AMENDED AND RESTATED
REVOLVING CREDIT
AND
TERM LOAN AGREEMENT
Dated as of December 3, 1996
among
ARROW AUTOMOTIVE INDUSTRIES, INC.
and
THE FIRST NATIONAL BANK OF BOSTON
and
BTM CAPITAL CORPORATION
--TABLE OF CONTENTS
1. DEFINITIONS AND RULES OF INTERPRETATION 1
1.1. Definitions. 1
1.2. Rules of Interpretation. 14
2. THE REVOLVING CREDIT FACILITY 15
2.1. Commitment to Lend. 15
2.2. Commitment Fee. 15
2.3. Reduction of Commitment. 16
2.4. The Revolving Credit Notes. 16
2.5. Interest on Revolving Credit Loans. 16
2.6. Requests for Revolving Credit Loans. 17
2.7. Conversion Options. 18
2.7.1. Conversion to Different Type of Revolving Credit Loan. 18
2.7.2. Construction of Type of Revolving Credit Loan. 18
2.7.3. Eurodollar Rate Loans. 19
2.8. Funds for Revolving Credit Loan. 19
2.8.1. Funding Procedures. 19
2.8.2. Advances by Agent. 19
2.9. Change in Borrowing Base. 20
3. REPAYMENT OF THE REVOLVING CREDIT LOANS 20
3.1. Maturity. 20
3.2. Mandatory Repayments of Revolving Credit Loans. 20
3.3. Optional Repayments of Revolving Credit Loans. 20
4. THE TERM LOAN 21
4.1. Commitment to Lend. 21
4.2. The Term Note. 21
4.3. Schedule of Installment Payments of Principal Term Loan. 21
4.4. Optional Prepayment of Term Loan. 21
4.5. Interest on Term Loan. 22
4.5.1. Interest Rates. 22
4.5.2. Notification by Borrower. 22
4.5.3. Amounts, etc. 22
5. LETTERS OF CREDIT 22
5.1. Letter of Credit Commitments. 22
5.1.1. Commitment to Issue Letters of Credit. 22
5.1.2. Letter of Credit Applications. 23
5.1.3. Terms of Letters of Credit. 23
5.1.4. Reimbursement Obligations of Banks. 23
5.1.5. Participations of Banks. 24
5.2. Reimbursement Obligations of Borrower; Effects of Drawing. 24
5.3. Letter of Credit Payments. 25
5.4. Obligations Absolute. 25
5.5. Reliance by Issuer. 26
5.6. Letter of Credit Fee. 26
6. CERTAIN GENERAL PROVISIONS 27
6.1. Funds for Payments. 27
6.1.1. Payments to Agent. 27
6.1.2. No Offset, etc. 27
6.2. Computations. 27
6.3. Inability to Determine Eurodollar Rate. 27
6.4. Illegality. 28
6.5. Additional Costs, Etc. 28
6.6. Capital Adequacy. 29
6.7. Certificate. 30
6.8. Indemnity. 30
6.9. Interest After Default. 30
7. COLLATERAL SECURITY 31
8. REPRESENTATIONS AND WARRANTIES 31
8.1. Corporate Authority. 31
8.1.1. Incorporation; Good Standing. 31
8.1.1. Authorization. 31
8.1.2. Enforceability. 31
8.2. Governmental Approvals. 31
8.3. Title to Properties; Leases. 32
8.4. Financial Statements and Projections. 32
8.4.1. Financial Statements. 32
8.4.2. Projections. 32
8.5. Franchises, Patents, Copyrights, Etc. 32
8.6. Litigation. 32
8.7. No Materially Adverse Contracts, Etc. 33
8.8. Compliance with Other Instruments, Laws, Etc. 33
8.9. Tax Status. 33
8.10. No Event of Default. 33
8.11. Holding Company and Investment Company Acts. 33
8.12. Absence of Financing Statements, Etc. 34
8.13. Perfection of Security Interest. 34
8.14. Certain Transactions. 34
8.15. Employee Benefit Plans. 34
8.15.1. In General. 34
8.15.2. Terminability of Welfare Plans. 34
8.15.3. Guaranteed Pension Plans. 35
8.15.4. Multiemployer Plans. 35
8.16. Regulations U and X. 35
8.17. Environmental Compliance. 35
8.18. Subsidiaries, Etc. 37
8.19. Bank Accounts. 37
8.20. Review of Credit Agreement. 37
9. AFFIRMATIVE COVENANTS OF THE BORROWER 37
9.1. Punctual Payment. 37
9.2. Maintenance of Office. 38
9.3. Records and Accounts. 38
9.4. Financial Statements, Certificates and Information. 38 9.5.
Notices. 40
9.5.1. Defaults. 40
9.5.2. Environmental Events. 40
9.5.3. Notification of Claim against Collateral. 40
9.5.4. Notice of Litigation and Judgments. 40
9.6. Corporate Existence; Maintenance of Properties. 41
9.7. Insurance. 41
9.8. Taxes. 41
9.9. Inspection of Properties and Books, Etc. 42
9.9.1. General. 42
9.9.2. Collateral Reports and Appraisals. 42
9.9.3. Environmental Assessments. 42
9.9.4. Communications with Accountants. 43
9.10. Compliance with Laws, Contracts, Licenses, and Permits. 43
9.11. Employee Benefit Plans. 43
9.12. Use of Proceeds. 43
9.13. Additional Mortgaged Property. 44
9.14. Bank Accounts. 44
9.15. Further Assurances. 45
10. CERTAIN NEGATIVE COVENANTS OF THE BORROWER 45
10.1. Restrictions on Indebtedness. 45
10.2. Restrictions on Liens. 46
10.3. Restrictions on Investments. 47
10.4. Loans to Employees. 48
10.5. Distributions. 49
10.6. Merger, Consolidation and Disposition of Assets. 49
10.6.1. Mergers and Acquisitions. 49
10.6.2. Disposition of Assets. 49
10.7. Sale and Leaseback. 50
10.8. Compliance with Environmental Laws. 50
10.9. Employee Benefit Plans. 50
10.10. Bank Accounts. 50
10.11. Restriction on Subsidiaries. 51
11. FINANCIAL COVENANTS OF THE BORROWER 51
11.1. Capital Expenditures. 51
11.2. Debt Service. 51
11.3. Liabilities to Worth Ratio. 52
11.4. Tangible Net Worth. 52
11.5. Minimum Profitability. 52
12. CLOSING CONDITIONS 52
12.1. Loan Documents. 52
12.2. Certified Copies of Charter Documents. 53
12.3. Corporate, Action. 53
12.4. Incumbency Certificate. 53
12.5. Validity of Liens. 53
12.6. Bank Agency Agreement Amendments. 53
13. CONDITIONS TO ALL BORROWINGS 53
13.1. Representations True; No Event of Default. 54
13.2. No Legal Impediment. 54
13.3. Governmental Regulation. 54
13.4. Proceedings and Documents. 54
13.5. Borrowing Base Report. 54
14. EVENTS OF DEFAULT; ACCELERATION; ETC. 54
14.1. Events of Default and Acceleration. 54
14.2. Termination of Commitment. 57
14.3. Remedies. 58
14.4. Distribution of Collateral Proceeds. 58
15. SETOFF 59
16. THE AGENT 59
16.1. Authorization. 59
16.2. Employees and Agents. 60
16.3. No Liability. 60
16.4. No Representations. 60
16.5. Payments. 61
16.5.1. Payments to Agent. 61
16.5.2. Distribution by Agent. 61
16.5.3. Delinquent Banks. 61
16.6. Holders of Notes. 62
16.7. Indemnity. 62
16.8. Agent as Bank. 62
16.9. Resignation. 62
16.10. Notification of Defaults and Events of Default. 63
17. EXPENSES 63
18. INDEMNIFICATION 64
19. SURVIVAL OF COVENANTS, ETC 65
20. ASSIGNMENT AND PARTICIPATION 65
20.1. Conditions to Assignment by Bank. 65
20.2. New Notes. 66
20.3. Participations. 66
20.4. Disclosure. 66
20.5. Assignee or Participant Affiliated with the Borrower. 66
20.6. Retention of Indemnification Rights. 67
20.7. Assignment by Borrower. 67
21. NOTICES, ETC 67
22. GOVERNING LAW 68
23. HEADINGS 68
24. COUNTERPARTS 68
25. ENTIRE AGREEMENT, ETC. 68
26. WAIVER OF JURY TRIAL 69
27. CONSENTS, AMENDMENTS, WAIVERS, ETC. 69
28. SEVERABILITY 70
SCHEDULES AND EXHIBITS
Schedules:
Schedule 1 Lending Institutions
Schedule 8.3 Title to Properties and Leases
Schedule 8.6 Litigation
Schedule 8.14 Certain Transactions
Schedule 8.17 Environment Compliance
Schedule 8.19 Bank Accounts
Schedule 10.2 Existing Liens
Schedule 10.3 Existing Investments
Exhibits:
Exhibit A Revolving Credit Notes
Exhibit B Term Notes
Exhibit C Borrowing Base Report
Exhibit D Written Notice of Each Loan
Exhibit E Compliance Certificate
AMENDED AND RESTATED
REVOLVING CREDIT
AND
TERM LOAN AGREEMENT
This AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT is made as
of the 3rd day of December, 1996, by and among ARROW AUTOMOTIVE INDUSTRIES,
INC. (the "Borrower"), a Massachusetts corporation having its principal place
of business at 0 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx 00000, THE FIRST
NATIONAL BANK OF BOSTON, a national banking
association ("FNBB"), and the other lending institutions listed on Schedule 1
hereto, and The First National Bank of Boston as agent for itself and such
other lending institutions.
The Borrower and FNBB entered into a Revolving Credit and Term Loan
Agreement, dated as of December 29, 1993, which agreement has been amended from
time to time (as so amended prior to the date hereof, the "Original Agreement")
pursuant to which FNBB made Loans (as such term is defined in
the Original Agreement) to the Borrower. The Borrower has requested, and the
Banks and the Agent have agreed, to make certain amendments to the Original
Agreement. Accordingly, the parties hereto agree to amend and restate the
Original Agreement as follows.
1. DEFINITIONS AND RULES OF INTERPRETATION
1.1. Definitions.
The following terms shall have the meanings set forth in this (section)1 or
elsewhere in the provisions of this Credit Agreement referred to below:
Accounts Receivable. All rights of the Borrower to payment for goods sold,
leased or otherwise marketed in the ordinary course of business and all rights
of the Borrower to payment for services rendered in the ordinary course of
business and all sums of money or other proceeds due thereon pursuant to
transactions with account debtors, except for that portion of the sum of money
or other proceeds due thereon that relate to sales, use or property taxes in
conjunction with such transactions, recorded on books of account in accordance
with generally accepted accounting principles.
Adjustment Date. The first day of the fiscal quarter immediately following the
fiscal quarter in which a certificate of compliance is to be delivered by the
Borrower pursuant to (section)9.4(d).
Affiliate. Any Person that would be considered to be an affiliate of the
Borrower under Rule 144(a) of the Rules and Regulations of the Securities and
Exchange Commission, as in effect on the date hereof, if the Borrower were
issuing securities.
Agent. The First National Bank of Boston acting as agent for the Banks.
Agency Agreements. See (section)9.14(c).
Applicable Margin. For each period commencing on an Adjustment Date through
the date immediately preceding the next Adjustment Date (each a "Rate
Adjustment Period"), the Applicable Margin shall be the applicable margin set
forth below with respect to the Borrower's Debt Service coverage ratio, as
determined for the fiscal quarter specified in the certificate of compliance
delivered by the Borrower during the fiscal quarter immediately preceding the
applicable Rate Adjustment Period.
Level
Debt Service
(Coverage See (section)11.2)
Revolving
Credit/Base
Rate
LoansTerm
Base
Rate
Loans
Revolving
Credit/Eurodollar
Rate Loans
Term
Eurodollar
Rate
LoansILess than or equal
to 0.50:1.003.00%3.25%Not AvailableNot Available
IIGreater than or
equal to 0.76:1.00
but less than
1.00:1.00
2.00%
2.25%
Not Available
Not
Available
IIIGreater than or
equal to 1.01:1:00
but less than
1.25:1.00
1.00%
1.25%
Not Available
Not
Available
IVGreater than or
equal to 1.25:1.00
0.50%
0.75%
3.00%
3.25%
Notwithstanding the foregoing, (a) for Loans outstanding during the
period commencing on September 27, 1996 through the date immediately preceding
the first Adjustment Date to occur after the fiscal quarter ending December 31,
1996, the Applicable Margin shall be as set forth in Level II
above, and (b) if the Borrower fails to deliver any certificate of compliance
when required by (section)9.4(d) hereof then, for the period commencing on the
next Adjustment Date to occur subsequent to such failure through the date
immediately following the date on which such certificate of compliance is
delivered, the Applicable Margin shall be the highest Applicable Margin set
forth above.
Assignment and Acceptance. See (section)20.1.
Autos. The 1984 Rolls Royce which is owned by the Borrower.
Balance Sheet Date. June 26, 1993.
Agent's Head Office. The Agent's head office located at 000 Xxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000, or at such other location as the Agent may
designate from time to time.
Agent's Special Counsel. Xxxxxxx, Xxxx & Xxxxx or such other counsel as may be
approved by the Agent.
Banks. FNBB and the other lending institutions listed on Schedule 1 hereto and
any other Person who becomes an assignee of any rights and obligations of a
Bank pursuant to (section)20.
Base Rate. The higher of (a) the annual rate of interest announced from time
to time by FNBB at its head
office located at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, as its "base rate"
and (b) one-half of one percent (1/2%) above the Federal Funds Effective Rate.
For the purposes of this definition, "Federal Funds Effective Rate" shall mean
for any day, the rate per annum equal to the weighted average of the rates on
overnight federal funds transactions with members of the Federal Reserve System
arranged by federal funds brokers, as published for such day (or, if such day
is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average of the quotations for
such day on such transactions received by the Agent from three funds brokers of
recognized standing selected by the Agent.
Base Rate Loans. Revolving Credit Loans and all or any portion of the Term
Loan bearing interest calculated by reference to the Base Rate.
Borrower. As defined in the preamble hereto.
Borrowing Base. At the relevant time of reference thereto, an amount
determined by the Agent by reference to the most recent Borrowing Base Report
delivered to the Agent pursuant to (section)9.4(g), which is equal to the sum
of:
(a) 55% of Eligible Accounts Receivable for which invoices have been issued
and are payable; plus (b) 25% of the net book value of Eligible Raw
Materials; plus
(c) 25% of the net book value of Eligible Work-in-Process; plus
(d) 50% of the net book value of Eligible Finished Goods Inventory,
provided, that the aggregate amount included in the Borrowing Base under
clauses (b), (c) and (d) of this definition shall not exceed $13,500,000 at any
time.
Borrowing Base Report. A Borrowing Base Report signed by the chief financial
officer or corporate controller of the Borrower and in substantially the form
of Exhibit C hereto.
Business Day. Any day on which banking institutions in Boston, Massachusetts,
are open for the
conduct of a substantial part of its commercial banking business and, in the
case of Eurodollar Rate Loans, also a day which is a Eurodollar Business Day.
Capital Assets. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); provided that Capital Assets shall not
include any item customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with generally accepted
accounting principles.
Capital Expenditures. Amounts paid or indebtedness incurred by the Borrower in
connection with the purchase or lease by the Borrower of Capital Assets that
would be required to be capitalized and shown
on the balance sheet of such Person in accordance with generally accepted
accounting principles.
Capitalized Leases. Leases under which the Borrower is the lessee or obligor,
the discounted future rental payment obligations under which are required to be
capitalized on the balance sheet of the lessee or obligor in accordance with
generally accepted accounting principles.
CERCLA. See (section)8.17.
Change of Control. A change of control shall be deemed to have occurred when
the Holzwasser family (comprised of Xxxx X. Xxxxxxxxxx, Xxxxx X. Xxxxxxxxxx,
the spouse of Xxxxx X. Xxxxxxxxxx, the issue
of either Xxxx X. Xxxxxxxxxx or Xxxxx X. Xxxxxxxxxx, or the spouses of such
issue, the estates of any of the foregoing, or trusts for the benefit of any of
the foregoing) shall fail to legally or beneficially own a sufficient number of
shares of the common stock of the Borrower to decidedly influence decisions of
the Borrower's Board of Directors.
CIT. The CIT Group/Business Credit, Inc.
Closing Date. The first date on which the conditions set forth in (section)12
have been satisfied.
Code. The Internal Revenue Code of 1986, as amended from time to time.
Collateral. All of the property, rights and interests of the Borrower that are
or are intended to be subject
to the security interests and mortgages created by the Security Documents.
Commitment. With respect to each Bank, the amount set forth on Schedule 1
hereto as the amount of such Bank's commitment to make Revolving Credit Loans
and the Term Loan to the Borrower, as the
same may be reduced from time to time; or if such commitment is terminated
pursuant to the provisions
hereof, zero.
Commitment Percentage. With respect to each Bank, the percentage set forth on
Schedule 1 hereto as such Bank's percentage of the aggregate Commitments of all
the Banks.
Conversion Request. A notice given by the Borrower to the Agent of the
Borrower's election to convert or continue a Loan in accordance with
2.7.
Credit Agreement. This Revolving Credit and Term Loan Agreement, including the
Schedules and
Exhibits hereto.
Current Financial Obligations. With respect to any fiscal quarter, an amount
equal to the sum of current maturities of long term debt plus current
maturities under Capitalized Leases that become due and payable or that are to
become due and payable during the next succeeding four (4) fiscal quarters
pursuant to any agreement or instrument to which the Borrower is a party
relating to the borrowing of money or the obtaining of credit or in respect of
Capitalized Leases. Demand obligations shall be deemed to be due and payable
during any fiscal quarter during which such obligations are outstanding.
Default. See 14.1.
Delco Inventory. Inventory of the Borrower manufactured and sold to the
Borrower by A.C. Delco, a division of General Motors Corp., in which A.C. Delco
retains a security interest.
Direct Collection Letter. See 2.10(a).
Distribution. The declaration or payment of any dividend on or in respect of
any shares of any class of capital stock of the Borrower, other than dividends
payable solely in shares of common stock of the Borrower; the purchase,
redemption, or other retirement of any shares of any class of capital stock of
the Borrower; the return of capital by the Borrower to its shareholders as
such; or any other distribution on or in respect of any shares of any class of
capital stock of the Borrower.
Dollars or $. Dollars in lawful currency of the United States of America.
Drawdown Date. The date on which any Revolving Credit Loan or the Term Loan is
made or is to be
made, and the date on which any Revolving Credit Loan is converted or continued
in accordance with
2.7 or all or any portion of the Term Loan is converted or continued
in accordance with 4.5.2.
Eligible Accounts Receivable. The aggregate of the unpaid portions of Accounts
Receivable (net of any credits (other than core or other credits which have
not yet been posted), rebates, offsets, holdbacks or other adjustments or
commissions payable to third parties that are adjustments to such Accounts
Receivable or any Accounts Receivable in respect of consignment sales) (a) that
the Borrower
reasonably and in good faith determines to be collectible; (b) that are with
account debtors that (i) are not Affiliates of the Borrower, (ii) purchased the
goods or services giving rise to the relevant Account Receivable in an arm's
length transaction, (iii) are not insolvent or involved in any case or
proceeding, whether voluntary or involuntary, under any bankruptcy,
reorganization, arrangement, insolvency, adjustment of debt, dissolution,
liquidation or similar law of any jurisdiction and (iv) are, in the Agent's
reasonable judgment, creditworthy; (c) that are in payment of obligations that
have been fully performed and are not subject to dispute; (d) that are not
subject to any pledge, restriction, security interest or other lien or
encumbrance other than those created by the Loan Documents; (e)
in which the Agent has a valid and perfected first priority security interest;
(f) that are not outstanding for more than sixty (60) days past the due date
specified in the respective invoices therefor; (g) that are not due from any
single account debtor if more than fifty percent (50%) of the aggregate amount
(net of the aforesaid credits (except unposted credits), rebates, offsets,
holdbacks and adjustments and commissions described above) of all Accounts
Receivable owing from such account debtor would
otherwise not be Eligible Accounts Receivable; (h) that are payable in Dollars;
and (i) that are not payable from an office outside of the United States or
Canada.
Eligible Assignee. Any of (a) a commercial bank or finance company organized
under the laws of the United States, or any State thereof or the District of
Columbia, and having total assets in excess of $25,000,000,000; and (b) if, but
only if, any Event of Default has occurred and is continuing, any other
bank, insurance company, commercial finance company or other financial
institution or other Person
approved by the Agent, such approval not to be unreasonably withheld.
Eligible Finished Goods Inventory. The gross book value, determined in
accordance with the first-in,
first-out method of inventory accounting, as reflected on the Borrower's books
in accordance with generally accepted accounting principles consistently
applied, of finished goods which are located on property owned or leased by the
Borrower and as to which the Borrower has acquired title and the
Agent has a valid and perfected first-priority security interest under all
applicable law and as to which the Borrower has furnished reasonably detailed
information to the Agent in a Borrowing Base Report, determined after taking
into account all charges and liens (other than those of the Agent and carrier,
warehouse, customs, and similar statutory liens arising in the ordinary course
of business) of all kinds against such finished goods and reductions in the
market value thereof, all as determined by the Agent in its reasonable business
judgment, which, absent manifest error, shall be final and binding upon the
Borrower. Finished goods inventory immediately loses the status of Eligible
Finished Goods Inventory if and when the Borrower sells it, otherwise passes
title thereto, or consumes it, it is damaged or the Agent, at the written
request of the Borrower, releases or transfers its security interest therein,
or if and when an Eligible Account Receivable arises by virtue of constituting
proceeds of such inventory. Notwithstanding the foregoing, but without
duplication, Eligible Finished Goods Inventory shall be reduced by the amount
of any specific reserve established by the Borrower with respect to any
Eligible Finished Goods Inventory other than the LIFO reserve maintained by the
Borrower in
accordance with generally accepted accounting principles.
Eligible Raw Materials. An amount equal to the gross book value, determined in
accordance with the first-in, first-out method of inventory accounting, as
reflected on the Borrower's books in accordance with generally accepted
accounting principles consistently applied, of raw materials used to produce
the Borrower's inventory, which are located on property owned or leased by the
Borrower and as to which the Borrower has acquired title and the Agent has a
valid and perfected first-priority security interest under all applicable law
and as to which the Borrower has furnished reasonably detailed information to
the Agent in a Borrowing Base Report, after taking into account all charges and
liens (other than those
of the Agent and carrier, warehouse, customs and similar statutory liens
arising in the ordinary course of business) of all kinds against such raw
materials and reductions in the market value thereof, all as determined by the
Agent in its reasonable business judgment, which, absent manifest error, shall
be final and binding upon the Borrower. Without limiting the generality of the
foregoing, Eligible Raw Materials shall not include any raw materials covered
by a document of title until the document of title
has been delivered to the Agent. Raw material immediately loses the status of
Eligible Raw Material if and when the Borrower sells it, otherwise passes title
thereto, consumes it, materially changes it in the course of processing the
same, it is damaged, or the Agent, at the written request of the Borrower,
releases or transfers its security interest therein. Notwithstanding the
foregoing, but without duplication, Eligible Raw Materials shall be reduced by
the amount of any specific reserve
established by the Borrower with respect to any Eligible Raw Materials other
than the LIFO reserve maintained by the Borrower in accordance with generally
accepted accounting principles.
Eligible Work-in-Process. An amount equal to the gross book value, as
reflected on the Borrower's books in accordance with generally accepted
accounting principles consistently applied, of usable work-in-process component
parts of the Borrower in connection with the manufacture of their products in
the ordinary course of their business, which is located on property owned or
leased by the Borrower and as to which the Borrower has title and the Agent has
a valid and perfected first-priority security interest and as to which the
Borrower has furnished reasonably detailed
consolidated information to the Agent in a Borrowing Base Report. Work-in-
process immediately loses
the status of Eligible Work-in-Process if and when the Borrower sells it,
otherwise passes title thereto, converts the same to finished goods, or the
Agent, at the written request of the Borrower, releases or transfers its
security interest therein. Notwithstanding the foregoing, but without
duplication, Eligible Work-in-Process shall be reduced by the amount of any
specific reserves established by the Borrower
with respect to any Eligible Work-in-Process other than the LIFO reserve
maintained by the Borrower in accordance with generally accepted accounting
principles.
Environmental Laws. See 8.17(a).
ERISA. The Employee Retirement Income Security Act of 1974, as amended from
time to time.
ERISA Affiliate. Any Person which is treated as a single employer with the
Borrower under 414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of 4043 of ERISA and the regulations
promulgated thereunder as to which the requirement
of notice has not been waived.
Eurocurrency Reserve Rate. For any day with respect to a Eurodollar Rate Loan,
the maximum rate (expressed as a decimal) at which any lender subject thereto
would be required to maintain reserves under Regulation D of the Board of
Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.
Eurodollar Business Day. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or
such other eurodollar interbank market as may be selected by the Agent in its
sole discretion acting in good faith.
Eurodollar Rate. For any Interest Period with respect to a Eurodollar Rate
Loan, the rate of interest equal to (a) the per annum rate at which the Agent
is offered Dollar deposits two (2) Eurodollar Business Days prior to the
beginning of such Interest Period in the interbank eurodollar market where the
eurodollar and foreign currency and exchange operations of the Agent are
customarily conducted, for delivery on the first day of such Interest Period
for the number of days comprised therein and in an amount comparable to the
amount of the Eurodollar Rate Loan of the Agent to which such Interest Period
applies, divided by (b) a number equal to 1.00 minus the Eurocurrency Reserve
Rate, if applicable.
Eurodollar Rate Loans. Revolving Credit Loans and all or any portion of the
Term Loan bearing interest calculated by reference to the Eurodollar Rate.
Event of Default. See 14.1.
Existing Employee Loans. Loans and advances by the Borrower to its employees
existing on the date hereof, the amount of which does not exceed $600,000 in
the aggregate as of the date hereof.
FNBB. See the preamble hereto.
generally accepted accounting principles. (a) When used in 11,
whether directly or indirectly through
reference to a capitalized term used therein, means (i) principles that are
consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors, in effect for the fiscal year
ended on the Balance Sheet Date, and (ii) to the extent consistent with such
principles, the accounting practice of the Borrower reflected in its financial
statements for the year ended on the Balance Sheet Date, and (b) when used in
general, other than as provided above, means principles that are (i) consistent
with the principles promulgated or adopted by the Financial Accounting
Standards Board and its predecessors, as in effect from time to time, and (ii)
consistently applied with past financial statements of the Borrower adopting
the same principles, provided that in each case
referred to in this definition of "generally accepted accounting principles" a
certified public accountant would, insofar as the use of such accounting
principles is pertinent, be in a position to deliver an unqualified opinion
(other than a qualification regarding changes in generally accepted accounting
principles) as to financial statements in which such principles have been
properly applied.
Guaranteed Pension Plan. Any employee pension benefit plan within the meaning
of 3(2) of ERISA maintained or contributed to by the Borrower or any
ERISA Affiliate the benefits of which are guaranteed on termination in full or
in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
Hazardous Substances. See 8.17(b).
Indebtedness. All obligations, contingent and otherwise, that in accordance
with generally accepted
accounting principles should be classified upon the obligor's balance sheet as
liabilities, or to which reference should be made by footnotes thereto,
including in any event and whether or not so classified: (a) all debt and
similar monetary obligations, whether direct or indirect; (b) all liabilities
secured by any mortgage, pledge, security interest, lien, charge or other
encumbrance
existing on property owned or acquired subject thereto, whether or not the
liability secured thereby shall have been assumed; and (c) all guarantees,
endorsements and other contingent obligations whether direct or indirect in
respect of indebtedness of others, including any obligation to supply funds to
or in any manner to invest in, directly or indirectly, the debtor, to purchase
indebtedness, or to assure the owner of indebtedness against loss, through an
agreement to purchase goods, supplies, or services for the purpose of enabling
the debtor to make payment of the indebtedness held by such owner or
otherwise, and the obligations to reimburse the issuer in respect of any
letters of credit.
Interest Payment Date. (a) As to any Base Rate Loan, the last day of the
calendar month which includes the Drawdown Date thereof; and (b) as to any
Eurodollar Rate Loan the last day of such Interest Period.
Interest Period. With respect to each Revolving Credit Loan or all or any
relevant portion of the Term Loan, (a) initially, the period commencing on the
Drawdown Date of such Loan and ending on the last
day of one of the periods set forth below, as selected by the Borrower in a
Loan Request (i) for any Base Rate Loan, the last day of the calendar month;
and (ii) for any Eurodollar Rate Loan, 1, 2, or 3 months; and (b) thereafter,
each period commencing on the last day of the next preceding Interest Period
applicable to such Revolving Credit Loan or all or such portion of the Term
Loan and ending on the
last day of one of the periods set forth above, as selected by the Borrower in
a Conversion Request; provided that all of the foregoing provisions relating to
Interest Periods are subject to the following:
(A) if any Interest Period with respect to a Eurodollar Rate Loan would
otherwise end on a day that is not a Eurodollar Business Day, that Interest
Period shall be extended to the next succeeding Eurodollar Business Day unless
the result of such extension would be to carry such Interest Period into
another calendar month, in which event such Interest Period shall end on the
immediately preceding
Eurodollar Business Day;
(B) if any Interest Period with respect to a Base Rate Loan would end on a
day that is not a Business Day, that Interest Period shall end on the next
succeeding Business Day;
(C) if the Borrower shall fail to give notice as provided in 2.7,
the Borrower shall be deemed to have requested a conversion of the affected
Eurodollar Rate Loan to a Base Rate Loan and the continuance of all Base Rate
Loans as Base Rate Loans on the last day of the then current Interest Period
with respect thereto;
(D) any Interest Period relating to any Eurodollar Rate Loan that begins on
the last Eurodollar Business Day of a calendar month (or on a day for which
there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the last
Eurodollar Business Day of a calendar month; and
(E) any Interest Period relating to any Eurodollar Rate Loan that would
otherwise extend beyond the Revolving Credit Loan Maturity Date (if comprising
a Revolving Credit Loan) or the Term Loan Maturity Date (if comprising the Term
Loan or a portion thereof) shall end on the Revolving Credit Loan Maturity Date
or (as the case may be) the Term Loan Maturity Date.
Investments. All expenditures made and all liabilities incurred (contingently
or otherwise) for the acquisition of stock or Indebtedness of, or for loans,
advances, capital contributions or transfers
of property to, or in respect of any guaranties (or other commitments as
described under Indebtedness), or obligations of, any Person. In determining
the aggregate amount of Investments outstanding at any particular time: (a) the
amount of any Investment represented by a guaranty shall be taken at not less
than the principal amount of the obligations guaranteed and still outstanding;
(b) there shall be included as an Investment all interest accrued with respect
to Indebtedness constituting an Investment unless and until such interest is
paid; (c) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption,
retirement, repayment, liquidating dividend or liquidating distribution); (d)
there shall not be deducted in respect of any Investment any amounts received
as earnings on such Investment, whether as dividends, interest or otherwise,
except that accrued interest included as provided in the foregoing clause (b)
may be deducted when paid; and
(e) there shall not be deducted from the aggregate amount of Investments any
decrease in the value thereof.
ITT. ITT Commercial Finance Corp.
Letter of Credit. See 5.1.1.
Letter of Credit Application. See 5.1.2.
Loan Documents. This Credit Agreement, the Notes, the Letter of Credit
Applications, the Letters of Credit and the Security Documents.
Loan Request. See 2.6.
Loans. The Revolving Credit Loans and the Term Loan.
Majority Banks. As of any date, (a) if there are only two (2) Banks, Majority
Banks shall mean both Banks, and (b) if there are three (3) or more Banks,
Majority Banks shall mean the Banks holding at least sixty-six and two thirds
percent (66 2/3%) of the outstanding principal amount of the Notes on such
date; and if no such principal is outstanding the Banks whose aggregate
Commitments constitute sixty-six and two thirds percent (66 2/3%).
Maximum Drawing Amount. The maximum aggregate amount from time to time that
the beneficiaries
may draw under outstanding Letters of Credit, as such aggregate amount may be
reduced from time to time pursuant to the terms of the Letters of Credit.
Mortgaged Property. Any Real Estate which is subject to any Mortgage.
Mortgages. The several mortgages and deeds of trust, dated or to be dated on
or prior to the Closing Date, as amended and effect from time to time, from the
Borrower to the Agent with respect to the fee interests of the Borrower in the
Real Estate and in form and substance satisfactory to the Agent.
Multiemployer Plan. Any multiemployer plan within the meaning of
3(37) of ERISA maintained or contributed to by the Borrower or any
ERISA Affiliate.
Net Income (or Deficit). The net income (or deficit) of the Borrower after
deduction of all other expenses, taxes, and other proper charges, determined in
accordance with generally accepted accounting principles provided, however, net
income shall not be charged with any unamortized debt
expense (including but not limited to any prepayment premiums or penalties)
incurred in connection with the refinancing of the credit facilities provided
by CIT and ITT to the Borrower.
Notes. The Term Notes and the Revolving Credit Notes.
Obligations. All indebtedness, obligations and liabilities of the Borrower to
any of the Banks and the Agent, individually or collectively, existing on the
date of this Credit Agreement or arising thereafter, direct or indirect, joint
or several, absolute or contingent, matured or unmatured, liquidated or
unliquidated, secured or unsecured, arising by contract, operation of law or
otherwise, arising or incurred under this Credit Agreement or any of the other
Loan Documents or in respect of any of the Loans made or any of the Notes,
Letter of Credit Application, Letter of Credit or other instruments at any time
evidencing any thereof.
outstanding. With respect to the Loans, the aggregate unpaid principal thereof
as of any date of determination.
PBGC. The Pension Benefit Guaranty Corporation created by 4002 of
ERISA and any successor entity or entities having similar responsibilities.
Perfection Certificate. The Perfection Certificate as defined in the Security
Agreement.
Permitted Liens. Liens, security interests and other encumbrances permitted by
10.2.
Person. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
Real Estate. All real property at any time owned or leased (as lessee or
sublessee) by the Borrower.
Record. The grid attached to a Note, or the continuation of such grid, or any
other similar record, including computer records, maintained by any Bank with
respect to any Loan referred to in such Note.
Revolving Credit Loan Maturity Date. September 30, 1997.
Revolving Credit Loans. Revolving credit loans made or to be made by the Banks
to the Borrower
pursuant to 2.
Revolving Credit Note Record. A Record with respect to a Revolving Credit
Note.
Revolving Credit Notes. See 2.4.
Security Agreement. The Security Agreement, dated or to be dated on or prior
to the Closing Date, between the Borrower and the Agent (as amended and in
effect from time to time) and in form and substance satisfactory to the Agent.
Security Documents. The Security Agreement, the Mortgages, the Trademark
Assignment and the Agency Agreements.
Subsidiary. Any corporation, association, trust, or other business entity of
which the designated parent shall at any time own directly or indirectly
through a Subsidiary or Subsidiaries at least a majority (by number of votes)
of the outstanding Voting Stock.
Survey. In relation to each Mortgaged Property, an instrument survey of such
Mortgaged Property dated as of a date subsequent to November, 1993, which shall
show the location of all buildings, structures, easements and utility lines on
such Mortgaged Property, shall be sufficient to remove the survey exception
from the Title Policy, shall show that all buildings and structures are within
the lot lines of such Mortgaged Property, shall not show any encroachments by
others, shall show the zoning district or districts in which such Mortgaged
Property is located in a flood hazard district as established by the Federal
Emergency Management Agency or any successor agency or is located in any flood
plain, flood hazard or wetland protection district established under federal,
state or local law.
Surveyor Certificate. In relation to each Mortgaged Property for which a
Survey has been conducted, a certificate executed by the surveyor who prepared
such Survey dated as of a recent date and containing such information relating
to such Mortgaged Property as the Agent or the Title Insurance Company may
require, such certificate to be satisfactory to the Agent in form and
substance.
Tangible Net Worth. The excess of Total Assets over Total Liabilities, and
less the sum of:
(a) the total book value of all assets of the Borrower properly classified
as intangible assets under generally accepted accounting principles, including
such items as good will, the purchase price of acquired assets in excess of the
fair market value thereof to the extent of such excess, trademarks, trade
names, service marks, brand names, copyrights, patents and licenses, and rights
with respect to the foregoing; plus
(b) all amounts representing any write-up in the book value of any assets
of the Borrower resulting from a revaluation thereof subsequent to the Balance
Sheet Date.
Term Loan. The term loan made or to be made by the Banks to the Borrower in
the maximum aggregate principal amount of [$9,000,000] pursuant to
4.1.
Term Loan Maturity Date. December 31, 2000.
Term Notes. See 4.2.
Term Note Record. A Record with respect to a Term Note.
Title Insurance Company shall mean Commonwealth Land Title Insurance Company.
Title Policy. In relation to each Mortgaged Property, an ALTA standard form
title insurance policy issued by the Title Insurance Company (with such
reinsurance or co-insurance as the Agent may require, any
such reinsurance to be with direct access endorsements) in such amount as may
be determined by the Agent insuring the priority of the Mortgage of such
Mortgaged Property and that the Borrower holds marketable fee simple title to
such Mortgaged Property, subject only to the encumbrances permitted by
such Mortgage and which shall not contain exceptions for mechanics liens,
persons in occupancy or
matters which would be shown by a survey (except as may be permitted by such
Mortgage), shall not
insure over any matter except to the extent that any such affirmative insurance
is acceptable to the Agent in its sole discretion, and shall contain such
endorsements and affirmative insurance as the Agent in its discretion may
require, including but not limited to (a) comprehensive endorsement, (b)
variable rate of interest endorsement, (c) usury endorsement, (d) revolving
credit endorsement, (e) tie-in endorsement, (f) doing business endorsement and
(g) ALTA form 3.1 zoning endorsement.
Total Assets. All assets of the Borrower determined on a consolidated basis in
accordance with generally accepted accounting principles.
Total Commitment. The sum of the Commitments of the Banks, as in effect from
time to time.
Total Debt Service. For any period, the sum of Total Interest Expense plus
twenty-five percent (25%) of Current Financial Obligations.
Total Interest Expense. For any period, the aggregate amount of interest
required to be paid or accrued by the Borrower during such period on all
Indebtedness of the Borrower outstanding during all or any part of such period,
whether such interest was or is required to be reflected as an item of expense
or capitalized, including payments consisting of interest in respect of
Capitalized Leases.
Total Liabilities. All liabilities of the Borrower determined in accordance
with generally accepted accounting principles and all Indebtedness of the
Borrower, whether or not so classified.
Trademark Assignment. The Trademark Assignment, dated or to be dated on or
prior to the Closing
Date, made by the Borrower in favor of the Agent (as amended and in effect from
time to time).
Type. As to any Revolving Credit Loan or all or any portion of the Term Loan,
its nature as a Base Rate Loan or a Eurodollar Rate Loan.
Uniform Customs. With respect to any Letter of Credit, the Uniform Customs and
Practice for Documentary Credits (1983 Revision), International Chamber of
Commerce Publication No. 400 or
any successor version thereto adopted by the Agent in the ordinary course of
its business as a letter of credit issuer and in effect at the time of issuance
of such Letter of Credit.
Voting Stock. Stock or similar interests, of any class or classes (however
designated), the holders of which are at the time entitled, as such holders, to
vote for the election of a majority of the directors (or persons performing
similar functions) of the corporation, association, trust or other business
entity involved, whether or not the right so to vote exists by reason of the
happening of a contingency.
1.2. Rules of Interpretation.
(a) A reference to any document or agreement shall include such
document or agreement as
amended, modified or supplemented from time to time in accordance with its
terms and the
terms of this Credit Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification
to such law.
(d) A reference to any Person includes its permitted successors and
permitted assigns.
(e) Accounting terms not otherwise defined herein have the meanings
assigned to them by
generally accepted accounting principles applied on a consistent basis by the
accounting entity
to which they refer.
(f) The words "include", "includes" and "including" are not
limiting.
(g) All terms not specifically defined herein or by generally
accepted accounting principles,
which terms are defined in the Uniform Commercial Code as in effect in the
Commonwealth of Massachusetts, have the meanings assigned to them therein.
(h) Reference to a particular "" refers to that section of this
Credit Agreement unless
otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of like
import shall refer to this Credit Agreement as a whole and not to any
particular section or subdivision of this Credit
Agreement.
2. THE REVOLVING CREDIT FACILITY
2.1. Commitment to Lend.
Subject to the terms and conditions set forth in this Credit Agreement, each of
the Banks severally agrees to lend to the Borrower and the Borrower may borrow,
repay, and reborrow from time to time between
the Closing Date and the Revolving Credit Loan Maturity Date upon notice by the
Borrower to the
Agent given in accordance with 2.6, such sums as are requested by the
Borrower up to a maximum
aggregate amount outstanding from such Bank (after giving effect to all
amounts requested) at any one time equal to such Bank's Commitment to make
Revolving Credit Loans minus such Bank's Commitment Percentage of the Maximum
Drawing Amount, provided that the sum of the outstanding amount of the
Revolving Credit Loans (after giving effect to all amounts requested) plus the
Maximum Drawing Amount shall not at any time exceed the lesser of (a) the sum
of the Bank's Commitments to make Revolving Credit Loans and (b) the Borrowing
Base. Each request for a Revolving Credit Loan hereunder shall
constitute a representation and warranty by the Borrower that the conditions
set forth in 12 and 13, in the case of the initial Revolving
Credit Loans to be made on the Closing Date, and 13, in the case of
all other Revolving Credit Loans, have been satisfied on the date of such
request.
2.2. Commitment Fee.
The Borrower agrees to pay to the Agent for the account of the Banks a
commitment fee calculated at the rate of one-quarter of one percent (1/4%) per
annum on the average daily amount during each calendar quarter or portion
thereof from the date hereof to the Revolving Credit Loan Maturity Date by
which the Commitment minus the Maximum Drawing Amount exceeds the outstanding
amount of Revolving Credit
Loans during such calendar quarter. The commitment fee shall be payable
quarterly in arrears on the first day of each calendar quarter for the
immediately preceding calendar quarter commencing on the first such date
following the date hereof, with a final payment on the Revolving Credit
Maturity Date or any earlier date on which the Commitment shall terminate.
2.3. Reduction of Commitment.
The Borrower shall have the right at any time and from time to time upon five
(5) Business Days' prior
written notice to the Agent to reduce by $500,000 or an integral multiple
thereof or terminate entirely the Total Commitment, whereupon the Commitments
of the Banks to make Revolving Credit Loans shall be
reduced pro rata in accordance with their respective Commitment Percentages of
the amount specified in such notice or, as the case may be, terminated.
Promptly after receiving any notice of the Borrower delivered pursuant to this
2.3, the Agent will notify the Banks of the substance thereof. Upon
the effective date of any such reduction or termination, the Borrower shall pay
to the Agent the full amount of any commitment fee then accrued on the amount
of the reduction. No reduction or termination of the Commitments may be
reinstated.
2.4. The Revolving Credit Notes.
The Revolving Credit Loans shall be evidenced by separate promissory notes of
the Borrower in substantially the form of Exhibit A hereto (each a "Revolving
Credit Note" and together the "Revolving Credit Notes"), dated as of December
29, 1993 and completed with appropriate insertions.
One Revolving Credit Note shall be payable to the order of each Bank in a
principal amount equal to such Bank's Commitment to make Revolving Credit Loans
or, if less, the outstanding amount of all Revolving Credit Loans made by such
Bank, plus interest accrued thereon, as set forth below. The Borrower
irrevocably authorizes each Bank to make or cause to be made, at or about the
time of the
Drawdown Date of any Revolving Credit Loan or at the time of receipt of any
payment of principal on such Bank's Revolving Credit Note, an appropriate
notation on such Bank's Revolving Credit Note Record reflecting the making of
such Revolving Credit Loan or (as the case may be) the receipt of such payment.
The outstanding amount of the Revolving Credit Loans set forth on such Bank's
Revolving Credit Note Record shall be prima facie evidence of the principal
amount thereof owing and unpaid to such Bank, but the failure to record, or any
error in so recording, any such amount on such Bank's Revolving Credit Note
Record shall not limit or otherwise affect the obligations of the Borrower
hereunder or under any Revolving Credit Note to make payments of principal of
or interest on any
Revolving Credit Note when due.
2.5. Interest on Revolving Credit Loans.
Except as otherwise provided in 6.9:
(a) Each Base Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of the
Interest Period with respect thereto at the rate per annum equal to the Base
Rate plus the Applicable Margin.
(b) Each Eurodollar Rate Loan shall bear interest for the period commencing
with the
Drawdown Date thereof and ending on the last day of the Interest Period with
respect thereto
at the rate per annum equal to the Eurodollar Rate plus the Applicable Margin.
(c) The Borrower promises to pay interest on each Revolving Credit
Loan in arrears on each Interest Payment Date with respect thereto and
authorizes the Agent to deduct and disburse to
the respective accounts of the Banks the amount of such interest from the
Borrower's bank account no. 00000000 maintained with at the Agent (or such
other account at the Agent as may be designated by the Borrower from time to
time by written notice to the Agent) on each Interest Payment Date.
2.6. Requests for Revolving Credit Loans.
(a) The Borrower shall give to the Agent written notice in the form
of Exhibit D hereto (or telephonic notice confirmed in a writing in the form of
Exhibit D hereto) of each Revolving
Credit Loan requested hereunder (a "Loan Request") no later than (a) 11:00 a.m.
(Boston time) on the proposed Drawdown Date of any Base Rate Loan and (b) two
(2) Eurodollar Business Days prior to the proposed Drawdown Date of any
Eurodollar Rate Loan. Each such notice
shall specify (i) the principal amount of the Revolving Credit Loan requested,
(ii) the proposed Drawdown Date of such Revolving Credit Loan, (iii) the
Interest Period for such Revolving Credit Loan and (iv) the Type of such
Revolving Credit Loan. Promptly upon receipt of any
such notice, the Agent shall notify each of the Banks thereof. Subject to the
foregoing, so long as the Total Commitment is then in effect and the conditions
set forth in 13 hereof have been met, the Agent shall advance the
amount requested to the Borrower's bank account no.
00000000 (or such other account maintained with the Agent as may be designated
by the
Borrower from time to time by written notice to the Agent) at the Agent in
immediately available funds not later than the close of business on such
Drawdown Date.
(b) Notwithstanding the notice requirement set forth in
2.6(a) or the Loan Request amounts set forth in 2.6(c), the
Banks shall, so long as the Total Commitment is then in effect and the
conditions set forth in 13 hereof have been satisfied, make Revolving
Credit Loans to the
Borrower by entry of credits by the Agent to the Borrower's bank account no.
00000000 (or such other account at the Agent as may be designated by the
Borrower from time to time by written notice to the Agent) with the Agent to
cover checks or other charges which the Borrower has drawn or made against such
account. The Borrower hereby requests and authorizes the Banks to make from
time to time such Revolving Credit Loans by means of
appropriate entries of such credits sufficient to cover checks and other
charges, including but not limited to charges for interest due in accordance
with 2.5 then presented. The Borrower and the Banks acknowledge and
agree that the making of such Revolving Credit Loans shall, in each case, be
subject in all respects to provisions of this Credit Agreement as if they were
Revolving Credit Loans requested in writing or telephonically pursuant to
2.6(a). All actions taken by the Agent and the Banks pursuant to the
provisions of this 2.6(b) shall be binding on the Borrower.
(c) Each Loan Request shall be irrevocable and binding on the
Borrower and shall obligate the Borrower to accept the Revolving Credit Loan
requested from the Agent on behalf of the
Banks on the proposed Drawdown Date. Each Loan Request (i) pertaining to
Eurodollar Rate Loans shall be in a minimum aggregate amount of $1,000,000 or a
whole multiple of $100,000 in excess thereof, and (ii) pertaining to Base Rate
Loans shall be in a minimum aggregate amount of $100,000 or an integral
multiple thereof.
2.7. Conversion Options.
2.7.1. Conversion to Different Type of Revolving Credit Loan.
The Borrower may elect from time to time to convert any outstanding
Revolving Credit Loan to
a Revolving Credit Loan of another Type, provided that (a) with respect to any
such conversion
of a Eurodollar Rate Loan to a Base Rate Loan, the Borrower shall notify the
Agent by 11:00
a.m. (Boston time) of such election; (b) with respect to any such conversion of
a Base Rate Loan to a Eurodollar Rate Loan, the Borrower shall give the Agent
at least two (2) Eurodollar Business Days' prior written notice of such
election; (c) with respect to any such conversion of a Eurodollar Rate Loan
into a Base Rate Loan, such conversion shall only be made on the last day of
the Interest Period with respect thereto and (d) no Base Rate Loan may be
converted into a Eurodollar Rate Loan when any Default or Event of Default has
occurred and is continuing. On the date on which such conversion is being made
each Bank shall take such action as is necessary to transfer its Commitment
Percentage of such Revolving Credit Loans to its
Domestic Lending Office or it Eurodollar Lending Office, as the case may be.
All or any part of outstanding Revolving Credit Loans of any Type may be
converted into a Revolving Credit Loan of another Type as provided herein,
provided that any partial conversion (a) into a Eurodollar Rate Loan shall be
in an aggregate principal amount of $1,000,000 or a whole multiple of $100,000
in excess thereof and (b) into a Base Rate Loan shall be in an aggregate
principal amount of $100,000 or an integral multiple thereof. Each Conversion
Request relating to the conversion of a Revolving Credit Loan to a Eurodollar
Rate Loan shall be irrevocable by the Borrower.
2.7.2. Construction of Type of Revolving Credit Loan.
Any Revolving Credit Loan of any Type may be continued as a Revolving
Credit Loan of the same Type upon the expiration of an Interest Period with
respect thereto by compliance by the Borrower with the notice provisions
contained in 2.7.1; provided that no Eurodollar Rate Loan may be
continued as such when any Default or Event of Default has occurred and is
continuing, but shall be automatically converted to a Base Rate Loan on the
last day of the first Interest Period relating thereto ending during the
continuance of any Default or Event of Default of which officers of the Agent
active upon the Borrower's account have actual knowledge. In the event that
the Borrower fails to provide any such notice with respect to the continuation
of any Eurodollar Rate Loan as such, then such Eurodollar Rate Loan shall be
automatically converted to a Base Rate Loan on the last day of the first
interest period relating thereto.
2.7.3. Eurodollar Rate Loans.
Any conversion to or from Eurodollar Rate Loans shall be in such
amounts and be made pursuant to such elections so that, after giving effect
thereto, the minimum principal
amount of each of the Eurodollar Rate Loans having the same Interest Period
shall not be less than $1,000,000 and shall be in the amount of $1,000,000 or a
whole multiple of $100,000 in excess thereof.
2.8. Funds for Revolving Credit Loan.
2.8.1. Funding Procedures.
Not later than 11 o'clock a.m. (Boston time) on the proposed Drawdown
Date of any Revolving Credit Loans, each of the Banks will make available to
the Agent, at its Head Office, in immediately available funds, the amount of
such Bank's Commitment Percentage of the
amount of the requested Revolving Credit Loans. Upon receipt from each Bank of
such
amount, and upon receipt of the documents required by 12 and
13 and the satisfaction of the other conditions set forth therein, to the
extent applicable, the Agent will make available to the Borrower the aggregate
amount of such Revolving Credit Loans made available to the Agent by
the Banks. The failure or refusal of any Bank to make available to the Agent
at the aforesaid time and place on any Drawdown Date the amount of its
Commitment Percentage of the
requested Revolving Credit Loans shall not relieve any other Bank from its
several obligation hereunder to make available to the Agent the amount of such
other Bank's Commitment
Percentage of any requested Revolving Credit Loans.
2.8.2. Advances by Agent.
The Agent may, unless notified to the contrary by any Bank prior to a
Drawdown Date, assume that such Bank has made available to the Agent on such
Drawdown Date the amount of such
Bank's Commitment Percentage of the Revolving Credit Loans to be made on such
Drawdown
Date, and the Agent may (but it shall not be required to), in reliance upon
such assumption, make available to the Borrower a corresponding amount. If any
Bank makes available to the Agent such amount on a date after such Drawdown
Date, such Bank shall pay to the Agent on demand an amount equal to the product
of (i) the average computed for the period referred to in clause (iii) below,
of the weighted average interest rate paid by the Agent for federal funds
acquired by the Agent during each day included in such period, times (ii) the
amount of such Bank's Commitment Percentage of such Revolving Credit Loans,
times (iii) a fraction, the numerator of which is the number of days that
elapse from and including such Drawdown
Date to the date on which the amount of such Bank's Commitment Percentage of
such Revolving Credit Loans shall become immediately available to the Agent,
and the denominator of which is 365. A statement of the Agent submitted to
such Bank with respect to any amounts owing under this paragraph shall be prima
facie evidence of the amount due and owing to the Agent by such Bank. If the
amount of such Bank's Commitment Percentage of such Revolving Credit Loans is
not made available to the Agent by such Bank within three (3) Business Days
following such Drawdown Date and the Agent has made the
funds available to the Borrower pursuant to this 2.8, the Agent shall
be entitled to recover such amount from the Borrower on demand, with interest
thereon at the rate per annum applicable to
the Revolving Credit Loans made on such Drawdown Date.
2.9. Change in Borrowing Base.
The Borrowing Base shall be determined monthly (or at such other interval as
may be specified pursuant to 9.4(g)) by the Agent by reference to the
Borrowing Base Report.
3. REPAYMENT OF THE REVOLVING CREDIT LOANS
3.1. Maturity.
The Borrower promises to pay to the Agent for the accounts of the Banks on the
Revolving Credit Loan Maturity Date, and there shall become absolutely due and
payable on the Revolving Credit Loan Maturity Date, all of the Revolving Credit
Loans outstanding on such date, together with any and all accrued and unpaid
interest thereon.
3.2. Mandatory Repayments of Revolving Credit Loans.
If at any time the sum of the outstanding amount of the Revolving Credit Loans
and the Maximum Drawing Amount exceeds the lesser of (a) the Commitment and (b)
the Borrowing Base, then the
Borrower shall immediately pay the amount of such excess to the Agent for
application: first, to the Revolving Credit Loans; and second, to provide to
the Agent cash collateral for Obligations relating to Letters of Credit as
contemplated by 5.2(c) and (d).
3.3. Optional Repayments of Revolving Credit Loans.
The Borrower shall have the right, at its election, to repay the outstanding
amount of the Revolving Credit Loans, as a whole or in part, at any time
without penalty or premium, provided that any full or
partial prepayment of the outstanding amount of any Eurodollar Rate Loans
pursuant to this 3.3 may be
made only on the last day of the Interest Period relating thereto. The
Borrower shall give the Agent prior written notice of any proposed prepayment
pursuant to this 3.3 of Base Rate Loans, no later than 10:00 a.m.,
Boston time, on the day of such prepayment and two (2) Eurodollar Business
Days' notice of any proposed prepayment pursuant to this 3.3 of
Eurodollar Rate Loans, in each case specifying the proposed date of prepayment
of Revolving Credit Loans and the principal amount to be prepaid. Except with
respect to funds applied pursuant to 9.14 hereof, each such partial
prepayment of the Revolving Credit Loans shall be in an integral multiple of
$100,000, shall be accompanied by the payment of accrued interest on the
principal prepaid to the date of prepayment, shall be allocated among the
Banks, in proportion, as nearly as practicable, to the respective unpaid
principal amount of such Bank's Revolving Credit Note, and shall be applied, in
the absence of instruction by the Borrower, first to the principal of Base Rate
Loans and then to the principal of Eurodollar Rate Loans.
4. THE TERM LOAN
4.1. Commitment to Lend.
Subject to the terms and conditions set forth in this Credit Agreement, each
Bank agrees to lend to the Borrower the amount of its Commitment Percentage of
the original principal amount of $9,000,000.
4.2. The Term Note.
The Term Loan shall be evidenced by separate promissory notes of the Borrower
in substantially the form of Exhibit B hereto (each a "Term Note" and together
the "Term Notes"), dated the Closing Date and completed with appropriate
insertions. One Term Note shall be payable to the order of each Bank in a
principal amount equal to such Bank's Commitment Percentage of the Term Loan
and representing the obligation of the Borrower to pay to the Bank such
principal amount or, if less, the outstanding amount of the such Bank's
Commitment Percentage of Term Loan, plus interest accrued thereon, as set forth
below. The Borrower irrevocably authorizes each Bank to make or cause to be
made a notation on
such Bank's Term Note Record, at or about the time of such Bank's receipt of
any principal payment on the Term Note, reflecting such payment. The aggregate
unpaid amount set forth on such Bank's Term Note Record shall be prima facie
evidence of the principal amount thereof owing and unpaid to such Bank, but the
failure to record, or any error in so recording, any such amount on any Term
Note Record shall not affect the obligations of the Borrower hereunder or under
such Term Note to make payments of principal of and interest on any Term Note
when due.
4.3. Schedule of Installment Payments of Principal Term Loan.
The Borrower promises to pay to the Agent for the account of the Banks the
principal amount of the Term Loan in twenty-eight (28) consecutive quarterly
installments of $321,428.57, such installments to be due and payable on the
last day of each calendar quarter of each calendar year, commencing on March
31, 1994, except the final payment which shall be due and payable on the Term
Loan Maturity Date in an amount equal to the unpaid balance of the Term Loan.
4.4. Optional Prepayment of Term Loan.
The Borrower shall have the right at any time to prepay the Term Notes on or
before the Term Loan
Maturity Date, as a whole, or in part, upon not less than five (5) Business
Days' prior written notice to the Agent, without premium or penalty, provided
that (a) each partial prepayment shall be in the principal amount of $100,000
(aggregated between/among the Banks) or an integral multiple thereof, (b) no
portion of the Term Loan bearing interest at the Eurodollar Rate may be prepaid
pursuant to this 4.4 except on the last day of the Interest Period
relating thereto and (c) each partial payment shall be allocated among the
Banks, in proportion, as nearly as practicable, to the respective outstanding
amount of each Bank's Term Note. Any prepayment of principal of the Term Loan
shall include all interest accrued to the date of prepayment and shall be
applied against the scheduled installments of principal due on the Term Loan in
the inverse order of maturity. No amount repaid with respect to the Term Loan
may be reborrowed.
4.5. Interest on Term Loan.
4.5.1. Interest Rates.
Except as otherwise provided in 6.9, the Term Loan shall bear
interest during each Interest Period relating to all or any portion of the Term
Loan at the following rates:
(a) To the extent that all or any portion of the Term Loan bears
interest during
such Interest Period at the Base Rate, the Term Loan or such portion shall bear
interest during such Interest Period at the rate per annum equal to the Base
Rate
plus the Applicable Margin.
(b) To the extent that all or any portion of the Term Loan bears
interest during
such Interest Period at the Eurodollar Rate, the Term Loan or such portion
shall bear interest during such Interest Period at the rate per annum equal to
the Eurodollar Rate plus the Applicable Margin.
The Borrower promises to pay interest on the Term Loan or any portion thereof
outstanding during each Interest Period in arrears on each Interest Payment
Date applicable to such Interest Period.
4.5.2. Notification by Borrower.
The Borrower shall notify the Agent, such notice to be irrevocable, at
least two (2) Eurodollar Business Days prior to the Drawdown Date of the Term
Loan if all or any portion of the Term
Loan is to bear interest at the Eurodollar Rate. After the Term Loan has been
made, the provisions of 2.7 shall apply mutatis mutandis with respect
to all or any portion of the Term Loan so that the Borrower may have the same
interest rate options with respect to all or any portion of the Term Loan as it
would be entitled to with respect to the Revolving Credit Loans.
4.5.3. Amounts, etc.
Any portion of the Term Loan bearing interest at the Eurodollar Rate
relating to any Interest Period shall be in the amount of $1,000,000 or a whole
multiple of $100,000 in excess
thereof. No Interest Period relating to the Term Loan or any portion thereof
bearing
interest at the Eurodollar Rate shall extend beyond the date on which a
regularly scheduled installment payment of the principal of the Term Loan is to
be made unless a portion of the Term Loan at least equal to such installment
payment has an Interest Period ending on such date or is then bearing interest
at the Base Rate.
5. LETTERS OF CREDIT
5.1. Letter of Credit Commitments.
5.1.1. Commitment to Issue Letters of Credit.
Subject to the terms and conditions hereof and the execution and
delivery by the Borrower of a letter of credit application on the Agent's
customary form (a "Letter of Credit Application"), the Agent on behalf of the
Banks, in reliance upon the representations and warranties of the
Borrower contained herein, agrees, in its individual capacity, to issue, extend
and renew for the account of the Borrower one or more standby or documentary
letters of credit (individually, a "Letter of Credit"), in such form as may be
requested from time to time by the Borrower and agreed to by the Agent;
provided, however, that, after giving effect to such request, (a) the aggregate
Maximum Drawing Amount shall not exceed $1,000,000 at any one time for standby
Letters of Credit and $500,000 at any one time for documentary Letters of
Credit and (b) the sum of (i) the Maximum Drawing Amount on all Letters of
Credit, and (ii) the amount of all Revolving Credit Loans outstanding shall not
exceed the lesser of (A) the sum of the Banks' Commitments to make Revolving
Credit Loans and (B) the Borrowing Base. Notwithstanding the foregoing,
the Agent shall have no obligation to issue any Letter of Credit to support or
secure any Indebtedness of the Borrower to the extent that such Indebtedness
was incurred prior to the
proposed issuance date of such Letter of Credit, unless in any such case the
Borrower demonstrates to the satisfaction of the Agent that (x) such prior
incurred Indebtedness was
then fully secured by a prior perfected and unavoidable security interest in
collateral provided by the Borrower to the proposed beneficiary of such Letter
of Credit or (y) such prior incurred Indebtedness was then secured or supported
by a letter of credit issued for the account of the Borrower and the
reimbursement obligation with respect to such letter of credit was fully
secured by a prior perfected and unavoidable security interest in collateral
provided to the
issuer of such letter of credit by the Borrower.
5.1.2. Letter of Credit Applications.
Each Letter of Credit Application shall be completed to the
satisfaction of the Agent. In the event that any provision of any Letter of
Credit Application shall be inconsistent with any provision of this Credit
Agreement, then the provisions of this Credit Agreement shall, to the extent of
any such inconsistency, govern.
5.1.3. Terms of Letters of Credit.
Each Letter of Credit issued, extended or renewed hereunder shall,
among other things, (a) provide for the payment of sight drafts for honor
thereunder when presented in accordance
with the terms thereof and when accompanied by the documents described therein,
and (b) have
an expiry date no later than the date which is fourteen (14) days (or, if the
beneficiary is located outside of the United States of America, forty-five (45)
days) prior to the Revolving Credit Loan Maturity Date. Each Letter of Credit
so issued, extended or renewed shall be subject to the Uniform Customs.
5.1.4. Reimbursement Obligations of Banks.
Each Bank severally agrees that it shall be absolutely liable, without
regard to the occurrence of any Default or Event of Default or any other
condition precedent whatsoever, to the extent of
such Bank's Commitment Percentage, to reimburse the Agent on demand for the
amount of
each draft paid by the Agent under each Letter of Credit to the extent that
such amount is not reimbursed by the Borrower pursuant to 5.2 (such
agreement for a Bank being called herein the
"Letter of Credit Participation" of such Bank).
5.1.5. Participations of Banks.
Each such payment made by a Bank shall be treated as the purchase by
such Bank of a participating interest in the Borrower's Reimbursement
Obligation under 5.2 in an
amount equal to such payment. Each Bank shall share in accordance with its
participating
interest in any interest which accrues pursuant to 5.2.
5.2. Reimbursement Obligations of Borrower; Effects of Drawing.
(a) The amount of each drawing under any Letter of Credit issued by
the Agent pursuant to this Credit Agreement shall be a Revolving Credit Loan
made by the Banks to the Borrower on
the date of such drawing and shall be funded by the Banks in accordance with
2.8. The liability of the Borrower under this Credit Agreement to
repay the Banks any and all Revolving Credit Loans in respect of drawings under
Letters of Credit shall be Obligations secured by the Security Documents,
(b) Each request for the issuance, extension or renewal of a Letter
of Credit hereunder shall constitute a representation by the Borrower that the
applicable conditions set forth in 12 and 13 have been
satisfied on the date of such request and on the date of issuance of such
Letter of Credit,
(c) On each date that any draft presented under the Letter of
Credit is honored by the Agent, or the Agent otherwise makes a payment with
respect thereto, the Borrower agrees to reimburse or pay to the Agent for the
account of the Agent, or as the case may be, the Banks
the amount of any taxes, fees, charges or other costs and expenses whatsoever
incurred by the
Agent or any Bank in connection with any payment made by the Agent or any Bank
under, or
with respect to, the Letter of Credit;
(d) Upon the reduction (but not termination) of the aggregate
Commitments of the Banks to make Revolving Credit Loans to an amount less than
the Maximum Drawing Amount, or if the
Borrowing Base is less than the Maximum Drawing Amount, the Borrower agrees to
reimburse
or pay to the Agent for the account of the Banks an amount equal to such
difference, which amount shall be held by the Agent for the benefit of the
Banks and the Agent as cash collateral for all Reimbursement Obligations; and
(e) Upon the termination of the Letter of Credit commitment, or the
acceleration of the Reimbursement Obligations with respect to the Letters of
Credit in accordance with 14 the Borrower agrees to reimburse or pay
to the Agent for the account of the Banks an amount
equal to the Maximum Drawing Amount, which amount shall be held by the Agent
for the
benefit of the Agent and the Banks as cash collateral for all Reimbursement
Obligations.
Unless funded by a Revolving Credit Loan, each such payment shall be made to
the Agent at the Agent's Head Office in immediately available funds. Interest
on any and all amounts remaining unpaid by the Borrower under this 5.2
at any time from the date such amounts become due and payable (whether as
stated in this 5.2, by acceleration or otherwise) until payment in
full (whether before or after judgment) shall be payable to the Agent on demand
at the rate specified in 6.9 following an Event of Default.
5.3. Letter of Credit Payments.
If any draft shall be presented or other demand for payment shall be made under
the Letter of Credit, the Agent shall notify the Borrower of the date and
amount of the draft presented or demand for payment and of the date and time
when it expects to pay such draft or honor such demand for payment. If the
Borrower fails to reimburse the Agent as provided in 5.2 on or before
the date that such draft is paid or other payment is made by the Agent, the
Agent may at any time thereafter notify the Banks of the amount of any such
Unpaid Reimbursement Obligation. No later than 3:00 p.m. (Boston time) on the
Business Day next following the receipt of such notice, each Bank shall make
available to the Agent, at the Agent's Head Office, in immediately available
funds, such Bank's Commitment Percentage of such Unpaid Reimbursement
Obligation, together with an amount equal to the product of (a) the average,
computed for the period referred to in clause (c) below, of the weighted
average interest rate paid by the Agent for federal funds acquired by the Agent
during each day included in such period, times (b) the amount equal to such
Bank's Commitment Percentage of such Unpaid Reimbursement Obligation,
times (c) a fraction, the numerator of which is the number of days that elapse
from and including the date the Agent paid the draft presented for honor or
otherwise made payment to the date on which such Bank's Commitment Percentage
of such Unpaid Reimbursement obligation shall become immediately available to
the Agent, and the denominator of which is 360. The responsibility of the
Agent to the Borrower and the Banks, as the case may be, shall be only to
determine that the documents (including each draft) delivered under the Letter
of Credit in connection with such presentment shall be in conformity in all
material respects with the Letter of Credit.
5.4. Obligations Absolute.
The Borrower's obligations under this 5 to repay Revolving Credit
Loans in respect of drawings under the Letters of Credit as provided herein
shall rank pari passu with the obligations of the Borrower to repay all other
Revolving Credit Loans and shall be absolute and unconditional under any and
all circumstances and irrespective of the occurrence of any Default or Event of
Default or any
condition precedent whatsoever or any setoff, counterclaim or defense to
payment which the Borrower may have or have had against the Agent, any Bank or
any beneficiary of a Letter of Credit. The Borrower further agrees with the
Agent and the Banks that the Agent and the Banks shall not be responsible for,
among other things, the validity or genuineness of documents or of any
endorsements
thereon, even if such documents should in fact prove to be in any or all
respects invalid, fraudulent or forged (unless the Agent or any Bank's officers
active on the account of the Borrower have actual knowledge of such invalidity,
fraudulence or forgery prior to taking any action with respect to such
documents), or any dispute between or among the Borrower, the beneficiary of
any Letter of Credit or
any financing institution or other party to which any Letter of Credit may be
transferred or any claims or defenses whatsoever of the Borrower against the
beneficiary of any Letter of Credit or any such transferee. The Agent and the
Banks shall not be liable for any error, omission, interruption or
delay in transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit. The Borrower agrees that
any action taken or omitted by the Agent or any Bank under or in connection
with each Letter of Credit and the related drafts and documents, if done in
good faith, shall be binding upon the Borrower and shall not result in any
liability on the part of the Agent or any Bank to the Borrower.
5.5. Reliance by Issuer.
To the extent not inconsistent with 5.4, the Agent shall be entitled
to rely, and shall be fully protected in relying upon, any Letter of Credit,
draft, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document believed by
it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons and upon advice and statements of legal counsel,
independent accountants and other experts selected by the Agent. The Agent
shall be fully justified in failing or refusing to take any action under this
Agreement unless it shall first have received such advice or concurrence of the
Majority Banks as it reasonably deems appropriate or it shall first be
indemnified to its reasonable satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any
such action. The Agent shall in all case be fully protected in acting, or in
refraining from acting, under this Agreement in accordance with a request of
the Majority Banks, and such request and any action
taken or failure to act pursuant thereto shall be binding upon the Banks and
all future holders of a Letter of Credit Participation.
5.6. Letter of Credit Fee.
The Borrower shall, on the date of issuance or any extension or renewal of any
Letter of Credit and at such other time or times as such charges are
customarily made by the Agent, pay a fee (in each case, a "Letter of Credit
Fee") to the Agent (i) in respect of each standby Letter of Credit equal to one
and one-half percent (1 1/2%) per annum of the face amount of such standby
Letter of Credit plus the
Agent's customary issuance fee, and (ii) in respect of each documentary Letter
of Credit equal to (A) the Agent's customary issuance fee of $135 or amendment
fee of $65, as the case may be, plus (B) a negotiation fee of the higher of (1)
$120, or (2) one-half of one percent (1/2%) of the face amount
of such documentary Letter of Credit plus (C) a processing fee of $50, plus (D)
if applicable, a cancellation fee of $100 plus (E) all telex, Swift, courier
and other communication charges, such Letter of Credit Fee (but not such
issuance, amendment or administrative fee) to be for the accounts of the Banks
in accordance with their respective Commitment Percentages.
6. CERTAIN GENERAL PROVISIONS
6.1. Funds for Payments.
6.1.1. Payments to Agent.
All payments of principal, interest, commitment fees, Letter of Credit Fees and
any other
amounts due hereunder or under any of the other Loan Documents shall be made to
the
Agent, for the respective accounts of the Banks and the Agent, at the Agent's
Head Office or
at such other location in the Boston, Massachusetts, area that the Agent may
from time to time designate, in each case in immediately available funds.
6.1.2. No Offset, etc.
All payments by the Borrower hereunder and under any of the other Loan
Documents shall be made without setoff or counterclaim and free and clear of
and without deduction for any taxes, levies, imposts, duties, charges, fees,
deductions, withholdings, compulsory loans, restrictions or conditions of any
nature now or hereafter imposed or levied by any jurisdiction or any political
subdivision thereof or taxing or other authority therein unless the Borrower is
compelled by law to make such deduction or withholding. If any such obligation
is imposed
upon the Borrower with respect to any amount payable by it hereunder or under
any of the other Loan Documents, the Borrower will pay to the Agent, for the
respective accounts of the Banks and the Agent, on the date on which such
amount is due and payable hereunder or under such other Loan Document, such
additional amount in Dollars as shall be necessary to enable the Banks or the
Agent to receive the same net amount which the Banks or the Agent would have
received on such due date had no such obligation been imposed upon the
Borrower, and
the Borrower will deliver promptly to the Agent certificates or other valid
vouchers for all
taxes or other charges deducted from or paid with respect to payments made by
the
Borrower hereunder or under such other Loan Document.
6.2. Computations.
All computations of interest on the Loans, of commitment fees, and Letter of
Credit Fees shall be based on a 360-day year and paid for the actual number of
days elapsed. Except as otherwise provided in the definition of the term
"Interest Period" with respect to Eurodollar Rate Loans, whenever a payment
hereunder or under any of the other Loan Documents becomes due on a day that is
not a Business
Day, the due date for such payment shall be extended to the next succeeding
Business Day, and interest shall accrue during such extension. The outstanding
amount of the Loans as reflected on the Revolving Credit Note Record and the
Term Note Record from time to time shall be considered correct and binding on
the Borrower unless within five (5) Business Days after receipt of any notice
by the Agent or any of the Banks of such outstanding amount, the Agent or any
Bank shall notify the Borrower to the contrary.
6.3. Inability to Determine Eurodollar Rate.
In the event, prior to the commencement of any Interest Period relating to any
Eurodollar Rate Loan, the Agent shall determine or be notified by the Majority
Banks that adequate and reasonable methods do not exist for ascertaining the
Eurodollar Rate that would otherwise determine the rate of interest to be
applicable to any Eurodollar Rate Loan during any Interest Period, the Agent
shall forthwith give notice of such determination (which shall be conclusive
and binding on the Borrower and the Banks) to the Borrower and the Banks. In
such event (a) any Loan Request or Conversion Request with respect to
Eurodollar Rate Loans shall be automatically withdrawn and shall be deemed a
request for Base Rate Loans, (b) each Eurodollar Rate Loan will automatically,
on the last day of the then current Interest Period relating thereto, become a
Base Rate Loan, and (c) the obligations of the Banks to make Eurodollar Rate
Loans shall be suspended until the Agent or the Majority Banks determines that
the circumstances giving rise to such suspension no longer exist, whereupon the
Agent or, as the case may be, the Agent upon instruction of the Majority Banks
shall so notify the Borrower.
6.4. Illegality.
Notwithstanding any other provisions herein, if any present or future law,
regulation, treaty or directive or in the interpretation or application thereof
shall make it unlawful for any Bank to make or maintain Eurodollar Rate Loans,
such Bank shall forthwith give notice of such circumstances to the Borrower and
the other Banks and thereupon (a) the commitment of such Bank to make
Eurodollar Rate Loans or
convert Base Rate Loans to Eurodollar Rate Loans shall forthwith be suspended
and (b) such Bank's then outstanding Eurodollar Rate Loans, if any, shall be
converted automatically to Base Rate Loans on
the last day of each Interest Period applicable to such Eurodollar Rate Loans
or within such earlier period as may be required by law. The Borrower hereby
agrees promptly to pay the Agent for the account of
such Bank, upon demand by such Bank, any additional amounts necessary to
compensate such Bank for
any costs incurred by such Bank in making any conversion in accordance with
this 6.4 including any interest or fees payable by such Bank to
lenders of funds obtained by it in order to make or maintain its Eurodollar
Loans hereunder.
6.5. Additional Costs, Etc.
If any present or future applicable law, which expression, as used herein,
includes statutes, rules and regulations thereunder and interpretations thereof
by any competent court or by any governmental or other regulatory body or
official charged with the administration or the interpretation thereof and
requests, directives, instructions and notices at any time or from time to time
hereafter made upon or otherwise issued to any Bank or the Agent by any central
bank or other fiscal, monetary or other authority (whether or not having the
force of law), shall:
(a) subject any Bank or the Agent to any tax, levy, impost, duty,
charge, fee, deduction or
withholding of any nature with respect to this Credit Agreement, the other Loan
Documents, any Letters of Credit, the Commitment or the Loans (other than taxes
based upon or measured by the
income or profits of such Bank or the Agent), or
(b) materially change the basis of taxation (except for changes in
taxes on income or
profits) of payments to any Bank of the principal of or the interest on any
Loans or any
other amounts payable to any Bank or the Agent under this Credit Agreement or
any of the
other Loan Documents, or
(c) impose or increase or render applicable (other than to the
extent specifically provided
for elsewhere in this Credit Agreement) any special deposit, reserve,
assessment, liquidity,
capital adequacy or other similar requirements (whether or not having the force
of law)
against assets held by, or deposits in or for the account of, or loans by, or
letters of credit issued by, or commitments of an office of any Bank, or
(d) impose on any Bank or the Agent any other conditions or
requirements with respect to
this Credit Agreement, the other Loan Documents, any Letters of Credit, the
Loans, such
Bank's Commitment, or any class of loans, letters of credit or commitments of
which any of the Loans or such Bank's Commitment forms a part, and the result
of any of the foregoing is
(i) to increase the cost to any Bank of making, funding, issuing,
renewing,
extending or maintaining any of the Loans or such Bank's Commitment or any
Letter of Credit, or
(ii) to reduce the amount of principal, interest, or other amount
payable to such
Bank or the Agent hereunder on account of such Bank's Commitment, any Letter of
Credit or any of the Loans, or
(iii) to require such Bank or the Agent to make any payment or to
forego any
interest or other sum payable hereunder, the amount of which payment or
foregone
interest or other sum is calculated by reference to the gross amount of any sum
receivable or deemed received by such Bank for the Agent from the Borrower
hereunder,
then, and in each such case, the Borrower will, upon demand made by such Bank
or, as the case may be, the Agent at any time and from time to time and as
often as the occasion therefor may arise, pay to such Bank or the Agent such
additional amounts as will be sufficient to compensate such Bank or the Agent
for such additional cost, reduction, payment or foregone interest or other sum.
Each Bank shall apply the provisions of this 6.5 consistently among
its customers similarly situated in good faith and on an equitable basis.
6.6. Capital Adequacy.
If after the date hereof any Bank or the Agent determines that (a) the adoption
of or change in any law, governmental rule, regulation, policy, guideline or
directive (whether or not having the force of law) regarding capital
requirements for banks or bank holding companies or any change in the
interpretation or application thereof by a court or governmental authority with
appropriate jurisdiction, or (b) compliance by such Bank or the Agent or any
corporation controlling such Bank or the Agent with
any law, governmental rule, regulation, policy, guideline or directive (whether
or not having the force of law) of any such entity regarding capital adequacy,
has the effect of reducing the return on such Bank's or the Agent's commitment
with respect to any Revolving Credit Loans or on the Term Loan to a level below
that which such Bank or the Agent could have achieved but for such adoption,
change or
compliance (taking into consideration such Bank's or the Agent's then existing
policies with respect to capital adequacy and assuming full utilization of such
entity's capital) by any amount deemed by such Bank or the Agent to be
material, then such Bank or the Agent may notify the Borrower of such fact. To
the extent that the amount of such reduction in the return on capital is not
reflected in the Base Rate such Bank shall thereafter attempt to negotiate in
good faith an adjustment to the reduction in the return on capital hereunder
which will adequately compensate such Bank for such reduction. If the Borrower
and
the Bank are unable to agree to such an adjustment within thirty (30) days of
which the Borrower receives such notice, then commencing on the day of such
notice (but not earlier than the effective day of such change), the Borrower
agrees to pay such Bank or the Agent for the amount of such reduction in the
return on capital as and when such reduction is determined upon presentation by
such Bank or the Agent of a certificate in accordance with 6.7 hereof.
6.7. Certificate.
A certificate setting forth any additional amounts payable pursuant to
6.5 or 6.6 and a brief explanation of such amounts which are
due, submitted by any Bank or the Agent to the Borrower, shall be
conclusive, absent manifest error, that such amounts are due and owing.
6.8. Indemnity.
The Borrower agrees to indemnify such Bank and to hold such Bank harmless from
and against any loss,
cost or expense (including loss of anticipated profits) that such Bank may
sustain or incur as a consequence of (a) default by the Borrower in payment of
the principal amount of or any interest
on any Eurodollar Rate Loans as and when due and payable, including any such
loss or expense arising from interest or fees payable by such Bank to lenders
of funds obtained by it in order to maintain its Eurodollar Rate Loans, (b)
default by the Borrower in making a borrowing or conversion after the Borrower
has given (or is deemed to have given) a Loan Request, notice (in the case of
all or any portion of the Term Loans pursuant to 4.5.2) or a
Conversion Request relating thereto in accordance
with 2.6 or 2.7 or 4.5.2 or (c) the making of any
payment of a Eurodollar Rate Loan or the making of any conversion of any such
Loan to a Base Rate Loan on a day that is not the last day of the applicable
Interest Period with respect thereto, including interest or fees payable by
such Bank to lenders of
funds obtained by it in order to maintain any such Loans.
6.9. Interest After Default.
Overdue principal and (to the extent permitted by applicable law) interest on
the Loans and all other overdue amounts payable hereunder or under any of the
other Loan Documents shall bear interest compounded monthly and payable on
demand at a rate per annum equal to two percent (2%) above the
rate of interest otherwise applicable to such Revolving Credit Loans pursuant
to 2.5 and the Term Loan pursuant to 4.5 until such amount
shall be paid in full (after as well as before judgment).
7. COLLATERAL SECURITY
The Obligations shall be secured by a perfected first priority security
interest (subject only to Permitted Liens entitled to priority under applicable
law) in all of the assets of the Borrower other than the Delco Inventory and
the Autos, whether now owned or hereafter acquired, pursuant to the terms of
the
Security Documents to which the Borrower is a party.
8. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Agent and the Banks as
follows:
8.1. Corporate Authority.
8.1.1. Incorporation; Good Standing.
The Borrower (a) is a corporation duly organized, validly existing and
in good standing under the laws of its state of incorporation, (b) has all
requisite corporate power to own its property and
conduct its business as now conducted and as presently contemplated, and (c) is
in good
standing as a foreign corporation and is duly authorized to do business in each
jurisdiction where such qualification is necessary except where a failure to be
so qualified would not have a materially adverse effect on the business, assets
or financial condition of the Borrower.
8.1.1. Authorization.
The execution, delivery and performance of this Credit Agreement and the other
Loan
Documents by the Borrower and the transactions contemplated hereby and thereby
(a) are
within the corporate authority of the Borrower, (b) have been duly authorized
by all necessary corporate proceedings, (c) do not conflict with or result in
any breach or contravention of any provision of law, statute, rule or
regulation to which the Borrower is subject or any judgment, order, writ,
injunction, license or permit applicable to the Borrower and (d) do not
conflict with any provision of the corporate charter or bylaws of, or any
agreement or other
instrument binding upon, the Borrower.
8.1.2. Enforceability.
The execution and delivery of this Credit Agreement and the other
Loan Documents by the Borrower will result in valid and legally binding
obligations of the Borrower enforceable against it in accordance with the
respective terms and provisions hereof and thereof, except
as enforceability is limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting generally the enforcement of
creditors' rights and except to the extent that availability of the remedy of
specific performance or injunctive relief is subject to the discretion of the
court before which any proceeding therefor may be brought.
8.2. Governmental Approvals.
The execution, delivery and performance by the Borrower of this Credit
Agreement and the other Loan
Documents by the Borrower and the transactions contemplated hereby and thereby
do not require the approval or consent of, or filing with, any governmental
agency or authority other than those already obtained.
8.3. Title to Properties; Leases.
Except as indicated on Schedule 8.3 hereto, the Borrower owns all of the assets
reflected in the balance sheet of the Borrower as at the Balance Sheet Date or
acquired since that date (except property and assets sold or otherwise disposed
of in the ordinary course of business since that date), subject to no rights of
others, including any mortgages, leases, conditional sales agreements, title
retention agreements, liens or other encumbrances except Permitted Liens.
8.4. Financial Statements and Projections.
8.4.1. Financial Statements.
There has been furnished to the Agent a balance sheet of the Borrower
as at the Balance Sheet Date, and a statement of income of the Borrower for the
fiscal year then ended, certified by the Borrower's independent certified
public accountants. Such balance sheet and statement of
income have been prepared in accordance with generally accepted accounting
principles and fairly present the financial condition of the Borrower as at the
close of business on the date thereof and the results of operations for the
fiscal year then ended. There are no contingent liabilities of the Borrower as
of such date involving material amounts, known to the officers of the Borrower,
which were required under generally accepted accounting principles to be
disclosed and were not disclosed in such balance sheet and the notes related
thereto.
8.4.2. Projections.
The projections of the annual operating budgets of the Borrower,
balance sheets and cash flow statements for the 1994 fiscal year, copies of
which have been delivered to the Agent and any updated or later projections
delivered to each Bank pursuant to 9.4(i), have been prepared based on
the assumptions accompanying them and reflect the good faith estimate of the
Borrower of
the performance and the financial condition of the Borrower for the applicable
periods based on
such assumptions. To the knowledge of the Borrower, no facts exist that
(individually or in the aggregate) would result in any material change in any
of such projections.
8.5. Franchises, Patents, Copyrights, Etc.
The Borrower possesses all franchises, patents, copyrights, trademarks, trade
names, licenses and permits, and rights in respect of the foregoing, adequate
for the conduct of its business substantially as now conducted without known
conflict with any rights of others.
8.6. Litigation.
Except as set forth in Schedule 8.6 hereto, there are no actions, suits,
proceedings or investigations of any kind pending or threatened against the
Borrower before any court, tribunal or administrative agency or board that, if
adversely determined, might, either in any case or in the aggregate, materially
adversely affect the properties, assets, financial condition or business of the
Borrower or materially impair the right of the Borrower to carry on business
substantially as now conducted by it, or result in any substantial liability
not adequately covered by insurance, or for which adequate reserves are not
maintained on the balance sheet of the Borrower, or which question the validity
of this Credit Agreement or any of the other Loan Documents, or any action
taken or to be taken pursuant hereto or thereto.
8.7. No Materially Adverse Contracts, Etc.
The Borrower is not subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation that has or is
expected in the future to have a materially adverse effect on the business,
assets or financial condition of the Borrower. The Borrower is not a party to
any contract or agreement that has or is expected, in the judgment of the
Borrower's officers, to have any materially adverse effect on the business of
the Borrower.
8.8. Compliance with Other Instruments, Laws, Etc.
The Borrower is not in violation of any provision of its charter documents,
bylaws, or any agreement or
instrument to which it may be subject or by which it or any of its properties
may be bound or any decree, order, judgment, statute, license, rule or
regulation, in any of the foregoing cases in a manner
that could result in the imposition of substantial penalties or materially and
adversely affect the financial condition, properties or business of the
Borrower.
8.9. Tax Status.
The Borrower (a) has made or filed all federal and state income and all other
tax returns, reports and declarations required by any jurisdiction to which any
of them is subject, (b) has paid all taxes and
other governmental assessments and charges shown or determined to be due on
such returns, reports
and declarations, except those being contested in good faith and by appropriate
proceedings and (c) has set aside on its books provisions reasonably adequate
for the payment of all taxes for periods subsequent to the periods to which
such returns, reports or declarations apply. There are no unpaid taxes in any
material amount claimed to be due by the taxing authority of any jurisdiction,
and the officers of the Borrower know of no basis for any such claim.
8.10. No Event of Default.
No Default or Event of Default has occurred and is continuing.
8.11. Holding Company and Investment Company Acts.
The Borrower is not a "holding company", or a "subsidiary company" of a
"holding company", or an affiliate" of a "holding company", as such terms are
defined in the Public Utility Holding Company
Act of 1935; nor is it an "investment company", or an "affiliated company" or a
"principal underwriter"
of an "investment company", as such terms are defined in the Investment Company
Act of 1940.
8.12. Absence of Financing Statements, Etc.
Except with respect to Permitted Liens and liens for which appropriate releases
have been delivered to the Agent or the Title Company, as the case may be, as
of the Closing Date, there is no financing statement, security agreement,
chattel mortgage, real estate mortgage or other document filed or recorded with
any filing records, registry or other public office, that purports to cover,
affect or give notice of any present or possible future lien on, or security
interest in, any assets or property of the Borrower or any rights relating
thereto.
8.13. Perfection of Security Interest.
To the best of the Borrower's knowledge, all filings, assignments, pledges and
deposits of documents or instruments have been made and all other actions have
been taken that are necessary, under applicable
law, to establish and perfect the Agent's security interest in the Collateral.
The Collateral and the Agent's and the Banks' rights with respect to the
Collateral are not subject to any setoff, claims, withholdings or other
defenses except in respect of Accounts Receivable credits and claims in the
ordinary course of business consistent with past practices. The Borrower is
the owner of the Collateral free from any lien, security interest, encumbrance
and any other claim or demand,
except for Permitted Liens.
8.14. Certain Transactions.
Except as set forth on Schedule 8.14 and for arm's length transactions
pursuant to which the Borrower makes payments in the ordinary course of
business upon terms no less favorable than the Borrower could obtain from third
parties, none of the officers, directors, or employees of the Borrower is
presently a party to any transaction with the Borrower (other than for services
as employees, officers and directors), including any contract, agreement or
other arrangement providing for the furnishing of services to or by, providing
for rental of real or personal property to or from, or otherwise requiring
payments to or from any officer, director or such employee or, to the knowledge
of the Borrower, any
corporation, partnership, trust or other entity in which any officer, director,
or any such employee has a
substantial interest or is an officer, director, trustee or partner.
8.15. Employee Benefit Plans.
8.15.1. In General.
Each Employee Benefit Plan has been maintained and operated in
compliance in all material respects with the provisions of ERISA and, to the
extent applicable, the Code, including but not limited to the provisions
thereunder respecting prohibited transactions. The Borrower has heretofore
delivered to the Agent the most recently completed annual report, Form 5500,
with all required attachments, and actuarial statement required to be submitted
under 103(d) of ERISA, with respect to each Guaranteed Pension Plan.
8.15.2. Terminability of Welfare Plans.
Under each Employee Benefit Plan which is an employee welfare benefit
plan within the meaning of 3(1) or 3(2)(B) of ERISA, no
benefits are due unless the event giving rise to the benefit entitlement occurs
prior to plan termination (except as required by Title I, Part 6 of
ERISA) . The Borrower or an ERISA Affiliate, as appropriate, may terminate each
such Plan
at any time (or at any time subsequent to the expiration of any applicable
bargaining agreement) in the discretion of the Borrower or such ERISA Affiliate
without liability to any Person.
8.15.3. Guaranteed Pension Plans.
Each contribution required to be made to a Guaranteed Pension Plan,
whether required to be made to avoid the incurrence of an accumulated funding
deficiency, the notice or lien
provisions of 302(f) of ERISA, or otherwise, has been timely made. No
waiver of an accumulated funding deficiency or extension of amortization
periods has been received with respect to any Guaranteed Pension Plan. No
liability to the PBGC (other than required insurance premiums, all of which
have been paid) has been incurred by the Borrower or any ERISA Affiliate with
respect to any Guaranteed Pension Plan and there has not been any ERISA
Reportable Event, or any other event or condition which presents a material
risk of termination of any Guaranteed Pension Plan by the PBGC.
8.15.4. Multiemployer Plans.
Neither the Borrower nor any ERISA Affiliate has incurred any material
liability (including secondary liability) to any Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan under
4201 of ERISA or as a result of a sale of assets described
in 4204 of ERISA. Neither the Borrower nor any ERISA Affiliate has
been notified that any Multiemployer Plan is in reorganization or insolvent
under and within the meaning of 4241 or 4245 of ERISA or that
any Multiemployer Plan intends to terminate or has been terminated under
4041A of ERISA.
8.16. Regulations U and X.
The proceeds of the Loans shall be used, and Letters of Credit will be
obtained, for the purposes provided in 9.12. No portion of any Loan is
to be used, and no portion of any Letter of Credit is to be obtained, for the
purpose of purchasing or carrying any "margin security" or "margin stock" as
such terms are
used in Regulations U and X of the Board of Governors of the Federal Reserve
System, 12 C.F.R. Parts 221 and 224.
8.17. Environmental Compliance.
The Borrower has conducted an environmental assessment of the Real Estate
through its environmental consultant, ATEC Associates, Inc. ATEC has issued a
site assessment report dated December 22, 1993, and an addendum thereto dated
December 28, 1993 (the "ATEC Report"), a copy of which has
been provided to the Agent. Other than as indicated in the ATEC Report, to the
best of the Borrower's knowledge:
(a) Neither the Borrower, nor any operator of such Real Estate or
any operations thereon is in violation, or alleged violation, of any judgment,
decree, order, law, license, rule or regulation pertaining to environmental
matters, including without limitation, those arising under the
Resource Conservation and Recovery Act ("RCRA"), the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 as amended
("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986 ("XXXX"),
the Federal Clean Water Act, the Federal Clean Air Act, the Toxic Substances
Control Act, or any state or local statute, regulation, ordinance, order or
decree relating to health, safety or the environment (hereinafter
"Environmental Laws"), which violation would have a material adverse effect on
the environment or the business, assets or financial condition of the Borrower;
(b) Except as set forth on Schedule 8.17, the Borrower has not
received notice from any third party including, without limitation: any
federal, state or local governmental authority, (i) that it has been identified
by the United States Environmental Protection Agency ("EPA") as a potentially
responsible party under CERCLA with respect to a site listed on the National
Priorities List, 40 C.F.R. Part 000 Xxxxxxxx X (1986); (ii) that any hazardous
waste, as
defined by 42 U.S.C. 9601(5), any hazardous substances as defined by
42 U.S.C. 9601(14), any pollutant or contaminant as defined by 42
U.S.C. 9601(33) and any toxic substances, oil or hazardous materials
or other chemicals or substances regulated by any Environmental Laws
("Hazardous Substances") which it has generated, transported or disposed of has
been found at any site at which a federal, state or local agency or other third
party has conducted or has ordered that the Borrower conduct a remedial
investigation, removal or other response action pursuant to any Environmental
Law; or (iii) that it is or shall be a named party to any claim, action, cause
of action, complaint, or legal or administrative proceeding (in each case,
contingent or otherwise) arising out of any third party's incurrence of costs,
expenses, losses or damages of any kind whatsoever in connection with the
release of Hazardous Substances;
(c) Except as set forth on Schedule 8.17 attached hereto: (i) no
portion of such Real Estate has been used for the handling, processing, storage
or disposal of Hazardous Substances except
in accordance with applicable Environmental Laws; and no underground tank or
other
underground storage receptacle for Hazardous Substances is located on any
portion of such Real Estate; (ii) in the course of any activities conducted by
the Borrower or its operators of its properties, no Hazardous Substances have
been generated or are being
used on such Real Estate except in accordance with applicable Environmental
Laws; (iii) there have been no releases (i.e. any past or present releasing,
spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, disposing or dumping) or threatened releases of Hazardous
Substances on, upon, into or from the properties of the Borrower,
which releases would have a material adverse effect on the value of any of such
Real Estate or adjacent properties or the environment; (iv) there have been no
releases on, upon, from or into any real property in the vicinity of any of
such Real Estate which, through soil or groundwater contamination, may have
come to be located on, and which would have a material adverse effect
on the value of, such Real Estate; and (v) in addition, the Borrower has not
received any notice of any failure of the Borrower to comply with any
Environmental Laws relating to the transportation, treatment and disposal of
Hazardous Substances that have been generated
on any such Real Estate, and any Hazardous Substances that have, on or after
the Closing Date, been generated on any of such Real Estate has been
transported offsite only by carriers having an identification number issued by
the EPA; and
(d) Other than with respect to any Hazardous Substances release
described in the ATEC Report or on Schedule 8.17, neither the Borrower nor any
Mortgaged Property nor any of the other Real Estate is subject to any
applicable environmental law requiring the performance of Hazardous Substances
site assessments, or the removal or remediation of Hazardous
Substances, or the giving of notice to any governmental agency or the recording
or delivery to other Persons of an environmental disclosure document or
statement by virtue
of the transactions set forth herein and contemplated hereby, or as a condition
to the recording
of any Mortgage or to the effectiveness of any other transactions contemplated
hereby.
8.18. Subsidiaries, Etc.
The Borrower has no Subsidiaries. The Borrower is not engaged in any joint
venture or partnership with any other Person.
8.19. Bank Accounts.
Schedule 8.19 sets forth the account numbers and location of all bank accounts
of the Borrower.
8.20. Review of Credit Agreement.
The Borrower's Chief Financial Officer has, and, on or before January 10, 1994,
the Corporate Controller will have, read this Credit Agreement and, upon
execution thereof, each amendment hereto and understands what constitutes a
Default and an Event of Default hereunder. Either the Chief
Financial Officer or Corporate Controller shall at all times be fully apprised,
either directly or indirectly, of all of the Borrower's obligations under this
Credit Agreement, and whether or not such obligations have been fulfilled in
accordance with the applicable terms and provisions hereof.
9. AFFIRMATIVE COVENANTS OF THE BORROWER
The Borrower covenants and agrees that, so long as any Loan, Letter of Credit
or Note is outstanding or any Bank has any obligation to make any Loans or the
Agent has any obligation to issue, extend or renew any Letters of Credit:
9.1. Punctual Payment.
The Borrower will duly and punctually pay or cause to be paid the principal and
interest on the Loans, the Letter of Credit Fees, the commitment fees, and all
other amounts provided for in this Credit Agreement and the other Loan
Documents to which the Borrower is a party, all in accordance with the terms of
this Credit Agreement and such other Loan Documents.
9.2. Maintenance of Office.
The Borrower will maintain its chief executive office in Framingham,
Massachusetts, or at such other place in the United States of America as the
Borrower shall designate upon written notice to the Bank, where notices,
presentations and demands to or upon the Borrower in respect of the Loan
Documents to which the Borrower is a party may be given or made.
9.3. Records and Accounts.
The Borrower will (a) keep true and accurate records and books of account in
which full, true and correct entries in all material respects will be made in
accordance with generally accepted accounting principles and (b) maintain
adequate accounts and reserves for all taxes (including income taxes),
depreciation, depletion, obsolescence and amortization of its properties,
contingencies, and other reserves.
9.4. Financial Statements, Certificates and Information.
The Borrower will deliver to each of the Banks:
(a) as soon as practicable, but in any event not later than
ninety (90) days after the end of each fiscal year of the Borrower, the balance
sheet of the Borrower as at the end of such year,
and the related statement of income and statement of cash flow for such year,
setting forth in comparative form the figures for the previous fiscal year and
all such statements to be in
reasonable detail, prepared in accordance with generally accepted accounting
principles, and
certified without qualification by, Ernst & Young, the Borrower's accountants
or by other
independent certified public accountants reasonably satisfactory to the Agent,
together with
a written statement from such accountants to the effect that they have read a
copy of this Credit Agreement, and that, in making the examination necessary to
said certification, they have obtained no knowledge of any Default or Event of
Default, or, if such accountants shall
have obtained knowledge of any then existing Default or Event of Default they
shall disclose in such statement any such Default or Event of Default; provided
that such accountants shall not be liable to the Banks for failure to obtain
knowledge of any Default or Event of Default;
(b) as soon as practicable, but in any event not later than forty-
five (45) days after the end
of each of the first three (3) fiscal quarters of the Borrower, copies of the
unaudited balance
sheet of the Borrower as at the end of such quarter, and the related statement
of income and
statement of cash flow and statement of income and statement of cash flow for
the portion of the Borrower's fiscal year then elapsed, all in reasonable
detail and prepared in accordance with generally accepted accounting principles
applicable to interim financial information (which do not require the inclusion
of footnotes and certain other information required under generally accepted
accounting principles for complete financial statements), together with a
certification
by the principal financial or accounting officer of the Borrower that the
information contained in such financial statements fairly presents the
financial position of the Borrower on the date thereof (subject to year-end
audit and adjustments);
(c) as soon as practicable, but in any event within thirty (30)
days after the end of each of
the first two months in each fiscal quarter of the Borrower, unaudited monthly
financial
statements of the Borrower for such month, prepared in accordance with the
Borrower's
customary format;
(d) simultaneously with the delivery of the financial statements
referred to in subsections
(a) and (b) above, a statement certified by the principal financial or
accounting officer of the Borrower in substantially the form of Exhibit E
hereto and setting forth in reasonable detail computations evidencing
compliance with the covenants contained in 11 and (if applicable)
reconciliations to reflect changes in generally accepted accounting principles
since the
Balance Sheet Date;
(e) contemporaneously with the filing or mailing thereof, copies of
all material of a
financial nature filed with the Securities and Exchange Commission or sent to
the
stockholders of the Borrower;
(f) annually, promptly after receipt of the necessary information
from the trustee and from
the actuaries, a certificate setting forth the valuation of each Guaranteed
Pension Plan (which in each case occurred within twelve months of the date of
such quarter), and of the actuarial
methods and assumptions employed for that valuation, which certifies the
aggregate benefit liabilities of all such Guaranteed Pension Plans within the
meaning of 4001 of ERISA and the aggregate value of the assets of all
such Guaranteed Pension Plans;
(g) on Tuesday of each calendar week with respect to the
immediately preceding calendar week (except for inventory which shall be
updated at the end of each two (2) week period (the
first such period commencing on December 2, 1996)) or at such earlier time as
the Banks may reasonably request, a Borrowing Base Report setting forth the
Borrowing Base as at the end of such calendar week or other date so requested
by the Banks;
(h) within fifteen (15) days after the end of each calendar month,
an Accounts Receivable
aging report;
(i) from time to time, but so long as no Default or Event of
Default has occurred and is
continuing, not more frequently than once per calendar year, upon request of
the Agent,
projections of the Borrower updating those projections delivered to the Agent
and referred
to in 8.4.2 or, if applicable, updating any later such projections
delivered in response to a request pursuant to this 9.4(i);
(j) from time to time such other financial data and information
(including management
letters) as the Banks may reasonably request.
(k) promptly upon receipt thereof copies of all final management
letters of substance or other material reports of substance which are submitted
to the Borrower by its independent accountants in connection with any annual or
interim audit of the books of the Borrower made
by such accountants.
9.5. Notices.
9.5.1. Defaults.
The Borrower will notify the Agent and each of the Banks in writing of
the occurrence of any Default or Event of Default of which the chief financial
officer or corporate controller of the Borrower has knowledge and know to be a
Default or Event of Default, such notice to be given promptly (but in no event
later than five (5) days after obtaining such knowledge). If any
Person shall give any notice or take any other action in respect of a claimed
default (whether or not constituting an Event of Default) under this Credit
Agreement or any other note, evidence of indebtedness, indenture or other
obligation to which or with respect to which the Borrower is a party or
obligor, whether as principal, guarantor, surety or otherwise, the Borrower
shall forthwith give written notice thereof to each of the Banks, describing
the notice or action and the nature of the claimed default.
9.5.2. Environmental Events.
The Borrower will promptly give notice to the Agent (a) of any
violation of any Environmental Law that the Borrower reports in writing or is
reportable by the Borrower in writing (or for
which any written report supplemental to any oral report is made) to any
federal, state or local environmental agency and (b) upon becoming aware
thereof, of any inquiry, proceeding, investigation, or other action, including
a notice from any agency of potential
environmental liability, or any federal, state or local environmental agency or
board, that
has the potential to materially affect the assets, liabilities, financial
conditions or operations of the Borrower, or the Agent's mortgages, deeds of
trust or security interests pursuant to the
Security Documents.
9.5.3. Notification of Claim against Collateral.
The Borrower will, immediately upon becoming aware thereof, notify the
Agent in writing of any setoff, claims (including, with respect to the Real
Estate, environmental claims), withholdings or other defenses to which any of
the Collateral, or the Agent's rights with respect to the
Collateral, are subject, other than claims relating to Accounts Receivable.
9.5.4. Notice of Litigation and Judgments.
The Borrower will give notice to the Agent in writing within fifteen
(15) days of becoming aware of any litigation or proceedings threatened in
writing or any pending litigation and proceedings affecting the Borrower or to
which the Borrower is or becomes a party involving an uninsured
claim against the Borrower that could reasonably be expected to have a
materially adverse effect on the Borrower and stating the nature and status of
such litigation or proceedings. The Borrower will give notice to the Agent in
writing, in form and detail satisfactory to the Agent, within ten (10) days of
any judgment not covered by insurance, final or otherwise, against the Borrower
in an amount in excess of $250,000.
9.6. Corporate Existence; Maintenance of Properties.
The Borrower will do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence, rights and franchises.
It (a) will cause all of its properties used or necessary in the conduct of its
business to be, in all material respects, maintained and kept in good
condition, repair and working order and supplied with all necessary equipment,
provided, however, in the event of a casualty affecting any property of the
Borrower, the Borrower shall use due diligence in
repairing or replacing such property, and, so long as the Borrower is using due
diligence in repairing or replacing such property and to the extent insurance
proceeds are held by the Agent, the Agent has made such proceeds available to
the Borrower in the manner and to the extent provided on the Security
Documents, no Default or Event of Default shall occur as a result of such
casualty unless the passage of time for such repair or replacement would have a
materially adverse effect on the Borrower, (b) will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Borrower may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times, and (c) will continue to engage primarily in the
business now conducted by it and in related businesses; provided that nothing
in this 9.6 shall prevent the Borrower from discontinuing the
operation and maintenance of any of its properties if such discontinuance is,
in the judgment of the Borrower, desirable in the conduct of its business and
does not materially adversely affect the business of the Borrower.
9.7. Insurance.
The Borrower will maintain with financially sound and reputable insurers
insurance with respect to its properties and business against such casualties
and contingencies as shall be in accordance with the general practices of
businesses engaged in similar activities in similar geographic areas and in
amounts, containing such terms, in such forms and for such periods as may be
reasonable and prudent and in accordance with the terms of the Security
Agreements. The Borrower will maintain insurance on the Mortgaged Properties
in accordance with the terms of the Mortgages.
9.8. Taxes.
The Borrower will duly pay and discharge, or cause to be paid and discharged,
before the same shall become overdue, all taxes, assessments and other
governmental charges imposed upon it and its real
properties, sales and activities, or any part thereof, or upon the income or
profits therefrom, as well as all claims for labor, materials, or supplies that
if unpaid might by law become a lien or charge upon any of its property;
provided that it shall not be a Default hereunder if (a) any such tax,
assessment, charge, levy or claim is not paid because the validity or amount
thereof shall then currently be contested in good faith by appropriate
proceedings and the Borrower shall have set aside on its books adequate
reserves with respect thereto or (b) the Borrower shall, upon learning of any
amounts overdue hereunder shall immediately pay such amounts and the effect of
such payments being overdue does not have a materially adverse effect on the
business, assets or financial condition of the Borrower; and provided further
that the Borrower will pay all such taxes, assessments, charges, levies or
claims forthwith upon the commencement of proceedings to foreclose any lien
that may have attached as security therefor.
9.9. Inspection of Properties and Books, Etc.
9.9.1. General.
The Borrower shall permit the Banks through the Agent or any of the Banks'
other designated
representatives, to visit and inspect any of the properties of the Borrower, to
examine the
books of account of the Borrower (and to make copies thereof and extracts
therefrom), and to discuss the affairs, finances and accounts of the Borrower
with, and to be advised as to the same by, its and their officers, all at such
reasonable times and intervals as the Agent or any Bank may reasonably request.
The Borrower shall permit the Agent or any of its other designated
representatives to conduct commercial finance examinations, such
examinations to be at the Borrower's expense.
9.9.2. Collateral Reports and Appraisals.
Upon the occurrence of an Event of Default, upon the reasonable request
of the Agent, the Borrower will (a) obtain and deliver to the Banks a report of
an independent collateral auditor satisfactory to the Agent (which may be
affiliated with a Bank) with respect to the Accounts Receivable and inventory
components included in the Borrowing Base, which report shall
indicate whether or not the information set forth in the Borrowing Base Report
most recently delivered is accurate and complete in all material respects and
(b) appraisal reports in form and substance and from appraisers satisfactory to
the Agent, stating the
then current fair market, orderly liquidation and forced liquidation values of
all or any portion of the equipment or real estate owned by the Borrower and
the then current business value of the Borrower. All such collateral value
reports and appraisals shall be conducted and made at the expense of the
Borrower.
9.9.3. Environmental Assessments.
Whether or not an Event of Default shall have occurred, but subject to
the next succeeding sentence, the Agent may, from time to time, in its
reasonable discretion for the purpose of assessing and ensuring the value of
any Mortgaged Property, obtain one or more environmental assessments or audits
of such Mortgaged Property prepared by a hydrogeologist, an independent
engineer or other qualified consultant or expert approved by the Agent to
evaluate or confirm (a) whether any Hazardous Materials are present in the soil
or water at such Mortgaged Property and (b) whether the use and operation of
such Mortgaged Property complies with all Environmental Laws. Environmental
assessments may include without limitation detailed visual inspections of such
Mortgaged Property including any and all storage areas, storage tanks, drains,
dry xxxxx and leaching areas, and, in the event the Agent determines in its
sole reasonable discretion after such inspection that there is evidence of
contamination present and further testing is necessary (and only in such
event), the taking of soil samples, surface water samples and ground water
samples, as well as such other investigations or analyses as the Agent deems
appropriate. All such environmental assessments shall be conducted and made at
the expense of the Borrower.
9.9.4. Communications with Accountants.
The Borrower authorizes the Agent and, if accompanied by the Agent, the
Banks to communicate directly with the Borrower's independent certified public
accountants and authorizes such accountants to disclose to the Agent and the
Banks any and all financial statements and other supporting financial documents
and schedules including copies of any management letter with respect to the
business, financial condition and other affairs of the Borrower. At the
request
of the Agent, the Borrower shall deliver a letter addressed to such accountants
instructing them to comply with the provisions of this 9.9.4.
9.10. Compliance with Laws, Contracts, Licenses, and Permits.
The Borrower will comply with (a) the applicable laws and regulations wherever
its business is conducted, including all Environmental Laws, other than such
laws and regulations the enforcement of which would not have a materially
adverse effect on the Borrower (b) the provisions of its charter documents and
by-laws, (c) all material agreements and instruments by
which it or any of its properties may be bound and (d) all applicable decrees,
orders, and judgments, provided, however, the Borrower shall have the right to
contest any such laws, regulations or agreements during any period in which the
Borrower is in good faith diligently contesting the same by
appropriate proceedings reasonably satisfactory to the Agent, so long as no
lien will result during such period. If any authorization, consent, approval,
permit or license from any officer, agency or instrumentality of any government
shall become necessary or required in order that the Borrower
may fulfill any of its obligations hereunder or any of the other Loan
Documents, the Borrower will immediately take or cause to be taken all
reasonable steps within the power of the Borrower to obtain such authorization,
consent, approval, permit or license and furnish the Agent with evidence
thereof.
9.11. Employee Benefit Plans.
The Borrower will (i) promptly upon filing the same with the Department of
Labor or Internal Revenue Service furnish to the Agent a copy of the most
recent actuarial statement required to be submitted
under 103(d) of ERISA and Annual Report, Form 5500, with all required
attachments, in respect of each Guaranteed Pension Plan and (ii) promptly upon
receipt or dispatch, furnish to the Agent any notice, report or demand sent or
received in respect of a Guaranteed Pension Plan under 302,
4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA, or in respect of a
Multiemployer Plan, under 4041A, 4202, 4219, 4242, or 4245 of
ERISA.
9.12. Use of Proceeds.
The Borrower will use the proceeds of the Loans solely to refinance existing
indebtedness and for working capital and general corporate purposes. The
Borrower will obtain Letters of Credit solely for working capital and general
corporate purposes.
9.13. Additional Mortgaged Property.
If, after the Closing Date, the Borrower acquires title to real estate used as
or in connection with a manufacturing or warehouse facility, the Borrower shall
forthwith deliver to the Agent a fully executed mortgage or deed of trust over
such real estate, in form and substance satisfactory to the Agent, and (a) for
such real estate in which the acquisition price for such real estate is less
than $500,000, such lenders' title insurance policies, surveys, evidences of
insurance with the Agent named as loss
payee and additional insured, legal opinions and other documents and
certificates as is appropriate to the acquisition and the Borrower can
reasonably obtain in connection with such acquisition and (b) for
such real estate in which the acquisition price for such real estate is equal
to or greater than $500,000, the Borrower shall deliver to the Agent title
insurance policies, surveys, evidences of insurance with the Agent named as
loss payee and additional insured, legal opinions and other documents and
certificates with respect to such real estate as was required for Real Estate
of the Borrower as of the Closing
Date. The Borrower further agrees that, following the taking of such actions
with respect to such real estate, the Agent shall have a valid and enforceable
first priority mortgage or deed of trust over such real estate, free and clear
of all defects and encumbrances except for Permitted Liens.
9.14. Bank Accounts.
(a) The Borrower will immediately after the Closing Date, replace the existing
depository account at Chemical Bank with a depository account at the Agent in
the name of the Borrower. The Borrower
will, together with the employees, agents and other Persons acting on behalf of
the Borrower, receive and hold in trust for the Agent and the Banks all
payments constituting proceeds of Accounts Receivable
or other Collateral which come into their possession or under their control
and, immediately upon receipt thereof, deposit such payments in the form
received, with any appropriate endorsements, in one of the accounts designated
as a central depository account on Schedule 8.19. The Agent shall, on the
second Business Day immediately following the day of the Agent's receipt from
account debtors, obligors or (as the case may be) the Borrower of any such cash
proceeds or such later date as the Agent determines that good funds will be
received, and on a provisional basis until final receipt of good funds, credit
to the Obligations as contemplated by 9.14(b) all such cash proceeds
which are in the form of money, checks
or like items, provided, however, if the Agent receives such cash proceeds in
the form of federal funds, the Agent shall credit to the Obligations all such
cash proceeds on the date of receipt of such cash proceeds. For purposes of
the foregoing provisions of this 9.14(a), the Agent shall not be
deemed to have received any such cash proceeds on any day unless received by
the Agent before 3:00 p.m. (Boston time) on such day. The Borrower further
acknowledges and agrees that any such provisional credit shall
be subject to reversal if final collection in good funds of the related item is
not received by the Agent in accordance with the Agent's customary procedures
and practices for collecting provisional items.
(b) All payments to be applied towards the Obligations pursuant to
9.14(a) shall, except as otherwise provided, be applied to the
Obligations as follows: (i) first, to any Obligations related to Letters of
Credit; (ii) second, to any interest on the Revolving Credit Loans then due and
payable;
(iii) third, to any outstanding Obligations; (iv) fourth, unless the Banks
shall otherwise elect, as cash
collateral for any settlement of provisional credit; and (v) fifth, the excess,
if any, shall be credited to the Borrower's operating account with the Agent.
In the event that the Agent shall elect at any time not to
apply the payment as contemplated by the foregoing clause (iv), such election
shall not be deemed a waiver of any Bank's or the Agent's rights to apply
payments pursuant to such clause at a later time, and such Bank or the Agent
shall be entitled to apply payments pursuant to such at such later time and
from time to time thereafter.
(c) The Borrower agrees to deliver to the Agent, agency agreements
in form and substance
satisfactory to the Agent (the "Agency Agreements") executed by the Borrower
and the financial institution in which the Borrower has any depository accounts
which are permitted by the
Banks.
9.15. Further Assurances.
The Borrower will cooperate with the Agent and the Banks and execute such
further instruments and documents as the Agent shall reasonably request to
carry out to their satisfaction the transactions contemplated by this Credit
Agreement and the other Loan Documents.
10. CERTAIN NEGATIVE COVENANTS OF THE BORROWER
The Borrower covenants and agrees that, so long as any Loan, Letter of Credit
or Note is
outstanding or any Bank has any obligation to make any Loans or the Agent has
any obligation to
issue, extend or renew any Letters of Credit:
10.1. Restrictions on Indebtedness.
The Borrower will not create, incur, assume, guarantee or be or remain liable,
contingently or otherwise, with respect to any Indebtedness other than:
(a) Indebtedness to the Banks and the Agent arising under any of
the Loan
Documents;
(b) current liabilities of the Borrower incurred in the ordinary
course of business
not incurred through (i) the borrowing of money, or (ii) the obtaining of
credit except for credit
on an open account basis customarily extended and in fact extended in
connection with normal
purchases of goods and services;
(c) Indebtedness in respect of taxes, assessments, governmental
charges or levies
and claims for labor, materials and supplies to the extent that payment
therefor shall not at the
time be required to be made in accordance with the provisions of 9.8;
(d) Indebtedness in respect of judgments or awards that have been
in force for less
than the applicable period for taking an appeal so long as execution is not
levied thereunder or in respect of which the Borrower shall at the time in good
faith be prosecuting an appeal or
proceedings for review and in respect of which a stay of execution shall have
been obtained pending such appeal or review;
(e) endorsements for collection, deposit or negotiation and
warranties of products
or services, in each case incurred in the ordinary course of business;
(f) Indebtedness incurred in connection with the acquisition after
the date hereof
of any personal property constituting fleet vehicles or forklifts by the
Borrower in the ordinary course of business;
(g) Indebtedness incurred in connection with the acquisition after
the date hereof
of any real or personal property not otherwise provided for under this
10.1 by the Borrower, provided that the aggregate principal amount of
such Indebtedness of the Borrower permitted by this clause (g) shall not exceed
the aggregate amount of $500,000 at any one time;
(h) Indebtedness in respect of amounts borrowed by the Borrower
against the cash
surrender value of life insurance policies purchased by the Borrower covering
certain employees
of the Borrower and naming the Borrower as the beneficiary thereof;
(i) Indebtedness included in the Borrower's balance sheet dated
September 30,
1993;
(j) Indebtedness permitted by 10.4; and
(k) Indebtedness in respect of operating leases.
10.2. Restrictions on Liens.
The Borrower will not (a) create or incur or suffer to be created or incurred
or to exist any lien, encumbrance, mortgage, pledge, charge, restriction or
other security interest of any kind upon any of its property or assets of any
character whether now owned or hereafter acquired, or upon the income or
profits therefrom; (b) transfer any of such property or assets or the income or
profits therefrom for the purpose of subjecting the same to the payment of
Indebtedness or performance of any other obligation in priority to payment of
its general creditors; (c) acquire, or agree or have an option to acquire, any
property or assets upon conditional sale or other title retention or purchase
money security
agreement, device or arrangement; (d) suffer to exist for a period of more than
thirty (30) days after the same shall have been incurred any Indebtedness or
claim or demand against it that if unpaid might by law or upon bankruptcy or
insolvency, or otherwise, be given any priority whatsoever over its
general creditors; or (e) sell, assign, pledge or otherwise transfer any
accounts, contract rights, general intangibles, chattel paper or instruments,
with or without recourse; provided that the Borrower may create or incur or
suffer to be created or incurred or to exist:
(i) liens to secure taxes, assessments and other government charges
in
respect of obligations not overdue or liens on properties other than Mortgaged
Properties to secure claims for labor, material or supplies in respect of
obligations not overdue;
(ii) deposits or pledges made in connection with, or to secure payment
of, workmen's compensation, unemployment insurance, old age pensions or other
social security obligations;
(iii) liens on properties other than Mortgaged Properties in respect
of
judgments or awards, the Indebtedness with respect to which is permitted by
10.1(d);
(iv) liens of carriers, warehousemen, mechanics and materialmen, and
other like liens on properties other than Mortgaged Properties, in existence
less than 120 days from the date of creation thereof in respect of obligations
not overdue;
(v) encumbrances on Real Estate other than the Mortgaged Property
consisting of easements, rights of way, zoning restrictions, restrictions on
the use
of real property and defects and irregularities in the title thereto,
landlord's or lessor's liens under leases to which the Borrower is a party, and
other minor liens or
encumbrances none of which in the opinion of the Borrower interferes materially
with the use of the property affected in the ordinary conduct of the business
of the Borrower, which defects do not individually or in the aggregate have a
materially adverse effect on the business of the Borrower;
(vi) liens existing on the date hereof and listed on Schedule 10.2 hereto;
(vii) purchase money security interests in or purchase money mortgages
on real or personal property other than Mortgaged Properties acquired after the
date hereof to secure purchase money Indebtedness of the type and amount
permitted by 10.1(f) and (g), incurred in connection with the
acquisition of such property, which security interests or mortgages cover only
the real or personal property so acquired;
(viii) liens and encumbrances on each Mortgaged Property as and to the
extent permitted by the Mortgage applicable thereto; and
(ix) liens in favor of the insurance company issuing life insurance
policies
for employees of the Borrower to secure the Indebtedness permitted by
10.1(h); and
(x) liens in favor of the Agent under the Loan Documents.
10.3. Restrictions on Investments.
The Borrower will not make or permit to exist or to remain outstanding any
Investment except Investments in:
(a) marketable direct or guaranteed obligations of the United
States of America
that mature within three (3) years from the date of purchase by the Borrower;
(b) demand deposits, certificates of deposit, bankers acceptances
and time
deposits of United States banks having total assets in excess of
$1,000,000,000;
(c) securities commonly known as "commercial paper" issued by a
corporation
organized and existing under the laws of the United States of America or any
state thereof that
at the time of purchase have been rated and the ratings for which are not less
than "P 1" if rated by Xxxxx'x Investors Services, Inc., and not less than "A
1" if rated by Standard and Poor's;
(d) Investments existing on the date hereof and listed on Schedule
10.3 hereto;
(e) Investments consisting of promissory notes received as proceeds
of asset
dispositions permitted by 10.5.2;
(f) shares of any so-called "money market fund", provided that such
fund is
registered under the Investment Company Act of 1940, has net assets of at least
$500,000,000 and has an investment portfolio with an average maturity of 365
days or
less;
(g) Investments (other than loans to employees) which are not
otherwise included
in this 10.3, provided, however that the aggregate amount of all
Investments permitted by this
10.3 shall not exceed $250,000 at any time; and
(h) Investments permitted pursuant to 10.4.
provided, however, that, with the exception of demand deposits referred to in
10.3(b) and employee loans referred to in 10.3(h) such
Investments will be considered Investments permitted by this 10.3 only
if all
actions have been taken to the satisfaction of the Agent to provide to the
Agent for the benefit of the Banks and the Agent, a first priority perfected
security interest in all of such Investments free of all encumbrances other
than Permitted Encumbrances.
10.4. Loans to Employees.
The Borrower will not make or permit to exist or to remain outstanding any
Indebtedness or Investments relating to any employees other than (a)
Indebtedness in respect of guaranties by the Borrower of moving or relocation
obligations of its employees, (b) Investments consisting of loans and advances
to employees for moving expenses, relocation expenses and residential
purchases, (c) Investments consisting of loans and advances to employees for
travel and other company expenses in the ordinary course of business, provided
that such travel advances shall not exceed, in the aggregate, $50,000 at any
time, and (d) Investments consisting of loans and advances to employees in the
ordinary course of business, provided that such advances shall not exceed, in
the aggregate, $100,000 above the Existing Employee Loans at any time.
10.5. Distributions.
So long as no Default or Event of Default exists or is continuing or would
occur or exist as a result hereof, the Borrower will be permitted to make
Distributions in an amount not to exceed in the aggregate the greater of (a)
during any period of four (4) consecutive fiscal quarters an amount
equal to fifty percent (50%) of Net Income for the immediately preceding four
(4) consecutive fiscal quarter period or (b) an amount equal to the excess of
(i) twenty-five percent (25%) of Net Income for the period commencing June 27,
1993 and ending with the last day of the fiscal quarter next preceding
the proposed date of the Distribution, treated as a single accounting period,
over (ii) all Distributions made subsequent to June 27, 1993.
10.6. Merger, Consolidation and Disposition of Assets.
10.6.1. Mergers and Acquisitions.
The Borrower will not become a party to any merger or consolidation, or
agree to or effect any asset acquisition or stock acquisition (other than the
acquisition of assets in the ordinary course
of business consistent with past practices) except for acquisitions of entities
which are in the same or similar line of business as the Borrower with revenues
of not more than $5,000,000, provided, that (a) no Default or Event or Default
has occurred or is continuing or would exist after giving effect thereto, (b)
the aggregate total cash consideration for each such acquisitions does not
exceed $2,000,000, and the Borrower shall not be permitted to make more than
three
(3) such acquisitions during the term of this Agreement; (c) the Borrower has
demonstrated to the Banks covenant compliance with 11 on a pro forma
basis (after giving effect to each such acquisition); (d) the required majority
of the Board of Directors of the target company incumbent at the time such
acquisition is proposed has acquiesced, or the transaction is otherwise deemed
in the reasonable judgment of the Banks to be a "friendly acquisition", and (e)
simultaneously with any such acquisition the Borrower shall have granted to the
Agent for the benefit of the Banks and the Agent a security interest in all
newly acquired assets.
Any new Subsidiary formed as a result of or in connection with any
acquisition shall simultaneously with the formation thereof grant to the Agent
for the benefit of the Banks
and the Agent a first perfected security interest (except as otherwise
permitted by the Bank) in all of its existing and after-acquired assets, and
guaranty of all of the Obligations. All of the stock of such Subsidiary shall
be pledged to the Agent for the benefit of the Banks and the Agent. All
applicable parties shall execute and/or deliver to the Agent all such documents
and instruments requested by the Agent in order to perfect the Agent's security
interest therein. In addition, the Loan Documents shall be amended and/or
supplemented as necessary to make the
terms and conditions of the Loan Documents applicable to such Subsidiary.
10.6.2. Disposition of Assets.
The Borrower will not become a party to or agree to or effect any
disposition of assets, other than the disposition of assets in the ordinary
course of business, consistent with past
practices.
10.7. Sale and Leaseback.
The Borrower will not enter into any arrangement, directly or indirectly,
whereby the Borrower shall sell or transfer any property owned by it in order
then or thereafter to lease such property or lease other property that the
Borrower intends to use for substantially the same purpose as the property
being sold or transferred.
10.8. Compliance with Environmental Laws.
The Borrower will not, in any manner that would have a materially adverse
effect on the business, assets or financial condition of the Borrower and
violate any Environmental Law or cause such Real Estate to be in violation of
any Environmental Law, (a) use any of the Real Estate or any portion thereof
for the handling, processing, storage or disposal of Hazardous Substances, (b)
cause to be located on any of
the Real Estate or permit to be located on any owned Real Estate any
underground tank or other underground storage receptacle for Hazardous
Substances, (c) generate any Hazardous Substances
on any of the Real Estate, (d) conduct any activity at any Real Estate or use
any Real Estate in any manner so as to cause a release (i.e. releasing,
spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, disposing or dumping) or threatened release of
Hazardous Substances on, upon or into the Real Estate or (e) otherwise conduct
any activity at any Real Estate or use any Real Estate in any of the foregoing
instances and in any manner that would cause such a violation of any
Environmental Law or bring such Real Estate in violation of any Environmental
Law.
10.9. Employee Benefit Plans.
Neither the Borrower nor any ERISA Affiliate will:
(a) engage in any "prohibited transaction" within the meaning of
406 of ERISA or
4975 of the Code which could result in a material liability for the
Borrower; or
(b) permit any Guaranteed Pension Plan to incur an "accumulated funding
deficiency",
as such term is defined in 302 of ERISA, whether or not such
deficiency is or may be waived;
or
(c) fail to contribute to any Guaranteed Pension Plan to an
extent which,
or terminate any Guaranteed Pension Plan in a manner which, could result in the
imposition of a
lien or encumbrance on the assets of the Borrower pursuant to 302(f)
or 4068 of ERISA.
10.10. Bank Accounts.
The Borrower will not (a) establish any bank accounts other than (i) those
listed on Schedule 8.19; (ii) payroll accounts; (iii) convenience accounts; and
(iv) local operating accounts maintained by each of the Borrower's warehouses
and factories for such warehouse's or factory's account payables, without
providing the Agent with prior written notice of the establishment of any
operating account to which customers of the Borrower will be directed to make
payments of Accounts Receivable, (b) violate directly or indirectly any bank
agency or lock box agreement in favor of the Agent or the Banks with respect to
such account, or (c) deposit into any of the payroll accounts or convenience
accounts any amounts in excess of amounts necessary to pay current payroll
obligations from such payroll accounts and any amounts in excess of amounts
necessary to cover xxxxx cash expenses incurred by the Borrower in the
ordinary course of business from such convenience accounts. The Borrower
shall, simultaneously with the establishment of any bank account for which the
Borrower must provide the Agent prior notice, deliver to the Agent an agency
agreement in favor of the Agent with respect to such account, in form and
substance satisfactory to the Agent.
10.11. Restriction on Subsidiaries.
The Borrower will not form any Subsidiary without providing the Agent with at
least twenty (20) days prior written notice of such formation. Simultaneously
with such formation of any Subsidiary, the Borrower and such Subsidiary will
comply with the provisions of 10.6 applicable to a new Subsidiary.
11. FINANCIAL COVENANTS OF THE BORROWER
The Borrower covenants and agrees that, so long as any Loan, Letter of
Credit or Note is outstanding or any Bank has any obligation to make any Loans
or the Agent has any obligation to issue, extend or renew any Letters of
Credit:
11.1. Capital Expenditures.
The Borrower will not make Capital Expenditures that exceed in the aggregate,
$500,000 during any fiscal year commencing with the Borrower's 1997 fiscal
year, and for such 1997 fiscal year, Capital Expenditures shall not include
amounts capitalized in connection with the closing of the Borrower's
manufacturing facility located in Santa Maria, California up to an aggregate
amount of $250,000.
11.2. Debt Service.
The Borrower will not permit, as at the end of each fiscal period described in
the table set forth below, the ratio of (a) the sum of (i) Net Income (which,
for purposes of this 11.2, shall exclude all non-recurring
restructuring charges and period costs (as such period costs are described in
the Borrower's business plan dated as of September 13, 1996) of the Borrower
relating solely to the closing of the Borrower's manufacturing facility located
in Santa Maria, California up to a maximum aggregate
amount of $2,200,000) plus (ii) Total Interest Expense, plus (iii)
depreciation, plus (iv) amortization to (b) Total Debt Service to be less than
the ratio set forth opposite such period in such table :
Fiscal Period Ratio3 month period:
Q1, 1997 1.0:1.06 month period:
Q1, 1997 through
Q2, 1997 1.0:1.09 month period:
Q1, 1997
through
Q3, 1997 1.0:1.012 month period:
Q1, 1997
through Q4, 1997 1.0:1.0 Each
period of four consecutive fiscal quarters
thereafter, commencing
with the four consecutive fiscal
quarters ending on the last day of
Q1, 1998
1.0:1.0
11.3. Liabilities to Worth Ratio.
The Borrower will not permit the ratio of Total Liabilities to Tangible Net
Worth to exceed (a) 1.50:1.00 as at the end of each fiscal quarter for the
fiscal quarters ending Q1, 1997, Q2, 1997, and Q3, 1997, and (b) 1.30 as at the
end of each fiscal quarter ending thereafter.
11.4. Tangible Net Worth.
The Borrower will not permit, as at the end of each fiscal quarter, Tangible
Net Worth to be less than the sum of $28,500,000 plus, on a cumulative basis,
fifty percent (50%) of positive Net Income for each fiscal quarter commencing
with the fiscal quarter ending March 31, 1994.
11.5. Minimum Profitability.
The Borrower will not permit, as at the end of each fiscal period described in
the table set forth below, its Net Income (which, for purposes of this
11.5, shall include all non-recurring restructuring charges and period
costs of the Borrower relating solely to the closing of the Borrower's
manufacturing facility located in Santa Maria, California) to be less than the
amount set forth opposite such period in such table :
Fiscal PeriodAmount3 month period: Q1, 1997-$1,250,0006 month period: Q1,
1997 through
Q2, 1997-$1,350,0009 month period: Q1, 1997 through
Q3, 1997-$1,250,00012 month period: Q1, 1997 through
Q4, 1997-$1,000,000
12. CLOSING CONDITIONS
The obligations of the Banks to make the Revolving Credit Loans and the Term
Loan and the
obligations of the Agent to issue any Letters of Credit shall be subject to the
satisfaction of the following conditions precedent on or prior to the date
hereof.
12.1. Loan Documents.
Each of the Credit Agreement, the First Amendment to Security Documents and the
Assignment and Acceptance shall have been duly executed and delivered by the
respective parties thereto, shall be in full force and effect and shall be in
form and substance satisfactory to the Agent and the Banks. The Banks shall
have received a fully executed copy of each such document.
12.2. Certified Copies of Charter Documents.
The Agent shall have received from the Borrower a certificate, certified by a
duly authorized officer of the Borrower that no changes or amendments have been
made since December 29, 1993, to (a) its
charter or other incorporation documents as in effect on such date of
certification, and (b) its by-laws as in effect on such date.
12.3. Corporate, Action.
All corporate action necessary for the valid execution, delivery and
performance by the Borrower of this Credit Agreement and the other Loan
Documents to which it is or is to become a party shall have been duly and
effectively taken, and evidence thereof satisfactory to the Agent shall have
been provided to the Agent.
12.4. Incumbency Certificate.
To the extent of any changes in the officers authorized to execute the Loan
Documents and any amendments thereto, to make Loan Requests and give notices,
the Agent shall have received from the Borrower an incumbency certificate,
dated as of the Closing Date, signed by a duly authorized officer of the
Borrower, and giving the name and bearing a specimen signature of each
individual who shall be authorized (and who has not previously been
authorized): (a) to sign, in the name and on behalf of the Borrower, each of
the Loan Documents; (b) to make Loan Requests and Conversion Requests and to
apply for Letters of Credit; and (c) to give notices and to take other action
on its behalf under the Loan Documents.
12.5. Validity of Liens.
The Security Documents shall be effective to create in favor of the Agent for
the benefit of the Banks and the Agent a legal, valid and enforceable first
(except for Permitted Liens entitled to priority under applicable law) security
interest in and lien upon the Collateral. All filings, recordings, deliveries
of instruments and other actions necessary or desirable in the opinion of the
Agent to protect and preserve such security interests shall have been duly
effected. The Agent shall have received evidence thereof in form and substance
satisfactory to the Agent.
12.6. Bank Agency Agreement Amendments.
The Agent shall have received an amendment, in form and substance satisfactory
to the Agent, from each bank at which the Borrower maintains depository
accounts (including bank agency or lock box
agreements) concerning the Agent's interest in such accounts.
13. CONDITIONS TO ALL BORROWINGS
The obligations of the Banks to make any Loan, including the Revolving
Credit Loan and the Term Loan, and of the Agent to issue, extend or renew any
Letter of Credit, in each case whether on or after the Closing Date, shall also
be subject to the satisfaction of the following conditions precedent:
13.1. Representations True; No Event of Default.
Each of the representations and warranties of the Borrower contained in this
Credit Agreement, the other Loan Documents or in any document or instrument
delivered pursuant to or in connection with this
Credit Agreement shall be true as of the date as of which they were made and
shall also be true at and as of the time of the making of such Loan or the
issuance, extension or renewal of such Letter of Credit, with the same effect
as if made at and as of that time (except to the extent of changes resulting
from transactions contemplated or permitted by this Credit Agreement and the
other Loan Documents and changes occurring in the ordinary course of business
that singly or in the aggregate are not materially adverse, and to the extent
that such representations and warranties relate expressly to an earlier date)
and no Default or Event of Default shall have occurred and be continuing.
13.2. No Legal Impediment.
No change shall have occurred in any law or regulations thereunder or
interpretations thereof that in the reasonable opinion of any Bank or, as the
case may be, would make it illegal for such Bank to make such Loan or the Agent
to issue, extend or renew such Letter of Credit.
13.3. Governmental Regulation.
Each Bank shall have received such statements in substance and form reasonably
satisfactory to such Bank as such Bank shall require for the purpose of
compliance with any applicable regulations of the Comptroller of the Currency
or the Board of Governors of the Federal Reserve System.
13.4. Proceedings and Documents.
All proceedings in connection with the transactions contemplated by this Credit
Agreement, the other Loan Documents and all other documents incident thereto
shall be satisfactory in substance and in form to the Banks and to the Agent
and the Agent's Special Counsel, and the Banks, the Agent and such counsel
shall have received all information and such counterpart originals or certified
or other copies of such documents as the Agent may reasonably request.
13.5. Borrowing Base Report.
The Agent shall have received the most recent Borrowing Base Report required to
be delivered to the Agent in accordance with 9.4(g).
14. EVENTS OF DEFAULT; ACCELERATION; ETC.
14.1. Events of Default and Acceleration.
If any of the following events ("Events of Default" or, if the giving of notice
or the lapse of time or both is required, then, prior to such notice or lapse
of time, "Defaults") shall occur:
(a) the Borrower shall fail to pay any principal of the Loans when
the same shall
become due and payable, whether at the stated date of maturity or any
accelerated date of
maturity or at any other date fixed for payment;
(b) the Borrower shall fail to pay any interest on the Loans, the
commitment fee,
any Letter of Credit Fee, or other sums due hereunder or under any of the other
Loan
Documents, within five (5) days after the same shall become due and payable,
whether at the stated date of maturity or any accelerated date of maturity or
at any other date fixed for payment;
(c) the Borrower shall fail to comply with any of its covenants
contained in 9.1,
9.5.1, 9.7, 9.8, 9.9, 9.12-9.15,
10 (other than certain provisions of 10.2 as set forth in
14.1(d) and 10.7) or 11, or any of the covenants
contained in any of the Mortgages;
(d) the Borrower shall fail to comply with any of its covenants
contained in 9.11
or, only as to involuntary liens, the provisions of 10.2 applicable to
such involuntary liens, within thirty (30) days after the occurrence of such
noncompliance;
(e) the Borrower shall fail to perform any term, covenant or
agreement contained
in 9.2, 9.4, 9.5 (other than 9.5.1), and
10.8 (other than those specified elsewhere in this 14.1) for
fifteen (15) days after written notice of such failure has been given to the
Borrower by the Agent;
(f) the Borrower shall fail to comply with any of its covenants
contained herein or
in any of the other Loan Documents (other than those specified elsewhere in
this 14.1) for thirty (30) days after written notice of such failure
has been given to the Borrower by the Agent;
(g) any representation or warranty of the Borrower in this Credit
Agreement or any
of the other Loan Documents or in any other document or instrument delivered
pursuant to or in connection with this Credit Agreement shall prove to have
been false in any material respect
upon the date when made or deemed to have been made or repeated;
(h) the Borrower shall fail to pay at maturity, or within any
applicable period of
grace, any obligation for borrowed money or credit received (other than trade
credit) or in respect of any Capitalized Leases (other than Capitalized Leases
for vehicles and forklifts) in an aggregate amount in excess of $250,000, or
fail to observe or perform any material term, covenant or agreement contained
in any agreement by which it is bound, evidencing or
securing borrowed money or credit received (other than trade credit) or in
respect of any Capitalized Leases for such period of time as would permit
(assuming the giving of appropriate notice if required) the holder or holders
thereof or of any obligations issued thereunder to accelerate the maturity
thereof;
(i) the Borrower or any Subsidiary shall make an assignment for the
benefit of
creditors, or admit in writing its inability to pay or generally fail to pay
its debts as they mature or become due, or shall petition or apply for the
appointment of a trustee or other custodian, liquidator or receiver of the
Borrower or any Subsidiary or of any substantial part of the assets of the
Borrower or any Subsidiary or shall commence any case or other proceeding
relating to the Borrower or any Subsidiary under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation or similar law of any jurisdiction,
now or hereafter in effect, or shall take any action to authorize or in
furtherance of any of the foregoing, or if any such petition or application
shall be filed or any such case or other proceeding shall be commenced against
the Borrower or any Subsidiary and the Borrower
or such Subsidiary shall indicate its written approval thereof, consent thereto
or acquiescence therein;
(j) a decree or order is entered appointing any such trustee,
custodian, liquidator
or receiver or adjudicating the Borrower or any Subsidiary bankrupt or
insolvent, or approving a petition in any such case or other proceeding, or a
decree or order for relief is entered and remains in force for more than forty-
five (45) days, whether or not consecutive, in respect of the Borrower or any
Subsidiary in an involuntary case under federal bankruptcy laws as now or
hereafter constituted, provided, such an involuntary case was brought by
creditors of the Borrower having an aggregate claim of not more than $100,000;
(k) there shall remain in force, undischarged, unsatisfied and
unstayed, for more
than thirty (30) days, whether or not consecutive, any final judgment against
the Borrower not covered by insurance that, with other outstanding final
judgments not otherwise covered by insurance, undischarged, against the
Borrower exceeds in the aggregate $500,000;
(l) if any of the Loan Documents shall be canceled, terminated,
revoked or
rescinded otherwise than in accordance with the terms thereof or with the
express prior written agreement, consent or approval of the Banks, or any
action at law, suit or in equity or other legal proceeding to cancel, revoke or
rescind any of the Loan Documents shall be commenced by or on behalf of the
Borrower, or any court or any other governmental or regulatory authority or
agency of competent jurisdiction shall make a determination that, or issue a
judgment, order, decree or ruling to the effect that, any one or more of the
Loan Documents is illegal, invalid or unenforceable in accordance with the
terms thereof;
(m) with respect to any Guaranteed Pension Plan, an ERISA
Reportable Event shall
have occurred and the Majority Banks has determined in their reasonable
discretion that such event reasonably could be expected to result in liability
of the Borrower to the PBGC or such Guaranteed Pension Plan in an aggregate
amount exceeding $500,000 and such event in the circumstances occurring
reasonably could constitute grounds for the termination of such
Guaranteed Pension Plan by the PBGC or for the appointment by the appropriate
United States District Court of a trustee to administer such Guaranteed Pension
Plan; or a trustee shall have been appointed by the United States District
Court to administer such Plan; or the PBGC shall have instituted proceedings to
terminate such Guaranteed Pension Plan;
(n) the Borrower shall be enjoined, restrained or in any way
prevented by the order of any court or any administrative or regulatory agency
from conducting any part of its business and such order shall continue in
effect for more than thirty (30) days if such enjoinment, restriction or
prevention would have a material adverse effect on the business or financial
condition of the Borrower;
(o) there shall occur any material damage to, or loss, theft or
destruction of, any Collateral, whether or not insured, or any embargo,
condemnation (other than by eminent domain), act of God or public enemy, or
other casualty, which in any such case causes, for more than thirty (30)
consecutive days, the cessation or substantial curtailment of revenue producing
activities at any facility of the Borrower if such event or circumstance is not
covered by business interruption insurance and would have a material adverse
effect on the business or financial condition of the Borrower;
(p) there shall occur the loss, suspension or revocation of, or
failure to renew, any license or permit for a period of more than thirty (30)
days in any twelve (12) month period, whether or not consecutive now held or
hereafter acquired by the Borrower if such loss, suspension, revocation or
failure to renew would have a material adverse effect on the
business or financial condition of the Borrower; or
(q) a Change of Control has occurred;
then, and in any such event, so long as the same may be continuing, the Agent
may and, upon the request of the Majority Banks shall, by notice in writing to
the Borrower declare all amounts owing with respect to this Credit Agreement,
the Notes and the other Loan Documents to be, and they shall thereupon
forthwith become, immediately due and payable without presentment, demand,
protest or other notice
of any kind, all of which are hereby expressly waived by the Borrower; provided
that in the event of any Event of Default specified in
14.1(i) or 14.1(j), all such amounts shall become immediately
due and payable automatically and without any requirement of notice from the
Agent or any Bank.
14.2. Termination of Commitment.
If any one or more of the Events of Default specified in 14.1(i) or
14.1(j) shall occur, any unused portion of the credit hereunder shall
forthwith terminate and each of the Banks shall be relieved of all further
obligations to make Loans to the Borrower and the Agent shall be relieved of
all further obligations to issue, extend or renew Letters of Credit. If any
other Event of Default shall have occurred and be continuing, or if on any
Drawdown Date or other date for issuing, extending or renewing any Letter
of Credit the conditions precedent to the making of the Loans to be made on
such Drawdown Date or (as the case may be) to issuing, extending or renewing
such Letter of Credit on such other date are not satisfied, the Agent may and,
upon the request of the Majority Banks, shall, by notice to the Borrower,
terminate the unused portion of the credit hereunder, and upon such notice
being given
such unused portion of the credit hereunder shall terminate immediately and
each of the Banks shall be relieved of all further obligations to make Loans
and to issue, extend or renew Letters of Credit. No termination of the credit
hereunder shall relieve the Borrower of any of the Obligations.
14.3. Remedies.
In case any one or more of the Events of Default shall have occurred and be
continuing, and whether or not the Banks have accelerated the maturity of the
Loans pursuant to 14.1, each Bank, if owed any
amount with respect to the Loans, may, with the consent of the Majority Banks
but not otherwise, proceed to protect and enforce its rights by suit in equity,
action at law or other appropriate proceeding, whether for the specific
performance of any covenant or agreement contained in this Credit Agreement and
the other Loan Documents or any instrument pursuant to which the Obligations to
such Bank are evidenced, including as permitted by applicable law the obtaining
of the ex parte appointment of a receiver, and, if such amount shall have
become due, by declaration or
otherwise, proceed to enforce the payment thereof or any other legal or
equitable right of such Bank. No remedy herein conferred upon any Bank or the
Agent or the holder of any Note or issuer of
any Letter of Credit is intended to be exclusive of any other remedy and each
and every remedy shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law or in equity or by
statute or any other provision of law.
14.4. Distribution of Collateral Proceeds.
In the event that, following the occurrence or during the continuance of any
Event of Default, the Agent or any Bank receives any monies in connection with
the enforcement of any the Security Documents, or otherwise with respect to the
realization upon any of the Collateral, such monies shall be distributed for
application as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of the
Agent for or in respect of all reasonable costs, expenses, disbursements and
losses which shall have been incurred or sustained by the Agent in connection
with the collection of such monies by the Agent, for the exercise, protection
or enforcement by the Agent of all or any of the rights, remedies, powers and
privileges of the Agent under this Credit Agreement or any of the other Loan
Documents or in respect of the Collateral or in support of any provision of
adequate indemnity to the Agent against any taxes or liens which by law shall
have, or may have, priority over the rights of the Agent to such monies;
(b) Second, to all other Obligations in such order or preference as
the Majority Banks may determine; provided, however, that distributions in
respect of such Obligations
owing to the Banks with respect to each type of Obligation such as interest,
fees, principal and expenses, shall be made among the Banks pro rata; and
provided, further, that the Agent may in its discretion make proper allowance
to take into account any Obligations not then due and payable;
(c) Third, upon payment and satisfaction in full or other
provisions for payment in full satisfactory to the Banks and the Agent of all
of the Obligations, to the payment of any obligations required to be paid
pursuant to 9-504(1)(c) of the Uniform Commercial Code of
the Commonwealth of Massachusetts; and
(d) Fourth, the excess, if any, shall be returned to the Borrower or to
such other
Persons as are entitled thereto.
15. SETOFF
Regardless of the adequacy of any collateral, during the continuance of
any Event of Default, any deposits or other sums credited by or due from any of
the Banks to the Borrower and any securities or other property owned by the
Borrower in the possession of such Bank may be applied to or set off by
such Bank against the payment of Obligations and any and all other liabilities,
direct, or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising, of the Borrower to such Bank.
Each of the Banks agrees with each other Bank that (a) if an amount to be set
off is to be applied to Indebtedness of the Borrower to such Bank, other than
Indebtedness evidenced by the Notes held by such Bank or constituting
Reimbursement Obligations owed to such Bank, such amount shall be applied
ratably to such other Indebtedness and to the Indebtedness evidenced by all
such Notes held by such
Bank or constituting Reimbursement Obligations owed to such Bank, and (b) if
such Bank shall receive from the Borrower, whether by voluntary payment,
exercise of the right of setoff, counterclaim, cross action, enforcement of the
claim evidenced by the Notes held by, or constituting Reimbursement Obligations
owed to, such Bank by proceedings against the Borrower at law or in equity or
by proof
thereof in bankruptcy, reorganization, liquidation, receivership or similar
proceedings, or otherwise, and shall retain and apply to the payment of the
Note or Notes held by, or Reimbursement Obligations owed to, such Bank any
amount in excess of its ratable portion of the payments received by all of the
Banks with respect to the Notes held by, and Reimbursement Obligations owed to,
all of the Banks, such Bank will make such disposition and arrangements with
the other Banks with respect to such excess, either by way of distribution, pro
tanto assignment of claims, subrogation or otherwise as shall result in each
Bank receiving in respect of the Notes held by it or Reimbursement obligations
owed it, its proportionate payment as contemplated by this Agreement; provided
that if all or any part of such excess payment is thereafter recovered from
such Bank, such disposition and arrangements shall be rescinded and the
amount restored to the extent of such recovery, but without interest.
16. THE AGENT
16.1. Authorization.
(a) The Agent is authorized to take such action on behalf of each of
the Banks and to exercise all such powers as are hereunder and under any of the
other Loan Documents and any related documents delegated to the Agent, together
with such powers as are reasonably incident thereto, provided that no duties or
responsibilities not expressly assumed herein or therein shall be implied to
have been assumed by the Agent.
(b) The relationship between the Agent and each of the Banks is that
of an independent contractor. The use of the term "Agent" is for convenience
only and is used to describe, as a form of convention, the independent
contractual relationship between the Agent and each of the Banks. Nothing
contained in this Agreement nor the other Loan Documents shall be construed to
create an agency, trust or other fiduciary relationship between the Agent and
any of the Banks.
(c) As an independent contractor empowered by the Banks to exercise
certain rights and perform certain duties and responsibilities hereunder and
under the other Loan Documents, the Agent is nevertheless a "representative" of
the Banks, as that term is defined in Article 1 of the Uniform Commercial Code,
for purposes of actions for the benefit of the Banks and the Agent
with respect to all collateral security and guaranties contemplated by the Loan
Documents. Such actions include the designation of the Agent as "secured
party", "mortgagee" or the like on all financing statements and other documents
and instruments, whether recorded or otherwise, relating to the attachment,
perfection, priority or enforcement of any security interests, mortgages or
deeds of trust in collateral security intended to secure the payment or
performance of any of the Obligations, all for the benefit of the Banks and the
Agent.
16.2. Employees and Agents.
The Agent may exercise its powers and execute its duties by or through
employees or agents and shall be entitled to take, and to rely on, advice of
counsel concerning all matters pertaining to its rights and duties under this
Agreement and the other Loan Documents. The Agent may utilize the services of
such Persons
as the Agent in its sole discretion may reasonably determine, and all
reasonable fees and expenses of any such Persons shall be paid by the Borrower.
16.3. No Liability.
Neither the Agent nor any of its shareholders, directors, officers or employees
nor any other Person
assisting them in their duties nor any agent or employee thereof, shall be
liable for any waiver, consent or approval given or any action taken, or
omitted to be taken, in good faith by it or them hereunder or under any of the
other Loan Documents, or in connection herewith or therewith, or be responsible
for the consequences of any oversight or error of judgment whatsoever, except
that the Agent or such other Person, as the case may be, may be liable for
losses due to its willful misconduct or gross negligence.
16.4. No Representations.
The Agent shall not be responsible for the execution or validity or
enforceability of this Agreement, the Notes, the Letter of Credit, any of the
other Loan Documents or any instrument at any time constituting,
or intended to constitute, collateral security for the Notes, or for the value
of any such collateral security or for the validity, enforceability or
collectability of any such amounts owing with respect to the Notes, or for any
recitals or statements, warranties or representations made herein or in any of
the other Loan Documents or in any certificate or instrument hereafter
furnished to it by the Borrower or be bound to ascertain or inquire as to the
performance or observance of any of the terms, conditions, covenants or
agreements herein or in any instrument at any time constituting, or intended to
constitute, collateral security for the Notes or to inspect any of the
properties, books or records of the Borrower. The
Agent shall not be bound to ascertain whether any notice, consent, waiver or
request delivered to it by the Borrower or any holder of any of the Notes shall
have been duly authorized or is true, accurate and complete. The Agent has not
made nor does it now make any representations or warranties, express or
implied, nor does it assume any liability to the Banks, with respect to the
credit worthiness or financial conditions of the Borrower. Each Bank
acknowledges that it has, independently and without reliance
upon the Agent or any other Bank, and based upon such information and documents
as it has deemed appropriate, made its own credit analysis and decision to
enter into this Agreement.
16.5. Payments.
16.5.1. Payments to Agent.
A payment by the Borrower to the Agent hereunder or any of the other
Loan Documents for the account of any Bank shall constitute a payment to such
Bank. The Agent agrees promptly to distribute to each Bank such Bank's pro
rata share of payments received by the Agent for the account of the Banks
except as otherwise expressly provided herein or in any of the other Loan
Documents.
16.5.2. Distribution by Agent.
If in the opinion of the Agent the distribution of any amount received
by it in such capacity hereunder, under the Notes or under any of the other
Loan Documents might involve it in
liability, it may refrain from making distribution until its right to make
distribution shall have been adjudicated by a court of competent jurisdiction.
If a court of competent jurisdiction shall adjudge that any amount received and
distributed by the Agent is to be repaid, each Person to
whom any such distribution shall have been made shall either repay to the Agent
its
proportionate share of the amount so adjudged to be repaid or shall pay over
the same
in such manner and to such Persons as shall be determined by such court.
16.5.3. Delinquent Banks.
Notwithstanding anything to the contrary contained in this Agreement or
any of the other Loan Documents, any Bank that fails (a) to make available to
the Agent its pro rata share of any Loan
or to purchase the Letter of Credit Participation or (ii) to comply with the
provisions of 15 with respect to making dispositions and arrangements
with the other Banks, where such Bank's share
of any payment received, whether by setoff or otherwise, is in excess of its
pro rata share of such payments due and payable to all of the Banks, in each
case as, when and to the full extent required by the provisions of this
Agreement, shall be deemed delinquent (a "Delinquent Bank") and shall be deemed
a Delinquent Bank until such time as such delinquency is satisfied. A
Delinquent Bank shall be deemed to have assigned any and all payments due to it
from the Borrower, whether on account of outstanding Loans, Unpaid
Reimbursement Obligations, interest, fees or otherwise, to the remaining
nondelinquent Banks for application to, and reduction of, their respective pro
rata shares of all outstanding Loans and Unpaid Reimbursement Obligations. The
Delinquent Bank hereby authorizes the Agent to
distribute such payments to the nondelinquent Banks in proportion to their
respective pro rata shares of all outstanding Loans and Unpaid Reimbursement
Obligations. A Delinquent Bank shall be deemed to have satisfied in full a
delinquency when and if, as a result of application of the assigned payments to
all outstanding Loans and Unpaid
Reimbursement Obligations of the nondelinquent Banks, the Banks' respective pro
rata shares of all outstanding Loans and Unpaid Reimbursement Obligations have
returned to those in effect immediately prior to such delinquency and without
giving effect to the nonpayment causing such delinquency.
16.6. Holders of Notes.
The Agent may deem and treat the payee of any Note or the purchaser of any
Letter of Credit
Participation as the absolute owner or purchaser thereof for all purposes
hereof until it shall
have been furnished in writing with a different name by such payee or by a
subsequent holder, assignee or transferee.
16.7. Indemnity.
The Banks ratably agree hereby to indemnify and hold harmless the Agent from
and against any and all claims, actions and suits (whether groundless or
otherwise), losses, damages, costs, expenses (including any expenses for which
the Agent has not been reimbursed by the Borrower as required
by 14), and liabilities of every nature and character arising out of
or related to this Agreement, the Notes, or any of the other Loan Documents or
the transactions contemplated or evidenced hereby or thereby, or
the Agent's actions taken hereunder or thereunder, except to the extent that
any of the same shall be directly caused by the Agent's willful misconduct or
gross negligence.
16.8. Agent as Bank.
In its individual capacity, FNBB shall have the same obligations and the same
rights, powers and privileges in respect to its Commitment and the Loans made
by it, and as the holder of any of the
Notes and as the purchaser of any Letter of Credit Participations, as it would
have were it not also the Agent.
16.9. Resignation.
The Agent may resign at any time by giving sixty (60) days prior written notice
thereof to the Banks and the Borrower. Upon any such resignation, the Majority
Banks shall have the right to appoint a successor Agent. Unless a Default or
Event of Default shall have occurred and be continuing, such successor Agent
shall be reasonably acceptable to the Borrower. If no successor Agent shall
have been so appointed by the Majority Banks and shall have accepted such
appointment within thirty (30) days
after the retiring Agent's giving of notice of resignation, then the retiring
Agent may, on behalf of the Banks, appoint a successor Agent, which shall be a
financial institution having a rating of not less than A or its equivalent by
Standard & Poor's Corporation. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested
with all the rights, powers, privileges and duties of the retiring Agent, and
the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation, the provisions of this
Agreement and the other Loan Documents shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was
acting as Agent.
16.10. Notification of Defaults and Events of Default.
Each Bank hereby agrees that, upon learning of the existence of a Default or an
Event of Default, it shall promptly notify the Agent thereof. The Agent hereby
agrees that upon receipt of any notice under this 16.10 it shall
promptly notify the other Banks of the existence of such Default or Event of
Default.
17. EXPENSES
The Borrower agrees to pay (a) the reasonable costs of producing and
reproducing this Credit
Agreement, the other Loan Documents and the other agreements and instruments
mentioned herein, (b)
any taxes (including any interest and penalties in respect thereto) payable by
the Agent or any Bank (other than taxes based upon the Agent's or such Bank's
net income) on or with respect to the transactions contemplated by this Credit
Agreement (the Borrower hereby agreeing to indemnify the Agent and such Bank
with respect thereto), (c) the reasonable fees, expenses and disbursements of
the
Agent's Special Counsel or any local counsel to the Agent incurred in
connection with the preparation or interpretation of the Loan Documents and
other instruments mentioned herein, each closing hereunder, and amendments,
modifications, approvals, consents or waivers hereto or hereunder, (d) the
fees, expenses and disbursements of the Agent incurred by the Agent in
connection with the Loan
Documents and other instruments mentioned herein, including all title insurance
premiums and surveyor, engineering and appraisal charges, (e) any fees, costs,
expenses and bank charges, including bank charges for returned checks, incurred
by the Agent in establishing, maintaining or handling agency accounts, lock box
accounts and other accounts for the collection of any of the Collateral; (f)
all reasonable out-of-pocket expenses (including without limitation reasonable
attorneys' fees and costs, which attorneys may be employees of the Agent or any
Bank, and reasonable consulting, accounting, appraisal, investment banking and
similar professional fees and
charges) incurred by the Agent or any Bank in connection with (i) the
enforcement of or preservation of rights under any of the Loan Documents
against the Borrower or the administration thereof after the occurrence and
during the continuance of a Default or Event of Default and (ii) any
litigation, proceeding or dispute whether arising hereunder or otherwise, in
any way related to the Agent's or any Bank's relationship with the Borrower,
(g) all reasonable fees, expenses and disbursements of the Agent incurred in
connection with UCC searches, UCC filings or mortgage recordings and (h) all
costs, fees, expenses and disbursements of the Agent incurred by the Agent in
connection with the commercial finance examinations contemplated by
9.9.1. The covenants of this 17 shall survive payment or
satisfaction of all other Obligations.
18. INDEMNIFICATION
(a) The Borrower agrees to indemnify and hold harmless the Agent
and the Banks from and
against any and all claims, actions and suits whether groundless or otherwise,
and from and against any and all liabilities, losses, damages and expenses of
every nature and character arising out of this Credit Agreement or any of the
other Loan Documents or the transactions contemplated hereby including,
without limitation, (a) any actual or proposed use by the Borrower of the
proceeds of any of the
Loans or Letters of Credit, (b) the reversal or withdrawal of any provisional
credits granted by the Agent upon the transfer of funds from bank agency or
lock box accounts or in connection with the provisional honoring of checks or
other items, (c) any actual or alleged infringement of any patent, copyright,
trademark, service xxxx or similar right of the Borrower comprised in the
Collateral, (d) the Borrower entering into or performing this Credit Agreement
or any of the other Loan Documents or (e) with respect to the Borrower and
their respective properties and assets, the violation of any Environmental Law,
the presence, disposal, escape, seepage, leakage, spillage, discharge,
emission, release or threatened release of any Hazardous Substances or any
action, suit, proceeding
or investigation brought or threatened with respect to any Hazardous Substances
(including, but not limited to, claims with respect to wrongful death, personal
injury or damage to property), in each
case including, without limitation, the reasonable fees and disbursements of
counsel and allocated costs of internal counsel incurred in connection with any
such investigation, litigation or other proceeding, unless such claims were the
result of the Agent's or such Bank's gross negligence or willful misconduct, or
the conduct giving rise to such claims occurred during or after the Agent's (or
its nominee's) ownership or sole possession of such properties. In litigation,
or the preparation therefor, the Banks and the Agent shall be entitled to
select their own counsel and, in addition to the foregoing indemnity, the
Borrower agrees to pay promptly the reasonable fees and expenses of such
counsel. If,
and to the extent that the obligations of the Borrower under this 18
are unenforceable for any reason, the Borrower hereby agrees to make the
maximum contribution to the payment in satisfaction of such obligations which
is permissible under applicable law. The covenants contained in this
18 shall
survive payment or satisfaction in full of all other Obligations.
(b) In the event of the institution or assertion of a claim as to
which indemnity may be sought by the Agent or any Bank (a "Claim"), the bank
officers active upon the Borrower's account at the time of such institution or
assertion shall provide the Borrower with written notice of such Claim promptly
after such officer obtains actual knowledge thereof. The Borrower shall have
the right, upon
receipt of such notice, and at the Borrower's election and the sole cost and
expense of the Borrower, to defend, contest, settle or otherwise protect itself
against such Claim with legal counsel of its own selection, which legal counsel
shall be reasonably satisfactory to the Agent or such Bank, and the
Agent or such Bank shall have the right, but not the obligation, to participate
at its own expense in the defense of such Claim using counsel of its own
selection, provided, however, if the Borrower shall fail to take such action
within a reasonable time after receipt of notice by the Agent or such Bank, the
Agent or such Bank shall have the right, but not the obligation, at the
Borrower's sole cost and expense, to defend and to compromise or settle such
Claim. The Agent and the Banks and the Borrower agree to cooperate with each
other and render reasonable assistance to each other in the investigation,
defense or settlement of any Claim, and the Agent and the Banks agree to make
all files and documents the Agent or any Bank deems appropriate available for
inspection and copying by the Borrower, all at the Borrower's sole cost and
expense. The provisions of this paragraph shall apply in the event of any
claim by the Agent or any Bank for indemnification pursuant to this Credit
Agreement or any of the other Loan Documents or any agreement or document
entered into or executed in connection herewith or therewith.
19. SURVIVAL OF COVENANTS, ETC
All covenants, agreements, representations and warranties made herein,
in the Notes, in any of the other Loan Documents or in any documents or other
papers delivered by or on behalf of the
Borrower pursuant hereto shall be deemed to have been relied upon by the Banks
and the Agent, notwithstanding any investigation heretofore or hereafter made
by any of them, and shall survive the making by the Banks of any of the Loans
and the issuance, extension or renewal of any Letters of Credit
by the Agent, as herein contemplated, and shall continue in full force and
effect so long as any Letter of Credit or any amount due under this Credit
Agreement or the Notes or any of the other Loan Documents remains outstanding
or any Bank has any obligation to make any Loans or the Agent has any
obligation to issue, extend or renew any Letter of Credit, and for such further
time as may be otherwise expressly specified in this Credit Agreement. All
statements contained in any certificate or other paper delivered to any Bank or
the Agent at any time by or on behalf of the Borrower pursuant hereto or in
connection with the transactions contemplated hereby shall constitute
representations and warranties by the Borrower hereunder.
20. ASSIGNMENT AND PARTICIPATION
20.1. Conditions to Assignment by Bank.
Each Bank may assign all or a portion of its interests, rights and obligations
under this Credit Agreement (including its Commitment, the all or a portion of
the Revolving Credit Loans, its interests relating to the
Letters of Credit and all or a portion of the Term Loan at the time owing to it
and the Notes held by it) with the prior written consent of the Agent and
Borrower, which consent shall not unreasonably be withheld; provided, however,
FNBB shall at all times retain fifty-one percent (51%) of the Total Commitment.
The assignee shall execute and deliver to the Agent, an Assignment and
Acceptance in
form and substance satisfactory to the Agent. Upon such execution, delivery
and acceptance from and after the effective date specified in each Assignment
and Acceptance, which effective date shall be at least five (5) Business Days
after the execution thereof, (i) the assignee thereunder shall be a party
hereto and, to the extent provided in such Assignment and Acceptance, have the
rights and obligations of a Bank hereunder, and (ii) the assigning Bank shall,
to the extent provided in such assignment be released from its obligations
under this Credit Agreement.
20.2. New Notes.
Upon its receipt of an Assignment and Acceptance executed by the assignee Bank,
the Agent shall give prompt notice thereof to the Borrower. Within five (5)
Business Days after receipt of such notice, the Borrower, shall execute and
deliver to the Agent and assignee Bank, in exchange for each surrendered
Revolving Credit Note or Term Note, as the case may be, a new Revolving Credit
Note or Term Note, as the case may be, to the order of such assignee in an
amount equal to the amount assumed by such assignee pursuant to such Assignment
and Acceptance and, if the assigning Bank has retained some portion of its
obligations hereunder, a new Note to the order of such Bank in an amount equal
to the amount retained by it hereunder. Such new Notes shall provide that it
is a replacement for the surrendered Note, shall be in an aggregate principal
amount equal to the aggregate principal amount of the surrendered Notes, shall
be dated the effective date of such in Assignment and Acceptance and shall
otherwise be substantially the form of the assigned Notes. The surrendered
Notes shall be canceled and returned to the Borrower.
20.3. Participations.
Each Bank may sell participations to one or more banks or other entities in a
portion of such Bank's
rights and obligations under this Credit Agreement not to exceed, in the
aggregate, forty-nine percent (49%) and the other Loan Documents; provided that
(a) any such sale or participation shall not affect the rights and duties of
such Bank hereunder to the Borrower and (b) the only rights granted to the
participant pursuant to such participation arrangements with respect to
waivers, amendments or modifications of the Loan Documents shall be the rights
to approve waivers, amendments or
modifications that would reduce the principal of or the interest rate on the
Loans, or extend any regularly scheduled payment date for principal or
interest.
20.4. Disclosure.
The Borrower agrees that in addition to disclosures made in accordance with
standard and customary banking practices the assigning Bank may disclose
information obtained by such Bank pursuant to this Credit Agreement to
assignees or participants and potential assignees or participants hereunder;
provided that such assignees or participants or potential assignees or
participants shall agree (a) to treat in confidence such information unless
such information otherwise becomes public knowledge, (b) not
to disclose such information to a third party, except as required by law or
legal process and (c) not to make use of such information for purposes of
transactions unrelated to such contemplated assignment or participation.
20.5. Assignee or Participant Affiliated with the Borrower.
If any assignee Bank is an Affiliate of the Borrower, then any such assignee
Bank shall have no right to vote hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers
or for purposes of agreeing to amendments or other modifications to any of the
Loan Documents. A transferor Bank shall have no right to vote hereunder or
under any of the other Loan Documents for purposes of granting consents or
waivers or for purposes of agreeing to amendments or modifications to
any of the Loan Documents to the extent that such participation is beneficially
owned by the Borrower or any Affiliate of the Borrower, and the determination
of the Majority Banks shall for all purposes of this Agreement and the other
Loan Documents be made without regard to the interest of such transferor Bank
in the Loans to the extent of such participation.
20.6. Retention of Indemnification Rights.
Any assigning Bank shall retain its rights to be indemnified pursuant to
17 with respect to any claims or actions arising prior to the date of
such assignment.
20.7. Assignment by Borrower.
The Borrower shall not assign or transfer any of its rights or obligations
under any of the Loan Documents without the prior written consent of each of
the Banks.
21. NOTICES, ETC
Except as otherwise expressly provided in this Credit Agreement, all
notices and other communications made or required to be given pursuant to this
Credit Agreement or the Notes or any
Letter of Credit Applications shall be in writing and shall be delivered in
hand, mailed by United States registered or certified first class mail, postage
prepaid, sent by overnight courier, or sent by telegraph, telecopy, facsimile
or telex and confirmed by delivery via courier or postal service, addressed as
follows:
(a) if to the Borrower, at 0 Xxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxxxxxxx, Attention:
Xxxxx X. Xxxxx, Chief Financial Officer, or at such other address for notice as
the Borrower
shall last have furnished in writing to the Person giving the notice, with a
copy to Xxxxxxxx X. Xxxxxxxx, Esq., Xxxxx & Xxxxxxxx, 000 Xxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000;
(b) if to the Agent, at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000, XXX,
Attention: Xxxxxxx X. Xxxx, Vice President, or such other address for notice as
the Agent
shall last have furnished in writing in the manner provided for notices to the
Person giving the
notice; and
(c) if to any Bank, at such Bank's address set forth on Schedule 1
hereto, or such
other address for notice as such Bank shall have last furnished in writing to
the Person giving
notice.
Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (i) if delivered by hand, overnight courier
or facsimile to a responsible officer of the party to which it is directed, at
the time of the receipt thereof by such officer or the sending of such
facsimile and (ii) if sent by registered or certified first-class mail, postage
prepaid, on the third Business Day following the mailing thereof.
22. GOVERNING LAW
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF
THE COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH (EXCLUDING
THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE BORROWER AGREES THAT
ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT
BEING MADE UPON THE BORROWER IN PERSON AT THE ADDRESS SPECIFIED IN 21
OR X/X XXXXX & XXXXXXXX, 000 XXXXXX XXXXXX, XXXXXX, XX 00000, ATTN: XXXXXXXX
X. XXXXXXXX, ESQ., XXXXXX X. XXXXXXX, ESQ. OR XXXX X. XXXXXXXX, ESQ., OR, IF
SUCH INDIVIDUALS ARE NO LONGER ASSOCIATED WITH XXXXX & XXXXXXXX, OR XXXXX &
XXXXXXXX CEASES TO EXIST THEN TO SUCH COUNSEL AS MAY BE DESIGNATED BY THE
BORROWER BY PRIOR WRITTEN NOTICE TO THE AGENT, AND IF NO SUCH NOTICE IS GIVEN,
THEN TO THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN 21. THE
BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT COURT.
23. HEADINGS
The captions in this Credit Agreement are for convenience of reference
only and shall not define or limit the provisions hereof.
24. COUNTERPARTS
This Credit Agreement and any amendment hereof may be executed in
several counterparts and
by each party on a separate counterpart, each of which when executed and
delivered shall be an original, and all of which together shall constitute one
instrument. In proving this Credit Agreement it shall not be necessary to
produce or account for more than one such counterpart signed by the party
against whom enforcement is sought.
25. ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection
herewith or therewith
express the entire understanding of the parties with respect to the
transactions contemplated hereby. Neither this Credit Agreement nor any term
hereof may be changed, waived, discharged or terminated, except with the prior
written consent of the Bank and the Borrower.
26. WAIVER OF JURY TRIAL
The Borrower hereby waives its right to a jury trial with respect to
any action or claim arising out of any dispute in connection with this Credit
Agreement, the Notes or any of the other Loan Documents, any rights or
obligations hereunder or thereunder or the performance of which rights and
obligations. Except as prohibited by law, the Borrower hereby waives any right
it may have to claim or
recover in any litigation referred to in the preceding sentence any damages
other than, or in addition to, actual damages. The Borrower (a) certifies that
no representative, agent or attorney of the Bank has represented, expressly or
otherwise, that the Bank would not, in the event of litigation, seek to enforce
the foregoing waivers and (b) acknowledges that the Bank has been induced to
enter into this Credit Agreement, the other Loan Documents to which it is a
party by, among other things, the waivers and certifications contained herein.
27. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Any consent or approval required or permitted by this Credit Agreement to be
given by all of the Banks may be given, and any term of this Credit Agreement,
the other Loan Documents or any other instrument related hereto or mentioned
herein may be amended, and the performance or observance by the Borrower
of any terms of this Credit Agreement, the other Loan Documents or such other
instrument or the continuance of any Default or Event of Default may be waived
(either generally or in a particular instance and either retroactively or
prospectively) with, but only with, the written consent of the Borrower and the
written consent of the Majority Banks. Notwithstanding the foregoing, a
decrease
in the rate of interest on the Notes, an extension of the maturity of or
extension of scheduled payments on the Notes, the release in any calendar year
of Collateral the fair market value of which is greater than $1,000,000, an
increase in the Total Commitment, an increase in the maximum principal amounts
of the
Term Loans of the Banks, a decrease in, waiver of, or compromise with respect
to the principal amount of any of the Loans owing hereunder, a change in the
definition of "Borrowing Base" resulting in an increase in borrowing
availability, and a decrease in the amount of commitment fee or Letter of
Credit Fees hereunder may not be changed without the written consent of the
Borrower and the written consent of each Bank; the definition of Majority Banks
and this 27 may not be amended
without the written consent of all of the Banks; and the amount of any Letter
of Credit Fees payable for the Agent's account and 16 may not be
amended without the written consent of the Agent. No waiver shall extend to or
affect any obligation not expressly waived or impair any right consequent
thereon. No course of dealing or delay or omission on the part of the Agent or
any Bank in exercising
any right shall operate as a waiver thereof or otherwise be prejudicial
thereto. No notice to or demand upon the Borrower shall entitle the Borrower
to other or further notice or demand in similar or other circumstances.
28. SEVERABILITY
The provisions of this Credit Agreement are severable and if any one
clause or provision hereof shall be held invalid or unenforceable in whole or
in part in any jurisdiction, then such invalidity or unenforceability shall
affect only such clause or provision, or part thereof, in such jurisdiction,
and shall not in any manner affect such clause or provision in any other
jurisdiction, or any other clause or provision of this Credit Agreement in any
jurisdiction.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.
ARROW AUTOMOTIVE INDUSTRIES, INC.
By:______________________________________
Xxxxx X. Xxxxx, Chief Financial Officer
THE FIRST NATIONAL BANK OF BOSTON,
individually and as Agent
By:______________________________________
Xxxxxxx X. Xxxx, Vice President
BTM CAPITAL CORPORATION
By:______________________________________
Xxxxxxx X. York, Jr., Senior Vice President
--BOS-BUS:326738.4BOS-BUS:326738.4SCHEDULE 1
BanksRevolving
Credit Loan
Commitment
Term LoanCommitment
Percentage
Of
All LoansThe First National
Bank of Boston
000
Xxxxxxx Xxxxxx
Xxxxx
x, XX 00000
Eurodoll
ar Lending Office:
S
ame
$13,334,000
$3,642,848.80
66.67%BTM Capital
Corporation
000
Xxxxxx Xxxxxx
Xxxxxx,
XX 00000
Eurodollar
Lending Office:
Same
$6,666,000
$1,821,151.20
33.33%
