EXECUTION
COMMERCIAL LOAN AGREEMENT
By and Among
BOSTON BIOMEDICA, INC., BTRL CONTRACTS AND
SERVICES, INC., BBI CLINICAL LABORATORIES, INC. and
BBI-SOURCE SCIENTIFIC, INC.
as the Borrower
and
THE FIRST NATIONAL BANK OF BOSTON
as the Lender
Dated: As of March 28, 1997
COMMERCIAL LOAN AND SECURITY AGREEMENT
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TABLE OF CONTENTS
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Page
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Preamble......................................................................................... 1
Section 1 - Definitions; Use of Terms; Incorporation by Reference................................ 2
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Section 2 - Establishment of Revolving Line of Credit 6
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2.1 Revolving Line of Credit 6
2.2 Interest Rate on Loans 7
2.3 Repayment of Loans 7
2.4 Security for the Loans 7
2.5 Use of Proceeds 7
2.6 Loan Advances 7
2.7 Other Advances and Payments 7
2.8 Loan Statements 8
2.9 Review of Line of Credit 8
Section 3 - Representations, Covenants and Warranties 9
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3.1 General Representations, Covenants and Warranties 9
3.1.1 Business; Supplementary Information Regarding Borrower 9
3.1.2 Due Organization and Existence; Authorization 9
3.1.3 Articles of Organization; Stock; Accurate Records 10
3.1.4 Binding Documents; Violation of Other Agreements 10
3.1.5 Title To Assets; Security Interests and Mortgages; Leases;
Royalties; etc. 10
3.1.6 Investments 10
3.1.7 Litigation; Outstanding Orders 11
3.1.8 Financial Statements Delivered 11
3.1.9 Other Liabilities; Tax Returns; No Adverse Changes 11
3.1.10 No Agency Between Borrower and Lender 11
3.1.11 Regulation U 11
3.1.12 ERISA 12
3.1.13 Necessary Permits and Licenses 12
3.1.14 Governmental Approvals Not Required 12
3.1.15 Adequate Financing 12
3.1.16 No Event of Default 13
3.1.17 Compliance with Leases 13
3.1.18 President and Chief Executive Officer 13
3.1.19 Compliance with Certain Environmental Laws 13
3.1.20 Recent Changes of Name or Structure 13
3.1.21 Payment of Wages 14
3.2 Certain Affirmative Covenants 14
3.2.1 Payment of Obligations 14
3.2.2 Books and Records 14
3.2.3 Inspection 14
3.2.4 Commercial Purposes 14
3.2.5 Notice of Adverse Matters 14
3.2.6 Principal Lending Business 14
3.2.7 Maintenance of Corporate Existence; Compliance with Laws 15
3.2.8 Payment of Taxes and Filing of Returns 15
3.2.9 Maintenance of Property and Assets 15
3.2.10 Collection Costs; Legal Fees; etc. 15
3.2.11 Insurance 16
3.2.12 Further Agreements; Compliance with Other Agreements;
Payment of Other Obligations; Tax Returns; Notice of Litigation
and of Events of Default 16
3.2.13 Certain Environmental Matters 17
3.2.14 Changes in Master Exhibit 18
3.2.15 Key Man Life Insurance 18
3.3 General Negative Covenants 18
3.3.1 Other Debt 18
3.3.2 Payment of Dividends 19
3.3.3 Loans by the Borrower 19
3.3.4 Investments 19
3.3.5 Mergers, etc. 19
3.3.6 Sales of Assets 19
3.3.7 Negative Pledge 19
3.3.8 No Liens; Permitted Encumbrances 20
3.3.9 Continuance of Business 21
Section 4 - Financial and Reporting Covenants 21
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4.1 Reporting Covenants 21
4.1.1 Quarterly Financial Statements 21
4.1.2 Annual Financial Statements 21
4.1.3 Officer's Certificate 22
4.1.4 Other Information 22
4.2 Financial Covenants 23
Section 5 - Conditions of Closing 24
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5.1 Conditions of Closing 24
5.2 Date References 25
Section 6 - Events of Default 25
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Section 7 - Remedies 28
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7.1 General Remedies 28
7.2 Cumulative Remedies 28
Section 8 - Waiver; Termination 28
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8.1 Waiver By The Borrower 28
8.2 Lender's Option To Waive 29
Section 9 - Miscellaneous 29
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9.1 Deposits As Collateral; Set-Off 29
9.2 Survival of Covenants; Binding Effect 29
9.3 Termination of Agreement 30
9.4 Conflict of Terms 30
9.5 Prior Discussions; Amendments in Writing; Counterparts;
Filing As Financing Statement 30
9.6 General Indemnification 31
9.7 Destruction of Documents; Jurisdiction 31
9.8 Notices 31
9.9 Application of Proceeds 32
9.10 Continuance of Defaults 32
9.11 Severability 32
9.12 Headings 32
9.13 Governing Law; Sealed Instrument 32
9.14 Force Majeure 33
9.15 Interpretation of Agreement 33
Master Exhibit
Exhibit 4.1.3 Officer's Compliance Certificate
Exhibit 4.2.1
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COMMERCIAL LOAN AGREEMENT
This Commercial Loan Agreement (this "Agreement") is dated as of March 28,
1997, and is by and among BOSTON BIOMEDICA, INC. ("BBI"), BTRL CONTRACTS AND
SERVICES, INC. ("BTRL"), BBI CLINICAL LABORATORIES, INC. ("BBICL"), formerly
known as BBI-NORTH AMERICAN CLINICAL LABORATORIES, INC. and BBI-SOURCE
SCIENTIFIC, INC. ("BSS"), each of which is a Massachusetts corporation validly
created, legally existing and in good standing under the laws of the
Commonwealth of Massachusetts and each of which has its "Notice Address" at 000
Xxxx Xxxxxx, Xxxx Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000 (BBI, BTRL, BBICL and BSS,
together with their respective successors and assigns, are collectively referred
to herein as the "Borrower") and THE FIRST NATIONAL BANK OF BOSTON, a national
banking association having an office and "Notice Address" at Bank of
Xxxxxx-Xxxxxxxxx Xxxxx, X.X. Xxx 00000, 000 Xxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxxxxxx 00000-0000 (together with its successors and assigns, the
"Lender").
WHEREAS, BTRL, BBICL and BSS are each wholly-owned subsidiaries of BBI,
formed to acquire certain assets determined to be useful and necessary to the
business conducted by BBI; and
WHEREAS, the Borrower desires to induce the Lender to lend certain sums and
otherwise to extend credit or grant financial accommodations, all to or for the
benefit of the Borrower pursuant to and in accordance with the terms of this
Agreement; and
WHEREAS, the Lender is willing to enter into this Agreement and grant such
financial accommodations to or for the benefit of the Borrower in accordance
with the terms of this Agreement only if the Borrower shall make and enter into
certain agreements, covenants, representations and warranties as set forth
herein and as further set forth and contained in the Financing Instruments (as
hereinafter defined), all of the terms and conditions of which Financing
Instruments are hereby incorporated herein by reference;
NOW THEREFORE, in order to induce the Lender to lend certain sums, to extend
credit and to grant financial accommodations, all to or for the benefit of the
Borrower, and in consideration thereof and in consideration of the mutual
covenants herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Borrower hereby
represents and warrants to the Lender, and hereby covenants and agrees with the
Lender, all as follows:
SECTION 1
DEFINITIONS; USE OF TERMS;
INCORPORATION BY REFERENCE
In this Agreement:
1.1 "ACCOUNTS" shall mean and refer to any and all of the Borrower's rights
to payment for goods sold or leased or for services rendered, which are not
evidenced by an Instrument or Chattel Paper, whether or not such rights have
been earned by performance, and shall include all receivables, notes, drafts,
acceptances, other forms of obligations and "accounts" as defined in the UCC,
all in whatever form and however arising or created;
1.2 "BALANCE SHEET NET WORTH" shall have the meaning given to that term in
Section 4.2(b) below;
1.3 "BANKRUPTCY CODE" shall have the meaning given to that term in
subsection 6.7.1 below;
1.4 "BORROWER" shall have the meaning given to that term in the first
paragraph on the first page of this Agreement;
1.5 "CEO" shall have the meaning given to that term in subsection 3.1.18
below;
1.6 "CLOSING DATE" shall have the meaning given to that term in Section 5.1
below;
1.7 "COMMITMENT EXPIRATION DATE" shall mean the earlier to occur of: (a) the
Maturity Date; (b) the occurrence of an Event of Default hereunder; or (c) upon
termination as provided in Section 9.3 below;
1.8 "CONNECTICUT OFFICE" shall mean 00 Xxxxx Xxxxxxxx Xxxx, Xxx Xxxxxxx,
Xxxxxxxxxxx 00000
1.9 "DEBT SERVICE RATIO" shall have the meaning given to that term in
Section 4.2.5(c) below;
1.10 "DEFAULT" shall mean 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;
1.11 "EQUIPMENT" shall mean all motor vehicles (whether or not subject to
motor vehicle registration), rolling stock, machinery, furniture, office
equipment, plant equipment, fixtures, tools, spare parts, accessories, dies,
molds and all other like goods, property and assets owned now or hereafter by
the Borrower and used in the operation or furtherance of the Borrower's
business; and "equipment" as defined in the UCC;
1.12 "EVENT OF DEFAULT" shall have the meaning given to that term in Section
6 below;
1.13 "FACILITY FEE" shall have the meaning given to that term in subsection
2.4 below;
1.14 "FINANCING INSTRUMENTS" shall mean and refer to any and all agreements
(including this Agreement), Instruments, Documents, and other writings including
without limitation, security agreements, loan agreements, notes, guarantees,
mortgages, deeds of trust, collateral assignments, subordination agreements,
contracts, notices, leases, financing statements and all other written matter,
whether heretofore, now, or hereafter executed by or on behalf of the Borrower
and delivered to the Lender in connection with the transactions described in
this Agreement or contemplated hereby, together with all agreements and
documents referred to therein or contemplated thereby;
1.15 "GAAP" shall mean and refer to generally accepted accounting principles
as adopted in the United States;
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1.16 "INDEMNIFIED PARTY" shall have the meaning given to that term in
subsection 9.6 below;
1.17 "INTEREST RATE PROTECTION CONTRACTS" shall mean interest rate swap
agreements, interest rate collar agreements, options on any of the foregoing and
any other agreements or arrangements designed to provide protection against
fluctuations in interest rates, in each case purchased by the Borrower from a
lender with respect to Loans and approved by the Lender;
1.18 "INVESTMENT" shall mean the purchase or acquisition of any share of
capital stock, partnership interest, evidence of indebtedness or other equity
security of any other Person (including any subsidiary), any loan, advance or
extension of credit (excluding Accounts and costs and estimated earnings in
excess of xxxxxxxx arising in the ordinary course of business) to, or
contribution to the capital of, any other Person (including any subsidiary), any
real estate held for sale or investment, any securities or commodities futures
contracts held, any other investment in any other Person (including any other
Borrower or any subsidiary), and the making of any commitment or acquisition of
any option to make an Investment;
1.19 "INVENTORY" shall mean and refer to any and all of the following owned
by the Borrower: goods, wares, merchandise, raw materials, supplies, components,
work in process, finished goods and all packaging, advertising, shipping
material, labels and other devices, names, or marks affixed thereto for purpose
of selling the same; tangible personal property held by the Borrower for
processing, sale, license, or lease, or furnished or to be furnished by the
Borrower under contracts of sale or service or to be used or consumed in the
Borrower's business; items referred to above which are in transit, returned,
rejected, repossessed or detained; and "inventory" as defined in the UCC;
1.20 "IRC" shall mean and refer to the Internal Revenue Code of 1986, as
amended, and regulations as promulgated and in effect, from time to time,
thereunder;
1.21 "LENDER" shall have the meaning given to that term in the first
paragraph on the first page of this Agreement;
1.22 "LIENS" shall mean and refer to any and all: mortgages, pledges,
security interests, encumbrances, liens, or charges of any kind including, but
not limited to, agreements to give any of the foregoing; conditional sales or
other title retention agreements or devices, or any leases in the nature
thereof; and the filing of, or agreement to give, any financing statement under
the Uniform Commercial Code of any jurisdiction;
1.23 "LINE OF CREDIT MAXIMUM AMOUNT" shall mean and refer to the amount of
Seven Million Five Hundred Thousand and 00/100 Dollars ($7,500,000.00);
1.24 "LOANS" shall have the meaning given to that term in Section 2.1 below;
1.25 "MARGIN STOCK" shall have the meaning given to that term in subsection
3.1.12 below;
1.26 "MARYLAND OFFICE" shall mean 0 Xxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000;
1.27 "MATURITY DATE" shall mean June 30, 1999;
1.28 "NOTE" shall mean that certain Commercial Term Revolving Promissory
Note, dated of even date herewith, from the Borrower, made payable to the order
of the Lender, in the face amount of the Line of Credit Maximum Amount, as the
same may be hereafter amended, modified, substituted, extended or restated, from
time to time;
1.29 "NOTICE ADDRESS" shall have the meaning given to that term in the first
paragraph on the first page of this Agreement;
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1.30 "OBLIGATIONS" shall mean and refer to any and all indebtedness,
liabilities, duties, undertakings, covenants and agreements (including those of
payment or of performance) of the Borrower to the Lender or any affiliate of the
Lender, all of every kind, nature and description, and arising pursuant to the
terms of the Financing Instruments or otherwise, including, without limitation:
1.30.1 the Borrower's liability to repay the Loans, together
with the payment of all interest and other monies due pursuant to the
terms of the Note, and any and all substitutions, renewals, extensions,
amendments and rewritings of the Loans or the Note and all present and
future advances made thereunder and including all Interest Rate
Protection Contracts;
1.30.2 the faithful performance and observance by the Borrower
of all agreements, covenants and conditions contained in this Agreement
and in each of the other Financing Instruments; and
1.30.3 any and all such indebtedness, liabilities, duties,
undertakings, covenants and agreements whether or not the same are: now
existing or hereafter arising; imposed by agreement or by operation of
law; due or not due, absolute or contingent, liquidated or
unliquidated, voluntary or involuntary; evidenced by a writing;
presently contemplated by the parties; the joint or the several
liabilities of the Borrower; direct or indirect; related or unrelated
to the transactions described in or contemplated by the Financing
Instruments; liabilities or undertakings of the Borrower as surety,
guarantor or endorser with respect to obligations of one or more other
parties; specifically described as secured or unsecured; hereafter
acquired by the Lender by assignment, other transfer or operation of
law; the result of any transaction whatsoever between the Borrower and
the Lender; or by reason of any cause of action which the Lender may
have against the Borrower;
1.31 "PERMITTED ACQUISITION" shall mean any domestic corporation,
partnership, limited liability company, joint venture or other form of domestic
entity that is engaged in the business of the Borrower or any business
reasonably related or complimentary thereto.
1.32 "PERMITTED ACQUISITION VENTURE" shall mean any Investment in a
Permitted Acquisition for which (a) the Borrower has provided the Lender, in
advance of such Acquisition, with all of the material information, reports,
financial statements and any other material used by the Borrower to determine
the suitability and prudence of such Investment; and (b) the Borrower has
satisfied the Lender that such Investment will not result in the Borrower
failing to meet any of the Financial Standards contained in subsections 4.2.1,
4.2.2 and 4.2.4 hereof;
1.33 "PERMITTED ENCUMBRANCES" shall have the meaning given to that term in
Section 3.3.8 below;
1.34 "PERSONS" shall mean and refer to any and all individuals,
corporations, partnerships, joint stock associations, business or other trusts,
governments or any agencies or subdivisions thereof, joint ventures, limited
liability companies or partnerships, or other entities or associations
whatsoever;
1.35 "REPORTING REQUIREMENTS" shall have the meaning given to that term in
Section 4.1 below;
1.36 "REVOLVING LINE OF CREDIT" shall have the meaning given to that term in
Section 2.1 below;
1.37 "TANGIBLE NET WORTH" shall have the meaning given to that term in
Section 4.2.5(b) below;
1.38 "TOTAL DEBT" shall have the meaning given to that term in Section
4.2.5(a) below;
1.39 "UCC" shall mean the Uniform Commercial Code as in effect from time to
time in The Commonwealth of Massachusetts;
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1.40 The following terms shall have the respective meanings ascribed to them
in the UCC: "ACCOUNT DEBTOR", "CHATTEL PAPER", "DEPOSIT ACCOUNT", "DOCUMENT",
"FARM PRODUCTS", "GENERAL INTANGIBLES", and "INSTRUMENT";
1.41 Terms defined elsewhere in this Agreement shall have the respective
meanings ascribed to them where so defined;
1.42 All exhibits to this Agreement are hereby incorporated herein by
reference;
1.43 The use of the singular of terms which are defined in the plural shall
mean and refer to any one of the matters or items included in such definition;
and
1.44 Use of the connective "or" is not intended to be exclusive; the term
"may not" is intended to be prohibitive and not permissive; use of "includes"
and "including" is intended to be interpreted as expansive and amplifying and
not as limiting in any way; and pronouns used herein shall be deemed to include
the singular and the plural and all genders.
SECTION 2
ESTABLISHMENT OF REVOLVING LINE OF CREDIT
2.1 Revolving Line of Credit. Subject to all of the terms and conditions
contained in this Agreement and the other Financing Instruments, the Lender
hereby agrees to establish for the benefit of the Borrower a certain revolving
line of credit (the "REVOLVING LINE OF CREDIT"), in the maximum principal amount
of up to the Line of Credit Maximum Amount, as evidenced by and payable as
provided in the Note. All advances of principal under the Revolving Line of
Credit (each such advance is hereinafter referred to as a "LOAN" and
collectively as the "Loans") shall be made in accordance with the provisions of
this Agreement and the Note. The Lender has opened or hereby opens, for and in
the name of the Borrower, loan accounts for the purposes of administering the
Loans.
2.2 Interest Rate on Loans. The principal amount outstanding, from time to
time, of each of the Loans shall bear interest in accordance with the provisions
of the Note.
2.3 Repayment of Loans. Principal and interest under the Loans shall be paid
to the Lender in accordance with the provisions of the Note.
2.4 Facility Fee. The Borrower agrees to pay to the Lender a Facility Fee
(the "FACILITY FEE") of one-quarter of one percent (.25%) per annum of the
amount which equals the average unused portion of the Line of Credit Maximum
Amount during each calendar quarter, or part thereof, that any Loan remains
outstanding. The Facility Fee shall be paid by the Borrower to the Lender on a
calendar quarterly basis, in arrears. The Facility Fee shall be earned when
paid, non-refundable and in addition to all interest and all other amounts due
and payable with respect to the Loans or otherwise pursuant to the Financing
Instruments.
2.5 Use of Proceeds. All of the proceeds of the Loans shall be used to
finance Investments in Permitted Acquisition Ventures and for general corporate
purposes, including, but not limited to, working capital, capital expenditures
and equipment leasing.
2.6 Loan Advances. After the date hereof, Loans shall be made by advances by
the Lender to one or more of the accounts maintained by the Borrower pursuant to
Section 3.2.6 hereof (hereafter, the "Main Operating Account"). Subject to the
terms and conditions hereof, the Lender may make Loans to the Borrower (i) to
cover checks drawn by Borrower on the Main Operating Account and (ii) to cover
other authorized charges whether given
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to the Lender orally, telephonically or in writing and (iii) to cover other
charges due and payable hereunder. As an accommodation to the Borrower, and to
avoid the necessity that the Lender communicate with the Borrower each time
checks are presented for payment against the Main Operating Account, the
Borrower requests the Bank to make a Loan charged to the Loan Account sufficient
to cover checks and other authorized charges on each occasion that the same are
presented. All actions of the Lender in connection with the ordinary
administration of the foregoing are hereby ratified and confirmed and shall be
conclusive and binding upon the Borrower. Each request by the Borrower to Lender
for an advance under the Revolving Line of Credit shall constitute a
representation by the Borrower that as of the date of such request (a) each of
the representations and warranties set forth herein are true, (b) the Borrower
is in compliance with all of the covenants, terms and conditions hereof, and (c)
no event or circumstances exist which constitute or with the lapse of time or
notice, or both, would constitute or result in the occurrence of an Event of
Default (as hereinafter defined).
2.7 Other Advances and Payments. Whether or not the entire amount available
under the Revolving Line of Credit shall have been advanced to or for the
benefit of the Borrower, and whether or not the Loans shall be payable (by
maturity or by acceleration) or an Event of Default shall have occurred under
this Agreement, the Lender shall be entitled (but shall not be obligated and may
not be required) to make, at its sole discretion, additional advances from time
to time:
2.7.1 in payment or reimbursement, as the case may be, of any
and all payments made or amounts owing pursuant to applicable
provisions of the Financing Documents;
2.7.2 to pay the Lender's usual and customary charges for (a)
services rendered by it to the Borrower at the Borrower's request which
charges relate to the Obligations; and (b) charges otherwise required
to be paid by the Borrower pursuant to this Agreement; and
2.7.3 otherwise to or for the benefit of the Borrower, as
requested or consented to by the Borrower, as the Lender may in its
discretion deem proper or expedient;
and each such additional advance shall be a part of the Obligations and shall at
all times be subject to the terms and conditions of this Agreement and secured
as provided in the Financing Instruments.
2.8 Loan Statements. All advances to or for the benefit of the Borrower
pursuant to this Agreement shall be charged to the loan account or accounts
opened in the Borrower's name on the Lender's books. The Lender periodically
shall render to the Borrower statements of such loan account or accounts,
setting forth the daily loan balance and total accrued interest during the
subject period, which, when so rendered, shall be considered prima facie
evidence of the correctness thereof except to the extent that the Lender
receives written notice of any exceptions proposed by the Borrower within a
reasonable time, but in no event later than one hundred twenty (120) days from
the date of such statement. If for any reason the Borrower has not paid interest
charges and/or any fees for services, expenses incurred or other charges owed to
the Lender by the Borrower, the Lender, at its option and discretion, may at any
time or times debit such charges, expenses, and fees to the Borrower's loan
account and such amounts shall be added to the principal amount thereof, or the
Lender may debit such interest, charges and fees, and any other unpaid
Obligations then due, to any deposit or other account of the Borrower at the
Lender. Such debits shall not constitute a waiver of any Event of Default. Any
item received in payment towards the Borrower's outstanding indebtedness which
requires clearance or payment shall not be considered to have been credited
until final clearance and final payment.
2.9 Review of Line of Credit. The Lender agrees (a) to review the Revolving
Line of Credit annually on or before June 30 of each year commencing in 1998, to
determine whether the Maturity Date will be extended for an additional
twelve-month period beyond the Maturity Date then in effect; and (b) to notify
the Borrower of such determination in accordance with the notice provisions of
the Agreement. Notwithstanding the foregoing, any
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determination by the Lender to extend the Maturity Date shall not be binding and
enforceable against the Lender until the execution of an Extension Agreement or
other appropriate documentation, executed by the parties hereto.
SECTION 3
REPRESENTATIONS, COVENANTS AND WARRANTIES
In addition to such other representations, covenants and warranties as are
contained herein, or elsewhere in the Financing Instruments or as have otherwise
been made to the Lender, the Borrower hereby represents, covenants and warrants
that:
3.1 General Representations, Covenants and Warranties.
3.1.1 Business; Supplemental Information Regarding the
Borrower. BBI is engaged in the business of assaying, processing,
manufacturing, selling, and distributing human blood-based products;
BTRL is engaged in the business of biomedical and biotechnical contract
research and services; BBICL is engaged in the business of providing
clinical reference laboratory services; BSS is, or will be, primarily
engaged in the business of developing clinical instrumentation and
biomedical devices for the in vitro diagnostic industry; each of BBI's
and BSS's principal place of business and chief executive office and
mailing address is located at the Notice Address set forth at the
beginning of this Agreement; BTRL's principal place of business and
mailing address is the address of the Maryland Office and BBICL's
principal place of business and mailing address is the address of the
Connecticut Office. The Borrower does not and will not conduct any
business under any trade name or trade style other than the legal names
of BBI, BTRL, BBICL and BSS or as set forth in the Master Exhibit. Set
forth in the Master Exhibit attached hereto are the names and addresses
of the respective officers and members of the Board of Directors of
each Borrower, the name and title of each officer authorized to execute
the Financial Instruments and thereafter deal with the Lender on behalf
of the Borrower, and locations of all the Borrower's other places of
business or at which the Borrower's properties may be kept or located,
which information is true, accurate and complete; the Borrower agrees
to furnish the Lender with written notice within ten (10) days of any
changes in such information, or any additional information necessary to
insure that said Master Exhibit remains true, accurate and complete.
Nothing in this subsection 3.1.1 shall be construed to permit any
action which is otherwise restricted or prohibited pursuant to the
terms of this Agreement.
3.1.2 Due Organization and Existence; Authorization. Each of
BBI, BTRL, BBICL and BSS (a) is duly organized, validly existing and in
good standing under the laws of the Commonwealth of Massachusetts, (b)
has adequate corporate power and authority to own its properties and
assets and to carry on its business activities as and where now
conducted, (c) is qualified to do business as a foreign corporation and
is in good standing in each jurisdiction wherein such qualification is
necessary, and where the failure to so qualify would have a material
adverse effect on the business or property of the Borrower, and (d) has
the corporate power and authority to execute and deliver such of the
Financing Instruments as have been executed by it, and to perform the
Financing Instruments in accordance with the terms thereof.
3.1.3 Articles of Organization; Stock; Accurate Records. The
Articles of Organization and all amendments thereto of each of BBI,
BTRL, BBICL and BSS have been duly filed and are in proper order. All
capital stock issued by BBI, BTRL, BBICL and BSS and currently
outstanding is properly issued, and all books and records of BBI, BTRL,
BBICL and BSS, including but not limited to, the minute book, by-laws
and books of account of each of BBI, BTRL, BBICL and BSS, are accurate
and up-to-date and will be so maintained.
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3.1.4 Binding Documents; Violation of Other Agreements. Each
of BBI, BTRL, BBICL and BSS has taken all steps required by applicable
law to make this Agreement, and each of such Financing Instruments, its
legal, valid and binding obligation enforceable, jointly and severally,
in accordance with its terms, and neither the execution, delivery nor
performance of this Agreement or any of the Financing Instruments is in
violation of any law, the Articles of Organization, Bylaws or other
organizational documents of it, or of any other agreement or instrument
to which it is a party or by which it or any of its assets is or may be
bound, and does not constitute a default under any of the foregoing, or
result in the creation or imposition of a Lien upon any of its
properties or assets other than that in favor of the Lender.
3.1.5 Title To Assets; Security Interests and Mortgages;
Leases; Royalties; etc. The Borrower has title (and good, clear, record
and marketable title in the case of real property) to all assets
reflected in the financial statements hereinafter referred to and
delivered to the Lender, and to all assets acquired since the date of
said financial statements (other than those assets subsequently
disposed of in the ordinary course of business), free of any Lien
except in favor of the Lender and except for the Permitted
Encumbrances.
3.1.6 Investments. The Borrower has no Investment, in equity
or debt, other than short-term, investment grade securities, including
money market funds, except as disclosed in the Master Exhibit.
3.1.7 Litigation; Outstanding Orders. Except as disclosed on
the Master Exhibit attached hereto, there are no actions, suits,
proceedings or investigations pending or, to the knowledge of the
Borrower, any of its agents, servants or employees, threatened against
the Borrower or any of its properties in any court, before any other
tribunal or any federal, state, municipal or other governmental
authority. The Borrower is not in default with respect to any order of
any court, or other tribunal or governmental authority. The execution,
delivery and performance of this Agreement and each of the Financing
Instruments by the Borrower will not constitute a default of any order
of any court, or any other tribunal or governmental authority.
3.1.8 Financial Statements Delivered. The Borrower has
furnished to the Lender its financial statements, including
consolidated balance sheet and statement of profit and loss as at and
for the fiscal year ended December, 1995, as audited by Coopers &
Xxxxxxx, LLP. Said financial statements fairly present the financial
position of the Borrower as at the dates thereof and said statement of
profit and loss fairly presents the results of the operations of the
Borrower for the fiscal years indicated, all in conformity with GAAP
consistently applied.
3.1.9 Other Liabilities; Tax Returns; No Adverse Changes.
Except as may be set forth in the Master Exhibit annexed hereto, (a)
the Borrower has no knowledge of any contingent obligations or
liabilities of the Borrower for taxes or long-term commitments which
are not shown in the balance sheets included in said statements or
noted therein; (b) the Borrower has filed all required tax returns or
extensions therefor and has paid all applicable federal, state and
local taxes shown to be due (other than taxes which may hereafter be
paid without penalty) and the Borrower has no knowledge of any
deficiency or additional assessment in connection therewith for which
no provision has been made on its books; (c) there has been no material
adverse change in the business, properties or condition (financial or
otherwise) of the Borrower since the date of the most recent financial
statement referred to above and (d) the Borrower's Taxpayer
Identification Numbers are 00-0000000 (BBI), 00-0000000 (BTRL),
00-0000000 (BBICL) and BSS has applied for a Taxpayer Identification
Number, which it will promptly supply to the Lender when available .
The Borrower's federal income tax returns have been prepared and filed
for its fiscal year(s) stated in the Master Exhibit.
3.1.10 No Agency Between the Borrower and the Lender. Nothing
herein contained shall be construed to constitute the Borrower as the
Lender's agent for any purpose whatsoever.
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3.1.11 Regulation U. The Borrower does not own, nor has any
present intention of acquiring, any "margin security" as defined in
Regulation U (12 C.F.R. Part 221) of the Board of Governors of the
Federal Reserve System (herein called a "margin security"). None of the
proceeds of the Loans will be used, directly or indirectly, for the
purpose of purchasing or carrying any margin security or for the
purpose of reducing or retiring any indebtedness which was originally
incurred to purchase or carry a margin security or for any other
purpose which might constitute this transaction a "purpose credit"
within the meaning of said Regulation U.
3.1.12 ERISA. The Borrower has not incurred any material
accumulated funding deficiency within the meaning of the Employee
Retirement Income Security Act of 1974, as amended, or incurred any
material liability to the Pension Benefit Guaranty Corporation
established under such Act (or any successor thereto under such Act),
nor does the Borrower foresee that it will incur any such material
accumulated funding deficiency or material liability in the future, in
connection with any employee benefit plan established or maintained by
the Borrower. The making of the Loans will not involve any prohibited
transaction within the meaning of the Employee Retirement Income
Security Act of 1974 or Section 4975 of the Internal Revenue Code, as
amended. There are no facts known to the Borrower which create, or in
the future may (so far as the Borrower can now foresee) create, any
withdrawal or other liability of the Borrower under the Multi-employer
Pension Plan Amendment Act of 1980.
3.1.13 Necessary Permits and Licenses. The Borrower possesses
all franchises, rights, certificates, variances, licenses, permits and
other authorizations, consents and approvals from all administrative,
regulatory or governmental bodies and all patents, trademarks, service
marks, trade names, copyrights, licenses and other rights, in each
case, free from burdensome restrictions, that are necessary in any
material respect for the ownership, maintenance and operation of its
business, properties and assets, and the Borrower is not in violation
of any thereof in any material respect.
3.1.14 Governmental Approvals Not Required. Neither the nature
of the Borrower nor its business or property, nor any relationship
between or among the Borrower and any other Person is such as to
require any consent, authorization, waiver, approval or other action by
or any notice to or filing with any court or administrative, regulatory
or governmental body, including, without limitation, government
agencies, offices and instrumentalities with which the Borrower has
contracts, in connection with the execution and delivery by the
Borrower of this Agreement or the other Financing Instruments or the
fulfillment of or compliance by the Borrower with, or the enforcement
by the Lender of, the terms and provisions hereof or thereof.
3.1.15 Adequate Financing. The Borrower has no reason to
believe that the proceeds of the Loans, together with such other
sources of funds as are now directly and immediately available to the
Borrower, will not be adequate to finance its business operations for
the term of the Loans.
3.1.16 No Event of Default. As of the date hereof, there does
not exist any Event of Default or any event which, but for the giving
of notice or the lapse of time or both, would constitute an Event of
Default under this Agreement, any of the Financing Instruments or under
the provisions of any instrument evidencing any indebtedness of the
Borrower to any other Person.
3.1.17 Compliance with Leases. The Borrower enjoys peaceful
and undisturbed possession as lessee under all leases necessary in any
material respect for the operation of its business or of its properties
and assets, none of which contains any provisions which might
materially affect or impair the operation of its business or such
properties and assets. All such leases are valid and subsisting and are
in full force and effect.
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3.1.18 President and Chief Executive Officer. Xxxxxxx X.
Xxxxxxxxxx shall continue to perform the traditional functions of
President and chief executive officer of the Borrower and shall
continue to exercise the traditional authority of such officer. In
addition, while any Obligations remain outstanding, BBI shall continue
to own one hundred percent (100%) of the issued and outstanding capital
stock of BTRL, BBICL and BSS.
3.1.19 Compliance with Certain Environmental Laws. Neither the
Borrower, nor any Person for whose conduct the Borrower is responsible,
owns, occupies or operates, or has ever owned, occupied or operated a
site or vessel on which has been stored any hazardous material or oil,
without compliance with all statutes, regulations, ordinances,
directives, and orders of every federal, state, municipal and other
governmental authority which has or claims jurisdiction relative
thereto (the terms "site", "vessel", and "hazardous material",
respectively, as used herein include the definitions of those terms in
Massachusetts General Laws, Ch. 2lE); neither the Borrower, nor any
Person for whose conduct the Borrower is responsible, has ever disposed
of, transported, or arranged for the transport of any hazardous
material or oil without compliance with all such statutes, regulations,
ordinances, directives, and orders; and neither the Borrower, nor any
Person for whose conduct the Borrower is responsible, has ever been
legally responsible for any release or threat of release of any
hazardous material or oil; received notification of any potential or
known release or threat of release of any hazardous material or oil
from any site or vessel owned, occupied or operated by the Borrower, or
any Person for whose conduct the Borrower is responsible, or of the
incurrence of any expense or loss in connection with the assessment,
containment, or removal of any release or threat of release of any
hazardous material or oil from any such site or vessel.
3.1.20 Recent Changes of Name or Structure. Except for BBICL,
the Borrower has not within the preceding four (4) months changed its
name, identity or corporate structure.
3.1.21 Payment of Wages. The Borrower represents and warrants
that all currently owed wages to employees have been paid, and agrees
and covenants that all wages to employees will be paid as and when due.
3.2 Certain Affirmative Covenants.
3.2.1 Payment of Obligations. The Borrower will duly and
punctually pay or cause to be paid, and perform or observe, or cause to
be performed or observed, as the case may be, all of the Obligations
and will pay and perform or observe, or cause to be paid, performed or
observed all other duties or liabilities of any kind of the Borrower to
the Lender, under or as provided in the Financing Instruments, or
otherwise by agreement or applicable law.
3.2.2 Books and Records. The Borrower will maintain its
financial books and records in an accurate, up-to-date, complete and
standardized fashion in accordance with GAAP consistently applied, and
in accordance with any state or federal regulatory requirements
applicable to the Borrower's business or activities.
3.2.3 Inspection. The Borrower will, at all reasonable times
during regular business hours, and upon reasonable advance notice, make
available in its offices, and shall allow the Lender, at the Lender's
expense (unless a Default shall have occurred, in which event such
activities shall be at the Borrower's expense), access to, all of the
Borrower's books and records for inspection, audit, examination and
copying by the Lender and the Lender's representatives, and the
Borrower will, at all reasonable times, permit entry by the Lender upon
the Borrower's premises, including the Maryland Office and the
Connecticut Office, for purposes of inspection of the properties and
assets of the Borrower by the Lender and the Lender's representatives
and agents.
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3.2.4 Commercial Purposes. All advances under the Loans shall
be used exclusively for the Borrower's business purposes and operations
and shall not in any respect be used for personal, family or household
purposes.
3.2.5 Notice of Adverse Matters. The Borrower will,
immediately upon learning thereof, report to the Lender all matters
materially adversely affecting the Borrower's business or financial
condition or assets or property, including, without limitation, any
damage or destruction of any material amount of the Borrower's assets
by fire or other casualty, whether or not insured against.
3.2.6 Principal Lending Business. The Borrower will use the
Lender as its sole lender of account and depository for its main
operating accounts (except for investment accounts); provided however
that BTRL, BBICL and BSS may maintain checking accounts at banks other
than the Lender for purposes of handling their accounts payable and
payroll.
3.2.7 Maintenance of Corporate Existence; Compliance with
Laws. The Borrower will maintain and keep in full force its corporate
existence and good standing and comply with all laws, regulations and
orders of the United States and of any state or states, and other
political subdivision thereof, and of any other governmental authority
which may have jurisdiction over the Borrower or its properties or
businesses.
3.2.8 Payment of Taxes and Filing of Returns. The Borrower
will pay when due all taxes, including without limitation all real and
personal property taxes, assessments and charges and all franchise,
income, unemployment, old age benefit, withholding, sales and other
taxes assessed against it or any of its properties, and otherwise
payable by it, at such times and in such manner as is necessary to
prevent any penalty from accruing or any Lien or charge from attaching
to its properties. The Borrower shall prepare and file when due all
federal, state and local tax, informational and other governmental
returns, reports, extensions, and filings, as may be applicable to the
Borrower. The provisions of this subsection, however, shall not
preclude the Borrower from contesting in good faith and by expeditious
process any such tax, and the Borrower shall not be in default under
this subsection by reason of the existence of a Lien for taxes not then
due, all provided that: (a) an adequate reserve therefor is maintained
on the books of the Borrower; (b) the Lender has been notified in
writing by the Borrower of such contest; (c) the enforcement of any and
all Liens for non-payment of such taxes is effectively stayed; (d) the
Lender is reasonably satisfied that the Borrower has reasonable basis
for such contest or dispute; and (e) the Borrower shall immediately pay
the full amount of such charges and claims in the event the Borrower's
contest or dispute is unsuccessful.
3.2.9 Maintenance of Property and Assets. The Borrower will
safeguard, protect and preserve its property and assets for the benefit
of the Lender, will keep its property and assets free from any adverse
lien, security interest or encumbrance, will keep all tangible property
in good working order and repair, will preserve all beneficial contract
rights, will take commercially reasonable steps to collect all of its
Accounts, and will not waste or destroy any of its property or assets
or any part thereof; and the Borrower will otherwise preserve, maintain
and protect its rights and keep its property and assets in good repair,
working order and condition, and capable of identification, and make
(or cause to be made) all needful and proper repairs or renewals,
replacements, additions and improvements thereto, and shall use its
assets only in the ordinary course of business.
3.2.10 Collection Costs; Legal Fees; etc. The Borrower agrees
to pay, and to reimburse the Lender, on demand, for all fees, costs and
expenses (including, without limitation, attorneys' reasonable fees and
expenses) incurred or paid by the Lender in connection with the
preparation, negotiation, interpretation or amendment of this
Agreement, and of any or all of the Financing Instruments, and of any
other instrument, agreement or document executed and delivered pursuant
thereto or in connection therewith, and for any and all such fees,
costs and expenses incurred in connection with collection of the
Obligations or the
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enforcement of the Lender's rights and remedies under this Agreement or
any of the Financing Instruments or otherwise against the Borrower, or
in the defense of any action against the Lender with respect to the
Lender's rights or remedies in respect of any Obligation; and all of
the foregoing fees, costs, and expenses shall be part of the
Obligations secured by this Agreement, and the other Financing
Instruments.
3.2.11 Insurance. The Borrower will maintain insurance at all
times with financially sound and reputable companies as are reasonably
satisfactory to the Lender, in such amounts and against such risks as
are customarily insured against by businesses operating in a similar
line of business in a similar area, and consistent with sound business
practice, in no event less than the greater of (a) the amount required
to avoid coinsurance or (b) the total aggregate outstanding principal
indebtedness owing by the Borrower to the Lender, including without
limitation casualty insurance covering the Borrower's property and
assets against the hazards of fire, flood, sprinkler leakage, burglary,
theft, pilferage, loss in transit, those hazards covered by extended
coverage, and such other hazards as the Lender may require, all such
insurance to be in such form, for such periods and with such companies
as shall be reasonably acceptable to the Lender. All premiums thereon
shall be paid by the Borrower and if the Borrower fails to do so, the
Lender may at its option (but without obligation) procure such
insurance and charge the cost to the Borrower's Main Operating Account;
provided, however, that any such payment by the Lender shall not
constitute satisfaction of the Borrower's obligations with respect to
payment hereunder, or a waiver by the Lender of any Event of Default
with respect to such non-payment. In order to evidence compliance with
the insurance coverages required under this Section 3.2.11, the
Borrower shall deliver to the Lender one or more certificates of
insurance for all such casualty insurance policies and endorsements
thereto. Annually thereafter, the Borrower shall deliver certificates
of such insurance coverages to the Lender, along with satisfactory
evidence of general liability, products liability, workmens
compensation and other insurance coverage, in form and substance
satisfactory to the Lender.
3.2.12 Further Agreements; Compliance With Other Agreements;
Payment of Other Obligations; Tax Returns; Notice of Litigation and of
Events of Default.
The Borrower will:
3.2.12.1 from time to time execute and deliver or
cause to be executed and delivered, and furnish to the Lender
such other agreements, documents, instruments or statements,
and do or cause to be done such other acts as the Lender may
reasonably request, to effect, confirm and secure to the
Lender all rights and advantages intended by this Agreement
and the Financing Instruments;
3.2.12.2 comply with all leases, and with all other
agreements to which the Borrower is a party if a default under
any such agreement could materially adversely affect any of
the Borrower's property and assets;
3.2.12.3 generally pay all other debts and
liabilities as they become due (except for liabilities, other
than the Obligations, being contested in good faith for which
adequate provision has been made on the books of the Borrower,
provided that all enforcement proceedings are effectively
stayed pending such contest) and not permit the acceleration
of any indebtedness owed by the Borrower to any Person; and
3.2.12.4 give written notice to the Lender within ten
(10) days of the occurrence thereof of any litigation filed by
or against the Borrower which claims in connection therewith
exceed, either individually or when aggregated with other
existing litigation filed by or against the Borrower, the sum
of Twenty-Five Thousand Dollars ($25,000), and the occurrence
or existence of any Event of Default hereunder, or the
existence of any situation or state of facts which, either
with notice or
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lapse of time, or both would constitute an Event of Default
hereunder, and the action the Borrower has taken or proposes
to take with respect thereto, all provided that the receipt of
such notice shall not limit or impair, in any way the Lender's
rights hereunder.
3.2.13 Certain Environmental Matters. The Borrower shall:
3.2.13.1 not store (except in compliance with all
laws, ordinances, and regulations pertaining thereto), or
dispose of any hazardous material or oil on any site or vessel
owned, occupied, or operated by the Borrower or by any Person
for whose conduct the Borrower is responsible;
3.2.13.2 neither directly nor indirectly transport or
arrange for the transport of any hazardous material or oil
except in compliance with all laws, ordinances and regulations
pertaining thereto;
3.2.13.3 provide the Lender with written notice: (a)
upon the Borrower's obtaining knowledge of any potential or
known release, or threat of release, in violation of any
federal, state or local law, ordinance or regulation
pertaining thereto, of any hazardous material or oil at or
from any site or vessel owned, occupied or operated by the
Borrower, or by any Person for whose conduct the Borrower is
responsible or whose liability may result in any lien on any
Collateral; (b) upon the Borrower's receipt of any notice to
such effect from any federal, state or other governmental
authority; or (c) upon the Borrower's obtaining knowledge of
any incurrence of any expense or loss by such governmental
authority in connection with the assessment, containment or
removal of any hazardous material or oil for which expense or
loss the Borrower may be liable or for which expense a Lien
may be imposed on any Collateral.
3.2.14 Changes in Master Exhibit. The Borrower shall promptly
notify the Lender in writing of any changes in or additions to the
information set forth in the Master Exhibit.
3.2.15 Key Man Life Insurance. So long as any of the
Obligations remain outstanding, the Borrower agrees to maintain life
insurance on the life of Xxxxxxx X. Xxxxxxxxxx providing for a net
payment in cash upon the death of said Xxxxxxx X. Xxxxxxxxxx in an
amount of not less than One Million Dollars ($1,000,000), and the
Borrower shall pledge or collaterally assign such policy or policies to
the Lender and, at all times, maintain such pledge or collateral
assignment. Such insurance coverage shall include a disability rider in
the full amount of such coverage. The Lender hereby agrees to review on
an annual basis such obligation to provide such life insurance to
determine whether to waive the same, which determination shall be made
in the Lender's sole discretion, and shall include consideration of the
financial performance of the Borrower.
3.3 General Negative Covenants.
3.3.1 Other Debt. The Borrower will not issue any evidence of
indebtedness or create, or incur, assume, guarantee, become
contingently liable for or suffer to exist, any indebtedness in excess
of an aggregate of Five Hundred Thousand Dollars ($500,000) (other than
indebtedness to the Lender) outstanding at any one time, without the
prior written consent of the Lender which consent will not be
unreasonably withheld or delayed; provided, however, that the Borrower
may incur liabilities which are incurred or arise in the ordinary
course of the Borrower's business, including purchase commitments for
materials and supplies, without the prior written consent of the Lender
but shall seek consent of the Lender, which consent shall not be
unreasonably withheld or delayed, for liabilities incurred or arising
with respect to money borrowed or for the purchase or lease of fixed
assets. The Borrower shall not enter into or participate in any
agreement, arrangement or transaction with any Person without the prior
written consent of the Lender, if the effect of such agreement,
arrangement or transaction has, or could reasonably be expected in the
future to have, the effect of (i) rendering the Borrower either
primarily or contingently liable for any indebtedness
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or other obligation of any Person (ii) transferring any asset of the
Borrower to or for the benefit of any Person (except as may be
otherwise expressly permitted by this Agreement); or (iii) subjecting
any of the Borrower's property or assets to any lien in favor of any
third party (other than Permitted Encumbrances), including but not
limited to any creditor or obligee of any Person.
3.3.2 Payment of Dividends. The Borrower will not pay any
dividends either in cash or kind on any class of its stock nor make any
distribution on account of their stock, nor redeem, purchase or
otherwise acquire directly or indirectly any of their stock, without
prior written notice to and written consent of the Lender except in
compliance with this subparagraph 3.3.2.
3.3.3 Loans By the Borrower. Other than as disclosed on the
Master Exhibit, the Borrower will not make any loan or advances to any
Person, including, without limitation, its officers and employees.
3.3.4 Investments. Without the prior written consent of the
Lender, the Borrower will not make any Investments other than short
term, investment grade securities, including money market funds, and
other than Permitted Acquisition Ventures.
3.3.5 Mergers, etc. The Borrower will not merge or consolidate
or be merged or consolidated with or into any other Person, or be a
party to any reorganization, change in legal structure or any sale,
lease, transfer or other disposition of all or substantially all of its
assets.
3.3.6 Sales of Assets. The Borrower will not sell, lease, or
dispose of any of its property or assets except for sales of Inventory
in the ordinary and usual course of its business, and for Equipment no
longer needed in the operation of its business, so long as the Borrower
receives therefor a sum substantially equal to such Equipment's fair
value.
3.3.7 Negative Pledge. Without the prior written consent of the Lender,
the Borrower will not:
3.3.7.1 grant, create, incur, assume or suffer to
exist, or permit any Person, whether by means of a power of
attorney or otherwise, to grant, create, incur, assume or
suffer to exist, any Lien, upon or with respect to, any of the
Borrower's property or assets except for Permitted
Encumbrances; or
3.3.7.2 sign or file, or permit any Person, whether
by means of a power of attorney or otherwise, to sign or file,
under the Uniform Commercial Code of any jurisdiction, any
financing statement which names the Borrower as a debtor, or
sign, or permit any Person, whether by means of a power of
attorney or otherwise, to sign any security agreement
authorizing any secured party thereunder to file such
financing statement, except in connection with Permitted
Encumbrances; or
3.3.7.3 agree with any other Person that the Borrower
will not undertake activities prohibited pursuant to
sub-subsections 3.3.7.1 and 3.3.7.2 hereof.
To the extent that the Borrower violates the provisions of
this subsection 3.3.7 by granting or assigning in favor of any Person,
a Lien, upon or with respect to, any of the Borrower's property or
assets, such Lien is hereby deemed to be a Lien in favor of, and for
the sole benefit of, the Lender, until all of the Obligations have been
paid in full, and in the event that any Person receives any sums from,
or as a result of, the sale, liquidation or distribution of all or any
portion of the Borrower's property or assets on account of such Lien,
such sums are hereby deemed to be held in trust by such Person for the
sole benefit of the Lender, and shall be promptly delivered to the
Lender upon receipt, and shall not be commingled with any other funds
of such Person.
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3.3.8 No Liens; Permitted Encumbrances. The Borrower will not
grant or assume or suffer to exist any Lien with respect to any of its
assets or property, tangible or intangible, whether now owned or
hereafter acquired, except for Liens granted to the Lender pursuant to
this Agreement, and except for the following (collectively, the
"Permitted Encumbrances"): (a) liens in respect of taxes, fees,
assessments and other governmental charges not yet due and payable, or
with respect to which the validity thereof is currently being contested
in good faith by appropriate proceedings in accordance with the
provisions of this Agreement; (b) landlord's liens in respect of rent
not in default or Liens in respect of pledges or deposits under
worker's compensation, unemployment insurance, social security laws or
similar legislation or in connection with appeal and similar bonds
incidental to litigation, mechanics', laborers', and materialmen's and
similar liens, if the obligations secured by such liens are not then
delinquent, and liens securing statutory obligations incidental to the
conduct of the business of the Borrower which do not in the aggregate
materially detract from the value of the property of the Borrower or
materially impair the use thereof in the operation of their respective
businesses; (c) judgment liens which shall not have been in existence
for a period longer than thirty (30) days after the creation thereof
(provided no foreclosure or execution action shall have been commenced)
or if a stay of execution shall have been obtained for a period longer
than thirty days after the expiration of such stay (provided no
foreclosure or execution action shall have yet been commenced) or
judgment liens for which the Borrower has obtained a bond in favor of
the judgment holder in the full amount of the lien and which bond is
otherwise satisfactory to Lender; (d) the security interests, mortgages
or Liens, if any, described in the Master Exhibit annexed hereto; and
(e) Liens otherwise permitted pursuant to Section 3.3.1 hereof.
3.3.9 Continuance of Business. The Borrower will not engage in
any business other than the businesses in which it is currently engaged
or a business reasonably allied thereto, and the Borrower will continue
to conduct and operate its business actively and in good faith.
SECTION 4
FINANCIAL AND REPORTING COVENANTS
4.1 Reporting Covenants. The Borrower agrees to provide the Lender with the
reports, statements, certificates and information set forth in this Section 4,
all of which are referred to as the "Reporting Requirements".
4.1.1 Quarterly Financial Statements. The Borrower will
furnish to the Lender, within forty-five (45) days after the close of
each calendar quarter of its fiscal year, consolidated and
consolidating (except the last in each fiscal year) financial
statements, including balance sheets, and statements of profit and loss
and statements of cash flows reflecting the financial condition of the
Borrower at the end of such period and the results of its operations
for such period and for the period from the beginning of the current
fiscal year to the end of such period, in comparative form with figures
for the corresponding periods of the previous fiscal year, accompanied
by a certificate by the Borrower's chief financial officer or President
to the effect that such financial statements fairly present such
financial condition and results of operations as of the end of and
during such period, in accordance with GAAP consistently applied,
subject only to year-end adjustments and audit. Such quarterly
statements may be furnished to the Lender in the form of the Borrower's
quarterly filings with the Securities and Exchange Commission ("SEC")
under the Securities Exchange Act of 1934, as amended (the "'34 Act"),
on Form 10-Q.
4.1.2 Annual Financial Statements. The Borrower will furnish
the Lender, within ninety (90) days after the close of each fiscal
year, consolidated and consolidating financial statements, including
balance sheets, statements of profit and loss, statements of cash
flows, and statements of changes in shareholders' equity, reflecting
the financial condition of the Borrower at the end of such fiscal year
and the results of its
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operations during such fiscal year (in each case setting forth in
comparative form the corresponding figures for the preceding year) and,
in the case of the consolidated financial statements, audited and
reported upon (in form generally recognized as "unqualified") by
Coopers & Xxxxxxx, LLP, or such other independent certified public
accountant of nationally recognized standing, prepared in accordance
with GAAP, applied consistently in the preparation thereof and with
prior periods, and accompanied by a certificate by the Borrower's chief
financial officer or president that such financial statements fairly
present such financial condition and results of operations as of the
end of and during such period; together with, upon request of the
Lender, an opinion of such certified public accountant that to its
knowledge there has occurred no event which constitutes, or which with
the lapse of time or giving of notice or both would constitute an Event
of Default hereunder, or, if the contrary appears to be true, a
statement of such Event of Default and the nature thereof. Such annual
statements may be furnished to the Lender in the form of the Borrower's
annual filings with the SEC under the '34 Act on Form 10-K.
4.1.3 Officer's Certificates. The Borrower will, upon request
of the Lender but in any event within forty-five (45) days of the end
of each calendar quarter, deliver to the Lender an officer's
certificate signed by its President or chief financial officer
certifying that: (a) the signer has reviewed the relevant terms of the
Financing Instruments and is familiar with the operations and financial
condition of the Borrower; and (b) there is in existence no Event of
Default described in any of the Financing Instruments and no event
which, with the giving of notice or lapse of time, or both, would
result in the occurrence of an Event of Default and the Borrower is in
complete compliance as of the date of such certificate with the
Financial Standards, as demonstrated in such certificate. In the event
of a continuing Event of Default or a continuing condition which, with
the giving of notice or lapse of time, or both, would result in the
occurrence of an Event of Default, the Borrower shall note in such
certificate the nature and period thereof and the action which has been
taken, is being taken or is proposed to be taken with respect thereto,
provided that no such notice, action or proposed action shall affect
Lender's rights hereunder with respect to any Default or Event of
Default. The form of officer's certificate required by this subsection
is attached to this Agreement as Exhibit 4.1.3.
4.1.4 Other Information. In addition to the foregoing, the
Borrower will furnish the Lender from time to time with such financial
information and statements as the Lender may reasonably request, and,
upon request of the Lender, with copies of all financial statements and
financial reports that the Borrower sends or makes available to its
members of its Board of Directors or to any governmental authority,
together with copies of all management letters of substance and other
reports of substance submitted to the Borrower by its independent
accountants in connection with any annual or interim audit; and, upon
request of the Lender, the Borrower will authorize and direct all
accountants and auditors to exhibit and deliver copies of any financial
statements, trial balances or other accounting records of any sort, and
to disclose to the Lender any information they may have concerning the
Borrower's financial or business condition. In addition, the Borrower
will furnish to the Lender, promptly after the same are delivered to
its stockholders or the SEC, copies of all proxy statements, financial
statements and reports as the Borrower shall send to its stockholders
or as the Borrower may file with the SEC or any governmental authority
at any time having jurisdiction over the Borrower or any of them.
4.2 Financial Standards.
The Borrower shall maintain and observe all of the following financial
standards, in each case determined and classified in accordance with GAAP
applied on a consistent basis at the applicable dates or during the applicable
time periods indicated in the following table (the "Financial Standards"):
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APPLICABLE DATE OR TIME APPLICABLE RATIOS
FINANCIAL STANDARDS PERIOD OR MONETARY REQUIREMENTS
---------------------------------------------------------------------------------------------------------------------
4.2.1: Consolidated Debt Service Quarterly, at the end of At least 1.75:1 (rounded to nearest hundredth),
Ratio each quarter tested on a rolling four-quarter basis
---------------------------------------------------------------------------------------------------------------------
4.2.2: Consolidated Total Quarterly Not to exceed 2.0:1 (in each case rounded to the
Liabilities: Tangible Net Worth nearest hundredth)
Ratio
---------------------------------------------------------------------------------------------------------------------
4.2.3: Tangible Net Worth Annually At least $15,000,000 plus 50% of net profits for
the fiscal year ended 12/31/96 and thereafter
for each immediately preceding fiscal year for
which the measurement is being taken; provided
however that in the event of a Permitted
Acquisition Venture, such requirement shall be
reduced by the amount of goodwill associated
with such Permitted Acquisition Venture.
---------------------------------------------------------------------------------------------------------------------
4.2.4: Profitability Quarterly There can be no more than two consecutive fiscal
quarters with Consolidated Net Income of less
than zero
---------------------------------------------------------------------------------------------------------------------
4.2.5 As used in this Agreement:
(a) "Consolidated Total Liabilities" means the aggregate of
all liabilities of the Borrower for money borrowed, incurred from any
source and in any manner whatsoever, all in accordance with GAAP,
including all subordinated debt, plus the capitalization of all
obligations on leases of real and personal property;
(b) "Tangible Net Worth" means the aggregate tangible assets
of the Borrower after excluding the book value of all Intangible
Assets, minus the amount of aggregate liabilities, including all
deferred income taxes, and "Intangible Assets" shall include all
goodwill, organizational expense, licenses, patents, trademarks,
tradenames, copyrights, capitalized research and development expenses,
deferred charges, and all other intangible assets as determined in
accordance with GAAP consistently applied;
(c) "Consolidated Debt Service Ratio" means Adjusted Operating
Cash Flow (as described on Exhibit 4.2.1 attached hereto) divided by
Total Debt Service (as described on Exhibit 4.2.1 attached hereto).
(d) "Consolidated Net Income" means for any fiscal period, the
consolidated gross revenues of the Borrower for such period, less all
expenses and other proper charges (including taxes on income), all
determined in accordance with GAAP.
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4.2.6 Computation According to GAAP. All of the terms used in
the foregoing financial covenants, except to the extent otherwise
specifically defined herein, and all computations made under the
foregoing covenants, shall in all respects be governed by and performed
in accordance with GAAP consistently applied.
SECTION 5
CONDITIONS OF CLOSING
5.1 Conditions of Closing. This Agreement and all of the other Financing
Documents shall become effective and be dated as of the date on which the Lender
has received all of the following items, each of which must be completed, in
both form and substance, acceptable to the Lender in its sole but reasonable
discretion (said date is hereinafter referred to as the "CLOSING DATE"):
(a) This Agreement (together with all of the Exhibits referred
herein attached hereto) and the Note, each as executed by a duly
authorized officer of the Borrower and attested by the Clerk of the
Borrower.
(b) Assignments of the Key Person Life Insurance Policy
referred to in subsection 3.2.15 above, each as executed by a duly
authorized officer of the Borrower, in favor of the Lender, together
with the original of such Policy;
(c) A Certificate of Clerk of the Borrower, certifying: (i)
the adoption by the Board of Directors of the Borrower of resolutions
authorizing and approving the transactions contemplated by this
Agreement and all of the other Financing Instruments; (ii) the Articles
of Organization of each Borrower, along with any and all amendments
thereto, all as certified by the Massachusetts Secretary of State; and
(iii) the By-Laws of each Borrower, along with any and all amendments
thereto; and (iv) if not supplied on the Master Exhibit, the name and
signatures of the officers of the Borrower authorized to sign, for and
on behalf of the Borrower, this Agreement and all of the other
Financing Instruments.
(d) A Certificate of Corporate Legal Existence and Good
Standing for each Borrower, as issued by the Massachusetts Secretary of
State.
(e) An opinion from Counsel for the Borrower in form and
substance satisfactory to the Lender.
(f) Any and all other documents and information which the
Lender may reasonably requested in connection with the transactions
contemplated by this Agreement and all of the other Financing
Documents.
5.2 Date References. The parties hereto acknowledge and agree that all
references contained in the Note and all of the other Financing Instruments
executed in connection with the transactions contemplated herein to the words
"dated of even date herewith" shall mean and refer to the Closing Date.
SECTION 6
EVENTS OF DEFAULT
Notwithstanding any provision to the contrary in any instrument evidencing
any Obligation, the occurrence of any one or more of the following shall
constitute and mean an "Event of Default" under this Agreement:
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6.1 Any statement, report, certificate, representation or warranty, made or
furnished by the Borrower in, or in connection with the execution and delivery
of this Agreement or any of the Financing Instruments, or in compliance with the
provisions of this Agreement or any of the Financing Instruments, or otherwise
furnished to the Lender at any time, shall prove to have been false or erroneous
when made in any material respect, or omits or fails to state a material fact
necessary in order to make the statements contained therein or herein not
misleading;
6.2 The Borrower shall fail to make payment of the principal or interest on
the Loans when and as due;
6.3 The Borrower shall fail to make payment of any other Obligation within
fifteen (15) days of the date when and as due;
6.4 The Borrower shall fail to perform, observe, comply with or satisfy any
covenant, agreement or condition contained in this Agreement (other than payment
of any Obligation) not cured within thirty (30) days of the earlier of (i)
notice by the Lender to the Borrower or (ii) actual knowledge by the Borrower of
the occurrence thereof, plus such additional time as may be required to cure
such default because of delays beyond the Borrower's control, if such default is
susceptible of being cured and if the Borrower is acting in good faith and is
making diligent efforts to cure such default; provided, however, that such cure
period shall not exceed the aggregate of ninety (90) days and shall not apply
to: (a) any transfer or voluntary encumbrance of assets; (b) any failure with
respect to any requirement of the Borrower to give notice to the Lender as
provided herein; (c) the Reporting Requirements or the Financial Standards; or
(d) any event which is otherwise an Event of Default pursuant to any other
subsections of this Section 6; and such cure period shall run concurrently with,
and not in addition to, any and all applicable grace or cure periods contained
in any of the other Financing Instruments;
6.5 The Borrower shall default in payment of (a) any obligation under any
lease which default could materially adversely affect the business operations of
the Borrower; or (b) any obligation or indebtedness to any other Person at any
time outstanding, continued for a period sufficient to cause the acceleration of
the maturity of such obligation or indebtedness (whether or not such obligation
or indebtedness is actually accelerated) and such acceleration could materially
adversely affect the business operations of the Borrower;
6.6 Failure, generally, of the Borrower to pay its debts when due and such
failure could materially adversely affect the business operations of the
Borrower; or the taking of possession, custody or control of, or the attachment
by judicial process of, or issuance of an injunction against, or creation of any
other Lien (other than in favor of the Lender) upon, any part of the Borrower's
property or assets by any Person, which action is not dissolved within thirty
(30) days;
6.7 The Borrower:
6.7.1 files a voluntary petition in bankruptcy (which term
includes any action under Title 11 of the United States Code entitled
"Bankruptcy" and commonly referred to as the "Bankruptcy Code"); or
6.7.2 is adjudicated a bankrupt or insolvent; or
6.7.3 files any petition or answers seeking or acquiescing in
any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief for itself under any law
relating to bankruptcy, insolvency or other relief for debtors; or
6.7.4 seeks or consents to or acquiesces in the appointment of
any trustee, receiver, master or liquidator (or other similar official)
of itself or of all or any substantial part of its property; or
6.7.5 makes any general assignment for the benefit of
creditors; or
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6.7.6 admits in writing to its general inability to pay its
debts as they become due;
6.8 Commencement of any bankruptcy, insolvency, or other creditor's relief
proceedings against, or entry by a court of competent jurisdiction of any order,
judgment or decree approving a petition filed against the Borrower, seeking any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any present or future federal or state law or regulation
relating to bankruptcy, insolvency, or other relief for debtors, which
proceeding, order, judgment or decree remains unvacated or unstated for an
aggregate of thirty (30) days, whether or not consecutive, from the date of
entry thereof;
6.9 A material portion of the Borrower's assets shall be damaged by fire or
other casualty, the restoration or replacement cost of which damage exceeds, in
the aggregate, the amount of insurance proceeds readily available (less
applicable deductibles and plus capital in an amount which, in Lender's sole
discretion (a) is available for such purposes and (b) expenditure of such
capital for such purposes is appropriate under the circumstances) for such
restoration or replacement;
6.10 The issuance or existence of any judgment or judgments against the
Borrower by any court of competent jurisdiction, or other governmental authority
of competent jurisdiction, aggregating in excess of One Hundred Thousand Dollars
($100,000) in any fiscal year, and not covered by insurance, not paid within
thirty (30) days of the date thereof;
6.11 The loss, suspension or revocation of any governmental license required
or necessary in connection with the operation of the Borrower's business;
6.12 Service of any process upon the Lender seeking to attach by means of
trustee process any funds of the Borrower or of any Affiliate on deposit with
Lender, which attachment or process is not dissolved within thirty (30) days; or
6.13 The occurrence of any change in the Borrower's condition or affairs
(financial or otherwise) that, in the Lender's reasonable opinion, impairs the
Lender's security or materially increases the Lender's risk under this Agreement
or the Financing Instruments, or the occurrence of any event or circumstance
with respect to the Borrower such that the Lender reasonably deems itself
insecure.
SECTION 7
REMEDIES
7.1 General Remedies. In addition to and without in any way limiting any
other rights and remedies available to the Lender under this Agreement prior to
an Event of Default, or any other rights and remedies available to the Lender
(whether prior to or after an Event of Default) under any of the Financing
Instruments or under applicable law or in equity, upon and at any time or times
after the occurrence of any Event of Default hereunder:
7.1.1 the Lender may declare and cause all or any portion of
the Obligations to be immediately due and payable;
7.1.2 the Lender may decline to honor the credit of the
Borrower or may refuse to make further advances to the Borrower;
7.1.3 the Lender shall have the right to apply to the
Obligations any deposits or other sums at any time credited by or due
from the Lender to the Borrower; and
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7.1.4 the Lender may treat any or all of the Financing
Instruments as being in default and may exercise any rights and
remedies thereunder as it shall deem appropriate.
7.2 Cumulative Remedies. The enumeration of rights and remedies herein, and
in each of the Financing Instruments, shall be cumulative and not exclusive, and
shall be in addition to, and shall not exclusive of, any other rights or
remedies the Lender may have, whether under the UCC or other applicable law, or
in equity, or otherwise. The Lender shall, in its discretion, determine its
choice of rights and remedies and the order in which they shall be exercised,
and whether or not, and which, Collateral is to be proceeded against, and in
which order. The exercise of any right or remedy shall not preclude the exercise
of others.
SECTION 8
WAIVER
8.1 Waiver By the Borrower. The Borrower hereby waives demand, presentment,
protest and notice thereof with respect to any and all instruments, notice of
acceptance hereof, notice of Loan or advances made, credit extended, or any
other action taking in reliance herein, and all other notices and demands of any
kind except as expressly set forth herein.
8.2 Lender's Option To Waive. The Lender may at its sole discretion, at any
time and from time to time, waive any of the requirements or provisions hereof,
or contained within any of the Financing Instruments, or any default hereunder
or under any of the Financing Instruments, but only by an express written waiver
signed by an authorized officer of the Lender; no act other than an express
written waiver, nor any failure to act or delay by the Lender shall constitute a
waiver of any requirement or provision of, or any default under, or any of the
Lender's rights or remedies under, this Agreement or any of the Financing
Instruments. No single or partial waiver by the Lender of any provision of this
Agreement or any of the Financing Instruments, or any breach or default
thereunder, or of any right or remedy which the Lender may have, shall operate
as a waiver of any other provision, breach, default, right or remedy, nor of the
same one on any future occasion.
SECTION 9
MISCELLANEOUS
9.1 Deposits As Collateral; Set-Off. Any and all deposits, Deposit Accounts,
and other sums at any time credited by or due to the Borrower from the Lender or
any of its banking or lending affiliates or any lender acting as a participant
under any loan arrangement between the Lender and the Borrower, and any cash,
certificates of deposit, securities, instruments, documents, policies and
certificates of insurance, goods, Accounts, choses in action, Chattel Paper, and
other property of the Borrower in the possession or control of, or in transit to
or from, the Lender, or any of its banking or lending affiliates, or any lender
acting as a participant under any loan arrangement between the Lender and the
Borrower, or any third party acting on the Lender's behalf, regardless of the
reason the Lender, or such other party, receives or is to receive the same
(whether in pledge, or for safekeeping, or as agent for collection or
transmission or otherwise) and regardless of whether the Lender has
conditionally released the same, shall at all times constitute security for any
and all Obligations, and may be applied or set off against such Obligations at
any time, whether or not other collateral is available to the Lender.
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9.2 Survival of Covenants; Binding Effect. All agreements, representations,
covenants and warranties made by the Borrower in this Agreement, the Financing
Instruments, or in any certificate or other document delivered to the Lender in
connection herewith shall survive the termination of this Agreement and survive
the execution and delivery of this Agreement, and shall remain in full force and
effect until all Obligations to the Lender have been paid in full and satisfied,
and the security interests and rights granted to the Lender in any collateral
and its rights and remedies hereunder and under the Financing Instruments shall
continue in full force and effect notwithstanding the fact that the Borrower's
Loan account may from time to time be in a zero or credit position, until all
Obligations have been satisfied. All the terms and provisions of this Agreement
and the Financing Instruments shall be binding upon and inure to and be
enforceable by and against the parties hereto and their respective successors
and assigns.
9.3 Termination of Agreement.
9.3.1 This Agreement shall terminate upon the final and
irrevocable payment in full by the Borrower of the Obligations, or upon
acceleration of the Obligations pursuant to the terms of this
Agreement.
9.3.2 The termination of this Agreement shall not affect any
rights of the Borrower or the Lender arising prior to the effective
date of such termination, as the case may be, and the provisions hereof
shall continue to be fully operative until all transactions entered
into, rights created or Obligations incurred prior to such occurrence
or termination shall have been fully disposed of, concluded or
liquidated. Upon termination of this Agreement, all Obligations
(including, without limitation, the Loans) shall be due and payable
without notice or demand. The security interests, liens and rights
granted to the Lender hereunder and under any instrument or document
delivered pursuant hereto or in connection herewith shall continue in
full force and effect, notwithstanding the termination of this
Agreement or the fact that the Borrower's Accounts may from time to
time be temporarily in a credit position, until all of the Obligations
have been paid in full after the termination hereof. All
representations, warranties, covenants, waivers and agreements
contained herein shall survive the termination hereof unless otherwise
provided.
Notwithstanding the foregoing, if after receipt of any payment of all
or any part of the Obligations, the Lender is for any reason compelled
to surrender such payment to any person or entity because such payment
is determined to be void or voidable as a preference, impermissible
setoff, a diversion of trust funds or for any other reason, this
Agreement shall continue in full force and the Borrower shall be liable
to, and shall indemnify and hold the Lender harmless for, the amount of
such payment surrendered until the Lender shall have been finally and
irrevocably paid in full. The provisions of the foregoing sentence
shall be and remain effective notwithstanding any contrary action which
may have been taken by the Lender in reliance upon such payment, and
any such contrary action so taken shall be without prejudice to the
Lender's rights under this Agreement and shall be deemed to have been
conditioned upon such payment having become final and irrevocable.
9.4 Conflict of Terms. In the event of any conflict or contradiction between
or among any provision or provisions of this Agreement and any provision or
provisions of any of the other Financing Instruments, the provisions of this
Agreement shall govern.
9.5 Prior Discussions; Amendments in Writing; Counterparts; Filing As
Financing Statement. This Agreement and all other Financing Instruments
incorporate all discussions and negotiations between the Borrower and the
Lender, either express or implied, concerning the matters included herein and
therein, any custom or usage to the contrary notwithstanding. No such
discussions or negotiations shall limit, modify, or otherwise affect the
provisions of the Financing Instruments. This Agreement may be amended or
modified only in writing signed by the parties hereto, and in the case of the
Lender signed by a duly authorized officer thereof. This Agreement may be
executed in two or more counterparts, each of which shall constitute an
original, but such counterparts together shall constitute one and the same
instrument.
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9.6 General Indemnification. The Borrower shall, and does hereby, further
indemnify and save the Lender harmless from any and all liabilities, damages,
costs, losses and expenses (including, without limitation, court costs and
attorney's reasonable fees and expenses) that the Lender may sustain or incur by
reason of, relating to or arising out of the preparation of this Agreement, or
in collecting or enforcing the Obligations, or in enforcing any of Lender's
rights or remedies, or in the prosecution or defense of any action or proceeding
concerning any matter growing out of or connected with this Agreement, any of
the Financing Instruments, or the Obligations, or on account of the Lender's
relationship with the Borrower (each of which may be defended, compromised,
settled or pursued by the Lender with counsel of Lender's selection, at the sole
expense of the Borrower) except for such claims which have been determined by a
court of competent jurisdiction to have arisen out of the Lender's gross
negligence or bad faith. The within indemnification shall survive termination of
this Agreement. The Borrower's obligations under this subsection constitute part
of the Obligations secured by the security interest created by this Agreement
and by the other Financing Instruments.
9.7 Destruction of Documents; Jurisdiction. This Agreement and all other
Financing Instruments may be reproduced by the Lender by any photographic,
photostatic, microfilm, or similar process, and the Lender may destroy the
original from which any document was so reproduced. Any such reproduction shall
be admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and
whether or not such reproduction was made in the regular course of business).
The Borrower acknowledges receipt of a true, correct and complete copy or
counterpart of this Agreement.
9.8 Notices.
9.8.1 All notices or demands hereunder to the parties hereto
shall be made in writing and shall be deemed to have been sufficiently
given for all purposes one business day after being sent by recognized
overnight delivery service for next day delivery service, on the same
business day if delivered by hand and three business days after being
sent by United States mail, certified mail return receipt requested,
first class, postage prepaid, and addressed to the parties at their
respective Notice Addresses set forth above, together with the
following additions: (a) for the Lender, "Attention: Commercial Banking
Group" and (b) for the Borrower, "Attention: Xxxxxxx X. Xxxxxxxxxx,
President". Either of the parties may change its Notice Address
hereunder by giving notice of such change to the other party in
accordance with the provisions of this subsection.
9.8.2 Notwithstanding any provision herein to the contrary,
the Borrower agrees that the failure or delay by the Lender in giving
any notice or statement hereunder, or any inaccuracy therein or
incompleteness thereof, shall not in any way alter or affect the
absolute and unconditional obligation of the Borrower to pay and
perform in full the Obligations, but any action taken or not taken by
the Borrower as a direct result of such lack or delay of notice, or of
the Borrower's good faith reliance upon a material inaccuracy therein
or the material incompleteness thereof, as the case may be, shall not
in of itself, and to the extent thereof, constitute an Event of Default
hereunder, so long as the Borrower does not otherwise have or receive
notice or knowledge of the material contents or substance of such
notice, or of the inaccuracy or incompleteness thereof, as the case may
be, and the Borrower acts at all times in good faith.
9.9 Application of Proceeds. The proceeds of any collection, sale or
disposition of the Collateral, or of any other payments received hereunder,
shall be applied toward the Obligations in such order and manner as the Lender
determines in its sole discretion, any statute (the application of which may be
waived or modified by agreement), customs or usage to the contrary
notwithstanding. The Borrower shall remain liable to the Lender for any
deficiency remaining following such application.
9.10 Continuance of Defaults. As used herein, and in any of the Financing
Instruments, upon any and each occurrence of an Event of Default, such Event of
Default shall be deemed to continue until cured by the Borrower in accordance
with this Agreement (and the applicable provisions of the Financing Instruments,
as the case may be),
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and until such time as the Borrower requests and receives from the Lender the
Lender's written acknowledgment that such Event of Default (as specified in the
request) has been cured and is no longer continuing, which acknowledgment the
Lender shall not unreasonably withhold or delay.
9.11 Severability. If any provision of this Agreement or any of the
Financing Instruments, or any portion of such provision, or the application
thereof to any person or circumstance, shall to any extent be held invalid or
unenforceable, the remainder of this Agreement and the Financing Instruments or
the remainder of such provision and the application thereof to other persons or
circumstances (other than those as to which it is held invalid or unenforceable)
shall not be affected thereby, and each term and provision hereof and of the
Financing Instruments shall be valid and enforced to the fullest extent
permitted by law. To the extent permitted by law, the parties hereto waive any
provision of law which renders any such provision prohibited or unenforceable in
any respect.
9.12 Headings. Headings appearing in this Agreement are intended for
convenience only and do not constitute and shall not be interpreted to be a part
of this Agreement.
9.13 Governing Law; Sealed Instrument. This Agreement is executed and
delivered in The Commonwealth of Massachusetts, and for all purposes shall be
construed in accordance with and governed by the laws of The Commonwealth of
Massachusetts, and shall take effect as a sealed instrument. The Borrower
submits itself to the jurisdiction of the Courts of The Commonwealth of
Massachusetts for all purposes with respect to this Agreement and the Borrower's
relationship with the Lender.
9.14 Force Majeure. The Lender shall not be responsible for delays or
failures in performance hereunder resulting from causes beyond its control,
including without limitation, acts of God, strikes, lockouts, riots, acts of
war, governmental regulations, fire, communication line failures, power
failures, earthquakes or other disasters.
9.15 Interpretation of Agreement. Should any provision of this Agreement or
the other Financing Instruments require interpretation or construction, it is
agreed by the parties hereto that the court, administrative body, or other
entity interpreting or construing this Agreement or the other Financing
Instruments shall not apply a presumption that the provisions thereof shall be
more strictly construed against one party by reason of the rule of construction
that a document is to be construed more strictly against the party who itself or
through its agents prepared the same, it being agreed that the parties and/or
their respective attorneys and agents have fully participated in the preparation
of all provisions of this Agreement and the other Financing Instruments.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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EXECUTED as an instrument under seal as of the day and year first stated
above.
Borrower:
Signed in the presence of: BOSTON BIOMEDICA, INC.
______________________________ By:_________________________________
Witness Xxxxx X. Xxxxxxx, Treasurer, hereunto duly
authorized
BTRL CONTRACTS AND SERVICES, INC.
By:_________________________________
Xxxxx X. Xxxxxxx, Treasurer,
hereunto duly authorized
BBI CLINICAL LABORATORIES, INC.
By:_________________________________
Xxxxx X. Xxxxxxx, Treasurer,
hereunto duly authorized
BBI-SOURCE SCIENTIFIC, INC.
By:_________________________________
Xxxxx X. Xxxxxxx, Treasurer,
hereunto duly authorized
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Lender:
THE FIRST NATIONAL BANK OF BOSTON
By:_________________________________
G. Xxxxxxxxxxx Xxxxxx
Vice President
PABOS2:SCS:28634_4
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EXHIBIT 4.1.3
OFFICER'S COMPLIANCE CERTIFICATE
TO: THE FIRST NATIONAL BANK OF BOSTON
Bank of Boston-Worcester Tower
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000-0000
The undersigned authorized officer of BBI, BTRL, BBICL and BSS
(together, the "Borrower"), hereby certifies, with respect to the Commercial
Loan Agreement dated as of ___________ __, 1997 between The First National Bank
of Boston (the "Lender") and the Borrower, as amended through the date hereof
(the "Loan Agreement"), that (a) the signer has reviewed the relevant terms of
the Financing Instruments and is familiar with the operations and financial
condition of the Borrower; and (b) there is in existence no Event of Default
described in any of the Financing Instruments and no event which, with the
giving of notice or lapse of time, or both, would result in the occurrence of an
Event of Default, except as noted below, if any, and the Borrower is in complete
compliance as of __/__/__ with the Financial Standards (the "Applicable
Financial Statements Date"), as demonstrated below. All capitalized terms used
herein and not otherwise defined shall have the meanings given them in the Loan
Agreement.
APPLICABLE DATE OR TIME APPLICABLE RATIOS ACTUAL AS OF
FINANCIAL STANDARDS PERIOD OR MONETARY REQUIREMENTS __/__/__
Consolidated Debt Service Ratio Quarterly, at the end of Not to exceed 1.75:1 (in each case ___:___
each quarter rounded to the nearest hundredth).
Consolidated Total Quarterly Not to exceed 2.0:1 (in each case ___:___
Liabilities: Tangible Net rounded to the nearest hundredth).
Worth Ratio
Tangible Net Worth Annually At least $15,000,000 plus 50% of net $____________
profits for the fiscal year ended
12/31/96 and thereafter for each
immediately preceding fiscal year for
which the measurement is being taken,
subject to adjustment in the event of
acquisitions made by the Borrower in
the future, which adjustments shall
be determined by the Lender in its
sole judgment, reasonably exercised.
Profitability Quarterly There can be no more
than two consecutive fiscal
quarters with Consolidated Net
Income of less than zero.
Comments Regarding Exceptions:
Attached hereto are financial statements as of and for the fiscal
(quarter)(year) ended on the Applicable Financial Statements Date, which have
been certified by the undersigned as required by Section 4.1 of the Loan
Agreement.
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BOSTON BIOMEDICA, INC.
By:_________________________________
Xxxxx X. Xxxxxxx, Treasurer, hereunto duly
authorized
BTRL CONTRACTS AND SERVICES, INC.
By:_________________________________
Xxxxx X. Xxxxxxx, Treasurer, hereunto duly
authorized
BBI CLINICAL LABORATORIES, INC.
By:_________________________________
Xxxxx X. Xxxxxxx, Treasurer,
hereunto duly authorized
BBI-SOURCE SCIENTIFIC, INC.
By:_________________________________
Xxxxx X. Xxxxxxx, Treasurer,
hereunto duly authorized
DATE: ___________________
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EXHIBIT 4.2.1
A. OPERATING CASH FLOW ("OCF")
Add: 1. Earnings before interest and taxes (EBIT)
2. Depreciation and Amortization
3. Non-cash expenses
Less:4. Cash income taxes paid
5. Capital Expenditures (CAPEX)
6. Non-cash income
7. OCF ___________________
B. ADJUSTMENTS TO OCF ("Adjusted OCF")
Add: 8. Net Equity Raised (1)
9. Financed CAPEX (2)
10. Adjusted OCF ___________________
C. TOTAL DEBT SERVICE ("TDS")
1. Interest Expense
2. Required Payment of Long Term
Debt and Capital Leases
3. TDS ___________________
Adjusted OCF/TDS = Debt Service Ratio
Notes:
(1) "Net Equity Raised" is equity raised which is net of any equity
used to finance acquisitions.
(2) "Financed CAPEX" is bank/lease debt used to finance capital
purchases.
PABOS2:SCS:28634_5
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