FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal
year ended December 31, 1994
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
to
Commission file number 0-14714
ASTEC INDUSTRIES, INC. .
(Exact name of registrant as specified in its charter)
Tennessee 62-0873631
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P. O. Box 72787, 4101 Jerome Avenue, Chattanooga, Tennessee 37407
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (615) 867-4210
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
NONE NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.20 par value
(Title of class)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Exhibit Index Appears at Page
<PAGE>
(Form 10-K Cover Page - Continued)
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
State the aggregate market value of the voting stock held by non-
affiliates of the registrant. The aggregate market value shall be
computed by reference to the price at which the stock was sold,
or the average bid and asked prices of such stock, as of a specified
date within 60 days prior to the date of filing:
$93,105,764 based upon the closing sales price in the NASDAQ
National Market System on March 10, 1995, using beneficial
ownership of stock rules adopted pursuant to Section 13 of the
Securities Exchange Act of 1934 to exclude voting stock owned by
all directors and executive officers of the registrant, some of
whom may not be held to be affiliates upon judicial
determination.
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
Indicate the number of shares outstanding of each of the
registrant's classes of common stock, as of the latest practicable
date:
As of March 10, 1995
Common Stock, par value $.20, 10,001,858 shares
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following documents have been
incorporated by reference into the Parts of this Annual Report on
Form 10-K indicated:
Document Form 10-K
Proxy Statement relating to Part III
Annual Meeting of Shareholders
to be held on April 27, 1995
ASTEC INDUSTRIES, INC.
1994 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
Page
PART I
Item 1. Business
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Submission of Matters to a Vote of Security Holders
Executive Officers of the Registrant
PART II
Item 5. Market for Registrant's Common Equity and Related
Shareholder Matters
Item 6. Selected Financial Data
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Item 8. Financial Statements and Supplementary Data
Item 9. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure
PART III
Item 10. Directors and Executive Officers of the Registrant
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and
Management
Item 13. Certain Relationships and Related Transactions
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K
Appendix A
SIGNATURES
<PAGE>
PART I
Item 1. BUSINESS
General
Astec designs, engineers, manufactures and markets
equipment and components used primarily in road building and
related construction activities. The Company's products are used
in each phase of road building, from quarrying and crushing the
aggregate to application of the road surface. The Company also
manufactures certain equipment and components unrelated to
road construction including trenching and excavating equipment,
environmental remediation equipment, log loading and industrial
heat transfer equipment. The Company holds over 100 United
States and foreign patents, and has been responsible for many
technological and engineering innovations in the industry. The
Company currently manufactures over 125 different products
which it markets both domestically and internationally. In
addition to plant and equipment sales, the Company manufactures
and sells replacement parts for equipment in each of its product
lines. The distribution and sale of replacement parts is an
integral part of the Company's business.
The Company's seven operating divisions and
subsidiaries, each of which operates as an autonomous company,
are: (i) the Astec division (effective January 1, 1995 Astec,
Inc.), which manufactures a line of hot mix asphalt plants, soil
purification and environmental remediation equipment and
related components; (ii) Telsmith, Inc. which manufactures
aggregate processing equipment for the production and
classification of sand, gravel and crushed stone for road and other
construction applications; (iii) Heatec, Inc. which manufactures
thermal oil heaters, asphalt heaters and other heat transfer
equipment used in the Company's asphalt mixing plants and in
other industries; (iv) Roadtec, Inc., which manufactures milling
machines used to recycle asphalt and concrete, asphalt paving
equipment and material transfer vehicles; (v) Trencor, Inc.
which manufactures chain and wheel trenching equipment,
excavating equipment and log loaders; (vi) Wibau-Astec
Maschinenfabrik GmbH, located in Germany, which represents
Astec in international sales and manufactures and sells Wibau
parts in Europe, Africa and the Middle East and Astec continuous
mix plants in Europe and the Eastern bloc countries; (vii) Gibat
Ohl Ingenieurgesellschaft fur Anlagentechnik mbH, located in
Germany, which manufactures and sells batch asphalt plants,
parts and controls in Europe and the Eastern bloc countries.
The Company's strategy is to become the high quality, low
cost producer in each of its product lines while continuing to
develop innovative new products for its customers. Management
believes that this strategy will provide the Company with a
competitive advantage in the marketplace and position it to
capitalize on rebuilding the infrastructure in the United States
and abroad.
Products
The Company operates in a single business segment. In
1994 it manufactured and marketed products in five principal
categories: (i) hot mix asphalt plants, soil purification and
environmental remediation equipment and related components;
(ii) mobile construction equipment, including asphalt pavers
from Roadtec, milling machines and material transfer vehicles
and other auxiliary equipment; (iii) hot oil heaters, asphalt
heaters and other heat transfer equipment; (iv) aggregates
processing equipment; and (v) chain and wheel trenching and
excavating equipment. The table following shows the Company's
sales for each product category which accounted for 10% or
more of consolidated revenue for the periods indicated.
Years Ended December 31
1994 1993 1992
(in thousands)
Asphalt plants and components $100,514 $88,116 $81,438
Aggregate processing equipment 38,823 40,108 33,298
Trenching and excavating equipment 25,867 16,535 14,803
Mobile construction equipment 30,291 22,120 14,660
<PAGE>
Financial information in connection with the Company's
international sales is included in Note 1 to "Notes to Consolidated
Financial Statements - Segment Information", appearing at Page
A-11 of this report.
Hot Mix Asphalt Plants
The Astec division designs, engineers, manufactures and
markets a complete line of portable, stationary and relocatable
hot mix asphalt plants and related components under the "ASTEC"
trademark. An asphalt mixing plant typically consists of heating
and storage equipment for liquid asphalt (manufactured by
Heatec), cold feed bins for storing aggregates, a drum mixer for
drying, heating and mixing, a baghouse composed of air filters
and other pollution control devices, hot storage bins or silos for
temporary storage of hot mix asphalt and a control house. The
Company introduced the concept of plant portability in 1979. Its
current generation of portable asphalt plants is marketed as the
"Six Pack" and consists of six portable components which can be
disassembled and moved to the construction site to reduce
relocation expenses. Plant portability represents an industry
innovation developed and successfully marketed by the Company.
The components in the Company's asphalt mixing plants
are fully automated and use microprocessor based control
systems for efficient operation. The plants are manufactured to
meet or exceed federal and state clean air standards.
The Company has also developed specialized asphalt
recycling equipment for use with its hot mix asphalt plants.
Many of the existing Astec products are suited for blending,
vaporizing, drying and incinerating contaminated products. As a
result, the Astec division has developed a line of thermal
purification equipment for the remediation of petroleum
contaminated soil.
Mobile Construction Equipment
Roadtec designs, engineers, manufactures and markets
asphalt pavers, material transfer vehicles and milling machines.
Roadtec engineers emphasize simplicity, productivity,
versatility and accessibility in product design and use.
Asphalt Pavers. Asphalt pavers are used in the
application of hot mix asphalt to the road surface. Roadtec
pavers have been designed to minimize maintenance costs while
exceeding road surface smoothness requirements. A new
effective and efficient paver has been introduced which must be
used with the material transfer vehicle. Other additional new
paver models have also been introduced in 1994.
Material Transfer Vehicles. The "Shuttle Buggy" is a
mobile, self-propelled material transfer vehicle which allows
continuous paving by separating truck unloading from the paving
process while remixing the asphalt surface material. A typical
asphalt paver must stop paving to permit truck unloading of
asphalt mix. By permitting continuous paving, the "Shuttle
Buggy" allows the asphalt paver to produce a smoother road
surface. Certain states are now requiring the use of the "Shuttle
Buggy" on their jobs.
Milling Machines. Roadtec milling machines are designed
to remove old asphalt from the road surface before new asphalt
mix is applied. They are manufactured with a simplified control
system, wide conveyors, direct drives and a wide range of
horsepower and cutting capabilities to provide versatility in
product application. Additional models were introduced in 1994
to meet contractor needs.
Heat Transfer Equipment
Heatec designs, engineers, manufactures and markets a
variety of heaters and heat transfer processing equipment under
the "HEATEC" trade name for use in various industries including
the asphalt industry.
Asphalt Heating Equipment. Heatec manufactures a
complete line of heating and liquid storage equipment for the
asphalt paving industry. The equipment includes portable and
stationary tank models with capacities up to 35,000 gallons
each. Heaters are offered in both direct-fired and helical coil
models.
Industrial Heating Equipment. Heatec builds a wide
variety of industrial heaters to fit a broad range of applications,
including equipment for emulsion plants, roofing material
plants, refineries, chemical processing, rubber plants and the
agribusiness. Heatec has the technical staff to custom design
heating systems and has systems operating as large as
40,000,000 BTU's per hour.
Aggregates Processing Equipment
Telsmith has served the quarry business since 1906.
Telsmith designs, engineers, manufactures and markets a wide
range of portable and stationary equipment for the production
and classification of sand, gravel, and quarried stone for road and
other construction applications. Telsmith's products include
jaw, cone and impact crushers; several types of feeders which
transport the aggregate from the storage site to the crushing
equipment; vibrating screens to separate the aggregate into
various mixes; and washing and conveying equipment. Telsmith
markets its products individually and as complete systems,
incorporating microprocessor based automated controls for the
efficient operation of its equipment.
Trenching and Excavating Equipment
Trencor, Inc. designs, engineers, manufactures and
markets chain and wheel trenching equipment, canal excavators,
rock saws, road miners and log loading equipment. In August
1994, Trencor acquired the product line and related
manufacturing rights, trademarks, patents, intellectual
property and engineering designs of Capitol Trencher
Corporation ("CTC"), also a manufacturer of trenching and
excavation equipment. This purchase excluded the manufacturing
plant and equipment operated by CTC. The acquisition of the CTC
product line strengthens and broadens Trencor's position in the
construction market. The fabrication of the CTC product line has
been relocated to Trencor's new facility in Grapevine, Texas.
Chain Trenchers. Trencor chain trenching machines
utilize a heavy duty chain (equipped with cutting teeth attached
to steel plates) wrapped around a long moveable boom. These
machines, with weights up to 400,000 pounds, are capable of
cutting a trench up to eight feet wide and thirty feet deep through
rock. Trencor also makes foundation trenchers used in areas
where drilling and blasting are prohibited.
Wheel Trenchers. Trencor wheel trenching machines are
used in pipeline excavation in soil and soft rock. The wheel
trenchers weigh up to 390,000 pounds and have a trench
capacity of up to seven feet in width and ten feet in depth.
Canal Excavator. Trencor canal excavators are used to
make finished and trimmed trapezoidal canal excavations within
close tolerances. The canals are primarily used for irrigation
systems.
Rock Saws. Trencor manufactures a rock saw which is
utilized for laying water and gas lines, fiber optics cable,
constructing highway drainage systems and for other
applications.
Road Miners. Trencor manufactures four "Road Miner"
models weighing up to 400,000 pounds with an attachment
which allows it to cut a path up to twelve and a half feet wide and
five feet deep on a single pass. The Road Miner has applications
in the road construction industry and in mining and aggregates
processing operations.
Log Loaders. Trencor also manufactures several different
models of log loaders. Its products include mobile/truck mounted
models, as well as track mounted and stationary models, each of
which is used in harvesting and processing wood products. The
equipment is sold under the Log-Hog name.
Manufacturing
The Company manufactures many of the component parts
and related equipment for its products. In many cases, the
Company designs, engineers and manufactures custom component
parts and equipment to meet the particular needs of individual
customers. Manufacturing operations during 1994 took place at
seven separate locations. The Company's manufacturing
operations consist primarily of fabricating steel components and
the assembly and testing of its products to ensure quality control
standards have been achieved.
Marketing
The Company markets its products both domestically and
internationally. The principal purchasers of the Company's
products include highway and heavy equipment contractors,
utility contractors, pipeline contractors, open mine operators,
quarry operators and foreign and domestic governmental
agencies. The Astec division (now Astec, Inc.) sells directly to
its customers with domestic, soil remediation and international
sales departments. Astec, Inc. also has a branch in Chino,
California to service customers in the western United States.
Telsmith products are sold through two leased branch locations
in San Francisco, California and Sharon, Massachusetts, as well
as through a combination of direct sales, domestic and
international and dealer sales. Heatec, Roadtec and Trencor
products are marketed through a combination of direct sales and
dealer sales. Approximately 18 manufacturers' representatives
sell Heatec products for applications in industries other than the
asphalt industry with such sales comprising approximately 30%
of Heatec's sales volume during 1994. Direct sales employees
are paid salaries and are generally entitled to commissions after
obtaining certain sales quotas. See "Business - Properties"
The Company's international sales efforts are
decentralized with each division and subsidiary maintaining
responsibility for its own international marketing efforts.
German Subsidiaries
Effective July 1, 1993, the Company entered into an
agreement with Putzmeister-Werk Maschinenfabrik GmbH
("Putzmeister"), a company organized under the laws of the
Federal Republic of Germany, to form a new German limited
liability company, Wibau-Astec, to be jointly owned by the
Company and Putzmeister (the "Joint Venture"). Wibau-Astec
designs, engineers and manufactures asphalt plants, stabilization
plants, asphalt and thermal heaters, hot storage systems and soil
remediation equipment (including their respective parts and
components) which it markets in Europe, Africa and the Middle
East. Initially Putzmeister owned 50% of the Joint Venture and
Astec owned 50%. In consideration for their respective
interests in the Joint Venture, Putzmeister contributed the
operating assets, other than real estate, and related liabilities of
its asphalt plant manufacturing business located in Germany to
the Joint Venture; and Astec contributed, among other things, an
interest in the Company's technology related to asphalt plants,
asphalt heating equipment and soil remediation equipment. In
November 1994, Astec acquired the other 50% interest in
Wibau-Astec, making it a wholly owned subsidiary of the
Company.
In an unrelated transaction, Astec acquired Gibat Ohl
Ingenieurgesellschaft fur Anlagentechnik mbH located in
Hasselroth, Germany for cash and Astec stock in October 1994.
Gibat Ohl is a manufacturer of asphalt batch plants and related
equipment. The management of Gibat Ohl is composed of former
Wibau employees who are very knowledgeable about the asphalt
plant market. The completion of these acquisitions strengthens
Astec's position in the European market.
Seminars and Technical Bulletins
The Company periodically conducts technical and service
seminars which are primarily for contractors, employees and
owners of asphalt mixing plants. In 1994, approximately 200
representatives of contractors and owners of hot mix asphalt
plants attended seminars held by the Company in Chattanooga,
Tennessee. These seminars, which are taught by Company
management and employees, cover a range of subjects including
technological innovations in the hot mix asphalt business and
other industry segments in which the Company manufactures
products.
In addition to the seminars, the Company published a
number of detailed technical bulletins covering various
technological and business issues relating to the asphalt
industry.
Patents and Trademarks
The Company seeks to obtain patents to protect the novel
features of its products. The Company and its subsidiaries hold
67 United States patents and 39 foreign patents. There are 24
United States and 16 foreign patent applications pending.
The Company and its subsidiaries have approximately 40
trademarks registered in the United States, including logos for
Astec, Telsmith, Roadtec and Trencor, and the names ASTEC,
TELSMITH, HEATEC, LOG HOG, ROADTEC and TRENCOR.
Many of
these trademarks are also registered in foreign countries,
including Canada, Great Britain, Mexico, Australia and Japan.
The Company and its subsidiaries also license their
technology to manufacturers.
Engineering and Product Development
The Company dedicates substantial resources to its
engineering and product development. At December 31, 1994,
the Company and its subsidiaries had 143 individuals employed
domestically full-time in engineering and design capacities.
Raw Materials
Raw materials used by the Company in the manufacture of
its products include carbon steel and various types of alloy steel
which are normally purchased from steel mills and other
sources.
Seasonality and Backlog
The Company's business is somewhat seasonal. The
Company's sales tend to be stronger from January through June
each year which is attributable largely to orders placed in the
fourth quarter in anticipation of warmer summer months when
most asphalt paving is done.
As of December 31, 1994, the Company had a backlog for
delivery of products at certain dates in the future of
approximately $50,500,000. At December 31, 1993 the total
backlog was approximately $33,100,000. The Company's
backlog is subject to some seasonality as noted above.
The Company's contracts reflected in the backlog are
not, by their terms, subject to termination.
Management believes that the Company is in substantial
compliance with all manufacturing and delivery timetables
relating to its products.
Competition
The Company faces strong competition in price, service
and product performance in each product category. While the
Company does not compete with any one manufacturer in all of its
product lines, it competes as to certain products with both large
publicly held companies with resources significantly greater
than the Company and various smaller manufacturers. Hot mix
asphalt plant competitors include CMI Corporation; Cedarapids,
Inc., a division of Raytheon Company; and Gencor Industries,
Inc.
Paving equipment competitors include Caterpillar Paving
Products Inc. (including the Company's former Barber-Greene
product line), a subsidiary of Caterpillar Inc.; Blaw-Knox
Construction Equipment Company, a subsidiary of Clark
Equipment Co.; Ingersoll-Rand Company; and Cedarapids, Inc.
The market for the Company's heat transfer equipment is
diverse because of the multiple applications for such equipment.
Its principal competitor is Gencor/Hyway Heat Systems. The
Company's milling machine equipment competitors include
Ingersoll-Rand Company; CMI Corporation; Cedarapids, Inc.;
Caterpillar; and Wirtgen America, Inc. Aggregates processing
equipment competitors include the Pioneer Division of Portec,
Inc.; Nordberg, Inc.; Eagle Iron Works; Boliden Allis, a member
of the Trelleborg Group; Cedarapids, Inc.; and other smaller
manufacturers, both domestic and foreign. Competition for sales
of trenching and excavating equipment includes Ditch Witch; J.I.
Case; Vermeer and other smaller manufacturers in the small
utility trencher market.
As a whole, imports do not constitute significant
competition in the United States; however, in international sales,
the Company generally competes with foreign manufacturers
which may have a local presence in the market the Company is
attempting to penetrate.
Asphalt and concrete are generally considered competitive
products as a surface choice for new roads and highways. A
portion of the interstate highway system is paved in concrete,
but a majority of all surfaced roads in the United States are
paved with asphalt. Although concrete is used for some new road
surfaces, asphalt is used for virtually all resurfacing, even the
resurfacing of most concrete roads. Management does not believe
that concrete, as a competitive surface choice, materially
impacts the Company's business prospects.
Regulation
The Company does not operate within a highly regulated
industry. However, air pollution equipment manufactured by the
Company principally for hot mix asphalt plants must comply
with certain performance standards promulgated by the federal
Environmental Protection Agency under the Clean Air Act
applicable to "new sources" or new plants. Management believes
that the Company's products meet all material requirements of
such regulations and of applicable state pollution standards and
environmental protection laws.
In addition, due to the size and weight of certain
equipment, the Company and its customers sometimes confront
conflicting state regulations on maximum weights transportable
on highways and roads. This problem occurs most frequently in
the movement of portable asphalt mixing plants. Also, some
states have regulations governing the operation of asphalt mixing
plants and most states have regulations relating to the accuracy
of weights and measures which affect some of the control systems
manufactured by the Company.
Employees
At December 31, 1994, the Company and its subsidiaries
employed 1,531 persons, of which 1,045 were engaged in
manufacturing operations, 176 in engineering and design
functions and 310 in selling, administrative and management
functions. Telsmith has a labor agreement expiring October 14,
1995. None of the Company's other employees are covered by a
collective bargaining agreement. The Company considers its
employee relations to be good.
Item 2. Properties
The location, approximate square footage, acreage
occupied and principal function of the properties owned or leased
by the Company are set forth below:
<TABLE>
Approximate Approximate
Location Square Footage Acreage Principal Function
<CAPTION>
<S> <C> <C> <C> <S> <C>
Chattanooga, Tennessee 265,000 26.0 Corporate and Division Offices,
manufacturing - Astec division
Chattanooga, Tennessee 63.0 Storage yard - Astec division
Chattanooga, Tennessee 66,200 5.0 Offices, manufacturing - Heatec
Chattanooga, Tennessee 125,000 13.6 Offices, manufacturing -
Roadtec
Milwaukee, Wisconsin 120,000 6.1 Former Offices, manufacturing
- Telsmith (property for sale)
Mequon, Wisconsin 203,000 30.0 Offices, manufacturing -
Telsmith
North Aurora, Illinois 16,700 3.5 Roadtec (sales and service
office)
San Francisco, California 5,000 1.0 Leased sales and service office
and warehouse - Telsmith
St. Charles, Illinois 300 Leased international sales office
- Telsmith
Chino, California 4,762 1.0 Leased parts warehouse - Astec
Rossville, Georgia 40,500 2.6 Manufacturing and sales office
facility - Astec division
Grapevine, Texas 140,000 51.67 Offices, manufacturing -
Trencor
Grand Prairie, Texas 83,000 6.1 Former Offices, manufacturing
- Trencor, Inc.(property for sale)
Sharon, Massachusetts 4,000 1.0 Leased sales and service office -
Telsmith
Odessa, Texas 4,072 0.8 Sales office and parts warehouse
- Trencor, Inc.
Inman, South Carolina 13,600 8.0 Property for sale (office and
warehouse of former Soil
Purification of Carolina, Inc.)
Houston, Texas 120 Leased sales office - Heatec
Germany, Hasselroth 13,000 7.0 Leased offices, warehouse and limited
manufacturing - Gibat Ohl
Germany, Hasselroth 11,000 7.0 Leased offices and warehouse -
Wibau-Astec
</TABLE>
In an effort to improve efficiency and consolidate
manufacturing space, the Company consolidated all of Telsmith's
manufacturing operations in an expanded Mequon facility. The
expansion began in late 1993 and was completed in 1994. On
February 18, 1994, Trencor, Inc. acquired facilities in
Grapevine, Texas and has relocated its manufacturing and office
operations to this location. Except as set forth above,
management believes that each of the Company's facilities
provide office or manufacturing space suitable for its current
needs and considers the terms under which it leases facilities to
be reasonable. Astec, Inc. is in the process of expanding its
offices and manufacturing facilities. In 1995 its manufacturing
space will increase by approximately 14,000 square feet.
Existing facilities will undergo some remodeling also.
Item 3. Legal Proceedings
During 1994, and in previous years, the Company and its
former Barber-Greene subsidiary (now Telsmith, Inc.) were
defendants in two patent infringement actions brought by Robert
L. Mendenhall and CMI Corporation ("CMI"), a competitor,
seeking monetary damages and an injunction to cease the alleged
infringement.
In 1990, CMI was awarded damages of $4,457,000 and
prejudgment interest of $2,838,000 or a total of $7,295,000
from Barber-Greene. During 1991, in a separate trial, CMI
was awarded damages of $8,463,000, prejudgment interest of
$5,309,000 and attorney's fees of $737,000 for a total of
$14,509,000 from Astec; and Astec was awarded damages of
$667,000 plus $391,000 of prejudgment interest or a total of
$1,058,000 from CMI. The total damages and expenses awarded
to CMI were $20,746,000, net of the $1,058,000 awarded to
Astec. Both Astec and CMI appealed the judgments. In
connection
with its appeals, the Company was directed by the courts to
pledge substantially all of its real property and to deposit funds
in an escrow account to secure the judgments against the
Company pending the outcome of appeals.
On June 9, 1994, the Company announced that the United
States Court of Appeals for the Federal Circuit had reversed the
lower court decision and did not remand to the lower court for
further proceedings the judgments previously entered against
Astec and its former Barber-Greene subsidiary in the Robert L.
Mendenhall and CMI patent litigation. Those judgments had
totaled approximately $22 million. The Federal Circuit Court
ruled in favor of Astec because the allegedly infringing patents
had been held invalid in a separate third party case. CMI asked
the Federal Circuit to reconsider its decision and to have all of
the Federal Circuit judges rehear the appeal. The Company
responded to this request. On September 20, 1994, the Company
announced that the United States Court of Appeals for the Federal
Circuit denied the request from Mendenhall and CMI to
reconsider its earlier reversal. With the issuance of this
ruling, The Federal Circuit's review of this ongoing patent
litigation ended.
On October 11, 1994, CMI Corporation and Robert L.
Mendenhall filed a Petition of Writ Certiorari asking the U.S.
Supreme Court to review the decision of the Federal Circuit
Court of Appeals. The Company filed a response opposing the
Petition and on November 28, 1994, the Supreme Court issued
an Order denying the Petition thus bringing the patent litigation
to an end.
As a result of the Supreme Court's refusal to grant
certiorari, the Company received approximately $12.9 million
which was being held in escrow pending the Company's appeal of
the two judgments. In addition, on December 16, 1994, the
Company received approximately $1.3 million from CMI in
satisfaction of the judgment entered in favor of the Company on
its counterclaim against CMI. The receipt of these funds
effectively concluded the litigation between the Company and CMI
and Robert L. Mendenhall which had been pending for a number
of
years. As a result, the Company has reversed its accrued
liability for patent damages. The reversal of $13,870,000 in
accrued patent damages and the receipt of $1,309,000 in patent
damages from CMI total $15,179,000 and are shown net of
accruals and related legal expenses in the Consolidated
Statements of Income as Patent Suit Damages and Expenses (Net
Recoveries and Accrual Adjustments).
In an unrelated case, the Company's Telsmith subsidiary
is a defendant in a patent infringement action brought by
Nordberg, Inc., a manufacturer of a competing line of rock
crushing equipment, seeking monetary damages and an injunction
to cease an alleged infringement of a patent on certain
components used in the production of its rock crushing
equipment. This case, being heard before the U.S. District Court
for the Eastern District of Wisconsin, has been bifurcated into
liability and damages phases. The liability phase was tried on
January 11, 1993; however, no decision had been rendered by
the Court. Because of the uncertainties inherent in the litigation
process, the Company is unable to predict the ultimate outcome
of this litigation.
On October 28, 1993, the Company was also named as a
defendant in a patent infringement action brought by Gencor,
Inc., a manufacturer of a competing line of asphalt plants,
seeking monetary damages and an injunction to cease an alleged
infringement of a patent on certain components used in the
production of its asphalt plant product line. This case was filed
in the U.S. District Court for the Middle District of Florida,
Orlando Division, and is currently in the discovery phase.
Management believes this case to be without merit and intends to
vigorously defend this suit; however, due to the uncertainties
inherent in the litigation process, the Company is unable to
predict the ultimate outcome of this litigation.
Management has reviewed all claims and lawsuits and,
upon the advice of counsel, has made provision for any estimable
losses; however, the Company is unable to predict the ultimate
outcome of the outstanding claims and lawsuits.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Executive Officers of the Registrant
The name, title, ages and business experience of the
executive officers of the Company are listed below.
J. Don Brock has been President and a director of Astec
since its incorporation in 1972 and assumed the additional
position of Chairman of the Board in 1975. He was the
Treasurer of the Company from 1972 until 1994. From 1969
to 1972, Dr. Brock was President of the Asphalt Division of CMI
Corporation. Dr. Brock earned his Ph.D. degree in mechanical
engineering from the Georgia Institute of Technology. Dr. Brock
and Thomas R. Campbell, President of Roadtec, are first cousins.
Dr. Brock is 56.
Albert E. Guth has been Chief Financial Officer of the
Company since 1987, Senior Vice President since 1984,
Secretary of the Company since 1972 and Treasurer since 1994.
Mr. Guth, who has been a director since 1972, was the Vice
President of the Company from 1972 until 1984. From 1969 to
1972, Mr. Guth was the Controller of the Asphalt Division of
CMI Corporation. He is 55.
F. McKamy Hall, a Certified Public Accountant, has
served as Controller of the Company since May 1987. From
1985 to 1987, Mr. Hall was Vice President-Finance of Quadel
Management Corporation, a company engaged in real estate
management. He is 52.
Thomas R. Campbell has served as President of Roadtec,
Inc. since 1988. From 1981 to 1988 he served as Operations
Manager of Roadtec. Mr. Campbell and J. Don Brock, President
of the Company, are first cousins. Mr. Campbell is 45.
W. Norman Smith has served as the President of Astec,
Inc. since December 1, 1994. He formerly served as President
of Heatec, Inc. from 1977 to 1994. From 1972 to 1977, Mr.
Smith was a Regional Sales Manager with the Company. From
1969 to 1972, Mr. Smith was an engineer with the Asphalt
Division of CMI Corporation. Mr. Smith has also served as a
director of the Company since 1972. He is 55.
Jerry F. Gilbert has served as President of Trencor, Inc.
since 1981. From 1973 to 1980, Mr. Gilbert was self-
employed in the real estate investment and insurance field. Mr.
Gilbert has also served as a director of the Company since May,
1991. He is 49.
Robert G. Stafford has served as President of Telsmith,
Inc., formerly the Barber-Greene Company, since April 1991.
Between January 1987 and January 1991, Mr. Stafford served
as President of Telsmith, Inc., a subsidiary of Barber-Greene.
From 1984 until the Company's acquisition of Barber-Greene in
December 1986, Mr. Stafford was Vice President - Operations
of Barber-Greene and General Manager of Telsmith. From 1979
to 1984 he served as Director-Engineering and Operations for
Telsmith. He became a director of the Company in March 1988.
He is 56.
James G. May has served as President of Heatec, Inc.
since December 1, 1994. From 1983 until 1994 he served as Vice
President of Engineering of Astec, Inc. He is 50.
PART II
Item 5. Market for Registrant's Common Equity and Related
Shareholder Matters
The Company's Common Stock is traded in the National
Association of Securities Dealers Automated Quotation System
(NASDAQ) National Market System under the symbol "ASTE".
The Company has never paid any dividends on its Common Stock.
The high and low sales prices of the Company's Common
Stock as reported on the NASDAQ National Market System for
each quarter during the last two fiscal years, which have been
restated to retroactively reflect the two-for-one stock split
effected in the form of a dividend on August 12, 1993, were as
follows:
<TABLE>
Price Per Share
1994 High Low
<CAPTION>
<C> <S> <C> <C>
1st Quarter 20 1/8 13 1/2
2nd Quarter 17 5/8 13
3rd Quarter 15 12 1/2
4th Quarter 15 7/8 11 5/8
Price Per Share
1993 High Low
<CAPTION>
<C> <S> <C> <C>
1st Quarter 13 8 1/2
2nd Quarter 14 9 7/8
3rd Quarter 14 7/8 11 3/8
4th Quarter 15 3/4 11
</TABLE>
The number of holders of record of the Company's
Common Stock as of March 10,1995, was 821.
Item 6. Selected Financial Data
Selected financial data appear on page A-1 of this Report.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Management's discussion and analysis of financial
condition and results of operations appears on pages A-2 to A-4 of this
Report.
Item 8. Financial Statements and Supplementary Data
Financial statements and supplementary financial
information appear on pages A-5 to A-22 of this Report.
Item 9. Changes In and Disagreements with Accountants on
Accounting and Financial Disclosure
None required to be reported in this item.
PART III
Item 10. Directors and Executive Officers of the Registrant
Information regarding the Company's directors included
under the caption "Election of Directors - Certain Information
Concerning Nominees and Directors" in the Company's definitive
Proxy Statement to be delivered to the shareholders of the
Company in connection with the Annual Meeting of Shareholders
to be held on April 27, 1995 is incorporated herein by
reference. Required information regarding the Company's
executive officers is contained in Part I of this Report under the
heading "Executive Officers of the Registrant". Information
regarding compliance with Section 16(a) of the Exchange Act is
included under "Election of Directors - Section 16(a) Filing
Requirements" in the Company's definitive Proxy Statement
which is incorporated herein by reference.
Item 11. Executive Compensation
Information included under the caption, "Election of
Directors - Executive Compensation" in the Company's definitive
Proxy Statement to be delivered to the shareholders of the
Company in connection with the Annual Meeting of Shareholders
to be held on April 27, 1995 is incorporated herein by
reference.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
Information included under the captions "Election of
Directors - Certain Information Concerning Nominees and
Directors", "Election of Directors - Common Stock Ownership of
Management" and "Election of Directors - Common Stock
Ownership of Certain Beneficial Owners" in the Company's
definitive Proxy
Statement to be delivered to the shareholders of the Company in
connection with the Annual Meeting of Shareholders to be held on
April 27, 1995 is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
In September 1991, the Company's Chairman, its Senior
Vice President, and the President of its Telsmith, Inc. subsidiary
formed a general partnership which acquired 25% of the
common stock of American Rock Products, Inc., an Ohio
corporation engaged in the business of supplying crushed rock to
concrete and asphalt producers in the southeastern Oklahoma
area ("Amrock"). These individuals own interests in the
partnership of 50%, 25% and 25%, respectively. In December
1992, the rock crushing business of Amrock was sold to a
competitor, exclusive of two used rock crushing machines and
certain other miscellaneous inventory and equipment.
In March 1994, Amrock sold two of these used rock
crushing machines to Telsmith for $50,000 and $70,000,
respectively. The purchase price for each of these machines was
determined by the President of Telsmith based on his opinion of
their fair market value at the time of purchase. Telsmith
intends to market both rock crushing machines to its customers
for sale in the ordinary course of business.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K
(a)(1) The following financial statements and other
information appear in Appendix "A" to this Report and are filed
as a part hereof:
Selected Consolidated Financial Data.
Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Report of Independent Auditors.
Consolidated Balance Sheets at December 31,
1994 and 1993.
Consolidated Statements of Income for the Years
Ended December 31, 1994, 1993 and 1992.
Consolidated Statements of Shareholders' Equity
for the Years Ended December 31, 1994, 1993
and 1992.
Consolidated Statements of Cash Flows for the
Years Ended December 31, 1994, 1993 and
1992.
Notes to Consolidated Financial Statements.
(a)(2) Other than as described below, Financial
Statement Schedules are not filed with this Report because the
Schedules are either inapplicable or the required information is
presented in the Financial Statements or Notes thereto. The
following Schedules appear in Appendix "A" to this Report and
are filed as a part hereof:
Report of Independent Auditors.
Schedule VIII - Valuation and Qualifying Accounts.
(a)(3) The following Exhibits* are incorporated by
reference into or are filed with this Report:
2.1 Share Purchase and Transfer Agreement, dated October 13,
1994, between the Company and Wibau-Astec Maschinenfabrik
GmbH (incorporated by reference to the Form 8-K effective
November 7, 1994, File No. 0-14714).
2.2 Share Purchase and Transfer Agreement by and between the
Company and Gibat Ohl Ingenieurgesellschaft fur Anlagentechnik mbH,
dated as of October 5, 1994.
3.1 Restated Charter of the Company (incorporated by reference to the
Company's Registration Statement on Form S-1, effective June 18,
1986, File No. 33-5348).
3.2 Articles of Amendment to the Restated Charter of the Company,
effective September 12, 1988 (incorporated by reference to the
Company's Annual Report on Form 10-K for the year ended December 31, 1988,
File No. 0-14714).
[FN]
The Exhibits are numbered in accordance with Item 601 of
Regulation S-K. Inapplicable Exhibits are not included in the
list.
3.3 Articles of Amendment to the Restated Charter of the Company,
effective June 8, 1989 (incorporated by reference to the Company's Annual
Report on Form 10-K for the year ended December 31, 1989, File No. 0-14714).
3.4 Amended and Restated Bylaws of the Company, adopted March 14, 1990
(incorporated by reference to the Company's Annual Report on Form
10-K for the year ended December 31, 1989, File No. 0-14714).
4.1 Trust Indenture between City of Mequon and Firstar Trust
Company, as Trustee, dated as of February 1, 1994 (incorporated
by reference to the Company's Annual Report on Form 10-K for
the year ended December 31, 1993, File No. 0-14714).
4.2 Indenture of Trust, dated April 1, 1994, by and between Grapevine
Industrial Development Corporation and Bank One, Texas, NA, as Trustee.
10.1 Agreement, dated December 24, 1976, between the Company and
Jemco International, Inc. (incorporated by reference to the
Company's Registration Statement on Form S-1, effective June 18,
1986, File No. 33-5348).
10.2 Supplemental Agreement, dated December 30, 1982, between the
Company and Jemco International, Inc. (incorporated by reference to
Company's Registration Statement on Form S-1, effective June 18,
1986, File No. 33-5348).
10.3 Restated License and Trademark Agreement, dated March 25, 1988,
between the Company and Barber-Greene Europa B.V. (incorporated
by reference to the Company's Annual Report on Form 10-K for
the year ended December 31, 1988, File No. 0-14714).
10.4 License and Trademark Agreement, dated May 5, 1988, between the
Company and BM Group PLC incorporated by reference to the
Company's Annual Report on Form 10-K for the year ended December
31, 1989, File No. 0-14714).
10.5 1986 Stock Option Plan of the Company (incorporated by
reference to the Company's Registration Statement on Form S-
1, effective June 18, 1986, File No. 33-5348).
10.6 Loan Agreement, dated July 1, 1980, between the Company and
the Industrial Development Board of the City of Chattanooga
(incorporated by reference to the Company's Registration Statement
on Form S-1, effective June 18, 1986, File No. 33-5348).
10.7 Trust Indenture, dated July 1, 1980, between the Industrial
Development Board of the City of Chattanooga and Pioneer Bank
(incorporated by reference to Company's Registration Statement
on Form S-1, effective June 18, 1986, File No. 33-5348).
10.8 Warrant Agreement, dated as of December 29, 1986, between the
Company and The Citizens and Southern National Bank, as
Warrant Agent (incorporated by reference to the Company's
Registration Statement on Form S-4, effective November 26, 1986,
File No. 33-10403).
10.9 Credit Agreement, dated as of September 17, 1987, between the
Company and The First National Bank of Chicago (incorporated by
reference to the Company's Annual Report on Form 10-K for the year
ended December 31, 1987, File No. 0-14714).
10.10 Amendment No. One, dated January 4, 1988, to Credit Agreement,
dated as of September 17, 1987, between the Company and The First
National Bank of Chicago (incorporated by reference to the
Company's Annual Report on Form 10-K for the year ended December
31, 1987, File No. 0-14714).
10.11 Amendment No. Two, dated March 17, 1988, to Credit Agreement,
dated as of September 17, 1987, between the Company and The First
National Bank of Chicago (incorporated by reference to the
Company's Annual Report on Form 10-K for the year ended December
31, 1987, File No. 0-14714).
10.12 Amendment, dated August 17, 1988, to Credit Agreement, dated
as of September 17, 1987, between the Company and The First
National Bank of Chicago (incorporated by reference to the
Company's Annual Report on Form 10-K for the year ended December
31, 1988, File No. 0-14714).
10.13 Second Amendment, dated October 21, 1988, to Credit Agreement,
dated as of September 17, 1987, between the Company and The First
National Bank of Chicago (incorporated by reference to the
Company's Annual Report on Form 10-K for the year ended December
31, 1988, File No. 0-14714).
10.14 Amendment, dated as of January 19, 1989, to Credit Agreement,
dated as of September 17, 1987, between the Company and The First
National Bank of Chicago (incorporated by reference to the
Company's Annual Report on Form 10-K for the year ended December
31, 1988, File No. 0-14714).
10.15 Consent, Waiver and Release, dated as of January 31, 1989, to Credit
Agreement, dated as of September 17, 1987, between the Company
and The First National Bank of Chicago (incorporated by reference
to the Company's Annual Report on Form 10-K for the year ended
December 31, 1988, File No. 0-14714).
10.16 Waiver, dated March 8, 1989, to Credit Agreement, dated as of
September 17, 1987, between the Company and The First National
Bank of Chicago (incorporated by reference to the Company's Annual
Report on Form 10-K for the year ended December 31, 1988, File No.
0-14714).
10.17 Senior Note Agreement, dated as of January 31, 1989, between the
Company and Principal Mutual Life Insurance Company (incorporated
by reference to the Company's Annual Report on Form 10-K for
the year ended December 31, 1988, File No. 0-14714).
10.18 Subordinated Note Agreement, dated
as of January 31, 1989, between
the Company and Principal Mutual
Life Insurance Company
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1988, File No. 0-14714).
10.19 Amended and Restated Credit
Agreement, dated as of April 27,
1989, between the Company and
The First National Bank of Chicago
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1989, File No. 0-14714).
10.20 Amendment, dated as of March 26,
1990, to the Amended and Restated
Credit Agreement, dated as of April
27, 1989, between the Company
and The First National Bank of
Chicago (incorporated by reference
to the Company's Annual Report on
Form 10-K for the year ended
December 31, 1989, File No. 0-14714).
10.21 Consent, Waiver and Release, dated
as of November 1, 1989, to
Amended and Restated Credit
Agreement, dated as of April 27,
1989, between the Company and
The First National Bank of Chicago
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1989, File No. 0-14714).
10.22 Consent, Waiver and Release, dated
as of November 10, 1989, to
Senior and Subordinated Note
Agreements dated as of January 31,
1989, between the Company and
Principal Mutual Life Insurance
Company (incorporated by
reference to the Company's Annual
Report on Form 10-K for the year
ended December 31, 1989, File No. 0-14714).
10.23 Consent, Waiver and Release, dated
as of March 14, 1990, to Credit
Agreement, dated as of September
17, 1987, between the Company
and The First National Bank of
Chicago (incorporated by reference
to the Company's Annual Report on
Form 10-K for the year ended
December 31, 1989, File No. 0-14714).
10.24 Lease Agreement, dated as of July
1, 1974, between Barber-Greene
Company and the City of Mequon,
Wisconsin (incorporated by
reference to the Company's Annual
Report on Form 10-K for the year
ended December 31, 1988, File No. 0-14714).
10.25 Lease Agreement, dated November
10, 1986, between Barber-Greene
Company and Stephen P. and Sandra
S. Davenport (incorporated by
reference to the Company's Annual
Report on Form 10-K for the year ended
December 31, 1988, File No. 0-14714).
10.26 Lease Agreement, dated as of March 31, 1988, between Telsmith, Inc.
and AEW #79 Trust (incorporated by reference to the Company's
Annual Report on Form 10-K for the year ended December 31,
1988, File No. 0-14714).
10.27 Lease Agreement, dated June 20,
1988, between Barber-Greene
Company and 8000 Cypress
Parkway Corporation
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1988, File No. 0-14714).
10.28 Lease Agreement, dated February 1, 1989, between Barber-Greene
Company and Lee Steinberg
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December 31, 1988, File No. 0-14714).
10.29 Lease Agreement, dated as of August
28, 1989, between Telsmith, Inc.,
and Pine Hill Developers
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December 31, 1989, File No. 0-14714).
10.30 Lease Agreement, dated as of March
24, 1989, between the Company
and Robert D. Ingersoll
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1989, File No. 0-14714).
10.31 Assignment, dated as of February
5, 1990, of lease dated November
10, 1986, between Barber-Greene
Company and Castro and Davenport
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1989, File No. 0-14714).
10.32 Sublease, dated as of December 29,
1989, of lease dated February 1,
1989, between Barber-Greene
Company and Lee Steinberg
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1989, File No. 0-14714).
10.33 Waiver and Agreement, dated
March 30, 1990, with respect to
Senior and Subordinated Note
Agreements, dated as of January
31, 1989, between the Company
and Principal Mutual Life
Insurance Company (incorporated
by reference to the Company's
Annual Report on Form 10-K for
the year ended December 31, 1990, File No. 0-14714).
10.34 Waiver, dated August 24, 1990,
with respect to Senior Note
Agreement, dated as of January 31,
1989, between the Company and
Principal Mutual Life Insurance
Company (incorporated by
reference to the Company's Annual
Report on Form 10-K for the year
ended December 31, 1990,
File No. 0-14714).
10.35 Waiver, dated December 18,
1990, with respect to Senior and
Subordinated Note Agreements,
dated as of January 31, 1989,
between the Company and Principal
Mutual Life Insurance Company
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1990, File No. 0-14714).
10.36 Waivers, dated October 18, 1990,
with respect to Amended and
Restated Credit Agreement, dated as
of April 27, 1989, between the
Company and the First National
Bank of Chicago (incorporated by
reference to the Company's Annual
Report on Form 10-K for the year
ended December 31, 1990,
File No. 0-14714).
10.37 Waivers, dated December 20,
1990, with respect to Credit
Agreement, dated as of April 27,
1989, between the Company and
the First National Bank of Chicago
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1990, File No. 0-14714).
10.38 Lease Agreement, dated as of March
1, 1991 between Astec Industries,
Inc. and Carl M. Krueger (dba
Krueger Instruments),
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1990, File No. 0-14714).
10.39 Asset Purchase Agreement by and
between Caterpillar Paving
Products Inc., Barber-Greene
Company, and Astec Industries,
Inc., dated December 17, 1990
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1990, File No. 0-14714).
10.40 Waiver, dated April 11, 1991,
with respect to Amended and
Restated Credit Agreement, dated
as of April 27, 1989, between the
Company and the First National
Bank of Chicago (incorporated by
reference to the Company's Annual
Report on Form 10-K for the year
ended December 31, 1990,
File No. 0-14714).
10.41 Waiver, dated April 11, 1991,
with respect to Senior and
Subordinated Note Agreements,
dated as of January 31, 1989,
between the Company and Principal
Mutual Life Insurance Company
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1990, File No. 0-14714).
10.42 Consent and Waiver, dated April
17, 1991, with respect to the
Amended and Restated Credit
Agreement, dated as of April 27,
1989, between the Company and
The First National Bank of Chicago
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1991, File No. 0-14714).
10.43 Consent and Waiver, dated April
17, 1991, with respect to the
Senior and Subordinated Note
Agreements, dated as of January
31, 1989, between the Company
and Principal Mutual Life
Insurance Company (incorporated
by reference to the Company's
Annual Report on Form 10-K for
the year ended December 31, 1991, File No. 0-14714).
10.44 Consent of Barber-Greene Company
(now Telsmith, Inc.), Heatec, Inc.,
Roadtec, Inc., and Trencor Jetco,
Inc., dated April 17, 1991, with
respect to the (i) Amended and
Restated Credit Agreement, dated as
of April 27, 1989, between the
Company and The First National
Bank of Chicago, and (ii) Senior
and Subordinated Note Agreements,
dated as of January 31, 1989,
between the Company and Principal
Mutual Life Insurance Company
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1991, File No. 0-14714).
10.45 Collateral Trust Indenture, dated as
of March 1, 1991, between the
Company, The First National Bank
of Chicago, Principal Mutual Life
Insurance Company and Citizens
and Southern Trust Company
(Georgia), N.A. (incorporated by
reference to the Company's Annual
Report on Form 10-K for the year
ended December 31, 1991, File No.
0-14714).
10.46 Consent, Waiver and Release of
Security Interest by The First
National Bank of Chicago ("First
Chicago"), Principal Mutual Life
Insurance Company ("PMLIC") and
Citizens and Southern Trust
Company (Georgia), N.A. ("C&S"),
dated April 17, 1991, with respect
to the (i) Amended and Restated
Credit Agreement, dated as of April
27, 1989, between the Company
and First Chicago, (ii) Senior and
Subordinated Note Agreements,
dated as of January 31, 1989,
between the Company and PMLIC,
(iii) Collateral Trust Indenture,
dated as of March 1, 1991,
between the Company, First
Chicago, PLMIC, and C&S, and (iv)
certain collateral documents
related thereto (incorporated by
reference to the Company's Annual
Report on Form 10-K for the year
ended December 31, 1991, File No.
0-14714).
10.47 Release of Security Interest by the
Citizens and Southern Trust
Company (Georgia), N.A., The First
National Bank of Chicago ("First
Chicago") and Principal Mutual
Life Insurance Company
("PMLIC"), dated April 17, 1991,
with respect to certain
trademarks, trademark
registrations, trademark
applications and trademark
licenses pledged as collateral under
the Pledge and Security Agreement,
dated as of March 26, 1990
between the Barber-Greene
Company, Ameacon, Inc., Heatec,
Inc., Roadtec, Inc., Trencor Jetco,
Inc., Barber-Greene Overseas, Inc.
and Telsmith, Inc., and First
Chicago acting in its capacity as
collateral agent for itself and
PMLIC (incorporated by reference
to the Company's Annual Report on
Form 10-K for the year ended
December 31, 1991, File No. 0-14714).
10.48 Release of Security Interest by the
Citizens and Southern Trust
Company (Georgia), N.A., The First
National Bank of Chicago ("First
Chicago") and Principal Mutual
Life Insurance Company
("PMLIC"), dated April 17, 1991,
with respect to certain patents,
patent applications and patent
licenses pledged as collateral under
the Pledge and Security Agreement,
dated as of March 26, 1990
between the Barber-Greene
Company, Ameacon, Inc., Heatec,
Inc., Roadtec, Inc., Trencor Jetco,
Inc., Barber-Greene Overseas, Inc.
and Telsmith, Inc., and First
Chicago acting in its capacity as
collateral agent for itself and
PMLIC (incorporated by reference
to the Company's Annual Report on
Form 10-K for the year ended
December 31, 1991, File No. 0-14714).
10.49 Bank response to requests for
waivers for quarter ended
6/30/91 (incorporated by
reference to the Company's Annual
Report on Form 10-K for the year
ended December 31, 1991, File No. 0-14714).
10.50 Waiver, dated March 23, 1992,
with respect to the Amended and
Restated Credit Agreement, dated as
of April 27, 1989, between the
Company and The First National
Bank of Chicago (incorporated by
reference to the Company's Annual
Report on Form 10-K for the year
ended December 31, 1991,
File No. 0-14714).
10.51 Fourth Amendment, dated March
23, 1992 between the Company
and The First National Bank of
Chicago, with respect to the
Amended and Restated Credit
Agreement, dated April 27, 1989
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1991, File No. 0-14714).
10.52 Waiver, dated March 23, 1992,
with respect to the Senior and
Subordinated Note Agreements,
dated as of January 31, 1989,
between the Company and Principal
Mutual Life Insurance Company
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1991, File No. 0-14714).
10.53 Third Amendment, dated March 23,
1992 between the Company and
Principal Mutual Life Insurance
Company, with respect to the
Senior Note Agreement dated
January 31, 1989 (incorporated
by reference to the Company's
Annual Report on Form 10-K for
the year ended December 31, 1991, File No. 0-14714).
10.54 Third Amendment, dated March 23,
1992 between the Company and
Principal Mutual Life Insurance
Company, with respect to the
Subordinated Note Agreement dated
January 31, 1989 (incorporated
by reference to the Company's
Annual Report on Form 10-K for
the year ended December 31,
1991, File No. 0-14714).
10.55 Consent and Waiver, dated April
29, 1992, with respect to the
Amended and Restated Credit
Agreement, dated as of April 27,
1989, between the Company and
The First National Bank of Chicago
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1992, File No. 0-14714).
10.56 Waiver, dated April 29, 1992,
with respect to the Senior and
Subordinated Note Agreements,
dated as of January 31, 1989,
between the Company and Principal
Mutual Life Insurance Company
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1992, File No. 0-14714).
10.57 License Agreement, dated July 2,
1992, between Telsmith, Inc. and
Gerlach Industries (incorporated
by reference to the Company's
Annual Report on Form 10-K for
the year ended December 31,
1992, File No. 0-14714).
10.58 Deed of Trust from the Company to
Milligan-Reynolds Guaranty Title
Agency, Inc., Trustee, pledging
certain property located in
Hamilton County, Tennessee,
recorded August 24, 1992 in Book
4029, Page 417 in the Office of the
Register of Deeds of Hamilton
County, Tennessee (incorporated
by reference to the Company's
Annual Report on Form 10-K for
the year ended December 31,
1992, File No. 0-14714).
10.59 Deed of Trust from Heatec, Inc. to
Milligan-Reynolds Guaranty Title
Agency, Inc., Trustee, pledging
certain property located in
Hamilton County, Tennessee,
recorded August 24, 1992 in Book
4029, Page 423 in the Office of the
Register of Deeds of Hamilton
County, Tennessee (incorporated
by reference to the Company's
Annual Report on Form 10-K for
the year ended December 31,
1992, File No. 0-14714).
10.60 Deed of Trust from Roadtec, Inc. to
Milligan-Reynolds Guaranty Title
Agency, Inc., Trustee, pledging
certain property located in
Hamilton County, Tennessee,
recorded August 24, 1992 in Book
4029, Page 428 in the Office of the
Register of Deeds of Hamilton
County, Tennessee (incorporated
by reference to the Company's
Annual Report on Form 10-K for
the year ended December 31,
1992, File No. 0-14714).
10.61 Deed to Secure Debt from the
Company to CMI Corporation
pledging certain property located
in Walker County, Georgia,
recorded August 25, 1992 in deed
Book 683, Page 506 in the Office
of the Superior Court Clerk of
Walker County, Georgia
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1992, File No. 0-14714).
10.62 Deed of Trust from Trencor Jetco,
Inc. to Craig Bishop, Trustee,
pledging certain property located
in Dallas County, Texas, recorded
August 25, 1992 in Book 92166,
Page 891 in the Office of the
County Clerk of Dallas County,
Texas (incorporated by reference
to the Company's Annual Report on
Form 10-K for the year ended
December 31, 1992, File No. 0-14714).
10.63 Mortgage from Telsmith, Inc. to
CMI Corporation pledging certain
property located in Ozaukee
County, Wisconsin, recorded
August 25, 1992 in Volume 768,
Page 74 in the Office of the
Register of Deeds of Ozaukee
County, Wisconsin (incorporated
by reference to the Company's
Annual Report on Form 10-K for
the year ended December 31,
1992, File No. 0-14714).
10.64 Mortgage from Telsmith, Inc. to
CMI Corporation pledging certain
property located in Milwaukee
County, Wisconsin, recorded
August 25, 1992 in Reel 2850,
image 427 in the Office of the
Register of Deeds of Milwaukee
County, Wisconsin (incorporated
by reference to the Company's
Annual Report on Form 10-K for
the year ended December 31,
1992, File No. 0-14714).
10.65 Fifth Amendment, dated December
31, 1992 between the Company
and The First National Bank of
Chicago, with respect to the
Amended and Restated Credit
Agreement, dated April 27, 1989
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1992, File No. 0-14714).
10.66 Letter of Intent between the
Company and Putzmeister-Werk,
Maschinenfabrik GmbH dated
December 12, 1992 in connection
with the formation of
WIBAU/ASTEC GmbH (incorporated
by reference to the Company's
Annual Report on Form 10-K for
the year ended December 31,
1992, File No. 0-14714).
10.67 First Amendment to Note Agreement
(for Senior Notes) dated April 1,
1991 between the Company and
Principal Mutual Life Insurance
Company (incorporated by
reference to the Company's
Registration Statement on Form S-
2, effective June 8, 1993, as
Exhibit 10.54, File No. 33-61952).
10.68 First Amendment to Note Agreement
(for Subordinated Notes) dated
April 11, 1991 between the
Company and Principal Mutual Life
Insurance Company (incorporated
by reference to the Company's
Registration Statement on
Form S-2, effective June 8, 1993,
as Exhibit 10.55, File No. 33-61952).
10.69 Fourth Amendment, dated March
31, 1993 between the Company
and Principal Mutual Life
Insurance Company, with respect
to the Amended and Restated Credit
Agreement dated January 31, 1989
(incorporated by reference to the
Company's Registration Statement
on Form S-2, effective June 8,
1993, as Exhibit 10.56, File No. 33-61952).
10.70 Sixth Amendment, dated March 31,
1993 between the Company and the
First National Bank of Chicago,
with respect to the Amended and
Restated Credit Agreement, dated
April 27, 1989 (incorporated by
reference to the Company's
Registration Statement on Form S-2, effective June 8, 1993, as
Exhibit 10.57, File No. 33-61952).
10.71 Consent of Telsmith, Inc.; Heatec,
Inc.; Roadtec, Inc.; and Trencor
Jetco, Inc.; dated March 31, 1993,
with respect to (i) the Fourth
Amendment to Note Agreement; (ii)
the Senior Guaranty; and (iii) the
Security Documents (incorporated
by reference to the Company's
Registration Statement on
Form S-2, effective June 8, 1993,
as Exhibit 10.58, File No. 33-61952).
10.72 Joint Venture Agreement, dated
June 6, 1993, between the
Company and Putzmeister-Werk
Maschinenfabrik GmbH
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1993, File No. 0-14714).
10.73 Technology Contribution
Agreement, dated July 12, 1993,
between the Company and Wibau-
Astec Maschinenfabrik GmbH
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1993, File No. 0-14714).
10.74 Seventh Amendment, dated January
21, 1994 between the Company
and The First National Bank of
Chicago, with respect to the
Amended and Restated Credit
Agreement, dated April 27, 1989
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1993, File No. 0-14714).
10.75 Loan Agreement between City of
Mequon, Wisconsin and Telsmith,
Inc. dated as of February 1, 1994
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1993, File No. 0-14714).
10.76 Credit Agreement by and between
Telsmith, Inc. and M&I Marshall &
Ilsley Bank, dated as of February
1, 1994 (incorporated by
reference to the Company's Annual
Report on Form 10-K for the year
ended December 31, 1993, File No.
0-14714).
10.77 Security Agreement by and between
Telsmith, Inc. and M&I Marshall &
Ilsley Bank, dated as of February
1, 1994 (incorporated by
reference to the Company's Annual
Report on Form 10-K for the year
ended December 31, 1993, File No.
0-14714).
10.78 Mortgage and Security Agreement
and Fixture Financing Statement by
and between Telsmith, Inc. and M&I
Marshall & Ilsley Bank, dated as of
February 1, 1994 (incorporated
by reference to the Company's
Annual Report on Form 10-K for
the year ended December 31,
1993, File No. 0-14714).
10.79 Guarantee of Astec Industries, Inc.
in favor of M&I Ilsley Bank, dated
as of February 1, 1994
(incorporated by reference to the
Company's Annual Report on Form
10-K for the year ended December
31, 1993, File No. 0-14714).
10.80 Guarantee of Wibau-Astec Maschinenfabrik GmbH in favor of
Dresdner Bank Aktiengensellschaft,dated as of December 22, 1993.
10.81 Letter of Guarantee of Wibau-Astec Maschinenfabrik GmbH in favor of
Berliner Hondels - und Frankfurter Bank, dated as of
December 22, 1993.
10.82 Guarantee of Wibau-Astec Maschinenfabrik GmbH in favor of
Bayerische Vereinsbank, dated as of December 22, 1993.
10.83 Loan Agreement dated as of April 1,1994, between Grapevine
Industrial Development Corporation and Trencor, Inc.
10.84 Letter of Credit Agreement, dated April 1, 1994, between The First
National Bank of Chicago and Trencor, Inc.
10.85 Guaranty Agreement, dated April 1, 1994, between Astec Industries,
Inc. and Bank One, Texas, NA, as Trustee.
10.86 Astec Guaranty, dated April 29, 1994, of debit of Trencor, Inc. in
favor of The First National Bank of Chicago.
10.87 Credit Agreement, dated as of July 20, 1994, between the Company
and The First National Bank of Chicago.
10.88 Guarantee of Wibau-Astec Maschinenfabrik GmbH in favor of
Bayerische Vereinsbank, dated as of January 16, 1995.
10.89 Waiver for December 31, 1994, dated February 24, 1995 with respect
to the First National Bank of Chicago Credit Agreement dated July 20, 1994.
11. Statement Regarding Computation of Per Share Earnings.
22. Subsidiaries of the Registrant.
23. Consent of Independent Auditors
(b) A report on Form 8-K was filed during the fourth
quarter of 1994 in connection with the Wibau-Astec
Maschinenfabrik GmbH acquisition.
(c) The Exhibits to this Report are listed under Item
14(a)(3) above.
(d) The Financial Statement Schedules to this Report
are listed under Item 14(a)(2) above.
<PAGE>
APPENDIX "A"
to
ANNUAL REPORT ON FORM 10-K
ITEMS 8 and 14(a)(1) and (2), (c) and (d)
INDEX TO FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULES
ASTEC INDUSTRIES, INC.
Contents Page
Selected Consolidated Financial Data
Management's Discussion and Analysis of Financial Condition and
Results of Operations
Report of Independent Auditors
Consolidated Balance Sheets at December 31, 1994 and 1993
Consolidated Statements of Income for the Years Ended December
31, 1994, 1993 and1992
Consolidated Statements of Shareholders' Equity for the Years
Ended December 31, 1994, 1993 and 1992
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1994, 1993 and 1992
Notes to Consolidated Financial Statements
Schedule VIII - Valuation and Qualifying Accounts
<PAGE>
<TABLE>
SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT AS NOTED*)
Consolidated Income Statement Data (1)
1994 1993 1992 1991 1990
<CAPTION>
<S> <C> <C> <C> <C> <C>
Net sales $213,806 $172,801 $149,133 $134,512 $134,982
Selling, general, and
administrative expenses 31,142 28,624 23,969 20,456 21,946
Patent suit damages
and expenses
net recoveries
and accrual adjustments (14,947) 375 567 3,868 8,329
Research and development 3,166 2,923 2,580 2,503 1,918
Interest expense 713 1,788 3,241 4,597 6,310
Income loss from
continuing operations 23,436 9,338 6,014 524 (13,463)
Discontinued operations 3,530 (2,771)
Net income loss 23,436 9,338 6,014 4,054 (16,234)
Income loss per common
share from continuing
operations* (2) 2.38 1.07 .82 .07 (1.87)
Consolidated Balance Sheet Data
Working capital $ 53,000 $ 40,767 $ 33,641 $ 31,167 $ 49,776
Total assets 155,964 102,967 87,885 90,989 112,414
Total short-term debt 8,573 10 3,103 4,862 8,836
Long-term debt, less current
maturities 16,155 22,660 29,387 50,305
Shareholders' equity 90,373 64,105 27,631 21,279 17,208
Book value per common
share at year-end* (2) 9.04 6.54 3.78 2.95 2.39
Quarterly Financial Highlights (Unaudited)
First Second Third Fourth
Quarter Quarter Quarter Quarter
1994
Net sales $ 46,226 $ 62,694 $ 49,021 $ 55,865
Gross profit 11,029 14,013 11,216 11,839
Net income 2,876 5,212 3,131 12,217
Net income per
common share* (2) .29 .53 .32 1.23
1993
Net sales $ 43,401 $ 52,436 $ 38,838 $ 38,126
Gross profit 10,380 11,878 9,268 10,369
Net income 1,578 3,481 2,116 2,163
Net income per
common share* (2) .22 .45 .22 .22
Common Stock Price* (2)
1994 High 20-1/8 17-5/8 15 15-7/8
1994 Low 13-1/2 13 12-1/2 11-5/8
1993 High 13 14 14-7/8 15-3/4
1993 Low 8-1/2 9-7/8 11-3/8 11
</TABLE>
The Company's common stock is traded on the National Association of
Securities Dealers Automated Quotation System (NASDAQ) National Market
System under the symbol ASTE. Prices shown are the high and low bid prices
as announced by NASDAQ. The Company has never paid any dividends on its
common stock.
The number of shareholders is approximately 900.
[FN]
1 Restated to reflect paving equipment business of Barber-Greene as a
discontinued operation.
2 Restated to retroactively reflect the two-for-one stock split effected in
the form of a dividend on August 12, 1993
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations, 1994 vs. 1993
Net sales for 1994 increased $41,005,000 or approximately 23.7% compared
to 1993. Of this increase, $10,133,000 is attributable to the acquisition of
Gibat Ohl and the remaining 50% of Wibau-Astec. Excluding these
acquisitions, sales increased $30,872,000 or 17.9%. International sales by
domestic subsidiaries were 24.3% in 1994 and 17.2% in 1993. The increase
in sales reflects the strength of our economy, the attitude of our customers
toward the economy, expectations for infrastructure contracts and the quality,
performance and competitiveness of our products as a result of many years of
investment in research and development.
The gross profit margin for 1994 was 22.5% compared to 24.2% for 1993.
Domestic operations gross profit margin for 1994 was 23.0% compared to
24.2% for 1993. Foreign operations gross profit margin was 11.4%. The
domestic gross profit margin was negatively effected in 1994 for several
reasons:
1) Telsmith's consolidation of plant operations with many inefficiencies
involved.
2) Trencor's relocation to facilities in Grapevine, Texas from Grand
Prairie, Texas.
3) Inefficiencies related to the training of a significant number of new
manufacturing employees at Trencor and training of replacements for
retirees at Telsmith.
4) Trencor's introduction of the Log Hog product line.
Offsetting these negative factors were improved margins at Heatec and
increased manufacturing efficiencies at Roadtec, both of which positively
affected the gross profit margin.
In 1994, selling, general, and administrative expenses decreased to 14.6% of
net sales from 16.6% in 1993. The increase in sales is the primary reason for
the percentage reduction.
Research and development expenses declined from 1.7% of net sales in 1993
to 1.5% in 1994, again, primarily due to the increase in sales.
In October 1994, the decision by the United States Supreme Court to deny
certiorari in connection with the appeal filed by CMI Corporation "CMI"
brought to a successful end the Company's long-standing patent litigation
with CMI. The Supreme Court's actions effectively denied CMI's request to
appeal a lower court ruling that found that Astec did not have any liability
for infringement of CMI patents and left intact damages payable by CMI to
Astec. As a result, previously established liabilities of $13,870,000,
payable by the Company, were reversed and patent damages of $1,309,000 were
received from CMI. These amounts are shown in Consolidated Statements of
Income as net recoveries and accrual adjustments of patent damages. See
Contingencies and Note 9 to the Consolidated Financial Statements.
Because our joint venture, Wibau-Astec, continued to be unprofitable, it
became apparent that major changes were necessary and we began a plan of
restructuring. Restructuring costs of $1,500,000 related to Wibau-Astec are
discussed in Note 12 to Consolidated Financial Statements. The anticipated
effect of the restructuring plan is reflected in the pro forma summary
included in Note 2.
Interest expense for 1994 decreased to 0.3% of net sales from 1.0% in 1993.
This is due to a decrease in overall interest expense combined with the
increase in sales. Plant expansion and improvements were financed by
industrial revenue bonds at favorable interest rates.
Other income decreased by approximately $371,000 or 15.9% in 1994. As
noted in the 1993 Management Discussion and Analysis, one international
licensee that was not renewed for 1994 produced $665,000 in license fees in
1993.
The equity in loss of joint venture of $3,177,000 reflects 50% of the losses
from the joint venture for the ten months prior to the purchase of the
remaining 50% interest in Wibau-Astec.
Income tax expense for 1994 was $2,300,000 or approximately 8.9% of pre-
tax income. The primary reasons for the variance from the normal corporate
tax rate are the utilization of net operating loss carryforwards and
establishment of a deferred tax benefit relative to net deductible temporary
differences which could be recovered against future taxes or taxes previously
paid. See Note 8 to Consolidated Financial Statements.
In the first quarter of 1993, the Company adopted SFAS No. 109,
"Accounting for Income Taxes". At December 31, 1994, there were net
deferred tax assets of approximately $14,799,000, which are comprised of
temporary differences, the tax benefit of net operating loss and credit
carryforwards and foreign net operating loss carryforwards. Temporary
differences relate primarily to inventory reserves, warranty reserves and bad
debt reserves. At December 31, 1994, a valuation allowance of approximately
$10,070,000 was recorded. This valuation allowance offsets the deferred tax
assets relative to net operating loss and credit carryforwards as well as
foreign net operating loss carryforwards. Both the net operating loss and
credit carryforwards are SRLY carryforwards and can be used to offset only the
income of a certain subsidiary of the Company. As a result, the Company
determined that a valuation allowance was necessary for these items as well
as the foreign net operating loss carryforward, the utilization of which is
uncertain.
Due to the utilization of the majority of its credit carryforwards, the
Company expects its tax rate for 1995 to approximate the normal corporate
rate.
The backlog at December 31, 1994 was $50,465,000 compared to $33,100,000 at
December 31, 1993, which represents a 52.4% increase. The increase is
primarily due to the optimism of our customers about the strength of the
economy and the performance and competitiveness of our products.
Results of Operations, 1993 vs. 1992
Net sales from continuing operations for 1993 increased $23,668,000, or
approximately 15.9% compared to 1992. International sales declined from
21.9% of total company net sales in 1992 to 17.2% in 1993. Domestic sales
increased by 22.9% in 1993 and 18% in 1992. The improved sales reflect the
optimism of our customers with respect to both the continued improvement of
the economy and the federal role in providing funding for the nation's
surface transportation systems through 1997 with the passage of the
Intermodal Surface Transportation Efficiency Act at the end of 1991.
The gross profit margin for 1993 was 24.2% compared to 22.9% for 1992.
Pricing improved slightly in 1993, but the greatest impact on gross profit
margins was the manufacturing efficiency achieved with improved volume.
In 1993, selling, general, and administrative expenses increased to 16.6% of
net sales from 16.1% in 1992. Large increases were incurred for exhibition
expense for the Conexpo show, legal expenses, international dealer
commissions and profit sharing bonuses.
Research and development expenses as a percentage of sales remained
constant at 1.7% of sales for both 1993 and 1992.
Patent suit damages and expenses decreased by $192,000 compared to 1992
and were 0.2% of 1993 net sales compared to .4% in 1992. The patent suit
damages and expenses relate to the patent suits by CMI against Astec and its
former Barber-Greene subsidiary and the countersuit by Astec against CMI.
See "Contingencies" and Note 9 to the Consolidated Financial Statements.
Interest expense for 1993 decreased to 1.0% of net sales from 2.2% of net
sales in 1992. This decrease was primarily the result of the Company's
reduction of its debt by approximately $25,753,000 resulting primarily from
funds generated by a secondary public stock offering of 1,195,000 shares of
common stock, which raised approximately $27,000,000 for the Company. In
connection with the prepayment of substantially all of its debt, the Company
incurred approximately $545,000 in prepayment penalties and expenses.
Other income in 1993 increased by approximately $370,000 or 16.6% over
1992. The increase is primarily due to increased license fee income which
more than offset a nonrecurring refund of unemployment taxes in 1992.
Increases in service income and the forfeiture of two customer deposits also
contributed to the increase. One international licensee was not renewed for
1994 that produced approximately $665,000 of license fee income in 1993.
The equity in loss of joint venture of $720,000 reflects 50% of the loss from
the Wibau-Astec joint venture in 1993. This loss reflects the continued
European recession in 1993.
Due to the existence of net operating loss carryforwards, income tax expense
for 1993 consisted primarily of state income taxes, foreign income taxes and
federal alternative minimum tax.
Liquidity and Capital Resources
Working capital increased to $53,000,000 at December 31, 1994 from
$40,767,000 at December 31, 1993. The Company's debt to equity ratio was
.27 to 1 at December 31, 1994 and .0001 to 1 at December 31, 1993. The
increase in 1994 reflects the utilization of industrial revenue bonds to
expand and modernize plant facilities as well as debt assumed in connection
with acquisitions.
Total short-term borrowings, including current maturities of long-term debt,
were $8,573,000 at December 31, 1994 and $10,000 at December 31, 1993.
Long-term debt, less current maturities was $16,155,000 at December 31,
1994 and zero at December 31, 1993.
Capital expenditures of $21,886,000 were made in 1994 as compared to
capital expenditures in 1993 of $8,767,000. The Company utilized industrial
revenue bonds in the amount of $8,000,000 to finance the Grapevine, Texas
(Trencor) project which included improvements to the existing facility as well
as additions of new equipment. Industrial bonds were issued in February
1994 in the amount of $6,000,000 to assist in financing the Telsmith
expansion at Mequon, Wisconsin.
The Company has a revolving credit loan agreement with The First National
Bank of Chicago. The line of credit is $15,000,000. This credit facility
expires June 30, 1997. At December 31, 1994, $2,655,000 of the line of
credit was utilized. The credit line is unsecured. At December 31, 1994, the
Company was in violation of the covenant relative to capital expenditures and
has received a waiver for such violation.
Wibau-Astec has German bank lines of credit available totaling $11,253,669
(17,500,000 DM) of which $8,069,577 was outstanding at December 31,
1994. Gibat Ohl has a German bank line of credit available of $2,122,000
(3,300,000 DM), $2,925 of which was utilized at December 31, 1994.
On January 31, 1989, the Company placed $10,000,000 in Senior Notes and
$10,000,000 in Senior Subordinated Notes with Principal Mutual Life
Insurance Company. These notes were repaid during the second and third
quarters of 1993 using cash received from the secondary public stock offering.
For additional information on current and long-term debt, see Note 6 to the
Consolidated Financial Statements.
Contingencies
See Note 9 to Consolidated Financial Statements for information on certain
pending litigation and contingent liabilities arising from recourse financing
arrangements.
Environmental Matters
Based on information available from environmental consultants, the
Company has no material reserve requirements for potential environmental
liabilities.
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
Astec Industries, Inc.
We have audited the accompanying consolidated balance sheets of Astec
Industries, Inc. and subsidiaries as of December 31, 1994 and 1993, and the
related consolidated statements of income, shareholders' equity, and cash
flows for each of the three years in the period ended December 31, 1994.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of Astec Industries, Inc. and subsidiaries at December 31, 1994 and
1993, and the consolidated results of its operations and its cash flows for
each of the three years in the period ended December 31, 1994, in conformity
with generally accepted accounting principles.
ERNST & YOUNG LLP
Chattanooga, Tennessee
February 18, 1995
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEET
December 31,
1994 1993
Assets Current assets:
<CAPTION>
<S> <C> <C> <C>
Cash and cash equivalents note 1 $ 10,471,444 $ 3,458,218
Trade receivables less allowance for doubtful
accounts of $1,684,000 in 1994 and
$1,191,000 in 1993 29,852,180 18,116,773
Notes and other receivables 215,390 973,507
Inventories note 1, 3 56,309,735 40,005,281
Prepaid expenses 2,149,795 1,272,524
Deferred tax asset note 8 2,901,799
Other current assets 236,229 349,886
Patent damage escrow funds note 9 12,309,420
Total current assets 102,136,572 76,485,609
Property and equipment, net note 4 42,348,792 23,659,015
Other assets:
Goodwill 8,370,662 1,966,233
Notes receivable 9,541
Deferred tax asset note 8 1,827,494 572,498
Other 1,280,069 274,038
Total other assets 11,478,225 2,822,310
Total $ 155,963,589 $ 102,966,934
Liabilities and Shareholders' Equity
Current liabilities:
Notes payable $ 8,072,502
Current maturities of long-term debt note 6 500,000 $ 9,520
Accounts payable 14,262,518 10,169,871
Customer deposits 6,301,481 1,430,449
Accrued product warranty 3,470,703 1,781,733
Income taxes payable note 8 1,987,511 1,111,928
Reserve for patent damages note 9 13,250,048
Other accrued liabilities 14,541,920 7,965,112
Total current liabilities 49,136,635 35,718,661
Long-term debt, less
current maturities note 6 16,155,000
Deferred retirement costs note 7 192,242 3,033,536
Other 106,716 109,838
Total liabilities 65,590,593 38,862,035
Shareholders' equity: note 1,10
Preferred stock, authorized 2,000,000 shares of
$1.00 par value; none issued
Common stock, authorized 20,000,000 shares of
$.20 par value; issued and outstanding,
10,001,831 in 1994 and 9,795,402 in 1993 2,000,366 1,959,080
Additional paid-in capital 50,900,908 48,200,446
Foreign currency translation adjustment 89,975
Retained earnings 37,381,747 13,945,373
Total shareholders' equity 90,372,996 64,104,899
Total $ 155,963,589 $ 102,966,934
</TABLE>
[FN]
See notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
Year Ended December 31,
1994 1993 1992
<CAPTION>
<S> <C> <C> <C>
Net sales $ 213,806,411 $ 172,801,465 $ 149,132,958
Cost of sales 165,709,245 130,906,009 114,960,249
Gross profit 48,097,166 41,895,456 34,172,709
Selling, general, and
administrative expenses 31,142,335 28,624,179 23,968,553
Research and
development expenses 3,165,795 2,922,921 2,580,146
Patent suit damages
and expenses (net recoveries
and accrual
adjustments) note 9 (14,947,498) 374,740 566,502
Restructuring costs note 12 1,500,469
Income from operations 27,236,065 9,973,616 7,057,508
Other income (expense):
Interest expense (712,853) (1,787,742) (3,241,066)
Loan prepayment penalty
and expenses note 6 (544,783)
Interest income 426,489 516,957 392,798
Other income - net 1,963,633 2,334,407 2,226,820
Equity in loss of joint
venture note 2 (3,176,834) (720,000)
Income before income taxes 25,736,500 9,772,455 6,436,060
Income taxes note 8 2,300,126 434,246 421,807
Net income $ 23,436,374 $ 9,338,209 $ 6,014,253
Earnings per Common and Common Equivalent Share:
Net income: note 1
Primary $ 2.38 $ 1.07 $ .82
Fully diluted .81
Weighted average number of
common and common
equivalent shares outstanding: note 1
Primary 9,843,980 8,694,478 7,349,612
Fully diluted 7,459,304
</TABLE>
[FN]
See notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
For the Years Ended December 31, 1994, 1993 and 1992
Common Stock note 1 Additional Foreign Currency Retained
Shares Amount Paid-In Capital Translation Adjustment Earnings
Balance,
December 31,
<CAPTION>
<C> <C> <C> <C> <C>
1991 3,604,063 $ 720,813 $ 21,965,755 $ (1,407,089)
Issuance of
common
stock 54,571 10,900 325,950
Net income 6,014,253
Balance,
December 31,
1992 3,658,634 731,713 22,291,705 4,607,164
Issuance of
common
stock 1,243,067 248,627 26,887,481
Stock
dividend 4,893,701 978,740 (978,740)
Net income 9,338,209
Balance,
December 31,
1993 9,795,402 1,959,080 48,200,446 13,945,373
Issuance of
common
stock 206,429 41,286 2,700,462
<S> <C>
Change during year $89,975
Net income 23,436,374
Balance,
December 31,
1994 10,001,831 $2,000,366 $50,900,908 $89,975 $37,381,747
</TABLE>
[FN]
See notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,
1994 1993 1992
Cash Flows from Operating Activities
<CAPTION>
<S> <C> <C> <C>
Net income $ 23,436,374 $ 9,338,209 $ 6,014,253
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and
amortization 3,941,871 3,105,694 3,448,398
Provision for doubtful
accounts 362,089 742,752 719,117
Provision for inventory
reserves 3,621,218 2,952,918 2,937,459
Provision for warranty 2,616,565 2,689,441 2,699,657
Provision for patent damages
(net recoveries and
accrual adjustments) (13,250,048) 13,697
Foreign currency translation
adjustment 89,975
(Gain) loss on sale of
fixed assets 322,587 (19,976) (224,367)
Equity in loss of joint venture 3,176,834 720,000
(Increase) decrease in:
Receivables (7,660,990) (7,105,758) (2,646,546)
Inventories (3,537,955) (2,988,734) (563,442)
Prepaid expenses (803,177) (337,248) (38,676)
Patent damage escrow funds 12,309,420 (705,431) (3,667,305)
Deferred tax asset (4,156,695) (572,598)
Other assets (1,916,921) (400,318) 198,238
Increase (decrease) in:
Accounts payable 2,138,449 1,054,970 (138,856)
Customer deposits (1,738,643) 113,091 (555,655)
Accrued product warranty (2,256,128) (2,459,558) (2,421,631)
Income taxes payable 400,355 877,225 169,777
Reserve for patent damages 681,711 642,237
Other accrued liabilities (947,201) 1,376,519 (1,363,786)
Total adjustments (7,288,395) (261,603) (805,381)
Net cash provided by
operating activities 16,147,979 9,076,606 5,208,872
Cash Flows From Investing Activities
Proceeds from sale of property
and equipment - net 307,099 74,284 1,827,358
Expenditures for property
and equipment (21,886,011) (8,767,135) (2,492,249)
Repayments on notes receivable 600,499 47,672 89,071
Investment in joint venture (635,700) (589,900)
Cash payments in connection
with business combination,
net of cash acquired 1,447,965
Net cash (used by)
investing activities (20,166,148) (9,235,079) (575,820)
</TABLE>
[FN]
See notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
Year Ended December 31,
1994 1993 1992
Cash Flows From Financing Activities
<CAPTION>
Proceeds from industrial
<CAPTION>
<S> <C>
bonds 14,000,000
Proceeds from issuance of
<S> <C> <C> <C>
common stock 34,750 27,136,109 336,850
Net (repayments) borrowings
under revolving credit loan 2,655,000 (4,675,000) (1,655,000)
Principal repayments of
loans and notes payable (5,658,355) (21,078,374) (6,831,560)
Net cash provided by (used by)
financing activities 11,031,395 1,382,735 (8,149,710)
Increase (decrease) in cash
and cash equivalents 7,013,226 1,224,262 (3,516,658)
Cash and cash equivalents,
beginning of period 3,458,218 2,233,956 5,750,614
Cash and cash equivalents,
end of period $ 10,471,444 $ 3,458,218 $ 2,233,956
Supplemental Cash Flow Information
Cash paid during the year for:
Interest $ 595,767 $ 2,600,688 $ 3,213,499
Income taxes $ 6,282,709 $ 176,021 $ 462,210
Excluded from the Consolidated
Statements of Cash Flows
were the following effects
of non-cash investing and
financing activities:
Non-cash assets assumed in
connection with repossessions:
Trade receivables $ (1,421,239)
Notes receivable (183,855)
Inventories 1,421,239
Other current assets 183,855
Capital stock issued for purchase
of foreign subsidiary:
Investment in foreign subsidiary $2,706,996
Capital stock (39,871)
Additional paid-in-capital (2,667,125)
Non-cash sale of assets
by assumption of receivable:
Property and equipment $ (8,244)
Receivable - other 8,244
Non-cash transfer of assets:
Trade receivables $90,435
Notes receivable (90,435)
</TABLE>
[FN]
See notes to Consolidated Financial Statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies
Basis of Presentation
The consolidated financial statements include the accounts of Astec
Industries, Inc. and its subsidiaries. The Company's wholly-owned
subsidiaries at December 31, 1994 are as follows:
Astec, Inc.
Heatec, Inc.
Telsmith, Inc.
Roadtec, Inc.
Trencor, Inc.
Wibau-Astec Maschinenfabrik GmbH (Wibau-Astec)
Gibat Ohl Ingenieurgesellschaft fur Anlagentechnik (Gibat Ohl)
All significant intercompany transactions have been eliminated in
consolidation.
Segment Information - The Company operates in one industry
segment. Its products are used predominately for road construction and for
the manufacture and processing of construction aggregates. International
sales by domestic subsidiaries were $52,031,000, $29,693,000, and $32,659,000,
for the years ended December 31, 1994, 1993 and 1992, respectively. Net sales
and net loss (including equity in loss of joint venture) of foreign
operations for the year ended December 31, 1994, were $10,133,000 and
$5,394,000, respectively. At December 31, assets of foreign subsidiaries were
$23,953,000.
Cash Equivalents - The Company considers all highly liquid instruments
purchased with a maturity of less than three months to be cash equivalents.
Inventories - Inventories excluding used equipment are stated at the
lower of first-in, first-out cost or market. Used equipment inventories are
stated on the specific unit cost method, which in the aggregate is
less than market.
Property and Equipment - Property and equipment is stated at cost.
Depreciation is computed generally on the straight-line method for financial
reporting purposes at rates considered sufficient to amortize costs
over estimated useful lives. Depreciation is computed generally on both
accelerated and straight-line methods for tax reporting purposes.
Maintenance and repairs are expensed as incurred.
Goodwill - Goodwill represents the excess of cost over the fair value of net
assets acquired. Goodwill amounts are being amortized using
the straight-line method over twenty years. Additions to goodwill in
1994 reflect the purchase of the Capital Trencher product line, the Log Hog
product line, the additional 50% of Wibau-Astec, and Gibat Ohl.
Product Warranty - The Company provides product warranties against defects in
materials and workmanship for periods ranging from ninety days to one
year following the date of sale. Estimated costs
of product warranties are charged to cost of sales in the period of the sale.
Revenue Recognition - A portion of the Company's equipment sales represents
equipment produced in the Company's plants under short-term contracts for a
specific customer project or equipment designed to
meet a customer's specific requirements. Equipment revenues are recognized in
compliance with the terms and conditions of each contract, which is ordinarily
at the time the equipment is shipped. Certain
contracts include terms and conditions through which the Company recognizes
revenues upon completion of equipment production which is subsequently stored
at the Company's plant at the customer's request. Revenue is recorded on
such contracts upon the customer's assumption of title and all risks of
ownership.
Credit Risk - The Company sells products to a wide variety of customers. The
Company performs ongoing credit evaluations of its customers and generally does
not require collateral. The Company maintains an allowance for
doubtful accounts at a level which management believes is sufficient to cover
potential credit losses. As of December 31, 1994 concentrations of credit
risk with respect to trade receivables are limited due to the wide variety of
customers.
Earnings Per Share - Primary and fully diluted earnings per share are based on
the weighted average number of common and common equivalent shares outstanding
and include the potentially dilutive effects of the exercise of stock options
in years where there are earnings. Fully diluted earnings per share are not
presented for 1994 and 1993 since the dilution is not material. Earnings
per share information has been restated to retroactively reflect
the two-for-one stock split effected in the form of a dividend on August 12,
1993.
<PAGE>
2. Business Combinaions
Effective July 1, 1993, the Company entered into a joint venture with
Putzmeister-Werk Maschinenfabrik GmbH (Putzmeister) to form
a new German limited liability company,Wibau-Astec Maschinenfabrik
GmbH (Wibau-Astec). Wibau-Astec designed, engineered, manufactured and
marketed asphalt plants, stabilization plants, asphalt and thermal
heaters, hot storage systems and soil remediation equipment. Putzmeister
and the Company each owned 50% of Wibau-Astec. On November 7, 1994, the
Company acquired the remaining shares of Wibau-Astec from Putzmeister for
$67,400. The acquisition was accounted for as a purchase effective
November 7, 1994, and accordingly, the results of operations
and accounts of Wibau-Astec subsequent to November 7, 1994 are included in the
Company's consolidated financial statements. The purchase price was allocated
to the net tangible assets of Wibau-Astec based on the estimated fair market
values of the assets acquired. As required by the purchase
method of accounting, the excess amount of the purchase price over the fair
value of Wibau-Astec's net tangible assets was recorded as goodwill
and is being amortized using the straight-line method over 20
years. Subsequent to the acquisition of Wibau-Astec, the Company undertook a
plan to restructure Wibau-Astec's operations. See Note 12 - Restructuring
Costs.
Effective October 17, 1994, the Company acquired the operating assets and
liabilities of Gibat Ohl Ingenieurgesellschaft fur Anlagentechnic (Gibat Ohl)
in exchange for 193,357 shares of the Company's common stock and approximately
$2,760,000 in cash. The acquisition was accounted for as a purchase
effective October 17, 1994, and accordingly, the results of operations and
accounts of Gibat Ohl subsequent to October 17, 1994 are included
in the Company's consolidated financial statements. The purchase price of
approximately $5,460,000 was allocated to the net tangible assets of Gibat Ohl
based on the estimated fair market values of the assets acquired. The
excess of the purchase price over the fair market value of Gibat
Ohl's net tangible assets was recorded as goodwill and is being amortized
using the straight-line method over 20 years.
A summary of the net assets acquired is as follows:
Wibau-Astec Gibat Ohl
Current assets $ 4,938,766 $ 11,007,164
Property, plant and equipment 412,193 300,657
Current liabilities (8,678,984) (10,029,223)
Other liabilities (2,038,165)
Goodwill 1,193,259 4,153,364
Net assets acquired excluding cash (4,172,931) 5,431,962
Cash 4,240,331 32,984
Net assets acquired $ 67,400 $ 5,464,946
The following unaudited pro forma summary presents the consolidated results of
operations as if the acquisition of Wibau-Astec and Gibat Ohl had occurred at
the beginning of each period presented. Pro forma adjustments have been made
to reflect the restructuring of Wibau-Astec as described in Note 12. The pro
forma results have been prepared for comparative purposes only and do not
purport to be indicative of the results that would have occurred had the
acquisition occurred at the beginning of the periods presented or of results
which may occur in the future.
Year Ended December 31,
1994 1993
Net sales $ 223,887,000 $ 188,823,000
Income from operations 28,380,000 10,576,000
Net income 24,619,000 9,638,000
Per common and common
equivalent share:
Net income $ 2.50 $ 1.11
Prior to its acquisition of the remaining 50% interest in Wibau-Astec, the
Company's investment in Wibau-Astec was accounted for by the equity method.
Accordingly, net income as presented in the Consolidated Statements of
Income for 1994 and 1993 includes the Company's share of Wibau-Astec's
losses for periods prior to the acquisition of $3,177,000 and $720,000,
respectively.
3. Inventories
Inventories consisted of the following:
December 31,
1994 1993
Raw materials and parts $ 26,705,110 $ 18,418,839
Work-in-process 14,380,192 6,017,940
Finished goods 7,745,709 7,802,956
Used equipment 7,478,724 7,765,546
Total $ 56,309,735 $ 40,005,281
4. Property and Equipment
Property and equipment consisted of the following:
December 31,
1994 1993
Land, land improvements, and buildings $ 26,676,486 $ 14,062,161
Equipment 37,497,348 27,955,598
Less accumulated depreciation (21,880,823) (18,437,672)
Land, buildings, and equipment - net 42,293,011 23,580,087
Rental property:
Equipment 1,703,608 1,703,608
Less accumulated depreciation (1,647,827) (1,624,680)
Rental property - net 55,781 78,928
Total $ 42,348,792 $ 23,659,015
5. Leases
The Company leases certain land, buildings and equipment which are used in its
operations. Total rental expense charged to operations under operating
leases was approximately $615,000, $427,000 and $384,000 for the years ended
December 31, 1994, 1993 and 1992 respectively.
Minimum rental commitments for all noncancelable
operating leases at December 31, 1994, are as follows:
1995 $ 718,000
1996 492,000
1997 246,000
1998 97,000
1999 and beyond 189,000
The Company also leases equipment to customers under short-term contracts
generally ranging from 2 months to 6 months. Rental income under
such leases was $1,394,000, $1,719,000 and $2,470,000, for
the years ended December 31, 1994, 1993 and 1992, respectively.
6. Long-term Debt
Long term debt consisted of the following:
December 31,
1994 1993
Revolving credit loan of
$15,000,000 at December 31, 1994
and 1993, available through
June 30, 1997 at an interest rate of
prime less a quarter, which was 8.25% and 6.0%
at December 31, 1994 and 1993, respectively $ 2,655,000
Loans payable in monthly installments
maturing at various dates through
1995 at interest rates from 7.25% to 14.85% $ 9,520
Industrial Development Revenue Bonds
payable in semi-annual installments through
2006 at weekly negotiated interest rates 6,000,000
Industrial Development Revenue Bonds due in
2009 at weekly negotiated interest rates 8,000,000
Total long-term debt 16,655,000
Less current maturities 500,000 9,520
Long-term debt less
current maturities $ 16,155,000 $ 0
On January 31, 1989, the Company placed $10,000,000 in Senior Notes and
$10,000,000 in Senior Subordinated Notes with Principal Mutual Life Insurance
Company ("Principal"). The proceeds of the notes placed with Principal were
applied to the outstanding revolving credit loan with The First National
Bank of Chicago ("FNBC"). During 1993, both the Senior and Subordinated
Notes with Principal were repaid in full. Related prepayment penalties and
expenses are reflected on a separate line in the Consolidated Statements of
Income.
During 1994, the Company negotiated a new unsecured revolving loan agreement.
The line of credit is $15,000,000 and expires June 30, 1997. At December 31,
1994, the Company was in violation of the covenant relative to capital
expenditures and has received a waiver for such violation.
The aggregate of all maturities of long-term debt
in each of the next five years is as follows:
1995 $ 500,000
1996 500,000
1997 3,155,000
1998 500,000
1999 and beyond 11,500,000
For 1994, the weighted average interest rate on short term borrowings, which
include current maturities of Industrial Revenue Bonds and notes payable,
were 3.46% and 8.75%, respectively.
7. Retirement Benefits
A former subsidiary of the Company, the Barber-Greene Company, had defined
benefit pension plans ("Barber-Greene Plans") covering substantially all of
its employees. Non-union benefits were frozen as of September 1, 1986, and
certain union benefits were frozen as of October 31, 1986. The Company
retained responsibility for the Barber-Greene Plans when it sold the
Barber-Greene Company in 1991. Telsmith, Inc. also sponsors a defined
benefit pension plan covering certain employees hired prior to October 14,
1987 who have chosen not to participate in the Company's 401(k) savings plan.
The benefit is based on years of benefit service multiplied by a monthly
benefit as specified in the plan. The Company's funding policy for its
pension plans is to make the minimum annual contributions required by
applicable regulations.
During 1994, the Company made the decision to terminate the Barber- Greene
Plans and purchased annuities to fund the benefits provided for in the plans.
The Company has requested approval from the Internal Revenue Service to
terminate the plans but has yet to receive such approval. As a result, no
settlement of the plan will occur until 1995. The annuities purchased by the
Company during 1994 are included in plan assets.
A reconciliation of the funded status of the Plans, which is based on a
valuation date of September 30, with amounts reported in the Company's
consolidated balance sheets, is as follows:
1994 1993
Actuarial present value of
benefit obligations:
Vested $ 40,574,462 $ 38,229,010
Nonvested 85,245 251,677
Accumulated benefit obligation $ 40,659,707 $ 38,480,687
Projected benefit obligation $ 40,659,707 $ 38,480,687
Plan assets at fair value 40,589,417 43,018,508
Projected benefit obligation in
excess of (less than) plan assets 70,290 (4,537,821)
Unrecognized net gain 450,751 7,976,321
Prior service cost not
yet recognized in net
periodic pension cost (320,665) (357,323)
Pension liability in the
consolidated balance sheets $ 200,376 $ 3,081,177
Net periodic pension cost for 1994, 1993, and 1992 included the following
components:
Year Ended December 31,
1994 1993 1992
Service cost - benefits earned
during the period $ 31,503 $ 26,873 $ 34,426
Interest cost on projected
benefit obligation 2,565,355 2,754,319 2,761,195
Actual return on plan assets 2,148,873 12,318,009 833,167
Net amortization and deferral 5,405,871 9,345,175 1,948,268
Net (income) expense $ 660,140 $ 191,642 $ 14,186
The weighted average discount rate used in determining the actuarial present
value of the projected benefit obligation was 8.5% at September 30, 1994 and
7.0% at September 30, 1993. The expected long-term rate of return on assets
was 9.0% for the years ending September 30, 1994 and 1993. Plan assets are
primarily comprised of corporate equity and corporate and U.S. Treasury debt
securities.
In 1987, the Company adopted deferred savings plans (Savings Plans) under
Section 401 (k) of the Internal Revenue Code, under which substantially all
employees of the Company and its subsidiaries are eligible. In 1991 the
Savings Plans were consolidated and provide that the Company will match an
amount equal to 50% of employee savings subject to certain limitations. The
total expense for such matching was approximately $696,000, $567,000 and
$485,000 for the years ended December 31, 1994, 1993 and 1992, respectively.
In addition to the retirement plans discussed above, the Company has an
unfunded postretirement medical and life insurance plan covering employees of
its Telsmith, Inc. subsidiary and retirees of its former Barber-Greene
subsidiary. Effective January 1, 1993, the Company adopted SFAS No. 106,
(Employers' Accounting for Postretirement Benefits Other than Pensions). The
accumulated postretirement benefit obligation (APBO) at adoption was
approximately $674,000 and is being amortized over twenty years.
The accumulated postretirement benefit obligation and the amount
recognized in the Company's consolidated balance sheets, is as follows:
December 31,
1994 1993
Accumulated postretirement
benefit obligation:
Retirees $ 130,600 $ 207,500
Active employees 473,000 425,800
603,600 633,300
Unamortized transition obligation 605,600 639,300
Unrecognized net gain 118,800 29,800
Accrued postretirement
benefit cost $ 116,800 $ 23,800
Net periodic postretirement benefit cost included the following components:
Year Ended December 31,
1994 1993
Service cost $ 53,500 $ 53,500
Interest cost 42,900 42,900
Amortization of transition
obligation 33,700 33,700
Net expense $ 130,100 $ 130,100
Postretirement benefit costs for 1992 were not material. A discount rate of
8.5% was used in calculating the APBO. The APBO assumes a 13.5% increase in
per capita health care costs decreasing gradually to 5.8% for years 2012 and
later. A 1% increase in the medical inflation rate would increase the APBO by
approximately $26,800 and the expense by approximately $6,000.
8. Income Taxes
Effective January 1, 1993, the Company adopted SFAS No. 109. "Accounting for
Income Taxes". Prior years' financial statements have not been restated nor
was there any cumulative effect on income from the adoption of SFAS No. 109.
For financial reporting purposes, income before income taxes includes the
following components:
Year Ended December 31,
1994 1993 1992
United States $ 30,726,395 $ 9,474,455 $ 6,436,060
Foreign:
License income 404,000 1,018,000
Equity in loss of
joint venture (3,176,834) (720,000)
Loss from foreign subsidiary (2,217,061)
Income before
income taxes $ 25,736,500 $ 9,772,455 $ 6,436,060
The provision for income taxes consisted of the following:
Year Ended December 31,
1994 1993 1992
Current $ 7,029,419 $ 434,246 $ 421,807
Deferred (benefit) (4,729,293)
Total provision for
income taxes $ 2,300,126 $ 434,246 $ 421,807
A reconciliation of the provision for income taxes at the statutory rate to
those provided is as follows:
Year Ended December 31,
1994 199 1992
Tax at statutory rates $ 9,007,775 $ 3,322,635 $ 2,188,260
Effect of utilization
of net operating loss
carryforwards net of
alternative minimum tax (3,008,000) (3,155,253) (1,921,766)
Effect of utilization
of alternative minimum
tax credits (382,000)
Benefit from foreign
sales corporation (265,000)
State taxes, net of federal
income tax benefit 212,000 115,271 155,313
Income taxes of
other countries 27,000 151,593
Loss from foreign
operations 2,636,000
Recognition of deferred
tax asset (4,729,000)
Reversal of prior temporary
differences (1,937,000)
Other items 738,351
Income Taxes $ 2,300,126 $ 434,246 $ 421,807
At December 31, 1994, the Company had federal net operating loss
carryforwards of approximately $3,800,000 for tax purposes, all of which are
limited by consolidated return rules to use in offsetting only the taxable
income of a subsidiary of the Company. The net operating loss carryforwards
expire at various dates from 1997 through 2005. For financial reporting
purposes, the federal net operating loss carryforwards approximate
$11,600,000. At December 31, 1994, the Company had foreign net operating
loss carryforwards of approximately $14,000,000 available to offset future
income of Wibau-Astec.
At December 31, 1994, the Company had investment tax and other credit
carryforwards of approximately $641,000 expiring at various dates principally
from 1995 through 1999. Utilization of these credits will be limited to use
in offsetting only the taxable income of a subsidiary of the Company.
As a result of utilizing the net operating loss carryforwards, net income from
continuing operations increased by approximately $3,008,000, $3,155,000 and
$1,922,000 and related per share amounts increased by approximately $.31,
$.36 and $.26 for the years ended December 31, 1994, 1993 and 1992,
respectively.
At December 31, 1994, the company had deferred tax assets of approximately
$16,861,000, and deferred tax liabilities of approximately $2,062,000,
related to temporary differences and tax loss and credit carryforwards. At
December 31, 1994, a valuation allowance of approximately $10,070,000 was
recorded. This valuation allowance offsets the deferred tax assets relative
to net operating loss and credit carryforwards as well as foreign net
operating loss carryforwards. Both the net operating loss and credit
carryforwards are SRLY carryforwards and can be used to offset only the
income of a certain subsidiary. Due to this, the Company determined that a
valuation allowance was necessary for these items as well as the foreign net
operating loss carryforward, the utilization of which is uncertain.
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial
statement purposes and the amounts used for income tax purposes.
Significant components of the Company's deferred tax liabilities and assets
are as follows:
December 31,
1994 1993
Deferred tax assets:
Inventory reserves $ 1,753,000 $ 2,270,000
Legal reserves 100,000 487,000
Pension expense 109,000 1,098,000
Investment in foreign
joint venture 1,827,000 747,000
Other accrued expenses 3,002,000 2,703,000
Alternative minimum
tax credits 1,216,000
Net operating loss
carryforwards 1,344,000 4,216,000
Foreign net operating
loss carryforwards 8,085,000
Other credit carryforwards 641,000 760,000
Total deferred tax assets 16,861,000 13,497,000
Deferred tax liabilities:
Property and equipment 2,062,000 1,742,000
Total deferred tax liabilities 2,062,000 1,742,000
Net deferred tax assets 14,799,000 11,755,000
Valuation allowance (10,070,000) (11,182,000)
Deferred tax asset $ 4,729,000 $ 573,000
9. Contingencies
During 1994, and in previous years, the Company and its former Barber-Greene
subsidiary (now Telsmith, Inc.) were defendants in two patent infringement
actions brought by Robert L. Mendenhall and CMI Corporation ("CMI"), a
competitor, seeking monetary damages and an injunction to cease the alleged
infringement.
In 1990, CMI was awarded damages of $4,457,000 and prejudgment interest of
$2,838,000 or a total of $7,295,000 from Barber-Greene. During 1991, in a
separate trial, CMI was awarded damages of $8,463,000, prejudgment interest
of $5,309,000 and attorney's fees of $737,000 for a total of $14,509,000 from
Astec, and Astec was awarded damages of $667,000 plus $391,000 of prejudgment
interest or a total of $1,058,000 from CMI. The total damages and expenses
awarded to CMI were $20,746,000, net of the $1,058,000 awarded to Astec.
Both Astec and CMI appealed the judgments. In connection with its appeals,
the Company was directed by the courts to pledge substantially all of its real
property and to deposit funds in an escrow account to secure the judgments
against the Company pending the outcome of appeals.
On June 9, 1994, the Company announced that the United States Court of
Appeals for the Federal Circuit had reversed the lower court decision and did
not remand to the lower court for further proceedings the judgments
previously entered against Astec and its former Barber-Greene subsidiary in
the Robert L. Mendenhall and CMI patent litigation. Those judgments totaled
approximately $22,000,000. The Federal Circuit Court ruled in favor of Astec
because the allegedly infringing patents had been held invalid in a separate
third party case. CMI asked the Federal Circuit to reconsider its decision
and to have all of the Federal Circuit judges rehear the appeal. The Company
responded to this request. On September 20, 1994, the Company announced that
the United States Court of Appeals for the Federal Circuit denied the request
from Mendenhall and CMI to reconsider its earlier reversal. With the issuance
of this ruling, the Federal Circuit's review of this ongoing patent
litigation ended.
On October 11, 1994, CMI and Robert L. Mendenhall filed a Petition of Writ
Certiorari asking the U.S. Supreme Court to review the decision of the
Federal Circuit Court of Appeals. The Company filed a response opposing the
Petition and on November 28, 1994, the Supreme Court issued an Order denying
the Petition thus bringing the patent litigation to an end.
As a result of the Supreme Court's refusal to grant certiorari, the Company
received $12,917,000 which was being held in escrow pending the Company's
appeal of the two judgments. In addition, on December 15, 1994, the Company
received $1,309,000 from CMI in satisfaction of the judgment entered in favor
of the Company on its counterclaim against CMI. The receipt of these funds
effectively concluded the litigation between the Company and CMI and Robert
L. Mendenhall which had been pending for a number of years. As a result, the
Company has reversed its accrued liability for patent damages. The reversal
of $13,870,000 in accrued patent damages and the receipt of $1,309,000 in
patent damages from CMI total $15,179,000 and are included in the
Consolidated Statements of Income as Patent suit damages and expenses net
recoveries and accrual adjustments.
In an unrelated case, the Company's Telsmith subsidiary is a defendant in a
patent infringement action brought by Nordberg, Inc., a manufacturer of a
competing line of rock crushing equipment, seeking monetary damages and an
injunction to cease an alleged infringement of a patent on certain components
used in the production of its rock crushing equipment. This case, being
heard before the U.S. District Court for the Eastern District of Wisconsin,
has been bifurcated into liability and damages phases. The liability phase
was tried on January 11, 1993; however, no decision has been rendered by the
Court. Because of the uncertainties inherent in the litigation process, the
Company is unable to predict the ultimate outcome of this litigation.
On October 28, 1993, the Company was also named as a defendant in a patent
infringement action brought by Gencor, Inc., a manufacturer of a competing
line of asphalt plants, seeking monetary damages and an injunction to cease
an alleged infringement of a patent on certain components used in the
production of its asphalt plant product line. This case was filed in the
U.S. District Court for the Middle District of Florida, Orlando Division, and
is currently in the discovery phase. Management believes this case to be
without merit and intends to vigorously defend this suit; however, due to the
uncertainties inherent in the litigation process, the Company is unable to
predict the ultimate outcome of this litigation.
Management has reviewed all claims and lawsuits and, upon the advice of
counsel, has made provision for any estimable losses; however, the Company is
unable to predict the ultimate outcome of the outstanding claims and lawsuits.
Recourse Customer Financing - Certain customers have financed purchases of
the Company's products through arrangements in which the Company is
contingently liable for customer debt aggregating approximately $13,800,000
and $13,700,000 at December 31, 1994 and 1993, respectively. These
obligations average five years in duration and have minimal risk.
Other - The Company is contingently liable for letters of credit of
approximately $2,082,000 issued for bid bonds and performance bonds.
10. Shareholders' Equity
Stock Options - The Company has reserved 300,000 shares of common stock under
the 1986 Stock Option Plan and 500,000 shares of common stock under the 1992
Stock Option Plan for issuance upon exercise of nonqualified options,
incentive options and stock appreciation rights to officers and employees of
the Company and its subsidiaries at prices determined by the Board of
Directors. At December 31, 1994, a total of 328,800 shares of common stock
related to the 1992 Stock Option Plan are available for options to be granted.
Nonqualified options are exercisable at a price not less than 85% of the
Board of Directors' determination of the fair market value of the Company's
common stock on the date of the grant. Nonqualified options are exercisable
starting one year from the date of grant and expire ten years after the date
of grant. Incentive stock options granted by the Board of Directors must be
exercisable at a price not less than 100% of the fair market value of the
Company's common stock on the date of grant. Incentive stock options are
exercisable immediately after the date of grant, except for certain officers
of the Company, and expire ten years after the date of grant. Stock
appreciation rights may be granted by the Board of Directors in conjunction
with the grant of an incentive or nonqualified option. A stock appreciation
right permits a grantee to receive payment in either cash or shares of the
Company's common stock equal to the difference between the fair market value
of the common stock and the exercise price for the related option.
The following is a summary of stock option information:
Number Option Price
of Shares Range Per Share
Outstanding, December 31, 1991 238,800 $ 1.375 - 4.675
Granted 140,000 3.25
Expired (12,800) 4.675
Exercised (109,000) 1.375 - 4.675
Outstanding, December 31, 1992 257,000 1.375 - 4.675
Exercised (87,000) 1.375 - 4.675
Outstanding, December 31, 1993 170,000 1.375 - 4.675
Granted 87,000 14.875 - 16.363
Exercised (13,000) 1.375 - 3.25
Outstanding, December 31, 1994 244,000 $ 1.375 - 16.363
On July 29, 1993, the Company's Board of Directors approved a two-for-one
split of the Company's common stock in the form of a 100% stock dividend for
shareholders of record as of August 12, 1993. A total of 4,893,701 shares of
common stock were issued in connection with the split. The stated par value
of each share was not changed. A total of $978,740 was reclassified from
additional paid-in capital to the Company's common stock account. All share
and per share amounts for 1993 and prior years have been restated to
retroactively reflect the stock split.
11. Related Party Transactions
In September 1991, the Company's Chairman, its Senior Vice President, and the
President of its Telsmith, Inc. subsidiary formed a general partnership which
acquired 25% of the common stock of American Rock Products, Inc., an Ohio
corporation engaged in the business of supplying crushed rock to concrete and
asphalt producers in the southeastern Oklahoma area ("Amrock"). These
individuals own interests in the partnership of 50%, 25% and 25%,
respectively. In December 1992, the rock crushing business of Amrock was
sold to a competitor, exclusive of two used rock crushing machines and certain
other miscellaneous inventory and equipment.
In March 1994, Amrock sold two of these used rock crushing machines to
Telsmith for $50,000 and $70,000, respectively. The purchase price for each
of these machines was determined by the president of Telsmith based on his
opinion of their fair market value at the time of purchase. Telsmith intends
to market both rock crushing machines to its customers for sale in the
ordinary course of business.
12. Restructuring Costs
In the fourth quarter of 1994, the Company developed and implemented a plan
to restructure the operations of Wibau-Astec. In connection with the
restructuring, the Company accrued costs of $1,500,000 $1,250,000, net of
tax, or $0.12 per share. The plan included, among other things, the
cessation of manufacturing operations at Wibau-Astec along with related
personnel reductions as well as personnel reductions in engineering and
administration. Total personnel reductions were approximately 150. The plan
was communicated to employees and severance notices given during the fourth
quarter of 1994.
As of the end of 1994, the restructuring was substantially complete. Total
costs incurred were for the write-down of certain assets to estimated fair
market value, severance payments and lease termination expenses. Severance
costs and exit costs incurred were approximately $1,137,000 and $363,000,
respectively.
Wibau-Astec will sell Astec asphalt plants either manufactured in the United
States or subcontracted in Europe. Wibau-Astec will continue to sell
Wibau-Astec parts and service a large customer base and will utilize
subcontractors as needed for parts and/or manufacturing components in Europe.
<PAGE>
<TABLE>
ASTEC INDUSTRIES, INC. AND SUBSIDIARIES
SCHEDULE (VIII)
VALUATION AND QUALIFYING ACCOUNTS FOR
CONTINUING OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
ADDITIONS
CHARGES TO
BEGINNING COSTS & OTHER ENDING
DESCRIPTION BALANCE EXPENSES ADDITIONS DEDUCTIONS BALANCE
December 31, 1994:
Reserves deducted from assets to which they apply:
Allowance for
doubtful
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
accounts $ 1,191,083 $ 362,089 $ 467,607 (3) $ 336,537 $1,684,242
Reserve for
inventory $ 6,494,533 $3,621,218 $ 0 $5,121,716 $4,994,035
Other Reserves:
Product warranty $1,781,733 $2,616,565 $ 0 $927,595 $3,470,703
Reserve for
patent damages $13,250,048 $ 620,290 $ 0 13,870,338 $0
ADDITIONS
CHARGES TO
BEGINNING COSTS & OTHER ENDING
DESCRIPTION BALANCE EXPENSES ADDITIONS DEDUCTIONS BALANCE
<CAPTION>
December 31, 1993:
Reserves deducted from assets to which they apply:
<CAPTION>
Allowance for
doubtful
<CAPTION>
<S> <C> <C> <C> <C> <C>
accounts $ 1,060,588 $ 742,752 $ 21,609 $ 633,866 (1) $ 1,191,083
Reserve for
inventory $ 5,948,084 $ 2,952,918 $ 0 $ 2,406,469 $ 6,494,533
Other Reserves:
Product warranty $1,551,850 $ 2,689,441 $0 $ 2,459,558 (2) $ 1,781,733
Reserve for
patent damages 12,554,640 $ 695,408 $ 0 $ 0 13,250,048
ADDITIONS
CHARGES TO
BEGINNING COSTS & OTHER ENDING
DESCRIPTION BALANCE EXPENSES ADDITIONS DEDUCTIONS BALANCE
December 31, 1992:
Reserves deducted from assets to which they apply:
Allowance for
doubtful
<CAPTION>
<S> <C> <C> <C> <C> <C>
accounts $ 1,038,155 $ 719,117 $ 152,052 848,736 (1) $ 1,060,588
Reserve for
inventory $ 8,567,872 $ 2,937,459 $ 0 5,557,247 $ 5,948,084
Other Reserves:
Product warranty $ 1,273,824 $ 2,699,657 $ 0 $2,421,631 (2) $ 1,551,850
Reserve for
patent damages $ 11,912,403 $ 642,237 $ 0 0 $12,554,640
</TABLE>
[FN]
(1) Uncollectible accounts written off, net of recoveries.
(2) Warranty costs charged to the reserve.
(3) Represents reserve balances of subsidiaries acquired in
1994.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of
the Securities Exchange Act of 1934, Astec Industries, Inc. has
duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ASTEC INDUSTRIES, INC.
BY: /s/ J. Don Brock
J. Don Brock, Chairman of the Board
and President (Principal Executive Officer)
BY: /s/ Albert E. Guth
Albert E. Guth, Senior Vice President
Secretary and Treasurer (Principal
Financial and Accounting Officer)
Date: March 2, 1995
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by a majority of
the Board of Directors of the Registrant on the dates indicated:
SIGNATURE TITLE DATE
Chairman of the Board March 2, 1995
J. Don Brock and President
Senior Vice President, March 2, 1995
Albert E. Guth Secretary, Treasurer
and Director
President - Astec, Inc. March 2, 1995
W. Norman Smith and Director
President - Telsmith, Inc. March 2, 1995
Robert G. Stafford and Director
President - Trencor, Inc. March 2, 1995
Jerry F. Gilbert and Director
SIGNATURE TITLE DATE
Director March 2, 1995
E. D. Sloan, Jr.
Director March 2, 1995
James R. Spear
Director March 2, 1995
Joseph Martin, Jr.
Director March __, 1995
George C. Dillon
Director March 2, 1995
G.W. Jones
Director March 2, 1995
Daniel K. Frierson
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of
the Securities Exchange Act of 1934, Astec Industries, Inc. has
duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ASTEC INDUSTRIES, INC.
BY: /s/ J. Don Brock
J. Don Brock, Chairman of the Board and
President (Principal Executive Officer)
BY: /s/ Albert E. Guth
Albert E. Guth, Senior Vice President,
Secretary and Treasurer(Principal
Financial and Accounting Officer)
Date: March 2, 1995
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by a majority of
the Board of Directors of the Registrant on the dates indicated:
SIGNATURE TITLE DATE
/s/ J. Don Brock Chairman of the Board
March 2, 1995
J. Don Brock and President
/s/ Albert E. Guth Senior Vice President, March 2, 1995
Albert E. Guth Secretary, Treasurer
and Director
/s/ W. Norman Smith President - Astec, Inc. March 2, 1995
W. Norman Smith and Director
/s/ Robert G. Stafford President - Telsmith, Inc. March 2, 1995
Robert G. Stafford and Director
/s/ Jerry F. Gilbert President - Trencor, Inc. March 2, 1995
Jerry F. Gilbert and Director
SIGNATURE TITLE DATE
/s/ E.D. Sloan Jr. Director March 2, 1995
E.D. Sloan, Jr.
/s/ James R. Spear Director March 2, 1995
James R. Spear
/s/ Joseph Martin, Jr. Director March 2, 1995
Joseph Martin, Jr.
/s/ George C. Dillon Director March ,1995
George C. Dillon
/s/ G.W. Jones Director March 2, 1995
G.W. Jones
/s/ Daniel K. Frierson Director March 2, 1995
Daniel K. Frierson
<PAGE>
Commission File No. 0-14714
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
EXHIBITS FILED WITH ANNUAL REPORT
ON FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994
ASTEC INDUSTRIES, INC.
4101 Jerome Avenue
Chattanooga, Tennessee 37407
ASTEC INDUSTRIES, INC.
FORM 10-K
INDEX TO EXHIBITS
Sequentially
Exhibit Number Description Numbered Page
Exhibit 2.2 Share Purchase and Transfer Agreement by and
between the Company and Gibat Ohl Ingenieurgesellschaft
fur Anlagentechnik mbH, dated as of October 5, 1994.
Exhibit 4.2 Indenture of Trust, dated April 1, 1994, by and
between Grapevine Industrial Development Corporation and
Bank One, Texas, NA, as Trustee.
Exhibit 10.80 Guarantee of Wibau-Astec Maschinenfabrik GmbH in
favor of Dresdner Bank Aktiengensellschaft, dated
as of December 22, 1993.
Exhibit 10.81 Letter of Guarantee of Wibau-Astec Maschinenfabrik GmbH
in favor of Berliner Hondels - und Frankfurter Bank,
dated as of December 22, 1993.
Exhibit 10.82 Guarantee of Wibau-Astec Maschinenfabrik GmbH in
favor of Bayerische Vereinsbank, dated as of
December 22, 1993.
Exhibit 10.83 Loan Agreement dated as of April 1, 1994, between
Grapevine Industrial Development Corporation
and Trencor, Inc.
Exhibit 10.84 Letter of Credit Agreement, dated April 1,
1994, between The First National Bank of Chicago
and Trencor, Inc.
Exhibit 10.85 Guaranty Agreement, dated April 1, 1994, between
Astec Industries, Inc. and Bank One, Texas, NA, as
Trustee.
Exhibit 10.86 Astec Guaranty, dated April 29, 1994, of debit of Trencor,
Inc. in favor of The First National Bank of Chicago.
Exhibit 10.87 Credit Agreement, dated as of July 20, 1994, between
the Company and The First National Bank of Chicago.
Exhibit 10.88 Guarantee of Wibau-Astec Maschinenfabrik GmbH in
favor of Bayerische Vereinsbank, dated as of
January 16, 1995.
Exhibit 10.89 Waiver for December 31, 1994, dated February 24,
1995 with respect to the First National Bank of
Chicago Credit Agreement dated July 29, 1994.
Exhibit 11 Statement Regarding Computation of Per Share Earnings.
Exhibit 22 Subsidiaries of the Registrant.
Exhibit 23 Consent of Independent Auditors.
For a list of certain Exhibits not filed with this Report that are
incorporated by reference into this Report,
see Item 14(a)(3).
EXHIBIT 11
Statement Regarding Computation of Per Share Earnings
<PAGE>
ASTEC INDUSTRIES, INC.
EXHIBIT (11) - COMPUTATIONS OF EARNINGS PER
SHARE
12/31/94
(In Thousands)
Shares for Earnings Per Share Computations
Primary:
Weighted average outstanding during year 9,844
Common Stock equivalent for stock options &
warrants 141
TOTAL 9,985
Fully Diluted:
Weighted average outstanding during year 9,844
Common Stock equivalent for stock options &
warrants 146
TOTAL 9,990
Earnings Applicable to Common Stock:
Income from continuing operations $ 23,436
Net Income $ 23,436
Earnings Per Common Share (Based on Weighted Average
Number of Common and Uncommon Equivalent Shares
Outstanding):
Income from continuing operations $ 2.38
Net Income $ 2.38
Additional Computations of EPS:
Fully Diluted:
Income from continuing operations $ 2.38
Net Income $ 2.38
EXHIBIT 22
Subsidiaries of the Registrant
<PAGE>
LIST OF SUBSIDIARIES
Jurisdiction of
Name Owned Incorporation
Astec, Inc. 100 Tennessee
Astec Transportation, Inc. 100 Tennessee
Heatec, Inc. 100 Tennessee
Roadtec, Inc. 100 Tennessee
Telsmith, Inc. 100 Delaware
Trencor, Inc. 100 Texas
Wibau Astec Maschinenfabrik
GmbH 100 Germany
Gibat Ohl
Ingenieurgesellschaft fur
Anlagentechnik mbH 100 Germany
Exhibit 23
Consent of Independent Auditors
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the
Registration Statements (Form S-8 No. 33-14738 and 0-
14714) pertaining to the Astec Industries, Inc. 1986 and 1992
Stock Option Plans of our report dated February 18, 1995, with
respect to the consolidated financial statements and schedule of
Astec Industries, Inc. included in the Annual Report (Form 10-
K) for the year ended December 31, 1994.
ERNST & YOUNG LLP
Chattanooga, Tennessee
March 18, 1995
EXHIBIT 2.2
Roll of Deeds No. 443/1994
Negotiated in Frankfurt am Main on October 5, 1994
Before me, the undersigned
Dr. Peter Gamon
Notary for the District of the Court of Appeals
Frankfurt am Main with the office at Frankfurt am
Main appeared today
1. Mr. Wolfgang Strebert, economist, born
December 15, 1942, resident Bismarckstrasse 32, 73770 Denkendorf
2. Mr. Thomas Hoene, attorney born May 12,
1952, resident Riegelaeckerstrasse 44, 71229
Leonberg, here not acting in his own name but in the name of
(a) Mr. Franz-Peter Kirchhoff, resident
Frauenkopfstrasse 22, 70184 Stuttgart and
(b) Mr. Wolfgang Moeck, Romersteinweg 6, 72582
Grabenstetten
on the basis of powers of attorney dated
September 12, 1994 original copy of which was
presented and of which a certified copy is attached
hereto and September 28, 1994, the original of
which is attached to this notarial deed,
3. (a) Mr. Peter Ohl, engineer, born February 4, 1932 and
(b) Mr. Heinz Dangendorf, engineer, born February 25, 1945
both with office address at Blumenroder Stralsse 3, 65533
Limburg/Lahn, and acting not in their
own names but as members of the Board with
joint power of representation for OHL Bau und
Industrie Holding AG ("Ohl BIH") address as above,
a German stock corporation registered in the
Commercial Register of Limburg under HRB 262 on
the basis of a certified excerpt from the
Commercial Register dated September 30, 1994
that was presented at the notarization;
the person appearing under No. 1 and the persons
and the company represented by the persons
appearing under No.'s 2 and 3 hereinafter jointly
the "Sellers" and individually a "Seller",
4. Dr. James Donald Brock, engineer, born October
20, 1938, office address at 4101 Jerome Avenue,
Chattanooga, Tennessee 37407, U.S.A., not acting in
his own name but in his capacity as President of
ASTEC Industries Inc., address as above, a
corporation under the laws of the State of
Tennessee, U.S.A.,
the Company represented by the person appearing
under No.4 hereinafter the "Buyer".
The persons appearing have identified themselves
to the notary by his valid driving license in the
case of the person appearing under No. 1, their
valid German identity cards in the case of the
persons appearing under No.'s 2 and 3 and his U.S.
passport in the case of the person appearing under
4.
The persons appearing requested that this
notarization be done in the English language. The
notary who speaks English fluently ascertained
that all persons appearing have a sufficient
command of the English language and that,
therefore, there is no need for the presence of an
interpretor.
The notary advised the persons appearing that
Boden Oppenhoff Rasor Raue, the law firm in
which the notary is a partner, has represented the
Buyer in connection with the negotiation of this
document and that he, therefore, should not
notarize this agreement.
However, this representation has now come to an
end and the parties request the notary jointly to
proceed with the notarization. Now, therefore, the
parties asked for the notarization of the following:
Share Purchase & Transfer Agreement
WHEREAS
A. Sellers are the sole shareholders of Gibat Ohl
Ingenieurgesellschaft fur Anlagentech-nik mbH,
Hasselroth, (hereinafter the "Company"), a
company duly established and validly existing
under the laws of Germany and registered in the
Commercial Register of the lower court of
Gelnhausen under HRB 1794, having a fully paid-
in share capital of DM 1,000,000, which is divided
into five shares in the nominal amounts of DM
25,000, DM 25,000, DM 550,000, DM 399,500 and
DM 500 respectively (hereinafter the "Shares"), of
which
a share with a nominal value of DM 25,000
a share with a nominal value of DM 25,000
a share with a nominal value of DM 550,000
making a total of three shares
with a total nominal value of DM 600,000
are held by Messrs Strebert, Kirchhoff and Moeck
as multiple owners (Gemeinschaftliche
Rechtsinhaber);
a share with a nominal value of DM 399,500
a share with a nominal value of DM 500
making a total of two shares
with a total nominal value of DM 400,000
are held by Ohl BIH.
The shares now held by Messrs. Strebert, Kirchhoff
and Moeck as multiple owners in the total nominal
value of DM 600,000 were held by Industrie-
Beteiligungen GmbH & Co. KG, a German limited
partnership registered in the Commercial Register
of the Municipal Court of Wolfach under HRA 813
as trustee for Messrs, Strebert, Kirchhoff and
Moeck on the basis of a notarial trust agreement,
Roll of Deeds No. 525/1989 of the Notary Herbert
Bohmer in Erlensee dated October 26, 1989.
Pursuant to Section 4, para. 1 of that agreement the
trust could be terminated by each party in writing
without any notice. Pursuant to 4 para.2 the
shares had been reassigned to the trustors subject
to such termination. Industrie Beteiligungen GmbH
& Co. KG has terminated the trust by written
notice of termination to Messrs. Strebert, Kirchhoff
and Moeck dated September 28, 1994. Thereby,
the trust has come to an end and the shares in the
nominal value of DM 600,000, have been
reassigned to Messrs. Strebert, Kirchhoff and
Moeck as multiple owners.
B. Sellers are interested in selling 100 percent of
the Shares in the Company to the Buyer, while the
Buyer, based on the representations and
warranties made by the Sellers, is interested in
acquiring the Shares according to the terms and
conditions hereof;
NOW, THEREFORE, the parties agree as follows:
1.
Sale and Assignment of Shares
The Sellers hereby sell and the Buyer hereby buys
the Shares with immediate effect, including all
rights pertaining to the Shares, in particular all
rights to all profits of the Company during the
financial year 1994 and all retained earnings of
the Company.
Messrs. Strebert, Kirchhoff and Moeck hereby
assign to Buyer their shares in the nominal
amounts of DM 25,000, DM 25,000 and DM
550,000, Ohl BIH hereby assigns to Buyer its
shares in the nominal amounts of DM 399,500, and
of DM 500. Buyer hereby accepts such
assignments. The assignment is subject to the
condition precedent that the Buyer shall have
completely settled the purchase price as stipulated
in 2 below.
2.
Purchase Price
2.1 The purchase price for the sale of the Shares
is DM 8,500,000 (in words: Deutsche Marks eight
million five hundred thousand). The purchase
price shall be paid until October 18, 1994 as
follows:
a) a partial amount of DM 1,700,000 to each of
Messrs Strebert, Kirchhoff and Moeck, of which DM
850,000 each, i.e. an aggregate amount of DM
2,550,000 shall be paid by wire transfer to the
account of Sigle Loose Schmidt -Diemitz & Partner
at Deutsche Bank Stuttgart, account no. 8013500,
bank code 600 700 70 net of any bank charges
and the remaining partial arnount of DM 850,000
each shall be settled in lieu of payment (an
Erfulllungs statt) by transferring to Mr. Strebert
38,671, to Mr. Kirchhoff 38,672 and to Mr. Moeck
38, 671 shares of common stock of Buyer in the
nominal value of US $ 1 each. Messrs Strebert,
Kirchhoff and Moeck and Buyer agree that each
share of common stock in Buyer shall be valued at
US $ 14 and a conversion rate of DM 1.57 per US $
shall be applied;
b) a partial amount of DM 3,400,000 to Ohl BIH, of
which DM 1,700,000 shall be paid by wire transfer
to the account of Sigle Loose Schmidt-Diemitz &
Partner at Deutsche Bank Stuttgart, account no.
8013500, bank code 600 700 70 and the
remaining DM 1,700,000 shall be settled in lieu of
payment (an Erfullungs statt) by transferring to
Ohl BIH title to 77, 343 shares of common stock of
Buyer in the nominal value of US $ 1 each. Ohl BIH
and Buyer agree that each share of common stock
in Buyer shall be valued at US $ 14 and a
conversion rate of DM 1.57 per US $ shall be
applied
2.2 Title to the shares of common stock of Buyer
shall be transferred to Sellers by way of issuing to
each Seller a stock certificate for the appropriate
number of shares and delivery of such share
certificate to the respective Seller accompanied by
a legal opinion of Alston Bird reasonably
satisfactory to Sellers that. upon such delivery,
Sellers become the legal owners of the appropriate
number of shares in Buyers common stock.
2.3 If Buyer delays in making payment it shall
pay interest of 12 % from the due date of payment
without prejudice to any further claim to damages
for delay.
3.
Indemnities
3.1 If taxes or any other charges are claimed from
the Company for services to one or several Sellers,
which were performed by the Company before
conclusion of this Agreement, the relevant Seller,
who received the service for which a tax or other
public charge is demanded, shall indemnify the
Company against the claim to payment of the
relevant tax or public charge. This also applies to
charges due for services performed in favor of
persons or corporations affiliated with the
relevant Seller for the purposes of Section 15 et
seq German Stock Corporation Act (Verbundene
Unternehmen) or relatives of a Seller according to
the German General Tax Code (AO).
For other tax liabilities of the Company there is no
liability of the Sellers, except on the basis of 4.6.
3.2 With respect to the involvement of the Sellers
in tax or other official audits of public charges for
the period up to conclusion of this Agreement the
following shall apply:
a) Any matters regarding public charges shall be
handled by the Company in coordination with the
Sellers. The Company shall notify the Sellers in
due time of any such matter, in particular of a tax
audit relating to the period before December 31
1994. The Sellers are entitled to participate in any
such matter and to comment thereon. Any binding
declaration vis-a-vis public authorities relating to
the period before December 31, 1994 shall only be
filed in coordination with the Sellers.
b) The Buyer and the Company shall grant full
access to the Sellers and their representatives to
all books and records of the Company during
regular business hours, to the extent this is
necessary to fend off claims regarding public
charges asserted by public authorities for the
period until December 31, 1994.
c) Upon the Sellers instruction and at their cost
the Company may take up any remedy in
connection with the foregoing in coordination with
the Sellers.
3.3 Each Seller undertakes to indemnify and hold
harmless the Buyer and the Company from and
against any and all obligations or liabilities,
including contingent liabilities, the Company may
have as of the date hereof or that may arise from
acts, omissions, or circumstances which have
occurred prior to the date hereof, versus the
relevant Seller or a person or entity affiliated with
a Seller in the meaning of Section 15 et seq
German Stock Corporation Act or relatives of a
Seller according to the German General Tax Code
(AO) (hereinafter "Affiliates"), except for the
liabilities listed in Annex 3.3.
3.4 The Sellers undertake as joint and several
debtors to indemnify and hold harmless the Buyer
from and against any and all liabilities which
would arise for the Buyer in the event that it
should be held that the Shares have not been duly
paid up or if repayments of the paid-in share
capital or deemed repayments have occurred.
Moreover, each Seller undertakes to waive any
claims or rights it might have against the Company
in connection with the transfer of assets to the
Company, to the extent that such assets were
transferred by way of contribution to the original
or increased share capital of the Company, in
particular any claim for unjust enrichment.
4.
Representations and Warranties
In concluding this Agreement, the Buyer relies on
the correctness of the representations and
warranties made by the Sellers. Sellers represent
expressly and warrant to the Buyer as a
guaranteed quality ("Zugesicherte Eigenschalt")
that the following representations and warranties
are true, complete and correct:
4.1 The statements in recital A hereto about the
Company, the Shares and its assets are complete
and accurate in every respect.
4.2 The share capital of the Company has been
paid up in full. The Company's share capital has
not been repaid and the shareholders are under no
obligation to make any additional contribution or
under any other secondary obligation. The Sellers
have not adopted any resolution to distribute
dividends for the financial years 1993 and 1994.
4.3 The By-Laws of the company presently in
force are the version adopted by notarial
shareholders' resolution dated April 29, 1990 (Roll
of Deeds No 220/1990 of the notary Herbert
Bohmer in Erlensee), subject only to the
amendment by notarial shareholders' resolution of
June 26, l991, (Rolls of Deeds No 370/l991 of the
notary Herbert Bohmer in Erlensee). There are no
agreements, resolutions or promises concerning
the relationship between the Company and its
shareholders or among these shareholders or any
obligations to enter into such agreements,
resolutions or promises. The Company has no
supervisory, advisory or administrative board or
similar bodies and presently there is no obligation
to constitute such a body, except for the
Company's advisory board that had not been
officially constituted and that had Messrs Strebert,
Moeck and Ohl as its members.
4.4 There are no restrictions on the right to
dispose of the shares or any third party rights.
4.5 The annual accounts of the Company as of
December 31, 1993 have been prepared in
accordance with statutory regulations and conform
with generally accepted accounting principles
consistently applied and accurately reflect all
transactions material to the Company as at the
Balance Sheet Date. To the best knowledge of
Sellers, the final accounts as of December 31, 1993
fully and correctly reflect the financial and profit
and loss position of the Company and the assets
stated in the annual accounts (fixed and current
assets as of December 31, 1993) are actually
available. of value and the property of the
Company except for any reservation of title of
suppliers in the ordinary course of the Company's
business;
4.6 The Company's equity capital shown in the
annual accounts as of December 31, 1993 of
- share capital of DM 1,000,000.00
- profit carried forward DM 168,659.78
- annual surplus of total
equity capital DM 513,685.89
- total equity capital DM 1,682,345.67
existed on the balance sheet date and still existed
on July 31st, 1994. Any reduction in the aggregate
amount of assets or any increase in the aggregate
amount of liabilities that has existed on July 31,
1994 or has arisen from acts, omissions, or
circumstances which have occurred in the periods
until July 31, 1994 shall constitute a breach of this
equity guarantee, provided, the Sellers or the
Company's management could have known these
acts, omissions or circumstances had they applied
the diligence of a conscientious business man.
4.7 To the best knowledge of the Sellers' the
Company's interim closing balance sheet as of July
31, 1994, which the Buyer has received, shows the
economic trend of the Company since the last
balance sheet date (December 31, 1993) taking
into account any transactions which have taken
place in the meantime.
4.8 To the best knowledge of the the Sellers, at
the date of conclusion of this Agreement there are
no circumstances, in particular liabilities or risks,
tax liabilities, litigation, termination of important
employee agreements, leases, leasing, supply or
other long-time agreements, which are not
included in the annual accounts of December 31,
1993 and the interim closing balance sheet of July
31, 1994 but are capable of adversely affecting
the business of the Company more than it is
affected in the ordinary course of business of the
Company during the current business year.
4.9 To the best knowledge of the Sellers, all due
tax and other public charge liabilities have been
paid on conclusion of this Agreement and
declarations in connection with the obligation to
pay taxes or other public shares have been made.
4.10 To the best knowledge of the Sellers, there is
no contamination of the land used to date or
currently being used by the Company including
water pollution which could give rise to liability on
the part of the Company or its shareholders.
4.11 To the best knowledge of the Sellers, the
Company is not restricted by official restrictions of
any nature such as licence conditions in carrying
on its business or disposing of or using the
industrial property rights required for its business
or that the Company, in conducting its business,
has infringed third party industrial property
rights.
4.12 The company does not have any liabilities
arising from. and has not made any promises or
provided any plans for, pensions.
4.13 The Company has not borrowed or raised
any money or taken any financial facility for, nor
has it granted any guarantee, suretyship or any
other similar undertakings as security for the debt
of, third parties, including the Sellers or any
Affiliate;
4.14 All documents, papers and information
supplied to Buyer, Ernst & Young
Wirtschaftsprufungsgesellschaft or Boden
Oppenhoff Rasor Raue for the purposes of their
their pre-contractual due diligence exercise are
accurate in all respects and the Sellers are not
aware of any fact or matter which was not so
supplied which renders any of such information
misleading.
The Sellers do not give any other warranties.
5.
Warranty liability
5.1 Excluding any other legal rights of the Buyer
to assert other claims in the event that any of the
representations and warranties under Section 4 should
be incorrect, the Sellers shall on demand, pay to
the Company or the Buyer the amount necessary
to put the Company or the Buyer into the position
which would have existed if the representation
and warranty had been true and not misleading.
5.2 The Buyer cannot assert any warranty claims
which it would have for breach of warranty under
Section 4 above if the total amount of such claims does
not exceed DM 100,000.
5.3 The period of limitation for all claims of the
Buyer pursuant to this Agreement shall run until
July 31, 1996, except for 3.1, for which the
statutory period of limitation shall apply.
5.4 The Sellers shall be jointly and severally liable
for warranty claims.
6.
Buyers warranty
6.1 The Buyer warrants that, on conclusion of this
Agreement, he is not aware of any matters which
will, or can, result in the Buyer's shares, which are
transferred in accordance with 2. as the purchase
price, being impaired more than immaterially in
the 6 month period following conclusion of this
Agreement, except as disclosed in the Buyer's
quarterly report and 10-Q as of June 30, 1994 and
except for the disclosed information about WAG.
6.2 The provisions of 5. shall apply to clause 6.1
above.
7.
Continuing Obligations
7.1 Buyer shall grant Sellers and their
representatives also after the date hereof the right
to inspect during normal business hours all books
and business records of the Company relating to
the period until December 31 1994 to the extent
that such inspection is reasonably requested.
7.2 The parties undertake upon the request of
either party, at any time after today and without
further compensation, to execute all documents in
proper form and to take all measures which may
still be necessary in order to consummate and to
comply fully with the purpose of this Agreement.
7.3 The Sellers have provided guarantees to
certain banks for obligations of the company to
such banks, namely Ohl BIH a guarantee of DM
800,000, to Deutsche Bank AG, Koblenz, and
Messrs. Strebert, Moeck and Kirchhoff guarantees
of DM 400,000 each to Dresdner Bank AG,
Stuttgart. Buyer hereby undertakes to cause such
banks to issue to the Sellers releases for such
guarantees and to indemnify and hold harmless
the Sellers from any obligation arising under such
guarantees.
8.
Name Rights, Secrecy, Non-Competition Covenants
8.1 a) Buyer and its successors shall have the
right to use in the future, in accordance with the
then-prevailing provisions of the law, the present
firm name of the Company, with or without
addition, for themselves or for a subsidiary, a
branch or a division. Sellers will support Buyer
and its successors in any permissible manner and
will issue every necessary document in order to
enable these companies to use the firm name or
parts thereof.
b) The Sellers undertake in the future not to use
the name Gibat, nor any firm name confusingly
similar thereto, with or without addition, nor a
trademark or a design presently used by the
Company or confusingly similar with the ones used
by the Company, in any business connection
whatsoever.
8.2 The Sellers undertake for an unlimited period
of time to keep strictly secret all matters, and in
particular all business and trade secrets, of the
Company known to them and not to disclose such
matters and secrets, directly or indirectly, to any
third party nor to cause such disclosure by third
parties nor to abet or justify such disclosure nor to
use such matters or secrets for themselves and
shall cause their employees, officers and
representatives to adhere to the provisions of this
8.2.
8.3 Sellers undertake for a period of five years
from today without the prior consent of the Buyer
not to cause or influence any worker, employee,
agent or advisor of the Company (excluding
lawyers, certified public accountants and tax
advisors) to work in any way whatsoever for
them, for an Affiliate, or for a competitor, or to
terminate an existing relationship with the
Company.
8.4 Sellers undertake for a period of five years
not to manufacture, distribute or render in any
part of the world any product or services which
are of the same kind as, or competitive with,
products or services manufactured, distributed or
rendered by the Company in the past or at present
or planned to be manufactured, distributed or
rendered by the Company, nor to assist third
parties, directly or indirectly, in the manufacture,
distribution or rendering of such products or
services, nor to hold in any way whatsoever an
interest in the company which manufactures,
distributes or renders such products or services.
Excluded from this restriction is the acquisition
and holding of an investment of shares or
securities of a company listed on a major stock
exchange which is engaged in the manufacture,
distribution or rendering of such products or
services provided that Sellers in the aggregate do
not directly or indirectly acquire shares or
convertible debentures which constitute, or can be
converted into, more than five percent of the
share capital of the respective company. Also
excluded are the activities of Ohl BIH and affiliated
companies specified in Annex 8.4.
9.
Miscellaneous
9.1 The notary's fees and transfer taxes, if any,
connected with the execution and consummation
of this Agreement shall be borne by the Buyer.
Apart therefrom, each contractual party shall bear
its own costs and taxes and the costs of its own
advisors and auditors.
9.2 Changes and amendments to this Agreement
shall be valid only if made in writing unless a
notarial deed is legally required. This shall also
apply to amendments of this provision and to
Clause 9.3 below.
9.3 Declarations to be made hereunder shall be
valid only if made in writing, and shall be
delivered by mail, telephone or telefax, to be
confirmed by mail to the parties at the following
addresses:
If to the Sellers:
Mr. Wolfgang Strebert
Bismarckstrasse 32
73770 Denkendorf,
If to the Buyer:
Astec Industries, Inc.,
Attention Mr. Albert E. Guth,
4101 Jerome Avenue
Chattanooga, Tennessee 37407
U.S.A.
In each case, subject to written notice of change of
address.
9.4 Each party shall be personally responsible for
the fulfillment of all obligations, if any, vis-a-vis
brokers, financial advisors or finders assumed by
that party in respect of the transaction agreed
herein.
9.5 If a provision of this Agreement should be or
become invalid or not contain a necessary
regulation, the validity of the other provisions of
this Agreement shall not be affected thereby. The
invalid provision shall be replaced and the gap be
filled by a legally valid arrangement which
corresponds as closely as possible to the intentions
of the parties or what would have been the
intentions of the parties according to the aim and
purpose of this Agreement if they had recognized
the gap.
9.6 The Annexes to this Agreement form an
integral part of the Agreement. The headings of
this Agreement shall only serve the purpose of
easier orientation and are of no consequence to the
contents and interpretation of this Agreement.
9.7 This Agreement shall be governed by German law.
9.8 The place of jurisdiction for all disputes under
or in connection with this Agreement, including
disputes relating to its validity shall be the District
Court (Landgericht) in Frankfurt am Main.
The protocol and its Annexes were read to the
persons appearing, approved by them and signed
by them and the notary in their own handwriting
as follows:
/s/ Wolfgang Strebert
/s/ Thomas Hoene
/s/ Peter Ohl
/s/ Heinz Dangendorf
/s/ James Donald Brock
/s/ Peter Gamon, notary
EXHIBIT 4.2
Indenture of Trust
by and between
Grapevine Industrial Development Corporation
and
Bank One, Texas, NA, as Trustee
Dated as of April 1, 1994
$8,000,000 Industrial Development Revenue Bonds,
Series 1994 (Trencor Jetco, Inc. Project)
INDENTURE OF TRUST
This Indenture of Trust is made and entered into as of April 1, 1994,
by and between the Grapevine Industrial Development Corporation (the
Issuer), and Bank One, Texas, NA, a national banking association having its
corporate trust office in Fort Worth, Texas (the Trustee), as trustee.
Witnesseth:
Whereas, the Issuer is a constituted authority and
instrumentality acting on behalf of the City of Grapevine, Texas (the "Unit"),
organized and existing under the Development Corporation Act of 1979,
Article 5190.6, TEX. REV. CIV. STAT. ann, as amended (the "Act"), and is
authorized under the Act to issue and sell its bonds and to lend the proceeds
thereof to assist the Unit in its economic development and to carry out the
public purposes of the Act, including the financing of manufacturing and
industrial facilities located within the corporate limits of the Unit; and
Whereas, Trencor Jetco, Inc. (the "Company"), a Texas
corporation and a wholly owned subsidiary of Astec Industries, Inc., a
Tennessee corporation (the "Guarantor"), has requested financial assistance
from the Issuer to finance a project (the "Project"); and
Whereas, the Issuer is authorized by the Act to finance the
Project for the Company by issuing its bonds and loaning the proceeds
thereof to the Company, and, to that end, the Issuer has adopted a resolution
(the "Bond Resolution") duly authorizing and directing the issuance, sale, and
delivery of its industrial development revenue bonds, to be known
generally as Grapevine Industrial Development Corporation Industrial
Development Revenue Bonds, Series 1994 (Trencor Jetco, Inc. Project) (the
"Series 1994 Bonds"), to be issued as fully registered bonds (all bonds,
including the Series 1994 Bonds, at any time outstanding under terms of this
Indenture, hereinafter being called the "Bonds") and to secure payment of the
principal thereof and of the interest and premium, if any, thereon and the
performance and observance of the covenants and conditions herein
contained, the Issuer has authorized the execution and delivery of this
Indenture; and
Whereas, the Issuer will loan the proceeds of the Series
1994 Bonds to the Company by entering into a Loan Agreement dated as of
April 1, 1994 (the "Agreement"), between the Issuer and the Company; and
Whereas, pursuant to the Agreement, the Company has
agreed, among other things, to pay to or for the account of the Issuer an
amount equal to the principal of and redemption premium and interest on the
Series 1994 Bonds, as the same become due, all as set forth in the Agreement;
and
Whereas, all things necessary to make the Bonds, when
authenticated by the Trustee and issued as in this Indenture provided, the
valid, binding, and legal obligations of the Issuer according to the import
thereof, and to constitute this Indenture a valid assignment and pledge of the
security pledged hereunder, have been done and performed, and the
creation, execution, and delivery of this Indenture of Trust, and the creation,
execution, and issuance of the Bonds, subject to the terms hereof, have in all
respects been duly authorized;
Now, Therefore, This Indenture of Trust Witnesseth:
Granting Clause
To secure the timely payment of the principal of premium if
any, and interest on the Bonds according to their tenor and effect and to
secure the performance and observance by the Issuer of
all of the covenants set forth herein and in the Bonds, the Issuer
hereby assigns to the Trustee and grants to the Trustee a security interest in
all right, title, and interest of the Issuer in and to (a) the Agreement,
including the current and continuing right to claim, collect, receive, and give
receipts for all amounts payable by or receivable from the Company under the
Agreement, to bring actions and proceedings under the Agreement or for the
enforcement of the Agreement and to do all things that the Issuer is entitled
to under the Agreement, but excluding the Unassigned Rights, and (b) all
moneys and securities held from time to time by the Trustee under
this Indenture as provided in this Indenture (other than moneys and securities
held in the Purchase Fund or the Rebate Fund), all for the equal and
proportionate benefit of all owners of the Bonds without priority or
distinction as to lien or otherwise of any Bonds over any other Bonds.
To secure the obligation of the Company to reimburse to the
Bank amounts owed under the Reimbursement Agreement, the Issuer assigns
and grants to the Trustee for the benefit of the Bank a security interest in
all right, title, and interest of the Issuer in and to the moneys held in the
Bond Proceeds Fund until such moneys are applied for their intended
purpose as provided in Section 5.01 hereof, provided, however, the said
security interest shall be subordinate to the security interest in
and to such moneys granted to the Trustee in the preceding
paragraph for the benefit of the owners of the Bonds.
To Have And To Hold all and singular the Trust Estate (as
defined below) whether now owned or hereafter acquired, to the Trustee and
its respective successors in trust and assigns forever;
In Trust Nevertheless, upon the terms and trusts herein set
forth for the equal and proportionate benefit, security and protection of all
present and future Owners of the Bonds issued under and secured by this
Indenture without privilege, priority, or distinction as to the lien or
otherwise of any of the Bonds over any of the other Bonds;
Provided, However, that if the Issuer, its successors, or
assigns, shall pay, or cause to be paid, the principal of, premium, if any,
and interest on the Bonds due or to become due thereon, at the times and in
the manner mentioned in the Bonds and as provided in Section 4.01 hereof
according to the true intent and meaning thereof, or shall provide,
as permitted hereby, for the payment thereof in accordance with Article X
hereof, and shall keep, perform, and observe all the covenants and conditions
pursuant to the terms of this Indenture to be kept, performed, and observed
by it, and shall pay or cause to be paid to the Trustee all sums of
money due or to become due in accordance with the terms and provisions
hereof, then upon such final payments or deposits as provided in Article X
hereof including payment of all amounts due and payable to the Bank under
the Reimbursement Agreement and surrender of the Letter of Credit to the
Bank for cancellation, this Indenture and the rights hereby granted shall
cease, terminate, and be void and the Trustee shall thereupon cancel and
discharge this Indenture and execute and deliver to the Issuer and the
Company such instruments in writing as shall be requisite to
evidence the discharge hereof.
This Trust Indenture Further Witnesseth, and it is expressly
declared, that all Bonds issued and secured hereunder are to be issued,
authenticated, and delivered and all of the Trust Estate is to be dealt with\
and disposed of, under, upon, and subject to the terms, conditions,
stipulations, covenants, agreements, trusts, uses, and purposes
hereinafter expressed and the Issuer has agreed and covenanted, and does
hereby agree and covenant, with the Trustee and with the respective Owners,
from time to time, of the Bonds or any part thereof, as follows:
Article I
Definitions and Interpretation
Section 1.01. Definitions. Each of the following terms
shall have the meaning assigned to it in this Section 1.01 whenever it is used
in this Indenture, unless the context in which it is used
clearly requires otherwise:
"Adequate Interest Coverage" shall have the meaning set
forth in Section 2.02(f)(iii) hereof.
"Adjustable Rate" shall mean the interest rate per annum
from time to time borne by the
Bonds when in the Adjustable Rate Mode, as established in
accordance with Section 2.02(e) hereof.
"Adjustable Rate Conversion Date" shall mean each Interest
Payment Date on which the Bonds, upon having been converted to the
Adjustable Rate Mode from another Mode, shall first begin to bear interest at
an Adjustable Rate in accordance with the terms hereof, and each subsequent
Adjustable Rate Reset Date.
"Adjustable Rate Interest Payment Date" shall mean (i) with
respect to an Adjustable Rate Period which extends over a period covering all
or part of at least six calendar months, the first day of the sixth calendar
month following the Adjustable Rate Conversion Date, and the first day of
each successive sixth calendar month, if any, of such Adjustable Rate
Period; provided, however, the final Adjustable Rate Interest Payment Date
with respect to any such Adjustable Rate Period shall be the
first Business Day of the calendar month immediately following the
expiration of such Adjustable Rate Period, or the maturity date of the Bonds
(if such Adjustable Rate Period extends to the final maturity of the Bonds),
and (ii) with respect to an Adjustable Rate Period which extends over a
period covering all or part of less than six calendar months, the
first Business Day of the calendar month immediately following the
expiration of such Adjustable Rate Period or the maturity date of
the Bonds (if such Adjustable Rate Period extends to the final
maturity of the Bonds).
"Adjustable Rate Mode" shall mean the Mode in which the
Bonds bear interest at an Adjustable Rate.
"Adjustable Rate Period" shall mean any period selected in
accordance with Section 2.01(e) of not less than one month in duration,
commencing on an Adjustable Rate Conversion Date or an
Adjustable Rate Reset Date, as appropriate, and ending on the day
preceding a subsequent Conversion Date or Adjustable Rate Reset Date, as
appropriate.
"Adjustable Rate Reset Date" shall mean an Adjustable Rate
Interest Payment Date on which the Bonds begin to bear interest at a new
Adjustable Rate in accordance with the terms hereof.
"Agreement" shall mean the Loan Agreement, dated as of
April 1, 1994, between the Issuer and the Company, as amended and
supplemented.
"Alternate Credit Facility" shall mean an irrevocable letter
of credit or other credit facility described in Section 5.03(b) hereof
delivered pursuant to such Section in substitution for a Letter of Credit.
"Authorized Company Representative" shall mean the
President or Vice President of the Company or any other person designated by
the Company to act on behalf of the Company pursuant to a written
instrument filed with the Trustee, the Issuer, and the Bank containing the
specimen signature of such person. Such instrument may designate an
alternate or alternates.
"Authorized Denomination" shall mean $100,000 and any
integral multiple thereof.
"Available Moneys" shall mean
(1) During any period the Letter of Credit is in effect:
(a) proceeds from the remarketing of any Bonds, tendered for
purchase pursuant to this Indenture, to any person other than the Issuer, the
Company, the Guarantor, or any "insider" (as defined in the Bankruptcy
Code) of the Issuer, the Company, or the Guarantor;
(b) moneys derived from any draw on the Letter of Credit;
(c) any other moneys or securities, if there is delivered
to the Trustee an opinion of an attorney-at-law, duly admitted to practice
before the highest court of the jurisdiction in which such attorney maintains
an office, who is not a full-time employee of the Company, the Bank, the
Issuer, or the Remarketing Agent, having expertise in bankruptcy matters
(who, for purposes of such opinion, may assume that no Owner is an
"insider," as defined in the Bankruptcy Code) to the effect that the use of
such moneys or securities to pay the principal or purchase price of, premium,
if any, or interest on the Bonds would not be avoidable as preferential
payments under Section 547 of the Bankruptcy Code recoverable under Section 550
of the Bankruptcy Code should the Company become a debtor in a proceeding
commenced thereunder, which opinion shall also be addressed
to and acceptable to any Rating Agency then rating the Bonds; and
(d) earnings derived from the investment of any of the
foregoing; and
(2) During any period the Letter of Credit is not in effect, any
moneys held by the Trustee in any Fund or Account under this Indenture and
available, pursuant to the provisions hereof, to be used to pay principal of,
premium, if any, or interest on, or the purchase price of, the Bonds.
"Bank" shall mean the issuer of the Letter of Credit then in
effect. All references to "Bank" shall be of no effect at any time that no
Letter of Credit is issued and secures the Bonds, except with respect to
rights of any Bank established hereunder which do not, by their terms, expire
upon the expiration of the Letter of Credit issued by such Bank. "Bankruptcy
Code" shall mean the United States Bankruptcy Reform Act of 1978, as amended
from time to time, or any substitute or replacement legislation.
"Beneficial Owner" means the person in whose name a
Bond is recorded as beneficial Owner of such Bond by the Securities
Depository or a Participant or an Indirect Participant on the records
of such Securities Depository, Participant or Indirect Participant, as
the case may be, or such Person's subrogee.
"Bond Counsel" shall mean, with respect to the original
issuance of the Bonds, Hutchison Boyle Brooks & Fisher, and thereafter, any
firm of attorneys of nationally recognized expertise with respect to the tax-
exempt obligations of political subdivisions, selected by the Company and
acceptable to the Remarketing Agent, the Trustee, and the Issuer.
"Bond Fund" shall mean the Fund by that name established by
Section 5.02 of this Indenture.
"Bond Owner," or "Owner of the Bonds," when used
with respect to a Bond, shall mean the person or entity in whose name such
Bond shall be registered.
"Bond Proceeds Fund" shall mean the Fund by that name
established by Section 5.01 of this Indenture.
"Bonds" shall mean the $8,000,000 Industrial Development Revenue
Bonds, Series 1994 (Trencor Jetco, Inc. Project) issued pursuant to this
Indenture.
"Bond Year" means each one-year period that ends on the
day selected by the Issuer. The first and last Bond Years may be short
periods. If no day is selected by the Issuer before the date the Bonds are
retired or the date that is five years after the Closing Date, Bond Years end
on each anniversary of the Closing Date and the date the Bonds are retired.
"Book-Entry System" means a book-entry system established and
operated for the recordation of Beneficial Owners of the Bonds pursuant to
Section 2.12 hereof.
"Business Day" or "business day" shall mean any day
which is not (i) a Saturday or a Sunday, (ii) a day on which banking
institutions in the cities of New York, New York, or Fort Worth, Texas
(or, if different, in the cities in which the corporate trust office of
the Trustee and the office of the Bank at which drawings under the Letter of
Credit are to be honored are located), are authorized or required by law or
executive order to close, or (iii) a day on which the New York Stock
Exchange is closed.
"Closing Date" shall mean the date of initial issuance and
delivery of the Bonds to the purchasers thereof.
"Code" shall mean the Internal Revenue Code of 1986, as
amended. Each citation to a section of the Code shall include the Regulations
applicable to such Section.
"Company" shall mean Trencor Jetco, Inc., a Texas corporation and
a wholly owned subsidiary of the Guarantor, its successors and assigns.
"Company Bonds" shall mean Bonds purchased with moneys
described in Section 3.09(c) hereof.
"Completion Date" shall mean the date the acquisition, construction,
and equipping of the Project is certified to be complete in accordance with
the provisions of Section 3.3 of the Agreement.
"Construction Period" shall mean the period between the
beginning of construction or the date on which Bonds are first delivered to
the purchasers thereof, whichever is earlier, and the Completion Date.
"Conversion Date" shall mean an Adjustable Rate
Conversion Date, a Weekly Rate Conversion Date, a Daily Rate Conversion
Date or a CP Rate Conversion Date, as appropriate.
"Cost of the Project" shall mean the sum of the items authorized to
be paid from the Project Account pursuant to the provisions of Section 4.2 of
the Agreement.
"CP Rate" shall mean the interest rate per annum on the Bonds
established in accordance with Section 2.02(d) hereof.
"CP Rate Conversion Date" shall mean each Interest
Payment Date on which the Bonds, having been converted to the CP Rate
Mode from another Mode, first begin to bear interest at a CP Rate in
accordance with the terms hereof.
"CP Rate Interest Payment Date" shall mean the Business
Day which immediately succeeds the last date of any CP Rate Period.
"CP Rate Mode" shall mean the interest rate Mode in which Bonds
bear interest at the CP Rate.
"CP Rate Period" shall mean, while the Bonds are in the CP Rate
Mode, the period (a) which begins on a CP Rate Conversion Date or a CP
Rate Reset Date, as appropriate, and (b) has a duration which shall have been
set by the Remarketing Agent as provided in Section 2.02(d), but shall never
be shorter than 30 days nor longer than 270 days, and (c) which ends on a
day which immediately precedes a Business Day and which falls on or prior
to the maturity date of the Bonds.
"CP Rate Reset Date" shall mean each CP Rate Interest
Payment Date on which commences a new CP Rate Period, whereon a new
CP Rate which shall have been set pursuant to Section 2.02(d) shall first
become effective.
"Daily Interest Period" shall mean, while the Bonds are in the Daily
Rate Mode, the period from and including each day which is a Business Day
to but excluding the next succeeding day which is a Business Day.
"Daily Rate" shall mean the interest rate per annum on
the Bonds established in accordance with Section 2.02(c) hereof.
"Daily Rate Conversion Date" shall mean each date on
which the Bonds, having been converted to the Daily Rate Mode from another
Mode, first begin to bear interest at a Daily Rate in accordance with the
terms hereof.
"Daily Rate Interest Payment Date" shall mean the first Business
Day of each month during which the Bonds shall be in the Daily Rate Mode,
commencing with the first Business Day of the month next succeeding each
Daily Rate Conversion Date or, if applicable, the Closing Date.
"Daily Rate Mode" shall mean the Mode in which the
Bonds bear interest at a Daily Rate.
"Daily Rate Period" shall mean the period from the Daily
Rate Conversion Date to the earlier to occur of the following Conversion Date
or the date on which principal of the Bonds is paid in full.
"Determination of Taxability" shall mean the receipt by
the Trustee of evidence of a judgment or order of a court of competent
jurisdiction, or a final ruling, technical advice, or decision of the internal
Revenue Service to the effect that the interest on the Bonds (other than
interest on any Bond for any period during which such Bond is held by a
"substantial user" of the Project or a "related person," as such terms are
used in section 147(a) of the Code) is includable for federal income tax
purposes in the gross incomes of recipients thereof; provided, however, that in
no event shall a Determination of Taxability be based upon the inclusion of
interest in any minimum tax or indirect tax. For purposes of this definition,
a ruling or decision of the Internal Revenue Service shall be considered final
if no appeal or action for a judicial review has been filed and the time for
filing of such appeal or action has expired.
"Event of Default," used with respect to this Indenture,
shall mean any event specified in Section 6.01 of this Indenture.
"Government obligations" shall mean direct obligations of, or
obligations the timely payment of the principal of, and interest on, which are
fully and unconditionally guaranteed by the United States of America, which,
at the time of investment, are not subject to prepayment or redemption
prior to maturity and are legal investments under the laws of the State for
the moneys proposed to be invested therein.
"Guarantor" shall means Astec Industries, Inc., a Tennessee
corporation, its successors and assigns.
"Guaranty" shall mean the Guaranty Agreement dated as of
April 1, 1994, between the Guarantor and the Trustee, as the same is
supplemented and amended.
"Indenture" shall mean this Indenture of Trust, as
amended and supplemented.
"Indirect Participant" means a broker-dealer, bank, or
other financial institution for which the Securities Depository holds Bonds as
a securities depository through a Participant.
"Initial Letter of Credit" shall mean the Letter of Credit
delivered on the Closing Date by the Bank for the purpose of securing the
Bonds, as extended or amended from time to time.
"Interest Payment Date" shall mean an Adjustable Rate
Interest Payment Date, a Weekly Rate Interest Payment Date, a Daily Rate
Interest Payment Date, a CP Rate Interest Payment Date, each date upon
which the Bonds shall be subject to mandatory tender for purchase pursuant
to Section 2.04 hereof, and any date upon which the outstanding principal
amount of the Bonds becomes due.
"Issuer" shall mean Grapevine Industrial Development
Corporation, and its successors and assigns.
"Letter of Credit" shall mean the Initial Letter of Credit
and, if an Alternate Credit Facility is issued, each Alternate Credit Facility,
as extended or amended from time to time. All references to the "Letter of
Credit" shall be of no effect at any time that no Letter of Credit secures the
Bonds, except with respect to rights of any Bank created hereunder which
do not, by their terms, expire upon the termination of the Letter of Credit
issued by such Bank.
"Maintenance of Rating" shall have the meaning set forth in Section
5.03(b) hereof. "Maximum Rate" shall mean the rate per annum equal to
the lesser of (a) 15% per annum, or (b) if a Letter of Credit is then in
effect, the maximum interest rate stated in such Letter of Credit for purposes
of calculating the interest portion of the stated amount of such Letter of
Credit.
"Mode" shall mean any of the interest rate modes which may exist
from time to time with respect to the Bonds, including the Adjustable Rate
Mode, the Weekly Rate Mode, the Daily Rate Mode, or the CP Rate Mode, as
appropriate.
"Offering Agreement" shall mean the Offering Agreement, dated as
of April 1, 1994, among the Issuer, the Company, the Guarantor, and the
Offering Agent, including all amendments thereof and supplements thereto.
"Offering Agent" shall mean The First National Bank of
Chicago, Chicago, Illinois.
"Outstanding" or "Bonds outstanding" or "Bonds
then outstanding," at the time in question, shall mean all Bonds which have
been executed and delivered by the Issuer and authenticated by the Trustee or
the Tender Agent under this Indenture, except:
(i) Bonds theretofore canceled by the Trustee or surrendered to
the Trustee for cancellation;
(ii) Bonds paid or deemed to be paid pursuant to Article X
hereof;
(iii) Bonds in lieu of or in exchange for which other Bonds shall
have been executed and delivered by the Issuer and authenticated by the
Trustee or the Tender Agent pursuant to Sections 2.07, 2.08, 2.10, or 3.06
hereof; and
(iv) Undelivered Bonds. "Participant" shall mean a broker-
dealer, bank, or other financial institution for which the Securities
Depository holds Bonds as a securities depository.
"Pledged Bonds" shall mean Bonds purchased with moneys provided
to the Tender Agent pursuant to Section 3.09(b) hereof.
"Principal Office" shall have the respective meaning as stated in the
definitions of the Remarketing Agent and Tender Agent set forth herein.
"Project" shall mean the project as described in Exhibit A to the
Agreement.
"Purchase Fund" shall mean the fund by that name established
pursuant to Section 3.07(b) of this Indenture.
"Qualified Costs of Construction" shall mean that portion of the Cost
of the Project which constitutes land costs or costs of property of a
character
subject to the allowance for depreciation for federal income tax purposes and
which were incurred and paid, or are to be incurred and paid, after January
17, 1994.
"Qualified Investments" shall mean, subject to any restrictions
imposed by State law, (i) Government Obligations, (ii) obligations of the
Federal National Mortgage Association, the Government National Mortgage
Association or the Federal Home Loan Mortgage Corporation, (iii)
commercial paper or finance company paper rated not less than "P-l" by
Moody's Investors Service or "A-1+" by Standard & Poor's Corporation, (iv)
certificates of deposit or other time or demand deposits of banks (including,
without limitation, the Trustee and the Bank) that are fully insured by the
Federal Deposit Insurance Corporation or fully secured by obligations
described in (i) or (ii) above, (v) repurchase agreements secured by
obligations described in (i) or (ii) above or bonds or obligations which are
authorized by law as security for public deposits, provided that no
proceeding
under any applicable insolvency or reorganization law has been commenced
by or against the issuer of such bonds or obligations, and provided, further,
that such bonds or obligations and debt of the issuer of the repurchase
agreement bear one of the three highest full credit ratings assigned by
Moody's Investors Service and Standard & Poor's Corporation, (vi) any
investment fund or other investment pooling arrangement which purchases
and holds exclusively Government Obligations or repurchase agreements
meeting the requirements of (v) above, (vii) Tax-Exempt Obligations (as
defined in the Tax Agreement) rated in one of the two highest full rating
categories by either of the Rating Agencies, and (viii) any other investment
approved in writing by the Bank.
"Rating Agencies" shall mean S&P and/or Moody's Investors
Service, according to which of such rating agencies then rates the Bonds; and
provided that if neither of such rating agencies then rates the Bonds, the
term "Rating Agencies" shall refer to any national rating agency (if any)
which provides such rating. If only one Rating Agency then rates the Bonds,
Rating Agencies" shall at that time mean only such Rating Agency.
"Rebate Fund" shall mean the fund by that name created
pursuant to Section 5.10 of this Indenture.
"Record Date" shall mean (a) with respect to any Weekly
Rate Interest Payment Date, Daily Rate Interest Payment Date, CP Rate
Interest Payment Date, or Adjustable Rate Interest Payment Date for an
Adjustable Rate Period of less than six months in duration, the close of
business on the Business Day next preceding such Interest Payment Date, and
(b) with respect to any Adjustable Rate Interest Payment Date for an
adjustable Rate Period of greater than or equal to six months in duration, the
close of business on the fifteenth day of the calendar month next preceding
such Interest Payment Date.
"Regulations" shall mean the temporary and permanent Income Tax
Regulations promulgated or proposed by the Department of the Treasury
pursuant to the Code, as applicable to the Bonds.
"Reimbursement Agreement" shall mean with respect to each
Letter of Credit, the agreement pursuant to which such Letter of Credit is
issued. All references to "Reimbursement Agreement" shall be of no effect at
any time that no Letter of Credit is issued and secures the Bonds, except with
respect to rights of any Bank which do not, by their terms, expire upon the
expiration of the Letter of Credit issued by such Bank.
"Remarketing Agent" shall mean the Remarketing Agent appointed
in accordance with Section 7.10 hereof, and shall mean initially The First
National Bank of Chicago, Chicago, Illinois. "Principal Office" of the
Remarketing Agent shall mean the office thereof designated in writing to
the Issuer, the Trustee, the Bank, and the Company, and shall mean initially
the office of the Remarketing Agent located at One First National Plaza, Suite
0463, Chicago, Illinois 60670-0463, Attention: Municipal Bond
department/Short Term Trading.
"Remarketing Agreement" shall mean the Remarketing Agreement
dated as of April 1, 1994 among the Company, the Guarantor, and the
Remarketing Agent.
"S&P" shall mean Standard & Poor's Ratings Group, a division of
McGraw-Hill, Inc., its successors and assigns.
"Securities Depository" means The Depository Trust Company and
any substitute for or successor to such securities depository that shall
maintain a Book Entry System with respect to the Bonds.
"Securities Depository Nominee" means the Securities
Depository or the nominee of such Securities Depository in whose name there
shall be registered on the registration books of the Issuer the Bonds to be
delivered to such Securities Depository during the continuation with such
Securities Depository of participation in its Book Entry System.
"State" shall mean the State of Texas.
"Tax Agreement" shall mean the Tax Exemption Certificate and
Agreement dated the Closing Date among the Company, the Issuer, and the
Trustee, as amended and supplemented.
"Tender Agent" shall mean the Tender Agent appointed
in accordance with Section 7.11 hereof if the Bonds are not then in a Book-
Entry System. "Principal Office" of the Tender Agent shall mean the office
thereof designated in writing to the Issuer, the Trustee, the Bank, the
Remarketing Agent and the Company.
"Trustee" shall mean Bank One, Texas, NA, or any successor trustee
or co-trustee serving as such under this Indenture.
"Trust Estate" shall mean the property conveyed to the
Trustee pursuant to the Granting Clause of this Indenture.
"Unassigned Rights" shall mean the rights of the Issuer
under Sections 5.2, 7.2, and 9.3 of the Agreement, the Issuer"s rights to
consent to amendments to the Agreement and its rights to receive
notices thereunder.
"Undelivered Bonds" shall mean, during any period the
Bonds are not in the Book-Entry System, Bonds for which notice of optional
tender shall have been given pursuant to Section 2.03 and Bonds subject to
mandatory tender pursuant to Section 2.04, for which Available Moneys
sufficient to pay the purchase price have been deposited with the Tender
Agent on or before the purchase date of such Bonds, but which Bonds were
not delivered to the Tender Agent on or before such purchase date.
"Weekly Interest Period" shall mean, while the Bonds are
in the Weekly Rate Mode, each period from and including Wednesday of each
week (and, if the first day of any Weekly Rate Period is not a Wednesday, the
Weekly Rate Conversion Date on which such Weekly Rate Period
commences) through and including the following Tuesday, whether
or not such days are Business Days. In addition, and notwithstanding the
foregoing, the initial Weekly Interest Period shall commence on the Closing
Date and shall end on the following Tuesday.
"Weekly Rate" shall mean the interest rate per annum on
the Bonds established in accordance with Section 2.02(b) hereof.
"Weekly Rate Conversion Date" shall mean each date on
which the Bonds, having been converted to the Weekly Rate Mode from
another Mode, first begin to bear interest at a Weekly Rate in accordance with
the terms hereof.
"Weekly Rate Interest Payment Date" shall mean the first Business
Day of each month during which the Bonds are in the Weekly Rate Mode,
commencing with the first Business Day of the month following the Weekly
Rate Conversion Date or, if applicable, the Closing Date.
"Weekly Rate Mode" shall mean the Mode in which the
Bonds bear interest at a Weekly Rate.
"Weekly Rate Period" shall mean the period from the
Closing Date or any Weekly Rate Conversion Date to the earlier of the next
following Conversion Date or the maturity date of the Bonds.
Section 1.02 Article and Section Headings. The headings or titles
of the several Articles and Sections of this Indenture, and the Table of
Contents appended hereto, are solely for convenience of reference and shall
not affect the meaning or construction of the provisions hereof.
Section 1.03. Interpretation. The singular form of any word
used herein shall include plural, and vice versa, if applicable. The use of a
word of any gender shall include all genders, if applicable. Any reference to
a particular Article or Section shall be to such Article or Section of this
Indenture unless the context shall otherwise require. Any reference to any
time of day on any date shall be to prevailing time in New York City, New
York, on such date unless otherwise specified herein.
Article II
Authorization and Issuance of the Bonds
Section 2.01. Authorization of Bonds; No Additional Bonds. (a)
The Bonds are hereby authorized to be issued in a single series, which shall
be designated as Grapevine Industrial Development Corporation Industrial
Development Revenue Bonds, Series 1994 (Trencor Jetco, Inc. Project) (the
"Bonds"). The Bonds shall be issued in the aggregate principal amount of
$8,000,000.
(b) The Bonds shall be issued for the purpose of providing
funds to pay costs of the Project and certain costs of issuance of the Bonds.
No Bonds may be issued pursuant to this Indenture in addition to those
authorized by this Section 2.01, except Bonds issued upon transfer or
exchange pursuant to Section 2.07 hereof, temporary Bonds issued
pursuant to Section 2.10 hereof, replacement Bonds issued pursuant to
Section 2.08 hereof, Bonds issued pursuant to Section 3.06 hereof, and Bonds
delivered pursuant to Section 3.10 hereof.
Section 2.02. Issuance of Bonds; Terms of Bonds. (a) General
Provisions.
The Bonds shall: (i) be dated as provided in Section 2.02(i) below,
(ii) bear interest initially in the Weekly Rate Mode
and, thereafter, as set forth in paragraphs (b) through (f) of this Section,
until paid, at the rates therein provided (computed, while the Bonds are in
the Weekly Rate Mode, the CP Rate Mode or the Daily Rate Mode, on the basis
of a 365- or 366-day year, for the actual number of days elapsed and,
while the Bonds are in the Adjustable Rate Mode, on the basis
of a 360-day year, composed of twelve 30-day months), payable on each
Interest Payment Date,
(iii) all be in the same Mode at the same time, and
(iv) mature on April 1, 2019.
(b) Weekly Rate Provisions.
(i) The Bonds shall bear interest at
a Weekly Rate from the Closing Date (if applicable) and from each
Weekly Rate Conversion Date to the earlier of their redemption, the following
Conversion Date or their maturity date. The Weekly Rate for each Weekly
Interest Period shall be the lowest rate of interest which will, in the sole
judgment of the Remarketing Agent, having due regard for prevailing
financial market conditions, permit the Bonds to be remarketed at par on the
first day of such Weekly Interest Period. Notwithstanding the foregoing, the
Weekly Rate so established shall be not more than the Maximum Rate. Each
determination of a Weekly Rate by the Remarketing Agent shall be conclusive
and binding.
Notwithstanding the foregoing, if at any time the Remarketing
Agent shall fail to determine a Weekly Rate as set forth above, then, until the
Remarketing Agent shall next determine the Weekly Rate in such fashion, the
Weekly Rate shall be the rate from time to time established as the J.J.
Kenney index rate for high grade tax-exempt obligations having maturities
of 30 days. If such index rate is not available, the Weekly Rate shall be the
rate from time to time established by the Public Securities Association
Municipal Swap Index, and if such index is not available, the Weekly Rate
shall be the rate from time to time established by such other comparable index
as may be selected by the Company upon notice to the Trustee. In no event
however may the interest rate on the Bonds exceed the Maximum Rate.
(ii) On Tuesday (unless Tuesday is not a Business Day,
then on the next preceding Monday; unless Monday and Tuesday are not
Business Days, then on the next subsequent Wednesday, whether or not a
Business Day) of each calendar week during a Weekly Rate Period,
with respect to each Weekly Interest Period, the Remarketing Agent shall
determine and furnish to the Trustee, the Company, the Bank, and the Tender
Agent, if any, the Weekly Rate for the ensuing Weekly Interest Period. On
the Business Day preceding each Weekly Rate Interest Payment Date,
the Trustee shall furnish to the Company, the Bank and, if the Bonds are not
in a Book-Entry System, to the Tender Agent, the Weekly Rates applicable to
the Bonds from the time of the prior notice of such rates. Should any Owner
or Beneficial Owner request such in writing, the Remarketing Agent shall
also furnish (by first class mail, postage prepaid) the Weekly Rate to such
requesting Owner or Beneficial Owner.
(c) Daily Rate Provisions. (i) The Bonds shall bear interest at a Daily
Rate from the Closing Date (if applicable) and from each Daily Rate Conversion
Date to the earlier of their redemption, the following Conversion Date or their
maturity date. The Daily Rate for each Daily Interest Period shall be the
interest rate determined by the Remarketing Agent on the first day of such
Daily Interest Period (by not later than 11:00 a.m.), which
shall be the lowest rate of interest which will, in the sole judgment of the
Remarketing Agent having due regard for prevailing financial market
conditions, permit the Bonds to be remarketed at par on the said first day of
such Daily Interest Period. Notwithstanding the foregoing, the Daily Rate so
established shall be not more than the Maximum Rate. In the event no Daily
Rate is determined by the Remarketing Agent for a Daily Interest Period, then
the Bonds shall automatically bear interest at the last Daily Rate previously
determined pursuant to this Indenture. Each determination of a Daily Rate by
the Remarketing Agent shall be conclusive and binding.
(ii) On the Business Day preceding each Interest
Payment Date during each Daily Rate Period, the Remarketing Agent will
furnish to the Trustee, and the Trustee will furnish to the Bank,
the Company, and the Tender Agent, if any, the Daily Rates applicable to the
Bonds during such Daily Rate Period. Should any Owner or Beneficial
Owner request in writing the Daily Rate applicable to the Bonds for any
particular day, the Remarketing Agent will furnish such Daily Rate
to such requesting Owner or Beneficial Owner.
(d) CP Rate Provisions. (i) The Bonds shall bear interest at a CP Rate from
each CP Rate Conversion Date or CP Rate Reset Date, as appropriate, to the
earlier of their redemption, the following Conversion Date or the following
CP Rate Reset Date. In the case of each CP Rate Period, on the first day
thereof, the Remarketing Agent shall determine (i) the duration of the CP
Rate Period and (ii) the CP Rate which shall apply during such CP
Rate Period. The duration of the CP Rate Period so determined shall be that
which, in the sole judgment of the Remarketing Agent will provide the lowest
overall interest cost with respect to the Bonds, with due regard to prevailing
financial market conditions, foreseeable changes in such conditions, the
anticipated duration of the period the Bonds may remain in the CP Rate
Mode, and such other factors which the Remarketing Agent, in its sole
judgment, shall deem relevant and economically advantageous to
consider. Upon determination of the duration of the CP Rate Period, the
Remarketing Agent shall determine the CP Rate which shall be in effect
during such CP Rate Period, which shall be the lowest rate of interest which,
in the sole judgment of the Remarketing Agent, having due regard to
prevailing financial market conditions, will permit the Bonds to be
sold at par on the first day of such CP Rate Period. Notwithstanding the
foregoing, the CP Rate so determined shall not be more than the Maximum
Rate. Unless and until the Company elects to effect a conversion of the Bonds
from the CP Rate Mode to another Mode, the Remarketing Agent shall
continually redetermine the duration of, and the CP Rate to be effective
during, each new CP Rate Period, which will commence, without further
action on the part of the Company, on each CP Rate Reset Date. If on any CP
Rate Reset Date, the Remarketing Agent shall fail to determine either
the duration of, or the CP Rate to be effective during, the CP Rate Period
which commences on such date, then, without further action on the part of
any person, the Bonds shall automatically convert to the Weekly Rate Mode
upon such date, and the Bonds shall thereupon bear interest of the
Weekly Rate. Upon such event the Trustee shall promptly notify the Owners,
the Company, the Tender Agent, if any, and the Bank of such automatic
conversion. Each determination by the Remarketing Agent pursuant to this
paragraph shall be conclusive and binding.
(ii) On the first day of each CP Rate Period, the Remarketing Agent shall
furnish to the Trustee, the Bank, the Company, and, if the Bonds are not in a
Book-Entry System, the Tender Agent, notice of the duration of such CP Rate
Period and the CP Rate to be effective during such
CP Rate Period. Should any Owner or Beneficial Owner request
notice of such items in writing, the Remarketing Agent shall provide such
notice (by first class mail, postage prepaid) to such requesting Owner or
Beneficial Owner.
(e) Adjustable Rate Provisions. The Bonds shall bear
interest at an Adjustable Rate from each Adjustable Rate Conversion Date or
each Adjustable Rate Reset Date, as appropriate, to the earlier of their
redemption, the following Conversion Date, the following Adjustable Rate
Reset Date, or the following date on which the Bonds shall be subject to
mandatory tender for purchase pursuant to Section 2.04 hereof. Upon a
conversion of the Bonds to the Adjustable Rate Mode, the duration of the
initial Adjustable Rate Period shall be that period specified in the Company's
conversion notice delivered pursuant to Section 2.02(f)(i) for the
purpose of effecting such conversion. An Adjustable Rate Period shall be of
at least one month's duration and shall end on the day preceding the first
Business Day of a calendar month or, if such Adjustable Rate Period
extends to the final maturity of the Bonds, such final maturity date.
The Bonds thereupon shall remain in the Adjustable Rate Mode for as long as
the Company shall continue to deliver timely notices pursuant to Section
2.02(f)(i) specifying the duration of the next subsequent Adjustable Rate
Period which is to commence on the expiration of any current Adjustable Rate
Period. The Remarketing Agent, on or prior to the commencement of each
Adjustable Rate Period, shalldetermine the Adjustable Rate to be borne by the
Bonds during such Adjustable Rate Period, which
shall be the lowest rate which, in its sole judgment having due
regard for prevailing financial market conditions, will permit the Bonds to be
sold at par on the first day of such Adjustable Rate Period.
Notwithstanding the foregoing, the Adjustable Rate shall not be
more than the Maximum Rate. If, during any period the Bonds shall be in
the Adjustable Rate Mode, either (i) the Company shall not
deliver a timely conversion notice specifying the duration of the
next subsequent Adjustable Rate Period, or (ii) on or prior to any Adjustable
Rate Reset Date the Remarketing Agent shall fail to determine the
Adjustable Rate to be borne by the Bonds during such Adjustable Rate Period,
then, any other provision hereof notwithstanding, the Bonds, without
further action on the part of any other person, shall automatically convert to
the Weekly Rate Mode on the date which otherwise would have been the
Adjustable Rate Reset Date and, the Bonds shall thereupon bear interest at
the Weekly Rate determined pursuant to Section 2.02(b)(i). Upon
such event, the Trustee shall promptly notify the Owners, the Company, the
Tender Agent, if any, and the Bank of such automatic
conversion. Each determination of an Adjustable Rate by the
Remarketing Agent shall be conclusive and binding.
(f) Conversion Options. (i) In General. The interest
rate Mode of the Bonds shall be converted from one Mode to another, and an
Adjustable Rate Period of one duration shall be converted to an Adjustable
Rate Period of the same or another duration, if the Company shall notify
the Trustee, the Tender Agent, the Bank, and the Remarketing
Agent of its election to effect such a conversion and each other condition to
any such conversion set forth herein shall have been satisfied. The
Company"s conversion notice shall specify the date on which the Conversion
Date will occur (which date shall be not sooner than 25 days after the date
such notice is given) and if the conversion is to an Adjustable Rate Period,
shall specify the Interest Payment Date which shall be the day following the
last day of such Adjustable Rate Period. Notwithstanding the foregoing, no
conversion from a Short Term Mode to a Long Term Mode or from
a Long Term Mode to a Short Term Mode (as such terms are defined in
Section 5.03(d) below), and no conversion effected in connection with either a
change in the Bank issuing the Letter of Credit supporting payment of the
Bonds, a change in the security for the Bonds, or an amendment to
this Indenture or the Agreement, shall be effective unless the Company has
delivered with such notice an opinion of Bond Counsel
(which opinion must be confirmed on the Conversion Date) stating
that such conversion will not adversely affect the excludability from gross
income of interest on the Bonds for federal income tax purposes. The
Conversion Date shall be the date specified in the Company notice; provided
that no conversion from the Adjustable Rate Mode or the CP Rate Mode
shall be effective prior to the Business Day following the last day of the
Adjustable Rate Period or CP Rate Period, as the case may be, which is then
in effect. In the event any condition precedent to conversion (including, but
not limited to, the establishment by the Remarketing Agent of the
initial interest rate to be in effect after the Conversion Date or, if required,
the
delivery of the Bond Counsel opinion described above) is not satisfied on or
prior to the Conversion Date, the Bonds shall nonetheless be subject to
mandatory tender on the Conversion Date and, upon such date, the
Bonds, without any further action on the part of any person, shall
automatically convert to the Weekly Mode, and the Bonds shall
thereupon bear interest at the Weekly Rate determined pursuant to
Section 2.02(b)(i).
(ii) Conversion Notice. At least 20 days prior to each
Conversion Date, the Trustee shall give to each Owner notice by certified
mail stating: (A) the Conversion Date, (B) that on the
Conversion Date, the Bonds are subject to mandatory tender and
purchase, (C) that, subject to clause (E) below, all Owners who fail to tender
their Bonds for purchase on the mandatory tender date will
nonetheless be deemed to have tendered their Bonds for purchase
on such date, (D) that, subject to clause (E) below, any Bonds not delivered
to the Tender Agent on or prior to the mandatory tender date, for which
there has been irrevocably deposited in trust with the Trustee or the Tender
Agent on or prior to the mandatory tender date Available Moneys
sufficient to pay the purchase price of such Undelivered Bonds on the
mandatory tender date, shall be deemed to have been so purchased at the
purchase price, and such Bonds shall no longer be considered to be
outstanding for purposes of this Indenture and shall no longer be entitled to
the benefits of this Indenture, except for the payment of the purchase price
thereof (and no interest shall accrue thereon subsequent to the mandatory
tender date), and (E) that notwithstanding the foregoing, while the Bonds are
held in the Book-Entry System, Bonds need not be physically tendered
on the mandatory tender date, and transfers of beneficial Ownership interests
will be effected by the Securities Depository in accordance with its rules and
procedures.
(iii) Letter of Credit Interest Coverage. The interest
component of each Letter of Credit in effect during any Mode shall be
sufficient to provide Adequate Interest Coverage (as defined below). With
respect to the Weekly Rate Mode, the Daily Rate Mode, or the CP Rate
Mode, "Adequate Interest Coverage" shall mean the aggregate amount
of interest which would accrue on all Outstanding Bonds (other than Pledged
Bonds and Company Bonds) at a rate equal to 10% per annum, computed on
the basis of a 365-day year, (1) for a period of forty-eight (48) days, in the
case of Bonds in the Weekly Rate Mode or the Daily Rate Mode, and (2)
for a period of two hundred ninety (290) days, in the case of Bonds in the CP
Rate Mode or such shorter period acceptable to the Rating Agencies and
which will not result in a withdrawal or lowering of any rating on the Bonds
from that which would otherwise accrue from a longer interest
coverage period. Notwithstanding the foregoing, Adequate Interest Coverage
during the Weekly Rate Mode, the Daily Rate Mode, or the CP Rate Mode
may cover interest on Bonds at a rate other than 10% per annum if, (1) the
Company provides the Trustee with an opinion of Bond Counsel to the effect
that such coverage and the effect of such coverage upon clause (b) of the
definition of "Maximum Rate" herein will not adversely affect the exclusion
from gross income of interest on the Bonds for federal income tax purposes,
and (2) if the applicable rate is to be less than 10% per annum, such
lower rate will not result in a withdrawal or lowering of any rating on the
Bonds from that which would otherwise accrue from
maintaining coverage at the 10% rate. With respect to the
Adjustable Rate Mode, "Adequate Interest Coverage" shall mean the
aggregate amount of interest which would accrue on all Outstanding Bonds
(other than Pledged Bonds and Company Bonds) at a rate equal to the
Adjustable Rate to be borne by the Bonds during such Mode,
computed on the basis of a 360-day year composed of twelve 30-day months,
for a period of two hundred (200) days or with respect to
an Adjustable Rate Period of less than six months' duration, for a
period equal to the number of days in such Adjustable Rate Period plus
twenty, or in either such case, such shorter period acceptable
to the Rating Agencies and which will not result in a withdrawal,
or lowering of any rating on the Bonds from that which would otherwise
accrue from a longer interest coverage period.
(g) Denominations; Numbering. The Bonds are
issuable only as registered Bonds without coupons in Authorized
Denominations. The Bonds shall be numbered from 1 upwards, provided that
the number assigned to each definitive Bond shall be prefixed by
the letter "R." Temporary Bonds shall be prefixed by the letters "TR." The
Initial Bond hereinafter described shall be numbered T-1.
(h) Payment Terms. Principal of, and premium, if any,
on, the Bonds shall be payable by the Trustee from moneys held by the
Trustee in the Bond Fund to the Owners upon presentation
and surrender of the Bonds as the same become due at the corporate
trust office of the Trustee. Interest on the Bonds shall be paid by the
Trustee
by check drawn upon the Trustee and mailed by first class mail on the
respective Interest Payment Dates to the Owners at their addresses shown on
the registration books of the Trustee, or such other addresses as are
furnished to the Trustee (in form satisfactory to the Trustee) by such Owners,
as of the close of business on the Record Date with respect to such Interest
Payment Date; provided that payment of interest shall be made by the
Trustee by wire transfer to any Owner of $1,000,000 or more in
aggregate principal amount of Bonds upon such Owner providing the Trustee
with written wire transfer instructions acceptable to the Trustee before the
applicable Record Date. If and to the extent there shall be a default in the
payment of the interest due on an Interest Payment Date, such
defaulted interest shall be paid to the Owners in whose names any such Bonds
(or any Bond or Bonds issued upon registration of transfer or exchange
thereof) are registered at the close of business on the Business Day next
preceding the date of payment of such defaulted interest. Payment of the
principal or purchase price of, and the premium, if any, and interest on, the
Bonds shall be made in such lawful money of the United States
of America as, at the respective times of payment, shall be legal
tender for the payment of public and private debts.
(i) Dating. The Bonds shall be dated April 1, 1994
and initially bear interest from the Closing Date, and thereafter shall bear
interest from the Interest Payment Date next preceding the
date of authentication, unless (i) authenticated prior to the first
Interest Payment Date, in which event such Bonds shall bear interest from
the Closing Date, (ii) authenticated on an Interest Payment
Date, in which event such Bonds shall bear interest from the date of
authentication, or (iii) authenticated after a Record Date and before the
following Interest Payment Date, in which event such Bonds shall bear
interest from the following Interest Payment Date. If, as shown by the
records of the Trustee, interest on the Bonds is in default, Bonds issued in
exchange for Bonds surrendered for registration of transfer or exchange shall
bear interest from the date to which interest has been paid in full on the
Bonds, or, if no interest has been paid on the Bonds, from the Closing Date.
Section 2.03. Optional Tender. (a) While the Bonds are in
the Weekly Rate Mode, any Outstanding Bond or portion thereof in an
Authorized Denomination (except any Pledged Bond or Company ond) shall
be purchased on the demand of the registered Owner thereof on any Business
Day at a price equal to 100% of the principal amount thereof, plus
accrued and unpaid interest thereon to the date of purchase, upon delivery
(by telecopy or otherwise) to the Tender Agent at its Principal Office on any
Business Day, of the following:
(i) a written irrevocable notice, which will be effective
upon receipt, which (A) states the name and address of the registered Owner,
the principal amount of such Bond (and the portion thereof to be tendered, if
less than the full principal amount is to be tendered) and the Bond number,
and (B) states the date on which such Bond shall be so purchased,
which date shall be a Business Day not prior to the seventh day next
succeeding the date of the delivery of such notice to the Tender
Agent; and
(ii) such Bond (with all necessary endorsements and
guarantee of signature) attached to such notice; provided, however, that the
purchase price of such Bond shall be paid only upon the
delivery of the Bond to the Tender Agent and provided such Bond
shall conform in all material respects to the description thereof in such
notice; and provided, further, that if the registered Owner
of the tendered Bond is an open-ended diversified management
investment company (registered under the Investment Company Act of 1940,
as amended), the delivery required under this paragraph (ii) need not be
made until 11:00 a.m., New York City time, on the date such Bond is to be
purchased from such registered Owner. Undelivered Bonds shall be
deemed to have been delivered at the time and on the date required, and as of
such date and time shall no longer be deemed to be Outstanding under this
Indenture. The registered Owner of any Undelivered Bond shall be entitled
only to the purchase price payable for such Bond on the required
delivery date thereof, and such purchase price shall be paid to such registered
Owner only upon surrender of such Bond to the Tender Agent.
Notwithstanding the foregoing, if the Bonds in the Weekly
Rate Mode are held in a Book-Entry System, a Beneficial Owner shall have
the right to optionally tender for purchase its beneficial interest in any
Outstanding Bonds (or portion thereof in an Authorized Denomination) at
the purchase price set forth above, which right may be exercised as
follows. Such right shall be exercised by delivery by the Beneficial Owner to
the Remarketing Agent at its Principal Office of a notice identifying the
name and address of such Beneficial Owner and stating that such Beneficial
Owner will cause its beneficial interest (or portion thereof in an
Authorized Denomination) to be purchased, the amount of such interest to be
purchased, the date on which such interest will be purchased (which date
shall be a Business Day at least seven days after delivery of such notice to
the Remarketing Agent) and specifying the Remarketing Agent as the
Participant through which the Beneficial Owner maintains its interest. Upon
delivery of such notice, the Beneficial Owner shall cause its beneficial
Ownership interest in the Bonds (or the portion thereof specified in the
foregoing notice) being purchased to be transferred to the Remarketing
Agent at or prior to 11:00 a.m., on the optional tender date, in accordance
with the rules and procedures of the applicable Securities Depository.
(b) While the Bonds are in the Daily Rate Mode, any
Outstanding Bond or portion thereof in an Authorized Denomination (except
any Pledged Bond or Company Bond) shall be purchased on the demand of
the registered Owner thereof on any Business Day at a price equal to
100% of the principal amount thereof, plus accrued and unpaid
interest thereon to the date of purchase, upon delivery (by telecopy or
otherwise) to the Tender Agent at its Principal Office (i) no later than 10:30
a.m. on such Business Day, of a written irrevocable notice, which will be
effective upon receipt, which states the name and address of the registered
Owner, the principal amount of such Bond (and the portion thereof to be
tendered, if less than the full principal amount is to be tendered) on such
Business Day and the Bond number, and (ii) no later than 11:00 a.m. on
such Business Day such Bond (with all necessary endorsements and
guarantees of signature); provided, however, that the purchase price of such
Bond shall be paid only upon the delivery of the Bond to
the Tender Agent and provided such Bond shall conform in all
material respects to the description thereof in such notice. Undelivered Bonds
shall be deemed to have been delivered at the time and on the date required,
and as of such date and time shall no longer be deemed to be Outstanding
under this Indenture. The registered Owner of any Undelivered
Bond shall be entitled only to the purchase price payable for such Bond on the
required delivery date thereof, and such purchase price
shall be paid to such registered Owner only upon surrender of such
Bond to the Tender Agent.
Notwithstanding the foregoing, if the Bonds in the Daily
Rate Mode are held in a Book-Entry System, a Beneficial Owner shall have
the right to optionally tender for purchase its beneficial
interest in any Outstanding Bonds (or portion thereof in an
Authorized Denomination) at the purchase price set forth above, which right
may be exercised as follows. Such right shall be exercised by delivery, by the
Beneficial Owner to the Remarketing Agent at its Principal Office no later
than 10:30 a.m., on the date on which the beneficial interest of such
Beneficial Owner is to be purchased, of a notice identifying the name and
address of such Beneficial Owner and stating that such
Beneficial Owner will cause its beneficial interest (or portion
thereof in an Authorized Denomination) to be purchased, the amount of such
interest to be purchased, and specifying the
Remarketing Agent as the Participant through which the Beneficial
Owner maintains its interest. Upon delivery of such notice, the Beneficial
Owner shall cause its beneficial Ownership interest in
the Bonds (or the portion thereof specified in the foregoing notice)
being purchased to be transferred to the Remarketing Agent at or prior to
11:00 a.m., on the optional tender date, in accordance with
the rules and procedures of the applicable Securities Depository.
Section 2.04. Mandatory Tenders. All Outstanding Bonds
are subject to mandatory tender in whole by the Owners to the Tender Agent
at its Principal Office on each date described below:
(a) On each Conversion Date;
(b) On each CP Rate Reset Date;
(c) On the second Business Day prior to the expiration
or termination of the Letter of Credit (except for a termination because of
the occurrence of a "default" or an "event of default" under the Reimbursement
Agreement), if the Trustee has not received evidence satisfactory to it as
required by Section 5.03(b) hereof by the 25th day preceding the
scheduled Letter of Credit expiration or termination date of
either an extension of the then existing Letter of Credit or the issuance of
an Alternate Credit Facility meeting the requirements set forth therefor in
the Agreement, including the Maintenance of Rating requirement (as defined in
Section 5.03(b) of this Indenture);
(d) On the date of substitution of an Alternate Credit
Facility for the then existing Letter of Credit if the Trustee has not
received evidence of a Maintenance of Rating with respect thereto by the 25th
day preceding such substitution date; and
(e) On each optional redemption date pursuant to
Section 3.01 hereof for which the Company has elected to purchase Bonds in
lieu of an optional redemption pursuant to Section 3.01(c) hereof; and
(f) On any date on which the Guaranty is released as
provided in Section 9.05 hereof.
The purchase price of Bonds subject to mandatory tender
shall be 100% of the principal amount thereof (except in the case of a
mandatory tender described in paragraphs (c), (d), (e) or (f)
above, during, but prior to the expiration date of, an Adjustable
Rate Period in which case the purchase price shall include a premium equal
to the then applicable optional redemption premium,
if any, on the Bonds), plus accrued interest, if any, to the
mandatory tender date. Not later than 20 days prior to a mandatory tender
date described in clauses (b), (c), (d), or (f) above, the Trustee shall
mail notice to all Owners of Bonds stating that (l) due to the
occurrence of one of the events described above (which event shall be
specified), such Owner"s Bonds will be subject to mandatory
tender on the mandatory tender date (which date shall be specified),
(2) that, subject to clause (4) below, all Owners who fail to tender their
Bonds for purchase on the mandatory tender date will
nonetheless be deemed to have tendered their Bonds for purchase
on such date, (3) that, subject to clause (4) below, any Bonds not delivered
to the Tender Agent on or prior to the mandatory tender
date, for which there has been irrevocably deposited in trust with
the Trustee or the Tender Agent on or prior to the mandatory tender date
Available Moneys sufficient to pay the purchase price of
such Undelivered Bonds on the mandatory tender date, shall be
deemed to have been so purchased at the purchase price, and such Bonds
shall no longer be considered to be outstanding for purposes
of this Indenture and shall no longer be entitled to the benefits of
this Indenture, except for the payment of the purchase price thereof (and no
interest shall accrue thereon subsequent to the mandatory tender date), and
(4) that notwithstanding the foregoing, while the Bonds are held in the
Book-Entry System, Bonds need not be physically tendered on the
mandatory tender date, and transfers of beneficial Ownership interests will
be effected by the Securities Depository in accordance with its rules and
procedures. Notice of mandatory tenders described in clauses (a) and (e) of
this Section shall be given as part of the notice of conversion referenced
in Section 2.02(f)(ii) hereof or notice of redemption referenced in Section
3.04 hereof, respectively. No failure on the part of the Trustee to give such
notice shall affect the requirement that Bonds be tendered on the mandatory
tender date.
When Bonds are not in a Book-Entry System, Undelivered
Bonds shall, if Available Moneys sufficient to pay the purchase price of such
Bonds in full and available for the purchase of such
Bonds have been deposited with the Tender Agent on the
mandatory tender date, be deemed to have been tendered for purchase on the
mandatory tender date, and from
such date will no longer be
deemed to be Outstanding for purposes of this Indenture. Owners of
such Bonds shall have no rights
or benefits under this Indenture other than to receive the purchase
price for such Bonds upon
surrender of such Bonds to the Tender Agent. Notwithstanding the
foregoing, if on any mandatory
tender date the Bonds shall be in the Book-Entry System, it shall
not be necessary that Bonds be
physically tendered to the Tender Agent on the mandatory tender
date. Transfers of beneficial
Ownership interests shall be effected in accordance with the rules
and procedures established by the
Securities Depository.
Upon the occurrence of any mandatory tender described in
paragraphs (c), (d), or (e) above
during an Adjustable Rate Period, commencing on the date of such
mandatory tender the Bonds shall
bear interest in a Mode (and, in the case of the Adjustable Rate
Mode, for an Adjustable Rate
Period) to be designated by the Company by notice to the Trustee
given to the Trustee at least 25
days prior to such date, provided, however, the said designated
Mode or Adjustable Rate Period shall
be effective on the mandatory tender date only if each prerequisite
to a conversion specified in
Section 2.02(f) shall have been satisfied. If no designation is of a
Mode or an Adjustable Rate Period
made by the Company, or if the prerequisites of Section 2.02(f)
have not been satisfied, then, upon
the mandatory tender date, the Bonds shall convert automatically to
the Weekly Rate Mode, and the
Bonds thereupon shall bear interest at the Weekly Rate determined
pursuant to Section 2.02(b)(i).
Section 2.05. Form of Bonds. The Bonds and the
certificate of authentication, the provision
for registration and the form of assignment thereof shall be in
substantially the form set forth in
Exhibit A hereto, with such appropriate variations, omissions,
substitutions, insertions, notations,
legends and endorsements as may be deemed necessary or
appropriate by the officers of the Issuer
executing the same and as shall be permitted or required by the Act
and this Indenture.
Section 2.06. Execution and Authentication of Bonds;
Limited Obligations. (a) The Bonds
shall be executed on behalf of the Issuer with the manual or
facsimile signature of the President or
the Vice President of the Issuer, and attested, under a manual or
facsimile impression of the seal of
the Issuer, with the manual or facsimile signature of the Secretary
or Assistant Secretary of the Issuer.
In case any officer of the Issuer whose signature or a facsimile
thereof appears on a Bond shall cease
to be such officer before the delivery of such Bond, such signature
or such facsimile shall nevertheless
be valid and sufficient for all purposes, the same as if such officer
had remained in the office until
delivery.
(b) Except for the Initial Bond which shall be
registered by the Comptroller of Public
Accounts of the State, no Bond shall be valid or obligatory for any
purpose or be entitled to any
security or benefit under this Indenture unless and until a certificate
of authentication on such Bond
substantially in the form of Exhibit A hereto shall have been duly
executed by the Trustee, or, in the
case of purchased Bonds delivered by the Tender Agent pursuant to
Section 3.10, by the Tender
Agent. Any such executed certificate upon any such Bond shall be
conclusive evidence that such
Bond has been authenticated and delivered under this Indenture.
The Initial Bond shall be made
payable to Cede & Co., as nominee of the purchaser, pursuant to
Section 2.12(b) hereof. The
certificate of authentication on any Bond shall be deemed to have
been executed by it if signed by
an authorized officer or signatory of the Trustee, or the Tender
Agent but it shall not be necessary
that the same officer or signatory sign the certificate of
authentication on all of the Bonds issued
hereunder.
(c) The Bonds are not general obligations of the
Issuer, but are limited obligations
payable solely from Bond proceeds, the revenues of the Issuer from
the Agreement and other moneys
pledged thereto and held by the Trustee hereunder which constitute
the Trust Estate. Such proceeds,
revenues and other moneys are hereby pledged and assigned as
security for the equal and ratable
payment of the Bonds and shall be used for no other purposes than
to pay the principal of, premium,
if any, and interest on the Bonds, except as may be otherwise
expressly authorized in this Indenture
or the Agreement. The Bonds shall not be a debt of the State, or
any political subdivision of the
State within the meaning of any constitutional or statutory
provision whatsoever; and neither the
State nor any political subdivision thereof shall be liable thereon;
nor in any event shall such Bonds
or obligations be payable out of any funds or properties other than
the Trust Estate, and then only
to the extent herein provided. Neither the members of the Issuer
nor any persons executing the
Bonds shall be liable personally on the Bonds by reason of such
execution.
Section 2.07. Registration and Exchange of Bonds; Persons
Treated as Owners. (a) Bonds
may be transferred only on the registration books of the Issuer for
the Bonds, maintained by the
Trustee. Upon surrender for transfer of any Bond to the Trustee,
duly endorsed for transfer or
accompanied by an assignment duly executed by the Owner or the
Owner"s attorney duly authorized
in writing, the Trustee will authenticate a new Bond or Bonds in an
equal total principal amount and
registered in the name of the transferee.
(b) Bonds may be exchanged for an equal total
principal amount of Bonds of different
denominations. The Trustee will authenticate and deliver Bonds
that the Owner making the exchange
is entitled to receive, bearing numbers not then outstanding.
(c) The Trustee will not be required to transfer or
exchange any Bond during the period
beginning 10 Business Days before the mailing of notice calling
such Bond or any portion of such
Bond for redemption and ending on the redemption date, except as
provided in Sections 2.03 and
2.04 hereof.
(d) The Owner of a Bond shall, except as otherwise
described herein with respect to
certain rights of Beneficial Owners, be the absolute Owner of the
Bond for all purposes, and payment
of principal, interest or purchase price shall be made only to or
upon the written order of the Owner
or the Owner"s legal representative.
(e) The Trustee will require the payment by a Owner
requesting exchange or transfer of
any tax or other governmental charge required to be paid in respect
of the exchange or transfer but
will not impose any other charge on the Owner.
(f) Notwithstanding the foregoing, for so long as the
Bonds are held under the
Book-Entry System, transfers of beneficial Ownership will be
effected pursuant to rules and
procedures established by the Securities Depository.
Section 2.08. Mutilated, Lost, Stolen, or Destroyed Bonds.
If any Bond is mutilated, lost,
stolen, or destroyed, the Trustee will authenticate a new Bond of
the same denomination if any
mutilated Bond shall first be surrendered to the Trustee, and if, in
the case of any lost, stolen, or
destroyed Bond, there shall first be furnished to the Trustee for the
benefit of the Issuer, the Trustee,
the Bank, the Company, and the Guarantor evidence of such loss,
theft, or destruction, together with
an indemnity reasonably satisfactory to the Trustee to save each of
them harmless from all risks
related thereto, however remote. If the Bond has matured, instead
of issuing a duplicate Bond, the
Trustee may with the consent of the Company pay the Bond
without requiring surrender of the Bond
and make such requirements as the Trustee deems fit for its
protection, including a lost instrument
bond. The Issuer, the Company, the Guarantor, and the Trustee
may charge their reasonable fees
and expenses in this connection.
Section 2.09. Cancellation of Bonds. Whenever a Bond is
delivered to the Trustee for
cancellation (upon payment, redemption, or otherwise), or for
transfer, exchange, or replacement
pursuant to Section 2.07 or 2.08, the Trustee will promptly cancel
the Bond and deliver the canceled
Bond or a certificate of destruction as appropriate to the Company
at its request. Upon cancellation
of any tendered Bond by the Tender Agent, the Tender Agent shall
forward the canceled Bond to
the Trustee.
Section 2.10. Temporary Bonds. Until definitive Bonds are
ready for delivery, the Issuer may
execute and the Trustee or the Tender Agent will authenticate
temporary Bonds substantially in the
form of the definitive Bonds, with appropriate variations. The
Issuer will, without unreasonable delay,
prepare and the Trustee or the Tender Agent will authenticate
definitive Bonds in exchange for the
temporary Bonds. Such exchange shall be made by the Trustee or
the Tender Agent without charge.
Exchanges and transfers shall be made without charge to
the Owners; provided that in each
case the Trustee shall require the payment by the Owner requesting
exchange or transfer of any tax
or other governmental charge required to be paid with respect
thereto.
Section 2.11. Conditions Precedent to Authentication and
Delivery of Bonds. Upon the
execution and delivery of this Indenture, one initial Bond (the
"Initial Bond"), representing the
aggregate principal amount of the Bonds, payable to the initial
purchaser(s), or its (their) designee(s),
executed with the manual or facsimile signatures of the President
and Secretary of the Issuer,
approved by the Attorney General of the State, and registered and
manually signed by the
Comptroller of Public Accounts of the State, will be delivered to the
initial purchaser or its designee.
Upon payment for the Initial Bond, the Trustee shall cancel the
Initial Bond and deliver to the
Securities Depository on behalf of the purchaser one registered
definitive Bond for each year of
maturity of the Bonds, in the aggregate principal amount of all
Bonds for such maturity, registered
in the name of Cede & Co., as nominee for DTC. Prior to and as a
condition precedent to the
authentication and delivery of the Bonds there shall be filed with
and delivered to the Trustee:
(i) a copy, duly certified by an authorized
representative of the Issuer, of the
resolution adopted by the Issuer in accordance with the Act
authorizing the execution and
delivery of this Indenture and the issuance of the Bonds;
(ii) original duly executed and delivered counterparts
of this Indenture, the
Agreement, the Guaranty, and the Tax Agreement;
(iii) an opinion of Bond Counsel to the effect that
Bonds executed, authenticated
and delivered as provided in this Indenture will be duly and
validly issued and will constitute
valid and binding limited obligations of the Issuer;
(iv) the approving opinion of the Attorney General of
the State;
(v) the approval of the Texas Department of
Commerce; and
(vi) the duly executed and delivered Initial Letter of
Credit.
Section 2.12. Book-Entry System. (a) The Bonds shall be
issued pursuant to a Book-Entry
System administered by the Securities Depository with no physical
distribution of Bond certificates
to be made except as provided in this Section 2.12. Any provision
of this Indenture or the Bonds
requiring physical delivery of the Bonds shall, with respect to any
Bonds held under the Book-Entry
System, be deemed to be satisfied by a notation on the registration
books maintained by the Trustee
that such Bonds are subject to the Book-Entry System.
(b) The Book-Entry System will be maintained by the
Securities Depository and the
Participants and Indirect Participants and will evidence beneficial
Ownership of the Bonds in
Authorized Denominations, with transfers of ownership effected on
the records of the Securities
Depository, the Participants, and the Indirect Participants pursuant
to rules and procedures
established by the Securities Depository, the Participants, and the
Indirect Participants. The principal
of and any premium on each Bond shall be payable to the Securities
Depository Nominee or any
other person appearing on the registration books maintained by the
Trustee as the registered Owner
of such Bond or his registered assigns or legal representative at the
principal office of the Trustee.
So long as the Book-Entry System is in effect, the Securities
Depository will be recognized as the
Owner of the Bonds for all purposes. Transfer of principal, interest,
and any premium payments or
notices to Participants and Indirect Participants will be the
responsibility of the Securities Depository,
and transfer of principal, interest, and any premium payments or
notices to Beneficial Owners will
be the responsibility of the Participants and the Indirect
Participants. No other party will be
responsible or liable for such transfers of payments or notices or for
maintaining, supervising, or
reviewing such records maintained by the Securities Depository, the
Participants or the Indirect
Participants. While the Securities Depository Nominee or the
Securities Depository, as the case may
be, is the registered Owner of the Bonds, notwithstanding any other
provisions set forth herein,
payments of principal of, redemption premium, if any, and interest
on the Bonds shall be made to
the Securities Depository Nominee or the Securities Depository, as
the case may be, by wire transfer
in immediately available funds to the account of such Owner.
Without notice to or the consent of
the Beneficial Owners, the Trustee, with the consent of the
Company, and the Securities Depository
may agree in writing to make payments of principal, redemption
price, or purchase price and interest
in a manner different from that set out herein. In such event, the
Trustee shall make payments with
respect to the Bonds in such manner as if set forth herein.
(c) With the consent of the Remarketing Agent and
the Issuer, the Company may at any
time elect (i) to provide for the replacement of any Securities
Depository as the depository for the
Bonds with another qualified Securities Depository, or (ii) to
discontinue the maintenance of the
Bonds under a Book-Entry System. In such event, the Trustee shall
give 30 days" prior notice of such
election to the Securities Depository (or such fewer number of days
as shall be acceptable to such
Securities Depository).
(d) Upon the discontinuance of the maintenance of the
Bonds under a Book-Entry
System, the Trustee will cause Bonds to be issued directly to the
Beneficial Owners of Bonds, or their
designees, as further described below. In such event, the Trustee
shall make provisions to notify
Participants and the Beneficial Owners of the Bonds, by mailing an
appropriate notice to the
Securities Depository, or by other means deemed appropriate by the
Trustee in its discretion, that
Bonds will be directly issued to the Beneficial Owners of Bonds as
of a date set forth in such notice,
which shall be a date at least 10 days after the date of mailing of
such notice (or such fewer number
of days as shall be acceptable to the Securities Depository).
(e) In the event that Bonds are to be issued to the
Beneficial Owners of the Bonds, or
their designees, the Trustee, at the expense of the Company, shall
promptly have prepared Bonds in
certificated form registered in the names of the Beneficial Owners
of Bonds shown on the records
of the Participants provided to the Trustee, as of the date set forth
in the notice described above.
Bonds issued to the Beneficial Owners, or their designees, shall be
in fully registered form
substantially in the form set forth in Exhibit A.
(f) If any Securities Depository is replaced as the
depository for the Bonds with another
qualified Securities Depository, the Trustee, at the expense of the
Company, will issue to the
replacement Securities Depository Bonds substantially in the form
set forth in Exhibit A, registered
in the name of such replacement Securities Depository.
(g) The Issuer, the Company, the Tender Agent, the
Remarketing Agent, and the Trustee
shall have no liability for the failure of any Securities Depository to
perform its obligation to any
Participant, any Indirect Participant or any Beneficial Owner of any
Bonds, and the Issuer, the
Company, the Tender Agent, the Remarketing Agent, or the
Trustee shall not be liable for the
failure of any Participant, Indirect Participant, or other nominee of
any Beneficial Owner of any
Bonds to perform any obligation that such Participant, Indirect
Participant, or other nominee may
incur to any Beneficial Owner of the Bonds.
(h) Notwithstanding any other provision of this
Indenture, on or prior to the date of
issuance of the Bonds the Trustee, the Company, and the Issuer
shall have executed and delivered
to the initial Securities Depository a Letter of Representations
governing various matters relating to
the Securities Depository and its activities pertaining to the Bonds.
The terms and provisions of such
Letter of Representations are incorporated herein by reference and,
in the event there shall exist any
inconsistency between the substantive provisions of the said Letter
of Representations and any
provisions of this Indenture, then, for as long as the initial
Securities Depository shall serve with
respect to the Bonds, the terms of the Letter of Representations
shall govern.
Article III
Redemption of Bonds; Purchase and Remarketing of Bonds
Section 3.01. Optional Redemption. The Bonds shall be
subject to optional redemption only
as follows:
(a) Weekly Rate Mode, CP Rate Mode, or Daily Rate
Mode. While the Bonds are in
the Weekly Rate Mode or the Daily Rate Mode, the Bonds shall be
subject to optional redemption,
in whole or in part on any Business Day, and while the Bonds are
in the CP Rate Mode the Bonds
shall be subject to optional redemption in whole or in part on any
Interest Payment Date, in all cases
at the direction of the Company and with the Bank's consent if
required by the Reimbursement
Agreement, upon at least 40 days" prior written notice from the
Company to the Trustee, the Bank,
and the Remarketing Agent, at a redemption price equal to 100% of
the aggregate principal amount
of the Bonds to be redeemed, plus accrued interest thereon to the
redemption date, without
premium.
(b) Adjustable Rate Mode. While the Bonds are in the
Adjustable Rate Mode, the Bonds
shall be subject to optional redemption, after the dates specified in
the table below, in whole or in
part on any date at the direction of the Company and with the
Bank's consent if required by the
Reimbursement Agreement, upon at least 40 days" prior written
notice from the Company to the
Trustee, the Bank, and the Remarketing Agent, at the applicable
redemption price (expressed as a
percentage of the principal amount to be redeemed) set forth below,
plus accrued interest thereon
to the date of redemption:
Length of Currently Applicable Adjustable Dates After Which
Redemption Is
Rate Period (expressed in whole years) Allowed and
Redemption Prices*
greater than 10 after 10 years at 102%, declining by 1%
annually to 100%
less than or equal to 10 and greater than 7 after 5 years at 102%,
declining by 1%
annually to 100%
less than or equal to 7 and greater than 4 after 3 years at 102%,
declining by 1%
annually to 100%
less than or equal to 4 and greater than 2 after 2 years at 102%,
declining by 1%
annually to 100%
less than or equal to 2 not callable
[FN]
*measured from the start of the currently applicable Adjustable
Rate Period
The payment of any premium upon the optional redemption
of Bonds shall be made solely
from Available Moneys.
Notwithstanding the foregoing, the Bonds when in an
Adjustable Rate Period may be subject
to optional redemption upon terms different than those set forth
above if the Company delivers to
the Trustee on or before the first day of such Adjustable Rate Period
a certificate specifying different
optional redemption dates or prices to be in effect during such
period (or that the Bonds will not be
subject to optional redemption during such Period) and an opinion
of Bond Counsel to the effect that
the adoption of such optional redemption provisions would not
adversely affect the exclusion of
interest on the Bonds from the federal gross income of the Owners
thereof.
(c) Purchase in Lieu of Optional Redemption. The
Company shall have the option to
cause the Bonds to be subject to mandatory tender and purchase
pursuant to Section 2.04 hereof in
lieu of an optional redemption of Bonds pursuant to Section 3.01(a)
or (b) above. Such option may
be exercised by delivery by the Company to the Trustee and
Remarketing Agent on or prior to the
Business Day preceding the optional redemption date of a written
notice specifying that the Bonds
shall not be redeemed, but instead shall be subject to mandatory
tender and purchase pursuant to
Section 2.04 hereof. Upon delivery of such notice, the Bonds shall
not be redeemed but shall instead
be subject to mandatory tender pursuant to Section 2.04 hereof at a
tender price equal to the price
at which the Bonds would have been redeemed on the date which
would have been the optional
redemption date.
Section 3.02. Extraordinary Optional Redemption. While
the Bonds are in the Adjustable
Rate Mode or the CP Rate Mode, the Bonds are subject to
extraordinary redemption in whole on
any date at a redemption price equal to the principal amount of
outstanding Bonds plus accrued
interest to the redemption date, without premium, upon the exercise
by the Company of its option
to cause the Bonds to be redeemed as a result of the occurrence of
any of the events described
below:
(1) the Project has been damaged or destroyed to such
an extent that, in the judgment of
the Company, (i) it cannot be reasonably restored to substantially
the condition thereof immediately
preceding such damage or destruction, (ii) the Company is thereby
prevented from carrying on normal
operations at the Project for a period of nine or more consecutive
months following such damage or
destruction, or (iii) it would not be economically feasible for the
Company to replace, repair, rebuild,
or restore the same;
(2) title in and to, or the temporary use of, all or
substantially all of the Project has been
taken under the exercise of the power of eminent domain (or sold in
lieu of such a taking) by any
governmental authority, or person acting under governmental
authority and such a taking or sale, in
the judgment of the Company, may result in the Company being
prevented thereby from carrying on
normal operations at the Project for a period of nine or more
consecutive months; or
(3) as a result of any changes in the Constitution of the
State or the Constitution of the
United States of America or by legislative or administrative action
(whether State or federal) or by
final decree, judgment, decision, or order of any court or
administrative body (whether State or
federal), the Agreement has become void or unenforceable or
impossible of performance in
accordance with the intent and purposes of the parties as expressed
therein.
To exercise its option to effect an extraordinary optional
redemption, the Company must
deliver to the Trustee written notice of the occurrence of any such
event and of its election to cause
the Bonds to be redeemed as a result thereof. Such notice shall
specify the redemption date which
shall be at least 40 days after the date of delivery of such notice to
the Trustee.
Section 3.03. Mandatory Redemption. The Bonds are
subject to mandatory redemption in
whole on the earliest redemption date for which timely notice of
redemption can be given by the
Trustee after the occurrence of a Determination of Taxability at a
redemption price equal to the
aggregate outstanding principal amount of the Bonds plus accrued
interest thereon to the redemption
date, without premium. The foregoing amount shall constitute the
total amount required to be paid
to the Owners as a result of the occurrence of a Determination of
Taxability.
Section 3.04. Notice of Redemption. (a) At least 30 days
prior to the date of any redemption
of the Bonds, the Trustee shall cause notice of the call for
redemption to be sent by first class mail,
postage prepaid, to the Tender Agent, the Bank, the Remarketing
Agent, the Company, the
Guarantor, and the Owner of each Bond to be redeemed. In
addition, such notice shall also be given
(at least two Business Days before the redemption notice described
in the preceding sentence) by
registered, certified, or overnight mail, to all registered securities
depositories then in the business
of holding substantial amounts of obligations of types comprising
the Bonds and to one or more
national information services that disseminate notices of
redemption of obligations such as the Bonds.
Neither the failure to give any such notice nor any defect in any
notice so mailed shall affect the
sufficiency or the validity of any proceedings for the redemption of
the Bonds.
(b) The redemption notice shall identify the Bonds or
portions thereof to be redeemed and
shall state (l) the date of such notice and the redemption date, (2)
the redemption price, (3) the
original date of execution and delivery of the Bonds to be
redeemed, (4) the rate of interest borne
by the Bonds to be redeemed, (5) the date of maturity of the Bonds,
(6) the numbers and CUSIP
numbers of the Bonds to be redeemed, (7) that the redemption price
of any Bond payable only upon
the surrender of the Bond to be Trustee at its corporate trust office,
(8) the address at which the
Bonds must be surrendered, (9) that interest on the Bonds called for
redemption ceases to accrue
on the redemption date provided that on such date Available
Moneys are on deposit in the Bond
Fund sufficient to pay the redemption price of the Bonds in full,
and (10) such additional descriptive
information identifying the Bonds to be redeemed, including their
interest rate and stated maturity
date as may be deemed appropriate by the Trustee to effect the
redemption.
Any notice of optional redemption shall also state that the
Company may elect that the Bonds
be subject to mandatory tender and purchase in lieu of optional
redemption at a tender price equal
to the redemption price. Any notice of optional redemption may
also state (and shall state, if the
Company shall so direct) that the redemption is conditioned on
receipt of monies for such
redemption by the Trustee on or prior to the redemption date; if
such moneys are not received, the
redemption of the Bonds for which notice was given shall not be
made.
Section 3.05. Effect of Availability of Redemption Prices.
If on any redemption date Available
Moneys sufficient to pay in full the redemption price of the Bonds
called for redemption have been
deposited with the Trustee and shall be available to be utilized to
pay the redemption price of such
Bonds, such Bonds shall no longer be secured by or be deemed to
be Outstanding under the
provisions of this Indenture. Interest shall not continue to accrue on
such Bonds after the redemption
date. If Available Moneys shall not be on deposit on the redemption
date, such Bonds or portions
thereof shall continue to bear interest until paid at the same rate as
they would have borne had they
not been called for redemption.
Section 3.06. Partial Redemption. (a) Any partial
redemption of Bonds shall be made only
in Authorized Denominations. If fewer than all of the Bonds shall
be called for redemption, the
portion of Bonds to be redeemed shall be selected by lot by the
Trustee from among all Outstanding
Bonds; provided that the Trustee shall first select Pledged Bonds
and Company Bonds for
redemption. Each Bond shall be considered separate Bonds in
Authorized Denominations for
purposes of selecting the Bonds to be redeemed. Subject to the
provisions of the Bonds with respect
to the Book-Entry System, if any Bond shall be called for
redemption only in part, then the Owner
of such Bond, upon surrender of such Bond to the Trustee for
payment, shall be entitled to receive
a new Bond or Bonds in the aggregate principal amount of the
unredeemed balance of the principal
amount of such Bond, without charge therefor.
(b) If the Owner of any Bond which is called for
redemption only in part shall fail to
present such Bond to the Trustee for payment and exchange as
aforesaid, such Bond shall,
nevertheless, become due and payable on the date fixed for
redemption, to the extent called for
redemption (and to that extent only) and to such extent such Bond
shall no longer be deemed to be
Outstanding for purposes of this Indenture.
(c) Notwithstanding the foregoing, if the Bonds are
held in the Book-Entry System at the
time of a partial redemption of the Bonds, beneficial Ownership
interests in the series of Bonds shall
be selected for redemption in accordance with the rules and
procedures established by the Securities
Depository.
Section 3.07. Purchase of Tendered Bonds. (a) In
performing their duties hereunder, the
Tender Agent and the Remarketing Agent shall act as an agent of
the persons to whom purchased
Bonds are to be delivered pursuant to Section 3.10, of persons
tendering such Bonds and of the
Company and shall not be considered to be purchasing Bonds for
their own account and, in the
absence of written notification from the Trustee to the contrary,
shall be entitled to assume that any
Bond tendered or deemed tendered to the Remarketing Agent or the
Tender Agent for purchase
is entitled under the Indenture to be so purchased. No acceptance of
Bonds by the Tender Agent
hereunder shall effect any merger or discharge of the indebtedness
of the Issuer evidenced by the
Bonds. The Tender Agent and the Remarketing Agent shall accept
all Bonds properly tendered for
purchase in accordance with the provisions of the Bonds and as set
forth in this Indenture.
(b) During any period that no Book-Entry System for
the Bonds is in effect, a Tender
Agent shall be appointed as provided in Section 7.11 hereof.
Immediately upon the effectiveness of
such appointment, the Tender Agent shall establish a special trust
fund designated as the "Grapevine
Industrial Development Corporation Industrial Development
Revenue Bonds (Trencor Jetco, Inc.
Project), Series 1994--Purchase Fund" (the "Purchase Fund").
The Tender Agent shall hold all Bonds
delivered to it in trust for the exclusive benefit of the respective
Owners of Bonds tendering such
Bonds for sale until moneys representing the purchase price of such
Bonds have been delivered to
or for the account of such Owners of Bonds. The Tender Agent
shall hold all moneys delivered to
it for the purchase of Bonds in the Purchase Fund in trust, solely for
the benefit of the persons
delivering such moneys until the Bonds purchased with such
moneys have been delivered to or for
the account of such persons and thereafter solely for the benefit of
the persons entitled to such
moneys. Moneys held in the Purchase Fund shall not be invested.
The Issuer and the Trustee hereby
authorize and direct the Tender Agent to withdraw sufficient funds
from the Purchase Fund to pay
the purchase price of tendered Bonds as the same becomes due and
payable, which authorization and
direction the Tender Agent accepts.
(c) During any period the Bonds are held in a Book-
Entry System, the purchase price of
tendered Bonds, (i) if derived from the source described in Section
3.09(a), shall be paid on the
tender date by the Remarketing Agent from moneys received from
the purchaser of the remarketed
Bonds, (ii) if derived from either the source described in Section
3.09(b) or 3.09(c) shall be paid on
the tender date by the Trustee from moneys drawn on the Letter of
Credit or received from the
Company, as the case may be, and (iii) moneys paid by the
Guarantor pursuant to Section 2.1(c) of
the Guaranty.
Section 3.08. Remarketing of Tendered Bonds; Payment of
Purchase Price. (a) The
Remarketing Agent shall use its best efforts to remarket tendered
Bonds of which it has received
notice of tender from the Tender Agent (or Beneficial Owners, as
the case may be), at a price equal
to 100% of the principal amount thereof plus, accrued interest to
the purchase date. Such
remarketing shall be made in accordance with, and subject to the
conditions of, the provisions of the
Remarketing Agreement. Bonds which have been duly tendered for
purchase and which have not
been remarketed shall be purchased on the tender date with the
proceeds of an appropriate draw
under the Letter of Credit; provided, however, (i) during any period
the Bonds are not secured by
a Letter of Credit, or (ii) if the Bank shall fail to honor a draw on
the Letter of Credit to provide
for the purchase price of tendered Bonds, then such Bonds will be
purchased by the Company on the
tender date.
(b) Upon receipt of a duly tendered written notice of
an optional tender of Bonds, the
Tender Agent shall notify the Remarketing Agent, the Company,
the Guarantor, and the Trustee of
the principal amount of Bonds tendered and the date fixed for
purchase of the tendered Bonds.
During any period the Bonds are in the Book-Entry System, such
notice will be given by the
Remarketing Agent to the Company and the Trustee.
(c) Prior to 4:00 p.m. on the Business Day which
immediately precedes the purchase date
for any Bonds (or, in the case of Bonds in the Daily Rate Mode,
prior to 11:30 a.m. on the purchase
date of such Bonds), the Remarketing Agent shall give notice to the
Tender Agent, the Company,
the Guarantor, and the Trustee of the principal amount of such
Bonds which have been remarketed,
the names, addresses, and taxpayer identification numbers of the
purchasers of such Bonds and the
denominations in which the Bonds are to be purchased by and
delivered to each purchaser. If less
than all of the Bonds to be tendered on such purchase date have
been remarketed, the Remarketing
Agent shall, in addition, notify the Trustee, the Tender Agent, the
Guarantor, and the Company prior
to 10:30 a.m. (or, in the case of Bonds in the Daily Rate Mode,
11:30 a.m.) on the purchase date of
the principal amount of Bonds which have not been remarketed and
the amount of accrued interest
to be paid on such Bonds on such purchase date. Purchasers of
Bonds which have been remarketed
shall be required to deliver the purchase price thereof directly to the
Tender Agent for deposit in
the Purchase Fund (or, during any period the Bonds are in the
Book-Entry System, such moneys shall
be transferred to the account of the Remarketing Agent on the
records of the Securities Depository)
not later than 10:30 a.m. (or, in the case of Bonds in the Daily Rate
Mode, 11:30 a.m.), on the
purchase date. By 11:30 a.m., on the purchase date, the Tender
Agent shall notify (promptly
confirmed in writing) the Trustee, the Remarketing Agent, the
Company, the Guarantor, and the
Bank of the amount of remarketing proceeds which have been
deposited. During any period the
Bonds are in the Book-Entry System, such notice shall be given by
the Remarketing Agent.
(d) Prior to 12:00 noon, on any purchase date (whether
optional or mandatory), the Trustee
shall draw upon the Letter of Credit, in an amount equal to the
purchase price of all Bonds to be
purchased on such purchase date, less the amount of remarketing
proceeds of which the Trustee has
notice were deposited with the Tender Agent (or the Remarketing
Agent during any period the
Bonds are in the Book-Entry System) by 11:30 a.m., on such date.
In the event of a draw on the
Letter of Credit upon a mandatory tender due to a substitution of an
Alternate Credit Facility, the
draw shall be made upon the Letter of Credit being replaced. If the
Bonds are not then secured by
a Letter of Credit, by 1:30 p.m. on the purchase date for any Bonds,
the Tender Agent (or the
Trustee during any period the Bonds are in the Book-Entry System)
shall receive from the Company,
pursuant to Section 5.1(b) of the Agreement, an amount equal to
the purchase price of all Bonds to
be purchased on such date, less the amount of remarketing proceeds
of which the Trustee has notice
were on deposit with the Tender Agent or the Remarketing Agent,
as the case may be, by 11:30 a.m.
on such date. No draw on the Letter of Credit shall be made with
respect to Pledged Bonds or
Company Bonds.
(e) The Trustee shall, to the extent it has drawn
moneys under the Letter of Credit for the
purchase of Bonds, authorize direct payment by the Bank to the
Tender Agent (or, during any period
the Bonds are in the Book-Entry System, to the payee specified by
the Securities Depository) of the
moneys so drawn.
(f) Notices pursuant to this Section shall be by
telephone, tested telecopy (receipt
confirmed by telephone), telefacsimile transmittal, or telegram,
promptly confirmed in writing, except
that any drawing under the Letter of Credit shall be in accordance
with the terms thereof.
(g) Anything in this Indenture to the contrary
notwithstanding, there shall be no obligation
on the part of the Remarketing Agent to remarket Bonds (i) if there
shall have occurred and be
continuing an Event of Default under this Indenture or a
Determination of Taxability, or (ii) which
are subject to mandatory tender hereunder, except as the
Remarketing Agent and the Company have
otherwise agreed in the Offering Agreement.
(h) Any Bond optionally tendered for purchase after
the date on which such Bond has been
selected for redemption or the Trustee has notified the Owners of
pendency of a conversion of the
interest rate Mode of the Bonds shall not be remarketed unless the
purchaser has been notified by
the Trustee of the redemption or the interest rate Mode conversion,
as appropriate. Any purchaser
so notified must deliver a notice to the Trustee and the Tender
Agent (or, during any period the
Bonds are in the Book-Entry System, to the Remarketing Agent)
stating that such purchaser is aware
of the pendency of the redemption or of the interest rate Mode
conversion, as appropriate, and
agreeing not to resell the Bonds prior to the date of such
redemption or conversion, as the case may
be.
Section 3.09. Funds for Purchase Price of Bonds. On the
date Bonds are to be purchased
pursuant to the optional or mandatory tender provisions of this
Indenture, the Tender Agent shall
deliver the purchase price to the tendering Owner (or, if the Bonds
are in a Book-Entry System, the
Remarketing Agent or the Trustee, as appropriate, shall deliver the
purchase price to the appropriate
payee on the records of the Securities Depository), but only from
the funds listed below, in the order
of priority indicated:
(a) the proceeds of the sale of such Bonds which have
been remarketed by the
Remarketing Agent to any person other than the Company, the
Guarantor, or the Issuer (or any
"insider" of the Company, the Guarantor, or the Issuer within the
meaning of the Bankruptcy Code)
which have been delivered to the Tender Agent or the Remarketing
Agent by 11:30 a.m., on the
purchase date;
(b) moneys drawn under the Letter of Credit;
(c) moneys deposited by the Company with the Trustee
pursuant to the Agreement; and
(d) moneys paid by the Guarantor pursuant to Section
2.1(c) of the Guaranty.
Section 3.10. Delivery of Purchased Bonds. The Tender
Agent shall make available by 4:00
p.m. on the purchase date of any tendered Bonds (whether such
tender was optional or mandatory),
at its principal office in New York City, Bonds which have been
purchased with moneys described
in Section 3.09(a) for receipt by the purchaser thereof, which Bonds
shall be authenticated by the
Tender Agent. Bonds purchased with moneys described in Section
3.09(a) shall be registered in the
manner directed by the Remarketing Agent and delivered to the
Remarketing Agent for redelivery
to the purchasers thereof. Bonds purchased with moneys described
in Section 3.09(b) shall be
delivered by the Tender Agent to the Trustee, and registered by the
Trustee in the name of the
Company indicating their status as Pledged Bonds (or if the Bonds
are held in the Book-Entry
System, such Bonds shall be recorded in the books of the Securities
Depository for the account of
the Trustee and shall be deemed to be pledged to the Bank). Bonds
purchased with moneys
described in Section 3.09(c) shall be registered in the name of the
Company and delivered to the
Company. Bonds, purchased with moneys described in Section
3.09(d) hereof shall be registered in
the name of the Guarantor and delivered to the Guarantor.
Notwithstanding anything herein to the contrary, so long as
the Bonds are held under the
Book-Entry System, Bonds will not be delivered as set forth in the
preceding paragraph; rather,
transfers of beneficial ownership of the Bonds to the persons
indicated above will be effected
pursuant to its rules and procedures established by the Securities
Depository.
Section 3.11. Pledged Bonds. If any Bond is purchased
pursuant to Section 3.07 hereof with
moneys drawn under the Letter of Credit pursuant to Section
3.09(b) hereof, if no Book-Entry
System is then in effect, that Bond shall be delivered to and held by
the Trustee, registered in the
name of the Company and shall constitute a Pledged Bond until
released as herein provided. A
Pledged Bond so held by the Trustee shall be released only upon
receipt by the Trustee or the Bank
of an amount equal to the principal amount thereof plus accrued
interest, if any, thereon to the date
of purchase and receipt by the Trustee of written confirmation of
the reinstatement of the amounts
available to be drawn under the Letter of Credit to cover the full
principal amount of all Outstanding
Bonds, plus Adequate Interest Coverage. If a Book-Entry System is
then in effect, Bonds purchased
with Letter of Credit proceeds pursuant to Section 3.09(b) hereof
shall be reflected on the records
of the Securities Depository as being held for the account of the
Trustee, and the Trustee agrees that
it shall hold such Bonds solely for the benefit of the Bank. While a
Book-Entry System is in effect,
the Trustee shall cause the release of such Bonds from its account
on the records of the Securities
Depository only under the conditions for release of Pledged Bonds
previously set forth in this
paragraph.
During the Daily Rate Period, CP Rate Period, and the
Weekly Rate Period, the Remarketing
Agent shall use its best efforts to remarket Pledged Bonds in
accordance with the provisions of the
Offering Agreement. If the Remarketing Agent remarkets any
Pledged Bond, the Remarketing
Agent shall give the notice described in the first sentence of Section
3.08(c) hereof, and shall direct
the purchaser of such Pledged Bond to transfer, by 10:00 a.m. (or,
in the case of Bonds in the Daily
Rate Mode, 11:30 a.m.) on the purchase date, the purchase price of
such remarketed Pledged Bond
to the Bank, with notice thereof to the Company and the Trustee.
The Remarketing Agent shall
deliver remarketed Pledged Bonds to the purchasers thereof in
accordance with Section 3.10 hereof.
On each Interest Payment Date prior to the release of
Pledged Bonds, the Trustee shall apply
moneys in the Non-Available Moneys Account of the Bond Fund to
the payment of principal of and
interest on such Pledged Bonds, but shall not draw on the Letter of
Credit or use moneys in the
Letter of Credit Account of the Bond Fund for such purpose to any
extent whatsoever; and the
Trustee shall receive for the account of the Bank the interest and
principal paid in respect of such
Pledged Bonds, and immediately upon such receipt the Trustee
shall pay such interest and principal
over to the Bank pursuant to written wire transfer instructions
acceptable to the Trustee; provided,
however, that if at such time the Trustee has been notified in
writing by the Bank that there shall
not remain any amount owed to the Bank under the Reimbursement
Agreement, such interest and
principal payments shall be paid over to the Company.
It is recognized and agreed by the Trustee that while it
holds Pledged Bonds, such Pledged
Bonds are held by the Trustee for the benefit of the Bank as a first
priority secured creditor.
Notwithstanding anything herein to the contrary, so long as
the Bonds are held under the
Book-Entry System, Pledged Bonds shall not be delivered to and
held by the Trustee; rather transfers
of beneficial Ownership of Bonds to the persons indicated above
will be effected pursuant to the
rules and procedures established by the Securities Depository.
Article IV
General Provisions
Section 4.01. Payment of Principal, Premium, if any, and
Interest. The Issuer covenants that
it will duly and punctually pay or cause to be paid the principal of,
premium, if any, and interest on
the Bonds issued under this Indenture at the place, on the dates,
and in the manner provided herein
and therein according to the true intent and meaning hereof and
thereof, but solely from the
payments, revenues, and receipts specifically assigned herein for
such purposes as set forth in
Section 5.01 of this Indenture.
Section 4.02. Instruments of Further Assurance. (a) The
Issuer covenants that it will, at the
expense of the Company, execute and deliver such indentures
supplemental hereto and such further
acts, instruments, and transfers as the Trustee or the Bank
reasonably may require for the better and
more effectual assignment to the Trustee of all payments, revenues,
and other amounts payable under
or with respect to the Agreement, the Letter of Credit, and any
other income and other moneys
assigned hereby to the payment of the principal of, premium, if any,
and interest on the Bonds. The
Issuer further covenants that it will not create or, to its knowledge,
suffer to be created any lien,
encumbrance, or charge upon its interest in the revenues and other
amounts payable under or with
respect to the Trust Estate, except the lien and charge granted
hereby.
(b) The Trustee agrees that it will, at the expense of
the Company pursuant to the
Agreement, cause the Company to record and file financing
statements and all supplements thereto,
and such other instruments (including, but not limited to,
continuation statements) as may be required
from time to time by the Issuer, the Bank, the Guarantor, or the
Company to be recorded or filed,
in such manner and at such places as from time to time may be
required by law in order fully to
preserve and protect the security of the Owners of the Bonds and
the Bank, and the rights of the
Trustee hereunder.
Section 4.03. Tax-Exempt Status of Bonds. The Issuer and
the Trustee each covenant to
commit or suffer no act within their control that would alter the
status or character of the Bonds, or
the interest to be paid on the Bonds, for purposes of Federal income
taxation. The provisions of this
Section shall apply to the Trustee only to the extent that the Trustee
is acting hereunder in its sole
discretion. Toward that end, the Issuer and the Trustee agree that
they will comply with and take
all actions required by the Tax Agreement.
Section 4.04. Books, Records and Accounts. The Trustee
agrees to keep proper books for
the registration of, and transfer of Ownership of, each Bond, and
proper books, records, and accounts
in which complete and correct entries shall be made of all
transactions relating to the receipt,
disbursement, investment, allocation, and application of the
proceeds received from the sale of the
Bonds, the revenues received from the Agreement, the documents
executed by the Company in
connection therewith, the Letter of Credit, the funds and accounts
created pursuant to this Indenture,
and all other moneys held by the Trustee under. The Trustee shall,
during regular business hours
and upon reasonable prior written notice, make such books,
records, and accounts available for
inspection by the Issuer, the Company, the Bank, and the
Guarantor. The Trustee shall also make
such books, records, and account available for inspection by the
Bond Owners, but subject to the
following limitations:
(a) the Bond Owner provides the Trustee with at least
five (5) Business Days' prior written
notice of the proposed inspection;
(b) such notice specifies what the Bond Owner wishes
to inspect and when the inspection
is to take place;
(c) no documents other than those executed on the
Closing Date in connection with the
issuance and sale of the Bonds or documents which have been
recorded or otherwise made a part
of a public record will be made available for inspection;
(d) the Bond Owner provides evidence satisfactory to
the Trustee of registered or beneficial
ownership of Bonds;
(e) the scope of the proposed inspection is reasonably
satisfactory to the Trustee; and
(f) no copies of documents are made of the Trustee's
records, other than a copy of the
Indenture which will be made available at the Bond Owner's
expense.
Section 4.05. Notice to Rating Agencies. The Trustee shall
provide each Rating Agency then
rating the Bonds, if the Bonds are then rated, with prompt written
notice following the effective date
of (a) the appointment of any successor Trustee, Tender Agent, or
Remarketing Agent, (b) any
change in the identity of any Bank, (c) any supplements or
amendments to this Indenture or the
Agreement, (d) the termination, expiration, extension, substitution,
or amendment of the Letter of
Credit, (e) the payment in full of all of the Bonds, or (f) any
mandatory tender of the Bonds (which
notice shall be given at least 25 days prior to the mandatory tender
date). Each notice to the Rating
Agencies hereunder shall be directed to the respective addresses
provided by the Rating Agencies.
Article V
Revenues and Funds; Letter of Credit
Section 5.01. Application of Original Proceeds of Bonds.
There is hereby created and
established with the Trustee a trust fund in the name of the Issuer
to be designated the "Grapevine
Industrial Development Corporation Industrial Development
Revenue Bonds (Trencor Jetco, Inc.
Project) Series 1994"Bond Proceeds Fund" (the "Bond Proceeds
Fund"). The Bond Proceeds Fund
shall have a Project Account and a Cost of Issuance Account. The
proceeds of the sale of the Bonds
upon initial issuance thereof shall be deposited by the Trustee on
the Closing Date in the Accounts
in the Bond Proceeds Fund as directed by a certificate of the
Company. Moneys held in the Costs
of Issuance Account shall be disbursed as set forth in such
certificate of the Company. Moneys held
in the Project Account shall be disbursed pursuant to Requisitions,
a form of which is set forth at
Section 5.11 hereof. Moneys, if any, remaining in the Bond
Proceeds Fund on the Completion Date
and any moneys in the Bond Proceeds Fund on the date the
Company prepays all amounts, payable
under Section 5.1(a) of the Agreement shall be transferred on such
date to the Available Moneys
Account of the Bond Fund to be applied as provided in Section 5.02
hereof.
Section 5.02. Bond Fund. There is hereby created by the
Issuer and ordered established with
the Trustee a trust fund to be designated the "Grapevine Industrial
Development Corporation
Industrial Development Revenue Bonds (Trencor Jetco, Inc.
Project), Series 1994"Bond Fund" (the
"Bond Fund"). Within the Bond Fund there are hereby created
by the Issuer and ordered
established with the Trustee three separate and segregated trust
accounts to be designated,
respectively, (a) the "Available Moneys Account," (b) the "Non-
Available Moneys Account", and (c)
the "Letter of Credit Account".
There shall be deposited into the Bond Fund when received:
(a) all payments specified in
Section 5.1 of the Agreement or Section 2.1(a) or (b) of the
Guaranty; (b) all moneys required to
be so deposited in connection with any redemption of Bonds; (c) all
moneys drawn by the Trustee
under the Letter of Credit to pay interest, premium, if any, principal
or the redemption price of any
Bonds; (d) any amounts directed to be transferred into the Bond
Fund pursuant to any provision of
this Indenture; and (e) all other moneys when received by the
Trustee which are required to be
deposited into the Bond Fund or which are accompanied by
directions that such moneys are to be
paid into the Bond Fund. Any amounts paid to the Trustee which
do not constitute Available
Moneys shall be held in the Non-Available Moneys Account and
shall not be commingled with any
other moneys held by the Trustee. At such time as moneys in the
Non-Available Moneys Account
shall constitute Available Moneys, they shall be transferred to the
Available Moneys Account. Any
amounts drawn under the Letter of Credit shall be held in the Letter
of Credit Account and shall
not be commingled with any other moneys held by the Trustee.
Any amounts received for deposit
in the Bond Fund which constitute Available Moneys (other than
amounts drawn under the Letter
of Credit), and any amounts deposited in the Non-Available
Moneys Account which at a later date
become Available Moneys, shall be held in the Available Moneys
Account and shall not be
commingled with any other moneys held by the Trustee.
Section 5.03. Letter of Credit; Alternate Credit Facility. (a)
Initial Letter of Credit. The
Initial Letter of Credit shall be delivered to the Trustee
simultaneously with the original issuance and
delivery of the Bonds.
(b) Alternate Credit Facility. The Company may at
any time substitute an Alternate Credit
Facility for an existing Letter of Credit, subject to the limitations
set forth in this Article V. An
Alternate Credit Facility shall be an irrevocable letter of credit,
bank bond purchase agreement, bond
insurance policy, revolving credit agreement, surety bond, or other
agreement or instrument under
which any person or entity (other than the Issuer or the Company)
undertakes to make or provide
funds to make payments of the principal and purchase price of, and
interest on, the Bonds, as and
when due, provided that the Alternate Credit Facility must be
effective as of a date on or prior to
the date of expiration of the then existing Letter of Credit and must
provide coverage in an amount
at least equal to the sum of (A) the aggregate principal amount of
Bonds (other than Pledged Bonds
or Company Bonds) at the time Outstanding, plus (B) Adequate
Interest Coverage.
Pursuant to Section 2.04 of this Indenture, if an Alternate
Credit Facility is furnished, the
Bonds shall be subject to mandatory tender unless the Company
furnishes the Trustee by the 25th
day prior to the scheduled Letter of Credit expiration or termination
date written evidence from each
Rating Agency having a rating in effect for the Bonds that the
Rating Agency has reviewed the
proposed Alternate Credit Facility and that its replacement of the
current Letter of Credit will not
by itself result in a withdrawal or reduction of the Rating
Agency"s current rating for the Bonds (a
"Maintenance of Rating"). Notwithstanding the foregoing, when
the Bonds are in the CP Rate Mode
or an Adjustable Rate Mode, an existing Letter of Credit may not be
replaced prior to the expiration
date of the then applicable Rate Period with an Alternate Credit
Facility unless either (a) the Trustee
is furnished with evidence of a Maintenance of Rating by the date
described above (in which case
the Bonds will not be subject to mandatory tender as a result
thereof) or (b) in the event evidence
of Maintenance of Rating is not received, the substitution occurs on
a date on or after which the
Bonds may be optionally redeemed pursuant to the Indenture and
the mandatory tender price
payable upon the mandatory tender of Bonds as a result of such
substitution includes a premium
equal to the redemption premium at that time payable pursuant to
the optional redemption provisions
of this Indenture.
The Company shall notify the Trustee of its intention to
deliver an Alternate Credit Facility
at least 25 days prior to the date of such delivery. Upon receipt of
such notice, the Trustee will
promptly mail a notice of the anticipated delivery of the Alternate
Credit Facility by first class mail
to the Issuer, the Remarketing Agent, and each Owner at the
Owner"s registered address.
On or prior to the delivery of any Alternate Credit Facility
to the Trustee, the Company shall
furnish to the Trustee (i) a written opinion of counsel acceptable to
the Trustee stating that delivery
of such Alternate Credit Facility to the Trustee is authorized under
the Agreement and the
Indenture, and complies with the terms hereof and thereof, and (ii)
an opinion of counsel to the
issuer of such Alternate Credit Facility to the effect that the
Alternate Credit Facility is a valid and
binding obligation of the issuer thereof, enforceable in accordance
with its terms, subject to usual
exceptions relating to bankruptcy and insolvency. In addition, if
the Alternate Credit Facility is issued
in connection with a conversion of the interest rate Mode on the
Bonds or if the Company grants
a security interest in any cash, securities, or investment type
property to the issuer or provider of the
Alternate Credit Facility, the Company must furnish the Trustee an
opinion of Bond Counsel stating
that such grant will not adversely affect the exemption of interest
on the Bonds from Federal income
taxation.
(c) Surrender of Letter of Credit. If at any time there
shall have been delivered to the
Trustee an Alternate Credit Facility, together with the other
documents and opinions required by this
Article V, then the Trustee shall accept such Alternate Credit
Facility and promptly surrender the
previously held Letter of Credit to the issuer thereof, in accordance
with the terms thereof for
cancellation. If at any time there shall cease to be any Bonds
Outstanding under this Indenture, or
the Bonds are deemed paid under Section 10.01 of this Indenture,
or if the Letter of Credit expires
in accordance with its terms, the Trustee shall promptly surrender
the Letter of Credit to the issuer
thereof, in accordance with the terms thereof, for cancellation. The
Trustee shall comply with the
procedures set forth in the Letter of Credit relating to the
termination thereof.
(d) Federal Income Tax Requirements Pertaining to
Substitutions of Letters of Credit
Upon Certain Mode Conversions. The CP Rate Mode, the Daily
Rate Mode, the Weekly Rate
Mode, and each Adjustable Rate Period of one year or less shall be
referred to as a "Short-Term
Mode" and each Adjustable Rate Period of greater than one
year"s duration shall be referred to as
a "Long-Term Mode." Upon any conversion or change from a
Short-Term Mode to a Long-Term
Mode or from a Long-Term Mode to a Short-Term Mode, if the
Company then proposes to either
(i) add a Letter of Credit where none was then in effect, (ii)
terminate a Letter of Credit then in
effect without replacing it with an Alternate Credit Facility, or (iii)
terminate an existing Letter of
Credit and substitute an Alternate Credit Facility issued by a
different Bank, the following shall apply:
(A) If the change or conversion is from a Long-Term
Mode to a Short-Term Mode,
the Bonds shall be supported by a Letter of Credit issued by an
entity with the highest generic
(i.e., without regard to "+" or "-" symbols) short-term rating
on the effective date of such
change or conversion by the Rating Agency then rating the
Bonds.
(B) If the change or conversion is from a Short-Term
Mode to an Adjustable Rate
Period of greater than or equal to one but less than three years"
duration, the Bonds shall be
supported by a Letter of Credit issued by an entity with an "A"
long-term rating (or its
equivalent) on the effective date of such change or conversion by
the Rating Agency than
rating the Bonds.
(C) If the change or conversion is from a Short-Term
Mode to an Adjustable Rate
Period of greater than or equal to three years" duration, the
Bonds shall not be supported by
any Letter of Credit for at least the duration of the Adjustable
Rate Period to which the
Bonds are being converted.
Notwithstanding any of the foregoing provisions of this
Section 5.03(d), the Bonds may or may
not be supported by a Letter of Credit in contravention of such
provisions if there is delivered to the
Trustee prior to the date of any such change or conversion an
opinion of Bond Counsel to the effect
that the deviation from the provisions of this Section 5.03(d) will
not adversely affect the exclusion
from gross income of interest on the Bonds.
Section 5.04. Letter of Credit Draws and Bond Fund
Moneys to Pay Principal, Premium, or
Interest. (a) On or before each Interest Payment Date, redemption
date, and date on which principal
shall be due and payable on the Bonds, whether at maturity or upon
acceleration, the Trustee shall
draw under the Letter of Credit (if then in effect) an amount which
shall be sufficient for the
purpose of paying the principal of, premium, if any (if the Letter of
Credit then covers premium) and
interest due and payable on the Bonds (other than Pledged Bonds
and Company Bonds) on such
date. Such drawing shall be made in a timely manner under the
terms of the Letter of Credit in
order that the Trustee may realize funds thereunder in sufficient
time to pay Owners on the payment
date as provided herein. All amounts derived by the Trustee with
respect to the Letter of Credit
shall be deposited in the Letter of Credit Account of the Bond Fund
upon receipt thereof by the
Trustee, as provided in Section 5.03. If no Letter of Credit is then
in effect, by 11:00 a.m. on any
Interest Payment Date, redemption date, acceleration date, or the
maturity date of the Bonds, as the
case may be, the Trustee shall receive from the Company pursuant
to Section 5.1(a) of the
Agreement the full amount of principal of, premium, if any, and
interest due on the Bonds on that
date.
(b) The Issuer hereby authorizes and directs the
Trustee to withdraw sufficient funds from
the Letter of Credit Account of the Bond Fund to pay the principal
of, premium, if any, and interest
on, the Bonds as the same become due and payable; and, in the
event of a default under the Letter
of Credit, or at such time as no Letter of Credit secures the Bonds,
to use all moneys then on
deposit, first in the Available Moneys Account and thereafter the
Non-Available Moneys Account,
of the Bond Fund to pay principal of, premium, if any, and interest
on, the Bonds, which
authorization and direction the Trustee hereby accepts. On the
Business Day which next succeeds
any date on which moneys are to be disbursed from the Bond Fund
pursuant to the preceding
sentence, if moneys then remain in the Bond Fund, and if the
Trustee's fees and expenses have been
paid such moneys shall be disbursed to the Bank to the extent
amounts are then owed to the Bank
pursuant to the Reimbursement Agreement. The Trustee may rely
on a certificate from the Bank
which certifies the amounts owed under the Reimbursement
Agreement at any time.
Section 5.05. Investment of Moneys. Subject to the
restrictions hereinafter set forth in this
Section 5.05 and in the Tax Agreement, any moneys held in the
Non-Available Moneys Account of
the Bond Fund and the Bond Proceeds Fund shall be invested and
reinvested by the Trustee upon
the written instructions of the Company in Qualified Investments,
maturing no later than the date
on which it is estimated that such moneys will be required to be
paid out hereunder. Moneys held
in the Available Moneys Account of the Bond Fund shall be
invested and reinvested solely in
Government Obligations, maturing no later than the date on which
such moneys will be required to
be paid out hereunder. Moneys held in the Purchase Fund and the
Letter of Credit Account and
moneys held pursuant to Section 5.06 hereof shall not be invested.
The Trustee may make any and
all such investments through its own investment department, or
through any of its affiliates or
subsidiaries. The Trustee shall be entitled to rely on all written
investment instructions or telephonic
instructions subsequently confirmed in writing provided by the
Company hereunder, and shall have
no duty to monitor the compliance thereof with the restrictions set
forth in this Section 5.05 or in
the Tax Agreement. The Trustee shall not be responsible or liable
for the performance of any such
investments or for keeping the moneys held by it hereunder fully
invested at all times other than in
accordance with the instructions of the Company. Absent the
provision of investment instructions
hereunder, the Trustee shall not make any investment of the
moneys held pursuant hereto; provided,
however, that the Trustee shall notify the Company in the event any
moneys are being held
uninvested pursuant hereto. Any obligations acquired by the
Trustee as a result of such investment
or reinvestment shall be held by or under the control of the Trustee
and shall be deemed to
constitute a part of the Fund or Account from which the moneys
used for its purchase were taken.
All investment income shall be retained in the Fund or Account to
which the investment is credited
from which such income is derived.
Section 5.06. Moneys to Be Held in Trust; Nonpresentment
of Bonds. (a) All moneys
required to be deposited with or paid to the Trustee for the account
of any Fund or Account under
any provisions of this Indenture shall be held by the Trustee in
trust, and, except for moneys
deposited with or paid to the Trustee for redemption of Bonds,
notice of the redemption for which
has been duly given, and moneys on deposit in the Rebate Fund,
shall, while held by the Trustee,
constitute part of the Trust Estate and be subject to the security
interest created hereby.
(b) In the event any Bond shall not be presented for
payment when the principal thereof
becomes due, either at maturity or otherwise, or at the date fixed for
redemption thereof, if Available
Moneys sufficient to pay such Bond shall have been deposited in
the Bond Fund, all liability of the
Issuer to the Owner thereof for the payment of such Bond shall
forthwith cease, determine, and be
completely discharged, and thereupon it shall be the duty of the
Trustee, subject to applicable escheat
laws, to hold such moneys, without liability for interest thereon, for
the benefit of the Owner of such
Bond who shall thereafter be restricted exclusively to such moneys,
for any claim of whatever nature
on his part under this Indenture or on, or with respect to, said
Bond. Such moneys shall be held in
a separate and segregated fund and shall not be invested.
(c) Any moneys so deposited with and held by the
Trustee not so applied to the payment
of Bonds for at least two years after the date on which the same
shall have become due shall upon
(i) payment of the Trustee's fees and expenses and (ii) delivery to
the Trustee of indemnification
reasonably satisfactory to it, then be paid by the Trustee to the
Bank, upon the written direction of
the Bank that amounts are due and owing the Bank under the
Reimbursement Agreement, or in any
other event, to the Company upon the written direction of the
Company. Thereafter Owners shall
be entitled to look only to the Company for payment, the Company
shall not be liable for any interest
thereon and shall not be regarded as a trustee of such moneys and
the Trustee shall have no further
responsibilities with respect to such moneys.
(d) The obligation of the Trustee under this Section to
pay any such funds to the Company
shall be subject, however, to any provisions of law applicable to the
Trustee or to such funds
providing other requirements for disposition of unclaimed property.
Section 5.07. Repayment from Indenture Funds. Any
amounts remaining in any Fund or
Account created under this Indenture, after payment or provision
for payment in full of the Bonds
in accordance with Article X hereof, the fees, charges, and
expenses of the Issuer, the Trustee, the
Tender Agent, the Remarketing Agent, and any co-trustee
appointed hereunder, and all other
amounts required to be paid hereunder or under the Agreement,
and after and to the extent that the
Company shall determine that the payment of such remaining
amounts may be made without violation
of the provisions of the Tax Agreement, shall be paid, upon the
expiration of, or upon the sooner
termination of, the terms of this Indenture, to the Bank to the extent
money shall be owed to the
Bank under the Reimbursement Agreement (as evidenced by
written notice thereof given to the
Trustee by the Bank) and, thereafter, to the Company.
Section 5.08. Tax Covenants. (a) The Issuer and the
Trustee covenant with the Owners of
the Bonds that, notwithstanding any other provision of this
Indenture or any other instrument, they
will not knowingly make any investment or other use of the
proceeds of the Bonds or any other
moneys held under this Indenture which would cause the Bonds to
be "arbitrage bonds" under
section 148 of the Code or "federally guaranteed" obligations
under section 149(b) of the Code, and
they further covenant that they will comply with all applicable
requirements of sections 103 and
141-150 of the Code (except that the Issuer and the Trustee shall be
deemed to have complied with
these requirements as long as they act on the written direction of
the Company).
(b) The Trustee shall maintain the Rebate Fund
established by Section 5.10 hereof as a
separate fund which shall be continuously held, invested, expended,
and accounted for in accordance
with the provisions of Section 5.10 hereof; provided, however that
the Rebate Fund need not be
maintained if the Company, the Issuer, and the Trustee shall have
received an opinion of Bond
Counsel to the effect that failure to maintain the Rebate Fund shall
not adversely affect the exclusion
of interest on the Bonds from the federal gross income of the
Owners thereof.
(c) In maintaining the Rebate Fund, the Trustee will
keep and retain the records described
in Section 5.10 hereof to the extent such records relate to Funds
held by the Trustee, and the Trustee
will take such further action as the Company may direct pursuant to
Section 5.10 hereof in order to
comply with the rebate requirements contained in section 148(f) of
the Code.
(d) Notwithstanding any other provision herein to the
contrary, the Trustee shall be
permitted to transfer moneys on deposit in any of the trust funds
established hereunder (other than
moneys representing remarketing proceeds or draws under the
Letter of Credit to the extent needed
to pay principal or purchase price of, premium, if any, or interest
on the Bonds) to the Rebate Fund.
Section 5.09. Custody of Funds and Accounts. Except as
otherwise expressly provided herein,
all Funds and Accounts created pursuant to this Indenture and held
by the Trustee shall be held in
trust, in the name of the Issuer, for the benefit of the Owners and,
to the extent of amounts owed
by the Company to the Bank under the Reimbursement Agreement,
the Bank. Notwithstanding the
foregoing, the Rebate Fund shall be held for the benefit of the
United States of America.
Section 5.10. Rebate Fund, Rebate. (a) There is hereby
created by the Issuer and ordered
established with the Trustee a Rebate Fund. Moneys held from
time to time in the Rebate Fund
shall not constitute part of the Trust Estate, but shall be held solely
for the purpose hereinbelow
described. Promptly after the end of each fifth Bond Year, the
Trustee shall determine whether
during the prior five Bond Years any of the funds which it held in
any of the funds or accounts under
this Indenture (other than the Rebate Fund) were invested in any
permitted investment. If the
Trustee determines that any such funds were so invested (except for
funds so invested in the Bond
Fund which produce gross earnings which amount to less than
$100,000 during each Bond Year), the
Company shall retain (at its expense) a Rebate Analyst, and the
following provisions shall apply:
Pursuant to Section 2.2(n) of the Agreement, within thirty (30) days
after each fifth Bond Year, the
Company shall cause the Rebate Analyst to compute, and deliver to
the Trustee written notice and
direction of, the amount of any transfer or deposit to the Rebate
Fund (or, if there has been a loss
in any fund or account other than the Rebate Fund, the amount of
any withdrawal from the Rebate
Fund) which is necessary to cause the aggregate amount transferred
to or otherwise deposited in such
Rebate Fund to equal the amount required to be rebated to the
United States pursuant to the
requirements of section 148 of the Code. If a deposit to the Rebate
Fund is required in accordance
with the written direction of the Rebate Analyst, the Trustee shall
accept such payment from the
Company and deposit it in the Rebate Fund for the benefit of the
Issuer. If the computations of the
Rebate Analyst show that a withdrawal may be made from the
Rebate Fund on account of a loss, the
Trustee shall, upon receipt of an approving opinion of Bond
Counsel to the effect that such
withdrawal will not adversely affect the exclusion from gross
income for federal income tax purposes
of interest on the Bonds, and in accordance with the written
directions of the Company and the
Rebate Analyst, withdraw such amount from the Rebate Fund and
pay such amount to the Company.
Records of the actions required to be taken by the Trustee by this
Section 5.10 must be retained by
the Trustee until six (6) years after the last Bond is no longer
outstanding.
(b) Not later than sixty (60) days after the fifth Bond Year
and every fifth Bond Year
thereafter, the Trustee shall, at the written direction of the Rebate
Analyst, pay to the United States
Government at least ninety percent (90%) of the amount specified
in writing by the Rebate Analyst
required to be rebated to the United States from funds on deposit in
the Rebate Fund or from funds
provided by the Company. Not later than forty-five (45) days after
the final retirement of the Bonds,
the Rebate Analyst shall specify in writing to the Trustee the
amount required to be rebated to the
United States, whereupon the Trustee shall request that the
Company deposit with the Trustee
pursuant to the Section 2.2(n) of the Agreement such amount, if
any, as is necessary to bring the
balance in the Rebate Fund to the amount required to be rebated to
the United States pursuant to
the requirements of section 148 of the Code and, upon receipt of
such funds from the Company, the
Trustee shall pay to the United States the amount specified in
writing by the Rebate Analyst to be
paid to the United States; any balance remaining in the Rebate
Fund after the final payment upon
retirement of the Bonds shall be paid to the Company unless
otherwise specified in writing by the
Rebate Analyst. The final payment by the Trustee to the United
States shall be made no later than
sixty (60) days after the final retirement of the Bonds, to the extent
funds therefor are on deposit in
the Rebate Fund at such time.
(c) The Trustee shall make information regarding the
Bonds and investments hereunder
available to the Rebate Analyst promptly following each fifth Bond
Year, shall make deposits to and
disbursements from the Rebate Fund in accordance with the
directions received from the Rebate
Analyst, shall invest moneys in the Rebate Fund as required by
Section 5.05 hereof, and shall deposit
income from such investments immediately upon receipt thereof in
the Rebate Fund.
(d) This Section 5.10 is intended to comply with the
requirements of section 148 of the Code
and the regulations promulgated thereunder. The requirements of
this Section 5.10 shall be deemed
modified and amended in the manner and to the extent necessary,
in the written opinion of Bond
Counsel delivered to the Issuer, the Company, and the Trustee, to
permit compliance with the
provisions of said section 148 applicable to the Bonds.
Section 5.11. Payments in the Project Account;
Disbursements. Proceeds of the issuance and
delivery of the Bonds shall be deposited in the Project Account as
provided in Section 5.01 hereof.
Moneys in the Project Account shall be expended on orders signed
by an Authorized Company
Representative stating with respect to each payment to be made:
(a) The requisition number;
(b) The name and address of the person, firm, or
corporation to whom payment is
due or has been made, which may include the Company;
(c) The amount to be or which has been paid;
(d) That each obligation mentioned therein has been
properly incurred, is a proper
charge against the Project Account, and has not been the basis of
any previous requisition;
(e) That each item for which payment is proposed to
be made is or was necessary
in connection with the Project;
(f) That after taking into account the costs proposed to
be paid or reimbursed in said
certificate, all of the costs paid or reimbursed out of the Project
Account are amounts which
will be chargeable to the Project's capital account or which would
be so chargeable either with
a proper election by the Company under the Code or but for a
proper election by the
Company to deduct such amount and were incurred and paid, or
are to be incurred and paid,
subsequent to January 17, 1994;
(g) That after taking into account the costs proposed to
be paid or reimbursed in said
certificate, at least 95% of the costs paid or reimbursed out of the
Bond Proceeds Fund are
for land costs or costs of property of a character subject to the
allowance for depreciation for
federal income tax purposes and were incurred and paid, or are
incurred and paid, subsequent
to January 17, 1994;
(h) That after taking into account the costs proposed to
be paid or reimbursed in said
certificate, no more than $160,000 of the costs paid or
reimbursed out of the Bond Proceeds
Fund are issuance costs within the meaning of the Code; and
(i) That no Event of Default exists under the
Agreement.
The Trustee is hereby authorized and directed to make each
disbursement required by the
provisions of the Agreement and to issue its checks therefor. The
Trustee shall keep and maintain
adequate records pertaining to the Project Account and all
disbursements therefrom, and after the
Project has been completed and a certificate of payment of all costs
is or has been filed as provided
in Section 5.11 hereof, the Trustee shall file an accounting thereof
with the Issuer, the Guarantor,
and the Company.
Section 5.12. Completion of Project. The completion of the
Project and payment or provision
made for payment of the full Cost of the Project shall be evidenced
by the filing with the Trustee of
a certificate required by the provisions of Section 3.3 of the
Agreement. Any balance remaining in
the Project Account on the Completion Date shall be used in
accordance with said Section.
Section 5.13. Transfer of Construction Fund. If the
Company should prepay all amounts
payable under Section 5.1(a) of the Agreement, any balance then
remaining in the Project Account
shall without further authorization be deposited in the Bond Fund
by the Trustee.
Section 5.14. Custody of Funds and Accounts. Except as
otherwise expressly provided herein,
all Funds and Accounts created pursuant to this Indenture and held
by the Trustee shall be held in
trust, in the name of the Issuer, for the benefit of the Owners and,
to the extent of amounts owed
by the Company to the Bank under the Reimbursement Agreement,
the Bank.
Article VI
Defaults and Remedies
Section 6.01. Events of Default. Each of the following
shall constitute, and is referred to in
this Indenture as, an "Event of Default":
(a) a default in the payment when due of interest on
any Bond;
(b) a default in the payment of principal of, or
premium, if any, on any Bond when due,
whether at maturity, upon acceleration or redemption, or otherwise;
(c) a default in the payment when due of the purchase
price of any Bond required to be
purchased pursuant to Section 2.03 or Section 2.04;
(d) the Issuer fails to perform any of its agreements in
this Indenture or the Bonds (except
a failure that results in an Event of Default under clause (a), (b), or
(c) above), the performance of
which is material to the Owners, and which failure continues after
the giving of the notice of default
and the expiration of the grace period specified in this Section;
(e) the Company or the Guarantor fails to perform any
of its agreements in the Agreement
or the Guaranty (except a failure that results in an Event of Default
under clause (a), (b), or (c) of
this Section), and the failure continues after the notice and for the
period specified in this Section;
(f) the Company or the Guarantor pursuant to or
within the meaning of any Bankruptcy
Law (as defined below) (l) commences a voluntary case, (2)
consents to the entry of an order for
relief against it in an involuntary case, (3) consents to the
appointment of a Custodian (as defined
below) for the Company or the Guarantor or any substantial part of
its property, or (4) makes a
general assignment for the benefit of its creditors;
(g) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law
that (l) is for relief against the Company or the Guarantor in an
involuntary case, (2) appoints a
Custodian for the Company or the Guarantor or any substantial part
of its property or (3) orders the
winding up or liquidation of the Company or the Guarantor, and
the decree or order remains
unstayed and in effect for 60 days;
(h) the Trustee receives notice from the Bank that a
"default" or "event of default" has
occurred and is continuing under the Reimbursement Agreement;
and
(i) the Trustee receives notice from the Bank on or
before the date or dates specified in
the Letter of Credit following a drawing on the Letter of Credit to
pay interest on the Bonds that
it will not reinstate its Letter of Credit in the amount of the said
interest drawing.
"Bankruptcy Law" means Title 11 of the United States
Code or any similar Federal or state
law for the relief of debtors. "Custodian" means any receiver,
trustee, assignee, liquidator, custodian,
or similar official under any Bankruptcy Law.
A default under clause (d) or (e) of this Section is not an
Event of Default until the Trustee
or the Owners of at least a majority in principal amount of the
Bonds then outstanding give the
Issuer, the Guarantor, and the Company a notice specifying the
default, demanding that it be
remedied, and stating that the notice is a "Notice of Default,"
and the Issuer or the Company (if the
default is under clause (d)) or the Company or the Guarantor (if the
default is under clause (e)) does
not cure the default within 60 days after receipt of the notice, or
within such longer period as the
Trustee shall agree to. The Trustee shall not unreasonably refuse to
agree to a longer cure period
if the default cannot reasonably be cured within 60 days after
receipt of the notice and the Issuer,
the Guarantor, or the Company has demonstrated to the Trustee
that it has begun within 60 days and
continued diligent efforts to cure the default and the Trustee has
received indemnification reasonably
satisfactory to it. The Issuer authorizes the Company and the
Guarantor to perform, in the name
and on behalf of the Issuer and for the purpose of preventing the
occurrence of an Event of Default,
any agreement of the Issuer in this Indenture or the Bonds.
Section 6.02. Acceleration. If an Event of Default under
clause (h) or (i) of the foregoing
Section occurs, the principal and accrued interest to the date of
acceleration on the Bonds shall
become due and payable immediately. If any other Event of Default
occurs and is continuing, the
Trustee by notice to the Issuer, the Guarantor, and the Company, or
the Owners of at least a
majority in principal amount of the Bonds then outstanding by
notice to the Issuer, the Company,
the Guarantor, and the Trustee, may declare the principal of and
accrued interest on the Bonds to
be due and payable immediately. Upon the principal of and
accrued interest on the Bonds becoming
due and payable as provided in this Section, the Trustee shall
immediately draw on the Letter of
Credit, if any, to pay the principal of and accrued interest on the
Bonds. The Trustee shall
immediately give notice of acceleration to the Owners. Interest on
the Bonds shall cease to accrue,
and the principal of and accrued and unpaid interest on the Bonds
shall, without further action,
become immediately due and payable, on the date of acceleration.
The Trustee may, and upon the request of Owners of a
majority in principal amount of the
Bonds then outstanding shall, rescind an acceleration and its
consequences if (a) all existing Events
of Default have been cured or waived, (b) the rescission would not
conflict with any judgment or
decree, (c) all payments due the Trustee and any predecessor
Trustee under Section 7.06 have been
made, and (d) when a Letter of Credit is in effect, the Bank
consents and the Letter of Credit is
reinstated up to the full amount available under it immediately
prior to such Event of Default.
Section 6.03. Other Remedies. (a) If an Event of Default
occurs and is continuing, the
Trustee may pursue any available remedy by proceeding at law or
in equity to collect the principal
of or interest on the Bonds or to enforce the performance of any
provision of the Bonds, this
Indenture, the Agreement, the Guaranty, and the Letter of Credit
including, without limitation, the
exercise of any remedy granted to it in the Agreement.
(b) The Trustee may maintain a proceeding even if it
does not possess any of the Bonds
or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any
Owner in exercising any right or remedy accruing upon an Event of
Default shall not impair the right
or remedy or constitute a waiver of or acquiescence in the Event of
Default. No remedy is exclusive
of any other remedy. All available remedies are cumulative.
(c) During any period the Bonds are secured by the
Letter of Credit and draws thereunder
have been duly honored by the Bank in accordance with the terms
and provisions of the Letter of
Credit, all remedies pursued by the Trustee upon the occurrence of
an Event of Default (other than
draws upon the Letter of Credit) shall be taken only with the prior
consent of the Bank.
Section 6.04. Waiver of Past Defaults. The Owners of a
majority in principal amount of the
Bonds then outstanding, together with the Bank, by written notice
to the Trustee, may waive an
existing Event of Default and its consequences if the Letter of
Credit is reinstated up to the full
amount available under it immediately prior to such Event of
Default. When an Event of Default
is waived, it is cured and stops continuing, but no such waiver shall
extend to any subsequent or other
Event of Default or impair any right consequent to it.
Section 6.05. Control by Majority. The Owners of a
majority in principal amount of the Bonds
then outstanding may (with the consent of the Bank) direct the
time, method, and place of
conducting any proceeding for any remedy available to the Trustee
or of exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or
this Indenture or, subject to Section 7.01, that the Trustee
determines is unduly prejudicial to the
rights of other Owners, or would involve the Trustee in personal
liability.
Section 6.06. Limitation on Suits. An Owner may not
pursue any remedy with respect to this
Indenture or the Bonds unless (a) the Owner gives the Trustee
notice stating that an Event of
Default is continuing, (b) the Owners of at least 25% in principal
amount of the Bonds then
outstanding make a written request to the Trustee to pursue the
remedy, (c) such Owner or Owners
offer to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense, and
(d) the Trustee does not comply with the request within 60 days
after receipt of the request and the
offer of indemnity.
A Owner may not use this Indenture to prejudice the rights
of another Owner or to obtain a
preference or priority over the other Owners.
Section 6.07. Rights of Owners to Receive Payment.
Notwithstanding any other provision of
this Indenture, the right of any Owner to receive payment of
principal of and interest on a Bond, on
or after the due dates expressed in the Bond, or the purchase price
of a Bond on or after the date
for its purchase as provided in the Bond, or to bring suit for the
enforcement of any such payment
on or after such dates, shall not be impaired or affected without the
consent of the Owner.
Section 6.08. Collection Suit by Trustee. If an Event of
Default under Section 6.01(a), (b)
or (c) occurs and is continuing, the Trustee may recover judgment
in its own name and as trustee of
an express trust against the Company or the Bank for the whole
amount remaining unpaid.
Section 6.09. Trustee May File Proofs of Claim. The
Trustee may 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 and the Owners allowed in any judicial proceedings relative
to the Company or the Bank,
its creditors or its property and, unless prohibited by law or
applicable regulations, may vote on behalf
of the Owners in any election of a trustee in bankruptcy or other
person performing similar functions.
Section 6.10. Priorities. If the Trustee collects any money
pursuant to this Article, it shall pay
out the money in the following order:
First: To the Trustee and the Tender Agent for amounts to
which they are entitled under
Section 7.06 hereof or Section 5.2 of the Agreement, but the
Trustee may not pay itself or the
Tender Agent from money drawn under the Letter of Credit, from
the proceeds of the remarketing
of any Bonds, or from amounts held by the Trustee pursuant to
Article X or Section 5.06(b).
Second: To Owners for amounts due and unpaid on the
Bonds for principal and interest,
ratably, without preference or priority of any kind, according to the
amounts due and payable on the
Bonds for principal and interest, respectively.
Third: To the Bank to the extent the Bank certifies to the
Trustee that the Company is
indebted to the Bank on account of draws under the Letter of Credit
or any other amounts due and
payable to the Bank under the Reimbursement Agreement.
Fourth: To the Issuer.
Fifth: To the Company.
The Trustee may fix a payment date for any payment to the
Owners in accordance with this
Section.
Section 6.11. Bank Deemed Owner of Certain Bonds.
Notwithstanding any other provision
in this Article, as long as the Letter of Credit is in effect the Bank
shall be deemed to be the owner
of all Bonds which are secured by the Letter of Credit and all
Company Bonds and all Pledged Bonds
for all purposes of this Article VI following the occurrence of an
Event of Default. In no event,
however, may the Bank direct the Trustee not to draw on the Letter
of Credit, or prevent the
Trustee from so drawing, pursuant to the provisions of this Article
VI after the occurrence of an
Event of Default under clause (h) or (i) of Section 6.01 hereof.
Section 6.12. Bank Rights. Notwithstanding any other
provision of this Article, as long as the
Letter of Credit is in effect or amounts are owed to the Bank under
the Reimbursement Agreement,
the Trustee shall take any action that it is required or permitted to
take under this Article VI (except
for the Trustee's obligations to draw under a Letter of Credit due to
an Event of Default under
clause (h) or (i) of Section 6.01, which shall be absolute and
unconditional) solely at the written
direction of the Bank, and the Trustee shall not take any such
action without such written direction.
Article VII
Trustee, Remarketing Agent, and Tender Agent
Section 7.01. Duties of Trustee. (a) Prior to the occurrence
of an Event of Default, the
Trustee shall have no liability for any action or omission in the
performance of its duties hereunder,
except in the case of negligence or willful misconduct on the part of
the Trustee. During the
existence of an Event of Default, the Trustee shall exercise its
rights and powers and use the same
degree of care and skill in their exercise as a prudent person would
exercise or use under the
circumstances in the conduct of such person"s own affairs.
(b) Except during the continuance of an Event of
Default,
(i) the Trustee shall be required to perform only those
duties that are specifically
set forth in this Indenture and no others, and
(ii) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to
the truth of the statements and the correctness of the opinions
expressed, upon certificates or
opinions furnished to the Trustee and conforming to the
requirements of this Indenture.
However, the Trustee shall examine the certificates and opinions
to determine whether they
conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for
its own negligent action, its own
negligent failure to act or its own willful misconduct, except that
(i) this paragraph does not limit the effect of
paragraph (b) of this Section,
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by
any employee of the Trustee assigned by the Trustee to
administer its corporate trust matters
(a "Responsible Officer"), unless it is proved that the Trustee
was negligent in ascertaining the
pertinent facts;
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take
in good faith in accordance with a direction received by it
pursuant to Section 6.05; and
(iv) no provision of this Indenture shall require the
Trustee to expend or risk its own
funds or otherwise incur any financial liability in the
performance of any of its duties hereunder
or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing
that repayment of such funds or adequate indemnity against such
risk or liability is not
reasonably assured to it.
(d) Every provision of this Indenture that in any way
relates to the Trustee is subject to all
the paragraphs of this Section.
(e) The Trustee may refuse to perform any duty or
exercise any right or power unless it
receives indemnity satisfactory to it against any loss, liability, or
expense, but the Trustee may not
require indemnity as a condition to declaring the principal of,
premium, if any, and interest on the
Bonds to be due immediately under Section 6.02 or to drawing on
the Letter of Credit or to making
any payment of principal or interest on the Bonds.
(f) The Trustee shall not be liable for interest on any
cash held by it.
Section 7.02. Rights of Trustee. Subject to the foregoing
Section:
(a) The Trustee may rely on any document reasonably
believed by it to be genuine and to
have been signed or presented by the proper person. The Trustee
need not investigate any fact or
matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it
may require a certificate of an
appropriate officer or officers of the Issuer or the Company or an
opinion of counsel; provided that
it may not require such a certificate as a condition to declaring the
principal of and interest on the
Bonds to be due immediately under Section 6.02 or to drawing on
the Letter of Credit or to making
any payment on the Bonds. The Trustee shall not be liable for any
action it takes or omits to take
in good faith in reliance on the certificate or opinion of counsel.
(c) The Trustee may act through agents or co-trustees
and shall not be responsible for the
misconduct or negligence of any agent or co-trustee appointed with
due care.
Section 7.03. Individual Rights of Trustee. The Trustee in
its individual or any other capacity
may become the Owner or pledgee of Bonds and may otherwise
deal with the Issuer or with the
Company or its affiliates with the same rights it would have if it
were not trustee. Any paying agent
may do the same with like rights.
Section 7.04. Trustee"s Disclaimer. The Trustee makes
no representation as to the validity
or adequacy of this Indenture or the Bonds, it shall not be
accountable for the Company"s use of
the proceeds from the Bonds paid to the Company, and it shall not
be responsible for any statement
in the Bonds other than its certificate of authentication.
Section 7.05. Notice of Defaults. (a) If an event occurs
which with the giving of notice or
lapse of time or both would be an Event of Default, and if the event
is continuing and if it is known
to the Trustee, the Trustee shall mail to each Owner and the Bank
notice of the event within 30 days
after it occurs. Except in the case of a default in payment or
purchase on any Bonds, the Trustee
may withhold the notice if and so long as a committee of its
Responsible Officers (as defined in
Section 7.01(c)) in good faith determines that withholding the
notice is in the interests of Owners.
(b) The Trustee shall not be required to take notice or
be deemed to have notice of any
default or Event of Default hereunder, or in any other document or
instrument executed in
connection with the execution and delivery of the Bonds, except an
Event of Default under Section
6.01(a), (b), (c), (h) or (i) hereof, unless the Trustee shall be
specifically notified in writing of such
default or Event of Default by the Issuer, the Tender Agent, the
Bank, the Company, or the Owners
of at least 25% in aggregate principal amount of the Bonds then
Outstanding. All notices or other
instruments required by this Indenture to be delivered to a
responsible officer of the Trustee shall
be delivered at the corporate trust office of the Trustee and, in the
absence of such notice so
delivered, the Trustee may conclusively assume there is no default
except as aforesaid.
Section 7.06. Compensation and Indemnity of Trustee. For
acting under this Indenture, the
Trustee shall be entitled to payment of compensation as outlined in
its fee schedule for its services
and reimbursement of advances, counsel fees, and other expenses
reasonably and necessarily made
or incurred by the Trustee in connection with its services under this
Indenture.
To secure the payment or reimbursement to the Trustee
provided for in this Section, the
Trustee shall have a senior claim, to which the Bonds are made
subordinate, on all money or property
held or collected by the Trustee, except that held under Article X or
otherwise held in trust to pay
principal of and interest on particular Bonds and except amounts
drawn under the Letter of Credit
or remarketing proceeds held by the Trustee or Tender Agent
hereunder.
The Company has agreed in the Agreement to indemnify
the Trustee for, and to hold it
harmless against, certain losses, liabilities, and expenses incurred
by the Trustee.
Section 7.07. Eligibility of Trustee. The Trustee shall be a
corporation organized and doing
business under the laws of the United States or any state or the
District of Columbia, authorized
under such laws to exercise corporate trust powers in the State, and
subject to supervision or
examination by United States, state or District of Columbia
authority. The initial Trustee shall be
Bank One, Texas, NA. The initial Trustee and any successor
Trustee must be an institution
acceptable to the Issuer, authorized to act as a trustee in the State,
and rated at least "Baa3" by
Moody"s Investors Service (or Moody"s Investors Service shall
have provided written evidence that
such successor Trustee is otherwise acceptable to Moody"s
Investors Service) if the Bonds are then
rated by Moody"s Investors Service, and at least "BBB-" or
"A-3" by Standard & Poor"s
Corporation (or Standard & Poor"s Corporation shall have
provided written evidence that such
successor Trustee is otherwise acceptable to Standard & Poor"s
Corporation) if the Bonds are then
rated by Standard & Poor"s Corporation, and authorized by law to
perform all the duties imposed
upon it as Trustee by this Indenture.
Section 7.08. Replacement of Trustee. The Trustee may
resign by notifying the Issuer and
the Company. The Owners of a majority in principal amount of the
Bonds then outstanding may
remove the Trustee by notifying the removed Trustee and may
appoint a successor Trustee with the
Issuer"s, the Bank"s, and the Company"s prior written consent.
If no Event of Default shall have
occurred and be continuing, the Company may cause the Trustee to
be removed, with the consent
of the Remarketing Agent and the Issuer, by giving notice to the
Issuer and the Bank requesting the
Issuer to remove and replace the Trustee. In addition, the Issuer
shall, at the direction of the
Company or on its own volition, remove the Trustee if (a) the
Trustee fails to comply with
Section 7.07 hereof, (b) the Trustee is adjudged a bankrupt or an
insolvent, (c) a receiver or other
public officer takes charge of the Trustee or its property or (d) the
Trustee otherwise becomes
incapable of acting.
If the Trustee resigns or is removed from the office of
Trustee for any reason, the Issuer, with
the prior written consent of the Bank and the Company, shall
promptly appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring
Trustee and to the Issuer. Immediately thereafter, the retiring
Trustee shall transfer all property
(including the Letter of Credit) held by it as Trustee to the
successor Trustee, the resignation or
removal of the retiring Trustee shall then (but only then) become
effective, and the successor Trustee
shall have all the rights, powers, and duties of the Trustee under
this Indenture.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or
is removed, the retiring Trustee, the Issuer, the Company, the
Bank, the Guarantor, or the Owners
of a majority in principal amount of the Bonds then outstanding
may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with the foregoing Section,
any Owner may petition any court
of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
Section 7.09. Duties of Remarketing Agent. The
Remarketing Agent will determine the
interest rate on the Bonds as provided in this Indenture as the
designee of the Issuer. The
Remarketing Agent will remarket Bonds as provided in this
Indenture as the designee of the
Company. The Remarketing Agent may for its own account or as
broker or agent for others deal
in Bonds and may do anything any other Owner may do to the
same extent as if the Remarketing
Agent were not serving as such.
Section 7.10. Eligibility of Remarketing Agent;
Replacement. The initial Remarketing Agent
shall be The First National Bank of Chicago, Chicago Illinois. Any
successor Remarketing Agent
must be an institution acceptable to the Issuer and rated at least
"Baa3" by Moody"s Investors
Service (or Moody"s Investors Service shall have provided written
evidence that such successor
Remarketing Agent is otherwise acceptable to Moody"s Investors
Service) if the Bonds are then
rated by Moody"s Investors Service, and at least "BBB-" or
"A-3" by Standard & Poor"s
Corporation (or Standard & Poor"s Corporation shall have
provided written evidence that such
successor Remarketing Agent is otherwise acceptable to Standard &
Poor"s Corporation) if the
Bonds are then rated by Standard & Poor"s Corporation, and
authorized by law to perform all the
duties imposed upon it by this Indenture.
A Remarketing Agent may at any time resign from its
duties under this Indenture by giving at
least 30 days" written notice to the Issuer, the Company, the
Guarantor, the Bank, the Tender
Agent, and the Trustee. The Trustee shall mail a copy of such
notice by certified mail to each of the
Bond Owners. A Remarketing Agent may be removed at any time
at the direction of the Issuer and
the Company by an instrument signed by the Issuer and the
Company and filed at least 30 days prior
to such removal with the Remarketing Agent, the Bank, and the
Trustee. No removal or resignation
hereunder shall become effective prior to the acceptance of
appointment of a successor Remarketing
Agent hereunder.
While the Bonds are in a Book-Entry System, the
Remarketing Agent shall serve as the
Participant on behalf of all of the Beneficial Owners of the Bonds.
Section 7.11. Tender Agent. (a) During any period the
Bonds shall not be in a Book-Entry
System, the Company shall appoint a Tender Agent for the Bonds,
who shall be satisfactory to the
Issuer, the Trustee, and the Remarketing Agent and who, upon
acceptance of its duties, will perform
the obligations of the Tender Agent set forth in this Indenture. Any
Tender Agent must be an
institution rated at least "Baa3" by Moody"s Investors Service
(or Moody"s Investors Service shall
have provided written evidence that such successor Tender Agent is
otherwise acceptable to Moody"s
Investors Service) if the Bonds are then rated by Moody"s
Investors Service, and at least "BBB-" or
"A-3" by Standard & Poor"s Corporation (or Standard &
Poor"s Corporation shall have provided
written evidence that such successor Tender Agent is otherwise
acceptable to Standard & Poor"s
Corporation) if the Bonds are then rated by Standard & Poor"s
Corporation, and authorized by law
to perform all the duties imposed upon it as Tender Agent by this
Indenture. The initial Tender
Agent and any successor Tender Agent shall accept its duties
hereunder by a written certificate or
tender agent agreement delivered to the Trustee, which certificate
or agreement shall designate the
Principal Office of the Tender Agent.
(b) The Tender Agent may at any time resign by
giving thirty (30) days" notice to the
Issuer, the Trustee, the Company, the Bank, and the Remarketing
Agent. Promptly upon the receipt
of such notice, the Trustee shall mail copies thereof to each
registered Owner of the Bonds. In no
event, however, shall any resignation of the Tender Agent take
effect until a successor Tender Agent
shall have been appointed.
(c) The Tender Agent may be removed at any time by
an instrument in writing delivered
to the Trustee and the Tender Agent by the Company, with the
prior written approval of the Bank
and the Issuer. In no event, however, shall any removal of the
Tender Agent take effect until a
successor Tender Agent shall have been appointed.
(d) Written notice of the appointment of a Tender
Agent shall immediately be given by the
Trustee to the Issuer and to the Owners. If no successor to a
Tender Agent has accepted
appointment in the manner provided above within 30 days after the
Tender Agent has given notice
of its resignation as provided above, the Trustee shall serve as
Tender Agent or shall appoint an
agent to act in its stead.
Section 7.12. Successor Trustee, Remarketing Agent, or
Tender Agent by Merger. If the
Trustee, the Tender Agent, or the Remarketing Agent consolidates
with, merges, or converts into,
or transfers all or substantially all its assets (or, in the case of a
bank or trust corporation, its
corporate trust assets) to, another corporation, the resulting,
surviving, or transferee corporation
without any further act shall, if otherwise eligible to serve
hereunder, be the successor Trustee,
Tender Agent, or Remarketing Agent.
Article VIII
Supplemental Indentures
Section 8.01. Without Consent of Owners. The Issuer and
the Trustee may amend or
supplement this Indenture or the Bonds without notice to or consent
of any Owner:
(a) to cure any ambiguity, inconsistency, or formal
defect or omission;
(b) to grant to the Trustee for the benefit of the
Owners additional rights, remedies,
powers, or authority;
(c) to subject to this Indenture additional collateral or
to add other agreements of the
Issuer;
(d) to modify this Indenture or the Bonds to permit
qualification under the Trust Indenture
Act of 1939 or any similar Federal statute at the time in effect, or to
permit the qualification of the
Bonds for sale under the securities laws of any state of the United
States;
(e) to evidence the succession of a new Trustee or the
appointment by the Trustee or the
Issuer of a co-trustee;
(f) to make any change that does not materially
adversely affect the rights of any Owner;
(g) to facilitate the use of the Book-Entry System; and
(h) to facilitate the substitution of an Alternate Credit
Facility which is not an irrevocable
letter of credit, but without modifying the payment terms of the
Bonds.
Section 8.02. With Consent of Owners. If an amendment
of or supplement to this Indenture
or the Bonds without any consent of Owners is not permitted by the
preceding Section, the Issuer
and the Trustee may enter into such amendment or supplement
with the consent of the Owners of
at least a majority in principal amount of the Bonds then
Outstanding. However, without the consent
of each Owner affected, no amendment or supplement may (a)
extend the maturity of the principal
of, or the due date of the payment of interest on, any Bond, (b)
reduce the principal amount of, or
rate of interest on, any Bond, (c) effect a privilege or priority of any
Bond or Bonds over any other
Bond or Bonds, (d) reduce the percentage of the principal amount
the Bonds required for consent
to such amendment or supplement, (e) impair the excludability
from gross income for federal income
tax purposes of interest on any Bond, (f) eliminate the Owners"
rights to demand that their Bonds
be purchased, or any mandatory tender or redemption of the Bonds,
(g) extend the due date for the
purchase of Bonds put by the Owners thereof or call for mandatory
tender or redemption or reduce
the purchase or redemption price of such Bonds, (h) create a lien
ranking prior to or on a parity with
the lien of this Indenture on the property described in the Granting
Clause of this Indenture not
otherwise provided for herein, or (i) deprive any Owner of the lien
created by this Indenture on such
property. In addition, if moneys or Governmental Obligations have
been deposited or set aside with
the Trustee pursuant to Article X for the payment of the Bonds and
the Bonds shall not have in fact
been actually paid in full, no amendment to the provisions of that
Article shall be made without the
consent of the Owners of each of those Bonds affected.
Section 8.03. Effect of Consents. After an amendment or
supplement becomes effective, it
will bind every Owner unless it makes a change described in any of
the lettered clauses of the
preceding Section. In that case, the amendment or supplement will
bind each Owner who consented
to it and each subsequent Owner of a Bond or portion of a Bond
evidencing the same debt as the
consenting Owner"s Bond.
Section 8.04. Notation on or Exchange of Bonds. If an
amendment or supplement changes
the terms of a Bond, the Trustee may require the Owner to deliver
it to the Trustee. The Trustee
may place an appropriate notation on the Bond about the changed
terms and return it to the Owner.
Alternatively, if the Trustee, the Issuer, and the Company
determine, the Issuer in exchange for the
Bond will issue and the Trustee will authenticate a new Bond that
reflects the changed terms.
Section 8.05. Execution and Delivery by Trustee of
Amendments and Supplements. The
Trustee shall execute and deliver any amendment or supplement to
the Indenture or the Bonds
authorized by this Article if the amendment or supplement does not
adversely affect the rights, duties,
liabilities, or immunities of the Trustee. In signing such
amendment or supplement, the Trustee will
be entitled to receive and (subject to Section 7.01) will be fully
protected in relying on an opinion
of Bond Counsel stating that such amendment or supplement is
authorized by this Indenture.
Section 8.06. Company and Bank Consent Required. An
amendment or supplement to this
Indenture or the Bonds shall not become effective unless the
Company and the Bank shall deliver
to the Trustee their written consents to the amendment or
supplement. The Company shall be
deemed to have consented if it shall fail to deliver a written
objection to the Trustee within 30 days
after receipt by the Company of a proposed form of an amendment
or supplement.
Section 8.07. Notice to Owners. The Trustee shall cause
notice of the execution of each
supplement or amendment to this Indenture or the Agreement to be
mailed to the Owners. The
notice shall, at the option of the Trustee, either (a) briefly state the
nature of the amendment or
supplement and that copies of it are on file with the Trustee for
inspection by Owners or (b) enclose
a copy of such amendment or supplement.
Article IX
Amendment of Agreement, Guaranty, or Letter of Credit
Section 9.01. Without Consent of Owners. The Issuer may
enter into, and the Trustee may
consent to, any amendment of or supplement to the Agreement and
the Trustee may enter into any
amendment of or supplement to the Guaranty, without notice to or
consent of any Owner, if the
amendment or supplement is (a) required or permitted by the
provisions of the Agreement, the
Guaranty, or this Indenture, (b) to cure any ambiguity,
inconsistency, or formal defect or omission,
(c) in connection with any authorized amendment of or supplement
to this Indenture, (d) to make
any change that does not materially adversely affect the rights of
any Owner, (e) to amend the
description of the Project, provided the Trustee is provided an
opinion of Bond Counsel to the effect
that such amendment will not adversely affect the excludability
from gross income of interest on the
Bonds for federal income tax purposes, or (f) to facilitate the
substitution of an Alternate Credit
Facility which is not an irrevocable letter of credit, but without
modifying the payment terms of the
Bonds.
Section 9.02. With Consent of Owners. If an amendment
of or supplement to the Agreement
or the Guaranty without any consent of Owners is not permitted by
the foregoing Section, the Issuer
may enter into, and the Trustee may consent to, such amendment or
supplement (or in the case of
the Guaranty, the Trustee may enter into such amendment or
supplement) with the consent of the
Owners of at least a majority in principal amount of the Bonds then
outstanding. However, without
the consent of each Owner affected, no amendment or supplement
may result in anything described
in the lettered clauses of Section 8.02.
Section 9.03. Bank Consent Required. An amendment or
supplement to the Agreement or
the Guaranty authorized by this Article shall not become effective
unless the Bank delivers to the
Trustee its written consent to the amendment or supplement.
Section 9.04. Modifications of Letter of Credit. No Letter
of Credit may be modified without
the prior written consent of 100% of the Owners of the Bonds,
except to (a) correct any formal
defects therein, (b) effect transfers thereof, (c) effect extensions
thereof, (d) effect reductions and
reinstatements thereof in accordance with the terms of the Letter of
Credit, (e) increase the stated
amount thereof, (f) effect any change which does not have a
material adverse effect upon the
interests of the Owners, or (g) any amendment effective from and
after a mandatory tender date
hereunder. Pursuant to this Indenture however, the Company has
the right to obtain an Alternate
Credit Facility, subject to the requirements set forth therein without
the consent of the Owners.
Section 9.05. Release of Guaranty. In connection with an
assignment described in Section 8.1
of the Agreement, the Trustee shall release the Guarantor from its
obligations under the Guaranty
if so directed in writing by the Company and the Guarantor. In
such event, the Bonds shall be
subject to mandatory tender pursuant to Section 2.04(e) hereof and
the Trustee shall give the notice
to Owners described in said Section 2.04. No consent of the
Owners or the Bank and no notice to
the Owners or the Bank other than that referenced above shall be
required to be obtained or given
in connection with such release. Notwithstanding the foregoing, no
such release shall then be
permitted if (a) the Bonds are then in the CP Rate Mode, or (b) if
the Bonds are then in an
Adjustable Rate Period of greater than one year's duration, unless
the release occurs on a date on
which the Bonds may be optionally redeemed pursuant to the
Indenture and the mandatory tender
price payable upon the mandatory tender of Bonds as a result of
such release includes a premium
equal to the redemption premium at that time payable pursuant to
the optional redemption provisions
of the Indenture.
Article X
Discharge of Indenture
Section 10.01. Bonds Deemed Paid; Discharge of
Indenture. Any Bond will be deemed paid
for all purposes of this Indenture when (a) payment of the principal
of and interest on the Bond to
the due date of such principal and interest (whether at maturity,
upon redemption or otherwise)
either (i) has been made in accordance with the terms of the Bond
or (ii) has been provided for by
depositing with the Trustee Available Moneys sufficient to make
such payment and/or Government
Obligations (purchased with Available Moneys) maturing as to
principal and interest in such amounts
and at such times as will, in the opinion of an independent certified
pubic accountant delivered to
the Trustee, ensure the availability of sufficient moneys to make
such payment, and (b) all
compensation and expenses of the Trustee pertaining to each Bond
in respect of which such deposit
is made have been paid or provided for to the Trustee"s
satisfaction. When a Bond is deemed paid,
it will no longer be secured by or entitled to the benefits of this
Indenture or be an obligation of the
Issuer, except for payment from moneys or Government
Obligations under clause (a)(ii) above.
Notwithstanding the foregoing, no deposit under clause
(a)(ii) of the first paragraph of this
Section shall be deemed a payment of a Bond until the Company or
the Guarantor has furnished the
Trustee an opinion of Bond Counsel stating that the deposit of such
cash or Government Obligations
will not cause the Bonds, or any portion thereof, to become
"arbitrage bonds" within the meaning
of section 148 of the Code and (A) notice of redemption of the
Bond is given in accordance with this
Indenture or, if the Bond is not to be redeemed or paid within the
next 60 days, until the Company
has given the Trustee, in form satisfactory to the Trustee,
irrevocable instructions (1) to notify, as
soon as practicable, the Owner of the Bond, in accordance with this
Indenture, that the deposit
required by clause (a)(ii) above has been made with the Trustee and
that the Bond is deemed to be
paid under this Article and stating the maturity or redemption date
upon which moneys are to be
available for the payment of the principal of the Bond, and, if the
Bond is to be redeemed rather
than paid at maturity, (2) to give notice of redemption as provided
herein for such Bond, or (B) the
maturity of the Bond. In addition, notwithstanding the foregoing,
if the Bonds are then in the Daily
Rate Mode or the Weekly Rate Mode, no deposit under clause
(a)(ii) of the first paragraph of this
Section shall be deemed a payment of a Bond unless the Trustee
receives written evidence from the
Rating Agency that such deposit would not result in a reduction or
withdrawal of the ratings then
maintained on the Bonds.
When all outstanding Bonds are deemed paid under the
foregoing provision of this Section,
the Letter of Credit has been surrendered to the Bank for
cancellation, and all amounts due and
payable to the Bank under the Reimbursement Agreement have
been paid in full, the Trustee will
upon request acknowledge the discharge of the lien of this
Indenture as to the Bonds, provided,
however that the obligations under Article II in respect of the
optional tender rights of the Owners
of the Bonds and the transfer, exchange, registration, discharge
from registration, and replacement
of Bonds shall survive the discharge of the lien of the Indenture.
The Trustee shall provide each Rating Agency then rating
the Bonds with at least 10 days prior
notice of any advance defeasance of the Bonds, together with a copy
of the opinion of independent
certified public accountant described in the first paragraph of this
Section and any opinion of counsel
delivered if Available Moneys described in clause (c) of the
definition thereof are used to effect the
defeasance. The Trustee shall notify each Owner of the advance
defeasance of the Bonds, within 10
days after such defeasance.
Section 10.02. Application of Trust Money. The Trustee
shall hold in trust moneys or
Governmental Obligations deposited with it pursuant to the
preceding Section and shall apply the
deposited money and the money from the Governmental
Obligations in accordance with this
Indenture only to the payment of principal of and interest on the
Bonds and to the payment of the
purchase price of Bonds demanded to be purchased by Owners.
Section 10.03. Repayment to Bank and Company. At such
time as no Bonds remain unpaid
within the meaning of Section 10.01, the Trustee shall promptly
pay first to the Bank (to the extent
the Bank certifies to the Trustee that the Company is indebted to it
for amounts owed under the
Reimbursement Agreement) and then to the Company upon request
(i) any excess money or
securities held by the Trustee at any time under this Article and (ii)
any money held by the Trustee
under any provision of this Indenture for the payment of principal
or interest or for the purchase of
Bonds that remains unclaimed for two years.
Article XI
Miscellaneous
Section 11.01. Owners" Consent. Any consent or other
instrument required by this Indenture
to be signed by Owners may be in any number of counterpart
documents and may be signed by a
Owner or by the Owner"s agent appointed in writing. Proof of the
execution of such instrument or
of the instrument appointing an agent and of the Ownership of
Bonds, if made in the following
manner, shall be conclusive for any purposes of this Indenture with
regard to any action taken by the
Trustee or the Tender Agent under the instrument:
(a) The fact and date of a person"s signing an
instrument may be proved by the certificate
of any officer in any jurisdiction who by law has power to take
acknowledgments within that
jurisdiction that the person signing the writing acknowledged
before the officer the execution of the
writing, or by an affidavit of any witness to the signing.
(b) The fact of Ownership of Bonds, the amount or
amounts, numbers and other
identification of such Bonds and the date of holding shall be proved
by the registration books kept
pursuant to this Indenture.
In determining whether the Owners of the required
principal amount of Bonds outstanding
have taken any action under this Indenture (and solely for such
purposes), Bonds owned by the
Company or any person controlling, controlled by, or under
common control with the Company shall
be disregarded and deemed not to be outstanding, unless the
Company shall be the Owner of 100%
of the Bonds. In determining whether the Trustee and the Tender
Agent shall be protected in
relying on any such action, only Bonds which the Trustee knows to
be so owned shall be disregarded.
Any consent or other instrument shall be irrevocable and
shall bind any subsequent Owner of
such Bond or any Bond delivered in substitution therefor.
Section 11.02. Limitation of Rights. Nothing expressed or
implied in this Indenture or the
Bonds shall give any person other than the Trustee, the Tender
Agent, the Issuer, the Bank, the
Company, the Guarantor, the Remarketing Agent, and the Owners
any right, remedy, or claim under
or with respect to this Indenture.
Section 11.03. No Personal Liability of Issuer. No
covenant, agreement, or obligation
contained herein or in the Bonds shall be deemed to be a covenant,
agreement, or obligation of any
present or future officer, of the employee or agent of the Issuer in
such person"s individual capacity,
and neither the officials or officers of the Issuer executing this
Indenture or the Bonds shall be liable
personally on the Bonds or under this Indenture or be subject to any
personal liability of
accountability by reason of the issuance, execution or delivery of
the Bonds. No officer, employee,
or agent of the Issuer shall incur any personal liability with respect
to any other action taken, or not
taken, by such person pursuant to this Indenture, the Agreement, or
the Act provided such person
does not act with malicious intent.
Section 11.04. Severability. If any provisions of this
Indenture shall be held or deemed to be
or shall, in fact, be invalid, inoperative, or unenforceable, the same
shall not affect any other
provision or provisions herein contained or render the same invalid,
inoperative, or unenforceable
to any extent whatever.
Section 11.05. Notices. Except as otherwise provided in
this Indenture, all notices, hereunder
shall be sufficiently given and shall be deemed given when
personally delivered or mailed by certified
mail, postage prepaid, or when sent by tested telecopy (receipt
confirmed by telephone) or telegram,
addressed as follows:
If to the Issuer:
Grapevine Industrial Development Corporation
c/o City of Grapevine
413 South Main Street
Grapevine, Texas 76051
Attention: City Manager
If to the Trustee:
Bank One, Texas, NA
P.O. Box 2604
500 Throckmorton
Fort Worth, Texas 76113-2604
Attention: Corporate Trust Department
If to the Tender Agent:
At its address specified in the certificate delivered by the Tender
Agent in which it assumes
its duties hereunder.
If to the Company:
Trencor Jetco, Inc.
P.O. box 2447
Grapevine, Texas 76099-2447
Attention: George Stuard
If to the Guarantor:
Astec Industries, Inc.
4101 Jerome Avenue
Chattanooga, Tennessee 37407
Attention: Corporate Comptroller
If to the Bank:
The First National Bank of Chicago
One First National Plaza
Suite 0086
Chicago, Illinois 60670-0086
Attention: John D. Runger
If to the Remarketing Agent:
The First National Bank of Chicago
One First National Plaza
Suite 0463
Chicago, Illinois 60670
Attention: Municipal Bond Department/Short-Term
Trading
If to the Owner of any Bond:
The address of such Owner as reflected on the registration books
maintained by the Trustee.
If to the Rating Agency:
Moody"s Investors Service
99 Church Street
New York, New York 10007
Attention: Structured Finance
Standard & Poor"s Corporation
25 Broadway
New York, New York 10004
Attention:
A duplicate copy of each notice given hereunder by either party
hereto shall be given to the Bank,
the Tender Agent, the Remarketing Agent, the Guarantor, and the
Company. Any person or entity
listed above may, by notice given hereunder, designate any further
or different addresses to which
subsequent notices, certificates, or other communications shall be
sent.
Section 11.06. Payments or Performance Due on Other
Than Business Day. If the last day
for making any payment or taking any action under this Indenture
falls on a day other than a
Business Day, such payment may be made, or such action may be
taken, on the next succeeding
Business Day, and, if so made or taken, shall have the same effect
as if made or taken on the date
required by this Indenture.
Section 11.07. Execution of Counterparts. This Indenture
may be executed in several
counterparts, each of which shall be an original and all of which
shall constitute but one and the same
instrument.
Section 11.08. Applicable Law. This Indenture shall be
governed by and construed in
accordance with the laws of the State.
Section 11.09. Notice to Texas Department of Commerce
of Certain Matters. Upon the
occurrence of an event of default as a result of the Company's
failure to make a payment under the
Agreement, or upon the occurrence of a Determination of
Taxability, or upon notice by the Internal
Revenue Service that interest on the Bonds is or may be subject to
federal income taxation, the
Trustee promptly upon becoming aware thereof shall give notice to
the Texas Department of
Commerce at Box 12728, Capitol Station, Austin, Texas 78711,
Attention of the Executive Director.
Section 11.10. Exceptions to Requirements of Bank
Consent. Notwithstanding any provision
of this Indenture to the contrary, no consent of or notice to the
Bank shall be required under any
provision of this Indenture nor shall the Bank have any right to
receive notice of, consent to, direct
or control any actions, restrictions, rights, remedies, waivers, or
accelerations pursuant to any
provision of this Indenture during any time which:
(a) the Bank has wrongfully failed to honor a properly
presented draw made under
and in compliance with the terms of the Letter of Credit;
(b) the Letter of Credit for any reason ceases to be
valid and binding on the Bank
or is declared to be null and void, or the validity or enforceability
of any provision of the
Letter of Credit is denied by the Bank or any governmental
agency or authority, or the Bank
is denying further liability or obligation under the Letter of
Credit, in all of the above cases
contrary to the terms of the Letter of Credit;
(c) a petition has been filed and is pending against the
Bank under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation law
of any jurisdiction, whether now or hereafter in effect, and has
not been dismissed within 30
days after such filing;
(d) the Bank has filed a petition, which is pending,
under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt,
dissolution, or liquidation law
of any jurisdiction, whether now or hereafter in effect, or has
consented to the filing of any
petition against it under such law; or
(e) the Bank is dissolved or confiscated by action of
government due to war or peace
time emergency or the United States government declares a
moratorium on the Bank's
activities.
In Witness Whereof, the Issuer has caused these presents to
be signed in its name and on
its behalf by its duly authorized officers, and the Trustee, to
evidence its acceptance of the trusts
hereby created, has caused these presents to be signed in its name
and on its behalf by its duly
authorized officers, all as of the day and year first above written.
GRAPEVINE INDUSTRIAL
DEVELOPMENT CORPORATION
Attest: By:
Secretary President
BANK ONE, TEXAS, NA
Attest: /s/
By: /s/
Authorized Officer Authorized Officer
Exhibit A
to Indenture of Trust
Neither the State of Texas, the City of Grapevine, Texas, nor any
political corporation, subdivision, or agency thereof shall be obligated to
pay the principal of, premium, if any, or interest on this Bond and neither
the faith and credit nor the taxing power of the State of Texas, the City of
Grapevine, Texas, nor any political corporation, subdivision,
or agency thereof nor any assets of the Grapevine Industrial
Development Corporation, other than those specifically pledged therefor, are
pledged to the payment of the principal of, premium, if any, or interest on
the Bond.
[FACE OF BOND]
Grapevine Industrial Development Corporation
Industrial Development Revenue Bonds, Series 1994
(Trencor Jetco, Inc. Project)
DATED DATE: MATURITY DATE: CUSIP
NUMBER:
April 1, 1994
Registered Owner:
Principal Amount:
The Grapevine Industrial Development Corporation, a
corporation acting on behalf of the City
of Grapevine (the "Unit"), State of Texas (the "State"), hereby
promises to pay to the order of the
Registered Owner specified above, or registered assigns, the
Principal Amount specified above on
the Maturity Date specified above (or earlier as hereinafter
provided), and to pay interest on the
Principal Amount hereof from the date specified in the Indenture
(hereinafter defined) at the rates
per annum and on the dates set forth herein (but only out of the
revenues of the Issuer derived from
the Agreement, as hereinafter defined, or other moneys pledged
therefor) and in accordance with
the provisions of the Development Corporation Act of 1979, Article
5190.6 Tex. Rev. Civ. Stat. Ann.,
as amended (the "Act").
THIS BOND, TOGETHER WITH PREMIUM, IF ANY,
AND THE INTEREST HEREON, IS
A SPECIAL AND LIMITED OBLIGATION OF THE ISSUER
AND NEITHER THE ISSUER, THE
UNIT, NOR THE STATE OF TEXAS NOR ANY POLITICAL
SUBDIVISION THEREOF,
INCLUDING THE ISSUER AND THE UNIT, SHALL BE
OBLIGATED TO PAY THIS BOND, THE
PREMIUM, IF ANY, OR THE INTEREST HEREON OR OTHER
COSTS INCIDENT THERETO
EXCEPT FROM FUNDS PLEDGED UNDER THE INDENTURE.
NEITHER THE FAITH AND
CREDIT NOR THE TAXING POWER OF THE STATE, THE
UNIT, OR ANY POLITICAL
CORPORATION, SUBDIVISION, AGENCY, OR
INSTRUMENTALITY THEREOF IS PLEDGED
TO THE PAYMENT OF THE PRINCIPAL, PREMIUM, IF ANY,
OR INTEREST ON THIS BOND.
The principal of, premium, if any, and interest on this Bond
are payable in lawful money of the
United States of America. The principal of and premium, if any,
payable upon maturity or earlier
redemption of this Bond are payable when due upon the
presentation and surrender hereof at the
corporate trust office of Bank One, Texas, NA, in Fort Worth,
Texas, as trustee (the "Trustee"), or
any successor trustee. Each payment of interest on this Bond shall
be payable to the Registered
Owner hereof as shown on the registration books kept by the
Trustee at the close of business on the
Business Day (but, during an Adjustable Rate Period, the fifteenth
day of the calendar month) next
preceding the date on which such interest becomes due and payable
(herein, a "Record Date").
Interest on this Bond shall be payable to the Registered Owner
hereof by check mailed by first class
mail on the respective Interest Payment Dates (as hereinafter
defined) to the address of such
Registered Owner as shown on the books kept by the Trustee at the
close of business on the relevant
Record Date or such other address as is furnished to the Trustee (in
form satisfactory to the Trustee)
by such Owner prior to such Record Date. Registered Owners of
$1,000,000 or more in aggregate
principal amount of Bonds shall be entitled to receive interest
payments by wire transfer by providing
written wire instructions to the Trustee before the Record Date.
** [Reference is hereby made to the further provisions of this
Bond set forth on the reverse side
hereof, which further provisions shall for all purposes have the
same effect as if fully set forth in the
text of this Bond written above.*]
** [This Bond shall not be valid or become obligatory for any
purpose or be entitled to any
security or benefit under the Indenture until the Certificate of
Authentication hereon shall have been
signed by the Trustee or the Tender Agent.]
In Witness Whereof, the Issuer has caused this Bond to be
executed in its name by the
manual or facsimile signature of its President or Vice President and
attested with the manual or
facsimile signature of the Secretary of Assistant Secretary all as of
the date first above written.
[Seal]
Attest:/s/
By:/s/
By Authorized Officer Authorized Officer
**Certificate of Authentication
This Bond is hereby authenticated as required by the
within-referenced Indenture of Trust.
Authorized Officer of Trustee or Tender Agent
Date of Authentication:
[OFFICE OF THE COMPTROLLER
OF PUBLIC ACCOUNTS REGISTER NO.
OF THE STATE OF TEXAS /S/
I hereby certify that there is on file and of record in my
office a certificate of the Attorney
General of the State of Texas to the effect that this Bond has been
examined by him as required by
law, that he finds that it has been issued in conformity with the
Constitution and laws of the State
of Texas, and that it is a valid and binding obligation of the
Grapevine Industrial Development
Corporation; and that this Bond has this day been registered by me.
Witness my hand and seal of office at Austin, Texas,
/S/
Comptroller of Public Accounts of the
[SEAL] State of Texas]
**Not utilized for Initial Bond
**[(Reverse of Bond)*]
This Bond is authorized and issued under and pursuant to
authority conferred by the Act,
certain proceedings of the Board of Directors of the Issuer and the
Indenture of Trust dated as of
April 1, 1994 (the "Indenture") between the Issuer and the
Trustee. Certain terms used and not
defined in this Bond are defined in the Indenture. This Bond is one
of the Issuer"s duly authorized
Industrial Development Revenue Bonds, Series 1994 (Trencor
Jetco, Inc. Project) (the "Bonds"),
which Bonds have been issued in the aggregate principal amount of
$8,000,000 to provide funds to
make a loan to Trencor Jetco, Inc., a Texas corporation (the
"Company") pursuant to a Loan
Agreement dated as of April 1, 1994 (the "Agreement") between
the Issuer and the Company. The
proceeds of the Bonds will be used to finance a portion of the costs
of acquisition, construction and
equipping of certain facilities (the "Project") located in the Unit.
As security for the payment of the
Bonds, the Company has caused to be delivered to the Trustee a
letter of credit (the "Initial Letter
of Credit") of The First National Bank of Chicago (the "Bank"),
against which the Trustee shall be
entitled to draw, in accordance with the terms thereof, to pay when
and as due, the principal or
purchase price of, and interest on, the Bonds during the term of the
Initial Letter of Credit. Under
certain conditions, the Company may cause to be delivered an
Alternate Credit Facility (an
"Alternate Credit Facility") in substitution for the Letter of
Credit then in effect without the consent
of the Owners of the Bonds. The Initial Letter of Credit, together
with any Alternate Credit Facility,
is hereinafter referred to as the "Letter of Credit". The Bonds are
guaranteed by Astec Industries,
Inc., a Tennessee corporation (the "Guarantor"), the owner of 100%
of the outstanding stock of the
Company, pursuant to a Guaranty Agreement dated April 1, 1994,
between the Guarantor and the
Trustee. The Bonds are not secured by any lien on or security
interest in the Project.
The Bonds are issued under and entitled to the benefits of
the Indenture. Pursuant to the
Indenture, the Issuer has pledged and assigned to the Trustee the
Trust Estate as security for its
obligation to pay the principal or purchase price of, premium, if
any, and interest on the Bonds.
Reference is made to the Indenture for a description of the Trust
Estate and for the provisions
thereof with respect to the nature and extent of the security granted
by the Issuer to the Trustee
thereunder, the rights, duties, and obligations of the Issuer and the
Trustee, the rights of the
registered Owners of the Bonds, and the terms on which the Bonds
are issued and secured, to all of
which provisions, and to all other provisions of the Indenture, the
Registered Owner hereof by the
acceptance of this Bond assents.
I. Weekly Rate Provisions
Optional Tender. During a Weekly Rate Period, this Bond
or any portion thereof in
Authorized Denominations (except during any period this Bond is a
Pledged Bond or Company
Bond) shall be purchased on the demand of the registered Owner
thereof on any Business Day at
a price equal to 100% of the principal amount thereof, plus accrued
and unpaid interest thereon to
the date of purchase, upon delivery to the tender agent duly
appointed in accordance with the
provisions of the Indenture (together with any successor tender
agent, the "Tender Agent") at its
Principal Office, on any Business Day, of (a) a written irrevocable
notice setting forth the information
required by the Indenture, including the date on which such Bond,
or the portion thereof being
tendered for purchase, shall be so purchased, which date shall be a
Business Day not prior to the
seventh day next succeeding the date of the delivery of such notice
to the Tender Agent, together
with (b) this Bond, as provided in the Indenture; provided, that if
the registered Owner of the
tendered Bond is an open-ended diversified management
investment company (registered under the
Investment Company Act of 1940, as amended), the delivery
required under this clause (b) need not
be made until the date such Bond is to be purchased from such
registered Owner as provided in the
Indenture. Notwithstanding the foregoing, if the Bonds, are held in
a Book-Entry System, separate
procedures for the optional tender of Bonds are set forth in the
Indenture.
Interest. During any period this Bond is in the Weekly Rate
Mode, interest on this Bond shall
be paid on the first Business Day of each month next succeeding
the Closing Date (if applicable),
each Weekly Rate Conversion Date, and on the Maturity Date
specified above or such other date
as the outstanding principal amount of the Bonds is paid in full if
the Bonds are in the Weekly Rate
Mode at such time (each, a "Weekly Rate Interest Payment
Date"), and shall be computed on the
basis of a 365- or 366-day year, for the actual number of days
elapsed. Interest on this Bond for each
Weekly Interest Period shall be calculated as provided below and in
the Indenture. During each
Weekly Rate Period, "Weekly Interest Period" shall mean the
period from and including the first day
of the Weekly Rate Period through and including the following
Tuesday, and after the first Weekly
Interest Period of each Weekly Rate Period, from and including
Wednesday of each week through
and including the following Tuesday, whether or not such days are
Business Days, provided, however,
the initial Weekly Interest Period shall commence on the Closing
Date and end on the following
Tuesday.
On Tuesday (unless Tuesday is not a Business Day, then on
the next preceding Monday; unless
Monday and Tuesday are not Business Days, then on the next
subsequent Wednesday, whether or
not a Business Day) of each calendar week during a Weekly Rate
Period, with respect to each
Weekly Interest Period, the Remarketing Agent shall determine the
Weekly Rate for the ensuing or
current (in the case of determinations made on Wednesday)
Weekly Interest Period. The
determination of the Weekly Rate by the Remarketing Agent shall
be conclusive and binding.
The Weekly Rate for each Weekly Interest Period
determined by the Remarketing Agent shall
be the lowest rate of interest which will, in the sole judgment of the
Remarketing Agent, having due
regard for prevailing financial market conditions, permit the Bonds
to be remarketed at a price of par,
plus accrued interest, on the first day of the applicable Weekly
Interest Period; provided that in no
case shall the Weekly Rate be more than the Maximum Rate. In
the event no Weekly Rate is
determined by the Remarketing Agent for a Weekly Interest Period,
the Weekly Rate for such
Weekly Interest Period shall be the rate from time to time
established pursuant to the Indenture.
II. Daily Rate Provisions
Optional Tender. During a Daily Rate Period, this Bond or
any portion thereof in Authorized
Denominations (except during any period this Bond is a Pledged
Bond or Company Bond) shall be
purchased on the demand of the registered Owner thereof on any
Business Day at a price equal to
100% of the principal amount thereof, plus accrued and unpaid
interest thereon to the date of
purchase, upon delivery (by telecopy of otherwise) to the Tender
Agent at its principal office, (a) by
10:30 a.m., New York time, on such Business Day, of a written
irrevocable notice, which will be
effective upon receipt, setting forth the information required by the
Indenture and (b) by 11:00 a.m.,
New York time, on such Business Day, this Bond, as provided in
the Indenture. Notwithstanding the
foregoing, if the Bonds are held in a Book-Entry System, separate
procedures for the optional tender
of Bonds are set forth in the Indenture.
Interest. During any period this Bond is in the Daily Rate
Mode, interest on this Bond shall
be paid on the first Business Day of each month next succeeding
the Closing Date (if applicable),
each Daily Rate Conversion Date, and on the Maturity Date
specified above or such other date as
the outstanding principal amount of the Bonds is paid in full if the
Bonds are in the Daily Rate Mode
at such time (each, a "Daily Rate Interest Payment Date"), and
shall be computed on the basis of
a 365- or 366-day year, for the actual number of days elapsed.
Interest on the Bonds for each Daily
Interest Period shall be calculated as provided below and in the
Indenture. During each Daily Rate
Period, "Daily Interest Period" shall mean the period from and
including the first day of the Daily
Rate Period to but excluding the immediately succeeding Business
Day.
On the first day of each Daily Interest Period, the
Remarketing Agent shall determine the
Daily Rate for such Daily Interest Period. The determination of the
Daily Rate by the Remarketing
Agent shall be conclusive and binding.
The Daily Rate for each Daily Interest Period determined by
the Remarketing Agent shall be
the lowest rate of interest which will, in the sole judgment of the
Remarketing Agent, having due
regard for prevailing financial market conditions, permit the Bonds
to be remarketed at a price of par,
plus accrued interest, on the first day of the applicable Daily
Interest Period; provided that in no case
shall the Daily Rate be more than the Maximum Rate. In the event
no Daily Rate is determined by
the Remarketing Agent for a Daily Interest Period, then the Bonds
shall thereupon bear interest at
the last Daily Rate previously determined pursuant to the Indenture.
III. CP Rate Provisions
From and after each CP Rate Conversion Date or a CP Rate
Reset Date, as appropriate, to
the earlier of their redemption, the following Conversion Date, or
the following CP Rate Reset Date,
the interest rate of this Bond shall be a CP Rate, determined as
provided below and in the Indenture.
When the Bonds are in the CP Rate Mode, in the case of each CP
Rate Period, on the first day
thereof, the Remarketing Agent shall determine (i) the duration of
the CP Rate Period and (ii) the
CP Rate which shall apply during such CP Rate Period. The
duration of the CP Rate Period so
determined shall be that which, in the sole judgment of the
Remarketing Agent will provide the
lowest overall interest cost with respect to the Bonds, with due
regard to prevailing financial market
conditions, foreseeable changes in such conditions, the anticipated
duration of the period the Bonds
may remain in the CP Rate Mode, and such other factors which the
Remarketing Agent, in its sole
judgment, shall deem relevant and economically advantageous to
consider. Upon determination of
the duration of the CP Rate Period, the Remarketing Agent shall
determine the CP Rate which shall
be in effect during such CP Rate Period, which shall be the lowest
rate of interest which, in the sole
judgment of the Remarketing Agent, having due regard to
prevailing financial market conditions, will
permit the Bonds to be sold at par, plus accrued interest, on the first
day of such CP Rate Period.
Notwithstanding the foregoing, the CP Rate so determined shall not
be more than the Maximum
Rate. Unless and until the Company elects to effect a conversion of
the Bonds from the CP Rate
Mode to another Mode, the Remarketing Agent shall continually
redetermine the duration of, and
the CP Rate to be effective during each new CP Rate Period, which
will commence, without further
action on the part of the Company on each CP Rate Reset Date. If
on any CP Rate Reset Date the
Remarketing Agent shall fail to determine either the duration of, or
the CP Rate to be effective
during the CP Rate Period which commences on such date, then,
without further action on the part
of the Company, the Bonds shall thereupon bear interest at the
Weekly Rate determined pursuant
to the Indenture. Each determination by the Remarketing Agent
shall be conclusive and binding.
While the Bonds are in the CP Rate Mode, interest on this Bond
will be payable on the first Business
Day which follows each CP Rate Period, and shall be computed on
the basis of a 365- or 366-day
year, and the actual number of days elapsed.
IV. Adjustable Rate Provisions
From and after each Adjustable Rate Conversion Date or
Adjustable Rate Reset Date, the
interest rate on this Bond shall be an Adjustable Rate, determined
as provided below and in the
Indenture. When the Bonds are in the Adjustable Rate Mode, the
Bonds will remain in such Mode
for as long as the Company continues to deliver timely conversion
notices specifying the duration of
the next Adjustable Rate Period. The Remarketing Agent, on or
prior to the commencement of each
Adjustable Rate Period, shall determine the Adjustable Rate to be
borne by the Bonds during such
Adjustable Rate Period, which will be the lowest rate which, in its
sole judgment having due regard
for prevailing financial market conditions, will permit the Bonds to
be sold at par on the first day of
such Adjustable Rate Period. Notwithstanding the foregoing, the
Adjustable Rate shall not be more
than the Maximum Rate. In the event no Adjustable Rate is
determined by the Remarketing Agent
for an Adjustable Rate Period, then the Bonds shall bear interest as
provided in the Indenture.
During each Adjustable Rate Period, interest on this Bond
shall be paid on each Adjustable
Rate Interest Payment Date and shall be computed on the basis of a
360-day year consisting of twelve
30-day months.
V. Conversion Provisions
The interest rate Mode of this Bond shall be converted from
one Mode to another Mode, or
from an Adjustable Rate Period of one duration to an Adjustable
Rate Period of the same or a
different duration within the Adjustable Rate Mode, if the Company
shall give notice as provided in
the Indenture of its election to effect such conversion, specifying in
such notice the date on which
the Conversion Date will occur (which date shall be at least 25 days
after such notice is given) and,
if the conversion is to an Adjustable Rate Period, specifying the
Interest Payment Date which shall
be the day following the last day of such Adjustable Rate Period
(which Adjustable Rate Period shall
be of a duration of at least six months). The Bonds shall be subject
to mandatory tender and
purchase on the Conversion Date. In the event any condition
precedent to the conversion of the
interest rate Mode of this Bond from one Mode to another Mode, or
from an Adjustable Rate
Period of one duration to an Adjustable Rate Period of the same or
a different duration, is not
satisfied, this Bond shall nonetheless be subject to mandatory
tender on the Conversion Date and the
Bonds shall commence bearing interest on the Conversion Date as
provided in the Indenture.
VI. Mandatory Tender
All Bonds are subject to mandatory tender in whole by the
Owners to the Tender Agent at its
Principal Office on each date described below:
(a) On each Conversion Date;
(b) On each CP Rate Reset Date;
(c) On the second Business Day prior to the expiration
or termination of the Letter of
Credit (except as provided in the Indenture), if the Trustee has not
received evidence satisfactory to
it as required by the Indenture by the 25th day preceding the
scheduled expiration or termination
date of the Letter of Credit of either an extension of the then
existing Letter of Credit or the
issuance of an Alternate Credit Facility meeting the requirements
set forth therefor in the
Agreement, including the Maintenance of Rating requirement (as
defined therein);
(d) On the date of substitution of an Alternate Credit
Facility for the then existing Letter
of Credit if the Trustee has not received evidence of a Maintenance
of Rating with respect thereto
by the 25th day preceding such substitution date;
(e) On each optional redemption date pursuant to the
Indenture for which the Company
has elected to purchase Bonds in lieu of optional redemption
pursuant to the Indenture; and
(f) On the date on which the Guaranty is released as
provided in the Indenture.
The purchase price of Bonds subject to mandatory tender
shall be 100% of the principal
amount thereof (except in the case of a mandatory tender described
in paragraph (c), (d), (e), or (f)
above, during, but prior to the expiration date of, an Adjustable
Rate Period, in which case the
purchase price shall include a premium equal to the then applicable
optional redemption premium,
if any, on the Bonds, as set forth in the Indenture), plus accrued
interest, if any, to the mandatory
tender date. Not later than 20 days prior to any mandatory tender
date, the Trustee shall mail notice
to all Owners of Bonds subject to mandatory tender on such date
stating that (1) due to the
occurrence of one of the events described above (which event shall
be specified), such Owner"s
Bonds will be subject to mandatory tender to the Tender Agent at
its Principal Office on the
mandatory tender date at the purchase price described above, and
(2) interest with respect to Bonds
which are not tendered on the mandatory tender date will cease to
accrue provided Available Moneys
for such purchase are on deposit with the Tender Agent on the
mandatory tender date. Notice of
mandatory tenders described in paragraphs (a) and (e) above shall
be given as part of the notice of
conversion or optional redemption referenced above. No failure on
the part of the Tender Agent
to give such notice shall affect the requirement that Bonds be
tendered on the mandatory tender
date.
Any Bond subject to mandatory tender which is not
tendered on or before the mandatory
tender date shall, if Available Moneys sufficient and available for
the purchase of such Bonds have
been deposited with the Tender Agent on the mandatory tender
date, be deemed to have been
tendered for purchase on the mandatory tender date, and from and
after such date, interest will no
longer accrue on such Bonds. Owners of such Bonds shall have no
rights or benefits under the
Indenture with respect to such Bonds other than to receive the
purchase price for such Bonds upon
surrender of such Bonds to the Tender Agent.
VII. Redemption of Bonds
The Bonds shall be subject to optional redemption only as
follows:
a. Weekly Rate Mode, CP Rate Mode, or Daily Rate
Mode. While the Bonds are in the
Weekly Rate Mode or the Daily Rate Mode, they are subject to
optional redemption, in whole or
in part on any Business Day in Authorized Denominations, and
while the Bonds are in the CP Rate
Mode, they are subject to optional redemption in whole or in part in
Authorized Denominations on
any Interest Payment Date, at the direction of the Company, at a
redemption price equal to 100%
of the principal amount of the Bond to be redeemed, plus accrued
interest thereon to the redemption
date.
b. Adjustable Rate Mode. While the Bonds are in
the Adjustable Rate Mode, they are
subject to optional redemption in whole or in part on any date, at
the direction of the Company, only
on the dates and at the applicable redemption prices set forth in the
Indenture.
While the Bonds are in the Adjustable Rate Mode or the CP
Rate Mode, the Bonds are
subject to extraordinary optional redemption in whole on any date
at a redemption price equal to the
principal amount of Bonds plus accrued interest to the redemption
date, without premium, upon the
occurrence of certain events specified in the Indenture.
The Bonds in any Mode are subject to mandatory
redemption in whole on the next date for
which timely notice of redemption can be given by the Trustee after
the occurrence of a
Determination of Taxability at a redemption price equal to the
aggregate principal amount of the
Bonds plus accrued interest thereon to the redemption date, without
premium.
At least 30 days prior to any redemption of Bonds, the
Trustee shall cause notice of the call
for redemption to be sent by first class mail, postage prepaid, to the
Owner of each Bond to be
redeemed at the address of such Owner shown on the registration
books maintained by the Trustee.
Neither the failure to give any such notice nor any defect in any
notice so mailed shall affect the
sufficiency or the validity of any proceedings for the redemption of
the Bonds.
If Available Moneys are deposited in the Bond Fund on the
date Bonds are to be redeemed,
Bonds or portions thereof redeemed shall no longer be secured by
this Indenture and shall not be
deemed to be outstanding under the provisions of this Indenture.
Interest shall not continue to
accrue on the Bonds after the date fixed for redemption, so long as
Available Moneys are on deposit
to pay all principal of, premium, if any, and interest accrued on the
Bonds on such date. However,
if Available Moneys shall not be on deposit on the redemption date,
such Bonds or portions thereof
shall continue to bear interest until paid at the same rate as they
would have borne had they not been
called for redemption.
Any partial redemption of Bonds shall be made only in
integral multiples of $100,000. If fewer
than all of the Bonds shall be called for redemption, the portion of
Bonds to be redeemed shall be
selected by the Trustee as provided in the Indenture.
VIII. General Provisions
Except as provided in the Indenture, the Ownership of this
Bond may be transferred (in
Authorized Denominations) only upon presentation and surrender
of this Bond at the corporate trust
office of the Trustee, together with an assignment duly executed by
the Registered Owner hereof or
his duly authorized attorney-in-fact in such form as shall be
satisfactory to the Trustee.
Provisions may be made for the payment of amounts
represented by the Bonds as provided in
the Indenture, in which event all liability of the Issuer to the
Owners of the applicable Bonds for the
payment of such Bonds shall forthwith cease, terminate, and be
completely discharged, and thereupon
it shall be the duty of the Trustee to hold such funds (but only for
the period specified and as
provided in the Indenture), without liability for interest thereon, for
the benefit of the Owners of
such Bonds, who shall thereafter be restricted exclusively to such
funds for any claims of whatever
nature under the Indenture or on, or with respect to, said Bonds.
It is hereby certified and covenanted that this Bond has been
duly and validly authorized,
issued, and delivered; that all acts, conditions, and things required
or proper to be performed, exist
and be done precedent to or in the authorization, issuance, and
delivery of this Bond have been
performed, exist, and have been done in accordance with law.
The Bonds are secured by the Indenture, whereunder the
Trustee undertakes to enforce the
rights of the Owners of the Bonds and to perform other duties to the
extent and under the conditions
stated in the Indenture. In case an Event of Default shall occur, the
principal of and interest on the
Bonds then outstanding may, and, under certain circumstances,
shall, be declared to be due and
payable immediately upon the conditions and in the manner
provided in the Indenture. Under the
circumstances and conditions provided in the Indenture, the
Trustee may, or shall, waive any Event
of Default under the Indenture and its consequences.
The Issuer has reserved the right to amend the Indenture,
with the consent of the Bank, as
provided therein. Under some (but not all) circumstances,
amendments thereto must also be
approved by the Owners of either at least a majority or 100% in
aggregate principal amount of the
outstanding Bonds.
(Form of Assignment)
For value received, the undersigned hereby sells, assigns,
and transfers unto
___________________ the within Bond, and does hereby
irrevocably constitute and appoint
___________________, attorney to transfer such Bond on the
books kept for registration and transfer
of the within Bond, with full power of substitution in the premises.
Dated: __________________
Note: The signature to this Assignment must correspond with the
name as it appears upon the face
of the within Bond in every particular, without enlargement or
alteration or any change whatsoever.
Signature guaranteed by:
_______________________________________Note: The
signature to this assignment must correspond
with the name as it appears upon the face of the within Bond in
every particular, without alteration
or enlargement or any change whatever. Signature(s) must be
guaranteed by an "eligible guarantor
institution" meeting the requirements of the Trustee, which
requirements include membership or
participation in Stamp or such other "signature guaranty
program" as may be determined by the
Trustee in addition to or in substitution for Stamp, all in
accordance with the Securities Exchange
Act of 1934, as amended.
[Form of Registration Information]
Under the terms of the Indenture, the Trustee will register a
Bond in the name of a transferee
only if the Owner of such Bond (or his duly authorized
representative) provides as much of the
information requested below as is applicable to such Owner prior to
submitting this Bond for transfer.
Name: _______________________________________
Address: _____________________________________
Social Security or Employer Identification Number:
_______________________
If a Trust, Name, and Address of Trustee(s) and Date of Trust:
__________________
Neither the State of Texas, the City of Grapevine, Texas, nor any
political corporation,
subdivision, or agency thereof shall be obligated to pay the
principal of, premium, if any,
or interest on this Bond and neither the faith and credit nor the
taxing power of the
State of Texas, the City of Grapevine, Texas, nor any political
corporation, subdivision,
or agency thereof nor any assets of the Grapevine Industrial
Development Corporation,
other than those specifically pledged therefor, are pledged to the
payment of the
principal of, premium, if any, or interest on the Bond.
No. T-1 $8,000,000
Grapevine Industrial Development Corporation
Industrial Development Revenue Bonds, Series 1994
(Trencor Jetco, Inc. Project)
DATED DATE: MATURITY DATE: CUSIP
NUMBER:
April 1, 1994 April 1, 2019
Registered Owner: CEDE & CO.
Principal Amount: EIGHT MILLION DOLLARS
The Grapevine Industrial Development Corporation, a
corporation acting on behalf of the City
of Grapevine (the "Unit"), State of Texas (the "State"), hereby
promises to pay to the order of the
Registered Owner specified above, or registered assigns, the
Principal Amount specified above on
the Maturity Date specified above (or earlier as hereinafter
provided), and to pay interest on the
Principal Amount hereof from the date specified in the Indenture
(hereinafter defined) at the rates
per annum and on the dates set forth herein (but only out of the
revenues of the Issuer derived from
the Agreement, as hereinafter defined, or other moneys pledged
therefor) and in accordance with
the provisions of the Development Corporation Act of 1979, Article
5190.6 Tex. Rev. Civ. Stat. Ann.,
as amended (the "Act").
THIS BOND, TOGETHER WITH PREMIUM, IF ANY,
AND THE INTEREST HEREON, IS
A SPECIAL AND LIMITED OBLIGATION OF THE ISSUER
AND NEITHER THE ISSUER, THE
UNIT, NOR THE STATE OF TEXAS NOR ANY POLITICAL
SUBDIVISION THEREOF,
INCLUDING THE ISSUER AND THE UNIT, SHALL BE
OBLIGATED TO PAY THIS BOND, THE
PREMIUM, IF ANY, OR THE INTEREST HEREON OR OTHER
COSTS INCIDENT THERETO
EXCEPT FROM FUNDS PLEDGED UNDER THE INDENTURE.
NEITHER THE FAITH AND
CREDIT NOR THE TAXING POWER OF THE STATE, THE
UNIT, OR ANY POLITICAL
CORPORATION, SUBDIVISION, AGENCY, OR
INSTRUMENTALITY THEREOF IS PLEDGED
TO THE PAYMENT OF THE PRINCIPAL, PREMIUM, IF ANY,
OR INTEREST ON THIS BOND.
The principal of, premium, if any, and interest on this Bond
are payable in lawful money of the
United States of America. The principal of and premium, if any,
payable upon maturity or earlier
redemption of this Bond are payable when due upon the
presentation and surrender hereof at the
corporate trust office of Bank One, Texas, NA, in Fort Worth,
Texas, as trustee (the "Trustee"), or
any successor trustee. Each payment of interest on this Bond shall
be payable to the Registered
Owner hereof as shown on the registration books kept by the
Trustee at the close of business on the
Business Day (but, during an Adjustable Rate Period, the fifteenth
day of the calendar month) next
preceding the date on which such interest becomes due and payable
(herein, a "Record Date").
Interest on this Bond shall be payable to the Registered Owner
hereof by check mailed by first class
mail on the respective Interest Payment Dates (as hereinafter
defined) to the address of such
Registered Owner as shown on the books kept by the Trustee at the
close of business on the relevant
Record Date or such other address as is furnished to the Trustee (in
form satisfactory to the Trustee)
by such Owner prior to such Record Date. Registered Owners of
$1,000,000 or more in aggregate
principal amount of Bonds shall be entitled to receive interest
payments by wire transfer by providing
written wire instructions to the Trustee before the Record Date.
This Bond is authorized and issued under and pursuant to
authority conferred by the Act,
certain proceedings of the Board of Directors of the Issuer and the
Indenture of Trust dated as of
April 1, 1994 (the "Indenture") between the Issuer and the
Trustee. Certain terms used and not
defined in this Bond are defined in the Indenture. This Bond is one
of the Issuer"s duly authorized
Industrial Development Revenue Bonds, Series 1994 (Trencor
Jetco, Inc. Project) (the "Bonds"),
which Bonds have been issued in the aggregate principal amount of
$8,000,000 to provide funds to
make a loan to Trencor Jetco, Inc., a Texas corporation (the
"Company") pursuant to a Loan
Agreement dated as of April 1, 1994 (the "Agreement") between
the Issuer and the Company. The
proceeds of the Bonds will be used to finance a portion of the costs
of acquisition, construction and
equipping of certain facilities (the "Project") located in the Unit.
As security for the payment of the
Bonds, the Company has caused to be delivered to the Trustee a
letter of credit (the "Initial Letter
of Credit") of The First National Bank of Chicago (the "Bank"),
against which the Trustee shall be
entitled to draw, in accordance with the terms thereof, to pay when
and as due, the principal or
purchase price of, and interest on, the Bonds during the term of the
Initial Letter of Credit. Under
certain conditions, the Company may cause to be delivered an
Alternate Credit Facility (an
"Alternate Credit Facility") in substitution for the Letter of
Credit then in effect without the consent
of the Owners of the Bonds. The Initial Letter of Credit, together
with any Alternate Credit Facility,
is hereinafter referred to as the "Letter of Credit". The Bonds are
guaranteed by Astec Industries,
Inc., a Tennessee corporation (the "Guarantor"), the owner of 100%
of the outstanding stock of the
Company, pursuant to a Guaranty Agreement dated April 1, 1994,
between the Guarantor and the
Trustee. The Bonds are not secured by any lien on or security
interest in the Project.
The Bonds are issued under and entitled to the benefits of
the Indenture. Pursuant to the
Indenture, the Issuer has pledged and assigned to the Trustee the
Trust Estate as security for its
obligation to pay the principal or purchase price of, premium, if
any, and interest on the Bonds.
Reference is made to the Indenture for a description of the Trust
Estate and for the provisions
thereof with respect to the nature and extent of the security granted
by the Issuer to the Trustee
thereunder, the rights, duties, and obligations of the Issuer and the
Trustee, the rights of the
registered Owners of the Bonds, and the terms on which the Bonds
are issued and secured, to all of
which provisions, and to all other provisions of the Indenture, the
Registered Owner hereof by the
acceptance of this Bond assents.
I. Weekly Rate Provisions
Optional Tender. During a Weekly Rate Period, this Bond
or any portion thereof in
Authorized Denominations (except during any period this Bond is a
Pledged Bond or Company
Bond) shall be purchased on the demand of the registered Owner
thereof on any Business Day at
a price equal to 100% of the principal amount thereof, plus accrued
and unpaid interest thereon to
the date of purchase, upon delivery to the tender agent duly
appointed in accordance with the
provisions of the Indenture (together with any successor tender
agent, the "Tender Agent") at its
Principal Office, on any Business Day, of (a) a written irrevocable
notice setting forth the information
required by the Indenture, including the date on which such Bond,
or the portion thereof being
tendered for purchase, shall be so purchased, which date shall be a
Business Day not prior to the
seventh day next succeeding the date of the delivery of such notice
to the Tender Agent, together
with (b) this Bond, as provided in the Indenture; provided, that if
the registered Owner of the
tendered Bond is an open-ended diversified management
investment company (registered under the
Investment Company Act of 1940, as amended), the delivery
required under this clause (b) need not
be made until the date such Bond is to be purchased from such
registered Owner as provided in the
Indenture. Notwithstanding the foregoing, if the Bonds, are held in
a Book-Entry System, separate
procedures for the optional tender of Bonds are set forth in the
Indenture.
Interest. During any period this Bond is in the Weekly Rate
Mode, interest on this Bond shall
be paid on the first Business Day of each month next succeeding
the Closing Date (if applicable),
each Weekly Rate Conversion Date, and on the Maturity Date
specified above or such other date
as the outstanding principal amount of the Bonds is paid in full if
the Bonds are in the Weekly Rate
Mode at such time (each, a "Weekly Rate Interest Payment
Date"), and shall be computed on the
basis of a 365- or 366-day year, for the actual number of days
elapsed. Interest on this Bond for each
Weekly Interest Period shall be calculated as provided below and in
the Indenture. During each
Weekly Rate Period, "Weekly Interest Period" shall mean the
period from and including the first day
of the Weekly Rate Period through and including the following
Tuesday, and after the first Weekly
Interest Period of each Weekly Rate Period, from and including
Wednesday of each week through
and including the following Tuesday, whether or not such days are
Business Days, provided, however,
the initial Weekly Interest Period shall commence on the Closing
Date and end on the following
Tuesday.
On Tuesday (unless Tuesday is not a Business Day, then on
the next preceding Monday; unless
Monday and Tuesday are not Business Days, then on the next
subsequent Wednesday, whether or
not a Business Day) of each calendar week during a Weekly Rate
Period, with respect to each
Weekly Interest Period, the Remarketing Agent shall determine the
Weekly Rate for the ensuing or
current (in the case of determinations made on Wednesday)
Weekly Interest Period. The
determination of the Weekly Rate by the Remarketing Agent shall
be conclusive and binding.
The Weekly Rate for each Weekly Interest Period
determined by the Remarketing Agent shall
be the lowest rate of interest which will, in the sole judgment of the
Remarketing Agent, having due
regard for prevailing financial market conditions, permit the Bonds
to be remarketed at a price of par,
plus accrued interest, on the first day of the applicable Weekly
Interest Period; provided that in no
case shall the Weekly Rate be more than the Maximum Rate. In
the event no Weekly Rate is
determined by the Remarketing Agent for a Weekly Interest Period,
the Weekly Rate for such
Weekly Interest Period shall be the rate from time to time
established pursuant to the Indenture.
II. Daily Rate Provisions
Optional Tender. During a Daily Rate Period, this Bond or
any portion thereof in Authorized
Denominations (except during any period this Bond is a Pledged
Bond or Company Bond) shall be
purchased on the demand of the registered Owner thereof on any
Business Day at a price equal to
100% of the principal amount thereof, plus accrued and unpaid
interest thereon to the date of
purchase, upon delivery (by telecopy of otherwise) to the Tender
Agent at its principal office, (a) by
10:30 a.m., New York time, on such Business Day, of a written
irrevocable notice, which will be
effective upon receipt, setting forth the information required by the
Indenture and (b) by 11:00 a.m.,
New York time, on such Business Day, this Bond, as provided in
the Indenture. Notwithstanding the
foregoing, if the Bonds are held in a Book-Entry System, separate
procedures for the optional tender
of Bonds are set forth in the Indenture.
Interest. During any period this Bond is in the Daily Rate
Mode, interest on this Bond shall
be paid on the first Business Day of each month next succeeding
the Closing Date (if applicable),
each Daily Rate Conversion Date, and on the Maturity Date
specified above or such other date as
the outstanding principal amount of the Bonds is paid in full if the
Bonds are in the Daily Rate Mode
at such time (each, a "Daily Rate Interest Payment Date"), and
shall be computed on the basis of
a 365- or 366-day year, for the actual number of days elapsed.
Interest on the Bonds for each Daily
Interest Period shall be calculated as provided below and in the
Indenture. During each Daily Rate
Period, "Daily Interest Period" shall mean the period from and
including the first day of the Daily
Rate Period to but excluding the immediately succeeding Business
Day.
On the first day of each Daily Interest Period, the
Remarketing Agent shall determine the
Daily Rate for such Daily Interest Period. The determination of the
Daily Rate by the Remarketing
Agent shall be conclusive and binding.
The Daily Rate for each Daily Interest Period determined by
the Remarketing Agent shall be
the lowest rate of interest which will, in the sole judgment of the
Remarketing Agent, having due
regard for prevailing financial market conditions, permit the Bonds
to be remarketed at a price of par,
plus accrued interest, on the first day of the applicable Daily
Interest Period; provided that in no case
shall the Daily Rate be more than the Maximum Rate. In the event
no Daily Rate is determined by
the Remarketing Agent for a Daily Interest Period, then the Bonds
shall thereupon bear interest at
the last Daily Rate previously determined pursuant to the Indenture.
III. CP Rate Provisions
From and after each CP Rate Conversion Date or a CP Rate
Reset Date, as appropriate, to
the earlier of their redemption, the following Conversion Date, or
the following CP Rate Reset Date,
the interest rate of this Bond shall be a CP Rate, determined as
provided below and in the Indenture.
When the Bonds are in the CP Rate Mode, in the case of each CP
Rate Period, on the first day
thereof, the Remarketing Agent shall determine (i) the duration of
the CP Rate Period and (ii) the
CP Rate which shall apply during such CP Rate Period. The
duration of the CP Rate Period so
determined shall be that which, in the sole judgment of the
Remarketing Agent will provide the
lowest overall interest cost with respect to the Bonds, with due
regard to prevailing financial market
conditions, foreseeable changes in such conditions, the anticipated
duration of the period the Bonds
may remain in the CP Rate Mode, and such other factors which the
Remarketing Agent, in its sole
judgment, shall deem relevant and economically advantageous to
consider. Upon determination of
the duration of the CP Rate Period, the Remarketing Agent shall
determine the CP Rate which shall
be in effect during such CP Rate Period, which shall be the lowest
rate of interest which, in the sole
judgment of the Remarketing Agent, having due regard to
prevailing financial market conditions, will
permit the Bonds to be sold at par, plus accrued interest, on the first
day of such CP Rate Period.
Notwithstanding the foregoing, the CP Rate so determined shall not
be more than the Maximum
Rate. Unless and until the Company elects to effect a conversion of
the Bonds from the CP Rate
Mode to another Mode, the Remarketing Agent shall continually
redetermine the duration of, and
the CP Rate to be effective during each new CP Rate Period, which
will commence, without further
action on the part of the Company on each CP Rate Reset Date. If
on any CP Rate Reset Date the
Remarketing Agent shall fail to determine either the duration of, or
the CP Rate to be effective
during the CP Rate Period which commences on such date, then,
without further action on the part
of the Company, the Bonds shall thereupon bear interest at the
Weekly Rate determined pursuant
to the Indenture. Each determination by the Remarketing Agent
shall be conclusive and binding.
While the Bonds are in the CP Rate Mode, interest on this Bond
will be payable on the first Business
Day which follows each CP Rate Period, and shall be computed on
the basis of a 365- or 366-day
year, and the actual number of days elapsed.
IV. Adjustable Rate Provisions
From and after each Adjustable Rate Conversion Date or
Adjustable Rate Reset Date, the
interest rate on this Bond shall be an Adjustable Rate, determined
as provided below and in the
Indenture. When the Bonds are in the Adjustable Rate Mode, the
Bonds will remain in such Mode
for as long as the Company continues to deliver timely conversion
notices specifying the duration of
the next Adjustable Rate Period. The Remarketing Agent, on or
prior to the commencement of each
Adjustable Rate Period, shall determine the Adjustable Rate to be
borne by the Bonds during such
Adjustable Rate Period, which will be the lowest rate which, in its
sole judgment having due regard
for prevailing financial market conditions, will permit the Bonds to
be sold at par on the first day of
such Adjustable Rate Period. Notwithstanding the foregoing, the
Adjustable Rate shall not be more
than the Maximum Rate. In the event no Adjustable Rate is
determined by the Remarketing Agent
for an Adjustable Rate Period, then the Bonds shall bear interest as
provided in the Indenture.
During each Adjustable Rate Period, interest on this Bond
shall be paid on each Adjustable
Rate Interest Payment Date and shall be computed on the basis of a
360-day year consisting of twelve
30-day months.
V. Conversion Provisions
The interest rate Mode of this Bond shall be converted from
one Mode to another Mode, or
from an Adjustable Rate Period of one duration to an Adjustable
Rate Period of the same or a
different duration within the Adjustable Rate Mode, if the Company
shall give notice as provided in
the Indenture of its election to effect such conversion, specifying in
such notice the date on which
the Conversion Date will occur (which date shall be at least 25 days
after such notice is given) and,
if the conversion is to an Adjustable Rate Period, specifying the
Interest Payment Date which shall
be the day following the last day of such Adjustable Rate Period
(which Adjustable Rate Period shall
be of a duration of at least six months). The Bonds shall be subject
to mandatory tender and
purchase on the Conversion Date. In the event any condition
precedent to the conversion of the
interest rate Mode of this Bond from one Mode to another Mode, or
from an Adjustable Rate
Period of one duration to an Adjustable Rate Period of the same or
a different duration, is not
satisfied, this Bond shall nonetheless be subject to mandatory
tender on the Conversion Date and the
Bonds shall commence bearing interest on the Conversion Date as
provided in the Indenture.
VI. Mandatory Tender
All Bonds are subject to mandatory tender in whole by the
Owners to the Tender Agent at its
Principal Office on each date described below:
(a) On each Conversion Date;
(b) On each CP Rate Reset Date;
(c) On the second Business Day prior to the expiration
or termination of the Letter of
Credit (except as provided in the Indenture), if the Trustee has not
received evidence satisfactory to
it as required by the Indenture by the 25th day preceding the
scheduled expiration or termination
date of the Letter of Credit of either an extension of the then
existing Letter of Credit or the
issuance of an Alternate Credit Facility meeting the requirements
set forth therefor in the
Agreement, including the Maintenance of Rating requirement (as
defined therein);
(d) On the date of substitution of an Alternate Credit
Facility for the then existing Letter
of Credit if the Trustee has not received evidence of a Maintenance
of Rating with respect thereto
by the 25th day preceding such substitution date;
(e) On each optional redemption date pursuant to the
Indenture for which the Company
has elected to purchase Bonds in lieu of optional redemption
pursuant to the Indenture; and
(f) On the date on which the Guaranty is released as
provided in the Indenture.
The purchase price of Bonds subject to mandatory tender
shall be 100% of the principal
amount thereof (except in the case of a mandatory tender described
in paragraph (c), (d), (e), or (f)
above, during, but prior to the expiration date of, an Adjustable
Rate Period, in which case the
purchase price shall include a premium equal to the then applicable
optional redemption premium,
if any, on the Bonds, as set forth in the Indenture), plus accrued
interest, if any, to the mandatory
tender date. Not later than 20 days prior to any mandatory tender
date, the Trustee shall mail notice
to all Owners of Bonds subject to mandatory tender on such date
stating that (1) due to the
occurrence of one of the events described above (which event shall
be specified), such Owner"s
Bonds will be subject to mandatory tender to the Tender Agent at
its Principal Office on the
mandatory tender date at the purchase price described above, and
(2) interest with respect to Bonds
which are not tendered on the mandatory tender date will cease to
accrue provided Available Moneys
for such purchase are on deposit with the Tender Agent on the
mandatory tender date. Notice of
mandatory tenders described in paragraphs (a) and (e) above shall
be given as part of the notice of
conversion or optional redemption referenced above. No failure on
the part of the Tender Agent
to give such notice shall affect the requirement that Bonds be
tendered on the mandatory tender
date.
Any Bond subject to mandatory tender which is not
tendered on or before the mandatory
tender date shall, if Available Moneys sufficient and available for
the purchase of such Bonds have
been deposited with the Tender Agent on the mandatory tender
date, be deemed to have been
tendered for purchase on the mandatory tender date, and from and
after such date, interest will no
longer accrue on such Bonds. Owners of such Bonds shall have no
rights or benefits under the
Indenture with respect to such Bonds other than to receive the
purchase price for such Bonds upon
surrender of such Bonds to the Tender Agent.
VII. Redemption of Bonds
The Bonds shall be subject to optional redemption only as
follows:
a. Weekly Rate Mode, CP Rate Mode, or Daily Rate
Mode. While the Bonds are in the
Weekly Rate Mode or the Daily Rate Mode, they are subject to
optional redemption, in whole or
in part on any Business Day in Authorized Denominations, and
while the Bonds are in the CP Rate
Mode, they are subject to optional redemption in whole or in part in
Authorized Denominations on
any Interest Payment Date, at the direction of the Company, at a
redemption price equal to 100%
of the principal amount of the Bond to be redeemed, plus accrued
interest thereon to the redemption
date.
b. Adjustable Rate Mode. While the Bonds are in
the Adjustable Rate Mode, they are
subject to optional redemption in whole or in part on any date, at
the direction of the Company, only
on the dates and at the applicable redemption prices set forth in the
Indenture.
While the Bonds are in the Adjustable Rate Mode or the CP
Rate Mode, the Bonds are
subject to extraordinary optional redemption in whole on any date
at a redemption price equal to the
principal amount of Bonds plus accrued interest to the redemption
date, without premium, upon the
occurrence of certain events specified in the Indenture.
The Bonds in any Mode are subject to mandatory
redemption in whole on the next date for
which timely notice of redemption can be given by the Trustee after
the occurrence of a
Determination of Taxability at a redemption price equal to the
aggregate principal amount of the
Bonds plus accrued interest thereon to the redemption date, without
premium.
At least 30 days prior to any redemption of Bonds, the
Trustee shall cause notice of the call
for redemption to be sent by first class mail, postage prepaid, to the
Owner of each Bond to be
redeemed at the address of such Owner shown on the registration
books maintained by the Trustee.
Neither the failure to give any such notice nor any defect in any
notice so mailed shall affect the
sufficiency or the validity of any proceedings for the redemption of
the Bonds.
If Available Moneys are deposited in the Bond Fund on the
date Bonds are to be redeemed,
Bonds or portions thereof redeemed shall no longer be secured by
this Indenture and shall not be
deemed to be outstanding under the provisions of this Indenture.
Interest shall not continue to
accrue on the Bonds after the date fixed for redemption, so long as
Available Moneys are on deposit
to pay all principal of, premium, if any, and interest accrued on the
Bonds on such date. However,
if Available Moneys shall not be on deposit on the redemption date,
such Bonds or portions thereof
shall continue to bear interest until paid at the same rate as they
would have borne had they not been
called for redemption.
Any partial redemption of Bonds shall be made only in
integral multiples of $100,000. If fewer
than all of the Bonds shall be called for redemption, the portion of
Bonds to be redeemed shall be
selected by the Trustee as provided in the Indenture.
VIII. General Provisions
Except as provided in the Indenture, the Ownership of this
Bond may be transferred (in
Authorized Denominations) only upon presentation and surrender
of this Bond at the corporate trust
office of the Trustee, together with an assignment duly executed by
the Registered Owner hereof or
his duly authorized attorney-in-fact in such form as shall be
satisfactory to the Trustee.
Provisions may be made for the payment of amounts
represented by the Bonds as provided in
the Indenture, in which event all liability of the Issuer to the
Owners of the applicable Bonds for the
payment of such Bonds shall forthwith cease, terminate, and be
completely discharged, and thereupon
it shall be the duty of the Trustee to hold such funds (but only for
the period specified and as
provided in the Indenture), without liability for interest thereon, for
the benefit of the Owners of
such Bonds, who shall thereafter be restricted exclusively to such
funds for any claims of whatever
nature under the Indenture or on, or with respect to, said Bonds.
It is hereby certified and covenanted that this Bond has been
duly and validly authorized,
issued, and delivered; that all acts, conditions, and things required
or proper to be performed, exist
and be done precedent to or in the authorization, issuance, and
delivery of this Bond have been
performed, exist, and have been done in accordance with law.
The Bonds are secured by the Indenture, whereunder the
Trustee undertakes to enforce the
rights of the Owners of the Bonds and to perform other duties to the
extent and under the conditions
stated in the Indenture. In case an Event of Default shall occur, the
principal of and interest on the
Bonds then outstanding may, and, under certain circumstances,
shall, be declared to be due and
payable immediately upon the conditions and in the manner
provided in the Indenture. Under the
circumstances and conditions provided in the Indenture, the
Trustee may, or shall, waive any Event
of Default under the Indenture and its consequences.
The Issuer has reserved the right to amend the Indenture,
with the consent of the Bank, as
provided therein. Under some (but not all) circumstances,
amendments thereto must also be
approved by the Owners of either at least a majority or 100% in
aggregate principal amount of the
outstanding Bonds.
In Witness Whereof, the Issuer has caused this Bond to be
executed in its name by the
manual or facsimile signature of its President or Vice President and
attested with the manual or
facsimile signature of the Secretary of Assistant Secretary all as of
the date first above written.
[Seal]
Attest:______________________________________
By:_______________________________________
By Authorized Officer Authorized Officer
[OFFICE OF THE COMPTROLLER
OF PUBLIC ACCOUNTS REGISTER NO.
_______________
OF THE STATE OF TEXAS
I hereby certify that there is on file and of record in my
office a certificate of the Attorney
General of the State of Texas to the effect that this Bond has been
examined by him as required by
law, that he finds that it has been issued in conformity with the
Constitution and laws of the State
of Texas, and that it is a valid and binding obligation of the
Grapevine Industrial Development
Corporation; and that this Bond has this day been registered by me.
Witness my hand and seal of office at Austin, Texas,
____________________________.
_________________________________________________
Comptroller of Public Accounts of the
[SEAL] State of Texas]
Assignment
For value received, the undersigned hereby sells, assigns,
and transfers unto ___________________ the within Bond, and does hereby
irrevocably constitute and appoint ___________________, attorney to
transfer such Bond on the books kept for registration and transfer
of the within Bond, with full power of substitution in the premises.
Dated: __________________
Note: The signature to this Assignment must correspond with the
name as it appears upon the face of the within Bond in every particular,
without enlargement or alteration or any change whatsoever.
Signature guaranteed by:
_______________________________________Note: The
signature to this assignment must correspond
with the name as it appears upon the face of the within Bond in
every particular, without alteration or enlargement or any change whatever.
Signature(s) must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Trustee, which
requirements include membership or participation in Stamp or such other
"signature guaranty program" as may be determined by the
Trustee in addition to or in substitution for Stamp, all in
accordance with the Securities Exchange Act of 1934, as amended.
Registration Information
Under the terms of the Indenture, the Trustee will register a
Bond in the name of a transferee only if the Owner of such Bond (or his duly
authorized representative) provides as much of the
information requested below as is applicable to such Owner prior to
submitting this Bond for transfer.
Name: _______________________________________
Address: _____________________________________
Social Security or Employer Identification Number:
_______________________
If a Trust, Name, and Address of Trustee(s) and Date of Trust:
__________________
Neither the State of Texas, the City of Grapevine, Texas, nor any
political corporation,
subdivision, or agency thereof shall be obligated to pay the
principal of, premium, if any,
or interest on this Bond and neither the faith and credit nor the
taxing power of the
State of Texas, the City of Grapevine, Texas, nor any political
corporation, subdivision,
or agency thereof nor any assets of the Grapevine Industrial
Development Corporation,
other than those specifically pledged therefor, are pledged to the
payment of the
principal of, premium, if any, or interest on the Bond.
No. R-1$8,000,000
Grapevine Industrial Development Corporation
Industrial Development Revenue Bonds, Series 1994
(Trencor Jetco, Inc. Project)
DATED DATE: MATURITY DATE: CUSIP
NUMBER:
April 1, 1994 April 1, 2019 388652 AL3
Registered Owner: CEDE & CO.
Principal Amount: EIGHT MILLION DOLLARS
The Grapevine Industrial Development Corporation, a
corporation acting on behalf of the City
of Grapevine (the "Unit"), State of Texas (the "State"), hereby
promises to pay to the order of the
Registered Owner specified above, or registered assigns, the
Principal Amount specified above on
the Maturity Date specified above (or earlier as hereinafter
provided), and to pay interest on the
Principal Amount hereof from the date specified in the Indenture
(hereinafter defined) at the rates
per annum and on the dates set forth herein (but only out of the
revenues of the Issuer derived from
the Agreement, as hereinafter defined, or other moneys pledged
therefor) and in accordance with
the provisions of the Development Corporation Act of 1979, Article
5190.6 Tex. Rev. Civ. Stat. Ann.,
as amended (the "Act").
THIS BOND, TOGETHER WITH PREMIUM, IF ANY,
AND THE INTEREST HEREON, IS
A SPECIAL AND LIMITED OBLIGATION OF THE ISSUER
AND NEITHER THE ISSUER, THE
UNIT, NOR THE STATE OF TEXAS NOR ANY POLITICAL
SUBDIVISION THEREOF,
INCLUDING THE ISSUER AND THE UNIT, SHALL BE
OBLIGATED TO PAY THIS BOND, THE
PREMIUM, IF ANY, OR THE INTEREST HEREON OR OTHER
COSTS INCIDENT THERETO
EXCEPT FROM FUNDS PLEDGED UNDER THE INDENTURE.
NEITHER THE FAITH AND
CREDIT NOR THE TAXING POWER OF THE STATE, THE
UNIT, OR ANY POLITICAL
CORPORATION, SUBDIVISION, AGENCY, OR
INSTRUMENTALITY THEREOF IS PLEDGED
TO THE PAYMENT OF THE PRINCIPAL, PREMIUM, IF ANY,
OR INTEREST ON THIS BOND.
The principal of, premium, if any, and interest on this Bond
are payable in lawful money of the
United States of America. The principal of and premium, if any,
payable upon maturity or earlier
redemption of this Bond are payable when due upon the
presentation and surrender hereof at the
corporate trust office of Bank One, Texas, NA, in Fort Worth,
Texas, as trustee (the "Trustee"), or
any successor trustee. Each payment of interest on this Bond shall
be payable to the Registered
Owner hereof as shown on the registration books kept by the
Trustee at the close of business on the
Business Day (but, during an Adjustable Rate Period, the fifteenth
day of the calendar month) next
preceding the date on which such interest becomes due and payable
(herein, a "Record Date").
Interest on this Bond shall be payable to the Registered Owner
hereof by check mailed by first class
mail on the respective Interest Payment Dates (as hereinafter
defined) to the address of such
Registered Owner as shown on the books kept by the Trustee at the
close of business on the relevant
Record Date or such other address as is furnished to the Trustee (in
form satisfactory to the Trustee)
by such Owner prior to such Record Date. Registered Owners of
$1,000,000 or more in aggregate
principal amount of Bonds shall be entitled to receive interest
payments by wire transfer by providing
written wire instructions to the Trustee before the Record Date.
This Bond shall not be valid or become obligatory for any
purpose or be entitled to any security
or benefit under the Indenture until the Certificate of
Authentication hereon shall have been signed
by the Trustee or the Tender Agent.
This Bond is authorized and issued under and pursuant to
authority conferred by the Act,
certain proceedings of the Board of Directors of the Issuer and the
Indenture of Trust dated as of
April 1, 1994 (the "Indenture") between the Issuer and the
Trustee. Certain terms used and not
defined in this Bond are defined in the Indenture. This Bond is one
of the Issuer"s duly authorized
Industrial Development Revenue Bonds, Series 1994 (Trencor
Jetco, Inc. Project) (the "Bonds"),
which Bonds have been issued in the aggregate principal amount of
$8,000,000 to provide funds to
make a loan to Trencor Jetco, Inc., a Texas corporation (the
"Company") pursuant to a Loan
Agreement dated as of April 1, 1994 (the "Agreement") between
the Issuer and the Company. The
proceeds of the Bonds will be used to finance a portion of the costs
of acquisition, construction and
equipping of certain facilities (the "Project") located in the Unit.
As security for the payment of the
Bonds, the Company has caused to be delivered to the Trustee a
letter of credit (the "Initial Letter
of Credit") of The First National Bank of Chicago (the "Bank"),
against which the Trustee shall be
entitled to draw, in accordance with the terms thereof, to pay when
and as due, the principal or
purchase price of, and interest on, the Bonds during the term of the
Initial Letter of Credit. Under
certain conditions, the Company may cause to be delivered an
Alternate Credit Facility (an
"Alternate Credit Facility") in substitution for the Letter of
Credit then in effect without the consent
of the Owners of the Bonds. The Initial Letter of Credit, together
with any Alternate Credit Facility,
is hereinafter referred to as the "Letter of Credit". The Bonds are
guaranteed by Astec Industries,
Inc., a Tennessee corporation (the "Guarantor"), the owner of 100%
of the outstanding stock of the
Company, pursuant to a Guaranty Agreement dated April 1, 1994,
between the Guarantor and the
Trustee. The Bonds are not secured by any lien on or security
interest in the Project.
The Bonds are issued under and entitled to the benefits of
the Indenture. Pursuant to the
Indenture, the Issuer has pledged and assigned to the Trustee the
Trust Estate as security for its
obligation to pay the principal or purchase price of, premium, if
any, and interest on the Bonds.
Reference is made to the Indenture for a description of the Trust
Estate and for the provisions
thereof with respect to the nature and extent of the security granted
by the Issuer to the Trustee
thereunder, the rights, duties, and obligations of the Issuer and the
Trustee, the rights of the
registered Owners of the Bonds, and the terms on which the Bonds
are issued and secured, to all of
which provisions, and to all other provisions of the Indenture, the
Registered Owner hereof by the
acceptance of this Bond assents.
I. Weekly Rate Provisions
Optional Tender. During a Weekly Rate Period, this Bond
or any portion thereof in
Authorized Denominations (except during any period this Bond is a
Pledged Bond or Company
Bond) shall be purchased on the demand of the registered Owner
thereof on any Business Day at
a price equal to 100% of the principal amount thereof, plus accrued
and unpaid interest thereon to
the date of purchase, upon delivery to the tender agent duly
appointed in accordance with the
provisions of the Indenture (together with any successor tender
agent, the "Tender Agent") at its
Principal Office, on any Business Day, of (a) a written irrevocable
notice setting forth the information
required by the Indenture, including the date on which such Bond,
or the portion thereof being
tendered for purchase, shall be so purchased, which date shall be a
Business Day not prior to the
seventh day next succeeding the date of the delivery of such notice
to the Tender Agent, together
with (b) this Bond, as provided in the Indenture; provided, that if
the registered Owner of the
tendered Bond is an open-ended diversified management
investment company (registered under the
Investment Company Act of 1940, as amended), the delivery
required under this clause (b) need not
be made until the date such Bond is to be purchased from such
registered Owner as provided in the
Indenture. Notwithstanding the foregoing, if the Bonds, are held in
a Book-Entry System, separate
procedures for the optional tender of Bonds are set forth in the
Indenture.
Interest. During any period this Bond is in the Weekly Rate
Mode, interest on this Bond shall
be paid on the first Business Day of each month next succeeding
the Closing Date (if applicable),
each Weekly Rate Conversion Date, and on the Maturity Date
specified above or such other date
as the outstanding principal amount of the Bonds is paid in full if
the Bonds are in the Weekly Rate
Mode at such time (each, a "Weekly Rate Interest Payment
Date"), and shall be computed on the
basis of a 365- or 366-day year, for the actual number of days
elapsed. Interest on this Bond for each
Weekly Interest Period shall be calculated as provided below and in
the Indenture. During each
Weekly Rate Period, "Weekly Interest Period" shall mean the
period from and including the first day
of the Weekly Rate Period through and including the following
Tuesday, and after the first Weekly
Interest Period of each Weekly Rate Period, from and including
Wednesday of each week through
and including the following Tuesday, whether or not such days are
Business Days, provided, however,
the initial Weekly Interest Period shall commence on the Closing
Date and end on the following
Tuesday.
On Tuesday (unless Tuesday is not a Business Day, then on
the next preceding Monday; unless
Monday and Tuesday are not Business Days, then on the next
subsequent Wednesday, whether or
not a Business Day) of each calendar week during a Weekly Rate
Period, with respect to each
Weekly Interest Period, the Remarketing Agent shall determine the
Weekly Rate for the ensuing or
current (in the case of determinations made on Wednesday)
Weekly Interest Period. The
determination of the Weekly Rate by the Remarketing Agent shall
be conclusive and binding.
The Weekly Rate for each Weekly Interest Period
determined by the Remarketing Agent shall
be the lowest rate of interest which will, in the sole judgment of the
Remarketing Agent, having due
regard for prevailing financial market conditions, permit the Bonds
to be remarketed at a price of par,
plus accrued interest, on the first day of the applicable Weekly
Interest Period; provided that in no
case shall the Weekly Rate be more than the Maximum Rate. In
the event no Weekly Rate is
determined by the Remarketing Agent for a Weekly Interest Period,
the Weekly Rate for such
Weekly Interest Period shall be the rate from time to time
established pursuant to the Indenture.
II. Daily Rate Provisions
Optional Tender. During a Daily Rate Period, this Bond or
any portion thereof in Authorized
Denominations (except during any period this Bond is a Pledged
Bond or Company Bond) shall be
purchased on the demand of the registered Owner thereof on any
Business Day at a price equal to
100% of the principal amount thereof, plus accrued and unpaid
interest thereon to the date of
purchase, upon delivery (by telecopy of otherwise) to the Tender
Agent at its principal office, (a) by
10:30 a.m., New York time, on such Business Day, of a written
irrevocable notice, which will be
effective upon receipt, setting forth the information required by the
Indenture and (b) by 11:00 a.m.,
New York time, on such Business Day, this Bond, as provided in
the Indenture. Notwithstanding the
foregoing, if the Bonds are held in a Book-Entry System, separate
procedures for the optional tender
of Bonds are set forth in the Indenture.
Interest. During any period this Bond is in the Daily Rate
Mode, interest on this Bond shall
be paid on the first Business Day of each month next succeeding
the Closing Date (if applicable),
each Daily Rate Conversion Date, and on the Maturity Date
specified above or such other date as
the outstanding principal amount of the Bonds is paid in full if the
Bonds are in the Daily Rate Mode
at such time (each, a "Daily Rate Interest Payment Date"), and
shall be computed on the basis of
a 365- or 366-day year, for the actual number of days elapsed.
Interest on the Bonds for each Daily
Interest Period shall be calculated as provided below and in the
Indenture. During each Daily Rate
Period, "Daily Interest Period" shall mean the period from and
including the first day of the Daily
Rate Period to but excluding the immediately succeeding Business
Day.
On the first day of each Daily Interest Period, the
Remarketing Agent shall determine the
Daily Rate for such Daily Interest Period. The determination of the
Daily Rate by the Remarketing
Agent shall be conclusive and binding.
The Daily Rate for each Daily Interest Period determined by
the Remarketing Agent shall be
the lowest rate of interest which will, in the sole judgment of the
Remarketing Agent, having due
regard for prevailing financial market conditions, permit the Bonds
to be remarketed at a price of par,
plus accrued interest, on the first day of the applicable Daily
Interest Period; provided that in no case
shall the Daily Rate be more than the Maximum Rate. In the event
no Daily Rate is determined by
the Remarketing Agent for a Daily Interest Period, then the Bonds
shall thereupon bear interest at
the last Daily Rate previously determined pursuant to the Indenture.
III. CP Rate Provisions
From and after each CP Rate Conversion Date or a CP Rate
Reset Date, as appropriate, to
the earlier of their redemption, the following Conversion Date, or
the following CP Rate Reset Date,
the interest rate of this Bond shall be a CP Rate, determined as
provided below and in the Indenture.
When the Bonds are in the CP Rate Mode, in the case of each CP
Rate Period, on the first day
thereof, the Remarketing Agent shall determine (i) the duration of
the CP Rate Period and (ii) the
CP Rate which shall apply during such CP Rate Period. The
duration of the CP Rate Period so
determined shall be that which, in the sole judgment of the
Remarketing Agent will provide the
lowest overall interest cost with respect to the Bonds, with due
regard to prevailing financial market
conditions, foreseeable changes in such conditions, the anticipated
duration of the period the Bonds
may remain in the CP Rate Mode, and such other factors which the
Remarketing Agent, in its sole
judgment, shall deem relevant and economically advantageous to
consider. Upon determination of
the duration of the CP Rate Period, the Remarketing Agent shall
determine the CP Rate which shall
be in effect during such CP Rate Period, which shall be the lowest
rate of interest which, in the sole
judgment of the Remarketing Agent, having due regard to
prevailing financial market conditions, will
permit the Bonds to be sold at par, plus accrued interest, on the first
day of such CP Rate Period.
Notwithstanding the foregoing, the CP Rate so determined shall not
be more than the Maximum
Rate. Unless and until the Company elects to effect a conversion of
the Bonds from the CP Rate
Mode to another Mode, the Remarketing Agent shall continually
redetermine the duration of, and
the CP Rate to be effective during each new CP Rate Period, which
will commence, without further
action on the part of the Company on each CP Rate Reset Date. If
on any CP Rate Reset Date the
Remarketing Agent shall fail to determine either the duration of, or
the CP Rate to be effective
during the CP Rate Period which commences on such date, then,
without further action on the part
of the Company, the Bonds shall thereupon bear interest at the
Weekly Rate determined pursuant
to the Indenture. Each determination by the Remarketing Agent
shall be conclusive and binding.
While the Bonds are in the CP Rate Mode, interest on this Bond
will be payable on the first Business
Day which follows each CP Rate Period, and shall be computed on
the basis of a 365- or 366-day
year, and the actual number of days elapsed.
IV. Adjustable Rate Provisions
From and after each Adjustable Rate Conversion Date or
Adjustable Rate Reset Date, the
interest rate on this Bond shall be an Adjustable Rate, determined
as provided below and in the
Indenture. When the Bonds are in the Adjustable Rate Mode, the
Bonds will remain in such Mode
for as long as the Company continues to deliver timely conversion
notices specifying the duration of
the next Adjustable Rate Period. The Remarketing Agent, on or
prior to the commencement of each
Adjustable Rate Period, shall determine the Adjustable Rate to be
borne by the Bonds during such
Adjustable Rate Period, which will be the lowest rate which, in its
sole judgment having due regard
for prevailing financial market conditions, will permit the Bonds to
be sold at par on the first day of
such Adjustable Rate Period. Notwithstanding the foregoing, the
Adjustable Rate shall not be more
than the Maximum Rate. In the event no Adjustable Rate is
determined by the Remarketing Agent
for an Adjustable Rate Period, then the Bonds shall bear interest as
provided in the Indenture.
During each Adjustable Rate Period, interest on this Bond
shall be paid on each Adjustable
Rate Interest Payment Date and shall be computed on the basis of a
360-day year consisting of twelve
30-day months.
V. Conversion Provisions
The interest rate Mode of this Bond shall be converted from
one Mode to another Mode, or
from an Adjustable Rate Period of one duration to an Adjustable
Rate Period of the same or a
different duration within the Adjustable Rate Mode, if the Company
shall give notice as provided in
the Indenture of its election to effect such conversion, specifying in
such notice the date on which
the Conversion Date will occur (which date shall be at least 25 days
after such notice is given) and,
if the conversion is to an Adjustable Rate Period, specifying the
Interest Payment Date which shall
be the day following the last day of such Adjustable Rate Period
(which Adjustable Rate Period shall
be of a duration of at least six months). The Bonds shall be subject
to mandatory tender and
purchase on the Conversion Date. In the event any condition
precedent to the conversion of the
interest rate Mode of this Bond from one Mode to another Mode, or
from an Adjustable Rate
Period of one duration to an Adjustable Rate Period of the same or
a different duration, is not
satisfied, this Bond shall nonetheless be subject to mandatory
tender on the Conversion Date and the
Bonds shall commence bearing interest on the Conversion Date as
provided in the Indenture.
VI. Mandatory Tender
All Bonds are subject to mandatory tender in whole by the
Owners to the Tender Agent at its
Principal Office on each date described below:
(a) On each Conversion Date;
(b) On each CP Rate Reset Date;
(c) On the second Business Day prior to the expiration
or termination of the Letter of
Credit (except as provided in the Indenture), if the Trustee has not
received evidence satisfactory to
it as required by the Indenture by the 25th day preceding the
scheduled expiration or termination
date of the Letter of Credit of either an extension of the then
existing Letter of Credit or the
issuance of an Alternate Credit Facility meeting the requirements
set forth therefor in the
Agreement, including the Maintenance of Rating requirement (as
defined therein);
(d) On the date of substitution of an Alternate Credit
Facility for the then existing Letter
of Credit if the Trustee has not received evidence of a Maintenance
of Rating with respect thereto
by the 25th day preceding such substitution date;
(e) On each optional redemption date pursuant to the
Indenture for which the Company
has elected to purchase Bonds in lieu of optional redemption
pursuant to the Indenture; and
(f) On the date on which the Guaranty is released as
provided in the Indenture.
The purchase price of Bonds subject to mandatory tender
shall be 100% of the principal
amount thereof (except in the case of a mandatory tender described
in paragraph (c), (d), (e), or (f)
above, during, but prior to the expiration date of, an Adjustable
Rate Period, in which case the
purchase price shall include a premium equal to the then applicable
optional redemption premium,
if any, on the Bonds, as set forth in the Indenture), plus accrued
interest, if any, to the mandatory
tender date. Not later than 20 days prior to any mandatory tender
date, the Trustee shall mail notice
to all Owners of Bonds subject to mandatory tender on such date
stating that (1) due to the
occurrence of one of the events described above (which event shall
be specified), such Owner"s
Bonds will be subject to mandatory tender to the Tender Agent at
its Principal Office on the
mandatory tender date at the purchase price described above, and
(2) interest with respect to Bonds
which are not tendered on the mandatory tender date will cease to
accrue provided Available Moneys
for such purchase are on deposit with the Tender Agent on the
mandatory tender date. Notice of
mandatory tenders described in paragraphs (a) and (e) above shall
be given as part of the notice of
conversion or optional redemption referenced above. No failure on
the part of the Tender Agent
to give such notice shall affect the requirement that Bonds be
tendered on the mandatory tender
date.
Any Bond subject to mandatory tender which is not
tendered on or before the mandatory
tender date shall, if Available Moneys sufficient and available for
the purchase of such Bonds have
been deposited with the Tender Agent on the mandatory tender
date, be deemed to have been
tendered for purchase on the mandatory tender date, and from and
after such date, interest will no
longer accrue on such Bonds. Owners of such Bonds shall have no
rights or benefits under the
Indenture with respect to such Bonds other than to receive the
purchase price for such Bonds upon
surrender of such Bonds to the Tender Agent.
VII. Redemption of Bonds
The Bonds shall be subject to optional redemption only as
follows:
a. Weekly Rate Mode, CP Rate Mode, or Daily Rate
Mode. While the Bonds are in the
Weekly Rate Mode or the Daily Rate Mode, they are subject to
optional redemption, in whole or
in part on any Business Day in Authorized Denominations, and
while the Bonds are in the CP Rate
Mode, they are subject to optional redemption in whole or in part in
Authorized Denominations on
any Interest Payment Date, at the direction of the Company, at a
redemption price equal to 100%
of the principal amount of the Bond to be redeemed, plus accrued
interest thereon to the redemption
date.
b. Adjustable Rate Mode. While the Bonds are in
the Adjustable Rate Mode, they are
subject to optional redemption in whole or in part on any date, at
the direction of the Company, only
on the dates and at the applicable redemption prices set forth in the
Indenture.
While the Bonds are in the Adjustable Rate Mode or the CP
Rate Mode, the Bonds are
subject to extraordinary optional redemption in whole on any date
at a redemption price equal to the
principal amount of Bonds plus accrued interest to the redemption
date, without premium, upon the
occurrence of certain events specified in the Indenture.
The Bonds in any Mode are subject to mandatory
redemption in whole on the next date for
which timely notice of redemption can be given by the Trustee after
the occurrence of a
Determination of Taxability at a redemption price equal to the
aggregate principal amount of the
Bonds plus accrued interest thereon to the redemption date, without
premium.
At least 30 days prior to any redemption of Bonds, the
Trustee shall cause notice of the call
for redemption to be sent by first class mail, postage prepaid, to the
Owner of each Bond to be
redeemed at the address of such Owner shown on the registration
books maintained by the Trustee.
Neither the failure to give any such notice nor any defect in any
notice so mailed shall affect the
sufficiency or the validity of any proceedings for the redemption of
the Bonds.
If Available Moneys are deposited in the Bond Fund on the
date Bonds are to be redeemed,
Bonds or portions thereof redeemed shall no longer be secured by
this Indenture and shall not be
deemed to be outstanding under the provisions of this Indenture.
Interest shall not continue to
accrue on the Bonds after the date fixed for redemption, so long as
Available Moneys are on deposit
to pay all principal of, premium, if any, and interest accrued on the
Bonds on such date. However,
if Available Moneys shall not be on deposit on the redemption date,
such Bonds or portions thereof
shall continue to bear interest until paid at the same rate as they
would have borne had they not been
called for redemption.
Any partial redemption of Bonds shall be made only in
integral multiples of $100,000. If fewer
than all of the Bonds shall be called for redemption, the portion of
Bonds to be redeemed shall be
selected by the Trustee as provided in the Indenture.
VIII. General Provisions
Except as provided in the Indenture, the Ownership of this
Bond may be transferred (in
Authorized Denominations) only upon presentation and surrender
of this Bond at the corporate trust
office of the Trustee, together with an assignment duly executed by
the Registered Owner hereof or
his duly authorized attorney-in-fact in such form as shall be
satisfactory to the Trustee.
Provisions may be made for the payment of amounts
represented by the Bonds as provided in
the Indenture, in which event all liability of the Issuer to the
Owners of the applicable Bonds for the
payment of such Bonds shall forthwith cease, terminate, and be
completely discharged, and thereupon
it shall be the duty of the Trustee to hold such funds (but only for
the period specified and as
provided in the Indenture), without liability for interest thereon, for
the benefit of the Owners of
such Bonds, who shall thereafter be restricted exclusively to such
funds for any claims of whatever
nature under the Indenture or on, or with respect to, said Bonds.
It is hereby certified and covenanted that this Bond has been
duly and validly authorized,
issued, and delivered; that all acts, conditions, and things required
or proper to be performed, exist
and be done precedent to or in the authorization, issuance, and
delivery of this Bond have been
performed, exist, and have been done in accordance with law.
The Bonds are secured by the Indenture, whereunder the
Trustee undertakes to enforce the
rights of the Owners of the Bonds and to perform other duties to the
extent and under the conditions
stated in the Indenture. In case an Event of Default shall occur, the
principal of and interest on the
Bonds then outstanding may, and, under certain circumstances,
shall, be declared to be due and
payable immediately upon the conditions and in the manner
provided in the Indenture. Under the
circumstances and conditions provided in the Indenture, the
Trustee may, or shall, waive any Event
of Default under the Indenture and its consequences.
The Issuer has reserved the right to amend the Indenture,
with the consent of the Bank, as
provided therein. Under some (but not all) circumstances,
amendments thereto must also be
approved by the Owners of either at least a majority or 100% in
aggregate principal amount of the
outstanding Bonds.
In Witness Whereof, the Issuer has caused this Bond to be
executed in its name by the
manual or facsimile signature of its President or Vice President and
attested with the manual or
facsimile signature of the Secretary of Assistant Secretary all as of
the date first above written.
[Seal]
Attest:______________________________________
By:_______________________________________
By Authorized Officer Authorized Officer
This Bond is hereby authenticated as required by the
within-referenced Indenture of Trust.
Authorized Officer of Trustee or Tender Agent
Date of Authentication: ____________________
Assignment
For value received, the undersigned hereby sells, assigns,
and transfers unto
___________________ the within Bond, and does hereby
irrevocably constitute and appoint
___________________, attorney to transfer such Bond on the
books kept for registration and transfer
of the within Bond, with full power of substitution in the premises.
Dated: __________________
Note: The signature to this Assignment must correspond with the
name as it appears upon the face
of the within Bond in every particular, without enlargement or
alteration or any change whatsoever.
Signature guaranteed by:
_______________________________________Note: The
signature to this assignment must correspond
with the name as it appears upon the face of the within Bond in
every particular, without alteration
or enlargement or any change whatever. Signature(s) must be
guaranteed by an "eligible guarantor
institution" meeting the requirements of the Trustee, which
requirements include membership or
participation in Stamp or such other "signature guaranty
program" as may be determined by the
Trustee in addition to or in substitution for Stamp, all in
accordance with the Securities Exchange
Act of 1934, as amended.
Registration Information
Under the terms of the Indenture, the Trustee will register a
Bond in the name of a transferee
only if the Owner of such Bond (or his duly authorized
representative) provides as much of the
information requested below as is applicable to such Owner prior to
submitting this Bond for transfer.
Name: _______________________________________
Address: _____________________________________
Social Security or Employer Identification Number:
_______________________
If a Trust, Name, and Address of Trustee(s) and Date of Trust:
__________________
TABLE OF CONTENTS
Page
Recitals1
Article I
Definitions and Interpretation
Section 1.01. Definitions 3
Section 1.02 Article and Section Headings 11
Section 1.03. Interpretation 11
Article II
Authorization and Issuance of the Bonds
Section 2.01. Authorization of Bonds; No Additional Bonds 11
Section 2.02. Issuance of Bonds; Terms of Bonds 11
Section 2.03. Optional Tender 16
Section 2.04. Mandatory Tenders 18
Section 2.05. Form of Bonds 19
Section 2.06. Execution and Authentication of Bonds; Limited
Obligations 19
Section 2.07. Registration and Exchange of Bonds; Persons
Treated as Owners 20
Section 2.08. Mutilated, Lost, Stolen, or Destroyed Bonds 21
Section 2.09. Cancellation of Bonds 21
Section 2.10. Temporary Bonds 21
Section 2.11. Conditions Precedent to Authentication and
Delivery of Bonds 21
Section 2.12. Book-Entry System 22
Article III
Redemption of Bonds; Purchase and Remarketing of Bonds
Section 3.01. Optional Redemption 23
Section 3.02. Extraordinary Optional Redemption 25
Section 3.03. Mandatory Redemption 25
Section 3.04. Notice of Redemption 25
Section 3.05. Effect of Availability of Redemption Prices 26
Section 3.06. Partial Redemption 26
Section 3.07. Purchase of Tendered Bonds 27
Section 3.08. Remarketing of Tendered Bonds; Payment of
Purchase Price 27
Section 3.09. Funds for Purchase Price of Bonds 29
Section 3.10. Delivery of Purchased Bonds 29
Section 3.11. Pledged Bonds 30
Article IV
General Provisions
Section 4.01. Payment of Principal, Premium, if any, and
Interest 31
Section 4.02. Instruments of Further Assurance 31
Section 4.03. Tax-Exempt Status of Bonds 31
Section 4.04. Books, Records and Accounts 31
Section 4.05. Notice to Rating Agencies 32
Article V
Revenues and Funds; Letter of Credit
Section 5.01. Application of Original Proceeds of Bonds 32
Section 5.02. Bond Fund 32
Section 5.03. Letter of Credit; Alternate Credit Facility 33
Section 5.04. Letter of Credit Draws and Bond Fund Moneys to
Pay Principal, Premium, or Interest 35
Section 5.05. Investment of Moneys 35
Section 5.06. Moneys to Be Held in Trust; Nonpresentment of
Bonds 36
Section 5.07. Repayment from Indenture Funds 36
Section 5.08. Tax Covenants 37
Section 5.09. Custody of Funds and Accounts 37
Section 5.10. Rebate Fund, Rebate 37
Section 5.11. Payments in the Project Account; Disbursements. 38
Section 5.12. Completion of Project 39
Section 5.13. Transfer of Construction Fund 39
Section 5.14. Custody of Funds and Accounts 39
Article VI
Defaults and Remedies
Section 6.01. Events of Default 40
Section 6.02. Acceleration 41
Section 6.03. Other Remedies 41
Section 6.04. Waiver of Past Defaults 41
Section 6.05. Control by Majority 42
Section 6.06. Limitation on Suits 42
Section 6.07. Rights of Owners to Receive Payment 42
Section 6.08. Collection Suit by Trustee 42
Section 6.09. Trustee May File Proofs of Claim 42
Section 6.10. Priorities 42
Section 6.11. Bank Deemed Owner of Certain Bonds 43
Section 6.12. Bank Rights 43
Article VII
Trustee, Remarketing Agent, and Tender Agent
Section 7.01. Duties of Trustee 43
Section 7.02. Rights of Trustee 44
Section 7.03. Individual Rights of Trustee 44
Section 7.04. Trustee"s Disclaimer 44
Section 7.05. Notice of Defaults 45
Section 7.06. Compensation and Indemnity of Trustee 45
Section 7.07. Eligibility of Trustee 45
Section 7.08. Replacement of Trustee 45
Section 7.09. Duties of Remarketing Agent 46
Section 7.10. Eligibility of Remarketing Agent; Replacement 46
Section 7.11. Tender Agent 47
Section 7.12. Successor Trustee, Remarketing Agent, or Tender
Agent by Merger 47
Article VIII
Supplemental Indentures
Section 8.01. Without Consent of Owners 48
Section 8.02. With Consent of Owners 48
Section 8.03. Effect of Consents 48
Section 8.04. Notation on or Exchange of Bonds 49
Section 8.05. Execution and Delivery by Trustee of
Amendments and Supplements 49
Section 8.06. Company and Bank Consent Required 49
Section 8.07. Notice to Owners 49
Article IX
Amendment of Agreement, Guaranty, or Letter of Credit
Section 9.01. Without Consent of Owners 49
Section 9.02. With Consent of Owners 49
Section 9.03. Bank Consent Required 50
Section 9.04. Modifications of Letter of Credit 50
Section 9.05. Release of Guaranty 50
Article X
Discharge of Indenture
Section 10.01. Bonds Deemed Paid; Discharge of Indenture 50
Section 10.02. Application of Trust Money 51
Section 10.03. Repayment to Bank and Company 51
Article XI
Miscellaneous
Section 11.01. Owners" Consent 51
Section 11.02. Limitation of Rights 52
Section 11.03. No Personal Liability of Issuer 52
Section 11.04. Severability 52
Section 11.05. Notices 52
Section 11.06. Payments or Performance Due on Other Than
Business Day 54
Section 11.07. Execution of Counterparts 54
Section 11.08. Applicable Law 54
Section 11.09. Notice to Texas Department of Commerce of
Certain Matters 54
Section 11.10. Exceptions to Requirements of Bank Consent 54
Execution55
Exhibit A - Bond Form
EXHIBIT 10.80
GUARANTY
For and in consideration of all claims which
Dresdner Bank Aktiengesellschaft and/or any of
its domestic and/or foreign offices and branches
(hereinafter referred to as "Bank") now has or
which it may hereafter have against
Wibau-Astec Maschinenfabrik GmbH (Principal
Debtor)
based on the mutual business relationship
(including but not limited to those arising from
current accounts and bills of exchange), we hereby
unconditionally and irrevocably guarantee without
any time limitation the punctual payment to the
Bank of the indebtedness and obligations of the
Principal Debtor up to a maximum amount of
DM 7,500,000,
in letters: Seven Million Five hundred thousand
Deutsch Marks
plus accrued interest, commissions, expenses and
all costs. The maximum amount stated above is
increased from time to time to the extent that,
upon balancing the account, interest, commissions,
costs and expenses are added to the principal and
the newly arrived aggregate principal exceeds the
previous maximum amount of this guaranty.
Our guaranty is given in order to induce the Bank
to grant to the Principal Debtor in its discretion
future loans or other credits, to extend the period
or other terms of existing credits, to forbear the
exercise of possible rights of premature
termination or changes in conditions and for other
good and valid business considerations.
We hereby waive (i) promptness, diligence,
presentment, demand of payment and protest; (ii)
all notices (whether of non-payment, dishonor,
protest or otherwise) with respect to the
guaranteed obligations; (iii) notice of acceptance of
this guaranty; (iv) any requirement that the Bank
exhaust any right or take any action against the
Principal Debtor, any other obligor in respect of
the guaranteed obligations or any other person or
any collateral.
This is a continuing guaranty which shall remain
in effect up to its full aggregate amount until the
Bank's claims are fully satisfied, even in the event
(i) of the death, bankruptcy, dissolution, winding
up or any other procedure with a similar effect of
the Principal Debtor or (ii) the Bank grants the
Principal Debtor an extension or (iii) waives any
security (including but not limited to liens or other
collateral) securing its claims against the Principal
Debtor, regardless whether such rights, liens or
securities are already in existence or subsequently
arise. Moreover, no defenses shall arise against
claims based on this guaranty due to the fact that
the Bank grants new credits to the Principal
Debtor, delays the collection of the guaranteed
claims or consents to a judicial composition.
Our liability based on this guaranty shall not be
affected by termination of our position as partner
or shareholder of the Principal Debtor and shall
also continue to be fully effective in case of a
merger or an amalgamation of the Principal
Debtor.
This guaranty shall not be affected by any
circumstance affecting the obligations of the
Principal Debtor to meet its liabilities or by any
alteration in its statutes or by any defect in, or
irregular exercises of the borrowing powers of the
Principal Debtor or the invalidity of or defect in
any document or security delivered to the Bank.
This guaranty shall not be affected by temporary
repayment of the guaranteed obligations by the
Principal Debtor as long as the credit arrangement
continues and/or a current account is maintained
with the Bank; payments made by the Principal
Debtor shall reduce our obligations under this
guaranty only to the extent the remaining claims
of the Bank fall below the amount covered by this
guaranty. We hereby waive the benefits of any
right of set-off or counterclaim.
We will not exercise any rights which we may
acquire by way of subrogation until all the
obligations to the Bank shall have been paid in
full. If any amount shall be paid to us in violation
of the preceding sentence, such amount shall be
held in trust for the benefit of the Bank and shall
forthwith be paid to the Bank to be credited and
applied to the obligations, whether matured or
unmatured.
We hereby represent and warrant that our
obligation in respect of this guaranty has been
duly authorized by all corporate, legislative,
administrative and other governmental action, and
that we have obtained all such authorizations and
approvals, given such notices and made such
filings and taken such other actions as may be
necessary to ensure the enforceability of our
obligations under this guaranty in accordance with
its terms.
We will pay to the Bank on demand all costs and
expenses (including but not limited to attorney's
fees) incurred by the Bank in connection with the
enforcement of our obligations hereunder.
This guaranty shall be binding upon our
heirs/successors.
This guaranty is subject to the General Business
Conditions of the Bank which are attached hereto
on which we have duly countersigned.
Should any provision contained in this guaranty be
found invalid, such invalidity shall not affect the
validity of the remaining provisions of this
guaranty which shall continue in full force and
effect.
The place of performance and jurisdictional venue
for all obligations arising from this guaranty shall
be Frankfurt am Main; the courts of this venue
shall have exclusive jurisdiction for claims against
the Bank. The Bank, however, shall also be entitled
in its discretion to assert its claims resulting from
this guaranty at our legal domicile/seat.
All rights and obligations resulting from this
guaranty shall be subject to the laws of the
Federal Republic of Germany.
IN WITNESS WHEREOF, the guarantor, Astec
Industries, Inc., a corporation organized and
existing under and by virtue of the laws of the
state of Tennessee, has pursuant to a resolution of
the board caused this instrument to be duly
executed in its name, on its behalf and under its
corporate seal, signed by its president and
secretary, and delivered to the Bank this 22nd day
of December, 1993.
Chattanooga, Tennessee (place of issue)
Astec Industries, Inc. (Guarantor)
P.O. Box 72787
Chattanooga, TN
Albert E. Guth
Senior Vice President
Albert E. Guth
Secretary
EXHIBIT 10.81
LETTER OF GUARANTEE
Messrs.
ASTEC Industries, Inc.
4101 Jerome Avenue
Chattanooga, TN 37407 / USA
hereby assumes in favor of
Berliner Hondels - und Frankfurter Bank
Bockenheimer Landstrale 10
60323 Frankfurt am Main / Germany
hereinafter called "BHF-BANK"
for any present or future claims - including
conditional or limited claims - to which the BHF-
BANK, and all other offices of the institution as a
whole, is entitled as a result of the banking
business relationship against Messrs.
Wibau Astec
Meschinenfabrik GmbH
Wibaustrabe
63584 Grandau / Germany
hereinafter called "Principal Debtor"
the joint absolute guarantee in the amount of
DM 5,000,000.00
(in words: Deutsche Mark five million)
hereinafter called "Principal Sum"
plus cost and interest as indicated in chapter 1).
If the Principal Debtor has assumed towards BHF-
BANK the liability for debts of third parties (i.e.
guarantee), this guarantee covers such liabilities
with the beginning from their respective due
dates.
This guarantee is subject to the following
provisions:
1) Exceeding the maximum amount
The Principal Sum will be increased by
interest and any kind of expenses and charges to
be paid on the Principal Sum covered by the
guarantee or arising by the enforcement thereof,
limited to maximum sum in the amount of 20% of
the Principal Sum. This also applies if the
aforementioned amounts are added to the principal
by balance determination on the current account.
They can be claimed in addition to the Principal
Sum.
2) Continued existence of the guarantee
obligation
The guarantee exists until termination of
the business relationship and until all secured
claims of the BHF-BANK have been satisfied; it
does, in particular, not expire through any
temporary repayment of the credits or because the
BHF-BANK does not give the Guarantor
confirmation of the existence of the guarantee at
regular intervals. A claim to be released from the
guarantee obligation (Art. 775 BGB German Civil
Code) may only be asserted against the Principal
Debtor with the prior written approval of the BHF-
BANK.
3) Payments made by the Guarantor and their
effect
Payments made by the Guarantor shall
as collateral for his guarantee obligation until all
claims or the BHF-BANK against the Principal
Debtor, which are existing at the time or payment
under this guarantee, have been completely
fulfilled. Only then will the claims of the BHF-
BANK against the Principal Debtor devolve upon
the Guarantor. The BHF-BANK is, however, entitled
to satisfy its claims at any time from amounts
paid by the Guarantor. After devolution of the
claims, the BHF-BANK has to transfer to the
Guarantor any collateral granted for the secured
claims by the Principal Debtor or a third party
only to the extent that the security-furnishing
party has assigned and transferred to the
Guarantor its claim against the BHF-BANK as to
retransfer of the collateral or that the has
expressly agreed to the transfer to the Guarantor.
This does not apply to any collateral devolving
upon the Guarantor by operation of law.
4) Application of other incoming payments
The BHF-BANK is entitled to apply proceeds
from collateral, payments by the Principal Debtor
or payments for his account and counterclaims of
the latter, to claims which are not covered by this
guarantee.
5) Several Guarantors / guarantees / Principal
Debtors
The validity of this guarantee is independent
of any guarantees already or in future entered into
by the Guarantor or a third party. The creation of
joint guarantees is excluded, and each Guarantor
is liable for the total amounts covered by this
guarantee.
If there are several Principal Debtors, the
guarantee also includes the claims against each
individual Principal Debtor.
6) Waiver of pleas and defenses
The Guarantor acknowledges as binding upon
himself any measures and agreements which the
BHF-BANK may make with the Principal Debtor or
considers useful for asserting the claims covered
by his guarantee or for enforcing other security
interest. The guarantee is, in particular, valid
regardless of the provisions and the legal
existence of other collateral and also remains
effective without any change if the BHF-BANK
releases any collateral which has been or will in
future be otherwise provided to it. The BHF-BANK
is not obliged to resort to other collateral before
demanding payment under this guarantee.
The Guarantor shall raise no defense if the
BHF-BANK postpones the collection of the
principal debt or grants further credits and/or
extensions to the Principal Debtor. The Guarantor
waives the defenses of prior proceedings against
the Principal Debtor (Art. 773 German Civil Code),
of voidability and of set-off.
The liability under this guarantee also
remains unaffected if the Principal Debtor is
unable, even if only temporarily, to convert and/or
transfer the debt amount in the currency owed.
The Guarantor shall also raise no defense if a
prohibition on payment, even if only limited in
time, is imposed on the Principal Debtor.
7) Information on the situation of the principal
debt
The BHF-BANK shall only inform the
Guarantor of the situation of the principal debt if
the Principal Debt or has given his written
approval thereto.
8) Incidental provisions
This guarantee shall be governed by and
construed in accordance with the laws of the
Federal Republic of Germany.
If the Guarantor is a legal entity under
public law, a special fund under public law or a
businessman not as defined by Art. 4 HGB
(Commercial Code), or if the Guarantor has no
general place of jurisdiction within the country,
the courts in Frankfurt am Main as well as those
courts which are competent for that office of the
BHF-BANK where the account is maintained, shall
have jurisdiction with regard to any disputes
arising under this guarantee. If the Guarantor is
domiciled outside the Federal Republic of
Germany, the BHF-BANK is entitled to sue the
Guarantor at his domicile or any other permissible
place of jurisdiction.
Amendments to the guarantee - including
this provision - as well as additional agreements
must be made in writing in order to be legally
effective.
Should any provision of his agreement be or
become ineffective, the effectiveness of the other
provisions remains unaffected thereby.
Chattanooga, Tennessee
December 22, 1993
Albert E. Guth
ASTEC Industries, Inc.
EXHIBIT 10.82
TO: Bayerische Vereinsbank
Aktiengesellschaft
Frankfort Branch
GUARANTEE
For valuable consideration, and to induce Bayerische Vereinsbank
Aktiengesellschaft, Munich, Federal Republic of German and/or
any of its offices and branches ("Bank"), to grant or continue to
grant overdraft credit facilities or other credit or banking facilities
("Credit") from time to time as it may deem fit and at its discretion
to Wibau Astec GmbH ("Borrower") the undersigned Astec
Industries, Inc. ("Guarantor") hereby unconditionally guarantees
and promises that all obligations (including principal, interest and
charges) at any time owing by the Borrower to the Bank in respect
of such Credit will be promptly paid in full when due (at stated
maturity, by acceleration or otherwise).
The liability of the Guarantor under this Guarantee shall not exceed
at anyone time the sum of DM 5,000,000 (Deutsche Mark five
million), plus all interest, cost and fees upon the Credit or upon
such part thereof as shall not exceed the foregoing limitation.
Notwithstanding the foregoing the Bank may permit the Credit of
the Borrower to exceed Guarantor's liability.
This is a continuing guarantee. The Guarantor consents that
without notice to it the maturity of any obligation of the Borrower
may be renewed or the terms thereof waived or varied, or any
collateral or other security therefore may be released, exchanged or
otherwise dealt with, all as the bank may determine. The
Guarantor agrees that its liability hereunder shall be unconditional
irrespective of any circumstances which might otherwise
constitutes a discharge of a surety or guarantor, and waives
diligence, presentment, protest and all notices and demands
whatsoever, including notice of acceptance of this Guarantee or of
any extension of credit and any requirement that any right or power
be exhausted or any action be taken against the Borrower or
against any collateral or other security held by the Bank.
The Guarantor agrees that all payments (whether of principal,
interest or otherwise) to be made by it hereunder shall be made to
the Bank at its Head Office in Munich in the legal currency of the
Federal Republic of Germany. All payments (whether of
principal, interest or otherwise) to be made by the Guarantor to the
Bank hereunder shall be made free and clear of and without
deduction for any taxes, levies, imposts, duties, charges, fees,
deductions, withholdings, restrictions or conditions of any nature
now or hereinafter imposed by any governmental authority in any
jurisdiction or any political subdivision or banking authority
thereof or therein. If at any time any applicable law requires the
Guarantor to make any such deduction or withholding from any
such payment, the sum due from the Guarantor in respect of such
payment shall be increased to the extent necessary to insure that,
after the making of such deduction or withholding, the Bank
receives a net sum equal to the sum which it would have received if
no such deduction or withholding had been required to be made.
No payment by the Guarantor hereunder shall entitle the
Guarantor, by subrogation to the rights of the Bank or otherwise,
to any payment by the Borrower or out of the property of the
Borrower, except after payment in full of all obligations (whether
or not guaranteed hereby) which may be or become payable by the
Borrower to the Bank. The Bank's statement of account shall
represent conclusive proof of the claim of the Bank against the
Borrower, except for manifest error.
The obligations of the Guarantor hereunder shall not be affected by
the receipt by the Bank of the proceeds of any collateral or other
security held by the Bank. In case at any time the Bank shall be
required for any reason to repay any amount received by it from
the Borrower or from any collateral or other security held by the
Bank on account of any obligation guaranteed hereby, then the
liability of the Guarantor in respect of such obligation shall be
restored. The Guarantor's liability hereunder shall not be affected
by termination of its position as partner or shareholder of the
Borrower.
The Guarantor shall pay all taxes (including stamp taxes and
registration fees) imposed in the United States with respect to this
Guarantee, and the obligation of the Guarantor to pay such amount
shall survive the discharge of the other obligations of the
Guarantor hereunder.
This Guarantee shall be valid until 3 December 1994 any claim
under this Guarantee must have reached us no later than 5
December 1994.
This Guarantee shall be governed by the law of the State of New
York of the United States of America.
In connection with any dispute which may arise under this
Guarantee the Guarantor hereby irrevocably submits to consents to
and waives any objection to the* jurisdiction of the courts of the
State of New York located in the County of New York and of the
United States District Court for the Southern District of New York
or a the Bank's option to the Courts of any jurisdiction in which
the Guarantor or any of its assets may be located and waives any
objection to the laying of such venue in such court. The Guarantor
admits that any such disputes may be resolved at least as
conveniently in such a court as in any other court and will not seek
dismissal or a change of venue on the ground that resolution of
such a dispute in any such court is not convenient or in the interest
of justice.
IN WITNESS thereof, the undersigned has caused this instrument
to be duly executed by its proper officers this _____ day of
______________, 1993.
ASTEC INDUSTRIES, INC.
By: /s/ Albert E. Guth
EXHIBIT 10.83
Loan Agreement
dated as of April 1, 1994
between
Grapevine Industrial Development Corporation
and
Trencor Jetco, Inc.
$8,000,000
Industrial Development Revenue Bonds, Series 1994
(Trencor Jetco, Inc. Project)
Loan Agreement dated as of April 1, 1994, between
Grapevine Industrial Development
Corporation (Issuer), a Texas non-profit corporation and
instrumentality of the City of Grapevine, Texas (the "Unit"), and Trencor
Jetco, Inc., a Texas corporation (the Company).
WHEREAS, the Issuer is a constituted authority and
instrumentality acting on behalf of the Unit and has been organized pursuant
to the Development Corporation Act of 1979, Article 5190.6
Tex. Rev. Civ. Stat. ann, as amended (the "Act"); and
WHEREAS, the Issuer is authorized under the Act to issue
and sell its bonds and to lend the proceeds thereof to assist the Unit in its
economic development and to carry out the public purposes
of the Act, including, among others, the financing of manufacturing and
industrial facilities; and
WHEREAS, the Company has requested financial
assistance from the Issuer to finance a project (the "Project") as described in
Exhibit A hereto; and
WHEREAS, the Issuer is authorized by the Act to finance
the Project for the Company by issuing its bonds and loaning the proceeds
thereof to the Company; and
WHEREAS, the Issuer intends to issue its industrial
development revenue bonds, to be known generally as "Grapevine Industrial
Development Corporation Industrial Development Revenue Bonds,
Series 1994 (Trencor Jetco, Inc. Project)" (the "Bonds"), the
proceeds of which will be utilized by the Company to pay costs of the Project;
and
WHEREAS, the Bonds will be issued under the terms of an
Indenture of Trust (the "Indenture") of even date herewith between the Issuer
and Bank One, Texas, NA, as trustee (the "Trustee"); and
Accordingly, the Issuer and the Company hereby agree as follows:
Article I
Definitions
For all purposes of this Agreement, unless the context
clearly requires otherwise, all terms defined in Article I of the Indenture
have the same meanings in this Agreement.
Article II
Representations
Section 2.1. Representations of Issuer. The Issuer
represents as follows:
(a) The Issuer (1) is duly organized and existing under
the laws of the State, (2) has full power and authority to enter into the
transactions contemplated by this Agreement, the Tax
Agreement, the Offering Agreement, and the Indenture and to carry
out its obligations under this Agreement, the Tax Agreement, the Offering
Agreement, and the Indenture, including the issuance of the Bonds, (3) is not
in default under any provisions of the laws of the State, and (4) by proper
corporate action has duly authorized the execution and delivery of
this Agreement, the Bonds, the Tax Agreement, the Offering Agreement, and
the Indenture.
(b) Under existing statutes and decisions, no taxes on
income or profits are imposed on the Issuer. The Issuer will not knowingly
take or omit to take any action reasonably within its control which action or
omission would impair the exclusion of interest paid on the Bonds from the
federal gross income of the owners of the Bonds.
(c) Neither the execution and delivery by the Issuer of
this Agreement, the Indenture, the Tax Agreement, or the Offering
Agreement nor the consummation by the Issuer of the transactions
contemplated hereby or thereby conflicts with, will result in a
breach of or default under or will (except with respect to the lien of the
Indenture) result in the imposition of any lien on any property
of the Issuer pursuant to the terms, conditions or provisions of any
statute, order, rule, regulation, agreement or instrument to which the Issuer
is a party or by which it is bound.
(d) Each of this Agreement, the Tax Agreement, the
Offering Agreement, and the Indenture has been duly authorized, executed,
and delivered by the Issuer and each constitutes the legal, valid, and binding
obligation of the Issuer enforceable against the Issuer in accordance with its
terms.
(e) There is no litigation or proceeding pending, or to
the knowledge of the Issuer threatened, against the Issuer, or to the
knowledge of the Issuer affecting it, which would adversely
affect the validity of this Agreement, the Indenture, the Tax
Agreement, the Offering Agreement, or the Bonds or the ability of the Issuer
to comply with its obligations under this Agreement, the Indenture, the Tax
Agreement, the Offering Agreement, or the Bonds.
(f) The Issuer is not in default under any of the
provisions of the laws of the State which would affect its existence or its
powers referred to in the preceding subsection (a).
(g) The Issuer hereby finds and determines that, based
on representations of the Company,
all requirements of the Act have been complied with and that the
financing of the Project through the issuance of the Bonds will further the
public purposes of the Act.
(h) No member, director, officer, or official of the
Issuer has any interest (financial, employment or other) in the Company or
the transactions contemplated by this Agreement.
(i) The Issuer will apply the proceeds from the sale of
the Bonds as specified in the Indenture and this Agreement. So long as any
of the Bonds remain outstanding and except as may
be authorized by the Indenture, the Issuer will not issue or sell any
bonds or obligations, other than the Bonds, the principal of or premium, if
any, or interest on which will be payable from the property
described in the granting clause of the Indenture.
(j) The Project is wholly located within the corporate
limits of the Unit.
(k) The representations and warranties of the Issuer
contained in the Offering Agreement are incorporated by reference herein and
are true and correct in all material respects on the Closing Date.
Section 2.2. Representations of Company. The Company
represents as follows:
(a) The Company (1) is a corporation duly
incorporated and in good standing in the State of Texas, (2) is duly qualified
to transact business and in good standing in the State, (3) is not in
violation of any provision of its certificate of incorporation or its
by-laws, (4) has full corporate power to own its properties and conduct its
business, (5) has full legal right, power, and authority to enter
into this Agreement, the Reimbursement Agreement, the Tax
Agreement, the Remarketing Agreement, and the Offering Agreement and
consummate all transactions contemplated by this
Agreement, the Reimbursement Agreement, the Tax Agreement,
the Remarketing Agreement, and the Offering Agreement and (6) by proper
corporate action has duly authorized the execution and
delivery of this Agreement, the Reimbursement Agreement, the Tax
Agreement, the Remarketing Agreement, and the Offering Agreement .
(b) Neither the execution and delivery by the Company
of this Agreement, the Reimbursement Agreement, the Tax Agreement, the
Remarketing Agreement, or the Offering Agreement nor the consummation
by the Company of the transactions contemplated hereby or
thereby conflicts with, will result in a breach of or default under, or
will result in the imposition of any lien on any property of the Company
pursuant to the certificate of incorporation or by-laws of
the Company or the terms, conditions or provisions of any statute,
order, rule, regulation, agreement, or instrument to which the Company is a
party or by which it is bound.
(c) This Agreement, the Reimbursement Agreement,
the Tax Agreement, the Remarketing Agreement, and the Offering
Agreement have been duly authorized, executed, and delivered by the
Company and constitute the legal, valid, and binding obligations of
the Company in accordance with its terms.
(d) There is no litigation or proceeding pending, or to
the knowledge of the Company threatened, against the Company which could
adversely affect the validity of this Agreement, the
Reimbursement Agreement, the Tax Agreement, the Remarketing
Agreement, or the Offering Agreement or the ability of the Company to
comply with its obligations under this Agreement, the
Reimbursement Agreement, the Tax Agreement, the Remarketing
Agreement, or the Offering Agreement.
(e) The information contained in the Tax Agreement,
the Project Certificate, and all other written information relating to the
Project provided by the Company to the Issuer and Bond Counsel
for the Bonds is true and correct.
(f) The Project is wholly located within the corporate
limits of the Unit.
(g) The representations and warranties of the
Company contained in the Offering Agreement are incorporated by reference
herein and are true and correct in all material respects on the Closing Date.
(h) The Company agrees that at all times during the
terms of this Agreement it will operate the Project in compliance with the
Act.
(i) The Project is of the type authorized and permitted
by the Act.
(j) The Company will not take or permit to be taken
any action which would have the effect, directly or indirectly, of subjecting
interest on any of the Bonds to federal income taxation.
(k) The Project complies with all presently applicable
building and zoning ordinances, or is permitted as a special exception under
such building and zoning ordinances.
(l) The Company agrees to cooperate with the Issuer
in the performance of the Issuer's obligations under the Indenture.
(m) The Company will comply in all material respects
with the requirements of all federal, state and local environmental and health
and safety laws, rules, regulations, and orders applicable to
or pertaining to the Project.
(n) The Company hereby agrees (a) to take or cause to
be taken all actions necessary or appropriate in order to fully comply with
Section 5.10 of the Indenture and (b) if required to do so
under Section 5.10 of the Indenture, to designate and retain, at the
Company's expense, a certified public accountant, financial analyst, or Bond
Counsel, or any firm of the foregoing, experienced in
making the arbitrage and rebate calculations required under the
Code (a "Rebate Analyst") acceptable to the Trustee for the purpose of
making any and all calculations required under Section 5.10 of the
Indenture. Such calculations, if required, shall be made in the
manner and at such times as specified in Section 5.10 of the Indenture. The
Company hereby agrees to cause the Rebate Analyst to provide such
calculations to the Trustee at such times and with such directions as are
necessary to fully comply with the arbitrage and rebate requirements set forth
in Section 5.10 of the Indenture and fully to comply with section 148 of the
Code.
The Company specifically covenants to comply with the
covenants and procedures set forth in Section 5.10 of the Indenture and to
deposit in the Rebate Fund such amounts as may be necessary to increase the
amount in deposit in the Rebate Fund to the rebate requirement at such
times as are required under Section 5.10 of the Indenture.
Article III
Construction and Operation of the Project
Section 3.1. Construction of Project. The Company hereby
agrees to acquire and construct the Project in accordance with this Article
III, substantially in accordance with the plans and specifications therefor
prepared by it including any and all supplements, amendments, and additions
(or deletions) thereto (or therefrom); provided, however, that such
other facilities and property contemplated by such supplements, amendments,
additions, or deletions to the plans and specifications shall not materially
impair the effective use or character of the Project as contemplated
by this Agreement or disqualify the Project as a project within the
meaning of the Act, or result in the interest on any Bonds becoming
includable in the gross income of the owners of the Bonds for
federal income tax purposes.
In the event that Exhibit A hereto is to be amended or
supplemented in accordance with the provisions of Section 9.01 of the
Indenture, the Issuer will enter into, and will instruct the Trustee
to consent to, an amendment of or supplement to Exhibit A hereto
upon receipt of:
(i) a copy of the proposed form of amendment or
supplement to Exhibit A hereto; and
(ii) the written approving opinion of Bond Counsel to
the effect that such amendment or supplement will not have the effect of
disqualifying the Project as a project within the meaning of the Act or result
in the interest on the Bonds becoming includable in the gross income of the
owners of the Bonds for federal income tax purposes.
Section 3.2. Operation of Project. The Company will not
make any material change in its use of the Project from that described in
Exhibit A unless the Trustee and the Issuer receive an opinion of Bond
Counsel to the effect that such change will not impair the exclusion of
interest on the Bonds from the gross income of owners of the Bonds for federal
income tax purposes.
So long as the Company operates the Project, it will operate
it as a "project" as contemplated by the Act and will operate the Project in
such a manner such that it will not impair the exclusion of interest on the
Bonds from gross income of the owners of the Bonds for federal income tax
purposes.
Upon a sale of all or any portion of the Company"s interest
in the Project, the Company will obtain the agreement of the purchaser of the
Project or interest therein to comply with the provisions of this Section 3.2,
regardless of whether such purchaser assumes the obligations of the Company
under this Agreement generally.
Section 3.3. Establishment of Completion Date; Obligation
of Company to Complete. The Completion Date shall be evidenced to the
Trustee by a certificate signed by the Authorized Company Representative
stating the Completion Date and the Cost of the Project and stating that
(i) construction of the Project has been completed substantially in
accordance with the plans, specifications, and work orders therefor and all
labor, services, materials, and supplies used in such construction have been
paid for (other than costs and expenses for which payment has been
withheld), (ii) all other facilities necessary in connection with the
Project have been constructed, acquired, and installed in accordance with the
plans, specifications, and work orders therefor and all
costs and expenses incurred in connection therewith (other than
costs and expenses for which payment has been withheld) have been paid,
and (iii) at least 95% of the costs previously disbursed
and to be disbursed from the Project Account (including moneys to
be disbursed in accordance with the next succeeding paragraph of this Section
3.3) are Qualified Costs of Construction, and all of such
costs are costs permitted by the Act. The Company may withhold
payment and direct the Trustee to retain in the Project Account an amount
sufficient to pay any Cost of the Project which has been incurred; such
retained moneys shall be disbursed after the Completion Date in the manner
provided in Section 4.2 thereof. If the Company withholds the payment of
any such cost or expense of the Project the certificate shall state the amount
of such withholding and the reason therefor. Notwithstanding the foregoing,
such certificate may state that it is given without prejudice to any
rights against third parties which exist at the date of such certificate
or which may subsequently come into being. It shall be the duty of the
Company to cause such certificate to be furnished to the
Trustee within 60 days after the Project shall have been completed.
Moneys (including investment proceeds) remaining in the
Project Account on the Completion Date may be used, at the direction of the
Authorized Company Representative, to the extent indicated, for one or more
of the following purposes:
(1) for the payment, in accordance with the provisions
of this Agreement, of any Cost of the Project not theretofore paid,
as specified in the above-mentioned completion certificate; or
(2) for transfer to the Bond Fund, but only if, and to
the extent that, the Trustee has been furnished with an opinion of Bond
Counsel to the effect that such transfer is lawful under the Act and does not
adversely affect the exclusion from federal gross income of interest
on any of the Bonds.
Any moneys (including investment proceeds) remaining in
the Project Account on the Completion Date and not set aside for the payment
of Costs of the Project as specified in (1) above or transferred to the Bond
Fund pursuant to (2) above shall on such date be deposited by the Trustee in a
separate escrow account and used to pay all or part of the redemption price of
Bonds at the earliest redemption date or dates on which Bonds may be
redeemed without the payment of a premium or, at the option of the
Company, at an earlier redemption date or dates; provided that,
until so used such moneys may also be used, at the direction of the
Authorized Company Representative, for one or more of the following
purposes:
(a) to pay all or part of the price of purchasing Bonds
on tender, in the open market or at private sale, at a purchase price not in
excess of 100% of the principal amount of such Bonds plus accrued interest to
the date of such purchase for the purpose of cancellation;
(b) for the payment of qualifying costs of any
additional improvements to be installed or constructed in connection with the
Project; provided that such use of funds is permitted under the Act; or
(c) for any other purpose permitted by the Act; provided, that
the earnings on the investment of the moneys on deposit in such escrow
account shall be transferred on each interest payment date on the Bonds to the
Bond Fund and shall be used to pay interest on the Bonds coming due on
each interest payment date on the Bonds (or to reimburse the Bank for draws
under the Letter of Credit to pay interest on the Bonds), but no moneys on
deposit in such escrow account may be used for any of the purposes
specified in this paragraph (including the redemption of Bonds) unless and
until the Trustee has been furnished with an opinion of Bond Counsel to the
effect that such use is lawful under the Act and does not adversely affect the
exclusion from gross income for federal income tax purposes of the
interest on the Bonds; and provided further that, until used for one or more of
the foregoing purposes, moneys on deposit in such escrow account may be
invested in investments authorized by Section 4.3 of this Agreement, but
may not be invested to produce a yield on such moneys (computed
from the Completion Date and taking into account any investment of uch
moneys during the period from the Completion Date until
such moneys were deposited in such escrow account) greater than
the yield on the Bonds from which such proceeds were derived, all as such
terms are used in and determined in accordance with section
148 of the Code and regulations promulgated thereunder.
In the event the moneys in the Project Account available for
payment of the Costs of the Project should not be sufficient to pay the costs
therefor, in full, the Company agrees to pay directly
or to deposit in the Project Account moneys sufficient to pay, the
costs of completing the Project as may be in excess of the moneys available
therefor in the Project Account. The Issuer does not make any warranty,
either express or implied, that the moneys which will be paid into the Project
Account and which, under the provisions of this Agreement, will be
available for payment of the Costs of the Project, will be sufficient to pay
all he costs which will be incurred in that connection. The Company
agrees that if after exhaustion of the moneys in the Project Account
the Company should pay, or deposit moneys in the Project Account for the
payment of any portion of the said costs of the Project
pursuant to the provisions of this Section it shall not be entitled to
any reimbursement therefor from the Issuer or from the Trustee or from the
owners of any of the bonds, nor shall it be entitled to any
diminution of the amounts payable under this Agreement.
Article IV
Issuance of Bonds; Deposit of Proceeds; Disbursements
Section 4.1. Issuance of Bonds; Deposit of Proceeds. In
order to finance the Project, the Issuer will issue, sell, and deliver the
Bonds to the initial purchasers thereof and deposit the proceeds of the Bonds
with the Trustee as provided in Section 5.01 of the Indenture. Such deposit
shall constitute a loan to the Company under this Agreement. The Issuer
authorizes the Trustee to disburse the proceeds of the Bonds in accordance
with Section 3.01 of the Indenture. The Company hereby approves the
Indenture and the issuance by the Issuer of the Bonds.
Section 4.2. Disbursements from the Project Account. The
Issuer authorizes and directs the Trustee upon compliance with Section 5.11
of the Indenture to disburse the moneys in the Project Account to or on behalf
of the Company for the following purposes:
(a) Payment to the Company of such amounts, if any,
as shall be necessary to reimburse the Company for advances and payments
made by it prior to or after the delivery of the Bonds for expenditures in
connection with the preparation of plans and specifications for the Project
(including any preliminary study or planning of the Project or any aspect
thereof) and the acquisition, construction, and rehabilitation of
the Project.
(b) Payment of the initial or acceptance fee of the
Trustee, fees of the Trustee and paying agent incurred during the
Construction Period, fees of the Remarketing Agent for the
placement of the Bonds, legal, financial, and accounting fees and
expenses, printing and engraving costs incurred in connection with the
authorization, sale, and issuance of the Bonds, the execution and filing of the
Indenture and the preparation of all other documents in connection therewith,
and payment of all fees, costs, and expenses for the preparation of this
Agreement, the Indenture, the Bonds, and all related agreements
and instruments.
(c) Payment for labor, services, materials, and supplies
used or furnished in the acquisition, construction, and rehabilitation of the
Project, all as provided in the plans, specifications, and work orders
therefore, payment for the cost of the construction, acquisition,
and installation of utility services or other facilities, and
acquisition and installation of all real and personal property deemed
necessary in connection with the Project and payment for the
miscellaneous capitalized expenditures incidental to any of the
foregoing items.
(d) Payment of the fees, if any, for architectural,
engineering, legal, printing, underwriting, and supervisory services with
respect to the Project.
(e) To the extent not paid by a contractor for construction with
respect to any part of the Project, payment of the premiums on all insurance
required to be taken out and maintained during the Construction Period.
(f) Payment of the taxes, assessments, and other charges, if
any, that may become payable during the Construction Period with respect to
the Project, or reimbursement thereof if paid by the Company.
(b) Payment of expenses incurred in seeking to enforce
any remedy against any contractor or subcontractor in respect of any default
under a contract relating to the Project.
(h) Interest on the Bonds during the Construction
Period (or reimbursement of the Bank for draws under the Letter of Credit to
pay such interest).
(i) Fees of the Bank during the Construction Period
for the issuance of the Letter of Credit.
(j) Payment of any other costs permitted by the Act
which will not affect the exemption from federal income taxes of interest on
the Bonds.
All moneys remaining in the Project Account after the
Completion Date and after payment or provision for payment of all other
items provided for in the preceding subsections (a) to (j),
inclusive, of this Section, shall at the direction of the Company be
used in accordance with Section 3.3 hereof.
Each of the payments referred to in this Section shall be
made upon receipt by the Trustee of a written order complying with the form
set forth in Section 5.11 of the Indenture signed by the Authorized Company
Representative.
The Company covenants and agrees that it will cause at
least 95% of the moneys in the Bond Proceeds Fund (including any earnings
on investment of such moneys) to be disbursed for Qualified
Costs of Construction and all of such proceeds to be disbursed for
costs permitted by the Act. The Company further covenants that no more
than $160,000 of the moneys in the Bond Proceeds Fund
will be disbursed for payment of issuance costs within the meaning
of the Code.
Section 4.3. Investment of Moneys. Any moneys held as a
part of the Bond Fund or the Project Account shall be invested or reinvested
by the Trustee, at the direction of the Authorized Company Representative as
provided in Section 5.05 of the Indenture and in the Tax Agreement,
to the extent permitted by law in Qualified Investments. Any such
investment may be purchased at the offering or market price thereof at the
time of such purchase. The Trustee may make any and all such investments
through its own bond department.
The investments so purchased shall be held by the Trustee
and shall be deemed at all times a part of the fund for which they were made
and the interest accruing thereon and any profit realized
therefrom shall be credited to such fund and any net losses resulting
from such investment shall be charged to such fund and paid by the
Company.
Article V
Repayment
Section 5.1. Repayment. (a) Principal, Premium, and
Interest. The Company will repay the loan made to it under Article IV as
follows: On or before 11:00 a.m. (local time at the principal
corporate office of the Trustee) on each day on which any payment
of principal of, premium, if any, or interest on the Bonds shall become due
(whether on an interest payment date, at maturity, or
upon redemption or acceleration or otherwise), the Company will
pay, in immediately available funds, an amount which, together with other
moneys held by the Trustee in the Bond Fund and available
therefor (including, without limitation, proceeds of draws under the
Letter of Credit), will enable the Trustee to make such payment in full in a
timely manner. If the Company defaults in any payment
required by this Section, the Company will pay interest (to the
extent allowed by law) on such amount until paid at the rate provided for in
the Bonds.
(b) Purchase Price. The Company agrees to pay to the
Tender Agent (or if the Bonds are in the Book Entry System, the Trustee)
amounts sufficient to pay the purchase price of Bonds on each optional or
mandatory tender date pursuant to Section 2.03 or 2.04 of the Indenture,
provided the Company shall receive a credit for the amount of remarketing
or Letter of Credit proceeds available for such purpose under the Indenture on
each such date.
(c) Company to Make up Deficiencies. In furtherance
of the foregoing, so long as any Bonds are outstanding the Company will pay
all amounts required to prevent any deficiency or default in any payment of
the principal or purchase price of, premium, if any, or interest on the Bonds,
including any deficiency caused by an act or failure to act by the
Trustee, the Company, the Issuer, or any other person.
(d) Assignment. All amounts payable under this
Section by the Company are assigned by the Issuer to the Trustee pursuant to
the Indenture for the benefit of the Bondholders. The Company consents to
such assignment. Accordingly, the Company will pay directly to the Trustee
(or in the case of the purchase price of Bonds when the Bonds are
not in a Book Entry System, to the Tender Agent) at its corporate trust office
all payments payable by the Company pursuant to this Section.
(e) Payments under Reimbursement Agreement. The
Company will pay or cause to be paid all amounts owed to the Bank under the
Reimbursement Agreement directly to the Bank when due and no such
payment shall be made to the Trustee.
Section 5.2. Additional Payments. The Company will also
pay the following within 30 days after receipt of a bill therefor:
(a) The fees and expenses of the Issuer in connection
with this Agreement and the Bonds, such fees and expenses to be paid
directly to the Issuer.
(b) (i) The fees and expenses of the Trustee, the
Tender Agent, and all other fiduciaries and agents serving under the
Indenture (including any expenses in connection with any redemption
of the Bonds), and (ii) all fees and expenses, including attorneys"
fees, of the Trustee for any extraordinary services rendered by it under the
Indenture. All such fees and expenses are to be paid directly to the Trustee
or other fiduciary or agent for its own account as and when such fees and
expenses become due and payable.
(c) The fees and expenses of the Remarketing Agent
in accordance with the terms of the Remarketing Agreement.
The Company agrees to pay all Project costs not paid or
reimbursed with Bond proceeds. The Company has not and will not maintain
that it is entitled to an exemption from State sales taxes on personal property
acquired in conjunction with the Project.
Section 5.3. Prepayments. The Company may prepay to
the Trustee all or any part of the amounts payable under Section 5.1(a) at any
time, provided that the Bonds shall be subject to redemption solely as
provided in the Indenture and the Bonds. A prepayment shall not relieve the
Company of its obligations under this Agreement until all the
Bonds have been paid or provision for the payment of all the Bonds has been
made in accordance with the Indenture. In the event of a mandatory
redemption of the Bonds, the Company will prepay all amounts necessary for
such redemption.
Section 5.4. Obligations of Company Unconditional.
The obligations of the Company to make the payments required by Sections
5.1 and 5.3 and to perform its other agreements contained in this
Agreement shall be absolute and unconditional. Until the principal
of and interest on the Bonds shall have been fully paid or provision for the
payment of the Bonds made in accordance with the
Indenture, the Company (a) will not suspend or discontinue any
payments provided for in Section 5.1 hereof, (b) will perform all its other
agreements in this Agreement and (c) will not terminate this
Agreement for any cause including any acts or circumstances that
may constitute failure of consideration, destruction of or damage to the
Project, commercial frustration of purpose, any change
in the laws of the United States or of the State or any political
subdivision of either, or any failure of the Issuer to perform any of its
agreements, whether express or implied, or any duty, liability, or
obligation arising from or connected with this Agreement.
Section 5.5. Letter of Credit. The Company shall provide
for the delivery of the initial Letter of Credit to the Trustee simultaneously
with the original issuance and delivery of the Bonds. The Company may
provide for the delivery of an Alternate Credit Facility in substitution or
replacement for the then current Letter of Credit but only in accordance with
Section 5.03 of the Indenture.
Section 5.6. Purchase of Bonds Prohibited. So long as a
Letter of Credit is in effect, the Company shall not, directly or indirectly,
purchase any Bonds with any funds that do not constitute Available Moneys,
except as required by Section 5.1(b) of this Agreement.
Section 5.7. Mode Conversions. The Company has the
option to cause the interest rate on the Bonds to be converted from one Mode
to another or from an Adjustable Rate Period of one duration to an Adjustable
Rate Period of the same or a different duration. Such option may be
exercised by the Company as provided in the Indenture.
Article VI
Other Company Agreements
Section 6.1. Maintenance of Existence. The Company
agrees that during the term of this Agreement and so long as any Bond is
outstanding, it will maintain its corporate existence, will continue to be a
corporation in good standing under the laws of the State, will not dissolve or
otherwise dispose of all or substantially all of its assets and will not
consolidate with or merge into another legal entity or permit one or more
other legal entities (other than one or more subsidiaries of the Company) to
consolidate with or merge into it, or sell or otherwise transfer to another
legal entity all or substantially all its assets as an entirety and dissolve,
unless (a) in the case of any merger or consolidation, the Company is the
surviving corporation, or (b)(i) the surviving, resulting, or
transferee legal entity is organized and existing under the laws of
the United States, a state thereof or the District of Columbia, and (if not the
Company) assumes in writing all the obligations of the
Company under this Agreement, the Remarketing Agreement, and
the Tax Agreement and (ii) no event which constitutes, or which with the
giving of notice or the lapse of time or both would constitute an Event of
Default shall have occurred and be continuing immediately after such merger,
consolidation, or transfer.
Section 6.2. Qualification in State. Subject to the
provisions of Section 6.1 hereof, the Company agrees that throughout the
term of this Agreement, it will remain qualified to do business in the State.
Section 6.3. Financial Reports. The Company agrees to
have an annual audit made by its regular independent certified public
accountants and to furnish the Trustee (within 60 days after receipt by the
Company) with a balance sheet and statement of income and surplus showing
the financial condition of the Company and its consolidated
subsidiaries, if any, at the close of each fiscal year and the results of
operations of the Company and its consolidated subsidiaries, if any, for each
fiscal year, accompanied by the opinion of said accountants. The
Trustee will hold such reports solely for the purpose of making them available
at its principal corporate trust office for examination by the Bondholders, and
is not required to notify the Bondholders of the contents of any such report.
Section 6.4. Arbitrage. The Company covenants with the
Issuer and for and on behalf of the purchasers and owners of the Bonds from
time to time outstanding that so long as any of the Bonds remain outstanding,
moneys on deposit in any fund in connection with the Bonds, whether or not
such moneys were derived from the proceeds of the sale of the
Bonds or from any other sources, will not be used in a manner which will
cause the Bonds to be "arbitrage bonds" within the meaning of
section 148 of the Code, and any lawful regulations promulgated
thereunder, as the same exist on this date, or may from time to time hereafter
be amended, supplemented, or revised. The Company also covenants for the
benefit of the Bondholders to comply with all of the provisions of the Tax
Agreement and the Project Certificate. The Company reserves the
right, however, to make any investment of such moneys permitted by State
law, if, when and to the extent that said section 148 or regulations
promulgated thereunder shall be repealed or relaxed or shall be held void by
final judgment of a court of competent jurisdiction, but only if any
investment made by virtue of such repeal, relaxation, or decision would not,
in the written opinion of Bond Counsel, result in making
the interest on the Bonds includible in the federal gross income of
the owners of the Bonds.
Section 6.5. Company"s Obligation with Respect to
Exclusion of Interest Paid on the Bonds. Notwithstanding any other
provision hereof, the Company covenants and agrees that it will not take
or authorize or permit, to the extent such action is within the
control of the Company, any action to be taken with respect to the Project, or
the proceeds of the Bonds (including investment earnings
thereon), or any other proceeds derived directly or indirectly in
connection with the Project, which will result in the loss of the exclusion of
interest on the Bonds from the federal gross income of the
owners of the Bonds under section 103 of the Code (except for any
Bond during any period while any such Bond is held by a person referred to
in section 147(a) of the Code; and the Company also will not omit to take any
action in its power which, if omitted, would cause the above result. Toward
that end, the Company covenants that it will comply with all
provisions of the Tax Agreement and the Project Certificate. This provision
shall control in case of conflict or ambiguity with any other provision of this
Agreement.
Section 6.6. Payment of Taxes. The Company will pay and
discharge promptly all lawful taxes, assessments, and other governmental
charges or levies imposed upon the Project, or upon any part
thereof, as well as all claims of any kind (including claims for
labor, materials, and supplies) which, if unpaid, might by law become a lien
or charge upon the Project; provided that the Company shall
not be required to pay any such tax, assessment, charge, levy, or
claim (i) if the amount, applicability, or validity thereof shall currently be
contested in good faith by appropriate proceedings promptly
initiated and diligently conducted; (ii) if the Company shall have
set aside on its books reserves (segregated to the extent required by generally
accepted accounting principles) with respect thereto
deemed adequate by the Company; and (iii) if failure to make such
payment will not impair the use of the Project by the Company.
Section 6.7. Insurance. The Company agrees to maintain,
or cause to be maintained, all necessary insurance with respect to the Project
in accordance with its customary insurance practices. The Issuer shall have
no obligation to maintain insurance with respect to the Project.
Section 6.8. Maintenance and Repair. The Company shall
at all times during the term of this Agreement maintain, preserve, and keep
the Project in good repair, working order, and condition, excepting normal
wear and tear, and it will from time to time make or cause to be made all
necessary and proper repairs and replacements in connection with the
maintenance, repairs, and replacements referred to in this Section. The
Issuer shall have no obligation with respect to the maintenance or
repair of the Project.
Section 6.9. Financing Statements. The Company shall
cause such security agreements, financing statements, and all supplements
thereto and other instruments as may be required from time
to time to be kept, to be recorded and filed in such manner and in
such places as may be required by law in order to fully preserve, protect, and
perfect the security of the Owners of the Bonds and the rights of the Trustee,
and to perfect the security interest created by the Indenture.
Article VII
No Recourse to Issuer; Indemnification
Section 7.1. No Recourse to Issuer. The Issuer will not be
obligated to pay the Bonds except from revenues provided by the Company or
from other sources specified in the Indenture. The issuance of the Bonds will
not directly or indirectly or contingently obligate the Issuer, the Unit, or
the State to levy or pledge any form of taxation whatever or to make
any appropriation for their payment. Neither the Issuer or the Unit nor any
member or officer of the Issuer or the Unit nor any person executing the
Bonds shall be liable personally for the Bonds or be subject to any personal
liability or accountability by reason of the issuance of the Bonds.
Section 7.2. Release and Indemnification Covenants. (a)
The Company shall indemnify and hold the Issuer, the Unit and the Texas
Department of Commerce (including any official, agent, officer, director, or
employee thereof and bond counsel to the Issuer) harmless against any and all
claims asserted by or on behalf of any person, firm, corporation,
private, or municipal, arising or resulting from, or in any way connected with
(i) the financing, installation, operation, use, or maintenance of the Project,
(ii) any act, including negligent acts, failure to act, or intentional
misrepresentation by any person, firm, corporation, or
governmental authority, including the Issuer and the Unit (except that neither
the Issuer nor the Unit shall be indemnified for its willful
misconduct, bad faith, or fraud), in connection with the issuance,
sale, or delivery of the Bonds, (iii) any act, failure to act, or
misrepresentation by the Issuer or the Unit in connection with, or in
the performance of any obligation related to the issuance, sale, and
delivery of the Bonds or under this Agreement or the Indenture, or any other
agreement executed by or on behalf of the Issuer or the Unit, including all
liabilities, costs, and expenses, including attorneys' fees, incurred in any
action or proceeding brought by reason of any such claim. In the event
that any action or proceeding is brought against the Issuer by reason of any
such claim, such action or proceeding shall be defended against by counsel as
the Issuer or the Unit shall determine, and the Company shall indemnify the
Issuer and the Unit for costs of such counsel. The Company upon
notice from the Issuer shall defend such an action or proceeding on behalf of
the Issuer or the Unit. The Company shall also indemnify the Issuer and the
Unit from and against all costs and expenses, including attorneys' fees,
lawfully incurred in enforcing any obligation of the Company under
this Agreement.
(b) The Company shall indemnify the Trustee, the
Tender Agent, any person who "controls" the Remarketing Agent, the Bank,
the Tender Agent, or the Trustee within the meaning of Section 15 of the
Securities Act of 1933, as amended, and any member, officer, director,
official, and employee of the Remarketing Agent, the Bank, the Tender
Agent, or the Trustee (collectively called the "Indemnified Parties") from and
against, any and all claims, damages, demands, expenses, liabilities, and
losses of every kind, character, and nature asserted by or on behalf of any
person arising out of, resulting from, or in any way connected with (except
for the Indemnified Party's own ct of negligence or malfeasance or
misrepresentation) (i) the Bonds or the execution of any
documents or the performance of any duties relating thereto, and
(ii) the condition, use, possession, conduct, management, planning, design,
acquisition, construction, installation, renovation, or sale of
the Project or any part thereof. The Company also covenants and
agrees, at its expense, to pay, and to indemnify and hold the Indemnified
Parties harmless of, from and against, all costs, attorneys' fees,
expenses, and liabilities incurred in any action or proceeding
brought by reason of any such claim or demand (except for the Indemnified
Party's own act of negligence, malfeasance, or misrepresentation). In the
event that any action or proceeding is brought against the Indemnified
Parties by reason of any such claim or demand, the Indemnified
Parties shall immediately notify the Company, which shall defend any action
or proceeding on behalf of the Indemnified Parties, including
the employment of counsel, the payment of all expenses and the
right to negotiate and consent to settlement. Any one or more of the
Indemnified Parties shall have the right to employ separate
counsel in any such action and to participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of such
Indemnified Parties unless the employment of such
counsel has been specifically authorized by the Company or unless
the Indemnified Parties shall reasonably determine that a conflict of interest
exists as between the Indemnified Parties and the Company, in either of
which instances the fees and expenses of such counsel shall be paid by the
Company. If such separate counsel is employed, the Company may
join in any such suit for the protection of its own interests. The Company
shall not be liable for any settlement of any such action effected without its
consent, but if settled with the consent of the Company or if there be a final
judgment for the plaintiff in any such action, the Company agrees
to indemnify and hold harmless the Indemnified Parties.
Article VIII
Assignment
Section 8.1. Assignment by Company. The Company may
assign its rights and obligations under this Agreement without the consent of
either the Issuer or the Trustee, but no assignment will,
except as provided in the following paragraph, relieve the Company
from primary liability for any obligations under this Agreement and no such
assignment will be made unless the Company causes
there to be delivered to the Trustee an opinion of Bond Counsel to
the effect that such assignment will not cause interest on the Bonds to be
includable in the gross income of the Owners thereof for federal income tax
purposes.
Notwithstanding the provisions of the preceding paragraph,
this Agreement may be assigned by the Company as provided in the
preceding paragraph, but without the Company remaining
primarily liable hereunder, if either (a) the Guaranty will continue
to remain in full force and effect and enforceable notwithstanding such
assignment, or (b) if the Guaranty is to be released in accordance with Section
9.05 of the Indenture in connection with such assignment, the release of the
Guaranty is accomplished in accordance with the provisions of the
Indenture.
Section 8.2. Assignment by Issuer. The Issuer will assign
its rights under and interest in this Agreement (except for the Unassigned
Rights) to the Trustee pursuant to the Indenture as security
for the payment of the Bonds. Otherwise, the Issuer will not sell,
assign, or otherwise dispose of its rights under or interest in this Agreement
nor create or permit to exist any lien, encumbrance or other security interest
in or on such rights or interest.
Article IX
Defaults and Remedies
Section 9.1. Events of Default; Remedies. The occurrence
of any Event of Default under the Indenture shall constitute an Event of
Default hereunder for so long as such Event of Default under
the Indenture is continuing. Whenever any Event of Default has
occurred and is continuing, the Trustee may take whatever action may appear
necessary or desirable to collect the payments then due and to become due or
to enforce performance of any agreement of the Company in this Agreement.
Upon any acceleration of the Bonds under the Indenture, all amounts payable
under Section 5.1(a) hereof shall be immediately due and payable without the
necessity of any action by any party.
In addition, if an Event of Default is continuing with
respect to any of the Unassigned Rights, the Issuer may take whatever action
may appear necessary or desirable to it to enforce performance by the
Company of such Unassigned Rights.
Any amounts collected pursuant to action taken under this
Section (except for amounts payable directly to the Issuer or the Trustee
pursuant to Section 5.2, 7.2, and 9.3) shall be applied in accordance with the
Indenture.
Nothing in this Agreement shall be construed to permit the
Issuer, the Trustee, any Bondholder, or any receiver in any proceeding
brought under the Indenture to take possession of or exclude the Company
from possession of the Project by reason of the occurrence of an Event of
Default.
Section 9.2. Delay Not Waiver; Remedies. A delay or
omission by the Issuer or the Trustee in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or
remedy or constitute a waiver of or acquiescence in the Event of
Default. No remedy is exclusive of any other remedy. All available remedies
are cumulative.
Section 9.3. Attorneys Fees and Expenses. If the Company
should default under any provision of this Agreement and the Issuer or the
Unit should employ attorneys or incur other expenses for
the collection of the payments due under this Agreement, the Company will
on demand pay to the Issuer or the Unit, as appropriate, the fees of such
attorneys and such other expenses so incurred by the Issuer.
Article X
Miscellaneous
Section 10.1. Notices. All notices or other communications
hereunder shall be sufficiently given and shall be deemed given when
delivered or mailed as provided in the Indenture.
Section 10.2. Binding Effect. This Agreement shall inure
to the benefit of and shall be binding upon the Issuer, the Company and their
respective successors and assigns, subject, however, to the limitations
contained in Section 6.1.
Section 10.3. Severability. If any provision of this
Agreement shall be determined to be unenforceable at any time, that shall not
affect any other provision of this Agreement or the enforceability of that
provision at any other time.
Section 10.4. Amendments. After the issuance of the
Bonds, this Agreement may not be effectively amended or terminated without
the written consent of the Trustee and in accordance with
the provisions of the Indenture.
Section 10.5. Right of Company to Perform Issuer's
Agreements. The Issuer irrevocably authorizes and empowers the Company
to perform in the name and on behalf of the Issuer any agreement made by
the Issuer in this Agreement or in the Indenture which the Issuer fails to
perform in a timely fashion if the continuance of such failure could result
in an Event of Default. This Section will not require the Company to perform
any agreement of the Issuer.
Section 10.6. Expiration of Rights of Bank. It is expressly
understood that any and all provisions of this Agreement for notices or the
furnishing of documents, information, or reports to the Bank and the
necessity of obtaining the consent of the Bank to any modifications,
amendments, or supplements to this Agreement or waivers of any of the
provisions hereof shall cease and determine and be of no further force and
effect when (a) the Letter of Credit is not in effect and no amounts are due
and payable by the Company to the Bank under the Reimbursement
Agreement, or (b) the Bank is in default on any of its obligations to pay
drawings under the Letter of Credit submitted in conformity with the terms of
the Letter of Credit.
Section 10.7. Applicable Law. This Agreement shall be
governed by and construed in accordance with the laws of the State.
Section 10.8. Captions; References to Sections. The
captions in this Agreement are for convenience only and do not define or
limit the scope or intent of any provisions or Sections of this
greement. References to Articles and Sections are to the Articles
and Sections of this Agreement, unless the context otherwise requires.
Section 10.9. cmplete Agreement. This Agreement
represents the entire agreement between the Issuer and the Company with
respect to its subject matter.
Section 10.10. Termination. When no Bonds are
Outstanding under the Indenture, the Company and the Issuer shall not have
any further obligations under this Agreement; provided that
the Company"s covenants in Sections 6.4 and 6.5 and the
provisions of Section 5.3 with respect to mandatory redemption of the Bonds
shall survive so long as any Bond remains unpaid.
Section 10.11. Counterparts. This Agreement may be
signed in several counterparts. Each will be an original, but all of them
together constitute the same instrument.
GRAPEVINE INDUSTRIAL
DEVELOPMENT CORPORATION
By /s/
President
Attest:
By /s/
Secretary
TRENCOR JETCO, INC.
By /s/ Jerry Gilbert
Authorized Officer
Attest:
By /s/ Albert E. Guth
Authorized Officer
Exhibit A
Project Description
The Project willconsist of (a) the acquisition of
approximately 51 acres of land, an existing 140,000 square foot building and
equipment and fixtures, (b) the rehabilitation and renovation of
the building, and (c) the purchase of additional equipment to be
located at the site. The rehabilitation and renovation of the building is to
accommodate the manufacture of trenchers and canal excavating equipment.
The Project is located in the City of Grapevine, Texas and will be
owned and operated by the Company.
TABLE OF CONTENTS
Recitals1
Article I
Definitions
Article II
Representations
Section 2.1. Representations of Issuer
Section 2.2. Representations of Company
Article III
Construction and Operation of the Project
Section 3.1. Construction of Project
Section 3.2. Operation of Project
Section 3.3. Establishment of Completion Date; Obligation of Company
to Complete
Article IV
Issuance of Bonds; Deposit of Proceeds; Disbursements
Section 4.1. Issuance of Bonds; Deposit of Proceeds
Section 4.2. Disbursements from the Project Account
Section 4.3. Investment of Moneys
Article V
Repayment
Section 5.1. Repayment
Section 5.2. Additional Payments
Section 5.3. Prepayments
Section 5.4. Obligations of Company Unconditional
Section 5.5. Letter of Credit
Section 5.6. Purchase of Bonds Prohibited
Section 5.7. Mode Conversions
Article VI
Other Company Agreements
Section 6.1. Maintenance of Existence
Section 6.2. Qualification in State
Section 6.3. Financial Reports
Section 6.4. Arbitrage
Section 6.5. Company"s Obligation with Respect to Exclusion
of Interest Paid on the Bonds
Section 6.6. Payment of Taxes
Section 6.7. Insurance
Section 6.8. Maintenance and Repair
Section 6.9. Financing Statements
Article VII
No Recourse to Issuer; Indemnification
Section 7.1. No Recourse to Issuer
Section 7.2. Release and Indemnification Covenants
Article VIII
Assignment
Section 8.1. Assignment by Company
Section 8.2. Assignment by Issuer
Article IX
Defaults and Remedies
Section 9.1. Events of Default; Remedies
Section 9.2. Delay Not Waiver; Remedies
Section 9.3. Attorneys Fees and Expenses
Article X
Miscellaneous
Section 10.1. Notices
Section 10.2. Binding Effect
Section 10.3. Severability
Section 10.4. Amendments
Section 10.5. Right of Company to Perform Issuer's Agreements
Section 10.6. Expiration of Rights of Bank
Section 10.7. Applicable Law
Section 10.8. Captions; References to Sections
Section 10.9. Complete Agreement
Section 10.10. Termination
Section 10.11. Counterparts
Execution16
Exhibit A - Project Description
EXHIBIT 10.84
The First National Bank of Chicago
Trencor Jetco, Inc.
Letter of Credit Agreement
Dated as of April 1, 1994
Table of Contents
Article I Definitions
Section 1.l. Definitions
Section 1.2. Interpretation
Article II Letter of Credit
Section 2.1. Issuance of Letter of Credit
Section 2.2. Letter of Credit Drawings
Section 2.3. Reimbursement of Drawings under the Letter of Credit
Section 2.4. Fees
Section 2.5. Method of Payment
Section 2.6. Reduction and Termination
Section 2.7. Reinstatement of the Amount of the Letter of Credit
Section 2.8. Disbursement of Drawings
Section 2.9. Computation of Interest
Section 2.10. Payment Due on Non-Business Day to be Made on Next
Business Day
Section 2.11. Late Payments
Section 2.12. Source of Funds
Section 2.13 Extension of Stated Termination Date
Section 2.14. Amendments Upon Extension
Section 2.15. Operative Documents
Article III Conditions Precedent
Section 3.1. Conditions Precedent to Issuance of Letter of Credit
Article IV Representations and Warranties
Section 4.1. Company's Representations
Section 4.2. Bond Document Representation
Article V Covenants
Section 5.1. Affirmative Covenants
Section 5.2. Negative Covenants
Article VI Defaults
Section 6.1. Events of Default and Remedies
Section 6.2. Remedies
Article VII Miscellaneous
Section 7.1. No Deductions
Section 7.2. Right of Setoff
Section 7.3. Indemnity, Costs, Expenses and Taxes
Section 7.4. Obligations Absolute
Section 7.5. Liability of the Bank
Section 7.6. Waiver of Rights by the Bank
Section 7.7. Severability
Section 7.8. Governing Law
Section 7.9. Notices
Section 7.10. Survival of Certain Obligations
Section 7.11. Taxes and Expenses
Section 7.12. Amendments
Section 7.13. Headings
Section 7.14. Counterparts
Appendix I Irrevocable Transferable Letter of Credit
Exhibit A Notice of Conversion Date
Exhibit B Notice of Termination
Exhibit C Interest Drawing Certificate
Exhibit D Redemption Drawing and Reduction Certificate
Exhibit E Liquidity Drawing Certificate
Exhibit F Acceleration Drawing Certificate
Exhibit G Stated Maturity Drawing Certificate
Exhibit H Reduction Certificate
Exhibit I Notice of Amendment
Exhibit J Transfer Certificate
Exhibit K Notice of Amendment
Dated as of April 1, 1994
Trencor Jetco, Inc.
3545 E. Main Street
Grand Prairie, TX 75050
Ladies and Gentlemen:
The Company (such term and each other capitalized term used herein having
the meaning set forth in Article One hereof) desires to secure a source of
funds to be devoted exclusively to the payment by the Trustee, when and as
due, of the principal of and certain interest on the Bonds, which Bonds were
issued for its benefit and has applied to the Bank for issuance by the Bank of
the Letter of Credit in an Original Stated Amount of $8,105,206.
Furthermore, the Bank has been requested by the Company to provide the
Company with a liquidity facility by extending credit to the Company in the
form of a Liquidity Drawing under the Letter of Credit. The Bank has agreed
to issue such Letter of Credit and to provide such liquidity facility in the
following manner and subject to the following terms and conditions.
Accordingly, the Company and the Bank hereby agree as follows:
Article I
Definitions
Section 1.l. Definitions;. As used in this Agreement.
Acceleration Drawing - means a drawing under the Letter of Credit
resulting from the presentation of a certificate in the form of Exhibit F to
the Letter of Credit.
Agreement - means this Letter of Credit Agreement, as amended or
supplemented from time to time.
Astec - means Astec Industries, Inc., a Tennessee corporation.
Astec Guaranty - means a guaranty of the Obligations by Astec in form
and substance satisfactory to the Bank.
Available Amount - shall have the same meaning herein as in the Letter
of Credit
Bank - means The First National Bank of Chicago, as issuer of the Letter
of Credit.
Bond Documents - means the Indenture, the Loan Agreement, the
Remarketing Agreement, the Bonds and the Guaranty Agreement dated as of
April 1, 1994 between Astec and the Trustee.
Bonds - means the $8,000,000 Industrial Development Revenue Bonds,
Series 1994 (Trencor Jetco, Inc. Project).
Business Day - shall have the same meaning herein as in the Indenture.
Closing Date - means the date on which all conditions precedent under
Article Three hereof have been met or waived by the Bank and on which the
Letter of Credit is issued.
Company - means Trencor Jetco, Inc., a Texas corporation.
Company Bonds - shall have the meaning set forth in the Indenture.
Conversion Date - means any conversion to a CP Rate Mode or Adjustable
Rate Mode as such terms are defined in the Indenture.
Corporate Base Rate - means the rate of interest announced by the Bank
from time to time as its corporate base rate or equivalent, with any change in
such corporate base rate or equivalent to be effective on the date of such
change, it being understood that such rate may not be the best or lowest rate
offered by the Bank.
Credit Agreement - means that certain Astec Industries, Inc. Amended
and Restated Credit Agreement originally dated April 27, 1989, as amended
from time to time, between Astec and The First National Bank of Chicago. It
is understood that Astec and the Bank are currently negotiating a further
complete amendment and restatement of the Credit Agreement. Upon the
execution and delivery of such further amendment and restatement of the
Credit Agreement, the same shall constitute the "Credit Agreement" for
purposes of this definition. If the Credit Agreement is terminated and
replaced by an agreement to which First National Bank of Chicago is not a
party or is not replaced, the Credit Agreement shall be deemed to remain in
effect for purposes of this Agreement.
Event of Default - has the meaning given in Section 6.1 hereof.
Expiration Date - shall the same meaning herein as in the Letter of Credit.
Indebtedness - shall mean and include, as of any date as of which the
amount thereof is to be determined, (i) all items (other than capital items
such as surplus and fund balances, as well as reserves for taxes in respect of
income deferred to the future and other deferred credits and reserves) which
in accordance with generally accepted accounting principles (including,
without limitation, capitalized leases) would be included in determining total
liabilities on the balance sheet of a Person as of such date, (ii) all
obligations which are secured by any Lien existing on Property owned by such
Person, whether or not the obligations secured thereby shall have been assumed
by any other Person, (iii) all obligations of such Person to purchase any
materials, supplies or other Property, or to obtain the services of any other
Person, if the relevant contract or other related document requires that
payment for such materials, supplies or other Property, or for such services,
shall be made regardless of whether or not delivery of such materials, supplies
or other Property is ever made or tendered or such services are ever performed
or tendered, and (iv) all guarantees by such Person for the payment of
Indebtedness of others of the character described in (i) through (iii) above.
Indenture - means that certain Indenture of Trust dated as of April 1,
1994, between the Trustee and the Issuer relating to the Bonds.
Interest Drawing - means a drawing under the Letter of Credit resulting
from the presentation of a certificate in the form of Exhibit C to the
Letter of Credit
Interest Payment Date - means the first Business Day of each calendar
month, commencing May 1, 1994.
Issuer - means the Grapevine Industrial Development Corporation, and its
successors and assigns.
Letter of Credit - means the irrevocable transferable letter of credit issued
by the Bank for the account of the Company in favor of the Trustee for the
benefit of the owners from time to time of the Bonds pursuant to this
Agreement in the form of Appendix I hereto with appropriate insertions, as
amended.
Letter of Credit Fees - shall have the meaning given to such term in
Section 2.4 hereof.
Liquidity Drawing - means a drawing under the Letter of Credit resulting
from the presentation of a certificate in the form of Exhibit E to the Letter
of Credit
Loan Agreement - means the Loan Agreement dated as of April 1, 1994,
between Trencor and the Issuer, as amended or supplemented in accordance
with the terms hereof and thereof.
Obligations - means fees relating to the Letter of Credit, any and all
obligations of the Company to reimburse the Bank for any drawings under the
Letter of Credit, and all other obligations of the Company to the Bank arising
under or in relation to this Agreement.
Original Stated Amount - shall have the meaning specified in Section 2. l
hereof.
Outstanding or Bonds Outstanding - shall have the same meaning
herein as in the Indenture.
Person - means an individual, a corporation, a partnership, an association,
a trust or any other entity or organization, including a government or
political subdivision or any agency or instrumentality thereof.
Placement Memorandum - means the Offering Memorandum dated
April 27, 1994, relating to the Bonds.
Pledged Bonds - shall have the same meaning herein as in the Indenture.
Potential Default - means an event which but for the lapse of time or the
giving of notice, or both, would constitute an Event of Default
Property - means any and all right, title and interest of any Person in and
to any and all property, whether real or personal, tangible or intangible, and
wherever situated.
Redemption Drawing - means a drawing under the Letter of Credit
resulting from the presentation of a certificate in the form of Exhibit D to
the Letter of Credit.
Related Documents - means the Related Documents as defined in Section
7.4(i) hereof.
Remarketing Agent - means The First National Bank of Chicago, as
remarketing agent under the Indenture, and any successor remarketing agent
Remarketing Agreement - means the Remarketing Agreement dated as of
April 1, 1994, among the Company, Astec and the Remarketing Agent, as
amended and supplemented in accordance with its terms.
State - means the State of Texas.
Stated Maturity - means April 1, 2019.
Stated Maturity Drawing - means a drawing under the Letter of Credit
resulting from the presentation of a certificate in the form of Exhibit G to
the Letter of Credit.
Stated Termination Date - means April 29, 1997, or such later date to
which the Stated Termination Date may be extended from time to time
pursuant to Section 2.13 hereof.
Subsidiary - shall mean, as to any Person, any corporation or other entity
of which a controlling interest of the securities or other ownership interests
having ordinary voting power (absolutely or contingently) for the election of
directors or other persons performing similar functions is at the time owned
directly or indirectly by such Person.
Tender Agent - shall have the meaning set forth in the Indenture.
Trustee - means Bank One, Texas, N.A., as Trustee under the Indenture,
and any successor trustee thereunder.
Uniform Customs - shall have the same meaning herein as the Letter of
Credit.
Section 1.2.
Interpretation In this Agreement (unless
otherwise specified), the singular includes the plural and the plural the
singular; words importing any gender include the other gender; references to
statutes are to be construed as including all statutory provisions
consolidating, amending or replacing the statute referred to; references to
writing include printing, typing, lithography and other means of reproducing
words in a tangible, visible form; the words including, includes and include
shall be deemed to be followed by the words without limitation; references
to articles, sections (or subdivisions of sections), recitals, exhibits,
annexes or schedules are to those of this Agreement unless otherwise indicated;
references to agreements and other contractual instruments shall be deemed
to include all subsequent amendments and other modifications to such
instruments, but only to the extent such amendments and other modifications
are not prohibited by the terms of this Agreement; the phrase "and/or" shall
be deemed to mean the words both preceding and following such phrase, or
either of them; and references to the parties and to Persons include their
respective permitted successors and assigns and, in the case of governmental
Persons, Persons succeeding to their respective functions and capacities. Any
capitalized terms used herein which are not specifically defined herein shall
have the same meaning herein as in the Indenture. All references in this
Agreement to times of day shall be references to Chicago, Illinois, time unless
otherwise specifically provided.
Article II Letter of Credit
Article II
Letter of Credit
Section 2.1. Issuance of Letter of Credit
The Bank agrees to
issue on the date of issuance of the Bonds, upon the terms, subject to the
conditions and relying upon the representations and warranties set forth in
this Agreement, the Letter of Credit substantially in the form of Appendix I
hereto. The Letter of Credit shall be in the Original Stated Amount of
$8,105,206 (the Original Stated Amount), which is the sum of (i) the
principal amount of Bonds outstanding on the Closing Date, plus (ii) interest
thereon at the rate of 10% per annum for a period of (48) days.
Section 2.2. Letter of Credit Drawings
As set forth in the
Letter of Credit, the Trustee is authorized to make the following types of
drawings under the Letter of Credit:
(a) As provided in Section 5.04 of the Indenture, on, or on the
Business Day immediately preceding, each Interest Payment Date, the Trustee
shall make an Interest Drawing under the Letter of Credit in an amount
sufficient to pay interest due and payable on each Interest Payment Date on
the Bonds then Outstanding other than Pledged Bonds and Company Bonds.
(b) As provided in Section 5.04 of the Indenture, on, or on the
Business Day immediately preceding, any redemption date, the Trustee shall
make a Redemption Drawing under the Letter of Credit in an amount
sufficient to pay (i) the principal amount of any Bonds to be redeemed on
such redemption date in accordance with the terms of the Indenture (other
than Pledged Bonds and Company Bonds) plus (ii) interest accrued on such
Bonds to the date of redemption, provided that in the event the date of
redemption coincides with an Interest Payment Date, the Redemption
Drawing shall not include any accrued interest on the Bonds (which interest
shall be payable pursuant to an Interest Drawing).
(c) As provided in Section 3.08 of the Indenture, in the event
Bonds shall have been tendered for purchase pursuant to Section 2.03 or 2.04
of the Indenture and the Remarketing Agent shall not have remarketed all or
part of such Bonds as provided in the Indenture or payment of the purchase
price of such Bonds has not been received, the Trustee shall make a Liquidity
Drawing under the Letter of Credit in an amount sufficient to purchase the
Bonds (other than Pledged Bonds and Company Bonds) (or part thereof)
tendered or deemed tendered by the holders thereof, provided that in the event
that the purchase date coincides with an Interest Payment Date, the Liquidity
Drawing shall not include any accrued interest on the Bonds (which interest
shall be payable pursuant to an Interest Drawing).
(d) As provided in Section 6.02 of the Indenture, if an Event
of Default under the Indenture shall have occurred and be continuing and
the Trustee shall have declared the principal amount of all Bonds then
Outstanding and all interest accrued thereon to be immediately due and
payable, the Trustee shall make an Acceleration Drawing under the Letter of
Credit for (i) the principal amount of all Bonds Outstanding (other than
Pledged Bonds and Company Bonds) plus (ii) interest accrued on such Bonds
to the date of drawing.
(e) As provided in to Section 5.04 of the Indenture, on, or on
the Business Day immediately preceding, the Stated Maturity Date, the
Trustee shall make a Stated Maturity Drawing for the principal amount of all
Bonds then Outstanding (other than Pledged Bonds and Company Bonds).
Section 2.3.
Reimbursement of Drawings under the Letter of Credit
(a) The Company agrees to reimburse the Bank for the full amount of
any Liquidity Drawing, Acceleration Drawing, Interest Drawing, Redemption
Drawing or Stated Maturity Drawing made under the Letter of Credit
immediately upon each such drawing and on the date of each such drawing. If
the Company does not make such reimbursement on such date, such
reimbursement obligation shall bear interest at the rate per annum and in the
manner specified in Section 2.11 hereof.
(b) The Company agrees that before any optional redemption of
the Bonds may occur, the Company must first obtain the written consent of
the Bank for the redemption.
(c) The Company hereby grants to the Bank a first priority
security interest in all of its right, title and interest in and to all Pledged
Bonds to secure the repayment of the Obligations. This Agreement shall
constitute a security agreement for purposes of the Uniform Commercial
Code. The Company hereby agrees concurrently with the execution and
delivery of this Agreement and thereafter from time to time to cause any
financing statements to be filed, registered and recorded in such manner and
in all places as may be required by law or reasonably requested by the Bank in
order to fully perfect and protect any lien and security interest created
hereby and from time to time will perform or cause to be performed any other
act as provided by law and will execute or cause to be executed any and all
continuation statements and further instruments that may be requested or
required by the Bank for such perfection and protection. The Bank hereby
appoints the Trustee (to the extent the Bonds are registered in the name of
DTC or its nominee and to the extent the Bonds are not so registered) as its
bailee for purposes of perfecting its security interest in the Pledged Bonds.
Section 2.4. Fees
The Company hereby agrees to pay, or cause
to be paid, to the Bank:
(a) on the date the Letter of Credit is issued, an origination fee
in the amount of $200.00;
(b) on the date the Letter of Credit is issued for the period
ending May 1, 1994, and thereafter quarterly in advance on the first day of
each February, May, August and November occurring after the date the Letter
of Credit is issued to the Expiration Date, a non-refundable fee (computed on
the basis of a year of 360 days and actual days elapsed) on the Available
Amount of the Letter of Credit on each such payment date at a rate per
annum equal to .75% (such initial and annual fees being referred to herein as
the Letter of Credit Fees);
(c) on the date of each Interest Drawing, Redemption Drawing,
Acceleration Drawing, Liquidity Drawing and Stated Maturity Drawing a
drawing fee of $150.00 and
(d) upon each transfer of the Letter of Credit to any successor
trustee under the Indenture, a transfer fee in an amount customarily charged
by the Bank for such transfers.
Section 2.5. Method of Payment; etc
All payments to be made
by the Company under this Agreement shall be made not later than 12:00
noon, Chicago time, on the date when due and shall be made in lawful money
of the United States of America (in freely transferable U.S. dollars) and in
immediately available funds. On each date on which any amount is due from
the Company pursuant to this Agreement, the Company shall pay or cause to
be paid the same to a Federal Reserve Bank wire transfer confirmation
number evidencing the wire transfer of such amount to the Federal Reserve
Bank of Chicago for the account of The First National Bank of Chicago, ABA
number 071000013 (or at such other account number or address as the Bank
may from time to time designate) on such date. If the amount is so paid after
12:00 noon Chicago time on such date, such amount shall be considered paid
on the next day the Bank is open for business and interest shall accrue at the
rate set forth in Section 2.11 hereof. All payments under this Agreement shall
be made without counterclaim, set off, condition or qualification.
Except as otherwise herein specifically provided or unless otherwise
prohibited by court order, all payments under this Agreement shall be made
without counterclaim, setoff, condition or qualification, and free and clear of
and without deduction or withholding for or by reason of any present or future
taxes, levies, imposts, deductions or charges of any nature whatsoever; in the
event that the Company is compelled by law to make any such deduction of
withholding, the Company or Trencor shall nevertheless pay to the Bank such
amounts as will result in the receipt by the Bank of the sum it would have
received had no such deduction or withholding been required to be made.
Section 2.6. Reduction and Termination
(a) The Trustee shall
have the right at any time to permanently reduce, without penalty or
premium, the Available Amount of the Letter of Credit upon not less than one
(l) Business Day's prior written notice to the Bank by the Trustee in the form
of Exhibit D or H to the Letter of Credit, designating the date (which shall be
a Business Day) of such reduction and the amount of such reduction. Such
reduction of the Available Amount shall be effective, after receipt of such
notice, on the Business Day following the date of delivery of such notice. Any
reduction other than by virtue of a payment at maturity shall be in an amount
not less than $100,000.
(b) If the Trustee shall partially reduce the Available Amount
pursuant to paragraph (a) above, the Bank shall then have the right to require
the Trustee to simultaneously surrender the outstanding Letter of Credit to the
Bank on the effective date of such partial reduction of the Available Amount
and to accept on such date, in substitution for the then outstanding Letter of
Credit, a substitute irrevocable Letter of Credit, dated such date, for an
amount equal to the amount to which the Available Amount shall have been
so reduced but otherwise having terms identical to the then outstanding Letter
of Credit. Alternatively, the Bank in its sole discretion may elect to
deliver to the Trustee a Notice of Amendment to the Letter of Credit in the
form of Exhibit I to the Letter of Credit, dated the effective date of such
partial reduction of the Available Amount of the Letter of Credit and stating
the amount to which the Available Amount has been reduced.
Section 2.7. Reinstatement of the Amount of the Letter of Credit
(a) As set forth in the Letter of Credit, the Available Amount of the
Letter of Credit shall be reduced and reinstated.
(b) The Bank will promptly notify the Trustee, the Company
and the Remarketing Agent of any reinstatement of the Letter of Credit, but
failure to provide such notice shall not affect the reinstatement of the Letter
of Credit as provided above.
(c) The Company hereby irrevocably and unconditionally
instructs the Bank to reinstate the Letter of Credit in accordance with the
terms of the Letter of Credit.
Section 2.8 Disbursement of Drawings
The Company hereby
directs the Bank to make payments under the Letter of Credit in the manner
set forth therein.
Section 2.9. Computation of Interest
All computations of
interest payable by the Company under this Agreement shall be made on the
basis of a three hundred sixty (360) day year and actual days elapsed. Interest
shall accrue during each period during which interest is computed from and
including the first day thereof to but excluding the last day thereof.
Section 2.10. Payment Due on Non-Business Day to be Made on
Next Business Day
If any sum becomes payable pursuant to this Agreement
on a day which is not a Business Day, the date for payment thereof shall be
extended, without penalty, to the next succeeding Business Day, and such
extended time shall be included in the computation of interest and fee.
Section 2.11. Late Payments
If the principal amount of any
Obligation is not paid when due, such Obligation shall bear interest
(computed on the basis of a 360 day year and actual days elapsed) from the
due date thereof until paid in full at a rate per annum equal to the Corporate
Base Rate from time to time in effect plus 2%, payable on demand.
Section 2.12. Source of Funds
All payments made by the Bank
pursuant to the Letter of Credit shall be made from funds of the Bank, but in
no event shall such payment be made with funds obtained from any other
Person.
Section 2.13 Extension of Stated Termination Date
At any
time there shall remain no more than two and no less than three months to
the then current Stated Termination Date, the Company may request the
Bank to extend such Stated Termination Date for a period of one additional
year. If the Bank, in its sole discretion, elects to extend the Stated
Termination Date then in effect, it shall deliver to the Trustee a Notice of
Amendment in the form of Exhibit K to the Letter of Credit (herein referred
to as a Notice of Extension) designating the date to which the Stated
Termination Date is being extended. Such extension of the Stated
Termination Date shall be effective, after receipt of such notice, on the
Business Day following the date of delivery of such Notice of Extension, and
thereafter all references in this Agreement to the Stated Termination Date
shall be deemed to be references to the date designated as such in the most
recent Notice of Extension delivered to the Trustee. Any date to which the
Stated Termination Date has been extended in accordance with this Section
2.13 may be extended in like manner.
Section 2.14. Amendments Upon Extension
Upon any
extension of a Stated Termination Date pursuant to Section 2.13 of this
Agreement, the Bank reserves the right to renegotiate any of the provisions
hereof. The Company agrees that notwithstanding Article 9(d)(iii) of the
Uniform Customs, amendments to the Letter of Credit contemplated by
Exhibits I and K thereto shall not require acceptance by the beneficiary of the
Letter of Credit in order to be binding against the Company and the Bank.
Section 2.15. Operative Documents
Payment Documents (as
defined in the Letter of Credit) include documents sent by telecopier and
tested telex with the original subsequently sent to the Bank. In the event of
any discrepancy between the versions of the Payment Documents submitted to
the Bank by telecopier or tested telex and the original subsequently sent to
the Bank, it is agreed that the sole operative document which shall control for
all purposes shall be the version submitted to the Bank by telecopier or tested
telex.
Article III Conditions Precedent
Section 3.1. Conditions Precedent to Issuance of Letter of Credit
As conditions precedent to the obligation of the Bank to issue the
Letter of Credit, (a) the Company shall provide to the Bank on the date of this
Agreement, in form and substance satisfactory to the Bank and its counsel,
Chapman and Cutler:
(i) a written opinion or opinions of counsel to the Company
and Astec, dated the date of the delivery of the Bonds, in form and substance
satisfactory to the Bank's counsel;
(ii) the written opinion of Hutchison Boyle Brooks & Fisher, a
professional corporation, bond counsel, dated the date of the delivery of the
Bonds, in form and substance satisfactory to the Bank's counsel;
(iii) a written opinion of counsel to the Issuer, dated the date of
delivery of the Bonds, in form and substance satisfactory to the Bank's
counsel;
(iv) evidence of due authorization, execution and delivery by the
parties thereto of the Bond Documents;
(v) a copy of resolutions of the board of directors of the
Company and of Astec, certified as of the Closing Date by an authorized
officer of the Company and Astec, authorizing, among other things, the
execution, delivery and performance by the Company of this Agreement and
of Astec of the Astec Guaranty;
(vi) true and correct copies of all governmental approvals
necessary for (i) the Issuer to enter into the Bond Documents and the
transactions contemplated by this Agreement and (ii) the Company to enter
this Agreement and the transactions contemplated hereby;
(vii) a certificate of the Secretary, the Assistant Secretary or
other officer satisfactory to the Bank of the Company and Astec, certifying the
name and true signatures of the officers of the Company and Astec,
authorized to sign this Agreement and the Astec Guaranty;
(viii) evidence that all conditions precedent to the issuance, sale
and delivery of the Bonds and the effectiveness of this Agreement shall have
occurred;
(ix) evidence of the status of the Company as a duly organized
and validly existing corporation under the laws of the State of Texas and of
Astec as a duly organized and validly existing corporation under the laws of
the State of Tennessee;
(x) evidence that the Issuer shall have duly executed, issued and
delivered the Bonds to the Trustee, and the Trustee shall have duly
authenticated the Bonds and delivered the Bonds against payment;
(xi) evidence that the Remarketing Agent has acknowledged
and accepted in writing its appointment as Remarketing Agent under the
Indenture and its duties and obligations thereunder;
(xii) the origination fee specified in Section 2.4(a) hereof;
(xiii) the Astec Guaranty; and
(xiv) the receipt of such other documents, certificates and
opinions as the Bank or its counsel may reasonably request.
(b) no law, regulation, ruling or other action of the United
States or the State, or any political subdivision or authority therein or
thereof shall be in effect or shall have occurred, the effect of which would be
to prevent the Bank from fulfilling its obligations under this Agreement;
(c) all legal requirements provided herein incident to the
execution, delivery and performance of this Agreement and the Bond
Documents and the transactions contemplated hereby and thereby, shall be
reasonably satisfactory to the Bank and its counsel;
(d) the representations and warranties contained in Article Four
of this Agreement shall be correct on and as of the Closing Date; and
(e) none of the Events of Default (as defined in Article Six
hereof) has occurred and is continuing, or would result from the issuance of
the Letter of Credit or the execution and delivery of this Agreement, and no
event has occurred and is continuing which would constitute an Event of
Default or Potential Default, and no event of default or event which with the
giving of notice or passage of time or both, would constitute an event of
default, under the Credit Agreement has occurred and is continuing;
Article IV Representations and Warranties
Section 4.1. Company's Representations
In order to induce
the Bank to enter into this Agreement, the Company represents and warrants
as of the Closing Date that;
(a) The Company is duly organized and existing and in good
standing under the laws of its jurisdiction of incorporation and has all
necessary corporate power to carry on its present business; the Company has
full power, right and authority to enter into this Agreement, to make the
borrowings herein provided for, to perform each and all of the matters and
things herein provided for; and this Agreement does not, nor will the
performance or observance by the Company of any of the matters and things
herein provided for, contravene any provision of law or of any order,
judgment, decree or regulation, or any charter or by-law provision of, or
applicable to, the Company or its properties.
(b) There is no action, suit or proceeding by or against, or, to
the actual knowledge of the Company, otherwise affecting, the Company
before any court, governmental agency or arbitrator, which (i) is pending and
has, in any one case or in conjunction with other such actions, suits or
proceedings, a reasonable likelihood of having a material adverse effect on
the financial condition of the Company, or (ii) is pending, or to the
knowledge of the Company is threatened, and has, in any one case or in
conjunction with other such actions, suits or proceedings, a reasonable
likelihood of having a material adverse effect on the financial condition,
operations, properties or business of the Company.
(c) The Company is not engaged in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulation U of the Board of Governors of the Federal Reserve
System) and no part of the proceeds of any drawing under the Letter of Credit
will be used to purchase or carry any margin stock or to extend credit to
others for such a purpose.
(d) Neither the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby, nor the fulfillment of
or compliance with the terms and conditions hereof conflicts with or results
in a breach of the terms, conditions or provisions of any material restriction
or any material agreement or instrument to which the Company is now a
party or by which the Company is bound, or constitutes a default under any of
the foregoing, or results in the creation or imposition of any lien, charge or
encumbrance whatsoever upon any of the material property or assets of the
Company under the terms of any instrument or agreement.
(e) No Event of Default or Potential Default has occurred and is
continuing.
(f) The Company has complied with all applicable statutes,
rules, regulations, orders and restrictions of any domestic or foreign
government or any instrumentality or agency thereof, having jurisdiction over
the conduct of its businesses or the ownership of its businesses or the
ownership of its Property. The Company has not received any notice to the
effect that its operations are not in material compliance with any of the
requirements of applicable federal, state and local environmental, health and
safety statutes and regulations or the subject of any federal or state
investigation evaluating whether any remedial action is needed to respond to
a release of any toxic or hazardous waste or substance into the environment.
.c2.Section 4.2. Bond Document Representation;. The Company
hereby makes to the Bank the same representations and warranties as set forth
by it in each Bond Document to which it is a party, which representations and
warranties as well as the related defined terms, are hereby incorporated herein
by reference for the benefit of the Bank with the same effect as if each and
every such representations, warranty and defined term were set forth herein in
its entirety and were made as of the date hereof. No amendment to such
representations, warranties or defined terms made pursuant to any Bond
Document shall be effective to amend such representation, warranties and
defined terms as incorporated herein by reference without the prior written
consent of the Bank.
Article V Covenants
Article V
Covenants
Section 5.1. Affirmative Covenants
The Company covenants
and agrees with the Bank that it will do the following so long as any amounts
may be drawn under the Letter of Credit, and thereafter, so long as any
amounts remain outstanding or Obligations remain unfulfilled under this
Agreement, unless the Bank shall otherwise consent in writing:
(a) Bond Proceeds. Use the proceeds of the Bonds for the
purposes set forth in the Loan Agreement and the Indenture.
(b) Advertising. The Bank may, with the prior consent of the
Company, which consent shall not be unreasonably withheld, use the name of
the Company in any advertising the Bank may wish to publish concerning the
Bank's role in the issuance of the Letter of Credit or other aspects of the
transactions contemplated by this Agreement or the Indenture.
Section 5.2. Negative Covenants
The Company covenants and
agrees with the Bank that so long as any amounts may be drawn under the
Letter of Credit and thereafter, so long as any amounts remain outstanding or
Obligations remain unfulfilled or unpaid under this Agreement, the Company
will not, directly or indirectly, unless the Bank shall otherwise consent in
writing:
(a) Amendments. Amend, modify, terminate or grant, or
permit the amendment, modification, termination or grant of, any waiver
under (or consent to, or permit or suffer to occur any action or omission
which results in, or is equivalent to, an amendment, modification, or grant of
a waiver under) the Bond Documents without the prior written consent of the
Bank.
(b) Placement Memorandum. Refer to the Bank in any
Placement Memorandum or make any changes in reference to the Bank in
any revision of the Placement Memorandum without the Bank's prior
written consent thereto.
Article VI Defaults
Section 6.1. Events of Default and Remedies
If any of the
following events shall occur and be continuing, each such event shall be an
"Event of Default":
(a) any representation or warranty made by the Company in
this Agreement, in the Related Documents or in any certificate, agreement,
instrument or statement contemplated by or made or delivered pursuant to or
in connection herewith or therewith, shall prove to have been false or
misleading in any material respect;
(b) any "event of default" shall have occurred under any of the
Related Documents (as defined respectively therein);
(c) default in the payment of (A) any Letter of Credit Fee when
and as due or (B) any other Obligations required to be paid or reimbursed
under this Agreement to the Bank when and as the same shall become due
and payable as herein provided;
(d) default in the due observance or performance of any
covenant set forth in Section 5.2 of this Agreement;
(e) default in the due observance or performance of any other
term, covenant or agreement set forth in this Agreement and such default has
not been remedied within twenty (20) days following written notice thereof
from the Bank.
(f) the Company, Astec or any Subsidiary of the Company or
Astec makes an assignment for the benefit of creditors, files a petition in
bankruptcy, is unable generally to pay its debts as they come due, is
adjudicated insolvent or bankrupt or there is entered any order or decree
granting relief in any involuntary case commenced against the Company,
Astec or any Subsidiary of the Company or Astec under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or if
the Company, Astec or any Subsidiary of the Company or Astec petitions or
applies to any tribunal for any receiver, trustee, liquidator, assignee,
custodian, sequestrator or other similar official of the Company, Astec or any
Subsidiary of the Company or Astec, or of any substantial part of its
respective Properties, or commences any proceeding in a court of law for a
reorganization, readjustment of debt, dissolution, liquidation or other similar
procedure under the law or statutes of any jurisdiction, whether now or
hereafter in effect, or if there is commenced against the Company, Astec or
any Subsidiary of the Company or Astec, any such proceeding in a court of
law or equity which remains undismissed or shall not be discharged, vacated
or stayed, or such jurisdiction shall not be relinquished, within sixty (60)
days after commencement, or the Company, Astec or any Subsidiary of the
Company or Astec by any act, indicates its consent to, approval of, or
acquiescence in any such proceeding in a court of law, or to an order for
relief in an involuntary under any such law, or to the appointment of any
receiver, trustee, liquidator, assignee, custodian, sequestrator or other
similar official for the Company, Astec or any Subsidiary of the Company or
Astec or a substantial part of its Properties, or if the Company, Astec or any
Subsidiary of the Company or Astec suffers any such receivership, trusteeship,
liquidation, assignment, custodianship, sequestration or other similar
procedure to continue undischarged for a period of sixty (60) days after
commencement or if the Company, Astec or any Subsidiary of the Company
or Astec takes any action for the purposes of effecting the foregoing;
(g) any material provision of this Agreement or any of the
Related Documents shall cease to be valid and binding, or the Company,
Astec or any governmental authority shall contest any material provision of
this Agreement or any of the Related Documents, or the Company, Astec or
any agent or trustee on behalf of the Company or Astec, shall deny that it has
any or further liability under this Agreement or any of the Related
Documents;
(h) one or more judgments, decrees or orders for the payment of
money in excess of $1,000,000 in the aggregate shall be rendered against the
Company, Astec or any Subsidiary of the Company or Astec and such
judgments, decrees or orders shall continue unsatisfied and in effect for a
period of 30 consecutive days after becoming final and nonappealable without
being vacated, discharged, satisfied, stayed or bonded pending appeal;
(i) the Company, Astec or any Subsidiary of the Company or
Astec shall (x) fail (after any relevant cure period) to pay any Indebtedness
of the Company, Astec or any Subsidiary of the Company or Astec, or any
interest or premium thereon, when due (whether by scheduled maturity,
required prepayment or demand) if the effect of such failure to pay is to
accelerate, or to permit the acceleration of, after the giving of notice or
passage of time or both, the maturity of such Indebtedness or (y) fail (after
any relevant cure period) to perform or observe any term, covenant or
condition on its part to be performed or observed under any agreement or
instrument relating to any such Indebtedness when required to be performed
or observed, if the effect of such failure to perform or observe is the
acceleration of the maturity of such Indebtedness, or any such Indebtedness
shall be declared to be due and payable, or required to be prepaid (other than
by a regularly scheduled required prepayment), prior to the stated maturity
thereof;
(j) any Default as defined in the Credit Agreement occurs
and the same is not cured or waived pursuant to the terms of the Credit
Agreement;
(k) any representation or warranty made by Astec in the Astec
Guaranty shall prove to have been false or misleading in any material respect;
or
(l) Astec shall breach any convenant or provision of the Astec
Guaranty;
Section 6.2. Remedies
Upon the occurrence of any Event of
Default the Bank may exercise any one or more of the following rights and
remedies in addition to any other remedies herein or by law provided:
(a) by written notice to the Company and the Trustee, require
that the Company immediately prepay to the Bank in immediately available
funds an amount equal to the Available Amount of the Letter of Credit, any
such amount to be held uninvested as collateral security for any and all
indebtedness, obligations and liabilities of the Company to the Bank
hereunder, whether now existing or hereafter arising and whether due or
contingent;
(b) declare the principal of and interest on the Obligations
owing hereunder immediately due and payable;
(c) give notice of the occurrence of an Event of Default to the
Trustee and instruct the Trustee to accelerate the Bonds, thereby causing the
Letter of Credit to expire fifteen days thereafter;
(d) direct the Trustee to exercise its rights under the Indenture
and the Loan Agreement; or
(e) pursue any other action available at law or in equity,
including, without limitation, collection of the Astec Guaranty.
Article VII Miscellaneous
Section 7.1. No Deductions; Increased Costs';. (a) Each
payment by the Company to the Bank under this Agreement or any other
Related Document shall be made without setoff or counterclaim and without
withholding for or on account of any present or future taxes (other than
overall net income taxes on the recipient imposed by any jurisdiction having
control of such recipient) imposed by or within the jurisdiction in which the
Company is domiciled, any jurisdiction from which the Company makes any
payment hereunder, or (in each case) any political subdivision or taxing
authority thereof or therein. If any such withholding is so required, the
Company shall make the withholding, pay the amount withheld to the
appropriate governmental authority before penalties attach thereto or interest
accrues thereon and forthwith pay such additional amount as may be
necessary to ensure that the net amount actually received by the Bank free and
clear of such taxes (including such taxes on such additional amount) is equal
to the amount which the Bank would have received had such withholding not
been made. If the Bank pays any amount in respect of any such taxes,
penalties or interest, the Company shall reimburse the Bank for that payment
on demand in the currency in which such payment was made. If the Company
pays any such taxes, penalties or interest, it shall deliver official tax
receipts evidencing that payment or certified copies thereof to the Bank on or
before the thirtieth day after payment.
(b) If any newly adopted, or any change in any, law, treaty,
regulation, guideline or directive or any new or modified interpretation of any
of the foregoing by any authority or agency charged with the administration
or interpretation thereof or any central bank or other fiscal, monetary or
other authority having jurisdiction over the Bank or the transactions
contemplated by this Agreement (whether or not having the force of law) shall:
(i) limit the deductibility of interest on funds obtained by the
Bank to pay any of its liabilities or subject the Bank to any tax, duty,
charge, deduction or withholding on or with respect to payments relating to the
Bonds, the Letter of Credit or this Agreement, or any amount paid or to be
paid by the Bank as the issuer of the Letter of Credit (other than any tax
measured by or based upon the overall net income of the Bank imposed by
any jurisdiction having control over the Bank);
(ii) impose, modify, require, make or deem applicable to the
Bank any reserve requirement, capital requirement, special deposit
requirement, insurance assessment or similar requirement against any assets
held by, deposits with or for the account of, or loans, letters of credit or
commitments by, an office of the Bank;
(iii) change the basis of taxation of payments due the Bank
under this Agreement or the Bonds (other than by a change in taxation of the
overall net income of the Bank);
(iv) cause or deem letters of credit to be assets held by the Bank
and/or as deposits on its books; or
(v) impose upon the Bank any other condition with respect to
any amount paid or payable to or by the Bank or with respect to this
Agreement, the Letter of Credit or the Bonds;
and the result of any of the foregoing is to increase the cost to the Bank of
making any payment or maintaining the Letter of Credit, or to reduce the
amount of any payment (whether of principal, interest or otherwise)
receivable by the Bank hereunder or under any other Related Document, or to
reduce the rate of return on the capital of the Bank or to require the Bank to
make any payment on or calculated by reference to the gross amount of any
sum received by it, in each case by an amount which the Bank in its
reasonable judgment deems material, then:
(1) the Bank shall promptly notify the Company in writing of
such event;
(2) the Bank shall promptly deliver to the Company a
certificate stating the change which has occurred or the reserve requirements
or other costs or conditions which have been imposed on the Bank or the
request, direction or requirement with which it has complied, together with
the date thereof, the amount of such increased cost, reduction or payment and
a reasonably detailed description of the way in which such amount has been
calculated, and the Bank's determination of such amounts, absent fraud or
manifest error, shall be conclusive; and
(3) the Company shall pay to the Bank, from time to time as
specified by the Bank, in the notice referred to in clause (l) above, such an
amount or amounts as will compensate the Bank for such additional cost,
reduction or payment.
The protection of this Section 7.1(b) shall be available to the Bank regardless
of any possible contention of invalidity or inapplicability of the law,
regulation or condition which has been imposed; provided, however, that if it
shall be later determined by the Bank that any amount so paid by the
Company pursuant to this Section 7.1(b) is in excess of the amount payable
under the provisions hereof, the Bank shall refund such excess amount to the
Company.
Section 7.2. Right of Setoff
(a) Upon the occurrence and
during the continuance of an Event of Default, the Bank is hereby authorized
at any time and from time to time without notice to the Company (any such
notice being expressly waived by the Company), and to the fullest extent
permitted by law, to setoff, to exercise any banker's lien or any right of
attachment and apply any and all balances, credits, deposits (general or
special, time or demand, provisional or fixed), accounts or monies at any time
held and other indebtedness at any time owing by the Bank to or for the
account of the Company (irrespective of the currency in which such accounts,
monies or indebtedness may be denominated and the Bank is authorized to
convert such accounts, monies and indebtedness into dollars) against any and
all of the Obligations of the Company, whether or not the Bank shall have
made any demand hereunder or thereunder.
(b) The rights of the Bank under this Section 7.2 are in
addition to, in augmentation of, and, except as specifically provided in this
Section 7.2, do not derogate from or impair other rights and remedies
(including, without limitation, other rights of setoff) which the Bank may
have.
Section 7.3. Indemnity, Costs, Expenses and Taxes
The Company agrees to indemnify and hold the Bank harmless from and against,
and to pay on demand, any and all claims, damages, losses, liabilities,
reasonable costs and expenses whatsoever which the Bank may incur or suffer
by reason of or in connection with the execution and delivery of this
Agreement or the Letter of Credit, or any other documents which may be
delivered in connection with this Agreement or the Letter of Credit, or in
connection with any payment under the Letter of Credit, including, without
limitation, the reasonable fees and expenses of counsel for the Bank with
respect thereto and with respect to advising the Bank as to its rights and
responsibilities under this Agreement and the Letter of Credit and all
reasonable fees and expenses, if any, in connection with the enforcement or
defense of the rights of the Bank in connection with this Agreement or the
Letter of Credit, or the collection of any monies due under this Agreement or
such other documents which may be delivered in connection with this
Agreement or the Letter of Credit; except, only if, and to the extent that any
such claim, damage, loss, liability, cost or expense shall be caused by the
willful misconduct or gross negligence of the Bank in performing its
obligations under this Agreement or in making payment against a drawing
presented under the Letter of Credit which does not substantially comply with
the terms thereof (it being understood and agreed by the parties hereto that in
making such payment the Bank's exclusive reliance on the documents
presented to the Bank in substantial compliance with the terms of the Letter
of Credit as to any and all matters set forth therein, whether or not any
statement or any document presented pursuant to the Letter of Credit proves
to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein proves to be untrue or inaccurate in any respect whatsoever
shall not be deemed willful misconduct or gross negligence of the Bank). The
Company, upon demand by the Bank at any time, shall reimburse the Bank
for any legal or other expenses incurred in connection with investigating or
defending against any of the foregoing except if the same is directly due to
the Bank's gross negligence or willful misconduct. Promptly after receipt by
the Bank of notice of the commencement, or threatened commencement, of any
action subject to the indemnities contained in this Section 7.3, the Bank shall
notify the Company thereof; but failure to so notify shall not relieve the
Company from any liability which it may have to the Bank hereunder. The
obligations of the Company under this Section 7.3 shall survive payment of
any funds due under this Agreement or the expiration of the Letter of Credit.
Section 7.4. Obligations Absolute
The obligations of the
Company under this Agreement shall be absolute, unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement, under all circumstances whatsoever, including, without
limitation, the following circumstances:
(i) any lack of validity or enforceability of the Letter of Credit,
the Bond Documents, the Credit Agreement, the Astec Guaranty, or any other
agreement or instrument relating thereto (collectively, the Related
Documents);
(ii) any amendment or waiver of or any consent to departure
from all or any of the Related Documents;
(iii) the existence of any claim, set-off, defense or other rights
which the Company may have at any time against the Trustee, the
Remarketing Agent or any other beneficiary or any transferee thereof, the
Bank (other than the defense of payment to the Bank in accordance with the
terms of this Agreement), or any other person or entity, whether in
connection with this Agreement, the Bond Documents or any unrelated
transaction;
(iv) any statement or any other document presented under the
Letter of Credit proving to be forged, fraudulent, or invalid or any statement
therein being untrue or inaccurate in any respect whatsoever; and
(v) payment by the Bank under the Letter of Credit against
presentation of a certificate which substantially complies with the terms of
the Letter of Credit.
Section 7.5. Liability of the Bank
The Company assumes all
risks of the acts or omissions of the Trustee, the Remarketing Agent, the
Tender Agent, or any other agent of the Trustee and any transferee of the
Letter of Credit with respect to its use of the Letter of Credit. Neither the
Bank nor any of its officers or directors shall be liable or responsible for:
(a) the use which may be made of the Letter of Credit or for any acts or
omissions of the Trustee and any transferee in connection therewith; (b) the
validity or genuineness of documents, or of any endorsement(s) thereon, even
if such documents should in fact prove to be in any or all respects invalid,
fraudulent or forged; (c) payment by the Bank against presentation of
documents which do not comply with the terms of the Letter of Credit,
including failure of any documents to bear any reference or adequate reference
to the Letter of Credit; or (d) any other circumstances whatsoever in making
or failing to make payment under the Letter of Credit; provided, however, that
the Company shall have a claim against the Bank, and the Bank shall be
liable to the Company, to the extent of any direct, as opposed to
consequential, damages suffered by the Company which the Company proves were
caused by (i) the Bank's wilful misconduct or gross negligence in
determining whether documents presented under the Letter of Credit comply with
the terms of the Letter of Credit or (ii) the Bank's wilful or grossly
negligent failure to make lawful payment under the Letter of Credit after the
presentation to the Bank
by the Trustee or a successor trustee under the Indenture of a certificate
strictly complying with the terms and conditions of the Letter of Credit (it
being understood that in making such payment the Bank's exclusive reliance
on the documents presented to the Bank in substantial compliance with the
terms of the Letter of Credit as to any and all matters set forth therein
whether or not any statement or any document presented pursuant to the
Letter of Credit proves to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein proves to be untrue or inaccurate in any
respect whatsoever shall not be deemed willful misconduct or gross
negligence of the Bank).
Section 7.6. Waiver of Rights by the Bank
No course of
dealing or failure or delay on the part of the Bank in exercising any right,
power or privilege hereunder or under the Letter of Credit or this Agreement
shall operate as a waiver thereof, nor shall a single or partial exercise
thereof preclude any other or further exercise or the exercise of any other
right or
privilege. The rights of the Bank under the Letter of Credit and the rights of
the Bank under this Agreement are cumulative and not exclusive of any rights
or remedies which the Bank would otherwise have. No notice to or demand
on the Company in any case shall entitle the Company to any other or further
notice or demand in the same, similar or other circumstances.
Section 7.7. Severability
In case any one or more of the
provisions contained in this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby. The parties shall endeavor in good faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
Section 7.8. Governing Law
This Agreement shall be
governed by and construed in accordance with the laws of the State of Illinois,
without giving effect to Illinois' choice of law principles.
Section 7.9. Notices
(a) Except as otherwise specified herein
regarding telephonic, facsimile and tested telex notice, all notices hereunder
shall be given by United States certified or registered mail, by telegram or by
other telecommunication device capable of creating written record of such
notice and its receipt. Notices hereunder shall be effective when received and
shall be addressed:
If to the Bank:
The First National Bank of Chicago
One First National Plaza
Suite 0088, 14th Floor
Chicago, Illinois 60670 Company:n: Commercial Banking-Midwest
Corporate
If to the Company:
Trencor Jetco, Inc.
3545 E. Main Street
Grand Prairie, Texas 75050
Attention: Controller
If to the Issuer:
Grapevine Industrial Development Corporation
c/o City of Grapevine
413 South Main Street
Grapevine, Texas 76051
Attention: City Manager
If to the Remarketing Agent:
The First National Bank of Chicago
One First National Plaza
Suite 0826
Chicago, Illinois 60670-0826
Attention: Public Finance Department
If to the Trustee:
Bank One, Texas, N.A.
P.O. Box 2604
500 Throckmorton
Fort Worth, Texas 76113-2604
Attention: Corporate Trustee Department
Any party may change its address for purposes hereof by notice to the other
parties.
(b) The Bank agrees to give immediate notice, promptly
confirmed in writing, to the Remarketing Agent of any notice of an Event of
Default given to the Trustee by the Bank.
Section 7.10. Survival of Certain Obligations
The obligations
of the Company under Sections 7.1, 7.3, 7.5 and 7.11 hereof shall survive the
payment of the Bonds and termination of this Agreement.
Section 7.11. Taxes and Expenses
Any taxes (excluding income
taxes) payable or ruled payable by any governmental authority in respect of
this Agreement, the Letter of Credit or the Bonds shall be paid by the
Company, together with interest and penalties, if any; provided, however, that
the Company may conduct a reasonable contest of any such taxes with the
prior written consent of the Bank. The Company shall reimburse the Bank for
any and all out of pocket expenses and charges paid or incurred by the Bank
in connection with the preparation, execution, delivery, administration and
enforcement (including reasonable attorneys' fees and disbursements of the
Bank's counsel) of this Agreement and any amendment to this Agreement or
the Letter of Credit
Section 7.12. Amendments
This Agreement may from time to
time be amended or supplemented only by a writing signed by both the
Company and the Bank.
Section 7.13. Headings
The headings and captions in this
Agreement are for convenience of reference only and shall not limit the
provisions hereof.
Section 7.14. Counterparts
This Agreement may be executed
in two or more counterparts, each of which shall constitute an original but
both or all of which, when taken together, shall constitute but one instrument,
and shall become effective when copies hereof which, when taken together,
bear the signatures of each of the parties hereto shall be delivered to the
Company and the Bank.
Please signify your agreement and acceptance of the foregoing by executing
this Agreement in the space provided below.
Very truly yours,
The First National Bank of Chicago
By /s/
Its
Accepted and agreed to:
Trencor Jetco, Inc.
By /s/
Its
Appendix I
Irrevocable Transferable Letter of Credit
April 29, 1994
Credit Number 00315672
Bank One, Texas, N.A., as trustee (the Trustee)
under the Indenture of Trust dated as of
April 1, 1994 (the Indenture), between Grapevine
Industrial Development Corporation and the Trustee
Attention: Corporate Trust Department
Dear Ladies and Gentlemen:
We hereby establish in your favor as Trustee under the Indenture, our
irrevocable transferable Letter of Credit No. 00315672 for the account of
Trencor Jetco, Inc. (the "Company"), whereby we hereby irrevocably
authorize you to draw on us from time to time, from and after the date hereof
to and including the earliest to occur of: our close of business on
(i) April 29, 1997 (the Stated Termination Date), (ii) the date which is the
Business Day following our receipt of the certificate in the form of Exhibit A
hereto,
(iii) the date which is the Business Day following receipt from you of a
certificate in the form set forth as Exhibit B hereto, (iv) the date on which
an Acceleration Drawing (as hereinafter defined) is honored by us, or (v) the
date which is fifteen (15) days following your receipt of a written notice from
us specifying the occurrence of an Event of Default under the Letter of Credit
Agreement dated as of April 1, 1994, between the Company and us (the
Letter of Credit Agreement), and directing you to accelerate the Bonds
(the earliest of such dates herein referred to as the Expiration Date); a
maximum aggregate amount not exceeding (U.S. $8,105,206 - the Original
Stated Amount) to pay principal of and accrued interest on, or the purchase
price of, the $8,000,000 Industrial Development Revenue Bonds Series 1994
(Trencor Jetco, Inc. Project) issued by the Grapevine Industrial Development
Corporation (the Bonds), in accordance with the terms hereof (said
$8,105,206 having been initially calculated to be equal to $8,000,000 the
original principal amount of the Bonds, plus $105,206 which is at least 48
days accrued interest on said principal amount of the Bonds at the rate of
ten percent (10%) per annum), available against the following documents (the
Payment Documents) presented to The First National Bank of Chicago
(the Bank) at our office at One North Dearborn, Suite 0236, 9th Floor,
Chicago, Illinois 60602 (or such other place as we may from time to time
specify [herein referred to as the Bank's Office), Attention: International
Trade Banking Division/Standby Letter of Credit Unit - Letter of Credit
Manager (or such other person as we may from time to time specify):
A certificate (with all blanks appropriately completed) (i) in the form
attached as Exhibit C hereto to pay accrued interest on the Bonds (an Interest
Drawing), (ii) in the form attached as Exhibit D hereto to pay the principal
amount of and accrued interest on the Bonds in respect of any redemption of
the Bonds (a "Redemption Drawing"), (iii) in the form attached as Exhibit E
hereto (a Liquidity Drawing Certificate), to allow the Remarketing Agent
or the Tender Agent (each as defined in the Reimbursement Agreement), as
the case may be, to pay the purchase price of Bonds tendered for purchase (a
Liquidity Drawing), (iv) in the form attached as Exhibit F hereto, to pay
the principal of and accrued interest in respect of Bonds the payment of which
has been accelerated pursuant to Section 6.02 of the Indenture (an
Acceleration Drawing), (v) in the form attached as Exhibit G hereto to
pay the principal amount of Bonds outstanding on the Stated Maturity (as
defined in the Letter of Credit Agreement) thereof (a Stated Maturity
Drawing), each certificate to be dated the date such certificate is presented
hereunder.
No drawings shall be made under this Letter of Credit for Pledged Bonds or
Company Bonds (as defined in the Indenture). Any defined terms which are
not expressly defined in this paragraph shall have the same meaning herein
as in the Indenture.
All drawings shall be made by presentation of each Payment Document at our
office at One North Dearborn, Suite 0236, 9th Floor, Chicago, Illinois 60602
as aforesaid or by telecopier (at telecopier number (312) 407-1065) or tested
telex (at telex number 4330253 Answerback: FNBCUI), Attention:
International Trade Banking Division/Standby Letter of Credit Unit - Letter
of Credit Manager, without further need of documentation, including without
need of the original of this Letter of Credit, it being understood that each
Payment Document so submitted is to be the sole operative instrument of
drawing. You shall use your best efforts to give telephonic notice of a drawing
to the Bank at (312) 407-3943 on the Business Day preceding the day of such
drawing (but such notice shall not be a condition to drawing hereunder and
you shall have no liability for not doing so). In addition, if any drawing is
made by presentation of a Payment Document by telecopier or tested telex you
shall use your best efforts to promptly deliver to us at the Bank's Office the
executed, completed originals of such Payment Documents. In the event of
any discrepancy between the versions of the Payment Document submitted to
us by telecopier or tested telex and the original subsequently delivered to us,
it is agreed that the sole operative document which shall control for all
purposes shall be the version submitted to us by telecopier or tested telex.
We agree to honor and pay the amount of any Interest, Redemption,
Liquidity, Acceleration or Stated Maturity Drawing if presented in
compliance with all of the terms of this Letter of Credit. If such drawing,
other than a Liquidity Drawing or an Interest Drawing, is presented prior to
11:00 a.m., Chicago time, on a Business Day, payment shall be made to you
of the amount specified, in immediately available funds, by 11:00 a.m.,
Chicago time, on the following Business Day. If any such drawing, other than
a Liquidity Drawing or an Interest Drawing, is presented at or after 11:00
a.m., Chicago time, on a Business Day, payment shall be made to you of the
amount specified, in immediately available funds, by 2:00 p.m., Chicago
time, on the following Business Day. If a Liquidity Drawing or an Interest
Drawing is presented prior to 11:00 a.m. Chicago time, on a Business Day,
payment shall be made to you of the amount specified, in immediately
available funds, by 2:00 p.m., Chicago time, on the same Business Day. If a
Liquidity Drawing or an Interest Drawing is presented at or after 11:00 a.m.,
Chicago time, payment shall be made to you of the amount specified, in
immediately available funds, by 10:00 a.m., Chicago time, on the following
Business Day. Payments made hereunder pursuant to a drawing other than a
Liquidity Drawing shall be made by wire transfer to Bank One, Texas, N.A.
ABA, #111000614, Account Name: Trust Clearing Account, Account
No.: 9670965053, Attention: Lee Ann Anderson - Corporate Trust Dept.
(or to such other account number or address as the Trustee may from time to
time designate). Payments made hereunder pursuant to a Liquidity Drawing
shall be made as specified by the Trustee in the Liquidity Drawing Certificate
(or to such other account number or address as the Trustee may from time to
time designate). "Business Day" means any day other than a Saturday or a
Sunday or a day on which banking institutions in the city in which the
principal corporate trust office of the Trustee or the principal corporate
trust office of the Tender Agent or the principal office of the Remarketing
Agent (as defined in the Indenture) is located, or in Chicago, Illinois, or on
which banking institutions located in the City of New York, New York, are
required or authorized by law to remain closed, or other than a day on which
the New York Stock Exchange is closed.
The Available Amount of this Letter of Credit shall be reduced automatically
by the amount of any drawing hereunder; provided, however, that the amount
of any Interest Drawing hereunder shall be automatically reinstated effective
the 11th calendar day from the date of such drawing unless you shall have
received notice by telecopy (or other facsimile telecommunication) within ten
(10) calendar days of the date of any Interest Drawing that the Bank has not
been reimbursed in full for any such drawing or any Event of Default has
occurred under the Letter of Credit Agreement and as a consequence thereof
the Letter of Credit will not be so reinstated. After payment by us of a
Liquidity Drawing, the obligation of the Bank to honor drawings under this
Letter of Credit will be automatically reduced by an amount equal to the
Original Purchase Price (as defined below) of any Bonds (or portions thereof)
purchased pursuant to said drawing. Prior to the Conversion Date, upon
reimbursement to the Bank of the amount of any Liquidity Drawing prior to
any remarketing of the Bonds in respect of which such Liquidity Drawing
was made plus all accrued interest thereon (provided no Event of Default has
occurred and is continuing under the Letter of Credit Agreement), this Letter
of Credit shall be reinstated by an amount equal to the principal amount of
such Liquidity Drawing plus the accrued interest portion, if any, included in
the relevant Liquidity Drawing when made. In addition, prior to the
Conversion Date in the event of the remarketing of Bonds (or portions
thereof) previously purchased with the proceeds of a Liquidity Drawing, our
obligation to honor drawings hereunder will be automatically reinstated
concurrently upon receipt by us, or the Trustee on our behalf, of an amount
equal to the principal amount of and accrued interest on such Bonds (or
portions thereof) arising out of the remarketing of such Bonds. The amount of
such reinstatement shall be equal to the Original Purchase Price of such
Bonds (or portions thereof). Original Purchase Price shall mean the
principal amount of any Bond purchased with the proceeds of a Liquidity
Drawing plus the amount of accrued interest thereon paid with the proceeds
of a Liquidity Drawing (and not pursuant to an Interest Drawing) upon the
purchase of such Bond.
Upon receipt by us of a certificate of the Trustee in the form of Exhibit D or
H hereto, the Bank will automatically and permanently reduce the amount
available to be drawn hereunder by the amount specified in such certificate.
Notwithstanding any other provision hereof, the amount so permanently
reduced shall not reinstate. Such reduction shall be effective as of the next
Business Day following the date of delivery of such certificate.
Upon any permanent reduction of the amounts available to be drawn under
this Letter of Credit, as provided herein, we may deliver to you a substitute
Letter of Credit in exchange for this Letter of Credit or an amendment to this
Letter of Credit substantially in the form of Exhibit I hereto to reflect any
such reduction. If we deliver to you such a substitute Letter of Credit you
shall simultaneously surrender to us for cancellation the Letter of Credit then
in your possession.
The Available Amount shall mean the Original Stated Amount (i) less the
amount of all prior reductions pursuant to Interest, Redemption, Liquidity,
Acceleration and Stated Maturity Drawings, (ii) less the amount of any
reduction in the Available Amount of the Letter of Credit pursuant to a
certificate in the form of Exhibit D or H hereto to the extent such reduction
is not already accounted for by a reduction in the Available Amount pursuant to
(i) above, (iii) plus the amount of all reinstatements as above provided.
Prior to the Expiration Date, we may extend the Stated Termination Date
from time to time at the request of the Company by delivering to you an
amendment to this Letter of Credit in the form of Exhibit K hereto
designating the date to which the Stated Termination Date is being extended.
Each such extension of the Stated Termination Date shall become effective on
the Business Day following delivery of such notice to you and thereafter all
references in this Letter of Credit to the Stated Termination Date shall be
deemed to be references to the date designated as such in such notice. Any
date to which the Stated Termination Date has been extended as herein
provided may be extended in a like manner.
Upon the Expiration Date this Letter of Credit shall automatically terminate
and be delivered to the Bank for cancellation.
All payments made by us hereunder shall be made from our funds, but in no
event shall such payment be made with funds obtained from the Issuer or the
Company or any other person.
This Letter of Credit, together with any amendments thereto, is transferable
in whole only to your successor as Trustee. Any such transfer (including any
successive transfer) shall be effective upon receipt by us of a signed copy of
the instrument effecting each such transfer signed by the transferor and by the
transferee in the form of Exhibit J hereto (which shall be conclusive evidence
of such transfer) and, in such case, the transferee instead of the transferor
shall, without the necessity of further action, be entitled to all the benefits
of and rights under this Letter of Credit in the transferor's place; provided
that, in such case, any certificates of the Trustee to be provided hereunder
shall be signed by one who states therein that he is a duly authorized officer
or agent of the transferee.
The Trustee, and any successor Trustee as hereinabove provided, is and shall
be entitled to the benefit of this Letter of Credit only as Trustee under the
Indenture.
Communications with respect to this Letter of Credit shall be addressed to us
at The First National Bank of Chicago, One North Dearborn, Suite 0236, 9th
Floor, Chicago, Illinois 60602, Attention: International Trade Banking
Division/Standby Letter of Credit Unit - Letter of Credit Manager,
specifically referring to the number of this Letter of Credit.
To the extent not inconsistent with the express terms hereof, this Letter of
Credit shall be governed by, and construed in accordance with, the terms of
the Uniform Customs and Practice for Documentary Credits (1993 Revision),
International Chamber of Commerce Publication No. 500 (the Uniform
Customs) except for Articles 41 and Section (g) of Article 48 thereof. For
purposes of Article 42(a), the place of presentation for payment, acceptance
and negotiation shall be the Bank's Office. Notwithstanding
Article 9(d)(iii), amendments to this Letter of Credit contemplated by
Exhibits I and K hereto shall not require acceptance by you in order to be
binding against you, the Company and the Bank. As to matters not governed
by the Uniform Customs, this Letter of Credit shall be governed by and
construed in accordance with the laws of the State of Illinois.
This Letter of Credit sets forth in full the terms of our undertaking, and such
undertaking shall not in any way be modified or amended by reference to any
other document whatsoever.
The First National Bank of Chicago
Exhibit A to
The First National Bank of Chicago
Letter of Credit
No. 00315672
Notice of Conversion Date
The First National Bank of Chicago
One North Dearborn
Suite 0236, 9th Floor
Chicago, Illinois 60602
Attention: Letter of Credit Unit
Ladies and Gentlemen:
Reference is hereby made to that certain Irrevocable Transferable Letter of
Credit No. 00315672 dated April 29, 1994, (the Letter of Credit), which
has been established by you for the account of Trencor Jetco, Inc. (the
Company) in favor of Bank One, Texas, N.A. as Trustee under the
Indenture.
Each of the undersigned hereby certify and confirm that the Conversion Date
of the Bonds within the meaning of that certain Letter of Credit Agreement
dated as of April 1, 1994 between you and the Company has occurred on
[insert date], and, accordingly, said Letter of Credit shall terminate in
accordance with its terms on the Business Day following your receipt of this
notice.
All defined terms used herein which are not otherwise defined herein shall
have the same meaning as in the Letter of Credit.
Bank One, Texas, N.A., as Trustee
By /s/
[Title of Authorized Officer]
Trencor Jetco, Inc.
By /s/
Its
Exhibit B
To The First National Bank of Chicago
Letter of Credit
No. 00315672
Notice of Termination
The First National Bank of Chicago
One North Dearborn
Suite 0236, 9th Floor
Chicago, Illinois 60602
Attention: Corporate Trust Department
Ladies and Gentlemen:
Reference is hereby made to that certain Irrevocable Transferable Letter of
Credit No. 00315672 dated April 29, 1994, (the Letter of Credit), which
has been established by you for the account of Trencor Jetco, Inc. in favor of
Bank One, Texas, N.A. as Trustee under the Indenture.
The undersigned hereby certifies and confirms that (i) no Bonds (as defined
in the Letter of Credit) remain Outstanding within the meaning of the
Indenture, (ii) all drawings required to be made under the Indenture and
available under the Letter of Credit have been made and honored, or (iii) a
substitute letter of credit has been issued to replace the Letter of Credit in
accordance with the Indenture (as such term is defined in the Letter of
Credit), and, accordingly, said Letter of Credit shall be terminated in
accordance with its terms.
All defined terms used herein which are not otherwise defined shall have the
same meaning as in the Letter of Credit.
Bank One, Texas, N.A., as Trustee
By /s/
[Title of Authorized Officer]
Exhibit C to
The First National Bank of Chicago
Letter of Credit
No. 00315672
Interest Drawing Certificate
The First National Bank of Chicago
One North Dearborn
Suite 0236, 9th Floor
Chicago, Illinois 60602
Attention: Letter of Credit Unit
The undersigned individual, a duly authorized officer of Bank One, Texas,
N.A., as Trustee under the Indenture (the Beneficiary), hereby Certifies on
behalf of the Beneficiary as follows with respect to (i) that certain
Irrevocable Transferable Letter of Credit No. 00315672 dated April 29, 1994,
(the Letter of Credit), issued by The First National Bank of Chicago, in favor
of the Beneficiary; (ii) those certain Bonds (as defined in the Letter of
Credit); and (iii) that certain Indenture (as defined in the Letter of Credit):
1. The Beneficiary is the Trustee under the Indenture and
hereby demands payment of $__________________.
2. The Beneficiary is entitled to make this drawing under the
Letter of Credit in the amount specified in paragraph numbered 1, pursuant to
the Indenture with respect to the payment of interest due on all Bonds
outstanding on the Interest Payment Date (as defined in the Indenture)
occurring on __________________, other than Pledged Bonds and Company
Bonds (each as defined in the Indenture).
3. The amount of the drawing is equal to the amount required
to be drawn by the Trustee pursuant to Section 5.04 of the Indenture.
4. The amount of the drawing made by this Certificate was
computed in compliance with the terms of the Indenture and, when added to
the amount of any other drawing under the Letter of Credit made
simultaneously herewith, does not exceed the Available Amount of the Letter
of Credit.
In Witness Whereof, this Certificate has been executed this _____ day of
___________, ____.
Bank One, Texas, N.A., as Trustee
By /s/
[Title of Authorized Officer]
Exhibit D to
The First National Bank of Chicago
Letter of Credit
No. 00315672
Redemption Drawing and Reduction Certificate
The First National Bank of Chicago
One North Dearborn
Suite 0236, 9th Floor
Chicago, Illinois 60602
Attention: Corporate Trust Department
The undersigned individual, a duly authorized officer of Bank One, Texas,
N.A., as Trustee under the Indenture (the Beneficiary), hereby Certifies on
behalf of the Beneficiary as follows with respect to (i) that certain
Irrevocable Transferable Letter of Credit No. 00315672 dated April 29, 1994
(the Letter of Credit ), issued by The First National Bank of Chicago (the
Bank), in favor of the Beneficiary; (ii) those certain Bonds (as defined in
the Letter of Credit); and (iii) that certain Indenture (as defined in the
Letter of Credit):
1. The Beneficiary is the Trustee under the Indenture and
hereby demands payment of $_______________.
2. The Beneficiary is entitled to make this drawing under the
Letter of Credit in the amount specified in paragraph numbered 1, pursuant
to Section 5.04 of the Indenture.
3. (a) The amount of this drawing is equal to (i) the principal
amount of Bonds to be redeemed by the Issuer pursuant to Section
______________________ of the Indenture on _______________________
(the Redemption Date) other than Pledged Bonds and Company Bonds
(each as defined in the Indenture), plus (ii) interest on such Bonds accrued
from the immediately preceding Interest Payment Date (as defined in the
Letter of Credit) (or if none, the date of issuance of the Bonds) to the
Redemption Date, provided that in the event the Redemption Date coincides
with an Interest Payment Date this drawing shall not include any accrued
interest on such Bonds.
(b) Of the amount stated in paragraph 2 above:
(i) $______________ is demanded in respect of the principal
amount of the Bonds referred to in subparagraph (a) above;
(ii) $______________ is demanded in respect of accrued
interest on such Bonds; and
4. The amount of the drawing made by this Certificate was
computed in compliance with the terms and conditions of the Indenture and,
when added to the amount of any other drawing under the Letter of Credit
made simultaneously herewith, does not exceed the Available Amount of the
Letter of Credit.
5. Upon payment of the amount drawn hereunder, the Bank is
hereby directed to permanently reduce the Available Amount (as defined in
the Letter of Credit) of the Letter of Credit by
_________________________________________ and the Available Amount
shall thereupon equal_______________________________.
6. Of the amount of the reduction stated in paragraph 5 above:
(i) $______________ is attributable to the principal amount of
Bonds redeemed; and
(ii) $______________ is attributable to interest on such Bonds
(i.e., ____ days interest thereon at ______%.
7. The amount of the reduction in the Available Amount of the
Letter of Credit has been computed in accordance with the Letter of Credit
Agreement dated as of April 1, 1994, between the Bank and Trencor Jetco,
Inc.
8. Following the reduction, the Available Amount of the Letter
of Credit shall be at least equal to the aggregate principal amount of the
Bonds outstanding (to the extent such Bonds are not Pledged Bonds or
Company Bonds) plus 48 days interest thereon at the 10%.
In Witness Whereof, this Certificate has been executed this _____ day of
____________, _____.
Bank One, Texas, N.A., as Trustee
By /s/
[Title of Authorized Officer]
Exhibit E to
The First National Bank of Chicago
Letter of Credit
No. 00315672
Liquidity Drawing Certificate
The First National Bank of Chicago
One North Dearborn
Suite 0236, 9th Floor
Chicago, Illinois 60602
Attention: Letter of Credit Unit
The undersigned individual, a duly authorized officer of Bank One, Texas,
N.A., as Trustee under the Indenture (the Beneficiary) hereby Certifies as
follows with respect to (i) that certain Irrevocable Transferable Letter of
Credit No. 00315672 dated April 29, 1994 (the Letter of Credit) issued
by The First National Bank of Chicago (the Bank), in favor of the
Beneficiary; (ii) those certain Bonds (as defined in the Letter of Credit); and
(iii) that certain Indenture (as defined in the Letter of Credit):
(1) The Beneficiary is the Trustee under the Indenture and
hereby demands payment of $_________________.
(2) The Beneficiary is entitled to make this drawing under the
Letter of Credit in the amount specified in paragraph numbered 1, with
respect to the payment of the purchase price of Bonds tendered or deemed
tendered for purchase in accordance with Section 2.03 or 2.04 of the
Indenture and to be purchased on _______________________________ (the
Purchase Date) which Bonds have not been remarketed as provided in the
Indenture or the purchase price of which has not been received by the Tender
Agent or the Remarketing Agent (as defined in the Indenture).
(3) (a) The amount of the drawing is equal to (i) the principal
amount of Bonds to be purchased pursuant to the Indenture on the Purchase
Date other than Pledged Bonds and Company Bonds (each as defined in the
Indenture), plus (ii) interest on such Bonds accrued from the immediately
preceding Interest Payment Date (as defined in the Letter of Credit) (or if
none, the date of issuance of the Bonds) to the Purchase Date, provided that
in the event the Purchase Date coincides with an Interest Payment Date this
drawing shall not include any accrued interest on such Bonds.
(b) Of the amount stated in paragraph (2) above:
(i) $______________ is demanded in respect of the principal
portion of the purchase price of the Bonds referred to in subparagraph (2)
above; and
(ii) $______________ is demanded in respect of payment of the
interest portion of the purchase price of such Bonds.
(4) The amount of the drawing made by this Certificate was
computed in compliance with the terms and conditions of the Indenture and,
when added to the amount of any other drawing under the Letter of Credit
made simultaneously herewith, does not exceed the Available Amount of the
Letter of Credit.
(5) If the Bonds are not in the Book Entry System, the
Beneficiary will register or cause to be registered in the name of the
Company, upon payment of the amount drawn hereunder, Bonds in the
principal amount of the Bonds being purchased with the amounts drawn
hereunder and will hold such Bonds in accordance with Section 3.11 of the
Indenture. If the Bonds are in the Book Entry System, the Bonds will be
registered in the name of the Trustee on the records of the Securities
Depository, and the Trustee will hold the Bonds for the benefit of the Bank.
(6) Payment by the Bank pursuant to this drawing shall be
made to ___________________________ ABA Number ____________,
Account Number, Attention: __________, Re: ___________________.
In Witness Where Of, this Certificate has been executed this _____ day of
__________, _____.
Bank One, Texas, N.A., as Trustee
By /s/
[Title of Authorized Officer]
Exhibit F
to
The First National Bank of Chicago
Letter of Credit
No. 00315672
Acceleration Drawing Certificate
The First National Bank of Chicago
One North Dearborn
Suite 0236, 9th Floor
Chicago, Illinois 60602
Attention: Corporate Trust Department
The undersigned individual, a duly authorized officer of Bank One, Texas,
N.A., as Trustee under the Indenture (the Beneficiary), hereby Certifies on
behalf of the Beneficiary as follows with respect to (i) that certain
Irrevocable Transferable Letter of Credit No. 00315672 dated April 29, 1994
(the Letter of Credit), issued by The First National Bank of Chicago in favor
of the Beneficiary; (ii) those certain Bonds (as defined in the Letter of
Credit); and (iii) that certain Indenture (as defined in the Letter of Credit):
1. The Beneficiary is the Trustee under the Indenture and
hereby demands payment of $________________.
2. An Event of Default has occurred under subsection [insert
subsection] of the Indenture and the Trustee has declared the principal of and
accrued interest on all Bonds then outstanding immediately due and payable.
The Beneficiary is entitled to make this drawing under the Letter of Credit in
the amount specified in paragraph numbered 1, pursuant to Section 6.02 of
the Indenture.
3. (a) The amount of this drawing is equal to (i) the principal
amount of Bonds outstanding on [insert date of acceleration] (the
"Acceleration Date") other than Pledged Bonds and Company Bonds (each
as defined in the Indenture), plus (ii) interest on such Bonds accrued from the
immediately preceding Interest Payment Date (as defined in the Letter of
Credit) (or if none, the date of issuance of the Bonds) to the Acceleration
Date.
(b) Of the amount stated in paragraph 2 above:
(i) $______________ is demanded in respect of the principal
portion of the Bonds referred to in subparagraph (a) above; and
(ii) $______________ is demanded in respect of accrued
interest on such Bonds.
4. The amount of this drawing made by this Certificate was
computed in compliance with the terms and conditions of the Indenture and,
when added to the amount of any drawing under the Letter of Credit made
simultaneously herewith, does not exceed the Available Amount of the Letter
of Credit.
In Witness Whereof, this Certificate has been executed this _____ day of
__________, _____.
Bank One, Texas, N.A., as Trustee
By /s/
[Title of Authorized Officer]
Exhibit G to
The First National Bank of Chicago
Letter of Credit
No. 00315672
Stated Maturity Drawing Certificate
The First National Bank of Chicago
One North Dearborn
Suite 0236, 9th Floor
Chicago, Illinois 60602
Attention: Letter of Credit Unit
The undersigned individual, a duly authorized officer of Bank One, Texas,
N.A., as Trustee under the Indenture (the Beneficiary), hereby Certifies on
behalf of the Beneficiary as follows with respect to (i) that certain
Irrevocable Transferable Letter of Credit No. 00315672 dated April29, 1994
(the Letter of Credit), issued by The First National Bank of Chicago, in favor
of the Beneficiary; (ii) those certain Bonds (as defined in the Letter of
Credit); and (iii) that certain Indenture (as defined in the Letter of Credit):
1. The Beneficiary is the Trustee under the Indenture and
hereby demands payment of $_________________.
2. The Beneficiary is entitled to make this drawing under the
Letter of Credit in the amount specified in paragraph numbered 1, pursuant
to Section 5.04 of the Indenture.
3. The amount of this drawing is equal to the principal amount
of Bonds outstanding on April 1, 2019, the maturity date thereof as specified
in Section 2.02 of the Indenture, other than Pledged Bonds and Company
Bonds (each as defined in the Indenture).
4. The amount of this drawing made by this Certificate was
computed in compliance with the terms and conditions of the Indenture and,
when added to the amount of any other drawing under the Letter of Credit
made simultaneously herewith, does not exceed the Available Amount of the
Letter of Credit.
In Witness Whereof, this Certificate has been executed this _______ day of
____________, ______.
Bank One, Texas, N.A., as Trustee
By /s/
[Title of Authorized Officer]
Exhibit H to
The First National Bank of Chicago
Letter of Credit
No. 00315672
Reduction Certificate
The First National Bank of Chicago
One North Dearborn
Suite 0236, 9th Floor
Chicago, Illinois 60602
Attention: Letter of Credit Unit
The undersigned hereby Certifies with respect to (i) that certain Irrevocable
Transferable Letter of Credit No. 00315672 dated April 29, 1994 (the
Letter of Credit), issued by The First National Bank of Chicago (the
Bank), in favor of the Beneficiary; (ii) those certain Bonds (as defined in
the Letter of Credit); and (iii) that certain Indenture (as defined in the
Letter of Credit):
1. The Beneficiary is the Trustee under the Indenture.
2. Upon receipt by the Bank of this Certificate, the Available
Amount (as defined in the Letter of Credit) shall be reduced by
$______________ and the Available Amount shall thereupon equal
$______________, all in accordance with the Letter of Credit.
$______________ of said amount is attributable to interest.
3. The amount of the reduction in the Available Amount of the
Letter of Credit has been computed in accordance with the provisions of the
Letter of Credit Agreement dated as of April 1, 1994, between the Bank and
Trencor Jetco, Inc. (the Letter of Credit Agreement).
4. Following the reduction, the Available Amount of the Letter
of Credit shall be at least equal to the aggregate principal amount of the
Bonds outstanding (to the extent such Bonds are not Pledged Bonds or
Company Bonds, as defined in the Letter of Credit) plus 48 days interest
thereon at 10%.
In Witness Whereof, this Certificate has been executed this _____ day of
__________, _____.
Bank One, Texas, N.A., as Trustee
By /s/
[Title of Authorized Officer]
Exhibit I to
The First National Bank of Chicago
Letter of Credit
No. 00315672
Notice of Amendment
[Trustee]
___________________
___________________
Attention:
Ladies and Gentlemen:
Reference is hereby made to that certain Irrevocable Transferable Letter of
Credit No. 00315672 dated April 29, 1994 (the Letter of Credit),
established by us in your favor as Beneficiary. We hereby notify you that, in
accordance with the terms of the Letter of Credit and that certain Letter of
Credit Agreement dated as of April 1, 1994, between Trencor Jetco, Inc. and
us, the Available Amount of the Letter of Credit has been reduced to
$_____________.
This letter should be attached to the Letter of Credit and made a part thereof.
The First National Bank of Chicago
By /s/
Its
Exhibit J to
The First National Bank of Chicago
Letter of Credit
No. 00315672
Transfer Certificate
The First National Bank of Chicago
One North Dearborn
Suite 0236, 9th Floor
Chicago, Illinois 60602
Attention: Letter of Credit Unit
Ladies and Gentlemen:
Reference is made to that certain Irrevocable Transferable Letter of Credit
No. 00315672 dated April29, 1994 (as amended from time to time, the
Letter of Credit) which has been established by the Bank in favor of
________________________________.
The undersigned [Name of Transferor] has transferred and assigned (and
hereby confirms to you said transfer and assignment) all of its rights in and
under said Letter of Credit to [Name of Transferee] and confirms that [Name
of Transferor] no longer has any rights under or interest in said Letter of
Credit. The undersigned [name of Transferor] irrevocably instructs you that
the undersigned [name of Transferor] does not retain the right to refuse you to
advise amendments to the Letter of Credit to the [name of Transferee], and all
such amendments shall be advised only to the [name of Transferee].
Transferor and Transferee have indicated on the face of said Letter of Credit
that it has been transferred and assigned to Transferee.
Transferee hereby certifies that it is a duly authorized Transferee under the
terms of said Letter of Credit and is accordingly entitled, upon presentation
of the documents called for therein, to receive payment thereunder.
Name of Transferor
By /s/
[Name and Title of Authorized Officer of Transferor]
Name of Transferee
By /s/
[Name and Title of Authorized Officer of Transferee]
Exhibit K to
The First National Bank of Chicago
Letter of Credit
No. 00315672
Notice of Amendment
[Trustee]
___________________
___________________
Attention:
Ladies and Gentlemen:
Reference is hereby made to that certain Irrevocable Transferable Letter of
Credit No. 00315672 dated April 29, 1994 (the Letter of Credit),
established by us in your favor as Beneficiary. We hereby notify you that, in
accordance with the terms of the Letter of Credit and that certain Letter of
Credit Agreement dated as of April 1, 1994, between Trencor Jetco, Inc. and
us, the Stated Termination Date of the Letter of Credit has been extended to
________________ __________________.
This letter should be attached to the Letter of Credit and made a part thereof.
The First National Bank of Chicago
By /s/
Its
EXHIBIT 10.85
GUARANTY AGREEMENT
DATED AS OF APRIL 1, 1994
BETWEEN
ASTEC INDUSTRIES, INC.
AND
BANK ONE, TEXAS, NA
AS TRUSTEE
$8,000,000
GRAPEVINE INDUSTRIAL DEVELOPMENT CORPORATION
INDUSTRIAL DEVELOPMENT REVENUE BONDS, SERIES 1994
(TRENCOR JETCO, INC. PROJECT)
This is a Guaranty Agreement dated as of April 1, 1994, between Astec
Industries, Inc., a Tennessee corporation (the Guarantor), and Bank One,
Texas, NA (the Trustee), as Trustee under that certain Indenture of Trust
dated as of April 1, 1994 (the Indenture) from Grapevine Industrial
Development Corporation, a public nonprofit corporation duly organized and
existing under the laws of the State of Texas (the Issuer). All initially
capitalized terms utilized herein which are not otherwise defined shall have
the meanings set forth in the Indenture.
Recitals
The Issuer concurrently herewith is issuing its Industrial Development
Revenue Bonds, Series 1994 (Trencor Jetco, Inc. Project) in the aggregate
principal amount of $8,000,000 (the Bonds) under and pursuant to the
Indenture.
The proceeds derived from the issuance of the Bonds are to be used
to finance the acquisition, construction, and equipping of a manufacturing
facility located in the City of Grapevine, Texas, to be owned and operated by
Trencor Jetco, Inc., a Texas corporation (the Company). The proceeds of the
Bonds will be loaned to the Company, pursuant to a Loan Agreement dated as
of April 1, 1994 (the Agreement) by and between the Issuer and the
Company.
The Company is a wholly-owned subsidiary of the Guarantor.
In order to enhance the marketability of the Bonds and thereby
achieve cost and other savings to the Guarantor and as an inducement to the
purchasers of the Bonds by all who shall at any time become Owners of the
Bonds, the Guarantor does hereby covenant and agree with the
Trustee as follows:
Article I
Representations and Warranties of Guarantor
Section 1.1. The representations, warranties, and agreements of
the Guarantor set forth in Section 4.02 of the Purchase Agreement are
incorporated by reference herein and are true and correct as of the date
hereof.
Article II
Covenants and Agreements
Section 2.1. The Guarantor hereby unconditionally guarantees
to the Trustee for the benefit of the Owners of the Bonds (a) the full and
prompt payment of the principal of and premium, if any, on the Bonds when
and as the same shall become due, whether at the stated maturity thereof,
by acceleration, by call for redemption or otherwise, (b) the full and prompt
payment of the interest on the Bonds when and as the same shall become due,
(c) the full and prompt payment of the purchase price of Bonds tendered or
deemed tendered pursuant to the Indenture when and as the same shall
become due, and (d) the full and prompt payment of the Company's
obligations under the Agreement including all fees and expenses of the Issuer
and the Trustee relating to the Bonds. All payments by the Guarantor shall
be paid in lawful money of the United States of America. Each and every
default in payment of the principal or purchase price of, premium, if any, or
interest on any Bond or default in payment of any amount due under the
Agreement shall give rise to a separate cause of action hereunder, and
separate suits may be brought hereunder as each cause of action arises.
Section 2.2. The obligations of the Guarantor under this
Guaranty shall be absolute and unconditional and shall remain in full force
and effect until the entire principal of, premium, if any, and interest on the
Bonds shall have been paid or funds sufficient for such payment shall have
been deposited with the Trustee in trust for such purpose as provided in
Article V of the Indenture and all amounts payable by the Company under the
Agreement shall have been paid in full and such obligations shall not be
affected, modified, or impaired upon the happening from time to time of any
event other than such payment, including, without limitation, any of the
following, whether or not with notice to, or the consent of, the Guarantor:
(a) the compromise, settlement, release, or termination of any
or all of the obligations, covenants, or agreements of the Issuer under the
Indenture or of the Company under the Agreement; or
(b) the failure to give notice to the Guarantor of the occurrence
of an event of default under the terms and provisions of this Guaranty, the
Indenture, or the Agreement; or
(c) the waiver of the payment, performance, or observance by
the Issuer, the Company, or the Guarantor of any of the obligations,
covenants or agreements of either of them contained in the Indenture, the
Agreement, or this Guaranty; or
(d) the extension of the time for payment of any principal of,
premium, if any, or interest on any Bond or under this Guaranty or the
extension or renewal of the time for performance of any other obligations,
covenants, or agreements under or arising out of the Indenture, the
Agreement, or this Guaranty, whether or not with notice to the Guarantor; or
(e) the modification or amendment (whether material or
otherwise) of any obligation, covenant, or agreement set forth in the
Indenture or the Agreement; or
(f) any failure, omission, delay, or lack on the part of the Issuer
or the Trustee to enforce, assert, or exercise any right, power, or remedy
conferred on the Issuer or the Trustee in this Guaranty, the Indenture, or the
Agreement, or any other act or acts on the part of the Issuer, the Trustee or
any of the owners from time to time of the Bonds; or
(g) the voluntary or involuntary liquidation, dissolution, sale, or
other disposition of all or substantially all the assets, marshalling of assets
and liabilities, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition with creditors,
or re-adjustment of, or other similar proceedings affecting the Company, the
Guarantor, or the Issuer or any of the assets of either of them or any
allegation or contest of the validity of this Guaranty, the Indenture, or the
Agreement in any such proceeding; or
(h) the release or discharge of the Company or the Issuer from
the performance or observance of any obligation, covenant, or agreement
contained in the Agreement or the Indenture by operation of law; or
(i) to the extent permitted by law, the release or discharge of
the Guarantor from the performance or observance of any obligation,
covenant, or agreement contained in this Guaranty by operation of law; or
(j) the default or failure of the Guarantor fully to perform any
of its obligations set forth in this Guaranty or in the Agreement; or
(k) the invalidity of the Agreement, the Indenture, or the
Bonds.
Section 2.3. No set-off, counterclaim, reduction, or diminution
of an obligation, or any defense of any kind or nature which the Company has
or may have against the Issuer or the Trustee or which the Issuer may have
against the Trustee, shall be available hereunder to the Guarantor against the
Trustee.
Section 2.4. Upon the occurrence of any Event of Default, the
Trustee, in its sole discretion, shall have the right to proceed first directly
against the Guarantor under this Guaranty without proceeding against or
exhausting any other remedies which it may have against the Issuer,
the Guarantor, or any other person, firm, or corporation and without resorting
to any other security held by the Issuer or the Trustee.
Before taking any action hereunder, the Trustee may require that a
satisfactory indemnity bond be furnished for the reimbursement of all
expenses and to protect against all liability, except liability which is
adjudicated to have resulted from its negligence or willful default by reason
of any action so taken.
Section 2.5. The Guarantor hereby expressly waives notice from
the Trustee or the Owners of the Bonds of their acceptance and reliance on
this Guaranty. To the extent permitted by applicable law, the Guarantor
agrees to pay all costs, expenses, and fees, including all reasonable
attorneys' fees, which may be incurred by the Trustee in enforcing or
attempting to enforce this Guaranty following any default on the part of the
Guarantor hereunder, whether the same shall be enforced by suit or otherwise.
Section 2.6. This Guaranty is entered into by the Guarantor
with the Trustee for the benefit of the Owners of the Bonds, all of whom shall
be entitled to enforce performance and observance of this Guaranty to the
same extent provided for the enforcement of remedies under the Indenture.
Section 2.7. So long as the Bonds or any portion thereof shall
be outstanding, the Guarantor will maintain its corporate existence, will
continue to be a corporation duly qualified to conduct business in each state
in which failure so to do would be materially adverse to the Guarantor, will
not dissolve or otherwise dispose of all or substantially all of its assets,
and will not consolidate with or merge into another legal entity or permit one
or more other legal entities (other than one or more subsidiaries of the
Guarantor) to consolidate with or merge into it, or sell or otherwise transfer
to another legal entity all or substantially all its assets as an entirety and
dissolve, unless (a) in the case of any merger or consolidation, the Guarantor
is the surviving corporation, or (b)(i) the surviving, resulting, or transferee
legal entity is organized and existing under the laws of the United States, a
state thereof or the District of Columbia, and (if not the Guarantor) assumes
in writing all the obligations of the Guarantor under this Guaranty, and (ii)
no event which constitutes, or which with the giving of notice or the lapse of
time or both would constitute an Event of Default shall have occurred and be
continuing immediately after such merger, consolidation, or transfer.
Section 2.8. The Guarantor agrees to have an annual audit
made by its regular independent certified public accountants and to furnish
the Trustee (within 90 days after receipt by the Guarantor) with a balance
sheet and statement of income and surplus showing the financial
condition of the Guarantor and its consolidated subsidiaries, if any, at the
close of each fiscal year and the results of operations of the Guarantor and
its consolidated subsidiaries, if any, for each fiscal year, accompanied by
the opinion of said accountants. The Trustee will hold such reports solely for
the purpose of making them available at its corporate trust office for
examination by the Bond Owners, and is not required to notify the Bond
Owners of the contents of any such report. The Guarantor may fulfill its
obligation under this Section by furnishing the Trustee a copy of its annual
report to shareholders after such report has been made available to its
shareholders, if such report shall contain the above described financial
statements. A copy of each such report, as well as each of its quarterly
reports to shareholders, will be filed with the Issuer.
Section 2.9. So long as a Letter of Credit is in effect, the
Guarantor, shall not, directly or indirectly, purchase any Bonds with any
funds that do not constitute Available Moneys, except as required by Section
2.1 of this Guaranty.
Article III
Amendments; Release
Section 3.1. The Guarantor and the Trustee, at any time and
from time to time, may enter into one or more instruments supplemental
hereto, under the conditions set forth in Article X of the Indenture. This
Guaranty may be released under the conditions set forth in Section 9.05
of the Indenture.
Article IV
The Trustee
Section 4.1. The Trustee agrees to perform its duties under this
Guaranty, but only upon and subject to the terms and conditions set forth in
Article VII of the Indenture.
Article V
Miscellaneous
Section 5.1. The obligations of the Guarantor hereunder shall
arise absolutely and unconditionally when the Bonds shall have been issued,
sold, and delivered by the Issuer.
Section 5.2. This Guaranty constitutes the entire agreement,
and supersedes all prior agreements and understandings, both written and
oral, between the parties with respect to the subject matter hereof and may be
executed simultaneously in several counterparts, each of which shall be
deemed an original, and all of which together shall constitute one and the
same instrument.
Section 5.3. The invalidity or unenforceability of any one or
more phrases, sentences, clauses, or Sections in this Guaranty shall not affect
the validity or enforceability of the remaining portions of this Guaranty, or
any part thereof.
Section 5.4. Any consent, approval, direction, or other
instrument required by this Guaranty to be signed and executed by the Bond
Owners may be in any number of concurrent writings of similar tenor and
may be signed or executed by such Bond Owners in person or by agent
appointed in writing. Proof of the execution of any such consent, approval,
direction, or other instrument or of the writing appointing any such agent and
of the ownership of Bonds, if made pursuant to the Indenture, shall be
sufficient for any of the purposes of this Guaranty, and shall be
conclusive in favor of the Trustee with regard to any action taken under such
request or other instrument.
Section 5.5. This Guaranty shall be governed exclusively by the
laws of Texas.
Section 5.6. With the exception of rights herein expressly
conferred, nothing herein expressed or mentioned in or to be implied from
this Guaranty is intended or shall be construed to give to any person other
than the parties hereto and the Owners of the Bonds any legal or equitable
right, remedy or claim under or in respect of this Guaranty. This Guaranty
and all of the covenants, conditions, and provisions hereof are intended to be
and are for the sole and exclusive benefit of the parties hereto and the owners
of the Bonds as herein provided and shall inure to the benefit of and
bind their respective successors and assigns.
In Witness Whereof, the parties hereto have caused this Guaranty to
be executed in their respective corporate names by their respective officers,
thereunto duly authorized as of the date first above written.
ASTEC INDUSTRIES, INC.
By: /s/ Albert E. Guth
Authorized Officer
EXHIBIT 10.86
Astec Guaranty
For value received and in consideration of advances made
or to be made, or credit given or to be given, or other financial
accommodation afforded or to be afforded to Trencor Jetco, Inc., a Texas
corporation (hereinafter designated as " Borrower", by The First National
Bank of Chicago (hereinafter called the "Bank"), from time to time, the
undersigned, Astec Industries, Inc. (hereinafter designated as "Astec"),
hereby guarantees the full and prompt payment to the Bank at
maturity and at all times thereafter of any and all indebtedness, obligations
and liabilities of the Borrower to the Bank (including liabilities of
partnerships created or arising while the Borrower may have been or
may be a member thereof), howsoever evidenced, whether now existing or
hereafter created or arising, whether direct or indirect, absolute or
contingent,
or joint or several, and howsoever owned, held or acquired, whether through
discount, overdraft, purchase, direct loan or as collateral, or otherwise,
including, without limitation, any of the same arising under that certain
Letter of Credit Agreement between the Bank and the Borrower dated
April 1, 1994 (the "Letter of Credit Agreement") (hereinafter
all such indebtedness, obligations and liabilities being collectively referred
to as the "Indebtedness"); and Astec further agrees to pay all expenses, legal
and/or otherwise (including court costs and reasonable attorneys' fees), paid
or incurred by the Bank in endeavoring to collect the Indebtedness, or any
part thereof, and in protecting, defending or enforcing this guaranty in any
litigation, bankruptcy or insolvency proceedings or otherwise.
Astec further represents, warrants, acknowledges and agrees with the Bank
that:
1. This guaranty is a continuing, absolute and unconditional
guaranty, and shall remain in full force and effect until written notice of its
discontinuance shall be actually received by the Bank, and
also until any and all of the Indebtedness created, existing or committed to
before receipt of such notice shall be fully paid. The death or dissolution of
Astec shall not terminate this guaranty until notice of such
death or dissolution shall have been actually received by the Bank, nor until
all of the Indebtedness created or existing before receipt of such notice shall
be fully paid.
2. In case of the death, incompetency, dissolution, liquidation
or insolvency (howsoever evidenced) of, or the institution of bankruptcy or
receivership proceedings against the Borrower or Astec, all of the
Indebtedness then existing shall, at the option of the Bank, immediately
become due or accrued and payable from Astec. All dividends or other
payments received from the Borrower or on account of the
Indebtedness from whatsoever source, shall be taken and applied as payment
in gross, and this guaranty shall apply to and secure any ultimate balance that
shall remain owing to the Bank.
3. The liability hereunder shall in no wise be affected or
impaired by (and the Bank is hereby authorized to make from time to time,
without notice to anyone), any sale, pledge, surrender, compromise,
settlement, release, renewal, extension, indulgence, alteration, substitution,
exchange, change in, modification or other disposition of any of the
Indebtedness, either express or implied, or of any contract or contracts
evidencing any of the Indebtedness, or of any security or collateral therefor.
The liability hereunder shall in no wise be affected or impaired by any
acceptance by the Bank of any security for or other guarantors upon any of the
Indebtedness, or by any failure, neglect or omission on the part of
the Bank to realize upon or protect any of the Indebtedness, or any collateral
or security therefor, or to exercise any lien upon or right of appropriation of
any moneys, credits or property of the Borrower, possessed by the Bank,
toward the liquidation of the Indebtedness, or by any application of payments
or credits thereon. The Bank shall have the exclusive right to determine how,
when and what application of payments and credits, if any, shall be made on
the Indebtedness, or any part thereof. In order to hold
Astec liable hereunder, there shall be no obligation on the part of the Bank,
at any time, to resort for payment to the Borrower or to any other guaranty, or
to any other persons or corporations, their properties or estates, or resort to
any collateral, security, property, liens or other rights or remedies
whatsoever, and the Bank shall have the right to enforce this guaranty
irrespective of whether
or not other proceedings or steps seeking resort to or realization upon or from
any of the foregoing are pending.
4. All diligence in collection or protection, and all
presentment, demand, protest and/or notice, as to any and everyone, whether
or not the Borrower or Astec or others, of dishonor and of default
and of non-payment and of the creation and existence of any and all of the
Indebtedness, and of any security and collateral therefor, and of the
acceptance of this guaranty, and of any and all extensions of
credit and indulgence hereunder, are waived. No act of commission or
omission of any kind, or at any time, upon the part of the Bank in respect to
any matter whatsoever, shall in any way affect or impair this
guaranty.
5. Astec will not exercise or enforce any right of exoneration,
contribution, reimbursement, recourse or subrogation available to Astec
against any person liable for payment of the Indebtedness, or as
to any security therefor, unless and until the full amount owing to the Bank
on the Indebtedness has been paid and the payment by Astec of any amount
pursuant to this guaranty shall not in any wise entitle Astec
to any right, title or interest (whether by way of subrogation or otherwise) in
and to any of the Indebtedness or any proceeds thereof or any security
therefor
unless and until the full amount owing to the Bank on the Indebtedness has
been paid.
6. The Bank may, without any notice whatsoever to any one,
sell, assign or transfer all of the Indebtedness, or any part thereof, or grant
participations therein, and in that event each and every immediate and
successive assignee, transferee, or holder of or participant in all or any part
of the Indebtedness, shall have the right to enforce this guaranty, by suit or
otherwise, for the benefit of such assignee, transferee, holder or participant,
as fully as if such assignee, transferee, holder or participant
were herein by name specifically given such rights, powers and benefits; but
the Bank shall have an unimpaired right to enforce this guaranty for the
benefit of the Bank or any such participant, as to so much of the Indebtedness
that it has not sold, assigned or transferred.
7. Astec waives any and all defenses, claims and discharges of
the Borrower, or any other obligor, pertaining to the Indebtedness, except the
defense of discharge by payment in full. Without limiting the generality of
the foregoing, Astec will not assert, plead or enforce against the Bank any
defense of waiver, release, discharge in bankruptcy, statute of limitations,
res judicata, statute of frauds, anti-deficiency statute, fraud, incapacity,
minority, usury, illegality or unenforceability which may be available to the
Borrower or any other person liable in respect of any of the Indebtedness, or
any setoff available against the Bank to the Borrower or any such other person,
whether or not on account of a related transaction. Astec agrees that it shall
be and
remain liable for any deficiency remaining after foreclosure of any mortgage
or security interest securing the Indebtedness, whether or not the liability of
the Borrower or any other obligor for such deficiency is discharged pursuant
to statute or judicial decision.
8. If any payment applied by the Bank to the Indebtedness is
thereafter set aside, recovered, rescinded or required to be returned for any
reason (including, without limitation, the bankruptcy, insolvency or
reorganization of the Borrower or any other obligor), the Indebtedness to
which such payment was applied shall for the purposes of this guaranty be
deemed to have continued in existence, notwithstanding such application, and
this guaranty shall be enforceable as to such of the Indebtedness as
fully as if such application had never been made.
9. The liability of Astec under this guaranty is in addition to
and shall be cumulative with all other liabilities of Astec to the Bank as
guarantor of the Indebtedness, without any limitation as to
amount, unless the instrument or agreement evidencing or creating such other
liability specifically provides to the contrary.
10. Each of Astec and its Subsidiaries (as defined in the Letter
of Credit Agreement) is duly organized and existing and in good standing
under the laws of its jurisdiction of incorporation and has all
necessary corporate power to carry on its present business; Astec has full
power, right and authority to enter into this guaranty to perform each and all
of the matters and things herein provided for; and this guaranty does not, nor
will the performance or observance by Astec of any of the matters and things
herein provided for, contravene any provision of law or of any order,
judgment, decree or regulation, or any charter or by-law provision of, or
applicable to, Astec, its Subsidiaries or their properties.
11. The consolidated balance sheet of Astec and its Subsidiaries
as of December 31, 1993, and the related income statement and statement of
changes in financial position and statement of changes in stockholders' equity
of Astec and its Subsidiaries for the fiscal year then ended, and the
accompanying footnotes, together with the opinion thereon of Ernst & Young,
independent certified public accountants, and the interim balance sheet of
Astec and its Subsidiaries as at March, 31, 1994, and the related income
statement and statement of changes in financial position and statement of
changes in stockholders' equity
of Astec for the three-month period then ended, are complete and correct and
fairly present the financial condition of Astec and its Subsidiaries as at such
dates and the results of the operations of Astec and its Subsidiaries for the
periods covered by such statements, all in accordance with generally accepted
accounting principles consistently applied (subject to year-end adjustments in
the case of interim financial statements). There are no liabilities of Astec or
its Subsidiaries, fixed or contingent, which are material but not reflected in
the financial statements or in the notes thereto, other than liabilities
arising in the ordinary course of business since December 31, 1993. No
information, exhibit or report furnished by Astec to the Bank in connection with
the negotiation of this guaranty or the Letter of Credit Agreement contained
any material misstatement of fact or omitted to state a material fact or any
fact necessary to make the statements contained therein not materially
misleading.
Since December 31, 1993 there has been no material adverse change in the
condition (financial or otherwise), business, operations or prospects of Astec
and its Subsidiaries taken as a whole.
12. Except as described in the preliminary offering
memorandum dated April 15, 1994 by Grapevine Industrial Development
Corporation, the Borrower and Astec relating to the Bonds ("Bonds"
to have the same meaning herein as contained in the Letter of Credit
Agreement), there is no action, suit or proceeding by or against, or, to the
actual knowledge of Astec, otherwise affecting, Astec or its
Subsidiaries before any court, governmental agency or arbitrator, which (i) is
pending and has, in any one case or in conjunction with other such actions,
suits or proceedings, a reasonable likelihood of having a material adverse
effect on the financial condition of Astec, or (ii) is pending, or to the
knowledge of Astec is threatened, and has, in any one case or in conjunction
with other such actions, suits or proceedings, a reasonable likelihood of
having a material adverse effect on the financial condition, operations,
properties or business of Astec, or its Subsidiaries taken as a whole.
13. Neither Astec nor any of its Subsidiaries is engaged in the
business of extending credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System) and no part of the proceeds of any drawing under the
Letter of Credit will be used to purchase or carry any margin stock or to
extend credit to others for such a purpose.
14. The United States income tax returns of Astec and its
Subsidiaries for all fiscal years ended on or prior to December 31, 1992 have
been filed with the Internal Revenue Service; there are no pending objections
to or controversies in respect of the United States income tax returns of Astec
and its Subsidiaries which, if adversely determined, would result in a material
adverse change in the financial condition of Astec and its Subsidiaries, taken
as a whole.
15. Neither the execution and delivery of this guaranty, the
consummation of the transactions contemplated hereby, nor the fulfillment of
or compliance with the terms and conditions hereof conflicts with or results
in a breach of the terms, conditions or provisions of any material restriction
or any material agreement or instrument to which Astec or any of its
Subsidiaries is now a party or by which Astec or any of its Subsidiaries is
bound, or constitutes a default under any of the foregoing, or
results in the creation or imposition of any lien, charge or encumbrance
whatsoever upon any of the material property or assets of the Company under
the terms of any instrument or agreement
16. No Event of Default or Potential Default (as defined in the
Letter of Credit Agreement) has occurred and is continuing.
17. Schedule I hereto contains an accurate list of all of the
presently existing Subsidiaries of Astec, setting forth their respective
jurisdictions of incorporation. All of their respective capital stock is
owned by Astec. All of the issued and outstanding shares of capital stock of
such Subsidiaries have been duly authorized and issued and are fully paid and
non-assessable.
18. The Unfunded Liabilities of all Single Employer Plans do
not in the aggregate exceed $3,081,177. Each Plan complies in all material
respects with all applicable requirements of law and
regulations, no Reportable Event has occurred with respect to any Plan,
neither Astec nor any other members of the Controlled Group has withdrawn
from any Plan or initiated steps to do so, and no steps
have been taken to reorganize or terminate any Plan. As used in this
guaranty, the following terms are defined:
Code - means the Internal Revenue Code of 1986, as amended, and the
regulations, rulings and proclamations promulgated and proposed thereunder
or under the predecessor Code.
Controlled Group - means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common
control which, together with Astec or any of its
Subsidiaries, are treated as a single employer under Section 414 of the Code.
ERISA - means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
Plan - means an employee Pension Benefit Plan which is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of
the Code as to which Astec or any member of the Controlled Group may have
any liability.
Reportable Event - means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the Pension Benefit Guaranty
Corporation by regulation waived the requirement of Section 4043(a) of
ERISA that it be notified within 30 days of the occurrence of such event,
provided, however, that a failure to meet the minimum funding standard of
Section 412 of the Code and of Section 302 of ERISA shall be a Reportable
Event regardless of the issuance of any such waiver of the notice requirement
in accordance with either Section 4043(a) of ERISA or Section 412 (d) of the
Code.
Single Employer Plan - means a Plan maintained by Astec or any member of
the Controlled Group for employees of Astec or any member of the Controlled
Group.
Unfunded Liabilities - means the amount (if any) by which the present value
of all vested nonforfeitable benefits under all Single Employer Plans exceeds
the fair market value of all such Plan assets allocable to such benefits, all
determined as of the then most recent valuation date for such Plans.
19. Astec and its Subsidiaries have complied with all applicable
statutes, rules, regulations, orders and restrictions of any domestic or
foreign
government or any instrumentality or agency thereof, having jurisdiction over
the conduct of their respective businesses or the ownership of their respective
businesses or the ownership of their respective Property (as defined in the
Letter of Credit Agreement). Neither Astec nor any Subsidiary has received
any notice to the effect that its operations are not in material compliance
with any of the requirements of applicable federal, state and local
environmental, health and safety statutes and regulations or the subject of any
federal or state
investigation evaluating whether any remedial action is needed to respond to
a release of any toxic or hazardous waste or substance
into the environment.
20. Neither Astec nor any of its Subsidiaries will amend,
modify, terminate or grant, or permit the amendment, modification,
termination or grant of, any waiver under (or consent to, or permit
or suffer to occur any action or omission which results in, or is equivalent
to, an amendment, modification, or grant of a waiver under) the Bond
Documents (as defined in the Letter of Credit
Agreement) without the prior written consent of the Bank.
21. Any invalidity or unenforceability of any provision or
application of this guaranty shall not affect other lawful provisions and
applications hereof, and to this end the provisions of this guaranty
are declared to be severable. This guaranty shall be construed according to
the law of the State of Illinois, in which State it shall be performed by Astec
and may not be waived, amended, released or otherwise
changed except by a writing signed by the Bank.
22. This guaranty and every part thereof shall be effective upon
delivery to the Bank, without further act, condition or acceptance by the
Bank, shall be binding upon Astec, and upon the heirs, legal representatives,
successors and assigns of Astec, and shall inure to the benefit of the Bank,
its successors, legal representatives and assigns. Astec waives notice of the
Bank's acceptance hereof.
Signed and Delivered by the undersigned, at Chicago, Illinois, this 29th day
of April, 1994. The undersigned acknowledges receipt of a completed copy of
this guaranty as of the time of execution.
Astec Industries, Inc.
By: /s/ Albert E. Guth
Its Senior Vice President
Important Notice To Guarantors
You are being asked to guarantee this debt, as well as all future debts of the
borrower entered into with the bank. Think carefully before you do. If the
borrower doesn't pay the debt, you will have to. Be sure you
can afford to pay if you have to, and that you want to accept this
responsibility.
You may have to pay up to the full amount of the debt if the borrower does
not pay. You may also have to pay late fees or collection costs, which
increase this amount.
The bank can collect this debt from you without first trying to collect from
the borrower. The bank can use the same collection methods against you that
can be used against the borrower, such as suing you, garnishing your wages,
etc.
If this debt is ever in default, that fact may become part of your credit
record. This notice is not the contract that makes you liable for the debt.
Schedule I
Astec Subsidiaries
The subsidiaries of Astec Industries, Inc. are:
1. Trencor Jetco, Inc., a Texas corporation.
2. Telsmith, Inc., a Delaware corporation located in Milwaukee and
Mequon, Wisconsin.
3. Heatec, Inc., a Tennessee corporation located in Chattanooga,
Tennessee.
4. Roadtec, Inc., a Tennessee corporation located in Chattanooga,
Tennessee.
5. Astec Transportation, Inc. a Tennessee corporation.
6. Astec Corporation, Inc., a Tennessee corporation
7. Astec Export, Inc., a Barbados corporation.
EXHIBIT 10.87
CREDIT AGREEMENT
This Credit Agreement (this "Agreement") dated as of July 20,
1994, is between Astec Industries, Inc., a Tennessee corporation (the
"Borrower"), and The First National Bank of Chicago, a national
banking association organized and existing under the laws of the United
States of America (the "Lender").
RECITALS
A. The Borrower has requested that the Lender extend
credit to the Borrower in order to enable the Borrower to borrow, on and
after the date hereof, a principal amount not in excess of FIFTEEN
MILLION AND NO/100 UNITED STATES DOLLARS (U.S.
$15,000,000) at any time outstanding (the "Loan") for the purpose of
providing for the working capital needs of the Borrower and its
Subsidiaries (as hereinafter defined) from time to time on a revolving
credit basis.
B. The Lender is willing to make the Loan to the
Borrower, and the Borrower is willing to borrow from the Lender,
subject to the terms and conditions herein set forth.
AGREEMENT
NOW, THEREFORE, for and in consideration of the Recitals
and the mutual covenants and agreements herein set forth, and other
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by
which the Borrower or any of its Subsidiaries (i) acquires any going
business or all or substantially all of the assets of any firm, corporation
or division thereof, whether through purchase of assets, merger or
otherwise or (ii) directly or indirectly acquires (in one transaction or as
the most recent transaction in a series of transactions) at least a majority
(in number of votes) of the securities of a corporation which have
ordinary voting power for the election of directors (other than securities
having such power only by reason of the happening of a contingency) or
a majority (by percentage or voting power) of the outstanding
partnership interests of a partnership.
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control with such
Person. A Person shall be deemed to control another Person if the
controlling Person owns ten percent (10%) or more of any class of
voting securities (or other ownership interests) of the controlled Person,
or possesses, directly or indirectly, the power to direct or cause the
direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise, or is a
director or executive officer of the controlled Person.
"Agreement" means this Credit Agreement, as it may be
amended, modified, supplemented or restated, and in effect from time to
time.
"Agreement Accounting Principles" means generally accepted
accounting principles as in effect from time to time, applied on a
consistent basis and applied in a manner consistent with that used in
preparing the financial statements referred to in Section 5.4 below.
"Arrangement Fee" is defined in Section 2.4 below.
"Article" means an article of this Agreement unless another
document is specifically referenced.
"Authorized Officer" means any of the President, Senior Vice
President, or Corporate Controller of the Borrower, acting singly, or
other employee of Borrower designated in writing to Lender.
"Bond Transactions" means (i) the issuance of Industrial
Development Revenue Bonds in the approximate amount of $8,000,000
to finance the construction and acquisition of a facility and equipment to
be used in the operation of Trencor, Inc.'s business and (ii) the issuance
of Variable Rate Demand Industrial Revenue Bonds Series 1994 in the
approximate value of $6,000,000 to finance the expansion of Telsmith,
Inc.'s Mequon, Wisconsin facility and the acquisition of equipment to be
used in the operation of Telsmith, Inc.'s business.
"Borrower" means Astec Industries, Inc., a Tennessee
corporation, and its successors and assigns.
"Borrowing Date" means a date on which a Loan is made
hereunder.
"Borrowing Notice" is defined in Section 2.7 below.
"Business Day" means (i) with respect to any borrowing,
payment or rate selection of Eurodollar Loans, a day (other than a
Saturday or Sunday) on which banks generally are open in Chicago,
Illinois and New York, New York for the conduct of substantially all of
their commercial lending activities and on which dealings in United
States dollars are carried on in the London interbank market and (ii) for
all other purposes, a day (other than a Saturday or Sunday) on which
banks generally are open in Chicago, Illinois.
"Capitalized Lease" of a Person means any lease of Property by
such Person as lessee which would be capitalized on a balance sheet of
such Person prepared in accordance with Agreement Accounting
Principles.
"Capitalized Lease Obligations" of a Person means the amount
of the obligations of such Person under Capitalized Leases which would
be shown as a liability on a balance sheet of such Person prepared in
accordance with Agreement Accounting Principles.
"CERCLA" means the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended.
"Change in Control" means the acquisition by any Person, or
two or more Persons acting in concert, of beneficial ownership (within
the meaning of Rule 13d-3 of the Securities and Exchange Commission
under the Securities Exchange Act of 1934) of twenty percent (20%) or
more of the outstanding shares of voting stock of the Borrower.
"Code" means the Internal Revenue Code of 1986, as amended,
reformed or otherwise modified from time to time.
"Commitment" means the obligation of the Lender hereunder to
make Loans and issue Letters of Credit in a maximum aggregate
principal and stated amount, as applicable, not exceeding $15,000,000,
as such amount may be modified or reduced from time to time pursuant
to the terms hereof.
"Commitment Fee" is defined in Section 2.4 below.
"Condemnation" is defined in Section 7.8 below.
"Consolidated Current Assets" means the consolidated current
assets of the Borrower and its Subsidiaries determined in accordance
with Agreement Accounting Principles.
"Consolidated Current Liabilities" means the consolidated
current liabilities of the Borrower and its Subsidiaries determined in
accordance with Agreement Accounting Principles.
"Consolidated Fixed Charges" means, for any period, without
duplication, the sum of the amounts for such period of (i) consolidated
interest expense, amortization of debt discount and expense on
Indebtedness of the Borrower and its Subsidiaries, and (ii) payments of
principal on Indebtedness (excluding Capitalized Lease Obligations), all
as determined on a consolidated basis for the Borrower and its
Subsidiaries in accordance with Agreement Accounting Principles,
provided that Consolidated Fixed Charges shall not include the PMLIC
Indebtedness.
"Consolidated Funded Debt" means the consolidated
Indebtedness of the Borrower and its Subsidiaries which by its terms is
due more than one year from the date of determination or which may be
extended or renewed at the option of the Borrower or any Subsidiary to
a date more than one year from such date, provided, that Consolidated
Funded Debt shall not include Contingent Obligations of the Borrower
incurred in the ordinary course of business with respect to accounts or
notes receivables sold by the Borrower or any Subsidiary.
"Consolidated Income Available for Fixed Charges" at any date
means earnings (exclusive of any non-recurring gains or losses) before
provision for taxes for the period consisting of the immediately
preceding four fiscal quarters (including the quarter in which the
determination date falls), all determined on a consolidated basis for the
Borrower and its Subsidiaries in accordance with Agreement Accounting
Principals.
"Consolidated Net Worth" means at any date the consolidated
stockholders' equity of the Borrower and its Subsidiaries determined in
accordance with Agreement Accounting Principles.
"Consolidated Tangible Net Worth" means at any date the
consolidated stockholders' equity of the Borrower and its Subsidiaries
determined in accordance with Agreement Accounting Principles, less
their consolidated Intangible Assets, all determined as of such date. For
purposes of this definition, "Intangible Assets" means the amount (to the
extent reflected in determining such consolidated stockholders' equity) of
all unamortized debt discount and expense, unamortized deferred
charges, goodwill, patents, trademarks, service marks, trade names,
copyrights, organizational or developmental expenses and other
intangible items, all determined in accordance with Agreement
Accounting Principles.
"Contingent Obligation" of a Person means any agreement,
undertaking or arrangement by which such Person assumes, guarantees,
endorses, contingently agrees to purchase or provide funds for the
payment of, or otherwise becomes or is contingently liable upon, the
obligation or liability of any other Person, or agrees to maintain the net
worth or working capital or other financial condition of any other
Person, or otherwise assures any creditor of such other Person against
loss, including without limitation, any comfort letter, operating
agreement, take-or-pay contract or application for a Letter of Credit.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated)
under common control which, together with the Borrower or any of its
Subsidiaries, are treated as a single employer under Section 414 of the
Code.
"Conversion/Continuation Notice" is defined in Section 2.8
below.
"Corporate Base Rate" means a rate per annum equal to the
corporate base rate of interest announced by the Lender from time to
time, changing when and as said corporate base rate changes.
"Cumulative Consolidated Net Income" means, for any period,
the cumulative net income of the Borrower and the Subsidiaries
determined on a consolidated basis in accordance with Agreement
Accounting Principles.
"Default" means an event described in Article VII below.
"Environmental Laws" means all applicable federal, state or
local statutes, laws, ordinances, codes, rules, regulations, permits and
guidelines (including without limitation consent decrees and
administrative orders) now existing or hereafter enacted or amended,
relating to public health and safety and protection of the environment.
"ERISA" means the Employee Retirement Income Security Act
of 1974, as amended from time to time, and any rule or regulation issued
thereunder.
"Eurodollar Base Rate" means, with respect to a Eurodollar
Loan for the relevant Eurodollar Interest Period, the rate determined by
the Lender to be the rate at which deposits in U.S. dollars are offered by
the Lender to first-class banks in the London interbank market at
approximately 11:00 a.m. (London time) two (2) Business Days prior to
the first day of such Eurodollar Interest Period, in the approximate
amount of the Lender's relevant Eurodollar Loan and having a maturity
approximately equal to such Eurodollar Interest Period.
"Eurodollar Interest Period" means, with respect to a Eurodollar
Loan, a period of one, two or three months commencing on a Business
Day selected by the Borrower pursuant to this Agreement. Such
Eurodollar Interest Period shall end on (but exclude) the day which
corresponds numerically to such date one, two or three months
thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second or third succeeding month, such
Eurodollar Interest Period shall end on the last Business Day of such
next, second or third succeeding month. If a Eurodollar Interest Period
would otherwise end on a day which is not a Business Day, such
Eurodollar Interest Period shall end on the next succeeding Business
Day, provided, however, that if said next succeeding Business Day falls
in a new calendar month, such Eurodollar Interest Period shall end on
the immediately preceding Business Day.
"Eurodollar Loan" means a Loan which bears interest at a
Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Loan for
the relevant Eurodollar Interest Period, the sum of (i) the quotient of (a)
the Eurodollar Base Rate applicable to such Eurodollar Interest Period,
divided by (b) one minus the Reserve Requirement (expressed as a
decimal) applicable to such Eurodollar Interest Period, plus (ii) 1.0%
per annum. The Eurodollar Rate shall be rounded to the next higher
multiple of 1/16 of 1% if the rate is not such a multiple.
"Existing Revolving Credit Facility" means that certain existing
revolving credit facility extended by the Lender to the Borrower
pursuant to that certain Amended and Restated Credit Agreement dated
as of April 27, 1989 executed by the Borrower and the Lender, as
amended from time to time, pursuant to which in part the Lender agreed
to make available to the Borrower revolving credit loans and letters of
credit in the maximum aggregate principal amount of $15,000,000.
"Extension Request" is defined in Section 2.16 below.
"Facility Termination Date" means June 30, 1997, any later date
as may be specified by the Lender as the Facility Termination Date in
accordance with Section 2.16 below, or any earlier date as provided in
Section 3.6 below.
"Financial Undertaking" of a Person means (i) any repurchase
obligation or liability of such Person or any of its Subsidiaries with
respect to accounts or notes receivable sold by such Person or any of its
Subsidiaries, (ii) any sale and leaseback transactions which do not create
a liability on the consolidated balance sheet of such Person and its
Subsidiaries, (iii) any other transaction which is the functional
equivalent of or takes the place of borrowing but which does not
constitute a liability on the consolidated balance sheets of such Person
and its Subsidiaries, or (iv) any agreements, devices or arrangements
designed to protect at least one of the parties thereto from the
fluctuations of interest rates, exchange rates or forward rates applicable
to such party's assets, liabilities or exchange transactions, including
without limitation, interest rate exchange agreements, forward currency
exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options.
"Floating Rate" means, for any day, a rate per annum equal to
the Corporate Base Rate for such day, changing when and as the
Corporate Base Rate changes, minus .25% per annum.
"Floating Rate Loan" means a Loan which bears interest at the
Floating Rate.
"Guarantor" means Heatec Inc., a Tennessee corporation,
Roadtec, Inc., a Tennessee corporation, Trencor, Inc., a Texas
corporation (formerly known as Trencor Jetco, Inc.), Telsmith, Inc., a
Delaware corporation, Astec Transportation, Inc., a Tennessee
corporation, Astec Corporation, a Tennessee corporation, and their
respective successors and assigns.
"Guaranty" means that certain Guaranty of even date herewith
executed by each of the Guarantors in favor of the Lender, as it may be
amended or modified and in effect from time to time.
"Hazardous Materials" means (i) any chemical, material or
substance defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," "extremely
hazardous waste," "restricted hazardous waste," "toxic pollutants,"
"contaminants," "pollutants," "toxic substances" or words of similar
import under any applicable local, state or federal law or under the
regulations adopted or publications promulgated pursuant thereto,
including Environmental Laws, (ii) any oil, petroleum or petroleum
derived substances, any drilling fluids, produced waters or other wastes
associated with the exploration, development or production of crude oil,
any flammable substances or explosives, any radioactive materials, any
hazardous wastes or substances, any toxic wastes or substances or any
other materials or pollutants which (a) pose a hazard to any Property of
the Borrower or any of its Subsidiaries or to Persons on or about such
Properties, or (b) cause such properties to be in violation of any
Environmental laws, (iii) asbestos in any form which is or could become
friable, radon gas, urea formaldehyde foam insulation, or
polychlorinated biphenyls, and (iv) any other chemical, material or
substance, exposure to which is prohibited, limited or regulated by any
governmental authority.
"Indebtedness" of a Person means such Person's (i) obligations
for borrowed money, (ii) obligations representing the deferred purchase
price of Property or services (other than accounts payable arising in the
ordinary course of such Person's business payable on terms customary
in the trade), (iii) obligations, whether or not assumed, secured by Liens
or payable out of the proceeds or production from Property now or
hereafter owned or acquired by such Person, (iv) obligations which are
evidenced by notes, acceptances, or other instruments, (v) Capitalized
Lease Obligations, (vi) net liabilities under interest rate swap, exchange,
cap or similar agreements, (vii) Contingent Obligations, (viii)
obligations for which such Person is obligated pursuant to or in
connection with a Letter of Credit or corresponding Reimbursement
Agreement, (ix) obligations of such Person upon which interest charges
are contractually specified, (x) obligations of such Person under
conditional sale or other title retention agreement relating to Property
purchased by such Person, (xi) Financial Undertakings and (xii) Rate
Hedging Obligations.
"Investment" of a Person means any loan, advance, extension of
credit (other than accounts receivable arising in the ordinary course of
business on terms customary in the trade), deposit account or
contribution of capital by such Person to any other Person or any
investment in, or purchase or other acquisition of, the stock, partnership
interests, notes, debentures or other securities of any other Person made
by such Person.
"Lender" means The First National Bank of Chicago and its
successors and assigns.
"Lending Installation" means any office, branch, subsidiary or
affiliate of the Lender.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon
which such Person is an account party or for which such Person is in
any way liable, including without limitation, any commercial or standby
letter of credit issued by the Lender for the account of the Borrower in
accordance with Section 2.17 below.
"Letter of Credit Obligations" shall mean, at any particular
time, the sum of (i) all reimbursement obligations of the Borrower to the
Lender pursuant to the Letters of Credit and the Reimbursement
Agreements and (ii) the aggregate maximum amount then available to be
drawn under the then outstanding Letters of Credit issued by the Lender
to the Borrower.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or
preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including without
limitation, the interest of a vendor or lessor under any conditional sale,
Capitalized Lease or other title retention agreement).
"Loan" means the Loan specified in Recital A above, including
without limitation, all Letters of Credit issued by the Lender to the
Borrower hereunder (and all amounts owing in connection therewith)
and any other borrowing hereunder.
"Loan Account" means bank account number 55-06875 with the
Lender in the name of Astec Industries, Inc. Corporate Account, or such
other bank account with the Lender as shall be designated by the
Borrower and the Lender from time to time.
"Loan Documents" means this Agreement, the Note, each Letter
of Credit issued, and Reimbursement Agreement executed pursuant to
Section 2.17 below, the Guaranty, and each of the documents specified
in Article IV below.
"Material Adverse Effect" means a material adverse effect on (i)
the business, Property, condition (financial or otherwise), results of
operations, or prospects of the Borrower and its Subsidiaries taken as a
whole, (ii) the ability of the Borrower or any of the Subsidiaries to
perform its obligations under the Loan Documents, or (iii) the validity or
enforceability of any of the Loan Documents or the rights or remedies of
the Lender thereunder.
"Multiemployer Plan" means a Plan maintained pursuant to a
collective bargaining agreement or any other arrangement to which the
Borrower or any member of the Controlled Group is a party to which
more than one employer is obligated to make contributions.
"Note" means a promissory note, in substantially the form of
Exhibit "A" hereto, duly executed by the Borrower and payable to the
order of the Lender in the amount of the Commitment, including any
amendment, modification, renewal or replacement of such promissory
note.
"Obligations" means all unpaid principal of and accrued and
unpaid interest on the Note (including all interest accruing after the
commencement of any proceeding against or with respect to the
Borrower under the United States Bankruptcy Code, Title 11 of the
United States Code, or any other federal or state bankruptcy, insolvency,
receivership or similar law, at the rates specified in this Agreement), all
accrued and unpaid fees and all expenses, reimbursements, indemnities
and other obligations of the Borrower and the Subsidiaries to the Lender
or any indemnified party hereunder arising under the Loan Documents,
including without limitation, all Rate Hedging Obligations owing to the
Lender and all obligations owing pursuant to, or in connection with a
Letter of Credit issued, and a Reimbursement Agreement executed in
connection with Section 2.17 below.
"Participants" is defined in Section 10.2.1 below.
"Payment Date" means the first Business Day of each calendar
month.
"PBGC" means the Pension Benefit Guaranty Corporation, or
any successor thereto.
"Person" means any natural person, corporation, firm, joint
venture, partnership, association, enterprise, trust or other entity or
organization, or any government or political subdivision or any agency,
department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered
by Title IV of ERISA or subject to the minimum funding standards
under Section 412 of the Code as to which the Borrower or any member
of the Controlled Group may have any liability.
"PMLIC" means Principal Mutual Life Insurance Company.
"PMLIC Indebtedness" means all indebtedness incurred by the
Borrower or its Subsidiaries pursuant to or in connection with those
certain Note Agreements dated January 31, 1989, executed by the
Borrower and PMLIC.
"Property" of a Person means any and all property, whether
real, personal, tangible, intangible, or mixed of such Person, or other
assets owned, leased or operated by such Person.
"Purchasers" is defined in Section 10.3.1 below.
"Rate Hedging Obligations" of a Person means any and all
obligations of such Person, whether absolute or contingent and
howsoever and whensoever created, arising, evidenced or acquired
(including without limitations, all renewals, extensions and modifications
thereof and substitutions therefor), under (i) any and all agreements,
devices or arrangements designed to protect at least one of the parties
thereto from the fluctuations of interest rates, exchange rates or forward
rates applicable to such party's assets, liabilities or exchange
transactions, including without limitations, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency
exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options, puts and warrants, and (ii)
any and all cancellations, buy backs, reversals, terminations or
assignments of any of the foregoing.
"Regulation D" means Regulation D of the Board of Governors
of the Federal Reserve System as from time to time in effect and any
successor thereto or other regulation or official interpretation of said
Board of Governors relating to reserve requirements applicable to
member banks of the Federal Reserve System.
"Regulation U" means Regulation U of the Board of Governors
of the Federal Reserve System as from time to time in effect and any
successor or other regulation or official interpretation of said Board of
Governors relating to the extension of credit by banks for the purpose of
purchasing or carrying margin stocks applicable to member banks of the
Federal Reserve System.
"Reimbursement Agreement" shall mean, with respect to a
Letter of Credit, such reimbursement agreement as the Lender may
employ in the ordinary course of business for its own account.
"Release" means a "release", as such term is defined in
CERCLA.
"Rentals" of a Person means the aggregate fixed amounts
payable by such Person under any lease of Property having an original
term (including any required renewals or any renewals at the option of
the lessor or lessee) of one year or more.
"Reportable Event" means a reportable event as defined in
Section 4043 of ERISA and the regulations issued under such section,
with respect to a Plan, excluding, however, such events as to which the
PBGC by regulation waived the requirement of Section 4043(a) of
ERISA that it be notified within thirty (30) days of the occurrence of
such event, provided, however, that a failure to meet the minimum
funding standard of Section 412 of the Code and of Section 302 of
ERISA shall be a Reportable Event regardless of the issuance of any
such waiver of the notice requirement in accordance with either Section
4043(a) of ERISA or Section 412(d) of the Code.
"Reserve Requirement" means, with respect to a Eurodollar
Interest Period, the maximum aggregate reserve requirement (including
all basic, supplemental, marginal and other reserves) which is imposed
under Regulation D on new non-personal time deposits of $100,000 or
more with a maturity equal to that of such Eurodollar Interest Period.
"Section" means a numbered section of this Agreement, unless
another document is specifically referenced.
"Single Employer Plan" means a Plan maintained by the
Borrower or any member of the Controlled Group for employees of the
Borrower or any member of the Controlled Group.
"Subordinated Indebtedness" of a Person means any
Indebtedness of such Person the payment of which is subordinated to
payment of the Obligations to the written satisfaction of the Lender,
provided that Indebtedness related to, or incurred in connection with, the
Bond Transactions shall not constitute Subordinated Indebtedness.
"Subsidiary" of a Person means (i) any corporation more than
fifty percent (50%) of the outstanding securities having ordinary voting
power of which shall at the time be owned or controlled, directly or
indirectly, by such Person or by one or more of its Subsidiaries or by
such Person and one or more of its Subsidiaries, or (ii) any partnership,
association, joint venture or similar business organization more than
fifty percent (50%) of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled. Unless
otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Borrower. As of the date hereof, the sole
Subsidiaries of the Borrower are Heatec, Inc., a Tennessee corporation,
Roadtec, Inc., a Tennessee corporation, Trencor, Inc., a Texas
corporation, Telsmith, Inc., a Delaware corporation, Astec
Transportation, Inc., a Tennessee corporation, and Astec Corporation, a
Tennessee corporation, each of which is a Wholly-Owned Subsidiary of
the Borrower, provided that so long as Wibau-Astec Maschinenfabrik
GmbH, a German limited liability company ("Wibau-Astec") is not a
Wholly-Owned Subsidiary of the Borrower, Wibau-Astec shall not be a
Subsidiary of the Borrower for the purposes of the Loan Documents.
"Subsidiary Letters of Credit" means (i) that certain letter of
credit issued by the Lender for the account of the Borrower in
connection with the issuance of Industrial Development Revenue Bonds
in the approximate amount of $8,000,000 to finance the construction
and acquisition of a facility and equipment to be used in the operation of
Trencor, Inc.'s business, and (ii) that certain letter of credit issued by
M&I Marshall and Ilsley Bank for the account of the Borrower in
connection with the issuance of Variable Rate Demand Industrial
Revenue Bonds Series 1994 in the approximate value of $6,000,000 to
finance the construction and acquisition of a facility and equipment to be
used in the operation of Telsmith, Inc.'s business.
"Substantial Portion" means, with respect to the Property of the
Borrower and its Subsidiaries, Property which (i) represents more than
ten percent (10%) of the consolidated assets of the Borrower and its
Subsidiaries as would be shown in the consolidated financial statements
of the Borrower and its Subsidiaries as at the beginning of the twelve
(12) month period ending with the month in which such determination is
made, or (ii) is responsible for more than ten percent (10%) of the
consolidated net sales or of the consolidated net income of the Borrower
and its Subsidiaries as reflected in the consolidated financial statements
referred to in clause (i) above.
"Transferee" is defined in Section 10.4 below.
"Type" means, with respect to any Loan, its nature as a Floating
Rate Loan or a Eurodollar Loan.
"Unfunded Liabilities" means the amount (if any) by which the
present value of all vested nonforfeitable benefits under a Single
Employer Plan exceeds the fair market value of such Plan's assets
allocable to such benefits, all determined as of the then most recent
valuation date for such Plan.
"Unmatured Default" means an event which but for the lapse of
time or the giving of notice, or both, would constitute a Default.
"Wholly-Owned Subsidiary" of a Person means (i) any
Subsidiary all of the outstanding voting securities of which shall at the
time be owned or controlled, directly or indirectly, by such Person or one
or more Wholly-Owned Subsidiaries of such Person, or by such Person
and one or more Wholly-Owned Subsidiaries of such Person, or (ii) any
partnership, association, joint venture or similar business organization
100% of the ownership interests having ordinary voting power of which
shall at the time be so owned or controlled.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II
THE CREDITS
2.1. Commitment. From and including the date of this
Agreement and prior to the Facility Termination Date, the Lender
agrees, on the terms and conditions set forth in this Agreement, to make
Loans to, and issue Letters of Credit on the application of, the Borrower
from time to time in amounts not to exceed in the aggregate at any one
time outstanding the amount of the Commitment. Without limitation to
the foregoing, the maximum amount available to the Borrower to borrow
under the Commitment from time to time shall be reduced by the
aggregate outstanding stated amount of all Letters of Credit issued by
the Lender on the application of the Borrower from time to time
pursuant to this Agreement. Subject to the terms of this Agreement, the
Borrower may borrow, repay and reborrow at any time prior to the
Facility Termination Date. The Commitment to lend hereunder shall
expire on the Facility Termination Date.
2.2. Required Payments; Termination. The outstanding
principal balance of the Loans shall be reduced to an amount not to
exceed $7,500,000 for thirty (30) consecutive days during each
consecutive twelve (12) month period during the term of this Agreement
and during each renewal period provided for in Section 2.16 below. If
not sooner paid, any and all outstanding Loans and all other unpaid
Obligations shall be paid in full by the Borrower on the Facility
Termination Date.
2.3. Types of Loans. The Loans may be Floating Rate
Loans or Eurodollar Loans, or a combination thereof, selected by the
Borrower in accordance with Sections 2.7 and 2.8 below.
2.4. Arrangement Fee; Commitment Fee; Reductions in
Commitment. The Borrower agrees to pay to the Lender an
Arrangement Fee in the amount of $15,000 ("Arrangement Fee")
payable on or before the date hereof, which Arrangement Fee shall be
deemed fully earned on the date hereof whether or not the Loan is
disbursed in whole or in part. The Borrower also agrees to pay to the
Lender a commitment fee ("Commitment Fee") of 0.20% per annum on
the daily average amount of the unborrowed portion of the Commitment
from the date hereof to and including the Facility Termination Date,
payable on each Payment Date hereafter and on the Facility Termination
Date. The Borrower may not reduce the Commitment in whole or in
part during the term of this Agreement or at any time prior to the
Facility Termination Date. All accrued Commitment Fees shall be
payable on the effective date of any termination of the obligations of the
Lender to make Loans hereunder.
2.5. Minimum Amount of Each Loan. Each Eurodollar
Loan shall be in the minimum amount of $100,000 (and in multiples of
$10,000 if in excess thereof), and each Floating Rate Loan shall be in
the minimum amount of $10,000 (and in multiples of $10,000 if in
excess thereof), provided, however, that any Floating Rate Loan may be
in the amount of the unused Commitment.
2.6. Optional Principal Payments. The Borrower may
from time to time pay, without penalty or premium, all outstanding
Floating Rate Loans, or, in a minimum aggregate amount of $10,000 or
any integral multiple of $10,000 in excess thereof, any portion of the
outstanding Floating Rate Loans. The Borrower may not pay a
Eurodollar Loan prior to the last day of the applicable Eurodollar
Interest Period, unless, at the time of such payment, the Borrower pays
to the Lender pursuant to Section 3.4 below all losses and costs incurred
by the Lender as the result of such payment.
2.7. Method of Selecting Types and Interest Periods for
New Loans. Subject to Section 2.17 below, the Borrower shall select
the Type of Loan and, in the case of each Eurodollar Loan, the
Eurodollar Interest Period applicable to each such Loan from time to
time. Subject to Section 2.12 below, the Borrower shall give the Lender
irrevocable written or telephonic notice (a "Borrowing Notice") not later
than 1:00 p.m. (Chicago time) on the Borrowing Date of each Floating
Rate Loan, and two (2) Business Days before the Borrowing Date for
each Eurodollar Loan, specifying:
(i) the Borrowing Date, which shall be a Business
Day, of such Loan,
(ii) the aggregate amount of such Loan,
(iii) the Type of Loan selected, and
(iv) in the case of each Eurodollar Loan, the
Eurodollar Interest Period applicable thereto.
Not later than 4:00 p.m. (Chicago time) on each Borrowing Date, the
Lender shall make available the Loan or Loans, in funds immediately
available, in Chicago to the Borrower at the Lender's address specified
pursuant to Article XI below.
2.8. Conversion and Continuation of Outstanding Loans.
Floating Rate Loans shall continue as Floating Rate Loans unless and
until such Floating Rate Loans are converted into Eurodollar Loans as
provided below. Each Eurodollar Loan shall continue as a Eurodollar
Loan until the end of the then applicable Eurodollar Interest Period
therefor, at which time such Eurodollar Loan shall be automatically
converted into a Floating Rate Loan unless the Borrower shall have
given the Lender a Conversion/Continuation Notice requesting that, at
the end of such Eurodollar Interest Period, such Eurodollar Loan
continue as a Eurodollar Loan for the same or another Eurodollar
Interest Period. Subject to the terms of Sections 2.5 and 2.6 above and
Section 3.4 below, the Borrower may elect from time to time to convert
all or any part of a Loan of any Type into any other Type or Types of
Loans; provided that any conversion of any Eurodollar Loan shall be
made on, and only on, the last day of the Eurodollar Interest Period
applicable thereto. Subject to Section 2.12 below, the Borrower shall
give the Lender irrevocable written or telephonic notice (a
"Conversion/Continuation Notice") of each conversion of a Loan or
continuation of a Eurodollar Loan not later than 1:00 p.m. (Chicago
time) at least one (1) Business Day, in the case of a conversion into a
Floating Rate Loan, or two (2) Business Days, in the case of a
conversion into or continuation of a Eurodollar Loan, prior to the date of
the requested conversion or continuation, specifying:
(i) the requested date which shall be a Business
Day, of such conversion or continuation;
(ii) the aggregate amount and Type of the Loan
which is to be converted or continued; and
(iii) the amount and Type(s) of Loan(s) into which
such Loan is to be converted or continued and,
in the case of a conversion into or continuation
of a Eurodollar Loan, the duration of the
Eurodollar Interest Period applicable thereto.
2.9. Changes in Interest Rate, etc. Changes in the rate of
interest on that portion of any Loan maintained as a Floating Rate Loan
will take effect simultaneously with each change in the Corporate Base
Rate. Each Floating Rate Loan shall bear interest from and including
the first day of the Loan to (but not including) the day of repayment of
the Loan. Each Eurodollar Loan shall bear interest from and including
the first day of the Eurodollar Interest Period applicable thereto to (but
not including) the last day of such Eurodollar Interest Period at the
interest rate determined as applicable to such Eurodollar Loan. No
Eurodollar Interest Period may end after the Facility Termination Date.
The records of the Lender as to the interest rate applicable to a Loan
shall be binding and conclusive absent manifest error.
2.10. Default; Rates Applicable After Default.
Notwithstanding anything to the contrary contained in Sections 2.7 or
2.8 above, during the continuance of a Default or Unmatured Default,
the Lender may, at its option, by notice to the Borrower declare that no
Loan may be made as, converted into or continued as a Eurodollar Loan.
During the continuance of a Default, including without limitation, a
default by the Borrower in the payment of principal of or interest on a
Loan or any other amount becoming due hereunder by scheduled
maturity, acceleration or otherwise, the Lender may, at its option, by
notice to the Borrower, declare that (i) each Eurodollar Loan shall bear
interest for the remainder of the applicable Eurodollar Interest Period at
the rate otherwise applicable to such Eurodollar Interest Period plus one
percent (1%) per annum and (ii) each Floating Rate Loan shall bear
interest at a rate per annum equal to the Floating Rate otherwise
applicable to the Floating Rate Loan plus one percent (1%) per annum.
2.11. Method of Payment. All payments of the Obligations
hereunder shall be made, without setoff, deduction, or counterclaim, in
immediately available funds to the Lender at the Lender's address
specified pursuant to Article XI below, or at any other Lending
Installation of the Lender specified in writing by the Lender to the
Borrower, by 1:00 p.m. (Chicago time) on the date when due. Funds
received after that time shall be deemed to have been received by the
Lender on the next following Business Day. The Borrower shall
maintain the Loan Account with the Lender into which all advances of
the Loan by the Lender to the Borrower shall be made. The Borrower
hereby authorizes the Lender, and the Lender may, in its sole and
absolute discretion, charge for any payments due hereunder, under the
Note and under the other Loan Documents, the Loan Account, provided
however, that the provisions of this Section 2.11 shall not affect the
Borrower's obligation to pay when due all amounts payable by the
Borrower under this Agreement, the Note and any other Loan
Document, whether or not there are sufficient funds in the Loan
Account.
2.12. Note; Telephonic Notices. The Lender is hereby
authorized to record the principal amount and date of each of the Loans
and each repayment (of principal and interest) and such other reasonable
information on the schedule attached to the Note or in the Lender's
internal records, provided, however, that the failure to so record (or any
error in such recording) shall not affect the Borrower's obligations under
the Note or the other Loan Documents. The Borrower hereby authorizes
the Lender to extend, convert or continue Loans, effect selections of
Types of Loans and transfer funds based on telephonic notices made by
any person or persons the Lender in good faith believes to be an
Authorized Officer. The Borrower agrees to deliver promptly to the
Lender a written confirmation, if such confirmation is requested by the
Lender, of each telephonic notice, signed by an Authorized Officer. If
the written confirmation differs in any material respect from the action
taken by the Lender, the records of the Lender shall govern absent
manifest error.
2.13. Interest Payment Dates; Interest and Fee Basis.
Interest accrued on each Floating Rate Loan shall be payable on each
Payment Date, commencing with the first such date to occur after the
date hereof, on any date on which the Floating Rate Loan is prepaid due
to acceleration, and at maturity. Interest accrued on that portion of the
outstanding principal amount of any Floating Rate Loan converted into a
Eurodollar Loan on a day other than a Payment Date shall be payable on
the date of conversion. Interest accrued on each Eurodollar Loan shall
be payable on the last day of its applicable Eurodollar Interest Period,
on any date on which the Eurodollar Loan is prepaid (without limitation
to the restrictions set forth in Sections 2.6 and 2.8 above and Section 3.4
below), whether by acceleration or otherwise, and at maturity. Interest
and Commitment Fees shall be calculated for actual days elapsed on the
basis of a 360-day year. Interest shall be payable for the day a Loan is
made but not for the day of any payment on the amount paid if payment
is received by the Lender prior to 1:00 p.m. (Chicago time) at the place
of payment. If any payment of principal of or interest on a Loan shall
become due on a day which is not a Business Day, such payment shall
be made on the next succeeding Business Day and, in the case of a
principal payment, such extension of time shall be included in computing
interest in connection with such payment.
2.14. Lending Installations. The Lender may book the
Loans at any Lending Installation selected by the Lender and may
change its Lending Installation from time to time. All terms of this
Agreement shall apply to any such Lending Installation and the Note
shall be deemed held by the Lender for the benefit of such Lending
Installation. The Lender may, by written or telex notice to the
Borrower, designate a Lending Installation through which Loans will be
made by it and for whose account Loan payments are to be made.
2.15. Application of Payments. The Borrower irrevocably
waives the right to direct the application of payments and collections
received by the Lender from or on behalf of the Borrower, and the
Borrower agrees that the Lender shall have the continuing exclusive
right to apply and reapply any and all such payments and collections
against the Obligations in such manner as the Lender may deem
appropriate, notwithstanding any entry by the Lender upon any of its
books and records, provided, however, that so long as the Borrower is
not delinquent in the payment to the Lender of any amounts (including
principal, interest and fees) owing under the Loan, this Agreement and
any of the other Loan Documents, nothing contained herein shall limit
the Borrower's rights under Section 2.6 above. To the extent that the
Borrower makes a payment or payments to the Lender, which payments
or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy act, state or
federal law, common law or equitable cause, then, to the extent of such
payment received, the Obligations or part thereof intended to be satisfied
shall be revived and shall continue in full force and effect, as if such
payments had not been received by the Lender.
2.16. Extension of Facility Termination Date. The
Borrower may request an extension of the Facility Termination Date in
effect at any time by submitting a request for an extension to the Lender
(an "Extension Request") not less than twelve (12) months and not more
than fourteen (14) months prior to the then applicable Facility
Termination Date. If the Lender decides, in its sole discretion, to
approve the Extension Request, then effective upon written notice of
such approval from the Lender to the Borrower, the new Facility
Termination Date shall be on the next anniversary of the then applicable
Facility Termination Date.
2.17 Letters of Credit.
(i) Obligation to Issue. Subject to the terms and
conditions of this Agreement, the Lender hereby agrees to issue for the
account of the Borrower one or more Letters of Credit, up to a
maximum aggregate stated amount at any one time outstanding equal to
the unused amount of the Commitment from time to time (after taking
into account all Letter of Credit Obligations) during the term of this
Agreement up to the Business Day which is five (5) Business Days prior
to the Facility Termination Date.
(ii) Types and Amounts. The Lender shall not have
any obligation to issue any Letter of Credit at any time:
(a) if the maximum aggregate amount then available
for drawing under Letters of Credit, after giving effect to the
Letter of Credit requested hereunder, shall exceed any limit
imposed by law or regulation upon the Lender;
(b) if immediately after the issuance of such Letter of
Credit, the Commitment would be exceeded; or
(c) if the proposed Letter of Credit has an expiration
date later than five (5) Business Days immediately preceding the
Facility Termination Date.
(iii) Conditions. In addition to being subject to the
satisfaction of the conditions precedent contained in Article IV below,
the obligation of the Lender to issue any Letter of Credit is subject to the
satisfaction in full of the following conditions:
(a) if required by the Lender, the Borrower shall have
delivered to the Lender, at such times and in such manner as the
Lender may prescribe, a Reimbursement Agreement and such
other documents and materials as may be required by the Lender
pursuant to the terms thereof, and the terms of the proposed
Letter of Credit shall be satisfactory to the Lender and shall be
consistent with the Lender's ordinary practice with respect to
terms of its letters of credit; and
(b) as of the date of issuance of the Letter of Credit,
no order, judgment or decree of any court, arbitrator or
governmental authority shall purport by its terms to enjoin or
restrain the Lender from issuing the Letter of Credit and no law,
rule or regulation applicable to the Lender and no request or
directive (whether or not having the force of law and whether or
not the failure to comply therewith would be unlawful) from any
governmental authority with jurisdiction over the Lender shall
prohibit or request the Lender to refrain from the issuance of
letters of credit generally or the issuance of that Letter of Credit.
(iv) Issuance of Letters of Credit.
(a) The Borrower shall give at least one (1)
Business Day's prior written notice of a requested issuance of a
Letter of Credit, which Letter of Credit shall be issued in a
manner consistent with the Lender's ordinary practice with
respect to issuing letters of credit by the close of business on the
following Business Day. Such notice shall be irrevocable and in
the form of the customary letter of credit application used by the
Lender and shall specify (I) the stated amount of the Letter of
Credit requested, (II) the effective date (which day shall be a
Business Day) of issuance of the requested Letter of Credit, (III)
the date on which the requested Letter of Credit is to expire
(subject to Section 2.17(ii)(c) above), (IV) the Person for whose
benefit the requested Letter of Credit is to be issued, (V) the
amount of Letter of Credit Obligations and Obligations then
outstanding, (VI) the then unused portion of the Commitment,
and (VII) the terms on which the Letter of Credit is to be issued.
Such notice, to be effective, must be received by the Lender not
later than 12:00 noon (Chicago time) on the last Business Day
on which notice can be given under this Section 2.17(iv)(a).
(b) The Lender shall not be obligated to extend or
amend any Letter of Credit if the issuance of a new Letter of
Credit having the same terms as such Letter of Credit as so
extended or amended would be prohibited by Section 2.17(ii)
above.
(v) Reimbursement Obligations; Duties of the
Lender.
(a) Notwithstanding any provisions to the contrary in
any Reimbursement Agreement:
(I) the Borrower shall reimburse the Lender for
drawings under a Letter of Credit issued by it no later
than the earlier of (1) the time specified in such
Reimbursement Agreement, and (2) three (3)
Business Days after the payment by the Lender of
such drawing; and
(II) any reimbursement obligation with respect
to any Letter of Credit shall bear interest from the
date of the relevant drawing under the pertinent Letter
of Credit at the higher of the interest rate (1) specified
in the applicable Reimbursement Agreement with
respect to such amount, or (2) for past due Floating
Rate Loans calculated in accordance with Section
2.10 above.
(b) In the event this Agreement and any
Reimbursement Agreement are inconsistent, the terms of this
Agreement shall prevail.
(vi) Payment of Reimbursement Obligations. The
Borrower agrees to pay to the Lender the amount of all reimbursement
obligations, interest and other amounts payable to the Lender under or in
connection with any Letter of Credit issued on behalf of the Borrower
immediately when due, irrespective of any claim, setoff, defense or other
right which the Borrower may have at any time against the Lender or
any other Person.
(vii) Compensation for Letters of Credit. The
Borrower shall pay with respect to each Letter of Credit 1.0% of the
stated amount of the Letter of Credit per annum in advance.
(viii) Indemnification; Exoneration.
(a) In addition to amounts payable as elsewhere
provided in this Section 2.17, the Borrower hereby agrees to
protect, indemnify, pay and save the Lender harmless from and
against any and all loss, liability, damage and expense
(including attorneys' fees and expenses) which the Lender may
incur or be subject to as a consequence, direct or indirect, of (I)
the issuance of a Letter of Credit, other than as a result of its
gross negligence or willful misconduct, or (II) the failure of the
Lender to honor a drawing under such Letter of Credit as a
result of any act or omission, whether rightful or wrongful, of
any present or future de jure or de facto governmental authority.
(b) As between the Borrower and the Lender, the
Borrower assumes all risks of the acts and omissions of or
misuse of such Letter of Credit by the beneficiary of such Letter
of Credit. In furtherance and not in limitation of the foregoing,
subject to the provisions of the Reimbursement Agreements, the
Lender shall not be responsible for (I) the form, validity,
sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the
application for the issuance of the Letters of Credit, even if it
should in fact prove to be in any or all respect invalid,
insufficient, inaccurate, fraudulent or forged, (II) the validity or
sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part,
which may prove to be invalid or ineffective for any reason, (III)
failure of the beneficiary of a Letter of Credit to comply duly
with conditions required in order to draw upon such Letter of
Credit, (IV) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable,
telegraph, telex, or other similar form of teletransmission or
otherwise, whether or not they be in cipher, (V) errors in
interpretation of technical terms, (VI) any loss or delay in the
transmission or otherwise of any document required in order to
make a drawing under any Letter of Credit or of the proceeds
thereof, (VII) the misapplication by the beneficiary of a Letter
of Credit, or (VIII) any consequences arising from causes
beyond the control of the Lender, except in each case if caused
solely by the gross negligence or willful misconduct of the
Lender.
(c) In furtherance and extension and not in limitation
of the specific provisions hereinabove set forth, any action taken
or omitted by the Lender under or in connection with Letters of
Credit issued on behalf of the Borrower or any related
certificates, if taken or omitted in good faith, shall not in the
absence of gross negligence or willful misconduct by the
Lender, put the Lender under any resulting liability to the
Borrower or relieve the Borrower of any of its obligations
hereunder to the Lender.
2.18 Existing Revolving Credit Facility. This Agreement
and the transactions contemplated hereunder supersede and replace the
Existing Revolving Credit Facility which shall be deemed canceled and
null and void, and neither the Lender nor the Borrower shall have any
further obligations thereunder, provided, that, each letter of credit
described in Schedule "2.18" hereto shall be deemed to have been issued
under Section 2.17 above and be otherwise subject to the terms and
provisions of this Agreement.
ARTICLE III
CHANGE IN CIRCUMSTANCES
3.1. Yield Protection. If any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive
(whether or not having the force of law), or any interpretation thereof, or
the compliance of the Lender therewith,
(i) subjects the Lender or any applicable Lending
Installation to any tax, duty, charge or withholding on or from payments
due from the Borrower (excluding federal taxation of the overall net
income of the Lender or any applicable Lending Installation), or changes
the basis of taxation of payments to the Lender in respect of the Loans
(including without limitation the Letter of Credit Obligations) or other
amounts due it hereunder, or
(ii) imposes or increases or deems applicable any
reserve, assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the account of, or
credit extended by, the Lender or any applicable Lending Installation
(other than reserves and assessments taken into account in determining
the interest rate applicable to Fixed Rate Loans), or
(iii) imposes any other condition the result of which
is to increase the cost to the Lender or any applicable Lending
Installation of making, funding or maintaining loans (including without
limitation issuing letters of credit) or reduces any amount receivable by
the Lender or any applicable Lending Installation in connection with
loans (including without limitation letters of credit), or requires the
Lender or any applicable Lending Installation to make any payment
calculated by reference to the amount of loans (including without
limitation letters of credit) held or interest received by it, by an amount
deemed material by the Lender,
then, within fifteen (15) days of demand by the Lender, the Borrower
shall pay the Lender that portion of such increased expense incurred or
reduction in an amount received which the Lender determines is
attributable to making, funding and maintaining the Loans (including
without limitation the Letter of Credit Obligations) and the Commitment.
3.2. Changes in Capital Adequacy Regulations. If the
Lender determines the amount of capital required or expected to be
maintained by it, any Lending Installation of the Lender or any
corporation controlling the Lender is increased as a result of a Change
(as defined below), then, within fifteen (15) days of demand by the
Lender, the Borrower shall pay the Lender the amount necessary to
compensate for any shortfall in the rate of return on the portion of such
increased capital which the Lender determines is attributable to this
Agreement, the Loans (including without limitation the Letter of Credit
Obligations) or its obligation to make Loans (including without
limitation Letters of Credit) hereunder (after taking into account the
Lender's policies as to capital adequacy). "Change" means (i) any
change after the date of this Agreement in the Risk-Based Capital
Guidelines (as defined below) or (ii) any adoption of or change in any
other law, governmental or quasi-governmental rule, regulation, policy,
guideline, interpretation, or directive (whether or not having the force of
law) after the date of this Agreement which affects the amount of capital
required or expected to be maintained by the Lender or any Lending
Installation or any corporation controlling the Lender. "Risk-Based
Capital Guidelines" means (a) the risk-based capital guidelines in effect
in the United States on the date of this Agreement, including transition
rules, and (b) the corresponding capital regulations promulgated by
regulatory authorities outside the United States implementing the July
1988 report of the Basle Committee on Banking Regulation and
Supervisory Practices Entitled "International Convergence of Capital
Measurements and Capital Standards," including transition rules, and
any amendments to such regulations adopted prior to the date of this
Agreement.
3.3. Availability of Types of Loans. If the Lender
determines that maintenance of any of the Eurodollar Loans at a suitable
Lending Installation would violate any applicable law, rule, regulation or
directive, whether or not having the force of law, the Lender may
suspend the availability of the affected Eurodollar Loan and require any
such Eurodollar Loans to be repaid; or if the Lender determines that (i)
deposits of a type or maturity appropriate to match fund Eurodollar
Loans are not available, the Lender may suspend the availability of the
affected Eurodollar Loan with respect to any Eurodollar Loans made
after the date of any such determination, or (ii) an interest rate
applicable to a Eurodollar Loan does not accurately reflect the cost of
making such Eurodollar Loan, then, if for any reason whatsoever the
provisions of Section 3.1 above are inapplicable, the Lender may
suspend the availability of the affected Eurodollar Loan with respect to
any such Eurodollar Loans made after the date of any such
determination.
3.4. Funding Indemnification. Without limitation to the
restrictions set forth in Sections 2.6 and 2.8 above, if any payment of a
Eurodollar Loan occurs on a date which is not the last day of the
applicable Eurodollar Interest Period, whether because of acceleration,
prepayment or otherwise, or a Eurodollar Loan is not made on the date
specified by the Borrower for any reason other than default by the
Lender, the Borrower will indemnify the Lender for any loss or cost
incurred by the Lender resulting therefrom, including without limitation,
any loss or cost in liquidating or employing deposits acquired to fund or
maintain the Eurodollar Loan.
3.5. Lender Statements; Survival of Indemnity. To the
extent reasonably possible, the Lender shall designate an alternate
Lending Installation with respect to the Eurodollar Loans to reduce any
liability of the Borrower to the Lender under Sections 3.1 and 3.2 above
or to avoid the unavailability of a Eurodollar Loan under Section 3.3
above, so long as such designation is not disadvantageous to the Lender.
The Lender shall deliver to the Borrower a written statement as to the
amount due, if any, under Sections 3.1, 3.2 or 3.4 above. Such written
statement shall set forth in reasonable detail the calculations upon which
the Lender determined such amount and shall be final, conclusive and
binding on the Borrower in the absence of manifest error. Determination
of amounts payable under such Sections in connection with a Eurodollar
Loan shall be calculated as though the Lender funded the Eurodollar
Loan through the purchase of a deposit of the type and maturity
corresponding to the deposit used as a reference in determining the
Eurodollar Rate applicable to such Loan, whether in fact that is the case
or not. Unless otherwise provided herein, the amount specified in the
written statement shall be payable on demand after receipt by the
Borrower of the written statement. The obligations of the Borrower
under Sections 3.1, 3.2 and 3.4 above shall survive payment of the
Obligations and termination of this Agreement.
3.6 Termination of Commitment. If the Borrower incurs
additional cost or expense pursuant to Sections 3.1, 3.2 or 3.3 above,
upon thirty (30) days' prior written notice to the Lender, the Borrower
may terminate the Commitment, and neither the Lender nor the
Borrower shall have any further obligations hereunder, except for such
obligations which shall expressly survive the termination of the
Commitment, this Agreement or any of the other Loan Documents.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. Initial Loan. The Lender shall not be required to
make the initial Loan hereunder unless the Borrower has furnished to the
Lender in form and content satisfactory to the Lender each of the
following:
(i) Copies of the articles of incorporation, together
with all amendments thereto, and a certificate of good standing, of the
Borrower and each of its Subsidiaries, all certified by the appropriate
governmental officer in the Borrower's and each of its Subsidiaries'
jurisdiction of incorporation, and if requested by the Lender, certificates
of authorization to do business in all other jurisdictions where the
Borrower and each of its Subsidiaries conducts business.
(ii) Copies, certified by the Secretary or Assistant
Secretary of the Borrower and each of its Subsidiaries, of their
respective by-laws and of their respective Board of Directors' resolutions
(and resolutions of other bodies, if any are deemed necessary by counsel
for the Lender) authorizing the execution, delivery and performance of
the Loan Documents.
(iii) An incumbency certificate, executed by the
Secretary or Assistant Secretary of the Borrower and each of its
Subsidiaries, which shall identify by name and title and bear the
signature of the officers of the Borrower and each of its Subsidiaries
authorized to sign the Loan Documents and to make borrowings
hereunder, upon which certificate the Lender shall be entitled to rely
until informed of any change in writing by the Borrower.
(iv) A certificate, signed by the chief financial
officer of the Borrower, stating that on the initial Borrowing Date no
Default or Unmatured Default has occurred and is continuing.
(v) A written opinion of the Borrower's and each of
its Subsidiaries' counsel, addressed to the Lender in substantially the
form of Exhibit "B" hereto.
(vi) The Note.
(vii) Written money transfer instructions, in
substantially the form of Exhibit "C" hereto, addressed to the Lender and
signed by an Authorized Officer, together with such other related money
transfer authorizations as the Lender may have reasonably requested.
(viii) The Guaranty.
(ix) The insurance certificate described in Section
5.19 below and any and all certificates of insurance required by the
Lender under Section 6.6 below.
(x) Payment of the Arrangement Fee.
(xi) An agreement terminating that certain
Collateral Trust Indenture dated as of March 1, 1991 executed by and
among the Borrower, the Lender, NationsBank of Georgia, National
Association (formerly known as Citizens and Southern Trust Company
(Georgia), N.A.) and Principal Mutual Life Insurance Company.
(xii) A solvency certificate executed by an
Authorized Officer of the Borrower.
(xiii) Recently dated reports describing all Lien filings
and judgments against or with respect to the Borrower and each
Subsidiary.
(xiv) Such other documents as the Lender or its
counsel may have reasonably requested.
4.2. Each Loan. The Lender shall not be required to make
any Loan (including without limitation, issuance of a Letter of Credit,
but other than a Loan that, after giving effect thereto and to the
application of the proceeds thereof, does not increase the aggregate
amount of outstanding Loans), unless on the applicable Borrowing Date:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in
Article V below are true, correct and complete as of such Borrowing
Date except to the extent any such representation or warranty is stated to
relate solely to an earlier date, in which case such representation or
warranty shall be true, correct and complete on and as of such earlier
date.
(iii) All legal matters incident to the making of such
Loan shall be satisfactory to the Lender and its counsel.
Each Borrowing Notice with respect to each such Loan and
each acceptance by the Borrower of the proceeds of each such Loan
hereunder shall constitute a representation and warranty by the
Borrower that the conditions contained in Sections 4.2(i) and (ii) have
been satisfied. The Lender may require a duly completed compliance
certificate in substantially the form of Exhibit "D" hereto as a condition
to making a Loan.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lender that:
5.1. Corporate Existence and Standing. Each of the
Borrower and its Subsidiaries is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and has all requisite authority, including all licenses,
registrations, permits, franchises, patents, copyrights, trademarks,
tradenames, consents and approvals, to own its property and assets and
consummate the transactions contemplated hereby and to conduct its
business, and is qualified to do business and is in good standing or
otherwise authorized to conduct business in each jurisdiction in which its
business is conducted and where such qualification is necessary.
5.2. Authorization and Validity. Each of the Borrower
and its Subsidiaries has the corporate power and authority and legal
right to execute and deliver the Loan Documents and to perform its
obligations hereunder and thereunder. The execution and delivery by
each of the Borrower and its Subsidiaries of the Loan Documents and
the performance of its obligations hereunder and thereunder have been
duly authorized by proper corporate proceedings, and the Loan
Documents constitute legal, valid and binding obligations of the
Borrower and its Subsidiaries enforceable against the Borrower and its
Subsidiaries in accordance with their respective terms, except as
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally.
5.3. No Conflict; Government Consent. Neither the
execution and delivery by the Borrower of the Loan Documents, nor the
consummation of the transactions herein and therein contemplated, nor
compliance with the provisions thereof will violate any law, rule,
regulation (including any applicable Regulations of the Board of
Governors of the Federal Reserve System), order, writ, judgment,
injunction, decree or award binding on the Borrower or any of its
Subsidiaries or the Borrower's or any Subsidiary's articles of
incorporation or by-laws or the provisions of any indenture, instrument
or agreement to which the Borrower or any of its Subsidiaries is a party
or is subject, or by which it, or its Property, is bound, or conflict with or
constitute a default thereunder, or result in the creation or imposition of
any Lien in, of or on the Property of the Borrower or a Subsidiary
pursuant to the terms of any such indenture, instrument or agreement.
No order, consent, approval, license, authorization, or validation of, or
filing, recording or registration with, or exemption by, any governmental
or public body or authority, or any subdivision thereof, is required to
authorize, or is required in connection with the execution, delivery and
performance of, or the legality, validity, binding effect or enforceability
of, any of the Loan Documents.
5.4. Financial Statements. The December 31, 1993
consolidated financial statements of the Borrower and its Subsidiaries
heretofore delivered to the Lender were prepared in accordance with
Agreement Accounting Principles in effect on the date such statements
were prepared and fairly present the consolidated financial condition and
operations of the Borrower and its Subsidiaries at such date and the
consolidated results of their operations for the period then ended. All
financial projections will be prepared by the Borrower in good faith,
based upon information and assumptions reasonably believed to be
sound and accurate and represent reasonable forecasts of the Borrower's
future operations and financial performance.
5.5. Material Adverse Effect. Since December 31, 1993,
there has been no change in the business, Property, prospects, condition
(financial or otherwise) or results of operations of the Borrower and its
Subsidiaries which could have a Material Adverse Effect.
5.6. Taxes. The Borrower and its Subsidiaries have filed
all United States federal income tax returns and all other tax returns
which are required to be filed and have paid all taxes due pursuant to
said returns or pursuant to any assessment received by the Borrower or
any of its Subsidiaries, except such taxes, if any, as are being contested
in good faith and as to which adequate reserves have been provided. No
tax liens have been filed and no claims are being asserted with respect to
any such taxes. The charges, accruals and reserves on the books of the
Borrower and its Subsidiaries in respect of any taxes or other
governmental charges are adequate.
5.7. Litigation and Contingent Obligations. Except as set
forth on Schedule "5.7" hereto, there is no litigation, arbitration,
governmental investigation, proceeding or inquiry pending or, to the best
knowledge of any of their officers after due inquiry, threatened against
or affecting the Borrower or any of its Subsidiaries or their respective
Property or operations which could have a Material Adverse Effect.
Other than any liability incident to such litigation, arbitration or
proceedings, the Borrower has no material contingent obligations not
provided for or disclosed in the financial statements referred to in
Section 5.4.
5.8. Subsidiaries. Schedule "5.8" hereto contains an
accurate and complete list of all of the presently existing Subsidiaries of
the Borrower, setting forth their respective jurisdictions of incorporation
and the percentage of their respective capital stock owned by the
Borrower or other Subsidiaries. All of the issued and outstanding shares
of capital stock of such Subsidiaries are free from liens and have been
duly authorized and issued and are fully paid and non-assessable.
5.9. ERISA. The Unfunded Liabilities of all Single
Employer Plans do not in the aggregate exceed $5,000,000. Neither the
Borrower nor any other member of the Controlled Group has incurred,
or is reasonably expected to incur, any withdrawal liability to
Multiemployer Plans in excess of $1,000,000 in the aggregate. Each
Plan complies in all material respects with all applicable requirements of
law and regulations, including without limitation, all minimum funding
standards under ERISA, no Reportable Event has occurred with respect
to any Plan, neither the Borrower nor any other members of the
Controlled Group has withdrawn from any Plan or initiated steps to do
so, and no steps have been taken to reorganize or terminate any Plan.
5.10. Accuracy of Information. All factual information
heretofore or contemporaneously furnished by or on behalf of the
Borrower or any of its Subsidiaries to the Lender for purposes of or in
connection with this Agreement or any transaction contemplated hereby
is, and all other such factual information hereafter furnished by or on
behalf of the Borrower or any of its Subsidiaries to the Lender will be,
true and accurate (taken as a whole) on the date as of which such
information is dated or certified and not incomplete by omitting to state
any material fact necessary to make such information (taken as a whole)
not misleading at such time.
5.11. Regulation U. Neither the Borrower nor any of its
Subsidiaries is engaged principally, or as of one of its important
activities, in the business of extending credit for the purpose of
purchasing or carrying Margin Stock. Neither the Loan nor any of the
proceeds thereof, is for the purpose, whether immediate, incidental or
ultimate of (i) buying or carrying Margin Stock, or (ii) extending credit
to others for the purpose of buying or carrying Margin Stock, or (iii)
refunding indebtedness originally incurred for such purpose, or for any
purpose which entails a violation of, or which is inconsistent with, the
provisions of Regulations of the Board of Governors of the Federal
Reserve System, including Regulation U.
5.12. Material Agreements. Neither the Borrower nor any
Subsidiary is a party to any agreement or instrument or subject to any
charter or other corporate restriction which could have a Material
Adverse Effect. Neither the Borrower nor any Subsidiary is in default in
the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in (i) any agreement to which it is a
party, which default could have a Material Adverse Effect or (ii) any
agreement or instrument evidencing or governing Indebtedness.
5.13. Compliance With Laws. The Borrower and its
Subsidiaries have complied with all applicable statutes, rules,
regulations, orders and restrictions of any domestic or foreign
government or any instrumentality or agency thereof, having jurisdiction
over the conduct of their respective businesses or the ownership of their
respective Properties, including without limitation, Environmental Laws
and ERISA. Neither the Borrower nor any Subsidiary has received any
notice to the effect that its operations are not in compliance with any of
the requirements of applicable Environmental Laws or the subject of any
federal or state investigation evaluating whether any remedial action is
needed to respond to a Release of any Hazardous Materials into the
environment, which non-compliance or remedial action could have a
Material Adverse Effect.
5.14. Ownership of Properties. Except as set forth on
Schedule "5.14" hereto, on the date of this Agreement, the Borrower and
its Subsidiaries will have good title, free of all Liens other than those
permitted by Section 6.18 below, to all of the Property and assets
reflected in its consolidated financial statements as owned by them.
5.15. Investment Company Act. Neither the Borrower nor
any Subsidiary thereof is an "investment company" or a company
"controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
5.16. Public Utility Holding Company Act. Neither the
Borrower nor any Subsidiary is a "holding company" or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company", within
the meaning of the Public Utility Holding Company Act of 1935, as
amended.
5.17. Subordinated Indebtedness. The Obligations
constitute senior indebtedness which is entitled to the benefits of the
subordination provisions of all outstanding Subordinated Indebtedness.
5.18. Intentionally Omitted.
5.19. Insurance. The certificate signed by the President or
Chief Financial Officer of the Borrower, that attests to the existence and
adequacy of, and summarizes, the property and casualty insurance
program carried by the Borrower and its Subsidiaries and that has been
furnished by the Borrower to the Lender, is complete and accurate. This
summary includes the insurer's or insurers' name(s), policy number(s),
expiration date(s), amount(s) of coverage, type(s) of coverage,
exclusion(s), and deductibles. This summary also includes similar
information, and describes any reserves, relating to any self-insurance
program that is in effect.
5.20. Solvency. (i) Neither the Borrower nor any
Subsidiary is insolvent and the consummation of the transactions
contemplated herein will not render the Borrower or any Subsidiary
insolvent. Immediately after the consummation of the transactions to
occur on the date hereof and immediately following the making of each
Loan, if any, made on the date hereof and after giving effect to the
application of the proceeds of such Loans, (a) the fair value of the assets
of the Borrower and the Subsidiaries on a consolidated basis, at a fair
valuation, will exceed the debts and liabilities, whether or not
subordinated, absolute, fixed or contingent, material or immaterial,
liquidated or unliquidated or otherwise, of the Borrower and the
Subsidiaries on a consolidated basis, (b) the present fair saleable value
of the property of the Borrower and the Subsidiaries on a consolidated
basis will be greater than the amount that will be required to pay the
probable liability of the Borrower and the Subsidiaries on a consolidated
basis on their debts and other liabilities, whether or not subordinated,
absolute, fixed or contingent, material or immaterial, liquidated or
unliquidated or otherwise, as such debts and other liabilities become
absolute and matured, (c) the Borrower and the Subsidiaries on a
consolidated basis will be able to pay their debts and liabilities, whether
or not subordinated, absolute, fixed or contingent, material or
immaterial, liquidated or unliquidated or otherwise, as such debts and
liabilities become absolute and matured, and (d) the Borrower and the
Subsidiaries on a consolidated basis will not have unreasonably small
capital with which to conduct the business in which they are engaged as
such businesses are now conducted and are proposed to be conducted
after the date hereof.
(ii) The Borrower does not intend to, or to permit any of its
Subsidiaries to, and does not believe that it or any of its Subsidiaries
will, incur debts beyond its ability to pay such debts as they mature,
taking into account the timing of and amounts of cash to be received by
it or any such Subsidiary and the timing of the amounts of cash to be
payable on or in respect of its Indebtedness or the Indebtedness of any
such Subsidiary.
5.21. Licenses. Each of the Borrower and its Subsidiaries
possesses adequate assets, licenses, permits, authorizations, patents,
patent applications, copyrights, trademarks, trademark applications and
tradenames to continue to conduct its business as heretofore conducted.
No event has occurred which permits, or after notice or lapse of time or
both would permit, the revocation or termination of any of the foregoing
which taken in isolation or when considered with all other such
revocations or terminations could have a Material Adverse Effect. The
Borrower has no notice or knowledge of any fact or any past, present or
threatened occurrence that could preclude or impair the Borrower's or its
Subsidiaries' ability to retain or obtain any authorization necessary for
the operation of their respective businesses.
5.22. Environmental Protection. Except as set forth on
Schedule "5.22 " hereto:
(i) all facilities and Properties (including without
limitation, underlying groundwater) owned or leased by the Borrower or
any of its Subsidiaries have been, and continue to be, owned or leased by
the Borrower and its Subsidiaries in compliance with all Environmental
Laws;
(ii) there has been no past, and there are no pending
or threatened
(a) claims, complaints, notices or requests
for information received by the Borrower or any of its
Subsidiaries with respect to any alleged violation of any
Environmental Law, or
(b) complaints, notices or inquiries to the
Borrower or any of its Subsidiaries regarding potential liability
under any Environmental Law;
(iii) there have been no Releases of Hazardous
Materials at, on or under any property now or previously owned or
leased by the Borrower or any of its Subsidiaries that, singly or in the
aggregate, could have a Materially Adverse Effect;
(iv) the Borrower and its Subsidiaries have been
issued and are in compliance with all permits, certificates, approvals,
licenses and other authorizations relating to environmental matters and
necessary or desirable for their businesses;
(v) no property now or previously owned or leased
by the Borrower or any of its Subsidiaries is listed or proposed for
listing (with respect to owned property only) on the National Priorities
List pursuant to CERCLA, on the CERCLIS or on any similar state list
of sites requiring investigation or clean-up;
(vi) there are no underground storage tanks, active
or abandoned, including petroleum underground storage tanks, at, on or
under any property now or previously owned or leased by the Borrower
or any of its Subsidiaries that, singly or in the aggregate, could have a
Materially Adverse Effect;
(vii) neither the Borrower nor any of its Subsidiaries
has transported or arranged for the transportation of any Hazardous
Material to any location which is listed or proposed for listing on the
National Priorities List pursuant to CERCLA, on CERCLIS or on any
similar state list or which is the subject of federal, state or local
enforcement actions or other investigations which may lead to claims
against the Borrower or such Subsidiary for any remedial work, damage
to natural resources or personal injury, including without limitation,
claims under CERCLA; and
(viii) there are no polychlorinated biphenyls or friable
asbestos present at any property now or previously owned or leased by
the Borrower or any Subsidiary of the Borrower that, singly or in the
aggregate, could have a Materially Adverse Effect.
ARTICLE VI
COVENANTS
During the term of this Agreement, and for so long as the
principal of or interest on the Loans or the Notes, the fees or any other
expense or amount payable hereunder shall remain unpaid, unless the
Lender shall otherwise consent in writing:
6.1. Financial Reporting. The Borrower will maintain, for
itself and each Subsidiary, a system of accounting and books and
records established and administered in accordance with Agreement
Accounting Principles, and furnish to the Lender:
(i) Within one hundred twenty (120) days after the
close of each of its fiscal years, an unqualified audit report certified by
independent certified public accountants, acceptable to the Lender,
prepared in accordance with Agreement Accounting Principles on a
consolidated and consolidating basis (consolidating statements need not
be certified by such accountants) for itself and the Subsidiaries,
including without limitation balance sheets as of the end of such period,
related profit and loss and reconciliation of surplus statements, and a
statement of cash flows, accompanied by (a) any management letter
prepared by said accountants, (b) a certificate of said accountants that,
in the course of their examination necessary for their certification of the
foregoing, they have obtained no knowledge of any Default or
Unmatured Default, or if, in the opinion of such accountants, any
Default or Unmatured Default shall exist, stating the nature and status
thereof and (c) a letter from said accountants addressed to the Lender
acknowledging that the Lender is extending credit in primary reliance on
such financial statements and authorizing such reliance.
(ii) Within forty-five (45) days after the close of
each of the first three quarterly periods of each of its fiscal years, for
itself and the Subsidiaries, consolidated and consolidating unaudited
balance sheets as at the close of each such period and consolidated and
consolidating profit and loss and reconciliation of surplus statements and
a statement of cash flows for such quarter and for the period from the
beginning of such fiscal year to the end of such quarter, all certified by
the Borrower's Chief Financial Officer.
(iii) As soon as available, but in any event within
sixty (60) days after the beginning of each fiscal year of the Borrower, a
copy of the plan and forecast (including without limitation a projected
consolidated and consolidating balance sheet, income statement and
funds flow statement) of the Borrower and its Subsidiaries for such
fiscal year, certified by the Borrower's Chief Financial Officer.
(iv) Together with the financial statements required
hereunder, a compliance certificate in substantially the form of Exhibit
"D" hereto signed by the Borrower's Chief Financial Officer showing the
calculations necessary to determine compliance with this Agreement and
stating that no Default or Unmatured Default exists, or if any Default or
Unmatured Default exists, stating the nature and status thereof.
(v) Within two hundred seventy (270) days after
the close of each Plan year, a statement of the Unfunded Liabilities of
each Single Employer Plan.
(vi) As soon as possible and in any event within five
(5) days after the Borrower knows that any Reportable Event has
occurred with respect to any Plan, a statement, signed by the Chief
Financial Officer of the Borrower, describing said Reportable Event and
the action which the Borrower proposes to take with respect thereto.
(vii) Without limitation to Section 6.28 below, as
soon as possible and in any event within ten (10) days after receipt by
the Borrower, a copy of (a) any notice or claim to the effect that the
Borrower or any of its Subsidiaries is or may be liable to any Person as
a result of the Release by the Borrower, any of its Subsidiaries, or any
other Person of any Hazardous Materials into the environment, and (b)
any notice alleging any violation of any Environmental Law by the
Borrower or any of its Subsidiaries, which, in either case, could have a
Material Adverse Effect.
(viii) Promptly upon the furnishing thereof to the
shareholders of the Borrower, copies of all financial statements, reports
and proxy statements so furnished.
(ix) Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly or other regular
reports which the Borrower or any of its Subsidiaries files with the
Securities and Exchange Commission.
(x) Such other information (including without
limitation non-financial information) as the Lender may from time to
time reasonably request.
6.2. Use of Proceeds. The Borrower will, and will cause
each Subsidiary to, use the proceeds of the Loans to provide for their
respective working capital needs and for general corporate purposes, and
for no other purposes. The Borrower will not, nor will it permit any
Subsidiary to, use any of the proceeds of the Loans to purchase or carry
any Margin Stock.
6.3. Notice of Default. The Borrower will, and will cause
each Subsidiary to, give prompt notice in writing to the Lender of the
occurrence of any Default or Unmatured Default and of any other
development, financial or otherwise, which could have a Material
Adverse Effect.
6.4. Conduct of Business. The Borrower will, and will
cause each Subsidiary to, (i) carry on and conduct its business in
substantially the same manner and in substantially the same fields of
enterprise as it is presently conducted, (ii) do all things necessary to
remain duly incorporated, validly existing and in good standing as a
domestic corporation in its jurisdiction of incorporation and maintain all
requisite authority to conduct its business in each jurisdiction in which
its business is conducted, and (iii) do or cause to be done all things
necessary to preserve, renew and keep in full force and effect the rights,
licenses, registrations, authorizations, permits, franchises, patents,
copyrights, trademarks and tradenames material to the conduct of its
business.
6.5. Taxes. The Borrower will, and will cause each
Subsidiary to, pay when due all taxes, assessments and governmental
charges and levies upon it or its income, profits or Property, and pay all
charges for labor and materials which if unpaid might give rise to liens
on such Property, except those which are being contested in good faith
by appropriate proceedings and with respect to which adequate reserves
have been set aside.
6.6. Insurance. The Borrower will, and will cause each
Subsidiary to, maintain with financially sound and reputable insurance
companies insurance on all their Property in such amounts and covering
such risks and with such deductibles as is consistent with sound business
practice, including without limitation casualty, liability and worker's
compensation insurance, and the Borrower will furnish to the Lender
upon request full information as to the insurance carried and certificates
of insurance evidencing such insurance. All such insurance policies
shall contain provisions providing that the insurance shall not be
cancelable except on thirty (30) days' prior notice to the Lender.
6.7. Compliance with Laws. The Borrower will, and will
cause each Subsidiary to, comply with all laws, rules, regulations,
orders, writs, judgments, injunctions, decrees or awards to which it or its
Property may be subject, including without limitation, Environmental
Laws and ERISA.
6.8. Maintenance of Properties. The Borrower will, and
will cause each Subsidiary to, do all things necessary to maintain,
preserve, protect and keep its Property in good repair, working order and
condition, and make all necessary and proper repairs, renewals and
replacements so that its business carried on in connection therewith may
be properly conducted at all times.
6.9. Inspection. The Borrower will, and will cause each
Subsidiary to, permit the Lender, by its representatives and agents, to
inspect any of the Property, corporate books and financial records of the
Borrower and each Subsidiary, to examine and make copies of the books
of accounts and other financial records of the Borrower and each
Subsidiary, and to discuss the affairs, finances and accounts of the
Borrower and each Subsidiary with, and to be advised as to the same by,
their respective officers and independent public accountants at such
reasonable times and intervals as the Lender may designate.
6.10. Dividends. The Borrower will not, nor will it permit
any Subsidiary to, declare or pay, directly or indirectly any dividends or
make any other distributions, whether in cash or property, or a
combination thereof, on its capital stock (other than dividends payable in
its own capital stock) or redeem, repurchase or otherwise acquire or
retire any of its capital stock at any time outstanding, except that any
Subsidiary may declare and pay dividends to the Borrower or to a
Wholly-Owned Subsidiary of the Borrower.
6.11. Indebtedness. The Borrower will not, nor will it
permit any Subsidiary to, create, incur, assume or suffer to exist any
Indebtedness, except:
(i) The Loans.
(ii) Indebtedness existing on the date hereof and
described in Schedule "5.14" hereto.
(iii) Indebtedness incurred in the ordinary course of
business with respect to (a) customer deposits, trade payables and all
other unsecured current liabilities not the result of borrowing and not
evidenced by any note or any other similar instrument, provided that
Contingent Obligations with respect to accounts or notes receivables
sold by the Borrower or any Subsidiary shall not exceed $15,000,000 at
any one time, or (b) the acquisition of property, the aggregate principal
amount of which shall not exceed $2,000,000 at any one time.
6.12. Merger. The Borrower will not, nor will it permit any
Subsidiary to, merge, combine or consolidate with or into any other
Person, or purchase or otherwise acquire all or substantially all of the
assets of any other Person (except for an Acquisition valued (in the
Lender's judgment) at less than $2,000,000), except that a Subsidiary
may merge, combine or consolidate with the Borrower or a
Wholly-Owned Subsidiary of the Borrower.
6.13. Sale of Assets. The Borrower will not, nor will it
permit any Subsidiary to, lease, sell or otherwise dispose of its Property,
to any other Person except for (i) sales of inventory in the ordinary
course of business and (ii) leases, sales, or other dispositions of its
Property that, together with all other assets of the Borrower and its
Subsidiaries previously leased, sold or disposed of (other than inventory
in the ordinary course of business) as permitted by this Section during
the twelve (12) month period ending with the month in which any such
lease, sale or other disposition occurs, do not constitute a Substantial
Portion of the Property of the Borrower and its Subsidiaries and do not
adversely materially affect the business or operations of the Borrower or
its Subsidiaries.
6.14. Sale of Accounts. Except as permitted pursuant to
Section 6.11(iii)(a) above, the Borrower will not, nor will it permit any
Subsidiary to, sell or otherwise dispose of any notes receivable or
accounts receivable, with or without recourse.
6.15. Sale and Leaseback. The Borrower will not, nor will
it permit any Subsidiary to, sell or transfer any of its Property in order
to concurrently or subsequently lease as lessee such or similar Property.
6.16. Investments and Acquisitions. The Borrower will not,
nor will it permit any Subsidiary to, make or suffer to exist any
Investments (including without limitation, loans and advances to, and
other Investments in, Subsidiaries), or commitments therefor, or to
create any Subsidiary or to become or remain a partner in any
partnership or joint venture, or to make any Acquisition of any Person,
except:
(i) Short-term obligations of, or fully guaranteed
by, the United States of America.
(ii) Commercial paper rated A-l or better by
Standard and Poor's Corporation or P-l or better by Moody's Investors
Service, Inc.
(iii) Demand deposit accounts maintained in the
ordinary course of business.
(iv) Certificates of deposit issued by and time
deposits with commercial banks (whether domestic or foreign) having
capital and surplus in excess of $100,000,000.
(v) Existing Investments in Subsidiaries and other
Investments in existence on the date hereof and described in Schedule
"5.8" hereto.
(vi) Additional Investment or capital contributions
in Wibau-Astec subsequent to the date hereof not to exceed $5,000,000
in the aggregate.
(vii) Additional Investment in Wholly-Owned
Subsidiaries of the Borrower.
(viii) Such other Investments, subject to the
reasonable approval of the Lender.
6.17. Contingent Obligations. Except as permitted
pursuant to Section 6.11(iii)(a) above, the Borrower will not, nor will it
permit any Subsidiary to, make or suffer to exist any Contingent
Obligation (including without limitation, any Contingent Obligation with
respect to the obligations of a Subsidiary), except (i) by endorsement of
instruments for deposit or collection in the ordinary course of business
and (ii) the Guaranty.
6.18. Liens. The Borrower will not, nor will it permit any
Subsidiary to, create, incur, assume or suffer to exist any Lien in, of or
on the Property (now owned or hereafter acquired) or income of the
Borrower or any of its Subsidiaries, except:
(i) Liens for taxes, assessments or governmental
charges or levies on its Property in the ordinary course of business if the
same shall not at the time be delinquent or thereafter can be paid without
penalty, or are being contested in good faith and by appropriate
proceedings and for which adequate reserves in accordance with
Agreement Accounting Principles shall have been set aside on its books.
(ii) Liens imposed by law, such as carriers',
warehousemen's and mechanics' liens, and other similar liens arising in
the ordinary course of business which secure payment of obligations not
more than sixty (60) days past due or which are being contested in good
faith by appropriate proceedings and for which adequate reserves shall
have been set aside on its books.
(iii) Liens arising out of pledges or deposits under
worker's compensation laws, unemployment insurance, old age pensions,
or other social security or retirement benefits, or similar legislation.
(iv) Utility easements, building restrictions and
such other encumbrances or charges against real property as are of a
nature generally existing with respect to properties of a similar character
and which do not in any material way affect the marketability of the
same or interfere with the use thereof in the business of the Borrower or
the Subsidiaries.
(v) Liens existing on the date hereof and
described in Schedule "5.14" hereto.
(vi) Acquisitions valued (in the Lender's
judgment) at less than $2,000,000.
6.19. Fixed Asset Expenditures. The Borrower will not,
nor will it permit any Subsidiary to, expend, or be committed to expend,
in the acquisition of fixed assets, in excess of (i) $20,000,000 during the
fiscal year in which the date of this Agreement falls, and (ii)
$10,000,000 during any one subsequent fiscal year, calculated in each
case on a non-cumulative basis in the aggregate for the Borrower and its
Subsidiaries.
6.20. Rentals. The Borrower will not, nor will it permit
any Subsidiary to, create, incur, assume or suffer to exist obligations for
Rentals in excess of $3,000,000 during any one fiscal year on a
non-cumulative basis in the aggregate for the Borrower and its
Subsidiaries.
6.21. Letters of Credit. The Borrower will not, nor will it
permit any Subsidiary to, apply for or become liable upon any Letter of
Credit, except as provided herein and except for the Subsidiary Letters
of Credit.
6.22. Affiliates. The Borrower will not, and will not permit
any Subsidiary to, enter into any transaction (including without
limitation, the purchase or sale of any Property or service) with, or make
any payment or transfer to, any Affiliate except in the ordinary course of
business and pursuant to the reasonable requirements of the Borrower's
or such Subsidiary's business and upon fair and reasonable terms no
more or less favorable to the Borrower or such Subsidiary than the
Borrower or such Subsidiary would obtain in a comparable arms-length
transaction.
6.23. Amendments to Agreements. The Borrower will not,
and will not permit any Subsidiary to, amend or waive any term or
provision of its certificate or articles of incorporation or by-laws,
without in each case, the prior written consent of the Lender.
6.24. Subordinated Indebtedness. The Borrower will not,
and will not permit any Subsidiary to, make any amendment or
modification to the indenture, note or other agreement evidencing or
governing any Subordinated Indebtedness, or directly or indirectly
voluntarily prepay, defease or in substance defease, purchase, redeem,
retire or otherwise acquire, any Subordinated Indebtedness.
6.25. Intentionally Omitted.
6.26. Issuance of Stock. Except for the issuance of stock in
connection with certain employee stock option plans maintained by the
Borrower for the benefit of employees of the Borrower and the
Subsidiaries, the Borrower will not, and will not permit any Subsidiary
to, issue any capital stock (common or preferred, including without
limitation by way of sales of treasury stock) or any options or warrants
to purchase, or securities convertible into capital or common stock.
6.27. Accounting Method. The Borrower will not, and will
not permit any Subsidiary to, change its fiscal year or method of
accounting, except as required by Agreement Accounting Principles.
6.28. Environmental Covenant. The Borrower will, and
will cause each of its Subsidiaries to:
(i) use and operate all of its facilities and properties
in compliance with all Environmental Laws, keep all necessary
environmental permits, approvals, certificates and licenses in effect and
remain in compliance therewith, and handle all Hazardous Materials in
compliance with all applicable Environmental Laws;
(ii) immediately notify the Lender and provide
copies upon receipt of all written claims, complaints, notices or inquiries
relating to the environmental condition of its facilities and properties or
compliance with Environmental Laws, and promptly cure and have
dismissed with prejudice any such actions and proceedings to the
satisfaction of the Lender; and
(iii) provide such information and certifications
which the Lender may reasonably request from time to time to insure
compliance with this Section 6.28.
6.29. Litigation and Other Notices. The Borrower will, and
will cause each Subsidiary to, give the Lender prompt written notice of
the following:
(i) the issuance by any court or governmental
agency or authority of any injunction, order, decision or other restraint
prohibiting, or having the effect of prohibiting, the making of the Loan
or the initiation of any litigation or similar proceeding seeking any such
injunction, order or other restraint; and
(ii) the filing or commencement of any action, suit
or proceeding against the Borrower or any of its Subsidiaries whether at
law or in equity or by or before any court or any federal, state,
municipal or other governmental agency or authority and which, if
adversely determined against the Borrower or any of its Subsidiaries, as
the case may be, is likely to (in the Borrower's reasonable judgment)
result in liability in excess of $2,000,000 in the aggregate.
6.30. Current Ratio. The Borrower will maintain a ratio of
Consolidated Current Assets to Consolidated Current Liabilities of not
less than 1.50 to 1.0 at all times.
6.31. Minimum Tangible Net Worth. The Borrower will
maintain Consolidated Tangible Net Worth of not less than $50,000,000
plus fifty percent (50%) of Cumulative Consolidated Net Income
subsequent to December 31, 1993 at all times.
6.32. Leverage Ratio. The Borrower will maintain a ratio
of (i) Consolidated Funded Debt to (ii) the sum of Consolidated Funded
Debt and Consolidated Net Worth, of not more than .50 to 1.0 at all
times.
6.33. Fixed Charge Coverage Ratio. The Borrower will
not, as at the last day of any fiscal quarter, permit the ratio of (i) its
Consolidated Income Available for Fixed Charges to (ii) its
Consolidated Fixed Charges, in each case for the preceding four (4)
fiscal quarters (including the quarter in which the determination date
falls), to be less than 2.50 to 1.0.
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
7.1. Any representation or warranty made or deemed made
by or on behalf of the Borrower or any of its Subsidiaries to the Lender
under or in connection with this Agreement, any Loan, or any other
Loan Documents, or any certificate or information delivered in
connection with this Agreement or any other Loan Document, shall be
materially false or misleading when made.
7.2. Nonpayment of principal of the Note when due, or
nonpayment of interest upon the Note or of the Arrangement or
Commitment Fees or other monetary obligations under any of the Loan
Documents within five days (5) after the same becomes due.
7.3. The breach by the Borrower of any of the terms or
provisions of any of Sections 6.4, 6.10, 6.11, 6.12, 6.13, 6.16, 6.26,
6.30, 6.31, 6.32 or 6.33 above.
7.4. The breach by the Borrower (other than a breach
which constitutes a Default under Sections 7.1, 7.2 or 7.3 above) of any
of the terms or provisions of this Agreement which is not remedied
within twenty (20) days after written notice from the Lender, provided
that if such breach is not capable of being cured within such twenty (20)
day period, such cure period shall be extended for a period of sixty (60)
additional days so long as the Borrower has diligently begun to cure
such breach and diligently pursues such cure thereafter.
7.5. Failure of the Borrower, any of its Subsidiaries or
any Guarantor to pay any Indebtedness for borrowed money (or any
other Indebtedness in excess of $500,000, individually or in the
aggregate) when due; or the default by the Borrower, any of its
Subsidiaries or any Guarantor in the performance of any term, provision
or condition contained in any agreement under which any such
Indebtedness was created or is governed, after the expiration of all
applicable cure periods; or any other event shall occur or condition exist,
the effect of which is to cause, or to permit the holder or holders of such
Indebtedness to cause, such Indebtedness to become due prior to its
stated maturity; or any such Indebtedness of the Borrower, any of its
Subsidiaries or any Guarantor shall be declared to be due and payable or
required to be prepaid (other than by a regularly scheduled payment)
prior to the stated maturity thereof; or the Borrower, any of its
Subsidiaries or any Guarantor shall not pay, or admit in writing its
inability to pay, its debts generally as they become due.
7.6. The Borrower, any of its Subsidiaries or any
Guarantor shall (i) have an order for relief entered with respect to it
under the Federal bankruptcy laws as now or hereafter in effect or
similar state laws, (ii) make an assignment for the benefit of creditors,
(iii) apply for, seek, consent to, or acquiesce in, the appointment of a
receiver, custodian, trustee, examiner, liquidator or similar official for it
or any Substantial Portion of its Property, (iv) institute any proceeding
seeking an order for relief under the Federal bankruptcy laws as now or
hereafter in effect or similar state laws, or seeking to adjudicate it a
bankrupt or insolvent, or seeking dissolution, winding up, liquidation,
reorganization, arrangement, adjustment or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or fail to file an answer or other pleading denying, or
file an answer admitting the material allegations of any such proceeding
filed against it, (v) take any corporate action to authorize or effect any of
the foregoing actions set forth in this Section 7.6 or (vi) fail to contest in
good faith any appointment or proceeding described in Section 7.7
below.
7.7. Without the application, approval or consent of the
Borrower, any of its Subsidiaries or any Guarantor, a receiver, trustee,
examiner, liquidator or similar official shall be appointed for the
Borrower, any of its Subsidiaries or any Guarantor or any Substantial
Portion of their respective Property, or a proceeding described in Section
7.6(iv) above shall be instituted against the Borrower or any of its
Subsidiaries or any Guarantor and such appointment continues
undischarged or such proceeding continues undismissed or unstayed for
a period of sixty (60) consecutive days.
7.8. Any court, government or governmental agency shall
condemn, seize or otherwise appropriate, or take custody or control of
(each a "Condemnation"), all or any portion of the Property of the
Borrower or its Subsidiaries which, when taken together with all other
Property of the Borrower and its Subsidiaries so condemned, seized,
appropriated, or taken custody or control of, during the twelve (12)
month period ending with the month in which any such Condemnation
occurs, constitutes a Substantial Portion of such Property.
7.9. The Borrower or any of its Subsidiaries shall fail
within thirty (30) days to pay, bond or otherwise discharge any judgment
or order for the payment of money in excess of $500,000, which is not
stayed on appeal or otherwise being appropriately contested in good
faith.
7.10. The Unfunded Liabilities of all Single Employer
Plans shall exceed in the aggregate $5,000,000 or any Reportable Event
shall occur in connection with any Plan.
7.11. The Borrower or any other member of the Controlled
Group shall have been notified by the sponsor of a Multiemployer Plan
that it has incurred withdrawal liability to such Multiemployer Plan in
an amount which, when aggregated with all other amounts required to be
paid to Multiemployer Plans by the Borrower or any other member of
the Controlled Group as withdrawal liability (determined as of the date
of such notification), exceeds $500,000 or requires payments exceeding
$100,000 per annum.
7.12. The Borrower or any other member of the Controlled
Group shall have been notified by the sponsor of a Multiemployer Plan
that such Multiemployer Plan is in reorganization or is being terminated,
within the meaning of Title IV of ERISA, if as a result of such
reorganization or termination the aggregate annual contributions of the
Borrower and the other members of the Controlled Group (taken as a
whole) to all Multiemployer Plans which are then in reorganization or
being terminated have been or will be increased over the amounts
contributed to such Multiemployer Plans for the respective plan years of
each such Multiemployer Plan immediately preceding the plan year in
which the reorganization or termination occurs by an amount exceeding
$1,000,000.
7.13. Any Change in Control shall occur.
7.14. The occurrence of any "default", as defined in any
Loan Document (other than this Agreement) or the breach of any of the
terms or provisions of any Loan Document (other than this Agreement),
which default or breach continues beyond any period of grace therein
provided.
7.15. Nonpayment by the Borrower of any Rate Hedging
Obligation or the breach by the Borrower of any term, provision or
condition contained in any agreement, device or arrangement giving rise
to any Rate Hedging Obligation.
7.16. The Guaranty shall fail to remain in full force or
effect or any action shall be taken to discontinue or to assert the
invalidity or unenforceability of the Guaranty, or any Guarantor shall
fail to comply with any of the terms or provisions of the Guaranty, or
any Guarantor denies that it has any further liability under the Guaranty,
or gives notice to such effect.
7.17. An event shall have occurred that could give rise to a
Material Adverse Effect.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. Acceleration. If any Default described in Sections 7.6
or 7.7 above occurs with respect to the Borrower, any of its Subsidiaries
or any Guarantor, the Commitment and the obligations of the Lender to
make Loans hereunder shall automatically terminate and the Obligations
shall immediately become due and payable without any election or
action on the part of the Lender. If any other Default occurs, the Lender
may terminate or suspend the Commitment and its obligations to make
Loans hereunder, or declare the Obligations to be due and payable, or
both, whereupon the Obligations shall become immediately due and
payable, without presentment, demand, protest or notice of any kind, all
of which the Borrower hereby expressly waives.
8.2. Amendments. Subject to the provisions of this Article
VIII, the Lender and the Borrower may enter into agreements
supplemental hereto for the purpose of adding or modifying any
provisions to the Loan Documents or changing in any manner the rights
of the Lender or the Borrower hereunder or waiving any Default
hereunder.
8.3. Preservation of Rights. No delay or omission of the
Lender to exercise any right under the Loan Documents shall impair
such right or be construed to be a waiver of any Default or an
acquiescence therein, and the making of a Loan notwithstanding the
existence of a Default or the inability of the Borrower to satisfy the
conditions precedent to such Loan shall not constitute any waiver or
acquiescence. Any single or partial exercise of any such right shall not
preclude other or further exercise thereof or the exercise of any other
right, and no waiver, amendment or other variation of the terms,
conditions or provisions of the Loan Documents whatsoever shall be
valid unless in writing signed by the Lender, and then only to the extent
in such writing specifically set forth. All remedies contained in the Loan
Documents or by law afforded shall be cumulative and all shall be
available to the Lender until the Obligations have been paid and
performed in full.
8.4. Setoff. In addition to, and without limitation of, any
rights of the Lender under applicable law and provided herein or in the
other Loan Documents, if the Borrower becomes insolvent, however
evidenced, or any Default or Unmatured Default occurs, any and all
deposits (including all account balances, whether provisional or final
and whether or not collected or available) and any other Indebtedness at
any time held or owing by the Lender to or for the credit or account of
the Borrower may be offset and applied toward the payment of the
Obligations owing to the Lender, whether or not the Obligations, or any
part hereof, shall then be due.
ARTICLE IX
GENERAL PROVISIONS
9.1. Survival of Covenants, Representations. All
covenants, agreements, representations and warranties of the Borrower
contained in this Agreement shall survive delivery of the Note and the
making of the Loans herein contemplated.
9.2. Governmental Regulation. Anything contained in this
Agreement to the contrary notwithstanding, the Lender shall not be
obligated to extend credit to the Borrower in violation of any limitation
or prohibition provided by any applicable statute or regulation.
9.3. Taxes. Any taxes (excluding federal income taxes on
the overall net income of the Lender) or other similar assessments or
charges made by any governmental or revenue authority in respect of the
Loan Documents shall be paid by the Borrower, together with interest
and penalties, if any.
9.4. Headings. Section headings in the Loan Documents
are for convenience of reference only, and shall not govern the
interpretation of any of the provisions of the Loan Documents.
9.5. Entire Agreement. The Loan Documents embody the
entire agreement and understanding between the Borrower and the
Lender and supersede all prior agreements and understandings between
the Borrower and the Lender relating to the subject matter thereof.
9.6. Benefits of this Agreement. This Agreement shall not
be construed so as to confer any right or benefit upon any Person other
than the parties to this Agreement and their respective successors and
assigns.
9.7. Expenses; Indemnification. The Borrower shall
reimburse the Lender for any and all costs, internal charges and
out-of-pocket expenses (including without limitation attorneys' fees and
time charges of attorneys for the Lender, which attorneys may be
employees of the Lender) paid or incurred by the Lender in connection
with the preparation, negotiation, execution, delivery, review,
amendment, modification, administration, collection, and enforcement of
the Loan Documents. The Borrower further agrees to indemnify and
release the Lender, its directors, officers and employees against all
losses, claims, damages, penalties, judgments, liabilities and expenses
(including without limitation, all expenses of litigation or preparation
therefor whether or not the Lender is a party thereto) which any of them
may pay or incur arising out of or relating to (i) this Agreement, (ii) the
other Loan Documents, (iii) the transactions contemplated hereby, (iv)
the direct or indirect application or proposed application of the proceeds
of any Loan hereunder, (v) the Release of Hazardous Materials in, onto
or from the Borrower's or its Subsidiaries' owned or leased property and
(vi) any violation of Environmental Laws. The obligations of the
Borrower under this Section shall survive the termination of this
Agreement and the payment and performance of the Obligations.
9.8. Accounting. Except as provided to the contrary
herein, all accounting terms used herein shall be interpreted and all
accounting determinations hereunder shall be made in accordance with
Agreement Accounting Principles.
9.9. Severability of Provisions. Any provision in any
Loan Document that is held to be inoperative, unenforceable, or invalid
in any jurisdiction shall, as to that jurisdiction, be inoperative,
unenforceable, or invalid without affecting the remaining provisions in
that jurisdiction or the operation, enforceability, or validity of that
provision in any other jurisdiction, and to this end the provisions of all
Loan Documents are declared to be severable.
9.10. Nonliability of the Lender. The relationship between
the Borrower and the Lender shall be solely that of borrower and lender.
The Lender shall not have any fiduciary responsibilities to the
Borrower. The Lender does not hereby undertake any responsibility to
the Borrower to review or inform the Borrower of any matter in
connection with any phase of the Borrower's or its Subsidiaries'
businesses or operations.
9.11. CHOICE OF LAW. THE LOAN DOCUMENTS
(OTHER THAN THOSE CONTAINING A CONTRARY EXPRESS
CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE
LAW OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO
NATIONAL BANKS.
9.12. CONSENT TO JURISDICTION. THE
BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO
IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENTS AND THE
BORROWER HEREBY IRREVOCABLY AGREES THAT ALL
CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING
MAY BE HEARD AND DETERMINED IN ANY SUCH COURT
AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW
OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT
OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE LENDER
TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE
COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL
PROCEEDING BY THE BORROWER AGAINST THE LENDER
OR ANY AFFILIATE OF THE LENDER INVOLVING, DIRECTLY
OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT
OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN
CHICAGO, ILLINOIS.
9.13. WAIVER OF JURY TRIAL. THE BORROWER
AND THE LENDER HEREBY EXPRESSLY, KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE TRIAL BY
JURY IN ANY ACTION OR PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER
SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
ANY LOAN DOCUMENT OR THE RELATIONSHIP
ESTABLISHED HEREUNDER AND THEREUNDER. THE TERMS
AND PROVISIONS OF THIS SECTION CONSTITUTE A
MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO
THIS AGREEMENT.
9.14. Interest Limitation. Anything in this Agreement, the
Note or any other Loan Document to the contrary notwithstanding, the
Borrower shall never be required to pay interest at a rate in excess of the
highest lawful rate, and if the effective rate of interest that would
otherwise be payable under this Agreement, the Note or any other Loan
Document would exceed the highest lawful rate, or if any holder of the
Note shall receive monies that are deemed to constitute interest which
would increase the effective rate of interest payable under this
Agreement, the Note or any other Loan Document to a rate in excess of
the highest lawful rate, then (i) the amount of interest that would
otherwise be payable under this Agreement, the Note and the other Loan
Documents shall be reduced to the amount allowed under applicable
law, and (ii) any interest paid in excess of the highest lawful rate shall,
at the option of the holder of the Note, be either refunded to the payor or
credited on the principal of the Note.
9.15. Loan Documents. In the event of any conflict or
inconsistency between the terms and provisions of this Agreement and
those of any other Loan Document, the terms and provisions of this
Agreement shall govern and control to the extent of such conflict or
inconsistency.
9.16. Interpretation. In this Agreement and each other
Loan Document, unless a clear contrary intention appears:
(i) The singular number includes the plural
number and vice versa;
(ii) Reference to any Person includes such
Person's successors and assigns but, if applicable, only if such
successors and assigns are permitted by the Loan Documents, and
reference to a Person in a particular capacity excludes such Person in
any other capacity;
(iii) reference to either gender includes the other
gender;
(iv) reference to any agreement (including this
Agreement and the Schedules and Exhibits and the other Loan
Documents), document or instrument means such agreement, document
or instrument as amended or modified and in effect from time to time in
accordance with the terms thereof and, if applicable, the terms hereof
and the other Loan Documents, and reference to any promissory note
includes any promissory note which is an extension or renewal thereof or
a substitute or replacement therefor; and
(v) reference to any law, rule, regulation, order,
decree, requirement, policy, guideline, directive or interpretation means
as amended, modified, codified, replaced or reenacted, in whole or in
part, and in effect on the determination date, including rules and
regulations promulgated thereunder.
ARTICLE X
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
10.1. Successors and Assigns. The terms and provisions of
the Loan Documents shall be binding upon and inure to the benefit of the
Borrower and the Lender and their respective successors and assigns,
except that (i) the Borrower shall not have the right to assign its rights or
obligations under the Loan Documents and (ii) any assignment by the
Lender must be made in compliance with Section 10.3. Notwithstanding
clause (ii) of this Section, the Lender may at any time, without the
consent of the Borrower, assign all or any portion of its rights under this
Agreement and the Note to a Federal Reserve Bank; provided, however,
that no such assignment shall release the Lender from its obligations
hereunder. Any assignee or transferee of the Note agrees by acceptance
thereof to be bound by all the terms and provisions of the Loan
Documents. Any request, authority or consent of any Person, who at the
time of making such request or giving such authority or consent is the
holder of the Note, shall be conclusive and binding on any subsequent
holder, transferee or assignee of the Note or of any Note or Notes issued
in exchange therefor.
10.2. Participations.
10.2.1. Permitted Participants; Effect. The Lender
may, in the ordinary course of its business and in accordance with
applicable law, at any time sell to one or more banks or other entities
("Participants") participating interests in any Loan owing to the Lender,
any Note held by the Lender, any Commitment of the Lender or any
other interest of the Lender under the Loan Documents. In the event of
any such sale by the Lender of participating interests to a Participant,
the Lender's obligations under the Loan Documents shall remain
unchanged, the Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, the Lender shall
remain the holder of any such Note for all purposes under the Loan
Documents, all amounts payable by the Borrower under this Agreement
shall be determined as if the Lender had not sold such participating
interests, and the Borrower shall continue to deal solely and directly
with the Lender in connection with the Lender's rights and obligations
under the Loan Documents.
10.2.2. Voting Rights. The Lender shall retain the
sole right to approve, without the consent of any Participant, any
amendment, modification or waiver of any provision of the Loan
Documents other than any amendment, modification or waiver with
respect to any Loan or Commitment in which such Participant has an
interest which forgives principal, interest or fees or reduces the interest
rate or fees payable with respect to any such Loan or Commitment,
postpones any date fixed for any regularly-scheduled payment of
principal of, or interest or fees on, any such Loan or Commitment,
releases any guarantor of any such Loan or releases any substantial
portion of the collateral, if any, securing any such Loan.
10.2.3. Benefit of Setoff. The Borrower agrees that
each Participant shall be deemed to have the right of setoff provided in
Section 8.4 below in respect of its participating interest in amounts
owing under the Loan Documents to the same extent as if the amount of
its participating interest were owing directly to it as a Lender under the
Loan Documents, provided that the Lender shall retain the right of setoff
provided in Section 8.4 below with respect to the amount of
participating interests sold to each Participant.
10.3. Assignments.
10.3.1. Permitted Assignments. The Lender may, in
the ordinary course of its business and in accordance with applicable
law, at any time assign to one or more banks or other entities
("Purchasers") all or any part of its rights and obligations under the
Loan Documents. The Borrower hereby agrees to execute any
amendment and/or any other document that may be necessary to
effectuate such an assignment. Unless a Default has occurred and is
continuing, the consent of the Borrower shall be required prior to an
assignment becoming effective with respect to a Purchaser which is not
an Affiliate of the Lender.
10.3.2. Effect; Effective Date. Upon delivering to
the Borrower a notice of assignment and obtaining the consent required
by Section 10.3.1, the assignment shall become effective on the effective
date specified in such notice of assignment. The notice of assignment
shall contain a representation by the Purchaser to the effect that none of
the consideration used to make the purchase of the Commitment and
Loans under the applicable assignment agreement are "plan assets" as
defined under ERISA and that the rights and interests of the Purchaser
in and under the Loan Documents will not be "plan assets" under
ERISA. On and after the effective date of such assignment, the
Purchaser shall for all purposes be a party to this Agreement and any
other Loan Document executed by the Lender and shall have all the
rights and obligations of the Lender under the Loan Documents, to the
same extent as if it were an original party hereto, and no further consent
or action by the Borrower shall be required to release the Lender with
respect to the percentage of the Commitment and Loans assigned to such
Purchaser. Upon the consummation of any assignment to a Purchaser
pursuant to this Section 10.3.2, the Lender and the Borrower shall make
appropriate arrangements so that a replacement Note is issued to the
Lender and a new Note or, as appropriate, a replacement Note, is issued
to the Purchaser, in each case in principal amounts reflecting their
respective Commitments, as adjusted pursuant to such assignment.
10.4. Dissemination of Information. The Borrower
authorizes the Lender to disclose to any Participant or Purchaser or any
other Person acquiring an interest in the Loan Documents by operation
of law (each a "Transferee") and any prospective Transferee any and all
information in the Lender's possession concerning the creditworthiness
of the Borrower and its Subsidiaries. The Lender agrees that it will use
reasonable efforts to keep confidential all such information supplied to
the Lender by the Borrower, to the extent that such information is not
and does not become publicly available through or with the consent or
acquiescence of the Borrower, except for disclosure (i) to legal counsel,
accountants, other professional advisors to the Lender and regulatory
officials, (ii) as required by law, regulation or legal process, (iii) in
connection with any legal proceeding to which the Lender is a party and
(iv) to Participants, Purchasers and potential participants and purchasers
of an interest in the Loan, provided that such purchasers and
participants agree to be similarly bound by the provisions of this Section
10.4.
10.5. Tax Treatment. If any interest in any Loan
Document is transferred to any Transferee that is organized under the
laws of any jurisdiction other than the United States or any State thereof,
the Lender shall cause such Transferee, concurrently with the
effectiveness of such transfer, to deliver to the Borrower two (2) duly
completed copies of United States Internal Revenue Service Form 1001
or 4224, certifying in either case that such Transferee is entitled to
receive payments under this Agreement and the Note, or any Note or
Notes issued in exchange therefor, without deduction or withholding of
any United States federal income taxes.
ARTICLE XI
NOTICES
11.1. Giving Notice. Except as otherwise permitted by
Section 2.12 with respect to Borrowing Notices, all notices and other
communications provided to any party hereto under this Agreement or
any other Loan Document shall be in writing or by telex or by facsimile
and addressed or delivered to such party at its address set forth below its
signature hereto or at such other address as may be designated by such
party in a notice to the other parties. Any notice, if mailed and properly
addressed with postage prepaid, shall be deemed given when received;
any notice, if transmitted by telex or facsimile, shall be deemed given
when transmitted (answerback confirmed in the case of telexes).
11.2. Change of Address. The Borrower and the Lender
may each change the address for service of notice upon it by a notice in
writing to the other parties hereto.
ARTICLE XII
COUNTERPARTS
This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement,
and either of the parties hereto may execute this Agreement by signing
any such counterpart.
IN WITNESS WHEREOF, the Borrower and the Lender have
executed this Agreement as of the date first above written.
ASTEC
INDUSTRIES, INC.
By:
Print
Name:
Title:
4101
Jerome Avenue
Chattanooga, Tennessee 37407
Telecopy No. (615) 867-4127
Attention: Albert Guth
THE FIRST
NATIONAL BANK OF CHICAGO
By:
Print
Name:
Title:
One
First National Plaza
Chicago, Illinois 60670
Telecopy No. (312) 732-7101
Attention: John Runger
EXHIBIT "A"
NOTE
Chicago, Illinois
$15,000,000
FOR VALUE RECEIVED, ASTEC INDUSTRIES, INC., a
Tennessee corporation (the "Borrower"), promises to pay to the order of
THE FIRST NATIONAL BANK OF CHICAGO (the "Lender") the
lesser of the principal sum of FIFTEEN MILLION AND NO/100
UNITED STATES DOLLARS (U.S. $15,000,000) or the aggregate
unpaid principal amount of all Loans made by the Lender to the
Borrower pursuant to Article II of the Credit Agreement of even date
herewith (as the same may be amended or modified, the "Agreement")
executed by the Borrower and the Lender, in lawful money of the United
States in immediately available funds at the main office of the Lender in
Chicago, Illinois, together with interest on the unpaid principal amount
hereof at the rates and on the dates set forth in the Agreement. The
Borrower shall pay the principal of and accrued and unpaid interest on
the Loans in full on the Facility Termination Date and shall make such
mandatory payments as are required to be made under the terms of
Article II of the Agreement. Capitalized terms used herein and not
otherwise defined herein are used with the meanings attributed to them in
the Agreement.
The Lender is hereby authorized to record on the schedule
attached hereto, or to otherwise record in accordance with its usual
practice, the principal amount and date of each of the Loans and the date
and amount of each principal and interest payment hereunder, and such
other reasonable information, provided, however, that the failure to so
record (or any error in such recording) shall not affect the Borrower's
obligations under this Note or the other Loan Documents.
This Note is issued pursuant to, and is entitled to the benefits of
the Agreement, to which Agreement, as it may be amended, reference is
hereby made for a statement of the terms and conditions governing this
Note, including without limitation the terms and conditions under which
this Note may be prepaid or its maturity date accelerated.
The Borrower hereby waives any rights to receive any notice or
demand not expressly provided in this Note or the Agreement with
respect to the Borrower's obligations hereunder.
This Note shall be governed by and construed in accordance
with the law of the State of Illinois, without giving effect to Illinois
choice of law principles.
ASTEC
INDUSTRIES, INC., a Tennessee corporation
By:
Print Name:
Title:
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE OF ASTEC INDUSTRIES, INC.,
DATED JULY 20, 1994
Date
Principal
Amount and Type
of
Loan
Maturity
of Interest
Period
Principal
Amount
Paid
Interest
Paid
Unpaid
Balance
EXHIBIT "B"
, 1994
The First National Bank of Chicago
One First National Plaza
Chicago, Illinois 60670
In Re: $15,000,000 Credit Facility dated , 1994 from
The First National Bank of Chicago (the "Bank") to
Astec Industries, Inc. (the "Loan")
Ladies and Gentlemen:
We have acted as counsel for Astec Industries, Inc., a Tennessee
corporation (the "Company"), and for its subsidiaries, Telsmith, Inc., a
Delaware corporation ("Telsmith"), Heatec, Inc., a Tennessee
corporation ("Heatec"), Roadtec, Inc., a Tennessee corporation
("Roadtec"), Trencor, Inc., a Texas corporation ("Trencor"), Astec
Transportation, Inc., a Tennessee corporation ("Astec Transportation"),
and Astec Corporation, a Tennessee corporation ("Astec Corp." --
Telsmith, Heatec, Roadtec, Trencor, Astec Transportation and Astec
Corp. are collectively referred to herein as the "Subsidiaries"), in
connection with the execution and delivery of the following documents:
(i) a Credit Agreement dated as of , 1994
("Agreement") executed by the Company and the
Bank;
(ii) a Note dated , 1994 made by the Company in
the amount of the Loan made payable to the Bank;
(iii) a Guaranty of Payment dated as of , 1994
executed by each of the Subsidiaries; and
(iv) a Termination Agreement dated as of , 1994
executed by the Company, the Bank and NationsBank
of Georgia, National Association.
Documents (i) - (iv) above are hereinafter referred to as the "Loan
Documents". All capitalized terms used in this opinion and not
otherwise defined shall have the meanings attributed to them in the
Agreement.
We have examined the Company's and each Subsidiary's
certified articles of incorporation, by-laws and resolutions, certificates of
good standing for the Company and each Subsidiary, the Loan
Documents and such other documents and matters of fact and law which
we deem necessary in order to render this opinion.
We have assumed:
(i) the due execution and delivery, pursuant to due
authorization, of the Loan Documents by the parties
thereto other than the Company and the Subsidiaries;
(ii) the genuineness of the signatures of all persons
signing the documents in connection with the
transactions with respect to which this opinion is
rendered, other than the signatures of persons signing
on behalf of the Company or the Subsidiaries;
(iii) the authenticity of all documents submitted to us as
originals; and
(iv) the conformity to authentic original documents of all
documents submitted to us as certified, conformed or
photostatic copies.
Based upon the foregoing, it is our opinion that:
1. Each of the Company and each Subsidiary is a
corporation, duly organized, validly existing and in good standing under
the laws of their respective states of incorporation and duly qualified and
in good standing as foreign corporations authorized to do business in
each jurisdiction where, because of the nature of their respective
activities or properties, such qualification is required, except where the
failure to so qualify in a jurisdiction where qualification is necessary will
not have a Material Adverse Effect.
2. The execution and delivery of the Loan Documents by
the Company and each Subsidiary, as applicable, and the performance
by the Company and each Subsidiary of their respective obligations
thereunder, including without limitation, the Obligations, have been duly
authorized by all necessary corporate action and proceedings on the part
of the Company and each Subsidiary and will not:
a. require any consent of the
Company's or such Subsidiary's
shareholders;
b. violate any law, rule, regulation,
order, writ, judgment, injunction,
decree or award binding on the
Company or such Subsidiary or the
Company's or such Subsidiary's
articles of incorporation or by-laws
or any indenture, instrument or
agreement binding upon the
Company or such Subsidiary; or
c. result in, or require, the creation or
imposition of any Lien pursuant to
the provisions of any indenture,
instrument or agreement binding
upon the Company or such
Subsidiary.
3. The Loan Documents have been duly executed and
delivered by the Company and each Subsidiary, as applicable, and
constitute legal, valid and binding obligations of the Company and each
Subsidiary, as applicable, enforceable in accordance with their
respective terms, except to the extent the enforcement thereof may be
limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally and subject also to the
availability of equitable remedies if equitable remedies are sought.
4. Except as disclosed in the consolidated financial
statements of the Company and the Subsidiaries, there is no actual,
pending or threatened action, litigation, proceeding or investigation
against the Company or any Subsidiary which, if adversely determined,
could have a Material Adverse Effect.
5. No approval, authorization, consent, adjudication or
order of any governmental authority which has not been obtained by the
Company or any Subsidiary is required to be obtained by the Company
or any Subsidiary in connection with the execution and delivery of the
Loan Documents, the borrowings under the Agreement or the
performance and payment by the Company or any Subsidiary of its
obligations under the Loan Documents.
6. The Obligations constitute senior indebtedness which
is entitled to the benefits of the subordination provisions of all
outstanding Subordinated Indebtedness.
This legal opinion is rendered solely for the benefit of and may
be relied upon by the Bank and its participants, assignees and other
transferees and may not be relied upon by any other party without our
prior written consent.
Yours very truly,
By:
EXHIBIT "C"
LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION
To The First National Bank of Chicago
One First National Plaza
Chicago, Illinois 60670
Re: Credit Agreement, dated __________, 1994 (as the same may
be amended or modified, the "Credit Agreement"), between
Astec Industries, Inc. (the "Borrower") and The First National
Bank of Chicago (the "Lender")
Terms used herein and not otherwise defined shall have the
meanings assigned thereto in the Credit Agreement.
The Lender is specifically authorized and directed to act upon
the following standing money transfer instructions with respect to the
proceeds of Loans or other extensions of credit from time to time until
receipt by the Lender of a specific written revocation of such
instructions by the Borrower, provided, however, that the Lender may
otherwise transfer funds as hereafter directed in writing by the Borrower
in accordance with Section 11.1 of the Credit Agreement or based on
any telephonic notice made in accordance with Section 2.12 of the Credit
Agreement.
Facility Identification Number(s)
Customer/Account Name
Transfer Funds To
For Account No.
Reference/Attention To
Authorized Officer (Customer
Representative) Date
(Please Print) Signature
Bank Officer Name Date
(Please Print) Signature
(Deliver Completed Form to Credit Support Staff For Immediate
Processing)
EXHIBIT "D"
COMPLIANCE CERTIFICATE
To: The First National Bank of Chicago
One First National Plaza
Chicago, Illinois 60670
This Compliance Certificate is furnished pursuant to that certain
Credit Agreement dated as of __________, 1994, between the Borrower
and The First National Bank of Chicago (as amended or modified and in
effect from time to time, the "Agreement"). Unless otherwise defined
herein, the terms used in this Compliance Certificate have the meanings
ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected Chief Financial Officer of the
Borrower;
2. I have reviewed the terms of the Agreement and I have made,
or have caused to be made under my supervision, a detailed review of
the transactions and conditions of the Borrower and its Subsidiaries
during the accounting period covered by the attached financial
statements;
3. The examinations described in paragraph 2 did not disclose,
and I have no knowledge of, the existence of any condition or event
which constitutes a Default or Unmatured Default during or at the end
of the accounting period covered by the attached financial statements or
as of the date of this Certificate, except as set forth below; and
4. Schedule I attached hereto sets forth financial data and
computations evidencing the Borrower's compliance with certain
covenants of the Agreement, all of which data and computations are
true, complete and correct.
Described below are the exceptions, if any, to paragraph 3 by
listing, in detail, the nature of the condition or event, the period during
which it has existed and the action which the Borrower has taken, is
taking, or proposes to take with respect to each such condition or event: .
The foregoing certifications, together with the computations set
forth in Schedule I hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this day of
, 19 .
ASTEC
INDUSTRIES, INC.
By:
Its: Chief
Financial Officer
SCHEDULE I TO COMPLIANCE CERTIFICATE
Schedule of Compliance as of with
Provisions of and of
the Agreement
SCHEDULE "2.18"
EXISTING LETTERS OF CREDIT
(See Section 2.18)
Letter of Stated Amount Account
Credit Number as of 7/20/94 Party Beneficiary
00315394 $15,000.00 Astec Industries, Inc. Transplatinum Service Corp.
00315463 $1,024,997.00 Astec Industries, Inc. Safeco Insurance Co.
00315655 $70,226.64 Astec Industries, Inc. China National Machinery
Import
00315399 $45,308.34 Trencor-Jetco, Inc. UBAF Arab American Bank
00315519 $4,623.00 Trencor-Jetco, Inc. UBAF Arab American Bank
00315546 $430,323.08 Trencor-Jetco, Inc. Haitai International, Inc.
00315689 $100,000.00 Trencor-Jetco, Inc. UBAF Arab American Bank
00315693 $45,308.34 Trencor-Jetco, Inc. UBAF Arab American Bank
00315541 $100,000.00 Telsmith, Inc. City of Mequon
SCHEDULE "5.7"
LITIGATION AND CONTINGENT
OBLIGATIONS
(See Section 5.7)
SCHEDULE "5.8"
SUBSIDIARIES AND OTHER INVESTMENTS
(See Sections 5.8 and 6.16)
SUBSIDIARIES
Investment Owned Percent Juisdiction of
In By Ownership Organization
Heatec, Inc. Astec 100% Tennessee
Industries,
Inc.
Roadtec, Inc. Astec 100% Tennessee
Industries,
Inc.
Trencor Jetco, Inc. Astec Industries, 100% Texas
Inc.
Telsmith, Inc. Astec Industries,Inc. 100% Delaware
Astec Astec
Transportation, Inc. Industries, Inc. 100% Tennessee
Astec Corporation Astec Industries,Inc. 100% Tennessee
OTHER INVESTMENTS
None.
SCHEDULE "5.14"
INDEBTEDNESS AND LIENS
(See Sections 5.14, 6.11 and 6.18)
Maturity
Indebtedness Indebtedness Property and Amount
Incurred By Owed To Encumbrances (If Any) of
Indebtedness
SCHEDULE "5.22"
ENVIRONMENTAL MATTERS
(See Section 5.22)
CREDIT AGREEMENT
BY AND BETWEEN
THE FIRST NATIONAL BANK OF CHICAGO
One First National Plaza
Chicago, Illinois 60670
AND
ASTEC INDUSTRIES, INC.
4101 Jerome Avenue
Chattanooga, Tennessee 37407
Dated as of July 20, 1994
TABLE OF CONTENTS
ARTICLE I DEFINITIONS 1
ARTICLE II THE CREDITS 10
2.1. Commitment 10
2.2. Required Payments; Termination 11
2.3. Types of Loans 11
2.4. Arrangement Fee; Commitment Fee;
Reductions in Commitment 11
2.5. Minimum Amount of Each Loan 11
2.6. Optional Principal Payments 11
2.7. Method of Selecting Types and Interest
Periods for New Loans 11
2.8. Conversion and Continuation of
Outstanding Loans 12
2.9. Changes in Interest Rate, etc 12
2.10. Default; Rates Applicable After Default 12
2.11. Method of Payment 13
2.12. Note; Telephonic Notices 13
2.13. Interest Payment Dates; Interest and Fee
Basis 13
2.14. Lending Installations 14
2.15. Application of Payments 14
2.16. Extension of Facility Termination Date 14
2.17 Letters of Credit 14
2.18 Existing Revolving Credit Facility 17
ARTICLE III CHANGE IN CIRCUMSTANCES 17
3.1. Yield Protection 17
3.2. Changes in Capital Adequacy Regulations 18
3.3. Availability of Types of Loans 18
3.4. Funding Indemnification 18
3.5. Lender Statements; Survival of Indemnity 18
3.6 Termination of Commitment 19
ARTICLE IV CONDITIONS PRECEDENT 19
4.1. Initial Loan 19
4.2. Each Loan 20
ARTICLE V REPRESENTATIONS AND WARRANTIES 21
5.1. Corporate Existence and Standing 21
5.2. Authorization and Validity 21
5.3. No Conflict; Government Consent 21
5.4. Financial Statements 21
5.5. Material Adverse Effect 22
5.6. Taxes 22
5.7. Litigation and Contingent Obligations 22
5.8. Subsidiaries 22
5.9. ERISA 22
5.10. Accuracy of Information 22
5.11. Regulation U 23
5.12. Material Agreements 23
5.13. Compliance With Laws 23
5.14. Ownership of Properties 23
5.15. Investment Company Act 23
5.16. Public Utility Holding Company Act 23
5.17. Subordinated Indebtedness 23
5.18. Intentionally Omitted 23
5.19. Insurance 24
5.20. Solvency 24
5.21. Licenses 24
5.22. Environmental Protection 24
ARTICLE VI COVENANTS 25
6.1. Financial Reporting 26
6.2. Use of Proceeds 27
6.3. Notice of Default 27
6.4. Conduct of Business 27
6.5. Taxes 27
6.6. Insurance 27
6.7. Compliance with Laws 28
6.8. Maintenance of Properties 28
6.9. Inspection 28
6.10. Dividends 28
6.11. Indebtedness 28
6.12. Merger 28
6.13. Sale of Assets 28
6.14. Sale of Accounts 29
6.15. Sale and Leaseback 29
6.16. Investments and Acquisitions 29
6.17. Contingent Obligations 29
6.18. Liens 29
6.19. Fixed Asset Expenditures 30
6.20. Rentals 30
6.21. Letters of Credit 30
6.22. Affiliates 30
6.23. Amendments to Agreements 31
6.24. Subordinated Indebtedness 31
6.25. Intentionally Omitted 31
6.26. Issuance of Stock 31
6.27. Accounting Method 31
6.28. Environmental Covenant 31
6.29. Litigation and Other Notices 31
6.30. Current Ratio 32
6.31. Minimum Tangible Net Worth 32
6.32. Leverage Ratio 32
6.33. Fixed Charge Coverage Ratio 32
ARTICLE VII DEFAULTS 32
ARTICLE VIII ACCELERATION, WAIVERS,
AMENDMENTS AND REMEDIES 34
8.1. Acceleration 34
8.2. Amendments 35
8.3. Preservation of Rights 35
8.4. Setoff 35
ARTICLE IX GENERAL PROVISIONS 35
9.1. Survival of Covenants, Representations 35
9.2. Governmental Regulation 35
9.3. Taxes 35
9.4. Headings 35
9.5. Entire Agreement 36
9.6. Benefits of this Agreement 36
9.7. Expenses; Indemnification 36
9.8. Accounting 36
9.9. Severability of Provisions 36
9.10. Nonliability of the Lender 36
9.11. CHOICE OF LAW 36
9.12. CONSENT TO JURISDICTION 36
9.13. WAIVER OF JURY TRIAL 37
9.14. Interest Limitation 37
9.15. Loan Documents 37
9.16. Interpretation 37
ARTICLE X BENEFIT OF AGREEMENT; ASSIGNMENTS;
PARTICIPATIONS 38
10.1. Successors and Assigns 38
10.2. Participations 38
10.3. Assignments 39
10.4. Dissemination of Information 39
10.5. Tax Treatment 40
ARTICLE XI NOTICES 40
11.1. Giving Notice 40
11.2. Change of Address 40
ARTICLE XII COUNTERPARTS 40
EXHIBITS
EXHIBIT "A" NOTE
EXHIBIT "B" OPINION OF COUNSEL
EXHIBIT "C" LOAN/CREDIT RELATED MONEY TRANSFER
INSTRUCTION
EXHIBIT "D" COMPLIANCE CERTIFICATE
SCHEDULE I TO COMPLIANCE CERTIFICATE
SCHEDULES
SCHEDULE "2.18" EXISTING LETTERS OF CREDIT
SCHEDULE "5.7" LITIGATION AND CONTINGENT
OBLIGATIONS
SCHEDULE "5.8" SUBSIDIARIES AND OTHER INVESTMENTS
SCHEDULE "5.14" INDEBTEDNESS AND LIENS
SCHEDULE "5.22" ENVIRONMENTAL MATTERS
)
EXHIBIT 10.88
TO: Bayerische Vereinsbank
Aktiengesellschaft
Frankfurt Branch
GUARANTEE
For valuable consideration, and to induce Bayerische Vereinsbank
Aktiengesellschaft, Munich, Federal Republic of German and/or
any of its offices and branches ("Bank"), to grant or continue to
grant overdraft credit facilities or other credit or banking facilities
("Credit") from time to time as it may deem fit and at its discretion
to Wibau Astec GmbH ("Borrower") the undersigned Astec
Industries, Inc. ("Guarantor") hereby unconditionally guarantees
and promises that all obligations (including principal, interest and
charges) at any time owing by the Borrower to the Bank in respect
of such Credit will be promptly paid in full when due (at stated
maturity, by acceleration or otherwise).
The liability of the Guarantor under this Guarantee shall not exceed
at anyone time the sum of DM 5,000,000 (Deutsche Mark five
million), plus all interest, cost and fees upon the Credit or upon
such part thereof as shall not exceed the foregoing limitation.
Notwithstanding the foregoing the Bank may permit the Credit of
the Borrower to exceed Guarantor's liability.
This is a continuing guarantee. The Guarantor consents that
without notice to it the maturity of any obligation of the Borrower
may be renewed or the terms thereof waived or varied, or any
collateral or other security therefore may be released, exchanged or
otherwise dealt with, all as the bank may determine. The
Guarantor agrees that its liability hereunder shall be unconditional
irrespective of any circumstances which might otherwise
constitutes a discharge of a surety or guarantor, and waives
diligence, presentment, protest and all notices and demands
whatsoever, including notice of acceptance of this Guarantee or of
any extension of credit and any requirement that any right or power
be exhausted or any action be taken against the Borrower or
against any collateral or other security held by the Bank.
The Guarantor agrees that all payments (whether of principal,
interest or otherwise) to be made by it hereunder shall be made to
the Bank at its Head Office in Munich in the legal currency of the
Federal Republic of Germany. All payments (whether of
principal, interest or otherwise) to be made by the Guarantor to the
Bank hereunder shall be made free and clear of and without
deduction for any taxes, levies, imposts, duties, charges, fees,
deductions, withholdings, restrictions or conditions of any nature
now or hereinafter imposed by any governmental authority in any
jurisdiction or any political subdivision or banking authority
thereof or therein. If at any time any applicable law requires the
Guarantor to make any such deduction or withholding from any
such payment, the sum due from the Guarantor in respect of such
payment shall be increased to the extent necessary to insure that,
after the making of such deduction or withholding, the Bank
receives a net sum equal to the sum which it would have received if
no such deduction or withholding had been required to be made.
No payment by the Guarantor hereunder shall entitle the
Guarantor, by subrogation to the rights of the Bank or otherwise,
to any payment by the Borrower or out of the property of the
Borrower, except after payment in full of all obligations (whether
or not guaranteed hereby) which may be or become payable by the
Borrower to the Bank. The Bank's statement of account shall
represent conclusive proof of the claim of the Bank against the
Borrower, except for manifest error.
The obligations of the Guarantor hereunder shall not be affected by
the receipt by the Bank of the proceeds of any collateral or other
security held by the Bank. In case at any time the Bank shall be
required for any reason to repay any amount received by it from
the Borrower or from any collateral or other security held by the
Bank on account of any obligation guaranteed hereby, then the
liability of the Guarantor in respect of such obligation shall be
restored. The Guarantor's liability hereunder shall not be affected
by termination of its position as partner or shareholder of the
Borrower.
The Guarantor shall pay all taxes (including stamp taxes and
registration fees) imposed in the United States with respect to this
Guarantee, and the obligation of the Guarantor to pay such amount
shall survive the discharge of the other obligations of the
Guarantor hereunder.
This Guarantee shall be valid until receipt by the Bank of written
notice of cancellation of this Guarantee by guarantor. The effect of
any such termination shall be prospective only.
This Guarantee shall be governed by the law of the State of New
York of the United States of America.
In connection with any dispute which may arise under this
Guarantee the Guarantor hereby irrevocably submits to consents to
and waives any objection to the jurisdiction of the courts of the
State of New York located in the County of New York and of the
United States District Court for the Southern District of New York
or at the Bank's option to the Courts of any jurisdiction in which
the Guarantor or any of its assets may be located and waives any
objection to the laying of such venue in such court. The Guarantor
admits that any such disputes may be resolved at least as
conveniently in such a court as in any other court and will not seek
dismissal or a change of venue on the ground that resolution of
such a dispute in any such court is not convenient or in the interest
of justice.
IN WITNESS thereof, the undersigned has caused this instrument
to be duly executed by its proper officers this 16th day of January ,
1995.
Astec Industries, Inc.
By: /s/ Albert E. Guth
EXHIBIT 10.89
February 24, 1995
Astec Industries, Inc.
P.O. Box 72787
4101 Jerome Avenue
Chattanooga, Tennessee 37407
Gentlemen:
We refer to that certain Credit Agreement dated as of July 20, 1994
(together with all amendments and modifications thereto, the
"Agreement"), by and between Astec Industries, Inc. (the
Company) and The First National Bank of Chicago (FNBC).
All capitalized terms used herein and not otherwise defined shall
have the meanings attributed to such terms in the Agreement.
This letter is to advise you that FNBC hereby waives any Default
which may otherwise exist because the aggregate expenditures of
Astec and its Subsidiaries to acquire fixed assets exceeded
$20,000,000 for Astec's fiscal year ended December 31, 1994;
provided that such expenditures did not exceed $22,500,000 for
such fiscal year.
All of the terms, conditions and agreements contained in the
Agreement shall remain in full force and effect as written and are
hereby ratified and affirmed. Other than as expressly provided
herein, FNBC does not waive any of the terms, conditions or
agreements contained in the Agreement. FNBC hereby expressly
reserves all rights and remedies available to it at law or in equity.
Please acknowledge your acceptance of this letter by signing and
returning a copy of this letter to the undersigned. Upon receipt by
the undersigned of such signed copy the foregoing waiver shall
become effective as of the date first written above.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
By: John Runger
Title: Vice President
Agreed and Accepted:
ASTEC INDUSTRIES, INC.
By: Albert E. Guth
Title: Senior Vice President
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 10,471,444
<SECURITIES> 0
<RECEIVABLES> 29,852,180<F1>
<ALLOWANCES> 1,684,000
<INVENTORY> 56,309,735
<CURRENT-ASSETS> 102,136,572
<PP&E> 42,348,792
<DEPRECIATION> 3,692,000
<TOTAL-ASSETS> 155,963,589
<CURRENT-LIABILITIES> 49,136,635
<BONDS> 0
<COMMON> 2,000,366
0
0
<OTHER-SE> 88,372,630
<TOTAL-LIABILITY-AND-EQUITY> 155,963,589
<SALES> 213,806,411
<TOTAL-REVENUES> 213,806,411
<CGS> 165,709,245
<TOTAL-COSTS> 165,709,245
<OTHER-EXPENSES> 20,861,101
<LOSS-PROVISION> 3,941,871
<INTEREST-EXPENSE> 712,853
<INCOME-PRETAX> 25,736,500
<INCOME-TAX> 2,300,126
<INCOME-CONTINUING> 23,436,374
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 23,436,374
<EPS-PRIMARY> $2.38
<EPS-DILUTED> 0
<FN>
<F1>RECEIVABLES ARE PRESENTED NET OF ALLOWANCES.
</FN>
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