EXOLON-ESK COMPANY
AND
THE CHASE MANHATTAN BANK
BUILDING LOAN AGREEMENT
Dated: As of December 1, 1996
Location: ▇▇ ▇▇. ▇
▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
RECORD AND RETURN TO:
Phillips, Lytle, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
BUILDING LOAN AGREEMENT
TABLE OF CONTENTS
Page
1. Definition ....................... 2
2. Bond Proceeds ..................... 2
3. The Improvements .................... 2
4. Change Orders ..................... 4
5. Commencement of Construction .............. 4
6. Completion of Improvements ............... 4
7. Force Majeure ..................... 5
8. Title Insurance and Survey ............... 5
9. Hazard Insurance .................... 7
10. Advances ........................ 7
11. Advances for Stored Materials ............. 9
12. Additional Conditions to Advances ........... 9
13. Contingency Reserve .................. 13
14. Deficiency ....................... 13
15. Specific Additional Covenants of Borrower ....... 14
16. Events of Default ................... 16
17. Other Remedies ..................... 17
18. Incorporation of Provisions .............. 18
19. Further Assurances ................... 18
20. Representations and Warranties ............. 18
21. Construction of Agreement ............... 19
22. Trust Fund ....................... 19
23. Parties Bound, etc. .................. 19
24. Waivers ........................ 19
25. Governing Law ..................... 19
26. Severability ...................... 19
27. Notices ........................ 19
28. Fees and Expenses ................... 20
29. Sign .......................... 20
30. Modification ...................... 21
31. Termination of Advances ................ 21
EXHIBIT A
EXHIBIT B
EXHIBIT C
EXHIBIT D
EXHIBIT E
SCHEDULE A
SCHEDULE B
BUILDING LOAN AGREEMENT
THIS BUILDING LOAN AGREEMENT made as of the 1st day of
December, 1996, between THE CHASE MANHATTAN BANK, a New York
banking corporation having an office at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (hereinafter referred to as the
"Bank"), and Exolon-ESK Company, a Delaware corporation having an
office at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(hereinafter referred to as the "Borrower");
W I T N E S S E T H:
WHEREAS the Borrower is the owner of a fee estate in certain
premises, as more particularly described in Exhibit A
(hereinafter referred to as the "Premises");
WHEREAS, pursuant to the Constitution and the laws of the
State of Illinois (the "State"), and particularly 70 Illinois
Compiled Statutes 1994, 530/1 et seq., as supplemented and
amended (collectively, the "Act"), the Upper Illinois River
Valley Development Authority (the "Issuer") is authorized to
issue its revenue bonds to finance the cost of "projects," as
defined in the Act; and
WHEREAS, pursuant to and in accordance with the Act, the
Issuer has agreed to issue and sell its Variable Rate Demand
Solid Waste Disposal Revenue Bonds, Series 1996-A (Exolon-ESK
Company Project) in the aggregate principal amount of $8,405,000
(the "Series 1996-A Bonds") and its Taxable Variable Rate Demand
Solid Waste Disposal Revenue Bonds, Series 1996-B (Exolon-ESK
Company Project) in the aggregate principal amount of $4,595,000
(the "Series 1996-B Bonds"), which Series 1996-A Bonds and Series
1996-B Bonds (collectively, the "Bonds") will be issued under the
terms of an Indenture of Trust (the "Indenture") dated as of
December 1, 1996, from the Issuer to American National Bank and
Trust Company of Chicago, as trustee (the "Trustee"), and to lend
the proceeds of the Bonds to the Borrower to finance a portion of
the costs of the acquisition of certain real estate, the
construction of a building and related improvements and the
acquisition of machinery, equipment and related property to be
installed therein (the "Project"), all to be used for the
disposal of certain solid wastes, to be owned and operated by the
Borrower and all to be located in the Village of Hennepin,
Illinois, which Project shall constitute a "project," within the
meaning of the Act; and
WHEREAS, the Bonds issued under the Indenture will be
secured by (i) an assignment and pledge of all right, title and
interest of the Issuer in and to a Loan Agreement between the
Borrower and the Issuer dated as of December 1, 1996 (the "Loan
Agreement") and the promissory note of the Borrower issued
pursuant to the Loan Agreement (the "Note"), except as otherwise
provided in the Indenture, and (ii) moneys derived from drawings
under the irrevocable, transferable letter of credit dated the
date of issuance and delivery of the Bonds, issued by the Bank in
favor of the Trustee for the benefit of the owners from time to
time of the Bonds, in the amount of (A) the aggregate principal
amount of the Bonds (1) to enable the Trustee to pay the
principal of the Bonds at maturity, upon call for redemption
prior to maturity or acceleration, and (2) to enable the Trustee
to pay the portion of the purchase price of Bonds to be tendered
or deemed to be tendered to it for purchase, equal to the
aggregate principal amount of such Bonds, plus (B) an amount
equal to the interest to accrue on the Bonds for thirty-five (35)
days at the maximum rate of twelve percent (12%) per annum (1) to
enable the Trustee to pay interest accrued on the Bonds on the
dates and in the manner set forth in the Indenture, and (2) to
enable the Trustee to pay the portion of the purchase price of
Bonds tendered or deemed to be tendered to it for purchase equal
to the accrued interest on such Bonds (which initial letter of
credit, together with any substitute letter of credit, is
hereinafter referred to as the "Letter of Credit").
WHEREAS, the Borrower is obligated to reimburse the Bank for
all amounts drawn on the Letter of Credit pursuant to the terms
of a Letter of Credit Reimbursement Agreement between the
Borrower and the Bank dated as of December 1, 1996 (the
"Reimbursement Agreement").
The Bank requires, as a condition and as an inducement for
it to issue the Letter of Credit, that the Borrower execute and
deliver this Agreement to the Bank.
1. Definition. All terms as used in this Agreement shall,
unless otherwise defined in the main body of this Agreement, have
the meaning given to such terms in Exhibit B or in the Loan
Agreement.
2. Bond Proceeds. Subject to the terms and conditions
hereof, and in consideration of the premises herein, including
expressly, but not limited to the promise of the Borrower to
construct the Improvements, the Borrower agrees that all proceeds
of the Bonds shall be disbursed in accordance herewith.
3. The Improvements. The Borrower has submitted to the
Bank and the Construction Consultant a set of final plans and
specifications for the Improvements prepared by the Construction
Manager, as more particularly described in Exhibit C attached
hereto, which shall include the construction of an additional
well and septic system, (hereinafter referred to as the "Plans
and Specifications"), which Plans and Specifications have been
reviewed and accepted by the Bank and the Construction
Consultant. The Borrower acknowledges that (i) the Construction
Consultant has been retained by the Bank to act as a consultant
and only as a consultant to the Bank in connection with the
construction of the Improvements, (ii) the Construction
Consultant shall in no event or under any circumstance have any
power or authority to make any decision or to give any approval
or consent or to do any other act or thing which is binding upon
the Bank and any such purported decision, approval, consent, act
or thing by the Construction Consultant on behalf of the Bank
shall be void and of no force or effect, (iii) the Bank reserves
the right to make any and all decisions required to be made by
the Bank under this Agreement and to give or refrain from giving
any and all consents or approvals required to be given by the
Bank under this Agreement and to accept or not accept any matter
or thing required to be accepted by the Bank under this
Agreement, in each instance in its sole and absolute discretion,
and without in any instance being bound or limited in any manner
or under any circumstance whatsoever by any opinion expressed or
not expressed, or advice given or not given, or information,
certificate or report provided or not provided, by the
Construction Consultant to the Bank or any other person or party
with respect thereto, (iv) the Bank reserves the right in its
sole and absolute discretion to disregard or disagree, in whole
or in part, with any opinion expressed, advice given or
information, certificate or report furnished or provided by the
Construction Consultant to the Bank or any other person or party,
(v) the Bank reserves the right in its sole and absolute
discretion to replace the Construction Consultant with another
construction consultant selected by the Bank and approved by the
Borrower at any time and (vi) Borrower shall not in any event
rely upon any purported decision, approval, consent, act or thing
by the Construction Consultant. The Borrower represents and
warrants to the Bank that the Plans and Specifications are
complete in all material respects and have been submitted to the
Construction Manager, and the Construction Manager has agreed to
perform its obligations under the General Construction Contract
in a manner consistent with the requirements of the Plans and
Specifications. The Borrower represents and warrants to the Bank
that (i) to the extent required by law on the basis of the
present stage of development and construction of the
Improvements, the Borrower has obtained from the appropriate
Governmental Authorities all required approvals (including,
without limitation, all environmental approvals) with respect to
the Plans and Specifications and the Improvements, and (ii) all
necessary permits, certificates, licenses and other approvals
required for the construction of the Improvements have to the
extent required by applicable law been issued or obtained from
the appropriate Governmental Authorities and (iii) all necessary
permits, certificates, licenses, and other approvals required for
construction of the Improvements shall be unconditional, valid,
final, and shall fully authorize Borrower to commence and
complete the Project as set forth in the Plans and
Specifications. Subject to the provisions of paragraph 4 of this
Agreement, each addition or modification to the Plans and
Specifications or to the Construction Contract must be acceptable
to the Bank, the Construction Consultant and, to the extent
required by law, shall be approved and permitted by the
appropriate Governmental Authorities. The Borrower shall not
commence any work on any stage or phase of the Improvements
unless all required permits, certificates, licenses and approvals
therefor have been issued or obtained from appropriate
Governmental Authorities. The Borrower shall construct and equip
the Improvements in accordance with the Plans and Specifications
free and clear of all mechanics' liens, notices of intention to
file mechanic's lien, notices of pendency, stop orders or
comparable liens or filings and all other liens, encumbrances and
security instruments of any nature whatsoever (other than the
Mortgage and other exceptions to title specifically set forth in
the policy of title insurance insuring the lien of the Mortgage
or as may otherwise be specifically approved by the Bank). The
Bank shall without additional cost or expense have the use of the
Plans and Specifications as accepted by the Bank and the
Construction Consultant upon the occurrence beyond any applicable
grace and cure period of a default under the Documents. The
Improvements shall be constructed and equipped in compliance with
the requirements of the Governmental Authorities and the
appropriate Board of Fire Underwriters, if any, or other similar
body, if any, acting in and for the locality in which the
Premises are situated. Compliance with the provisions of this
paragraph and any other provisions of this Agreement relating to
the construction and equipping of the Improvements shall be
determined by the Bank in its sole and absolute discretion. At
all times and without notice, the Bank, the Construction
Consultant and their respective agents and employees, shall have
the right of entry and free access to the Premises to inspect the
Improvements, and to any off-site location to inspect any off-
site stored materials for which Bank is permitting money to be
advanced hereunder.
4. Change Orders. Notwithstanding anything to the
contrary contained in this Agreement, the Borrower shall have the
right to enter into or to authorize the entering into of change
orders with respect to the Improvements without obtaining the
Bank's or the Construction Consultant's prior acceptance,
provided that (i) no such change order will materially change the
gross square feet or the net usable square feet space to be
contained in the Improvements, or the basic layout of the
Improvements, or the number of parking spaces to be located on
the Premises after completion of construction of the
Improvements, or involve the use of materials, furniture,
fixtures or equipment which will not be at least equal in quality
to the materials, furniture, fixtures and equipment originally
specified in or required by the Plans and Specifications, as
accepted by the Bank and the Construction Consultant, (ii) no
such change order shall, in a single instance, result in an
increase or decrease in the cost of constructing the Improvements
of more than $100,000, and (iii) the aggregate cost of all such
change orders which have not been accepted by the Bank and the
Construction Consultant shall not, at any given time, result in
an increase or decrease in the cost of constructing the
Improvements of more than $250,000, it being agreed that such
aggregate $250,000 maximum increase or decrease in the cost of
constructing the Improvements as a result of such change orders
shall not include the cost of any change order entered into
without the prior acceptance of the Bank and the Construction
Consultant pursuant to this paragraph with respect to which the
acceptance of the Bank and the Construction Consultant shall have
been subsequently obtained. The Borrower shall also have the
right, without obtaining the Bank's or the Construction
Consultant's prior acceptance, to enter into change orders or
field changes which do not increase or decrease the cost of
constructing the Improvements, provided that the requirements of
clause (i) of the preceding sentence are satisfied with respect
thereto. The Borrower shall submit to the Bank and the
Construction Consultant copies of all change orders entered into
with respect to the Improvements within ten (10) days after the
same are entered into and irrespective of whether the same
require the prior acceptance of the Bank and the Construction
Consultant pursuant to this Agreement.
5. Commencement of Construction. The Borrower shall have
commenced construction of the Improvements on or before the
Commencement Date and shall continue with such construction until
the Improvements are completed in accordance with the Plans and
Specifications and the provisions of this Agreement.
6. Completion of Improvements. Subject to the provisions
of paragraph 7 of this Agreement, construction of the
Improvements shall be completed substantially in accordance with
the Plans and Specifications and the provisions of this Agreement
on or before the Completion Date. For the purposes of this
Agreement, the Improvements shall not be deemed to have been
completed until (i) the Improvements have, in the opinion of the
Bank and the Construction Consultant, been completed
substantially in accordance with the Plans and Specifications,
(ii) the Improvements shall contain all furniture, fixtures and
equipment required for the use and operation of the Improvements
or which may be required by any Governmental Authority or by any
law, regulation or rule of any Governmental Authority, (iii) all
permanent certificates of occupancy (or their local equivalent)
and all other certificates, licenses, consents and approvals
required for the use and operation of the Improvements shall have
been issued by or obtained from the appropriate Governmental
Authorities, (iv) all Direct Construction Costs, Other Project
Costs, and other costs and expenses incurred in connection with
the construction and equipping of the Improvements, shall have
been paid in full.
7. Force Majeure. The Completion Date shall be extended
for a period of time equal to the number of days during which the
Borrower is prevented from proceeding with the construction of
the Improvements by reason of force majeure, provided that (i) no
default shall have occurred and shall be continuing under the
Loan Documents, (ii) the aggregate of any such respective
extensions of the Completion Date pursuant to the provisions of
this paragraph shall in no event be for a period of time in
excess of sixty (60) days, and (iii) the Borrower notifies the
Bank of the events constituting such force majeure within 15 days
after the Borrower has knowledge of their occurrence. No
extension of the Completion Date pursuant to this paragraph shall
be construed as extending the maturity date of the Note. If the
Completion Date is extended by reason of force majeure pursuant
to the provisions of this paragraph and if subsequent to such
extension the Borrower makes up all or any portion of such force
majeure delay, such extension of the Completion Date shall be
reduced by the number of days the Borrower is able to make up
after the occurrence of such force majeure delay. The term
"force majeure" as used in this paragraph shall include acts of
God, flooding, strikes, lockouts or other labor trouble,
materially adverse weather conditions, fire or other casualty,
governmental preemption in connection with a national emergency,
any rule, order or regulation of any governmental agency or any
department or subdivision thereof, or inability to secure
materials or labor because of any such emergency, rule, order,
regulation, war, civil disturbance or other emergency, cause or
event beyond the reasonable control of the Borrower.
8. Title Insurance and Survey. The Bank's obligation to
make the initial advance or any subsequent advance of Bond
Proceeds is conditioned on the Bank's receipt of the following,
all in form and substance satisfactory to Lender:
(a) a commitment for a title insurance policy in the
amount of the Debt covering all of the real property and
fixtures that are part of the Premises and Improvements.
The commitment shall be issued by Chicago Title Insurance
Company and shall be for an ALTA form of mortgage loan
policy to be issued without standard exceptions or
reservation for creditor's rights and assuring that, upon
satisfaction of the requirements listed herein, the Bank
will hold a valid first priority mortgage lien on real
property and fixtures conforming to the requirements of the
commitment. The commitment shall include a pending
disbursements clause satisfactory to the Bank and indicating
that coverage under the policy will cover the initial
disbursement of the Bank, and will be increased in amount
and updated by appropriate endorsement prior to each
construction advance. The title commitment must be
accompanied by complete copies of all documents referred to
therein as exceptions to or encumbrances on title. The Bank
reserves the right to require such additional endorsements
to the commitment as it may deem appropriate, including, but
not limited to, a zoning 3.1 endorsement, including parking
(or a zoning 3.0 endorsement with a commitment to issue a
zoning 3.1 endorsement, including parking), tax parcel,
comprehensive endorsement, endorsement over encroachments
(if any that are otherwise acceptable to the Bank),
mechanics' lien endorsement, access endorsement, interim
endorsement, usury endorsement, variable rate endorsement
and survey/location endorsement. A mortgage loan title
insurance policy pursuant to the approved loan commitment
shall be issued concurrently with the initial advance of
Bond Proceeds. No actual physical improvement to the
Development shall be permitted to occur until such time as
the Mortgage has been recorded with the Recorder of Deeds
for the County where the Premises is located;
(b) a current certified Class "A" ALTA Land Title
Survey by a registered engineer acceptable to the Bank with
such certification being addressed to the Bank and to the
Title Company. The survey shall show the Premises and any
matters affecting the same, including the location and area
covered by all building set-back lines, the location and
area of all easements encumbering and/or benefitting the
Premises, the relation of the Premises to public
thoroughfares and access thereto, the location of all
physical conditions (including existing structures or
foundations, utility lines, walks, drives, right-of-ways and
parking areas) on the Premises, the proposed location of the
Improvements (or the foundation thereof) and any
encroachments of the Improvements (or the foundation
thereof) or other physical conditions upon any easements,
building lines or property boundary lines. The survey shall
also state whether the Premises or any portion thereof is
located on a federally designated flood plain area or
wetland and shall also indicate the zoning classification of
the Premises. The survey must conform to and be prepared in
accordance with the Commitment and meet the "Minimum
Standard Detail Requirements for ALTA Land Title Surveys"
established and adopted by ALTA and the requirements of a
Class A Survey as defined therein. The legal description
set forth on the face of the approved survey will be used in
the Loan Documents.
The state of facts shown in the Preliminary Survey shall be
satisfactory in all respects to the Bank and its counsel, the
Construction Consultant and the Title Company. The Borrower
shall deliver to the Bank (i) a foundation survey of the
Improvements within thirty (30) days after the completion of the
foundation of the Improvements, (ii) an as-built survey of the
Improvements within thirty (30) days after the completion of
Improvements, and (iii) any additional surveys requested or
required by the Bank, the Construction Consultant or the Title
Company within thirty (30) days after request, it being agreed
that any change in the state of facts shown in any such updated
survey shall be satisfactory in all respects to the Bank, its
counsel, the Construction Consultant and the Title Company. The
Borrower shall also deliver to the Bank contemporaneously with
the delivery of each survey an affidavit from the surveyor that
set-backs are in conformity with current zoning restrictions.
9. Hazard Insurance. The Borrower shall furnish to the
Bank (with evidence of the payment of premiums therefor), or if
the Borrower shall fail to do so after the expiration of any
applicable notice and grace period, the Bank may obtain at the
Borrower's expense, insurance as required by the Mortgage. So
long as this Agreement shall be in force the policies of fire
insurance shall be in the so-called "All Risk Builders' Risk
Completed Value Non-Reporting Form," including collapse coverage
and, if warranted, evidence of flood, and earthquake coverage,
all as may be required by the Bank, and in amounts to be
determined by the Bank and construction Consultant, which amounts
shall in no event be less than 100% of the completed insurable
value of the Improvements and shall be sufficient to satisfy all
co-insurance requirements. Upon completion of construction of
the Improvements the insurance shall be converted to a standard
hazard insurance policy with extended coverage and otherwise
complying with the provisions of the Mortgage. If the Premises,
or any portion thereof, are located in a Federally designated
"special flood hazard area," a flood insurance policy shall be
delivered to the Bank. If no portion of the Premises is located
in a Federally designated "special flood hazard area" such fact
shall be substantiated by a certificate in form satisfactory to
the Bank from a licensed surveyor, appraiser or professional
engineer or other qualified person, party or entity.
10. Advances. Subject to compliance by the Borrower with
the terms, provisions and conditions of this Agreement and the
Loan Agreement, the Bank shall provide its written consent for
the Trustee to make advances of the Bond proceeds to the Borrower
subject to the Retainage, (i) for direct construction costs
incurred by the Borrower in connection with the construction of
the Improvements (hereinafter referred to as "Direct Construction
Costs"), as itemized in a trade breakdown schedule reviewed and
accepted by the Bank and the Construction Consultant (hereinafter
referred to as the "Trade Breakdown Schedule"), as the same may
be revised from time to time after the date hereof with the prior
review and acceptance of the Bank and the Construction
Consultant, and (ii) for costs, other than Direct Construction
Costs, incurred by the Borrower in connection with the Bonds or
the construction of the Improvements and permitted pursuant to
the Loan Agreement (hereinafter referred to as "Other Project
Costs"), as itemized in a schedule reviewed and accepted by the
Bank (hereinafter referred to as the "Schedule of Other Project
Costs"), as the same may be revised from time to time after the
date hereof with the prior review and acceptance of the Bank. If
there is a savings in a particular line item set forth in the
Trade Breakdown Schedule or in the Schedule of Other Project
Costs, and if such savings is substantiated by evidence
satisfactory to the Bank, the Borrower shall have the right, upon
prior approval of the Bank, to reallocate such savings to other
line items in the Trade Breakdown Schedule and the Schedule of
Other Project Costs with respect to which additional costs have
been incurred or to the Contingency Reserve (as hereinafter
defined), provided, however, that the Borrower shall in no event
or under any circumstance have the right to reallocate any
portion of the Contingency Reserve (as hereinafter defined)
without in each instance obtaining the prior approval of the
Bank, which approval may be withheld in the sole and absolute
discretion of the Bank, or to cause a reallocation to occur which
in the opinion of the Bank, its counsel or the Title Company will
adversely affect or impair in any manner whatsoever the lien or
priority of lien of the Mortgage. Except as hereinafter
specifically provided to the contrary in paragraph 11 of this
Agreement, the Bank shall not be required to consent to any
advances of the Bond proceeds for costs incurred by the Borrower
with respect to materials stored on or off the Premises unless
the Bank shall, in its sole discretion, deem it advisable to do
so. The Bank shall not be obligated to consent to advances of
Bond proceeds more frequently than once every thirty (30) days.
Each request by the Borrower to the Bank to consent to the
advance of Bond proceeds shall be in the form attached as
Exhibit D to the Loan Agreement, or in such other form as may be
satisfactory in all respects to the Bank and shall in each case
be signed by a duly authorized representative of the Borrower
(any such request being hereinafter referred to as a "Request for
Advance"). Each Request for Advance shall be delivered to the
Bank not less than ten (10) business days prior to the date upon
which an advance of Bond proceeds is requested. Each Request for
Advance shall be based upon the Trade Breakdown Schedule and the
Schedule of Other Project Costs and shall be accompanied by (i) a
currently dated sworn statement and request for partial payment
from the Construction Manager in the form specified in Exhibit D
or in such other form as may be acceptable to the Bank and the
Title Company, as approved by the Construction Manager, and
accompanied by a waiver of lien from the Construction Manager in
form satisfactory to the Bank and the Title Company, (ii) such
waivers of lien and other documents and instruments as may be
requested or required by the Bank with respect to subcontractors
and materialmen engaged in the construction of the Improvements
or as may be requested or required by the Title Company (to
induce the Title Company to insure each advance of the Bond
proceeds pursuant to this Agreement and the Loan Agreement
against all mechanics' and materialmen's liens for labor
furnished and materials supplied in connection with the
construction of the Improvements), (iii) at the request of the
Bank, the requisitions for payment from subcontractors and
materialmen engaged in the construction of the Improvements, and
(iv) such other information and documents as may be requested or
required by the Bank or the Construction Consultant. All
requests and requisitions for payment shall be approved by the
Borrower and the Construction Manager and recommended for payment
by the Construction Consultant. Each advance of the Bond
proceeds may be made through the Title Company acting as escrowee
pursuant to a Construction Escrow Agreement. The Bank shall not
be obligated to consent to any request for an advance of Bond
proceeds by the Trustee in excess of the amount, from time to
time, of Verified Project Costs, unless the Bank, in its sole and
absolute discretion, deems it advisable to do so. The Bank shall
not be obligated to authorize the Trustee to make an advance of
the Bond proceeds unless the Bank is satisfied, in its sole and
absolute discretion, that the conditions precedent to the making
of such advance as set forth in this Agreement and the Loan
Agreement, have been satisfied by the Borrower. Anything in this
Agreement or any other agreement made with respect to the Bonds
to the contrary notwithstanding, any advance of the Bond proceeds
or approval or acceptance given by the Bank or the Construction
Consultant, herein or therein, whether or not before or after a
site observation of the Improvements by the Construction
Consultant or otherwise, shall not be deemed to be an approval or
acceptance by the Bank or the Construction Consultant of any work
performed thereon or approval or acceptance by the Bank or the
Construction Consultant of any work or materials done or
furnished with respect thereto or a representation by the Bank or
the Construction Consultant as to fitness of such work and
materials.
11. Advances for Stored Materials. Notwithstanding
anything to the contrary contained in this Agreement and subject
to the terms of the Loan Agreement, the Bank may consent to
disbursements of the Bond proceeds to pay for Direct Construction
Costs actually incurred by the Borrower for stored materials
which are required in connection with the construction of the
Improvements, provided that (i) such materials are in accordance
with the Plans and Specifications approved by the Bank and the
Construction Consultant, (ii) such materials are securely stored,
properly inventoried, and clearly stenciled or otherwise marked
to indicate that they are the property of the Borrower,
(iii) such materials if they are stored off-site, are stored in a
bonded warehouse or with a contractor, materialman or fabricator
who bears the risk of loss until delivery and installation of
such materials in the construction of the Improvements as part of
the work in place, and who has supplied a bond securing such
contractor's, materialman's or fabricator's obligation to so
deliver and install such materials, which bond shall be issued by
a company, shall be in an amount and shall be in form and
substance satisfactory to the Bank and shall name the Bank as a
dual obligee, (iv) the bills of sale and contracts under which
such materials are being provided shall be in form and substance
satisfactory to the Bank and the Construction Consultant,
(v) such materials are insured against casualty, loss and theft
in a manner satisfactory to the Bank, (vi) the Borrower owns such
materials free and clear of all liens and encumbrances of any
nature whatsoever and establishes such ownership by evidence
satisfactory to the Bank, (vii) the Borrower executes and
delivers to the Bank such additional security documents as the
Bank shall deem necessary to create and perfect a first lien in
such materials as additional security for the payment of the
Debt, (viii) the aggregate amount of such disbursements for such
materials shall in no event at any time exceed the actual Direct
Construction Costs incurred by the Borrower for such materials as
verified by the Construction Consultant pursuant to the
provisions of this Agreement, (ix) the materials which are stored
off-site shall be limited to the materials listed on Exhibit E
hereto. The Bank shall in no event or under any circumstance
have any obligation to authorize the Trustee to make any advance
of the Bond proceeds for materials which are stored off-site
unless the Bank shall agree to the contrary in its sole and
absolute discretion.
12. Additional Conditions to Advances. The obligation of
the Bank to consent to advances of the Bond proceeds pursuant to
this Agreement is subject to the following additional conditions
precedent:
(a) The Borrower shall invest an amount equal to $0
(hereinafter referred to as the "Initial Equity
Requirement") in the Property in a manner satisfactory to
the Bank prior to any advance of Bond proceeds for Direct
Construction Costs, Other Project Costs or for any other
reason whatsoever. The investment of the Initial Equity
Requirement by the Borrower in the Property shall be
substantiated by evidence satisfactory to the Bank. The
entire Initial Equity Requirement shall remain invested in
the Property until such time as the Bonds, together with all
interest thereon and other sums due with respect thereto,
have been paid in full.
(b) Each Request for Advance shall be accompanied by a
certificate or report of the Construction Consultant to the
Bank in which the Construction Consultant shall in substance
(i) verify that the portion of the Improvements completed as
of the date of such site observation has been completed
substantially in accordance with the Plans and
Specifications, and (ii) state its estimate of (aa) the
percentage of construction of the Improvements completed as
of the date of such site observation on the basis of work in
place as part of the Improvements and the Trade Breakdown
Schedule, (bb) Direct Construction Costs actually incurred
for work in place as part of the Improvements as of the date
of such site observation, (cc) the sum necessary to complete
construction of the Improvements in accordance with the
Plans and Specifications, and (dd) the amount of time from
the date of such inspection which will be required to
complete construction of the Improvements in accordance with
the Plans and Specifications.
(c) Prior to each advance of the Bond proceeds, the
Title Company shall have issued (i) a written continuation
of title showing title to the Property to be vested in the
Borrower and no exceptions to the title of the Property
other than those exceptions previously approved by the Bank
in writing, and (ii) a written commitment to insure the
priority of the lien of the Mortgage, subject only to
exceptions previously approved by the Bank in writing, for
an amount equal to the full amount of each advance of the
Bonds. The title policy insuring the lien of mortgage shall
contain all endorsements required by the Bank. If required
by the Bank, such continuations of title shall contain
affirmative insurance that covenants and restrictions, if
any, reported against the Property have not been violated by
the Improvements.
(d) Prior to each advance of the Bond proceeds to the
Borrower pursuant to this Agreement, the Borrower shall,
upon request of the Bank, furnish the Bank with evidence
satisfactory to the Bank, showing payment of all bills and
charges for which advances of the Bond proceeds have been
previously made pursuant to this Agreement. The Borrower
shall also deliver to the Bank, upon request, such bills,
receipts, invoices and other evidence as may reasonably be
required by the Bank to substantiate the actual incurrence
by the Borrower of Direct Construction Costs and Other
Project Costs.
(e) The Borrower shall, if required by the Bank,
deliver to the Bank a written statement executed by the
Construction Manager certifying that the Construction
Manager has received payment in full of all monies owed to
the Construction Manager.
(f) The Borrower shall, if required by the Bank,
deliver to the Bank a written statement executed by each
subcontractor and materialman engaged in the construction of
the Improvements on behalf of the Construction Manager or
the Borrower certifying that each such subcontractor and
materialman has received payment in full of all monies owed
to each such subcontractor and materialman by the
Construction Manager or by the Borrower.
(g) Construction of the Improvements shall comply with
all applicable laws, rules, restrictions, orders and
regulations of the Governmental Authorities.
(h) The Borrower shall have delivered to the Bank all
necessary certificates, authorizations, permits and licenses
which are required to permit the construction and completion
of the Improvements, as issued by the appropriate
Governmental Authorities. The Borrower, to the full extent
permitted by applicable law, hereby assigns to the Bank as
additional security for the payment of the Debt and the
observance and performance by the Borrower of the terms,
covenants and provisions of the Bond Documents all right,
title and interest which the Borrower may now have or may
hereafter acquire in and to such certificates,
authorization, permits and licenses.
(i) The Borrower shall make available to the
Construction Consultant, upon request, all shop and related
drawings used in connection with the Plans and
Specifications and the construction of the Improvements at
the office and location where the same are kept.
(j) The Bank and the Construction Consultant shall be
of the opinion that the Improvements can be completed by the
Completion Date, as the same may be extended pursuant to
paragraph 7 of this Agreement.
(k) If the Advance includes funds for the purchase of
equipment, the Borrower shall have delivered UCC financing
statements or assignment statements in form satisfactory to
the Bank, perfecting the Bank's security interest in such
equipment, wherever located.
(l) The Borrower shall have delivered to the Bank and
the Construction Consultant a copy of the General
Construction Contract, which General Construction Contract
shall be either a guaranteed maximum price contract or a
fixed price contract and shall otherwise be in form and
substance satisfactory in all respects to the Bank, together
with evidence satisfactory to the Bank that the Construction
Manager maintains professional liability insurance in an
amount not less than $500,000. The Borrower hereby assigns
to the Bank as additional security for the payment of the
Debt and the observance and performance by the Borrower of
the terms, covenants and provisions of the Bond Documents to
which the Borrower is a party all right, title and interest
which the Borrower may now have or may hereafter acquire in
and to the General Construction Contract. Except as may
otherwise be permitted by paragraph 4 of this Agreement, the
Borrower shall not agree to any modification or to any
termination of the General Construction Contract without the
prior approval of the Bank. The Borrower shall furnish the
Bank with such information regarding the Construction
Manager as the Bank may request and the identity of the
Construction Manager shall be subject to approval by the
Bank.
(m) The Borrower shall (to the extent required by the
Bank) have delivered to the Bank and the Construction
Consultant copies of all the Major Subcontracts now or
hereafter entered into, each of which Major Subcontracts
shall be in form and substance satisfactory in all respects
to the Bank. The Borrower hereby assigns to the Bank as
additional security for the payment of the Debt and the
observance and performance by the Borrower of the terms,
covenants and provisions of the Loan Documents all right,
title and interest which the Borrower may now have or may
hereafter acquire in and to the Major Subcontracts. Except
as may otherwise be permitted by paragraph 4 of this
Agreement, the Borrower shall not agree to any modification
or to any termination of any Major Subcontract without the
prior approval of the Bank.
(n) The Borrower shall (to the extent required by the
Bank) make available for inspection at all times by the
Construction Consultant and the Bank copies of all Other
Subcontracts, and shall furnish to the Construction
Consultant and the Bank, upon request, copies of the same.
The Borrower hereby assigns to the Bank as additional
security for the payment of the Debt and the observance and
performance by the Borrower of the terms, covenants and
provisions of the Bond Documents to which the Borrower is a
party all right, title and interest which the Borrower may
now have or may hereafter acquire in and to the Other
Subcontracts. Except as may otherwise be permitted by
paragraph 4 of this Agreement, the Borrower shall not agree
to any modification or to any termination of the Other
Subcontracts without the prior approval of the Bank.
(o) The Major Subcontracts and the Other Subcontracts,
to the extent not already awarded as of the date hereof,
shall be awarded in accordance with a time table acceptable
to the Bank and the Construction Consultant. The Borrower
shall cause the Construction Manager and, to the extent
required by the Bank, any architect hired by the
Construction Manager, the subcontractors and materialmen
under the Major Subcontracts to respectively execute and
deliver to the Bank, contemporaneously with the execution
and delivery of their respective contracts, letter
agreements pursuant to the provisions of which the
Construction Manager, any such architect and such
subcontractors and materialmen shall agree to perform their
respective contracts at no additional cost or expense for
the benefit of the Bank, its nominee, or wholly-owned
subsidiary, in the event of a default under the
Reimbursement Agreement or any of the other Bond Documents
or a foreclosure of the Mortgage, which letter agreements
shall be in form and substance satisfactory to the Bank.
(p) The Borrower shall cause the Construction Manager
and those subcontractors and materialmen under the Major
Subcontracts designated by the Bank to provide 100% payment
and performance bonds, which payment and performance bonds
shall be in amount, form and substance and issued by
companies satisfactory to the Bank, and shall name the Bank,
as a dual obligee.
(q) The Borrower shall observe and perform all of the
terms, covenants and conditions of the General Construction
Contract, the Major Subcontracts and the Other Subcontracts
on the Borrower's part to be observed or performed.
(r) The Bank shall not be obligated to authorize the
Trustee to make an advance of the Bond proceeds with respect
to any contractor, subcontractor or materialman providing
work or materials with respect to the Improvements unless
such subcontractor or materialman is providing such work or
materials under a signed contract or purchase order.
(s) All of the terms, conditions and provisions of the
Bond Documents insofar as they pertain to the obligation of
the Bank to authorize the Trustee to make any advance of the
Bond proceeds shall have been complied with to the
satisfaction of the Bank and its counsel.
All conditions and requirements of this Agreement relating to the
obligation of the Bank to authorize the Trustee to make advances
of the Bond proceeds are for the sole benefit of the Bank and no
other person or party (including, without limitation, the
Construction Manager and subcontractors and materialmen engaged
in the construction of the Improvements) shall have the right to
rely on the satisfaction of such conditions and requirements by
the Borrower as a condition precedent to the Bank authorize the
Trustee making an advance of the Bond proceeds. The Bank shall
have the right, in its sole and absolute discretion, to waive any
such condition or requirement as a condition precedent to
authorize the Trustee making an advance of the Bond proceeds.
13. Contingency Reserve. A portion of the Bond proceeds in
the amount of $750,000 (hereinafter referred to as the
"Contingency Reserve") shall be reserved to cover the payment of
contingencies incurred in connection with the construction of the
Improvements (including, without limitation, the payment of
additional unanticipated costs incurred with respect to
particular line items set forth in the Trade Breakdown Schedule
and the Schedule of Other Project Costs and additional costs
incurred in connection with change orders entered into in
conformity with the provisions of this Agreement), and shall not
be advanced for any other purpose prior to the completion of
construction of the Improvements pursuant to this Agreement
unless agreed to the contrary by the Bank in its sole and
absolute discretion. All advances from the Contingency Reserve
shall be subject to specific prior review and approval in all
respects by the Bank.
14. Deficiency. The Bank shall not be obligated to
authorize the Trustee to make any advance of the Bond proceeds
if, in the sole opinion of the Bank, the balance of the Bond
proceeds yet to be advanced pursuant to this Agreement and the
Loan Agreement is at any time less (the amount by which it is
less being hereinafter referred to as the "Deficiency") than the
actual sum, as estimated by the Bank, which will be required
(x) to complete the construction of the Improvements in
accordance with the Plans and Specifications and this Agreement
and to pay all Direct Construction Costs, Other Project Costs and
all other costs and expenses of any nature whatsoever which will
be incurred in connection with the completion of construction of
the Improvements, and (y) to cover the payment of all operating
deficits of the Property (inclusive of debt service in connection
with the Bonds) through the date upon which the Bank reasonably
anticipates that the actual gross cash flow of the Property will
be sufficient to cover all operating expenses of the Property,
inclusive of debt service in connection with the Bonds. The
Borrower shall invest the Deficiency in the Property in the
following manner:
The Borrower shall, within fifteen (15) days after being
notified by the Bank that there is or will be a Deficiency,
either (i) invest in the Improvements in a manner satisfactory to
the Bank an amount equal to the Deficiency and deliver to the
Bank evidence satisfactory to the Bank of such investment, which
investment shall remain invested in the Improvements until the
Debt has been paid in full, or (ii) deposit with the Trustee an
amount sufficient to eliminate the Deficiency. Any amounts
deposited by the Borrower with the Trustee pursuant to
clause (ii) of the preceding sentence of this paragraph to cover
a Deficiency shall be disbursed by the Trustee to the Borrower in
accordance with the terms of the Indenture and this Agreement and
shall be applied by the Borrower to cover the payment of Direct
Construction Costs and Other Project Costs incurred in connection
with the construction of the Improvements, and until so disbursed
shall be held by the Trustee in the Acquisition and Construction
Fund. If an Event of Default (as hereinafter defined) shall
occur and be continuing, the Bank, in addition to all other
rights which it may have, (i) shall have the absolute and
unconditional right in its discretion to direct the Trustee to
apply the undisbursed balance of any Deficiency deposit, together
with interest earned thereon, in whole or in part to the payment
of the Debt in such order, priority and proportion as the Bank in
its sole and absolute discretion deems to be appropriate.
15. Specific Additional Covenants of Borrower. The
Borrower shall comply with each of the following terms and
conditions:
(a) The Borrower shall obtain and furnish to the Bank
within thirty (30) days after the completion of the
Improvements the originals or copies of all temporary
permanent certificates of occupancy (or their local
equivalent) and all other certificates, licenses, consents
and other approvals of the Governmental Authorities which
are required for the use and occupancy of the Improvements.
In no event shall the last advance of the Bond proceeds be
made pursuant to this Agreement and the Loan Agreement until
all such certificates, licenses, consents and approvals have
been obtained and delivered to the Bank. If temporary
certificates of occupancy are issued, the Borrower will
diligently take all steps necessary to obtain permanent
certificates of occupancy within a period not exceeding six
(6) months after the date of issuance of the temporary
certificates of occupancy, and shall upon receipt thereof
deliver to the Bank the originals or copies thereof.
(b) The Borrower shall furnish to the Bank from time
to time upon request (i) current financial statements of the
Borrower, (ii) information as to the Borrower's financial
condition, (iii) the names of all persons with whom the
Borrower or the Construction Manager has contracted or
intends to contract for the construction of the Improvements
or the furnishing of labor or materials in connection
therewith, (iv) a list of all unpaid bills for labor and
materials with respect to construction of the Improvements,
(v) budgets of the Borrower and revisions thereof showing
estimated Direct Construction Costs and Other Project Costs
and other costs and expenses to be incurred in connection
with the completion of construction of the Improvements,
(vi) lien waivers, receipted bills or other evidences of
payment of all Direct Construction Costs, Other Project
Costs and other costs and expenses incurred in connection
with the construction of the Improvements and any other
costs and expenses relating to the Property, and (vii) such
other information relating to the Borrower, the Property,
any guarantor or indemnitor or other person or party
connected with the Borrower, the Bonds, the construction of
the Improvements or any collateral for the Loan or other
source of repayment of the Bonds, as the Bank may reasonably
request.
(c) The Borrower shall proceed immediately if the
Improvements are partially or totally damaged or destroyed
by fire or other casualty with the repair and restoration
thereof and shall diligently prosecute the work of repair
and restoration to completion, it being agreed that (i) if
such casualty is covered by fire or other casualty
insurance, the Borrower's obligation to proceed with such
repair and restoration shall be contingent upon the Bank
authorizing the Trustee to disburse to the Borrower the
proceeds of such insurance to pay the cost of such repair
and restoration, and (ii) the cost of such repair and
restoration shall in no event or under any circumstance be
made the basis of any advance of the Bond proceeds.
(d) The Borrower shall pay when due all Direct
Construction Costs, Other Project Costs and other costs and
expenses incurred by the Borrower in connection with the
construction of the Improvements or any repair and
restoration of the Improvements pursuant to the provisions
of this paragraph hereinabove set forth.
(e) The Borrower shall pay all fees and charges
incurred in connection with this Agreement, including,
without limitation, reasonable attorneys' fees incurred by
the Bank, fees of the Construction Consultant, appraisal and
environmental fees, and fees and expenses relating to
examination of title, title insurance premiums, surveys, and
mortgage recording, documentary, transfer or other similar
taxes and revenue stamps.
(f) The Bank shall not be required to pay any
brokerage fees or commissions arising in connection with
this Agreement and the Borrower agrees to defend, indemnify
and hold the Bank harmless from and against any and all such
claims in connection therewith.
(g) The Borrower shall not assign this Agreement or
the moneys to be advanced and disbursed hereunder or convey,
assign, pledge, encumber or mortgage (except for the
Mortgage) any part of the Property without the prior consent
of the Bank.
16. Events of Default. The term "Event of Default" as used
in this Agreement shall mean the occurrence of any one or more of
the following events:
(a) If the Borrower shall continue to be in default
under any of the provisions of this Agreement for five (5)
days after notice from the Bank in the case of any default
which can be cured by the payment of a sum of money, or for
twenty (20) days after notice from the Bank in the case of
any other default, provided that if such default cannot
reasonably be cured within such twenty (20) day period and
the Borrower shall have commenced to cure such default
within such twenty (20) day period and thereafter diligently
and expeditiously proceeds to cure the same, such twenty
(20) day period shall be extended for so long as it shall
require the Borrower in the exercise of due diligence to
cure such default, it being agreed that no such extension
shall be for a period in excess of sixty (60) days, or shall
be construed as having the effect of extending the
Completion Date;
(b) If a default shall occur and be continuing beyond
any applicable grace and cure period under the Mortgage, the
Reimbursement Agreement or any of the other Bond Documents;
(c) If any survey required or requested by the Bank
pursuant to the provisions of this Agreement shows any
condition not approved by the Bank, and such condition is
not removed within thirty (30) days after notice thereof by
the Bank to the Borrower;
(d) If the Improvements are not completed in
accordance with the provisions of this Agreement on or
before the Completion Date, as the same may be extended
pursuant to paragraph 7 of this Agreement;
(e) If construction of the Improvements is suspended
for a period of three (3) consecutive business days other
than by reason of the occurrence of an event of force
majeure, or if construction of the Improvements in the
judgment of the Bank or the Construction Consultant is not
carried on with reasonable diligence, or if the Bank or the
Construction Consultant is of the opinion that the
Improvements cannot be completed by the Completion Date, as
the same may be extended pursuant to paragraph 7 of this
Agreement;
(f) If the Borrower shall fail to cover any Deficiency
in the manner and within the time period specified in
paragraph 14 of this Agreement;
(g) If the Borrower executes any chattel mortgage or
other security agreement with respect to any materials,
equipment, furniture or fixtures used in the construction of
the Improvements or the operation of the Improvements or
with respect to any articles of personal property
constituting part of the Property, or if any such materials,
equipment, furniture, fixtures or articles of personal
property are not substantially in accordance with the Plans
and Specifications or are leased or purchased pursuant to
any conditional sales contract or other security agreement
or otherwise so that the ownership thereof will not vest
unconditionally in the Borrower free from encumbrances upon
being made a part of the Property, or if the Borrower does
not furnish to the Bank on request the contracts, bills of
sale, statements, receipted vouchers or other agreements,
under which the Borrower claims title to such materials,
equipment, furniture, fixtures or articles of personal
property; or
(h) If the Borrower shall be in default under the
Revolving Credit Agreement between the Borrower and the Bank
dated December 22, 1992, as amended from time to time.
Upon the occurrence of an Event of Default, the Bank (i) may, at
its option and in its sole and absolute discretion, declare the
Debt immediately due and payable, and (ii) may, at its option and
in its sole and absolute discretion, cease to authorize the
Trustee to make advances of the Bond proceeds, and (iii) may
pursue any and all remedies provided for in the Bond Documents,
or otherwise available.
17. Other Remedies. Upon the occurrence of an Event of
Default, whether or not the Debt shall be or shall have been
declared due and payable or the Bank shall have instituted any
foreclosure or other action for the enforcement of the Mortgage,
the Bank may, in addition to any other remedies which the Bank
may have under the Loan Documents and in the Bank's sole and
absolute discretion, (a) enter upon the Premises and complete the
Improvements in accordance with the Plans and Specification with
such changes therein as the Bank may deem appropriate and employ
watchmen to protect the Improvements, all at the risk, cost and
expense of the Borrower, (b) at any time discontinue any work
commenced in respect of the Improvements or change any course of
action undertaken by it and not bound by any limitations or
requirements of time whether set forth herein or otherwise,
(c) assume any construction contract made by the Borrower in any
way relating to the Improvements and take over and use all or any
part of the labor, materials, equipment, furniture, fixtures and
articles of personal property contracted for by the Borrower,
whether or not previously incorporated into the Improvements, and
(d) in connection with any construction of the Improvements
undertaken by the Bank pursuant to the provisions of this
paragraph (w) engage builders, contractors, architects, engineers
and others for the purpose of furnishing labor, materials,
equipment, furniture, fixtures and articles of personal property
in connection with the construction of the Improvements, (x) pay,
settle or compromise all bills or claims which may become liens
against the Property, or any portion thereof, or which have been
or may be incurred in any manner in connection with completing
construction of the Improvements, and irrespective of whether any
of the same have been incurred by the Borrower, the Bank or any
other person or party, (y) pay all sums and take all action
necessary to effect the discharge of liens or encumbrances on, or
to effect the cure of defects in, the title of the Property, or
any portion thereof, and irrespective of whether any of the same
have been caused by any act or omission of the Borrower, the Bank
or any other person or party, and (z) take or refrain from taking
such action hereunder as the Bank may from time to time determine
in its sole discretion. The Borrower shall be liable to the Bank
for all sums paid or incurred by the Bank to construct and equip
the Improvements whether the same shall be paid or incurred
pursuant to the provisions of this paragraph or otherwise, and
all payments made or liabilities incurred by the Bank hereunder
of any kind whatsoever shall be paid by the Borrower to the Bank
upon demand, with interest thereon (calculated for the actual
number of days elapsed on the basis of a 360 day year) at a rate
per annum equal to the greater on a daily basis of (i) 20%, or
(ii) 5% plus the Prime Rate, provided that such interest rate
shall in no event exceed the maximum interest rate which the
Borrower may by law pay, from the date of payment by the Bank to
the date of payment to the Bank, which sums and interest shall be
secured by the Mortgage. For the purpose of exercising the
rights granted by this paragraph, the Borrower hereby irrevocably
constitutes and appoints the Bank its true and lawful
attorney-in-fact to execute, acknowledge and deliver any
instruments and to do and perform any acts in the name and on
behalf of the Borrower.
18. Incorporation of Provisions. The Mortgage is subject
to the conditions, stipulations, agreements and covenants
contained in this Agreement to the same extent and effect as if
fully set forth therein until this Agreement is terminated by the
completion of the Improvements and the payment in full of the
Debt.
19. Further Assurances. The Borrower shall on demand of
the Bank do any act or execute any additional documents required
by the Bank to confirm the lien of the Mortgage.
20. Representations and Warranties. The Borrower
represents and warrants to the Bank as follows:
(a) The Improvements and their contemplated use will
upon completion in accordance with the Plans and
Specifications comply with all applicable zoning
resolutions, building codes, environmental and other
applicable laws, rules and regulations.
(b) The Improvements are not now damaged or injured as
a result of any fire, explosion, accident, flood or other
casualty.
(c) No condemnation or eminent domain proceeding has
been commenced or to the knowledge of the Borrower is about
to be commenced against the Property, or any portion
thereof.
(d) The Borrower has no knowledge of any notes or
notices of violation of Federal law or municipal ordinances
or orders or requirements of the state in which the Property
is located or any municipal department or other Governmental
Authority.
(e) The Borrower is duly qualified to do business in
the State in which the Property is located.
(f) The Borrower (and the undersigned representatives
of the Borrower) have the full power and authority to
execute and deliver this Agreement and the other Bond
Documents, and the same constitute the binding and
enforceable obligations of the Borrower in accordance with
their terms.
21. Construction of Agreement. The titles and headings of
the paragraphs of this Agreement have been inserted for
convenience of reference only and are not intended to summarize
or otherwise describe the subject matter of such paragraphs and
shall not be given any consideration in the construction of this
Agreement.
22. Trust Fund. The Borrower shall receive the advances of
the Bond proceeds and shall hold the right to receive such
advances of the Bond proceeds as a trust fund to be applied first
for the purpose of paying the cost of the Improvements, and the
Borrower shall apply the same first to the payment of the cost of
the Improvements before using any part of the total of the same
for any other purpose.
23. Parties Bound, etc. The provisions of this Agreement
shall be binding upon and inure to the benefit of the Borrower,
the Bank and their respective successors and assigns (except as
otherwise prohibited by this Agreement).
24. Waivers. The Bank may at any time and from time to
time waive any one or more of the conditions contained herein,
but any such waiver shall be deemed to be made in pursuance
hereof and not in modification thereof, and any such waiver in
any instance or under any particular circumstance shall not be
effective unless in writing and shall not be considered a waiver
of such condition in any other instance or any other
circumstance.
25. Governing Law. This Agreement is and shall be deemed
to be a contract entered into pursuant to the laws of the State
of New York and shall in all respects be governed, construed,
applied and enforced in accordance with the laws of the State of
New York.
26. Severability. If any term, covenant or provision of
this Agreement shall be held to be invalid, illegal or
unenforceable in any respect, this Agreement shall be construed
without such term, covenant or provision.
27. Notices. Any notice, request, demand, statement,
authorization, approval, consent or acceptance made hereunder
shall be in writing and shall be hand delivered or sent by
Federal Express or other reputable courier service, or by
registered or certified mail, return receipt requested, and shall
be deemed given (i) when received at the following addresses if
hand delivered or sent by Federal Express, or other reputable
courier service, and (ii) three (3) business days after being
postmarked and addressed as follows if sent by registered or
certified mail, return receipt requested:
If to the Bank:
The Chase Manhattan Bank
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
With a copy to:
The Chase Manhattan Bank
Legal Department
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
and Assistant General Counsel
If to the Borrower:
Exolon-ESK Company
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President and
Chief Financial Officer
Each party may designate a change of address by notice to the
other party, given at least fifteen (15) days before such change
of address is to become effective.
28. Fees and Expenses. The Borrower shall pay to the Bank,
upon demand, all expenses incurred by the Bank in connection with
the collection of the Debt after an Event of Default, the
enforcement of the Bond Documents, and in curing any defaults
under the Bond Documents (including, without limitation,
reasonable attorneys' fees), with interest thereon (calculated
for the actual number of days elapsed on the basis of a 360-day
year) at a rate per annum equal to the Bank's Prime Rate plus 5%,
provided that such interest rate shall in no event exceed the
maximum interest rate which the Borrower may by law pay, from the
date incurred by the Bank to the date of repayment to the Bank,
which sums and interest shall be secured by the Mortgage.
29. Sign. At the request of the Bank, the Borrower shall,
subject to applicable ordinances pertaining to the Property,
place a sign on the Premises reciting, among other things, the
source of construction financing for the Improvements, which sign
shall be provided at the expense of the Borrower and shall remain
in place until the completion of construction of the
Improvements.
30. Modification. This Agreement may not be modified,
amended or terminated, except by an agreement in writing executed
by the parties hereto. The Borrower acknowledges that this
Agreement and the other Bond Documents set forth the entire
agreement and understanding of the Bank and the Borrower with
respect to the Bonds and that no oral or other agreements,
understandings, representations or warranties exist with respect
to the Loan other than those set forth in this Agreement and the
other Bond Documents.
31. Termination of Advances. Notwithstanding anything to
the contrary contained in this Agreement, the Bank shall have no
further obligation to authorize the Trustee to make any
additional advances of the Bond proceeds as of the date upon
which the Improvements have been completed in accordance with the
provisions of this Agreement and all Direct Construction Costs,
Other Project Costs and other costs and expenses incurred in
connection therewith have been paid in full and the actual net
cash operating income of the Property after the payment of all
operating expenses of the Property (exclusive of debt service in
connection with the Bonds) for a period of three (3) consecutive
calendar months and as determined on the basis of sound cash
accounting practices consistently applied is equal to or in
excess of the debt service in connection with the Bonds for such
period of three (3) consecutive calendar months.
IN WITNESS WHEREOF, the Bank and the Borrower have duly
executed this Agreement the day and year first above written.
EXOLON-ESK COMPANY
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Vice President and
Chief Financial Officer
THE CHASE MANHATTAN BANK
By: ▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
STATE OF ILLINOIS )
) ss.:
COUNTY OF ▇▇▇▇ )
On the 1st day of December, 1996, before me personally came
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, to me known, who, being by me duly sworn, did
depose and say that he resides at ▇▇▇▇▇▇▇▇, New York;
that he is Vice President and Chief Financial Officer of
EXOLON-ESK COMPANY, the corporation described in and which
executed the above instrument; and that he signed his name
thereto by authority of the Board of Directors of said
corporation.
▇▇▇▇▇ ▇. ▇▇▇▇▇
Notary Public
STATE OF ILLINOIS )
) ss.:
COUNTY OF ▇▇▇▇ )
On the 1st day of December, 1996, before me personally came
▇▇▇▇ ▇. ▇▇▇▇▇, to me known, who, being by me duly sworn, did
depose and say that he resides at Hamburg, New York;
that he is Vice President of THE CHASE MANHATTAN BANK, the
corporation described in and which executed the above instrument;
and that he signed his name thereto by authority of the Board of
Directors of said corporation.
▇▇▇▇▇▇▇ ▇▇▇▇▇
Notary Public
EXHIBIT A
(Description of the Premises)
-A1-
EXHIBIT B
(Definition of Certain Terms)
Commencement Date: The term "Commencement Date" as used in this
Agreement shall mean December 1, 1996.
Completion Date: The term "Completion Date" as used in this
Agreement shall mean June 30, 1998.
Construction Consultant: The term "Construction Consultant" as
used in this Agreement shall mean Sachs Electric.
Construction Escrow Agreement: The term "Construction Escrow
Agreement" as used in this Agreement shall mean the agreement
established among the Title Company, the Bank, the Construction
Manager, and Borrower for the disbursement of advances of Bond
proceeds and administration of the Bonds. The establishment of
the Construction Escrow Agreement may be a condition precedent to
the initial advance of Bond proceeds.
Construction Manager: The term "Construction Manager" as used in
this Agreement shall mean Sachs Electrical Company, having an
office at 16300 ▇▇▇▇▇▇ Post Road, Chesterfield Village, Missouri.
Debt: The term "Debt" as used in this Agreement shall mean all
principal, interest, additional interest and other sums of any
nature whatsoever which shall or may become due and payable to
the Bank pursuant to the provisions of the Reimbursement
Agreement.
Construction Contract: The term "Construction Contract" or
"General Construction Contract" as used in this Agreement shall
mean a certain Contract dated December 9, 1996, entered into
between the Borrower and the Construction Manager.
Governmental Authorities: The term "Governmental Authorities" as
used in this Agreement shall mean all governmental authorities
having jurisdiction over the Property.
Improvements: The term "Improvements" as used in this Agreement
shall mean the improvements to be constructed with a portion of
the Bond proceeds, more particularly described in the Loan
Agreement.
Documents: The term "Bond Documents" as used in this Agreement
shall collectively mean the "Bond Documents" as defined in the
Reimbursement Agreement.
Major Subcontracts: The term "Major Subcontracts" as used in
this Agreement shall mean any contract or contracts entered into
with any architect, single subcontractor or materialman employed
by the Construction Manager or the Borrower in connection with
-B1-
the construction of the Improvements and providing for aggregate
payments to such architect, subcontractor or materialman equal to
or in excess of $100,000.00.
Mortgage: The term "Mortgage" as used in this Agreement shall
mean a certain Mortgage dated the date hereof in the principal
sum of $13,000,000 executed and delivered by the Borrower
constituting a first lien on the fee estate of the Borrower in
Property and intended to be duly recorded in ▇▇▇▇▇▇ County,
Illinois.
Other Subcontracts: The term "Other Subcontracts" as used in
this Agreement shall mean any contracts other than Major
Subcontracts entered into by the Construction Manager or the
Borrower with architects, subcontractors or materialmen in
connection with the construction of the Improvements.
Preliminary Survey: The term "Preliminary Survey" as used in
this Agreement shall mean, collectively, December 3, 1996
prepared by J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ of ▇▇▇▇▇▇ Engineering.
Prime Rate: The term "Prime Rate" as used in this Agreement
shall mean such rate of interest as is publicly announced by the
Bank at its principal office from time to time as its prime rate.
Any change in the Prime Rate shall be effective on the date such
change is announced by the Bank.
Reimbursement Agreement: The term "Reimbursement Agreement" as
used in this Agreement shall mean the Letter of Credit
Reimbursement Agreement between the Borrower and the Bank dated
as of December 1, 1996, as the same may be amended or
supplemented from time to time.
Retainage: The term "Retainage" as used in this Agreement shall
mean an amount equal to 10% of the aggregate Direct Construction
Costs actually incurred by the Borrower for work in place as part
of the construction of the Improvements, as verified from time to
time by the Construction Consultant pursuant to the provisions of
this Agreement. The Retainage shall in no event be less than the
amount actually held back by the Borrower from the Construction
Manager and all subcontractors and materialmen engaged in the
construction of the Improvements. The Retainage shall not be
released until the construction of the Improvements has been
completed in accordance with the Plans and Specifications
accepted by the Bank and the Construction Consultant and the
provisions of this Agreement.
Title Company: The term "Title Company" as used in this
Agreement shall mean Chicago Title Insurance Company.
Verified Project Costs: The term "Verified Project Costs" as
used in this Agreement shall mean the aggregate, from time to
time, of (a) Other Project Costs actually incurred by the
Borrower in connection with the construction of the Improvements
and as substantiated by evidence reasonably satisfactory to the
-B2-
Bank, and (b) Direct Construction Costs actually incurred by the
Borrower for work in place as part of the construction of the
Improvements, as verified by the Construction Consultant, from
time to time, pursuant to the provisions of this Agreement, minus
a sum equal to the aggregate of (i) the Initial Equity
Requirement which is required to have been invested in the
Property pursuant to this Agreement, (ii) the aggregate portion
of the Deficiency, if any, which is required to have been
invested in the Property from time to time pursuant to this
Agreement, and (iii) the aggregate Retainage from time to time.
-B3-
EXHIBIT C
(Description of Plans and Specifications)
The term "Plans and Specifications" shall
include any and all blueprints, designs and
drawings done by Sachs Electric Company,
Westfield Engineering & Services, Inc. and
Dow Chemical in connection with the
construction and installation of a Dow
Sulferox Desulpherization System to control
the Particulate and SO2 emissions at the
Exolon-ESK Company facility in Hennepin,
Illinois.
-C1-
EXHIBIT D
(Direct Construction Cost Breakdown
and Request for Partial Payment)
The term "Direct Construction Cost Breakdown and Request for
Partial Payment" as used in this Agreement shall mean the
Application and Certificate for Payment (AIA Document G 6702 and
AIA Document G 6703 or their equivalent), with such changes
therein as the Bank or the Construction Consultant may reasonably
request, or such other form of Direct Construction Cost Breakdown
and Request for Partial Payment as may be reasonably acceptable
to the Bank and the Construction Consultant.
-D1-
