LOAN AGREEMENT
Among
GE CAPITAL PUBLIC FINANCE, INC.
as Lender
and
BUSINESS FINANCE AUTHORITY
OF THE STATE OF NEW HAMPSHIRE
as Issuer
and
ELEXSYS INTERNATIONAL, INC.
as Borrower
Dated as of December 1, 1996
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THIS AGREEMENT DOES NOT CONSTITUTE AN INDEBTEDNESS OF THE STATE OF NEW
HAMPSHIRE OR OF THE ISSUER EXCEPT TO THE EXTENT PERMITTED BY NEW HAMPSHIRE RSA
CHAPTER 162-I. ALL AMOUNTS OWED HEREUNDER ARE PAYABLE ONLY FROM THE SOURCES
EXPRESSLY PROVIDED HEREIN, AND NO PUBLIC FUNDS MAY BE USED FOR THAT PURPOSE.
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ii
Table of Contents
Page
ARTICLE I DEFINITIONS AND EXHIBITS............................................................................. 2
Section 1.01. Definitions............................................................................. 2
Section 1.02. Exhibits................................................................................ 4
Section 1.03. Rules of Construction................................................................... 5
Section 1.04. Combined Documents...................................................................... 5
ARTICLE II FINANCING OF PROJECT AND TERMS OF LOAN.............................................................. 5
Section 2.01. Completion of Project................................................................... 5
Section 2.02. Loan.................................................................................... 6
Section 2.03. Interest................................................................................ 6
Section 2.04. Payments................................................................................ 6
Section 2.05. Payment on Non-Business Days............................................................ 7
Section 2.06. Loan Payments To Be Unconditional....................................................... 7
Section 2.07. Prepayments............................................................................. 7
ARTICLE III CONDITIONS PRECEDENT............................................................................... 8
ARTICLE IV LIMITED OBLIGATION OF ISSUER; RIGHTS OF ISSUER; COVENANTS OF ISSUER................................. 10
Section 4.01. Limited Obligation...................................................................... 10
Section 4.02. Rights and Duties of Issuer............................................................. 10
Section 4.03. Costs and Expenses of Issuer............................................................ 11
Section 4.04. Matters to be Considered by Issuer...................................................... 11
Section 4.05. Actions by Issuer....................................................................... 12
Section 4.06. Indemnification by Borrower............................................................. 12
Section 4.07. Covenants of Issuer..................................................................... 12
ARTICLE V REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWER................................................ 12
ARTICLE VI LETTER OF CREDIT.................................................................................... 15
ARTICLE VII AFFIRMATIVE COVENANTS OF BORROWER.................................................................. 16
Section 7.01. Reporting Requirements.................................................................. 16
Section 7.02. Books and Records; Inspection and Examination........................................... 17
Section 7.03. Compliance With Laws; Environmental Indemnity........................................... 17
Section 7.04. Payment of Taxes and Other Claims....................................................... 18
Section 7.05. Maintenance of Project.................................................................. 18
Section 7.06. Insurance............................................................................... 18
Section 7.07. Preservation of Corporate Existence..................................................... 19
Section 7.08. Performance by Lender................................................................... 19
ARTICLE VIII NEGATIVE COVENANTS OF BORROWER.................................................................... 20
Section 8.01. Lien.................................................................................... 20
Section 8.02. Sale of Assets.......................................................................... 20
Section 8.03. Consolidation and Merger................................................................ 20
Section 8.04. Accounting.............................................................................. 20
Section 8.05. Transfers............................................................................... 21
Section 8.06. Use of the Project...................................................................... 21
ARTICLE IX [Reserved].......................................................................................... 21
ARTICLE X ASSIGNMENT AND SELLING............................................................................... 21
Section 10.01. Assignment by Lender................................................................... 21
Section 10.02. No Sale or Assignment by Borrower...................................................... 22
ARTICLE XI EVENTS OF DEFAULT AND REMEDIES...................................................................... 22
Section 11.01. Events of Default...................................................................... 22
Section 11.02. Remedies on Default.................................................................... 23
Section 11.03. [Reserved]............................................................................. 24
Section 11.04. No Remedy Exclusive.................................................................... 24
Section 11.05. Late Charge............................................................................ 24
ARTICLE XII MISCELLANEOUS...................................................................................... 24
Section 12.01. Costs and Expenses of Lender........................................................... 24
Section 12.02. Disclaimer of Warranties............................................................... 25
Section 12.03. Notices................................................................................ 25
Section 12.04. Further Assurance and Corrective Instruments........................................... 25
Section 12.05. Binding Effect; Time of the Essence.................................................... 25
Section 12.06. Severability........................................................................... 25
Section 12.07. Amendments............................................................................. 25
Section 12.08. Execution in Counterparts.............................................................. 26
Section 12.09. Applicable Law......................................................................... 26
Section 12.10. Captions............................................................................... 26
Section 12.11. Entire Agreement....................................................................... 26
Section 12.12. Usury.................................................................................. 26
Section 12.13. Waiver of Jury Trial................................................................... 26
30
LOAN AGREEMENT (REAL ESTATE)
Lender: GE Capital Public Finance, Inc.
.........Suite 470
.........8400 Xxxxxxxxxx Xxxx Xxxx.
.........Xxxxxxxxxxx, XX 00000
.........Telephone: (000) 000-0000
.........Telecopier: (000) 000-0000
Issuer: Business Finance Authority of the State of New Hampshire
.........14 Xxxxx Xxxxxx, Xxxxx 000
.........Xxxxxxx, XX 00000
.........Telephone: (000) 000-0000
.........Telecopier: (000) 000-0000
Borrower: .........Elexsys International, Inc.
.........41 Xxxxx Xxxxxx
.........Xxxxxx, XX 00000
.........Telephone: (000) 000-0000
.........Telecopier: (000) 000-0000
THIS LOAN AGREEMENT dated as of December 1, 1996 (this "Agreement")
among GE Capital Public Finance, Inc., a Delaware corporation, as lender (with
its successors and assigns, "Lender"), Business Finance Authority of the State
of New Hampshire, a body corporate and politic as an agency of the State of New
Hampshire (the "State"), as issuer ("Issuer"), and Elexsys International, Inc.,
a Delaware corporation, as borrower ("Borrower").
WHEREAS, Issuer is authorized and empowered under the laws of the
State, including New Hampshire RSA Chapter 162-I (the "Act"), to enter into
financing documents and security documents with respect to indebtedness of
Issuer to be used to finance eligible projects as described in the Act; and
WHEREAS, in furtherance of the purposes of the Act, Issuer proposes to
finance all or a portion of the Project (as hereinafter defined) pursuant to
this Agreement by obtaining a loan from Lender and lending the proceeds thereof
to Borrower; and
WHEREAS, Borrower proposes to borrow the proceeds of the loan made by
Lender to Issuer upon the terms and conditions set forth herein to finance the
Project; and
WHEREAS, Borrower shall make Loan Payments (as hereinafter defined)
directly to Lender as assignee of Issuer; and
WHEREAS, this Agreement shall not be deemed to constitute a debt or
liability or moral obligation of the State or any political subdivision thereof,
or a pledge of the faith and credit or taxing power of the State or any
political subdivision thereof, but shall be a special obligation of Issuer
payable solely from the Loan Payments payable hereunder by Borrower to Lender as
assignee of Issuer.
NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged, and in consideration of the premises contained in this
Agreement, Lender, Issuer and Borrower agree as follows:
ARTICLE I
DEFINITIONS AND EXHIBITS
Section 1.01. DefinitionsDefinitions. The following terms used herein
will have the meanings indicated below unless the context clearly requires
otherwise:
"Agreement" means this Agreement, including all exhibits hereto, as any
of the same may be supplemented or amended from time to time in accordance with
the terms hereof.
"Bank" means Sanwa Bank California, the issuer of the Letter of Credit.
"Borrower" means Elexsys International, Inc., a Delaware corporation.
"Business Day" means a day other than a Saturday or Sunday on which
banks are generally open for business in New York, New York.
"Certificate of Acceptance" means a Certificate of Acceptance, in
substantially the form set forth as Exhibit B hereto, whereby Borrower
acknowledges receipt in good condition of certain portions of the Project
identified therein and confirms the date of delivery thereof and certain other
matters.
"Code" means, collectively, the Internal Revenue Code of 1986, as
amended, and United States Treasury regulations promulgated thereunder.
"Default" means an event that, with giving of notice or passage of time
or both, would constitute an Event of Default as provided in Article XI hereof.
"Determination of Taxability" means any determination, decision or
decree by the Commissioner of Internal Revenue, or any District Director of
Internal Revenue or any court of competent jurisdiction, or an opinion of
counsel qualified in such matters obtained by Lender, that an Event of
Taxability shall have occurred. A Determination of Taxability also shall be
deemed to have occurred on the first to occur of the following:
(a) the date when Borrower files any statement, supplemental
statement, or other tax schedule, return or document, which discloses
that an Event of Taxability shall have occurred; or
(b) the effective date of any federal legislation enacted
after the date of this Agreement or promulgation of any income tax
regulation or ruling by the Internal Revenue Service that causes an
Event of Taxability after the date of this Agreement.
"Escrow Agent" means National City Bank of Minneapolis, as escrow agent
under the Escrow Agreement, and its successors and assigns permitted under the
Escrow Agreement.
"Escrow Agreement" means the Escrow Agreement dated as of December 1,
1996, among Lender, Issuer, Borrower and Escrow Agent and, upon execution
thereof in accordance with the terms of the Escrow Agreement, the Bank.
"Escrow Fund" means the fund established and held by Escrow Agent
pursuant to the Escrow Agreement.
"Event of Taxability" means, if as the result of any act, failure to
act or use of the proceeds of the Loan, a change in use of the Project or any
misrepresentation or inaccuracy in any of the representations, warranties or
covenants contained in this Agreement or the Statement as to Tax Exempt Status
by Issuer or Borrower, or the enactment of any federal legislation after the
date of this Agreement or the promulgation of any income tax regulation or
ruling by the Internal Revenue Service after the date of this Agreement, the
Interest is or becomes includable in Lender's gross income for federal income
tax purposes.
"Gross-Up Rate" means, with respect to any Interest payment (including
payments made prior to the Event of Taxability), the rate necessary to calculate
an additional payment in an amount sufficient such that the sum of the Interest
payment plus the additional payments would, after reduced by the federal tax
(including interest and penalties) actually imposed thereon, equal the amount of
the Interest payment.
"Interest" means the portion of any Loan Payment designated as and
comprising interest as shown in Exhibit A hereto.
"Issuer" means the Business Finance Authority of the State of New
Hampshire, acting as issuer under this Agreement.
"Issuer's Service Charge" means payment to the issuer for its own use
of $20,250, payable on the date of execution and delivery hereof.
"Lender" means (i) GE Capital Public Finance, Inc., acting as lender
under this Agreement, (ii) any surviving, resulting or transferee corporation of
GE Capital Public Finance, Inc. and (iii) except where the context requires
otherwise, any assignee(s) of Lender.
"Letter of Credit" means the irrevocable standby letter of credit to be
issued by Bank in the initial amount of $2,742,727.50 in the form attached
hereto as Exhibit E, subject to reduction in accordance with Article VI and
Schedule 1 hereof.
"Loan" means the loan from Issuer to Borrower pursuant to this
Agreement.
"Loan Payments" means the loan payments payable by Borrower pursuant to
the provisions of this Agreement as specifically set forth in Exhibit A hereto.
As provided in Article II hereof, Loan Payments shall be payable by Borrower
directly to Lender, as assignee of Issuer, in the amounts and at the times as
set forth in Exhibit A hereto.
"Loan Proceeds" means the total amount of money to be paid pursuant to
Section 2.02 hereof by Lender to Escrow Agent for deposit and application in
accordance with the Escrow Agreement.
"Prepayment Amount" means the amount which Borrower must pay or cause
to be paid to Lender as assignee of Issuer in order to prepay the Loan, as
provided in Section 2.07 hereof, such amounts being 102% of the outstanding
Principal at the time of the prepayment, plus accrued interest and all other
amounts then due and owing hereunder.
"Principal" means the portion of any Loan Payment designated as and
comprising principal as set forth in Exhibit A hereto.
"Project" means the acquisition and renovation of certain manufacturing
facilities located at 00 Xxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxxxxx to be used in
connection with the Borrower's operations (including, to the extent permitted
pursuant to the Code without jeopardizing the tax-exempt status of the Interest,
certain items originally financed through internal advances of Borrower in
anticipation of obtaining permanent financing through Issuer).
The word "Project" also refers to the facilities which result or have
resulted from the foregoing activities.
"Project Costs" means the costs of carrying out the Project, including
repayment of external loans and internal advances for the same and including
interest prior to and during construction, but excluding general administrative
expenses, overhead of the Institution and interest on internal advances.
"State" means the State of New Hampshire.
"Statement as to Tax Exempt Status" means Borrower's Statement as to
Tax Exempt Status of the Loan of even date herewith.
"Substitute Bank" means the issuer of a Substitute Letter of Credit,
which issuer must be acceptable to Lender in its sole discretion.
"Substitute Letter of Credit" means an irrevocable standby letter of
credit in the form attached hereto as Exhibit E, in the amount required by
Article VI and Schedule 1 hereof, and issued by a Substitute Bank.
"UCC" means the Uniform Commercial Code as adopted and in
effect in the State.
Section 1.02. ExhibitsExhibits. The following schedule and exhibits are
attached hereto and made a part hereof:
Schedule 1: Schedule of Letter of Credit Reductions.
Schedule 2: Prohibited Assignees.
Exhibit A: Form of Schedule of Project and Loan Payments describing the
Project and setting forth the Loan Payments and Prepayment Prices.
Exhibit B: Form of Certificate of Acceptance.
Exhibit C: Form of opinion of counsel to Borrower (which may be
delivered as one or more opinions from separate counsel, provided that
collectively the form and substance thereof is consistent with Exhibit C).
Exhibit D: Form of opinion of bond counsel.
Exhibit E: Form of Letter of Credit.
Exhibit F: Form of Opinion of Counsel to Bank.
Section 1.03. Rules of ConstructionRules of Construction. (a) The
singular form of any word used herein, including the terms defined Section 1.01
hereof, shall include the plural, and vice versa. The use herein of a word of
any gender shall include correlative words of all genders.
(b) Unless otherwise specified, references to Articles, Sections and
other subdivisions of this Agreement are to the designated Articles, Sections
and other subdivision of this Agreement as originally executed. The words
"hereof," wherein, "hereunder" and words of similar import refer to this
Agreement as a whole.
(c) The headings or titles of the several articles and sections shall
be solely for convenience of reference and shall not affect the meaning,
construction or effect of the provisions hereof.
Section 1.04. Combined DocumentsCombined Documents. This Agreement, the
Escrow Agreement and the exhibits hereto together constitute the Financing
Document and the Security Document under the Act, and as evidence of
indebtedness, this Agreement and the exhibits hereto constitute a Bond under the
Act.
ARTICLE II
FINANCING OF PROJECT AND TERMS OF LOAN
Section 2.01. Completion of ProjectCompletion of Project. The Borrower
has acquired the Project site and building thereon prior to the execution and
delivery of this Agreement and will substantially complete the Project no later
than September 30, 1997. Borrower shall bear the risk of loss with respect to
any loss or claim relating to any portion of the Project and shall be liable in
respect of its duties and obligations in accordance with any contract entered
into in connection with the Project, and neither Lender nor Issuer shall assume
any such risk of loss or liability.
Section 2.02. LoanLoan. Lender hereby agrees, subject to the terms and
conditions of this Agreement, to make a loan to Issuer in the amount of
$2,700,000; Issuer hereby agrees, subject to the terms and conditions of this
Agreement, to borrow such amount from Lender and to lend such amount to
Borrower; and Borrower hereby agrees to borrow such amount from Issuer. Upon
fulfillment of the conditions set forth in Article III hereof, Lender shall
deposit the Loan Proceeds on behalf of Issuer in the Escrow Fund to be held,
invested and disbursed as provided in the Escrow Agreement. Issuer's obligation
to repay the loan from Lender, and Borrower's obligation to repay the Loan,
shall commence, and interest shall begin to accrue, on the date that Loan
Proceeds are deposited in the Escrow Fund.
Section 2.03. InterestInterest. The principal amount of the loan from
Lender to Issuer and the Loan hereunder outstanding from time to time shall bear
interest (computed on the basis of actual days elapsed in a 360-day year) at the
rate of 6.33% per annum. Interest accruing on the principal balance of such
loans outstanding from time to time shall be payable as provided in Exhibit A
hereto and upon earlier demand in accordance with the terms hereof or prepayment
in accordance with Section 2.07 hereof. Upon the occurrence of a Determination
of Taxability, (i) Borrower shall, with respect to future interest payments,
begin making Loan Payments calculated at the Gross-Up Rate and (ii), in
addition, Borrower shall make within 30 days of demand of Lender a payment to
Lender sufficient to supplement prior Loan Payments to the Gross-Up Rate.
Section 2.04. PaymentsPayments. Issuer shall pay the principal of,
premium, if any in accordance with Section 2.07 hereof, and interest on the loan
from Lender to Issuer, but only out of the amounts paid by Borrower pursuant to
this Agreement. Borrower shall pay to Lender, as assignee of Issuer, Loan
Payments, in the amounts and on the dates set forth in Exhibit A hereto. As
security for its obligation to pay the principal of, premium, if any in
accordance with Section 2.07 hereof, and interest on the loan from Lender,
Issuer assigns to Lender all of Issuer's right to receive Loan Payments from
Borrower hereunder, all of Issuer's rights hereunder, and Issuer irrevocably
constitutes and appoints Lender and any present or future officer or agent of
Lender as its lawful attorney, with full power of substitution and
resubstitution, and in the name of Issuer or otherwise, to collect the Loan
Payments and any other payments due hereunder and to xxx in any court for such
Loan Payments or other payments, to exercise all rights hereunder, and to
withdraw or settle any claims, suits or proceedings pertaining to or arising out
of this Agreement upon any terms; provided, however, that such assignment shall
not include Issuer's rights under Article IV and Section 7.06(d) hereof and its
right to notice pursuant to Section 12.03 hereof. Such Loan Payments and other
payments shall be made by Borrower directly to Lender, as Issuer's assignee, and
shall be credited against Issuer's payment obligations hereunder. No provision,
covenant or agreement contained in this Agreement or any obligation herein
imposed on Issuer, or the breach thereof, shall constitute or give rise to or
impose upon Issuer a pecuniary liability, a charge upon its general credit or a
pledge of its general revenues. In making the agreements, provisions and
covenants set forth in this Agreement, Issuer has not obligated itself except
with respect to the application of the Loan Payments to be paid by Borrower
hereunder. All amounts required to be paid by Borrower hereunder shall be paid
in lawful money of the United States of America in immediately available funds.
No recourse shall be had by Lender or Borrower for any claim based on this
Agreement against any director, officer, employee or agent of Issuer alleging
personal liability on the part of such person, unless such claim is based on the
willful dishonesty of or intentional violation of law by such person.
Section 2.05. Payment on Non-Business DaysPayment on Non-Business Days.
Whenever any payment to be made hereunder shall be stated to be due on a day
which is not a Business Day, such payment may be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of interest or the fees hereunder, as the case may be.
Section 2.06. Loan Payments To Be UnconditionalLoan Payments To Be
Unconditional. The obligations of Borrower to make the Loan Payments required
under this Article II and to make other payments hereunder and to perform and
observe the covenants and agreements contained herein shall be absolute and
unconditional in all events, without abatement, diminution, deduction, setoff or
defense for any reason, including (without limitation) any damage to or defect
in the Project or any accident, condemnation, destruction or unforeseen
circumstances. Notwithstanding any dispute between Borrower and any of Issuer,
Lender, any vendor or any other person, Borrower shall make all Loan Payments
when due and shall not withhold any Loan Payments pending final resolution of
such dispute, nor shall Borrower assert any right of set-off or counterclaim
against its obligation to make such payments required under this Agreement.
Section 2.07. PrepaymentsPrepayments. (a) Borrower may, in its
discretion, prepay the Loan in whole at any time after the third anniversary of
the date hereof by paying the applicable Prepayment Amount.
(b) Borrower shall prepay the Loan in whole or in part at any time
pursuant to Article IX hereof by paying the applicable Prepayment Amount.
(c) Borrower shall prepay the Loan in full immediately upon demand of
Lender after the occurrence and during the continuance of an Event of Default as
set forth in Article XI hereof by paying the applicable Prepayment Amount.
(d) Borrower shall prepay the Loan in full immediately upon demand of
Lender after the occurrence of a Determination of Taxability by paying the
applicable Prepayment Amount, plus an amount necessary to supplement the prior
Loan Payments to the Gross-Up Rate.
(e) Borrower shall prepay the Loan in full immediately upon demand of
Lender if the Letter of Credit is not renewed or replaced in accordance with the
provisions of Article VI.
(f) The Loan shall be repaid in part with funds remaining in the Escrow
Fund upon termination of the Escrow Agreement, as provided in Sections 2.03 or
2.04 of the Escrow Agreement, without premium or penalty.
(g) If Lender or any assignee of Lender assigns this Agreement to a
competitor of Borrower (whether or not such competitor is listed in Schedule 2),
as reasonably determined by Borrower, Borrower may prepay the Loan in full
without premium or penalty by paying the outstanding principal at the time of
the prepayment plus accrued interest and all other amounts then due and owing
hereunder.
Upon any prepayment in part of the Loan, the prepayment shall be
applied first to Interest accrued thereon and next to Principal in the inverse
order of maturity.
ARTICLE III
CONDITIONS PRECEDENT
Lender's agreement to make the loan to Issuer hereunder, Issuer's
agreement to accept the loan and to make the loan to Borrower hereunder and
Lender's agreement to deposit the Loan Proceeds in the Escrow Fund, shall be
subject to the condition precedent that Lender and Issuer shall have received
all of the following, each in form and substance satisfactory to Lender and
Issuer:
(a) This Agreement, properly executed on behalf of Issuer, Borrower and
Lender, and each of the Exhibits hereto properly completed.
(b) The Statement as to Tax Exempt Status, properly executed on behalf
of Borrower.
(c) The Escrow Agreement, properly executed on behalf of Issuer,
Lender, Borrower, Escrow Agent and Bank.
(d) A certificate of an authorized officer of Borrower, certifying as
to (i) the resolutions authorizing the execution, delivery and performance of
this Agreement, the Escrow Agreement and the Statement as to Tax Exempt Status
and any related documents, and (ii) the signatures of the officers or agents of
Borrower authorized to execute and deliver this Agreement, the Escrow Agreement
and the Statement as to Tax Exempt Status and other instruments, agreements and
certificates on behalf of Borrower.
(e) Currently certified copies of the certificate of incorporation of
Borrower.
(f) A Certificate of Good Standing issued as to Borrower by the
Secretary of the State of the state of Borrower's formation, not more than
thirty (30) days prior to the date hereof.
(g) A completed and executed Form 8038 or evidence of filing thereof
with the Secretary of Treasury.
(h) A resolution or evidence of other official action taken by or on
behalf of Issuer to authorize the transactions contemplated hereby.
(i) Evidence that the financing of the Project has been approved by the
"applicable elected representative" of State after a public hearing held upon
reasonable notice.
(j) An opinion of counsel to Borrower, addressed to Lender and Issuer,
substantially in the form attached hereto as Exhibit C (which may be delivered
as one or more opinions from separate counsel, provided that collectively the
form and substance thereof is consistent with Exhibit C).
(k) An opinion of bond counsel, addressed to Lender, Issuer and
Borrower, substantially in the form attached hereto as Exhibit D.
(l) Payment of Lender's fees, commissions and expenses required by
Section 12.01 hereof.
(m) Payment of Issuer's fees, commissions and expenses required by
Section 4.03 hereof.
(n) A copy of the notice of the name, address and telephone number of
Lender, as the institution providing construction funds, posted at the Project
site by the Borrower or its agent and certified as to its posting date, all in
compliance with New Hampshire RSA 447:12-b.
(o) A copy of a Phase I environmental audit on the Project site with no
adverse findings and a copy of a Phase II audit, if completed.
(p) A resolution of the Governor and Council of New Hampshire making
the findings required by Section 9 of the Act.
(q) A no arbitrage certification of Issuer pursuant to Treas. Reg.
ss.1.148-2(b)(2).
(r) Any other documents or items reasonably required by Lender or
Issuer.
Lender's agreement to authorize any disbursement from the Escrow Fund
shall be subject to the further conditions precedent that on the date thereof:
(s) Lender shall have received each of the items required for a
disbursement pursuant to the Escrow Agreement;
(t) Lender shall have received in form and substance satisfactory to
Lender invoices and bills of sale relating to the Project, evidence of payment
thereof and, if applicable, evidence of official intent to reimburse such
payment as required by the Code;
(u) the representations and warranties contained in Article V hereof
are correct on and as of the date of such loan, as though made on and as of such
date, except to the extent that such representations and warranties relate
solely to an earlier date and except to the extent otherwise disclosed in
writing to Lender specifically referencing this paragraph and, in the case of
any such exception, is acceptable to Lender;
(v) no event has occurred and is continuing, or would result from such
loan to Issuer or the Loan which constitutes a Default, an Event of Default or a
Determination of Taxability; and
(w) Lender shall have received the Letter of Credit substantially in
the form of Exhibit E and an opinion of counsel to the Bank substantially in the
form of Exhibit F.
ARTICLE IV
LIMITED OBLIGATION OF ISSUER; RIGHTS OF ISSUER;
COVENANTS OF ISSUER
Section 4.01. Limited ObligationLimited Obligation. Under no
circumstances shall Issuer be obligated directly or indirectly to pay costs of
the Project, principal of or premium, if any, and interest on the Loan, or
expenses of operation, maintenance and upkeep of the Project except from Loan
Proceeds, exclusive of funds received hereunder by Issuer for its own use. This
Agreement does not create any debt of the State with respect to the Project
other than a special obligation of Issuer acting on behalf of the State pursuant
to the Act. Nothing contained herein shall in any way obligate the State to
raise any money by taxation or use other public funds for any purpose in
relation to the Project. Neither the State nor Issuer shall pay or promise to
pay any debt or meet any financial obligation to any person at any time in
relation to the Project except (i) from moneys received or to be received under
the provisions hereof or derived from the exercise of Issuer's right hereunder,
other than moneys received for its own purposes, or (ii) as may be required by
law other than the provisions of the Act. Nothing contained in this Agreement
shall be construed to require or authorize Issuer to operate the Project itself
or to conduct any business enterprise in connection therewith.
Section 4.02. Rights and Duties of IssuerRights and Duties of Issuer.
(a) Remedies of Issuer. Notwithstanding any contrary provision in this
Agreement, Issuer shall have the right to take any action or make any decision
with respect to proceedings for indemnity against the liability of Issuer and
for collection or reimbursement from sources other than moneys or property held
under this Agreement or subject to the lien hereof. Issuer may enforce its
rights under this Agreement which have not been assigned to Lender by legal
proceedings for the specific performance of any obligation contained herein or
for the enforcement of any other appropriate legal or equitable remedy, and may
recover damages caused by any breach by Borrower of its obligations to Issuer
under this Agreement, including court costs, reasonable attorney's fees and
other costs and expenses incurred in enforcing such obligations.
(b) Limitations on Actions. Issuer shall not be required to monitor the
financial condition of Borrower or the physical condition of the Project and,
unless otherwise expressly provided, shall not have any responsibility with
respect to notices, certificates or other documents filed with it hereunder.
Issuer shall not be required to take notice of any breach or default except when
given notice thereof by Lender. Issuer shall not be responsible for the payment
of any rebate to the United States under IRC ss. 148(f). Issuer shall not be
required to take any action unless indemnity reasonably satisfactory to it is
furnished for expenses or liability to be incurred therein (other than the
giving of notice). Issuer, upon written request of Lender, and upon receipt of
reasonable indemnity for expenses or liability, shall cooperate to the extent
reasonably necessary to enable Lender to exercise any power granted to Lender by
this Agreement. Issuer shall be entitled to reimbursement pursuant to Section
4.03 to the extent that it acts without previously obtaining full indemnity.
(c) Responsibility. Issuer shall be entitled to the advice of counsel
(who may be counsel for any party, and shall be wholly protected as to any
action taken or omitted to be taken in good faith in reliance on such advice.
Issuer may rely conclusively on any notice, certificate or other document
furnished to it under this Agreement and reasonably believed by it to be
genuine. Issuer shall not be liable for any action taken by it in good faith and
reasonably believed by it to be within the discretion or power conferred upon
it, or in good faith omitted to be taken by it and reasonably believed to be
beyond such discretion or power, or taken by it pursuant to any direction or
instruction by which it is governed under this Agreement or omitted to be taken
by it by reason of the lack of direction or instruction required for such action
under this Agreement, or be responsible for the consequences of any error of
judgment reasonably made by it. When any payment, consent or other action by
Issuer is called for by this Agreement, Issuer may defer such action pending
such investigation or inquiry or receipt of such evidence, if any, as it may
require in support thereof. A permissive right or power to act shall not be
construed as a requirement to act, and no delay in the exercise of a right or
power shall affect the subsequent exercise thereof. Issuer shall in no event be
liable for the application or misapplication of funds, or for other acts or
defaults by any person or entity except by its own directors, officers and
employees. No recourse shall be had by Borrower or Lender for any claim based on
this Agreement against any director, officer, employee or agent of Issuer unless
such claim is based upon the bad faith, fraud or deceit of such person. No
covenant, obligation or agreement of Issuer contained in this Agreement shall be
deemed to be a covenant, obligation or agreement of any present or future
director, officer, employee or agent of Issuer in his individual capacity, and
no person executing this Agreement shall be liable personally thereon or be
subject to any personal liability or accountability by reason of the issuance
thereof.
Section 4.03. Costs and Expenses of IssuerCosts and Expenses of Issuer.
Borrower shall pay when due the Issuer's Service Charge and shall prepay or
reimburse Issuer within thirty (30) days after notice for all expenses
(including reasonable attorney's fees) incurred by Issuer in connection with the
execution, delivery, performance and enforcement under this Agreement and all
expenses reasonably incurred or advances reasonably made in the exercise of
Issuer's rights or their performance of its obligations hereunder. Any fees,
expenses, reimbursements or other charges which Issuer may be entitled to
receive from the Borrower hereunder, if not paid within ten (10) days of when
they are due, shall bear a late charge equal to 5% of the amount overdue, and if
not paid within sixty (60) days, shall bear interest at 12% per annum.
Section 4.04. Matters to be Considered by IssuerMatters to be
Considered by Issuer. In approving, concurring in or consenting to action or in
exercising any discretion or in making any determination under this Agreement,
Issuer may consider the interests of the public, which shall include the
anticipated effect of any transaction on tax revenues and employment, as well as
the interests of the other parties hereto; provided, however, nothing herein
shall be construed as conferring on any person other than the other parties any
right to notice, hearing or participation in Issuer's consideration, and nothing
in this section shall be construed as conferring on any of them any right
additional to those conferred elsewhere herein. Subject to the foregoing, Issuer
will not unreasonably withhold any approval or consent to be given by it
hereunder.
Section 4.05. Actions by IssuerActions by Issuer. Any action which may
be taken by Issuer hereunder shall be deemed sufficiently taken if taken on its
behalf by its Chairman, its Vice Chairman or its Executive Director or by any
other director, officer or agent whom it may designate from time to time.
Section 4.06. Indemnification by BorrowerIndemnification by Borrower.
Borrower, regardless of any agreement to maintain insurance, shall indemnify and
save harmless, to the fullest extent permitted by law, Issuer and its directors,
officers, employees and agents from and against (a) any and all claims by or on
behalf of any person arising out of (1) any condition of the Project, or (2) the
acquisition, construction, reconstruction, improvement, use, occupancy or
operation of the Project or any work or anything whatsoever done or omitted to
be done on or about the Project, or (3) any accident, injury or damage
whatsoever to any person occurring on or about the Project, or (4) any breach or
default by Borrower of or in any of its obligations hereunder, or (5) any act or
omission of Borrower or any of its agents, contractors, servants, employees or
licensees, or (6) the offering, issuance, sale or any resale of this Agreement
or the Loan, but only to the extent permitted by law, and (b) any and all costs,
counsel fees, expenses or liabilities reasonably incurred in connection with any
such claim or any action or proceeding brought thereon. In case any action or
proceeding is brought against Issuer or any such director, officer, employee or
agent by reason of any such claim, Borrower upon notice from the affected party
shall resist or defend such action or proceeding. Subject to the foregoing, the
Issuer shall cooperate and join with Borrower, at the expense of Borrower, as
may be required in connection with any action or defense by Borrower.
Section 4.07. Covenants of IssuerCovenants of Issuer.
Issuer covenants for the benefit of Lender, as follows:
(a) Issuer will not pledge, mortgage or assign this Agreement (except
for the pledge, mortgage or assignment of rights or privileges not assigned to
Lender) or its duties and obligations hereunder to any person, firm or
corporation, except as provided under the terms hereof.
(b) Issuer will submit or cause to be submitted to the Secretary of the
Treasury a Form 8038 (or other information reporting statement) at the time and
in the form required by the Code.
ARTICLE V
REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWER
Borrower represents, warrants and covenants for the benefit of Lender
and Issuer, as follows:
(a) Borrower is a corporation duly organized, validly existing and in
good standing under the laws of Delaware, has power to enter into this Agreement
and by proper action has duly authorized the execution and delivery of this
Agreement, the Escrow Agreement and the Statement as to Tax Exempt Status.
Borrower is in good standing and is duly licensed or qualified to transact
business in the State and in all jurisdictions where the character of the
property owned or leased or the nature of the business transacted by it makes
such licensing or qualification necessary.
(b) Borrower has been fully authorized to execute and deliver this
Agreement, the Escrow Agreement and the Statement as to Tax Exempt Status under
the terms and provisions of the resolution of its board of directors by
appropriate official approval, and further represents, covenants and warrants
that all requirements have been met, and procedures have occurred in order to
ensure the enforceability of this Agreement, the Escrow Agreement and the
Statement as to Tax Exempt Status and this Agreement, the Escrow Agreement and
the Statement as to Tax Exempt Status have been duly authorized, executed and
delivered.
(c) The officer of Borrower executing this Agreement, the Escrow
Agreement and the Statement as to Tax Exempt Status and any related documents
has been duly authorized to execute and deliver this Agreement, the Escrow
Agreement and the Statement as to Tax Exempt Status and such related documents
under the terms and provisions of a resolution of Borrower's board of directors.
(d) This Agreement, the Escrow Agreement and the Statement as to Tax
Exempt Status constitute valid and legally binding obligations of Borrower,
enforceable against Borrower in accordance with their respective terms, except
to the extent limited by bankruptcy, reorganization or other laws of general
application relating to effecting the enforcement of creditors' rights.
(e) The execution and delivery of this Agreement, the Escrow Agreement
and the Statement as to Tax Exempt Status, the consummation of the transactions
contemplated hereby and the fulfillment of the terms and conditions hereof do
not and will not violate any law, rule, regulation or order, conflict with or
result in a breach of any of the terms or conditions of any corporate
restriction or of any agreement or instrument to which Borrower is now a party
and do not and will not constitute a default under any of the foregoing or
result in the creation or imposition of any liens, charges or encumbrances of
any nature upon any of the property or assets of Borrower contrary to the terms
of any instrument or agreement.
(f) The authorization, execution, delivery and performance of this
Agreement or the Escrow Agreement by Borrower do not require submission to,
approval of, or other action by any governmental authority or agency, which
action with respect to this Agreement or the Escrow Agreement has not been taken
and which is final and non-appealable.
(g) There is no action, suit, proceeding, claim, inquiry or
investigation, at law or in equity, before or by any court, regulatory agency,
public board or body pending or, to the best of Borrower's knowledge, threatened
against or affecting Borrower, challenging Borrower's authority to enter into
this Agreement or the Escrow Agreement or to execute and deliver the Statement
as to Tax Exempt Status or any other action wherein an unfavorable ruling or
finding would adversely affect the enforceability of this Agreement, the Escrow
Agreement or the Statement as to Tax Exempt Status or the exclusion of the
Interest from gross income for federal tax purposes under the Code, or would
materially and adversely affect any of the transactions contemplated by this
Agreement.
(h) The Project is located in an area properly zoned for the Project's
current and anticipated use and the Project will not violate any applicable
zoning, land use, environmental or similar law or restriction. The Borrower has
all licenses and permits for the operation of the Project except building
permits, which the Borrower expects to obtain in the ordinary course.
(i) The Project is of the type authorized and permitted to be financed
under the Act.
(j) Borrower owns or will own the Project and intends to operate the
Project or cause the Project to be operated, as a "project," within the meaning
of the Act, until the date on which all of the Loan Payments have been fully
paid or the applicable Prepayment Amount has been fully paid.
(k) Borrower will not take any action that would cause the Interest to
become includable in gross income of the recipient for federal income tax
purposes under the Code, and Borrower will take and will cause its officers,
employees and agents to take all affirmative actions legally within its power
necessary to ensure that the Interest does not become includable in gross income
of the recipient for federal income tax purposes under the Code (including,
without limitation, the calculation and payment of any rebate required to
preserve such exclusion).
(l) The Borrower has heretofore furnished to Lender the audited
financial statement of the Borrower for its fiscal year ended September 30, 1995
and the unaudited financial statement of the Borrower for the fiscal year ended
September 30, 1996, and those statements fairly present the financial condition
of the Borrower on the dates thereof and the results of its operations and cash
flows for the periods then ended and were prepared in accordance with generally
accepted accounting principles. Since the date of the most recent financial
statements, there has been no material adverse change in the business,
properties or condition (financial or otherwise) of the Borrower.
(m) Borrower has paid or caused to be paid to the proper authorities
when due all federal, state and local taxes required to be withheld by it.
Borrower has filed all federal, state and local tax returns which are required
to be filed, and Borrower has paid or caused to be paid to the respective taxing
authorities all taxes as shown on said returns or on any assessment received by
it to the extent such taxes have become due.
(n) Borrower has or will have good and absolute title to the Project,
free and clear of all mortgages, security interests, liens and encumbrances
except for the security interest created for the benefit of the Bank securing
the Letter of Credit.
(o) All financial and other information provided to Lender by or on
behalf of Borrower in connection with Borrower's request for the Loan
contemplated hereby is true and correct in all material respects and, as to
projections, valuations or pro forma financial statements, present a good faith
opinion as to such projections, valuations and pro forma condition and results.
(p) Borrower will aid and assist Issuer in connection with preparing
and submitting to the Secretary of the Treasury a Form 8038 (or other applicable
information reporting statement) at the time and in the form required by the
Code.
(q) The representations contained in the Statement as to Tax Exempt
Status are true and correct as of the date hereof. Borrower will comply fully at
all times with the Statement as to Tax Exempt Status, and Borrower will not take
any action, or omit to take any action, which, if taken or omitted,
respectively, would violate the Statement as to Tax Exempt Status.
(r) Expenses for work done by officers or employees of Borrower in
connection with the Project will be included as a Project Cost, if at all, only
to the extent (i) such persons were specifically employed for such particular
purpose, (ii) the expenses do not exceed the actual cost thereof and (iii) such
expenses are treated or capable of being treated (whether or not so treated) on
the books of Borrower as a capital expenditure in conformity with generally
accepted accounting principles applied on a consistent basis.
(s) Any costs incurred with respect to that part of the Project paid
from the Loan Proceeds shall be treated or capable of being treated on the books
of Borrower as capital expenditures in conformity with generally accepted
accounting principles applied on a consistent basis.
(t) No part of the Loan Proceeds will be used to finance inventory or
rolling stock or will be used for working capital or to finance any other cost
not constituting a Project Cost.
(u) No person other than Borrower is in occupancy or possession of any
portion of the Project, except as described in the Statement as to Tax Exempt
Status.
(v) The Project is land or property of the character subject to the
allowance for depreciation under Section 167 of the Code.
ARTICLE VI
LETTER OF CREDIT
Borrower hereby agrees to deliver or cause to be delivered to Lender
the Letter of Credit as additional security for the prompt payment and
performance of all of Borrower's obligations under this Agreement. Borrower
hereby further agrees to deliver to Lender not later than sixty (60) days prior
to any scheduled expiration date of the Letter of Credit or any Substitute
Letter of Credit (a) evidence satisfactory to Lender that such Letter of Credit
or Substitute Letter of Credit has been renewed on terms acceptable to Lender or
(b) a Substitute Letter of Credit. If at any time (x) the rating of Bank by LACE
Financial Corporation is below "B-" or (y) the rating of a Substitute Bank is
below the rating B. Borrower shall within 30 days provide to Lender a Substitute
Letter of Credit. A failure by Borrower to fully and timely perform any
obligation under this Article VI or the failure of Bank or any Substitute Bank
to fully and timely honor any draft under the Letter of Credit or any Substitute
Letter of Credit, as the case may be, shall constitute an immediate Event of
Default hereunder.
ARTICLE VII
AFFIRMATIVE COVENANTS OF BORROWER
So long as the Loan shall remain unpaid, Borrower will comply with the
following requirements, unless Lender shall otherwise consent in writing:
Section 7.01. Reporting RequirementsReporting Requirements. Borrower
will deliver, or cause to be delivered, to Lender each of the following, which
shall be in form and detail reasonably acceptable to Lender:
(a) as soon as available, and in any event within 120 days after the
end of each fiscal year of the Borrower, audited financial statements of the
Borrower with the unqualified opinion of independent certified public
accountants selected by the Borrower and acceptable to Lender which annual
financial statements shall include the balance sheet of the Borrower as at the
end of such fiscal year and the related statements of income, retained earnings
and cash flows of the Borrower for the fiscal year then ended, all in reasonable
detail and prepared in accordance with generally accepted accounting principles
applied on a basis consistent with the accounting practices applied in the
financial statements referred to in Article V hereof, together with a
certificate of the chief financial officer of the Borrower stating that such
financial statements have been prepared in accordance with generally accepted
accounting principles applied on a basis consistent with the accounting
practices reflected in the annual financial statements referred to in Article V
hereof and that to the best of such officer's knowledge, there has not occurred
any Default or Event of Default hereunder; or if such a Default or Event of
Default has occurred stating in reasonable detail the facts with respect
thereto;
(b) as soon as available and in any event within 60 days after the end
of each fiscal quarter of the Borrower, an unaudited/internal balance sheet and
statements of income and retained earnings of the Borrower as at the end of and
for such quarter and for the year to date period then ended, in reasonable
detail and stating in comparative form the figures for the corresponding date
and periods in the previous year, all prepared in accordance with generally
accepted accounting principles applied on a basis consistent with the accounting
practices reflected in the financial statements referred to in Article V hereof
and certified by the chief financial officer of the Borrower, subject to
year-end adjustments; and accompanied by a certificate of that officer stating
(i) that such financial statements have been prepared in accordance with
generally accepted accounting principles applied on a basis consistent with the
accounting practices reflected in the financial statements referred to in
Article V hereof, and (ii) to the best of such officer's knowledge no Default or
Event of Default hereunder not theretofore reported and remedied and, if such a
Default or Event of Default has occurred so, stating in reasonable detail the
facts with respect thereto;
(c) immediately after the commencement thereof, notice in writing of
all material litigation and of all proceedings before any governmental or
regulatory agency affecting Borrower of the type described in Article V hereof
or which seek a monetary recovery against Borrower in excess of $100,000;
(d) as promptly as practicable (but in any event not later than five
(5) Business Days) after an officer of Borrower obtains knowledge of the
occurrence of any event that constitutes a Default or an Event of Default
hereunder, notice of such occurrence, together with a detailed statement by a
responsible officer of Borrower of the steps being taken by Borrower to cure the
effect of such Default or Event of Default;
(e) promptly upon knowledge thereof, notice of any loss or destruction
of or damage to the Project or of any material adverse change in the Project;
(f) promptly after the amending thereof, copies of any and all
material amendments to its certificate of incorporation, articles of
incorporation or bylaws;
(g) promptly upon knowledge thereof, notice of any material violation
by Borrower of any law, rule or regulation; and
(h) promptly upon knowledge thereof, notice of any material adverse
change in the financial or operating condition of Borrower.
Section 7.02. Books and Records; Inspection and Examination.Books and
Records; Inspection and Examination. Borrower will keep accurate books of record
and account for itself pertaining to the Project and pertaining to Borrower's
business and financial condition and such other matters as Lender may from time
to time request in which true and complete entries will be made in accordance
with generally accepted accounting principles consistently applied and, upon
request of Lender, will permit any officer, employee, attorney or accountant for
Lender to audit, review, make extracts from, or copy any and all corporate and
financial books, records and properties of Borrower at all times (but not more
often than twice per calendar year) during ordinary business hours and following
reasonable notice to Borrower, and to discuss the affairs of Borrower with any
of its directors, officers, employees or agents. Borrower will permit Lender, or
its employees, accountants, attorneys or agents, to examine and copy any or all
of its records and to examine and inspect the Project at any time during
Borrower's business hours, following reasonable notice to Borrower.
Section 7.03. Compliance With Laws; Environmental IndemnityCompliance
With Laws; Environmental Indemnity. Borrower will (a) comply with the
requirements of applicable laws and regulations, the non-compliance with which
would materially and adversely affect its business or its financial condition,
(b) comply with all applicable environmental, hazardous waste or substance,
toxic substance and underground storage laws and regulations and obtain any
permits, licenses or similar approvals required by any such laws or regulations,
the failure to comply with which or to obtain would have a material adverse
effect on the Borrower and (c) use and keep the Project, and will require that
others use and keep the Project, only for lawful purposes, without violation of
any federal, state or local law, statute or ordinance the violation of which
would have a material adverse effect on Borrower. Borrower shall secure all
permits and licenses, if any, necessary for the acquisition and operation of the
Project. Borrower shall comply in all respects (including, without limitation,
with respect to the use, maintenance and operation of the Project) with all laws
of the jurisdictions in which its operations involving the Project may extend
and of any legislative, executive, administrative or judicial body exercising
any power or jurisdiction over the Project or its interest or rights under this
Agreement the failure to comply with which would have a material adverse effect
on the Borrower. Borrower will indemnify, defend and hold Lender and Issuer
harmless from and against any claims, loss or damage to which Lender or Issuer
may be subjected as a result of any past, present or future existence, use,
handling, storage, transportation or disposal of any hazardous waste or
substance or toxic substance by Borrower or on the Project. This indemnification
shall survive the termination of this Agreement and payment of the indebtedness
hereunder.
Section 7.04. Payment of Taxes and Other ClaimsPayment of Taxes and
Other Claims. Borrower will pay or discharge, when due, (a) all taxes,
assessments and governmental charges levied or imposed upon it or upon its
income or profits, upon any properties belonging to it (including, without
limitation, the Project) or upon or against the creation, perfection or
continuance of the security interest created pursuant to this Agreement, prior
to the date on which penalties attach thereto, (b) all federal, state and local
taxes required to be withheld by it, and (c) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien or charge
upon any properties of Borrower; provided, that Borrower shall not be required
to pay any such tax, assessment, charge or claim whose amount, applicability or
validity is being contested in good faith by appropriate proceedings. Borrower
will pay, as the same respectively come due, all taxes and governmental charges
of any kind whatsoever that may at any time be lawfully assessed or levied
against or with respect to the equipment, as well as all gas, water, steam,
electricity, heat, power, telephone, utility and other charges incurred in the
operation, maintenance, use, occupancy and upkeep of the Project; provided, that
Borrower shall not be required to pay any such tax, assessment or charge whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings.
Section 7.05. Maintenance of ProjectMaintenance of Project. (a)
Borrower shall, at its own expense, maintain, preserve and keep the Project in
good repair, working order and condition, and shall from time to time make all
repairs and replacements necessary to keep the Project in such condition, and in
compliance with state and federal laws, ordinary wear and tear excepted. Neither
Lender nor Issuer shall have any responsibility in any of these matters, or for
the making of improvements or additions to the Project.
(b) Borrower will defend the Project against all claims or demands of
all persons (other than the Bank) claiming the Project or any interest therein.
(c) Borrower will keep the Project free and clear of all security
interests, liens and encumbrances except the security interest created for the
benefit of the Bank.
Section 7.06. InsuranceInsurance. (a) Borrower shall, at its own
expense, procure and maintain continuously in effect: (i) public liability
insurance for personal injuries, death or damage to or loss of property arising
out of or in any way relating to the Project, with a coverage limit of not less
than $1,000,000 per occurrence and (ii) insurance against such hazards as Lender
may reasonably require, including, but not limited to, all-risk casualty and
property insurance, in an amount equal to the greater of the full replacement
cost of the Project or the applicable Prepayment Amount.
(b) If required by State law, Borrower shall carry workers'
compensation insurance covering all employees on, in, near or about the Project,
and upon request, shall furnish to Lender certificates evidencing such coverage.
(c) All insurance policies required by this Article shall be taken out
and maintained with responsible and reputable insurance companies authorized to
transact business in the State, and shall contain a provision that the insurer
shall not cancel or revise coverage thereunder without giving written notice to
the insured parties at least thirty (30) days before the cancellation or
revision becomes effective. No insurance shall be subject to any co-insurance
clause. At the time of execution and delivery of this Agreement, Borrower shall
provide Lender with evidence satisfactory to Lender of such insurance and, prior
to the expiration thereof, shall provide Lender evidence of all renewals or
replacements thereof.
(d) As among Lender, Borrower and Issuer, Borrower assumes all risks
and liabilities from any cause whatsoever, whether or not covered by insurance,
for loss or damage to the Project and for injury to or death of any person or
damage to any property, whether such injury or death be with respect to agents
or employees of Borrower or of third parties, and whether such property damage
be to Borrower's property or the property of others. Whether or not covered by
insurance, Borrower hereby assumes responsibility for and agrees to reimburse
Lender and Issuer for and will indemnify, defend and hold Lender and Issuer
harmless from and against all liabilities, obligations, losses, damages,
penalties, claims, actions, costs and expenses (including reasonable attorneys'
fees) of whatsoever kind and nature unless directly related to lender's gross
negligence or willful misconduct, imposed on, incurred by or asserted against
Lender or Issuer that in any way relate to or arise out of this Agreement, the
transactions contemplated hereby and the Project, including but not limited to,
(i) the acquisition, operation and maintenance of the Project, (ii) the
condition of the Project sold or otherwise disposed of after possession by
Borrower, (iii) any patent or copyright infringement, (iv) the conduct of
Borrower, its officers, employees and agents, (v) a breach of Borrower of any of
its covenants or obligations hereunder, and (vi) any claim, loss, cost or
expense involving alleged damage to the environment relating to the Project,
including, but not limited to, investigation, removal, cleanup and remedial
costs. All amounts payable by Borrower pursuant to the immediately preceding
sentence shall be paid immediately upon demand of Issuer or Lender, as the case
may be. This provision shall survive the termination of this Agreement.
Section 7.07. Preservation of Corporate ExistencePreservation of
Corporate Existence. Borrower will preserve and maintain its corporate existence
and all of its rights, privileges and franchises necessary or desirable in the
normal conduct of its business; and shall conduct its business in an orderly,
efficient and regular manner.
Section 7.08. Performance by LenderPerformance by Lender. If Borrower
at any time fails to perform or observe any of the covenants or agreements
contained in this Agreement, and if such failure shall continue for a period of
ten (10) calendar days after Lender gives Borrower written notice thereof (or in
the case of the agreements contained in Sections 7.05 and 7.06 hereof,
immediately upon the occurrence of such failure, without notice or lapse of
time), Lender may, but need not perform or observe such covenant on behalf and
in the name, place and stead of Borrower (or, at Lender's option, in Lender's
name) and may, but need not, upon notice to Borrower, take any and all other
actions which Lender may reasonably deem necessary to cure or correct such
failure (including, without limitation, the payment of taxes, the satisfaction
of security interests, liens or encumbrances, the performance of obligations
owed to account debtors or other obligors, the procurement and maintenance of
insurance, the execution of assignments, security agreements and financing
statements, and the endorsement of instruments); and Borrower shall thereupon
pay to Lender on demand the amount of all monies expended and all costs and
expenses (including reasonable attorneys' fees and legal expenses) incurred by
Lender in connection with or as a result of the performance or observance of
such agreements or the taking of such action by Lender, together with interest
thereon from the date expended or incurred at the lesser of 12% per annum or the
highest rate permitted by law. To facilitate the performance or observance by
Lender of such covenants of Borrower, Borrower hereby irrevocably appoints
Lender, or the delegate of Lender, acting alone, as the attorney in fact of
Borrower with the right (but not the duty) from time to time to create, prepare,
complete, execute, deliver, endorse or file in the name and on behalf of
Borrower any and all instruments, documents, assignments, security agreements,
financing statements, applications for insurance and other agreements and
writings required to be obtained, executed, delivered or endorsed by Borrower
under this Agreement.
ARTICLE VIII
NEGATIVE COVENANTS OF BORROWER
So long as the Loan shall remain unpaid, Borrower agrees that:
Section 8.01. LienLien. The Borrower will not create, incur or suffer
to exist any mortgage, deed of trust, pledge, lien, security interest,
assignment or transfer upon or of the Project, except for the security interest
created for the benefit of the Bank securing the Letter of Credit.
Section 8.02. Sale of AssetsSale of Assets. The Borrower will not sell,
lease, assign, transfer or otherwise dispose of all or substantially all of its
assets or the Project or any interest in the Project (whether in one transaction
or in a series of transactions).
Section 8.03. Consolidation and MergerConsolidation and Merger. The
Borrower will not (a) consolidate with or merge into any person, or permit any
other person to merge into it, unless (i) the surviving entity assumes all
obligations of the Borrower hereunder, (ii) no Event of Default has occurred and
is continuing, and (iii) the Lender receives an opinion of counsel to the
Borrower and an opinion of bond counsel reasonably acceptable to it relating to
such transaction, or (b) acquire (in a transaction analogous in purpose or
effect to a consolidation or merger) all or substantially all the assets of any
other person unless (i) no Event of Default has occurred and is continuing, and
(ii) the Borrower certifies that such acquisition will not result in an Event of
Taxability.
Section 8.04. AccountingAccounting. The Borrower will not adopt, permit
or consent to any material change in accounting principles other than as
required by generally accepted accounting principles. The Borrower will not
adopt, permit or consent to any change in its fiscal year, without the prior
written consent of Lender, which consent shall be given or withheld in Lender's
reasonable discretion.
Section 8.05. TransfersTransfers. Subject to Section 8.02, the Borrower
will not in any manner transfer, sell or otherwise dispose (a "Transfer") of any
property without prior or present receipt of full and adequate consideration,
and except for (i) Transfers of property which is, or within the next two fiscal
years from the date of such Transfer is reasonably expected to become,
inadequate, obsolete or worn out, (ii) Transfers of inventory in the ordinary
course of business, (iii) Transfers of non-exclusive licenses and similar
arrangements for the use of property of Borrower made in the ordinary course of
business, (iv) Transfers which constitute liquidation of investments, and (v)
other Transfers not otherwise permitted by this Section 8.05 not exceeding in
the aggregate $500,000 in any fiscal year.
Section 8.06. Use of the ProjectUse of the Project. The Borrower will
not construct, reconstruct, improve, use, operate or maintain the Project in
violation of any applicable law or in a manner contrary to that contemplated by
this Agreement.
ARTICLE IX
[Reserved]
ARTICLE X
ASSIGNMENT AND SELLING
Section 10.01. Assignment by LenderAssignment by Lender. This
Agreement, and the obligations of Borrower to make payments hereunder, may be
assigned and reassigned in whole to one or more assignees or subassignees by
Lender at any time subsequent to its execution, without the necessity of
obtaining the consent of Issuer or Borrower, provided, however, that no such
assignment or reassignment shall be effective unless and until (a) Issuer and
Borrower shall have received notice of the assignment or reassignment disclosing
the name and address of the assignee or subassignee, and (b) in the event that
such assignment or reassignment is made to a bank or trust company as trustee
for holders of certificates representing interests in this Agreement, such bank
or trust company agrees to maintain, or cause to be maintained, a book-entry
system by which a record of the names and addresses of such holders as of any
particular time is kept and agrees, upon request of Issuer or Borrower, to
furnish such information to Issuer or Borrower. Upon receipt of notice of
assignment, Borrower will reflect in a book-entry the assignee designated in
such notice of assignment, and shall agree to make all payments to the assignee
designated in the notice of assignment, notwithstanding any claim, defense,
setoff or counterclaim whatsoever (whether arising from a breach of this
Agreement or otherwise) that Issuer and Borrower may from time to time have
against Lender or the assignee. Issuer and Borrower agree to execute all
documents, including notices of assignment and chattel mortgages or financing
statements, which may be reasonably requested by Lender or its assignee to
protect their interest in the Project and in this Agreement. Notwithstanding the
foregoing, Lender shall not assign this Agreement, or any obligation to make
payments hereunder, to a competitor of the Borrower listed in Schedule 2 hereto,
as revised by Borrower from time to time not more often than once every three
(3) months.
Section 10.02. No Sale or Assignment by BorrowerNo Sale or Assignment
by Borrower. This Agreement and the interest of Borrower in the Project may not
be sold, assumed, assigned or encumbered by Borrower without the prior written
consent of Lender.
ARTICLE XI
EVENTS OF DEFAULT AND REMEDIES
Section 11.01. Events of DefaultEvents of Default. The following
constitute "Events of Default" under this Agreement:
(a) failure by Borrower to pay to Lender, as assignee of Issuer, when
due any Loan Payment or to pay any other payment required to be paid hereunder
and the continuation of such failure for a period of ten (10) days;
(b) failure by Borrower to maintain insurance on the Project in
accordance with Section 7.06 hereof;
(c) failure by Borrower or Issuer to observe and perform any other
covenant, condition or agreement of Borrower or Issuer, respectively, contained
herein (except as set forth in Article VI), in the Escrow Agreement, in the
Statement as to Tax Exempt Status or in any other document or agreement executed
in connection herewith on its part to be observed or performed for a period of
thirty (30) days after written notice is given to Borrower or Issuer, as the
case may be, specifying such failure and requesting that it be remedied;
provided, however, that, if the failure stated in such notice cannot be
corrected within such 30 day period, Lender will not unreasonably withhold its
consent to an extension of such time if corrective action is instituted by
Borrower within the applicable period and diligently pursued until the default
is corrected;
(d) Initiation by Issuer of a proceeding under any federal or state
bankruptcy or insolvency law seeking relief under such laws concerning the
indebtedness of Issuer;
(e) Borrower, Bank, or any Substitute Bank shall be or become
insolvent, or admit in writing its or his inability to pay its or his debts as
they mature, or make an assignment for the benefit of creditors; or Borrower,
Bank, or any Substitute Bank shall apply for or consent to the appointment of
any receiver, trustee or similar officer for it or him or for all or any
substantial part of its or his property; or such receiver, trustee or similar
officer shall be appointed without the application or consent of Borrower, Bank,
or any Substitute Bank, as the case may be; or Borrower, Bank, or any Substitute
Bank shall institute (by petition, application, answer, consent or otherwise)
any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt,
dissolution, liquidation or similar proceeding relating to it under the laws of
any jurisdiction; or any such proceeding shall be instituted (by petition,
application or otherwise) against Borrower, Bank, or any Substitute Bank; or any
judgment, writ, warrant of attachment or execution or similar process shall be
issued or levied against a substantial part of the property of Borrower, Bank,
or any Substitute Bank;
(f) determination by Lender that any representation or warranty made by
Borrower or Issuer herein, in the Statement as to Tax Exempt Status or in any
other document executed in connection herewith was untrue in any material
respect when made;
(g) the occurrence of a default or an event of default under any
instrument, agreement or other document evidencing or relating to any
indebtedness or other monetary obligation of Borrower (whether individually or
in the aggregate) in an amount greater than $300,000, so that a holder or
trustee of such indebtedness accelerates such indebtedness;
(h) a default or an event of default and the expiration of any
applicable grace or cure period and the receipt of any required notice under any
other agreement between Lender and Borrower unless waived by Lender;
(i) failure by Borrower to fully and timely perform any of its
obligations under Article VI of this Agreement or the failure of Bank or any
Substitute Bank to fully and timely honor any draft under the Letter of Credit
or any Substitute Letter of Credit, as the case may be;
(j) this Agreement, or any portion hereof, is determined by a court of
competent jurisdiction to be invalid or unenforceable against the Issuer; or
(k) an Event of Taxability shall occur.
Section 11.02. Remedies on DefaultRemedies on Default. Whenever any
Event of Default shall have occurred and be continuing, Lender shall have the
right, at its sole option without any further demand or notice, to take any one
or any combination of the following remedial steps insofar as the same are
available to secured parties under Article 9 of the UCC in effect in the State
from time to time and which are otherwise accorded to Lender by applicable law:
(a) by notice to Borrower, declare the entire unpaid principal amount
of the Loan then outstanding, all interest accrued and unpaid thereon and all
amounts payable under this Agreement to be forthwith due and payable, whereupon
the Loan, all such accrued interest and all such amounts shall become and be
forthwith due and payable, without presentment, notice of dishonor, protest or
further notice of any kind, all of which are hereby expressly waived by
Borrower;
(b) without notice to Borrower, draw upon the Letter of Credit or
Substitute Letter of Credit in an amount equal to all amounts due hereunder and
under the Schedule, including the Prepayment Amount.
(c) proceed by appropriate court action to enforce specific performance
by Borrower of the applicable covenants of this Agreement or to recover for the
breach thereof, including the payment of all amounts due from Borrower. Borrower
shall pay or repay to Lender or Issuer all costs of such action or court action,
including, without limitation, reasonable attorneys' fees; and
(d) take whatever action at law or in equity may appear necessary or
desirable to enforce its rights with respect to the Project. Borrower shall pay
or repay to Lender or Issuer all costs of such action or court action,
including, without limitation, reasonable attorneys' fees.
Notwithstanding any other remedy exercised hereunder, Borrower shall
remain obligated to pay to Lender any unpaid portion of the Prepayment Amount.
Section 11.03. [Reserved].
Section 11.04. No Remedy ExclusiveNo Remedy Exclusive. No remedy herein
conferred upon or reserved to Lender or Issuer is intended to be exclusive and
every such remedy shall be cumulative and shall be in addition to every other
remedy given under this Agreement or now or hereafter existing at law or in
equity. No delay or omission to exercise any right or power accruing upon any
Event of Default shall impair any such right or power or shall be construed to
be a waiver thereof, but any such right or power may be exercised from time to
time and as often as may be deemed expedient. In order to entitle Lender or
Issuer to exercise any remedy reserved to it in this Article, it shall not be
necessary to give any notice other than such notice as may be required by this
Article. All remedies herein conferred upon or reserved to Lender or Issuer
shall survive the termination of this Agreement.
Section 11.05. Late ChargeLate Charge. Any Loan Payment not paid by
Borrower within ten (10) days of on the due date thereof shall, to the extent
permissible by law, bear a late charge equal to the lesser of five cents ($.05)
per dollar of the delinquent amount or the lawful maximum, and Borrower shall be
obligated to pay the same immediately upon receipt of Lender's written invoice
therefor.
ARTICLE XII
MISCELLANEOUS
Section 12.01. Costs and Expenses of LenderCosts and Expenses of
Lender. Borrower shall pay to Lender, in addition to the Loan Payments payable
by Borrower hereunder, such amounts in each year as shall be required by Lender
in payment of any reasonable costs and expenses incurred by Lender in connection
with the execution, performance or enforcement of this Agreement, including but
not limited to payment of all reasonable fees, costs and expenses and all
administrative costs of Lender or Issuer in connection with the Project and the
Loan (including, without limitation, reasonable attorneys' fees and
disbursements), fees of auditors or attorneys, insurance premiums not otherwise
paid hereunder and all other direct and necessary administrative costs of Lender
or charges required to be paid by it in order to comply with the terms of, or to
enforce its rights under, this Agreement (but not including general
administrative or overhead expenses of Lender). Such costs and expenses shall be
billed to Borrower by Lender from time to time, together with a statement
certifying that the amount so billed has been paid by Lender for one or more of
the items above described, or that such amount is then payable by Lender for
such items. Amounts so billed shall be due and payable by Borrower within thirty
(30) days after receipt of the xxxx by Borrower.
Section 12.02. Disclaimer of WarrantiesDisclaimer of Warranties. LENDER
AND ISSUER MAKE NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO
THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OR FITNESS FOR USE OF THE PROJECT, OR ANY OTHER WARRANTY OR
REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT HERETO. In no event shall
Lender or Issuer be liable for any loss or damage in connection with or arising
out of this Agreement, the Project or the existence, furnishing, functioning or
Borrower's use of the Project provided for in this Agreement.
Section 12.03. NoticesNotices. All notices, certificates, requests,
demands and other communications provided for hereunder or under the Escrow
Agreement or the Statement as to Tax Exempt Status shall be in writing and shall
be (a) personally delivered, (b) sent by first class United States mail, (c)
sent by overnight courier of national reputation, or (d) transmitted by
telecopy, in each case addressed to the party to whom notice is being given at
its address as set forth above and, if telecopied, transmitted to that party at
its telecopier number set forth above or, as to each party, at such other
address or telecopier number as may hereafter be designated by such party in a
written notice to the other party complying as to delivery with the terms of
this Section. All such notices, requests, demands and other communications shall
be deemed to have been given on (a) the date received if personally delivered,
(b) when deposited in the mail if delivered by mail, (c) the date sent if sent
by overnight courier, or (d) the date of transmission if delivered by telecopy.
If notice to Borrower of any intended action is required by law in a particular
instance, such notice shall be deemed commercially reasonable if given (in the
manner specified in this Section) at least ten (10) calendar days prior to the
date of intended disposition or other action.
Section 12.04. Further Assurance and Corrective Instruments.Further
Assurance and Corrective Instruments. Issuer and Borrower hereby agree that they
will, from time to time, execute, acknowledge and deliver, or cause to be
executed, acknowledged and delivered, such further acts, instruments,
conveyances, transfers and assurances, as Lender reasonably deems necessary or
advisable for the implementation, correction, confirmation or perfection of this
Agreement or the Statement as to Tax Exempt Status and any rights of Lender
hereunder or thereunder.
Section 12.05. Binding Effect; Time of the EssenceBinding Effect; Time
of the Essence. This Agreement shall inure to the benefit of and shall be
binding upon Lender, Issuer, Borrower and their respective successors and
assigns. Time is of the essence.
Section 12.06. SeverabilitySeverability. In the event any provision of
this Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any
other provision hereof.
Section 12.07. AmendmentsAmendments. To the extent permitted by law,
the terms of this Agreement shall not be waived, altered, modified, supplemented
or amended in any manner whatsoever except by written instrument signed by the
parties hereto, and then such waiver, consent, modification or change shall be
effective only in the specific instance and for the specific purpose given.
Section 12.08. Execution in CounterpartsExecution in Counterparts. This
Agreement may be executed in several counterparts, each of which shall be an
original and all of which shall constitute one and the same instrument, and any
of the parties hereto may execute this Agreement by signing any such
counterpart, provided that only the original marked "Original: 1 of 8" on the
execution page hereof shall constitute the Bond under the Act.
Section 12.09. Applicable LawApplicable Law. This Agreement shall be
governed by and construed in accordance with the laws of the State.
Section 12.10. CaptionsCaptions. The captions or headings in this
Agreement are for convenience only and in no way define, limit or describe the
scope or intent of any provisions or sections of this Agreement.
Section 12.11. Entire AgreementEntire Agreement. This Agreement, the
Statement as to Tax Exempt Status, the Escrow Agreement and the exhibits hereto
and thereto constitute the entire agreement among Lender, Issuer and Borrower.
There are no understandings, agreements, representations or warranties, express
or implied, not specified herein or in such documents regarding this Agreement
or the Project financed hereby.
Section 12.12. UsuryUsury. It is the intention of the parties hereto to
comply with any applicable usury laws; accordingly, it is agreed that,
notwithstanding any provisions to the contrary in this Agreement, in no event
shall this Agreement require the payment or permit the collection of interest or
any amount in the nature of interest or fees in excess of the maximum permitted
by applicable law.
Section 12.13. Waiver of Jury TrialWaiver of Jury Trial. LENDER, ISSUER
AND BORROWER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS
AGREEMENT, ANY OF THE RELATED DOCUMENTS, ANY DEALINGS AMONG LENDER, ISSUER OR
BORROWER RELATING TO THE SUBJECT MATTER OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT OR ANY RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING
ESTABLISHED AMONG LENDER, ISSUER AND BORROWER. THE SCOPE OF THIS WAIVER IS
INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY
COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF
DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS). THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT, ANY RELATED DOCUMENTS, OR TO ANY OTHER
DOCUMENTS OR AGREEMENTS RELATING TO THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT OR ANY RELATED TRANSACTIONS. IN THE EVENT OF LITIGATION, THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
their respective corporate names by their duly authorized officers, all as of
the date first written above.
......... Lender: GE CAPITAL PUBLIC FINANCE, INC.
......... By:/s/ Xxxxxx Xxxx
----------------
......... Title: Vice President
......... Issuer: BUSINESS FINANCE AUTHORITY
......... OF THE STATE OF NEW HAMPSHIRE
......... By:/s/ Xxxxxx Xxxxx
----------------
......... Chairman
......... By:/s/ Xxxx Xxxxxxx
------------------
......... Executive Director
......... Borrower: ELEXSYS INTERNATIONAL, INC.
......... By:/s/ Xxxxxxx X. Xxxxxxx
----------------------
......... Title: Principal Financial Officer
and Duly Authorized Officer
Original: ___ of 8.
Trade Names of Borrower, if any:
None
Schedule 2
Prohibited Assignees
[to come from GE and Elexsys]
A-3
Exhibit A to Loan Agreement
SCHEDULE OF PROJECT AND LOAN PAYMENTS
This Schedule is delivered pursuant to the Loan Agreement, dated as of
December 1, 1996 (the "Agreement"), among GE Capital Public Finance, Inc., as
Lender ("Lender"), Business Finance Authority of the State of New Hampshire, as
Issuer ("Issuer"), and Elexsys International, Inc., as Borrower ("Borrower").
All of the provisions of the Agreement are incorporated herein by reference and
capitalized terms used herein shall have the meanings assigned to them in the
Agreement.
NEITHER THIS SCHEDULE NOR THE AGREEMENT CONSTITUTES AN INDEBTEDNESS OF
THE STATE OF NEW HAMPSHIRE OR OF THE ISSUER EXCEPT TO THE EXTENT PERMITTED BY
NEW HAMPSHIRE RSA CHAPTER 162-I. ALL AMOUNTS OWED HEREUNDER AND UNDER THE
AGREEMENT ARE PAYABLE ONLY FROM THE SOURCES EXPRESSLY PROVIDED IN THE AGREEMENT,
AND NO PUBLIC FUNDS MAY BE USED FOR THAT PURPOSE.
1. The Project, as described in Exhibit I attached hereto, will be
located at 00 Xxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxxxxx.
2. The Loan Payment dates, the Loan Payment amounts, the principal and
interest components of each Loan Payment, and the Prepayment Amounts
are as follows:
See Exhibit II attached hereto.
3. The disbursement period applicable to this Schedule shall end
September 30, 1997.
EXHIBIT I
The acquisition of approximately 4.591 acres of land and an
approximately 70,000 square foot building and the renovation thereof located at
00 Xxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxxxxx, to be used by the Borrower for the
manufacture of circuit boards and assemblies.
EXHIBIT II
See Attached Schedule
The Loan will be repayable over ten (10) years with monthly payments.
The first payment will be due on February 1, 1997, with the 119 remaining
payments due on the first day of each month thereafter. The interest rate on the
Loan shall be 6.33%.
B-1
Exhibit B to Loan Agreement
FORM OF CERTIFICATE OF ACCEPTANCE
I, the undersigned, hereby certify that I am the ____________ of
Elexsys International, Inc. ("Borrower") and, with respect to the Loan Agreement
dated as of December 1, 1996 (the "Agreement") by and among Borrower, GE Capital
Public Finance, Inc. ("Lender") and Business Finance Authority of the State of
New Hampshire ("Issuer"), that:
1. The portions of the Project described in the attached Exhibit A
(such "Portions") have been completed in accordance with Borrower's
specifications and have been accepted by Borrower.
2. Borrower has obtained from a reputable insurance company qualified
to do business in the State (as defined in the Agreement) insurance with respect
to all risks required to be covered thereby pursuant to Section 7.06 of the
Agreement.
3. All of the representations and warranties of Borrower contained in
the Agreement are true and correct as of the date hereof and no Default or Event
of Default has occurred thereunder.
Dated: __________, 19__.
......... Borrower: Elexsys International, Inc.
......... By:______________________________
......... Title:____________________________
......... Date:____________________________
C-3
Exhibit C to Loan Agreement
FORM OF OPINION OF COUNSEL TO BORROWER
......... December _, 1996
Business Finance Authority
of the State of New Hampshire
00 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxx Xxxxxxxxx 00000
GE Capital Public Finance, Inc.
Suite 470
0000 Xxxxxxxxxx Xxxx Xxxx.
Xxxxxxxxxxx, XX 00000
Re: Loan Agreement, dated as of December 1, 1996, by and among GE
Capital Public Finance, Inc. ("Lender"), Business Finance Authority of
the State of New Hampshire ("Issuer") and Elexsys International, Inc.
("Borrower")
Ladies and Gentlemen:
We have acted as counsel to the Borrower with respect to the Loan
Agreement described above (the "Loan Agreement"), the Escrow Agreement of even
date therewith (the "Escrow Agreement") among Lender, Issuer, Borrower and
National City Bank of Minneapolis, as escrow agent, and the Statement as to Tax
Exempt Status of even date therewith (the "Statement as to Tax Exempt Status",
and various related matters and, in this capacity, have reviewed a duplicate
original or certified copy of each of the Agreements (defined below). The Loan
Agreement, the Escrow Agreement, and the Statement as to Tax Exempt Status may
be referred to herein collectively as the "Agreements").
We have examined the Agreements and such records, certificates and
other documents and have made such other investigation as we consider necessary
to render this opinion. As to various questions of fact material to our opinion,
we have relied upon representations made in or pursuant to the Agreements and
upon certificates of officers of Borrower. We have assumed the genuineness of
all signatures (other than the signatures of the officers of Borrower to the
Agreements), the authenticity of all documents submitted to us as originals and
the conformity to original documents of all documents submitted to us as copies.
The opinions expressed herein with respect to the enforceability of the
Agreements are subject to (i) general principles of equity including without
limitation an implied covenant of good faith and fair dealing, and (ii)
bankruptcy, insolvency, reorganization, moratorium or similar laws of general
application affecting the rights and remedies of creditors heretofore or
hereafter enacted to the extent that the same may be constitutionally applied.
In addition, we express no opinion with respect to any provision of the
Agreements to the extent they provide for recourse to security in the absence of
notice and hearing, the grant of powers of attorney or indemnification that is
against public policy.
References in this opinion to matters known to us mean the actual
knowledge of the partners of this firm responsible for preparing this opinion
after inquiry of appropriate officers of Borrower, and we have not examined the
docket of any court or agency.
This opinion is limited to the laws of the State of New Hampshire and
the federal laws of the United States.
Based upon the examination of these and such other documents as we have
deemed relevant, we are of opinion that:
1. Borrower has been duly created and is validly existing and in good
standing under the laws of the State of Delaware, and has the full power and
authority to own its properties and conduct the business now conducted by it.
2. Borrower is qualified to do business and is in good standing in the
State of New Hampshire.
3. Borrower has full power and authority to execute and deliver the
Agreements to which it is a party and to carry out the terms thereof. The
Agreements have been duly and validly authorized, executed and delivered by
Borrower, are in full force and effect and are the valid and binding obligations
of Borrower, enforceable in accordance with their respective terms (including
against claims of usury).
4. The consummation of the transactions contemplated by the Agreements
and the carrying out of the terms thereof will not result in violation of any
provisions of the articles of incorporation or bylaws of the Borrower or, to the
best of our knowledge, result in the violation of any provision of, or in a
default under, any indenture, mortgage, deed of trust, or other agreement for
the incurring of indebtedness, or any judgment, decree, order, statute, rule or
regulation known to us to which Borrower is a party or by which it or its
property is bound.
5. To the best of our knowledge, there are no legal or governmental
actions, suits, proceedings, inquiries or investigations pending or threatened,
to which Borrower is or may become a party or of which any property of Borrower
is or may become subject, other than ordinary routine litigation incident to the
kind of business conducted by Borrower which, if determined adversely to
Borrower would not, individually or in the aggregate, have a material adverse
effect on the financial position or results of operations of Borrower.
6. To the best of our knowledge, there are no legal or governmental
proceedings pending or threatened, wherein an unfavorable decision, ruling or
finding would adversely affect the validity of or security for the Agreements or
the transactions contemplated thereby.
Very truly yours,
D-3
Exhibit D to Loan Agreement
FORM OF OPINION OF BOND COUNSEL
December _, 1996
Business Finance Authority
of the State of New Hampshire
00 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxx Xxxxxxxxx 00000
We have acted as bond counsel to the Business Finance Authority of the
State of New Hampshire (the "Authority") in connection with the making by the
Authority of a loan (the "Loan") to Elexsys International, Inc. ("Borrower")
pursuant to a Loan Agreement, dated as of December 1, 1996 (the "Agreement"), by
and among GE Capital Public Finance, Inc. ("Lender"), the Authority and
Borrower.
We have examined the law and such certified proceedings and other
papers as deemed necessary to render this opinion, including the Escrow
Agreement, dated as of December 1, 1996 (the "Escrow Agreement"), by and among
Lender, the Authority, Borrower and National City Bank of Minneapolis, as escrow
agent (the "Escrow Agent".) Terms used in this opinion and not otherwise defined
shall have the same meanings assigned to them in the Agreement.
As to questions of fact material to our opinion we have relied upon
representations and covenants of the Authority and Borrower contained in the
Agreement, the certified proceedings and other certifications of public
officials furnished to us, and certifications by officials of Borrower and
others, without undertaking to verify the same by independent investigation.
The Loan is made pursuant to the Agreement. Under the Agreement,
Borrower has agreed to make payments sufficient to pay when due the principal
(including sinking fund installments) of, and premium (if any) and interest on
the Loan. Such payments and other moneys payable to the Authority or Lender
under the Agreement, including proceeds derived from any security provided
thereunder (collectively, the "Revenues"), and the rights of the Authority under
the Agreement to receive the same (excluding, however, certain administrative
fees, indemnification and reimbursements), are pledged and assigned by the
Authority as security for the repayment of the Lender pursuant to the Agreement
(the "Lender Loan"). The Lender Loan is a limited obligation of the Authority
payable solely from the Revenues.
We express no opinion with respect to compliance by Borrower with
applicable legal requirements in connection with the acquisition, construction,
reconstruction, use, occupancy or operation of the Project.
Based on our examination, we are of opinion, as of the date hereof and
under existing law, as follows:
1. The Authority is a duly created and validly existing body corporate
and politic as an agency of the State of New Hampshire with the power to enter
into and perform the Agreement and the Escrow Agreement.
2. Each of the Agreement and the Escrow Agreement has been duly
authorized, executed and delivered by the Authority and is a valid and binding
obligation of the Authority enforceable upon the Authority. As provided in New
Xxxxxxxxx XXX 000-X;0,XX, the Agreement creates a valid lien on the rights of
the Authority to receive Revenues under the Agreement (except certain rights to
indemnification, reimbursements and fees).
3. Under existing law, interest on the Lender Loan is excluded from the
gross income of the owner thereof for federal income tax purposes except for
interest on the Lender Loan during any period while it is held by a "substantial
user" of the facilities financed with proceeds of the Lender Loan or by a
"related person" within the meaning of Section 147(a) of the Internal Revenue
Code of 1986 (the "Code") and except that Borrower or others, by taking action
after the date hereof that causes the $10,000,000 limitation set forth in
Section 144(a)(10) of the Code to be exceeded, may cause interest on the Lender
Loan to become included in gross income (retroactive to the date hereof, in the
case of the $40,000,000 limitation) for federal income tax purposes. It should
be noted that the interest on the Lender Loan is an item of tax preference for
purposes of the federal alternative minimum tax imposed on individuals and
corporations. In addition to the foregoing exceptions, the opinion set forth in
the first sentence of this paragraph is subject to the condition that the
Authority and Borrower comply with all requirements of the Code that must be
satisfied subsequent to the making of the Lender Loan in order that interest
thereon be, or continue to be, excluded from gross income for federal income tax
purposes. Borrower, and to the extent necessary, the Authority have covenanted
in the Agreement to comply with such requirements. Failure to comply with
certain of such requirements may cause the inclusion of interest on the Lender
Loan in gross income for federal income tax purposes to be retroactive to the
date of making of the Lender Loan. We express no opinion regarding other federal
tax consequences arising with respect to the Lender Loan.
4. Under existing statutes, interest on the Lender Loan is exempt from
the New Hampshire personal income tax on interest and dividends.
It is to be understood that the rights of the Lender and the
enforceability of the Agreement and the Escrow Agreement are subject to
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting creditors' rights heretofore or hereafter enacted to the extent
constitutionally applicable and that their enforcement may also be subject to
the exercise of judicial discretion in appropriate cases.
Yours faithfully,
F-1
Exhibit F to Loan Agreement
FORM OF OPINION OF COUNSEL TO BANK
(a) The Bank is, and was at all relevant times, a duly organized and
validly existing banking corporation in good standing under the laws of the
United States and ___________________________________ with full legal power and
authority to execute, deliver and to perform all of its obligations under the
Letter of Credit.
(b) The execution and delivery by the Bank of the Letter of Credit and
the performance by the Bank of its obligations thereunder are not inconsistent
with and do not violate the Bank's charter or by-laws.
(c) The Letter of Credit has been duly and validly executed and
delivered by the Bank and constitutes the legal, valid and binding obligation of
the Bank enforceable against the Bank in accordance with its terms, except as to
enforcement thereof may be limited by any bankruptcy, insolvency, moratorium,
reorganization or other laws relating to or affecting the enforcement of rights
of creditors generally and equitable principles of general applicability.
EXECUTION COPY
ESCROW AGREEMENT
Among
GE CAPITAL PUBLIC FINANCE, INC.
as Lender
and
SANWA BANK CALIFORNIA
as Bank
and
BUSINESS FINANCE AUTHORITY
OF THE STATE OF NEW HAMPSHIRE
as Issuer
and
ELEXSYS INTERNATIONAL, INC.
as Borrower
and
NATIONAL CITY BANK OF MINNEAPOLIS
as Escrow Agent
Dated as of December 1, 1996
8
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (REAL ESTATE) is made and entered into as of
December 1, 1996, by and among National City Bank of Minneapolis, a national
banking association ("Escrow Agent"), GE Capital Public Finance, Inc., a
corporation duly organized and existing under the laws of the State of Delaware
("Lender"), Sanwa Bank California ("Bank"), Business Finance Authority of the
State of New Hampshire, a body corporate and politic as an agency of the State
of New Hampshire ("Issuer"), and Elexsys International, Inc., a Delaware
corporation ("Borrower").
ARTICLE I
RECITALS
Section 1.01. Lender, Issuer and Borrower have entered into a Loan
Agreement dated as of December 1, 1996 (the "Loan Agreement"), a duplicate
original of which has been furnished to Escrow Agent and Bank, whereby Lender
and Issuer have agreed to finance for Borrower the acquisition and renovation of
certain manufacturing facilities described in the Loan Agreement (the
"Project"), and Borrower has agreed to make Loan Payments (as defined in the
Loan Agreement) to Lender, as assignee of Issuer, in the manner and on the terms
set forth therein. As security for the Loan Payments, Borrower will cause Bank
to issue in favor of Lender an Irrevocable Letter of Credit pursuant to an
Accounts Receivable Credit Agreement (the "Reimbursement Agreement") between
Borrower and Bank. This Agreement is not intended to alter or change the rights
and obligations of Lender, Issuer and Borrower under the Loan Agreement or of
Borrower and Bank under the Reimbursement Agreement, but is entirely
supplemental thereto.
Section 1.02. The terms capitalized in this Agreement but not defined
herein shall have the meanings given to them in the Loan Agreement.
Section 1.03. Under the Loan Agreement, upon the satisfaction of
certain conditions precedent, Lender shall loan to Issuer and Issuer shall
deposit or cause to be deposited with Escrow Agent the sum of $2,700,000, to be
credited to the Escrow Fund established in Article 2 hereof. Amounts deposited
in the Escrow Fund shall be loaned to Borrower and shall be used by Borrower to
pay the Project Costs (as defined in the Loan Agreement), and, to the extent not
needed for this purpose, to pay or prepay Principal coming due under the Loan
Agreement, all as hereinafter provided.
Section 1.04. Under the Loan Agreement, Borrower will cause the Project
to be acquired and constructed and to the extent the amounts deposited with
Escrow Agent is insufficient to complete the Project, Borrower shall complete
the Project with its own funds.
Section 1.05. Lender, Bank, Issuer and Borrower agree to employ Escrow
Agent to receive, hold, invest and disburse the moneys paid to Escrow Agent by
Lender as described in Section 1.03, all as hereinafter described; provided,
however, that Escrow Agent shall not be obligated to assume or perform any
obligation of Lender, Issuer, Borrower, or Bank with respect thereto or under
the Loan Agreement or Reimbursement Agreement by reason of anything contained in
this Agreement.
Section 1.06. Each of the parties has authority to enter into this
Agreement, and has taken all actions necessary to authorize the execution of
this Agreement by the officers whose signatures are affixed hereto.
ARTICLE II
ESCROW FUND
Section 2.01. Escrow Agent shall establish a special escrow fund
designated as the "GECPF/BFA/Elexsys International Escrow Fund" (the "Escrow
Fund"), shall keep such Escrow Fund separate and apart from all other funds and
moneys held by it and shall administer such Escrow Fund as provided in this
Agreement.
Section 2.02. All moneys paid to Issuer by Lender pursuant to Section
1.03 of this Agreement shall be credited to the Escrow Fund. Escrow Agent shall
use the moneys in the Escrow Fund to pay Project Costs, upon receipt with
respect thereto of a Payment Request Form attached hereto as Exhibit A, executed
by Lender, Bank and Borrower, fully completed and with all supporting documents
described therein attached thereto and the Letter of Credit. Upon receipt of a
Payment Request Form with respect to any Project Costs, an amount equal to the
Project Costs as shown therein shall be paid directly to the person or entity
entitled to pay as specified therein.
Section 2.03. On September 30, 1997, Escrow Agent shall pay: (a) to
Lender in prepayment of the Loan, an amount equal to the entire remaining
balance on deposit in the Escrow Fund, less the sum of (i) an amount equal to
the Project Costs for which Escrow Agent has received a fully and properly
completed Payment Request Form and which has not been paid, and (ii) the amount
of any deposit by Borrower pursuant to Section 3.04 hereof remaining on deposit
in the Escrow Fund; and (b) to Borrower the entire remaining balance on deposit
in the Escrow Fund less the amount referred to in clause (a)(i) of this Section.
The amount paid to Lender shall be applied first to interest accrued on the Loan
and next to the Principal portion of the Loan Payments in the inverse order of
maturity.
Section 2.04. Upon written notice (a) from Lender or Borrower that an
Event of Default has occurred under the Loan Agreement, (b) from Bank that an
event of default as occurred under the Reimbursement Agreement, or (c) from
Borrower that Borrower has determined not to complete the Project, Escrow Agent
shall liquidate all investments held in the Escrow Fund and transfer the
proceeds thereof and all other moneys held in the Escrow Fund to Lender to be
applied first to interest accrued on the Loan and next to the Principal portion
of the Loan Payments in the inverse order of maturity.
Section 2.05. Escrow Agent shall only be responsible for the
safekeeping and investment of the moneys held in the Escrow Fund, and the
disbursement thereof in accordance with this Article, and shall not be
responsible for the authenticity or accuracy of such certifications or
documents, the application of amounts paid pursuant to such certifications by
the persons or entities to which they are paid, or the sufficiency of the moneys
credited to the Escrow Fund to make the payments herein required.
ARTICLE III
MONEYS IN ESCROW FUND; INVESTMENT
Section 3.01. The moneys and investments held by Escrow Agent under
this Agreement are irrevocably held in trust for the benefit of Borrower, Issuer
and Lender, and such moneys, together with any income or interest earned
thereon, shall be expended only as provided in this Agreement, and shall not be
subject to levy or attachment or lien by or for the benefit of any creditor of
Borrower, Bank, Issuer or Lender. Lender, Issuer, Borrower and Escrow Agent
intend that the Escrow Fund constitute an escrow account in which Borrower has
no legal or equitable right, title or interest until satisfaction in full of all
conditions contained herein and in the Loan Agreement for the disbursement of
funds by Escrow Agent therefrom. However, if the parties' intention that
Borrower shall have no legal or equitable right, title or interest until all
conditions for disbursement are satisfied in full is not respected in any legal
proceeding, the parties hereto intend that Lender and Bank have a security
interest in the Escrow Fund, and such security interest is hereby granted to
Lender and Bank by Borrower, to secure payment of all sums due to Lender, in its
own capacity and assignee of Issuer, under the Loan Agreement and all sums due
to Bank under the Reimbursement Agreement. For such purpose, Escrow Agent hereby
agrees to act as agent for Lender in connection with the perfection of such
security interest and agrees to note, or cause to be noted, on all books and
records relating to the Escrow Fund, Lender's interest therein.
Section 3.02. Moneys held by Escrow Agent hereunder shall be invested
and reinvested by Escrow Agent upon order of Borrower only in Qualified
Investments, as defined in Section 3.05. Such investments shall be registered in
the name of Escrow Agent and held by Escrow Agent for the benefit of Lender,
Bank, Issuer and Borrower. With the approval of Borrower, Escrow Agent may
purchase or sell to itself or any affiliate, as principal or agent, investments
authorized by this Article. Such investments and reinvestments shall be made
giving full consideration for the time at which funds are required to be
available.
Section 3.03. Escrow Agent shall, without further direction from
Borrower, sell such investments as and when required to make any payment from
the Escrow Fund. Any income received on such investments shall be credited to
the Escrow Fund.
Section 3.04. Escrow Agent shall furnish to Borrower, Bank and Lender
reports accounting for all investments and interest and income therefrom. Such
accounting shall be furnished no less frequently than every three (3) months and
upon request of Lender, Bank or Borrower. None of Lender, Bank, Issuer or Escrow
Agent shall be responsible or liable for any loss suffered in connection with
any investment of moneys made by Escrow Agent in accordance with this Article
(other than Escrow Agent in its capacity as obligor under any Qualified
Investment). In the event funds in the Escrow Fund are insufficient to pay the
Project Costs, Borrower shall deposit additional funds into the Escrow Fund to
be disbursed in accordance with the provisions hereof, and such additional funds
deposited by Borrower shall be disbursed from the Escrow Fund before any other
funds held in the Escrow Fund.
Section 3.05. As used in this Agreement, the term Qualified Investments
means (a) securities which are general obligations of or are guaranteed as to
the payment of principal and interest by the United States of America; (b)
obligations, debentures, notes or other evidence of indebtedness issued or
guaranteed by any of the following: Federal Home Loan Bank System, Government
National Mortgage Association, Farmers Home Administration, Federal Home Loan
Mortgage Corporation or Federal Housing Administration; (c) commercial paper
issued by corporations organized under the laws of a state of the United States
which is rated in the highest rating category by Standard & Poor's Ratings Group
("S&P") or Xxxxx'x Investors Service, Inc.; (d) money market funds registered
under the Investment Company Act of 1940 whose shares are registered under the
Securities Act of 1933 and which have a rating of "AAAm-G", "AAAm" or "AAm" by
S&P; or (e) certificates of deposit issued by or other forms of deposit in any
national or state bank to the extent that such deposits are fully insured by the
Federal Deposit Insurance Corporation or any successor agency which is backed by
the full faith and credit of the United States. Derivative products shall not
constitute Qualified Investments.
ARTICLE IV
ESCROW AGENT'S AUTHORITY; INDEMNIFICATION
Section 4.01. Escrow Agent may act in reliance upon any writing or
instrument or signature which it, in good faith, believes to be genuine, may
assume the validity and accuracy of any statement or assertion contained in such
a writing or instrument, and may assume that any person purporting to give any
writing, notice, advice or instructions in connection with the provisions hereof
has been duly authorized to do so. Escrow Agent shall not be liable in any
manner for the sufficiency or correctness as to form, manner and execution, or
validity of any instrument deposited with it, nor as to the identity, authority
or right of any person executing the same; and its duties hereunder shall be
limited to those specifically provided herein.
Section 4.02. Unless Escrow Agent is determined to be negligent or
liable for misconduct with regard to its duties hereunder, Borrower hereby
agrees to indemnify Escrow Agent and hold it harmless from any and all claims,
liabilities, losses, actions, suits or proceedings at law or in equity, or any
other expense, fees or charges of any character or nature, which it may incur or
with which it may be threatened by reason of its acting as Escrow Agent under
this Agreement; and in connection therewith, to indemnify Escrow Agent against
any and all expenses, including reasonable attorneys' fees and the cost of
defending any action, suit or proceeding or resisting any claim. Escrow Agent
shall be vested with a lien on all property deposited hereunder for
indemnification, for reasonable attorneys' fees, court costs, for any suit,
interpleader or otherwise, or any other reasonable expenses, fees or charges of
any character or nature, which may be incurred by Escrow Agent by reason of
disputes arising among Borrower, Issuer, Bank and Lender as to the correct
interpretation of the Loan Agreement or this Agreement and instructions given to
Escrow Agent hereunder, or otherwise, with the right of Escrow Agent, regardless
of the instructions aforesaid, to hold the said property until and unless said
additional expenses, fees and charges shall be fully paid.
Section 4.03. If Borrower, Issuer, Bank or Lender shall be in
disagreement about the interpretation of the Loan Agreement, the Reimbursement
Agreement or this Agreement, or about the rights and obligations, or the
propriety of any action contemplated by Escrow Agent hereunder, Escrow Agent
may, but shall not be required to, file an appropriate civil action to resolve
the disagreement. Escrow Agent shall be indemnified by Borrower for all costs,
including reasonable attorneys' fees, in connection with such civil action, and
shall be fully protected in suspending all or part of its activities under this
Agreement until a final judgment in such action is received.
Section 4.04. Escrow Agent may consult with counsel of its own choice
and shall have full and complete authorization and protection with the opinion
of such counsel. Escrow Agent shall otherwise not be liable for any mistakes of
facts or errors of judgment, or for any acts or omissions of any kind unless
caused by its negligence or misconduct.
ARTICLE V
ESCROW AGENT'S COMPENSATION
Borrower hereby agrees to pay Escrow Agent as compensation for the
services to be rendered hereunder the fees and other amounts described in
Exhibit B hereto and will pay and/or reimburse Escrow Agent upon request for all
expenses, disbursements and advances, including reasonable attorneys' fees,
incurred or made by it in connection with carrying out its duties hereunder.
ARTICLE VI
CHANGE OF ESCROW AGENT
Section 6.01. A national banking association located in the United
States or a state bank or trust company organized under the laws of a state of
the United States, qualified as a depository of public funds, may be substituted
to act as Escrow Agent under this Agreement upon agreement of the parties
hereto. Such substitution shall not be deemed to affect the rights or
obligations of the parties. Upon any such substitution, Escrow Agent agrees to
assign to such substitute Escrow Agent its rights under this Agreement.
Section 6.02. Escrow Agent or any successor may at any time resign by
giving mailed notice to Borrower, Issuer, Bank and Lender of its intention to
resign and of the proposed date of resignation, which shall be a date not less
than thirty (30) days after such notice is deposited in the United States mail
with postage fully prepaid, unless an earlier resignation date and the
appointment of a successor Escrow Agent shall have been or are approved by
Borrower, Issuer, Bank and Lender.
Section 6.03. Escrow Agent may appoint an agent to exercise any of the
powers, rights or remedies granted to Escrow Agent under this Agreement, and to
hold title to property or to take any other action which may be desirable or
necessary.
ARTICLE VII
ADMINISTRATIVE PROVISIONS
Section 7.01. Escrow Agent shall keep complete and accurate records of
all moneys received and disbursed under this Agreement, which shall be available
for inspection by Borrower, Issuer, Bank or Lender, or the agent of any of them,
at any time during regular business hours.
Section 7.02. All notices, certificates, requests, demands and other
communications provided for hereunder shall be in writing and shall be (a)
personally delivered, (b) sent by first class United States mail, (c) sent by
overnight courier of national reputation, or (d) transmitted by telecopy, in
each case addressed to the party to whom notice is being given at its address as
set forth below and, if telecopied, transmitted to that party at its telecopier
number set forth above or, as to each party, at such other address or telecopier
number as may hereafter be designated by such party in a written notice to the
other party complying as to delivery with the terms of this Section. All such
notices, requests, demands and other communications shall be deemed to have been
given on (a) the date received if personally delivered, (b) when deposited in
the mail if delivered by mail, (c) the date sent if sent by overnight courier,
or (d) the date of transmission if delivered by telecopy.
Section 7.03. This Agreement shall be construed and governed in
accordance with the laws of the State of New Hampshire.
Section 7.04. Any provisions of this Agreement found to be prohibited
by law shall be ineffective only to the extent of such prohibition, and shall
not invalidate the remainder of this Agreement or the Loan Agreement.
Section 7.05. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns.
Specifically, as used herein the term "Lender" means any person or entity to
whom Lender has assigned its right to receive payments under the Loan Agreement
and any payments due to Lender hereunder from after the date when a duplicate
original of such assignment is filed with Escrow Agent.
Section 7.06. This Agreement may be simultaneously executed in several
counterparts, each of which shall be an original and all of which shall
constitute but one and the same Agreement.
Section 7.07. This Agreement shall terminate upon disbursement by
Escrow Agent of all moneys held by it hereunder.
Section 7.08. This Agreement (and, with respect to Lender, Issuer and
Borrower, together with the Loan Agreement) constitutes the entire agreement of
the parties relating to the subject matter hereof.
Section 7.09. The Bank may become a party to this Agreement by
executing and delivering a counterpart signature page. Pending such execution
and delivery this Agreement shall be a binding agreement among the parties other
than the Bank.
[REMAINDER OF PAGE INTENTIONALLY BLANK; EXECUTION PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written above.
GE CAPITAL PUBLIC FINANCE, INC., NATIONAL CITY BANK OF
Lender MINNEAPOLIS, Escrow Agent
By:/s/ Xxxxxx Xxxx By: (Illegible)
----------------
Title: Vice President Title:Assistant Vice President
Address: 0000 Xxxxxxxxxx Xxxx Xxxx. Address:651 Nicollet Mall
Suite 470 Minneapolis, MN 55402
Xxxxxxxxxxx, XX 00000 Telephone: (000) 000-0000
Telephone: (000) 000-0000 Telecopier:(000) 000-0000
Telecopier:(000) 000-0000
BUSINESS FINANCE AUTHORITY OF ELEXSYS INTERNATIONAL, INC.
THE STATE OF NEW HAMPSHIRE, Issuer Borrower
Borrower
By:/s/ Xxxx Xxxxxxx By:/s/ Xxxxxxx Xxxxxxx
------------------ -------------------
Title: Executive Director Title: Principal Financial Officer
and Duly Authorized Officer
Address: 00 Xxxxx Xxxxxx, Xxxxx 000 Address:41 Simon Street
Concord, NH 03301 Xxxxxx, XX 00000
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Telecopier: (000) 000-0000 Telecopier: (000) 000-0000
SANWA BANK CALIFORNIA, Bank
By:______________________________
Title:___________________________
Address: 000 Xxxxxxx Xxxxxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
A-4
Exhibit A to Escrow Agreement
FORM OF PAYMENT REQUEST FORM
Payment Request Form No. _____
Elexsys International, Inc., as borrower ("Borrower") under that
certain Loan Agreement dated as of December 1, 1996 (the "Loan Agreement"), by
and among Business Finance Authority of the State of New Hampshire ("Issuer"),
GE Capital Public Finance, Inc. ("Lender") and Borrower, hereby requests
National City Bank of Minneapolis, as escrow agent ("Escrow Agent") under the
Escrow Agreement dated as of December 1, 1996 (the "Escrow Agreement") among
Escrow Agent, Lender, Issuer, Borrower and Sanwa Bank California ("Bank"), to
make payment from the Escrow Fund (as defined in the Escrow Agreement) to the
following party or parties, at the addresses set forth below:
Cost of Issuance
Amount to or Project
Payee Address be paid Description
----- ------- --------- ----------------
In connection therewith, the undersigned officer of Borrower hereby
certifies as follows:
1. All of the provisions of the Loan Agreement are
incorporated herein by reference and capitalized terms used herein and
not defined shall have the meanings assigned to them in the Loan
Agreement.
2. The Project subject to this Payment Request Form
comprises a portion of the Project described in the Loan Agreement, and
has been inspected and accepted by Borrower.
3. The payments to be made to the payees set forth
above are for either the costs of issuance or Project Costs described
above, or reimbursement to Borrower therefor, and the payments have not
been the basis for a prior request which has been paid, and the amount
remaining in the Escrow Fund is sufficient to pay the remaining Project
Costs.
4. The payment or requisition is for work actually
performed or materials or property actually supplied to the Project
site prior to the date hereof.
5. All of Borrower's representations, covenants and
warranties contained in the Loan Agreement were true and accurate in
all material respects as of the date made, and remain true and accurate
in all material respects as of the date of this Payment Request Form,
and Borrower has fully and satisfactorily performed all of its
covenants and obligations to date required under the Loan Agreement. No
Default or Event of Default has occurred under the Loan Agreement.
6. This request for payment contains no items
representing payment on account of any retained percentage entitled to
be retained by Borrower at the date hereof.
7. The undersigned has reviewed the provisions of the
Statement as to Tax Exempt Status, and the payment of this requisition
will not result in any proceeds of the obligation evidenced by the Loan
Agreement being expended in contradiction of the provisions thereof and
representations made therein.
8. Attached hereto as Attachment A are invoices
and/or bills of sale relating to the Project and, if such invoices have
been paid by Borrower, evidence of payment thereof.
9. If this Payment Request Form relates to the final
disbursement from the Escrow Fund, attached hereto as Attachment B is
an executed Certificate of Acceptance in the form required by the Loan
Agreement.
10. Attached hereto as Attachment C is an insurance
certificate in the form required by the Loan Agreement.
11. All contractors, subcontractors and suppliers of
materials, property for the Project or labor have been paid for their
share of work, materials or property through the date of the prior
Payment Request Form (if any).
12. The payment or reimbursement requested by this
Payment Request Form will be disbursed in payment of, or is
reimbursement for the Borrower's prior payment of, work performed or
completed on, or materials or property supplied for the Project by the
contractors, subcontractors or suppliers listed in Attachment D hereto.
13. All amounts previously requested and disbursed
from the Escrow Fund for payment of contractors, subcontractors and
suppliers of materials and labor have been so applied.
14. This request does not request reimbursement for
any payment or payments for any obligations originally paid or
incurred, for federal income tax purposes, before September 25, 1996.
15. Borrower understands that Lender is relying on
the certifications herein with regard to and in connection with
approving the disbursement requested hereby.
16. Attached hereto as Attachment E is an appropriate
endorsement or continuation of the title insurance policy delivered
pursuant to the Reimbursement Agreement increasing the coverage of such
policy to an amount at least equal to the amount specified in such
paragraph less the amount remaining in the Escrow Fund after
disbursement of the current requisition.
17. Attached hereto as Exhibit F are partial releases
of mechanics' liens through the date of the last payment request (if
any) by those contractors, subcontractors, suppliers and laborers
having received payments for work on or materials or property supplied
to the Project in excess of $5,000.00.
18. Attached hereto as Exhibit G is a copy of the
notice of the anticipated funding date for the advance posted on the
Project site by Borrower or its agent and certified as to its posting
date by Borrower, all in compliance with New Hampshire RSA 447:12-b,
and such other evidence as may reasonably be required by Lender or Bank
of Borrower's compliance with New Hampshire RSA 447:12-a and b.
19. Borrower has satisfied all of the conditions
contained in Article III of the Loan Agreement and the Letter of
Credit has been delivered to Lender.
ELEXSYS INTERNATIONAL, INC.
By ______________________________________
Title_____________________________________
Date:
APPROVED BY LENDER:
GE CAPITAL PUBLIC FINANCE, INC.
By ______________________________________
Title_____________________________________
Date:
APPROVED BY BANK:
SANWA BANK CALIFORNIA
By ______________________________________
Title_____________________________________
Date:
