EXHIBIT 10.15
LOAN AGREEMENT
between
PENNSYLVANIA ECONOMIC DEVELOPMENT FINANCING AUTHORITY
and
OLD MILL HOLDINGS, INC.
Dated
as of
April 1, 1995
$700,000 Pennsylvania Economic Development Financing Authority
Taxable Development Revenue Bonds, 1995 Series A4
(Old Mill Holdings, Inc. Project)
LOAN AGREEMENT
THIS LOAN AGREEMENT dated as of April 1, 1995 between PENNSYLVANIA
ECONOMIC DEVELOPMENT FINANCING AUTHORITY (the "Issuer"), a public
instrumentality and body corporate and politic of the Commonwealth of
Pennsylvania organized and existing under the Pennsylvania Economic Development
Financing Law, as amended, and OLD MILL HOLDINGS, INC. (the 'Borrower"), a
corporation duly organized and validly existing under the laws of the State of
Delaware (the capitalized terms not defined in the recitals being used therein
as defined or otherwise described in Article I of this Agreement),
WITNESSETH THAT:
A. The Issuer is a public instrumentality of the Commonwealth of
Pennsylvania and a body corporate and politic organized and existing under the
Act. Under the Act, the Issuer, at the request of Capital Region Economic
Development Corporation (the ("Local Entity"), is authorized to enter into
agreements providing for the financing of industrial facilities, commercial
facilities, pollution control facilities, public facilities and other facilities
and activities which promote any of the public purposes set forth in the Act.
B. The Issuer has undertaken, at the request and with the approval of the
Local Entity, the financing of certain costs of a 54,000 square foot facility
and related equipment, and working capital for the operation of such facility,
for the manufacture of embroidered apparel, to be located on certain real
property more fully described in Exhibit A attached hereto (the "Project Site").
The Project Site and such facilities are herein collectively called the
'Project". The Project is owned and operated by Needleworks, Inc. (the
"Operator"), a wholly owned subsidiary of the Borrower. A more complete
description of the Project and the estimated costs thereof is set forth in
Exhibit B attached hereto.
C. In order to finance the Project, the Issuer has duly authorized the
issuance and sale of its Taxable Development Revenue Bonds, 1995 Series A4 (Old
Mill Holdings, Inc. Project) (the "Bonds") to be issued under the terms of a
Trust Indenture dated as of the date hereof (as the same may hereafter be
amended or supplemented from time to time, the "Indenture") by and between the
Issuer and CoreStates Bank, N.A., Philadelphia, Pennsylvania, as Trustee.
D. The Issuer has entered into this Agreement with the Borrower for the
purposes of providing for (i) the loan of the proceeds of the Bonds to the
Borrower in order to finance the Project and (ii) the repayment of such loan by
the Borrower in amounts sufficient to pay, when due, the principal of, premium,
if any, on and interest on the Bonds.
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NOW, THEREFORE, intending to be legally bound, the Issuer and the Borrower
hereby agree as follows:
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ARTICLE I.
DEFINITIONS
Section 1.1. USE OF TERMS DEFINED IN INDENTURE. Terms used in this
Agreement which are defined in the Indenture and are not otherwise defined in
this Agreement shall have the meanings set forth in the Indenture unless the
context or use clearly indicates another meaning or intent.
Section 1.2. DEFINITIONS. In addition to the terms defined in the recital
clauses of this Agreement, as used herein:
"Additional Payments" means the amounts required to be paid by the
Borrower pursuant to Section 4.4.
"Agreement" means this Loan Agreement, as amended or supplemented from
time to time.
"Authorized Representative" means, with respect to the Issuer, each person
at the time designated to act on behalf of the Issuer by written certificate
furnished to the Trustee containing the specimen signature of such person and
signed on behalf of the Issuer by its Secretary or Assistant Secretary, and,
with respect to the Borrower, each person at the time designated to act on
behalf of the Borrower by written certificate furnished to the Trustee
containing the specimen signature of such person and signed on behalf of the
Borrower by its Secretary or Assistant Secretary.
"Bond Service" means, for any period or payable at any time, the principal
of, premium, if any, on and interest on the Bonds for that period or payable at
the time whether due on an Interest Payment Date, at maturity or upon
acceleration or redemption.
"Borrower's Agreements, means this Agreement, the Placement Agreement, the
Remarketing Agreement, the Reimbursement Agreement and the Bond Pledge
Agreement.
"Completion Date" means the date of completion of the Project evidenced in
accordance with the requirements of Section 3.6.
"Event of Default" means any of the events described as an Event of
Default in Section 7.1.
"Issuer's Fee" means the amount of $1,400.
"Loan" means the loan by the Issuer to the Borrower of the proceeds of the
Bonds pursuant to Section 4.1 in the original principal amount of $700,000.
"Loan Payments" means the amounts required to be paid by the Borrower in
repayment of the Loan pursuant to Section 4-2.
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"Participating Bank" means the commercial bank, trust company or other
financial institution which has entered into the Participating Bank Agreement
with the Bank and the Reimbursement Agreement with the Borrower, and its
successors and assigns. The initial Participating Bank is Meridian Bank.
"Participating Bank Agreement" means the Participation and Reimbursement
Agreement between the Participating Bank and the Bank relating to the Bonds, as
amended, supplemented or replaced from time to time.
"Placement Agreement" means the Placement Agreement among the Issuer, the
Borrower and PNC Brokerage Corp., as the Placement Advisor, relating to the
Bonds.
"Project Costs" means costs of the Project permitted under the Act,
including, but not limited to, the following:
(a) Costs incurred in acquisition, construction, installation,
equipment or improvement of the Project, including costs incurred in
respect of the Project for preliminary planning and studies;
architectural, engineering, accounting, consulting, legal and other
professional fees and expenses; labor, services and materials; and
qualified refinancing and working capital costs not to exceed amounts
approved by the Issuer:
(b) Fees, charges and expenses incurred in connection with the
authorization, sale, issuance and delivery of the Bonds, including without
limitation bond discount, printing expense, title insurance, recording
fees and the initial fees and expenses of the Trustee, Issuer, Local
Entity, Remarketing Advisor, Bank and Participating Bank;
(c) Payment of interest on the Bonds and fees of the Bank,
Participating Bank, Trustee and Remarketing Advisor accruing during the
period of acquisition, construction and/or equipping of the Project; and
(d) Any other costs, expenses, fees and charges properly chargeable
to the cost of acquisition, construction, installation, equipment or
improvement of the Project.
"Purchase Payments, means the amounts required to be paid by the Borrower
pursuant to Section 4.3.
"Reimbursement Agreement" means the Reimbursement Agreement between the
Participating Bank and the Borrower relating to the Letter of Credit and the
Bonds, as amended, supplemented or replaced from time to time.
"Remarketing Agreement" means the Remarketing Agreement between the
Borrower and the Remarketing Advisor relating to the Bonds, as amended,
supplemented or replaced from time to time.
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"Resolutions" means the resolution or resolutions of the Issuer approving
and authorizing the Bonds, the Indenture and this Agreement.
"Unassigned Issuer's Rights" means all of the rights of the Issuer to
receive Additional Payments under Section 4.4, to be held harmless and
indemnified under Section 5.10, to be reimbursed for attorney's fees and
expenses under Section 7.4, and to give or withhold consent to or approval of
amendments, modifications, termination or assignment of this Agreement, or sale,
transfer, assignment, lease (or assignment of lease) or other disposal of the
Project, under Sections 5.1, 5.2, 5.4, 8.5 and 8.9.
Section 1.3. INTERPRETATION. In 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 Series Issue Date, and
words of any gender include the correlative words of the other genders. In this
Agreement, unless otherwise indicated, all references to particular Articles,
Sections, Subsections or paragraphs are references to the Articles, Sections,
Subsections or paragraphs of this Agreement.
Section 1.4. CAPTIONS, HEADINGS AND TABLE OF CONTENTS. The captions,
headings and table of contents 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 or paragraphs hereof.
(End of Article I)
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ARTICLE II.
REPRESENTATIONS
Section 2.1. REPRESENTATIONS AND FINDINGS OF ISSUER. The Issuer hereby
confirms its findings and represents that:
(a) The Issuer is a public body corporate and politic established in
the Commonwealth of Pennsylvania pursuant to the laws of the Commonwealth
of Pennsylvania (including the Act). Under the Act, the Issuer has the
power to enter into the Indenture, the Placement Agreement and this
Agreement and to carry out its obligations thereunder and to issue the
Bonds to finance the Project.
(b) By adoption of the Resolutions at one or more duly convened
meetings of the Issuer at which a quorum was present and acting
throughout, the Issuer has duly authorized the execution and delivery of
the Indenture, the Placement Agreement and this Agreement and performance
of its obligations thereunder and the issuance of the Bonds.
Simultaneously with the execution and delivery of this Agreement, the
Issuer has duly executed and delivered the Indenture and issued and sold
the Bonds.
(c) Based on representations and information furnished to the Issuer
by or on behalf of the Borrower and the Local Entity, the Issuer has found
that the Borrower is qualified to be a beneficiary of financing provided
by the Issuer pursuant to the Act.
(d) Based on representations and information furnished to the Issuer
by or on behalf of the Borrower, the Issuer has found that the Project (i)
will promote the public purposes of the Act, (ii) is located within the
boundaries of the Commonwealth of Pennsylvania and within the boundaries
of the county, city, town, borough or township which organized the Local
Entity (or within the boundaries of the county in which such city, town,
borough or township is located or in which such Local Entity is certified
by the Pennsylvania Industrial Development Authority to act as an
industrial development agency as defined in the Act), and (iii) will
constitute a project within the meaning of the Act.
(e) The Project has been approved (1) by the Local Entity, as
required by the Act, (2) by the Pennsylvania Secretary of Commerce, as
required by the Act, and (3) by the Issuer by adoption of the Resolutions,
as required by the Act.
(f) The Issuer has not and will not pledge the income and revenues
derived from this Agreement other than pursuant to and as set forth in the
Indenture.
Section 2.2. REPRESENTATIONS OF BORROWER. The Borrower hereby represents
that:
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(a) The Borrower is a corporation duly organized and validly
existing under the laws of the State of Delaware, and has full power and
authority to execute, deliver and perform its obligations under the
Borrower's Agreements and to enter into and carry out the transactions
contemplated thereby. The Borrower is not a Disqualified Contractor.
(b) The Borrower's Agreements have been duly authorized, executed
and delivered by the Borrower and constitute valid and binding obligations
of the Borrower. The execution, delivery and performance of the Borrower's
Agreements by the Borrower do not, and will not, violate any provision of
law applicable to the Borrower or the Borrower's articles of incorporation
or bylaws or any agreement or instrument to which the Borrower is a party
or by which it or any of its properties is bound.
(c) The Project will promote the public purposes of the Act and will
not cause, directly or indirectly, the removal, either in whole or in
part, of a plant, facility or establishment from one area of the
Commonwealth of Pennsylvania to another. The Project is located within the
boundaries of the county, city, town, borough or township which organized
the Local Entity (or within the boundaries of the county in which such
city, town, borough or township is located or in which such Local Entity
is certified by the Pennsylvania Industrial Development Authority to act
as an industrial development agency as defined in the Act).
(d) The Borrower has acquired or will acquire before they are needed
all permits and licenses, and has satisfied or will satisfy other
requirements necessary, for the acquisition, construction, installation
and/or operation of the Project. The Project is a project within the
meaning of the Act and will be operated as such.
(e) The Borrower presently intends to use or operate, or to cause
the Operator to use or operate, the Project in a manner consistent with
the Act until the date on which the Bonds have been fully paid and knows
of no reason why the Project will not be so used or operated.
(f) The proceeds of the Bonds will not exceed the Project Costs.
(g) The Operator is an Affiliate, The Operator is not a Disqualified
Contractor.
(End of Article II)
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ARTICLE III.
ACQUISITION OF PROJECT;
ISSUANCE OF BONDS; PROJECT FUND
Section 3.1. ACQUISITION OF PROJECT. The Borrower (a) has acquired, or on
the Series Issue Date is acquiring, the Project Site and shall construct,
install, equip and/or improve the Project on the Project Site with all
reasonable dispatch and in accordance with the description thereof in Exhibit B
attached hereto and applicable law, (b) shall procure or cause to be procured
all permits and licenses necessary for the prosecution of any and all work on
the Project, and (c) shall pay when due all costs and expenses incurred in
connection with such acquisition, construction, installation, equipment and
improvement from funds made available therefor in accordance with this Agreement
or otherwise. It is understood that the Project is the property of the Borrower
and that any contracts made by the Borrower with respect thereto and any work to
be done by the Borrower on the Project are made or done by the Borrower in its
own behalf and not as agent or contractor for the Issuer. The Borrower may cause
legal title to the Project Site and buildings thereon to be conveyed to an
industrial development corporation for the purpose of obtaining financing for
the benefit of the Borrower through the Pennsylvania Industrial Development
Authority of costs of the Project Site and buildings thereon not financed with
proceeds of the Bonds.
Section 3.2. ADDITIONS AND CHANGES TO PROJECT. The Borrower may, at its
option and at its own cost and expense, at any time and from time to time,
revise the description of the Project in Exhibit B attached hereto and/or make
such additions and changes to the Project as it may deem to be desirable for its
uses and purposes, provided that (i) such additions and changes shall constitute
part of the Project, (ii) the Borrower shall supplement the information
contained in Exhibit B attached hereto by filing with the Issuer and the Trustee
such supplemental information as is necessary to reflect such additions and
changes so that the Issuer and the Trustee will be able to ascertain the nature
and cost of the facilities included in the Project and covered by this Agreement
and (iii) if an addition or change is substantial in relation to the Bonds, the
Borrower shall have first obtained and filed with the Issuer and the trustee an
opinion of Bond Counsel to the effect that such addition or change is authorized
or permitted under the Act. In any case, the Borrower shall obtain the Issuer's
approval of the addition to the Project of any proposed facilities or any other
changes not generally described in Exhibit B attached hereto on the date of
delivery of this Agreement.
Section 3.3. ISSUANCE OF BONDS: APPLICATION OF PROCEEDS. To provide funds
to make the Loan for purposes of paying Project Costs in accordance with Exhibit
B attached hereto, the Issuer will issue the Bonds in the aggregate principal
amount of $700,000. The Bonds will be issued pursuant to the Indenture and will
bear interest, mature and be subject to redemption all as set forth therein. The
Borrower hereby approves the terms and conditions of the Indenture and the
Bonds, and the terms and conditions under which the Bonds will be issued, sold
and delivered.
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The proceeds from the sale of the Bonds (including any bond discount)
shall be loaned to the Borrower pursuant to Section 4.1 and such proceeds (net
of any bond discount) shall be paid over to the Trustee for deposit in the
Project Fund. Pending disbursement pursuant to Section 3.4, the proceeds of the
Bonds so deposited in the Project Fund, together with any investment earnings
thereon, shall constitute a part of the Trust Estate and shall be subject to the
lien of the Indenture pursuant to the granting clauses therein as security for
the obligations described in such granting clauses, and to such end the Borrower
hereby grants to the Trustee as security for such obligations a security
interest in all of the Borrower's right, title and interest in and to the
Project Fund.
Section 3.4. DISBURSEMENTS FROM PROJECT FUND. Subject to the provisions
below, disbursements from the Project Fund shall be made to reimburse or pay the
Borrower, or any person designated by the Borrower, for Project Costs. The
Borrower agrees that the sums so disbursed from the Project Fund will be used
only for the payment of Project Costs, and will not be used for any other
purpose.
Any disbursements from the Project Fund for the payment of the Project
Costs shall be made by the Trustee only upon the written order of an Authorized
Representative of the Borrower, with the written approval of the Participating
Bank, delivered to the Trustee; provided that disbursements made for costs
described in clause (b) of the definition of Project Costs may be made by the
Trustee upon delivery to the Trustee of a closing statement signed by the
respective Authorized Representatives of the Issuer and the Borrower and
approved by the Participating Bank. Each such written order shall be
substantially in the form of the disbursement request attached hereto as Exhibit
C and shall be consecutively numbered and accompanied by invoices or other
appropriate documentation supporting the payments or reimbursements requested.
In case any contract provides for the retention by the Borrower of a portion of
the contract price, there shall be paid from the Project Fund only the net
amount remaining after deduction of any such portion, and only when that
retained amount is due and payable, may it be paid from the Project Fund.
Any moneys in the Project Fund (including the earnings from investments
therein) remaining after the Completion Date and payment, or provision for
payment, in full of the Project Costs shall, at the direction of an Authorized
Representative of the Borrower, be transferred to the General Account of the
Bond Fund and applied as provided in Subsection 5.04(c) of the Indenture.
Section 3.5. BORROWER REQUIRED TO PAY COSTS IN EVENT PROJECT FUND
INSUFFICIENT. If moneys in the Project Fund are not sufficient to pay all
Project Costs, the Borrower nonetheless shall complete the Project in accordance
with Exhibit B attached hereto and shall pay all such additional Project Costs.
The Borrower shall not be entitled to any reimbursement for any such payments
from the Issuer, the Trustee, the Bank, the Participating Bank or any Holder;
nor shall it be entitled to any abatement, diminution or postponement of the
Loan Payments.
Section 3.6. COMPLETION. Except to the extent otherwise approved by the
Issuer, within three years of the date of original deliver and payment for the
Bonds, the Borrower shall have completed the Project and caused all of the
proceeds of the Bonds to be expended for Project Costs in
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accordance with Exhibit B attached hereto or otherwise applied as described in
Section 3.4. The Borrower shall notify the Issuer and the Trustee of the
Completion Date by a certificate signed by an Authorized Representative of the
Borrower stating
(a) the date on which the Project was substantially completed,
(b) that all other facilities necessary in connection with the
Project have been acquired, constructed, installed, equipped and/or
improved,
(c) that the acquisition, construction, installation, equipment
and/or improvement of the Project and such other facilities have been
accomplished in such a manner as to conform with all applicable zoning,
planning, building, environmental and other similar governmental
regulations, and/or that any portion of the Project constituting a
refinancing has been accomplished,
(d) that except as provided in clause (e) below, all COSTS of the
Project then or theretofore due and payable have been paid, and
(e) the amounts which the Trustee shall retain in the Project Fund
for the payment of Project Costs not yet due or for liabilities which the
Borrower is contesting or which otherwise should be so retained and the
reasons therefor.
Such certificate may state that it is given without prejudice to any rights
against third parties which then exist or subsequently may come into being. The
Authorized Representative of the Borrower shall include with such certificate a
statement specifically describing all items of personal property comprising a
part of the Project. The certificate shall be delivered as promptly as
practicable after the Borrower is in a position to certify as to the matters
referred to in clauses (a) through (e) above.
Section 3.7. INVESTMENT AND USE OF FUND MONEYS. At the oral or written
request of an Authorized Representative of the Borrower, any-moneys held as part
of the Bond Fund (except moneys in the Letter of Credit Debt Service Account
created under Section 5.04 of the Indenture and except any moneys representing
principal of, or premium, if any, or interest on, any Bonds which are deemed
paid under Section 10.02 of the Indenture) or the Project Fund shall be invested
or reinvested by the Trustee in Eligible Investments.
(End of Article III)
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ARTICLE IV.
LOAN BY ISSUER; LOAN PAYMENTS;
OTHER PAYMENTS
Section 4.1. LOAN BY ISSUER. Upon the terms and conditions of this
Agreement, the Issuer will make the Loan to the Borrower on the Series Issue
Date in a principal amount equal to the aggregate principal amount of the Bonds.
The Loan shall be deemed fully advanced upon deposit of the proceeds of the
Bonds (net of any bond discount) in the Project Fund pursuant to Section 3.3.
Section 4.2. LOAN PAYMENTS. In consideration of and in repayment of the
Loan, the Borrower shall make, as Loan Payments, payments which correspond, as
to amounts and due dates, to the Bond Service on the Bonds; provided that,
except to the extent that the Participating Bank shall otherwise stipulate by
written notice delivered to the Issuer, the Trustee and the Bank, such payments
shall be made in advance as set forth below in this Section. Amounts received
upon a drawing by the Trustee under the Letter of Credit for the payment of Bond
Service shall be credited against the Loan Payments otherwise payable by the
Borrower corresponding to such Bond Service; provided that the Bank and, if
applicable, the Participating Bank have been fully reimbursed for such drawing
by the Borrower.
To provide funds to pay the Bond Service as and when due as specified
above, the Borrower shall make the Loan Payments on or before the Business Day
next preceding the first Business Day of each month in an amount equal to the
interest due on the Bonds on the Interest Payment Date for such month, while the
Bonds bear interest at a Weekly Rate, or in an amount equal to 1/6 of the
interest due on the Bonds on the next Interest Payment Date while the Bonds bear
interest at a Term Rate and, commencing on the last Business Day of April 1995,
in an amount equal to 1/12 of the next payment of principal of the Bonds due by
mandatory sinking fund redemption or at maturity, taking into account funds held
in the General Account of the Bond Fund under the Indenture which would be
available for such purposes. In addition, to provide funds to pay the principal
of and premium, if any, and interest on the Bonds as and when due at any other
time, the Borrower hereby agrees to make and shall make Loan Payments at least
one Business Day (or earlier if required by the Indenture) prior to the date
when such principal, premium, if any, and interest is due and payable. The
foregoing requirement to make Loan Payments in advance of the corresponding
dates for payment of the principal of and interest on the Bonds may be waived if
and to the extent stipulated by the Participating Bank by written notice
delivered to the Issuer, the Trustee and the Bank; provided that in no event
shall Loan Payments be made later than such corresponding dates.
It is the intention of the Issuer and the Borrower that, notwithstanding
any other provision of this Agreement, the Trustee, as assignee of the Issuer,
shall receive funds from or on behalf of the Borrower (taking into account such
credits for amounts drawn on the Letter of Credit) in such amounts and at such
times as will enable the Issuer to pay when due all of its Bond Service on the
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Bonds and any obligations arising under Section 4.3 and any such obligations
surviving the payment of the Bonds.
All Loan Payments shall be payable in lawful money of the United States of
America and shall be made by, or on behalf of the Borrower, to the Trustee at
its Principal Office for the account of the Issuer and deposited in the General
Account of the Bond Fund created by the Indenture. Such Loan Payments shall be
applied as provided in the Indenture.
The Borrower shall be entitled to credits against the Loan Payments as and
to the extent provided in Subsection 5.04(f) of the Indenture.
Section 4.3. PURCHASE PAYMENTS. To the extent that moneys on deposit in
the Remarketing Proceeds Purchase Account or the Letter of Credit Purchase
Account established under the Indenture are insufficient to pay the full
purchase price of Bonds payable pursuant to Sections 4.01 and 4.02 of the
Indenture on the applicable Purchase Date, the Borrower shall also pay to the
Trustee as Purchase Payments for deposit in the Borrower Purchase Account
established under the Indenture amounts sufficient to cover the shortfalls.
Section 4.4. ADDITIONAL PAYMENTS. The Borrower shall pay as Additional
Payments hereunder: (a) to the Issuer, the Issuer's Fee on the Series Issue Date
and any and all costs and expenses (including reasonable legal fees and
expenses) incurred or to be paid by the Issuer in connection with the issuance
and delivery of the Bonds or otherwise related to actions taken by the Issuer
under this Agreement or the Indenture or any amendment thereof, supplement
thereto or consent or waiver thereunder, including without limitation the
Borrower's pro rata share of any annual charge made by a Rating Service to
maintain a rating on the Bonds; (b) to the Local Entity, the Local Entity's fee
on the Series Issue Date and any and all costs and expenses incurred or to be
paid by the Local Entity in connection with the Project; (c) to the Remarketing
Advisor, the fees and expenses of the Remarketing Advisor under the Indenture
and the Remarketing Agreement for services rendered in connection with the
Bonds; and (d) to the Trustee, the reasonable fees, charges and expenses of the
Trustee and its agents for acting as such under the Indenture.
Section 4.5. OBLIGATIONS UNCONDITIONAL. The obligations of the Borrower to
make Loan Payments, Purchase Payments and Additional Payments 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
Remarketing Advisor, the Bank, the Participating Bank or any other person,
whether express or implied, or any duty, liability or obligation arising out of
or connected with this Agreement, it being the intention of the parties that the
payments required of the Borrower hereunder will be paid in full when due
without any delay or diminution whatsoever. Loan Payments and Purchase Payments
required to be paid by or on behalf of the Borrower hereunder shall be received
by the Issuer or the Trustee as net sums and the Borrower agrees to pay or cause
to be paid all charges against or which might diminish such net sums.
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Section 4.6. ASSIGNMENT OF ISSUER'S RIGHTS. To secure the payment of,
first, the Bond Service, second, the Participating Bank's obligations under the
Participating Bank Agreement, and third, the Borrower's obligations under the
Reimbursement Agreement, the Issuer shall pledge and assign to the Trustee all
the Issuer's rights in, to and under this Agreement (except for the Unassigned
Issuer's Rights), the Revenues and the other property comprising the Trust
Estate. The Borrower consents to such pledge and assignment and agrees to make
or cause to be made Loan Payments and Purchase Payments directly to the Trustee
without defense or set-off by reason of any dispute between the Borrower and the
Trustee. Whenever the Borrower is required to obtain the consent of the Issuer
hereunder, the Borrower shall also obtain the consent of the Trustee; provided
that, except as otherwise expressly stipulated herein or in the Indenture, the
Borrower shall not be required to obtain the Trustee's consent with respect to
the Unassigned Issuer's Rights.
Section 4.7. LETTER OF Credit. Concurrently with the initial delivery of
the Bonds pursuant to Section 2.01 of the Indenture, the Borrower shall cause
the initial Letter of Credit to be issued by the Bank pursuant to the
Participating Bank Agreement, which Letter of Credit (1) shall be substantially
in the same form as the exhibit attached to the Participating Bank Agreement;
(2) shall be dated the date of delivery of the Bonds; (3) shall authorize the
Trustee to draw on the Bank, subject to the terms and conditions thereof, up to
(a) an amount equal to the principal amount of the Bonds (i) to enable the
Trustee to pay the principal amount of the Bonds when due at maturity or upon
redemption or acceleration and (ii) to enable the Trustee to pay the portion of
the purchase price of Bonds tendered to it for purchase and not remarketed
corresponding to the principal amount of such Bonds, plus (b) an amount equal to
the 60 days interest on the Bonds at the Maximum Rate with respect to the Weekly
Rate (i) to enable the Trustee to pay interest on the Bonds when due and (ii) to
enable the Trustee to pay the portion of the purchase price of Bonds tendered to
it for purchase and not remarketed corresponding to the accrued interest on such
Bonds. The Letter of Credit may be extended, amended or replaced by an Alternate
Letter of Credit complying with the provisions of Sections 2.05 and 5.08 of the
Indenture. The Participating Bank, the Participating Bank Agreement and the
Reimbursement Agreement may be replaced by complying with the provisions of
Section 5.08(g) of the Indenture.
It is anticipated that all payments of principal of and interest on the
Bonds, and all payments of purchase price of the Bonds payable upon optional or
mandatory tender for purchase for the payment of which remarketing proceeds are
not available pursuant to Article IV of the Indenture.
will be funded from draws on the Letter of Credit.
The Borrower shall take whatever action may be necessary to maintain the
Letter of Credit in full force and effect during the period required by the
Indenture, including the payment of any transfer fees required by the Bank upon
any transfer of the Letter of Credit to any successor Trustee.
(End of Article IV)
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ARTICLE V.
ADDITIONAL COVENANTS OF BORROWER
Section 5.1. MAINTENANCE OF EXISTENCE. If the Borrower is a corporation,
partnership or other entity, the Borrower shall do all things necessary to
preserve and keep in full force and effect its existence, rights, franchises and
qualification to do business in Pennsylvania and shall not (a) dissolve or
otherwise sell, transfer or dispose of all, or substantially all, of its assets
or (b) consolidate with or merge into any other entity; provided that the
preceding restrictions shall not apply to a transaction to which the Issuer and
the Participating Bank consent in writing if the transferee or the surviving or
resulting entity, if other than the Borrower, by written instrument satisfactory
to the Trustee, assumes and agrees to perform and observe the agreements and
obligations of the Borrower under this Agreement and the provisions of Section
8.9 are satisfied.
Section 5.2. COMPLIANCE WITH LAWS: COMMENCEMENT AND CONTINUATION OF
OPERATIONS AT PROIECT: NO SALE, REMOVAL OR DEMOLITION OF PROJECT. The Borrower
will acquire, construct, install, operate and maintain the Project in such
manner as to comply with the Act and all applicable requirements of federal,
state and local laws and the regulations, rules and orders of any federal, state
or local agency, board, commission or court having jurisdiction over the Project
or the operation thereof, including without limitation applicable zoning ,
planning, building and environmental laws, regulations, rules and orders;
provided that the Borrower shall be deemed in compliance with this Section so
long as it is contesting in good faith any such requirement by appropriate legal
proceedings. The Borrower (or its lessee) shall commence operations at the
Project within three years from the Series Issue Date and shall continue such
operations throughout the term of this Agreement. The Borrower shall not sell,
assign or otherwise dispose of (whether in one transaction or in a series of
transactions) its interest in the Project or any material portion thereof (other
than as permitted by Section 5.1 and other than leases permitted under Section
5.4) or undertake or permit the demolition or removal of the Project or any
material portion thereof without the prior written consent of the Issuer;
provided that the Borrower shall be permitted (i) to sell, transfer, assign or
otherwise dispose of or remove any portion of the Project which is retired or
replaced in the ordinary course of business and (ii) to convey legal title to
the Project Site and buildings thereon to an industrial development corporation
for the purpose of obtaining financing for the benefit of the Borrower through
the Pennsylvania Industrial Development Authority of costs of the Project Site
and buildings thereon not financed with proceeds of the Bonds.
Section 5.3. RIGHT OF INSPECTION. Subject to reasonable security and
safety regulations and upon reasonable notice, the Issuer and the Trustee, and
their respective agents, shall have the right during normal business hours to
inspect the Project.
Section 5.4. LEASE BY BORROWER. The Borrower may lease the Project, in
whole or in part, to the Operator or one or more other Persons, provided that:
14
(a) No such lease shall relieve the Borrower from its obligations
under this Agreement, the Reimbursement Agreement, the Bond Pledge
Agreement or the Remarketing Agreement;
(b) In connection with any such lease the Borrower shall retain such
rights and interests as will permit it to comply with its obligations
under this Agreement, the Reimbursement Agreement, the Bond Pledge
Agreement and the Remarketing Agreement;
(c) No such lease shall impair materially the accomplishment of the
purposes of the Act to be accomplished by operation of the Project as
herein provided;
(d) Any such lease shall require the lessee to operate the Project
as a "project" under the Act as long as the Bonds are outstanding; and
(e) In the case of a lease to a new lessee or an assignment of an
existing lease to a new lessee of substantially all of the Project, such
new lessee (i) shall not be a Disqualified Contractor and (ii) shall have
been approved by the Issuer (such approval not to be unreasonably
withheld).
Section 5.5. FINANCIAL STATEMENTS: BOOKS AND RECORDS. The Borrower shall
prepare or have prepared such financial statements and reports in such form as
are required by the Participating Bank, and shall keep true and proper books of
records and accounts in which full and correct entries are made of all its
business transactions. Copies of such financial statements and reports shall be
provided to the Issuer and the Trustee promptly upon request, and such books of
records and accounts shall be made available for inspection during normal
business hours upon request by the Issuer or the Trustee or their respective
agents.
Section 5.6. TAXES, OTHER GOVERNMENTAL CHARGES AND UTILITY CHARGES. The
Borrower shall pay, or cause to be paid before the same become delinquent, all
taxes, assessments, whether general or special, and governmental charges of any
kind whatsoever that may at any time be lawfully assessed or levied against or
with respect to the Project, including any equipment or related property
installed or brought by the Borrower therein or thereon, and all utility and
other charges incurred in the operation, maintenance, use, occupancy and upkeep
of the Project. With respect to special assessments or other governmental
charges that lawfully may be paid in installments over a period of years, the
Borrower shall be obligated to pay only such installments as are required to be
paid during the term hereof. The Borrower may, at its expense, in good faith
contest any such taxes, assessments and other charges and, in the event of any
such contest, may permit the taxes, assessments or other charges so contested to
remain unpaid during the period of such contest and any appeal therefrom, unless
the Issuer or the Trustee shall notify the Borrower that, in the opinion of
counsel selected by the Issuer or the Trustee, by nonpayment of any such items
the Project or any part thereof will be subject to loss or forfeiture, in which
event such taxes, assessments or charges shall be paid promptly. The Borrower
shall also comply at its own cost and expense with all notices received from
public authorities with respect to the Project.
15
Section 5.7. INSURANCE. The Borrower shall at its own cost and expense
obtain or cause to be obtained insurance policies against such risks, and in
such amounts, as are customarily insured against by entities owning facilities
of like size and type to the Project, paying, as the same become due and
payable, all premiums in respect thereof.
Section 5.8. DAMAGE TO OR CONDEMNATION OF PROJECT. In the event of damage,
destruction or condemnation of part or all of the Project, the Borrower shall
either: (i) restore the Project or (ii) if permitted by the terms of the Bonds,
direct the Issuer to call the Bonds for redemption as set forth in Section 6.2.
Damage to, destruction of or condemnation of all or a portion of the Project
shall not terminate this Agreement or cause any abatement of or reduction in the
payments to be made by the Borrower under this Agreement.
Section 5.9. LITIGATION NOTICE. The Borrower shall give the Trustee, the
Participating Bank, the Remarketing Advisor and the Bank prompt notice of any
action, suit or proceeding pending or threatened against it at law or in equity,
or before any governmental instrumentality or agency, which, if adversely
determined, would materially impair the right of the Borrower to carry on the
business which is contemplated in connection with the Project or would
materially and adversely affect its business, operations, properties, assets or
condition.
Section 5.10. INDEMNIFICATION. The Borrower will indemnify and hold
harmless the Issuer and each member, director, officer, employee, attorney and
agent of the Issuer for and against any and all claims, losses, damages or
liabilities (including the costs and expenses of defending against any such
claims) to which the Issuer or any member, director, officer, employee or agent
of the Issuer may become subject, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise directly or indirectly out 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
construction, maintenance, operation and use of thany breach or default on the
part of the Borrower in the performance of any covenant or agreement of the
Borrower under any of the Borrower's Agreements or any related document, or
arising from any act or failure to act by the Borrower or any of its agents,
contractors, servants, employees or licensees; (c) the authorization, issuance
and sale of the Bonds; (d) any failure by the Borrower to comply with the
provisions of the Act; and (e) any claim, action or proceeding brought with
respect to any matter set forth in clause (a), (b), (c) or (d) above.
The Borrower will indemnify and hold harmless the Trustee and the
Remarketing Advisor for and against all liabilities, claims, costs and expenses
incurred without negligence or bad faith on the part of the Trustee or the
Remarketing Advisor on account of any action taken or omitted to be taken by the
Trustee or the Remarketing Advisor in accordance with the terms of this
Agreement, the Bonds, the Bond Pledge Agreement, the Letter of Credit, the
Remarketing Agreement or the Indenture or any action taken at the request of or
with the consent of the Borrower, including the costs and expenses incurred by
the Trustee and the Remarketing Advisor in defending themselves against any such
claims.
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In case any action or proceeding is brought against the Issuer, the
Remarketing Advisor 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 its obligations under this Section unless (and
then only to the extent) that failure prejudices the defense of the action or
proceeding by the Borrower. At its own expense, an indemnified party may employ
separate counsel and participate in the defense. The Borrower shall not be
liable for any settlement made without its consent, which shall not be
unreasonably withheld.
The indemnification set forth above is intended to and shall (i) include
the indemnification of all affected directors, officers, agents and employees of
the Issuer, the Remarketing Advisor and the Trustee, respectively, and (ii) be
enforceable by the Issuer, the Remarketing Advisor and the Trustee,
respectively, to the full extent permitted by law.
Section 5.11. NONDISCRIMINATION. The Borrower hereby accepts and agrees to
be bound by the nondiscrimination clause set forth in Exhibit D attached hereto.
(End of Article V)
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ARTICLE VI.
REDEMPTION OF BONDS
Section 6.1. OPTIONAL REDEMPTION. Provided no Event of Default shall have
occurred and be subsisting, at any time and from time to time, the Borrower may
deliver or cause to be delivered Loan Payments to the Trustee in addition to the
scheduled Loan Payments required to be made under Section 4.2 and direct the
Trustee to use the Loan Payments so delivered for the purpose of calling Bonds
for optional redemption in accordance with the applicable provisions of the
Indenture and redeeming such Bonds at the redemption price stated in the
Indenture. Such Loan Payments shall be held and applied as provided in Section
5.04 of the Indenture and delivery thereof shall not operate to ▇▇▇▇▇ or
postpone Loan Payments otherwise becoming due or to alter or suspend any other
obligations of the Borrower under this Agreement. Whenever the Bonds are subject
to optional redemption pursuant to the Indenture, the Issuer will, but only upon
direction of the Borrower, direct the Trustee to call the same for redemption as
provided in the Indenture.
Section 6.2. EXTRAORDINARY OPTIONAL REDEMPTION. The Borrower shall have,
subject to the conditions hereinafter imposed, the option to direct the
redemption of the 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 by the Borrower to be
restored, within a period of six months, to the condition thereof
immediately preceding such damage or destruction or (2) its normal use and
operation is reasonably expected by the Borrower to be prevented for a
period of six 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 by the Borrower to be restored within a period of six 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 by the Borrower to be prevented for a period of six
consecutive months.
(c) As a result of any changes in 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
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 burden or excessive liability 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
18
imposed on the date of this Agreement other than ad valorem taxes
presently generally levied upon privately owned property used for the same
general purpose as the Project.
(d) Changes in the economic availability of raw materials, operating
supplies, energy sources or supplies, or facilities (including, but not
limited to, facilities in connection with the disposal of 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 Project uneconomic.
To exercise such option, the Borrower shall, within 90 days following the
event giving rise to the exercise of that option, or at any time during the
continuation of the condition referred to in clause (d) above, give notice to
the Issuer and the Trustee specifying the date on which the Borrower will
deliver the funds required for such redemption, which date shall be not more
than 90 days from the date such notice is mailed and shall make arrangements
satisfactory to the Trustee for the giving of the required notice of redemption.
The amount payable by the Borrower in the event of its exercise of the
option granted in this Section shall be the sum of (i) an amount of money which,
when added to the moneys and investments held to the credit of the Bond Fund,
will be sufficient pursuant to Section 5.04 and Article X of the Indenture to
pay, or provide for the payment of, the redemption price of Bonds on the
redemption date and to fully reimburse the Bank and the Participating Bank with
respect to all drawings on the Letter of Credit, such amount to be paid to the
Trustee, plus (ii) an amount of money equal to the Additional Payments accrued
and to accrue until actual final payment and redemption of the Bonds, such
amount or applicable portions thereof to be paid to the Trustee or to the
Persons to whom those Additional Payments are or will be due. The requirement of
clause (ii) above with respect to Additional Payments to accrue may be met if
provisions satisfactory to the Trustee and the Issuer are made for paying those
amounts as they accrue.
Section 6.3. MANDATORY REDEMPTION. The Borrower shall deliver or cause to
be delivered to the Trustee the moneys needed to redeem the Bonds in accordance
with the mandatory redemption provisions set forth in the Bonds and the
Indenture and to fully reimburse the Bank and the Participating Bank with
respect to all drawings on the Letter of Credit with respect thereto. Whenever
the Bonds are subject to mandatory redemption pursuant to the Indenture, the
Borrower will cooperate with the Issuer and the Trustee in effecting such
redemption.
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.
(End of Article VI)
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ARTICLE VII.
EVENTS OF DEFAULT AND REMEDIES
Section 7.1. EVENTS OF DEFAULT. Each of the following shall be an Event of
Default:
(a) Failure by the Borrower to make or cause to be made any Loan
Payment or Purchase Payment on or prior to the date on which such payment
is due and payable;
(b) Failure by the Borrower to observe and perform any other
agreement, term or condition contained in this Agreement and 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,
such failure shall not constitute an Event of Default so long as the
Borrower institutes curative action within the applicable period and
diligently pursues such action to completion;
(c) The Borrower shall (i) apply for or consent to the appointment
of a receiver, trustee, liquidator or custodian or the like of itself or
of its property, or (ii) admit in writing its inability to pay its debts
generally as they become due, or (iii) make a general assignment for the
benefit of creditors, or (iv) be adjudicated a bankrupt or insolvent, or
(v) commence a voluntary case under the United States Bankruptcy Code, or
file a voluntary petition or answer seeking reorganization, an arrangement
with creditors or an order for relief, or seeking to take advantage of any
insolvency law or file an answer admitting the material allegations of a
petition filed against it in any bankruptcy, reorganization, or insolvency
proceeding, or action shall be taken by it for the purpose of effecting
any of the foregoing, or (vi) have instituted against it, without the
application, approval or consent of the Borrower, a proceeding in any
court of competent jurisdiction, under any law relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking in respect of the
Borrower an order for relief or an adjudication in bankruptcy,
reorganization, dissolution, winding up, liquidation, a composition or
arrangement with creditors, a readjustment of debts, the appointment of a
trustee, receiver, liquidator or custodian or the like of the Borrower or
of all or any substantial part of its assets, or other like relief in
respect thereof under any bankruptcy or insolvency law, and, if such
proceeding is being contested by the Borrower in good faith, the same
shall (A) result in the entry of an order for relief or any such
adjudication or appointment or (B) remain unvacated, undismissed and
undischarged for a period of 60 days;
(d) Any representation or warranty made by the Borrower herein or
any statement in any report , certificate, financial statement or other
instrument furnished in connection
20
with this Agreement or with the purchase of the Bonds shall at any time
prove to have been false or misleading in any material respect when made
or given;
(e) For any reason the Bonds are declared due and payable by
acceleration in accordance with Section 7.03 of the Indenture;
(f) The Trustee receives notice from the Participating Bank (i)
stating that an Event of Default as defined in the Reimbursement Agreement
has occurred and is continuing and (ii) directing the Trustee to call the
Bonds for mandatory purchase or to declare the principal of the
outstanding Bonds immediately due and payable;
(g) The Trustee receives notice from the Bank (i) stating that an
Event of Default as defined in the Participating Bank Agreement has
occurred and is continuing and (ii) directing the Trustee to call the
Bonds for mandatory purchase or to declare the principal of the
outstanding Bonds immediately due and payable;
(h) The Trustee receives notice from the Bank prior to the tenth
Business Day following payment of a drawing under the Letter of Credit for
interest on Bonds which remain outstanding after the application of the
proceeds of such drawing, stating that the Letter of Credit will not be
reinstated with respect to such interest; or
(i) The Borrower fails to complete the Project (except for
immaterial items) and commence operations at the Project within three
years from the Series Issue Date, or fails to maintain (or to cause to be
maintained) or within such period to create and thereafter maintain (or to
cause to be created and thereafter be maintained) at least 50% of the
employment at the Project projected in the Local Entity's application to
the Issuer on behalf of the Borrower pursuant to which the Bonds were
issued, or ceases or permits to be ceased operations at the Project (other
than temporary cessation beyond the control of the Borrower and its
lessee), or sells, assigns or otherwise disposes of (whether in one
transaction or in a series of transactions) its interest in the Project or
any substantial portion thereof (other than leases permitted under Section
5.4) or undertakes or permits any demolition or removal of a substantial
portion of the Project without the prior written consent of the Issuer
(except as otherwise permitted under Section 5.2), or assigns its interest
under this Agreement in violation of Section 8.9.
The declaration of an Event of Default under paragraph (c) above, and the
exercise of remedies upon any such declaration, shall be subject to any
applicable limitations of federal bankruptcy law affecting or precluding that
declaration or exercise during the pendency of or immediately following any
bankruptcy, liquidation or reorganization proceedings.
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Section 7.2. REMEDIES ON DEFAULT.
(a) Whenever an Event of Default shall have happened and be
subsisting, any one or more of the following remedial steps may be taken:
(1) 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 to be immediately due and payable,
whereupon the same shall become immediately due and payable; and
(2) The Issuer or the Trustee may pursue any and 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 or the
Letter of Credit or to enforce the performance and observance of any
other obligation or agreement of the Borrower under this Agreement.
(b) The Borrower covenants that, in case it shall fail to pay or
cause to be paid any Loan Payments or Purchase Payments as and when the
same shall become due and payable whether at maturity or by acceleration
or otherwise, then, upon demand of the Trustee, the Borrower will pay to
the Trustee the whole amount that then shall have become due and payable
hereunder; and, in addition thereto, such further amounts as shall be
sufficient to cover the costs and expenses of collection, including a
reasonable compensation to the Trustee, its agents and counsel, and any
expenses or liabilities incurred by the Issuer or the Trustee. In case the
Borrower shall fail forthwith to pay such amounts upon such demand, the
Trustee shall be entitled and empowered to institute any actions or
proceedings at law or in equity for the collection of the sums SO due and
unpaid.
(c) In case there shall be pending proceedings for the bankruptcy or
reorganization of the Borrower under the federal bankruptcy laws or any
other applicable law, or in case a receiver or trustee shall have been
appointed for the benefit of the creditors or the property of the
Borrower, the Trustee shall be entitled and empowered, by intervention in
such proceedings or otherwise, to file and prove a claim or claims for the
whole amount due hereunder, including interest owing and unpaid in respect
thereof, and, in case of any judicial proceedings, to file such proofs of
claim and other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee allowed in such judicial
proceedings relative to the Borrower, its creditors or its property, and
to collect and receive any moneys or other property payable or deliverable
on any such claims, and to distribute the same after the deduction of its
charges and expenses. Any receiver, assignee or trustee in bankruptcy or
reorganization is hereby authorized to make such payments to the Issuer or
the Trustee, and to pay to the Issuer or the Trustee any amount due it for
compensation and expenses, including counsel fees incurred by it up to the
date of such distribution.
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Notwithstanding the foregoing, the Trustee shall not be obligated to take
any step which in its opinion will or might cause it to expend money or
otherwise incur liability unless and until a satisfactory indemnity bond has
been furnished to the Trustee at no cost or expense to the Trustee. Any amounts
collected as Loan Payments or applicable to Loan Payments and any other amounts
which would be applicable to payment of Bond Service 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 Article X 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 annulment 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 Subsection 7.2(a)(1); 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. REMEDIES NOT 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 the Letter of Credit, or now or hereafter existing at law or in
equity. 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. PAYMENT OF LEGAL 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 or the
Letter of Credit or the collection of sums due thereunder, the Borrower shall
reimburse the Issuer and the Trustee, as applicable, for the 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 and the Participating Bank; provided
that the Trustee shall not waive an Event of Default under Section 7.1(i)
without the prior written consent of the Issuer.
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Section 7.6. NOTICE OF DEFAULT. The Borrower shall notify the Trustee, the
Issuer, the Participating Bank and the Bank immediately if it becomes aware of
the occurrence of any Event of Default hereunder or of any fact, condition or
event which, with the giving of notice or passage of time or both, would become
an Event of Default.
(End of Article VII)
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ARTICLE VIII.
MISCELLANEOUS
Section 8.1. TERM OF AGREEMENT. This Agreement shall be and remain in full
force and effect from the Series Issue Date until such time as all of the-Bonds
shall have been fully paid (or provision made for such payment) pursuant to the
Indenture, the Indenture shall have been released pursuant to Section 10.01
thereof, and all other sums payable by the Borrower under this Agreement and the
Reimbursement Agreement shall have been paid, except for obligations of the
Borrower under Section 5.10, which shall survive any termination of this
Agreement.
Section 8.2. NOTICES. All notices, certificates, requests or other
communications hereunder shall be in writing and shall be deemed to be
sufficiently given when mailed by registered or certified mail, postage prepaid,
and addressed as follows:
If to the Borrower: Old Mill Holdings, Inc.
Annapolis City Marina
Suites 311/312
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇, President
If to the Issuer: Pennsylvania Economic Development Financing
Authority
Department of Commerce
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to the Trustee: CoreStates Bank, N.A., Trustee
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust
Administration
If to the Remarketing PNC Securities Corp.
Advisor: ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Sales Department
25
If to the Bank: PNC Bank, National Association
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Tri-State Group
with a copy to: PNC Bank, National Association
3rd Floor Annex
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Letter of Credit Department
If to the Participating Meridian Bank
Bank: ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Assistant Vice President
The Borrower, the Issuer, the Trustee, the Bank, the Participating Bank and the
Remarketing Advisor, by notice given hereunder to the Persons listed above, may
designate any further or different addresses to which subsequent notices,
certificates, requests or other communications shall be sent.
Section 8.3. LIMITATION OF LIABILITY: NO PERSONAL LIABILITY. In the
exercise of the powers of the Issuer, the Trustee or the Remarketing Advisor
hereunder or under the Indenture, including without limitation the application
of moneys and the investment of funds, neither the Issuer, the Trustee, the
Remarketing Advisor nor their members, directors, officers, employees or agents
shall be accountable to the Borrower for any action taken or omitted by any of
them in good faith and with the belief that it is authorized or within the
discretion or rights or powers conferred. The Issuer, the Trustee, the
Remarketing Advisor and their members, directors, officers, employees and agents
shall be protected in acting upon any paper or document believed to be genuine,
and any of them may conclusively rely upon the advice of counsel and may (but
need not) require further evidence of any fact or matter before taking any
action. In the event of any default by the Issuer hereunder, the liability of
the Issuer to the Borrower shall be enforceable only out of the Issuer's
interest under this Agreement and there shall be no other recourse for damages
by the Borrower against the Issuer, its members, directors, officers, attorneys,
agents and employees, or any of the property now or hereafter owned by it or
them. 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, director, officer, agent or employee of the Issuer, and no official
executing the Bonds shall be liable personally on the Bonds or be subject to any
personal
26
liability or accountability by reason of the issuance thereof or by reason
of-the covenants, obligations or agreements of the Issuer contained in this
Agreement or 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 or transfer of
assets pursuant to Section 5.1 or in compliance with Section 8.9) 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. This
Agreement may be enforced only by the parties, their assignees and others who
may, by law, stand in their respective places. In addition, the Remarketing
Advisor, the Bank and Participating Bank are hereby explicitly recognized as
third party beneficiaries of this Agreement.
Section 8.5. AMENDMENTS. Except as otherwise expressly provided in this
Agreement or the Indenture, subsequent to the issuance of the Bonds and unless
and until all conditions provided for in the Indenture for release of the
Indenture having been met, this Agreement may not be effectively amended,
modified or terminated except by an instrument in writing signed by the Borrower
and the Issuer, consented to by the Trustee, and in accordance with the
provisions of Article IX of the Indenture, as applicable.
Section 8.6. 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 one and the same instrument.
Section 8.7. SEVERABILITY. If any provision of this Agreement is
determined by a court to be invalid or unenforceable, such determination shall
not affect any other provision hereof, each of which shall be construed and
enforced as if the invalid or unenforceable portion were not contained herein.
Such invalidity or unenforceability shall not affect any valid and enforceable
application thereof, and each such provision shall be deemed to be effective,
operative and entered into in the manner and to the full extent permitted by
applicable law.
Section 8.8. GOVERNING LAW. This Agreement shall be deemed to be a
contract made under the laws of the Commonwealth of Pennsylvania and for all
purposes shall be governed by and construed in accordance with the laws of the
Commonwealth of Pennsylvania.
Section 8.9. ASSIGNMENT. The Borrower shall not assign this Agreement or
any interest of the Borrower herein, either in whole or in part, without the
prior written consent of the Trustee, which consent shall be given if the
following conditions are fulfilled: (i) the assignee assumes in writing all of
the obligations of the Borrower hereunder; (ii) neither the validity nor the
enforceability of this Agreement shall be adversely affected by such assignment;
(iii) the Project shall continue in the opinion of Bond Counsel to be a
"project, as such term is defined in the Act after such assignment; (iv) the
assignee shall not be a Disqualified Contractor; and (v) consent by the Issuer,
which consent shall not be unreasonably withheld. For purposes of this Section,
no
27
foreclosure by the Participating Bank, or conveyance in lieu thereof, or other
transfer to the Participating Bank or an affiliate of Participating Bank, shall,
of itself, be deemed an assignment for purposes of this Section or a sale,
transfer, assignment or other disposition for purposes of Section 5.2. Subject
to the foregoing, the terms "Issuer". "Borrower", "Trustee" and "Remarketing
Advisor" shall, where the context requires, include the respective successors
and assigns of such persons. No assignment pursuant to this Section shall
release the Borrower from its obligations under this Agreement, unless the
Participating Bank has consented to such release.
Section 8.10. RECEIPT OF INDENTURE. The Borrower hereby acknowledges that
it has received an executed copy of the Indenture and is familiar with its
provisions, and agrees that it is subject to and bound by the terms thereof and
it will take all such actions as are required or contemplated of it under the
Indenture to preserve and protect the rights of the Trustee and of the Holders
and the Bank and the Participating Bank thereunder and that it will not take any
action which would cause a default thereunder. Any redemption of Bonds prior to
maturity shall be effected as provided in the Indenture.
(End of Article VIII)
28
IN WITNESS WHEREOF, the Issuer and the Borrower, intending to be legally
bound, have caused this Agreement to be duly executed in their respective names,
all as of the date first above written.
[SEAL] PENNSYLVANIA ECONOMIC DEVELOPMENT
FINANCING AUTHORITY
Attest By:
Assistant Secretary Executive Director
[SEAL] OLD MILL HOLDINGS, INC.
Attest By:
Secretary President
This execution page is part of the Loan Agreement dated as of April 1,
1995 between Pennsylvania Economic Development Financing Authority and Old Mill
Holdings, Inc.
29
EXHIBIT A
LEGAL DESCRIPTION
A-1
EXHIBIT B
OLD MILL HOLDINGS, INC. PROJECT
The Project consists of refinancing the costs of a 54,000 square foot
building and related equipment, located on approximately 8.65 acres of land at
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Upper ▇▇▇▇▇▇ Township, Dauphin County,
Pennsylvania, owned and operated by the Operator as a facility for the
manufacture of embroidered apparel, and the financing of working capital for the
Operator.
Bond
PROCEEDS TOTAL
Qualified Refinancing
Costs Approved by
Issuer $590,000 $590,000
Qualified Working
Capital Costs
Approved by Issuer 90,376 90,376
Costs of Issuance 19,624 19,624
------------ -------------
Total $700,000 $700,000
B-1
EXHIBIT C
FORM OF DISBURSEMENT REQUEST
STATEMENT NO. ________ REQUESTING DISBURSEMENT OF FUNDS
FROM PROJECT FUND PURSUANT TO SECTION 3.4 OF THE LOAN
AGREEMENT DATED AS OF APRIL 1, 1995 ("LOAN AGREEMENT")
BETWEEN PENNSYLVANIA ECONOMIC DEVELOPMENT FINANCING
AUTHORITY ("ISSUER") AND OLD MILL HOLDINGS, INC. ("BORROWER").
The terms used herein shall have the meanings specified for such terms in
or pursuant to the Loan Agreement. Pursuant to Section 3.4 of the Loan
Agreement, the undersigned Authorized Representative of the Borrower hereby
requests and authorizes the Trustee to pay to the Borrower or to the person(s)
listed on the Disbursement Schedule hereto out of the moneys deposited in the
Project Fund the aggregate sum of $ - to reimburse the Borrower or to pay such
person(s), as indicated in the Disbursement Schedule, for the items of Project
Cost listed in the Disbursement Schedule.
In connection with the foregoing request and authorization, the
undersigned hereby certifies that:
(a) Each item for which disbursement is requested hereunder is due, is
an item of incurred Project Cost properly reimbursable or payable
out of the Project Fund in accordance with the terms and conditions
of the Loan Agreement and none of those items has formed the basis
for any disbursement heretofore made from the Project Fund.
(b) Each such item is or was necessary or appropriate in connection with
the acquisition, construction, equipment and/or qualified
refinancing of the Project.
(c) The reimbursement or payment of the Project Costs requisitioned
hereby will comply with the restrictions contained in Section 3.4 of
the Loan Agreement.
(d) This statement and all exhibits hereto, including the Disbursement
Schedule, shall constitute full warrant, protection and authority to
the Trustee for its actions taken pursuant hereto.
C-1
Dated:
OLD MILL HOLDINGS, INC.
By
Authorized Representative
Approved by Meridian Bank
By
Authorized Signatory
DISBURSEMENT SCHEDULE
TO STATEMENT NO. ____ REQUESTING AND AUTHORIZING DISBURSEMENT OF FUNDS
FROM PROJECT FUND PURSUANT TO SECTION 3.4 OF THE LOAN AGREEMENT DATED AS
OF APRIL 1, 1995 BETWEEN PENNSYLVANIA ECONOMIC DEVELOPMENT FINANCING
AUTHORITY AND OLD MILL HOLDINGS, INC.
PAYEE AMOUNT PURPOSE
C-2
EXHIBIT D
NONDISCRIMINATION CLAUSE
During the term of this contract, the Borrower agrees as to itself and
each tenant of the Project controlling, controlled by or under common control
with the Borrower (each of the Borrower and each such tenant, a "Contractor") as
follows:
1. Contractor shall not discriminate against any employee, applicant for
employment, independent contractor or any other person because of race, color,
religious creed, handicap, ancestry, national origin, age or sex. Contractor
shall take affirmative action to insure that applicants are employed, and that
employees or agents are treated during employment, without regard to their race,
color, religious creed, handicap, ancestry, national original age or sex. Such
affirmative action shall include, but not limited to: employment, upgrading,
demotion or transfer, recruitment or recruitment advertising; layoff or
termination; rates of pay or other forms of compensation; and selection for
training. Contractor shall post in conspicuous places, available to employees,
applicants for employment and other persons, a notice to be provided by the
contracting agency setting forth the provisions of this nondiscrimination
clause.
2. Contractor shall in advertisements or requests for employment placed by
it or on its behalf, state that all qualified applicants will receive
consideration for employment without regard to race, color. religious creed,
handicap, ancestry, national origin, age or sex.
3. Contractor shall send to each labor union or workers' representative
with which it has a collective bargaining agreement or other contract or
understanding, a notice advising said labor union or workers' representative of
its commitment to this nondiscrimination clause. Similar notice shall be sent to
every other source of recruitment regularly utilized by Contractor.
4. It shall be no defense to a finding of noncompliance with this
nondiscrimination clause that Contractor had delegated some of its employment
practices to any union, training program or other source of recruitment which
prevents it from meeting its obligations. However, if the evidence indicates
that Contractor was not on notice of the third-party discrimination or made a
good faith effort to correct it, such factor shall be considered a mitigating
circumstance in determining appropriate sanctions.
5. Where the practices of a union or of any training program or other
program of recruitment will result in the exclusion of minority group persons,
so that Contractor will be unable to meet its obligations under this
nondiscrimination clause, Contractor shall then employ and fill vacancies
through other nondiscriminatory employment procedures.
6. Contractor shall comply with all applicable state and federal laws
prohibiting discrimination in hiring or employment opportunities. In the event
of Contractor's noncompliance with the nondiscrimination clause of this contract
or with any such laws, the Loan Payments may be
D-1
accelerated, and Contractor may be declared temporarily ineligible for further
Commonwealth of Pennsylvania contracts, and other sanctions may be imposed and
remedies invoked.
7. Contractor shall furnish all necessary employment documents and records
to, and permit access to its books, records and accounts by, the contracting
agency for purposes of investigation to ascertain compliance with the provisions
of this clause. If Contractor does not possess documents or records reflecting
the necessary information requested, it shall furnish such information on
reporting forms supplied by the contracting agency.
8. Contractor shall actively recruit minority subcontractors and women
subcontractors or subcontractors with substantial minority or women
representation among their employees.
9. Contractor shall include the provisions of this nondiscrimination
clause in every subcontract, so that such provisions will be binding upon each
subcontractor.
10. Contractor obligations under this clause are limited to Contractor's
facilities within Pennsylvania or, where the contract is for purchase of goods
manufactured outside of Pennsylvania, the facilities at which such goods are
actually produced.
D-2