Each of the following events is a default of a loan
agreement:
(1) Failure of the Loan
Recipient to make any loan repayment when it is due and such failure shall
continue for a period of thirty (30) days.
(2) Failure to comply with the provisions of
the Agreement or in the performance or observance of any of the covenants or
actions required by the Agreement.
(3) Any warranty, representation or other
statement by, or on behalf of, the Loan Recipient contained in the Agreement or
in any information furnished in compliance with, or in reference to, the
Agreement, which is false or misleading in any material respect.
(4) An order or decree entered, with the
acquiescence of the Loan Recipient, appointing a receiver of any part of the
Project or Revenues thereof; or if such order or decree, having been entered
without the consent or acquiescence of the Loan Recipient, shall not be vacated
or discharged or stayed on appeal within sixty (60) days after the entry
thereof.
(5) Any proceeding
instituted, with the acquiescence of the Loan Recipient, for the purpose of
effecting a compromise between the Loan Recipient and its creditors or for the
purpose of adjusting the claims of such creditors, pursuant to any federal or
state statute now or hereafter enacted, if the claims of such creditors are
payable from Revenues of the Project.
(6) Any bankruptcy, insolvency or other
similar proceeding instituted by, or against, the Loan Recipient under federal
or state bankruptcy or insolvency laws now or hereafter in effect and, if
instituted against the Loan Recipient, is not dismissed within sixty (60) days
after filing.
(7) Failure to give
timely notice of default as required below when such failure shall continue for
a period of thirty (30) days.
The Loan Recipient shall give the Department immediate
written notice of an event of default. Upon any event of default and subject to
the rights of bondholders with prior liens, the Department may enforce its
rights by utilizing one or more of the following remedies:
(1) By mandamus or other proceeding at law or
in equity, cause to establish and collect fees and charges for use of the
Project and to require the Loan Recipient to fulfill the Agreement.
(2) By action or suit in equity, require the
Loan Recipient to account for all moneys received from the Department or from
the ownership of the Project and to account for the receipt, use, application
or disposition of the Revenues.
(3)
By action or suit in equity, enjoin any acts or things which may be unlawful or
in violation of the rights of the Department.
(4) By applying to a court of competent
jurisdiction, cause to appoint a receiver to manage the Project, establish and
collect fees and charges, and apply the Revenues to the reduction of the
obligations under the Loan Agreement.
(5) By certifying to the Tax Commissioner
delinquency on loan repayments, the Department may intercept the delinquent
amount, plus ten (10) percent annual penalty interest on the amount due to the
Department, from any unobligated funds due to the Loan Recipient under any
revenue or tax sharing fund established by the State. Penalty interest shall
accrue on any amount due and payable beginning on the thirtieth
(30th) day following the date upon which payment is
due. The penalty interest shall be compounded monthly.
(6) By notifying financial market credit
rating agencies.
(7) By
administratively charging or suing for payment of amounts due, or becoming due,
plus ten (10) percent annual penalty interest which shall accrue on any amount
due and payable beginning on the thirtieth (30th)
day after such notification by the Department, together with all costs of
collection, including attorneys' fees. The penalty interest shall be compounded
monthly.
(8) By accelerating the
repayment schedule or increasing the interest rate.
(9) By withholding payments to the Loan
Recipient.
(10) By terminating the
Agreement, after providing thirty (30) days written notice of such intent to
terminate the Agreement. Such termination will not affect the duty of the Loan
Recipient to repay loan funds paid thus far.
No delay or omission to exercise any right or power accruing
upon event of default shall impair any such right or power or shall be
construed to be a waiver of any such default or acquiescence therein, and every
such right and power may be exercised as often as may be deemed expedient. No
waiver of any default under the Loan Agreement shall extend to or affect any
subsequent event of default, whether of the same or different provision of the
Loan Agreement, or shall impair consequent rights or remedies.
