HomeMy WebLinkAboutResolutions - 1997.05.08 - 25136May 8, 1997
MISCELLANEOUS RESOLUTION 1197096
BY: PLANNING AND BUILDING COMMITTEE, CHARLES E. PALMER, CHAIRPERSON
IN RE: DEVELOPMENT AND PLANNING DIVISION RESOLUTION APPROVING PROJECT PLAN
(STONE SOAP COMPANY, INC. PROJECT) - CITY OF PONTIAC
To Oakland County Board of Commissioners
Chairperson, Ladies and Gentlemen:
WHEREAS The Economic Development Corporation of the County of Oakland
(the "EDC") has recommended that the Board of Commissioners approve the
Project Plan required by the Economic Development Corporations Act (the "Act")
for the captioned Project, a copy of which has been presented to this meeting
(the "Project Plan"); and
WHEREAS the EDC's recommendations to the Board of Commissioners were
based upon its determinations that the Project is reasonable and necessary to
effectuate the purposes of the Act and that the Project Plan satisfies all of
the requirements of the Act regarding project plans; and
WHEREAS the governing body of the City of Pontiac, Oakland County,
Michigan, has also approved the Project Plan and given its consent to the
exercise of jurisdiction over the Project by the EDC; and
WHEREAS the Board of Commissioners has held a public hearing to consider
whether the Project Plan constitutes a public purpose as contemplated by the
Act; and
WHEREAS the Board of Commissioners, following such public hearing and
its review of the Project Plan, concurs in the determinations of the EDC with
respect thereto;
NOW THEREFORE BE IT RESOLVED that the Project Plan is hereby determined
to constitute a public purpose as contemplated by the Act and is hereby
approved; and
BE IT FURTHER RESOLVED that the EDC is hereby authorized to take such
steps as are necessary to implement the Project and the financing thereof by
the issuance of its limited obligation revenue bonds as contemplated by the
Project Plan; and
BE IT FURTHER RESOLVED that the County Clerk is hereby directed to
provide four certified copies of this resolution to the Assistant Secretary of
the Board of the EDC.
Chairperson, on behalf of the Planning and Building Committee, I move
the adoption of the foregoing resolution.
PL ING AND BUILDING,,COMMITTEE
, M.( 7. 1997 3:14PM HOWARD&HOWARD O. 7543 P. 2/11
THE ECONOMIC DEVELOPMENT CORPORATION
OF THE COUNTY OF OAKLAND
Oakland County, Michigan
Stone Soap Company, Inc. Project
PROJECT PLAN
CONTENTS
1. Summary Description of Project (Page 1)
2. Project Plan Certification by Company (Page 2)
3. Statutorily Required Information (Page 3)
4. Exhibits
"A" - Project Area Legal Description
"B" - Letter of Credit or Bond Purchaser's Commitment Letter
"C" - Company Certificate Regarding Transfer of Employment
Other
03/07/97 FRI 16:04 [TX/RI NO 9097)
. MAR. 7. 1997 3: I4PM HOWARD&HOWARD NO. 7543 P. 3/11
PROJECT PLAN
SUMMARY DESCRIPTION OF
STONE SOAP COMPANY, INC. PROJECT
OWNER OF PROJECT:
Stone Soap Company, Inc., a Michigan corporation
CONTACT PERSON: (Name, address, telephone number)
Kenneth Stone, President
1490 Franklin
Detroit, Michigan 48207 (313) 259-6000
LOCATION OF PROJECT: (Local municipality)
City of Pontiac
PROJECT AREA/DISTRICT AREA: See Exhibit A
NATURE OF PROJECT:
Acquiring and renovating existing facilities and acquiring new machinery and equipment.
EMPLOYMENT CREATED OR RETAINED:
20 permanent jobs created
26 existing jobs retained
TOTAL PROJECT COST:
$4,000,000
BONDS TO BE ISSUED:
$3,000,000
LETTER OF CREDIT ISSUER OR BOND PURCHASER:
MICHIGAN NATIONAL BANK
DATE AND EXPIRATION DATE OF LETTER OF CREDIT OR BOND PURCHASIE
COMMITMENT:
03/07/97 FRI 16:04 [TX/RX NO 6097]
MAR. 7. 1997 3:'10M HOWARD&HOWARD NO. 7543 P. 4/11
PROJECT PLAN CERTIFICATION
THIS PROJECT PLAN WAS PREPARED FOR THE ECONOMIC
DEVELOPMENT CORPORATION OF THE COUNTY OF
OAKLAND IN ACCORDANCE WITH THE REQUIREMENTS
OF THE ECONOMIC DEVELOPMENT CORPORATIONS ACT,
ACT NO. 338 OF THE MICHIGAN PUBLIC ACTS OF 1974, AS
AMENDED.
THE UNDERSIGNED HAS PROVIDED ALL OF THE
INFORMATION CONTAINED HEREIN AND HEREBY
CERTIFIES AS TO THE ACCURACY AND VALIDITY OF
SUCH INFORMATION AS OF THIS DATE.
THE UNDERSIGNED UNDERSTANDS THAT THIS PROJECT
PLAN IS STATUTORILY REQUIRED AND, IF IT CONTAINS
ANY MATERIAL MISREPRESENTATION OR INACCURACY,
COULD RESULT IN THE INVALIDATION OF THE
ECONOMIC DEVELOPMENT CORPORATION PROCEED-
INGS REGARDING THE PROJECT TO WHICH THE PROJECT
PLAN PERTAINS.
STONE SOAP COMPANY, INC.
Its: President
Dated: MARCH 10, 1997
03/07/97 FRI 16:04 [TX/RI NO 6097]
2
MAR. T 1997 3:15PM HOWARD&HOWARD NO. 7543 P. 5/11
PROJECT PLAN
STATUTORELY REQUIRED INFORMATION REGARDING
STONE SOAP COMPANY, INC. PROJECT
L THE LOCATION AND EXTENT OF EXISTING STREETS AND 011E4
PUBLIC FACILITIES WITHIN THE PROJECT DISTRICT AREA; THE LOCATIO ,
CHARACTER, AND EXTENT OF THE CATEGORIES OF PUBLIC AND PRIVATE LAM?
USES NOW EXISTING AND PROPOSED FOR THE PROJECT AREA. INCLUDING
RESIDENTIAL, RECREATIONAL, COMMERCIAL, INDUSTRIAL, EDUCATIONAL, ANI
OTHER USES; AND A LEGAL DESCRIPTION OF THE PROJECT AREA:
2000-18 PONTIAC ROAD PONTIAC, MICHIGAN - 1 BLOCK NORTH OF ORCHARD LAKE RO
WEST OF TELEGRAPH ROAD. ( SITE LOCATION MAP ON SURVEY ENCLOSED ) EXISTING'
6.15 ACRES OF INDUSTRIAL LAND CONSISTING OF TWO LIGHT INDUSTRIAL WAREHOUSE ,
BUILDINGS. TOTAL SQUARE FEET OF EXISTING BUILDING T6TALS 114,460 SQ. FT. !
Legal description of Project Area attached as Exhibit A. ( ENCLOSED )
II. A DESCRIPTION OF EXISTING IMPROVEMENTS IN THE PROJECT AREA
TO BE DEMOLISHED, REPAIRED, OR ALTERED; A DESCRIPTION OF REPAIRS AND
ALTERATIONS; AND AN ESTIMATE OF THE TIME REQUIRED FOR COMPLETION:
MAJOR RENOVATIONS OF THE TWO BUILDINGS WILL BE NECESSARY, WHICH INCLUDE
INTERIOR WALLS, ELECTRICAL WORK, PLUMBING, UPGRADE OF SHOP FLOORING.
EXTERIOR WORK AS DEEMED NECESSARY INCLUDING THE ROOF. A 60 TO 90 DAY
TIME PERIOD IS ESTIMATED FOR COMPLETION.
III. THE LOCATION, EXTENT. CHARACTER, AND ESTIMATED COST OF THE
IMPROVEMENTS, INCLUDING REHABILITATION CONTEMPLATED FOR THE PROJECT
AREA, AND AN ESTIMATE OF THE TIME REQUIRED FOR COMPLETION:
THE TWO BUILDINGS TO BE UPDATED WITH A SPRINKLER SYSTEM. MAJOR WATER AND
PLUMBING WORK WHICH IS REQUIRED FOR OUR MANUFACTURING PROCESS. ALSO, UP
TO THREE TRUCK WELLS TO BE INSTALLED IN THE SMALLER BUILDING. IMPROVED
OFFICE AND PLANT EMPLOYEE RESTROOMS AND LOCKER ROOM FACILITIES, ETC. THE
ESTIMATED TIME OF COMPLETION IS 60 TO 90 DAYS. THE COST OF ALL REPAIRS
AND IMPROVEMENTS IS ESTIMATED AT $500,000.
3
03/07/97 FRI 16:04 [TX/RX NO 60971
MAR, 7. 1997 3:15PM HOWARD&HOWARD NO, 7543 P. 6/11
*
IV. A DESCRIPTION OF THE CONSTRUCTION OR STAGES 0
CONSTRUCTION PLANNED, AND THE ESTIMATED TIME OF COMPLETION OF EAC1
STAGE:
SEE #2 & 3 ABOVE
V. A DESCRIPTION OF THE PARTS OF THE PROJECT AREA TO BE LEFT AS
OPEN SPACE AND THE USE CONTEMPLATED FOR THE SPACE:
NOT APPLICABLE
VI. A DESCRIPTION OF PORTIONS OF THE PROJECT AREA WHICH THE
ECONOMIC DEVELOPMENT CORPORATION OR THE COMPANY DESIRES TO SEUL,
DONATE, EXCHANGE OR LEASE TO OR FROM THE MUNICIPALITY AND THE
PROPOSED TERMS:
Not Applicable
4
03/07/97 FRI 16:04 [TI/RX NO 60971
MAR. 7. 1997' 3":T5PM- HOWARD&HOWARD NO. 7543 P. 7/11
•
VII. A DESCRIPTION OF DESIRED ZONING CHANGES AND CHANGES 1$1
STREET, STREET LEVELS, INTERSECTIONS AND UTILITIES:
NOT APPLICABLE
VIII. A DESCRIPTION OF THE PROPOSED METHOD OF FINANCING THE
PROJECT, INCLUDING ATTACHMENT OF A COPY OF THE LETTER OF CREDIT OR
BOND PURCHASER'S COMMITMENT LETTER:
$3,000,000 INDUSTRIAL REVENUE BOND *
$1,000,000 EQUITY
* BONDS TO BE PLACED BY W.Y. CAMPBELL & COMPANY
Copy of Letter of Credit or bond purchaser's commitment letter attached as Exhibit B.
IX. A STATEMENT REGARDING THE PAYMENT OF PREVAILING WAGE ANI,
FRINGE BENEFIT RATES AS DETERMINED PURSUANT TO ACT NO. 166 OF THE
MICHIGAN PUBLIC ACTS OF 1965, AS AMENDED (REGARDING WAGES ON STATE
CONTRACTS):
Not Applicable.
5
03/07/97 FRI 16:04 [TX/RX NO 6097]
04/21/97 08:19 FAX 810 645 0748 ROBERT SCHWARTZ 1002
X. A LIST OF PERSONS WHO WILL MANAGE OR BE ASSOCIATED WITH
THE MANAGEMENT OF THE PROJECT FOR A PERIOD OF NOT LESS THAN I (ONE)
YEAR FROM THE DATE OF APPROVAL OF THE PROJECT PLAN:
KENNETH STONE - PRESIDENT
STEVEN STONE - VICE PRESIDENT
STONE SOAP COMPANY, INC.
STONE SOAP COMPANY, INC.
XI. DESIGNATION OF THE PERSON OR PERSONS, NATURAL OR
CORPORATE, TO WHOM THE PROJECT IS TO BE LEASED, SOLD OR CONVEYED AND
FOR WHOSE BENEFIT THE PROJECT IS BEING UNDERTAKEN, TO THE EXTENT THAT
INFORMATION IS PRESENTLY AVAILABLE:
STONE SOAP COMPANY, INC. AND RKS PROPERTIES, L.L.C.
3cII. IF THERE IS NOT AN EXPRESS OR IMPLIED AGREEMENT WITH A
PERSON OR PERSONS, NATURAL OR CORPORATE, THAT THE PROJECT WILL BE
LEASED, SOLD, OR CONVEYED TO THOSE PERSONS, THE PROCEDURES FOR
BIDDING FOR THE LEASING, PURCHASING OR CONVEYING OF THE PROJECT UPON
ITS COMPLETION: .
NOT APPLICABLE
XIII. ESTIMATES OF THE NUMBER OF PERSONS RESIDING IN THE PROJECT
AREA AND THE NUMBER OF FAMILIES AND INDIVIDUALS TO BE DISPLACED. IF
OCCUPIED RESIDENCES ARE DESIGNATED FOR ACQUISITION AND CLEARANCE,
INCLUDE A SURVEY OF THE FAMILIES AND INDIVIDUALS TO BE DISPLACED,
INCLUDING THEIR INCOME AND RACIAL COMPOSITION, A STATISTICAL
DESCRIPTION OF THE HOUSING SUPPLY IN THE COMMUNITY, INCLUDING THE
NUMBER OF PRIVATE AND PUBLIC UNITS IN EXISTENCE OR UNDER
CONSTRUCTION, THE CONDITION OF THOSE IN EXISTENCE, THE NUMBER OF
OWNER-OCCUPIED AND RENTER-OCCUPIED UNITS, THE ANNUAL RATE OF
6
a 9/11 MAR. 7. 1997 3: 16Pli HOWARD&HOWARD
TURNOVER OF THE VARIOUS TYPES OF HOUSING AND THE RANGE OF RENTS ANp
SALE PRICES, AN ESTIMATE OF THE TOTAL DEMAND FOR HOUSING IN THE
COMMUNITY, AND THE ESTIMATED CAPACITY OF PRIVATE AND PUBLIC HOUSING
AVAILABLE TO DISPLACED FAMILIES AND INDIVIDUALS:
NOT APPLICABLE
XIV. A PLAN FOR ESTABLISHING PRIORITY FOR T'HE RELOCATION OF
PERSONS DISPLACED BY THE PROJECT IN NEW HOUSING IN THE PROJECT AREA:
Not Applicable
XV. PROVISION FOR THE COSTS OF RELOCATING PERSONS DISPLACED By
THE PROJECT AND FINANCIAL ASSISTANCE AND REIMBURSEMENT OF EXPENSES,
INCLUDING LITIGATION EXPENSES AND EXPENSES INCIDENT TO THE TRANSFqt
OF TITLE, IN ACCORDANCE WITH THE STANDARDS AND PROVISIONS OF THE
FEDERAL UNIFORM RELOCATION ASSISTANCE AND REAL PROPERTY ACQUISITION
POLICIES ACT OF 1970, 42 U.S.C. 4601 TO 4655:
Not Applicable
7
03/07/97 FRI 16:04 [TX/RX NO 6097]
XVI. A PLAN FOR COMPLIANCE WITH ACT NO. 227 OF THE MICHIGAN
PUBLIC ACTS OF 1972, WHICH PERTAINS TO PROVIDING FINANCIAL ASSISTANCE.
ADVISORY SERVICES AND REIMBURSEMENT OF CERTAIN EXPENSES TO
DISPLACED PERSONS:
Not Applicable
XVII. OTHER MATERIAL AS THE ECONOMIC DEVELOPMENT CORPORATION,
LOCAL PUBLIC AGENCY, OR GOVERNING BODY CONSIDERS PERTINENT:
Not Applicable
8
03/07/97 FRI 16:04 [TX/RX NO 60971
EXHIBIT A
City of Pontiac •
Parcel I: Part of Lot 1, "Asseisor's Plat Vb. 78", parts of the Southwest and
Southeast 1/4 of Section 31, Town 3 North, Range 10 East, City of Pontiac,
Oakland County, Michigan, according to the plat thereof as recorded in Liber 1
of Plats, Page 78, Assessor's Plat, Oakland County Records, described as
follows: Beginning at the Southwest corner of said Lot 1, said point of
beginning being also the Southwest corner of Section 31, Pontiac Township and
City; thence North 87 degrees 03 minutes East, 159.15 feet to the
Northwesterly right-of-way line of the Michigan Air Line Railroad; thence
North 35 degrees 09 minutes 30 seconds East along said right-of-way line,
630.3 feet; thence North 51 degrees 12 minutes West, 460.7 feet to the
Northwesterly line of said Lot 1; thence South 33 degrees 58 minutes West
.along said Northwesterly line of said Lot, 329,8 feet; thence South 2 degrees
.17 minutes East along the West line of said Lot, 539 feet to the point of
beginning.
Tax Item No. 14-31-351-006
Mownship of Bloomfield
Parcel II: Part of Lot 175, "Sylvan Lake Subdivision NO. 3", Townships of
Waterford, Bloomfield and West Bloomfield, Oakland County, Michigan, according
to the Plat thereof as recorded in Liber 9 of Plats, Page 6, Oakland County
Records, described as follows: Beginning at the Northwest corner of said Lot,
said point of beginning being also the Northwest corner of Section 6,
Bloomfield Township, Oakland County, Michigan; thence North 87 degrees 03
minutes East, 148.98 feet to the Northwesterly right-of-way line of the
Michigan Air Line Railroad; thence South 35 degrees 09 minutes 30 seconds
West, 137.5 feet to the North line of Pontiac Drive; thence South 88 degrees
07 minutes West along said Pontiac Drive, 65.3 feet; thence North 2 degrees
17 minutes West, 107 feet to the point of beginning.
Tax Item No. 19-06-101-001
11/12/96 TUE 17:02 (TI/RI NO 5390]
TO 918109759555 P.02/18 APR 07'97 16:42 FR DYKEMA GOSSETT BHO
Michigan National Bank°
Metropolitan Banking West
24101 Novi Road, Suite 101
Novi, Michigan 48375
April 8, 1997
RKS Properties, L.L.C.
Stone Soap Company, Inc.
1490 Franklin
Detroit, Michigan 48207
Re: Letter of Credit to Secure Economic Development Bonds
Dear Ladies and Gentlemen:
I am pleased to inform you that Michigan National Bank (the "Bank")
has approved the credit arrangement described below, which involves the
issuance of an irrevocable direct pay letter of credit to be issued by
the Bank for the joint account of RKS Properties, L.L.C. ("RKS")and Scone
Soap Company, Inc_ ("Stone Soap"; collectively, the "Borrower" or the
"Borrowers"), in connection with the related issuance of bonds (the
"Bonds") by the Economic Development Corporation of the County of Oakland
or the Michigan Strategic Fund (the "Issuer"), subject to all rules and
regulations governing the Bank and to the following terms and conditions:
DIRECT PAY LETTER OF CREDIT
A. J,ETTER OF CREDIT.
1. Acesaunt Party. The Letter of Credit described below will be.
issued for the account of the Borrowers, which shall be the primary
obligors under the Reimbursement Agreement (as defined in paragraph A(8)
below).
2. Amount. The Bank will issue for the account of the Borrowers
an irrevocable direct pay letter of credit (the "Letter of Credit") in
a maximum amount of $3,059,178,08, representing $3,000,000 of principal,
plus 60 days of interest in the maximum amount of $59,178.08. The amount
of the Letter of Credit from time to time, as reduced as provided herein,
is referred to herein as the "Stated Amount.- The Stated Amount shall
be reduced on a dollar-for-dollar basis for each payment of principal
made with respect to the Bonds. $2,440,888 of the principal amount of
the Bonds shall be used to finance the purchase of the real property
described in Exhibit B attached hereto (the "Real Estate") and the
renovation thereof and the costs of issuing the Bonds (the "Real Estate
Portion"). The remaining $559,112 of the principal amount shall be used
to finance the purchase of new mahinery and equipment (the "Equipment")
04/07/97 MON 16:55 [TX/RX NO 9665]
TO 918109759555 P.03/18 APR 07'97 18:43 FR DYKEMA GOSSETT RHO
RKS Properties, L.L.C.
Stone Soap Company, Inc.
April 8, 1997
Page 2
to be installed at the Real Estate (the "Equipment Portion"). The
Equipment Portion of the Bonds shall be paid in full no later than nine
(9) years after the date of issuance of the Letter of Credit. The Real
Estate Portion of the Bonds shall be paid in full no later than fifteen
(15) years after the date of issuance of the Letter of Credit.
3. Expiration. The Letter of Credit will expire on the earliest
to occur of (i) the date which is fifteen (15) days after the fifth
anniversary of the date of issuance of the Letter of Credit, subject to
renewal as hereafter set forth (the "Stated Expiration Date"); (ii) the
Trustee for the Bondholders (the "Trustee") suri .endering the Letter of
Credit to the Bank for cancellation, (iii) the Bank honoring principal
drafts and interest drafts for all outstanding Bonds, (iv) there being
no Bonds remaining outstanding under the Indenture pursuant to which the
Bonds are issued, or (v) the sixteenth day following receipt by the
Trustee of notice from the Bank of an "Event of Default" under the
Reimbursement Agreement and directing the Trustee to accelerate the
Bonds, or on any other substantially similar dates hereafter agreed to
by the Bank in its sole discretion.
Provided that no events of default then exist under any of the
Letter of Credit and/or Bond Documents, and the Borrowers pay the Bank
the annual letter of credit fee then payable, the letter of Credit will
be renewed by the Bank effective as of the fifth and the tenth
anniversary dates of issuance of the Letter of Credit.
4. Limitation on Draws. The Bank shall have no obligation to
honor any request for draws under the Letter of Credit in excess of the
Stated Amount as the same is subject to reduction from time to time.
S. pond cpunsel's opinion. As a condition to the Bank's
obligation to issue the Letter of Credit, the Bank shall have first
received an opinion of bond counsel satisfactory to the Bank covering
such matters as the Bank may reasonably require. In this regard, it is
understood that interest on the Bonds is expected to be exempt from
taxation under the Internal Revenue Code and under the laws of the State
of Michigan. Such opinion shall be satisfactory in form and substance
to the Bank.
6. Draws on Letter of Credit. Draws shall be permitted under the
Letter of Credit as provided therein, limited to payment of principal or
purchase price of the Bonds and interest thereon, in the maximum
aggregate amount of the Stated Amount.
7. Fees. The Borrower shall pay to the Bank (i) a fully earned,
non-refundable commitment fee in the amount of $15,265.90, which shall
be paid in full simultaneously with the Borrower's execution and return
64/07/97 MON 16:55 ETX/RX NO 98851
TO 918109759555 P.04/18 APR, 07'97 16:43 FR DYKEMA GOSSETT BHO
US Properties, L.L.C.
Stone Soap Company, Inc.
April 8, 1997
Page 3
of this commitment to the Bank, and (ii) on or before the date of
issuance of the Letter of Credit and annually thereafter on each
anniversary of the date of issuance of the Letter of Credit, a Letter of
Credit fee in an amount equal to one percent (1%) of the Stated Amount
of the Letter of Credit on each such respective date, until the
expiration or earlier termination of the Letter of Credit, provided,
however, that the amount of such annual Letter of Credit fee may, at the
Bank's sole discretion, upon 90 day's prior written notice to the
Borrower, be changed as of the fifth and tenth anniversaries of the
issuance of the Letter of Credit (a "Reset Date"), to reflect changes in
the prevailing charges by the Bank in connection with the issuance of
letters of credit and changes in the financial condition of the Borrower
since the issuance of the Letter of Credit or the last Reset Date, as the
case may be. Each such fee shall be earned when due and shall only be
subject to refund or reduction as set forth in the Reimbursement
Agreement referred to in Section 8 below. In addition, the Borrower
shall pay all actual out-of-pocket expenses incurred by the Bank in
connection with the transaction contemplated hereby, including without
limitation: surveying, appraisal, escrow and recording fees and title
insurance premiums. The Borrower also agrees to reimburse the Bank for
reasonable legal fees charged by Dykema Gossett PLLC in connection with
such transaction. The Borrower shall be obligated tc pay all such costs
regardless of whether this transaction is closed.
8. Repayment. The Borrower shall execute a Reimbursement
Agreement (the "Reimbursement Agreement") satisfactory to the Bank and
the Borrower providing, among other things, for the immediate repayment
by the Borrower of all amounts drawn on the Letter of Credit and any
other sums due to the Bank in connection with the credit arrangement
contemplated hereby and thereby. All payments made by the Bank under the
Letter of Credit shall be deemed advances under a line of credit approved
by the Bank solely for the purpose of funding the Letter of Credit. Such
sums due but unpaid shall bear interest from the date of the draw on the
Letter of Credit at the default rate specified in paragraph 9 below.
Payments due or anticipated to be due under the Reimbursement Agreement
shall be made by the Borrower by depositing such amounts in a segregated
account established with the Bank for such purpose. With respect to any
monthly payments on the Bonds, such amounts shall be deposited at least
15 days prior to the date of the draw. With respect to payments on the
Bonds due less frequently than monthly, pro-rata quarterly deposits shall
be made so that a sufficient amount shall be in the account at least 15
days prior to the date of the draw_
In the event that the Letter of Credit is drawn uocn for the payment
of principal thereon, except for principal payments expressly scheduled
and/or except on account of any Event of Default under the Letter of
Credit Documents, the amount of such advances shall be deemed to be term
04/07/97 MON 16:55 [TX/RX NO 9885]
TO 918109759555 P.05/18 APR 07'97 16:43 FR DYKEMA GOSSETT BHO
RKS Properties, L.L.C.
Stone Soap Company, Inc.
April 8, 1997
Page 4
loans from the Bank to the Borrowers, jointly and severally, which loans
shall accrue interest at the Bank's designated Prime Rate, and shall be
due and payable as follows:
Zquisoment Portion: monthly interest only first year; equal monthly
payments of principal, plus interest for years 2 through 6, with
balance due and payable 6 years after issuance of the Letter of
Credit.
Real Estate Portion: monthly interest only years 1 through 3; equal
monthly, combined payments of principal and interest for years 4 and
5 based upon a 12 year mortgage amortization, with balance due and
payable 5 years after issuance of the Letter of Credit.
9. Default_InterestiRate. At any time there is a default under
the Reimbursement Agreement or any of the other Letter of Credit
Documents (as defined in paragraph C(1) below), interest shall accrue on
the sums due to the Bank at the Bank's designated Prime Rate plus two
hundred fifty (250) basis points, such race to change automatically each
time the designated Prime Rate changes.
B. BONDS
1. Principal Amount. The Bonds shall be issued by the Issuer for
the benefit of the Borrowers secured by the Letter of Credit. The Bonds
shall not exceed the principal amount of $3,000,000. The Letter of
Credit shall secure only the Borrower's obligations for repayment of
principal and interest relating to the Bonds. No disbursement of Bond
proceeds in excess of $2,400,000 shall be made at any time the Borrowers
have a combined debt service coverage ratio of less than 1.05 to 1,
computed based upon the current principal disbursements then outstanding,
plus the proposed disbursement, and a hypothetical amortization of such
principal, from the date of the proposed disbursement, of 15 years for
the outstanding Real Estate Portion and of 6 years for the outstanding
Equipment Portion.
2. Amortization of Principal. The principal of the Bonds will be
paid in accordance with the redemption schedule attached as Exhibit A,
with equal quarterly payments deposited by Borrowers in a segregated
account at the Bank to assure that adequate funds are available to
reimburse the Bank for draws made under the Letter of credit to make such
redemptions.
3. The Issuer and Trustee_2ecurity. The Issuer and the Trustee
shall be granted by the Borrower only such Security (as defined in
paragraph B(7) below) for the Bonds and Bond-related obligations as may
04/07/97 MON 16:55 [TX/RX NO 98851
TO 918109759555 P.06/18 APR 07'97 16:44 FR DYKEMA GOSSETT BHO
RKS Properties, L.L.C.
Stone Soap Company, Inc.
April 8, 1997
Page 5
be satisfactory to the Bank in its sole discretion_ In no event may the
Issuer or the Trustee be granted any security interest in any property
of the Borrower in which the Bank also is granted a security interest
which is superior to or has greater priority over the interest of the
Bank in such property. In the event that the Issuer or the Trustee are
granted a security interest in the property of the Borrower which is
equal to the security interest of the Bank, the documents creating such
interests shall contain terms satisfactory to the Bank providing for the
complete release of the interests of the Issuer and the Trustee upon
terms satisfactory to the Bank, including but not limited to the honor
by the Bank of a final drawing under the Letter of Credit.
4. Bank's Liabilities. The Bank shall in no event have any
obligation, duty or liability whatsoever in connection with the issuance,
sale or resale of the Bonds_ The Bank's sole obligation, duty or
liability with respect to the Bonds shall be to issue and honor the
Letter of Credit in accordance with its terms.
5. Conditions to Disbursement of Bond Proceeds. Prior to the
disbursement of any proceeds of the Bonds by the Trustee, the Bank or its
designee shall have the unconditional right to approve any requested
disbursement.
6. Use of Bond Proceeds. The Bond proceeds shall be used solely
for the following purposes: $2,440,888 shall be used to finance the
purchase and renovation of the Real Estate and to pay issuance costs
associated with the Bonds; and the balance shall be used to finance the
acquisition of the Equipment.
7. Security. As security for payment of all indebtedness due'
under the Reimbursement Agreement or any of the other Letter of Credit
Documents and the due observance and performance of all of the Borrower's
obligations under the Letter of Credit Documents, the Bank shall be
granted the following (collectively, the "Security"):
(a) a first mortgage lien on and a first security interest
in the Real Estate, including all proceeds thereof and additions and
replacements thereto, subject only to the Skae drainage easement recorded
in Liber 4427, Page 883 Oakland County Records and such other exceptions
or encumbrances to title as are acceptable to the Bank in the Bank's sole
discretion.
(b) a first and prior collateral assignment of all leases,
rents, issues and profits (including security deposits) from the Real
Estate, as to all leases presently in place or which may be executed in
the future, covering all or any portion of the Real Estate, and an
assignment of the Borrower's contracts with the architect/engineer, the
04/07/97 MON 16:55 [TX/RI NO 98851
TO 918109759555 P.07/18 APR.07'97 16:44 FR DYKEMA GOSSETT BHO
RKS Properties, L.L.C.
Scone Soap Company, Inc.
April 8, 1997
Page 6
general contractor or the construction manager engaged to construct the
Improvements, together with and assignment of all plans and
specifications and other agreements, licenses and permits used or useful
in the renovation, ownership and operation of the Real Estate.
(c) a first and prior security interest in all of the
Equipment.
(d) unlimited, joint and several, personal guaranties and
environmental indemnifications from Kenneth Stone and Steven Stone.
C. gENERAL CONDITIONS.
1. Letter of Credit Documents. The Letter of Credit Documents
shall include but shall not be limited to the Letter of Credit, the
Reimbursement Agreement, the documents evidencing the Security described
in paragraph B(7) above, and all other documents evidencing or securing
the Letter of Credit or the transactions contemplated hereby (the "Letter
of Credit Documents").
2. Tnsurangg Coverages. The Letter of Credit Documents shall
obligate the Borrower to provide for the following insurance coverages
with respect to the Real Estate which protect the Borrower and the Bank,
subject to the Bank's approval of amounts, deductibles, co-insurance and
other policy provisions, and carriers, including an acceptable
mortgagee's endorsement, and other endorsements which may be required by
the Bank and which are otherwise satisfactory to the Bank:
(a) Hazard insurance (fire and all-risk coverage) on the Real
Estate in amounts approved by the Bank, but in no event less than the
outstanding indebtedness under the Letter of Credit Documents, including
builder's risk insurance during the period that the Improvements are
being constructed.
(b) Comprehensive public liability insurance in such amounts
and insuring against such occurrences as the Bank may reasonably require
from time to time.
(c) Worker's compensation insurance in such amounts as the
Bank may reasonably require from time to time.
(d) Federal flood insurance in the maximum amount obtainable
up to the full amount of the Borrower's obligations under the Letter of
Credit Documents if the Real Estate is in a "flood plain area" as defined
by the Federal Insurance Administration pursuant to the Federal Flood
Disaster Protection Act of 1973, as amended.
04/07/97 MON 16:55 (TX/RX NO 9885)
TO 918109759555 P.08/18 APR 07'97 16:44 FR DYKEMA GOSSETT BHO
RKS Properties, L.L.C.
Stone Soap Company, Inc.
April 8, 1997
Page 7
(e) Rental or business interruption insurance in an amount
equal to not less than six months' debt service on the Bonds.
Each such policy of insurance shall name the Bank as mortgagee and
loss payee and shall provide for termination on no less than 30 days'
prior written notice to the Bank.
3. Tax Service for Taxes. The Letter of Credit Documents shall
require the Borrower to, and the Borrower shall, employ a real estate tax
service satisfactory to the Bank to monitor the payment of taxes and
assessments as they become due.
4. Closing Requirements. The Bank shall have no obligation to
issue the Letter of Credit contemplated hereby until all of the
requirements of this commitment have been satisfied and the following
items, in form and substance satisfactory to the Bank, have been
delivered to the Bank at the Borrower's expense not less than five (5)
days before the closing:
(a) azzataia_a_l_i_j.-aanalatCos_t.. An appraisal of the Real
Estate is required in form, and by an appraiser, satisfactory to the
Bank. The ratio of the Real Estate Portion to value of the Real Estate
must not exceed 80%..
(b) Titlg_Lnsurance. A title insurance commitment written
by a title insurance company approved by the Bank, undertaking to issue
an ALTA mortgagee's title insurance policy, issued without standard
exceptions, together with copies of all documents affecting title, all
of which shall be in a form and content satisfactory to the Bank. The
legal description contained on the title insurance commitment shall be
identical to the legal description contained on the survey. To the
extent that they differ, the Bank shall have the option to require that
the legal description from the survey be substituted on the title
commitment. At closing, the title commitment shall be marked-up and
endorsed by the title insurance company as an effective mortgagee's
policy of title insurance insuring the lien of the mortgage as a valid
first mortgage lien on the Real Estate and containing the endorsements
required by the Bank. The title insurance policy shall be delivered to
the Bank as soon as possible after the closing. The title insurance
policy shall be in an amount not less than the lesser of the initial
Stated Amount of the Letter of credit or the the appraised value of the
Real Estate, and shall insure that the Bank's mortgage is a first lien
on the Real Estate, subject only to title exceptions acceptable to the
Bank. The final title insurance policy shall contain comprehensive, 3.1
zoning and usury endorsements. The Bank reserves the right to require
such additional endorsements to the title insurance policy as it may deem
appropriate. The title insurance policy shall insure the Bank against
04/07/97 MON 16:55 [TX/RX NO 9885]
TO 919109759555 P.09/18 APR 07'97 16:45 FR DYKEMA GOSSETT BHO
RKS Properties, L.L.C.
Stone Soap Company, Inc.
April 8, 1997
Page 8
any loss or damage to the extent of all sums then or thereafter owed by
the Borrower to the Bank pursuant to the mortgage from the Borrower to
the Bank, the Reimbursement Agreement between the Borrower and the Bank,
evidencing the obligations of the Borrower with respect to the Letter of
Credit and the transactions contemplated hereby, subject only to the
exclusions and limitations expressly set forth in such policy and
approved by the Bank. Also, the policy shall contain an endorsement that
advances under the Letter of Credit shall be obligatory advances.
(c) Survey. A survey of the Land certified to the Bank by
a registered land surveyor or registered civil engineer acceptable to the
Bank, showing (i) the means of public access to the Land and the
dimensions of such public access; (ii) the location and dimensions of any
existing improvements on the Land and confirming that the Improvements
are entirely within the boundaries of the Land in the locations
designated by the plans and specifications and otherwise in accordance
with the requirements of all applicable laws and ordinances; (iii) the
location of all rights of way and easements affecting the Land (including
the liber and page of those rights of way and easements which are of
record); (iv) the location of all utilities that serve the existing
improvements and will serve the Improvements; (v) certifying whether the
Land is located within or without a Special Flood Hazard Area, according
to the then current FIA Flood Hazard Boundary Map issued by the
Department of Housing and Urban Development, Federal Insurance
Administration, and (vi) further certifying that there are no
encroachments upon the Land. Public access to the Land shall be required
and the means, location and dimensions of such access shall be subject
to the reasonable approval of the Bank, The survey shall be updated from
time to time, as requested by the Bank, to show the existing improvements
and Improvements then in place. Upon completion of the Improvements, an
"as-built" survey shall be delivered to the Bank, together with
photographs showing the completed Improvements. The survey shall bear
a certification in a form and content satisfactory to the Bank and shall
contain such additional information as may be required by the Bank, in
its sole discretion.
(d) Bond Documents. Copies of the proposed Bonds and all of
the other Bond Documents, which shall include but not be limited to the
Trust Indenture, Loan Agreement, Pledge and Security Agreement, if any,
Remarketing Agreement, if any. Preliminary and Pinal Offering Circular,
Bond Purchase Contract, financing statements, and bond counsel's opinion,
all conforming to the requirements of this commitment and otherwise in
form and substance reasonably satisfactory to the Bank.
(e) Opinion of counsel. An opinion letter from the
attorney(s) for the Borrower in form and substance satisfactory to the
Bank and its counsel, as further described in paragraph 9(b) below.
04/07/97 MON 16:55 (TX/RX NO 9885]
TO 918109759555 P.10/18 APR 07'97 16:45 FR DYKEMA GOSSETT BHO
RKS Properties, L.L.C.
Stone Soap Company, Inc.
April El, 1997
Page 9
(f) QzganizationAl Documents. Certified copies of all
organizational documents of the Borrowers, together with satisfactory
corporate and company resolutions authorizing the execution and delivery
of all of the documents contemplated hereby.
(g) Environmental Assessment. A completed phase I
environmental report with respect to the Real Estate acceptable in form
and substance to the Bank.
(h) Miscellaneous. Such other items as the Bank or its legal
counsel may reasonably require.
5. Financtal Covenants. The Reimbursement Agreement shall
provide, among other things, that the Borrowers shall;
(a) at all times maintain a total liabilities to net worth ratio of
not more than 3.5 to 1;
(b) at all times maintain a net worth of not less than $400,000,
plus 50t of the Borrowers' net income for each year after the date
the Letter of Credit is issued; and
(c) not at any time incur or suffer to remain outstanding
indebtedness for borrowed money in excess of an aggregate amount of
$100,000.00, without the Bank's prior written consent, except
borrowings from the Bank and borrowings from officers of the
Borrowers which are subordinated to the obligations to the Bank
under the Letter of Credit Documents pursuant to agreements in form
and substance satisfactory to the Bank.
6. No Secondary Financing; Cross Default. The Letter of Credit
Documents shall provide that (i) no secondary financing, junior liens or
security interests of any type shall be permitted to attach to the Real
Estate or any part thereof at any time without the prior written consent
of the Bank; and (ii) the Letter of Credit Documents shall be cross
defaulted with any and all other indebtedness of the Borrower to the
Bank.
7. Aaceleration. The Letter of Credit shall contain
provisions permitting the Bank, at its option, to declare a default and
accelerate the indebtedness due under the Reimbursement Agreement or the
other Letter of Credit Documents upon the occurrence of either of the
following:
(a) The Borrower, without the Bank's prior written
consent, should sell, convey, further encumber or otherwise transfer
title to the Real Estate, or any interests therein (whether voluntarily
04/07/97 MON 16:55 (TX/RX NO 98851
TO 918109759555 P.11/18 APR 07'97 16:46 FR DYKEMA GOSSETT BHO
I *,
RKS Properties, L.L.C.
Stone Soap Company, Inc.
April 8, 1997
Page 10
or by operation of law) so that Kenneth Stone and Steven Stone, in the
aggregate own less than a majority interest in either of the Borrowers;
(b) The Borrower should, without the Bank's prior written
consent, sell, convey, assign, grant a security interest in or otherwise
transfer any ownership interest in Borrower (whether voluntarily or by
operation of law).
Additional events or circumstances permitting acceleration
shall be included in the Reimbursement Agreement, as is customary and
otherwise required by the Bank.
8. Financial Statements. The Reimbursement Agreement shall
contain provisions mandating the delivery to the Bank of (i) annual
financial statements of Stone Soap, unaudited but prepared in accordance
with generally accepted accounting principles and reviewed by a certified
public accountant acceptable to the Bank, (ii) quarterly financial
statements of Stone Soap prepared and signed by the Borrower's controller
or chief operating officer, (iii) copies of all of RKS's income tax
returns, and (iv) annual personal financial statements of each of thre
guarantors, including cash flow statements and all contingent
liabilities. Such financial statements shall be provided at such time
or times as the Bank shall reasonably request.
9. Additional Closing Reguiremeats. The Bank shall have no
obligation to issue the Letter of Credit until all of the requirements
of this commitment, as stated above and set forth below, have been
satisfied and the following items in form and substance satisfactory to
the Bank, have been delivered to the Bank at Borrower's expense not less
than five (5) days before the closing:
(a) Reoresencations and Warranties. The Borrower shall
covenant, represent and warrant in a form and content satisfactory to the
Bank that (i) there are no actions, suits or proceedings pending, or,
to the knowledge of the Borrower, threatened, involving (or which would
involve) the Borrower or all or any part of the Real Estate, and which
could impair the security for the transactions contemplated hereby, the
ability of the Borrower to repay the indebtedness evidenced by the Letter
of Credit Documents, the Bond Documents or the Bonds or to observe and
perform its obligations under the Letter of Credit Documents or the Bond
Documents; (ii) the Borrower has not used or permitted and will not use
or permit the Real Estate to be used for, whether directly or indirectly,
and to the best of the Borrower's actual knowledge, the Real Estate has
not at any time been used for, generating, transporting, storing,
creating, manufacturing or disposal of any Hazardous Materials (as
defined in the Reimbursement Agreement); (iii) that to the best of the
Borrower's actual knowledge there have been no investigations, reports
04/07/97 MON 16:55 [TX/RX NO 9885]
TO 918109759555 P.12/18 APR 07'97 16:46 FR DYKEMA GOSSETT BHO
RKS Properties, L.L.C.
Stone Soap Company, Inc.
April 8, 1997
Page 11
or violations involving the Borrower or the Real Estate by any
governmental authority pertaining to Hazardous Materials; (iv) to the
best of the Borrower's actual knowledge the operation of the Real Estate
has not and does not violate any federal, state or local law, regulation
or ordinance governing Hazardous Materials; (v) neither the Borrower nor
any tenant of the Borrower has received any notice, order, claim, demand
or citation from any environmental or health agency or department having
jurisdiction of the Real Estate or of the Borrower pertaining to
Hazardous Materials; (vi) the Borrower will immediately notify the Bank
if it receives any such notice, order, claim, demand or citation; (vii)
the Borrower is not aware of the presence, release or threatened release
of any Hazardous Materials on the Real Estate or any adjacent property;
and (viii) the Borrower will not permit any environmental liens, whether
federal, state or local in nature, to be placed on the Project as a
result of actions by the Borrower. For this purpose, "Hazardous
Materials" shall be defined in the Reimbursement Agreement to include but
shall not_ be limited to any hazardous, toxic or dangerous waste,
substance or material defined as such in (or for purposes of) the federal
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended (42 U.S.C. §9601 et peg.), the Hazardous Materials
Transportation Act, as amended (49 U.S.C. Sections 1801 et sec.), the
Federal Insecticide, Fungicide, the Rodenticide Act, as amended (7 U.S.C.
136 et seq.), or the Michigan Environmental Response Act, as amended
(M.C.L. 299.601 et seq.), or any other federal, state or local statute,
law, ordinance, code, rule, regulation, order or decree regulating,
relating to or imposing liability or standards of conduct concerning, any
hazardous, toxic or dangerous waste, substance, or material, as now or
at any time hereafter in effect.
(b) Legal Opinion. The opinion letter from legal counsel .
to the Borrower, stating such matters as the Bank may reasonably request.
(c) jnsurance Policies. All insurance policies required
under this commitment, including satisfactory mortgagee endorsements
where appropriate. The Bank shall hold such policies and all renewals
thereof, or certificates thereof, as the case may be, until all of •the
obligations and indebtedness of the Borrower to the Bank have been fully
satisfied.
10. material Adverse Changes. Except as may otherwise be
provided herein, at the closing:
(a) No material part of the Real Estate shall have been
damaged and not repaired to the satisfaction of Bank, nor taken in
condemnation or ocher similar proceeding, nor shall such proceeding be
pending;
04/07/97 MON 16:55 [TX/RX NO 98851
TO 918109759555 P.13/18 APR 07'97 16:46 FR DYKEMA GOSSETT BHO
RKS Properties, L.L.C.
Stone Soap Company, Inc.
April 8, 1997
Page 12
(b) The Borrower shall not be the subject of any
bankruptcy, reorganization or insolvency proceedings;
(c) No event shall have occurred or be continuing which
would constitute a material default under the Reimbursement Agreement,
the other Letter of Credit Documents, the Bond Documents or any of the
instruments to be executed in connection herewith;
(d) There shall be no material change in the projected
income and expenses of the Real Estate, in the financial condition of the
Borrower, or in the financial information submitted by the Borrower; and
(e) No part of the Real Estate shall have been
contaminated by any Hazardous Materials, to the best of the Borrower's
knowledge.
In the event of the occurrence of any of the aforementioned
events prior to the closing, or a breach of any of the terms and
conditions contained in this commitment, the Bank may terminate this
commitment.
11. Qgagral Provisions.
(a) Legal Documentation. The Letter of Credit Documents,
the Bond Documents, and all other documents and instruments relating to
the issuance of the Letter of Credit or the Bonds and to the transactions
contemplated hereby shall be in form and substance reasonably acceptable
to the Bank and its legal counsel.
(b) Agsionability. This commitment is issued to the
Borrower and may not be assigned in whole or in part without the prior
written consent of the Bank, which consent may be withheld in the Bank's
sole discretion. Neither this commitment, nor any portion thereof, may
be assumed and/or assigned by a trustee in bankruptcy.
(c) Termination. Upon the occurrence of any of the
following, this commitment may be terminated by the Bank, without
liability and at its option, upon written notice thereof to the Borrower:
(1) Failure by the Borrower to comply in any material
respect with any of the terms and conditions of this commitment; or
(ii) Any material adverse change in the Borrower's
financial condition or any other material adverse change in the
Borrower's ability to observe or perform its obligations to the Bank
under the Letter of Credit Documents or under the Bonds or the Bond
Documents;
04/07/97 MON 16:55 [TX/RX NO 98851
To 918109759555 P.14/18 APR 07'97 16:47 FR DYKEMA GOSSETT BHO
RKS Properties, L.L.C.
Stone Soap Company, Inc.
April 8, 199,
Page 13
(iii) If any of the representations or information
supplied by the Borrower to the Bank were untrue, incomplete or
misleading in any material respect at the time supplied, or become
untrue, incomplete or misleading in any material respect at any time
prior to the closing of the transaction contemplated hereby; or
(iv) The Letter of Credit Documents and Bond Documents
shall not have been fully executed and delivered to the Bank by June 30,
1997.
(d) Primary Banking Relationship. Until all of the
Borrower's indebtedness and obligations to the Bank have been fully
satisfied, the Borrower shall maintain its primary depositary
relationship with the Bank.
(e) Commitment Not Exhaustive. The Borrower
that the terms and conditions of the transactions described
in no way exhaustive or a complete recitation of the terms,
and requirements of the Letter of Credit Documents or the Bond
This commitment is designed for information purposes only and
only some of the more salient provisions of the Letter
Documents.
recognizes
herein are
conditions
Documents.
sets forth
of Credit
(f) Survival of Terms. The terms hereof shall survive the
closing of the transactions contemplated herein and shall remain in full
force and effect until all of the Borrower's indebtedness to the Bank
under the Letter of Credit Documents has been paid in full.
(g) Miseellaneous. All interest shall be computed on the
basis of a 365/366-day year, in accordance with the number of days
actually elapsed. Any invalidation or waiver of any of the provisions
of this commitment shall not cancel the other provisions hereof. This
commitment and the enforcement hereof shall be construed in accordance
with the laws of the State of Michigan. Time is of the essence. The
terms hereof shall survive the closing of the transactions contemplated
hereby and shall remain in full force and effect until all of the
Borrower's indebtedness and obligations evidenced under the Reimbursement
Agreement and the other Letter of Credit Documents to the Bank have been
satisfied in full. Any breach of this commitment shall be deemed a
breach of each and every one of the Letter of Credit Documents. No
waiver of the terms or conditions of this commitment shall be effective
unless made in writing by Bank. By acceptance of this commitment, the
Borrower agrees to indemnify and hold the Bank harmless against (i) any
loss or damage suffered by the Bank as a result of any claim by any
person, firm or corporation for any commissions alleged to be due as a
result of the transaction contemplated by the Borrower's application for
the financing contemplated hereby or this commitment and (ii) against any
TO 918109759555 P.14/18 APR 07'97 16:49 FR DYKEMA GOSSETT BHO
I,
RKS Properties, L.L.C.
Stone Soap Company, Inc.
April 8, 1997
Page 13
(iii) If any of the representations or information
supplied by the Borrower to the Bank were untrue, incomplete or
misleading in any material respect at the time supplied, or become
untrue, incomplete or misleading in any material respect at any time
prior to the closing of the transaction contemplated hereby; or
(iv) The Letter of Credit Documents and Bond Documents
shall not have been fully executed and delivered to the Bank by June 30,
1997.
(d) Primary 1 ,Ankins_aalas_Laught2. Until all of the
Borrower's indebtedness and obligations to the Bank have been fully
satisfied, the Borrower shall maintain its primary depositary
relationship with the Bank.
(e) Commitment Not Exhaustive. The Borrower
that the terms and conditions of the transactions described
in no way exhaustive or a complete recitation of the terms,
and requirements of the Letter of Credit Documents or the Bond
This commitment is designed for information purposes only and
only some of the more salient provisions of the Letter
Documents.
recognizes
herein are
conditions
Documents.
sets forth
of Credit
(f) Survival of Terms. The terms hereof shall survive the
closing of the transactions contemplated herein and shall remain in full
force and effect until all of the Borrower's indebtedness to the Bank
under the Letter of Credit Documents has been paid in full.
(g) Migcellaneous. All interest shall be computed on the
basis of a 365/366-day year, in accordance with the number of days
actually elapsed. Any invalidation or waiver of any of the provisions
of this commitment shall not cancel the other provisions hereof. This
commitment and the enforcement hereof shall be construed in accordance
with the laws of the State of Michigan. Time is of the essence. The
terms hereof shall survive the closing of the transactions contemplated
hereby and shall remain in full force and effect until all of the
Borrower's indebtedness and obligations evidenced under the Reimbursement
Agreement and the other Letter of Credit Documents to the Bank have been
satisfied in full. Any breach of this commitment shall be deemed a
breach of each and every one of the Letter of Credit Documents. No
waiver of the terms or conditions of this commitment shall be effective
unless made in writing by Bank. By acceptance of this commitment, the
Borrower agrees to indemnify and hold the Bank harmless against (i) any
loss or damage suffered by the Bank as a result of any claim by any
person, firm or corporation for any commissions alleged to be due as a
result of the transaction contemplated by the Borrower's application for
the financing contemplated hereby cr this commitment and (ii) against any
04/07/97 MON 17:01 [TX/RX NO 9886]
APR 07'97 16:49 FR DYKEMA GOSSETT BHO TO 918109759555 P.15/18
• US Properties, L.L.C.
Stone Soap company. Inc.
April 8, 1997
Page 14
loss or expense incurred by thc Bank in processing this transaction or
by virtue of the Borrower's application for the financing contemplated
hereby or this commitment. In no event shall the Bank have any obligation
to isaue the Letter of credit unless and until the Bonds have been
validly issued.
12. Expenses. All expenses incurred in connection with the
transactions contemplated hereby, whether or not closed, shall be borne
by the Borrower, including but not limited co: title insurance, survey,
escrow and closing charges, mortgage or tax stamps, recording fees,
Bank's counsel's legal fees and expenses, real estate tax service and the
cost of any environmental audits. Such costs shall be in addition to the
Letter of Credit fees to be paid by the Borrower, and shall also be in
addition to any other damages for which the Borrower will be liable under
this commitment, the Letter of Credit Documents, or the Bond Documents.
13. arid This commitment
shall expire automatically and be of no further force or effect on April
14. 1997, unless extended in writing by the Bank or accepted by the
Borrower on or before such date in accordance with the terms hereof. If
this commitment is properly accepted by the Borrower on or before April
14, 1997, it shall, subject to the terms and conditions of this
commitment, remain in full force and effect until 12:00 p.m., local time,
on June 30, 1997, at which time the Bank's obligations hereunder shall,
unless extended in writing by the Bank, automatically terminate, and the
bank shall have no obligation to issue the Letter of Credit. The
borrower shall evidence its acceptance of this commitment by returning
a signed copy of this commitment and its check for S15,265.90 to the sank
on or before April 14, 1997.
This commitment letter supercedes in its entirety the
commitment letter dated April 2, 1397, which is null and void.
Sincerely,
MICHIGAN NATIONAL BANK
Ronne Galin
Relationship manager
The undersigned hereby accepts the foregoing commitment, and
herewith delivers its check in the amount of $15,265.90 in payment of the
04/07/97 MON 17:01 [TX/RX NO 98891
TO 918109759555 P.16/18 APR 07'97 16:49 FR DYKEMA GOSSETT BHO
RKS Properties, L.L.C.
Stone Soap Company, Inc.
April 8, 1997
Page 15
non-refundable commitment fee, and certifies that all facts,
circumstances and representations made by or on behalf of the Borrower
to the Bank in connection with the transaction contemplated herein are
true, complete and not misleading.
Date: April , 1997 STONE SOAP COMPANY„ INC.
By:
Kenneth Stone
Its: President
RKS PROPERTIES, L.L.C.
By:
Its: _
BH\1077n2.5
BKB
04/07/97 MON 17:01 [TX/RX NO 9886]
TO 918109759555 P.17/18 APR 07'97 18:50 FR DYKEMA GOSSETT BHO
I
EXHIBIT A
STONE SOAP COMPANY/RKS PROPERTIES, L.L.C.
Annual Principal Redemption Schedule
Annual Maximum
Principal Principal
EAL.4=2.thian Outstanding
May 1, 1998 $0 $3,000,000
May 1, 1999 $120,000 2,880,000
May 1, 2000 $120,000 2,760,000
May 1, 2001 $205,000 . 2,555,000
May 1, 2002 $205,000 2,350,000
May 1, 2003 $205,000 2,145,000
May 1, 2004 $205,000 1,940,000
May 1, 2005 $205,000 1,735,000
May 1, 2006 $215,000 1,520,000
May 1, 2007 $200,000 1,320,000
May 1, 2008 $220,000 1,100,000
May 1, 2009 $240,000 860,000
May 1, 2010 $260,000 600,000
May 1, 2011 $285,000 315,000
May 1, 2012 5315.000 0
Tot. Principal Payments $3,000,000
04/07/97 MON 17:01 [TX/RX NO 9888]
TO 918109759555 P.18/18 PR 07'S7 16:50 FR DYKEMA GOSSETT BHO
EXHIBIT B
LEGAL DESCRIPTION
(To Be Acceptable to the Bank)
** TOTAL PAGE.018 **
04/07/97 MON 17:01 ETX/RX NO 98861
•
STONE SOAP COMPANY, INC., a
Michigan corporation
7
Its: President
By:
Dated: MARCH 10, 1997 Ib374lookedaskatAprojplan.oalt
MAR. 7. 1997 3: 16PM HOWA D &NOVAE
Exhibit C
COMPANY CERTIFICATE REGARDING
TRANSFER OF EMPLOYMENT
(Stone Soap Company, Inc. Project)
The undersigned, Stone Soap Company, Inc., a Michigan corporation (the "Company"),
hereby certifies to The Economic Development Corporation of the County of Oakland (the
"EDC") as follows:
1. This Certificate is made and based upon the best of the Company's knowledge and
belief, only after thorough investigation and discussion with all owners of the Company and
others who might have knowledge regarding the subject matter.
2. The Company acknowledges that this Certificate will be employed by the EDC
as the sole basis for the EDC's certification to the Board of Commissioners of the County of
Oakland as to transfer of employment as required by Section 8(3) of the Economic Development
Corporations Act, Act No. 338 of the Michigan Public Acts of 1974, as amended (the "Act").
3. The Company understands that the EDC's Certification to the Board of
Commissioners of the County of Oakland is a statutory requirement which, if improperly made
or based upon any material misrepresentation or inaccuracy, might invalidate the proceedings
regarding the Stone Soap Company, Inc. Project (the "Project") pursuant to which the EDC
expects ultimately to issue its limited obligation economic development revenue bonds to finance
all or part of the Project.
4. The Project shall not have the effect of transferring employment of more than 20
full-time persons from a municipality (as that term is defined in the Act) of this State to the City
of Pontiac, Michigan, the municipality in which the Project will be located, unless a consent to
the transfer is obtained on accordance with the Act.
5. The Company understands that a covenant to effectuate the purposes of this
Certificate will be included in those covenants to be made by the Company when bonds are
issued by the EDC for the benefit of the Project.
C-1
03/07/97 FRI 16:04 [TX/RI NO 60971
HEREB T rE FOREGOING RESOLUTION
PANNINI
L Brock arson. County Executive Date'
1,
Resolution #97096 May 8, 1997
Moved by Palmer supported by McPherson the resolution be adopted.
AYES: Kingzett, Law, McCulloch, McPherson, Millard, Moffitt, Obrecht,
Palmer, Powers, Schmid, Taub, Wolf, Amos, Coleman, Devine, Dingeldey, Douglas,
Garfield, Holbert, Huntoon, Jacobs, Jensen, Johnson, Kaczmar. (24)
NAYS: None. (0)
A sufficient majority having voted therefor, the resolution was adopted.
STATE OF MICHIGAN)
COUNTY OF OAKLAND)
I, Lynn D. Allen, Clerk of the County of Oakland, do hereby certify that the
foregoing resolution is a true and accurate copy of a resolution adopted by the
Oakland County Board of Commissioners on May 8, 1997 with the original record
thereof now remaining in my office.
In Testimony Whereof, I have hereunto set my hand and affixed the seal of the
County of Oakland at Pontiac, Michigan this 8th day of May 1997.
tCommisi.
. Allen, County Clerk