FIFTH AMENDMENT TO REVOLVING LOAN AND SECURITY AGREEMENT
AND THE OTHER LOAN DOCUMENTS
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THIS FIFTH AMENDMENT TO REVOLVING LOAN AND SECURITY AGREEMENT AND THE OTHER
LOAN DOCUMENTS (this "Agreement") is dated September 30, 2002, and is by and
among BALTEK CORPORATION, a Delaware corporation having its principal executive
offices at 00 Xxxxxxx Xxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000 ("Baltek") and
CRUSTACEA CORPORATION, a Delaware corporation having its principal executive
offices at 000 Xxxxxxxxxx Xxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000 ("Crustacea") (each
a "Borrower" and collectively the "Borrowers") and FLEET NATIONAL BANK, a
national banking association, successor-by-merger to Summit Bank, having an
office located at 000 Xxxxxxxxxx Xxxx, Xxxx Xxxx, Xxx Xxxxxx 00000 (the "Bank").
W I T N E S S E T H :
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WHEREAS, the Borrowers and the Bank have entered into a Revolving Loan and
Security Agreement dated as of December 21, 1999, as amended by a First
Amendment to Revolving Loan and Security Agreement dated as of September 30,
2000, a Second Amendment to Revolving Loan and Security Agreement dated as of
December 31, 2000, a Third Amendment to Revolving Loan and Security Agreement
and Modification to Equipment Line of Credit Note dated as of September 28,
2001, and a Fourth Amendment to Revolving Loan and Security Agreement dated as
of July 31, 2002, but effective as of June 30, 2002 (collectively, the "Loan
Agreement") which Loan Agreement relates to (i) a certain Revolving Credit Note
dated December 21, 1999, which Revolving Credit Note was superseded in its
entirety by virtue of a certain Substitute Revolving Credit Note dated as of
September 30, 2000, which Substitute Revolving Credit Note was superseded in its
entirety by a certain Second Substitute Revolving Credit Note dated December 31,
2000, made by the Borrowers, on a joint and several basis, in favor of the Bank
(collectively, the "Revolving Credit Note") and (ii) a certain Equipment Line of
Credit Note dated as of December 31, 2000, made by the Borrowers, on a joint and
several basis, in favor of the Bank, in the maximum aggregate principal amount
of up to One Million ($1,000,000.00) Dollars, as amended and modified by a Third
Amendment to Revolving Loan and Security Agreement and Modification to Equipment
Line of Credit Note dated as of September 28, 2001 (collectively, the "Line of
Credit Note"); and
WHEREAS, the Borrowers and the Bank have agreed to amend and modify certain
terms of the Loan Agreement and the other "Loan Documents" (as such term is
defined in the Loan Agreement) all as more fully set forth and described herein,
including, without limitation, (i) providing for a permanent decrease in the
maximum aggregate principal amount of the Revolving Credit Note from the
existing maximum aggregate principal amount of "up to $16,500,000.00" to a new
permanently decreased maximum aggregate principal amount of "up to
$12,500,000.00" and (ii) providing for the terms on which the Bank will make
available to the Borrowers a secured term loan in the aggregate principal amount
of $1,000,000.00 (the "Term Loan").
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NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto do hereby agree
as follows:
1. Incorporation of Loan Agreement by Reference. All of the terms and
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conditions of the Loan Agreement are hereby specifically incorporated into and
made part hereof. In the event of an inconsistency between the terms of the Loan
Agreement and this Agreement, the terms of this Agreement will govern and
control.
2. Definitions. Defined terms used but not expressly defined herein shall
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have the same meanings when used herein as set forth in the Loan Agreement.
3. Third Substitute Revolving Credit Note; Permanent Decrease in the
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Maximum Aggregate Principal Amount of the Revolving Credit Note. Concurrently
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herewith, the Borrowers shall execute and deliver to the Bank that certain Third
Substitute Revolving Credit Note (the "Third Substitute Note") which Third
Substitute Note shall supersede, and be in full substitution for, the Revolving
Credit Note and shall be the "Note" as defined and described in the Loan
Agreement for all purposes. It is expressly agreed that the execution and
delivery of such Third Substitute Note shall not evidence or represent a
refinancing, repayment, accord or satisfaction or novation of the indebtedness
evidenced by the Revolving Credit Note. The Bank and the Borrowers hereby
covenant and agree that the maximum aggregate principal amount of the Revolving
Credit Note is now hereby permanently decreased, amended and modified from the
existing maximum aggregate principal amount of "up to $16,500,000.00" to a new
decreased maximum aggregate principal amount of "up to $12,500,000.00", as such
permanent decrease is evidenced by the Third Substitute Note.
4. Amendment of Loan Agreement. The Loan Agreement is hereby further
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amended as follows:
(i) The existing definition of "Guaranty Agreement" is hereby deleted in
its entirety and the following new definition shall be inserted in its place and
stead:
""Guaranty Agreement" shall mean a collective reference to (i) that certain
Guaranty Agreement dated the date hereof from Balsa Development
Corporation, a New Jersey corporation, Cryogenic Structures Corporation, a
Delaware corporation, Sanlam Corporation, a New York corporation, and Balsa
Ecuador Lumber Corporation, a New Jersey corporation, in favor of the Bank,
(ii) that certain Guaranty Agreement dated December 31, 2000, from Baltek
International Corporation, a Delaware corporation, in favor of the Bank,
(iii) that certain Guaranty Agreement dated December 31, 2000, from Baltek
Mercosur, LLC, a New Jersey limited liability company, in favor of the
Bank, (iv) that certain Reaffirmation of Guaranty dated as of December 31,
2000, from Balsa Development Corporation, a New Jersey corporation,
Cryogenic Structures Corporation, a Delaware corporation, Sanlam
Corporation, a New York corporation, and Balsa Ecuador Lumber Corporation,
a New Jersey corporation, in favor of the Bank, and (v) that certain
Reaffirmation of Guaranty dated as of September 28, 2001, from the
Guarantors in favor of the Bank."
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(ii) The existing definition of "Loan Documents" is hereby amended by
including a reference therein to this Agreement, the Third Substitute Note, the
"Term Note" (as such term is defined in Paragraph 5 below), and that certain
Reaffirmation of Guaranty dated the date hereof, executed by and among the
Guarantors in favor of the Bank, such that all of said documents shall be
included in said definition.
(iii) The existing definition of "LIBOR Based Rate Loans" is hereby deleted
in its entirety and the following new definition shall be inserted in its place
and stead:
""LIBOR Based Rate Loans" shall mean a collective reference to (i) that
portion of the Loan bearing interest at the LIBOR Based Rate and (ii) the
Term Loan, while such Term Loan is bearing interest at the interest rate
provided for pursuant to Section 2A.2 of this Agreement."
(iv) The following new definitions shall be inserted:
""Loan" shall mean that certain secured revolving credit loan in the
aggregate principal amount of up to $12,500,000.00 made available by the
Bank pursuant to the terms, conditions, and provisions of Articles II and
VI of this Agreement to the Borrowers and guarantied by the Guarantors."
""Term Loan" shall mean that certain secured term loan in the aggregate
principal amount of $1,000,000.00 made available by the Bank to the
Borrowers and guarantied by the Guarantors, all on September 30, 2002."
""Term Loan Maturity Date" shall mean September 29, 2007."
""Term Note" shall mean that certain Term Note (as amended, modified, or
substituted from time to time, the "Term Note"), dated September 30, 2002,
executed by the Borrowers, on a joint and several basis, and delivered to
the Bank, which Term Note evidences the Term Loan."
(v) The following new Article IIA is hereby added to the Loan Agreement:
"IIA. TERM LOAN
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2A.1 Term Loan. Subject to the terms and conditions set forth in this
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Agreement, the Bank hereby agrees to advance the proceeds of the Term Loan
to the Borrowers on September 30, 2002. The Borrowers may not reborrow any
principal amount repaid or prepaid on the Term Note.
2A.2 Interest Rate. The Term Note shall bear interest commencing on the
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date of the Term Note, on the outstanding daily principal amount thereof,
which interest shall be payable on the dates provided for therein, at an
interest rate per annum equal to the sum of the LIBOR Rate plus two hundred
basis points (2.0%). Interest shall be calculated on the basis of a 360-day
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year for the actual number of days elapsed. The Bank shall give prompt
notice to the Borrowers of the LIBOR Rate determined or adjusted in
accordance with the provisions hereof, which determination or adjustment
shall be conclusive (absent manifest error) if made in good faith.
2A.3 Alternate Interest Rate. If the Bank shall determine in its sole
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discretion that it is unable to quote the LIBOR Rate or that it is unable
or impossible to fund the amounts outstanding at an interest rate based
upon the LIBOR Rate, the Bank shall promptly notify the Borrowers of such
determination and each all amounts outstanding under the Term Note shall
begin to bear interest at an interest rate per annum equal to the sum of
the Base Rate minus three quarters of one percent (0.75%) commencing on the
last day of the then current interest period.
2A.4 Optional Prepayments. The Borrowers shall have the right to prepay, in
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whole or in part and without prepayment premium or fee, the Term Note at
any time and from time to time. Each optional prepayment hereunder shall be
applied by the Bank to the amounts outstanding under the Term Note in such
order as the Bank shall determine in its sole discretion.
2A.5 Note. The indebtedness of the Borrowers to the Bank with respect to
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the Term Loan shall be evidenced by the Term Note.
2A.6 Amortization. The Borrowers shall repay to the Bank the outstanding
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principal balance of the Term Loan in sixty (60) equal consecutive monthly
installments, each in the amount of $16,666.66, with the first such
principal installment commencing on November 1, 2002, and each succeeding
monthly principal installment due on the first day of each and every month
thereafter up through and including the Term Loan Maturity Date.
Notwithstanding any term, condition, or provision of this Agreement to the
contrary, on the Term Loan Maturity Date the Borrowers shall repay to the
Bank any and all amounts then outstanding in connection with the Term Loan,
including, without limitation, any and all principal, interest, fees,
costs, and other expenses, if any, due and owing to the Bank.
2A.7 Method of Payment. The Borrowers shall make each payment to be made by
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them under the Term Note (including, without limitation, all principal,
interest and optional prepayments), without set-off or counterclaim, not
later than 3:00 P.M. (New York City time) on the day when due in lawful
money of the United States of America and in immediately available funds to
the Bank at its principal office set forth on the first page of this
Agreement.
2A.8 Business Day. Whenever any payment hereunder or under the Term Note
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shall be stated as due on any day other than a Business Day, the maturity
of such payment shall be extended to the next succeeding Business Day and
interest and all other fees shall accrue during such extension.
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2A.9 Maturity Date. All amounts outstanding under the Term Note and this
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Agreement, shall be immediately due and payable on the Term Loan Maturity
Date without any requirement of notice or otherwise.
2A.10 Charge. Without in any way limiting any right of offset, counterclaim
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or banker's lien which the Bank may otherwise have at law, the Borrowers
hereby irrevocably authorize and direct the Bank to charge against the
Borrowers' account or accounts at the Bank an amount or amounts as are due
and payable to the Bank hereunder or under the Term Note from time to time.
2A.11 Operating Account. The Borrowers shall maintain their main operating
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accounts with the Bank, which shall be charged automatically by the Bank on
a monthly basis for payments due under the Term Note.
2A.12 Use of Proceeds. The proceeds of the Term Loan shall be used by the
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Borrowers to purchase additional timberland in Ecuador."
(vi) Sections 2.7, 2.8, and 2.9 of the Loan Agreement shall, and are hereby
made to, apply to the Term Loan and the Term Note and (a) any and all references
contained therein to the "Note" shall also be deemed to be references to the
Term Note and (b) any and all references contained therein to the "LIBOR Based
Rate" shall also be deemed to be references to the interest rate provided for
pursuant to Section 2A.2 of the Loan Agreement, as amended and modified by this
Agreement.
(vi) Article III of the Loan Agreement shall not apply to the Term Loan
or the Term Note.
(vii) Articles IV and V of the Loan Agreement shall, and are hereby made
to, apply to the Term Loan and the Term Note and any and all references
contained therein to the "Collateral" shall also be deemed to be references to
the "Term Loan Collateral" (as such term is defined in Paragraph 5 below).
(viii) Article VI of the Loan Agreement shall not apply to the Term Loan or
the Term Note.
(ix) Article VII of the Loan Agreement shall, and is hereby made to, apply
to the Term Loan and the Term Note and (a) any and all references contained
therein to the "Note" shall also be deemed to be references to the Term Note and
(b) any and all references contained therein to the "Loan" shall also be deemed
to be references to the Term Loan.
(x) Articles VIII, IX, and X of the Loan Agreement shall, and are hereby
made to, apply to the Term Loan and the Term Note.
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5. Collateral for Term Loan. In consideration of the Term Loan being made
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available to the Borrowers and with knowledge that the Bank would not have made
the Term Loan available but for the promises of the Borrowers hereunder, the
Borrowers, as collateral security for the prompt and complete payment and
performance when due by the Borrowers of all Obligations of the Borrowers in
connection with the Term Loan and/or the Term Note only and not in connection
with the Revolving Credit Note and/or the Line of Credit Note, including,
without limitation, the following: (i) all indebtedness of the Borrowers owed to
the Bank arising on or after the date hereof in connection with the Term Loan
and/or the Term Note, both principal and interest, and any extensions, renewals,
refundings, substitutions of or for such indebtedness in whole or in part, (ii)
all indebtedness of the Borrowers owed to the Bank for reasonable fees and
expenses incurred by or on behalf of the Bank in connection with the Term Loan
and/or the Term Note, (iii) all obligations of the Borrowers to the Bank arising
under the other Loan Documents in connection with the Term Loan and/or the Term
Note, (iv) all other indebtedness, obligations and liabilities of the Borrowers
owed to the Bank now or hereafter existing, in connection with the Term Loan
and/or the Term Note whether or not contemplated by the Bank and/or the
Borrowers as of the date hereof and whether direct or indirect, matured or
contingent, joint or several or otherwise, (v) all future advances made by the
Bank for the protection or preservation of the "Term Loan Collateral" (as such
term is defined below), including, without limitation, reasonable advances for
storage and transportation charges, taxes, insurance, repairs and the like when
and as the same become due whether at maturity or by declaration, acceleration
or otherwise, or if not due when payment thereof shall be demanded by the Bank,
and (vi) any and all costs and expenses, including costs and expenses of
collection, paid or incurred by the Bank in connection with the collection of
the amounts referred to in the preceding clauses (i), (ii), (iii), (iv) or (v),
in connection with the enforcement or realization upon any or all of the Term
Loan Collateral or the Bank's security interest therein, the Borrowers hereby
collaterally assign, mortgage, hypothecate, convey, transfer and grant to the
Bank a continuing security interest in all of their respective present and
future rights, title and interests in and to the Term Loan Collateral and as to
such Term Loan Collateral, any and all cash proceeds, non-cash proceeds and
products thereof, additions and accessions thereto, replacements and
substitutions therefor, and all related books, records, journals, computer
print-outs and data, of the Borrowers. The Bank shall be under no obligation to
proceed against all or any of the Term Loan Collateral before proceeding
directly against the Borrowers or any Guarantor.
For the purposes of this Agreement, the defined term "Term Loan Collateral"
shall mean and include all of the Borrowers' now owned and hereafter acquired
(a) machinery, (b) manufacturing, distribution, selling, data processing and
office equipment, and (c) furniture, furnishings, appliances, fixtures and trade
fixtures, tools, toolings, molds, dies and vehicles, which is located in the
United States of America.
6. Additional Provisions. Notwithstanding any term, condition, or provision
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of this Agreement, the Loan Agreement, or any other Loan Document to the
contrary, the additional terms, conditions, and provisions set forth and
described on Schedule "A" attached hereto and made a part hereof are hereby
incorporated by this reference into, and shall by such incorporation become an
integral part of, the Loan Agreement, the Guaranty Agreements, the Revolving
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Credit Note, the Line of Credit Note, the Term Note, and all of the other Loan
Documents. In the event of any conflict between the terms, conditions, and
provisions of Loan Agreement, the Guaranty Agreements, the Revolving Credit
Note, the Line of Credit Note, the Term Note, and/or any of the other Loan
Documents and the additional terms, conditions, and provisions set forth and
described on said Schedule "A", the terms, conditions, and provisions set forth
and described on said Schedule "A" shall prevail and control.
7. Representations and Warranties. In order to induce the Bank to enter
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into this Agreement and amend the Loan Agreement as provided herein, the
Borrowers hereby represent and warrant to the Bank that:
(i) Except as otherwise disclosed in writing to the Bank, all of the
representations and warranties of the Borrowers set forth in the Loan Agreement
are true, complete and correct in all material respects on and as of the date
hereof with the same force and effect as if set forth at length herein.
(ii) No Default or Event of Default presently exists and is continuing on
and as of the date hereof.
(iii) Except as otherwise disclosed in writing to the Bank, since the date
of the Borrowers' most recent financial statements delivered to the Bank, no
material adverse change has occurred in the business, assets, liabilities,
financial condition or results of operations of the Borrowers, and no event has
occurred or failed to occur which has had a material adverse effect on the
business, assets, liabilities, financial condition or results of operations of
the Borrowers.
(iv) The Borrowers have full power and authority to execute, deliver and
perform any action or step which may be necessary to carry out the terms of this
Agreement and all other agreements, documents and instruments executed and
delivered by the Borrowers to the Bank concurrently herewith or in connection
herewith (collectively, the "Amendment Documents"); each Amendment Document to
which the Borrowers are a party has been duly executed and delivered by the
Borrowers and is the legal, valid and binding obligation of the Borrowers
enforceable in accordance with its terms, subject to any applicable bankruptcy,
insolvency, general equity principles or other similar laws affecting the
enforcement of creditor's rights generally.
(v) The execution, delivery and performance of the Amendment Documents will
not (a) violate any provision of any existing law, statute, rule, regulation or
ordinance (b) conflict with, result in a breach of or constitute a default under
(1) the respective certificates of incorporation or by-laws of the Borrowers or
(2) any order, judgment, award or decree of any court, governmental authority,
bureau or agency, or (3) any mortgage, indenture, lease, contract or other
agreement or undertaking to which the Borrowers are a party or by which the
Borrowers or any of their properties or assets may be bound, or (c) result in
the creation or imposition of any lien or other encumbrance upon or with respect
to any property or asset now owned or hereafter acquired by the Borrowers.
(vi) No consent, license, permit, approval or authorization of, exemption
by, notice to, report to, or registration, filing or declaration with any person
is required in connection with the execution, delivery, performance or validity
of the Amendment Documents or the transactions contemplated thereby.
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(vii) None of the by-laws and/or certificates of incorporation or other
corporate governing documents of the Borrowers have been amended, modified
and/or supplemented in any way since the date such documents were delivered to
the Bank.
8. No Change. Except as expressly set forth herein, all of the terms and
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provisions of the Loan Agreement shall continue in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers, all on
the day and year first above written.
ATTEST: FLEET NATIONAL BANK, successor
by merger to Summit Bank
By: /s/ Xxxxx X. Xxxxx By: /s/ Xxxxxxx Xxxx
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Name: Xxxxx X. Xxxxx Name: Xxxxxxx Xxxx
Title: A.V.P. Title: S.V.P.
ATTEST: BALTEK CORPORATION
/s/ Xxxxxx X. Xxxx By: /s/ Xxxxxxx Xxxx
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Xxxxxx X. Xxxx, Secretary Xxxxxxx Xxxx, President
ATTEST: CRUSTACEA CORPORATION
/s/ Xxxxxx X. Xxxx By: /s/ Xxxxxxx Xxxx
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Xxxxxx X. Xxxx, Secretary Xxxxxxx Xxxx, President
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SCHEDULE "A"
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ATTACHED TO AND MADE A PART OF THAT CERTAIN FIFTH AMENDMENT TO REVOLVING LOAN
AND SECURITY AGREEMENT AND THE OTHER LOAN DOCUMENTS EXECUTED BY AND AMONG BALTEK
CORPORATION AND CRUSTACEA CORPORATION, AS THE BORROWERS, AND FLEET NATIONAL
BANK, AS THE BANK, DATED SEPTEMBER 30, 2002
Additional Terms, Conditions, Provisions
1. Payment Availability Requirement. At all times throughout the term of the
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Loan Agreement, any payment made using other than a Fleet National Bank
check or wire transfer, there is an automatic delay of one (1) day in
posting the "payment" (as such term is defined below) because the payment
is not considered to be in "immediately available funds."
2. Payments. All payments shall be made by Borrowers to Bank at 208 Harristown
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Xxxx, Xxxx Xxxx, Xxx Xxxxxx 00000 or such other place as Bank may from time
to time specify in writing in lawful currency of the United States of
America in immediately available funds, without counterclaim or setoff and
free and clear of, and without any deduction or withholding for, any taxes
or other payments.
3. Application of Payments. All payments shall be applied first to the payment
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of all fees, expenses and other amounts due to the Bank (excluding
principal and interest), then to accrued interest, and the balance on
account of outstanding principal; provided, however, that after default,
payments will be applied to the obligations of Borrowers to Bank as Bank
determines in its sole discretion.
4. Payment of Fees and Expenses. Borrowers shall pay on demand all reasonable
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expenses of Bank in connection with the preparation, administration,
default, collection, waiver or amendment of the Loan Agreement and/or any
of the Loan Documents, or in connection with Bank's exercise, preservation
or enforcement of any of its rights, remedies or options hereunder,
including, without limitation, reasonable fees of outside legal counsel or
the allocated reasonable costs of in-house legal counsel, accounting,
consulting, brokerage or other similar professional fees or expenses, and
any reasonable fees or expenses associates with travel or other costs
relating to any appraisals or examinations conducted in connection with the
Loan Agreement, any of the Loan Documents and/or any of the Collateral
and/or the Term Loan Collateral and the amount of all such reasonable
expenses shall, until paid, bear interest at the rate applicable to
principal thereunder (including the default rate) and be an obligation
secured by all of the Collateral and the Term Loan Collateral.
5. Interest Computation. All computations of interest shall be made on the
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basis of a three hundred sixty (360) day year and the actual number of days
elapsed.
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6. Following Business Day Convention. At all times throughout the term of the
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Loan Agreement and the other Loan Documents, the payment dates should be
adjusted in accordance with the "Following Business Day Convention," as
hereinafter defined. The Following Business Day Convention shall be used to
adjust any relevant date if that date would otherwise fall on a day that is
not a Business Day. For the purposes herein, the term "Following Business
Day Convention" shall mean that an adjustment will be made if any relevant
date would otherwise fall on a day that is not a Business Day so that the
date will be the first following day that is a Business Day. A "Business
Day" means, in respect of any date that is specified in the Loan Agreement
to be subject to adjustment in accordance with the Following Business Day
Convention, a day on which commercial banks settle payments (i) in London,
if the payment obligation is calculated by reference to the LIBOR Rate, or
(ii) New York, if the payment obligation is calculated by reference to the
Base Rate. All payments hereunder shall be adjusted in accordance with the
Following Business Day Convention.
7. Default Interest Rate. Upon an Event of Default (whether or not the Bank
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has accelerated payment of the Revolving Credit Note, the Line of Credit
Note, and/or the Term Note), the Borrowers' right to select pricing options
shall cease, and the amounts outstanding under said notes shall bear
interest, payable on demand, at a rate, per annum, determined on a daily
basis, of five (5%) percent in excess of the Base Rate, but in no event
more than the highest rate permitted by the applicable usury law in respect
of the Borrowers, until the unpaid balance of said notes and interest shall
have been paid in full.
8. Replacement of Promissory Note or Other Documents. Upon receipt of an
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affidavit of an officer of the Bank as to the loss, theft, destruction or
mutilation of any promissory note or any other security document which is
not of public record, and in the case of any such loss, theft, destruction
or mutilation, upon surrender and cancellation of such note or other
document, Borrowers will issue, in lieu thereof, a replacement promissory
note or other security document in the same principal amount thereof and
otherwise of like tenor.
9. Pledge to the Federal Reserve. The Bank may at any time pledge all or any
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portion of its rights under the Loan Documents including any portion of the
Revolving Credit Note, the Line of Credit Note, and/or the Term Note to any
of the twelve (12) Federal Reserve Banks organized under Section 4 of the
Federal Reserve Act, 12 U.S.C. Section 341. No such pledge or enforcement
thereof shall release the Bank from its obligations under any of the Loan
Documents.
10. Late Fee. If the entire amount of any required principal and/or interest is
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not paid in full within ten (10) days after the same is due, Borrowers
shall pay to Bank a late fee equal to five percent (5%) of the required
payment (but in no event more than $2,500.00).
11. Interest Limitation. All agreements between Borrowers and Guarantors and
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Bank are hereby expressly limited so that in no contingency or event
whatsoever, (whether by reason of acceleration of maturity of the
indebtedness evidenced hereby or otherwise) shall the amount paid or agree
to be paid to Bank for the use or the forbearance of the indebtedness
evidence hereby exceed the maximum permissible under applicable law.
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As used herein, the term "applicable law" shall mean the law in effect as
of the date hereof; provided, however, that in the event there is a change
in the law which results in a higher permissible rate of interest, then the
Revolving Credit Note, the Line of Credit Note, and the Term Note shall be
governed by such new law as of its effective date. In this regard, it is
expressly agreed that it is the intent of Borrowers and Bank in the
execution, delivery and acceptance of the Revolving Credit Note, the Line
of Credit Note, and the Term Note to contract in strict compliance with the
laws of the State of New Jersey from time-to-time in effect. If, under or
from any circumstances whatsoever, fulfillment of any provision hereof or
of any of the Loan Documents at the time of performance of such provision
shall be due, shall involve transcending the limit of such validity
prescribed by applicable law, then the obligation to be fulfilled shall
automatically be reduced to the limits of such validity, and if under or
from circumstances whatsoever Bank should ever receive as interest an
amount which would exceed the highest lawful rate, such amount which would
be excessive interest shall be applied to the reduction of the principal
balance evidenced hereby and not to the payment of interest. This provision
shall control every other provision of all agreements between Borrowers,
Guarantors and Bank.
12. Sale of Loan. The Bank shall have the unrestricted right at any time or
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from time to time, and without Borrowers' or any Guarantor's consent, to
assign all or any portion of its rights and obligations hereunder to one or
more banks or other financial institutions (each, an "Assignee"), and
Borrowers and each Guarantor agree that they shall execute or cause to be
executed such documents, including, without limitation, amendments to the
Loan Agreement and to any other documents, instruments and agreements
executed in connection herewith as Bank shall deem necessary to effect the
foregoing. In addition, at the request of Bank and any such Assignee,
Borrowers shall issue one or more new promissory notes, as applicable, to
any such Assignee and, if Bank has retained any of its rights and
obligations hereunder following such assignment, to Bank, which new
promissory notes shall be issued in replacement of, but not in discharge
of, the liability evidenced by the promissory note held by Bank prior to
such assignment and shall reflect the amount of the respective commitments
and loans held by such Assignee and Bank after giving effect to such
assignment. Upon the execution and delivery of appropriate assignment
documentation, amendments and any other documentation required by Bank in
connection with such assignments, and the payment by Assignee of the
purchase price agreed to by Bank and such Assignee, such Assignee shall be
a party to the Agreement and shall have all of the rights and obligations
of Bank hereunder (and under any and all other guaranties, documents,
instruments and agreements executed in connection herewith) to the extent
that such rights and obligations have been assigned by Bank pursuant to the
assignment documentation between Bank and such Assignee, and Bank shall be
released from its obligations hereunder and thereunder to a corresponding
extent. The Bank may furnish any information concerning the Borrowers to a
prospective Assignee(s), provided that the Bank shall require such
prospective Assignee to agree in writing to maintain the confidentiality of
such information.
13. Right to Sell a Portion of a Loan to a Prospective Participant. Bank shall
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have the unrestricted right at any time and from time-to-time, and without
the consent of or notice to Borrowers or any Guarantor, to grant to one or
more banks or other financial institutions (each, a "Participant")
participating interests in Bank's obligation to lend hereunder and/or any
or all of the loans held by Bank hereunder. In the event of any such grant
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by Bank of a participating interest to a Participant, whether or not upon
notice to Borrowers, Bank shall remain responsible for the performance of
its obligations hereunder and Borrowers shall continue to deal solely and
directly with Bank in connection with Bank's rights and obligations
hereunder. Bank may furnish any information concerning Borrowers in its
possession from time-to-time to prospective Participants, provided that
Bank shall require any such prospective Participant to agree in writing to
maintain the confidentiality of such information.
14. Setoff. The Borrowers and any Guarantor hereby grant to the Bank a lien,
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security interest and right of setoff as security for all liabilities and
obligations to the Bank, whether now existing or hereafter arising, upon
and against all deposits, credits, collateral and property, now or
hereafter in the possession, custody, safekeeping or control of the Bank or
any entity under the control of FleetBoston Financial Corporation and its
successors and assigns, or in transit to any of them (collectively, the
"Deposits"). In addition to the Bank's common law setoff rights and not in
limitation thereof, at any time after the occurrence and during the
continuance of an Event of Default, without demand or notice, the Bank may
set off the same or any part thereof and apply the same to any liability or
obligation of the Borrowers and any Guarantor even though unmatured and
regardless of the adequacy of any other collateral securing the
Obligations. ANY AND ALL RIGHTS TO REQUIRE THE BANK TO EXERCISE ITS RIGHTS
OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE LOAN,
PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS,
CREDITS OR OTHER PROPERTY OF THE BORROWERS OR ANY GUARANTOR, ARE HEREBY
KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED. Such right of debit may be
exercised by the Bank against the Borrowers (and all Guarantors) or against
any bankruptcy trustee, debtor-in-possession, assignee for the benefit of
creditors, receiver, or execution, judgment, or attachment creditor of the
Borrowers (and all Guarantors), or against anyone else claiming through or
against the Borrowers (and all Guarantors).
Furthermore, in the event any attachment, trustee process, garnishment, or
other levy or lien (collectively a "Garnishment") issues against any Deposits
(the "Liened Funds"), then the Bank shall have the unconditional right, without
prior notice to the Borrowers (and all Guarantors), to debit any such Liened
Funds immediately prior to giving effect to such Garnishment and apply the same
to any indebtedness of the Borrowers (and all Guarantors) to the Bank under the
Loan Documents, whether or not the same has matured.
In addition, without limiting any of the foregoing rights, during the
existence of an Event of Default (or any Default), the Bank shall have the
right, without notice, to "freeze" or segregate any or all of the Deposits such
that the Borrowers (and all Guarantors) may not access, control, or draw upon
them.
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15. Waiver of Trial by Jury. BORROWERS AND BANK (BY ACCEPTANCE OF THE LOAN
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DOCUMENTS) MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED HEREON, ARISING
OUT OF, UNDER OR IN CONNECTION WITH THE LOAN DOCUMENTS CONTEMPLATED TO BE
EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF
DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY,
INCLUDING, WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS OR ACTIONS OF BANK RELATING TO THE ADMINISTRATION OR ENFORCEMENT
OF THE LOAN AGREEMENT OR THE LOAN DOCUMENTS, AND AGREE THAT NO SUCH PARTY
WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A
JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED EXCEPT AS PROHIBITED BY LAW,
BORROWERS HEREBY WAIVE ANY RIGHT THEY MAY HAVE TO CLAIM OR RECOVER IN ANY
LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES.
BORROWERS CETIFY THAT NO REPRSENTATIVE, AGENT OR ATTORNEY OF BANK HAS
REPRESENTED, EXPRESSLY OR OTHERWISE THAT BANK WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER. THIS WAIVER CONSTITUTES A
MATERIAL INDUCEMENT FOR BANK TO ACCEPT THE LOAN DOCUMENTS AND MAKE
ADVANCES, THE TERM LOAN AND OTHER FINANCIAL ACCOMODATIONS AVAILABLE TO THE
BORROWERS.
[END OF SCHEDULE "A"]
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