<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended SEPTEMBER 28, 1996
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 0-23070
AFC CABLE SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 95-1517994
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
50 KENNEDY PLAZA, SUITE 1250, PROVIDENCE, RHODE ISLAND 02903
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (401) 453-2000
</TABLE>
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[ ].
Indicate the number of shares of the Registrant's Common Stock outstanding as of
the latest practicable date:
<TABLE>
<S> <C>
Class Outstanding as of October 31, 1996
------------------------------------- ----------------------------------
Common Stock, $.01 par value 7,329,362
</TABLE>
Page 1 of 179 pages
Exhibit Index on page 13
<PAGE>
PART I - FINANCIAL INFORMATION
AFC CABLE SYSTEMS, INC.
----------------------
ITEM 1. FINANCIAL STATEMENTS
- -----------------------------
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(In thousands, except share data)
September 28, December 31,
1996 1995
------------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 2,961 $ 2,090
Investments, marketable securities (Note 5) 28,733 25,524
Accounts receivable, net of allowance for doubtful accounts
and sales allowances of $2,168 and $2,365, respectively 25,942 20,575
Inventories:
Finished goods 9,831 10,162
Work-in-process 3,573 1,332
Raw materials 4,865 7,868
------- -------
18,269 19,362
Current deferred taxes 1,051 635
Other current assets 939 1,015
------- -------
Total current assets 77,895 69,201
Property, plant and equipment, at cost 25,157 20,443
Less accumulated depreciation 8,998 7,331
------- -------
Net property, plant and equipment 16,159 13,112
Other long-term assets 2,464 2,471
------- -------
Total assets $96,518 $84,784
======= =======
</TABLE>
Note: The balance sheet at December 31, 1995 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
See accompanying notes.
2
<PAGE>
AFC CABLE SYSTEMS, INC.
----------------------
CONSOLIDATED BALANCE SHEETS--CONTINUED
--------------------------------------
<TABLE>
<CAPTION>
(In thousands, except share data)
September 28, December 31,
1996 1995
-------------- -------------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 180 $ --
Revolving credit note payable 6,000 6,925
Accounts payable 10,256 11,840
Accrued expenses:
Payroll and employee benefits 2,234 1,426
Other 2,759 911
------- -------
Total accrued expenses 4,993 2,337
------- -------
Total current liabilities 21,429 21,102
Long-term debt 3,390 --
Deferred income taxes 1,553 1,571
Other long-term liabilities 887 800
Shareholders' equity:
Preferred stock, $.01 par value, 1,000,000 shares
authorized, none issued -- --
Common stock, $.01 par value, 15,000,000 shares
authorized, 7,329,362 and 7,333,750 shares issued
and outstanding, respectively 73 73
Paid-in capital 47,889 47,918
Other 126 40
Treasury stock, 2,488 shares, at cost (30) (30)
Retained earnings 21,201 13,310
------- -------
69,259 61,311
------- -------
Total liabilities and shareholders' equity $96,518 $84,784
======= =======
</TABLE>
Note: The balance sheet at December 31, 1995 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
See accompanying notes.
3
<PAGE>
AFC CABLE SYSTEMS, INC.
-----------------------
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
<TABLE>
<CAPTION>
(In thousands, except share data)
Quarter ended
September 28, September 30,
1996 1995
--------- ---------
<S> <C> <C>
Net sales $ 41,559 $ 36,543
Cost of goods sold 29,714 28,357
---------- ----------
Gross profit 11,845 8,186
Selling, general and administrative expenses 6,586 5,705
---------- ----------
Income from operations 5,259 2,481
Other income (expense):
Interest expense (204) (196)
Investment income 436 539
Other, net (14) 599
---------- ----------
Income before taxes 5,477 3,423
Income taxes 2,127 1,196
---------- ----------
Net income $ 3,350 $ 2,227
========== ==========
Earnings per common share $.45 $.30
========== ==========
Average shares outstanding and
common stock equivalents 7,429,920 7,478,403
========== ==========
</TABLE>
See accompanying notes.
4
<PAGE>
AFC CABLE SYSTEMS, INC.
-----------------------
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
<TABLE>
<CAPTION>
(In thousands, except share data)
Nine months ended
September 28, September 30,
1996 1995
---------- ----------
<S> <C> <C>
Net sales $ 117,662 $ 103,460
Cost of goods sold 86,880 78,155
---------- ----------
Gross profit 30,782 25,305
Selling, general and administrative expenses 19,193 16,736
---------- ----------
Income from operations 11,589 8,569
Other income (expense):
Interest expense (633) (504)
Investment income 1,236 1,162
Other, net 584 863
---------- ----------
Income before taxes 12,776 10,090
Income taxes 4,886 3,734
---------- ----------
Net income $ 7,890 $ 6,356
========== ==========
Earnings per common share $1.06 $.89
========== ==========
Average shares outstanding and
common stock equivalents 7,402,187 7,181,849
========== ==========
</TABLE>
See accompanying notes.
5
<PAGE>
AFC CABLE SYSTEMS, INC.
-----------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
(In thousands) Nine months ended
September 28, September 30,
1996 1995
---------------- -----------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 7,890 $ 6,356
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation 1,667 1,412
Amortization of intangibles 200 37
Deferred income taxes (536) (84)
Provision for bad debts 154 43
Provision for sales allowances (175) 186
Compensation expense for restricted stock
and compensatory options 205 356
Increase (decrease) in cash arising from changes
in assets and liabilities:
Accounts receivable (5,346) (3,634)
Inventories 1,093 (4,114)
Other current assets 76 (510)
Other long-term assets (193) (831)
Accounts payable (1,584) 253
Accrued payroll and employee benefits 808 49
Other accrued liabilities 1,848 (907)
Other long-term liabilities (273) 146
---------- ----------
Net cash provided by (used in) operating activities 5,834 (1,242)
INVESTING ACTIVITIES
Capital expenditures (4,714) (1,676)
Purchase of available-for-sale securities (28,852) (36,431)
Proceeds from sale of available-for-sale securities 25,710 12,926
---------- ----------
Net cash used in investing activities (7,856) (25,181)
FINANCING ACTIVITIES
Net revolving line of credit borrowings (925) 5,000
Proceeds from issuance of long-term debt 3,570 --
Proceeds from issuance of common stock 248 22,506
----------- ----------
Net cash provided by financing activities 2,893 27,506
----------- ----------
Net increase in cash and cash equivalents 871 1,083
Cash and cash equivalents at beginning of period 2,090 2,603
---------- ---------
Cash and cash equivalents at end of period $ 2,961 $ 3,686
=========== ===========
Supplemental schedule of cash flow information:
Cash paid during the period for interest $ 566 $ 538
=========== ===========
Cash paid during the period for income taxes $ 3,698 $ 4,595
=========== ===========
</TABLE>
See accompanying notes
6
<PAGE>
AFC CABLE SYSTEMS, INC.
-----------------------
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 28, 1996
NOTE 1. BASIS OF PRESENTATION
The accompanying unaudited financial statements of AFC Cable Systems, Inc. (the
"Company" or "AFC") have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they
do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the three and nine month periods ended September 28, 1996 are not
necessarily indicative of the results that may be expected for the year ended
December 31, 1996. Certain prior year amounts have been reclassified to conform
to current period presentation. For further information, refer to the financial
statements and footnotes thereto included in the Company's annual report on Form
10-K for the year ended December 31, 1995.
NOTE 2. INCOME TAXES
For the nine month periods ended September 28, 1996 and September 30, 1995, the
Company's effective tax rates of approximately 38.2% and 37.0%, respectively,
were greater than the statutory rate due primarily to state income taxes.
NOTE 3. CONTINGENCIES
The Company is a defendant in certain claims that relate to matters that
occurred prior to present ownership. In accordance with the purchase and sale
agreement, the prior owner has indemnified the Company for such claims and,
accordingly, the matters are being defended by the prior owner and its insurance
companies. Management is of the opinion that these claims relate to the prior
owners and therefore will not have a material adverse effect on the Company's
financial position or results of operations.
Additionally, the Company is a party to one environmental matter and certain
other legal proceedings not covered by the indemnification. In the
environmental matter, a number of responsible parties entered into a consent
decree with the EPA in 1991 and subsequently, such parties as plaintiffs have
sought contribution from the Company, which was not named as a responsible party
by the EPA. The Company has admitted that a predecessor of the business
currently operated by the Company had disposed of a de minimis amount of waste
at the site. The Company believes that under the applicable law it should not
be jointly and severally liable and believes that it will not be responsible to
pay more than its proportionate share (a de minimis amount) of the cost of
remediation at this site.
NOTE 4. FINANCING
The Company has a credit agreement with a bank which includes an unsecured
revolving line of credit which provides for direct borrowings of up to $25.0
million, of which up to $3.0 million is available for letters of credit. This
line of credit, which terminates on March 31, 1999, is available for business
acquisitions and up to $10.0 million is available for this purpose without the
lender's prior consent. The credit agreement also provided for a $3.2 million
term loan which was used as interim financing for the purchase of a 99,000
square-foot manufacturing facility in New Bedford, Massachusetts prior to the
Company's receipt of proceeds from the issuance of $3.57 million in Industrial
Revenue Bonds ("IRB's") issued on July 24, 1996 for this purpose. This term
loan was repayed on that date with a portion of the proceeds from the IRB's.
Borrowings under the unsecured line of credit are available at interest rates
equal to either the Eurodollar rate plus three quarters of one percent for a
fixed period or the lender's base rate. The Company has the option of electing
the applicable rate upon notification to the lender and as a result, portions of
the outstanding balance accrue interest at different rates. The
7
<PAGE>
weighted average rate of outstanding borrowings under the revolving line of
credit was 6.32% at September 28, 1996. Total letters of credit issued at
September 28, 1996 were $0.8 million.
The line of credit contains certain restrictive covenants, the most restrictive
of which requires the Company to maintain minimum levels of tangible capital and
to meet other specified ratio requirements.
On July 24, 1996, the Company received the proceeds from the issuance of $3.57
million in IRB's through the Massachusetts Industrial Finance Agency for the
purpose of acquiring and refurbishing a 99,000 square-foot manufacturing
facility in New Bedford, Massachusetts. The IRB's are due on July 24, 2016 and
carry an average weekly variable interest rate of approximately 3.5% plus a fee
of 1.0% to be paid to the bank acting as trustee in the issuance for a letter of
credit securing the bonds. The Company has the right to convert from the weekly
interest rate to a fixed rate established at the time of conversion. A portion
of the proceeds from the IRB's was used by the Company to repay the $3.2 million
term loan which was initially used to purchase the new manufacturing facility.
NOTE 5. INVESTMENTS
The following is a summary of securities held by the Company. All securities
are classified as available-for-sale.
<TABLE>
<CAPTION>
GROSS GROSS
UNREALIZED UNREALIZED ESTIMATED FAIR
COST GAINS LOSSES VALUE
--------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C>
SEPTEMBER 28, 1996
U.S. corporate debt securities $ 1,509 $ 70 $ (1) $ 1,578
U.S. treasury securities and
obligations of U.S.
government agencies 25,547 85 (9) 25,623
Equity securities 1,382 218 (68) 1,532
------------------------------------------------
Total investments,
marketable securities $28,438 $373 $(78) $28,733
================================================
DECEMBER 31, 1995
Mutual funds included in
cash equivalents $ 3,351 $ -- $(184) $3,167
================================================
U.S. corporate debt securities $ 4,456 $161 $ -- $4,617
U.S. treasury securities and
obligations of U.S.
government agencies 8,123 90 -- 8,213
Equity securities 12,133 561 -- 12,694
------------------------------------------------
Total investments,
marketable securities $24,712 $812 $ -- $25,524
================================================
</TABLE>
U.S. corporate securities generally mature after one year. U.S. Treasury
securities mature both within the year and after one year. Expected maturities
will differ from contractual maturities because the issuers of the securities
may have the right to prepay obligations without prepayment penalties.
Realized gains included in other income amounted to $618,000 in the nine months
ended September 28, 1996.
8
<PAGE>
ITEM 2 . MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- -------------------------------------------------------------------------
RESULTS OF OPERATIONS
- ---------------------
Comparative Results of Operations for the Three and Nine Months
Ended September 28, 1996 and September 30, 1995
RESULTS OF OPERATIONS
The Company achieved record sales in the quarter ended September 28, 1996,
increasing 13.7% to $41.6 million from $36.5 million in the quarter ended
September 30, 1995. For the nine months ended September 28, 1996 net sales of
$117.7 million were 13.7% higher than sales of $103.5 million for the nine month
period last year. By division, AFC Cable Systems' net sales increased by $2.6
million, or 9.0%, in the quarter ended September 28, 1996 to $31.6 million from
$29.0 million in the quarter ended September 30, 1995. This division's net
sales of $89.7 million for the nine months ended September 28, 1996 were $6.7
million, or 8.1%, greater than net sales of $83.0 million for the nine month
period a year ago. The America Cable Systems division posted net sales of $4.3
million in the third quarter ended September 28, 1996, 21.2% ahead of net sales
of $3.5 million for the third quarter ended September 30, 1995. Net sales for
this division of $12.5 million in the nine months ended September 28, 1996
increased $2.4 million, or 23.9%, from $10.1 million in the corresponding period
in 1995. Net sales for Kaf-Tech, Inc. of $3.4 million in the 1996 third quarter
were 29.6% higher than net sales of $2.6 million in the quarter ended September
30, 1995. Nine month 1996 net sales for Kaf-Tech of $9.2 million increased by
$2.0 million, or 28.8%, from $7.2 million for the nine months ended September
30, 1995. Third quarter 1996 net sales for the Company's new fittings and
connectors and specialty metals products divisions increased 71.6% to $2.2
million from $1.3 million in the quarter ended September 30, 1995. Net sales
for these divisions in the nine months ended September 28, 1996 were $5.6
million, or 121.6%, higher than net sales of $2.5 million for the nine month
period ended September 30, 1995. The Company attributes the overall increase in
sales in the third quarter of 1996 to favorable pricing and the continued
increase in demand for the Company's traditional armored cable products,
specialty-application cables and modular wiring systems resulting from the
increase in non-residential construction during 1996.
Gross profit increased by $3.6 million, or 44.7%, from $8.2 million in the
quarter ended September 30, 1995 to $11.8 million for the quarter ended
September 28, 1996. For the nine months ended September 28, 1996 gross profit
increased by $5.5 million, or 21.6%, to $30.8 million from $25.3 million for the
corresponding period in the prior year. As a percent of net sales, gross profit
increased from 22.4% for the quarter ended September 30, 1995 to 28.5% for the
third quarter of 1996. For the nine month period ended September 28, 1996 gross
profit as a percent of net sales increased to 26.2% from 24.5% for the nine
months ended September 30, 1995. The improved gross profit percentages for the
third quarter and nine months ended September 28, 1996 are attributable to the
combination of better selling prices and reductions in the cost of raw
materials, increased sales of the Company's higher margin specialty application
cables and improved manufacturing efficiencies including better yields on
metals.
For the quarter ended September 28, 1996 selling, general and administrative
expenses ("SG&A") of $6.6 million were $0.9 million, or 15.4%, higher than SG&A
of $5.7 million for the quarter ended September 30, 1995. SG&A for the nine
months ended September 28, 1996 increased $2.5 million, or 14.7%, to $19.2
million from $16.7 million for the corresponding period in 1995. As a percent
of net sales, SG&A increased slightly to 15.9% for the quarter ended September
28, 1996 from 15.6% in the third quarter of 1995. For the nine months ended
September 28, 1996 SG&A, as a percent of net sales, was 16.3% versus 16.2% for
the nine month period last year. Contributing to the $2.5 million increase in
SG&A for the nine months ended September 28, 1996 over the nine months ended
September 30, 1995 was an increase of $701,000 in freight costs and sales agent
commissions, which generally rise in proportion with net sales. In addition,
advertising expense increased $54,000, bad debt expense increased $129,000,
telephone expense increased $52,000, office expense increased $101,000, outside
services increased $286,000 and professional fees increased $313,000, each for
the nine month period. Compensation expense, including performance-based
compensation, increased $629,000 in the nine months ended September 28, 1996.
Interest expense of $204,000 for the quarter ended September 28, 1996 was $8,000
greater than interest expense of $196,000 in the quarter ended September 30,
1995. For the nine months ended September 28, 1996, interest expense increased
9
<PAGE>
$129,000 to $633,000 from $504,000 for the same period in the prior year. This
increase is attributable to a higher level of borrowings during 1996 necessary
to finance increased levels of inventory during the first two quarters of 1996
and the Company's purchase of a 99,000 square-foot manufacturing facility in New
Bedford, Massachusetts. The effect on earnings of this increase in interest
expense was offset by interest and dividend income in the nine months ended
September 28, 1996 of $1.2 million. Other income of $584,000 for the nine
months ended September 28, 1996 was mainly attributable to gains on the sale of
marketable securities.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operations totalled $5.8 million for the nine month period
ended September 28, 1996 and is mainly attributable to improved profitability
offset by increased accounts receivable, each resulting from the improved level
of business. Working capital on September 28, 1996 was $56.5 million and the
ratio of current assets to current liabilities was 3.64 to 1.00.
The Company believes that funds generated from operations, proceeds from the
February 9, 1995 sale of common stock and available borrowings under its
revolving line of credit will be sufficient to meet its on-going working capital
and capital expenditure requirements for the foreseeable future.
10
<PAGE>
PART II - OTHER INFORMATION
AFC CABLE SYSTEMS, INC.
-----------------------
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- -----------------------------------------
(a) Exhibits
10.1 Loan and Trust Agreement among Massachusetts Industrial Finance
Agency, the Registrant and Fleet National Bank, as Trustee, dated
July 1, 1996.
10.2 Reimbursement Agreement between the Registrant and Fleet National
Bank, dated July 1, 1996.
10.3 Letter of Credit issued by Fleet National Bank for the account of
the Registrant, for the benefit of Massachusetts Industrial Finance
Agency, dated July 24, 1996 .
10.4 Mortgage and Security Agreement issued by the Registrant to Fleet
National Bank, dated July 1, 1996.
10.5 Pledge Agreement by and between the Registrant and Fleet National
Bank, dated July 1, 1996.
(b) No Reports on Form 8-K were filed during the quarter ended September 28,
1996.
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Date: November 5, 1996
AFC CABLE SYSTEMS, INC.
By:/s/Ralph R. Papitto
------------------------------
RALPH R. PAPITTO
Chairman of the Board and
Chief Executive Officer
By:/s/Raymond H. Keller
---------------------------
RAYMOND H. KELLER
Vice President and
Chief Financial Officer
12
<PAGE>
EXHIBIT INDEX
Page
----
10.1 Loan and Trust Agreement among Massachusetts Industrial Finance
Agency, the Registrant and Fleet National Bank, as Trustee, dated
July 1, 1996.
10.2 Reimbursement Agreement between the Registrant and Fleet National
Bank, dated July 1, 1996.
10.3 Letter of Credit issued by Fleet National Bank for the account of the
Registrant, for the benefit of Massachusetts Industrial Finance
Agency, dated July 24, 1996.
10.4 Mortgage and Security Agreement issued by the Registrant to Fleet
National Bank, dated July 1, 1996 .
10.5 Pledge Agreement by and between the Registrant and Fleet National
Bank, dated July 1, 1996.
13
<PAGE>
LOAN AND TRUST AGREEMENT
among
MASSACHUSETTS INDUSTRIAL FINANCE AGENCY
and
AFC CABLE SYSTEMS, INC.
and
FLEET NATIONAL BANK, as Trustee
Dated as of July 1, 1996
And Providing for the Issue of:
$3,570,000
Massachusetts Industrial Finance Agency
Industrial Revenue Bonds
(AFC Cable Systems, Inc. Issue - Series 1996)
<PAGE>
TABLE OF CONTENTS
ARTICLE I. INTRODUCTION AND DEFINITIONS.......................................1
Section 101. Description of the Agreement and the Parties..........1
Section 102. Definitions...........................................2
(a) Words.................................................2
ARTICLE II. LOAN OF BOND PROCEEDS; THE ASSIGNMENT AND PLEDGE...................9
Section 201. Loan of Bond Proceeds.................................9
Section 202. Assignment and Pledge of the Issuer...................9
Section 203. Further Assurances...................................10
Section 204. Defeasance...........................................10
ARTICLE III. THE BORROWING....................................................11
Section 301. The Bonds............................................11
(a) Forms of Bonds.......................................11
(i) Form of Weekly Bond.............................11
(ii) Form of Fixed Rate Bond.........................25
(b) Details of the Bonds.................................33
(c) Registration of Bonds in the Book-Entry Only
System...............................................34
(d) Weekly Mode..........................................36
(i) Determination of Weekly Rates..................36
(ii) Conversions from Weekly Mode...................36
(iii) Bondowners' Option to Tender Bonds in
Weekly Mode....................................37
(iv) Events Requiring Mandatory Tender of
Weekly Bonds...................................38
(A) Expiration of Credit Facility Without
Substitution or Replacement;
Substitution of Credit Facility............38
(B) Change in Mode.............................38
(e) Conversion to Fixed Rate Mode........................38
(f) Cancellation and Destruction of Bonds................39
(g) Replacement of Bonds.................................40
(h) Interest on Overdue Principal........................40
Section 302. Application of Bond Proceeds.........................40
Section 303. Tax Status of Bonds..................................40
Section 304. Bond Fund............................................40
(a) Establishment and Purpose............................40
(b) Reserved.............................................41
(c) Unclaimed Moneys.....................................41
-i-
<PAGE>
Section 305. Rebate Fund; Payment of Rebate.......................41
(a) General..............................................41
(b) Establishment of Rebate Fund.........................41
(c) Payment of Rebate....................................42
Section 306. Reserved.............................................43
Section 307. Application of Moneys................................43
Section 308. Payments by the Borrower.............................44
(a) Payments of Debt Service by the Borrower.............44
(b) Additional Payments..................................45
(c) Drawings on the Credit Facility......................46
(i) Debt Service...................................46
(ii) Tenders for Purchase...........................46
(iii) Use of Credit Facility.........................46
(d) Payment of Debt Service..............................46
(e) Borrower's Purchase of Bonds.........................47
Section 309. Unconditional Obligation.............................47
Section 310. Redemption of the Bonds..............................48
(a) Extraordinary Redemption Without Premium.............48
(b) Mandatory Redemption Without Premium in the
Event of Act of Bankruptcy of the Bank...............48
(c) Mandatory Redemption in the Event of
a Determination of Taxability........................48
(d) Optional Redemption..................................49
(e) Scheduled Mandatory Redemption Without Premium.......50
(f) Mandatory Redemption Without Premium--Expiration of
Credit Facility......................................50
(g) Selection of Bonds to Be Redeemed....................50
(h) Notice by the Borrower...............................51
(i) Payment of Redemption Price and Accrued Interest.....51
(j) Notice of Redemption.................................51
Section 311. Purchase of Bonds Tendered...........................51
(a) Procedure............................................51
(i) Notice.........................................52
(ii) Sources of Payments............................52
(b) Payments by the Trustee..............................52
Section 312. Remarketing of Bonds Tendered........................52
(a) General..............................................53
(b) Remarketing of Bonds in the Weekly Mode
Between Notice and Redemption or
Conversion Date......................................54
Section 313. Paying Agent.........................................54
Section 314. Remarketing Agent....................................54
(a) Qualifications and Responsibilities..................54
-ii-
<PAGE>
(b) Removal or Resignation of Remarketing Agent..........55
(c) Successors...........................................55
Section 315. Investments..........................................55
Section 316. Reserved.............................................57
Section 317. Credit Facilities....................................57
(a) Substitution or Replacement..........................57
(b) Requirements.........................................58
Section 318. Securities Laws......................................59
ARTICLE IV. THE PROJECT.......................................................59
Section 401. Construction Fund....................................59
Section 402. Construction of the Project..........................60
Section 403. Certificate of Completion............................60
Section 404. Completion by the Borrower...........................61
Section 405. Borrower Not to Impair Tax Status; Use of Project....61
Section 406. Compliance with Law..................................61
Section 407. Current Expenses.....................................61
Section 408. Disposition and Use of Project.......................62
ARTICLE V. RESERVED...........................................................62
ARTICLE VI. DEFAULT AND REMEDIES..............................................62
Section 601. Default by the Borrower..............................62
(a) Events of Default; Default...........................62
(i) Debt Service on Bonds; Required Purchase.............62
(ii) Other Obligations....................................62
(iii) Event of Bankruptcy..................................62
(iv) Reimbursement Agreement..............................63
(v) Non-Reinstatement under the Credit Facility..........63
(b) Waiver...............................................63
Section 602. Remedies for Events of Default.......................64
(a) Acceleration.........................................64
(b) Rights as a Secured Party............................64
Section 603. Court Proceedings....................................64
Section 604. Revenues after Default...............................64
Section 605. The Credit Facility; Acceleration....................65
Section 606. Rights of Bondowners.................................65
Section 607. Performance of Borrower's Obligations................65
Section 608. Remedies Cumulative; No Waiver.......................66
Section 609. Subrogation Rights of Bank...........................66
Section 610. Rights of Bank.......................................66
ARTICLE VII. THE TRUSTEE......................................................67
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Section 701. Corporate Organization, Authorization
and Capacity........................................67
Section 702. Rights and Duties of the Trustee....................67
(a) Moneys to Be Held in Trust..........................67
(b) Accounts............................................67
(c) Performance of the Issuer's Obligations.............67
(d) Responsibility......................................67
(e) Limitations on Actions..............................68
(f) Financial Obligations...............................69
(g) Ownership of Bonds..................................69
(h) No Surety Bond......................................69
(i) Requests by the Borrower............................69
(j) Securities Disclosures..............................69
Section 703. Fees and Expenses of the Trustee....................69
Section 704. Resignation or Removal of Trustee...................70
Section 705. Successor Trustee...................................70
ARTICLE VIII. THE ISSUER......................................................71
Section 801. Corporate Organization, Authorization and Power.....71
Section 802. Covenant as to Payment; Faith and Credit of
Commonwealth Not Pledged............................72
Section 803. Rights and Duties of the Issuer.....................72
(a) Remedies of the Issuer..............................72
(b) Limitations on Actions..............................72
(c) Responsibility......................................72
(d) Financial Obligations...............................73
ARTICLE IX. THE BONDOWNERS....................................................73
Section 901. Action by Bondowners................................73
ARTICLE X. THE BORROWER......................................................74
Section 1001. Corporate Organization, Authorization and
Powers; Sale, Merger or Consolidation...............74
Section 1002. Indemnification by the Borrower.....................75
Section 1003. Adequacy of Disclosure..............................76
ARTICLE XI. MISCELLANEOUS.....................................................77
Section 1101. Amendments..........................................77
(a) Without Bondowners' Consent.........................77
(b) With Bondowners' Consent............................77
(c) General.............................................78
Section 1102. Notices.............................................78
Section 1103. Time................................................79
Section 1104. Agreement Not for the Benefit of Other Parties......79
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Section 1105. Severability........................................79
Section 1106. Counterparts........................................79
Section 1107. Captions............................................79
Section 1108. Extent of Covenants; No Personal Liability..........79
Section 1110. Survival of Representations and Warranties..........79
Section 1111. Governing Law.......................................80
Section 1112. Usury...............................................80
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ARTICLE I. INTRODUCTION AND DEFINITIONS
Section 101. Description of the Agreement and the Parties. This LOAN
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AND TRUST AGREEMENT (the "Agreement") is entered into as of July 1, 1996 by the
Massachusetts Industrial Finance Agency (with its successors, the "Issuer"), AFC
Cable Systems, Inc. (with its successors, the "Borrower"), a Delaware
corporation, and Fleet National Bank, a national banking association, as Trustee
(with its successors, the "Trustee"). This Agreement is a financing document
combined with a trust agreement as one instrument under Massachusetts General
Laws Chapter 23A and, to the extent incorporated therein, Massachusetts General
Laws, Chapter 40D, each as amended (collectively, the "Act").
This Agreement provides for the following transactions:
(a) the Issuer's issuance of the Bonds;
(b) the Issuer's Loan of the proceeds of the Bonds to the Borrower to
finance and refinance the acquisition, construction, improvement and equipping
of the Project;
(c) the Borrower's repayment of the Loan from the Issuer through
payment to the Trustee of all amounts necessary to pay the Bonds issued by the
Issuer; and
(d) the Issuer's assignment to the Trustee in trust for the benefit
and security of the Bondowners of the Issuer's rights under this Agreement and
the revenues to be received from the Borrower hereunder except as otherwise
provided below with respect to the Loan to the Borrower hereunder, including
repayment of the Loan to be received from the Borrower.
At the time the Bonds are issued the Borrower will cause an
irrevocable, transferable Letter of Credit of Fleet National Bank in the maximum
aggregate amount of $3,624,000 to be issued to the Trustee to be drawn upon to
pay the Purchase Price of, principal of, and interest on the Bonds.
In consideration of the mutual promises contained in this Agreement,
the rights conferred and the obligations assumed hereby, and other good and
valuable consideration, the receipt of which is hereby acknowledged, each of the
Borrower, the Issuer and the Trustee agree, assign, covenant, grant, pledge,
promise, represent and warrant as set forth herein for their own benefit and for
the benefit of the Bondowners and the Bank, provided that any financial
obligation of the Issuer created by or arising out of this Agreement shall not
be a general obligation of the Issuer nor a debt or pledge of the faith and
credit of the Commonwealth, but shall be payable solely from the revenues and
funds pledged for its payment in accordance with this Agreement.
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Section 102. Definitions.
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(a) Words. In addition to terms defined elsewhere herein, the
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following terms have the following meanings in this Agreement, unless the
context otherwise requires:
"Act" has the meaning set forth in Section 101.
"Act of Bankruptcy of the Bank" means the Bank (or the issuer of a
substitute Credit Facility, if a substitute Credit Facility has been issued as
provided herein, as the case may be) shall become insolvent or fail to pay its
debts generally as such debts become due or shall admit in writing its inability
to pay any of its indebtedness or shall consent to or petition for or apply to
any authority for the appointment of a receiver, liquidator, trustee or similar
official for itself or for all or any substantial part of its properties or
assets or any such trustee, receiver, liquidator or similar official is
otherwise appointed or insolvency, reorganization, arrangement or liquidation
proceedings (or similar proceedings) shall be instituted by or against the Bank
(or the issuer of a substitute Credit Facility, if a substitute Credit Facility
has been issued as provided herein, as the case may be).
"Bank" means Fleet National Bank, in its capacity as issuer of the
Letter of Credit, and any other issuer of a Credit Facility.
"Bank Rate" means the per annum rate of interest applicable to Pledged
Bonds which is equal to the Prime Lending Rate. The Bank Rate shall fluctuate
simultaneously with each change in the Prime Lending Rate. In no event shall
the Bank Rate exceed the highest interest rate permitted by law.
"Bond Counsel" means Ropes & Gray or other nationally recognized bond
counsel selected by the Borrower and reasonably satisfactory to the Trustee.
"Bond Fund" means the fund established pursuant to Section 304.
"Bondowners", "owners", "Registered Owners" or words of similar import
means the registered owners of the Bonds from time to time as shown in the books
kept by the Trustee, as bond registrar and transfer agent, except that wherever
appropriate the term "owners" shall mean the owners of the Bonds for federal
income tax purposes.
"Bonds" means the $3,570,000 principal amount of the Massachusetts
Industrial Finance Agency Industrial Revenue Bonds (AFC Cable Systems, Inc.
Issue - Series 1996) and any bond or bonds duly issued in exchange or
replacement therefor.
"Book-Entry Only System" means the system of registration described in
Section 301(c)(ii).
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"Borrower Bond" means any Bond registered to the Borrower pursuant to
Subsection 312(a).
"Borrower Representative" means the person or persons at the time
designated to act on behalf of the Borrower in a written certificate (or any
alternate or alternates at the time so designated) furnished to the Trustee,
containing the specimen signature of such person or persons and signed on behalf
of the Borrower by its Chairman, Vice Chairman, President, Chief Financial
Officer, Treasurer, any Assistant Treasurer or any Vice President.
"Business Day" means a day (i) that is not a Sunday or legal holiday,
(ii) that is a day on which banks are not required or authorized to close in New
York, New York, (iii) that is a day on which banking institutions in all of the
cities in which the principal offices of the Trustee and, if applicable, the
Remarketing Agent and the Bank are located are not required or authorized to
remain closed and (iv) that is a day on which the New York Stock Exchange is not
closed.
"Commonwealth" means The Commonwealth of Massachusetts.
"Construction Fund" means the fund established pursuant to Section
401.
"Credit Facility" means the Letter of Credit and any substitute
irrevocable transferable letter of credit delivered to the Trustee pursuant to
this Agreement and then in effect.
"Credit Facility Fund" means the fund established pursuant to Section
308.
"Date of Issuance" means the date of original delivery of the Bonds to
the Placement Agent against payment therefor.
"Default" has the meaning given such term in Section 601.
"Delivery Date" means, with respect to a Bond tendered for purchase,
the Purchase Date or any subsequent Business Day on which such Bond is delivered
to the Paying Agent as provided in the form of Weekly Bond in Paragraph
301(a)(i).
"Determination of Taxability" means (a) receipt by the Trustee of a
written opinion of Bond Counsel to the effect that, based on written statements,
certificates, audits, filings or any other documentation furnished by a Borrower
Representative or any "principal user" of the Project or any "related person"
thereto (as such terms are used in the IRC), (i) the $10,000,000 limit of IRC
Section 144(a)(4) was exceeded at any time within the three-year period
commencing the date the Bonds were issued or (ii) the $40,000,000 limit of IRC
Section 144(a) was exceeded at any time within the three (3) year period
beginning on the later of the date the Bonds were issued or the date the Project
is placed in service; or (b) written notice to the Trustee of the enactment of
a statute or promulgation of a regulation eliminating, in whole
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or in part, the applicable exclusion, as such exists on the date the
Bonds were issued, for interest payable on the Bonds; or (c) written notice to
the Trustee of a "final determination by decision or ruling by a duly
constituted administrative authority" to the effect that such exclusion for
interest payable on the Bonds is not available, is no longer available or is
contrary to law; or (d) notice to the Trustee of the expiration of the right to
further administrative review of any determination, decision or ruling to the
effect that such exclusion for interest payable on the Bonds is not available,
is no longer available or is contrary to law; or (e) receipt by the Trustee of a
written opinion of Bond Counsel that there is no longer a basis for the
Bondowners or any former Bondowner (other than a Bondowner or former Bondowner
who is or was a "substantial user" of the Project or a "related person" thereto
as such terms are used in the IRC) to claim that any interest paid and payable
on the Bonds is excluded from gross income under the laws of the United States.
The phrase "Determination of Taxability" does not mean or include consideration
of the interest payable on the Bonds for purposes of calculating the interest
expense which may be deducted by a bank or other financial institution.
For the purposes of clause (c) above, a "final determination by
decision or ruling by a duly constituted administrative authority" shall mean
(1) the issuance of a ruling (including, but not limited to, a revenue ruling or
a letter ruling) by the Internal Revenue Service ("IRS") or any successor
thereto, or (2) the issuance of either a preliminary notice of proposed
deficiency ("30-Day Letter"), a statutory notice of deficiency letter ("90-Day
Letter"), or other written order or directive of similar force and effect by the
IRS, or any other United States governmental agency having jurisdiction therein.
Nothing in this definition of "Determination of Taxability" shall be
construed to mean that the Trustee or any Bondowner shall have any obligation to
contest or appeal any assertion or decision that any interest payable on the
Bonds is subject to taxation.
Notwithstanding the foregoing, the imposition of an alternative,
preference, minimum or other special tax on a Bondowner in the calculation of
which is included the interest of the Bonds shall not be, in and of itself,
considered a Determination of Taxability.
"DTC" has the meaning given such term in Section 301(c)(i).
"Effective Date" means, with respect to a Bond in the Weekly Mode, the
date on which a new Rate Period for that Bond takes effect. The Effective Date
shall initially be the Date of Issuance and thereafter each Wednesday.
"Effective Rate" means, for any Rate Period, the rate of interest in
effect for such Rate Period.
"Eligible Funds" means (i) amounts drawn on any Credit Facility; (ii)
amounts paid to the Trustee pursuant to this Agreement which have been held by
it for a period of at least 123
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days during which no Event of Bankruptcy has occurred and commingled only with
other Eligible Funds; and (iii) amounts which if applied to the payment of the
Bonds would not, in the opinion of nationally recognized counsel experienced in
bankruptcy matters selected by the Borrower and satisfactory to the Trustee, be
subject to avoidance as a preference under the United States Bankruptcy Code
upon an Event of Bankruptcy; and (iv) income derived from the investment of the
foregoing; provided that such income shall not be deemed to be Eligible Funds if
an injunction, restraining order, stay or similar court action is in effect
preventing the payment of such income to Bondowners. The Trustee shall maintain
records of Eligible Funds held by it.
"Event of Bankruptcy" means the filing of a petition in bankruptcy or
the commencement of a proceeding under the United States Bankruptcy Code or any
other applicable law concerning insolvency, reorganization or bankruptcy by or
against the Borrower, any guarantor of the Bonds (other than the Bank) or the
Issuer, as debtor.
"Event of Default" has the meaning given such term in Section 601.
"Federal Tax Statement" means the Non-Arbitrage and Tax Compliance
Certificate of the Borrower executed by the Borrower in connection with the
original issuance of the Bonds and delivered to the Trustee on the Date of
Issuance.
"Financial Institution" means (a) any national bank, national banking
association or banking institution, whether acting in its individual or
fiduciary capacity, organized under the laws of the United States of America,
any state or territory thereof or the District of Columbia, the business of
which is substantially confined to banking and is supervised by the federal,
state or territorial banking commissioner or similar official, (b) an insurance
company which is organized as an insurance company whose primary and predominant
business activity is the writing of insurance or the reinsuring of risks
underwritten by insurance companies, and which is subject to supervision by the
insurance commissioner or a similar official or agency of a state or territory
or the District of Columbia, (c) an investment company registered under the
Investment Company Act of 1940 or a business development company as described in
Section 2(a)(48) of such Act, (d) an employee benefit plan, including an
individual retirement account, which is subject to the provisions of the
Employee Retirement Income Security Act of 1974, if the investment decision is
made by a plan fiduciary, as defined in Section 3(21) of such Act, which is
either a bank, insurance company or registered investment advisor, or (e) any
other institutional investor. A Financial Institution must have assets of at
least $25,000,000.
"First Optional Redemption Date" means the anniversary of the Fixed
Rate Conversion Date in the year which is the number of years after the Fixed
Rate Conversion Date equal to the number of years between the Fixed Rate
Conversion Date and the maturity date multiplied by one-half (1/2) and rounded
up to the nearest whole number provided, however, that Bonds shall not be
subject to optional redemption if the period between the Fixed Rate Conversion
Date and their maturity date is less than ten years.
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"Fixed Rate" means a rate or rates of interest on the Bonds that is
fixed for the remaining term of the Bonds.
"Fixed Rate Conversion Date" means the date upon which the Fixed Rate
first becomes effective for the Bonds.
"Fixed Rate Mode" has the meaning set forth in the form of Fixed Rate
Bond in Paragraph 301(a)(ii).
"Government Obligations" means obligations issued by, or the full and
timely payment of which are guaranteed by, the United States.
"IRC" means the Internal Revenue Code of 1986, as it may be amended
from time to time, and any Treasury Regulations (including Temporary or Proposed
Regulations) thereunder or applicable thereto, including (until modified,
amended or superseded) Treasury Regulations or Temporary or Proposed Regulations
under the Internal Revenue Code of 1954, as amended, and regulations promulgated
thereunder or applicable thereto.
"Interest Index" means that indication of the lowest interest rate
appropriate for bonds similar to the Bonds being priced in terms of security,
creditworthiness, term and tender privilege which will permit the Bonds to be
sold at a purchase price equal (excluding accrued interest) to their principal
amount determined first by interviewing three investors of portfolios holding
significant numbers of such bonds (but who are not Bondowners) and second, if
that is not practicable, by referring to the best available database or
publication of national recognition containing a recent calculation of such an
interest rate for comparable securities.
"Interest Payment Date" means each date on which interest shall be
payable on the Bonds according to their terms so long as any of the Bonds shall
be Outstanding. While the Bonds bear interest in the Weekly Mode, the Interest
Payment Date shall be the first Wednesday of each calendar month or if such day
is not a Business Day, the next succeeding Business Day, commencing August 7,
1996 and, as to any Bond, the maturity date or redemption date thereof; from and
after the Fixed Rate Conversion Date, the Interest Payment Date shall be the
first day of January and July of each year, commencing with a January 1 or July
1 which is at least two months but less than ten months after the Fixed Rate
Conversion Date, as specified by the Borrower in writing to the Trustee; and for
Pledged Bonds the Interest Payment Date shall be the first Business Day of each
month and, as to any Bond, the maturity date or redemption date thereof.
Notwithstanding anything herein to the contrary, the maturity date of any Bond
shall be deemed to be an Interest Payment Date.
"Letter of Credit" means the $3,624,000 irrevocable letter of credit
issued by Fleet National Bank for the benefit of the Trustee as of the Date of
Issuance and any extensions thereof.
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"Loan" means the deposit of Bond proceeds (exclusive of accrued
interest) in the Construction Fund made pursuant to this Agreement. The amount
of the Loan shall include any fee payable to the Placement Agent.
"Maximum Interest Rate" means the maximum interest rate on Bonds in
the Weekly Mode, other than Pledged Bonds, which rate is initially 12% per
annum. The Maximum Interest Rate may be increased at any time by the Borrower
by filing with the Issuer and the Trustee a certificate stating the new Maximum
Interest Rate and an opinion of Bond Counsel to the effect that such increase
will not affect adversely the exclusion of interest on the Bonds from the gross
income of the Bondowners for federal income tax purposes. In no event shall an
increase in the Maximum Interest Rate be permitted to cause the amount entitled
to be drawn under a Credit Facility to be less than the minimum required amount
specified in Paragraph 317(b)(ii).
"Mode" means the period for and the manner in which the interest rates
on the Bonds are set and includes the Weekly Mode and the Fixed Rate Mode.
"Outstanding," when used to modify Bonds, refers to Bonds issued,
authenticated and delivered under this Agreement, excluding: (i) Bonds which
have been exchanged or replaced; (ii) Bonds which have been paid; (iii) Bonds
which have become due and for the payment of which moneys have been duly
provided; (iv) Borrower Bonds; (v) Bonds deemed tendered for purchase and not
delivered to the Trustee on the Purchase Date, provided sufficient funds for
payment of the Purchase Price are on deposit with the Trustee; and (vi) Bonds
with respect to which this Agreement has been defeased pursuant to Section 204.
"Permitted Investments" has the meaning given such term in
Section 315.
"Placement Agent" means Fleet National Bank, as placement agent.
"Pledge Agreement" means (a) the Pledge Agreement dated as of the date
hereof by and between the Borrower and the Bank, as said Pledge Agreement may be
supplemented or amended from time to time, and (b) any similar agreement entered
into by and between the Borrower and any substitute Bank, as said agreement may
be supplemented or amended from time to time.
"Pledged Bond" has the meaning given to such term in Section 312(a).
"Prime Lending Rate" means, on any date of calculation, the rate of
interest announced by the Bank, from time to time, as a reference point for
determining interest rates charged on certain loans and is not necessarily the
lowest rate at which the Bank loans money or issues credit.
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"Project" means generally the acquisition of approximately 17.8 acres
of land at New Bedford Industrial Park, 260 Duchaine Boulevard, New Bedford,
Massachusetts, and an existing building consisting of approximately 100,000
square feet and renovations to and construction of an addition to said building,
for use by the Borrower in the manufacture of armored cable, flexible conduit
building wire, modular wiring systems and fittings and other associated uses,
including directly related and ancillary uses.
"Project Costs" means the costs of issuing the Bonds and the costs of
carrying out the Project which may be paid from Bond proceeds under the Act,
excluding the creation of reserves and including interest during construction.
Project Costs shall also be limited to costs which are permitted to be paid or
reimbursed from Bond proceeds by the Federal Tax Statement.
"Purchase Date" means, while the Bonds are in a Weekly Mode, the date
on which Bonds shall be required to be purchased pursuant to a mandatory or
optional tender in accordance with the provisions in the form of Weekly Rate
Bonds in Paragraph 301(a)(i).
"Purchase Price" shall have the meaning set forth in the form of
Weekly Rate Bonds.
"Rate Period" or "Period" means, when used with respect to any
particular rate of interest for a Bond in the Weekly Mode, the period during
which such rate of interest determined for such Bond will remain in effect as
described herein.
"Reimbursement Agreement" means (a) the Reimbursement Agreement dated
as of July 1, 1996 between the Bank and the Borrower, and any amendments and
supplements thereto and (b) any letter of credit agreement or reimbursement
agreement by and between the Borrower and any substitute Bank, and any
amendments and supplements thereto.
"Remarketing Agent" means Fleet Securities, Inc., in its capacity as
remarketing agent under the Remarketing Agreement, its successors and assigns.
"Remarketing Agreement" means the Remarketing Agreement dated as of
the date hereof among the Borrower, the Trustee and the Remarketing Agent, as
the same may be amended or supplemented from time to time.
"S&P" means Standard & Poor's, a division of The McGraw-Hill
Companies, Inc., or its successors or assigns.
"Tax Incidence Date" means the first date as of which interest on the
Bonds is determined to be taxable as a result of the occurrence of a
Determination of Taxability .
"Tendered Bond" means any Bond tendered or deemed tendered for
purchase pursuant to Paragraphs 301(d)(iii) or (iv) or 301(e).
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"Trustee" means Fleet National Bank, as trustee under this Agreement
and its successors in such capacity.
"UCC" means the Massachusetts Uniform Commercial Code.
"Weekly Mode" means a Rate Period with respect to the Bonds which is a
one week (or slightly shorter or longer) period which commences on Wednesday of
one calendar week and ends on the following Tuesday.
"Weekly Rate" means the rate of interest determined by the Remarketing
Agent for each Rate Period to be the lowest rate which in its judgment, on the
basis of prevailing financial market conditions, would permit the sale of the
Bonds in the Weekly Mode at par on and as of the Effective Date, but not in
excess of the Maximum Interest Rate.
Words importing persons include firms, associations and corporations,
and the singular and plural forms of words shall be deemed interchangeable
whenever appropriate.
ARTICLE II. LOAN OF BOND PROCEEDS; THE ASSIGNMENT AND PLEDGE
Section 201. Loan of Bond Proceeds. The Issuer shall issue the Bonds
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pursuant to the Act in the amount, in the form and with the terms provided
herein, and shall loan to the Borrower such amounts to finance Project Costs as
hereinafter provided. The Borrower agrees to repay the Loan in the amounts and
at the times necessary to pay principal of, premium, if any, and interest on the
Bonds by making the payments required under Section 308.
Section 202. Assignment and Pledge of the Issuer. The Issuer, for
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consideration paid as hereinabove acknowledged, hereby irrevocably assigns and
pledges to the Trustee in trust for the security of the Bondowners and the Bank
upon the terms hereof all the Issuer's right, title and interest (i) in respect
of the Loan and all payments thereon, (ii) in all moneys and securities held by
the Trustee for deposit in, or deposited in, the Bond Fund, the Construction
Fund, or the Credit Facility Fund and investment earnings thereon, and (iii) in
any collateral security for, and all proceeds of, any of the foregoing. The
Trustee shall hold (1) all the rights, title and interest received under this
section and (2) all revenues exclusive of funds to which the Trustee is entitled
in its own right as fees, reimbursement, indemnity or otherwise received from
the Borrower or derived from the exercise of the Issuer's powers hereunder
(which shall include all payments under Subsection 308(a)) in trust for the
security of the Bondowners and the Bank in accordance with the provisions
hereof.
Section 203. Further Assurances. The Issuer shall from time to time
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execute and the Borrower and the Trustee shall from time to time execute,
deliver and record and file such instruments as the Trustee may reasonably
require to confirm, perfect or maintain the security created hereby and the
assignment and pledge of rights hereunder.
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Section 204. Defeasance. When there are in the Bond Fund sufficient
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funds, or noncallable and non-prepayable Government Obligations in such
principal amounts, bearing interest at such rates and with such maturities
(including, with respect to any Bonds in the Weekly Mode, maturities no greater
than seven days to fund the payment of Purchase Price) as will provide, without
reinvestment, sufficient funds to pay the Purchase Price or the principal of,
premium, if any, and interest on the Bonds in full as and when such amounts
become due, and when all the rights hereunder of the Issuer (including the right
to receive payments under Paragraphs 308(b)(i) and (ii)) and of the Trustee and
their respective directors, officers, employees and agents have been paid or
provided for to the satisfaction of the Issuer and the Trustee, then (1) the
Bondowners will cease to be entitled to any right, benefit or security under
this Agreement except the right to receive payment of the funds deposited and
held for payment and other rights set forth below or which rights by their
nature cannot be satisfied prior to or simultaneously with termination of the
lien hereof, (2) the security interests created by this Agreement (except in
such funds and investments) shall terminate, and (3) the Issuer and the Trustee
shall execute and deliver such instruments as may be necessary to discharge the
lien and security interests created hereunder; provided, however, that (a) with
respect to any Bonds that are supported by a Credit Facility, all such funds and
obligations in the Bond Fund shall be Eligible Funds; (b) if any such Bonds are
to be redeemed prior to the maturity thereof, such Bonds shall have been duly
called for redemption or irrevocable instructions for such a call shall have
been given to the Trustee and, (c) if the Bonds bear interest at the Weekly
Rate, the Trustee shall have received written confirmation from S&P that the
proposed defeasance will not in and of itself cause a reduction or withdrawal of
the rating then in effect on the Bonds. Upon such defeasance, the funds and
investments required to pay or redeem the Bonds in full shall be irrevocably set
aside for that purpose. The Trustee shall cause to be mailed to all Bondowners
in the manner herein specified for redemption of Bonds within fifteen (15) days
of the conditions of this section being met a notice stating that such
conditions have been met and that the lien of this Agreement has been
discharged, and, if the Bonds are to be redeemed prior to maturity, specifying
the date of redemption and the redemption price. Any funds or property held by
the Trustee for payment of the Bonds under this section and not required for
such payment shall (unless there is an Event of Default hereunder, in which case
they shall be applied as provided in Section 604), after satisfaction of all the
rights of the Issuer, the Trustee and the Bank and their respective directors,
officers, employees and agents (as certified in writing by the Issuer, the
Trustee and the Bank, respectively), and payment of the rebate, if any, due to
the United States under IRC (S)148, and upon such indemnification, if any, as
the Issuer or the Trustee may reasonably require, be distributed to the
Borrower. If Bonds are not presented for final payment when due and moneys are
available in the hands of the Trustee therefor, the Trustee shall, without
liability for interest thereon, continue to hold the moneys held for that
purpose subject to Subsection 304(c), and interest shall cease to accrue on the
principal amount represented thereby.
When there are in the Bond Fund funds or securities as described in
the preceding paragraph as are sufficient to pay the Purchase Price, principal
of, premium, if any, and interest on, some but not all of the Bonds in full as
and when such amounts become due and the other conditions in the preceding
paragraph have been met with respect to such Bonds, the
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particular Bonds (or portions thereof) for which such provision for payment
shall have been considered made shall be selected by lot by the Trustee (or, if
the Bonds are in the Book-Entry Only System, in such manner as DTC shall
determine) and thereupon the Trustee and the Issuer shall take similar action to
release the security interests created by this Agreement in respect of such
Bonds (except in such funds or securities and investments thereof), subject
however to compliance with the applicable conditions set forth in the provisos
above.
Notwithstanding the foregoing, those provisions relating to the
maturity of Bonds, interest payments and dates thereof, the tender of Bonds for
purchase and the Trustee's remedies with respect thereto, and provisions
relating to exchange, transfer and registration of Bonds, replacement and
cancellation of Bonds, the holding of moneys in trust and the duties of the
Trustee in connection with all of the foregoing, the payment by the Borrower of
the fees, expenses and indemnities of the Trustee and the Issuer and their
respective directors, officers, employees and agents and any obligation of the
Borrower to make rebate payments to the United States of America, shall remain
in full force and effect and shall be binding upon the Trustee, the Issuer, the
Borrower and the Bondowners notwithstanding the release and discharge of this
Agreement until the Bonds have been actually paid in full.
ARTICLE III. THE BORROWING
Section 301. The Bonds.
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(a) Forms of Bonds. The Bonds shall be issued in substantially the
--------------
following forms for the Weekly and Fixed Rate Modes:
(i) Form of Weekly Bond. The Bonds may be issued in the Weekly Mode
-------------------
in substantially the form prescribed below:
-11-
<PAGE>
R-__ $
ANY BONDOWNER WHO FAILS TO DELIVER A BOND FOR PURCHASE AT THE TIMES AND AT THE
PLACE REQUIRED HEREIN SHALL HAVE NO FURTHER RIGHTS HEREUNDER EXCEPT THE RIGHT TO
RECEIVE THE PURCHASE PRICE HEREOF UPON PRESENTATION AND SURRENDER OF THIS BOND
TO THE TRUSTEE AS DESCRIBED HEREIN, AND SHALL HOLD THIS BOND AS AGENT FOR THE
TRUSTEE.
UNITED STATES OF AMERICA
THE COMMONWEALTH OF MASSACHUSETTS
MASSACHUSETTS INDUSTRIAL FINANCE AGENCY
Industrial Revenue Bond
(AFC Cable Systems, Inc. Issue-Series 1996)
THIS BOND DOES NOT CONSTITUTE A GENERAL OBLIGATION OF THE
MASSACHUSETTS INDUSTRIAL FINANCE AGENCY OR A DEBT OR PLEDGE OF THE FAITH AND
CREDIT OF THE COMMONWEALTH OF MASSACHUSETTS; THE PRINCIPAL OF AND INTEREST AND
PREMIUM, IF ANY, ON THIS BOND ARE PAYABLE SOLELY FROM THE REVENUES AND FUNDS
PLEDGED FOR THEIR PAYMENT IN ACCORDANCE WITH THE LOAN AND TRUST AGREEMENT. THE
AGENCY HAS NO TAXING POWER.
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT:
INTEREST PAYMENT DATES: (i) the first Wednesday of each calendar month, or, if
such day is not a Business Day, the next succeeding
Business Day, commencing August 7, 1996, (ii) the
Maturity Date or redemption date and (iii), if this
Bond is a Pledged Bond, the first Business Day of
each month.
MATURITY DATE: July 1, 2016 CUSIP:
DATE OF THIS BOND: MODE: Weekly
(Date as of which Bonds of this
series were initially issued)
-12-
<PAGE>
The Massachusetts Industrial Finance Agency (the "Issuer"), for value
received, promises to pay to the REGISTERED OWNER, or registered assigns, but
solely from the moneys to be provided under the Agreement mentioned below, upon
presentation and surrender hereof, in lawful money of the United States of
America, the PRINCIPAL AMOUNT on the MATURITY DATE, unless paid earlier as
provided below, with interest from the most recent INTEREST PAYMENT DATE to
which interest has been paid or duly provided for or, if no interest has been
paid, from the DATE OF THIS BOND set forth above, until paid in full, at the
rates set forth below, payable on each INTEREST PAYMENT DATE until the date on
which this bond becomes due, whether at maturity or by acceleration or
redemption. From and after that date, any unpaid principal will bear interest
at the rate last established for this bond before the principal became overdue
until paid or duly provided for. Until conversion to the Fixed Rate Mode as
provided below, this bond shall bear interest at the Weekly Rate. The Weekly
Rate for this bond shall be the rate of interest determined by the Remarketing
Agent designated as provided in the Agreement (herein, with its successors, the
"Remarketing Agent"), for each Rate Period, as defined below, to be the lowest
rate which in its judgment, on the basis of prevailing financial market
conditions, would permit the sale of the Bonds (as defined below) in the Weekly
Mode at par as of the Effective Date, as defined below, but not in excess of the
Maximum Interest Rate. If this bond is converted to the Fixed Rate Mode it
shall bear interest at the Fixed Rate as defined in the Agreement. The
Remarketing Agent shall determine the initial Weekly Rate on or before the date
of issue of the Bonds, which rate shall remain in effect as provided in the
Agreement. Thereafter, the Remarketing Agent shall redetermine the Weekly Rate
for each Rate Period as provided below. The amount of interest due on any
INTEREST PAYMENT DATE shall be the amount of unpaid interest accrued on this
bond through the day preceding such INTEREST PAYMENT DATE.
This bond is one of a series of Industrial Revenue Bonds (AFC Cable
Systems, Inc. Issue - Series 1996) (the "Bonds") in the aggregate principal
amount of $3,570,000 issued under Massachusetts General Laws, Chapter 23A, and,
to the extent incorporated therein, Massachusetts General Laws, Chapter 40D,
each as amended (collectively the "Act"). The proceeds of the Bonds are being
loaned to AFC Cable Systems, Inc. (the "Borrower"), a Massachusetts corporation,
pursuant to a Loan and Trust Agreement (the "Agreement") dated as of July 1,
1996 among the Borrower, the Issuer and Fleet National Bank, as Trustee (the
"Trustee"). Pursuant to the Agreement, the Borrower has unconditionally agreed
to repay such loan in the amounts and at the times necessary to pay the
principal of, premium, if any, and interest on the Bonds when due. Reference is
hereby made to the Agreement for the provisions thereof with respect to the
rights, limitations of rights, duties, obligations and immunities of the
Borrower, the Issuer, the Trustee and the Bondowners, including the order of
payments in the event of insufficient funds, the disposition of unclaimed moneys
held by the Trustee and restrictions on the rights of owners of the Bonds to
bring suit. The Agreement may be amended to the extent and in the manner
provided therein. Copies of the Agreement are available for inspection at the
corporate trust office of the Trustee.
-13-
<PAGE>
The Purchase Price (as defined below) and principal of, premium, if
any, and interest on this bond while it is in the Weekly Mode are also payable
from moneys drawn by the Trustee on an irrevocable letter of credit for the
Bonds (together with any extensions, amendments and renewals thereof, the
"Letter of Credit") issued by Fleet National Bank (together with any other
issuer of a Credit Facility, the "Bank") pursuant to the terms of a
Reimbursement Agreement dated as of July 1, 1996 (the "Reimbursement Agreement")
between the Borrower and Fleet National Bank. The Trustee may draw on the
Letter of Credit presently in place for the payment of up to forty-six (46)
days' interest for Bonds in the Weekly Mode. The Letter of Credit initially
expires on July 6, 2001 but may be terminated earlier upon the occurrence of
certain events set forth in the Agreement and the Reimbursement Agreement or
extended as provided in the Reimbursement Agreement. Unless the Letter of
Credit is extended or renewed or a substitute letter of credit (collectively
with the Letter of Credit, a "Credit Facility") is provided in accordance with
the Agreement, the Bonds will become subject to mandatory purchase as described
below. The Borrower may substitute a new Credit Facility as provided in the
Agreement.
In case any Event of Default occurs and is continuing, the principal
amount of this bond together with accrued interest may become or be declared
immediately due and payable in the manner and with the effect provided in the
Agreement.
Unless otherwise defined herein, capitalized terms used in this bond
shall have the meaning given them in the Agreement. The following terms are
defined as follows:
"Business Day" means a day (i) that is not a Sunday or legal holiday,
(ii) that is a day on which banks are not required or authorized to close in New
York, New York, (iii) that is a day on which banking institutions in all of the
cities in which the principal offices of the Trustee and, if applicable, the
Remarketing Agent and the Bank are located are not required or authorized to
remain closed and (iv) that is a day on which the New York Stock Exchange is not
closed.
"Effective Date" means, with respect to a Bond in the Weekly Mode, the
date on which a new Rate Period for that Bond takes effect. The Effective Date
shall initially be the Date of Issuance and thereafter each Wednesday.
"Interest Payment Date" means each date on which interest shall be
payable on the Bonds according to their terms so long as any of the Bonds shall
be Outstanding. While the Bonds bear interest in the Weekly Mode, the Interest
Payment Date shall be the first Wednesday of each calendar month or if such day
is not a Business Day on the next succeeding Business Day, commencing August 7,
1996 and, as to any Bond, the maturity date or redemption date thereof; from and
after the Fixed Rate Conversion Date, the Interest Payment Date shall be the
first day of January and July of each year, commencing with a January 1 or July
1 which is at least two but less than ten months after the Fixed Rate Conversion
Date; and for Pledged Bonds the Interest Payment Date shall be the first
Business Day of each month
-14-
<PAGE>
and, as to any Bond, the maturity date or redemption date thereof.
Notwithstanding anything herein to the contrary, the maturity date of any Bond
shall be deemed to be an Interest Payment Date.
"Mode" means the period for and the manner in which the interest rates
on the Bonds are set and includes the Weekly Mode and the Fixed Rate Mode.
"Purchase Date" means, while this bond is in the Weekly Mode, the date
on which this bond shall be required to be purchased pursuant to a mandatory or
optional tender in accordance with the provisions hereof.
"Rate Period" or "Period" means, when used with respect to any
particular rate of interest for a Bond in the Weekly Mode, the period during
which such rate of interest determined for such Bond will remain in effect as
described herein. While this bond is in the Weekly Mode, a new interest rate
shall take effect on the date such Mode takes effect and thereafter on each
Effective Date.
"S&P" means Standard & Poor's, a division of The McGraw-Hill
Companies, Inc., or any of its successors or assigns.
"Weekly Mode" means a Rate Period with respect to the Bonds which is a
one week (or slightly shorter or longer) period which commences on Wednesday of
one calendar week and ends on the following Tuesday.
At the option of the Borrower, and upon certain conditions provided
for in the Agreement, the Bonds may be converted to the Fixed Rate Mode.
While this bond is in the Weekly Mode, conversion to the Fixed Rate
Mode may take place only on an INTEREST PAYMENT DATE in any calendar month upon
written notice from the Trustee to the REGISTERED OWNER of this bond mailed at
least thirty (30) days prior to the conversion. Conversion of this bond shall
be subject to the conditions set forth in the Agreement. In the event that the
conditions for a proposed conversion are not met (i) such conversion shall not
take effect on the proposed conversion date, notwithstanding any prior notice to
the Bondowners of such conversion and (ii) this bond shall remain in the Weekly
Mode. In no event shall the failure of this bond to be converted be deemed to
be a Default or an Event of Default under the Agreement.
When this bond is in the Weekly Mode, the Weekly Rate in effect for
each Rate Period (the "Effective Rate" for such Period) shall be determined not
later than the Business Day next preceding the Effective Date. If for any reason
the interest rate on the Bonds cannot be established for any Rate Period as
described above or is held invalid or unenforceable by a court of law, the
interest rate on the Bonds during such Rate Period will be a rate determined by
the Remarketing Agent which is not less than 90% nor more than 130% of the
Interest
-15-
<PAGE>
Index. If for any reason the interest rate on the Bonds for the applicable Rate
Period cannot be established as described in the preceding sentence, the
interest rate on the Bonds for such Rate Period will equal the Interest Index,
as determined by the Trustee, but the Trustee shall have no obligation to
determine such interest rate. In no event will the Weekly Rate exceed the
Maximum Rate. The Remarketing Agent shall announce the Effective Rate by
telephone to the Issuer, the Trustee and the Borrower on the date of
determination thereof, and shall promptly confirm such notice in writing. If
for any reason the Remarketing Agent fails to announce the Effective Rate as
provided herein for any Rate Period, the Effective Rate for that Rate Period
shall be the same as the Effective Rate for the prior period. While this bond
is in the Weekly Mode, any Bondowner may ascertain the Effective Rate at any
time by contacting the Trustee or the Remarketing Agent.
Each determination and redetermination of the Weekly Rate shall be
conclusive and binding on the Issuer, the Trustee, the Bank, the Borrower and
the Bondowners.
While this bond is in the Weekly Mode, interest shall be computed on
the basis of a 365- or 366-day year, as appropriate, and actual days elapsed.
From and after the date on which this bond becomes due, any unpaid principal
will bear interest at the then effective interest rate until paid or duly
provided for, but unpaid interest shall not continue to bear interest after its
due date.
While this bond is in the Weekly Mode the principal of this bond is
payable when due by wire or bank transfer of immediately available funds within
the continental United States to the REGISTERED OWNER hereof but only upon
presentation and surrender of this bond at the corporate trust office of the
Trustee, 111 Westminster Street, Providence, RI 02903 or such other address
specified in writing by the Trustee to the Bondowners. Interest on this bond
while in the Weekly Mode is payable in immediately available funds by wire or
bank transfer within the continental United States from the Trustee to the
REGISTERED OWNER, determined as of the close of business on the applicable
record date, at its address as shown on the registration books maintained by the
Trustee. The Purchase Price (as defined below) of Bonds tendered for purchase
shall be paid as provided below.
The record date for payment of interest while this bond is in the
Weekly Mode is the Business Day preceding the date on which interest is to be
paid. With respect to overdue interest or interest payable on redemption of
this bond other than on an INTEREST PAYMENT DATE or interest on any overdue
amount, the Trustee may establish a special record date. The special record
date may not be more than thirty (30) days before the date set for payment. The
Trustee will mail notice of a special record date to the Bondowners at least ten
(10) days before the special record date.
While this bond is in the Weekly Mode, the REGISTERED OWNER shall have
the right to tender this bond or portion thereof for purchase in the principal
amount of $100,000 (or in its entirety only if this bond has previously been
reduced below $100,000 by partial
-16-
<PAGE>
redemption) and integral multiples of $5,000 in excess thereof (provided,
however, that any portion of this bond not tendered shall be in the minimum
amount of $100,000) at a price (the "Purchase Price") equal to 100% of the
principal amount thereof, plus accrued interest, if any, to the Purchase Date,
upon compliance with the conditions described below, provided that if the
Purchase Date is an INTEREST PAYMENT DATE, accrued interest shall be paid
separately, and not as part of the Purchase Price on such date. In order to
exercise the right to tender, the REGISTERED OWNER must deliver to the Trustee a
written irrevocable notice of tender substantially in the form of the
Bondowner's Election Notice set forth herein or in such other form as is
satisfactory to the Trustee. While this bond is in the Weekly Mode, it will be
purchased on the Business Day specified in such Bondowner's Election Notice,
provided such date is at least seven calendar days after receipt by the Trustee
of such notice. If the REGISTERED OWNER of this bond has elected to require
purchase as provided above, the REGISTERED OWNER shall be deemed, by such
election, to have agreed irrevocably to sell this bond to any purchaser
determined in accordance with the provisions of the Agreement on the date fixed
for purchase at the Purchase Price.
Tender of this bond will not be effective and this bond will not be
purchased if at the time fixed for purchase an acceleration of the maturity of
the Bonds shall have occurred and not have been annulled in accordance with the
Agreement. Notice of tender of this bond is irrevocable. All notices of tender
of Bonds shall be made to the Trustee at its offices at 111 Westminster Street,
Providence, RI 02903, Attention: Corporate Trust Department, or such other
address specified in writing by the Trustee to the Bondowners. All deliveries
of tendered Bonds, including deliveries of Bonds subject to mandatory tender,
shall be made to the Trustee, 111 Westminster Street, Providence, RI 02903 or
such other address specified in writing by the Trustee to the Bondowners.
This bond is subject to mandatory tender for purchase at the Purchase
Price (i) on the date of conversion to the Fixed Rate Mode or (ii) on (a) the
Interest Payment Date immediately preceding the expiration or termination of the
Credit Facility and failure by the Borrower to provide for the delivery of an
extension of the existing Credit Facility or a substitute Credit Facility at
least 45 days prior to the Interest Payment Date preceding the expiration or
termination date of the Credit Facility then in effect, and (b) in connection
with the substitution of a Credit Facility, unless the Trustee has received
written notice from S&P at least 45 days prior to the Interest Payment Date
preceding the expiration or termination date of the Credit Facility then in
effect that such substitution will not result in a reduction or withdrawal of
the rating on this bond. Notice of mandatory tender shall be given or caused to
be given by the Trustee in writing to the REGISTERED OWNER not more than 44 days
and not less than 30 days prior to the mandatory Purchase Date. THE OWNER OF
THIS BOND, BY ACCEPTANCE HEREOF, AGREES TO SELL AND SURRENDER THIS BOND AT SUCH
PRICE TO ANY PURCHASER DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF THE
AGREEMENT IN THE EVENT OF SUCH MANDATORY TENDER AND, ON SUCH PURCHASE DATE, TO
SURRENDER THIS BOND TO THE TRUSTEE FOR PAYMENT OF THE PURCHASE PRICE. From and
after the Purchase
-17-
<PAGE>
Date, no further interest on this bond shall be payable to the REGISTERED OWNER,
provided that there are sufficient funds available on the Effective Date to pay
the Purchase Price.
The Purchase Price of this bond shall be paid to the REGISTERED OWNER
by the Trustee on the Delivery Date, which shall be the Purchase Date or any
subsequent Business Day on which this bond is delivered to the Trustee. The
Purchase Price of this bond shall be paid only upon surrender of this bond to
the Trustee as provided herein. From and after the Purchase Date, no further
interest on this bond shall be payable to the REGISTERED OWNER who gave notice
of tender for purchase, provided that there are sufficient funds available on
the Purchase Date to pay the Purchase Price. The Purchase Price of Bonds
tendered for purchase is payable for Bonds in the Weekly Mode by wire or bank
transfer within the continental United States in immediately available funds
from the Trustee to the REGISTERED OWNER at its address shown on the
registration books maintained by the Trustee. If on any date this bond is
subject to mandatory tender for purchase or is required to be purchased at the
election of the REGISTERED OWNER, payment of the Purchase Price of this bond to
such owner shall be made on the Purchase Date if presentation and surrender of
this bond is made prior to 10:00 A.M., Boston, Massachusetts time, on the
Purchase Date or on such later Business Day upon which presentation and
surrender of this bond is made prior to 10:00 A.M., Boston, Massachusetts time.
Anything in this bond or in the Agreement to the contrary, any Bond
which at the time is a Borrower Bond or a Pledged Bond shall not be subject to
mandatory or optional tender.
Bonds which are Pledged Bonds (as defined in the Agreement) shall bear
interest at the applicable Bank Rate (as defined in the Agreement) until such
Bonds are no longer Pledged Bonds. Interest at the Bank Rate shall be
calculated on the basis of 1/365th of the rate thereon for each day and shall be
payable on the first Business Day of each month. Pledged Bonds shall not be
subject to optional tender for purchase.
The Bonds shall be redeemed from sinking fund installments at a
redemption price of 100% of the principal amount of the Bonds so redeemed, plus
accrued interest to the redemption date on July 1 of each of the years and in
the principal amounts as follows:
-18-
<PAGE>
<TABLE>
<CAPTION>
Year Principal Amount Year Principal Amount
---- ---------------- ---- ----------------
<S> <C> <C> <C>
1997 $180,000 2007 $180,000
1998 $180,000 2008 $180,000
1999 $180,000 2009 $180,000
2000 $180,000 2010 $180,000
2001 $180,000 2011 $180,000
2002 $180,000 2012 $180,000
2003 $180,000 2013 $180,000
2004 $180,000 2014 $180,000
2005 $180,000 2015 $180,000
2006 $180,000 *2016 $150,000
</TABLE>
*Final Maturity
The Bonds in the Weekly M ode shall be redeemed in whole and not in
part upon the occurrence of a Determin ation of Taxability (as defined in the
Agreement) from moneys drawn on the Cre dit Facility as soon as practicable and,
in any event, within sixty days aft er receipt of notice by the Trustee at a
redemption price of 100% of the princip al amount of the Bonds so redeemed, plus
accrued interest to the redemption date defined in the Agreement.
Bonds in the Weekly Mode shall be redeemed in whole or in part at the
option of the Borrower on any date at a redemption price of 100% of the
principal amount of the Bonds so redeemed plus accrued interest to the
redemption date, but only from moneys drawn on the Credit Facility, in the
denomination of $5,000 or any integral multiple thereof.
Bonds which are Pledged Bonds shall be redeemed at the option of the
Borrower in whole or in part on any date in integral multiples of $5,000 at a
redemption price of 100% of the principal amount redeemed, plus accrued interest
to the redemption date.
Bonds in the Weekly Mode shall be redeemed on any date at a redemption
price of 100% of the principal amount redeemed, plus accrued interest to the
redemption date:
(1) In whole or in part, to the extent excess moneys in the
Construction Fund are transferred to the Bond Fund established under the
Agreement, or from proceeds of the sale, lease or other disposition of the
facilities financed by the Bonds or certain insurance or eminent domain proceeds
pursuant to the extraordinary redemption without premium provisions set forth in
the Agreement, in each case only from moneys drawn on the Letter of Credit; or
(2) If, within thirty (30) days of the occurrence of an Act of
Bankruptcy of the Bank, a substitute Credit Facility has not been issued to the
Trustee in accordance with the Agreement. In such event, the Bonds shall be
subject to redemption in whole and not in part
-19-
<PAGE>
only from Eligible Funds within one hundred thirty (130) days after the
occurrence of the Act of Bankruptcy of the Bank.
If less than all of the Outstanding Bonds are to be called for
redemption, the Bonds (or portions thereof) to be redeemed shall be selected as
provided in the Agreement with Bonds in the Weekly Mode being redeemed in
integral multiples of $5,000. Mandatory or optional redemption other than
sinking fund redemption shall reduce the mandatory sinking fund redemption
obligation in inverse order of maturity. Pledged Bonds shall be redeemed before
any other Bonds.
In the event this bond (or any portion thereof) is selected for
redemption, notice will be mailed no more than sixty (60) nor less than thirty
(30) days prior to the redemption date to the REGISTERED OWNER at its address
shown on the registration books maintained by the Trustee, all as provided in
the Agreement. Failure to mail notice to the owner of any other Bond or any
defect in the notice to such an owner shall not affect the redemption of this
bond.
If this bond is of a denomination in excess of one hundred thousand
dollars ($100,000), portions of the principal amount in the amount of one
hundred thousand dollars ($100,000) and any multiple of five thousand dollars
($5,000) in excess thereof may be redeemed. If less than all of the principal
amount is to be redeemed, upon surrender of this bond to the Trustee, there will
be issued to the REGISTERED OWNER, without charge, a new Bond or Bonds, at the
option of the REGISTERED OWNER, for the unredeemed principal amount.
Notice of redemption having been duly mailed, this bond, or the
portion called for redemption, will become due and payable on the redemption
date at the applicable redemption price and, moneys for the redemption having
been deposited with the Trustee, from and after the date fixed for redemption,
interest on this bond (or such portion) will no longer accrue.
IN CERTAIN CIRCUMSTANCES SET OUT HEREIN, THIS BOND (OR PORTION HEREOF)
IS SUBJECT TO PURCHASE OR REDEMPTION, IN EACH CASE UPON NOTICE TO OR FROM THE
OWNER HEREOF AS OF A DATE PRIOR TO SUCH PURCHASE OR REDEMPTION. IN EACH SUCH
EVENT AND UPON DEPOSIT OF THE PURCHASE OR REDEMPTION PRICE WITH THE TRUSTEE ON
THE PURCHASE OR REDEMPTION DATE, AS THE CASE MAY BE, THIS BOND (OR PORTION
HEREOF) SHALL BE DEEMED TO HAVE BEEN TENDERED FOR PURCHASE OR REDEMPTION AND
SHALL CEASE TO BE OUTSTANDING UNDER THE AGREEMENT, INTEREST HEREON SHALL CEASE
TO ACCRUE AS OF THE PURCHASE OR REDEMPTION DATE, AND THE REGISTERED OWNER HEREOF
SHALL BE ENTITLED ONLY TO RECEIVE THE PURCHASE OR REDEMPTION PRICE SO DEPOSITED
WITH THE TRUSTEE UPON SURRENDER OF THIS CERTIFICATE TO THE TRUSTEE.
-20-
<PAGE>
This bond is transferable by the REGISTERED OWNER, in person or by its
attorney duly authorized in writing, at the corporate trust office of the
Trustee, upon surrender of this bond to the Trustee for cancellation. Upon the
transfer, a new Bond or Bonds in authorized denominations of the same aggregate
principal amount will be issued to the transferee at the same office. Bonds in
the Weekly Mode may be transferred only (i) pursuant to a tender as described
herein or (ii) to a Financial Institution (as defined in the Agreement) that
signs and delivers to the Trustee an investment letter in substantially the form
attached as Exhibit A to the Agreement. No Bond in the Weekly Mode with a
denomination of less than $100,000 shall be transferred except in connection
with a tender for purchase as provided herein. No transfer will be effective
unless represented by such surrender and reissue. This bond may also be
exchanged at the corporate trust office of the Trustee or its agent for a new
Bond or Bonds in authorized denominations of the same aggregate principal amount
without transfer to a new registered owner. Exchanges and transfers will be
without expense to the owner except for applicable taxes or other governmental
charges, if any. The Trustee will not be required to make an exchange or
transfer of this bond (except in connection with any optional or mandatory
tender of this bond) (i) if this bond (or any portion thereof) has been selected
for redemption or (ii) during the fifteen (15) days preceding any date fixed for
selection for redemption if this bond (or any portion thereof) is eligible to be
selected for redemption.
The Bonds are issuable only in fully registered form and while in the Weekly
Mode shall be in original minimum denominations of $100,000 and any integral
multiple of five thousand dollars ($5,000) in excess thereof. No Bond in the
Weekly Mode may be issued in a denomination of less than $100,000 except as a
result of partial selection for redemption.
The Issuer, the Trustee and the Borrower may treat the REGISTERED OWNER as
the absolute owner of this bond for all purposes, notwithstanding any notice to
the contrary.
No director, officer, employee or agent of the Issuer nor any person
executing this bond (by facsimile signature or otherwise) shall be personally
liable, either jointly or severally, hereon or be subject to any personal
liability or accountability by reason of the issuance hereof.
This bond will not be valid until the Certificate of Authentication has been
signed by the Trustee.
[IF BOND IS PRINTED, ADD:
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND ON
THE BACK, WHICH HAVE THE SAME EFFECT AS IF SET FORTH HERE.]
MASSACHUSETTS INDUSTRIAL FINANCE
AGENCY
(Seal) By:____________________________________
Executive Director/General Counsel/
-21-
<PAGE>
Director of Finance
Certificate of Authentication
-----------------------------
This bond is one of the Bonds described in the Loan and Trust Agreement.
FLEET NATIONAL BANK,
as Trustee
By:___________________________
Authorized Signature
-22-
<PAGE>
Assignment
----------
For value received the undersigned sells, assigns and transfers this bond to
____________________________________________________________
(Name and Address of Assignee)
____________________________________________________________
____________________________________________________________
Social Security or Other Identifying Number of Assignee
and irrevocably appoints ________________________________________ attorney-in-
fact to transfer it on the books kept for registration of the bond, with full
power of substitution.
___________________________________________
NOTE: The signature to this assignment must
correspond with the name as written on the
face of the bond without alteration or
enlargement or other change and must be
guaranteed by a Participant in a Recognized
Signature Guaranty Medallion Program.
Signature Guaranteed:
_________________________________
Participant in a Recognized
Signature Guaranty Medallion Program
By:______________________________
Authorized Signature
-23-
<PAGE>
The following is the Bondowner's Election Notice described herein:
BONDOWNER'S ELECTION NOTICE
---------------------------
Massachusetts Industrial Finance Agency
Industrial Revenue Bonds
(AFC Cable Systems, Inc. Issue - Series 1996)
Principal Principal Amount/*/ Bond Purchase
Amount CUSIP Tendered for Purchase Numbers Date
- ------ ----- --------------------- ------- ----
The undersigned hereby certifies that it is the registered owner of
the Bonds described above (the "Tendered Bonds"), which are in the Weekly Mode,
and hereby agrees that the delivery of this instrument of transfer to the
Trustee constitutes an irrevocable offer to sell the Tendered Bonds to the
Borrower or their designee on the Purchase Date, which shall be a Business Day
at least seven (7) calendar days following delivery of this instrument, at a
purchase price equal to the unpaid principal balance thereof plus accrued and
unpaid interest thereon to the Purchase Date (the "Purchase Price"). The
undersigned acknowledges and agrees that this election notice is irrevocable and
that the undersigned will have no further rights with respect to the Tendered
Bonds except payment, upon presentation and surrender of the Tendered Bonds of
the corporate trust office of the Trustee, 111 Westminster Street, Providence,
RI 02903 or such other address specified in writing by the Trustee to the
Bondowners, of the Purchase Price by wire or bank transfer within the
continental United States from the Trustee to the undersigned at its address as
shown on the registration books of the Trustee (i) on the Purchase Date if the
Tendered Bonds shall have been surrendered to the Trustee at or prior to 10:00
A.M., Providence, Rhode Island time, on the Purchase Date or (ii) on any
Delivery Date subsequent to the Purchase Date on which Tendered Bonds are
delivered to the Trustee at or prior to 10:00 A.M., Providence, Rhode Island
time, together with an appropriate endorsement for transfer or accompanied by a
bond power endorsed in blank, provided that for so long as the Bonds are in the
Book-Entry Only System, physical surrender of the Bonds to the Trustee shall not
be required and the Bonds shall be tendered pursuant to the procedures described
in Paragraph 301(d)(iii)) of the Loan and Trust Agreement referred to below.
- -------------------------------
/*/ Must be in a minimum amount of $100,000 (or the entirety of a Bond
which has previously been reduced below $100,000 by partial redemption) and
integral multiples of $5,000 in excess thereof and must not result in any
portion of a Bond not tendered being below the minimum of $100,000.
---
-24-
<PAGE>
Except as otherwise indicated herein and unless the context otherwise
requires, the terms used herein shall have the meanings set forth in the Loan
and Trust Agreement dated as of July 1, 1996 relating to the Bonds.
Date:_________________ Signature(s)
__________________________________
__________________________________
__________________________________
__________________________________
Street City State Zip
IMPORTANT: The above signature(s) must correspond with the name(s) as
set forth on the face of the Tendered Bond(s) with respect to which this
Bondowner's Election Notice is being delivered without any change whatsoever.
If this notice is signed by a person other than the registered owner of any
Tendered Bond(s), the Tendered Bond(s) must be either endorsed on the Assignment
appearing on each Bond or accompanied by appropriate bond powers, in each case
signed exactly as the name or names of the registered owner or owners appear on
the bond register. The method of presenting this notice to the Trustee is the
choice of the person making such presentation. If it is made by mail, it should
be by registered mail with return receipt requested.
(ii) Form of Fixed Rate Bond. The Bonds may be issued in the Fixed
-----------------------
Rate Mode in substantially the form prescribed below.
-25-
<PAGE>
No. R- $
UNITED STATES OF AMERICA
THE COMMONWEALTH OF MASSACHUSETTS
MASSACHUSETTS INDUSTRIAL FINANCE AGENCY
Industrial Revenue Bond
(AFC Cable Systems, Inc. Issue - Series 1996)
INTEREST RATE: CUSIP:
MATURITY DATE:
DATE OF THIS BOND:
(Date as of which Bonds of this
series were initially issued.)
INTEREST PAYMENT DATES: January 1 and July 1
(but not before
____________, __)
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT: DOLLARS
THIS BOND DOES NOT CONSTITUTE A GENERAL OBLIGATION OF THE MASSACHUSETTS
INDUSTRIAL FINANCE AGENCY OR A DEBT OR PLEDGE OF THE FAITH AND CREDIT OF THE
COMMONWEALTH OF MASSACHUSETTS; THE PRINCIPAL OF AND INTEREST AND PREMIUM, IF
ANY, ON THIS BOND ARE PAYABLE SOLELY FROM THE REVENUES AND FUNDS PLEDGED FOR
THEIR PAYMENT IN ACCORDANCE WITH THE LOAN AND TRUST AGREEMENT. THE AGENCY HAS
NO TAXING POWER.
The Massachusetts Industrial Finance Agency (the "Issuer"), for value
received promises to pay to the REGISTERED OWNER, or registered assigns, but
solely from the moneys to be provided under the Agreement mentioned below, upon
presentation and surrender hereof, in lawful money of the United States of
America, the PRINCIPAL AMOUNT on the MATURITY DATE, unless paid earlier as
provided below, with interest
-26-
<PAGE>
(computed on the basis of a 360-day year consisting of twelve 30-day months)
from the most recent INTEREST PAYMENT DATE to which interest has been paid or
duly provided for or, if no interest has been paid, from the DATE OF THIS BOND,
at the INTEREST RATE per annum, payable semiannually on the INTEREST PAYMENT
DATES, until the date on which this bond becomes due, whether at maturity or by
acceleration or redemption. From and after that date, any unpaid principal and
any premium, if any, will bear interest at the rate last established for this
bond until paid or duly provided for, but unpaid interest shall not continue to
bear interest after its due date. The principal and premium, if any, of this
bond is payable by bank check or draft upon presentation and surrender of this
bond at the corporate trust office of Fleet National Bank, as Trustee (with its
successors, the "Trustee"), 111 Westminster Street, Providence, RI 02903 or
such other address specified in writing by the Trustee to the Bondowners unless
this bond is in the Book-Entry Only System (as defined in the Agreement), in
which case payment shall be by wire or bank transfer of immediately available
funds within the continental United States. Interest is payable by check or
draft mailed by the Trustee to the REGISTERED OWNER of this bond (or of one or
more predecessor or successor Bonds (as defined below)), determined as of the
close of business on the applicable record date, at its address as shown on the
registration books maintained by the Trustee, unless this bond is in the Book-
Entry Only System, in which case interest is payable by wire or bank transfer of
immediately available funds within the continental United States. If any
payment, redemption or maturity date for principal, premium or interest shall be
(i) a Sunday or a legal holiday, or (ii) a day on which banking institutions are
authorized pursuant to law to close and on which the corporate trust office of
the Trustee or its agent is not open for business, then the payment thereof may
be made on the next succeeding day not a day specified in (i) or (ii) with the
same force and effect as if made on the specified payment date and no interest
shall accrue for the period after the specified payment date.
The record date for payment of interest is the fifteenth day of the month
preceding the date on which the interest is to be paid, provided that, with
respect to overdue interest or interest payable on redemption of this bond other
than on an INTEREST PAYMENT DATE or interest on any overdue amount, the Trustee
(as defined below) may establish a special record date. The special record date
may not be more than thirty (30) days before the date set for payment. The
Trustee will mail notice of a special record date to the registered owners of
the Bonds (the "Bondowners") at least ten (10) days before the special record
date. The Trustee will promptly certify to the Issuer that it has mailed such
notice to all Bondowners, and such certificate will be conclusive evidence that
such notice was given in the manner required hereby.
This bond is one of a series of Industrial Revenue Bonds (AFC Cable Systems,
Inc. Issue - Series 1996) (the "Bonds") in the aggregate principal amount of
$3,570,000 issued under Massachusetts General Laws, Chapter 23A and, to the
extent incorporated therein, Massachusetts General Laws, Chapter 40D, each as
amended (collectively the "Act"). The proceeds of the Bonds are being loaned to
AFC Cable Systems, Inc. (the "Borrower"), a Delaware corporation, pursuant to a
Loan and Trust Agreement (the "Agreement") dated as of
-27-
<PAGE>
July 1, 1996 among the Borrower, the Issuer and Fleet National Bank, as Trustee
(the "Trustee"). Pursuant to the Agreement, the Borrower has unconditionally
agreed to repay such loan in the amounts and at the times necessary to pay the
principal of, premium, if any, and interest on the Bonds when due. Reference is
hereby made to the Agreement for the provisions thereof with respect to the
rights, limitations of rights, duties, obligations and immunities of the
Borrower, the Issuer, the Trustee and the Bondowners, including the order of
payments in the event of insufficient funds, the disposition of unclaimed moneys
held by the Trustee and restrictions on the rights of owners of the Bonds to
bring suit. The Agreement may be amended to the extent and in the manner
provided therein. Copies of the Agreement are available for inspection at the
corporate trust office of the Trustee.
In order to provide additional security for the Bonds, [INSERT DESCRIPTION
OF LETTER OF CREDIT OR SUBSTITUTE CREDIT FACILITY].
In case any Event of Default (as defined in the Agreement) occurs and is
continuing, the principal amount of this bond together with accrued interest may
be declared due and payable in the manner and with the effect provided in the
Agreement.
[If applicable: The Bonds shall be redeemed pursuant to the Agreement
beginning on ____________, at the option of the Borrower, in whole or in part on
and after the dates and at the prices (expressed as percentages of the principal
amount to be redeemed) set forth in the following table, plus accrued interest
to the redemption date:
Redemption Date Redemption Price
- --------------- ----------------
%
[This table shall be completed based on redemption schedule established for the
Bonds pursuant to the Agreement.]]
The Bonds of this series maturing on July 1, _____ shall be redeemed from
sinking fund installments at 100% of their principal amounts, plus accrued
interest to the redemption date, on July 1 of each of the years and in the
principal amounts as follows:
Principal Principal
Year Amount Year Amount
---- ------ ---- ------
$ $
The Bonds shall be redeemed prior to maturity on any date at a
redemption price of 100% of the principal amount redeemed, plus accrued interest
to the redemption date:
-28-
<PAGE>
(1) In whole or in part, to the extent excess moneys in the Construction
Fund are transferred to the Bond Fund established under the Agreement, or from
proceeds of the sale, lease or other disposition of the facilities financed by
the Bonds or certain insurance or eminent domain proceeds pursuant to
extraordinary redemption without premium provisions set forth in the Agreement,
in each case, from moneys drawn on the Letter of Credit; or
(2) If, within thirty (30) days of the occurrence of an Act of
Bankruptcy of the Bank, a substitute Credit Facility has not been issued to the
Trustee in accordance with the Agreement. In such event, the Bonds shall be
subject to redemption as a whole within one hundred thirty (130) days after the
occurrence of the Act of Bankruptcy of the Bank; or
(3) In whole and not in part, in the event of the expiration of the
Credit Facility and failure by the Borrower to provide for delivery to the
Trustee of a substitute Credit Facility or notice from the provider of the
existing Credit Facility of an extension of such Credit Facility, in each case
at least forty-five (45) days prior to the Interest Payment Date immediately
preceding the expiration date of the Credit Facility then in effect.
The Bonds shall be redeemed prior to maturity on any date upon the
occurrence of a Determination of Taxability as defined in the Agreement. In
such event, the Bonds shall be redeemed in whole and not in part as soon as
practicable after receipt of notice by the Trustee of such Determination of
Taxability, at a redemption price equal to the principal amount redeemed plus a
premium equal to three percent (3%) of the principal amount thereof, plus
accrued interest to the redemption date when the Bonds bear interest at the
Fixed Rate. If any Bonds are paid at maturity or purchased by the Trustee or
redeemed subsequent to a Tax Incidence Date without payment of an amount at
least equal to the redemption price that would have been received if such Bonds
had been redeemed as a result of a Determination of Taxability, the Owners of
such Bonds at the time of maturity, purchase or redemption, upon establishing
their then ownership thereof, shall be entitled to receive as premium thereon an
amount equal to the difference between the amounts actually received and the
amounts that would have been received if such Bonds had been redeemed as a
result of a Determination of Taxability.
If less than all of the outstanding Bonds are to be called for
redemption, the Bonds (or portions thereof) to be redeemed shall be selected as
provided in the Agreement.
In the event this bond (or any portion thereof) is selected for
redemption, notice will be mailed no more than 60 nor less than 30 days prior to
the redemption date to the REGISTERED OWNER at its address shown on the
registration books maintained by the Trustee, all as provided in the Agreement.
Failure to mail notice to the owner of any other Bond or any defect in the
notice to such an owner shall not affect the redemption of this bond.
If this bond is of a denomination in excess of five thousand dollars
($5,000), portions of the principal amount in the amount of five thousand
dollars ($5,000) or any multiple thereof
-29-
<PAGE>
may be redeemed. If less than all of the principal amount is to be redeemed,
upon surrender of this bond to the Trustee, there will be issued to the
REGISTERED OWNER, without charge, a new Bond or Bonds, at the option of the
REGISTERED OWNER, for the unredeemed principal amount.
Notice of redemption having been duly mailed, this bond, or the portion
called for redemption, will become due and payable on the redemption date at the
applicable redemption price and, moneys for the redemption having been deposited
with the Trustee, from and after the date fixed for redemption, interest on this
bond (or such portion) will no longer accrue.
This bond is transferable by the REGISTERED OWNER, in person or by its
attorney duly authorized in writing, at the corporate trust office of the
Trustee upon surrender of this Bond to the Trustee for cancellation. Upon
transfer, a new Bond or Bonds in authorized denominations of the same aggregate
principal amount will be issued to the transferee at the same office. [No Bond
with a denomination of less than $100,000 may be transferred.] No transfer will
be effective unless represented by such surrender and reissue. This bond may
also be exchanged at the corporate trust office of the Trustee for a new Bond or
Bonds of the same aggregate principal amount without transfer to a new
registered owner. Exchanges and transfers will be without expense to the holder
except for applicable taxes or other governmental charges, if any. The Trustee
will not be required to make an exchange or transfer of this bond during the
fifteen (15) days preceding any date fixed for selection for redemption if this
bond (or any part thereof) is eligible to be selected or has been selected for
the redemption.
This bond is issuable only in fully registered form in the denominations
of [one hundred thousand ($100,000) dollars and any integral multiple of five
thousand dollars ($5,000) in excess thereof] [five thousand dollars ($5,000) or
any integral multiple thereof.]
The Issuer, the Trustee, and the Borrower may treat the REGISTERED OWNER
as the absolute owner of this bond for all purposes, notwithstanding any notice
to the contrary.
No director, officer, employee or agent of the Issuer nor any person
executing this bond (by facsimile signature or otherwise) shall be personally
liable, either jointly or severally, hereon or be subject to any personal
liability or accountability by reason of the issuance hereof.
This bond will not be valid until the Certificate of Authentication has
been signed by the Trustee.
[IF THIS BOND IS PRINTED:
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND ON THE BACK, WHICH
HAVE THE SAME EFFECT AS IF SET FORTH HERE.]
-30-
<PAGE>
MASSACHUSETTS INDUSTRIAL FINANCE AGENCY
(Seal)
By: ___________________________________
Executive Director/General Counsel/
Director of Finance
Certificate of Authentication
-----------------------------
This bond is one of the Bonds described in the Loan and Trust Agreement.
FLEET NATIONAL BANK,
as Trustee
By: ______________________________
Authorized Signature
-31-
<PAGE>
Assignment
----------
For value received the undersigned sells,assigns and transfers this bond to
- --------------------------------------------------------------------------------
(Name and Address of Assignee)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Social Security or Other Identifying Number of Assignee
and irrevocably appoints _____________________________ attorney-in-fact to
transfer it on the books kept for registration of the bond, with full power of
substitution.
_______________________________________________
NOTE: The signature to this assignment must
correspond with the name as written on the face
of the bond without alteration or enlargement
or other change and must be guaranteed by a
Participant in a Recognized Signature Guaranty
Medallion Program.
Dated:
Signature Guaranteed:
___________________________________
Participant in a Recognized
Signature Guaranty Medallion Program
By: ________________________________
Authorized Signature
-32-
<PAGE>
(b) Details of the Bonds.
--------------------
The Bonds shall be signed on behalf of the Issuer by the manual or facsimile
signature of the Executive Director, General Counsel or Director of Finance and
the corporate seal of the Issuer or a facsimile thereof shall be engraved or
otherwise reproduced thereon. The Certificate of Authentication shall be
manually signed by the Trustee. No bonds shall be issued under this Agreement
other than the Bonds.
In case any officer whose manual or facsimile signature shall appear on any
Bond shall cease to be such officer before the delivery thereof, such manual or
facsimile signature shall nevertheless be valid and sufficient for all purposes
as if he or she had remained in office until after such delivery.
The Bonds shall be issued in fully registered form and shall be numbered
from R-1 upwards in the order of their issuance, or in any other manner deemed
appropriate by the Trustee. The Bonds shall be dated the date of original
delivery thereof and shall mature on July 1, 2016. The interest on Bonds until
they come due shall be payable on the Interest Payment Dates applicable to the
Mode the Bonds are in from time to time. Interest on overdue principal or
premium, if any, of any Bond shall bear interest at the rate last established
for that Bond before the principal or premium became overdue until duly paid or
provided for, but unpaid interest shall not continue to bear interest after its
due date. The Bonds shall be initially in the Weekly Mode.
Except as a result of a partial redemption, the Bonds shall be in the
denomination of $100,000 or any integral multiple of $5,000 in excess of
$100,000 in the Weekly Mode and, except as provided below, after the Fixed Rate
Conversion Date.
Notwithstanding anything herein to the contrary, prior to the Fixed Rate
Conversion Date, the Bonds may only be transferred by a person (other than the
Remarketing Agent) either (i) pursuant to a tender as described herein or (ii)
to a Financial Institution, which signs and delivers to the Trustee an
investment letter in substantially the form attached hereto as Exhibit A.
On or after the Fixed Rate Conversion Date the Bonds may be issued in
denominations of five thousand dollars ($5,000) or any integral multiple thereof
only upon delivery to the Trustee of (A) a disclosure document relating to the
Bonds, and (B) an opinion or opinions of independent counsel to the effect that
such disclosure document fairly and accurately describes the Bonds, the security
for the Bonds and the financing documents relating to the Bonds and such
security, and that the disclosure document (except the financial and statistical
data therein as to which no opinion need be expressed) does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances in which they were
made, not misleading, and (C) a certificate of the Borrower that the Borrower
has undertaken to provide continuing disclosure information as required by
-33-
<PAGE>
United States Securities and Exchange Commission Rule (S)15c2-12, 17 C.F.R.
(S)240.15c2-12 as in effect from time to time (the "Rule") as in effect on the
Fixed Rate Conversion Date or an opinion of nationally recognized bond counsel,
who may be counsel to the Issuer, the Remarketing Agent or the Trustee, to the
effect that compliance with the Rule is not required.
The Bonds are subject to redemption as described in Section 310 and in the
forms of Bonds.
(c) Registration of Bonds in the Book-Entry Only System. (i) Notwithstanding
---------------------------------------------------
any provision herein to the contrary, the provisions of this Subsection 301(c)
and the Representation Letter (as defined below) shall apply with respect to any
Bond registered to CEDE & CO. or any other nominee of The Depository Trust
Company ("DTC") while the Book-Entry Only System (meaning the system of
registration described in paragraph (ii) of this Subsection 301(c)) is in
effect. The Book-Entry Only System shall be in effect for any Mode if so
specified by the Borrower prior to conversion to that Mode, subject to the
provisions below concerning termination of the Book-Entry Only System. Until it
revokes such specification in its discretion, the Borrower hereby specifies that
the Book-Entry Only System shall be in effect while the Bonds are in Weekly and
Fixed Rate Modes.
(ii) The Bonds in or to be in the Book-Entry Only System shall be issued in
the form a of separate single authenticated fully registered Bond for each
stated maturity in substantially the forms provided for in Subsection 301(a).
Any legend required to be on the Bonds by DTC may be added by the Trustee. On
the date of original delivery thereof, the Bonds shall be registered in the
registry books of the Trustee in the name of CEDE & CO., as nominee of The
Depository Trust Company as agent for the Issuer in maintaining the Book-Entry
Only System. With respect to Bonds registered in the registry books kept by the
Trustee in the name of CEDE & CO., as nominee of DTC, the Issuer, the Borrower,
the Remarketing Agent and the Trustee shall have no responsibility or obligation
to any Participant (which means securities brokers and dealers, banks, trust
companies, clearing corporations and various other entities, some of whom or
their representatives own DTC) or to any Beneficial Owner (which means, when
used with reference to the Book-Entry Only System, the person who is considered
the beneficial owner of the Bonds pursuant to the arrangements for book entry
determination of ownership applicable to DTC) with respect to the following: (A)
the accuracy of the records of DTC, CEDE & CO. or any Participant with respect
to any ownership interest in the Bonds, (B) the delivery to or from any
Participant, any Beneficial Owner or any other person, other than DTC, of any
notice with respect to the Bonds, including any notice of redemption or tender
(whether mandatory or optional), or (C) the payment to any Participant, any
Beneficial Owner or any other person, other than DTC, of any amount with respect
to the principal or premium, if any, or interest on the Bonds or the Purchase
Price. The Trustee shall pay all principal of and premium, if any, and interest
on the Bonds or the Purchase Price only to or upon the order of DTC, and all
such payments shall be valid and effective fully to satisfy and discharge the
Issuer's obligations with respect to the principal of and premium, if any, and
interest on Bonds to the extent of the sum or sums so paid. No
-34-
<PAGE>
person other than DTC shall be entitled to receive an authenticated Bond
evidencing the obligation of the Issuer to make payments of principal and
premium, if any, and interest pursuant to this Agreement. Upon delivery by DTC
to the Paying Agent of written notice to the effect that DTC has determined to
substitute a new nominee in place of CEDE & CO., the words "CEDE & CO." in this
Agreement shall refer to such new nominee of DTC.
(iii) Upon receipt by the Trustee of written notice from DTC to the
effect that DTC is unable or unwilling to discharge its responsibilities, the
Issuer shall issue and the Trustee shall transfer and exchange Bonds as
requested by DTC in appropriate amounts and in authorized denominations, and
whenever DTC requests the Issuer and the Trustee to do so, the Trustee and the
Issuer will, at the expense of the Borrower, cooperate with DTC in taking
appropriate action after reasonable notice to make available for transfer and
exchange Bonds registered in whatever name or names and in whatever authorized
denominations as DTC shall designate.
(iv) The Borrower may terminate the services of DTC if the Borrower
determines that the Beneficial Owners shall be able to obtain Bond certificates
and shall terminate the services of DTC with respect to the Bonds upon receipt
of written notice from DTC that DTC has received written notice from Direct
Participants or Indirect Participants having interests in an aggregate amount of
not less than fifty (50%) of the aggregate principal amount of the then
outstanding Bonds to the effect that, continuation of the system of book-entry
transfers through DTC (or a successor securities depository) is not in the best
interests of the Beneficial Owners or that DTC is unable to discharge its
responsibilities with respect to the Bonds. In either event, the Borrower shall
notify DTC and the Trustee, whereupon DTC will notify the Participants of the
availability through DTC of Bond certificates. In such event, the Issuer shall
issue and the Trustee shall, at the expense of the Borrower, transfer and
exchange Bond certificates as requested by DTC in appropriate amounts and in
authorized denominations. Whenever DTC requests the Trustee to do so, the
Trustee will, at the expense of the Borrower, cooperate with DTC in taking
appropriate action after reasonable notice to make available for transfer and
exchange Bonds registered in whatever name or names and in whatever authorized
denominations as DTC shall designate.
(v) Notwithstanding any other provision of this Agreement to the contrary,
so long as any Bond is registered in the name of CEDE & CO., as nominee of DTC,
all payments with respect to the principal of, Purchase Price, premium, if any,
and interest on such Bond and all notices with respect to such Bond shall be
made and given, respectively, to DTC as provided in the Blanket Issuer Letter of
Representation dated February 13, 1995 (the "Representation Letter") from the
Issuer to DTC, as in effect from time to time.
(vi) Notwithstanding any provision in Section 310 to the contrary, so long
as the Bonds outstanding are held in the Book-Entry Only System, if less than
all of such Bonds of a maturity are to be redeemed upon any redemption of Bonds
hereunder, the particular Bonds or
-35-
<PAGE>
portions of Bonds of such maturity to be redeemed shall be selected by DTC in
such manner as DTC may determine.
(vii) So long as the Book-Entry Only System is in effect, a Beneficial
Owner who elects to have its Bonds purchased or tendered pursuant to the
Agreement shall effect delivery by causing a Participant to transfer the
Beneficial Owner's interest in the Bonds pursuant to the Book-Entry Only System.
The requirement for physical delivery of Bonds in connection with a demand for
purchase or a mandatory purchase will be deemed satisfied when the ownership
rights in the Bonds are transferred in accordance with the Book-Entry Only
System.
(viii) So long as the Book-Entry Only System is in effect, the
Remarketing Agent shall communicate to DTC information concerning the purchasers
of Tendered Bonds as may be necessary or appropriate, and, notwithstanding any
provision in the Representation Letter to the contrary, the Remarketing Agent
shall continue to remit to the Trustee interest rate determination information
pursuant to the terms of this Agreement.
(d) Weekly Mode.
-----------
(i) Determination of Weekly Rates. The Remarketing Agent shall
-----------------------------
determine the Weekly Rate as provided in the form of Weekly Bonds and, pursuant
to Section 6 of the Remarketing Agreement, shall notify the Trustee and the
Borrower thereof by telephonic notice on the Business Day preceding the
Effective Date of each change in the Weekly Rate, followed by a written
confirmation thereof by the Rem arketing Agent to the Trustee, the Borrower, and
the Issuer on the day the Weekly Rate is announced. Each determination and
redetermination of the Weekly Rate shall be conclusive and binding on the
Issuer, the Trustee, the Bank, the Borrower and the Bondowners.
If for any reason the Weekly Rate cannot be established for any Rate Period
as described above or is held invalid or unenforceable by a court of law, the
interest rate on the Bonds during such Rate Period will be a rate determined by
the Remarketing Agent which is not less than 90% nor more than 130% of the
Interest Index. If for any reason the interest rate on the Bonds for the
applicable Interest Rate Period cannot be established as described in the
preceding sentence, the interest rate on the Bonds for such Rate Period will
equal the Interest Index as determined by the Trustee, but the Trustee shall
have no obligation to determine such interest rate. If for any reason the
Remarketing Agent fails to announce the Effective Rate as provided herein for
any Rate Period, the Effective Rate for that Rate Period shall be the same as
the Effective Rate for the prior Rate Period. In no event shall the Weekly Rate
exceed the Maximum Rate.
(ii) Conversions from Weekly Mode. The Bonds in the Weekly Mode may be
----------------------------
converted in whole and not in part on any Interest Payment Date applicable to
the Weekly Mode at the election of the Borrower from the Weekly Mode to the
Fixed Rate Mode, as provided in the form of Weekly Bonds, so long as no Default
hereunder exists as certified to
-36-
<PAGE>
the Trustee by a Borrower Representative. Bonds to be converted to the Fixed
Rate Mode shall be supported by a Credit Facility. If Bonds are to be converted
to the Fixed Rate Mode, no such conversion shall be effective unless the
Borrower shall have delivered to the Trustee by 10:00 A.M. on the Fixed Rate
Conversion Date a Credit Facility in the minimum required face amount for the
Fixed Rate Mode as provided in Section 317 and with an expiration date not
earlier than one year from the Fixed Rate Conversion Date. Written notice of
the exercise of a conversion of Bonds from the Weekly Mode, of the new Credit
Facility and the proposed Fixed Rate Conversion Date, which date shall be an
Interest Payment Date under the Weekly Mode then in effect, shall be given by
the Borrower to the Issuer, the Trustee, the Bank, the Remarketing Agent and S&P
not fewer than forty-five (45) nor more than sixty (60) days prior to the
proposed Fixed Rate Conversion Date, which date shall be specified by the
Borrower in such notice. Notice of a conversion of Bonds from the Weekly Mode
and the mandatory tender of Bonds for purchase on such Fixed Rate Conversion
Date shall be given to the owners of all Outstanding Bonds (other than Pledged
Bonds) as provided in Subparagraph 301(d)(iv) (B) and the form of Weekly Bonds.
Conversions to the Fixed Rate Mode shall also be governed by Subsection 301(e).
Notwithstanding the foregoing, if the preconditions to conversion to the
Fixed Rate Mode established by the preceding paragraph are not met by 10:00 A.M.
on the Fixed Rate Conversion Date, the Trustee shall deem the proposed
conversion to have failed and shall immediately notify the Remarketing Agent,
and the Bonds shall remain in the Weekly Mode. In no event shall the failure of
Bonds to be converted to the Fixed Rate Mode for any reason be, in and of
itself, deemed to be a Default or Event of Default under this Agreement.
(iii) Bondowners' Option to Tender Bonds in Weekly Mode. Bonds in the
-------------------------------------------------
Weekly Mode are subject to tender, at the election of the owner thereof, in the
manner and subject to the limitations described in the form of Weekly Bonds.
Subject to any limitations set forth herein, the owners of Tendered Bonds shall
receive on the Delivery Date 100% of the principal amount of the Tendered Bonds
plus accrued interest to the Purchase Date, provided that if the Purchase Date
is an Interest Payment Date, accrued interest shall be paid separately, and not
as part of the Purchase Price on such date. The purchase of Tendered Bonds
shall not extinguish the debt represented by such Bonds which shall remain
Outstanding and unpaid under this Agreement.
The obligation and liability of the Trustee to make any payments hereunder
shall be limited to amounts transferred to the Trustee by the Borrower, the
Remarketing Agent and the Bank.
The Trustee shall accept all Tendered Bonds properly tendered to it for
purchase as provided in the form of Weekly Bonds and in this Paragraph
301(d)(iii), or for so long as the Bonds are in the Book-Entry Only System,
Bonds shall be deemed tendered if Bonds are transferred as provided in Paragraph
301(c)(vii); provided, however, that the Trustee shall not accept any Tendered
Bonds and the Purchase Price therefor shall not be paid if at the time of
-37-
<PAGE>
tender or on the Purchase Date the principal of the Bonds shall have been
accelerated pursuant to Section 602 and such acceleration shall not have been
annulled.
The Bondowner's Election Notice delivered to the Trustee as provided in the
form of Weekly Bonds prior to the Purchase Date of Tendered Bonds shall be in
substantially the form provided in the form of Weekly Bond or such other form as
the Trustee may accept.
As soon as practicable after receiving notice of a tender of Bonds under
this section, the Trustee shall notify the Remarketing Agent, the Borrower and
the Bank by telephone promptly confirmed in writing of the amount of Tendered
Bonds and the specified Purchase Date.
(iv) Events Requiring Mandatory Tender of Weekly Bonds.
-------------------------------------------------
(A) Expiration of Credit Facility Without Substitution or Replacement;
------------------------------------------------------------------
Substitution of Credit Facility. The Bonds in the Weekly Mode are subject to
- -------------------------------
mandatory tender for purchase as provided in the form of Weekly Bonds in
connection with the expiration or termination of the Credit Facility and failure
by the Borrower to provide for the delivery to the Trustee of a substitute
Credit Facility or an extension of the existing Credit Facility at least forty-
five (45) days prior to the Interest Payment Date preceding the expiration or
termination date of the Letter of Credit then in effect and, connection with the
substitution of a Credit Facility, unless the Trustee receives written notice
from S&P, if the Bonds are then rated by S&P, that such substitution will not
result in a reduction or withdrawal of the ratings on the Bonds. Not more than
forty-four (44) days prior to the mandatory tender date, and not less than
thirty (30) days prior to the mandatory tender date, the Trustee shall give
notice to the Bondowners of the mandatory tender of Bonds pursuant to this
Paragraph 301(d)(iv).
(B) Change in Mode. In the event that Bonds in the Weekly Mode are
--------------
converted to the Fixed Rate Mode, such Bonds are subject to mandatory tender for
purchase upon not more than 44 days and not less than 30 days prior written
notice from the Trustee to the Bondowners as provided in the form of Bonds,
which notice shall state that the Bonds are subject to mandatory tender for
purchase.
(e) Conversion to Fixed Rate Mode. The interest rate on the Bonds may be
-----------------------------
converted by the Borrower to the Fixed Rate as provided in the form of the
Weekly Bonds, Subsection 301(d), and this Subsection 301(e). Upon receipt of
the notice of conversion to the Fixed Rate Mode from the Borrower, the
Remarketing Agent shall determine the Fixed Rate not later than 2:00 P.M. two
(2) Business Days before the Fixed Rate Conversion Date. The Fixed Rate shall
be communicated by telephone notice by the Remarketing Agent to the Trustee and
the Borrower on the day that the Fixed Rate is determined, followed by a written
confirmation thereof to the Trustee, the Borrower and the Issuer. The Fixed
Rate shall be the lowest rate which in the judgment of the Remarketing Agent, on
the basis of prevailing financial market conditions, would permit the sale of
the Bonds being so converted at par as of the Effective Date on the basis of
their terms as converted.
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<PAGE>
On the date of determination thereof, the Remarketing Agent shall notify the
Borrower, the Issuer and the Trustee by telephone promptly confirmed in writing
of the Fixed Rate. The determination of the Fixed Rate shall be conclusive and
binding on the Issuer, the Trustee, the Borrower and the Bondowners. The first
interest payment date of Bonds converted to the Fixed Rate shall be a July 1 or
January 1 specified by the Borrower in writing to the Trustee which date is at
least two months but less than ten months after the Fixed Rate Conversion Date.
The Fixed Rate shall become effective on the Fixed Rate Conversion Date and
shall remain in effect for the remaining term of the Bonds.
Notwithstanding the foregoing, if the preconditions to conversion to the
Fixed Rate Mode established by this Subsection 301 (e) are not met by 11:00 A.M.
on the Fixed Rate Conversion Date, the Trustee shall deem the proposed
conversion to have failed and shall proceed as such under Paragraph 301(d)(ii).
Except to the extent prohibited by DTC while Bonds are in the Book-Entry
Only System, the Remarketing Agent shall, if it determines that such
serialization will achieve a lower net interest cost on the Bonds and upon
receipt of an opinion of Bond Counsel to the effect that such serialization will
not affect adversely the exclusion of interest on the Bonds from the gross
income of the Bondowners for federal income tax purposes, determine separate
Fixed Rates to be assigned to Bonds to be redeemed from sinking fund
installments in such amounts and in such years as the Remarketing Agent
determines will achieve the lowest net interest cost on the Bonds; provided,
however, that the principal amount of the Bonds to be so selected shall equal
the mandatory sinking fund installments therefor. Each Bond to be redeemed from
sinking fund installments in the years to which a particular Fixed Rate is
assigned shall be deemed to mature on the last date on which any Bond bearing
interest at such Fixed Rate is to be redeemed from sinking fund installments.
The Remarketing Agent shall determine a separate Fixed Rate for each such
maturity of Bonds. On the date of determination thereof, the Remarketing Agent
shall notify the Trustee by telephone confirmed in writing of the amounts and
years assigned to the Bonds and the Fixed Rate. The Trustee shall promptly
notify the Borrower and the Issuer in writing of the assigned amounts and years
and the Fixed Rate, and the Issuer will execute and deliver and the Trustee will
authenticate new Bonds, in each case at the Borrower's sole expense. The
assignment of amounts and years and the determination of the Fixed Rate shall be
conclusive and binding on the Issuer, the Trustee, the Borrower and the
Bondowners.
(f) Cancellation and Destruction of Bonds. All Bonds paid or redeemed,
-------------------------------------
either at or before maturity, shall be delivered to the Trustee when such
payment or redemption is made, and such Bonds, together with all Bonds purchased
by the Trustee and all Bonds surrendered in any exchanges or transfers, shall
thereupon be promptly canceled. All Bonds acquired and owned by the Borrower
and delivered to the Trustee for cancellation shall be deemed paid and shall be
promptly canceled. Bonds so canceled may at any time be cremated or otherwise
destroyed by the Trustee, which shall execute a certificate of cremation or
destruction in duplicate by the signature of one of its authorized officers
describing the Bonds
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<PAGE>
so cremated or otherwise destroyed, and one executed certificate shall be filed
with the Borrower and the other executed certificate shall be retained by the
Trustee. The Trustee shall provide written notice to S&P, if the Bonds are then
rated by S&P, of the final payment or redemption of any of the Bonds, either at
or before maturity, upon cancellation of any such Bonds.
(g) Replacement of Bonds. Replacement Bonds shall be issued pursuant to
--------------------
applicable law as a result of the destruction, loss or mutilation of the Bonds.
The costs of a replacement shall be paid or reimbursed by the applicant, who
shall indemnify the Issuer, the Trustee, the Remarketing Agent and the Borrower
against all liability and expense in connection therewith.
(h) Interest on Overdue Principal. Any overdue principal of any Bond shall
-----------------------------
bear interest after its maturity or acceleration at the last interest rate
established for that Bond before the principal became due.
Section 302. Application of Bond Proceeds. The proceeds of the sale
----------- ----------------------------
of the Bonds shall be deposited in the Construction Fund, constituting the Loan
of the proceeds of the Bonds by the Issuer to the Borrower.
Section 303. Tax Status of Bonds. The Borrower will perform its
----------- -------------------
obligations and agreements contained in the Federal Tax Statement as if they
were set forth herein. All representations of the Borrower in the Federal Tax
Statement shall be treated as if they were set forth herein. At the Borrower's
expense, the Issuer will cooperate with the Bondowners and the Borrower to the
extent deemed necessary or permitted by law in the opinion of Bond Counsel to
the Issuer in order to preserve the exclusion of interest on the Bonds from the
gross income of the owners thereof for federal income tax purposes.
Section 304. Bond Fund.
----------- ---------
(a) Establishment and Purpose. A Bond Fund is hereby established with the
-------------------------
Trustee and moneys shall be deposited therein as provided in this Agreement or
in the Reimbursement Agreement or the related documents between the Borrower and
the Bank. The Borrower hereby grants to the Trustee for the benefit of the
Bondowners and the Bank a security interest in all deposits in the Bond Fund.
The Trustee acknowledges that it holds the Bond Fund as agent for the Bondowners
and the Bank, as their interests may appear. The moneys in the Bond Fund and
any investments held as part of such Fund shall be held in trust and, except as
otherwise provided in this Agreement, shall be applied by the Trustee solely (i)
to pay principal of, premium, if any, or interest on, the Bonds or (ii) to
reimburse the Bank for amounts drawn under the Credit Facility for the payment
of principal (including sinking fund installments) of, premium, if any, or
interest on the Bonds which reimbursements, to the Bank may be made with non-
Eligible Funds. Notwithstanding any provision contained in this Agreement to
the contrary, the moneys in the Bond Fund (excluding earnings thereon) shall be
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<PAGE>
applied pursuant to the terms of the preceding sentence with the result that at
least once per every thirteen months the moneys in the Bond Fund (excluding
earnings thereon) shall be depleted. Earnings in the Bond Fund shall be
expended within one year of receipt. Amounts not so expended within such
periods shall thereafter be invested at a Yield not exceeding the Yield on the
Bonds until so expended, which yield restriction may be obtained through yield
reduction payments pursuant to Treas. Reg. 1.148-5. The Trustee shall keep
separate accounts as to (A) the Credit Facility Fund; (B) all moneys in the Bond
Fund and Construction Fund and any earnings thereon which constitute Eligible
Funds; and (C) all other moneys in the Bond Fund and Construction Fund,
including investment earnings thereon. Proceeds of drawings upon the Credit
Facility shall not be deposited in the Bond Fund, but shall be held by the
Trustee in the Credit Facility Fund pursuant to Paragraph 308(c)(iii) and
applied as provided in this Agreement.
(b) Reserved.
---------
(c) Unclaimed Moneys. Except as may otherwise be required by applicable
----------------
law, in case any moneys deposited with the Trustee for the payment of the
Purchase Price or principal of, premium, if any, or interest on any Bond remain
unclaimed for two years after such Purchase Price, principal, premium or
interest has been paid or has become due and payable, the Trustee may, and upon
receipt of a written request by a Borrower Representative shall, pay over to the
Borrower the amount so deposited and thereupon the Trustee and the Issuer shall
be released from any further liability with respect to the payment of such
Purchase Price or principal, premium or interest and the owner of such Bond
shall be entitled (subject to any applicable statute of limitations) to look
only to the Borrower as an unsecured creditor for the payment thereof.
Section 305. Rebate Fund; Payment of Rebate.
----------- ------------------------------
(a) General. The Borrower covenants that it shall take all action
-------
necessary to comply with IRC Section 148, including the payment when due of all
amounts payable to the United States thereunder, and shall refrain from taking
any action contrary to the applicable provisions of the IRC. For this purpose, a
Rebate Fund has been established pursuant to this section, but to the extent any
of the provisions of this section are inconsistent with the IRC, the Borrower
shall not be required to comply with such provisions. The Trustee shall be
entitled to presume that the provisions of this section are not inconsistent
with the IRC until, and except to the extent, it is provided with a written
opinion to the contrary from Bond Counsel satisfactory to the Trustee.
(b) Establishment of Rebate Fund. A Rebate Fund is hereby established
----------------------------
with the Trustee. Such fund shall be for the sole benefit of the United States
of America and shall not be subject to the lien of this Agreement or to the
claim of any other person, including without limitation the Bondowners and the
Issuer. The Rebate Fund is established for the purpose of compliance with IRC
Section 148 including but not limited to IRC Section 148(f). The
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<PAGE>
Borrower and the Issuer agree that the requirements of this Section 305 are
subject to, and shall be interpreted in accordance with IRC Section 148 and,
where particularly applicable, IRC Section 148(f).
(c) Payment of Rebate.
-----------------
(i) Promptly after the close of each month, the Trustee shall provide the
Borrower with a statement of each investment made in each fund and the earnings
on each fund and account established under the Agreement for such month in such
detail as will allow the Borrower to comply with the requirements of IRC Section
148.
(ii) Not later than 15 days prior to each date on which a payment could
become due under subsection (iii) below (a "Rebate Payment Date"), the Borrower
shall deliver to the Trustee (A) a copy of the Form 8038 originally filed with
respect to the Bonds, (B) a statement summarizing the determination of the
amount then required to be paid pursuant to subsection (iii) below, if any, (C)
a certificate of an independent certified public accountant or other
professional with experience in compliance with IRC Section 148 with respect to
rebate or yield reduction payments, as to the accuracy of such determination or
such other evidence of compliance as may be acceptable to the Trustee in
advance, (D) an execution copy of IRS Form 8038-T (or similar information
reporting form), if required, and (E) if the amount then held in the Rebate Fund
is less than the amount so determined, an amount in immediately available funds
on such 15th day equal to the difference. Upon receipt of such materials, the
Trustee shall make the payment provided for in said subsection (iii). In the
event that the Trustee shall not have received all of such materials on or
within five days following the period specified in the first sentence of this
subsection (ii), it shall pay over to the United States within the period
prescribed in subsection (iii) below all of the funds then held in the Rebate
Fund, and, if so provided by the Borrower, items (A) and (B) described in this
subsection.
(iii) The Borrower shall direct the Trustee to pay rebate or yield
reduction payments from amounts available in the Rebate Fund to the United
States of America not later than 30 days after the close of the fifth Bond Year,
and at least once in each five-year period thereafter, on behalf of the Issuer
an amount (specified in such direction) that ensures that at least 90% of the
Excess Earnings (as that term is defined in Section IRC 148(f)) from the Date of
Issuance to the close of the period for which the payment is being made will
have been paid. The Borrower shall direct the Trustee to pay from amounts
available in the Rebate Fund to the United States of America no later than 60
days after the Bonds have been paid in full on behalf of the Issuer 100% of the
amount then required to be paid under IRC Section 148. The Issuer shall direct
the Trustee that each such payment shall be filed with the Internal Revenue
Service Center, Philadelphia, PA 19255, or at such other place as may be
prescribed by the IRC. Each payment shall be accompanied by a copy of the
Internal Revenue Service Form 8038 originally filed with respect to the Bonds,
an execution copy of IRS Form 8038-T (or similar information reporting form), if
required, and a statement summarizing the determination of the amount then
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<PAGE>
required to be paid, which form and statement shall be provided to the Trustee
by the Borrower. All such directions from the Borrower to the Trustee shall be
in writing.
(iv) As used in this Section 305, "Bond Year" shall mean each 12-month
period following the original delivery date of the Bonds.
(v) The Trustee assumes no responsibility whatsoever for compliance by the
Borrower or the Issuer with the requirements of IRC Section 148. Each of the
Borrower and the Issuer expressly agrees that (notwithstanding any other
provision of this Agreement) any failure of the Trustee to give any such notice,
for any reason whatsoever, shall not cause the Trustee to be responsible for any
failure of the Borrower or the Issuer to comply with the requirements of said
IRC Section 148. The Trustee shall not be responsible for making or verifying
the calculations or for determining whether the investment directions given by
the Borrower comply with IRC Section 148.
(vi) The Borrower and the Trustee, on behalf of the Issuer, shall keep such
records as will enable them to fulfill their respective responsibilities under
this Section and IRC Section 148 and shall retain such records for at least six
years following the final payment of principal on the Bonds. For purposes of
the computation required by this section, the Trustee shall make available to
the Borrower and the Issuer during normal business hours, and upon reasonable
notice, all information in the Trustee's control which is necessary to such
computations.
(vii) Notwithstanding anything in this section to the contrary, and in
furtherance of the purposes of the last sentence of Section 305(b), the Trustee,
at the written direction of the Borrower, will provide to the United States of
America at such times and at such places as the Borrower may direct such
additional materials as the Borrower may instruct the Trustee in writing to
deliver to the United States of America; provided, that the Trustee need take no
--------
action under this subsection (vii) unless the Borrower shall have delivered to
the Trustee in writing such materials and the address or addressees to which
such materials are to be sent by the Trustee no later than 15 days prior to the
date on which delivery of such materials is to be received by the United States
of America.
Section 306. Reserved.
----------- --------
Section 307. Application of Moneys. If, in addition to moneys drawn
----------- ---------------------
on the Credit Facility (if any), available moneys in the Bond Fund are not
sufficient on any day to pay all principal, premium, if any, and interest on the
Outstanding Bonds then due or overdue, such moneys shall, after payment of all
amounts owing to the Trustee and the Issuer or their respective directors,
officers, employees or agents under this Agreement, be applied first to the
payment of interest, including interest on overdue principal, in the order in
which the same became due (pro rata with respect to interest which became due at
the same time) and second to the payment of principal and redemption premiums,
if any, without regard to the order in
-43-
<PAGE>
which the same became due in each case pro rata among Bondowners, provided,
however, that amounts drawn on the Credit Facility (if any) shall be applied
exclusively to pay interest, premium, if any, and principal on Bonds in
accordance with the Credit Facility. In the event there exist Pledged Bonds or
Borrower Bonds on the date of any application of moneys under this section,
moneys otherwise to be paid to the Borrower or to the Bank pursuant to this
section shall be applied (subject to Section 308(c)(iii)) as follows: first, so
long as all payments due on Bonds supported by a Credit Facility have been made,
pro rata to all Bondowners other than the Borrower (but including the Bank),
otherwise first, pro rata to all Bondowners other than the Bank and the
Borrower, second (and irrespective of which clause first applies), if any
balance remains, to the Bank in fulfillment of any obligations owed to it under
the Reimbursement Agreement and the Pledged Bonds (to the extent not covered by
clause first and so long as there is no duplication of recovery), and third, if
any further balance remains, to the Borrower in respect of any Borrower Bonds.
Whenever moneys are to be applied pursuant to this section, such moneys shall be
applied at such times, and from time to time, as the Trustee in its discretion
shall determine, having due regard to the amount of such moneys becoming
available for such application and the likelihood of additional moneys becoming
available for such application in the future. Whenever the Trustee shall
exercise such discretion it shall fix the date (which shall be the first day of
a month unless the Trustee shall deem another date more suitable) upon which
such application is to be made, and upon such date interest on the amounts of
principal paid on such date shall cease to accrue. Whenever overdue interest is
to be paid on the Bonds, the Trustee may establish a special record date as
provided in the forms of Bonds. The Trustee shall give such notice as it may
deem appropriate of the fixing of any such date and special record date. When
interest or a portion of the principal is to be paid on an overdue Bond, the
Trustee may require presentation of the Bond for endorsement of the payment.
Prior to any payment to be made to the Bank pursuant to clause second of the
sixth preceding sentence, the Trustee may require a certificate from the Bank as
to amounts due under the Reimbursement Agreement, and the Trustee may rely
conclusively thereon.
Section 308. Payments by the Borrower.
----------- ------------------------
(a) Payments of Debt Service by the Borrower.
----------------------------------------
(i) While the Bonds are in the Weekly Mode, the Borrower shall make Loan
payments in immediately available funds to the Trustee for deposit in the Bond
Fund no later than 12:00 Noon Boston, Massachusetts time on each Interest
Payment Date in an amount equal to the interest payment then coming due on such
Bonds plus one-twelfth (1/12) of the principal next or then coming due on the
Bonds (including principal coming due by redemption pursuant to Subsection
310(e)). While the Bonds are in the Fixed Rate Mode, the Borrower shall make
payments not later than the last day of each month in an amount equal to the sum
of one-sixth (1/6) of the interest next coming due on the Bonds plus one-twelfth
(1/12) of the principal next coming due on the Bonds (including principal coming
due by redemption pursuant to Subsection 310(e)). Any premium due upon
redemption shall be paid not later than
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<PAGE>
two Business Days prior to the redemption date. The Borrower may
make payments to the Bond Fund earlier than required by this section, but such
payments shall not affect the accrual of interest.
(ii) The payments to be made under the foregoing paragraph shall be
appropriately adjusted to reflect the date of issue of Bonds, the date of
conversion of the Bonds to the Fixed Rate Mode, accrued interest deposited in
the Bond Fund, if any, and any purchase or redemption of Bonds. The Borrower
shall make payments to the Trustee for deposit in the Bond Fund so that there
will be available in immediately available funds no later than 12:00 Noon
Boston, Massachusetts time on each payment date the amount necessary to pay the
interest, principal and redemption premium, if any, due or coming due on the
Bonds.
(iii) At any time when any principal of the Bonds is overdue, the Borrower
shall also have a continuing obligation to pay to the Trustee for deposit in the
Bond Fund an amount equal to interest on the overdue principal but the
installment payments required under this section shall not otherwise bear
interest. Redemption premiums shall not bear interest.
(iv) In any event the Loan payments shall be sufficient to pay the total
principal of, premium, if any, and interest on the Bonds as and when due. If at
any time when said payments are due the balance in the Bond Fund available for
said purpose is insufficient to make such Loan payments, the Borrower will
forthwith pay to the Trustee (in immediately available funds) any such
deficiency. The Borrower shall not be required to make any Loan payment to the
extent its application would result in an excess in the Bond Fund over the
amounts necessary to meet its obligations then due and payable plus any
additional amounts then required to be maintained in the Bond Fund.
(v) The Borrower shall pay to the Trustee for deposit in the Rebate Fund
the amounts required by Section 305 at the times required thereby.
(b) Additional Payments.
-------------------
(i) The Borrower shall pay the Issuer on demand for reimbursement of any
and all costs, expenses and liabilities reasonably paid or incurred by the
Issuer, including reasonable fees of counsel and disbursements thereof, in
satisfaction of any obligations of the Borrower not performed by the Borrower as
required hereunder.
(ii) The Borrower shall pay the Issuer on demand for reimbursement or
prepayment of any and all costs, expenses and liabilities paid or incurred or to
be paid or incurred by the Issuer or any of its directors, officers, employees
or agents, including reasonable fees of counsel and disbursements thereof, and
requested by the Borrower or required by this Agreement or required by the Act
with respect to the Bonds or the Project.
(iii) The Borrower shall pay the Trustee on demand for reimbursement or
prepayment of any and all fees, costs, expenses and liabilities paid or incurred
or to be paid or
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<PAGE>
incurred by the Trustee, including reasonable fees of counsel and disbursements
thereof, in the performance of its duties hereunder.
(c) Drawings on the Credit Facility.
-------------------------------
(i) Debt Service. If a Credit Facility is available for the Bonds, the
------------
Trustee shall not later than 3:00 p.m., Boston, Massachusetts time, on the
Business Day next preceding any date on which payments of the principal of,
premium, if any, or interest on the Bonds are due, whether at maturity, on an
Interest Payment Date, by acceleration, redemption, or otherwise, draw on the
Credit Facility an amount sufficient to pay in full the principal, premium, if
any, and interest then coming due on the Bonds. The Trustee shall immediately
notify the Borrower by telephone promptly confirmed in writing if it has not
been paid by the Bank for such a draw on the Letter of Credit by noon Boston,
Massachusetts time on the date such payment on the Bonds is due.
(ii) Tenders for Purchase. Except as provided in Paragraph 308(c)(i),
--------------------
drawings on the Credit Facility for the purchase of Bonds tendered for mandatory
purchase pursuant to Paragraph 301(d)(iv) or for Bonds tendered for purchase at
the Bondowner's election pursuant to Paragraph 301(d)(iii) shall be made
pursuant to Subsection 311(a).
(iii) Use of Credit Facility. A Credit Facility Fund is hereby
----------------------
established. All amounts received by the Trustee under any Credit Facility
shall be held in trust in the Credit Facility Fund separate and apart from all
other amounts held by the Trustee, shall remain uninvested and shall be used
solely to pay the Purchase Price or principal of, premium, if any, and interest
on the Bonds for which the Credit Facility is available. Principal and Purchase
Price of, premium, if any, and interest on Borrower Bonds and Pledged Bonds
shall not be paid from amounts drawn on a Credit Facility.
(d) Payment of Debt Service. The Trustee shall apply Eligible Funds,
-----------------------
and to the extent necessary other funds, from the Bond Fund for the payment of
principal, premium, if any, and interest payable on the Bonds (whether at
maturity, upon redemption or acceleration, on an Interest Payment Date, or
otherwise) as provided in Subsection 304(a) to the extent amounts drawn on the
Credit Facility are insufficient to pay the same. The Trustee shall apply to
the payment of principal, premium if any and interest on Bonds, moneys made
available to it in the following order: (i) moneys drawn on the Credit Facility,
(ii) Eligible Funds on deposit in the Bond Fund, and (iii) any other moneys in
the Bond Fund; provided, however, that except as specified in the next sentence,
in no event shall the Trustee use any moneys other than Eligible Funds to pay
principal of, premium, if any, or interest on Bonds supported by a Credit
Facility. If and to the extent that sufficient Eligible Funds, including moneys
drawn on the Credit Facility pursuant to this section and Section 605, are not
available to pay in full the principal of, premium, if any, and interest on the
Bonds supported by a Credit Facility, then other available moneys shall be so
used. Immediately after any payment on the Bonds is made from funds drawn under
the Credit Facility, the Trustee shall to the extent available pay to the
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<PAGE>
Bank from amounts in the Bond Fund an amount equal to such payment on the Bonds
from the drawing on the Credit Facility. Each payment to the Bank described in
the immediately preceding sentence shall be made by the Trustee by wire transfer
to the Bank (to such account as the Bank may from time to time indicate) of the
applicable amount immediately following, and on the same Business Day as, the
Bank's initiation of payment of the corresponding drawing under the Credit
Facility.
In the event that principal of any Bonds (or that portion of the Purchase
Price corresponding to principal) is paid by the Bank pursuant to a drawing upon
the Credit Facility, and the Bank is not reimbursed therefor on the day of such
drawing in accordance with the Reimbursement Agreement, the Bank shall be deemed
the owner or the pledgee of such Bonds, as may be directed by the Bank, and such
Bonds shall, notwithstanding such payment, be deemed to remain Outstanding. In
the event that interest on (but not principal of) any Bond (or the portion of
the Purchase Price corresponding to interest) is paid by the Bank pursuant to a
drawing upon the Credit Facility, and the Bank is not reimbursed therefor on the
day of such drawing in accordance with the Reimbursement Agreement, the Bank
shall be deemed the owner of the rights to such interest on such Bonds, and such
Bonds, shall for such purpose be deemed to remain Outstanding. In any of such
events, the Bank shall be entitled to the full protection of this Agreement as
if it were such owner of Bonds or of interest on such Bonds, as the case may be.
(e) Borrower's Purchase of Bonds. If the amount drawn on the Credit
----------------------------
Facility and deposited with the Trustee, together with all other amounts
(including remarketing proceeds) received by the Trustee for the purchase of
Bonds supported by a Credit Facility and tendered pursuant to Paragraph
301(d)(iii) or (iv) is not sufficient to pay the Purchase Price of such Bonds on
the Purchase Date, the Trustee shall before 2:30 P.M. Boston, Massachusetts time
on such Purchase Date, notify the Borrower and the Remarketing Agent of such
deficiency by telephone promptly confirmed in writing. The Borrower shall pay
to the Trustee in immediately available funds by 3:00 P.M. Boston, Massachusetts
time on the Purchase Date an amount equal to the Purchase Price of such Bonds
less the amount, if any, available to pay the Purchase Price in accordance with
Section 311 from the proceeds of the remarketing of such Bonds or from drawings
on the Credit Facility, as reported by the Trustee. Bonds so purchased with
moneys furnished by the Borrower shall be Borrower Bonds.
Section 309. Unconditional Obligation. The obligation of the Borrower
----------- ------------------------
to make payments under this Agreement shall be absolute and unconditional, shall
be binding and enforceable in all circumstances whatsoever, shall not be subject
to setoff, recoupment or counterclaim, and shall be a general obligation of the
Borrower to which the full faith and credit of the Borrower are pledged. The
Borrower shall be obligated to make such payments whether or not the Project
becomes functional and whether or not the Project has ceased to exist or be
functional to any extent from any cause whatsoever. The Borrower shall be
obligated to make such payments regardless of whether they are in possession or
entitled to be in possession of the Project.
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<PAGE>
Section 310. Redemption of the Bonds.
----------- -----------------------
(a) Extraordinary Redemption Without Premium. To the extent moneys are
----------------------------------------
transferred to the Bond Fund pursuant to Section 403 or 408 or pursuant to the
provisions of the Reimbursement Agreement or any related documents between the
Borrower and the Bank relating to proceeds of the sale, lease or other
disposition of the Project (or a portion thereof) or receipt of certain
insurance or eminent domain proceedings relating to all or a portion of the
Project, the Borrower shall promptly direct the Trustee in writing to draw on
the Credit Facility to redeem Bonds in whole or in part on any date within 60
days at a redemption price of 100% of the principal amount of the Bonds
redeemed, plus accrued interest to the redemption date, and such moneys in the
Bond Fund (and earnings thereon) shall be used to reimburse the Bank for moneys
drawn on the Credit Facility, but only for payments of principal. If the amount
so transferred in any one calendar year is less than $100,000, the Trustee may,
and upon written direction of the Borrower shall, apply it to reimburse the Bank
for drawings on the Credit Facility for regularly scheduled payments of
principal instead of calling Bonds for redemption.
(b) Mandatory Redemption Without Premium in the Event of Act of
------------------------------------------------------------
Bankruptcy of the Bank. The Bonds shall also be redeemed if, within thirty
- ----------------------
(30) days of the occurrence of an Act of Bankruptcy of the Bank, a substitute
Credit Facility has not been issued to the Trustee. In such event, the Bonds
shall be redeemed in whole from Eligible Funds within one hundred thirty (130)
days after the occurrence of the Act of Bankruptcy of the Bank, at a redemption
price of 100% of the principal amount redeemed, plus accrued interest to the
redemption date.
(c) Mandatory Redemption in the Event of a Determination of Taxability.
------------------------------------------------------------------
The Bonds shall also be redeemed on any date prior to maturity upon the
occurrence of a Determination of Taxability. In such event, the Bonds shall be
redeemed in whole and not in part, from moneys drawn on the Credit Facility, as
soon as practicable and, in any event, within sixty (60) days after receipt of
notice by the Trustee, at a redemption price equal to (1) 100% of the principal
amount to be redeemed plus accrued interest to the date of redemption when the
Bonds bear interest at the Weekly Rate or the Bank Rate or (2) 103% of the
principal amount redeemed, plus accrued interest to the redemption date when the
Bonds bear interest at the Fixed Rate. If any Bonds are paid at maturity or
purchased by the Trustee or redeemed subsequent to a Tax Incidence Date without
payment of an amount at least equal to the redemption price that would have been
received if such Bonds had been redeemed as a result of a Determination of
Taxability, the owners of such Bonds at the time of maturity, purchase or
redemption, upon establishing their then ownership thereof, shall be entitled to
receive from the Borrower as a premium or as an additional premium thereon, as
the case may be, an amount equal to the difference between the amounts actually
received and the amounts that would have been received if such Bonds had been
redeemed as a result of a Determination of Taxability.
-48-
<PAGE>
(d) Optional Redemption. (1) Bonds shall be redeemed prior to maturity,
-------------------
at the option of the Borrower, in whole or in part on any date, only from moneys
drawn on the Credit Facility in the denomination of $5,000 or any integral
multiple thereof, at a redemption price equal to (A) on or prior to the Fixed
Rate Conversion Date, 100% of the principal amount to be redeemed, plus accrued
interest to the redemption date, without premium, or (B) from and after the
Fixed Rate Conversion Date on and after the dates and at the prices (expressed
as percentages of principal amount to be redeemed) set forth in the following
table, plus accrued interest to the redemption date:
Redemption Date Redemption Price
--------------- ----------------
First Optional Redemption Date 103%
First anniversary of the First
Optional Redemption Date 102%
Second anniversary of the First
Optional Redemption Date 101%
Third anniversary of the First
Optional Redemption Date 100%
provided, however, that if the number of years between the First Optional
Redemption Date and the final maturity date of the Bonds is less than ten, the
Bonds shall not be subject to optional redemption.
Except to the extent prohibited by DTC procedures so long as any Bond is in
the Book-Entry Only System, the Remarketing Agent may, by giving written notice
to the Trustee at the time the Borrower gives notice of conversion of the Bonds
to the Fixed Rate, establish such revised optional redemption dates as the
Remarketing Agent shall, having due regard for prevailing financial market
conditions, deem appropriate. Notwithstanding anything to the contrary contained
herein, no such notice shall be effective unless the Borrower shall have
delivered to the Trustee at the time of delivery of such notice (1) a written
opinion of Bond Counsel to the effect that the establishment of such revised
optional redemption dates and premiums is lawful under the Act and permitted by
this Agreement and does not affect the exclusion of the interest on the Bonds
from gross income for federal income tax purposes, and (2) a resolution of the
Issuer approving such revised optional redemption dates. Upon the satisfaction
of such conditions, the revised optional redemption dates and premiums shall be
binding upon the Issuer, the Borrower, the Bondowners, the Trustee and the
Remarketing Agent.
(2) At any time during which Bonds are Pledged Bonds, the Bonds which
are Pledged Bonds shall be redeemed at the option of the Borrower, in whole or
in part on any
-49-
<PAGE>
date in integral multiples of $5,000 at a redemption price equal to 100% of the
principal amount redeemed, plus accrued interest to the redemption date.
(e) Scheduled Mandatory Redemption Without Premium. The Bonds are
----------------------------------------------
also subject to scheduled mandatory redemption on July 1 of each of the years
set forth below, at a redemption price equal to 100% the principal amount
redeemed, plus accrued interest to the redemption date, in the principal amounts
set forth below:
<TABLE>
<CAPTION>
Year Principal Amount Year Principal Amount
---- ---------------- ---- ----------------
<S> <C> <C> <C>
1997 $180,000 2007 $180,000
1998 $180,000 2008 $180,000
1999 $180,000 2009 $180,000
2000 $180,000 2010 $180,000
2001 $180,000 2011 $180,000
2002 $180,000 2012 $180,000
2003 $180,000 2013 $180,000
2004 $180,000 2014 $180,000
2005 $180,000 2015 $180,000
2006 $180,000 *2016 $150,000
</TABLE>
- -----------------------
* final maturity
(f) Mandatory Redemption Without Premium--Expiration of Credit Facility.
-------------------------------------------------------------------
The Bonds in the Fixed Rate Mode are also subject to redemption in whole and not
in part prior to maturity from funds drawn on the expiring Credit Facility in
the event of the expiration of the Credit Facility and failure by the Borrower
to provide for delivery to the Trustee of a substitute Credit Facility or an
extension of the existing Credit Facility at least forty-five (45) days prior to
the Interest Payment Date immediately preceding the expiration date of the
Credit Facility then in effect. In any such event the Bonds shall be redeemed
in whole and not in part on such Interest Payment Date at a redemption price
equal to 100% of the principal amount redeemed, plus accrued interest to the
redemption date.
(g) Selection of Bonds to Be Redeemed. (1) Subject to paragraph (2)
---------------------------------
below, in the event of any partial redemption the Bonds shall be redeemed in
inverse order of maturity or, in the case of a redemption of a maturity for
which mandatory sinking fund installments have been established, such redemption
shall reduce the mandatory sinking fund redemption obligation in inverse order
of payment, and within any maturity the particular Bonds or portions thereof to
be redeemed shall be selected by the Trustee not more than sixty (60) days prior
to the redemption date by lot. The Trustee may provide for the selection for
redemption of portions (equal to $5,000 or any whole multiple thereof) of Bonds
of a denomination larger than $5,000. In no event shall the principal amount of
Bonds subject to any partial redemption
-50-
<PAGE>
be other than a whole multiple of $5,000. So long as CEDE & CO., as nominee of
the Depository Trust Company ("DTC"), is the Bondowner, the particular Bonds or
portions thereof to be redeemed within a maturity shall be selected by lot by
DTC, in such manner as DTC may determine.
(2) Notwithstanding the foregoing, Pledged Bonds shall be redeemed prior
to the redemption of any other Bonds.
(h) Notice by the Borrower. The Borrower shall give notice of
----------------------
redemption of Bonds under Subsection 310(a) or (d) to the Trustee, the Issuer,
the Bank and the Remarketing Agent and the Trustee shall give notice of
redemption of Bonds under Section 310(b) or (c) to the Borrower, the Issuer, the
Bank and the Remarketing Agent at least forty-five (45) days before the
redemption date for Bonds in the Weekly Mode and sixty (60) days before the
redemption date in the case of Bonds in the Fixed Rate Mode (45 days in the case
of Subsection 310(c).
(i) Payment of Redemption Price and Accrued Interest. Whenever Bonds are
------------------------------------------------
called for redemption, the accrued interest thereon shall become due on the
redemption date. To the extent not otherwise provided, the Borrower shall
deposit with the Trustee prior to the redemption date a sufficient sum in
Eligible Funds on the redemption date to pay the redemption price of and accrued
interest on the Bonds.
(j) Notice of Redemption. When Bonds are to be redeemed, the Trustee
--------------------
shall give notice to the Bondowners in the name of the Issuer, which notice
shall identify the Bonds to be redeemed, state the date fixed for redemption and
specify the office of the Trustee at which such Bonds will be redeemed. The
notice shall further state that on such date there shall become due and payable
upon each Bond to be redeemed the redemption price thereof, together with
interest accrued to the redemption date, and that moneys therefor having been
deposited with the Trustee, from and after such date, interest thereon shall
cease to accrue and that the Bonds or portions thereof called for redemption
shall cease to be entitled to any benefit under this Agreement except the right
to receive payment of the redemption price. The Trustee shall mail the
redemption notice no more than 60 days nor less than 30 days prior to the
redemption date, to the registered owners of any Bonds which are to be redeemed,
at their addresses shown on the registration books maintained by the Trustee.
Failure to mail notice to a particular Bondowner, or any defect in the notice to
such Bondowner, shall not affect the redemption of any other Bond.
Section 311. Purchase of Bonds Tendered.
----------- --------------------------
(a) Procedure.
---------
(i) Notice. The Trustee shall give immediate notice to the Remarketing
------
Agent of the tender of any Bonds, the principal amount of Bonds tendered and the
Purchase Date for the
-51-
<PAGE>
Tendered Bonds. The Remarketing Agent shall give notice to the Trustee
electronically or by telephone, and if by telephone, promptly confirmed in
writing, specifying the principal amount of Tendered Bonds as to which the
Remarketing Agent has found purchasers, the amounts the Remarketing Agent has
received for the purchase of Tendered Bonds, and any deficiency in amounts
available to pay the Purchase Price of Tendered Bonds at or before (A) 3:00 P.M.
Boston, Massachusetts time one (1) Business Day before the Purchase Date for
Tendered Bonds that are to be in the Weekly Mode immediately after the Purchase
Date, or (B) 2:00 P.M. Boston, Massachusetts time two (2) Business Days before
the Purchase Date for Tendered Bonds that are to be in the Fixed Rate Mode
immediately after the Purchase Date. The Remarketing Agent shall give written
notice to the Trustee of the names, addresses and taxpayer identification
numbers of the purchasers and the number and denominations of Bonds to be
delivered to each purchaser by 3:30 P.M. Boston, Massachusetts time one (1)
Business Day before the Purchase Date for Tendered Bonds to be in the Weekly
Mode immediately after the Purchase Date.
(ii) Sources of Payments. The Trustee shall draw upon the Credit Facility
-------------------
the amount necessary to purchase the Tendered Bonds for which the Remarketing
Agent has not received the Purchase Price not later than 3:30 P.M. Boston,
Massachusetts time one (1) Business Day before the Purchase Date. The
Remarketing Agent shall deliver to the Trustee all amounts received by the
Remarketing Agent as proceeds of the remarketing of Bonds at or before 10:00
A.M. Boston, Massachusetts time on the Purchase Date. If the Remarketing Agent
does not deliver to the Trustee proceeds of remarketing sufficient, together
with amounts received from draws under the Credit Facility, to pay in full the
Purchase Price of all Bonds due on the Purchase Date, the Trustee shall make an
additional draw on the Credit Facility pursuant to Clause (a) of Section 602 and
thereafter the Borrower shall be liable for the shortfall.
(b) Payments by the Trustee. At or before the close of business on the
-----------------------
Delivery Date and upon receipt by the Trustee of the Purchase Price of the
Tendered Bonds that are delivered to it, the Trustee shall pay the Purchase
Price of the Bonds to the registered owners thereof as provided in the
applicable form of Bonds. The Trustee shall apply in order, first, moneys paid
to it by the Remarketing Agent or by new purchasers of the Bonds tendered as
proceeds of the remarketing of such Bonds by the Remarketing Agent, second,
moneys drawn on the Credit Facility for the purpose of purchasing Tendered Bonds
(including amounts drawn on the Credit Facility to pay accrued interest on the
Tendered Bonds), and third, moneys paid to it by the Borrower. If sufficient
funds are not available for the purchase of all Bonds tendered on any Delivery
Date, no purchase shall be consummated.
Section 312. Remarketing of Bonds Tendered.
----------- -----------------------------
(a) General. While the Bonds are in the Weekly Mode, the Remarketing
-------
Agent shall solicit offers to purchase and use its best efforts to find a
purchaser for Tendered Bonds, Pledged Bonds and Borrower Bonds, provided that
Bonds shall not be remarketed to the
-52-
<PAGE>
Issuer, the Borrower, any guarantor of the Bonds (other than the Bank) or
"insiders" of any of them as that term is defined in the United States
Bankruptcy Code. Any such purchase shall be made by payment of the Purchase
Price in immediately available funds to the Trustee at the time specified in
Paragraph 311(a)(ii). The Purchase Price shall be equal to the principal amount
to be purchased together with the interest accrued on such principal amount to
the Purchase Date. By 2:00 P.M. Boston, Massachusetts time, on the Purchase
Date, Bonds remarketed under this section shall be made available by the Trustee
to the purchasers thereof and shall be registered in the manner directed by the
recipient thereof, provided that such Bonds shall not be delivered unless and
until the Trustee has received the Purchase Price therefor. Bonds not remarketed
shall be held by the Trustee. Bonds previously purchased with moneys drawn under
the Credit Facility shall not be released by the Trustee upon remarketing unless
the Trustee has received written evidence from the Bank that the Credit Facility
has been reinstated as provided in the following paragraph.
Bonds the Purchase Price of which is paid for with funds drawn on the Credit
Facility pursuant to Paragraph 311(a)(ii) shall be registered to the Bank, or
its designee, as pledgee, by the Trustee (whether or not such Bonds are
delivered by the tendering Bondowner) as security for the reimbursement of the
Bank for moneys drawn under the Credit Facility and shall be "Pledged Bonds."
Bonds the Purchase Price of which is paid for with funds provided by the
Borrower pursuant to Section 308(e) or Section 311(a)(ii) shall be registered in
the name of the Borrower by the Trustee and shall be "Borrower Bonds". Borrower
Bonds shall be held by the Trustee for the account of the Borrower until
transferred pursuant to this Section 312 or canceled pursuant to written
instructions of the Borrower. Pledged Bonds and Borrower Bonds shall be
registered as such on the books and records maintained by the Trustee for
registration of Bonds, but the Trustee shall not be required to authenticate or
deliver Pledged Bonds or Borrower Bonds, except that it shall authenticate and
deliver Pledged Bonds pursuant to written instructions received from the Bank.
Any Borrower Bonds that remain unsold for a period of ninety (90) days (or such
longer period as may be approved (under Massachusetts and federal law) in a
written opinion of Bond Counsel reasonably acceptable to the Trustee) shall be
automatically deemed canceled. Upon receipt by the Trustee of notice from the
Remarketing Agent that a purchaser has been found for Pledged Bonds or Borrower
Bonds held by the Trustee, the Trustee shall register and deliver such Bonds to
such purchaser (at which time such Bonds shall cease to be Pledged Bonds or
Borrower Bonds) upon receipt by the Trustee of the Purchase Price of such Bonds,
provided, however, that no Pledged Bond or Borrower Bond shall be so registered
and delivered unless the Trustee has received from the Bank a written notice of
the reinstatement of the principal and interest component of the Credit
Facility. The Trustee shall immediately notify by telephone (subsequently
confirmed in writing) the Remarketing Agent whenever (i) it is prohibited from
registering and delivering Bonds pursuant to this Agreement and (ii) if the
Trustee has been so prohibited, upon the restoration of its power hereunder to
register and deliver Bonds. Bonds purchased with moneys drawn under the Credit
Facility and registered to the Bank or its designee pursuant to the Pledge
Agreement shall be delivered to and held by the Bank and shall not be
subsequently transferred or assigned by the Bank except as provided in this
Section 312.
-53-
<PAGE>
(b) Remarketing of Bonds in the Weekly Mode Between Notice and
----------------------------------------------------------
Redemption or Conversion Date. No Bonds in the Weekly Mode scheduled to be
- -----------------------------
redeemed or converted to the Fixed Rate Mode may be remarketed under Subsection
312(a) after receipt by the Remarketing Agent of notice of redemption or
conversion of such Bonds to the Fixed Rate Mode from the Borrower unless the
Remarketing Agent, on or before the redemption date or Purchase Date, gives
notice to the purchaser that the Bonds will be redeemed or converted, and such
purchaser will be required to surrender its Bonds for payment on the applicable
redemption date or to tender its Bonds for mandatory purchase on the Fixed Rate
Conversion Date, as the case may be.
Section 313. Paying Agent. The Trustee shall act as paying agent, registrar
----------- ------------
and transfer agent for the Bonds.
Section 314. Remarketing Agent.
----------- -----------------
(a) Qualifications and Responsibilities. The Borrower shall appoint,
-----------------------------------
with the consent of the Issuer and the Bank, a Remarketing Agent when the Bonds
are in the Weekly Mode. The Remarketing Agent shall be authorized by law to
perform all of the duties imposed upon it by this Agreement. In addition, the
Remarketing Agent shall be a member of the National Association of Securities
Dealers, Inc. or a banking corporation, acceptable to the Issuer, the Borrower
and the Bank. The Remarketing Agent, which may act by means of agents, shall
signify its acceptance of the duties and obligations imposed upon it hereunder
by a written agreement with the Borrower under which the Remarketing Agent will
agree, among other things, to:
(i) determine the Weekly or Fixed Rate pursuant to and in accordance with
Paragraph 301(d)(i) or Subsection 301(e) and the forms of Weekly and Fixed Rate
Bonds;
(ii) give all notices to the Trustee regarding the determination of
interest rates on the Bonds and regarding Tendered Bonds as are required of the
Remarketing Agent in this Agreement;
(iii) hold all moneys received hereunder from the remarketing of Tendered
Bonds for the benefit of the person or entity which shall have delivered such
moneys until the Remarketing Agent shall have transferred such moneys to the
Trustee as provided in this Agreement;
(iv) keep such books and records with respect to its duties as Remarketing
Agent as shall be consistent with prudent industry practice and make such books
and records available for inspection by the parties hereto at all reasonable
times; and
(v) use its best efforts to remarket Bonds in accordance with this
Agreement and any remarketing agreement entered into by the Remarketing Agent
and the Borrower.
-54-
<PAGE>
The Remarketing Agent may enter into custodial agreements with one or more
banking or similar institutions for the deposit and holding of the Bonds in
order to facilitate the tendering and remarketing of Bonds as provided in this
Agreement, provided, however, that in no event shall the Issuer or the Trustee
be responsible or held liable for any action taken or not taken under any such
custodial agreement and in no way shall any such custodial agreement relieve or
otherwise alter the obligations and responsibilities of the Remarketing Agent
set forth in this Agreement.
(b) Removal or Resignation of Remarketing Agent. The Borrower may
-------------------------------------------
remove the Remarketing Agent at any time by written notice to the Remarketing
Agent, the Bank and the parties hereto and appoint a successor which meets the
qualifications set forth in Subsection 314(a) and which is reputable and
experienced in the remarketing of obligations similar to the Bonds. The Borrower
shall appoint a successor with similar qualifications if the Remarketing Agent
resigns or becomes ineligible. The Borrower shall give the Issuer, the Bank and
the Trustee at least fifteen (15) days' notice prior to the appointment of a
successor Remarketing Agent. The Remarketing Agent may at any time resign and be
discharged of the duties and obligations created by this Agreement by giving at
least thirty (30) days' written notice to the parties hereto and the Bank. The
Trustee shall give written notice to the Bondowners of any removal or
appointment of the Remarketing Agent.
(c) Successors. Any corporation, association, partnership or firm which
----------
succeeds to the business of the Remarketing Agent as a whole or substantially as
a whole, whether by sale, merger, consolidation or otherwise, shall thereby
become vested with all the property, rights and powers of the Remarketing Agent
under this Agreement and shall be subject to all the duties and obligations of
the Remarketing Agent under this Agreement. In the event that the Remarketing
Agent shall resign or be removed, or be dissolved, or if the property or affairs
of the Remarketing Agent shall be taken under the control of any state or
federal court or administrative body because of bankruptcy or insolvency, or for
any other reason, and the Borrower shall not have appointed its successor within
thirty (30) days, the Trustee shall apply to a court of competent jurisdiction
for such appointment.
Section 315. Investments.
----------- -----------
(a) Pending their use under this Agreement, moneys in the Bond Fund,
Construction Fund or Rebate Fund, may be invested by the Trustee in Permitted
Investments (as defined below) maturing or redeemable at the option of the
holder at or before the time when such moneys are expected to be needed by the
Trustee and shall be so invested pursuant to written direction of the Borrower
if no Default known to the Trustee then exists under this Agreement, provided
that the Borrower shall not request, authorize or permit any investment which
would cause any Bonds to be classified as "arbitrage bonds" as defined in IRC
(S)148. Any investments pursuant to this subsection shall be held by the Trustee
as a part of the Bond
-55-
<PAGE>
Fund, Construction Fund or Rebate Fund and shall be sold or redeemed to the
extent necessary to make payments or transfers or anticipated payments or
transfers from such Funds.
The Trustee shall be entitled to rely on all written investment instructions
provided by the Borrower hereunder, and shall have no duty to monitor the
compliance thereof with the restrictions set forth herein. The Trustee shall
have no responsibility or liability for any depreciation in the value of any
investment or for any loss, direct or indirect, resulting from any investment
made in accordance with the written instructions of the Borrower. The Trustee
shall be without liability to the Borrower, the Issuer, any Bondowner or any
other person in the event that any investment made in accordance with the
written instructions of the Borrower shall cause any or all of the Bonds to be
or become arbitrage bonds within the meaning of Section 148 of the IRC or shall
cause any person to incur any liability or rebates or other monies payable
pursuant to the IRC.
(b) Any interest realized on investments in any Fund and any profit
realized upon the sale or other disposition thereof shall be credited to such
Fund and any loss shall be charged thereto.
(c) The term "Permitted Investments" means
(A) Government Obligations;
(B) Direct obligations and fully guaranteed certificates of
beneficial interest of the Export-Import Bank of the United States;
consolidated debt obligations and letter of credit-backed issues of the
Federal Home Loan Banks; participation certificates and senior debt
obligations of the Federal Home Loan Mortgage Corporation ("FHLMCs");
debentures of the Federal Housing Administration; mortgage-backed securities
(except stripped mortgage securities which are valued greater than par on
the portion of unpaid principal) and senior debt obligations of the Federal
National Mortgage Association ("FNMAs"); participation certificates of the
General Services Administration; guaranteed mortgage-backed securities and
guaranteed participation certificates of the Government National Mortgage
Association ("GNMAs"); guaranteed participation certificates and guaranteed
pool certificates of the Small Business Administration; debt obligations and
letter of credit-backed issues of the Student Loan Marketing Association;
local authority bonds of the U.S. Department of Housing and Urban
Development; guaranteed Title XI financings of the U.S. Maritime
Administration; guaranteed transit bonds of the Washington Metropolitan Area
Transit Authority; Resolution Funding Corporation securities; rated in each
case, at the time of purchase, AAA or at least as high as the rating then in
effect on the Bonds by S&P;
(C) Direct obligations of any state of the United States of America
or any subdivision or agency thereof whose unsecured, uninsured and
unguaranteed general obligation debt is rated, at the time of purchase, AAA
or at least as high as the rating
-56-
<PAGE>
then in effect on the Bonds by S&P, or any obligation fully and
unconditionally guaranteed by any state, subdivision or agency whose
unsecured, uninsured and unguaranteed general obligation debt is rated,
at the time of purchase, AAA or at least as high as the rating then in
effect on the Bonds by S&P;
(D) Commercial paper (having original maturities of not more than
270 days) rated, at the time of purchase, "A-1+" or better by S&P;
(E) Federal funds, unsecured certificates of deposit, time
deposits or bankers acceptances (in each case having maturities of not
more than 365 days) of any domestic bank including a branch office of a
foreign bank which branch office is located in the United States,
provided written legal opinions in form acceptable to the Trustee are
received to the effect that full and timely payment of such deposit or
similar obligation is enforceable against the principal office or any
branch of such bank, which, at the time of purchase, has a " Short-Term
CD" rating of "A-1+" by S&P;
(F) Deposits of any bank or savings and loan association which
has combined capital, surplus and undivided profits of not less than
$3,000,000, provided such deposits are continuously and fully insured by
the Federal Deposit Insurance Corporation; and
(G) Investments in money-market funds rated "AAAm" or "AAAmG"
by S&P.
Any of the requirements of this subsection (c) shall not apply to moneys
as to which the Trustee and the Issuer shall have received an opinion of
nationally recognized bond counsel to the effect that such requirements are not
necessary to preserve the exclusion of interest on Bonds from the gross income
of the owner thereof for federal income tax purposes.
Section 316. Reserved.
----------- --------
Section 317. Credit Facilities.
----------- -----------------
(a) Substitution or Replacement. Upon satisfaction of the requirements set
---------------------------
forth in this Section 317 and subject to the last sentence of Subsection 317(b),
the Borrower may (except during the period between the giving of notice of
mandatory tender for purchase on account of the expiration of the Credit
Facility and the Purchase Date) replace a Credit Facility then in effect with a
substitute Credit Facility; provided, however, that (1) the Credit Facility
being replaced shall in no event be terminated or released until the Borrower
has given not less than forty-five (45) days' written notice to the Trustee and
the Remarketing Agent, and the Trustee has received the proceeds of all
outstanding drawings on the Credit Facility being replaced and (2) if the Bonds
supported by the Credit Facility being replaced are in the Weekly
-57-
<PAGE>
Mode, the Trustee has given not less than thirty (30) days' written
notice of the termination or release of the Credit Facility to owners of such
Bonds in the Weekly Mode.
Prior to the replacement of any Credit Facility the Borrower shall have
delivered to the Trustee: (i) a written opinion of counsel for the issuer of the
substitute Credit Facility to the effect that it constitutes a legal, valid and
binding obligation of the issuer enforceable in accordance with its terms
(subject to customary exceptions); (ii) a written opinion of Bond Counsel to the
effect that the issuance of a substitute Credit Facility will not by itself
adversely affect the exclusion of interest on such Bonds from gross income for
federal income tax purposes and that payments of principal or the Purchase Price
of and the interest on the Bonds from the proceeds of a substitute Credit
Facility will not constitute an avoidable preference under the federal
Bankruptcy Code if an Event of Bankruptcy occurs; (iii) a certificate of the
Bank that all amounts due under the Reimbursement Agreement or otherwise owed by
the Borrower to the Bank have been paid and that the Borrower has fulfilled all
its obligations arising out of such Agreement and (iv) evidence that the rating
on the Bonds with the substitute Credit Facility by S&P, if the Bonds are then
rated by S&P, will not result in a downgrade or withdrawal of the rating on the
Bonds. Notice of the substitution, replacement, termination or extension of a
Credit Facility shall be sent by the Trustee to S&P.
(b) Requirements. Each Credit Facility must:
------------
(i) be an irrevocable, unconditional obligation of a financial institution;
(ii) be on terms no less favorable to the Trustee than the Letter of Credit
and entitle the Trustee to draw upon or demand payment and receive in
immediately available funds an amount equal to the sum of the principal amount
of the Bonds supported by the Credit Facility, any premium applicable thereto,
and (A) 46 days' accrued interest at the Maximum Interest Rate on the principal
amount of Bonds then Outstanding in the Weekly Mode, or (B) 210 days' accrued
interest at the Fixed Rate on the principal amount of Bonds then Outstanding in
the Fixed Rate Mode plus any applicable redemption premium (including amounts
that could be owed pursuant to the last sentence of Section 310(c));
(iii) be supported by evidence from S&P, if the Bonds are then rated by S&P,
that the rating on the Bonds supported by the new Credit Facility is not less
than the rating on the Bonds prior to the replacement of the existing Credit
Facility; and
(iv) provide for a term which may not expire in less than one year and which
may not expire or be terminated prior to the fifth Business Day after the
mandatory tender for purchase as provided in Paragraph 301(d)(iv). The Borrower
shall not enter into any Reimbursement Agreement or similar arrangement or agree
to any amendment of a Reimbursement Agreement or similar arrangement which in
any way limits the obligation of the issuer of such Credit Facility to provide
funds under the Credit Facility without the prior
-58-
<PAGE>
written consent of the owners of 100% of the principal amount of the Bonds
Outstanding and entitled to the benefit thereof.
Section 318. Securities Laws. In any "Offering" of the Bonds by a
----------- ---------------
"Participating Underwriter" as those terms are defined in the Rule, including
any remarketing of Bonds under this Agreement, the Borrower shall at all times
comply with applicable federal and state securities laws, and shall cooperate
with the Remarketing Agent to the extent necessary to permit the Remarketing
Agent to comply with applicable federal and state securities laws including,
without limitation, the Rule.
ARTICLE IV. THE PROJECT
Section 401. Construction Fund.
----------- -----------------
(a) A Construction Fund is hereby established to be held by the Trustee.
Moneys in the Construction Fund shall be applied by the Trustee to the payment
or reimbursement of Project Costs.
(b) The Trustee is hereby authorized and directed to issue its checks or make
wire transfers for each disbursement from the Construction Fund upon being
furnished with a written requisition therefor, approved in writing by the Bank,
certified to by a Borrower Representative together with supporting bills,
invoices and other materials and documentation required by and satisfactory to
the Bank and stating: (A) the name and address of the person to whom payment is
to be made, (B) the amount of the payment, (C) that the disbursement is for a
proper expenditure of moneys in the Construction Fund pursuant to this
Agreement, (D) the general classification of the expenditure, (E) that none of
the items for which the requisition is made has been the basis for any prior
disbursement from the Construction Fund (requests for disbursement of retainage
amounts shall not be deemed to be an item for which a prior request has been
made), (F) after giving effect to the payment of the requisition, the use of all
funds disbursed from the Construction Fund complies with the limitations
contained in this Agreement and the Federal Tax Statement, and (G) as of the
date of the request, there is no Event of Default hereunder, or any event that,
with the passage of time or the giving of notice or both, would ripen into such
an Event of Default. The Borrower and the Bank may enter into one or more
separate agreements (collectively, the "Disbursement Agreement") which will set
forth the conditions under which the Bank will approve requisitions from the
Construction Fund.
(c) The Trustee shall maintain adequate records pertaining to the accounts in
the Construction Fund and all disbursements therefrom and shall, within ninety
(90) days of the completion date, file an accounting thereof with the Issuer,
the Borrower and the Bank.
(d) Notwithstanding anything herein to the contrary if the principal of the
Bonds shall have become due and payable pursuant to Article VI hereof, the
Trustee shall not issue its
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checks on or make wire transfers from the Construction Fund, but, rather shall
transfer any moneys in the Construction Fund to the Bond Fund.
Section 402. Construction of the Project.
----------- ---------------------------
(a) The Borrower shall proceed with due diligence to acquire, construct,
improve and equip the Project or cause the Project to be acquired, constructed,
improved and equipped in accordance with the plans and specifications therefor.
Contracts for carrying out the Project and purchases in connection therewith
shall be made by the Borrower in its own name.
(b) The Borrower acknowledges that it is fully familiar with the physical
condition of the Project and is not relying on any representation of any kind by
the Issuer or the Trustee or their respective directors, officers, employees or
agents as to the nature or the condition thereof. Neither the Issuer or the
Trustee nor their respective officers, directors, employees or agents shall be
liable to the Borrower or to any other person for any latent or patent defect in
the Project.
Section 403. Certificate of Completion. The Borrower shall proceed with due
----------- -------------------------
diligence to complete the acquisition, construction, improvement and equipping
of the Project. Completion of the acquisition, construction, improvement and
equipping of the Project shall be evidenced by a certificate signed by a
Borrower Representative delivered to the Trustee and the Bank stating (a) the
date of such completion, (b) that all labor, services, materials and supplies
used therefor and all costs and expenses in connection therewith have been paid,
(c) that acquiring, constructing, reconstructing and equipping the Project has
been completed in accordance with the plans and specifications with the
exception of ordinary punchlist items and work awaiting seasonal opportunity and
(d) that the Project is ready for occupancy, use and operation for its intended
purposes. Notwithstanding the foregoing, such certificate may state that (1) it
is given without prejudice to any rights of the Borrower against third parties
which exist at the date of such certificate or which may subsequently come into
being, (2) it is given only for the purposes of this Section 403, and (3) no
person other than the Issuer, the Bank or the Trustee may benefit therefrom.
Any balance in the Construction Fund not then needed to pay Project Costs shall
be transferred to the Bond Fund.
Section 404. Completion by the Borrower.
----------- --------------------------
(a) In the event that the proceeds of the Bonds are not sufficient to pay in
full all costs of acquiring, constructing, improving and equipping the Project
in accordance with the plans and specifications, the Borrower agrees, for the
benefit of the Issuer, the Trustee and the Bank to pay all such sums as may be
in excess of the proceeds of the Bonds.
(b) No payment pursuant to this Section 404 shall entitle the Borrower to any
diminution or abatement of any amounts payable by the Borrower under this
Agreement.
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Section 405. Borrower Not to Impair Tax Status; Use of Project.
----------- -------------------------------------------------
Notwithstanding any provision herein or in any related document to the contrary,
the Borrower will not use any of the proceeds of the Bonds (or the income earned
through the investment thereof, if any) or cause the Project to be operated or
used in any manner, and will not take or omit any action or permit any action to
be taken or omitted with the result that interest on any Bonds is included in
the gross income of the owners thereof for federal income tax purposes, except
for interest on any Bond during any period while it is held by a person who is a
"substantial user" of the Project or a "related person", both within the meaning
of IRC (S)147(a). The Borrower's use of the Project (or facilities replacing
the same) shall be in compliance with the Act and the IRC.
Section 406. Compliance with Law. In the acquisition, construction,
----------- -------------------
maintenance, improvement and operation of the Project, the Borrower has and will
comply in all material respects with all applicable building, subdivision,
zoning and land use, environmental protection, sanitary and safety and other
laws, rules and regulations and will not permit any nuisance thereat and will to
the extent of its ownership and control, permit no nuisance to be committed
thereat by others while the Borrower is, or is entitled to be, in possession
thereof. It shall not be a breach of this section if the Borrower fails to
comply with such laws, rules and regulations during any period in which the
Borrower shall in good faith be diligently contesting the validity thereof, but
the provisions of this sentence will not excuse any failure to comply with the
Reimbursement Agreement in accordance with its terms.
Section 407. Current Expenses. The Borrower shall pay in a timely manner
----------- ----------------
all costs of maintaining and operating the Project, including without limitation
all taxes, excises and other governmental charges lawfully levied thereon or
with respect to its interests therein or use thereof to the extent of the
Borrower's interests therein. It shall not be a breach of this section if the
Borrower fails to pay any such costs, taxes or charges during any period in
which the Borrower shall in good faith be contesting the validity or amount
thereof and no foreclosure proceedings have been commenced, unless the
procedures applicable to such contest require payment thereof and proceedings
for their refund or abatement, but the provisions of this sentence will not
excuse any failure to comply with the Reimbursement Agreement in accordance with
its terms.
Section 408. Disposition and Use of Project. The Borrower may not sell,
----------- ------------------------------
lease, transfer or otherwise dispose of the Project in one transaction or in a
series of transactions without the consent of the Bank. With the consent of the
Bank, the Borrower may otherwise sell, lease, transfer or otherwise dispose of
portions of the Project. At the time of any sale, transfer or disposition, the
Borrower shall deliver to the Issuer and the Trustee a written opinion of Bond
Counsel addressed to and reasonably satisfactory to the Trustee and the Issuer
that such sale, transfer or other disposition will not affect the exclusion of
the interest on any Bonds from the gross income of the owners thereof for
federal income tax purposes or be inconsistent with the Act. To the extent
required by Bond Counsel in connection with rendering a favorable opinion, the
Borrower shall deposit proceeds of such sale, transfer or disposition into the
Bond Fund and apply such proceeds as provided in Section 301(a). No
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sale, lease, transfer or other disposition of the Project shall relieve the
Borrower of any of its obligations under this Agreement.
The Borrower shall not make any material change in the purposes for which the
Project is used without the consent of the Issuer, which consent shall not be
unreasonably withheld. The Borrower at its own expense may alter, remodel or
improve the Project and construct other facilities at the site of the Project,
provided such action shall not result in any substantial change in the Project
or the character of the activities conducted by the Borrower at the Project
without the consent of the Issuer, which consent shall not be unreasonably
withheld.
ARTICLE V. RESERVED
ARTICLE VI. DEFAULT AND REMEDIES
Section 601. Default by the Borrower.
----------- -----------------------
(a) Events of Default; Default. "Event of Default" in this Agreement
--------------------------
means any one of the events set forth below and "Default" means any Event of
Default without regard to any lapse of time or notice.
(i) Debt Service on Bonds; Required Purchase. Any principal of, premium,
----------------------------------------
if any, or interest on any Bond shall not be paid when due, whether at maturity,
by acceleration, upon redemption or otherwise or any Purchase Price for Bonds
shall not be paid as provided in Sections 301, 308, 311 or 312.
(ii) Other Obligations. The Borrower shall fail to observe or perform any
-----------------
of its other covenants or agreements contained herein and such failure shall
continue for a period of thirty (30) days after written notice given to the
Borrower by the Issuer, the Trustee or the Bondowners of at least 25% in
principal amount of the Bonds Outstanding.
(iii) Event of Bankruptcy. (A) A trustee, receiver, custodian or similar
-------------------
official or agent shall be appointed for the Borrower for any substantial part
of the property of the Borrower and such trustee or receiver shall not be
discharged within ninety (90) days, (B) the Borrower shall commence a voluntary
case under the federal bankruptcy laws, or shall make an assignment for the
benefit of creditors, or shall apply for, consent to or acquiesce in the
appointment of, or taking possession by, a trustee, receiver, custodian or
similar official or agent for itself or any substantial part of its property, or
(C) the Borrower shall have an order or decree for relief in an involuntary case
under the federal bankruptcy laws entered against it, or a petition seeking
reorganization, readjustment, arrangement, composition, or other similar relief
as to it under the federal bankruptcy laws or any similar law for the relief of
debtors shall be brought against it and shall be consented to by it or shall
remain undismissed for ninety (90) days.
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(iv) Reimbursement Agreement. The Trustee shall have received written notice
-----------------------
from the Bank of the occurrence of an event of default under the Reimbursement
Agreement.
(v) Non-Reinstatement under the Credit Facility. The Trustee shall receive
-------------------------------------------
written notice from the Bank within ten calendar days after a drawing under the
Credit Facility that the Bank has not reinstated the amount so drawn, and such
non-reinstatement causes the total amount of the obligation of the Bank under
the Credit Facility to be less than the principal amount of the Outstanding
Bonds, plus premium, if any, supported by the Credit Facility, plus accrued
interest for a period of 46 days at the Maximum Interest Rate with respect to
the principal amount of such Bonds then Outstanding in the Weekly Mode or 210
days at the Fixed Rate if the Bonds are in the Fixed Rate Mode.
Notwithstanding anything in this subsection to the contrary, no action or
failure to act by the Borrower which results in interest on any Bonds becoming
includable in gross income of the owners thereof for federal income tax purposes
shall constitute a Default or Event of Default under this Agreement so long as
the redemption provided by Subsection 310(c) occurs. In such event, no owner of
Bonds shall be entitled to any claim for monetary damages hereunder and the
redemption of the Bonds as provided under Subsection 310(c) shall be the
exclusive recourse of owners of the Bonds.
(b) Waiver. Subject to the provisions of Section 610 below, at any time
------
before an acceleration pursuant to Paragraph 602(a), the Trustee may waive a
Default under Paragraph 601(a)(ii) and annul its consequences by written notice
to the Borrower, and in the absence of inconsistent instructions from Bondowners
pursuant to Sections 606 or 901 shall do so upon written instruction of the
owners of at least twenty-five per cent (25%) in principal amount of such Bonds
Outstanding. No waiver under this section shall affect the right of the Trustee
or the Issuer to enforce the payment of any amounts owing to it. The Trustee
shall not waive any Event of Default under Paragraphs 601(a)(i), 601(a)(iii),
601(a)(iv) or 601(a)(v), (except, as to Paragraph 601(a)(iv) only if the Trustee
receives a written confirmation from the Bank that all events of default under
the Reimbursement Agreement have been cured or waived and the Credit Facility
has been reinstated in full and remains in full force and effect).
Section 602. Remedies for Events of Default. If an Event of Default occurs
----------- ------------------------------
and is continuing:
(a) Acceleration. If the Event of Default is one described in Paragraph
------------
601(a)(i), (iii), (iv) or (v), the principal of and premium, if any, on the
Bonds that are supported by a Credit Facility and Pledged Bonds and accrued
interest thereon shall automatically become immediately due and payable without
any further notice or action. Notwithstanding the foregoing, if an Event of
Default described in Paragraph 601(a)(i) occurs due to the failure of the
Trustee to receive sufficient funds for the payment of the Purchase Price of all
Bonds supported by a Credit Facility tendered for purchase on any Purchase Date,
the Trustee shall immediately draw under the Credit Facility an amount equal to
such deficiency (except to the
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extent that one or more drawings have been made previously in respect of the
same deficiency), plus one day's accrued interest on all Bonds tendered, and
only if such Event of Default is not cured by the close of business on the next
Business Day shall there be such an automatic acceleration of the payment of
principal of and accrued interest on the Bonds.
(b) Rights as a Secured Party. Subject to Section 610 hereof, the Trustee
-------------------------
may exercise all of the rights and remedies of a secured party under the UCC.
Notice sent by registered or certified mail, postage prepaid, or delivered
during business hours, to the Borrower at least seven (7) days before an event
under UCC Section 9-504(3) or any successor provision of law shall constitute
reasonable notification of such event.
Section 603. Court Proceedings. Subject to Section 610 hereof, the Trustee
----------- -----------------
may enforce the provisions of this Agreement by appropriate legal proceedings
for the specific performance of any covenant, obligation or agreement contained
herein whether or not a Default or an Event of Default exists, or for the
enforcement of any other appropriate legal or equitable remedy, and may recover
damages caused by any breach by the Borrower of the provisions of this
Agreement, including (to the extent this Agreement may lawfully provide) court
costs, reasonable attorney's fees and other costs and expenses incurred in
enforcing the obligations of the Borrower hereunder. The Issuer may likewise
enforce obligations owed to it or to its directors, officers, employees and
agents hereunder which it has not assigned to the Trustee. All rights under
this Agreement and the Bonds may be enforced by the party exercising such rights
without the possession of any Bonds or the production thereof at the trial or
other proceedings relative thereto, and any proceeding instituted by the Trustee
shall be brought in its name for the ratable benefit of the Bondowners.
Section 604. Revenues after Default. After the occurrence of an Event of
----------- ----------------------
Default, any funds pledged as security hereunder and any other moneys received
by the Trustee (other than amounts irrevocably set aside to pay particular
Bonds) shall be applied to amounts due under Section 308 (without regard to any
grace periods), which amounts shall be applied in the order specified in Section
307.
Section 605. The Credit Facility; Acceleration. Upon declaration of
----------- ---------------------------------
acceleration of the Bonds prior to expiration of the Credit Facility, the
Trustee shall draw immediately on the Credit Facility in accordance with Section
308(c)(i) in an amount equal to the aggregate unpaid principal of, premium, if
any, and interest on the Bonds to the date of final payment. Interest on the
Bonds shall cease to accrue on the date of the declaration of acceleration. The
Trustee shall not require indemnification for any draw required by this Section
605 except and unless such instruction is prohibited by or violates applicable
law or any outstanding or pending court or governmental order or decree.
Section 606. Rights of Bondowners. Subject to Section 610 hereof, if an
----------- --------------------
Event of Default occurs and is continuing, and if the Bondowners representing
not less than 25% in principal amount of the Bonds Outstanding shall have
requested the Trustee in writing to
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exercise one or more of the rights and remedies provided hereunder and offered
it indemnity as provided in Subsection 702(e), the Trustee shall be required to
exercise such one or more of the rights and remedies hereunder as the Trustee
shall determine to be in the best interest of the Bondowners and not
inconsistent with any directions given in accordance with Section 901. No
Bondowner shall have any right to institute an action in law or equity or to
pursue any other remedy hereunder with respect to any Bond unless (i) an Event
of Default of which the Trustee has been notified has occurred and Bondowners
representing not less than 25% in principal amount of the Bonds Outstanding
shall have requested the Trustee in writing to exercise its rights and remedies
with respect thereto and shall have offered the Trustee reasonable opportunity
to do so and indemnity as provided in Subsection 702(e), and (ii) the Trustee
shall within a reasonable time thereafter fail to exercise any of such rights or
remedies, and the rights of Bondowners hereunder shall in any event be subject
to Section 610 hereof. No Bondowner shall have any right to institute any action
or pursue any other remedy if and to the extent that the surrender, impairment,
waiver, or loss of the lien of this Agreement would, under applicable law,
result. Notwithstanding the foregoing, each Bondowner shall have a right of
action to enforce payment of the Bonds at and after the due dates thereof at the
place, from the sources and in the manner expressed in the Bonds.
Section 607. Performance of Borrower's Obligations. If the Borrower shall
----------- -------------------------------------
fail to observe or perform any of its agreements or obligations hereunder, the
Issuer or the Trustee may (but shall not be obligated to) perform the same in
its own name or in the Borrower's name, and each is hereby irrevocably appointed
the Borrower's attorney-in-fact for such purpose. Unless an Event of Default
exists, the Issuer or the Trustee, as the case may be, shall give at least five
(5) days' notice to the Borrower before taking action under this section, except
that in case of emergency as reasonably determined by the acting party, it may
act on lesser notice or give the notice promptly after rather than before taking
the action. The reasonable cost of any such action performed by the Trustee or
the Issuer shall be paid or reimbursed by the Borrower within thirty (30) days
after the Trustee or the Issuer notifies the Borrower of such cost.
Section 608. Remedies Cumulative; No Waiver. The rights and remedies under
----------- ------------------------------
this Agreement shall be cumulative and shall not exclude any other rights and
remedies allowed by law, provided there is no duplication of recovery. Neither
the failure to insist upon a strict performance of any of the obligations of the
Borrower nor the failure to exercise any remedy for any violation thereof, shall
be taken as a waiver for the future of the right to insist upon strict
performance of the obligation or of the right to exercise any remedy for the
violation.
Section 609. Subrogation Rights of Bank. In the event that (i) an Event of
----------- ---------------------------
Default shall occur and be continuing under this Agreement, or (ii) the Trustee
shall draw under the Credit Facility in connection with the redemption in whole
of the Bonds, and in either such case the Bank shall have provided the Trustee
with funds pursuant to the Credit Facility for the payment in full of the
principal or redemption price, if any, of and the interest on the Bonds, then,
and in any such event, the Bank shall be subrogated to all rights theretofore
possessed
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under this Agreement by the Trustee and the Bondowners in respect of which such
principal or redemption price, if any, and interest shall have been paid with
funds provided by the Bank (to the extent such funds provided by the Bank
pursuant to the Credit Facility shall not have been reimbursed to the Bank).
After the payment in full of all Bonds owned by the Bondowners other than the
Bank, any reference herein to the holders of the Bonds or the Bondowners shall
mean the Bank to the extent of its subrogation rights resulting from the
payments made pursuant to the Credit Facility. Notwithstanding any provision
contained herein to the contrary, under no circumstances shall the Issuer's
rights or the Trustee's rights reserved in this Agreement, including without
limitation the right of indemnification or the Issuer's right or the Trustee's
right to enforce the same, be subrogated to the Bank.
Section 610. Rights of Bank. All consents, approvals and requests required
----------- ---------------
of the Bank shall be deemed not required if (a) the Bank has failed to fulfill
its obligations to make payments under the Credit Facility in accordance with
the terms thereof or (b) an Act of Bankruptcy of the Bank has occurred and is
continuing and the Bank has failed to fulfill its obligations to make payments
under the Credit Facility in accordance with the terms thereof. Subject to the
immediately preceding sentence, but notwithstanding any other provision of this
Article VI, in the event that all Outstanding Bonds are secured by the Bank
pursuant to the Credit Facility, the exercise of direction of all remedies
granted under this Article VI and the granting of any waivers pursuant to
Subsection 601(b) shall be subject to the direction and prior written consent of
the Bank. The Trustee, in its exercise of its rights for the benefit of
Bondowners under Article VI and the rights of the Issuer assigned under this
Agreement (but not including the rights of the Trustee under this Agreement for
its own benefit including but not limited to indemnification and any fees and
expenses owed to it), in the event that all Outstanding Bonds are Pledged Bonds,
shall be subject to the direction of the Bank. In the event that less than all
Outstanding Bonds are secured by the Bank pursuant to the Credit Facility, the
Bank shall be treated as the owner of all Pledged Bonds for purposes of giving
directions, consents, waivers or other actions. In no event may the Trustee
accelerate the Bonds without the prior written consent of the Bank so long as
the Credit Facility is in full force and effect and the Bank has not defaulted
thereunder by failing to honor a draft submitted under the Credit Facility in
strict conformity therewith.
ARTICLE VII. THE TRUSTEE
Section 701. Corporate Organization, Authorization and Capacity. The
----------- --------------------------------------------------
Trustee represents and warrants that it is a national banking association duly
organized and validly existing under the laws of the United States and duly
licensed or qualified to do business in Massachusetts, with the capacity to
exercise the powers and duties of the Trustee hereunder, and that by proper
corporate action it has duly authorized the execution and delivery of this
Agreement.
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Section 702. Rights and Duties of the Trustee.
----------- --------------------------------
(a) Moneys to Be Held in Trust. All moneys deposited with the Trustee under
--------------------------
this Agreement (other than amounts received for its own use) shall be held by
the Trustee in trust and applied subject to the provisions of this Agreement,
but need not be segregated from other funds except as required herein or by law.
(b) Accounts. The Trustee shall keep proper accounts of its transactions
--------
hereunder (separate from its other accounts), which shall be open to inspection
at reasonable times upon reasonable prior written notice by the Issuer, the
Borrower and the Bondowners and their representatives duly authorized in
writing.
(c) Performance of the Issuer's Obligations. If the Issuer shall fail to
---------------------------------------
observe or perform any agreement or obligation contained in this Agreement, the
Trustee may take whatever legal proceedings may be required to compel full
performance by the Issuer of its obligations, and in addition, the Trustee may
(but shall not be obligated to), to whatever extent it deems appropriate for the
protection of the Bondowners, itself or the Borrower, perform any such
obligation in the name of the Issuer and on its behalf.
(d) Responsibility. The Trustee shall be entitled to the advice of counsel
--------------
(who may be the Trustee's counsel, counsel for the Issuer, the Borrower, the
Bank or any Bondowner) and shall be wholly protected as to any action taken or
omitted to be taken in good faith in reliance on such advice. The Trustee may
rely conclusively on any notice, certificate or other document furnished to it
hereunder and reasonably believed by it to be genuine. The Trustee shall not be
liable for any action taken by it in good faith and reasonably believed by it to
be within the discretion or powers conferred upon it, in good faith omitted to
be taken by it and reasonably believed to be beyond the discretion or powers
conferred upon it, taken by it pursuant to any direction or instruction by which
it is governed hereunder, or omitted to be taken by it by reason of the lack of
direction or instruction required hereby for such action; nor shall it be
responsible for the consequences of any error of judgment reasonably made by
it. The duties of the Trustee are those expressly set forth in this Agreement,
and no additional duties shall be implied. When any payment, consent or other
action by it is called for hereby, it may defer such action pending receipt of
such evidence, if any, as it may require in support thereof. The Trustee shall
in no event be liable for the application or misapplication of funds, or for
other acts or defaults by any person, firm, or corporation, except its own
directors, officers, and employees. No recourse shall be had by the Borrower,
the Issuer or any Bondowner for any claim based on this Agreement or any Bond
against any director, officer, employee, or agent of the Trustee alleging
personal liability on the part of such person, unless such claim is based upon
final adjudication of fraud of such person. The Trustee has no responsibility
for the validity, sufficiency or accuracy of this Agreement, the Bonds or any
security therefor, or any offering or disclosure document related thereto.
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(e) Limitations on Actions. The Trustee shall not be required to monitor the
----------------------
financial condition of the Borrower or the physical condition of the Project
and, unless otherwise expressly provided, shall not have any responsibility with
respect to notices, certificates or other documents filed with it hereunder,
except to make them available for inspection by the Bondowners. The Trustee
shall not be deemed to have knowledge of and shall not be required to take
notice of any Default or Event of Default, except for a Default or Event of
Default described in Paragraph 601(a)(i) relating to the payment of principal
of, premium, if any, and interest on the Bonds, unless the Trustee shall be
specifically notified in writing by the Borrower, the Issuer or Bondowners
representing not less than 25% in principal amount of the Bonds Outstanding, or
in the case of a Default or Event of Default described in Paragraph 601(a)(iv)
or (v), the Trustee shall be notified in writing by the Bank. It shall not be
required to take any remedial action (other than the giving of notice or a
drawing under the Credit Facility) unless indemnity satisfactory to it is
furnished for any expense or liability to be incurred therein, other than
liability for failure to meet the standards set forth in this section. In no
event, however, shall the Trustee be required to take any remedial action which
may subject it to potential liability under any federal, state or local
environmental law or regulation. The Trustee shall be entitled to reimbursement
from the Borrower for its expenses, including the fees and expenses of its
attorneys, reasonably incurred or advances reasonably made, which reimbursement
shall be due and payable immediately after notifying the Borrower of such
expenses or advances, in the exercise of its rights or the performance of its
obligations hereunder, whether or not it acts without previously obtaining
indemnity.
A permissive right or power to act shall not be construed as a requirement to
act. Upon receipt of written notice, direction, instruction, and indemnity as
provided above and, after making such investigation, if any, as it deems
appropriate to verify the occurrence of any Default of which it is notified by
the Bondowners or the Bank, the Trustee shall pursue such remedies hereunder
(not contrary to such direction) as it deems appropriate for the protection of
the Bondowners (including the Bank as provided in Section 901); and in its
actions under this provision, the Trustee shall be required to act for the
protection of the Bondowners with the same prudence as would be expected of a
prudent person in the conduct of such person's affairs.
(f) Financial Obligations. Nothing contained in this Agreement shall in any
---------------------
way obligate the Trustee to pay any debt or meet any financial obligations to
any person in relation to the Project except from moneys received under the
provisions of this Agreement (including from the exercise of its rights and
remedies hereunder) other than moneys received for its own purposes.
(g) Ownership of Bonds. The Trustee or any affiliate of the Trustee may be
------------------
or become the owner of Bonds with the same rights as if it were not Trustee.
(h) No Surety Bond. The Trustee shall not be required to furnish any bond or
--------------
surety.
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(i) Requests by the Borrower. Upon any request by the Borrower to the
------------------------
Trustee to take any action under this Agreement (including but not limited to
any proposed amendment pursuant to Section 1101) the Trustee shall be entitled
to receive from the Borrower prior to taking such action, and to rely
conclusively upon, a certificate of a Borrower Representative and an opinion of
counsel reasonably satisfactory to the Trustee (who may be counsel to the
Borrower), and, if applicable in the reasonable judgment of the Trustee, a
certificate of an accountant or firm of accountants of nationally recognized
standing satisfactory to the Borrower (who or which may be the Borrower's
external accountant or accountants), each to the effect that in the signer's
opinion all conditions precedent applicable to such action under this Agreement,
if any, have been satisfied (and, in the case of the certificate of the Borrower
Representative, including but not limited to the absence of any Default or Event
of Default) and such action is permitted by this Agreement.
(j) Securities Disclosures. Without limitation of any other provision of
----------------------
this Article, the Trustee is authorized to make such securities disclosures as
may be required or appropriate under applicable securities laws and regulations,
including Rule 15c2-12 under the Securities Exchange Act of 1934, promulgated by
the United States Securities and Exchange Commission pursuant to notices of the
Borrower regarding reportable events. The Trustee is entitled to rely
conclusively on notice from the Borrower and an opinion of counsel expert in
federal securities laws acceptable to the Trustee in making or not making any
securities law disclosure. The Trustee shall have no liability to the Borrower
or any Bondowner for any disclosure or nondisclosure made or not made in good
faith in reliance on such notice from the Borrower and an opinion of counsel
expert in federal securities law.
Section 703. Fees and Expenses of the Trustee. The Borrower shall pay to
----------- --------------------------------
the Trustee reasonable compensation for its services and prepay or reimburse the
Trustee for its reasonable expenses and disbursements, including attorney's fees
and disbursements, hereunder. The Borrower shall indemnify and save the Trustee
and its directors, officers, employees and agents harmless against any and all
(a) claims as set forth in Section 1002, (b) costs, counsel fees, expenses or
liabilities reasonably incurred in connection with such claims, and (c) expenses
and liabilities which it may incur in the exercise of its duties hereunder and
which are not due to the bad faith, gross negligence, fraud or deceit of any
director, officer, employee or agent of the Trustee. Any fees, expenses,
reimbursements, or other charges which the Trustee may be entitled to receive
from the Borrower hereunder shall be due and payable immediately after a request
for payment has been made by the Trustee, and if not otherwise paid, shall be a
first lien upon any funds or other property then or thereafter held hereunder by
the Trustee (other than funds held by the Trustee under Section 204, Section
304(c) or Section 305); provided, however, that the lien of the Trustee shall be
subordinate to the lien for the benefit of the Bondowners upon the moneys drawn
under the Credit Facility, the proceeds of any remarketing of the Bonds and
other Eligible Funds, if any, which are the basis of the determination made by
the Trustee of the amount to be drawn under the Credit Facility, excluding,
however funds held by the Trustee under Section 204, Section 304(c) or
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Section 305. The Trustee shall not require indemnification for any payment when
due of principal, premium or interest on any Bond to be made by the Trustee to
any Bondowner, prior to the time such payment is made by the Trustee, except and
unless such payment is prohibited by or violates applicable law or any
outstanding or pending court or governmental order or decree.
Section 704. Resignation or Removal of Trustee. The Trustee may resign on
----------- ---------------------------------
not less than sixty days' notice given in writing to the Issuer, the Bondowners,
the Bank and the Borrower, but such resignation shall not take effect until a
successor has been appointed and has assumed the duties hereunder. The Trustee
will promptly certify to the other parties that it has mailed such notice to all
Bondowners and such certificate shall be conclusive evidence that such notice
was given in the manner required hereby. The Trustee may be removed by written
notice to the parties from the Bondowners representing a majority in principal
amount of the Bonds Outstanding, but no such removal shall take effect until a
successor has been appointed and assumed the duties hereunder. A petition in a
court of competent jurisdiction for removal of the Trustee and the appointment
of a successor may be filed by the Bondowners representing not less than 25% in
principal amount of the Bonds Outstanding.
Section 705. Successor Trustee. Any corporation or association which
----------- -----------------
succeeds to the corporate trust business of the Trustee as a whole, or
substantially as a whole, whether by sale, merger, consolidation or otherwise,
shall become vested with all the property, rights and powers of the Trustee
hereunder, without any further act or conveyance.
In case the Trustee resigns or is removed or becomes incapable of acting, or
becomes bankrupt or insolvent, or if a receiver, liquidator or conservator of
the Trustee or of its property is appointed, or if a public officer takes charge
or control of the Trustee, or of its property or affairs, a successor shall be
appointed (but only with the consent of the Bank, if any Bonds shall then be
entitled to the benefits of a Credit Facility, which consent shall not be
unreasonably withheld) by written notice from the Borrower to the Issuer. The
Borrower shall notify the Bondowners of the appointment in writing within twenty
(20) days from the appointment. The Borrower will promptly certify to the
successor Trustee that it has mailed such notice was given in the manner
required hereby. If no appointment of a successor is made within twenty (20)
days after the giving of written notice as a result of the resignation or
removal of the Trustee under Section 704 or after the occurrence of any other
event requiring or authorizing such appointment, the outgoing Trustee or any
Bondowner may apply to any court of competent jurisdiction for the appointment
of such a successor, and such court may thereupon, after such notice, if any, as
such court may deem proper, appoint such successor. Any successor Trustee
appointed under this section shall be a trust company or a bank having the
powers of a trust company that meets the requirements of the Act and shall have
a capital and surplus of not less than $50,000,000. Any such successor Trustee
shall notify the Issuer, the Bank and the Borrower of its acceptance of the
appointment and, upon giving such notice, shall become Trustee, vested with all
the property, rights and powers of the Trustee hereunder, without any further
act or conveyance. Such successor Trustee shall execute, deliver, record
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and file such instruments as are required to confirm or perfect its succession
hereunder and any predecessor Trustee shall from time to time execute, deliver,
record and file such instruments as the incumbent Trustee may reasonably require
to confirm or perfect any succession hereunder.
ARTICLE VIII. THE ISSUER
Section 801. Corporate Organization, Authorization and Power. The Issuer
----------- -----------------------------------------------
represents and warrants as follows:
(i) it is a body politic and corporate and a public instrumentality of the
Commonwealth, established under Chapter 23A, with the power under and pursuant
to the Act, to execute and deliver this Agreement and to perform its obligations
hereunder, and to issue and sell the Bonds pursuant to this Agreement; and
(ii) it has taken all necessary action and has complied with all provisions
of the Constitution of the Commonwealth and the Act required to make this
Agreement and the Bonds the valid obligations of the Issuer which they purport
to be; and, when executed and delivered by the parties hereto, this Agreement
will constitute a valid and binding agreement of the Issuer enforceable in
accordance with its terms, except as enforceability may be subject to the
exercise of judicial discretion in accordance with general equitable principles
and to applicable bankruptcy, insolvency, reorganization, moratorium and other
laws for the relief of debtors heretofore enacted to the extent that the same
may be constitutionally applied; and
(iii) when delivered to and paid for by the initial purchasers in accordance
with the terms of this Agreement and the Private Placement Agreement dated July
24, 1996 with respect to the Bonds, the Bonds will constitute valid and binding
special obligations of the Issuer enforceable in accordance with their terms,
except as enforceability may be subject to the exercise of judicial discretion
in accordance with general equitable principles and to applicable bankruptcy,
insolvency, reorganization, moratorium and other laws for the relief of debtors
heretofore or hereafter enacted to the extent that the same may be
constitutionally applied, and will be entitled to the benefits of this
Agreement; and
(iv) The Issuer makes no other representations or warranties, either express
or implied, of any nature or kind, including, without limitation, a
representation or warranty that interest on the Bonds is or will continue to be
exempt from federal or state income taxation.
Section 802. Covenant as to Payment; Faith and Credit of Commonwealth Not
----------- ------------------------------------------------------------
Pledged. The Issuer covenants that it will promptly pay or cause to be paid the
- -------
principal of, interest, premium, if any, and other charges, if any, on the Bonds
at the place, on the dates and in the manner provided herein and in the Bonds,
provided, however, that the Bonds do not now and shall never constitute a
general obligation of the Issuer or a debt or pledge of the faith and credit of
the Commonwealth, and all covenants and undertakings by the Issuer hereunder
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and under the Bonds to make payments are special obligations of the Issuer
payable solely from the revenues and funds pledged hereunder.
Section 803. Rights and Duties of the Issuer.
----------- -------------------------------
(a) Remedies of the Issuer. Notwithstanding any contrary provision in this
----------------------
Agreement, the Issuer shall have the right to take any action not prohibited by
law or make any decision not prohibited by law with respect to proceedings for
indemnity against the liability of the Issuer and its officers, directors,
employees and agents and for collection or reimbursement of moneys due to it
under this Agreement for its own account. The Issuer may enforce its rights
under this Agreement which have not been assigned to the Trustee by legal
proceedings for the specific performance of any obligation contained herein or
for the enforcement of any other legal or equitable remedy, and may recover
damages caused by any breach by the Borrower of its obligations to the Issuer
under this Agreement, including any amounts required to be paid by the Borrower
pursuant to Subsection 308(b), court costs, reasonable attorney's fees and other
costs and expenses incurred in enforcing such obligations.
(b) Limitations on Actions. Without limiting the generality of Subsection
----------------------
803(c), the Issuer shall not be required to monitor the financial condition of
the Borrower and shall not have any responsibility or other obligation with
respect to reports, notices, certificates or other documents filed with it
hereunder.
(c) Responsibility. The Issuer shall be entitled to the advice of counsel
--------------
(who may be counsel for any party) and shall not be liable for any action taken
or omitted to be taken in good faith in reliance on such advice. The Issuer may
rely conclusively on any communication or other document furnished to it under
this Agreement and reasonably believed by it to be genuine. The Issuer shall
not be liable for any action (i) taken by it in good faith and reasonably
believed by it to be within the discretion or powers conferred upon it, or (ii)
in good faith omitted to be taken by it because reasonably believed to be beyond
the discretion or powers conferred upon it, (iii) taken by it pursuant to any
direction or instruction by which it is governed under this Agreement or (iv)
omitted to be taken by it by reason of the lack of direction or instruction
required for such action, nor shall it be responsible for the
consequences of any error of judgment reasonably made by it. It shall in no
event be liable for the application or misapplication of funds, or for other
acts or defaults by any person except its own directors, officers and employees.
When any consent or other action by the Issuer is called for by this Agreement,
the Issuer may defer such action pending such investigation or inquiry or
receipt of such evidence, if any, as it may require in support thereof. It
shall not be required to take any remedial action (other than the giving of
notice) unless reasonable indemnity is provided for any expense of liability to
be incurred thereby. It shall be entitled to reimbursement for expenses
reasonably incurred or advances reasonably made, with interest at the "base
rate" of the Trustee, as announced from time to time (or, if none, the nearest
equivalent), plus 2% per annum, in the exercise of its rights or the performance
of its obligations hereunder, to the extent that it acts without previously
obtaining indemnity. No
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permissive right or power to act shall be construed as a requirement to act; and
no delay in the exercise of any such right or power shall affect the subsequent
exercise of that right or power. The Issuer shall not be required to take notice
of any breach or default by the Borrower under this Agreement except when given
notice thereof by the Trustee. No recourse shall be had by the Borrower, the
Trustee or any Bondowner for any claim based on this Agreement, the Bonds or any
agreement securing the same against any director, officer, agent or employee of
the Issuer alleging personal liability on the part of such person unless such
claim is based upon the willful dishonesty of or intentional violation of law by
such person. No covenant, stipulation, obligation or agreement of the Issuer
contained in this Agreement shall be deemed to be a covenant, stipulation,
obligation or agreement of any present or future director, officer, employee or
agent of the Issuer in his or her individual capacity, and no person executing a
Bond shall be liable personally thereon or be subject to any personal liability
or accountability by reason of the issuance thereof.
(d) Financial Obligations. Nothing contained in this Agreement is intended
---------------------
to impose any pecuniary liability on the Issuer nor shall it in any way obligate
the Issuer to pay any debt or meet any financial obligations to any person at
any time in relation to the Project except from moneys received under the
provisions of this Agreement; provided, however, that nothing contained in this
Agreement shall in any way obligate the Issuer to pay such debts or meet such
financial obligations from moneys received from the Issuer's own account.
ARTICLE IX. THE BONDOWNERS
Section 901. Action by Bondowners. Subject to Subsections 601(a), 601(b)
----------- --------------------
and Section 1101 (as to the waivers and consents granted thereby) and in any
event subject to Section 610, Bondowners representing a majority in principal
amount of the Bonds Outstanding shall have the right at any time, by written
notice to the Trustee and upon offering it indemnity as provided in Subsection
702(e), to direct the Trustee (i) in the granting of any consents, waivers or
similar actions pertaining to the Bonds, (ii) in the time, method and place of
conducting all proceedings, (iii) in the exercise of any rights or remedies
available to the Trustee hereunder, or (iv) in the exercise of any other right
or power conferred upon the Trustee for the protection of the Bondowners,
provided that such direction shall be in accordance with the provisions of law
and this Agreement, and the Trustee may take any other action determined proper
by the Trustee which is not inconsistent with such direction.
Any request, authorization, direction, notice, consent, waiver or other
action provided by this Agreement to be given or taken by Bondowners may be
contained in and evidenced by one or more writings of substantially the same
tenor signed by the Bondowners of the requisite percentage of principal amount
of Bonds Outstanding or their attorneys duly appointed in writing. Proof of the
execution of any such instrument, or of any instrument appointing any such
attorney, shall be sufficient for any purpose of this Agreement (except as
otherwise herein expressly provided) if made in the following manner, but the
Issuer or the Trustee may
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nevertheless in its discretion require further or other proof in cases where it
deems the same desirable:
The fact and date of the execution by any Bondowner or its attorney of such
instrument may be proved by the certificate, which need not be acknowledged or
verified, of an officer of a bank or trust company satisfactory to the Issuer or
to the Trustee or of any notary public or other officer authorized to take
acknowledgments of the deeds to be recorded in the state in which he purports to
act, that the person signing such request or other instrument acknowledged to
him or her the execution thereof, or by an affidavit of a witness of such
execution, duly sworn to before such notary public or other officer. The
authority of the person or persons executing any such instrument on behalf of a
corporate Bondowner may be established without further proof if such instrument
is signed by a person purporting to be the president or a vice president of such
corporation with a corporate seal affixed and attested by a person purporting to
be its clerk or secretary or an assistant clerk or assistant secretary.
The ownership of Bonds and the amount, numbers and other identification, and
date of holding the same shall be proved by the registry books for the Bonds
maintained by the Paying Agent.
Any request, consent or vote of the owner of any Bond shall bind all future
owners of such Bond. Bonds owned or held by or for the account of the Issuer,
the Borrower, or any related person to the Borrower within the meaning of
Section 147(a) of the IRC shall not be deemed Outstanding Bonds for the purpose
of any consent or other action by Bondowners, except that for such purposes
Pledged Bonds shall be treated as Outstanding and shall be deemed to be owned by
the Bank.
ARTICLE X. THE BORROWER
Section 1001. Corporate Organization, Authorization and Powers; Sale,
------------- -------------------------------------------------------
Merger or Consolidation. The Borrower represents and warrants that it is a
- -----------------------
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and is qualified to do business and is in good standing
in the Commonwealth, with the power to enter into and perform this Agreement,
and, that by proper corporate action it has duly authorized the execution and
delivery of this Agreement. The Borrower further represents and warrants that
each of this Agreement is a valid and binding obligation of the Borrower
enforceable in accordance with its terms except as enforceability may be subject
to the exercise of judicial discretion in accordance with general equitable
principles and to applicable bankruptcy, insolvency, reorganization, moratorium
and other laws for the relief of debtors heretofore or hereafter enacted to the
extent that the same may be constitutionally applied. The execution and delivery
of this Agreement and the consummation of the transactions contemplated herein
will not conflict with or constitute a breach of or default under its corporate
charter or bylaws, as amended to date, or any bond, indenture, note or other
evidence of indebtedness of the Borrower, or any contract, lease or other
instrument to which the Borrower is a party or by
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which it is bound or cause the Borrower to be in violation of any judicial
decision to which it is a party or any applicable statute or rule or regulation
of any governmental authority.
The Borrower will maintain its corporate existence and good standing under
the laws of Delaware, and will maintain itself as a foreign corporation duly
qualified to do business and in good standing, where applicable, in the
Commonwealth and in each other jurisdiction in which the failure to so qualify
would have a material adverse effect upon its business or properties. The
Borrower shall not merge or consolidate with or sell all or substantially all of
its assets to another entity, except that the Borrower may so merge or
consolidate with or sell all or substantially all of its assets to another
corporation if (i) the surviving or transferee corporation is qualified to do
business in the Commonwealth, (ii) the surviving or transferee corporation (if
not the Borrower) has assumed in writing all of the Borrower's obligations
hereunder, and (iii) upon such assumption there will not be a Default hereunder.
Section 1002. Indemnification by the Borrower. The Borrower, regardless of
------------ -------------------------------
any agreement to maintain insurance, shall indemnify and save harmless the
Issuer and the Trustee and their respective directors, officers, employees and
agents from and against (a) any and all claims by or on behalf of any person
arising out of (1) any condition of the Project, or (2) the construction,
reconstruction, improvement, use, occupancy, conduct or management of the
Project or any work or anything whatsoever done or omitted to be done in or
about the Project, or (3) any accident, injury or damage whatsoever to any
person occurring in or about the Project, or (4) any breach or default by the
Borrower of or in any of its obligations hereunder, or in the Reimbursement
Agreement or any related document, or (5) any act or omission of the Borrower or
the Bank or any of its agents, contractors, servants, employees or licensees, or
(6) the offering, issuance, sale or any resale of the Bonds, but only to the
extent permitted by law, or (7) any action, suit, claim, or proceedings
instituted or threatened in connection with the transactions contemplated by the
Agreement or any related document and (b) any and all costs, counsel fees,
expenses or liabilities reasonably incurred in connection with any such claim or
any action or proceeding brought thereon. In case any action or proceeding is
brought against the Issuer or the Trustee or any such director, officer,
employee or agent by reason of any such claim, the Borrower upon notice from the
indemnified party shall resist or defend the same at its expense upon notice
from the affected person; in so doing, the Borrower shall not take any action
that would result in a determination of guilt or liability against the
indemnified party without the express written consent of the affected party. If
the defendant in any action for which indemnity is required hereunder include
both the Borrower and an indemnified party and such indemnified party shall have
been advised in writing by its counsel that defenses are available to such
indemnified person which are not available to the Borrower and that it would be
inappropriate for the same counsel to represent both the Borrower and the
indemnified party, such indemnified party shall have the right to employ its own
counsel in such action, in which event the Borrower shall reimburse the
indemnified party for any reasonable legal or other expenses incurred by the
indemnified party arising out of or in connection with the action against it and
to participate in the defense thereof. The Borrower shall not be liable for any
settlement of any such action without its consent; but if any such action is
settled with the
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consent of the Borrower or if there be a final judgment for the plaintiff in any
such action (of which the Borrower shall have been notified), the Borrower shall
indemnify and hold harmless each indemnified party from and against any losses,
costs, claims, damages, actions, liabilities or expenses incurred or suffered by
reason of such settlement or judgment. Subject to the foregoing, each
indemnified person shall cooperate and join with the Borrower, at the expense of
the Borrower, as may be required in connection with any action taken or defended
by the Borrower. The indemnity provided in this paragraph includes reimbursement
for expenses reasonably incurred by the indemnified parties in investigating the
claim and in defending it if the Borrower declines to assume the defense.
To the extent permitted by law, the Borrower covenants that it will indemnify
the Issuer and the Trustee, and their respective directors, officers, employees
and agents against and hold them harmless from any claim by any person, based
upon any relationship, agreement or understanding with the Borrower for a
commission or fee in connection with the placement of the Bonds by the Placement
Agent or otherwise.
To the extent permitted by law, the Borrower shall pay, and shall indemnify
the Issuer and the Trustee, and their respective directors, officers, employees
and agents against all costs and charges, including without limitation
reasonable counsel fees, lawfully and reasonably incurred in exercising any
rights provided for herein after an Event of Default by the Borrower or in
enforcing any covenant or agreement of the Borrower contained in this Agreement.
The provisions of this Section 1002 shall survive the payment of the Bonds
and discharge of the lien of this Agreement. If the Trustee resigns or is
replaced, the Borrower's obligations under this Section 1002 shall continue for
the benefit of the Trustee as well as the successor Trustee.
Section 1003. Adequacy of Disclosure. Neither this Agreement nor any other
------------ ----------------------
document, certificate or statement furnished to the Placement Agent or the
Issuer by or on behalf of the Borrower in connection with the transactions
contemplated hereby or thereby, contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements
contained herein and therein not misleading.
ARTICLE XI. MISCELLANEOUS
Section 1101. Amendments.
------------ ----------
(a) Without Bondowners' Consent. The parties may from time to time, without
---------------------------
the consent of any Bondowner, amend this Agreement in order to (i) cure any
ambiguity, defect or omission in the Agreement that does not materially
adversely affect the interests of the Bondowners, (ii) grant additional rights
or security to the Trustee for the benefit of the Bondowners, (iii) add
additional Events of Default as shall not be inconsistent with the provisions of
this Agreement and which shall not materially adversely affect the interests of
the
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Bondowners, (iv) qualify this Agreement under the Trust Indenture Act of
1939, as amended, or corresponding provisions of federal laws from time to time
in effect, (v) amend or modify the provisions of Section 305 in this Agreement,
so long as the Trustee is provided with an opinion of Bond Counsel to the effect
that (a) such amendment or modification does not adversely affect the federal
tax-exempt status of interest on the Bonds or (b) such amendment or modification
is required to preserve the federal tax-exempt status of interest on the Bonds,
(vi) modify or delete any provision in the Agreement if, in the opinion of Bond
Counsel, such modification or deletion is necessary in order to comply with
regulations under or official interpretations of the Code, (vii) effective upon
the Fixed Rate Conversion Date, make any amendment affecting only the Bonds
being converted, or (viii) make such other provisions in regard to matters or
questions arising under this Agreement which, in the judgment of the Trustee,
shall not materially adversely affect the interests of the Bondowners.
(b) With Bondowners' Consent. Except as set forth in Subsection 1101(a), the
------------------------
parties may from time to time amend this Agreement with the consent of the
registered owners of more than 50% in aggregate principal amount of the Bonds
Outstanding; provided, that no amendment shall be made which adversely affects
the rights of some but less than all the Bonds Outstanding without the consent
of the registered owners of more than 50% in aggregate principal amount of the
Bonds so affected; and provided further, that no amendment of this Agreement
shall be effective to (i) change the principal, premium or interest on any
Bonds, (ii) change the interest payment dates, maturity dates or purchase or
redemption provisions of any Bonds, (iii) reduce the percentage of Bondowners
whose consent is required for the amendment of this Agreement or (iv) modify the
lien upon or pledge of the payments and other revenues assigned and pledged
hereunder (including any Credit Facility), without the consent, in each case, of
the registered owner of each Bond which would be affected by the action proposed
to be taken.
When the Trustee determines that the requisite number of consents have been
obtained for an amendment which requires Bondowner consent, it shall, within
ninety (90) days, file a certificate to that effect in its records and mail
notice to the Bondowners. No action or proceeding to invalidate the amendment
shall be instituted or maintained unless it is commenced within sixty (60) days
after such mailing. The Trustee will promptly certify to the Issuer that it has
mailed such notice to all Bondowners and such certificate will be conclusive
evidence that such notice was given in the manner required hereby. A consent to
an amendment given by any Bondowner may be revoked by a notice given by such
Bondowner and received by the Trustee prior to the Trustee's certification that
the requisite consents have been obtained but, if not revoked, shall be binding
upon any subsequent owner of such Bonds.
(c) General. Any amendment of this Agreement shall be accompanied by an
-------
opinion of Bond Counsel reasonably satisfactory to the Issuer and the Trustee to
the effect that the amendment is permitted by this Agreement and that such
amendment will not adversely affect the exclusion from gross income for federal
income tax purposes of interest on the Bonds. So long as a Credit Facility
supports the Bonds no amendment to this Agreement shall
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be made without the consent of the Bank. So long as no Event of Default
described in Section 601(a)(i) exists with respect to any Bonds supported by a
Credit Facility, the Bank and not the Bondowners shall be deemed to be the owner
of all Bonds for the purpose of any amendment, consent or other action by
Bondowners except amendments referred to in clauses (i) through (iv) of the
first paragraph of Subsection (b).
Notice of any amendment of this Agreement or the Credit Facility any
extension or substitution of the Credit Facility, any defeasance of the Bonds,
any conversion to a Fixed Rate Mode, or any material change to the Reimbursement
Agreement or any remarketing agreement entered into by the Remarketing Agent and
the Borrower shall be sent by the Borrower to S&P in advance of such events.
The Trustee shall notify S&P of any acceleration or redemption of the Bonds.
Section 1102. Notices. Unless otherwise expressly provided, all notices to
------------ -------
the Issuer, the Trustee, the Paying Agent and the Borrower shall be in writing
and shall be deemed sufficiently given if sent by registered or certified mail,
postage prepaid, or delivered during a Business Day as follows: (a) to the
Issuer at 75 Federal Street, Boston, Massachusetts 02110, attention: Executive
Director, (b) to the Trustee at 111 Westminster Street, Providence, Rhode Island
02903, Attention: Corporate Trust Department, (c) to the Borrower at 50 Kennedy
Plaza, Providence, Rhode Island 02903, Attn: Chairman, and (d) to the
Remarketing Agent at 14 Wall Street, 27th Floor, New York, New York 10005,
Attention: President or, as to all of the foregoing, to such other address as
the addressee shall have indicated by prior written notice to the one giving
notice. All notices to a Bondowner shall be in writing and shall be deemed
sufficiently given if sent by first class mail, postage prepaid, to the
Bondowner at the address shown on the registration books for the Bonds
maintained by the Trustee. A Bondowner may direct the Trustee to change its
address as shown on the registration books by written notice to the Trustee.
All notices to Bondowners shall identify the Bonds by name, CUSIP number, date
of original issuance, maturity date, and such other descriptive information as
may be needed to identify accurately the Bonds.
All notices sent to Bondowners by the Borrower, the Bank or the Trustee shall
simultaneously be sent by registered or certified mail, postage prepaid, to all
registered securities depositories that are registered owners of the Bonds,
provided that the failure to give such notice shall not affect the validity of
any notice given to the Bondowners.
Notice hereunder may be waived prospectively or retrospectively by the person
entitled to the notice, but no waiver shall affect any notice requirement as to
other persons.
Section 1103. Time. All references to times of day in this Agreement are
------------ ----
references to prevailing Boston, Massachusetts time.
Section 1104. Agreement Not for the Benefit of Other Parties. Except as
------------ ----------------------------------------------
explicitly provided herein, This Agreement is not intended for the benefit of
and shall not be construed
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to create rights in parties other than the Borrower, the Issuer, the Trustee,
the Bank and the Bondowners.
Section 1105. Severability. In the event that any provision of this
------------ ------------
Agreement shall be held to be invalid in any circumstance, such invalidity shall
not affect any other provisions or circumstances.
Section 1106. Counterparts. This Agreement may be executed and delivered in
------------ ------------
any number of counterparts, each of which shall be deemed to be an original, but
such counterparts together shall constitute one and the same instrument.
Section 1107. Captions. The captions and table of contents of this
------------ --------
Agreement are for convenience only and shall not affect the construction hereof.
Section 1108. Extent of Covenants; No Personal Liability. No covenant,
------------ ------------------------------------------
stipulation, obligation or agreement of the Issuer contained in this Agreement
shall be deemed to be a covenant, stipulation, obligation or agreement of any
present or future director, officer, employee or agent of the Issuer in his or
her individual capacity, and any director, officer, employee or agent of the
Issuer executing the Bonds shall not be liable personally thereon or be subject
to any personal liability or accountability by reason of the issuance thereof.
Section 1109. Business Days. Except as otherwise required herein, if this
------------ -------------
Agreement requires any party to act on a specific day and such day is not a
Business Day, such party need not perform such act until the next succeeding
Business Day, and such act shall be deemed to have been performed on the day
required.
Section 1110. Survival of Representations and Warranties. All agreements,
------------ ------------------------------------------
representations and warranties made herein will survive the execution and
delivery of the Agreement and the making of the Loan.
Section 1111. Governing Law; Sealed Instrument. This instrument shall be
------------ --------------------------------
governed by the laws of the Commonwealth. It is intended that this Agreement
shall have the effect of a sealed instrument.
Section 1112. Usury. It is the intention of the parties hereto to comply
------------ -----
with any applicable usury laws; accordingly, it is agreed that, notwithstanding
any provisions to the contrary in this Agreement or the Bonds, in no event shall
this Agreement or the Bonds require the payment or permit the collection of
interest or any amount in the nature of interest or expenses in excess of the
maximum amount permitted by applicable law.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed under seal all as of the date first above written.
MASSACHUSETTS INDUSTRIAL FINANCE
AGENCY
By:___________________________________
Executive Director/General Counsel/
Director of Finance
AFC CABLE SYSTEMS, INC.
By:___________________________________
Name:
Title:
FLEET NATIONAL BANK, as Trustee
By:____________________________________
Name:
Title:
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EXHIBIT A
FORM OF INVESTMENT LETTER
[LETTERHEAD OF PURCHASER]
___________________, _____
Massachusetts Industrial
Finance Agency
75 Federal Street
Boston, Massachusetts 02110
Fleet National Bank
111 Westminster Street
Providence, RI 02903
Attention: Corporate Trust Department
[NAME AND ADDRESS OF PRIOR HOLDER]
Re: Massachusetts Industrial Finance Agency
$3,570,000 Industrial Revenue Bonds
(AFC Cable Systems, Inc. - Series 1996)
Gentlemen:
The undersigned, _________________________ (the "Purchaser"), proposes
to purchase $______________ aggregate principal amount of Industrial Revenue
Bonds (AFC Cable Systems, Inc.- Series 1996 (the "Bonds") issued by the
Massachusetts Industrial Finance Agency (the "Issuer"). We understand that the
Bonds are secured by (A) an irrevocable, transferable, direct-pay letter of
credit dated _____________ (the "Letter of Credit") issued by Fleet National
Bank (the "Bank") in favor of Fleet National Bank, as trustee (the "Trustee")
under a certain Loan and Trust Agreement dated as of July 1, 1996 among the
Issuer, AFC Cable Systems, Inc. and the Trustee (the "Agreement"), in an amount
sufficient to pay the principal or Purchase Price of or the portion of the
Purchase Price (as defined in the Agreement) corresponding to principal of the
Bonds plus up to 46 days' accrued interest on the Bonds or the portion of the
Purchase Price corresponding to interest (at the maximum rate of twelve percent
12% per annum) on the Bonds and (B) the Agreement.
In connection with our purchase of the Bonds, the Purchaser hereby
makes the following representations upon which you may rely:
-1-
<PAGE>
1 . The Purchaser is acquiring the Bonds for the investment and not
with a view to, or for resale in connection with, any distribution of the Bonds
or any part thereof. The Purchaser intends to hold the Bonds for its own
account for an indefinite period of time and does not intend at this time to
dispose of all or any part of the Bonds.
2. The Purchaser acknowledges that it is familiar with the condition,
financial and otherwise, of the Project, the Borrower and the Bank. To the
extent deemed appropriate in making its investment decision, the Purchaser has
discussed their respective financial conditions and their respective current and
proposed corporate and business activities with the Issuer, the Borrower and the
Bank. The Purchaser further acknowledges that it is an institutional investor
and has such knowledge and experience in business matters that it is fully
capable of evaluating the merits and risks of such investment. The Bonds are
securities of the kind the Purchaser wishes to purchase and hold for investment,
and the nature and amount of the Bonds are consistent with the Purchaser's
investment program. The Issuer, Borrower and the Bank have allowed the
Purchaser to obtain any information about their affairs which the Purchaser has
believed to be desirable for its purposes. The Purchaser has made such
inquiries as it has believed to be desirable for its purposes, and the Purchaser
has obtained all information that it regards as necessary for its decision to
purchase the Bonds.
3. The Purchaser is a Financial Institution as defined in the
Indenture.
[PURCHASER]
BY:_____________________________
-2-
<PAGE>
EXHIBIT 10.2
REIMBURSEMENT AGREEMENT
between
AFC CABLE SYSTEMS, INC.
and
FLEET NATIONAL BANK
Dated as of July 1, 1996
<PAGE>
REIMBURSEMENT AGREEMENT
This REIMBURSEMENT AGREEMENT (this "Agreement") is made as of the 1st
day of July, 1996 by and between AFC CABLE SYSTEMS, INC., a Delaware corporation
(the "Company"), and FLEET NATIONAL BANK, a national banking association
organized and existing under the laws of the United States of America, with its
principal office located in the City of Providence, Rhode Island ("Bank").
A. The Company has requested financing from the Massachusetts
Industrial Finance Agency (the "Issuer") for the refinancing of indebtedness
secured by a mortgage loan on an industrial building and the financing of
construction of certain improvements located at 260 Duchaine Boulevard in New
Bedford, Massachusetts (the "Project").
B. The Issuer has agreed to issue its Industrial Revenue Bonds (AFC
Cable Systems, Inc. Issue - Series 1996) in the aggregate amount of $3,624,000
(the "Bonds") pursuant to a Loan and Trust Agreement dated as of July 1, 1996,
by and between the Issuer and Fleet National Bank, as trustee (the "Trustee")
(the "Indenture").
C. In order to secure the payment of the principal of and the interest
on the Bonds, the Company has requested the Bank to issue its Letter of Credit
(as defined in Section 2.01 hereof) in favor of the Trustee for the benefit of
------------
the owners of the Bonds as more fully described herein.
D. In order to induce the Bank to issue its Letter of Credit and
thereby provide security for the Bonds, the Company and the Bank are entering
into a Mortgage and Security Agreement dated of even date herewith (the
"Mortgage").
NOW, THEREFORE, the Company and the Bank agree as follows:
ARTICLE I. DEFINITIONS
-----------
Section 1.01. Definitions. Terms defined in the introductory
-----------
paragraph and the recitals to this Agreement have the respective meanings
assigned to those terms in such paragraph and recitals. The following
additional terms are used in this Agreement with the following respective
meanings, unless the context require otherwise:
"Additional Termination Date" shall mean such other termination date
---------------------------
following the Original Termination Date, as hereinafter defined, of the Letter
of Credit, as may be granted by the Bank in its sole and absolute discretion.
"Authorized Financial Officer" shall mean the individual or individuals
----------------------------
designated by the Company for this purpose by a written certificate furnished by
the Company.
<PAGE>
"Bank Bonds" means all Bonds at any time purchased, in whole or in
----------
part, with the proceeds of a draw on the Letter of Credit upon tender of each
such Bond to the Trustee by the Bondholder pursuant to the Indenture, until
released by the Bank.
"Base Rate" Base Rate means the interest rate per annum from time to
---------
time announced and made effective by the Bank, or any successor in interest, as
its base rate (or, as the case may be, the prime, reference or other similar
rate then designated by the Bank for general commercial lending reference
purposes), it being understood that such rate is a reference rate, and not
necessarily the lowest rate of interest charged to its most creditworthy
business customers. Any change in the Base Rate shall become effective on the
date on which such change in the Base Rate becomes effective.
"Business Day" shall mean any day other than (a) a day on which the New
------------
York Stock Exchange is closed, or (b) a day on which commercial banks in Boston,
Massachusetts or the city or cities in which the principal corporate trust
office of the Trustee are authorized or required by law to close, or (c) a
Sunday or legal holiday.
"Code" shall mean the United States Internal Revenue Code of 1986, as
----
amended from time to time, together with corresponding and applicable
regulations and revenue rulings issued with respect thereto by the Treasury
Department or the Internal Revenue Service of the United States.
"Collateral" shall mean the property and interests described in the
----------
Mortgage and the Collateral Assignment.
"Collateral Assignment" shall mean the Collateral Assignment of Rentals
---------------------
and Leases dated as of July 1, 1996 granted by the Company to the Bank.
"Controlled Group" shall mean all members of a controlled group of
----------------
corporations and all trades or businesses (whether or not incorporated) under
common control which are treated as a single employer under Section 414(b) or
414(c) of the Code.
"Credit Agreement" shall mean the Credit Agreement dated as of March
----------------
29, 1996 by and between the Company and the Bank.
"Date of Issuance" shall mean the date on which the Letter of Credit is
----------------
issued.
"Debt" Debt means all items which (a) constitute "debt" or "Debt"
----
under Section 101(11) of the United States Bankruptcy Code or under the United
States Uniform Fraudulent Conveyance Act, the United States Uniform Fraudulent
Transfer Act or any analogous applicable law, and (b) in accordance with
generally accepted accounting principles consistently applied, would be included
in determining total liabilities as shown on the liability side of a balance
sheet as of the date Debt is to be determined and, in any event, shall include,
-2-
<PAGE>
without limitation, any liability, whether or not any such liability shall have
been assumed, (i) on account of deposits, advances or progress payments under
contract, or any indebtedness or liability evidenced by notes, bonds, debentures
or similar obligations (including, without limitation, any purchase option
obligations, conditional sales or similar title retention agreements) or
indebtedness for borrowed money, (ii) secured by any mortgage, pledge, lien or
security interest on or in property owned or acquired, and (iii) under a lease
which, in accordance with generally accepted accounting principles consistently
applied, should be capitalized, and guaranties, endorsements (other than for
collection in the ordinary course of business) and other contingent obligations
in respect of the obligations of others.
"Demand Loans" shall have the meaning set forth in Section 4.02 hereof.
------------ ------------
"Drawing" shall mean any drawing described in the Letter of Credit.
-------
"Drawing Date" shall mean each date on which the Bank honors a drawing
------------
under the Letter of Credit.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
-----
as the same may be amended.
"Event of Default" shall mean any of the events specified in Article
---------------- -------
VIII hereof, provided that any requirement for the giving of notice or the lapse
- ----
of time or both or the happening of any other condition has been satisfied.
"Expiration Date" shall have the meaning assigned to that term in the
---------------
Letter of Credit.
"Generally Accepted Accounting Principles" or "GAAP" shall mean those
--------------------------------------------------
generally accepted accounting principles and practices which are recognized as
such by the American Institute of Certified Public Accountants acting through
its Accounting Principles Board or by the Financial Accounting Standard Board or
through other appropriate boards or committees thereof and which are
consistently applied so as to properly reflect the financial condition, and the
results of operations and changes in financial position, of the Company, and its
wholly owned subsidiaries (if any), except that any change in any accounting
principle or practice approved by the particular entity's independent certified
public accountants, disclosed in its financial statements and required or
permitted to be made by the Accounting Principles Board or Financial Accounting
Standard Board (or other appropriate board or committee of said Boards) in order
to continue as a generally accepted accounting principle or practice or
consistent with existing generally accepted accounting principles may be so
made. Any dispute or disagreement between the Company and any wholly owned
subsidiary and the Bank relating to the determination of Generally Accepted
Accounting Principles shall, in the absence of manifest error and provided the
accounting firm is a firm of national standing, be conclusively resolved for all
purposes hereof by the written statement with respect thereto,
-3-
<PAGE>
delivered to the Bank, of the independent accountant selected by the Company and
any wholly owned subsidiary and reasonably acceptable to the Bank for the
purpose of auditing the periodic financial statements of the Company and any
wholly owned subsidiary.
"Governmental Person" shall mean the government of the United States or
-------------------
the government of any state or locality therein, any political subdivision or
any governmental, quasi governmental, judicial, public or statutory
instrumentality, authority, body or entity, or other regulatory bureau,
authority, body or entity of the United States or of any state or locality
therein, including the Federal Deposit Insurance Corporation, the Comptroller of
the Currency or the Board of Governors of the Federal Reserve System, any
central bank or any comparable authority.
"Indenture" means the Loan and Trust Agreement dated as of July 1,
---------
1996, between the Issuer and Trustee, pursuant to which the Bonds are to be
issued by the Issuer and the proceeds of the Bonds are to be loaned to the
Company, and any indentures supplemental to the Indenture.
"Initial Stated Amount" means Three Million Six Hundred Twenty-Four
---------------------
Thousand Dollars ($3,624,000.00), the amount available to be drawn under the
Letter of Credit as of the Date of Issuance, as set forth therein.
"Letter of Credit" shall have the meaning set forth in Section 2.01
---------------- ------------
hereof.
"Letter of Credit Event" shall mean the Original Termination Date or
----------------------
any Additional Termination Date, where applicable, provided that the Company has
not obtained an alternate letter of credit issuer.
"Letter of Credit Payment" shall mean any payment to the Trustee by the
------------------------
Bank with respect to a drawing by the Trustee under the Letter of Credit.
"Liability" Liability means (whether with full or limited recourse)
---------
any indebtedness, liability, obligation, covenant or duty of or binding upon, or
any term or condition to be observed by or binding upon, the Company or any of
its assets, of any kind, nature or description, direct or indirect, absolute or
contingent, due or not due, contractual or tortious, liquidated or unliquidated,
whether arising under contract, law or otherwise, whether now existing or
hereafter arising, and whether for the payment of money or performance or non-
performance of any act.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
----
security interest, lien, charge, encumbrance, preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing, and the filing of, or agreement to give, any
-4-
<PAGE>
financing statements under the Uniform Commercial Code or comparable law of any
jurisdiction), but not including any Lien specifically permitted under Section
-------
7.02 hereof.
- ----
"Material Adverse Effect" shall mean a material adverse effect on the
-----------------------
business, property, assets, financial condition or results of operations of the
Company and any wholly owned subsidiary.
"Mortgage" shall mean the Mortgage Deed and Security Agreement dated as
--------
of July 1, 1996 granted by the Company to the Bank.
"Obligations" shall mean all obligations of the Company to the Bank,
-----------
whenever incurred, direct or indirect, absolute or contingent.
"Original Termination Date" shall mean, with respect only to the Letter
-------------------------
of Credit, July 6, 2001.
"Paying Agent" shall mean the Trustee and its successors and assigns as
------------
Paying Agent for the Bonds, from time to time, as such succession or assignment
may be made under the Indenture.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
----
pursuant to Subtitle A of Title IV of ERISA.
"Person" shall mean an individual, a partnership, a corporation
------
(including a business trust), a joint stock company, a trust, an unincorporated
association, a joint venture or other entity or a government or any agency or
political subdivision thereof.
"Plan" shall mean at any time 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 and is either (i) maintained by a member of the
Controlled Group for employees of a member of the Controlled Group or (ii)
maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
a member of the Controlled Group is then making or accruing obligation to make
contributions or has within the preceding five plan years made contributions.
"Pledge Agreement" means that certain Pledge Agreement, dated as of the
----------------
date hereof, executed by the Company and in favor of the Bank, and pledging to
the Bank the Bank Bonds delivered to the Paying Agent for the benefit of the
Company in connection with any A Drawing.
"Real Estate" shall mean the real estate, fixtures, and other
-----------
improvements located at 260 Duchaine Boulevard in New Bedford, Massachusetts.
-5-
<PAGE>
"Related Documents" shall mean the Indenture, the Bonds, the Mortgage,
-----------------
and the Collateral Assignment, each as amended, modified or supplemented from
time to time.
"Remarketing Agent" means Fleet Securities, Inc. in its capacity as
-----------------
remarketing agent under the Remarketing Agreement, its successors and assigns.
"Reportable Event" shall mean any of the events set forth in Section
----------------
4043(b) of ERISA.
"S.E.C." shall mean the United States Securities and Exchange
------
Commission.
"Stated Amount" shall mean the Initial Stated Amount from time to time
-------------
reduced in accordance with the terms of the Letter of Credit.
"Subsidiary" of a Person shall mean a corporation with respect to which
----------
more than 50% of the outstanding shares of stock of each class having ordinary
voting power (other than stock having such power only by reason of the happening
of a contingency) is at the time owned by such Person or by one or more
Subsidiaries of such Person or by such Person and one or more Subsidiaries of
such Person.
"Wholly-Owned Subsidiary" means any Subsidiary all of the shares of
-----------------------
capital, stock or other ownership interests of which (except director's
qualifying shares) are at the time directly or indirectly owned by the Company.
Section 1.02. Accounting Terms. Unless otherwise specified in this
----------------
Agreement, all accounting terms used in this Agreement shall be interpreted, and
all accounting determinations under this Agreement or in any certificate, report
or other documents made or delivered pursuant to this Agreement shall be made,
and all financial statements required to be delivered under this Agreement shall
be prepared in accordance with GAAP as in effect from time to time.
Section 1.03. Other Definitional Provisions. (a) All terms defined in
-----------------------------
this Agreement shall have the defined meanings when used in the Bonds, any
certificate, report or other document made or delivered pursuant to this
Agreement unless the context shall otherwise require.
(b) The words "hereof", "herein" and "hereunder" and words of similar
------ ------ ---------
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement.
-6-
<PAGE>
ARTICLE II. THE LETTER OF CREDIT
--------------------
Section 2.01. Letter of Credit. At the request of the Company, the
----------------
Bank shall, subject to the terms and conditions hereof, issue the Letter of
Credit substantially in the form of Exhibit "A" attached hereto (the "Letter of
-----------
Credit") in the Initial Stated Amount for the account of the Company and shall
deliver the Letter of Credit to the Trustee. The Letter of Credit shall expire
on the Original Termination Date, subject to earlier termination as provided in
the Letter of Credit and/or subject to an extension in accordance with Section
-------
2.12 hereof, as the case may be. The Bank shall make payments on the Letter of
- ----
Credit from the Bank's own funds.
Section 2.02. Letter of Credit Fee. The Company hereby agrees to pay
--------------------
to the Bank an annual letter of credit fee equal to one percent (1%) of the
Stated Amount as of the Date of Issuance and each anniversary thereof. The
initial fee shall be payable on the Date of Issuance, and thereafter the annual
fee shall be payable in one annual installment, in advance, the first such
installment to be due on July 24, 1997, and subsequent installments to be due on
each July 24 thereafter as long as the Letter of Credit remains outstanding.
Section 2.03. Reduction of Stated Amount; Reinstatement of Stated
---------------------------------------------------
Amount for Interest on the Bonds. The Stated Amount shall be reduced and
- --------------------------------
reinstated as specified in the Letter of Credit. The Principal Component (as
defined in the Letter of Credit) shall be permanently reduced immediately upon
the date of each Drawing under the Letter of Credit applied to the payment of
principal on the Bonds (as required by the Indenture). Upon each such reduction
in the Principal Component, the Interest Component (as defined in the Letter of
Credit) shall be permanently reduced to that amount sufficient to provide forty-
six (46) days' interest on the Bonds (computed at the rate of twelve percent
(12%) per annum on the basis of the actual number of days elapsed and on a 365-
day or 366-day year as appropriate).
The Letter of Credit shall be reduced by the amount of any unremarketed
bonds, as defined in the Indenture; however, the Letter of Credit will, to the
extent of such unremarketed bonds, be reinstated if such Bonds are later
remarketed. The Letter of Credit shall be reduced by the amount of any
permitted prepayments.
Section 2.04. Reimbursements and Other Payments.
---------------------------------
(a) The Company agrees to reimburse or pay to the Bank on each date on
which the Bank shall be required to pay any draft presented under the Letter of
Credit with respect to any A Drawing, B Drawing or C Drawing (except in the case
of certain C Drawings as provided below) a sum equal to (i) the amount paid by
the Bank under the Letter of Credit, and (ii) the amount of any fees, charges or
other costs and expenses incurred by the Bank in connection with any payment
made by the Bank under or with respect to the Letter of Credit; provided,
however, that with respect to any C Drawing to pay the interest portion of the
purchase price of Bonds purchased under Section 301(d)(iii) of the Indenture or
on an Interest Payment Date, payment by the Company of the amount so paid under
the Letter of Credit may
-7-
<PAGE>
be deferred until the next Interest Payment Date, at which time such amount
shall be due and payable together with interest on the amount so paid under the
Letter of Credit from the date of such payment until paid in full at the rate
set forth in paragraph (b) of this Section 2.04.
------------
(b) The Company also agrees to pay interest on demand on all unpaid
Demand Loans hereunder, which shall accrue from the date of any Drawing giving
rise to a Demand Loan hereunder at a rate per annum equal to the Base Rate. The
Company also agrees that if the entire amount of any Demand Loan hereunder is
not paid in full when due, then the Company shall pay to the Bank a late fee
equal to five percent (5%) of the required payment.
(c) If any law or regulation or interpretation thereof by any court of
administrative or governmental authority charged with the administration thereof
shall either (i) impose, modify or deem applicable any reserve, special deposit,
additional capital or similar requirement against letters of credit issued by,
or assets or collateral held by, or deposits in or for the account of, the Bank,
or (ii) impose on the Bank any other condition regarding the Letter of Credit or
the collateral held therefor, and the result of any event referred to in the
preceding clauses (i) or (ii) shall be to increase the cost to the Bank of
issuing or maintaining the Letter of Credit (which increase in cost shall be
determined by the Bank's reasonable allocation of the aggregate of such cost
increases resulting from such event), then, upon receipt of a written demand
made by the Bank, the Company shall pay to the Bank, from time to time as
specified by the Bank, additional amounts which shall be sufficient to
compensate the Bank for such increased cost.
The Bank shall use its best efforts to give the Company reasonable notice upon
learning of events which would give rise to increased costs hereunder. A
certificate as to such increased cost incurred by the Bank as a result of any
event mentioned in clause (i) or (ii) above, submitted by the Bank to the
Company, shall be conclusive as to the amount thereof.
(d) The Company hereby agrees to pay to the Bank a fee upon each
Drawing, under the Letter of Credit which shall be in an amount established by
the Bank from time to time in accordance with its usual banking practices.
The Drawing fee currently is $35.
(e) The Company hereby agrees to pay to the Bank a fee in respect of
each amendment or transfer of the Letter of Credit which shall be in an amount
established by the Bank from time to time in accordance with its usual banking
practices. The current fee for an amendment is $85, and the current fee for a
transfer is $100.
Section 2.05. Payments and Computations. Payments received by the
-------------------------
Bank from the Trustee pursuant to Section 308(d) of the Indenture shall be
treated as payments made by the Company hereunder. To the extent the Bank has
not received payments from the Trustee under Section 308(d) of the Indenture
sufficient to cover a Drawing on the Letter of Credit, and in all other
instances where reimbursement payments are required hereunder, the Company shall
make each payment hereunder not later than 2:00 p.m. (Providence time) on the
day when due in lawful money of the United States of America to the Bank at its
office at
-8-
<PAGE>
111 Westminster Street, Providence, Rhode Island in immediately available funds.
Funds received after such time shall be deemed received on the next succeeding
Business Day. The Company hereby authorizes the Bank, if and to the extent
payment is not made when due hereunder, to charge from time to time against the
Company's accounts with the Bank or with any of the Bank's affiliates any amount
so due. All computations of interest and letter of credit fees hereunder shall
be made by the Bank on the basis of a year of 365 days and the actual number of
days elapsed.
Section 2.06. Payment on Non-Business Days. Whenever any payment to
----------------------------
be made hereunder shall be stated to be due on a day that is not a Business Day,
such payment shall be made on the next succeeding Business Day, and interest and
any applicable fees shall accrue during such extension.
Section 2.07. Obligations Absolute. The obligations of the Company
--------------------
under this Agreement shall be primary, unconditional and irrevocable, and shall
be paid strictly in accordance with the terms of this Agreement notwithstanding:
(a) any lack of validity or enforceability of this Agreement, the
Letter of Credit, the Indenture or the Related Documents;
(b) any amendment or waiver of or any consent to or actual departure
from all or any of the Related Documents;
(c) the existence of any claim, set-off, defense or other right which
the Company, any entity owned (directly or indirectly) by the Company or any
entity that owns (directly or indirectly) any stock or interest in the Company
may have at any time against the Issuer, the Trustee or any other beneficiary or
any transferee of the Letter of Credit (or any persons or entities for which the
Trustee or any such beneficiary or any such transferee may be acting), the Bank,
or any other person or entity, whether in connection with this Agreement, the
transactions contemplated herein or in the Related Documents, or in any
unrelated transaction;
(d) any statement or any other document presented under the Letter of
Credit proving to be forged, fraudulent, or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;
(e) any breach of contract or other dispute between the Company and any
person;
(f) any payment by the Bank under the Letter of Credit against
presentation of a sight draft or certificate which does not comply with the
terms of the Letter of Credit;
(g) any delay, extension of time, renewal, compromise or other
indulgence or modification agreed to by the Bank, with or without notice to or
approval by the Company or any manager or member of the Company in respect of
any of the Company's indebtedness to the Bank under this Agreement;
-9-
<PAGE>
(h) any exchange, release or nonperfection of any lien or security
interest in any collateral pledged or otherwise provided to secure any of the
obligations contemplated herein or in any of the other Related Documents; or
(i) any other circumstances or happening whatsoever, whether or not
similar to any of the foregoing.
Section 2.08. The Uniform Customs and Practice; Modification,
----------------------------------------------
Consent, Etc.
- ------- ---
(a) The Uniform Customs and Practice for Documentary Credits (1993
Revision), International Chamber of Commerce Publication No. 500 (the "Uniform
Customs and Practice"), shall be binding on the Company and the Bank with
respect to the Letter of Credit except as otherwise provided in the Letter of
Credit and except to the extent otherwise from time to time agreed to by the
Bank and the Company in writing. The Company assumes all risks of the acts or
omissions of the beneficiary of the Letter of Credit with respect to the Letter
of Credit. In furtherance of, and not in limitation of the Bank's rights and
powers under the Uniform Customs and Practice, but subject to all other
provisions of this Section 2.08, it is understood and agreed that the Bank shall
------------
not have any liability for and that the Company assumes all responsibility for:
(i) the genuineness of any signature; (ii) the form, sufficiency, accuracy,
genuineness, falsification or legal effect of any draft, certification or other
document required by the Letter of Credit or the authority of the person signing
the same; (iii) the failure of any instrument to bear any reference or adequate
reference to the Letter of Credit or the failure of any persons to note the
amount of any instrument on the reverse of the Letter of Credit or to surrender
the Letter of Credit; (iv) the good faith or acts of any person other than the
Bank and its agents and employees; (v) the existence, form, sufficiency or
breach of or default under any agreement or instrument (other than the Letter of
Credit) of any nature whatsoever; (vi) any delay in giving or failure to give
any notice, demand or protest; and (vii) any error, omission, delay in or
nondelivery of any notice or other communication, however sent. The
determination as to whether the required documents are presented prior to the
expiration of the Letter of Credit and whether such other documents are in
proper and sufficient form for compliance with the Letter of Credit shall be
made by the Bank in its sole discretion, which determination shall be prima
facie evidence of compliance. It is agreed that the Bank may honor, as complying
with the terms of the Letter of Credit and this Agreement, any documents which
appear on their face to be in accordance with the terms and conditions of the
Letter of Credit, and signed or issued by the beneficiary thereof. Any action,
inaction or omission on the part of the Bank under or in connection with the
Letter of Credit or related instruments or documents, if in good faith and in
conformity with such laws, regulations, usage of trade or commercial or banking
customs as may be applicable, shall be binding upon the Company, shall not place
the Bank under any liability to the Company, and shall not affect, impair or
prevent the vesting of any of the Bank's rights or powers hereunder or the
Company's obligation to make full reimbursement.
(b) If the Company, either in writing or orally (confirmed by either
party in writing), requests or consents to any modification or extension of the
Letter of Credit or
-10-
<PAGE>
waives failure of any draft, certificate or other documents to comply with the
terms of the Letter of Credit, the Bank shall be deemed to have relied and be
entitled to rely on such requests, consent or waiver with respect to any action
taken or omitted by the Bank pursuant to any such request, consent or waiver,
and such extension, modification or waiver shall be binding upon the Company.
Section 2.09. Security. As security for the payment of all
--------
Obligations of the Company to the Bank under this Agreement and the Related
Documents, the Company will pledge to the Bank, and grant the Bank a security
interest in, pursuant to the Pledge Agreement, the Company's right, title and
interest in and to the Bank Bonds delivered to the Paying Agent for the benefit
of the Company in connection with any A Drawing.
Section 2.10. Release of Bank Bonds. Upon the Company's reimbursement
---------------------
to the Bank of all amounts drawn under the Letter of Credit in accordance with
Section 2.04 hereof, then so long as no Event of Default hereunder or under any
- ------------
Related Document exists, the Bank shall instruct the Trustee to release to the
Company or to the Remarketing Agent from the pledge and security interest
created by the Pledge Agreement a principal amount of Bank Bonds equal to the
amount of such prepayment. No release by the Bank of Bank Bonds shall be
construed as releasing the Company from any of its obligations hereunder,
including, without limitation, the Company's obligations to pay interest to the
Bank at the rate provided herein on the amount of any draw under the Letter of
Credit of the purchase price of such Bank Bonds and the Company's obligation to
pay the unreimbursed principal portion of any A-Drawing.
Section 2.11. Reinstatement of Letter of Credit.
---------------------------------
(a) After any A Drawing, the Principal Component shall be reinstated
upon delivery of a certificate in the form of Schedule 2 to the Letter of
----------
Credit.
(b) With respect to a C Drawing made in respect of interest payable on
an Interest Payment Date as a scheduled periodic payment of interest on the
Bonds or as a portion of the purchase price of Bonds being purchased with the
proceeds of an A Drawing pursuant to Sections 301(d)(iii) or 301(d)(iv) of the
Indenture, if the Trustee has not received, within ten (10) calendar days after
any payment in respect of a C Drawing, notice from the Bank to the effect that
(i) an Event of Default hereunder has occurred, and (ii) the Letter of Credit
will not be reinstated as of the date thereof, then the Interest Component will
automatically be reinstated, as of the close of business on such tenth calendar
day, to an amount which, subject to Section 2.13 below, shall be equal to 46
------------
days' accrued interest (computed at the rate of twelve percent (12%) per annum
on the basis of a 365 day year, as appropriate, notwithstanding the actual rate
of interest borne from time to time by the Bonds) on the then applicable
Principal Component. The Interest Component will not be reinstated for any C
Drawing made to pay interest except as specified in the preceding sentence.
-11-
<PAGE>
Section 2.12. Extension of the Credit Termination Date. At least one
----------------------------------------
hundred twenty (120) days before the fifth anniversary of the Date of Issuance
and at each successive anniversary of that date, the Company may request in
writing to the Bank that the Bank, in its sole discretion, extend the Letter of
Credit Termination Date for such period of time as Bank and the Company mutually
agree. Any written request to the Bank for an extension of the term of the
Letter of Credit shall be accompanied by a copy of the Company's most recent
annual financial statements audited by the Company's independent public
accountants, and copies of financial statements for the prior quarter of the
Company's current fiscal year certified by the manager or chief financial
officer of the Company. If the Bank notifies the Company that the Bank will not
extend the Letter of Credit or if the Bank does not respond to the Company's
request within thirty (30) days of receipt by the Bank of such request, then the
Letter of Credit will expire in accordance with the terms hereof, without any
extension. In the event that the Company does not enter into an agreement with
the provider of a substitute for the Letter of Credit, the Bank may, in its sole
discretion, demand payment in full of all of the Company's obligations to the
Bank hereunder and under the Related Documents.
Section 2.13. Change of Variable Rate Mode; Amendment of Letter of
----------------------------------------------------
Credit. If no Event of Default has occurred and is continuing at the time at
- ------
which the Company elects to change the rate mode of the Bonds pursuant to
Section 301(d) of the Indenture, if requested by the Company in writing not
fewer than forty-five (45) nor more than sixty (60) days prior to the date the
proposed change to a fixed rate mode is to become effective, the Bank may, at
its election, exercised in its sole discretion, issue an amendment to the Letter
of Credit which will cover the number of days of interest which are required for
that mode, together with any premium due on the Bonds during such fixed rate
mode.
Section 2.14. Application of Funds. Except as otherwise provided in
--------------------
the Mortgage, all payments received by the Bank from or on behalf of the Company
hereunder or pursuant to any of the other Related Documents shall be applied by
the Bank: first, to the payment of amounts then due and owing by the Company to
the Bank under the Letter of Credit or the other Related Documents; second, at
the Bank's discretion, to those amounts due and owing by the Company under the
Credit Agreement; and, third, if following the return to the Bank of the Letter
of Credit for cancellation and the payment to the Bank of any and all loans,
obligations and liabilities owed by the Company to the Bank, there remains any
balance, such amounts shall be disbursed by the Bank following the Letter of
Credit Termination Date to the Company or such other person or persons as shall
be legally entitled thereto; provided, however that upon any Event of Default,
-------- -------
any payment received hereunder or pursuant to any of the Related Documents may
be applied by the Bank to such obligations of the Company and in such order
(without any duty to marshall), as the Bank may elect in its sole and absolute
discretion.
Section 2.15. Substitution of Letter of Credit Bank. If the rates
-------------------------------------
charged by the Bank pursuant to this Agreement are increased for any reason
whatsoever, the Company may then, upon five (5) Business Days written notice to
the Bank, terminate the Letter of Credit and substitute another banking
institution for the Bank. Upon the expiration of the notice
-12-
<PAGE>
period provided for above, the Company shall cause the Letter of Credit to be
delivered to the Bank for cancellation. Upon termination of the Letter of
Credit under this Section 2.15, the Company shall forthwith pay or reimburse the
------------
Bank for (a) the principal of and any accrued and unpaid interest on any
outstanding Demand Loans and (b) any of the expenses referred to in Section 9.06
------------
hereof incurred prior to such termination and any other amounts due under this
Agreement and theretofore not paid or reimbursed to the Bank.
ARTICLE III. CONDITIONS PRECEDENT
--------------------
Section 3.01. Initial Conditions Precedent. The obligations of the
----------------------------
Bank to issue the Letter of Credit are subject to the following conditions
precedent having been satisfied on or before the Date of Issuance.
(a) The Bank shall have received on or before the Date of Issuance the
following in form and substance reasonably satisfactory to the Bank:
(1) copies of the resolutions of the Board of Directors of the
Company authorizing the execution, delivery and performance of this Agreement,
and all other documents to be executed by the Company on the Date of Issuance,
certified by the Secretary or other officer of the Company, dated the Date of
Issuance, which certificate shall state that such resolutions are in full force
and effect on the Date of Issuance;
(2) a certificate, dated the Date of Issuance, of the Secretary
or other officer of the Company, certifying the name and true signatures of the
representatives of the Company authorized to sign this Agreement and the other
documents to be delivered by the Company hereunder;
(3) a favorable opinion of the Company's counsel (which counsel
shall be satisfactory to the Bank) dated the Date of Issuance, in form and
substance satisfactory to the Bank in its sole discretion and to its counsel,
concerning issues involving the corporate organization of the Company, plus, at
the option of the Company, the enforceability and binding aspects of this
Agreement and all other closing documents, and with respect to such other
matters as the Bank and its counsel shall request;
(4) an executed copy of each of the Related Documents;
(5) this Agreement duly executed and delivered;
(6) legal opinion of the Bond Counsel (which counsel shall be
satisfactory to the Bank) to the effect that interest income on the Bonds shall
be exempt from Federal and Massachusetts income taxation, which opinion shall be
satisfactory to the Bank in its sole discretion;
-13-
<PAGE>
(7) legal opinion of the Bond Counsel as to due authorization,
execution and delivery of all documents to be executed by the Issuer, and that
all of the above are legal, valid, binding and enforceable, limited only by
usual special obligation language, which opinion shall be satisfactory to the
Bank in its sole discretion;
(8) certified copies of the Company's Articles of Organization and
Bylaws, good standing certificate, and all other documents, including incumbency
certificate and no default certificate;
(9) liability and property damage insurance as required under the
Indenture and the Lease Agreement and acceptable to the Bank naming the Bank as
loss payee and additional insured;
(10) such other legal opinions, agreements, documents or
information as the Bank may reasonably request.
(11) title insurance policy insuring the Bank's mortgage lien on
the Project.
(b) The following statements shall be true and correct in all
material respects on the Date of Issuance and the Bank shall have received a
certificate of the Company signed by its Secretary on behalf of the Company
dated the Date of Issuance stating that:
(1) the representations and warranties contained in Article V hereof
---------
are correct in all material respects on and as of the Date of Issuance as though
made on and as of such date;
(2) no Event of Default has occurred and is continuing, or would
result from the issuance of the Letter of Credit and no event has occurred and
is continuing which would constitute an Event of Default but for the requirement
that notice be given or that time elapse or both;
(3) no material adverse change has occurred in the business,
prospects, results of operations or condition, financial or otherwise, of the
Company since December 31, 1995, except as otherwise described to the Bank in
writing prior to the Date of Issuance;
(4) the issuance of the Letter of Credit shall not render the Company
insolvent;
(5) the Bonds and the Letter of Credit are and shall be in compliance
with all applicable securities law;
-14-
<PAGE>
(6) the most recent financial statements submitted by the
Company accurately and fairly reflect and present their financial condition and
performance in all material respects.
(c) On or before the Date of Issuance, the Related Documents shall have
been authorized, executed and delivered by the parties to such documents, and
such documents shall be in full force and effect.
(d) Originals (or copies certified to be true copies by an appropriate
officer of the Company or, in the case of approvals by the Issuer, by the
Executive Director, Director of Finance or Secretary of the Issuer) of all
governmental and regulatory approvals necessary for the Company with respect to
this Agreement and the transactions contemplated hereby.
(e) A letter satisfactory to the Bank addressed to the Bank from Bond
Counsel (which counsel shall be satisfactory to the Bank) allowing the Bank to
rely on such counsel's favorable written opinion.
(f) Such other and further documents or information as the Bank may
reasonably request.
Section 3.02. Compliance Requirement at the Time of Each Loan. At the
-----------------------------------------------
time of each Demand Loan after giving effect thereto, no Event of Default shall
have occurred and be continuing or would result from the making of such Demand
Loan and the representations and warranties contained in Article V hereof shall
---------
be true and correct in all material respects as if made on and as of such date.
The election by the Company to have the Bank make each Demand Loan shall be
deemed to be the confirmation of the Company on such date that such condition
has been satisfied on such date.
Section 3.03. Other Requirements. On or before the Date of Issuance:
------------------
(a) no legislation, rule, order or decree shall, in the opinion of
counsel for the Bank, purport to prohibit or restrain the issuance of the Letter
of Credit.
(b) The Company's representations and warranties contained herein shall
be correct and complete in all material respects and the Company shall be in
compliance in all material respects with all covenants and agreements contained
herein and applicable to the Company;
(c) no material adverse change shall have occurred in the financial
condition, business, affairs, operations or control of the Company since the
date of its financial statements most recently delivered to Bank;
(d) the Mortgage, the Collateral Assignment and the UCC-1 financing
statements (collectively, the "Security Documents") shall create a valid and
perfected lien on the property
-15-
<PAGE>
described therein, and each of the Security Documents and related UCC filings
shall have been duly recorded and filed to the satisfaction of Bank and its
counsel;
(e) the Project shall not be subject to any liens or encumbrances,
whether inferior or superior to the Security Documents, except in respect of:
(i) real estate taxes and personal property taxes not yet due and payable; (ii)
liens for taxes that are disputed by the Company in good faith; and (iii)
permitted title exceptions (as set forth in the Mortgage), if any. All real
estate taxes, personal property taxes and other municipal charges relating to
the Project shall be current.
(f) The Company shall have secured and delivered (i) all Company
documents to be executed by the Company duly executed and in form and substance
satisfactory to Bank, and (ii) all consents, waivers, acknowledgments and other
agreements from third persons which Bank may deem necessary or desirable in
order to effectuate the provisions of the Documents.
ARTICLE IV. DRAWINGS AND PAYMENT PROVISIONS
-------------------------------
Section 4.01. Place and Manner of Payment. All payments by or on
---------------------------
behalf of the Company to the Bank under this Agreement shall be made in lawful
currency of the United States and in immediately available funds on the date due
at the Bank's office, at the address set forth in Section 9.02 hereof. Any
------------
payment, notice of which shall have been given to the Bank by 2:30 p.m.
(Providence, Rhode Island time) on any Business Day and which is received by the
Bank prior to 5:00 p.m. (Providence, Rhode Island time) shall be deemed to have
been received on such day. Whenever any payment under this Agreement shall be
due on a day which is not a Business Day, the date for payment shall be extended
to the next succeeding Business Day, and any interest payable on such payment
shall be payable for such extended time at the applicable rate.
Section 4.02. Terms Applicable to Demand Loans.
--------------------------------
(a) The payment of a draft under the Letter of Credit shall constitute
a loan to and indebtedness of the Company to the Bank ("Demand Loans") due and
payable on the same day as such draw.
(b) The interest rate applicable to each Demand Loan shall be a
fluctuating rate, computed on the basis of a 365-day year for actual days
elapsed, equal to the Base Rate. Such interest rate shall apply as of the
making of such Demand Loan, it being understood and agreed that interest shall
accrue on all unreimbursed amounts from and including the day that the Bank
honors drawing(s) under the Letter of Credit to and including the date the Bank
is reimbursed in full for such drawing(s). Interest shall be paid monthly on
the first day of the month following the making of a Demand Loan and on the
first day of each month thereafter on the unpaid principal balance until such
time as the principal balance is repaid in full.
-16-
<PAGE>
(c) The principal amount of each Demand Loan shall be payable by the
Company immediately on demand.
(d) Interest accruing on each Demand Loan shall be payable on demand
and, prior to demand, on the first day of each month, in arrears (commencing
with the first such day after the date of such Demand Loan) and on the
Expiration Date.
Section 4.03. Computation of Interest and Fees. Interest referred to
--------------------------------
above and the letter of credit fees referred to in Sections 2.02 and 2.04 hereof
------------- -----
shall be computed on the basis of a 365-day year, for actual days elapsed.
Section 4.04. Evidence of Debt. The books and records of the Bank
----------------
shall be conclusive evidence, absent manifest error, of all amounts of
principal, interest, fees and other charges advanced, due, outstanding or paid
pursuant to this Agreement. The Bank agrees to provide statements of such
amounts to the Company and the Trustee upon the Company's written request;
provided, however, that, in the event of any conflict between such statement and
- -------- -------
the Bank's books and records, the latter shall be controlling in the absence of
manifest error.
Section 4.05. [omitted]
Section 4.06. Net Payments. All payments under this Agreement shall
------------
be made without set-off or counterclaim and in such amounts as may be necessary
in order that all such payments (after deduction or withholding for or on
account of any present or future taxes, levies, imposts, duties or other charges
of whatsoever nature imposed by any government, any political subdivision or any
taxing authority, other than any tax on or measured by the overall net income of
the Bank pursuant to the income tax laws of the United States or the
jurisdiction where the Bank's principal office is located (collectively, the
"Taxes") shall not be less than the amounts otherwise specified to be paid under
- ------
this Agreement. A certificate as to any additional amounts payable to the Bank
under this Section 4.06 submitted to the Company by the Bank shall show in
------------
reasonable detail the amount payable and the calculations used to determine in
good faith such amount and shall be presumptively correct absent manifest error.
Any amounts payable by the Company under this Section 4.06 with respect to past
------------
payments shall be due within twenty (20) days following receipt by the Company
of such certificate from the Bank; any such amounts payable with respect to
future payments shall be due concurrently with such future payments. With
respect to each deduction or withholding for or on account of any taxes, the
Company shall promptly furnish to the Bank such certificates, receipts and other
documents as may be required (in the reasonable judgment of the Bank) to
establish any tax credit to which the Bank may be entitled. Without in any way
affecting any of its rights under this Section 4.06, the Bank agrees that, upon
------------
its becoming aware that any of the present or future payments due it under this
Agreement would be subject to deduction for Taxes, it will notify the Company in
writing and the Bank further agrees that it will use reasonable efforts not
disadvantageous to it (in its sole determination) in order to avoid or minimize,
as
-17-
<PAGE>
the case may be, the payment by the Company of any additional amounts for Taxes
pursuant to this Section 4.06.
------------
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
In order to induce the Bank to enter into this Agreement, to issue the
Letter of Credit, and to make Demand Loans hereunder, the Company hereby
covenants, represents and warrants to the Bank that:
Section 5.01. Representations and Warranties Restated. All of the
---------------------------------------
representations and warranties set forth in Section 5 of the Credit Agreement
---------
are hereby deemed to be restated by Borrower and set forth herein by reference
in their entirety, as if such representations and warranties were actually
stated herein. Any amendment of any such representation or warranty contained
in Section 5 of the Credit Agreement, and any addition of any representation or
---------
warranty to the Credit Agreement, whenever made, shall be deemed to be instantly
effective under this Section 5.01 without any further action or acknowledgment
------------
of the parties hereto and shall thereupon be a representation and warranty under
this Article V of this Agreement. In the event the Credit Agreement is
---------
terminated or is no longer in effect for any reason whatsoever, then the
representations and warranties incorporated herein shall continue in effect
under this Article V as if fully set forth herein in the form of the
---------
representations and warranties as they existed in the moment prior to the
termination of the Credit Agreement. All references made in Section 5 of the
---------
Credit Agreement to "Loan Documents" and to "Security Instruments" and to
"Mortgage" are hereby deemed, for purposes of this Article V of this Agreement,
---------
to be references to this Agreement and the Related Documents; all references
contained in Section 5 of the Credit Agreement to "Real Estate" and to "New
---------
Bedford Real Estate" are hereby deemed, for purposes of this Article V of this
---------
Agreement, to be references to the Real Estate; all references made in Section 5
---------
of the Credit Agreement to "Borrower" are hereby deemed, for purposes of this
Article V of this Agreement, to be references to the Company; and all references
- ---------
made in Section 5 of the Credit Agreement to "Lender" are hereby deemed, for
---------
purposes of this Article V of this Agreement, to be references to the Bank. All
---------
other capitalized terms used in Section 5 of the Credit Agreement that are not
---------
expressly defined in this Agreement shall have the meanings ascribed to them in
the Credit Agreement, and such meanings are herein incorporated by reference.
Section 5.02. Power; Authorization; Enforceable Obligations. The
---------------------------------------------
Company has the power, authority and legal right to make, deliver and perform
this Agreement and to borrow hereunder and has taken all necessary action to
authorize the borrowings on the terms and conditions of this Agreement and to
authorize the execution, delivery and performance of this Agreement and the
other loan documents to which it is a party. No consent of any Person
(including, without limitation, stockholders or creditors of the Company) and no
consent, license, permit, approval or authorization of, exemption by, notice or
report to, or registration, filing or declaration with, any governmental
authority is required in connection
-18-
<PAGE>
with the borrowings hereunder or with the execution, delivery, performance,
validity or enforceability of this Agreement. This Agreement has been executed
and delivered by a duly authorized officer of the Company and this Agreement
constitutes the legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its respective terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors rights generally.
Section 5.03. Offering of Bonds. Neither the Company nor any agent
-----------------
acting on the Company's behalf has taken or will take any action which would
subject the issuance or sale of the Bonds to the qualification or registration
provisions of Section 5 of the Securities Act of 1933, as amended, or which
would cause the offer or sale of the Bonds not to be made in compliance with the
provisions of any securities or Blue Sky law of any applicable jurisdiction.
ARTICLE VI. AFFIRMATIVE COVENANTS
---------------------
So long as the Expiration Date has not occurred or so long as any
amount is due or owing to the Bank hereunder, the Company will, unless the Bank
shall otherwise consent in writing, comply with the following:
Section 6.01. Tax Exemption. (a) Permit the use of Bond proceeds in
-------------
such manner, or take only those actions, consistent with the maintenance of tax
exemption for interest on the Bonds under the Code and (b) file or cause to be
filed with each appropriate governmental agency any and all statements or other
instruments, if any, required under Sections 103 or 141 through 150 (inclusive)
of the Code, including the regulations thereunder, to be filed with such agency
in order that the interest on the Bonds continues to be generally excludible
from the gross income of the registered owners thereof for Federal income tax
purposes.
Section 6.02. Additional Covenants. The Company shall comply in all
--------------------
respects with all covenants set forth in the Credit Agreement, including without
limitation in Section 7 of the Credit Agreement, whether such covenants now
---------
exist or are hereafter added thereto, as such covenants may be amended from time
to time; and all such covenants, whenever in existence and however amended, are
hereby incorporated herein by reference in their entirety. Any amendment of any
such covenant contained in the Credit Agreement, and any addition of any
covenant to the Credit Agreement, whenever occurring, shall be deemed to be
instantly effective under this Section without any further action or
acknowledgment of the parties hereto and shall thereupon be a covenant under
this Section 6 of this Agreement. In the event the Credit Agreement is
---------
terminated or is no longer in effect for any reason whatsoever, then the
covenants incorporated herein shall continue in effect under this Section 6 as
---------
if fully set forth herein in the form of the covenant as it existed in the
moment prior to the termination of the Credit Agreement. All references made in
Section 7 of the Credit Agreement to "Loan Documents" and to "Security
- ---------
Instruments" and to "Mortgage" are hereby deemed, for
-19-
<PAGE>
purposes of this Article VI of this Agreement, to be references to this
----------
Agreement and the Related Documents; all references contained in Section 7 of
---------
the Credit Agreement to "Real Estate" and to "New Bedford Real Estate" are
hereby deemed, for purposes of this Article VI of this Agreement, to be
----------
references to the Real Estate; all references made in Section 7 of the Credit
---------
Agreement to "Borrower" are hereby deemed, for purposes of this Article VI of
----------
this Agreement, to be references to the Company; and all references made in
Section 7 of the Credit Agreement to "Lender" are hereby deemed, for purposes of
- ---------
this Article VI of this Agreement, to be references to the Bank. All other
----------
capitalized terms used in Section 7 of the Credit Agreement that are not
---------
expressly defined in this Agreement shall have the meanings ascribed to them in
the Credit Agreement, and such meanings are herein incorporated by reference.
Section 6.03. Compliance with Indenture. The Company shall comply in
-------------------------
all respects with all of its obligations and agreements under the Indenture,
including without limitation its obligations under Section 405 thereof.
ARTICLE VII. NEGATIVE COVENANTS
------------------
The Company hereby covenants and agrees that, so long as the Bonds
remain in effect or any of the Bonds or the Demand Loans referred to herein
remain outstanding and unpaid, the Company will not, nor will it permit any of
its Subsidiaries to, unless otherwise consented to in writing by the Bank:
Section 7.01. Amendment of Documents; Appointment of Substitute or
----------------------------------------------------
Successor Trustee. Enter into or consent to any material waiver or material
- -----------------
amendment of any provision of the Bonds or any of the Related Documents without
the Bank's prior written consent. The Company will immediately notify the Bank
of any waiver or amendment of the Bonds or any of the Related Documents, and of
the identity of any Person appointed as a successor or substitute Trustee.
After the date hereof, the Company will not grant a mortgage or permit a Lien to
exist on the Premises, with the exception of Liens permitted under Section 7.02
------------
below, without obtaining the prior written consent of the Bank.
Section 7.02. Other Covenants. The Company shall comply in all
---------------
respects with all covenants set forth in the Credit Agreement, including without
limitation in Section 8 of the Credit Agreement, whether such covenants now
---------
exist or are hereafter added thereto, as such covenants may be amended from time
to time; and all such covenants, whenever in existence and however amended, are
hereby incorporated herein by reference in their entirety. Any amendment of any
such covenant contained in the Credit Agreement, and any addition of any
covenant to the Credit Agreement, whenever occurring, shall be deemed to be
instantly effective under this Section without any further action or
acknowledgment of the parties hereto and shall thereupon be a covenant under
this Section 7 of this Agreement. In the event the Credit Agreement is
---------
terminated or is no longer in effect for any reason whatsoever, then the
covenants incorporated herein shall continue in effect under this Section 7 as
---------
if fully set forth
-20-
<PAGE>
herein in the form of the covenant as it existed in the moment prior to the
termination of the Credit Agreement. All references made in Section 8 of the
---------
Credit Agreement to "Loan Documents" and to "Security Instruments" and to
"Mortgage" are hereby deemed, for purposes of this Article VII of this
-----------
Agreement, to be references to this Agreement and the Related Documents; all
references contained in Section 8 of the Credit Agreement to "Real Estate" and
---------
to "New Bedford Real Estate" are hereby deemed, for purposes of this Article VII
-----------
of this Agreement, to be references to the Real Estate; all references made in
Section 8 of the Credit Agreement to "Borrower" are hereby deemed, for purposes
- ---------
of this Article VII of this Agreement, to be references to the Company; and all
-----------
references made in Section 8 of the Credit Agreement to "Lender" are hereby
---------
deemed, for purposes of this Article VII of this Agreement, to be references to
-----------
the Bank. All other capitalized terms used in Section 8 of the Credit Agreement
---------
that are not expressly defined in this Agreement shall have the meanings
ascribed to them in the Credit Agreement, and such meanings are herein
incorporated by reference.
ARTICLE VIII. DEFAULT AND REMEDIES
--------------------
Section 8.01. Event of Default. The occurrence of any one or more of
---------------
the following events shall constitute an Event or Events of Default hereunder:
(a) Failure by the Company to pay the principal of or interest on or
any installment of the principal or interest when due of any Demand Loans; or
(b) Failure by the Company to pay any fee or expense required hereunder
within fifteen (15) days after the same first becomes due; or
(c) The occurrence of a default or Event of Default under any other
credit facility or promissory note or agreement between the Company and the
Bank, including without limitation under the Credit Agreement; or
(d) If any representation or warranty or statement made or deemed made
by the Company in this Agreement or which is contained in any certificate,
document, financial or other statement furnished at any time under or in
connection with this Agreement shall prove to have been incorrect or misleading
in any material respect; or
(e) Default by the Company in the observance or performance of any of
the covenants or agreements contained in Article VI or Article VII of this
---------- -----------
Agreement; or
(f) Default by the Company in the observance or performance of any of
the covenants or agreements contained in any other Article or Section of this
Agreement (except monetary defaults, which shall be governed by (a) or (b)
above, and except defaults arising under Article VI and Article VII of this
---------- -----------
Agreement, which shall be governed by (e) above),
-21-
<PAGE>
provided that the Company shall have a period of fifteen (15) days from such
default within which to cure such default, before an Event of Default shall be
deemed to have occurred; or
(g) Failure of the Company to pay or perform, on the date when due,
any material obligation of the Company (including without limitation any
material obligation to parties other than the Bank) affecting any security for
this Agreement, regardless of how such obligation is evidenced; or
(h) Filing by the Company of a voluntary petition in bankruptcy or a
voluntary petition or an answer seeking reorganization, arrangement,
readjustment of its debts or for any other relief under the United States
Bankruptcy Code, as amended, or under any other insolvency act or law, state or
federal, now or hereafter existing, or any action by the Company indicating its
consent to, approval of, or acquiescence in, any such petition or proceeding;
the application by the Company, or the appointment by consent or acquiescence
of, a receiver or trustee for it or for all or a substantial part of its
property; the making by the Company of an assignment for the benefit of
creditors; the inability of the Company to pay its debts as and when they become
due or the admission by the Company in writing of such inability; the Company
dissolves or terminates its existence; any levy is made upon the property or
assets of the Company which are collateral for this Agreement; or
(i) Filing of an involuntary petition against the Company in
bankruptcy or seeking reorganization, arrangement, readjustment of its debts or
for any other relief under the United States Bankruptcy Code, as amended, or
under any other insolvency act or law, state or federal, now or hereafter
existing; or the involuntary appointment of a receiver or trustee for the
Company, or for all or a substantial part of its property; or the involuntary
dissolution or liquidation of the Company; and the continuance of any of such
events for sixty (60) days undismissed, unbonded or undischarged; or
(j) The Company is permanently enjoined, restrained or in any manner
prevented by court order from conducting all or any material part of its
business affairs; or
(k) Merger or consolidation with another corporation by the Company in
violation of any covenant set forth in this Agreement or in the Credit
Agreement; or
(l) Dissolution, termination of existence, business failure or
cessation of business operations of the Company; or
(m) The Company shall become an "investment company" within the
meaning of the Investment Company Act of 1940, as the same may be amended from
time to time; or
(n) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan,
(ii) any "accumulated funding deficiency" (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Plan, (iii) a Reportable
Event shall occur with respect to, or proceedings
-22-
<PAGE>
shall commence to have a trustee appointed, or a trustee shall be appointed, to
administer to or terminate, any Plan, which Reportable Event or institution of
proceedings is, in the opinion of the Bank, likely to result in the termination
of such Plan for purposes of Title IV or continuance of such Reportable Event
unremedied for ten (10) days after notice of such Reportable Event pursuant to
Section 4043(a), (c) or (d) of ERISA is given or the continuance of such
proceedings for ten (10) days after commencement thereof, as the case may be,
(iv) any Plan shall terminate for purposes of Title IV of ERISA, or (v) any
other event or condition shall occur or exist with respect to any Plan or having
consequences under ERISA; and in each case in clauses (i) through (v) above,
---
such event or condition could. subject the Company or any of its Subsidiaries to
any tax, penalty or other liability material in relation to the business,
operations, property or financial or other condition of the Company and its
Subsidiaries taken as a whole; or
(o) An Event of Default under any of the Related Documents; or
(p) The occurrence of any cessation of normal business operation of the
Company, or substantial curtailment thereof, whether voluntary or involuntary,
or the issuance or entry of any order, injunction, judgment or decree by any
governmental agency or court requiring a cessation of such normal business
operations or substantial curtailment thereof; or
Upon any such Event of Default, the Bank may, at its election, (1) declare the
obligations of the Company hereunder, including without limitation those
obligations under any Demand Loans, to be forthwith due and payable in full and
the same shall thereupon become immediately due and payable without demand,
presentment, protest or further notice of any kind, all of which are hereby
expressly waived and/or (2) demand the immediate deposit of cash collateral in
an amount equal to the full amount then available or which may subsequently
become available under the Letter of Credit, and the same shall thereupon become
due and payable (provided, however, that those moneys will only be used to
reimburse the Bank after the Bank has honored a draw under the Letter of Credit
and will not be used to make payments directly to the Trustee and provided
further that the Company acknowledges that such moneys would be subject to any
rebate requirement as provided in the Tax Regulatory Agreement if applicable to
the Bonds), and/or (3) proceed to enforce all other remedies available to it
under applicable law and/or (4) exercise all rights and remedies provided to the
Bank under the Related Documents. Upon any such Event of Default, the Bank
shall be entitled to notify the Trustee with the effect contemplated by the
Indenture.
ARTICLE IX. MISCELLANEOUS
-------------
Section 9.01. Amendments and Waivers. This Agreement may not be
----------------------
amended, modified, discharged or waived except by an instrument in writing
executed by the parties hereto. No course of dealings between the Company and
the Bank and no delays on the part of the Bank in exercising any rights with
respect to any Event of Default shall operate as a waiver of any rights of the
Bank.
-23-
<PAGE>
Section 9.02. Notices. (a) Any notices, requests or demands under
-------
this Agreement shall be in writing and delivered personally or mailed by
registered or certified mail, postage prepaid and return receipt requested, or
sent by facsimile transmission (including telecopier), to the party entitled to
such notice, request or demand at the address set forth below opposite its name,
or at such other address as either party may notify the other in writing.
(b) Until notified otherwise, all notices, requests or demands shall
be sent to the following:
If to the Company: AFC Cable Systems, Inc.
50 Kennedy Plaza
Providence, RI 02903
Attn: Mr. Ralph Papitto, Chairman
(FAX No. (401) 453-2009)
with a copy to: Jonathan Bell, Esq.
Hinckley, Allen & Snyder
1500 Fleet Center
Providence, Rhode Island 02903
(FAX No. (401) 277-9600)
If to the Bank: Fleet National Bank
111 Westminster Street
RI/MO/0235
Providence, Rhode Island 02903
Attention: Douglas E. Scala,
Vice President
(FAX No. (401) 278-5726)
with a copy to: David M. Gilden, Esq.
Partridge, Snow & Hahn
180 South Main Street
Providence, Rhode Island 02903
(FAX No. (401) 861-8210).
(c) All notices, requests and demands sent (x) by registered or
certified mail shall be deemed to have been given and received within five (5)
days of the date so mailed or (y) by facsimile transmission shall be deemed to
have been given and received upon receipt by the sender of electronic
confirmation of the transmission thereof, or (z) if delivered personally shall
be deemed received when delivered.
Section 9.03. Setoff; Adjustments. Upon the occurrence of any Event
-------------------
of Default hereunder, the Bank is hereby irrevocably authorized at any time and
from time to time
-24-
<PAGE>
without notice to the Company, any such notice being expressly waived by the
Company, to set off and appropriate and apply any and all deposits (general or
special, time or demand, provisional or final), in any currency, any other
credits, indebtedness or claims, in any currency, in each case whether direct or
indirect or contingent or matured or unmatured, at any time held or owing by the
Bank to or for the credit or the account of the Company, or any part thereof in
such amounts as the Bank may elect, against and on account of the obligations
and liabilities of the Company to the Bank hereunder or under the Bonds and
claims of every nature and description against the Company, whether arising
hereunder, or otherwise, as the Bank may elect, whether or not the Bank has made
any demand for payment and although such obligations, liabilities and claims may
be contingent or unmatured. The Bank agrees to notify the Company promptly of
any such set-off and the application made by the Bank, provided that the failure
to give such notice shall not affect the validity of such set off and
application. The rights of the Bank under this subsection are in addition to
other rights and remedies (including, without limitation, other rights of set-
off) which the Bank may have.
Section 9.04. No Waiver; Cumulative Remedies. No failure to exercise
-----------------------------
and no delay in exercising, on the part of the Bank, any right, power or
privilege hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. No waiver by the Bank of any Event of Default shall operate as a
waiver of any other Event of Default or of the same Event of Default on a future
occasion. The rights and remedies hereunder provided are cumulative and not
exclusive of any rights or remedies provided by law.
Section 9.05. Survival of Representations and Warranties. All
------------------------------------------
representations and warranties made hereunder and in any document, certificate
or statement delivered pursuant hereto shall survive the execution and delivery
of this Agreement and the Bonds until all of the Bonds and all other amounts
owing hereunder shall have been paid in full.
Section 9.06. Payment of Expenses and Taxes. The Company agrees (a)
-----------------------------
to pay or reimburse the Bank for all its reasonable out-of-pocket costs and
expenses incurred in connection with the development, negotiation, preparation,
execution, consummation of this Agreement, and the Bonds and any other documents
prepared in connection herewith, including reasonable fees of counsel to the
Bank, which Bank has estimated to not exceed Ten Thousand Dollars ($10,000),
plus expenses in connection therewith, (b) to pay or reimburse the Bank for all
its reasonable costs and expenses incurred in connection with the amendment or
modification of this Agreement or the Bonds, or the enforcement of, or the
preservation of, any rights under this Agreement and the Bonds, (c) to pay,
indemnify, and to hold the Bank harmless from any and all recording and filing
fees and any and all liabilities with respect to, or resulting from any delay in
paying, stamp and other taxes, if any which may be payable or determined to be
payable in connection with the execution and delivery of, or consummation of any
of the transactions contemplated by, or any amendment or modification of or any
waiver or consent under or in respect of, this Agreement or the Bonds, and (d)
to pay, indemnify and hold the Bank harmless from and against any and all other
liabilities,
-25-
<PAGE>
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement. The agreements in this Section 9.06 shall survive the payment of the
------------
Bonds and the termination of this Agreement.
Section 9.07. Pledge. (a) To induce the Bank to enter into this
------
Agreement and to issue the Letter of Credit, the Company hereby pledges, conveys
and assigns to the Bank, and hereby grants to the Bank a continuing first lien
and security interest in, any unremarketed bonds (as the same may be from time
to time delivered to the Trustee or the Paying Agent as collateral agent for the
Bank pursuant to the Indenture), any proceeds of such Bonds, all of the
Company's rights to receive unremarketed bonds and all of the Company's right,
title and or interest in and to unremarketed bonds, in each case as security for
the Company's obligations hereunder.
(b) The Company hereby consents to each of the Trustee or the
remarketing agent acting as the agent and bailee of the Bank for the purpose of
perfecting the lien of the pledge hereunder, and of holding the collateral for
the benefit of the Bank pursuant to the Indenture.
(c) If (i) the Company makes or causes to be made to the Bank a
prepayment in respect of any Demand Loans outstanding under Article IV of this
----------
Agreement or (ii) the remarketing agent causes Bank Bonds at the time held
hereunder to be purchased, the Bank agrees, upon receipt of such prepayment of
such remarketing proceeds, to release from the lien of the pledge hereunder and
deliver to the Company or the remarketing agent, as the case may be, Bank Bonds,
the principal amount of which is equal to the prepayment or reimbursement so
made or to the principal amount so purchased.
(d) Notwithstanding any provisions contained in the Bonds or any of the
other Related Documents, regardless of the interest rate payable on any Bank
Bond, the Bank shall be entitled to collect interest from the Company on any of
the Demand Loans at the rates as described and provided for herein.
Section 9.08. Severability. Any provision of this Agreement which is
------------
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or nonauthorization without invalidating the remaining
provisions of this Agreement or affecting the validity, enforceability or
authorization of such provision in any other jurisdiction.
Section 9.09. [omitted]
Section 9.10. Obligations Absolute. The obligations of the Company
--------------------
under this Agreement shall be absolute, unconditional and irrevocable and shall
be performed strictly in accordance with the terms of this Agreement under all
circumstances whatsoever, including the following circumstances:
-26-
<PAGE>
(a) any lack of validity or enforceability of the Letter of Credit,
this Agreement, or any Related Document;
(b) any amendment or waiver of or any consent to departure from this
Agreement, or any Related Document;
(c) the existence of any claim, set-off, defense or other rights which
the Company may have at any time against the Trustee (or any Person for whom the
Trustee may be acting), the Bank (other than the defense of payment to the Bank
in accordance with the terms of this Agreement) or any other Person, whether in
connection with this Agreement, any Related Document or any unrelated
transactions, provided that nothing in this Section 9.10(c) shall prevent the
---------------
Company from asserting any rights it may have by separate suit;
(d) any statement in any certificate or any other document presented
under the Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any such statement being untrue or inaccurate in
any respect whatsoever;
(e) payment by the Bank under the Letter of Credit against presentation
of a draft or certificate which does not comply with the terms of the Letter of
Credit, provided that such payment shall not have constituted gross negligence
or willful misconduct of the Bank; or
(f) any other circumstance or happening whatsoever whether or not
similar to any of the foregoing.
Section 9.11. Termination of Agreement. The obligations of the Company
------------------------
under this Agreement shall continue until the later of (a) the Expiration Date
or (b) the date upon which all amounts due and owing to the Bank under this
Agreement shall have been paid in full, and shall (i) be binding upon the
Company and its successors and assigns, and (ii) inure to the benefit of and be
enforceable by the Bank and its successors, transferees and assigns; provided,
--------
however, that (x) the Company may not assign all or any part of this Agreement
- -------
without the prior written consent of the Bank and (y) the obligations of the
Company pursuant to Sections 6.12, 9.06 and 9.12 hereof shall survive the
------------- ---- ----
termination of this Agreement.
Section 9.12. Indemnity, Costs, Expenses. 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
(i) the execution and delivery of this Agreement and/or (ii) payment or failure
to pay under the Letter of Credit and/or (iii) any matter or cause whatsoever
pertaining to the Credit Agreement and/or (iv) any Private Placement Memorandum
or any other documents which may be delivered in connection with this Agreement,
or the Letter of Credit, including, without limitation, the Related Documents,
the fees and expenses of counsel for the Bank with respect thereto and with
respect to advising the Bank on or prior to the date hereof as to its rights and
responsibilities under this Agreement, the Letter of Credit, and all fees and
expenses, if any, in connection with the
-27-
<PAGE>
enforcement or defense of the rights of the Bank in connection with this
Agreement or the Related Documents, or the collection of any moneys due
hereunder, or under the Letter of Credit, the Bonds, the Related Documents, and
such other documents which may be delivered in connection with this Agreement,
and the Letter of Credit. The obligations of the Company under this Section
shall survive payment of any amounts due under this Agreement, the Bonds and the
expiration of the Letter of Credit.
Section 9.13. Liability of the Bank. As between the Company and the
---------------------
Bank, the Company assumes all risks of the acts or omissions 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 employees, 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 (including without
limitation acts or omissions of the Bank when it is acting in its capacity as
Trustee), and any transferee in connection therewith; (b) payment by the Bank
against presentation of documents which do not comply in any immaterial respect
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 (c) any
other circumstances whatsoever in making or failing to make payment under the
Letter of Credit, except only that the Company shall have a claim against the
Bank, and the Bank shall be liable to the Company, to the extent, but only to
the extent, of any direct, as opposed to consequential, damages suffered by the
Company which were caused by (i) the Bank's willful misconduct or gross
negligence in determining whether documents presented under the Letter of Credit
comply with the terms of the Letter of Credit (it being understood that any such
noncompliance in any immaterial respect shall not be deemed willful misconduct
or gross negligence of the Bank) or (ii) the Bank's willful failure to pay under
the Letter of Credit after presentation to it by the Trustee (or any successor
Trustee to whom the Letter of Credit has been transferred in accordance with its
terms), of a sight draft and certificate strictly complying with the terms and
conditions of the Letter of Credit. In furtherance and not in limitation of the
foregoing, the Bank may accept documents that appear on their face to be in
order, without responsibility for further investigation, in the absence of any
actual notice or information to the contrary.
Section 9.14. Bank's Right to Sell Loan or Participations. The Bank
-------------------------------------------
reserves the right to sell, assign, transfer, or otherwise dispose of the
Commitments to make the Demand Loans, or the Demand Loans, or any part thereof
made hereunder, and further reserves the right to grant participation in and to
the Letter of Credit, and the Commitments to make the Demand Loans made
hereunder, provided that the Bank, so long as no Event of Default has occurred,
shall at all times retain ownership of fifty-one percent (51%) or more of the
facility pursuant to which the Letter of Credit was issued, and shall retain
primary responsibility for servicing of the Letter of Credit and the Demand
Loans, and decision making with respect to the Letter of Credit and the Demand
Loans (with the exception of amendments, consents and waivers relating to a
decrease in the interest rates applicable to any of the Demand Loans, extension
of maturity dates applicable to the Demand Loans, a release of any collateral
for the Demand Loans and this Agreement, the exercise of its rights and remedies
under or in accordance with this Agreement and the Related Documents, and any
-28-
<PAGE>
other decision reasonably and customarily required to be consented to by a
participating or purchasing institution). In the event that Lender sells,
assigns, transfers or otherwise disposes of all or part of the Letter of Credit
or the Demand Loans, each and every immediate and successive purchaser,
assignee, transferee or holder of all or any part of the Letter of Credit or the
Demand Loans and/or the collateral shall have the right to enforce this
Agreement, by legal action or otherwise, for its own benefit as fully as if such
purchaser, assignee, transferee or holder were herein by name specifically given
such right. The Bank shall have an unimpaired right to enforce this Agreement
for its benefit with respect to that portion of the Letter of Credit and the
Demand Loans as Lender has not sold, assigned, transferred or otherwise disposed
of. The Bank may provide to any Person interested in purchasing such interest,
any financial statements or information it shall have in its possession or
within its knowledge.
Section 9.15. Related Documents. If there is any conflict between the
-----------------
terms, covenants and conditions of this Agreement and the Related Documents, the
terms, covenants and conditions of this Agreement shall control.
Section 9.16. Counterpart. This Agreement may be executed by one or
-----------
more of the parties to this Agreement on any number of separate counterparts and
all of said counterparts taken together shall be deemed to constitute one and
the same instrument. Copies of this Agreement signed by all the parties shall
be lodged with the Company and the Bank.
Section 9.17. Captions. Captions in this Agreement are included
--------
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.
Section 9.18. Governing Law. This Agreement and the rights and
-------------
obligations of the parties under this Agreement shall be governed by, and
construed and interpreted in accordance with, the law of the State of Rhode
Island.
Section 9.19. Intention Not to Violate Usury Laws. Notwithstanding
-----------------------------------
anything in this Agreement, or any of the Related Documents to the contrary, the
Company shall not be required to pay interest on indebtedness to the Bank in
excess of the maximum interest permissible under applicable law. If under any
circumstances whatsoever the Bank should receive as interest under this
Agreement or any Related Document an amount which would exceed the maximum
permissible interest under applicable law, such excess amount shall be applied
to reduce the principal balance of the indebtedness of the Company to the Bank
and not to payment of interest.
Section 9.20. Jury Waiver. Each party to this Agreement hereby
-----------
expressly WAIVES ANY RIGHT TO TRIAL BY JURY of any claim, demand, action or
cause of action (a) arising under this Agreement or any other instrument,
document or agreement executed or delivered in connection herewith, or (b) in
any way connected with or incidental to the dealings of the parties hereto or
any of them with respect to this Agreement or any other
-29-
<PAGE>
instrument, document or agreement executed or delivered in connection herewith,
or the transactions related hereto or thereto, in each case whether now existing
or hereafter arising and whether sounding in contract or tort or otherwise; AND
EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT ANY
PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO
TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
IN WITNESS WHEREOF, the parties have by their duly authorized
representatives executed this Agreement as of the day and year first above
written.
AFC CABLE SYSTEMS, INC.
[SIGNATURE APPEARS HERE] By: [SIGNATURE APPEARS HERE]
- -------------------------- --------------------------------
FLEET NATIONAL BANK
[SIGNATURE APPEARS HERE] By: /S/ Douglas E. Scala
- -------------------------- --------------------------------
Douglas E. Scala, Vice President
[SIGNATURE APPEARS HERE] By: [SIGNATURE APPEARS HERE]
- --------------------------- --------------------------------
-30-
<PAGE>
[LETTERHEAD OF FLEET BANK APPEARS HERE]
IRREVOCABLE DIRECT PAY LETTER
OF CREDIT NO. RS1046067
ISSUING BANK: JULY 24, 1996
FLEET NATIONAL BANK
(A Member of Fleet Financial Group)
529 Main Street
Charlestown, MA 02129
APPLICANT:
AFC CABLE SYSTEMS, INC.
50 Kennedy Plaza
Providence, RI 02903
BENEFICIARY:
FLEET NATIONAL BANK, as Trustee
111 Westminster Street
Providence, RI 02903
AMOUNT/CURRENCY:
Up to U.S. $3,624,000
Up to Three Million Six Hundred Twenty-
Four Thousand and no/100 U.S. Dollars
DATE AND PLACE OF EXPIRY:
July 6, 2001 at the Issuing Bank
Ladies and Gentlemen:
At the request and on the instructions of our customer, AFC CABLE
SYSTEMS, INC., a Delaware corporation (the "Company"), FLEET NATIONAL BANK (the
"Bank") hereby establishes this Irrevocable Direct Pay Letter of Credit in your
favor as Trustee for the benefit of the holders of the Bonds (as defined below)
under the Loan and Trust Agreement dated as of July 1, 1996 (the "Indenture")
between you and the Massachusetts Industrial Finance Agency (the "Agency"), a
body politic and corporate and a public instrumentality of The Commonwealth of
Massachusetts, pursuant to which Three Million Five Hundred Seventy Thousand
Dollars ($3,570,000.00) in aggregate principal amount of Industrial Revenue
Bonds (AFC Cable Systems, Inc. Issue - Series 1996) are being issued by the
Agency. All capitalized terms not defined herein have the meanings set forth in
the Indenture.
<PAGE>
[LETTERHEAD OF FLEET BANK APPEARS HERE]
Irrevocable Direct Pay Letter of Credit
No. RS1046067
July 24, 1996
Page 2 of 20
Subject to all of the terms and conditions contained herein, the Bank
irrevocably authorizes you to draw, available by your draft at sight, in the
form of Annex 1 hereto, drawn upon the terms and conditions hereunder set forth
-------
on the Bank under this Letter of Credit up to an aggregate amount not to exceed
the Stated Amount (as such term is hereinafter defined and described) as
adjusted and reinstated from time to time in accordance with the provisions
hereof. However, in no event will the Bank's commitment under this Letter of
Credit (a) exceed Three Million Five Hundred Seventy Thousand Dollars
($3,570,000.00) with respect to draws made for the payment of the unpaid
principal amount of the Bonds or the portion of the Purchase Price (as such term
is hereinafter defined) corresponding to the principal of the Bonds, and (b)
with respect to draws made for payment of interest on the Bonds or the portion
of the Purchase Price corresponding to interest on the Bonds, exceed the lesser
of (i) forty-six (46) days interest (computed on the basis of a 365-day year) at
a maximum rate of twelve percent (12%) per annum, or (ii) the sum of Fifty-Four
Thousand Dollars ($54,000.00).
As used herein:
(a) "A-Drawing" means a draw made by you under this Letter of Credit
with respect to the portion of the Purchase Price (as such term is defined
below) which corresponds to the principal amount of the Bonds delivered or
deemed delivered to the Trustee pursuant to Sections 301(d)(iii) or
301(d)(iv) of the Indenture.
(b) "B-Drawing" means a draw made by you under this Letter of Credit
with respect to a payment of principal on the Bonds.
(c) "C-Drawing" means a draw made by you under this Letter of Credit
with respect to (i) the payment of interest on the Bonds, or (ii) the
payment of that portion of the Purchase Price which corresponds to the
interest amount due on Bonds delivered or deemed delivered to the Trustee
pursuant to Sections 301(d)(iii) or 301(d)(iv) of the Indenture.
(d) "Authorized Officer" means any of your officers or representatives
holding the title of Vice President, Assistant Vice President, Corporate
Trust Officer or Trust Officer.
(e) "Borrower Bonds" means any Bonds registered to the Company
pursuant to Subsection 312(a) of the Indenture.
(f) "Business Day" means a day (a) that is not a Sunday or legal
holiday, (b) that is a day on which banks are not required or authorized to
close in New York, New
<PAGE>
[LETTERHEAD OF FLEET BANK APPEARS HERE]
Irrevocable Direct Pay Letter of Credit
No. RS1046067
July 24, 1996
Page 3 of 20
York, (c) that is a day on which banking institutions in all of the cities in
which the principal offices of the Trustee and, if applicable, the Remarketing
Agent and the Bank are located are not required or authorized to remain closed,
and (d) that is a day on which the New York Stock Exchange is not closed.
(g) "Interest Component" means a portion of the Stated Amount
available under this Letter of Credit equal to the interest on the Bonds or the
portion of the Purchase Price corresponding to interest on the Bonds, reduced
from time to time in accordance with the terms of the Letter of Credit, but in
no event will the Interest Component exceed forty-six (46) days interest at a
maximum rate of twelve percent (12%) per annum.
(h) "Pledge Agreement" means the Pledge and Security Agreement dated
as of July 1, 1996 made by the Company to the Bank, and any amendments and
supplements thereto.
(i) "Pledged Bonds" means any Bonds which shall, at the time of
determination thereof, be held in pledge by the Bank or its designee pursuant to
the Pledge Agreement.
(j) "Principal Component" means a portion of the Stated Amount
available under this Letter of Credit equal to the unpaid principal balance of
the Bonds, or the portion of the Purchase Price corresponding to the principal
of the Bonds, reduced from time to time in accordance with the provisions of
this Letter of Credit, but in no event will the Principal Component exceed
$3,570,000.00.
(k) "Purchase Price" means an amount equal to 100% of the principal
amount of, plus unpaid interest on, any Bond purchased or deemed purchased in
accordance with Sections 301(d)(iii) or 301(d)(iv) of the Indenture.
(l) "Reimbursement Agreement" means the Reimbursement Agreement dated
as of July 1, 1996 between the Company and the Bank, and any amendments and
supplements thereto.
(m) "Stated Amount" means the amount available for draws under this
Letter of Credit which will vary from time to time in accordance with the
provisions of this Letter of Credit, but in no event will the Stated Amount
exceed $3,624,000.00.
(n) "UCP" means the Uniform Customs and Practices for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No. 500.
<PAGE>
[LETTERHEAD OF FLEET BANK APPEARS HERE]
Irrevocable Direct Pay Letter of Credit
No. RS1046067
July 24, 1996
Page 4 of 20
Subject to the other terms and conditions hereof, funds under the
Bank's commitment under this Letter of Credit are available to you upon receipt
by the Bank, by delivery in person, registered mail, certified mail, return
receipt requested, electronic teletransmission (including facsimile transmission
to (617) 241-1993 or (617) 241-1811 or tested telex to 210 721 Fleet National
Bank B 2 (with hard copy of any transmissions to follow by overnight courier) or
overnight courier at the offices of Fleet National Bank, c/o Fleet Services
Corporation, 529 Main Street, Charlestown, MA 02129, Attn: Trade Services
Operations MA ML SFTINT-S, Manager, Letter of Credit Section, of a request in
respect of a drawing under the Bank's commitment, appropriately completed in the
form of Annex 1 attached hereto, together with:
-------
(a) If the drawing is an A-Drawing, a written certificate in the form
of Certificate A attached hereto appropriately completed and signed by an
-------------
Authorized Officer; or
(b) If the drawing is a B-Drawing, a written certificate in the form
of Certificate B attached hereto appropriately completed and signed by an
-------------
Authorized Officer; or
(c) If the drawing is a C-Drawing, a written certificate in the form
of Certificate C attached hereto appropriately completed and signed by an
-------------
Authorized Officer.
The Bank hereby agrees with you that request for payment hereunder
presented in compliance with the terms of this Letter of Credit will be duly
honored by the Bank from funds of the Bank and not from funds received from the
Company, and that if such request is so presented to the Bank as contemplated
above by 11:00 a.m. Boston, Massachusetts time, payment will be made by 4:00
p.m. Boston, Massachusetts time of that same day if such request is presented on
a Business Day, or by 4:00 p.m. Boston, Massachusetts time of the immediately
following Business Day if such request is presented on any day other than a
Business Day. Payments by the Bank will be made to you in immediately available
funds by check or wire transfer as you may direct in your request. All payments
under this Letter of Credit will be made with our own funds.
If a request for payment made by you hereunder does not, in any way,
conform to the terms and conditions of this Letter of Credit, then the Bank
shall give prompt notice that the request was not effected in accordance with
the terms and conditions of this Letter of Credit, stating the reasons therefor
and that the Bank is holding any documents or returning the same to you as the
Bank may elect. Upon being notified that the purported negotiation was not
effected in accordance with the Letter of Credit, you may attempt to correct any
such nonconforming request for payment, if, and to the extent that, you are
entitled and able to do so.
<PAGE>
[LETTERHEAD OF FLEET BANK APPEARS HERE]
Irrevocable Direct Pay Letter of Credit
No. RS1046067
July 24, 1996
Page 5 of 20
Drawings hereunder for payment of principal, interest or Purchase
Price may only be made from the sums available for such purposes. Any requests
for payment hereunder honored by the Bank shall not, in the aggregate, exceed
the respective portions of the Stated Amount, as adjusted and reinstated in
accordance with the provision below.
Adjustment to Stated Amount.
- ---------------------------
(a) Subject only to reinstatement provided for in paragraph (b) below,
each drawing honored by the Bank hereunder shall pro tanto reduce the Stated
--- -----
Amount in the following manner: each A-Drawing and each B-Drawing honored by the
Bank hereunder will reduce the Principal Component of the Stated Amount and each
C-Drawing will reduce the Interest Component of the Stated Amount.
(b) With respect to any A-Drawing, the Principal Component shall be
reinstated upon receipt of, and to the extent specified in paragraph (E) of,
your certificate in the form of Annex 2 hereto, delivered to Fleet National
-------
Bank, c/o Fleet Services Corporation, 529 Main Street, Charlestown,
Massachusetts 02129, Attn: Trade Services Operations, MA ML SFTINT-S, Manager,
Letter of Credit Section. With respect to a C-Drawing certified by you to have
been made in respect of interest payable on an Interest Payment Date (as defined
in the Indenture) as a scheduled periodic payment of interest on the Bonds or as
a portion of the Purchase Price of Bonds being purchased pursuant to Sections
301(d)(iii) or 301(d)(iv) of the Indenture, if you shall not have received,
within ten (10) calendar days after any such payment in respect to a C-Drawing,
notice from the Bank to the effect that an Event of Default under the
Reimbursement Agreement has occurred and is continuing, and the Letter of Credit
will not be reinstated as of the date hereof, then the Interest Component shall
be reinstated automatically, as of the close of business on such 10th calendar
day, to the amount stated in paragraph (H)(i) of the Certificate C submitted in
-------------
connection with such C-Drawing.
Only you or your successor as Trustee may make a drawing under this
Letter of Credit. Upon the payment to you or your account of the amount
specified in a sight draft drawn hereunder, the Bank shall be fully discharged
of its obligation under this Letter of Credit with respect to such sight draft,
and the Bank shall not thereafter be obligated to make any further payments
under this Letter of Credit in respect of such sight draft to you or any other
person who may have made to you or who makes to you a demand for payment of
principal of or interest on any Bonds. By paying to you an amount demanded in
accordance herewith, the Bank makes no representation as to the correctness of
the amount demanded.
This Letter of Credit applies only to the payment of principal, the
portion of Purchase Price of the Bonds corresponding to principal, and up to 46
days' interest (computed as aforesaid) due
<PAGE>
[LETTERHEAD OF FLEET BANK APPEARS HERE]
Irrevocable Direct Pay Letter of Credit
No. RS1046067
July 24, 1996
Page 6 of 20
on the Bonds, on or prior to the termination or expiration of this Letter of
Credit, and does not apply to any principal which may be payable with respect
thereto after such date.
Notwithstanding any other provision herein, the Bank's commitment
under this Letter of Credit shall terminate in full at, and any draft to be
drawn hereinafter must be drawn and presented before, the close of business of
the Bank on July 6, 2001. This Letter of Credit shall automatically terminate
prior to the expiry dates specified above upon the earliest of (a) the close of
business of the Bank on the fifteenth Business Day following the date Notice of
Default in the form attached hereto as Annex 4 is received by you from the Bank
-------
notifying you of the occurrence of an Event of Default under the Reimbursement
Agreement; (b) the honoring by the Bank of the final drawing available to be
made hereunder; (c) receipt by the Bank of a certificate signed by an Authorized
Officer stating:
"(i) The conditions precedent for the acceptance of a substitute
Credit Facility have been satisfied, (ii) the Trustee has accepted the
substitute Credit Facility, and (iii) on the effective date of the
substitute Credit Facility, and after receipt by FLEET NATIONAL BANK
of this certificate, FLEET NATIONAL BANK Irrevocable Direct Pay Letter
of Credit No. RS1046067 shall terminate;"
or (d) receipt by the Bank of a certificate signed by an Authorized Officer
stating that no Bonds remain Outstanding. This Letter of Credit shall be
promptly surrendered by you to the Bank upon its expiration or termination as
specified above.
Except as herein specifically otherwise provided, this Letter of
Credit shall be subject to the UCP. This Letter of Credit shall be deemed to be
issued under the laws of The Commonwealth of Massachusetts and shall, as to
matters not governed by the UCP, be governed by and construed in accordance with
the internal laws (as opposed to conflicts of law provisions) of said state.
This Letter of Credit may be transferred in whole but not in part one
or more times to another party within the United States who has succeeded you as
Trustee under the Indenture by completing the transfer form attached hereto as
Annex 3 and sending it to Fleet National Bank, c/o Fleet Services Corporation,
- -------
529 Main Street, Charlestown, MA 02129, Attn: Trade Services Operations MA ML
SFTINT-S, Manager, Letter of Credit Section. The original of this Letter of
Credit and any amendments thereto must accompany the request in order that the
transfer when effected may be endorsed thereon. The Bank's transfer fee of $100
(to be paid by the Company) must also accompany your request to the Bank. To
the extent that the UCP is inconsistent with the transfer provisions contained
in this paragraph, the UCP shall not apply thereto.
<PAGE>
[LETTERHEAD OF FLEET BANK APPEARS HERE]
Irrevocable Direct Pay Letter of Credit
No. RS1046067
July 24, 1996
Page 7 of 20
Except as otherwise provided herein, all notices and other
communications provided for herein shall be by express courier, electronic
teletransmission (including facsimile transmission), certified mail or delivery
in person to an officer of the intended recipient at the address specified below
its name on the signature page or first page hereof. All notices and other
communications shall be deemed to have been duly given when received.
This Letter of Credit sets forth in full the undertaking of the Bank,
and such undertaking shall not in any way be modified, amended, amplified or
limited by reference to any document, instrument or agreement referred to herein
(including, without limitation, the Bonds).
FLEET NATIONAL BANK
By:/s/ SIGNATURE APPEARS HERE
---------------------------
Authorized Signature
By:/s/ SIGNATURE APPEARS HERE
---------------------------
Authorized Signature
CERTIFICATE A
CERTIFICATE FOR "A-DRAWING"
DATE:
-----------------
Fleet National Bank
529 Main Street
Charlestown, MA 02129
Attn: Trade Services Operations
Manager, Letter of Credit Section
Mail Code: MA ML SFTINT-S
Re: Irrevocable Direct Pay Letter of Credit No. RS1046067
The undersigned, a duly Authorized Officer of __________________ (the
"Trustee"), hereby certifies to FLEET NATIONAL BANK (the "Bank") that:
<PAGE>
[LETTERHEAD OF FLEET BANK APPEARS HERE]
Irrevocable Direct Pay Letter of Credit
No. RS1046067
July 24, 1996
Page 8 of 20
(A) The Trustee is the Trustee under the Indenture for the holders of
the Bonds.
(B) The Trustee is making a drawing under the above referenced Letter
of Credit in the amount of $____________________ with respect to the payment of
the portion of the Purchase Price of the Bonds corresponding to the principal
amount thereof, which Bonds are to be purchased pursuant to [Section 301(d)(iii)
or Section 301(d)(iv) of the Indenture]. (Cross out any inapplicable portion).
(C) The amount demanded hereby does not exceed the amount available on
the date hereof to be drawn under the above referenced Letter of Credit in
respect of the portion of the Purchase Price of Bonds corresponding to the
principal amount thereof.
(D) The amount demanded hereby does not include any amount in respect
of the purchase of any existing Borrower Bonds or Pledged Bonds.
(E) Upon receipt by the undersigned of the amount demanded hereby, (1)
the undersigned will apply the same directly to the payment when due of the
principal amount owing on account of the purchase of the Bonds pursuant to the
Indenture, (2) no portion of said amount shall be applied by the undersigned for
any other purpose, and (3) no portion of said amount shall be commingled with
other funds held by the undersigned, other than other moneys held in the Credit
Facility Fund established by the Indenture.
(F) Pursuant to Section 312 of the Indenture, Bonds in the aggregate
principal amount of $______________ have actually been delivered to the
undersigned or have been deemed delivered to the undersigned.
(G) The Bonds referred to in Paragraph F above have been pledged to
the Bank pursuant to the terms of the Pledge Agreement and, if said Bonds have
not been delivered to the Bank, the Trustee or the Remarketing Agent (as that
term is defined in the Indenture) holds said Bonds as agent for the Bank.
As used herein, the terms "Indenture", "Bonds", "Borrower Bonds",
"Pledged Bonds", "Purchase Price" and "Pledge Agreement" have the respective
meanings assigned to such terms in the above-referenced Letter of Credit.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of _____ day of _________________.
<PAGE>
[LETTERHEAD OF FLEET BANK APPEARS HERE]
Irrevocable Direct Pay Letter of Credit
No. RS1046067
July 24, 1996
Page 9 of 20
-------------------------------------
as Trustee
By:
----------------------------------
Title:
--------------------------
cc: AFC Cable Systems, Inc.
<PAGE>
[LETTERHEAD OF FLEET BANK APPEARS HERE]
Irrevocable Direct Pay Letter of Credit
No. RS1046067
July 24, 1996
Page 10 of 20
CERTIFICATE B
CERTIFICATE FOR "B-DRAWING"
DATE:_________________
Fleet National Bank
529 Main Street
Charlestown, MA 02129
Attn: Trade Services Operations
Manager, Letter of Credit Section
Mail Code: MA ML SFTINT-S
Re: Irrevocable Direct Pay Letter of Credit No. RS1046067
The undersigned, a duly Authorized Officer of __________________ (the
"Trustee"), hereby certifies to FLEET NATIONAL BANK (the "Bank") that:
(A) The Trustee is the Trustee under the Indenture for the holders of
the Bonds.
(B) The Trustee is making a drawing under the above-referenced Letter
of Credit in the amount of $_______________ with respect to the payment of the
principal of the Bonds, which amount has become due and payable pursuant to the
Indenture, upon [maturity, redemption or acceleration] of the Bonds. (Cross out
any inapplicable portion).
(C) The amount demanded hereby does not include any amount in respect
of the principal amount of any Pledged Bonds or any Borrower Bonds.
(D) The amount demanded hereby together with the aggregate of all
prior payments made pursuant to B-Drawings under the above-referenced Letter of
Credit, does not exceed $__________________.
(E) The amount demanded hereby does not exceed the portion of the
Stated Amount available on the date hereof to be drawn under the above-
referenced Letter of Credit in respect to the principal of the Bonds.
(F) Upon receipt by the undersigned of the amount demanded hereby, (1)
the undersigned will apply the same directly to the payment when due of the
principal amount owing
<PAGE>
[LETTERHEAD OF FLEET BANK APPEARS HERE]
Irrevocable Direct Pay Letter of Credit
No. RS1046067
July 24, 1996
Page 11 of 20
on account of the Bonds pursuant to the Indenture, (2) no portion of said amount
shall be applied by the undersigned for any other purpose, and (3) no portion of
said amount shall be commingled with other funds held by the undersigned, other
than other moneys held in the Credit Facility Fund established by the Indenture.
(G) The amount demanded hereby when applied to payment of the
principal owing on the Bonds [will not constitute the final payment of the
principal on the Bonds] [will constitute the final payment of principal on the
Bonds]. (Cross out the inapplicable portion).
As used herein, the terms "Indenture", "Bonds", "Borrower Bonds", "B-
Drawing", "Pledged Bonds", "Reimbursement Agreement" and "Stated Amount" have
the respective meanings assigned to such terms in the above-referenced Letter of
Credit.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of ___________ day of _________________________.
--------------------------------------
as Trustee
By:
------------------------------------
Title:
----------------------------
cc: AFC Cable Systems, Inc.
<PAGE>
[LETTERHEAD: FLEET BANK APPEARS HERE]
Irrevocable Direct Pay Letter of Credit
No. RS1046067
July 24, 1996
Page 12 of 20
CERTIFICATE C
CERTIFICATE FOR "C-DRAWING"
DATE:
----------------------
Fleet National Bank
529 Main Street
Charlestown, MA 02129
Attn: Trade Services Operations
Manager, Letter of Credit Section
Mail Code: MA, ML SFTINT-S
Re: Irrevocable Direct Pay Letter of Credit No. RS1046067
The undersigned, a duly Authorized Officer of ___________________ (the
"Trustee"), hereby certifies to FLEET NATIONAL BANK (The "Bank") that:
(A) The Trustee is the Trustee under the Indenture for the holders
of the Bonds.
(B) The Trustee is making a C-Drawing under the above referenced
Letter of Credit in the amount of $___________________ with respect to the
payment of [choose one]:
____ (i) the portion of the Purchase Price corresponding to the interest
on Bonds which are to be purchased pursuant to Section
301(d)(iii) or Section 301(d)(iv) of the Indenture;
____ (ii) interest on the Bonds, due and payable on an Interest Payment
Date (as defined in the Indenture) as a scheduled periodic
payment of interest on the Bonds; or
____ (iii) interest on the Bonds, due and payable upon redemption of the
Bonds pursuant to Section 310 of the Indenture, or upon
acceleration of the Bonds under Section 602(a) of the Indenture.
(C) The amount demanded hereby does not exceed the amount available
on the date hereof to be drawn under the above-referenced letter of Credit in
respect of interest on the Bonds.
(D) The amount demanded hereby does not include any portion of the
Stated Amount in respect of interest on any Borrower Bonds or Pledged Bonds.
<PAGE>
[LETTERHEAD OF FLEET BANK APPEARS HERE]
Irrevocable Direct Pay Letter of Credit
No. RS1046067
July 24, 1996
Page 13 of 20
(E) Upon receipt by the undersigned of the amount demanded hereby,
(1) the undersigned will apply the same directly to the payment when due of the
[interest owing on account of the Bonds pursuant to the Indenture][portion of
the Purchase Price of the Bonds pursuant to Section 301(d)(iii) or Section
301(d)(iv) of the Indenture corresponding to interest thereon] (Cross out any
inapplicable portion), (2) no portion of said amount shall be applied by the
undersigned for any other purpose, and (3) no portion of said amount shall be
commingled with other funds held by the undersigned.
(F) In the case of a drawing being made to pay the portion of the
Purchase Price of Bonds being purchased pursuant to Section 301(d)(iii) or
Section 301(d)(iv) of the Indenture corresponding to interest thereon, the
Trustee shall release the proceeds of this drawing only to the extent it has
received Bonds in an aggregate principal amount equal to the amount of proceeds
of the A-Drawing accompanying this drawing and which are being released by the
Trustee.
(G) In the case of a drawing being made pursuant to any maturity,
redemption, or acceleration of Bonds, the undersigned is making a simultaneous
B-Drawing to pay the principal of all of the Bonds which are being redeemed, or
the maturity of which has come due or been accelerated.
(H) The C-Drawing made hereunder has been made [choose one]:
____ (i) In respect of interest payable on an Interest Payment Date as a
scheduled periodic payment of interest on the Bonds or as a
portion of the Purchase Price of Bonds being purchased to
Section 301(d)(iii) or Section 301(d)(iv) of the Indenture, and
the Interest Component of the Letter of Credit should be
reinstated, subject to the conditions of the terms of the Letter
of Credit, to $__________ being an amount equal to 46 days
interest (computed at the rate of 12% per annum on the basis of
a 365 day year, on the outstanding Principal Component of
$__________.
____ (ii) In respect to interest on the Bonds upon maturity, redemption,
or acceleration, and accordingly, no reinstatement shall be made
to the Interest Component or otherwise to the Stated Amount as a
result of this C-Drawing.
As used herein, the terms "Indenture", "Bonds", "Borrower Bonds",
"Pledged Bonds", "Purchase Price", "A-Drawing", "B-Drawing", "C-Drawing",
"Interest Component", "Principal Component" and "Stated Amount" have the
respective meanings assigned to such terms in the above-referenced Letter of
Credit.
<PAGE>
[LETTERHEAD OF FLEET BANK APPEARS HERE]
Irrevocable Direct Pay Letter of Credit
No. RS1046067
July 24, 1996
Page 14 of 20
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of _____________.
----------------------------------
as Trustee
By:
-------------------------------
Title:
-------------------------
cc: AFC Cable Systems, Inc.
<PAGE>
[LETTERHEAD OF FLEET BANK APPEARS HERE]
Irrevocable Direct Pay Letter of Credit
No. Rs1046067
July 24, 1996
Page 15 of 20
ANNEX 1
SIGHT DRAFT
Address:
Date:
----------------------
FOR VALUE RECEIVED
Pay at sight to:
U.S.
(U.S. $__________________________)
Charge to account of FLEET NATIONAL BANK
Irrevocable Direct Pay Letter of Credit No. RS1046067,
dated July 24, 1996 (the "Letter of Credit")
To: Fleet National Bank
529 Main Street
Charlestown, MA 02129
Attn: Trade Services Operations
Manager, Letter of Credit Section
Mail Code: MA ML SFTINT-S
The sum drawn does not exceed the Stated Amount, as reduced and reinstated
through the date hereof, as provided in the Letter of Credit.
---------------------------------
as Trustee
By:
------------------------------
Authorized Officer
The signature below constitutes an endorsement of this Sight Draft:
---------------------------------
as Trustee
By:
------------------------------
Authorized Officer
<PAGE>
[LETTERHEAD OF FLEET BANK APPEARS HERE]
Irrevocable Direct Pay Letter of Credit
No. RS1046067
July 24, 1996
Page 16 of 20
ANNEX 2
CERTIFICATE FOR REINSTATEMENT OF PRINCIPAL COMPONENT
DATE:
Fleet National Bank
529 Main Street
Charlestown, MA 02129
Attn: Trade Services Operations
Manager, Letter of Credit Section
Mail Code: MA ML SFTINT-S
Re: Irrevocable Direct Pay Letter of Credit No. RS1046067
Gentlemen:
The undersigned, a duly Authorized Officer of
____________________________________________ (the "Trustee"), hereby certifies
to FLEET NATIONAL BANK (the "Bank") that:
(A) The Trustee is the Trustee under the Indenture for the holders of
Bonds, and pursuant to Section 313 of the Indenture, is authorized to act as
paying agent for the Bonds.
(B) The Trustee previously made an A-Drawing on
________________________________________ [insert date] under the Letter of
Credit in the amount of $__________________________ and such amount has not been
reinstated under the Principal Component of the Letter of Credit.
(C) The undersigned has not received notice from Fleet National Bank
(the "Bank") that an Event of Default has occurred under the Letter of Credit
issued on July 24, 1996 and the Reimbursement Agreement dated as of July 1, 1996
(the "Reimbursement Agreement"), between AFC Cable Systems, Inc. (the "Account
Party"), and the Bank.
(D) The Trustee has either (i) received notice from the Bank that the
Bank received a payment in reimbursement of all or part of such A-Drawing or
(ii) the Trustee has given irrevocable notice to the Bank, on or prior to 3:30
p.m. Boston, Massachusetts time on the date hereof, being a date on which the
Trustee must give notice that Pledged Bonds (as defined in the Indenture) are
being remarketed, that the Trustee (a) has received in cash a payment for the
Pledged Bonds being remarketed, (b) is holding such cash payment for benefit of
the Bank (c) will deposit such cash payment in an account the Bank maintains
with the Trustee or deliver such cash payment to the Bank immediately by federal
funds wire transfer.
<PAGE>
[LETTERHEAD OF FLEET BANK APPEARS HERE]
Irrevocable Direct Pay Letter of Credit
No. RS1046067
July 24, 1996
Page 17 of 20
(E) By filing of this Certificate, you shall reinstate the Principal
Component in an amount equal to $________________________, being (i) the amount
of the cash payment received by the Bank in reimbursement of such A-Drawing or
(ii) the amount of the cash payment specified in the notice referred to in
paragraph D hereof as being received from the purchase of the Pledged Bonds
being remarketed, or the aggregate of any combination resulting from the
operation of the foregoing clauses (i) and (ii), but in any case not in excess
of the principal amount of Bonds outstanding at the time of such reinstatement.
As used herein, the terms "Indenture", "Bonds", "Pledged Bonds" and
"Principal Component" have the respective meanings assigned to such terms in the
above-referenced Letter of Credit.
IN WITNESS WHEREOF, the Trustee has executed
and delivered this Certificate as of the ___________ day of
____________________________, ______________.
-------------------------------------
as Trustee
By:----------------------------------
Title:-------------------------------
cc: AFC Cable Systems, Inc.
<PAGE>
[LETTERHEAD OF FLEET BANK APPEARS HERE]
Irrevocable Direct Pay Letter of Credit
No. RS1046067
July 24, 1996
Page 18 of 20
ANNEX 3
TRANSFER FORM
DATE:
Fleet National Bank
529 Main Street
Charlestown, MA 02129
Attn: Trade Services Operations
Manager, Letter of Credit Section
Mail Code: MA ML SFTINT-S
Re: Irrevocable Direct Pay Letter of Credit No. RS1046067
Gentlemen:
For value received the undersigned beneficiary hereby irrevocably
transfers to:
(Name of Transferee)
(Address)
all rights of the undersigned beneficiary to draw under the above Letter of
Credit in its entirety. The transferee has succeeded the undersigned as Trustee
under the Indenture of Trust (as defined in the Letter of Credit).
By this transfer, all rights of the undersigned beneficiary in such
Letter of Credit are transferred to the transferee and the transferee shall have
the sole rights as beneficiary in such Letter of Credit are transferred to the
transferee and the transferee shall have the sole rights as beneficiary thereof,
including sole rights relating to any amendments, whether increases or
extensions or other amendments and whether now existing or hereafter made. All
amendments are to be advised direct to the transferee without necessity of any
consent of or notice to the undersigned beneficiary.
<PAGE>
[LETTERHEAD OF FLEET BANK APPEARS HERE]
Irrevocable Direct Pay Letter of Credit
No. RS1046067
July 24, 1996
Page 19 of 20
The Letter of Credit is returned herewith, and we ask you to endorse
the transfer on the reverse thereof and forward it directly to the transferee
with your customary notice of transfer.
Very truly yours,
---------------------------------
Signature of Beneficiary
We certify that we have succeeded (Name of Beneficiary) as Trustee
under the Indenture (as defined in the Letter of Credit).
----------------------------------
Authorized Signature of Transferee
Title:
<PAGE>
[LETTERHEAD OF FLEET BANK APPEARS HERE]
Irrevocable Direct Pay Letter of Credit
No. RS1046067
July 24, 1996
Page 20 of 20
ANNEX 4
DEFAULT NOTICE
Date:
Registered Mail
Return Receipt Requested/Overnight Courier
,as Trustee
- ----------------------------
[address]
Attention:
Re: Irrevocable Direct Pay Letter of Credit No. RS1046067 Occurrence of
Event of Default under the Reimbursement Agreement dated as of July
1, 1996, between AFC Cable Systems, Inc. and Fleet National Bank
Gentlemen:
You are hereby notified that an Event of Default under Section ____ of
the above referenced Reimbursement Agreement has occurred and is continuing [,
and that the Letter of Credit will not be reinstated as of the date hereof].
(Cross out any inapplicable portion).
FLEET NATIONAL BANK
By:
----------------------------
Title:
cc: Fleet National Bank
529 Main Street
Charlestown, MA 02129
Attn: Trade Services Operations
Manager, Letter of Credit Section
Mail Code: MA ML SFTINT-S
AFC Cable Systems, Inc.
<PAGE>
212818
EXHIBIT 10.4
MORTGAGE DEED
-------------
AFC CABLE SYSTEMS, INC., a Delaware corporation (hereinafter called
"Mortgagor"), for consideration paid to it by FLEET NATIONAL BANK, a national
banking association organized and existing under the laws of the United States
of America, with its principal office located in the City of Providence, Rhode
Island (hereinafter called "Mortgagee"), hereby grants to Mortgagee, with
MORTGAGE COVENANTS, for breach of which covenants and any other covenants
contained herein Mortgagee shall have the STATUTORY POWER OF SALE, and upon the
STATUTORY CONDITION, the real estate described on Exhibit A hereto attached
---------
together with all of the following (all of which, together with said real
estate, is herein called the "Mortgaged Property"):
(a) All that certain piece or parcel of land, with the buildings and
improvements now or hereafter placed thereon, located on Duchaine Boulevard in
the City of New Bedford, County of Bristol, and Commonwealth of Massachusetts
(hereinafter called the "Premises") and more particularly bounded and described
in said Exhibit A.
---------
(b) All the right, title and interest of Mortgagor, now or hereafter,
in or to the land lying in the bed of any street, road or avenue, opened or
proposed, and any and all sidewalks, plazas, alleys, strips and gores, in front
of, adjoining or adjacent to the Premises; and all and singular the privileges,
tenements, hereditaments, licenses, easements, rights, royalties, mineral, oil
and gas rights, rents, issues and profits, water, water rights, water stock, and
appurtenances, reversion or reversions and remainder or remainders belonging or
in any way appertaining to the Premises.
(c) All the right, title and interest of Mortgagor in or to all
fixtures of every kind and nature whatsoever, now or hereafter located in, upon
or about the Premises, or any part thereof, and used or usable in connection
with any present or future occupancy or operation of the Premises, and all
renewals and replacements thereof and additions and accessions thereto
(hereinafter collectively referred to as the "Fixtures"). The Fixtures shall be
deemed to include, but without limiting the generality of the foregoing, all
heating, lighting, laundry, incineration and power equipment, engines, pipes,
pumps, tanks, motors, dynamos, boilers, fuel, conduits, switchboards, plumbing,
lifting, refrigerating, ventilating, and communications apparatus, sprinkler
system and other fire prevention and fire extinguishing apparatus, air cooling
and air conditioning apparatus, elevators, escalators, shades, blinds, awnings,
screens, storm doors, and windows, stoves, refrigerators, refrigerating plant,
attached cabinets, partitions, ducts and compressors, gas and electric fixtures,
ranges, stoves, disposals, rugs, and all right, title and interest of Mortgagor
in and to any Fixtures which may be subject to any security agreement,
conditional bill of sale, or chattel mortgage superior to the rights of
Mortgagee under this Mortgage, and Mortgagor agrees to execute and deliver, from
time to time, such further documents and instruments as may be requested by
Mortgagee to confirm, preserve, and enforce the lien of this Mortgage on any
Fixtures; and all the proceeds and products of any and all Fixtures, including,
but not limited to, any deposits or payments now or hereafter made thereon.
<PAGE>
(d) All unearned premiums, accrued, accruing or to accrue under
insurance policies now or hereafter obtained by Mortgagor and all proceeds of
the conversion, voluntary or involuntary, of the Mortgaged Property, the
improvements and/or any other property or rights encumbered or conveyed hereby,
or any part thereof, into cash or liquidated claims.
(e) All awards or payments, including interest thereon, and the right
to receive the same, which may be made with respect to eminent domain, the
alteration of the grade of any street, or any other injury to or decrease in the
value of the Mortgaged Property, to the extent of all amounts which may be
secured by this Mortgage, at the date of receipt of any such award or payment by
Mortgagee or Mortgagor, incurred by Mortgagee in connection with the collection
of such award or payment, and Mortgagor agrees to execute and deliver, from time
to time, such further instruments as may be requested by Mortgagee to confirm
such assignment to Mortgagee of any such award or payment.
(f) All further estate, right, title, interest, property, claim and
demand whatsoever, either in law or in equity, of Mortgagor, in or to any of the
above.
(g) All the right, title and interest of Mortgagor in and to the
Collateral, hereinafter defined.
TO HAVE AND TO HOLD the above granted and bargained Mortgaged Property,
with the privileges and appurtenances thereof, unto Mortgagee, its successors
and assigns forever, to its and their own property use. Mortgagor, for itself,
its successors and assigns, covenants with Mortgagee, its successors and
assigns, that it is well seized of the Mortgaged Property as a good indefeasible
estate in FEE SIMPLE; and has good right to bargain and sell the same in manner
and form as above written; and that the same is free from all encumbrances
whatsoever, except as listed in Exhibit A or as expressly provided in this
---------
Mortgage.
Mortgagor further warrants and covenants to defend the Mortgaged
Property to Mortgagee, its successors and assigns, against all claims and
demands made by any other party.
This Mortgage is granted by Mortgagor to secure (a) the payment and
performance by Mortgagor of all of its obligations, covenants, agreements and
conditions under that certain Reimbursement Agreement dated as of July 1, 1996
by and between Mortgagor and Mortgagee (the "Reimbursement Agreement")
pertaining to the Letter of Credit issued by Mortgagee on account of Mortgagor
to Fleet National Bank as Trustee (the "Trustee") in the face amount of
$3,624,000 (the "Letter of Credit"); and (b) the payment and performance of all
covenants, agreements and conditions referred to or contained herein (all of the
obligations in subparagraphs (a) and (b) above are herein collectively called
the "Obligations").
-2-
<PAGE>
In consideration of the foregoing, and in order to more fully protect
the security of this Mortgage, Mortgagor and Mortgagee represent, warrant,
covenant and agree as follows:
1. Competence to Execute Loan Documents. Mortgagor has full power and
------------------------------------
authority to execute and deliver the Reimbursement Agreement, this Mortgage, all
other mortgage instruments, security agreements, and all other agreements and
documents required of it, to Mortgagee, and the execution and delivery of the
same is not in violation of and will not result in default of any agreements or
understandings Mortgagor may have with any person or persons.
2. Mortgage Condition. This Mortgage is given on the express
------------------
condition that if Mortgagor shall pay unto Mortgagee the amount of all sums due
from Mortgagor to Mortgagee, in the manner and at the time or times specified in
the Reimbursement Agreement, then Mortgagee shall discharge and release this
Mortgage. Mortgagor shall pay all costs of recordation of any discharge or any
other instrument reducing the Obligations, if any.
3. Legal Tender and Application of Payments. Mortgagor shall pay all
----------------------------------------
the indebtedness evidenced by the Reimbursement Agreement, including, but not
limited to, all outstanding principal and the interest thereon in lawful money
of the United States at the times and in the manner set forth therein. Any
payments made in accordance with the terms of this Mortgage by any person at any
time liable for the payment of the whole or any part of the sums now or
hereafter secured by this Mortgage or by any subsequent owner of the Mortgaged
Property, or by any other person whose interest in the Mortgaged Property might
be prejudiced in the event of a failure to make such payment, shall be deemed,
as between Mortgagee and all persons who at any time may be liable as aforesaid
or may own the Mortgaged Property, to have been made on behalf of all such
persons.
4. Taxes, Assessments and Other Charges. Mortgagor shall pay
------------------------------------
promptly, before the same shall become delinquent, all taxes, assessments, sewer
rents, water rates and other charges of any kind now or hereafter levied or
assessed upon the Mortgaged Property or any part thereof, or upon the
Reimbursement Agreement, or upon the interest of Mortgagee in the Mortgaged
Property, and any governmental or municipal charges and impositions for which
lien rights exist; and upon request of Mortgagee, Mortgagor shall exhibit to
Mortgagee receipts for the payment of all items specified in this paragraph
prior to the date when the same shall become delinquent.
5. Insurance. Mortgagor shall obtain, carry and maintain
---------
Comprehensive General Liability Insurance covering the Mortgaged Property in an
amount of not less than $1,000,000 bodily injury (including death) and property
damage, per occurrence. Such insurance shall be with companies approved by
Mortgagee. Mortgagor shall provide Mortgagee with a certificate of insurance
containing a provision designating Mortgagee as mortgagee and as an additional
insured party.
-3-
<PAGE>
Mortgagor shall also maintain insurance policies against loss by fire,
with extended coverage, and by any other casualty specified from time to time by
Mortgagee upon the buildings and improvements on the Mortgaged Property in such
company or companies as Mortgagee shall approve in an amount not less than one
hundred percent (100%) of the full insurable value of the Mortgaged Property.
If requested by Mortgagee, Mortgagor shall furnish demolition or increased cost
of reconstruction insurance in an amount satisfactory to Mortgagee. The policy
or policies of such insurance shall in case of loss be made payable to Mortgagee
as collateral security therefor, and Mortgagor hereby agrees that Mortgagee may,
upon failure of Mortgagor to maintain insurance as required hereunder or to
obtain new coverage as required hereunder, at its option, but without obligation
so to do, effect new insurance or at Mortgagee's option, insurance in favor of
Mortgagee alone, and that the premium or premiums for all such insurance shall
be paid by Mortgagor promptly when due.
Mortgagor does hereby appoint Mortgagee to be the true and lawful
attorney, irrevocable, of Mortgagor, in the name and stead of Mortgagor, and
Mortgagor hereby agrees that Mortgagee may (except for claims of less than One
Hundred Thousand Dollars ($100,000)), at Mortgagee's option following the
occurrence of an Event of Default, but without obligation to do so, demand,
adjust, sue for, compromise and collect the proceeds of claims for losses which
may occur under any such insurance, give discharging receipts for sums received
in settlement of such losses, to reimburse Mortgagee therefrom for all expenses
(including reasonable counsel fees) incurred in connection therewith, and apply
the remainder thereof and any unearned premium of or dividend upon any canceled
insurance, notwithstanding the claim of any intervening encumbrancer or lienor,
at Mortgagee's election, in whole or in part, on account of the indebtedness
secured by this Mortgage, whether or not then due, or to the cost of repair or
restoration of the Mortgaged Property.
Mortgagor agrees to furnish Mortgagee certificates of all renewals of
the aforesaid insurance relating to Mortgagor or the Mortgaged Property prior to
the expiration date of the expiring policies. All policies of insurance shall
carry an endorsement requiring at least thirty (30) days' written notice to
Mortgagee from the insurer or insurers issuing the same prior to their changing
or canceling such policy, and Mortgagor hereby agrees to promptly deliver or
cause the delivery of any certificate evidencing any such change or cancellation
to Mortgagee. All policies of insurance shall provide independent insurance for
Mortgagee, and the rights of Mortgagee in the policy shall in no event be
subject to adverse effect or diminution by any act or neglect of Mortgagor.
6. Environmental Compliance.
------------------------
(a) Subject to the matters disclosed as of the date hereof to
Mortgagee, Mortgagor makes the following representations and warranties to
Mortgagee as to the Mortgaged Property:
-4-
<PAGE>
(i) Neither Mortgagor nor any operations conducted by
Mortgagor or any tenant of Mortgagor on the Mortgaged Property, is in violation,
or alleged violation, of any judgment, decree, order, law, license, rule or
regulation pertaining to environmental matters, including without limitation,
those arising under the Resource Conservation and Recovery Act ("RCRA"), the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986
("SARA"), the Federal Clean Water Act of 1977, the Federal Clean Air Act, the
Toxic Substances Control Act, the Hazardous Materials Transportation Actor any
other federal, or state or local statute, regulation, ordinance, order or decree
relating to health, safety or the environment (collectively, "Environmental
Laws"), which violation involves any of the Mortgaged Property or would have a
material adverse effect on the environment or the business, assets or financial
condition of Mortgagor.
(ii) With the exception of a claim brought by third parties
against Mortgagor described in Note 9 to Mortgagor's annual financial statement
for its fiscal year 1994 and of the matters disclosed by Mortgagor on this date,
Mortgagor has not received notice from any third party, including without
limitation any federal, state or local governmental authority, (i) that it has
been identified by the United States Environmental Protection Agency ("EPA") as
a potentially responsible party under CERCLA with respect to a site listed on
the National Priorities List, 40 C.F.R. Part 300 Appendix B (1986); (ii) that
any hazardous waste, as defined by 42 U.S.C. (S) 9601(5), any hazardous
substances as defined by 42 U.S.C. (S) 9601(14), any pollutant or contaminant as
defined by 42 U.S.C. (S) 9601(33) or any toxic substances, oil or hazardous
materials or other chemicals or substances regulated by any Environmental Laws
(collectively, "Hazardous Materials") which it has generated, transported or
disposed of have been found at any site at which a federal, state or local
agency or other third party has conducted or has ordered that Mortgagor conduct
a remedial investigation, removal or other response action pursuant to any
Environmental Laws; or (iii) that it is or shall be a named party to any claim,
action, cause of action, complaint, or legal or administrative proceeding (in
each case, contingent or otherwise) arising out of any third party's incurrence
of costs, expenses, losses or damages of any kind whatsoever in connection with
the Release of Hazardous Materials.
(iii) No portion of any of the Mortgaged Property has been
used for the handling, processing, storage or disposal of Hazardous Materials
except in compliance with applicable Environmental Laws; and no underground tank
or other underground storage receptacle for Hazardous Materials is located on
any portion of any of the Mortgaged Property; and (i) in the course of any
activities conducted by Mortgagor, or to the knowledge of Mortgagor the
operators of the Mortgaged Property, no Hazardous Materials have been generated
or are being used on the Mortgaged Property except in compliance with applicable
Environmental Laws; (ii) to the best of Mortgagor's knowledge there has been no
past or present releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, disposing or dumping (a "Release" or
"Releases") or threatened Release of Hazardous Materials on, upon, into or
-5-
<PAGE>
from the Mortgaged Property, which Release would have an adverse effect on
the value of any of the Mortgaged Property or adjacent properties or the
environment; (iii) to the best of Mortgagor's knowledge, there have been no
Releases on, upon, from or into any real property in the vicinity of any of the
Mortgaged Property which, through soil or groundwater contamination, may have
come to be located on, and which would have a material adverse effect on the
value of, any of the Mortgaged Property; and (iv) any Hazardous Materials that
have been generated on any of the Mortgaged Property have been transported off-
site only by carriers having an identification number issued by the EPA, treated
or disposed of only by treatment or disposal facilities maintaining valid
permits as required under applicable Environmental Laws, which transporters and
facilities have been and are, to the best of Mortgagor's knowledge, operating in
compliance with such permits and applicable Environmental Laws.
(iv) No part of the Mortgaged Property is or shall be subject
to any applicable environmental clean-up responsibility law or environmental
restrictive transfer law or regulation, by virtue of the transactions set forth
herein and contemplated hereby.
(b) In respect of all environmental matters Mortgagor shall:
(i) Comply strictly and in all respects with the requirements
of all federal, state, and local Environmental Laws; notify Mortgagee promptly
in the event of any spill, hazardous waste pollution or contamination affecting
any of the Mortgaged Property; forward to Mortgagee promptly any notices
relating to such matters received from any governmental agency; and pay promptly
when due any fine or assessment against any of the Mortgaged Property, provided
that Mortgagor shall have the right to contest any such fine or assessment so
long as no Event of Default exists at the time such contest is commenced, and
Mortgagor's contest thereof is asserted in good faith and prosecuted as
expeditiously as possible;
(ii) Not become involved, and shall use its best efforts to
not permit any tenant or subtenant of any of the Mortgaged Property to become
involved, in any operations at any of the Mortgaged Property generating,
storing, disposing, or handling of any hazardous material or any other activity
that could lead to the imposition on Mortgagee, Mortgagor or any of the
Mortgaged Property of any liability or lien under any Environmental Laws;
(iii) Immediately contain and, if required by the Rhode
Island Department of Environmental Management, the Massachusetts Department of
Environmental Protection, the United States Environmental Protection Agency or
any other governmental agency having jurisdiction over any of the Mortgaged
Property, remove any hazardous material found on any of the Mortgaged Property,
which work must be done in compliance with all requirements and all applicable
laws and at Mortgagor's expense; and Mortgagor agrees that Mortgagee has the
right, at its sole option but at Mortgagor's expense, to have an environmental
engineer or other representative review the work being done;
-6-
<PAGE>
(iv) Promptly upon the request of Mortgagee, based upon
Mortgagee's reasonable belief that a hazardous waste or other environmental
problem exists with respect to any of the Mortgaged Property, provide Mortgagee
with an environmental site assessment report or an update of any existing
report, all in scope, form and content satisfactory to Mortgagee; and
(v) Indemnify, defend, and hold Mortgagee harmless from and
against any claim, costs, damage (including, without limitation, consequential
damages), expense (including, without limitation, attorneys' fees and expenses),
loss, liability, or judgment now or hereafter arising as a result of any claim
for environmental cleanup costs, any resulting damage to the environment and any
other environmental claims against Mortgagor, Mortgagee, or any of the Mortgaged
Property.
7. Maintenance and Repair. Mortgagor shall maintain the Mortgaged
----------------------
Property in good condition and repair, shall not commit or suffer any waste of
the Mortgaged Property, and shall comply with, or cause to be complied with, all
statutes, ordinances and requirements of any federal, state, municipal, or other
governmental authority relating to the Mortgaged Property. Mortgagor shall
promptly repair, restore, replace or rebuild any part of the Mortgaged Property
which may be damaged or destroyed by any casualty whatsoever or which may be
affected by any proceeding of the character referred to in the paragraph hereof
entitled Eminent Domain. Notwithstanding anything to the contrary provided above
in this Section 7, as long as any of the Bonds remain outstanding, if any of the
---------
insurance proceeds resulting from any damage to or destruction of any item of
Bond Collateral (hereinafter defined) are for any reason not applied to the
repair and/or replacement of such Bond Collateral, then such insurance proceeds
will be applied as follows: first, paid to Mortgagee as reimbursement for the
amount of any then unreimbursed draws for principal under the Letter of Credit
to the extent thereof (if any) as a result of an extraordinary redemption
pursuant to Section 310(a) of the Indenture (as defined in the Reimbursement
Agreement); and the balance (if any) paid to the Trustee for application to
payment of the Bonds pursuant to the Indenture. As used in this Mortgage, "Bond
Collateral" means any portion of the Mortgaged Property the cost of which was
paid or reimbursed, directly or indirectly, from the proceeds of the Bonds.
8. Alteration or Demolition. Mortgagor agrees that no building or
------------------------
other property now or hereafter covered by the lien of this Mortgage shall be
removed, demolished, or structurally altered, without the prior written consent
of Mortgagee, except that Mortgagor may remove or dispose of, free from the lien
of this Mortgage, any Fixture as from time to time may become worn out or
obsolete, provided that prior to such removal, any such Fixture shall be
replaced with another Fixture of value and utility at least equal to that of the
replaced Fixture and free from any title retention or security agreement or
other encumbrance, and by such removal and replacement, Mortgagor shall be
deemed to have subjected such other equipment to the lien of this Mortgage; and
further except that Mortgagor may construct an addition to the building located
on the Premises and may complete all improvements to the Premises related to
such construction. Mortgagor shall immediately notify Mortgagee of any such
replacement and shall further execute such mortgage, security agreement, or
other documents as Mortgagee may require with respect thereto. If Mortgagor
receives any
-7-
<PAGE>
proceeds of any item of Bond Collateral in excess of its original cost, then it
shall apply such proceeds as provided in the last two (2) sentences of
Section 7 hereof.
- ---------
9. Restrictions on Use of Property and Prohibition Against Sale.
------------------------------------------------------------
Mortgagor shall not sell, lease, encumber, suffer change in title or ownership
of, or otherwise transfer, or vest title in anyone other than Mortgagor to all
or any part of the Mortgaged Property while any part of the indebtedness secured
hereby remains unpaid without the prior approval of Mortgagee. Further, unless
required by applicable law or unless Mortgagee has otherwise agreed in writing,
Mortgagor shall not allow changes in the nature of the occupancy for which the
Premises were intended on the date of this Mortgage, including, but not limited
to, any change in any private restrictive covenant or private restrictions, if
any, limiting or defining the uses which may be made of any part of the
Premises.
10. Eminent Domain. In the event that the whole or any part of the
--------------
Mortgaged Property shall be taken by eminent domain, or in the event of any
alteration of the grade of any street or highway, or of any other injury to or
decrease in value of the Mortgaged Property, or the reacquisition of the whole
or any part of the Mortgaged Property pursuant to the terms of any redevelopment
plan or agreement affecting the Mortgaged Property or if any agreement shall be
made between Mortgagor and any entity vested with the power of eminent domain,
any and all awards and payments on account thereof shall be deposited with
Mortgagee. Mortgagor shall give Mortgagee immediate notice of the actual or
threatened commencement of any of the foregoing proceedings, and shall deliver
to Mortgagee copies of all papers served in connection with any such
proceedings. Mortgagee shall have the right to intervene and participate in any
proceedings for and in connection with any such taking. Unless such intervention
shall be prohibited by the Court having jurisdiction over such taking, in which
event Mortgagor shall consult with Mortgagee in connection with such
proceedings; and Mortgagor shall not enter into any agreement with regard to the
Mortgaged Property or any award or payment on account thereof unless Mortgagee
shall have consented thereto in writing. Mortgagor hereby appoints Mortgagee its
attorney-in-fact, coupled with an interest, and authorizes, directs and empowers
such Attorney, at its option following the occurrence of an Event of Default, on
behalf of Mortgagor, to adjust, compromise or settle the claim for any such
award or payment, to collect, receive and retain the proceeds thereof, and to
give proper receipts therefor. Mortgagor further agrees, on request, to make,
execute, and deliver to Mortgagee any and all assignments and other instruments,
as Mortgagee may require, to confirm or assign all such awards and payments to
Mortgagee free and clear of any and all encumbrances of any nature whatsoever.
Notwithstanding any such taking, alteration of grade, other injury to
or decrease in value of the Mortgaged Property, or reacquisition of title, or
agreement, Mortgagor shall continue to pay interest on the principal sums
secured hereby at the rate provided in the Letter of Credit, and to make all
payments required by the Reimbursement Agreement and this Mortgage. Any
reduction in the principal sums resulting from the application by Mortgagee of
such award or payment as hereinafter set forth shall be deemed to take effect
only on the date of such application. The proceeds of any award or payment,
after deducting the expenses of collection, including, but not limited to, the
counsel fees, other costs and disbursements,
-8-
<PAGE>
incurred by Mortgagee, may be applied by Mortgagee, at its sole option, toward
payment of the indebtedness secured hereby whether or not same shall be then due
or payable, or be paid over wholly or in part to Mortgagor for the purposes of
altering or restoring any part of the Mortgaged Property which may have been
damaged as a result of any such taking, alteration of grade, or other injury to
the Mortgaged Property, or for any other purpose or object satisfactory to
Mortgagee, but Mortgagee shall not be obligated to see to the proper application
of any amount paid over to Mortgagor, nor shall the amount so paid over to
Mortgagor be deemed a payment on any indebtedness secured hereby.
If prior to the receipt by Mortgagee of such award or payment, the
Mortgaged Property shall have been sold on foreclosure of this Mortgage,
Mortgagee shall have the right to receive said award or payment to the extent of
the debt secured by this Mortgage remaining unsatisfied after such sale of the
Mortgaged Property, with interest thereon at the highest rate set forth in the
Letter of Credit, whether or not a deficiency judgment on this Mortgage shall
have been sought or recovered or denied, and to the extent of the reasonable
counsel fees, costs and disbursements incurred by Mortgagee in connection with
the collection of such award or payment.
Notwithstanding anything to the contrary provided above in this
Section 10, as long as any of the Bonds remain outstanding, if any of the
- ----------
proceeds resulting from any taking, alteration of grade, other injury to or
decrease in value of the Bond Collateral, or reacquisition of title, or
agreement, after deducting the expenses of collection, are for any reason not
applied to altering or restoring such Bond Collateral, then such insurance
proceeds will be applied as follows: first, paid to Mortgagee as reimbursement
for the amount of any then unreimbursed draws for principal under the Letter of
Credit to the extent thereof (if any) as a result of an extraordinary redemption
pursuant to Section 310(a) of the Indenture (as defined in the Reimbursement
Agreement); and the balance (if any) paid to the Trustee for application to
payment of the Bonds pursuant to the Indenture.
11. Right to Cure. At its option, Mortgagee may pay any expense or
-------------
item (including, but not limited to, taxes, rates, assessments, other charges,
insurance premiums, maintenance and repair expenses, expenses incurred in
protection of the lien of this Mortgage, etc.) which Mortgagor herein agrees to
pay in case Mortgagor shall fail to pay the same when due, and may perform any
acts or covenants which Mortgagor herein agrees and shall fail to perform, and
may make any payments under or secured by any other mortgage on the Mortgaged
Property, and may add the same, and the expense thereof, including, but not
limited to, counsel fees and other costs, charges and disbursements incurred by
Mortgagee in connection therewith, to the indebtedness secured hereby or may at
its option deduct the same from any part of money thereafter advanced; and
Mortgagor agrees to repay immediately on demand, the same to Mortgagee, together
with interest thereon at the highest rate set forth in the Letter of Credit,
from the date on which such payment or expense is made by Mortgagee, and the
same shall be a lien upon the Mortgaged Property prior to any right, title,
interest, lien or claim thereto or thereon attaching or accruing subsequent to
the lien of this Mortgage and shall be secured by this Mortgage.
-9-
<PAGE>
12. Protection of Lien. Mortgagor shall pay all costs, expenses and
------------------
counsel fees incurred by Mortgagee in protecting or sustaining the lien of this
Mortgage, including without limitation all expenses incurred by Mortgagee in
connection with containment, monitoring, prevention or clean-up of hazardous
substances upon or in connection with the Mortgaged Property. Mortgagor shall
indemnify and save Mortgagee harmless from all such costs and expenses,
including, but not limited to, counsel fees, recording fees and costs of a title
search, continuation of abstract and preparation of survey, incurred by reason
of any action, suit, proceeding, hearing, motion or application before any court
or administrative body in which Mortgagee may be a party by reason hereof,
including, but not limited to, condemnation, bankruptcy and administrative
proceedings, as well as any other proceedings wherein proof of claim is required
to be filed or in which it becomes necessary, in Mortgagee's sole opinion, to
defend or uphold the terms and priority of this Mortgage. All money paid or
expended by Mortgagee in that regard, together with interest thereon from date
of such payment at the highest rate set forth in the Letter of Credit shall be
additional indebtedness secured hereby, and shall be immediately and without
notice due and payable to Mortgagee by Mortgagor.
13. Indemnification. Any and all expenses incurred in connection with
---------------
the Reimbursement Agreement and the Letter of Credit, and secured by this
Mortgage, shall be paid by Mortgagor, including, but not limited to, the cost of
title insurance premiums and charges, recording fees, fees charged for servicing
said Letter of Credit, appraisal fees, and Mortgagee's attorneys fees.
Mortgagor agrees to pay all such fees and indemnify and save Mortgagee harmless
against the claims of any person(s) claiming any fee(s), reimbursement(s),
commission(s) and/or costs arising out of said Letter of Credit.
14. Right to Enter Premises. Mortgagee and any persons authorized by
-----------------------
Mortgagee shall have the right to enter and inspect the Mortgaged Property at
all times upon prior reasonable notice to Mortgagor. Upon and after the
occurrence of an Event of Default, Mortgagee may conduct such environmental
assessments and testings of the Mortgaged Property as Mortgagee desires,
including without limitation the conducting of soil borings, installation and
monitoring of groundwater monitoring wells and equipment, the use of ground
penetrating radar, and the conducting of tests of underground storage tanks.
15. [omitted]
16. No Waiver, Etc. Any failure by Mortgagee to insist upon the
--------------
strict performance by Mortgagor of any of the terms and provisions hereof shall
not be deemed to be a waiver of any of the terms and provisions hereof, and
Mortgagee, notwithstanding any such failure, shall have the right thereafter to
insist upon the strict performance by Mortgagor, of any and all of the terms and
provisions of this Mortgage and the Reimbursement Agreement to be performed by
Mortgagor; and neither Mortgagor nor any other person now or hereafter obligated
for the payment of the whole or any part of the sums now or hereafter secured by
this Mortgage shall be relieved of such obligation by reason of the failure of
Mortgagee to comply with any request of Mortgagor of any other person so
obligated to take action to foreclose this Mortgage or otherwise enforce any of
the provisions of this Mortgage or of any obligation secured by this Mortgage,
or by reason of the release, regardless of consideration,
-10-
<PAGE>
of the whole or any part of the security held for the indebtedness secured by
this Mortgage; and, regardless of consideration, and without the necessity for
any notice to or consent by the holder of any subordinate lien on the Premises,
Mortgagee may release the obligation of anyone at any time liable for any of the
indebtedness secured by this Mortgage or any part of the security held for said
indebtedness and may extend the time of payment or otherwise modify the terms of
the Reimbursement Agreement and/or this Mortgage without, as to the security or
the remainder thereof, in any way impairing or affecting the lien of this
Mortgage, or the priority of such lien, as security for the payment of said
indebtedness as it may be so extended or modified, over any subordinate lien;
and the holder of any subordinate lien shall have no right to terminate any
lease affecting the Premises whether or not such lease be subordinate to this
Mortgage; and Mortgagee may resort for the payment of the indebtedness secured
hereby to any other security therefor, held by Mortgagee in such order and
manner as Mortgagee.
17. Compliance with Laws, etc. Mortgagor shall comply with (a) all
-------------------------
present and future laws, regulations and other requirements of every
governmental body having jurisdiction over the Mortgaged Property or the use or
occupation of the improvements thereon, and (b) all terms, covenants and
conditions of all instruments of record affecting the Mortgaged Property,
noncompliance with which may affect the security of this Mortgage or impose any
duty or obligation upon Mortgagor or Mortgagee.
18. Partial Foreclosure. Mortgagee may, at its option, foreclose this
-------------------
Mortgage for any portion of the debt or any other sums secured thereby which are
then due and payable, subject to the continuing lien of this Mortgage for the
balance not then due, but nothing in this paragraph contained shall impair or
affect any right or remedy which Mortgagee might now or hereafter have, were it
not for this paragraph, but the right given by this paragraph shall be in
addition to any others which Mortgagee may have hereunder.
19. Marshalling. Except as hereinafter provided, Mortgagee shall not
-----------
be compelled to release, or be prevented from foreclosing or enforcing this
Mortgage upon all or any part of the Mortgaged Property, unless the entire
indebtedness and all items hereby secured shall be paid in lawful money as
aforesaid; and shall not be required to accept any part or parts of the
Mortgaged Property, as distinguished from the entire whole thereof, as payment
of or upon the said indebtedness to the extent of the value of such part or
parts; and shall not be compelled to accept or allow any apportionment of the
said indebtedness to or among any separate parts of the Mortgaged Property. In
case of a foreclosure sale, the Mortgaged Property may be sold in one parcel and
as an entirety or in such parcels, manner or order as Mortgagee in its sole
discretion may elect.
20. Rights and Remedies Cumulative. To the extent permitted by law,
------------------------------
the rights and remedies provided for in this Mortgage, or which Mortgagee may
have otherwise, at law or in equity (including, but not limited to, the right to
damages by reason of the failure of Mortgagor to keep, observe and perform any
of the covenants or agreements contained in this Mortgage), shall be distinct,
separate and cumulative, and shall not be deemed to be inconsistent with each
other, and none of them, whether or not exercised by Mortgagee, shall
-11-
<PAGE>
be deemed to be in exclusion of any other, and any two or more of all such
rights and remedies may be exercised at the same time. Further, Mortgagee may
resort for the payment of the indebtedness secured hereby to its several
securities therefor in such order or manner as it may think fit.
If Mortgagor has given Mortgagee one or more mortgages other than this
Mortgage with respect to the Mortgaged Property or any portion thereof, then all
such mortgages, and all rights and remedies provided for in all such mortgages
shall remain distinct and separate and none of them shall merge or be merged
with this Mortgage or any other mortgages.
Without in any way limiting the generality of the foregoing, Mortgagee
shall have the right from time to time to take action to recover any sums,
whether interest, principal or any installment of either, or any other sums
required to be paid under the terms of this Mortgage or the Reimbursement
Agreement, as the same become due, without regard to whether or not the
principal sums secured or any other sums secured hereby shall be due, and
without prejudice to the right of Mortgagee thereafter to bring an action of
foreclosure, or any other action, for a default or defaults by Mortgagor
existing at the time such earlier action was commenced.
21. Foreclosure Expenses. If this Mortgage shall be foreclosed, there
--------------------
shall be included to the extent permitted by law in the computation of the
indebtedness secured hereby, the amount of a reasonable fee for the services of
the attorneys retained by Mortgagee in the foreclosure action or proceeding, as
well as any and all disbursements, costs and other expenses incurred by
Mortgagee in connection with such foreclosure action or proceeding.
22. Future Laws Affecting Mortgages. In the event of the passage,
-------------------------------
after the date of this Mortgage, of any law, federal, state or local, or in the
event of the rendition of a decision of any court of competent jurisdiction,
imposing upon Mortgagee the taxes, charges or assessments previously paid by
Mortgagor, or changing in any way the laws for the taxation of mortgages or
indebtedness secured by mortgages, or imposing a tax, directly or indirectly, on
this Mortgage or the Reimbursement Agreement, or changing the manner of the
collection of any such taxes, charges or assessments, so as to affect this
Mortgage or lessen the net income on the indebtedness secured by this Mortgage
or upon the rendition of any court of competent jurisdiction of a decision that
any undertaking by Mortgagor as in this paragraph or elsewhere in this Mortgage
provided, is legally inoperative, then Mortgagee shall have the right, at its
option, to give sixty (60) days written notice to Mortgagor requiring the
payment of the mortgage debt, and the mortgage debt shall become due and payable
and collectible, at the expiration of said sixty (60) days; provided, however,
said option shall be unavailing and the Reimbursement Agreement and this
Mortgage shall remain in effect as though said law had not been enacted or
decision rendered, if under such law or decision Mortgagor lawfully may pay any
such tax, charge or assessment to or for Mortgagee and does in fact pay same
when payable and any and all security and collateral granted by Mortgagor to
Mortgagee under this Mortgage and the Financing Agreements, hereinafter defined,
is not impaired by said law or decision.
-12-
<PAGE>
23. Reliance on Documents, Etc. Mortgagee, in making any payment
--------------------------
herein authorized in the place and stead of Mortgagor which (a) relates to
taxes, assessments, water rates, sewer use and rentals and other governmental or
municipal charges, fines, impositions or liens asserted against the Mortgaged
Property, may do so according to any bill, statement or estimate procured from
the appropriate public office without inquiry into the accuracy thereof or into
the validity of any tax, assessment, sale, forfeiture, tax lien or title or
claim thereof; or (b) relates to insurance premiums may do so according to any
notice, bill, statement or estimate procured from the appropriate insurer
without inquiry into the accuracy or validity thereof; or (c) relates to the
expense of repairs or replacement of any buildings' improvements, Fixtures or
any other Mortgaged Property; or (d) otherwise relates to any other purpose not
specifically enumerated in this Article, may do so whenever, in its judgment and
discretion, such payment shall seem necessary or desirable to protect the full
security intended to be created by this Mortgage, and provided further that in
connection with any such payment, Mortgagee, at its option, may and is hereby
authorized to obtain a continuation report of title prepared by a title
insurance company, the costs and expenses of which shall be repayable by
Mortgagor without demand and shall be secured hereby.
24. Event(s) of Default and Remedies. Upon the occurrence of any one
--------------------------------
or more Events of Default under the Reimbursement Agreement, or upon the
occurrence of any event of default or the commencement of any foreclosure
proceedings under any other mortgage lien affecting the Mortgaged Property
(each called an "Event of Default" and more than one herein called "Events of
Default"), (a) the whole of the principal sums due under the Reimbursement
Agreement, interest accrued thereon, and any and all indebtedness secured
hereby, shall become due and payable in full pursuant to the terms of the
Reimbursement Agreement, at the option of Mortgagee; (b) Mortgagee may, at its
option, exercise its Statutory Power of Sale pursuant to M.G.L.A. Ch. 183,
Section 21, as amended, which is hereby incorporated herein by reference in its
entirety as if set forth herein; and (c) Mortgagee may, at its option, commence
or take any action permitted under the laws of the Commonwealth of Massachusetts
or the United States of America, including without limitation the taking of
possession of the Mortgaged Property as Mortgagee in possession pursuant to
Massachusetts laws. In the event of a sale of the Mortgaged Property, Mortgagee
shall receive the proceeds of such sale or sales, and from such proceeds shall
retain all sums hereby secured, whether then due or to fall due thereafter, or
the part thereof then remaining unpaid, and also the interest then due on the
same, including, without limitations, all expenses incident to such sale or
sales, for making deeds hereunder, for reasonable fees of counsel and attorneys,
and, also without limitation, all costs or expenses incurred in the exercise or
defense of the rights and powers of Mortgagee hereunder and all taxes, water and
sewer rates, assessments, premiums for insurance and expenses incurred in
repairing or preserving the Premises, either theretofore paid by Mortgagee or
then remaining unpaid, rendering and paying the surplus of said proceeds of
sale, if any there be, over and above the amounts so to be retained as
aforesaid, together with a true and particular account of such sale or sales,
expenses and charges to Mortgagor, which sale or sales, expenses and charges to
Mortgagor, which sale or sales shall forever be a perpetual bar, both in law and
equity, against the Mortgagor and all persons claiming or to claim the Mortgaged
Property so sold by, from or under Mortgagor. Upon the occurrence of an Event
of Default and written request from
-13-
<PAGE>
Mortgagee, Mortgagor shall pay to Mortgagee monthly, in addition to all sums
called for by the Reimbursement Agreement, such sums as shall, from time to
time, in the estimation of Mortgagee, be equal to one-twelfth of the annual real
estate taxes to be assessed upon the Mortgaged Property and/or premiums to be
paid for insurance required hereunder. Such sums shall be applied by Mortgagee
to the payment of such taxes and/or insurance premiums, but if default be made
in any payment required by the Reimbursement Agreement, such sums or any part
thereof may, at the option of Mortgagee, be applied against the indebtedness
hereby secured.
25. Miscellaneous Provisions.
------------------------
(a) In the event of a foreclosure of this Mortgage, the purchaser of
the Mortgaged Property, if Mortgagee so consents, shall succeed to all the
rights of Mortgagor to the Mortgaged Property, including, without limitation,
any right to unearned premiums, in and to all policies of insurance assigned and
delivered to Mortgagee pursuant to the provisions hereof.
(b) A demand upon or notice to Mortgagor or Mortgagee hereunder shall
be sufficient notice and shall be effective if deposited in the United States
mail, certified, return receipt requested, postage prepaid, addressed as
follows:
(i) If to Mortgagor, to: AFC Cable Systems, Inc.
50 Kennedy Plaza
Providence, Rhode Island 02903
Attn: Ralph R. Papitto, Chairman,
with a copy to: Jonathan Bell, Esq.
Hinckley, Allen & Snyder
1500 Fleet Center
Providence, Rhode Island 02903;
(ii) If to Mortgagee, to: Fleet National Bank
111 Westminster Street
Providence, Rhode Island 02903
Attn: Douglas E. Scala, Vice President,
with a copy to: David M. Gilden, Esq.
Partridge, Snow & Hahn
180 South Main Street
Providence, Rhode Island 02903.
Either party may change its address for such notice purposes upon ten (10) days'
advance written notice given as aforesaid.
-14-
<PAGE>
(c) Mortgagor is hereby notified that Mortgagor has the right of free
choice in the selection of the agent and insurer through or by which insurance
required in connection with the Reimbursement Agreement is to be placed.
(d) Notwithstanding anything in this Mortgage or any other instrument
to the contrary, Mortgagor shall not be required to pay interest on the
indebtedness secured by this Mortgage in excess of the maximum interest
permissible under applicable law. In the event Mortgagor shall pay or be
charged in an amount in excess of said maximum permitted interest, such excess
amount shall be applied to reduce the principal balance of the indebtedness
secured by this Mortgage and not to payment of interest.
(e) Mortgagor shall observe, perform or comply with all obligations,
conditions and covenants contained herein and in the Financing Agreements. Any
and all provisions of the Financing Agreements are hereby made a part hereof to
the same extent as if fully set forth herein. The term "Financing Agreements"
as used herein shall mean and refer to any and all agreements evidencing,
securing or relating in any way to the past, present or future indebtedness or
obligations or liabilities of every kind, nature and description of Mortgagor
owing to Mortgagee, including, but not limited to, the Reimbursement Agreement,
this Mortgage, the Letter of Credit, and such other agreements as are executed
by Mortgagor on this date or in the future, and any modification,
supplementation or amendment thereof made from time to time.
(f) The liens and other rights and interests in and relative to any of
the real or personal property of Mortgagor now or hereafter granted to Mortgagee
by Mortgagor by or in any instrument or agreement, including but not limited to
the Financing Agreements, shall serve as security for any and all liabilities of
Mortgagor to Mortgagee, including but not limited to the liabilities described
in the Reimbursement Agreement, and, for the repayment thereof, Mortgagee may
resort to any security held by it in such order and manner as it may elect.
(g) Mortgagor shall immediately give prompt notice to Mortgagee of the
occurrence of any of the following events:
(i) a fire or other casualty causing damage to the Mortgaged
Property;
(ii) receipt of notice of eminent domain proceedings or condemnation
of the Mortgaged Property;
(iii) receipt of notice from any governmental authority relating to
the structure, use or occupancy of or appearance of hazardous
substances upon the Mortgaged Property or any real property
adjacent to the Mortgaged Property;
(iv) commencement of any litigation affecting the Mortgaged Property;
-15-
<PAGE>
(v) any contract or agreement with respect to any sale or other
transfer of any part of the Mortgaged Property;
(vi) commencement of any foreclosure proceedings, including by the
giving of notice thereof, affecting the Mortgaged Property.
(h) Wherever used in this Mortgage, unless the context clearly
indicates a contrary intent or unless otherwise specifically provided herein,
the word "Mortgagor" shall include "any subsequent owner or owners of the
Mortgaged Property or any part thereof", the word "Mortgagee" shall include "any
subsequent holder or holders of this Mortgage", the term "mortgage debt", shall
mean "any and all indebtedness of Mortgagor to Mortgagee as evidenced by the
Reimbursement Agreement and/or secured by this Mortgage" and the word "person"
shall include "an individual, corporation, partnership or unincorporated
association", and plural or singular shall include each other, and pronouns in
any gender shall be construed as masculines, feminine or neuter as the context
requires.
(i) "Hazardous substance" as used herein shall mean "solid waste" or
"hazardous waste," "hazardous material," "hazardous substance," and "oil" as
defined in the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation and Liability Act, the Hazardous Material
Transportation Act, the Federal Water Pollution Control Act and the Superfund
Amendments and Reauthorization Act of 1986 and any similar or successor federal
law or applicable statute and local statutes and ordinances and any rules,
regulations and policies promulgated thereunder, as any of such federal, state
and local statutes, ordinances and regulations may be amended from time to time.
(j) If any term or provision of this Mortgage or the application
thereof to any person or circumstance, shall to any extent be invalid or
unenforceable, the remainder of this Mortgage, or the application of such term
or provision to persons or circumstances other than those as to which it is
invalid or unenforceable, shall not be affected thereby, and each term and
provision of this Mortgage shall be valid and enforceable to the fullest extent
permitted by law.
(k) The captions or section headings used in this Mortgage are for
convenience only and of no substance or significance, and shall not be used to
interpret, modify or affect in any way the covenants and agreements herein
contained.
(l) This Mortgage shall be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts. All grants, covenants,
agreements and other provisions herein contained shall run with the land, and
shall be binding upon and inure to the benefit of the respective successors and
assigns of Mortgagor and Mortgagee.
26. Mortgage Condition. If all of the obligations of Mortgagor as set
------------------
forth herein, in the Reimbursement Agreement, in the Letter of Credit and in any
additional indebtedness secured hereby, and any extensions or renewals thereof,
shall be paid and satisfied according to their tenor, and if all agreements and
provisions contained in the
-16-
<PAGE>
Financing Agreements are fully kept and performed, then this Mortgage shall,
upon payment or performance of the last such obligation, become null and void;
otherwise to remain in full force and effect.
27. Waiver of Jury Trial; Service of Process. In the event that
----------------------------------------
Mortgagee brings any action or proceeding in connection herewith in any court of
record of the State of Rhode Island, Commonwealth of Massachusetts, or the
United States for any district located in any of the foregoing states, the
Mortgagor hereby irrevocably consents to and confers personal jurisdiction of
such court over Mortgagor by such court. In any such action or proceeding,
Mortgagor hereby waives personal service of any summons, complaint or other
process and agrees that service thereof may be made upon Mortgagor by mailing a
copy of such summons, complaint or other process by United States certified
mail, return receipt requested, postage prepaid, to the address set forth in
Section 25(b) hereof. MORTGAGOR HEREBY WAIVES TRIAL BY JURY IN ANY LITIGATION
IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF THIS
MORTGAGE OR ANY INSTRUMENT OR DOCUMENT DELIVERED IN CONNECTION HEREWITH, OR THE
VALIDITY, PROTECTION, INTERPRETATION, COLLECTION OR ENFORCEMENT THEREOF, OR ANY
OTHER CLAIM OR DISPUTE HOWSOEVER ARISING BETWEEN MORTGAGOR AND MORTGAGEE.
-17-
<PAGE>
IN WITNESS WHEREOF, Mortgagor and Mortgagee have executed this
Mortgage, by their duly authorized representatives, as of the 1st day of July,
1996.
Witnessed by: Mortgagor:
AFC CABLE SYSTEMS, INC.
By:
- -------------------------- ----------------------------------
Witnessed by: Mortgagee:
FLEET NATIONAL BANK
By:
- -------------------------- ----------------------------------
Douglas E. Scala, Vice President
Witnessed by:
By:
- -------------------------- ----------------------------------
-18-
<PAGE>
STATE OF RHODE ISLAND
COUNTY OF PROVIDENCE
In Providence, in said County, on the _______ day of _______, 1996,
before me personally appeared the above-named _______________________________,
to me known and known by me to be a _____________________________ of, and the
person executing these presents on behalf of, AFC Cable Systems, Inc., the party
executing the foregoing instrument, and he acknowledged said instrument by him
so executed to be his free act and deed as such officer, and the free act and
deed of said AFC Cable Systems, Inc.
--------------------------------------
Notary Public
Print Name:
My Commission Expires:
----------------
STATE OF RHODE ISLAND
COUNTY OF PROVIDENCE
In Providence, in said County, on the _______ day of ________, 1996,
before me personally appeared the above-named Douglas E. Scala, to me known and
known by me to be a Vice President of, and the person executing these presents
on behalf of, Fleet National Bank, the party executing the foregoing instrument,
and he acknowledged said instrument by him so executed to be his free act and
deed as such Vice President, and the free act and deed of said Fleet National
Bank.
--------------------------------------
Notary Public
Print Name:
My Commission Expires:
----------------
STATE OF RHODE ISLAND
COUNTY OF PROVIDENCE
In Providence, in said County, on the _______ day of _________, 1996,
before me personally appeared the above-named ________________________________,
to me known and known by me to be a _______________________ of, and the person
executing these presents on behalf of, Fleet National Bank, the party executing
the foregoing instrument, and he acknowledged said instrument by him so executed
to be his free act and deed as such officer, and the free act and deed of said
Fleet National Bank.
--------------------------------------
Notary Public
Print Name:
My Commission Expires:
----------------
-19-
<PAGE>
EXHIBIT A
---------
Legal Description
-20-
<PAGE>
218870
EXHIBIT 10.5
PLEDGE AGREEMENT
----------------
This PLEDGE AGREEMENT (this "Agreement"), is made as of the 1st day of
July, 1996 by and between AFC CABLE SYSTEMS, INC., a Delaware corporation (the
"Company"), and FLEET NATIONAL BANK, a national banking association organized
and existing under the laws of the United States of America having an office at
111 Westminster Street, Providence, Rhode Island 02903 (the "Bank"), in the
following circumstances:
A. The Massachusetts Industrial Finance Agency (the "Issuer") has
agreed with the Company to issue its $3,570,000 Industrial Revenue Bonds (AFC
Cable Systems, Inc. Issue - Series 1996) (the "Bonds") under a certain Loan and
Trust Agreement dated as of July 1, 1996 (the "Indenture"), between the Issuer
and Fleet National Bank, as Trustee (the "Trustee").
B. The Bank has agreed to issue its irrevocable, transferable,
direct-pay letter of credit (the "Letter of Credit") pursuant to the terms of a
Reimbursement Agreement dated as of July 1, 1996 between the Company and the
Bank (the "Reimbursement Agreement").
C. In connection with the issuance of the Bonds, the Company has
agreed to enter into the Reimbursement Agreement in order to induce the Bank to
issue the Letter of Credit thereunder, which Letter of Credit may be used, inter
-----
alia, to pay the Purchase Price of Bonds which are not successfully remarketed
- ----
in the event that a Bondowner (as defined in the Indenture) elects to tender any
Bonds or in the event that such Bonds are subject to mandatory tender.
D. It is a condition precedent to the obligation of the Bank to issue
its Letter of Credit that the Company shall have entered into this Agreement
with the Bank.
NOW, THEREFORE, in consideration of the premises and in order to induce
the Bank to issue the Letter of Credit pursuant to the Reimbursement Agreement,
and for other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto agree as follows:
Section 1. Defined Terms. Unless otherwise defined herein, terms
-------------
defined in the Reimbursement Agreement shall have such defined meanings when
used herein.
Section 2. Pledge. The Company hereby pledges, assigns, hypothecates,
------
transfers, and delivers to the Bank all of its right, title and interest to all
Bonds which may from time to time be (a) delivered to or held on behalf of the
Trustee, (b) delivered to or held on behalf of the Remarketing Agent, as defined
in the Indenture, and (c) delivered to or held on behalf of the Bank, in any
such event in connection with a drawing by the Trustee under the Letter of
Credit for an A-Drawing, a B-Drawing or a C-Drawing (all as defined in the
Letter of Credit) to purchase Bonds which have not been successfully remarketed
by the Remarketing Agent (the "Purchased Bonds"), and hereby grants to the Bank
a first lien on,
<PAGE>
and security interest in, all right, title and interest in and to the Purchased
Bonds and all proceeds thereof, as collateral security for the complete payment
when due of all amounts due the Bank from the Company under the Reimbursement
Agreement and interest on such amounts as set forth therein and all obligations
due and owing the Bank under any of the other Related Documents (collectively,
the "Obligations").
Section 3. Registration of Bonds.
---------------------
(a) Purchased Bonds shall be registered in the name of the Bank. The
Bank may, but shall not be obligated to, register Purchased Bonds in the name of
its designee, as pledgee, at any time and from time to time. Purchased Bonds
held by or on behalf of the Bank shall not be entitled to the benefits of, and
shall not be presented for payment under, the Letter of Credit.
(b) If, while this Agreement is in effect, the Company shall become
entitled to receive or shall receive any payment, including, without limitation,
any payment of principal, premium, interest or proceeds of sale with respect to
the Purchased Bonds, such payment shall be subject to this Agreement, and the
Company hereby irrevocable directs the Trustee to make any such payments
directly to the Bank and, in the event any such payments are received by the
Company, the Company agrees to accept the same as the Bank's agent and to hold
the same in trust on behalf of the Bank and to deliver the same forthwith to the
Bank. All sums of money so paid with respect to the Purchased Bonds which are
received by the Company and paid to the Bank, and all such amounts which shall
be paid directly to the Bank by the Trustee, shall be credited against the
corresponding reimbursement obligations of the Company under the Reimbursement
Agreement.
(c) During such time as Bonds are pledged to the Bank under the terms
of this agreement, the Bank shall be entitled to exercise all of the rights of
an owner of Bonds with respect to voting, consenting and directing the Trustee
as if the Bank were the owner of such Bonds, and the Company hereby grants and
assigns to the Bank all such rights.
Section 4. Collateral. All Purchased Bonds at any time pledged
----------
hereunder and all income therefrom and proceeds thereof, are herein collectively
referred to as the "Collateral."
Section 5. Release of Bonds. Simultaneously with the receipt by the
----------------
Bank of the proceeds of the sale of any Purchased Bonds in an amount equal to
the principal amount of Purchased Bonds remarketed by the Remarketing Agent
pursuant to the Remarketing Agreement (both as defined in the Indenture),
together with any interest accrued on account of the A-Drawing, B-Drawing or C-
Drawing, Purchased Bonds in the principal amount equal to the principal amount
received by the Bank from said sale shall be released from the lien of this
Agreement and shall be delivered to the Remarketing Agent, and such payment
shall increase
2
<PAGE>
the amount payable on account of the A-Drawing, B-Drawing or C-Drawing, as the
case may be.
Section 6. Rights of the Bank. The Bank shall not be liable for
------------------
failure to collect or realize upon the Obligations or any collateral security or
guarantee therefor, or any part thereof, or for any delay in so doing nor shall
it be under any obligation to take any action whatsoever with regard thereto.
Except as otherwise provided in the Indenture, the Bank shall be treated as the
owner of all Purchased Bonds for purposes of giving directions, consents and
waivers and taking other actions, all upon such terms and conditions as it may
determine all without liability, provided, however, the Bank shall have no duty
to exercise any of the aforesaid rights, privileges or options and shall not be
responsible for any failure to do so or delay in so doing.
Section 7. Remedies. If an Event of Default has occurred and is
--------
continuing, and any portion of the Obligations has been declared due and
payable, the Bank, without demand of performance or other demand, advertisement
or notice of any kind (except the notice specified below of the time and place
of public or private sale) to or upon the Company or any other Person (all and
each of which demands, advertisements and/or notices are hereby expressly
waived), may forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, assign, give option
or options to purchase, contract to sell or otherwise dispose of and deliver all
or any part of the Collateral, in such manner as the Bank may elect, including a
purchase for its own account, upon such terms and conditions and at such price
as it may deem advisable. All Purchased Bonds so sold shall be free of any
right or equity of redemption in the Company, which right or equity is hereby
expressly waived or released. The Bank shall apply the net proceeds of any such
realization of sale, after deducting all reasonable costs and expenses incurred
in connection therewith including reasonable attorneys' fees, to the payment in
whole or in part, of the Obligations in such order as the Bank may elect. The
Company shall remain liable for any deficiency remaining unpaid after such
application, and the Bank shall be required to account to the Company for any
surplus only after so applying such net proceeds and after the payment by the
Bank of any other amount required by any provision of law. The Bank shall give
ten (10) days' notice of the time and place of any public sale or of the time
after which a private sale or other intended disposition of the Purchased Bonds
is to take place and such notice shall constitute reasonable notification
thereof. In addition to the rights and remedies granted to it in this Agreement
and in any other instrument agreement securing, evidencing or relating to any of
the Obligations, the Bank shall have all the rights and remedies of a secured
party under the Uniform Commercial Code of the State of Rhode Island.
Section 8. Representations, Warranties and Covenants of the Company.
--------------------------------------------------------
The Company represents and warrants that:
3
<PAGE>
(a) On the date of delivery to the Bank of any Purchased Bonds
described herein, neither the Issuer, the Remarketing Agent, the Trustee nor any
other Person will have any right, title or interest in and to the Purchased
Bonds:
(b) It has, and on the date of delivery to the Bank of any Purchased
Bonds will have, full capacity and legal right to pledge all of its rights,
title and interest in and to the Purchased Bonds pursuant to this Agreement;
(c) This Agreement has been duly authorized, executed and delivered by
the Company and constitutes a legal, valid and binding obligation of the Company
enforceable in accordance with its terms;
(d) No consent of any other party including, without limitation,
creditors of the Company and no consent, license, permit, approval or
authorization of, exemption by, notice or report to, or registration, filing or
declaration with, any governmental authority is required to be obtained by the
Company in connection with the execution, delivery or performance of this
Agreement;
(e) The execution, delivery or performance of this Agreement will not
violate the Company's Articles of Incorporation or bylaws or any provision of
any applicable law or regulation or of any order, judgment, writ, award or
decree of any court, arbitrator, or Governmental Person, or of any mortgage,
indenture, lease, contract, or other agreement, instrument undertaking to which
the Company is a party or by which it is bounded or upon any of its assets and
will not result in the creation or imposition of any lien, charge or encumbrance
on or security interest in any of the assets of the Company except as
contemplated by this Agreement which would have a material and adverse effect on
the security of the Bank;
(f) There is no pending action or proceeding before any court,
governmental agency or arbitrator against or directly involving the Company and,
to the best of the Company's knowledge, there is no threatened action on
materially proceeding affecting the Company before any court, governmental
agency or arbitrator which, in any case, is likely naturally to impair the
Company's ability to perform its obligations under this Agreement;
(g) Upon the delivery to the Bank of Purchased Bonds (or notice to the
appropriate financial intermediaries in the case of book-entry securities), the
pledge of such Purchased Bonds under this Agreement will create a valid first
lien on and a first perfected security interest in all right, title and interest
of the Company in and to such Purchased Bonds, and the proceeds thereof, subject
to no prior pledge, lien, mortgage, hypothecation, security interest, charge,
option or encumbrance or to any agreement purporting to grant to any third party
a security interest in the property or assets of the Company which would include
the Purchased Bonds; and
4
<PAGE>
(h) The Company covenants and agrees that it will defend the Bank's
right, title and security interest in and to the Purchased Bonds and the
proceeds thereof against the claims and demands of all Persons whomsoever, and
covenants and agrees that it will have like title and right to pledge any other
Collateral at any time hereafter pledged to the Bank as Collateral hereunder and
will likewise defend the Bank's right thereto and security interest therein.
Section 9. No Disposition, etc. Without prior written consent of the
-------------------
Bank, the Company agrees that it will not sell, assign, transfer, exchange, or
otherwise dispose of, or grant any option with respect to, the Collateral, nor
will it create, incur or permit to exist any pledge, lien, mortgage,
hypothecation, security interest, charge, option or any other encumbrance with
respect to any of the Collateral, or any interest therein, or any proceeds
thereof, except for the lien and security interest provided for by this
Agreement.
Section 10. Sale of Collateral.
------------------
(a) The Company recognizes that the Bank may be unable to effect a
public sale of any or all of the Purchased Bonds by reason of certain
prohibitions contained in applicable state and federal securities and banking
laws, rules and regulations and in the Indenture, but may be compelled to resort
to one or more private sales thereof to a restricted group of purchasers who
will be obligated to agree, among other things, to acquire such securities for
their own account for investment and not with a view to the distribution or
resale thereof. The Company acknowledges and agrees that any such private sale
may result in prices and other terms less favorable to the seller than if such
sale were a public sale and, notwithstanding such circumstances, agrees that any
such private sale shall be deemed to have been made in a commercially reasonable
manner. The Bank shall be under no obligation to delay a sale of any of the
Purchased Bonds for the period of time necessary to permit the Issuer to
register such securities for public sale under any applicable state or federal
securities laws even if the Issuer would agree to do so.
(b) The Company further agrees to do or cause to be done all such
other acts and things as may be necessary to make such sale or sales of any
portion or all of the Purchased Bonds valid and binding and in compliance with
any and all applicable laws, regulations, order, writs, injunctions, decrees or
awards of any and all courts, arbitrators or governmental instrumentalities
having jurisdiction over any such sale or sales, all at the Company's expense.
The Company further agrees that a breach of any of the covenants contained in
this Section 10 will cause irreparable injury to the Bank, the Bank has no
----------
adequate remedy at law in respect of such breach and, as a consequence, agrees
that each and every covenant contained in this paragraph shall be specifically
enforceable against the Company and the Company hereby waives and agrees not to
assert any defenses against an action for specific performance of such covenants
except for a defense that no Event of Default has occurred under the
Reimbursement Agreement.
5
<PAGE>
Section 11. Further Assurances. The Company agrees that at any time
------------------
and from time to time upon the written request of the Bank, the Company will
execute and deliver such further documents and do such further acts and things
as the Bank may reasonably request in order to effect the purposes of this
Agreement.
Section 12. Notices. All notices provided for hereunder shall be in
-------
writing and shall be mailed or delivered to the respective parties hereto as
follows:
To the Company:
--------------
AFC Cable Systems, Inc.
50 Kennedy Plaza
Providence, Rhode Island 02903
Attn: Ralph R. Papitto, Chairman
with a copy to:
--------------
Hinckley, Allen & Snyder
1500 Fleet Center
Providence, Rhode Island 02903;
Attention: Jonathan Bell
To the Bank:
-----------
Fleet National Bank
111 Westminster Street
Providence, Rhode Island 02903
Attn: Douglas E. Scala, Vice President
with a copy to:
--------------
Partridge, Snow & Hahn
180 South Main Street
Providence, Rhode Island 02903
Attention: David M. Gilden
or as to each party at such other address as shall be designated by such party
in a written notice to each other party. All such notices shall be in writing
and shall be deemed given when (A) sent to the applicable address stated above
by registered or certified mail, postage prepaid, return receipt requested, or
by such other means (including, but not limited to, personal delivery) as shall
provided the sender with documentary evidence of such delivery, (B) delivery is
refused by the addressee as evidenced by the affidavit of the person who
attempted to effect such delivery.
6
<PAGE>
Section 13. Severability. Any provision of this Agreement which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 14. No Waiver; Cumulative Remedies. The Bank shall not by any
------------------------------
act, delay, omission or otherwise be deemed to have waived any of its rights or
remedies hereunder and no waiver shall be valid unless in writing, signed by the
Bank, and then only to the extent therein set forth. A waiver by the Bank of
any right or remedy hereunder on any one occasion shall not be construed as a
bar to any aright or remedy which the Bank would otherwise have on any future
occasion. No failure to exercise or any delay in exercising on the part of the
Bank any right, power or privilege hereunder, shall operate as a waiver thereof,
nor shall any single or partial exercise of any right, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided are
cumulative and may be exercised singly or herein provided concurrently, and are
in addition to and are not exclusive of any rights or remedies provided by the
other Related Documents, or by law or in equity.
Section 15. Waivers, Amendments; Applicable Law. None of the terms or
-----------------------------------
provisions of this Agreement may be waived, altered, modified or amended except
by an instrument in writing, duly executed by the Company and the Bank. This
Agreement shall be binding upon, and shall inure to the benefit of the parties
hereto and their respective successors and assigns. This Agreement shall be
governed by, and be construed and interpreted in accordance with, the laws of
the State of Rhode Island.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their proper and duly authorized by officers as of the day and year
first above written.
AFC CABLE SYSTEMS, INC.
[SIGNATURE APPEARS HERE] By: /s/ Raymond H. Keller
- ------------------------------ ---------------------------------------
Raymond H. Keller, Vice President and
Chief Financial Officer
FLEET NATIONAL BANK
[SIGNATURE APPEARS HERE] By: /s/ Douglas E. Scala
- ------------------------------ ---------------------------------------
Douglas E. Scala, Vice President
218870_3
7
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<PAGE>
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<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 9-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1995
<PERIOD-START> JAN-01-1996 JAN-01-1995
<PERIOD-END> SEP-28-1996 SEP-30-1995
<CASH> 2,961 2,090
<SECURITIES> 28,733 25,524
<RECEIVABLES> 28,110 22,940
<ALLOWANCES> 2,168 2,365
<INVENTORY> 18,269 19,362
<CURRENT-ASSETS> 77,895 69,201
<PP&E> 25,157 20,443
<DEPRECIATION> 8,998 7,331
<TOTAL-ASSETS> 96,518 84,784
<CURRENT-LIABILITIES> 21,429 21,102
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0 0
0 0
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<CGS> 86,880 78,155
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<LOSS-PROVISION> 154 43
<INTEREST-EXPENSE> 633 504
<INCOME-PRETAX> 12,776 10,090
<INCOME-TAX> 4,886 3,734
<INCOME-CONTINUING> 7,890 6,356
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<NET-INCOME> 7,890 6,356
<EPS-PRIMARY> 1.06 .89
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