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the date of settlement, by the Guarantor and the Financing Institution in accordance with the guaranteed and unguaranteed percentages, respectively. All net recoveries after the date of settlement shall be shared on the same basis. The date of settlement shall be the thirtieth (30th) day after the date on which either party, after maturity of the loan, receives from the other party a written request for such settlement, or any other date agreed on by the parties.
(B) Expenses shall mean all reasonable out-of-pocket expenses (including reasonable counsel fees incurred by the Financing Institution or the Reserve Bank prior to but not after any purchase under this agreement) which relate to the enforcement of the loan or the preservation of the collateral and which are incurred during the period of any default in the payment of principal or interest.
SEC. 3. Agreement to purchase. The Guarantor will at any time and from time to time prior to the date of settlement purchase such portion of the obligation as may be demanded in writing by the Financing Institution, by paving to the Financing Institution, on the tenth (10th) day after the receipt by the Reserve Bank of such a demand, the unpaid principal amount of the portion of the obllgation to be purchased, as of the date of the demand, plus all unpaid accrued interest on such amount, with appropriate ad justment for guarantee fees, computed as of the date of purchase; provided that in no event shall the total amount of the portion of the obligation owned by the Guarantor exceed the guaranteed percentage.
SEC. 4. Voluntary purchase by guarantor. The Guarantor may, at any time upon its demand, purchase the guaranteed percentage of the obligation, less any amounts previously purchased under this agreement and not repaid, and shall pay therefor on the basis stated in section 3. In such event, at the option of the Financing Institution or the Guarantor, the Financing Istitution shall forthwith transfer possession of the obligation and collateral in the manner provided in section 5.
SEC. 5. Administration of loan and possession of obligation and collateral. (A) The Financing Institution shall administer the loan until it transfers possession of the obligation and collateral to the Reserve Bank as provided below, and thereafter the Guarantor shall administer the loan. Whenever the Guarantor purchases any part of the obligation, the Financing Institution shall forthwith deliver to the Reserve Bank a certificate evidencing the Guarantor's ownership Interest in the obligation and collateral. In any such case, however, upon written demand by the Reserve Bank, the Financing Institution shall forthwith transfer to the Reserve Bank, without recourse or warranty except as to the genuineness of the Borrower's signature to any instrument, such possession of, title
to, and rights to enforce the obligation and all collateral therefor as it may have. Thereupon the Reserve Bank shall issue to the Financing Institution a certificate evidencing the Financing Institution's ownership interest in the obligation and collateral. Either party administering the loan may (1) release and dispose of collateral and proceeds thereof, and permit substitution therefor, all in accordance with the terms of the loan, and (2) after five days' written notice to the other party, bring any action to enforce the loan.
(B) Nothing in this agreement shall prevent the Financing Institution from transferring the obligation as collateral for advances by a Federal Reserve Bank,
Sec. 6. Ratable application of collections. All amounts at any time paid or credited on the obligation, from whatever sources realized, shall be applied ratably for the benefit of the Financing Institution and the Guarantor according to their respective ownership interests in the obligation. Except as may be provided in the loan, the Financing Institution shall not be required to credit on the obligation the proceeds of any banker's lien or right of set-off with respect to funds of the Borrower (exclusive of proceeds of contracts on Exhibit C to Appendix I) or of other assets, to the extent that the Financing Institution has provided that such lien, right of set-off or other assets shall be security for other indebtedness of the Borrower to it.
Sec. 7. Fees payable to guarantor. The Financing Institution shall pay to the Reserve Bank at the end of each monthly or quarterly period, as fixed by the Reserve Bank, an amount equal to percent of any interest payable by the Borrower on the average daily amounts of that part of the unpaid principal of the obligation which the Guarantor was obligated during such period to purchase upon demand of the Financing Institution.
Sec. 8. Effect of violation of agreement. (A) If the Financing Institution shall violate, or fail to comply with, any of the terms of this agreement or any of the terms or conditions of the loan or shall through gross negligence make a material misrepresentation of fact in the application therefor, or in anything constituting a part of the application, It shall become liable to the Guarantor in an amount equal to the damages sustained by the latter by virtue of such violation, failure to comply, or misrepresentation; but the Guarantor shall not be relieved by such violation, failure to comply, or misrepresentation from any of its obligations to the Financing Institution under this agreement.
(B) In the absence of gross negligence on the part of the Financing Institution, (1) no invalidity or ineffectiveness of any collateral or of any assignment thereof accepted by the Financing Institution, and (2) no action or omission to act on the part of the Financing Institution in reliance on a statement or certificate signed by an appropriate officer
or member of the Borrower with respect to the financial condition, business or operations of the Borrower, shall constitute a violation of, or failure to comply with, any of the terms of this agreement or any of the terms or conditions of the loan on the part of the Financing Institution. No invalidity of any provision of the loan arising from statute or decision of any court shall in any way relieve the Guarantor hereunder.
SEC. 9. Officials not to benefit. No member of or delegate to Congress or resident commissioner shall be admitted to any share or part of this contract or to any benefit that may arise therefrom, but this provision shall not be construed to extend to this contract if made with a corporation for its general benefit.
IN WITNESS WHEREOF, the parties have caused this agreement to be executed on their behalf by their duly authorized agents this day of
(Guarantor) By Federal Reserve Bank of Fiscal Agent of the United States By---
contract, in its entirety, which has been terminated in whole or in part. "The Con. tracts" shall mean such terminated war contracts, if any, as may now be listed on Exhibit C annexed, and as the Borrower may from time to time add thereto by supplement approved by the Financing Institution.
2. Maturity. The loan shall mature thirty (30) days after final payment of the amounts due, upon final and conclusive settlement, on the war contracts of the Borrower or upon
194.-, whichever is earlier, and all notes issued hereunder shall thereupon become due and payable. If any note of shorter maturity is issued, the Borrower may from time to time until the maturity of the loan again borrow hereunder the unpaid amount of such note, subject to the provisions of paragraph 6 hereof. The Borrower may at any time by written notice reduce the maximum principal amount of the loan in multiples of $--
3. Interest. The Borrower shall pay interest as prescribed in Exhibit A.
4. Commitment fee and expenses. The Borrower shall pay quarterly a commitment fee at the rate of ---% per annum on the average daily unused balance of the maxi. mum principal amount of the loan. The Borrower shall reimburse the Financing Institution for reasonable out-of-pocket es. penses incurred in connection with the loan and the application therefor.
5. Collateral. Prior to or contemporaneously with any borrowing hereunder, the Borrower, except and to the extent that the Financing Institution otherwise agrees in writing, will assign to the Financing Institution as security for the loan all moneys due and to become due on the Contracts. At any time upon request of the Financing Institution or the Guarantor, the Borrower will furnish additional security by assigning to the Financing Institution the moneys due and to become due on any or all of its termi. nated war contracts which by using its best efforts the Borrower can assign and which have not been previously assigned hereunder. All proceeds of assignments made hereunder and of any other collateral taken by the Financing Institution for the loan shall be applied to the indebtedness under the loan. Except to secure borrowings hereunder, except as provided in Exhibit D, and except to be cure partial payments made to the Borrower by any contracting agency, the Borrower will not (a) assign, or suffer to remain assigned, moneys due or to become due on any of the Contracts, or (b) mortgage, pledge, or otherwise encumber, or suffer to remain encumbered for more than inventory allocable to the Contracts.
6. Conditions of borrowing. The Finance ing Institution shall not be required to make any advance hereunder (a) unless the Borrower furnishes to the Financing Institution a loan formula certificate in the form annexed hereto as Exhibit B, dated not more than
days before the date of the proposed borrowing, which shows a borrow
(herein called “Borrower"), up to a maximum principal amount of $.
--- at any one time outstanding, by lending to the Borrower at any time and from time to time on promissory notes in the form annexed hereto as Exhibit A and in accordance with the terms and conditions of this agreement.
1. Definitions. All terms defined in the Contract Settlement Act of 1944 and in the Guarantee Agreement shall have the same meaning when used in this agreement. "Terminated war contract" shall mean a war
ing base, calculated in accordance with the percentages therein specified, of not less than the amount that will be outstanding after the proposed borrowing, or (b) if any event exists which constitutes or which, except for notice or lapse of time or both, would constitute a default specified in this agreement, or (c) to the extent that the Financing Institution has reason to believe that the borrowing base stated in the loan formula certificate is substantially overstated in value and has so notified the Borrower in writing, provided that the Financing Institution may rely upon the borrowing base shown in the loan formula certificate.
7. Reports. The Borrower shall maintain proper records and accounts, permit such inspection thereof, and furnish such statements and reports, including audit reports, as the Financing Institution or the Guarantor may from time to time reasonably request. In any event, within three (3) months after the initial borrowing and not less than quarterly thereafter the Borrower shall furnish to the Financing Institution periodic reports in triplicate made up as follows:
(a) A balance sheet, certified by an appropriate officer or member of the Borrower, as of a date not more than days prior to the date of furnishing the report.
(b) A loan formula certificate in the form of Exhibit B, dated not more than ------ days before the date of furnishing the report, unless such a certificate has been furnished within thirty (30) days before such date.
(c) A statement of the nature, amounts, and dates of all payments on any assigned terminated war contracts and on the Contracts, whether or not assigned, in cash or by offset or otherwise (except any offset theretofore deducted in any loan formula certificate) between the date of the initial borrowing or the last date covered by the last report, whichever is later, and a date not more than fifteen (15) days prior to the date of such a statement. Payments shall be deemed to include the proceeds of collateral taken for the loan, or proceeds of, or specific credit with respect to, any sale, retention or other disposition of inventory allocable to such contracts, approved or authorized by the proper authority, and the cost or proceeds, whichever is greater, of any such inventory which the Borrower has definitively elected to retain without specific credit therefor.
8. Reduction of notes. The Borrower shall pay down the unpaid principal amount of the notes by an amount equal to: (a) All payments, as described in Paragraph 7 (c), within three (3) days from the date of any such payment or within such further time as the Financing Institution may prescribe; and (b) any excess of outstanding borrowings over the borrowing base shown in the most recent loan formula certificate, upon the date of furnishing such certificate: Provided, That, while the Financing Institution may rely upon the borrowing base
shown in such certificate, such borrowing base shall be decreased to the extent that the Financing Institution or the Guarantor has reason to believe that it is substantially overstated in value and has so notified the Borrower in writing, in which event the Borrower shall pay, in addition, an amount equal to any excess resulting from such decrease, within ten (10) days after the mailing of such notice.
9. Maintenance of working capital. The Borrower shall maintain net current assets, as determined in accordance with generally accepted principles of accounting and including in current liabilities all borrowings outstanding hereunder, of not less than
10. Insurance. The Borrower shall maintain insurance on its property in such amounts and against such risks as is customarily maintained by similar businesses operating in the same vicinity.
11. Other provisions. The parties hereto agree to any additional provisions appearing in Exhibit D annexed.
12. Events of default. The occurrence of any one of the following events shall constitute a default hereunder:
(a) Any statement, representation, warranty, certificate, schedule or report furnished by the Borrower in connection with the loan shall prove to have been materially false at the date thereof.
(b) Nonpayment of the principal of any of the notes outstanding hereunder when due; or nonpayment of interest or any commitment fee within ten (10) days after the due date thereof.
(c) Breach by the Borrower of any other provision of this agreement.
(d) The Borrower shall be adjudicated a bankrupt or a trustee or a receiver shall be appointed for the Borrower or of a substantial part of its property in any involuntary proceeding, or any court shall have taken jurisdiction of the property of the Borrower or of a substantial part thereof in any Involuntary proceeding for the reorganization, dissolution, liquidation or winding up of the Borrower, and such trustee or receiver shall not be discharged or such jurisdiction relinquished or vacated or stayed on appeal or otherwise stayed within thirty (30) days, or the Borrower shall file a petition or answer, not denying jurisdiction, in voluntary bankruptcy or under Chapter X or Chapter XI of the Federal Bankruptcy Act or any similar law, State or Federal, whether now or hereafter existing, or such a petition filed against the Borrower shall be approved and not vacated or stayed within thirty (30) days, or shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts generally as they become due, or shall consent to the appointment of a receiver or trustee or liquidator of all of its property or a substantial part thereof, or shall have failed within thirty (30) days to bond or otherwise discharge any at
625507—45-SUPP, VII-BK. 2_91
(b) Prircipal amount of proposed borrowing, less outstanding borrowings to be refunded..
tachment or to pay any judgment which is unstayed on appeal.
If there shall occur any default as defined In item (a) above or if there shall occur and be continuing any default as defined in items (b) or (c) above, then upon the election of the Financing Institution or the Guarantor, evidenced by written notice to the Borrower, or if there shall occur any default as defined in item (d) above, then forthwith and without any election, the obligation, if any, of the Financing Institution to extend further credit shall terminate and all notes outstanding hereunder shall become due and payable without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on their behalf by their duly authorized agents, this day of
2. The following amounts have been calculated as of
1944 (not more than 30 days prior to the date of this certificate) with respect to terminated war contracts listed on or added to Exhibit C, in accordance with accepted principles of accounting and without duplications:
(a) -% of accounts receivable from Governmental contracting agencies aggregating not less than $
(b) .-% of accounts receivable from others aggregating not less than $.-
(c) % of reimbursable expenditures for inventory, including only direct labor, costs of materials, and manufacturing and administrative overhead aggregating not less than $.
(d) % of reimbursable amounts for subcontract settlements paid or to be paid concurrently from any new borrowing for which this certificate is furnished aggregating not less than
194.-. On or before
194.---, for value received,
hereby promises to pay to the order of
(Address) the principal sum of dollars ($---- -) in lawful money of the United States, and to pay interest thereon from the date hereof at the rate of percent per annum, prior to maturity, payable on the
day of each and after maturity by acceleration or otherwise at the rate of
percent per annum. This note evidences a borrowing made under and is subject to the terms of a Loan Agreement dated
194.-, between the undersigned and the payee hereof.
(aa) Unliquidated advance payments, progress and partial payments, and any other offsets, and any amounts included in (a), (b), (c), or (d) above which have been disallowed by the contracting agency--
or (d) above with respect to any item on
3. No amount is included in (a), (b), (c), which & termination claim can be based which exceeds the amount of sucb in the Borrower's most recent nation claim, if any has been filed. There has been no change in the amount stated in Paragraph 2 since the date therein specified which would materially decrease the borrow. ing base.
4. No event exists which constitutes, of which except for notice or lapse of time or both would constitute, a default specified in the Loan Agreement. Dated:
(Title) EXHIBIT B-LOAN FORMULA CERTIFICATE Pursuant to the Loan Agreement between the undersigned and
dated 194.-, the undersigned hereby certifies to the best of its knowledge and belief as follows:
1. (a) Principal amount of borrowings now outstanding-
EXHIBIT DOTHER PROVISIONS OF LOAN
(See Paragraph 11 of Loan Agreement)
EXPLANATORY NOTES APPROVED BY THE DIRECTOR
OF CONTRACT SETTLEMENT WITH RESPECT TO STANDARD FORMS OF T-LOAN GUARANTEE AGREEMENT AND TERMINATION LOAN AGREEMENT
NOTE: Technical amendments not affecting policy may be made in the Explanatory Notes by agreement among the War and Navy Departments, the Maritime Commission and the Federal Reserve Board.
Opening Paragraph (1) The guarantee agreement is issued pursuant to the authority contained in the Contract Settlement Act of 1944, the First War Powers Act, 1941, Executive Order 9112, the Act of June 11, 1942 (56 Stat. 351), and other pertinent provisions of law. No changes in the guarantee agreement will be permitted except in the most unusual cases and then only with the concurrence of the Board of Governors of the Federal Reserve System.
(2) Pursuant to section 10 (a) (1) of the Contract Settlement Act of 1944, the Guarantor in its authorization or through its local representative will notify the Federal Reserve Bank in writing that the Borrower is or has been engaged in performing an operation deemed by the Guarantor to be connected with or related to war production.
Section 1 (A) (3) If one Financing Institution is authorized, as agent for a number of participants,
(Title) to execute à guarantee agreement in their behalf, the participants should be referred to as “each bank trust company or other financing institution which is or shall be a party to the loan described in Appendix I annexed hereto" or by some other appropriate reference showing the several nature of the agreement.
Section 1 (C) (4) Since the guarantee agreement covers only the loan described in Appendix I, any material alteration in the terms of the loan should be made only with the written consent of the Guarantor in order that the loan, as altered, will be covered by the guarantee.
Section 1 (E) (5) The requested percentage of guarantee will not ordinarily be questioned by the Federal Reserve Bank or the Guarantor if it does not exceed 90 per cent.
Section 2 (B) (6) Counsel fees incurred by the Financing Institution after a purchase cannot be shared by the Guarantor because of the provisions of 5 U S. C. 314.
Section 3 (7) It is contemplated that a purchase made by the Guarantor under this section shall be for cash. However, if the Guarantor owns an interest in any obligation which has been issued under a revolving credit arrangement, and if, at or before the maturity of such obligation, the Reserve Bank receives written demand from the Financing Institution for the purchase of the same or a lesser amount of a new obligation to be issued in place of such maturing obligation, the payment for the portion of the new obligation purchased pursuant to such demand will be