MORTGAGE, LOAN AND SECURITY AGREEMENT

Exhibit 10.5

 

MORTGAGE, LOAN AND SECURITY AGREEMENT

Among

MASSACHUSETTS DEVELOPMENT FINANCE AGENCY

And

RANOR, INC.

And

SOVEREIGN BANK, as Bondowner and Disbursing Agent

Dated as of December 1, 2010

And providing for the Issue of

$4,250,000

Massachusetts Development Finance Agency

Revenue Bonds

Ranor Issue, Series 2010A

And

$1,950,000

Massachusetts Development Finance Agency

Revenue Bonds

Ranor Issue, Series 2010B

 

TABLE OF CONTENTS

ARTICLE 1 INTRODUCTION AND DEFINITIONS	1
Section 101. Description of the Agreement and the Parties.	1
Section 102. Definitions.	1
ARTICLE 2 THE CONVEYANCES; GRANTING OF SECURITY INTERESTS	6
Section 201. Granting of Mortgage, Security Interests.	6
Section 202. The Agency’s Assignment and Pledge of Revenues.	8
Section 203. Defeasance.	8
ARTICLE 3 THE BORROWING	9
Section 301. The Bonds.	9
Section 302. Application of Bond Proceeds.	25
Section 303. Debt Service Fund.	25
Section 304. [Reserved.]	25
Section 305. [Reserved.]	25
Section 306. Rebate.	26
Section 307. [Reserved.]	27
Section 308. Application of Moneys.	27
Section 309. Loan of Proceeds; Payments by the Borrower.	27
Section 310. Unconditional Obligation.	28
Section 311. Redemption of the Bonds.	28
Section 312. Investments.	29
Section 313. Paying Agent.	31
Section 314. Unclaimed Moneys.	31
Section 315. Tender of Bonds.	32
ARTICLE 4 THE PROJECT AND THE MORTGAGED PROPERTY	32
Section 401. Project Fund.	32
Section 402. Borrower’s Obligations to Undertake and Complete Project.	35
Section 403. Use of Project and Mortgaged Property.	36
Section 404. Repair and Current Expenses.	37
Section 405. Insurance.	37
Section 406. Damage to or Destruction or Taking of the Mortgaged Property.	38
Section 407. Additions and Alterations.	39
Section 408. Right of Access to the Mortgaged Property.	39
ARTICLE 5 [RESERVED]	39
ARTICLE 6 DEFAULT AND REMEDIES.	40
Section 601. Default by the Borrower.	40
Section 602. Remedies for Events of Default.	41
Section 603. Court Proceedings.	42
Section 604. Revenues after Default.	43
Section 605. Bondowner May Perform Obligations.	43
Section 606. Remedies Cumulative.	43
ARTICLE 7 THE DISBURSING AGENT.	44
Section 701. Corporate Organization, Authorization and Capacity.	44
Section 702. Rights and Duties of the Disbursing Agent.	44
Section 703. Expenses of the Disbursing Agent.	45
Section 704. Resignation or Removal of the Disbursing Agent.	45
Section 705. Successor Disbursing Agent.	45
ARTICLE 8 THE AGENCY	46
Section 801. Corporate Organization, Authorization and Power.	46
Section 802. Covenants as to Payment; Faith and Credit of Commonwealth Not Pledged.	46
Section 803. Rights and Duties of the Agency.	47
ARTICLE 9 THE BONDOWNER	48
Section 901. Action by Bondowner.	48
Section 902. Proceedings by the Bondowner.	48
Section 903. Expenses of the Bondowner.	49
ARTICLE 10 THE BORROWER	49
Section 1001. Corporate Organization, Authorization, and Powers	49
Section 1002. Tax Status.	49
Section 1003. Securities Laws.	51
Section 1004. Maintenance of Corporate Existence.	51
Section 1005. Books and Accounts.	51
Section 1006. Notification of Event of Taxability.	51
Section 1007. Indemnification by Borrower.	51
ARTICLE 11 MISCELLANEOUS	52
Section 1101. Amendment.	52
Section 1102. Successor and Assigns.	52
Section 1103. Notices.	52
Section 1104. Agreement Not for the Benefit of Other Parties.	52
Section 1105. Severability.	53
Section 1106. Counterparts.	53
Section 1107. Captions.	53
Section 1108. Governing Law.	53

 

 

ARTICLE 1

INTRODUCTION AND DEFINITIONS

 

This MORTGAGE, LOAN AND SECURITY AGREEMENT (this “ Agreement ”) is entered into as of December 1, 2010, by the Massachusetts Development Finance Agency (with its successors, the “ Agency ”), Ranor, Inc., a Massachusetts corporation (with its successors, the “ Borrower ”), and Sovereign Bank, a Federal savings bank, as Bondowner and Disbursing Agent (with its successors, the “ Disbursing Agent ”).

 

This Agreement provides for the following transactions:

 

(a)   the Agency’s issue of the Bonds;

 

(b)   the Agency’s loan of the proceeds of the Bonds to the Borrower for the purpose of financing and refinancing the Project;

 

(c)   the Borrower’s repayment of the loan of Bond proceeds from the Agency through payment to the Bondowner of all amounts necessary to pay the Bonds;

 

(d)   the Borrower’s mortgage and pledge of the Mortgaged Property to the Bondowner; and

 

(e)   the Agency’s assignment to the Bondowner of the Revenues to be received hereunder and the rights to receive the same.

 

In consideration of the mutual agreements contained in this Agreement and other good and valuable consideration, the receipt of which is hereby acknowledged, the Agency, the Borrower, the Bondowner and the Disbursing Agent agree as set forth herein for their own benefit and for the benefit of the Bondowner, provided that any financial obligation of the Agency hereunder shall not be a general obligation of the Agency nor a debt or pledge of the faith and credit of The Commonwealth of Massachusetts (the “ Commonwealth ”), but shall be payable solely from the funds and Revenues pledged under this Agreement.

 

 

In addition to terms defined elsewhere herein, the following terms have the following meanings in this Agreement, unless the context otherwise requires:

 

(a)   “ Act ” means Massachusetts General Laws, Chapter 23G and, to the extent incorporated therein, Massachusetts General Laws, Chapter 40D, both as amended from time to time.

 

(b)   “ Assignment ” means, collectively, the Collateral Assignment of Leases, Rents and Property Income, the Collateral Assignment of Permits and Other Documents, the Contractor’s Consent to Assignment of Construction Contract, Assignment of Construction Contract, each dated as of December 30, 2010, by and between the Borrower and the Bondowner and Bank.

 

 

(c)   “ Authorized Officer ” means: (i) in the case of the Agency, the President and Chief Executive Officer; the Executive Vice President and Chief Operating Officer; the Treasurer and Executive Vice President of Finance and Administration and Chief Financial Officer; the Secretary; the General Counsel and Executive Vice President for Legislative Affairs; the Executive Vice President for Finance Programs; the Executive Vice President for Real Estate; the Executive Vice President for Devens Operations; the Executive Vice President for Marketing and Communications; and the Senior Vice President, Investment Banking, or any other official of the Agency so designated by a resolution of the Agency; and (ii) in the case of the Borrower, the Chief Financial Officer and when used with reference to an act or document of the Borrower, also means any other person authorized to perform the act or execute the document.

 

(d)   “ Bank ” means Sovereign Bank, a Federal savings bank.

 

(e)   “ Bank Obligations ” means the obligations of the Borrower to the Bank under that certain Loan Agreement, dated February, 24, 2006, as amended.

 

(f)   “ Bond Counsel ” means Greenberg Traurig, LLP, or any attorney at law or firm of attorneys selected by the Agency and acceptable to the Bondowner of nationally recognized standing in matters pertaining to the federal tax exemption of interest on bonds issued by states and political subdivisions, and duly admitted to practice law before the highest court of any state of the United States.

 

(g)   “ Bond Documents ” means the Bonds, this Agreement, the Bond Purchase Agreement, the Assignment, the Commitment, the Tax Agreement, the Environmental Indemnification Agreement, dated as of December 30, 2010, between the Borrower and the Bondowner, the Guaranty, and the Swap Agreement, dated as of December 30, 2010 between the Borrower and the Bondowner.

 

(h)   “ Bond Purchase Agreement ” means the Bond Purchase Agreement, dated as of December 30, 2010, by and between the Borrower and the Initial Purchaser.

 

(i)   “ Bond Year ” means each one-year period ending on December 1.

 

(j)   “ Bondowner ” means, collectively, the Initial Purchaser and any subsequent registered owners of the Bonds from time to time as shown in the books kept by the Disbursing Agent as bond registrar and transfer agent.

 

(k)   “ Bonds ” means, collectively, the Series A Bonds and the Series B Bonds.

 

(l)   “ Business Day ” means a London Banking Day and a day other than a Saturday, Sunday or legal holiday, on which banks are generally open for business in Boston, Massachusetts.

 

(m)   “ Closing Date ” means the date of delivery of the Bonds to the Bondowner against payment therefor.

 

(n)   “ Collateral ” means all personal property and fixtures of the Borrower of every kind and description, in each case whether now or hereafter existing, whether now owned or hereafter acquired, and located at or used in connection with the Project and the real property described in Exhibit A , including, but not limited to, all goods (including inventory and equipment and any accessions thereto), motor vehicles, and fixtures. Notwithstanding the foregoing or any other provision of this Agreement or any other Bond Document to the contrary, no Collateral which constitutes “investment property” within the meaning of Section 148(b) of the IRC will be deemed to secure the Borrower’s obligations with respect to the Bonds unless the Bondowner has received an Opinion of Bond Counsel to the effect that the Bonds may be so secured without causing the Bonds to be “arbitrage bonds” under Section 148 of the IRC.

 

(o)   “ Date of Taxability ” means a date on which interest on any Bond is no longer excludable from gross income for federal or Massachusetts income purposes as a result of an Event of Taxability.

 

(p)   “ Debt Service Fund ” means the fund so designated and established pursuant to Section 303.

 

(q)   “ Default Rate ” means an interest rate per annum equal to the interest rate per annum in effect on the Bonds immediately preceding the Event of Default to which the Default Rate relates, plus 5% per annum.

 

(r)   “ Event of Taxability ” means any one of the events herein after described. For purposes of this definition, “Bondowner” means any former or current Bondowner:

 

 

 

 

 

(s)   “ Fund ” means the Debt Service Fund, the Project Fund or any other fund established with the Disbursing Agent pursuant to this Agreement.

 

(t)   “ Government or Equivalent Obligations ” means (i) obligations issued or guaranteed by the United States; (ii) certificates evidencing ownership of the right to the payment of the principal of and interest on obligations described in clause (i), provided that such obligations are held in the custody of a bank or trust company satisfactory to the Bondowner, in a special account separate from the general assets of such custodian; and (iii) any open-end or closed-end management type investment company or trust registered under 15 U.S.C. §80(a)-l et seq.; provided that the portfolio of such investment company or trust is limited to obligations described in clause (i) and repurchase agreements fully collateralized by such obligations, and provided further that such investment company or trust shall take custody of such collateral either directly or through a custodian satisfactory to the Bondowner.

 

(u)   “ Guarantor ” means TechPrecision Corporation, a Delaware corporation.

 

(v)   “ Guaranty ” means the Guaranty (Unlimited) from the Guarantor to the Bondowner, dated as of December 30, 2010.

 

(w)   “ Initial Purchaser ” means Sovereign Bank.

 

(x)   “ IRC ” means the Internal Revenue Code of 1986, as it may be amended and applied to the Bonds from time to time.

 

(y)   “ London Banking Day ” means any day on which commercial banks are open for international business (including dealings in U.S. Dollar ($) deposits) in London, England and Boston, Massachusetts.

 

(z)   “ Moody’s ” means Moody’s Investors Service, Inc., or any successor rating agency.

 

(aa)   “ Mortgaged Property ” means, collectively, (i) the Collateral, and (ii) the real property described in the attached Exhibit A , all rights and easements appurtenant thereto, and all buildings, structures, fixtures, equipment, furnishings and improvements thereon, whether in existence on the date hereof or later coming into existence and whether owned by the Borrower on the date hereof or acquired hereafter, together with any additional real property not included in the foregoing provisions which may be added to the Mortgaged Property by a supplemental agreement.

 

(bb)   “ Opinion of Bond Counsel ” means an opinion of Bond Counsel to the effect that the matter or action in question will not have an adverse impact on the tax-exempt status of the Bonds for federal income tax purposes. Any Opinion of Bond Counsel required to be delivered in accordance with the provisions of the Agreement shall be provided at the sole cost and expense of the Borrower.

 

 

(cc)   “ Outstanding ,” when used to modify Bonds, refers to Bonds issued under this Agreement, excluding: (i) Bonds which have been exchanged or replaced, or delivered to the Disbursing Agent for credit against a principal payment or a sinking fund installment; (ii) Bonds which have been paid; (iii) Bonds which have become due and for the payment of which moneys have been duly provided; and (iv) Bonds for which there have been irrevocably set aside sufficient funds, or Government or Equivalent Obligations described in clause (i) or (ii) of Subsection 102(t) bearing interest at such rates, and with such maturities, as will provide sufficient funds to pay or redeem them; provided, however, that if any such Bonds are to be redeemed prior to maturity, the Agency shall have taken all action necessary to redeem such Bonds and notice of such redemption shall have been duly mailed in accordance with this Agreement.

 

(dd)   “ Payment Date ” means each date on which any principal of, premium, if any, or interest on any Bond is due and payable for any reason.

 

(ee)   “ Permitted Encumbrances ” shall have the meaning assigned in Section 201(b).

 

(ff)   “ Permitted Investment ” shall have the meaning assigned in Section 312(c).

 

(gg)   “ Person ” means an individual, corporation, limited liability company, partnership, joint venture, trust or unincorporated organization, or a government or any agency or political subdivision thereof.

 

(hh)   “ Project ” means the financing and refinancing of the acquisition of the manufacturing facility currently leased by the Borrower, the construction of an approximate 20,500 square foot addition thereto, and the improvement and equipping thereof, including the acquisition of a gantry milling machine, as described in the Application for Tax Exempt Financing, dated August 23, 2010, submitted to the Agency by the Borrower, together with all amendments thereto, and supplementary information provided to the Agency.

 

The word “ Project ” also refers to the facilities which result or have resulted from the foregoing activities, as more particularly described in the Tax Agreement.

 

(ii)   “ Project Costs ” means the costs of issuing the Bonds (not in excess of 2% of the initial principal amount of the Bonds) and carrying out the Project, including repayment of external loans and reimbursement to the Borrower of costs incurred for the Project and paid by the Borrower prior to the date of issuance of the Bonds (“ internal advances ”) to the extent permitted by this Agreement, and interest prior to, during and for up to one year after construction is substantially complete, but excluding general administrative expenses, overhead of the Borrower and interest on internal advances.

 

(jj)   “ Project Fund ” means the fund so designated and established pursuant to Section 401.

 

(kk)   “ Project Officer ” means the Borrower’s Chief Financial Officer.

 

(ll)   “ Purchase Date ” means sixty (60) days after the date on which the Borrower refinances the Bank Obligations with a lender other than the Bondowner.

 

(nn)   “ Rebate Calculation Date ” means December ___, 2015 and the maturity date of the Bonds.

 

(oo)   “ Repurchase Agreement ” shall have the meaning assigned in Section 312(c).

 

(pp)   “ Revenues ” means all debt service payments, rates, mortgage payments, rents, fees, charges, and other income and receipts, including proceeds of insurance, eminent domain and sale, and including proceeds derived from any security provided hereunder, payable to the Agency under this Agreement, excluding administrative fees of the Agency, reimbursements to the Agency for expenses incurred by the Agency, and indemnification of the Agency.

 

(qq)   “ S&P ” means Standard & Poor’s, a business of Standard & Poor’s Financial Services LLC, or any successor rating agency.

 

(rr)   “ Swap Agreement ” means, collectively, the ISDA Master Agreement (together with the Schedule thereto and each Confirmation issued thereunder), dated December 30, 2010, by and between the Borrower and the Bank.

 

(ss)   “ Series A Bonds ” means the $4,250,000 Massachusetts Development Finance Agency Revenue Bonds, Ranor Issue, Series 2010A, dated the date of delivery thereof, and any bond or bonds issued in exchange or replacement therefor.

 

(tt)   “ Series B Bonds ” means the $1,950,000 Massachusetts Development Finance Agency Revenue Bonds, Ranor Issue, Series 2010B, dated the date of delivery thereof, and any bond or bonds issued in exchange or replacement therefor.

 

(uu)   “ Tax Agreement ” means the Tax Certificate and Agreement, dated December 30, 2010, by and between the Agency and the Borrower.

 

(vv)   “ Taxable Rate ” means an interest rate per annum equal to the sum of LIBOR plus the 275 basis points.

 

(ww)   “ UCC ” means the Massachusetts Uniform Commercial Code.

 

Words importing persons include firms, associations and corporations, and the singular and plural form of words shall be deemed interchangeable wherever appropriate.

 

ARTICLE 2

THE CONVEYANCES; GRANTING OF SECURITY INTERESTS

(a)   The Mortgage . The Borrower grants to the Bondowner (i) WITH MORTGAGE COVENANTS the Mortgaged Property upon the terms hereof; (ii) all of its rights, title and interest in (A) all easements, bridges, rights of way, privileges, hereditaments, and appurtenances belonging to or inuring to the benefit of the Mortgaged Property; all right, title, and interest of the Borrower in and to land lying within any street or roadway adjoining the Mortgaged Property; and all right, title, and interest of the Borrower in and to any vacated or hereafter vacated street or road adjoining the Mortgaged Property; (B) any and all awards or payments, including interest thereon, and the right to receive the same, which may be made with respect to the Mortgaged Property as a result of (1) the exercise of the right of eminent domain, (2) the alteration of the grade of any street, or (3) any other injury to or decrease in the value of the Mortgaged Property, to the extent of all amounts which may be secured by this Agreement (including the reasonable counsel fees, costs, and disbursements incurred by the Bondowner in connection with the collection of such award or payment) at the date of receipt by the Bondowner of any such award or payment; (C) as lessor, under any leases of any of the Mortgaged Property, all of the rents and other payments required of lessees, tenants, occupants, licensees, concessionaires, or other persons or parties, whether or not designated as rent or additional rent (including, without limitation, security deposits, tax or operating expense escalation payments, percentage rent, or any other payments from any license, use, permit, or concession), and any other issues and profits arising from any rental units, space, or rentable facilities within, on or appurtenant to the Mortgaged Property or any portion thereof, and all of the Borrower’s contractual rights now existing or hereafter arising between the Borrower and any tenant or occupant with respect to any of the Mortgaged Property; (iii) to the extent the Mortgaged Property is or may be treated as personal property under the UCC, a security interest therein; and (iv) with respect to all of the foregoing, the products and proceeds thereof, including without limitation, all insurance proceeds; all to secure the payment of all sums required to be paid by the Borrower under this Agreement and the other Bond Documents, and the satisfaction and performance of all other covenants, agreements and obligations made or undertaken by the Borrower hereunder or under the other Bond Documents for the benefit of the Bondowner, the Disbursing Agent and the Agency.

 

This Agreement is upon the STATUTORY CONDITION and upon the further condition that all covenants, agreements and obligations of the Borrower hereunder will be observed and performed, and upon any Event of Default, as defined in Section 601, the Bondowner shall have, in addition to its other rights and remedies hereunder, the STATUTORY POWER OF SALE and any other rights granted by law.

 

(b)   Title . The Borrower represents and warrants that (i) it is lawfully seized in fee simple of the real property comprising the Mortgaged Property, free from all liens and encumbrances except those described in the attached Exhibit A (“ Permitted Encumbrances ”), (ii) the Borrower has, or at the time of the acquisition, construction and installation thereof will have, full title to the Collateral free from all liens and encumbrances, except Permitted Encumbrances, and (iii) the Borrower has the full right, power and authority to mortgage and pledge the Mortgaged Property hereunder. The Borrower covenants that it will warrant and defend the Mortgaged Property against the lawful claims and demands of all persons and that it will not permit any mortgage, lien or encumbrance to be filed or recorded on or against the Mortgaged Property, except Permitted Encumbrances, without the written consent of the Bondowner. The Borrower shall from time to time execute, deliver and register, record and file such instruments as the Bondowner may reasonably require to confirm, perfect or maintain the security created or intended to be created hereby.

 

 

The Agency assigns and pledges to the Bondowner upon the terms hereof (a) all Revenues to be received from the Borrower or derived from any security provided hereunder, (b) all rights to receive such Revenues and the proceeds of such rights, (c) all funds and investments held from time to time in the funds established under this Agreement, and (d) all of its right, title and interest in this Agreement, including enforcement rights and remedies but excluding certain rights of indemnification and to reimbursement of certain expenses as set forth herein. This assignment and pledge does not include: (i) the rights of the Agency pursuant to provisions for consent, concurrence, approval or other action by the Agency, notice to the Agency or the filing of reports, certificates or other documents with the Agency, (ii) the right of the Agency to any payments or reimbursements pursuant to Sections 309(e), 803, and 1007, or (iii) the powers of the Agency as stated herein to enforce the provisions hereof. As further security for its obligations to make payments to the Debt Service Fund, and for its other payment obligations under this Agreement, the Borrower grants to the Bondowner a security interest in its interest in the moneys and other investments held from time to time in the funds and accounts established under this Agreement.

 

 

When there are in the applicable account within the Debt Service Fund sufficient funds, or Government or Equivalent Obligations described in clause (i) or (ii) of Subsection 102(t) in such principal amounts, bearing interest at such rates and with such maturities as will provide sufficient funds to pay or redeem a series of Bonds in full, and when all other amounts due under the Bond Documents with respect to such series of Bonds have been paid and the rights hereunder and thereunder of the Agency, the Disbursing Agent and the Bondowner have been provided for, upon written notice from the Borrower to the Agency and the Bondowner, the Bondowner shall cease to be entitled to any benefit or security with respect to such series of Bonds under this Agreement except that the Bondowner shall have the right to receive payment of the funds deposited and held for payment and other rights which by their nature cannot be satisfied prior to or simultaneously with termination of the lien hereof (including obligations of the Borrower under Sections 306 and 1007), title to the Mortgaged Property shall revert to the Borrower, the security interests created by this Agreement (except in such funds and investments) shall terminate, and the Agency and the Bondowner shall execute and deliver such instruments as may be necessary to discharge the lien and security interests created hereunder; provided, however, that if any of such Bonds are to be redeemed prior to the maturity thereof, the Agency shall have taken all action necessary to redeem such Bonds and notice of such redemption shall have been duly given in accordance with this Agreement. Upon such defeasance, the funds and investments required to pay or redeem the Bonds in full shall be irrevocably set aside for that purpose, subject, however, to Section 314 hereof, and moneys held for defeasance shall be invested only as provided above in this section. Any funds or property held by the Disbursing Agent and not required for payment or redemption of the Bonds in full or to pay any other amounts owing under the Bond Documents shall, after satisfaction of all the rights of the Agency and after allowance for any payments required to be made pursuant to Section 306, be distributed to the Borrower upon such indemnification, if any, as the Agency and the Disbursing Agent may reasonably require.

 

 

ARTICLE 3

THE BORROWING

 

(a)   Details of the Bonds . The Series A Bonds shall be issued in fully registered form and in the original aggregate principal amount of $4,250,000, and shall be numbered from R-A-1 upwards in order of their issuance, or in any other manner deemed appropriate by the Agency. The Series A Bonds shall be in the minimum denomination of $100,000. The Series A Bonds shall be dated the date of delivery thereof. Principal and interest on the Series A Bonds until they come due shall be payable commencing on February 1, 2011 and on the first (1st) day of each month thereafter, in accordance with the Form of Bonds set forth in Section 301(b)(i). If any payment is due on a day which is not a Business Day, the payment shall be due on the next subsequent Business Day. The Series A Bonds shall mature on January 1, 2021, and shall bear interest at the rates per annum as set forth in the Form of Bonds in Section 301(b)(i), below.

 

The Series B Bonds shall be issued in fully registered form in the original aggregate principal amount of $1,950,000, and shall be numbered from R-B-1 upwards in order of their issuance, or in any other manner deemed appropriate by the Agency and the Trustee. The Series B Bonds shall be in the minimum denomination of $100,000. The Series B Bonds shall be dated the date of delivery thereof. Principal and interest on the Series B Bonds until they come due shall be payable commencing on February 1, 2011 and on the first (1st) day of each month thereafter, in accordance with the Form of Bonds set forth in Section 301(b)(ii). If any payment is due on a day which is not a Business Day, the payment shall be due on the next subsequent Business Day. The Series B Bonds shall mature on January 1, 2018, and shall bear interest at the rates per annum as set forth in the Form of Bonds in Section 301(b)(ii), below.

 

The Bonds shall be signed on behalf of the Agency by the manual or facsimile signature of an Authorized Officer, and the corporate seal of the Agency or a facsimile thereof shall be engraved or otherwise reproduced thereon. The authenticating certificate of the Disbursing Agent shall be manually signed on behalf of the Disbursing Agent.

 

In case any officer whose manual or facsimile signature shall appear on any Bond shall cease to be such officer before the delivery thereof, such manual or facsimile signature shall nevertheless be valid and sufficient for all purposes as if he or she had remained in office until after such delivery.

 

The Bonds are subject to special redemption and optional redemption, as described in Section 311 and in the Forms of Bonds.

 

(b)   Form of Bonds . (i) The Series A Bonds shall be issued in substantially the following form.

Registered No. R-A-___                                                                                                                     $___________

 

 

UNITED STATES OF AMERICA

COMMONWEALTH OF MASSACHUSETTS

MASSACHUSETTS DEVELOPMENT FINANCE AGENCY

Revenue Bonds

Ranor Issue, Series 2010A

INITIAL LIBOR RATE: ________________ Percent (____%) Per Annum

 

MATURITY DATE: January 1, 2021

 

DATE OF THIS BOND: December 30, 2010

(Date as of which the Bonds were initially issued.)

 

INITIAL RATE PERIOD: From the date of this Bond to and including January 31, 2011.

 

PAYMENT DATES: February 1, 2011 and the first (1st) day of each month thereafter to the MATURITY DATE or earlier redemption in full.

 

DATE OF REGISTRATION:

 

REGISTERED OWNER:

 

PRINCIPAL AMOUNT:

The Massachusetts Development Finance Agency (the “ Agency ”), for value received promises to pay to the REGISTERED OWNER of this bond, or registered assigns, but solely from the moneys to be provided under the Agreement mentioned below, in lawful money of the United States of America, in immediately available funds, the PRINCIPAL AMOUNT, in installments in the amounts as set forth on Schedule 1, commencing on January ___, 2011, and on each PAYMENT DATE thereafter, with the remaining principal balance due on the MATURITY DATE, unless paid earlier as provided below, with interest (computed on the basis of a 360-day year based on the actual number of days elapsed) on the PRINCIPAL AMOUNT outstanding from the most recent PAYMENT DATE to which interest has been paid or duly provided for or, if no interest has been paid, from the DATE OF THIS BOND, at the INITIAL LIBOR RATE per annum during the INITIAL RATE PERIOD, and thereafter at the LIBOR Rate (as defined below) per annum, as determined below for each Rate Period (as defined below), payable on each PAYMENT DATE, until the date on which this bond becomes due, whether at maturity or by acceleration or redemption. Notwithstanding the foregoing, if at any time an Event of Taxability occurs, the interest rate in effect on the Series A Bonds from and after the Date of Taxability shall be the Taxable Rate and following an Event of Default, the interest rate in effect on the Series A Bonds shall be the Default Rate. The Agency also shall pay to the Bondowner, but only from amounts available under the Agreement, a late charge for any payment of principal or interest not paid within fifteen (15) days following the date such payment is due equal to five percent (5.0%) of the amount of any such payment.

 

 

Unless otherwise defined herein, capitalized terms used in this bond shall have the same meanings assigned to them in the Mortgage, Loan and Security Agreement (the “ Agreement ”), dated as of December 1, 2010, by and among the Agency, Ranor, Inc. (the “ Borrower ”), and Sovereign Bank, as Bondowner and Disbursing Agent (the “ Disbursing Agent ”). As used in this bond, the following terms shall have the following meanings:

 

“ Effective Date ” means the date on which a new Rate Period takes effect. The first Effective Date shall be February 1, 2011 and thereafter shall be the first (1st) day of each month thereafter.

 

“ LIBOR ” means the rate per annum (rounded upward, if necessary, to the nearest 1/32 of one percent) for deposits in U.S. Dollars for a one-month period, which appears on the day that is two London Banking Days preceding the next Effective Date as of 11:00 a.m. London time (x) on the Telerate Page 3750 or (y) if such rate does not appear on the Telerate Page 3750, then as determined by the Bank from another recognized source or interbank quotation. In the event that the Board of Governors of the Federal Reserve System shall impose a Reserve Percentage with respect to LIBOR deposits of the REGISTERED OWNER of this bond, then for any period during which such Reserve Percentage shall apply, LIBOR shall be equal to the amount determined above divided by an amount equal to 1 minus the Reserve Percentage.

 

“ LIBOR Rate ” means 65% times the sum of (i) the Spread plus (ii) LIBOR.

 

“ Rate Period ” means, when used with respect to any particular LIBOR Rate, the period during which such rate of interest determined for the Bonds will remain in effect as described herein, which shall be the period commencing on each Effective Date and ending on the last day of the calendar month. A new interest rate shall take effect on each Effective Date.

 

“ Reserve Percentage ” means the maximum aggregate reserve requirement (including all basic, supplemental, marginal and other reserves), which is imposed on member banks of the Federal Reserve System against “Euro-currency Liabilities” as defined in Regulation D.

 

“ Spread ” means 275 basis points.

 

The record date for payment of interest is the Business Day preceding the date on which the interest is to be paid; provided that, with respect to overdue interest or interest payable on redemption of this bond other than on a PAYMENT DATE or interest on any overdue amount, the Disbursing Agent may establish a special record date. The special record date may not be more than five (5) days before the date set for payment. The Disbursing Agent will mail notice of a special record date to the Bondowner at least seven (7) days before the special record date. The Disbursing Agent will promptly certify to the Agency that it has mailed such notice to the Bondowner, and such certificate will be conclusive evidence that such notice was given in the manner required hereby.

 

 

This bond is one of a series of bonds (the “ Series A Bonds ”), in the aggregate principal amount of $4,250,000, being issued by the Agency under and in accordance with the laws of The Commonwealth of Massachusetts, including Massachusetts General Laws Chapter 23G, as amended, and resolutions duly adopted by the board of directors of the Agency, which resolutions also authorize the execution and delivery of the Agreement. The Series A Bonds are being issued pursuant to the Agreement. Simultaneously with the issuance of the Series A Bonds, the Agency is issuing its $1,950,000 Massachusetts Development Finance Agency Revenue Bonds, Ranor Issue, Series 2010B (the “ Series B Bonds ,” and together with the Series A Bonds, the “ Bonds ”). Pursuant to the Agreement, the Agency is loaning the proceeds of the Bonds to the Borrower for the purpose of financing and refinancing the Project (as defined in the Agreement). The Borrower has agreed to repay the borrowing in the amounts and at the times necessary to enable the Agency to pay the principal, premium, if any, and interest on the Bonds, and the Agency has assigned its rights to receive such funds to the Bondowner, subject to the provisions of the Agreement. Reference is made to the Agreement for a description of the funds pledged and the rights, limitations of rights, duties, obligations and immunities of the Borrower, the Agency and the Bondowner, including the order of payments in the event of insufficient funds. The Agreement may be amended to the extent and in the manner provided therein.

 

In case any Event of Default (as defined in the Agreement) occurs, the principal amount of this bond together with accrued interest may be declared due and payable in the manner and with the effect provided in the Agreement.

 

The Series A Bonds are redeemable pursuant to the Agreement prior to maturity, as a whole or in part on any PAYMENT DATE, in inverse order of principal installments due, at their principal amounts, without premium, plus accrued interest to the redemption date, (i) at the direction of the Borrower, (ii) from excess proceeds on deposit in the Project Fund created under the Agreement upon completion or termination of the Project, and (iii) in the event of a substantial loss to the Mortgaged Property, as defined in the Agreement, from insurance or condemnation award proceeds allocable to the Series A Bonds.

 

If less than all of the Outstanding Series A Bonds are to be called for redemption, the Series A Bonds to be redeemed will be selected by the Disbursing Agent by lot.

 

In the event this bond is selected for redemption, notice will be mailed not less than twenty (20) days prior to the redemption date to the REGISTERED OWNER at its address shown on the registration books maintained by the Disbursing Agent. Failure to mail notice to the owner of any other Series A Bond or any defect in the notice to such an owner shall not affect the redemption of this bond.

 

 

If this bond is of a denomination in excess of One Hundred Thousand Dollars ($100,000), portions of the principal amount in excess of One Hundred Thousand Dollars ($100,000) may be redeemed. If less than all of the principal amount is to be redeemed, upon surrender of this bond to the Disbursing Agent, there will be issued to the REGISTERED OWNER, without charge, a new bond or bonds, at the option of the REGISTERED OWNER, for the unredeemed principal amount.

 

Notice of redemption having been duly mailed, this bond, or the portion called for redemption, will become due and payable on the redemption date at the applicable redemption price and, the redemption price having been paid or moneys for the redemption having been deposited with the Disbursing Agent, from and after the date fixed for redemption interest on this bond (or such portion) will no longer accrue.

 

This bond is transferable by the REGISTERED OWNER, subject to the provisions of the Agreement, in person or by its attorney duly authorized in writing, at the office of the Disbursing Agent set forth above, upon surrender of this bond to the Disbursing Agent for cancellation. Upon the transfer, a new bond or bonds of the same aggregate principal amount will be issued to the transferee at the same office. No transfer will be effective unless represented by such surrender and reissue. This bond may also be exchanged at the office of the Disbursing Agent for a new bond or bonds of the same aggregate principal amount without transfer to a new registered owner. Exchanges and transfers will be without expense to the holder except for applicable taxes or other governmental charges, if any. The Disbursing Agent will not be required to make an exchange or transfer of this bond during the thirty (30) days preceding (i) any date fixed for redemption if this bond (or any part thereof) is eligible to be selected or has been selected for the redemption and (ii) the MATURITY DATE.

 

The Bonds are issuable only in fully registered form in the minimum denomination of One Hundred Thousand Dollars ($100,000).

 

The Agency, the Disbursing Agent and the Borrower may treat the REGISTERED OWNER as the absolute owner of this bond for all purposes, notwithstanding any notice to the contrary.

 

Neither the members of the Agency nor any Person executing this bond are liable personally hereon or subject to any personal liability or accountability by reason of the issuance hereof.

 

Upon the terms and conditions set forth in the Agreement, this bond is subject to mandatory tender by the REGISTERED OWNER on the Purchase Date at a price (the “ Purchase Price ”) equal to one hundred percent (100%) of the principal amount Outstanding, plus accrued interest, if any, to the Purchase Date, unless the REGISTERED OWNER shall give the Agency, the Disbursing Agent and the Borrower notice of its election to retain this bond by delivery to the Borrower, with a copy to the Agency and the Disbursing Agent, of a written notice substantially in the form of the Bondowner’s Non-Tender Election Notice set forth herein, not less than thirty (30) days prior to the Purchase Date. Upon receipt of the copy of the Bondowner’s Non-Tender Election Notice, the Disbursing Agent shall give notice to any other Bondowner of the receipt of such Bondowner’s Non-Tender Election Notice not less than fifteen (15) days prior to the Purchase Date. In the event there is more than one Bondowner and the registered owners of Bonds representing more than fifty percent (50%) of the principal amount of Bonds then Outstanding elect not to tender their Bonds for purchase, each Bondowner shall be deemed to have agreed irrevocably to retain their Bonds and that the Bonds shall not be subject to mandatory tender on the applicable Purchase Date. If the Borrower does not receive at least thirty (30) days prior to a Purchase Date Bondowner’s Non-Tender Election Notices from Bondowners representing more than fifty percent (50%) of the principal amount of Bonds then Outstanding, then the Bonds will be subject to mandatory tender and purchased on the applicable Purchase Date. THE OWNER OF THIS BOND, BY ACCEPTANCE HEREOF, AGREES TO SELL AND SURRENDER THIS BOND AT THE PURCHASE PRICE TO ANY PURCHASER DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT IN THE EVENT OF A MANDATORY TENDER AND, ON THE PURCHASE DATE, TO SURRENDER THIS BOND TO THE AGENCY FOR PAYMENT OF THE PURCHASE PRICE. The Purchase Price of this bond shall be paid to the REGISTERED OWNER by the Borrower on the Delivery Date, which shall be the Purchase Date or any subsequent Business Day on which this bond is delivered to the Agency for cancellation, with a copy to the Borrower. The Purchase Price of this bond shall be paid only upon surrender of this bond to the Agency as provided herein. From and after the Purchase Date, no further interest on this bond shall be payable to the REGISTERED OWNER, provided that there are sufficient funds available on the Purchase Date to pay the Purchase Price. Payment of the Purchase Price of this bond to the REGISTERED OWNER shall be made by the Borrower on the Purchase Date, if presentation and surrender of this bond to the Agency, with a copy to the Borrower, is made prior to 10:00 a.m. Boston, Massachusetts time on the Purchase Date, or on such later Business Day upon which presentation and surrender of this bond to the Agency, with a copy to the Borrower, is made prior to 10:00 a.m. Boston, Massachusetts time.

 

 

This bond will not be valid until the Certificate of Disbursing Agent has been signed by the Disbursing Agent.

 

 

CERTIFICATE OF DISBURSING AGENT

This bond is one of the Bonds described in the Agreement.

 

ASSIGNMENT

For value received the undersigned sells, assigns and transfers this bond to

Social Security or Other Identifying Number of Assignee

 

and irrevocably appoints ___________________ attorney-in-fact to transfer it on the books kept for registration of the bond, with full power of substitution.

 

 

 

SCHEDULE 1

Schedule of Principal Payments

[To be inserted]

NON-TENDER ELECTION NOTICE

Massachusetts Development Finance Agency

Revenue Bonds

Ranor Issue, Series 2010A

The undersigned hereby certifies that it is the registered owner of the Bonds described above (the “ Non-Tendered Bonds ”), and hereby agrees that the delivery of this instrument to the Agency, the Disbursing Agent and the Borrower constitutes an irrevocable election to retain the Non-Tendered Bonds and not to sell the Non-Tendered Bonds to the Borrower or its designee on the Purchase Date; provided, however, that the undersigned acknowledges and agrees that if there is more than one Bondowner, then the Non-Tendered Bonds nonetheless shall be subject to purchase by the Borrower or its designee on the Purchase Date unless the Owners of more than fifty percent (50%) of the principal amount of the Outstanding Bonds elect not to tender their Bonds for purchase on the next Purchase Date. The undersigned further acknowledges and agrees that, subject to the foregoing provision and subject to all other rights of the undersigned contained in the Bonds, this election notice is irrevocable.

Except as otherwise indicated herein and unless the context otherwise requires, the terms used herein shall have the meanings set forth in the Mortgage, Loan and Security Agreement, dated as of December 1, 2010, providing for the issuance of the Bonds.

 

 

IMPORTANT: The above signature(s) must correspond with the name(s) as set forth on the face of the Non-Tendered Bond(s) with respect to which this Bondowner’s Non-Tender Election Notice is being delivered without any change whatsoever. If this notice is signed by a person other than the registered owner of any Non-Tendered Bond(s), the Non-Tendered Bond(s) must be either endorsed on the Assignment appearing on each Bond or accompanied by appropriate bond powers, in each case signed exactly as the name or names of the registered owner or owners appear on the bond register. The method of presenting this notice to the Agency, the Disbursing Agent and the Borrower is the choice of the person making such presentation. If it is made by mail, it should be by registered mail with return receipt requested.

[End of Series A Bond Form]

 

(ii) The Series B Bonds shall be issued in substantially the following form.

UNITED STATES OF AMERICA

COMMONWEALTH OF MASSACHUSETTS

MASSACHUSETTS DEVELOPMENT FINANCE AGENCY

Revenue Bonds

Ranor Issue, Series 2010B

 

INITIAL LIBOR RATE: ________________ Percent (____%) Per Annum

 

MATURITY DATE: January 1, 2018

 

DATE OF THIS BOND: December 30, 2010

(Date as of which the Bonds were initially issued.)

 

INITIAL RATE PERIOD: From the date of this Bond to and including January 31, 2011.

 

PAYMENT DATES: February 1, 2011 and the first (1st) day of each month thereafter to the MATURITY DATE or earlier redemption in full.

 

DATE OF REGISTRATION:

 

REGISTERED OWNER:

 

PRINCIPAL AMOUNT:

The Massachusetts Development Finance Agency (the “ Agency ”), for value received promises to pay to the REGISTERED OWNER of this bond, or registered assigns, but solely from the moneys to be provided under the Agreement mentioned below, in lawful money of the United States of America, in immediately available funds, the PRINCIPAL AMOUNT, in installments in the amounts as set forth on Schedule 1, commencing on January ___, 2011, and on each PAYMENT DATE thereafter, with the remaining principal balance due on the MATURITY DATE, unless paid earlier as provided below, with interest (computed on the basis of a 360-day year based on the actual number of days elapsed) on the PRINCIPAL AMOUNT outstanding from the most recent PAYMENT DATE to which interest has been paid or duly provided for or, if no interest has been paid, from the DATE OF THIS BOND, at the INITIAL LIBOR RATE per annum during the INITIAL RATE PERIOD, and thereafter at the LIBOR Rate (as defined below) per annum, as determined below for each Rate Period (as defined below), payable on each PAYMENT DATE, until the date on which this bond becomes due, whether at maturity or by acceleration or redemption. Notwithstanding the foregoing, if at any time an Event of Taxability occurs, the interest rate in effect on the Series B Bonds from and after the Date of Taxability shall be the Taxable Rate and following an Event of Default, the interest rate in effect on the Series B Bonds shall be the Default Rate. The Agency also shall pay to the Bondowner, but only from amounts available under the Agreement, a late charge for any payment of principal or interest not paid within fifteen (15) days following the date such payment is due equal to five percent (5.0%) of the amount of any such payment.

 

 

Unless otherwise defined herein, capitalized terms used in this bond shall have the same meanings assigned to them in the Mortgage, Loan and Security Agreement (the “ Agreement ”), dated as of December 1, 2010, by and among the Agency, Ranor, Inc. (the “ Borrower ”), and Sovereign Bank, as Bondowner and Disbursing Agent (the “ Disbursing Agent ”). As used in this bond, the following terms shall have the following meanings:

 

“ Effective Date ” means the date on which a new Rate Period takes effect. The first Effective Date shall be February 1, 2011 and thereafter shall be the first (1st) day of each month thereafter.

 

“ LIBOR ” means the rate per annum (rounded upward, if necessary, to the nearest 1/32 of one percent) for deposits in U.S. Dollars for a one-month period, which appears on the day that is two London Banking Days preceding the next Effective Date as of 11:00 a.m. London time (x) on the Telerate Page 3750 or (y) if such rate does not appear on the Telerate Page 3750, as determined by the Bank from another recognized source or interbank quotation. In the event that the Board of Governors of the Federal Reserve System shall impose a Reserve Percentage with respect to LIBOR deposits of the REGISTERED OWNER of this bond, then for any period during which such Reserve Percentage shall apply, LIBOR shall be equal to the amount determined above divided by an amount equal to 1 minus the Reserve Percentage.

 

“ LIBOR Rate ” means 65% times the sum of (i) the Spread plus (ii) LIBOR.

 

“ Rate Period ” means, when used with respect to any particular LIBOR Rate, the period during which such rate of interest determined for the Bonds will remain in effect as described herein, which shall be the period commencing on each Effective Date and ending on the last day of the calendar month. A new interest rate shall take effect on each Effective Date.

 

“ Reserve Percentage ” means the maximum aggregate reserve requirement (including all basic, supplemental, marginal and other reserves), which is imposed on member banks of the Federal Reserve System against “Euro-currency Liabilities” as defined in Regulation D.

 

“ Spread ” means 275 basis points.

 

 

The record date for payment of interest is the Business Day preceding the date on which the interest is to be paid; provided that, with respect to overdue interest or interest payable on redemption of this bond other than on a PAYMENT DATE or interest on any overdue amount, the Disbursing Agent may establish a special record date. The special record date may not be more than five (5) days before the date set for payment. The Disbursing Agent will mail notice of a special record date to the Bondowner at least seven (7) days before the special record date. The Disbursing Agent will promptly certify to the Agency that it has mailed such notice to the Bondowner, and such certificate will be conclusive evidence that such notice was given in the manner required hereby.

 

This bond is one of a series of bonds (the “ Series B Bonds ”), in the aggregate principal amount of $1,950,000, being issued by the Agency under and in accordance with the laws of The Commonwealth of Massachusetts, including Massachusetts General Laws Chapter 23G, as amended, and resolutions duly adopted by the board of directors of the Agency, which resolutions also authorize the execution and delivery of the Agreement. The Series B Bonds are being issued pursuant to the Agreement. Simultaneously with the issuance of the Series B Bonds, the Agency is issuing its $4,250,000 Massachusetts Development Finance Agency Revenue Bonds, Ranor Issue, Series 2010A (the “ Series A Bonds ,” and together with the Series B Bonds, the “ Bonds ”). Pursuant to the Agreement, the Agency is loaning the proceeds of the Bonds to the Borrower for the purpose of financing and refinancing the Project (as defined in the Agreement). The Borrower has agreed to repay the borrowing in the amounts and at the times necessary to enable the Agency to pay the principal, premium, if any, and interest on the Bonds, and the Agency has assigned its rights to receive such funds to the Bondowner, subject to the provisions of the Agreement. Reference is made to the Agreement for a description of the funds pledged and the rights, limitations of rights, duties, obligations and immunities of the Borrower, the Agency and the Bondowner, including the order of payments in the event of insufficient funds. The Agreement may be amended to the extent and in the manner provided therein.

 

In case any Event of Default (as defined in the Agreement) occurs, the principal amount of this bond together with accrued interest may be declared due and payable in the manner and with the effect provided in the Agreement.

 

The Series B Bonds are redeemable pursuant to the Agreement prior to maturity, as a whole or in part on any PAYMENT DATE, in inverse order of principal installments due, at their principal amounts, without premium, plus accrued interest to the redemption date, (i) at the direction of the Borrower, (ii) from excess proceeds on deposit in the Project Fund created under the Agreement upon completion or termination of the Project, and (iii) in the event of a substantial loss to the Mortgaged Property, as defined in the Agreement, from insurance or condemnation award proceeds allocable to the Series B Bonds.

 

If less than all of the Outstanding Series B Bonds are to be called for redemption, the Series B Bonds to be redeemed will be selected by the Disbursing Agent by lot.

 

In the event this bond is selected for redemption, notice will be mailed not less than twenty (20) days prior to the redemption date to the REGISTERED OWNER at its address shown on the registration books maintained by the Disbursing Agent. Failure to mail notice to the owner of any other Series B Bond or any defect in the notice to such an owner shall not affect the redemption of this bond.

 

 

If this bond is of a denomination in excess of One Hundred Thousand Dollars ($100,000), portions of the principal amount in excess of One Hundred Thousand Dollars ($100,000) may be redeemed. If less than all of the principal amount is to be redeemed, upon surrender of this bond to the Disbursing Agent, there will be issued to the REGISTERED OWNER, without charge, a new bond or bonds, at the option of the REGISTERED OWNER, for the unredeemed principal amount.

 

Notice of redemption having been duly mailed, this bond, or the portion called for redemption, will become due and payable on the redemption date at the applicable redemption price and, the redemption price having been paid or moneys for the redemption having been deposited with the Disbursing Agent, from and after the date fixed for redemption interest on this bond (or such portion) will no longer accrue.

 

This bond is transferable by the REGISTERED OWNER, subject to the provisions of the Agreement, in person or by its attorney duly authorized in writing, at the office of the Disbursing Agent set forth above, upon surrender of this bond to the Disbursing Agent for cancellation. Upon the transfer, a new bond or bonds of the same aggregate principal amount will be issued to the transferee at the same office. No transfer will be effective unless represented by such surrender and reissue. This bond may also be exchanged at the office of the Disbursing Agent for a new bond or bonds of the same aggregate principal amount without transfer to a new registered owner. Exchanges and transfers will be without expense to the holder except for applicable taxes or other governmental charges, if any. The Disbursing Agent will not be required to make an exchange or transfer of this bond during the thirty (30) days preceding (i) any date fixed for redemption if this bond (or any part thereof) is eligible to be selected or has been selected for the redemption and (ii) the MATURITY DATE.

 

The Bonds are issuable only in fully registered form in the minimum denomination of One Hundred Thousand Dollars ($100,000).

 

The Agency, the Disbursing Agent and the Borrower may treat the REGISTERED OWNER as the absolute owner of this bond for all purposes, notwithstanding any notice to the contrary.

 

Neither the members of the Agency nor any Person executing this bond are liable personally hereon or subject to any personal liability or accountability by reason of the issuance hereof.

 

Upon the terms and conditions set forth in the Agreement, this bond is subject to mandatory tender by the REGISTERED OWNER on each Purchase Date at a price (the “ Purchase Price ”) equal to one hundred percent (100%) of the principal amount Outstanding, plus accrued interest, if any, to the Purchase Date, unless the REGISTERED OWNER shall give the Agency, the Disbursing Agent and the Borrower notice of its election to retain this bond by delivery to the Borrower, with a copy to the Agency and the Disbursing Agent, of a written notice substantially in the form of the Bondowner’s Non-Tender Election Notice set forth herein, not less than thirty (30) days prior to the Purchase Date. Upon receipt of the copy of the Bondowner’s Non-Tender Election Notice, the Disbursing Agent shall give notice to any other Bondowner of the receipt of such Bondowner’s Non-Tender Election Notice not less than fifteen (15) days prior to the Purchase Date. In the event there is more than one Bondowner and the registered owners of Bonds representing more than fifty percent (50%) of the principal amount of Bonds then Outstanding elect not to tender their Bonds for purchase, each Bondowner shall be deemed to have agreed irrevocably to retain their Bonds and that the Bonds shall not be subject to mandatory tender on the applicable Purchase Date. If the Borrower does not receive at least thirty (30) days prior to a Purchase Date Bondowner’s Non-Tender Election Notices from Bondowners representing more than fifty percent (50%) of the principal amount of Bonds then Outstanding, then the Bonds will be subject to mandatory tender and purchased on the applicable Purchase Date. THE OWNER OF THIS BOND, BY ACCEPTANCE HEREOF, AGREES TO SELL AND SURRENDER THIS BOND AT THE PURCHASE PRICE TO ANY PURCHASER DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT IN THE EVENT OF A MANDATORY TENDER AND, ON THE PURCHASE DATE, TO SURRENDER THIS BOND TO THE AGENCY FOR PAYMENT OF THE PURCHASE PRICE. The Purchase Price of this bond shall be paid to the REGISTERED OWNER by the Borrower on the Delivery Date, which shall be the Purchase Date or any subsequent Business Day on which this bond is delivered to the Agency for cancellation, with a copy to the Borrower. The Purchase Price of this bond shall be paid only upon surrender of this bond to the Agency as provided herein. From and after the Purchase Date, no further interest on this bond shall be payable to the REGISTERED OWNER, provided that there are sufficient funds available on the Purchase Date to pay the Purchase Price. Payment of the Purchase Price of this bond to the REGISTERED OWNER shall be made by the Borrower on the Purchase Date, if presentation and surrender of this bond to the Agency, with a copy to the Borrower, is made prior to 10:00 a.m. Boston, Massachusetts time on the Purchase Date, or on such later Business Day upon which presentation and surrender of this bond to the Agency, with a copy to the Borrower, is made prior to 10:00 a.m. Boston, Massachusetts time.

 

 

This bond will not be valid until the Certificate of Disbursing Agent has been signed by the Disbursing Agent.

 

CERTIFICATE OF DISBURSING AGENT

This bond is one of the Bonds described in the Agreement.

 

ASSIGNMENT

For value received the undersigned sells, assigns and transfers this bond to

 

 

 

Social Security or Other Identifying Number of Assignee

 

and irrevocably appoints ___________________ attorney-in-fact to transfer it on the books kept for registration of the bond, with full power of substitution.

 

 

SCHEDULE 1

Schedule of Principal Payments

[To be inserted]

NON-TENDER ELECTION NOTICE

Massachusetts Development Finance Agency

Revenue Bonds

Ranor Issue, Series 2010B

The undersigned hereby certifies that it is the registered owner of the Bonds described above (the “ Non-Tendered Bonds ”), and hereby agrees that the delivery of this instrument to the Agency, the Disbursing Agent and the Borrower constitutes an irrevocable election to retain the Non-Tendered Bonds and not to sell the Non-Tendered Bonds to the Borrower or its designee on the Purchase Date; provided, however, that the undersigned acknowledges and agrees that if there is more than one Bondowner, then the Non-Tendered Bonds nonetheless shall be subject to purchase by the Borrower or its designee on the Purchase Date unless the Owners of more than fifty percent (50%) of the principal amount of the Outstanding Bonds elect not to tender their Bonds for purchase on the next Purchase Date. The undersigned further acknowledges and agrees that, subject to the foregoing provision and subject to all other rights of the undersigned contained in the Bonds, this election notice is irrevocable.

Except as otherwise indicated herein and unless the context otherwise requires, the terms used herein shall have the meanings set forth in the Mortgage, Loan and Security Agreement, dated as of December 1, 2010, providing for the issuance of the Bonds.

                                

 

IMPORTANT: The above signature(s) must correspond with the name(s) as set forth on the face of the Non-Tendered Bond(s) with respect to which this Bondowner’s Non-Tender Election Notice is being delivered without any change whatsoever. If this notice is signed by a person other than the registered owner of any Non-Tendered Bond(s), the Non-Tendered Bond(s) must be either endorsed on the Assignment appearing on each Bond or accompanied by appropriate bond powers, in each case signed exactly as the name or names of the registered owner or owners appear on the bond register. The method of presenting this notice to the Agency, the Disbursing Agent and the Borrower is the choice of the person making such presentation. If it is made by mail, it should be by registered mail with return receipt requested.

[End of Series B Bond Form]

 

 

(c)   Replacement of Bonds . Replacement Bonds shall be issued pursuant to applicable law as a result of the destruction, loss or mutilation of the Bonds. The costs of a replacement shall be paid or reimbursed by the applicant, who shall indemnify the Agency, the Disbursing Agent, and the Borrower against all liability and expense in connection therewith.

 

(d)   Event of Taxability . The Agency and the Bondowner will afford the Borrower prompt notice of any inquiry or investigation by the Internal Revenue Service or the Massachusetts Department of Revenue or the receipt of a statutory notice of deficiency or any Opinion of Bond Counsel described in clause (ii) of Section 102(r), that are known to the Agency or the Bondowner, as applicable, and the opportunity, at the Borrower’s sole cost and expense, to contest:

 

 

 

The Borrower shall pay to the Agency and the Bondowner a supplemental payment to reimburse the Agency and the Bondowner for any interest, penalties or other charges assessed to them, if any, by reason of an Event of Taxability (including any interest penalties or other charges assessed to a Bondowner for failure to include interest on the Bonds in the Bondowner’s gross income prior to the date of an Event of Taxability) (hereinafter, “ Unpaid Tax Penalties ”). The Borrower shall make such payments of Unpaid Tax Penalties to the Agency and to any Person who presents written proof satisfactory to the Disbursing Agent that as of the Date of Taxability, such Person was a Bondowner. Any Unpaid Tax Penalties which are not paid upon an Event of Taxability shall continue as an obligation of the Borrower, and the payment of all Unpaid Tax Liabilities due and owing shall be required prior to the defeasance of this Agreement pursuant to Section 203.

 

Notwithstanding the foregoing or any provision of the Form of Bonds as set forth in Section 301(b) to the contrary, if following an Event of Taxability, it is subsequently determined that the interest payable on the Bonds is properly excluded from the gross income of the owners thereof for Federal or Massachusetts income tax purposes, as applicable, then the calculation of the interest rate, as set forth in the Form of Bonds in Section 301(b), shall be determined as if no Event of Taxability had occurred, provided that the interest rate shall be adjusted in order to compensate the Borrower for any increase imposed in the rate of interest on the Bonds from and after the original Date of Taxability. Such adjustment to the interest rate shall be made such that the Borrower shall be fully compensated in not longer than a twelve-month period.

 

 

(e)   Bonds Are Not General Obligations . The Bonds do not now and shall never constitute a general obligation or debt or pledge of the faith and credit of the Agency, nor a debt or pledge of the faith and credit of the Commonwealth, and each covenant and undertaking by the Agency herein and in the Bonds to make payments is not a general obligation of the Agency or a debt or a pledge of the faith and credit of the Commonwealth, but is a limited obligation payable solely from the revenues and other funds provided under this Agreement and is a valid claim of the Bondowner only against such revenues and other funds. Nothing herein shall be construed as requiring the Agency to use any funds or revenues from any source other than the Revenues.

 

 

Upon the receipt of the proceeds of the Bonds, such proceeds shall be used to reimburse the Borrower for certain internal advances, to pay the cost of issuing the Bonds and the Agency’s administrative fee, and the balance shall be deposited in the Project Fund to be applied either directly or indirectly through reimbursement to the Borrower to pay Project Costs, subject to the requirements of Section 401 hereof.

 

 

A Debt Service Fund is hereby established with the Disbursing Agent, and within such a Fund, a Series A Account and a Series B Account, and moneys shall be deposited therein as provided in this Agreement. The moneys in the Series A Account of the Debt Service Fund and any investments held as part of such account shall be held in trust and, except as otherwise provided, shall be applied solely to the payment of the principal, redemption premium, if any, and interest on the Series A Bonds. The moneys in the Series B Account shall be held in trust, and except as otherwise provided, shall be applied solely to the payment of the principal, redemption premium, if any, and interest on the Series B Bonds. The Disbursing Agent shall apply moneys in the applicable account within the Debt Service Fund to the payment of the respective series of Bonds on each date on which a payment is to be made. Notwithstanding the foregoing, upon prior agreement with the Disbursing Agent and the Bondowner, the Borrower may make payments of principal and interest due on the Bonds directly to the Bondowner, without deposit into the accounts within the Debt Service Fund, through direct debiting of its accounts by the Bondowner or otherwise, and in such event no Debt Service Fund shall be established with the Disbursing Agent, except to the extent necessary in accordance with Section 203.

 

 

 

 

(a)   Payments of Rebate . No later than thirty (30) days following each Rebate Calculation Date (or any earlier date that may be necessary to make a required payment to the United States under Subsection 306(c)), the Borrower shall compute and certify to the Agency and the Bondowner in reasonable detail the amount of the Excess (as defined in Subsection 306(b)), if any, as of each such Rebate Calculation Date.

 

(b)   Excess . “ Excess ” means the sum of: