Exhibit 10(e)
LOAN AGREEMENT
(EQUIPMENT)
Among
GE CAPITAL PUBLIC FINANCE, INC.,
as Lender,
and
MASSACHUSETTS DEVELOPMENT FINANCE AGENCY,
as Issuer,
and
WESTERBEKE CORPORATION,
as Borrower
Dated as of April 24, 2000
_________________________________________________
THIS AGREEMENT IS NOT A GENERAL OBLIGATION OF THE MASSACHUSETTS
DEVELOPMENT FINANCE AGENCY NOR A DEBT OR A PLEDGE OF THE FAITH AND
CREDIT OF THE COMMONWEALTH OF MASSACHUSETTS; ALL AMOUNTS OWED
HEREUNDER ARE PAYABLE ONLY FROM THE REVENUES AND FUNDS PLEDGED
UNDER THIS AGREEMENT.
THIS AGREEMENT CONSTITUTES A SECURITY AGREEMENT UNDER THE
UNIFORM COMMERCIAL CODE OF
THE COMMONWEALTH OF MASSACHUSETTS.
_________________________________________________
LOAN AGREEMENT
Lender: GE Capital Public Finance, Inc.
Suite 470
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Issuer: Massachusetts Development Finance Agency
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Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
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Borrower: Westerbeke Corporation
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Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
THIS LOAN AGREEMENT dated as of April 24, 2000 (this "Agreement") is
among GE Capital Public Finance, Inc., a Delaware corporation, as lender
(with its successors and assigns, "Lender"), Massachusetts Development
Finance Agency, a body corporate and politic and a public instrumentality
of The Commonwealth of Massachusetts ("Commonwealth"), as issuer
("Issuer"), and Westerbeke Corporation, a Delaware corporation, as borrower
("Borrower").
WHEREAS, Issuer is authorized and empowered under the laws of the
Commonwealth, including Massachusetts General Laws, Chapter 23G, and, to
the extent made applicable, Chapter 40D, unless otherwise specified herein,
as amended, (the "Act"), to enter into loan agreements, contracts and
other instruments and 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 acquisition and installation of the
Equipment (as hereinafter defined) by Borrower 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 acquisition and installation of the Equipment; 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 Commonwealth or any political
subdivision thereof, or a pledge of the faith and credit or taxing power of
the Commonwealth 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. Definitions. The following terms used herein will
have the meanings indicated below unless the context clearly requires
otherwise:
"150 ▇▇▇▇ ▇▇▇▇▇▇▇" means 150 ▇▇▇▇ ▇▇▇▇▇▇▇, L.L.P., a registered
Massachusetts limited liability partnership.
"Acquisition Costs" means the contract price paid or to be paid to
the Vendors or reimbursed to Borrower for any portion of the Equipment upon
Borrower's acceptance thereof, including administrative, engineering,
legal, financial and other costs incurred by Lender, Issuer, Borrower,
Escrow Agent and Vendors in connection with the acquisition, installation
and financing by Lender of such Equipment, which Acquisition Costs are set
forth in Exhibit A hereto.
"Act" means the General Laws of The Commonwealth of Massachusetts,
Chapter 23G, and, to the extent made applicable, Chapter 40D, unless
otherwise specified herein, as amended.
"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.
"Arbitrage Certificate" means the Arbitrage Certificate dated as of
April _, 2000, properly executed of behalf of Issuer.
"Bank Agreement" means the letter agreement dated April 25, 1997 by
State Street Bank and Trust Company and agreed and accepted by Borrower,
without giving effect to any amendment thereof or supplement thereto after
the date hereof and the financial covenants and definitions relating
thereto are incorporated herein by reference with the same effect as if
fully set forth herein and shall be deemed to apply to Westerbeke and the
Loan hereunder (in lieu of the obligations under the Bank Agreement) and
shall survive this Loan Agreement notwithstanding any termination of the
Bank Agreement.
"Borrower" means Westerbeke Corporation, 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 and
Minneapolis, Minnesota.
"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 particular items of the Equipment
or certain portions of the Equipment, each as 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.
"Commonwealth" means The Commonwealth of Massachusetts.
"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.
(c) if upon sale, lease or other deliberate action taken with
respect to the Equipment within the meaning of Treas. Reg.
[SECTION]1.141-2(d), the failure to receive an unqualified opinion of
qualified bond counsel to the effect that such deliberate action will not
cause interest payable by Borrower hereunder to become includable in the
gross income of the recipient.
"Environmental Laws" has the meaning ascribed thereto in paragraph
(i) of Article V hereof.
"Equipment" means the property financed or refinanced with the
proceeds of the Loan including (without limitation) the property identified
in Exhibit A hereto 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), together with all
replacement parts, additions, repairs, accessions and accessories
incorporated therein and/or affixed to such property and the proceeds of
the foregoing.
"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 (Equipment) dated as of
April 24, 2000, among Lender, Issuer, Borrower and Escrow Agent.
"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 Equipment or
any misrepresentation or inaccuracy in any of the representations,
warranties or covenants contained in this Agreement, the Statement as to
Tax Exempt Status or the Arbitrage Certificate 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 a total payment in an amount sufficient such that
the sum of the Interest payment plus an additional payment would, after
being reduced by the federal tax (including interest and penalties)
actually payable 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 Massachusetts Development Finance Agency, acting
as issuer under this Agreement.
"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.
"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 and any costs of
issuance paid by Lender.
"Premises" means the real property in the City of Taunton,
Massachusetts as legally described in Exhibit E hereto.
"Prepayment Amount" means the amount which Borrower may or 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 set forth
in Exhibit A hereto, together with accrued interest and all other amounts
due hereunder.
"Principal" means the portion of any Loan Payment designated as and
comprising principal as set forth in Exhibit A hereto.
"Purchase Agreements" means Borrower's purchase agreements with
Vendors of the Equipment.
"Real Estate Loan Agreement" means the Loan Agreement (Real Estate)
dated as of April 24, 2000 among Issuer, Lender, the Borrower and 150 ▇▇▇▇
▇▇▇▇▇▇▇.
"Statement as to Tax Exempt Status" means the Statement as to Tax
Exempt Status dated April _, 2000 executed by Borrower and 150 ▇▇▇▇
▇▇▇▇▇▇▇.
"UCC" means the Uniform Commercial Code as adopted and in effect in
the Commonwealth of Massachusetts.
"Vendor" means the manufacturer or vendor of an item of Equipment, as
well as the agents or dealers of the manufacturer, from whom Borrower has
purchased or is purchasing items of Equipment.
Section 1.02. Exhibits. The following exhibits are attached hereto
and made a part hereof:
Exhibit A: Schedule of Equipment and Loan Payments describing the
Equipment and setting forth the Loan Payments and Prepayment Amounts.
Issuer hereby authorizes Lender to insert in Exhibit A the serial or other
identifying numbers relating to the Equipment when available.
Exhibit B: Form of Certificate of Acceptance.
Exhibit C: Form of opinion of counsel to Borrower.
Exhibit D: Form of opinion of bond counsel.
Exhibit E: Legal Description of Premises.
Section 1.03. Rules of Construction.
(a) The singular form of any word used herein, including the terms
defined in 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," "herein," "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 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 EQUIPMENT AND TERMS OF LOAN
Section 2.01. Acquisition of Equipment. Borrower either has ordered
or shall order the Equipment pursuant to one or more Purchase Agreements
from one or more Vendors. Borrower shall remain liable to the Vendor or
Vendors in respect of its duties and obligations in accordance with each
Purchase Agreement. Borrower will substantially complete the acquisition,
installation and construction of the Equipment no later than April 15,
2001. Borrower shall bear the risk of loss with respect to any loss or
claim relating to any portion of the Equipment and shall be liable in
respect of its duties and obligations in accordance with any contract
entered into in connection with the Equipment, and neither Lender nor
Issuer shall assume any such liability or risk of loss.
Section 2.02. Loan. Lender hereby agrees, subject to the terms and
conditions of this Agreement, to make a loan to Issuer in the amount of
$400,000; 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 less
any costs of issuance that Lender pays as instructed by Borrower in
writing. 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. Interest. 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 a 360-day year consisting of twelve
30 day months) at the rate of 6.46% 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,
Borrower shall, with respect to future interest payments, begin making Loan
Payments calculated at the Gross-Up Rate. In addition, Borrower shall make
immediately upon demand of Lender a payment to Lender sufficient to
supplement prior Loan Payments to the Gross-Up Rate for any period in which
interest becomes includable in gross income for federal income tax
purposes.
Section 2.04. Payments. 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 all
of Issuer's right, title and interest in and to the Equipment, 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 re-substitution, and in the name of Issuer or otherwise,
to collect the Loan Payments and any other payments due hereunder and to
▇▇▇ in any court for such Loan Payments or other payments, to exercise all
rights hereunder with respect to the Equipment, 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 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
Equipment and 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 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 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 failure of the Equipment to be
delivered or installed, any defects, malfunctions, breakdowns or
infirmities in the Equipment 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. Prepayments.
(a) Borrower may, in its discretion, prepay the Loan in whole on any
Loan Payment date after the third anniversary of the funding of the Loan by
paying the applicable Prepayment Amount; provided, however, that the Loan
may not be prepaid unless all amounts owed under the Real Estate Loan
Agreement have been paid or prepaid in full.
(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
and all other amounts due hereunder.
(c) Borrower shall prepay the Loan in full immediately upon demand
of Lender after the occurrence of an Event of Default as set forth in
Article XI hereof by paying the applicable Prepayment Amount and all other
amounts due hereunder.
(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 and all other amounts due hereunder, plus
an amount necessary to supplement the prior Loan Payments to the Gross-Up
Rate.
(e) The amounts due hereunder 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.
Upon any prepayment in part of the Loan other than pursuant to
Section 2.03 of the Escrow Agreement, 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 the Issuer:
(a) This Agreement, properly executed on behalf of Issuer and
Borrower, and each of the Exhibits hereto properly completed.
(b) The Statement as to Tax Exempt Status, properly executed
on behalf of Borrower and 150 ▇▇▇▇ ▇▇▇▇▇▇▇.
(c) The Escrow Agreement, properly executed on behalf of
Issuer, Borrower and Escrow Agent.
(d) The Real Estate Loan Agreement, properly executed on
behalf of Issuer, Borrower and 150 ▇▇▇▇ ▇▇▇▇▇▇▇.
(e) A certificate of the Clerk or an Assistant Clerk of
Borrower, certifying as to (i) the resolutions of the board of
directors and, if required, the shareholders of Borrower, authorizing
the execution, delivery and performance of this Agreement, the Escrow
Agreement, the Hazardous Substances Agreement and the Statement as to
Tax Exempt Status and any related documents, (ii) the bylaws of
Borrower, and (iii) the signatures of the officers or agents of
Borrower authorized to execute and deliver this Agreement, the Escrow
Agreement, the Hazardous Substances Agreement and the Statement as to
Tax Exempt Status and other instruments, agreements and certificates
on behalf of Borrower.
(f) Currently certified copies of Borrower's Charter.
(g) A Certificate of Good Standing issued as to Borrower by
the Delaware Secretary of State, not more than thirty (30) days prior
to the date of the funding of the Loan.
(h) A Certificate of Good Standing from the Massachusetts
Secretary of State attesting to Borrower's qualification to do
business in the Commonwealth, issued not more than thirty (30) days
prior to the date of the funding of the Loan.
(i) Certificates of insurance required hereunder, containing a
lender's loss payable clause or endorsement in favor of Lender.
(j) A completed and executed Form 8038 or evidence of filing
thereof with the Secretary of Treasury.
(k) A resolution or evidence of other official action taken by
or on behalf of Issuer to authorize the transactions contemplated
hereby.
(l) Evidence that the financing of the Equipment has been
approved by the "applicable elected representative" of the
Commonwealth after a public hearing held upon reasonable notice.
(m) As applicable, financing statements executed by Borrower,
as debtor, and naming Lender, as secured party and/or the original
certificate of title or manufacturer's certificate of origin and
title application if any of the Equipment is subject to certificate
of title laws.
(n) Current searches of appropriate filing offices showing
that (i) no state or federal tax liens have been filed and remain in
effect against Borrower, (ii) no financing statements have been filed
and remain in effect against Borrower relating to the Equipment
except those financing statements filed by Lender, and (iii) Lender
has duly filed all financing statements necessary to perfect the
security interest created pursuant to this Agreement.
(o) An opinion or opinions of counsel to Borrower, addressed
to Lender and Issuer, substantially in the form attached hereto as
Exhibit C.
(p) An opinion of bond counsel, addressed to Lender and
Issuer, substantially in the form attached hereto as Exhibit D.
(q) Payment of Lender's fees, commissions and expenses to the
extent required by Section 12.01 hereof.
(r) Payment of Issuer's fees, commissions and expenses
required by Section 4.03 hereof.
(s) The Arbitrage Certificate, properly executed on behalf of
Issuer.
(t) Any other documents or items required by Lender or Issuer.
Lender's agreement to disburse the Loan Proceeds and to consider
approval of any disbursement from the Escrow Fund shall be subject to the
further conditions precedent that on the date thereof:
(u) Lender shall have received each of the items required for
a disbursement pursuant to the Escrow Agreement.
(v) Lender shall have received in form and substance
satisfactory to Lender Vendor invoice(s) and/or ▇▇▇▇(s) of sale
relating to the Equipment and, if such invoices have been paid by
Issuer or Borrower, evidence of payment thereof and, if applicable,
evidence of official intent to reimburse such payment as required by
the Code.
(w) The representations and warranties contained in Article IV
and Article V hereof are correct on and as of the date of such
disbursement, as though made on and as of such disbursement from the
Escrow Fund, except to the extent that such representations and
warranties relate solely to an earlier date.
(x) 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.
(y) Lender shall have received in form and substance
acceptable to Lender the following items: (i) all UCC financing
statements listing Borrower as debtor and Lender as secured party
necessary to perfect the security interest pursuant to this
Agreement; (ii) UCC releases executed on behalf of Citizens Bank of
Massachusetts relating to the Equipment; (iii) UCC searches showing
all financing statements necessary to perfect the security interest
pursuant to this Agreement and that as other liens exist relating to
the Equipment; and (iv) such other items reasonably required by
Lender.
ARTICLE IV.
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF ISSUER; RIGHTS OF ISSUER
Section 4.01. Representations, Warranties and Covenants. Issuer
represents, warrants and covenants for the benefit of Lender and Borrower,
as follows:
(a) Issuer is a body politic and corporate and a public
instrumentality of the Commonwealth, established under the Act, with
the powers pursuant to the Act to execute and deliver this Agreement
and the Escrow Agreement and to perform its obligations hereunder and
pursuant hereto.
(b) Issuer has taken all necessary action and has complied
with all provisions of the Constitution of the Commonwealth and the
Act, including, but not limited to, the making of the findings
required by the Act, required to make this Agreement and the Escrow
Agreement the valid obligations of the Issuer that they purport to
be; and, when executed and delivered by the parties thereto, this
Agreement and the Escrow Agreement will constitute valid and binding
agreements of Issuer enforceable in accordance with their terms,
except as enforceability may be subject to the exercise of judicial
discretion in accordance with general equitable principles and to
applicable bankruptcy, insolvency, reorganization, moratorium and
other laws for the relief of debtors heretofore or hereafter enacted
to the extent that the same may be constitutionally applied.
(c) The officer of Issuer executing this Agreement, the Escrow
Agreement and any related documents has been duly authorized to
execute and deliver this Agreement, the Escrow Agreement and such
related documents under the terms and provisions of a resolution of
Issuer's governing body, or by other appropriate official action.
(d) Issuer covenants that it will promptly pay or cause to be
paid the Loan Payments at the place, on the dates and in the manner
provided herein and in the Escrow Agreement, PROVIDED, HOWEVER, THAT
THIS AGREEMENT DOES NOT NOW AND SHALL NEVER CONSTITUTE A GENERAL
OBLIGATION OF THE ISSUER OR A DEBT OR PLEDGE OF THE FAITH AND CREDIT
OF THE COMMONWEALTH, AND ALL COVENANTS AND UNDERTAKINGS BY THE ISSUER
HEREUNDER TO MAKE PAYMENTS ARE SPECIAL OBLIGATIONS OF THE ISSUER
PAYABLE SOLELY FROM THE LOAN PAYMENTS PLEDGED HEREUNDER.
(e) Issuer has assigned to Lender all of Issuer's rights (if
any) in the Equipment and its rights in this Agreement (except its
rights under Section 4.03, any indemnification payable to Issuer
pursuant to Sections 4.04 and 7.06 hereof and notice to Issuer
pursuant to Section 12.03 hereof).
(f) Issuer will not pledge, mortgage or assign this Agreement
or its duties and obligations hereunder to any person, firm or
corporation, except as provided under the terms hereof.
(g) None of the execution and delivery of this Agreement or
the Escrow Agreement, the consummation of the transactions
contemplated hereby or the fulfillment of or compliance with the
terms and conditions of this Agreement or the Escrow Agreement
violates any law, rule, regulation or order, conflicts with or
results in a breach of any of the terms, conditions or provisions of
any restriction or any agreement or instrument to which Issuer is now
a party or by which it is bound or constitutes a default under any of
the foregoing or results in the creation or imposition of any
prohibited lien, charge or encumbrance of any nature whatsoever upon
any of the property or assets of Issuer under the terms of any
instrument or agreement.
(h) The financing of the Equipment has been approved by the
applicable elected representative (as defined in Section 147(f) of
the Code) of Issuer after a public hearing held upon reasonable
notice.
(i) Issuer will take no action that would cause the Interest
to become includable in gross income for federal income tax purposes
under the Code, and Issuer 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).
(j) 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
Issuer's knowledge, threatened against or affecting Issuer,
challenging Issuer's authority to enter into this Agreement or the
Escrow Agreement 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 any
other transaction of Issuer which is similar hereto, 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.
(k) 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.
(l) Issuer makes no other representations or warranties
whatsoever, either express or implied, other than as set forth in
this Article IV and the Escrow Agreement, including, without
limitation, a representation or warranty that the portion of the Loan
Payments that constitutes Interest with respect thereto is or will
continue to be exempt from federal or state income taxation.
Section 4.02. Limitations on Actions. Without limiting the
generality of Section 4.03, Issuer shall not be required to monitor the
financial condition of Borrower and shall not have any responsibility or
other obligation with respect to reports, notices, certificates or other
documents filed with it hereunder.
Section 4.03. Responsibility; Fees and Expenses. Issuer shall be
entitled to the advice of counsel (who may be counsel for any party) and
shall not be liable for any action taken or omitted to be taken in good
faith in reliance on such advice. Issuer may rely conclusively on any
communication 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 (a) taken by it in good faith and reasonably believed by it to
be within the discretion or powers conferred upon it, or (b) in good faith
omitted to be taken by it because reasonably believed to be beyond the
discretion or powers conferred upon it, (c) taken by it pursuant to any
direction or instruction by which it is governed under this Agreement or
(d) omitted to be taken by it by reason of the lack of direction or
instruction required for such action, nor shall it be responsible for the
consequences of any error of judgment reasonably made by it. Issuer shall
in no event be liable for the application or misapplication of funds, or
for other acts or defaults by any person except its own directors, officers
and employees. When any 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. It shall not be required to take any remedial action (other than
the giving of notice) unless reasonable indemnity is provided for any
expense of liability to be incurred thereby. Borrower shall pay the
Issuer's initial fee 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 its performance of its obligations hereunder. Issuer shall be
entitled to reimbursement from Borrower for expenses reasonably incurred or
advances reasonably made, with interest at the "base rate" of the Escrow
Agent, as announced from time to time (or, if none, the nearest
equivalent), in the exercise of its rights or the performance of its
obligations hereunder, to the extent that it acts without previously
obtaining indemnity. No permissive right or power to act shall be
construed as a requirement to act; and no delay in the exercise of any such
right or power shall affect the subsequent exercise of that right or power.
Issuer shall not be required to take notice of any breach or default by
Borrower under this Agreement except when given notice thereof by Lender.
No recourse shall be had by Borrower or Lender for any claim based on this
Agreement or any agreement securing the same against any director, officer,
agent or employee of Issuer alleging personal liability on the part of such
person unless such claim is based upon the willful dishonesty of or
intentional violation of law by such person. No covenant, stipulation,
obligation or agreement of Issuer contained in this Agreement shall be
deemed to be a covenant, stipulation, obligation or agreement of any
present or future director, officer, employee or agent of Issuer in his or
her 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 4.04. Indemnification 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 Equipment, or
(2) the acquisition, installation, use or operation of the installation or
any work or anything whatsoever done or omitted to be done on or about the
Equipment, or (3) any accident, injury or damage whatsoever to any person
occurring on or about the installation, 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.
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 the State of Delaware, has
power to enter into this Agreement and by proper corporate 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 Commonwealth and in all jurisdictions where its
failure to be so qualified would have a material adverse effect in
the financial or operating condition of Borrower.
(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 resolutions of
its board of directors, or by other 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 officers of Borrower executing this Agreement, the
Escrow Agreement and the Statement as to Tax Exempt Status and any
related documents have 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 resolution(s) of Borrower's board of directors, its
charter and by-laws.
(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 or
affecting the enforcement of creditors' rights and by general
equitable principles.
(e) The authorization, 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 the charter
or bylaws of Borrower or 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, the Escrow Agreement and the Statement as to Tax
Exempt Status 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, the Escrow Agreement and the
Statement as to Tax Exempt Status 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, the
Escrow Agreement and 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 and
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 Premises is properly zoned for its current and
anticipated use and the use of the Equipment will not violate any
applicable zoning, land use, environmental or similar law or
restriction which would have a material and adverse effect on the use
of the Premises or the financial or operating condition of Borrower.
Borrower has all licenses and permits to operate the Equipment.
(i) Borrower has obtained all permits, licenses and other
authorizations which are required under federal, state and local laws
relating to emissions, discharges, releases of pollutants,
contaminants, hazardous or toxic materials, or waste into ambient
air, surface water, ground water or land, or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants or
hazardous or toxic materials or wastes ("Environmental Laws") at
Borrower's facilities or in connection with the operation of its
facilities. Except as previously disclosed to Lender in writing,
Borrower and all activities of Borrower at its facilities comply with
all Environmental Laws and with all terms and conditions of any
required permits, licenses and authorizations applicable to Borrower
with respect thereto. Except as previously disclosed to Lender in
writing, Borrower is also in compliance with all limitations,
restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in Environmental Laws
or contained in any plan, order, decree, judgment or notice of which
Borrower is aware. Except as previously disclosed to Lender in
writing, Borrower is not aware of, nor has Borrower received notice
of, any events, conditions, circumstances, activities, practices,
incidents, actions or plans which may interfere with or prevent
continued compliance with, or which may give rise to any liability
under, any Environmental Laws.
(j) The Equipment is of the type authorized and permitted to
be financed under the Act.
(k) Borrower owns or will own the Equipment, and intends to
operate the Equipment, or cause the Equipment 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.
(l) 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 (including, without
limitation, intentional acts under Treas. Reg. [SECTION]1.148-2(c) or
deliberate action within the meaning of Treas. Reg. [SECTION]1.141-2(d)),
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).
(m) Borrower has heretofore furnished to Lender its reviewed
financial statement for its fiscal years ended October 23, 1999,
October 24, 1998, October 25, 1997, and October 26, 1996, and those
statements fairly present the financial condition of 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
Borrower.
(n) 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, except any which are being contested in good faith
by the Borrower and which do not result in a lien being placed on the
Equipment. 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, except any which are being
contested in good faith by the Borrower and which do not result in a
lien being placed on the Equipment.
(o) Borrower has or will have good and absolute title to the
Equipment and all proceeds thereof, free and clear of all mortgages,
security interests, liens and encumbrances except for the security
interest created pursuant to this Agreement.
(p) 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 taken as a whole, does not contain any material
omissions, 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.
(q) Upon delivery and installation of the Equipment, Borrower
will provide to Issuer and Lender a completed and executed copy of
the Certificate of Acceptance attached hereto as Exhibit B.
(r) 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.
(s) 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.
(t) Expenses for work done by officers or employees of
Borrower in connection with the Equipment will be included as an
Acquisition 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.
(u) Any costs incurred with respect to that part of the
Equipment 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.
(v) 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 an Acquisition Cost.
(w) No person other than Borrower is in occupancy or
possession of any portion of the Premises.
(x) The Equipment is property of the character subject to the
allowance for depreciation under Section 167 of the Code.
(y) Borrower does not have any trade names which are not set
forth on the signature page to this Agreement.
(z) Borrower has provided or will provide prior to any
disbursement from the Escrow Fund to Lender signed financing
statements sufficient when filed to perfect the security interest
created pursuant to this Agreement. When such financing statements
are filed in the offices noted therein, Lender will have a valid and
perfected security interest in the Equipment, subject to no other
security interest, assignment, lien or encumbrance. None of the
Equipment is or will become a fixture on real estate. None of the
Equipment constitutes a replacement of, substitution for or accessory
to any property of Borrower subject to a lien of any kind.
ARTICLE VI.
COVENANTS AS TO EQUIPMENT
Section 6.01. Title to Equipment. Legal title to the Equipment and
any and all repairs, replacements, substitutions and modifications to such
Equipment shall be in Borrower. Borrower will at all times protect and
defend, at its own cost and expense, its title from and against all claims,
liens and legal processes of creditors of Borrower, and keep the Equipment
free and clear of all such claims, liens and processes.
Section 6.02. Security Interest in Equipment. This Agreement is
intended to constitute a security agreement within the meaning of the UCC.
As security for Borrower's payment to Lender, as assignee of Issuer, of
Loan Payments and all other amounts payable to Lender hereunder, under the
Real Estate Loan Agreement or any other obligation (whether direct or
indirect and whether now existing or hereafter arising), Borrower hereby
grants to Lender, a security interest constituting a first lien on (i) the
Equipment, (ii) all general intangibles and other property relating
thereto, (iii) all accessories, attachments, parts, equipment and repairs
now or hereafter attached or affixed or used in connection with any of the
foregoing property, (iv) all warehouse receipts, bills of lading and other
documents of title now or hereafter covering any of the foregoing property,
(v) all securities, funds, moneys, deposits and other property at any time
held in or subject to the Escrow Fund, (vi) all accessions thereto, (vii)
all substitutions for any of the foregoing property, and (viii) products
and proceeds of any of the foregoing property. Issuer and Borrower agree
to execute such additional documents, including financing statements,
assignments, affidavits, notices and similar instruments, in form
satisfactory to Lender, and take such other actions that Lender deems
necessary or appropriate to establish and maintain the security interest
created by this Section, and Issuer and Borrower hereby designate and
appoint Lender as their agent, and grant to Lender a power of attorney
(which is coupled with an interest), to execute on behalf of Issuer and
Borrower, as the case may be, after and during the continuance of an Event
of Default, such additional documents and to take such other actions. If
requested by Lender, Borrower shall obtain a landlord and/or mortgagee's
consent and waiver with respect to the property where the Equipment is
located. If requested by Lender, Borrower shall conspicuously ▇▇▇▇ the
Equipment with appropriate lettering, labels or tags, and maintain such
markings, so as clearly to disclose Lender's security interest in the
Equipment.
Section 6.03. Change in Name or Corporate Structure of Borrower;
Change in Location of Borrower's Principal Place of Business. Borrower's
chief executive office is located at the address set forth above, and all
of Borrower's records relating to its business and relating to the
Equipment are kept at such location. Borrower hereby agrees to provide
written notice to Lender and Issuer of any change or proposed change in its
name, corporate structure, place of business, state of incorporation or
chief executive office or change or proposed change in the location of the
Equipment. Such notice shall be provided 30 days in advance of the date
that such change or proposed change is planned to take effect. Borrower
does business, and has done business, only under its own name and the trade
names, if any, set forth on the execution page hereof.
Section 6.04. Liens and Encumbrances to Title. Borrower shall not,
directly or indirectly, create, incur, assume or suffer to exist any
mortgage, deed of trust, pledge, lien, charge, encumbrance or claim
(together, "Liens") on or with respect to the Equipment or on or with
respect to the Premises other than the respective rights of Lender and
Issuer as herein provided and as provided in the Real Estate Loan Agreement
and related documents. Borrower shall promptly, at its own expense, take
such action as may be necessary to discharge or remove any such Lien or to
provide Lender with a mortgagee's waiver or similar waiver. Borrower shall
reimburse Lender for any expenses incurred by Lender to discharge or remove
any Lien or for obtaining such waiver.
Section 6.05. Personal Property. The parties hereby agree that the
Equipment is, and during the period this Agreement is in force will remain,
personal property and, when subjected to use by Borrower hereunder, will
not be or become fixtures; provided, however, that if contrary to the
parties' intent the Equipment is or may be deemed to be a fixture, Borrower
shall cause filings to be made with the applicable government officials or
filing offices to create and preserve for Lender as assignee of Issuer a
perfected first priority security interest in the Equipment.
Section 6.06. Assignment of Insurance. As additional security for
the payment and performance of Borrower's obligations hereunder, Borrower
hereby assigns to Lender, as assignee of Issuer, any and all moneys
(including, without limitation, proceeds of insurance and refunds of
unearned premiums) due or to become due under, and all other rights of
Borrower with respect to, any and all policies of insurance now or at any
time hereafter covering the Equipment or any evidence thereof or any
business records or valuable papers pertaining thereto, and Borrower hereby
directs the issuer of any such policy to pay all such moneys directly to
Lender. Borrower hereby assigns to Lender, as assignee of Issuer, any and
all moneys due or to become due with respect to any condemnation proceeding
affecting the Equipment. At any time, whether before or after the
occurrence of any Event of Default, Lender may (but need not), in Lender's
name or in Borrower's name, execute and deliver proof of claim, receive all
such moneys, endorse checks and other instruments representing payment of
such moneys, and adjust, litigate, compromise or release any claim against
the issuer of any such policy or party in any condemnation proceeding.
Section 6.07. Reserved.
Section 6.08. Agreement as Financing Statement. To the extent
permitted by applicable law, a carbon, photographic or other reproduction
of this Agreement or of any financing statements signed by Borrower is
sufficient as a financing statement in any state to perfect the security
interests granted in this Agreement.
ARTICLE VII.
AFFIRMATIVE COVENANTS OF BORROWER
So long as the Loan shall remain unpaid, Borrower will comply with
the following requirements:
Section 7.01. Reporting Requirements. Borrower will deliver, or
cause to be delivered, to Lender each of the following, which shall be in
form and detail acceptable to Lender:
(a) as soon as available, and in any event within 120 days
after the end of each fiscal year of Borrower, review quality
financial statements of Borrower with the unqualified opinion of
independent certified public accountants selected by Borrower and
acceptable to Lender, which annual financial statements shall include
the balance sheet of Borrower as at the end of such fiscal year and
the related statements of income, retained earnings and cash flows of
Borrower for the fiscal year then ended, all in reasonable detail and
prepared in accordance with generally accepted accounting principles
applied on a consistent basis, together with (i) a report signed by
such accountants stating that in making the investigations necessary
for said opinion they obtained no knowledge, except as specifically
stated, of any Default or Event of Default hereunder and all relevant
facts in reasonable detail to evidence, and the computations as to,
whether or not Borrower is in compliance with the requirements set
forth in Section 7.09 hereof; and (ii) a certificate of the chief
financial officer of Borrower stating that such financial statements
have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis and whether or not such
officer has knowledge of the occurrence of any Default or Event of
Default hereunder and, if so, stating in reasonable detail the facts
with respect thereto;
(b) as soon as available and in any event within 90 days after
the end of each fiscal quarter of Borrower, an unaudited/internal
balance sheet and statements of income and retained earnings of
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 consistent basis and
certified by the chief financial officer of Borrower, subject to
year-end audit 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 consistent basis, (ii) whether or not such officer has knowledge
of the occurrence of any Default or Event of Default hereunder not
theretofore reported and remedied and, if so, stating in reasonable
detail the facts with respect thereto and (iii) all relevant facts in
reasonable detail to evidence, and the computations as to, whether or
not Borrower is in compliance with the requirements set forth in
Section 7.09 hereof;
(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 $250,000;
(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 any portion of the Equipment or of any
material adverse change in any portion of the Equipment;
(f) promptly upon their distribution, copies of all financial
statements, reports and proxy statements that Borrower shall have
filed with the Securities and Exchange Commission and sent to its
stockholders;
(g) promptly after the amending thereof, copies of any and all
material amendments to its certificate of incorporation, charter or
bylaws;
(h) promptly upon knowledge thereof, notice of any violation
by Borrower of any law, rule or regulation, the violation of which
would have a material adverse effect on Borrower's financial or
operating condition;
(i) promptly upon knowledge thereof, notice of any material
adverse change in the financial or operating condition of Borrower;
and
(j) within 30 days of request by Lender, evidence satisfactory
to Lender that Borrower has complied with the capital expenditure
limitations of Code Section 144(a)(4).
Section 7.02. Books and Records; Inspection and Examination.
Borrower will keep accurate books of record and account itself pertaining
to the Equipment and pertaining to Borrower's business and financial
condition and such other matters as Lender may from time to time reasonably
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 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 Equipment at any time during
Borrower's business hours.
Section 7.03. Compliance 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 Laws, 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, and (c) use and keep the Equipment, and will require that
others use and keep the Equipment, only for lawful purposes, without
violation of any federal, state or local law, statute or ordinance.
Borrower shall secure all permits and licenses, if any, necessary for the
installation and operation of the Equipment. Borrower shall comply in all
respects (including, without limitation, with respect to the use,
maintenance and operation of the Equipment, each item of the Equipment)
with all laws of the jurisdictions in which its operations involving any
component of Equipment may extend and of any legislative, executive,
administrative or judicial body exercising any power or jurisdiction over
the Equipment or the items of the Equipment or its interest or rights under
this Agreement. 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 property
owned, leased or controlled by Borrower. This indemnification shall
survive the termination of this Agreement and payment of the indebtedness
hereunder.
Section 7.04. Payment of Taxes and Other Claims. Borrower will pay
or discharge, when due, (a) all taxes, assessments and governmental charges
levied or imposed upon the Equipment 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 which
creates a lien on the Equipment, and (c) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien or
charge upon the Equipment; 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 Equipment; 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 Equipment.
(a) Borrower shall, at its own expense, maintain, preserve and keep
the Equipment in good repair, working order and condition, and shall from
time to time make all repairs and replacements necessary to keep the
Equipment in such condition, and in compliance with state and federal laws,
ordinary wear and tear excepted. Borrower shall maintain the Equipment in
a condition suitable for certification by the manufacturer thereof (if
certification is available) and in conformance with all manufacturer's
recommended maintenance requirements. In the event that any parts or
accessories forming part of any item or items of Equipment become worn out,
lost, destroyed, damaged beyond repair or otherwise rendered unfit for use,
Borrower, at its own expense and expeditiously, will replace or cause the
replacement of such parts or accessories by replacement parts or
accessories free and clear of all liens and encumbrances and with a value
and utility at least equal to that of the parts or accessories being
replaced (assuming that such replaced parts and accessories were otherwise
in good working order and repair). All such replacement parts and
accessories shall be deemed to be incorporated immediately into and to
constitute an integral portion of the Equipment and, as such, shall be
subject to the terms of this Agreement. Neither Lender nor Issuer shall
have any responsibility in any of these matters, or for the making of
improvements or additions to the Equipment.
(b) Borrower will defend the Equipment against all claims or demands
of all persons (other than Lender) claiming the Equipment or any interest
therein.
(c) Borrower will keep the Equipment free and clear of all security
interests, liens and encumbrances except the security interest created
pursuant to this Agreement.
Section 7.06. Insurance.
(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 Equipment sufficient to protect Lender from liability
in all events, with a coverage limit of not less than $2,000,000 per
occurrence unless a different coverage minimum with respect to particular
Equipment is required by Lender, 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 Equipment with new equipment having
substantially similar specifications or the applicable Prepayment Amount.
(b) If required by the laws of the Commonwealth, Borrower shall
carry workers' compensation insurance covering all employees on, in, near
or about the Equipment, 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
acceptable to Lender and authorized to transact business in the
Commonwealth, 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. Each insurance policy required by this Article shall
name Lender as an additional insured party and loss payee without regard to
any breach of warranty or other act or omission of Borrower and shall
include a lender's loss payable endorsement for the benefit of Lender.
Prior to the delivery of Equipment, 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 any portion of the Equipment 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 attorney's fees) of
whatsoever kind and nature, 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 Equipment, including but not
limited to, (i) the selection, manufacture, purchase, acceptance or
rejection of Equipment or the ownership of the Equipment, (ii) the
delivery, lease, possession, maintenance, use, condition, return or
operation of the Equipment, (iii) the condition of the Equipment sold or
otherwise disposed of after possession by Borrower, (iv) any patent or
copyright infringement, (v) the conduct of Borrower, its officers,
employees and agents, (vi) a breach of Borrower of any of its covenants or
obligations hereunder, and (vii) any claim, loss, cost or expense involving
alleged damage to the environment relating to the Equipment, 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 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 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 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 attorney's 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 18% 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.
Section 7.09. Financial Covenants. Until the Loan has been paid in
full, Borrower covenants and agrees as follows:
(a) To maintain as of the end of each fiscal quarter Working
Capital (as defined in the Bank Agreement) of not less than
$4,500,000;
(b) To maintain as of the end of each fiscal quarter
Consolidated Tangible Net Worth (as defined in the Bank Agreement) of
not less than $8,500,000 plus 40% of net income earned during the
previous fiscal quarter on a cumulative basis;
(c) To maintain as of the end of each fiscal year a Debt
Service Coverage Ratio (as defined in the Bank Agreement) of not less
than 4.00 to 1.00; and
(d) To maintain as of the end of each fiscal quarter a
Leverage Ratio (as defined in the Bank Agreement) of not more than
1.00 to 1.00.
ARTICLE VIII.
NEGATIVE COVENANTS OF BORROWER
So long as the Loan shall remain unpaid, Borrower agrees that:
Section 8.01. Liens. Borrower will not create, incur or suffer to
exist any mortgage, deed of trust, pledge, lien, security interest,
assignment or transfer upon or of any of the Equipment, except for the
security interest held by Lender.
Section 8.02. Sale of Assets. Borrower will not sell, lease,
assign, transfer or otherwise dispose of all or substantially all of its
assets or any of the Equipment or any interest therein (whether in one
transaction or in a series of transactions).
Section 8.03. Consolidation and Merger. Borrower will not
consolidate with or merge into any person, or permit any other person to
merge into it, or acquire (in a transaction analogous in purpose or effect
to a consolidation or merger) all or substantially all the assets of any
other person.
Section 8.04. Accounting. Borrower will not adopt, permit or
consent to any material change in accounting principles other than as
required by generally accepted accounting principles. Borrower will not
adopt, permit or consent to any change in its fiscal year.
Section 8.05. Other Defaults. Borrower will not permit any breach,
default or event of default to occur under any note, loan agreement,
indenture, lease, mortgage, contract for deed, security agreement or other
contractual obligation binding upon Borrower and evidencing or securing
indebtedness in a principal amount in excess of $250,000 or any judgment,
decree, order or determination in an amount in excess of $250,000
applicable to Borrower.
Section 8.06. Place of Business. Borrower will not permit any of
the Equipment or any records pertaining to the Equipment to be located in
any state or area in which, in the event of such location, a financing
statement covering such Equipment would be required to be, but has not in
fact been, filed in order to perfect the security interest created pursuant
to this Agreement until such financing statement in form and substance
acceptable to Lender has been so filed by Lender.
Section 8.07. Modifications and Substitutions.
(a) Borrower will not make any material alterations, modifications
or additions to the Equipment which cannot be removed without materially
damaging the functional capabilities or economic value of the Equipment.
Upon return of the Equipment to Lender and at the request of Lender,
Borrower, at its sole cost and expense, will remove all alterations,
modifications and additions and repair the Equipment as necessary to return
the Equipment to the condition in which it was furnished, ordinary wear and
tear and permitted modifications excepted.
(b) Notwithstanding the provisions of subparagraph (a) of this
section, Borrower may, with the prior written consent of Lender, substitute
for parts, elements, portions or all of the Equipment, other parts,
elements, portions, equipment or facilities; provided, however, that any
substitutions made pursuant to Borrower's obligations to make repairs
referenced under any provision of this Agreement shall not require such
prior written consent. Borrower shall provide such documents or assurances
as Lender may reasonably request to maintain or confirm the security
interest assigned to Lender in the Equipment as so modified or substituted.
Section 8.08. Use of the Equipment. Borrower will not install, use,
operate or maintain the Equipment improperly, carelessly, in violation of
any applicable law or in a manner contrary to that contemplated by this
Agreement.
ARTICLE IX.
DAMAGE AND DESTRUCTION;
USE OF NET PROCEEDS
Borrower shall provide a complete written report to Lender
immediately upon any loss, theft, damage or destruction of any Equipment
and of any accident involving any Equipment. If all or any part of the
Equipment is lost, stolen, destroyed or damaged beyond repair ("Damaged
Equipment"), Borrower shall as soon as practicable after such event either
(a) replace the same at Borrower's sole cost and expense with equipment
having substantially similar specifications and of equal or greater value
to the Damaged Equipment immediately prior to the time of the loss
occurrence, such replacement equipment to be subject to Lender's approval,
whereupon such replacement equipment shall be substituted in this Agreement
and the other related documents by appropriate endorsement or amendment; or
(b) pay the applicable Prepayment Amount of the Damaged Equipment.
Borrower shall notify Lender of which course of action it will take within
fifteen (15) calendar days after the loss occurrence. If, within forty-
five (45) calendar days of the loss occurrence, (a) Borrower fails to
notify Lender, (b) Borrower and Lender fail to execute an amendment to this
Agreement to delete the Damaged Equipment and add the replacement equipment
or, (c) Borrower fails to pay the applicable Prepayment Amount, then Lender
may, at its sole discretion, declare the applicable Prepayment Amount to be
immediately due and payable, and Borrower shall be required to pay the
same. The Net Proceeds of insurance with respect to the Damaged Equipment
shall be made available by Lender to be applied to discharge Borrower's
obligation under this Article. The payment of the Prepayment Amount and
the termination of Lender's interest in the Damaged Equipment is subject to
the terms of Section 2.07 hereof. For purposes of this Article, the term
Net Proceeds shall mean the amount remaining from the gross proceeds of any
insurance claim or condemnation award after deducting all expenses
(including reasonable attorney's fees) incurred in the collection of such
claim or award.
ARTICLE X.
ASSIGNMENT AND SELLING
Section 10.01. Assignment by Lender. This Agreement, and the
obligations of Borrower to make payments hereunder, may be assigned and
reassigned in whole or in part 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 Equipment and in this Agreement.
Section 10.02. No Sale or Assignment by Borrower. This Agreement
and the interest of Borrower in the Equipment may not be sold, assumed,
assigned or encumbered by Borrower.
ARTICLE XI.
EVENTS OF DEFAULT AND REMEDIES
Section 11.01. Events 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) the occurrence of an Event of Default under the Real
Estate Loan Agreement;
(c) failure by Borrower to maintain insurance on the Equipment
in accordance with Section 7.06 hereof;
(d) failure by Borrower or Issuer to observe and perform any
other covenant, condition or agreement of Borrower or Issuer,
respectively, contained herein, in the Escrow Agreement, the
Arbitrage Certificate, 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 or Issuer, as the case may be,
within the applicable period and diligently pursued until the default
is corrected;
(e) 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;
(f) Borrower shall be or become insolvent, or admit in writing
its inability to pay its debts as they mature, or make an assignment
for the benefit of creditors; or Borrower shall apply for or consent
to the appointment of any receiver, trustee or similar officer for it
or for all or any substantial part of its property; or such receiver,
trustee or similar officer shall be appointed without the application
or consent of such Borrower or Borrower 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;
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;
(g) determination by Lender that any representation or
warranty made by Borrower or Issuer herein, in the Statement as to
Tax Exempt Status, the Arbitrage Certificate or in any other document
executed in connection herewith was untrue in any material respect
when made;
(h) 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 $100,000;
(i) failure of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇., his spouse, his
children, his grandchildren, his executors and administrators and
trusts established for his or their benefit to own at least 51% of
the common stock of Borrower;
(j) this Agreement or the Escrow Agreement, or any portion
hereof, is determined by a court of competent jurisdiction to be
invalid or unenforceable against the Issuer; or
(k) failure of Borrower to prepay the Loan within 180 days
after an Event of Taxability has occurred.
Section 11.02. Remedies on Default. Whenever any Event of Default
shall have occurred and be continuing, Lender, as assignee of Issuer, 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 and which
are otherwise accorded to Lender, as assignee of Issuer, 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) take possession of the Equipment wherever situated,
without any court order or other process of law and without liability
for entering the premises, and lease, sublease or make other
disposition of the Equipment for use over a term in a commercially
reasonable manner, all for the account of Lender, provided that
Borrower shall remain directly liable for the deficiency, if any,
between the rent or other amounts paid by a lessee or sublessee of
the Equipment pursuant to such lease or sublease during the same
period of time, after deducting all costs and expenses, including
reasonable attorneys' fees and expenses, incurred with respect to the
recovery, repair and storage of the Equipment during such period of
time;
(c) take possession of the Equipment wherever situated,
without any court order or other process of law and without liability
for entering the premises, and sell the Equipment in a commercially
reasonable manner. All proceeds from such sale shall be applied in
the following manner:
FIRST, to pay all proper and reasonable costs and
expenses associated with the recovery, repair, storage and sale
of the Equipment, including reasonable attorneys' fees and
expenses;
SECOND, to pay (i) Lender the amount of all unpaid Loan
Payments or other obligations (whether direct or indirect owed
by Borrower to Lender), if any, which are then due and owing,
together with interest and late charges thereon, (ii) Lender
the then applicable Prepayment Amount (taking into account the
payment of past-due Loan Payments as aforesaid), plus a pro
rata allocation of interest, at the rate utilized to calculate
the Loan Payments, from the next preceding due date of a Loan
Payment until the date of payment by the buyer, and (iii) any
other amounts due hereunder, including indemnity payments,
taxes, charges, reimbursement of any advances and other amounts
payable to Lender or Issuer hereunder; and
THIRD, to pay the remainder of the sale proceeds,
purchase moneys or other amounts paid by a buyer of the
Equipment to Borrower;
(d) proceed by appropriate court action to enforce specific
performance by Issuer or 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 attorney's fees; and
(e) take whatever action at law or in equity that may appear
necessary or desirable to enforce its rights with respect to the
Equipment. Borrower shall pay or repay to Lender or Issuer all costs
of such action or court action, including, without limitation,
reasonable attorney's 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. Return of Equipment. Upon an Event of Default,
Borrower shall within ten (10) calendar days after notice from Lender, at
its own cost and expense: (a) perform any testing and repairs required to
place the Equipment in the condition required by Article VII; (b) if
deinstallation, disassembly or crating is required, cause the Equipment to
be deinstalled, disassembled and crated by an authorized manufacturer's
representative or such other service person as is satisfactory to Lender;
and (c) deliver the Equipment to a location specified by Lender, freight
and insurance prepaid by Borrower. If Borrower refuses to deliver the
Equipment in the manner designated, Lender may enter upon Borrower's
premises where the Equipment is kept and take possession of the Equipment
and charge to Borrower the costs of such taking. Borrower hereby expressly
waives any damages occasioned by such taking.
Section 11.04. No 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 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 Lender. Upon the incurrence of
an Event of Default, 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 performance or enforcement of
this Agreement, including but not limited to payment of all reasonable
fees, costs and expenses incurred in connection with the Equipment and the
Loan (including, without limitation, reasonable attorneys' fees and
disbursements, fees of auditors, 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 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 ▇▇▇▇ by Borrower.
Section 12.02. Disclaimer 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 EQUIPMENT, OR ANY OTHER WARRANTY OR REPRESENTATION,
EXPRESS OR IMPLIED, WITH RESPECT THERETO. In no event shall Lender or
Issuer be liable for any loss or damage in connection with or arising out
of this Agreement, the Equipment or the existence, furnishing, functioning
or Borrower's use of any item or products or services provided for in this
Agreement.
Section 12.03. Notices. All notices, certificates, requests,
demands and other communications provided for hereunder or under the Escrow
Agreement, the Arbitrage Certificate, 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 disposition
of the Equipment or any other 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. 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,
the Escrow Agreement, the Arbitrage Certificate or the Statement as to Tax
Exempt Status and any rights of Lender hereunder or thereunder.
Section 12.05. Binding 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. Severability. 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. Amendments. 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.
Borrower and Lender agree to amend Exhibit A to this Agreement to
more specifically identify the Equipment being financed hereunder at such
time as such identification is possible. Such amendment shall be effected
by a written instrument signed by Borrower and Lender. Issuer's consent to
the amendment referred to in this paragraph shall not be required. Such
amendment may take the form of a Payment Request Form in the form attached
to the Escrow Agreement as Exhibit A executed by Borrower and Lender.
Section 12.08. Execution 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 6" on the execution
page hereof shall constitute the Bond under the Act and chattel paper under
the UCC.
Section 12.09. Applicable Law. This Agreement shall be governed by
and construed in accordance with the laws of the Commonwealth.
Section 12.10. Captions. 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 Agreement. This Agreement, the Statement as
to Tax Exempt Status, the Escrow Agreement, the Arbitrage Certificate, the
Hazardous Substances Agreement, and the exhibits hereto and thereto
constitute the entire agreement among Lender, Issuer, Borrower and Escrow
Agent. There are no understandings, agreements, representations or
warranties, express or implied, not specified herein or in such documents
regarding this Agreement or the Equipment financed hereby.
Section 12.12. Usury. 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 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/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
Issuer: MASSACHUSETTS DEVELOPMENT
FINANCE AGENCY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
General Counsel
Borrower: WESTERBEKE CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Assistant Secretary
Original: __ of 6.
Trade Names of Borrower, if any:
None.
Exhibit A to Loan Agreement
SCHEDULE OF EQUIPMENT AND LOAN PAYMENTS
---------------------------------------
This Schedule is delivered pursuant to the Loan Agreement
(Equipment), dated as of April 24, 2000 (the "Agreement"), among GE Capital
Public Finance, Inc., as Lender ("Lender"), the Massachusetts Development
Finance Agency, as Issuer ("Issuer") and Westerbeke Corporation, (the
"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 COMMONWEALTH OF MASSACHUSETTS OR OF THE ISSUER EXCEPT TO THE EXTENT
PERMITTED BY MASSACHUSETTS GENERAL LAWS, CHAPTER 23G, AS AMENDED . ALL
AMOUNTS OWED HEREUNDER AND UNDER THE AGREEMENT ARE PAYABLE ONLY FROM THE
SOURCES EXPRESSLY PROVIDED IN THE AGREEMENT.
1. The Equipment identified on this Exhibit will be located at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ in the City of Taunton, Massachusetts. Prior to any
relocation of the Equipment, Borrower will provide thirty (30) days'
prior written notice to Lender at its address set forth in the
Agreement or any other address Borrower has received in writing from
Lender.
2. The Equipment which is the subject of this Schedule is as follows:
See Schedule I attached hereto.
3. 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 Schedule II attached hereto.
SCHEDULE I
----------
SCHEDULE II
-----------
Exhibit B to Loan Agreement
FORM OF CERTIFICATE OF ACCEPTANCE
We, the undersigned, hereby certify that we are the duly qualified
and acting __________ and _______________ of Westerbeke Corporation (the
"Borrower") and, with respect to the Loan Agreement (Equipment) dated as of
April 24, 2000 (the "Agreement") by and among Borrower, GE Capital Public
Finance, Inc. ("Lender") and Massachusetts Development Finance Agency
("Issuer"), that:
1. The portions of the Equipment described in Exhibit A to the
Agreement 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 Commonwealth (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. Attached to this Certificate of Acceptance are Vendor invoice(s)
and/or ▇▇▇▇(s) of sale relating to the Equipment and, if such invoices have
been paid by Issuer or Borrower, evidence of payment thereof and, if
applicable, evidence of official intent to reimburse such payment as
required by the Code (as defined in the Agreement).
4. Borrower hereby directs Lender, on behalf of Issuer, to pay the
Loan Proceeds (as defined in the Agreement) as follows:
5. 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: __________, ____.
WESTERBEKE CORPORATION
By:_____________________________
Title:__________________________
Date:___________________________
Exhibit C to Loan Agreement
FORM OF OPINION OF COUNSEL TO BORROWER
April __, 2000
Massachusetts Development Finance Agency
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
GE Capital Public Finance, Inc.
Suite 470
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Loan Agreement (Equipment) dated as of April 24, 2000, by and
among GE Capital Public Finance, Inc. ("Lender"), Massachusetts
Development Finance Agency ("Issuer") and Westerbeke
Corporation (the "Borrower")
Ladies and Gentlemen:
We have acted as counsel to Borrower with respect to the Loan
Agreement described above (the "Loan Agreement") and the Escrow Agreement
(Equipment) of even date therewith (the "Escrow Agreement") among Lender,
Issuer, Borrower and National City Bank of Minneapolis, as escrow agent 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 and the Escrow Agreement and 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, fraudulent
conveyance 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, interest on interest, waiver of jury trial or
indemnification that is against public policy.
References in this opinion to matters known to us mean the actual
knowledge of the lawyers 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 Commonwealth of
Massachusetts, the General Corporation Law of the State of Delaware 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 organized and is validly existing and in
good standing under the laws of the State of Delaware and has the full
corporate power and authority to own its properties and conduct the
business now conducted by it.
2. Borrower is qualified to conduct business as a corporation in The
Commonwealth of Massachusetts.
3. Borrower has full power and authority to execute and deliver the
Agreements 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 legal, valid and binding obligations of
Borrower, enforceable in accordance with their respective terms (including
against claims of usury); provided however that we express no opinion as to
whether interest on the bonds at the Gross-Up Rate violates Massachusetts
General Laws, Chapter 271, Section 49.
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 Borrower's articles of organization, or
bylaws, if applicable, or based 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 known to us to which Borrower
is a party or by which it or its property is bound, 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. Based on inquiry of officers of Borrower, there are no legal or
governmental actions, suits, proceedings, inquiries or investigations
pending or, to the best of our knowledge, 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. Based on inquiry of officers of Borrower, there are no legal or
governmental proceedings pending or, after due inquiry of appropriate
officers of Borrower, threatened wherein an unfavorable decision, ruling or
finding would adversely affect the validity of or security for the
Agreements or the transactions contemplated thereby.
7. The provisions of the Loan Agreement are effective under
Massachusetts law to create a security interest in favor of Lender, as
assignee of Issuer, in all of Borrower's right, title and interest in and
to the Equipment and all the proceeds thereof. If the form UCC-1 Financing
Statements (UCC-1s) reviewed by us are properly filed at the Massachusetts
Secretary of State's Office, the Taunton City Clerk's office and the Avon
Town Clerk's office, such security interest will be properly perfected.
This opinion letter shall be interpreted in accordance with the Legal
Opinion Principles issued by the Committee on Legal Opinions of the
American Bar Association's Business Law Section as published in 53 Business
Lawyer 831 (May 1998).
This opinion letter is being furnished only to you in connection with
the transaction described above and may not be relied on without our prior
written consent for any other purpose or by anyone else other than your
assignees permitted by the Agreements.
Very truly yours,
▇▇▇▇▇▇▇, Procter & ▇▇▇▇ LLP
Exhibit D to Loan Agreement
FORM OF OPINION OF BOND COUNSEL
April __, 2000
Massachusetts Development Finance Agency
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
GE Capital Public Finance, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
We have acted as bond counsel to the Massachusetts Development
Finance Agency (the "Issuer") in connection with the making by the Issuer
of a loan (the "Loan") to Westerbeke Corporation (the "Borrower") pursuant
to a Loan Agreement (Equipment), dated as of April 24, 2000 (the
"Agreement"), by and among GE Capital Public Finance, Inc. ("Lender"), the
Issuer 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 (Equipment), dated as of April 24, 2000 (the "Escrow Agreement"),
by and among Lender, the Issuer, 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 Issuer 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 of, and premium (if any) and interest on the Loan. Such payments
and other moneys payable to the Issuer or Lender under the Agreement,
including proceeds derived from any security provided thereunder
(collectively, the "Revenues"), and the rights of the Issuer under the
Agreement to receive the same (excluding, however, certain administrative
fees, indemnification and reimbursements), are pledged and assigned by the
Issuer as security for the repayment of the Lender pursuant to the
Agreement (the "Lender Loan"). The Lender Loan is a limited obligation of
the Issuer 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 Equipment.
Based on our examination, we are of opinion, as of the date hereof
and under existing law, as follows:
1. The Issuer is a duly created and validly existing body corporate
and politic and a public instrumentality of The Commonwealth of
Massachusetts 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 Issuer and is a valid and binding
obligation of the Issuer enforceable upon the Issuer. As provided in
Massachusetts General Laws, Chapter 23G, as amended, the Agreement creates
a valid lien on the rights of the Issuer 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 Issuer 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
Issuer 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, the Loan and any income derived
therefrom, including any sale, exchange or transfer of the Loan, are exempt
from taxation under the laws of The Commonwealth of Massachusetts, although
the Loan and any income therefrom may be included in the measure of
Massachusetts estate and inheritance taxes and of certain Massachusetts
corporation excise and franchise taxes.
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,
Exhibit E to Loan Agreement
LEGAL DESCRIPTION OF PREMISES
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS AND EXHIBITS 2
Section 1.01. Definitions 2
Section 1.02. Exhibits 5
Section 1.03. Rules of Construction 5
Section 1.04. Combined Documents 5
ARTICLE II. FINANCING OF EQUIPMENT AND TERMS OF LOAN 6
Section 2.01. Acquisition of Equipment 6
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. REPRESENTATIONS, WARRANTIES AND COVENANTS OF
ISSUER; RIGHTS OF ISSUER 10
Section 4.01. Representations, Warranties and Covenants 10
Section 4.02. Limitations on Actions 12
Section 4.03. Responsibility; Fees and Expenses 12
Section 4.04. Indemnification by Borrower 13
ARTICLE V. REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWER 13
ARTICLE VI. COVENANTS AS TO EQUIPMENT 17
Section 6.01. Title to Equipment 17
Section 6.02. Security Interest in Equipment 17
Section 6.03. Change in Name or Corporate Structure of
Borrower; Change in Location of Borrower's
Principal Place of Business 18
Section 6.04. Liens and Encumbrances to Title 18
Section 6.05. Personal Property 18
Section 6.06. Assignment of Insurance 18
Section 6.07. Reserved 19
Section 6.08. Agreement as Financing Statement 19
ARTICLE VII. AFFIRMATIVE COVENANTS OF BORROWER 19
Section 7.01. Reporting Requirements 19
Section 7.02. Books and Records; Inspection and Examination 20
Section 7.03. Compliance With Laws; Environmental Indemnity 21
Section 7.04. Payment of Taxes and Other Claims 21
Section 7.05. Maintenance of Equipment 21
Section 7.06. Insurance 22
Section 7.07. Preservation of Corporate Existence 23
Section 7.08. Performance by Lender 23
Section 7.09. Financial Covenants 24
ARTICLE VIII. NEGATIVE COVENANTS OF BORROWER 24
Section 8.01. Liens. 24
Section 8.02. Sale of Assets 24
Section 8.03. Consolidation and Merger 24
Section 8.04. Accounting 24
Section 8.05. Other Defaults 24
Section 8.06. Place of Business 25
Section 8.07. Modifications and Substitutions 25
Section 8.08. Use of the Equipment 25
ARTICLE IX. DAMAGE AND DESTRUCTION; USE OF NET PROCEEDS 25
ARTICLE X. ASSIGNMENT AND SELLING 26
Section 10.01. Assignment by Lender 26
Section 10.02. No Sale or Assignment by Borrower 26
ARTICLE XI. EVENTS OF DEFAULT AND REMEDIES 26
Section 11.01. Events of Default 26
Section 11.02. Remedies on Default 28
Section 11.03. Return of Equipment 29
Section 11.04. No Remedy Exclusive 29
Section 11.05. Late Charge 29
ARTICLE XII. MISCELLANEOUS 29
Section 12.01. Costs and Expenses of Lender 29
Section 12.02. Disclaimer of Warranties 30
Section 12.03. Notices 30
Section 12.04. Further Assurance and Corrective Instruments 30
Section 12.05. Binding Effect; Time of the Essence 31
Section 12.06. Severability 31
Section 12.07. Amendments 31
Section 12.08. Execution in Counterparts 31
Section 12.09. Applicable Law 31
Section 12.10. Captions 31
Section 12.11. Entire Agreement 31
Section 12.12. Usury. 31
Section 12.13. Waiver of Jury Trial 32
Exhibit A to Loan Agreement 1
Exhibit B to Loan Agreement 1
Exhibit C to Loan Agreement 1
Exhibit D to Loan Agreement 1
Exhibit E to Loan Agreement 1