EXECUTION
FIRST AMENDED AND RESTATED
COMMERCIAL LOAN AGREEMENT
By and Among
BANKBOSTON, N.A.
(f/k/a The First National Bank of Boston)
as the Lender
and
BOSTON BIOMEDICA, INC. AND ALL OF ITS SUBSIDIARIES
as the Borrowers
Dated: As of June 30, 1999
246472-5
FIRST AMENDED AND RESTATED
COMMERCIAL LOAN AGREEMENT
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TABLE OF CONTENTS
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Page
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Preamble.................................................................
Section 1 - Definitions; Use of Terms; Incorporation by Reference
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Section 2 - Establishment of Revolving Line of Credit
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2.1 Revolving Line of Credit
2.2 Revolving Credit Borrowing Base
2.3 Interest Rate on Loans
2.4 Repayment of Loans
2.5 Fees
2.5.1 Facility Fee
2.5.2 Restructuring Fee
2.6 Use of Proceeds
2.7 Loan Advances
2.8 Other Advances and Payments
2.9 Loan Statements
2.10 Review of Line of Credit
Section 2A - Letters of Credit
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2A.1 Letters of Credit
2A.2 Procedure for Issuance of Letters of Credit
2A.3 Fees and Charges
2A.4 Reimbursement Obligations
2A.5 Obligations Absolute
Section 3 - Representations, Covenants and Warranties
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3.1 General Representations, Covenants and Warranties
3.1.1 Business
3.1.2 Due Organization and Existence; Authorization
3.1.3 Articles of Organization; Stock; Accurate Records
3.1.4 Binding Documents; Violation of Other Agreements
3.1.5 Title To Assets; Security Interests and Mortgages; Leases;
Royalties
3.1.6 Investments
3.1.7 Litigation; Outstanding Orders
3.1.8 Financial Statements Delivered
3.1.9 Other Liabilities; Tax Returns; No Adverse Changes
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3.1.10 No Agency Between Borrower and Lender
3.1.11 Regulation U
3.1.12 ERISA
3.1.13 Necessary Permits and Licenses
3.1.14 Governmental Approvals Not Required
3.1.15 Adequate Financing
3.1.16 No Event of Default
3.1.17 Compliance with Leases
3.1.18 Subsidiaries
3.1.19 Compliance with Certain Environmental Laws
3.1.20 Recent Changes of Name or Structure
3.1.21 Payment of Wages
3.1.22 Year 2000 Problem
3.2 Certain Affirmative Covenants
3.2.1 Payment of Obligations
3.2.2 Books and Records
3.2.3 Inspection
3.2.4 Commercial Purposes
3.2.5 Notice of Adverse Matters
3.2.6 Principal Lending Business
3.2.7 Maintenance of Corporate Existence; Compliance with Laws
3.2.8 Payment of Taxes and Filing of Returns
3.2.9 Maintenance of Property and Assets
3.2.10 Collection Costs; Legal Fees; etc.
3.2.11 Insurance
3.2.12 Further Agreements; Compliance with Other Agreements;
Payment of Other Obligations; Tax Returns; Notice of
Litigation and of Events of Default
3.2.13 Certain Environmental Matters
3.2.14 Changes in Master Disclosure Schedule
3.2.15 Pledge of After Acquired Property
3.2.16 New Subsidiaries
3.3 General Negative Covenants
3.3.1 Other Debt
3.3.2 Payment of Dividends
3.3.3 Loans by the Borrower
3.3.4 Investments
3.3.5 Mergers
3.3.6 Sales of Assets
3.3.7 Negative Pledge
3.3.8 No Liens; Permitted Encumbrances
3.3.9 Continuance of Business
Section 4 - Financial and Reporting Covenants
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4.1 Reporting Covenants
4.1.1 Quarterly Financial Statements
4.1.2 Annual Financial Statements
4.1.3 Compliance Certificate
4.1.4 Borrowing Base Certificate
4.1.5 Other Information
4.2 Financial Covenants
4.3 Limitation of Changes in Fiscal Year
Section 5 - Conditions of Closing
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Section 6 - Events of Default
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Section 7 - Remedies
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7.1 General Remedies
7.2 Cumulative Remedies
Section 8 - Waiver; Termination
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8.1 Waiver By The Borrower
8.2 Lender's Option To Waive
Section 9 - Miscellaneous
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9.1 Deposits As Collateral; Set-Off
9.2 Survival of Covenants; Binding Effect
9.3 Termination of Agreement
9.4 Conflict of Terms
9.5 Prior Discussions; Amendments in Writing; Counterparts;
Filing As Financing Statement
9.6 General Indemnification
9.7 Destruction of Documents; Jurisdiction
9.8 Notices
9.9 Application of Proceeds
9.10 Continuance of Defaults
9.11 Severability
9.12 Headings
9.13 Governing Law; Sealed Instrument
9.14 Force Majeure
9.15 Joint and Several
9.16 Interpretation of Agreement
Master Disclosure Schedule
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Exhibit A Form of Note
Exhibit B Form of Security Agreement
Schedule 4.1.3 Compliance Certificate
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Schedule 4.1.4 Borrowing Base Certificate
Schedule 5(d) List of Lien Searches
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FIRST AMENDED AND RESTATED
COMMERCIAL LOAN AGREEMENT
This FIRST AMENDED AND RESTATED COMMERCIAL LOAN AGREEMENT (this
"Agreement") is entered into as of June 30, 1999, by and among (a) BOSTON
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BIOMEDICA, INC., a Massachusetts corporation ("BBI"), (b) all of the
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SUBSIDIARIES of BBI which are signatories hereto (said Subsidiaries, together
with BBI and any and all other Subsidiaries which in accordance with the
provisions of subsection 3.2.17 of this Agreement, may hereafter from time to
time become parties to this Agreement, are hereinafter sometimes referred to
collectively as the "Borrowers" and each singly as a "Borrower") and (c)
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BANKBOSTON, N.A., a national banking association (f/k/a The First National Bank
of Boston)(together with its successors and assigns, the "Lender").
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Preliminary Statements:
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A. Pursuant to the provisions of a certain Commercial Loan Agreement,
dated as of March 28, 1997 (the "Existing Loan Agreement"), by and among the
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Lender and the Borrowers, the Lender has agreed to lend certain sums and to
extend certain credit to or for the benefit of the Borrowers; and
B. The Borrowers now request that the Existing Loan Agreement be
amended and restated in its entirety as provided for herein; and
C. The Lender is willing to amend and restate the Existing Loan
Agreement in its entirety in the manner provided for herein, all upon the terms
and conditions contained herein;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree that the
Existing Loan Agreement is hereby amended and restated in its entirety as
follows:
SECTION 1
DEFINITIONS; USE OF TERMS;
INCORPORATION BY REFERENCE
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1.1 Definitions. As used in this Agreement, the following terms shall
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have the meanings given to such terms as set forth below:
"Accounts": all of "accounts" (as such term is defined in the
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UCC) of each Borrower, and to the extent not included in such
definition, shall also mean and include all accounts receivable, book
debts, notes, drafts and other forms of obligations or indebtedness now
owned or hereafter received or acquired by or belonging or owing to
such Borrower whether arising out of personal property owned or leased
by it, Goods sold by it or services rendered by it or from any other
transaction, whether or not the same involves the lease of personal
property, sale of Goods or performance of services by each such
Borrower (including, without limitation, any such obligation or
indebtedness which would be characterized as an account, General
Intangible or Chattel Paper under the Uniform Commercial Code in effect
in any jurisdiction) and all of each such Borrower's rights in, to and
under all purchase orders now owned or hereafter received or acquired
by it for Goods or services, and all of each such Borrower's rights to
any Goods represented by any of the foregoing (including returned or
repossessed Goods and unpaid seller's rights) and all moneys due or to
become due to each such Borrower under all contracts for the
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sale of Goods and/or the performance of services by it (whether or not
yet earned by performance), in each case whether now in existence or
hereafter arising or acquired including, without limitation, the right
to receive the proceeds of said purchase orders and contracts and all
collateral security and guarantees of any kind given by any Person with
respect to any of the foregoing.
"Application": an application, in such form as the Lender may
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specify from time to time, to open a Letter of Credit.
"Bankruptcy Code": as defined in subsection 6.7.1 below.
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"Base Rate Loan": as defined in Schedule 1 of the Note.
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"BBI": as defined in the first paragraph on the first page of
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this Agreement.
"BBIBRL": BBI Biotech Research Laboratories, Inc., a
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Massachusetts corporation which is a Subsidiary of BBI and a party to
this Agreement.
"BBICL": BBI Clinical Laboratories, Inc., a Massachusetts
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corporation which is a Subsidiary of BBI and a party to this Agreement.
"BBISS": BBI Source Scientific, Inc., a Massachusetts
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corporation which is a Subsidiary of BBI and a party to this Agreement.
"Borrower": as defined in the first paragraph on the first
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page of this Agreement.
"Business Day": any day excluding Saturday, Sunday and any day
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which is a legal holiday under the laws of The Commonwealth of
Massachusetts, or is a day on which banking institutions located in The
Commonwealth of Massachusetts are required or authorized by applicable
law to be closed.
"Capital Expenditures": as to any Person for any period, the
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aggregate amount paid or accrued by such Person for the rental, lease,
purchase (including by way of the acquisition of securities of a
Person), construction or use of any property during such period, the
value or cost of which, in accordance with GAAP, would appear on such
Person's consolidated balance sheet in the category of property, plant
or equipment at the end of such period, excluding any such expenditure
made to restore, replace or rebuild property to the condition of such
property immediately prior to any damage, loss, destruction or
condemnation of such property, to the extent such expenditure is made
with insurance proceeds or condemnation awards relating to any such
damage, loss, destruction or condemnation.
"Capitalized Lease": any lease of property, real or personal,
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the obligations of the lessee in respect of which are required in
accordance with GAAP to be capitalized on a balance sheet of the
lessee.
"Closing Date": the date on which the conditions precedent set
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forth in Section 5 shall be satisfied or waived (but in no event later
than August 31, 1999).
"Commercial Letter of Credit": as defined in subsection
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2A.1(b)(i)(1) below.
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"Compliance Certificate": as defined in subsection 4.1.3
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below.
"Consolidated Debt Service Ratio": for any period, the ratio
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of:
(a) the sum of the Consolidated Operating Income for
such period, plus any depreciation and amortization, plus any
payments made by any Borrower on any Operating Leases during
such period, plus any proceeds which any Borrower has received
from any long term debt (including advances under the
Revolving Line of Credit) and in each case used to finance any
of its Capital Expenditures during such period, plus any and
all equity capital raised during 1999 (but only for 1999
fiscal periods), minus any payments made by any Borrower for
any Federal, state, local and foreign income taxes incurred by
such Borrower during such period, minus any payments made by
any Borrower for Capital Expenditures during such period, all
as determined on a consolidated basis in accordance with GAAP,
to
(b) the sum of Consolidated Interest Expense for such
period, plus any mandatory payments made by any Borrower on
any long term debt (including without limitation, any
Capitalized Leases) during such period, plus any payments made
by any Borrower on Operating Leases during such period, all as
determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense": for any period, the aggregate
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interest expense of the Borrowers for such period as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Operating Income": for any period, the operating
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income of the Borrowers for such period as determined on a consolidated
basis in accordance with GAAP.
"Consolidated Tangible Net Worth": at any date of
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determination, the sum of the aggregate tangible assets of the
Borrowers after having excluded (a) the book value of all Intangible
Assets of the Borrowers and (b) all liabilities of the Borrowers
(including all deferred income taxes), all as determined on a
consolidated basis in accordance with GAAP consistently applied.
"Consolidated Total Liabilities": at any date of
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determination, all Indebtedness (including without limitation, all
Obligations) of the Borrowers at such date of determination as
determined on a consolidated basis in accordance with GAAP.
"Default": an Event of Default or event or condition that, but
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for the requirement that time elapse or notice be given, or both, would
constitute an Event of Default.
"Eligible Accounts": all Eligible Domestic Accounts and
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Eligible Foreign Accounts.
"Eligible Domestic Accounts": all Accounts, other than
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Accounts which are: (a) outstanding more than ninety (90) days from the
date of invoice or issuance, whichever is earlier; (b) based on payment
terms other than those which are usual and customary to the business of
the Borrowers; (c) owed by any account debtor located outside the
United States; (d) due from any Borrower or from any past, present or
future Affiliate of any Borrower; (e) due from any account debtor if
more than Twenty Percent (20%) of the aggregate amount of Accounts due
from such account debtor are otherwise excluded from the definition of
"Eligible Accounts;" (f) due from a Person who is the subject of a
voluntary or involuntary bankruptcy, insolvency,
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reorganization, liquidation or other debt relief or adjustment
proceeding, including an assignment for the benefit of its creditors;
(g) due from any account debtor which holds or is entitled to any
claim, counterclaim, setoff or chargeback or which has the right to
return to any Borrower for credit or refund, the goods giving rise to
such account; (h) due from account debtors with respect to which any
Borrower is an account debtor; (i) based on any sale made on a
so-called "xxxx and hold" basis if the Lender has not received any
written evidence from both the applicable Borrower and account debtor
that such sale is being made on a "xxxx and hold" basis, it being
understood by the parties hereto that such written evidence must be
acceptable in all respects to the Lender; (j) based on any sale made on
a so-called "delayed shipping" or "dating" basis; or (k) determined by
the Lender, in the exercise of its commercially reasonable judgment, to
be difficult to collect, to be of diminished or uncertain value, or in
which the Lender may not have a perfected security interest pursuant to
the provisions of the Security Documents.
"Eligible Equipment": any Borrower's Equipment which is held
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by, and in the actual possession of, such Borrower (and not in the
possession of any Person other than such Borrower), and which are
determined, from time to time by the Lender, in the exercise of its
reasonable judgment, to be acceptable for purposes of making the Loans.
"Eligible Finished Inventory": any Borrower's Inventory
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consisting of finished goods which are held by, and in the actual
possession of, such Borrower (and not in the possession of any Person
other than such Borrower) for sale, license, or lease, or furnished or
to be furnished by such Borrower under contracts of sale or service,
and which are determined, from time to time by the Lender, in the
exercise of its reasonable judgment, to be acceptable for purposes of
making the Loans.
"Eligible Foreign Accounts": all Accounts, other than Accounts
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which are: (a) outstanding more than ninety (90) days from the date of
invoice or issuance, whichever is earlier; (b) based on payment terms
other than those which are usual and customary to the business of the
Borrowers; (c) owed by any account debtor located in the United States;
(d) due from any Borrower or from any past, present or future Affiliate
of any Borrower; (e) due from any account debtor if more than Twenty
Percent (20%) of the aggregate amount of Accounts due from such account
debtor are otherwise excluded from the definition of "Eligible
Accounts;" (f) due from a Person who is the subject of a voluntary or
involuntary bankruptcy, insolvency, reorganization, liquidation or
other debt relief or adjustment proceeding, including an assignment for
the benefit of its creditors; (g) due from any government entity; (h)
due from any account debtor which holds or is entitled to any claim,
counterclaim, setoff or chargeback or which has the right to return to
any Borrower for credit or refund, the goods giving rise to such
account; (i) due from account debtors with respect to which any
Borrower is an account debtor; (j) based on any sale made on,
so-called, "delayed shipping", "xxxx and hold", or "dating" basis; or
(k) determined by the Lender, in the exercise of its commercially
reasonable judgment, to be difficult to collect, to be of diminished or
uncertain value, or in which the Lender may not have a perfected
security interest pursuant to the provisions of the Security Documents.
"Eligible Inventory": all Eligible Finished Inventory,
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Eligible Work-In-Process Inventory and Eligible Raw Materials
Inventory.
"Eligible Raw Materials Inventory": any Borrower's Inventory
---------------------------------
consisting of raw materials which are used or consumed in such
Borrower's business, and which are held by, and in the actual
possession of, such Borrower (and not in the possession of any Person
other than
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such Borrower) and which are determined, from time to time by the
Lender, in the exercise of its reasonable judgment, to be acceptable
for purposes of making the Loans.
"Eligible Work-In-Process Inventory": any Borrower's Inventory
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consisting of work-in-process materials which are used or consumed in
such Borrower's business, and which are held by, and in the actual
possession of, such Borrower (and not in the possession of any Person
other than such Borrower) and which are determined, from time to time
by the Lender, in the exercise of its reasonable judgment, to be
acceptable for purposes of making the Loans.
"Equipment": any Borrower's "equipment" as such term is
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defined in the UCC, and to the extent not included in such definition,
shall also mean and include all motor vehicles (whether or not subject
to motor vehicle registration), rolling stock, machinery, furniture,
office equipment, plant equipment, fixtures, tools, spare parts,
accessories, dies, molds and all other like goods, property and assets
owned now or hereafter by such Borrower and used in the operation or
furtherance of such Borrower's business.
"Event of Default": as defined in Section 6 below.
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"Existing Loan Agreement": as defined in the Preliminary
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Statements of this Agreement.
"Facility Fee": as defined in subsection 2.5.1 below.
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"Financial Covenants": as defined in subsection 4.2 below.
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"Financing Instruments": any and all agreements (including
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this Agreement), Instruments, Documents, and other writings including
without limitation, security agreements (including the Security
Agreement), loan agreements, notes, guarantees, letters of credit
(including the Letters of Credit and the Applications therefor),
mortgages, deeds of trust, collateral assignments, subordination
agreements, contracts, notices, leases, financing statements and all
other written matter, whether heretofore, now, or hereafter executed by
or on behalf of any Borrower and delivered to the Lender in connection
with the transactions described in this Agreement or contemplated
hereby, together with all agreements and documents referred to therein
or contemplated thereby.
"GAAP": generally accepted accounting principles in the United
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States of America in effect from time to time (subject to the
provisions of the last paragraph of subsection 4.2).
"Indebtedness": of any Person at any date, without
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duplication, (a) all indebtedness of such Person for borrowed money or
the deferred purchase price of property or services (other than current
trade liabilities incurred in the ordinary course of business and
payable in accordance with customary practices), (b) any other
indebtedness of such Person which is evidenced by a note, bond,
debenture or similar instrument, (c) all obligations of such Person
under Capitalized Leases or Operating Leases, (d) all obligations of
such Person in respect of acceptances issued or created for the account
of such Person and (e) all indebtedness of others of the types
described in (a) through (d) above secured by any Lien on any property
owned by such Person even though such Person has not assumed or
otherwise become liable for the payment thereof (the amount of such
indebtedness with respect to such Person being deemed to be the lesser
of the value of such property or the amount of indebtedness of others
so secured).
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"Indemnified Party": as defined in subsection 9.6 below.
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"Intangible Assets": any and all goodwill, organizational
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expense, licenses, patents, trademarks, tradenames, copyrights,
capitalized research and development expenses, deferred charges, and
all other intangible assets.
"Interest Rate Protection Contracts": interest rate swap
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agreements, interest rate collar agreements, options on any of the
foregoing and any other agreements or arrangements designed to provide
protection against fluctuations in interest rates, in each case
purchased by any Borrower from a lender with respect to Loans and
approved by the Lender.
"Investment": the purchase or acquisition of any share of
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capital stock, partnership interest, evidence of Indebtedness or other
equity security of any other Person (including any Subsidiary), any
loan, advance or extension of credit (excluding Accounts and costs and
estimated earnings in excess of xxxxxxxx arising in the ordinary course
of business) to, or contribution to the capital of, any other Person
(including any Subsidiary), any real estate held for sale or
investment, any securities or commodities futures contracts held, any
other investment in any other Person (including any other Borrower),
and the making of any commitment or acquisition of any option to make
an Investment.
"Inventory": all "inventory" as such term is defined in the
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UCC, and to the extent not included in such definition, shall also mean
and include any and all of the following owned by any Borrower: any
Goods, wares, merchandise, raw materials, supplies, components, work in
process, finished goods and all packaging, advertising, shipping
material, labels and other devices, names, or marks affixed thereto for
purpose of selling the same; tangible personal property held by such
Borrower for processing, sale, license, or lease, or furnished or to be
furnished by such Borrower under contracts of sale or service or to be
used or consumed in such Borrower's business; items referred to above
which are in transit, returned, rejected, repossessed or detained.
"IRC": the Internal Revenue Code of 1986, as amended, and
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regulations as promulgated and in effect, from time to time,
thereunder.
"Lender": as defined in the first paragraph on the first page
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of this Agreement.
"Letters of Credit": collectively, Commercial Letters of
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Credit and Standby Letters of Credit.
"LIBOR Loan": as defined in Schedule 1 of the Note.
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"Liens": any and all: mortgages, pledges, security interests,
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encumbrances, liens, or charges of any kind including, but not limited
to, agreements to give any of the foregoing; conditional sales or other
title retention agreements or devices, or any leases in the nature
thereof; and the filing of, or agreement to give, any financing
statement under the Uniform Commercial Code of any jurisdiction.
"Loans": as defined in subsection 2.1 below.
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"Main Operating Account": as defined in subsection 2.7 below.
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"Margin Stock": as defined in subsection 3.1.11 below.
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"Master Disclosure Schedule": as defined in subsection 3.1.1
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below.
"Maturity Date": June 30, 2001.
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"Note": a certain First Amended and Restated Commercial
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Revolving Promissory Note, from the Borrowers, made payable to the
order of the Lender, in the face amount of Revolving Credit Maximum
Amount, substantially in the form of Exhibit A, as the same may be
hereafter amended, modified, substituted, extended or restated, from
time to time.
"Obligations": any and all Indebtedness, liabilities, duties,
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undertakings, covenants and agreements (including those of payment or
of performance) of each of the Borrowers to the Lender or any affiliate
of the Lender, all of every kind, nature and description, and arising
pursuant to the terms of the Financing Instruments or otherwise,
including, without limitation:
(a) each Borrower's liability to repay the Loans,
together with the payment of all interest and other monies due
pursuant to the terms of the Note, and any and all
substitutions, renewals, extensions, amendments and rewritings
of the Loans or the Note and all present and future advances
made thereunder and including all Interest Rate Protection
Contracts;
(b) the faithful performance and observance by each
Borrower of all agreements, covenants and conditions contained
in this Agreement and in each of the other Financing
Instruments; and
(c) any and all such Indebtedness, liabilities,
duties, undertakings, covenants and agreements due to or in
favor of the Lender, whether or not the same are: now existing
or hereafter arising; imposed by agreement or by operation of
law; due or not due, absolute or contingent, liquidated or
unliquidated, voluntary or involuntary; evidenced by a
writing; presently contemplated by the parties; the joint or
the several liabilities of any Borrower; direct or indirect;
related or unrelated to the transactions described in or
contemplated by the Financing Instruments; liabilities or
undertakings of any Borrower as surety, guarantor or endorser
with respect to obligations of one or more other parties;
specifically described as secured or unsecured; hereafter
acquired by the Lender by assignment, other transfer or
operation of law; the result of any transaction whatsoever
between any Borrower and the Lender; or by reason of any cause
of action which the Lender may have against any Borrower.
"Operating Lease": any lease of personal (non-Real Property)
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property, the obligations of the lessee in respect of which may not, in
accordance with GAAP, be capitalized on a balance sheet of the lessee.
"Permitted Acquisition": any domestic corporation,
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partnership, limited liability company, joint venture or other form of
domestic entity that is engaged in the business of any Borrower or any
business reasonably related or complimentary thereto.
"Permitted Acquisition Venture": any Investment in a Permitted
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Acquisition for which (a) any Borrower has provided the Lender, in
advance of such Acquisition, with all of the
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material information, reports, financial statements and any other
material used by such Borrower to determine the suitability and
prudence of such Investment; and (b) any Borrower has satisfied the
Lender that such Investment will not result in such Borrower failing to
meet any of the Financial Covenants contained in subsections 4.2
hereof.
"Permitted Liens": as defined in subsection 3.3.8 below.
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"Persons": any and all individuals, corporations,
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partnerships, joint stock associations, business or other trusts,
governments or any agencies or subdivisions thereof, joint ventures,
limited liability companies or partnerships, or other entities or
associations whatsoever.
"Purchase Money Indebtedness": any Indebtedness incurred by
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any Borrower in connection with the acquisition by such Borrower of any
real or personal property.
"Real Property": any and all land or real estate, together
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with all buildings, improvements and fixtures thereon, and all rights,
title and interests therein (including without limitation, any rights
or interests in any leases, easements or rights-of-way).
"Reimbursement Obligation": the obligation of the Borrowers to
------------------------
reimburse the Lender pursuant to subsection 2A.4(a) below for amounts
drawn under Letters of Credit.
"Reporting Requirements": as defined in subsection 4.1 below.
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"Responsible Officer": as to any Person, the chief executive
--------------------
officer and the president of such Person or, with respect to financial
matters, the chief financial officer of such Person or, in either case,
such other executive officers as may be designated from time to time by
such Person in writing to the Lender.
"Restructuring Fee": as defined in subsection 2.5.2 below.
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"Revolving Credit Borrowing Base": as defined in subsection
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2.2 below.
"Revolving Credit Period": the period from and after the
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Closing Date to and including the Maturity Date or any earlier date on
which the obligation of the Lender to make Loans shall terminate, as
provided herein.
"Revolving Line of Credit": as defined in subsection 2.1
--------------------------
below.
"Revolving Credit Maximum Amount": as defined in subsection
---------------------------------
2.1 below.
"SEC": the United States Securities and Exchange Commission or
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any other federal governmental agency which may hereafter perform its
functions.
"Security Agreement": the Security Agreement-All Assets to be
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executed and delivered by the Borrowers, substantially in the form of
Exhibit B, as the same may be amended, modified, substituted, extended
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or restated, from time to time.
"Security Documents": collectively, the Security Agreement and
------------------
all other documents now or hereafter delivered to the Lender granting a
Lien on any asset or assets of any Person to secure the Obligations or
to secure any guarantee of any such Obligations.
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"Standby Letter of Credit": as defined in subsection
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2A.1(b)(i)(2) below.
"Subsidiary": as to any Person, a corporation, partnership or
----------
other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the
time owned, or the management of which is otherwise controlled,
directly or indirectly through one or more intermediaries, or both, by
such Person. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to any
direct or indirect Subsidiary or Subsidiaries of BBI.
"Total Revolving Credit Outstandings": at any time, the sum of
-----------------------------------
(i) the aggregate outstanding principal balance of the Loans at such
time and (ii) the maximum aggregate amount from time to time that
beneficiaries may draw under outstanding Letters of Credit at such
time.
"UCC": the Uniform Commercial Code as in effect from time to
---
time in The Commonwealth of Massachusetts.
"Uniform Customs": the Uniform Customs and Practice for
----------------
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended from time to time.
"34 Act": the Securities Exchange Act of 1934, as amended from
------
time to time.
The following terms shall have the respective meanings ascribed to them
in the UCC: "Account Debtor", "Chattel Paper", "Deposit Account", "Document",
-------------- ------------- --------------- --------
"Farm Products", "Goods," and "Instrument".
------------- ----- ----------
Capitalized terms defined elsewhere in this Agreement shall have the
respective meanings ascribed to them where so defined.
1.2 Use of Terms. The use of the singular of terms which are defined in
------------
the plural shall mean and refer to any one of the matters or items included in
such definition. Use of the connective "or" is not intended to be exclusive; the
term "may not" is intended to be prohibitive and not permissive; use of
"includes" and "including" is intended to be interpreted as expansive and
amplifying and not as limiting in any way; and pronouns used herein shall be
deemed to include the singular and the plural and all genders. All exhibits to
this Agreement are hereby incorporated herein by reference.
SECTION 2
ESTABLISHMENT OF REVOLVING LINE OF CREDIT
-----------------------------------------
2.1 Revolving Line of Credit. Subject to all of the terms and
---------------------------
conditions contained in this Agreement and the other Financing Instruments, the
Lender hereby agrees to establish for the benefit of the Borrowers a certain
revolving line of credit (the "Revolving Line of Credit") pursuant to which the
------------------------
Lender shall make certain loans (hereinafter referred to collectively as the
"Loans" and each singly as a "Loan") to the Borrower from time to time during
----- ----
the Revolving Credit Period; provided, however, that the Total Revolving Credit
------------------
Outstandings (after giving effect to all requested Loans and Letters of Credit)
shall not at any time exceed TEN MILLION AND 00/100 DOLLARS ($10,000,000.00)(the
"Revolving Credit Maximum Amount"). Each Loan shall be evidenced by, and shall
--------------------------------
be payable in accordance
-14-
with the provisions of, the Note and this Agreement. During the Revolving Credit
Period, the Borrowers may from time to time borrow, repay and reborrow the
Loans, all in accordance with the terms and conditions of the Note and this
Agreement.
2.2 Revolving Credit Borrowing Base. Notwithstanding any provision
----------------------------------
contained in any of the Financing Instruments to the contrary, the aggregate
principal amount of the Loans outstanding, from time to time, shall never exceed
the lesser of either (hereinafter referred to as the "Revolving Credit Borrowing
--------------------------
Base"):
------
(a) the Revolving Credit Maximum Amount; or
(b) the sum of:
(i) the following Eligible Accounts:
(A) 85% of all Eligible Domestic Accounts of
BBI; plus
----
(B) 75% of all Eligible Domestic Accounts of
BBICL; plus
----
(C) 85% of all Eligible Domestic Accounts of
BBISS; plus
----
(D) 70% of all Eligible Domestic Accounts
and all Eligible Foreign Accounts of BBIBRL; plus
----
(E) 90% of all Eligible Foreign Accounts of
any Borrower (other than BBIBRL) which are secured by
one or more letters of credit, each in form and
substance satisfactory to the Lender; plus
----
(F) 75% of the Eligible Foreign Accounts of
any Borrower (other than BBIBRL) which are not
secured by one or more letters of credit, each in
form and substance satisfactory to the Lender; plus
----
(ii) the following Eligible Inventory:
(A) 30% of the sum of (x) all Eligible Raw
Materials Inventory of BBI, valued at the lower of
cost or market value, and (y) all Eligible
Work-In-Process Inventory of BBI, valued at the lower
of cost or market value; plus
----
(B) 40% of all Eligible Finished Inventory
of BBI, valued at the lower of cost or market value;
plus
----
(C) 25% of all Eligible Raw Materials
Inventory of BBISS, valued at the lower of cost or
market value; plus
----
(D) 30% of all Eligible Work-In Process
Inventory of BBISS, valued at the lower of cost or
market value; plus
----
(E) 50% of all Eligible Finished Inventory
of BBISS, valued at the lower of cost or market
value; plus
----
-15-
(iii) $728,657.50, which sum is equal to 70% of the appraised
value of all of the Eligible Equipment (other than motor vehicles) of
BBI, BBICL, BBISS and BBIBRL as of the date hereof.
Descriptions or determinations by the Lender regarding Eligible
Accounts, Eligible Inventory, Eligible Raw Materials or Eligible Equipment are
intended solely for credit management for the Loans. Such descriptions and
determinations are not intended and shall not be construed as any determination
of actual value of any Collateral nor shall the same affect the security
interests granted to the Lender under the Security Documents. Each Borrower
shall be responsible for all credit risks concerning all Accounts, Inventory and
Equipment of such Borrower. Determinations and descriptions of eligibility shall
not alter in any way the status of Collateral as security for the Obligations.
2.3 Interest Rate on Loans. The principal amount outstanding, from time
----------------------
to time, of each of the Loans shall bear interest in accordance with the
provisions of the Note.
2.4 Repayment of Loans. Principal and interest under the Loans shall be
------------------
paid to the Lender in accordance with the provisions of the Note.
2.5 Fees.
----
2.5.1 Facility Fee. The Borrowers agree to pay to the Lender a
------------
Facility Fee (the "Facility Fee") of one-quarter of one percent (.25%)
-------------
per annum of the amount which equals the average unused portion of the
Revolving Credit Maximum Amount during each calendar quarter, or part
thereof, that any Loan remains outstanding. The Facility Fee shall be
paid by the Borrowers to the Lender on a calendar quarterly basis, in
arrears. The Facility Fee shall be earned when paid, non-refundable and
in addition to all interest and all other amounts due and payable with
respect to the Loans or otherwise pursuant to the Financing
Instruments.
2.5.2 Restructuring Fee. The Borrowers shall pay to the Lender
-----------------
contemporaneously herewith a non-refundable Restructuring Fee (the
"Restructuring Fee") of Fifty Thousand and 00/100 Dollars ($50,000.00).
-----------------
2.6 Use of Proceeds. All of the proceeds of the Loans shall be used (a)
---------------
to restructure the existing credit facility established by the Lender for
benefit of the Borrowers under the Existing Loan Agreement; (b) to finance the
general working capital requirements of the Borrowers; and (c) to finance up to
Two Million Five Hundred Thousand and 00/100 Dollars ($2,500,000.00) in Capital
Expenditures during each fiscal year to be made by the Borrowers.
2.7 Loan Advances. After the date hereof, Loans shall be made by
--------------
advances by the Lender to one or more of the accounts maintained by the
Borrowers pursuant to subsection 3.2.6 hereof (hereinafter referred to as the
"Main Operating Account"). Subject to the terms and conditions hereof, the
------------------------
Lender may make Loans to each Borrower (i) to cover checks drawn by any Borrower
on the Main Operating Account and (ii) to cover other authorized charges whether
given to the Lender orally, telephonically or in writing and (iii) to cover
other charges due and payable hereunder. As an accommodation to each Borrower,
and to avoid the necessity that the Lender communicate with each Borrower each
time checks are presented for payment against the Main Operating Account, each
Borrower requests the Bank to make a Loan charged to the Loan Account sufficient
to cover checks and other authorized charges on each occasion that the same are
presented. All actions of the Lender in connection with the ordinary
administration of the foregoing are hereby ratified and confirmed and shall
-16-
be conclusive and binding upon each Borrower. Each request by any Borrower to
Lender for an advance under the Revolving Line of Credit shall constitute a
representation by the Borrowers that as of the date of such request (a) each of
the representations and warranties set forth herein are true, (b) each Borrower
is in compliance with all of the covenants, terms and conditions hereof, and (c)
no event or circumstances exist which constitute or with the lapse of time or
notice, or both, would constitute or result in the occurrence of an Event of
Default (as hereinafter defined).
2.8 Other Advances and Payments. Whether or not the entire amount
------------------------------
available under the Revolving Line of Credit shall have been advanced to or for
the benefit of any Borrower, and whether or not the Loans shall be payable (by
maturity or by acceleration) or an Event of Default shall have occurred under
this Agreement, the Lender shall be entitled (but shall not be obligated and may
not be required) to make, at its sole discretion, additional advances from time
to time:
2.8.1 in payment or reimbursement, as the case may be, of any
and all payments made or amounts owing pursuant to applicable
provisions of the Financing Instruments;
2.8.2 to pay the Lender's usual and customary charges for (a)
services rendered by it to any Borrower at such Borrower's request
which charges relate to the Obligations; and (b) charges otherwise
required to be paid by any Borrower pursuant to this Agreement; and
2.8.3 otherwise to or for the benefit of any Borrower, as
requested or consented to by any Borrower, as the Lender may in its
discretion deem proper or expedient;
and each such additional advance shall be a part of the Obligations and shall at
all times be subject to the terms and conditions of this Agreement and secured
as provided in the Financing Instruments.
2.9 Loan Statements. All advances to or for the benefit of any Borrower
---------------
pursuant to this Agreement shall be charged to the loan account or accounts
opened in such Borrower's name on the Lender's books. The Lender periodically
shall render to BBI statements of such loan account or accounts, setting forth
the daily loan balance and total accrued interest during the subject period,
which, when so rendered, shall be considered prima facie evidence of the
correctness thereof except to the extent that the Lender receives written notice
of any exceptions proposed by BBI within a reasonable time, but in no event
later than one hundred twenty (120) days from the date of such statement. If for
any reason, any Borrower has not paid interest charges and/or any fees for
services, expenses incurred or other charges owed to the Lender by such
Borrower, the Lender, at its option and discretion, may at any time or times
debit such charges, expenses, and fees to such Borrower's loan account and such
amounts shall be added to the principal amount thereof, or the Lender may debit
such interest, charges and fees, and any other unpaid Obligations then due, to
any deposit or other account of such Borrower at the Lender. Such debits shall
not constitute a waiver of any Event of Default. Any item received in payment
towards any Borrower's outstanding Indebtedness which requires clearance or
payment shall not be considered to have been credited until final clearance and
final payment.
2.10 Review of Line of Credit. The Lender agrees (a) to review the
-------------------------
Revolving Line of Credit annually on or before June 30 of each year commencing
in 2000, to determine whether the Maturity Date will be extended for an
additional twelve-month period beyond the Maturity Date then in effect; and (b)
to notify BBI of such determination in accordance with the notice provisions of
the Agreement. Notwithstanding the foregoing, any determination by the Lender to
extend the Maturity Date shall not be binding and enforceable against the Lender
until the execution of an Extension Agreement or other appropriate
documentation, executed by the parties hereto.
-17-
SECTION 2A
LETTERS OF CREDIT
-----------------
2A.1 Letters of Credit.
-----------------
(a) Subject to the terms and conditions hereof, the Lender
agrees to issue Letters of Credit for the account of any Borrower on
any Business Day during the Revolving Credit Period in such form as may
be approved from time to time by the Lender; and provided further,
------------------
however, that the Total Revolving Credit Outstandings (after giving
-------
effect to all requested Loans and Letters of Credit) shall not at any
time exceed the Revolving Credit Maximum Amount.
(b) Each Letter of Credit shall:
(i) be denominated in Dollars and shall be either (1)
a standby letter of credit issued to support obligations of
any Borrower, contingent or otherwise, in connection with the
working capital and business needs of such Borrower in the
ordinary course of business (a "Standby Letter of Credit") or
------------------------
(2) a commercial letter of credit issued in respect of the
purchase of goods or services by any Borrower in the ordinary
course of business (a "Commercial Letter of Credit"); and
---------------------------
(ii) expire no later than the earlier of (A) five (5)
Business Days prior to the Maturity Date or (B) one year after
the date of issuance thereof.
(c) Each Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws of The
Commonwealth of Massachusetts.
(d) The Lender shall not at any time be obligated to issue any
Letter of Credit hereunder if such issuance would conflict with, or
cause the Lender to exceed any limits imposed by, any applicable law.
2A.2 Procedure for Issuance of Letters of Credit. Any Borrower may from
-------------------------------------------
time to time request that the Lender issue a Letter of Credit by delivering to
the Lender at its address for notices specified herein an Application therefor,
completed to the satisfaction of the Lender, and such other certificates,
documents and other papers and information as the Lender may request. Upon
receipt of any Application, the Lender will process such Application and the
certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall
promptly issue the Letter of Credit requested thereby (but in no event shall the
Lender be required to issue any Letter of Credit earlier than five (5) Business
Days after its receipt of the Application therefor and all such other
certificates, documents and other papers and information relating thereto) by
issuing the original of such Letter of Credit to the beneficiary thereof or as
otherwise may be agreed by the Lender and such Borrower. The Lender shall
furnish a copy of such Letter of Credit to the Borrower promptly following the
issuance thereof.
2A.3 Fees and Charges. The Borrowers shall pay or reimburse the Lender
----------------
for such normal and customary fees, commissions, costs and expenses as are
incurred or charged by the Lender in issuing, effecting payment under, amending
or otherwise administering any Letter of Credit.
2A.4 Reimbursement Obligations.
-------------------------
-18-
(a) The Lender shall notify BBI promptly of each drawing under
a Letter of Credit. The Borrowers agree to reimburse the Lender on each
date on which the Lender notifies BBI of the date and amount of a draft
presented under any Letter of Credit and paid by the Lender for the
amount of (i) such draft so paid and (ii) any taxes, fees, charges or
other costs or expenses incurred by the Lender in connection with such
payment. Each such payment shall be made to the Lender at its address
for notices specified herein in lawful money of the United States of
America and in immediately available funds.
(b) Interest shall be payable on any and all amounts remaining
unpaid by the Borrowers under this subsection 2A.4 (i) from the date
the draft presented under the affected Letter of Credit is paid to the
date on which the Borrowers are required to pay such amounts pursuant
to paragraph (a) of this subsection at the rate which would then be
payable on any Loans that are Base Rate Loans and (ii) thereafter,
until payment in full at the rate which would be payable on any
outstanding Loans that are Base Rate Loans which were then overdue.
(c) Each drawing under any Letter of Credit shall constitute a
request by the Borrowers to the Lender for an advance under the
Revolving Line of Credit of a Base Rate Loan in the amount of such
drawing.
2A.5 Obligations Absolute.
--------------------
(a) The obligations of the Borrowers under this Section 2A
shall be absolute and unconditional under any and all circumstances and
irrespective of any set-off, counterclaim or defense to payment which
any Borrower may have or have had against the Lender, or any
beneficiary of a Letter of Credit.
(b) The Borrowers also agree that the Lender shall not be
responsible for, and the Reimbursement Obligations of the Borrowers
under subsection 2A.4(a) shall not be affected by, among other things,
(i) the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or (ii) any dispute between or among any Borrower
and any beneficiary of any Letter of Credit or any other party to which
such Letter of Credit may be transferred or (iii) any claims whatsoever
of any Borrower against any beneficiary of such Letter of Credit or any
such transferee.
(c) The Lender shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Letter
of Credit, except for errors, omissions, interruptions or delays caused
by the Lender's gross negligence or willful misconduct.
(d) Each Borrower agrees that any action taken or omitted by
the Lender under or in connection with any Letter of Credit or the
related drafts or documents, if done in the absence of gross negligence
or willful misconduct and in accordance with the standards of care
specified in the Uniform Customs, and to the extent not inconsistent
therewith, the Uniform Commercial Code of The Commonwealth of
Massachusetts, shall be binding on each such Borrower and shall not
result in any liability of the Lender to any Borrower.
SECTION 3
REPRESENTATIONS, COVENANTS AND WARRANTIES
-----------------------------------------
-19-
In addition to such other representations, covenants and warranties as
are contained herein, or elsewhere in the Financing Instruments or as have
otherwise been made to the Lender, each Borrower hereby jointly and severally
represents, covenants and warrants that:
3.1 General Representations, Covenants and Warranties.
-------------------------------------------------
3.1.1 Business. The Borrowers are currently engaged in the
--------
businesses set forth set forth in the Master Disclosure Schedule
attached hereto and incorporated herein by reference (the "Master
------
Disclosure Schedule"). Each Borrowers shall continue to engage in
--------------------
business of the same general type as now conducted by each such
Borrower as set forth in the Master Disclosure Schedule.
--------------------------
3.1.2 Due Organization and Existence; Authorization. Each
-------------------------------------------------
Borrower (a) is duly organized, validly existing and in good standing
under the laws of the State in which such Borrower was organized, (b)
has adequate power and authority to own its properties and assets and
to carry on its business activities as and where now conducted, (c) is
qualified to do business as a foreign corporation and is in good
standing in each jurisdiction wherein such qualification is necessary,
and where the failure to so qualify would have a material adverse
effect on the business or property of such Borrower, and (d) has the
power and authority to execute and deliver such of the Financing
Instruments as have been executed by it, and to perform the Financing
Instruments in accordance with the terms thereof.
3.1.3 Articles of Organization; Stock; Accurate Records. The
---------------------------------------------------
Articles (or Certificate) of Organization (or Incorporation) and all
amendments thereto of each Borrower have been duly filed and are in
proper order. All capital stock issued by each Borrower and currently
outstanding is properly issued, and all books and records of each
Borrower, (including but not limited to, the minute book, by-laws and
books of account of each Borrower) are accurate and up-to-date and will
be so maintained.
3.1.4 Binding Documents; Violation of Other Agreements. Each
-------------------------------------------------
Borrower has taken all steps required by applicable law to make this
Agreement, and each of such Financing Instruments, its legal, valid and
binding obligation enforceable, jointly and severally, in accordance
with its terms, and neither the execution, delivery nor performance of
this Agreement or any of the Financing Instruments is in violation of
any law, the Articles (or Certificate) of Organization (or
Incorporation), Bylaws or other organizational documents of it, or of
any other agreement or instrument to which it is a party or by which it
or any of its assets is or may be bound, and does not constitute a
default under any of the foregoing, or result in the creation or
imposition of a Lien upon any of its properties or assets other than
that in favor of the Lender.
3.1.5 Title To Assets; Security Interests and Mortgages;
-------------------------------------------------------
Leases; Royalties. Each Borrower has title (and good, clear, record and
-----------------
marketable title in the case of real property) to all assets reflected
in the financial statements hereinafter referred to and delivered to
the Lender, and to all assets acquired since the date of said financial
statements (other than those assets subsequently disposed of in the
ordinary course of business), free of any Lien except in favor of the
Lender and except for the Permitted Liens.
3.1.6 Investments. No Borrower has any Investment, in equity
-----------
or debt, other than short-term, investment grade securities, including
money market funds.
-20-
3.1.7 Litigation; Outstanding Orders. There are no actions,
--------------------------------
suits, proceedings or investigations pending or, to the knowledge of
any Borrower or any of its agents, servants or employees, threatened
against any Borrower or any of its properties in any court, before any
other tribunal or any federal, state, municipal or other governmental
authority. Each Borrower is not in default with respect to any order of
any court, or other tribunal or governmental authority. The execution,
delivery and performance of this Agreement and each of the Financing
Instruments by each Borrower will not constitute a default of any order
of any court, or any other tribunal or governmental authority.
3.1.8 Financial Statements Delivered. BBI has furnished to the
------------------------------
Lender the consolidated financial statements of the Borrowers
(including consolidated balance sheet and statement of profit and loss)
for their fiscal year ended December 31, 1998, as audited by
PricewaterhouseCoopers LLP. Said financial statements fairly present
the financial position of the Borrowers as at the date thereof and said
statement of profit and loss fairly presents the results of the
operations of the Borrowers for the fiscal years indicated, all in
conformity with GAAP consistently applied.
3.1.9 Other Liabilities; Tax Returns; No Adverse Changes. (a)
---------------------------------------------------
No Borrower has any knowledge of any contingent obligations or
liabilities of any Borrower for taxes or long-term commitments which
are not shown in the balance sheets included in said statements or
noted therein; (b) each Borrower has filed all required tax returns or
extensions therefor and has paid all applicable federal, state and
local taxes shown to be due (other than taxes which may hereafter be
paid without penalty) and no Borrower has any knowledge of any
deficiency or additional assessment in connection therewith for which
no provision has been made on its books; and (c) there has been no
material adverse change in the business, properties or condition
(financial or otherwise) of any Borrower since the date of the most
recent financial statement referred to above.
3.1.10 No Agency Between the Borrowers and the Lender. Nothing
----------------------------------------------
herein contained shall be construed to constitute any Borrower as the
Lender's agent for any purpose whatsoever.
3.1.11 Regulation U. No Borrower own, or has any present
-------------
intention of acquiring, any "margin security" as defined in Regulation
U (12 C.F.R. Part 221) of the Board of Governors of the Federal Reserve
System (herein called a "Margin Security"). None of the proceeds of the
---------------
Loans will be used, directly or indirectly, for the purpose of
purchasing or carrying any Margin Security or for the purpose of
reducing or retiring any Indebtedness which was originally incurred to
purchase or carry a Margin Security or for any other purpose which
might constitute this transaction a "purpose credit" within the meaning
of said Regulation U.
3.1.12 ERISA. No Borrower has incurred any material
-----
accumulated funding deficiency within the meaning of the Employee
Retirement Income Security Act of 1974, as amended, or incurred any
material liability to the Pension Benefit Guaranty Corporation
established under such Act (or any successor thereto under such Act),
nor does any Borrower foresee that it will incur any such material
accumulated funding deficiency or material liability in the future, in
connection with any employee benefit plan established or maintained by
such Borrower. The making of the Loans will not involve any prohibited
transaction within the meaning of the Employee Retirement Income
Security Act of 1974 or Section 4975 of the Internal Revenue Code, as
amended. There are no facts known to any Borrower which create, or in
the future may
-21-
(so far as the Borrower can now foresee) create, any withdrawal or
other liability of any Borrower under the Multi-employer Pension Plan
Amendment Act of 1980.
3.1.13 Necessary Permits and Licenses. Each Borrower possesses
------------------------------
all franchises, rights, certificates, variances, licenses, permits and
other authorizations, consents and approvals from all administrative,
regulatory or governmental bodies and all patents, trademarks, service
marks, trade names, copyrights, licenses and other rights, in each
case, free from burdensome restrictions, that are necessary in any
material respect for the ownership, maintenance and operation of its
business, properties and assets, and no Borrower is in violation of any
thereof in any material respect.
3.1.14 Governmental Approvals Not Required. Neither the nature
-----------------------------------
of any Borrower nor its business or property, nor any relationship
between or among any Borrower and any other Person is such as to
require any consent, authorization, waiver, approval or other action by
or any notice to or filing with any court or administrative, regulatory
or governmental body, including, without limitation, government
agencies, offices and instrumentalities with which any Borrower has
contracts, in connection with the execution and delivery by any
Borrower of this Agreement or the other Financing Instruments or the
fulfillment of or compliance by any Borrower with, or the enforcement
by the Lender of, the terms and provisions hereof or thereof.
3.1.15 Adequate Financing. No Borrower has any reason to
-------------------
believe that the proceeds of the Loans, together with such other
sources of funds as are now directly and immediately available to any
Borrower, will not be adequate to finance its business operations for
the term of the Loans.
3.1.16 No Event of Default. As of the date hereof, there does
-------------------
not exist any Event of Default or any event which, but for the giving
of notice or the lapse of time or both, would constitute an Event of
Default under this Agreement, any of the Financing Instruments or under
the provisions of any instrument evidencing any Indebtedness of any
Borrower to any other Person.
3.1.17 Compliance with Leases. Each Borrower enjoys peaceful
----------------------
and undisturbed possession as lessee under all leases necessary in any
material respect for the operation of its business or of its properties
and assets, none of which contains any provisions which might
materially affect or impair the operation of its business or such
properties and assets. All such leases are valid and subsisting and are
in full force and effect.
3.1.18 Subsidiaries. So long as any Obligations remain
------------
outstanding, BBI shall continue to own one hundred percent (100%) of
the issued and outstanding capital stock of its Subsidiaries.
3.1.19 Compliance with Certain Environmental Laws. Neither any
------------------------------------------
Borrower, nor any Person for whose conduct any Borrower is responsible,
owns, occupies or operates, or has ever owned, occupied or operated a
site or vessel on which has been stored any hazardous material or oil,
without compliance with all statutes, regulations, ordinances,
directives, and orders of every federal, state, municipal and other
governmental authority which has or claims jurisdiction relative
thereto (the terms "site", "vessel", and "hazardous material",
respectively, as used herein include the definitions of those terms in
Massachusetts General Laws, Ch. 2lE); neither any Borrower, nor any
Person for whose conduct any Borrower is responsible, has ever disposed
of,
-22-
transported, or arranged for the transport of any hazardous material or
oil without compliance with all such statutes, regulations, ordinances,
directives, and orders; and neither any Borrower, nor any Person for
whose conduct any Borrower is responsible, has ever been legally
responsible for any release or threat of release of any hazardous
material or oil; received notification of any potential or known
release or threat of release of any hazardous material or oil from any
site or vessel owned, occupied or operated by any Borrower, or any
Person for whose conduct any Borrower is responsible, or of the
incurrence of any expense or loss in connection with the assessment,
containment, or removal of any release or threat of release of any
hazardous material or oil from any such site or vessel.
3.1.20 Recent Changes of Name or Structure. No Borrower has
-------------------------------------
within the preceding four (4) months changed its name, identity or
structure.
3.1.21 Payment of Wages. Each Borrower represents and warrants
----------------
that all currently owed wages to employees have been paid, and agrees
and covenants that all wages to employees will be paid as and when due.
3.1.22 Year 2000 Problem.1.22 Year 2000 Problem.1.22 Year 2000
----------------- ----------------- ---------
Problem. Each Borrower has reviewed the areas within its businesses and
-------
operations which could be adversely affected by, and have developed or
are developing a program to address on a timely basis, the "Year 2000
Problem" (i.e. the risk that computer applications used by any Borrower
may be unable to recognize and perform properly date-sensitive
functions involving certain dates prior to and any date after December
31, 1999). Based upon such review, each Borrower reasonably believes
that the "Year 2000 Problem" will not have any material adverse effect
or change on the business, operations, property or condition (financial
or otherwise) of the Borrowers taken as a whole or (b) the validity or
enforceability of this Agreement or any of the other Financing
Instruments or the rights or remedies of the Lender hereunder or
thereunder.
3.2 Certain Affirmative Covenants.
-----------------------------
3.2.1 Payment of Obligations. Each Borrower will duly and
-----------------------
punctually pay or cause to be paid, and perform or observe, or cause to
be performed or observed, as the case may be, all of the Obligations
and will pay and perform or observe, or cause to be paid, performed or
observed all other duties or liabilities of any kind of such Borrower
to the Lender, under or as provided in the Financing Instruments, or
otherwise by agreement or applicable law.
3.2.2 Books and Records. Each Borrower will maintain its
------------------
financial books and records in an accurate, up-to-date, complete and
standardized fashion in accordance with GAAP consistently applied, and
in accordance with any state or federal regulatory requirements
applicable to such Borrower's business or activities.
3.2.3 Inspection. The Borrowers will, at all reasonable times
----------
during regular business hours, and upon reasonable advance notice,
permit the Lender and its agents to (a) visit and inspect the
properties and assets of the Borrowers, (b) examine and make copies of
and take abstracts from the books and records of the Borrowers and (c)
arrange for verification of the Accounts of the Borrowers under
reasonable procedures. Without limiting the foregoing, the Lender may
conduct as many commercial credit examinations of the Borrowers as it
reasonably deems necessary, whether or not any Event of Default exists,
and the Borrowers will reimburse the Lender for all reasonable fees,
costs and expenses incurred or otherwise charged by the
-23-
Lender with respect to each such credit examination; provided, however
-----------------
that, so long as no Event of Default shall have occurred and is
continuing, for each such credit examination, the obligation of the
Borrowers to pay standard daily rate fees shall not exceed the amount
of such standard daily rate fees which the Lender reasonably and
customarily charges for such a credit examination conducted over a
period of eight days for the balance of calendar 1999 after the date
hereof, and 24 days per calendar year for the year 2000 and thereafter
(and the foregoing limitations apply only to standard daily rate fees,
and is not intended to limit costs and expenses, including travel
expenses, regardless of the number of examination days charged to
Borrowers).
3.2.4 Commercial Purposes. All advances under the Loans shall
-------------------
be used exclusively for the business purposes and operations of the
Borrowers and shall not in any respect be used for personal, family or
household purposes.
3.2.5 Notice of Adverse Matters. Each Borrower will,
-----------------------------
immediately upon learning thereof, report to the Lender all matters
materially adversely affecting any Borrower's business or financial
condition or assets or property, including, without limitation, any
damage or destruction of any material amount of any Borrower's assets
by fire or other casualty, whether or not insured against.
3.2.6 Principal Lending Business. Each Borrower will use the
---------------------------
Lender as its sole lender of account and depository for its main
operating accounts (except for investment accounts); provided however
that all of the Borrowers (other than BBI) may maintain checking
accounts at banks other than the Lender for purposes of handling their
accounts payable and payroll.
3.2.7 Maintenance of Corporate Existence; Compliance with
-------------------------------------------------------
Laws. Each Borrower will maintain and keep in full force its corporate
----
existence and good standing and comply with all laws, regulations and
orders of the United States and of any state or states, and other
political subdivision thereof, and of any other governmental authority
which may have jurisdiction over such Borrower or its properties or
businesses.
3.2.8 Payment of Taxes and Filing of Returns. Each Borrower
--------------------------------------
will pay when due all taxes, including without limitation all real and
personal property taxes, assessments and charges and all franchise,
income, unemployment, old age benefit, withholding, sales and other
taxes assessed against it or any of its properties, and otherwise
payable by it, at such times and in such manner as is necessary to
prevent any penalty from accruing or any Lien or charge from attaching
to its properties. Each Borrower shall prepare and file when due all
federal, state and local tax, informational and other governmental
returns, reports, extensions, and filings, as may be applicable to such
Borrower. The provisions of this subsection, however, shall not
preclude any Borrower from contesting in good faith and by expeditious
process any such tax, and the Borrowers shall not be in default under
this subsection by reason of the existence of a Lien for taxes not then
due, all provided that: (a) an adequate reserve therefor is maintained
on the books of the Borrowers; (b) the Lender has been notified in
writing by BBI of such contest; (c) the enforcement of any and all
Liens for non-payment of such taxes is effectively stayed; (d) the
Lender is reasonably satisfied that the Borrowers have reasonable basis
for such contest or dispute; and (e) the Borrowers shall immediately
pay the full amount of such charges and claims in the event any
Borrower's contest or dispute is unsuccessful.
-24-
3.2.9 Maintenance of Property and Assets. Each Borrower will
----------------------------------
safeguard, protect and preserve its property and assets for the benefit
of the Lender, will keep its property and assets free from any adverse
lien, security interest or encumbrance, will keep all tangible property
in good working order and repair, will preserve all beneficial contract
rights, will take commercially reasonable steps to collect all of its
Accounts, and will not waste or destroy any of its property or assets
or any part thereof; and each Borrower will otherwise preserve,
maintain and protect its rights and keep its property and assets in
good repair, working order and condition, and capable of
identification, and make (or cause to be made) all needful and proper
repairs or renewals, replacements, additions and improvements thereto,
and shall use its assets only in the ordinary course of business.
3.2.10 Collection Costs; Legal Fees. The Borrowers agree to
------------------------------
pay, and to reimburse the Lender, on demand, for all fees, costs and
expenses (including, without limitation, attorneys' reasonable fees and
expenses) incurred or paid by the Lender in connection with the
preparation, negotiation, interpretation or amendment of this
Agreement, and of any or all of the Financing Instruments, and of any
other instrument, agreement or document executed and delivered pursuant
thereto or in connection therewith, and for any and all such fees,
costs and expenses incurred in connection with collection of the
Obligations or the enforcement of the Lender's rights and remedies
under this Agreement or any of the Financing Instruments or otherwise
against any Borrower, or in the defense of any action against the
Lender with respect to the Lender's rights or remedies in respect of
any Obligation; and all of the foregoing fees, costs, and expenses
shall be part of the Obligations secured by this Agreement, and the
other Financing Instruments.
3.2.11 Insurance. Each Borrower will maintain insurance at all
---------
times with financially sound and reputable companies as are reasonably
satisfactory to the Lender, in such amounts and against such risks as
are customarily insured against by businesses operating in a similar
line of business in a similar area, and consistent with sound business
practice, in no event less than the greater of (a) the amount required
to avoid coinsurance or (b) the total aggregate outstanding principal
Indebtedness owing by the Borrowers to the Lender, including without
limitation casualty insurance covering any Borrower's property and
assets against the hazards of fire, flood, sprinkler leakage, burglary,
theft, pilferage, loss in transit, those hazards covered by extended
coverage, and such other hazards as the Lender may require, all such
insurance to be in such form, for such periods and with such companies
as shall be reasonably acceptable to the Lender. All premiums thereon
shall be paid by the Borrowers and if any Borrower fails to do so, the
Lender may at its option (but without obligation) procure such
insurance and charge the cost to the Main Operating Account; provided,
---------
however, that any such payment by the Lender shall not constitute
-------
satisfaction of any Borrower's obligations with respect to payment
hereunder, or a waiver by the Lender of any Event of Default with
respect to such non-payment. In order to evidence compliance with the
insurance coverages required under this subsection 3.2.11, BBI shall
deliver to the Lender one or more certificates of insurance for all
such casualty insurance policies and endorsements thereto. Annually
thereafter, BBI shall deliver certificates of such insurance coverages
to the Lender, along with satisfactory evidence of general liability,
products liability, workmen compensation and other insurance coverage,
in form and substance satisfactory to the Lender.
3.2.12 Further Agreements; Compliance With Other Agreements;
Payment of Other Obligations; Tax Returns; Notice of Litigation and of
Events of Default.
-25-
Each Borrower will:
3.2.12.1 from time to time execute and deliver or
cause to be executed and delivered, and furnish to the Lender
such other agreements, documents, instruments or statements,
and do or cause to be done such other acts as the Lender may
reasonably request, to effect, confirm and secure to the
Lender all rights and advantages intended by this Agreement
and the Financing Instruments;
3.2.12.2 comply with all leases, and with all other
agreements to which any Borrower is a party if a default under
any such agreement could materially adversely affect any of
such Borrower's property and assets;
3.2.12.3 generally pay all other debts and
liabilities as they become due (except for liabilities, other
than the Obligations, being contested in good faith for which
adequate provision has been made on the books of any Borrower,
provided that all enforcement proceedings are effectively
stayed pending such contest) and not permit the acceleration
of any Indebtedness owed by any Borrower to any Person; and
3.2.12.4 cause BBI to give written notice to the
Lender within ten (10) days of the occurrence thereof of any
litigation filed by or against any such Borrower which claims
in connection therewith exceed, either individually or when
aggregated with other existing litigation filed by or against
the Borrowers, the sum of Twenty-Five Thousand Dollars
($25,000), and the occurrence or existence of any Event of
Default hereunder, or the existence of any situation or state
of facts which, either with notice or lapse of time, or both
would constitute an Event of Default hereunder, and the action
such Borrower has taken or proposes to take with respect
thereto, all provided that the receipt of such notice shall
not limit or impair, in any way the Lender's rights hereunder.
3.2.13 Certain Environmental Matters. Each Borrower shall:
-----------------------------
3.2.13.1 not store (except in compliance with all
laws, ordinances, and regulations pertaining thereto), or
dispose of any hazardous material or oil on any site or vessel
owned, occupied, or operated by any such Borrower or by any
Person for whose conduct the Borrower is responsible;
3.2.13.2 neither directly nor indirectly transport or
arrange for the transport of any hazardous material or oil
except in compliance with all laws, ordinances and regulations
pertaining thereto;
3.2.13.3 shall cause BBI to provide promptly to the
Lender with written notice: (a) upon such Borrower's obtaining
knowledge of any potential or known release, or threat of
release, in violation of any federal, state or local law,
ordinance or regulation pertaining thereto, of any hazardous
material or oil at or from any site or vessel owned, occupied
or operated by such Borrower, or by any Person for whose
conduct such Borrower is responsible or whose liability may
result in any lien on any Collateral; (b) upon such Borrower's
receipt of any notice to such effect from any federal, state
or other governmental authority; or (c) upon such Borrower's
obtaining knowledge of any incurrence of any expense or loss
by such governmental authority in connection with the
assessment, containment or removal of any hazardous material
or oil for which expense
-26-
or loss such Borrower may be liable or for which expense a
Lien may be imposed on any Collateral.
3.2.14 Changes in Master Disclosure Schedule. BBI shall
-----------------------------------------
promptly notify the Lender in writing of any changes in or additions to
the information set forth in the Master Disclosure Schedule.
--------------------------
3.2.15 Pledge of After Acquired PropertyPledge of After
------------------------------------------------------
Acquired PropertyPledge of After Acquired Property. If at any time
------------------------------------------------------
following the date hereof, any Borrower shall acquire property of any
nature whatsoever having a value in excess of One Hundred Thousand and
00/100 Dollars ($100,000.00) which is intended by the terms of the
applicable Security Document to be, but is not, subject to the Liens
created by the Security Documents, such Borrower shall, as soon as
possible and in no event later than thirty (30) days after the relevant
acquisition date and, to the extent permitted by applicable law, grant
to the Lender a first priority (subject to Permitted Liens) Lien on
such property as collateral security for the Obligations pursuant to
documentation reasonably satisfactory in form and substance to the
Lender. The Borrower, at its own expense, shall execute, acknowledge
and deliver, or cause the execution, acknowledgement and delivery of,
and thereafter register, file or record in an appropriate governmental
office, any document or instrument (including legal opinions, title
insurance, consents and corporate documents) and take all such actions
reasonably deemed by the Lender to be necessary or desirable to ensure
the creation, priority and perfection of such Lien.
3.2.16 New Subsidiaries. The Borrowers shall cause, at their
-----------------
sole cost and expense, each new Subsidiary of any Borrower created or
acquired on or after the date hereof, promptly upon such creation or
acquisition, to execute and deliver to the Lender the following
agreements and documents, which agreements and documents shall be in
form and substance reasonably satisfactory to the Lender:
(a) a certain joinder and assumption agreement by and
between each such new Subsidiary, the Lender, BBI and the
other Borrowers, pursuant to which, among other things, each
such new Subsidiary shall (i) join in this Agreement, the
Note, the Security Agreement and all of the other Financing
Instruments and assume all of the Obligations hereunder and
thereunder, all as fully and completely as though each such
new Subsidiary was an original Borrower hereunder; (ii) make
to the Lender all of the representations, warranties and
covenants described in this Agreement, the Note, the Security
Agreement and all of the other Financing Instruments which
have made hereunder and thereunder by the Borrowers; and (iii)
agree to be bound by and to observe all of the terms and
conditions of this Agreement, the Note, the Security Agreement
and all of the other Financing Instruments, jointly and
severally with all of the Borrowers;
(b) any and all UCC financing statements which the
Lender deems necessary and appropriate in order to perfect its
first priority perfected security interests in all of the
assets of such Subsidiary; and
(c) such other agreements, documents, financing
statements, instruments, opinions and certificates and
completion of such other matters, as the Lender may reasonably
deem necessary or appropriate.
-27-
Promptly upon the creation or acquisition of any Subsidiary created or
acquired after the date hereof, the Borrowers shall cause, at their sole cost
and expense, all of the issued and outstanding shares of capital stock,
membership interests and other equity interests of each such Subsidiary to be
pledged to the Lender so that the Lender has a first priority perfected security
interest in all such shares, membership interests and other equity interests.
3.3 General Negative Covenants.
--------------------------
3.3.1 Other Debt. No Borrower will issue any evidence of
-----------
Indebtedness or create, or incur, assume, guarantee, become
contingently liable for or suffer to exist, any Indebtedness except:
(a) Indebtedness to the Lender arising under any of
the Financing Instruments;
(b) Purchase Money Indebtedness of the Borrowers and
Indebtedness of the Borrowers incurred with respect to any
Capitalized Lease of any non-real estate property and/or any
Operating Lease of any non-real estate property which
collectively are not in excess of the aggregate sum of One
Million and 00/100 Dollars ($1,000,000.00);
(c) Indebtedness with respect to taxes, assessments,
governmental charges or levies which are being contested in
good faith by appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on the books of
such Borrower in conformity with GAAP; and
(d) current liabilities which are incurred in the
ordinary course of business and which are not incurred through
(i) the borrowing of money or (ii) the obtaining of credit
except for credit on an open account basis customarily
extended and in fact extended in connection with normal
purchases of goods and services.
No Borrower shall enter into or participate in any agreement,
arrangement or transaction with any Person without the prior written
consent of the Lender, if the effect of such agreement, arrangement or
transaction has, or could reasonably be expected in the future to have,
the effect of (i) rendering such Borrower either primarily or
contingently liable for any Indebtedness or other obligation of any
Person (ii) transferring any asset of such Borrower to or for the
benefit of any Person (except as may be otherwise expressly permitted
by this Agreement); or (iii) subjecting any of such Borrower's property
or assets to any lien in favor of any third party (other than Permitted
Liens), including but not limited to any creditor or obligee of any
Person.
3.3.2 Payment of Dividends. No Borrower will pay any dividends
--------------------
either in cash or kind on any class of its stock nor make any
distribution on account of their stock, nor redeem, purchase or
otherwise acquire directly or indirectly any of their stock, without
prior written notice to and written consent of the Lender except in
compliance with this subparagraph 3.3.2.
3.3.3 Loans By the Borrower. No Borrower will make any loan or
---------------------
advances to any Person, including, without limitation, its officers and
employees.
-28-
3.3.4 Investments. Without the prior written consent of the
-----------
Lender, no Borrower will make any Investments other than short term,
investment grade securities, including money market funds, and other
than Permitted Acquisition Ventures.
3.3.5 Mergers. No Borrower will merge or consolidate or be
-------
merged or consolidated with or into any other Person, or be a party to
any reorganization, change in legal structure or any sale, lease,
transfer or other disposition of all or substantially all of its
assets.
3.3.6 Sales of Assets. No Borrower will sell, lease, or
----------------
dispose of any of its property or assets except for sales of Inventory
in the ordinary and usual course of its business, and for Equipment no
longer needed in the operation of its business, so long as such
Borrower receives therefor a sum substantially equal to such
Equipment's fair value.
3.3.7 Negative Pledge. Without the prior written consent of
----------------
the Lender, no Borrower will:
3.3.7.1 grant, create, incur, assume or suffer to
exist, or permit any Person, whether by means of a power of
attorney or otherwise, to grant, create, incur, assume or
suffer to exist, any Lien, upon or with respect to, any Real
Property of any such Borrower except for Permitted Liens; or
3.3.7.2 sign or file, or permit any Person, whether
by means of a power of attorney or otherwise, to sign or file,
under the Uniform Commercial Code of any jurisdiction, any
financing statement which names any such Borrower as a debtor,
or sign, or permit any Person, whether by means of a power of
attorney or otherwise, to sign any security agreement
authorizing any secured party thereunder to file such
financing statement, except in connection with Permitted
Liens; or
3.3.7.3 agree with any other Person that any such
Borrower will not undertake activities prohibited pursuant to
sub-subsections 3.3.7.1 and 3.3.7.2 hereof.
To the extent that any Borrower violates the provisions of
this subsection 3.3.7 by granting or assigning in favor of any Person,
a Lien, upon or with respect to, any Real Property of such Borrower,
such Lien is hereby deemed to be a Lien in favor of, and for the sole
benefit of, the Lender, until all of the Obligations have been paid in
full, and in the event that any Person receives any sums from, or as a
result of, the sale, liquidation or distribution of all or any portion
of any Real Property of the Borrower on account of such Lien, such sums
are hereby deemed to be held in trust by such Person for the sole
benefit of the Lender, and shall be promptly delivered to the Lender
upon receipt, and shall not be commingled with any other funds of such
Person.
3.3.8 No Liens; Permitted Liens. No Borrower will grant or
---------------------------
assume or suffer to exist any Lien with respect to any of its assets or
property, tangible or intangible, whether now owned or hereafter
acquired, except for Liens granted to the Lender pursuant to this
Agreement, and except for the following (collectively, the "Permitted
---------
Liens"): (a) liens in respect of taxes, fees, assessments and other
-----
governmental charges not yet due and payable, or with respect to which
the validity thereof is currently being contested in good faith by
appropriate proceedings in accordance with the provisions of this
Agreement; (b) landlord's liens in respect of rent not in
-29-
default or Liens in respect of pledges or deposits under worker's
compensation, unemployment insurance, social security laws or similar
legislation or in connection with appeal and similar bonds incidental
to litigation, mechanics', laborers', and materialmen's and similar
liens, if the obligations secured by such liens are not then
delinquent, and liens securing statutory obligations incidental to the
conduct of the business of any Borrower which do not in the aggregate
materially detract from the value of the property of such Borrower or
materially impair the use thereof in the operation of their respective
businesses; (c) judgment liens which shall not have been in existence
for a period longer than thirty (30) days after the creation thereof
(provided no foreclosure or execution action shall have been commenced)
or if a stay of execution shall have been obtained for a period longer
than thirty days after the expiration of such stay (provided no
foreclosure or execution action shall have yet been commenced) or
judgment liens for which any Borrower has obtained a bond in favor of
the judgment holder in the full amount of the lien and which bond is
otherwise satisfactory to Lender; and (d) Liens otherwise permitted
pursuant to subsection 3.3.1 hereof.
3.3.9 Continuance of Business. No Borrower will engage in any
-----------------------
business other than the businesses in which it is currently engaged or
a business reasonably allied thereto, and each Borrower will continue
to conduct and operate its business actively and in good faith.
SECTION 4
FINANCIAL AND REPORTING COVENANTS
---------------------------------
4.1 Reporting Covenants. BBI shall cause to be furnished to the Lender
-------------------
all of the following reports, statements, certificates and information (said
reports, statements, certificates and information are hereinafter referred to
collectively as the "Reporting Requirements"):
----------------------
4.1.1 Quarterly Financial Statements. As soon as available and
------------------------------
are filed with the SEC but in any event within forty-five (45) days
after the close of each calendar quarter of its fiscal year,
consolidated and consolidating (except the last in each fiscal year)
financial statements of the Borrowers, including balance sheets, and
statements of profit and loss and statements of cash flows reflecting
the financial condition of the Borrowers at the end of such period and
the results of its operations for such period and for the period from
the beginning of the current fiscal year to the end of such period, in
comparative form with figures for the corresponding periods of the
previous fiscal year. Such quarterly statements may be furnished to the
Lender in the form of BBI's quarterly filings with the SEC under the
`34 Act, on Form 10-Q.
4.1.2 Annual Financial Statements. As soon as available and
-----------------------------
are filed with the SEC but in any event within ninety (90) days after
the close of each fiscal year, consolidated and consolidating financial
statements of the Borrowers, including balance sheets, statements of
profit and loss, statements of cash flows, and statements of changes in
shareholders' equity, reflecting the financial condition of the
Borrowers at the end of such fiscal year and the results of its
operations during such fiscal year (in each case setting forth in
comparative form the corresponding figures for the preceding year) and,
in the case of the consolidated financial statements, audited and
reported upon (in form generally recognized as "unqualified") by
PricewaterhouseCoopers LLP, or such other independent certified public
accountant of nationally recognized standing, prepared in accordance
with GAAP, applied consistently in the preparation thereof and with
prior periods, together with, upon request of the Lender, an opinion of
such certified public accountant that to its knowledge there has
occurred no event which
-30-
constitutes, or which with the lapse of time or giving of notice or
both would constitute an Event of Default hereunder, or, if the
contrary appears to be true, a statement of such Event of Default and
the nature thereof. Such annual statements may be furnished to the
Lender in the form of BBI's annual filings with the SEC under the `34
Act on Form 10-K.
4.1.3 Compliance Certificate. Upon request of the Lender, but
----------------------
in any event concurrently with the delivery of the financial statements
referred to in subsections 4.1.1 and 4.1.2 of this Agreement, a
Compliance Certificate (the "Compliance Certificate"), in the form
-----------------------
attached hereto as Schedule 4.1.3 and incorporated herein by reference,
--------------
as completed and signed by a Responsible Officer of BBI.
4.1.4 Borrowing Base Certificate. Not later twenty (20) days
---------------------------
after the close of each calendar month the following: (i) a Borrowing
Base Certificate, in the form attached hereto as Schedule 4.1.4 and
---------------
incorporated herein by reference as completed and signed by a
Responsible Officer of BBI; and (ii) a report summarizing (x) all
agings of all Accounts, and (y) a detailed breakdown of all Inventory,
all as completed and signed by a Responsible Officer of BBI, and in
such form and with such detail or information as the Lender may
reasonably request, from time to time.
4.1.5 Other Information. In addition to the foregoing, BBI
------------------
will furnish (or cause to be furnished to) the Lender from time to time
with such financial information and statements as the Lender may
reasonably request, and, upon request of the Lender, with copies of all
financial statements and financial reports that any Borrower sends or
makes available to its members of its Board of Directors or to any
governmental authority, together with copies of all management letters
of substance and other reports of substance submitted to any Borrower
by its independent accountants in connection with any annual or interim
audit; and, upon request of the Lender, each Borrower will authorize
and direct all accountants and auditors to exhibit and deliver copies
of any financial statements, trial balances or other accounting records
of any sort, and to disclose to the Lender any information they may
have concerning any Borrower's financial or business condition. In
addition, BBI will furnish to the Lender, promptly after the same are
delivered to its stockholders or the SEC, copies of all proxy
statements, financial statements and reports as any Borrower shall send
to its stockholders or as any Borrower may file with the SEC or any
governmental authority at any time having jurisdiction over any
Borrower.
-31-
4.2 Financial Covenants.
Each Borrower shall maintain and observe all of the following financial
covenants, in each case determined and classified on a consolidated basis in
accordance with GAAP applied on a consistent basis at the applicable dates or
during the applicable time periods indicated in the following table (the
"Financial Covenants"):
----------------------------------------- ----------------------------- --------------------------------------------
APPLICABLE DATE OR TIME APPLICABLE RATIOS
FINANCIAL COVENANTS PERIOD OR MONETARY REQUIREMENTS
----------------------------------------- ----------------------------- --------------------------------------------
Ratio of Consolidated Total Liabilities For each fiscal quarter, to Not to exceed 1.50 to 1.00 for each fiscal
to Consolidated Tangible Net Worth be determined as of the quarter
last day of each such
fiscal quarter, commencing
with the fiscal quarter
ending March 31, 1999
----------------------------------------- ----------------------------- --------------------------------------------
Capital Expenditures For each fiscal year, to be Not to exceed in the aggregate
determined as of the last $2,500,000.00 per fiscal year
day of each
such fiscal year,
commencing with the fiscal
year ending
December 31, 1999
----------------------------------------- ----------------------------- --------------------------------------------
Consolidated Net Income For each fiscal quarter, to (a) a Net Loss of not more than
be determined as of the $250,000.00 for the fiscal quarter ending
last day of each such March 31, 1999;
fiscal quarter, commencing
with the fiscal quarter (b) a Net Loss of not more than
ending March 31, 1999 $250,000.00 for the fiscal quarter ending
June 30, 1999;
(c) a Net Loss of not more than $450,000.00
for the fiscal quarter ending September 30,
1999, and for the fiscal six months ending
December 31, 1999; and
(d) a Net Income of at least $1.00 for the
fiscal quarter ending March 31, 2000 and for
each consecutive fiscal quarter thereafter
----------------------------------------- ----------------------------- --------------------------------------------
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----------------------------------------- ----------------------------- --------------------------------------------
APPLICABLE DATE OR TIME APPLICABLE RATIOS
FINANCIAL COVENANTS PERIOD OR MONETARY REQUIREMENTS
----------------------------------------- ----------------------------- --------------------------------------------
----------------------------------------- ----------------------------- --------------------------------------------
Consolidated Debt Service Ratio For each fiscal quarter, to (a) At least 1.50 to 1.00 for the fiscal
be determined as of the quarter ending March 31, 1999;
last day of each such
fiscal quarter, commencing (b) At least 1.50 to 1.00 for the period
with the fiscal quarter of two (2) consecutive fiscal quarters
ending March 31, 1999 ending June 30, 1999;
(c) At least 1.00 to 1.00 for the period of
three (3) consecutive fiscal quarters ending
September 30, 1999; and
(d) At least 1.50 to 1.00 for each period of
four (4) consecutive quarters ending
December 31, 1999 and on the last day of
each fiscal quarter thereafter
----------------------------------------- ----------------------------- --------------------------------------------
Notwithstanding anything to the contrary in this Agreement to the
contrary, for purposes of making all calculations in connection with the
covenants contained in this subsection 4.2, all accounting terms used herein
shall be interpreted and all accounting determinations hereunder shall be made
in accordance with GAAP consistently applied as in effect on the date of this
Agreement. In the event of any material difference at any time between GAAP in
effect on the date of this Agreement and GAAP from time to time in effect, the
Compliance Certificate required pursuant to subsection 4.1.3 shall include a
reconciliation of the calculations required thereby with the financial
statements being delivered with such certificate.
4.3.3.3 Limitation on Changes in Fiscal YearLimitation on Changes in
--------------------------------------------------------------
Fiscal YearLimitation on Changes in Fiscal Year. No Borrower shall change its
-------------------------------------------------
fiscal year without the prior written consent of the Lender.
SECTION 5
CONDITIONS OF CLOSING
---------------------
The effectiveness of this Agreement and the agreement of the Lender to
make the initial Loan requested to be made by it is subject to the satisfaction,
immediately prior to or concurrently with the making of such Loan on the Closing
Date, of the following conditions precedent:
(a) Financing Instruments. The Lender shall have received this
---------------------
Agreement, the Note and the Security Agreement, each as executed and
delivered by a duly authorized officer of each Borrower, with the
signature of such officer properly witnessed and notarized thereon.
(b) Actions to Perfect Security Interest. The Lender shall
--------------------------------------
have received evidence in form and substance reasonably satisfactory to
it that all filings, recordings, registrations and other actions,
including, without limitation, the filing of duly executed financing
statements on form UCC-1, necessary or, in the opinion of the Lender,
desirable to perfect the security interest
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created by the Security Agreement shall have been completed (or, to the
extent that any such filings, recordings, registrations and other
actions shall not have been completed, arrangements satisfactory to the
Lender for the completion thereof shall have been made).
(c) Pledged Stock; Stock Powers. The Lender shall have
------------------------------
received the original certificates representing the shares of capital
stock pledged pursuant to the Security Agreement, together with an
undated stock power for each such certificate executed in blank by a
duly authorized officer of each Borrower.
(d) Lien Searches. The Lender shall have received the results
-------------
of a recent search by a Person reasonably satisfactory to the Lender of
the UCC, judgment and tax lien filings which may have been filed with
respect to real and personal property of each Borrower in the
jurisdictions set forth in Schedule 5(d), and the results of such
--------------
search shall be satisfactory to the Lender.
(e) Insurance. The Lender shall have received evidence in form
---------
and substance satisfactory to it that all of the requirements of this
Agreement and the Security Agreement requiring the maintenance of
insurance shall have been satisfied.
(f) Authority Documents. The Lender shall have received a copy
-------------------
of the resolutions, in form and substance satisfactory to the Lender,
of the Board of Directors of each Borrower authorizing (i) the
execution, delivery and performance of this Agreement and the other
Financing Instruments to which it is a party, (ii) the Loans
contemplated hereunder and (iii) the granting by it of the security
interests created pursuant to the Security Documents to which each
Borrower is a party, all as certified by the Clerk or an Assistant
Clerk of each Borrower as of the Closing Date, which certificate shall
be in form and substance reasonably satisfactory to the Lender and
shall state that the resolutions thereby certified have not been
amended, modified, revoked or rescinded.
(g) Incumbency Certificate. The Lender shall have received a
-----------------------
certificate of each Borrower, dated as of the Closing Date, as to the
incumbency and signature of the officers of each such Borrower
executing any Financing Instrument reasonably satisfactory in form and
substance to the Lender, executed by the President or any Vice
President and the Clerk or any Assistant Clerk of each such Borrower.
(h) Corporate Documents. The Lender shall have received true
--------------------
and complete copies of the articles of organization and by-laws of each
Borrower, as certified as of the Closing Date as complete and correct
copies thereof by the Clerk or an Assistant Clerk of each such
Borrower.
(i) Legal Existence, Good Standing and Foreign Qualification
----------------------------------------------------------
Certificates. The Lender shall have received certificates of legal
------------
existence, good standing and foreign qualification for each Borrower,
all of recent date issued by the appropriate Secretary of State.
(j) Borrowing Base Certificate. The Lender shall have received
--------------------------
(i) a borrowing base certificate, in the form referred to in subsection
4.1.4 above and (ii) a report summarizing all agings of Account and all
Inventory, in such form and with such detail or information as the
Lender may reasonably request, all as completed and signed by a
Responsible Officer of BBI.
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(k) Legal Opinion. The Lender shall have received an executed
-------------
legal opinion of Xxxxxxx, Xxxxx & Xxxxx, LLP, counsel to the Borrowers,
covering such matters related to the transactions contemplated by this
Agreement and the other Financing Instruments as the Lender may
reasonably request. Such legal opinion shall be in a form and substance
reasonably acceptable to the Lender and its counsel.
(l) Fees and Expenses. The Lender shall have received (i) the
-----------------
Restructuring Fee; and (ii) reimbursement or payment of all legal fees,
costs and expenses incurred by the Lender in connection with the
transactions contemplated herein.
SECTION 6
EVENTS OF DEFAULT
-----------------
Notwithstanding any provision to the contrary in any instrument
evidencing any Obligation, the occurrence of any one or more of the following
shall constitute and mean an "Event of Default" under this Agreement:
----------------
6.1 Any statement, report, certificate, representation or warranty,
made or furnished by any Borrower in, or in connection with the execution and
delivery of this Agreement or any of the Financing Instruments, or in compliance
with the provisions of this Agreement or any of the Financing Instruments, or
otherwise furnished to the Lender at any time, shall prove to have been false or
erroneous when made in any material respect, or omits or fails to state a
material fact necessary in order to make the statements contained therein or
herein not misleading;
6.2 Any Borrower shall fail to make payment of the principal or
interest on the Loans when and as due;
6.3 Any Borrower shall fail to make payment of any other Obligation
within fifteen (15) days of the date when and as due;
6.4 Any Borrower shall fail to perform, observe, comply with or satisfy
any covenant, agreement or condition contained in this Agreement (other than
payment of any Obligation) not cured within thirty (30) days of the earlier of
(i) notice by the Lender to BBI or (ii) actual knowledge by any Borrower of the
occurrence thereof, plus such additional time as may be required to cure such
default because of delays beyond any Borrower's control, if such default is
susceptible of being cured and if the Borrowers are acting in good faith and is
making diligent efforts to cure such default; provided, however, that such cure
------------------
period shall not exceed the aggregate of ninety (90) days and shall not apply
to: (a) any transfer or voluntary encumbrance of assets; (b) any failure with
respect to any requirement of any Borrower to give notice to the Lender as
provided herein; (c) the Reporting Requirements or the Financial Covenants; or
(d) any event which is otherwise an Event of Default pursuant to any other
subsections of this Section 6; and such cure period shall run concurrently with,
and not in addition to, any and all applicable grace or cure periods contained
in any of the other Financing Instruments;
6.5 Any Borrower shall default in payment of (a) any obligation under
any lease which default could materially adversely affect the business
operations of any Borrower; or (b) any obligation or Indebtedness to any other
Person at any time outstanding, continued for a period sufficient to cause the
acceleration of the maturity of such obligation or Indebtedness (whether or not
such obligation or
-35-
Indebtedness is actually accelerated) and such acceleration could materially
adversely affect the business operations of any Borrower;
6.6 Failure, generally, of any Borrower to pay its debts when due and
such failure could materially adversely affect the business operations of any
Borrower; or the taking of possession, custody or control of, or the attachment
by judicial process of, or issuance of an injunction against, or creation of any
other Lien (other than in favor of the Lender) upon, any part of any Borrower's
property or assets by any Person, which action is not dissolved within thirty
(30) days;
6.7 Any Borrower:
6.7.1 files a voluntary petition in bankruptcy (which term
includes any action under Title 11 of the United States Code entitled
"Bankruptcy" and commonly referred to as the "Bankruptcy Code"); or
---------------
6.7.2 is adjudicated a bankrupt or insolvent; or
6.7.3 files any petition or answers seeking or acquiescing in
any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief for itself under any law
relating to bankruptcy, insolvency or other relief for debtors; or
6.7.4 seeks or consents to or acquiesces in the appointment of
any trustee, receiver, master or liquidator (or other similar official)
of itself or of all or any substantial part of its property; or
6.7.5 makes any general assignment for the benefit of
creditors; or
6.7.6 admits in writing to its general inability to pay its
debts as they become due;
6.8 Commencement of any bankruptcy, insolvency, or other creditor's
relief proceedings against, or entry by a court of competent jurisdiction of any
order, judgment or decree approving a petition filed against any Borrower,
seeking any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any present or future federal or state law
or regulation relating to bankruptcy, insolvency, or other relief for debtors,
which proceeding, order, judgment or decree remains unvacated or unstated for an
aggregate of thirty (30) days, whether or not consecutive, from the date of
entry thereof;
6.9 A material portion of any Borrower's assets shall be damaged by
fire or other casualty, the restoration or replacement cost of which damage
exceeds, in the aggregate, the amount of insurance proceeds readily available
(less applicable deductibles and plus capital in an amount which, in Lender's
sole discretion (a) is available for such purposes and (b) expenditure of such
capital for such purposes is appropriate under the circumstances) for such
restoration or replacement;
6.10 The issuance or existence of any judgment or judgments against any
Borrower by any court of competent jurisdiction, or other governmental authority
of competent jurisdiction, aggregating in excess of One Hundred Thousand Dollars
($100,000) in any fiscal year, and not covered by insurance, not paid within
thirty (30) days of the date thereof;
-36-
6.11 The loss, suspension or revocation of any governmental license
required or necessary in connection with the operation of any Borrower's
business;
6.12 Service of any process upon the Lender seeking to attach by means
of trustee process any funds of any Borrower or of any Affiliate on deposit with
Lender, which attachment or process is not dissolved within thirty (30) days; or
6.13 The occurrence of any change in any Borrower's condition or
affairs (financial or otherwise) that, in the Lender's reasonable opinion,
impairs the Lender's security or materially increases the Lender's risk under
this Agreement or the Financing Instruments, or the occurrence of any event or
circumstance with respect to any Borrower such that the Lender reasonably deems
itself insecure.
SECTION 7
REMEDIES
--------
7.1 General Remedies. In addition to and without in any way limiting
-----------------
any other rights and remedies available to the Lender under this Agreement prior
to an Event of Default, or any other rights and remedies available to the Lender
(whether prior to or after an Event of Default) under any of the Financing
Instruments or under applicable law or in equity, upon and at any time or times
after the occurrence of any Event of Default hereunder:
7.1.1 the Lender may declare and cause all or any portion of
the Obligations to be immediately due and payable;
7.1.2 the Lender may decline to honor the credit of any
Borrower or may refuse to make further advances to any Borrower;
7.1.3 the Lender shall have the right to apply to the
Obligations any deposits or other sums at any time credited by or due
from the Lender to any Borrower; and
7.1.4 the Lender may treat any or all of the Financing
Instruments as being in default and may exercise any rights and
remedies thereunder as it shall deem appropriate.
7.2 Cumulative Remedies. The enumeration of rights and remedies herein,
-------------------
and in each of the Financing Instruments, shall be cumulative and not exclusive,
and shall be in addition to, and shall not exclusive of, any other rights or
remedies the Lender may have, whether under the UCC or other applicable law, or
in equity, or otherwise. The Lender shall, in its discretion, determine its
choice of rights and remedies and the order in which they shall be exercised,
and whether or not, and which, Collateral is to be proceeded against, and in
which order. The exercise of any right or remedy shall not preclude the exercise
of others.
SECTION 8
WAIVER
------
8.1 Waiver By the Borrowers. Each Borrower hereby waives demand,
------------------------
presentment, protest and notice thereof with respect to any and all instruments,
notice of acceptance hereof, notice of Loan or
-37-
advances made, credit extended, or any other action taking in reliance herein,
and all other notices and demands of any kind except as expressly set forth
herein.
8.2 Lender's Option To Waive. The Lender may at its sole discretion, at
------------------------
any time and from time to time, waive any of the requirements or provisions
hereof, or contained within any of the Financing Instruments, or any default
hereunder or under any of the Financing Instruments, but only by an express
written waiver signed by an authorized officer of the Lender; no act other than
an express written waiver, nor any failure to act or delay by the Lender shall
constitute a waiver of any requirement or provision of, or any default under, or
any of the Lender's rights or remedies under, this Agreement or any of the
Financing Instruments. No single or partial waiver by the Lender of any
provision of this Agreement or any of the Financing Instruments, or any breach
or default thereunder, or of any right or remedy which the Lender may have,
shall operate as a waiver of any other provision, breach, default, right or
remedy, nor of the same one on any future occasion.
SECTION 9
MISCELLANEOUS
-------------
9.1 Deposits As Collateral; Set-Off. Any and all deposits, Deposit
---------------------------------
Accounts, and other sums at any time credited by or due to any Borrower from the
Lender or any of its banking or lending affiliates or any lender acting as a
participant under any loan arrangement between the Lender and any Borrower, and
any cash, certificates of deposit, securities, instruments, documents, policies
and certificates of insurance, goods, Accounts, choses in action, Chattel Paper,
and other property of any Borrower in the possession or control of, or in
transit to or from, the Lender, or any of its banking or lending affiliates, or
any lender acting as a participant under any loan arrangement between the Lender
and any Borrower, or any third party acting on the Lender's behalf, regardless
of the reason the Lender, or such other party, receives or is to receive the
same (whether in pledge, or for safekeeping, or as agent for collection or
transmission or otherwise) and regardless of whether the Lender has
conditionally released the same, shall at all times constitute security for any
and all Obligations, and may be applied or set off against such Obligations at
any time, whether or not other collateral is available to the Lender.
9.2 Survival of Covenants; Binding Effect. All agreements,
--------------------------------------------
representations, covenants and warranties made by any Borrower in this
Agreement, the Financing Instruments, or in any certificate or other document
delivered to the Lender in connection herewith shall survive the termination of
this Agreement and survive the execution and delivery of this Agreement, and
shall remain in full force and effect until all Obligations to the Lender have
been paid in full and satisfied, and the security interests and rights granted
to the Lender in any collateral and its rights and remedies hereunder and under
the Financing Instruments shall continue in full force and effect
notwithstanding the fact that any Borrower's Loan account may from time to time
be in a zero or credit position, until all Obligations have been satisfied. All
the terms and provisions of this Agreement and the Financing Instruments shall
be binding upon and inure to and be enforceable by and against the parties
hereto and their respective successors and assigns.
9.3 Termination of Agreement.
------------------------
9.3.1 This Agreement shall terminate upon the final and
irrevocable payment in full by the Borrowers of the Obligations, or
upon acceleration of the Obligations pursuant to the terms of this
Agreement.
-38-
9.3.2 The termination of this Agreement shall not affect any
rights of any Borrower or the Lender arising prior to the effective
date of such termination, as the case may be, and the provisions hereof
shall continue to be fully operative until all transactions entered
into, rights created or Obligations incurred prior to such occurrence
or termination shall have been fully disposed of, concluded or
liquidated. Upon termination of this Agreement, all Obligations
(including, without limitation, the Loans) shall be due and payable
without notice or demand. The security interests, liens and rights
granted to the Lender hereunder and under any instrument or document
delivered pursuant hereto or in connection herewith shall continue in
full force and effect, notwithstanding the termination of this
Agreement or the fact that any Borrower's Accounts may from time to
time be temporarily in a credit position, until all of the Obligations
have been paid in full after the termination hereof. All
representations, warranties, covenants, waivers and agreements
contained herein shall survive the termination hereof unless otherwise
provided.
Notwithstanding the foregoing, if after receipt of any payment
of all or any part of the Obligations, the Lender is for any reason
compelled to surrender such payment to any person or entity because
such payment is determined to be void or voidable as a preference,
impermissible setoff, a diversion of trust funds or for any other
reason, this Agreement shall continue in full force and each Borrower
shall be liable to, and shall indemnify and hold the Lender harmless
for, the amount of such payment surrendered until the Lender shall have
been finally and irrevocably paid in full. The provisions of the
foregoing sentence shall be and remain effective notwithstanding any
contrary action which may have been taken by the Lender in reliance
upon such payment, and any such contrary action so taken shall be
without prejudice to the Lender's rights under this Agreement and shall
be deemed to have been conditioned upon such payment having become
final and irrevocable.
9.4 Conflict of Terms. In the event of any conflict or contradiction
-----------------
between or among any provision or provisions of this Agreement and any provision
or provisions of any of the other Financing Instruments, the provisions of this
Agreement shall govern.
9.5 Prior Discussions; Amendments in Writing; Counterparts; Filing As
-------------------------------------------------------------------
Financing Statement. This Agreement and all other Financing Instruments
--------------------
incorporate all discussions and negotiations between the Borrowers and the
Lender, either express or implied, concerning the matters included herein and
therein, any custom or usage to the contrary notwithstanding. No such
discussions or negotiations shall limit, modify, or otherwise affect the
provisions of the Financing Instruments. This Agreement may be amended or
modified only in writing signed by the parties hereto, and in the case of the
Lender signed by a duly authorized officer thereof. This Agreement may be
executed in two or more counterparts, each of which shall constitute an
original, but such counterparts together shall constitute one and the same
instrument.
9.6 General Indemnification. Each Borrower shall, and does hereby,
------------------------
further indemnify and save the Lender harmless from any and all liabilities,
damages, costs, losses and expenses (including, without limitation, court costs
and attorney's reasonable fees and expenses) that the Lender may sustain or
incur by reason of, relating to or arising out of the preparation of this
Agreement, or in collecting or enforcing the Obligations, or in enforcing any of
Lender's rights or remedies, or in the prosecution or defense of any action or
proceeding concerning any matter growing out of or connected with this
Agreement, any of the Financing Instruments, or the Obligations, or on account
of the Lender's relationship with any Borrower (each of which may be defended,
compromised, settled or pursued by the Lender with counsel of Lender's
selection, at the sole expense of the Borrowers) except for such claims
-39-
which have been determined by a court of competent jurisdiction to have arisen
out of the Lender's gross negligence or bad faith. The within indemnification
shall survive termination of this Agreement. Each Borrower's obligations under
this subsection constitute part of the Obligations secured by the security
interest created by this Agreement and by the other Financing Instruments.
9.7 Destruction of Documents; Jurisdiction. This Agreement and all
----------------------------------------
other Financing Instruments may be reproduced by the Lender by any photographic,
photostatic, microfilm, or similar process, and the Lender may destroy the
original from which any document was so reproduced. Any such reproduction shall
be admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and
whether or not such reproduction was made in the regular course of business).
Each Borrower acknowledges receipt of a true, correct and complete copy or
counterpart of this Agreement.
9.8 Notices. All notices, requests and demands to or upon the
-------
respective parties hereto to be effective shall be in writing (including by
facsimile transmission), and, unless otherwise expressly provided herein, shall
be deemed to have been duly given when delivered by hand, or when sent by
facsimile transmission or by telex, answer back received, or on the first
Business Day after delivery to any overnight delivery service, freight prepaid,
or three (3) Business Days after being sent by certified or registered mail,
return receipt requested, postage prepaid, and addressed as follows, or to such
other address as may be hereafter notified by the respective parties hereto:
(a) If to any Borrower
then: Boston Biomedica, Inc.
000 Xxxx Xxxxxx
Xxxx Xxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxxxx, President
Telecopy No: 000-000-0000
with copies to: Xxxxxxx, Xxxxx & Xxxxx, LLP
Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
Telecopy No: 000-000-0000
(b) If to the Lender, then: BankBoston, N.A.
Middle Market Lending
Worcester Tower
000 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attention: G. Xxxxxxxxxxx Xxxxxx, Director
Mail Stop: MA-CEN 72-18-04
Telecopy No: 000-000-0000
with copies to: Peabody & Xxxxxx LLP
00 Xxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Telecopy No: 000-000-0000
-40-
9.9 Application of Proceeds. The proceeds of any collection, sale or
-----------------------
disposition of the Collateral, or of any other payments received hereunder,
shall be applied toward the Obligations in such order and manner as the Lender
determines in its sole discretion, any statute (the application of which may be
waived or modified by agreement), customs or usage to the contrary
notwithstanding. The Borrowers shall remain liable to the Lender for any
deficiency remaining following such application.
9.10 Continuance of Defaults. As used herein, and in any of the
-------------------------
Financing Instruments, upon any and each occurrence of an Event of Default, such
Event of Default shall be deemed to continue until cured by the Borrowers in
accordance with this Agreement (and the applicable provisions of the Financing
Instruments, as the case may be), and until such time as the Borrowers request
and receive from the Lender the Lender's written acknowledgment that such Event
of Default (as specified in the request) has been cured and is no longer
continuing, which acknowledgment the Lender shall not unreasonably withhold or
delay.
9.11 Severability. If any provision of this Agreement or any of the
------------
Financing Instruments, or any portion of such provision, or the application
thereof to any person or circumstance, shall to any extent be held invalid or
unenforceable, the remainder of this Agreement and the Financing Instruments or
the remainder of such provision and the application thereof to other persons or
circumstances (other than those as to which it is held invalid or unenforceable)
shall not be affected thereby, and each term and provision hereof and of the
Financing Instruments shall be valid and enforced to the fullest extent
permitted by law. To the extent permitted by law, the parties hereto waive any
provision of law which renders any such provision prohibited or unenforceable in
any respect.
9.12 Headings. Headings appearing in this Agreement are intended for
--------
convenience only and do not constitute and shall not be interpreted to be a part
of this Agreement.
9.13 Governing Law; Sealed Instrument. This Agreement is executed and
---------------------------------
delivered in The Commonwealth of Massachusetts, and for all purposes shall be
construed in accordance with and governed by the laws of The Commonwealth of
Massachusetts, and shall take effect as a sealed instrument. Each Borrower
submits itself to the jurisdiction of the Courts of The Commonwealth of
Massachusetts for all purposes with respect to this Agreement and each
Borrower's relationship with the Lender.
9.14 Force Majeure. The Lender shall not be responsible for delays or
-------------
failures in performance hereunder resulting from causes beyond its control,
including without limitation, acts of God, strikes, lockouts, riots, acts of
war, governmental regulations, fire, communication line failures, power
failures, earthquakes or other disasters.
9.15 Joint and Several. All of the obligations and liabilities of each
-----------------
of Borrower under this Agreement and all of the other Financing Instruments are
joint and several.
9.16 Interpretation of Agreement. Should any provision of this
-----------------------------
Agreement or the other Financing Instruments require interpretation or
construction, it is agreed by the parties hereto that the court, administrative
body, or other entity interpreting or construing this Agreement or the other
Financing Instruments shall not apply a presumption that the provisions thereof
shall be more strictly construed against one party by reason of the rule of
construction that a document is to be construed more strictly against the party
who itself or through its agents prepared the same, it being agreed that the
parties and/or their respective attorneys and agents have fully participated in
the preparation of all provisions of this Agreement and the other Financing
Instruments.
-41-
[THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY]
-42-
EXECUTED as an instrument under seal as of the day and year first
stated above.
BORROWERS:
WITNESS: BOSTON BIOMEDICA, INC.
______________________________ By:_________________________________
Name: Xxxxx X. Xxxxxxx, Treasurer
WITNESS: BBI BIOTECH RESEARCH
LABORATORIES, INC. (f/k/a BTRL Contracts
and Services, Inc.)
______________________________ By:_________________________________
Name: Xxxxx X. Xxxxxxx, Treasurer
WITNESS: BBI CLINICAL LABORATORIES,
INC. (f/k/a BBI-North American Clinical
Laboratories, Inc.)
______________________________ By:_________________________________
Name: Xxxxx X. Xxxxxxx, Treasurer
WITNESS: BBI SOURCE SCIENTIFIC, INC.
______________________________ By:_________________________________
Name: Xxxxx X. Xxxxxxx, Treasurer
WITNESS: BBI BIOSEQ, INC.
______________________________ By:_________________________________
Name: Xxxxx X. Xxxxxxx, Treasurer
LENDER:
WITNESS: BANKBOSTON, N.A. (f/k/a The First
National Bank of Boston)
______________________________ By:_________________________________
Name: G. Xxxxxxxxxxx Xxxxxx, Director
-00-
XXXXXXXXXXXX XX XXXXXXXXXXXXX
___________, ss. August __,
1999
Then personally appeared the above-named Xxxxx X. Xxxxxxx, as Treasurer
of each of Boston Biomedica, Inc., BBI Biotech Research Laboratories, Inc., BBI
Clinical Laboratories, Inc., BBI Source Scientific, Inc., and BBI BioSeq, Inc.
and acknowledged the foregoing instrument to be his free act and deed, and the
free act and deed of each of Boston Biomedica, Inc., BBI Biotech Research
Laboratories, Inc., BBI Clinical Laboratories, Inc., BBI Source Scientific, Inc.
and BBI BioSeq, Inc., before me.
---------------------------- Notary
Public
My commission expires:
[AFFIX NOTARIAL SEAL]
COMMONWEALTH OF MASSACHUSETTS
_________, ss. August __, 1999
Then personally appeared the above-named G. Xxxxxxxxxxx Xxxxxx, as
Director of BankBoston, N.A., and acknowledged the foregoing instrument to be
his free act and deed and the free act and deed of BankBoston, N.A., before me.
---------------------------- Notary
Public
My commission expires:
[AFFIX NOTARIAL SEAL]
-44-
Schedule 4.1.3
COMPLIANCE CERTIFICATE
----------------------
TO: BANKBOSTON, N.A. (f/k/a The First National Bank of Boston)
Worcester Tower
000 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Reference is hereby made to a certain First Amended and Restated
Commercial Loan Agreement, dated as of June 30, 1999 (as the same may be
amended, modified, substituted, extended or restated, from time to time, the
"Loan Agreement") by and among (a) BOSTON BIOMEDICA, INC., a Massachusetts
---------------
corporation, for itself (when acting for itself, "BBI") and as Agent (when
---
acting in such capacity, the "Borrower Agent") for all of the Borrowers (as
---------------
defined below), (b) all of the SUBSIDIARIES of BBI (said Subsidiaries, together
with BBI and any and all other Subsidiaries which may from time to time become
parties thereto, are hereinafter sometimes referred to collectively as the
"Borrowers" and each singly as a "Borrower") and (c) BANKBOSTON, N.A., a
--------- --------
national banking association (f/k/a The First National Bank of Boston)(together
with its successors and assigns, the "Lender"). All capitalized terms not
------
defined herein but defined in the Loan Agreement shall have the meanings given
to such terms in the Loan Agreement.
The undersigned hereby certifies that he or she is a Responsible
Officer of BBI and as such, is authorized, for and on behalf of BBI, to execute
and deliver this Compliance Certificate to the Lender in accordance with the
provisions of the Loan Agreement. Pursuant to the provisions of subsection 4.1.3
of the Loan Agreement, the undersigned hereby certifies to the Lender as
follows:
1. Each of the representations and warranties made by the
Borrowers in or pursuant to the Financing Instruments are true and
correct in all material respects on and as of the date hereof, as if
made on and as of the date hereof, except (a) to the extent such
representations and warranties expressly relate to an earlier date in
which case such representations and warranties shall be true and
correct in all material respects as of such earlier date, and (b) as
follows:
[Describe divergences, if any]
2. Since the end of the last fiscal quarter of the Borrowers,
no material adverse change on the business, operations, property or
condition (financial or otherwise) of any of the Borrowers taken as a
whole has occurred except:
[Describe, if any]
3. The undersigned has reviewed or caused to be reviewed all
of the Financing Instruments, and based upon such review and to the
knowledge of the undersigned, no Default or Event of Default has
occurred and is continuing as of the date hereof (or if applicable,
will occur after giving effect to the making of the Loans requested to
be made on the date hereof), except as follows:
[Describe Defaults or Events of Default]
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4. Except as set forth in the certificates attached hereto and
except as heretofore disclosed to the Lender in previous Compliance
Certificates, there has been no change (i) in the Articles of
Organization or By-Laws of any of the Borrowers, or (ii) in the
incumbency of the officers of each Borrower whose signatures have
heretofore been certified to the Lender.
5. The financial statements submitted herewith (if any) are in
compliance with the provisions of subsections 4.1.1 or 4.1.2 of the
Loan Agreement, whichever is applicable, and fairly present the
financial condition of the Borrowers and the results of their
operations for the period ended __/__/__ (the "Applicable Financial
---------------------
Statements Date"), in accordance with GAAP consistently applied,
----------------
[subject only to year-end adjustments and audit].]
6. The Borrowers are in complete compliance with the Financial
Covenants as of the Applicable Financial Statements Date, as
demonstrated below.
--------------------------------- ------------------------- ---------------------------- ---------------------
APPLICABLE DATE OR TIME APPLICABLE RATIOS ACTUAL AS OF
FINANCIAL COVENANTS PERIOD OR MONETARY REQUIREMENTS __/__/__
--------------------------------- ------------------------- ---------------------------- ---------------------
Ratio of Consolidated Total For each fiscal Not to exceed 1.50 to 1.00 ___:___
Liabilities to Consolidated quarter, to be for each fiscal quarter
Tangible Net Worth determined as of the
last day of each such
fiscal quarter,
commencing with the
fiscal quarter
ending March 31, 1999
--------------------------------- ------------------------- ---------------------------- ---------------------
Capital Expenditures For each fiscal year, Not to exceed in the ___:___
to be determined as of aggregate $2,500,000.00
the last day of each per fiscal year
such fiscal year,
commencing with the
fiscal year ending
December 31, 1999
--------------------------------- ------------------------- ---------------------------- ---------------------
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--------------------------------- ------------------------- ---------------------------- ---------------------
APPLICABLE DATE OR TIME APPLICABLE RATIOS ACTUAL AS OF
FINANCIAL COVENANTS PERIOD OR MONETARY REQUIREMENTS __/__/__
--------------------------------- ------------------------- ---------------------------- ---------------------
Consolidated Net Income For each fiscal (a) a Net Loss of not more ___:___
quarter, to be than $250,000.00 for the
determined as of the fiscal quarter ending
last day of each such March 31, 1999;
fiscal quarter,
commencing with the (b) a Net Loss of not more
fiscal quarter than $250,000.00 for the
ending March 31, 1999 fiscal quarter ending June
30, 1999;
(c) a Net Loss of
not more than
$450,000.00 for the
fiscal quarter
ending September 30,
1999, and for the
fiscal six months
ending December 31,
1999; and
(d) a Net Income of
at least $1.00 for
the fiscal quarter
ending March 31,
2000 and for each
consecutive fiscal
quarter thereafter
--------------------------------- ------------------------- ---------------------------- ---------------------
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--------------------------------- ------------------------- ---------------------------- ---------------------
APPLICABLE DATE OR TIME APPLICABLE RATIOS ACTUAL AS OF
FINANCIAL COVENANTS PERIOD OR MONETARY REQUIREMENTS __/__/__
--------------------------------- ------------------------- ---------------------------- ---------------------
Consolidated Debt Service Ratio For each fiscal (a) At least 1.50 to 1.00 ___:___
quarter, to be for the fiscal quarter
determined as of the ending March 31, 1999;
last day of each such
fiscal quarter, (b) At least 1.50 to 1.00
commencing with the for the period of two (2)
fiscal quarter ending consecutive fiscal
March 31, 1999 quarters ending June 30,
1999;
(c) At least 1.00 to
1.00 for the period
of three (3)
consecutive fiscal
quarters ending
September 30, 1999;
and (d) At least
1.50 to 1.00 for
each period of four
(4) consecutive
quarters ending
December 31, 1999
and on the last day
of each fiscal
quarter thereafter
--------------------------------- ------------------------- ---------------------------- ---------------------
Attached hereto as Appendix A are calculations demonstrating that, based upon
----------
the financial statements of the Borrowers submitted herewith (if any), the
Borrowers were in compliance with all of the Financial Covenants as of the
Applicable Financial Statements Date, except as noted on Appendix A attached
----------
hereto.]
7. Any changes in the chief executive office and chief place of
business of any of the Borrowers which have occurred and/or any additional
locations at which any of the Inventory or Equipment are kept, notice of which
has not yet been provided to the Lender, in accordance with the provisions of
the Security Documents, are set forth below:
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EXECUTED as of this ________ day of __________________, ______.
BOSTON BIOMEDICA, INC.
By:_________________________________
Xxxxx X. Xxxxxxx, Treasurer
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APPENDIX A
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--------------------------------------------------------------------------------
FIRST AMENDED AND RESTATED COMMERCIAL LOAN AGREEMENT
(the "Agreement")
---------
by and among
BANKBOSTON, N.A.
(f/k/a The First National Bank of Boston)
(the "Lender")
------
and
BOSTON BIOMEDICA, INC. AND ALL OF ITS SUBSIDIARIES
(collectively, the "Borrowers")
---------
--------------------------------------------------------------------------------
MASTER DISCLOSURE SCHEDULE
--------------------------
Each Borrower represents and warrants to the Lender that the statements
contained in Section 3 of the Agreement are true, correct and complete as of the
date of the Agreement, except as set forth in this Master Disclosure Schedule
(as the same may be supplemented, from time to time, the "Master Disclosure
------------------
Schedule"). The Master Disclosure Schedule is arranged in sections corresponding
--------
to the lettered and numbered sections contained in Section 3 of the Agreement.
3.1.1 Business. The Borrowers are engaged in the following businesses:
--------
(a) BBI develops, manufactures and sells reagants, quality
control and other performance management diagnostic products to
increase the accuracy of in-vitro diagnostic tests.
(b) BBIBRL provides (i) research and development support for
the other business units of BBI as well as contract research services
for third parties; and (ii) is pursuing research and development
programs in drug discovery with the goal of introducing new solutions
for the detection and treatment of infectious diseases.
(c) BBICL provides specialty laboratory testing services in
infectious diseases.
(d) BBISS develops and manufactures laboratory and diagnostic
instruments.
(e) BioSeq, Inc. is engaged in research and development
programs in the area of pressure cycling technology (PCT) with the goal
of introducing new solutions for the purification and disinfection of
products derived from organic sources for improving the detection and
treatment of infectious.
PABOS2:FSH:246472_6
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