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BOND AND LOAN AGREEMENT
dated as of December 1, 2012
among
CALIFORNIA MUNICIPAL FINANCE AUTHORITY,
BOSTON PRIVATE BA~lK & TRUST COMPANY,
and
THE NUEVA SCHOOL
Up to $40,000,000 Revenue Bond (The Nueva School Project),
Series 20 12A
The rights of the California Municipal Finance Authority hereunder, other than Unassigned Rights (as defined herein), have been assigned to the Purchaser (as defined herein).
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS ............. : ............................................................................................. 2
Section 1.1 Section 1.2 Section 1.3 Section 1.4 Section 1.5 Section 1.6
Definitions .......................................................................................................... 2 Interpretation ...................................................................................................... 8 Computation of Time Periods ............................................................................ 8 Construction ........................................................................................................ 8 Accounting Terms and Determinations ............................................................. 9 Incorporation by Reference ................................................................................ 9
ARTICLE II REPRESENTATIONS AND WARRANTIES ........................................................ 9
Section 2.1 Section 2.2 Section 2.3
Representations and Warranties ofissuer .......................................................... 9 Representations and Warranties of Corporation .............................................. 1 0 Representations and Warranties ofPurchaser .................................................. 12
ARTICLE III ISSUANCE AND SALE OF BOND; CONSTRUCTION FUND ....................... 14
Section 3.1 Section 3.2 Section 3.3 Section 3.4 Section 3.5 Section 3.6 Section 3.7 Section 3.8 Section 3.9 Section 3.10 Section 3.11 Section 3.12 Section 3.13
Terms of Bond; Conditions to Purchase .......................................................... 14 Deposits to and Disbursements from the Construction Fund .......................... 17 Rebate Fund ..................................................................................................... 20 Restriction on Transfer of Bond ........................................................... : .......... 20 Optional Redemption ....................................................................................... 21 Partial Redemption ........................................................................................... 21 Default Rate/Taxability .................................................................................... 21 Maximum Interest Rate ....... : ............................................................................ 22 Limited Obligation; Limited Liability ............................................................. 23 Further Assurances ........................................................................................... 24 Tax Exemption ................................................................................................. 24 Performance of Covenants; Issuer .... , .............................................................. 24 Provisions for Payment of Expenses ................................................................ 25
ARTICLE IV PAYMENTS BY THE CORPORATION ............................................................. 25
Section 4.1 Section 4.2 Section 4.3 Section 4.4 Section 4.5
Loan Repayment .............................................................................................. 25 Prepayments ..................................................................................................... 25 Additional Payments to Issuer ......................................................................... 25 Additional Payments to Purchaser ................................................................... 27 Unconditional Obligation ................................................................................. 29
ARTICLE V COMPLETION CERTIFICATE ............................................................................ 30
Section 5.1 Section 5.2 Section 5.3
Completion of Project ...................................................................................... 30 Obligation to Continue Payments .................................................................... 32 Insufficiency of Net Proceeds .......................................................................... 32
ARTICLE VI CORPORATION COVENANTS ......................................................................... 32
Section 6.1 ·. Financing Statements ....................................................................................... 32
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Section 6.2 Corporation's Obligation with Respect to Exclusion of Interest Paid on the Bond ........................................................................................................... 32
Section 6.3 Maintenance of Corporate Existence and Tax Status ...................................... 32 Section 6.4 Merger; Dissolution of Corporation ................................................................. 33 Section 6.5 Operation, Sale, Lease or Sublease of the Financed Properties ....................... 34 Section 6.6 Taxes, Charges and Assessments ..................................................................... 34 Section 6.7 Compliance with Laws; Taxes and Assessments ............................................ .35 Section 6.8 Permitted Contests ........................................................................................... 35 Section 6.9 Reports ............................................................................................................ .35 Section 6.10 Use of the Project; Financed Properties .......................................................... .35 :Section 6;[ 1 ·· Maintenance-ofProperties :~ ... ;.;;:; .. : ...... :.: ............................ ;;:.: ......... : .... : ..... ~ . .36· Section 6.12 Covenants to Purchaser ................................................................................... .36
ARTICLE VII INDEMNIFICATION ........................................................................................ .36
Section 7.1 Indemnification ............................................................................................... .36
ARTICLE VIII ASSIGNMENT .................................................................................................. 37
Section 8.1 Section 8.2
Assignment by Corporation ............................................................................ .37 Assignment by Issuer ...................................................................................... .3 8
ARTICLE IX DEFAULTS AND REMEDIES ............................................................................ 38
Section 9.1 Section 9.2 Section 9.3 Section 9.4 Section 9.5 Section 9.6 Section 9.7
Events of Default ............................................................................................. 3 8 Acceleration ..................................................................................................... 39 Other Remedies ............................................................................................... .40 Waiver of Past Defaults .................................................................................. .40 Purchaser May File Proofs of Claim ............................................................... .40 Attorneys' Fees and Expenses ........................................................................ .40 No Remedy Exclusive ...................................................................................... 40
ARTICLE X MISCELLANEOUS ............................................................................................... 41
Section 10.1 Notices ............................................................................................................. 41 Section 10.2 Recordkeeping by Purchaser; Inspection by Issuer ......................................... 42 Section 10.3 Binding Effect ................................................................................................. .42 Section 10.4 Severability ...................................................................................................... 42 Section 10.5 Amendments ................................................................................................... .42 Section 10.6 Right of Corporation to Perform Issuer's Agreements ................................... .42 Section 10.7 Governing Law; Venue: .................................................................................. .42 Section 10.8 Captions; References to Sections .................................................................... .42 Section 10.9 Complete Agreement ...................................................................................... .42 Section 10.10 Terms of this Agreement; Discharge .............................................................. .42 Section 10.11 Counterparts .................................................................................................... .43 Section 10.12 Payments/Actions Due on Non Business Days .............................................. .43
EXHIBIT A FORMOFBOND ...................................................................................................... 1
EXHIBIT B DESCRIPTION OF PROJECT .................................................................................. 1
EXHIBIT C INVESTOR LETTER ................................................................................................ 1
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EXHIBIT D FORM OF REQUEST OF ADDITIONAL BOND PROCEEDS ............................. !
EXHIBIT E CONTINUING COVENANTS AGREEMENT ....................................................... .!
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This BOND AND LOAN AGREEMENT is dated as of December 1, 2012 (the or this "Bond and Loan Agreement" or "Agreement"), among the California Municipal Finance Authority (the "Issuer"), a joint exercise of powers Authority organized 1mder the laws of the State of California, Boston Private Bank & Trust Company, a trust company organized and existing under the laws of the Commonwealth of Massachusetts (the "Purchaser"), and The Nueva School, a California nonprofit corporation (the "Corporation").
WHEREAS, the Issuer was created pursuant to Chapter 5, Division 7, Title 1 of the Government Code of the State of California (commencing with Section 6500) (as amended from time to time, the "Act") for the purpose of, among other things, assisting the cities, counties and special districts which are its- members in conducting any--of their-respective-affairs, including, without limitation, financing and refinancing any facilities within their respective jurisdictions; and
WHEREAS, the Corporation has applied for the assistance of the Issuer in financing the acquisition, construction, improvement, renovation, furnishing and equipping of educational facilities, more fully described in Exhibit B hereto (the "Project"); and
WHEREAS, the Issuer has authorized the issuance of up to $40,000,000 of its Revenue Bond (The Nueva School Project), Series 2012A (together with the portions thereof, the "Bond") to finance a portion of the Costs of the Project and to pay Costs of Issuance in accordance with the Act (the "FinancingPurposes"); and
WHEREAS, the Issuer, the Corporation and the Purchaser desire to enter into this Agreement to specify the terms and conditions of the purchase of the Bond in portions (each, a "Bond Portion") by the Purchaser and of the loan of the proceeds derived from the sale of the Bond by the Issuer to the Corporation; and
WHEREAS, the Corporation's obligations to repay the loan derived from the sale of the Bond are evidenced by this Agreement pursuant to which the Corporation is required to make !mill payments sufficient to pay when due the principal of, premium, if any, and interest on, the Bond and to make additional payments as set forth herein; and
WHEREAS, the Issuer has determined that all acts and proceedings required by law necessary to constitute this Agreement the valid, legal and binding agreement for the uses and purposes herein set forth, in accordance with its terms, have been done and taken; and the execution and delivery of this Agreement have been in all respects duly authorized;
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Accordingly, the Issuer, the Corporation and the Purchaser hereby agree as follows:
ARTICLE I DEFINITIONS
Section 1.1 Definitions. For all purposes of this Agreement, unless the context clearly requires otherwise, the following terms shall have the following meanings.
"Additional Bond Proceeds" means each payment made by the Purchaser for each Bond Portion other than the Initial Bond Portion (not to exceed $40,000,000 in aggregate principal amount) in accordance with this Agreement.
"Additional Bond Proceeds Requesf' means each request for Additional Bond Proceeds submitted by the Corporation to the Purchaser in the form of Exhibit D hereto.
"Affiliate" means a corporation, partnership, association, joint venture, business trust, governmental entity or similar entity organized under the laws of any state that directly, or indirectly through one (1) or more intermediaries, Controls or is Controlled by, or is under common Control with, the Corporation or the Purchaser, as may be applicable .
• "Agreement Not to Encumber or Transfer Property" means the Agreement Not to
Encumber or Transfer Property (Hillsborough), between the Corporation and the Purchaser, dated.as of December 1, 2012.
"Assignment of Project Documents" means the Assignment of Project Documents, between Purchaser and the Borrower, dated as of December 1, 2012.
"Authorized OfficiaT' means: (a) in the case of the Issuer, any member of the Issuer's Board of Directors or any other person designated in a certificate by the Issuer to act on behalf of the Issuer; and (b) in the case of the Corporation, its Executive Director, Associate Head. of School, Chief Operating and Financial Officer or any other officer of the Corporation duly authorized by the Corporation.
"Bank Purchase Rate" means a rate of interest equal to 3.25% per year.
"Bond' means the up to $40,000,000 Revenue Bond (The Nueva School Project), Series 20 12A, issued pursuant to this Agreement.
"Bond Counsef' means the firm of Orrick, Herrington & Sutcliffe LLP, or any other law firm having a national reputation in the field of municipal law whose opinions are generally accepted by purchasers of municipal bonds, selected by the Corporation and acceptable to the Issuer and the Purchaser.
"Bond Portion" has the meaning ascribed in the recitals hereto and shall include the Initial Bond Portion as applicable.
"Bond Proceeds" means, collectively, Initial Bond Proceeds and Additional Bond Proceeds, in the maximum aggregate principal amount of $40,000,000.
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"Bond Registrar" means Boston Private Bank & Trust Company, and its successors and assigns, so long as Boston Private Bank & Trust Company or an Affiliate is the Purchaser.
"Business Day" means any day which is neither a Saturday nor a Sunday nor a legal holiday on which commercial banks are authorized or required to be closed in San Mateo, California, or Boston, Massachusetts.
"Campaign" means the Corporation's "Expanding The Vision Campaign" to raise funds for the construction of the Project, or any successor campaign for the same purpose.
"Closing Date" means the date of initial issuance and delivery of the Initial Bond Portion . to the Purchaser.
"Code" means the Internal Revenue Code of 1986, as amended. Each citation to a Section of the Code shall include the Treasury regulations applicable to such Section.
"Completion Certificate" means the certificate delivered by an Authorized Officer of the Corporation pursuant to Section 5.1 (b) hereof.
"Construction Contract" means a contract for the construction of the Project in form and substance reasonably acceptable to the Purchaser.
"Construction Funrf' means the fund by that name created hereunder.
"Construction Inspector" means the construction inspector or a consulting engineer and/or architect engaged by the Purchaser to inspect the Project. The reasonable out-of-pocket cost incurred by Purchaser in retaining such Construction Inspector shall be paid by Borrower.
"Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, through the right to elect not less than a majority of the members of its board of directors or other governing board, by contract or otherwise. "Controlling" and "Controlled" have meanings correlative thereto.
"Corporation Documents" means this Agreement, the Agreement Not to Encumber or Transfer Property, the Assignment of Project Documents, the Security Agreement, the Covenants Agreement and the Tax Agreement.
"Costs of Issuance" means (a) any reasonable cost incurred by the Corporation in connection with the issuance of the Bond including, but not limited to, any legal and accounting fee and expense, title, survey and recording fees and expenses, financial consultants' fee, financing charge, printing and engraving cost, and any other fee relating to preparation of the financing statements, preparation of any disclosure document and any other documents necessary for the issuance of the Bond; (b) any fee and reasonable expense of the Issuer, and the Purchaser and the reasonable expense of their counsel incurred under or in connection with the issuance of the Bond; and (c) any other fee and expense incurred in connection with the issuance of the Bond.
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"Costs of the Project'' or "Project Costs" means any cost incurred with respect to the Project and, with respect to costs funded or to be funded with Bond Proceeds, incurred in accordance with the Code, used for purposes consistent with the Tax Agreement which will not cause any of the representations or certifications contained in the Tax Agreement to be untrue or result in a violation of any covenant in the Tax Agreement.
"Covenants Agreement" means the Continuing Covenants Agreement, dated as of December 1, 2012, between the Purchaser and the Corporation, attached hereto as Exhibit E, as amended from time to time, or any similar agreement between the Purchaser and the Corporation ..
"Default Rate" shall have the meaning set forth in Section 3.7(a) hereof.
"Determination of Taxability" means and shall be deemed to have occurred on the first to occur of the following:
(i) on that date when the Corporation files any statement, supplemental statement or other tax schedule, return or document which discloses that an Event of Taxability has in fact occurred;
(ii) on the date when the Purchaser or any former Purchaser notifies the Corporation that it has received a written unqualified legal opinion (which opinion shall not be a reasoned opinion and shall be subject to only customary assumptions and exclusions) by an attorney or firm of attorneys of nationally recognized standing on the subject of tax-exempt municipal finance and that is reasonably acceptable to the Corporation and the Purchaser to the effect that an Event of Taxability has occurred unless, within one hundred eighty (180) days after receipt by the Corporation of such notification from the Purchaser or any former Purchaser, the Corporation delivers to the Purchaser and any former Purchaser a ruling or determination letter issued to or on behalf of the Corporation by the Commissioner or any District Director of the Internal Revenue Service (or any other governmental official exercising the same or a substantially similar function from time to time) to the effect that, after taking into consideration such facts as formed the basis for the opinion that an Event of Taxability occurred, an Event of Taxability has not occurred;
(iii) on the date when the Corporation is advised in writing by the Commissioner or any District Director of the Internal Revenue Service (or any other government official or agent exercising the same or a substantially similar function from time to time) that, based upon filings of the Corporation, or upon any review or audit of the Corporation or upon any other ground whatsoever, an Event of Taxability has occurred; or
(iv) on that date when the Corporation receives written notice from the Purchaser or any former Purchaser that the Internal Revenue Service (or any other government official or agency exercising the same or a substantially similar function from time to time) has assessed as includable in the gross income of the Purchaser or
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such former Purchaser the interest on the Bond, as a result of the occurrence of an Event of Taxability;
provided, however, no Determination of Taxability shall occur under subparagraph (iii) or (iv) above unless the Corporation has been afforded the opportunity, at its expense, to contest any such assessment, and, further, no Determination of Taxability shall occur until such contest, if made, has been finally determined; provided further, however, that, within thirty (30) days of written demand from the Purchaser, the Corporation shall promptly reimburse the Purchaser for any payments, including any taxes, interest, penalties or other charges, the Purchaser was obligated to make as a result of the Determination of Taxability.
"Electronic Notice" means (a) notice transmitted through electronic mail ("e-mail") or facsimile machine, if operative as between the party sending the notice and the party that is to receive the notice, and (b) if not so operative between any two parties, notice given in writing or by telephone (promptly confirmed in writing).
"Event of Default" is defined in Section 9 .I of this Agreement.
"Event of Taxability" means a (i) change in Law or fact or the interpretation thereof, or the occurrence or existence of any fact, event or circumstance (including, without limitation, the taking of any action by the Corporation, or the failure to take any action by the Corporation, or the making by the Corporation of any misrepresentation herein or in any certificate required to be given in connection with the issuance, sale or delivery of the Bond, but excluding any act of the Purchaser) which has the effect of causing interest paid or payable on the Bond to become includable, in whole or in part, in the gross income of the Purchaser for federal income tax purposes or (ii) the entry of any decree or judgment by a court of competent jurisdiction, or the taking of any official action by the Internal Revenue Service or the Department of the Treasury, which decree, judgment or action shall be final under applicable procedural law, in either case, which has the effect of causing interest paid or payable on the Bond to become includable, in whole or in part, in the gross income of the Purchaser for federal income tax purposes with respect to the Bond.
"Financed Properties" means the portions of the Project financed with proceeds of the Bond.
"Financing Purposes" has the meaning set forth in the recitals hereto.
"Fiscal Year" means, with respect to the Borrower, the period beginning on July I of each year and ending on the next succeeding June 30, or any othertwelve-month, or fifty-two week, period hereafter selected and designated as the official fiscal year period of the Borrower.
"Governmental Authority" means any nation or government, any state, department, agency or other political subdivision thereof, and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to any government, and any corporation or other entity owned or controlled (through stock or capital oWnership or otherwise) by any of the foregoing.
"Initial Bond Proceeds" means $196,900.
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"Initial Bond Portion" means the initial portion of the Bond that is purchased on the Closing Date with the Initial Bond Proceeds by the Purchaser.
"Interest Payment Date" means the first Business Day of each month, commencing with February 1, 2013, and the Maturity Date of the Bond.
"Issuer Annual Fee" means $6,000, payable on the Closing Date and on December 1, 2013, December 1, 2014 and December 1, 2015, and thereafter an amount equal to 0.015% of the outstanding principal amount of the Bond, payable on the first day of the month in which the anniversary of the issuance date occurs (commencing December 1, 2016).
"Issuer Issuance Fee" means $35,000.
"Maturity Date" means December 20, 2042.
"Maximum Interest Rate" means the highest rate of interest permitted by applicable law.
"Net Proceeds" means the net cash proceeds from any casualty insurance or from any condemnation or eminent domain action with respect to any Property less any costs reasonably expended by the Corporation or the Purchaser to receive such proceeds.
"Opinion of Bond CounseT' means an opinion of Bond Counsel.
"Opinion of Counsel" means a written opinion of counsel who is acceptable to the Purchaser. The counsel may be an employee of or counsel to the Issuer or the Corporation.
The term "outstanding" when used with reference to the Bond, or "Bond outstanding" means the Bond which has been authenticated and delivered to the Purchaser under this Agreement, except the following:
(a) any portion of the Bond canceled or delivered to the Bond Registrar for cancellation;
(b) any portion of the Bond in lieu of which another has been authenticated under Section 3.4 (relating to transfer of a Bond) or 3.l(d) (relating to a mutilated, lost, stolen or destroyed Bond); and
(c) any portion of the Bond for which payment has been made or provision for payment of which has been made via creation of an irrevocable escrow pursuant to Section 10.10 hereof. ·
"Person" means an individual, a corporation, a partnership, an association, a trust or any other entity or organization, including a government or political subdivision or any agency or instrumentality thereof.
"Plans and Specifications" mean the plans and specifications for the Project delivered to Purchaser and identified as such, which have been approved by Purchaser, together with such
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changes and additions as may be approved by Purchaser m writing m accordance with Section 4.23 of the Covenants Agreement.
"Project" means the facilities of the Corporation described in Exhibit B hereto (which Exhibit B may be amended, supplemented or restated from time to time).
"Project Budget" means a budget relating to the Project submitted by the Corporation to, and approved by, the Purchaser and certified by the Corporation to be a true, accurate and complete, listing of all costs which Borrower reasonably anticipates will be incurred in connection with the completion of the Project and the commencement of Project operations, as
. amended in accordance with Section 4.23 of the Covenants Agreement.·
"Property" means any interest of the Corporation in any kind of property or asset, whether real, personal or mixed, or tangible or intangible, whether now held, owned or hereafter acquired by the Corporation.
"Purchase Date" means (a) with respect to the Initial Bond Portion, the Closing Date, and (b) with respect to each future Bond Portion, the date, which shall be a Business Day, on which the Purchaser purchases such Bond Portion as provided in Section 3 .2.
"Purchaser" means the registered owner of the Bond, Boston Private Bank & Trust Company, and its successors and assigns.
"Rebate Fund" means the fund by that name created hereunder.
"Refinance Transactions" means the payment of all or any portion of the outstanding principal amount of the Bond from the proceeds of other bonds or the proceeds of a new loan. "Refinance Transactions" shall not include the payment of all or any portion of the outstanding principal amount of the Bond from amounts received by the Corporation as capital campaign contributions or from amounts received by the Corporation in excess of amounts needed by the Corporation to pay operating expenses or debt service (i.e., excess cash flow).
"Resolution" means the resolution adopted by the Issuer approving the issuance and sale of the Bond.
"Risk-Based Capital Guidelines'' means (i) the risk-based capital guidelines in effect in the United States on the date of this Agreement, including transition rules, and (ii) the corresponding capital regulations promulgated by regulatory authorities outside the United States including transition rules, and any amendments to such regulations adopted prior to the date of this Agreement.
"Security Agreement' means the Security Agreement-AU Assets, between the Purchaser and the Corporation, dated as of D.ecember 1, 2012.
"State" means the State of California.
"Tax Agreement" means the Tax Certificate and Agreement between the Issuer and the Corporation, dated the Closing Date, as amended from time to time.
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"Tax-Exempt Organization'; means an entity organized under the laws of the United States of America or any state thereof which is an organization described in Section 501(c)(3) of the Code, which is exempt from federal income taxes under Section 501(a) of the Code, and which is not a "private foundation" within the meaning of Section 509(a) of the Code, or corresponding provisions of federal income tax laws from time to time in effect.
"Taxable Date" means the date as of which interest on .the Bond is first included in gross income of the Purchaser thereof as a result of an Event of Taxability as such a date is established pursuant to either (i) a Determination of Taxability or (ii) an opinion. of Bond Counsel; provided, that for purposes of clause (v) of the definition of Determination of Taxability, if the Corporation shall not have provided the opinion described in clause (iii) of the definition of Event of Taxability, the Taxable Date shall be the date of the payment under Section 3.02(a) hereof or Section 3.04 hereof as described in clause (iii) of the definition of Event of Taxability.
"Taxable Periocf' has the meaning ascribed to such term in Section 3.02(b) hereof.
"Taxable Rate" means, with respect to a Taxable Period, the product of (i) the Bank Purchase Rate and (ii) 1.54.
"Tax Credit" means a credit against, relief or remission for, or repayment of, any Taxes.
"Taxes" means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
"Title Company" means First American Title Insurance Company.
"Unassigned Rights" means the rights of the Issuer under Sections 3.4, 4.3, 6.10, 7.1, 9.6, 10.2 and 10.7 hereunder and its rights to receive notices hereunder and to consent to amendments hereto.
Section 1.2 Interpretation. Unless the context clearly requires otherwise, words of masculine gender shall be construed to include correlative words of the feminine and neuter genders and vice versa, and words of the singular number shall be construed to include correlative words of the plural number and vice versa. This Agreement, and all the terms and provisions hereof shall be construed to effectuate the purpose set forth herein and to sustain the validity hereof. Each party to this Agreement and its respective counsel have participated in the drafting and revision of this Agreement. Accordingly, the parties agree that none of the parties shall be deemed to be the drafting party of this Agreement for purposes of any rule of construction which disfavors the drafting party.
Section 1.3 Computation of Time Periods. In this Agreement, in the computation of a period of time from a specified date to a later specified date, the word "from" means "from and including" and the words "to" and "until" each mean "to but excluding."
Section 1. 4 Construction. Unless the context of this Agreement otherwise clearly requires, references to the plural include the singular, to the singular include the plural and to the part include the whole. The word "including" shall be deemed to mean "including but not
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limited to," and "or" has the inclusive meaning represented by the phrase "and/or." The words "hereof," "herein," "hereunder" and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement. The Section headings contained in this Agreement and the table of contents preceding this Agreement are for reference purposes only and shall not control or affect the construction of this Agreement or the interpretation thereof in any respect. Section, subsection and exhibit references are to this Agreement unless otherwise specified.
Section 1. 5 Accounting Terms and Determinations. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared, in accordance with GAAP. In the event of changes to GAAP which become effective after the Closing Date, the Corporation and the Purchaser agree to negotiate in good faith appropriate revisions of this Agreement so as to perpetuate the meaning and effect of such provisions as originally negotiated and agreed upon.
Section 1.6 Incorporation by Reference. The Covenants Agreement attached hereto as Exhibit E is hereby incorporated herein in its entirety by reference thereto. All provisions of this Agreement making reference to specific Sections of any other Corporation Document shall be deemed to incorporate such Sections into this Agreement by reference as though specifically set forth herein (with such changes and modifications as may be herein provided) and shall continue in full force and effect with respect to this Agreement notwithstanding payment of all amounts due under or secured by the Corporation Documents, and, except as provided in the next sentence and except with respect to the termination of the Agreement Not to Encumber or Transfer Property in accordance with its terms, the termination or defeasance thereof or any amendment thereto or any waiver given in connection therewith, so long as this Agreement is in effect and until the Bond is paid in full. No amendment, modification, consent, waiver or termination with respect to any of such Sections shall be effective as to this Agreement until specifically agreed to in writing by the parties hereto with specific reference to this Agreement.
ARTICLE II REPRESENTATIONS AND WARRANTIES
Section 2.1 warrants as follows:
Representations and Warranties of issuer. The Issuer represents and
(a) The Issuer is a joint exercise of powers agency duly organized and existing under the laws of the State and is duly authorized to issue the Bond and to perform its obligations under this Agreement.
(b) All requirements have been met and procedures have occurred in order to authorize the execution and delivery of this Agreement. The Issuer has taken all necessary action and has complied with all provisions of the law required to make this Agreement a valid and binding limited obligation of the Issuer, except to the extent limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights generally, by the application of equitable principles regardless of whether enforcement is sought in a proceeding at law or in equity, or by public policy.
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(c) The Bond has been duly authorized, executed and delivered by the Issuer. Nothing in this Agreement shall be construed as requiring the Issuer to provide any financing for the Project other than the Bond Proceeds or to provide sufficient moneys for all of the cost of financing the Project.
(d) To the best knowledge of the Issuer, there is no action, suit, proceeding, inquiry or investigation by or before any court, governmental agency or public board or body pending or threatened against the Issuer that (i) affects or seeks to prohibit, restrain or enjoin the issuance, execution or delivery of the Bond, the origination of the loan or the lending of the proceeds of the Bond to the Corporation, or the execution and delivery of the Corporation Documents, (ii) affects or questions the validity or enforceability of the Bond or the Corporation Documents or (iii) questions the tax-exempt status of interest on the Bond.
Section 2.2 Representations and Warranties of Corporation. The Corporation represents and warrants as follows:
(a) The Corporation is a nonprofit corporation duly organized and in good standing ·under the laws of the State of California and has full legal right, power and authority to enter into Corporation Documents and to carry out and consummate all transactions contemplated hereby and by the other Corporation Documents and by proper corporate action has duly authorized the execution, delivery and performance of the Corporation Documents.
(b) The Corporation Documents have been duly authorized, executed and delivered by the Corporation.
(c) The Corporation Documents will constitute the legal, valid and binding agreements of the Corporation enforceable against the Corporation in accordance with their terms; except as enforcement may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights generally, by the application of equitable principles regardless of whether enforcement is sought in a proceeding at law or in equity and by public policy.
(d) The execution and delivery of the Corporation Documents, the consummation of the transactions herein and therein contemplated and the fulfillment of or compliance with the terms and conditions hereof and thereof, will not conflict with or constitute a violation or breach of or default (with due notice or the passage of time or both) under the Articles of Incorporation and Bylaws of the Corporation, any applicable law or administrative rule or regulation, or any applicable court or administrative decree or order, or any indenture, mortgage, deed of trust, loan agreement, lease, contract or other agreement or instrument to which the Corporation is a party or by which it or its properties are otherwise subject or bound, or result in the creation or· imposition of any lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of the Corporation, which conflict, violation,· breach, default, lien, charge or encumbrance might have consequences that would materially and adversely affect the consummation of the transactions contemplated by the Corporation Documents, or the financial condition, assets, properties or operations of the Corporation.
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(e) No consent or approval of any trustee or holder of any indebtedness of the Corporation or any guarantor of indebtedness of or other provider of credit or liquidity to the Corporation, and no consent, permission, authorization, order or license of, or filing or
. registration with, any Governmental Authority (except with respect to any state securities or "blue sky" laws) is necessary in connection with the execution and delivery of the Corporation Documents, or the consummation by the Corporation of any transaction herein or therein contemplated, or the fulfillment by the Corporation of or compliance with the terms and conditions hereof or thereof, except as have been obtained or made and as are in full force and effect.
------------- ~t)--+here-is-no-action,--suit,proceeding,--inquiry-IJr-invtJstigation,--btJfortJ-or-by-any---------court or federal, state, municipal or other Governmental Authority, pending, or to the knowledge of the Corporation, after reasonable investigation, threatened, against or affecting the Corporation or the assets, properties or operations of the Corporation which, if determined adversely to the Corporation or its interests, would have a material adverse effect upon the consummation of the transactions contemplated by or the validity of the Corporation Documents, or upon the financial condition, assets, properties or operations of the Corporation.
(g) No written information, exhibit or report furnished to the Issuer by the Corporation in connection with the negotiation of the Corporation Documents, and no official statement or other offering document in connection with the issuance of the Bond, if any, as of its date or as of the date hereof, contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(h) All financial statements and information heretofore delivered to the Issuer or the Purchaser by Corporation, including without limitation, information relating to the financial condition of Corporation and/or the Project, fairly and accurately present the financial position thereof and have been prepared (except where specifically noted therein) in accordance with generally accepted accounting principles consistently applied. Since June 30, 2012, there has been no material adverse change in the financial condition or results of operations of the Corporation. .
(i) The Corporation has or will have good and marketable title to the Project free and clear from all encumbrances other than encumbrances permitted by the Covenants Agreement.
G) The Corporation is not in default (and to the knowledge of the Corporation, no event has occurred and is continuing which with the giving of notice or the passage of time or both could constitute a default) (1) under the Corporation Documents, or (2) with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or other Governmental Authority, which default could reasonably be expected to have consequences that would materially and adversely affect the consummation of the transactions contemplated by the Corporation Documents, or the financial condition, assets, properties or operations of the Corporation.
(k) All material certificates, approvals, permits and authorizations of applicable local governmental agencies, and agencies of the State and the federal government have been or will
OHSUSA:751727866.8 11
be obtained with respect to the acquisition, construction and installation of the Project and the Project will be acquired, constructed and installed and the Project will be operated pursuant to and in accordance with such certificates, approvals, permits and authorizations.
(1) The Corporation acknowledges, represents and warrants that it understands the nature and structure of the transactions relating to the financing of the Project; that it is familiar with the provisions of all of the documents and instruments relating to such financing to which the Corporation is a party or of which it is a beneficiary; that it understands the risks inherent in such transactions; and that it has not relied on the Issuer for any guidance or expertise in analyzing the financial or other consequences of the transactions contemplated by the Corporation Documents or otherwise relied on the Issuer for any advice.
(m) The Corporation neither restricts entry to its programs and services, nor grants preferences in entry, on racial or religious grounds.
(n) No portion of the Bond Proceeds will be used to finance or refinance any facility used or to be used for sectarian instruction or as a place for religious workshop or any facility used or to be used primarily in connection with any part of the program of a school or department of divinity during the useful life of such facilities.
(o) The Corporation is an organization described in Section 50l(c)(3) of the Code, does not constitute a private foundation under Section 509(a) of the Code, and the income of the Corporation is exempt from federal taxation under Section SOl(a) of the Code. The Corporation has received a determination from the Internal Revenue Service to the foregoing effect, and none of the bases for such determination have changed since the date thereof.
Section 2.3 Representations and Warranties of Purchaser.
(a) The Purchaser has all power and authority necessary (i) to execute and deliver this Agreement, (ii) to perform its obligations under this Agreement and (iii) to consummate the transactions contemplated by this Agreement.
(b) The Purchaser has taken all actions necessary to authorize (i) the execution and delivery of this Agreement, (ii) the performance of its obligations under this Agreement and (iii) the consummation of the transactions contemplated by this Agreement.
(c) This Agreement has been duly executed and delivered by the Purchaser and constitutes, assuming due execution and delivery by the other parties hereto, the valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, except as limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the rights of creditors generally and the exercise of judicial discretion in accordance with principles of general equity.
(d) To the knowledge of the Purchaser, without inquiry, neither the execution and delivery by the Purchaser of this Agreement, nor the performance by the Purchaser of its obligations hereunder, nor the consununation of the transactions contemplated hereby will violate any law, rule, regulation or ordinance, or any order, judgment or decree of any federal, state or local court or will conflict with, or constitute a breach of, or a default under, the charter
OHSUSA:75l727866.8 12
or bylaws of the Purchaser or under any agreement, instrument or commitment to which the Purchaser is a party or by which the Purchaser or any of its property is bound.
(e) To the knowledge of the Purchaser, without inquiry, there is no action, suit, proceeding, inquiry or investigation by or before any court, governmental agency or public board or body pending or, to the knowledge of the Purchaser, threatened against the Purchaser (nor, to the best knowledge of the Purchaser, is there any basis therefor), which (i) affects or seeks to prohibit, restrain or enjoin the execution and delivery by the Purchaser hereof, the performance by the Purchaser of its obligations hereunder, or the consummation of the transactions contemplated hereby, or (ii) affects or questions the validity or enforceability of this Agreement.
- ------ -----
(f) To the knowledge of the Purchaser, without inquiry, no approval, permit, consent, authorization or order of any court, governmental agency or public board or body not already obtained is required to be obtained by the Purchaser as a prerequisite to the execution and delivery by the Purchaser of this Agreement, the performance by the Purchaser of its obligations hereunder or the consununation of the transactions contemplated by this Agreement.
(g) To the knowledge of the Purchaser, without inquiry, it is not in default with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or governmental agency, which default might have consequences that would affect its performance hereunder.
(h) To the knowledge of the Purchaser, without inquiry, it is not a party to or bound by any agreement or instrument or subject to any charter or any other corporate restriction or any judgment, order, writ, injunction, decree, law or regulation which now or in the future may materially and adversely affect the ability of the Purchaser to perform its obligations, or which requires the consent of any third person to the execution hereof, or the consummation of the transaction contemplated hereby.
(i) The Purchaser shall represent, warrant and acknowledge all matters as set forth in the form of Investor Letter attached hereto as Exhibit C.
OHSUSA:751727866.8 13
ARTICLE III ISSUANCE AND SALE OF BOND; CONSTRUCTION FUND
Section 3.1 Terms of Bond; Conditions to Purchase.
(a) The Bond shall be designated the "California Municipal Finance Authority Revenue Bond (The Nueva School Project), Series 2012A". To provide funds to make a loan to the Corporation for purposes of assisting in paying a portion of the Costs of the Project, the Issuer will issue, sell and deliver the Bond to the Purchaser and the Purchaser agrees to purchase the Bond in Bond Portions at the purchase price of 100% of the principal amount of each Bond Portion. The Bond will be issued as a draw-down bond in fully-registered form in the aggregate principal amount not to exceed $40,000,000. The principal amount of the Bond as of any given date shall be the total amount advanced by the Purchaser as purchase price of the Bond less the total amount of principal paid on the Bond. The Bond will bear interest at the Bank Purchase Rate, will mature on the Maturity Date and will be subject to optional redemption prior to maturity as set forth therein. The Corporation hereby approves the terms and conditions of the Resolution and the Bond, and of the terms and conditions under which the Bond will be issued, sold and delivered.
The Purchaser shall keep a record (including dates and principal amounts) of all purchases of Bond Portions and payments of principal on the Bond and shall, upon the written request of such party, provide the Issuer or the Corporation a copy of such record and a statement of the principal amount of the Bond then outstanding.
(b) The Bond shall be signed in accordance with the Resolution by a member of the Issuer's Board of Directors. In case any officer whose signature or a facsimile of whose signature appears on the Bond shall cease to be that officer before the issuance of the Bond, the officer's signature or the facsimile thereof nevertheless shall be valid and sufficient for all purposes, the same as if he or she had remained in office until that time. Any Bond may be executed on behalf of the Issuer by an officer who, on the date of execution is the proper officer, although on the date of the Bond that person was not the proper officer.
(c) Only a Bond as shall have endorsed thereon a certificate of authentication substantially in the form set forth therein and duly executed by the Bond Registrar shall be entitled to any right or benefit under this Agreement. The Bond shall not be valid or obligatory
. for any purpose unless and until such certificate of authentication shall have been duly executed by the Bond Registrar; and such executed certificate upon any such Bond shall be conclusive evidence that such Bond has been authenticated and delivered under this Agreement.
The Bond shall be authenticated by the Bond Registrar and delivered to the Purchaser on the Closing Date upon receipt by the Bond Registrar of a written request signed by an Authorized Official of the Issuer.
(d) Ownership of the Bond may be transferred, subject to the terms of Section 3.4 hereof, only upon the books kept for the registration and transfer of the Bond by the Bond Registrar, together with an assignment duly executed by the Purchaser or its duly authorized attorney in such form as shall be satisfactory to the Bond Registrar. The Purchaser and subsequent Purchaser shall give written notice to the Corporation prior to any transfer of the
OHSUSA:751727866.8 14
Bond, but any failure to give such notice shall not affect the validity of such transfer. Upon such request of the transferor, the Issuer, at the sole cost and expense of the Corporation and the Purchaser, shall execute in the name of the transferee, and shall deliver, a new fully registered Bond in the aggregate principal amount equal to the unamortized and unredeemed principal amount of the Bond so surrendered and bearing interest at the same rate or rates and maturing on the same date. Absent manifest error, the unamortized and unredeemed principal amount of the Bond shall be determined from the records of the Purchaser. So long as the Bond remains outstanding, the Bond Registrar, shall maintain books for the aforesaid registration and transfer
·of the Bond.
____________________ The_Issuer_may_treaUhe_registered-owner-of-the-Bond-as-the-absolute-owner-thereof-for----------all purposes, whether or not the Bond shall be overdue, and shall not be bound by any notice to the contrary.
(e) In the event any Bond is mutilated, lost, stolen or destroyed, the Issuer may execute and the Bond Registrar may authenticate and deliver a new Bond in lieu of such mutilated, .lost, stolen or destroyed Bond, of like date and denomination as that mutilated, lost, stolen or destroyed. Any mutilated Bond shall first be surrendered to the Issuer, and in the case of any lost, stolen or destroyed Bond, there shall first be furnished to the Issuer evidence of such loss, theft or destruction satisfactory to it together with indemnity satisfactory to it. Every new Bond issued pursuant to this Section shall, with respect to such Bond, constitute an additional contractual obligation of the Issuer, whether or not the mutilated, lost, stolen or destroyed Bond shall be found at any time, and shall be entitled to all the benefits of this Agreement equally and proportionately with any Bond duly issued hereunder. The Bond shall be held and owned on the express condition that the foregoing provisions of this Section are exclusive with respect to the replacement or payment of a mutilated, lost, wrongfully taken or stolen Bond and shall preclude any and all rights or remedies, notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement or payment of negotiable instruments or other securities without their surrender.
(f) The Initial Bond Proceeds shall be provided on the Closing Date by the Purchaser's deposit of funds in the Construction Fund, upon receipt by the Issuer and/or the Purchaser, as appropriate, ofthe following items:
(i) a copy, duly certified by the Issuer, of the Resolution adopted and approved by the Issuer authorizing (i) the execution and delivery of this Agreement and the Tax Agreement and (ii) the issuance and sale of the Bond.
(ii) a copy, duly certified by the Secretary or an Assistant Secretary of the Corporation, of the resolutions adopted by the Board of Trustees of the Corporation or the Executive Committee thereof authorizing the execution and delivery of the Corporation Documents and approving the issuance and sale of the Bond;
(iii) the articles of incorporation of the Corporation, certified to be in full force and effect as of a date not more than thirty (30) days preceding the Closing Date by an appropriate official of the applicable jurisdiction of organization and the articles of incorporation
OHSUSA:751727866.8 15
and bylaws (or comparable instruments) of the Corporation, certified by an Authorized Official to be in full force and effect on the Closing Date;
(iv) certificate of existence or good standing for the Corporation issued by an appropriate official of the applicable jurisdiction of organization, issued no more than thirty (30) days preceding the Closing Date;
(v) evidence that the Corporation is a Tax-Exempt Organization;
(vi) a certificate of an Authorized Official certifying the names and signatures of the persons authorized to sign, on behalf of the Corporation, the documents to be delivered by it hereunder or thereunder;
(vii) the original executed counterparts of the Corporation Documents;
(viii) a written opinion of counsel for the Corporation in form and substance satisfactory to the Issuer, the Purchaser and Bond Counsel;
(ix) a written opinion of counsel for the Issuer in form and substance satisfactory to the Purchaser and Bond Counsel;
(x) a written opinion of Bond Counsel in form and substance satisfactory to the Purchaser and the Issuer; and
(xi) the preliminary Plans and Specifications for the Project in a form acceptable to the Purchaser; and
(xii) such further documents, certificates and opinions as may be required by the provisions of the Resolution of the Issuer, this Agreement, or by the Purchaser in connection with the issuance and delivery of the Bond, the satisfaction of such requirements to be conclusively evidenced by the delivery of the Bond by the Issuer and by the deposit into the Construction Fund by the Purchaser of the Initial Bond Proceeds.
Upon receipt of the foregoing, the Purchaser shall deliver an Investment Letter in substantially the form attached hereto as Exhibit C and purchase the Initial Bond Portion on the Closing Date.
(g) Additional Bond Proceeds may be requested by the Corporation up to two times per month, beginning in January 2013 and ending in December 2015, upon the Corporation's delivery to the Purchaser of an executed Additional Bond Proceeds Request in the form attached hereto as Exhibit D and on AlA Forms G702 and G703, as applicable. Requests must be in minimum amounts of $100,000. The Purchaser shall purchase Bond Portions in an amount equal to the Additional Bond Proceeds requested hereunder on any Business Day proposed by the Corporation therefor that is at least 15 days after submission of a request hereunder by depositing funds in the Construction Fund. Pending disbursement pursuant to Section 3 .2( e) hereof, the proceeds so deposited in the Construction Fund, together with any investment earnings thereon, shall constitute a part of the revenues assigned by the Issuer to the Purchaser for the payment of debt service on the Bond.
OHSUSA:7Sl727866.8 16
(h) No Bond Portions will be purchased by the Purchaser more than 90 days following the delivery of the Completion Certificate.
(i) For all Additional Bond Proceeds Requests, other than a Request pursuant to which Additional Bond Proceeds will be used to acquire the real property in connection with the Project described in Exhibit B hereto, all governmental approvals, permits and licenses required to be in place at such time, have been issued by the appropriate Governmental Authority authorizing the development and/or construction of the Project in accordance with the Plans and Specifications required by applicable law to construct, occupy and operate the Project, are in full force and all fees, currently due and payable therefor have been fully paid or, if the state of
. --- --- ---construction-of-the-l'roject-does-not-aUow-such-issuance,-then-such-permits-and-lictJnses-will-be--- --issued if and when the Project is constructed in accordance with the Plans and Specifications.
(j) for any Additional Bond Proceeds Request pursuant to which Additional Bond Proceeds will be used to acquire the real property in connection with the Project described in Exhibit B hereto, in addition to the satisfaction of all other requirements for the Additional Bond Proceeds Request and disbursement thereof from the Construction Fund, (a) the Corporation must represent that it has received the final approval from the Site Plan Architect Review Committee ("SPAR") and that any period for which an appeal of such approval can be filed has concluded and no appeal was filed, (b) the Corporation shall have provided to the Purchaser copies of the proposed deed for such real property, the survey, the title insurance commitment and all documents appearing as exceptions to the title commitment, which items shall each be in form and substance satisfactory to the Purchaser, and (c) the Corporation shall have executed and delivered an agreement not to encumber the property described in the title insurance commitment relating to the Project in form and substance reasonably acceptable to the Purchaser.
(k) inspections by the Construction Inspector shall be conducted in connection with each Additional Bond Proceeds Request.
(I) No Request for Additional Bond Proceeds for funding Project Costs other than the cost of the land acquisition for the Project shall be approved until the Construction Contract shall have been executed and delivered and the final Plans and Specifications and a final Project Budget shall have been approved by the Purchaser.
(m) The Request for Additional Bond Proceeds for the land acquisition for the Project may not exceed $16,332,500 in land acquisition costs plus $564,633 in other related soft costs.
Section 3.2 Deposits to and Disbursements from the Construction Fund
(a) There is hereby created and established an account with the Purchaser designated as follows: "The Nueva School Acquisition and Construction Fund" (the "Construction Fund"). Subject to the provisions below, and so long as no Event of Default hereunder has occurred and is continuing, the Construction Fund shall initially be funded with the Initial Bond Proceeds, and, if the conditions set forth in Exhibit D and 3.l(g) through (k) hereunder are satisfied, the Construction Fund shall be funded from time-to-time with Additional Bond Proceeds as the Purchaser purchases. Bond Portions. In addition, the Corporation shall make deposits to the Construction Fund in accordance with the Covenants Agreement and the Purchaser shall account
OHSUSA:751727866.8 17
for such funds separately from Bond Proceeds on deposit in the Construction Fund. In order to secure its obligations hereunder, the Corporation hereby pledges and grants a lien on and security interest in all funds deposited into the Construction Fund. All funds in the Construction Fund shall be controlled by the Purchaser and shall be disbursed by the Purchaser pursuant to a requisition signed by the Corporation and countersigned by the Purchaser, which requisition attaches all invoices payable from Bond Proceeds pursuant to the Request for Additional Bond Proceeds and from Campaign Contributions.
(b) Disbursements from the Construction Fund as provided in (e) below, shall be made only to reimburse or pay the Corporation, or any person designated by the Corporation, for Costs of the Project and, in respect of the Initial Bond Proceeds, for Costs of Issuance. Nothing contained herein permits, or shall be construed to permit, the expenditure of the proceeds of any Bond Portions in the Construction Fund for, or in reimbursement of, payments made for working capital and no such expenditure shall be made from the Construction Fund.
(c) Moneys in the Construction Fund from the proceeds of any Bond Portions (including moneys earned thereon by investment thereof) remaining after the completion of the acquisition, rehabilitation, installation, equipment and improvement of the Project and payment, or provision for payment in full of the costs provided for in the preceding subsections of this See! ion, then due and payable, shall promptly be applied to the prepayment of the loan made to the Corporation hereunder and the optional redemption of the Bond pursuant to Section 3.5 hereof. Notwithstanding the foregoing, such moneys may be used to acquire, renovate, install, improve and equip such additional real and personal property in connection with the Project as are designated by an Authorized Official of the Corporation with the consent of the Purchaser and upon delivery to the Purchaser of an Opinion of Bond Counsel to the effect that the acquisition, renovation, installation, improvement and equipping of which will be such as is permitted tmder the Act and will not adversely affect the exclusion of interest on the Bond from the gross income of the owner thereof for federal income tax purposes.
(d) For the purpose of determining the amount of any Costs of the Project which involves any contract providing for the retention of a portion of the contract price as set forth herein in excess of the Retention required in Section 3.1 ( e )(i), there shall initially be deducted from such item the amount of any such excess retention, and, when such retention becomes due and payable, such retention shall be requisitioned in a separate Request for Additional Bond Proceeds.
(e) The following provisions apply to all disbursements from the Constmction Fund:
(i) Additional Bond Proceeds deposited in the Construction Fund are subject to a 10% retention (5% after the Project is 50% complete) (the "Retention"), which Retention shall be disbursed at the time of the final payment to the contractor under the Construction Contract;
(ii) at the sole option of the Corporation, disbursements from the Construction Fund, may be paid in the joint names of the Corporation and the general contractor, subcontractor(s) or supplier(s) in payment of smns due under the Construction Contract. At its
OHSUSA:751727866.8 18
sole option, the Corporation may direct payment to the general contractor and any subcontractors or other parties the sums due under the Construction Contract;
(iii) if the Purchaser at any time reasonably determines that the amount in the Construction Fund, together with Additional Bond Proceeds available to be drawn and Campaign Construction Contributions on deposit in the Campaign Account or pledged to, but not yet received by, the Corporation, is insufficient, or will be insufficient, to complete fully and to pay for the Project, then within thirtY (30) days after receipt of a written request from Purchaser, the Corporation shall deposit to the Construction Fund an amount equal to the deficiency. Any such amounts deposited by the Corporation shall be disbursed prior to any Additional Bond Proceeds;
(iv) the Additional Bond Proceeds shall be applied to reimburse or pay Costs of Issuance or Project Costs that comply with the Tax Agreement;
(v) any materials not yet incorporated into the Project which are the subject of an Additional Bond Proceeds Request shall have been delivered to and located at the Corporation's premises; provided, however, (i) materials may be stored or fabricated off site so long as the location is specified in the Request and is acceptable to the Purchaser and (ii) costs for materials not expected to be delivered or used within 15 days of the Additional Bond Proceeds Request must be evidenced by invoices that include specified delivery dates. Any materials stored off site, or located off site for fabrication, must be fully insured at all times in amounts and for coverage types acceptable to the Purchaser, evidence of which shall be presented with the Additional Bond Proceeds Request, and the Purchaser shall have the right to inspect such materials upon request;
(vi) all work usually done at the stage of construction attained shall have been completed and shall have been done in a good and workmanlike manner; and all materials, supplies, fixtures and equipment usually furnished or installed at that stage of construction shall have been furnished and installed, and the Construction Inspector shall have certified to the Purchaser that: (A) the construction is substantially in accordance with .the Plans and Specifications; (B) if requested by the Purchaser, the percentage of completion of construction; and (C) such other matters as the Purchaser may reasonably require in connection with the Project or the Additional Bond Proceeds Request.
(vii) The Corporation agrees, at its sole cost and expense, to have any mechanics' lien or equitable lien which may be filed against the Project or any portion thereof released or bonded within thirty (30) days of the date upon which the Corporation becomes aware of the filing of the same, time being of the essence. The Purchaser shall be under no obligation to approve further disbursements while any unbonded portion of such lien remains outstanding against the Project or any portion thereof. If the Corporation fails, after demand, to cause said lien or items to be released or bonded as aforesaid, the Purchaser may take such steps as it deems necessary and any funds expended shall be charged to the Corporation, shall constitute obligations of the Corporation under this Agreement and shall bear interest at twelve percent (12%) per annum.
(t) After deposits are made to the Construction Fund from the purchase by the Purchaser of Bond Portions, disbursements of Bond Proceeds and Corporation contributions
OHSUSA:751727866.8 19
from the Construction Flllld shall be made if and only if the following conditions have been satisfied:
(i) no Event of Default has occurred under this Agreement;
(ii) no material litigation or proceedings are pending or threatened (including but not limited to, proceedings lUlder Title 11 of the United States Code) against the Corporation;
(iii) no event, circumstance or condition exists or has occurred which could, in the sole judgment of the Purchaser, delay or prevent the completion of construction of the Project by December 31, 2015; ,
(iv) all representations and warranties made by Corporation continue to be accurate;
(v) the Purchaser shall have received from the general contractor satisfactory and full lien waivers duly and timely executed, completed and delivered to the Purchaser; and, with respect to the completion of the Project, the Purchaser shall have received the general contractor's final affidavit and Corporation's final affidavit showing that all possible lienors have been paid in full, and if requested by the Purchaser, a final release of mechanics' liens, executed by any contractor in privity with the Corporation and from each subcontractor giving a statutory notice to owner, in form and substance satisfactory to the Purchaser and the Title Company;
(vi) all sources and uses of flUlds for the Project shall remain "In Balance"; and
(vii) all prior required deposits to the Construction Flllld pursuant to the Campaign Funds Contribution Schedule attached to the Covenants Agreement as Exhibit E have been made;
Section 3,3 Rebate Fund
There is hereby created and established a fund with the Purchaser designated "The Nueva School Project - Rebate Fund" (the "Rebate Fund"). The Purchaser shall make transfers or deposits to and disbursements from the Rebate Flllld at the written direction of and in accordance with the written instructions received from the Corporation and pursuant to the terms of the Tax Agreement and shall deposit income from investments held therein immediately upon receipt thereof in the Rebate Flllld.
Section 3. 4 Restriction on Tran~fer of Bond
Notwithstanding the Purchaser's intent to purchase the Bond without a view to resell such Bond, the Purchaser hereby agrees and acknowledges that, in any event, the transfer of such Bond may be made from time to time only iii whole and to a purchaser who is a "Qualified Institutional Buyer" as defined in Rule 144A promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended, who has executed and delivered to the Bond Registrar an Investment Letter in the form included in Exhibit C. The Purchaser lUlderstands and agrees that this restriction on transfer shall be printed prominently on the form
OHSUSA:751727866,8 20
of the Bond or any replacement Bond. The Purchaser and any subsequent Bond Purchaser desiring to affect a transfer in accordance with the provisions of this Section 3.4 shall, and by acceptance of its Bond does thereby agree to, indemnify the Issuer and the Corporation against any liability, cost or expense (including reasonable attorneys' fees) that may result from such transfer, whether or not the transfer actually occurs. In addition to the foregoing restrictions, the Purchaser shall not transfer the Bond except to an Affiliate of the Purchaser. The provisions of this Section 3.4 shall apply to all transfers of the Bond subject to the transfer restrictions set forth in this Section 3 .4, notwithstanding anything to the contrary contained in this Agreement or any other document or proceeding, and any transfer in violation of the provisions of this Section 3.4 shall be null and void.
Section 3.5 Optional Redemption. ---The Bond is callable for optional redemption in whole or in part on any date at the written direction of an Authorized Official of the Corporation delivered to the Purchaser no fewer than fourteen (14) days prior to the date set for redemption (provided that no prior notice shall be required for a redemption required by Section 4.27 of the Covenants Agreement) as follows:
(a) from the proceeds of a Refinance Transaction (i) prior to the delivery of the Completion Certificate described in Article V, at a redemption price equal to the outstanding principal amount of the Bond, plus $600,000, plus accrued interest to the redemption date, and (ii) after delivery of the Completion Certificate described in Article V, but prior to December 20, 2022, at a redemption price equal to 101.5% of the outstanding principal amount of the Bond, plus accrued interest to the redemption date, and (iii) after December 20, 2022, at a redemption price equal to 100% of the outstanding principal amount of the Bond, plus accrued interest to the redemption date; and
(b) from funds of the Corporation that are not from a Refinance Transaction, at a redemption price equal to the outstanding principal amount of the Bond to be redeemed, plus accrued interest thereon.
Section 3.6 Partial Redemption.
If portions of the Bond are called for redemption and if on the redemption date moneys for the redemption thereof are held by the Purchaser, thereafter those portions thereof to be redeemed shall cease to bear interest, and shall cease to be secured by, and shall not be deemed to be outstanding under this Agreement.
Section 3. 7 Default Rate/Taxability.
(a) Default Rate. In case any Event of Default occurs hereunder and is continuing, the Bond shall bear interest at the Bank Purchase Rate plus four percent (4%) per aunum (but in no event in excess of the maximum rate from time to time permitted by then applicable law) (the "Default Rate"). The Purchaser, the Corporation and the Issuer may agree that the Bond will bear interest at a different Default Rate than set forth in the preceding sentence if there is delivered to the Issuer, the Purchaser and the Corporation an Opinion of Bond Counsel to the
OHSUSA:751727866.8 21
effect that the designation of such different Default Rate will not adversely effect the exclusion of interest on the Bond from gross income for federal income tax purposes.
(b) Detetmination of Taxability.
(i) In the event a Determination of Taxability occurs, the Corporation hereby agrees to pay to the Purchaser, upon thirty (30) days written demand therefor (1) an amount equal to the difference between (A) the amount of interest that would have been paid to the Purchaser on the Bond during the period (commencing on the Taxable Date) for which interest on the Bond is included in the gross income of the Purchaser (the "Taxable Period") if the Bond had borne interest at the Taxable Rate during the Taxable Period, and (B) the amount of interest actually paid to the Purchaser during the Taxable Period, and (2) an amount equal to any interest, penalties or charges owed by the Purchaser as a result of interest on the Bond becoming included in the gross income of the Purchaser, together with any and all attorneys' fees, court costs, or other out-of-pocket costs incurred by the Purchaser in connection therewith.
(ii) Subject to the provisions of clauses (iii) and (iv) below, the Purchaser shall afford the Corporation the opportunity, at the Corporation's sole cost and expense, to contest (1) the validity of any amendment to the Code which causes the interest on the Bond to be included in the gross income of the Purchaser or (2) any challenge to the validity of the tax exemption with respect to the interest on the Bond, including the right to direct the necessary litigation contesting such challenge (including administrative audit appeals).
(iii) As a condition precedent to the exercise by the Corporation of its right to contest set forth in clause (ii) above, the Corporation shall, on thirty (30) days written demand from the Purchaser, immediately reimburse the Purchaser for any and all expenses (including attorneys' fees for services that may be required or desirable, as determined by the Purchaser in its sole discretion) that may be incurred by the Purchaser in connection with any such contest, and shall, on thirty (30) days written demand from the Purchaser, immediately reimburse the Purchaser for any and all penalties or other charges payable by the Purchaser for failure to include such interest in its gross income; and
(iv) The obligations of the Corporation under this Section 3.7(b) shall survive the termination of this Agreement, the termination of any of the other Related Documents, and the redemption or other payment in full of the Bond.
Section 3.8 Maximum Interest Rate.
(i) If the amount of interest payable for any period in accordance with the terms hereof or of the Agreement or the Bond exceeds the amount of interest that would be payable for such period had interest for such period been calculated at the Maximum Interest Rate, then interest for such period shall be payable in an amount calculated at the Maximum Interest Rate.
(ii) Any interest that would have been due and payable for any period but for the operation of the immediately preceding subclause (i) shall accrue and be payable as provided in this subclause (ii) and shall, less interest actually paid to the Purchaser for such period, constitute the "Excess Interest Amount." If there is any accrued and unpaid Excess Interest
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Amount as of any date, then the principal amount with respect to which interest is payable shall bear interest at the Maximum Interest Rate until payment to the Purchaser of the entire Excess Interest Amount.
(iii) Notwithstanding the foregoing, on the date on which no principal amount with respect to the Bond remains unpaid, the Corporation shall pay to the Purchaser a fee equal to any accrued and unpaid Excess Interest Amount.
Section3.9 Limited Obligation; Limited Liability.
The Issuer willpromptly pay the principalof,JJremiuni, if any, andjntereston the ]3ond on the dates aiid in the-manner provided in the Bond, but solely and only from payments to be made by the Corporation and available for such purpose hereunder, it being agreed and understood that the Bond and interest thereon shall be a limited obligation of the Issuer which are not in any way a general obligation of the Issuer nor payable in any manner from any other funds of the Issuer. The Corporation shall make such payments on behalf of the Issuer directly to the Purchaser.
The Bond, together with the interest and premium (if any) thereon shall not be deemed to constitute a debt or liability of the State or any political subdivision or agency of the State other than as a limited obligation of the Issuer or a pledge of the faith and credit of the State or any political subdivision or agency of the State, but shall be payable solely from the revenues and income derived from this Agreement (other than with respect to Unassigned Rights) and from certain funds and accounts pledged to the Purchaser under this Agreement, except funds held or required to be deposited in the Rebate Fund. The Bond is only a special, limited obligation of the Issuer as provided by the Act and the Issuer shall under no circumstances be obligated to pay the principal of, premium, if any, or interest on the Bond, or other costs incident thereto except from the revenues and funds pledged therefor pursuant to this Agreement. Neither the faith and credit nor the taxing power of the State or any political subdivision or agency of the State is pledged to the payment of the principal of, premium, if any, or interest on the Bond nor is the State or any political subdivision or agency of the State in any manner obligated to make any appropriation for such payment. The Issuer has no taxing power.
No member, director, officer, employee or agent of the Issuer nor any person executing the Bond shall be liable personally for the Bond or be subject to any personal liability or accountability by reason of the issuance of the Bond. No recourse shall be had for the payment of the principal of, premium, if any, or the interest on the Bond or for any claim based thereon or any obligation, covenant or agreement in this Agreement against any past, present or future official, officer, agent or employee of the Issuer. No covenant, stipulation, promise, agreement or obligation contained in the Bond, this Agreement or any other document executed in connection therewith shall be deemed to be the covenant, stipulation, promise, agreement or obligation of any present or future official, officer, agent or employee of the Issuer in his or her individual capacity, and no officer or official of the Issuer executing the Bond shall be liable personally on the Bond or be subject to any personal liability or accountability by reason of the issuance of the Bond.
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Notwithstanding any provision or obligation to the contrary hereinbefore set forth, no provision of this Agreement shall be construed so as to give rise to a pecuniary liability of the Issuer or to give rise to a charge upon the general credit of the Issuer, any liability of the Issuer hereunder shall be limited to amounts payable by the Corporation under this Agreement, and its interest in funds or accounts held pursuant to this Agreement and the lien of any judgment shall be restricted thereto. In the performance of the agreements of the Issuer herein contained, any obligation it may incur for the payment of money shall not be a debt of the Issuer, nor shall the Issuer be liable on any obligation so incurred. ·The Issuer does not assume general liability for the repayment of the Bond or for the costs, fees, penalties, taxes, interest, commissions, charges, insurance or any other payments recited herein, and shall be obligated to pay the same only out of the amounts payable by the Corporation hereunder. The Issuer shall not be required to do any act whatsoever or exercise any diligence whatsoever to mitigate the damages to the Corporation if a default shall occur hereunder.
Section 3.10 Further Assurances. At the expense of the Corporation, the Issuer will execute and deliver such further instruments, and do such further acts, as the Purchaser may reasonably require for the better assuring, assigning and confirming to the Purchaser the amounts
. assigned hereunder for the payment of the Bond.
Section 3.11 Tax Exemption. The Issuer covenants, to the extent within its control, to comply with all requirements that must be satisfied in order for the interest to be paid on the Bond to be excludible from gross income for purposes of federal income taxation. Toward that end, the Issuer shall comply with and take all actions expressly required of it by the Tax Agreement; provided,further, subject to the limitations on its liability as stated herein, and to the extent permitted by law, the Issuer covenants arid agrees that it has not knowingly engaged and will not knowingly engage in any activities, and that it has not knowingly taken and will not knowingly take any action, which would result in the interest to be paid on the Bond to be includible in the gross income of the Purchaser thereof for purposes of federal income taxation; provided, however, that the Issuer intends to comply with the foregoing undertakings solely through the obligations and undertakings of the Corporation to comply therewith, which the Corporation and the Purchaser hereby acknowledge.
Section 3.12 Performance of Covenants; Issuer. The Issuer covenants that it will faithfully perform on its part at all times any and all covenants, undertakings, stipulations and provisions expressly required of it in this Agreement or the Tax Agreement, in the Bond executed, authenticated and delivered hereunder and in all of its proceedings pertaining thereto; provided, however, that except for the matters hereof relating to payment of the Bond, the Issuer shall not be obligated to take any action or execute any instrument pursuant to any provision hereof until it shall have been requested to do so by the Corporation or by the Purchaser, or shall have received the instrument to be executed and at the option of the Issuer shall have received from the party requesting such action or execution assurance satisfactory to the Issuer that the Issuer shall be reimbursed for its reasonable expenses, including reasonable legal counsel fees, incurred or to be incurred in connection with taking such action or executing such instrument. Anything contained in this Agreement to the contrary notwithstanding, it is hereby understood that none of the covenants of the Issuer contained in this Agreement are intended to create a general or primary obligation of the Issuer.
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Section 3.13 Provisions for Payment of Expenses. The Issuer shall not be obligated to execute any documents or take any other action under or pursuant to this Agreement or any other document in connection with the Bond unless and until provision for the payment of expenses of the Issuer, including reasonable legal counsel fees, shall have been made. Provisions for expenses shall be deemed to have been made upon arrangements reasonably satisfactory to the Issuer for the provision of expenses being agreed upon by the Issuer and the party requesting such execution.
ARTICLE IV PAYMENTS BY THE CORPORATION
Section 4.1 . Loan Repayment. The application of the Bond Proceeds pursuant to Sections 3.1 and 3.2 hereof shall constitute the loan of such proceeds, funded in installments, by the Issuer to the Corporation. As repayment of such loan, the Corporation agrees to pay directly to the Purchaser (as the assignee of the Issuer) amounts sufficient to pay the principal of, premium, if any or interest on the Bond on each day on which any payment of principal of, premium, if any or interest on the Bond shall become due (whether on an Interest Payment Date, at maturity, or upon redemption or acceleration or otherwise). Such amounts shall be paid in immediately available funds on or before 12:00 (noon) (Pacific time). If the Corporation fails to make full payment of any principal payment required by this Section 4.1, interest on the unpaid amount shall continue to accrue until paid at the Default Rate. If the Corporation fails to make full payment of any interest payment required by this Section 4.1, the Corporation shall pay to the Purchaser a late payment charge calculated as the product of such unpaid amount, time elapsed until payment and the Default Rate.
All payments made by the Corporation to the Purchaser shall be deemed due and owing on the Bond to the same extent due and owing as principal and interest payable as repayment of the loan and the payments or prepayments of principal, interest, premiums and other costs and expenses, shall be identical under the Bond with, and shall be made on the same terms and conditions as such payments are made as principal and interest payable as repayment of the loan. Said payments by the Corporation shall be deemed to have been constructively received by the Purchaser as payments on the Bond on the date of receipt ofthe same by the Purchaser.
' Section 4.2 Prepayments. The Corporation may prepay to the Purchaser, upon not less than 14 days' prior written notice to the Purchaser and the Issuer, all or any part of the amounts payable under Section 4.1 at any time on any date that the Bond shall be subject to optional redemption, solely as provided in this Agreement and the Bond. A prepayment shall not relieve the Corporation of its obligations under this Agreement until the Bond has been paid in full or provision for the payment thereof has been made in accordance with this Agreement. In the event of an acceleration of the Bond, the Corporation agrees to prepay all amounts necessary for such acceleration. Partial prepayments of the loan made by the Corporation to the Purchaser hereunder shall reduce the principal installments hereunder in inverse order of their due date.
Section 4.3 Additional Payments to Issuer. In addition to the Loan payments required to be made by the Corporation pursuant to Section 4.1, the Corporation shall also pay to the Issuer the following (the "Additional Issuer Payments"):
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(a) All taxes and assessments of any type or character charged to the Issuer affecting the amount available to the Issuer from payments to be received hereunder or in any way arising due to the transactions contemplated hereby (including taxes and assessments assessed or levied by any public agency or Governmental Authority of whatsoever character having power to levy taxes or assessments) provided, however, that the Corporation shall have the right to protest any such taxes Gr assessments and to require the Issuer, at the Corporation's expense, to protest and contest any such taxes or assessments levied upon them and that the Corporation shall have the right to withhold payment of any such taxes or assessments pending disposition of any such protest or contest unless such withholding, protest or contest would adversely affect the rights or interests of the Issuer;
(b) The reasonable fees and expenses of such accountants, consultants, attorneys and other experts as may be engaged by the Issuer to prepare audits, financial statements, reports, opinions or provide such other services required under the Corporation Documents; and
(c) The Issuer Issuance Fee, the Issuer Annual Fee and the reasonable fees and expenses of the Issuer or any agent or attorney selected by the Issuer to act on its behalf in counection with the Corporation Documents, or the Bond, including, without limitation, any and all reasonable expenses incurred in counection with the authorization, issuance, sale and delivery of any such Bond or in connection with any litigation, investigation or other proceeding which may at any time be instituted involving this Agreement, the Corporation Documents or the Bond or any of the other documents contemplated thereby, or in connection with the reasonable supervision or inspection of the Corporation, its properties, assets or operations or otherwise in connection with the administration ofthe Corporation Documents; and
(d) Any amounts due and payable by the Corporation as arbitrage rebate under Section 148 of the Code, pursuant to Corporation's covenants and agreements with respect thereto in the Tax Agreement.
Such Additional Issuer Payments shall be billed to the Corporation by the Issuer from time to time, together with a statement certifying that the amount billed has been incurred or paid by the Issuer for one or more of the above items. After such a demand, amounts so billed shall be paid by the Corporation within thirty (30) days after the date of invoice. Notwithstanding the foregoing, the Issuer shall not be required to submit a bill to the Corporation for payment of the Issuer Annual Fee or any amounts due with respect to arbitrage rebate under Section 148 of the Code, the calculation and payment for which is the responsibility of the Corporation.
The Issuer Issuance Fee and the initial Issuer Annual Fee shall be paid to the Issuer by the Corporation on the Closing Date. Thereafter, the Issuer Annual Fee shall be due and payable by the Corporation in advance on December 1 of each year commencing with the first such date following the Closing Date. The Corporation shall pay the Annual Issuer Fee directly to the Issuer as an additional payment in accordance with this Section. Corporation's obligation to pay the Issuer Issuance Fee and the Issuer Aunual Fee shall in no way limit amounts payable by the Corporation to the Issuer under the Corporation Documents, including for the enforcement thereof.
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Section 4.4 Additional Payments to Purchaser. In addition to the payments to be made on the Bond, the Corporation shall also pay to the Purchaser the following (the "Additional Purchaser Payments"):
(a) The Corporation shall pay within thirty (30) days after demand:
(i) if an Event of Default shall have occurred, in addition to all other amounts immediately due and payable, all reasonable and documented costs and expenses of the Purchaser in connection with the enforcement (whether by means of legal proceedings or otherwise) of any of its rights under this Agreement, the other Related Documents and such other documents which may be deliverl.)d in connection therewith;
(ii) the reasonable fees and out-of-pocket expenses for counsel or other reasonably required consultants to the Purchaser in connection with advising the Purchaser as to its rights and responsibilities under this Agreement and the other Related Documents or in connection with responding to requests from the Corporation for approvals, consents and waivers; and
(iii) any amounts advanced by or on behalf of the Purchaser to the extent required to cure any Default, Event of Default or event of nonperformance hereunder or any Related Document, together with interest at the Default Rate.
(b) The Corporation agrees that if because of any new Law, Risk-Based Capital Guidelines, policy, guideline, interpretation, or directive, or because of any change in any existing Law, regulation, Risk-Based Capital Guidelines, policy, guideline, interpretation, or directive or in the interpretation thereof by any official authority, if having the force of law or in any other respect obligatory upon the Purchaser, including specifically but without limitation all requests, ruies, guidelines or directives in connection with the Dodd-Frank Wall Street Reform and Consumer Protection Act and all ruies, guidelines or directives promulgated by the Purchaser of International Settlements, or the Basel Committee on Purchasing Regulations and Supervisory Practices (or any successor or similar authority), regardless of the date enacted, adopted, issued, promuigated or implemented, which comes into effect after the date of this Agreement:
(i) the Purchaser should, with respect to this Agreement, the Bond, the other Related Documents or any transaction hereunder, be subject to any tax, charge, fee, deduction or withholding of any kind whatsoever, or
(ii) increased insurance premiums, reserve requirements, or changes in levels of reserves, deposits, insurance or capital (including any allocation of capital requirements or conditions), should be imposed on the Purchaser with respect to this Agreement, the Bond, the other Related Documents or any transactions hereunder or thereunder,
and, if any of the above-mentioned measures in (i) or (ii), should result in (A) any increase in the cost to the Purchaser of owning the Bond, or (B) any reduction in the amount of principal, interest or any fee receivable by the Purchaser in respect of the Bond or (C) any reduction in the yield or rate of return of the Purchaser on the Bond, to a level below that which the Purchaser could have achieved but for the adoption or modification of any such
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requirements; provided, the Purchaser shall not charge the Corporation for any such additional costs, fees or expenses unless the Purchaser is mandated to do so pursuant to any such Laws, Risk-Based Capital Guidelines or other directives. If the Purchaser.is mandated to charge the Corporation for such additional costs, fees or expenses, then the Corporation agrees to pay to the Purchaser such increased cost or reduction in yield or rate of return. In detetmining any such amounts, the Purchaser will act reasonably and in good faith, using averaging and attribution methods which are reasonable, and will notify the Corporation within a reasonable period after it becomes aware of any such change. Such amount shall, to the extent permitted by law, be due and payable by the Corporation to the Purchaser within thirty (30) days after written request therefor, accompanied by a certificate setting fotth in reasonable detail the basis for determining the additional compensation requested thereby; provided that the Corporation shall not be required to compensate the Purchaser pursuant to this Section for any increased cost or reduction in yield or rate or return more than one hundred eighty (I 80) days prior to the date that the Purchaser notifies the Corporation of the event giving rise to the Purchaser's intention to claim compensation hereunder.
(c) Taxes.
(i) To the extent permitted by law, any and all payments by the Corporation hereunder or under the Bond shall be made free and clear of and without deduction for any and all Taxes by the jurisdiction of the Purchaser's applicable lending office or any political subdivision thereof. If the Corporation shall be required by law to withhold or deduct any Taxes froin or in respect of any sum payable hereunder or·under the Bond, then, to the extent permitted by law, (A) the sum payable shall be increased as may be necessary so that after making all required withholdings or deductions (including those applicable to additional sums payable under this Section 4.4(c)) the Purchaser receives an amount equal to the sum it would have received had no such withholdings or deductions been made, (B) the Corporation shall make such withholdings or deductions and (C) the Corporation shall pay the full amount withheld or deducted to the relevant taxation authority or other authority in accordance with applicable law. Notwithstanding anything to the contrary contained herein, the Corporation shall not be required to pay any additional amount in respect of withholding of United States federal income taxes pursuant to this Section to the extent such withholding is required because the Purchaser has failed to submit any form or certificate that it is entitled to submit under applicable law to qualify for an exemption from such withholding.
(ii) In addition, to the extent permitted by law, the Corporation agrees to pay any present or future stamp or documentary taxes, charges or similar levies that arise under the laws of the United States of America, the Commonwealtlt of Massachusetts and the State from any payment made or received hereunder or received under the Bond or from the execution or delivery or otherwise with respect to this Agreement or the other Related Documents (hereinafter referred to as "Other Taxes").
(iii) Payments by the Corporation pursuant to this Section shall be made within thirty (3 0) days from the date the Purchaser makes written demand therefor which demand shall be accompanied by a certificate describing in reasonable detail the basis thereof, which shall be correct absent manifest error.
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(iv) Within thirty (30) days after the date of any payment by the Corporation of Taxes in respect of any sum payable hereunder or on the Bond, the Corporation shall furnish to the Purchaser, at its address referred to herein, the original or a certified copy of a receipt evidencing payment thereof. The Corporation shall compensate the Purchaser for all losses and expenses sustained by the Purchaser as a result of any failure by the Corporation to so furnish such copy of such receipt; provided, that the Corporation shall not be obligated to pay the Purchaser for any losses or expenses relating to Taxes or Other Taxes arising from the Purchaser's gross negligence or willful misconduct or that were incurred or paid (or required to be paid) more than one hundred eighty (180) days prior to the date that the certificate described in clause (iii) above is delivered to the Corporation.
(v) If the Purchaser determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes or a Tax Credit as to which it has been indemnified by the Corporation or with respect to which the Corporation has paid additional amounts pursuant to this Section, it shall pay to the Corporation an amount equal to such refund or Tax Credit (but only to the extent of indemnity payments made, or additional amounts paid, by the Corporation under this Section with respect to the Taxes giving rise to such refund or Tax Credit), net of all reasonable out-of-pocket expenses (including Taxes) incurred by the Purchaser, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund or Tax Credit); provided that the Corporation, upon the request of the Purchaser, agrees to repay the amount paid over to the Corporation (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Purchaser in the event the Purchaser is required to repay such refund or Tax Credit to such Governmental Authority. Notwithstanding anything to the contrary in this subsection, in no event will the Purchaser be required to pay any amount to the Corporation pursuant to this subsection, the payment of which would place the Purchaser in a less favorable net after-tax position than the Purchaser would have been in if the indemnification payments or additional amounts giving rise to such refund or Tax Credit had never been paid. This subsection shall not be construed to require the Purchaser to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Corporation or any other Person.
Section 4. 5 Unconditional Obligation. The obligations of the Corporation to make or cause to be made the loan payments and Additional Issuer Payments and Additional Purchaser Payments and to perform and observe the other agreements on its part contained in this Agreement shall be absolute and unconditional general obligations of the Corporation, payable from gross revenues of the Corporation or any other legally available source of funds, irrespective of any defense or any rights of setoff, recoupment or counterclaim it might otherwise have against the Issuer or the Purchaser, and during the term of this Agreement, the Corporation shall pay absolutely the loan payments under Section 4.1, the Additional Issuer Payments and the Additional Purchaser Payments and all other payments required hereunder, free of any deductions, and without abatement, diminution or setoff. Until such time as the principal of and premium, if any, and interest on the Bond shall have been fully paid, the Corporation (i) will not suspend or discontinue any such loan payments, the Additional Issuer Payments or the Additional Purchaser Payments, (ii) will perform and observe all of its other agreements contained in this Agreement with respect to the Bond and the Project; and (iii) will not terminate this Agreement for any cause, including, without limiting the generality of the foregoing, the occurrence of any act or circumstances that may constitute failure of consideration, destruction
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of or damage to, or taking or condemnation of all or any part of the Project, commercial frustration of purpose, any change in the tax or other laws of the United States of America or of the State or any political subdivision of either or any failure of the Issuer or the Purchaser to perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or connected with this Agreement. This Agreement shall be deemed and construed to be a "net contract," and the Corporation shall pay absolutely net the loan payments, Additional Issuer Payments and Additional Purchaser Payments and all other payments required hereunder, free of any deductions, without abatement, diminution or set off other than those herein expressly provided.
ARTICLE V COMPLETION CERTIFICATE
Section 5.1 Completion of Project.
(a) The Corporation covenants and agrees to apply such moneys as are necessary, in addition to the moneys from time to time on deposit in the Construction Fund, to complete, or cause to be completed, the Project with reasonable dispatch, substantially in accordance with the Plans and Specifications and to deliver the Completion Certificate referred to in subparagraph (b) below, unless the Corporation certifies to the Issuer and the Purchaser that such completion is not in the best interests of the Corporation, which certification shall set forth the reasons for such determination by the Corporation. If the Corporation shall so determine (x) not to complete any portion of the Project or (y) to fund such portion from any other source, such portion of the Project shall no longer be deemed to be within the meaning of the term "Project" for any purpose of this Agreement.
THE CORPORATION RECOGNIZES THAT THE ISSUER AND THE PURCHASER HAVE NOT MADE AN INSPECTION OF THE PROJECT OR OF ANY FIXTURE OR OTHER ITEM CONSTITUTING A PORTION THEREOF, AND THE ISSUER AND THE PURCHASER MAKE NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED OR OTHERWISE, WITH RESPECT TO THE SAME OR THE LOCATION, USE, DESCRIPTION, DESIGN, MERCHANTABILITY, FITNESS FOR USE FOR ANY PARTICULAR PURPOSE, CONDITION OR DURABILITY THEREOF, OR AS TO THE CORPORATION'S TITLE THERETO OR OWNERSHIP THEREOF OR OTHERWISE, IT BEING AGREED THAT ALL RISKS INCIDENT THERETO ARE TO BE BORNE BY THE CORPORATION. IN THE EVENT OF ANY DEFECT OR DEFICIENCY OF ANY NATURE IN THE PROJECT OR ANY FIXTURE OR OTHER ITEM CONSTITUTING A PORTION THEREOF, WHETHER PATENT OR LATENT, THE ISSUER AND THE PURCHASER SHALL HAVE NO RESPONSIBILITY OR LIABILITY WITH RESPECT THERETO. THE PROVISIONS OF THIS SECTION 5.2 HAVE BEEN NEGOTIATED AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY WARRANTIES OR REPRESENTATIONS BY THE ISSUER AND THE PURCHASER, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROJECT OR ANY FIXTURE OR OTHER ITEM CONSTITUTING A PORTION THEREOF, WHETHER ARISING PURSUANT TO THE UNIFORM COMMERCIAL CODE OF THE STATE OR ANOTHER LAW NOW OR HEREAFTER IN EFFECT OF OTHERWISE.
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The Corporation agrees that if, after exhaustion of the moneys in the Construction Fund, the Corporation should pay, or deposit moneys in the Construction Fund for the payment of, any portion of the Costs of the Project pursuant to the provisions of this Section 5.1, it shall not be entitled to any reimbursement therefor from the Issuer or the Purchaser, nor shall it be entitled to any diminution of the amounts payable under this Agreement. THE ISSUER AND THE PURCHASER DO NOT MAKE ANY WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, THAT THE MONEYS WHICH WILL BE DEPOSITED INTO THE CONSTRUCTION FUND, AND WHICH UNDER THE PROVISIONS OF THIS AGREEMENT WILL BE AVAILABLE FOR PAYMENT OF THE COSTS OF THE PROJECT, WILL BE SUFFICIENT TO PAY ALL OF THE COSTS WHICH WILL BE INCURRED IN CONNECTION THEREWITH.
The Corporation agrees that during the term of this Agreement the Issuer and the Purchaser and any representative thereof shall have the right at all reasonable times, upon reasonable notice, to enter upon the premises and examine and inspect the Project for the purpose of determining whether the Corporation is in compliance with the terms of this Agreement and the Tax Agreement and to copy at the principal office of the Corporation all books, records and other documents of the Corporation relating to the number and types of jobs at the Project. The Issuer shall have no obligation to investigate whether the Corporation is in compliance with the terms of this Agreement, and the Tax Agreement and no examination or inspection pursuant to this paragraph shall create such an obligation.
(b) Completion Certificate. The Corporation agrees to deliver to the Issuer and the Purchaser within 90 days after the completion of the Project, a copy of the certificate of occupancy issued by the appropriate official having jurisdiction over the Project, a set of final Plans and Specification showing the Project "as built" and a Completion Certificate signed by an Authorized Official of the Corporation stating that:
(i) all portions of the Project have been fully completed in accordance with any Plans and Specifications therefor, as then amended, and the date of completion; and
(ii) such persons have made such investigation of such sources of information as are deemed by such persons to be necessary, including pertinent records of the Corporation, and are of the opinion that the Project has been fully paid for and that no claim or claims exist against the Corporation or against the properties of the Corporation, out of which a lien based on furnishing labor or material for the Project exists or might ripen; provided, however, there may be excepted from the foregoing statement any claim or claims out of which a lien exists or might ripen in the event that the Corporation intends to contest such claim or claims, in which event such claim or claims shall be described; provided, further, however, that in such event such certificate shall state that amounts are on deposit in the Construction Fund which, together with a reasonable estimate of investment income to be earned thereon and on the other Funds to the extent such income is required to be deposited into the Construction Fund and any other moneys then on hand at the Corporation or committed to the Corporation which are or will be available, and are anticipated by the Corporation to be applied, to pay Costs of the Project, are sufficient to make payment of the full amount which might in any event be payable in order to satisfy such claim or claims.
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In the event such certificate shall state that there is · a claim or claims in controversy which create or might ripen into a lien, there shall be filed with the Issuer and the Purchaser a certificate of the Corporation signed by its Authorized Official stating that such claim or claims have been paid when the same has in fact occurred; and
(iii) the withdrawal of moneys from the Construction Fund and the use of the property financed, refinanced or reimbursed therefrom will not cause any of the representations or certifications contained in the Tax Agreement to be untrue or result in a violation of any term or covenant in the Tax Agreement.
Section 5. 2 Obligation to Continue Payments. If prior to full payment of the Bond (or provision for payment thereof in accordance with the provisions of this Agreement) (a) the Project or any portion thereof is destroyed (in whole or in part) or is damaged by fire or other casualty, or (b) title to, or the temporary use of, the Project or any portion thereof shall be taken under the exercise of the power of eminent domain by any governmental body or by any person, firm or corporation acting under the authority of any Governmental Authority having jurisdiction over the Corporation or the Project, the Corporation shall nevertheless be obligated to continue to pay the amounts specified in Section 4.1 hereof, to the extent not prepaid in accordance with Section 3.5 hereof. ·
Section 5.3 Insufficiency of Net Proceeds. If(in the discretion of the Corporation) any damaged portion of the Project is to be repaired, restored, relocated, modified or improved, and if the Net Proceeds are insufficient to pay in full the cost of such repair, restoration, relocation, modification or improvement, the Corporation will nonetheless complete the work or cause the work to be completed.
ARTICLE VI CORPORATION COVENANTS
Section 6.1 Financing Statements. The Issuer shall have no responsibility for the preparation, filing or recording of any instrument, document or financing statement or for the maintenance of any security interest intended to be perfected thereby. The Issuer will execute such instruments provided to it by the Corporation as may be reasonably necessary in connection with such filing or recording.
Section 6.2 Corporation's Obligation with Respect to Exclusion of Interest Paid on the Bond. The Corporation will not take any action, omit to take any action or permit the taking or omission of any action within its control (including, without limitation, making or permitting any use of the proceeds of the Bond) if taking or omitting to take such action would result in the revocation or modification of its status as an organization described in Section 501(c)(3) of the Code or would cause the interest on the Bond to be included in the gross income of the owoers thereof for federal income tax purposes. Toward that end, the Corporation covenants that it will comply with all provisions of the Tax Agreement. This provision shall control in case of conflict or ambiguity with any other provision of this Agreement.
Section 6.3 Maintenance of Corporate Existence and Tax Status. The Corporation agrees that (a) it will at all times maintain its existence as a nonprofit corporation organized under the laws of the State; (b) it will not take any action or permit any action to be taken by
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others within its control which will alter, change or destroy its status as a nonprofit corporation or its status as a Tax Exempt Organization; and (c) it will not fail to take any action within its control to preserve its status as a nonprofit corporation or its status as a Tax Exempt Organization.
The Corporation further covenants that none of its revenues, income or profits, whether realized or unrealized, will be distributed to any of its officers or trustees or inure to the benefit of any private person, association or corporation, other than for the lawful corporate purposes of the Corporation, including but not limited to the Corporation's ability to pay to any person employed by Corporation a salary and otherwise to any person, association or corporation the reasonable value of any service or product performed for or supplied to the Corporation by such person, association or corporation.
Section 6. 4 Merger; Dissolution of Corporation. The Corporation agrees that unless it complies with the following provisions of this Section 6.4, as long as the Bond is outstanding it will maintain its existence, will not dissolve, liquidate or otherwise dispose of all or substantially all of its assets, and will not consolidate with or merge into another corporation or permit one or more other corporations to consolidate with or merge into it. Any dissolution, liquidation, disposition, consolidation or merger shall be subject to the following conditions:
(a) the Corporation provides a certificate to the Issuer and the Purchaser, in form and substance satisfactory to such parties, to the effect that no event of default exists hereunder or under any of the Corporation Documents and that no such event of default will be caused by the dissolution, liquidation, disposition, consolidation or merger;
(b) the entity surviving the dissolution, liquidation, disposition, consolidation or merger assumes in writing and without condition or qualification the obligations of the Corporation under each of the Corporation Documents, and the provisions of the Act and the Corporation Documents are complied with concerning the dissolution, liquidation, disposition, consolidation or merger;
(c) the Corporation or the entity surviving the dissolution, liquidation, disposition, consolidation or merger, within ten (10) days after execution thereof, furnishes to the Issuer and the Purchaser a true and complete copy of the instrument of dissolution, liquidation, disposition, consolidation or merger;
(d) neither the validity nor the enforceability of the Bond or any agreements to which the Corporation is a party is adversely affected by the dissolution, liquidation, disposition, consolidation or merger;
· (e) the exclusion of the interest on the Bond from gross income for federal income tax purposes is not adversely affected by the dissolution, liquidation, disposition, consolidation or merger;
(f) no rating on the Bond, if the Bond is then rated, is reduced or withdrawn as a result of the dissolution, liquidation, disposition, consolidation or merger;
(g) the Project continues to be as described herein;
OHSUSA:751727866.8 33
(h) any successor to the Corporation shall be qualified to do business in the State and shall continue to be qualified to do business in the State throughout the term hereof; and
(i) the Purchaser consents in writing to such dissolution, liquidation, disposition, consolidation or merger.
As of the effective date of the dissolution, liquidation, disposition, consolidation or merger, the Corporation (at its cost) shall furnish to the Issuer and the Purchaser (i) an Opinion of Bond Counsel, in form and substance satisfactory to such parties, as to items (d) and (e) above, and (ii) an Opinion of Counsel, in form and substance satisfactory to such parties, as to the legal, valid and binding nature and compliance matters of item (b) above and the Issuer and the Purchaser shall execute a certificate acknowledging receipt of all documents, information and materials required by this Section 6.4.
Section 6.5 Operation, Sale, Lease or Sublease of the Financed Properties. The Corporation will not make any material change in its use of the Financed Properties unless the Purchaser and the Issuer receive an Opinion of Bond Counsel to the effect that such change will not be in violation of the Act or impair the exclusion of interest on the Bond from the gross income of the owners thereof for federal income tax purposes.
The Corporation will operate the Financed Properties, or cause any lessee or other user of the Financed Properties to operate the Financed Properties, consistent with the purposes in the Act, in conformity with the Tax Agreement and in such a mauner that it will not impair the· exclusion of interest on the Bond from gross income of the owners thereof for federal income tax purposes.
Upon a sale, lease or sublease of all or any portion of the Corporation's interest in the Financed Properties that requires the Consent of the Purchaser hereunder or under the Covenants Agreement, if requested by the Purchaser, the Corporation will obtain, or cause there to be obtained, the agreement of the purchaser, lessee or sublessee of the Financed Properties or any interest therein to comply with the provisions of this Section, regardless of whether such purchaser, lessee or .sublessee assumes the obligations of the Corporation under this Agreement generally, and will provide the Issuer and the Purchaser with an Opinion of Bond Counsel to the effect that the sale, lease or sublease will not adversely affect the exclusion of the interest on the Bond from the federal gross income of the owners thereof.
Section 6.6 Taxes, Charges and Assessments. Subject to the provisions of Section 6.8 hereof, to the extent that the Corporation or its properties are or become liable to taxation, the Corporation covenants and agrees to pay or cause to be paid (when the same shall become due and payable) all lawful taxes, charges, assessments and other governmental levies against the Corporation or its properties. If under applicable law any such tax, charge, fee, rate, imposition or assessment may at the option of the taxpayer be paid in installments, the Corporation may exercise such option.
Nothing contained in this Section 6.6 shall be deemed to constitute an admission by either the Issuer or the Corporation that either the Issuer or the Corporation is liable for any tax, charge, fee, rate, imposition or assessment.
OHSUSA:751727866.8 34
Section 6. 7 Compliance with Laws; Taxes and Assessments. Subject to the provisions of Section 6.8 hereof, the Corporation will, at its sole cost and expense comply with all applicable present and future laws, ordinances, orders, decrees, rules, regulations and requirements of every duly constituted Governmental Authority, commission and court and the officers thereof of which it has notice, the failure to comply with which would materially and adversely affect the operations, properties or financial condition of the Corporation taken as a whole or which may be applicable to the Project or to the repair and alteration thereof, or to the use or manner of use of the Project, including, but not limited to the Americans with Disabilities Act, all federal, state and local environmental and health and safety laws, rules, regulations and orders applicable to or pertaining to the Project and the Federal Worker Adjustment and Retraining Notification Act. The Corporation agrees to use all reasonable efforts to gain knowledge of such ordinances, orders, decrees, rules, regulations and requirements.
Section 6.8 Permitted Contests. The Corporation shall not be required to pay any tax, charge, fee, rate, assessment or imposition required to be paid under Section 6.6 hereof, or to comply with any law, ordinance, rule, order, decree, regulation or requirement referred to in Section 6. 7 hereof, so long as the Corporation shall in good faith and at its cost and expense contest the amount or validity thereof, or take other appropriate action with respect thereto, in an appropriate manner or by appropriate proceedings which shall operate during the pendency thereof to prevent (i) the collection of or other realization upon the tax, fee, rate, assessment, imposition or charge, so contested, (ii) the sale, forfeiture or loss of its Property or any part thereof to satisfy the same or (iii) any materially adverse effect on the use, occupancy or condition of the Corporation's property taken as a whole; provided that no such contest or action shall subject the Issuer or the Purchaser to any liability unless the Corporation properly indemnifies the Issuer. While any such matters are pending, the Corporation shall have the right to pay, remove or cause to be discharged or marked exempt the tax, and assessment, imposition or charge being contested. Each such contest shall be promptly prosecuted to final conclusion or settlement, ~d the Corporation will pay, and save the Issuer harmless against, all losses, judgments, decrees and costs (including attorneys' fees and expenses in connection therewith) and will, promptly after the final determination or settlement of such contest or action, pay and discharge the amounts which shall be levied, assessed or imposed or determined to be payable therein, together with all penalties, fines, interests, costs and expenses thereon or in connection therewith.
Section 6. 9 Reports. The Corporation shall, within 60 days of the receipt of a written request from the Issuer, furnish a written report to the Issuer, as of the end of the Corporation's prior Fiscal Year, stating the outstanding and unpaid balance of the Bond, and supplying such current information as the Issuer shall reasonably request.
Section 6.10 Use ofthe Project; Financed Properties.
(a) The Corporation will use the Project only in furtherance of the lawful corporate purposes of the Corporation and the Act.
(b) To the extent required by law, the Corporation will permit the Issuer to inspect the Project upon reasonable notice and during regular business hours solely in order to determine
OHSUSA:751727866.8 35
whether the Corporation has complied with the provisions of this paragraph and such right of inspection shall survive the termination of this Agreement.
The Corporation further agrees that it will not use the Financed Properties, or permit the Financed Properties to be used, in such manner as would result in the loss of the exclusion from federal gross income of the Purchaser of the interest paid on the Bond otherwise afforded under Section 103(a) of the Code.
Section 6.11 Maintenance of Properties. The Corporation covenants to preserve and keep its Properties in good repair and order and from time to time will make all repairs, replacements, renewals and additions deemed necessary by the Corporation for the efficient functioning thereof; provided, however, that the foregoing shall not prevent the Corporation from selling, removing or demolishing any Properties, or any portion thereof, not considered by the Corporation to be necessary or useful for the efficient conduct of its activities, so long as such act or acts are consistent with and not in violation of any terms, covenants or provisions of the Tax Agreement.
Section 6.12 Covenants to Purchaser. The Corporation is making certain covenants for the benefit of the Purchaser (but not for the benefit of the Issuer or any other party) which covenants are set forth in the Covenants Agreement. The Corporation and the Purchaser may
·amend the Covenants Agreement without notice to or consent of any other party, provided any such amendment shall not adversely affect the tax status of interest on the Bond.
ARTICLE VII INDEMNIFICATION
Section 7.1 Indemnification.
(a) The Corporation shall pay and indemnify the Issuer against all reasonable fees, costs and charges, including reasonable fees and expenses of attorneys, accountants, consultants and other experts, incurred in good faith and arising out of or in connection with the Corporation Documents or the Bond.
(b) To the fullest extent permitted by law, the Corporation agrees to indemnify, hold harmless and defend the Issuer, and its past, present and future officers, members, directors, officials, employees, attorneys and agents (collectively, the "Indemnified Parties"), against any and all losses, damages, claims, actions, liabilities, costs and expenses of any conceivable nature, kind or character (including, without limitation, reasonable attorneys' fees, litigation and court costs, amounts paid in settlement and amounts paid to discharge judgments) to which the Indemnified Parties, or any of them, may become subject under or any statutory law (including federal or state securities laws) or at common law or otherwise, arising out of or based upon or in any way relating to:
(i) the Bond, the Corporation Documents or the Tax Agreement or the execution or amendment hereof or thereof or in connection with transactions contemplated hereby or thereby, including the issuance, sale or resale of the Bond;
(ii) any act or omission of the Corporation or any of its agents, contractors, servants, employees, tenants or licensees in connection with the Project, the operation of the
OHSUSA:751727866.8 36
Project, or the condition, environmental or otherwise, occupancy, use, possession, conduct or management of work done in or about, or from the planning, design, acquisition, installation or construction of, the Project or any part thereof;
(iii) any lien or charge upon payments by the Corporation to the Issuer and the Purchaser hereunder, or any taxes (including, without limitation, all ad valorem taxes and sales taxes), assessments, impositions and other charges imposed on the Issuer or the Purchaser in respect of any portion of the Project;
(iv) any violation of any Environmental Regulations with res!l-"ec,..t._t._o"-, _,o00r--'t~hcce ____ _ release·ofany-Hazardous--Substancesfrom;the-Projector-any-part-thereof;··---------~-----
(v) the defeasance and/or redemption, in whole or in part, of the Bond; or
(vi) any declaration of taxability of interest on the Bond, or allegations that interest on the Bond is taxable or any regulatory audit or inquiry regarding whether interest on the Bond is taxable;
except the foregoing indemnification shall not be available to the Issuer or any of its officers, members, directors, officials, employees, attorneys and agents, to the extent such damages are caused by the willful misconduct of such Indemnified Party. In the event that any action or proceeding is brought against any Indemnified Party with respect to which indemnity may be sought hereunder, the Corporation, upon written notice from the Indemnified Party, shall assume the investigation and defense thereof, including the employment of counsel selected by the Indemnified Party, and shall assume the payment of all expenses related thereto, with full power to litigate, compromise or settle the same in its sole discretion; provided that the Indemnified Party shall have the right to review and approve or disapprove any such compromise or settlement. Each Indemnified Party shall have the right to employ separate counsel in any such action or proceeding and participate in the investigation and defense thereof, and the Corporation shall pay the reasonable fees and expenses of such separate counsel; provided, however, that such Indemnified Party may only employ separate counsel at the expense of the Corporation if in the judgment of such Indemnified Party a conflict of interest exists by reason of common representation or if all parties commonly represented do not agree as to the action (or inaction) of counsel. ·
(c) The rights of any persons to indemnity hereunder shall survive the final payment or defeasance of the Bond. The provisions of this Section shall survive the termination of this Agreement.
ARTICLE VIII ASSIGNMENT
Section 8.1 Assignment by Corporation. The rights of the Corporation under this Agreement may be assigned to, and the obligations of the Corporation assumed by, another party in whole or in part, but only with the prior written consent of the Purchaser and the Issuer and the Issuer's consent not to be unreasonably withheld. No such assignment will be made, however, unless the Corporation causes there to be delivered to the Purchaser and the Issuer an Opinion of
OHSUSA:751727866.8 37
Bond Counsel to the effect that such assignment will not cause interest on the Bond to be includable in the gross income of the owners thereof for federal income tax purposes.
Section 8.2 Assignment by Issuer. The Issuer hereby assigns and grants to the Purchaser a security interest in any and all of the Issuer's right, title and interest in this Agreement other than the Unassigned Rights, including (a) all amounts payable by the Corporation to it hereunder and all rights to enforce the same, excluding only the Unassigned Rights, and (b) all funds and accounts created or held by any party pursuant to this Agreement. The Issuer will not sell, assign or otherwise dispose of its rights under or interest in this Agreement nor create or permit to exist any lien, encumbrance or other security interest in or on such rights or interest, except as set forth above.
ARTICLE IX DEFAULTS AND REMEDIES
Section 9.1 Events of Default. An "Event of Default" is any of the following:
(a) There is a failure to make due and punctual payment of any interest on any Bond within two (2) Business Days after the date on which the same is due.
(b) There is a failure to make due and punctual payment of principal of or premium, if any, on any Bond within two (2) Business Days after the date on which the same is due, at maturity, upon acceleration or redemption or otherwise.
(c) The Corporation fails to perform any of its agreements in this Agreement (except for a failure that results in an Event of Default under clause (a) or (b) of this Section) or in the Covenants Agreement and to remedy such default within 30 days after written notice thereof from the Purchaser or the Issuer to the Corporation, unless the nature of the default is such that it cannot be remedied within the thirty day period and the Corporation has instituted corrective action within a period of time reasonably agreed to by the Purchaser and diligently pursues such action until the default is remedied.
(d) The Corporation pursuant to or within the meaning of any Bankruptcy Law (as defined below) (i) commences a voluntary case, (ii) consents to the entry of an order for relief against it in an involuntary case, (iii) consents to the appointment of a Custodian (as defined below) for the Corporation, or any substantial part of its Property or (iv) makes a general assignment for the benefit of its creditors.
(e) A petition is filed with respect to the Corporation by a Person other than the Corporation under any Baulcruptcy Law and is not dismissed within 60 days after such filing.
(f) A court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against the Corporation in an involuntary case, (ii) appoints a Custodian for the Corporation or any substantial part of its Property or (iii) orders the winding up or liquidation of the Corporation.
(g) Any representatipn or warranty made by the Corporation herein or in any statement or certificate furnished to the Issuer or the Purchaser of the Bond in connection with
OHSUSA:751727866.8 38
the sale thereof or furnished by the Corporation pursuant hereto is found to have been untrue in any material respect as of the date of the issuance or making thereof.
(h) default under any instrument under which there may be issued or by which there may be secured or evidenced any Debt (as such term is defined in the Covenants Agreement) of the Corporation if that default either (i) is caused by a failure to make any payment when due on such Debt, after giving effect to any applicable grace periods or (ii) results in the acceleration of such Debt prior to its express maturity, and, in each case, the amount of any such Debt exceeds $1,000,000 or more.
··-(i)--··--anyfinal-judgment-orjudgmentswhichare-not-covered-in-fullby-insurarrce;-with-------WJ"itten-aGknGwledgement-Gf--suGh-GGverage-ha¥ing-been-pm¥ided-by-the-pm¥ider-of-such, ____ _
insurance coverage to the Purchaser, in an aggregate amount greater than $500,000 shall be entered or filed against the Corporation or against any of its Property and remains unsatisfied, unvacated, unbonded or unstayed for a period of thirty (30) days.
G) An event of default by the Corporation occurs and is continuing under any Corporation Documents (including, but not limited to, the Covenants Agreement) or the Bond (after the expiration of any applicable cure period).
(k) (i) The construction of the Project at any time is discontinued or not carried on with diligence and dispatch, in the reasonable judgment of the Purchaser, or has not been completed in a good and workmanlike manner in accordance with this Agreement and all laws, rules, regulations and requirements of all govermnental authorities having or claiming jurisdiction, now existing or hereafter enacted, adopted or promulgated, or (ii) the certificate of completion for the Project or other certificates of compliance with zoning ordinances and building regulations applicable thereto have not been issued by December 31,2015.
(I) The Project is, in the reasonable judgment of the Purchaser, materially injured or destroyed by fire, casualty, or otherwise and the insurance proceeds therefrom, together with other moneys made available by the Corporation, are insufficient to restore the Project to its condition irmnediately prior to such casualty.
(m) If the Project or any portion thereof of the Borrower shall ever become subject to foreclosure, attachment, garnishment, execution of levy and such action is not discharged or dismissed within thirty (30) days after filing.
(n) If the business of the Borrower as a going concern is at any time discontinued or terminated.
"Bankruptcy Law" means Title 11 of the United States Code or any similar federal or State law for the relief of debtors. "Custodian" means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law.
Section 9.2 Acceleration. If any Event of Default occurs and is continuing, the Purchaser by notice to the Issuer and the Corporation (except for an Event of Default under clause (e), (f) or (g) of the foregoing Section, for which a declaration can be made without any notice), may declare the principal of, premium if any, and accrued interest on the Bond to be due
OHSUSA:751727866.8 39
and payable immediately, and such principal, premium, if any, and interest shall thereupon become and be immediately due and payable. Such payment shall be deemed a prepayment.
The Purchaser may rescind an acceleration and its consequences if all existing Events of Default have been cured or waived, so long as such rescission does not conflict with any judgment or decree.
Section 9.3 Other Remedies. If an Event of Default occurs and is continuing, the Purchaser may pursue any available remedy by proceeding at law or in equity to collect the principal of, premium, if any, or interest on the Bond or to enforce the performance of any provision of the Bond or this Agreement.
A delay or omission by the Purchaser in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative.
Section 9.4 Waiver of Past Defaults .. The Purchaser by notice to the Issuer and the Corporation may waive an existing Event of Default and its consequences. If the Purchaser waives an Event of Default, it shall be deemed to be cured and shall no longer be deemed to be continuing, but no such waiver shall extend to any subsequent or other Event of Default or impair any right consequent to it.
Section 9.5 Purchaser May File Proofs of Claim. The Purchaser may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Purchaser allowed in any judicial proceedings relative to the Corporation, its creditors or its Property and, unless prohibited by law or applicable regulations, may vote on behalf of the Purchaser in any election of a trustee in bankruptcy or other person performing similar functions.
Section 9.6 Attorneys' Fees and Expenses. If the Corporation should default under any provision of this Agreement and the Issuer or the Purchaser should employ attorneys or incur other expenses for the colleCtion ofthe payments due under this Agreement, the Corporation will on demand pay to the Issuer or the Purchaser, as the case may be the reasonable fees of such attorneys and such other reasonable expenses so incurred by the Issuer or the Purchaser, as the case maybe.
Section 9. 7 No Remedy Exclusive. No remedy herein conferred upon or reserved to the Issuer or the Purchaser is intended to be exclusive of any other available remedy or remedies. but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement, now or hereafter existing, at law or in equity or by statute. No delay or omission to exercise any right or power and accruing upon any Event of Default hereunder shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient.
OHSUSA:751727866.8 40
ARTICLE X MISCELLANEOUS
Section 10.1 Notices.
(a) Any notice, request, direction, designation, consent, acknowledgment, certification, appointment, waiver or other communication required or permitted by this Agreement or the Bond must be in writing except as expressly provided otherwise in this Agreement or the Bond.
(b) Any notice or other communication shall be sufficiently given and deemed given --- -when-delivered-by-hand,-mailed-by-first-class-mail,-postage-prepaid;-or-delivered-by-ovemight
______ ,courier_addressed_as.follo.ws-(or_at.suclLother-address_as_a_party_may_designate_b:y--llotice_to_the ____ _ other parties):
If to the Issuer:
If to the Corporation:
If to the Purchaser:
With a copy to:
California Municipal Finance Authority 2111 Palomar Airport Rd., Suite 320 Carlsbad, CA 92011 Attention: Financial Advisor Telephone: (760) 930-1221 Facsimile: (760) 683-3390
The Nueva School 6565 Skyline Boulevard Hillsborough, CA 94010 Attention: Associate Head of School Telephone: (650) 350-4529 Facsimile: (650) 344-9302
Boston Private Bank & Trust Company 160 Bovet Road San Mateo, CA. 94402 Attention: Clancy Swanson-Stein Telephone: (650) 463-8713 Facsimile: (650) 463-8705
Boston Private Bank & Trust Company Ten Post Office Square Boston, MA 02109 Attention: National Non-Profit c/o Gisela LoPiano Telephone: (617) 912-4468 Facsimile: (617) 912-4554
Any addressee may designate additional or different addresses for purposes of this Section.
OHSUSA:751727866.8 41
Section 10.2 Recordkeeping by Purchaser; Inspection by Issuer. The Purchaser shall keep, or cause to be kept, proper books of records and accounts in which complete and accurate entries shall be made of all funds and accounts established by or pursuant to this Agreement, which shall at all reasonable times be subject to the inspection by the Issuer.
Section 10.3 Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon the Issuer, the Corporation, the Purchaser and their respective successors and assigns.
Section 10.4 Severability. If any provision of this Agreement shall be determined to be unenforceable at any time, that shall not affect any other provision of this Agreement or the enforceability of that provision at any other time.
Section 10.5 Amendments. Except as otherwise provided herein, after the issuance of the Bond, this Agreement may not be effectively amended or terminated without the written consent of the parties hereto.
Section 10.6 Right of Corporation to Perform Issuer's Agreements. The Issuer irrevocably authorizes and empowers the Corporation to perform in the name and on behalf of the Issuer any agreement made by the Issuer in this Agreement which the Issuer fails to perform in a timely fashion if the continuance of such failure could result in an Event of Default. This Section will not require the Corporation to perform any agreement of the Issuer.
Section 10. 7 Governing Law; Venue. This Agreement shall be construed in accordance · with and governed by the Constitution and laws of the State applicable to contracts made and performed in the State. This Agreement shall be enforceable in the State, and any action arising out of this Agreement shall be filed and maintained in San Diego County, California, unless the Issuer waives this requirement.
Section 10.8 Captions; References to Sections. The captions in this Agreement are for convenience only and do not define or limit the scope or intent of any provisions or Sections of this Agreement. References to Articles and Sections are to the Articles and Sections of this Agreement, unless the context otherwise requires.
Section 10.9 Complete Agreement. This Agreement represents the entire agreement between the Issuer, the Purchaser and the Corporation with respect to its subject matter.
Section 10.10 Terms of this Agreement; Discharge. This Agreement shall be in full force and effect from the date hereof, and shall continue in effect until the payment in full of all principal of, premium, if any, and interest on the Bond; all fees, charges, indemnities and expenses of the Issuer, the Bond Registrar and the Purchaser have been fully paid or provision made for such payment (the payment of which fees, charges, indemnities and expenses shall be evidenced by a written certification of the Corporation that it has fully paid or provided for all such fees, charges, indemnities and expenses), and all other amounts due hereunder have been duly paid or provision made for such payment. The principal of, premium, if any, and interest on the Bond may be deemed paid in full in advance of the actual payment thereof if an irrevocable escrow is funded for such purpose in form and substance satisfactory to the Purchaser. All representations, certifications and covenants by the Corporation as to the indemnification of
OHSUSA:751727866.8 42
various parties and the payment of fees and expenses of the Issuer and all matters affecting the tax exempt status of the Bond shall survive the termination of this Agreement.
Upon the termination of this Agreement as aforesaid, all amounts on deposit in any funds or accounts created hereunder shall be paid in the following order: (a) to the Purchaser, to the extent any amounts remain owing to the Purchaser hereunder, and shall be credited against any indebtedness evidenced by the Bond or other Corporation Documents, (b) to the Issuer, to the extent any amounts remain owing to the Issuer hereunder, and (c) to the Corporation.
Section 10.11 Counterparts. This Agreement may be signed in several counterparts. Each willbe-an-original;-butall-of-them-together-constitute·the· same instrument
Section 10.12 Payments/Actions Due on Non Business Days. If any date for the payment of principal of, premium, if any, or interest on any Bond, or the taking of any other action required or permitted to be taken hereunder, is not a Business Day, then such payment shall be due, or such action shall or may be taken, as the case may be, on the first Business Day thereafter. ·
OHSUSA:751727866.8 43
IN WITNESS WHEREOF, the Issuer, the Corporation and the Purchaser .have caused this Bond and Loan Agreement to be executed in their respective corporate names as of the date first above written.
CALrFORNIA MUNICIPAL FINANCE AUTHORITY
THE NUEVA SCHOOL
BOSTON PRIVATE BANK & TRUST COMPANY
By:-A~~;:-.L~.,..,..:==----'-_L__:__::: __ _ Its: --->,:.:::;,;::.:_cc:::::.:..:.::=:::.:_--------
[Signature Page to Bond and Loan Agreement- The Nueva School Project, Series 2012A]
S-1
IN WITNESS WHEREOF, the Issuer, the Corporation and the Purchaser have caused this Bond and Loan Agreement to be executed in their respective corporate names as of the date first above written .
.........,
CALIFORNIA MUNICIPAL FINANCE AUTHORITY
By: - ···· Member,-Board of Directors
THE NUEVA SCHOOL
As soc· te Head of School, Chief Op rating and Financial Of1icer
BOSTON PRIVATE BANK & TRUST COMPANY
By: _____________ _
Its:-----------------
[Signature Page to Bond and Loan Agreement- The Nueva School Project, Series 20 12A]
OHSUSA:751727866.8 S-1
No. R-1
EXHIBIT A
FORM OF BOND
THIS BOND MAY ONLY BE REGISTERED IN THE NAME OF, OR TRANSFERRED TO, A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A PROMULGATED BY THE SECURITIES AND EXCHANGE COMMISSION) AND THE INVESTOR LETTER DELIVERED PURSUANT TO THE TERMS THEREOF.
$40,000,000 (Maximum Principal Amount)
THIS BOND, TOGETHER WITH THE INTEREST AND PREMIUM (IF ANY) HEREON SHALL NOT BE DEEMED TO CONSTITUTE A DEBT OR LIABILITY OF THE ISSUER, THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION OR AGENCY OF THE STATE OF CALIFORNIA (OTHER THAN AS A LIMITED OBLIGATION OF THE ISSUER) OR A PLEDGE OF THE FAITH AND CREDIT OF THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION OR AGENCY OF THE ISSUER, THE STATE OF CALIFORNIA, BUT SHALL BE PAYABLE SOLELY FROM AMOUNTS PAYABLE UNDER THE HEREINAFTER REFERRED TO AGREEMENT, OTHER THAN WITH RESPECT TO UNASSIGNED RIGHTS (AS SUCH TERMS ARE HEREINAFTER DEFINED OR DEFINED IN THE AGREEMENT) AND FROM CERTAIN FUNDS AND ACCOUNTS PLEDGED TO THE PURCHASER, SUBJECT TO CERTAIN EXCEPTIONS IN THE AGREEMENT. THIS BOND IS ONLY A SPECIAL, LIMITED OBLIGATION OF THE ISSUER AS PROVIDED BY THE ACT AND THE ISSUER SHALL UNDER NO CIRCUMSTANCES BE OBLIGATED TO PAY THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THIS BOND, OR OTHER COSTS INCIDENT HERETO EXCEPT FROM THE REVENUES AND FUNDS PLEDGED THEREFOR PURSUANT . TO THE AGREEMENT. THE ISSUER, THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION OR AGENCY OF THE STATE OF CALIFORNIA IS NOT IN ANY MANNER OBLIGATED TO LEVY OR TO PLEDGE ANY FORM OF TAXATION WHATEVER OR TO MAKE ANY APPROPRIATION FOR SUCH PAYMENTS. THE ISSUER HAS NO TAXING POWER.
DATED DATE:
UNITED STATES OF AMERICA CALIFORNIA MUNICIPAL FINANCE AUTHORITY
REVENUE BOND (TI-IE NUEVA SCHOOL PROJECT),
SERIES 2012A
DECEMBER20, 2012-......
REGISTERED OWNER:
OHSUSA:751727866.8 A-1
MAXIMUM PRINCIPAL AMOUNT:
MATURITY DATE:
FORTY MILLION DOLLARS
DECEMBER 20, 2042
The California Municipal Finance Authority (the "Issuer"), a joint exercise of powers _____ _.a"'u..,th"o"'n.,.'ty, of the State of California for value received, promises to pa)i to the Registered Owner
-specified-above-or-registered-assigns~-but-solely-from-the-sources-and-in-the-mannerreferred-to -------herein,-the-pdncipal-amount-on-the-Maturity-Date-specified-abgve,--unless-this-Bgnd-shaU-have-----
been called for redemption and payment of the redemption price shall have been duly made or provided for, which shall be equal to the principal sum of $40,000,000 or such lesser amount as shall have been advanced and remains outstanding hereunder and to pay from said sources interest on the unpaid balance of said Principal Amount from and after the respective Purchase Date on this Bond, calculated in the manner set forth below, on the first business day of each month, commencing February I, 2013 (the "Interest Payment Dates") until the principal amount
·is paid or duly provided for.
Each Bond Portion shall bear interest at a rate per annum equal to the Bank Purchase Rate (based on a 360-day year for the actual number of days elapsed). For purposes of calculating such interest,
"Bank Purchase Rate" means a rate of interest equal to 3.25% per annum.
1. Bond and Loan Agreement. This Bond is the bond issued under the Bond and Loan Agreement dated as of December 1, 2012 (the "Agreement") among the Issuer, Boston Private Bank and Trust Company (together with its successors and assigns and any successor owner of this Bond, the "Purchaser"), and The Nueva School, a California nonprofit corporation (the "Corporation"), and is limited to $40,000,000 in authorized principal amount. The terms of this Bond include those in the Agreement. Reference is made to the Agreement for a more complete description of the Project, the provisions, among others, with respect to the nature and extent of the security for the Bond, the rights, duties and obligations of the Issuer, the Corporation and the Purchaser, and the terms and conditions upon which the Bond are issued and secured.
The Issuer will loan the proceeds of this Bond to the Corporation through advances made by the Purchaser pursuant to the Agreement. The Corporation will use the proceeds of this Bond, together with certain other funds of the Corporation, for the purpose of financing, refmancing or reimbursing itself for all or a portion of the costs of the acquisition, construction, renovation, improvement, upgrading, furnishing and equipping of certain educational facilities, and (iii) paying certain costs relating to the issuance of this Bond and costs of capitalized interest, all as permitted under the Act and the Code.
2. Definitions. To the extent not defined herein, capitalized terms used in this Bond shall have the same meanings as set forth in the Agreement.
OHSUSA:75l727866,8 A-2
3. Payments on this Bond. This Bond is a special, limited obligation of the Issuer and, as provided in the Agreement, is payable solely from payments to be made by the Corporation under the Agreement at the designated office of the Purchaser as described below. The Corporation has agreed in the Agreement to pay to the Purchaser (as assignee of the Issuer) amounts sufficient to pay all amounts coming due on this Bond.
Interest on this Bond shall be payable on each Interest Payment Date.
In case any Event of Default occurs under the Agreement and is continuing, this Bond shall bear interest at the Default Rate. The Purchaser, the Corporation and the Issuer may agree that this Bond will bear interest at a different Default Rate than set forth in the preceding sentence ifthere is delivered to the Issuer, the Purchaser and the Corporation an Opinion of Bond Counsel to the effect that the designation of such different Default Rate will not adversely affect the exclusion of interest on this Bond from gross income for federal income tax purposes.
Upon the occurrence of a Determination of Taxability, the interest rate on this Bond shall be increased as provided in Section 3.7(b) of the Agreement to the Taxable Rate during the Taxable Period.
Notwithstanding anything in the Agreement to the contrary, at no time shall the interest rate on this Bond exceed the highest rate of interest permitted by applicable law.
4. Redemption. This Bond shall be subject to redemption as described in the Agreement.
5. Denominations; Transftr; Exchange. This Bond is initially issued as a single fully registered Bond without coupons in the denomination equal to the then outstanding principal amount hereof.
A registered owner may transfer this Bond in accordance with the Agreement. Boston Private Bank & Trust Company, as bond registrar (the "Bond Registrar"), may require a registered owner, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Agreement.
The Bond Registrar shall not be required to register the transfer of this Bond after notice calling this Bond or a portion thereof for redemption has been given to the Purchaser.
6. Persons Deemed Owners. The Registered Owner of this Bond may be treated as the owner of it for all purposes. Any action by the Registered Owner of this Bond shall be irrevocable and shall bind any subsequent owner of this Bond.
7. Defaults and Remedies. The Agreement provides that the occurrences of certain events constitute Events of Default. If an Event of Default occurs and is continuing, the Purchaser may declare the principal of this Bond to be due and payable immediately, as further described in the Agreement. An Event of Default and its consequences may be waived as provided in the Agreement.
OHSUSA:751727866.8 A-3
8. No Recourse. No recourse shall be had for the payment of the principal of, premium, if any, and interest on this Bond or for any claim based thereon or upon any obligation, covenant or agreement contained in the Agreement against any past, present or future member, officer, employee, director or trustee of any successor corporation, as such, either directly or through the Issuer or any successor corporation, under any rule of law or equity, statute or constitution or by the enforcement of any such incorporation, member, officer, employee, director, agent or trustee as such is hereby expressly waived and released as a condition of and consideration for the execution ofthe Agreement and the issuance of the Bond.
9. Authentication. This Bond shall not be valid until the Bond Reg,.,is,tr,ar,___,o"'r-'an""'-----~ -authentieating -agent -signs-the certificate-ofauthentication on-the other side of this Bond.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
OHSUSA:751727866.8 A-4
IN WITNESS WHEREOF, as provided by the Act, the California Municipal Finance Authority has caused this Bond to be executed in its name and on its behalf by the manual or facsimile signature.
CALIFORNIA MUNICIPAL FINANCE AUTHORITY
By: __ -::--:-----::---:--::=-:-----Member, Board of Directors
CERTIFICATE OF AUTHENTICATION
Boston Private Bank & Trust Company, as Bond Registrar, certifies that this is the Bond referred to in the Agreement.
Date of Authentication: ---- ,20_
BOSTON PRIVATE BANK & TRUST COMPANY, as Bond Registrar
By: __________ _ Its:. ____________ _
FORM OF ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto ________ the within Bond, and does hereby irrevocably constitute and appoint -----::---::-::----:-c:-:--=:-'' attorney to transfer the Bond on the books kept for registration and transfer of the within Bond, with full power of substitution in the premises.
Dated: _______ _
OHSUSA:75l727866.8
NOTE: The signature to this Assignment must correspond with the name as it appears upon the face of the within Bond in every particular, without enlargement or alteration or any change whatsoever.
Signature guaranteed by:
NOTE: The signature to this assigmnent must correspond with the name as it appears upon the face of the within Bond in every particular,
A-5
without alteration or enlargement or any change whatever. Signature(s) must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Bond Registrar, which requirements include membership or participation in STAMP or such other "signature guaranty program" as may be determined by the Bond Registrar in addition to or in substitution for STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
FORM OF REGISTRATION INFORMATION
Under the terms of the Agreement, the Bond Registrar will register the Bond in the name of a transferee only if the owner of the Bond (or his duly authorized representative) provides as much of the information requested below as is applicable to such owner prior to submitting this Bond for transfer.
Name: ________________________________ __
Address:---,-----,----------Social Security or Employer Identification Number: -,-,------,-------------If a Trust, Name and Address of Trustee(s) and Date of Trust: ________ _
OHSUSA:7Sl727866.8 A-6
EXHIBITB
DESCRIPTION OF PROJECT
Acquisition and construction of a new campus for high school instruction for up to 450 students to be located in the Bay Meadows Development of East 28th Avenue near the intersection of East 28th A venue and South Delaware Street in the City of San Mateo.
The Project shall be constructed on the following real property:
Real property in the City of San Mateo, County of San Mateo, State of California, described as follows:
BLOCK 10, AS SHOWN ON THE MAP ENTITLED "BAY MEADOWS PHASE II, NO.1" FILED FOR RECORD AUGUST 25, 2010 IN BOOK 137 OF MAPS, AT PAGE(S) 37 THROUGH 46, INCLUSIVE, OFFICIAL RECORDS OF SAN MATEO COUNTY.
APN: 040-030-290
OHSUSA:75l727866.8 B-1
EXHIBITC
INVESTOR LETTER
California Municipal Finance Authority Carlsbad, California
Re: California Municipal Finance Authority Revenue Bond (The Nueva School Project), Series 2012A
Ladies and Gentlemen:
The undersigned (the "Purchaser"), being the purchaser of the above-referenced bond (the "Bond"), does hereby certify, represent and warrant for the benefit of the California Municipal Finance Authority (the "Issuer") that:
(a) The Purchaser is a "Qualified Institutional Buyer" as defined in Rule 144A promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended.
(b) The Purchaser has sufficient knowledge and experience in financial and business matters, including the purchase and ownership of tax -exempt obligations and is capable of evaluating the merits and risks of its investment in the Bond. The Purchaser is able to bear the economic risk of, and an entire loss of, an investment in the Bond.
(c) The Purchaser is acquiring the Bond solely for its own account for investment purposes, and does not presently intend to make a public distribution of, or to resell or transfer, all or any part of the Bond.
(d) The Purchaser understands that the Bond has not been registered under the Act or under any state securities laws. The Purchaser agrees that it will comply with any applicable state and federal securities laws then in effect with respect to any disposition of the Bond by it, and further acknowledges that any current exemption from registration of the Bond does not affect or diminish such requirements.
(e) The Purchaser understands that the Bond involve a high degree of risk. Specifically, and without in any manner limiting the foregoing, the Purchaser understands and acknowledges that, among other risks, the Bond is payable solely from payments made by The
·Nueva School (the "Corporation") which obligations are secured by the Pledged Property. The Purchaser has been provided an opportunity to ask questions of, and the Purchaser has received answers from, representatives of the Corporation regarding the terms and conditions of the Bond. The Purchaser has obtained all information requested by it in connection with the issuance of the Bond as it regards necessary to evaluate all merits and risks of its investment in the Bond. The Purchaser has reviewed the documents executed in conjunction with the issuance of the Bond, including, without limitation, the Bond and Loan Agreement, dated as of December I, 2012 (the "Bond and Loan Agreement") among the Issuer, the Purchaser and the Corporation.
OHSUSA:75l727866.8 C-1
(i) The Purchaser is not now and has never been controlled by, or under common control with, the Corporation. The Corporation has never been and is not now controlled by the Purchaser. The Purchaser has entered into no arrangements with the Corporation or with any affiliate in connection with the Bond, other than as disclosed to the Issuer.
(g) The Plll'chaser has authority to purchase the Bond and to execute this letter and any other instruments and documents required to be executed by the Purchaser in connection with the purchase of the Bond. The undersigned is a duly appointed, qualified, and acting officer of the Purchaser and is authorized to cause the Purchaser to make the certifications, representations and warranties contained herein by execution of this letter on behalf of the Plll'chaser.
(h) In entering into this transaction, the Purchaser has not relied upon any representations or opinions of the Issuer relating to the legal consequences or other aspects of its investment in the Bond, nor has it looked to, nor expected, the Issuer to undertake or require any credit investigation or due diligence reviews relating to the Corporation, its financial condition or business operations, the Project (including the financing or management thereof), or any other matter pertaining to the merits or risks of the transactions contemplated by the Bond and Loan Agreement, or the adequacy of the funds pledged to secure repayment of the Bond.
(i) The Purchaser understands that the Bond is not secured by any pledge of any moneys received or to be received from taxation by the Issuer (which has no taxing power), the State of California or any political subdivision or taxing district thereof; that the Bond will never represent or constitute a general obligation or a pledge of the faith and credit of the Issuer, the State of California or any political subdivision thereof; that no right will exist to have taxes levied by the State of California or any political subdivision thereof for the payment of principal and interest on the Bond; and that the liability of the Issuer with respect to the Bond is subject to further limitations as set forth in the Bond and the Bond and Loan Agreement.
G) The Purchaser has been informed that the Bond (i) has not been and will not be registered or otherwise qualified for sale under the "Blue Sky" laws and regulations of any jurisdiction, (ii) will not be listed on any stock or other securities exchange, and (iii) will carry no rating from any rating service.
(k) The Purchaser acknowledges that it has the right to sell and transfer the Bond, subject to compliance with the transfer restrictions set forth in the Bond and Loan Agreement, including the requirement for the delivery to the Issuer of an investor's letter in the same form as this Investor's Letter, including this paragraph. Failure to deliver such investor's letter shall cause the purported transfer to be null and void. The Purchaser agrees to indemnify and hold harmless the Issuer with respect to any claim asserted against the Issuer that arises with respect to any sale, transfer or other disposition of the Bond by the Purchaser or any transferee thereof in violation of the provisions of this Investor's Letter and of the Bond and Loan Agreement.
(1) Neither the Bond Counsel, the Issuer, its members, its governing body, or any of its employees, counsel or agents will have any responsibility to the Purchaser for the accuracy or completeness of information obtained by the Purchaser from any source regarding the Corporation or its financial condition or regarding the Corporation or the sutliciency of any
OHSUSA:75l727866.8 C-2
security for the Bond, the provision for payment thereof, or the sufficiency of any security therefor. No written information has been provided by the Issuer to the Purchaser with respect to the Bond. The Purchaser acknowledges that, as between the Purchaser and all of such parties, the Purchaser has assumed responsibility for obtaining such information and making such review as the Purchaser deemed necessary or desirable in connection with its decision to purchase the Bond.
The Purchaser acknowledges that the sale of the Bond to the Purchaser is made in reliance upon the certifications, representations and warranties herein by the addressees hereto. Capitalized terms used herein and not otherwise defined have the meanings given such terms in the Bond and Loan Agreement.
By: _____________ _ Name: _______________ _ Title: ______________ _
OHSUSA:751727866.8 C-3
EXHIBITD
FORM OF REQUEST OF ADDITIONAL BOND PROCEEDS
Boston Private Bank & Trust Company San Mateo, California
[Date of Request]
Re: Request for Additional Bond Proceeds of California Municipal Finance Authority Revenue Bond (The Nueva School Project), Series 2012A (this "Request'?
This Request is being made pursuant to that certain Bond and Loan Agreement, dated as of December 1, 2012 (the "Loan Agreement"), by and among The California Municipal Finance Authority, Boston Private Bank & Trust Company (the "Purchaser"), and The Nueva School (the "Borrower"). All capitalized terms herein, unless otherwise defined, shall have the meanings as provided in the Loan Agreement. The undersigned hereby certifies as follows:
1. The undersigned is an Authorized Official of the Borrower authorized to submit this Request to the Purchaser.
2. The Borrower hereby requests Additional Bond Proceeds in the amount of $ __ '------
3. This Request is equal to$ and, when added to any previous Request for Additional Bond Proceeds and the Initial Bond Proceeds, totals $ which does not exceed $40,000,000, and the Project is %complete.
4. The representations and warranties of the Borrower in the Corporation Documents are true and correct in all material respects as of the date hereof and no Default or Event of Default under the Corporation Documents has occurred on the date hereof.
5. All of the Additional Bond Proceeds of this Request will fund capital expenditures of the Borrower located at the Project and constitute Project Costs. An itemized list of such expenditures and the payees is provided in Attachment A [Borrower to attach itemized list]. All of the proceeds of this Request and the property financed therewith will be used for activities directly related to the Borrower's exempt purposes and not associated with any "unrelated trade or business" in any manner that would cause interest on the Bond to no longer be excluded from the gross income of the owner thereof for federal income tax purposes. All of the property financed with this Request will be owned by the Borrower.
6. All of the Additional Bond Proceeds of this Request shall be applied to reimburse or pay Project Costs that comply with the Tax Agreement.
7. The Project is being constructed in accordance with the Permits, the Project Budget, the Construction Contract and the Plans and Specifications.
OHSUSA:75l727866.8 D-1
8. All sources and uses of funds for the Project remain "In Balance" as of the date hereof.
9. The Borrower has made all deposits to the Construction Fund that are required by the Campaign Funds Construction Contribution Schedule.
10. If the Additional Bond Proceeds will be used to fund the cost of the acquisition of real property described in Exhibit B to the Loan Agreement, in addition to the satisfaction of all other requirements for funding the Additional Bond Proceeds Request and disbursement thereof from the Construction Fund, the Borrower represents that it has received the final approval from the Site Plan Architect Review Committee ("SPAR") and that any period for which an appeal of such approval can be filed has concluded and no appeal was filed.
11. All outstanding claims for labor and materials through the date of the last Request have been paid and the liens therefor have been waived except for unpaid claims approved by the Purchaser.
12. There are no liens outstanding against the Project other than Permitted Liens.
In accordance with the provisions of the Agreement, the Corporation has caused this Request to be signed on its behalf this day of , .
THE NUEVA SCHOOL
By:-----------~---Its: ---------------------------
OHSUSA:751727866.8 D-2
EXHIBITE
CONTINUING COVENANTS AGREEMENT
OHSUSA:751727866.8 E-1
#11560443_v9
(EXHIBIT E to Bond and Loan Agreement)
CONTINUING COVENANTS AGREEMENT
Dated as of December 1, 2012 ---by and between
THE NUEVA SCHOOL
and
BOSTON PRIVATE BANK & TRUST COMPANY
Relating to Up To $40,000,000
CALIFORNIA MUNICIPAL FINANCE AUTHORITY REVENUE BOND
(THE NUEVA SCHOOL PROJECT), SERIES 2012A
CONTINUING COVENANTS AGREEMENT .............................................................................. !
ARTICLE I DEFINITIONS ............................................................................................................ !
Section 1.01. Certain Defined Terms ....................................................................................... I
ARTICLE II CONDITIONS PRECEDENT TO PURCHASE OF INITIAL BOND PORTION ... ?
Section 2.01. Insurance Requirements ..................................................................................... ? Section 2. 02. Litigation ............................................................................................................ ? Section 2. 03. Other Matters ..................................................................................................... 7 Section 2.04. Payment of Fees and Expenses .......................................................................... ?
ARTICLE III REPRESENTATIONS AND WARRANTIES ......................................................... ?
Section 3.01, Existence and Power; Tax Status ....................................................................... ? Section 3.02. Due Authorization .............................................................................................. 8 Section 3.03. Valid and Binding .............................................................................................. 8 Section 3.04. Noncontravention; Compliance with Law ......................................................... 8 Section 3.05. Pending Litigation and Other Proceedings; Pending Legislation and
Decisions ............................................................................................................ 9 Section 3.06. Financial Statements; Tax Returns and Payments .................. ~ .......................... 9 Section 3. 07. ERISA ..................................................................................... , ......................... 1 0 Section 3. 08. No Defaults ...................................................................................................... ! 0 Section 3.09. Insurance .......................................................................................................... lO Section 3.10. Title toAssets .................... : .............................................................................. lO Section 3 .11. Incorporation by Reference .............................................................................. 1 0 Section 3.12. Reliance by the Purchaser ................................................................................ lO Section 3.13. Correct Information ......................................................................................... ! 0 Section 3.14. Investment Company ........................................................................................ !! Section 3.15. Margin Stock .................................................................................................... !! Section 3.16. Subsidiaries .................................................................................................. .... 11 Section 3.17. Transactions with Affiliates ............................................................................. 11 Section 3.18. Tax-Exempt Status ........................................................................................... 11 Section 3.19. Usury ................................................................................................................ 12 Section3.20. Security; Pledge of Pledged Property .............................................................. 12 Section 3.21. Environmental .................................................................................................. l2
ARTICLE IV COVENANTS OF THE BORROWER .................................................................. l2
Section 4. 01. Existence, Etc .......................................................................................... ......... 12 Section 4.02. Maintenance of Properties ............................................................................... 12 Section 4.03. Compliance with Laws; Taxes and Assessments ............................................. 12 Section 4. 04. Insurance ................................................................................................. ......... 12 Section 4. 05. Reports .......................................................................................................... ... 13 Section 4.06. Keeping of Books; Inspection and Field Audit.. ............................................. .14 Section 4.07. Burdensome Contracts with Affiliates ............................................................. 14 Section 4.08. Formation of Subsidiaries ................................................................................ 14 Section 4.09. Corporation Documents ................................................................................... 15 Section 4.1 0. Disclosure to Participants ................................................................................ 15 Section 4.11. Further Assurances ...................................................................................... .... 15
#11560443_v9
Section 4.12. Maintenance of Tax -Exempt Status of the Bond ............................................ .15 Section 4.13. Compliance with ERISA ................................................................................... 15 Section 4.14. Compliance with other Covenants ................................................................... 15 Section 4.15. Investment Policy .................................................................................. ........... 16 Section 4.16. Hedging Contracts ...................................................................................... ..... 16 Section 4.17. Environmental Laws ........................................................................................ 16 Section 4.18. Certain Information ......................................................................................... 16 Section 4.19. Federal Reserve Board Regulations ................................................................. 16 Section 4. 20. Liens ............................................................................................................ ..... 16 Section 4:21. Leases ............................................................................................................... 16 Section 4.22. Sales, Etc of Assets ........................................................................................... !? Section 4.23. Amendments to Plans and Specifications and Project Budget ....................... .17 Section 4.24. Financial Covenants ........................................................................................ !? Section 4.25. Primary Depository Bank ................................................................................ 18
ARTICLE V EVENTS OF DEFAULT ......................................................................................... 20
Section 5. OJ. Events of Default .............................................................................................. 20 Section 5.02. Consequences of an Event ofDefault.. .................................. · ......................... .20 Section 5.03. Remedies Cumulative; Solely for the Benefit of the Purchaser ...................... 20 Section 5. 04. Waivers or Omissions ...................................................................................... 20 Section 5.05. Discontinuance ofProceedings ........................................................................ 20 Section 5.06. Injunctive Relief ............................................................................................... 21
ARTICLE VI INDEMNIFICATION ............................................................................................ 21
Section 6.01. Indemnification ................................................................................................ 21 Section 6.02. Survival ............................................................................................................ 21
ARTICLE VII MISCELLANEOUS .............................................................................................. 22
Section 7.01. Patriot Act Notice ............................................ : ............................................... 22 Section 7. 02. Further Assurances .......................................................................................... 22 Section 7.03. Amendments and Waivers ............................................................................... 22 Section 7.04. No Implied Waiver; Cumulative Remedies ..................................................... 22 Section 7. 05. Notices .............................................................................................................. 23 Section 7. 06. Right of Setoff. ................................................................................................ .. 23 Section 7.07. No Third-Party Rights ............................................................... : ...................... 24 Section 7. 08. Severability ...................................................................................................... 24 Section 7.09. Governing Law; Consent to Jurisdiction; Waiver of Jury Trial ...................... 24 Section 7.1 0. Arbitration ...................................................................................................... .. 25 Section 7.11. Prior Understandings ...................................................................................... 27 Section 7.12. Duration ......................................................................................................... .. 27 Section 7.13. ·Counterparts .................................................................................................... 27 Section 7.14. Successors and Assigns .................................................................................... 27 Section 7.15. Headings .......................................................................................................... 28 Section 7.16. Electronic Signatures ..................................................................................... .. 28
ii #11560443_v9
EXHIBIT A
EXHIBITB
EXHIBITC
EXHIBITD
EXHIBITE
#11560443_v9
Form of No Default Certificate
Form of Compliance Certificate
Amortization Schedule
Insurance Requirements
Campaign Funds Contribution Schedule
iii
CONTINUING COVENANTS AGREEMENT
This CONTINUING COVENANTS AGREEMENT (the "Continuing Covenants Agreement") is dated as of December 1, 2012, is made by and between The Nueva School (the "Corporation") and Boston Private Bank & Trust Company (the "Purchaser") and, by incorporation by reference, is made a part of the Bond and Loan Agreement, dated as of December 1, 2012 (the "Agreement"), among the Purchaser, the Corporation and the California Municipal Finance Authority (the "Issuer").
ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms. In addition to the terms defined in the Agreement, the following terms shall have the following meanings:
"Agreement Not to Encumber or Transftr Property" means the Agreement Not to Encumber or Transfer Property between the Corporation and the Purchaser, dated as of December 1, 2012.
"Audited Financial Statements" means, initially, the audited financial statements of the Corporation for the Fiscal Year ended June 30, 2012 and, thereafter, the most recent audited financial statements of the Corporation for each subsequent Fiscal Year delivered to the Purchaser pursuant to Section 4.05(a) hereof.
"Capital Lease" means any lease of Property which, in accordance with GAAP, would be required to be capitalized on the balance sheet of the lessee.
"Compliance Certificate" means a certificate substantially in the form of Exhibit B hereto.
"Controlled Group" means all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Corporation or any Affiliate, are treated as a single employer under Section 414 of the Code.
"Debt" of any Person means at any date, without duplication: (a) all obligations of such Person for borrowed money and reimbursement obligations under letters of credit which are not contingent; (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments; (c) all net obligations of such Person under any Hedging Contract (it being understood that any termination payment thereunder shall not be considered "Debt" for purposes of this definition until the related Hedging Contract terminates and any such termination payment remains unpaid after becoming due and payable (after giving effect to any grace period)); (d) all obligations of such Person to pay the deferred purchase price of Property or services, except (1) trade accounts payable, operating leases and other accrued liabilities arising in the ordinary course of business and (2) deferred compensation; (e) all obligations of such Person as lessee under Capital Leases; (f) all Debt of others secured by a lien on any asset of such Person, whether or not such Debt is assumed by such Person; and (g) all Guarantees by
#11560443_v9
such Person of the obligations of any other Person that constitutes Debt under any of the clauses (a) through (t) above.
"Debt Service" for any period means, as determined in accordance with GAAP and as reflected on the Audited Financial Statements of the Corporation, without duplication, the amounts that were required for such period to pay scheduled principal of and interest on Debt, letter of credit fees, if any, and remarketing fees, if any; provided, however, there shall be excluded from such definition principal of, and interest on, Debt to the extent such amount has been funded from other than funds on hand and irrevocably escrowed in a segregated account exclusively for such purpose.
"Debt Service Coverage Ratio" means, for any period of time, with respect to the Corporation (i) the change in its aggregate unrestricted net assets from the previous fiscal year, plus (ii) depreciation and amortization, plus (iii) interest expense for all Debt, plus or less (iv) any non-cash items appearing on the Audited Financial Statements, (v) any effect positive or negative relating to unrealized gains/ (losses) on investments shall be excluded, divided by required payments of principal and interest under the Bond and all other Debt of the Corporation for such period.
"Environmental Law" means any and all federal, state, local and foreign statutes, laws, regulations, ordinances, rules, jl:tdgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or other governmental restrictions relating to the environment or to emissions, discharges or releases of pollutants, contaminants, petroleum or petroleum products, chemicals or industrial, toxic or hazardous substances or wastes into the environment including, without limitation, ambient air, surface water, ground water, or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, petroleum or petroleum products, chemicals or industrial, toxic or hazardous substances or wastes or the clean-up or other remediation thereof.
"Environmental Violation" means (i) any proceeding, investigation or inquiry commenced by any governmental authority with respect to the Release of any Hazardous Substance from, on, in, under or about any Property or the migration of any Hazardous Substance from the Property to adjoining property or to the Property from adjoining property; (ii) all claims made or threatened in writing by any Person against the Corporation, any other party occupying the Property or any portion thereof, or the Property, relating to any loss or injury allegedly resulting from a Release of a Hazardous Substance from, on, in, under or about the Property or migrating therefrom; and (iii) the discovery of any occurrence or condition on the Property or on any real property adjoining or in the vicinity of the Property, of which the Corporation has knowledge, which might cause the Property or any portion thereof to be in violation of any Environmental Law or subject to any restriction on ownership, occupancy, transferability or use under any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute of similar import, and regulations thereunder, in each case as in effect from time to time. References to Sections of ERISA shall be construed also to refer to any successor Sections.
2 #11560443_v9
'
"Event of Default" with respect to this Continuing Covenants Agreement has the meaning ascribed to that term in Section 5.01 of this Continuing Covenants Agreement.
"FRB" means the Board of Governors of the Federal Reserve System of the United States, together with any successors thereof.
"Generally Accepted Accounting Principles" or "GAAP" means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.
"Guarantee" means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Debt or other obligation payable or performable by another Person (the "primary obligor") in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation, (ii) to purchase or lease Property, securities or services for the purpose of assuring the obligee in respect of such Debt or other obligation of the payment or performance of such Debt or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Debt or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Debt or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Debt or other obligation of any other Person, whether or not such Debt or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Debt to obtain any such Lien). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term "Guarantee" as a verb has a corresponding meaning.
"Hazardous Substance" means any toxic, explosive, radioactive, infectious or carcinogenic material, waste or substance included within the definitions of "hazardous substances", "hazardous materials", "toxic substances" or "solid waste", or which is regulated under any Environmental Law, including, without limitation, and whether or not included under any Environmental Law, anything containing asbestos, toxic mold or fungi, hydrocarbons, polychlorinated biphenyls, oil, or petroleum products.
"Hedging Contracf' means, without limitation, any agreement called, or designed to perform the function of, (a) any interest rate swap agreement, currency swap agreement, forward delivery agreement, forward payment conversion agreement, futures contract or any similar agreement, (b) any payment contract based upon levels of, or changes or differences in, interest rates, currency exchange rates, or bond, debt, stock or other indices, (c) any interest rate floor or cap, option, par-put, put, call, hedge or any similar agreement, and (d) any other or similar
3 #11560443_v9
agreement used, or intended to be used, to manage, increase, reduce, maximize, minimize, change, convert, protect or otherwise impact the cost, return, form, risk or tmcertainty of any debt or obligations.
"In Balance" means that, dming the period of construction of the Project, the amount of Additional Bond Proceeds available to be drawn together with Campaign Construction Contributions either on deposit in the Construction Fund or the Campaign Account or pledged to, but not yet received by, the Corporation, equals or exceeds the amount necessary for the timely and full payment of (a) all work done and not theretofore paid for or to be done in connection with the completion of the construction of the Project in accordance with the Plans and Specifications, including the installation of all fixtures and equipment required for the Project, and (b) all other costs and expenses incurred and not theretofore paid for, or to be incurred, in connection with the Project. All such pledged Campaign Construction Contributions shall be received or expected to be received by the Corporation prior to the time that the Project has received its Completion Certificate.
"Indemnitee" has the meaning set forth in Section 6.01 hereof.
"Investment Policy" means the investment policy of the Corporation delivered to the Purchaser pursuant to Section 3.l(e)(viii) of the Agreement.
"Laws" means federal, state and local laws, statutes, rules, ordinances, regulations, codes, licenses, authorizations, decisions, injunctions, interpretations, orders or decrees of any court or other Governmental Authority having jurisdiction as may be in effect from time to time.
"Liabilities" has the meaning set forth in Section 6.01 hereof.
"Lien" means any mortgage, lien, security interest, pledge, charge or encumbrance of any kind in respect of any Property, including the interests of a seller or lessor under any conditional sale, Capital Lease or other title retention arrangement, and any easement, right of way or other encumbrance on title to the Property.
"Liquidity" means, with respect to the Corporation, total unrestricted cash and unrestricted marketable securities as detailed on the Corporation's audited balance sheet.
"Margin Stoc~' has the meaning ascribed to such term in Regulation U promulgated by the FRB, as now and hereafter from time to time in effect.
"Material Adverse Effie!" means: (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties, liabilities (actual or contingent), or financial condition of the Corporation; (b) a material impairment of the ability of the Corporation to perform its obligations under any Corporation Docmnent to which it is a party; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against the Corporation of any Corporation Document to which it is a party.
"No Default Certificate" means a certificate substantially in the form of Exhibit A hereto.
"Other Taxes" has the meaning set forth in Section 4.4( c )(ii) of the Agreement.
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"Patriot Act" means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Title III of Pub. L. 107-56 (signed into law October 26, 2001).
"PBGC'' means the Pension Benefit Guaranty Corporation or any successor thereto.
"Permitted Liens" means:
(a) hereof);
Liens granted or created by the Corporation Documents (as in effect on the date
(a) Liens for taxes and assessments and other govermnental charges and levies which are not due or which are being contested in good faith by appropriate proceedings which prevent enforcement of such Lien and for which adequate reserves are maintained;
(b) Liens under workers' compensation, unemployment insurance, social security and similar legislation;
(c) Liens to secure the performance of bids, tenders, contracts (other than contracts for the payment of money), and public and statutory obligations arising in the ordinary course of business;
(d) any renewal, extension or replacement in whole or in part of any Lien permitted under this definition; provided, however, (i) that such Lien shall be limited to all or part of the Property securing the Lien renewed, extended or replaced and (ii) that the principal amount of Debt, if any, secured thereby is not increased;
(e) utility, access and other easements and rights-of-way, restrictions, encumbrances and exceptions which do not materially interfere with or materially impair the operation of the Property affected thereby (or, if such Property is not being then operated, the operation for which it was designed or last modified), including (i) any zoning laws and similar restrictions which are not violated by the Property affected thereby, (ii) all right, title and interest of the State, municipalities and the public in and to tunnels, bridges and passageways over, under or upon a public way;
(f) any mechanic's, laborer's, materialman's, supplier's or vendor's Lien or right in respect thereof if payment is not yet due under the contract in question or if such Lien is being contested in good faith by appropriate proceedings which prevent the enforcement of such Lien and for which adequate reserves are maintained;·
(g) judgment Liens arising after the Closing Date that do not otherwise result in an Event of Default;
(h) Liens granted to the Purchaser or an Affiliate thereof;
(i) Liens evidencing an interest in a Recharacterized Lease (as defined in Section 4.21 hereof to which the Corporation is a party) or securing the Corporation's obligations under a Capital Lease that is permitted under Section 4.24(a) hereof, but only to the extent such lien is against the property being leased pursuant to such Capital Lease;
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G) Liens, defects, irregularities of title and encroachments on adjoining property as normally exist with respect to property similar in character to the Property involved, that do not materially impair the Property affected thereby for the purpose for which it was acquired or is held by the Corporation;
(k) purchase money Liens on equipment, provided such liens only secure the purchase price of the equipment purchased, and provided that not more than $250,000 of Debt secured by purchase money liens shall be outstanding at any one time;
(1) Liens securing obligations under Hedging Contracts with the Purchaser as counterparty and with other counterparties to the extent such Hedging Contracts and Liens are approved by the Purchaser; and
(m) Liens permitted by the Purchaser in writing.
"Plan" means, with respect to the Corporation 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 either (i) is maintained by a member of the Controlled Group for employees of a member of the Controlled Group of which the Corporation is a part or (ii) is 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 of which the Corporation is a part is then making or accruing an obligation to make contributions or has within the preceding five plan years made contributions.
"Release" means the actual, threatened or suspected presence, handling, use, generation, manufacture, installation, release, deposit, discharge, emission, vapor intrusion, leakage, spillage, seepage, migration, injection, pumping, pouring, emptying, escaping, dumping, disposal or transportation of a Hazardous Substance at any time, no matter how or by whom caused, whether intentional or unintentional, foreseeable or unforeseeable.
"Pledged Property" means the Pledged Property, as defined in the Security Agreement.
"Security Agreement" means the Security Agreement from the Corporation to the Purchaser dated December 20, 2012.
"Unfunded Vested Liabilities" means, with respect to any Plan at any time, the amount (if any) by which (i) the present value of all vested nonforfeitable accrued benefits under such Plan exceeds (ii) the fair market value of all Plan assets allocable to such benefits, all determined as of the then most recent valuation date for such Plan, but only to the extent that such excess represents a potential liability of a member of the Controlled Group to the PBGC or such Plan under Title IV of ERISA.
"United States" and "U.S." mean the United States of America.
"Welfare Plan" means a "welfare plan," as such term is defined in Section 3(1) of ERISA.
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ARTICLE II
CONDITIONS PRECEDENT TO PURCHASE OF INITIAL BOND PORTION
In addition to the conditions precedent set forth in Section 3.1 of the Agreement, the Corporation shall satisfy the following requirements prior to the Purchaser's purchase of the Initial Bond Portion:
Section 2. 01. Insurance Requirements. The Purchaser shall have received environmental reports and evidence that all insurance coverage types and levels for the Property, the Project, the contractor and the Corporation required by the Purchaser as set forth in Exhibit D hereto have been provided, in each case in form reasonably satisfactory to the Purchaser.
Section 2. 02. Litigation. The Purchaser shall have received a written description of all actions, suits or proceedings pending or, to the Corporation's knowledge, threatened against the Corporation or any of its Affiliates in any court or before any arbitrator of any kind or before or by any governmental or non-governmental body which is reasonably expected to result in a Material Adverse Effect, if any, and such other statements, certificates, agreements, documents and information with respect thereto as the Purchaser may reasonably request.
Section 2. 03. Other Matters. All other legal matters pertaining to the execution and delivery hereof and of the Agreement shall be satisfactory to the Purchaser and its counsel, and the Purchaser shall have received such other statements, certificates, agreements, documents and information with respect to the Corporation and the Issuer as the Purchaser may reasonably request.
Section 2.04. Payment of Fees and Expenses. On or prior to the Closing Date, the Purchaser shall have received reimbursement of the Purchaser's out-of-pocket third party fees and expenses (including, without limitation, the fees and expenses of counsel to the Purchaser and the out-of-pocket expenses of the Purchaser) and any other fees incurred in connection with the transaction contemplated by the Corporation Documents, including fees and expenses relating to the environmental reports covering the Property and all other insurance coverage types for the Project required under the Corporation Documents.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Corporation makes the following representations and warranties to the Purchaser:
Section 3.01. Existence and Power; Tax Status. (a) The Corporation is a nonprofit public benefit corporation duly organized, validly existing and in good standing under the laws of the State and has the power and authority to own its properties and to carry on its businesses as now being conducted and as currently contemplated to be conducted hereafter and is duly qualified to do business in each jurisdiction in which the character of the properties owned or leased by it or in which the transactions of any material portion of its business (as now conducted and as currently contemplated to be conducted) makes such qualification necessary.
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(b) The Corporation is an organization described in Section 501(c)(3) of the Code, is exempt from federal income tax under Section SOl(a) of the Code except for taxes imposed on unrelated business income pursuant to Section 511 of the Code and is an organization described in Section 170(b )(1 )(A) of the Code and is not a "private foundation" as defined by Section 509(a) of the Code. The Corporation has not received any notice from the Internal Revenue Service that its returns are being audited or its status as an organization described in Section 50l(c)(3) of the Code is being investigated or challenged. The Corporation is in compliance with all requirements of such status. No portion of the Project shall be used in any ''unrelated trade or business" of the Corporation within the meaning of Section 513(a) of the Code in any manner that would cause the interest on the Bond to be includable in the gross income of the holder thereof.
Section 3.02. Due Authorization. (a) The Corporation has the corporate power, and has taken all necessary corporate action, to authorize the Corporation Documents to which it is a party, to borrow under the Agreement and to execute, deliver and perform its obligations under the Agreement and each of the other Corporation Documents to which it is a party in accordance with their respective terms.
(b) The Corporation is duly authorized and licensed to own its Property (real, personal or mixed) and to operate its business under the laws, rulings, regulations and ordinances of all federal, state and local governing bodies having the jurisdiction to license or regulate such Property or business activity and the departments, agencies and political subdivisions thereof, and the Corporation has obtained all requisite approvals of all such governing bodies required to be obtained for such purposes, except to the extent the failure to have obtained any such license or approval is not reasonably expected to result in a Material Adverse Effect. All authorizations and approvals necessary for the Corporation to enter into this Continuing Covenants Agreement and the other Corporation Documents to which it is a party and to perform the transactions contemplated hereby and thereby and to conduct its business activities and own its Property have been obtained and remain in full force and effect and are subject to no further administrative or judicial review. No other authorization or approval or other action by, and no notice to or filing with, any Governmental Authority is required for the due execution, delivery and performance by the Corporation of this Continuing Covenants Agreement or the due execution, delivery or performance by the Corporation of the Corporation Documents to which it is a party, other than those actions that have been taken, and notices and filings made, on or prior to the date hereof.
Section 3. 03. Valid and Binding. This Continuing Covenants Agreement has been duly executed and delivered by one or more duly authorized officers of the Corporation and is, and each of the Corporation Documents to which the Corporation is a party, when executed and delivered by the Corporation will be, a legal, valid and binding obligation of the Corporation enforceable in accordance with its terms, except as such enforceability may be limited by (a) the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors' rights generally, and (b) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
Section 3. 04. Noncontravention; Compliance with Law. (a) The execution, delivery and performance of this Continuing Covenants Agreement and each of the other Corporation Documents to which the Corporation is a party in accordance with their respective terms do not and will not (i) contravene the Corporation's articles of incorporation or by-laws, (ii) require any
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consent or approval of any creditor of the Corporation, (iii) violate any Laws (including, without limitation, Regulation U of the FRB, or any successor regulations) that is reasonably expected to result in a Material Adverse Effect, (iv) conflict with, result in a breach of or constitute a default under any contract to which the Corporation is a party or by which it or any of its Property may be bound that is reasonably expected to result in a Material Adverse Effect, or (v) result in or require the creation or imposition of any Lien upon or with respect to any Property now owned or hereafter acquired by the Corporation or any Affiliate thereof except such Liens, if any, expressly created by any Corporation Document.
(b) The Corporation is in compliance with all Laws, except for such noncompliance that, singly or in the aggregate, has not caused or is not reasonably expected to cause a Material Adverse Effect.
Section 3. 05. Pending Litigation and Other Proceedings; Pending Legislation and Decisions. (a) There are no actions, suits or proceedings pending nor are there any actions, suits or proceedings threatened against the Corporation or any of its Affiliates or any Property of the Corporation or any such Affiliate in any court or before any arbitrator of any kind or before or by any Governmental Authority, which, in any case, are reasonably expected to have a Material Adverse Effect.
(b) To the knowledge of the Corporation, there is no amendment or proposed amendment to the Constitution of the State or any State law or any administrative interpretation of the Constitution of the State or any State law, or any legislation that has passed either house of the legislature of the State, or any judicial decision interpreting any of the foregoing, which, in any case, is reasonably expected to have a Material Adverse Effect.
Section 3. 06. Financial Statements; Tax Returns and Payments. (a) The consolidated statement of financial position of the Corporation as of June 30, 2012, and the related consolidated statement of activities and changes in net assets and the consolidated statement of cash flows for the Fiscal Year then ended, and accompanying notes thereto, which financial statements, accompanied by the audit report of Hood & Strong LLP dated as of September 17, 2012 heretofore furnished to the Purchaser, which are consistent in all material respects with the Audited Financial Statements of the Corporation for the Fiscal Year ended June 30, 2012, fairly present the financial condition of the Corporation in all material respects as of such dates and the results of its operations for the periods then ended in conformity with GAAP. Since June 30, 2012, there have been no changes in the financial condition or operations of the Corporation that are reasonably expected to have a Material Adverse Effect.
(b) (i) All federal, state and other material tax returns of the Corporation and each of its Affiliates required by law to be filed have been duly filed, (ii) all taxes shown on such returns as being due and payable have been paid, unless such taxes, assessments, charges or levies are being contested in good faith and adequate reserves have been imposed in accordance with GAAP, and (iii) the charges, accruals and reserves on the books of the Corporation and each of its Affiliates in respect of such taxes and charges that are not yet due and payable are adequate to pay such taxes and charges when such taxes and charges become due and payable, and the Corporation knows of no reason to anticipate any additional assessments for which adequate reserves have not been established.
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Section 3. 07. ERISA. The Corporation and each of its Affiliates are in compliance in all material respects with ERISA to the extent applicable to it and have received no notice to the contrary from the PBGC or any other Governmental Authority. Neither the Corporation nor any of its Affiliates has any Unfunded Vested Liabilities. No condition exists or event or transaction has occurred with respect to any Plan which are reasonably expected to result in the incurrence by the Corporation or its Affiliates of any material liability, fine or penalty. Neither the Corporation nor any of its Affiliates has any contingent liability with respect to any postretirement benefits under a Welfare Plan, other than liability for continuation of coverage described in Part 6 of Title I of ERISA.
Section 3.08. No Defaults. No Event of Default has occurred and is continuing. The Corporation is not in default under the terms of any covenant, indenture or agreement of or affecting it or any of its Property, which default is reasonably expected to have a Material Adverse Effect. ·
Section 3. 09. Insurance. The Corporation currently maintains insurance coverage with insurance companies believed by it to be capable of performing its obligations under the respective insurance policies issued by such insurance companies to the Corporation (as determined in its reasonable discretion) and in full compliance with Section 4.04 and Exhibit D hereof.
Section 3.1 0. Title to Assets. The Corporation has good and marketable title to, or in the case of Property in which the Corporation has an interest other than an ownership interest, a valid interest in, its Property. None of the Corporation's Pledged Property is subject to any Lien other than Permitted Liens.
Section 3.11. Incorporation by Reference. The representations and warranties of the Corporation contained in the other Corporation Documents to which the Corporation is a party, together with the related definitions of terms contained therein, are hereby incorporated by reference in this Continuing Covenants. Agreement as if each and every such representation and warranty and· definition were set forth herein in its entirety, and the representations and warranties made by the Corporation in such Sections are hereby made for the benefit of the Purchaser. No amendment to or waiver of such representations and warranties or definitions made pursuant to the relevant Corporation Document or incorporated by reference shall be effective to amend such representations and warranties and definitions as incorporated by reference herein without the prior written consent of the Purchaser.
Section 3.12. Reliance by the Purchaser. All representations and warranties made herein to the Purchaser or incorporated hereby for the benefit of the Purchaser are made with the understanding that the Purchaser is relying upon the accuracy of such representations and warranties. Notwithstanding that the Purchaser may conduct its own investigation as to some or all of the matters covered by the representations and warranties in the Corporation Documents, and any certificates, information, opinions or documents delivered in connection therewith, the Purchaser is entitled to rely on all representations and warranties as a material inducement to the Purchaser's extension of the credit evidenced by the Corporation Documents.
Section 3.13. Correct Information. All Financial Statements, written information, reports and other papers and data (other than projections, budgets and other forward looking
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information) with respect to the Corporation furnished by the Corporation to the Purchaser were, at the time the same were so furnished, and are (except as updated by the Corporation in writing to the Purchaser), on the date hereof, correct in all material respects. Any financial, budget and other projections furnished by the Corporation to the Purchaser were prepared in good faith on the basis of the assumptions stated therein, which assumptions were fair and reasonable in light of conditions existing at the time of delivery of such financial, budget or other projections, and represented, and as of the date of this representation, represent (subject to the updating or supplementation of any such financial, budget or other projections by any additional information provided to the Purchaser in writing, the representations contained in this Continuing Covenants Agreement being limited to financial, budget or other projections as so updated or supplemente-d), in the judgment of the Corporation, a reasonable, good faith estimate of the information purported to be set forth. No fact is known to the Corporation that materially and adversely affects or in the future may (as far as it can reasonably foresee) materially and adversely affect the security for, or the Corporation's ability to repay when due, the Bond, that has not been set forth in the financial statements and other documents referred to in this Section 3.13 or in such information, reports, papers and data otherwise disclosed in writing to the Purchaser. The documents furnished and written statements (other than projections, budgets and other forward looking information) made by the Corporation in connection with the negotiation, preparation or execution of this Continuing Covenants Agreement and the Corporation Documents did not contain, when furnished and taken as a whole with all other information furnished, untrue statements of material facts or omit to state material facts necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading.
Section 3.14. Investment Company. Neither the Corporation nor any of its Affiliates is an "investment company" or a company "controlled" by an "investment company," as such terms are defined in the Investment Company Act of 1940, as amended.
Section 3.15. Margin Stock. The Corporation is not engaged in the business of extending credit for the purpose of purchasing or carrying Margin Stock (within the meaning of Regulation U of the FRB), and no part of the proceeds of the Bond will be used to purchase or carry any such Margin Stock or extend credit to others for the purpose of purchasing or carrying any such Margin Stock.
Section 3.16. Subsidiaries. The Corporation does not have any subsidiaries.
Section 3.17. Transactions with Affiliates. The Corporation is not a party to any contract or agreement with any of its Affiliates on terms and conditions which are less favorable to the Corporation than would be usual and customary in similar contracts or agreements between Persons not affiliated with each other.
Section 3.18. Tax-Exempt Status. The Corporation has not taken any action or omitted to take any action, and has no actual knowledge of any action taken or omitted to be taken by any other Person, which action, if taken or omitted, would adversely affect the exclusion of interest on the Bond from gross income for federal income tax purposes or the exemption of interest on the Bond from State personal income taxes.
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Section 3.19. Usury. None of the Corporation Documents or the Bond provide for any payments that would violate any applicable law regarding permissible maximum rates of interest.
Section 3.20. Security; Pledge.of Pledged Property. The Agreement and the Security Agreement create a first lien on, and security interest in the Pledged Property which is irrevocably pledged to the punctual payment of the principal of, premium, if any, and interest on the Bond and thereafter, to the payment of any other amounts due hereunder. All action necessary to create a first lien on the Pledged Property has been duly and validly taken which lien is, and will remain, an exclusive lien, other than Permitted Liens.
Section 3. 21. Environmental. The Corporation has not received any notice to the effect that the Corporation's operations are not in material compliance with any Environmental Law.
ARTICLE IV
COVENANTSOFTHEBORROWER
The Corporation covenants and agrees, until the full and final payment and satisfaction of the Bond and any other amounts due hereunder or under the Corporation Documents, that:
Section 4.01. Existence, Etc. The Corporation shall maintain its status as a Tax-Exempt Organization and preserve, renew and maintain in full force and effect all material permits, licenses, approvals, consents, rights, privileges and franchiseS· necessary in the conduct or transaction of its business or the ownership or operation of its Property and assets the absence of which is, individually or in the aggregate, reasonably expected to result in a Material Adverse Effect.
Section 4.02. Maintenance of Properties. The Corporation shall, in all material respects, maintain, preserve and keep its Property, as applicable, in good repair, working order and condition (ordinary wear and tear excepted).
Section 4.03. Compliance with Laws; Taxes and Assessments. The Corporation shall comply with all Laws applicable to it and its Property, except where non-compliance could not reasonably be expected to result in a Material Adverse Effect, such compliance to include, without limitation, paying all taxes, assessments and governmental charges imposed upon it or its Property before the same become delinquent, unless and to the extent that the same are being contested in good faith and by appropriate proceedings and reserves are provided therefor that in the opinion ofthe Corporation are adequate.
Section 4. 04. Insurance. The Corporation shall maintain insurance with reputable insurance companies or associations believed by the Corporation at the time of purchase of such insurance to be financially sound and in such amounts and covering such risks as are usually carried by organizations engaged in the same or a similar business and similarly situated, which insurance may provide for reasonable deductibles from coverage; provided, however, this provision shall not be construed to require the Corporation to purchase or maintain earthquake insurance. While the Bond or any other amounts are owed hereunder or under any of the other Corporation Documents, the Corporation shall continue to maintain the insurance required as set forth Exhibit D hereto with respect to the Project.
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'
Section 4. 05. Reports. The Corporation shall furnish to the Purchaser in form and detail reasonably satisfactory to the Purchaser:
(a) as soon as available, and in any event within one hundred twenty (120) days after the close of each Fiscal Year, a copy of the consolidated statement of financial position of the Corporation as of the close of such Fiscal Year and a statement of activities and changes in net assets and a statement of cash flows of the Corporation for such period, and accompanying notes thereto, all prepared in accordance with GAAP and in reasonable detail showing in comparative form the figures for the previous fiscal year, accompanied by an unqualified opinion with respect thereto of an independent certified public accountant of recognized national standing, selected by the Corporation and reasonably satisfactory to the Purchaser, to the effect that the financial statements described herein have been prepared in accordance with GAAP and present fairly in accordance with GAAP the financial condition of the Corporation in all material respects as of the close of such Fiscal Year and the results of its operations and cash flows for the Fiscal Year then ended and that an examination of such accountants in connection with such financial statements has been made in accordance with GAAP and, accordingly, such examination included such tests of the accounting records and such other auditing procedures as were considered necessary in the circumstances and including· (i) a Compliance Certificate certified to by the chief financial officer of the Corporation, setting forth the calculations demonstrating the Corporation's compliance, as of the last day of the Fiscal Year and based upon the Audited Financial Statements, with the covenants set forth in Section 4.24(b) and 4.24(c) hereof, and (ii) a No Default Certificate certified to by the chief financial officer of the Corporation, certifying that such officer has no knowledge of any Event of Default or, if any such Event of Default has occurred during such period, setting forth a description of such Event of Default and specifying the action or proposed action, if any, taken by the Corporation to remedy the same;
(b) (i) within the period provided in subsection (a) above, to the extent the accountants are permitted to deliver such a statement under the then current recommendations of the American Institute of Certified Public Accountants, the written statement of the accountants who certified the audit report thereby required that in the course of their audit they have obtained no knowledge of any Event of Default in respect of the covenants set forth in Section 4.24 hereof, or, if such accountants have obtained knowledge of any such Event of Default, they shall disclose in such statement the nature and period of the existence thereof;
(c) as soon as available, and in any event within sixty ( 60) days after the close of each semi-annual period (i.e., within 60 days after each December 31 and June 30), a copy of the status report detailing progress on the Campaign and the Project, in form and detail reasonably satisfactory to the Purchaser;
(d) as soon as available, and in any event no later than September 15 of each year, the Corporation shall provide to the Purchaser, enrollment statistics to include (i) number of students applied, accepted, and enrolled in the previous 12 month period, and (ii) projected tuition and enrollment statistics for the next ensuing academic year, broken down by grade;
(e) within sixty (60) days after each January 31, a copy of the Corporation's annual operating budget for the following Fiscal Year;
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(f) within fifteen (15) days after filing and in no event later than three hundred thirty (330) days after the end of the Corporation's tax year, a copy of the Corporation's federal income tax return commencing with the tax year ending June 30, 2012; and
(g) as soon as available, and in any event within fifteen (15) days after the close of each semi-annual period, the Corporation shall provide evidence that all real estate taxes and assessments against its Property have been paid;
(h) as soon as available, and in any event within thirty (30) days after the close of its Fiscal Year, the Corporation shall provide a certificate setting forth in summary form the nature and extent of the insurance maintained pursuant to this Continuing Covenants Agreement and evidence that all insurance premiums have been paid; and
(i) promptly after knowledge thereof shall have come to the attention of any Authorized Official of the Corporation, written notice (i) of any threatened or pending litigation or governmental proceeding against the Corporation which, if adversely determined, is reasonably expected to have a Material Adverse Effect, (ii) of the occurrence of any Event of Default hereunder or (iii) of any fact, event or circumstance, to the extent of which, individually or in aggregate, is reasonably expected to have a Material Adverse Effect;
(j) such other information respecting the business, properties, condition or operations, financial or otherwise, of the Corporation or its Property as the Purchaser may from time to time reasonably request.
Section 4.06. Keeping of Books; Inspection and Field Audit. (a) The Corporation shall keep proper books of record and account, in which full and correct entries shall be made of all financial transactions and the assets and business of the Corporation in accordance with GAAP.
(b) The Corporation shall permit the Purchaser and its respective duly authorized representatives and agents to visit and inspect any of the Property, corporate books and financial records of the Corporation, to examine and make copies of the books of accounts and other financial records of the Corporation (excluding inspection of, or examining and making copies of, student or personnel files or confidential development files or attorney-client privileged materials; provided that the Corporation shall make a good faith effort to provide redacted copies of such files to the Purchaser), and to discuss the affairs, finances and accounts of the Corporation with, and to be advised as to the same by, its officers and, if accompanied by an officer ofthe Corporation, independent public accountants, on reasonable advance notice, at such reasonable times and reasonable intervals as the Purchaser may designate.
Section 4. 07. Burdensome Contracts with Affiliates. The Corporation shall not enter into any contract, agreement or business arrangement with any of its Affiliates on terms and conditions which are materially less favorable to the Corporation than are reasonably expected to be obtained in similar contracts, agreements or business arrangements between Persons not affiliated with each other.
Section 4. 08. Formation of Subsidiaries. The Corporation shall not create, form or acquire any Subsidiaries without the prior written consent of the Purchaser which will not be unreasonably withheld.
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Section 4.09. Corporation Documents. The Corporation shall not modify, amend or consent to any modification, amendment or waiver of any Corporation Document without the prior written consent of the Purchaser.
Section 4.1 0. Disclosure to Participants. The Corporation shall permit the Purchaser to disclose the financial information received by it pursuant to this Continuing Covenants Agreement to any participants with the Purchaser in any portion of the Bond pursuant to Section 7.14(b) hereof, subject to confidentiality restrictions and use restrictions customary for financial institutions.
Section 4.11. Further Assurances. From time to time hereafter, the Corporation shall execute and deliver such additional instruments, certificates or documents, and will take all such actions as the Purchaser may reasonably request for the purposes of implementing or effectuating the provisions of this Continuing Covenants Agreement and the other Corporation Documents or for the purpose of more fully perfecting or renewing the rights of the Purchaser with respect to the rights, properties or assets subject to such documents (or with respect to any additions thereto or replacements or proceeds thereof or with respect to any other Property or assets hereafter acquired by the Corporation which may be deemed to be a part thereof). Upon the exercise by the Purchaser of any power, right, privilege or remedy pursuant to this Continuing Covenants Agreement or the other Corporation Documents which requires any consent, approval, registration, qualification or authorization of any governmental authority or instrumentality, the Corporation shall execute and deliver all necessary applications, certifications, instruments and other documents and papers that the Purchaser may be required to obtain for such governmental consent, approval, registration, qualification or authorization.
Section 4.12. Maintenance ofTax-Exempt Status of the Bond. The Corporation shall not take any action or omit to take any action which, if taken or omitted, would adversely affect the tax-exempt status of the Bond.
Section 4.13. Compliance with ERISA. The Corporation shall (i) remain at all times in material compliance with all applicable Laws (including any legally available grace periods) with respect to any Plan of the Corporation or its Affiliates, (ii) at no time maintain any Unfunded Vested Liabilities, and (iii) maintain each Plan as to which it may have any liability and compliance in all material respects with the applicable provisions of ERISA and the regulations and published interpretations thereunder, the failure to comply with which could subject the Corporation to any tax or penalty which tax or penalty, taken together with all other taxes and penalties which could be assessed against the Corporation by reason of all other noncompliances, would have a Material Adverse Effect.
Section 4.14. Compliance with other Covenants. From and after the date hereof and so long as this Continuing Covenants Agreement is in effect, except to the extent compliance in any case or cases is waived in writing by the Purchaser, the Corporation agrees that it will, for the benefit of the Purchaser, comply with, abide by, and be restricted by all the agreements, covenants, obligations and undertaldngs of the Corporation contained in the Agreement and the other Corporation Documents to which it is a party, subject in each case to the cure periods, materiality standards and exceptions set forth therein, so long as any the Bond or any other amounts due under the Corporation Documents remain outstanding, which agreements, covenants, obligations and undertakings together with the related definitions, exhibits and
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ancillary provisions and cure provisions, materiality standards and exceptions applicable thereto, are incorporated herein by reference, mutatis mutandis, and made a part hereof to the same extent and with the same force and effect as if the same had been herein set forth in their entirety and were made as of the date hereof. No amendment to such agreements, covenants, obligations, undertakings or definitions shall be effective to amend the same as incorporated by reference herein without the prior written consent of the Purchaser.
Section 4.15. Investment Policy. All investments of the Corporation have been and will be made in accordance with the terms of this Continuing Covenants Agreement and the Investment Policy in effect at the time of the investment.
Section 4.16. Hedging Contracts. The Corporation shall not enter into any Hedging Contract or other derivative contract, or Permitted Liens relating thereto, without the prior written consent of the Purchaser.
Section 4.17. Environmental Laws. The Corporation shall comply with all applicable Enviromnental Laws, cure any material enviromnental event (or cause other Persons to effect any such cure) to the extent necessary to bring such real property owned, occupied or operated by the Corporation back into material compliance with Enviromnental Laws and to comply in all material respects with any cleanup orders issued by a Govermnental Authority having jurisdiction. The Corporation shall at all times use commercially reasonable efforts to render or maintain any real property owned, occupied or operated by the Corporation safe and fit, in all material respects, for its intended uses. The Corporation shall also notifY the Purchaser within five (5) days of any actual or alleged material failure to so comply with or perform, or any material breach, violation or default under any such Enviromnental Law or the occurrence of any material Enviromnental Violation.
Section 4.18. Certain Iriformation. The Corporation shall not include any information concerning the Purchaser in any offering document for the Bond that is not supplied in writing, or otherwise approved, by the Purchaser expressly for inclusion therein.
Section 4.19. Federal Reserve Board Regulations. The Corporation shall not use any portion of the proceeds of the Bond for the purpose of carrying or purchasing any Margin Stock.
Section 4. 20. Liens. Except as otherwise agreed to by the Purchaser in writing, the Corporation shall not create, incur or permit to exist any security interest in or Lien on the assets or any kind of other Property of the Corporation now owned or hereafter acquired which assets are Pledged Property.
Section 4.21. Leases. Except as provided in Section 4.24(a) below, the Corporation shall not acquire the use or possession of any Property under a Capital Lease or similar arrangement, whether or not the Corporation has the express or implied right to acquire title to or purchase such Property. If GAAP requires a recharacterization of operating leases to the effect that certain operating leases are to be treated as Capital Leases (each such recharacterized lease, a "Recharacterized Lease"), then such Recharacterized Leases shall be excluded from the caiculation of"Debt" for purposes of Section 4.24(a).
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Section 4.22. Sales, Etc of Assets. (a) The Corporation shall not sell, lease, assign, transfer or otherwise dispose of any of its personal property without the prior written consent of the Purchaser, except for (i) the sale, lease, assignment or transfer of personal property in the ordinary course of business for fair market value (as reasonably determined by the Corporation), and (ii) the disposition of surplus personal property or otherwise due to obsolescence or excessive wear.
(b) The Corporation shall not sell, lease, assign, transfer or otherwise dispose of its real property, without the prior written consent of the Purchaser, except for (i) contemporaneous like exchanges of real property for substantially equivalent real property, (ii) Permitted Liens, to the extent related to the Corporation's real property, or (iii) ground leases or other leases that (a) encumber the Corporation's interest in the Properties it uses to deliver its core educational mission, and do not, in the aggregate, at any one time, encumber more than 50,000 square feet of real property or (b) constitute investment assets of the Corporation and not operating assets;
Section 4.23. Amendments to Plans and Specifications and Project Budget. From time to time, the Corporation may amend the Plans and Specifications and/or the Project Budget without the consent of the Purchaser if each individual amendment changes the Costs of the Project by less than $250,000 and so long as the aggregate of all such amendments does not change the Costs of the Project by more than $1,000,000 by providing to the Purchaser a copy of the proposed amendment, together with evidence that the Project remains In Balance after such proposed amendment. Any amendments in excess of such thresholds shall require the consent of the Purchaser.
Section 4.24. Financial Covenants.
(a) Debt. The Corporation shall not, without the prior written consent of the Purchaser, incur, assume, guaranty or otherwise become liable for any Debt incurred after the issuance of the Bond (including, without limitation, any Capital Leases), except: (i) between the Closing Date and the fifth anniversary of the Closing Date, the Corporation may incur Debt in an aggregate maximum principal amount of $6,300,000 and (ii) after the fifth anniversary of the Closing Date, the Corporation may incur Debt in an aggregate maximum principal amount of $8,300,000; provided, however such Debt may not be secured by any Pledged Property or any Property subject to the Agreement Not To Encumber or Transfer Property.
The Corporation may request the Purchaser to approve the incurrence of Debt beyond the limits described in (i) or (ii) if such request is in writing, accompanied by cash projections or other reasonable documentation requested by the Purchaser that demonstrate that the Corporation, based on the most recent Audited Financial Statements, meets a pro forma Debt Service Coverage Ratio of at least 1.20:1.00 after taking into account the requested Debt. Notwithstanding the satisfaction of the Debt Service Coverage Ratio provided in the immediately preceding sentence, however, the approval of such request shall be in the sole discretion of the Purchaser.
(b) Minimum Debt Service Coverage Ratio. The Corporation shall maintain, as of the last day of each Fiscal Year based on the Audited Financial Statements of such Fiscal Year, a Debt Service Coverage Ratio greater than or equal to 1.10 to 1.00. The Corporation shall report
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annual compliance with this Section 4.24(b) in the Compliance Certificate delivered in accordance with Section 4.05(a) hereof, the form of which is attached hereto as Exhibit B.
(c) Minimum Liquidity. The Corporation shall maintain minimum unrestricted unencumbered Liquidity of (i) until the Completion Certificate is delivered, $4,000,000 and (ii) after the Completion Certificate is delivered, no less than 10% of the principal amount Outstanding on the Bond; provided, however, the Liquidity shall be equal to at least $3,000,000. The Corporation's Liquidity shall be tested on an annual basis based on the Corporation's Fiscal Year end Audited Financial Statements. The Corporation shall report compliance with this Section 4.24(c) in the Compliance Certificate delivered in accordance with Section 4.05(a) hereof, the form of which is attached hereto as Exhibit B. The Corporation may add funds held in
· the Excluded Deposit Accounts (as defined in the Security Agreement) to the funds otherwise available to the Corporation in order to establish compliance with the Minimum Liquidity requirement of this subparagraph (c) so long as each of the Excluded Deposit Accounts remains unencumbered by liens or security interests granted to any person or entity.
Section 4.25. Primary Depository Bank. In addition to the Campaign Account (as defined in Section 4.26(b) below), the Corporation shall maintain its primary operating account with the Purchaser for so long as the Bond is outstanding.
Section 4.26. The Campaign.
(a) With respect to the Campaign, the Corporation shall provide the Purchaser prior to disbursement of any Additional Bond Proceeds, a schedule of pledge goals, pledges to date, cash collected to date, pledges remaining, schedule of collection of pledges to be obtained and a reconciliation of receipt of such pledges with the anticipated construction funding schedule described in (b) below.
(b) Until the Completion Certificate is provided to the Purchaser, the Corporation shall deposit in an account maintained by the Corporation with the Purchaser (which account shall be separate from the Construction Fund), all amounts received in connection with the Campaign (the "Campaign Account") and amounts on deposit in the Campaign Account shall be used by the Corporation solely to pay (i) the amount to be contributed by the Corporation to the constmction of the Project as required pursuant to (c) below and (ii) to pay start up operational costs related to the Project; provided, however, amounts deposited into the Campaign Account may only be used in accordance with section (ii) so long as (A) funds remaining on deposit in the Campaign Account equal or exceed amounts taken into account in any In Balance calculation made in connection with a Request for Additional Bond Proceeds and (B) the expenditure will not adversely affect the ability of the Corporation to satisfY its obligations with respect to future Campaign Construction Contributions.
(c) Upon the funding of each Bond Portion other than the Initial Bond Proceeds and the Bond Portion related to the acquisition of the real property in connection with the Project, the Corporation shall contribute to the total Costs of the Project associated with a Request for Additional Bond Proceeds, the amounts provided with respect to the related periods specified below and as further described in Exhibit E "Nueva Projected Funding" and "Cash Flow Projections" attached hereto (collectively, the "Campaign Construction Contribution'~. Such amounts shall be contributed by depositing the required Campaign Construction Contribution to
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the Construction Fund. Unless waived by the Purchaser, the Purchaser shall not be required to fund any Requests for Additional Bond Proceeds unless the Corporation has made all prior and current corresponding Campaign Construction Contributions to the Construction Fund.
(i) For the period commencing with submission of the first Request for Additional Bond Proceeds after the Request related to the Initial Bond Portion and after the Request related to the acquisition of real property in connection with the Project, and continuing for six months from such submission, the Corporation shall contribute 30% of the total of the Costs of the Project related to a Request. Notwithstanding the foregoing, the Corporation's contribution for such period shall not be less than $8,000,000 and the Purchaser shall not be required to purchase any Bond Portions if the Corporation's total anticipated contribution for such period would be less than $8,000,000 based on the Project Budget.
(ii) For the period commencing upon the termination of the period described in the immediately preceding paragraph, and continuing for six months from such date, the Corporation shall contribute 40% of the total of the Costs of the Project related to a Request. Notwithstanding the foregoing, the Corporation's contribution for such period, together with contributions from the prior period, shall not be less than $10,000,000 and the Purchaser shall not be required to purchase any Bond Portions if the Corporation's total anticipated aggregate contribution for such period, together with the prior period, would be less than $10,000,000 based on the Project Budget.
(iii) For the remaining period commencing upon the termination of the period described in the immediately preceding paragraph and continuing until 90 days following the delivery of the Completion Certificate, the Corporation shall contribute 50% of the total of the Costs of the Project related to a Request; provided, however, the Purchaser shall not be required to purchase Bond Portions totaling in excess of $40,000,000 in the aggregate and any remaining balance of construction costs shall be paid by the Corporation.
(d) Upon the funding of the Bond Portion related to the acquisition of the real property in connection with the Project, the Request for Additional Bond Proceeds shall not exceed $16,332,500 for the purchase price of such property, plus $367,733 for associated soft costs, including but not limited to, architectural fees and consultant fees.
Section 4.27. Optional Redemption of the Bond. The Corporation agrees to elect to optionally redeem the Bond pursuant to Section 3.5 of the Agreement in the amounts and at the times sufficient to make timely payment of principal payments on the Bond as provided in the Bond Amortization Schedule attached hereto as Exhibit C. If as of January 1, 2016, there will be less than $40,000,000 outstanding on the Bond, the Bond Amortization Schedule shall be modified by the Purchaser prior to January 1, 2016 and provided to the Borrower reflecting the lesser principal amount outstanding on the Bond. The total principal payments under the revised amortization schedule required to be paid from optional redemptions shall equal the principal amount of the Bond outstanding on January 1, 2016 (first day of the thirty seventh month following the date of issuance of the Bond). In the event that partial redemptions other than optional redemptions required to be made pursuant to this Section 4.27 are made on the Bond at any time, the principal amount of such redemption payments shall be applied to the payment of the Bond in inverse order of the amounts shown on the Bond Amortization Schedule.
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ARTICLEV
EVENTS OF DEFAULT
Section 5.01. Events of Default. The occurrence of any Event of Default under any Corporation Document shall constitute an Event of Default under this Continuing Covenants Agreement.
Section 5. 02. Consequences of an Event of Default. If an Event of Default specified in Section 5.01 hereof shall occur and be continuing, the Purchaser may take one or more of the following actions at any time and from time to time (regardless of whether the actions are taken at the same or different times):
(a) either personally or by attorney or agent without bringing any action or proceeding, or by a receiver to be appointed by a court in any appropriate action or proceeding, take whatever action at law or in equity may appear necessary or desirable to collect the amounts due and payable under the Corporation Documents or to enforce performance or observance of any obligation, agreement or covenant of the Corporation under the Corporation Documents, whether for specific performance of any agreement or covenant of the Corporation or in aid of the execution of any power granted to the Purchaser in the Corporation Documents;
(b) cure any Event of Default or event of nonperformance hereunder or under any other Corporation Document; provided, however, that the Purchaser shall have not an obligation to effect such a cure; and provided, however, that in the event that any Event of Default occurs, the Purchaser will require the Corporation to escrow funds for the payment of real estate taxes and insurance premiums owed on its Property, if applicable, to be paid on a monthly basis when amounts owed under the Bond are paid.
Section 5.03. Remedies Cumulative; Solely for the Benefit of the Purchaser. To the extent permitted by, and subject to the mandatory requirements of, applicable Law, each and every right, power and remedy herein specifically given to the Purchaser hereunder and in the other Corporation Documents shall be cumulative, concurrent and nonexclusive and shall be in addition to every other right, power and remedy herein specifically given or now or hereafter existing at law, in equity or by statute, and each and every right, power and remedy (whether specifically herein given or otherwise existing) may be exercised from time to time and as often and in such order as may be deemed expedient by the Purchaser, and the exercise or the beginning of the exercise of any power or remedy shall not be construed to be a waiver of the right to exercise at the same time or thereafter any other right, power or remedy.
Section 5.04. Waivers or Omissions. No delay or omission by the Purchaser in the exercise of any right, remedy or power or in the pursuit of any remedy shall impair any such right remedy or power or be construed to be a waiver of any default on the part of the Purchaser or to be acquiescence therein. No express or implied waiver by the Purchaser of any Event of Default shall in any way be a waiver of any future or subsequent Event of Default.
Section 5. 05. Discontinuance of Proceedings. If the Purchaser shall proceed to invoke any right, remedy or recourse permitted hereunder or under the other Corporation Documents and shall thereafter elect to discontinue or abandon the same for any reason, the Purchaser shall
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have the unqualified right so to do and, in such event, the Corporation and the. Purchaser shall be restored to their former positions with respect to the Corporation Documents and otherwise, and the rights, remedies, recourse and powers of the Purchaser hereunder shall continue as if the same had never been invoked.
Section 5. 06. Injunctive Relief. The Corporation recognizes that in the event an Event of Default occurs, any remedy of law may prove to be inadequate relief to the Purchaser; therefore, the Corporation agrees that if the Purchaser so requests, it shall be entitled to temporary and permanent relief in any such case.
ARTICLE VI
INDEMNIFICATION
Section 6. 01. Indemnification. In addition to any and all rights of reimbursement, indemnification, subrogation or any other rights pursuant hereto or under law or equity, the Corporation hereby agrees (to the extent permitted by law) to indemnify and hold harmless the Purchaser and its officers, directors and agents (each, an "Indemnitee") from and against any and all claims, damages, losses, liabilities, reasonable costs or expenses whatsoever (including reasonable attorneys' fees) which may incur or which may be claimed against an Indemnitee by any Person or entity whatsoever (collectively, the "Liabilities") by reason of or in connection with (a) the execution and delivery or transfer of, or payment or failure to pay under, any Corporation Document; (b) the issuance and sale of the Bond; and (c) the use of the proceeds of the Bond; provided that the Corporation shall not be required to indemnify an Indemnitee for any claims, damages, losses, liabilities, costs or expenses to the extent, but only to the extent, caused by the willful misconduct, bad faith or gross negligence of an Indemnitee. If any proceeding shall be brought or threatened against an Indemnitee by reason of or in connection with the events described in clause (a), (b) or (c) as a condition of indemnity hereunder each Indemnitee shall promptly notify the Corporation in writing and the Corporation shall assume the defense thereof, including the employment of counsel satisfactory to such Indemnitee and the payment of all reasonable costs of litigation. Notwithstanding the preceding sentence, each Indemnitee shall have the right to employ its own counsel and to determine its own defense of such action in any such case, but the fees and expenses of such counsel shall be at the expense of such Indemnitee unless (i) the employment of such counsel shall have been authorized in writing by the Corporation, or (ii) the Corporation, after due notice of the action, shall not have employed counsel satisfactory to such Indemnitee to have charge of such defense, in either of which events the reasonable fees and expenses of counsel for such Indemnitee shall be borne by the Corporation. The Corporation shall not be liable for any settlement of any such action effected without its consent. Nothing under this Section 6.01 ·is intended to limit the Corporation's payment of any amounts due hereunder or under the Corporation Documents.
Section 6. 02. Survival. The obligations of the Corporation under this Article VI shall survive the payment of the Bond and the termination of the Agreement and this Continuing Covenants Agreement.
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ARTICLE VII
MISCELLANEOUS
Section 7.01. Patriot Act Notice. The Purchaser hereby notifies the Corporation that pursuant to the requirements of the Patriot Act it is required to obtain, verify and record information that identifies the Corporation, which information includes the name and address of the Corporation and other information that will allow the Purchaser to identify the Corporation in accordance with the Patriot Act. The Corporation hereby agrees that it shall promptly provide such information upon request by the Purchaser.
Section 7. 02. Further Assurances. From time to time upon the request of either party hereto, the other shall promptly and duly execute, acknowledge and deliver any and all such further instruments and documents as the requesting party may in its reasonable discretion deem necessary or desirable to confirm this Continuing Covenants Agreement and the other Corporation Documents, to carry out the purpose and intent hereof and thereof or to enable the requesting party to enforce any of its rights hereunder or thereunder. At any time, and from time to time, upon request by the Purchaser, the Corporation will, at the Corporation's expense, (a) correct any defect, error or omission which may be discovered in the form or content of any of the Corporation Documents, and (b) make, execute, deliver and record, or cause to be made, executed, delivered and recorded, any and all further instruments, certificates and other documents as may, in the opinion of the Purchaser, be necessary or desirable in· order to complete, perfect or continue and preserve the Lien of the Bond and Agreement. Upon any failure by the Corporation to do so within a reasonable time period following such request, the Purchaser, on behalf of the Corporation, may make, execute and record any and all such instruments, certificates and other documents for and in the name of the Corporation, all at the sole expense of the Corporation, and the Corporation hereby appoints the Purchaser, on behalf of the Corporation, as the agent and attorney-in-fact of the Corporation to do so, this appointment being coupled with an interest and being irrevocable. Without limitation of the foregoing, the Corporation irrevocably authorizes the Purchaser at any time and from time to time to file any initial financing statements, amendments thereto and continuation statements deemed necessary or desirable by the Purchaser to establish or maintain the validity, perfection and priority of the security interests granted in the other Corporation Documents, and the Corporation ratifies any such filings made by the Purchaser prior to the date hereof. In addition, at any time, and from time to time, upon request by the Purchaser, the Corporation will, at the Corporation's expense, provide any and all further instruments, certificates and other documents as may, in the opinion of the Purchaser, be necessary or desirable in order to verify the Corporation's identity and background in a manner satisfactory to the Purchaser, as the case may be.
Section 7.03. Amendments and Waivers. Any provision of this Continuing Covenants Agreement or the other Corporation Documents may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by the Purchaser and the Corporation. Amendments to this Continuing Covenants Agreement may be made without the consent of the Issuer.
Section 7.04. No Implied Waiver; Cumulative Remedies. No course of dealing and no delay or failure of the Purchaser in exercising any right, power or privilege under this Continuing Covenants Agreement or the other Corporation· Documents shall affect any other or future
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exercise thereof or exercise of any right, power or privilege; nor shall any single or partial exercise of any such right, power or privilege or any abandonment or discontinuance of steps to enforce such a right, power or privilege preclude any further exercise thereof or of any other right, power or privilege. The rights and remedies of the Purchaser under this Continuing Covenants Agreement are cumulative and not exclusive of any rights or remedies which the Purchaser would otherwise have under any Corporation Document, at law or in equity.
Section 7.05. Notices. All notices, requests, demands, directions and other communications (collectively "Notices") under the provisions of this Continuing Covenants Agreement shall be in writing (including facsimile communication), unless otherwise expressly permitted hereunder, and shall be sent by first-class mail, overnight delivery or facsimile and shall be deemed received as follows: (i) if by first class mail, five (5) days after mailing; (ii) if by overnight delivery, on the next Business Day; and (iii) if by facsimile, when confirmation of receipt is obtained. All notices shall be sent to the applicable party at the following address or in accordance with the last unrevoked written direction from such party to the other parties hereto:
The Issuer:
The Corporation:
The Purchaser:
with a copy to:
California Municipal Finance Authority 2111 Palomar Airport Road Carlsbad, CA 92011 Attention: John P. Stoecker
The Nueva School 6565 Skyline Boulevard Hillsborough, CA 94010 Attention: Associate Head of School Telephone: (650) 350-4529 Facsimile: (650) 344-9302
Boston Private Bank & Trust Company 160 Bovet Road San Mateo, CA 94402 Attention: Clancy Swanson-Stein Facsimile: (650) 463-8705 Telephone: (650) 463-8713
Boston Private Bank & Trust Company Ten Post Office Square Boston, MA 02109 Attention: National Non-Profit c/o Gisela LoPiano Facsimile: (617) 912-4554 Telephone: (617) 912-4468
The Purchaser may rely on any notice purportedly made by or on behalf of the other, and shall have no duty to verify the identity or authority of the Person giving such notice, unless such actions or omissions would amount to gross negligence or intentional misconduct.
Section 7. 06. Right of Setoff (a) During the continuance of an Event of Default, the Purchaser may, at any time and from time to time, without notice to the Corporation or any other
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person (any such notice being expressly waived), set off and appropriate and apply against and on account of any amounts due under this Continuing Covenants Agreement, the Bond and the I Agreement, without regard to whether or not the Purchaser shall have made any demand therefor, and although such obligations may be contingent or umnatured, any and all deposits (general or special, including but not limited to deposits made pursuant to this Continuing Covenants Agreement and Debt evidenced by certificates of deposit, whether matured or unmatured, but not including trust accounts, such as restricted donor accounts) and any other Debt at any time held or owing by the Purchaser to or for the credit or the account of any or all of the Corporation.
(b) The Purchaser agrees promptly to notify the Corporation after any such set-off and application referred to in subsection (a) above, provided that the failure to give such notice shall not affect the validity of such set-off and application. Subject to the provisions of subsection (a) above, the rights of the Purchaser under this Section 7.06 are in addition to other rights and remedies (including, without limitation, other rights of set-off) which the Purchaser may have.
Section 7.07. No Third-Party Rights. Nothing in this Continuing Covenants Agreement, whether express or implied, shall be construed to give to any Person other than the parties hereto any legal or equitable right, remedy or .claim under or in respect of this Continuing Covenants Agreement, which is intended for the sole and exclusive benefit of the parties hereto.
Section 7. 08. Severability. The provisions of this Continuing Covenants Agreement are intended to be severable. If any provision of this Continuing Covenants Agreement shall be held invalid or unenforceable in whole or in part in any jurisdiction, such provision shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without in any marmer affecting the validity or enforceability thereof in any other jurisdiction or the remaining provisions hereof in any jurisdiction.
Section 7.09. Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS PROVISIONS.
(b) EACH PARTY HERETO CONSENTS TO AND SUBMITS TO IN PERSONAM JURISDICTION AND VENUE IN THE STATE AND IN THE FEDERAL DISTRICT COURTS WHICH ARE LOCATED IN THE STATE. EACH PARTY ASSERTS THAT IT HAS PURPOSEFULLY AVAILED ITSELF OF THE BENEFITS OF THE LAWS OF THE STATE AND WAIVES ANY OBJECTION TO IN PERSONAM JURISDICTION ON THE GROUNDS OF MINIMUM CONTACTS, WAIVES ANY OBJECTION TO VENUE, AND W AlVES ANY PLEA OF FORUM NON CONVENIENS. THIS CONSENT TO AND SUBMISSION TO JURISDICTION IS WITH REGARD TO ANY ACTION RELATED TO TI-IIS AGREEMENT. REGARDLESS OF WHETHER THE PARTY'S ACTIONS TOOK PLACE IN THE STATE OR ELSEWHERE IN THE UNITED STATES, THIS SUBMISSION TO JURISDICTION IS NONEXCLUSIVE, AND DOES NOT PRECLUDE EITHER PARTY FROM OBTAINING JURISDICTION OVER THE OTHER IN ANY COURT OTHERWISE HAVING JURISDICTION.
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(c) TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY WAIVES ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE OTHER CORPORATION DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. IF AND TO THE EXTENT THAT THE FOREGOING WAIVER OF THE RIGHT TO A JURY TRIAL IS UNENFORCEABLE FOR ANY REASON IN SUCH FORUM, EACH OF THE PARTIES HERETO. HEREBY CONSENTS TO THE ADJUDICATION OF ALL CLAIMS PURSUANT TO JUDICIAL REFERENCE AS PROVIDED IN CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 638, AND THE JUDICIAL REFEREE SHALL BE EMPOWERED TO HEAR AND DETERMINE ALL ISSUES IN SUCH REFERENCE, WHETHER FACT OR LAW. EACH OF THE PARTIES HERETO REPRESENTS THAT EACH HAS REVIEWED THIS WAIVER AND CONSENT AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS AND CONSENTS TO JUDICIAL REFERENCE FOLLOWING CONSULTATION WITH
. LEGAL COUNSEL ON SUCH MATTERS. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT OR TO JUDICIAL REFERENCE UNDER CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 638 AS PROVIDED HEREIN.
(d) The covenants and waivers made pursuant to this Section 7.09 shall be irrevocable and unmodifiable, whether in writing or orally, and shall be applicable to any subsequent amendments, renewals, supplements or modifications of this Continuing Covenants Agreement. In the event of litigation, this Continuing Covenants Agreement may be filed as a written consent to a trial by the court.
Section 7.1 0. Arbitration.
(a) Arbitration. The parties hereto agree, upon demand by any party, to submit. to binding arbitration all claims, disputes and controversies between or among them (and their respective employees, officers, directors, attorneys, and other agents), whether in tort, contract or otherwise in any way arising out of or relating to (i) this Continuing Covenants Agreement, or any of the other Corporation Documents, and their negotiation, ·execution, collateralization, administration, repayment, modification, extension, substitution, formation, inducement, enforcement, default or termination; or (ii) requests for other credit accommodations.
(b) Governing Rules. Any arbitration proceeding will (i) proceed in a location in the State selected by the American Arbitration Association ("AAA"); (ii) be governed by the Federal Arbitration Act (Title 9 of the United States Code), notwithstanding any conflicting choice of law provision in any of the documents between the parties; and (iii) be conducted by the AAA, or such other administrator as the parties shall mutually agree upon, in accordance with the AAA's commercial dispute resolution procedures, unless the claim or counterclaim is at least $1,000,000 exclusive of claimed interest, arbitration fees and costs in which case the arbitration shall be conducted in accordance with the AAA's optional procedures for large, complex commercial disputes (the commercial dispute resolution procedures or the optional procedures for large, complex commercial disputes to be referred to herein, as applicable, as the "Rules"). If there is any inconsistency between the terms hereof and the Rules, the terms and procedures set
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forth herein shall control. Any party who fails or refuses to submit to arbitration following a demand by any other party shall bear all costs and expenses incurred by such other party in compelling arbitration of any dispute. Nothing contained herein shall be deemed to be a waiver by any. party that is a bank of the protections afforded to it under 12 U.S.C. §91 or any similar applicable state law.
(c) No Waiver of Provisional Remedies, Self-Help and Foreclosure. The arbitration requirement does not limit the right of any party to (i) foreclose against real or personal property collateral; (ii) exercise self-help remedies relating to collateral or proceeds of collateral such as setoff or repossession; or (iii) obtain provisional or ancillary remedies such as replevin, injunctive relief, attachment or the appointment of a receiver, before, during or after the pendency of any arbitration proceeding. This exclusion does not constitute a waiver of the right or obligation of any party to submit any dispute to arbitration or reference hereunder, including those arising from the exercise of the actions detailed in sections (i), (ii) and (iii) of this paragraph.
(d) Arbitrator Qualijications and Powers. Any arbitration proceeding in which the amount in controversy is $5,000,000.00 or less will be decided by a single arbitrator selected according to the Rules, and who shall not render an award of greater than $5,000,000.00. Any dispute in which the amount in controversy exceeds $5,000,000.00 shall be decided by majority vote of a panel of three arbitrators. The Corporation and the .Purchaser shall each appoint one arbitrator and such arbitrators shall appoint the third arbitrator as chairperson, all in accordance with the Rules. All three arbitrators must actively participate in all hearings and deliberations. The arbitrator will be a neutral attorney licensed in the State or a neutral retired judge of the State or federal judiciary of the State, in either case with a minimum of ten years' experience in the substantive law applicable to the subject matter of the dispute to be arbitrated. The arbitrator will determine whether or not an issue is arbitratable and will give effect to the statutes of limitation in determining any claim. In any arbitration proceeding the arbitrator will decide (by documents only or with a hearing at the arbitrator's discretion) any pre-hearing motions which are similar to motions to dismiss for failure to state a claim or motions for summary adjudication. The arbitrator shall resolve all disputes in accordance with the substantive law of the State and may grant any remedy or relief that a court of such state could order or grant within the scope hereof and such ancillary relief as is necessary to make effective any award. The arbitrator shall also have the power to award recovery of all costs and fees, to impose sanctions and to take such other action as the arbitrator deems necessary to the same extent a judge could pursuant to the Federal Rules of Civil Procedure, the California Rules of Civil Procedure or other applicable law. Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction. The institution and maintenance of an action for judicial relief or pursuit of a provisional or ancillary remedy shall not constitute a waiver of the right of any party, including the plaintiff, to submit the controversy or claim to arbitration if any other party contests such action for judicial relief.
(e) Discovery. In any arbitration proceeding, discovery will be permitted in accordance with the Rules. All discovery shall be expressly limited to matters directly relevant to the dispute being arbitrated and must be completed no later than 20 days before the hearing date. Any requests for an extension of the discovery periods, or any discovery disputes, will be subject to fmal determination by the arbitrator upon a showing that the request for discovery is
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•
essential for the party's presentation and that no alternative means for obtaining information is available.
(f) Class Proceedings and Consolidations. No party hereto shall be entitled to join or consolidate disputes by or against others in any arbitration, except parties who have executed any Corporation Document, or to include in any arbitration any dispute as a representative or member of a class, or to act in any arbitration in the interest of the general public or in a private attorney general capacity.
(g) Payment of Arbitration Costs and Fees. The arbitrator shall award all costs and expenses of the arbitration proceeding.
(h) Miscellaneous. To the maximum extent practicable, the AAA, the arbitrators and the parties shall take all action required to conclude any arbitration proceeding within 180 days of the filing of the dispute with the AAA. No arbitrator or other party to an arbitration proceeding may disclose the existence, content or results thereof, except for disclosures of information by a party required in the ordinary course of its business or by applicable law or regulation. If more than one agreement for arbitration by or between the parties potentially applies to a dispute, the arbitration provision most directly related to the Corporation Documents or the subject matter of the dispute shall control. This arbitration provision shall survive termination, amendment or expiration of any of the Corporation Documents or any relationship between the parties.
Section 7.11. Prior Understandings. This Continuing Covenants Agreement and the other Corporation Documents supersede all prior understandings and agreements, whether written or oral, among the parties hereto relating to the transactions provided for herein and therein.
Section 7.12. Duration. All representations and warranties of the Corporation contained herein or made in counection herewith shall survive the making of and shall not be waived by the execution and delivery of this Continuing Covenants Agreement or the other Corporation Documents or any investigation by the Corporation. All covenants and agreements of the Corporation contained herein shall continue in full force and effect from and after the date hereof until the Bond has been fully discharged.
Section 7.13. Counterparts. This Continuing Covenants Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute but one and the same instrument.
Section 7.14. Successors and Assigns. (a) Successors and Assigns Generally. This Continuing Covenants Agreement is a continuing obligation and shall be binding upon the Corporation, its successors, transferees and assigns and shall inure to the benefit of the Purchaser and its permitted successors, transferees and assigns. Except as provided in the next succeeding sentence, tlie parties may not assign or otherwise transfer any of their rights or obligations hereunder without the prior written consent of the other party. Notwithstanding any limitations on assignment of this Continuing Covenants Agreement or restrictions on transfer of the Bond contained herein or in the Agreement, the Purchaser may, in its sole discretion and in accordance
27 #11560443_v9
with applicable Law, transfer in whole, this Continuing Covenants Agreement and its interest in the Bond and the other Corporation Documents to any affiliate or any successor to the business of the Purchaser. Upon acceptance and notification thereof to the Corporation, any successor to the Purchaser for such purposes hereunder shall thereupon succeed to and become vested with all of the rights, powers, privileges and responsibilities of the Purchaser, and the Purchaser or any other Person being replaced as the Purchaser shall be discharged from its duties and obligations as the Purchaser hereunder.
(b) Participations. The Purchaser shall have the right to grant participations in a portion of the Purchaser's interest in the Bond, this Continuing Covenants Agreement and the other Corporation Documents; provided that the Purchaser shall retain at least a majority interest in the Bond.
(c) Certain Pledges. The Purchaser may at any time pledge or grant a security interest in all or any portion of its rights under the Bond, this Continuing Covenants Agreement and the other Corporation Documents to secure obligations of the Purchaser, including any pledge or assigrunent to secure obligations to a Federal Reserve Purchaser; provided that no such pledge or assignment shall release the Purchaser from any of its obligations hereunder or substitute any such pledgee or assignee for the Purchaser as a party hereto.
Section 7.15. Headings. Section headings in this Continuing Covenants Agreement are included herein for convenience of reference only and shall not constitute a part hereof for any other purpose.
Section 7.16. Electronic Signatures. The parties agree that the electronic signature of a party hereto shall be as valid as an original signature of such party and shall be effective to bind such party to this Continuing Covenants Agreement. The parties agree that any electronically signed document (including this Continuing Covenants Agreement) shall be deemed (i) to be "written" or "in writing," (ii) to have been signed and (iii) to constitute a record established and maintained in the ordinary course of business and an original written record when printed from electronic files. Such paper copies or "printouts," if introduced as evidence in any judicial, arbitral, mediation or adruinistrative proceeding, will be admissible as between the parties to the same extent and under the same conditions as other original business records created and maintained in documentary form. Neither party shall contest the admissibility of true and accurate copies of electronically signed documents on the basis of the best evidence rule or as not satisfying the business records exception to the hearsay rule. For purposes hereof, "electronic signature" means a manually-signed original signature that is then transmitted by electronic means; "transmitted by electronic means" means sent in the form of a facsimile or sent via the internet as a "pdf (portable document format) or other replicating image attached to an email message; and, "electronically signed document" means a document transmitted by electronic means and containing, or to which there is affixed, an electronic signature.
[SIGNATURES BEGIN ON THE FOLLOWING PAGE.]
28 #11560443_v9
•
•
IN WITNESS WHEREOF, the Issuer, the Corporation and the Purchaser have caused this Bond and Loan Agreement to be executed in their respective corporate names as of the date first above written. _....
CALIFORNIA MUNICIPAL FINANCE AUTHORITY
THE NUEVA SCHOOL
BOSTON PRIVATE BANK & TRUST COMPANY
By:.~~~~~~~~--~~-----1 ts: --~,,=;:.:::--=-=:..:..:=::::.::'----------
[Signature Page to Bond and Loan Agreement- The Nueva School Project, Series 2012A]
S-1
IN WITNESS WHEREOF, the Issuer, the Corporation and the Purchaser have caused this Bond and Loan Agreement to be executed in their respective corporate names as of the date first above written.
CALIFORNIA MlJNICIPAL FINANCE AUTHORITY
By: ______________ _
Member, Board of Directors
THE NUEVA SCHOOL
By: __ --'-ic'-7'-t-t"l'--c--::-'..._.£--:------Assoc' te Head of School, Chief Op rating and Financial Officer
BOSTON PRIVATE BANK & TRUST COMPANY
By: ______________ _
Its:----------------
[Signature Page to Bond and Loan Agreement- The Nueva School Project, Series 20 12A]
OHSUSA:751727866.8 S-1
t
•
EXIDBITA
FORM OF NO DEFAULT CERTIFICATE
This No Default Certificate (this "Certificate") is furnished to Boston Private Bank & Trust Company (the "Purchaser") pursuant to that certain Continuing Covenants Agreement dated as of December 1, 2012 (the "Agreement"), by and between The Nueva School (the "Corporation"), and the Purchaser. Unless otherwise defined herein, the terms used in this Certificate shall have the meanings assigned thereto in the Agreement.
. THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected [chief financial officer] of the Corporation;
2. I have reviewed the terms of the Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and conditions of the Corporation during the accounting period covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I have no knowledge ·of, the existence of any condition or the occurrence of any event which constitutes a Default or Event of Default during or at the end of the accounting period covered by the attached financial statements or as of the date of this Certificate, except as set forth below;
4. To the best of my knowledge the fmancial statements required by Section 4.05 of the Agreement and being furnished to you concurrently with this certificate fairly represent the consolidated financial condition of the Corporation in accordance with GAAP (subject to year-end adjustments) as of the dates and for the periods covered thereby; and
Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which the Corporation has taken, is taking, or proposes to take with respect to each such condition or event:
A-1 #11560443_v9
.. ~.· '' ~
• •
The foregoing certifications and the financial statements delivered with this Certificate in support hereof, are made and delivered this __ day of , 20_.
THE NUEVA SCHOOL
By: _________________________ _
Name: Title: -----------
A-2 # 11560443 _ v9
EXHIBITB
FORM OF COMPLIANCE CERTIFICATE
COMPLIANCE CALCULATIONS FOR CONTINUING COVENANTS AGREEMENT
Dated as of ____ I, 2012
Calculations as of _____ ,, 20_
To: Boston Private Bank & Trust Company
Subject: The Nueva School
In accordance with our Continuing Covenants Agreement, dated as of December 1, 2012, as amended, modified, extended, renewed, supplemented or restated (the "Agreement"), attached are the financial statements of The Nueva School, a California nonprofit public benefit corporation (the "Corporation"), of and for the fiscal year or __ fiscal quarter (check one) ended , 20_ (the "Reporting Date") required to be delivered pursuant to Section 4.05 of the Agreement (the "Current Financials"). All terms used in this certificate have the meanings given in the Agreement unless otherwise defined in this certificate.
The Corporation certifies that the Current Financials are true, correct and complete as of the date and for the periods covered thereby and have been prepared in accordance with GAAP but without notes and subject to ordinary year-end adjustments, and fairly present in all material respects the financial condition of the Corporation as of the date thereof and in a manner consistent with prior periods.
The Corporation further certifies as follows:
Service Coverage Ratio: ($000's)
Change in Unrestricted Net Assets $ _____ *
Add Depreciation and Amortization Expense
Add Interest Expense
Less Any Noncash Items Appearing on the Current Financials
Total
Divided By Required Payments or Principal Interest Payments on the Payments and all other Debt of the Corporation
* Any effect positive or negative relating to unrealized gains/(losses) on investments shall be excluded
B-1 #11560443_v9
Pursuant to Section 4.24(b) of the Agreement, as of the Reporting Date, the Corporation's Minimum Debt Service Coverage (select appropriate box)
D Satisfies Section 4.24(b) of the Agreement
D Does not satisfy Section 4.24(b) of the Agreement]
Liquidity Covenant:
Pursuant to Section 4.24(c) of the Agreement, as of the Reporting Date, the Corporation's minimum unrestricted unencumbered Liquidity:
D Satisfies Section 4.24(c) of the Agreement
D Does not satisfy Section 4.24(c) of the Agreement]
THE NUEVA SCHOOL
By __________________________ __
Name: Title: --------------
B-2 #ll560443_v9
• •
#11560443_v9
EXHIBITC
AMORTIZATION SCHEDULE
Payment Date
January I, 2016 February I, 2016 March I, 2016 April!, 2016 May I, 2016 June I, 2016 July I, 2016
August l, 2016 September I, 2016
October l, 2016 November l, 2016 December l, 2016 January l, 2017
February I, 2017 March l, 2017 April!, 2017 May l, 2017 June l, 2017 July 1, 2017
August 1, 2017 September l, 20 17
October 1, 2017 November l, 2017 December 1, 2017 January l, 2018
February I, 2018 March l, 2018 April!, 2018 May I, 2018 June l, 2018 July l, 2018
August 1, 2018 September l, 2018
October l, 2018 November l, 2018 December l, 2018 January l, 2019 February I, 2019 March l, 2019 April!, 2019 May 1, 2019 June 1, 2019 July l, 2019
August I, 2019 September l, 20 19
October!, 2019 November l, 2019 December 1, 2019 January l, 2020
C-1
Principal Amount
$63,175.38 63,352.18 74,328.54 63,737.49 67,503.09 64,104.79 67,859.53 64,474.10 64,654.54 68,393.04 65,026.89 68,754.39 65,40!.29 65,584.32 76,350.31 65,98!.54 69,680.83 66,36!.21 70,049.28 66,742.97 66,929.76 70,60!.03 67,314.65 70,974.55 67,70!.67 67,891.!4 78,439.72 68,300.66 71,931.42 68,693.12 72,312.28 69,087.74 69,28!.09 72,882.88 69,678.95 73,268.98 70,079.00 70,275.13 80,599.03 70,697.37 74,257.30 71,103.04 74,650.99 71,510.95 71,71!.08 75,24!.06 72,122.34 75,640.17 72,535.87
#11560443_v9
Payment Date
February 1, 2020 March 1, 2020 April 1, 2020 May!, 2020 June!, 2020 July 1, 2020
August 1, 2020 September 1, 2020
October 1, 2020 November 1, 2020 December 1, 2020
January 1, 2021 February!, 2021
March 1, 2021 April!, 2021 May!, 2021 June 1, 2021 July 1, 2021
August 1, 2021 September 1, 2021
October 1, 2021 November!, 2021 December 1, 2021
January 1, 2022 February 1, 2022
March 1, 2022 April 1, 2022 May 1, 2022 June!, 2022 July!, 2022
August I, 2022 September I, 2022
October 1, 2022 November I, 2022 December I, 2022
January 1, 2023 February !, 2023
March 1, 2023 April!, 2023 May 1, 2023 June 1, 2023 July 1, 2023
August 1, 2023 September 1, 2023
October 1, 2023 November 1, 2023 December 1, 2023 January l, 2024 February 1, 2024 March 1, 2024 April 1, 2024 May 1, 2024 June 1, 2024
C-2
Principal Amount
72,738.87 82,830.57 73,174.25 76,661.00 73,593.58 77,067.93 74,015.22 74,222.36 77,678.14 74,647.47 78,090.69 75,074.93 75,285.03 85,136.77 . 75,733.99 79,145.10 76,167.44 79,565.74 76,603.27 76,817.66 80,196.74 77,257.08 80,623.18 77,698.92 77,916.37 87,520.11 78,379.37 81,712.30 78,827.40 82,147.10 79,277.90 79,499.77 82,799.60 79,953.99 83,240.39 80,410.70 80,635.74 89,983.19 81,113.24 84,365.39 81,576.35 84,814.81 82,042.01 82,271.62 85,489.54 82,741.11 85,945.16 83,213.20 83,446.08 92,528.67 83,938.57 87,107.23 84,417.26
#11560443_v9
Payment Date
July l, 2024 August I, 2024
September l, 2024 October l, 2024
November I, 2024 December l, 2024 January I, 2025 February I, 2025
March l, 2025 April!, 2025 May I, 2025 June I, 2025 July l, 2025
August l, 2025 September l, 2025
October I, 2025 November I, 2025 December I, 2025 January l, 2026 February l, 2026
March l, 2026 April!, 2026 May l, 2026 June I, 2026 July l, 2026
August l, 2026 September l, 2026
October l, 2026 November l, 2026 December I, 2026
January l, 2027 February I, 2027 March l, 2027 April!, 2027 May l, 2027 June I, 2027 July l, 2027
August l, 2027 September l, 2027
October I, 2027 November l, 2027 December I, 2027 January l, 2028
February I, 2028 March I, 2028 April l, 2028 May l, 2028 June I, 2028 July l, 2028
August I, 2028 September l, 2028
October I, 2028 November l, 2028
C-3
Principal Amount
87,571.78 84,898.59 85,136.19 88,269.46 85,621.48 88,740.42 86,109.45 86,350.44 95,159.30 86,858.41 89,940.80 87,353.21 90,420.97 87,850.73 88,096.59 91,142.38 88,598.21 91,629.18 89,102.59 89,351.96 97,877.94 89,875.94 92,869.16 90,387.37 93,365.48 90,901.63 91,156.03 94,111.42 91,674.52 94,614.59 92,195.87 92,453.89
100,687.52 92,994.42 95,895.48 93,523.04 96,408.49 94,054.59 94,317.81 97,179.77 94,853.74 97,699.86 95,392.62 95,659.59
103,591.09 96,217.21 99,023.05 96,763.61 99,553.30 97,313.03 97,585.37
100,350.78 98,139.32
# ll560443_v9
Payment Date
December 1, 2028 January 1, 2029
February 1, 2029 March 1, 2029 April!, 2029 May 1, 2029 June 1, 2029 July 1, 2029
August 1, 2029 September 1, 2029
October 1, 2029 November 1, 2029 December 1, 2029
January 1, 2030 February 1, 2030
March 1, 2030 April I, 2030 May I, 2030 June 1, 2030 July 1, 2030
August 1, 2030 September I, 2030
October I, 2030 November 1, 2030 December I, 2030
January I, 2031 February 1, 2031
March I, 2031 April!, 2031 May 1, 2031 June 1, 2031 July 1, 2031
August 1, 2031 September 1, 2031
October 1, 2031 November 1, 2031 December I, 2031
January I, 2032 February I, 2032
March I, 2032 April!, 2032 May 1, 2032 June 1, 2032 July 1, 2032
August 1, 2032 September 1, 2032
October 1, 2032 November 1, 2032 December 1, 2032 January 1, 2033
February 1, 2033 March 1, 2033 April 1, 2033
C-4
Principal Amount
100,888.35 98,696.32 98,972.53
106,591.80 99,547.83
102,255.24 100,112.59 102,803.32 100,680.48 100,962.24 103,627.86 101,534.81 104,183.51 102,110.54 102,396.30 109,692.90 102,989.86 105,595.56 103,573.61 106,162.06 104,160.58 104,452.08 107,014.58 105,043.89 107,588.90 105,638.97 105,934.61 112,897.74 106,547.04 109,047.63 107,150.41 109,633.17 107,757.10 108,058.67 110,514.59 108,670.37 111,108.22 109,285.45 109,591.29 116,209.79 110,223.22 112,615.18 110,846.86 113,220.39 111,473.94 111,785.91 114,131.69 112,418.17 114,745.26 113,053.91 113,370.30 119,632.64 114,022.39
#11560443_v9
Payment Date
May I, 2033 June I, 2033 July I, 2033
August I, 2033 September I, 2033
October I, 2033 November I, 2033 December I, 2033 January I, 2034
February I, 2034 March I, 2034 April 1, 2034 May I, 2034 June I, 2034 July I, 2034
August I, 2034 September I, 2034
October I, 2034 November I, 2034 December I, 2034 January I, 2035 February I, 2035
March I, 203 5 April!, 2035 May I, 2035 June I, 2035 July I, 2035
August I, 2035 September I, 2035
October I, 2035 November I, 2035 December I, 2035 January I, 2036
February I, 2036 March I, 2036 April!, 2036 May I, 2036 June I, 2036 July I, 2036
August I, 2036 September I, 2036
October I, 2036 November I, 2036 December I, 2036
January I, 2037 February I, 2037
March I, 203 7 April!, 2037 May I, 2037 June I, 2037 July I, 2037
August I, 2037 September I, 2037
C-5
Principal Amount
116,302.08 114,666.97 116,927.62 115,315.12 115,637.84 117,869.80 116,291.34 118,503.99 116,948.44 117,275.73 123,169.99 117,948.64 120,112.32 118,614.88 120,758.87 119,284.80 119,618.63 121,732.96 120,294.08 122,388.45 120,973.25 121,311.81 126,825.69 122,006.25 124,050.03 122,694.87 124,718.29 123,387.28 123,732.59 125,725.36 124,430.73 126,402.86 125,132.71 125,482.91 130,603.68 126,199.60 128,119.46 126,911.34 128,810.17 127,627.00 127,984.18 129,851.31 128,705.76 130,551.57 129,431.32 129,793.55 134,508.05 130,533.23 132,325.03 131,268.87 133,038.93 132,008.56 132,378.00
1111560443 v9
Payment Date
October I, 2037 November I, 2037 December I, 2037 January I, 2038
February I, 2038 March I, 203 8 April!, 2038 May I, 2038 June I, 2038 July I, 2038
August I, 2038 September I, 2038
October I, 2038 November I, 2038 December I, 2038 January I, 2039
February I, 2039 March I, 2039 April!, 2039 May I, 2039 June I, 2039 July I, 2039
August I, 2039 September I, 2039
October I, 2039 November I, 2039 December I, 2039
January I, 2040 February I, 2040
March I, 2040 April!, 2040 May I, 2040 June I, 2040 July I, 2040
August I, 2040 September I, 2040
October I, 2040 November I, 2040 December I, 2040
January I, 2041 February I, 2041 March I, 2041 April I, 2041 May I, 2041 June I, 2041 July I, 2041
August I, 2041 September I, 2041
October I, 2041 November I, 2041 December I, 2041 January I, 2042
February I, 2042
C-6
Principal Amount
134,115.30 133,123.81 134,839.07 133,873.74 134,248.40 138,543.05 135,011.84 136,671.30 135,772.17 137,409.17 136,536.70 136,918.81 138,521.93 137,689.66 139,270.00 138,464.77 138,852.28 142,713.03 139,640.27 141,162.96 140,426.13 141,925.60 141,216.32 141,611.53 143,075.97 142,408.26 143,849.16 143,209.38 143,610.17 147,022.50 144,423.54 145,804.89 145,235.77 146,593.12 146,052.49 146,461.23 147,782.37 147,284.71 148,581.51 148,112.72 148,527.23 151,476.15 149,366.82 150,602.10 150,206.32 151,416.79 151,050.45 151,473.18 152,646.21 152,324.29 153,472.17 153,180.09 153,608.79
•
#ll560443_v9
Payment Date
March l, 2042 April!, 2042 May I, 2042 June I, 2042 July I, 2042
August I, 2042 September I, 2042
October I, 2042 . November I, 2042 December 20, 2042
C-7
Principal Amount
156,078.79 154,475.48 155,559.80 155,343.15 156,401.83 156,215.60 156,652.79 157,672.77 157,532.46
6,126.783.22 $40,000,000.00
EXHIBITD
INSURANCE REQUIREMENTS
Prior to the Closing Date, the Corporation must show evidence that the following insurance is in place.
I. PROPERTY INSURANCE
A. DURING CONSTRUCTION
#11560443_v9
An ORIGINAL (or certified copy) Builder's All-Risk, Completed Value, NonReporting Form Policy or ORIGINAL Acord 28 (2003/10) form of Certificate of Insurance naming the borrowing entity as an insured, reflecting coverage of 100% of the replacement cost, and written by a carrier approved by Lender with a current Best's Insurance Guide Rating of at least A- IX (which is authorized to do business in the state in which the property is located) that includes:
1. Clause naming Boston Private Bank & Trust Company as Loss Payee with a 30-day notice to Lender in the event of cancellation, non-renewal or material change
2. Lender's Loss Payable Endorsement (ISO 1218) with a Severability of Interest Clause with a 30-day notice to Lender in the event of cancellation, non-renewal or material change ·
3. Replacement Cost Endorsement
4. No Exclusion for Acts of Terrorism
5. No Coinsurance Clause
6. Flood Insurance
7. Vandalism and Malicious Mischief Coverage
8. Boiler and Machinery Coverage
9. Demolition, Increased Cost of Construction Coverage
10. In-Transit Coverage
11. Partial Occupancy Permitted
12. Borrower's coverage is primary and non-contributory with any insurance or self-insurance carried by Boston Private Bank & Trust Company
D-1 ·
13. Waiver of Subrogation against any party whose interests are covered in the policy.
14. Coverage to become effective upon the date of the Notice to Proceed, the date of site mobilization or the start of any shipment of materials, machinery or equipment to the site, whichever is earlier, and to remain in effect until replaced by permanent All Risk Property Insurance described below, or until such other time as may be mutually agreed upon by Lender and Borrower
B. UPON COMPLETION
#ll560443_v9
An ORIGINAL (or certified copy) All-Risk Hazard Insurance Policy or ORIGINAL Acord 28 (2003/10) form of Certificate of Insurance naming the borrowing entity as an insured, reflecting coverage of 100% of the replacement cost, and written by a carrier approved by Lender with a current Best's Insurance Guide Rating of at least A- IX (which is authorized to do business in the state in which the property is located) that includes:
1. Certificate naming Boston Private Bank & Trust Company as Certificate Holder with a 30-day notice to Certificate Holder in the event of cancellation, non-renewal or material change
2. Replacement Cost Endorsement.
3. No Exclusion for Acts of Terrorism.
4. No Coinsurance Clause
5. Boiler and Machinery Coverage.
6. Sprinkler Leakage Coverage.
7. Vandalism and Malicious Mischief Coverage.
8. Flood Insurance.
9. Loss of Rents Insurance in an amount of not less than 100% of one year's Rental Value of the Project, if applicable to the Project. "Rental Value" shall include the fair rental value of any portion of the Project which is occupied by Borrower.
10. One year's business interruption insurance in an amount acceptable to Lender
11. Extra Expense Coverage.
D-2
12. Borrower's coverage is primary and con-contributory with any insurance or self-insurance carried by Boston Private Bank & Trust Company.
13. Waiver of Subrogation against any party whose interest are covered in the policy.
II. LIABILITY INSURANCE
An ORIGINAL Acord 25-S Certificate of General Comprehensive Liability Insurance naming the borrowing entity as an insured, providing coverage on an "occurrence" rather · than a "claims made" basis and written by a carrier approved by Lender with a current A.M. Best's Insurance Guide Rating of at least A- IX (which is authorized to do business in the state in which the property is located) that affirmatively includes the following:
1. Combined general liability policy limit of at least $2,000,000.00 each occurrence/$5,000,000 in the aggregate, applying liability for Bodily Injury, Personal Injury, Property Damage, Contractual, Products and Completed Operations which combined limit may be satisfied by the limit afforded under the Commercial General Liability Policy, or by such Policy in combination with the limits afforded by an Umbrella or Excess Liability Policy (or policies); provided the coverage afforded under any such Umbrella or Excess Liability Policy is at least as broad in all material respects as that afforded by the underlying Commercial General Liability Policy.
2. No Exclusion for Acts of Terrorism
3. Aggregate limit to apply per location
4. Borrower's coverage is primary and non-contributory with any insurance or selfinsurance carried by Boston Private Bank & Trust Company.
5. Waiver of Subrogation against any party whose interests are covered in the policy.
6. Additional Insured Endorsement naming Boston Private Bank & Trust Company as an additional insured with a 30-day notice to Lender in the event of cancellation, nonrenewal or material change. A Severability of Interests provision should be included.
D-3 #11560443_v9
•
EXIDBITE
CAMPAIGN FUNDS CONTRIBUTION SCHEDULE
E-1 #11560443_v9
CUmulative % 0%
100%
Project % Nueva Disbursements Minimum
12,169,286 30%
16,252.,~18 40%
1 &~~1.;2,$38 50"/Q
QO%.
10%
$Nueva Min Sasedon%
3,650,786
6,501,087
?...45fi.4::!.9
Nueva Projected Funding
Outilne of Disbursements ($40 million bond}
December 6, 2012
Nueva 12/6/12
Nueva update J.2/l5/12
7/i%
24%
Nueva Minimum
8,000,000 ~
10.000.000 I 12,0QO,OOO ....
63%
37%
Nueva A;t~l
8~066,4~9
~,252,718
11~tF12:838'·:·,:
$8,155,848 I $1D,D59,182 $6.853,656 $4,914,528 $861,000 I $73,333,zss
61%
3!!%
Nueva Cumulative
Actual
68% P!'%
32:~ 31%
64% 59% 55% 55%
36% 41% 45% 45%
JljlueviJ Funding Targ_ets
first six months (4!1/13 ~ 9!30/13} of construction: Greater of 30% of requisitions or $8 million
~.066.41~ l¢umulativ~
!~nd six months {1011113. ~ 3131114) of construction: Gr"eater of 4G% of requisitions or $10 million
10,319,137[~,~,~-~~, •.. ·•·•·.·•·· .~ c•oo=•••• - ·-·-·="""""""~""""""
55% . ~ ·-.
45%
Final six m~:mth$ (411/14 ~ 9./~Q/14} of coll$tructi0n: (;reater of 50% of requi~ons Of 1 OO% once all ~ond ~Z31,S7S JPrJ;X;:.~ utUizet,!
.. . . ~nfidential Page 1
Nueva Projected Funding
Outline of Disbu_rsements {$40 million bond) December 6, 2012
32,054,1011 34,036,703
10,144,603[ 1,982,602
Nueva 12/6/12 Nueva update 12/15/12
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#11859968_v8
SECURITY AGREEMENT - ALL ASSETS
Dated as of December 1 '1, 2012
by and between
THE NUEVA SCHOOL
and
BOSTON PRIVATE BANK & TRUST COMPANY
Re1atingto Up to $40,000,000
CALIFORNIA MUNICIPAL FINANCE AUTHORITY REVENUE BOND
(THE NUEVA SCHOOL PROJECT), SERIES 2012A
EXECUTION
SECURITY AGREEMENT - ALL ASSETS
This SECURITY AGREEMENT- ALL ASSETS (this "Agreement") is made as of this 1'1 day of December, 2012, by and between THE NUEVA SCHOOL, a California nonprofit corporation (the "Corporation") and BOSTON PRIVATE BANK & TRUST COMPANY, a Massachusetts trust company (the "Purchaser").
Preliminary Statements:
A. Pursuant to the terms set forth in that certain Bond and Loan Agreement dated as of December 1, 2012 among the California Municipal Finance Authority (the "Issuer"), the Purchaser and the Corporation (as the same may be amended, modified, supplemented, extended or restated, the "Bond and Loan Agreement"), the Purchaser has agreed to purchase the Issuer's Revenue Bonds (The Nueva School Project), Series 2012A in the principal amount of up to Forty Million Dollars ($40,000,000) (the "Bond"), and the Issuer has agreed to Bond the proceeds ofthe Bond to the Corporation. All capitalized terms used herein and not otherwise defined shall have the same meanings as set forth in the Bond and Loan Agreement.
B. This Agreement is one of several "Corooration Documents," as that term is defined in the Bond and Loan Agreement.
C. To induce the Purchaser to purchase the Bond and to enter into the Bond and Loan Agreement, the Corporation has agreed to execute and deliver this Agreement.
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Corporation hereby agrees with the Purchaser as follows:
SECTION 1. DEFINITIONS: USE OF TERMS.
1.1. Definitions. As used in this Agreement, the following terms shall have the meanings given to such terms in the Uniform Commercial Code in effect in the State of California on the date hereof: "Commercial Tort Claims," "Deposit Accounts," ''Documents," "Farm Products," "Fixtures,'' "Goods," "Health-Care-Insurance Receivables," "Instruments,'' "Payrrient Intangible," "Software," "State" and "Supporting Obligations." The following terms shall have the meanings given to such terms as set forth below:
"Accounts": all "accounts" as that term is defined in the UCC, and to the extent not included in such definition, shall also mean and include any right to payment of a monetary obligation, whether or not earned by performance, (a) for property that has been or is to be sold, leased, licensed, assigned, or otherwise disposed of, (b) for services rendered or to be rendered, (c) for a policy of insurance issued or to be issued, (d) for a secondary obligation incurred or to be incurred, (e) for energy provided or to be provided, (t) for the use or hire of a vessel under a charter or other contract, (g) arising out of the use of a credit or charge card or information contained on or for use with the card, (h) as winnings in a lottery or other game of chance operated or sponsored by a State, governmental unit of a State, or person licensed or authorized to operate the game by a State or governmental unit of a State, (i) all Health-Care Insurance Receivables and other accounts receivable, and (j) all debts, and other forms of obligations or indebtedness whether now owned or hereafter acquired), including without limitation all revenue from tuition payments owed to the Corporation, but excluding accounts holding endowment and restricted funds.
#ll859968_v8
"Chattel Paper": all "chattel paper" as that tenn is defined in the UCC, and to the extent not included in such definition, shall also mean and include any record that evidences both a monetary obligation and a security interest in specific Goods, any security interest in specific Goods and Software used in the Goods, any security interest in specific Goods and license of Software used in the Goods, any lease of specific Goods, or any lease of specific Goods and license of Software used in the Goods (including without limitation, all electronic chattel paper (as defined in the UCC) and all tangible chattel paper (as defined in the UCC)).
"Contract": with respect to an Account, any agreement relating to the tenns of payment or the terms of performance thereof, including, without limitation, (a) all rights of the Corporation to receive moneys due and to become due to it thereunder or in connection therewith, (b) all rights of the Corporation to damages arising out of, or for, breach or default in respect thereof and (c) all rights of the Corporation to perfonn and to exercise all remedies thereunder. "Contract" shall not include any agreement granting rights in which the Corporation is prohibited by law from granting a security interest.
"Copyright Licenses": any written agreement naming the Corporation as licensor or licensee, granting any right under any Copyright (including, without limitation, the grant of rights to manufacture, distribute, exploit and sell materials derived from any Copyright).
"Copyrights": (a) all copyrights arising under the laws of the United States, any other country or any political subdivision thereof whether registered or unregistered and whether published or unpublished, all registrations and recordings thereof, and all application sin connection therewith, including, without limitation, all registrations, recordings and applications in the Copyright Office, and (ii) the right to obtain all renewals thereof.
"Copyright Office": the United States Copyright Office or any other federal governmental agency which may hereafter perform its functions.
"Equipment": all "equipment" as that term is defined in the UCC, and to the extent not included in such definition, shall also mean and include all machinery, furniture and motor vehicles.
"Equitv Interests": any or all of the following owned by the Corporation: (a) any shares or other equivalents (however designated) of capital stock of any corporation; (b) any membership or equity interests of any limited liability company; (c) any partnership or equity interests of any general partnership, limited partnership or limited liability partnership; (d) any equity interests of any Person (other than those entities described in clauses (a) through (c) above); and (e) any and all warrants or options to purchase any ofthe foregoing.
"General Intangibles": all "general intangibles" as that term is defined in the UCC, and to the extent not included in such definition, shall also mean and include any Payment Intangibles, Software or rights to know-how, any trade secrets, product or service development ideas and designs, advertising commercials, renderings, strategies and plans, blueprints, architectural drawings, site location, and personnel information.
"Governmental Authoritv": any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.
2
#11859968_v8
:or id or
:o the
less Jther .g ~ly
the
>nor ile ect 'onn
1edy.
1ed to be
All
and l :, all
ng ions 'the
(d) all Fixtures;
(e) all Contracts;
(t) all Chattel Paper;
(g) all Documents;
(h) all Instruments;
(i) all Investment Property;
(j) all Supporting Obligations;
(k) all Commercial Tort Claims;
(I) all Deposit Accounts;
(m) all General Intangibles;
(n) all Intellectual Property; and
(o) all otber items of tangible and intangible personal property of any and every kind and description which are not otherwise described herein.
The Pledged Property does not, however, include (i) Accounts holding endowment or restricted funds, or (ii) the real properties commonly known as 1432 Balboa Avenue, Burlingame, CA or 512 Princeton Street, San Mateo, CA, or (iii) accounts holding up to an aggregate of One Million Dollars ($1 ,000,000) held at institutions other than at Purchaser, whether currently existing or established in the future (hereinafter, the "Excluded Deposit Accounts") provided however that the Corporation agrees to maintain the Excluded Deposit Accounts unencumbered and agrees not to grant any security interest in the Excluded Deposit Accounts while this Agreement remains in full force and effect, or (iv) any property against which a security interest has been evidenced by the UCC-1 financing statements on file with the California Secretary of State's office under filing nos. I 0-7239699329, 11-7279871144, 11-7285938670 and 12-7318708744.
SECTION 3. GENERAL REPRESENTATIONS AND WARRANTIES.
The Corporation hereby represents and warrants as follows:
3.1. Power and Authoritv. The Corporation has the power and authority and tbe legal right to execute and deliver, to perform its obligations under, and to grant the Lien on the Pledged Property pursuant to this Agreement and has taken all necessary actions to authorize its execution, delivery and performance of, and grant of the Lien on the Pledged Property pursuant to, this Agreement.
3.2. Master Disclosure Schedule. All of the information contained in the Master Disclosure Schedule attached hereto is tme, correct and complete.
3.3. Name: Chief Executive Office.
(a) The name of the Corporation set forth in the first paragraph of this Agreement is the true, correct and complete legal name of the Corporation, and the Corporation has not done
5 #11859968_v8
any
lt ty for
•t 'and .and
1tual Jed
·the
ance, 1e or of
~ed
business under, or used, any other name, except as otherwise described in Section 1.2 of the Master Disclosure Schedule attached hereto.
(b) The chief executive office and principal place of business of the Corporation is located at the address listed in Section 2.1 of the Master Disclosure Schedule attached hereto.
(c) Except for (i) the Lien granted to the Purchaser pursuant to this Agreement and (ii) the Permitted Liens, the Corporation owns each item of the Pledged Property free and clear of any and all Liens or claims of others. No security agreement, financing statement or other public notice with respect to all or any part of the Pledged Property is on file or of record in any public office, except such as may have been filed in favor of the Purchaser pursuant to this Agreement or as may be permitted pursuant to the Bond and Loan Agreement. Upon the completion of filing of financing statements at the California Secretary of State and with the San Mateo County Recorder's office, the Liens granted by the Corporation pursuant to this Agreement will constitute perfected Liens on the Pledged Property in which a security interest may be perfected by the filing of financing statements pursuant to Article 9 of the Uniform Commercial Code as in effect in the relevant jurisdiction in favor of the Purchaser, which are prior to all other Liens on such Pledged Property created by the Corporation and in existence on the date hereof (except the Permitted Liens)and which are enforceable as such against all creditors of and purchasers from the Corporation, except as enforceability is affected by bankruptcy, insolvency, fraudulent conveyl!llce, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether involved in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing.
3.4. Accounts. No amount payable to the Corporation under or in connection with any Account, Contract or License is evidenced by any Instmment or Chattel Paper which has not been delivered to the Purchaser. The amount represented by such Corporation to the Purchaser from time to time as owing by the account debtor or by all account debtors in respect of the Accounts of such Corporation will at such time be the correct amount actually owing by such account debtor or debtors thereunder in all material respects, subject to adjustments in the ordinary course of business.
3.5. Pledged Notes; Equipment. Set forth in Section 3 of the Master Disclosure Schedule attached hereto is a true, correct and complete list of all Pledged Notes for which certificates of title have been issued to the Corporation under applicable law. Set forth in Section 7 of the Master Disclosure Schedule attached hereto is a true, correct and complete list of all Equipment for which certificates of title have been issued to the Corporation under applicable law.
3.6. Farm Products. None of the Pledged Property constitutes, or is the Proceeds of, Farm Products.
3.7. InvestmentPropertv.
(a) To the best knowledge of the Corporation, each of the Pledged Notes pledged by the Corporation hereunder constitutes a valid and legally enforceable obligation of the other obligor in respect thereof or parties thereto, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization. moratorium or similar laws affecting the enforcement of creditors' rights generally.
(b) The Corporation is the record and beneficial owner of, and has good and marketable title to, the Investment Property pledged by it hereunder, free of any and all Liens or
6 #11859968_v8
options in favor of, or claims of, any other Person, except for the Lien created by this Agreement and Permitted Liens.
3.8. Intellectual Propertv.
(a) Set forth in Section 4 of the Master Disclosure Schedule attached hereto is a true, correct and complete list of all registered Copyrights and Copyright Licenses owned by the Corporation in its own name as of the date hereof. Set forth in Section 5 of the Master Disclosure Schedule attached hereto is a true, correct and complete list of all Patents and Patent Licenses owned by the Corporation in its own name as of the date hereof. Set forth in Section 6 of the Master Disclosure Schedule attached hereto is a true, correct and complete list of all registered Trademarks and Trademark Licenses owned by the Corporation in its own name as of the date hereof. Except as set forth in the Master Disclosure Schedule attached hereto, none of the Intellectual Property is the subject of any licensing or franchise agreement pursuant to which the Corporation is the licensor or franchisor.
(b) The Corporation owns, or is licensed to use, all Intellectual Property necessary for the conduct of its business as currently conducted. To the Corporation's knowledge, no material claim has been asserted and is pending by any Person challenging or questioning the use by the Corporation of any of its Intellectual Property or the validity or effectiveness of any of its Intellectual Property, nor does the Corporation know of any valid basis for any such claim. To the Corporation's knowledge, the use by the Corporation of the Intellectual Property does not infringe the rights of any Person in any material respect. No holding, decision or judgment has been rendered by any Governmental Authority which would limit, cancel or question the validity of, or the Corporation's rights in, any Intellectual Property in any respect that could reasonably be expected to have a Material Adverse Effect.
SECTION 4. GENERAL COVENANTS.
The Corporation hereby covenants and agrees as follows:
4.1. Changes in Name and Locations. The Corporation will not (a) change its name, identity, organizational structure, jurisdiction of organization, chief executive office or place where its business records are kept, or (b) merge into or consolidate with any other entity, unless in each case it shall have given the Purchaser at least thirty (3 0) days prior written notice thereof and all filings and other actions to maintain the perfection of the security interest granted hereby shall have been made.
4.2. Maintenance of Records. The Corporation will keep and maintain at its own cost and expense satisfactory and complete records of the Pledged Property, including, without limitation, a record of all payments received and all credits granted with respect to the Accounts, Contracts and Licenses. The Corporation will, upon request of the Purchaser, mark its books and records pertaining to the Pledged Property to evidence this Agreement and the security interests granted hereby.
4.3. Intentionally Omitted.
4.4. Payment of Taxes and Other Amounts. The Corporation will pay promptly when due all taxes, assessments and governmental charges or levies imposed upon the Pledged Property or in respect of its income or profits therefrom, as well as all claims of any kind (including, without limitation, claims for labor, materials and supplies) against or with respect to the Pledged Property which have a reasonable likelihood of adverse determination, except that no such charge need be paid if (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) such proceedings do not involve
7 #11859968_v8
any material danger of the sale, forfeiture or loss of any material portion of the Pledged Property or any interest therein and (c) such charge is adequately reserved against on such Corporation's books in accordance with GAAP or if the failure to pay such charge would not have a Material Adverse Effect.
4.5. Maintenance and Use of Pledged Propertv. The Corporation will safeguard, protect and preserve the Pledged Property for the benefit of the Purchaser, will keep the Pledged Property free from any Lien (other than the Permitted Liens and Liens created hereunder), will keep all tangible property constituting part of the Pledged Property in good working order and repair, normal wear and tear excepted, will preserve all beneficial contract rights, will take commercially reasonable steps to collect all Accounts, and will not waste or destroy the Pledged Property or any part thereof; and the Corporation will otherwise preserve, maintain and protect its rights and keep the Pledged Property in good repair, working order and condition, normal wear and tear excepted, and capable of identification, and make (or cause to be made) all needed and proper repairs or renewals, additions and improvements thereto and replacements thereof, and shall use its assets only in the ordinary course of business and in compliance with all applicable law.
4.6. Notices and Reports Pertaining to Pledged Propertv. The Corporation will (a) promptly notifY the Purchaser of any Lien (except for Liens in favor of the Purchaser and Permitted Liens) asserted against the Pledged Property and of any information received by such Corporation relating to the Pledged Property (including the Accounts, the account debtors or other persons obligated in connection therewith) that may in any way materially adversely affect the value of the Pledged Property or the rights and remedies of the Purchaser with respect thereto; (b) promptly notifY the Purchaser when it obtains knowledge of actual or threatened bankruptcy or other insolvency proceeding of any material account debtor or issuer of Investment Property; (c) deliver to the Purchaser, as the Purchaser may from time to time request, delivery receipts, customers' purchase orders, shipping instructions, bills oflading and any other evidence of shipping arrangements; (d) notifY the Purchaser of any return or adjustment, rejection, repossession, or loss or damage of or to merchandise represented by Accounts or constituting Inventory if material in amount and of any credit, adjustment or dispute arising in connection with the goods or services represented by Accounts or constituting Inventory if material in amount; and (e) notifY the Purchaser of the occurrence of any other event which could reasonably be expected to have a Material Adverse Effect on the aggregate value of the Pledged Property or, with respect to any material portion of the Pledged Property, on the Liens created hereunder except for Permitted Liens.
The Corporation authorizes the Purchaser to destroy all invoices, delivery receipts, reports and other types of documents (other than documents constituting Pledged Property) and records submitted to the Purchaser in connection with the transactions contemplated herein at any time subsequent to twelve (12) months from the time such items are delivered to the Purchaser.
4. 7. Liens on Pledged Property. The Corporation will defend the Pledged Property against, and will take such other action as is necessary to remove, any Lien or claim on or to the Pledged Property, other than the Liens created hereby and the Permitted Liens, and will defend the right, title and interest of the Purchaser in and to any of the Pledged Property against the claims and demands of all Persons whomsoever other than holders of Permitted Liens.
4.8. Intentionally Omitted.
4.9. Maintenance of Perfected Liens; Further Documentation. At any time and from time to time, upon the written request of the Purchaser, and at the sole expense of the Corporation, the Corporation will promptly and duly execute and deliver such further instruments and documents and take such further action as the Purchaser may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted (including, without limitation,
8
#11859968_v8
(a) filing any financing or continuation statements under the Uniform Commercial Code in effect in any jurisdiction with respect to the Liens created hereby; (b) obtaining governmental and other third party consents and approvals, including without limitation any consent of any licensor or lessor; (c) obtaining waivers from mortgagees and landlords; (d) in the case oflntellectual Property, executing and filing with the PTO, the Copyright Office or any similar office or agency in any other country or any political subdivision thereof, such short forms of Security Agreements, in form and substance satisfactory to the Purchaser, as the Purchaser may request; and (e) in the case oflnvestment Property, and any other relevant Pledged Property, taking action necessary to enable the Purchaser to obtain "control" (within the meaning of the applicable Uniform Commercial Code) with respect thereto). The Corporation also hereby authorizes the Purchaser to file (after written notice to the Corporation) any such financing or continuation statement without the consent of the Corporation to the extent permitted by applicable law, provided, however, that any failure to give any such notice shall not affect the validity or effectiveness of any such filing. A carbon, photographic or other reproduction of this Agreement shall be sufficient as a financing statement for filing in any jurisdiction.
4.1 0. Costs and Expenses. Except as otherwise provided in the Bond and Loan Agreement, the Corporation agrees to pay (a) the reasonable costs of producing and reproducing this Agreement, the other Corporation Documents and the other agreements and instruments mentioned herein, (b) any taxes (including any interest and penalties in respect thereto) incurred by the Corporation and payable by the Purchaser (other than taxes based upon the Purchaser's net income) on or with respect to the transactions contemplated by this Agreement (the Corporation hereby agreeing to indemnify the Purchaser with respect thereto), (c) the reasonable fees, expenses and disbursements of counsel to the Purchaser incurred in connection with the preparation, administration or interpretation of the Corporation Documents and other instruments mentioned herein, and amendments, modifications, approvals, consents or waivers hereto or hereunder, (d) the reasonable fees, expenses and disbursements of the Purchaser incurred by the Purchaser in connection with the preparation, administration or interpretation of the Corporation Documents and other instruments mentioned herein, (e) all reasonable out-of-pocket expenses (including without limitation reasonable attorneys' fees and costs, which attorneys may be employees of the Purchaser, and reasonable consulting, accounting, appraisal, investment banking and similar professional fees and charges) incurred by the Purchaser in connection with {i) the enforcement of or preservation of· rights under any of the Corporation Documents against the Corporation or the administration thereof after the occurrence of an Event of Default (including engineering, appraiser and investment banking charges) and (ii) any litigation, proceeding or dispute whether arising hereunder or otherwise, in any way related to the Purchaser's relationship with the Corporation unless resulting from the Purchaser's own bad acts, gross negligence or willful misconduct and (1) all reasonable fees, expenses and disbursements of the Purchaser incurred in connection with UCC searches, UCC filings or mortgage recordings. The covenants contained in this subsection shall survive payment or satisfaction in full of all Obligations.
SECTION 5. SPECIFIC COVENANTS REGARDING CERTAIN PLEDGED PROPERTY.
The Corporation hereby covenants and agrees as follows:
5.1. Accounts.
5.1.1 Collections on Accounts and Proceeds. The Corporation shall enforce, compromise and collect amounts owing on its Accounts; provided, however, the right of the Corporation hereunder to enforce, compromise and collect amounts owing on such Accounts may at the option of the Purchaser be terminated upon the occurrence and during the continuance of any Event of Default. Following the occurrence and during the continuance of an Event of Default, if any Accounts of the Corporation are at any time evidenced by promissory notes, trade acceptances or other Instruments for the payment of money, the Corporation will promptly
9
#11859968_v8
deliver the same to the Purchaser appropriately endorsed to the Purchaser's order and, regardless of dishonor, protest, notice of protest and all other notices with respect thereto.
After an Event of Default has occurred and is continuing and the Corporation has received notice thereof from the Purchaser, any Proceeds collected by the Corporation (whether consisting of checks, notes, drafts, bills of exchange, money orders, commercial paper of any kind whatsoever, or other documents, received in payment of any Account or in payment for any Inventory or otherwise), shall be promptly turned over by the Corporation to the Purchaser, in precisely the form received, except for its endorsement when required, and until so turned over, shall be deemed to be held in trust by the Corporation for and as the Purchaser's property, and shall be held separately from the Corporation's other funds.
5 .1.2 Limitations on Discounts and Compromises of Accounts. Other than in the ordinary course of business as generally conducted by the Corporation over a period of time, the Corporation will not compromise, compound or settle the Accounts for less than the full amount thereof, or release, wholly or partially, any Person liable for the payment thereof, except in the case as permitted under the Bond and Loan Agreement and other Corporation Documents.
5 .1.3 Notice to Account Debtors. At any time after the occurrence and during the continuance of an Event of Default, the Corporation shall, at the request of the Purchaser, notifY its account debtors, and the Purchaser itself may notifY such account debtors directly, of the security interest of the Purchaser in any Account and that payment thereof is to be made directly to the Purchaser. At any time after the occurrence and during the continuance of an Event of Default, the Purchaser may communicate with account debtors to verity with them to its satisfaction the existence, amount and terms of any Accounts.
5 .1.4 Information on Accounts. The Corporation shall furnish to the Purchaser from time to time, and upon request, a list and description of all Accounts created or acquired by the Corporation, together with copies of shipping or delivery receipts for all goods and services sold or otherwise provided, and any other information or documents which the Purchaser reasonably may request from to time related to the Corporation's Accounts.
5.2. Inventorv.
5 .2.1 Pricing. Credit Terms and Accounts. So long as no Event of Default has occurred and is continuing, the Corporation may sell items oflnventory: (a) for cash in amounts not less than the Corporation's published, usual or customary prices, less only usual and customary discounts for volume sales or prompt payment; or (b) on credit terms usual and customary in the business conducted by the Corporation, at prices which conform to the above terms, and under such circumstances as give rise toAccounts subject to this Agreement.
5.2.2 Notice to Landlords. Warehousemen and Agents. If any Inventory is in the possession or control of any landlords, warehousemen or agents, the Corporation shall notifY them of the Purchaser's security interest therein, and upon the occurrence and during the continuance of any Event of Default, and at the Purchaser's request, instruct them to hold the same for the Purchaser's account and subject to the Purchaser's instructions. The Purchaser shall enjoy all of the rights and remedies of a secured party in the Inventory and shall be subrogated to all guaranties and security now or which may in the future be held by the Corporation. The Purchaser shall not be liable in any manner for exercising or refusing or failing to exercise any such rights.
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5.3. Contracts with Governmental Authorities. The Corporation shall, to the extent practicable, provide reasonable advance notice to the Purchaser (i) prior to or, if such advance notice is not practicable, shall provide notice to the Purchaser promptly after, entering into a Contract with a Governmental Authority and (ii) prior to or, if such advance notice is not practicable, shall provide notice to the Purchaser promptly after, the sale of goods to a Governmental Authority resulting in the creation of an Account if such contract or Account, in the aggregate together with all such contracts then in effect (including any such contract entered into prior to the Closing Date) and/or Accounts then outstanding (including any such Accounts arising prior to the Closing Date), but without duplication, exceed Five and 00/100 Percent (5.00%) of net sales of the Corporation for the most recently completed fiscal year, and shall, at the request of the Purchaser, provide any notices and make any filings required under the Federal Assignment of Claims Act in order to grant, maintain and/or perfect the security interest of all such contracts and Accounts granted pursuant to this Agreement.
5.4. Chattel Paper. Unless an Event of Default shall have occurred and be continuing, the · Corporation shall be entitled to retain possession of all Pledged Property consisting of Chattel Paper, and
shall hold all such Chattel Paper in trust for the Purchaser. If an Event of Default shall have occurred and be continuing, upon the request of the Purchaser, such Chattel Paper shall be immediately delivered to the Purchaser, to be held as Pledged Property pursuant to this Agreement. The Corporation shall not permit any other Person (other than the Corporation) to possess any such Pledged Property at any time.
5.5. Equipment- Certificates of Title. Upon the Purchaser's reasonable request, the Corporation shall deliver to the Purchaser, the originals of all certificates of title pertaining to any Equipment for which such certificates are or should be issued under applicable law, together with a duly completed and executed application to add the Purchaser as a lienholder on such certificate. The Corporation covenants and agrees that it will promptly deliver to the Purchaser all certificates of title relating to any Equipment hereafter acquired, together with duly completed and executed applications to add as the Purchaser as a lienholder therewith (in form and content satisfactory for filing with the appropriate office), and that the Corporation shall not seek to obtain any certificate of title for any Equipment currently lacking such a certificate, and it shall not attempt to re-certify or obtain a new certificate for any Equipment currently evidenced by a certificate of title (whether in the State of California or any other jurisdiction) without first notifying the Purchaser, and, after the occurrence of and during the continuation of an Event of Default, only if the original of such certificate of title is or will be delivered to the Purchaser upon issuance thereof and does or will properly name the Purchaser as first lienholder thereon (subject only to any Permitted Liens), in the case duly perfecting the Purchaser's security interest granted under this Agreement.
5.6. Investment Propertv.
(a) Without the prior written consent of the Purchaser, the Corporation will not create, incur or permit to exist any Lien or option in favor of, or any claim of any Person with respect to, any of the Investment Property or Proceeds thereof, or any interest therein, except for the Lien provided for by this Agreement and Permitted Liens.
(b) Unless an Event of Default shall have occurred and be continuing, the Corporation shall be permitted to receive all payments made in respect of the Pledged Notes, and ·to exercise all voting and corporate rights with respect to the Investment Property; provided, however, that such Corporation agrees that it shall not vote in any way that would be inconsistent with or result in any violation of any provision of the Bond and Loan Agreement or any of the other Corporation Documents.
11
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(c) If an Event of Default shall occur and be continuing, then (i) the Purchaser shall have the right to receive any and all cash dividends, payments or other Proceeds paid in respect of the Investment Property and make application thereof to the Obligations in such order as the Purchaser may determine, and (ii) any or all of the Investment Property may be registered in the name of the Purchaser or its nominee, and, subject to the terms of this Agreement, the Purchaser or its nominee may thereafter exercise (A) all voting, corporate and other rights pertaining to such Investment Property at any meeting of holders of such Investment Property of the relevant Issuer or Issuers or otherwise and (B) any and all rights of conversion, exchange and subscription and any other rights, privileges or options pertaining to.such Investment Property as if it were the absolute owner thereof (including, without limitation, the right to exchange at its discretion any and all of the Investment Property upon the merger, consolidation, reorganization, recapitalization or other fundamental change in the corporate structure of any Issuer, or upon the exercise by the Corporation or the Purchaser of any right, privilege or option pertaining to such Investment Prope'rty, and in connection therewith, the right to deposit and deliver any and all of the Investment Property with any committee, depository, transfer agent, registrar or other designated agency upon such terms and conditions as the Purchaser may determine), all without liability except to account for property actually received by it, and except for its gross negligence or willful misconduct, but the Purchaser shall have no duty to the Corporation to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing.
(d) The rights of the Purchaser hereunder shall not be conditioned or contingent upon the pursuit by the Purchaser of any right or remedy against any other Person which may be or become liable in respect of all or any part of the Obligations or against any Pledged Property security thereof, guarantee therefor or right of offset with respect thereto. The Purchaser shall not be liable for any failure to demand, collect or realize upon all or any part of the Pledged Property or for any delay in doing so, nor shall the Purchaser be under any obligation to sell or otherwise dispose of any Pledged Property upon the request of the Corporation or any other Person or to take any other action whatsoever with regard to the Pledged Property or any part thereof. The Purchaser agrees to release promptly to the Corporation any dividends, cash, securities, instruments and other property paid, payable or otherwise distributed in respect of the Pledged Property which it may receive under subsection 5.6(d) hereof if, prior to the occurrence of an acceleration of any of the Obligations, all Defaults and Events of Default have been waived or are no longer continuing.
5. 7. Patents and Trademarks.
(a) The Corporation (either itself or through licensees) will, except with respect to any Trademark that the Corporation shall reasonably determine is of immaterial economic value to it, (i) continue to use the Trademark on the and every trademark class of goods applicable to its current line as reflected in its current catalogs, brochures and price lists in order to maintain such Trademark in full force free from any claim of abandonment for non-use, (ii) maintain as in the past the quality of products and services offered under such Trademark, (iii) use reasonable efforts to employ such Trademark with the appropriate notice of registration, (iv) not adopt or use any mark which is confusingly similar or a colorable imitation of such Trademark unless within thirty (30) days after such use or adoption, the Purchaser shall obtain a perfected security interest in such mark pursuant to this Agreement and (v) not (and not permit any licensee or sublicensee thereof to) do any act or knowingly omit to do any act whereby any Trademark may become invalidated.
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(b) The Corporation will not, except with respect to any Patent that the Corporation shall reasonably detennine is of immaterial economic value to it, do any act, or omit to do any act, whereby any Patent may become abandoned or dedicated.
(c) The Corporation will notifY the Purchaser promptly if it knows that any material registered application relating to any Patent, or any application or registration relating to any Trademark, may become abandoned or dedicated, or of any adverse determination or material development (including, without limitation, the institution of, or any such determination or development in, any proceeding in tbe PTO or any court or tribunal in any country) regarding such Corporation's ownership of any Patent or Trademark or its right to register the same or to keep and maintain tbe same.
(d) Whenever the Corporation, either by itself or through any agent, employee, licensee or designee, shall file an application for any Patent or for the registration of any Trademark with the PTO or any similar office or agency in any other country or any political subdivision thereof, the Corporation shall report such filing to the Purchaser within five (5) Business Days after the last day of the fiscal quarter in which such filing occurs. Upon request of the Purchaser, the Corporation shall execute and deliver any and all agreements, instruments, documents, and papers as the Purchaser may request to evidence the Purchaser's security interest in any Patent or Trademark and the goodwill and general intangibles ofthe Corporation relating thereto or represented thereby, and the Corporation hereby appoints and constitutes the Purchaser its attorney-in-fact to execute and file all such writings for the foregoing purposes, all acts of such attorney being hereby ratified and continued. Such power being coupled with an interest and is irrevocable until the Obligations are paid in full and the Purchaser has no further obligation to extend any credit cir lend any sums to the Corporation under the Corporation Documents.
(e) In the event that any Patent or material registered Trademark included in the Pledged Property is infringed, misappropriated or diluted by a tbird party in a manner which could reasonably be expected to have a Material Adverse Effect, the Corporation shall promptly notifY the Purchaser after it learns thereof and shall, unless the Corporation shall reasonably · determine that such Patent or Trademark is of immaterial economic value to the Corporation, take such actions as the Corporation shall reasonably deem appropriate under the circumstances to protect such Patent or Trademark (including but not limited to taking action to promptly sue for infringement, misappropriation or dilution, to seek injunctive relief where appropriate and to recover any and all damages for such infringement, misappropriation or dilution).
5.8. Copyrights. The Corporation (a) will employ the Copyright for the material published work with such notice of copyright as may be required by law to secure copyright protection and (b) will not do any act or knowingly omit to do any act whereby any material Copyright may become invalidated · and:
(i) will not do any act, or omit to do any act, whereby any material Copyright may become injected into the public domain;
(ii) shall notifY the Purchaser promptly if it knows, ot• has reason to know, that any material Copyright may become injected into the public domain or of any adverse determination or development (including, without limitation, the institution of, or any such determination or development in, any comt or tribunal in the United States or any other country) regarding such Corporation's ownership of any such Copyright or its validity;
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(iii) will take all necessary steps as it shall deem appropriate under the circumstances in its reasonable discretion, to maintain the application and the registration of the material Copyright owned by the Corporation (including, without limitation, filing of applications for renewal, where necessary); and
(iv) will promptly notify the Purchaser of any material infringement of any material Copyright of the Corporation of which it becomes aware and will take such actions as it shall reasonably deem appropriate under the circumstances to protect such Copyright, including, where appropriate, the bringing of suit for infringement, seeking injunctive relief and seeking to recover any and all damages for such infringement.
Whenever the Corporation, either by itself or through any agent, employee, licensee or designee, shall file an application for any Copyright or for the registration of any Copyright with the Copyright Office or any similar office or agency in any other country or any political subdivision thereof, the Corporation shall report such filing to the Purchaser within five (5) Business Days after the last day of the fiscal quarter in which such filing occurs. Upon request of the Purchaser, the Corporation shall execute and deliver any and all agreements, instruments, documents, and papers as the Purchaser may reasonably request to evidence the Purchaser's security interest in any Copyright, and the Corporation hereby appoints and constitutes the Purchaser its attorney-in-fact to execute and file all such writings for the foregoing purposes, all acts of such attorney being hereby ratified and confirmed. Such power being coupled with an interest and is irrevocable until the Obligations are paid in full and the Purchaser has no further obligation to extend any credit or lend any sums to the Corporation under the Corporation Documents.
SECTION 6. POWER OF A TIORNEY.
6.1. Appointment and Powers. The Corporation hereby irrevocably constitutes and appoints the Purchaser as the Corporation's true and lawful attorney, coupled with an interest, with full power of substitution (in the case at the sole risk, cost and expense of the Corporation but for the benefit of the
· Purchaser) to do the following:
(a) at any time or times (whether or not an Event of Default has occurred), (i) to supplement and amend from time to time Sections 5, 6, and 7 of the Master Disclosure Schedule attached hereto to include any new or additional registered Trademarks, Patents, registered Copyrights and Licenses of the Corporation, (ii) file and record without the Corporation's consent, financing statements and any other instruments, and (iii) to take such other actions as the Purchaser may deem necessary in order to perH:ct or maintain the perfection or priority of the Purchaser's security interest in the Pledged Property or any portion thereof; and
(b) in addition to the actions described above, at any time or times after an Event of Default has occurred and is continuing, (i) to protect the Purchaser's security interest in the Pledged Property or any portion thereof; (ii) to the extent permissible by applicable law, to receive and open the Corporation's mail, remove therefrom and hold or apply any Pledged Property and dispose of such mail or turn over such mail (other than such Pledged Property) to the Corporation or any trustee in bankruptcy, receiver, assignee for benefit of creditors or other legal representatives to whom the Purchaser determines to be the appropriate recipient thereof; (iii) to endorse the name of the Corporation in favor of the Purchaser upon any and all checks, drafts, notes, money orders, acceptances and other items, Instruments and forms of payment, and to sign and endorse the name of the Corporation on, and receive as secured party, any of the Pledged Property; (iv) to sign the Corporation's name to any invoices, schedules, freight or express receipts, bills of lading, and other Documents or writings of a similar or different nature,
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relating to the Pledged Property; (v) to sign the name of the Corporation on any schedules and assignments of Accounts, and on notices of assignment, financing statements and other public records relating to the Pledged Property, and on any notice to the Corporation's account debtors for verification of the Accounts; (vi) to prosecute, defend, compromise or release any action relating to the Pledged Property; (vii) to notifY the post office authorities to change the address for delivery of the Corporation's mail to an address designated by the Purchaser, and to sign change of address forms therefor; (viii)) to sign the Corporation's name in proofs of claim in bankruptcies of account debtors, notices of lien, claims of mechanics liens, or assigmnents or releases of any Liens securing the Accounts; (ix) to take any such actions as may be necessary to obtain payment of any letter of credit of which the Corporation is a beneficiary; (x) to repair, manufacture, assemble, complete, package, deliver, alter or supply goods, if any, necessary to fulfill in whole or in part the purchase order of any customer of the Corporation; (xi) to notifY any Persons of the rights and interests of the Purchaser, of the applicable Events of Default and of any matter relating to Pledged Property; (xii) to take any and all other actions (including, without limitation, the right to sue in the name of the Corporation or the Purchaser to collect upon any and all Pledged Property and to settle, adjust or compromise any and all claims with respect to Pledged Property including insurance claims) as the Purchaser shall deem necessary or expedient to convert the Pledged Property into cash; and (xiii) otherwise to exercise any rights or remedies of the Purchaser hereunder or under any of the Corporation Documents, or otherwise under agreement or applicable law, including the UCC.
6.2. Ratification and Indemnification Under Power of Attorney. In connection with all powers of attorney set forth in this Agreement, the Purchaser shall have full power to exercise such powers as fully and effectually as the Corporation might or could do; the Corporation agrees that the Purchaser shall not be obligated to exercise any of the powers authorized herein, and shall be free to exercise or refrain from exercising any of such powers at any time or times in its absolute discretion, and, if the Purchaser elects to exercise any of such powers, it shall not be accountable for more than it actually receives as a result of such exercise of power, and shall not be responsible to the Corporation except for the Purchaser's gross negligence, actual bad faith or willful misconduct; and all powers conferred upon the Purchaser by this Agreement, being coupled with an interest, shall be irrevocable until such time as all Obligations have been paid (without being subject to or susceptible of recovery by any Person) or performed and the Purchaser's agreement, if any, to make advances has terminated.
6.3. Performance By Purchaser of Corporation's Obligations. If the Corporation fails to perform or comply with any of its agreements contained herein and the Purchaser, as provided for by the terms of this Agreement, shall itself perform or comply, or otherwise cause performance or compliance, with any agreement, the reasonable expense of the Purchaser incurred in connection with such performance or compliance, together with interest thereon at the Late Rate, shall be payable by such Corporation to the Purchaser on demand and shall constitute Obligations secured hereby.
SECTION 7. EVENTS OF DEFAULT.
Upon the occurrence and during the continuance of one or more Events of Default, any and all Obligations shall become, or may be declared to be, immediately due and payable, all as provided in the Bond and Loan Agreement.
SECTION 8. REMEDIES.
8.1. General Remedies. In addition to and without in any way limiting any other rights and remedies available to the Purchaser under this Agreement prior to an Event of Default, or any other rights and remedies available to the Purchaser (whether prior to or after an Event of Default) under any of the
15 #ll859968_v8
other Corporation Documents or under applicable law or in equity, upon and at any time or times after the occurrence and during the continuance of any Event of Default:
8.1.1 the Purchaser may declare and cause all or any portion of the Obligations to be immediately due and payable;
8.1.2 the Purchaser may decline to honor the credit of the Corporation or may refuse to make further advances to the Corporation;
8.1.3 the Purchaser may collect the Accounts with or without taking possession of the Pledged Property;
8.1.4 the Purchaser shall be entitled to immediate possession of the Pledged Property or any portion or portions thereof and may enter upon the Corporation's premises to take possession thereof; may require the Corporation to assemble the Pledged Property and make it available to the Purchaser at a place to be designated by the Purchaser which is reasonably convenient to both parties; or may require the Corporation to deliver all Records relating to the Pledged Property to the Purchaser;
8.1.5 the Purchaser may enter upon, occupy, and use any premises owned or occupied by the Corporation (or by any agent of such Corporation at which Pledged Property is located), and may exclude the Corporation from such premises or portion thereof as may have been so entered upon, occupied, or used by the Purchaser; the Purchaser shall not be required to remove any of the Pledged Property from any such premises upon the Purchaser's taking possession thereof, and may render any Pledged Property unusable to the Corporation; and in no event shall the Purchaser be liable to the Corporation for use or occupancy by the Purchaser of any premises pursuant to this Agreement except for claims arising out of the Purchaser's gross negligence, . actual bad faith or willful misconduct, nor for any charge (such as wages for the Corporation's employees and utilities) incurred in connection with the Purchaser's exercise of the Purchaser's rights and remedies;
8.1.6 the Purchaser may take such steps as it deems necessary to protect the Purchaser's interest in, and to preserve the Pledged Property, and the Corporation agrees to cooperate fully with all of the Purchaser's efforts and to take such actions as the Purchaser shall direct, all to preserve the Pledged Property;
8.1. 7 the Purchaser shall have the rights and remedies of a secured party under the UCC and other applicable laws, the choice and manner of exercise of any right or remedy being in the Purchaser's sole discretion; and, pursuant thereto, the Purchaser shall have the right to foreclose the security interestgranted in any Pledged Property by any-availablejudicial procedure and to take possession of and sell any or all of the Pledged Property with or without judicial process; the Purchaser may lease or otherwise dispose of the Pledged Property, or may sell the Pledged Property, or any part thereof, at public or private sales, at any time or place (including the Corporation's premises), in one or more sales, at such price or prices, and upon such terms, either for cash, credit or future delivery, as the Purchaser may elect, and, except as to that part of the Pledged Property which is perishable or threatens to decline speedily in value, or is of the type customarily sold on a recognized market, the Purchaser shall give the Corporation reasonable notification of such sale or sales, it being agreed that, in all events, reasonable notification means written notice mailed to the Corporation at least ten (1 0) days prior to the such public sale or at least ten (I 0) days prior to the date after which any such private sales or other intended dispositions may be made; at any public sale the Purchaser may (but shall have no obligation to)
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bid for and become the purchaser of any Pledged Property; the Corporation hereby waives any and all rights it may have to judicial hearing in advance of the enforcement of any of the Purchaser's rights hereunder, including the Purchaser's right to take immediate possession of the Pledged Property; and the Purchaser may do any of the foregoing or otherwise deal with the Pledged Property in its then condition, or following such preparation as the Purchaser deems advisable, with or without taking possession thereof;
8.1.8 the Purchaser shall have the right to apply to the Obligations any deposits or other sums at any time credited by or due from the Purchaser to the Corporation; and
8.1.9 · the Purchaser may treat any or all of the Corporation Documents as oeing in default and may exercise any rights and remedies thereunder as it shall deem appropriate.
8.2. License. With respect to the Purchaser's exercise of rights and remedies hereunder including in connection with any completion of the sale or other disposition of any of the Pledged Property, the Corporation hereby grants to the Purchaser a nonexclusive irrevocable license· to use, apply, and affix any trademark, trade name, logo, or the like in which the Corporation now or hereafter has rights.
8.3. No Duty of Preservation: Joint Propertv. The Purchaser may at all times proceed directly against the Corporation, or against any other Person responsible for any Obligations, to enforce the payment of the Obligations, and the Purchaser shall not be required to take any action of any kind to preserve, collect upon or protect the rights of the Purchaser or of any other Person in any Pledged Property, except as specifically required by the UCC. Without limiting the generality of the foregoing, the Purchaser shall not be required to take any action to preserve rights against prior parties in the cases of Instruments or Chattel Paper, and the Purchaser may co-mingle any items of Pledged Property with other property and shall not be required to keep any Pledged Property identifiable. In the event any Pledged Property, including any Deposit Account, is held in joint or common names, the Purchaser may deal with such Pledged Property or any Deposit Account, for all purposes hereunder and under any or all of the Corporation Documents, as if belonging to arty one, and no more than one, of such joint or common owners.
8.4. Remedies Not Exclusive. The enumeration of rights and remedies in the Corporation Documents is not intended to be exclusive, and they shall be in addition to and not by way of limitation of such others as the Purchaser may have under the UCC, other applicable law, and any and all other Documents, Instruments, agreements or other writings between or among the Corporation, the Purchaser or other Persons. The Purchaser shall, in its sole discretion, determine its choice of rights and remedies and the order in which they shall be exercised, and which Pledged Property, if any, is to be proceeded against and in which order. The exercise of any right or remedy against the Corporation, any other Person or any or all Pledged Property shall not preclude the exercise of others or the exercise thereof against the Corporation, any other Persons or any other Pledged Property, all of which shall be cumulative. No act, failure or delay by the Purchaser shall constitute a waiver of any of its rights and remedies. No single or partial waiver by the Purchaser of any provision of the Corporation Documents, or of any breach or default thereunder, or of any right or remedy which the Purchaser may have shall operate as a waiver of any other provision, breach, default, right or remedy or of the same one on a future occasion.
8.5. Deficiency. The Corporation shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Pledged Property are insufficient to pay the Obligations and the reasonable fees and disbursements of any attorneys employed by the Purchaser to collect such deficiency.
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8.6. Requirement of Law. Notwithstanding any provision contained in this Agreement to the contrary, the exercise of remedies or any power of attorney granted hereunder with respect to Pledged Property is subject to any applicable Requirement of Law of any Govermnental Authority. No action will be taken by the Purchaser hereunder if such action will result in a violation of any applicable Requirement of Law of any Government Authority by the Corporation.
SECTION 9. MISCELLANEOUS.
9.1. Survival of Covenants: Binding Effect. Except for those indemnification obligations and other obligations which by their terms survive termination of the Corporation Documents, all agreements, representations, covenants and warranties made by the Corporation in this Agreement, the other Corporation Documents, or in any certificate or other document delivered to the Purchaser in connection herewith shall survive the termination of this Agreement and survive the execution and delivery of this Agreement, and shall remain in full force and effect until all Obligations to the Purchaser have been paid in full and satisfied, and the security interest, Lien and rights granted to the Purchaser in any Pledged Property and its rights and remedies hereunder and under the other Corporation Documents shall continue in full force and effect until all Obligations have been satisfied. All the terms and provisions of this Agreement and the other Corporation Documents shall be binding upon, inure to the benefit of and be enforceable by and against the parties hereto and their respective successors and assigns.
9 .2. Prior Discussions: Amendments in Writing: Counterparts: Filing As Financing Statement. This Agreement and all other Corporation Documents incorporate all discussions and negotiations between the Corporation and the Purchaser, either express or implied, concerning the matters included herein and therein, any custom, usage or other writing to the contrary notwithstanding. No such discussions or negotiations shall limit, modizy, or otherwise affect the provisions of the Corporation Documents. This Agreement may be amended or modified only in writing signed by the parties hereto, and in the case of the Purchaser signed by a duly authorized officer thereof. This Agreement may be executed in two or more counterparts, each of which shall constitute an original, but such counterpatts together shall constitute one and the same instrument. Any proof of this Agreement shall require production of only one such counterpart. A carbon, photographic or other reproduction of this Agreement or of any financing statement executed to perfect the security interest created.herein may be filed as a financing statement under the UCC (or under the Uniform Commercial Code in effect in any jurisdiction outside of California).
9.3. General Indemnification. The Corporation shall, and does hereby, indemnizy and save the Purchaser harmless from (and agrees to defend the Purchaser from) any and all liabilities, damages, costs, losses and expenses (including court costs and attorney's reasonable fees and expenses) that the Purchaser may sustain or incur by reason of, relating to or arising out of the preparation of this Agreement, the defending or protecting of any Pledged Property or the priority of the Purchaser's interest therein, or in collecting or enforcing the Obligations, or in·enforoing any of the Purchaser's rights or remedies, or in the prosecution or defense of any action or proceeding concerning any matter growing out of or connected with this Agreement, any of the other Corporation Documents, the Obligations, the Pledged Property, or on account of the Purchaser's relationship with the Corporation, or any other Person responsible for any of the Obligations (the of which may be defended, compromised, settled or pursued by the Purchaser with counsel of the Purchaser's selection, at the expense of the Corporation) except for such claims which have arisen out of the Purchaser's actual bad faith, willful misconduct or gross negligence. The within indemnification shall survive termination of this Agreement. The Corporation's obligations under this subsection constitute part of the Obligations secured by the security interest created by this Agreement.
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9.4. Destruction of Documents: Receipt of Copy. This Agreement and all other Corporation Documents may be reproduced by the Purchaser by any photographic, microfilm, or similar process, and the Purchaser may destroy the original from which any document was so reproduced. Any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made in the regular course of business). The Corporation acknowledges receipt of a true, correct and complete copy or counterpart of this Agreement.
9.5. Notices. All notices required or permitted hereunder shall be in writing and delivered in accordance with the provisions of the Bond and Loan Agreement.
9.6. Application of Proceeds. Subject to the provisions of the Bond and Loan Agreement, the Purchaser shall apply (or change any application previously made of) the proceeds of any collection, sale . or other disposition of the Pledged Property, or of any other payments received hereunder, toward the Obligations in such order and manner as the Purchaser, in its sole discretion, shall determine, any statute (the application of which may be waived or modified by agreement), customs or practices to the contrary notwithstanding. The Corporation shall remain liable to the Purchaser for any deficiency remaining following such application.
9.7. Severabilitv. If any provision of this Agreement or any of the other Corporation Documents, or any portion of such provision, or the application thereof to any Person or circumstance, shall to any extent be prohibited or held invalid or unenforceable, the remainder of this Agreement and the other Corporation Documents or the remainder of such provision and the application thereof to other Persons or circumstances (other than those as to which it is prohibited or held invalid or unenforceable) shall not be affected thereby, and the term and provision hereof and of the other Corporation Documents shall be valid and enforced to the fullest extent permitted by law. To the extent permitted by law, the parties hereto waive any provision of law which renders any such provision or the application thereof to any Person or circumstance prohibited, invalid or unenforceable in any respect.
9.8. Headings. Headings appearing in this Agreement are intended for convenience only and do not constitute, and shall not be interpreted to be, a part of this Agreement.
9 .9. Joint and Several Liability. If ever there are additional Corporations under the Facilities, all of the obligations and liabilities of the Corporation under this Agreement shall be deemed joint and several.
9.1 0. Waiver of Jury Trial. THE CORPORATION AND THE PURCHASER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE OTHER CORPORATION DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.
9.11. Governing Law: Jurisdiction. This Agreement and the other Corporation Documents are executed and delivered under seal and shall be construed in accordance with and governed by the laws of the State of California, without giving effect to the conflict of law provisions thereof. The Corporation submits itself to the non-exclusive jurisdiction of the courts of the State of California for all purposes with respect to the Corporation Documents and such Corporation's relationship with the Purchaser.
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed and delivered under their seals as of the date first above written. -· WITNESS:
"i4ame: Shirley Doxtad
WITNESS:
_J?72=:::::::1L£...L.!!:.::::::::====::-:::-. Name: Stan Rubin
#11859968_v8
TilE NUEVA SCHOOL, a California nonprofit corporation
By: -~::.9..~:!:=:=-.J~:::::!=::!!::=:::~~=t-Name: Diane Rosenberg Title: Executive Director
···'------......)
By: ____ ~t~-~~~~--~~----------Name: Terry Title: Associat Head of School,
Chief Op rating and Financial Officer
BOSTON PRIVATE BANK & TRUST COMPANY, a Massachusetts trust company
By: _ _;,.;::..;&~~=-~~:J._..:::_~L._-Nam: Title: ··
20
SECURITY AGREEMENT- ALL ASSETS
by and among
BOSTON PRIVATE BANK & TRUST COMPANY (the "Purchaser")
and
THE NUEVA SCHOOL (the "Corporation")
MASTER DISCLOSURE SCHEDULE
I. Name of The Corporation.
1.1 The exact corporate name of the Corporation as it appears on its organizational documents, its taxpayer identification number and its organizational identification number are as follows:
The Nueva School Federal Tax Identification No.: 94-1633387 (a California nonprofit corporation)
1.2 The following is a list of all other names (including trade names or similar appellations) used by the Corporation or any other business or organization to which such Corporation became the successor by merger, consolidation, acquisition, change in form, nature or jurisdiction of organization or ·otherwise, at any time during the past five (5) years: ·
(a) For The Nueva School (a California nonprofit corporation), [none].
1.3 The following is the state (or jurisdiction) of organization (or formation) of the Corporation:
California
2. Locations.
2.1 The chief executive office and principal place of business of the Corporation is located at the following address:
The N neva Schoo I 6565 Skyline Boulevard Hillsborough, CA 940 I 0
2.2 The following is a list of all ofthe other locations in which the Corporation maintains any books or records relating to any of the Pledged Property consisting of Accounts, Chattel Paper, General Intangibles or mobile goods:
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2.3 The following are all of the other places of business of the Corporation:
3. Pledged Notes. The following is a summary of all of the Pledged Notes:
4. Copyrights
4.1 U.S. Registered Copyrights or Applications Therefor. The following copyrights registered with, and the following copyright applications pending with, the United States Copyright Office, are owned by the Corporation:
4.2 Copyright Licenses. The following is a list of all of the Corporation's Copyright Licenses:
5. Patents.
5.1 U.S. Issued Patents or Applications Therefor. The following patents issued by, and the following patents applications pending with, the United States Patent and Trademark Office, are owned by the Corporation:
5.2 Non-U.S. Registered Patents or Applications Therefor. The following patents issued by, and the following patent applications pending with, an office or agency of the country noted below, are owned by the Corporation:
5.3 Patent Licenses. The following is a list of all Patent Licenses of the Corporation:
6. Trademarks.
6.1 U.S. Registered Trademarks or Aoolications Therefor. The following trademarks registered with, and the following trademark applications pending with, the United States Patent and Trademark Office, are owned by the Corporation: Reg. # 1039893 and Reg. # 1 039663
6.2 State Registered Trademarks or Applications Therefor. The following trademarks registered with, and the following trademark applications pending with, the State office or agency noted below, are owned by the Corporation:
6.3 Non-U.S. Registered Trademarks or Applications Therefor. The following trademarks registered with, and the following trademark applications pending with, an office or agency of the country noted below, are owned by the Corporation:
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6.4 Trademark Licenses. The following is a list of all Trademark Licenses of the Corporation:
7. Equipment for which Certificates of Title Have Been Issued.
1987 Mercedes Benz four door sedan License 3EMR251 bearing YIN WDBEB33D7HA377168
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EXHIBITC
AMORTIZATION SCHEDULE
Payment Date
January I, 2016 February I, 2016
March I, 2016 April!, 2016 May 1,2016 June I, 2016 July I, 2016
August I, 2016 September I, 2016
October I, 2016 November I, 2016 December I, 2016
January I, 2017 February I, 2017
March 1,2017 Aprill,2017 May 1,2017 June 1,2017 July 1,2017
August I, 2017 September I, 2017
October I, 2017 November I, 2017 December I, 2017
January I, 2018 February I, 2018
March I, 2018 April I, 2018 May I, 2018 June I, 2018 July 1,2018
August I, 2018 September I, 2018
October I, 2018 November I, 2018 December I, 2018
January I, 2019 February I, 2019
March I, 2019 April I, 2019 May I, 2019 June I, 2019 July I, 2019
August I, 2019 September I, 2019
October I, 2019 November I, 2019 December I, 2019 January I, 2020
C-1
Principal Amount
$63,175.38 63,352.18 74,328.54 63,737.49 67,503.09 64,104.79 67,859.53 64,474.10 64,654.54 68,393.04 65,026.89 68,754.39 65,401.29 65,584.32 76,350.31 65,981.54 69,680.83 66,361.21 70,049.28 66,742.97 66,929.76 70,601.03 67,314.65 70,974.55 67,701.67 67,891.14 78,439.72 68,300.66 71,931.42 68,693.12 72,312.28 69,087.74 69,281.09 72,882.88 69,678.95 73,268.98 70,079.00 70,275.13 80,599.03 70,697.37 74,257.30 71,103.04 74,650.99 71,510.95 71,711.08 75,241.06 72,122.34 75,640.17 72,535.87
#11560443 v9
Payment Date
February 1, 2020 March 1, 2020 April I, 2020 May I, 2020 June I, 2020 July I, 2020
August I, 2020 September 1, 2020
October 1, 2020 November I, 2020 December I, 2020
January 1, 2021 February I, 2021
March I, 2021 April!, 2021 May 1, 2021 June I, 2021 July I, 2021
August I, 2021 September 1, 2021
October 1, 2021 November I, 2021 December I, 2021
January I, 2022 February I, 2022
March 1, 2022 April!, 2022 May 1, 2022 June 1, 2022 July I, 2022
August 1, 2022 September 1, 2022
October 1, 2022 November 1, 2022 December I, 2022
January 1, 2023 February 1, 2023
March I, 2023. April!, 2023 May 1, 2023 June 1, 2023 July I, 2023
August 1, 2023 September 1, 2023
October 1, 2023 November I, 2023 December 1, 2023
January I, 2024 February I, 2024
March 1, 2024 April 1, 2024 May 1, 2024 June I, 2024
C-2
Principal Amount
72,738.87 82,830.57 73,174.25 76,661.00 73,593.58 77,067.93 74,015.22 74,222.36 77,678.14 74,647.47 78,090.69 75,074.93 75,285.03 85,136.77 75,733.99 79,145.10 76,167.44 79,565.74 76,603.27 76,817.66 80,196.74 77,257,08 80,623.18 77,698.92 77,916.37 87,520.11 78,379.37 81,712.30 78,827.40 82,147.10 79,277.90 79,499.77 82,799.60 79,953.99 83,240.39 80,410.70 80,635.74 89,983.19 81,113.24 84,365.39 81,576.35 84,814.81 82,042.01 82,271.62 85,489.54 82,741.11 85,945.16 83,213.20 83,446.08 92,528.67 83,938.57 87,107.23 84,417.26
#11560443 v9
Payment Date
July 1, 2024 August I, 2024
September 1, 2024 October 1, 2024
November 1, 2024 December I, 2024
January I, 2025 February I, 2025
March 1, 2025 April I, 2025 May I, 2025 June I, 2025 July I, 2025
August I, 2025 September 1, 2025
October 1, 2025 November I, 2025 December I, 2025
January 1, 2026 February 1, 2026
March 1, 2026 April 1, 2026 May 1, 2026 June I, 2026 July I, 2026
August 1, 2026 September I, 2026
October I, 2026 November I, 2026 December I, 2026
January 1, 2027 February 1, 2027 March 1, 2027 April 1, 2027 May 1, 2027 June I, 2027 July I, 2027
August 1, 2027 September I, 2027
October 1, 2027 November 1, 2027 December I, 2027
January 1, 2028 February I, 2028
March I, 2028 April 1, 2028 May 1, 2028 June I, 2028 July I, 2028
August 1, 2028 September I, 2028
October I, 2028 November 1, 2028
C-3
Principal Amount
87,571.78 84,898.59 85,136.19 88,269.46 85,621.48 88,740.42 86,109.45 86,350.44 95,159.30 86,858.41 89,940.80 87,353.21 90,420.97 87,850.73 88,096.59 91,142.38 88,598.21 91,629.18 89,102.59 89,351.96 97,877.94 89,875.94 92,869.16 90,387.37 93,365.48 90,901.63 91,156.03 94,111.42 91,674.52 94,614.59 92,195.87 92,453.89
100,687.52 92,994.42 95,895.48 93,523.04 96,408.49 94,054.59 94,317.81 97,179.77 94,853.74 97,699.86 95,392.62 95,659.59
103,591.09 96,217.21 99,023.05 96,763.61 99,553.30 97,313.03 97,585.37
100,350.78 98,139.32
#11560443_v9
Payment Date
December I, 2028 January I, 2029
February I, 2029 March 1, 2029 April 1, 2029 May I, 2029 June I, 2029 July I, 2029
August 1, 2029 September I, 2029
October I, 2029 November I, 2029 December I, 2029
January I, 2030 February I, 2030
March I, 2030 April 1, 2030 May I, 2030 June I, 2030 July I, 2030
August I, 2030 September 1, 2030
October I, 2030 November I, 2030 December I, 2030 January 1, 2031
February I, 2031 March I, 2031 April1,2031 May 1,2031 June 1, 2031 July I, 2031
August I, 2031 September I, 2031
October I, 2031 November 1, 2031 December 1, 2031
January 1, 2032 February I, 2032 March I, 2032 April I, 2032 May 1, 2032 June I, 2032 July I, 2032
August I, 2032 September I, 2032
October 1, 2032 November I, 2032 December I, 2032
January I, 2033 February I, 2033
March 1, 2033 April 1, 2033
C-4
Principal Amount
I 00,888.35 98,696.32 98,972.53
106,591.80 99,547.83
102,255.24 100,112.59 102,803.32 I 00,680.48 100,962.24 103,627.86 101,534.81 104,183.51 102,110.54 102,396.30 109,692.90 102,989.86 105,595.56 103,573.61 106,162.06 104,160.58 104,452.08 107,014.58 105,043.89 107,588.90 I 05,638.97 105,934.61 112,897.74 106,547.04 109,047.63 107,150.41 I 09,633.17 107,757.10 108,058.67 110,514.59 I 08,670.37 111,108.22 109,285.45 109,591.29 116,209.79 110,223.22 112,615.18 110,846.86 113,220.39 111,473.94 111,785.91 114,131.69 112,418.17 114,745.26 113,053.91 113,370.30 119,632.64 114,022.39
#11560443_v9
Payment Date
May I, 2033 June I, 2033 July I, 2033
August I, 2033 September I, 2033
October I, 2033 November I, 2033 December I, 2033
January I, 2034 Febmary I, 2034
March I, 2034 April I, 2034 May I, 2034 June I, 2034 July I, 2034
August I, 2034 September I, 2034
October I, 2034 November I, 2034 December I, 2034
January I, 2035 February I, 2035 March I, 2035 April!, 2035 May I, 2035 June 1, 2035 July I, 2035
August I, 2035 September I, 2035
October I, 2035 November I, 2035 December I, 2035
January I, 2036 February l, 2036
March I, 2036 April I, 2036 May I, 2036 June I, 2036 July I, 2036
August I, 2036 September I, 2036
October I, 2036 November I, 2036 December I, 2036
January I, 2037 Febmary I, 2037
March I, 2037 April!, 2037 May I, 2037 June I, 2037 July I, 2037
August I, 203 7 September I, 2037
C-5
Principal Amount
116,302.08 114,666.97 116,927.62 115,315.12 115,637.84 117,869.80 116,291.34 118,503.99 116,948.44 117,275.73 123,169.99 117,948.64 120,112.32 118,614.88 120,758.87 119,284.80 119,618.63 121,732.96 120,294.08 122,388.45 120,973.25 121,311.81 126,825.69 122,006.25 124,050.03 122,694.87 124,718.29 123,387.28 123,732.59 125,725.36 124,430.73 126,402.86 125,132.71 125,482.91 130,603.68 126,199.60 128,119.46 126,911.34 128,810.17 127,627.00 127,984.18 129,851.31 128,705.76 130,551.57 129,431.32 129,793.55 134,508.05 130,533.23 132,325.03 131,268.87 133,038.93 132,008.56 132,378.00
#11560443_v9
Payment Date
October I, 2037 November I, 2037 Dece1nber I, 2037
January I, 2038 February I, 2038
March I, 2038 April!, 2038 May I, 2038 June I, 2038 July I, 2038
August I, 2038 September 1, 2038
October I, 2038 November 1, 2038 December I, 2038
January 1, 2039 February 1, 2039
March I, 2039 April!, 2039 May 1, 2039 June I, 2039 July I, 2039
August I, 2039 September I, 2039
October 1, 2039 November 1, 2039 December 1, 2039
January 1, 2040 February I, 2040 March I, 2040 April 1, 2040 May 1, 2040 June 1, 2040 July 1, 2040
August I, 2040 September 1, 2040
October I, 2040 November 1, 2040 December 1, 2040
January I, 2041 February I, 2041
March I, 2041 April I, 2041 May I, 2041 June I, 2041 July I, 2041
August I, 2041 September I, 2041
October I, 2041 November I, 2041 December I, 2041
January I, 2042 February 1, 2042
C-6
Principal Amount
134,115.30 133,123.81 134,839.07 133,873.74 134,248.40 138,543.05 135,011:84 136,671.30 135,772.17 137,409.17 136,536.70 136,918.81 138,521.93 137,689.66 139,270.00 138,464.77 138,852.28 142,713.03 139,640.27 141,162.96 140,426.13 141,925.60 141,216.32 141,611.53 143,075.97 142,408.26 143,849.16 143,209.38 143,610.17 147,022.50 144,423.54 145,804.89 145,235.77 146,593.12 146,052.49 146,461.23 147,782.37 147,284.71 148,581.51 148,112.72 148,527.23 151,476.15 149,366.82 150,602.10 150,206.32 151,416.79 151,050.45 151,473.18 152,646.21 152,324.29 153,472.17 153,180.09 153,608.79
#11560443_v9
Payment Date
March I, 2042 April 1, 2042 May 1, 2042 June 1, 2042 July 1, 2042
August 1, 2042 September 1, 2042
October 1, 2042 November I, 2042 December 20, 2042
C-7
Principal Amount
156,078.79 154,475.48 155,559.80 155,343.15 156,401.83 156,215.60 156,652.79 157,672.77 157,532.46
6,126,783.22 $40,000,000.00