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47 of 1973 - A Resolution of Intention to issue Industrial Development Revenue Bonds and authorizing the executio , - 4 ResolutiHo.on 7 :1 Irc . :.,: , By Jennings Pitalitstil,Jr. A Resolution of Inten:IdMt Teo issue Industrial Develepment Revenue ponds and authorizing the Emetution of a )1 commitment agreement by and mnong : Mellon Bank, N.A., Bortland Cement Company of Utah, a Utah Corpatation,: ; Wheelabrator Servisystems Corporatiq , a Delaware Corporation, and Salt Lake ,1 City, Salt Lake County, Utah. Presented to the Board of Commissioners AND PASSED AUG 7 1973 )&4YekAtttstOVANNJ , CITY RECO r „ ! : 1 , , iri, • ;:., ; , . t . 1 I 1 CPI L t,I' 'iI ' 4 I '4, ,I .: 1!! . 4 Mellon Bank ILL { Mellon Square Pittsburgh,Pennsylvania 15230 July 26, 1973 The City of Salt Lake City City and County Building Salt Lake City, Utah 84111 Attention: Commissioner Jennings Phillips Gentlemen: We are pleased to advise you that, subject to the terms and conditions herein set forth, we hereby approve your request that we purchase your bond (the "Note") in an amount not to exceed the aggregate principal sum of $600,000 to be issued by you under the provisions of the Utah Industrial Facilities Development Act (the "Act"). The proceeds of the Note ("Note Proceeds") will be applied in the manner hereinafter provided and the Note will be secured by (i) a first and paramount, perfected security interest (the "Security Interest") covering certain industrial pollution control facilities and related improvements (which, together with all additions thereto, substitutions therefor and replacements thereof, are hereinafter called the "Facilities") to be installed and used by Portland Cement Company of Utah (the "Industry") on behalf and as lessee of Wheelabrator Servisystems Corporation ("Servisystems") on real property situate in Salt Lake City, Utah (the "Industrial Site"); (ii) assignments to us of (1) all sums due to you under an agreement of sale (the "Agreement of Sale") to be entered into between you and Servisystems, pursuant to which you will sell the Facilities to Servisystems in exchange for a non- recourse promissory note of Servisystems (the "Servisystems Note") in the amount of the Note providing for payments to you of amounts sufficient to pay interest on and the principal sum of the Note as and when the payment thereof becomes due and (2) all sums due to you pursuant to an assignment (the "Assign- ment") by Servisystems to you of basic rentals payable under a lease (the "Industry Lease") of the Facilities from Servisystems to the Industry, which assigned basic rentals shall be in amounts equal to Servisystems' obligations under the Servisystems Notar and-of the Industry Lease; (iii) a guaranty (the "Guaranty") by the Industry of (1) your undertakings to acquire construct and install the Equipment on the Industrial Site and (2) the prompt and punctual performance by Servisysttms of its obligations under the Agreement of Sale and the Servisystems Note; Mellon Bank N.A. -2- and (iv) a Note Purchase Agreement (the "Note Purchase Agreement"), hereinafter mentioned. This commitment is issued by us subject to (i) your acceptance hereof in the manner hereinafter provided; (ii) issuance of the Note in compliance with the Act and execution and delivery of all loan documents in the City of Pittsburgh, Pennsylvania; (iii) your compliance with all provisions hereof; and (iv) the following terms and conditions wherein you are referred to as the "Municipality", we are referred to as the "Bank", and the Note, the indebtedness evidenced thereby and all instruments and documents to be given to secure and support the same are herein sometimes collectively referred to as the "Loan"; (1) Amount of Loan: Not to exceed the lesser of (a) $600,000 or (b) the "Actual Cost" of the acquisition and installation of the Facilities. For purposes of this commitment, the term "Actual Cost" shall include all expenditures properly chargeable to capital account in connection with the acquisition and installation of the Facilities including, without limitation, engineering, equip- ment, foundation and installation costs, interest incurred during the construc- tion of the Facilities and expenses in- curred in securing and closing the Loan; providing, however, that any such expenditures not included in the provision of the Act entitled "Items included in cost of project" shall not be included in the Actual Cost. (2) Tax-Free Status: This commitment is issued in reliance upon the Loan qualifying as a fully tax- free obligation under the provisions of the Act so that interest on the Note will at all times be excludable for Federal income tax purposes from the gross income of the holder of the Note during the entire term of the Loan and any extensions or renewals thereof. If it is determined, on or before the date of issuance of the Note, that the Loan does not so qualify, this commitment shall be void, and if during the term of the Loan interest on the Note shall be determined not to be, or Mellon Bank ILA. -3- shall cease to be, tax-free, the rate of interest on the Loan, effective as of the date of such determination or cessation, shall increase from the rate set forth in (3)(a) below to the rate set forth in (3)(b) below. (3) Rate of Interest: (a) For so long as interest on the Note is tax-free, the Note shall, at the election of the Municipality made by written notice to Bank at least 15 days prior to the date of the purchase of the Note by the Bank (the "Purchase Date"), bear interest on out- standing balances of principal at the rate of either (i) 6% per annum, or (ii) 5 1/2% per annum, plus or minus one-half of the amount of any increase or decrease after June 14, 1973, (on which date the prime rate was 7 1/2%) in the prime rate of interest on new 90-day loans to commercial borrowers of substantial size and highest credit rating in effect at Bank from time to time, (the "Prime Rate"), in which latter case the rate of interact- in the Note shall change automatically from time to time effective as of the first day of the first month following the month in which the change in the Prime Rate occurred. (b) If during the term of the Loan interest on the Note shall be determined not to be, or shall cease to be, tax- free, the Note shall, effective as of the date of such determination or cessation, bear interest on outstanding balances of principal at a rate per annum which shall be 2% above the Prime Rate, such rate to change automatically from time to time effective as of the first day of the first month following the month in which the change in the Prime Rate occurred. (4) Terms of Payment: Interest only on outstanding balances of the principal indebtedness at the Mellon Bank N.A. -4- applicable rate set forth above, pay- able on the first day of the third month following the Purchase Date and on the first day of each third month thereafter until the first day of the twenty fourth month following the Purchase Date on which day and on the first day of each third month thereafter the Municipality shall pay or cause to be paid to Bank a sum to be applied first to interest on outstanding balances of the principal amount of the Note at the applicable rate set forth above and the remainder to the reduction of principal, which install- ment payments shall be sufficient to fully amortize the Note upon maturity. (5) Maturity: The Loan shall mature on the first day of the first month following the 12th anniversary of the date of the Note. (6) Prepayment The Municipality shall have the privi- Privilege: lege of prepaying the Loan in whole or in part at any time without payment of premium or penalty, but no partial prepayment shall alter the amount of the payments specified above. (7) Commitment Fee: The sum of $6,000.00 shall be paid to Bank as a commitment fee. Said fee shall be paid concurrently with the delivery of the Note and shall not be subject to reduction or be refundable. (8) Security: (a) The Security Interest; (b) A Note Purchase Agreement pursuant to which the Bank will, at the Municipality's option, (i) advance the entire Note Proceeds to the Municipality, on the date of issuance of the Note, such Note Proceeds to be held for appli- cation to defray the cost of the Mellon Bank N.A. -5- Facilities (and, pending such appli- cation, to be invested in obligations of, or guaranteed by, the United States or an agency thereof, but in no event to be invested in any manner which would cause the Note to be an "arbitrage bond" under Section 103 (d) of the Internal Revenue Code and the regu- lations prescribed under that Section), or (ii), upon requisitions of the Municipality approved by Servisystems and the Industry, advance Note Proceeds to Servisystems as required to defray the cost, as incurred, of acquiring and causing the Facilities to be installed on behalf of Servisystems and expenses incidental thereto. In either event, the Note Proceeds shall not exceed in the aggregate, the amount of the Loan as set forth at (1) above and Servisystems will agree to apply the Note Proceeds solely and exclusively for the above-mentioned purposes; (c) The assignment to the Bank of all sums due and to become due to the Municipality under the Agreement of Sale and under the Assignment, which assign- ment shall be accompanied by the Industry's written and unconditional guarantee of Servisystems' obligations under the Agreement of Sale and the Servisystems Note; (d) The absolute and unconditional guarantee by the Industry of completion of installation and construction of the Facilities. (9) Items to be The Municipality shall furnish Furnished: or cause to be furnished to Bank on or prior to the Purchase Date the following: (a) The instruments and documents mentioned or referred to above; • Mellon Bank N.A. -6- (b) Evidence acceptable to Bank that the Security Interest is fully perfected and is prior to all other interests in the Facilities; (c) A plot plan or survey of the Industrial Site showing the location of the Facilities; (d) A legal description of the Industrial Site sufficient for the purpose of creating the Security Interest and describing the Facilities; (e) Evidence of (i) satisfactory zoning; and (ii) the availability of all necessary permits and licenses, etc. to construct, install and operate the Facilities; (f) (i) a signature and incumbency certificates as to the members of the Municipality's governing body who will execute the Loan doc- uments on behalf of the Municipality; (ii) a certified copy of resolutions of the Municipality adopted in accordance with the provisions of the Act, authorizing the acceptance hereof, the issuance and sale of the Note, the transactions contemplated hereby to which the Municipality is a party and the execution and delivery of all instruments and documents called for herein on the part of the Municipality or necessary or appropriate for the purposes hereof; (iv) an opinion of Utah counsel,who shall be satisfactory to Bank, directed to Bank, Servisystems and the Industry, such opinion to be satisfactory in form and scope to Bank and to the effect that [a] the Municipality is duly incorporated and validly existing under the laws of the State of Utah and has all requisite power and authority to conduct its affairs, to accept this commitment, to issue and sell the Note and to carry out the terms hereof and of the Note and the transactions contemplated hereby; [b] the Municipality has fully complied with the provisions of the Act with respect to the transactions con- templated hereby to which Mellon Bank N.A. -7- the Municipality is a party; [c] the Note and income therefrom are exempt from all taxes imposed by the State of Utah and any county, municipality or other political subdivision of the State of Utah and interest on the Note is excludable for Federal income tax purposes from the gross income of the holder; [d] all instruments and documents executed by the Municipality in connection with the Loan have been duly executed and are valid and binding upon the Municipality in accordance with the respective terms of each; [e] there is no action, proceeding or investigation pending or to the knowledge of such counsel threatened (or any basis there- for known to such counsel) which questions the validity of the Note or the trans- actions contemplated hereby to which the Municipality is a party; [f] the performance of and compliance with the provisions hereof applicable to the Municipality will not result in or be in conflict with or constitute a default under any instrument, document, decree, order, statute, rule or governmental regulation applicable to the Municipality; and [g] no consent, approval, order or authorization, registration or filing with any govern- mental or public body or authority is required in connection with the acceptance hereof, the issuance of the Note and the matters contemplated here- by which relate to the Municipality; (g) (i) a certificate issued by the Secretary of State of Delaware as to Servisystems' due incorporation and good standing under the laws of the State of Delaware; and (ii) an opinion of counsel for Servisystems addressed to Bank and the Municipality satisfactory in form and scope to Bank to the effect that [a] Servisystems is a corporation duly organized, validly existing and in good standing under the laws of the Mellon Bank N.A. -8- State of Delaware and has all requisite power and authority to own and operate its properties, to carry on its business as now conducted and to carry out the terms and conditions hereof applicable to Servisystems; [b] all instruments and documents executed by Servisystems in connection with the Loan have been duly executed and are valid and binding upon Servisystems in accordance with the respective terms of each; [c] the performance of and compliance with the provisions hereof applicable to Servisystems will not result in or be in conflict with or constitute a default under any instrument, document, decree, order, statute, rule or governmental regulation applicable to Servisystems of which such counsel have knowledge; and [d] no consent, approval, order, authorization, registration, or filing with any governmental or public body or authority is required on the part of Servisystems in connection with the approval hereof and the matters re- lating to Servisystems contemplated hereby; (h) (i) a certificate issued by the Secretary of State of Utah as to the due incorporation and good standing of the Industry under the laws of the State of Utah; (ii) a certified copy of resolutions of the Industry's Board of Directors authorizing the approval hereof, the transactions contemplated hereby and the execution and delivery of all instruments and documents called for on the part of the Industry herein or necessary or appropriate for the purposes hereof; and (iii) an opinion of counsel for the Industry directed to Bank, the Municipality and Servisystems satisfactory in form and scope to Bank to the effect that [a] the Industry is a corporation duly organized, validly existing and in good standing under the laws of the State of Utah, and has all Mellon Bank KA. -9- requisite power and authority to own and operate its properties, to carry on its business as now conducted and to carry out the terms and conditions hereof applicable to the Industry; fb] all instruments and documents executed by the Industry in connection with the Loan have been duly executed and are valid and binding upon the Industry in accordance with the respec- tive terms of each; [c] there is no action, proceeding or investigation pending or to the knowledge of such counsel threatened (or any basis therefor known to such counsel) which questions the validity of the instruments and documents executed by the Industry in connection with the Loan or the trans- actions contemplated thereby; [d] the performance of and compliance with the provisions hereof applicable to the Industry will not result in or be in conflict with or constitute a default under any instrument, document, decree, order, statute, rule or governmental regulation applicable to the Industry; and [e] no consent, approval, order, authorization, registration or filing with any governmental or public body or authority is required on the part of the Industry in connection with the approval hereof and the matters con- templated hereby; (i) a certificate signed by a principal financial officer of Servi- systems setting forth in such detail as Bank may reasonably require all costs of acquisition, construction and install- ation of the Equipment and such other information with respect thereto as Bank may reasonably require; (j) evidence in form and content satisfactory to Bank that the proceeds of Note will not be used in a manner that Mellon Bank N A. -10- will cause the Note to be an "arbitrage bond" under Section 103(d) of the Internal Revenue Code and the regulations prescribed under that Section; and (k) such other instruments and documents as Bank shall reasonable require to evidence and secure the Loan and to comply with the provisions hereof and the requirements of regulatory authorities to which Bank is subject, all of which shall be satisfactory in form, content and substance to counsel for Bank. (10) Note Proceeds: The proceeds of the Note will be advanced by Bank pursuant to the aforesaid Note Purchase Agreement. (11) Municipality's Notwithstanding the foregoing, this Liability: commitment and the Note and the other instruments and documents to be delivered by the Municipality pursuant hereto shall not constitute nor give rise to a general obligation or liability of the Municipality or a charge against its general credit or taxing powers, and recourse on the Note and on the instruments and documents executed and delivered by the Municipality pursuant hereto may be had only against the aforesaid security. (12) Fees and All instruments, documents and other Expenses: items required to be furnished to Bank hereunder shall be furnished without cost to either Bank or the Municipality. Servisystems will pay or will cause to be paid all out-of-pocket expenses incurred by Bank in connection with the enforcement and collection of the Loan, including without limitation counsel fees incurred in connection with the enforcement and collection of the Loan. Mellon Bank N.A. -11- (13) Acceptance of This commitment may be accepted on Commitment: or before September 14, 1973 by signing the enclosed duplicate copy in the manner indicated below, obtaining the acceptance of Servisystems and the Industry as indicated below, and by returning such duplicate copy to Bank. (14) Termination: If the Note is not issued and purchased by Bank and all other matters contemplated hereby are not concluded prior to October 19, 1973, because of delays beyond the control of Bank, this commitment shall terminate forth- with at the close of business on October 19, 1973 without liability upon Bank. (15) Survival of The terms and conditions herein set Provisions: forth shall survive the delivery of the Note. Very truly yours, MELLON BANK, N.A. /1 By ,;47, j // % ACCEPTANCE Intending to be legally bound, each of the undersigned hereby accepts the foregoing commitment and agrees to the terms and conditions thereof insofar as such terms and conditions are applicable to it. THE CITY OF SALT "AKE CI Date: August 7, 1973 By Mayor PORTLAND CEMENT COMPANY OF UTAH Date: ' r !/'.r WHEE BRATOR SERVI TEM/S///C/�ORPORATION Date: 7/ //J By v" ROLL CALL VOTING Aye 1Nay Mr.Chairman �/� Barker Salt Lake City, Utah Harmsen , August 7 1973 Harrison )0/1, Phillips The Board. of Commissioners of Salt Lake City, Result Salt Lake County, Utah, mat in re ulcer public session on the 7th day of __August 1973, at the hour of 10:00 o'clock A .M. at the regular meeting place of said Board in th City&CountyBuilding, Salt Lake City, Utah. Said meeting was called to order and on roll call the following members were determined present: E. J. Corn Mayor James L. florkr,r, Jr.. Commissioner Stoceien. L. riarmsen Commissioner .)_nn i:us I hi7'Li: Coresiss:ioner Also Present: Herman j. Hognsen City Recorder jack L. Crellin City Attorney Absent: Conrad B. Harrison Commissioner Thereupon the :ollcwinq resolution was introduced in written form by Commissioner Phillip was read in full, and pursuant to motion made by Commissioner Barker :was adopted by the following votes • 2. Aye: E. J. Garn. Mayor Tames L. Barker, Jr.. Commissioner Stephen NI. Harmsenmm=ssioner Jennings Phillips, Tr., Commissioner Nay: NONE The resolution was thereupon signed by the Mayor and attested by the City Recorder and is as follows: A RESOLUTION OF INTENTION TO ISSUE, INDUq T'RIPI, DEVR.�i.CPMFNT REVENUE beau, AND _iUI)KI,ilNG THE EXECUTION OF A COMMITTTMENT AGREEMENT BY AND A.T O,1C_ r,PELLON BANK, N.A., PORTLAND CEMENT COMPANY OF UTAH; A UTAH CORPOR- ATION, WHEELANRATOR SERVISYSTEMS CORPORATION, A DELAWARE CORPORA- TION, AND SALT LAKE CITY, SALT LAKE COUNTY, UTAH WHEREAS, Salt Lake City, Salt Lake County, Utah (the "City") is authorized and empowered by the provisions of Chaper 17, Title 11, Utah Ccde Annotated, 1953, as amended, known as the "Utah Industrial Facilities Act" (the "Act") , to finance, acquire, own, lease or sell certain projects, includ- ing projects for the purpose of reducing, abating or preventing pollution and to protect and promote the health, welfare and safety of the citizens of Utah and for such purpose to issue • 3. industrial development revenue bonds for the purpose of defray- ing the cost of financing or acquiring, constructing, recon- structing, improving, maintaining and equipping such facilities and to finance the same for, or lease or sell the same to, others upon such terms and conditions as the City may deem advisable; and WHEREAS, in order to reduce, abate and prevent pollution and to promote the health, welfare and safety of the citizens of Utah the City proposes to acquire certain interests in land situate in the City (the "Industrial Site") , and proposes to finance, acquire, construct, improve and equip certain industrial pollution control facilities (the "Facilities") to be located en the Industrial. Site (the Industrial Site and the Facilities hereinafter referred to as the "Project") and to sell. the Project to Wheelabrator Servisystems Corporation, a Delaware corporation ("Servisystems") to be leased by Servisystems to the Portland Cement Company of Utah ("Portland") to be used by it in connection with its manufacturing operations in the City; and WHEREAS, the City has received from Mellon Bank, N.A., Pittsburg, Pennsylvania (the "Bank") , an offer of committment to purchase from the City its industrial develop- ment revenue bonds in an amount not to exceed $600,000, to • finance the acquisition and construction of the Project upon certain terms and conditions; and WHEREAS, it is deemed necessary and advisable that _ 4. the Project be undertaken at the earliest practicable date, but the Bank, Servisystems and Portland require satisfactory assurances from the City that it will undertake to acquire and construct the Project and to issue its industrial development revenue bonds in an amount not to exceed $600,000 to finance the Project; and WHEREAS, the City deems it necessary and advisable that it take such action as may be required under applicable statutory provisions to undertake such acquisition and con- struction and to authorize and issue said bonds to finance the cost of the Project to an amount not to exceed $600,000; and WHEREAS, the Bank, Servisystems and Portland have executed a form of agreement dated July 26, 1973, under which the Bank has agreed. to purchase the said bonds, Servisystems has agreed to purchase the Project from the City and Portland has agreed to lease the Project from Servisystems, all upon certain terms and conditions, and have requested the City to execute said agreement; and WHEREAS, the Act and the said agreement provide, inter alia, that the said issue of bonds shall not constitute nor give rise to a general obligation or liability of the City or be a charge against its general credit or taxing powers and the agreement further provides that the said bonds will be secured only by perfected liens on the Project, the assignment to the Bank of the proceeds of the sale by the City of the Project to Servisystems (the purchase price to be represented • 5. by a promissory note made by Servisystems payable to the City, the amount of which must equal the amounts of principal of and interest on the said bonds) , the assignment to the Bank of all sums due to the City under an assignment from Servisystems of the basic rentals payable by Portland for the lease of the Project (which assigned basic rentals must equal the amounts Servisystems will be obligated to pay to the City under the aforesaid promissory note for the purchase of the Project) , a guaranty by Portland of the City's undertakings to acquire, construct and equip the Project and of the prompt and punctual performance by Servisystems of its obligations under the agree- ment and promissory note pursuant to which it will purchase the Project from the City and a Note Purchase Agreement between the Bank and the City governing the manner in which the bond proceeds will be disbursed; and WHEREAS, it is considered necessary and desirable for the best interest of said City that it enter into the said Agreement with the Bank, Servisystems and Portland; and WHEREAS, the industrial development revenue bonds will not be sold to or held by Servisystems or Portland or any person related to them as described in Section 103(c) (7) of the Internal Revenue Code of 1954 and Section 1.103-11 of the Internal Revenue Regulations. NOW, THEREFORE, Be It Resolved by the Board of Commissioners of Salt Lake City, Salt Lake County, Utah, as follows: Section 1. That in order to insure the financing, acquisition, construction, improvement and equipping of the Project within the City, with the resulting public benefits • • 6. which will flow therefrom, it is deemed necessary and advisable that the Agreement hereinafter referred to be approved and executed for and on behalf of said City. Section 2. That the Agreement by and among the Bank, Servisystems, Portland and the City, in the form and with the contents set forth in Exhibit "A" attached hereto, be and the same is hereby approved and authorized. Section 3. That the Mayor is hereby authorized and directed to execute, and the City Recorder is hereby authorized to attest and to affix the seal of the City to, the said Agreement in the form and with the contents set forth in Exhibit "A" attached hereto. Section 4. That the peoper officers of the City and their designates are hereby authorized and directed to take all necessary steps to carry out the City's obligations and undertakings under the said Agreement and to complete the acqui- sition, construction and equipping of the Project at the earliest possible date. Section 5. That immediately after its adoption this resolution shall be signed by the Mayor and City Recorder, shall be recorded in a book kept for that purpose and shall take effect immediately. PASSED AND APPROVED this 7th day of August 1973. CITY OF SALT LAKE ITY, UTAH Mayor ATTEST: • City Reco er' • 7. (Here follows other business not pertinent to the above.) Pursuant to motion duly made and seconded, the Board of Commissioners adjourned. Mayor ATTEST: City .cord STATE OF UTAH Ss. COUNTY OF SALT LAKE I, HERMAN J . HOGENSEN, the duly qualified and acting City Recorder of Salt Lake City, Utah, do hereby certify, according to the records of said City in my official possession, that the above and foregoing is a true and correct copy of the minutes of a meeting of the Board of Commissioners of said City, including a resolution adopted at said meeting, insofar as said minutes pertain to be matters therein set out. IN WITNESS WHEREOF, I have hereunto subscribed my official signature and impressed hereon the seal of Salt Lake City, Utah, this 7th_ day of August , 1973. Reco (S E A L) EXHIBIT "A" • Y E sraE ill Mallon Square Pittsburgh,POnnsylv,nie 152?0 July 26, 1973 The City of Salt Lake City City and County Building Salt Lake City, Utah 84111 Attention: Commissioner Jennings Phillips Gentlemen: We are pleased to advise you that, subject to the terms and conditions herein set forth, we hereby approve your request that we purchase your bond (the "Note") in an amount not to exceed the aggregate principal sum of $600,000 to be issued by you under the provisions of the Utah Industrial Facilities Development Act (the "Act"). The proceeds of the Note ("Note Proceeds") will be applied in the manner hereinafter provided and the Note will be secured by (i) a first and paramount, perfected security interest (the "Security Interest") covering certain industrial pollution control facilities and related improvements (which, together with all additions thereto, substitutions therefor and replacements thereof, are hereinafter called the "Facilities") to be installed and used by Portland Cement Company of Utah (the "Industry") on behalf and as lessee of Wheelabrator Servisystems Corporation ("Servisystems") on real property situate in Salt Lake City, Utah (the "Industrial Site") . '(ii) assignments to of (l) all sums due to ynn nndpr an agreement of sale (the "Agreement of Sale") to he entered into between you and Servisystems, pursuant to which you will sell the Facilities to Servisystems in exchange for a non- recourse promissory note of Servisystems (the "Servisystems Note") in the amount of the Note providing for payments to you of amounts sufficient to pay interest on and the principal sum of the Note as and when the payment thereof becomes due and (2) all sums due to you pursuant to an assignment (the "Assign- ment") by Servisystems to you of basic rentals payable under a lease (the "Industry Lease") of the Facilities from Servisystems to the Industry, which assigned basic rentals shall be in amounts equal to Servisystems' obligations under the Servisystems Note,and-of the Industry Lease; (iii) a guaranty (the "Guaranty") by the Industry of (1) your undertakings to acquire construct and- install the Equipment -on the Industrial Site and (2) the prompt and punctual performance by Servisystems of its obligations under the Agreement of Sale and the Servisystems Note; EF-'?a 7 e • -2- and (iv) a Note Purchase Agreement (the "Note Purchase Agreement") , hereinafter mentione-'.d. This commitment is issued by us subject to (i) your acceptance hereof in the manner hereinafter provided; (ii) issuance of the Note in compliance with the Act and execution and delivery of all loan documents in the City of Pittsburgh, Pennsylvania; (iii) your compliance with all provisions hereof; and (iv) the following terms and conditions wherein you are referred to as the "Municipality", we are referred to as the "Bank", and the Note, the indebtedness evidenced thereby and all instruments and documents to be given to secure and support the same are herein sometimes collectively referred to as the "Loan"; (1) Amount of Loan: Not to exceed the lesser of (a) $600,000 or (b) the "Actual Cost" of the acquisition and installation of the Facilities. For purposes of this commitment, the term "Actual Cost" shall include all expenditures properly chargeable to capital account in connection with the acquisition and installation of the Facilities including, without limitation, engineering, equip- ment, foundation and installation costs, interest incurred during the construc- tion of the Facilities and expenses in- curred in securing and closing the Loan; providing, however, that soy such exoer,di cures not included in the provision of the Act entitled "Items included in cost of project" shall not be included in the Actual Cost. (2) Tax-Free Status: This commitment is issued in reliance upon the Loan qualifying as a fully tax- free obligation under the provisions of the Act so that interest on the Note will at all times be excludable for Federal income tax purposes from the gross income of the holder of the Note during the entire term of the Loan and any extensions or renewals thereof. If it is determined, on or before the date of issuance of the Note, that the Loan does not so qualify, this commitment shall be void, and if during the term of the Loan interest on the Note shall be determined not to be, or [t ca2 rktak,N.A. -3- shall cease to be, tax-free, the rate of interest on the Loan, effective as of the date of such determination or cessation, shall increase from the rate set forth in (3)(a) below to the rate set forth in (3)(b) below. (3) Rate of Interest: (a) For so long as interest on the Note is tax-free, the Note shall, at the election of the Municipality made by written notice to Bank at least 15 days prior to the date of the purchase of the Note by the Bank (the "Purchase Date"), bear interest on out- standing balances of principal at the rate of either (i) 6% per annum, or (1i) 5 1/2% per annum, plus or minus one-half of the amount of any increase or decrease after June 14, 1973, (on which date the prime rate was 7 1/2%) in the prime rate of interest on new 90-day loans to couuuerci_al borrowers of substantial size and highest credit rating in effect at Bank from time to time, (the "Prime Rate ')t in which latter case the rate of interrcc in the Note shall change automatically from time to time effective as of the first day of the first month following the month in which the change in the Prime Rate occurred. (b) If during the term of the Loan interest on the Note shall he determined not to be, or shall cease to be, tax- free, the Note shall , effective as of the date of such determination or cessation, bear interest on outstanding balances of principal at a rate per annum which shall be 2% above the Prime Rate, such rate to change automatically from time to time effective as of the first day of the first month following the month in which the change in the Prime Rate occurred. (4) Terms of Payment: Interest only on outstanding balances of the principal indebtedness at the meal r),71151 • -4- applicable rate set forth above, pay- able on the first day of the third month following the Purchase Date and on the first day of each third month thereafter until the first day of the twenty fourth month following the Purchase Date on which day and on the first day of each third month thereafter the Municipality shall pay or cause to he paid to Bank a sum to be applied first to interest on outstanding balances of the principal amount of the Note at the applicable rate set forth above and the remainder to the reduction of principal, which install- ment payments shall be sufficient to fully amortize the Note upon maturity. (5) Maturity: The Loan shall mature on the first day of the first month following the 12th anniversary of the date of the Note. (6) Prepayment The Municipality shall have the privi- Privilege: lege of prepaying the Loan in whole or in part at any time without payment of premium or penalty, but no partial prepayment shall alter the amount of the payments specified above (7) Commitment Fee: The sum of $6,000.00 shall be paid to Bank as a commitment fee. Said fee shall he paid concurrently with the delivery of the Note and shall not be subject to reduction or be refundable. (8) Security: (a) The Security Interest; (b) A Note Purchase Agreement pursuant to which the Bank will, at the Municipality's option, (i) advance the entire Note Proceeds to the Municipality, on the date of issuance of the Note, such Note Proceeds to be held for appli- cation to defray the cost of the -5- Facilities (and, pending such appli- Cation, to be invested in obligations of, or guaranteed by, the United States or an agency thereof, but in no event to be invested in any manner which would cause the Note to be an "arbitrage bond" under Section 103 (d) of the Internal Revenue Code and the regu- lations prescribed under that Section), or (ii), upon requisitions of the Municipality approved by Servisystems and the Industry, advance Note Proceeds to Servisystems as required to defray the cost, as incurred, of acquiring and causing the Facilities to be installed on behalf of Servisystems and expenses incidental thereto. In either event, the Note Proceeds shall not exceed in the aggregate, the amount of the Loan as set forth at (1) above and Servisystems will agree to amply the Note Proceeds solely and exclusively for the above-mentioned purposes; (c) The assignment to the Bonk of all sums due and to become due to the Municipality under the Agreement of Sale and under the Assignment, which assign- ment shall he accompanied by the Industry's writteh and unconditional guarantee of Servisystems' obligations under the Agreement of Sale and the Servisystems Note: (d) The absolute and unconditional guarantee by the Industry of completion of installation and construction of the Facilities. (9) Items to be The Municipality- shall furnish Furnished: or cause to be furnished to Bank on or prior to the Purchase Date the following: (a) The instruments and documents mentioned or referred to above; • -6- • (b) Evidence acceptable to Bank that the Security Interest is fully perfected and is prior to all other interests in the Facilities; (c) A plot plan or survey of the Industrial Site showing the location of the Facilities; (d) A legal description of the Industrial Site sufficient for the purpose of creating the Security Interest and describing the Facilities; (e) Evidence of (i) satisfactory zoning; and (ii) the availability of all necessary permits and licenses, etc. to construct, install and operate the Facilities; (f) (i) a signature and incumbency certificates as to the members of the Municipality's governing body who will execute the Loan doc- uments on behalf of the Municipality; (ii) a certified copy of resolutions of the Municipality adopted in accordance with the provisions of the Act, authorizing the acceptance hereof, the issuance and sale of the Note, the transacrinea cc- LemplaLed hereby Lc which Lie Municipality is a party and the execution and delivery of all instruments and documents called for herein on the part of the Municipality or necessary or appropriate for the purposes hereof; (iv) an opinion of Utah counsel,who shall be satisfactory to Bank, directed to Bank, Servisystems and the Industry, such opinion to be satisfactory in form and scope to Bank and to the effect that [a] the Municipality is duly incorporated and validly existing under the laws of the State of Utah and has all requisite power and authority to conduct its affairs, to accept this commitment, to issue and sell the Note and to carry out the terms hereof and of the Note and the transactions contemplated hereby; [b] the Municipality has fully complied with the provisions of the Act with respect to the transactions con- templated hereby to which -7- the Municipality is a party; [c] the Note and income therefrom are exempt from all taxes imposed by the State of Utah and any county, municipality or other political subdivision of the State of Utah and interest on the Note is excludable for Federal income tax purposes from the gross income of the holder; [d] all. instruments and documents executed by the Municipality in connection with the Loan have been duly executed and are valid and binding upon the Municipality in accordance with the respective terms of each; [e] there is no action, proceeding or investigation pending or to the knowledge of such counsel threatened (or any basis there- for known to such counsel) which questions the validity of the Note or the trans- actions contemplated hereby to which the Municipality is a party; [f] the performance of and compliance with the provisions hereof applicable to the Municipality will not result in or be in conflict with or constitute a default under any instrument, document, decree, order, statute, rule or governmental regulation applicable to the Municipality; and [g] no consent, approval, order or authorization., registration or tiling with any govern- mental or public body or authority is required in connection with the acceptance hereof, the issuance of the Note and the matters contemplated here- by which relate to the Municipality; (g) (i) a certificate issued by the Secretary of State of Delaware as to Servisystems' due incorporation and good standing under the laws of the State of Delaware; and (ii) an opinion of counsel for Servisystems addressed to Bank and the Municipality satisfactory in form and scope to Bank to the effect that [a] Servisystems is a corporation duly organized, validly existing and in good standing under the laws of the • -8- State of Delaware and has all requisite power and authority to own and operate its properties, to carry on its business as now conducted and to carry out the terms and conditions hereof applicable to Servisystems ; [b] all instruments and documents executed by Servisystems in connection with the Loan have been duly executed and are valid and binding upon Servisystems in accordance with the respective terms of each; [c] the performance of and compliance with the provisions hereof applicable to Servisystems will not result in or be in conflict with or constitute a default under any instrument, document, decree., order, statute, rule or governmental regulation applicable to Servisystems of which such counsel have knowledge; and [di no consent, approval, order, authorization, registration, or filing with any governmental or public body or authority is required on the part of Servisystems in connection with the approval hereof and the matters re- lating to Servisystems contemplated hereby; (h) (i) a certificate issued by the Secretary of State of Utah as to the due incorporation and good s+.and ing of the Industry under the laws of Lila.: State of Utah; (ii) a certified copy of resolutions of the Industry's Board of Directors authorizing the approval hereof, the transactions contemplated hereby and the execution and delivery of all instruments and documents called for on the part of the Industry herein or necessary or appropriate for the purposes hereof; and (iii) an opinion of counsel for the Industry directed to Bank, the Municipality and Servisystems satisfactory in form and scope to Bank to the effect that [a] the Industry is a corporation duly organized, validly existing and in good standing under the laws of the State of Utah, and has all -9- requisite power and authority to own • and operate its properties, to carry on its business as now conducted and to carry out the terms and conditions hereof applicable to the Industry; [b] all instruments and documents executed by the Industry in connection with the Loan have been duly executed and are valid and binding upon the Industry in accordance with the respec- tive terms of each; [c] there is no action, proceeding or investigation pending or to the knowledge of such counsel threatened (or any basis therefor known to such counsel) which questions the validity of the instruments and documents executed by the Industry in connection with the Loan or the trans- actions contemplated thereby; [d] the performance of and compliance with the provisions hereof applicable to the Industry will not result in or be in conflict with or constitute a default under any instrument, document, decree, order, statute, rule or governmental regulation applicable to the Industry; and [e] no consent, approval, order, authorization, registration or filing with any governmental or public body or authority is roquired on the part of the Industry in connection wi_m the approval hereof and the matters con- templated hereby; (i) a certificate signed by a principal financial officer of Servi- systems setting forth in such detail as Bank may reasonably require all costs of acquisition, construction and install- ation of the Equipment and such other information with respect thereto as Bank may reasonably require; (j) evidence in form and content satisfactory to Bank that the proceeds of Note will not be used in a manner that -10- will cause the Note to be an "arbitrage bend" under Section 103(d) of the Internal Revenue Code and the regulations prescribed under that Section; and (k) such other instruments and documents as Bank shall reasonable require to evidence and secure the Loan and to comply with the provisions hereof and the requirements of regulatory authorities to which Bank is subject, all of which shall be satisfactory in form, content and substance to counsel for Bank. (10) Note Proceeds: The proceeds of the Note will he advanced by Bank pursuant to the aforesaid Note Purchase Agreement. (11) Municipality's Notwithstanding the foregoing, this Liability: commitment and the Note and the other instruments and documents to be delivered by the Municipality pursuant hereto shall not constitute nor give rise to a general obligation or liability of the Municipality or a charge against its general credit or taxing powers, and recourse on the Note and on the instruments and documents executed and delivered by the Municipality pursuant hereto may be had only against the aforesaid security. (12) Fees and All instruments, documents and other Expenses: items required to be furnished to Bank hereunder shall be furnished without cost to either Bank or the Municipality. Servisystems will pay or will cause to be paid all out-of-pocket expenses incurred by Bank in connection with the enforcement and collection of the Loan, including without limitation counsel fees incurred in connection with the enforcement and collection of the Loan. -11- (1.3) Acceptance of This commitment may be accepted on Commitment: or before September 1(A, 1973 by signing ti-c enclosed duplicate copy in the manner indicated below, obtaining the acceptance of Servisystems and the Industry as indicated below, and by returning such duplicate copy to Bank. (14) Termination: If the Note is not issued and purchased by Bank and all other matters contemplated hereby are not concluded prior to October 19, 1973, because of delays beyond the control of Bank, this commitment shall terminate forth- with at the close of business on October 19, 1973 without liability upon Bank. (1.5) Survival of The terns and conditions herein set Provisions: forth shall survive the delivery of the Note. Very truly yours, MELLON BANK, N.A. By-- ACCEPTANCE Intending to be legally bound, each of the undersigned hereby accepts the foregoing commitment and agrees to the terms and conditions thereof insofar as such terms and onditions are applicable to it. THE CITY OF SALT LA CITY Date:_August 7, 1973 By_ - Mayor PORTLAND CEMENT COMPANY OF UTAH j Date: By / . WHEELABRATOR SERyyYSTEMS CORPORATION Date: 74/! 7-4 Byl'i (' . F%:sr � G