERAL OBLIGATION OF THE ISSUER (WHICH
HAS NO TAXING POWER AND RECEIVES NO FUNDS FROM ANY GOVERNMENTAL BODY) BUT ARE
A
LIMITED AND SPECIAL REVENUE OBLIGATION OF THE ISSUER PAYABLE SOLELY FROM THE
INCOME, REVENUES AND RECEIPTS DERIVED OR TO BE DERIVED FROM PAYMENTS MADE
PURSUANT TO THIS AGREEMENT.
SECTION
8.8. Net
Agreement . This Agreement shall be deemed and construed to be a
"net agreement", and the Company shall during its term pay absolutely net the
Loan Payments and all other payments required hereunder, free of any deductions,
without abatement, deduction or setoff other than those herein expressly
provided.
SECTION
8.9. No
Warranty of the Project . The Issuer makes no express or implied
warranty of any kind whatsoever with respect to the Project, including, but
not
limited to, the merchantability thereof or the fitness thereof for any
particular purposes; the design or condition thereof; the workmanship, quality
or capacity thereof; compliance thereof with the requirements of any law, rule,
specification or contract pertaining thereto; patent infringement; latent
defects; or that the proceeds derived from the sale of the Bonds will be
sufficient to pay in full for same.
SECTION
8.10. Reserved
.
SECTION
8.11. Representations
Regarding the Project . The Company represents and warrants (i)
that it has no present intention of allowing the disposal or abandonment of
the
Project nor of directing the Project to a use other than the purposes
represented herein; (ii) that the Project is in furtherance of the public
purposes of the Act; and (iii) that all necessary licenses and permits to
acquire, construct, and operate the Project were obtained, and that the Project
has been approved by all necessary governmental bodies or agencies having
jurisdiction. Notwithstanding the foregoing, certain component parts
of the Project may, from time to time be disposed of or abandoned as provided
in
Section 5.2 of this Agreement and subject to Section 8.12 of this
Agreement.
SECTION
8.12. Tax Representations and
Covenants . The Company hereby represents and covenants as
follows:
(a)
Qualifying
Costs. At least 95 percent of the Proceeds actually expended will
be expended for Qualifying Costs.
-21-
(b)
Limit on Costs of Issuance. No portion of the Proceeds of the
Bonds in excess of 2 percent of the Sale Proceeds of the Bonds, within the
meaning of section 147(g) of the Code, will be expended to pay Issuance Costs
with respect to the Bonds.
(c)
Limitation
on
Maturities. The term of the Bonds will not exceed 120 percent of
the average reasonably expected economic life of the Project to be financed
by
the Bonds, weighted in proportion to the respective cost of each item comprising
the Project, the cost of which has been or will be financed, directly or
indirectly, with the Proceeds of the Bonds. For purposes of the
preceding sentence, the reasonably expected economic life of property shall
be
determined as of the later of (i) the Issue Date for the Bonds or (ii) the
date
on which such property is placed in service (or expected to be placed in
service). In addition, land shall not be taken into account in
determining the reasonably expected economic life of property, except that,
in
the event 25 percent or more of the collective Net Proceeds of the Bonds,
directly or indirectly, have been expended for land, such land shall be treated
as having an economic life of 30 years and shall be taken into account for
purposes of determining the reasonably expected economic life of such
property.
(d)
Rebate. The
Company agrees to take all steps necessary to compute and pay any rebatable
arbitrage in accordance with section 148(f) of the Code and section 1.148-3
of
the Regulations, including:
(i)
Delivery of Documents and Money on Computation Dates. The Company
shall deliver to the Trustee, within 45 days after each Computation
Date,
(A)
a statement, signed by an
Authorized Representative of the Company, stating the Rebate Amount as of such
Computation Date; and
(B)
(1) if such Computation Date is not
the Final Computation Date, an amount which, together with any amount then
held
for the credit of the Rebate Fund, is equal to at least 90 percent of the Rebate
Amount in respect of such issue of Bonds as of such Computation Date, less
the
future value as of such date, of any prior payments made to the United States
pursuant to section 148(f) of the Code in respect of the Bonds, and (2) if
such
Computation Date is the Final Computation Date, an amount which, together with
any amount then held for the credit of the Rebate Fund in respect of the Bonds,
is equal to the Rebate Amount as of such Final Computation Date, less the future
value as of such date, of any prior payments made to the United States pursuant
to section 148(f) of the Code in respect of the Bonds; and
(C)
to the extent any Rebate Amount is
due, an Internal Revenue Service Form 8038-T completed as of such Computation
Date.
(ii)
Correction of
Underpayments. If the Trustee or the Company shall discover or be
notified as of any date that any payment paid to the United States Treasury
pursuant to Section 9.4 of the Indenture of an amount described in Section
8.12(d)(i) above shall have failed to satisfy any requirement of section
1.148-3(f) of the Regulations (whether or not such failure shall be due to
any
default by the Company, the Issuer, or the Trustee), the Company shall (1)
deliver to the Trustee a brief written explanation of such failure and any
basis
for concluding that such failure was innocent and (2) pay to the Trustee (for
deposit to the Rebate Fund) and cause the Trustee to pay to the United States
Treasury from
-22-
the
Rebate Fund the penalty in respect thereof and as specified in section
1.148-3(h) of the Regulations, within 45 days after any discovery or
notice.
(iii)Records. The
Company
shall retain all of its accounting records relating to the Construction Fund,
the Bond Fund and the Rebate Fund and all calculations made in preparing the
statements described in this Section 8.12(d) for at least six years after the
date on which no Bonds are outstanding.
(iv)
Fees and Expenses. The
Company agrees to pay all of the reasonable fees and expenses of Bond Counsel,
a
certified public accountant and any other necessary consultant employed by
the
Company, the Trustee or the Issuer in connection with computing the Rebate
Amount.
(v)
No Diversion of Rebatable
Arbitrage. The Company will not indirectly pay any amount otherwise
payable to the federal government pursuant to the foregoing requirements to
any
person other than the federal government by entering into any investment
arrangement with respect to the Gross Proceeds of the Bonds that is not
purchased at fair market value or includes terms that the Company would not
have
included if the Bonds were not subject to section 148(f) of the
Code.
(vi)
Investment of Rebate
Fund. In the event funds are deposited to the Rebate Fund, the
Company shall give the Trustee written instructions as to the investment of
such
funds upon deposit of such funds.
(e)
Prohibited
Facilities. None of the Proceeds of the Bonds will be used to
provide any health club facility, airplane, sky-box or other private luxury
box,
facility primarily used for gambling, or store the principal business of which
is the sale of alcoholic beverages for consumption off premises.
(f)
Information
Reporting
Requirements. The Company will provide the Issuer with the
information required for it to comply with the information reporting
requirements of section 149(e)(2) of the Code requiring certain information
regarding the Bonds to be filed with the Internal Revenue Service within
prescribed time limits.
(g)
"Federally
Guaranteed"
Obligations. The Company covenants and agrees not to take any
action, or knowingly omit to take any action within its control, that, if taken
or omitted, respectively, would cause the Bonds to be "federally guaranteed"
within the meaning of section 149(b) of the Code and applicable regulations
thereunder, except as permitted by section 149(b)(3) of the Code and such
regulations.
(h)
Bonds
Are Not Hedge
Bonds. The Company covenants and agrees that none of the proceeds
of the Bonds will be invested in Nonpurpose Investments having a substantially
guaranteed Yield for four years or more within the meaning of section
149(g)(3)(A)(ii) of the Code, and the Company reasonably expects that all of
the
spendable proceeds of the Bonds will be used to carry out the governmental
purposes of the Bonds within the three-year period beginning on the Issue
Date.
(i)
Yield
on Investment of Gross
Proceeds. The Company will restrict the cumulative, blended Yield
on the investment of the Gross Proceeds of the Bonds, to the Yield of the Bonds,
other than amounts (i) not subject to yield restriction because of (A) the
availability of any
-23-
applicable
temporary period under section 148(c) of the Code and section 1.148-2(e) of
the
Regulations, (B) their deposit in a reasonably required reserve or replacement
fund described in section 148(d) of the Code and section 1.148-2(f)(2) of the
Regulations or a bona fide Bond Fund described in section 1.148-1(b) of the
Regulations (including the Bond Fund) or (C) the minor portion exception
described in section 1.148-2(g) of the Regulations, or (ii) invested in
obligations described in section 103(a) of the Code.
(j)
No
Arbitrage. The
Company will not use or invest the Proceeds of the Bonds such that the Bonds
become "arbitrage bonds" within the meaning of section 148 of the Code, and
as
evidence of this intent, a representative of the Company has reviewed the
No-Arbitrage Certificate of the Issuer prepared in connection and delivered
concurrently with the Bonds and the Company understands, and will take (or
request the Trustee or the Issuer to take), the actions described
therein.
(k)
Acquisition
of
Land. Less than 25 percent of the Net Proceeds of the Bonds
actually expended will be used, directly or indirectly, for the acquisition
of
land or an interest therein. Notwithstanding the immediately
preceding sentence, no portion of the Net Proceeds of the Bonds will be used,
directly or indirectly, for the acquisition of land or an interest therein
to be
used for farming purposes.
(l)
Used
Property. No
portion of the Net Proceeds of the Bonds will be used for the acquisition of
any
existing property or an interest therein unless (i) the first use of such
property is pursuant to such acquisition or (ii) the rehabilitation expenditures
with respect to any building and equipment therefor equal or exceed 15 percent
of the cost of acquiring such building financed with the proceeds of the Bonds
(with respect to structures other than buildings, this clause shall be applied
by substituting 100 percent for 15 percent). For purposes of the
preceding sentence, the term "rehabilitation expenditures" shall have the
meaning set forth in section 147(d)(3) of the Code.
(m)
Modification
of
Requirements. If at any time during the term of this Agreement,
the Issuer, the Trustee or the Company desires to take any action or omit to
take any action that would otherwise be prohibited by the terms of this Section,
such Person shall be permitted to take such action or omit to take such action
if it shall first obtain and provide to the other Persons named herein an
opinion of Bond Counsel to the effect that (i) such action or omission shall
not
adversely affect the exclusion from gross income for federal income tax purposes
of interest on the Bonds and (ii) such action or omission otherwise is in
compliance with the laws of the State and the terms of the Indenture and this
Agreement.
The
Company will not knowingly take any
action, or knowingly omit to take any action, which action or omission will
adversely affect the exclusion from gross income of the holders thereof for
federal income tax purposes of interest on the Bonds (other than holders who
are
substantial users of the Project or related persons within the meaning of
section 147(a) of the Code), and in the event of such action or omission
(whether taken with knowledge or not) will promptly, upon receiving knowledge
thereof, take all lawful actions, based on advice of Bond Counsel and at the
Company's expense, as may rescind or otherwise negate such action or
omission.
SECTION
8.13. Financial
Information . During such time, if ever, the Company does not
file annual financial information with the United States Securities Exchange
Commission, the Company, shall furnish to the Trustee and any owner, or any
beneficial owner, of any Bond who shall have requested the same in writing,
as
soon as available and in any event within 150 days after the end of the fiscal
year, financial statements for the Company for the immediately preceding fiscal
year, audited by a nationally recognized accounting firm. The Trustee
shall have no responsibility with respect to such financial
-24-
statements
except to make them available for reasonable examination by any owner of any
Bond upon reasonable, prior written request.
-25-
ARTICLE
IX
ASSIGNMENT
SECTION
9.1. Consolidation,
Merger and Assignment by the Company . The Company shall not
merge or consolidate with any other legal entity unless the successor entity
(if
other than the Company or an affiliate of the Company) (a) irrevocably and
unconditionally assumes, in an instrument delivered to the Issuer and the
Trustee, the due performance of the obligations of the Company under this
Agreement and (b) is authorized to transact business in this
State. The Company may, without the consent of the Issuer or the
Trustee, transfer or assign this Agreement or transfer or assign all or a
portion of the Project and any or all of its rights and delegate any or all
of
its duties hereunder to an entity either affiliated or unaffiliated with the
Company, but no such transfer, assignment or delegation shall relieve the
Company of its liability for the payment of the Loan Payments or for the payment
of any other amounts to be paid by it under this Agreement or the Note and
for
the full observance and performance of all of the covenants and conditions
to be
observed and performed by it which are contained in this Agreement and the
Note.
The Company shall within fifteen days after the execution thereof, furnish
to
the Issuer and the Trustee appropriate documentation demonstrating that the
surviving, resulting or transferee legal entity, as the case may be, is a
domestic legal entity, is qualified to do business in the State, and has assumed
in writing all of the obligations of the Company under this
Agreement.
SECTION
9.2. Issuer's
Rights of Assignment . The Issuer may, only in accordance with
the Indenture, assign this Agreement, the Note and the security interest of
the
Issuer created hereby and pledge the moneys receivable hereunder to the Trustee
as security for payment of the principal of and premium, if any, and interest
on
the Bonds and all amounts payable under the Indenture and the other Financing
Documents. The Company hereby assents to such assignments and agrees
that the Trustee may exercise and enforce in accordance with the Indenture
any
of the rights of the Issuer under this Agreement or the Note. Any
such assignment, however, shall be subject to all of the rights and privileges
of the Company as provided in this Agreement.
-26-
ARTICLE
X
EVENTS
OF DEFAULT AND REMEDIES
SECTION
10.1. Enumeration of "Events
of Default" . The terms "Event of Default" or "Default" shall
mean, whenever they are used in this Agreement, any one or more of the following
events:
(a)
Failure by the Company to pay when
due in accordance with Section 4.1(a) and (b) of this Agreement the portion
of
the Loan Payments representing payment of the principal of and premium, if
any,
on the Bonds.
(b)
Failure by the Company to pay when
due in accordance with Section 4.1(a) and (b) of this Agreement the portion
of
the Loan Payments representing payment of interest on the Bonds.
(c)
The occurrence of one or more of
the events specified in subsections (d) through (f) of Section 12.1 of the
Indenture.
(d)
The occurrence of a Company Event
of Bankruptcy.
(e)
Default by the Company in the
payment of any other amount required to be paid under this Agreement or in
the
performance or observance of any other of the covenants, agreements or
conditions contained in this Agreement, or in the Bonds issued under the
Indenture, and continuance thereof for a period of ninety (90) days after
written notice specifying such failure and requesting that it be remedied shall
have been given to the Company by the Trustee, which may give such notice in
its
discretion (with the prior written consent of the Bond Insurer) and shall give
such notice at the written request of the Bond Insurer or the holders of not
less than twenty-five percent (25%) in principal amount of the Bonds then
outstanding with the consent of the Bond Insurer, unless the Trustee, or the
Trustee and holders of a principal amount of Bonds not less than the principal
amount of Bonds the holders of which requested such notice, as the case may
be,
shall agree in writing to an extension of such period prior to its expiration,
provided that any extension shall be granted only with the written consent
of
the Bond Insurer; provided, however, that the Trustee, or the Trustee and the
holders of such principal amount of Bonds, as the case may be (and the Bond
Insurer), shall be deemed to have agreed to an extension of such period if
corrective action is instituted by the Company within such period and is being
diligently pursued.
SECTION
10.2. Remedies
. Upon any acceleration of the principal of the Bonds under the
Indenture, all Loan Payments shall be immediately due and payable under this
Agreement and the maturity of the Note shall be accelerated. In
addition, whenever any Event of Default referred to in Section 10.1 shall have
occurred and be continuing, the Trustee, or the Issuer with the prior written
consent of the Trustee, may take any action at law or in equity to collect
amounts then due and thereafter to become due, or to enforce performance and
observance of any obligation, agreement or covenant of the Company under this
Agreement. Any amounts collected pursuant to action taken under this
Section 10.2 shall be applied in accordance with the provisions of the
Indenture.
Neither
the Trustee nor the Issuer may
declare all unpaid Loan Payments immediately due because of a failure by the
Company to observe or perform any covenant, condition or agreement contained
in
Section 8.1 of this Agreement. However, the exception of the
preceding sentence shall not otherwise preclude the Issuer from enforcing,
with
or without the consent of the Trustee, or the Trustee from enforcing the
observance and performance of the covenants, conditions and agreements contained
in such Section.
-27-
A waiver by the Trustee of any Events of Default as that term is defined
in the
Indenture, in accordance with the terms and provisions of the Indenture,
or any
annulment of or acceleration of the due date of the principal of the Bonds,
shall also constitute a waiver of the corresponding Event of Default and
its
consequences hereunder or annulment of any acceleration of principal hereunder,
without further action on the part of the Trustee.
No
remedy shall be exercised by the
Trustee without the prior written consent of the Bond Insurer, and the Trustee
hereby agrees that it shall pursue such remedies as are directed in writing
by
the Bond Insurer.
SECTION
10.3. 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 or in equity or by statute. No delay or omission to
exercise any right or power accruing hereunder shall impair any such right
or
power or shall be construed to be a waiver thereof, nor shall any single or
partial exercise of any other right, power or privilege, but every such right
and power may be exercised from time to time and as often as may be deemed
expedient. In order to entitle the Trustee to exercise any remedy
reserved to it in this Article, it shall not be necessary to give any notice
other than such notices as may be herein expressly required.
SECTION
10.4. Agreement to Pay
Attorneys' Fees and Expenses . In the event the Company should
default under any of the provisions of this Agreement and the Issuer or the
Trustee should employ attorneys or incur other expenses for the collection
of
the payments due under this Agreement or the enforcement of performance or
observance of any obligation or agreement on the part of the Company herein
contained, the Company agrees that it will on demand therefor, and upon
presentation of an itemized bill, pay to the Issuer or the Trustee the
reasonable fees and expenses of such attorneys and such other expenses so
incurred by the Issuer or the Trustee.
-28-
ARTICLE
XI
GENERAL
SECTION
11.1. Force Majeure
. If by reason of force majeure either the Issuer or the Company
shall be rendered unable wholly or in part to carry out its obligations under
this Agreement, and if such party gives notice and full particulars of such
force majeure in writing to the other party within a reasonable time after
failure to carry out its obligations under this Agreement, such obligations
(other than the obligations of the Company specified in the last sentence of
this Section 11.1) of the party giving such notice, so far as they are affected
by such force majeure, shall be suspended during the continuance of the
inability then claimed, including a reasonable time for removal of the effect
thereof. The term "force majeure" shall mean acts of God, strikes,
lockouts or other industrial disturbances, acts of the public enemy, orders
of
any kind of the Government of the United States, or of any state thereof, or
any
civil or military authority, insurrections, riots, epidemics, landslides,
lightning, earthquakes, fires, hurricanes, tornadoes, storms, floods, washouts,
droughts, arrests, restraining of government and people, civil disturbances,
explosions, breakage or accidents to machinery, transmission pipes or canals,
partial or entire failure of utilities, shortages of labor, material, supplies
or transportation, or any other cause not reasonably within the control of
the
party claiming such inability. The requirement that any force majeure
shall be reasonably beyond the control of the party shall be deemed to be
fulfilled even though the existing or impending strike, lockout or other
industrial disturbance may not be settled but could have been settled by
acceding to the demand of the opposing Person or Persons. The
occurrence of any event of force majeure shall not suspend or otherwise ▇▇▇▇▇,
and the Company shall not be relieved from, the obligation to pay the Loan
Payments and to pay any other payments required to be made by it under this
Agreement at the times required.
SECTION
11.2. Waiver of
Rights . Failure by the Issuer, the Company or the Trustee to
insist upon the strict performance of any of the covenants and agreements
contained in this Agreement or to exercise any rights or remedies upon default
shall not be considered a waiver or relinquishment of the right to insist upon
and to enforce by any appropriate legal remedy strict compliance by the
defaulting party with all of the covenants and conditions binding on it, or
of
the right to exercise any such rights or remedies if such default be continued
or repeated.
SECTION
11.3. Notices
. Unless otherwise provided hereunder or in the Agreement, all
notices, certificates or other communications (a "Communication") hereunder
to
be given by any of the following parties to any of the other following parties
shall be deemed to have been sufficiently given and received by such parties
only upon actual receipt thereof and if sent by registered mail, by Electronic
notice, by overnight courier (signature required), telephone, confirmed in
writing, to the relevant party as follows:
Company: Cleco
Power LLC
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
Pineville,
LA 71361
ATTN: Manager,
Treasury
Services and Corporate Financing
Fax#: (▇▇▇)
▇▇▇-▇▇▇▇
Issuer: Rapides
Finance Authority
c/o
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Alexandria,
LA 71301
Fax#: (▇▇▇)
▇▇▇-▇▇▇▇
Trustee Principal
-29-
Office and Tender
|
|
Office:
|
The
Bank of New York Trust Company,
N.A.
|
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇
New
Orleans,
LA ▇▇▇▇▇-▇▇▇▇
Fax#: (▇▇▇)
▇▇▇-▇▇▇▇
Paying
Agent: The
Bank of New York Trust Company, N.A.
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇
New
Orleans,
LA ▇▇▇▇▇-▇▇▇▇
Fax#: (▇▇▇)
▇▇▇-▇▇▇▇
Remarketing ▇▇▇▇▇▇▇,
▇▇▇▇▇ & Co.
Agent: ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ Floor
New
York,
NY 10004
ATTN: Municipal
Note
Trading Desk
Fax
#: (▇▇▇)
▇▇▇-▇▇▇▇
|
|
Bond
Insurer:
|
Financial
Guaranty Insurance Company
|
▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
New
York,
NY 10017
ATTN: Risk
Management
Fax
#: (▇▇▇)
▇▇▇-▇▇▇▇
|
|
with
a copy to:
|
U.
S. Bank Trust National Association
|
▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, 19th Floor
New
York,
NY 10005
ATTN: Corporate
Trust
Department
or,
in
each case, at such other address or facsimile number as may have been designated
most recently in writing by the addressee to the addressor; provided, however,
that in order to be considered duly made, a duplicate copy of any Communication
to the Issuer, the Company or the Trustee shall be sent at the same time and
in
like manner to each of the others.
Whenever
this Agreement provides for
the delivery by the Issuer of a Communication, the person receiving the same
shall be entitled to rely and act upon such Communication if it is signed by
the
Chairman, Vice Chairman or the Secretary of the Issuer, or any other authorized
officer of the Issuer. Whenever this Agreement provides for the
delivery by the Company of any Communication, the Person receiving such
Communication shall be entitled to rely and act upon such Communication if
it is
signed by the President, Chief Financial Officer or Treasurer of the Company,
or
any other duly authorized officer of the Company.
SECTION
11.4. Counterparts,
Amendments, Governing Law, Etc. This Agreement (a) may be
executed in several counterparts, each of which shall be deemed an original,
and
all of which shall constitute one and the same instrument; (b) except as
provided in this Agreement or in the Indenture, may be modified or amended
only
by an instrument in writing signed by the duly authorized representatives of
all
parties (or their respective successors or assigns) and, so long as any Bonds
are outstanding, only with the consent of the Trustee given in accordance with
the applicable provisions of the Indenture; and (c) shall be governed, in all
respects including validity, interpretation and effect by, and shall be
enforceable in accordance with, the law of the State. The parties
agree that, in accordance with the Act, they will appropriately amend this
Agreement to increase the payments to be made by the Company hereunder if for
any reason such payments, if made, are not sufficient to pay the principal
of
and interest and premium, if any, on the Bonds as the same
-30-
become
due but, in no event shall the Company be obligated to pay interest on the
principal amount of the Loan in excess of the maximum amount allowed by
law.
The
Section and other headings
contained in this Agreement are for reference purposes only and shall not
control or affect its interpretation in any respect. In the event
that any clause or provision of this Agreement shall be held to be invalid
by
any court of competent jurisdiction, the invalidity of such clause or provision
shall not affect any of the remaining provisions hereof.
SECTION
11.5. Term of
Agreement . Except as provided in Article VII of this Agreement,
this Agreement shall remain in full force and effect from the date of execution
and delivery hereof until the Indenture has been discharged in accordance with
the provisions thereof; provided, however, that the provisions of Sections
8.1,
8.5, and the last paragraph of Section 7.1 of this Agreement shall survive
any
expiration or termination of this Agreement.
SECTION
11.6. Company's Approval of
Indenture . The Indenture has been submitted to the Company for
examination, and the Company acknowledges that, by execution of this Agreement,
it has approved the Indenture.
SECTION
11.7. Auction Rate
Requirement . In no event shall the Bonds bear interest at a rate
in excess of the Maximum Rate. The Company hereby agrees that, if the
Auction Period Rate on the Bonds shall be the Maximum Rate or any similar rate
for a period (a) in excess of thirty (30) days, the Company agrees to take
all
steps necessary to ensure that the Auction Period Rate does not exceed the
interest rate payable on similar securities (taking into account the interest
period and enhanced/insured rating of the Bonds) or (b) in excess of sixty
(60)
days, the Company agrees to convert, or cause to be converted, all Bonds to
a
fixed rate mode (that is a long-term through maturity) or, with the approval
of
the Bond Insurer, to a variable interest rate mode, in each case at the lowest
interest rate that will permit the Remarketing Agent to sell all the Bonds
on
the conversion date at a price equal to 100% of the principal amount thereof,
plus accrued interest thereon. If an event of default shall have
occurred and be continuing under this Indenture or the Company fails to cause
a
conversion of the Bonds to another interest rate mode as required by the
foregoing sentence, the Bond Insurer may, in its discretion, direct
the conversion of the Bonds to a fixed rate or any other interest rate
mode.
SECTION
11.8. Third Party
Beneficiaries . To the extent that this Agreement confers upon or
gives or grants to the Bond Insurer any right, remedy or claim under or by
reason of this Agreement, the Bond Insurer is hereby explicitly recognized
as
being a third-party beneficiary hereunder and may enforce any such right, remedy
or claim conferred, given or granted hereunder.
-31-
IN WITNESS WHEREOF, the Issuer and the Company have caused this Agreement to
be
signed in their behalf by their duly authorized representatives as of the date
set forth above.
RAPIDES
FINANCE
AUTHORITY
By: /s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇
Chairman
ATTEST:
By: /s/
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Secretary [SEAL]
WITNESSES:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/▇▇▇
▇▇▇▇▇▇▇
CLECO
POWER LLC
By: /s/
▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇
Senior Vice President
and Chief Financial Officer
WITNESSES:
/s/
▇▇▇▇▇▇▇
▇▇▇▇▇▇
/s/
▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇
-32-
EXHIBIT
A
DESCRIPTION
OF THE PROJECT
The
Project consists of the
acquisition, construction, and installation of solid waste disposal or recycling
and sewage facilities at the solid-fuel power plant of Cleco Power LLC to be
located in the Parish of Rapides, State of Louisiana. These facilities consist
of real estate, equipment, and systems which will be acquired, constructed,
and
installed for use as pollution control, solid waste disposal facilities,
recycling facilities, resource recovery facilities or industrial sewage and
wastewater treatment facilities.
The
pollution control facilities
capture, reduce and process air and water emissions including flue gases, NOx,
SOx, air-borne particulate matter, mercury, wastewater, and other pollutants
in
accordance with applicable environmental regulations. The principal
components and equipment comprising the pollution control facilities may
include, without limitation, NOx treatment systems, scrubber systems, baghouses,
electrostatic precipitators, flue gas desulfurization systems, selective
catalytic reduction (SCR) systems, activated carbon injection systems, mercury
removal and disposal systems, ash handling and disposal systems, and wastewater
collection, storage, and treatment systems. The pollution control
facilities also include functionally related and subordinate auxiliaries,
utilities, structures and buildings, associated electrical and mechanical
systems, instrumentation and control systems, and site
development. Due to evolving environmental rules and regulations, any
of the pollution control systems and components listed above may be substituted
with other facilities that perform the same or similar pollution control
functions.
The
solid waste disposal or recycling
facilities dispose and recycle solid wastes including fly ash, bottom ash,
spent
resins, pyrites, flue gas scrubber related wastes, and waste
fuel(s). The components of the solid waste disposal and recycling
facilities may include, without limitation, bottom ash and fly ash collection
systems, solid waste handling and disposal systems, scrubber waste collection,
storage, handling and disposal systems, ash handling and disposal or recycling
systems, ash pond improvements and closures, spent resin handling and disposal
or recycling systems, and certain property that is functionally related and
subordinate to the foregoing systems and components. These integrated
facilities include process equipment, utilities or support systems, and related
structures and buildings. The facilities are property used for the
collection, storage, treatment, utilization, processing or final disposal of
solid waste.
The
sewage facilities collect,
handle, store, treat, and discharge process wastewater and contact storm water
as required by applicable environmental regulations. The components
of the sewage facilities may include, without limitation, piping, sewers,
wastewater collection systems, sanitary sewage systems, impoundments, oil/water
separators, bioreactors and treatment units, clarifiers, sludge handling
systems, discharge systems, related auxiliary systems, and certain property
that
is functionally related and subordinate to the foregoing systems and components.
The solid waste disposal or recycling facilities also include the portion of
the
plant attributable to the usage and recycling of waste fuel(s). These facilities
also include process equipment, utilities or support systems, and related
buildings and structures.
EXHIBIT
B
DESCRIPTION
OF THE SITE
The
Project is located at ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-9708 and is described as
follows:
EXHIBIT
C
FORM
OF NOTE
NOTICE: This
Note has been endorsed, pledged and assigned by the Rapides Finance Authority
to
The Bank of New York Trust Company, N.A., as trustee under the Indenture (as
defined below), and this Note is held in trust by such The Bank of New York
Trust Company, N.A., as trustee, under such Indenture, reference to which is
made for the terms on which this Note is held.
$60,000,000 __________,
2007
FOR
VALUE
RECEIVED, Cleco Power LLC, a Louisiana limited liability
company (the "Company"), does hereby promise to pay to the order of the
Rapides Finance Authority (hereinafter called the "Issuer") at
the corporate trust office of The Bank of New York Trust Company, N.A. (the
"Trustee"), or any successor trustee acting as such under that certain Indenture
of Trust (the "Indenture") dated as of November 1, 2007 by and between the
Issuer and the Trustee, in lawful money of the United States of America, the
principal sum of Sixty Million Dollars ($60,000,000), and to pay interest on
the
unpaid principal amount hereof, in like money, at such office in the amounts
specified in Section 4.1(a) of the Loan Agreement hereinafter
referenced.
ALL
SUMS
paid hereon shall be applied first to the satisfaction of accrued interest
and
the balance to the unpaid principal.
This
Note
is due and payable on November1, 2037. Interest on the Note is due
and payable on each Interest Payment Date and at maturity in the amounts and
at
the rate specified in Section 4.1(a) of the Loan Agreement.
THIS
NOTE
is the Note referred to in that certain Loan Agreement dated as of November
1,
2007 by and between the Company and the Issuer (the "Loan Agreement"), and
is
subject to, and is executed in accordance with, all of the terms, conditions
and
provisions thereof, including those respecting prepayment and the acceleration
of maturity and is further subject to all of the terms, conditions and
provisions of the Indenture, all as provided in the Loan Agreement.
THIS
NOTE
is a contract made under and shall be construed in accordance with and governed
by the laws of the State of Louisiana.
CLECO
POWER LLC
By: _____________________________________
Title:
ENDORSEMENT
(To
be
set forth on back of Note)
Pay
to
the order of The Bank of New York Trust Company, N.A., as Trustee, without
recourse or warranty, except warranty of good title and warranty that the Issuer
has not assigned this Note to a person other than the Trustee and that the
principal amount of $60,000,000 remains unpaid under this Note.
RAPIDES
FINANCE
AUTHORITY
By: ____________________________________
Chairman
EXHIBIT
D
FORM
OF COMPLETION CERTIFICATE
The
undersigned, a duly authorized
officer of Cleco Power LLC (the "Company"), hereby certifies that:
1. As
of the date of
this Completion Certificate, [the Project has been completed
and placed in service] OR [the Final Payment
Date has occurred].
2. $____________
is
the amount of Proceeds expended for Qualifying Costs, $____________ for Project
Costs that were not Qualifying Costs and $_____________ for Issuance
Costs.
3. [if
the
Final Payment Date has not occurred] $_____________ is the amount which
the Trustee is to retain in the Construction Fund for payment of amounts now
subject to dispute or not now due.
All
capitalized terms used herein
shall have the means given to them in the Loan Agreement dated as of November
1,
2007 between the Company and the Rapides Finance Authority (the "Loan
Agreement").
CLECO
POWER LLC
By: __________________________________
Authorized
Company
Representative
Date: ________________________