LOAN AGREEMENT

 

TABLE OF CONTENTS

				PAGE
ARTICLE I DEFINITIONS AND USE OF PHRASES
Section 1.01		Definitions		2
Section 1.02		Use of Phrases; Rules of Construction		3
ARTICLE II THE LOAN
Section 2.01		Issuance of Bonds to Finance the Project		4
Section 2.02		Making of the Loan		4
Section 2.03		Acceptance and Evidence of the Loan		4
Section 2.04		Direct, Unsecured Obligation		5
Section 2.05		Pledge and Assignment to Trustee		5
Section 2.06		Loan Repayment		5
ARTICLE III CONSTRUCTION OF THE PROJECT.
Section 3.01		Agreement to Complete the Project		5
Section 3.02		Manner of Procuring Disbursements from the Cost of Issuance Fund		6
Section 3.03		Manner of Procuring Disbursements from the Construction Fund		6
Section 3.04		Amendments to Project Plans and Specifications		7
Section 3.05		Establishment of Project Completion Date		7
Section 3.06		Closing of Construction Fund		7
Section 3.07		Maintenance and Improvement of Project		8
Section 3.08		Agreements for the Benefit of the Issuer		8
ARTICLE IV CONVERSION OF INTEREST RATE, REMARKETING AGENT AND CREDIT FACILITIES
Section 4.01		Conversion of Interest Rate		8
Section 4.02		Concerning the Remarketing Agent		9
Section 4.03		Concerning Substitute Credit Facilities		9
Section 4.04		References to Credit Facility Provider After Expiration or Default of Credit Facility		9
ARTICLE V PREPAYMENT OF PROMISSORY NOTE
Section 5.01		Optional Prepayment of Promissory Note Upon Occurrence of Certain Extraordinary Events		9
Section 5.02		Mandatory Prepayment of Promissory Note Upon Determination of Taxability or Expiration of Credit Facility		10
Section 5.03		Optional Prepayment of the Promissory Note		11
Section 5.04		Deposit of Prepayments in Redemption Fund		12
Section 5.05		Corresponding Redemption of Bonds		12
Section 5.06		Purchase and Cancellation of Bonds		12

 

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ARTICLE VI REPRESENTATIONS OF BORROWER
Section 6.01		Corporate Existence and Authorizations		12
Section 6.02		Absence of Conflicting Agreements		12
Section 6.03		Absence of Litigation		12
Section 6.04		Regulatory Approvals		13
Section 6.05		Date and Survival of Representations; Exceptions		13
ARTICLE VII COVENANTS OF BORROWER
Section 7.01		Payment of Promissory Note		13
Section 7.02		Unconditional Obligation to Provide the Issuer with Sufficient Revenues		13
Section 7.03		Indemnification of Issuer		14
Section 7.04		Taxes, Licenses, Utilities and Governmental Charges		15
Section 7.05		Insurance		15
Section 7.06		Tax Status of Bonds		15
Section 7.07		Sale or Transfer of Project		17
Section 7.08		Maintenance of Corporate Existence		17
Section 7.09		Transfers of Assets		18
Section 7.10		Debt Service Reserve Fund		18
ARTICLE VIII DAMAGE; EMINENT DOMAIN
Section 8.01		Damage		18
Section 8.02		Eminent Domain		19
ARTICLE IX THE TRUSTEE AND TRUST FUNDS
Section 9.01		Payment of Trustee’s Fees		19
Section 9.02		Duty to Provide Data		20
Section 9.03		Investment of Trust Funds; Arbitrage		20
Section 9.04		Bond Fund and Redemption Fund		21
Section 9.05		Excess Trust Fund Moneys		21
ARTICLE X DEFAULT PROVISIONS
Section 10.01		Defaults; Events of Default		21
Section 10.02		Acceleration		22
Section 10.03		Remedies		22
Section 10.04		Disposition of Amounts Collected		22
Section 10.05		Payment of Costs and Expenses		22
Section 10.06		Limitation on Waivers		23
Section 10.07		Performance by Third Parties		23
Section 10.08		Performance for Issuer Under Indenture		23
ARTICLE XI MISCELLANEOUS
Section 11.01		Amendments		23
Section 11.02		Successors		24
Section 11.03		Governing Law		24

 

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Section 11.04		Captions and Dates		24
Section 11.05		Counterparts		24
Section 11.06		Notices		24
Section 11.07		Severability		24
Section 11.08		Termination		25
Section 11.09		Limited Liability of Issuer		25

EXHIBITS

Exhibit A - Form of Promissory Note
Exhibit B - Form of Conversion Notice
Exhibit C - Form of Reset Notice
Exhibit D - Form of Requisition
Exhibit E - Eligible Costs of the Project

 

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LOAN AGREEMENT

THIS LOAN AGREEMENT, made and entered into as of March 1, 1998, by and between the CITY OF LADYSMITH, WISCONSIN, a political subdivision and body corporate and politic existing under the laws of the State of Wisconsin (the “Issuer”) and CITYFOREST CORPORATION, a Minnesota corporation authorized to do business in the state of Wisconsin (the “Borrower”);

WITNESSETH:

WHEREAS, the Issuer is authorized pursuant to the provisions of the laws of the State of Wisconsin, including specifically, but without limitation, Section 66.521, Wisconsin Statutes (the “Act”), to issue its revenue bonds to finance or refinance all or any part of the construction, equipping, re-equipping, acquisition, purchase, installation, reconstruction, rebuilding, rehabilitation, improving, supplementing, replacing, maintaining, repairing, enlarging, extending or remodeling of qualified projects and the improvement of sites therefor within and outside of the territory of the Issuer; and

WHEREAS, the Issuer is further authorized by the Act to issue its revenue bonds, payable solely and only from the revenues and receipts to be derived by the Issuer from the Borrower, to provide funds to pay, in whole or in part, or to reimburse the Borrower for, the costs of such qualified projects; and

WHEREAS, the Issuer has induced the Borrower to proceed with the Project (as hereinafter defined) in the territory of the Issuer by offering to issue the Bonds (as hereinafter defined) and to loan the proceeds thereof to the Borrower for the purpose of paying certain costs of the Project; and

WHEREAS, the Issuer will receive substantial municipal benefits from the Project, including by way of illustration but not limitation: retention of and more steady employment of its citizens resulting in the alleviation of unemployment within the Issuer; maintenance or increase in the tax base of the Issuer resulting in greater support for education and municipal services; stimulation for expansion of existing and new business; stimulation of private investment funds from financial institutions; and betterment of the Issuer’s environment and economy; and

WHEREAS, the Issuer’s governing body has found and determined that the Project is a qualified project under the Act, that the Borrower is an eligible participant under the Act, and that this Loan Agreement meets the requirements of a revenue agreement under the Act; and

WHEREAS, the Issuer’s governing body has found and determined the financing of the Project with the Bonds will serve the intended accomplishments of public purpose and will in all respects conform to the provisions and requirements of the Act; and

WHEREAS, the execution and delivery of this Loan Agreement have been in all respects duly and validly authorized by resolution of the Issuer’s governing body, and no

 

sufficient petition for a referendum has been filed pursuant to the provisions of subsection (10)(d) of the Act;

WHEREAS, the execution and delivery of this Loan Agreement have been in all respects duly and validly authorized by resolution of the Issuer’s governing body;

NOW, THEREFORE, in consideration of the premises and of the covenants and undertakings herein expressed, the Issuer and the Borrower agree as follows:

ARTICLE I

DEFINITIONS AND USE OF PHRASES

Section 1.01  Definitions.

As used in this Loan Agreement and the recitals hereto, the terms and phrases defined in the Indenture of Trust dated even herewith between the Issuer and U.S. Bank National Association, as trustee, shall, except as set forth below, have the same meanings herein. In addition:

“ Bond Discount ” means the difference, if any, between the Bond Amount and the price at which the Bonds are sold by the Issuer to the original purchaser(s) of the Bonds.

“ Eligible Costs of the Project ” means the following categorical costs of providing the Project:

(a) the “ Bond Issuance Costs ”, namely the costs, fees and expenses incurred or to be incurred by the Borrower in connection with the issuance and sale of the Bonds which are subject to the limitation described in Section 147(g)(l) of the Internal Revenue Code, including commitment, underwriting, remarketing or other financing fees, the fees and disbursements of Bond Counsel, the Trustee’s acceptance fee, the filing and recording fees in connection with any filings or recording necessary under the Indenture or to perfect the lien thereof, any administrative fee of the Issuer, the fees and disbursements of counsel to the Issuer, the fees and disbursements of counsel to the Borrower, the fees and disbursements of counsel to the underwriter, the fees and disbursements of counsel to the Credit Facility Provider, rating agency fees, the fees and disbursements of the Borrower’s accountants, the costs of preparing or printing the Bonds and the documentation supporting the issuance of the Bonds, the costs of any title insurance policies, appraisals, environmental audits and similar costs relating to the Project or other security for the Borrower’s obligations under the Credit Facility Reimbursement Agreement, and any other costs of a similar nature reasonably incurred;

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(b) the “ Capitalized Interest Costs ”, namely interest on the Bonds from the date of their original delivery to the Completion Date and certain fees of the Credit Facility Provider approved in writing by Bond Counsel;

(c) the “ Engineering Costs ”, namely (i) the architectural and engineering costs and other costs which are or were necessary for the design and planning of the Project and which were paid or incurred after November 13, 1995 and/or (ii) costs which constitute preliminary expenditures as such term is used in Treas. Reg. §1.150-2(f);

(d) the “ Basic Project Costs ”, namely those costs of acquiring, constructing and installing the Project which were paid or incurred after November 13, 1995 and which were or are for the purpose of providing land or property of a character subject to the allowance for depreciation under Section 167 of the Internal Revenue Code;

(e) the “ Other Costs ”, namely such other costs paid or incurred in connection with the Project or the financing thereof which, in the opinion of Bond Counsel, may be paid or reimbursed to the Borrower from the Construction Fund without adverse effect on the legality of the Bonds or the exclusion of interest thereon from gross income for federal income tax purposes under Sections 103(a) and 142 of the Internal Revenue Code; and

(f) the “ Debt Service Reserve Fund Costs ” means an amount up to $500,000 to be paid to the Credit Facility Provider for deposit in the Debt Service Reserve Fund.

“ Event of Default ” means any of the events designated as such in Section 10.01 of this Loan Agreement.

“ Loan ” means the Loan described in Section 2.02 hereof.

Section 1.02   Use of Phrases: Rules of Construction.

The following provisions shall be applied wherever appropriate herein:

“ Herein ”, “ hereby ”, “ hereunder ”, “ hereof ” and other equivalent words refer to this Loan Agreement as an entirety and not solely to the particular portion of this Loan Agreement in which any such word is used.

The definitions set forth in Section 1.01 hereof shall be deemed applicable whether the words defined are herein used in the singular or the plural.

Wherever used herein, any pronoun or pronouns shall be deemed to include both the singular and plural and to cover all genders.

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Unless otherwise provided, any determinations or reports hereunder which require the application of accounting concepts or principles shall be made in accordance with generally accepted accounting principles.

ARTICLE II

THE LOAN

Section 2.01   Issuance of Bonds to Finance the Project.

Simultaneously with the delivery of this Loan Agreement, the Issuer shall issue, sell and deliver the Bonds in the Bond Amount to provide it with funds to be loaned to the Borrower pursuant to this Loan Agreement. The Bonds shall be issued in accordance with the Indenture. The Borrower’s approval of the terms of the Bonds and the Indenture shall be conclusively established by its execution and delivery of this Loan Agreement. If for any reason the Bonds are not issued, sold and delivered, the Issuer shall have no obligation to make the Loan and this Loan Agreement and the Promissory Note shall each cease, terminate and be void.

Section 2.02   Making of the Loan.

The Issuer hereby makes a Loan to the Borrower in the principal amount of the Bond Amount. The Loan shall be deemed to have been made when the proceeds of the original sale of the Bonds are delivered to the Trustee at the direction of the Issuer. Such proceeds shall be apportioned by the Trustee and deposited in Trust Funds, as follows:

(a) An amount equal to the Cost of Issuance Deposit Amount shall be paid to the Credit Facility Provider for deposit into the Cost of Issuance Fund and the Initial Debt Service Amount shall be paid to the Credit Facility Provider for deposit in the Debt Service Reserve Fund; and

(b) The balance shall be deposited into the Construction Fund.

The Bond Discount, if any, shall be deemed to have been loaned to the Borrower and applied to the Bond Issuance Costs. The Bond Amount equals (and the Loan consists of) the sum of the Bond Discount plus items (a) and (b) above.

Section 2.03   Acceptance and Evidence of the Loan.

The Borrower hereby accepts the Loan and as evidence thereof hereby delivers the Promissory Note to the Issuer. The Issuer hereby acknowledges receipt of the Promissory Note.

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Section 2.04   Direct, Unsecured Obligation.

The debt obligations of the Borrower under this Loan Agreement and the Promissory Note are direct, unsecured obligations of the Borrower.

Section 2.05   Pledge and Assignment to Trustee.

Simultaneously with the delivery of this Loan Agreement, the Issuer shall pledge and assign to the Trustee under the Indenture all of the Issuer’s right, title and interest in and to the Promissory Note, this Loan Agreement and all of the Issuer’s rights to receive payments thereunder and hereunder; provided, however, that the Issuer reserves the right to enforce the Unassigned Rights in its own name and for its own account. The Borrower hereby consents to such pledge and assignment and agrees that the Trustee may enforce any and all rights, privileges and remedies of the Issuer (other than the Unassigned Rights) under or with respect to the Promissory Note and this Loan Agreement.

Section 2.06   Loan Repayment.

The Borrower shall repay the Loan in accordance with the terms of the Promissory Note. The Promissory Note shall be in the Bond Amount and shall mature on the Final Maturity Date, but shall be subject to prepayment, as provided therein upon the establishment of Reset Periods and as otherwise provided in Article V hereof. The Promissory Note shall bear interest from the date of issuance of the Bonds, (i) prior to the Conversion Date, at the Variable Rate, and (ii) thereafter, during each Reset Period, at the Adjusted Interest Rates from time to time. Interest is payable (i) on and prior to the Conversion Date, on the first Business Day of each month, commencing March 1, 1998, (ii) thereafter, on March 1 and September 1 of each year, commencing the first such date which is at least 30 days after the Conversion Date, and (iii) on each other Interest Payment Date for the Bonds as provided in the Indenture. The payments on the Promissory Note shall be made by the Borrower (or by the Credit Facility Provider pursuant to the Credit Facility Reimbursement Agreement) directly to the Trustee then acting under the Indenture. The Trustee shall deposit all payments on the Promissory Note into the Bond Fund or the Redemption Fund as provided in the Indenture.

The Borrower’s principal and interest payment obligations on the Promissory Note shall be discharged to the extent that the corresponding principal and interest payments on the Bonds are made from the Bond Fund in accordance with the provisions of the Indenture.

ARTICLE III

CONSTRUCTION OF THE PROJECT.

Section 3.01   Agreement to Complete the Project.

The Borrower agrees to complete, or cause to be completed, the construction, acquisition and installation of the Project with all reasonable dispatch in accordance with the

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Project Plans and Specifications. If the moneys in the Construction Fund shall be insufficient to pay the costs of completing the Project, the Borrower shall nevertheless complete the same and shall be responsible for causing the costs thereof to be paid. The Borrower shall procure any and all building permits, use and occupancy permits, and other permits, licenses and authorizations necessary for the construction, completion, occupancy and use of the Project.

Section 3.02   Manner of Procuring Disbursements from the Cost of Issuance Fund.

Bond Issuance Costs, to the extent financed by the Bonds, may be disbursed only from the Cost of Issuance Fund and only in an aggregate amount not exceeding the Cost of Issuance Deposit Amount. Upon requisition as hereinafter provided, the moneys in the Cost of Issuance Fund shall be disbursed to or at the order of the Borrower to pay (or reimburse the Borrower for) the Bond Issuance Costs described in the definition of Eligible Costs of the Project herein.

Disbursements from the Cost of Issuance Fund shall be made by the Trustee only upon receipt of an appropriately completed Borrower’s Requisition substantially in the form attached hereto as Exhibit D, executed on behalf of the Borrower by a Borrower’s Representative, accompanied by the supporting information and documentation specified therein and approved by the Credit Bank.

If the moneys in the Cost of Issuance Fund shall be insufficient to pay all of the Bond Issuance Costs, the Borrower shall not allocate Bond proceeds to the payment of such difference. If there shall be any balance in the Cost of Issuance Fund remaining after the earlier of the date which is 90 days after the date of issuance of the Bonds or the date the Trustee receives a certification by the Borrower’s Representative that all Bond Issuance Costs have been paid, such remaining balance shall be transferred to the Construction Fund, or if the Construction Fund has been closed pursuant to Section 3.06 hereof, to the Surplus Construction Fund.

Section 3.03   Manner of Procuring Disbursements from the Construction Fund.

Upon requisition as hereinafter provided, moneys in the Construction Fund shall be disbursed to or at the order of the Borrower to pay (or reimburse the Borrower for) the Engineering Costs, the Basic Project Costs and the Other Costs of the Project described in the definition of Eligible Costs of the Project herein.

Disbursements from the Construction Fund shall be made by the Trustee only upon receipt of an appropriately completed Borrower’s Requisition substantially in the form attached hereto as Exhibit D, executed on behalf of the Borrower by a Borrower’s Representative and approved by the Credit Facility Provider and the Independent Engineer. With respect to each such disbursement from the Construction Fund, the Borrower must allocate each such amount set forth therein to an Eligible Cost of the Project described in Exhibit E hereto, unless such cost is allocated to Other Costs of the Project described in the definition of Eligible Costs of the Project. The Trustee shall have the right to withhold disbursements from the Construction Fund if the Borrower’s Requisition is incomplete or is not approved by the Credit Facility

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Provider and the Independent Engineer.  The Borrower may deposit moneys into the Construction Fund from time to time as it deems desirable or necessary.

Disbursements from the Construction Fund shall be subject to such further terms and conditions as are contained in the Credit Facility Reimbursement Agreement.

Section 3.04   Amendments to Project Plans and Specifications.

Subject to the conditions set forth in this Section 3.04 and the Credit Facility Reimbursement Agreement, the Borrower shall have the right to amend its Project Plans and Specifications and to issue change orders to contractors from time to time as the Borrower shall deem necessary and in each such case, the borrower will provide the Trustee an amended to Exhibit E executed by a Borrower’s Representative.

The Borrower agrees that it will make no amendment or change to the Project Plans and Specifications which would (i) adversely affect the legality of the Bonds or the exclusion of interest thereon from gross income under Section 142 of the Internal Revenue Code, or (ii) be inconsistent with Section 3.08 of this Loan Agreement.

Section 3.05   Establishment of Project Completion Date.

The Borrower shall evidence the completion of the Project by filing the following items with the Issuer, the Credit Facility Provider and the Trustee:  a Borrower’s Certificate certifying, without prejudice to any rights against third parties (i) that the Project has been constructed, acquired and installed in accordance with Project Plans and Specifications, (ii) the date of Project completion and, if applicable, the respective dates of completion of each of the component phases of the Project, and (iii) that all labor, services, materials and supplies used to construct, acquire and install the Project have been paid in full, except for such portion thereof (which shall be identified in detail) which the Borrower is disputing in good faith and by appropriate proceeding.

Upon such filing, the date specified in accordance with clause (ii) above shall be the “Completion Date” for purposes of this Loan Agreement.

Section 3.06   Closing of Construction Fund.

Upon being furnished the items described in Section 3.05 hereof, the Trustee shall close the Construction Fund and transfer the remaining balance therein, if any, to the Surplus Construction Fund. If the Borrower has not filed such items by ninety days prior to the third annual anniversary of the Effective Date, the Borrower shall file with the Trustee a Borrower’s Certificate stating in detail the reasons therefor, certifying the amounts, if any, which are then due and owing to contractors, materialmen or other suppliers for the Project and containing detailed estimates of the costs necessary to complete the Project in accordance with the Project Plans and Specifications.

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Section 3.07   Maintenance and Improvement of Project.

For so long as any Bonds shall be Outstanding, the Borrower agrees to keep and maintain the Project in good condition, repair and working order, except for ordinary wear and tear and obsolescence. Subject to Section 3.08 hereof, the Borrower may remodel, modify or otherwise improve the Project from time to time as the Borrower in its discretion determines to be in its best interests.

Section 3.08   Agreements for the Benefit of the Issuer.

The Borrower represents that its present intention and expectation is to use the Project for the Project Enterprise for so long as there shall be Bonds Outstanding. Notwithstanding such intention and expectation, the Borrower shall have the right to use the Project for any lawful purpose which in the opinion of Bond Counsel will not affect adversely the validity of the Bonds or result in the inclusion of interest on the Bonds in gross income for federal income tax purposes. As an inducement to the Issuer to issue the Bonds, the Borrower covenants to use its best efforts to cause the Project Enterprise to be conducted in the Issuer’s jurisdiction for so long as there shall be Bonds Outstanding.

The Borrower covenants that it shall, on the date of the making of the Loan, and two years after the date of the original issuance and sale of the Bonds, submit to the Department of Commerce of the State of Wisconsin, information regarding the net number of jobs eliminated, created or maintained on the Project site and elsewhere in the State of Wisconsin as a result of the Project. The Borrower further agrees to notify (1) the Department of Industry, Labor and Human Relations and (2) the area private industry council under the Job Training Partnership Act, 29 U.S.C. §§ 1501 to 1798, of any position to be filled within the geographic limits of the Issuer prior to November 25, 1998, and to provide such notices at least two weeks prior to advertising the position.

The Borrower covenants that it will not discriminate based on race, creed, sex, handicap, ethnic origin, age or marital status with regard to employment within the Plant Complex or access to any portion of the Plant Complex generally open to the public.

A breach of the covenants contained in this Section 3.08 shall not be or be deemed an “Event of Default” under this Loan Agreement.

ARTICLE IV

CONVERSION OF INTEREST RATE, REMARKETING
AGENT AND CREDIT FACILITIES

Section 4.01   Conversion of Interest Rate.

The Borrower shall have the right to convert the interest rate on the Bonds from the Variable Rate to the Adjusted Interest Rates, and to cause stated maturities to be assigned to

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the Bonds, by delivering a Conversion Notice in the form of Exhibit B hereto to the Trustee and causing the other conditions set forth in Section 302(B) of the Indenture to be satisfied, and thereafter to establish Reset Periods from time to time by delivering Reset Notices in the form of Exhibit C hereto in accordance with Section 302(C) of the Indenture. In the event that any Proposed Conversion Date established by the delivery of a Conversion Notice does not become the Conversion Date, the Borrower shall have the right to establish another Proposed Conversion Date in the same manner.

Section 4.02   Concerning the Remarketing Agent.

The Borrower shall at all times cause a Remarketing Agent meeting the requirements of Section 310 of the Indenture to perform the functions required of the Remarketing Agent hereunder and under the Indenture. The Borrower shall be responsible for the payment of the fees and expenses of the Remarketing Agent. Any successor Remarketing Agent shall be appointed by the Issuer at the direction of the Borrower.

Section 4.03   Concerning Substitute Credit Facilities.

The Borrower may furnish Substitute Credit Facilities from time to time in accordance with Section 1202 of the Indenture.

Section 4.04   References to Credit Facility Provider After Expiration or Default of Credit Facility.

The particular provisions of this Loan Agreement which require the approval, consent or direction of, or notice to, the Credit Facility Provider apply only while a Credit Facility is outstanding and if the Credit Facility Provider is not in default in any payment required to be made on the Credit Facility.

ARTICLE V

PREPAYMENT OF PROMISSORY NOTE

Section 5.01   Optional Prepayment of Promissory Note Upon Occurrence of Certain Extraordinary Events.

At the option of the Borrower, the Promissory Note may be prepaid in whole (but not in part) if any of the following shall occur:

(a) The Plant Complex shall have been damaged or destroyed to such extent that, in the opinion of the Borrower expressed in a Borrower’s Certificate filed with the Issuer, the Trustee and the Credit Facility Provider following such damage or destruction, (i) it is not practicable or desirable to rebuild, repair or restore the Plant Complex within a period of six consecutive months following such damage or destruction, or (ii) the Borrower is or will be thereby prevented from carrying on its

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normal operations at the Plant Complex for a period of at least six consecutive months; or

(b) Title to or the temporary use of all or substantially all the Plant Complex shall have been taken under the exercise of the power of eminent domain by any governmental authority to such extent that, in the opinion of the Borrower expressed in a Borrower’s Certificate filed with the Issuer, the Trustee and the Credit Facility Provider, the Borrower is or will be thereby prevented from carrying on its normal operations at the Plant Complex for a period of at least six consecutive months; or !

(c) Any court or administrative body of competent jurisdiction shall enter a judgment, order or decree requiring the Borrower to cease all or any substantial part of its operations at the Plant Complex to such extent that, in the opinion of the Borrower expressed in a Borrower’s Certificate filed with the Issuer, the Trustee and the Credit Facility Provider, the Borrower is or will be thereby prevented from carrying on its normal operations at the Plant Complex for a period of at least six consecutive months; or

(d) As a result of any changes in the Constitution of Wisconsin or the Constitution of the United States of America or of legislative or administrative action (whether state or federal) or by final decree, judgment or order of any court or administrative body (whether state or federal), this Loan Agreement shall have become void or unenforceable or impossible of performance in accordance with the intent and purposes of the parties as expressed in this Loan Agreement, or unreasonable burdens or excessive liabilities shall have been imposed on the Issuer or the Borrower as a consequence of the Bonds or the Promissory Note being Outstanding, including without limitation federal, state or other ad valorem, property, income or other taxes not being imposed on the date of this Loan Agreement.

To exercise such option the Borrower shall give notice to the Issuer and the Trustee within 120 days following the occurrence of the event which is said to give rise to the right to exercise such option. The notice shall refer to this Section 5.01, shall describe and give the date of the subject event, shall have attached to it the requisite Borrower’s Certificate, and shall direct a redemption of all Outstanding Bonds pursuant to Section 405 of the Indenture on a specified Business Day for which the notice of redemption required by Section 402 of the Indenture can be given. As a further condition to the exercise of such option, the Borrower shall obtain the written consent of the Credit Facility Provider.

Section 5.02   Mandatory Prepayment of Promissory Note Upon Determination of Taxability or Expiration of Credit Facility.

(a) The Borrower agrees to prepay the entire outstanding principal balance of the Promissory Note if a Determination of Taxability shall occur. The Issuer and the Borrower authorize the Trustee to take actions necessary to call all Bonds for redemption pursuant to Section 406(A) of the Indenture on the earliest practicable

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Business Day for which the Trustee can give notice pursuant to Section 402 of the Indenture, and in any event, within 60 days following the date on which a Determination of Taxability shall have occurred, and to draw on the Credit Facility to prepay the Promissory Note in the amount of 100% of the principal amount of the Bonds to be so redeemed and all interest thereon accrued and to accrue to the date of redemption.

(b) After the Conversion Date, the Borrower agrees to prepay the entire outstanding principal balance of the Promissory Note on the first day of the month in which the Credit Facility Expiration Date is to occur unless, at least 45 days prior to such date, the Borrower shall have caused to be delivered to the Trustee a Substitute Credit Facility meeting the requirements of Section 1202 of the Indenture or an amendment to the Credit Facility extending the Credit Facility Expiration Date by at least the lesser of one year or the period ending on the fifteenth day of the month in which the next Reset Date is to occur. The Issuer and the Borrower authorize the Trustee to take actions necessary to call all Bonds for redemption pursuant to Section 406(B) of the Indenture on such date and to draw on the Credit Facility to prepay the Promissory Note in the amount of 100% of the principal amount of the Bonds to be so redeemed and all interest thereon accrued and to accrue to the date of redemption.

Section 5.03   Optional Prepayment of the Promissory Note.

At the option of the Borrower, the Promissory Note may be prepaid (i) prior to the Conversion Date in whole or in part on any Business Day (ii) in whole or in part on the Conversion Date or any Reset Date, and (iii) during any Reset Period, in whole on any date or in part on any regularly scheduled Interest Payment Date which is (a) on or after the third anniversary of the Conversion Date or Reset Date, as the case may be, if the length of the Reset Period is at least five years, but less than seven years, and (b) on or after the fourth anniversary of the Conversion Date or Reset Date if the length of the Reset Period is seven years or more. If the length of the Reset Period is less than five years, the Promissory Note shall not thereafter be subject to prepayment pursuant to this Section 5.03.

Such option may not be exercised if a Determination of Taxability has occurred. To exercise such option the Borrower shall give notice to the Issuer and the Trustee at least 45 days prior to the Business Day date specified therein as the redemption date. Such notice shall refer to this Section 5.03, shall state the principal amount of the prepayment, and shall direct the redemption of a like principal amount of Bonds pursuant to Section 404 of the Indenture on a specified authorized redemption date for which the notice of redemption required by Section 402 of the Indenture can be given. If the prepayment shall be in part, it shall be in the amount of $5,000 or a multiple thereof. As further conditions to the exercise of such option, the Borro