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EXHIBIT 10.17
LOAN AGREEMENT Execution Copy
Between
MICHIGAN STRATEGIC FUND
(the "Issuer")
and
MOLMEC, INC.
(the "Obligor")
Relating to the
Issuance of
$5,000,000
Michigan Strategic Fund
Variable Rate Demand
Limited Obligation Revenue Bonds, Series 1994
(Molmec, Inc. Project)
Dated as of December 1, 1994
The interest (subject to certain specified exclusions) of the
Issuer in this Loan Agreement has been assigned to Society Bank,
Michigan, in its capacity as Trustee (the "Trustee") under a
Trust Indenture dated as of December 1, 1994, between the Issuer
and the Trustee.
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LOAN AGREEMENT
TABLE OF CONTENTS
PAGE
----
DEFINITIONS ........................................................... 1
PREMISES .............................................................. 3
ARTICLE I REPRESENTATIONS ........................ 4
Section 1.1 Obligor Representations and Covenants Regarding the
Internal Revenue Code ................................... 4
Section 1.2 Additional Covenants .................................... 8
Section 1.3 Issuer Findings and Representations ..................... 9
Section 1.4 Additional Bonds ........................................ 9
ARTICLE II THE BONDS AND THE PROCEEDS THEREOF ............... 10
Section 2.1 The Bonds ............................................... 10
Section 2.2 Issuer Action on Redemption ............................. 10
Section 2.3 Investment of Bond Fund and Project Fund; Non-Arbitrage
Covenant ................................................ 10
Section 2.4 Credit Facility ......................................... 11
Section 2.5 Tender .................................................. 11
Section 2.6 Remarketing Agent ....................................... 11
Section 2.7 Right to Exercise Conversion Option ..................... 11
Section 2.8 Rebate Account .......................................... 12
ARTICLE III THE LOAN AND LOAN REPAYMENTS ................... 12
Section 3.1 The Loan ................................................ 12
Section 3.2 Loan Repayments; Credit Facility ........................ 12
ARTICLE IV INSTALLATION OF THE PROJECT .................... 13
Section 4.1 Project Fund Disbursements .............................. 13
Section 4.2 Obligation of the Obligor to Complete the Project ....... 14
Section 4.3 Completion Certificate .................................. 14
Section 4.4 Use of Surplus Bond Proceeds ............................ 14
ARTICLE V OTHER PECUNIARY OBLIGATIONS OF THE OBLIGOR ............ 15
Section 5.1 Taxes and Other Costs ................................... 15
Section 5.2 Issuer Fees and Expenses ................................ 15
Section 5.3 Fees and Expenses of the Trustee and Remarketing Agent .. 15
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Section 5.4 Indemnification of the Issuer ........................... 16
Section 5.5 Indemnification of the Trustee .......................... 17
Section 5.6 Insurance ............................................... 17
ARTICLE VI PROJECT MAINTENANCE ....................... 17
Section 6.1 Maintenance and Operation ............................... 17
Section 6.2 Remodeling and Modifications ............................ 17
ARTICLE VII DAMAGE TO PROJECT AND CONDEMNATION ............... 18
ARTICLE VIII ACTIONS AFFECTING OBLIGOR AND ISSUER
INTERESTS IN THE AGREEMENT AND THE PROJECT ........... 18
Section 8.1 Assignment of the Agreement ............................. 18
Section 8.2 Obligor's Interest in the Agreement ..................... 19
Section 8.3 Liens by the Obligor .................................... 19
Section 8.4 Security Interest in the Project Fund ................... 19
ARTICLE IX FURTHER OBLIGATIONS OF THE OBLIGOR ................ 19
Section 9.1 Compliance with Laws .................................... 19
Section 9.2 Maintenance of Assets; Ownership of Project ............. 19
Section 9.3 General Limitations with Respect to Non-Impairment of
Tax-Exempt Status of the Bonds ....................... 20
Section 9.4 Access to Project and Records ........................... 20
Section 9.5 Requirements of Tenants ................................. 20
ARTICLE X EVENTS OF DEFAULT AND REMEDIES .................. 21
Section 10.1 Events of Default ....................................... 21
Section 10.2 Remedies upon Event of Default .......................... 22
Section 10.3 Payment of Attorneys' Fees and Other Expenses ........... 23
Section 10.4 Waivers and Limitation on Waivers ...................... 23
ARTICLE XI OBLIGATIONS OF OBLIGOR UNCONDITIONAL ................ 24
Section 11.1 Obligor Obligations ..................................... 24
ARTICLE XII MISCELLANEOUS ............................ 24
Section 12.1 Amounts Remaining in Funds .............................. 24
Section 12.2 Obligor Bound by Indenture .............................. 25
Section 12.3 Consents Under the Agreement ............................ 25
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Section 12.4 Notices ................................................. 25
Section 12.5 Amendment ............................................... 25
Section 12.6 Binding Effect .......................................... 25
Section 12.7 Severability ............................................ 25
Section 12.8 Execution in Counterparts ............................... 25
Section 12.9 Captions and Table of Contents .......................... 26
Section 12.10 Applicable Law .......................................... 26
Exhibits
EXHIBIT A - Description of Project A-1
EXHIBIT B - Requisition Certificate B-1
EXHIBIT C - Completion Certificate C-1
EXHIBIT D - No Act of Bankruptcy Certificate D-1
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LOAN AGREEMENT
THIS LOAN AGREEMENT (the "Agreement") is made and entered into as of
December 1, 1994 by and between the Michigan Strategic Fund (the "Issuer") and
Molmec, Inc., a Michigan corporation (the "Obligor").
DEFINITIONS
Except as provided herein, all capitalized terms shall have the
meanings ascribed to them in the Indenture (defined below). In addition to the
words and terms elsewhere defined in the Agreement, each of the following words
and terms as used in the Agreement shall have the following meaning unless the
context or use indicates another or different meaning or intent and shall refer
to all or part of the defined subject.
"Additional Bonds" means the Additional Bonds which are authorized to
be issued in accordance with Section 112 of the Indenture in one or more series
from time to time to provide funds for the purposes contemplated by the
Agreement.
"Completion Certificate" means the certificate provided for in Section
4.3 hereof, in the form of Exhibit C hereto.
"Completion Date" means the date of completion of the Project as such
date shall be certified in the Completion Certificate.
"Engineer" means any licensed professional architect/engineer or
architectural/engineering firm (who may be in the employ of the Obligor or
chosen by the Obligor).
"Event of Default" means those events of default specified and defined
in Section 10.1.
"General Limitations" means those general limitations on the Obligor
action or failure to act specified in Section 9.3 hereof, sometimes referenced
as a condition to a particular Obligor action, but applicable to any action by
the Obligor under the Agreement.
"Indemnified Persons" means the Issuer and its members, officers,
agents, employees and any other person acting for or on behalf of the Issuer.
"Improvements to the Project" means such additions, improvements,
modifications or relocations as the Obligor may deem necessary or desirable in,
on or to the Project, all of which shall be included in the Plans and shall
become part of the Project.
"Indenture" means the Trust Indenture between the Issuer and the
Trustee, dated as of December 1, 1994, as the same may be amended or
supplemented in accordance with its terms.
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"Inducement Date" means July 27, 1994, on which date a resolution of intent
or inducement to assist in the financing of the Project was adopted by Michigan
Strategic Fund.
"Issuance Costs" means items of expense payable or reimbursable directly or
indirectly by the Issuer and related to the authorization, sale and issuance of
the Bonds and authorization and execution of the Agreement, which items of
expense shall include, but not be limited to, application fees and expenses,
publication costs, printing costs, costs of reproducing documents, filing and
recording fees, Bond Counsel and Counsel fees, initial Trustee's fees,
placement agents' fees, costs of credit ratings, Credit Facility issuance fees
and charges for execution, transportation and safekeeping of the Bonds and
related documents, and other costs, charges and fees in connection with the
foregoing.
"Municipality" means the Township of Hartland, County of Livingston,
Michigan.
"Non-Arbitrage and Tax Compliance Certificate" means the Non-Arbitrage and
Tax Compliance Certificate described in Section 1.1 hereof.
"Permitted Encumbrances" means and includes (a) the rights of the Issuer,
the Trustee and the Bank and the liens created under the Agreement; (b) the
rights of the Issuer, the Trustee and Bank created under the Indenture and
assignment of the Agreement; (c) any lien, encumbrance or charge, which is
subordinate in all respects to the interest of the Issuer, the Trustee and the
Bank; (d) any liens granted to the Bank; and (e) liens permitted by the
Reimbursement Agreement or consented to by the Bank in writing.
"Plans" means the Obligor's plans and budget specifications for the
Project, in such reasonable detail as to satisfy the requirements of Section
9-110 of Act 174, Public Acts of Michigan, 1962, as amended, as the same may be
revised from time to time in accordance with Article IV hereof, which plans are
on file at the principal office of the Obligor.
"Project Costs" means (a) obligations of the Issuer or the Obligor
incurred for labor and to contractors, builders and materialmen in
connection with the acquisition, construction and installation of the Project;
(b) the cost of contract bonds and of insurance of all kinds that may be
required or necessary during the course of construction of the Project which is
not paid by the contractor or contractors or otherwise provided for; (c) all
costs of engineering services, including test borings, surveys, estimates,
plans and specifications and preliminary investigations, and supervising
construction, as well as for the performance of all other duties required by or
consequent upon the proper construction of the Project; (d) Issuance Costs; (e)
all other costs which the Obligor shall be required to pay, under the terms of
any contract or contracts, for the acquisition, construction and installation
of the Project; (f) other costs of a nature comparable to those described in
clauses (a) through (e) above which the Obligor shall be required to pay as a
result of the damage, destruction, condemnation or taking of the Project or any
portion thereof; (g) fees and expenses incurred in connection with the issuance
of the Credit Facility; (h) interest on the Bonds or any interim obligation
during the period of
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construction of the Project; or (i) any other costs incurred by the Obligor
which are properly chargeable to the Project and which may be financed by the
Bonds under the Act.
"Project Purposes" means use of the Project for manufacturing purposes
during a period of usefulness of the Project of at least 25 years in the
estimate of the Obligor.
The terms "redemption", "redeem", and "redeemed" when used with reference
to the principal of the Bonds, means, when appropriate, prepayment, prepay and
prepaid, respectively.
"Requisition Certificate" means the certificate required by Section 4.1
hereof, in the form of Exhibit B hereto.
PREMISES
The Issuer is empowered under the Act to assist any person, firm or
corporation in the financing of certain projects and facilities, through the
issuance of its limited obligation revenue bonds. The Obligor has proposed the
acquisition, construction, equipping and installation of the Project and as an
inducement therefor has requested the Issuer to assist in the financing of the
Project and certain other expenses incidental thereto, as provided in the Act.
The Issuer has determined that making the Loan to the Obligor will promote
and serve the intended purposes of, and in all respects will conform to the
provisions and requirements of the Act. In order to grant the Loan and thereby
assist in the financing of the Project, the Issuer is issuing the Bonds. The
Issuer, the Trustee and the Obligor understand and intend that the financing of
the Project through issuance of the Bonds and the making of the Loan will be
structured in the following general manner, as detailed in the Indenture and in
the Agreement: The Issuer will issue the Bonds under the Act and use the
principal amount thereof to make the Loan to the Obligor. The Loan shall be
repaid by the Obligor in Loan Repayments sufficient to pay the principal,
premium, if any, and interest on the Bonds as the same become due. From the
proceeds of the Loan, the Obligor will acquire and construct the Project. Under
the terms of the Agreement, the Obligor will make Loan Repayments, and will be
responsible for paying any costs of the Project which exceed the principal
amount of the Bonds, for maintaining and insuring the Project, and for paying
all taxes and expenses relating to the Project. The Issuer's obligation with
respect to the Bonds is subject to the limitations therein contained, viz., that
the principal, premium, if any, and interest on the Bonds and any other costs or
pecuniary liability relating to the Bonds, the Loan, acquisition, construction
and installation of the Project or any proceeding, document, or certification
incidental to the foregoing, shall never be payable from tax revenues or public
funds of the State or any agency thereof or general funds or assets of the
Issuer, but shall be payable with Available Moneys solely and only from the
Security. The Bonds shall not be secured by any interest in the Project or other
assets of the Obligor.
In addition, as part of the Security for the Loan Repayments, the Obligor
will cause to be delivered to the Trustee the Credit Facility of the Bank. The
Trustee is instructed in the
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Indenture to draw under the Credit Facility up to (a) the principal amount of
the Bonds (i) to enable the Trustee to pay the principal amount of the Bonds
when due at maturity, by acceleration of maturity or otherwise or upon
redemption or (ii) to enable the Trustee to pay the portion of the Purchase
Price of Bonds delivered to the Trustee and not remarketed by the Remarketing
Agent equal to the principal amount of such Bonds, plus (b) an amount equal to
60 days' (or, if required pursuant to Section 208 of the Indenture, 210 days')
interest on the Bonds calculated at the Maximum Rate to enable the Trustee to
pay interest on the Bonds plus (c) if the Credit Facility is so amended, any
premium on the Bonds.
The Issuer's participation in the financing of the Project is intended to
enable the Obligor to utilize certain provisions of the Code. Section 103 of
the Code encourages the construction of certain types of facilities and the
public financing thereof through issuance of limited obligation revenue bonds
by providing that the interest on such bonds, as contrasted with any bonds
which might be issued by the Obligor itself, will be excluded from gross income
for federal income tax purposes. This tax exclusion enables the purchasers of
the Bonds to accept a lower rate of interest than they would otherwise require,
and thereby further reduces the interest cost to the Obligor of financing the
Project.
ARTICLE I
REPRESENTATIONS
Section 1.1 Obligor Representations and Covenants Regarding the Internal
Revenue Code. The Obligor makes the following representations and warranties for
the benefit and reliance of the Issuer, the Trustee and the Bank:
(a) The Obligor is a Michigan corporation duly organized, validly
existing and in good standing under the laws of the State. The Obligor
(i) has full power and authority to own and lease the properties and assets
associated with the Project and to acquire, construct and install the
Project, and (ii) has full power and authority to execute and deliver the
Agreement and the Reimbursement Agreement, and to perform the obligations
as contemplated thereunder.
(b) Neither the execution and delivery of the Reimbursement Agreement
or the Agreement, nor the consummation of the transactions contemplated
thereby, nor the fulfillment of or compliance with the terms and conditions
of the Reimbursement Agreement or the Agreement, will, to the best
knowledge of the Obligor, violate the Articles of Incorporation or By-Laws
of the Obligor, any provision of law, any order of any court or other
agency of government, or any indenture, agreement or other instrument to
which the Obligor is now a party or by which it or any of its properties or
assets is bound, or will be in conflict with, result in a breach of, or
constitute a default (with due notice or the passage of time or both)
under, any such indenture, agreement, or other instrument.
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(c) The Agreement and the Reimbursement Agreement have been duly
authorized, executed and delivered and are each valid and binding
obligations of the Obligor enforceable in accordance with their terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws in effect from
time to time affecting the enforceability of creditors' rights generally or
by general principles of equity.
(d) The Obligor intends to occupy the Project or cause the Project to
be occupied and to operate or cause it to be operated at all times during
the term of the Agreement for Project Purposes and does not know of any
reason why the Project will not be so used by it in the absence of
supervening circumstances not now anticipated by it or beyond its control.
(e) The Project will be constructed and installed in such manner as
to conform with all applicable zoning, planning, building and other
regulations of governmental authorities having jurisdiction of the Project,
all necessary utilities are or will be available to the Project, and
the Obligor has obtained or will obtain all requisite zoning, planning,
building, environmental or other permits necessary for the construction of
the Project for Project Purposes, and additional permits necessary for the
use of the Project are expected to be obtained upon application at the
appropriate times.
(f) The Obligor's estimates of Project Costs, the Completion Date and
period of usefulness of the Project which were supplied to the Issuer have
been made in good faith and are fair, reasonable and realistic.
(g) No litigation or governmental proceeding is pending or, to the
best knowledge of the Obligor threatened against the Obligor which could
have a material adverse effect on its financial condition or business,
or its power to borrow or repay the Loan.
(h) The Obligor does not have any material contingent obligations
which are not disclosed in writing to the Bank.
(i) All representations and warranties in the Reimbursement Agreement
are incorporated herein as set forth therein.
(j) The Project qualifies as a "project" under the Act.
(k) The financing of the Project will result in the creation of
approximately 80 new jobs and will not result in the transference of
employment of more than 20 full-time employees from another municipality
to the Municipality without the Obligor first obtaining the prior written
consent of any municipality from which such employment is to be
transferred.
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(l) All the net Bond proceeds from the sale of the Bonds will be
expended on the Project to be owned by the Obligor, except for proceeds
used for the payment of costs of issuing the Bonds. Substantially
all (at least 95%) of the costs of the Project are for the acquisition or
construction of land or property of a character subject to the allowance
for depreciation. No costs of the Project to be financed from the proceeds
of the Bonds were paid for or incurred prior to official action being taken
by the Issuer on the Inducement Date. As of the date hereof, no portion of
the Project has been placed in service by the Obligor.
(m) There are no other bond issues, which together with the Bonds,
are to be used with respect to a single building, an enclosed shopping mall
or strip of offices, stores or warehouses using substantial common
facilities.
(n) No portion of the Board proceeds will be used to provide any
airplane, skybox or other private luxury box, any health club facility, any
facility primarily used for gambling or any store the principal business of
which is the sale of alcoholic beverages for consumption off premises.
(o) Less than 25% of the Bond proceeds are to be used directly or
indirectly for the acquisition of land used for other than farming
purposes, and no portion of the Bond proceeds is to be used, directly
or indirectly for the acquisition of land used for farming purposes.
(p) None of the Bond proceeds is to be used for the acquisition of
any property (or an interest therein) the first use of which property is
not pursuant to such acquisition.
(q) Substantially all (at least 95%) of the net proceeds of the
Bonds (face amount, less qualified credit enhancement fees, plus earnings
on Bond proceeds deposited in the Project Fund) will be used to provide
manufacturing facilities within the meaning of Code Section 144(a)(12)(C).
For this purpose, the term "manufacturing facility" means any facility
which is used in the manufacturing or production of tangible personal
property (including the processing resulting in a change in the condition
of such property). The term "manufacturing facility" includes facilities
which are directly related and ancillary to a manufacturing facility
(determined without regard to this sentence) if a) such facilities are
located on the same site as the manufacturing facility and b) not more than
25% of the net proceeds of the Bonds are used to provide such facilities.
The Obligor, for purposes of this representation, is able to meet all of
the criteria below regarding manufacturing facilities. Office space is
directly related and ancillary to a manufacturing facility where such
office is located on the premises of the manufacturing facility and not
more than a de minimis (5%) portion of the functions to be performed at
such office is directly related to the day-to-day operations at such
manufacturing facility. Facilities for the short-term warehousing of raw
materials incidental to production, or the temporary warehousing of
finished product constitutes facilities directly related and
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ancillary to a manufacturing facility. An on-site laboratory whose purpose
is to test the manufactured product for quality or to experiment with
different materials which might be used as raw materials for the product
may be directly related and ancillary to a manufacturing facility.
Loading docks or rail spurs to unload raw materials or load finished
products may be directly related and ancillary. Forklifts or similar
equipment are directly related and ancillary to a manufacturing facility,
but trucks or vans to deliver the final product are not. A showroom
staffed with full-time sales personnel is outside the scope of a
manufacturing facility.
(r) The Obligor expects to cause the Project to be utilized for
manufacturing activities for the term the Bonds will be outstanding.
(s) Except as is permitted by Code Section 149(b), the Bonds are
not federally guaranteed within these provisions; specifically the payment
of principal or interest with respect to the Bonds is not guaranteed in
whole or in part by the United States or any agency or instrumentality
thereof; the Bonds are not issued as part of an issue a significant
portion of the proceeds of which is to be used in making loans the payment
of principal or interest with respect to which is to be guaranteed in
whole or in part by the United States or any agency or instrumentality
thereof, or invested directly or indirectly in federally insured deposits
or accounts; and the payment of principal or interest on the Bonds is not
otherwise indirectly guaranteed in whole or in part by the United States
or an agency or instrumentality thereof.
(t) The sum of the authorized face amount of the Bonds allocable to
each test-period beneficiary (as defined in Code Section 144(a)(10)) plus
the respective aggregate face amount of all tax-exempt facility related
bonds presently outstanding (not including any obligations which are to be
redeemed from the proceeds of the Bonds) which are allocable to each
test-period beneficiary does not exceed $40,000,000. The Obligor will not
sell, lease or enter any other arrangement having the effect of causing
another person to become a beneficiary of the Bond financed facility the
test-period which would have the effect of making interest on the Bonds
includible in the gross income for Federal income tax purposes of the
holder thereof.
(u) No more than 2% of the "issue price" of the Bonds will be used
for any costs of insurance of the Bonds.
(v) The weighted average maturity of the Bonds does not exceed 120%
of the weighted average reasonably expected economic life of the Project
financed with the net proceeds of the Bonds pursuant to Code Section
147(b).
(w) No more than 25% of the net proceeds of the Bonds will be used
to provide a facility the primary purpose of which is one of the following:
retail food and beverage service, automobile sales or service, or the
provision of recreation or entertainment pursuant to Code Section
144(a)(8)(A).
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(x) No portion of the proceeds of the Bonds will be used to provide
any of the following: any private or commercial golf course, country club,
massage parlor, tennis club, skating facility (including roller skating,
skateboard, and ice skating), racquet sports facility (including any
handball or racquetball court), hot tub facility, suntan facility, or
racetrack pursuant to Code Section 144(a)(8)(B).
(y) There are no "private activity bonds" as defined in Section 103
of the Code, either (i) outstanding on the Effective Date, the proceeds of
which have been or shall be used with respect to any facility located in
the Municipality of which the Obligor or a related person to the Obligor is
a principal user or (ii) delivered or to be delivered within 30 days of the
Effective Date, which are or have been marketed pursuant to a common plan
of marketing with the Bonds, with respect to any facility of which the
Obligor or a related person to the Obligor is a principal user.
(z) The face amount of the Bonds, plus the aggregate amount of
capital expenditures (excluding capital expenditures paid for with proceeds
of the Bonds) by the Obligor, any related person thereto, any principal
user of the Project, and any person related thereto (all within the meaning
ascribed in Code Section 144(a)(4)) in the Municipality and areas
contiguous thereto or attributed to the Municipality beginning three years
before the Effective Date and ending three years after the Effective Date
do not and will not exceed $10,000,000. In addition, the Obligor will not
violate any other provisions of the Code relating to the foregoing.
(aa) No expenditures for the Project were made prior to 60 days
before the Issuer adopted its official intent resolution for the Project on
the Inducement Date.
(bb) The Project has not been "placed in service" more than 18 months
prior to the date of issuance of the Bonds and no expenditure to be
reimbursed with proceeds of the Bonds was made more than three years prior
to the date of issuance of the Bonds.
(cc) Other than the Bonds there are no other tax exempt obligations
issued for the benefit of the Obligor or any "related person" which were or
are to be sold (a) within 15 days of the date of issuance of the Bonds, (b)
pursuant to the same plan of financing as the Bonds, and (c) payable from
the same source of funds as the Bonds.
(dd) All representations and warranties of the Obligor set forth in
the Non-Arbitrage and Tax Compliance Certificate of the Obligor dated the
Effective Date (including exhibits thereto) are true and correct as of
that date.
Section 1.2 Additional Covenants. The Obligor hereby convenants that
unless notified otherwise by Bond Counsel, the Obligor will comply with the
following:
(a) Any proceeds received upon the sale of any of the property which
is included in the Project (i) will be invested at a yield not in excess of
the yield on the
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Bonds and used for the purpose of redeeming the Bonds at the first
subsequent call date, or (ii) will be used for the purpose of acquiring
property performing the same function as the disposed Project property.
(b) If part or all of the Project wears out or becomes obsolete so
that it is no longer functional to the Obligor and the Obligor deems it
appropriate to dispose of such portion of the Project and, only if, the
Obligor or any related party thereto receives no economic benefit from the
disposal thereof, then the Obligor may dispose of such property other than
as provided in (a) above.
Section 1.3 Issuer Findings and Representations.
(a) The Issuer has found that the Project and the financing thereof
through issuance of the Bonds will promote the public purposes of the Act and
the public welfare by encouraging and assisting the location, purchase,
construction, reconstruction, modernization, improvement, maintenance, repair,
furnishing, equipping and expansion by industrial and commercial enterprises of
their facilities within the State and the alleviation and prevention of
conditions of unemployment and be otherwise strengthening the economy of the
State and its municipalities.
(b) Based upon the advice of Bond Counsel, the Issuer has the necessary
power under the Act, and has duly taken all action on its part required to
authorize, execute and deliver the Agreement and to issue the Bonds. The
execution and performance by the Issuer of its obligations under this Agreement
will not violate or conflict with any instrument by which the Issuer or its
properties are bound.
(c) All of the proceedings approving the Agreement and the Indenture
relating to the Bonds were conducted by the Issuer at meetings which complied
with Act 267, Michigan Public Acts, 1976, as amended.
(d) Any member of the Board of Directors of the Issuer who is directly or
indirectly a party to or in any manner whatsoever interested in the Agreement,
the Indenture, the Bonds or the proceedings related thereto abstained from
participating in and voting in any proceedings relating to issuance of the
Bonds.
Section 1.4 Additional Bonds. At the request of the Obligor the Issuer
may, but shall not be required to, authorize the issuance of the Additional
Bonds in accordance with Section 112 of the Indenture. Additional Bonds shall
not be issued without the prior written consent of the Bank. The terms of any
Additional Bonds shall be approved in writing by the Obligor. Additional Bonds
may be issued only to finance any one or more of the following: (i) the costs
of making Improvements to the Project; (ii) the refunding of all or any part of
the Bonds; and (iii) the Issuance Costs relating to the Additional Bonds and
other costs reasonably related to the financing as shall be agreed upon by the
Obligor and the Issuer. Any Improvements to the Project acquired with the
proceeds of the Additional Bonds shall become a part of the Project
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and shall be included under the Agreement. Refusal for any reason by the
Issuer to issue Additional Bonds shall not release the Obligor from any
provisions of the Agreement.
ARTICLE II
THE BONDS AND THE PROCEEDS THEREOF
Section 2.1 The Bonds. The Issuer has authorized the issuance and sale
of the Bonds. Upon issuance and delivery, the proceeds of the sale of the
Bonds derived by the Issuer shall be deposited with the Trustee as follows:
(a) in the Bond Fund, a sum equal to the accrued interest, if any, on the Bonds
and (b) in the Project Fund the balance of the proceeds of the Bonds. The
obligations of the Issuer and the Obligor under the Agreement are expressly
conditioned upon delivery of the Bonds and receipt of the proceeds thereof.
Section 2.2 Issuer Action on Redemption. The Issuer shall, at the
request of the Obligor in the case of an optional redemption or at the request
of the Trustee in the case of a mandatory redemption on expiration of the
Credit Facility, a mandatory redemption on Determination of Taxability or
mandatory redemption from Surplus Bond Proceeds, forthwith take all steps as
may be necessary under the Indenture to effect the earliest practicable
redemption, as provided under the Indenture, of any or all of the Bonds or
portions thereof as may be specified by the Obligor or Trustee, as the case
may be.
In the event of an optional redemption, mandatory redemption on
Determination of Taxability or mandatory redemption on expiration of the Credit
Facility, unless such redemption is effected in connection with a refunding,
the Obligor will pay or cause to be paid pursuant to a draw on the Credit
Facility an amount equal to the applicable redemption price as a prepayment of
the principal amount of the Loan corresponding to such Bonds or portions
thereof, together with premium, if any, and interest accrued to the redemption
date.
In the case of an Extraordinary Optional Redemption, the Obligor's
direction to the Issuer to redeem shall be given, if at all, within six months
following the occurrence of the event giving rise to such redemption.
In the event the Obligor receives notice under the provisions in the
Bond Form Appendix entitled Mandatory Redemption on Determination of Taxability
that a proceeding has been instituted which could lead to a determination that
interest on the Bonds is includable in gross income for federal income tax
purposes and the resultant Mandatory Redemption on Determination of Taxability,
the Obligor shall promptly notify the Trustee, the Bank and the Issuer of
such proceeding.
Section 2.3 Investment of Bond Fund and Project Fund; Non-Arbitrage
Covenant. Any moneys held as part of the Bond Fund or Project Fund shall be
invested, reinvested or applied by the Trustee in accordance with and subject
to the conditions of Article VII of the Indenture.
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The Obligor and the Issuer shall make no use of the proceeds of the Bonds, or
any funds which may be deemed to be proceeds of the Bonds pursuant to Section
148 of the Code and the applicable regulations thereunder, which, if such use
had been reasonably expected on the date of issuance of the Bonds, would have
caused the Bonds to be "arbitrage bonds" within the meaning of such Section and
such regulations, and the Obligor shall comply with the requirements of such
Section and such regulations throughout the term of the Bonds as provided by
and required in the Non-Arbitrage and Tax Compliance Certificate, the terms of
which are incorporated herein and made a part hereof by this reference. The
Obligor shall comply, for itself and on behalf of the Issuer, with all
requirements of the Code. In particular, the Obligor will compute rebate due,
if any, under Section 148 of the Code, pay any rebate due under the Code and
retain records as required by the Code.
Section 2.4 Credit Facility. The Obligor shall cause the Credit Facility to
be delivered to the Trustee on or before the Effective Date. The Credit Facility
shall (a) be in an amount equal to the aggregate principal amount of the Bonds
outstanding from time to time plus 60 days' interest thereon calculated at the
Maximum Rate; (b) provide for payment to the extent of the amount specified in
the preceding clause (a) in immediately available funds to the Trustee (upon
receipt of the Trustee's request for payment of the principal of, premium, if
any, and/or interest on the Bonds then outstanding on any Bond Payment Date,
Mandatory Repurchase Date, Purchase Date or redemption date pursuant to the
Indenture); and (c) provide an expiration date no earlier than the earliest of
(i) the payment in full by the Bank of funds authorized to be drawn thereunder
so that there are no Outstanding Bonds, (ii) the honoring by the Bank of a draft
on the Credit Facility for all Outstanding Bonds, (iii) a stated expiration
date, (iv) the day after any Fixed Rate Conversion Date if the Obligor so
elects, or (v) the sixteenth day following an Event of Default pursuant to
Section 801(d) of the Indenture. The Obligor will cause any extension of the
Credit Facility to be deposited by the Bank with the Trustee on or before the
extension date. Each extension of the Credit Facility shall be satisfactory in
form and substance to the Trustee. On each extension date the Obligor will
deliver the items required by Section 210 of the Indenture. The Obligor shall
have the right to provide a Substitute Credit Facility in accordance with
Section 210 of the Indenture at least 60 days prior to the last Interest Payment
Date prior to the expiration of the Credit Facility or Substitute Credit
Facility then in effect.
Section 2.5 Tender. The Issuer agrees to cause the Trustee in the Indenture
to act as tender agent for the Obligor in connection with certain tenders of
Variable Rate Bonds and as tender agent for the Bank in connection with certain
other tenders of Variable Rate Bonds, all as provided in Article II of the
Indenture.
Section 2.6 Remarketing Agent. The Obligor hereby approves of the
appointment of McDonald & Company Securities, Inc., as the initial Remarketing
Agent and further covenants and agrees that without prior written notice to the
Trustee, and without approval by the Bank which approval shall not be
unreasonably withheld, it will not change the Remarketing Agent.
Section 2.7 Right to Exercise Conversion Option. Subject to the ability of
the Obligor to satisfy certain conditions described in the Indenture, the right
is reserved to the Obligor, upon
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receipt of prior approval from the Bank, to exercise the conversion option in
accordance with the Indenture.
Section 2.8 Rebate Account. The Obligor covenants and agrees that it will
maintain on its books and records a "Rebate Account" detailing, in writing,
compliance with Section 2.3 hereof. Any moneys deposited into the Rebate Account
shall be disbursed in accordance with Section 2.3 hereof.
ARTICLE III
THE LOAN AND LOAN REPAYMENTS
Section 3.1 The Loan. Concurrently with the delivery of the Bonds, the
Issuer will, upon the terms and conditions of the Agreement, lend to the
Obligor, by deposit of the proceeds thereof with the Trustee in the Project
Fund, an amount equal to the principal amount of the Bonds for application to
Project Costs. The accrued interest, if any, received by the Issuer upon the
sale of the Bonds shall be deposited into the Bond Fund and shall be applied to
the first interest due on such Bonds.
Section 3.2 Loan Repayments; Credit Facility. Except as hereinafter
provided, the Obligor shall pay or cause to be paid, in immediately available
funds, to the Trustee, for the account of the Issuer, loan repayments
corresponding to the principal, premium, if any, and interest payments on the
Bonds (the "Loan Repayments"); in lieu of such payments, the Trustee shall draw
on the Credit Facility, pursuant to Section 209 of the Indenture, amounts equal
to such Loan Repayments. So long as the Credit Facility is in effect, the Loan
Repayments representing principal of, premium, if any, and interest payments on
the Bonds shall be made by deposits of the proceeds of drawings under the Credit
Facility and the Obligor shall reimburse the Bank in accordance with the
Reimbursement Agreement. In addition, the Obligor shall pay or cause to be paid
Loan Repayments in installments equal to (a) the principal of the Bonds maturing
or subject to redemption on any Bond Payment Date, (b) the interest on the Bonds
at the interest rate then in effect, due on each Bond Payment Date and (c) any
premium required to be paid on the Bonds.
Payments of the principal of, premium, if any, or interest on the Bonds
shall be made solely from the Security, including draws under the Credit
Facility (except with respect to premium, unless the Credit Facility has been
amended to cover premium on the Bonds). The Obligor's obligation to make Loan
Repayments is and shall remain unconditional regardless of the sufficiency and
availability of Available Moneys to make such payments.
With the prior written approval of the Bank and written notice to the
Issuer and the Trustee, the Obligor may prepay in whole or in part amounts due
on account of the Loan Repayments or for the redemption of Bonds prior to
maturity or purchase, but such prepayment shall not in any way alter or suspend
any of the obligations of the Obligor under the terms of
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the Agreement and the Obligor shall continue to perform and be responsible for
the performance of all other terms and provisions. Such notice shall be given
at least 10 Business Days before the Trustee is to give notice of any related
redemption pursuant to Article IV of the Indenture. The Issuer agrees that the
Trustee may accept such prepayments when the same are tendered by the Obligor
and that such prepayments may be directed by the Obligor to be used for credit
on Loan Repayments or for the redemption or purchase of Bonds in the manner and
to the extent provided herein and in the Indenture.
In the event the Obligor prepays Loan Repayments in the following manner
and in accordance with the provisions of the Indenture: (a) in Available Moneys,
after delivering the No Act of Bankruptcy Certificate attached hereto as
Exhibit D to the Trustee or (b) by causing the Trustee to draw on the Credit
Facility, for deposit in the Bond Fund in an amount of money (or in any
other manner satisfactory to the Trustee) which, together with amounts then on
deposit in the Bond Fund and available therefor, shall be sufficient (i) to
retire and redeem at the earliest date(s) permitted under the Indenture all of
the then outstanding Bonds and (ii) to pay any interest accruing on the Bonds
to maturity or redemption, and shall also make provision satisfactory to the
Issuer and the Trustee for all fees, costs and expenses specified in Article V
hereof accruing through the final payment of the Bonds, then the Loan shall be
deemed fully repaid and canceled, and the lien of the Indenture shall be
discharged, except for the provisions providing for payment of principal of,
premium, if any, and interest to the Bondholders.
ARTICLE IV
INSTALLATION OF THE PROJECT
Section 4.1 Project Fund Disbursements. There is established with the
Trustee under the Indenture the Project Fund, the moneys in which, subject to
the terms hereof and of the Indenture, and subject to the security interest
therein granted by the Obligor to the Issuer, shall be the property of the
Obligor. Unless an Event of Default has occurred and is continuing which the
Trustee is required to take notice of or is deemed to have notice of pursuant to
Section 901(h) of the Indenture, the Trustee, as authorized by the Bank pursuant
to the Indenture, shall disburse to or for the benefit of the Obligor out of the
Project Fund the lesser of (a) the Project Costs, or (b) the proceeds of the
Bonds deposited in the Project Fund and investment income in the Project Fund.
Such disbursements shall be made from time to time to pay Project Costs, so long
as there are moneys in the Project Fund, upon presentation of Requisition
Certificate(s) executed by the Obligor and approved for payment by the Bank. The
Trustee may also disburse moneys out of the Project Fund to or for the benefit
of the Issuer upon the Obligor's failure to pay the fees, costs and expenses of
the Trustee or Issuance Costs as required by Section 5.2 hereof upon
presentation of a Requisition Certificate executed by the Issuer for such
purpose.
Disbursements from the Project Fund shall be made no more often than
monthly upon the Trustee's receipt of an executed and approved Requisition
Certificate.
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The Obligor shall also deliver or cause to be delivered to the Trustee with
a Requisition Certificate such documents and certificates as may be required by
the Bank, it being understood that the Trustee shall have no duty to review such
documents and certificates nor shall it be required to approve same.
Upon the occurrence of an Event of Default under the Indenture, any moneys
in the Project Fund shall be transferred by the Trustee to the Bond Fund.
Upon request and with reasonable notice, the Obligor shall permit the
Trustee or the Issuer or its authorized agents to audit the records of the
Obligor relating to Project Costs during normal business hours.
Section 4.2 Obligation of the Obligor to Complete the Project. The Obligor
shall proceed with reasonable dispatch to complete the Project substantially in
accordance with the Plans. The Obligor may revise the Plans, subject to the
General Limitations and under the conditions contained in this section.
The Issuer makes no warranty, either express or implied, and offers no
assurance as to the condition of the Project or that the Project is or will be
suitable for the Obligor's purposes, or that the proceeds derived from the sale
of the Bonds will be sufficient to pay all Project Costs, and the Issuer shall
not be liable to the Obligor if for any reason the Project is not completed. In
the event moneys in the Project Fund are insufficient to pay all Project Costs,
the Obligor will complete the Project and pay the Project Costs in excess of the
sum of moneys available in the Project Fund. By reason of the payment of any
such portion of the Project Costs, the Obligor shall not be entitled to any
reimbursement from the Issuer, the Trustee or the holders of the Bonds in
respect thereof or to any diminution or abatement in the Loan Repayments payable
under the Agreement.
Section 4.3 Completion Certificate. The Obligor shall as promptly as
practicable file with the Trustee, the Issuer and the Bank a certificate
substantially in the form of Exhibit C attached hereto when the Project is
complete. All moneys deposited in the Project Fund and not needed, as of the
Completion Date, to pay or reimburse Project Costs (which money shall be used
for such purposes if needed), shall, upon receipt of such certificate, and in
any event on the third anniversary hereof be deemed Surplus Bond Proceeds and
shall be immediately transferred to the Bond Fund to be applied by the Trustee
in the manner provided in Section 4.4 of this Agreement.
Section 4.4 Use of Surplus Bond Proceeds. All moneys transferred to the
Bond Fund pursuant to the provisions of Section 4.3, Section 6.1 and Article VII
hereof ("Surplus Bond Proceeds") shall be applied by the Trustee for redemption
of the Bonds pursuant to Mandatory Redemption from Surplus Bond Proceeds as
provided in the Bond Form Appendix to the Indenture or reimbursement of the Bank
for honoring a drawing under the Credit Facility for such purpose, or may be
used for any other purpose approved in writing by the Bank which is permitted by
the Act and which, in the opinion of Bond Counsel, will not affect the exclusion
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from gross income for federal income taxation purposes of interest on the
Bonds. Prior to such use, such Surplus Bond Proceeds shall not be invested at a
yield in excess of the yield on the Bonds, unless, in the opinion of Bond
Counsel, the investment of Surplus Bond Proceeds at a yield in excess of the
yield on the Bonds will not affect the exclusion from gross income for Federal
income tax purposes of the interest on the Bonds.
In no event shall Surplus Bond Proceeds so transferred to the Bond Fund
or the investment income thereon be used to pay interest on the Bonds.
ARTICLE V
OTHER PECUNIARY OBLIGATIONS OF THE OBLIGOR
Section 5.1 Taxes and Other Costs. The Obligor shall promptly pay, as
the same become due, all lawful taxes and governmental charges of any kind
whatsoever, including without limitation income, profits, receipts, business,
property and excise taxes, with respect to any estate, interest, documentation
or transfer in or of the Project, the Agreement, the Loan or any payments with
respect to the foregoing, the costs of all building and other permits to be
procured, and all utility and other charges and costs incurred in the operation,
maintenance, use, occupancy and upkeep of the Project. The Obligor shall
furnish the Issuer upon request proof of payment of any such taxes, charges or
costs. The Obligor may in good faith contest, and during such contest not pay,
any such taxes, charges and costs, as provided in the Reimbursement Agreement.
Section 5.2 Issuer Fees and Expenses. The Obligor shall pay all
Issuance Costs and other reasonable out-of-pocket costs and expenses of the
Issuer incidental to the performance of its obligations under the Agreement,
the Indenture and with respect to its authorization, sale and delivery of the
Bonds, or reasonably incurred by the Issuer in enforcing the provisions of the
Agreement or the Indenture.
Section 5.3 Fees and Expenses of the Trustee and Remarketing Agent.
The Obligor shall pay the reasonable fees, costs and expenses and advances of
the Trustee, and the Remarketing Agent under the Indenture for services
rendered in connection with the Bonds, the duties and services of such Trustee
being set out in the Indenture, and it shall pay the Trustee, in addition, all
reasonable out-of-pocket counsel fees, taxes and other fees, costs and expenses
reasonably incurred by the Trustee in performing its duties as Trustee and in
entering into the Indenture. All such payments shall be made as statements are
rendered and shall be made by the Obligor directly to the Trustee except to the
extent fees and expenses of the Trustee incurred in connection with the
issuance of the Bonds are paid from proceeds of sale of the Bonds.
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Section 5.4 Indemnification of the Issuer.
(a) The Issuer and its members, officers, agents, employees and any other
Person acting for or on behalf of the Issuer (hereinafter, the "Indemnified
Persons") shall not be liable to the Obligor for any reason. The Obligor shall
indemnify and hold the Issuer and the Indemnified Persons harmless from any
loss, expense (including reasonable counsel fees), or liability of any nature
due to any and all suits, actions, legal or administrative proceedings, or
claims arising or resulting from, or in any way connected with:
(i) the financing, installation, operation, use, or maintenance of
the Project,
(ii) any act, failure to act, or misrepresentation by any person,
firm, corporation or governmental agency, including the Issuer, in
connection with the issuance, sale, remarketing or delivery of the Bonds,
or
(iii) any act, failure to act, or misrepresentation by the Issuer in
connection with this Agreement or any other document involving the Issuer
in this matter.
If any suit, action or proceeding is brought against the Issuer or any
Indemnified Person, that action or proceeding shall be defended by counsel to
the Issuer or the Obligor, as the Issuer shall determine. If the defense is by
counsel to the Issuer which is the Attorney General of the State, or may in
some instances be private, retained counsel, the Obligor shall indemnify the
Issuer and Indemnified Persons for the reasonable cost of that defense
including reasonable counsel fees. If the Issuer determines that the Obligor
shall defend the Issuer or Indemnified Person, the Obligor shall immediately
assume the defense at its own cost. The Obligor shall not be liable for any
settlement of any proceedings made without its consent (which consent shall not
be unreasonably withheld).
(b) The Obligor shall also indemnify the Issuer for all reasonable costs
and expenses, including reasonable counsel fees, incurred in:
(i) enforcing any obligation of the Obligor under this Agreement or
any related agreement,
(ii) taking any action requested by the Obligor,
(iii) taking action required by this Agreement or any related
agreement, or
(iv) taking any action considered necessary by the Issuer and which
is authorized by this Agreement or any related agreement.
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(c) The obligations of the Obligor under this section shall survive any
assignment or termination of this Agreement.
(d) The Obligor shall not be obligated to indemnify the Issuer or any
Indemnified Person under subsection (a), if a court with competent jurisdiction
finds that the liability in question was caused by the willful misconduct or
sole gross negligence of the Issuer or the involved Indemnified Person(s),
unless the court determines that, despite the adjudication of liability but in
view of all circumstances of the case, the Issuer or the Indemnified Person(s)
is (are) fairly and reasonably entitled to indemnity for the expenses which the
court considers proper.
Section 5.5 Indemnification of the Trustee. The Obligor shall indemnify
and hold the Trustee harmless against any loss, liability or expense, including
reasonable attorneys' fees, or settlement costs incurred without breach of the
required standard of care set forth in the Indenture arising out of or in
connection with claims or actions taken under or pursuant to the Indenture,
including the costs and expenses of defense including counsel selected by the
Trustee against any such claim or action or liability. Notwithstanding anything
to the contrary in this Agreement, the Obligor expressly acknowledges and
agrees that the obligations and liabilities of the Obligor as set forth in this
Section 5.5 shall survive the resignation or removal of the Trustee.
Section 5.6 Insurance. The Obligor shall continuously insure against such
risks and in such amounts as are required under the Reimbursement Agreement.
ARTICLE VI
PROJECT MAINTENANCE
Section 6.1 Maintenance and Operation. The Obligor, at its expense, shall
maintain the Project in good condition, repair and working order, and shall
make or cause to be made from time to time all necessary repairs, renewals and
replacements, ordinary wear and tear and obsolescence excepted. Any machinery
and equipment comprising a portion of the Project and purchased with Bond
proceeds may not be removed from the site of the Project unless (i) other
machinery and equipment of equivalent or greater value and utility is
substituted therefor or (ii) the proceeds of the sale of such machinery and
equipment are used in accordance with Section 1.2(a) hereof subject to the
provision of Section 1.2(b) hereof; provided that the Obligor receives an
opinion of Bond Counsel that noncompliance with (i) or (ii) above will not
affect the exclusion of interest on the Bonds for federal income tax purposes
under the Code and the Act.
Section 6.2 Remodeling and Modifications. The Obligor may remodel or
modify the Project as it, in its discretion, may deem to be desirable for its
uses and purposes or that of its tenant; provided that such remodeling or
modifications shall not violate the General Limitations. The cost of such
remodeling, modifications or improvements shall be paid by the Obligor.
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ARTICLE VII
DAMAGE TO PROJECT AND CONDEMNATION
In the event (i) the Project is damaged or destroyed, or (ii) failure of
title to all or part of the Project occurs or title to or temporary use
of the Project is taken in condemnation or by the exercise of the power of
eminent domain by any governmental body or by any person, firm or corporation
acting under governmental authority, the Obligor shall promptly give written
notice thereof to the Issuer, the Trustee and, if the Credit Facility is in
effect at the time, the Bank. As soon as practicable the Obligor shall elect
in writing to the Issuer, the Bank and the Trustee, and with the consent of the
Bank as required by the Reimbursement Agreement, whether to deposit insurance
or condemnation proceeds in the Project Fund or in the Bond Fund. If the
Obligor shall elect to deposit such proceeds in the Project Fund, it shall
proceed to restore the Project with reasonable dispatch, and such moneys shall
be disbursed in accordance with Section 4.1 of this Agreement. If the Obligor
shall elect to deposit such proceeds in the Surplus Bond Proceeds Account in
the Bond Fund, such proceeds shall be used to redeem the Bonds to the extent of
such proceeds in the manner provided in the Indenture for Mandatory Redemption
from Surplus Bond Proceeds. As long as any of the Bonds are outstanding,
absent an approving opinion of Bond Counsel, all such funds shall not be
invested at a yield in excess of the yield on the Bonds prior to its
expenditure.
ARTICLE VIII
ACTIONS AFFECTING OBLIGOR AND ISSUER
INTERESTS IN THE AGREEMENT AND THE PROJECT
Section 8.1 Assignment of the Agreement. The Issuer shall assign its
rights under and interest in the Agreement (except Reserved Rights) and
in all moneys deposited in the various Funds under the Agreement and the
Indenture to the Trustee pursuant to the Indenture as security for payment of
the principal of and interest on the Bonds, and such assignment shall entitle
the Trustee to enforce any obligation of the Obligor under the Agreement. The
Obligor hereby consents to any and all assignments described in the preceding
sentence or set forth in the Indenture. The Issuer shall not amend the
Indenture without the written consent of the Obligor, the Trustee and the Bank,
as provided in the Indenture.
Pursuant to the Act, the assignment of the Issuer's rights and interests
pursuant to this Section 8.1 shall be valid and binding from the time this
assignment is made. The money or property pledged and thereafter received by
the Issuer immediately shall be subject to a lien in favor of the Trustee
without a physical delivery, filing, or any further act. The lien of the
Trustee shall be valid or binding as against parties having claims of any kind
in tort, contract, or otherwise, against the Issuer irrespective of whether the
parties have notice. Neither this
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Agreement, the Indenture, nor any other instrument by which the assignment is
made need be filed or recorded.
Section 8.2 Obligor's Interest in the Agreement. The Obligor shall not
assign or transfer its rights or obligations under the Agreement, except as
permitted in the Agreement or consented to by the Bank and the Trustee and as
long as the General Limitations are complied with.
Section 8.3 Liens by the Obligor. The Obligor shall not create or permit
the creation of any lien, encumbrance or charge upon the Project except
Permitted Encumbrances.
Section 8.4 Security Interest in the Project Fund. To better secure its
obligations hereunder, including the obligation to pay Loan Repayments, as
and when they are due, the Obligor hereby grants a security interest in the
moneys at any time held in the Project Fund, and any proceeds thereof, to the
Issuer and the Bank (to the extent the Trustee is directed to disburse such
moneys to the Bank pursuant to the Indenture) to be perfected by possession of
such moneys in the Project Fund by the Trustee and held therein for the benefit
of the Bondholders and Bank as provided in the Indenture.
ARTICLE IX
FURTHER OBLIGATIONS OF THE OBLIGOR
Section 9.1 Compliance with Laws. The Obligor shall, throughout the term
of the Agreement and at no expense to the Issuer, promptly comply or cause
compliance with all legal requirements of duly constituted public authorities
which are applicable to the Project or to the repair and alteration thereof, or
to the use or manner of use of the Project. Notwithstanding the foregoing, but
subject to the General Limitations, the Obligor may exercise its rights to
contest the legality of any such legal requirement as applied to the Project
provided that in the opinion of Counsel such contest shall not in any way
materially adversely affect or impair the obligations of the Obligor under the
Agreement or the exclusion of interest on the Bonds from gross income for
Federal income tax purposes.
Section 9.2 Maintenance of Assets; Ownership of Project.
(a) The Obligor, unless and until the Project shall be sold and
transferred to a new owner under paragraph (b) or (c) of this Section 9.2, will
do or cause to be done all things necessary to perform its obligations under
this Agreement and the other documents contemplated hereby and by the
Reimbursement Agreement. Except as provided in paragraph (b), the Obligor
shall not cause or permit the Project or any interest therein to be sold,
assigned or transferred.
(b) So long as no Event of Default shall have occurred and be continuing
hereunder, the Project may be conveyed and transferred and this Agreement
assigned in whole or in part to a new owner which assignment must be in
compliance with the General Limitations and
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(i) without the consent of the Bank, the Trustee or any Bondholder in
accordance with the Reimbursement Agreement, so long as the new owner is a
partnership or other legal entity owned or controlled by the shareholders of
the Obligor, or (ii) with respect to an unrelated new owner, in whole with the
consent of the Bank, and without the consent of the Trustee or any Bondholder;
provided that in each case (I) the new owner shall be a partnership or other
legal entity duly organized and validly existing in good standing under the
laws of any state and is qualified to do business in Michigan and shall assume
in writing the obligations of the Obligor under this Agreement and the other
documents contemplated hereby and (II) the Obligor shall, at least 30 days
prior to any such assignment or transfer, provide the Issuer and the Trustee
with written notice of such transfer accompanied by a copy of the assumption
agreement and an opinion of nationally recognized bond counsel that such
transfer will not cause or result in interest on the Bonds to be included in
gross income for federal income tax purposes.
(c) The Obligor shall at all times operate or cause to be operated the
Project in strict compliance with the terms of this Agreement so that it
fulfills the public purposes of the Act.
Section 9.3 General Limitations with Respect to Non-Impairment of
Tax-Exempt Status of the Bonds. Notwithstanding any other provisions of
the Agreement or any rights of the Obligor under the Agreement, the Obligor
shall not take or permit to be taken by its agents or assigns any action which,
or fail to take any reasonable action the omission of which, would
(i) impair the exclusion of interest on the Bonds from gross income
for Federal income tax purposes; or
(ii) affect the validity of the Bonds under the Act; or
(iii) materially alter the scope, character, value, operation or
utility of the Project.
The Issuer and the Trustee, upon notification of action to be taken by the
Obligor or prior to taking any action requested by the Obligor under the
Agreement, which action in the reasonable judgment of the Trustee or the Issuer
violates the foregoing General Limitations, may require, at the expense of the
Obligor, an opinion of Counsel or an Engineer or both, as may be appropriate,
in writing with respect to compliance with the foregoing General Limitations.
Section 9.4 Access to Project and Records. Subject to reasonable security
and safety regulations and reasonable requirements as to notice, the Trustee,
the Bank and their duly authorized agents shall have the right at all
reasonable times to enter and inspect the Project. The Trustee and the Bank
shall also have the right to inspect the books and records of the Obligor
pertaining to the Project and the Security (as defined in the Indenture),
subject to reasonable requirements as to notice and during regular business
hours.
Section 9.5 Requirements of Tenants. The Obligor shall use its best
efforts to require each of its tenants occupying space in the Project within
three years from the Completion Date
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as provisions of its lease or by means of a written certificate (a) to warrant
and represent that its occupancy of the Project shall not result in the
transfer of jobs employing more than 20 full-time employees previously located
within another municipality of the State, without first complying with the Act,
and (b) to warrant and represent that it will not take or permit to be taken by
its agents or assigns any action which, or fail to take any action the omission
of which would impair the exclusion of interest on the Bonds from gross income
for Federal income tax purposes, including a violation of the capital
expenditure limitation of Section 144(a) of the Code and (c) to warrant and
represent that it will for a period of three years after the date of original
issuance of the Bonds in the case of any tenant who occupies a sufficient
portion of the Project to be a principal user of the Project under Section
144(a) of the Code, require each tenant to file with the Obligor an annual
report of its applicable capital expenditures, (d) to attach to the lease or
certificate, a certificate of applicable capital expenditures within the
Municipality for the period of three years prior to the issuance of the Bonds
and any contemplated capital expenditures for a period of three years after the
issuance of the Bonds, and (e) to attach to the lease or certificate a Prior
Issue Certificate in the form attached to the Non-Arbitrage and Tax Compliance
Certificate as Schedule C-1.
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
Section 10.1 Events of Default. The term "Event of Default" shall mean,
whenever used in the Agreement, any one or more of the following events:
(a) Failure by the Obligor to pay any Loan Repayments in the amounts
and at the times provided in the Agreement, but if and only if the Bank
has, after demand under the Credit Facility, failed to pay the amount of
such Loan Repayment as and when due;
(b) Failure by the Obligor to observe and perform any other
obligations in this Agreement on its part to be observed or performed for a
period of 30 days after written notice specifying such failure and
requesting that it be remedied, given to the Obligor by the Issuer, the
Bank or the Trustee; provided, however, that if such Default shall be such
that it cannot be corrected within such period, it shall not constitute an
Event of Default if the Default is correctable without material adverse
effect on the Bonds and if corrective action is instituted by the Obligor
within such period and is diligently pursued until the Default is
corrected.
(c) Any representation or warranty made by the Obligor in any document
delivered by the Obligor to the initial purchasers, the Trustee, the Bank
or the Issuer in connection with the issuance, sale and delivery of the
Bonds is untrue in any material adverse respect.
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(d) The occurrence of an Event of Default under the Indenture.
(e) The occurrence of an Event of Default under the Reimbursement
Agreement.
The Events of Default described in subsection (b) above are also subject
to the following limitation: If the Obligor by reason of force majeure is
unable to carry out or observe the obligations described in such subsection
(b), the Obligor shall not be deemed to be in breach or violation of
this Agreement or in default during the continuance of such inability. The
term "force majeure" as used herein shall include, without limitation, acts of
public enemies; insurrections; riots; epidemics; landslides; lightning;
earthquake; fire; hurricanes; tornadoes; storms; floods; washouts; droughts;
arrests; civil disturbances; labor disturbances or strikes; explosions;
breakage or accident to machinery, transmission pipes or canals; partial or
entire failure of utilities; or any other cause or event other than financial
inability not reasonably within the control of the Obligor. The Obligor
agrees, however, insofar as possible to remedy with all reasonable dispatch the
causes preventing it from carrying out its agreement; provided, however, that
the settlement of strikes, lockouts and other industrial disturbances shall be
entirely within the exercise of the reasonable discretion of the Obligor.
Section 10.2 Remedies upon Event of Default. Whenever any Event of Default
shall have occurred and be continuing, the Issuer, with the consent of the
Trustee, or the Trustee acting alone, shall have and may exercise any one or
more of the following remedial powers:
(a) If the principal of and interest accrued on the Bonds shall have
been declared immediately due and payable pursuant to the Indenture, to
declare all Loan Repayments payable under Section 3.2 for the remainder
of the term of the Agreement to be immediately due and payable, whereupon
the same shall become immediately due and payable; provided, however, that
if the Trustee shall annul any such declaration pursuant to the Indenture,
the declaration provided for in this clause (a) shall be deemed annulled;
(b) If the principal of and interest accrued on the Bonds shall have
been declared immediately due and payable pursuant to the Indenture,
to institute any actions or proceedings at law or in equity for the
collection of Loan Repayments or other sums due and unpaid under the
Agreement, to prosecute any such action or proceeding to judgment or final
decree, and to enforce any such judgment or final decree and collect in the
manner provided by law any moneys adjudged or decreed to be payable;
(c) In case there shall be pending proceedings for the bankruptcy or
for the reorganization of the Obligor under the Federal bankruptcy laws
or any other applicable law, or in case a receiver or trustee shall have
been appointed for the property of the Obligor, to file and prove a claim
or claims for the whole amount owing under the Agreement plus interest
owing and unpaid in respect thereof and, in case of any judicial
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proceedings, to file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee
allowed in such judicial proceedings relative to the Obligor, its
creditors, or its property, and to collect and receive any moneys or other
property payable or deliverable on any such claims, and to distribute the
same after the deduction of its charges and expenses.
In case the Trustee or the Issuer shall have proceeded to exercise or
enforce any right or remedy under the Agreement and such proceeding shall have
been discontinued or abandoned for any reason, or shall have been determined
adversely, then and in every such case, the Obligor, the Issuer and the Trustee
shall be restored to its respective rights and positions hereunder and all
rights and remedies of the Obligor, the Issuer and the Trustee shall continue
as though no such proceeding had been taken, but subject to the limitations of
any such adverse determination.
Any amounts collected pursuant to action taken under this Section shall be
paid into the Bond Fund and applied in accordance with the Indenture, except
amounts collected pursuant to Article V for the benefit of the Issuer or the
Issuer's Agents, which shall be paid to and retained by the Issuer.
Section 10.3 Payment of Attorneys' Fees and Other Expenses. In the event
the Obligor should default under any of the provisions of the Agreement and the
Issuer and/or the Trustee should employ attorneys or incur other expenses for
the collection of the Loan or for the enforcement of performance or observance
of any obligation of the Obligor in the Agreement or any other document related
to the issuance of and security for the Bonds, the Obligor shall on demand
therefor pay to the Issuer or the Trustee, or both, as the case may be, the
reasonable fees of such attorneys and such other reasonable expenses so
incurred.
Section 10.4 Waivers and Limitation on Waivers. By reason of the assignment
of the Issuer's rights and interest in the Agreement to the Trustee, the
Trustee shall have the power with the consent of the Bank to, and shall if
requested by the Bank, waive or release the Obligor from any Event of Default
or the performance or observance of any obligation or condition of the Obligor
under the Agreement, provided such waiver or release is not prohibited by the
Indenture and the Trustee and the Issuer receive an opinion of Counsel that
such action will not impose any pecuniary obligation or liability or adverse
consequence upon the Issuer or the Trustee and the Issuer and the Trustee shall
have each been provided such indemnification from the Obligor as the Issuer or
the Trustee shall deem necessary, and provided that, with respect to a waiver
of an Event of Default such waiver shall be limited to the particular Event of
Default so waived and shall not be deemed to waive any other Event of Default
hereunder nor a waiver of a similar Event of Default on a future occasion.
No delay or omission to exercise any right occurring upon any Event of
Default shall impair any such right or shall be construed to be a waiver
thereof, but any such right may be exercised from time to time and as often as
may be deemed expedient. In order to exercise any remedy reserved to the
Issuer or the Trustee in this Agreement, it shall not be necessary to give
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any notice other than such notice as may be herein expressly required.
Notwithstanding anything to the contrary contained herein, the Obligor does not
waive any statute of limitations under applicable law.
ARTICLE XI
OBLIGATIONS OF OBLIGOR UNCONDITIONAL
Section 11.1 Obligor Obligations. The obligation of the Obligor to make
Loan Repayments and the payments required by Article V hereof and to perform its
other covenants hereunder shall be absolute and unconditional and shall not be
subject to any diminution by right of set-off, counterclaim, recoupment or
otherwise. During the term hereof, the Obligor (i) shall not suspend or
discontinue its Loan Repayments, (ii) shall perform and observe all of its other
obligations contained herein and (iii) except as explicitly permitted herein,
shall not terminate the Agreement for any cause including, without limiting the
generality of the foregoing, defect in title to the Project, failure to complete
the Project, any acts or circumstances that may constitute failure of
consideration, eviction or constructive eviction, destruction or damage to or
condemnation of the Project, commercial frustration of purpose, any change in
the tax or other law by the United States of America or the State or any
political subdivision of either, or any failure of the Issuer to perform and
observe any obligation or condition arising out of or connected with the
Agreement. This shall not be construed to release the Issuer from the
performance of any of its obligations under the Agreement; and in the event the
Issuer shall fail to perform any such obligation, the Obligor may institute such
action against the Issuer as the Obligor may deem necessary to compel
performance; provided, however, that no such action shall violate this Section
or diminish Loan Repayments. The Obligor may at its own cost and expense and in
its own name or in the name of the Issuer, prosecute or defend any action or
proceedings or take any other action involving third persons which the Obligor
deems reasonably necessary in order to secure or protect its rights under the
Agreement, and in such event the Issuer shall cooperate fully with the Obligor.
ARTICLE XII
MISCELLANEOUS
Section 12.1 Amounts Remaining in Funds. Any amounts remaining in the Bond
Fund, the Purchase Fund or the Project Fund upon expiration or sooner
termination of the Agreement as herein provided, after payment in full of the
Bonds (or provision therefor) in accordance with the Indenture, and all other
costs and expenses of the Obligor specified under Article V, and all amounts
owing the Issuer, the Trustee, the Bank, and the Remarketing Agent under the
Agreement and the Indenture, shall be paid to the Obligor.
24
29
Section 12.2 Obligor Bound by Indenture. The Indenture has been submitted
to the Obligor for examination, and the Obligor, by execution of this Agreement,
acknowledges and agrees that it has participated in the drafting of the
Indenture and agrees that it has approved the Indenture and agrees that it is
bound by and shall have the rights set forth by the terms and conditions thereof
and covenants and agrees to perform all obligations required of the Obligor
pursuant to the terms of the Indenture.
Section 12.3 Consents Under the Agreement. All consents permitted or
required to be given under the Agreement shall be reasonable and, unless
otherwise expressly provided, shall not be unreasonably withheld.
Section 12.4 Notices. AR notices, certificates or other communications
hereunder shall be sufficiently given and shall be deemed given on the date
shown as delivered when mailed by registered or certified mail, postage prepaid,
return receipt requested, addressed to the Issuer, the Obligor, the Bank, or the
Trustee, as the case may be, at the Issuer's Address, the Company's Address, the
Bank's Address, or the Trustee's Address, respectively, or hand delivered to the
above at its respective addresses. A duplicate copy of each such notice,
certificate or other communication given hereunder to the Issuer, the Obligor,
the Bank, or the Trustee shall also be given to the others.
The Issuer, the Obligor, the Bank, and the Trustee may by written notice to
the other parties, designate any further or different addresses to which
subsequent notices, certificates or communications shall be sent.
Section 12.5 Amendment. The Agreement may be amended only as provided in
the Indenture, and no amendment to the Agreement shall be binding upon either
party hereto until such amendment is reduced to writing and executed by the
parties hereto.
Section 12.6 Binding Effect. The Agreement shall be binding upon the
parties hereto and upon its respective successors and assigns, and the words
"Issuer" and "Obligor" shall include the parties hereto and its respective
successors and assigns and include any gender, singular and plural, any
individuals, partnerships or corporations.
Section 12.7 Severability. If any clause, provision or section of the
Agreement be ruled invalid or unenforceable by any court of competent
jurisdiction, the invalidity or unenforceability of such clause, provision or
section shall not affect any of the remaining clauses, provisions or sections.
Section 12.8 Execution in Counterparts. The Agreement may be executed in
several counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
25
30
Section 12.9 Captions and Table of Contents. The captions or headings and
the Table of Contents in the Agreement are for convenience only and in no way
define, limit or describe the scope or intent of any provisions of the
Agreement.
Section 12.10 Applicable Law. The Agreement shall be governed in all
respects, whether as to validity, construction, performance or otherwise, by the
laws of the State.
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IN WITNESS WHEREOF, the parties hereto have caused the Agreement to be duly
executed as of the day and year first above written.
MICHIGAN STRATEGIC FUND
By ???
------------------------------
Its Authorized Officer
MOLMEC, INC.
By ???
-------------------------------
Its Treasurer
---------------------
27
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EXHIBIT A
The Project, located on the Site described below, consists of the
acquisition, construction, and equipping of a manufacturing facility and the
purchase of machinery and equipment located in the Township of Hartland, County
of Livingston, Michigan for use by Molmec, Inc., in the production of prototype
molds.
A legal description of the Site, being the real property on which the
Project is located:
[SEE ATTACHED SCHEDULE "A"]
A-1
33
Exhibit "A"
PARCEL NO. D
Part of the Northwest 1/4 of Section 28, T3N-R6E, Hartland Township, Livingston
County, Michigan, more particularly described as follows: Commencing at the
North 1/4 corner of said Section 28, thence along the North line of said Section
28, as monumented, N 86 degrees 42 feet 08 inches W, 1326.61 feet; thence along
the West line of the East 1/2 of the Northwest 1/4 of said Section 28 as
monumented, S 02 degrees 01 feet 21 inches W, 2111.56 feet; thence 587 degrees
14 feet 18 inches E, 420.65 feet; thence S 02 degrees 45 feet 42 inches W, 75
degrees feet to the POINT OF BEGINNING of the Parcel to be described, thence N
80 degrees 41 feet 26 inches E, 75.00 feet; thence S 25 degrees 49 feet 41
inches E, 375.10 feet; thence S 04 degrees 10 feet 15 inches W, 521.50 feet;
thence N 87 degrees 15 feet 03 inches W, along the East-West 1/4 line of said
Section, as monumented, 460.00 feet; thence N 04 degrees 10 feet 19 inches S,
441.38 feet; thence N 13 degrees 14 feet 36 inches E, 75.00 feet, to the POINT
OF BEGINNING; Containing 5.54 acres, more or less, and subject to and including
use of the 66 foot wide Private Easement for Ingress, Egress and Public
Utilities as described below. Also subject to the 20 foot wide Easement for
Sanitary Sewer and Public Utilities as described below. Also subject to
Drainage Easement No. 1 as described below. Also subject to any other easements
or restrictions of record.
DESCRIPTION OF A 66 FOOT WIDE PRIVATE EASEMENT FOR INGRESS, EGRESS, PUBLIC
UTILITIES AND STORM DRAINAGE
Part of the Northwest 1/4 of Section 28, T3N-R6E, Hartland Township, Livingston
County, Michigan, more particularly described as follows: Commencing at the
North 1/4 Corner of said Section 28; thence along the North line of said
Section 28, as monumented, N 86 degrees 42 feet 08 inches W, 1326.61 feet;
thence along the West line of the East 1/2 of the Northwest 1/4 of said Section
28 as monumented, S 02 degrees 01 feet 21 inches W, 2111.56 feet; thence 587
degrees 14 feet 18 inches E, 420.65 feet; thence S 02 degrees 45 feet 42 inches
W, 75.00 feet, to the POINT OF BEGINNING of the 66 foot wide Private Easement
for Ingress, Egress, Public Utilities and Storm Drainage to be described,
thence S 87 degrees 14 feet 18 inches x. 420.65 feet; thence Southeasterly on
an arc right, having a length of 328.36 feet, a radius of 75.00 feet, a central
angle of 250 degrees 51 feet 08 inches and a long chord which bears S 38
degrees 11 feet 16 inches W, 122.23 feet; thence Northwesterly on an arc left,
having a length of 61.83 feet, a radius of 50.00 feet, a central angle of 70
degrees 51 feet 09 inches, and a long chord which bears N 51 degrees 48 feet 44
inches W, 57.97 feet; thence N 87 degrees 14 feet 18 inches W, 301.72 feet;
thence N 02 degrees 01 feet 31 inches E, 66.00 feet, to the POINT OF BEGINNING.
DRAINAGE EASEMENT NO. 1
Part of the Northwest 1/4 of Section 28, T3N-R6E, Hartland Township, Livingston
County, Michigan, more particularly described as follows: Commencing at the
North 1/4 Corner of said Section 28; thence along the North line of said
Section 28, as monumented, N 86 degrees 42 feet 08 inches W, 1326.61 feet;
thence along the West line of the East 1/2 of the Northwest 1/4 of said Section
28 as monumented, S 02 degrees 01 feet 21 inches W, 2111.56 feet; thence S 87
degrees 14 feet 18 inches E, 420.65 feet; thence S 02 degrees 45 feet 42 inches
W, 75.00 feet; thence N 80 degrees 41 feet 28 inches E, 75.00 feet, to the POINT
OF BEGINNING of the Drainage Easement to be described; thence S 85 degrees 49
feet 41 inches E, 375.10 feet; thence S 04 degrees 10 feet 19 inches W, 145.77
feet; thence N 85 degrees 49 feet 41 inches W, 40.00 feet; thence N 40 degrees
49 feet 41 inches N, 163.72 feet; thence N 04 degrees 10 feet 19 inches E,
20.00 feet; thence N 85 degrees 49 feet 41 inches W, 217.64 feet; thence North
on an arc left, having a length of 10.14 feet, a radius of 75.00 feet, a
central angle of 07 degrees 45 feet 14 inches and a long chord which bears N 05
degrees 25 feet 49 inches W, 10.14 feet to the POINT OF BEGINNING.
Page 1 of 2
34
Exhibit "A"
Together with easements over the following described property as set forth in
Declaration of Easements for Planned Development District dated October 7, 1994,
as recorded in liber , Page , Livingston County Records:
DESCRIPTION OF THE CENTERLINE A 20 FOOT WIDE EASEMENT FOR SANITARY SEWER AND
PUBLIC UTILITIES
Part of the Northwest 1/4 of Section 28, T3N-R6B, Hartland Township,
Livingston County, Michigan, more particularly described as follows: Commencing
at the North 1/4 Corner of said Section 28; thence along the North line of
said Section 28, as monumented. N 86 degrees 42 feet 08 inches W, 1326.61 feet;
thence along the West line of the East 1/2 of the Northwest 1/4 of said Section
28 as monumented, S 02 degrees 01 feet 21 inches W, 2187.56 feet; thence S 87
degrees 14 feet 18 inches E, 76.33 feet, to the POINT OF BEGINNING of the
centerline of the 20 foot wide Easement for Sanitary Sewer and Public Utilities
to be described; thence S 87 degrees 14 feet 18 inches E, 365.00 feet, to the
POINT OF TERMINUS.
DRAINAGE EASEMENT NO. 2
Part of the Northwest 1/4 of Section 28, T3N-R6B, Hartland Township, Livingston
County, Michigan, more particularly described as follows: Commencing at the
North 1/4 Corner of said Section 28; thence along the North line of said
Section 28, as monumented, N 26 degrees 42 feet 08 inches W, 1326.61 feet;
thence along the West line of the East 1/2 of the Northwest 1/4 of said Section
28 as monumented, S 02 degrees 01 feet 21 inches W, 2111.56 feet; thence S 87
degrees 14 feet 18 inches E, 420.65 feet; thence S 02 degrees 45 feet 42 inches
W, 75.00 feet; thence N 80 degrees 41 feet 26 inches E, 75.00 feet, to the
POINT OF BEGINNING of the Drainage Easement to be described; thence North on an
arc left, having a length of 10.49 feet, a radius of 75.00 feet, a central
angle of 08 degrees 00 feet 59 inches and a long chord which bears N 13 degrees
19 feet 11 inches W, 10.48 feet; thence S 85 degrees 49 feet 41 inches E.
222.48 feet; thence N 04 degrees 10 feet 19 inches E, 20.00 feet; thence N 49
degrees 10 feet 19 inches E, 169.39 feet; thence S 85 degrees 49 feet 41 inches
E, 36.00 feet; thence S 04 degrees 10 feet 19 inches W, 149.78 feet; thence N
85 degrees 49 feet 41 inches W, 375.10 feet, to the POINT OF BEGINNING.
Page 2 of 2
35
EXHIBIT B
REQUISITION CERTIFICATE
TO: Society Bank, Michigan, Trustee
FROM: Molmec, Inc. (the "Obligor")
SUBJECT: $5,000,000 Michigan Strategic Fund Variable Rate Demand
Limited Obligation Revenue Bonds, Series 1994 (Molmec,
Inc. Project)
This represents Requisition Certificate No. _________ in the total amount
of $_________ to pay those costs of the Project detailed in the schedule
attached.
The undersigned does certify that:
1. The expenditures for which moneys are requisitioned hereby
represent proper charges against the Project Fund of the subject bond
issue, have not been included in a previous requisition and have been
properly recorded on the Obligor's books.
2. The moneys requisitioned hereby are not greater than those
necessary to meet obligations due and payable or to reimburse the
Obligor for its funds actually advanced for costs of the Project and
do not represent a reimbursement to the Obligor for working capital.
3. The Obligor are not in default under the Agreement and nothing has
occurred to the knowledge of the Obligor that would prevent the
performance of its obligations under the Agreement.
4. In the event moneys in the Project Fund after payment of moneys
herein requested are insufficient to pay Project Costs, the Obligor
will pay such additional Project Costs as are incurred from such other
funds which are available for such purpose.
5. All of the property acquired with the moneys hereby requested will
be owned by the Obligor.
6. The sum of (A) moneys requisitioned hereby to pay (or reimburse the
Obligor of its prior payment of) issuance costs of the Bonds (within
the meaning of Section 147(g) of the Internal Revenue Code of 1986, as
amended) plus (B) the total moneys previously disbursed from the
Project Fund and similarly applied, does not exceed $100,000 (which is
2% of the face amount of the Bonds).
B-1
36
7. Delivered herewith are the following requested certificates, sworn
statements, waivers of lien, surveys, invoices, architect's
certificates and other documents:
-------------------------------------------------
Executed this day of , 199 .
---- ---------- -
MOLMEC, INC.
By
-----------------------------
Its Authorized Obligor
Representative
Approved By:
COMERICA BANK, Issuer of
the Credit Facility
By
-------------------------------
Its
-------------------------
B-2
37
SCHEDULE TO REQUISITION CERTIFICATE NO. _____________
Description of Property
Payee and Address or Services Provided Amount
----------------- ----------------------- ------
B-3
38
EXHIBIT C
COMPLETION CERTIFICATE
TO: Michigan Strategic Fund (the "Issuer"), Comerica Bank (the "Bank")
and Society Bank, Michigan, (the "Trustee")
FROM: Molmec, Inc. (the "Obligor")
SUBJECT: $5,000,000 Michigan Strategic Fund Variable Rate Demand Limited
Obligation Revenue Bonds, Series 1994 (Molmec, Inc. Project)
The undersigned does hereby certify:
1. The acquisition, construction and equipping of the Project have been
completed in accordance with the Plans and in such manner as to
conform with all applicable zoning, planning and building regulations
of the governmental authorities having jurisdiction of the Project,
as of the date of this Certificate (the "Completion Date").
2. The Costs of the Project have been paid in full except for those not
yet due and payable, which are described below and for which moneys
for payment thereof are being held in the Project Fund:
(a) Cost of the Project not yet due and payable:
Description Amount
$____________
TOTAL $____________
(b) Payments being contested:
Description Amount
$____________
TOTAL $____________
C-1
39
3. The moneys in the Project Fund in excess of the totals set forth in
2(a) and (b) above represent Surplus Bond Proceeds and the Trustee is
hereby authorized and directed to apply such moneys pursuant to
Section 4.4 of the Agreement.
4. No event of default has occurred under the Agreement or the
Reimbursement Agreement nor has any event occurred which with the
giving of notice or lapse of time or both shall become such an event
of default. Nothing has occurred to the knowledge of the Obligor
that would prevent the performance of its obligations under the
Agreement or the Reimbursement Agreement.
This certificate is given without prejudice to any rights against third
parties which exist at the date hereof or which may subsequently come into
being.
Capitalized terms used herein have the meanings given them in the Trust
Indenture for the Bonds.
Executed this ___ day of __________, 19__.
MOLMEC, INC.
By _______________________________
Its Authorized Obligor
Representative
C-2
40
EXHIBIT D
NO ACT OF BANKRUPTCY CERTIFICATE
TO: Comerica Bank, as issuer of the Credit Facility and
Society Bank, Michigan, as Trustee
FROM: Molmec, Inc. (the "Obligor")
SUBJECT: $5,000,000 Michigan Strategic Fund Variable Rate Demand
Limited Obligation Revenue Bonds, Series 1994 (Molmec,
Inc. Project)
The undersigned does hereby certify to the Trustee that, during and prior
to the period beginning ______________ and continuing until the date hereof, no
Act of Bankruptcy (as defined in that certain Loan Agreement, dated as of
December 1, 1994, between the undersigned and Michigan Strategic Fund) shall
have occurred.
The Obligor acknowledges that the Trustee and the Bank may conclusively
rely on this Certificate.
Under penalties of perjury, this certificate has been executed this ___
day of __________, 19_, by the Obligor.
MOLMEC, INC.
By _________________________
Its Authorized Obligor
Representative
D-1