EXHIBIT 10.8
BOND PURCHASE AGREEMENT
BOND PURCHASE AGREEMENT dated August 8, 2000 among ▇▇▇▇▇▇▇ COUNTY
INDUSTRIAL DEVELOPMENT AUTHORITY (the "Issuer"), INNOVATIVE SOLUTIONS AND
SUPPORT, LLC (the "Borrower") and PNC CAPITAL MARKETS, INC., as Underwriter (the
"Underwriter").
A. The Issuer is issuing its Industrial Development Revenue Bonds,
2000 Series A (Innovative Solutions and Support, LLC Project) in the aggregate
principal amount of $4,335,000 (the "Bonds") pursuant to a Trust Indenture dated
as of August 1, 2000 (the "Indenture") between the Issuer and Chase Manhattan
Trust Company, National Association, as Trustee (the "Trustee").
B. Pursuant to a Loan Agreement dated as of August 1, 2000 between
the Issuer and the Borrower (the "Loan Agreement"), the proceeds of the Bonds
are being applied to finance the costs of the acquisition, construction and
equipping of an approximately 45,000 square foot manufacturing facility located
at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ (the "Project") to be owned by
the Borrower. Under the Loan Agreement, the Borrower is obligated to make loan
payments to the Trustee in amounts and at the times sufficient to pay, when due,
the principal of, premium, if any, on and interest on the Bonds.
C. The Bonds will initially be issued in the Weekly Mode and bear
interest at a Weekly Rate as provided in the Indenture (such terms being used
herein as defined in the Indenture). Subject to and upon compliance with the
terms of the Bonds and the Indenture, Bonds may be tendered for purchase upon
demand of the owners thereof. The Bonds will also be subject to mandatory tender
for purchase under certain circumstances as provided in the Indenture. The
Issuer has appointed PNC Capital Markets, Inc. as Remarketing Agent (including
any successor in such capacity, the "Remarketing Agent") under the Indenture for
the purpose of remarketing Bonds which have been optionally tendered for
purchase pursuant to the terms and conditions set forth in the Indenture. In
connection with such appointment, the Borrower and the Remarketing Agent have
entered into a Remarketing Agreement dated as of August 1, 2000 (the
"Remarketing Agreement").
D. The Bonds are being issued pursuant to one or more resolutions
adopted by the Issuer on April 19, 2000 (the "Resolution") and are secured by an
assignment by the Issuer under the Indenture of (i) the Issuer's rights under
the Loan Agreement to receive loan payments corresponding in time and amounts to
the payments of principal of, premium, if any, on and interest on the Bonds and
(ii) the Issuer's rights to all moneys and investments held from time to time in
the Project Fund and the Bond Fund created under the Indenture.
E. In order to facilitate the sale of the Bonds, the Borrower will
cause to be delivered to the Trustee an Irrevocable Letter of Credit (the
"Letter of Credit") issued by PNC
Bank, National Association (as issuer of the Letter of Credit, the "Bank") under
which the Trustee will be authorized to draw up to (1) an amount equal to the
principal of the Bonds outstanding (i) to pay the principal of the Bonds when
due at maturity or upon redemption or acceleration or (ii) to pay the portion of
the purchase price of Bonds tendered for purchase pursuant to the Indenture
corresponding to the principal of such Bonds to the extent remarketing proceeds
are not available for such purpose, plus (2) an amount equal to 50 days accrued
interest on the Bonds at a maximum rate of 12% per annum (i) to pay interest on
the Bonds when due or (ii) to pay the portion of the purchase price of Bonds
tendered for purchase pursuant to the Indenture corresponding to the accrued
interest, if any, on such Bonds to the extent remarketing proceeds are not
available for such purpose.
F. To provide for the execution of the Letter of Credit, the
Borrower will enter into a Reimbursement, Credit and Security Agreement dated as
of August 1, 2000 (the "Reimbursement Agreement") with the Bank pursuant to
which the Borrower will be obligated to reimburse the Bank, with interest for
all draws under the Letter of Credit. The Borrower's obligations to the Bank
under the Reimbursement Agreement will be secured by (i) a mortgage and security
agreement delivered by the Borrower to the Bank covering the Project, (ii) an
assignment of construction and development documents by the Borrower to the Bank
with respect to the Project, (iii) a security agreement among the Borrower,
certain affiliates of the Borrower and the Bank creating a first lien security
interest in the equipment included in the Project and other personal property of
the Borrower and such affiliates, and (iv) guaranties delivered by certain
affiliates of the Borrower to the Bank.
G. The Bonds are limited obligations of the Issuer and are payable
solely from payments made by the Borrower under the Loan Agreement, from
drawings under the Letter of Credit and from other moneys available for such
purpose under and in accordance with the Indenture. Neither the general credit
nor the taxing power of the Issuer, the Commonwealth of Pennsylvania, the County
of ▇▇▇▇▇▇▇ or any other political subdivision thereof is pledged to the payment
of the Bonds, and the Bonds shall not be or be deemed to be a general obligation
of the Issuer or an obligation of the Commonwealth of Pennsylvania, the County
of ▇▇▇▇▇▇▇ or any other political subdivision thereof. The Issuer has no taxing
power.
H. It is intended that the Bonds will constitute a qualified small
issue within the meaning of Section 144(a) of the Internal Revenue Code of 1986,
as amended, and the rules and regulations thereunder (the "Code") so that
interest on the Bonds will be excludable from gross income for purposes of
federal income tax, and that in reliance thereon and on the support of the Bonds
by the Letter of Credit issued by the Bank, the Underwriter may arrange for the
sale of the Bonds without registration under the Securities Act of 1933, as
amended (the "Securities Act").
I. The Borrower acknowledges that the Issuer is selling the Bonds
and the Underwriter is purchasing the Bonds in reliance on the representations,
covenants and
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indemnities set forth herein. A Preliminary Official Statement dated July 31,
2000 (including the Appendices thereto, the "Preliminary Official Statement")
has been prepared for use in connection with the offer and sale of the Bonds and
has been delivered to the parties to this Bond Purchase Agreement. The
Preliminary Official Statement as it may be amended or supplemented as of the
Closing Date (hereinafter defined) is herein referred to as the "Final Official
Statement", and the Preliminary Official Statement and the Final Official
Statement are herein referred to collectively as the "Official Statement".
J. The professional advisors referred to in this Bond Purchase
Agreement are:
Bond Counsel: ▇▇▇▇▇▇▇ & ▇▇▇, a Professional Corporation
Reading, Pennsylvania
Issuer Counsel: ▇▇▇▇▇▇ ▇'▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇, P.C.
West Chester, Pennsylvania
Borrower Counsel: ▇▇▇▇▇▇▇ & ▇▇▇, a Professional Corporation
Reading, Pennsylvania
Bank Counsel: ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & Ingersoll, LLP
Philadelphia, Pennsylvania
Underwriter's ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP
Counsel: Philadelphia, Pennsylvania
K. The Issuer and the Borrower desire the Underwriter to arrange for
the sale of the Bonds to the Purchasers or other initial purchasers, according
to the terms and subject to the conditions set forth or described herein.
NOW, THEREFORE, in consideration of the covenants herein contained and
intending to be legally bound, the Issuer, the Borrower and the Underwriter
hereby agree as follows:
Section 1. Definitions. Capitalized terms used and defined herein
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shall have the meanings set forth herein. Capitalized terms used and not defined
herein shall have the respective meanings ascribed to such terms in the
Indenture, unless different meanings clearly appear from the context.
Section 2. Offer to Purchase; Purchase Price; Closing. The Underwriter
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hereby offers to enter into this Bond Purchase Agreement with the Issuer and the
Borrower, for the purchase by the Underwriter and the sale by the Issuer of the
Bonds. This offer is made subject
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to acceptance hereof by the Issuer and the Borrower on the date hereof. Upon
such acceptance, as evidenced by the signatures of the Chairman or Vice Chairman
of the Issuer and the duly authorized representative of the Borrower in the
spaces provided below, this Bond Purchase Agreement shall be in full force and
effect in accordance with its terms and shall be binding upon the Issuer, the
Borrower and the Underwriter.
Upon the terms and conditions and upon the basis of the
representations and warranties herein set forth, the Underwriter hereby agrees
to purchase from the Issuer, and the Issuer hereby agrees to sell to the
Underwriter all (but not less than all) of the Bonds at a purchase price equal
to 98.75% of the principal amount thereof. In addition, the Borrower shall pay
to the Underwriter on the date of Closing (as defined below) an amount equal to
any and all expenses (including without limitation fees and expenses of counsel)
of the Underwriter. The Bonds shall be dated the date of Closing (hereinafter
defined), shall mature on such date (subject to prior redemption as described in
the Indenture), shall bear interest at such rate, and shall be payable at the
times and in the manner, and shall otherwise have the terms and provisions, set
forth in the Official Statement.
The Underwriter intends to offer the Bonds at a price not in excess of
the initial offering price or prices set forth in the Official Statement;
provided, however, that the Underwriter may change such initial offering price
or prices as it deems necessary in connection with the offering of the Bonds
without any requirement of prior notice, and may offer and sell the Bonds to
certain institutions at prices lower than those stated in the Official
Statement.
Section 3. Delivery of and Payment for the Bonds.
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(a) At or prior to 11:00 a.m., prevailing time in Philadelphia,
Pennsylvania, on August 8, 2000, or at such other time or date as shall have
been mutually agreed upon by the Issuer, the Borrower and the Underwriter, the
Issuer will deliver or cause to be delivered to the Underwriter the Bonds, in
definitive form, duly executed and authenticated by the Trustee, together with
the other documents hereinafter mentioned; and, subject to the conditions
contained herein, the Underwriter will accept such delivery and pay the purchase
price of the Bonds, plus accrued interest, if any, in immediately available
funds, by wire transfer, payable to the order of the Trustee.
(b) Delivery of the definitive Bonds as aforesaid shall be made
at the offices of The Depository Trust Company in New York, New York or at such
other location as may be designated by the Underwriter at least two business
days prior to Closing. Payment for the Bonds shall be made at the offices of the
Trustee in Philadelphia, Pennsylvania, and delivery of the other documents shall
be made at the offices of ▇▇▇▇▇▇▇ & ▇▇▇, ▇▇▇▇▇, Pennsylvania, or at such other
locations as may be agreed upon by the parties. Such payment and the related
delivery is herein called the "Closing." The Bonds will be delivered as fully-
registered bonds, bearing proper CUSIP numbers and registered in the name of
Cede & Co., as nominee of The
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Depository Trust Company, New York, New York, which will act as securities
depository for the Bonds.
(c) After execution by the Issuer and authentication by the
Trustee, the Bonds shall be held in safe custody by the Trustee or any
authorized agent for the Trustee. The Trustee shall release or authorize the
release of the Bonds from safe custody at the Closing upon receipt of payment
for the Bonds as aforesaid.
Section 4. Representations of Issuer. In consideration of the
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foregoing and to induce the Underwriter to purchase the Bonds, the Issuer hereby
represents to the Underwriter and for the benefit of the Purchasers that:
(a) The Issuer is a public instrumentality and body corporate
and politic of the Commonwealth of Pennsylvania. Under the Pennsylvania
Economic Development Financing Law, as amended (the "Act") and by the
Resolution, the Issuer has full power and authority to undertake the
financing of the Project, to execute, deliver and perform its obligations
under the Indenture, the Loan Agreement and this Bond Purchase Agreement,
and to issue and deliver the Bonds.
(b) The Issuer has duly adopted the Resolution and authorized
the Indenture, the Loan Agreement and this Bond Purchase Agreement, the
issuance and sale of the Bonds, and all actions necessary or appropriate to
carry out the same, and each such document, when executed and delivered by
the Issuer, will constitute the legal, valid and binding obligation of the
Issuer, enforceable against the Issuer in accordance with its terms, except
to the extent that the enforceability thereof may be limited by bankruptcy,
insolvency or other similar laws or equitable principles affecting the
enforcement of creditors' rights generally.
(c) The execution, delivery and performance by the Issuer of the
Indenture, the Loan Agreement and this Bond Purchase Agreement, and the
issuance and delivery of the Bonds, do not and will not violate or conflict
with any provision of the Constitution of the Commonwealth of Pennsylvania
or any applicable statute (including the Act), or any rule, order,
regulation, judgment or decree of any court, agency or other governmental
or administrative board or body to which the Issuer is subject, or conflict
with or constitute a breach of or a default under any indenture, mortgage,
deed of trust, agreement or other instrument to which the Issuer is a party
or by which it is bound.
(d) No additional or further approval, consent or authorization
of any governmental or public body or agency not already obtained prior to
the issuance of the Bonds is required to be obtained by the Issuer in
connection with the entering into and performing of its obligations under
the Indenture, the Loan Agreement and this Bond Purchase Agreement and the
issuance and delivery of the Bonds.
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(e) There is no action, suit, proceeding, investigation or
inquiry by or before any court, agency or other governmental or
administrative board or body pending or, to the knowledge of the Issuer,
threatened challenging or contesting the powers of the Issuer, the
authorization of any members, directors, commissioners or officers of the
Issuer to act in their respective capacities, the issuance of the Bonds,
the validity or enforceability of the Indenture, the Loan Agreement or this
Bond Purchase Agreement, or the performance by the Issuer of any of its
obligations thereunder.
(f) The information under the caption "The Issuer" in the
Official Statement is correct and complete, and the Issuer has approved and
authorized the use of the Official Statement by the Underwriter.
The foregoing representations shall survive Closing.
Section 5. Representations of Borrower. In consideration of the
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foregoing, to induce the Issuer to issue the Bonds and to induce the Underwriter
to purchase the Bonds, the Borrower hereby represents and warrants to the Issuer
and the Underwriter that:
(a) The Borrower is a limited liability company duly organized
and validly existing under the laws of the Commonwealth of Pennsylvania,
with full power and authority to undertake the financing of the Project as
contemplated by this Bond Purchase Agreement and the Official Statement, to
execute and deliver the Loan Agreement, the Reimbursement Agreement, the
Remarketing Agreement, this Bond Purchase Agreement and all other documents
delivered by the Borrower in connection with the financing of the Project
and to perform its obligations thereunder.
(b) The execution and delivery by the Borrower of the Loan
Agreement, the Reimbursement Agreement, the Remarketing Agreement, this
Bond Purchase Agreement and all other documents delivered by the Borrower
in connection with the financing of the Project, have been duly authorized
by the Borrower, and each such document, when executed and delivered by the
Borrower, will constitute the legal, valid and binding obligation of the
Borrower, enforceable against the Borrower in accordance with its terms,
except to the extent that the enforceability thereof may be limited by
bankruptcy, insolvency or other similar laws or equitable principles
affecting the enforcement of creditors' rights generally and rights to
indemnity may be limited by applicable law. No approval or other action by
any governmental or administrative board or body is required in connection
with the execution, delivery or performance by the Borrower of the same,
except such as have been obtained.
(c) The execution, delivery and performance by the Borrower of
the Loan Agreement, the Reimbursement Agreement, the Remarketing Agreement,
this Bond Purchase Agreement and any other document delivered by the
Borrower in connection
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with the financing of the Project do not and will not violate or conflict
with any provision of any statute or any rule, order, regulation, judgment
or decree of any court, agency or other governmental or administrative
board or body to which the Borrower is subject, or violate, conflict with
or constitute a breach of or default under any provision of any indenture,
mortgage, deed of trust, agreement or other instrument to which the
Borrower is a party or by which the Borrower or any of its properties is
bound.
(d) All licenses, consents, approvals or authorizations of any
federal, state or local governmental agency required on the part of the
Borrower to be obtained in connection with the execution and delivery of
the Loan Agreement, the Reimbursement Agreement, the Remarketing Agreement
and this Bond Purchase Agreement, the performance by the Borrower of its
obligations thereunder and the Borrower's consummation of the transactions
contemplated thereby and by the Official Statement, have been duly
obtained, and the Borrower has complied with all applicable provisions of
law requiring any designation, declaration, filing, registration or
qualification with any governmental authority in connection therewith; it
being understood that the Borrower has obtained, or prior to the
commencement of acquisition, construction and/or equipping of each
component of the Project will obtain, all licenses, consents, approvals and
authorizations of any and all federal, state or local governmental
authorities required on the part of the Borrower to be obtained in
connection with the acquisition, construction and/or equipping of such
component of the Project, and that the Borrower has no reason to believe
that it will not be able to obtain, when required, all further governmental
licenses, consents, approvals and authorizations necessary for the
acquisition, construction, equipping and/or operation of the Project as
contemplated by the Loan Agreement and any and all other documents
delivered by the Borrower in connection with the financing of the Project.
(e) There is no action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court, public board or
body, pending or, to the knowledge of the Borrower, threatened against the
Borrower wherein an unfavorable decision, ruling or finding would have a
material adverse effect on the financial condition of the Borrower, the
acquisition, construction, equipping and/or operation of the Project, the
transactions contemplated by this Bond Purchase Agreement and the Official
Statement, the validity or enforceability of the Loan Agreement, the
Reimbursement Agreement, the Remarketing Agreement, this Bond Purchase
Agreement or any other document delivered by the Borrower in connection
with the financing of the Project or the existence or powers of the
Borrower. There is no existing violation by the Borrower of any applicable
statute, rule, order or regulation of any governmental body which could
materially and adversely affect the financial condition or operations of
the Borrower or the Project.
(f) The Official Statement (other than the information contained
therein under the caption "The Issuer" and in Appendix B thereto, with
respect to which
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no representation is made) does not contain an untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, and the Borrower hereby approves and authorizes the
use thereof by the Underwriter.
The foregoing representations and warranties shall survive Closing.
Section 6. Covenants of Issuer. The Issuer covenants that:
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(a) The Issuer will cooperate with the Underwriter in the
qualification of the Bonds (and, if necessary, any other security
contemplated by this Bond Purchase Agreement and the Official Statement)
for offering and sale in, and the determination of their eligibility for
investment under the laws of, such jurisdictions as the Underwriter shall
designate, provided that the Issuer shall not be required to qualify to do
business or consent to service of process in any state or jurisdiction
other than the Commonwealth of Pennsylvania and the Issuer's out-of-pocket
costs shall be paid out of the Bond proceeds or otherwise provided for.
(b) The Issuer will refrain from taking any action, with regard
to which it may exercise control, that would result in the loss of the
exclusion of the interest on the Bonds from gross income for federal income
tax purposes.
Section 7. Covenants of Borrower. The Borrower covenants that:
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(a) The Borrower will provide to the Underwriter not later than
the Closing Date the Final Official Statement in such quantity as the
Underwriter may reasonably request, and will use its best efforts to amend
the Final Official Statement if and as necessary so that it will not
contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(b) The Borrower will promptly notify the Underwriter of any
material adverse change with respect to the financing of the Project as
contemplated by this Bond Purchase Agreement and the Official Statement or
with respect to its business, properties or financial condition, occurring
before Closing which would require a change in the Official Statement in
order to make the information contained therein not misleading in
connection with the sale of the Bonds.
(c) The Borrower will cooperate with the Underwriter in the
qualification of the Bonds (and, if necessary, any other security
contemplated by this Bond Purchase Agreement or the Official Statement) for
offering and sale in, and the determination of their eligibility for
investment under the laws of, such jurisdictions as
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the Underwriter shall designate; provided that the Borrower shall not be
required to qualify to do business under the laws of any jurisdiction where
it is not now so qualified or to file any general consent to service of
process where it is not now so subject.
(d) The Borrower will refrain from taking any action, or
voluntarily permitting any action to be taken, that results in the loss of
the exclusion of the interest on the Bonds from gross income for federal
income tax purposes.
(e) To the extent permitted by applicable law, the Borrower will
indemnify, hold harmless, protect and defend the Issuer and its members,
directors, commissioners, officers and employees, past, present and future,
and the Underwriter and its directors, officers and employees, past,
present and future, and each person, if any, who controls the Underwriter
within the meaning of Section 15 of the Securities Act (hereinafter
collectively called the "Indemnified Parties"), against any and all losses,
claims, damages, liabilities or expenses whatsoever arising out of or based
upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Official Statement (other than the information
contained therein under the caption "The Issuer"), or any omission or
alleged omission to state therein a material fact necessary to make the
statements made therein, in light of the circumstances under which they
were made, not misleading or (ii) an allegation or determination that
registration under the Securities Act was required in connection with the
issuance or sale of the Bonds or that the Indenture should have been
qualified under the Trust Indenture Act of 1939, as amended. In case any
action or claim shall be brought or asserted against one or more of the
Indemnified Parties with respect to the matters subject to the indemnity
provided by this Section, the Indemnified Party or Parties shall promptly
notify the Borrower in writing, and the Borrower shall promptly assume the
defense thereof, including the employment of counsel satisfactory to such
Indemnified Party or Parties and the payment of all expenses. Any one or
more of the Indemnified Parties shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such
Indemnified Party or Parties unless (i) the employment thereof has been
specifically authorized by the Borrower, (ii) the Borrower has failed to
assume promptly the defense and employ counsel satisfactory to such
Indemnified Party or Parties or (iii) the named parties to any such action
(including any impleaded parties) include both such Indemnified Party or
Parties and the Borrower, and such Indemnified Party or Parties shall have
been advised by counsel that there may be one or more legal defenses
available to it which are different from or additional to those available
to the Borrower (in which case the Borrower shall not have the right to
assume the defense of such action on behalf of such Indemnified Party or
Parties), in any of which events such fees and expenses shall be borne by
the Borrower. The Borrower shall not be liable for any settlement of such
action effected without its consent (such consent not to be unreasonably
withheld), but if settled with the consent of the Borrower, or if there is
final judgement for the plaintiff in any such action
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with or without consent, the Borrower agrees to indemnify and hold harmless
the Indemnified Party or Parties from and against any loss or liability by
reason of settlement or judgement. The indemnity provided in this Section
includes reimbursement for expenses incurred by the Indemnified Parties in
investigating the claim and in defending it in accordance with the terms of
this Section. The indemnity provided in this Section shall survive Closing.
(f) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraph (e) of
this Section is due in accordance with its terms but is for any reason
unavailable or insufficient, the Borrower shall contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending the same)
to which the Underwriter may be subject in such proportion so that the
Borrower bears them in a portion that considers the benefits received by
the Borrower from the issuance of the Bonds, the Borrower's knowledge and
access to information concerning the matter with respect to which the claim
was asserted, the opportunity to correct or prevent any statement or
omission and any other equitable considerations appropriate under the
circumstances; and no person (including the Underwriter) guilty of
fraudulent misrepresentation within the meaning of Section 11(f) of the
Securities Act shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. For purposes of this
Section, each person who controls the Underwriter within the meaning of
Section 15 of the Securities Act shall have the same rights as the
Underwriter. Any party entitled to contribution shall, promptly after
receipt of notice of commencement of any action, suit or proceeding against
such party in respect of which a claim for contribution may be made against
the Borrower under this paragraph, notify the Borrower, but the omission so
to notify the Borrower shall not relieve the Borrower from any other
obligation it may have hereunder or otherwise under this paragraph.
Section 8. Conditions of Closing. The Underwriter's obligation to
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purchase the Bonds is subject to fulfillment of the following conditions at
or before Closing:
(a) The Issuer's and the Borrower's representations hereunder
shall be true on and as of the Closing Date and shall be confirmed by
certificates at Closing.
(b) Neither the Issuer nor the Borrower shall have defaulted in
any of their covenants hereunder.
(c) The Underwriter shall have received:
(i) original executed copies (or photocopies
thereof) of the Indenture, the Loan Agreement, the Letter of
Credit, the Reimbursement
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Agreement, the Remarketing Agreement and all other documents executed
in connection therewith or delivered at Closing;
(ii) opinions of Bond Counsel dated the Closing Date
with respect to the matters set forth in Exhibits A, B and C attached
hereto;
(iii) an opinion of Issuer Counsel dated the Closing
Date with respect to the matters set forth in Exhibit D attached
hereto;
(iv) an opinion or opinions of Borrower Counsel dated
the Closing Date with respect to the matters set forth in Exhibit E
attached hereto;
(v) an opinion of Bank Counsel dated the Closing Date
with respect to the matters set forth in Exhibit F attached hereto;
(vi) an opinion of Underwriter Counsel dated the
Closing Date with respect to the matters set forth in Exhibit G
attached hereto; and
(vii) a certificate and agreement of the Bank dated the
Closing Date in the form set forth in Exhibit H attached hereto.
(d) At Closing there shall not have been any adverse change with
respect to the Project or the financing thereof as contemplated by the
Official Statement and this Bond Purchase Agreement or in the business,
property or financial condition of the Borrower, except as set forth in or
contemplated by the Official Statement, which, in the judgment of the
Underwriter, is material and makes it inadvisable to proceed with the sale
of the Bonds; and the Underwriter shall have received certificates that no
material adverse change has occurred or, if such a change has occurred,
full information with respect thereto.
(e) The Underwriter shall receive such documentation as it may
reasonably request to evidence that the Borrower has received all necessary
state and local licenses and approvals from applicable state and local
governmental authorities required on the part of the Borrower to be
obtained in connection with the execution and delivery of the Loan
Agreement and this Bond Purchase Agreement and the Borrower's consummation
of the transactions contemplated thereby and by the Official Statement.
(f) The Underwriter shall receive such additional documentation
as it may reasonably request to evidence compliance with applicable law,
the validity of the Resolutions, the Bonds, the Indenture, the Loan
Agreement, the Letter of Credit, the Reimbursement Agreement, the
Remarketing Agreement, this Bond Purchase Agreement and all other documents
delivered by the Borrower in connection with the financing of
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the Project and to demonstrate the status of the offering of the Bonds
under the Securities Act and the exclusion of the interest on the Bonds
from gross income for federal income tax purposes.
Section 9. Events Permitting Underwriter to Terminate. The Underwriter
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may terminate its obligation to purchase the Bonds at any time before Closing if
any of the following occur:
(a) Legislative, executive or regulatory action or a court
decision which, in the judgment of the Underwriter, casts sufficient doubt
on the legality of obligations such as the Bonds, or the exclusion of
interest on obligations such as the Bonds from gross income for federal
income tax purposes, so as to impair materially the marketability thereof;
(b) Any action by the Securities and Exchange Commission or a
court which would require any registration under the Securities Act, in
connection with the issuance or sale of the Bonds, or qualification of the
Indenture under the Trust Indenture Act of 1939, as amended;
(c) Any general suspension of trading in securities on the New
York Stock Exchange or the establishment by the New York Stock Exchange, by
the Securities and Exchange Commission, by any federal or state agency or
by the decision of any court, of any limitation on prices for such trading,
or any outbreak of hostilities or occurrence of any other national or
international calamity or crisis, the effect of which on the financial
markets of the United States shall be such as to make it impracticable for
the Underwriter to enforce contracts for the sale of the Bonds; or
(d) Any event or condition which, in the judgment of the
Underwriter, renders untrue or incorrect, in any material respect as of the
time to which the same purports to relate, the information contained in the
Official Statement, or which requires that information not reflected in the
Official Statement should be reflected therein in order to make the
statements and information contained therein not misleading in any material
respect as of such time.
If the Underwriter terminates its obligations to purchase the Bonds because any
of the conditions specified in Section 8 or 9 shall not have been fulfilled or
shall have occurred at or before the Closing, such termination shall not result
in any liability on the part of the Issuer or the Underwriter.
Section 10. Notices and Other Actions. All notices, demands and formal
-------------------------
actions hereunder shall be in writing mailed, telegraphed or delivered to:
12
The Issuer:
----------
▇▇▇▇▇▇▇ County Industrial Development Authority
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Executive Director
The Borrower:
------------
Innovative Solutions and Support, LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
The Underwriter:
---------------
PNC Capital Markets, Inc.
One PNC Plaza, 25/th/ Floor
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Section 11. Governing Law. This Bond Purchase Agreement shall be
-------------
governed by and construed in accordance with the laws of the Commonwealth of
Pennsylvania.
Section 12. Assignment; Successors and Assigns. The rights and
----------------------------------
obligations of the Borrower and the Issuer hereunder shall not be assignable
without the prior written consent of the Underwriter. This Bond Purchase
Agreement will inure to the benefit of and be binding upon the parties hereto
and their successors and assigns, and will not confer any rights upon any other
persons except that the Purchasers shall be beneficiaries of the representations
in Sections 4 and 5 hereof.
Section 13. Counterparts. This Bond Purchase Agreement may be executed
------------
in any number of counterparts, all of which taken together shall be one and the
same instrument, and any parties hereto may execute this Bond Purchase Agreement
by signing any such counterpart.
Section 14. Expenses. Whether or not the Bonds are sold by the Issuer,
--------
the Underwriter shall be under no obligation to pay any fees or expenses
incident to the performance of the obligations of the Issuer. All fees, expenses
and costs to effect the authorization, preparation, issuance, delivery and sale
of the Bonds (including without limitation the Issuer's fees and legal and other
expenses), the fees and disbursements of Bond Counsel, the
13
underwriting fee and expenses (including legal, travel and newspaper "tombstone"
advertisement expenses) of the Underwriter and the expenses and costs for the
preparation, printing, photocopying, execution and delivery of the Official
Statement, the Bonds, the Indenture, the Loan Agreement, the Letter of Credit,
the Reimbursement Agreement, the Remarketing Agreement, this Bond Purchase
Agreement and all other documents contemplated hereby and/or delivered at
Closing, shall be paid by the Borrower or by the Trustee from moneys deposited
in the Project Fund established under the Indenture pursuant to appropriate
closing statements and/or requisitions signed and delivered by the Borrower.
14
IN WITNESS WHEREOF, the Issuer, the Borrower and the Underwriter have
caused their duly authorized representatives to execute and deliver this Bond
Purchase Agreement as of the date first written above.
[SEAL] ▇▇▇▇▇▇▇ COUNTY INDUSTRIAL
DEVELOPMENT AUTHORITY
Attest: _________________________ By ______________________________
Title: Title:
INNOVATIVE SOLUTIONS AND
SUPPORT, LLC, by its sole Member and
Manager, Innovative Solutions and Support,
Incorporated
By ______________________________
Title: Chief Financial Officer
PNC CAPITAL MARKETS, INC.
By ______________________________
Title: Director
This execution page is part of the Bond Purchase Agreement dated August 8, 2000
among ▇▇▇▇▇▇▇ County Industrial Development Authority, Innovative Solutions and
Support, LLC and PNC Capital Markets, Inc.
15
EXHIBIT A
---------
Points to Be Covered in
Opinion of Bond Counsel
(Terms defined in the Bond Purchase Agreement
are used herein with the same meanings)
1. The Issuer is a body corporate and politic and a public
instrumentality of the Commonwealth of Pennsylvania, duly organized and validly
existing under the Pennsylvania Act, with full power and authority to undertake
the financing of the Project, to execute and deliver the Loan Agreement and the
Indenture and to issue the Bonds.
2. The Indenture and the Loan Agreement have each been duly
authorized, executed and delivered by the Issuer and each constitutes the legal,
valid and binding obligation of the Issuer enforceable in accordance with its
respective terms.
3. The issuance and sale of the Bonds have been duly authorized by
the Issuer. The Bonds have been duly executed and delivered by the Issuer and,
assuming due authentication by the Trustee, the Bonds are entitled to the
benefit and security of the Indenture and constitute the legal, valid and
binding special limited obligations of the Issuer enforceable in accordance with
their terms.
4. Under the laws of the Commonwealth of Pennsylvania, the Bonds and
interest on the Bonds shall be free from taxation for State and local purposes
within the Commonwealth of Pennsylvania, but this exemption does not extend to
gift, estate, succession or inheritance taxes or any other taxes not levied
directly on the Bonds or the interest thereon. Under the laws of the
Commonwealth of Pennsylvania, profits, gains or income derived from the sale,
exchange or other disposition of the Bonds are subject to State and local
taxation within the Commonwealth of Pennsylvania.
5. Interest on the Bonds is not includable in gross income for
federal income tax purposes under Section 103(a) of the Code.
6. Under the Code, interest on the Bonds constitutes an item of tax
preference under Section 57 of the Code and thus is subject to alternative
minimum tax for federal income tax purposes.
A-1
EXHIBIT B
---------
Points to be Covered in
Supplemental Opinion of Bond Counsel
(Terms defined in the Bond Purchase Agreement
are used herein with the same meanings)
1. The Bonds are exempt from registration under the Securities Act
of 1933, as amended. The Indenture is not required to be qualified under the
provisions of the Trust Indenture Act of 1939, as amended.
2. The descriptions and summaries of the Bonds, the Loan Agreement
and the Indenture purported to be summarized in the sections of the Official
Statement entitled "The Bonds" (except for the information contained under the
caption entitled "Book Entry Only System" therein), "The Loan Agreement" and
"The Trust Indenture" fairly summarize the applicable provisions of the Bonds,
the Loan Agreement and the Indenture.
3. The Bond Purchase Agreement has been duly authorized, executed
and delivered by the Issuer.
B-1
EXHIBIT C
---------
Points to be Covered in
Preference Opinion of Bond Counsel
----------------------------------
(Terms defined in the Bond Purchase Agreement
are used herein with the same meanings)
1. Payments made by the Trustee to the owners of the Bonds
representing payments of principal of and interest at the Weekly Rate on such
Bonds as provided in Section 5.04 of the Indenture from the proceeds of draws on
the Letter of Credit, and payments made by the Trustee to pay the purchase price
of Bonds as provided in Section 4.01 or 4.02 of the Indenture from the proceeds
of draws on the Letter of Credit, will not constitute transfers of property of
the Issuer or the Borrower or any Affiliate avoidable under Section 547(b) and
recoverable from the owners of such Bonds under Section 550(a) of the United
States Bankruptcy Code (the "Bankruptcy Code"), in the event of a bankruptcy
case under the Bankruptcy Code by the Issuer or by or against the Borrower or
any Affiliate, as debtor.
2. Payments made by the Trustee to pay the purchase price of Bonds
as provided in Section 4.01 or 4.02 of the Indenture from the proceeds of
remarketing such Bonds by the Remarketing Agent to persons other than the Issuer
or the Borrower or any Affiliate will not constitute transfers of property of
the Issuer or the Borrower or any Affiliate avoidable under Section 547(b) and
recoverable from the owners of such Bonds under Section 550(a) of the Bankruptcy
Code, in the event of a bankruptcy case under the Bankruptcy Code by the Issuer
or by or against the Borrower or any Affiliate, as debtor.
C-1
EXHIBIT D
---------
Points to be Covered in
Opinion of Issuer Counsel
-------------------------
(Terms defined in the Bond Purchase Agreement
are used herein with same meanings)
1. The Issuer is a public instrumentality and body corporate and
politic of the Commonwealth of Pennsylvania organized and existing under the
Act. Under the Act, and by the Resolution, the Issuer has full power and
authority to undertake the financing of the Project, to execute, deliver and
perform its obligations under the Indenture, the Loan Agreement and the Bond
Purchase Agreement and to issue and deliver the Bonds.
2. The Resolution has been duly adopted by the Issuer, complies in
all respects with the procedural rules of the Issuer and the requirements of
Commonwealth of Pennsylvania law (including the Act) and remains in full force
and effect on the date hereof.
3. The members and officers of the Issuer identified in the Issuer's
General Certificate delivered at the closing for the issuance of the Bonds have
been duly elected or appointed, and are qualified to serve as such. To the best
of such counsel's knowledge, no member or officer of the Issuer has any
financial interest, direct or indirect, in the Borrower or the Project or the
financing thereof.
4. The Indenture, the Loan Agreement, the Bond Purchase Agreement
and the Bonds have been duly authorized, executed and delivered by the Issuer
and, assuming due authorization, execution and delivery by the other parties
thereto, constitute legal, valid and binding obligations of the Issuer
enforceable in accordance with their respective terms, except as enforcement may
be limited by general principles of equity, regardless of whether applied in a
proceeding in equity or at law, or by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws affecting the
enforcement of creditors' rights generally.
5. The execution, delivery and performance by the Issuer of the
Indenture, the Loan Agreement and the Bond Purchase Agreement and the issuance
and delivery of the Bonds do not and will not violate or conflict with any
provision of the Constitution of the Commonwealth of Pennsylvania or any
applicable statute (including the Act), or any rule, order, regulation, judgment
or decree of any court, agency or other governmental or administrative board or
body to which the Issuer is subject, or conflict with or constitute a breach of
or a default
D-1
under any indenture, mortgage, deed of trust, agreement or other instrument to
which the Issuer is a party or by which it is bound.
6. Except for any approval, consent or authorization required under
the securities or blue sky laws of any jurisdiction in connection with the
purchase and distribution of the Bonds, as to which no opinion is expressed, no
additional or further approval, consent or authorization of any governmental or
public agency or authority not already obtained is required by the Issuer in
connection with the issuance or delivery of the Bonds or the entering into and
performance of its obligations under the Indenture, the Loan Agreement or the
Bond Purchase Agreement.
7. There is no action, suit, proceeding or investigation by or
before any court, agency or other governmental or administrative board or body,
pending or, to the best of such counsel's knowledge, threatened against the
Issuer, challenging or contesting the powers of the Issuer, the authorization of
any members or officers of the Issuer to act in their respective capacities, or
the issuance of the Bonds, or in which an unfavorable decision, ruling or
finding would adversely affect the validity or enforceability of the Indenture,
the Loan Agreement or the Bond Purchase Agreement, the performance by the Issuer
of any of its obligations thereunder, or the issuance or delivery of the Bonds.
8. The information contained in the Official Statement under the
caption "The Issuer" does not contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements made therein,
in light of the circumstance under which they are made, not misleading. Except
as set forth in this paragraph, no opinion is expressed with respect to the
adequacy or accuracy of the Official Statement or other information pertaining
to the offering for sale of the Bonds.
D-2
EXHIBIT E
---------
Points to be Covered in
Opinion of Borrower Counsel
---------------------------
(Terms defined in the Bond Purchase Agreement
are used herein with the same meanings)
1. The Borrower is a limited liability company duly organized
and validly existing under the laws of the Commonwealth of Pennsylvania, and has
full power and authority to execute and deliver the Loan Agreement, the
Reimbursement Agreement, the Remarketing Agreement and the Bond Purchase
Agreement and the other documents executed and delivered by the Borrower in
connection therewith and to undertake and perform its obligations thereunder.
2. The Loan Agreement, the Reimbursement Agreement, the
Remarketing Agreement and the Bond Purchase Agreement have been duly executed
and delivered by the Borrower and constitute legal, valid and binding
obligations of the Borrower enforceable in accordance with their respective
terms, except to the extent the enforceability thereof may be limited by
bankruptcy, insolvency or other similar laws or equitable principles affecting
the enforcement of creditors' rights generally and as rights to indemnity may be
limited by applicable law.
3. The execution, delivery and performance of the Loan
Agreement, the Reimbursement Agreement, the Remarketing Agreement and the Bond
Purchase Agreement by the Borrower do not and will not violate or conflict with
any provision of any statute or any rule, order, regulation, judgment or decree
of any court, agency or other governmental or administrative board or body to
which the Borrower is subject, or conflict with or constitute a breach of or a
default under any provision of any indenture, mortgage, deed of trust, agreement
or other instrument to which the Borrower is a party or by which the Borrower or
any of its properties is bound.
4. All licenses, consents, approvals or authorizations of any
federal, state or local governmental authority required on the part of the
Borrower to be obtained in connection with the execution and delivery of the
Loan Agreement, the Reimbursement Agreement, the Remarketing Agreement and the
Bond Purchase Agreement, the performance by the Borrower of its obligations
thereunder and the Borrower's consummation of the transactions contemplated
thereby and by the Official Statement, have been duly obtained, and the Borrower
has complied with all applicable provisions of law requiring any designation,
declaration, filing, registration or qualification with any governmental
authority in connection therewith, except that no opinion is
E-1
express in this paragraph with respect to zoning or other local approvals
relating to the use of the land included in the Project, the construction of
improvements included in the Project or the operation of the Project.
5. There is no action, suit, proceeding, investigation or
inquiry pending or, to the best of such counsel's knowledge, threatened against
the Borrower which might materially adversely affect the Project or the business
or properties or financial condition of the Borrower, or in which an unfavorable
decision, ruling or finding would adversely affect the validity or
enforceability of the Loan Agreement, the Reimbursement Agreement, the
Remarketing Agreement or the Bond Purchase Agreement or any other document
executed and delivered by the Borrower in connection therewith, the performance
by the Borrower of any of its obligations thereunder, or the consummation of any
of the transactions contemplated thereby or by the Official Statement. To the
best of such counsel's knowledge, there is no existing material violation by the
Borrower of any applicable statute, rule, order or regulation of any
governmental body which could materially and adversely affect the financial
condition or operations of the Borrower or the Project.
6. Nothing has come to such counsel's attention which leads it
to believe that the information contained in the Official Statement, excluding
the information under the heading "The Issuer" and Appendix B thereto (about
which no opinion is expressed), contains any untrue statement of a material fact
or omits to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
E-2
EXHIBIT F
---------
Points to be Covered in
Opinion of Bank Counsel
-----------------------
(Terms defined in the Bond Purchase Agreement
are used herein with the same meanings)
The Letter of Credit constitutes a valid and binding obligation
of the Bank, enforceable against the Bank in accordance with its terms, except
as limited by applicable bankruptcy, insolvency, reorganization, liquidation,
readjustment of debt, receivership, moratorium or other laws affecting the
enforcement of creditors' rights as such laws may be applied in the event of a
bankruptcy, insolvency, reorganization, liquidation, readjustment of debt,
receivership or other similar proceeding with respect to the Bank or in the
event of any moratorium or similar occurrence affecting the Bank and by
equitable principles (regardless of whether such enforceability is considered in
a proceeding at law or in equity). Such equitable principles include the
equitable power of a court in a bankruptcy or similar proceeding by or against
the Borrower to restrain or enjoin the payment by the Bank of a drawing under
the Letter of Credit; however, in such counsel's opinion, any such proceeding
would not, in and of itself and absent special circumstances, be the proper
basis for a court to enjoin permanently such payment.
F-1
EXHIBIT G
---------
Points to be Covered in
Opinion of Underwriter's Counsel
--------------------------------
(Terms defined in the Bond Purchase Agreement
are used herein with the same meanings)
1. The conditions in the Bond Purchase Agreement to the
Underwriter's obligation to purchase the Bonds have been satisfied or waived.
2. No registration with the Securities and Exchange Commission
under the Securities Act need be made in connection with the issuance or sale of
the Bonds, and the Indenture is not required to be qualified under the Trust
Indenture Act of 1939, as amended.
3. The descriptions and summaries in the Final Official
Statement under the captions "The Bonds", "The Letter of Credit", "The Loan
Agreement" and "The Trust Indenture", insofar as the statements contained under
such captions purport to summarize certain provisions of the Bonds, the Letter
of Credit, the Loan Agreement and the Indenture, are accurate and fairly present
the information purported to be shown with respect thereto.
G-1
EXHIBIT H
---------
CERTIFICATE AND AGREEMENT OF BANK
Pursuant to Section 8(c)(vii) of the Bond Purchase Agreement
dated August __, 2000 among ▇▇▇▇▇▇▇ County Industrial Development Authority (the
"Issuer"), Innovative Solutions and Support, LLC (the "Borrower"), and PNC
Capital Markets, Inc., as Underwriter, relating to the issuance by the Issuer of
$4,335,000 Industrial Development Revenue Bonds, 2000 Series A (Innovative
Solutions and Support, LLC Project) (the "Bonds"), the undersigned, PNC Bank,
National Association (the "Bank"), hereby certifies that the information
concerning the Bank set forth in Appendix B to the Final Official Statement
dated August __, 2000 relating to the Bonds (the "Official Statement") is
accurate in all material respects. Since March 31, 2000, there has been no
material adverse change in financial condition of the Bank taken as a whole
except as disclosed in or otherwise contemplated by the Private Official
Statement or the documents incorporated therein by reference. The Bank hereby
agrees that it will, upon request of any registered or beneficial owners of the
Bonds pursuant to the last paragraph of Appendix B to the Final Official
Statement, cause to be provided to such owners copies of the documents
incorporated by reference in such Appendix B.
The Bank represents that it does not control, either directly or
indirectly through one or more intermediaries, the Borrower and that the
Borrower does not control it. "Control" for this purpose has the meaning given
to such term in Section 2(a)(9) of the Investment Company Act of 1940, as
amended and as interpreted by the Securities and Exchange Commission.
IN WITNESS WHEREOF, the Bank has caused this Certificate to be
executed and delivered this ___ day of August, 2000.
PNC BANK, NATIONAL ASSOCIATION
By _________________________________
Name:
Title:
H-1
