Exhibit 10.5
LOAN AGREEMENT
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THIS AGREEMENT made this 30th day of March, 1999, between DM Management
Company of 25 Recreation Park Drive, Hingham, Massachusetts 02043 (the
"BORROWER") and Belknap County Economic Development Council, Inc., having its
principal office at 64 Court Street, Laconia, NH 03246 (the "LENDER").
WITNESSETH
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In consideration of the mutual covenants and agreements contained herein, the
parties agree as follows:
1. PURPOSE AND AMOUNT OF LOAN. LENDER agrees to lend to BORROWER, and the
BORROWER hereby agrees to borrow from LENDER and repay to LENDER or its
assigns the principal sum of $980,000.00 (hereinafter called the Loan)
for the purpose of purchasing specific equipment (the "Equipment") for
the facility located at 100 Birch Pond Drive, Tilton, New Hampshire.
2. INTEREST. Interest on the Loan shall be payable at the rate of 6.25%
per annum on the principal received. Interest shall be payable monthly,
beginning on April 30, 1999.
3. TERM. The term of the Loan shall be thirty six (36) months. All
payments shall be applied first to the payment of interest accrued to
the date of receipt thereof, and the balance, if any, to the reduction
of principal. The Loan may be prepaid at any time without premium or
penalty.
4. THE NOTE. The Loan shall be evidenced by a note in such form as the
LENDER shall require (the "NOTE") and shall be executed by the
BORROWER.
5. RIGHTS AND OBLIGATION. The holders of the Note, and BORROWER, hereby
expressly reserve all right to amend any provision of this Agreement,
to consent to or waive any departure from the provisions of this
Agreement, to amend or consent to or, waive departure from the
provision of the Note, and to release or otherwise deal with any
collateral security for payment of the Note.
6. CONDITIONS OF CLOSING. The obligation of LENDER to make the Loan as
provided in this Agreement is subject to the receipt by LENDER from
BORROWER of the Note in compliance with the terms hereof and, in
LENDER'S sole discretion, to the following additional conditions
precedent:
a. Subject to receipt of copies of Purchase Orders & canceled
checks confirming that at least $2,000,000 in non-CDBG funds
has been committed to the project, in accordance with CDBG
requirements.
b. The truth and accuracy, as of the closing date, of all
representations and warranties made herein by BORROWER and the
receipt by LENDER, of such documents, certificates of officers
of BORROWER, and such other evidence, as LENDER shall have
reasonably requested respecting the meeting of these
conditions.
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c. The receipt by the LENDER from BORROWER of copies of all
documents in connection with this Agreement and the
transactions contemplated hereby, or respecting the business
and affairs of BORROWER, that LENDER or its counsel may
reasonably have requested, satisfactory in form and substance
to LENDER and its counsel and certified, when appropriate, by
proper corporate officers and governmental authorities.
d. The payment by the Borrower of all closing costs and expenses
including but not limited to filing fees to perfect an
interest in the collateral for the loan.
7. APPLICATION OF PROCEEDS.
a. BORROWER agrees that it will apply the funds received by it
under this Agreement in accordance with the use of loan
proceeds specified in the loan request as approved by LENDER
and described in Section 1 above.
b. BORROWER agrees to provide additional equity funds to cover
additional project costs incurred as a result of overruns or
unanticipated expenses in financing the outfitting of the
facility (the "Project").
8. LOAN DISBURSEMENT. The LENDER has established for the BORROWER the Loan
amount for the purpose as set forth in Paragraph 1 herein. At the
closing, or shortly thereafter the LENDER will disburse to the BORROWER
the proceeds of the Loan.
9. SECURITY
a. BORROWER shall execute and deliver to LENDER at the closing of
the Loan a security agreement (the "Security Agreement") and
financing statements (the "Financing Statements") giving
LENDER security in all of the items (hereinafter the
"collateral") listed in Schedule A, attached hereto and hereby
made a part hereof, to secure payment of the principal of the
Note, the interest thereon, and any other sums payable by
BORROWER hereunder.
b.
(i) BORROWER represents that as of closing date LENDER
will have a valid first priority security interest in
the specific collateral listed in Schedule A.
(ii) The Security Agreement, Financing Statements, and
Note shall be in form satisfactory to LENDER and
shall provide, among other things, that in the event
of default by the BORROWER in any agreement, covenant
or condition contained in this Loan Agreement, or in
the Note or Security Agreement, LENDER may, at its
option, in addition to all other remedies, take
possession of the property given as security. LENDER
however, shall be under no obligation to exercise
this right and its action in this respect shall be
wholly at its option.
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(iii) BORROWER agrees to permit LENDER, until the Note has
been fully repaid with interest, at all reasonable
hours to inspect and audit all books, records,
contractual documents, and all other papers relating
to the business of Borrower; and BORROWER shall give
LENDER free access to the Facility for the purpose of
such inspection or audit and also for the purpose of
determining the condition of the Facility. In
addition, BORROWER shall provide to LENDER annual
financial statements within 120 days after the close
of the fiscal year.
10. INSURANCE. The collateral which is of insurable character will be kept
insured by financially sound and reputable insurers against loss or
damage by fire, explosion and other hazards customarily insured against
by extended coverage for the full insurable value of the property
insured and in any event an amount sufficient to prevent the owner
thereof from becoming a co-insurer, the proceeds thereof including
accrued interest, to be paid to LENDER to satisfy the balance owing on
the Note at the time of the loss, the remainder of the insurance
proceeds to be payable to BORROWER. If the proceeds of the insurance
together with such other funds as are available to BORROWER are
sufficient to pay for the restoration of the premises, BORROWER and
LENDER shall negotiate in good faith for the application of such funds
to such restoration. BORROWER will maintain, with financially sound and
reputable insurers, insurance against other hazards and risks as is
customarily maintained by other companies similarly situated and
operating like businesses including but not limited to Workmen's
Compensation Insurance, public liability and other risks.
All policies of insurance covering the equipment shall provide for
thirty days written minimum cancellation notice to Lender and at
request of Lender copies thereof shall be delivered to and held by it
and after an event of default and while it is continuing Lender may act
as attorney for BORROWER in obtaining, adjusting, settling and
canceling such insurance and endorsing any drafts.
11. REPRESENTATIONS. in order to induce the Lender to make the Loan
hereunder, BORROWER represents and warrants:
a. That BORROWER is not a party to any action, suit or proceeding
pending, or to the knowledge of the BORROWER, threatened at
law or in equity before any Court or administrative officer or
agency which brings into question the validity of the
transaction herein contemplated or is likely to result in any
adverse change in the business or financial condition of the
BORROWER.
b. That the BORROWER is not in default of any obligations,
covenants, or conditions contained in any bond, debenture,
note, or other evidence of indebtedness or any mortgages or
collateral instruments securing the same. The making of this
Agreement and the consummation of the transaction contemplated
herein will not violate any provision of law or result in a
breach or constitute a default under any agreement to which
BORROWER is a part or result in a creation of any lien, charge
or encumbrance upon any of its property or its assets.
c. BORROWER has filed all tax returns which are required to be
filed and has paid or made provision for the payment of all
material taxes which have or
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may become due pursuant to said returns or pursuant to any
assessments received by it. No tax liability has been asserted
by the Internal Revenue Service or other taxing agency,
federal, state or foreign, for taxes materially in excess of
those already provided for and the BORROWER knows of no basis
for any such deficiency assessment.
d. The BORROWER shall use all of the proceeds of this Loan for
the purposes stated in Section 1 hereof.
12. CONDITIONS OF LOAN. The making of the Loan hereunder shall be subject
to the following conditions precedent.
a. All loan provisions contained in ATTACHMENT III -REQUIRED LOAN
PROVISIONS are incorporated herein as Schedule B.
b. All of the representations and warranties contained in this
Agreement shall be true and correct on and as of the closing
date.
c. All proceedings taken in connection with the transaction
contemplated by this Agreement and all documents incidental
thereto shall be satisfactory in form, scope and substance to
LENDER'S counsel, and LENDER shall have received copies of all
documents which it or its counsel may reasonably request in
connection with the transaction in form, scope and substance
satisfactory to its counsel.
d. All necessary approvals or consents, if any such approvals or
consents be required of Governmental bodies having
jurisdiction with respect to any construction herein
contemplated, shall have been obtained, and failure to have
obtained such consents shall constitute a default hereunder.
e. There shall be delivered to LENDER a copy of the record of
minutes of the BORROWER's Board of Directors specifically
authorizing its officers to execute this Agreement and all
other documents necessary to the consummation of this
transaction. The record of the minutes of the Board shall be
certified to be true by the Secretary or Assistant Secretary
of BORROWER.
f. All necessary approvals or consents required with respect to
this transaction by any mortgagee or other party having any
interest in the specific collateral shall have been obtained,
and failure to have obtained such consents shall constitute a
default hereunder.
13. AFFIRMATIVE COVENANTS. Until payment in full of the Note and all of the
other payments due LENDER hereunder and the performance of all of the
terms, conditions and provisions of this Agreement, Borrower shall
cause the following to be done:
a. borrower will deliver to LENDER within fifteen (15) days after
any written request therefor from LENDER such information as
may be reasonably necessary to determine whether the BORROWER
is complying with its covenants and agreements contained in
this Loan Agreement or an Event of Default has occurred.
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b. BORROWER will punctually pay or cause to be paid the principal
and interest to become due in respect to the Note in
accordance with the terms thereof.
c. BORROWER will, upon demand, promptly pay and discharge all
taxes, assessments or other governmental charges which may
lawfully be levied or assessed on its income or profits or on
any property, real, personal or mixed, belonging to it or upon
any part thereof, and also all lawful claims for labor or
material and supplies, which, if unpaid, might become a lien
or charge upon any such property except that BORROWER shall
not be required to pay any such taxes, assessments, charges,
levies or claims so long as the validity thereof shall be
actively contested in good faith by proper proceedings,
provided that BORROWER shall establish reserves equal to any
such tax, assessment, charge, levy or claim during such
proceedings and such tax, assessment, levy or claim shall be
paid forthwith upon a final adjudication and order to pay from
any court of competent jurisdiction.
d. BORROWER will, upon demand, pay or cause to be paid the
principal and interest on all indebtedness to other lenders
heretofore or hereafter incurred or assumed by it when and as
the same shall become due and payable unless such indebtedness
be renewed or extended, and will observe, perform and
discharge all of the covenants, conditions and obligations
which are imposed on it by any and all agreements securing or
evidencing an encumbrance upon the collateral so as to prevent
an occurrence of any act or omission which under the
provisions thereof may be declared to be a default thereunder
which could result in a lien being placed upon the collateral.
e. BORROWER will at all times cause all of the collateral to be
maintained and kept in such condition and repair that LENDER'S
security will be adequately protected.
f. In the event that any provision of this Agreement or any other
instrument executed at closing or the application thereof to
any person or circumstances shall be declared unenforceable by
a Court of competent jurisdiction, the remainder of such
agreement shall nevertheless remain in full force and effect,
and to this end, the provisions of all covenants, conditions,
and agreements described herein are deemed separate.
g. BORROWER will give LENDER prior notice, in writing, of any
public hearing or meeting before any administrative or other
public agency which may, in any manner, affect the collateral.
h. The BORROWER agrees to diligently pursue the purposes of this
loan.
i. From time-to-time, BORROWER will execute and deliver any and
all further, or other instruments, and perform such acts, as
LENDER or its counsel may reasonably deem necessary or
desirable to confirm and secure to LENDER all rights and
remedies conferred upon LENDER by the terms of this Agreement
and by the Note.
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14. NEGATIVE COVENANTS. Until payment in full of the Note and performance of all
the obligations of this Agreement:
a. BORROWER will neither create nor suffer to exist any mortgage,
pledge, lien, charge, or encumbrance, including liens arising
from judgments, on the collateral (except for such liens as
are specifically set forth herein above as exceptions to
BORROWER'S title) which remain on the equipment for more than
ten days, except for taxes not delinquent or being contested
in good faith and by appropriate proceedings.
b. BORROWER will neither sell nor convey nor suffer to be
conveyed any of the equipment in a manner that is not in the
ordinary course of its business during the terms of its
obligation to LENDER.
15. ADDITIONAL COVENANTS.
a. EXPENSES. BORROWER agrees to pay all costs and taxes that
might be imposed or determined to be payable in connection
with the execution, issuance or delivery of the Note, or in
connection with any modification, amendment, or alteration of
the terms and provisions thereof, and to save LENDER and any
other holder of the Note harmless against any and all
liability with respect to the Note, all of which agreements of
BORROWER shall survive payment of the Note.
b. EXPENSES OF COLLECTION OR ENFORCEMENTS. If BORROWER shall at
any time default in making any payment of principal or
interest on the Note, BORROWER agrees that it will, to the
full extent permitted by law, pay to the holder of the Note,
in addition to any other amounts that may be due from BORROWER
to such holder, an amount equal to the costs and expenses of
collection or enforcement incurred by such holder in such
collection. In addition, the LENDER may impose upon the
BORROWER a delinquency charge at the rate of 5% per annum on
each installment of principal or interest not paid on or
before 10 days after such installment is due.
c. EXPENSES OF CORRECTION BY LENDER OF DEFAULT. In the event of
any default by BORROWER in full performance or observance of
any covenant or agreement contained herein or in the Note,
LENDER may, upon 10 days of written notice to BORROWER, and at
LENDER'S sole option (but without any obligation of LENDER to
do so) take such steps as may be necessary or appropriate to
correct or remedy such default in whole or in part, and all
costs and expenses incurred by LENDER in taking such steps
(including reasonable attorney's fee incurred by LENDER and
including any other sums paid or payable by LENDER to third
parties) shall forthwith upon written demand by LENDER be due
and payable by BORROWER to LENDER, with interest thereon
(payable on the first day of each calendar month) from the
time of incurrence thereof by LENDER at the rate of 10% per
annum until paid. In the event LENDER takes any action
provided for in the preceding sentence, the commencement or
taking of such action shall not be deemed to be a waiver by
LENDER of the default of BORROWER or a waiver of any other
available remedy of LENDER by reason of such default.
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d. EXPENSES OF AMENDMENTS, WAIVER, CONSENTS, ETC. In the event
BORROWER proposes to take or omit any act or action on the
part of BORROWER prohibited or required by any provision of
this Agreement or the Note, and BORROWER requests Lender to
consent thereto or waive compliance with any such provision,
or in the event BORROWER requests LENDER to consent to any
modification or amendment of this Agreement or the Note then,
in each such case, BORROWER agrees to reimburse or pay to
LENDER any expenses incurred by LENDER in connection with such
consent or waiver, or such modification or amendment, as the
case may be.
16. EVENTS OF DEFAULT. The principal indebtedness evidenced by the Note or
the unpaid balance thereof at the time outstanding shall be due and
payable at the election of the LENDER if any one or more of the
following events (herein called "events of Default") shall occur for
any reason whatsoever, and whether such occurrence shall be voluntary,
involuntary or come about or be effected by operation of law, or
pursuant to or in compliance with any judgment, decree or order of any
court or any order, rule or regulation of any administrative or
government body.
a. Default shall be made in payment of any principal of or
interest on the Note when due and payable; or
b. Default shall be made in the performance or observance of any
of the covenants or agreements contained in Section 14 hereof;
c. Any representation or warranty made by the BORROWER herein or
any statement or representations made in any certificate,
statement, or opinion delivered pursuant to this Loan
Agreement shall prove to have been incorrect in any material
respect as of the date when made; or
d. Any obligations of the BORROWER for the payment of borrowed
money (other than its obligations hereunder or under the Note)
shall not be paid at its maturity or any such obligations
shall become or be declared, pursuant to its terms, to be due
and payable prior to the express maturity thereof by reason of
default or other violation of the terms thereof, or
e. Default shall be made in the performance or observance of any
of the other covenants or agreements of BORROWER herein
contained not covered by (a), (b), (c) or (d) above, and such
default shall have continued for a period of 10 days after
notice thereof to the BORROWER by LENDER; or
f. BORROWER shall admit in writing its inability to pay its debts
generally as they become due, make an assignment for the
benefit of creditors, file a petition in bankruptcy, be
adjudicated insolvent or bankrupt, petition or apply to any
tribunal for an appointment of any receiver or trustee thereof
or of any substantial part of its property or commence any
proceedings under any arrangement, readjustment of debt, or
statute of any jurisdiction, whether now of hereafter in
effect; or there is commenced against BORROWER any such
proceedings which remain undismissed for a period of 90 days;
or
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g. BORROWER by any act indicates its consent to, approval of, or
acquiescence in any such proceedings or in the appointment of
any receiver or of any trustee for BORROWER with respect to a
substantial part of its property.
h. If any final judgment for the payment of money that is not
fully covered by liability insurance and is in excess of
$100,000.00 shall be rendered against BORROWER and not
discharged within 30 days.
i. If the BORROWER during the term of this loan affects a change
in ownership or control of the business substantially all of
its assets without prior written consent of the LENDER.
17. WAIVER OF NOTICE. The BORROWER hereby expressly waives any requirement
for presentation, demand, protest, notice of protest or other notice or
dishonor of any kind, other than the notice specifically provided for
in this Agreement.
18. NOTICES. All notices, demands and communications provided for herein or
made hereunder shall be delivered, or sent by certified mail, return
receipt requested, addressed in each case as follows, until some other
address shall have been designated in a written notice to the other
party hereto given in like manner.
TO BORROWER:
DM Management Company
25 Recreation Park Drive
Hingham, Massachusetts 02043
TO LENDER:
Belknap County Economic Development Council, Inc.
64 Court Street
Laconia, New Hampshire 03246
and shall be deemed to have been given or made when so delivered or
mailed. Notification of change shall be delivered to LENDER and
BORROWER within ten days of any change affecting this provision.
19. SURVIVAL OF REPRESENTATIONS, WARRANTIES, AND OBLIGATIONS. All
representations and warranties contained herein shall survive the
execution and delivery of this Agreement and of the Note, Security
Agreement and Financing Statements, and any investigation at any time
made by the Note, Security Agreement and Financing Statements. All
obligations of the BORROWER under this Loan Agreement, and under the
Note, and the Security Agreement, which have not been fully performed,
paid and satisfied at the time of closing of the Loan, shall survive
the closing.
20. CONSTRUCTION AND AMENDMENT. This Loan Agreement constitutes the entire
agreement between the parties pertaining to the subject matter hereof
and supersedes all prior and contemporaneous agreements and
understandings of the parties in connection therewith. This Agreement
may not be changed, amended or terminated orally but only by agreement
in writing and signed by the party against whom enforcement of any
change, amendment or termination is sought.
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21. PAYMENT. The BORROWER will pay to LENDER at its address specified in
Section 18, or at such other address as it may designate in writing,
all amounts payable with respect to the principal of, and interest on,
the Note held by the LENDER.
22. SUCCESSORS AND ASSIGNS. All covenants, agreements, representations and
warranties made herein or in certificates delivered in connection
herewith shall, whether so expressed or not, bind and inure to the
benefit of successors and assigns of the BORROWER and LENDER.
23. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
24. NO WAIVER: REMEDIES CUMULATIVE. No exercise, partial exercise, failure
or delay on the part of the LENDER in exercising any power or right
hereunder, or under the Note, or Security Agreement, shall operate as a
waiver of the power or right, except as specifically provide herein. No
remedy conferred herein or in the Note, or Security Agreement is
intended to be exclusive, to any other remedy, and each and every other
remedy given hereunder or now hereafter existing at law or in equity or
by statute or otherwise, may be sought by the enforcing party.
25. GOVERNING LAW. This Agreement and the Note, the Security Agreement and
the Financing Statements shall be governed by and interpreted in
accordance with the laws of the State of New Hampshire.
LENDER: belknap county economic development council
by: /s/ Eliza Leadbeater Date: 3/30/99
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Eliza Leadbeater, Executive Director
BORROWER: DM MANAGEMENT COMPANY
by: /s/ Peter J. Tulp Date: 3/30/99
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Peter J. Tulp, VP Fianance,
Corporate Controller
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SCHEDULE B
ATTACHMENT III
REQUIRED LOAN PROVISIONS
Belknap County ("Grantee") and Subrecipient Belknap County Economic
Develpment Corp. ("BCEDC") hereby warrant and agree that BCEDC, in its
loan agreement with DM Management, and in any future agreements conveying
or transferring interests in the DM facility, shall include the following
required minimum terms and conditions providing for the performance of
grant-related activities and commitments.
1. LOAN TERMS
1.1 The loan shall provide that BCEDC shall lend, and DM shall
borrow, $980,000 as part of financing package for the purchase of
equipment.
1.2 The loan payments shall be based on a three (3) year
amortization, with interest accruing at a rate not less than one half
of one percent below the interest established by bank financing,
currently existing and subsequently re-negotiated by DM. DM will notify
BCEDC and the NH office of State Planning ("OSP") of the terms of interest
of the company's renegotiated debt.
1.3 Loan payments shall be made in periodic intervals, to be
determined at loan closing, but must include principal and interest.
1.4 The loan shall be secured, at a mininum, by a second collateral
position on specific equipment, in an amount equal to the amount of the
loan extended to DM by BCEDC. Security will be evidenced by appropiate
UCC filings, enumerating the equipment secured.
1.5 DM shall enter into a Promissory Note wherein it agrees to pay to
BCEDC the principal and interest as provided above. It shall require DM
to pay on demand all reasonable costs of collection, including court
costs, service fees and attorneys fees, whether or not any foreclosure
or other action is instituted by the holder in its discretion; and late
charges in the event of any installment payment is not received within
the terms set by the BCEDC.
1.6 DM shall enter into a Security Agreement with BCEDC,
establishing the BCEDC's collateral position, as provided above.
2. EMPLOYMENT COMMITMENTS.
2.1 At the facility, DM will create at least one hundred
twenty-five (125) new full-time equivalent permanent jobs. At least
seventy-five (75) positions, or sixty percent (60%) said jobs created,
will be filled by low and moderate income persons. Said jobs will have
descriptions, entry level wages, and benefits as follows:
2.1.1 Jobs in the "Distribution center" will have entry
level wages of at least $7.25 per hour, with weekly incentive,
in the range of $25 to $65.
2.1.2 Jobs in the "Call center" will have entry level
wages of at least $6.25 per hour, with weekly incentive, of
up to $40 per week.
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2.1.3 Employee benefits include medical insurance paid at 75% of
total cost, three weeks combined company-paid vacation and sick leave, paid
disability and life insurance policies, and 401K and stock purchase plans.
2.2 To document DM's existing employees at the start of this Project,
DM shall provide certified payrolls documenting the number of full-time and
full-time equivalent employees and position titles in all of its U.S.
operations and facilities no earlier than May 19, 1998.
2.3 As documentation of and for purposes of monitoring Project
employment commitments, DM shall submit to BCEDC a list of all employees
hired to work at the Property, indicating positions, names, income and
minority or protected class status and date of hire. Documentation of
employees shall also be submitted which shall include copies of current
company payrolls listing job titles and names of employees; copies of family
income verifications signed by new employees; and designation of beneficiary
minority or protected class status of new employees. This documentation shall
be submitted as of the Grant Agreement Effective Date and periodically
thereafter as required by BCEDC.
2.4 For each new employee at time of hiring, DM shall verify and
document family income status and minority or protected class status in
accordance with the federal regulations set forth in Section 5 of the
Gerneral Provisions of the Grant Agreement.
2.5 In the event that DM fails to establish the minimum number of jobs
required to be filled with persons from Low and Moderate Income Families or
other employment commitment as provided in Section 2.1 herein, then DM shall
confer forthwith with BCEDC, the Grantee and OSP and develop a mutually
acceptable plan pursuat to which it will rectify any employment shortfalls
and maintain the required minimums. In such event, DM shall also provide
BCEDC with monthly updates containing information in a form reasonably
satisfactory to BCEDC in order for BCEDC to determine whether it is in
compliance with such plan and its employment obligations as provided herein,
said monthly reports to continue until the employment commitments are
achieved.
2.6 The continued failure of DM to achieve its employment commitments
as required herein for ninety (90) days following the date specified for such
requirment shall constitute an event of default under DM's loan, which shall
give rise to any of the remedies available to BCEDC as set forth therein.
2.7 The parties acknowledge that the obligation of DM to provide the
specified minimum number of jobs for Low and Moderate Income Persons is an
essential component of BCEDC's willingness to make a loan in the Project
Property to DM upon the terms and conditions set forth in such loan
conveyance, or other transfer document. DM agrees that it shall exercise good
faith at all in its hiring practices in order to achieve its job commitments.
2.8 In any loan, or other agreement entered into between BCEDC and DM,
BCEDC shall include, as an event of default, the failure to meet the
employment commitments and reporting requirements as provided herein. Upon
breach of the employment commitments or reporting requirements giving rise to
an event of default BCEDC shall undertake efforts to result in a cure of the
default or shall, where applicable, terminate the loan or other agreement and
seek damages or other relief as appropriate.
3. GENERAL INDEMNIFICATION.
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3.1. DM shall indemnify, defend and hold harmless BCEDC, Grantee and OSP
against and from any and all claims, judgments, damages, penalties,
fines, assessments, costs and expenses, liabilities and losses (including
without limitation damages for the loss or restriction on the use of the
facility, sums paid in settlement of claims, attorneys' fees,
consultants' fees and experts' fees) resulting or arising during the term
of the loan:
(1) from any condition of the facility, including any building
structure or improvement thereon;
(2) from any breach or default on the part of DM in the performance
of any mortgage lien or agreement to be performed pursuant to the
terms of the loan, or from any act or omission of DM or any of its
agents, contractors, servants, employees, subloans, licensees or
invitees; or
(3) from any accident, injury or damage whatsoever caused to any
person occurring during the term of the loan, in the facility or
areas adjacent thereto.
4. ENVIRONMENTAL PROTECTION.
4.1 DM shall comply with all material provisions of federal, state and
local laws, regulations, and standards relating to protection or
preservation of the environment that are or may become applicable to its
activities at the facility.
4.2 DM, and any sublessee or assignee of DM, shall be solely
responsible for obtaining at their cost and expense any environmental
permits required for their operations.
4.3 DM shall indemnify, defend and hold harmless BCEDC, Grantee and OSP
against and from all claims, judgments, damages, penalties, fines, costs
and expenses, liabilities and losses (including, without limitation,
diminution in value of the premises, damages for the loss or
restriction on the use of the premises, and sums paid in settlement of
claims, attorney's fees, consultant's fees and experts' fees) resulting
or arising from discharges, emissions, spills, reloans, storage, or
disposal of any hazardous substances or any other action by DM or any
sublessee or assignee of DM, giving rise to BCEDC or Grantee or State
liability, civil or criminal, or responsibility under federal, state or
local environmental laws.
This indemnification includes, without limitation, any and all claims,
judgments, damages, penalties, fines, costs and expenses, liabilities
and losses incurred by BCEDC, Grantee or the State in connection with
any investigation or site conditions, or any remedial or removal action
or other site restoration work required by any federal, state or local
governmental unit or other person for or pertaining to any discharges,
emissions, spills, reloans, storage or disposal of hazardous substances
arising or resulting from any act or omission of BCEDC at the facility.
The provisions of this Section shall survive the expiration or
termination of the loan or other agreements.
5. THE BUSINESS REPRESENTATIONS AND WARRANTIES.
DM shall represent and warrant:
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5.1 It has obtained or will obtain all necessary approvals of the plans and
all necessary permits for the operation of its business in Tilton from all
governmental authorities having jurisdiction over the Project;
5.2 Construction of any Improvements for the Project will not violate any
zoning, environmental, subdivision, or land use ordinance, regulation or law;
the Facility conforms and complies in all material respects with covenants,
conditions, restrictions, reservations and zoning, environmental land use, and
other applicable ordinances, laws, rules and regulations, federal, state or
local, affecting the Facility;
5.3 No litigation, claims, suits, orders, investigations or proceedings are
pending or threatened against DM or affecting the Facility or the Project at
law or in equity or before or by any federal, state, municipal or other
governmental instrumentality; there are no arbitration proceedings pending
under collective bargaining agreements or otherwise; and to the knowledge of
DM there is no basis for any of the foregoing;
5.4 DM has filed all federal, state and local tax returns required to be
filed and has paid or made adequate provision for the payment of all federal,
state and local taxes, charges and assessments;
5.5 DM is a duly organized and validly existing Corporation registered in
New Hampshire and in good standing under the laws of this state. DM has the
power and authority to own its properties and to carry on DM as now being
conducted and has the power to execute and deliver, and perform its
obligations under the Loan Documents;
5.6 The execution and delivery and performance of DM of its obligations
under the Loan Documents have been duly authorized by all requisite corporate
action and will not violate any provision of law, any order of any court or
other agency of government, or any indenture, agreement or other instrument
to which DM is a party, or by which it is bound, or be in conflict with
result in a breach of, or constitute a default under, or, except as may be
provided therein, result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon any of the property or assets of
DM pursuant to any such indenture, agreement or instrument. DM is not
required to obtain any consent, approval or authorization form, or to file
any declaration of statement with, any governmental instrumentality or other
agency in connection with or as a condition to the execution, delivery or
performance of the Loan Documents;
5.7 DM is not contemplating either the filing of a petition under any state
or federal bankruptcy or insolvency laws or the liquidating of all or a major
portion of its property, and has no knowledge of any person contemplating the
filing of any such petition against it.
5.8 No statement of fact made by or on behalf of DM in any of the Loan
Documents or in any certificate, exhibit or schedule furnished to BCEDC
pursuant thereto, contains any untrue statement of a material fact or omits
to state any material fact necessary to make statements contained therein or
herein not misleading. There is no fact or circumstance presently known to DM
that has not been disclosed to BCEDC that when made materially affects
adversely, nor as far as DM can foresee, will materially affect adversely DM,
operations or considerations (financial or otherwise) of DM.
5.9 DM has complied in all material respects with all applicable statutes,
regulations and rules of federal, state and local governments in respect to
the conduct of its business and operations, including without limitation all
applicable environmental statutes, regulations and rules and all
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statutes, regulations and rules and all statutes, regulations and rules
pertaining to the manufacturing of its products.
5.10 No Event of Default has occurred and is continuing under the Loan
Documents and no event or condition which would, upon notice of
expiration of any applicable cure, constitute an Event of Default has
occurred and is continuing; DM is not in default under any note or other
evidence of indebtedness or other obligations for borrowed money or any
mortgage, deed to trust, indenture, loan agreement or other agreement
relating thereto.
5.11 All representations, warranties and obligations of DM as provided
in any loan documents to include the employment commitments shall be
applicable to its successors and assigns.
Each of the foregoing representations and warranties is true and correct
as of the date of the loan Documents and DM shall indemnify and hold
harmless Grantee and OSP from and against any loss, damage, or liability
attributable to the breach thereof, including any and all fees and
expenses incurred in the defense or settlement of any claim arising
therefrom against Grantee or OSP.
6. ADDITIONAL EVENTS OF DEFAULT.
The occurrence of any one or more of the following events shall
constitute an additional Event of Default under the Loan Documents:
6.1 DM's failure to comply with the employment reporting requirements
as specified herein;
6.2 DM's failure to meet the employment commitments as specified herein;
6.3 Any attempt by DM to assign its rights under the Loan Documents or
any advance made or to be made hereunder or any interest therein, or if
the Secured Property is conveyed or encumbered in any way without the
prior written consent of Grantee and OSP;
6.4 The facility is materially damaged or destroyed by fire or other
casualty or cause and the insurance proceeds therefrom are inadequate to
rebuild or restore the facility to its condition immediately prior to
such casualty;
6.5 Any representation or warranty made herein or in any report,
certification, or other instrument furnished in connection with the Loan
Documents or any advances of Grant funds made hereunder, by or in behalf
of DM shall prove to be false or misleading in any material respect when
made;
6.6 Any mechanics', laborers', materialmen's or similar statutory lien,
or any notice thereof, shall be filed against DM and shall not be
discharged within thirty (30) days of such filing;
6.7 DM shall (i) apply for or consent to the appointment of a receiver,
trustee or liquidator of it or any of its property, (ii) admit in
writing its inability to pay its debts as they mature, (iii) make a
general assignment for the benefit of creditors, (iv) be adjudicated as
bankrupt or insolvent or (v) file a voluntary petition in bankruptcy, or
a petition or answer seeking reorganization or an arrangement with
creditors or to take advantage of any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or
liquidation law or statute, or an answer admitting the material
allegations of a petition filed against it in any proceeding under any
such law;
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6.8 A petition, order, judgement or decree shall be entered, without the
application, approval or consent of DM by any court of competent
jurisdiction, approving a petition seeking reorganization or approving
the appointment of a receiver, trustee or liquidator of DM of all or a
substantial part of its assets, and such order, judgment or decree shall
continue unstayed and in effect for any period of thirty (30) days;
6.9 The dissolution, termination of existence, merger or consolidation
of DM or a sale of all or substantially all assets of DM out of the
ordinary course of business without the prior written consent of BCEDC;
and
6.10 Failure to remedy an ineligible expenditure of grant funds or to
reimburse BCEDC, Grantee or OSP for any ineligible costs which are paid
from Grant funds.