1
LOAN AGREEMENT
between
CITY OF WABASH, INDIANA
and
▇▇▇▇▇▇ YALE INDUSTRIES, INC.
--------------------------------------
RELATING TO
$2,700,000
CITY OF WABASH, INDIANA
ADJUSTABLE RATE ECONOMIC DEVELOPMENT
REVENUE REFUNDING BONDS, SERIES 1998
(▇▇▇▇▇▇ YALE INDUSTRIES, INC. PROJECT)
DATED
AS OF
September 1, 1998
--------------------------------------
Certain rights hereunder, excepting the Unassigned Issuer Rights
specified herein, have been assigned to Bank One Trust Company, NA, as Trustee.
Ice ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇▇ Counsel
2
TABLE OF CONTENTS
Page
----
ARTICLE I. DEFINITIONS 2
Section 1.1. Use of Defined Terms 2
Section 1.2. Definitions 2
Section 1.3. Interpretation 4
Section 1.4. Captions and Headings 5
ARTICLE II. REPRESENTATIONS, WARRANTIES AND COVENANTS 6
Section 2.1. Representations, Warranties and Covenants of the Issuer 6
Section 2.2. Representations, Warranties and Covenants of the Borrower 7
Section 2.3. Entire Agreement with Bank 9
ARTICLE III. ISSUANCE OF THE PROJECT BONDS 10
Section 3.1. Refunding of the Prior Bonds 10
Section 3.2. [RESERVED] 10
Section 3.3. Issuance of the Project Bonds; Application of Proceeds 10
Section 3.4. Disbursements from the Refunding Fund 10
Section 3.5. Investment of Fund Moneys 10
Section 3.6. Borrower Required to Pay Issuance Costs and Accrued
Interest due on the Project Bonds 11
ARTICLE IV. LOAN BY ISSUER; REPAYMENT OF THE LOAN;
LOAN PAYMENTS AND ADDITIONAL PAYMENTS 12
Section 4.1. Loan Repayment; Delivery of Notes and Letter of Credit 12
Section 4.2. Additional Payments 13
Section 4.3. Place of Payments 13
Section 4.4. Obligations Unconditional 13
Section 4.5. Assignment of Agreement and Revenues 14
Section 4.6. Letter of Credit 14
ARTICLE V. ADDITIONAL AGREEMENTS AND COVENANTS 15
Section 5.1. Right of Inspection 15
Section 5.2. Sale, Lease or Grant of Use by Borrower 15
Section 5.3. Indemnification 15
Section 5.4. Borrower Not to Adversely Affect Exclusion from
Gross Income of Interest on Project Bonds 16
Section 5.5. Assignment by Issuer 16
3
Section 5.6. Borrower's Performance Under Indenture 17
Section 5.7. Compliance with Laws 17
Section 5.8. Taxes, Permits, Utility and Other Charges 17
Section 5.9. Continued Existence 17
Section 5.10. Removal of Portions of the Project 17
ARTICLE VI. REDEMPTION OF PROJECT BONDS 19
Section 6.1. Optional Redemption 19
Section 6.2. Extraordinary Optional Redemption 19
Section 6.3. Mandatory Redemption of Project Bonds 20
Section 6.4. Actions by Issuer 20
Section 6.5. Required Deposits for Optional Redemption 21
ARTICLE VII. EVENTS OF DEFAULT AND REMEDIES 22
Section 7.1. Events of Default 22
Section 7.2. Remedies on Default 23
Section 7.3. No Remedy Exclusive 24
Section 7.4. Agreement to Pay Attorneys' Fees and Expenses 24
Section 7.5. No Waiver 24
Section 7.6. Notice of Default 24
Section 7.7. Remedies Subject to Bank's Direction 25
ARTICLE VIII. MISCELLANEOUS 26
Section 8.1. Term of Agreement 26
Section 8.2. Notices 26
Section 8.3. Extent of Covenants of the Issuer; No Personal Liability 26
Section 8.4. Binding Effect 26
Section 8.5. Amendments and Supplements 26
Section 8.6. Execution Counterparts 27
Section 8.7. Severability 27
Section 8.8. Governing Law 27
Section 8.9. Amounts Remaining in Funds 27
Exhibit A The Project A-1
Exhibit B Project Note B-1
4
THIS LOAN AGREEMENT is made and entered into as of September 1, 1998
between the City of Wabash, Indiana, a municipal corporation organized and
existing under the laws of the State of Indiana (the "Issuer"), and ▇▇▇▇▇▇ Yale
Industries, Inc., an Indiana corporation (the "Borrower"), under the
circumstances summarized in the following recitals (the capitalized terms not
defined above or in the recitals being used therein as defined in or pursuant to
Article I hereof):
A. Pursuant to the provisions of Indiana Code 36-7-11.9 and 12 and
Indiana Code 5-1-5, as amended (collectively, the "Act"), in order to create or
preserve jobs and employment opportunities and improve the economic welfare of
the citizens of the City of Wabash, Indiana, the Issuer may issue economic
development revenue bonds to provide funds to refund the Prior Bonds, as defined
herein.
B. The Borrower and the Issuer have full right and lawful authority to
enter into this Agreement and to perform and observe the provisions hereof on
their respective parts to be performed and observed.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto covenant, agree and bind
themselves as follows (provided that any obligation of the Issuer created by or
arising out of this Agreement shall not be a general debt on its part but shall
be payable solely out of the Revenues):
5
ARTICLE I.
DEFINITIONS
Section 1.1. USE OF DEFINED TERMS. Words and terms defined in the
Indenture shall have the same meanings when used herein, unless the context or
use clearly indicates another meaning or intent. In addition, the words and
terms set forth in Section 1.2 hereof shall have the meanings set forth therein
unless the context or use clearly indicates another meaning or intent.
Section 1.2. DEFINITIONS. As used herein:
"Additional Payments" means the amounts required to be paid by the
Borrower pursuant to the provisions of Section 4.2 hereof.
"Agreement" means this Loan Agreement, as amended or supplemented from
time to time.
"Bank" means Bank One, Indiana, NA, and its successors and assigns.
"Commission" means the Wabash Economic Development Commission.
"Credit Agreement" means the Amended and Restated Credit and Guaranty
Agreement dated as of the Closing Date among the Bank, the Borrower and the
Guarantor as amended and supplemented from time to time.
"Event of Default" means any of the events described as an Event of
Default in Section 7.1 hereof.
"Force Majeure" means any of the causes, circumstances or events
described as constituting Force Majeure in Section 7.1 hereof.
"Guarantor" means Escalade, Incorporated, an Indiana corporation and
its successors and assigns.
"Indenture" means the Trust Indenture, dated as of even date herewith,
between the Issuer and the Trustee, as amended or supplemented from time to
time.
"Loan" means the loan by the Issuer to the Borrower of the proceeds
received from the sale of the Project Bonds.
"Loan Payment Date" means any date on which any of the Loan Payments
are due and payable, whether at maturity, upon acceleration, call for redemption
or prepayment, or otherwise.
"Loan Payments" means the amounts required to be paid by the Borrower
in repayment of the Loan pursuant to the provisions of the Notes and of Section
4.1 hereof.
6
"Notes" means the Project Note and any Additional Notes.
"Notice Address" means:
(a) As to the Issuer: City of Wabash, Indiana
City Hall, ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Clerk-Treasurer
(b) As to the Borrower: ▇▇▇▇▇▇ Yale Industries, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
with a copy to: Escalade, Incorporated
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
(c) As to the Trustee: Bank One Trust Company, NA
Bank One Center/Tower
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇-▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
(d) As to the Bank: Bank One, Indiana, NA
Bank One Center/Tower
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Manager, Indiana Commercial Services
(e) As to the
Remarketing Agent: Banc One Capital Markets, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Municipal Trading Desk
or such additional or different address, notice of which is given under Section
8.2 hereof.
"Prior Bonds" means the City of Wabash, Indiana Economic Development
Revenue Bonds, Series 1990 (▇▇▇▇▇▇ Yale Industries, Inc. Project), dated May 31,
1990, issued in the original principal amount of $4,500,000.
7
"Project" means the real and personal property, including undivided
interests or other interests therein, identified in Exhibit A attached hereto as
a part hereof, or acquired or installed as a replacement or substitution
therefor or an addition thereto, or as may result from any revisions thereof in
accordance with the provisions of this Agreement, which property was financed
from the proceeds of the Prior Bonds.
"Project Bonds" means the City of Wabash, Indiana Adjustable Rate
Economic Development Revenue Refunding Bonds, Series 1998 (▇▇▇▇▇▇ Yale
Industries, Inc. Project) authorized in the Indenture in the original principal
amount of $2,700,000.
"Project Note" means the promissory note of the Borrower, dated as of
even date with the Project Bonds, in the form attached hereto as Exhibit B and
in the principal amount of $2,7000,000 evidencing the obligation of the Borrower
to make Loan Payments.
"Remarketing Agreement" means the Remarketing Agreement between the
Borrower and the Remarketing Agent dated as of even date herewith.
"Refunding Fund" means the Refunding Fund created pursuant to Section
5.01 of the Indenture.
"Tax Certificate" means the Tax Representation Certificate of the
Borrower delivered in connection with the initial issuance and delivery of the
Project Bonds.
"Trustee" means the Trustee at the time acting as such under the
Indenture, originally Bank One Trust Company, NA, as Trustee, and any successor
Trustee as determined or designated under or pursuant to the Indenture.
"Unassigned Issuer's Rights" means all of the rights of the Issuer to
receive Additional Payments under Section 4.2 hereof, to be held harmless and
indemnified under Section 5.3 hereof, to be reimbursed for attorney's fees and
expenses under Section 7.4 hereof, and to give or withhold consent to
amendments, changes, modifications, alterations and termination of this
Agreement under Section 8.5 hereof.
Section 1.3. INTERPRETATION. Any reference herein to the Issuer or to
any member or officer of thereof includes entities or officials succeeding to
their respective functions, duties or responsibilities pursuant to or by
operation of law or lawfully performing their respective functions.
Any reference to a section or provision of the constitution of the
State or the Act, or to a section, provision or chapter of the Indiana Code or
to any statute of the United States of America, includes that section,
provision, chapter or statute as amended, modified, revised, supplemented or
superseded from time to time; provided, that no amendment, modification,
revision, supplement or superseding section, provision, chapter or statute shall
be applicable solely by reason of this provision if it constitutes in any way an
impairment of the rights or obligations of
8
the Issuer, the Holders, the Trustee, the Bank or the Borrower under this
Agreement.
Unless the context indicates otherwise, words importing the singular
number include the plural number, and vice versa; the terms "hereof," "hereby,"
"herein," "hereto," "hereunder" and similar terms refer to this Agreement; and
the term "hereafter" means after, and the term "heretofore" means before, the
date of delivery of the Project Bonds. Words of any gender include the
correlative words of the other genders, unless the sense indicates otherwise.
Section 1.4. CAPTIONS AND HEADINGS. The captions and headings in this
Agreement are solely for convenience of reference and in no way define, limit or
describe the scope or intent of any Articles, Sections, subsections, paragraphs,
subparagraphs or clauses hereof.
(End of Article I)
9
ARTICLE II.
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.1. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE ISSUER.
The Issuer represents and warrants that:
(a) It is a municipal corporation duly organized and validly
existing under the laws of the State.
(b) It has full legal right, power and authority pursuant to
the Act to refund the Prior Bonds through the issuance of the Project
Bonds; has made the necessary findings of public purpose, has given any
necessary notices and has taken all other steps and followed all
procedures required by the Constitution and laws of the State
(including the Act) in connection therewith; and has full legal right,
power and authority to (i) enter into this Agreement, the Bond
Placement Agreement, the Letter of Representations and the Indenture,
(ii) issue, sell and deliver the Project Bonds and (iii) carry out and
consummate all other transactions contemplated by this Agreement, the
Bond Placement Agreement, the Letter of Representations and the
Indenture.
(c) It has duly authorized (i) the execution, delivery and
performance of this Agreement, the Project Bonds, the Bond Placement
Agreement, the Letter of Representations and the Indenture, and (ii)
the taking of any and all such actions as may be required on the part
of the Issuer to carry out, give effect to and consummate the
transactions contemplated by such instruments.
(d) This Agreement, the Bond Placement Agreement, the Letter
of Representations and the Indenture constitute legal, valid and
binding obligations of the Issuer, enforceable in accordance with their
respective terms; this Agreement, the Bond Placement Agreement, the
Letter of Representations and the Indenture have been duly authorized
and executed by the Issuer; and, when authenticated by the Trustee in
accordance with the provisions of the Indenture, the Project Bonds will
have been duly authorized, executed, issued and delivered and will
constitute legal, valid and binding special obligations of the Issuer
in conformity with the provisions of the Act and the Constitution of
the State.
(e) There is no action, suit, proceeding, inquiry, or
investigation at law or in equity or before or by any court, public
board or body, pending or, to the best of the knowledge of the Issuer,
threatened against the Issuer, nor to the best of the knowledge of the
Issuer is there any basis therefor, which in any manner questions the
validity of the Act, the powers of the Issuer referred to in paragraph
(b) above or the validity of any proceedings taken by the Issuer in
connection with the issuance of the Project Bonds or wherein any
unfavorable decision, ruling or finding could materially adversely
affect the transactions contemplated by this Agreement or which, in any
way, would adversely affect the validity or enforceability of the
Project Bonds, the Letter of Representations, the
10
Indenture, the Bond Placement Agreement or this Agreement (or of any
other instrument required or contemplated for use in consummating the
transactions contemplated thereby and hereby).
(f) The execution and delivery by the Issuer of this
Agreement, the Project Bonds, the Bond Placement Agreement, the Letter
of Representations and the Indenture in compliance with the provisions
of each of such instruments will not conflict with or constitute a
breach of, or default under, any material commitment, agreement or
other instrument to which the Issuer is a party or by which it is
bound, or under any provision of the Act, the Constitution of the State
or any existing law, rule, regulation, ordinance, judgment, order or
decree to which the Issuer is subject.
(g) The Issuer will do or cause to be done all things
necessary, so far as lawful, to preserve and keep in full force and
effect its existence or to assure the assumption of its obligations
under this Agreement, the Indenture, the Letter of Representations and
the Project Bonds by any successor municipal corporation.
(h) The Project constitutes economic development facilities
within the meaning of the Act.
Section 2.2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BORROWER.
The Borrower represents, warrants and covenants that:
(a) The Borrower is an Indiana corporation duly formed,
validly existing in full force and effect and qualified to transact
business under the laws of the State of Indiana, and has full power and
authority to execute, deliver and perform this Agreement, the Bond
Placement Agreement, the Credit Agreement, the Remarketing Agreement
and the Project Note and to enter into and carry out the transactions
contemplated by those documents. The execution, delivery and
performance do not, and will not, violate any provision of law
applicable to the Borrower or its Articles of Incorporation or By-laws
and will not conflict with or result in a default under any agreement
or instrument to which the Borrower is a party or by which the Borrower
is bound. This Agreement, the Bond Placement Agreement, the Credit
Agreement, the Remarketing Agreement and the Project Note, by proper
action, have been duly authorized, executed and delivered by the
Borrower and are valid and binding obligations of the Borrower.
(b) This Agreement, the Bond Placement Agreement, the
Remarketing Agreement, the Credit Agreement and the Project Note, by
proper action, have been duly authorized, executed and delivered by the
Borrower and are valid and binding obligations of the Borrower.
(c) The Project has created and preserved jobs and employment
opportunities in the City of Wabash, thereby improving the economic
welfare of the City of Wabash.
(d) The Project is owned by the Borrower and the acquisition,
installation and
11
operation of the property comprising the Project by the Borrower
complies with all applicable zoning, planning, building, environmental
and other regulations of the governmental authorities having
jurisdiction over the Project, and all necessary permits, licenses,
consents and permissions necessary for the Project have been obtained.
(e) The representations contained in the Tax Certificate
(which is incorporated herein by this reference thereto) are true and
correct and the Borrower will observe the covenants contained therein
as fully as if set forth herein.
(f) The Borrower is not in default in the payment of principal
of, or interest on, any of the Borrower's indebtedness for borrowed
money, or in default under any instrument under which, or subject to
which, any indebtedness has been incurred, and no event has occurred
and is continuing under the provisions of any agreement involving the
Borrower that, with the lapse of time or the giving of notice, or both,
would constitute an event of default thereunder.
(g) No litigation at law or in equity nor any proceeding
before any governmental agency or other tribunal involving the Borrower
is pending or, to the knowledge of the Borrower, threatened, in which
any liability of the Borrower is not adequately covered by insurance or
in which any judgment or order would have a material and adverse effect
upon the business or assets of the Borrower or would materially and
adversely affect the Project, the validity of this Agreement, the Bond
Placement Agreement, the Credit Agreement, the Remarketing Agreement
and the Project Note or the performance of the Borrower's obligations
thereunder or the transactions contemplated hereby.
(h) The Borrower has not made and will not make any changes to
the Project or to the operation thereof which would affect the
qualification of the Project under the Act or impair the exclusion from
gross income for federal income tax purposes of the interest on the
Project Bonds.
(i) The Bank does not control, either directly or indirectly
through one or more intermediaries, the Borrower. Likewise, the
Borrower does not control, either directly or indirectly through one or
more intermediaries, the Bank. "Control" for this purpose has the
meaning given to such term in Section 2(a)(9) of the Investment Company
Act of 1940. The Borrower has covenanted in the Agreement to provide
written notice to the Trustee, the Remarketing Agent, and the
Bondholders thirty (30) days prior to consummation of any transaction
that would result in the Borrower controlling or being controlled by
the Bank or any provider of an Alternate Letter of Credit or
Supplemental Credit Facility, as defined in the Indenture.
Section 2.3. ENTIRE AGREEMENT WITH BANK.
(a) The Borrower hereby represents to the Issuer that the
Credit Agreement and any other loan documents relating to the Credit
Agreement constitute the entire agreement between the Borrower and the
Bank respecting the loan of any funds to the
12
Borrower. The Borrower represents that there is no other agreement,
either oral or written, between the Borrower, on the one hand, or the
Bank on the other hand respecting the loan of any funds to the
Borrower.
(b) The Borrower hereby covenants to the Issuer that it will
not take any action, directly or indirectly (including, but not limited
to, any amendment to Section 12 of the Credit Agreement), nor fail to
take any action, directly or indirectly, which would cause any payment
under the Letter of Credit from the Bank to the Trustee to be a
voidable preference under Section 547 of Title 11 of the United States
Code, 11 U.S.C. ss. 101 et seq. (the "Bankruptcy Code") which is
recoverable under Section 550(a) of the Bankruptcy Code in the event of
the filing of a petition in bankruptcy by or against the Borrower or
the Issuer.
(End of Article II)
13
ARTICLE III.
ISSUANCE OF THE PROJECT BONDS
Section 3.1. REFUNDING OF THE PRIOR BONDS. The Borrower agrees: (a) to
cause the Prior Bonds to be redeemed within ninety (90) days of delivery of the
Project Bonds; and (b) to pay all fees, costs and expenses incurred in refunding
the Prior Bonds from Funds of the Borrower.
Section 3.2. [RESERVED].
Section 3.3. ISSUANCE OF THE PROJECT BONDS; APPLICATION OF PROCEEDS. To
provide funds to make the Loan for purposes of assisting the Borrower in the
refunding of the Prior Bonds, the Issuer will issue, sell and deliver the
Project Bonds upon the order of the Placement Agent as provided in the Bond
Placement Agreement. The Project Bonds will be issued pursuant to the Indenture
in the aggregate principal amount, will bear interest, will mature and will be
subject to redemption as set forth therein. The Borrower hereby approves the
terms and conditions of the Indenture and the Project Bonds, and the terms and
conditions under which the Project Bonds will be issued, sold and delivered.
The proceeds from the sale of the Project Bonds shall be loaned to the
Borrower and paid over to the Trustee for the benefit of the Borrower and the
Holders of the Project Bonds and deposited as provided in Sections 5.01 and 5.03
of the Indenture.
At the request of the Borrower, and for the purposes and upon
fulfillment of the conditions specified in the Indenture, the Issuer may provide
for the issuance, sale and delivery of Additional Bonds and loan the proceeds
from the sale thereof to the Borrower.
Section 3.4. DISBURSEMENTS FROM THE REFUNDING FUND. Disbursements from
the proceeds of the sale of the Project Bonds which are deposited in the
Refunding Fund shall be used to effect the redemption of the Prior Bonds within
90 days of the delivery of the Project Bonds at the written direction of the
Borrower.
Section 3.5. INVESTMENT OF FUND MONEYS. At the written request of the
Authorized Borrower Representative, any moneys held as part of the Bond Fund
(except moneys held in the Bond Fund from draws on the Letter of Credit for
purposes of defeasing the Project Bonds pursuant to Article IX of the
Indenture), the Refunding Fund or the Rebate Fund shall be invested or
reinvested by the Trustee in Eligible Investments. The Issuer and the Borrower
each hereby covenants that it will restrict that investment and reinvestment and
the use of the proceeds of the Project Bonds in such manner and to such extent,
if any, as may be necessary, after taking into account reasonable expectations
at the time of delivery of and payment for the Project Bonds, so that the
Project Bonds will not constitute arbitrage bonds under Section 148 of the Code.
The Borrower shall provide the Issuer with, and the Issuer may base its
certifications as
14
authorized by the Bond Resolution on, a certificate of the Borrower for
inclusion in the transcript of proceedings for the Project Bonds, setting forth
the reasonable expectations of the Borrower on the date of delivery of and
payment for the Project Bonds regarding the amount and use of the proceeds of
the Project Bonds and the facts, estimates and circumstances on which those
expectations are based.
Section 3.6. BORROWER REQUIRED TO PAY ISSUANCE COSTS AND ACCRUED
INTEREST DUE ON THE PROJECT BONDS. The Borrower agrees to pay all costs of
issuance for the Project Bonds from funds other than the proceeds of the Project
Bonds or the Prior Bonds, including but not limited to various counsel fees,
trustee fees, underwriting fees, accounting fees, printing fees, etc. The
Borrower further agrees to pay all interest accrued and unpaid on the Project
Bonds through the date of redemption of the Prior Bonds.
(End of Article III)
15
ARTICLE IV.
LOAN BY ISSUER; REPAYMENT OF THE LOAN;
LOAN PAYMENTS AND ADDITIONAL PAYMENTS
Section 4.1. LOAN REPAYMENT; DELIVERY OF NOTES AND LETTER OF CREDIT.
Upon the terms and conditions of this Agreement, the Issuer will make the Loan
to the Borrower. In consideration of and in repayment of the Loan, the Borrower
shall make, as Loan Payments, payments sufficient in time and amount to pay when
due all Bond Service Charges, all as more particularly provided in the Project
Note and any Additional Note. The Project Note shall be executed and delivered
by the Borrower concurrently with the execution and delivery of this Agreement.
All Loan Payments shall be paid to the Trustee in accordance with the terms of
the Notes for the account of the Issuer and shall be held and applied in
accordance with the provisions of the Indenture and this Agreement. To the
extent of payments made with respect to Bond Service Charges pursuant to draws
upon the Letter of Credit, the Borrower shall receive a credit against its
obligation to make Loan Payments under this Agreement and the Project Note, and
shall deliver Loan Payments to the Bank as reimbursement to the Bank for draws
made under the Letter of Credit for the purpose of paying Bond Service Charges.
In connection with the issuance of any Additional Bonds permitted by
the Bank, the Borrower shall execute and deliver to the Trustee one or more
Additional Notes in a form substantially similar to the form of the Project
Note. All such Additional Notes shall:
(a) provide for payments of interest equal to the payments of
interest on the corresponding Additional Bonds;
(b) require payments of principal and prepayments and any
premium equal to the payments of principal, redemption payments and
sinking fund payments and any premium on the corresponding Additional
Bonds;
(c) require all payments on any such Additional Notes to be
made no later than the due dates for the corresponding payments to be
made on the corresponding Additional Bonds; and
(d) contain by reference or otherwise optional and mandatory
prepayment provisions and provisions in respect of the optional and
mandatory acceleration or prepayment of principal and any premium
corresponding with the redemption and acceleration provisions of the
corresponding Additional Bonds.
All Notes shall secure equally and ratably all outstanding Bonds,
except that, so long as no Event of Default described in paragraph (a), (b), (f)
or (g) of Section 7.01 of the Indenture has occurred and is continuing, payments
by the Borrower on the Project Note shall be used by the Trustee to reimburse
the Bank for payments made in connection with drawings on the Letter of Credit
used to pay Bond Service Charges on the Project Bonds.
16
Upon payment in full, in accordance with the Indenture, of the Bond
Service Charges on any series of Bonds, whether at maturity or by redemption or
otherwise, or upon provision for the payment thereof having been made in
accordance with the provisions of the Indenture, (i) the Notes issued
concurrently with those corresponding Bonds, of the same maturity, bearing the
same interest rate and in an amount equal to the aggregate principal amount of
the Bonds so surrendered and canceled or for the payment of which provision has
been made, shall be deemed fully paid, the obligations of the Borrower
thereunder shall be terminated, and any such Notes shall be surrendered by the
Trustee to the Borrower, and shall be canceled by the Borrower, or (ii) in the
event there is only one of those Notes, an appropriate notation shall be
endorsed thereon evidencing the date and amount of the principal payment or
prepayment equal to the Bonds so paid, or with respect to which provision for
payment has been made, and that Note shall be surrendered by the Trustee to the
Borrower for cancellation if all Bonds shall have been paid (or provision made
therefor) and canceled as aforesaid. Unless the Borrower is entitled to a credit
under express terms of this Agreement or the Notes, all payments on each of the
Notes shall be in the full amount required thereunder.
Except for such interest of the Borrower and the Bank as may hereafter
arise pursuant to Section 5.07 or 5.08 of the Indenture, the Borrower and the
Issuer each acknowledge that neither the Borrower nor the Issuer has any
interest in the Bond Fund and any moneys deposited therein shall be in the
custody of and held by the Trustee in trust for the benefit of the Holders and,
to the extent of amounts due under the Credit Agreement, the Bank.
Section 4.2. ADDITIONAL PAYMENTS. The Borrower shall pay to the Issuer,
as Additional Payments hereunder, any and all costs and expenses incurred or to
be paid by the Issuer in connection with the issuance and delivery of the
Project Bonds and Additional Bonds or otherwise related to actions taken by the
Issuer under this Agreement or the Indenture.
The Borrower shall pay to the Trustee, the Registrar and any Paying
Agent or Authenticating Agent, their reasonable fees, charges and expenses,
including counsel fees and expenses, for acting as such under the Indenture.
Section 4.3. PLACE OF PAYMENTS. The Borrower shall make all Loan
Payments directly to the Trustee at its principal corporate trust office in
Indianapolis, Indiana. Additional Payments shall be made directly to the person
or entity to whom or to which they are due.
Section 4.4. OBLIGATIONS UNCONDITIONAL. The obligations of the Borrower
to make Loan Payments, Additional Payments and any payments required of the
Borrower under Section 6.03 of the Indenture shall be absolute and
unconditional, and the Borrower shall make such payments without abatement,
diminution or deduction regardless of any cause or circumstances whatsoever
including, without limitation, any defense, set-off, recoupment or counterclaim
which the Borrower may have or assert against the Issuer, the Trustee, any
Paying Agent or Authenticating Agent, the Remarketing Agent, the Bank or any
other Person; provided that the Borrower may contest or dispute the amount of
any such obligation (other than Loan Payments) so long as such contest or
dispute does not result in an Event of Default under the Indenture.
17
Section 4.5. ASSIGNMENT OF AGREEMENT AND REVENUES. To secure the
payment of Bond Service Charges, the Issuer shall assign to the Trustee, by the
Indenture, all its right, title and interest in and to the Revenues, the
Agreement (except for Unassigned Issuer's Rights) and the Project Note.
The Borrower hereby agrees and consents to that assignment.
Section 4.6. LETTER OF CREDIT. Simultaneously with the initial delivery
of the Project Bonds pursuant to the Indenture and the Bond Placement Agreement,
the Borrower shall cause the Bank to issue and deliver the Letter of Credit to
the Trustee. The Letter of Credit may be replaced by an Alternate Letter of
Credit complying with the provisions of Section 5.09 of the Indenture and shall
be in substantially the form attached to the Credit Agreement and made a part
thereof. The Borrower shall take whatever action may be necessary to maintain
the Letter of Credit or an Alternate Letter of Credit in full force and effect
during the period required by the Indenture, including the payment to the Bank
of all amounts due and payable under the Credit Agreement.
(End of Article IV)
18
ARTICLE V.
ADDITIONAL AGREEMENTS AND COVENANTS
Section 5.1. RIGHT OF INSPECTION. Subject to reasonable security and
safety regulations and upon reasonable notice, the Issuer, the Bank and the
Trustee, and their respective agents, shall have the right during normal
business hours to inspect the Project.
Section 5.2. SALE, LEASE OR GRANT OF USE BY BORROWER. With the written
consent of the Bank and subject to any other agreement to which the Borrower is
a party or by which it is bound, the Borrower may sell, lease or grant the right
to occupy and use the Project, in whole or in part, to others, provided that:
(a) No such sale, lease or grant shall relieve the Borrower
from the Borrower's obligations under this Agreement or the Notes;
(b) In connection with any such sale, lease or grant the
Borrower shall retain such rights and interests as will permit the
Borrower to comply with the Borrower's obligations under this Agreement
and the Notes;
(c) No such sale, lease or grant shall impair materially the
purposes of the Act to be accomplished by operation of the Project as
herein provided or adversely affect the exclusion from gross income for
federal income tax purposes of the interest on the Bonds.
Section 5.3. INDEMNIFICATION. The Borrower releases the Issuer and the
State from, agrees that the Issuer and the State shall not be liable for, and
shall indemnify the Issuer and the State against, all liabilities, claims, costs
and expenses, including attorneys fees and expenses, imposed upon, incurred or
asserted against the Issuer or the State on account of: (a) any loss or damage
to property or injury to or death of or loss by any person that may be
occasioned by any cause whatsoever pertaining to the acquisition, construction,
equipping, installation, maintenance, operation or use of the Project; (b) any
breach or default on the part of the Borrower in the performance of any covenant
or agreement of the Borrower under this Agreement, the Credit Agreement, the
Project Note or any related document, or arising from any act or failure to act
by the Borrower, or any of the Borrower's agents, contractors, servants,
employees or licensees; (c) the authorization, issuance, failure to issue, sale,
trading, redemption or servicing of the Project Bonds, and the provision of any
information or certification furnished in connection therewith concerning the
Project Bonds, the Project or the Borrower including, without limitation, the
Preliminary Offering Memorandum and the Offering Memorandum (each as defined in
the Bond Placement Agreement), any information furnished by the Borrower for,
and included in, or used as a basis for preparation of, any certifications,
information statements or reports furnished by the Issuer, and any other
information or certification obtained from the Borrower to assure the exclusion
of the interest on the Project Bonds from gross income of the Holders thereof
for federal income tax purposes; (d) the Borrower's failure to comply with any
requirement of this Agreement or the Code pertaining to
19
such exclusion of that interest, including the covenants in Section 5.4 hereof;
and (e) any claim, action or proceeding brought with respect to the matters set
forth in (a), (b), (c) or (d) above.
The Borrower agrees to indemnify the Trustee for, and to hold it
harmless against, all liabilities, claims, costs and expenses, including counsel
fees and expenses, incurred without negligence or willful misconduct on the part
of the Trustee on account of any action taken or omitted to be taken by the
Trustee in accordance with the terms of this Agreement, the Bonds, the Credit
Agreement, the Letter of Credit, the Notes or the Indenture, or any action taken
at the request of or with the consent of the Borrower, including the costs and
expenses of the Trustee in defending itself against any such claim, action or
proceeding brought in connection with the exercise or performance of any of its
powers or duties under this Agreement, the Bonds, the Indenture, the Credit
Agreement, the Letter of Credit or the Notes.
In case any action or proceeding is brought against the Issuer, the
State or the Trustee in respect of which indemnity may be sought hereunder, the
party seeking indemnity promptly shall give notice of that action or proceeding
to the Borrower, and the Borrower upon receipt of that notice shall have the
obligation and the right to assume the defense of the action or proceeding;
provided, that failure of a party to give that notice shall not relieve the
Borrower from any of the Borrower's obligations under this Section unless that
failure materially prejudices the defense of the action or proceeding by the
Borrower. An indemnified party at its own expense may employ separate counsel
and participate in the defense. The Borrower shall not be liable for any
settlement made without the Borrower's consent.
The indemnification set forth above is intended to and shall include
the indemnification of all affected officials, directors, members, officers and
employees of the Issuer, the State and the Trustee, respectively. That
indemnification is intended to and shall be enforceable by the Issuer and the
Trustee, respectively, to the full extent permitted by law.
Section 5.4. BORROWER NOT TO ADVERSELY AFFECT EXCLUSION FROM GROSS
INCOME OF INTEREST ON PROJECT BONDS. The Borrower hereby represents that the
Borrower has taken and caused to be taken, and covenants that the Borrower will
take and cause to be taken, all actions that may be required of the Borrower,
alone or in conjunction with the Issuer, for the interest on the Project Bonds
to be and remain excluded from gross income for federal income tax purposes, and
represents that the Borrower has not taken or permitted to be taken on the
Borrower's behalf, and covenants that the Borrower will not take or permit to be
taken on the Borrower's behalf, any actions that would adversely affect such
exclusion under the provisions of the Code.
Section 5.5. ASSIGNMENT BY ISSUER. Except for the assignment of this
Agreement to the Trustee, the Issuer shall not attempt to further assign,
transfer or convey its interest in the Revenues or this Agreement or create any
pledge or lien of any form or nature with respect to the Revenues or the
payments hereunder.
Section 5.6. BORROWER'S PERFORMANCE UNDER INDENTURE. The Borrower has
examined the Indenture and approves the form and substance of, and agrees to be
bound by, its terms.
20
The Borrower, for the benefit of the Issuer and each Bondholder, shall do and
perform all acts and things required or contemplated in the Indenture to be done
or performed by the Borrower. The Borrower is a third party beneficiary of
certain provisions of the Indenture, and Section 8.05 of the Indenture is hereby
incorporated herein by reference.
Section 5.7. COMPLIANCE WITH LAWS. The Borrower shall, throughout the
term of this Agreement, promptly comply or cause compliance in all material
respects with all laws, ordinances, orders, rules, regulations and requirements
of duly constituted public authorities which may be applicable to the Project or
to the repair and alteration thereof, or to the use or manner of use of the
Project or to the Borrower's and any lessee's operations on the Project Site.
Notwithstanding the foregoing, the Borrower shall have the right to contest or
cause to be contested the legality or the applicability of any such law,
ordinance, order, rule, regulation or requirement so long as, in the opinion of
counsel satisfactory to the Trustee and the Bank, such contest shall not in any
way materially adversely affect or impair the obligations of the Borrower
hereunder or any right or interest of the Trustee or the Bank in, to and under
the Indenture, the Credit Agreement or this Agreement.
Section 5.8. TAXES, PERMITS, UTILITY AND OTHER CHARGES. The Borrower
shall pay and discharge or cause to be paid and discharged, promptly as and when
the same shall become due and payable, all taxes and governmental charges of any
kind whatsoever that may be lawfully assessed against the Issuer, the Trustee,
the Bank or the Borrower with respect to the Project or any portion thereof. The
Borrower may in good faith contest or cause to be contested any such tax or
governmental charge, and in such event may permit such tax or governmental
charge to remain unsatisfied during the period of such contest and may appeal
therefrom unless in the opinion of counsel satisfactory to the Trustee and the
Bank, by such action any right or interest of the Trustee or the Bank in, to and
under the Indenture, the Credit Agreement or this Agreement shall be materially
endangered or the Project or any part thereof, shall become subject to imminent
loss or forfeiture, in which event such tax or governmental charge shall be paid
prior to any such loss or forfeiture. The Borrower shall procure or cause to be
procured any and all necessary building permits, other permits, licenses and
other authorizations required for the lawful and proper acquisition and
installation of the property comprising the Project and for the lawful and
proper use and operation of the Project.
Section 5.9. CONTINUED EXISTENCE. Except as otherwise provided in or
permitted pursuant to the Credit Agreement, or unless otherwise provided by law,
the Borrower shall maintain its existence and continue to be a corporation duly
formed and validly existing and in full force and effect under the laws of the
State of Indiana and duly authorized to transact business in the State.
Section 5.10. REMOVAL OF PORTIONS OF THE PROJECT. Upon the written
consent of the Bank, the Borrower shall have the right, from time to time, to
remove, substitute or modify any portion of the Project, provided that such
removal, substitution or modification shall not impair the character of the
Project as a "project" within the meaning of the Act. Any such substituted or
modified property shall be included under the terms of this Agreement as part of
the Project.
21
(End of Article V)
22
ARTICLE VI.
REDEMPTION OF PROJECT BONDS
Section 6.1. OPTIONAL REDEMPTION. Provided no Event of Default shall
have occurred and be continuing at any time and from time to time, the Borrower
may deliver moneys to the Trustee in addition to Loan Payments or Additional
Payments required to be made and direct the Trustee to use the moneys so
delivered for the purpose of purchasing Project Bonds or of reimbursing the Bank
for drawings on the Letter of Credit used to redeem Project Bonds called for
optional redemption in accordance with the applicable provisions of the
Indenture.
Section 6.2. EXTRAORDINARY OPTIONAL REDEMPTION. The Borrower, with the
prior written consent of the Bank, shall have, subject to the conditions
hereinafter imposed, the option to direct the redemption of the entire unpaid
principal balance of the Project Bonds in accordance with the applicable
provisions of the Indenture upon the occurrence of any of the following events:
(a) The Project shall have been damaged or destroyed to such
an extent that (1) it cannot reasonably be expected to be restored,
within a period of three months, to the condition thereof immediately
preceding such damage or destruction or (2) its normal use and
operation is reasonably expected to be prevented for a period of three
consecutive months;
(b) Title to, or the temporary use of, all or a significant
part of the Project shall have been taken under the exercise of the
power of eminent domain (1) to such extent that the Project cannot
reasonably be expected to be restored within a period of three months
to a condition of usefulness comparable to that existing prior to the
taking or (2) as a result of the taking, normal use and operation of
the Project is reasonably expected to be prevented for a period of
three consecutive months;
(c) As a result of any changes in the Constitution of the
State, the Constitution of the United States of America, or state or
federal laws, or as a result of legislative or administrative action
(whether state or federal) or by final decree, judgment or order of any
court or administrative body (whether state or federal) entered after
the contest thereof by the Issuer, the Trustee or the Borrower in good
faith, this Agreement shall have become void or unenforceable or
impossible of performance in accordance with the intent and purpose of
the parties as expressed in this Agreement, or if unreasonable burdens
or excessive liabilities shall have been imposed with respect to the
Project or the operation thereof, including, without limitation,
federal, state or other ad valorem, property, income or other taxes not
being imposed on the date of this Agreement other than ad valorem taxes
presently levied upon privately owned property used for the same
general purpose as the Project; or
(d) Changes in the economic availability of raw materials,
operating supplies, energy
23
sources or supplies, or facilities (including, but not limited to,
facilities in connection with the disposal of industrial wastes)
necessary for the operation of the Project shall have occurred or
technological or other changes shall have occurred which the Borrower
cannot reasonably overcome or control and which in the Borrower's
reasonable judgment render the operation of the Project uneconomic.
With the prior written consent of the Bank, the Borrower also shall
have the option, in the event that title to or the temporary use of a portion of
the Project shall be taken under the exercise of the power of eminent domain,
even if the taking is not of such nature as to permit the exercise of the
redemption option upon an event specified in clause (b) above, to direct the
redemption, at a redemption price of 100% of the principal amount thereof
prepaid, plus accrued interest to the redemption date, of that part of the
outstanding principal balance of the Project Bonds as may be payable from the
proceeds received by the Borrower (after the payment of costs and expenses
incurred in the collection thereof) in the eminent domain proceeding, provided
that the Borrower shall furnish to the Issuer and the Trustee a certificate of
an Engineer stating that (1) the property comprising the part of the Project
taken is not essential to continued operations of the Project in the manner
existing prior to that taking, (2) the Project has been restored to a condition
substantially equivalent to that existing prior to the taking, or (3) other
improvements have been acquired or made which are suitable for the continued
operation of the Project.
To exercise any option under this Section, the Borrower within 90 days
following the event authorizing the exercise of that option, or at any time
during the continuation of the condition referred to in clause (d) of the first
paragraph of this Section, shall give notice to the Issuer and to the Trustee
specifying the date of redemption, which date shall be not more than ninety days
from the date that notice is mailed, and shall make arrangements satisfactory to
the Trustee for the giving of the required notice of redemption.
The rights and options granted to the Borrower in this Section may be
exercised whether or not the Borrower is in default hereunder; provided, that
such default will not relieve the Borrower from performing those actions which
are necessary to exercise any such right or option granted hereunder.
Section 6.3. MANDATORY REDEMPTION OF PROJECT BONDS. If, as provided in
the Project Bonds and the Indenture, the Project Bonds become subject to
mandatory redemption as a result of a Determination of Taxability, the Borrower
shall deliver to the Trustee, upon the date requested by the Trustee, moneys
sufficient to pay in full the Project Bonds, as appropriate, in accordance with
the mandatory redemption provisions relating thereto set forth in the Indenture.
Section 6.4. ACTIONS BY ISSUER. At the request of the Borrower or the
Trustee, the Issuer shall take all steps required of it under the applicable
provisions of the Indenture or the Bonds to effect the redemption of all or a
portion of the Bonds pursuant to this Article VI.
Section 6.5. REQUIRED DEPOSITS FOR OPTIONAL REDEMPTION. Except with the
prior written consent of the Bank, the Trustee shall not give notice of call to
the Holders pursuant to
24
the optional redemption provisions of Section 4.01 of the Indenture and Sections
6.1 and 6.2 hereof unless, prior to the date by which the call notice is to be
given there shall be on deposit with the Trustee, Eligible Funds sufficient to
redeem at the redemption price thereof, including premium (if any) and interest
accrued to the redemption date, all Project Bonds for which notice of redemption
is to be given.
All amounts paid by the Borrower pursuant to this Article which are
used to pay principal of, premium, if any, or interest on the Bonds, or to
reimburse the Bank for moneys drawn under the Letter of Credit and used for such
purposes, shall constitute prepaid Loan Payments.
(End of Article VI)
25
ARTICLE VII.
EVENTS OF DEFAULT AND REMEDIES
Section 7.1. EVENTS OF DEFAULT. Each of the following shall be an Event
of Default:
(a) The Borrower shall fail to pay when due any Loan Payment;
(b) Any representation or warranty by the Borrower contained
in this Agreement or in any certificate or instrument delivered by the
Borrower pursuant to this Agreement or in connection with the issuance
of the Project Bonds or any Additional Bonds is false or misleading in
any material respect;
(c) The Borrower shall fail to observe and perform any
agreement, term or condition contained in this Agreement, and the
continuation of such failure for a period of 30 days after notice
thereof shall have been given to the Borrower by the Issuer or the
Trustee, or for such longer period as the Issuer and the Trustee may
agree to in writing; provided, that if the failure is other than the
payment of money and is of such nature that it can be corrected but not
within the applicable period, that failure shall not constitute an
Event of Default so long as the Borrower institutes curative action
within the applicable period and diligently pursues that action to
completion;
(d) The Borrower shall: (i) admit in writing its inability to
pay its debts generally as they become due; (ii) have an order for
relief entered in any case commenced by or against it under the federal
bankruptcy laws, as now or hereafter in effect; (iii) commence a
proceeding under any other federal or state bankruptcy, insolvency,
reorganization or similar law, or have such a proceeding commenced
against it and either have an order of insolvency or reorganization
entered against it or have the proceeding remain undismissed and
unstayed for 90 days; (iv) make an assignment for the benefit of
creditors; or (v) have a receiver or trustee appointed for it or for
the whole or any substantial part of its property;
(e) There shall occur an "Event of Default" as defined in the
Indenture.
Notwithstanding the foregoing, if, by reason of Force Majeure, the
Borrower is unable to perform or observe any agreement, term or condition which
would give rise to an Event of Default under paragraph (c) above (other than the
payment of moneys), the Borrower shall not be deemed in default during the
continuance of such inability. However, the Borrower shall promptly give notice
to the Trustee and the Issuer of the existence of an event of Force Majeure and
shall use its best efforts to remove the effects thereof; provided that the
settlement of strikes or other industrial disturbances shall be entirely within
the Borrower's discretion.
The term Force Majeure shall mean, without limitation, the following:
26
(i) acts of God; strikes; lockouts or other
industrial disturbances; acts of public enemies; orders or
restraints of any kind of the government of the United States
of America or of the State or any of their departments,
agencies, political subdivisions or officials, or any civil or
military authority; insurrections; civil disturbances; riots;
epidemics; landslides; lightning; earthquakes; fires;
hurricanes; tornados; storms; droughts; floods; arrests;
restraint of government and people; explosions; breakage,
malfunction or accident to facilities, machinery, transmission
pipes or canals; partial or entire failure of utilities;
shortages of labor, materials, supplies or transportation; or
(ii) any cause, circumstance or event not reasonably
within the control of the Borrower.
The provisions of paragraph (d) above are subject to the condition that
the declaration of an Event of Default due to any of the facts or circumstances
specified therein, and the exercise of remedies upon any such declaration, shall
be subject to any applicable limitations of the United States Bankruptcy Code
affecting or precluding such declaration or exercise during the pendency of or
immediately following any bankruptcy, liquidation or reorganization proceedings.
Section 7.2. REMEDIES ON DEFAULT. Whenever an Event of Default shall
have happened and be continuing, any one or more of the following remedial steps
may be taken:
(a) If and only if acceleration of the principal amount of the
Bonds has been declared pursuant to Section 7.03 of the Indenture, the
Trustee shall declare all Loan Payments and Notes to be immediately due
and payable, whereupon the same shall become immediately due and
payable;
(b) The Bank or the Trustee may have access to, inspect,
examine and make copies of the books, records, accounts and financial
data of the Borrower pertaining to the Project; and
(c) The Issuer or the Trustee may pursue all remedies now or
hereafter existing at law or in equity to collect all amounts then due
and thereafter to become due under this Agreement, the Letter of Credit
or the Notes or to enforce the performance and observance of any other
obligation or agreement of the Borrower under those instruments.
Notwithstanding the foregoing, the Issuer shall not be obligated to
take any step which in its opinion will or might cause it to expend time or
money or otherwise incur liability unless and until a satisfactory indemnity
bond has been furnished to the Issuer at no cost or expense to the Issuer. Any
amounts collected as Loan Payments or applicable to Loan Payments and any other
amounts which would be applicable to payment of Bond Service Charges collected
pursuant to action taken under this Section shall be paid into the Bond Fund and
applied in accordance with the provisions of the Indenture or, if the
outstanding Bonds have been paid and discharged in accordance with the
provisions of the Indenture, shall be paid as provided in
27
Section 5.08 of the Indenture for transfers of remaining amounts in the Bond
Fund.
The provisions of this section are subject to the further limitation
that the rescission by the Trustee of its declaration that all of the Bonds are
immediately due and payable also shall constitute an annulment of any
corresponding declaration made pursuant to paragraph (a) of this Section and
a waiver and rescission of the consequences of that declaration and of the Event
of Default with respect to which that declaration has been made, provided that
no such waiver or rescission shall extend to or affect any subsequent or other
default or impair any right consequent thereon.
Section 7.3. NO REMEDY EXCLUSIVE. No remedy conferred upon or reserved
to the Issuer or the Trustee by this Agreement is intended to be exclusive of
any other available remedy or remedies but each and every such remedy shall be
cumulative and shall be in addition to every other remedy given under this
Agreement, the Letter of Credit or any Note, or now or hereafter existing at
law, in equity or by statute. No delay or omission to exercise any right or
power accruing upon any default shall impair that right or power or shall be
construed to be a waiver thereof, but any such right and power may be exercised
from time to time and as often as may be deemed expedient. In order to entitle
the Issuer or the Trustee to exercise any remedy reserved to it in this Article,
it shall not be necessary to give any notice, other than any notice required by
law or for which express provision is made herein.
Section 7.4. AGREEMENT TO PAY ATTORNEYS' FEES AND EXPENSES. If an Event
of Default should occur and the Issuer or the Trustee should incur expenses,
including attorneys' fees, in connection with the enforcement of this Agreement,
the Letter of Credit or any Note or the collection of sums due thereunder, the
Borrower shall reimburse the Issuer and the Trustee, as applicable, for the
reasonable expenses so incurred upon demand.
Section 7.5. NO WAIVER. No failure by the Issuer or the Trustee to
insist upon the strict performance by the Borrower of any provision hereof shall
constitute a waiver of their right to strict performance and no express waiver
shall be deemed to apply to any other existing or subsequent right to remedy the
failure by the Borrower to observe or comply with any provision hereof.
The Issuer and the Trustee may waive any Event of Default hereunder
only with the prior written consent of the Bank.
Section 7.6. NOTICE OF DEFAULT. The Borrower or the Issuer shall notify
the Trustee and the Bank immediately if it becomes aware of the occurrence of
any Event of Default hereunder or of any fact, condition or event which, with
the giving of notice or passage of time or both, would become an Event of
Default.
Section 7.7. REMEDIES SUBJECT TO BANK'S DIRECTION. Except in the case
of an Event of Default pursuant to Section 7.01(g) or (h) of the Indenture, the
Bank shall have the right to direct the remedies to be exercised by the Trustee,
whether under Article VII of this Agreement or under Article VII of the
Indenture.
28
(End of Article VII)
29
ARTICLE VIII.
MISCELLANEOUS
Section 8.1. TERM OF AGREEMENT. This Agreement shall be and remain in
full force and effect from the date of initial delivery of the Project Bonds
until such time as all of the Bonds shall have been fully paid (or provision
made for such payment) pursuant to the Indenture and all other sums payable by
the Borrower under this Agreement and the Notes shall have been paid, except for
obligations of the Borrower under Sections 4.2 and 5.3 hereof, which shall
survive any termination of this Agreement.
Section 8.2. NOTICES. All notices, certificates, requests or other
communications hereunder shall be in writing and shall be deemed to be
sufficiently given when mailed by first class mail, postage prepaid, and
addressed to the appropriate Notice Address. A duplicate copy of each notice,
certificate, request or other communication given hereunder to the Issuer, the
Borrower, the Bank or the Trustee shall also be given to the others. The
Borrower, the Issuer, the Bank and the Trustee, by notice given hereunder, may
designate any further or different addresses to which subsequent notices,
certificates, requests or other communications shall be sent.
Section 8.3. EXTENT OF COVENANTS OF THE ISSUER; NO PERSONAL LIABILITY.
All covenants, obligations and agreements of the Issuer contained in this
Agreement or the Indenture shall be effective to the extent authorized and
permitted by applicable law. No such covenant, obligation or agreement shall be
deemed to be a covenant, obligation or agreement of any present or future
member, officer, agent or employee of the Issuer or the Commission in other than
his official capacity, and neither the members of the Issuer and the Commission
nor any official executing the Bonds shall be liable personally on the Bonds or
be subject to any personal liability or accountability by reason of the issuance
(or failure to issue) thereof or by reason of the covenants, obligations or
agreements of the Issuer contained in this Agreement or in the Indenture.
Section 8.4. BINDING EFFECT. This Agreement shall inure to the benefit
of and shall be binding in accordance with its terms upon the Issuer, the
Borrower and their respective successors and assigns; provided that this
Agreement may not be assigned by the Borrower (except in connection with a sale,
lease or grant of use pursuant to Section 5.2 hereof) and may not be assigned by
the Issuer except to the Trustee pursuant to the Indenture or as otherwise may
be necessary to enforce or secure payment of Bond Service Charges. This
Agreement may be enforced only by the parties, their assignees and others who
may, by law, stand in their respective places.
Section 8.5. AMENDMENTS AND SUPPLEMENTS. Except as otherwise expressly
provided in this Agreement, any Note or the Indenture, subsequent to the
issuance of the Project Bonds and prior to all conditions provided for in the
Indenture for release of the Indenture having been met, this Agreement or any
Note may not be effectively amended, changed, modified, altered or
30
terminated except in accordance with the applicable provisions of Article XI of
the Indenture.
Section 8.6. EXECUTION COUNTERPARTS. This Agreement may be executed in
any number of counterparts, each of which shall be regarded as an original and
all of which shall constitute but one and the same instrument.
Section 8.7. SEVERABILITY. If any provision of this Agreement, or any
covenant, obligation or agreement contained herein, is determined by a court of
competent jurisdiction to be invalid or unenforceable, that determination shall
not affect any other provision, covenant, obligation or agreement, each of which
shall be construed and enforced as if the invalid or unenforceable portion were
not contained herein. That invalidity or unenforceability shall not affect any
valid and enforceable application thereof, and each such provision, covenant,
obligation or agreement shall be deemed to be effective, operative, made,
entered into or taken in the manner and to the full extent permitted by law.
Section 8.8. GOVERNING LAW. This Agreement shall be deemed to be a
contract made under the laws of the State and for all purposes shall be governed
by and construed in accordance with the laws of the State.
Section 8.9. AMOUNTS REMAINING IN FUNDS. Any amounts in the Bond Fund
remaining unclaimed by the Holders of Bonds for four years after the due date
thereof (whether at stated maturity, by redemption or pursuant to any mandatory
sinking fund requirements or otherwise), shall be paid to the Borrower provided
that if the Trustee shall have drawn on the Letter of Credit, and the Bank is
owed any amount by the Borrower pursuant to the Credit Agreement, such amounts
remaining in the Bond Fund shall belong to and be paid first to the Bank to the
extent of such unpaid amounts. With respect to that principal of and any premium
and interest on the Bonds to be paid from moneys paid to the Borrower or the
Bank pursuant to the preceding sentence, the Holders of the Bonds entitled to
those moneys shall look solely to the Borrower for the payment of those moneys.
Further, any amounts remaining in the Bond Fund (subject to any
limitations in the Indenture) and any other special funds or accounts (other
than the Project Fund and the Rebate Fund) created under this Agreement or the
Indenture after all of the outstanding Bonds shall be deemed to have been paid
and discharged under the provisions of the Indenture and all other amounts
required to be paid under this Agreement, the Notes and the Indenture have been
paid, shall be paid (to the extent that those moneys are in excess of the
amounts necessary to effect the payment and discharge of the outstanding Bonds)
first to the Bank to the extent that any amount is owed by the Borrower to the
Bank under the terms of the Letter of Credit or Credit Agreement, and then to
the Borrower.
(End of Article VIII)
31
IN WITNESS WHEREOF, the Issuer and the Borrower have executed this Loan
Agreement, all as of the date first above written.
CITY OF WABASH, INDIANA
By:
---------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Mayor
(Seal)
ATTEST:
----------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Clerk-Treasurer
32
▇▇▇▇▇▇ YALE INDUSTRIES, INC.
By
----------------------
33
EXHIBIT A
PROJECT
The Project consists of the acquisition, construction, rehabilitation
and equipping of a manufacturing facility located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ near the
City of Wabash, Indiana, for use in the Borrower's business of manufacturing
office and graphic arts equipment
34
EXHIBIT B
PROJECT NOTE
$2,700,000 September 30, 1998
▇▇▇▇▇▇ Yale Industries, Inc., an Indiana corporation (the "Borrower"),
for value received, promises to pay to Bank One Trust Company, NA, as trustee
(the "Trustee") under the Indenture hereinafter referred to, the principal sum
of
TWO MILLION SEVEN HUNDRED THOUSAND DOLLARS
($2,700,000)
and to pay (i) interest on the unpaid balance of such principal sum from and
after the date of this Note at the interest rate or interest rates borne by the
Project Bonds and (ii) interest on overdue principal, and to the extent
permitted by law, on overdue interest, at the interest rate provided under the
terms of the Project Bonds.
This Note has been executed and delivered by the Borrower pursuant to a
certain Loan Agreement (the "Agreement"), dated as of September 1, 1998, between
the City of Wabash, Indiana (the "Issuer") and the Borrower. Terms used but not
defined herein shall have the meanings ascribed to such terms in the Agreement
and the Indenture, as defined below.
Under the Agreement, the Issuer will loan the Borrower the proceeds
received from the sale of the $2,700,000 aggregate principal amount of City of
Wabash, Indiana Adjustable Rate Economic Development Revenue Refunding Bonds,
Series 1998 (▇▇▇▇▇▇ Yale Industries, Inc. Project), dated as of the date of
their issuance (the "Project Bonds"), to be applied to assist in the refunding
of the Prior Bonds (as defined in the Agreement). The Borrower has agreed to
repay such loans by making Loan Payments at the times and in the amounts set
forth in this Note. The Project Bonds will be issued, concurrently with the
execution and delivery of this Note, pursuant to, and are secured by, the Trust
Indenture (the "Indenture"), dated as of September 1, 1998, between the Issuer
and the Trustee.
To provide funds to pay the Bond Service Charges on the Project Bonds
as and when due, or to reimburse the Bank for draws under the Letter of Credit
to make such payments, the Borrower hereby agrees to and shall make Loan
Payments as follows: on each Interest Payment Date the amount equal to interest
due on the Project Bonds on such Interest Payment Date, and on any date upon
which principal of the Project Bonds is due, either pursuant to redemption or
maturity, the amount equal to the principal due and payable on the Project Bonds
on such date and on any redemption date, the amount equal to the principal due
and payable on the Project Bonds pursuant to any redemption provisions of
Section 4.01 of the Indenture or upon maturity of the Project Bonds (each such
day being a "Loan Payment Date"). In addition, to provide
35
funds to pay the Bond Service Charges on the Project Bonds as and when due at
any other time, the Borrower hereby agrees to and shall make Loan Payments on
any other date on which any Bond Service Charges on the Project Bonds shall be
due and payable, whether at maturity, upon acceleration, call for redemption or
otherwise.
If payment or provision for payment in accordance with the Indenture is
made in respect of the Bond Service Charges on the Project Bonds from moneys
other than Loan Payments, this Note shall be deemed paid to the extent such
payments or provision for payment of Bond Service Charges has been made. The
Borrower shall receive a credit against its obligation to make Loan Payments
hereunder to the extent of the moneys delivered to the Trustee under and
pursuant to the Letter of Credit and any other amounts on deposit in the Bond
Fund and available to pay Bond Service Charges on the Project Bonds pursuant to
the Indenture. Subject to the foregoing, all Loan Payments shall be in the full
amount required hereunder.
All Loan Payments shall be payable in lawful money of the United States
of America and shall be made to the Trustee at its corporate trust office for
the account of the Issuer, deposited in the Bond Fund and used as provided in
the Indenture.
Subject to the next to last paragraph hereof, the obligation of the
Borrower to make the payments required hereunder shall be absolute and
unconditional and the Borrower shall make such payments without abatement,
diminution or deduction regardless of any cause or circumstances whatsoever
including, without limitation, any defense, set-off, recoupment or counterclaim
which the Borrower may have or assert against the Issuer, the Trustee, the Bank
or any other person.
This Note is subject to optional, extraordinary optional and mandatory
prepayment, in whole or in part, upon the same terms and conditions, on the same
dates and at the same prepayment prices, as the Project Bonds are subject to
optional, extraordinary optional and mandatory redemption. Any optional or
extraordinary optional prepayment is also subject to satisfaction of any
applicable notice, deposit or other requirements set forth in the Agreement or
the Indenture.
Whenever an Event of Default under Section 7.01 of the Indenture shall
have occurred and, as a result thereof, the principal of and any premium on all
Bonds then outstanding, and interest accrued thereon shall have been declared to
be immediately due and payable pursuant to Section 7.03 of the Indenture, the
unpaid principal amount of and any premium and accrued interest on this Note
also shall be due and payable on the date on which the principal of and premium
and interest on the Project Bonds shall have been declared due and payable;
provided that the annulment of a declaration of acceleration with respect to the
Bonds shall also constitute an annulment of any corresponding declaration with
respect to this Note.
IN WITNESS WHEREOF, the Borrower has signed this Note as of the date
first above written.
36
▇▇▇▇▇▇ YALE INDUSTRIES, INC.
By
-------------------------
37
ENDORSEMENT
Pay, without recourse, to Bank One Trust Company, NA, as Trustee under
the Trust Indenture dated as of September 1, 1998, from the undersigned.
CITY OF WABASH, INDIANA
By
----------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Mayor
(SEAL)
Attest:
---------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Clerk-Treasurer