EXHIBIT 10.3
AMENDED AND RESTATED CREDIT AGREEMENT
among
IONICS, INCORPORATED
and
THE FIRST NATIONAL BANK OF BOSTON,
individually and as Agent
December 31, 1992
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TABLE OF CONTENTS
Page
1. THE CREDIT 1
1.1 Commitment to Lend 1
1.2 Notes 1
1.2.1. Selection of Basis for Computing
Interest 3
1.2.2. Interest Periods 4
1.3. Optional Repayment f Loans(s) 4
1.4. Method of Payment 5
1.5. Commitment Fees 6
1.6. Additional Costs and Expenses 6
1.6.1. General 6
1.6.2. Reserve Charge 7
1.6.3. Additional Amounts Payable on
Account of Credit Facilities 8
1.6.4 Bank Certificates 8
1.7. Changes in Circumstances 9
1.8. Standby Letters of Credit 9
2. DEFINITIONS 13
3. REPRESENTATIONS AND WARRANTIES 19
3.1. Corporate Authority 19
3.2. Governmental Approvals 20
3.3. Title to Properties; Absence
of Liens 20
3.4. Financial Statements 20
3.5. Changes 20
3.6. Taxes 20
3.7. Litigation 21
3.8. Environmental Compliance 21
4. CONDITIONS TO LOANS 22
5. COVENANTS 23
5.1. Financial Statements 23
5.2. Taxes 24
5.3. Guaranties 24
5.4. Negative Pledge 24
5.5. Merger and Sale of Assets 25
5.6. Net Worth 26
5.7. Working Capital 26
5.8. Permitted Indebtedness 26
5.9. Sale and Leaseback 27
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-2-
Page
5.10 Environmental Matters 27
5.10.1. Indemnification 27
5.10.2. Notice 27
5.10.3. Response Actions 28
6. DEFAULTS 28
7. SETOFFS 29
8. THE AGENT 30
8.1. Authorization 30
8.2. Employees and Agents 31
8.3. No Liability 31
8.4. No Representations 31
8.5. Payments 32
8.6. Holders of Notes 33
8.7. Indemnity 33
8.8. Agent as Bank 33
8.9. Resignation 33
8.10. Notification of Defaults and
Events of Default 34
8.11. Documents 34
9. ASSIGNMENT AND PARTICIPATION 34
9.1. Conditions to Assignment by Banks 34
9.2. Certain Representations and
Warranties; Limitations; Covenants 35
9.3. Register 36
9.4. New Notes 36
9.5. Participations 37
9.6. Disclosure 37
9.7. Miscellaneous Assignment
Provisions 37
9.8. Assignment by the Company 37
10. MISCELLANEOUS 38
10.1. Notices 38
10.2. Term of Agreement 38
10.3. No Waivers 38
10.4. Massachusetts Law 38
10.5. Computation of Interest 38
10.6. Expenses 38
10.7. Environmental Assessments 39
10.8. Consents, Amendments, Waivers,
Etc. 39
10.9. Counterparts 40
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-3-
EXHIBITS:
EXHIBIT A - Form of Loan Note
EXHIBIT B - Form of Promissory Note
EXHIBIT C - Form of Assignment and Acceptance
SCHEDULES:
SCHEDULE 3.3 - Title to Properties; Absence of Liens
SCHEDULE 3.8 - Environmental Compliance
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AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of
December 31, 1992 by and among IONICS, INCORPORATED (the
Company), a Massachusetts corporation having its principal
place of business at 00 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx
00000, THE FIRST NATIONAL BANK OF BOSTON (FNBB), 000 Xxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, and such other banks that
are or may become parties to this Agreement from time to time
in accordance with the provisions hereof (FNBB and such other
banks being collectively referred to herein as the Banks and
each a Bank) and THE FIRST NATIONAL BANK OF BOSTON as Agent
for the Banks (the Agent).
WHEREAS, the Company and FNBB are parties to a Credit
Agreement dated as of December 31, 1986 (as amended, the
Original Credit Agreement);
WHEREAS, the Company and FNBB desire to amend the
Original Credit Agreement to (i) extend the maturity of the
Loans and (ii) modify certain covenants and provisions;
NOW THEREFORE, the Company, the Banks and the Agent
hereby agree that the Original Credit Agreement shall be
amended and restated in its entirety as set forth herein and
shall remain in full force and effect only as provided herein.
1. THE CREDIT.
1.1. Commitment to Lend. Subject to the terms and
conditions hereinafter set forth, each of the Banks severally
agrees to lend and relend (a Loan, or, if more than one,
Loans) to the Company from time to time on or before December
31, 1995, in an aggregate principal amount up to but not
exceeding $25,000,000 (the Commitment Amount) at any one time
outstanding (the Commitment). The Loans shall be made
prorata in accordance with each Bank's Commitment
Percentage. For purposes of this section, the Maximum
Drawing Amount of all standby Letters of Credit shall be
treated as a like aggregate principal amount of Loans
outstanding hereunder.
1.2. Notes. The Company shall deliver to each Bank a note
(each a Loan Note) dated the date of delivery thereof,
maturing on December 31, 1995 and in a stated principal amount
equal to such Bank's Commitment. The Loan Notes shall be in
the form of Exhibit A hereto. The date and amount of each
Loan made by each Bank, and the date and amount of each
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payment of principal on such Loan, shall be recorded by each
Bank on the schedule annexed to such Bank's Loan Note, and the
aggregate unpaid principal amount shown on each such schedule
shall be the principal amount owing and unpaid on the and
Loan Notes, but the failure to make any such notation shall
not affect the Company's obligation to repay the Loans. The
Loan Notes shall bear interest from the date thereof,
payable quarterly in arrears on the first day of each January,
April, July and October, such interest to be computed in
accordance with the procedures described in 1.2.1 below, either
(i) at a rate per annum which shall at all times be
equal to the rate of interest as may be published from time to
time by FNBB at its head office as its Base Rate (the
Base Rate); or
(ii) at a rate per annum which shall be one-half
percent per annum above the LIBO Rate; or
(iii)at a rate per annum which shall be a Money Market
Rate determined by FNBB in its absolute discretion and based on
FNBB's cost of funds.
On December 31, 1995, provided no Default shall have occurred
and all interest payable on such date has been paid in full,
new notes (the Amortizing Notes) shall be exchanged for
the Loan Notes. The Amortizing Notes shall be in the form
of Exhibit B hereto, shall be in the principal amount equal to
the aggregate unpaid principal amount of the Loan Notes held
by each Bank on December 31, 1995, shall bear interest payable
at the same intervals as the Loan Notes and shall be payable
in a series of twelve (12) consecutive quarterly installments
of principal beginning on April 1, 1996. The first eight (8)
installments of principal shall each be in an amount equal to
6 1/4% of the original principal amount of the Amortizing
Notes and the final four (4) installments of principal shall
each be in an amount equal to 12 1/2% of the original
principal amount of the Amortizing Notes. The Amortizing
Notes shall bear interest on the unpaid principal balance from
time to time outstanding, computed daily from the date
thereof, with interest computed, in accordance with the
procedures described in 1.2.1 below, either:
(i) at a rate per annum which shall at all times be
one quarter (1/4%) above the rate of interest as may be
published from time to time by FNBB at its head office as its
Base Rate; or
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(ii) at a rate per annum which for all Interest
Periods ending on or before December 31, 1996 shall be one-
half percent (1/2%) per annum above the LIBO Rate for
each such Interest Period and which for all Interest
Periods thereafter shall be three-fourths percent (3/4%) per
annum above the LIBO Rate for each such Interest Period.
The Loan Notes and the Amortizing Notes are herein
collectively called the Notes.
1.2.1. Selection of Basis for Computing Interest.
(a) Not less than three (3) nor more than five (5)
Business Days prior to a possible Rate-Fixing Date, the
Company shall ask the Agent to quote the LIBO Rate and/or the
Money Market Rate which will be effective as of such Rate-
Fixing Date for one or more possible Interest Periods. The
Agent will provide to the Company the requested quotation(s)
not later than 11 A.M. Boston time on the second (2nd)
Business Day preceding such Rate-Fixing Date and, within two
(2) hours of its receipt of such quotation, the Company shall,
by notice in writing (or by telephone and promptly confirmed
in writing) delivered to the Agent, select
(1) one of the following bases for computing
interest on the aggregate amount outstanding on any Note as of
such Rate-Fixing Date:
(A) the Base Rate basis for computing such
interest on all or a specified portion of such aggregate
amount; or
(B) the Money Market Rate basis for computing
such interest on all or a specified portion of such aggregate
amount (which portion shall be in a minimum amount of
$1,000,000 and even multiples of $100,000); or
(C) the LIBO Rate basis for computing interest on
all or a specified portion of such aggregate amount (which
portion shall be in a minimum amount of $500,000 and even
multiples of $250,000);
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(2) an Interest Period.
(b) If on any Rate-Fixing Date, the Agent
shall determine in its sole discretion reasonably exercised
that it is unable to quote the LIBO Rate by reason of
circumstances or events in the London inter-bank foreign
currency deposits market generally affecting similar banks,
the Agent shall promptly notify the Company and the
Banks of such determination. Upon receipt of such
notification, any LIBO Rate selection for interest
calculations with respect to such Interest Period pursuant to
1.2.1(a) hereof shall be deemed ineffective and the Base Rate
basis for interest calculations shall apply to such selection.
1.2.2. Interest Periods. As to the Base Rate basis
for computing interest, an Interest Period may be
either indefinite (subject to change to a different Interest
Period for the LIBO Rate basis or Money Market Rate
basis of calculating interest, by notice from the Company as
provided in 1.2.1 hereof) or definite. As to the LIBO Rate
basis, an Interest Period shall be a definite period of one
(1), two (2), three (3) or six (6) months. As to the Money
Market Rate basis for computing interest, an Interest Period
shall be a definite period of seven (7), thirty (30), ninety
(90) or one hundred eighty (180) days. No Interest Period
relating to the Loan Notes shall expire later than December
31, 1995; and no Interest Period relating to the Amortizing
Notes shall expire later than December 31, 1998. A Rate-Fixing
Date for any Note shall automatically occur on the first
Business Day following the end of the preceding Interest
Period. In the event the Company fails on a timely basis to
select a basis for interest calculations hereunder, the Base
Rate basis for interest calculations shall apply
thereafter, using an indefinite Interest Period (subject to
change as aforesaid).
1.3. Optional Repayment of Loan(s). The Company
shall have the right, at its election, to repay the Loan(s) in
whole at any time, or in part from time to time. Any such
repayment of any portions of any Loan(s) subject to the Base
Rate basis of interest calculation, shall be without penalty
or premium but with accrued interest on the date of such
repayment on the amount repaid. If the Company shall
voluntarily repay any Eurodollar Loan(s) and if any such
repayment occurs during any Interest Period during which the
LIBO Rate is greater than the LIBO Rate which would have been
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quoted (on the amount to be repaid and for the remaining
portion of such Interest Period) by the Agent to the Company had
the date of such repayment been a Rate Fixing Date, the
Company shall pay at the date of repayment, in addition to
principal and interest, the LIBO Prepayment Charge. If the
Company shall voluntarily repay any Money Market Loan(s) and if
any such repayment occurs during any Interest Period during
which the Money Market Rate applicable to such Loan is
greater than the Money Market Rate which would have been quoted
(on the amount to be repaid and for the remaining portion
of such Interest Period) by the Agent to the Company had the
date of such repayment been a Rate Fixing Date, the
Company shall pay at the date of repayment, in addition to
principal and interest, the Money Market Prepayment Charge.
The Company shall give the Agent at least five (5) Business
Days' written notice of any proposed repayment pursuant to this
1.3, specifying the proposed date of repayment, the amount then
to be repaid and the principal amount to be repaid on the
Note(s) held by the Banks. Each partial repayment of Loan(s)
subject to the Base Rate basis of interest calculation shall be
in an aggregate principal amount of $50,000 or multiples
thereof. Each partial repayment of Eurodollar Loan(s) shall
be in an aggregate principal amount of $250,000, or multiples
thereof. Each partial repayment of Money Market Loan(s) shall
be in a minimum aggregate principal amount of $1,000,000 or
multiples of $100,000 thereof. Amounts of principal repaid and
applied to the Loan Notes may be reborrowed so long as
credit remains available under the Commitment and subject
to the conditions specified in 4. Amounts of principal
repaid and applied to the Amortizing Notes may not be
reborrowed. Prepayments of principal on the Amortizing Notes
will be applied to installments of principal due in the inverse
order of maturity. Each partial prepayment shall be allocated
among the Banks, in proportion, as nearly as practicable, to
the respective unpaid principal amount of each Bank's Note,
with adjustments to the extent practicable to equalize any
prior repayments not exactly in proportion.
1.4. Method of Payment. All payments and
prepayments of principal and all payments of interest and
commitment fees shall be made by the Company to the Agent for
the accounts of the Banks in immediately available funds.
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1.5. Commitment Fees. The Company agrees to pay
the Agent for the accounts of the Banks in accordance with
their respective Commitment Percentages quarterly in
arrears, commencing with January 1, 1993 so long as the
Commitments of the Banks are outstanding, a commitment fee at
the rate of 1/8 of 1% per annum on the daily average amount
by which the Commitment Amount minus the Maximum Drawing
Amount of all outstanding Letters of Credit exceeds the
outstanding principal amount of Loans. All commitment fees
provided for in the Original Credit Agreement shall continue
to accrue at the applicable rates thereof set forth in the
Original Credit Agreement (rather than the applicable rates
thereof set forth in this 1.5) until the Closing Date; and,
on and as of the Closing Date, the applicable rate set forth in
this 1.5 shall become effective with respect to such
amounts accruing thereafter.
1.6. Additional Costs and Expenses:
1.6.1. General. Anything in this Agreement
to the contrary notwithstanding, if any present or future
applicable law or regulation or interpretation thereof
shall be applicable to the Eurodollar Loans or to any of the
Banks or the Agent, or this Agreement, as a result of such
Eurodollar Loans and 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 Agreement or the
Eurodollar Loans; or
(b) materially change the basis of taxation
(other than any change in the statutory rate of domestic
or foreign tax on net income) of payments to any Bank of the
principal or the interest on any Eurodollar Loans or any
other amounts payable hereunder; or
(c) impose or increase or render applicable
any special deposit or reserve or 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 an office of any Bank, other than the reserve
charges payable pursuant to 1.6.2; or
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(d) impose on any Bank or the Agent any other
condition or requirement with respect to this Agreement
or the Eurodollar Loans, and the result of any of the foregoing
is
(i) to increase the cost to any Bank of
making, funding or maintaining its Eurodollar Loans in an
amount considered material by such Bank, or
(ii) to reduce the amount of principal,
interest or other amounts payable hereunder, or
(iii) to require such Bank or the Agent to
make any payment with respect to, or to forego payments of,
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 or the Agent from the Company
hereunder, then, and in each such case, the Company will,
upon demand made by the Agent (at the request of any Bank) at
any time and from time to time and as often as the occasion
therefor may arise, pay to the Agent (for the benefit of
the affected Banks) such reasonable additional amounts
as will be sufficient to compensate such Banks for such
additional cost, reduction, payment or foregone interest or
other sums. The Agent will use its best efforts (x) to notify
the Company of the possible imposition of any additional charge
under this 1.6.1, and (y) to minimize the amount of any such
additional cost, reduction, payment, foregone interest or
other sum, including but not limited to using an alternate
offshore funding source.
1.6.2. Reserve Charge. For each day any Eurodollar
Loan is outstanding, the Company shall pay to the Agent for
the accounts of the Banks an amount equal to the Reserve
Charge. Reserve Charges shall be paid on each interest
payment date in accordance with a bank certificate submitted
to the Company, as provided in 1.6.4 hereof. In the event
that the Board of Governors of the Federal Reserve System
establishes regulations which require the payment of interest
by Federal Reserve Banks on reserves maintained under said
Regulation D (or any successor or similar regulation relating
to such reserve requirements) against said "Eurocurrency
liabilities", and any Bank receives any such payment of
interest, then to the extent practicable, such Bank shall make
an appropriate reduction in the Reserve Charge to reflect the
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amount of interest received by such Bank and determined by
such Bank to be properly allocable to the portion of the
reserve with respect to which the Reserve Charge relates.
1.6.3. Additional Amounts Payable on Account of
Credit Facilities. If any change in law or any governmental
rule, regulation, policy, guideline or directive (whether or
not having the force of law) or the interpretation thereof
affects the amount of capital required or expected to be
maintained by any Bank or the Agent or any corporation
controlling such Bank or the Agent and such Bank or the Agent
determines that the amount of capital required is increased by
or based upon the existence of the credit facilities
established hereunder or any loans made pursuant hereto or
upon agreements or loans of the type contemplated hereby, then
the Agent (at the request of any Bank) may notify the Company
of such fact. To the extent that such increased capital
requirements are not reflected in the Base Rate, the Company
and such Bank or (as the case may be) the Agent shall
thereafter attempt to negotiate an adjustment to the fees
payable hereunder which will adequately compensate such Bank or
the Agent in light of these circumstances. If the Company and
such Bank or the Agent are unable to agree to such
adjustment within thirty days of the day on which the Company
receives such notice, then commencing on the date of such
notice (but no earlier than the effective date of any such
change), the fees payable hereunder shall increase by an
amount which will, in such Bank's or the Agent's
reasonable determination, provide adequate compensation.
1.6.4. Bank Certificates. A certificate signed by
an officer of each affected Bank, setting forth any
additional amount required to be paid by the Company
under 1.6.1, 1.6.2, or 1.6.3 hereof and the computations made
by such Bank to determine such additional amount, shall be
submitted by the Banks to the Company in connection with
each demand made by the Banks upon the Company and each such
certificate shall, save for obvious error, constitute
conclusive evidence of the additional amount required to be paid
by the Company to the Banks upon each such demand pursuant to
1.6.1, 1.6.2, or 1.6.3 hereof. A claim by the Agent or the
Banks for all or any part of any additional amount required to
be paid by the Company under 1.6.1, 1.6.2, or 1.6.3 hereof may
be made before and/or after the end of the Interest Period
to which such claim relates or during which such claim has
arisen and before and/or after any repayment or prepayment, to
which such claim relates, for any amount owed hereunder.
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1.7. Changes in Circumstances. If at any time,
(a) any Bank shall reasonably determine that (i)
it is not practicable for such Bank to obtain United
States Dollar deposits in the London inter-bank foreign
currency deposits market in the principal amount of any Loan
amounts selected to be subject to the LIBO Rate basis of
interest calculation and for periods equal to any Interest
Period; or (ii) the LIBO Rate does not or will not accurately
reflect the cost to such Bank of obtaining or maintaining any
Eurodollar Loan during any Interest Period despite the
Company's compliance with its obligations under 1.6 hereof; or
(b) after using its best efforts to use
an alternate offshore funding source, any Bank shall
reasonably determine that any present or future applicable law
has made or will make it unlawful for such Bank to make or
maintain any Eurodollar Loans or to comply with any of
such Bank's obligations in respect of any Eurodollar Loans;
then such Bank shall promptly give notice of such
determination to the Company. Upon notification pursuant to
paragraph (a) hereof, the obligation of such Bank to make
Eurodollar Loans shall be suspended until such Bank determines
that the circumstances described in such paragraph have ceased
to exist, and the interest on such Bank's outstanding
Eurodollar Loans shall be calculated with respect to the Base
Rate basis in accordance with 1.2.1 hereof. Upon
notification pursuant to paragraph (b) hereof, the obligation
of such Bank to make Eurodollar Loans shall be suspended until
such Bank determines that the circumstances described in such
paragraph have ceased to exist, and the interest on such
Bank's outstanding Eurodollar Loans shall be calculated with
respect to the Base Rate basis in accordance with 1.2.1
hereof.
1.8. Standby Letters of Credit. (a) The Letter
of Credit Bank may, in each case at the Letter of Credit
Bank's absolute discretion and upon such terms and conditions
as the Letter of Credit Bank and the Company may agree, from
time to time issue for the account of the Company, standby
Letters of Credit (Letters of Credit) in form and content
acceptable to the Letter of Credit Bank and the Company,
provided however, that at no time shall the sum of the
aggregate principal amount of all Loans outstanding plus the
aggregate Maximum Drawing Amount of the standby Letters of
Credit exceed the Commitment Amount.
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(b) The Company 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 Letter of Credit Bank, pay a fee to the Letter of Credit
Bank in an amount specified by the Letter of Credit Bank at
such time.
(c) (i) The obligations of the Company to
repay the Letter of Credit Bank as provided hereunder in
respect of drawings under any Letters of Credit shall rank
pari passu with the obligations of the Company to repay the
Loans, and shall be absolute and unconditional under any
and all circumstances. Without limiting the generality
of the foregoing, the Company's obligation to repay the
Company's obligation in respect of drawing under the Letters of
Credit shall not be subject to any defense based on the
non-application or misapplication by the beneficiary of
the proceeds of any such payment or the legality,
validity, regularity or enforceability of the Letter of Credit
or any renewal or extension thereof or any other document
whatsoever. The Letter of Credit Bank may accept or
pay any draft presented to it under any Letter of Credit, or
any renewal or extension thereof, regardless of when drawn
or made and whether or not negotiated, if such draft,
accompanying certificate or documents (as applicable) and any
transmittal advice are presented on or before the expiry
date of the Letter of Credit, or the renewal or extension
thereof then in effect. Furthermore, neither the Letter of
Credit Bank nor any of its correspondents shall be
responsible, as to any document presented under a Letter of
Credit, or any renewal or extension thereof, for the
validity or sufficiency of any signature or endorsement, for
delay in giving any notice or failure of any instrument to
bear adequate reference to the Letter of Credit or to any
renewal or extension thereof, or failure of documents not
required by the terms of the Letter of Credit to accompany any
instrument at negotiation, or for failure of any person to
note the amount of any draft on the reverse of the Letter of
Credit or on any renewal or extension thereof, so long as such
failure does not result in a payment in excess of the then
remaining Maximum Drawing Amount of such Letter of Credit, or
to forward documents in any manner required by the Letters
of Credit.
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(ii) Any action, inaction or omission on the part of
the Letter of Credit Bank or any of its correspondents, under
or in connection with any Letter of Credit or renewal
or extension thereof or the related instruments, documents
or property, if in good faith and in conformity with such
laws, regulations or customs as the Letter of Credit Bank or
any of its correspondents may deem to be applicable, shall be
binding upon the Company and shall not place the Letter of
Credit Bank or any of its correspondents under any
liability to the Company, in the absence of gross
negligence or willful misconduct by the Letter of Credit Bank
or its correspondents. The Letter of Credit Bank's rights,
powers, privileges and immunities specified in or arising under
this Agreement are in addition to any heretofore or at any time
hereafter otherwise created or arising, whether by statute
or rule of law or contract. All Letters of Credit issued
hereunder will, except to the extent that the Letter of Credit
Bank may agree to effect payment of Letters of Credit within
a reasonable period of time after resumption of business if
the Letter of Credit Bank's business is interrupted as
described in Article 19 of the Uniform Customs and Practice for
Documentary Credits (as further described below), and except
to the extent otherwise expressly provided hereunder, be
governed by the Uniform Customs and Practice for Documentary
Credits (1983 Revision), International Chamber of Commerce,
Publication No. 400, and any subsequent revisions thereof.
(d) The Company agrees that if any change in any
law, executive order or regulation, or any directive of
any administrative or governmental authority (whether or
not having the force of law) or in the interpretation thereof
by any court or administrative or governmental authority
charged with the administration thereof, shall either:
(i) impose, modify or deem applicable any
reserve, special deposit or similar requirements against
letters of credit heretofore or hereafter issued by the Letter
of Credit Bank; or
(ii)impose on the Letter of Credit Bank any
other condition or requirements relating to any such Letters of
Credit;
and the result of any event referred to in clause (i) or (ii)
above shall be to increase the cost to, or decrease the rate
of return of, the Letter of Credit Bank in respect of issuing
or maintaining any Letter of Credit issued for the account of
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the Company hereunder (which increase in cost or decrease in
rate of return shall be the result of the Letter of Credit
Bank's reasonable allocation among its letter of credit
customers, of the aggregate of such cost increases resulting
from such events), then, upon demand by the Letter of Credit
Bank and delivery to the Company of a certificate of an
officer of the Letter of Credit Bank explaining such change in
law, executive order, regulation, directive, or interpretation
thereof, its impact on the Letter of Credit Bank, and the basis
for determining such increased costs or decreased return
and their allocation, the Company shall immediately pay to
the Letter of Credit Bank, from time to time as specified by
the Letter of Credit Bank, such amounts as shall be sufficient
to compensate the Letter of Credit Bank for such increased cost
or decreased return. The Letter of Credit Bank's
determination of costs incurred under clause (i) or (ii) above,
and the allocation, if any, of such costs among the Company and
other letter of credit customers of the Letter of Credit Bank,
if done in good faith and made on an equitable basis, shall be
presumptively correct in the absence of evidence to the
contrary.
(e) Each Bank (other than the Letter of Credit Bank)
and the Company hereby acknowledge that each Letter of
Credit issued by the Letter of Credit Bank pursuant to this
Agreement is issued by the Letter of Credit Bank on behalf of
all of the Banks. Each Bank (other than FNBB) absolutely,
unconditionally and irrevocably agrees to reimburse the Letter
of Credit Bank in an amount equal to such Bank's Commitment
Percentage of each drawing under any Letter of Credit made in
accordance with this 1.8 and to be responsible for its
Commitment Percentage of all liabilities incurred by
the Letter of Credit Bank in respect of each Letter of
Credit opened or extended by the Letter of Credit Bank
for the account of the Company pursuant to this Agreement.
The obligations of the Banks hereunder are several and the
failure of any Bank to fulfill its obligations shall not result
in any Bank becoming obligated to advance more than its
Commitment Percentage of Loans hereunder.
(f) Each Bank shall, and hereby absolutely,
unconditionally and irrevocably agrees, to contemporaneously
provide to the Letter of Credit Bank, in funds immediately
available to the Letter of Credit Bank, such Bank's
Commitment Percentage of the funds necessary to pay each
draft drawn under a Letter of Credit.
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(g) Each Bank agrees with the Letter of Credit Bank
and the other Banks (other than the Letter of Credit Bank)
that its obligations to provide to the Letter of Credit Bank
its Commitment Percentage of the amount of any draft drawn
under any Letter of Credit shall be absolute, irrevocable
and unconditional and further agrees that such obligations
shall not be affected in any way by any intervening
circumstances occurring before or after the making of such
payment by the Letter of Credit Bank pursuant to any Letter
of Credit, including without limitation:
(i) any modification or amendment of, or
any consent, waiver, release or forbearance with respect to
any of the terms of this Agreement or any other
instrument or document referred to herein;
(ii)any other act or omission to act of any kind
by the Letter of Credit Bank;
(iii)the existence of any Default or Event of
Default;
(iv)any change of any kind whatsoever in
the financial position or creditworthiness of the Company or
any other Person.
2. DEFINITIONS. The following terms shall have
the meanings respectively assigned to them in this 2.
Agent. The First National Bank of Boston acting as
agent for the Banks.
Amortizing Notes. See 1.2.
Assignment and Acceptance. See 9.
Banks. See preamble.
Base Rate. See 1.2.
Business Day. Any day on which banks in
Boston, Massachusetts are required to be open for the
transaction of normal banking business and, in addition, in
connection with any transaction relating to the LIBO Rate, any
day on which banks in London, England are also open for the
transaction of normal banking business.
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Closing Date. The first date on which all of
the conditions set forth in 4 have been satisfied.
Commitment. With respect to each Bank, the amount
equal to such Bank's Commitment Percentage of the Commitment
Amount.
Commitment Amount. See 1.1.
Commitment Percentage. With respect to each Bank,
the percentage set forth beside its name below as such
Bank's percentage of the aggregate Commitments of all of the
Banks:
Bank Percentage
____ __________
FNBB 100%
Company. See preamble.
Consolidated. As applied to any term used in
this agreement, the relevant figures for the Company
and its Consolidated Subsidiaries on a basis determined in
accordance with generally accepted accounting principles after
eliminating all intercompany items and minority interests.
Consolidated Subsidiary. Any present or
future corporation or other entity (other than Yuasa-Ionics
Co., Ltd., a corporation organized under the laws of Japan)
more than fifty percent (50%) of the shares of stock or
other interests each (however designated) having ordinary
voting power for the election of a majority of the members of
the board of directors or other governing body of such
corporation or other interests (other than stock having such
power only by reason of the happening of a contingency) shall at
the time be owned by the Company or by one or more subsidiaries
or by the Company and one or more subsidiaries.
Unconsolidated subsidiary means a subsidiary which is not
consolidated for financial reporting purposes.
Current Assets, Current Liabilities and Working
Capital. Respectively, the Current Assets, Current
Liabilities and Working Capital of the Company and
its Consolidated Subsidiaries, determined in accordance with
generally accepted accounting principles.
Default. Any event described in 6 hereof.
Delinquent Bank. See 8.5(c).
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Eligible Assignee. Any commercial bank or other
financial institution, including without limitation, any
insurance company, savings bank or savings and loan association.
Environmental Laws. 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,
the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended ("CERCLA"), the Superfund
Amendments and Reauthorization Act of 1986, the Federal Clean
Water Act, the Federal Clean Air Act, the Toxic Substances
Control Act or any other federal, state or local statute,
regulation, ordinance, order, or decree, or common law,
whether in existence now or hereafter enacted, and as such may
be amended from time to time, relating to health, safety or
the environment.
Equity Distribution. The payment of cash dividends
on any class of capital stock and any other distribution
or payment on account of or in redemption, retirement or
purchase of such capital stock; provided, however, that
the term "Equity Distribution" does not include the issuance,
delivery or distribution by a corporation of shares of its
common stock pro rata to its existing stockholders nor does
the term include the sale or exchange by the Company of
shares of its common stock made in return for cash or other
assets, tangible or intangible.
Eurodollar Loan(s). That portion of any Loans made
hereunder, the interest rate on which is calculated by
reference to the LIBO Rate in accordance with 1.2.1 hereof.
Event of Default. See 6.
FNBB. The First National Bank of Boston in its
individual capacity.
Hazardous Materials. Any hazardous waste, as defined
by 42 U.S.C. 6903(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 substance, hazardous
materials, oil, or other chemicals or substances regulated by
any Environmental Laws.
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Indebtedness. All obligations, contingent or
otherwise, which in accordance with generally accepted
accounting principles should be reflected in the obligor's
balance sheet as liabilities and all guarantees, endorsements
and other contingent obligations, direct or indirect, in
respect of Indebtedness of others whether or not reflected
in said balance sheet (other than guarantees and endorsements
made in connection with items deposited for collection in the
ordinary course of business, and other than federal, state and
foreign income taxes, the payment of which has been
deferred in accordance with generally accepted accounting
principles).
Interest Period. The period during which the basis
for computing interest, selected pursuant to 1.2.1 hereof, is
to remain in effect, which, as to the LIBO Rate basis, shall be
a period of one (1), two (2), three (3), or six (6) months, and
which as to the Money Market Rate basis, shall be a period of
seven (7), thirty (30), ninety (90) or one hundred eighty
(180) days.
Letter of Credit. See 1.8(a).
Letter of Credit Bank. FNBB.
Loan Documents. This Agreement, the Notes, any
Letters of Credit and any other documents and instruments
executed and delivered in connection with this Agreement.
Loan Notes. See 1.2.
Loans. See 1.1.
LIBO Prepayment Charge. An amount equal to the
product of (i) the difference between (A) the LIBO Rate in
effect during an Interest Period during which all or any
portion of any Note shall be prepaid voluntarily and (B) the
LIBO Rate which would have been quoted (on the amount so prepaid
and for the remaining portion of such Interest Period) by the
Agent to the Company had the date of such prepayment been a
Rate-Fixing Date, times (ii) the amount so prepaid, times (iii)
a fraction the numerator of which is the number of days in the
remaining portion of such Interest Period and the denominator
of which is three hundred and sixty (360).
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LIBO Rate. The annual rate of interest
determined by each Bank at or about 11:00 A.M., London Time,
on the Rate-Fixing Day prior to the first day of any Interest
Period, as being the rate of interest at which deposits of
United States Dollars could be obtained by such Bank in the
London inter-bank foreign currency deposits market, at
the time of determination and in accordance with the usual
practice in such market, for delivery on the first day of
such Interest Period and for the number of days comprised
therein, in amounts equal (as nearly as may be) to the
portion of the unpaid principal of the Eurodollar Loan(s) to
be outstanding on the first day of such Interest Period.
Majority Banks. As of any date, the Banks holding
at least fifty-one percent (51%) of the outstanding
principal amount of the Notes on such date; and if no such
principal is outstanding, the Banks whose aggregate Commitments
constitute at least fifty-one percent (51%) of the Commitment
Amount.
Maximum Drawing Amount. With respect to any Letter
of Credit, the maximum amount which the beneficiary may
draw under such Letter of Credit, as such amount may be
reduced from time to time pursuant to the terms of such
Letter of Credit.
Money Market Loan(s). That portion of any Loans
made hereunder, the interest rate on which is calculated
by reference to the Money Market Rate in accordance with 1.2.1
hereof.
Money Market Prepayment Charge. An amount equal to
the product of (i) the difference between (A) the Money
Market Rate in effect during an Interest Period during which
all or any portion of any Note shall be prepaid voluntarily and
(B) the Money Market Rate which would have been quoted (on
the amount so prepaid and for the remaining portion of
such Interest Period) by the Agent to the Company had the date
of such prepayment been a Rate-Fixing Date, times (ii) the
amount so prepaid, times, (iii) a fraction the numerator of
which is the number of days in the remaining portion of such
Interest Period and the denominator of which is three hundred
and sixty (360).
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Net Income. For any period, the consolidated after
tax net income or net loss the Company and its
Consolidated Subsidiaries as determined in accordance with
generally accepted accounting principles applied on a basis
consistent with the financial statements referred to in 3.4
(except for changes concurred with by the Company's
independent public accountants) minus (a) the aggregate of any
extraordinary or non-recurring credits included in such
determination plus (b) any extraordinary or non-recurring
charges and (c) the aggregate of all debits made to retained
earnings during the period other than dividends,
distributions and transfers to capital accounts (including
currency translation adjustments).
Notes. The Loan Notes and the Amortizing Notes.
Obligations. All indebtedness, obligations and
liabilities of the Company to any of the Banks and the Agent,
individually or collectively, existing on the date of this
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 Agreement or any of the other Loan Documents or in
respect of any of the Loans or any of the Notes, Letters of
Credit or other instruments at any time evidencing any
thereof.
Original Credit Agreement. See preamble.
Person. Any individual, corporation, partnership,
trust, unincorporated association, business or other legal
entity, and any government or any governmental agency or
political subdivision thereof.
Property. All properties owned or operated by
the Company.
Rate-Fixing Date. Any Business Day on which the
Company is permitted or required to select the basis for
interest calculations under any Note.
Register. See 9.3.
Release. As specified in the Comprehensive
Environmental Response, Compensation and Liability Act of
1980, 42 U.S.C. 9601 et seq. ("CERCLA") and the term
"Disposal" (or "Disposed") shall have the meaning specified
in the Resource Conservation and Recovery Act of 1976, 42
/85
U.S.C. 6901 et seq. ("RCRA") and regulations
promulgated thereunder; provided, that in the event either
CERCLA or RCRA is amended so as to broaden the meaning of any
term defined thereby, such broader meaning shall apply as of
the effective date of such amendment and provided further, to
the extent that the laws of a state wherein the property lies
establishes a meaning for "Release" or "Disposal" which
is broader than specified in either CERCLA or RCRA, such broader
meaning shall apply.
Reserve Charge. An amount equal to the product of
(i) the outstanding principal amount of the Eurodollar
Loans hereunder times (ii) the remainder of (a) the LIBO
Rate, expressed as a decimal, divided by the remainder of one
minus the Reserve Rate, minus (b) the LIBO Rate; times (iii)
the fraction, the numerator of which shall be one and
the denominator of which shall be three hundred and sixty (360).
Reserve Rate. For purposes relating to the
computation of the Reserve Charge, the rate, expressed as a
decimal at which any Bank would be required to maintain
reserves under Regulation D of the Board of Governors of the
Federal Reserve System (or any subsequent or similar
regulation relating to such reserve requirements) against
"Eurocurrency liabilities" (as such term is defined in
Regulation D) if such liabilities were outstanding.
Tangible Net Worth. The aggregate book value of
the consolidated assets of the Company and its
Consolidated Subsidiaries (after deduction therefrom of all
applicable reserves and allowances) minus the sum of (a) the
consolidated liabilities of the Company and its Consolidated
Subsidiaries and (b) the net book value of the Company's
investments in and loans, advances and extensions of credit
to Unconsolidated Subsidiaries, goodwill, patents,
franchises, trademarks and trade names, research and
development expenses and similar intangibles, all
determined in accordance with generally accepted accounting
principles consistent with those followed in the preparation of
the financial statements referred to in 3.4, (except for changes
concurred with by the Company's independent public
accountants).
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Working Capital. An amount equal to total current
assets less total current liabilities. For purposes of
this Agreement, "current liabilities" will not include
outstanding Loans under this Agreement.
All terms of an accounting character not
specifically defined herein shall have the meanings assigned
thereto by generally accepted accounting principles.
3. REPRESENTATIONS AND WARRANTIES. The Company
represents and warrants to the Banks and the Agent that:
3.1. Corporate Authority. The Company
and each Consolidated Subsidiary (i) is a corporation duly
organized, existing and in good standing under the laws of the
state or foreign country of its incorporation, (ii) has all
requisite corporate power to own its property and conduct its
business as now conducted and as presently contemplated and
(iii) is in good standing as a foreign corporation and is duly
authorized to do business in each jurisdiction where the
nature of its properties or its business requires such
qualification and where the failure to so qualify would,
individually or in the aggregate, have a material adverse
effect on the business, financial condition or results of
operations of the Company and its Consolidated Subsidiaries
taken as a whole. The execution, delivery and performance
of this Agreement and the transactions contemplated hereby
are within the corporate authority of the Company, have
been authorized by proper corporate proceedings and will not
contravene any provision of law, its articles of organization
or by-laws or any other agreement, instrument or
undertaking binding upon the Company or any Consolidated
Subsidiary.
3.2. Governmental Approvals. The execution,
delivery and performance of this Agreement by the Company
and the transactions between the parties hereto contemplated
hereby do not require any approval or consent of, or filing
with, any governmental agency or authority, except such, if
any, as may be required by the Banks.
3.3. Title to Properties; Absence of Liens.
The Company and each Consolidated Subsidiary has good and
valid title to all properties, assets and rights of every name
and nature now purported to be owned by it and, except as
listed and described on Schedule 3.3 attached hereto, all of
said properties, assets and rights are free from all
defects, liens, charges and encumbrances whatsoever, except
those of a nature permitted by 5.4.
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3.4. Financial Statements. The Company has
furnished to the Agent a balance sheet as at December 31,
1991 and related statements of income and cash flow of the
Company for the fiscal year then ended, each certified by
Coopers & Xxxxxxx. The balance sheet and statements of income
and cash flow so furnished (i) have been prepared in
conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods
specified and (ii) present fairly the financial position of
the Company as at the dates thereof.
3.5. Changes. Since the date of the
financial statements described in 3.4, there has been no
material change in the assets, liabilities, financial
condition or business of the Company or any Consolidated
Subsidiary other than changes in the ordinary course of
business, the effect of which has not been in any case, or
in the aggregate, materially adverse. Since the dates of
the financial statements described in 3.4 the Company has
neither authorized, agreed to make nor made any Equity
Distribution.
3.6. Taxes. The Company and each Consolidated
Subsidiary has filed all federal and state tax
returns required to be filed and all taxes, assessments and
other governmental charges due upon any of such companies have
been fully paid and no extensions of time of payment have
been requested. Each of the Company and its
Consolidated Subsidiaries has paid or recorded on its
books reserves adequate for the payment of all federal and
state income tax liabilities.
3.7. Litigation. There is no litigation
pending, or, to the knowledge of its officers, threatened
against the Company or any Consolidated Subsidiary which will
substantially adversely affect the ability of the Company to
perform its obligations hereunder.
3.8. Environmental Compliance. The Company has
taken all necessary steps to investigate the past and present
condition and usage of the Property and the operations
conducted thereon and, based upon such diligent investigation,
has determined that:
/88
(a) none of the Company, its
Consolidated Subsidiaries or any operator of the Property or any
operations thereon is in violation, or alleged violation,
of any Environmental Law, which violation would have a
material adverse effect on the environment or the business,
assets or financial condition of the Company or any of its
Consolidated Subsidiaries;
(b) except as set forth on Schedule 3.8
attached hereto, neither the Company nor any of its
Consolidated Subsidiaries has received notice from any
third party including, without limitation: any federal, state
or local governmental authority, (i) that any one of them
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 Materials which any one of them 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 Company or any of
its Consolidated Subsidiaries 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 Materials;
(c) except for violations with potential
liability of less than $1,000,000 and except as set forth on
Schedule 3.8 attached hereto: (i) no portion of the Property
has been used for the handling, processing, storage or
disposal of Hazardous Materials except in accordance with
applicable Environmental Laws; and no underground tank
or other underground storage receptacle for Hazardous
Materials is located on any portion of the Property; (ii) in
the course of any activities conducted by the Company, its
Consolidated Subsidiaries or operators of its properties,
no Hazardous Materials have been generated or are being
used on the Property 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 Materials on, upon, into or from the properties of the
/89
Company or its Consolidated Subsidiaries, which releases would
have a material adverse effect on the value of any of the
Property or adjacent properties or the environment; (iv) to
the best of the Company's knowledge, there have been no releases
on, upon, from or into any real property in the vicinity of any
of the Property 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, the
Property; and (v) in addition, any Hazardous Materials that
have been generated on any of the Property have been
transported offsite only by carriers having an identification
number issued by the EPA, treated or disposed of only by
treatment or disposal facilities maintaining valid
permits as required under applicable Environmental Laws,
which transporters and facilities have been and are, to the
best of the Company's knowledge, operating in compliance
with such permits and applicable Environmental Laws; and
(d) none of the Property is or shall be subject to
any applicable environmental clean-up responsibility law or
environmental restrictive transfer law or regulation, by
virtue of the transactions set forth herein and contemplated
hereby.
4. CONDITIONS TO LOANS. The obligation of the Banks
to effect the amendment and restatement of the Original
Credit Agreement and to make Loans hereunder is conditioned upon
4.1. in the case of all borrowings:
(a) receipt by the Agent of at least
three (3) Business Days' prior written notice from the
Company of the proposed date and amount of the borrowing; and
(b) the fact that at the completion
of the borrowing, no Default specified in 6 and no event which,
with the giving of notice or lapse of time or both, would become
a Default will have occurred and be continuing; and delivery to
the Agent of the certificate to that effect signed by an
authorized officer of the Company.
4.2. in the case of the effectiveness of the
amendment and restatement of the Original Credit Agreement and
the first borrowing thereafter, (a) receipt by the Agent of an
opinion addressed to FNBB individually and as Agent of Xxxxxxx
Xxxx, general counsel for the Company, in form, scope and
substance satisfactory to the Agent, as to (i) the matters
referred to in 3.1 and 3.2, (ii) the validity and
/90
enforceability of the Company's obligations hereunder and under
the Notes except as limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or
affecting generally the enforcement of creditors' rights, and
(iii) such other matters as the Banks or the Agent may
reasonably request; and (b) the Company shall have paid all
commitment fees under the Original Credit Agreement accrued to
the Closing Date.
5. COVENANTS. During the term of this Agreement
unless compliance shall have been waived in writing by the
Banks, the Company agrees that:
5.1. Financial Statements. It will furnish
to the Agent:
(a) within 90 days after the end of each
fiscal year the Consolidated balance sheet of the Company as
at the end of, and the related Consolidated statements of income
and cash flow for such year certified by independent
certified public accountants of nationally recognized standing;
(b) within 45 days after the end of each of
the first three fiscal quarters of each fiscal year of
the Company, the Consolidated balance sheet as at the end of,
and the related Consolidated statements of income and cash
flow, in each case in the form required under 5.1(a), for
such three month period in each case certified by the
principal financial officer of the Company, subject, however,
to year-end audit adjustment; and
(c) from time to time such other financial data
and information as any Bank or the Agent may reasonably request.
The financial statements referred to above in
this 5.1 shall be prepared in accordance with generally
accepted accounting principles, such principles to be
consistent with those followed in the preparation of the
financial statements referred to in 3.4, except as otherwise
concurred with by the Company's independent public accountants.
5.2. Taxes. It will pay or cause to be paid all
taxes, assessments or governmental charges on or against it or
any of its Consolidated Subsidiaries or its or their properties
prior to the time when they become delinquent; provided that
this covenant shall not apply to any tax, assessment or
charge which is being in good faith contested and with
respect to which adequate reserves have been established and
are being maintained.
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5.3. Guaranties. It will not and will not
permit any of its Consolidated Subsidiaries to endorse,
guarantee or become surety for the obligations of any
person, firm or corporation except that (i) the Company may
guarantee without limitation the obligations of any of
its Consolidated Subsidiaries; (ii) the Company and its
Consolidated Subsidiaries may guarantee the obligations of any
person, firm or corporation, but the aggregate dollar
amount of all obligations guaranteed under the permissive
grant of this clause (ii) shall not exceed at any one time
outstanding U.S. $2,000,000; (iii) the Company and
its Consolidated Subsidiaries may guarantee the
obligations of any firm or corporation in which the Company has
an ownership interest; and (iv) the Company and its
Consolidated Subsidiaries may endorse checks for collection
or deposit in the ordinary course of business.
5.4. Negative Pledge. It will not create or
suffer to be created or permit to exist any mortgage,
pledge, lien, security interest or other encumbrance upon
any of its properties or assets or upon the property or
assets of any of its Consolidated Subsidiaries except (i)
liens for taxes or assessments not yet due or whose validity or
amount is being contested in good faith by appropriate
proceedings (unless and until foreclosure, distraint, sale or
any similar proceeding shall have been instituted) and
adequate reserves shall have been established and maintained in
accordance with generally accepted accounting principles,
(ii) real estate mortgages securing indebtedness which is or
was undertaken to purchase the mortgaged real estate and
covering only the real estate so purchased, (iii) security
interests securing indebtedness arising out of the
acquisition of personal property by the Company or a
Consolidated Subsidiary for use in its business or
indebtedness arising out of the acquisition of real
and personal property by the Company in connection with
Industrial Revenue Bonds of the Company purchased by FNBB,
provided that the aggregate principal amount of indebtedness
secured by each security interest may not exceed the
purchase price of the property so acquired, (iv) other
liens and encumbrances incidental to the conduct of its
business or the ownership of its assets which were not
incurred in connection with the borrowing of money or the
obtaining of advances or credit, and which do not in the
aggregate materially detract from the value of its assets
or materially impair the use thereof in the operation of its
business, (v) notes receivable arising from the financing
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of water softener sales, which may be pledged as collateral,
(vi) security interests or mortgages securing indebtedness
which is undertaken in connection with project financings,
provided that the aggregate principal amount of
indebtedness secured by such security interests
or mortgages shall not exceed $20,000,000 at any one
time outstanding, (vii) security interests or mortgages on
the property or assets of any entity acquired by the
Company, provided that the aggregate principal amount of
indebtedness secured by such security interests or mortgages
shall not exceed $5,000,000 at any one time outstanding,
and (viii) renewals, extensions or replacements of any of
the debts underlying said liens or encumbrances referred to in
clauses (ii), (iii), and (iv) above, secured by such
liens or encumbrances at the time of the renewal,
extension or replacement and applying only to the same
property or assets theretofore subject to such liens or
encumbrances.
5.5. Merger and Sale of Assets. It will not,
and will not permit any Consolidated Subsidiary to consolidate
or merge with or into any other corporation and will not sell,
lease, transfer or otherwise dispose of more than ten percent
of its assets other than in the ordinary course of
business; provided, that (i) a Consolidated Subsidiary, or
any other corporation organized under the laws of any state
of the United States of America, may be merged into or
consolidated with the Company, or another Consolidated
Subsidiary if the Company or such Consolidated Subsidiary
shall be the continuing or surviving corporation; (ii) any
corporation (other than the Company) organized under the laws of
any state of the United States of America may be merged
into or consolidated with any Consolidated Subsidiary if
such Consolidated Subsidiary shall be the continuing or
surviving corporation or such other corporation shall
immediately become a Consolidated Subsidiary; (iii) any
Consolidated Subsidiary may sell, lease, transfer or otherwise
dispose of its assets to the Company; and (iv) no
merger, consolidation, sale, lease, transfer or other
disposition shall be permitted under (i), (ii) or (iii)
above unless immediately after giving effect thereto, the
Company shall be in compliance with all other requirements in
this Agreement.
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5.6. Net Worth. The Company will not permit
Consolidated Tangible Net Worth to be less than (i)
$150,000,000 plus seventy percent (70%) of the
aggregate annual increases in Consolidated Tangible Net Worth
from that existing on June 30, 1992 or (ii) 66 2/3% of
Consolidated Indebtedness, whichever of (i) or (ii) is the
greater.
5.7. Working Capital. The Company will not
permit Consolidated Working Capital to be less than $30,000,000.
5.8. Permitted Indebtedness. The Company will
not nor will it permit any Consolidated Subsidiary to, create,
assume or have outstanding Indebtedness owed by it for money
borrowed other than the following:
(a) Indebtedness arising from the
Company's financing of consumer credit sales of its water
softeners and related products not exceeding in the aggregate
at any one time outstanding, the lesser of $12,000,000 or
seventy-five percent (75%) of the total unpaid amount due on
customers' notes given in such sales transactions;
(b) Indebtedness arising in
connection with Industrial Revenue Bonds of the Company
purchased by FNBB;
(c) Purchase money Indebtedness arising
from the acquisition of real or personal property for use
in the business of the Company or of any Consolidated
Subsidiary;
(d) Indebtedness arising from the
Company's financing (whether by sale or by lease) of its water
coolers;
(e) Indebtedness of the Company or any
of its Consolidated Subsidiaries other than that referred
to in clauses (a), (b), (c) and (d) above, owed to a
bank, corporation, firm or other person not exceeding in
the aggregate amount at any one time outstanding the principal
sum of $45,000,000; and
(f) Indebtedness owed to the Banks
under this Agreement and the Notes.
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5.9. Sale and Leaseback. The Company will
not, nor will it permit any Consolidated Subsidiary to,
sell or transfer any of its properties with the intention of
taking back a lease of any such property, without the prior
approval of the Banks, such approval not to be unreasonably
withheld. Notwithstanding the foregoing, the Company shall
not be required to obtain the prior approval of the Banks if
the net book value of all property to be sold or transferred
does not exceed $1,000,000 in aggregate amount in any fiscal
year.
5.10. Environmental Matters.
5.10.1. Indemnification. The Company
covenants and agrees that it will indemnify and hold the Banks
harmless from and against any and all claims, expense,
damage, loss or liability incurred by the Agent or any of the
Banks (including all costs of legal representation incurred by
the Agent or any of the Banks) resulting from (a) any Release
or threatened Release of Hazardous Materials on the
Property, (b) any violation of any Environmental Laws with
respect to conditions at the Property or the operations
conducted thereon, or (c) the investigation or remediation of
offsite locations at which the Company or its predecessors are
alleged to have directly or indirectly Disposed of Hazardous
Materials to the extent that such liability arises from such
Disposal by the Company, except any of the foregoing which
result from the gross negligence or willful misconduct of the
indemnified party. It is expressly acknowledged by the Company
that this covenant of indemnification shall survive the
payment of the Loans and shall inure to the benefit of the
Agent, the Banks, and their successors and assigns.
5.10.2. Notice. The Company covenants and
agrees promptly to provide the Agent with written notice: (a)
upon the Company's obtaining knowledge of any violation of
any Environmental Law regarding the Property or the
Company's operations which violation could have a material
adverse effect on the Property or on the Company's
operations; (b) upon the Company's obtaining knowledge of any
potential or known Release, or threat of Release, of any
Hazardous Materials at, from, or into the Property which it
reports in writing or is reportable by it in writing to any
governmental authority or which could materially affect the
value of the Property; (c) upon the Company's receipt of any
notice of violation of any Environmental Laws or of any
Release or threatened Release of Hazardous Materials,
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including a notice or claim of liability or potential
responsibility from any third party (including without
limitation any federal, state or local governmental
officials) and including notice of any formal inquiry,
proceeding, demand, investigation or other action with
regard to (A) the Company's or any person's operation of
the Property, (B) contamination on, from or into the Property,
or (C) investigation or remediation of offsite locations at
which the Company or its predecessors are alleged to have
directly or indirectly Disposed of Hazardous Materials; or
(d) upon the Company's obtaining knowledge that any expense or
loss has been incurred by such governmental authority in
connection with the assessment, containment, removal or
remediation of any Hazardous Materials with respect to which the
Company may be liable or for which a lien may be imposed on the
Property.
5.10.3. Response Actions. The Company
covenants and agrees that if any Release or Disposal of
Hazardous Materials shall occur or shall have occurred on
the Property, the Company will cause the prompt containment
and removal of such Hazardous Materials and remediation of
the Property as necessary to comply with all Environmental
Laws or to preserve the value of the Property. All such
response actions shall commence within 90 days of providing
notice to the Agent of such Release or Disposal pursuant to
5.10.2 hereof.
6. DEFAULTS. If any of the following events
shall occur:
6.1. if the Company shall fail to pay any
installment of principal or interest of any Note in any case on
or before the tenth day following the due date thereof;
6.2. if the Company shall fail to perform any
covenant contained in 5.3, 5.4, 5.5, 5.8, 5.9 or 5.10 hereof;
6.3. if the Company shall fail to perform any
covenant contained in 5.6 or 5.7 for 30 days after the
commencement date of its failure to perform;
6.4. if the Company shall fail to perform any
term, covenant or agreement herein contained (other than
those specified in 6.1, 6.2 or 6.3 above) for 30 days
after written notice of default has been given to the Company by
the Agent;
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6.5. if any representation or warranty of the
Company in 3 hereof or in any certificate delivered hereunder
shall prove to have been false in any material respect upon the
date when made;
6.6. if the Company or any Consolidated
Subsidiary shall fail to pay at maturity, or within any
applicable period of grace, any obligation for borrowed monies
or advances, or fail to observe or perform any term,
covenant or agreement contained in any agreement by which it is
bound, evidencing or securing borrowed monies or advances, for
such period of time as would, or would have permitted
(assuming the giving of appropriate notice if required) the
holder or holders thereof or of any obligations issued
thereunder to accelerate the maturity thereof, unless the
same shall have been waived; or
6.7. if the Company or any Consolidated
Subsidiary shall admit in writing of its inability to pay its
debts; or suffer a receiver or trustee for all or substantially
all of its property to be appointed and, if appointed
without its consent, not to be discharged within 60 days;
or suffer proceedings under any law relating to bankruptcy,
insolvency or the reorganization or relief of debtors to be
instituted by or against it and, if contested by it, not to be
dismissed or stayed within 60 days; or suffer any judgment in
excess of $1,000,000 to be entered against it, or any writ of
attachment or execution or any similar process to be issued
or levied against a substantial part of its property, which
judgment, writ or process is not discharged, released, stayed,
bonded, or vacated within 60 days after its entry, issue or
levy;
then, and in every such event described above in 6 (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), if such Default continues, the Agent may, and
upon the request of the Majority Banks shall, by notice in
writing to the Company, terminate the Commitment of the
Banks and declare all amounts owing with respect to the Notes
held by the Banks to be, and they shall thereupon forthwith
become, due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly
waived by the Company; provided that in the event of any
Event of Default specified in 6.7, all such amounts shall
become immediately due and payable automatically and without
any requirement of notice from the Agent or any Bank.
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7. SETOFF.
Any deposits or other sums at any time credited by or
due from any of the Banks to the Company and any securities
or other property of the Company in the possession of any of
the Banks may at all times be held and treated as
collateral security for the payment of the Notes and any and
all other liabilities, direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter
arising, of the Company to any of the Banks. Regardless of
the adequacy of any collateral, any deposits or other sums
credited by or due from any of the Banks to the Company may be
applied to or set off against such liabilities at any time.
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
Company to such Bank, other than Indebtedness evidenced by
the Notes held by 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, and (b) if
such Bank shall receive from the Company, whether by
voluntary payment, exercise of the right of setoff,
counterclaim, cross action, enforcement of the claim
evidenced by the Notes held by such Bank by proceedings
against the Company 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 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 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, 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.
8. THE AGENT.
8.1. Authorization. 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
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incident thereto, provided that no duties or
responsibilities not expressly assumed herein or therein
shall be implied to have been assumed by the Agent. The
relationship between the Agent and the Banks is and shall be
that of agent and principal only, and nothing contained in
this Agreement or any of the other Loan Documents shall be
construed to constitute the Agent as a trustee for any Bank.
8.2. 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 Company.
8.3. 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.
8.4. No Representations. The Agent shall
not be responsible for the execution or validity or
enforceability of this Agreement, the Notes, any of the other
Loan Documents or any instrument at anytime 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 collectibility 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 or on
behalf of the Company, 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. The Agent
shall not be bound to ascertain whether any notice, consent,
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waiver or request delivered to it by the Company 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 Company or any of its Subsidiaries. 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.
8.5. Payments.
(a) A payment by the Company 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.
(b) 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.
(c) Notwithstanding anything to the
contrary contained in this Agreement or any of the other
Loan Documents, any Bank that fails (i) to make available to
the Agent its pro rata share of any Loan or (ii) to comply
with the provisions of 7 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
to 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
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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
Company, whether on account of outstanding Loans, interest,
fees or otherwise, to the remaining nondelinquent
Banks for application to, and reduction of, their respective
pro rata shares of all outstanding Loans. 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. 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 of the
nondelinquent Banks, the Banks' respective pro rata shares
of all outstanding Loans have returned to those in
effect immediately prior to such delinquency and without
giving effect to the nonpayment causing such delinquency.
8.6. Holders of Notes. The Agent may deem and
treat the payee of any Note as the absolute owner 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.
8.7. 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 Company as required by 10.6), 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.
8.8. 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, as
it would have were it not also the Agent.
8.9. Resignation. The Agent may resign atany
time by giving sixty (60) days' prior written notice thereof
to the Banks and the Company. 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
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Company. 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.
8.10. 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 8.10 it shall promptly
notify the other Banks of the existence of such Default or
Event of Default.
8.11. Documents. The Agent will forward to each
Bank, promptly after the Agent's receipt thereof, a copy of
each document furnished to the Agent for such Bank hereunder.
9. ASSIGNMENT AND PARTICIPATION.
9.1. Conditions to Assignment by Banks.
Except as provided herein, each Bank may assign to one or more
Eligible Assignees all or a portion of its interests,
rights and obligations under this Agreement (including all or
a portion of its Commitment Percentage and Commitment and
the same portion of the Loans at the time owing to it) and
the Notes held by it; provided that (a) each of the Agent
and the Company shall have given its prior written consent
to such assignment, which consent, in the case of the
Company, will not be unreasonably withheld, (b) each such
assignment shall be of a constant, and not a varying,
percentage of all the assigning Bank's rights and
obligations under this Agreement, (c) each assignment shall be
in an amount that is a whole multiple of $5,000,000, and (d)
the parties to such assignment shall execute and deliver to the
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Agent, for recording in the Register (as hereinafter
defined), an Assignment and Acceptance, substantially in the
form of Exhibit C hereto (an Assignment and Acceptance),
together with any Notes subject to such assignment. Upon
such execution, delivery, acceptance and recording, 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 and
upon payment to the Agent of the registration fee referred to in
9.3, be released from its obligations under this Agreement.
9.2. Certain Representations and Warranties;
Limitations; Covenants. By executing and delivering
an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and
the other parties hereto as follows: (a) other than the
representation and warranty that it is the legal and
beneficial owner of the interest being assigned thereby free
and clear of any adverse claim, the assigning Bank makes no
representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made
in or in connection with this Agreement or the execution,
legality, validity, enforceability, genuineness, sufficiency
or value of this Agreement, the other Loan Documents or any
other instrument or document furnished pursuant hereto; (b)
the assigning Bank makes no representation or warranty and
assumes no responsibility with respect to the financial
condition of the Company and its Consolidated Subsidiaries or
any other Person primarily or secondarily liable in respect
of any of the Obligations, or the performance or observance by
the Company and its Consolidated Subsidiaries or any other
Person primarily or secondarily liable in respect of any
of the Obligations of any of their obligations under this
Agreement or any of the other Loan Documents or any other
instrument or document furnished pursuant hereto or
thereto; (c) such assignee confirms that it has received a
copy of this Agreement, together with copies of the most
recent financial statements referred to in 5.1 and such other
documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such
Assignment and Acceptance; (d) such assignee will,
independently and without reliance upon the assigning Bank, the
Agent or any other Bank and based on such documents and
information as it shall deem appropriate at the time,
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continue to make its own credit decisions in taking or not
taking action under this Agreement; (e) such assignee
represents and warrants that it is an Eligible Assignee; (f)
such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers
under this Agreement and the other Loan Documents as are
delegated to the Agent by the terms hereof or thereof,
together with such powers as are reasonably incidental
thereto; (g) such assignee agrees that it will perform in
accordance with their terms all of the obligations that by
the terms of this Agreement are required to be performed
by it as a Bank; and (h) such assignee represents and
warrants that it is legally authorized to enter into such
Assignment and Acceptance.
9.3. Register. The Agent shall maintain a copy of
each Assignment and Acceptance delivered to it and a register
or similar list (the Register) for the recordation of the
names and addresses of the Banks and the Commitment Percentage
of, and principal amount of the Revolving Credit Loans owing
to, the Banks from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error,
and the Company, the Agent and the Banks may treat each Person
whose name is recorded in the Register as a Bank hereunder for
all purposes of this Agreement. The Register shall be
available for inspection by the Company and the Banks at any
reasonable time and from time to time upon reasonable prior
notice. Upon each such recordation, the assigning Bank agrees
to pay to the Agent a registration fee in the sum of $2,000.
9.4. New Notes. Upon its receipt of an Assignment
and Acceptance executed by the parties to such assignment,
together with each Note subject to such assignment, the Agent
shall (a) record the information contained therein in
the Register, and (b) give prompt notice thereof to the
Company and the Banks (other than the assigning Bank). Within
five (5) Business Days after receipt of such notice, the
Company, at its own expense, shall execute and deliver to the
Agent, in exchange for each surrendered Note, a new Note to the
order of such Eligible Assignee in an amount equal to the
amount assumed by such Eligible 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 the assigning Bank in an amount equal to
the amount retained by it hereunder. Such new Notes shall
provide that they are replacements for the surrendered Notes,
shall be in an aggregate principal amount equal to the aggregate
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principal amount of the surrendered Notes, shall be dated the
effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of the assigned Notes.
Within five (5) days of issuance of any new Notes pursuant to
this 9.4, the Company shall deliver an opinion of counsel,
addressed to the Banks and the Agent, relating to the due
authorization, execution and delivery of such new Notes and
the legality, validity and binding effect thereof, in form
and substance satisfactory to the Banks. The surrendered
Notes shall be cancelled and returned to the Company.
9.5. Participations. Each Bank may sell
participations to one or more banks or other entities in all or
a portion of such Bank's rights and obligations under this
Agreement and the other Loan Documents; provided that (a)
each such participation shall be in an amount of not
less than $5,000,000, (b) any such sale or participation
shall not affect the rights and duties of the selling Bank
hereunder to the Company and (c) 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 any Loans, extend the term or
increase the amount of the Commitment of such Bank as it
relates to such participant, reduce the amount of any commitment
fees to which such participant is entitled or extend any
regularly scheduled payment date for principal or interest.
9.6. Disclosure. The Company agrees that any
Bank may disclose information obtained by such Bank pursuant
to this 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, (b) not to disclose such information to a third
party and (c) not to make use of such information for purposes
of transactions unrelated to such contemplated assignment or
participation.
9.7. Miscellaneous Assignment Provisions. If
any assignee Bank is not incorporated under the laws of the
United States of America or any state thereof, it shall, prior
to the date on which any interest or fees are payable
hereunder or under any of the other Loan Documents for its
account, deliver to the Company and the Agent certification as
to its exemption from deduction or withholding of any United
States federal income taxes. Anything contained in this 9 to
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the contrary notwithstanding, any Bank may at any time pledge
all or any portion of its interest and rights under this
Agreement (including all or any portion of its Notes) to any
of the twelve Federal Reserve Banks organized under 4 of the
Federal Reserve Act, 12 U.S.C. 341. No such pledge or
the enforcement thereof shall release the pledgor Bank from
its obligations hereunder or under any of the other
Loan Documents.
9.8. Assignment by the Company. The Company
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.
10. MISCELLANEOUS.
10.1. Notices. All written notices hereunder
to any party hereto shall be deemed to have been given when
properly deposited in the mails or delivered to the telegraph
company addressed to such party at its address given above or
at any other address specified in writing to the person giving
such notice. All written notices shall be sent prepaid
by certified mail, return receipt required, or by
telegraph. Notwithstanding the foregoing, the written notice
called for in 1.2.1 hereof is effective only upon receipt by
the Agent.
10.2. Term of Agreement. This Agreement shall
continue in force and effect so long as any Commitment, or any
Note or any obligation of the Company for any interest or
other amounts owing hereunder shall be outstanding.
10.3. No Waivers. No failure or delay by any
of the Banks in exercising any right, power, or privilege
hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right,
power or privilege.
10.4. Massachusetts Law. This Agreement and
each Note shall be deemed to be a contract made under seal and
shall be construed in accordance with and governed by the laws
of the Commonwealth of Massachusetts.
10.5. Computation of Interest. Interest
shall be computed on the basis of a year of 360 days and paid
for the actual number of days for which due. If the due date
for any payment of principal is extended by operation of law,
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interest shall be payable for such extended time. If any
payment required by this Agreement becomes due on a day on
which the Agent is required or permitted by law to remain
closed, such payments may be made on the next succeeding day
on which the Agent is open, and such extension shall be
included in computing interest in connection with such payment.
10.6. Expenses. The Company will pay all
reasonable out-of-pocket expenses incurred by the Agent
(including reasonable fees and disbursements of Messrs. Xxxxxxx,
Xxxx & Xxxxx, counsel for the Agent) in connection with
(i) the preparation, review and execution of this Agreement
and all other documents contemplated herein and (ii)
the administration of the loan program contemplated herein.
The Company will pay all reasonable out-of-pocket
expenses incurred by any Bank or the Agent in connection
with the enforcement of any of the provisions hereof.
10.7. Environmental Assessments. After
reasonable notice by the Banks, whether or not an Event of
Default shall have occurred, the Banks may, from time to
time, in their discretion for the purpose of assessing and
ensuring the value of the Property, obtain one or more
environmental assessments or audits of the Property prepared by
a hydrogeologist, an independent engineer or other qualified
consultant or expert approved by the Banks to evaluate or
confirm (i) whether any Hazardous Materials are present in the
soil or water at the Property and (ii) whether the use
and operation of the Property complies with all Environmental
Laws. Environmental assessments may include without
limitation detailed visual inspections of the Property
including, without limitation, any and all storage areas,
storage tanks, drains, dry xxxxx and leaching areas, and the
taking of soil samples, surface water samples and ground
water samples, as well as such other investigations or
analyses as the Banks deem appropriate. If any Event of
Default shall have occurred and be continuing at the time such
assessments or audits are commenced, such environmental
assessments or audits shall be at the sole cost and expense of
the Company, if no Event of Default shall have occurred and be
continuing at such time, such assessments or audits shall be
at the Banks' expense.
10.8. Consents, Amendments, Waivers, Etc.
Except as otherwise expressly provided in this Agreement, any
consent or approval required or permitted by this Agreement to
be given by one or more or all of the Banks may be given, and
any term of this Agreement or of any other instrument related
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hereto or mentioned herein may be amended, and the
performance or observance by the Company of any terms of this
Agreement 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 Company and the written consent of the Majority Banks.
Notwithstanding the foregoing, (i) no amendment, waiver or
consent shall, unless in writing and signed by all of the Banks,
reduce the principal of or interest rate on any Loans, extend
the term or increase the amount of the Commitment of any Bank,
reduce the amount of any commitment fees, extend any regularly
scheduled payment date for principal or interest, or change
the definition of Majority Banks; and (ii) 8 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 any Bank in
exercising any right shall operate as a waiver thereof or
otherwise be prejudicial thereto. No notice to or demand upon
the Company shall entitle the Company to other or further notice
or demand in similar or other circumstances.
10.9. Counterparts. This Agreement may be signed
in any number of counterparts with the same effect as if
the signatures hereto and thereto were upon the same
instrument. Complete sets of counterparts shall be lodged with
the Company and the Banks.
IONICS, INCORPORATED
By: /s/Xxxxxx X. Xxxxxxxxx
Title: Chairman and Chief
Executive Officer
THE FIRST NATIONAL BANK OF BOSTON,
individually and as Agent
By: /s/X.X. Xxxxxxxx
Title: Vice President
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EXHIBIT A
FORM OF LOAN NOTE
$25,000,000 Boston, Massachusetts
For value received, Ionics, Incorporated (the "Maker"), a
Massachusetts corporation, promises to pay to the order of The
First National Bank of Boston (the "Bank") at its head office,
the principal sum of Twenty Five Million Dollars ($25,000,000),
or if less than such principal amount, the aggregate unpaid
principal amount of all Loans made by the Bank to the Maker
pursuant to the Credit Agreement described below, as shown on
the Schedule attached to and made part of this Note, on December
31, 1995 and to pay interest on the unpaid balance hereof at
said office on the first day of each January, April, July and
October from the date hereof until maturity at a rate computed
in accordance with, and to pay such other charges, if any, as
may be required pursuant to, the provisions of the Credit
Agreement described below, as shown on the Schedule attached to
and made xxx of this Note, on December 31, 1995 and to pay
interest on the unpaid balance hereof at said office on the
first day of each January, April, July and October from the date
hereof until maturity at a rate computed in accordance with, and
to pay such other charges, if any, as may be required pursuant
to, the provisions of the Credit Agreement described below.
Overdue principal and interest shall bear interest at a
rate which at all times shall be one percent (1%) above the rate
of interest hereon in effect from time to time compounded
monthly and payable on demand.
This note is the Loan Note issued under and is subject to
the Amended and Restated Credit Agreement dated as of December
31, 1992 ( as amended from time to time, the "Credit Agreement")
among the Maker, the Bank, such other lending institutions as
may become parties thereto from time to time, and The First
National Bank of Boston as Agent, and all capitalized terms used
herein which are not otherwise defined herein have the meanings
assigned to them by the Credit Agreement. Reference is made to
the Credit Agreement for rights as to the prepayment hereof, the
acceleration of the maturity hereof, and the selection of
interest charges payable hereunder.
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Every maker, endorser and guarantor of this Note or of the
obligation represented hereby waives presentment, demand,
notice, protest and all other demands and notices in connection
with the delivery, acceptance, performance, default or
enforcement of this Note, assents to any extension or
postponement of the time of payment of any other indulgence, to
any substitution, exchange or release of collateral and to the
addition or release of any other party or person primarily or
secondarily liable.
IONICS, INCORPORATED
Dated:_______________ By:_________________________
Title
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EXHIBIT B
FORM OF
PROMISSORY NOTE
$______________ Boston, Massachusetts
FOR VALUE RECEIVED, Ionics, Incorporated (the "Maker"), a
Massachusetts corporation, hereby promises to pay to the order
of The First National Bank of Boston (the "Bank"), at its head
office, the principal amount of $__________ in a series of 12
consecutive quarterly installments commencing April 1, 1996, the
first eight (8) of which shall be in the amount of $____________
each and the final four (4) installments of which shall be in
the amount of $___________ each. The Maker agrees to pay
interest from the date hereof on the principal balance from tie
to time outstanding, quarterly in arrears commencing April 1,
1996 and at maturity, at a rate computed in accordance with, and
to pay such other charges, if any, as may be required pursuant
to the provisions of the Credit Agreement described below.
Overdue principal and interest shall bear interest at a
rate which at all times shall be one and one-half percent (1
1/2%) above the rate of interest hereon in effect from time to
time. overdue interest is compounded monthly and overdue
principal and interest are both payable on demand.
This Note is the Amortizing Note issued under a certain
Amended and Restated Credit Agreement dated as of December 31,
1992 (as amended from time to time, the "Credit Agreement")
among the Maker, the Bank, such other lending institutions as
may be come parties thereto from time to time, and The First
National Bank of Boston as Agent, and all capitalized terms used
herein which are not otherwise defined herein have the meanings
assigned to them by the Credit Agreement. Reference is made to
the Credit Agreement for rights as to the prepayment hereof, the
acceleration of the maturity hereof and the selection of
interest charges payable hereunder.
Every maker, endorser and guarantor of this Note or the
obligation represented hereby waives presentment, demand,
notice, protest and all other demands and notices in connection
with the delivery, acceptance, performance, default or
enforcement of this Note, assents to any extension or
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postponement of the time of payment or any other indulgence, to
any substitution, exchange or release of collateral and to the
addition or release of any other party or person primarily or
secondarily liable.
IONICS, INCORPORATED
Dated:______________ By:__________________________
Title:
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EXHIBIT C
FORM OF ASSIGNMENT AND ACCEPTANCE
Dated ____________
Reference is made to the Amended and Restated Credit
Agreement, dated as of December 31, 1992 (as amended and in
effect from time to time, the "Credit Agreement"), among Ionics,
Incorporated (the "Company"), certain lending institutions which
are or may become parties thereto (the "Banks"), and The First
National Bank of Boston, as agent (in such capacity, the
"Agent"), for itself and the Banks. Capitalized terms used
herein and not otherwise defined shall have the meanings
assigned to such terms in the Credit Agreement.
__________________________ (the "Assignor") and
_____________________ ( the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee,
and the Assignee hereby purchases and assumes from the Assignor,
a ____% interest in and to all the Assignor's rights and
obligations under the Credit Agreement relating to the Loans as
of the Effective Date (as hereinafter defined).
2. The Assignor (i) represents that as of the date hereof,
its Commitment Percentage without giving effect to assignments
thereof which have not yet become effective) is ____%, and the
aggregate outstanding balance of its Loans (unreduced by any
assignments thereof which have not yet become effective ) is
$____________; (ii) makes no representation or warranty and
assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the
Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency, or value of the Credit
Agreement or any other instrument or document furnished pursuant
thereto, other than that it is the legal and beneficial owner of
the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (iii) makes no
representation or warranty and assumes no responsibility with
respect to the financial condition of the Company, its
Consolidated subsidiaries or any other Person primarily or
secondarily liable in respect of any of the Obligations, or the
performance or observance by the Company and its Consolidated
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Subsidiaries or any other Person primarily or secondarily liable
in respect of any of the Obligations of any of their obligations
under the Credit Agreement or any other instrument or document
delivered or executed pursuant thereto; and (iv) attaches the
Notes delivered to it under the Credit Agreement and requests
that the Company exchange such Notes for a new Note or Notes
payable to each of the Assignor and the Assignee as follows:
Notes Payable to Amount of
the Order of: Note
[Name of Assignor] [Note ($____)]
[Name of Assignee] [Note ($----)]
3. The Assignee (i) represents and warrants that it is
legally authorized to enter into this Assignment and Acceptance;
(ii) confirms that it has received a copy of the Credit
Agreement and the other Loan Documents, together with copies of
the most recent financial statements delivered pursuant to
Section 5.1 thereof and such other documents and information as
it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (iii)
agrees that it will, independently and without reliance upon the
Assignor, any other Bank or the Agent and based on such
documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not
taking action under the Credit Agreement; (iv) represents and
warrants that it is an Eligible Assignee; (v) appoints and
authorizes the Agent to take such action as agent on its behalf
and to exercise such powers under the Credit Agreement and the
other Loan Documents as are delegated to the Agent by the terms
thereof, together with such powers as are reasonably incidental
thereto; and (vi) agrees that it will perform in accordance with
their terms all the obligations which by the terms of the Credit
Agreement are required to be performed by it as a Bank.
4. The effective date for this Assignment and Acceptance
shall be [at least five days after execution and delivery of
this certificate] (the "Effective Date"). Following the
execution of this Assignment and Acceptance, it will be
delivered to the Agent for acceptance and recording in the
register by the Agent.
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5. Upon such acceptance and recording, from and after the
Effective Date, (i) the Assignee shall be a party to the Credit
Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Bank
thereunder, and (ii) the Assignor shall, with respect to that
portion of its interest under the Credit Agreement assigned
hereunder, relinquish its rights and be released from all of its
obligations under the Credit Agreement.
6. Upon such acceptance and recording, from and after the
Effective Date, the Agent shall make all payments in respect of
the interest assigned hereby (including payments of principal,
interest, fees and other amounts) to the Assignee. the Assignor
and Assignee shall make all appropriate adjustments in payments
for periods prior to the Effective Date by the Agent or with
respect to the making of this assignment directly between
themselves.
7. THIS ASSIGNMENT AND ACCEPTANCE IS INTENDED TO TAKE
EFFECT AS A SEALED INSTRUMENT TO BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS.
IN WITNESS WHEREOF, intending to be legally bound, each of
the undersigned has caused this Assignment and acceptance to be
executed on its behalf by its officer thereunto duly authorized,
as of the date first above written.
[NAME OF ASSIGNOR]
By: _________________________
Title:________________________
[NAME OF ASSIGNEE]
By: _________________________
Title:________________________
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SCHEDULE 3.3
IONICS, INCORPORATED
SCHEDULE OF PROPERTIES SECURED BY MORTGAGES AS OF 12/31/92.
LOAN AMOUNT
SECURITY MORTGAGEE (AT 9/30/92) MATURITY
1. PROPERTY LOCATED TOWN OF WATERTOWN $ 420,000 07/01/94
00 XXXXX XXXXXX &
00 XXXXXX XXXXXX
XXXXXXXXX, XX
2. PROPERTY LOCATED SECURITY PACIFIC $ 199,880 12/31/92
0000 XXXXXXXX XXXXXX
XXXXXXX, XX
3. LAND LOCATED LANDS ADMIN. $ 143,866 12/31/05
0000 XXXXXX XXXX XXXXXXXXXX
XXXXXX, XXXXXXXX
XXXXXXXXXX, XXXXXXXXX
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SCHEDULE 3.8
IONICS, INCORPORATED
Paragraph (b): The Company has been notified by the United States
Environmental Protection Agency that it has been
identified as a potentially responsible party under
CERCLA with respect to the following sites listed on the
National Priorities List:
1. Union Chemical site, Union, Maine
2. Silresim site, Lowell, Massachusetts
3. Solvents Recovery Service of New England
site, Southington, Connecticut
Paragraph (c): The following are the underground storage tanks that are
located on the Company's property or operated by the
Company.
1. Four tanks, Watertown, Massachusetts
2. One tank, Phoenix, Arizona
3. One tank, Springfield, Massachusetts
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