[ New Contents | Search | Post | Reply | Next | Previous | Up ]
From: Chapman Spira and Carson LLC
Time: 8:11:53 AM
So many people think that dealing with the government agencies is so difficult and they don't even want to get started because of the perceived paperwork and bureaucracy. The SBA has attempted to make that process seamless to point of even having staff available to help fill out the forms.
The government is cognizant of the fact that folks that are looking in SBA Loan Guarantees are just getting started and need all the help they can get. The process was set up in order to do just that. This agency has a mandate to get money out into the private sector and it does not do the job when people are frightened by what looks like insurmountable mountains of paperwork.
Not that this was our thought, but for a very reasonable fee, Chapman Spira and Carson will walk you through the process as well. An additional value that we may provide is having access to other types of financing should your application not be approved by the SBA. Robert A. Spira Chapman Spira and Carson LLC
AUTHORIZATION FOR DEBENTURE GUARANTEE 504 PROGRAM
Borrower: Operating Company: SBA Loan Number:
(Certified Development Company) (CDC)
(City, State, Zip Code)
The Small Business Administration (SBA) authorizes the guarantee of a Debenture to be issued by CDC to assist Borrower, [or Borrower for Operating Company,] a small business, pursuant to Title V of the Small Business Investment Act of 1958, as amended (the "Act"), subject to the following terms and conditions:
1. Project: The proceeds of the Debenture shall be used only towards financing the purchase or lease, and/or improvement or renovation by Borrower of [Describe the property: (i) An address and lot and block number or other legal description, sufficient to identify real property, (ii) A general description of machinery, equipment, or other personalty.] (the "Project Property"). The anticipated, aggregate amount to be financed for eligible Project components as listed in Paragraph 3 below is referred to in this Authorization as the "Project Cost". Certain administrative costs (as listed in Paragraph 8.B. below) also may be financed with proceeds of the Debenture ("Administrative Costs"). The loan by CDC to the Borrower is referred to as the "504 loan".
2. Terms of the Debenture and Note: At a time agreed upon by SBA, CDC, and Borrower prior to funding of the 504 loan ("Closing"), the Borrower shall execute a Promissory Note ("Note") in favor of CDC, which shall issue a Debenture, all reflecting the following terms:
a. Amount: $ .
b. Term: [10/20 years.]
c. Repayment Terms: At the date the Debenture is sold, the interest rate will be set and the amount of the monthly principal and interest installment for the term of the Note and the semi-annual principal and interest installment for the term of the Debenture will be established.
d. Prepayment: Borrower may prepay the entire outstanding balance of the Note prior to the maturity date, but may not make partial prepayments. If Borrower prepays during the first half of the stated term, there will be a prepayment premium, calculated by applying a declining percentage of the Debenture interest rate to the outstanding principal balance of the Note. A schedule of the dollar amount of the premium will be provided after the sale of the Debenture.
3. Project Cost: The Project Cost shall include only the specific components set forth below. Project Cost does not include Administrative Costs.
Purchase of land and/or building$ Construction (building, remodeling)$ Machinery, equipment and other personalty (purchase, installation) $ Professional fees $ Other expenses: (construction contingencies) (interim interest and points)$ Total Project Cost $
4. Borrower's Injection: At or prior to Closing, Borrower must contribute to the Project from its own resources, CDC or any other source the sum of $ in cash (or other property acceptable to SBA obtained with the cash) or land. If any of the contribution is borrowed and secured by any of the Project Property, the resulting obligation must be expressly subordinate to the liens securing the Note and may not be repaid at a faster rate than the Note unless prior written approval is obtained from SBA. A copy of any debt instrument evidencing such obligation must be supplied to CDC at or prior to Closing.
5. Interim Financing:
a. Interim Lender: will provide an interim loan in the principal amount of $ (Interim Lender).
b. Application of Net Debenture Proceeds to Interim Loan: Upon sale of the Debenture, the Net Debenture Proceeds (the portion of Debenture Proceeds that finance Project Cost) will be applied to pay off the balance of the interim loan, or, if the Interim Lender is the Third-Party Lienholder, to reduce the balance to the amount specified in Paragraph six below.
c. Required Certifications Before Debenture Is Issued: CDC must cause Interim Lender to certify that it has no knowledge of any unremedied substantial adverse change in the condition of the Borrower [and/or Operating Company] since the date of the loan application to the Interim Lender, and that the interim loan has been disbursed in reasonable compliance with this Authorization. [CDC must certify that construction has been completed in accordance with the final plans and specifications. CDC may rely upon a certification by the Interim Lender.]
6. Permanent Prior Financing: ("Third-Party Lienholder") will provide permanent financing in the amount of $ for a term of ("Third-Party Lienholder Loan"). The Third-Party Lienholder's Note must not be open-ended or cross-collateralized with other financing provided by Third-Party Lienholder; nor shall it have an early call feature, any demand provisions (unless the Note is in default), or any requirement for a balloon payment prior to the end of the above term or ten years (in the case of a Project involving real estate) or seven years (in the case of a Project not involving real estate with a ten year Debenture), whichever is earlier. Third-Party Lienholder must subordinate to the CDC/SBA lien all future advances in excess of the Third-Party Lienholder Loan except those for the reasonable costs of collection, maintenance, and protection of the Third-Party Lienholder's lien position.
7. Costs in Excess of Project Cost: Borrower must pay any costs in excess of the total Project Cost referred to in Paragraph 3 which Borrower incurs in completing the Project.
8. Use of Debenture Proceeds: The Debenture Proceeds shall be used to pay Administrative Costs and the final percent of the total Project Cost.
A. CDC Share ( %) of Project Cost$
B. Administrative Costs
1.SBA Guarantee Fee (A x .005)$ 2.Funding Fee (A x 0.0025)$ 3.CDC Processing Fee (A x 0.015)$ 4.Closing Costs $ 5.Subtotal (B.1 through B.4)$ 6.Underwriters Fee* $ 7.Total (B.5 plus B.6) $
c. Total Debenture Amount $ (A plus B.7, rounded up to next thousand)
d. Balance to Borrower (C minus (A plus B.7))$
* Underwriters fee calculated as follows: Sum of A and B.5 divided by 0.99375; round this number up to the highest thousand; multiply this number by 0.00625.
9. Loan Documents: The following documents (properly executed) must be delivered at Closing:
a. The Note.
b. A [Second] Deed of Trust or Mortgage on the Project Property creating a valid lien at the time of Debenture funding, subject only to a prior lien held by Third-Party Lienholder in the amount of the Third-Party Lienholder Loan. In this regard:
1) Title Insurance: For all Project real property required as collateral, Borrower shall provide title insurance issued by a reputable title insurance company in an amount equal to the Note [or the Note less personal property costs] insuring that CDC and SBA hold a valid lien on the Project Property subject only to the liens expressly permitted by this Authorization. At the time of Closing, either (1) there shall be no contractor's, mechanic's or materialman's liens on the Property, and none which might possibly be filed after Closing which would impair the priority of the Development Company/SBA lien and no exception for same in the title insurance commitment/policy, or (2) the title insurance company shall provide affirmative coverage to CDC and SBA over any such exceptions, affording reasonably adequate protection against material loss arising from such exceptions. In addition, the title insurance company shall provide such endorsements as CDC or SBA deems necessary to protect CDC and SBA reasonably against material loss arising from any other exceptions. In states where a survey is customarily provided for title insurance coverage, Borrower shall also provide a survey certified to SBA/CDC, or a prior survey acceptable to SBA/CDC and the title insurer and a satisfactory survey affidavit of no change.
2) Subordination Agreements: CDC shall obtain [in recordable form] written subordination agreements from any tenants occupying any of the Project real property required as collateral. [Appropriate subordination language may be included in the Lease as an alternative.]
b. A Second Deed of Trust or Mortgage on the Lessee's Interest in the Project Property, creating a valid lien at the time of Debenture funding, subject only to a prior lien held by Third- Party Lienholder in the amount of the Third-Party Lienholder Loan. [Please note that subparagraphs 1) and 2) above apply to this Paragraph.] and/or
b. A [Second] Deed of Trust or Mortgage on Borrower's Non-Project Property Collateral described as , creating a valid lien at the time of Debenture funding, [subject only to a prior lien held by , in the amount of $ .] [Please note that subparagraphs 1) and 2) above do not apply to this Paragraph.] In this regard:
1) Mortgage Verification Report: The Borrower must provide evidence in the form of a mortgage verification report from any prior lienholder showing the current balance of such obligation and confirming that Borrower is current in its payments on such obligation and is not otherwise considered in default thereunder.
2) Title Insurance: Borrower shall provide (at CDC's direction) either (i) title insurance, including any endorsements required by the SBA and CDC for all non-Project real property required as collateral or, in lieu of title insurance, (ii) a title report, a satisfactory Borrower's affidavit of title supporting the accuracy and completeness of the title report, and any other appropriate due diligence upon which CDC may reasonably rely.
3) Subordination Agreements: Borrower shall provide evidence that any lease of the non-Project Property Collateral is subordinate to the [Second] Deed of Trust or Mortgage.
c. A Security Agreement and Financing Statement executed by Borrower [and Operating Company] on all machinery, equipment, furniture, fixtures, and other personal property (the "Personalty") financed as part of the Project, and all proceeds therefrom, subject only to a prior lien held by Third-Party Lienholder in the amount of the Third-Party Lienholder Loan. Borrower must provide an itemized list of the Personalty to be attached as an exhibit to the Security Agreement and any accompanying Financing Statements, describing each item of collateral by number and type, including brand name and serial number, if applicable, sufficient to identify it. A Uniform Commercial Code lien search (state and county) is required for all such Personalty.
and/or (if personal property in addition to the Project Property is needed to adequately secure SBA)
[c. A Security Agreement and Financing Statement executed by Borrower [and Operating Company] in position, on all machinery, equipment, furniture, fixtures, and other personal property now owned or later acquired, wherever located, and all proceeds therefrom, (the "Personalty"), subject only to a prior lien held by . Borrower must provide an itemized list of the Personalty, satisfactory to CDC, to be attached as an exhibit to the Security Agreement and any accompanying Financing Statements, describing the collateral by number and type, including brand name and serial number, if applicable, sufficient to identify it. A Uniform Commercial Code lien search (state and county) is required for all such Personalty.]
d. A Guarantee on SBA Form 148 executed by , a recourse guarantee of Borrower's entire obligation under the Note (a "148 Guarantee").
and (if applicable)
A Deed of Trust or Mortgage on real property located at , [subject only to a prior lien held by in the approximate amount of $ ,] securing the 148 Guarantee. In this regard, Borrower shall provide (at CDC's direction) either (i) title insurance, including any endorsements required by the SBA and CDC, for all real property securing the 148 Guarantee or, in lieu of title insurance, (ii) a title report, a satisfactory Borrower's affidavit of title supporting the accuracy and completeness of the title report, and any other appropriate due diligence upon which CDC may reasonably rely.
A valid lien on the following personal property (list assets), securing the 148 Guarantee.
[e. A Collateral Assignment of Life Insurance on the life of in the amount of $ , properly acknowledged by the Home Office of the insurer. [The original life insurance policy shall be delivered to CDC or SBA.] CDC and SBA must be named as collateral assignees , not beneficiaries. Borrower shall cause the owner/insured to maintain the policy for the term of the Note.]
f. An Assignment of Leases to CDC and SBA:
Eligible Passive Company. An assignment of the interests of Borrower [and Operating Company if the Operating Company is a Co-Borrower] in any lease of Project Property in which Borrower is lessor and Operating Company is lessee. The term of the lease, including options to renew exercisable by the Operating Company, must be equal to or longer than the term of the Note.
Third Party Lease. An assignment with right of reassignment of Borrower's interest in any leased Project Property. The assignment shall include satisfactory provisions for the landlord's consent to assignment and agreement not to detain or seize any property which is collateral for the Note. The lease shall have a term, including options to renew exercisable by the Borrower, at least equal to the term of the Note, and shall provide for notice to CDC and SBA of termination of the lease because of default by Borrower, with right to cure.
Borrower as Lessor of Project Property. An assignment of the Borrower's interest in any lease of Project Property in which Borrower is lessor and a third party is lessee, the terms of which lease must comply with applicable SBA regulations.
[g. Standby Agreement: A Standby Agreement (SBA Form 155) to be executed by ("Standby Creditor") covering the debt or obligation owed by Borrower to Standby Creditor in the principal amount of $________________, plus accrued interest. Under this Agreement:
1) Interest Only: Interest at the rate of ________________ percent (_________________%) per year may be paid so long as Borrower is not in default under the Note or any agreement executed in connection with the 504 loan.
2) Principal Reduction: Principal reduction not to exceed $________________ per ____________ may be paid beginning ______________ so long as Borrower is not in default under the Note, Third-Party Lienholder Loan, or any agreement executed in connection with the 504 loan.]
h. Third-Party Lienholder's Agreement: Third-Party Lienholder must execute and deliver at Closing an agreement [in recordable form] that (a) confirms the extent to which the Third-Party Lienholder Loan has been fully advanced [itemizing any escrows]; (b) confirms that no future advances shall be made that are collateralized by the Third-Party Lienholder's deed of trust [mortgage] or security agreement, except advances to preserve and protect the collateral or the Third-Party Lienholder's interest in the collateral (including foreclosure costs); (c) waives as to the CDC/SBA lien any provisions in its deed of trust, mortgage, or security agreement prohibiting further encumbrances; and (d) gives CDC and SBA written notice of an event of default and the opportunity to purchase the Third-Party Lienholder's note and lien prior to foreclosure. Such notice must be given within 30 days after the event of default and at least 60 days prior to the date of any proposed sale.
i. Assignment to SBA. CDC must execute a satisfactory written assignment to SBA of its interest in the Note, lease and all collateral documents executed by the Borrower and guarantors.
[j. Additional Collateral as may be required by SBA or CDC.]
10. Insurance Requirements:
a. Flood Insurance. Borrower must obtain flood insurance, satisfactory to SBA, if any portion of the Project Property is located in a flood hazard zone. (Borrower will be ineligible for any future disaster assistance or SBA business loan assistance if such flood insurance is not maintained for the entire term of the loan.) The flood insurance shall be in an amount equal to the lesser of the insurable value of the property or the maximum limit of coverage available.
b. Hazard Insurance on Real Property: Borrower [and Operating Company] must acquire and maintain (from a carrier with a Best rating of A or better) hazard insurance, including fire, lightning, extended coverage, vandalism, and malicious mischief, on all of the Project Property and non-Project Property collateral, in favor of CDC and SBA as "mortgagees" as their interests may appear (under a New York Standard Mortgage clause) for the full replacement cost, unless a lesser amount is approved by SBA in writing.
- or if condominium -
Hazard Insurance on Condominium: Borrower must acquire and maintain (from a carrier with a Best rating of A or better) hazard insurance directly and/or through the Master Condominium Policy, on all condominium property on which liens are taken, in favor of CDC and SBA as mortgagees as their interests may appear for the full replacement cost, unless a lesser amount is approved by SBA in writing. .
c. Hazard Insurance on the Personalty: Borrower must acquire and maintain (from a carrier with a Best rating of A or better) hazard insurance, including fire, lightning, extended coverage, vandalism, and malicious mischief, on the Personalty, in favor of CDC and SBA as "lender loss payees" as their interests may appear for the full replacement cost, unless a lesser amount is approved by SBA in writing. ..
[d. Liability Insurance: Borrower and/or Operating Company must acquire and maintain (from a carrier with a Best rating of A or better) liability insurance coverage covering business operations in an amount satisfactory to CDC. CDC and SBA are to be named as "additional insureds" on liability insurance.]
[e. Workers' Compensation Coverage: Borrower and/or Operating Company must acquire and maintain (and provide evidence of the acquisition and maintenance) on an ongoing basis for the full term of the Debenture all required workers' compensation coverage.]
11. Environmental Requirements:
a. Environmental Inspections.
CDC must satisfy SBA that all real estate to be taken as collateral is free from environmental contamination. For each such property, CDC must provide SBA with reports or findings of any environmental inspection known to have been performed. For commercial and industrial sites, if no inspection has been done, CDC must complete an on-site inspection and environmental questionnaire satisfactory to SBA.
A Phase I Environmental Audit must be performed by a reputable private concern satisfactory to CDC and SBA if: (a) the on-site inspection and environmental questionnaire do not satisfy SBA as to the absence of the potential for environmental contamination; or (2) as determined by SBA, EPA or CDC, the Borrower [and/or Operating Company] or a prior occupant of the property is a member of a frequently polluting business sector or the property is located in an area known to have a pollution problem.
A Phase II Environmental Audit must be performed by a reputable private concern satisfactory to CDC and SBA if: (a) the on-site inspection and environmental questionnaire or the Phase I audit indicates the presence or potential of contamination; or (b) the Phase I audit does not satisfy SBA that the property is free from environmental contamination.
SBA reserves the right to modify terms and conditions or cancel this Authorization prior to loan disbursement if environmental contamination is discovered on any of the real estate to be taken as collateral to an extent sufficient to have a material, adverse effect on the value of any of such property as collateral, or if the cost of restoring the contaminated site would have a material, adverse financial impact on Borrower [or Operating Company].
With respect to each piece of real estate collateral, the property owner must warrant, effective at Closing and during the term of the Note, that:
1) it is and shall continue to be in full compliance with all applicable local, State and Federal environmental laws and regulations;
2) no proceedings alleging violations of environmental laws or regulations are pending;
3) it either has no knowledge of any contamination from hazardous substances or the current or former presence of hazardous substances stored or used on the property in violation of any local, State or Federal health or environmental law or regulation, or any violation of which it has knowledge has been fully corrected or is the subject of an existing mitigation plan approved by SBA;
4) it shall assume all responsibility and all liability for hazardous substance cleanup resulting from any contamination, past, present, or future (during its period of ownership), and shall indemnify CDC and SBA for any and all resulting liabilities or costs (CDC or SBA may require a separate indemnification agreement); and
5) it shall promptly notify CDC and SBA if it obtains any information which causes it to know, believe or reasonably suspect that there may be any hazardous substance in or around any of the real estate.
12. Other Conditions.
The following terms also must be agreed to by Borrower [and Operating Company]:
a. No Adverse Change: Prior to Closing, the Borrower [and Operating Company] must certify to CDC that since the date of application there has been no unremedied substantial adverse change in the financial condition of Borrower [and/or Operating Company] or its ability to repay the Project financing, including the Note. Borrower must also supply to CDC accurate financial statements, [reviewed by a CPA,] [of the Operating Company], current within 90 days of Closing.
b. Change of Ownership or Control: There shall be no change in the ownership or control of the Borrower [or Operating Company], during the term of the Note, without the prior written consent of SBA; provided, that, commencing six months after the Closing, Borrower [or Operating Company] may have one or more changes in ownership without approval of SBA so long as the cumulative change over the term of the Note is less than five percent (5%).
c. Borrower and Guarantor Documents:
1) Corporate Documents: At or prior to Closing, Borrower and all corporate guarantors shall submit to CDC a [certified] copy of their Articles or Certificate of Incorporation (with amendments), Certificate of Good Standing, Certificate to Do Business (if applicable), [Bylaws] and Corporate Borrowing Resolution.
2) Limited Liability Company (LLC) Documents: At or prior to Closing, Borrower and any LLC guarantor shall submit to CDC a [certified] copy of its Articles of Organization (with amendments), Fact Statement or Good Standing Certificate, Operating Agreement and Borrowing Resolution.
3) Partnership Documents: At or prior to Closing, Borrower and any partnership guarantor shall submit to CDC a copy of its Partnership Agreement, Certificate as to Partners and Certificate of Partnership or of Good Standing, if applicable.
4) Trust Documents: Prior to Closing, Borrower and any trust guarantor shall submit to CDC its Trust Agreement and verify that the trustee has the power to take all of the actions required by this Authorization.
[d. Opinion Letter from Borrower's Counsel: At or prior to Closing, Borrower's counsel shall submit an acceptable legal opinion verifying that all Borrower or guarantor entities (other than natural persons) are properly organized, in good standing, validly existing, and have the authority to borrow or guarantee; and that the documents executed by the Borrower and guarantors have been authorized, executed, and delivered by an authorized officer, and are valid and binding obligations, enforceable in accordance with their respective terms; and opinions as to such other matters as SBA or CDC may require.]
e. Occupancy Certificate: At or prior to Closing, Borrower shall submit to CDC a copy of its Occupancy Certificate or final inspection report or other evidence satisfactory to CDC, that: (i) the Project has been substantially completed; (ii) all elements of the Project Cost have been paid in full; (iii) Borrower [or the Operating Company] occupies (or will shortly occupy in the case of an escrow closing) at least _____________% of the Project Property; and (iv) the Project complies with all zoning and necessary governmental permit and licensing requirements.
f. Payments and Disbursements: The Central Servicing Agent (CSA) shall handle all payments and disbursements under the Debenture. CDC, Borrower [and Operating Company] shall execute the Servicing Agent Agreement (SBA Form 1506). In addition to the Project Cost and Administrative Costs referred to in Paragraphs 3 and 8, the Servicing Agent Agreement requires a servicing charge on the outstanding loan balance. Such charge will be included in the monthly loan installment as determined by the CSA. Payments shall be made by Automated Clearing House (ACH) or wire transfer. Borrowers must pay a late fee of five percent of the late payment or $100.00, whichever is greater, for payments received by the CSA after the 15th day of any month.
g. Books, Records and Reports: Borrower [and Operating Company] must comply with all SBA requirements, including those regarding inspections, audits, appraisals, SBA access to books and records, and submission of financial statements. Borrower [and/or Operating Company] will keep proper books and records in a manner acceptable to CDC and SBA at all times. CDC and SBA may make inspections, audits, and examinations of the books, records and assets of the business at the expense of Borrower [and/or Operating Company]. Borrower [and/or Operating Company] will furnish financial statements to CDC and/or SBA for the period ending and thereafter. Borrower [and/or Operating Company] authorizes all Federal, state and municipal authorities to disclose and furnish any information regarding Borrower [and/or Operating Company] to CDC and/or SBA upon the request of the CDC and/or SBA.
h. Earthquake Hazards: In the construction of a new building or an addition to a building, Borrower must submit evidence, acceptable to CDC and SBA, that the construction conforms with the "National Earthquake Hazards Reduction Program (NEHRP) Recommended Provisions for the Development of Seismic Regulations for New Buildings", or a substantially equivalent standard in those jurisdictions which have not enacted NEHRP.
i. Compliance with Federal Equal Opportunity Standards: Borrower and Operating Company must not discriminate in their employment practices. Borrower or [Operating Company] must display SBA Form 722, "Equal Opportunity Poster" at its place of business in a location where it is clearly visible to employees, applicants for employment and the general public.
j. Completion of Debenture Terms: Borrower [, Operating Company] and CDC authorize CDC, SBA and/or CSA to date and otherwise complete any terms of the Debenture or Loan Documents which were incomplete at the time of their execution as soon as such terms become known to them.
k. Closing Costs: At or prior to Closing, Borrower must pay all closing costs, including but not limited to title insurance premiums, recording costs, and premiums for insurance required by this Authorization.
l. American-Made Products: Borrower agrees, to the extent feasible, to purchase only American-made equipment and products with the proceeds of the 504 loan.
m. Child Support. By executing this Authorization, Borrower [and Operating Company] certifies that no person who owns at least 50% of the voting interest of the Borrower [or Operating Company] is delinquent more than 60 days under the terms of any (a) administrative order, (b) court order, or (c) repayment agreement requiring payment of child support.
n. IRS Authorization. Borrower [or Operating Company] must sign IRS Form 4506 authorizing the IRS to send to CDC Borrower's [or Operating Company's] tax return transcripts for the last three years preceding the application. The tax verification must be received by CDC prior to loan disbursement.
o. Tax Certification. Borrower [and Operating Company] must certify to CDC that its taxes are current and that no tax liens or judgments exist which would result in a lien attaching to any of the collateral securing the Note.
p. Use of Proceeds. At Closing, Borrower [and Operating Company] and CDC must certify as to the actual use of the Debenture Proceeds.
q. Compensation Agreement. At Closing, CDC and Borrower must provide an SBA Form 159 from each agent (including an attorney, accountant, consultant, manufacturer's representative, packager, lender service provider, or any other person representing a Borrower) that assisted the Borrower to obtain the 504 loan, indicating the amount of each fee.
r. Other Conditions. Borrower must comply with such other conditions, not inconsistent with the provisions of the Authorization, as reasonably may be imposed by CDC.
s. [Appraisal. Prior to closing, CDC shall furnish SBA with a certified appraisal of the Project property. Should the appraisal show a value of less that $ , Borrower shall provide additional investment, additional collateral, or reduce the size of the Project, as appropriate.]
13. General Conditions:
a. Borrower must cooperate fully with CDC and SBA, and must execute all documents required by CDC and SBA. All documents required to be produced by the Borrower must be satisfactory to SBA in form and substance. They also must be submitted to CDC counsel sufficiently in advance of Closing (as directed by CDC counsel).
b. Disbursements of Debenture Proceeds shall be made no later than twelve (12) months from the date of this Authorization unless such time is extended by prior written consent of CDC and SBA.
c. If during the term of the Debenture, Borrower or any of its affiliates acquire, directly or indirectly, in excess of a 10% ownership or interest in CDC, the Debenture shall immediately become due and payable in full.
d. The terms and conditions of this Authorization shall survive Closing.
CDC and Borrower [and Operating Company] shall confirm their acceptance of these terms and conditions by signing this Authorization and returning it to this District Office within ten (10) days after receiving it.
By: PHILIP LADER, ADMINISTRATOR ACCEPTANCE BY BORROWER [, OPERATING COMPANY] AND CDC:
In consideration for the provision by SBA of financial assistance to CDC for the benefit of Borrower, and intending to be bound, Borrower, [Operating Company,] and CDC accept and agree to comply fully with the terms and conditions of this Authorization For Debenture Guarantee. Each person signing below represents and warrants that he or she is fully authorized to execute this Authorization in the capacity indicated.
(Operating Company) (Borrower)
(City, State, Zip Code) (City, State, Zip Code)
By: By: (Title) (Title)
Attest: Attest: (Title) (Title)
(Certified Development Company)
(City, State, Zip Code)
Note: Corporate borrowers must execute this Authorization in corporate name by duly authorized officer, and, if required, seal must be affixed and duly attested; partnership and limited liability partnership borrowers must execute in firm name, together with signatures of all general partners; limited liability company borrowers must execute in company name.