EXHIBIT 10.27
SECOND AMENDED AND RESTATED LOAN AGREEMENT
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This Amended and Restated Agreement made as of March 5, 1998, by and
between Citizens Bank of Massachusetts (herein "BANK"), and DM Management
Company, a Delaware corporation (herein "BORROWER").
Reference is made to a certain Loan Agreement (the "Loan Agreement") made
as of June 5, 1997 by and between BANK and BORROWER, as the same has been
amended and restated in a certain Amended and Restated Loan Agreement, October
31, 1997.
WITNESSETH:
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WHEREAS, the BORROWER wishes to borrow an additional sum of $17,000,000 to
finance the construction of a distribution facility on land owned by it in
Tilton, New Hampshire, wishes to refinance the Bridge Loan and wishes to reprice
certain borrowings, and wishes certain other accommodations; and
WHEREAS, the BANK is willing, on the terms, provisions and conditions
contained herein, to extend additional credit and accommodations subject to
certain conditions;
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereby agree that effective as of the date hereof, the
Loan Agreement is hereby further amended and restated as follows:
ARTICLE I
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DEFINITIONS
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1.01 Capitalized words and phrases in this Agreement shall have the
meanings ascribed to them in this Article.
"ACCOUNTANTS" shall mean the independent certified public accountants of
recognized national standing, who are selected and engaged by the BORROWER and
who are reasonably satisfactory to the BANK. Any one of the so-called "Big 5"
national accounting firms shall be satisfactory to the BANK.
"ADJUSTED LIBOR RATE" shall mean, for any INTEREST PERIOD, an interest rate
per annum determined by the BANK pursuant to the following formula:
ADJUSTED LIBOR RATE = LIBOR BASE RATE
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1.00 - RESERVE RATE
"ADVANCE(S)" shall mean the amounts loaned by the BANK to the BORROWER
under Section 2.01 which shall be either LIBOR RATE ADVANCES or PRIME RATE
ADVANCES or amounts loaned by the BANK to the BORROWER under Article V(B).
"ADVANCE FORMULA" shall mean the aggregate sum of (A) fifty percent (50%)
of the lower of the (i) cost or (ii) market value of ELIGIBLE INVENTORY, (B) One
Million Dollars ($1,000,000.00) and (C) one hundred percent (100%) of the lower
of (i) cost or (ii) market value of IN TRANSIT INVENTORY to a maximum such value
of Two Million Five Hundred Thousand Dollars ($2,500,000.00) at any time and
fifty percent (50%) of the lower of (i) cost or (ii) market value of IN TRANSIT
INVENTORY in excess of a maximum such value of Two Million Five Hundred Thousand
Dollars ($2,500,000.00).
"APPRAISAL" shall mean a written APPRAISAL of the fair market value of the
REAL ESTATE as determined by an independent appraiser selected and engaged by
the BANK AT THE EXPENSE OF THE BORROWER made within sixty (60) days of the date
hereof.
"ASSIGNMENT OF CERTIFICATE OF DEPOSIT" shall mean a certain ASSIGNMENT OF
CERTIFICATE OF DEPOSIT of even date hereof in which the BORROWER assigns the
CERTIFICATE OF DEPOSIT to the BANK as COLLATERAL for the payment of the
OBLIGATIONS.
"AVAILABILITY" shall mean the amount determined by application of the
ADVANCE FORMULA.
"AVAILABILITY PERIOD" shall mean the period commencing on the CLOSING DATE
and ending on the TERMINATION DATE.
"BANK" shall mean Citizens Bank of Massachusetts and is successors and
assigns.
"BANK DEPOSIT" shall mean all sums of money on deposit to the credit of the
BORROWER at any bank, trust company, national banking association, savings bank,
savings and loan association or similar institution.
"BANKING DAY" shall mean any BUSINESS DAY on which banks are open for
business in Boston, Massachusetts.
"BANK'S OFFICE" shall mean the office of the BANK located at 00 Xxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 or such other office of the BANK as the BANK
shall, from time to time, designate by notice to the BORROWER.
"BORROWER" is defined in the Recitals.
"BORROWING" shall mean the making of an ADVANCE.
"BORROWING DATE" shall mean that date on which an ADVANCE is made.
"BORROWING REQUEST" shall mean a request by the BORROWER for a BORROWING.
"BRIDGE LOAN" shall mean the loan made by the BANK to the BORROWER pursuant
to ARTICLE V(A) hereof.
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"BRIDGE LOAN RATE" shall mean seven and one sixteenth percent (7.0625%) per
annum.
"BRIDGE MORTGAGE" shall mean a mortgage of the BRIDGE REAL ESTATE dated
October 31, 1997 granted by the BORROWER to the BANK securing repayment of the
OBLIGATIONS including, without limitation, the BRIDGE NOTE and the NEW BRIDGE
NOTE as the same may be amended from time to time.
"BRIDGE NOTE" shall mean a Promissory Note dated October 31, 1997 in the
original principal amount of $4,300,000.00 issued by the BORROWER to the order
of the BANK and evidencing the obligation to repay the BRIDGE LOAN. The BRIDGE
NOTE is being replaced by the NEW BRIDGE NOTE.
"BRIDGE REAL ESTATE" shall mean that real estate owned by the BORROWER
located in Tilton, New Hampshire as described in the BRIDGE MORTGAGE.
"BUSINESS DAY" shall mean a calendar day other than (a) a Saturday, Sunday
or legal holiday in The Commonwealth of Massachusetts, and (b) a calendar day on
which banks are not authorized to be open for business in Boston, Massachusetts.
"CAPITALIZED LEASE OBLIGATION(S)" shall mean all rental obligations which,
under GAAP, are required to be capitalized on the books of the BORROWER in each
case taken at the amount thereof accounted for as indebtedness (net of interest
expense) in accordance with GAAP.
"CATALOG(S)" shall mean the CATALOGS and other written offerings of
INVENTORY made by the BORROWER to the general public from time to time and all
rights therein.
"CERTIFICATE OF DEPOSIT" shall mean a certain Certificate of Deposit of the
BANK issued to the BORROWER numbered 9802250739 in the amount of $18,327,632.99.
"CLOSING" is defined in Article XVI.
"CLOSING DATE" shall mean March 4, 1998.
"CODE" shall mean the Internal Revenue Code of 1986, as amended,
supplemented or modified from time to time, and all regulations issued
thereunder.
"COLLATERAL" shall mean all of BORROWER'S personal property, tangible or
intangible, including without limitation all accounts, BANK DEPOSITS, DOCUMENTS,
INVENTORY, general intangibles, equipment, contracts, CUSTOMER LISTS, INVESTMENT
PROPERTY, LEASES, the CERTIFICATE OF DEPOSIT, EQUIPMENT, CATALOGS, rights to the
trademarks "Xxxxxx Xxxxxxx" and "J. Xxxx, Ltd.", and other property described in
the SECURITY AGREEMENT, whether now existing or hereafter arising or acquired
and wherever located, and all proceeds thereof, including, without limitation,
all proceeds of fire and other insurance.
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"CONTINGENT OBLIGATION" shall mean any undertaking by the BORROWER
guaranteeing or in effect guaranteeing any indebtedness, leases, dividends or
other obligations for borrowed money ("PRIMARY OBLIGATIONS") of any other PERSON
in any manner, whether directly or indirectly, including, without limitation,
any obligations, whether or not contingent: (a) to purchase any such PRIMARY
OBLIGATION or any property constituting direct or indirect security therefor;
(b) to advance or supply funds(i) for the purchase or payment of any such
PRIMARY OBLIGATIONS; or (ii) to maintain working capital or equity capital of
such PERSON or otherwise to maintain the net worth or solvency of such PERSON;
(c) to purchase property, securities or services primarily for the purpose of
assuring the owner of any such PRIMARY OBLIGATION of the ability of such PERSON
to make payment of such PRIMARY OBLIGATION; or (d) otherwise to assure or hold
harmless the owner of such PRIMARY OBLIGATION against loss in respect thereof;
provided, however, that the term "CONTINGENT OBLIGATION" shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business.
"CONTROL AGREEMENT" shall mean that certain account control agreement dated
June 5, 1997 by and between the BANK, the BORROWER and Fleet Bank of
Massachusetts, N.A. with respect to the FLEET INVESTMENT PROPERTY.
"CONVERSION DATE" shall mean any date on which pricing of the TERM LOAN or
REAL ESTATE LOAN shall change by reason of an election by the BORROWER or a
provision of the Agreement.
"COST OF FUNDS REDEPLOYMENT is defined in Section 7.23.
"CREDIT BALANCE" shall mean the aggregate unpaid amount of ADVANCES under
Article II and L/C BALANCE outstanding from time to time.
"CURRENT DEBT" shall mean, at any time, the whole or any portion of any
obligation for borrowed money (and notes payable and drafts accepted
representing extensions of credit whether or not representing obligations for
borrowed money) payable on demand or within a period of one (1) year.
"CURRENT FINANCIALS" are described in Section 9.10 hereof.
"CUSTOMER LISTS" shall mean each and all of the mailing lists to which
CATALOGS are sent from time to time which BORROWER represents to BANK are
proprietary to it regardless of the media on which the same are stored.
"DEBT SERVICE COVERAGE" shall hereafter mean the ratio of (A) the aggregate
of the net earnings of BORROWER before interest expense, taxes, depreciation,
amortization and rent and lease expense, but specifically including interest
income; (i) less UNFINANCED CAPITAL EXPENDITURES less (ii) SHAREHOLDER PAYMENTS;
less (iii) taxes paid in cash; to (B) the aggregate of (i) interest paid and
(ii) the amounts of all maturities of Long Term Debt falling due in the twelve
(12) month period succeeding the calculation date, including principal payments
due on the Loans hereunder plus (iii) rent and lease expense. Long Term Debt is
amounts due in whole or in part more than 12 months after the incurring thereof;
however, for the purposes of
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calculating this covenant the REVOLVING LOANS are specifically excluded from
Long Term Debt.
"DEFAULT" shall mean the occurrence of an event which with the passage of
time or the requiring of the giving of notice, or both, may become an EVENT OF
DEFAULT.
"DOCUMENTS" shall mean a document of title as defined in the UCC.
"DOLLARS" or "$" shall mean lawful currency of the United States of
America.
"ELIGIBLE INVENTORY" shall mean those items of BORROWER'S INVENTORY which
(i) are finished, first quality and new goods on hand in BORROWER'S possession
on its premises, ready for sale in the ordinary course of BORROWER'S business,
and (ii) (a) have been offered for sale in a CATALOG within the last twelve (12)
months from the date of determination or (b) will be so offered within six (6)
months of said date of determination.
"ENVIRONMENTAL LAW(S)" shall mean any and all present and future federal,
state and local laws, rules and regulations, and any orders and decrees, in each
case as now or hereafter in effect, relating to the regulation or protection of
the environment or to emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals or toxic (all as defined in such applicable
laws, rules and regulations) or HAZARDOUS MATERIAL into the environment.
"EQUIPMENT" shall mean and include, without limitation, all of BORROWER'S
tangible personal property utilized in the conduct of BORROWER'S business, all
replacements and substitutions therefor, and all accessions thereto, and
including, without in any way limiting the generality of the foregoing, all of
BORROWER'S machinery, equipment, furniture, trade fixtures and motor vehicles,
but excluding therefrom INVENTORY, as said term is defined in the CODE.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, supplemented or modified from time to time, and all regulations issued
thereunder.
"EVENT OF DEFAULT" is defined in Article XII.
"EXCESS CASH FLOW" shall mean funds obtained from sources other than
borrowings.
"FINANCING AGREEMENTS" shall mean, collectively, this Second Amended and
Restated Loan Agreement, the REVOLVING NOTE, the TERM NOTE, the REAL ESTATE
NOTE, the NEW BRIDGE NOTE the ASSIGNMENT OF CERTIFICATE OF DEPOSIT, the BRIDGE
MORTGAGE, the REAL ESTATE MORTGAGE, the CONTROL AGREEMENT, each L/C APPLICATION,
the SECURITY AGREEMENT, all as amended from time to time and all other
agreements executed and delivered by the BORROWER hereunder, including any
additional agreements granting a LIEN, and all other agreements of every kind
and nature now or hereafter in force between the BANK
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and the BORROWER relating to the OBLIGATIONS, as the same may have been or may,
from time to time, be amended or supplemented.
"FISCAL YEAR" shall mean the fiscal year of the BORROWER.
"FLEET INVESTMENT PROPERTY" shall mean the INVESTMENT PROPERTY currently
held by Fleet Bank of Massachusetts, N.A. in account number 0123680070 and all
additions thereto and substitutions thereof.
"GAAP" shall mean generally accepted accounting principles as in effect
from time to time and applied with respect to the preparation of financial
statements.
"GENERAL INTANGIBLES" shall mean the BORROWER'S general intangibles, as
defined in the CODE, and all proceeds thereof, and shall also include goodwill,
trade secrets, computer programs, CUSTOMER LISTS, trade names, trademarks,
patents, rights to tax refunds of every kind and nature and proceeds of each of
the foregoing.
"HAZARDOUS MATERIAL" shall mean any chemical or other material or
substance, exposure to which is now or hereafter prohibited, limited or
regulated under any ENVIRONMENTAL LAW.
"INDEBTEDNESS" shall mean, at any time, all items which would, in
conformity with GAAP, be classified as liabilities on a consolidated balance
sheet of BORROWER as at such time, and in any event including (a) indebtedness
arising under acceptance facilities, and (b) all liabilities secured by any LIEN
on any property even though the owner of such property has not assumed or
otherwise become liable for the payment thereof.
"INTEREST PAYMENT DATE" shall mean:
(a) With respect to PRIME RATE ADVANCES, the last day of each month,
commencing with the last day of the month in which the first PRIME RATE ADVANCE
is made.
(b) With respect to LIBOR RATE ADVANCES:
(i) the last day of each INTEREST PERIOD; and
(ii) if the applicable INTEREST PERIOD is more than three months, the
last day of each three-month period during such INTEREST PERIOD.
(c) With respect to the TERM LOAN, the day of each quarterly payment of
principal, commencing with September 5, 1997.
(d) With respect to the REAL ESTATE LOAN, the last day of each monthly
payment of principal, commencing with the first such payment.
(e) With respect to the INTERIM LOAN, at the MATURITY DATE thereof.
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(f) With respect to the BRIDGE LOAN and ADVANCES under Article V(B) hereof,
the Fifth (5th) day of each month.
"INTEREST PERIOD" shall mean:
(a) With respect to each LIBOR RATE ADVANCE: (i) initially, the period (A)
commencing on the BORROWING DATE of such ADVANCE, and (B) ending one, two, three
or six months thereafter, as the case may be, as determined in accordance with
the provisions of this Agreement; and (ii) thereafter, each subsequent INTEREST
PERIOD for such LIBOR RATE ADVANCE shall begin on the last day of the
immediately preceding INTEREST PERIOD and shall end one, two, three or six
months thereafter, as the BORROWER may select pursuant to Section 2.01; provided
that (A) any INTEREST PERIOD which would otherwise end on a day which is not a
BANKING DAY shall end and the next INTEREST PERIOD shall commence on the next
preceding day which is a BANKING DAY as determined conclusively by the BANK in
accordance with the then current bank practices in London, England, and (B) any
INTEREST PERIOD for a LIBOR RATE ADVANCE that would otherwise extend beyond the
TERMINATION DATE shall end on the TERMINATION DATE.
(b) With respect to each PRIME RATE ADVANCE: the entire period during which
such advance is unpaid.
(c) With respect to the TERM LOAN and the REAL ESTATE LOAN with respect to
any period when LIBOR RATE PRICING is not in effect, the entire period during
which any pricing other than LIBOR RATE PRICING is in effect.
(d) With respect to the TERM LOAN and the REAL ESTATE LOAN with respect to
any period that LIBOR RATE PRICING is in effect: (i) initially, the period (A)
commencing on the BORROWING DATE of such period, and (B) ending one, two, three
or six months thereafter, as the case may be, as determined in accordance with
the provisions of this Agreement; and (ii) thereafter, each subsequent INTEREST
PERIOD for such LIBOR RATE PRICING shall begin on the last day of the
immediately preceding INTEREST PERIOD and shall end one, two, three or six
months thereafter, as the BORROWER may select pursuant to Section 2.01; provided
that (A) any INTEREST PERIOD which would otherwise end on a day which is not a
BANKING DAY shall end and the next INTEREST PERIOD shall commence on the next
preceding day which is a BANKING DAY as determined conclusively by the BANK in
accordance with the then current bank practices in London, England, and (B) any
INTEREST PERIOD during which LIBOR RATE PRICING is in effect that would
otherwise extend beyond the MATURITY DATE of said loan shall end on the
TERMINATION DATE.
(e) With respect to the SHORT TERM REVOLVING LOAN a period of thirty (30)
days ending on the Fifth (5th) day of each month.
(f) With respect to the BRIDGE LOAN, the entire term of said loan.
"INTERIM LOAN" shall mean the loan which was made by the BANK to the
BORROWER pursuant to Article V hereof.
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"INTERIM NOTE" shall mean a promissory note dated as at the date of the
closing in the face amount provided in Section 5.02 hereof issued by the
BORROWER to the order of the BANK and evidencing the obligation to repay the
INTERIM LOAN.
"IN TRANSIT INVENTORY " shall mean inventory (A) with respect to which (i)
title has passed to BORROWER, (ii) a first security interest has attached
pursuant to the SECURITY AGREEMENT(B) which has been placed in the possession of
a third party for delivery to BORROWER, after delivery of a LETTER OF CREDIT to
the vendor thereof and (C) which consists of finished first quality goods.
"INVENTORY" shall mean all of BORROWER'S inventory, merchandise, finished
inventory and all other tangible personal property held by BORROWER for sale or
lease, furnished or to be furnished under contracts of service, or used or
consumed in BORROWER'S business, including the rights of the BORROWER in TRANSIT
INVENTORY .
"INVENTORY COST" shall mean the cost of INVENTORY to the BORROWER when
computed in accordance with GAAP.
"INVESTMENT PROPERTY" shall mean all of BORROWER'S securities, securities
entitlements and securities accounts.
"LEASE(S)" shall mean any right of BORROWER to use real or personal
property which property is owned by another.
"L/C APPLICATION" shall mean the BANK'S standard form of letter of credit
application and reimbursement agreement from time to time.
"L/C BALANCE shall mean the aggregate undrawn, uncanceled portions of all
LETTER(S) OF CREDIT outstanding from time to time and at any time.
"LETTER(S) OF CREDIT" shall mean LETTER(S) OF CREDIT issued by the BANK for
the account of the BORROWER, payable on sight to a beneficiary who is a supplier
of goods to the BORROWER, which goods will be IN TRANSIT INVENTORY and upon
delivery to BORROWER will be ELIGIBLE INVENTORY and which LETTER(S) OF CREDIT
require the delivery and presentation to BANK at the BANK'S OFFICE of DOCUMENTS
reflecting a sale of such goods to the BORROWER, as a condition of BANK'S
payment thereon.
"LIBOR BASE RATE" shall mean, with respect to any LIBOR RATE ADVANCE for
any INTEREST PERIOD, the rate per annum determined by the BANK to be the rate at
which deposits in DOLLARS are offered to BANK in the London Interbank Market at
approximately 10:00 a.m. (Boston time) (A) two BUSINESS DAYS prior to the first
day of such INTEREST PERIOD for delivery on the first day of such INTEREST
PERIOD for a period equal to such INTEREST PERIOD and in an amount substantially
equal to the principal amount of the BORROWING of which a LIBOR RATE ADVANCE on
LIBOR RATE ELECTION is a part or (B) with respect to the SHORT TERM REVOLVING
LOAN on the first day of the INTEREST PERIOD for delivery on that date for a
period
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equal to such INTEREST PERIOD and in an amount substantially equal to the
principal amount outstanding.
"LIBOR MARGIN" shall mean one and one half percent 1.5% per annum.
"LIBOR RATE" shall mean, with respect to any INTEREST PERIOD for each LIBOR
RATE ADVANCE, an interest rate per annum equal at all times during such INTEREST
PERIOD to the sum of (i) the ADJUSTED LIBOR RATE and (ii) the LIBOR MARGIN.
"LIBOR RATE ADVANCE(S)" shall mean any ADVANCE, the interest rate on which
is calculated by reference to the LIBOR RATE.
"LIBOR RATE PRICING" shall mean any election of the BORROWER to pay or to
continue to pay the LIBOR RATE for any INTEREST PERIOD with respect to the TERM
LOAN and/or REAL ESTATE LOAN.
"LIEN" shall mean any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other) or preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever including, without limitation, any conditional sale or other title
retention agreement, and any financing lease having substantially the same
economic effect as any of the foregoing.
"LOAN ACCOUNT" shall mean the account or accounts on the books of BANK in
which will be recorded REVOLVING LOANS, ADVANCES under Article II and any other
extensions of credit made by BANK to the BORROWER pursuant to Article II hereof,
payments made on such REVOLVING LOAN(S) and any other appropriate debits and
credits as provided by the FINANCING AGREEMENTS.
"LOANS" shall mean collectively any and all of the REVOLVING LOAN(S), the
INTERIM LOAN, the SHORT TERM REVOLVING LOAN, the TERM LOAN, the REAL ESTATE
LOAN, and the BRIDGE LOAN.
"LOAN AGREEMENT " shall mean the Loan Agreement as amended from time to
time, including by the instrument.
"MARGIN-STOCK" shall have the meaning set forth in Regulation U (12 CFR
221) of the Board of Governors of the Federal Reserve System.
"MATURITY DATE" shall mean June 1, 2002.
"MULTIEMPLOYER PLAN" shall mean a PLAN which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"NEW BRIDGE NOTE" shall mean a promissory note dated as of the date hereof
in the principal amount of Four Million Three Hundred Thousand Dollars
($4,300,000.00) issued by the BORROWER to the order of the BANK evidencing the
obligation to repay the BRIDGE LOAN, as the same may be amended from time to
time.
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"OBLIGATIONS" shall mean all LOANS, ADVANCES, indebtedness, liabilities,
and amounts, liquidated or unliquidated, owing from the BORROWER to the BANK, at
any time, and arising under the FINANCING AGREEMENTS, absolute or contingent,
due or to become due, now existing or hereafter arising or contracted. Said term
shall also include all interest, fees and other charges chargeable to the
BORROWER or due from the BORROWER to the BANK from time to time hereunder and
also all covenants, agreements or undertakings of the BORROWER to the BANK
whether for the payment of money or otherwise arising under the FINANCING
AGREEMENTS.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to ERISA.
"PERSON" shall mean any individual, corporation (including a business
trust), partnership, trust, unincorporated association, joint stock company or
other legal entity or organization and any government or agent or political
subdivision thereof.
"PLAN" shall mean any plan of a type described in Section 4021(a) of ERISA
in respect of which the BORROWER is an "employer" as defined in Section 3(5) of
ERISA.
"PRIME RATE" shall mean the annual rate of interest announced by the BANK
in Boston from time to time, as its "Prime Rate".
"PRIME RATE ADVANCE(S)" shall mean an ADVANCE, the interest rate on which
is calculated by reference to the PRIME RATE.
"PRIME RATE PRICING" shall mean any election of the BORROWER to pay the
PRIME RATE for any INTEREST PERIOD with respect to the TERM LOAN and/or REAL
ESTATE LOAN or pricing at the PRIME RATE in default of such election.
"REAL ESTATE" shall mean the real property located in Meredith, N.H. at
which the BORROWER maintains a distribution facility and commonly known and
numbered as Xxx Xxxxxxxxxxx Xxx.
"REAL ESTATE CLOSING" shall mean the date of the closing of the REAL ESTATE
LOAN which occurred on July 30, 1997.
"REAL ESTATE LOAN" shall mean the loan which was made by the BANK to the
BORROWER pursuant to Article VI hereof.
"REAL ESTATE LOAN BALANCE" shall mean the outstanding unpaid balance from
time to time owed with respect to the REAL ESTATE LOAN
"REAL ESTATE MORTGAGE" shall mean a mortgage of the REAL ESTATE granted by
the BORROWER to the BANK securing repayment of the OBLIGATIONS including without
limitation the REAL ESTATE NOTE, which MORTGAGE shall include without
limitation:
(a) A first security interest in the BORROWER'S equipment and fixtures from
time to time located at the REAL ESTATE, and in addition to the foregoing, all
contract
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rights, accounts, general intangibles and other personal property now owned or
hereafter acquired relating thereto.
(b) A first lien by assignment of the rents, leases and profits which may
from time to time be realized in connection with the REAL ESTATE. This
assignment shall call for exercise by the BANK only upon the occurrence of an
EVENT OF DEFAULT by BORROWER.
"REAL ESTATE NOTE" shall mean the promissory note dated as at the date of
the REAL ESTATE CLOSING in the face amount provided in Section 6.02 hereof
issued by the BORROWER to the order of BANK and evidencing the obligation to
repay the REAL ESTATE LOAN.
"REPORTABLE EVENT" shall mean any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder.
"REPLACEMENT REVOLVING NOTE" shall mean the promissory note in the face
amount of the REVOLVING CREDIT COMMITMENT AMOUNT provided for under the LOAN
AGREEMENT, issued by the BORROWER to the order of the BANK in substitution and
replacement, and not in payment, of the REVOLVING NOTE and now evidencing the
obligation to repay the REVOLVING LOAN as increased thereunder as the same may
be amended from time to time.
"RESERVE RATE" shall mean the rate (expressed as a decimal) at which the
BANK would be required to maintain reserves under Regulation D (or its
equivalent) of the Board of Governors of the Federal Reserve System against
Eurocurrency Liabilities if such liabilities were outstanding. The ADJUSTED
LIBOR RATE shall be adjusted automatically on and as of the effective date of
any change in the RESERVE RATE, and the rate of interest thereby effected shall
simultaneously change.
"REVOLVING CREDIT COMMITMENT AMOUNT" (sometimes the "REVOLVING COMMITMENT
AMOUNT") shall mean the sum of Eight Million Five Hundred Thousand Dollars
($8,500,000.00).
"REVOLVING LOAN(S)" shall mean the ADVANCES under Article II hereof.
"REVOLVING NOTE" shall mean a promissory note in the face amount of
REVOLVING CREDIT COMMITMENT AMOUNT issued by the BORROWER to the order of the
BANK and evidencing the obligation to repay the REVOLVING LOAN, as the same may
be amended from time to time, including without limitation, as replaced by the
REPLACEMENT REVOLVING NOTE.
"SECURITY AGREEMENT" shall mean a Security Agreement originally dated June
5, 1997, duly executed and delivered by the BORROWER, to the BANK granting a
security interest in all of the assets of the BORROWER, including, without
limitation, the COLLATERAL and securing the payment and performance of the
OBLIGATIONS as provided in Article VIII hereof, as the same may be amended from
time to time.
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"SHAREHOLDER PAYMENTS" shall mean any payment or distribution to or for the
benefit of any holder of any class of capital stock of BORROWER with respect to
such capital stock, directly or indirectly, whether in cash or in kind,
including, without limitation, dividends or payments in redemption or retirement
of any stock.
"SHORT TERM REVOLVING LOAN" shall mean the loan to be made by the BANK to
the BORROWER pursuant to Article V(B) hereof.
"SHORT TERM REVOLVING NOTE" shall mean a promissory note in the face amount
of Seventeen Million Dollars ($17,000,000.00) issued by the BORROWER to the
order of the BANK and evidencing the obligation to repay the SHORT TERM
REVOLVING LOAN as the same may be amended from time to time.
"SPECIAL LIBOR MARGIN" shall mean one and one quarter percent (1.25%) per
annum.
"SPECIAL LIBOR RATE" shall mean with respect to any INTEREST PERIOD an
interest rate per annum equal at all times during an INTEREST PERIOD to the sum
of (i) the ADJUSTED LIBOR RATE, and the SPECIAL LIBOR MARGIN adjusted from time
to time as elsewhere herein provided.
"TANGIBLE NET WORTH" shall mean the net worth of the BORROWER including any
"Deferred Tax Asset" but excluding all other GENERAL INTANGIBLES.
"TERMINATION DATE" shall mean June 1, 1999.
"TERM LOAN" shall mean that certain loan made by BANK to BORROWER in the
principal amount of Three Million Six Hundred Thousand Dollars ($3,600,000.00)
payable on the MATURITY DATE evidenced by the TERM NOTE as provided in Article
IV hereof.
"TERM LOAN BALANCE" shall mean the outstanding unpaid balance from time to
time owed with respect to the TERM LOAN.
"TERM NOTE" shall mean a promissory note in the face amount of Three
Million Six Hundred Thousand Dollars ($3,600,000.00) issued by the BORROWER
dated as at the date of the Closing to the order of the BANK evidencing the
obligation to repay the TERM LOAN. The TERM NOTE shall be substantially in the
form of EXHIBIT "1.01.E".
"TREASURY BASE RATE" shall mean the annual rate of interest equal to the
yield of United States Treasury securities with a three (3) year maturity with
respect to the REAL ESTATE LOAN and a five (5) year maturity with respect to the
TERM LOAN as determined by the BANK.
"TREASURY MARGIN" shall mean one and one-half percent (1.5%).
"TREASURY RATE" shall mean with respect to any INTEREST PERIOD an interest
rate per annum equal at all times during said INTEREST PERIOD to the sum of (i)
the TREASURY BASE RATE and (ii) the TREASURY MARGIN.
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"TREASURY RATE PRICING" shall mean any election of the BORROWER to pay the
TREASURY RATE for any INTEREST PERIOD with respect to the TERM LOAN and/or the
REAL ESTATE LOAN.
"UCC" shall mean the Uniform Commercial Code as in effect in The
Commonwealth of Massachusetts, as amended from time to time.
"UNFINANCED CAPITAL EXPENDITURES" shall mean capital expenditures minus new
long term indebtedness issued during the applicable period plus the aggregate
amount of all long term indebtedness prepaid during such period.
1.02 All terms defined in the UCC and used in this Agreement, and not
otherwise defined herein, shall have the meaning ascribed to them in the UCC.
1.03 All accounting terms used in this agreement, including, without
limitation, "net worth", "current assets", "current liabilities", "liabilities",
"net income", "income" and "expense" shall, except as otherwise specifically
provided herein, be determined in accordance with GAAP.
ARTICLE II
----------
REVOLVING LOANS
---------------
2.01 Subject to, and upon the terms and conditions herein provided, during
the AVAILABILITY PERIOD, the BANK agrees to make ADVANCES to the BORROWER
including, without limitation, those ADVANCES provided for in Section 3.06
hereof which shall be deemed ADVANCES under this Section 2.01 so long as (A)
after giving effect to the making of each ADVANCE, then the CREDIT BALANCE does
not exceed the lesser of REVOLVING CREDIT COMMITMENT AMOUNT or AVAILABILITY and
(B) at the time of such ADVANCE the conditions specified in Section 2.08 have
been and remain fulfilled.
2.02 Whenever the BORROWER wishes to request the making of ADVANCE
hereunder, the BORROWER shall make such borrowing request in writing, which
shall be substantially in the form of EXHIBIT "2.02" to the Loan Agreement of
June 5, 1997, and shall deliver the same to the BANK not later than 12:00 noon
(Boston time) two (2) BUSINESS DAYS prior to the BORROWING DATE specified
therein if the ADVANCE is to be a LIBOR RATE ADVANCE, and not later than 12:00
noon (Boston time) on the BORROWING DATE (followed by written certification
within two (2) BUSINESS DAYS thereafter), if the ADVANCE is to be a PRIME RATE
ADVANCE).
2.03 Each BORROWING REQUEST for an ADVANCE pursuant to Section 2.02 shall
specify the proposed BORROWING DATE, the aggregate amount of the proposed
ADVANCE, whether such ADVANCE will be a PRIME RATE ADVANCE or a LIBOR RATE
ADVANCE and, in the case of a LIBOR RATE ADVANCE, the initial INTEREST PERIOD
with respect thereto.
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2.04 The BANK will credit the amount of each ADVANCE to a demand deposit
account maintained by the BORROWER.
2.05 The debit balance of the LOAN ACCOUNT shall reflect the amount the
BORROWER'S indebtedness to the BANK from time to time by reason of ADVANCES
under this Article II and any other appropriate charges under the FINANCING
AGREEMENTS. At least once each month the BANK shall render to the BORROWER a
statement of account showing as of its date the debit balance on the LOAN
ACCOUNT which, unless within thirty (30) days of such date, notice to the
contrary is received by the BANK from the BORROWER, shall be considered correct
and accepted by the BORROWER and conclusively binding upon it absent manifest
error.
2.06 No ADVANCE under this Article II will be made on or after the
TERMINATION DATE.
2.07 All OBLIGATIONS arising under and by reason of this Article II shall
be paid in full, without notice or demand, on the TERMINATION DATE or upon
earlier acceleration, notwithstanding any provisions of the REVOLVING NOTE or
other instrument evidencing any part of the same.
2.08 No ADVANCES Under this Article II will be made, nor any LETTERS OF
CREDIT issued, unless each of the following conditions shall have been and
remain fulfilled as of the BORROWING DATE.
(a) All conditions precedent as set forth in Article XV shall have been
and remain fulfilled.
(b) No EVENT OF DEFAULT shall have occurred and be continuing, nor shall a
DEFAULT have occurred and be continuing.
(c) The warranties and representations set forth in Article IX hereof
shall be true and correct, in all material respects, as of the date
they were made and, except to the extent that written notice of a
change thereof shall have been given by the BORROWER to the BANK, and
such change would not constitute a default or event of default
pursuant to Section 12.01(e) on the date of the BORROWING REQUEST.
2.09 All ADVANCES under this Article II and repayments of principal of the
PRIME RATE ADVANCES shall be in integral multiples of Ten Thousand Dollars
($10,000.00). All LIBOR RATE ADVANCES shall be in the minimum amount of Five
Hundred Thousand Dollars ($500,000.00) and in integral multiples of One Hundred
Thousand Dollars ($100,000.00).
2.10 If at any time the CREDIT BALANCE exceeds the REVOLVING CREDIT
COMMITMENT AMOUNT or AVAILABILITY, BORROWER shall forthwith pay to the BANK such
amount as may be necessary to reduce the CREDIT BALANCE to the lesser of the
COMMITMENT AMOUNT or AVAILABILITY.
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2.11 During the AVAILABILITY PERIOD, BORROWER may repay, in whole or in
part, without penalty, the outstanding principal of the PRIME RATE ADVANCES.
Such repayment may be effected by a new BORROWING subject to the provisions of
this Article II.
2.12 Notwithstanding the provisions of this Article II, the BANK, in its
discretion, may make ADVANCES in excess of the REVOLVING CREDIT COMMITMENT
AMOUNT or AVAILABILITY.
2.13 The obligation of the BORROWER to repay the REVOLVING LOANS with
interest thereon is and shall be evidenced by the REVOLVING NOTE.
2.14 Prior to the TERMINATION DATE, all LIBOR RATE ADVANCES shall be repaid
in full at the end of each applicable INTEREST PERIOD. Such repayment may be
effected by a new BORROWING.
2.15 A request by the BORROWER for a LIBOR RATE ADVANCE shall be
irrevocable.
2.16 The initial BORROWING was in the form of the making of ADVANCE(S)
pursuant to Section 2.01 in an aggregate principal amount which, when taken
together with the proceeds of the TERM LOAN and the INTERIM LOAN will be at
least equal to the aggregate outstanding principal amount of loans under
existing agreements with Fleet Bank. Such proceeds of such initial ADVANCE(S)
and of the TERM LOAN and of the INTERIM LOAN were applied to repay in full all
such outstanding loans. The proceeds of all subsequent ADVANCES shall be
applied for the working capital needs of the BORROWER.
2.17 At least once each consecutive twelve (12) month period commencing
with the date hereof, the BORROWER shall fully repay the REVOLVING LOANS which
repayment shall not be effected by BORROWING, and BORROWER shall not effect or
permit any ADVANCE for a period of thirty (30) consecutive days thereafter
within said twelve (12) month period provided however that the foregoing shall
not apply to any issuances of LETTERS OF CREDIT during such period.
ARTICLE III
-----------
LETTERS OF CREDIT
-----------------
3.01 Subject to and upon the terms and conditions herein provided, during
the AVAILABILITY PERIOD, the BANK shall issue LETTERS OF CREDIT so long as: (A)
After giving effect to each such issuance, the CREDIT BALANCE does not exceed
the REVOLVING COMMITMENT AMOUNT; (B) All conditions specified in Section 2.08
shall have been fulfilled; (C) BORROWER shall have delivered to the BANK (i) an
L/C APPLICATION, duly completed and executed, or a facsimile application
followed up by the original Documents received by the BANK within Three (3)
BUSINESS DAYS thereafter, ( ii) such other accompanying documentation as the
BANK shall require, and (iii) an amount equal to BANK'S then customary letter of
credit application fee and other fees, which amounts shall be non-refundable.
The face amount of any LETTER OF
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CREDIT shall not exceed the purchase price of the INVENTORY purchased therewith
and covered by the document relating thereto.
3.02 No LETTER OF CREDIT shall be issued after the TERMINATION DATE. No
LETTER OF CREDIT to be issued hereunder shall permit a draft to be presented
thereunder after the earlier of (A) 180 days after the date of issue thereof or
(b) three (3) BANKING DAYS before the TERMINATION DATE.
3.03 Each LETTER OF CREDIT shall be in such form, contain such terms and
support such transactions as shall be satisfactory to the BANK consistent with
its then current practices.
3.04 The BORROWER hereby agrees to indemnify and hold harmless the BANK
from and against any and all claims and damages, losses, liabilities, costs or
expenses which the BANK may incur (or which may be claimed against the BANK by
any PERSON whatsoever) by reason of or in connection with the execution and
delivery or transfer of, or payment or refusal to pay, under any LETTER OF
CREDIT; provided that the BORROWER shall not be required to indemnify the BANK
for any claims, damages, losses, liabilities, costs or expenses to the extent,
but only to the extent, caused by (x) the willful misconduct or gross negligence
or bad faith of the BANK in determining whether a request presented under any
LETTER OF CREDIT complied with the terms of such LETTER OF CREDIT or (y) the
BANK'S failure to pay under any LETTER OF CREDIT after the presentation to it of
a draft and DOCUMENTS strictly complying with the terms and conditions of such
LETTER OF CREDIT. Nothing in this Section is intended to limit the other
obligations of the BORROWER or the BANK under this Agreement.
3.05 Notwithstanding the provisions of Sections 3.01, BANK in its
discretion may issue LETTERS OF CREDIT such that the CREDIT BALANCE exceeds the
REVOLVING COMMITMENT AMOUNT.
3.06 If a draft shall be presented under a LETTER OF CREDIT and the BANK
shall honor the same, the BANK shall charge any demand deposit account of the
BORROWER and if the balance(s) of such account(s) is not sufficient, such
presentation, up to the full amount of the LETTER OF CREDIT, shall be deemed to
be a request of the BANK for a PRIME RATE ADVANCE, pursuant to Section 2.01
hereof without any notice to or from BORROWER being required and the amount paid
by the BANK with respect to such draft shall be deemed to be a PRIME RATE
ADVANCE provided however that if by virtue of such ADVANCE, the CREDIT BALANCE
shall exceed availability or the REVOLVING COMMITMENT AMOUNT, the excess shall
be forthwith repaid by the BORROWER.
ARTICLE IV
----------
TERM LOAN
---------
4.01 At a closing, all of the conditions specified in Article XV and
Section 2.08(a) having been fulfilled, and those in Sections 2.08(b) and 2.08(c)
having been represented by the BORROWER to have been fulfilled, the BANK loaned
to BORROWER the principal sum of Three Million Six Hundred Thousand Dollars
($3,600,000.00) as the TERM LOAN.
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4.02 Until the earliest to occur of (i) the MATURITY DATE, (ii) or, (ii)
acceleration upon the occurrence of an EVENT OF DEFAULT; the principal amount of
the TERM LOAN shall be repaid in consecutive quarterly installments of One
Hundred and Eighty Thousand Dollars ($180,000.00) each commencing on September
2, 1997, with a final payment of the TERM LOAN BALANCE due on the MATURITY DATE.
4.03 The obligation of BORROWER to repay the TERM LOAN with interest
thereon shall be evidenced by the TERM NOTE.
4.04 (a)The proceeds of the TERM LOAN were used to pay the then existing
obligation of the BORROWER to Fleet Bank of Massachusetts, N.A.
4.05 The entire TERM LOAN will be subject to "PRIME RATE PRICING" or at
BORROWER'S election as provided below, "LIBOR RATE PRICING" or the TREASURY RATE
PRICING as follows:
(a) If the BORROWER wishes to convert the TERM LOAN from PRIME RATE PRICING
or what would be PRIME RATE PRICING but for an election as provided herein to
LIBOR RATE PRICING or if BORROWER wishes to continue to pay interest at the
LIBOR RATE after the end of a current INTEREST PERIOD as the case may be,
BORROWER shall give an irrevocable request to the BANK which must be received by
the BANK not later than 10:00 a.m., Boston time, two (2) BANKING DAYS before the
desired CONVERSION DATE, or the last day of any current INTEREST PERIOD
requesting that interest rate be so converted to or continued as the case may be
and the requested CONVERSION DATE if the requirement is to convert from PRIME
RATE PRICING. The request shall specify the duration of the INTEREST PERIOD
applicable to the conversion or continuance.
(b) If the BORROWER wishes to convert the TERM LOAN from PRIME RATE PRICING
or LIBOR RATE PRICING to TREASURY RATE PRICING, BORROWER shall give an
irrevocable request to the BANK which must be received by the BANK not later
than 10:00 a.m., Boston time, two (2) BANKING DAYS before the desired CONVERSION
DATE, or the last day of any current INTEREST PERIOD requesting that interest
rate be so converted and the requested CONVERSION DATE if the request is to
convert from PRIME RATE PRICING. Notwithstanding any other provision hereof,
once TREASURY RATE PRICING is elected, it shall be for the balance of the term
of the TERM LOAN.
(c) No such election to pay any rate other than the PRIME RATE shall be
given effect if on the date of election or the date on which such election would
be given effect, there exists any DEFAULT or EVENT OF DEFAULT.
ARTICLE V
---------
THE INTERIM LOAN
----------------
5.01 At a closing, the conditions of Article XV and Section 2.08(a) having
been fulfilled, and those in Sections 2.08(b) and 2.08(c) having been
represented by the
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BORROWER to have been fulfilled, the BANK loaned to the BORROWER as the INTERIM
LOAN that sum necessary to pay-off the current mortgage loan to the BORROWER
from Fleet Bank of Massachusetts, N.A. with respect to the REAL ESTATE.
5.02 The principal amount of the INTERIM LOAN did not exceed One Million
Six Hundred Fifty Thousand Dollars ($1,650,000.00).
5.03 Interest on the INTERIM LOAN was at the PRIME RATE.
5.04 The INTERIM LOAN was paid in full sixty (60) days from the CLOSING
DATE with the proceeds of the Real Estate Note.
5.05 The obligation to pay the INTERIM LOAN was evidenced by the INTERIM
NOTE.
ARTICLE V(A)
BRIDGE LOAN
-----------
5A.01 At a closing, all of the conditions of Article XV and Section 2.08
having been satisfied, the BANK loaned to the BORROWER as the BRIDGE LOAN the
principal amount of Four Million Three Hundred Thousand Dollars
($4,300,000.00)on October 31, 1997 which sum was used to repay ADVANCES
previously made to purchase the BRIDGE REAL ESTATE.
5A.02 The BRIDGE LOAN was required to be paid in full One Hundred and
Twenty (120) days from the date of making.
5A.03 The obligation to pay the BRIDGE LOAN was evidenced by the BRIDGE
NOTE and, among other things, was secured by the BRIDGE MORTGAGE, which,
notwithstanding that it secured all OBLIGATIONS, if no EVENT OF DEFAULT shall
have occurred, was to be discharged upon payment in full of the BRIDGE LOAN.
5A.04 The BORROWER was to pay interest on the daily outstanding balance
of the BRIDGE LOAN from time to time outstanding at the rate of seven and one
quarter percent (7.25%) per annum, monthly in arrears, except the full balance
of principal and interest of the BRIDGE LOAN shall be paid in full at maturity,
as provided therein.
5A.05 The term of the BRIDGE NOTE having expired, provided that all of the
conditions of Article XV and Section 2.08 shall have been satisfied at the
CLOSING and if no EVENT OF DEFAULT shall have occurred, the BANK agrees to
extend the term for repayment of the BRIDGE LOAN until December 31, 1998 and to
reprice the same in the manner hereinafter provided.
5A.06 The obligation to pay the BRIDGE LOAN, as so modified, shall be
evidenced by the NEW BRIDGE NOTE and among other things be secured by the BRIDGE
MORTGAGE which, notwithstanding that it may secure all OBLIGATIONS, shall, if no
EVENT OF DEFAULT shall have occurred and be continuing, be discharged upon
payment in full of the BRIDGE LOAN.
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5A.08 The BORROWER shall hereafter pay interest, monthly, in arrears, on
the daily outstanding balance of the BRIDGE LOAN at the BRIDGE LOAN RATE
applicable to the INTEREST PERIOD and the full balance of principal and interest
of the BRIDGE LOAN shall be paid in full on December 31, 1998 or as otherwise
provided therein.
ARTICLE V(B)
SHORT TERM REVOLVING LOAN
-------------------------
5B.01 If all of the conditions of Article XV and Section 2.08 shall have
been satisfied the BANK agrees to loan to the BORROWER, as the SHORT TERM
REVOLVING LOAN, the principal amount of Seventeen Million ($17,000,000.00) on
the CLOSING DATE which sum shall be used to construct an approximately four
hundred thousand square foot (400,000') distribution center and offices on the
land of the BORROWER located in Tilton, New Hampshire (sometimes the "Project")
and purchase certain materials handling equipment to be used in its operation.
5B.02 The SHORT TERM REVOLVING LOAN shall be paid in full on the first to
occur of (1) the obtaining of permanent financing with respect to the said
Project or (2) December 31, 1998.
5B.03 The obligation to pay the SHORT TERM REVOLVING LOAN shall be
evidenced by the SHORT TERM REVOLVING NOTE and, among other things, be secured
by the ASSIGNMENT OF CERTIFICATE OF DEPOSIT which, notwithstanding that it may
secure all OBLIGATIONS shall, if no EVENT OF DEFAULT shall have occurred and be
continuing, be discharged upon payment in full of the SHORT TERM REVOLVING NOTE.
5B.04 The BORROWER shall pay interest monthly in arrears, on the daily
outstanding balance of the SHORT TERM REVOLVING LOAN from time to time
outstanding monthly, in arrears, at the SPECIAL LIBOR RATE for each INTEREST
PERIOD except the full balance of principal and interest of the SHORT TERM LOAN
shall be paid in full at maturity as provided in the SHORT TERM REVOLVING NOTE.
5B.05 Subject to, and upon the terms and conditions herein provided,
commencing at the CLOSING, the BANK agrees to make ADVANCES to the BORROWER so
long as after giving effect to the making of each such ADVANCE, the aggregate
amount of such advances outstanding shall not exceed $17,000,000.00.
5B.06 Whenever the BORROWER wishes to request the making of an ADVANCE
under this Article, the BORROWER shall make such BORROWING REQUEST in writing,
and shall deliver the same to the BANK not later than 12:00 noon (Boston time)
on the BORROWING DATE specified therein.
5B.07 The BANK will credit the amount of each ADVANCE under this Article to
a demand deposit account maintained by the BORROWER.
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5B.08 At least once each month the BANK shall render to the BORROWER a
statement of account showing as of its date the amount borrowed under this
Article which, unless within thirty (30) days of such date, notice to the
contrary is received by the BANK from the BORROWER, shall be considered correct
and accepted by the BORROWER and conclusively binding upon it absent manifest
error.
5B.09 No ADVANCE under this Article will be made on or after December 31,
1998.
5B.10 All OBLIGATIONS arising under and by reason of this Article V(B)
shall be paid in full, without notice or demand, on or before December 31, 1998.
5B.11 No ADVANCES will be made under this Article unless each of the
provisions of Article XV and Section 2.08 shall be complied with as of the date
thereof and no EVENT OF DEFAULT shall have occurred and be continuing.
ARTICLE VI
----------
REAL ESTATE LOAN
----------------
6.01 The terms, provisions and conditions hereof having been fulfilled, no
DEFAULT or EVENT OF DEFAULT having occurred and the provisions of Section
2.08(a) having been fulfilled, and those in Sections 2.08(b) and 2.08(c) having
been represented by the BORROWER to have been fulfilled, the BANK made the REAL
ESTATE LOAN to BORROWER in accordance with the terms, provisions and conditions
set forth below.
6.02 The amount of the REAL ESTATE LOAN was the lesser of (i) One Million
Six Hundred Fifty Thousand Dollars ($1,650,000.00) or (ii) 75% of the appraised
value of the REAL ESTATE as determined as determined by the APPRAISAL.
6.03 The proceeds of the REAL ESTATE LOAN were applied solely to payment of
the INTERIM NOTE in whole or in part.
6.04 Payment of the REAL ESTATE LOAN shall be effected in fifty-nine (59)
consecutive monthly payments in the principal amount of Nine Thousand One
Hundred Sixty-Seven Dollars ($9,167.00) and a final payment equal to the then
REAL ESTATE LOAN BALANCE. If the principal amount of the REAL ESTATE LOAN shall
be less than One Million Six Hundred Fifty Thousand Dollars ($1,650,000.00), the
regular monthly payments shall be in the amount of One One Hundred Eightieth
(1/180) of said principal amount.
6.05 The obligation of the BANK to make the REAL ESTATE LOAN was subject to
satisfaction by the BANK of each of the following:.
(a) The BANK shall have received the APPRAISAL.
(b) The BANK shall have been furnished with a satisfactory survey of the
REAL ESTATE depicting the following: that the bounds and measurements shown on
the plan
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are substantially correct, that the title lines and actual lines of
possession are the same; the location of all means of ingress to and egress from
the REAL ESTATE; the actual and/or plan location of all utilities services from
the REAL ESTATE to the nearest public road or right-of-way, and if from the REAL
ESTATE to the public right-of-way they pass over land owned by others, said
passage shall be by means of valid, recorded easement not subject to
divestiture; the bounds of any areas submitted to the Federal Flood Disaster
Protection Act and any other area restricting use; the location of all easements
and takings affecting the REAL ESTATE; and depicting that no encroachment over
any property lines or over any easements, servitudes or rights-of-way exist.
The survey shall have been certified to by a licensed professional engineer
reasonably acceptable to the BANK.
(c) The BANK shall have been furnished with a certificate of a licensed
professional engineer satisfactory to the BANK certifying to the following: (1)
That the utilities services, storm drainage and sewage facilities are sufficient
to adequately service the REAL ESTATE; (2) the REAL ESTATE and its current use
comply with all applicable zoning, building code, health, fire, safety and
environmental statutes, codes, bylaws and regulations.
(d) There shall have been delivered to the BANK the opinions of BORROWER'S
counsel relating to (i) due authorization, enforceability, non-contravention
absence of litigation; (ii) zoning and land use; (iii) such other matters (not
including compliance with ENVIRONMENTAL LAWS) as the BANK shall reasonably
require.
(e) The BANK shall have received satisfactory reports from acceptable,
qualified professionals indicating on the basis of soils tests and other tests
and inspections that the REAL ESTATE complies with ENVIRONMENTAL LAWS and areas
adjacent thereto are free from hazardous materials, hazardous wastes, asbestos,
PCB's or toxic substances and that the REAL ESTATE has not been used as a dump
site for oil, hazardous materials, hazardous wastes, asbestos, PCB's or toxic
substances or otherwise used in such a manner which would cause the likelihood
of incurring any liability under Federal or state legal requirements regarding
oil, hazardous materials, hazardous wastes or toxic substances. Without
limitation, the REAL ESTATE MORTGAGE shall contain a provision whereby BORROWER
shall be obligated to immediately contain and remove any hazardous waste and
toxic substances found on the REAL ESTATE. In addition, it shall be an event of
default under the REAL ESTATE MORTGAGE if BORROWER shall fail to obtain a
satisfaction of any "Notice of Violation" ("NOV") within 60 days after the
issuance thereof or if any "Superlien" claim is filed against the REAL ESTATE
under the Superfund Act.
(f) The REAL ESTATE MORTGAGE shall have been insured by a title insurer
acceptable to the BANK, which policy shall comply with the following: it shall
be in the standard ALTA form; there shall be no exceptions for survey, easements
or other use restrictions not shown on the survey which are acceptable to the
BANK; there shall be no inspection exceptions except in respect to improvements
thereafter added; the standard form so-called pending disbursement exception
shall be permitted; and there shall be no other exceptions which in the opinion
of counsel to the BANK may have an adverse effect upon the use of all or any
portion of the REAL ESTATE as contemplated.
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(g) The conditions specified in Article XV and Section 2.08 shall have
been, and remain, fulfilled.
(h) There shall have been delivered to the BANK an insurance policy,
including liability and extended coverage, in amounts satisfactory to the BANK
and first payable to the BANK as mortgagee. The BANK shall have been furnished
with evidence that flood insurance is not required for the REAL ESTATE under
the Federal Flood Disaster Protection Act. In the event that flood insurance is
required, flood insurance written by a company satisfactory to the BANK and in
an amount and form acceptable to the BANK shall also have been disclosed.
(i) The BANK shall have received such other customary documents as the BANK
shall reasonably have requested.
6.06 All closing documents prepared to close the REAL ESTATE LOAN
contemplated hereby shall be in form and contain terms and provisions consistent
with this Article VI and as reasonably required by counsel to the BANK.
6.07 Whether or not the REAL ESTATE LOAN was closed, all costs and expenses
incurred in connection with the transaction, including, but not limited to,
attorney's fees, title insurance and endorsement premiums, appraisals, surveys,
recording fees, documentary stamps, any taxes, brokerage commissions, and any
and all other reasonable out-of-pocket expenses incurred by the BANK in the
ordinary course in connection with the REAL ESTATE LOAN shall be paid by the
BORROWER.
6.08 While the REAL ESTATE LOAN remains outstanding, no portion of the REAL
ESTATE PREMISES may be sold. While the LOANS remain outstanding, there shall be
no other liens on the REAL ESTATE granted by the BORROWER except such as granted
to the BANK hereunder.
6.09 (a) The REAL ESTATE LOAN shall bear interest at the rate of six and
81/100% (6.81%) per annum from the date of the REAL ESTATE CLOSING until August
31, 1999. Thereafter it shall bear interest at the PRIME RATE unless there
shall be an election as provided below.
(b) If the BORROWER wishes to convert the REAL ESTATE LOAN from PRIME RATE
PRICING or what would be PRIME RATE PRICING but for an election as provided
herein to LIBOR RATE PRICING or if the BORROWER wishes to continue to pay
interest at the LIBOR RATE after the end of a current INTEREST PERIOD as the
case may be, BORROWER shall give an irrevocable request to the BANK which must
be received by the BANK not later than 10:00 a.m., Boston time, two (2) BANKING
DAYS before the CONVERSION DATE, or the last day of any current INTEREST PERIOD
requesting that interest rate be so converted to or continued as the case may be
and the requested CONVERSION DATE of the request is to convert from PRIME RATE
PRICING. The request shall specify the duration of the INTEREST PERIOD
applicable to the conversion or continuance.
(c) If the BORROWER wishes to convert the REAL ESTATE LOAN from PRIME RATE
PRICING or LIBOR RATE PRICING to TREASURY RATE PRICING,
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BORROWER shall give an irrevocable request to the BANK which must be received by
the BANK not later than 10:00 a.m., Boston time, two (2) BANKING DAYS before the
desired CONVERSION DATE, or the last day of any current INTEREST PERIOD
requesting that interest rate be so converted and the requested CONVERSION DATE
if the request is to convert from PRIME RATE PRICING. Notwithstanding any other
provision hereof, once TREASURY RATE PRICING is elected, it shall be for the
balance of the term of the REAL ESTATE LOAN.
(d) No such election to pay any rate other than the PRIME RATE shall be
given effect if on the date of election or the date on which such election would
be given effect, there exists any DEFAULT or EVENT OF DEFAULT.
ARTICLE VII
-----------
INTEREST, FEES AND COMPUTATION
------------------------------
7.01 The BORROWER will pay interest on the daily outstanding unpaid balance
of principal of the ADVANCES at the following rates:
(a) On PRIME RATE ADVANCES, the PRIME RATE; and
(b) On LIBOR RATE ADVANCES, the LIBOR RATE.
7.02 Interest on the unpaid balance of the ADVANCES shall be paid on each
INTEREST PAYMENT DATE and upon the TERMINATION DATE or with respect to the SHORT
TERM REVOLVING LOAN, upon maturity as the case may be or upon acceleration.
7.03 The BORROWER will pay interest on the TERM LOAN BALANCE at the PRIME
RATE unless BORROWER shall have made an election to pay at the TREASURY RATE or
LIBOR RATE as permitted in Section 4.05 in which case interest shall be payable
at the rate so elected.
7.04 The BORROWER shall hereafter pay interest on the daily outstanding
unpaid balance of the SHORT TERM REVOLVING LOAN at the SPECIAL LIBOR RATE for
each INTEREST PERIOD and on the outstanding balance of the BRIDGE LOAN at the
BRIDGE LOAN RATE.
7.05 The BORROWER will pay interest on the REAL ESTATE LOAN BALANCE at the
PRIME RATE unless BORROWER shall have made an election to pay at the TREASURY
RATE or LIBOR RATE as permitted in Section 6.09 in which case interest shall be
payable at the rate so elected.
7.06 Interest shall be paid on the REAL ESTATE LOAN, SHORT TERM
REVOLVING LOAN and the BRIDGE LOAN at the rates herein provided until each of
them shall be paid in full and shall be payable on each INTEREST PAYMENT DATE.
-23-
7.07 The BORROWER will also pay to the BANK on demand such standard and
regular charges as the BANK makes with respect to commercial letters of credit,
including, without limitation insurance negotiation and acceptance fees.
7.08 BORROWER shall pay to BANK a commitment fee (the "Commitment Fee") for
the period commencing on the date hereof, to and including the earlier of the
TERMINATION DATE or acceleration of the CREDIT BALANCE equal to one eighth of
one percent (.125%) per annum (computed daily on the basis of the actual number
of days elapsed over a 360 day year) on the amount by which the REVOLVING CREDIT
COMMITMENT AMOUNT exceeds CREDIT BALANCE. The Commitment Fee shall be payable
monthly in arrears and on the TERMINATION DATE.
7.09 In the event any payment of principal or interest, fee, or other
amount payable by the BORROWER under the FINANCING AGREEMENTS shall not be paid
when due and shall remain unpaid for ten (10) days thereafter, the BORROWER
shall pay interest with respect thereto commencing as of the date such payment
was initially due at a per annum rate equal to the sum of (x) the rate of
interest in effect on the due date of such payment, and (y) four percent (4%)
per annum. In the event that BORROWER shall default under terms of the L/C
Application, amounts due from BORROWER shall bear interest at a rate equal to
(a) PRIME RATE plus (b) three percent (3%) per annum payable daily.
7.10 All rates of interest based on the PRIME RATE shall change immediately
upon the date upon which a change in the PRIME RATE shall become effective.
7.11 Except as otherwise expressly provided in this Agreement, whenever any
payment to be made by the BORROWER hereunder shall be stated to be due on a day
other than a BANKING DAY, such payment shall be made on the next succeeding
BANKING DAY, and such extension of time shall in such case be included in the
computation of such payment.
7.12 All payments by the BORROWER under this Agreement shall be made
without set-off or counterclaim and free and clear of and without deduction for
any taxes, levies, imposts, duties, charges, fees, deductions, withholdings,
compulsory loans, restrictions or conditions of any nature now or hereafter
imposed or levied by any country or any political subdivision thereof or taxing
or other authority therein unless the BORROWER is compelled by law to make such
deduction or withholding. If any such obligation is imposed upon the BORROWER
with respect to any amount payable by it hereunder, the BORROWER will pay to the
BANK, on the date on which the said amount becomes due and payable hereunder,
such additional amount as shall be necessary to enable the BANK to receive the
same net amount which it would have received on such due date had no such
obligation been imposed upon the BORROWER. The BORROWER will deliver promptly to
the BANK certificates or other valid vouchers for all taxes or other charges
deducted from or paid with respect to payments made by the BORROWER hereunder.
7.13 The BORROWER agrees to pay any present or future stamp or documentary
taxes and any other excise or property taxes, charges or similar levies,
excluding, in the case of the BANK, taxes imposed on it by the jurisdiction
under the laws of which the
-24-
BANK is organized or any political subdivision thereof and taxes imposed on its
net income and franchise taxes imposed on it, which arise from any payment made
by the BORROWER hereunder or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement, or any other FINANCING AGREEMENT. The
BORROWER will indemnify the BANK on demand for the full amount of any such
taxes, charges or similar levies paid by the BANK or any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto.
7.14 Without prejudice to the survival of any other agreement of the
BORROWER hereunder, the agreements and obligations of the BORROWER contained in
Sections 7.13 AND 7.14 shall survive the payment in full of principal of and
interest on the LOANS. The BANK agrees to give to the BORROWER notice of any
such taxes, charges or similar levies paid by it and for which demand for
payment may be made hereunder, and the BORROWER shall have the right to contest
the validity or legal assertion thereof; provided, however, that the foregoing
shall in no way limit the BORROWER'S obligation to indemnify the BANK as in this
Agreement provided.
7.15 All interest, fees or other charges payable by BORROWER to BANK shall
be computed on the basis of a year of three hundred sixty (360) days and for the
actual number of days elapsed.
7.16 INTENTIONALLY DELETED
7.17 Interest not paid when due shall become a portion of the loans to
which they relate and bear interest at the applicable rate until paid in full.
7.18 Upon the occurrence and during the continuance of an EVENT OF DEFAULT,
BORROWER hereby authorizes BANK to charge any account maintained by it with BANK
for any payment due from BORROWER hereunder or under any of the FINANCING
AGREEMENTS. In any of such cases, such authorization, however, does not obligate
BANK so to charge nor does it limit BORROWER's obligation to make such payment
when due..
7.19 Each payment to be made by BORROWERS hereunder, whether principal,
interest, fees, or of any other kind, shall be paid not later than 2:00 p.m.
(Boston time) on the day when due to the BANK at its principal office in Boston,
Massachusetts in DOLLARS and in immediately available funds.
7.20 The BANK shall calculate all interest rates arising and all interest
and fees due hereunder.
7.21 In the event that the BORROWER shall, before the due date therefor,
prepay all or any portion of the TERM LOAN or REAL ESTATE LOAN which is subject
to TREASURY RATE pricing, whether by reason of voluntary prepayment or
acceleration, BORROWER shall pay a prepayment charge equal to the BANK'S COST OF
FUNDS REDEPLOYMENT unless such prepayment is made from BORROWER'S EXCESS CASH
FLOW.
-25-
7.22 In addition to and not in limitation of any other provision of this
Agreement, BORROWER will, on demand by the BANK at any time, indemnify the BANK
against COST OF FUNDS REDEPLOYMENT as a consequence of:
(a) The breach by the BORROWER of its OBLIGATIONS to borrow a LIBOR RATE
ADVANCE on the BORROWING DATE thereof;
(b) The failure by the BORROWER to pay, punctually on the due date
thereof, any amount payable hereunder with respect to a LIBOR RATE
ADVANCE;
(c) The repayment or prepayment of any principal of any LIBOR RATE ADVANCE
of the TERM LOAN or the REAL ESTATE LOAN at a time when the said
obligation is subject to LIBOR RATE PRICING, on a date other than the
due date of such principal, whether due to acceleration or otherwise.
7.23 COSTS OF FUNDS REDEPLOYMENT shall mean the following:
(i) any costs incurred by the BANK in carrying funds which were to
have been borrowed by the BORROWER or in carrying funds to cover
the amount of any overdue principal of or overdue interest
thereon;
(ii) any interest payable by the BANK to lenders of the funds
borrowed by the BANK in order to carry the funds referred to in
the immediately preceding sub-clause (i); and
(iii) any losses incurred by the BANK in liquidating or re-employing
funds acquired from third parties to effect or maintain the
same. The amount (and the computations thereof) of any such
losses, costs and expenses shall be determined reasonably by the
BANK and set forth in a certificate signed by an officer of the
BANK, which certificate shall, save for manifest error, be
conclusive and binding upon the BORROWER.
7.24 Without prejudice to any other rights it may have, the BANK may
collect a "late charge" equal to five (5%) percent of any OBLIGATION not paid
within fifteen (15) days of the due date thereof.
7.25 If at any point, during the term of the REVOLVING LOAN, the TERM LOAN,
the REAL ESTATE LOAN, the LIBOR BASE RATE shall cease to be available then,
thereafter, during such period of unavailability, LIBOR RATE ADVANCES and LIBOR
RATE PRICING shall cease to be available hereunder with respect thereto. If
said LIBOR BASE RATE shall cease to be available during the term of the SHORT
TERM REVOLVING LOAN, the SHORT TERM REVOLVING LOAN shall be priced at the
nearest comparable rate as determined by the BANK.
-26-
ARTICLE VIII
------------
Security, Guaranties and Subordination
--------------------------------------
8.01 Any and all deposits or other sums at any time credited by or due from
BANK to BORROWER shall, at all times constitute security for all OBLIGATIONS and
upon and during the continuance of an Event of Default may be set off against
any of the OBLIGATIONS at any time when due whether or not security held by BANK
is deemed to be adequate.
8.02 Subject to any contrary provision of this Agreement, the OBLIGATIONS
including without limitation those represented by the NEW BRIDGE NOTE and the
SHORT TERM REVOLVING NOTE shall also be secured by the ASSIGNMENT OF CERTIFICATE
OF DEPOSIT as well as by all of the other FINANCING AGREEMENTS which shall be
subject to no LIENS except those permitted under Section 11.06.
8.03 [INTENTIONALLY DELETED]
8.04 Without limitation on any other provisions hereof, the OBLIGATIONS
shall, among other things, be secured by a first priority perfected pledge of
the FLEET INVESTMENT PROPERTY pursuant to an agreement satisfactory to the BANK
not subject to any LIENS except those permitted pursuant to Section 11.06
hereof. If at any time that the TERM LOAN shall be outstanding the FLEET
INVESTMENT PROPERTY shall have a value upon an immediate disposition in a
recognized securities market which is less than the unpaid principal of the TERM
LOAN BALANCE, then, in any such event the BORROWER shall immediately either (i)
increase the said value of the FLEET INVESTMENT PROPERTY pledged to the BANK to
an amount at least equal to the TERM LOAN BALANCE or (ii) make a payment in such
amount as will reduce the said TERM LOAN BALANCE to an amount equal to such
value. With respect to the CONTROL AGREEMENT, the BANK shall not originate
"entitlement orders" concerning the "Account" or deliver a "Notice of Exclusive
Control" except after the occurrence of, and during the continuance of an EVENT
OF DEFAULT. Notwithstanding that the FLEET INVESTMENT PROPERTY shall secure
payment and performance of all OBLIGATIONS, provided that no EVENT OF DEFAULT
shall have occurred and be continuing, the security interest of the BANK in the
same shall be released upon payment in full of the TERM LOAN.
ARTICLE IX
----------
Warranties and Representations by BORROWERS
-------------------------------------------
9.01 The BANK enters into this Agreement in reliance upon the warranties
and representations of the BORROWER set forth in this Article, each of which is
acknowledged by the BORROWER to be material. Each such warranty and
representation shall be deemed to have been newly made on each day BORROWER
requests an ADVANCE except to the extent that written notice of a change thereof
shall have been given by the BORROWER to the BANK, and such change would not
constitute a default or event of default pursuant to Section 12.01(e).
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9.02 The BORROWER is a duly organized and existing corporation under the
laws of its state of incorporation and is in good standing under the laws
thereof.
9.03 The BORROWER is duly qualified to do business and is in good standing
as a foreign corporation in each state or other jurisdiction where the failure
to so qualify would have a material adverse effect on the BORROWER. All such
jurisdictions, if any, are listed on EXHIBIT "9.03".
9.04 The BORROWER has good title to all properties and assets which it
purports to own, as reflected in the CURRENT FINANCIALS, free and clear of all
mortgages, liens, pledges, security interests and encumbrances except as set
forth on EXHIBIT 9.04 or permitted by Section 11.06.
9.05 The BORROWER owns or leases and holds all real and personal property
necessary or incidental to the conduct of its businesses, including without
limitation, patents, trademarks, service marks, trade names, copyrights and
licenses and other rights with respect to the foregoing.
9.06 All books and records of the BORROWER, including, but not limited to,
minute books, by-laws and books of account fairly reflect all matters and
transactions which should currently be reflected therein.
9.07 The BORROWER'S business is limited to the sale of personal property
from CATALOGS and activities related thereto (including without limitation the
sale of personal property from retail outlet stores).
9.08 Except as set forth in EXHIBIT 9.08 and except for the FLEET
INVESTMENT PROPERTY, the BORROWER has no subsidiaries nor any investments in the
stock or securities of any other corporation, firm, trust or other entity.
9.09 Except as set forth in EXHIBIT 9.09, there are no actions, suits,
proceedings, or investigations pending or, to the knowledge of BORROWER,
threatened against the BORROWER or any of its properties in any court, before
any governmental authority, arbitration board, or any other tribunal which,
singly or in the aggregate, if decided adversely to BORROWER, would materially
and adversely affect the business, properties or condition (whether financial or
otherwise) of the BORROWER. BORROWER is not, nor by execution and delivery of
the FINANCING AGREEMENTS and performance of the OBLIGATIONS (with or without the
passage of time or the giving of notice), will be, in default with respect to
any order of any court, governmental authority, arbitration board or other
tribunal.
9.10 BORROWER has furnished to the BANK the financial statements at
September 30, 1997 for the prior nine (9) month period. Said statements, the
"CURRENT FINANCIALS," fairly present the condition of the BORROWER at the dates
thereof, all in conformity with GAAP except, in respect of interim statements,
with respect to footnotes, and subject to customary year end adjustments.
-28-
9.11 Except to the extent reflected or reserved against in the CURRENT
FINANCIALS or as set forth on EXHIBIT "9.11," if any, BORROWER, as of the date
of said financial statements, had no material liabilities of any nature, whether
accrued, absolute, contingent or otherwise, including, without limitation, tax
liabilities, due or to become due, or arising out of transactions entered into
or any state of facts existing prior thereto, of a type required by GAAP to be
reflected or reserved against on financial statements.
9.12 Since the date of the CURRENT FINANCIALS and through the date hereof,
and except as shown on EXHIBIT "9.12", there has not been:
(a) any change in the condition of the BORROWER'S assets or liabilities,
other than changes in its ordinary course of business, none of which
has been materially adverse.
(b) any damage, destruction or loss, whether or not covered by insurance,
materially and adversely affecting the BORROWER'S properties or
business;
(c) any declaration of, setting aside of, or making of a payment or any
dividend or other distribution with respect to the BORROWER'S capital
stock or any direct or indirect redemption, purchase or other
acquisition of any such stock;
(d) any materially adverse:
(i) controversy with any labor organization or employees;
(ii) claim or controversy involving any federal, state or local
government agencies; or
(iii) other event or condition affecting the businesses of or
properties of the BORROWER.
9.13 The BORROWER has filed all federal and state income tax returns,
excise tax returns and all other tax returns of every kind and nature which are
required to be filed by it and has paid all taxes shown to be due on said
returns, except where in the future such taxes are being contested in good faith
by a appropriate proceedings. To BORROWER's knowledge, no audit or other
investigation is presently being conducted with respect to any tax obligation of
BORROWER.
9.14 INTENTIONALLY DELETED
9.15 The execution and delivery of the FINANCING AGREEMENTS, the borrowing
by BORROWER as herein provided, the execution and delivery by them of all
instruments, agreements and documents of every kind and nature pursuant hereto
and the performance by the BORROWER of the OBLIGATIONS have been duly authorized
by the Board of Directors of the BORROWER and, to the extent required by law or
otherwise, by stockholders, and the FINANCING AGREEMENTS and all instruments,
agreements and documents executed pursuant thereto are valid and binding
obligations of the BORROWER enforceable in accordance with their terms, except
to the extent that such
-29-
enforceability may be limited by laws of general application affecting the
rights of creditors.
9.16 There is no provision in the articles of organization, the by-laws, or
other charter documents of BORROWER, or any other indenture, contract or
agreement to which it is party or by which it is bound, which prohibits the
execution and delivery of the FINANCING AGREEMENTS or the performance by the
BORROWER of the OBLIGATIONS.
9.17 No DEFAULT or EVENT OF DEFAULT exists. Neither the nature of
BORROWER'S businesses or properties, nor any relationships in connection with
the execution or delivery of the FINANCING AGREEMENTS is such as to require a
consent, approval, license, permit or authorization of, or filing, registration,
or qualification with, any governmental authority on the part of BORROWER as a
condition to the execution and delivery of the FINANCING AGREEMENTS or any
instrument, agreement or document contemplated hereby, or the performance by the
BORROWER of the OBLIGATIONS.
9.18 EXHIBIT "9.18" set forth a full list of all patents, patent
applications, registered copyrights, and registered trademarks and service marks
currently used by the BORROWER.
9.19 EXHIBIT "9.19" contains a description of all real property and
material personal property which the BORROWER holds under a term of a LEASE,
including a description of the property, the date of the LEASE and the identity
of the lessor.
ARTICLE X
---------
Affirmative Covenants
---------------------
10.01 BORROWER shall furnish to BANK, in form and detail acceptable to
BANK:
(a) As soon as practicable and in any event within one hundred twenty
(120) days after the end of each fiscal year, statements, on an
unqualified audit basis of income, retained earnings and cash flow of
the BORROWER for such year, and audited balance sheets of the BORROWER
as at the end of such year, setting forth in each case in comparative
form corresponding figures for the preceding fiscal year from the
preceding annual audit, all in reasonable detail and reasonably
satisfactory in scope to the BANK and certified by the ACCOUNTANTS
whose certificate shall be on an unqualified, audited basis
representing an unqualified opinion, all in scope and substance
satisfactory to the BANK, and such financial statements shall be
prepared in accordance with GAAP.
(b) As soon as practicable and in any event within forty-five (45) days
after the end of each of the first three quarterly period in each
FISCAL YEAR, statements of income, retained earnings and cash flow of
the BORROWER for the period from the beginning of the current FISCAL
YEAR to the end of
-30-
such quarterly period, and balance sheet of the BORROWER as at the end
of such quarterly period, setting forth in each case commencing one
year from the date hereof, in comparative form, figures for the
corresponding period in the preceding FISCAL YEAR, all in reasonable
detail, and such financial statements shall be prepared in accordance
with GAAP subject to customary year end adjustments and the absence of
footnotes. Such quarterly statements may be prepared internally.
(c) At the time of delivery of the reports required by Sections 10.01(a)
and 10.01(b); a certificate of the Chief Financial Officer, Vice
President of Finance or Controller of the BORROWER (i) stating that,
in his, her or their opinions, if such be the case, there has been and
is existing no DEFAULT or EVENT OF DEFAULT hereunder, or if that not
be the case, setting forth the details of all such DEFAULT or EVENT OF
DEFAULT, and (ii) showing appropriate calculations indicating
compliance (or non-compliance) with the covenants set forth in Article
XI and XII.
(d) Monthly, within fifteen (15) days of the end of each month, a
certificate signed by BORROWER'S President, Chief Financial Officer,
Vice President of Finance or Controller certifying that the CREDIT
BALANCE does not exceed the lesser of AVAILABILITY or the REVOLVING
CREDIT COMMITMENT AMOUNT and that the TERM LOAN BALANCE does not
exceed the net market value upon sale (as elsewhere herein provided)
of the FLEET INVESTMENT PROPERTY.
(e) Monthly, within thirty (30) days of the end of each month, a report,
certified by the BORROWER'S President, Chief Financial Officer, Vice
President of Finance or Controller showing the aging of BORROWER'S
INVENTORY.
(f) Periodically, promptly after filed, copies of all notices to
shareholders, all proxies, reports and any other publicly available
materials filed with the Securities Exchange Commission and all press
releases.
(g) With reasonable promptness, such other financial data and/or operating
data as the BANK may reasonably request in such form as the BANK may
reasonably request.
(h) Monthly cause its general contractor to submit to the BANK a copy of
the summary of the status of the project being financed by the SHORT
TERM REVOLVING LOAN against budget in such form as the BANK shall
reasonably require at the same time such contractor shall submit the
same to BORROWER.
10.02 The BORROWER will, duly and punctually, pay all interest, principal
and all other amounts of money becoming due from it to the BANK and will duly
and punctually perform all things on its part to be done or performed under the
FINANCING AGREEMENTS.
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10.03 The BORROWER shall, at all times, keep proper books of account which
shall at all times fairly reflect its financial condition and in which entries
will be made of its transactions in accordance with GAAP to the extent
applicable thereto.
10.04 The BORROWER shall make its books and records available, in its
offices, for inspection, examination and copying by the BANK and the BANK'S
representatives and will at all reasonable times (and, prior to a DEFAULT or
EVENT OF DEFAULT, upon reasonable notice), permit inspection of its books and
records and properties by the BANK and the BANK'S representatives.
10.05 The BORROWER will maintain its corporate existence in good standing.
The BORROWER will comply with all laws and regulations of the United States, or
any state or states thereof, of any political subdivision thereof and of any
governmental authority which may be applicable to it or to its business;
provided, however, that a failure so to comply which does not materially and
adversely affect its businesses or financial condition shall not be a breach
hereof.
10.06 The BORROWER will pay 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 payable by it
at such times and in such manner to prevent any penalty from accruing or any
lien or charge from attaching to its properties. The provisions of this
section, however, shall not preclude BORROWER from contesting in good faith any
such tax, nor shall there be a default hereunder, by reason of the existence of
a lien for taxes not then due provided that the BORROWER shall have set aside on
its books reserves certified by the BORROWER to be adequate for the timely
satisfaction of such obligations.
10.07 The BORROWER will put and maintain its properties in good repair,
working condition and order, reasonable wear and tear excepted, and from time to
time, make all needful and proper repairs, renewals and replacements.
10.08 The BORROWER will maintain insurance covering such risks and in such
minimum amounts as BANK may reasonably require, all such insurance to be in such
form and for such periods and written by such companies as shall be reasonably
acceptable to BANK. The BANK shall be named as an additional "loss payee" as
elsewhere herein provided and the BANK shall receive certified copies of such
original policies, if available, and upon the occurrence of an EVENT OF DEFAULT
the BANK shall forthwith be provided with and hold the originals of each such
policy.
10.09 The BORROWER will punctually and promptly make when due, after the
expiration of all applicable periods of grace or notice, all payments and
perform all other obligations which may be required of it with respect to any
indebtedness (whether for money borrowed, goods purchased, services rendered or
however such indebtedness may arise) owing to persons, firms or corporations
other than the BANK, including, without limitation, indebtedness which may be
secured by a security interest in assets of the BORROWER or its property and all
obligations under the terms of any Leases. The provisions of this Section shall
not preclude the BORROWER from contesting in good faith any such indebtedness or
obligation. The BORROWER may accept extended
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payment terms regularly offered by any creditor selling goods to the BORROWER or
furnishing services to the BORROWER.
10.10 The BORROWER shall pay or cause to be paid when due all amounts
necessary to fund in accordance with its terms any deferred compensation and/or
other employee benefit plans, whether now in existence or hereafter created and
whether subject to the applicable provisions of ERISA and all regulations
thereunder, and it will not withdraw from participation in, permit the
termination or partial termination of, or permit the occurrence of any other
event with respect to any deferred compensation plan maintained for the benefit
of employees under circumstances that could result in any liability to "PBGC",
or any of its successors or assigns, or to the entity which provides funds for
such deferred compensation plan. To the extent that BORROWER become subject to
the provision of the ERISA, BORROWER will, promptly upon obtaining knowledge
thereof, notify the BANK of (i) the occurrence of any "reportable event"
described in Section 4043 of ERISA, (ii) receipt of notice of an application by
the PBGC to institute proceedings to terminate an employee benefit plan, and
(iii) receipt of notice of any liability pursuant to Section 4202 of ERISA.
10.11 The BORROWER shall promptly give notice to BANK of the commencement
of any suit or proceedings against the BORROWER, in which the amount claimed
exceeds Two Hundred and Fifty Thousand and 00/100 Dollars ($250,000.00) unless
such liability is fully covered by insurance in effect and the insurer is
defending such action without reservation of rights against the BORROWER.
10.12 Upon the occurrence of any DEFAULT or EVENT OF DEFAULT, BORROWER
shall promptly give the BANK notice thereof.
10.13 The BORROWER will give the BANK not less than thirty (30) days'
prior notice of any proposed change in its principal places of business or chief
executive offices or the establishment of any other location of COLLATERAL,
other than as currently shown on EXHIBIT 10.13.
10.14 The BORROWER will give the BANK not less than thirty (30) days'
prior notice of any intended change in its corporate name or the adoption of any
trade name.
10.15 In the event of any change in the identification of the directors
and statutory officers of the BORROWER as reflected on EXHIBIT "10.15", the
BORROWER shall, within thirty (30) days thereafter, give notice thereof to BANK.
10.16 The BORROWER shall, as of the date hereof commence to maintain its
primary deposit accounts with BANK, from which payments due on LOANS may be
deducted.
ARTICLE XI
----------
NEGATIVE COVENANTS
------------------
11.01 The BORROWER will not issue evidences of INDEBTEDNESS nor create,
assume, become contingently liable for, nor suffer to exist INDEBTEDNESS for
borrowed
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money in addition to indebtedness to the BANK; provided, however, that
BORROWER may incur liabilities other than for money borrowed which are incurred
or arise in the ordinary course of the BORROWER'S business, and may in any
fiscal year of the BORROWER grant purchase money security interests in
connection with the purchase of property with a purchase price not to exceed Two
Hundred Fifty Thousand Dollars ($250,000.00) provided that the amount of
INDEBTEDNESS secured by such purchase money security interests shall not exceed
the lesser of (i) the purchase price or (ii) the fair market value of the
property financed and such purchase money security interest shall not relate to
any other assets or property of the BORROWER except the property thereby
acquired.
11.02 The BORROWER shall not make or continue any loans to any individual,
firm or corporation, including, without limitation, BORROWER'S, officers and
employees except for loans or advances to employees and officers in the ordinary
course of the BORROWER'S business not to exceed $100,000.00 at any time.
11.03 Except as described in Section 9.08, the BORROWER shall not invest
in or purchase any stock or securities of any individual, firm, partnership,
joint venture or corporation without the BANK'S prior written consent; provided,
however, that the BORROWER, without the BANK'S consent may invest in direct
obligations of or securities guaranteed by the United States of America or any
agency thereof, certificates of deposit or other obligations of the BANK or any
other member bank of the Federal Reserve System having assets of not less than
One Hundred Million Dollars, prime banker's acceptances, money-market funds,
commercial paper of a domestic issue rated either A1 by Standard & Poor's
Corporation or P1 by Xxxxx'x Investor Service, Inc., and other securities the
cost to BORROWER of which do not exceed One Hundred Thousand Dollars
($100,000.00) in the case of any single issuer.
11.04 The BORROWER will not merge or consolidate or be merged or
consolidated with or into any other corporation or entity.
11.05 Except for sales of INVENTORY in the ordinary course of business,
the BORROWER shall not sell or dispose of any of BORROWER'S assets except that
the BORROWER may sell or otherwise dispose of EQUIPMENT which is no longer
needed by the BORROWER for the conduct of its business.
11.06 Except with respect to the BANK as provided herein, the BORROWER
shall not grant or suffer to exist, any mortgage, pledge, title retention
agreement, security interest, lien or encumbrance with respect to any of its
assets, tangible or intangible, whether now owned or hereafter acquired, or
subject any of its assets to the prior payment of any indebtedness, or transfer
in any manner any of such assets with the intent or purpose, directly or
indirectly, of subjecting such assets to the payment of INDEBTEDNESS except (i)
landlords', carriers', warehousemans', mechanics' and other similar liens
arising by operation of law in the ordinary course of the BORROWER'S businesses;
(ii) liens arising out of pledge or deposits under worker's compensation,
unemployment insurance, old age pension, social security, retirement benefits or
other similar legislation; (iii) liens in favor of the BANK; (iv) liens for
taxes not yet due or which are being contested in good faith by appropriate
proceedings and the BORROWER maintain appropriate reserves (reasonably approved
by the BANK) in respect thereto; (iv) judgment or prejudgment liens with respect
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to which there has issued a stay of execution pending appeal or otherwise and as
to which the BORROWER maintain appropriate reserves in respect thereto
(reasonably approved by the BANK); (vi) easements, rights of way, restrictions
and other similar charges or liens relating to real property and not interfering
in a material way with the ordinary conduct of the BORROWER'S business; (vii)
liens securing the payment of INDEBTEDNESS permitted under Section 11.01 hereof;
and (viii) encumbrances on the BORROWER'S property or assets created in
connection with the refinancing of INDEBTEDNESS secured by liens on such
property permitted hereunder that do not extend to property and assets of the
BORROWER not encumbered prior to such refinancing.
11.07 The BORROWER will not engage in any business other than the business
in which it is currently engaged or a business reasonably allied thereto.
11.08 The BORROWER shall not guaranty, endorse, contingently agree to
purchase or otherwise become liable for obligations for borrowed money of any
other person, firm partnership, joint venture, corporation or other entity;
provided, however, that the provisions of this Section 11.08 shall not preclude
the BORROWER from endorsing checks, drafts or other similar items for collection
in the ordinary course of business.
11.09 The BORROWER will not make or enter into any so-called management
agreement whereby management, supervision or control of its business or any of
its principal functions shall be delegated to any persons other than its duly
elected officers and directors.
11.10 The BORROWER will not change its FISCAL YEAR.
11.11 The BORROWER will not, for any four (4) consecutive fiscal quarters,
permit DEBT SERVICE COVERAGE to be less than 1.25 to 1. Such covenant shall be
calculated quarterly based upon the preceding 12 months of operations commencing
with the twelve month period year ending June 30, 1997.
11.12 The BORROWER will not as at December 31, 1997 have permitted its
TANGIBLE NET WORTH to be less than Forty Two Million Dollars ($42,000,000.00)
nor at any time in any FISCAL YEAR thereafter permit its tangible net worth to
be less than (a) Forty Two Million Dollars ($42,000,000.00) plus (b) Two Million
Dollars ($2,000,000.00) multiplied by the number of whole years which shall have
elapsed subsequent to December 31, 1997.
11.13 Borrower does not own and has no present intention of acquiring any
MARGIN STOCK. None of the funds advanced to the Borrower hereunder will be used
to purchase or carry any Margin Stock. Neither Borrower, nor any agent acting
on its behalf, has taken any action which might cause this Agreement or either
of the Notes to violate Regulation G, Regulation T, Regulation U, Regulation X
or any other regulation of the Board of Governors of the Federal Reserve System
or to violate the Securities Exchange Act of 1934, as now in effect.
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ARTICLE XII
-----------
EVENTS OF DEFAULT
-----------------
12.01 The occurrence of any of the following events shall be an EVENT OF
DEFAULT hereunder and under each of the FINANCING AGREEMENTS:
(a) The REVOLVING LOAN(S) and all accrued interest thereon shall not be
paid in full on the TERMINATION DATE.
(b) The BORROWER shall fail to make a payment of interest or principal on
account of the REVOLVING LOAN(S), the REAL ESTATE LOAN, the TERM LOAN,
the BRIDGE LOAN, the SHORT TERM REVOLVING LOAN or any other fee or
charge arising under the FINANCING AGREEMENTS within five (5) days of
when such payment is due, (or if within any grace period provided
therein).
(c) The BORROWER shall fail to observe or perform any covenants contained
in this Agreement other than with respect to the payment of money
within TEN (10) days of notice from the BANK or such earlier date as
may be necessary to protect the interests of the BANK.
(d) The BORROWER shall fail to observe any other covenant or agreement
contained in any FINANCING AGREEMENT or in any instrument, document or
agreement executed pursuant thereto when required or within any grace
period provided therein.
(e) Any written warranty, representation or statement made or furnished to
BANK by or on behalf of the BORROWER proves to have been false in any
material respect when made or furnished.
(f) Any event which results in the acceleration of the maturity of the
indebtedness of the BORROWER (i) to the BANK, or (ii) to any other
party under any indenture, agreement, undertaking or otherwise if the
same relates to aggregate INDEBTEDNESS, in excess of $250,000.00.
(g) Any levy or seizure of any property of the BORROWER in which the
amount involved exceeds in the aggregate $250,000.00 and which levy or
seizure is not stayed within thirty (30) days and if reasonably
required by the BANK adequate security is imposed.
(h) Any attachment of any property of the BORROWER which attachment
secures claim in the aggregate of more than Two Hundred and Fifty
Thousand and 00/100 Dollars ($250,000.00) or more and is not
discharged within thirty (30) days.
(i) Dissolution, termination of existence, as the case may be of the
BORROWER.
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(j) The BORROWER shall: (i) cease, be unable or admit in writing its,
inability to pay its debts as they mature or make a general assignment
for the benefit of, or enter into any composition, trust mortgage or
other arrangement with creditors; (ii) apply for, or consent (by
admission of material allegations of a petition or otherwise) to the
appointment of a receiver, trustee or liquidator of the BORROWER or of
a substantial part of its assets, or authorize such application or
consent, or proceedings seeking such appointment shall be commenced
against the BORROWER and continue unstayed and undismissed for sixty
(60) days; or (iii) apply for, or consent (by admission of material
allegations of a petition or otherwise) to the application of any
bankruptcy, reorganization, readjustment of debt, insolvency,
dissolution, liquidation or other similar law of any jurisdiction, or
authorize such application or consent, or proceedings to such end
shall be instituted against the BORROWER and remain unstayed and
undismissed for sixty (60) days, be approved as properly instituted or
result in adjudication of bankruptcy or insolvency.
12.02 Upon the occurrence of any EVENT OF DEFAULT, all OBLIGATIONS
including, without limitation, the REVOLVING LOAN, the TERM LOAN, the REAL
ESTATE LOAN the BRIDGE LOAN and the SHORT TERM REVOLVING LOAN, as the case may
be shall, at the BANK'S option, become immediately due and payable without
notice or demand and the BANK shall have all such rights and remedies as are
provided herein or under the other FINANCING AGREEMENTS or at law or in equity.
ARTICLE XIII
------------
NOTICES
-------
13.01 All communications herein provided shall be in writing and shall be
sufficient if (i) sent by United States mail, registered or certified, postage
prepaid, (ii) delivered by national courier service which requires receipt
evidencing delivery or (iii) sent by confirmed telephone facsimile and addressed
as provided in this Article.
13.02 The addresses to which such communications shall be sent are as
follows:
a) If intended for the BORROWER, to:
DM Management Company
00 Xxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxx X. Xxxxxx, Chief Financial Officer
with courtesy copies to:
Xxxxx, Xxxx & Xxxxx, LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
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Attn: Xxxxx X. Xxxxxxx, Esq.
b) If intended for BANK to:
Citizens Bank of Massachusetts
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxx X. Xxxxx, Senior Vice President
with courtesy copies to:
Xxxxxxxxx & Manello, P.C.
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Fax: 000-000-0000
Attn: Xxxxxxx X. Xxxxxx, Esq.
13.03 The addresses set forth herein may be changed by notice to the other
party hereunder.
13.04 Any notice sent in accordance with the provisions and this Article
XIII shall be effective (i) if mailed, on the second BUSINESS DAY, (ii) if
delivered by courier service, upon receipt or (iii) if sent by confirmed
telephone facsimile, upon transmission.
ARTICLE XIV
-----------
MISCELLANEOUS
-------------
14.01 The BORROWER will, from time to time, execute and deliver to the
BANK all such other and further reasonable instruments and documents and take or
cause to be taken all such other and further action as the BANK may reasonably
request in order to effect and confirm more securely in the BANK all rights
contemplated in this Agreement, and in any other of the FINANCING AGREEMENTS.
14.02 The BORROWER may take any action herein prohibited or omit to
perform any act required to be performed by the BORROWER if the BORROWER shall
obtain the BANK'S prior written consent to each such action, or omission to act.
No waiver on the BANK'S part on any one occasion shall be deemed a waiver on any
other occasion. The BANK shall not be deemed to have waived any of its rights
hereunder unless such waiver shall be in writing and duly signed by an
authorized officer of the BANK.
14.03 This Agreement may be amended only by an instrument in writing and
duly signed by the BORROWER and an authorized officer of the BANK.
14.04 All covenants, agreements, representations and warranties contained
in this Agreement shall bind the BORROWER and its successors and assigns, and
shall inure to the BANK'S benefit and the benefit of the BANK'S successors and
assigns, whether
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expressed or not; provided, however, that the BORROWER may not assign its rights
or benefits hereunder.
14.05 All rights of the BANK hereunder shall be cumulative. The BANK
shall not be required to have recourse to any COLLATERAL or other security
before enforcing its rights or remedies against the BORROWER. BORROWER hereby
waives presentment and protest of any instrument and any notice thereof.
14.06 If any provisions of this Agreement shall be held to be illegal or
unenforceable, such illegality or unenforceability shall relate solely to such
provision and shall not affect the remainder of this Agreement.
14.07 This Agreement shall be construed and enforced as an instrument
under seal in accordance with the laws of the Commonwealth of Massachusetts.
14.08 The captions herein contained are inserted as a matter of
convenience only and such captions do not form a part of this Agreement and
shall not be utilized in the construction hereof.
14.09 In the event the BORROWER fails to make any payment or take any
action required by this Agreement or any other of the FINANCING AGREEMENTS, BANK
may, but shall not be required to, upon prior notice to the BORROWER make such
payment or to take, or cause to be taken, such action. If the BANK chooses to
make any such payment or to take or cause to be taken any such action, the
amount of such payment and the cost of such action shall become part of the
OBLIGATIONS, shall be payable upon demand and, until paid in full, shall bear
interest at the rate set forth in Section 7.09 hereof.
14.10 The BORROWER shall pay on demand all reasonable out-of-pocket costs
and expenses of every kind and nature, including reasonable attorneys' fees and
costs, incurred or expended by the BANK in connection with the preparation of
the FINANCING AGREEMENTS, the making of LOANS hereunder, the collection or sale
or attempted collection or sale of the COLLATERAL and the protection or
supervision thereof and the protection or enforcement of the BANK'S rights
hereunder. The BORROWER acknowledges that such supervision will include audits
of the BORROWER' business, records, and assets by employees, agents, or other
representatives of the BANK but the BORROWER shall not be required for to pay
for such audits unless undertaken after EVENT OF DEFAULT shall have occurred and
while the same shall be continuing.
14.12 THE BANK, and the BORROWER each irrevocably waive all right to a
trial by jury in any proceeding hereafter instituted by or against the BANK or
the BORROWER in respect of this Agreement or arising out of any FINANCING
AGREEMENTS.
ARTICLE XV
----------
CONDITIONS PRECEDENT
--------------------
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15.01 Unless each of the following conditions are satisfied at the
CLOSING, and until each of the following conditions are satisfied, no new LOANS
or ADVANCES will be made, and the BANK shall have no obligation under this
Agreement:
(a) All instruments and documents required to be executed on or prior to
the CLOSING pursuant to the terms hereof shall have been duly executed
and delivered.
(b) The BANK shall hold a valid and perfected security interest in the
COLLATERAL subject to no other lien, charge, encumbrances or security
interest of any kind or nature except as otherwise explicitly provided
in this Agreement.
(c) The BANK shall have received from counsel to the BORROWER opinions
satisfactory in form and substance to the BANK.
(d) The BANK shall have received a certificate from the Clerk or other
appropriate recording officer of each of the BORROWER in form and
substance satisfactory to the BANK and its counsel, showing the
authority of the BORROWER to enter into and amend this Agreement and,
without limitation, the FINANCING AGREEMENTS, to perform the
OBLIGATIONS and the specific authority of the persons executing this
Agreement and all instruments and documents pursuant hereto so to
execute. The BANK shall have received any amendments, certified
copies of the Articles of Organization (or other charter documents)
and By-Laws of the BORROWER since the same were last submitted to it.
(e) All policies of insurance described herein or in any other of the
FINANCING AGREEMENTS, have been obtained, be in full force and effect,
and shall show BANK as an additional loss payee. The BANK shall have
received a binder with respect to each such policy showing compliance
herewith. Such policies shall not be cancelled except upon thirty
(30) days advance written notice to BANK.
(f) The BANK shall have received such certificates from public officials
with respect to the corporate existence of each of the corporations
constituting the BORROWER and its qualification to do business and
good standing, as the BANK may reasonably require.
(f) BANK shall have received such other and further documents and
instruments as BANK may reasonably require.
ARTICLE XVI
-----------
CLOSING
-------
16.01 All instruments and documents then to be executed pursuant hereto
were executed and delivered at a CLOSING held on March 4, 1998 at the offices of
Xxxxxxxxx & Manello, P.C., 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx.
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ARTICLE XVII
------------
TERMINATION
-----------
17.01 Upon the TERMINATION DATE, all obligations of BANK to make ADVANCES
shall terminate, and the CREDIT BALANCE shall become immediately due and payable
in full without notice or demand.
17.02 Notwithstanding the passage of the TERMINATION DATE, and the payment
of the CREDIT BALANCE, until all OBLIGATIONS shall have been fully paid,
performed and satisfied, all rights of BANK arising under this Agreement and
other FINANCING AGREEMENTS shall continue, and all obligations of BORROWER
arising under this Agreement and the other FINANCING AGREEMENTS shall continue.
17.03 BANK in its sole discretion, from time to time may extend the
TERMINATION DATE by written notice to BORROWER. BANK may condition any such
extension on such matters that it determines appropriate. BANK is in no way
obligated to extend or to consider extending the TERMINATION DATE.
ARTICLE XVIII
-------------
INCONSISTENCY IN FINANCING AGREEMENTS
-------------------------------------
18.01 In the event that in any provision of the other FINANCING
AGREEMENTS, is inconsistent with a provision of this Second Amended and Restated
Loan Agreement, then and in such event, the provisions of this instrument shall
control.
18.02 The existence of a provision in the other FINANCING AGREEMENTS which
are not present in this Second Amended and Restated Loan Agreement shall not be
deemed to be an inconsistency.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals as of
the date first above written.
DM MANAGEMENT COMPANY
By: /s/ Xxxxx X. Xxxx
------------------------------------
Xxxxx X. Xxxx, Corporate Controller
CITIZENS BANK OF MASSACHUSETTS
By: /s/ Xxxx X. Xxxxx, SVP
------------------------------------
Xxxx X. Xxxxx, Senior Vice President
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