Exhibit 10(d)
LOAN AGREEMENT
(REAL ESTATE)
Among
GE CAPITAL PUBLIC FINANCE, INC.,
as Lender,
and
MASSACHUSETTS DEVELOPMENT FINANCE AGENCY,
as Issuer,
and
WESTERBEKE CORPORATION and ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇,
as Borrower
Dated as of April 24, 2000
_________________________________________________
THIS AGREEMENT IS NOT A GENERAL OBLIGATION OF THE MASSACHUSETTS
DEVELOPMENT FINANCE AGENCY NOR A DEBT OR A PLEDGE OF THE FAITH AND
CREDIT OF THE COMMONWEALTH OF MASSACHUSETTS; ALL AMOUNTS OWED
HEREUNDER ARE PAYABLE ONLY FROM THE REVENUES AND FUNDS PLEDGED
UNDER THIS AGREEMENT.
THIS AGREEMENT CONSTITUTES A SECURITY AGREEMENT UNDER THE
UNIFORM COMMERCIAL CODE OF
THE COMMONWEALTH OF MASSACHUSETTS.
_________________________________________________
LOAN AGREEMENT
Lender: GE Capital Public Finance, Inc.
Suite 470
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Issuer: Massachusetts Development Finance Agency
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Borrowers: Westerbeke Corporation
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and
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THIS LOAN AGREEMENT (REAL ESTATE) dated as of April 24, 2000 (this
"Agreement") is among GE Capital Public Finance, Inc., a Delaware
corporation, as lender (with its successors and assigns, "Lender"),
Massachusetts Development Finance Agency, a body corporate and politic and
a public instrumentality of The Commonwealth of Massachusetts (the
"Commonwealth"), as issuer ("Issuer"), Westerbeke Corporation, a Delaware
corporation ("Westerbeke") and ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇, a registered
Massachusetts limited liability partnership ("150 ▇▇▇▇ ▇▇▇▇▇▇▇," and
collectively with Westerbeke, the "Borrower").
WHEREAS, Issuer is authorized and empowered under the laws of the
Commonwealth, including Massachusetts General Laws, Chapter 23G, and, to
the extent made applicable, Chapter 40D, unless otherwise specified herein,
as amended, (the "Act"), to enter into loan agreements, contracts and other
instruments and documents with respect to indebtedness of Issuer to be used
to finance eligible projects as described in the Act; and
WHEREAS, in furtherance of the purposes of the Act, Issuer proposes
to finance all or a portion of the acquisition, construction, equipping and
installation of the Project (as hereinafter defined) by Borrower pursuant
to this Agreement by obtaining a loan from Lender and lending the proceeds
thereof to Borrower; and
WHEREAS, Borrower proposes to borrow the proceeds of the loan made by
Lender to Issuer upon the terms and conditions set forth herein to finance
the acquisition, construction, equipping and installation of the Project;
and
WHEREAS, Borrower shall make Loan Payments (as hereinafter defined)
directly to Lender as assignee of Issuer; and
WHEREAS, this Agreement shall not be deemed to constitute a debt or
liability or moral obligation of the Commonwealth or any political
subdivision thereof, or a pledge of the faith and credit or taxing power of
the Commonwealth or any political subdivision thereof, but shall be a
special obligation of Issuer payable solely from the Loan Payments payable
hereunder by Borrower to Lender as assignee of Issuer.
NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged, and in consideration of the premises contained in
this Agreement, Lender, Issuer and Borrower agree as follows:
DEFINITIONS AND EXHIBITS
Section 1.01. Definitions. The following terms used herein will have
the meanings indicated below unless the context clearly requires otherwise:
"Act" means Massachusetts General Laws, Chapter 23G, and, to the
extent made applicable, Chapter 40D, unless otherwise specified herein, as
amended.
"Acquisition Costs" means the contract price paid or to be paid to
the Vendors or reimbursed to Borrower for any portion of the Project upon
Borrower's acceptance thereof, including administrative, engineering,
legal, financial and other costs incurred by Lender, Issuer, Borrower,
Escrow Agent and Vendors in connection with the acquisition, construction,
equipping, and installation and financing by Lender of such Project, and
costs of issuance that may be paid pursuant to the Statement as to Tax
Exempt Status, which Acquisition Costs are set forth in Exhibit J hereto.
"Agreement" means this Agreement, including all exhibits hereto, as
any of the same may be supplemented or amended from time to time in
accordance with the terms hereof.
"Arbitrage Certificate" means the Arbitrage Certificate dated as of
April 25, 2000, properly executed on behalf of Issuer.
"Assignment" means the Assignment of Rents and Leases to be entered
into by Westerbeke in favor of Lender.
"Bank" means any bank acceptable to Lender in its sole discretion
which is the issuer of the Letter of Credit.
"Bank Agreement" means the letter agreement dated April 25, 1997 by
State Street Bank and Trust Company and agreed and accepted by Borrower,
without giving effect to any amendment thereof or supplement thereto after
the date hereof and the financial covenants and definitions relating
thereto are incorporated herein by reference with the same effect as if
fully set forth herein and shall be deemed to apply to Westerbeke and the
Loan hereunder (in lieu of the obligations under the Bank Agreement) and
shall survive this Loan Agreement notwithstanding any termination of the
Bank Agreement.
"Borrower" means Westerbeke Corporation, a Delaware corporation
("Westerbeke"), and ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇, a registered Massachusetts
limited liability partnership ("150 ▇▇▇▇ ▇▇▇▇▇▇▇"), jointly and severally.
"Business Day" means a day other than a Saturday or Sunday on which
banks are generally open for business in New York, New York and
Minneapolis, Minnesota.
"Certificate of Acceptance" means a Certificate of Acceptance, in
substantially the form set forth as Exhibit B hereto, whereby Borrower
acknowledges receipt in good condition of certain portions of the Project
as identified therein and confirms the date of delivery thereof and certain
other matters.
"Code" means, collectively, the Internal Revenue Code of 1986, as
amended, and United States Treasury regulations promulgated thereunder.
"Commonwealth" means The Commonwealth of Massachusetts.
"Construction Letter of Credit" means an irrevocable standby
letter(s) of credit in the form attached hereto as Exhibit L in the amount
of $200,000 issued by Bank pursuant to the terms of Section 2.02 of the
Escrow Agreement.
"Default" means an event that, with giving of notice or passage of
time or both, would constitute an Event of Default as provided in Article
XI hereof.
"Determination of Taxability" means any determination, decision or
decree by the Commissioner of Internal Revenue, or any District Director of
Internal Revenue or any court of competent jurisdiction, or an opinion of
counsel qualified in such matters obtained by Lender, that an Event of
Taxability shall have occurred. A Determination of Taxability also shall be
deemed to have occurred on the first to occur of the following:
(a) the date when Borrower files any statement, supplemental
statement, or other tax schedule, return or document, which discloses
that an Event of Taxability shall have occurred; or
(b) the effective date of any federal legislation enacted
after the date of this Agreement or promulgation of any income tax
regulation or ruling by the Internal Revenue Service that causes an
Event of Taxability after the date of this Agreement.
(c) if upon sale, lease or other deliberate action taken by
the Borrower with respect to the Project within the meaning of Treas.
Reg. [SECTION]1.141-2(d), the failure to receive an unqualified
opinion of qualified bond counsel to the effect that such deliberate
action will not cause interest payable by Borrower hereunder to
become includable in the gross income of the recipient.
"Environmental Laws" has the meaning ascribed thereto in paragraph
(p) of Article V hereof.
"Equipment Loan Agreement" means the Loan Agreement (Equipment) dated
as of April 24, 2000 among Issuer, Lender and Westerbeke.
"Escrow Agent" means National City Bank of Minneapolis, as escrow
agent under the Escrow Agreement, and its successors and assigns permitted
under the Escrow Agreement.
"Escrow Agreement" means the Escrow Agreement (Real Estate) dated as
of April 24, 2000, among Lender, Issuer, Borrower and Escrow Agent.
"Escrow Fund" means the fund established and held by Escrow Agent
pursuant to the Escrow Agreement.
"Event of Taxability" means, if as the result of any act, failure to
act or use of the proceeds of the Loan, a change in use of the Project or
any misrepresentation or inaccuracy in any of the representations,
warranties or covenants contained in this Agreement, the Statement as to
Tax Exempt Status or the Arbitrage Certificate by Issuer or Borrower, or
the enactment of any federal legislation after the date of this Agreement
or the promulgation of any income tax regulation or ruling by the Internal
Revenue Service after the date of this Agreement, the Interest is or
becomes includable in Lender's gross income for federal income tax
purposes.
"Gross-Up Rate" means, with respect to any Interest payment
(including payments made prior to the Event of Taxability), the rate
necessary, as a result of an Event of Taxability, to calculate a total
payment in an amount sufficient such that the sum of the Interest payment
plus an additional payment would, after being reduced by the federal tax
(including interest and penalties) actually payable thereon, equal the
amount of the Interest payment.
"Hazardous Substances Agreement" means the Certificate and Indemnity
Agreement Regarding Hazardous Substances dated as of April 24, 2000 by
Borrower.
"Hazardous Waste or Materials" has the meaning ascribed thereto in
paragraph (p) of Article V hereof.
"Interest" means the portion of any Loan Payment designated as and
comprising interest as shown in Exhibit A hereto.
"Issuer" means the Massachusetts Development Finance Agency, acting
as issuer under this Agreement.
"Lender" means (i) GE Capital Public Finance, Inc., acting as lender
under this Agreement, (ii) any surviving, resulting or transferee
corporation of GE Capital Public Finance, Inc. and (iii) except where the
context requires otherwise, any assignee(s) of Lender.
"Letter of Credit" means an irrevocable standby letter of credit in
the form attached hereto as Exhibit L that may be issued by Bank in the
amount set forth in Section 3.02(c)(vii).
"Loan" means the loan from Issuer to Borrower pursuant to this
Agreement.
"Loan Payments" means the loan payments payable by Borrower pursuant
to the provisions of this Agreement as specifically set forth in Exhibit A
hereto. As provided in Article II hereof, Loan Payments shall be payable by
Borrower directly to Lender, as assignee of Issuer, in the amounts and at
the times as set forth in Exhibit A hereto.
"Loan Proceeds" means the total amount of money to be paid pursuant
to Section 2.02 hereof by Lender to Escrow Agent for deposit and
application in accordance with the Escrow Agreement and any costs of
issuance paid by Lender.
"Mortgage" means the Mortgage, Security Agreement, Assignment of
Leases and Rents and Fixture Filing dated as of April 1, 2000 to be
executed on behalf of Westerbeke in favor of Lender, relating to the
Project.
"Mortgaged Property" means collectively, all of Borrower's estate,
right, title and interest, now owned or hereafter acquired, including any
reversion or remainder interest, in the real property located in the City
of Taunton, Bristol County, Massachusetts described on Exhibit E hereto,
including all heretofore or hereafter vacated alleys and streets abutting
the property, and all easements, rights, appurtenances, tenements,
hereditaments, rents, royalties, mineral, oil and gas rights and profits,
water, water rights and water stock appurtenant to the property
(collectively "Premises"); together with all of Borrower's estate, right,
title and interest, now owned or hereafter acquired, in:
(a) all buildings, structures, improvements, parking areas,
landscaping, and fixtures now or hereafter erected on, attached to,
or used or adapted for use in the operation of the Premises,
including (without limitation) all heating, air conditioning and
incinerating apparatus and equipment; all boilers, engines, motors,
dynamos, generating equipment, piping and plumbing fixtures, water
heaters, ranges, cooking apparatus and mechanical kitchen equipment,
refrigerators, freezers, cooling, ventilating, sprinkling and vacuum
cleaning systems, fire extinguishing apparatus, gas and electric
fixtures, carpeting, floor coverings, underpadding, elevators,
escalators, partitions, mantels, built-in mirrors, window shades,
blinds, draperies, screens, storm sash, awnings, signs, furnishings
of public spaces, halls and lobbies, and shrubbery and plants, and
including also all interest of any owner of the Premises in any of
such items hereafter at any time acquired under conditional sale
contract, chattel mortgage or other title retaining or security
instrument, all of which property mentioned in this clause (a) shall
be deemed part of the realty covered by this Agreement and not
severable wholly or in part without material injury to the freehold
of the Premises (all of the foregoing together with replacements and
additions thereto are referred to herein as "Improvements");
(b) all compensation, awards, damages, rights of action and
proceeds, including interest thereon and/or the proceeds of any
policies of insurance therefor, arising out of or relating to a
(i) taking or damaging of the Premises or Improvements thereon by
reason of any public or private improvement, condemnation proceeding
(including change of grade), sale or transfer in lieu of
condemnation, or fire, earthquake or other casualty, or (ii) any
injury to or decrease in the value of the Premises or the
Improvements for any reason whatsoever;
(c) return premiums or other payments upon any insurance any
time provided for the benefit of or naming Lender, and refunds or
rebates of taxes or assessments on the Premises;
(d) all the right, title and interest of Borrower in, to and
under all written and oral leases and rental agreements (including
extensions, renewals and subleases; all of the foregoing shall be
referred to collectively herein as the "Leases") now or hereafter
affecting the Premises including, without limitation, all rents,
issues, profits and other revenues and income therefrom and from the
renting, leasing or bailment of Improvements and equipment, all
guaranties of tenants' performance under the Leases, and all rights
and claims of any kind that Borrower may have against any tenant
under the Leases or in connection with the termination or rejection
of the Leases in a bankruptcy or insolvency proceeding; and the
leasehold estate, if applicable;
(e) plans, specifications, contracts and agreements relating
to the design or construction of the Improvements; Borrower's rights
under any payment, performance or other bond in connection with the
design or construction of the Improvements; all landscaping and
construction materials, supplies and equipment used or to be used or
consumed in connection with construction of the Improvements, whether
stored on the Premises or at some other location; and contracts,
agreements and purchase orders with contractors, subcontractors,
suppliers and materialmen incidental to the design or construction of
the Improvements;
(f) all contracts, accounts, rights, claims or causes of
action pertaining to the construction of or modification to the
Premises or the Improvements, now or hereafter in existence, intended
by the obligor thereof to provide Borrower with proceeds to satisfy
the loan evidenced hereby or improve the Premises or Improvements,
and the right to receive all proceeds due under such commitments or
agreements, including refundable deposits and fees;
(g) all books, records, surveys, reports and other documents
related to the Premises, the Improvements, the Leases or other items
of collateral described herein; and
(h) all additions, accessions, replacements, substitutions,
proceeds and products of the real and personal property, tangible and
intangible, described herein.
"Permitted Exceptions" means the permitted exceptions listed on
Exhibit H hereto.
"Premises" has the meaning described in the definition of Mortgaged
Property and legally described on Exhibit E hereto.
"Prepayment Amount" means the amount which Borrower may or must, from
time to time, pay or cause to be paid to Lender, as assignee of Issuer, in
order to prepay the Loan, as provided in Section 2.08 hereof, such amounts
being set forth in Exhibit A hereto, together with accrued interest and all
other amounts due hereunder.
"Principal" means the portion of any Loan Payment designated as and
comprising principal as set forth in Exhibit A hereto.
"Project" means, collectively, the acquisition of the Premises and
the renovation of 110,000 square feet of buildings at the Premises.
The term "Project" also refers to the facilities which result or have
resulted from the foregoing activities.
"Purchase Agreements" means Borrower's purchase agreements with
Vendors of the Project.
"Statement as to Tax Exempt Status" means Borrower's Statement as to
Tax Exempt Status of dated April __, 2000 and executed by Borrower.
"Substitute Bank" means the issuer of a Substitute Letter of Credit, which
issuer must be acceptable to Lender in its sole discretion.
"Substitute Letter of Credit" means an irrevocable standby letter of
credit in form, substance and amount acceptable to Lender in its sole
discretion and issued by a Substitute Bank.
"Title Company" means LandAmerica Financial Group, Inc.
"UCC" means the Uniform Commercial Code as adopted and in effect in
the Commonwealth.
"Vendor" means the contractor, seller, manufacturer or vendor of
items or services relating to the Project, as well as the agents or dealers
of the manufacturer, from whom Borrower has purchased or is purchasing any
portion of the services or items relating to the Project.
Section 1.02. Exhibits. The following exhibits are attached hereto
and made a part hereof:
Exhibit A: Form of Schedule of Loan Payments setting forth the Loan
Payments and Prepayment Amounts.
Exhibit B: Form of Certificate of Acceptance.
Exhibit C-1: Form of opinion of counsel to Westerbeke.
Exhibit C-2: Form of opinion of counsel to 150 ▇▇▇▇ ▇▇▇▇▇▇▇.
Exhibit D: Form of opinion of bond counsel.
Exhibit E: Legal Description of Premises.
Exhibit F: Survey Requirements.
Exhibit G: Environmental Phase I Report Requirements.
Exhibit H: Permitted Exceptions.
Exhibit I: Permanent Loan Insurance Requirements.
Exhibit J: Schedule of Acquisition Costs describing the Project.
Exhibit K: List of Trade Names.
Exhibit L: Form of Construction Letter of Credit.
Section 1.03. Rules of Construction.
(a) The singular form of any word used herein, including the terms
defined in Section 1.01 hereof, shall include the plural, and vice versa.
The use herein of a word of any gender shall include correlative words of
all genders.
(b) Unless otherwise specified, references to Articles, Sections and
other subdivisions of this Agreement are to the designated Articles,
Sections and other subdivision of this Agreement as originally executed.
The words "hereof," "herein," "hereunder" and words of similar import refer
to this Agreement as a whole.
(c) The headings or titles of the several articles and sections
shall be solely for convenience of reference and shall not affect the
meaning, construction or effect of the provisions hereof.
Section 1.04. Combined Documents. This Agreement, the Escrow
Agreement, the Mortgage and the exhibits hereto together constitute the
Financing Document and the Security Document under the Act, and as evidence
of indebtedness, this Agreement and the exhibits hereto constitute a Bond
under the Act.
ARTICLE II.
FINANCING OF PROJECT AND TERMS OF LOAN
Section 2.01. Acquisition of Project. Borrower either has either
acquired, improved, constructed, installed, equipped or ordered or shall
acquire, improve, construct, install, equip or order the Project pursuant
to one or more Purchase Agreements from one or more Vendors. Borrower shall
remain liable to the Vendor or Vendors in respect of its duties and
obligations in accordance with each Purchase Agreement. Borrower covenants
and agrees to pay or cause to be paid such amounts as may be necessary to
complete the improvement, construction, acquisition, equipping and
installation of the Project and to ensure that the Project is operational
to the extent that the Loan Proceeds are insufficient to cause such
improvement, construction, acquisition, equipping and installation.
Borrower will substantially complete the Project no later than April 15,
2001. Borrower shall bear the risk of loss with respect to any loss or
claim relating to any portion of the Project and shall be liable in respect
of its duties and obligations in accordance with any contract entered into
in connection with the Project, and neither Lender nor Issuer shall assume
any such liability or risk of loss.
Section 2.02. Loan. Lender hereby agrees, subject to the terms and
conditions of this Agreement, to make a loan to Issuer in the amount of
$4,600,000; Issuer hereby agrees, subject to the terms and conditions of
this Agreement, to borrow such amount from Lender and to lend such amount
to Borrower; and Borrower hereby agrees to borrow such amount from Issuer.
Upon fulfillment of the conditions set forth in Section 3.01 hereof, Lender
shall deposit $250,000 of the Loan Proceeds on behalf of Issuer in the
Escrow Fund to be held, invested and disbursed as provided in the Escrow
Agreement and deposit $4,350,000 of the Loan Proceeds on behalf of Issuer
with the Title Company to be held and disbursed pursuant to Lender's escrow
instruction letter to Title Company. Issuer's obligation to repay the loan
from Lender, and Borrower's obligation to repay the Loan, shall commence,
and interest shall begin to accrue, on the date that Loan Proceeds are
deposited in the Escrow Fund.
Section 2.03. Interest. The principal amount of the loan from Lender
to Issuer and the Loan hereunder outstanding from time to time shall bear
interest (computed on the basis of a 360-day year consisting of twelve 30
day months) at the rate of 6.46% per annum. Interest accruing on the
principal balance of such loans outstanding from time to time shall be
payable as provided in Exhibit A hereto and upon earlier demand in
accordance with the terms hereof or prepayment in accordance with Section
2.08 hereof. Upon the occurrence of a Determination of Taxability, Borrower
shall, with respect to future interest payments, begin making Loan
Payments, with the interest portion thereof to be calculated at the Gross-
Up Rate. In addition, Borrower shall make immediately upon demand of Lender
a payment to Lender sufficient to supplement prior Loan Payments to the
Gross-Up Rate for any period in which interest becomes includable in gross
income for federal income tax purposes.
Section 2.04. Payments. Issuer shall pay the principal of, premium,
if any in accordance with Section 2.08 hereof, and interest on the loan
from Lender to Issuer, but only out of the amounts paid by Borrower
pursuant to this Agreement. Borrower shall pay to Lender, as assignee of
Issuer, Loan Payments, in the amounts and on the dates set forth in Exhibit
A hereto. As security for its obligation to pay the principal of, premium,
if any in accordance with Section 2.08 hereof, and interest on the loan
from Lender, Issuer assigns to Lender all of Issuer's right to receive Loan
Payments from Borrower hereunder, all of Issuer's rights hereunder, and
Issuer irrevocably constitutes and appoints Lender and any present or
future officer or agent of Lender as its lawful attorney, with full power
of substitution and re-substitution, and in the name of Issuer or
otherwise, to collect the Loan Payments and any other payments due
hereunder and to ▇▇▇ in any court for such Loan Payments or other payments,
and to withdraw or settle any claims, suits or proceedings pertaining to or
arising out of this Agreement upon any terms; provided, however, that such
assignment shall not include Issuer's rights under Article IV hereof and
its right to notice pursuant to Section 12.03 hereof. Such Loan Payments
and other payments shall be made by Borrower directly to Lender, as
Issuer's assignee, and shall be credited against Issuer's payment
obligations hereunder. No provision, covenant or agreement contained in
this Agreement or any obligation herein imposed on Issuer, or the breach
thereof, shall constitute or give rise to or impose upon Issuer a pecuniary
liability, a charge upon its general credit or a pledge of its general
revenues. In making the agreements, provisions and covenants set forth in
this Agreement, Issuer has not obligated itself except with respect to the
Project and the application of the Loan Payments to be paid by Borrower
hereunder. All amounts required to be paid by Borrower hereunder shall be
paid in lawful money of the United States of America in immediately
available funds. No recourse shall be had by Lender or Borrower for any
claim based on this Agreement against any director, officer, employee or
agent of Issuer alleging personal liability on the part of such person,
unless such claim is based on the willful dishonesty of or intentional
violation of law by such person.
Section 2.05. Payment on Non-Business Days. Whenever any payment to
be made hereunder shall be stated to be due on a day which is not a
Business Day, such payment may be made on the next succeeding Business Day,
and such extension of time shall in such case be included in the
computation of interest or the fees hereunder, as the case may be.
Section 2.06. Loan Payments To Be Unconditional. The obligations of
Borrower to make the Loan Payments required under this Article II and to
make other payments hereunder and to perform and observe the covenants and
agreements contained herein shall be absolute and unconditional in all
events, without abatement, diminution, deduction, setoff or defense for any
reason, including (without limitation) any failure of the Project to be
constructed, delivered or installed, any defects, malfunctions, breakdowns
or infirmities in the Project or any accident, condemnation, destruction or
unforeseen circumstances. Notwithstanding any dispute between Borrower and
any of Issuer, Lender, any Vendor or any other person, Borrower shall make
all Loan Payments when due and shall not withhold any Loan Payments pending
final resolution of such dispute, nor shall Borrower assert any right of
set-off or counterclaim against its obligation to make such payments
required under this Agreement.
Section 2.07. Joint and Several Obligations of Borrower. Westerbeke
and 150 ▇▇▇▇ ▇▇▇▇▇▇▇ shall be jointly and severally obligated to make all
Loan Payments under this Agreement as well as to perform all covenants and
representations related to such Loan Payments and to the execution and
delivery of this Agreement, the Escrow Agreement, the Hazardous Substances
Agreement and the Statement as to Tax Exempt Status.
Section 2.08. Prepayments.
(a) Borrower may, in its discretion, prepay the Loan in whole on any
Loan Payment date after the third anniversary of the funding of the Loan by
paying the applicable Prepayment Amount provided, however, that the Loan
may not be prepaid unless all amounts owed under the Equipment Loan
Agreement have been paid or prepaid in full.
(b) Borrower shall prepay the Loan in whole or in part at any time
pursuant to Article IX hereof by paying the applicable Prepayment Amount
and all other amounts due hereunder.
(c) Borrower shall prepay the Loan in full immediately upon demand
of Lender after the occurrence of an Event of Default as set forth in
Article XI hereof by paying the applicable Prepayment Amount and all other
amounts due hereunder.
(d) Borrower shall prepay the Loan in full within 180 days upon
demand of Lender after the occurrence of a Determination of Taxability by
paying the applicable Prepayment Amount and all other amounts due
hereunder, plus an amount necessary to supplement the prior Loan Payments
to the Gross-Up Rate.
(e) The amounts due hereunder shall be repaid in part with funds
remaining in the Escrow Fund upon termination of the Escrow Agreement, as
provided in Sections 2.03 or 2.04 of the Escrow Agreement.
Upon any prepayment in part of the Loan, other than pursuant to
Section 2.03 of the Escrow Agreement, the prepayment shall be applied first
to Interest accrued thereon and next to Principal in the inverse order of
maturity.
Section 2.09. Security. The obligations of Borrower to make the Loan
Payments required by this Article II and to make other payments hereunder and
to perform or observe the covenants and agreements contained herein shall be
secured, among other things, by a security interest in the Mortgaged
Property, and pursuant to the Mortgage covering the Mortgaged Property as
described therein, and by certain other documents executed and delivered in
connection herewith.
ARTICLE III.
CONDITIONS PRECEDENT
Section 3.01. Conditions Precedent to Closing. Lender's agreement to
make the loan to Issuer hereunder, Issuer's agreement to accept the loan and
to make the Loan to Borrower hereunder and Lender's agreement to deposit the
Loan Proceeds in the Escrow Fund, shall be subject to the condition precedent
that Lender and Issuer shall have received all of the following, each in
form and substance satisfactory to Lender and the Issuer:
(a) This Agreement, properly executed on behalf of Issuer and
Borrower, and each of the Exhibits hereto properly completed.
(b) The Statement as to Tax Exempt Status, properly executed
on behalf of Borrower.
(c) The Arbitrage Certificate, properly executed on behalf of
Issuer.
(d) The Escrow Agreement, properly executed on behalf of
Issuer, Borrower and Escrow Agent.
(i) The Mortgage, properly executed on behalf of Westerbeke.
(e) The Assignment, properly executed on behalf of Westerbeke.
(f) [Reserved.]
(g) The Hazardous Substances Agreement properly executed on
behalf of the Borrower.
(h) The Equipment Loan Agreement, properly executed on behalf of
Lender, Issuer and Westerbeke.
(i) A certificate of the Clerk or an Assistant Clerk of
Westerbeke, certifying as to (i) the resolutions of the board of
directors and, if required, the shareholders of Westerbeke, authorizing
the execution, delivery and performance of this Agreement, the Escrow
Agreement, the Mortgage, the Assignment, the Hazardous Substances
Agreement and the Statement as to Tax Exempt Status and any related
documents, (ii) the bylaws of Westerbeke, and (iii) the signatures of
the officers or agents of Westerbeke authorized to execute and deliver
this Agreement, the Escrow Agreement, the Mortgage, the Assignment, the
Hazardous Substances Agreement and the Statement as to Tax Exempt
Status and other instruments, agreements and certificates on behalf of
Westerbeke.
(j) A certificate of 150 ▇▇▇▇ ▇▇▇▇▇▇▇, certifying as to (i)
the consent of partners of 150 ▇▇▇▇ ▇▇▇▇▇▇▇, authorizing the
execution, delivery and performance of this Agreement, the Escrow
Agreement, the Hazardous Substances Agreement and the Statement as to
Tax Exempt Status and any related documents, (ii) the partnership
agreement of 150 ▇▇▇▇ ▇▇▇▇▇▇▇, and (iii) the signatures of the
partners or agents of 150 ▇▇▇▇ ▇▇▇▇▇▇▇ authorized to execute and
deliver the documents referred to in (i) of this paragraph and
certificates on behalf of 150 ▇▇▇▇ ▇▇▇▇▇▇▇.
(k) Currently certified copies of the Westerbeke's Charter.
(l) Currently certified copies of the 150 ▇▇▇▇ ▇▇▇▇▇▇▇'▇
Partnership Agreement.
(m) A Certificate of Good Standing issued as to Westerbeke by
the Delaware Secretary of State, not more than thirty (30) days prior
to the date of the funding of the Loan.
(n) A Certificate of Good Standing from the Massachusetts
Secretary of State attesting to Westerbeke's qualification to do
business in the Commonwealth, issued not more than thirty (30) days
prior to the date of the funding of the Loan.
(o) A Certificate of Good Standing issued as to 150 ▇▇▇▇ ▇▇▇▇▇▇▇
by the Massachusetts Secretary of State, not more than thirty (30) days
prior to the date of the funding of the Loan.
(p) A completed and executed Form 8038 or evidence of filing
thereof with the Secretary of Treasury.
(q) A resolution or evidence of other official action taken by
or on behalf of Issuer to authorize the transactions contemplated
hereby.
(r) Evidence that the financing of the Project has been
approved by the "applicable elected representative" of the
Commonwealth after a public hearing held upon reasonable notice.
(s) An opinion of counsel to Borrower, addressed to Lender and
Issuer, substantially in the form attached hereto as Exhibit C.
(t) An opinion of bond counsel, addressed to Lender and
Issuer, substantially in the form attached hereto as Exhibit D.
(u) Payment of Lender's fees, commissions and expenses to the
extent required by Section 12.01 hereof.
(v) Payment of Issuer's fees, commissions and expenses
required by Section 4.03 hereof.
(w) The Arbitrage Certificate, properly executed on behalf of
Issuer.
(x) As applicable, financing statements executed by Westerbeke,
as debtor, and Lender, as secured party, and/or the original
certificate of title or manufacturer's certificate of origin and title
application if any of the Mortgaged Property.
(y) An environmental engineering report for the Premises
prepared by an engineer engaged by Lender after consultation with
Westerbeke and at Westerbeke's expense, and in a manner satisfactory to
Lender, based upon an investigation relating to and making appropriate
inquiries concerning the Premises and in compliance with the
Environmental Phase I Requirements set forth in Exhibit G hereto.
(z) A completed Environmental Questionnaire in the form
provided by Lender executed on behalf of Westerbeke.
(aa) An ALTA (or equivalent) mortgagee policy of title insurance
in the maximum amount of the appraised value of the Premises and
Improvements or as determined by Lender, with reinsurance and
endorsements as Lender may require, containing no exceptions to title
(printed or otherwise) which are unacceptable to Lender, and insuring
that the Mortgage is a first-priority lien on the Premises and
related collateral. Without limitation, such policy shall (i) be in
the 1970 ALTA (as amended 84) form or, if not available, ALTA 1992
form (deleting arbitration and creditors' rights, if permissible) or,
if not available, the form commonly used in the Commonwealth,
insuring Lender and its successors and assigns; and (ii) include the
following endorsements and/or affirmative coverages: (A) ALTA 9
Comprehensive, (B) Survey, (C) Usury, (D) Doing Business, (E) Access,
(F) Environmental Protection Lien, (G) Subdivision (as applicable),
(H) Contiguity (as applicable) and (I) an ALTA 3.1 Zoning Endorsement
(with additional coverage for number and type of parking spaces).
(bb) A zoning compliance letter from the applicable City
Planner's, County Clerk's or Zoning Department's office.
(cc) Certificates of insurance required hereunder, containing a
lender's loss payable clause or endorsement in favor of Lender and
the permanent loan insurance requirements set forth in Exhibit I
hereto.
(dd) An as built survey of the Project prepared in compliance
with the requirements set forth in Exhibit F hereto.
(ee) A copy of the final, permanent and unconditional
Certificate of Occupancy for the Project.
(ff) An engineer's "walk-through" inspection prepared by an
engineer acceptable to Lender at Westerbeke's expense stating that
the Improvements were built in conformance with approved plans and
specifications with no evident structural deficiencies and including
the building's compliance with the Americans with Disabilities Act of
1990 and all regulations promulgated thereunder. Lender shall have
the right to require reasonable modifications to the plans and
specifications and reasonable modification or repairs to the
Improvements based upon the recommendations of the engineer. Neither
Lender nor the engineer shall have any responsibility whatsoever to
any person for design/structural failure or other architectural or
engineering inadequacies.
(gg) The Final Appraisal report of the real estate included in
the Mortgaged Property addressed to Lender, in form and substance
acceptable to Lender and prepared by an MAI certified appraiser
acceptable to Lender in conformance with the guidelines and
recommendations set forth in the Uniform Standards of Professional
Appraisal Practice (USPAP) and the requirements of the Code of
Professional Ethics and Standards of Professional Appraisal Practice
of the Appraisal Institute. In addition to the foregoing
requirements, whenever the income approach is utilized by the
appraiser, the report shall include a direct capitalization analysis
as well as a discounted cash flow analysis and a final estimate of
value based on the property's fee simple estate.
(hh) Any other documents or items required by Lender or Issuer.
Section 3.02. Conditions Precedent to Release of Holdback Amount or
Construction Letter of Credit. The amount of $250,000 (the "Holdback
Amount") shall not be disbursed from the Escrow Fund unless Borrower
provides Lender with a Construction Letter of Credit. Upon receipt of the
Construction Letter of Credit, Lender will allow disbursements of the
Holdback Amount from the Escrow Fund. The Construction Letter of Credit, if
any, will be released if (a) the representations and warranties contained
in Articles IV and V hereof are correct on and as of the date of such
disbursement as though made on and as of such date, except to the extent
that such representations and warranties relate solely to an earlier date;
(b) no event has occurred and is continuing, or would result from the Loan
which constitutes a Default, an Event of Default or a Determination of
Taxability; and (c) Lender receives the following items, each in form and
substance acceptable to Lender:
(i) Current searches of appropriate filing offices showing that (A)
no state or federal tax liens have been filed and remain in effect
against Westerbeke, (B) no financing statements have been filed and
remain in effect against Westerbeke relating to the Mortgaged
Property except those financing statements filed by Lender, and (C)
Lender has duly filed all financing statements necessary to perfect
the security interest created pursuant to this Agreement and the
Mortgage;
(ii) Lender shall have received each of the items required for a
disbursement pursuant to the Escrow Agreement;
(iii) Lender shall have received in form and substance satisfactory
to Lender Vendor invoice(s) and/or bills(s) of sale relating to the
Mortgaged Property and, if such invoices have been paid by Issuer or
Borrower, evidence of payment thereof and, if applicable, evidence of
official intent to reimburse such payment as required by the Code;
(iv) An engineer's "walk-through" inspection prepared by an engineer
acceptable to Lender at Borrower's expense stating that the
Improvements were built in conformance with plans and specifications
with no evident structural deficiencies and including the building's
compliance with the Americans with Disabilities Act of 1990 and all
regulations promulgated thereunder;
(v) The Certificate of Acceptance, properly executed on behalf of
Borrower;
(vi) A copy of the final, permanent and unconditional
Certificate of Occupancy for the Project; and
(vii) The Construction Letter of Credit.
(viii) A Final Appraisal report in the same form as required pursuant
to Section 3.01(gg) hereof. Borrower shall deliver to Lender the
Letter of Credit if $4,600,000 is greater than the product of (a) 85%
and (b) the amount set forth in such Final Appraisal report. The
amount of such Letter of Credit shall be the difference between (a)
$4,600,000 and (b) the product of (i) 85% and (ii) the amount set
forth in such Final Appraisal report.
ARTICLE IV.
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF ISSUER; RIGHTS OF ISSUER
Section 4.01. Representations, Warranties and Covenants. Issuer
represents, warrants and covenants for the benefit of Lender and Borrower,
as follows:
(a) Issuer is a body politic and corporate and a public
instrumentality of the Commonwealth, established under the Act, with
the powers pursuant to the Act to execute and deliver this Agreement
and the Escrow Agreement and to perform its obligations hereunder and
pursuant hereto.
(b) Issuer has taken all necessary action and has complied with
all provisions of the Constitution of the Commonwealth and the Act,
including, but not limited to, the making of the findings required by
the Act, required to make this Agreement and the Escrow Agreement the
valid obligations of the Issuer that they purport to be; and, when
executed and delivered by the parties thereto, this Agreement and the
Escrow Agreement will constitute valid and binding agreements of Issuer
enforceable in accordance with their terms, except as enforceability
may be subject to the exercise of judicial discretion in accordance
with general equitable principles and to applicable bankruptcy,
insolvency, reorganization, moratorium and other laws for the relief
of debtors heretofore or hereafter enacted to the extent that the same
may be constitutionally applied.
(c) The officer of Issuer executing this Agreement, the Escrow
Agreement and any related documents has been duly authorized to execute
and deliver this Agreement, the Escrow Agreement and such related
documents under the terms and provisions of a resolution of Issuer's
governing body, or by other appropriate official action.
(d) Issuer covenants that it will promptly pay or cause to be
paid the Loan Payments at the place, on the dates and in the manner
provided herein and in the Escrow Agreement, PROVIDED, HOWEVER, THAT
THIS AGREEMENT DOES NOT NOW AND SHALL NEVER CONSTITUTE A GENERAL
OBLIGATION OF THE ISSUER OR A DEBT OR PLEDGE OF THE FAITH AND CREDIT
OF THE COMMONWEALTH, AND ALL COVENANTS AND UNDERTAKINGS BY THE ISSUER
HEREUNDER TO MAKE PAYMENTS ARE SPECIAL OBLIGATIONS OF THE ISSUER
PAYABLE SOLELY FROM THE LOAN PAYMENTS PLEDGED HEREUNDER.
(e) Issuer has assigned to Lender all of Issuer's rights, title
and interest (if any) in the Mortgaged Property, and its rights, title
and interest in this Agreement (except its rights under Section 4.03,
any indemnification payable to Issuer pursuant to Sections 4.04 and
7.07 hereof and notice to Issuer pursuant to Section 12.03 hereof).
(f) Issuer will not pledge, mortgage or assign this Agreement or
its duties and obligations hereunder to any person, firm or corporation,
except as provided under the terms hereof.
(g) None of the execution and delivery of this Agreement or the
Escrow Agreement, the consummation of the transactions contemplated
hereby or the fulfillment of or compliance with the terms and conditions
of this Agreement or the Escrow Agreement violates any law, rule,
regulation or order, conflicts with or results in a breach of any of
the terms, conditions or provisions of any restriction or any agreement
or instrument to which Issuer is now a party or by which it is bound or
constitutes a default under any of the foregoing or results in the
creation or imposition of any prohibited lien, charge or encumbrance
of any nature whatsoever upon any of the property or assets of Issuer
under the terms of any instrument or agreement.
(h) The financing of the Project has been approved by the
applicable elected representative (as defined in Section 147(f) of the
Code) of Issuer after a public hearing held upon reasonable notice.
(i) Issuer will take no action that would cause the Interest to
become includable in gross income for federal income tax purposes under
the Code, and Issuer will take and will cause its officers, employees
and agents to take all affirmative actions legally within its power
necessary to ensure that the Interest does not become includable in
gross income of the recipient for federal income tax purposes under the
Code (including, without limitation, the calculation and payment of any
rebate required to preserve such exclusion).
(j) There is no action, suit, proceeding, claim, inquiry or
investigation, at law or in equity, before or by any court, regulatory
agency, public board or body pending or, to the best of Issuer's
knowledge, threatened against or affecting Issuer, challenging Issuer's
authority to enter into this Agreement or the Escrow Agreement or any
other action wherein an unfavorable ruling or finding would adversely
affect the enforceability of this Agreement, the Escrow Agreement or
the Statement as to Tax Exempt Status or any other transaction of Issuer
which is similar hereto, or the exclusion of the Interest from gross
income for federal tax purposes under the Code, or would materially and
adversely affect any of the transactions contemplated by this Agreement.
(k) Issuer will submit or cause to be submitted to the Secretary
of the Treasury a Form 8038 (or other information reporting statement)
at the time and in the form required by the Code.
(l) Issuer makes no other representations or warranties
whatsoever, either express or implied, other than as set forth in this
Article IV and the Escrow Agreement, including, without limitation, a
representation or warranty that the portion of the Loan Payments that
constitutes Interest with respect thereto is or will continue to be
exempt from federal or state income taxation.
Section 4.02. Limitations on Actions. Without limiting the generality
of Section 4.03, Issuer shall not be required to monitor the financial
condition of Borrower and shall not have any responsibility or other
obligation with respect to reports, notices, certificates or other documents
filed with it hereunder.
Section 4.03. Responsibility; Fees and Expenses. Issuer shall be
entitled to the advice of counsel (who may be counsel for any party) and
shall not be liable for any action taken or omitted to be taken in good faith
in reliance on such advice. Issuer may rely conclusively on any communication
or other document furnished to it under this Agreement and reasonably believed
by it to be genuine. Issuer shall not be liable for any action (a) taken by it
in good faith and reasonably believed by it to be within the discretion or
powers conferred upon it, or (b) in good faith omitted to be taken by it
because it reasonably believed to be beyond the discretion or powers conferred
upon it, (c) taken by it pursuant to any direction or instruction by which it
is governed under this Agreement or (d) omitted to be taken by it by reason of
the lack of direction or instruction required for such action, nor shall it be
responsible for the consequences of any error of judgment reasonably made by
it. Issuer shall in no event be liable for the application or misapplication
of funds, or for other acts or defaults by any person except its own
directors, officers and employees. When any consent or other action by Issuer
is called for by this Agreement, Issuer may defer such action pending such
investigation or inquiry or receipt of such evidence, if any, as it may
require in support thereof. It shall not be required to take any remedial
action (other than the giving of notice) unless reasonable indemnity is
provided for any expense of liability to be incurred thereby. Borrower shall
pay the Issuer's initial fee and shall prepay or reimburse Issuer within
thirty (30) days after notice for all expenses (including reasonable
attorney's fees) incurred by Issuer in connection with the execution,
delivery, performance and enforcement under this Agreement and all expenses
reasonably incurred or advances reasonably made in the exercise of Issuer's
rights or its performance of its obligations hereunder. Issuer shall be
entitled to reimbursement from Borrower for expenses reasonably incurred or
advances reasonably made, with interest at the "base rate" of the Escrow
Agent, as announced from time to time (or, if none, the nearest equivalent),
in the exercise of its rights or the performance of its obligations hereunder,
to the extent that it acts without previously obtaining indemnity. No
permissive right or power to act shall be construed as a requirement to act;
and no delay in the exercise of any such right or power shall affect the
subsequent exercise of that right or power. Issuer shall not be required to
take notice of any breach or default by Borrower under this Agreement except
when given notice thereof by Lender. No recourse shall be had by Borrower or
Lender for any claim based on this Agreement or any agreement securing the
same against any director, officer, agent or employee of Issuer alleging
personal liability on the part of such person unless such claim is based upon
the willful dishonesty of or intentional violation of law by such person. No
covenant, stipulation, obligation or agreement of Issuer contained in this
Agreement shall be deemed to be a covenant, stipulation, obligation or
agreement of any present or future director, officer, employee or agent
of Issuer in his or her individual capacity, and no person executing this
Agreement shall be liable personally thereon or be subject to any personal
liability or accountability by reason of the issuance thereof.
Section 4.04. Indemnification by Borrower. Borrower, regardless of any
agreement to maintain insurance, shall indemnify and save harmless, to the
fullest extent permitted by law, Issuer and its directors, officers, employees
and agents from and against (a) any and all claims by or on behalf of any
person arising out of (1) any condition of the Project, or (2) the
acquisition, installation, use or operation of the installation or any work
or anything whatsoever done or omitted to be done on or relating to the
Project, or (3) any accident, injury or damage whatsoever to any person
occurring on or about the Project, or (4) any breach or default by Borrower
of or in any of its obligations hereunder, or (5) any act or omission of
Borrower or any of its agents, contractors, servants, employees or
licensees, or (6) the offering, issuance, sale or any resale of this
Agreement or the Loan, but only to the extent permitted by law, and (b) any
and all costs, counsel fees, expenses or liabilities reasonably incurred in
connection with any such claim or any action or proceeding brought thereon.
In case any action or proceeding is brought against Issuer or any such
director, officer, employee or agent by reason of any such claim, Borrower
upon notice from the affected party shall resist or defend such action or
proceeding. Subject to the foregoing, the Issuer shall cooperate and join
with Borrower, at the expense of Borrower, as may be required in connection
with any action or defense by Borrower.
ARTICLE V.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWER
Borrower represents, warrants and covenants for the benefit of Lender
and Issuer, as follows:
(a) Westerbeke is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware, is in good standing and is qualified to do business in the
Commonwealth, has power to enter into this Agreement and by proper
corporate action, has duly authorized the execution and delivery of
this Agreement, the Escrow Agreement, the Mortgage, the Assignment,
the Hazardous Substances Agreement and the Statement as to Tax Exempt
Status. Westerbeke is in good standing and is duly licensed or
qualified to transact business in the Commonwealth and in all
jurisdictions where its failure to be so qualified would have a
material adverse effect on the financial or operating condition of
Borrower.
(b) 150 ▇▇▇▇ ▇▇▇▇▇▇▇ is a registered limited liability
partnership duly organized, validly existing and in good standing
under the laws of Massachusetts, has power to enter into this
Agreement, the Escrow Agreement, the Hazardous Substances Agreement
and the Statement as to Tax Exempt Status and by proper limited
liability partnership action, has duly authorized the execution and
delivery of this Agreement, the Escrow Agreement, the Hazardous
Substances Agreement and the Statement as to Tax Exempt Status. 150
▇▇▇▇ ▇▇▇▇▇▇▇ is in good standing and is duly licensed or qualified to
transact business in the Commonwealth and in all jurisdictions where
its failure to be so qualified would have a material adverse effect
on the financial or operating condition of Borrower.
(c) Westerbeke has been fully authorized to execute and deliver
this Agreement, the Escrow Agreement, the Mortgage, the Assignment, the
Hazardous Substances Agreement and the Statement as to Tax Exempt Status
under the terms and provisions of the resolutions of its board of
directors, or by other appropriate official approval, and further
represents, covenants and warrants that all requirements have been met,
and procedures have occurred in order to ensure the enforceability of
this Agreement, the Escrow Agreement, the Mortgage, the Assignment, the
Hazardous Substances Agreement and the Statement as to Tax Exempt Status
and this Agreement, the Escrow Agreement, the Mortgage, the Assignment,
the Hazardous Substances Agreement and the Statement as to Tax Exempt
Status have been duly authorized, executed and delivered.
(d) 150 ▇▇▇▇ ▇▇▇▇▇▇▇ has been fully authorized to execute and
deliver this Agreement, the Escrow Agreement, the Hazardous
Substances Agreement and the Statement as to Tax Exempt Status under
the terms and provisions of its partnership agreement, or by other
appropriate official approval, and further represents, covenants and
warrants that all requirements have been met, and procedures have
occurred in order to ensure the enforceability of this Agreement, the
Escrow Agreement, the Hazardous Substances Agreement and the
Statement as to Tax Exempt Status and this Agreement, the Escrow
Agreement, the Hazardous Substances Agreement and the Statement as to
Tax Exempt Status have been duly authorized, executed and delivered.
(e) The officers of Westerbeke executing this Agreement, the
Escrow Agreement, the Mortgage, the Assignment, the Hazardous
Substances Agreement and the Statement as to Tax Exempt Status and
any related documents have been duly authorized to execute and
deliver this Agreement, the Escrow Agreement, the Mortgage, the
Assignment, the Hazardous Substances Agreement and the Statement as
to Tax Exempt Status and such related documents under the terms and
provisions of resolution(s) of Borrower's board of directors, its
charter and by-laws.
(f) The partners of 150 ▇▇▇▇ ▇▇▇▇▇▇▇ executing this Agreement,
the Escrow Agreement, the Hazardous Substances Agreement and the
Statement as to Tax Exempt Status and any related documents have been
duly authorized to execute and deliver this Agreement, the Escrow
Agreement, the Hazardous Substances Agreement and the Statement as to
Tax Exempt Status and such related documents under the terms and
provisions of its partnership agreement.
(g) This Agreement, the Escrow Agreement, the Mortgage, the
Hazardous Substances Agreement, the Assignment and the Statement as
to Tax Exempt Status constitute valid and legally binding obligations
of Westerbeke, enforceable against Westerbeke in accordance with
their respective terms, except to the extent limited by bankruptcy,
reorganization or other laws of general application relating to or
affecting the enforcement of creditors' rights and by general
equitable principles.
(h) This Agreement, the Escrow Agreement, the Hazardous
Substances Agreement and the Statement as to Tax Exempt Status
constitute valid and legally binding obligations of 150 ▇▇▇▇ ▇▇▇▇▇▇▇,
enforceable against 150 ▇▇▇▇ ▇▇▇▇▇▇▇ in accordance with their
respective terms, except to the extent limited by bankruptcy,
reorganization or other laws of general application relating to or
affecting the enforcement of creditors' rights and by general
equitable principles.
(i) The authorization, execution and delivery by Westerbeke of
this Agreement, the Escrow Agreement, the Mortgage, the Assignment,
the Hazardous Substances Agreement, and the Statement as to Tax
Exempt Status, the consummation of the transactions contemplated
hereby and the fulfillment of the terms and conditions hereof by
Westerbeke do not and will not violate any law, rule, regulation or
order that would have a material adverse effect on the operation of
the Mortgaged Property or the financial or operating condition of
Westerbeke, conflict with or result in a breach of any of the terms
or conditions of the by-laws or charter of Westerbeke or of any other
agreement by and between Westerbeke and its shareholders or any
agreement among the shareholders or of any restriction or of any
agreement or instrument to which Westerbeke is now a party and do not
and will not constitute a default under any of the foregoing or
result in the creation or imposition of any liens, charges or
encumbrances of any nature upon any of the property or assets of
Westerbeke contrary to the terms of any instrument or agreement.
(j) The authorization, execution and delivery by 150 ▇▇▇▇
▇▇▇▇▇▇▇ of this Agreement, the Escrow Agreement, the Hazardous
Substances Agreement and the Statement as to Tax Exempt Status, the
consummation of the transactions contemplated hereby by 150 ▇▇▇▇
▇▇▇▇▇▇▇ and the fulfillment of the terms and conditions hereof by 150
▇▇▇▇ ▇▇▇▇▇▇▇ do not and will not violate any law, rule, regulation or
order that would have a material adverse effect on the operation of
the Mortgaged Property or the financial or operating condition of 150
▇▇▇▇ ▇▇▇▇▇▇▇, conflict with or result in a breach of any of the terms
or conditions of the partnership agreement of 150 ▇▇▇▇ ▇▇▇▇▇▇▇ or of
any other agreement by and between the partners of 150 ▇▇▇▇ ▇▇▇▇▇▇▇
or of any restriction or of any agreement or instrument to which 150
▇▇▇▇ ▇▇▇▇▇▇▇ is now a party and do not and will not constitute a
default under any of the foregoing or result in the creation or
imposition of any liens, charges or encumbrances of any nature upon
any of the property or assets of 150 ▇▇▇▇ ▇▇▇▇▇▇▇ contrary to the
terms of any instrument or agreement.
(k) The authorization, execution, delivery and performance of
this Agreement, the Escrow Agreement, the Mortgage, the Assignment,
the Hazardous Substances Agreement or the Statement of Tax Exempt
Status by Westerbeke do not require submission to, approval of, or
other action by any governmental authority or agency, which action
with respect to this Agreement, the Escrow Agreement, the Mortgage,
the Assignment, the Hazardous Substances Agreement or the Statement
of Tax Exempt Status has not been taken and which is final and non-
appealable, except for such submissions, approvals and other actions
which are not required at this time in light of the status of
construction of the Project, but in any event will be obtained prior
to or at the completion of the construction.
(l) The authorization, execution, delivery and performance of
this Agreement, the Escrow Agreement, the Hazardous Substances
Agreement or the Statement of Tax Exempt Status by 150 ▇▇▇▇ ▇▇▇▇▇▇▇
do not require submission to, approval of, or other action by any
governmental authority or agency, which action with respect to this
Agreement, the Escrow Agreement or the Statement of Tax Exempt Status
has not been taken and which is final and non-appealable, except for
such submissions, approvals and other actions which are not required
at this time in light of the status of construction of the Project,
but in any event will be obtained prior to or at the completion of
the construction.
(m) There is no action, suit, proceeding, claim, inquiry or
investigation, at law or in equity, before or by any court,
regulatory agency, public board or body pending or, to the best of
Westerbeke's knowledge, threatened against or affecting Westerbeke,
challenging Westerbeke's authority to enter into this Agreement, the
Escrow Agreement, the Mortgage, the Assignment, the Hazardous
Substances Agreement or to execute and deliver the Statement as to
Tax Exempt Status or any other action wherein an unfavorable ruling
or finding would adversely affect the enforceability of this
Agreement, the Escrow Agreement, the Mortgage, the Assignment, the
Hazardous Substances Agreement or the Statement as to Tax Exempt
Status or the exclusion of the Interest from gross income for federal
tax purposes under the Code, or would materially and adversely affect
any of the transactions contemplated by this Agreement.
(n) There is no action, suit, proceeding, claim, inquiry or
investigation, at law or in equity, before or by any court,
regulatory agency, public board or body pending or, to the best of
150 ▇▇▇▇ ▇▇▇▇▇▇▇'▇ knowledge, threatened against or affecting 150
▇▇▇▇ ▇▇▇▇▇▇▇, challenging 150 ▇▇▇▇ ▇▇▇▇▇▇▇'▇ authority to enter into
this Agreement, the Escrow Agreement, the Hazardous Substances
Agreement or to execute and deliver the Statement as to Tax Exempt
Status or any other action wherein an unfavorable ruling or finding
would adversely affect the enforceability of this Agreement, the
Escrow Agreement, the Hazardous Substances Agreement or the Statement
as to Tax Exempt Status or the exclusion of the Interest from gross
income for federal tax purposes under the Code, or would materially
and adversely affect any of the transactions contemplated by this
Agreement.
(o) The Premises and the property at which any portion of the
Mortgaged Property is located is properly zoned for its current and
anticipated use and the use of the Project will not violate any
applicable zoning, land use, environmental or similar law or
restriction which would have a material adverse effect on the use of
the Premises or the financial or operating condition of Borrower.
Westerbeke has all licenses and permits to use and/or operate the
Project.
(p) Borrower has furnished to Lender a Phase I Environmental
Site Assessment dated March 7, 2000, prepared by VERTEX Engineering
Services, Inc., and an Environmental Questionnaire dated April 3,
2000 (collectively, the "Report"). Except as disclosed to Lender in
the Report, Borrower has received no notification of any kind
suggesting that the Project or any adjacent property is or may be
contaminated with any hazardous waste or materials or is or may be
required to be cleaned up in accordance with any applicable law or
regulation; and Borrower further represents and warrants that, except
as previously disclosed to Lender in writing, to the best of its
knowledge as of the date hereof after due and diligent inquiry, there
are no Hazardous Waste or Materials located in, on or under the
Project or any adjacent property, or incorporated in any
Improvements, nor has the Project or any adjacent property ever been
used as a landfill or a waste disposal site, or a manufacturing,
handling, storage, distribution or disposal facility for Hazardous
Waste or Materials. As used herein, the term "Hazardous Waste or
Materials" includes any substance or material defined in or
designated as hazardous or toxic wastes, hazardous or toxic material,
a hazardous, toxic or radioactive substance, or other similar term,
by any federal, state or local statute, regulation or ordinance now
or hereafter in effect. Borrower has obtained all permits, licenses
and other authorizations which are required under federal, state and
local laws relating to emissions, discharges, releases of Hazardous
Wastes or Materials into ambient air, surface water, ground water or
land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Wastes or Materials ("Environmental Laws") at
Borrower's facilities or in connection with the operation of its
facilities. Except as previously disclosed to Lender in writing,
Borrower and all activities of Borrower at its facilities comply with
all Environmental Laws and with all terms and conditions of any
required permits, licenses and authorizations applicable to Borrower
with respect thereto. Except as previously disclosed to Lender in
writing, Borrower is also in compliance with all limitations,
restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in Environmental Laws
or contained in any plan, order, decree, judgment or notice of which
Borrower is aware. Except as previously disclosed to Lender in
writing, Borrower is not aware of, nor has Borrower received notice
of, any events, conditions, circumstances, activities, practices,
incidents, actions or plans which may interfere with or prevent
continued compliance with, or which may give rise to any liability
under, any Environmental Laws.
(q) The Project is of the type authorized and permitted to be
financed under the Act.
(r) Borrower owns or will own the Project, and intends to
operate the Project, or cause the Project to be operated, as a
"project," within the meaning of the Act, until the date on which all
of the Loan Payments have been fully paid or the applicable
Prepayment Amount has been fully paid.
(s) Borrower will not take any action that would cause the
Interest to become includable in gross income of the recipient for
federal income tax purposes under the Code (including, without
limitation, intentional acts under Treas. Reg. [SECTION]1.148-2(c) or
deliberate action within the meaning of Treas. Reg. [SECTION]
1.141-2(d), and Borrower will take and will cause its officers, employees
and agents to take all affirmative actions legally within its power
necessary to ensure that the Interest does not become includable in gross
income of the recipient for federal income tax purposes under the Code
(including, without limitation, the calculation and payment of any
rebate required to preserve such exclusion).
(t) Westerbeke has heretofore furnished to Lender reviewed
financial statement for its fiscal years ended October 23, 1999,
October 24, 1998, October 25, 1997 and October 26, 1996, and those
statements fairly present the financial condition of Westerbeke on
the dates thereof and the results of its operations and cash flows
for the periods then ended and were prepared in accordance with
generally accepted accounting principles. Since the date of the most
recent financial statements, there has been no material adverse
change in the business, properties or condition (financial or
otherwise) of Borrower.
(u) Borrower has paid or caused to be paid to the proper
authorities when due all federal, state and local taxes required to
be withheld by it, except any which are being contested in good faith
by the Borrower and which do not result in a lien being placed on the
Mortgaged Property. Borrower has filed all federal, state and local
tax returns which are required to be filed, and Borrower has paid or
caused to be paid to the respective taxing authorities all taxes as
shown on said returns or on any assessment received by it to the
extent such taxes have become due, except any which are being
contested in good faith by the Borrower and which do not result in a
lien being placed on the Mortgaged Property.
(v) Westerbeke has or will have good and absolute title to the
Mortgaged Property and all proceeds thereof, free and clear of all
mortgages, security interests, liens and encumbrances except for the
security interest created pursuant to this Agreement and the Mortgage
and the Permitted Exceptions.
(w) All financial and other information provided to Lender by
or on behalf of Borrower in connection with Borrower's request for
the Loan contemplated hereby is true and correct in all material
respects and, taken as a whole, does not contain any material
omissions, and, as to projections, valuations or pro forma financial
statements, present a good faith opinion as to such projections,
valuations and pro forma condition and results.
(x) Westerbeke has provided to Lender signed financing statements
sufficient when filed to perfect the security interest created pursuant
to this Agreement. When such financing statements are filed in the
offices noted therein, Lender will have a valid and perfected security
interest in the Mortgaged Property, subject to no other security
interest, assignment, lien or encumbrance. None of the Mortgaged
Property constitutes a replacement of, substitution for or accessory
to any property of Westerbeke subject to a lien of any kind. Westerbeke
owns the Premises subject to no liens or encumbrances of any kind except
the Permitted Exceptions.
(y) Upon acquisition, improvement, construction, equipping or
installation of any portion of the Project, Borrower will provide to
Issuer and Lender a completed and executed copy of the Certificate of
Acceptance attached hereto as Exhibit B.
(z) Borrower will aid and assist Issuer in connection with
preparing and submitting to the Secretary of the Treasury a Form 8038
(or other applicable information reporting statement) at the time and
in the form required by the Code.
(aa) The representations contained in the Statement as to Tax
Exempt Status are true and correct as of the date hereof. Borrower
will comply fully at all times with the Statement as to Tax Exempt
Status, and Borrower will not take any action, or omit to take any
action, which, if taken or omitted, respectively, would violate the
Statement as to Tax Exempt Status.
(bb) Expenses for work done by officers or employees of
Borrower in connection with the Project will be included as an
Acquisition Cost, if at all, only to the extent (i) such persons were
specifically employed for such particular purpose, (ii) the expenses
do not exceed the actual cost thereof and (iii) such expenses are
treated or capable of being treated (whether or not so treated) on
the books of Borrower as a capital expenditure in conformity with
generally accepted accounting principles applied on a consistent
basis.
(cc) Any costs incurred with respect to that part of the
Project paid from the Loan Proceeds shall be treated or capable of
being treated on the books of Borrower as capital expenditures in
conformity with generally accepted accounting principles applied on a
consistent basis.
(dd) No part of the Loan Proceeds will be used to finance
inventory or rolling stock or will be used for working capital or to
finance any other cost not constituting an Acquisition Cost.
(ee) No person other than Borrower is in occupancy or
possession of any portion of the real property where any portion of
the Project is located.
(ff) The Project is land or property of the character subject
to the allowance for depreciation under Section 167 of the Code.
ARTICLE VI.
TITLE TO MORTGAGED PROPERTY; SECURITY INTEREST
Section 6.01. Title to Mortgaged Property. Legal title to the Mortgaged
Property and any and all repairs, replacements, substitutions and
modifications to such Mortgaged Property on the date hereof and thereafter
shall be in Westerbeke or 150 ▇▇▇▇ ▇▇▇▇▇▇▇. Borrower will at all times protect
and defend, at its own cost and expense, its title from and against all
claims, liens and legal processes of creditors of Borrower, and keep all
Mortgaged Property, free and clear of all such claims, liens and processes,
subject to the Permitted Exceptions.
Section 6.02. Security Interest in Mortgaged Property. This Agreement
is intended to constitute a security agreement within the meaning of the UCC.
As security for Borrower's payment to Lender, as assignee of Issuer, of Loan
Payments and all other amounts payable to Lender hereunder, under the
Equipment Loan Agreement, or any other obligation (whether direct or
indirect and whether now existing or hereafter arising), Borrower hereby
grants to Lender a security interest constituting, subject to the Permitted
Exceptions, a first lien on (i) the Mortgaged Property, (ii) all
securities, funds, moneys, deposits and other Mortgaged Property at any
time held in or subject to the Escrow Fund and (iii) products and proceeds
of any of the foregoing Mortgaged Property. Issuer and Borrower agree to
execute such additional documents, including financing statements,
assignments, affidavits, notices and similar instruments, in form
satisfactory to Lender, and take such other actions that Lender deems
reasonably necessary or appropriate to establish and maintain the security
interest created by this Section, and Issuer and Borrower hereby designate
and appoint Lender as their agent, and grant to Lender a power of attorney
(which is coupled with an interest), to execute on behalf of Issuer and
Borrower, as the case may be, after and during the continuance of an Event
of Default, such additional documents and to take such other actions.
Section 6.03. Change in Name or Corporate Structure of Westerbeke;
Change in Location of Westerbeke's Principal Place of Business. Borrower's
chief executive office is located at the address set forth above, and all of
Borrower's records relating to its business, the Mortgaged Property,
Equipment and the Project are kept at such location or at the Premises.
Borrower hereby agrees to provide written notice to Lender and Issuer of
any change or proposed change in its name, limited liability structure,
place of business or chief executive office or change or proposed change in
the location of the Project or any Mortgaged Property. Such notice shall be
provided thirty (30) days in advance of the date that such change or
proposed change is planned to take effect. Borrower does business, and has
done business, only under its own name and the trade names, if any, set
forth on Exhibit K hereto.
Section 6.04. Liens and Encumbrances to Title. Borrower shall not,
directly or indirectly, create, incur, assume or suffer to exist any mortgage,
pledge, lien, charge, encumbrance or claim on or with respect to the Mortgaged
Property, (together, "Liens") other than the respective rights of Lender
and Issuer as herein provided and the Permitted Exceptions. Borrower shall
promptly, at its own expense, take such action as may be necessary duly to
discharge or remove any such Lien. Borrower shall reimburse Lender for any
expenses incurred by Lender to discharge or remove any such Lien.
Section 6.05. Assignment of Insurance. As additional security for the
payment and performance of Borrower's obligations hereunder, Borrower hereby
assigns to Lender, as assignee of Issuer, any and all moneys (including,
without limitation, proceeds of insurance and refunds of unearned premiums)
due or to become due under, and all other rights of Westerbeke with respect
to, any and all policies of insurance now or at any time hereafter covering
the Project or any Mortgaged Property or any evidence thereof or any business
records or valuable papers pertaining thereto, and Borrower hereby directs
the issuer of any such policy to pay all such moneys directly to Lender.
Borrower hereby assigns to Lender, as assignee of Issuer, any and all
moneys due or to become due with respect to any condemnation proceeding
affecting the Mortgaged Property. At any time, whether before or after the
occurrence of any Event of Default, Lender may (but need not), in Lender's
name or in Borrower's name, execute and deliver proof of claim, receive all
such moneys, endorse checks and other instruments representing payment of
such moneys, and adjust, litigate, compromise or release any claim against
the issuer of any such policy or party in any condemnation proceeding.
Section 6.06. Agreement as Financing Statement. To the extent permitted
by applicable law, a carbon, photographic or other reproduction of this
Agreement or of any financing statements signed by signed by Westerbeke is
sufficient as a financing statement in any state to perfect the security
interests granted in this Agreement.
Section 6.07. Letter of Credit and Construction of Letter of Credit.
Borrower hereby agrees to have delivered to Lender the Letter of Credit as
additional security for the prompt payment and performance of all of
Borrower's obligations hereunder. If Borrower elects to use the Holdback
Amount prior to the time the conditions set forth in Section 3.02 hereof
are met, Borrower shall provide Lender with a Construction Letter of Credit
in the amount of the Holdback Amount. Borrower hereby further agrees to
deliver to Lender not later than 60 days prior to any scheduled expiration
date of the Letter of Credit, Construction Letter of Credit or any
Substitute Letter of Credit (a) evidence satisfactory to Lender that such
Letter of Credit, Construction Letter of Credit or Substitute Letter of
Credit has been renewed on terms acceptable to Lender or (b) a Substitute
Letter of Credit. If at any time (x) the rating of Bank by LACE is below
"B" or (y) the rating of a Substitute Bank is below the rating required by
Lender at the time the related Substitute Letter of Credit is accepted by
Lender, Borrower shall within 30 days provide to Lender a Substitute Letter
of Credit. A failure by Borrower to fully and timely perform any obligation
under this Section 6.07 or the failure of Bank or any Substitute Bank to
fully and timely honor any draft under the Letter of Credit, Construction
Letter of Credit or any Substitute Letter of Credit as the case may be
shall constitute an immediate Event of Default hereunder.
ARTICLE VII
AFFIRMATIVE COVENANTS OF BORROWER
So long as the Loan shall remain unpaid, Borrower will comply with
the following requirements:
Section 7.01. Reporting Requirements. Borrower will deliver, or
cause to be delivered, to Lender each of the following, which shall be in
form and detail acceptable to Lender:
(a) as soon as available, and in any event within 120 days
after the end of each fiscal year of Westerbeke, audited financial
statements of Westerbeke with the audited report of independent
certified public accountants selected by Westerbeke and acceptable to
Lender expressing assurance that, based upon the audit, such
accountants found nothing requiring material modification to the
financial statements to conform with generally accepted accounting
principles, which annual financial statements shall include the
balance sheet of Westerbeke as at the end of such fiscal year and the
related statements of income, retained earnings and cash flows of
Westerbeke for the fiscal year then ended, all in reasonable detail
and prepared in accordance with generally accepted accounting
principles applied on a consistent basis, together with a certificate
of the chief financial officer of Westerbeke stating (i) that such
financial statements have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis, (ii)
whether or not such officer has knowledge of the occurrence of any
Default or Event of Default hereunder and, if so, stating in
reasonable detail the facts with respect thereto, and (iii) all
relevant facts in reasonable detail to evidence, and the computations
as to, whether or not Westerbeke is in compliance with the
requirements set forth in Section 7.11 hereof;
(b) at any time after 150 ▇▇▇▇ ▇▇▇▇▇▇▇ acquires an interest
in the Mortgaged Property, as soon as available, and in any event
within 120 days after the end of each fiscal year of 150 ▇▇▇▇ ▇▇▇▇▇▇▇,
compiled financial statements of 150 ▇▇▇▇ ▇▇▇▇▇▇▇ with the compilation
report of independent certified public accountants selected by 150 ▇▇▇▇
▇▇▇▇▇▇▇ and acceptable to Lender stating that such compilation is
limited to presenting in the form of financial statements information
that is the representation of management and that during such
compilation, the accountants did not become aware of a departure from
generally accepted accounting principles, which annual financial
statements shall include the balance sheet of 150 ▇▇▇▇ ▇▇▇▇▇▇▇ as
at the end of such fiscal year and the related statements of income,
retained earnings and cash flows of 150 ▇▇▇▇ ▇▇▇▇▇▇▇ for the fiscal
year then ended, all in reasonable detail and prepared in accordance
with generally accepted accounting principles applied on a consistent
basis, together with a certificate of the managing partner of 150 ▇▇▇▇
▇▇▇▇▇▇▇ stating (i) that such financial statements have been prepared
in accordance with generally accepted accounting principles applied on
a consistent basis, and (ii) whether or not such [managing partner] has
knowledge of the occurrence of any Default or Event of Default hereunder
and, if so, stating in reasonable detail the facts with respect thereto;
(c) as soon as available and in any event within 90 days after
the end of each fiscal quarter of Westerbeke, an internally prepared
balance sheet and statements of income and retained earnings of
Westerbeke as at the end of and for such month and for the year to
date period then ended, in reasonable detail and stating in comparative
form the figures for the corresponding date and periods in the previous
year, all prepared in accordance with generally accepted accounting
principles applied on a consistent basis and certified by the chief
financial officer of Westerbeke, subject to year-end audit adjustments;
and accompanied by a certificate of such officer stating (i) that such
financial statements have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis, (ii)
whether or not such managing partner has knowledge of the occurrence
of any Default or Event of Default hereunder not theretofore reported
and remedied and, if so, stating in reasonable detail the facts with
respect thereto, and (iii) all relevant facts in reasonable detail to
evidence, and the computations as to, whether or not Westerbeke is in
compliance with the requirements set forth in Section 7.11 hereof;
(d) immediately after the commencement thereof, notice in
writing of all material litigation and of all proceedings before
any governmental or regulatory agency affecting Borrower of the type
described in Article V hereof or which seek a monetary recovery against
Borrower in excess of $250,000;
(e) as promptly as practicable (but in any event not later than
five (5) Business Days) after an officer of Borrower obtains knowledge
of the occurrence of any event that constitutes a Default or an Event
of Default hereunder, notice of such occurrence, together with a
detailed statement by a responsible officer of Borrower of the steps
being taken by Borrower to cure the effect of such Default or Event of
Default;
(f) promptly upon knowledge thereof, notice of any loss or
destruction of or damage to any portion of the Project or to any
Mortgaged Property, or of any material adverse change in the Project
or the Mortgaged Property;
(g) promptly upon their distribution, copies of all financial
statements, reports and proxy statements that Westerbeke shall have
filed with the Securities and Exchange Commission and sent to its
shareholders;
(h) promptly after the amending thereof, copies of any and all
amendments to Westerbeke's charter or 150 ▇▇▇▇ ▇▇▇▇▇▇▇'▇ partnership
agreement;
(i) promptly upon knowledge thereof, notice of any material
violation by Borrower of any law, rule or regulation that has a
material adverse effect on the financial or operating condition of
Borrower;
(j) promptly upon knowledge thereof, notice of any material
adverse change in the financial or operating condition of Borrower;
(k) promptly upon knowledge thereof, notice of any downgrade in
the rating of Bank or any Substitute Bank by LACE Financial Corporation;
and
(l) within 30 days of request by Lender, evidence satisfactory
to Lender that Borrower has complied with the capital expenditure
limitations of Code Section 144(a)(4).
Section 7.02. Books and Records; Inspection and Examination. Borrower
will keep accurate books of record and account itself pertaining to the
Project, all Mortgaged Property, and pertaining to Borrower's business and
financial condition and such other matters as Lender may from time to time
reasonably request in which true and complete entries will be made in
accordance with generally accepted accounting principles consistently applied
and, upon request of Lender, will permit any officer, employee, attorney or
accountant for Lender to audit, review, make extracts from, or copy any and
all corporate and financial books, records and properties of Borrower at
all times during ordinary business hours and following reasonable notice to
Borrower, and to discuss the affairs of Borrower with any of its directors
or partners, as applicable, officers, employees or agents. Borrower will
permit Lender, or its employees, accountants, attorneys or agents, to
examine and copy any or all of its records and to examine and inspect the
Project and the Mortgaged Property at any time during Borrower's business
hours.
Section 7.03. Compliance With Laws. Borrower will (a) comply with the
requirements of applicable laws and regulations, the noncompliance with which
would materially and adversely affect its business or its financial condition
and (b) Borrower will use and keep Mortgaged Property, and will require that
others use and keep Mortgaged Property, only for lawful purposes, without
violation of any federal, state or local law, statute or ordinance.
Borrower shall secure all permits and licenses, if any, necessary for the
installation and operation of the Project. Borrower shall comply in all
respects (including, without limitation, with respect to the use,
maintenance and operation of each portion of the Project) with all laws of
the jurisdictions in which its operations involving any component of the
Project may extend and of any legislative, executive, administrative or
judicial body exercising any power or jurisdiction over the items of the
Project, any Mortgaged Property, or its interest or rights under this
Agreement, the non-compliance with which would have a material adverse
effect on the financial or operating condition of Borrower.
Section 7.04. Environmental Compliance. Borrower shall promptly comply
with all statutes, regulations and ordinances, and with all orders, decrees or
judgments of governmental authorities or courts having jurisdiction,
relating to the use, collection, treatment, disposal, storage, control,
removal or cleanup of Hazardous Waste or Materials in, on or under the
Project, any Mortgaged Property or any adjacent property, or incorporated
in any Improvements, at Borrower's expense. In the event that Lender at any
time has a reasonable belief that the Project is not free of all Hazardous
Waste or Materials or that Borrower has violated any applicable
Environmental Laws with respect to the Project or any Mortgaged Property,
then immediately, upon request by Lender, Borrower shall obtain and furnish
to Lender, at Borrower's sole cost and expense, an environmental audit and
inspection of the Project and any Mortgaged Property from an expert
satisfactory to Lender. In the event that Borrower fails to immediately
obtain such audit or inspection, Lender or its agents may perform or obtain
such audit or inspection at Borrower's sole cost and expense. Lender may,
but is not obligated to, enter upon the Project and any Mortgaged Property
and take such actions and incur such costs and expenses to effect such
compliance as it deems advisable to protect its interest in the Project and
the Mortgaged Property; and whether or not Borrower has actual knowledge of
the existence of hazardous waste or materials on the Project, any Mortgaged
Property or any adjacent property as of the date hereof, Borrower shall
reimburse Lender as provided herein for the full amount of all costs and
expenses incurred by Lender prior to Lender acquiring title to the Project
through foreclosure or acceptance of a deed in lieu of foreclosure, in
connection with such compliance activities. Neither this provision nor any
provision herein or in the Mortgage, the Assignment or related documents
shall operate to put Lender in the position of an owner of the Project or
Mortgaged Property prior to any acquisition of the Project or Mortgaged
Property by Lender. The rights granted to Lender herein and in the
Mortgage, the Assignment or related documents are granted solely for the
protection of Lender's lien and security interest covering the Mortgaged
Property and do not grant to Lender the right to control Borrower's
actions, decisions or policies regarding hazardous waste or materials.
Section 7.05. Payment of Taxes and Other Claims. Borrower will pay or
discharge, when due, (a) all taxes, assessments and governmental charges
levied or imposed upon the Mortgaged Property or upon or against the creation,
perfection or continuance of the security interest created pursuant to this
Agreement, prior to the date on which penalties attach thereto, (b) all
federal, state and local taxes required to be withheld by it and which
creates a lien on the Mortgaged Property, and (c) all lawful claims for
labor, materials and supplies which, if unpaid, might by law become a lien
or charge upon the Mortgaged Property; provided, that Borrower shall not be
required to pay any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings. Borrower will pay, as the same respectively come due, all
taxes and governmental charges of any kind whatsoever that may at any time
be lawfully assessed or levied against or with respect to Borrower's
ownership of the Mortgaged Property, as well as all gas, water, steam,
electricity, heat, power, telephone, utility and other charges incurred in
the operation, maintenance, use, occupancy and upkeep of the Mortgaged
Property.
Section 7.06. Preservation and Maintenance of Mortgaged Property,
Leaseholds. Borrower (a) shall, at its own expense, maintain, preserve and
keep the Mortgaged Property, in good repair, working order and condition, and
shall from time to time make all repairs and replacements necessary to keep
the Mortgaged Property, in such condition, and in compliance with state and
federal laws, ordinary wear and tear excepted, (b) shall maintain the
Mortgaged Property, in a condition suitable for certification by the
manufacturer thereof (if certification is available) and in conformance
with all manufacturer's recommended maintenance requirements, (c) shall not
commit waste or permit impairment or deterioration of the Mortgaged
Property, (d) shall not abandon the Mortgaged Property, (e) shall restore
or repair promptly and in a good and workmanlike manner all or any part of
the Mortgaged Property, to the equivalent of its original condition, or
such other condition as Lender may approve in writing, in the event of any
damage, injury or loss thereto, whether or not insurance proceeds are
available to cover in whole or in part the costs of such restoration or
repair, (f) shall keep all improvements, fixtures, equipment, machinery and
appliances on the Mortgaged Property in good repair and shall replace
fixtures, equipment, machinery and appliances on the Mortgaged Property
when necessary to keep such items in good repair, (g) shall comply with all
laws, ordinances, regulations and requirements of any governmental body
applicable to the Mortgaged Property, (h) if all or part of the Mortgaged
Property is for rent or lease, other than a lease to Westerbeke or 150 ▇▇▇▇
▇▇▇▇▇▇▇, then Lender, at its option after the occurrence of an Event of
Default, may require Borrower to provide for professional management of the
Project or any Mortgaged Property by a property manager satisfactory to
Lender pursuant to a contract approved by Lender in writing, unless such
requirement shall be waived by Lender in writing, (i) if all or any part of
the Mortgaged Property is for rent or lease other than to lease to
Westerbeke or 150 ▇▇▇▇ ▇▇▇▇▇▇▇, shall generally operate and maintain the
Mortgaged Property in a manner to ensure maximum rentals, and (j) shall
give notice in writing to Lender of and, unless otherwise directed in
writing by Lender, appear in and defend any action or proceeding purporting
to affect the Mortgaged Property, the security of this Agreement or the
rights or powers of Lender hereunder. Neither Borrower nor any tenant or
other person shall remove, demolish or alter any improvement now existing
or hereafter erected on the Mortgaged Property or any fixture or appliance
in or on the Mortgaged Property except when incident to the replacement of
fixtures and appliances with items of like kind. In the event that any
parts or accessories forming part of any item or items of Mortgaged
Property, become worn out, lost, destroyed, damaged beyond repair or
otherwise rendered unfit for use, Borrower, at its own expense and
expeditiously, will replace or cause the replacement of such parts or
accessories by replacement parts or accessories free and clear of all liens
and encumbrances and with a value and utility at least equal to that of the
parts or accessories being replaced (assuming that such replaced parts and
accessories were otherwise in good working order and repair). All such
replacement parts and accessories shall be deemed to be incorporated
immediately into and to constitute an integral portion of the Mortgaged
Property, and, as such, shall be subject to the terms of this Agreement.
Neither Lender nor Issuer shall have any responsibility in any of these
matters, or for the making of improvements or additions to the Project or
the Mortgaged Property. Borrower will defend the Project and Mortgaged
Property, against all claims or demands of all persons (other than Lender)
claiming the Project, the Mortgaged Property or any interest therein.
Borrower represents, warrants and covenants that the Project and the
Mortgaged Property is and shall be in compliance with the Americans with
Disabilities Act of 1990 and all of the regulations promulgated thereunder,
as the same may be amended from time to time.
Section 7.07. Insurance. Borrower shall obtain and maintain the
following types of insurance upon and relating to the Project and the
Mortgaged Property:
(a) "All Risk" property and fire insurance (with extended
coverage endorsement including malicious mischief and vandalism) in
an amount not less than the full replacement value of the Mortgaged
Property (with a deductible not to exceed $5,000 and with co-
insurance limited to a maximum of 10% of the amount of the policy),
naming Lender under a lender's loss payee endorsement (form 438BFU or
equivalent) and including agreed amount, inflation guard, replacement
cost and waiver of subrogation endorsements;
(b) Comprehensive general liability insurance in an amount not
less than $2,000,000.00 insuring against personal injury, death and
property damage and naming Lender as additional insured;
(c) If required by the laws of the Commonwealth, Borrower
shall carry workers' compensation insurance covering all employees
on, in, near or about the Project of the Mortgaged Property and upon
request, shall furnish to Lender certificates evidencing such
coverage; and
(d) Such other types of insurance or endorsements to existing
insurance as may be reasonably required from time to time by Lender.
Upon each reasonable request of Lender, Borrower shall increase the
coverages under any of the insurance policies required to be maintained
hereunder or otherwise modify such policies in accordance with Lender's
reasonable request. All of the insurance policies required hereunder shall
be issued by corporate insurers licensed to do business in the state in
which the Mortgaged Property, is located and rated A:9 or better by A.M.
Best Company, and shall be in form acceptable to Lender. If and to the
extent that the Mortgaged Property is located within an area that has been
or is hereafter designated or identified as an area having special flood
hazards by the Department of Housing and Urban Development or such other
official as shall from time to time be authorized by federal or state law
to make such designation pursuant to any national or state program of flood
insurance, Borrower shall carry flood insurance with respect to the
Mortgaged Property in amounts not less than the maximum limit of coverage
then available with respect to the Mortgaged Property or the amount of the
Indebtedness, whichever is less. Certificates of all insurance required to
be maintained hereunder shall be delivered to Lender, along with evidence
of payment in full of all premiums required thereunder, contemporaneously
with Borrower's execution of this Agreement. All such certificates shall be
in form acceptable to Lender and shall require the insurance company to
give to Lender at least 30 days' prior written notice before canceling the
policy for any reason or materially amending it. Certificates evidencing
all renewal and substitute policies of insurance shall be delivered to
Lender, along with evidence of the payment in full of all premiums required
thereunder, at least 15 days before termination of the policies being
renewed or substituted. If any loss shall occur at any time when Borrower
shall be in default hereunder, Lender shall be entitled to the benefit of
all insurance policies held or maintained by Borrower, to the same extent
as if same had been made payable to Lender, and upon foreclosure hereunder,
Lender shall become the owner thereof. Lender shall have the right, but not
the obligation, to make premium payments, at Borrower's expense, to prevent
any cancellation, endorsement, alteration or reissuance of any policy of
insurance maintained by Borrower, and such payments shall be accepted by
the insurer to prevent same.
Section 7.08. Preservation of Corporate Existence. Westerbeke will
preserve and maintain its corporate existence and all of its rights,
privileges and franchises necessary or desirable in the normal conduct of
its business; and shall conduct its business in an orderly, efficient and
regular manner.
Section 7.09. Preservation of Limited Liability Partnership
Existence. 150 ▇▇▇▇ ▇▇▇▇▇▇▇ will preserve and maintain its registered
limited liability partnership existence and all of its rights, privileges
and franchises necessary or desirable in the normal conduct of its
business; and shall conduct its business in an orderly, efficient and
regular manner.
Section 7.10. Performance by Lender. If Borrower at any time fails
to perform or observe any of the covenants or agreements contained in this
Agreement, or any other related document, or if Westerbeke fails to perform
or observe and of the covenants or agreements in the Mortgage or the
Assignment or any other related document, and if such failure shall
continue for a period of ten (10) calendar days after Lender gives Borrower
written notice thereof (or in the case of the agreements contained in
Sections 7.06 and 7.07 hereof, immediately upon the occurrence of such
failure, without notice or lapse of time), Lender may, but need not perform
or observe such covenant on behalf and in the name, place and stead of
Borrower (or, at Lender's option, in Lender's name) and may, but need not,
take any and all other actions which Lender may reasonably deem necessary
to cure or correct such failure (including, without limitation, the payment
of taxes, the satisfaction of security interests, liens or encumbrances,
the performance of obligations owed to account debtors or other obligors,
the procurement and maintenance of insurance, the execution of assignments,
security agreements and financing statements, and the endorsement of
instruments); and Borrower shall thereupon pay to Lender on demand the
amount of all monies expended and all costs and expenses (including
reasonable attorney's fees and legal expenses) incurred by Lender in
connection with or as a result of the performance or observance of such
agreements or the taking of such action by Lender, together with interest
thereon from the date expended or incurred at the lesser of 18% per annum
or the highest rate permitted by law. To facilitate the performance or
observance by Lender of such covenants of Borrower, Borrower hereby
irrevocably appoints Lender, or the delegate of Lender, acting alone, as
the attorney in fact of Borrower with the right (but not the duty) from
time to time to create, prepare, complete, execute, deliver, endorse or
file in the name and on behalf of Borrower any and all instruments,
documents, assignments, security agreements, financing statements,
applications for insurance and other agreements and writings required to be
obtained, executed, delivered or endorsed by Borrower under this Agreement.
Section 7.11. Financial Covenants. Until the Loan has been paid in
full, Westerbeke covenants and agrees as follows:
(a) To maintain as of the end of each fiscal quarter Working
Capital (as defined in the Bank Agreement) of not less than
$4,500,000;
(b) To maintain as of the end of each fiscal quarter Consolidated
Tangible Net Worth (as defined in the Bank Agreement) of not less
than $8,500,000 plus 40% of net income earned during the previous
fiscal quarter on a cumulative basis;
(c) To maintain as of the end of each fiscal year a Debt Service
Coverage Ratio (as defined in the Bank Agreement) of not less than
4.00 to 1.00; and
(d) To maintain as of the end of each fiscal quarter a Leverage
Ratio (as defined in the Bank Agreement) of not more than 1.00 to
1.00.
ARTICLE VIII.
NEGATIVE COVENANTS OF BORROWER
So long as the Loan shall remain unpaid, Borrower agrees that:
Section 8.01. Liens. Borrower will not to create, incur or suffer to
exist any mortgage, deed of trust, pledge, lien, security interest,
assignment or transfer upon or of any of the Mortgaged Property, except for
the security interest created pursuant to this Agreement, the liens created
pursuant to the Mortgage and the Permitted Exceptions.
Section 8.02. Sale of Assets. Borrower will not sell, lease, assign,
transfer or otherwise dispose of all or substantially all of its assets or
any of the Mortgaged Property or the Project, or any interest therein
(whether in one transaction or in a series of transactions); provided,
however, that Westerbeke and 150 ▇▇▇▇ ▇▇▇▇▇▇▇ may transfer interests in the
Mortgaged Property between themselves from time to time pursuant to the
terms of the Mortgage.
Section 8.03. Consolidation and Merger. Borrower will not
consolidate with or merge into any person, or permit any other person to
merge into it, or acquire (in a transaction analogous in purpose or effect
to a consolidation or merger) all or substantially all the assets of any
other person.
Section 8.04. Accounting. Borrower will not adopt, permit or consent
to any material change in accounting principles other than as required by
generally accepted accounting principles. Borrower will not adopt, permit
or consent to any change in its fiscal year.
Section 8.05. Other Defaults. Borrower will not permit any breach,
default or event of default to occur under any note, loan agreement,
indenture, lease, mortgage, contract for deed, security agreement or other
contractual obligation binding upon Borrower and evidencing or securing
indebtedness in a principal amount in excess of $250,000 or any judgment,
decree, order or determination in an amount in excess of $250,000
applicable to Borrower.
Section 8.06. Place of Business. Borrower will not permit any of the
Mortgaged Property, or any records pertaining to the Mortgaged Property, to
be located in any state or area in which, in the event of such location, a
financing statement covering such Mortgaged Property would be required to
be, but has not in fact been, filed in order to perfect the security
interest created pursuant to this Agreement until such financing statement
has been so filed.
Section 8.07. Modifications and Substitutions. (a) Borrower will not
make any material alterations, modifications or additions to the Mortgaged
Property, other than in connection with the acquisition and construction of
the Project, which cannot be removed without materially damaging the
functional capabilities or economic value of the Mortgaged Property. Upon
return of the Mortgaged Property, to Lender and at the request of Lender,
Borrower, at its sole cost and expense, will remove all alterations,
modifications and additions and repair the Mortgaged Property as necessary
to return the Mortgaged Property to the condition in which it was
furnished, ordinary wear and tear and permitted modifications excepted.
(b) Notwithstanding the provisions of subparagraph (a) of this
section, Borrower may, with the prior written consent of Lender, substitute
for parts, elements, portions or all of the Mortgaged Property other parts,
elements, portions, equipment or facilities; provided, however, that any
substitutions made pursuant to Borrower's obligations to make repairs
referenced under any provision of this Agreement shall not require such
prior written consent. Borrower shall provide such documents or assurances
as Lender may reasonably request to maintain or confirm the security
interest assigned to Lender in the Project as so modified or substituted.
Section 8.08. Use of the Mortgaged Property. Unless required by
applicable law or unless Lender has otherwise agreed in writing, Borrower
shall not allow changes in the use for which all or any part of the
Mortgaged Property was intended at the time this Agreement was executed.
Borrower shall not, without Lender's prior written consent, (a) initiate or
acquiesce in a change in the zoning classification (including any variance
under any existing zoning ordinance applicable to the Mortgaged Property),
(b) permit the use of the Mortgaged Property to become a non-conforming use
under applicable zoning ordinances, (c) file any subdivision or parcel map
affecting the Mortgaged Property, or (d) amend, modify or consent to any
easement or covenants, conditions and restrictions pertaining to the
Mortgaged Property except as for Permitted Exceptions.
Section 8.09. Leasing. Westerbeke will not lease the Premises without
Lender's prior written approval. Notwithstanding the foregoing, Westerbeke
shall be permitted, without Lernder's prior approval, to transfer title to
and lease the Premises from 150 ▇▇▇▇ ▇▇▇▇▇▇▇ pursuant to the terms of the
Mortgage, so long as the term of any such lease is at least equal to the term
of the Loan. Westerbeke agrees to cause all tenants to execute a subordination
and estoppel agreement in form and substance acceptable to Lender.
ARTICLE IX.
DAMAGE AND DESTRUCTION; CONDEMNATION;
USE OF NET PROCEEDS
Section 9.01. Damage and Destruction. Westerbeke shall provide a
complete written report to Lender immediately upon any loss, theft, damage or
destruction of any portion of the Mortgaged Property. If all or any part of
the Mortgaged Property is lost, stolen, destroyed or damaged beyond repair
("Damaged Property"), Borrower shall as soon as practicable after such event
either (a) replace the same at Westerbeke's sole cost and expense with
property having substantially similar specifications and of equal or greater
value to the Damaged Property immediately prior to the time of the loss
occurrence, such replacement equipment to be subject to Lender's approval,
whereupon such replacement equipment shall be substituted in this Agreement
and the other related documents by appropriate endorsement or amendment; or
(b) pay the applicable Prepayment Amount of the Damaged Property.
Westerbeke shall notify Lender of which course of action it will take
within fifteen (15) calendar days after the loss occurrence. If, within
forty-five (45) calendar days of the loss occurrence, (a) Westerbeke fails
to notify Lender, (b) Westerbeke and Lender fail to execute an amendment to
this Agreement to delete the Damaged Property and add the replacement
equipment, or (c) Westerbeke fails to pay the applicable Prepayment Amount,
then Lender may, at its sole discretion, declare the applicable Prepayment
Amount to be immediately due and payable, and Westerbeke shall be required
to pay the same. The Net Proceeds of insurance with respect to the Damaged
Property shall be made available by Lender to be applied to discharge
Westerbeke's obligation under this Section and as provided in Section 5 of
the Mortgage. The payment of the Prepayment Amount and the termination of
Lender's interest in the Damaged Property is subject to the terms of
Section 2.08 hereof. For purposes of this Section, the term Net Proceeds
shall mean the amount remaining from the gross proceeds of any insurance
claim after deducting all expenses (including reasonable attorney's fees)
incurred in the collection of such claim or award.
Section 9.02. Condemnation. If the Mortgaged Property, or any part
thereof, shall be condemned for any reason, including without limitation fire
or earthquake damage, or otherwise taken for public or quasi-public use under
the power of eminent domain, or be transferred in lieu thereof, all damages
or other amounts awarded for the taking of, or injury to, the Mortgaged
Property shall be paid to Lender as provided in Section 11 of the Mortgage.
The Payment of the Prepayment Amount and the termination of Lender's
interest in the condemned Mortgaged Property is subject to the terms of
Section 2.08 hereof. For purposes of this Section, the term "Net Proceeds"
shall mean the amount remaining from the gross proceeds of the condemnation
award after deducting all expenses (including reasonable attorney's fees)
incurred in the collection of the award.
ARTICLE X.
ASSIGNMENT AND SELLING
Section 10.01. Assignment by Lender. This Agreement, and the
obligations of Borrower to make payments hereunder, may be assigned and
reassigned in whole or in part to one or more assignees or subassignees by
Lender at any time subsequent to its execution, without the necessity of
obtaining the consent of Issuer or Borrower, provided, however, that no
such assignment or reassignment shall be effective unless and until (a)
Issuer and Borrower shall have received notice of the assignment or
reassignment disclosing the name and address of the assignee or
subassignee, and (b) in the event that such assignment or reassignment is
made to a bank or trust company as trustee for holders of certificates
representing interests in this Agreement, such bank or trust company agrees
to maintain, or cause to be maintained, a book-entry system by which a
record of the names and addresses of such holders as of any particular time
is kept and agrees, upon request of Issuer or Borrower, to furnish such
information to Issuer or Borrower. Upon receipt of notice of assignment,
Borrower will reflect in a book-entry the assignee designated in such
notice of assignment, and shall agree to make all payments to the assignee
designated in the notice of assignment, notwithstanding any claim, defense,
setoff or counterclaim whatsoever (whether arising from a breach of this
Agreement or otherwise) that Issuer and Borrower may from time to time have
against Lender or the assignee. Issuer and Borrower agree to execute all
documents, including notices of assignment and chattel mortgages or
financing statements, which may be reasonably requested by Lender or its
assignee to protect their interest in the Mortgaged Property and in this
Agreement.
Section 10.02. No Sale or Assignment by Borrower. This Agreement and
the interest of Westerbeke in the Mortgaged Property may not be sold,
assumed, assigned or encumbered by Borrower except for the Permitted
Exceptions and except as provided in Sections 8.02 and 8.10.
ARTICLE XI.
EVENTS OF DEFAULT AND REMEDIES
Section 11.01. Events of Default. The following constitute "Events
of Default" under this Agreement:
(a) failure by Borrower to pay to Lender, as assignee of
Issuer, when due any Loan Payment or to pay any other payment
required to be paid hereunder and the continuation of such failure
for a period of ten (10) days;
(b) failure by Borrower to maintain insurance on the Mortgaged
Property in accordance with Section 7.07 hereof;
(c) the occurrence of an Event of Default under the Equipment
Loan Agreement;
(d) failure by Borrower or Issuer to observe and perform any
other covenant, condition or agreement of Borrower or Issuer,
respectively, contained herein, in the Escrow Agreement, the
Mortgage, the Hazardous Substances Agreement, the Assignment, the
Statement as to Tax Exempt Status, the Arbitrage Certificate or in
any other document or agreement executed in connection herewith on
its part to be observed or performed for a period of thirty (30) days
after written notice is given to Borrower or Issuer, as the case may
be, specifying such failure and requesting that it be remedied;
provided, however, that, if the failure stated in such notice cannot
be corrected within such 30 day period, Lender will not unreasonably
withhold its consent to an extension of such time if corrective
action is instituted by Borrower or Issuer, as the case may be,
within the applicable period and diligently pursued until the default
is corrected;
(e) initiation by Issuer of a proceeding under any federal or
state bankruptcy or insolvency law seeking relief under such laws
concerning the indebtedness of Issuer;
(f) Borrower shall be or become insolvent, or admit in writing
its inability to pay its debts generally as they mature, or make an
assignment for the benefit of creditors; or Borrower or Guarantor
shall apply for or consent to the appointment of any receiver,
trustee or similar officer for it or for all or any substantial part
of its property; or such receiver, trustee or similar officer shall
be appointed without the application or consent of such Borrower or
Borrower shall institute (by petition, application, answer, consent
or otherwise) any bankruptcy, insolvency, reorganization,
arrangement, readjustment of debt, dissolution, liquidation or
similar proceeding relating to it under the laws of any jurisdiction;
or any such proceeding shall be instituted (by petition, application
or otherwise) against Borrower and not discharged within sixty (60)
days; or any judgment, writ, warrant of attachment or execution or
similar process shall be issued or levied against a substantial part
of the property of Borrower;
(g) determination by Lender that any representation or
warranty made by Borrower or Issuer herein, in the Statement as to
Tax Exempt Status, the Mortgage, the Assignment, the Hazardous
Substances Agreement, Arbitrage Certificate or in any other document
executed in connection herewith was untrue in any material respect
when made;
(h) the occurrence of a default or an event of default under
any instrument, agreement or other document evidencing, relating to
or securing any indebtedness or other monetary obligation of Borrower
in excess of $250,000;
(i) the occurrence of an Event of Default under the Mortgage,
the Assignment or any other agreement between or among the Lender or
any of its affiliates and Borrower;
(j) this Agreement, or any portion hereof, is determined by a
court of competent jurisdiction to be invalid or unenforceable
against the Issuer;
(k) failure of Borrower to prepay the Loan within 180 days
after an Event of Taxability has occurred;
(l) failure by Borrower to fully and timely perform any of its
obligations under Section 6.07 of this Agreement or the failure of
Bank or any Substitute Bank to fully and timely honor any draft under
the Letter of Credit, Construction Letter of Credit or any Substitute
Letter of Credit as the case may be;
(m) failure to deliver a Certificate of Acceptance for all of
the Project by April 15, 2001;
(n) failure to comply with the conditions contained in
Section 3.02 hereof by April 15, 2001; or
(o) failure of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇., his spouse, his
children, his grandchildren, his executors and administrators and
trusts established for his or their benefit to own at least 51% of
the common stock of Westerbeke or the ownership interest of 150 ▇▇▇▇
▇▇▇▇▇▇▇.
Section 11.02. Remedies on Default. Whenever any Event of Default
shall have occurred and be continuing, Lender, as assignee of Issuer, shall
have the right, at its sole option without any further demand or notice, to
take any one or any combination of the following remedial steps and which
are otherwise accorded to Lender, as assignee of Issuer, by applicable law:
(a) by notice to Issuer and Borrower, declare the entire
unpaid principal amount of the Loan then outstanding, all interest
accrued and unpaid thereon and all amounts payable under this
Agreement to be forthwith due and payable, whereupon the Loan, all
such accrued interest and all such amounts shall become and be
forthwith due and payable, without presentment, notice of dishonor,
protest or further notice of any kind, all of which are hereby
expressly waived by Borrower;
(b) take possession of the Mortgaged Property, wherever situated,
without any court order or other process of law and without liability
for entering the premises, and lease, sublease or make other
disposition of the Mortgaged Property for use over a term in a
commercially reasonable manner, all for the account of Lender, provided
that Borrower shall remain directly liable for the deficiency, if any,
between the rent or other amounts paid by a lessee or sublessee of the
Mortgaged Property pursuant to such lease or sublease during the same
period of time, after deducting all costs and expenses, including
reasonable attorney's fees and expenses, incurred with respect to the
recovery, repair and storage of the Mortgaged Property during such
period of time;
(c) take possession of the Mortgaged Property wherever
situated, without any court order or other process of law and without
liability for entering the Premises, and sell the Mortgaged Property
in a commercially reasonable manner. All proceeds from such sale shall
be applied in the following manner:
FIRST, to pay all proper and reasonable costs and
expenses associated with the recovery, repair, storage and sale
of the Mortgaged Property including reasonable attorney's fees
and expenses;
SECOND, to pay (i) Lender the amount of all unpaid Loan
Payments or other obligations (whether direct or indirect owed
by Borrower to Lender), if any, which are then due and owing,
together with interest and late charges thereon, (ii) Lender
the then applicable Prepayment Amount (taking into account the
payment of past-due Loan Payments as aforesaid), plus a pro
rata allocation of interest, at the rate utilized to calculate
the Loan Payments, from the next preceding due date of a Loan
Payment until the date of payment by the buyer, and (iii) any
other amounts due hereunder, including indemnity payments,
taxes, charges, reimbursement of any advances and other amounts
payable to Lender or Issuer hereunder; and
THIRD, to pay the remainder of the sale proceeds,
purchase moneys or other amounts paid by a buyer of the
Mortgaged Property to Westerbeke;
(d) exercise all rights and remedies under the Mortgage and
the Assignment;
(e) proceed by appropriate court action to enforce specific
performance by Borrower of the applicable covenants of this Agreement
or to recover for the breach thereof, including the payment of all
amounts due from Borrower. Borrower shall pay or repay to Lender or
Issuer all costs of such action or court action, including, without
limitation, reasonable attorney's fees;
(f) take whatever action at law or in equity may appear
necessary or desirable to enforce its rights with respect to the
Mortgaged Property. Borrower shall pay or repay to Lender or Issuer
all costs of such action or court action, including, without
limitation, reasonable attorney's fees; and
(g) with or without notice to Borrower, submit one or more
drafts under the Letter of Credit, Construction Letter of Credit or
any Substitute Letter of Credit for any amounts due hereunder.
Notwithstanding any other remedy exercised hereunder, Borrower shall
remain obligated to pay to Lender any unpaid portion of the Prepayment
Amount.
Section 11.03. Reserved.
Section 11.04. No Remedy Exclusive. No remedy herein conferred upon
or reserved to Lender or Issuer is intended to be exclusive and every such
remedy shall be cumulative and shall be in addition to every other remedy
given under this Agreement or now or hereafter existing at law or in
equity. No delay or omission to exercise any right or power accruing upon
any Event of Default shall impair any such right or power or shall be
construed to be a waiver thereof, but any such right or power may be
exercised from time to time and as often as may be deemed expedient. In
order to entitle Lender or Issuer to exercise any remedy reserved to it in
this Article, it shall not be necessary to give any notice other than such
notice as may be required by this Article. All remedies herein conferred
upon or reserved to Lender or Issuer shall survive the termination of this
Agreement.
Section 11.05. Late Charge. Any Loan Payment not paid by Borrower
within ten (10) days of on the due date thereof shall, to the extent
permissible by law, bear a late charge equal to the lesser of five cents
($.05) per dollar of the delinquent amount or the lawful maximum, and
Borrower shall be obligated to pay the same immediately upon receipt of
Lender's written invoice therefor.
ARTICLE XII.
MISCELLANEOUS
Section 12.01. Costs and Expenses of Lender. Upon the occurrence of
an Event of Default, Borrower shall pay to Lender, in addition to the Loan
Payments payable by Borrower hereunder, such amounts in each year as shall
be required by Lender in payment of any reasonable costs and expenses
incurred by Lender after and during the continuance of an Event of Default
in connection with the performance or enforcement of this Agreement,
including but not limited to payment of all reasonable fees, costs and
expenses incurred in connection with the Mortgaged Property and the Loan
(including, without limitation, reasonable attorneys' fees and
disbursements, fees of auditors, insurance premiums not otherwise paid
hereunder and all other direct and necessary administrative costs of Lender
or charges required to be paid by it in order to enforce its rights under,
this Agreement, but not including general administrative or overhead
expenses of Lender). Such costs and expenses shall be billed to Borrower by
Lender from time to time, together with a statement certifying that the
amount so billed has been paid by Lender for one or more of the items above
described, or that such amount is then payable by Lender for such items.
Amounts so billed shall be due and payable by Borrower within thirty (30)
days after receipt of the ▇▇▇▇ by Borrower.
Section 12.02. Disclaimer of Warranties. LENDER AND ISSUER MAKE NO
WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE,
DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR
FITNESS FOR USE OF THE PROJECT OR OF THE MORTGAGED PROPERTY OR ANY OTHER
WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT THERETO. In no
event shall Lender or Issuer be liable for any loss or damage in connection
with or arising out of this Agreement, the Project or the existence,
furnishing, functioning or Borrower's use of any item or products or
services provided for in this Agreement.
Section 12.03. Notices. All notices, certificates, requests, demands
and other communications provided for hereunder or under the Escrow
Agreement, the Statement as to Tax Exempt Status or Arbitrage Certificate
shall be in writing and shall be (a) personally delivered, (b) sent by
first class United States mail, (c) sent by overnight courier of national
reputation, or (d) transmitted by telecopy, in each case addressed to the
party to whom notice is being given at its address as set forth above and,
if telecopied, transmitted to that party at its telecopier number set forth
above or, as to each party, at such other address or telecopier number as
may hereafter be designated by such party in a written notice to the other
party complying as to delivery with the terms of this Section. All such
notices, requests, demands and other communications shall be deemed to have
been given on (a) the date received if personally delivered, (b) when
deposited in the mail if delivered by mail, (c) the date sent if sent by
overnight courier, or (d) the date of transmission if delivered by
telecopy. If notice to Westerbeke of any intended disposition of the
Mortgaged Property or any other intended action is required by law in a
particular instance, such notice shall be deemed commercially reasonable if
given (in the manner specified in this Section) at least ten (10) calendar
days prior to the date of intended disposition or other action.
Section 12.04. Further Assurance and Corrective Instruments. Issuer
and Borrower hereby agree that they will, from time to time, execute,
acknowledge and deliver, or cause to be executed, acknowledged and
delivered, such further acts, instruments, conveyances, transfers and
assurances, as Lender reasonably deems necessary or advisable for the
implementation, correction, confirmation or perfection of this Agreement,
the Mortgage, the Assignment, the Hazardous Substances Agreement or the
Escrow Agreement or the Statement as to Tax Exempt Status, the Arbitrage
Certificate and any rights of Lender hereunder or thereunder.
Section 12.05. Binding Effect; Time of the Essence. This Agreement
shall inure to the benefit of and shall be binding upon Lender, Issuer,
Borrower and their respective successors and assigns. Time is of the
essence.
Section 12.06. Severability. In the event any provision of this
Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any
other provision hereof.
Section 12.07. Amendments. To the extent permitted by law, the terms
of this Agreement shall not be waived, altered, modified, supplemented or
amended in any manner whatsoever except by written instrument signed by the
parties hereto, and then such waiver, consent, modification or change shall
be effective only in the specific instance and for the specific purpose
given.
Section 12.08. Execution in Counterparts TC . This Agreement may
be executed in several counterparts, each of which shall be an original and
all of which shall constitute one and the same instrument, and any of the
parties hereto may execute this Agreement by signing any such counterpart,
provided that only the original marked "Original: 1 of 6" on the execution
page hereof shall constitute the Bond under the Act and Chattel paper under
the UCC.
Section 12.09. Applicable Law. This Agreement shall be governed by
and construed in accordance with the laws of the Commonwealth.
Section 12.10. Captions. The captions or headings in this Agreement
are for convenience only and in no way define, limit or describe the scope
or intent of any provisions or sections of this Agreement.
Section 12.11. Entire Agreement. This Agreement, the Mortgage, the
Assignment, the Hazardous Substances Agreement, the Statement as to Tax
Exempt Status, the Arbitrage Certificate, the Escrow Agreement and the
exhibits hereto and thereto constitute the entire agreement among Lender,
Issuer, Borrower and Escrow Agent. There are no understandings, agreements,
representations or warranties, express or implied, not specified herein or
in such documents regarding this Agreement or the Project financed hereby.
Section 12.12. Usury. It is the intention of the parties hereto to
comply with any applicable usury laws; accordingly, it is agreed that,
notwithstanding any provisions to the contrary in this Agreement, in no
event shall this Agreement require the payment or permit the collection of
interest or any amount in the nature of interest or fees in excess of the
maximum permitted by applicable law.
Section 12.13. Waiver of Jury Trial. LENDER, ISSUER AND BORROWER
HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS
AGREEMENT, ANY OF THE RELATED DOCUMENTS, ANY DEALINGS AMONG LENDER, ISSUER
OR BORROWER RELATING TO THE SUBJECT MATTER OF THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT OR ANY RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP THAT
IS BEING ESTABLISHED AMONG LENDER, ISSUER AND BORROWER. THE SCOPE OF THIS
WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY
BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY
CLAIMS). THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, ANY
RELATED DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY RELATED TRANSACTIONS. IN
THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT
TO A TRIAL BY THE COURT.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
in their respective corporate names by their duly authorized officers, all
as of the date first written above.
Lender: GE CAPITAL PUBLIC FINANCE, INC.
By: /s/ ▇▇▇ ▇▇▇▇▇▇
------------------------------------
Vice President
Issuer: MASSACHUSETTS DEVELOPMENT
FINANCE AGENCY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
General Counsel
Borrower: WESTERBEKE CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Assistant Secretary
Borrower: 150 ▇▇▇▇ ▇▇▇▇▇▇▇, LLP
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇.
----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇.
Partner
Original: __ of 6.
Exhibit A to Loan Agreement
SCHEDULE OF LOAN PAYMENTS
This Schedule is delivered pursuant to the Loan Agreement (Real
Estate), dated as of April 24, 2000 (the "Agreement"), among GE Capital
Public Finance, Inc., as Lender ("Lender"), the Massachusetts Development
Finance Agency, as Issuer ("Issuer"), Westerbeke Corporation ("Westerbeke")
and 150 ▇▇▇▇ ▇▇▇▇▇▇▇, LLP (150 ▇▇▇▇ ▇▇▇▇▇▇▇, and collectively with
Westerbeke, the "Borrower"). All of the provisions of the Agreement are
incorporated herein by reference and capitalized terms used herein shall
have the meanings assigned to them in the Agreement.
NEITHER THIS EXHIBIT NOR THE AGREEMENT CONSTITUTES AN INDEBTEDNESS OF
THE COMMONWEALTH OF MASSACHUSETTS OR OF THE ISSUER EXCEPT TO THE EXTENT
PERMITTED BY MASSACHUSETTS GENERAL LAWS, CHAPTER 23G, AS AMENDED. ALL
AMOUNTS OWED HEREUNDER AND UNDER THE AGREEMENT ARE PAYABLE ONLY FROM THE
SOURCES EXPRESSLY PROVIDED IN THE AGREEMENT, AND NO PUBLIC FUNDS MAY BE
USED FOR THAT PURPOSE.
1. The Project will be located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ in the City of
Taunton, Massachusetts.
2. The Loan Payment dates, the Loan Payment amounts, the principal and
interest components of each Loan Payment, and the Prepayment Amounts are as
follows:
See Schedule I attached hereto.
SCHEDULE I
Exhibit B to Loan Agreement
FORM OF CERTIFICATE OF ACCEPTANCE
We, the undersigned, hereby certify that we are the duly qualified
and acting _______________ of Westerbeke Corporation ("Westerbeke") and 150
▇▇▇▇ ▇▇▇▇▇▇▇, LLP (collectively the "Borrower") and, with respect to the
Loan Agreement (Real Estate) dated as of April 24, 2000 (the "Agreement")
by and among Borrower, GE Capital Public Finance, Inc. ("Lender") and
Massachusetts Development Finance Agency ("Issuer"), that:
1. The Project described in Exhibit J to the Agreement has been
completed in accordance with Borrower's specifications and has been
accepted by Borrower.
2. Borrower has obtained from a reputable insurance company
qualified to do business in the Commonwealth (as defined in the Agreement)
insurance with respect to all risks required to be covered thereby pursuant
to Section 7.07 of the Agreement.
3. Attached to this Certificate of Acceptance are Vendor
invoice(s) and/or ▇▇▇▇(s) of sale relating to the Project and, if such
invoices have been paid by Issuer or Westerbeke, evidence of payment
thereof and, if applicable, evidence of official intent to reimburse such
payment as required by the Code (as defined in the Agreement).
4. Borrower hereby directs Lender, on behalf of Issuer, to pay the
Loan Proceeds (as defined in the Agreement) as follows:
5. All of the representations and warranties of Borrower contained
in the Agreement are true and correct as of the date hereof and no Default
or Event of Default has occurred thereunder.
Dated: __________, _____.
WESTERBEKE CORPORATION
By:___________________________________
Title:________________________________
Date:_________________________________
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇
By:___________________________________
Title:________________________________
Date:_________________________________
Exhibit C-1 to Loan Agreement
FORM OF OPINION OF COUNSEL TO WESTERBEKE CORPORATION
April __, 2000
Massachusetts Development Finance Agency
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
GE Capital Public Finance, Inc.
Suite 470
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Loan Agreement (Real Estate) dated as of April 24, 2000,
by and among GE Capital Public Finance, Inc. ("Lender"),
Massachusetts Development Finance Agency ("Issuer"),
Westerbeke Corporation ("Westerbeke") and ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇ ("▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇," and collectively with Westerbeke,
the "Borrower")
Ladies and Gentlemen:
We have acted as counsel to Westerbeke with respect to the Loan
Agreement (Real Estate) described above (the "Loan Agreement") , the Escrow
Agreement (Real Estate) of even date therewith (the "Escrow Agreement")
among Lender, Issuer, Borrower, and National City Bank of Minneapolis, as
escrow agent, the Mortgage, Security Agreement, Assignment of Leases and
Rents and Fixture Filing of even date therewith (the "Mortgage"), the
Assignment of Rents and Leases of even date therewith (the "Assignment"),
the Certificate and Indemnity Agreement Regarding Hazardous Substances of
even date therewith (the Hazardous Substances Agreement" and together with
the Mortgage and the Assignment the "Estate Security Agreements"), and
various related matters and, in this capacity, have reviewed a duplicate
original or certified copy of each of the Agreements (defined below). The
Loan Agreement, the Escrow Agreement, the Mortgage, the Assignment and the
Hazardous Substances Agreement, may be referred to herein collectively as
the "Agreements."
We have examined the Agreements and such records, certificates, and
other documents and have made such other investigation as we consider
necessary to render this opinion. As to various questions of fact material
to our opinion, we have relied upon representations made in or pursuant to
the Agreements and upon certificates of officers of Westerbeke. We have
assumed the genuineness of all signatures (other than the signatures of the
officers of Westerbeke to the Agreements), the authenticity of all
documents submitted to us as originals, and the conformity to original
documents of all documents submitted to us as copies.
References in this opinion to matters known to us mean the actual
knowledge of the attorneys of this firm responsible for preparing this
opinion after inquiry of appropriate officers of Westerbeke.
This opinion is limited to the laws of The Commonwealth of
Massachusetts, the General Corporation Law of the State of Delaware and the
federal laws of the United States.
Based on the foregoing, and subject to the conditions,
qualifications, limitations, and exceptions set forth herein, we are of the
opinion that:
1. Westerbeke has been duly organized and is validly existing and
in good standing under the laws of the State of Delaware and has the full
power and authority to own its properties and conduct the business now
conducted by it.
2. Westerbeke is qualified to conduct business as a corporation in
The Commonwealth of Massachusetts.
3. Westerbeke has full power and authority to execute and deliver
the Agreements to which it is party and to carry out the terms thereof. The
Agreements have been duly and validly authorized, executed, and delivered
by Westerbeke, are in full force and effect and are the legally valid and
binding obligations of Westerbeke, enforceable in accordance with their
respective terms (including against claims of usury); provided however that
we express no opinion as to whether interest on the bonds at the Gross-Up
Rate violates Massachusetts General Laws, Chapter 271, Section 49. Certain
remedies, waivers, and other provisions of the Real Estate Security
Agreements may not be enforceable, but such unenforceability does not
render the Real Estate Security Agreements invalid as a whole or preclude
the practical realization of the principal benefits intended to be provided
by the Real Estate Security Agreements, which we understand to consist of
(A) the foreclosure of the Mortgage in accordance with applicable law and
(B) the enforcement against Westerbeke of the right to receive payments due
from tenants of the real property subject to the Assignment that would be
recognized as rents under applicable law upon taking possession of the real
property subject to the Assignment in the manner and to the extent required
under applicable law.
4. The consummation of the transactions contemplated by the
Agreements and the carrying out of the terms thereof will not result in
violation of any provisions of the Westerbeke's articles of organization or
any other agreement between the shareholders and Westerbeke or any
agreement between the shareholders, if applicable, or result in the
violation of any provision of, or in a default under, any indenture,
mortgage, deed of trust, or other agreement for the incurring of
indebtedness or any other material obligation of Westerbeke known to us to
which Westerbeke is a party or by which it or its property is bound, or any
judgment, decree, order, statute, rule or regulation known to us to which
Westerbeke is a party or by which it or its property is bound.
5. Based on inquiry of officers of Borrower, there are no legal or
governmental actions, suits, proceedings, inquiries, or investigations
pending, threatened, or contemplated, or any basis therefore or to which
Westerbeke is or may become a party or of which any property of Westerbeke
is or may become subject, other than ordinary routine litigation incident
to the kind of business conducted by Westerbeke which, if determined
adversely to Westerbeke would not, individually or in the aggregate, have a
material adverse effect on the financial position or results of operations
of Westerbeke.
6. Based on inquiry of officers of Borrower, there are no legal or
governmental proceedings pending, threatened, contemplated, or any basis
therefor, wherein an unfavorable decision, ruling or finding would
adversely affect the validity of or security for the Agreements or the
transactions contemplated thereby.
7. Provisions of the Loan Agreement are effective under
Massachusetts law to create a security interest in favor of Lender, as
assignee of Issuer, in all of Borrower's right, title and interest in and
to such of the Mortgaged Property (as defined in the Loan Agreement) that
is covered by the Uniform Commercial Code as adopted by The Commonwealth of
Massachusetts and all the proceeds thereof. If the form UCC-1 Financing
Statements (UCC-1s) reviewed by us are properly filed at the Massachusetts
Secretary of State's Office, the Taunton City Clerk's office, the Avon Town
Clerk's office and the Bristol County Registry of Deeds, such security
interest will be properly perfected.
This opinion letter shall be interpreted in accordance with the Legal
Opinion Principals issued by the Committee on Legal Opinions of the
American Bar Association's Business Law Section as published in 53 Business
Lawyer 831 (May 1998).
This opinion letter is being furnished only to you in connection with
the transaction described above and may not be relied on without our prior
written consent for any other purpose or by anyone else other than your
assignees permitted by the Agreements.
Very truly yours,
Exhibit C-2 to Loan Agreement
FORM OF OPINION OF COUNSEL TO 150 ▇▇▇▇ ▇▇▇▇▇▇▇, LLP
April __, 2000
Massachusetts Development Finance Agency
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
GE Capital Public Finance, Inc.
Suite 470
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Loan Agreement (Real Estate) dated as of April 1, 2000, by
and among GE Capital Public Finance, Inc. ("Lender"),
Massachusetts Development Finance Agency ("Issuer"),
Westerbeke Corporation ("Westerbeke") and ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇ ("▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇", and together with Westerbeke, the
"Borrower")
Ladies and Gentlemen:
We have acted as counsel to 150 ▇▇▇▇ ▇▇▇▇▇▇▇ with respect to the Loan
Agreement (Real Estate) described above (the "Loan Agreement"), the Escrow
Agreement (Real Estate) of even date therewith (the "Escrow Agreement")
among Lender, Issuer, Borrower, and National City Bank of Minneapolis, as
escrow agent, the Mortgage, Security Agreement, Assignment of Leases and
Rents and Fixture Filing of even date therewith (the "Mortgage"), the
Assignment of Rents and Leases of even date herewith (the "Assignment"),
the Certificate and Indemnity Agreement Regarding Hazardous Substances of
even date therewith(the "Hazardous Substances Agreement"), and various
related matters and, in this capacity, have reviewed a duplicate original
or certified copy of each of the Agreements (defined below). The Loan
Agreement, the Escrow Agreement, the Mortgage, the Assignment, the
Hazardous Substances Agreement and the Statement as to Tax Exempt Status,
may be referred to herein collectively as the "Agreements."
We have examined the Agreements and such records, certificates, and
other documents and have made such other investigation as we consider
necessary to render this opinion. As to various questions of fact material
to our opinion, we have relied upon representations made in or pursuant to
the Agreements and upon certificates of officers of 150 ▇▇▇▇ ▇▇▇▇▇▇▇. We
have assumed the genuineness of all signatures (other than the signatures
of the officers of 150 ▇▇▇▇ ▇▇▇▇▇▇▇ to the Agreements), the authenticity of
all documents submitted to us as originals, and the conformity to original
documents of all documents submitted to us as copies.
References in this opinion to matters known to us mean the actual
knowledge of the attorneys of this firm responsible for preparing this
opinion after inquiry of appropriate officers of Borrower.
This opinion is limited to the laws of The Commonwealth of
Massachusetts and the federal laws of the United States.
Based on the foregoing, and subject to the conditions,
qualifications, limitations, and exceptions set forth herein, we are of the
opinion that:
1. 150 ▇▇▇▇ ▇▇▇▇▇▇▇ has been duly organized and is validly
existing and in good standing as a registered limited liability partnership
under the laws of The Commonwealth of Massachusetts and has the full power
and authority to own its properties and conduct the business now conducted
by it.
2. 150 ▇▇▇▇ ▇▇▇▇▇▇▇ has full power and authority to execute and
deliver the Agreements to which it is party and to carry out the terms
thereof. The Agreements have been duly and validly authorized, executed,
and delivered by 150 ▇▇▇▇ ▇▇▇▇▇▇▇, are in full force and effect and are the
valid and binding obligations of 150 ▇▇▇▇ ▇▇▇▇▇▇▇, enforceable in
accordance with their respective terms (including against claims of usury);
provided however that we express no opinion as to whether interest on the
bonds at the Gross-Up Rate violates Massachusetts General Laws, Chapter
271, Section 49.
3. The consummation of the transactions contemplated by the
Agreements and the carrying out of the terms thereof will not result in
violation of any provisions of 150 ▇▇▇▇ ▇▇▇▇▇▇▇'▇ partnership agreement, or
any other agreement between the partners and 150 ▇▇▇▇ ▇▇▇▇▇▇▇ or any
agreement between the partners of 150 ▇▇▇▇ ▇▇▇▇▇▇▇, if applicable, or
result in the violation of any provision of, or in a default under, any
indenture, mortgage, deed of trust, or other agreement for the incurring of
indebtedness or any other material obligation of 150 ▇▇▇▇ ▇▇▇▇▇▇▇ known to
us to which 150 ▇▇▇▇ ▇▇▇▇▇▇▇ is a party or by which it or its property is
bound, or any judgment, decree, order, statute, rule or regulation known to
us to which 150 ▇▇▇▇ ▇▇▇▇▇▇▇ is a party or by which it or its property is
bound.
4. There are no legal or governmental actions, suits, proceedings,
inquiries, or investigations pending, threatened, or contemplated, or any
basis therefore or to which 150 ▇▇▇▇ ▇▇▇▇▇▇▇ is or may become a party or of
which any property of 150 ▇▇▇▇ ▇▇▇▇▇▇▇ is or may become subject, other than
ordinary routine litigation incident to the kind of business conducted by
150 ▇▇▇▇ ▇▇▇▇▇▇▇ which, if determined adversely to 150 ▇▇▇▇ ▇▇▇▇▇▇▇ would
not, individually or in the aggregate, have a material adverse effect on
the financial position or results of operations of 150 ▇▇▇▇ ▇▇▇▇▇▇▇.
5. There are no legal or governmental proceedings pending,
threatened, contemplated, or any basis therefor, wherein an unfavorable
decision, ruling or finding would adversely affect the validity of or
security for the Agreements or the transactions contemplated thereby.
Very truly yours,
Exhibit D to Loan Agreement
FORM OF OPINION OF BOND COUNSEL
April __, 2000
Massachusetts Development Finance Agency
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
GE Capital Public Finance, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
We have acted as bond counsel to the Massachusetts Development
Finance Agency (the "Issuer") in connection with the making by the Issuer
of a loan (the "Loan") to Westerbeke Corporation ("Westerbeke") and ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ("▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇," and collectively with Westerbeke,
the "Borrower") pursuant to a Loan Agreement (Real Estate), dated as of
April 24, 2000 (the "Agreement"), by and among GE Capital Public Finance,
Inc. ("Lender"), the Issuer and Borrower.
We have examined the law and such certified proceedings and other
papers as deemed necessary to render this opinion, including the Escrow
Agreement (Real Estate), dated as of April 24, 2000 (the "Escrow
Agreement"), by and among Lender, the Issuer, Borrower and National City
Bank of Minneapolis, as escrow agent (the "Escrow Agent"). Terms used in
this opinion and not otherwise defined shall have the same meanings
assigned to them in the Agreement.
As to questions of fact material to our opinion we have relied upon
representations and covenants of the Issuer and Borrower contained in the
Agreement, the certified proceedings and other certifications of public
officials furnished to us, and certifications by officials of Borrower and
others, without undertaking to verify the same by independent
investigation.
The Loan is made pursuant to the Agreement. Under the Agreement,
Borrower has agreed to make payments sufficient to pay when due the
principal of, and premium (if any) and interest on the Loan. Such payments
and other moneys payable to the Issuer or Lender under the Agreement,
including proceeds derived from any security provided thereunder
(collectively, the "Revenues"), and the rights of the Issuer under the
Agreement to receive the same (excluding, however, certain administrative
fees, indemnification and reimbursements), are pledged and assigned by the
Issuer as security for the repayment of the Lender pursuant to the
Agreement (the "Lender Loan"). The Lender Loan is a limited obligation of
the Issuer payable solely from the Revenues.
We express no opinion with respect to compliance by Borrower with
applicable legal requirements in connection with the acquisition,
construction, reconstruction, use, occupancy or operation of the Project or
any Mortgaged Property.
Based on our examination, we are of opinion, as of the date hereof
and under existing law, as follows:
1. The Authority is a duly created and validly existing body
corporate and politic and a public instrumentality of The Commonwealth of
Massachusetts with the power to enter into and perform its obligations
under the Agreement and the Escrow Agreement.
2. Each of the Agreements has been duly authorized, executed and
delivered by the Issuer and is a valid and binding obligation of the Issuer
enforceable upon the Issuer. As provided in the Massachusetts General Laws,
Chapter 23G, as amended, the Agreement creates a valid lien on the rights
of the Issuer to receive Revenues under the Agreement (except certain
rights to indemnification, reimbursements and fees).
3. Under existing law, interest on the Lender Loan is excluded
from the gross income of the owner thereof for federal income tax purposes
except for interest on the Lender Loan during any period while it is held
by a "substantial user" of the facilities financed with proceeds of the
Lender Loan or by a "related person" within the meaning of Section 147(a)
of the Internal Revenue Code of 1986 (the "Code") and except that Borrower
or others, by taking action after the date hereof that causes the
$10,000,000 limitation set forth in Section 144(a)(10) of the Code to be
exceeded, may cause interest on the Lender Loan to become included in gross
income (retroactive to the date hereof, in the case of the $40,000,000
limitation) for federal income tax purposes. It should be noted that the
interest on the Lender Loan is an item of tax preference for purposes of
the federal alternative minimum tax imposed on individuals and
corporations. In addition to the foregoing exceptions, the opinion set
forth in the first sentence of this paragraph is subject to the condition
that the Issuer and Borrower comply with all requirements of the Code that
must be satisfied subsequent to the making of the Lender Loan in order that
interest thereon be, or continue to be, excluded from gross income for
federal income tax purposes. Borrower, and to the extent necessary, the
Issuer have covenanted in the Agreement to comply with such requirements.
Failure to comply with certain of such requirements may cause the inclusion
of interest on the Lender Loan in gross income for federal income tax
purposes to be retroactive to the date of making of the Lender Loan. We
express no opinion regarding other federal tax consequences arising with
respect to the Lender Loan.
4. Under existing statutes, the Loan and any income derived
therefrom, including any sale, exchange or transfer of the Loan, are exempt
from taxation under the laws of The Commonwealth of Massachusetts, although
the Loan and any income therefrom may be included in the measure of
Massachusetts estate and inheritance taxes and of certain Massachusetts
corporation excise and franchise taxes.
It is to be understood that the rights of the Lender and the
enforceability of the Agreement and the Escrow Agreement are subject to
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting creditors' rights heretofore or hereafter enacted to the extent
constitutionally applicable and that their enforcement may also be subject
to the exercise of judicial discretion in appropriate cases.
Yours faithfully,
Exhibit E to Loan Agreement
LEGAL DESCRIPTION OF PREMISES
Exhibit F to Loan Agreement
SURVEY REQUIREMENTS
The survey called for in the Loan Agreement must be prepared by a
Registered Engineer or Surveyor and must comply with the following:
1. The survey must be an "as built" Urban ALTA/ACSM Land Title Survey,
meeting the Minimum Standard Detail Requirements and Classifications
of ALTA/ACSM Land Title Surveys as adopted by American Land Title
Association and American Congress on Surveying & Mapping in 1997.
2. The survey must be completed and dated within six (6) months prior to
closing.
3. The survey must include the following certification and must include
the original signature and seal of the surveyor:
To [Borrower] , GE Capital Public Finance, Inc., and [Title
Insurance Company]:
This is to certify that this map or plat and the survey on
which it is based were made (i) in accordance with "Minimum
Standard Detail Requirements for ALTA/ACSM Land Title Surveys,"
jointly established and adopted by ALTA and ACSM in 1997, and
includes Items 1, 2, 3, 4, 6, 7(a), 7(b), 7(c), 8, 9, 10, 11,
13, 14, 15 and 16 of Table A thereof, and (ii) pursuant to the
Accuracy Standards (as adopted by ALTA and ACSM and in effect
on the date of this certification) of an insert Urban Survey.
Date:
(signed) (seal) Registration No.
4. The following items are to be included from Table A of the Minimum
Standard Detail Requirements for ALTA/ACSM Land Title Surveys:
1. Monuments placed (or a reference monument or witness to the
corner) at all major corners of the boundary of the property,
unless already marked or referenced by an existing monument or
witness to the corner.
2. Vicinity map showing the property surveyed in reference to
nearby highway(s) or major street intersection(s).
3. Flood zone designation (with proper annotation based on Federal
Flood Insurance Rate Maps or the state or local equivalent, by
scaled map location and graphic plotting only).
4. Indicate total acreage and square footage as indicated by
client.
5. Identify and show, if possible, setback, height and bulk
Restrictions of record or disclosed by applicable zoning or
building codes (in addition to those recorded in subdivision
maps). If none, so state.
6. (a) Exterior dimensions of all buildings at ground level.
(b) Square footage of exterior footprint of all buildings, or
gross floor area of all buildings, at ground level.
(c) Height of all buildings above grade at a defined
location.
7. Substantial, visible improvements (in addition to buildings)
such as signs, parking areas or structures, swimming pools,
etc.
8. Parking areas and, if striped, the striping and the type (e.g.,
handicapped, motorcycle, regular, etc.) and number of spaces.
9. Indication of access to a public way such as curb cuts,
driveways marked, etc.
10. Location of utilities serving or existing on the property as
evidenced by on-site observation or as determined by records
provided by client, utility companies and other appropriate
sources (with reference as to the source of information) (for
example):
(a) railroad tracks and sidings;
(b) manholes, catch basins, valve vaults or other surface
indications of subterranean uses;
(c) wires and cables (including their function) crossing the
surveyed premises, all poles on or within ten (10) feet
of the surveyed premises, and the dimensions of all
crosswires or overhangs affecting the surveyed premises;
and
(d) utility company installations on the surveyed premises.
11. Significant observations not otherwise disclosed.
12. Observable evidence of earth moving work, building construction
or building additions within recent months.
13. Any changes in street right of way lines either completed or
proposed, and available from the controlling jurisdiction.
Observable evidence of recent street or sidewalk construction
or repairs.
14. Observable evidence of site use as a solid waste dump, sump or
sanitary landfill.
5. The following additional items must be included on the survey:
(a) A narrative legal which exactly matches the title commitment;
(b) Names of all streets abutting the premises;
(c) Distance to nearest intersection of streets and names of
streets;
(d) Street address of the premises; and
(e) Clear indication of any encroachments or protrusions and the
exact measurements of the distance to lot lines, buildings,
easement lines, etc.
6. Copies of the survey can be provided to GE Capital Public Finance,
Inc. and its counsel, Borrower and the Title Insurance Company.
Exhibit G to Loan Agreement
ENVIRONMENTAL PHASE I REPORT REQUIREMENTS
The report is to be addressed to GE Capital Public Finance, Inc. and
Borrower.
The following sections shall be included in all Phase I Environmental
Studies:
1. Historical Study -- The inspector is to obtain a chain of title search
(through a title company) to determine past owners of the property
and the effect they may have had on it. The search should go back at
least 50 years, preferably 75 years. Personal interviews from current
and/or past owners, managers, neighbors, etc. may be included, and
aerial photographs verifying past use must accompany the search. If
the property was previously used for agricultural purposes, the
engineer must include statements as to what types of pesticides would
have been used and their probable impact on the subject property.
2. On-Site Location -- The inspector is to make a physical inspection of
the site to evaluate for visual signs of hazardous materials. The
report should include the results of this inspection and must include
the following:
a. Asbestos:
1. Suspect/potential asbestos-containing materials (PACM)
are to be tested to verify the presence of asbestos.
2. The report must state whether the asbestos, if it is
found, is in a friable or non-friable state.
3. If asbestos is found, the report must include an estimate
of the cost of the removal of the asbestos-containing
materials.
4. If tested materials do contain asbestos, an Operations
and Maintenance Agreement must be implemented and a copy
of the agreement included in the report.
b. PCB's:
The inspection should include reference to PCB-containing
transformers. If a sticker is not present on the transformer
indicating "no PCB content," the inspector is to verify
ownership and responsibility for maintenance as well as note
the PCB content.
c. Lead Paint:
If lead paint is suspected on the property, the report needs to
address the need for testing and/or removal of same.
d. Above and Underground Storage Tanks:
A check should be made for both above and underground storage
tanks with reference to the condition of the tank(s), whether
or not they must be registered with any federal, State or
local agency, and, in the case of above-ground tanks, whether
it is necessary for the tank to be placed on a concrete,
bermed pad.
e. Radon:
A test should be made for radon gas. If radon is not an issue
in the area of the subject property, an affirmative statement
to that effect must be made.
3. Activity Review -- The inspector is to contact all federal (CERCLIS),
state (EPA) and local regulatory agencies to determine whether the
site or the surrounding properties within a one (1) mile radius
(regardless of the ASTM guidelines) are or have been involved in
cleanup activities. Any reference to such activity is to include the
location and distance of the site to the subject property and is to
note whether said site is up or down gradient to the subject property
and if it represents a potential environmental hazard. Direction and
rate of groundwater flow should be included. Database records to be
searched should include NPL, CERCLIS, RERIS-Violators, HMIRS, PADS,
ERNS, FINDS, TRIS, TSCA, UST, LUST and any other applicable
databases.
4. Must be less than six (6) months old.
5. Must be updated if it was completed prior to any construction or
substantial remodel. Update should include the use of construction
materials as well as an update of all RCRA, CERCLIS and EPA lists.
6. Wetlands issues must be addressed.
Exhibit H to Loan Agreement
LIST OF PERMITTED EXCEPTIONS
Exhibit I to Loan Agreement
PERMANENT LOAN INSURANCE REQUIREMENTS
NAME OF INSURED:
INSURED MAILING ADDRESS:
PROPERTY ADDRESS:
MORTGAGEE/LOSS PAYEE:
GE Capital Public Finance, Inc., a Delaware corporation, Suite 470,
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
INSURANCE REQUIREMENTS:
HAZARD INSURANCE:
Evidenced on Form Accord 27 -- Evidence of insurance, naming GE
Capital Public Finance, Inc., together with its successors and/or
assigns, as loss payee/mortgagee.
Perils: Fire and extended coverage, vandalism and malicious
mischief, boiler and machinery and flood insurance.
Values: 100% replacement cost value of property with not more than
$5,000.00 deductible
Endorsements Required: Agreed amount, inflation guard and
replacement cost endorsements. List of locations and
schedule of values, if blanket policy. 438BFU (loss payee
endorsement -- see copy attached with enlargement for
easier reading), in favor of GE Capital Public Finance,
Inc., amended to thirty (30) days' notice of change,
cancellation or non-renewal.
Loss of rents/business interruption for twelve (12) months (in an
amount equivalent to at least twelve (12) mos. rent).
Boiler and Machinery Coverage.
LIABILITY:
Coverage to be on occurrence basis only.
Evidence of insurance, showing comprehensive general liability on an
occurrence basis in an amount no less than $2,000,000 per occurrence
to include:
Bodily injury and property damage liability (primary and excess
umbrella acceptable to satisfy limits). Waiver of Subrogation
Endorsement is required.
GE Capital Public Finance, Inc. is to be named Additional Insurance
as respects this property only and the Additional Insured Endorsement
should be attached to the certificate.
SPECIAL INSTRUCTIONS:
GE Capital Public Finance, Inc. is to be provided with a Certificate
of Insurance from an insurance company having a Best's Rating of A/X
or better for hazard and liability executed by the insurance company
or its authorized agent itemizing the above coverages and including a
copy of the 438BFU endorsement.
WITHIN NINETY (90) DAYS OF ISSUANCE OF THE CERTIFICATE OF INSURANCE, THE
INSURANCE COMPANY IS TO PROVIDE A CERTIFIED COPY OF THE INSURANCE POLICY,
INCLUDING ALL ENDORSEMENTS AND AMENDMENTS.
LENDER'S LOSS PAYABLE ENDORSEMENT -- 438 BFU
1. Loss or damage, if any, under this policy shall be paid to GE Capital
Public Finance, Inc., its successors and assigns, hereinafter
referred to as the "Lender," in whatever form or capacity its
interests may appear and whether said interest be vested in said
Lender in its individual or in its disclosed or undisclosed fiduciary
or representative capacity, or otherwise, or vested in a nominee or
trustee of said Lender.
2. The insurance under this policy, or any rider or endorsement attached
thereto, as to the interest only of the Lender, its successors and
assigns, shall not be invalidated nor suspended: (a) by any error,
omission or change respecting the ownership, description, possession
or location of the subject of the insurance or the interest therein,
or the title thereto; (b) by the commencement of foreclosure
proceedings or the giving of notice of sale of any of the property
covered by this policy by virtue of any mortgage or trust deed; (c)
by any breach of warranty, act, omission, neglect or noncompliance
with any of the provisions of this policy, including any and all
riders now or hereafter attached thereto, by the named insured, the
borrower, mortgagor, trustor, vendee, owner, tenant, warehouseman,
custodian, occupant, or by the agents of either of any of them or by
the happening of any event permitted by them or either of them, or
their agents, or which they failed to prevent, whether occurring
before or after the attachment of this endorsement, or whether before
or after a loss, which under the provisions of this policy of
insurance or of any rider or endorsement attached thereto would
invalidate or suspend the insurance as to the named insured,
excluding herefrom, however, any acts or omissions of the Lender
while exercising active control and management of the property.
3. In the event of failure of the insured to pay any premium or
additional premium which shall be or become due under the terms of
this policy or on account of any change in occupancy or increase in
hazard not permitted by this policy, this Company agrees to give
written notice to the Lender of such nonpayment of premium after 60
days from and within 120 days after due date of such premium and it
is a condition of the continuance of the rights of the Lender
hereunder that the Lender when so notified in writing by this Company
of failure of the insured to pay such premium shall pay or cause to
be paid the premium due within ten days following receipt of the
Company's demand in writing therefor. If the Lender shall decline to
pay said premium or additional premium, the rights of the Lender
under this Lender's Loss Payable Endorsement shall not be terminated
before ten days after receipt of said written notice by the Lender.
4. Whenever this Company shall pay to the Lender any sum for loss or
damage under this policy and shall claim that as to the insured no
liability therefor exists, this Company, at its option, may pay to
the Lender the whole principal sum and interest and other
indebtedness due or to become due from the insured, whether secured
or unsecured (with refund of all interest not accrued), and this
Company, to the extent of such payment, shall thereupon receive a
full assignment and transfer, without recourse, of the debt and all
rights and securities held as collateral thereto.
5. If there be any other insurance upon the within described property,
this Company shall be liable under this policy as to the Lender for
the proportion of such loss or damage that the sum hereby insured
bears to the entire insurance of similar character on said property
under policies held by, payable to and expressly consented to by the
Lender. Any Contribution Clause included in any Fallen Building
Clause Waiver or any Extended Coverage Endorsement attached to this
contract of insurance is hereby nullified, and also any Contribution
Clause in any other endorsement or rider attached to this contract of
insurance is hereby nullified except Contribution Clauses for the
compliance with which the insured has received reduction in the rate
charged or has received extension of the coverage to include hazards
other than fire and compliance with such Contribution Clause is made
a part of the consideration for insuring such other hazards. The
Lender upon the payment to if of the full amount of its claim will
subrogate this Company (pro rata with all other insurers contributing
to said payment) to all of the Lender's rights of contribution under
said other insurance.
6. This Company reserves the right to cancel this policy at any time, as
provided by its terms, but in such case this policy shall continue in
force for the benefit of the Lender for 30 days after written notice
of such cancellation is received by the Lender and shall then cease.
7. This policy shall remain in full force and effect as to the interest
of the Lender for a period of 10 days after its expiration unless an
acceptable policy in renewal therefor with loss thereunder payable to
the Lender in accordance with the terms of this Lender's Loss Payable
Endorsement shall have been issued by some insurance company accepted
by the Lender.
8. Should legal title to and beneficial ownership of any of the property
covered under this policy become vested in the Lender or its agents,
insurance under this policy shall continue for the term thereof for
the benefit of the Lender, but, in such event, any privileges granted
by this Lender's Loss Payable Endorsement which are not also granted
the insured under the terms and conditions of this policy and/or
under other riders or endorsements attached thereto shall not apply
to the insurance hereunder as respects such property.
9. All notices herein provided to be given by the Company to the Lender
in connection with this policy and this Lender's Loss Payable
Endorsement shall be mailed to or be delivered to the Lender at its
office or branch at: Suite 470, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
Attached to Policy No. _________
Of: ____________________________
Issued to: _____________________
Issuer at: _____________________ Date: _______________________
Exhibit J to Loan Agreement
SCHEDULE OF PROJECT
AND ACQUISITION COSTS
Description of Project
The following Project is the subject of the Loan Agreement (Real
Estate) dated as of April 24, 2000 among GE Capital Public Finance, Inc.
("Lender"), Massachusetts Development Finance Agency ("Issuer"), Westerbeke
Corporation ("Westerbeke") and ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ("▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇"
and collectively with Westerbeke, "Borrower"):
The acquisition, construction and equipping of a new manufacturing
facility located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ in the City of Taunton, Bristol
County, Massachusetts.
Acquisition Costs of Project
To be provided by Borrower and subject to Lender's approval prior to
the construction completion date.
Exhibit K to Loan Agreement
Trade Names
1. None.
Exhibit L to Loan Agreement
FORM OF CONSTRUCTION LETTER OF CREDIT
(Letterhead of Bank)
GE Capital Public Finance, Inc.
Suite 470
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▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Irrevocable Letter of Credit No. __________ for
U.S.$_________, Dated _______ __, 19__.
Ladies and Gentlemen:
We hereby issue our irrevocable Letter of Credit No. _______ in the
amount of $_________ in favor of GE Capital Public Finance, Inc., a
Delaware corporation ("GECPF"), for the account of Westerbeke Corporation
("Customer").
We undertake to honor from time to time GECPF's sight draft or drafts
on us not exceeding in the aggregate U.S.$_________ when accompanied by a
signed statement on behalf of GECPF stating either (i) that the amount of
the accompanying draft is due and owing by Customer to GECPF or (ii) that a
petition has been filed by or against customer under Title 11 of the United
States Code or any successor law or similar law.
We agree that we shall have no duty or right to inquire as to the
basis upon which GECPF has determined to present to us any draft under this
Letter of Credit, and presentation of such draft shall automatically result
in payment to GECPF.
This Letter of Credit is valid until _______ __, 19__, and drafts
drawn hereunder, when accompanied by the statement referred to above, will
be honored if presented to us at our office at
________________________________ on or before that date by 11:59 P.M.
All drafts must be marked "Drawn under irrevocable Letter of Credit
No. _____, dated _______ __, 19__." All drawings shall be made in person or
by telecopy (or other facsimile telecommunication) without further need of
documentation, it being understood that GECPF's signed drafts and the
statement referred to above submitted via such telecopy (or other facsimile
telecommunication) are to be the sole operative instruments of drawing.
Such documents shall be presented to ___________________________________,
telecopy number ___________.
This Letter of Credit is subject to the Uniform Customs and Practice
for Documentary Credits (1993 Revision) (the "UCP") and, to the extent not
inconsistent herewith, the Uniform Commercial Code of The Commonwealth of
Massachusetts. If the expiration date stated above occurs on a date that we
are closed for reasons referred to in Article 17 of the UCP, then such
expiration date shall be extended to the tenth Business Day (defined below)
on which we are open following written notice to GECPF from us that we have
reopened. "Business Day" shall mean a day on which we are is not required
or authorized by law to be closed and on which the New York Stock Exchange
is open.
This Letter of Credit is transferable in its entirety to any
transferee that has succeeded to GECPF's rights under
____________________________________________. Transfer of this Letter of
Credit to such transferee shall be effected by the presentation to us of
this Letter of Credit accompanied by a signed notice of transfer. Upon such
presentation we shall endorse the transfer on this Letter of Credit and
such transfer shall become effective upon delivery of this Letter of Credit
by us to such transferee.
We agree that drawings under this Letter of Credit will be paid from
our own funds and not directly or indirectly from funds or collateral on
deposit with us or pledged for our account and that we will seek
reimbursement for payments made pursuant to this Letter of Credit only
after such payments have been made.
All of the terms and conditions of this Letter of Credit are
contained herein and shall not be altered except by reduction in the amount
due to corresponding payments in like amount in compliance with the
aforementioned terms. There are no other conditions to this Letter of
Credit.
We hereby waive any defense based upon any allegation of fraud.
Very truly yours,
By
Title
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS AND EXHIBITS 2
Section 1.01. Definitions 2
Section 1.02. Exhibits 7
Section 1.03. Rules of Construction 8
Section 1.04. Combined Documents 8
ARTICLE II. FINANCING OF PROJECT AND TERMS OF LOAN 9
Section 2.01. Acquisition of Project 9
Section 2.02. Loan. 9
Section 2.03. Interest 9
Section 2.04. Payments 9
Section 2.05. Payment on Non-Business Days 10
Section 2.06. Loan Payments To Be Unconditional 10
Section 2.07. Joint and Several Obligations of Borrower 10
Section 2.08. Prepayments 11
Section 2.09 Security 11
ARTICLE III. CONDITIONS PRECEDENT 11
Section 3.01. Conditions Precedent to Closing 11
ARTICLE IV. REPRESENTATIONS, WARRANTIES AND COVENANTS OF
ISSUER; RIGHTS OF ISSUER 16
Section 4.01. Representations, Warranties and Covenants 16
Section 4.02. Limitations on Actions 17
Section 4.03. Responsibility; Fees and Expenses 17
Section 4.04. Indemnification by Borrower 18
ARTICLE V. REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWER 19
ARTICLE VI. TITLE TO MORTGAGED PROPERTY; SECURITY INTEREST 25
Section 6.01. Title to Mortgaged Property 25
Section 6.02. Security Interest in Mortgaged Property 25
Section 6.03. Change in Name or Corporate Structure of
Westerbeke; Change in Location of Westerbeke's
Principal Place of Business 25
Section 6.04. Liens and Encumbrances to Title 25
Section 6.05. Assignment of Insurance 26
Section 6.06. Agreement as Financing Statement 26
Section 6.07. Letter of Credit and Construction of Letter of
Credit 26
ARTICLE VII. AFFIRMATIVE COVENANTS OF BORROWER 27
Section 7.01. Reporting Requirements 27
Section 7.02. Books and Records; Inspection and Examination 28
Section 7.03. Compliance With Laws 29
Section 7.04. Environmental Compliance 29
Section 7.05. Payment of Taxes and Other Claims 30
Section 7.06. Preservation and Maintenance of Mortgaged
Property, Leaseholds 30
Section 7.07. Insurance 31
Section 7.08. Preservation of Corporate Existence 32
Section 7.09. Preservation of Limited Liability Partnership
Existence 32
Section 7.10. Performance by Lender 32
Section 7.11. Financial Covenants. 33
ARTICLE VIII. NEGATIVE COVENANTS OF BORROWER 33
Section 8.01. Liens. 33
Section 8.02. Sale of Assets 33
Section 8.03. Consolidation and Merger 34
Section 8.04. Accounting 34
Section 8.05. Other Defaults 34
Section 8.06. Place of Business 34
Section 8.07. Modifications and Substitutions 34
Section 8.08. Use of the Mortgaged Property 34
Section 8.09. Leasing 35
ARTICLE IX. DAMAGE AND DESTRUCTION; CONDEMNATION; USE OF NET
PROCEEDS 35
Section 9.01. Damage and Destruction 35
Section 9.02. Condemnation 35
ARTICLE X. ASSIGNMENT AND SELLING 36
Section 10.01. Assignment by Lender 36
Section 10.02. No Sale or Assignment by Borrower 36
ARTICLE XI. EVENTS OF DEFAULT AND REMEDIES 36
Section 11.01. Events of Default 36
Section 11.02. Remedies on Default 38
Section 11.03. Reserved 39
Section 11.04. No Remedy Exclusive 39
Section 11.05. Late Charge 40
ARTICLE XII. MISCELLANEOUS 40
Section 12.01. Costs and Expenses of Lender 40
Section 12.02. Disclaimer of Warranties 40
Section 12.03. Notices 40
Section 12.04. Further Assurance and Corrective Instruments 41
Section 12.05. Binding Effect; Time of the Essence 41
Section 12.06. Severability 41
Section 12.07. Amendments 41
Section 12.08. Execution in Counterparts 41
Section 12.09. Applicable Law 41
Section 12.10. Captions 41
Section 12.11. Entire Agreement 41
Section 12.12. Usury. 42
Section 12.13. Waiver of Jury Trial 42
Exhibit A to Loan Agreement 1
Exhibit B to Loan Agreement 1
Exhibit C-1 to Loan Agreement 1
Exhibit C-2 to Loan Agreement 1
Exhibit D to Loan Agreement 1
Exhibit E to Loan Agreement 1
Exhibit F to Loan Agreement 1
Exhibit G to Loan Agreement 1
Exhibit H to Loan Agreement 1
Exhibit I to Loan Agreement 1
Exhibit J to Loan Agreement 1
Exhibit K to Loan Agreement 1
Exhibit L to Loan Agreement 1
