SECOND AMENDED AND RESTATED
CREDIT AND SECURITY AGREEMENT
AMONG
THE XXXXXXX COMPANY, INC.,
XXXXXXX RELOCATION SERVICES, INC.,
REFERRAL ASSOCIATES OF NEW ENGLAND, INC.,
THE XXXXXXX INSURANCE AGENCY, INC.,
HILLSHIRE HOUSE, INC.,
REAL ESTATE REFERRAL, INC.,
DOLLAR DRY DOCK REAL ESTATE, INC., and
THE HERITAGE GROUP, INC.,
as Joint and Several Borrowers,
AND
THE XXXXXXX COMPANIES, INC.,
as Guarantor,
AND
BANKBOSTON, N.A.,
as Lender
Dated as of May 8, 1998
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TABLE OF CONTENTS
TITLE Page
ARTICLE 1 DEFINITIONS 2
Section 1.1 Definitions 2
Section 1.2 Accounting Terms 10
Section 1.3 Multiple Borrowers 10
ARTICLE 2 DESCRIPTION OF CREDIT 11
Section 2.1 The Revolving Loans 11
Section 2.2 The Acquisition Facility Loans 12
Section 2.3 The Term Loan 13
Section 2.4 Funding of Loans; Loan Account 13
Section 2.5 The Notes 14
Section 2.6 Reduction of Commitment Amounts 14
Section 2.7 Interest 14
Section 2.8 Fees 15
Section 2.9 Repayment of the Loans 16
Section 2.10 Prepayment of the Loans 16
Section 2.11 Manner and Time of Payments 19
Section 2.12 Overdue Payments 19
Section 2.13 Use of Proceeds 19
Section 2.14 Conditions for Basing Interest on the LIBOR Rate 20
Section 2.15 Break Funding Payments 20
Section 2.16 Change in Applicable Laws, Regulations, etc. 21
Section 2.17 Taxes 21
Section 2.18 Capital Requirements 22
ARTICLE 3 CONDITIONS OF LOANS 22
Section 3.1 Conditions Precedent to Initial Loans 23
Section 3.2 Conditions Precedent to all Loans 24
ARTICLE 4 REPRESENTATIONS AND WARRANTIES 24
Section 4.1 Organization and Qualification 24
Section 4.2 Corporate Authority 24
Section 4.3 Valid Obligations 25
Section 4.4 Consents or Approvals 25
Section 4.5 Title to Properties; Absence of Encumbrances 25
Section 4.6 Financial Statements 25
Section 4.7 Changes 25
Section 4.8 Office and Collateral Locations 26
Section 4.9 Taxes 26
Section 4.10 Litigation 26
Section 4.11 Margin Stock 26
Section 4.12 Subsidiaries 26
Section 4.13 Investment Company Act 26
Section 4.14 Compliance with ERISA 26
Section 4.15 Environmental Matters 26
ARTICLE 5 AFFIRMATIVE COVENANTS 28
Section 5.1 Financial Statements and other Reporting Requirements 28
Section 5.2 Conduct of Business 30
Section 5.3 Taxes 30
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Section 5.4 Inspection by the Bank 31
Section 5.5 Maintenance of Books and Records 31
Section 5.6 Cash Flow Coverage Ratio 31
Section 5.7 Leverage Coverage 31
Section 5.8 Further Assurances 31
Section 5.9 Deposit Accounts 31
Section 5.10 Year 2000 Compliance 32
Section 5.11 Merger of Certain Credit Parties 32
ARTICLE 6 NEGATIVE COVENANTS 32
Section 6.1 Indebtedness 33
Section 6.2 Contingent Liabilities 33
Section 6.3 Leases 33
Section 6.4 Sale and Leaseback 34
Section 6.5 Encumbrances 34
Section 6.6 Merger; Consolidation; Sale or Lease of Assets 35
Section 6.7 Equity Distributions 35
Section 6.8 Investments; Acquisitions 35
Section 6.9 ERISA 36
ARTICLE 7 SECURITY 36
Section 7.1 Security Interest 36
Section 7.2 Location of Records and Collateral; Name Change 37
Section 7.3 Status of Collateral 37
ARTICLE 8 DEFAULTS 37
Section 8.1 Events of Default 37
Section 8.2 Remedies 39
ARTICLE 9 GUARANTY BY THE GUARANTOR 40
Section 9.1 The Guarantee 40
Section 9.2 Obligations Unconditional 41
Section 9.3 Reinstatement 41
Section 9.4 Subrogation 42
Section 9.5 Remedies 42
Section 9.6 Instrument for the Payment of Money 42
Section 9.7 Continuing Guarantee 42
ARTICLE 10 MISCELLANEOUS 42
Section 10.1 Notices 42
Section 10.2 Expenses 43
Section 10.3 Set-Off 43
Section 10.4 Term of Agreement 44
Section 10.5 No Waivers 44
Section 10.6 Governing Law 44
Section 10.7 Amendments 44
Section 10.8 Binding Effect of Agreement 44
Section 10.9 Counterparts 44
Section 10.10 Partial Invalidity 44
Section 10.11 Captions 44
Section 10.12 Waiver of Jury Trial 44
Section 10.13 Entire Agreement 45
Section 10.14 Bank's Right to Pledge 45
Section 10.15 Bank's Right to Sell Loans to Third Parties 45
Section 10.16 Bank's Right to Grant Participations 46
Section 10.17 Bank's Right to Furnish Information 46
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EXHIBITS
Exhibit A-1 Form of Revolving Note
Exhibit A-2 Form of Acquisition Facility Note
Exhibit A-3 Form of Term Note
Exhibit B Form of Compliance Certificate
Exhibit C Form of Borrowing Base Certificate
Exhibit D Form of Notice of Borrowing
SCHEDULES
Schedule 4.1 Foreign Jurisdictions
Schedule 4.5 Encumbrances
Schedule 4.8 Office and Collateral Locations
Schedule 4.10 Litigation
Schedule 4.12 Subsidiaries
Schedule 6.1 Outstanding Indebtedness
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SECOND AMENDED AND RESTATED
CREDIT AND SECURITY AGREEMENT
THIS SECOND AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT is made as of
May 8, 1998, by and among The XxXxxxx Company, Inc., a Massachusetts
corporation, XxXxxxx Relocation Services, Inc., a Massachusetts corporation,
Referral Associates of New England, Inc., a Massachusetts corporation, The
XxXxxxx Insurance Agency, Inc., a Massachusetts corporation, Hillshire House,
Inc., a Connecticut corporation, Real Estate Referral, Inc., a Connecticut
corporation, Dollar Dry Dock Real Estate, Inc., a Delaware corporation, and The
Heritage Group, Inc., a Connecticut corporation, as joint and several borrowers
(collectively, the "Borrowers"), The XxXxxxx Companies, Inc., a Massachusetts
corporation, as guarantor (the "Guarantor"), and BankBoston, N.A., as lender
(the "Bank").
WHEREAS, certain of the Borrowers, the Guarantor and the Bank entered into a
Revolving Credit and Security Agreement dated as of June 29, 1994, as amended
(the "Initial Credit Agreement"), pursuant to which the Bank established certain
credit facilities in favor of such Borrowers; and
WHEREAS, the terms and provisions of the Initial Credit Agreement were
amended and restated pursuant to an Amended and Restated Credit and Security
Agreement dated as of March 30, 1995, as amended (the "Amended Credit
Agreement"), among certain of the Borrowers, the Guarantor and the Bank; and
WHEREAS, the Borrowers and the Guarantor have requested that the terms and
provisions of the Amended Credit Agreement be amended and restated to, among
other things, increase the amounts of the credit facilities established by the
Bank in favor of the Borrowers; and
WHEREAS, the Bank has agreed to increase the amounts of the credit
facilities established by the Bank in favor of the Borrowers and to amend and
restate the Amended Credit Agreement, all as more fully set forth herein;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrowers, the Guarantor and
the Bank hereby agree that the Amended Credit Agreement be, and it hereby is
amended, restated and replaced in its entirety, as follows:
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ARTICLE 1 DEFINITIONS
Section 1.1 Definitions.
All capitalized terms used in this Agreement or in the Notes (as defined
below) or in any certificate, report or other document made or delivered
pursuant to this Agreement (unless otherwise defined therein) shall have the
meanings assigned to them below:
Accounts. All accounts, contract rights and other rights of the Borrowers to
payment for goods sold or leased or for services rendered, all sums of money or
other proceeds due or becoming due thereon, all instruments pertaining thereto,
all guaranties and security therefor, and all goods giving rise thereto and the
rights pertaining to such goods, including the right of stoppage in transit, and
all related insurance.
Acquisition. Any transaction, or any series of related transactions,
consummated after the date hereof, by which (a) any of the Credit Parties
acquires the business of, or all or substantially all of the assets of, any
Person which is not one of the Credit Parties, or any division of any Person,
whether through the purchase of assets, purchase of stock or other beneficial
interests, by merger or otherwise or (b) any Person that was not theretofore a
Subsidiary of any of the Credit Parties becomes a Subsidiary of any of the
Credit Parties.
Acquisition Facility Commitment. The commitment of the Bank to make
Acquisition Facility Loans to the Borrowers in an aggregate amount not to exceed
the Acquisition Facility Commitment Amount.
Acquisition Facility Commitment Amount. Twenty Million Dollars ($20,000,000)
or any lesser amount, including zero, resulting from the termination or
reduction of such amount in accordance with Sections 2.6 or 8.2 of this
Agreement.
Acquisition Facility Commitment Period. The period beginning on the date of
this Agreement and extending through but not including the Acquisition Facility
Conversion Date or such earlier date on which the Acquisition Facility
Commitment is terminated or the Acquisition Facility Commitment Amount is
reduced to zero in accordance with the terms hereof.
Acquisition Facility Conversion Date. October 30, 1999.
Acquisition Facility Loan. A loan made to the Borrowers by the Bank pursuant
to Section 2.2 of this Agreement, and "Acquisition Facility Loans" means all of
such loans, collectively.
Acquisition Facility Maturity Date. October 30, 2004.
Acquisition Facility Note. A promissory note of the Borrowers, substantially
in the form of Exhibit A-2 hereto, evidencing the obligations of the Borrowers
to the Bank to repay the Acquisition Facility Loans.
Affiliate. With respect to any specified Person, another Person that
directly, or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with the Person specified.
Notwithstanding the foregoing, no individual shall be an Affiliate solely by
reason of his or her being a director, officer or employee of one or more of the
Credit Parties.
Agreement. This Second Amended and Restated Credit and Security Agreement,
as the same may be supplemented or amended from time to time.
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Applicable Fixed Rate. The fixed rate of interest specified by the Bank on
the Business Day immediately preceding the Acquisition Facility Conversion Date
as the fixed rate of interest that will apply to the Acquisition Facility Loans
after the Acquisition Facility Conversion Date if the Borrowers select to have
the Acquisition Facility Loans bear interest at the Applicable Fixed Rate
pursuant to Section 2.7. The Applicable Fixed Rate shall be determined by the
Bank based upon the applicable fixed rates of interest charged by the Bank to
other commercial customers of the Bank having credit and risk profiles similar
to those of the Borrowers for commercial loans having principal balances,
amortization schedules and maturities similar to those of the Acquisition
Facility Loans as of the Acquisition Facility Conversion Date.
Bank. See Preamble.
Base Accounts. Accounts of the Borrowers arising from commissions due on
purchase and sale agreements for residential real property as to which the Bank
has a perfected first priority security interest and the Borrowers have
furnished to the Bank information as required by Section 5.1(j).
Base Rate. The greater of (i) the rate of interest announced from time to
time by the Bank at its head office as its Base Rate, and (ii) the Federal Funds
Effective Rate plus 1/2 of 1% per annum (rounded upwards, if necessary, to the
next 1/8 of 1%).
Base Rate Revolving Loan. Any Revolving Loan made to the Borrowers by the
Bank bearing interest at a rate determined by reference to the Base Rate.
Borrowers. See Preamble.
Borrowing Base. An amount equal to seventy-five percent (75%) of the Net
Outstanding Amount of Base Accounts. Whenever the Borrowing Base is used as a
measure of Loans it shall be computed as of, and the Loans referred to shall be
those reflected in the Loan Account at, the time in question.
Business Day. Any day that is not a Saturday, Sunday or other day on which
commercial banks in Boston, Massachusetts are authorized or required by law to
remain closed; provided that, when used in connection with a LIBOR Loan, the
term "Business Day" shall also exclude any day on which banks are not open for
dealings in U.S.
dollar deposits in the London interbank market.
Capital Expenditures. All capital expenditures as defined under GAAP not
financed with Loans under this Agreement.
Cash Flow Coverage Ratio. The ratio, as at any date of determination
thereof, of (a) Consolidated EBITDA for the period of four consecutive fiscal
quarters ending on or most recently ended prior to such date minus the aggregate
amount paid, or required to be paid, by the Credit Parties and their
Subsidiaries in cash in respect of taxes for such period minus the aggregate
amount of Capital Expenditures of the Credit Parties and their Subsidiaries
during such period to (b) Total Debt Service during such period.
Casualty Event. With respect to any Person, any loss of or damage to, or any
condemnation or other taking of, Property of such Person for which such Person
or any of its Subsidiaries receives insurance proceeds, or proceeds of a
condemnation award or other compensation.
Closing Date. May 8, 1998.
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Code. The Internal Revenue Code of 1986 and the rules and regulations
thereunder, collectively, as the same may from time to time be supplemented or
amended and remain in effect.
Collateral. All personal property of the Borrowers, tangible and intangible,
in which the Bank has been granted a security interest or lien, whether pursuant
to this Agreement or pursuant to one or more collateral assignments or security
agreements as shall be entered into by and among one or more of the Borrowers
and the Bank.
Consolidated EBITDA. For any period for which the amount thereof shall be
determined, the consolidated operating income of the Credit Parties and their
Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP) for such period (calculated before taxes, interest,
depreciation, amortization and any other non-cash income or charges accrued for
such period, excluding any extraordinary and unusual gains or losses during such
period and excluding the proceeds of any Casualty Events and Dispositions
received by the Credit Parties and their Subsidiaries during such period.
Controlled Group. All trades or businesses (whether or not incorporated)
under common control that, together with the Credit Parties, are treated as a
single employer under Section 414(b) or 414(c) of the Code or Section 4001 of
ERISA.
Credit Parties. The Guarantor and the Borrowers, collectively.
Default. An Event of Default or event or condition that, but for the
requirement that time elapse or notice be given, or both, would constitute an
Event of Default.
XxXxxxx Mortgage. XxXxxxx Mortgage Services, Inc., a Massachusetts
corporation.
Disposition. Any sale, assignment, transfer or other disposition of any
property (whether now owned or hereafter acquired) by the Credit Parties or any
of their Subsidiaries to any other Person excluding any sale, assignment,
transfer or other disposition of any property sold or disposed of in the
ordinary course of business and on ordinary business terms.
Encumbrances. See Section 6.5.
ERISA. The Employee Retirement Income Security Act of 1974 and the rules and
regulations thereunder, collectively, as the same may from time to time be
supplemented or amended and remain in effect.
Environmental Laws. Any and all applicable foreign, federal, state and local
environmental, health or safety statutes, laws, regulations, rules, ordinances,
policies and rules or common law (whether now existing or hereafter enacted or
promulgated), of all governmental agencies, bureaus or departments which may now
or hereafter have jurisdiction over the Borrowers or any of its Subsidiaries and
all applicable judicial and administrative and regulatory decrees, judgments and
orders, including common law rulings and determinations, relating to injury to,
or the protection of, real or personal property or human health or the
environment, including, without limitation, all requirements pertaining to
reporting, licensing, permitting, investigation, remediation and removal of
emissions, discharges, releases or threatened releases of Hazardous Materials,
chemical substances, pollutants or contaminants whether solid, liquid or gaseous
in nature, into the environment or relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of such
Hazardous Materials, chemical substances, pollutants or contaminants.
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Escrowed Funds. Funds, securities or other investments held by the
Borrowers, or invested by the Borrowers in deposit or other accounts or
investments, on behalf of parties to offers to purchase and purchase and sale
agreements covering properties in respect to which the Borrowers act as broker
or co-broker, including without limitation Pledged Escrow Proceeds.
Event of Default. Any event described in Section 8.1.
Federal Funds Effective Rate. For any day, a fluctuating interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day that is a Business Day, the
average of the quotations for such day on such transactions received by the Bank
from three Federal funds brokers of recognized standing selected by the Bank.
Guarantees. As applied to the Credit Parties and their Subsidiaries, all
guarantees, endorsements or other contingent or surety obligations with respect
to obligations of others whether or not reflected on the consolidated balance
sheet of the Credit Parties and their Subsidiaries, including any obligation to
furnish funds, directly or indirectly (whether by virtue of partnership
arrangements, by agreement to keep-well or otherwise), through the purchase of
goods, supplies or services, or by way of stock purchase, capital contribution,
advance or loan, or to enter into a contract for any of the foregoing, for the
purpose of payment of obligations of any other person or entity.
Guarantor. See Preamble.
Hazardous Material. Any substance (a) the presence of which requires or may
hereafter require notification, investigation or remediation under any
Environmental Law; (b) which is or becomes defined as a "hazardous waste",
"hazardous material" or "hazardous substance" or "controlled industrial waste"
or "pollutant" or "contaminant" under any present or future Environmental Law or
amendments thereto including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. Section 9601
et seq.) and any applicable local statutes and the regulations promulgated
thereunder; (c) which is toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic or otherwise hazardous and is or becomes
regulated by any governmental authority, agency, department, commission, board,
agency or instrumentality of any foreign country, the United States, any state
of the United States, or any political subdivision thereof to the extent any of
the foregoing has or had jurisdiction over any of the Credit Parties or any of
their Subsidiaries; or (d) without limitation, which contains gasoline, diesel
fuel or other petroleum products, asbestos or polychlorinated biphenyls
("PCB's").
Indebtedness. As applied to the Credit Parties and their Subsidiaries, (a)
all obligations for borrowed money or other extensions of credit whether or not
secured or unsecured, absolute or contingent, including, without limitation,
unmatured reimbursement obligations with respect to letters of credit or
guarantees issued for the account of or on behalf of any of the Credit Parties
or any of their Subsidiaries and all obligations representing the deferred
purchase price of property, other than accounts payable arising in the ordinary
course of business, (b) all obligations evidenced by bonds, notes, debentures or
other similar instruments, (c) all obligations secured by any mortgage, pledge,
security interest or other lien on property owned or acquired by any of the
Credit Parties or any of their Subsidiaries whether or not the obligations
secured thereby shall have been assumed, (d) that portion of all obligations
arising under capital leases that is required to be capitalized on the
consolidated balance sheet of the Credit Parties and their Subsidiaries, (e) all
Guarantees, and (f) all obligations that are immediately due and
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payable out of the proceeds of or production from property now or hereafter
owned or acquired by any of the Credit Parties or any of their Subsidiaries.
Investment. The purchase or acquisition of any share of capital stock,
partnership interest, evidence of indebtedness or other equity security of any
other person or entity, any loan, advance or extension of credit to, or
contribution to the capital of, any other person or entity, any real estate held
for sale or investment, any commodities futures contracts held other than in
connection with bona fide hedging transactions, any other investment in any
other person or entity, and the making of any commitment or acquisition of any
option to make an Investment.
Lease Line. The line of credit established by BancBoston Leasing, Inc.
("BancBoston Leasing") for the leasing of equipment by the Borrowers, pursuant
to such terms and conditions as may from time to time be agreed upon by the
Borrowers and BancBoston Leasing pursuant to such documentation as BancBoston
Leasing may from time to time require. As of the Closing Date, the maximum
aggregate principal amount of the obligations of the Borrowers to BancBoston
Leasing under the Lease Line is $4,000,000.
Leverage Ratio. The ratio, as at any date of determination thereof, of (a)
all Indebtedness of the Credit Parties and their Subsidiaries for borrowed money
(including obligations under capital leases) as of such date minus the aggregate
amount of Indebtedness of XxXxxxx Mortgage under the Mortgage Warehousing
Facility as of such date to (b) Consolidated EBITDA for the period of four
consecutive fiscal quarters ending on or most recently ended prior to such date.
LIBOR Loan. Any Revolving Loan made to the Borrowers by the Bank bearing
interest at a rate determined by reference to the LIBOR Rate.
LIBOR Period. With respect to each LIBOR Loan requested by the Borrowers,
the period, selected by the Borrowers pursuant to Section 2.7, of one, two,
three or six months, commencing on any Business Day; provided, however, that no
LIBOR Period with respect to all or any portion of the Revolving Loans shall
extend beyond the Revolving Loan Termination Date. If any LIBOR Period so
selected would otherwise end on a date which is not a Business Day, such LIBOR
Period shall instead end on the next preceding or succeeding Business Day as
determined by the Bank. Each determination by the Bank of any LIBOR Period
shall, in the absence of manifest error, be conclusive.
LIBOR Rate. With respect to each LIBOR Loan requested by the Borrowers for a
specified LIBOR Period, the rate per annum designated by the Bank as the "LIBOR"
rate for such LIBOR Period on the day that is two (2) Banking Days preceding the
first day of such LIBOR Period. The "LIBOR" rate designated by the Bank shall be
determined on the basis of the offered rates for deposits in U.S. dollars on the
London interbank market. In the event that the Bank is unable for any reason to
determine an appropriate basis for designating the "LIBOR Rate" for all or any
portion of the Revolving Loans, the "LIBOR Rate" for the Revolving Loans or such
portion, as the case may be, shall not be available to the Borrowers.
Loan. The Term Loan or any Revolving Loan or any Acquisition Facility Loan;
and "Loans" shall mean the Term Loan and all Revolving Loans and all Acquisition
Facility Loans, collectively.
Loan Account. The account on the books of the Bank in which all debits and
credits relating to the Obligations are recorded, including, without limitation,
all Loans and other obligations and all payments on Loans and proceeds of
Collateral.
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Mortgage Warehousing Facility. The credit facility established by Corestates
Bank, N.A. in favor of XxXxxxx Mortgage to finance mortgages held for sale on
residential property, as in effect on the date hereof.
Net Income or Net Loss. Net income or loss, excluding extraordinary items,
of the Guarantor and its Subsidiaries (on a consolidated basis) for the period
in question, determined in accordance with GAAP.
Net Outstanding Amount of Base Accounts. The net amount of Base Accounts
outstanding after (a) eliminating from the aggregate amount of outstanding Base
Accounts (i) such Base Accounts that are more than sixty (60) days past the
projected closing date set forth in the purchase and sale agreement to which
they relate, (ii) any amount of any Base Account owed to any other party
including, without limitation, any broker, whether such broker is an employee of
any of the Borrowers, an independent contractor associated with any of the
Borrowers or a broker unaffiliated with the Borrowers or any of their
Subsidiaries and (iii) a reserve, based upon historical data, for uncollectible
Base Accounts and (b) deducting from the aggregate face amount of the remaining
Base Accounts, to the extent not already deducted, offsets for amounts owing to
any party to a purchase and sale agreement and all amounts due on any Base
Account considered by the Bank to be difficult to collect or uncollectible for
any reason, all as determined by the Bank in its sole and reasonable discretion,
which determination shall be final and binding upon the Borrowers.
Non-Competition Agreements. The non-competition agreements, consulting
agreements and cooperation agreements from time to time entered into between any
one or more of the Borrowers and various owners of businesses acquired by any of
the Borrowers.
Notes. Collectively, the Revolving Note, the Acquisition Facility Note and
the Term Note.
Obligations. Any and all obligations of the Credit Parties to the Bank of
every kind and description, direct or indirect, absolute or contingent, primary
or secondary, due or to become due, now existing or hereafter arising,
regardless of how they arise or by what agreement or instrument, if any, and
including obligations to perform acts and refrain from taking action as well as
obligations to pay money.
PBGC. The Pension Benefit Guaranty Corporation or any entity succeeding to
any or all of its functions under ERISA.
Permitted Encumbrances. See Section 6.5.
Person. Any natural person, corporation, limited liability company, trust,
joint venture, association, company, partnership, governmental authority or
other entity.
Plan. At any time, an employee pension or other benefit plan that is subject
to Title IV of ERISA or subject to the minimum funding standards under Section
412 of the Code and is either (i) maintained by one or more of the Credit
Parties or any of their Subsidiaries or any member of the Controlled Group for
employees of one or more of the Credit Parties or any of their Subsidiaries or
any member of the Controlled Group or (ii) if such Plan is established,
maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
one or more of the Credit Parties or any of their Subsidiaries or any member of
the Controlled Group is then making or accruing an obligation to make
contributions or has within the preceding five Plan years made contributions.
Pledged Escrow Proceeds. Specifically identifiable proceeds of Escrowed
Funds which represent Accounts, commissions, reimbursements or other payment
rights owing to the Borrowers.
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Qualified Investments. As applied to the Credit Parties and their
Subsidiaries, investments in (a) notes, bonds or other obligations of the United
States of America or any agency thereof that as to principal and interest
constitute direct obligations of or are guaranteed by the United States of
America, (b) certificates of deposit or other deposit instruments or accounts of
banks or trust companies organized under the laws of the United States or any
state thereof that have capital and surplus of at least $100,000,000, (c)
commercial paper that is rated not less than prime-one or A-1 or their
equivalents by Xxxxx'x Investors Service, Inc. or Standard & Poor's Corporation,
respectively, or their successors, and (d) any repurchase agreement secured by
any one or more of the foregoing.
Revolving Loan. A loan made to the Borrowers by the Bank pursuant to
subsection 2.1 of this Agreement, and "Revolving Loans" means all of such loans,
collectively.
Revolving Loan Commitment. The commitment of the Bank to make Revolving
Loans to the Borrowers in an aggregate amount not to exceed the Revolving Loan
Commitment Amount.
Revolving Loan Commitment Amount. Five Million Dollars ($5,000,000) or any
lesser amount, including zero, resulting from the termination or reduction of
such amount in accordance with Sections 2.6 or 8.2 of this Agreement.
Revolving Loan Commitment Period. The period beginning on the date of this
Agreement and extending through and including the Revolving Loan Termination
Date or such earlier date on which the Revolving Loan Commitment of the Bank is
terminated or the Revolving Loan Commitment Amount is reduced to zero in
accordance with the terms hereof.
Revolving Loan Termination Date. April 30, 2001.
Revolving Note. A promissory note of the Borrowers, substantially in the
form of Exhibit A-1 hereto, evidencing the obligations of the Borrowers to the
Bank to repay the Revolving Loans.
Subordinated Indebtedness. Indebtedness of any of the Credit Parties
consented to in writing by the Bank which by an agreement in form and substance
acceptable to the Bank (or by the terms of the instrument under which it is
outstanding and to which appropriate reference is made in the instrument
evidencing such Subordinated Indebtedness) is made subordinate and junior in
right of payment to the Loans and to the other Obligations of the Credit Parties
to the Bank hereunder.
Subsidiary. Any corporation, association, joint stock company, business
trust or other similar organization of which 50% or more of the ordinary voting
power for the election of a majority of the members of the board of directors or
other governing body of such entity is held or controlled by one or more of the
Credit Parties or by one or more of their Subsidiaries; or any other such
organization the management of which is directly or indirectly controlled by one
or more of the Credit Parties or by one or more of their Subsidiaries through
the exercise of voting power or otherwise; or any joint venture, whether
incorporated or not, in which one or more of the Credit Parties or one or more
of their Subsidiaries has a 50% ownership interest.
Term Loan. The loan made to the Borrowers by the Bank pursuant to Section
2.3 of this Agreement.
Term Loan Maturity Date. September 30, 2000.
Term Note. A promissory note of the Borrowers, substantially in the form of
Exhibit A-3 hereto, evidencing the obligations of the Borrowers to the Bank to
repay the Term Loan.
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Total Debt Service. For any period for which the amount thereof shall be
determined, the aggregate amount of scheduled principal and interest payments
made or required to be made by the Credit Parties-- and their Subsidiaries in
respect of Indebtedness (including payments in respect of capital lease
obligations) during such period (determined on a consolidated basis without
duplication in accordance with GAAP).
Section 1.2 Accounting Terms. All terms of an accounting character shall
have the meanings assigned thereto by generally accepted accounting principles
applied on a basis consistent with the financial statements referred to in
Section 4.6 of this Agreement, modified to the extent, but only to the extent,
that such meanings are specifically modified herein ("GAAP").
Section 1.3 Multiple Borrowers. The term "Borrowers" refers to more than one
corporation. All references to "the Borrowers" are references to each and every
Borrower, and all representations and covenants of "the Borrowers" shall apply
to each and every Borrower, separately as well as jointly. Notwithstanding the
fact that the Loans are made to the Borrowers, the Guarantor is a party to this
Agreement and, as set forth in Article 9 hereof, has guaranteed all obligations
of the Borrowers to the Bank hereunder. The term "Obligations" refers to all
obligations of the Borrowers and the Guarantor hereunder, all of which
Obligations are joint and several obligations of the Guarantor and each and
every Borrower. Each of the Borrowers is a direct or indirect Subsidiary of the
Guarantor. Except as otherwise expressly set forth herein, all representations
and covenants of "the Credit Parties" shall apply and be applied to the
Guarantor and to each and every Borrower, severally and jointly, except that
financial representations and covenants herein that make reference to the
aggregate or consolidated results of the Guarantor and its Subsidiaries shall
apply and be applied to the Guarantor and its Subsidiaries on a consolidated
basis, determined in accordance with GAAP. Each of the Borrowers hereby
designates each of The XxXxxxx Company, Inc. and the Guarantor as its agent,
with full power and authority to act on its behalf and on behalf of all of the
Borrowers, including, without limitation, to request that Loans be made
hereunder, to request reductions in commitments, and to execute and deliver to
the Bank, on behalf of all of the Borrowers, any and all reports and other
certificates required to be delivered to the Bank hereunder. Notice when given
to any officer of The XxXxxxx Company, Inc. or to any officer of the Guarantor
shall be sufficient notice to the Guarantor and to all of the Borrowers. Any
document delivered to The XxXxxxx Company, Inc. or to the Guarantor shall be
considered delivered to the Guarantor and each of the Borrowers. Any Event of
Default by the Guarantor or any of the Borrowers shall be deemed to be an Event
of Default by all of the Borrowers.
ARTICLE 2 DESCRIPTION OF CREDIT
Section 2.1 The Revolving Loans.
(a) Upon the terms and subject to the conditions of this Agreement, and in
reliance upon the representations, warranties and covenants of the Credit
Parties made herein, the Bank agrees to make Revolving Loans to the Borrowers at
the Borrowers' request from time to time, from and after the Closing Date and
prior to the Revolving Loan Termination Date, provided that the principal amount
of Revolving Loans outstanding at any time shall not exceed the lesser of (i)
the Revolving Loan Commitment Amount and (ii) the Borrowing Base at such time
less the outstanding principal balance of the Term Loan at such time, and
provided, further, that at the time the Borrowers request a Revolving Loan and
after giving effect to the making thereof there has not occurred and is not
continuing any Event of Default or Default. Within the foregoing limits and
subject to the terms and conditions set forth herein, the Borrowers may borrow,
prepay and reborrow Revolving Loans. The commitment of the Bank to make
Revolving Loans to the Borrowers shall expire on the Revolving Loan Termination
Date, unless earlier terminated in accordance with Sections 2.6 or 8.2 of this
Agreement.
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(b) Except as otherwise provided in any cash management or similar
agreements between the Borrowers and the Bank, to request a Revolving Loan the
Borrowers shall notify the Bank by telephone (i) in the case of a LIBOR Loan,
not later than 11:00 a.m., Boston, Massachusetts time, two (2) Business Days
before the date of the proposed Loan or (ii) in the case of a Base Rate
Revolving Loan not later than 2:00 p.m., Boston, Massachusetts time, on the date
of the proposed Loan. Except as otherwise provided in any cash management or
similar agreements between the Borrowers and the Bank, each such telephonic loan
request shall be irrevocable and shall be confirmed promptly by hand delivery or
telephonic facsimile to the Bank of a written Notice of Borrowing in
substantially the form of Exhibit B hereto (a "Notice of Borrowing") executed by
the Borrowers.
(c) Each such telephonic loan request and each Notice of Borrowing shall
specify the following information in compliance with this Section 2.1:
(i) the aggregate amount of such Revolving Loan;
(ii) (the date of such Revolving Loan, which shall be a Business Day;
(iii) whether such Revolving Loan is to be a Base Rate Revolving Loan
or a LIBOR Loan; and
(iv) in the case of a LIBOR Loan, the initial LIBOR Period to be
applicable thereto.
If no election as to the type of Revolving Loan is specified, then the
requested Revolving Loan shall be a Base Rate Revolving Loan. If no
LIBOR Period is specified with respect to any requested LIBOR Loan, then
the Borrowers shall be deemed to have selected a LIBOR Period of one
month's duration.
(d) At the commencement of each LIBOR Period for each LIBOR Loan, such LIBOR
Loan shall be in an aggregate amount at least equal to $500,000 or any greater
multiple of $100,000. At the time that each Base Rate Revolving Loan is made,
such Loan shall be in an aggregate amount that is at least equal to $100,000 or
any greater multiple of $100,000; provided that a Base Rate Revolving Loan may
be in an aggregate amount that is equal to the entire unused balance of the
Revolving Loan Commitment. LIBOR Loans and Base Rate Revolving Loans may be
outstanding at the same time; provided that there shall not at any time be more
than a total of four (4) LIBOR Loans outstanding.
(e) If the Borrowers shall request any LIBOR Loan, the Bank at its option
may make such LIBOR Loan by causing any domestic or foreign branch or Affiliate
of the Bank to make such LIBOR Loan; provided that any exercise of such option
shall not affect the obligation of the Borrowers to repay such LIBOR Loan in
accordance with the terms of this Agreement.
Section 2.2 The Acquisition Facility Loans.
(a) Upon the terms and subject to the conditions of this Agreement, and in
reliance upon the representations, warranties and covenants of the Credit
Parties made herein, the Bank agrees to make Acquisition Facility Loans to the
Borrowers at the Borrowers' request from time to time, from and after the
Closing Date and prior to the Acquisition Facility Conversion Date, provided
that the principal amount of Acquisition Facility Loans outstanding at any time
shall not exceed the Acquisition Facility Commitment Amount, and provided,
further, that at the time the Borrowers request a Acquisition Facility Loan and
after giving effect to the making thereof there has not occurred and is not
continuing any Event of Default or Default. Within the foregoing limits and
subject to the terms and conditions set forth herein, the Borrowers may borrow,
prepay and reborrow Acquisition Facility Loans. The commitment of the Bank to
make Acquisition Facility Loans to the Borrowers shall expire on the Acquisition
Facility Conversion Date, unless
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earlier terminated in accordance with Sections 2.6 or 8.2 of this Agreement. On
the Acquisition Facility Conversion Date, the aggregate outstanding principal
amount of the Acquisition Facility Loans shall be automatically converted into a
five year term loan bearing interest at the rate provided in Section 2.7 and
payable in such principal installments as provided in Sections 2.9 and 2.10.
(b) Except as otherwise provided in any cash management or similar
agreements between the Borrowers and the Bank, to request an Acquisition
Facility Loan, the Borrowers shall notify the Bank of such request by telephone
no later than 11:00 a.m., Boston, Massachusetts time, two (2) Business Days
before the date of the proposed Acquisition facility Loan. Except as otherwise
provided in any cash management or similar agreements between the Borrowers and
the Bank, each such telephonic loan request shall be irrevocable and shall be
confirmed promptly by hand delivery or telephonic facsimile to the Bank of a
Notice of Borrowing executed by the Borrowers.
(c) At the time that each Acquisition Facility Loan is made, such Loan shall
be in an aggregate amount that is at least equal to $100,000 or any greater
multiple of $100,000.
(d) Each such telephonic loan request and each Notice of Borrowing shall
specify the following information in compliance with this Section 2.2:
(i) the aggregate amount of such Acquisition Facility Loan; and
(ii) the date of such Acquisition Facility Loan, which shall be a
Business Day.
Section 2.3 The Term Loan. Upon the terms and subject to the conditions of
this Agreement, and in reliance upon the representations, warranties and
covenants of the Credit Parties made herein, the Bank agrees to make a Term Loan
to the Borrowers in the amount of $725,000. The Term Loan shall be funded in a
single advance on the Closing Date. Any portion of the Term Loan not advanced on
the Closing Date for any reason shall cease to be available and the Bank and the
Borrowers shall amend the Term Note and this Agreement, as necessary, to reflect
such reduction in the principal amount.
Section 2.4 Funding of Loans; Loan Account.
(a) Unless the Borrowers shall otherwise authorize and direct the Bank in
writing, the Bank shall make each Loan to be made by it hereunder available to
the Borrowers by promptly crediting the amount of such Loan to an account of the
Borrowers maintained with the Bank at its head office at 000 Xxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx, on the date requested by the Borrowers provided that
Borrowers have made such request in accordance with the provisions of this
Article 2.
(b) The Bank shall enter the Loans as debits in the Loan Account. The Bank
shall also record in the Loan Account all payments made by the Borrowers on
account of the Loans, and may also record therein, in accordance with customary
accounting practices, other debits and credits, including customary banking
charges and all interest, fees, charges and expenses chargeable to the Borrowers
under this Agreement. The debit balance of the Loan Account shall reflect the
amount of the Borrowers' Obligations to the Bank from time to time by reason of
Loans and other appropriate charges hereunder. Periodically, the Bank shall
render a statement of account showing as of its date the debit balance of the
Loan Account which, unless within thirty (30) days of such date notice to the
contrary is received by the Bank from the Borrowers, shall be considered correct
and accepted by the Borrowers and conclusively binding upon them, in the absence
of manifest error by the Bank.
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Section 2.5 The Notes.
(a) The Revolving Loans shall be evidenced by a Revolving Note in
substantially the form of Exhibit A-1 hereto, payable to the order of the Bank,
with a face principal amount equal to the Revolving Loan Commitment Amount, and
having a final maturity on the Revolving Loan Termination Date.
(b) The Acquisition Facility Loans shall be evidenced by an Acquisition
Facility Note in substantially the form of Exhibit A-2 hereto, payable to the
order of the Bank, with a face principal amount equal to the Acquisition
Facility Commitment Amount, and having a final maturity on the Acquisition
Facility Maturity Date.
(c) The Term Loan shall be evidenced by the Term Note in substantially the
form of Exhibit A-3 hereto, payable to the order of the Bank, with a face
principal amount equal to the Term Loan Commitment Amount, and having a final
maturity on the Term Loan Maturity Date.
(d) The Bank shall, and is hereby irrevocably authorized by the Borrowers
to, enter in its records appropriate notations evidencing the date and the
amount of each Loan, the interest rate applicable thereto and the date and
amount of each payment of principal made by the Borrowers with respect thereto;
and in the absence of manifest error, such notations shall constitute conclusive
evidence thereof. No failure on the part of the Bank to make any notation as
provided in this subsection (d) shall in any way affect any Loan or the rights
of the Bank or the obligations of the Borrowers with respect thereto.
Section 2.6 Reduction of Commitment Amounts.
(a) The Borrowers may from time to time by written notice delivered to the
Bank at least five (5) Business Days prior to the date of the requested
reduction, reduce by integral multiples of One Hundred Thousand Dollars
($100,000) any unborrowed portion of the Revolving Loan Commitment Amount. No
reduction of the Revolving Loan Commitment Amount shall be subject to
reinstatement.
(b) The Borrowers may from time to time by written notice delivered to the
Bank at least five (5) Business Days prior to the date of the requested
reduction, reduce by integral multiples of One Hundred Thousand Dollars
($100,000) any unborrowed portion of the Acquisition Facility Commitment Amount.
No reduction of the Acquisition Facility Commitment Amount shall be subject to
reinstatement.
Section 2.7 Interest.
(a) At the Borrowers' option, as specified in each Notice of Borrowing with
respect to a Revolving Loan, and subject to all of the other terms and
provisions of this Agreement, each Revolving Loan shall bear interest on the
outstanding principal amount thereof at a rate per annum equal to either (i) the
Base Rate, or (ii) the LIBOR Rate plus two and one-quarter percent (2.25%).
(b) Prior to the Acquisition Facility Conversion Date, each Acquisition Loan
shall bear interest on the outstanding principal amount thereof at a rate per
annum equal to the Base Rate plus one-quarter of one percent (0.25%).
(c) At the Borrowers' option, as designated in accordance with this
subsection 2.7(c), from and after the Acquisition Facility Conversion Date, the
outstanding principal amount of the Acquisition Facility Loans shall bear
interest at a rate per annum equal to either (i) the Base Rate plus one percent
(1.00%), or (ii) the Applicable Fixed Rate. The Borrowers shall have the one
time right on the Business Day immediately preceding the Acquisition Facility
Conversion Date to select which of the two foregoing interest rates shall apply
to the outstanding balance of the
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Acquisition Facility Loans for the remaining term of the Acquisition Facility
Loans. The Borrowers shall effect such interest rate selection by delivering to
the Bank on the Business Day immediately preceding the Acquisition Facility
Conversion Date a written notice specifying the The Borrowers' interest
selection pursuant to this subsection 2.7(c). In the event the Borrowers fail to
deliver such notice to the Bank on such date, the Borrowers shall be deemed to
have selected the rate of interest specified in clause (i) of this subsection
2.7(c).
(d) The Term Loan shall bear interest on the outstanding principal amount
thereof at a rate per annum equal to the Base Rate plus one quarter of one
percent (0.25%), which rate shall change contemporaneously with any change in
the Base Rate.
(e) Interest for all Loans shall be determined on the basis of the actual
number of days elapsed over a 360-day year. The applicable rate of interest for
all Base Rate Loans shall change contemporaneously with any change in the Base
Rate.
(f) Interest on all Base Rate Loans shall be due and payable monthly in
arrears on the last day of each month, commencing May 31, 1998. Interest on each
LIBOR Loan shall be payable on the expiration date of each LIBOR Period (and in
the case of any LIBOR Loan with a LIBOR Period of more than three months'
duration, on the 90th day after the extension of such LIBOR Loan and on the
expiration date of such LIBOR Period).
Section 2.8 Fees.
(a) The Borrowers shall pay to the Bank during the Revolving Loan Commitment
Period a commitment fee equal to one quarter of one percent (0.25%) per annum
(computed on the basis of the actual number of days elapsed over a 360-day year)
on the average daily amount of the unborrowed portion of the Revolving Loan
Commitment, payable monthly in arrears on the last day of each month, commencing
May 31, 1998.
(b) The Borrowers shall pay to the Bank during the Acquisition Facility
Commitment Period a commitment fee equal to one quarter of one percent (0.25%)
per annum (computed on the basis of the actual number of days elapsed over a
360-day year) on the average daily amount of the unborrowed portion of the
Acquisition Facility Commitment, payable monthly in arrears on the last day of
each month, commencing May 31, 1998.
(c) The Borrowers shall pay to the Bank on the Closing Date a one-time
facility set-up fee in an amount equal to $50,000. No portion of such fee shall
be subject to refund or reduction.
Section 2.9 Repayment of the Loans.
(a) The Borrowers hereby unconditionally promise to pay to the Bank the then
unpaid principal amount of the Revolving Loans on the Revolving Loan Termination
Date. In addition, if following any reduction in the Revolving Loan Commitment
Amount or at any other time the aggregate principal amount of the Revolving
Loans shall exceed the lesser of (i) the Revolving Loan Commitment Amount or
(ii) the Borrowing Base at such time less the outstanding principal balance of
the Term Loan at such time, the Borrowers shall immediately repay Revolving
Loans in an aggregate amount equal to such excess.
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(b) The Borrowers hereby unconditionally promise to pay to the Bank the
aggregate principal amount of the Acquisition Facility Loans outstanding on the
Acquisition Facility Conversion Date in sixty (60) installments as follows: (i)
fifty-nine (59) consecutive equal monthly principal installments each equal in
amount to (A) the outstanding principal balance of the Acquisition Facility
Loans outstanding on the Acquisition Facility Conversion Date, divided by (B)
sixty (60) shall be due and payable on the last day of each month commencing on
the last day of the first month following the Acquisition Facility Conversion
Date, and (ii) one (1) final principal installment shall be due and payable on
the Acquisition Facility Maturity Date in an amount equal to the then unpaid
principal amount of all Acquisition Facility Loans. In addition, if following
any reduction in the Acquisition Facility Commitment Amount or at any other time
prior to the Acquisition Facility Conversion Date the principal amount of the
outstanding Acquisition Facility Loans shall exceed the Acquisition Facility
Commitment Amount, the Borrowers shall immediately repay Acquisition Facility
Loans in an aggregate amount equal to such excess.
(c) The Borrowers hereby unconditionally promise to pay to the Bank the
principal amount of the Term Loan in twenty-nine (29) installments as follows:
(i) twenty-eight (28) consecutive equal monthly principal installments of
$25,000 shall be due and payable on the last day of each month commencing on May
31, 1998, and (ii) one (1) final principal installment shall be due and payable
on the Term Loan Maturity Date in an amount equal to the then unpaid principal
amount of the Term Loan.
Section 2.10 Prepayment of the Loans.
(a) The Borrowers shall have the right at any time and from time to time to
prepay the Revolving Loans in whole or in part, without premium or penalty,
except that the Borrowers shall be required to compensate the Bank for any
losses associated with any early termination of a LIBOR Loan as provided in
Section 2.15.
(b) The Borrowers shall have the right at any time and from time to time
prior to the Acquisition Facility Conversion Date to prepay the Acquisition
Facility Loans in whole or in part, without premium or penalty.
(c) If, pursuant to subsection 2.7(c), the Borrowers shall have selected an
interest rate with respect to the Acquisition Facility Loans determined by
reference to the Base Rate, the Borrowers shall have the right at any time and
from time to time after the Acquisition Facility Conversion Date to prepay the
Acquisition Facility Loans in whole or in part, without premium or penalty.
(d) If, pursuant to subsection 2.7(c), the Borrowers shall have selected an
interest rate with respect to the Acquisition Facility Loans determined by
reference to the Applicable Fixed Rate, the Borrowers shall have the right at
any time and from time to time after the Acquisition Facility Conversion Date to
prepay the Acquisition Facility Loans in whole or in part without penalty but
subject to the requirement that the Borrowers pay to the Bank a make whole
premium equal to the positive difference (if any) between (A) the present value
of all scheduled payments of principal and interest in respect of the portion of
the Acquisition Facility Loans which are the subject of such prepayment, which,
but for the prepayment, would be required to be made by the Borrowers following
the date of such prepayment, and (B) the present value of a United States
Treasury obligation with a principal balance equal to the principal balance of
the portion of the Acquisition Facility Loans which are the subject of such
prepayment as of the date of such prepayment and having a term and amortization
schedule substantially similar to the term and amortization schedule of the
Acquisition Facility Loans as of the date of such prepayment.
(e) The Borrowers shall have the right at any time and from time to time to
prepay the Term Loan in whole or in part, without premium or penalty.
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(f) The Borrowers shall be required to make the following mandatory
prepayments with respect to the Term Loan and the Acquisition Facility Loans:
(i) Within thirty (30) days following the receipt by the Credit Parties
of the proceeds of any insurance, condemnation award or other
compensation in respect of any Casualty Event affecting any property of
the Credit Parties, the Borrowers shall make a prepayment in an
aggregate amount equal to 100% (or such lesser amount as the Bank in its
sole discretion shall determine) of the net cash proceeds from such
Casualty Event received by the Credit Parties, provided that such
prepayment shall be required only if and to the extent that the
aggregate amount of net cash proceeds received by the Credit Parties on
account of all such Casualty Events during any fiscal year exceeds
$200,000.
(ii) Without limiting the obligation of the Credit Parties to obtain the
consent of the Bank prior to any incurrence of Indebtedness or sale of
equity securities not otherwise permitted hereunder, the Borrowers
agree, on or prior to the closing of any incurrence of Indebtedness
(other than Indebtedness permitted under Section 6.1) or sale of equity
securities (other than the issuance of stock, options or warrants to
employees in accordance with employee benefit plans of the Guarantor) by
any of the Credit Parties to deliver to the Bank a statement certified
by the Chief Financial Officer of the Guarantor, in form and detail
reasonably satisfactory to the Bank, of the estimated amount of net cash
proceeds of such incurrence of Indebtedness or sale of equity securities
that will be received by the Credit Parties, and the Borrowers shall
make a prepayment within ten (10) days of the date of receipt by the
Credit Parties of such net cash proceeds, in an aggregate amount equal
to (A) 100% (or such lesser amount as the Bank in its sole discretion
shall determine) of such net cash proceeds from any such incurrence of
Indebtedness received by the Credit Parties, and (B) 50% (or such lesser
amount as the Bank in its sole discretion shall determine) of such net
cash proceeds from any such sale of equity securities received by the
Credit Parties.
(iii) Without limiting the obligation of the Credit Parties to obtain
the consent of the Bank with respect to any Disposition not otherwise
permitted hereunder, the Borrowers agree, on or prior to the occurrence
of any Disposition by the Borrowers, to deliver to the Bank a statement
certified by the Chief Financial Officer of the Borrower, in form and
detail reasonably satisfactory to the Bank, of the estimated amount of
the net cash proceeds of such Disposition that will be received by the
Credit Parties, and the Borrowers shall make a prepayment within ten
(10) days of the date of receipt by the Credit Parties of such net cash
proceeds, in an aggregate amount equal to 100% (or such lesser amount as
the Bank in its sole discretion shall determine) of such net cash
proceeds received by the Credit Parties, provided that such prepayment
shall be required only if and to the extent that the aggregate amount of
net cash proceeds received by the Credit Parties on account of all
Dispositions during any fiscal year exceed $300,000.
(g) In the event of any optional prepayment pursuant to subsections (b),
(c), (d) or (e) of this Section 2.10, or any mandatory prepayment pursuant to
subsection (f) of this Section 2.10, such prepayment shall be allocated first
against the outstanding balance of the Term Loan and then against the
outstanding balance of the Acquisition Facility Loans, in each case, in the
inverse order of maturity.
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(h) The Borrowers shall notify the Bank by telephone (confirmed by telecopy)
of any prepayment hereunder (i) in the case of prepayment of a LIBOR Loan, not
later than 11:00 a.m., Boston, Massachusetts time, three Business Days before
the date of prepayment or (ii) in the case of prepayment of a Base Rate Loan,
not later than 2:00 p.m., Boston, Massachusetts time, one Business Day before
the date of prepayment. Each such notice shall be irrevocable and shall specify
the prepayment date and the principal amount of each Loan or portion thereof to
be prepaid.
(i) All prepayments of Loans shall be accompanied by payment of accrued
interest in respect of such prepaid Loans through the date of such prepayment.
Each optional prepayment of Loans pursuant to subsections (b), (c) or (e) of
this Section 2.10 shall be in an amount of not less than $100,000; each optional
prepayment of Loans pursuant to subsection (d) of this Section 2.10 shall be in
an amount of not less than $1,000,000.
Section 2.11 Manner and Time of Payments. The Borrowers authorize the Bank
to charge to the Loan Account or, if funds in the Loan Account are insufficient
to satisfy charges authorized hereunder, to any deposit account which the
Borrowers may maintain with the Bank, the principal, interest, fees, charges,
taxes and expenses provided for in this Agreement or any other document executed
or delivered in connection herewith, provided that the Bank shall not be
authorized hereunder to charge against any Escrowed Funds (other than Pledged
Escrow Proceeds) for any purpose. If any payment required to be made by the
Credit Parties to the Bank pursuant to this Agreement becomes due on a day that
is not a Business Day such payment may be made on the next succeeding Business
Day, and such extension shall be included in computing interest in connection
with such payment
Section 2.12 Overdue Payments.
(a) Overdue principal (whether at maturity, by reason of acceleration or
otherwise) and, to the extent permitted by applicable law, overdue interest and
fees or any other amounts payable hereunder or under the Notes shall bear
interest from and including the due date thereof until paid, at a rate per annum
equal to the Base Rate plus four percent (4.0%), which interest shall be
compounded daily and payable on demand.
(b) If a payment of principal or interest hereunder is not made within 10
days of its due date, the Borrowers shall also pay to the Bank on demand a late
payment charge equal to five percent (5%) of the amount of such payment.
(c) Nothing in the preceding subsections 2.12(a) and 2.12(b) shall affect
the Bank's right to exercise any of its rights or remedies, including those
provided in Section 8.2, if an Event of Default has occurred.
Section 2.13 Use of Proceeds.
(a) The Borrowers shall use the proceeds of the Revolving Loans exclusively
(i) to repay the outstanding revolving credit loans owing from the Borrowers to
the Bank under the Amended Credit Agreement, and (ii) for general working
capital purposes.
(b) The Borrowers shall use the proceeds of the Acquisition Facility Loans
exclusively (i) to repay the line of credit loan owing from the Borrowers to the
Bank under the Amended Credit Agreement, and (ii) to finance Acquisitions
permitted under Section 6.8 of this Agreement.
(c) The Borrowers shall use the proceeds of the Term Loan exclusively to
repay the outstanding term loan owing from the Borrowers to the Bank under the
Amended Credit Agreement.
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(d) The Borrowers shall not, and shall not permit any Subsidiary to,
directly or indirectly, use any part of the proceeds of the Loans (i) for the
purpose of making any payment which is prohibited by this Agreement, (ii) for
the purpose of purchasing or carrying any margin stock within the meaning of
Regulation U (12 CFR Part 221) of the Board of Governors of the Federal Reserve
System, or (iii) for any purpose that would violate any provision of any
applicable statute, regulation, order or restriction.
Section 2.14 Conditions for Basing Interest on the LIBOR Rate. Upon the
condition that:
(a) The Bank shall have received a request for a LIBOR Loan from the
Borrowers as provided in subsection 2.1;
(b) There shall have occurred no change in applicable law which would make
it unlawful for the Bank to obtain deposits of U.S. dollars in the London
interbank foreign currency deposits market;
(c) As of the date of the request for each LIBOR Loan and the first day of
the applicable LIBOR Period, there shall exist no Default or Event of Default,
which has not been waived by the Bank;
(d) The Bank shall not have determined in good faith that it is unable to
determine the LIBOR Rate in respect of the requested LIBOR Loan; and
(e) As of the first date of the LIBOR Period specified in such request for a
LIBOR Loan, and after having given effect thereto, there shall be no more than
an aggregate of four (4) LIBOR Loans outstanding;
then the Revolving Loan requested by the Borrowers shall, during the applicable
LIBOR Period requested, bear interest at the rate determined by reference to the
LIBOR Rate.
Section 2.15 Break Funding Payments.
(a) In the event of (i) the payment of any principal of any LIBOR Loan other
than on the last day of the LIBOR Period applicable thereto (including as a
result of an Event of Default), (ii) the conversion of any LIBOR Loan other than
on the last day of the LIBOR Period applicable thereto or (iii) the failure to
borrow, convert, continue or prepay any LIBOR Loan on the date specified in any
notice delivered pursuant hereto (regardless of whether such notice is permitted
to be revocable and is revoked in accordance herewith) then, in any such event,
the Borrowers shall compensate the Bank for the loss, cost and expense, if any,
attributable to such event.
(b) The loss to the Bank attributable to any event described in subsection
2.15(a) shall be deemed to include an amount determined by the Bank to be equal
to the excess, if any, of
(i) the amount of interest that the Bank would pay for a deposit equal
to the principal amount of such LIBOR Loan for the period from the date
of such payment, conversion or failure to the last day of the then
current LIBOR Period for such Loan (or, in the case of a failure to
borrow, convert or continue, the duration of the LIBOR Period that would
have resulted from such borrowing, conversion or continuation) if the
interest rate payable on such deposit were equal to the LIBOR Rate for
such LIBOR Period,
over
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(ii) the amount of interest that the Bank would earn on such principal
amount for such period if the Bank were to invest such principal amount
for such period at the interest rate that would be bid by the Bank (or
an affiliate of the Bank) for U.S. dollar deposits from other banks in
the London interbank market at the commencement of such period.
(c) A certificate of the Bank setting forth any amount or amounts that the
Bank is entitled to receive pursuant to this subsection 2.15 shall be delivered
to the Borrowers and shall be conclusive absent manifest error. The Borrowers
shall pay the Bank the amount shown as due on any such certificate within ten
(10) days after receipt thereof.
Section 2.16 Change in Applicable Laws, Regulations, etc. If any statute,
rule, regulation or order applicable to the Bank shall make it unlawful for the
Bank to fund through the purchase of U.S. dollar deposits any LIBOR Loan, or
otherwise to give effect to its obligations as contemplated hereby, or shall
impose on the Bank any costs based on or measured by the excess above a
specified level of the amount of a category of deposits or other liabilities of
the Bank, which includes deposits by reference to which the LIBOR Rate is
determined as provided herein or a category of extensions of credit or other
assets of the Bank which includes any LIBOR Loans, or shall impose on the Bank
any restrictions on the amount of such a category of liabilities or assets which
the Bank may hold, (a) the Bank may by notice thereof to the Borrowers terminate
the Borrowers' option to have interest on any Loan based on the LIBOR Rate, (b)
any LIBOR Loans subject thereto shall immediately bear interest thereafter at a
rate determined by reference to the Base Rate; and (c) the Borrowers shall
indemnify the Bank against any loss, penalty or expense incurred by the Bank by
reason of the liquidation or redeployment of deposits or other funds acquired by
the Bank to fund or maintain such LIBOR Loans.
Section 2.17 Taxes.
(a) Except to the extent required by applicable law, any and all payments by
or on account of any obligation of the Borrowers hereunder shall be made free
and clear of and without deduction for any taxes, other than income, net worth
or franchise taxes imposed on (or measured by) the Bank's net income or net
worth by the United States of America, or any state or local jurisdiction within
the United States of America ("Excluded Taxes"); provided that if the Borrowers
shall be required to deduct any taxes (other than Excluded Taxes) from any such
payments, then (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 2.17) the Bank receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the Borrowers
shall make such deductions and (iii) the Borrowers shall pay the full amount
deducted to the relevant governmental authority in accordance with applicable
law.
(b) In addition, the Borrowers shall pay any and all present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement, the Notes and
any other documents or agreement executed in connection with any of them, to the
relevant governmental authority in accordance with applicable law.
(c) The Borrowers shall indemnify the Bank, within ten (10) days after
written demand therefor, for the full amount of any and all taxes (other than
Excluded Taxes) imposed or asserted on or attributable to amounts payable under
this Agreement paid by the Bank (and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto during the period prior to
the Borrowers making the payment demanded under this paragraph (c)), whether or
not such taxes were correctly or legally
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imposed or asserted by the relevant governmental authority. A certificate as to
the amount of such payment or liability delivered to the Borrowers by the Bank
shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of taxes by the Borrowers to a
governmental authority in accordance with this Section 2.17, the Borrowers shall
deliver to the Bank the original or a certified copy of a receipt issued by such
governmental authority evidencing such payment, a copy of the return reporting
such payment or other evidence of such payment reasonably satisfactory to the
Bank.
Section 2.18 Capital Requirements. If after the date hereof the Bank
determines that (a) the adoption of or change in any law, rule, regulation or
guideline regarding capital requirements for banks or bank holding companies, or
any change in the interpretation or application thereof by any governmental
authority charged with the administration thereof, or (b) compliance by the Bank
or its parent bank holding company with any guideline, request or directive of
any such governmental authority regarding capital adequacy (whether or not
having the force of law), has the effect of reducing the return on the Bank's or
such holding company's capital as a consequence of the Bank's commitment to make
Loans hereunder to a level below that which the Bank or such holding company
could have achieved but for such adoption, change or compliance by any amount
deemed by the Bank to be material, then the Bank shall notify the Borrowers
thereof. The Borrowers agree to pay to the Bank the amount of such reduction of
capital as and when such reduction is determined, upon presentation by the Bank
of a statement in the amount and setting forth the Bank's calculation thereof,
which statement shall be deemed true and correct absent manifest error. In
determining such amount, the Bank may use any reasonable averaging and
attribution methods.
ARTICLE 3 CONDITIONS OF LOANS
Section 3.1 Conditions Precedent to Initial Loans. The obligations of the
Bank to make the Term Loan, the initial Revolving Loan and the initial
Acquisition Facility Loan are subject to the condition precedent that the Bank
shall have received, in form and substance satisfactory to the Bank and its
counsel, the following:
(a) this Agreement duly executed by the Credit Parties and the Notes duly
executed by the Borrowers;
(b) a certificate of the Clerk or Secretary of each of the Credit Parties
with respect to resolutions of the Board of Directors authorizing the execution
and delivery of this Agreement (with respect to all of the Credit Parties) and
the Notes (with respect to the Borrowers) and identifying the officer(s)
authorized to execute, deliver and take all other actions required under this
Agreement, and providing specimen signatures of such officers;
(c) the charter documents of each of the Credit Parties and all amendments
and supplements thereto, filed in the office of the Secretary of State of the
jurisdiction of incorporation of each Credit Party, each certified by said
Secretary of State as being a true and correct copy thereof;
(d) the Bylaws of each of the Credit Parties and all amendments and
supplements thereto, certified by the Clerk or Secretary of such Credit Party as
being a true and correct copy thereof;
(e) a certificate of the Secretary of State of the jurisdiction of
incorporation of each Credit Party, as to such Credit Party's legal existence
and good standing in such jurisdiction and listing all documents on file in the
office of said Secretary of State for each Credit Party;
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(f) payment to the Bank of the facility set-up fee pursuant to subsection
2.8(c) and all other fees, costs and expenses of the Bank required to be paid by
the Borrowers on or before the Closing Date (including, without limitation, the
reasonable fees of the Bank's counsel);
(g) an opinion addressed to the Bank from Xxxxxx X. XxXxxxxx, General
Counsel to the Credit Parties, in form and substance satisfactory to the Bank
and its counsel;
(h) an opinion addressed to the Bank from local Connecticut counsel to the
Credit Parties, in form and substance satisfactory to the Bank and its counsel;
and
(i) such other documents, and completion of such other matters, as counsel
for the Bank may deem necessary or appropriate.
Section 3.2 Conditions Precedent to all Loans. The obligation of the Bank to
make each Loan, including the Term Loan, the initial Revolving Loan and the
initial Acquisition Facility Loan, is further subject to the following
conditions:
(a) the representations and warranties contained in Article 4 shall be true
and accurate in all material respects on and as of the date of such Loan making
as though made at and as of each such date (except to the extent that such
representations and warranties expressly relate to an earlier date), and no
Default or Event of Default shall have occurred and be continuing, or would
occur after giving effect to the making of such Loan;
(b) the resolutions referred to in Section 3.1(b) shall remain in full force
and effect; and
(c) no change shall have occurred in any law or regulation or interpretation
thereof that, in the opinion of counsel for the Bank, would make it illegal or
against the policy of any governmental agency or authority for the Bank to make
Loans hereunder.
The making of each Loan shall be deemed to be a representation and warranty
by the Credit Parties on the date of the making, continuation or conversion of
such Loan as to the accuracy of the facts referred to in subsection 3.2(a).
ARTICLE 4 REPRESENTATIONS AND WARRANTIES
In order to induce the Bank to enter into this Agreement and to make Loans
hereunder, each of the Credit Parties represents and warrants to the Bank that:
Section 4.1 Organization and Qualification. Each of the Credit Parties (a)
is a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation, (b) has all requisite corporate power
to own its property and conduct its business as now conducted and as presently
contemplated and (c) is duly qualified and in good standing as a foreign
corporation and is duly authorized to do business in each jurisdiction where the
nature of its properties or business requires such qualification, all of which
foreign jurisdictions are listed on Schedule 4.1 attached hereto.
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Section 4.2 Corporate Authority. The execution, delivery and performance of
this Agreement, the Notes and the transactions contemplated hereby and thereby
are within the corporate power and authority of the Credit Parties and have been
authorized by all necessary corporate proceedings, and do not and will not (a)
require any consent or approval of the stockholders of any Credit Party, (b)
contravene any provision of the charter documents or by-laws of any Credit Party
or any law, rule or regulation applicable to any Credit Party, (c) contravene
any provision of, or constitute an event of default or event that, but for the
requirement that time elapse or notice be given, or both, would constitute an
event of default under, any other agreement, instrument, order or undertaking
binding on any Credit Party, or (d) result in or require the imposition of any
Encumbrance on any of the properties, assets or rights of any Credit Party
(other than Encumbrances in favor of the Bank).
Section 4.3 Valid Obligations. This Agreement, the Notes and the Amended and
Restated Affiliate Subordination Agreement of even date herewith between the
Credit Parties, XxXxxxx Mortgage and the Bank, and all of their respective terms
and provisions are the legal, valid and binding obligations of the Credit
Parties, enforceable in accordance with their respective terms except as limited
by bankruptcy, insolvency, reorganization, moratorium or other laws affecting
the enforcement of creditors' rights generally, and except as the remedy of
specific performance or of injunctive relief is subject to the discretion of the
court before which any proceeding therefor may be brought.
Section 4.4 Consents or Approvals. The execution, delivery and performance
of this Agreement and the Notes and the transactions contemplated therein do not
require any approval or consent of, or filing or registration with, any
governmental or other agency or authority, or any other party.
Section 4.5 Title to Properties; Absence of Encumbrances. Each of the Credit
Parties and each of their Subsidiaries has good and marketable title to all of
the properties, assets and rights of every name and nature now purported to be
owned by such Credit Party or such Subsidiary, including, without limitation,
such properties, assets and rights as are reflected in the financial statements
referred to in Section 4.6 (except such properties, assets or rights as have
been disposed of in the ordinary course of business since the date thereof),
free from all Encumbrances except Permitted Encumbrances or those Encumbrances
disclosed in Schedule 4.5 attached hereto, and, except as so disclosed, free
from all defects of title that might materially adversely affect such
properties, assets or rights, taken as a whole.
Section 4.6 Financial Statements. The Credit Parties have furnished to the
Bank their consolidated balance sheet as at December 31, 1997, and their
consolidated statements of income, changes in stockholders' equity and cash flow
for the fiscal year then ended, and related footnotes, audited and certified by
Ernst & Young. All such financial statements were prepared in accordance with
GAAP applied on a consistent basis throughout the periods specified and present
fairly the financial position of the Credit Parties and their Subsidiaries as of
such dates and the results of the operations of the Credit Parties and their
Subsidiaries for such periods. All financial projections provided to the Bank
were prepared in good faith and based on assumptions which were reasonable when
made. There are no liabilities, contingent or otherwise, not disclosed in such
financial statements that involve a material amount. Since the end of the most
recent fiscal period shown in such financial statements, there has not been any
material adverse change in the business, operations, properties or financial
positions of any of the Credit Parties.
Section 4.7 Changes. Since the date of the most recent financial statements
referred to in Section 4.6, there have been no changes in the assets,
liabilities, financial condition, businesses or prospects of any of the Credit
Parties other than changes in the ordinary course of business, the effect of
which has not, in the aggregate, been materially adverse.
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Section 4.8 Office and Collateral Locations. All business offices of the
Credit Parties and other locations where any of the Collateral is located or
where any books or records relating to any of the Collateral are maintained are
listed on Schedule 4.8 attached hereto.
Section 4.9 Taxes. The Credit Parties and their Subsidiaries have filed all
federal, state and other tax returns required to be filed, and all taxes,
assessments and other governmental charges due from the Credit Parties and their
Subsidiaries have been fully paid. The Credit Parties and their Subsidiaries
have established on their books reserves adequate for the payment of all
federal, state and other tax liabilities.
Section 4.10 Litigation. Except as set forth on Schedule 4.10 attached
hereto, there is no litigation, arbitration, proceeding or investigation
pending, or, to the knowledge of any Credit Party's officers, threatened,
against any of the Credit Parties or any of their Subsidiaries that, if
adversely determined, could result in a material judgment not fully covered by
insurance, could result in a forfeiture of all or any substantial part of the
property of any of the Credit Parties or any of their Subsidiaries, or could
otherwise have a material adverse effect on the assets, business or prospects of
any of the Credit Parties.
Section 4.11 Margin Stock. No portion of any Loan is to be used for the
"purpose of purchasing or carrying" any "margin stock" as such terms are used in
Regulations U and X of the Board of Governors of the Federal Reserve System, 12
C.F.R. 221 and 224, as amended; and following the application of the proceeds of
each Loan, the value of all "margin stock" of the Credit Parties will not exceed
25% of the value of the total assets of the Credit Parties.
Section 4.12 Subsidiaries. As of the date of this Agreement, all direct and
indirect Subsidiaries of the Guarantor are listed on Schedule 4.12 attached
hereto. The Guarantor or one or more of its Subsidiaries is the owner, free and
clear of all liens and encumbrances, of all of the issued and outstanding
capital stock of each Borrower. All shares of such stock have been validly
issued and are fully paid and nonassessable, and no rights to subscribe to any
additional shares have been granted, and no options, warrants or similar rights
are outstanding.
Section 4.13 Investment Company Act. None of the Credit Parties or any of
their Subsidiaries is subject to regulation under the Investment Company Act of
1940, as amended.
Section 4.14 Compliance with ERISA. The Credit Parties and all members of
the Controlled Group have fulfilled their obligations under the minimum funding
standards of ERISA and the Code with respect to each Plan and are in compliance
in all material respects with the applicable provisions of ERISA and the Code,
and have not incurred any liability to the PBGC or a Plan under Title IV of
ERISA; and no "prohibited transaction" or "reportable event" (as such terms are
defined in ERISA) has occurred with respect to any Plan.
Section 4.15 Environmental Matters.
(a) The Credit Parties and all of their Subsidiaries have obtained
all permits, licenses and other authorizations which are required
under all Environmental Laws, except to the extent failure to have any
such permit, license or authorization would not have a material
adverse effect on the business, financial condition or operations of
any of the Credit Parties. The Credit Parties and all of their
Subsidiaries are in compliance with the terms and conditions of all
such permits, licenses and authorizations, and are also in compliance
with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables
contained in any applicable Environmental Law or in any regulation,
code, plan, order, decree, judgment, injunction, notice or demand
letter issued, entered, promulgated or approved thereunder, except
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to the extent failure to comply would not have a material adverse
effect on the business, financial condition or operations of any of
the Credit Parties.
(b) No notice, notification, demand, request for information, citation,
summons or order has been issued, no complaint has been filed, no penalty has
been assessed and no investigation or review is pending or threatened by any
governmental or other entity with respect to any alleged failure by any of the
Credit Parties or any of their Subsidiaries to have any permit, license or
authorization required in connection with the conduct of its business or with
respect to any Environmental Laws, including, without limitation, Environmental
Laws relating to the generation, treatment, storage, recycling, transportation,
disposal or release of any Hazardous Materials, except to the extent that such
notice, complaint, penalty or investigation did not or could not result in the
remediation of any property owned or used by any of the Credit Parties or any of
their Subsidiaries costing in excess of Twenty-Five Thousand Dollars ($25,000)
per occurrence or Fifty Thousand Dollars ($50,000) in the aggregate as to all
the Credit Parties and their Subsidiaries.
(c) To the best of each Credit Party's knowledge no material oral or written
notification of a release of a Hazardous Material has been filed by or on behalf
of any of the Credit Parties or any of their Subsidiaries and no property now or
previously owned, leased or used by any of the Credit Parties or any of their
Subsidiaries is listed or proposed for listing on the National Priorities List
under the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended, or on any similar state list of sites requiring
investigation or clean-up.
(d) There are no liens or encumbrances arising under or pursuant to any
Environmental Laws on any of the real property or properties owned, leased or
used by any of the Credit Parties or any of their Subsidiaries and no
governmental actions have been taken or are in process which could subject any
of such properties to such liens or encumbrances or, as a result of which any of
the Credit Parties or any of their Subsidiaries would be required to place any
notice or restriction relating to the presence of Hazardous Materials at any
property owned by it in any deed to such property.
(e) None of the Credit Parties nor any of their Subsidiaries nor, to the
best knowledge of the Credit Parties, any previous owner, tenant, occupant or
user of any property owned, leased or used by any of the Credit Parties or any
of their Subsidiaries has (i) engaged in or permitted any operations or
activities upon or any use or occupancy of such property, or any portion
thereof, for the purpose of or in any way involving the handling, manufacture,
treatment, storage, use, generation, release, discharge, refining, dumping or
disposal (whether legal or illegal, accidental or intentional) of any Hazardous
Materials on, under, in or about such property, except to the extent commonly
used in day-to-day operations of such property and in such case only in
compliance with all Environmental Laws, or (ii) transported any Hazardous
Materials to, from or across such property except to the extent commonly used in
day-to-day operations of such property and, in such case, in compliance with,
all Environmental Laws; nor to the best knowledge of the Credit Parties have any
Hazardous Materials migrated from other properties upon, about or beneath such
property, nor, to the best knowledge of the Credit Parties, are any Hazardous
Materials presently constructed, deposited, stored or otherwise located on,
under, in or about such property except to the extent commonly used in
day-to-day operations of such property and, in such case, in compliance with,
all Environmental Laws.
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ARTICLE 5 AFFIRMATIVE COVENANTS
So long as the Bank has any commitment to lend hereunder or any Loan or
other Obligation remains outstanding, the Credit Parties covenant as follows:
Section 5.1 Financial Statements and other Reporting Requirements. The
Credit Parties shall furnish to the Bank:
(a) as soon as available to the Credit Parties, but in any event within 90
days after the end of each fiscal year of the Credit Parties, a consolidated
balance sheet of the Credit Parties and their Subsidiaries as of the end of, and
a related consolidated statement of income, changes in stockholders' equity and
cash flow for, such year, prepared in accordance with GAAP and audited and
certified by Ernst & Young (or other independent certified public accountants
acceptable to the Bank), and together with such consolidated financial
statements, separate financial statements setting forth the independent
financial results of XxXxxxx Mortgage, prepared in accordance with GAAP and
certified by the chief financial officer of the Guarantor; and, promptly upon
delivery by said certified public accountants, a copy of said certified public
accountants' management report;
(b) as soon as available to the Borrowers, but in any event within 45 days
after the end of each fiscal quarter the Credit Parties, a consolidated balance
sheet of the Credit Parties and their Subsidiaries as of the end of such fiscal
quarter, and a related consolidated statement of income for, the period then
ended, certified by the chief financial officer of the Guarantor, and prepared
in accordance with GAAP but subject, however, to normal, recurring year-end
adjustments that shall not in the aggregate be material in amount;
(c) concurrently with the delivery of each financial statement pursuant to
subsections 5.1.(a) and 5.1.(b), a report in substantially the form of Exhibit B
hereto signed on behalf of the Credit Parties by the chief financial officer of
the Guarantor;
(d) promptly after the receipt thereof by the Credit Parties, copies of any
reports submitted to the Credit Parties by their independent public accountants
in connection with any interim review of the accounts of the Credit Parties made
by such accountants;
(e) promptly after the same are available, copies of all proxy statements,
financial statements and reports (excluding reports in respect of the beneficial
ownership of officers, directors and certain other shareholders on Forms 3, 4
and 5, promulgated under the Securities Exchange Act of 1934, as amended) as the
Guarantor shall send to its stockholders or as the Guarantor or any of the
Credit Parties may file with the Securities and Exchange Commission or any
governmental authority at any time having jurisdiction over any of the Credit
Parties or any of their Subsidiaries;
(f) if and when any of the Credit Parties gives or is required to give
notice to the PBGC of any "Reportable Event" (as defined in Section 4043 of
ERISA) with respect to any Plan that might constitute grounds for a termination
of such Plan under Title IV of ERISA, or knows that any member of the Controlled
Group or the plan administrator of any Plan has given or is required to give
notice of any such Reportable Event, a copy of the notice of such Reportable
Event given or required to be given to the PBGC;
(g) immediately upon becoming aware of the existence of any condition or
event that constitutes a Default, written notice thereof specifying the nature
and duration thereof and the action being or proposed to be taken with respect
thereto;
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(h) promptly upon becoming aware of any litigation or of any investigative
proceedings by a governmental agency or authority commenced or threatened
against any of the Credit Parties or any of their Subsidiaries, the outcome of
which would or might have a materially adverse effect on the assets, business or
prospects of any of the Credit Parties, written notice thereof and the action
being or proposed to be taken with respect thereto;
(i) promptly upon becoming aware of any investigative proceedings by a
governmental agency or authority commenced or threatened against any of the
Credit Parties or any of their Subsidiaries regarding any potential violation of
Environmental Laws or any spill, release, discharge or disposal of any Hazardous
Material, written notice thereof and the action being or proposed to be taken
with respect thereto;
(j) as soon as available to the Borrowers, but in any event (i) within
fifteen (15) days after the end of the preceding month and (ii) on or prior to
the second business day of every second week with respect to new transactions
processed during the preceding two weeks, a report in the form appended hereto
as Exhibit C of the value of the Borrowing Base as of the end of such period;
(k) for the purposes of computing the Borrowing Base, information adequate
to identify Base Accounts at times and in form and substance as may be requested
by the Bank, and if requested by the Bank, accompanied by agings or assignments
of Accounts in form and substance satisfactory to the Bank, which assignments
shall give the Bank full power to collect, compromise or otherwise deal with the
assigned Accounts as the sole owner thereof. Without limiting the foregoing,
information as to Base Accounts, which shall be updated monthly (or weekly, at
the request of the Bank), the Borrowers shall notify the Bank immediately of the
occurrence of each of the following events: (i) any request by an account debtor
for credit or adjustment of Base Accounts which decrease the aggregate of Base
Accounts in a material amount; (ii) any adjustment by the Borrowers on any
material amount owing on the aggregate Base Accounts; or (iii) any other event
materially affecting Base Accounts or the value or amount thereof. All payments
on Base Accounts and all adjustments and credits with respect thereto, whether
unilateral, negotiated or otherwise, shall be promptly reflected in the Net
Outstanding Amount of Base Accounts; and
(l) from time to time, such other financial data and information about the
Credit Parties and their Subsidiaries as the Bank may reasonably request.
Section 5.2 Conduct of Business. Each of the Credit Parties and their
Subsidiaries shall:
(a) duly observe and comply in all material respects with all applicable
laws and valid requirements of any governmental authorities relative to such
Credit Party's or such Subsidiary's corporate existence, rights and franchises,
to the conduct of its business and to its property and assets (including without
limitation all Environmental Laws and ERISA), and shall maintain and keep in
full force and effect all licenses and permits necessary in any material respect
to the proper conduct of its business;
(b) maintain its corporate existence;
(c) remain engaged substantially in real estate brokerage, insurance or
related real estate and home ownership services activities; and
(d) maintain and keep its properties in good repair, working order and
condition, and from time to time make all needful improvements thereto so that
its business may be property and advantageously conducted at all times. The
Credit Parties shall have and maintain at all times with respect to the
Collateral insurance against risks of fire, so-called extended coverage,
sprinkler, leakage and other risks
-29-
customarily insured against by companies engaged in businesses similar to that
of the Credit Parties, in amounts, containing such terms, in such form, for such
periods and written by such companies as may be reasonably satisfactory to the
Bank, such insurance to be payable to the Bank as loss payee and additional
insured, as its interests may appear. All policies of insurance shall provide
for thirty (30) days minimum written cancellation notice to the Bank. In the
event of failure to provide and maintain insurance as herein provided the Bank
may, at its option, provide such insurance and notify the Borrowers of the
charge and demand repayment immediately. The Credit Parties shall furnish to the
Bank certificates or other evidence satisfactory to the Bank of compliance with
the foregoing insurance provisions.
Section 5.3 Taxes. The Credit Parties shall pay or cause to be paid all
taxes, assessments or governmental charges on or against them or any of their
Subsidiaries or its or their properties on or prior to the time when they become
due; provided that this covenant shall not apply to any tax, assessment or
charge that is being contested in good faith by appropriate proceedings and with
respect to which adequate reserves have been established and are being
maintained in accordance with GAAP.
Section 5.4 Inspection by the Bank. The Credit Parties shall permit the Bank
or its designees, at any reasonable time, and upon reasonable notice (or if a
Default shall have occurred and is continuing, at any time and without prior
notice), (a) to visit and inspect the properties of any of the Credit Parties or
any of their Subsidiaries, (b) to examine and make copies of and take abstracts
from the books and records of the Credit Parties and their Subsidiaries, (c) to
discuss the affairs, finances and accounts of the Credit Parties and their
Subsidiaries with their appropriate officers, employees and accountants, and (d)
to arrange for verification of Accounts under reasonable procedures, directly
with account debtors or by other methods; and shall do, make, execute and
deliver all such additional and further acts, things, deeds, assurances, and
instruments as the Bank may reasonably require more completely to vest in and
assure to the Bank its rights hereunder or in any Collateral and to carry into
effect the provisions and intent of this Agreement. In handling such information
the Bank shall exercise the same degree of care that it exercises with respect
to its own proprietary information of the same types to maintain the
confidentiality of any non-public information thereby received or received
pursuant to subsections 5.1(a), (b), or (c) except that disclosure of such
information may be made (i) to the subsidiaries or Affiliates of the Bank in
connection with their present or prospective business relations with the Credit
Parties, (ii) to prospective transferees or purchasers of an interest in the
Loans, (iii) as required by law, regulation, rule or order, subpoena, judicial
order or similar order and (iv) as may be required in connection with the
examination, audit or similar investigation of the Bank.
Section 5.5 Maintenance of Books and Records. Each of the Credit Parties and
their Subsidiaries shall keep adequate books and records of account, in which
true and complete entries will be made reflecting all of its business and
financial transactions, and such entries will be made in accordance with GAAP
consistently applied and applicable law.
Section 5.6 Cash Flow Coverage Ratio. The Credit Parties shall maintain a
Cash Flow Coverage Ratio as at the end of each fiscal quarter of not less than
1.25:1.00.
Section 5.7 Leverage Coverage. The Credit Parties shall maintain a Leverage
Ratio (a) as at end of each fiscal quarter during Fiscal Year 1998 of not
greater than 3.00:1.00, (b) as at the end of each fiscal quarter during Fiscal
Year 1999 of not greater than 2.50:1.00, and (c) as at the end of each fiscal
quarter during Fiscal Year 2000 and each fiscal quarter thereafter of not
greater than 2.00:1.00.
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Section 5.8 Further Assurances. At any time and from time to time the
Credit Parties shall, and shall cause each of their Subsidiaries to, execute and
deliver such further instruments and take such further action as may reasonably
be requested by the Bank to effect the purposes of this Agreement and the Notes.
Section 5.9 Deposit Accounts. The Borrowers shall maintain not less
than 80% of the aggregate balance of Escrowed Funds in respect of purchase and
sale agreements dealing with property located in The Commonwealth of
Massachusetts. The Borrowers shall establish and maintain their operating and
deposit accounts with the Bank or the Bank's Affiliates unless the deposit
services and capabilities of the Bank or its Affiliates is substantially less
than the deposit services and capabilities offered by other banking institutions
where the Borrowers' business offices are located. The Borrowers shall also
maintain in the Loan Account at the Bank an amount sufficient at all times to
pay the next succeeding accrued interest payment in respect of the Loans.
Section 5.10 Year 2000 Compliance. The Credit Parties and their Subsidiaries
are undertaking any reprogramming required to permit the proper functioning, in
and following the year 2000, of (i) the Credit Parties and their Subsidiaries'
computer systems and (ii) equipment containing embedded microchips (including
systems and equipment supplied by others or with which the Credit Parties and
their Subsidiaries' systems interface) and the testing of all such systems and
equipment, as so programmed. The cost to the Credit Parties and their
Subsidiaries of such reprogramming and testing of the reasonably foreseeable
consequences of year 2000 to the Credit Parties and their Subsidiaries
(including, without limitation, reprogramming errors and the failure of others'
systems or equipment) will not result in a Default or an Event of Default or
have a material adverse effect on the business or other condition of the Credit
Parties or their Subsidiaries. Except for such of the reprogramming referred to
in the preceding sentence as may be necessary, the computer and management
information systems of the Credit Parties and their Subsidiaries are and, with
ordinary course upgrading and maintenance, will continue for the term of this
Agreement to be, sufficient to permit the Credit Parties and their Subsidiaries
to conduct their business without a material adverse effect.
Section 5.11 Merger of Certain Credit Parties. The Credit Parties shall, on
or prior to June 30, 1998, cause Dollar Dry Dock Real Estate, Inc. ("Dollar Dry
Dock") and The Heritage Group, Inc. ("Heritage") to merge with Hillshire House,
Inc. (the "Mergers") and in connection therewith deliver to the Bank (a)
complete copies of all Certificates of Merger and related documents providing
for the Mergers (the "Merger Documents") and (b) an opinion, in form and
substance satisfactory to the Bank and its counsel, addressed to the Bank from
counsel to the Credit Parties acceptable to the Bank opining as to (i) the due
authorization and execution of the Merger Documents by Dollar Dry Dock and
Heritage, (ii) the compliance of the Merger Documents with Connecticut and
Delaware law, (iii) the sufficiency of the Merger Documents under Connecticut
and Delaware law to effectuate the Mergers and (iv) the effectiveness of the
Mergers against Dollar Dry Dock and Heritage under Connecticut and Delaware law.
ARTICLE 6 NEGATIVE COVENANTS
So long as the Bank has any commitment to lend hereunder or any Loan or
other Obligation remains outstanding, the Credit Parties covenant as follows:
Section 6.1 Indebtedness. None of the Credit Parties nor any of their
Subsidiaries shall create, incur, assume, guarantee or be or remain liable with
respect to any Indebtedness other than the following:
(a) Indebtedness of the Credit Parties or any of their Subsidiaries
to the Bank or any of the Bank's Affiliates;
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(b) Indebtedness existing as of the date of this Agreement and disclosed on
Schedule 6.1 attached hereto;
(c) Indebtedness secured by Permitted Encumbrances;
(d) Indebtedness in respect of the purchase price of capital assets
purchased, and in respect of lease payments in respect of capital assets leased,
in connection with the improvement of existing office facilities in the ordinary
course of business, provided that, after giving effect to the incurrence of such
indebtedness, the Credit Parties would be in compliance with the covenants
contained in Sections 5.7 and 5.8 of this Agreement on a pro-forma basis and,
upon request by the Bank, provides satisfactory documentary evidence of such
compliance in writing to the Bank;
(e) Indebtedness in respect of the purchase price of services, materials and
supplies incurred by the Credit Parties in the ordinary course of business,
provided that such Indebtedness is paid and discharged when due in conformity
with the customary trade terms and practices, except any such Indebtedness being
contested in good faith and by the proceedings properly conducted by the Credit
Parties;
(f) Indebtedness of XxXxxxx Mortgage in the maximum principal amount of
$40,000,000 under the Mortgage Warehousing Facility;
(g) Subordinated Indebtedness; and
(h) other Indebtedness incurred by the Credit Parties after the date of this
Agreement with prior approval of the Bank.
Section 6.2 Contingent Liabilities. None of the Credit Parties nor any of
their Subsidiaries shall create, incur, assume or remain liable with respect to
any Guarantees other than the endorsement of instruments for collection in the
ordinary course of business, and the Guarantor's guaranty of the Obligations
hereunder.
Section 6.3 Leases. None of the Credit Parties nor any of their Subsidiaries
shall enter into any leases of personal property, as lessee, except for (a)
lease arrangements with BancBoston Leasing pursuant to the Lease Line, and (b)
operating and capital lease arrangements with Persons other than BancBoston
Leasing provided that the aggregate payment obligations of the Credit Parties
and their Subsidiaries under all lease arrangements permitted under this clause
(b) shall not exceed $500,000 during any fiscal year.
Section 6.4 Sale and Leaseback. None of the Credit Parties nor any of their
Subsidiaries shall enter into any arrangement, directly or indirectly, whereby
such Credit Party or such Subsidiary shall sell or transfer any property owned
by it in order to lease such property or lease other property that the Credit
Parties or any of their Subsidiaries intends to use for substantially the same
purpose as the property being sold or transferred, provided that the Credit
Parties shall be entitled to sell to and lease back from an affiliated
partnership or other entity the sales office located at 00 Xxxxxx Xxxx,
Xxxxxxxx, Xxxxxxxxxxxxx, provided further that such sale and lease are at fair
market values and on terms that are substantially the equivalent of terms that
would be negotiated at arms length between non-affiliated parties.
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Section 6.5 Encumbrances. None of the Credit Parties nor any of their
Subsidiaries shall create, incur, assume or suffer to exist any mortgage,
pledge, security interest, lien or other charge or encumbrance, including the
lien or retained security title of a conditional vendor upon or with respect to
any property or assets ("Encumbrances"), or assign or otherwise convey any right
to receive income, including the sale or discount of accounts receivable with or
without recourse, except the following ("Permitted Encumbrances"):
(a) Encumbrances in favor of the Bank or any of its affiliates;
(b) Encumbrances existing as of (or which will arise within thirty days of)
the date of this Agreement and are disclosed on Schedule 4.5 attached hereto;
(c) liens for taxes, fees, assessments and other governmental charges to the
extent that payment of the same may be postponed or is not required in
accordance with the provisions of Section 5.3;
(d) landlords' and lessors' liens in respect of rent not in default or liens
in respect of pledges or deposits under workmen's compensation, unemployment
insurance, social security laws, or similar legislation (other than ERISA) or in
connection with appeal and similar bonds incidental to litigation; mechanics',
laborers' and materialmen's and similar liens, if the obligations secured by
such liens are not then delinquent; liens securing the performance of bids,
tenders, contracts (other than for the payment of money); and statutory
obligations incidental to the conduct of its business and that do not in the
aggregate materially detract from the value of its property or materially impair
the use thereof in the operation of its business;
(e) judgment liens that shall not have been in existence for a period longer
than 30 days after the creation thereof or, if a stay of execution shall have
been obtained, for a period longer than 30 days after the expiration of such
stay;
(f) rights of lessors under capital leases;
(g) easements, rights of way, restrictions and other similar charges or
Encumbrances relating to real property and not interfering in a material way
with the ordinary conduct of its business; and
(h) Encumbrances on its property or assets created in connection with the
refinancing of Indebtedness secured by Permitted Encumbrances on such property,
provided that the amount of Indebtedness secured by any such Encumbrance shall
not be increased as a result of such refinancing and no such Encumbrance shall
extend to property and assets of the Credit Parties and their Subsidiaries not
encumbered prior to any such refinancing.
Section 6.6 Merger; Consolidation; Sale or Lease of Assets. None of the
Credit Parties nor any of their Subsidiaries shall (a) sell, lease or otherwise
dispose of assets or properties, other than sales or leases of inventory in the
ordinary course of business; or (b) liquidate, merge or consolidate into or with
any other person or entity, provided that (i) any Borrower or any Subsidiary of
any Borrower may merge or consolidate into or with any other Borrower if no
Event of Default has occurred and is continuing or would result from such merger
and if a Borrower is the surviving company, and (ii) the Credit Parties may
consummate Acquisitions to the extent permitted under subsection 6.8(b) of this
Agreement.
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Section 6.7 Equity Distributions. The Guarantor shall not pay any dividends
on any class of its capital stock or make any other distribution or payment on
account of or in redemption, retirement or purchase of such capital stock, or
issue any additional shares of its capital stock, without the prior written
consent of the Bank; provided that this Section 6.7 shall not apply to (a) the
issuance, delivery or distribution by the Guarantor of shares of its common
stock pro rata to its existing shareholders, (b) the purchase or redemption by
the Guarantor of shares of its capital stock with the proceeds of the issuance
of additional shares of its capital stock or (c) the issuance, delivery or
distribution by the Guarantor of shares of its common stock to employees
pursuant to an employee benefit plan.
Section 6.8 Investments; Acquisitions.
(a) None of the Credit Parties nor any of their Subsidiaries shall make or
maintain any Investments other than (i) existing Investments in Subsidiaries,
(ii) Qualified Investments, (iii) Acquisitions permitted under subsection
6.8(b), and (iv) investments by XxXxxxx Mortgage consisting of the purchase or
other acquisition of a joint venture interest in a joint venture formed to
provide capital for and/or expand the range of products offered by XxXxxxx
Mortgage.
(b) None of the Credit Parties nor any of their Subsidiaries shall
consummate, or enter into any binding commitment or offer with respect to, any
Acquisition, without the prior written approval of the Bank, except that the
Borrowers shall not be required to obtain the prior consent of the Bank with
respect to any Acquisition of any real estate brokerage firm if the aggregate
value of the consideration (including all consulting and non-competition fees)
paid by the Borrowers for the stock or other beneficial interests in or assets
of such brokerage firm is less than $250,000 and the Borrowers are not assuming
any indebtedness of such firm. In connection with any proposed Acquisition, the
Credit Parties shall (i) notify the Bank in writing prior to entering into any
binding commitment or offer with respect to any proposed Acquisition, (ii)
provide the Bank with such financial and other information as the Bank may
reasonably request with respect to any such proposed Acquisition, (iii) cause
any Person whose stock or other beneficial interests are being acquired to
become a "Borrower" hereunder and to grant the Bank a first priority security
interest in all of such Person's assets pursuant to documentation in form and
substance satisfactory to the Bank; (iv) grant the Bank a first priority
security interest in any and all assets acquired pursuant to documentation in
form and substance satisfactory to the Bank; and (v) cause to be delivered to
the Bank such opinions, certificates and other documents in connection with such
Acquisition as the Bank shall reasonably require.
Section 6.9 ERISA. None of the Credit Parties nor any member of the
Controlled Group shall permit any Plan maintained by it to (a) engage in any
"prohibited transaction" (as defined in Section 4975 of the Code, (b) incur any
"accumulated funding deficiency" (as defined in Section 302 of ERISA) whether or
not waived, or (c) terminate any Plan in a manner that could result in the
imposition of a lien or encumbrance on the assets of any of the Credit Parties
or any of their Subsidiaries pursuant to Section 4068 of ERISA.
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ARTICLE 7 SECURITY
Section 7.1 Security Interest. As security for the payment and performance
of all Obligations of the Credit Parties to the Bank, the Bank shall have and
each of the Borrowers hereby grants to the Bank a continuing security interest
in and lien on all personal property of the Borrowers of every kind and
description, tangible or intangible, whether now or hereafter existing, whether
now owned or hereafter acquired, and wherever located, including but not limited
to the following: all inventory of the Borrowers; all furniture, and similar
property of the Borrowers; all Accounts of the Borrowers; all contract rights of
the Borrowers; all other rights of the Borrowers, including, without limitation,
amounts due from Affiliates, tax refunds, and insurance proceeds; all files,
records (including, without limitation, computer programs, tapes and related
electronic data processing software) and writings of the Borrowers or in which
any of the Borrowers has an interest in any way relating to the foregoing
property; all goods, instruments, documents of title, policies and certificates
of insurance, securities, chattel paper, deposits, cash or other property owned
by the Borrowers or in which any of the Borrowers has an interest (excluding
Escrowed Funds other than Pledged Escrow Proceeds) which are now or may
hereafter be in the possession of the Bank or as to which the Bank may now or
hereafter control possession by documents of title or otherwise; all general
intangibles of the Borrowers (including, without limitation, all patents,
trademarks, trade names, service marks, copyrights and applications for any of
the foregoing; all rights to use patents, trademarks, trade names, service
marks, and copyrights of any person; and any rights of the Borrowers to
retrieval from third parties of electronically processed and recorded
information pertaining to any of the types of collateral referred to in this
Section 7.1); any other property, real or personal, tangible or intangible, in
which any of the Borrowers now has or hereafter acquires a interest or which is
now or may hereafter be in the possession of the Bank; any sums at any time
credited by or due from the Bank to the Borrowers, including deposits; and all
proceeds and products of all of the foregoing.
Section 7.2 Location of Records and Collateral; Name Change. The Borrowers
shall give the Bank written notice of each location at which Collateral is or
will be kept and of each office of the Borrowers at which the records of
Borrowers pertaining to Accounts are kept. Except as such notice is given, all
Collateral is and shall be kept, and all records of the Borrowers pertaining to
Accounts and contract rights are and shall be kept at the Borrowers' chief
executive offices which are currently located at 00 Xxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxxxxxx 00000. The Borrowers shall give the Bank thirty (30) days prior
written notice of any change in the name or corporate form of any of the
Borrowers or of any change in the names under which the Borrowers' businesses
are transacted.
Section 7.3 Status of Collateral. As of the date of this Agreement, each of
the Borrowers has good and marketable title to all of its properties, assets and
rights of every name and nature now purported to be owned by it, including,
without limitation, the Collateral, free from all liens, charges and
encumbrances whatsoever, except as disclosed on Schedule 4.5 attached hereto. At
the time the Borrowers pledges, sells, assigns or transfers to the Bank any
instrument, document of title, security, chattel paper or other property
(including Inventory, contract rights and Accounts) or any proceeds or products
thereof, or any interest therein, the Borrowers shall be the lawful owner
thereof and shall have good right to pledge, sell, assign or transfer the same;
none of such property shall have been pledged, sold, assigned or transferred to
any person other than the Bank or in any way encumbered, except as disclosed on
Schedule 4.5 attached hereto; and the Borrowers shall defend the same against
the claims and demands of all persons.
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ARTICLE 8 DEFAULTS
Section 8.1 Events of Default. There shall be an Event of Default
hereunder if any of the following events occurs:
(a) the Borrowers shall fail to pay when due any amount of principal of any
Loans, or any amount of interest thereon or any fees or expenses payable
hereunder or under any of the Notes; or
(b) the Credit Parties shall fail to perform any term, covenant or agreement
contained in Sections 5.1(a), 5.1(b), 5.1(c), 5.1(g), 5.1(j), 5.2(d), 5.4, 5.6,
5.7 or 6.1 through 6.9; or
(c) the Credit Parties shall fail to perform any covenant contained in
Sections 5.1(d), 5.1(e), 5.1(f), 5.1(h), 5.1(i), 5.1(k), 5.2(a), 5.2(b), 5.2(c),
5.3 or 5.9, and such failure shall continue for five (5) days; or
(d) the Credit Parties shall fail to perform any term, covenant or agreement
(other than in respect of subsections 8.1(a) through (c) hereof) contained in
this Agreement and such default shall continue for 30 days; or
(e) any representation or warranty of the Credit Parties made in this
Agreement or in the Notes or any other documents or agreements executed in
connection with the transactions contemplated by this Agreement or in any
certificate delivered hereunder shall prove to have been false in any material
respect upon the date when made or deemed to have been made; or
(f) there shall occur any material adverse change in the assets,
liabilities, financial condition, businesses or prospects of any of the Credit
Parties, as reasonably determined by the Bank acting in good faith; or
(g) any of the Credit Parties or any of their Subsidiaries shall fail to pay
at maturity, or within any applicable period of grace, any obligations
(excluding obligations consisting of claims of vendors to the Credit Parties or
any of their Subsidiaries incurred in the ordinary course of business and
contested in good faith by the Credit Parties) in excess of Twenty-Five Thousand
Dollars ($25,000) in the aggregate for borrowed monies or advances, or for the
use of real or personal property, or fail to observe or perform any term,
covenant or agreement evidencing or securing such obligations for borrowed
monies or advances, or relating to such use of real or personal property, the
result of which failure is to permit the holder or holders of such Indebtedness
to cause such Indebtedness to become due prior to its stated maturity upon
delivery of required notice, if any; or
(h) any of the Credit Parties or any of their Subsidiaries shall (i) apply
for or consent to the appointment of, or the taking of possession by, a
receiver, custodian, trustee, liquidator or similar official of itself or of all
or a substantial part of its property, (ii) be generally not paying its debts as
such debts become due, (iii) make a general assignment for the benefit of its
creditors, (iv) commence a voluntary case under the Federal Bankruptcy Code (as
now or hereafter in effect), (v) take any action or commence any case or
proceeding under any law relating to bankruptcy, insolvency, reorganization,
winding-up or composition or adjustment of debts, or any other law providing for
the relief of debtors, (vi) fail to contest in a timely or appropriate manner,
or acquiesce in writing to, any petition filed against it in an involuntary case
under the Federal Bankruptcy Code or other law, (vii) take any action under the
laws of its jurisdiction of incorporation or organization similar to any of the
foregoing, or (viii) take any corporate action for the purpose of effecting any
of the foregoing; or
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(i) a proceeding or case shall be commenced, without the application or
consent of the Credit Parties in any court of competent jurisdiction, seeking
(i) the liquidation, reorganization, dissolution, winding up, or composition or
readjustment of the debts of any of the Credit Parties, (ii) the appointment of
a trustee, receiver, custodian, liquidator or the like of any of the Credit
Parties or of all or any substantial part of any of their assets, or (iii)
similar relief in respect of any of the Credit Parties, under any law relating
to bankruptcy, insolvency, reorganization, winding-up or composition or
adjustment of debts or any other law providing for the relief of debtors, and
such proceeding or case shall continue undismissed, or unstayed and in effect,
for a period of 30 days; or an order for relief shall be entered in an
involuntary case under the Federal Bankruptcy Code, against any of the Credit
Parties; or action under the laws of the jurisdiction of incorporation or
organization of any of the Credit Parties similar to any of the foregoing shall
be taken with respect to any of the Credit Parties and shall continue unstayed
and in effect for any period of 30 days; or
(j) a judgment or order for the payment of money shall be entered against
any of the Credit Parties or any of their Subsidiaries by any court, or a
warrant of attachment or execution or similar process shall be issued or levied
against property of any of the Credit Parties or any of their Subsidiaries, that
in the aggregate exceeds Twenty-Five Thousand Dollars ($25,000) in value and
such judgment, order, warrant or process shall continue undischarged or unstayed
for 30 days; or
(k) any of the Credit Parties or any member of the Controlled Group shall
fail to pay when due an amount or amounts aggregating in excess of Twenty-Five
Thousand Dollars ($25,000) that it shall have become liable to pay to the PBGC
or to a Plan under Title IV of ERISA; or notice of intent to terminate a Plan or
Plans shall be filed under Title IV of ERISA by any of the Credit Parties, any
member of the Controlled Group, any plan administrator or any combination of the
foregoing; or the PBGC shall institute proceedings under Title IV of ERISA to
terminate or to cause a trustee to be appointed to administer any such Plan or
Plans or a proceeding shall be instituted by a fiduciary of any such Plan or
Plans against the Borrowers and such proceedings shall not have been dismissed
within 30 days thereafter; or a condition shall exist by reason of which the
PBGC would be entitled to obtain a decree adjudicating that any such Plan or
Plans must be terminated; or
(l) the Guarantor shall cease to own, directly or indirectly, 100% of the
outstanding capital stock of any of the Borrowers; or
(m) the Borrowers shall fail to pay when due any amount owing under the
Lease Line or fail to perform any term, covenant or agreement contained in any
of the documents or agreements relating to the Lease Line and such failure shall
continue beyond any applicable grace period therefor.
Section 8.2 Remedies. Upon the occurrence of an Event of Default described
in subsections 8.1(h) and 8.1(i), immediately and automatically, and upon the
occurrence of any other Event of Default, at any time thereafter while such
Event of Default is continuing, at the Bank's option and upon the Bank's
declaration:
(a) the Bank's commitment to make any further Loans hereunder shall
terminate;
(b) the unpaid principal amount of the Loans together with accrued interest
and all other Obligations shall become immediately due and payable without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived; and
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(c) the Bank may exercise any and all rights it has under this Agreement,
the Notes or any other documents or agreements executed in connection herewith,
or at law or in equity, and proceed to protect and enforce the Bank's rights by
any action at law, in equity or other appropriate proceeding whether for
specific performance or for any injunction against a violation of any covenant
contained herein or in the Notes or any other documents or agreements executed
in connection herewith or in aid of the exercise of any power granted hereby or
thereby or by law.
(d) Without limiting the rights of the Borrowers set forth elsewhere in this
Section 8.2, upon the occurrence of any Event of Default and at any time
thereafter (such default not having been cured), the Bank shall have the right
to take immediate possession of the Collateral, and for that purpose the Bank
may, so far as the Borrowers can give authority therefor, enter upon any
premises on which Collateral may be situated and remove the same therefrom. The
Borrowers waive demand and notice with respect to and assents to any
repossession of Collateral. The Bank may dispose of Collateral in any order and
in any manner it chooses and may refrain from the sale of any real property,
held as Collateral, until the sale of personal property. Except for Collateral
which is perishable or threatens to decline speedily in value or which is of a
type customarily sold on a recognized market, the Bank shall give to the
Borrowers at least five (5) days' prior written notice of the time and place of
any public sale of Collateral or of the time after which any private sale or any
other intended disposition is to be made. The residue of any proceeds of
collection or sale, after satisfying all Obligations in such order of preference
as the Bank may determine and making proper allowance for interest on
Obligations not then due, shall be credited to any deposit account which the
Borrowers may maintain with the Bank, or, if there is no such account, held
pending instructions from the Borrowers. The Borrowers shall remain liable for
any deficiency.
(e) The Bank may at any time in its sole discretion (after an Event of
Default has occurred) transfer any securities or other property constituting
Collateral into its own name or that of its nominee and receive the income
thereon and hold the same as security for Obligations or apply it on principal
or interest due on Obligations. Insofar as Collateral shall consist of Accounts
or instruments, the Bank may, upon the occurrence of an Event of Default,
without notice to or demand on the Borrowers, demand and collect such Collateral
as the Bank may determine. For the purpose of realizing the Bank's rights
therein, the Bank may receive, open and dispose of mail addressed to any of the
Borrowers and endorse notes, checks, drafts, money orders, documents of title or
other evidences of payment, shipment or storage or any form of Collateral on
behalf of and in the name of the Borrowers. The powers conferred on the Bank by
this Section are solely to protect the interest of the Bank and shall not impose
any duties on the Bank to exercise any powers.
(f) In addition to all other rights and remedies provided hereunder or by
law, the Bank shall have in any jurisdiction where enforcement hereof is sought
the rights and remedies of a secured party under the Uniform Commercial Code of
Massachusetts.
ARTICLE 9 GUARANTY BY THE GUARANTOR
Section 9.1 The Guarantee. The Guarantor hereby guarantees to the Bank and
to the Bank's successors and assigns the prompt payment in full when due
(whether at stated maturity, by acceleration or otherwise) of the principal of
and interest on the Loans made by the Bank to the Borrowers and all other
amounts from time to time owing from the Borrowers to the Bank, and all
obligations of every type of the Borrowers to the Bank, in each case strictly in
accordance with the terms thereof (such obligations being herein collectively
called the "Guaranteed Obligations"). The Guarantor hereby further agrees that
if the Borrowers shall fail to pay in full when due (whether at stated maturity,
by acceleration or otherwise) any of the Guaranteed Obligations, the Guarantor
shall promptly pay the same, without any demand or notice whatsoever, and that
in the case of any extension of time of payment or renewal of any of the
Guaranteed Obligations, the same will be promptly paid in full when due (whether
at extended maturity, by acceleration or otherwise) in accordance with the terms
of such extension or renewal.
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Section 9.2 Obligations Unconditional. The obligations of the Guarantor
under Section 9.1 are absolute and unconditional irrespective of the value,
genuineness, validity, regularity or enforceability of this Agreement, the Notes
or any other agreement or instrument referred to herein or therein, or any
substitution, release or exchange of any other guarantee of or security for any
of the Guaranteed Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this Section 3.2 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and all
circumstances. Without limiting the generality of the foregoing, it is agreed
that the occurrence of any one or more of the following shall not alter or
impair the liability of the Guarantors hereunder which shall remain absolute and
unconditional as described above:
(a) at any time or from time to time, without notice to the Guarantor, the
time for any performance of or compliance with any of the Guaranteed Obligations
shall be extended, or such performance or compliance shall be waived;
(b) any of the acts mentioned in any of the provisions hereof or of the
Notes or any other agreement or instrument referred to herein or therein shall
be done or omitted;
(c) the maturity of any of the Guaranteed Obligations shall be accelerated,
or any of the Guaranteed Obligations shall be modified, supplemented or amended
in any respect, or any right hereunder or under the Notes or under any other
agreement or instrument referred to herein or therein shall be waived or any
other guarantee of any of the Guaranteed Obligations or any security therefor
shall be released or exchanged in whole or in part or otherwise dealt with; or
(d) any lien or security interest granted to, or in favor of, the Bank as
security for any of the Guaranteed Obligations shall fail to be perfected.
The Guarantor hereby expressly waives diligence, presentment, demand of payment,
protest and all notices whatsoever, and any requirement that the Bank exhaust
any right, power or remedy or proceed against the Borrowers hereunder or under
the Notes or under any other agreement or instrument referred to herein or
therein, or against any other Person under other guarantee of, or security for,
any of the Guaranteed Obligations.
Section 9.3 Reinstatement. The obligations of the Guarantor under this
Article 9 shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of the Borrowers in respect of the Guaranteed
Obligations is rescinded or must be otherwise restored by any holder of any of
the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy
or reorganization or otherwise, and the Guarantor agrees that it will indemnify
the Bank on demand for all reasonable costs and expenses (including fees and
expenses of counsel) incurred by the Bank in connection with such rescission or
restoration, including any such costs and expenses incurred in defending against
any claim alleging that such payment constituted a preference, fraudulent
transfer or similar payment under any bankruptcy, insolvency or similar law.
Section 9.4 Subrogation. The Guarantor hereby waives all rights of
subrogation or contribution, whether arising by contract or operation of law
(including, without limitation, any such right arising under the Federal
Bankruptcy Code of 1978, as amended) or otherwise by reason of any payment by it
pursuant to the provisions of this Article 9 and further agrees with the
Borrowers for the benefit of each of the Guarantor's and the Borrowers'
creditors (including, without limitation, the Bank) that any such payment by the
Guarantor shall constitute a contribution of capital by the Guarantor to the
Borrowers.
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Section 9.5 Remedies. The Guarantor agrees that, as between the Guarantor
and the Bank, the obligations of the Borrowers hereunder may be declared to be
forthwith due and payable as provided in Section 8.2 (and shall be deemed to
have become automatically due and payable in the circumstances provided in
Section 8.2) for purposes of Section 9.1 notwithstanding any stay, injunction or
other prohibition preventing such declaration (or such obligations from becoming
automatically due and payable) as against the Borrowers and that, in the event
of such declaration (or such obligations being deemed to have become
automatically due and payable), such obligations (whether or not due and payable
by the Borrowers) shall forthwith become due and payable by the Guarantor for
purposes of Section 9.1.
Section 9.6 Instrument for the Payment of Money. The Guarantor hereby
acknowledges that the guarantee in this Article 9 constitutes an instrument for
the payment of money, and consents and agrees that the Bank, at its sole option,
in the event of a dispute by the Guarantor in the payment of any moneys due
hereunder, shall have the right to summary judgment or such other expedited
procedure as may be available for a suit on a note or other instrument for the
payment of money.
Section 9.7 Continuing Guarantee. The guarantee in this Article 9 is a
continuing guarantee, and shall apply to all Guaranteed Obligations whenever
arising.
ARTICLE 10 MISCELLANEOUS
Section 10.1 Notices. Unless otherwise specified herein, all notices
hereunder to any party hereto shall be in writing and shall be deemed to have
been given when delivered by hand, when properly deposited in the mails postage
prepaid, when sent by telex, answerback received, or electronic facsimile
transmission, or when delivered to the telegraph company or overnight courier,
addressed to such party at its address indicated below:
If to any of the Credit Parties, to
The XxXxxxx Companies, Inc.
00 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx XxXxxxx
Fax No.: (000) 000-0000
If to the Bank, to
BankBoston, N.A.
000 Xxxxxxx Xxxxxx
Mail Code 01-07-07
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxxx Xxxxx, Director
Fax No.: (000) 000-0000
or at any other address specified by such party in writing.
-40-
Section 10.2 Expenses. The Borrowers will pay on demand all expenses of the
Bank in connection with the preparation, waiver or amendment of this Agreement,
the Note or other documents executed in connection therewith, or the
administration, default or collection of the Loans or other Obligations or
administration, default, collection in connection with the Bank's exercise,
preservation or enforcement of any of its rights, remedies or options
thereunder, including, without limitation, fees of outside legal counsel or the
allocated costs of in-house legal counsel, accounting, consulting, brokerage or
other similar professional fees or expenses, and any fees or expenses associated
with any travel or other costs relating to any appraisals or examinations
conducted in connection with the Obligations or any collateral therefor, and the
amount of all such expenses shall, until paid, bear interest at the rate
applicable to principal hereunder (including any default rate).
Section 10.3 Set-Off. Regardless of the adequacy of any collateral or other
means of obtaining repayment of the Obligations, any deposits, balances or other
sums credited by or due from the head office of the Bank or any of its branch
offices to the Borrowers, except such deposits, balances or other funds
consisting of Escrowed Funds (other than Pledged Escrow Proceeds), may, at any
time and from time to time after the occurrence of an Event of Default
hereunder, without notice to the Borrowers or compliance with any other
condition precedent now or hereafter imposed by statute, rule of law, or
otherwise (all of which are hereby expressly waived) be set off, appropriated,
and applied by the Bank against any and all obligations of the Borrowers to the
Bank or any of its affiliates in such manner as the head office of the Bank or
any of its branch offices in their sole discretion may determine, and the
Borrowers hereby grant the Bank a continuing security interest in such deposits,
balances or other sums for the payment and performance of all such obligations.
Section 10.4 Term of Agreement. This Agreement shall continue in force and
effect so long as the Bank has any commitment to make Loans hereunder or any
Loan or any Obligation shall be outstanding.
Section 10.5 No Waivers. No failure or delay by the Bank in exercising any
right, power or privilege hereunder or under the Notes or under any other
documents or agreements executed in connection herewith shall operate as a
waiver thereof; nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein and in the Notes provided are
cumulative and not exclusive of any rights or remedies otherwise provided by
agreement or law.
Section 10.6 Governing Law. This Agreement and the Notes shall be deemed to
be contracts made under seal and shall be construed in accordance with and
governed by the laws of The Commonwealth of Massachusetts (without giving effect
to any conflicts of laws provisions contained therein).
Section 10.7 Amendments. Neither this Agreement nor the Note nor any
provision hereof or thereof may be amended, waived, discharged or terminated
except by a written instrument signed by the Bank and, in the case of
amendments, by the Borrowers.
Section 10.8 Binding Effect of Agreement. This Agreement shall be binding
upon and inure to the benefit of the Borrowers and the Bank and their respective
successors and assigns; provided that the Borrowers may not assign or transfer
any of their rights or obligations hereunder.
Section 10.9 Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures hereto and thereto were
upon the same instrument.
Section 10.10 Partial Invalidity. The invalidity or unenforceability of
any one or more phrases, clauses or sections of this Agreement shall not affect
the validity or enforceability of the remaining portions of it.-
-41-
Section 10.11 Captions. The captions and headings of the various sections
and subsections of this Agreement are provided for convenience only and shall
not be construed to modify the meaning of such sections or subsections.
Section 10.12 Waiver of Jury Trial. THE BANK AND THE CREDIT PARTIES AGREE
THAT NONE OF THEM NOR ANY ASSIGNEE OR SUCCESSOR SHALL (A) SEEK A JURY TRIAL IN
ANY LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY OTHER ACTION BASED UPON, OR ARISING
OUT OF, THIS AGREEMENT, ANY RELATED INSTRUMENTS, ANY COLLATERAL OR THE DEALINGS
OR THE RELATIONSHIP BETWEEN OR AMONG ANY OF THEM, OR (B) SEEK TO CONSOLIDATE ANY
SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT
BEEN WAIVED. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED BY THE
BANK AND THE CREDIT PARTIES, AND THESE PROVISIONS SHALL BE SUBJECT TO NO
EXCEPTIONS. NONE OF THE CREDIT PARTIES OR THE BANK HAS AGREED WITH OR
REPRESENTED TO THE OTHER THAT THE PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY
ENFORCED IN ALL INSTANCES.
Section 10.13 Entire Agreement. This Agreement, the Note and the documents
and agreements executed in connection herewith constitute the final agreement of
the parties hereto and supersede any prior agreement or understanding, written
or oral, with respect to the matters contained herein and therein.
Section 10.14 Bank's Right to Pledge. The Bank may at any time pledge all or
any portion of its rights under this Agreement or the Notes to any of the twelve
(12) Federal Reserve Banks organized under Section 4 of the Federal Reserve Act
12 U.S.C. Section 341. No such pledge or enforcement thereof shall release the
Bank from its obligations under this Agreement.
Section 10.15 Bank's Right to Sell Loans to Third Parties. The Bank and each
of its Assignees (as hereinafter defined) shall have the unrestricted right at
any time or from time to time and without the Borrowers' consent to assign all
or any portion of its Loans, commitments, rights and obligations hereunder to
one or more banks or other financial institutions each having combined paid in
capital and surplus (or other assets) of at least $100,000,000 (each an
"Assignee") and the Borrowers agree that they shall execute or cause to be
executed such documents including without limitation amendments to this
Agreement and to any other documents instruments and agreements executed in
connection herewith as the Bank shall deem reasonably necessary to effect the
foregoing. In addition at the request of the Bank and any such Assignee, the
Borrowers shall issue new promissory notes as applicable to any such assignee
and if the Bank has retained any of its rights and obligations hereunder
following such assignment to the Bank which new promissory notes shall be issued
in replacement of but not in discharge of the liability evidenced by the
promissory note held by the Bank prior to such assignment and shall reflect the
amount of the respective commitments and loans held by such Assignee and the
Bank after giving effect to such assignment. Upon the execution and delivery of
appropriate assignment documentation amendments and any other documentation
required by the Bank in connection with such assignment and the payment by
Assignee of the purchase price agreed to by the Bank and such Assignee, such
Assignee shall be a party to this Agreement and shall have all of the rights and
obligations of the Bank hereunder (and under and all other guaranties, documents
instruments and agreements executed in connection herewith to the extent that
such rights and obligations have been assigned by Bank pursuant to the
assignment documentation between the Bank and such Assignee and Bank shall be
released from its obligations hereunder and thereunder to a corresponding
extent. It is expressly understood and agreed that nothing herein shall restrict
the right of the Bank or any Assignee to, or require the Borrowers to consent
to, any (a) assignment or other transfer from the Bank or any Assignee of its
rights hereunder to an Affiliate of the Bank or such Assignee, or (b) collateral
assignment or other transfer by the Bank or any Assignee of any rights hereunder
to any Federal Reserve Bank.
-42-
Section 10.16 Bank's Right to Grant Participations. The Bank shall have the
unrestricted right at any time and from time to time and without the consent of
or notice to the Borrowers to grant to one or more banks or other financial
institutions (each, a "Participant") participating interests in the Bank's
obligations to lend hereunder and/or any or all of the Loans held by the Bank
hereunder. In the event of any such grant by the Bank of a participating
interest to a Participant whether or not upon notice to the Borrowers the Bank
shall remain responsible for the performance of its obligations hereunder and
the Borrowers shall continue to deal solely and directly with the Bank in
connection with the Bank's rights and obligations hereunder.
Section 10.17 Bank's Right to Furnish Information. The Bank may furnish any
information concerning the Borrowers in its possession from time to time to
prospective Assignees and Participants provided that the Bank shall require any
such prospective Assignee or Participant to agree to maintain the
confidentiality of such information.
[* THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK *]
-43-
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized officers as an instrument under seal as of the day and
year first above written.
BORROWERS:
The XxXxxxx Company, Inc.
By /s/ Xxxxxxx X. XxXxxxx
-----------------------------
Xxxxxxx X. XxXxxxx, Treasurer
XxXxxxx Relocation Services, Inc.
By /s/ Xxxxxxx X. XxXxxxx
-----------------------------
Xxxxxxx X. XxXxxxx, Treasurer
Referral Associates of New England, Inc.
By /s/ Xxxxxxx X. XxXxxxx
-----------------------------
Xxxxxxx X. XxXxxxx, Treasurer
The XxXxxxx Insurance Agency, Inc.
By /s/ Xxxxxxx X. XxXxxxx
-----------------------------
Xxxxxxx X. XxXxxxx, Treasurer
Hillshire House, Inc.
By /s/ Xxxxxxx X. XxXxxxx
-----------------------------
Xxxxxxx X. XxXxxxx, Treasurer
Real Estate Referral, Inc.
By /s/ Xxxxxxx X. XxXxxxx
-----------------------------
Xxxxxxx X. XxXxxxx, Treasurer
Dollar Dry Dock Real Estate, Inc.
-44-
By /s/ Xxxxxxx X. XxXxxxx
-----------------------------
Xxxxxxx X. XxXxxxx, Treasurer
The Heritage Group, Inc.
By /s/ Xxxxxxx X. XxXxxxx
-----------------------------
Xxxxxxx X. XxXxxxx, Treasurer
GUARANTOR:
The XxXxxxx Companies, Inc.
By /s/ Xxxxxxx X. XxXxxxx
-----------------------------
Xxxxxxx X. XxXxxxx, Treasurer
BANK:
BankBoston, N.A.
By /s/ Xxxxxx X. Xxxxxxx
-----------------------------
Xxxxxx X. Xxxxxxx, Vice President
-45-
EXHIBIT A-1
REVOLVING NOTE
May 8, 1998
$5,000,000 Boston, Massachusetts
For value received, the undersigned jointly and severally hereby promise to
pay to BANKBOSTON, N.A. (the "Bank"), or order, at the head office of the Bank
at 000 Xxxxxxx Xx., Xxxxxx, Xxxxxxxxxxxxx 00000, the principal amount of Five
Million Dollars ($5,000,000) or such lesser amount as shall equal the aggregate
principal amount of Revolving Loans outstanding under the Agreement referred to
below in lawful money of the United States of America and in immediately
available funds, and to pay interest on the unpaid principal balance hereof from
time to time outstanding, at said office and in like money and funds, for the
period commencing on the date hereof until paid in full, at the rates per annum
and on the dates provided in the Agreement referred to below.
This Note is issued pursuant to, and is entitled to the benefits of, and is
subject to, the provisions of a Second Amended and Restated Credit and Security
Agreement dated as of the date hereof by and between the undersigned, as
borrowers, The XxXxxxx Companies, Inc., as guarantor, and the Bank, as lender
(as the same may from time to time be amended, supplemented, modified, restated
or extended, the "Agreement"). All payments of principal of and interest on this
Note shall be payable in immediately available funds at the address of the Bank
set forth in the Agreement. Capitalized terms used but not defined herein shall
have the respective meanings assigned to them in the Agreement.
Overdue principal (whether at maturity, by reason of acceleration or
otherwise) and, to the extent permitted by applicable law, overdue interest and
fees or any other amounts payable under the Agreement or under this Revolving
Note shall bear interest from and including the due date thereof until paid,
compounded daily and payable on demand, at the rate set forth in the Agreement.
If a payment of principal or interest hereunder is not made within 10 days of
its due date, the undersigned will also pay on demand a late payment charge
equal to 5% of the amount of such payment. Nothing in the preceding sentence
shall affect the Bank's rights to exercise any of its rights and remedies
provided in the Agreement if an Event of Default has occurred. In no event shall
the amount contracted for and agreed to be paid by the Borrowers as interest on
this note exceed the highest lawful rate permissible under any law applicable
hereto.
As provided in the Agreement, this Note is secured by the Collateral and the
obligations of the undersigned hereunder have been guaranteed by The XxXxxxx
Companies, Inc., as guarantor, and the holder of this Note is entitled to the
benefits of the Agreement and all guaranties, subordination agreements, security
agreements and other agreements that may from time to time be executed or
delivered in respect of the Obligations.
-46-
If an Event of Default shall occur, the aggregate unpaid principal of and
accrued interest on this Note shall become or may be declared to be due and
payable in the manner and with the effect provided in the Agreement.
The undersigned may at their option prepay all or any part of the principal
of this Note before maturity upon the terms provided in the Agreement.
The undersigned makers hereby waive presentment, demand, notice of dishonor,
protest and all other demands and notices in connection with the delivery,
acceptance, performance and enforcement of this Note.
This instrument shall have the effect of an instrument executed under seal
and shall be governed by and construed in accordance with the laws of The
Commonwealth of Massachusetts (without giving effect to any conflicts of laws
provisions contained therein).
IN WITNESS WHEREOF, the undersigned have caused this Note to be executed by
their duly authorized offices as an instrument under seal as of the day and year
first written above.
The XxXxxxx Company, Inc.
By: Xxxxxxx X. XxXxxxx, Treasurer
XxXxxxx Relocation Services, Inc.
By: Xxxxxxx X. XxXxxxx, Treasurer
Referral Associates of New England, Inc.
By: Xxxxxxx X. XxXxxxx, Treasurer
The XxXxxxx Insurance Agency
By: Xxxxxxx X. XxXxxxx, Treasurer
Hillshire House, Inc.
By: Xxxxxxx X. XxXxxxx, Treasurer
-47-
Real Estate Referral, Inc.
By: Xxxxxxx X. XxXxxxx, Treasurer
Dollar Dry Dock Real Estate, Inc.
By: Xxxxxxx X. XxXxxxx, Treasurer
The Heritage Group, Inc.
By: Xxxxxxx X. XxXxxxx, Treasurer
-48-
EXHIBIT A-2
ACQUISITION FACILITY NOTE
May 8, 1998
$20,000,000 Boston, Massachusetts
For value received, the undersigned jointly and severally hereby promise to
pay to BANKBOSTON, N.A. (the "Bank"), or order, at the head office of the Bank
at 000 Xxxxxxx Xx., Xxxxxx, Xxxxxxxxxxxxx 00000, the principal amount of Twenty
Million Dollars ($20,000,000) or such lesser amount as shall equal the aggregate
principal amount of Acquisition Facility Loans outstanding under the Agreement
referred to below in lawful money of the United States of America and in
immediately available funds, and to pay interest on the unpaid principal balance
hereof from time to time outstanding, at said office and in like money and
funds, for the period commencing on the date hereof until paid in full, at the
rates per annum and on the dates provided in the Agreement referred to below.
This Note is issued pursuant to, and is entitled to the benefits of, and is
subject to, the provisions of a Second Amended and Restated Credit and Security
Agreement dated as of the date hereof by and between the undersigned, as
borrowers, The XxXxxxx Companies, Inc., as guarantor, and the Bank, as lender
(as the same may from time to time be amended, supplemented, modified, restated
or extended, the "Agreement"). All payments of principal of and interest on this
Note shall be payable in immediately available funds at the address of the Bank
set forth in the Agreement. Capitalized terms used but not defined herein shall
have the respective meanings assigned to them in the Agreement.
Overdue principal (whether at maturity, by reason of acceleration or
otherwise) and, to the extent permitted by applicable law, overdue interest and
fees or any other amounts payable under the Agreement or under this Acquisition
Facility Note shall bear interest from and including the due date thereof until
paid, compounded daily and payable on demand, at the rate set forth in the
Agreement. If a payment of principal or interest hereunder is not made within 10
days of its due date, the undersigned will also pay on demand a late payment
charge equal to 5% of the amount of such payment. Nothing in the preceding
sentence shall affect the Bank's rights to exercise any of its rights and
remedies provided in the Agreement if an Event of Default has occurred. In no
event shall the amount contracted for and agreed to be paid by the Borrowers as
interest on this note exceed the highest lawful rate permissible under any law
applicable hereto.
As provided in the Agreement, this Note is secured by the Collateral and the
obligations of the undersigned hereunder have been guaranteed by The XxXxxxx
Companies, Inc., as guarantor, and the holder of this Note is entitled to the
benefits of the Agreement and all guaranties, subordination agreements, security
agreements and other agreements that may from time to time be executed or
delivered in respect of the Obligations.
If an Event of Default shall occur, the aggregate unpaid principal of and
accrued interest on this Note shall become or may be declared to be due and
payable in the manner and with the effect provided in the Agreement.
The undersigned may at their option prepay all or any part of the principal
of this Note before maturity upon the terms provided in the Agreement.
The undersigned makers hereby waive presentment, demand, notice of dishonor,
protest and all other demands and notices in connection with the delivery,
acceptance, performance and enforcement of this Note.
-49-
This instrument shall have the effect of an instrument executed under seal
and shall be governed by and construed in accordance with the laws of The
Commonwealth of Massachusetts (without giving effect to any conflicts of laws
provisions contained therein).
IN WITNESS WHEREOF, the undersigned have caused this Note to be executed by
their duly authorized offices as an instrument under seal as of the day and year
first written above.
The XxXxxxx Company, Inc.
By: Xxxxxxx X. XxXxxxx, Treasurer
XxXxxxx Relocation Services, Inc.
By: Xxxxxxx X. XxXxxxx, Treasurer
Referral Associates of New England, Inc.
By: Xxxxxxx X. XxXxxxx, Treasurer
The XxXxxxx Insurance Agency
By: Xxxxxxx X. XxXxxxx, Treasurer
Hillshire House, Inc.
By: Xxxxxxx X. XxXxxxx, Treasurer
Real Estate Referral, Inc.
By: Xxxxxxx X. XxXxxxx, Treasurer
Dollar Dry Dock Real Estate, Inc.
By: Xxxxxxx X. XxXxxxx, Treasurer
-50-
The Heritage Group, Inc.
By: Xxxxxxx X. XxXxxxx, Treasurer
-51-
EXHIBIT A-3
TERM NOTE
May 8, 1998
$725,000 Boston, Massachusetts
For value received, the undersigned hereby jointly and severally promise to
pay to BANKBOSTON, N.A. (the "Bank"), or order, the principal amount of Seven
Hundred Twenty- Five Thousand Dollars ($725,000), on the dates and in the
amounts set forth in the Agreement referred to below, plus all accrued interest
and other amounts due and owing hereunder or under the Agreement referred to
below. If not sooner paid, the entire principal balance of this Note any accrued
interest in respect thereof shall be due and payable in full on the Term Note
Maturity Date (as defined in the Agreement).
Overdue principal (whether at maturity, by reason of acceleration or
otherwise) and, to the extent permitted by applicable law, overdue interest and
fees or other amounts payable under the Agreement or under this Term Note shall
bear interest from and including the due date thereof until paid, compounded
daily and payable on demand, at the rate set forth in the Agreement. If a
payment of principal or interest hereunder is not made within 10 days of its due
date, the undersigned will also pay on demand a late payment charge equal to 5%
of the amount of such payment. In no event shall the amount contracted for and
agreed to be paid by the Borrowers as interest on this Note exceed the highest
lawful rate permissible under any law applicable hereto.
This Note is issued pursuant to, and entitled to the benefits of, and is
subject to, the provisions of a Second Amended and Restated Credit and Security
Agreement dated as of the date hereof by and among the undersigned, as
borrowers, The XxXxxxx Companies, Inc., as guarantor, and the Bank (as the same
may from time to time be amended, supplemented, modified, restated or extended,
the "Agreement"). All payments or principal of and interest on this Note shall
be payable in immediately available funds at the address of the Bank set forth
in the Agreement. Capitalized terms used herein without definition which are
defined in the Agreement shall have the meanings ascribed to them in the
Agreement.
This Note is subject to prepayment in whole or in part without a premium and
to acceleration on default at the times and in the manner specified in the
Agreement. The makers and all endorsers of this Note hereby waive presentment,
demand, notice of dishonor, protest and all other demands and notices in
connection with the delivery, acceptance, performance or enforcement of this
Note.
This Note shall have the effect of an instrument executed under seal and
shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts (without giving effect to any conflicts of laws
provisions contained therein).
IN WITNESS WHEREOF, the undersigned have caused this Note to be executed by
their duly authorized offices as an instrument under seal as of the day and year
first written above.
The XxXxxxx Company, Inc.
By: Xxxxxxx X. XxXxxxx, Treasurer
-52-
XxXxxxx Relocation Services, Inc.
By: Xxxxxxx X. XxXxxxx, Treasurer
Referral Associates of New England, Inc.
By: Xxxxxxx X. XxXxxxx, Treasurer
The XxXxxxx Insurance Agency
By: Xxxxxxx X. XxXxxxx, Treasurer
Hillshire House, Inc.
By: Xxxxxxx X. XxXxxxx, Treasurer
Real Estate Referral, Inc.
By: Xxxxxxx X. XxXxxxx, Treasurer
Dollar Dry Dock Real Estate, Inc.
By: Xxxxxxx X. XxXxxxx, Treasurer
The Heritage Group, Inc.
By: Xxxxxxx X. XxXxxxx, Treasurer
-53-
EXHIBIT B
REPORT OF CHIEF FINANCIAL OFFICER
The undersigned Chief Financial Officer of the XxXxxxx Companies, Inc.
HEREBY CERTIFIES that:
This Report is furnished pursuant to Section 5.1(d) of the Second Amended
and Restated Credit and Security Agreement dated as of May 8, 1998 by and
between The XxXxxxx Company, Inc. and certain of its affiliates, as borrowers
(the "Borrowers"), The XxXxxxx Companies, Inc., as guarantor (the "Guarantor"),
and BankBoston, N.A. (the "Agreement"). Unless otherwise defined herein, the
terms used in this Report have the meanings given to them in the Agreement.
As required by Section 5.1(a) and 5.1(b) of the Agreement, consolidated
financial statements of the Credit Parties and their Subsidiaries for the
[year/month/quarter] ended , ____ (the "Financial Statements") prepared in
accordance with generally accepted accounting principles consistently applied
accompany this Report. The Financial Statements present fairly the consolidated
financial position of the Credit Parties and their Subsidiaries as at the date
thereof and the consolidated results of operations of the Credit Parties and
their Subsidiaries for the period covered thereby (subject only to normal
recurring year-end adjustments).
The figures set forth in Schedule A and B hereof for determining compliance
with the financial covenants contained in the Agreement are true and complete as
of the date hereof.
The activities of the Credit Parties and their Subsidiaries during the
period covered by the Financial Statements have been reviewed by me and by
agents under my immediate supervision. Based on such review, to the best of my
knowledge and belief, and as of the date of this Report, no Default has
occurred.*
WITNESS my hand this day of , 19 .
----------- --------- --
The XxXxxxx Companies, Inc.
on behalf of all of the Credit Parties
By:
-------------------------------------
Chief Financial Officer
* If a Default has occurred, this paragraph is to be modified with an
appropriate statement as to the nature thereof, the period of existence thereof
and what action the Credit Parties have taken, are taking, or propose to take
with respect thereto.
-54-
SCHEDULE A
to
EXHIBIT B
FINANCIAL COVENANTS
QUARTERLY REPORT
Cash Flow Coverage Ratio
(Section 5.6)
REQUIRED: Not less than 1.25:1.00
ACTUAL:
(i) Consolidated EBITDA for period of four quarters $
minus
(ii) Aggregate taxes paid or required to be paid ($ )
----
minus
(iii)Aggregate amount of Capital Expenditures ($ )
----
Total of line (i) minus lines (ii) and (iii) $
to
Total Debt Service for period of four quarters $
ACTUAL RATIO ____:1.00
Leverage Ratio (Section 5.7)
REQUIRED:
(i) During Fiscal Year 1998 not greater than 3.00:1.00 (ii) During Fiscal
Year 1999 not greater than 2.50:1.00 (iii)During Fiscal Year 2000 and
thereafter not greater than 2.00:1.00
ACTUAL:
(i) Aggregate Indebtedness of the Credit Parties for
Borrowed Money (including capital lease obligations) $
minus
(ii) Aggregate Indebtedness of XxXxxxx Mortgage under the
Mortgage Warehousing Line ($ )
----
Line (i) minus line (ii) $
to
Consolidated EBITDA for period of four fiscal quarters $
ACTUAL RATIO ____:1.00
-55-
EXHIBIT C
BORROWING BASE CERTIFICATE
Date:
ACCOUNTS RECEIVABLE
1. Total Accounts _________
2. Less: Ineligible as of ______*
(a) Over 60 days from purchase and
sale agreement execution date (________)
(b) Amounts due to third parties (________)
(c) Reserve for uncollectible (________)
(d) And other ineligible accounts (________)
3. Total Ineligible Accounts (a+b+c+d) (________)
4. Total Eligible Accounts
(line 1 minus line 3) __________
5. Borrowing Base Availability
(line 4 x 75%) __________
AVAILABILITY CALCULATION
6. Total Availability: lesser of line 5 or $5,000,000
(minus the aggregate amount of principal outstanding
of the Term Loan)
7. Total Debit Balance in Loan Account:
NET AVAILABILITY $__________ **
Said claims, accounts, money, merchandise and security are assigned as
collateral security for indebtedness and liabilities of the undersigned to its
Bank as more fully provided and pursuant to the Second Amended and Restated
Credit and Security Agreement by and among The XxXxxxx Company, Inc. and certain
of its affiliates, borrowers, The XxXxxxx Companies, Inc., as Guarantor and
BankBoston, N.A. (the "Credit Agreement") and with and subject to all the
covenants, terms and provisions thereof. Furthermore, the calculations set forth
herein have been made assuming the foregoing, and have been made in accordance
with the definitions set forth in the Credit Agreement and with the other
applicable provisions of the Credit Agreement.
The XxXxxxx Companies, Inc.
on behalf of all of the Credit Parties
By:________________________________________
Title:_____________________________________
* Ineligible calculated weekly
** Any sum which is a negative number must be repaid immediately or it is an
immediate Event of Default under the Credit Agreement.
-56-
EXHIBIT D
FORM OF NOTICE OF BORROWING
THE XXXXXXX COMPANIES, INC.
00 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
__________ , 1998
BANKBOSTON, N.A.
000 Xxxxxxx Xxxxxx
Mail Code 01-07-07
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Vice President
Re: Notice of Borrowing under Credit Agreement
Ladies and Gentlemen:
Reference is made to the Second Amended and Restated Credit Agreement dated
as of May 8, 1998 (the "Agreement") among The XxXxxxx Company, Inc. and certain
of its affiliates, as borrowers (the "Borrowers"), The XxXxxxx Companies, Inc.,
as guarantor (the "Guarantor"), and BankBoston, N.A., as lender (the "Bank"). In
accordance with Section [2.1/2/2] of the Agreement the Borrower hereby requests
that the Bank make the following [Revolving/Acquisition Facility] Loan to the
Borrowers:
(1) Amount requested: $__________;
(2) Date of Borrowing: [date]
(3) Type of Borrowing: [Base Rate][LIBOR Rate](1)
(4) [The Interest Period applicable to said Loan will be [one] [two] [three]
[six] months.](2)
(5) [Said Loan represents a conversion/continuation of the [Base Rate]
[LIBOR] Loan in the same amount made on .](3)
(6) The facts contained or referred to in Subsections (a) and (b) of Section
3.2 of the Agreement are true and accurate on and as of the effective date of
the Loan as though made at and as of such date (except to the extent that such
representations and warranties expressly relate to an earlier date).(4)
Terms used above in this Notice of Borrowing are as defined in the
Agreement. The foregoing Notice of Borrowing is in accordance with the
applicable provisions of the Agreement.
[Date] ____________________________________
Name and Title of Financial Officer
(1)To be inserted in any request for a Revolving Loan.
(2)To be inserted in any request for a LIBOR Loan.
(3)To be inserted in any request for a conversion of a Base Rate Revolving Loan
or a continuation of a LIBOR Loan.
(4)To be completed for any new Loan or any conversion or continuation of an
existing Loan.
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