Exhibit A
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Interest Terms and Provisions
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Exhibit 10.5
EXHIBIT A
This Exhibit A provides for certain of the substantive terms and provisions
regarding, among other things, the interest rate, interest repayment, and
selection and conversion of optional interest rates for the Loan established
pursuant to the Loan Agreement to which this document is attached as an Exhibit
(the "Loan Agreement"). The terms and provisions of this Exhibit A are
specifically incorporated by reference into the Loan Agreement.
1. The following terms as used in this Exhibit A and the Loan Agreement shall
have the meanings set forth below:
Base Rate. The higher of (a) the annual rate of interest announced from
time to time by the Lender at its head office in Boston, Massachusetts as its
"base rate" and (b) one half of one percent ( 1/2%) above the overnight federal
funds effective rate as published by the Board of Governors of the Federal
Reserve System, as in effect from time to time.
Business Day. Any day on which the Lender is open for the transaction of
banking business in Boston, Massachusetts and, in case of LIBOR Rate Loans, also
a day which is a LIBOR Business Day.
Conversion Request. A notice given by the Borrower to the Lender of (i)
its initial selection of an interest rate option for an Advance in accordance
with Paragraph 5, herein, or (ii) its election to convert or continue an
interest rate option for a Loan in accordance with Paragraph 6, herein.
Convert, Conversion and Converted. The conversion of a Loan from one Type
to Loans of another Type.
Domestic Rate. For any Interest Period with respect to each Domestic Rate
Loan, floating at the per annum rate equal to the Base Rate. The Domestic Rate
shall be adjusted automatically on any change in the Base Rate, such that any
change in the Domestic Rate resulting therefrom shall become effective as of the
opening of business on the day on which such change in the Base Rate became
effective.
Domestic Rate Loan. All or any portion of any Advance or the Loan which
bears interest at the Domestic Rate.
Eurocurrency Reserve Rate. For any day with respect to a LIBOR Rate
Loan, the maximum rate (expressed as a decimal) at which any lender subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such
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liabilities were outstanding. The Eurocurrency Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in the Eurocurrency
Reserve Rate.
Fixed Rate. For any Interest Period with respect to a Fixed Rate Loan, an
interest rate per annum equal at all times during such Interest Period to the
sum of (i) One and Three-Eighths percent (1.375%) and (ii) the Lender's cost of
funds (as determined by the Lender) for a period equal to the Interest Period
(plus any internal incremental increase, as determined and established by the
Lender's treasury department, as a cost of the availability of such funds).
Fixed Rate Loan. All or any portion of an Advance or the Loan bearing
interest at the Fixed Rate.
Interest Payment Date. (a) As to any Loan, the first day of each calendar
month commencing with the calendar month following the calendar month which
includes the date of the Advance of such Loan; and (b) as to any LIBOR Rate
Loan, the last day of each Interest Period.
Interest Period. With respect to each Loan, (a) initially, the period
commencing on the date of the Advance of such Loan and ending on the last day of
one of the periods set forth below (i) for any Domestic Rate Loan, the last day
of the calendar month; (ii) as selected by the Borrower in a Conversion Request,
for any LIBOR Rate Loan, 1, 2, 3, or 6 months; and (iii) for any Fixed Rate
Loan, the then applicable Maturity Date, and (b) thereafter, for any Domestic
Rate Loan or LIBOR Rate Loan, each period commencing on the last day of the next
preceding Interest Period applicable to such Loan and ending on the last day of
one of the periods set forth above, as selected by the Borrower in a Conversion
Request; provided that all of the foregoing provisions relating to Interest
Periods are subject to the following:
(A) if any Interest Period with respect to a LIBOR Rate Loan would
otherwise end on a day that is not a LIBOR Business Day, that Interest
Period shall be extended to the next succeeding LIBOR Business Day unless
the result of such extension would be to carry such Interest Period into
another calendar month, in which event such Interest Period shall end on
the immediately preceding LIBOR Business Day;
(B) if any Interest Period with respect to a Domestic Rate Loan would
end on a day that is not a Business Day, that Interest Period shall end on
the next succeeding Business Day;
(C) if the Borrower shall fail to give notice as provided in Paragraph
6, herein, the Borrower shall be deemed to have requested a conversion of
the affected LIBOR
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Rate Loan to a Domestic Rate Loan on the last day of the then current
Interest Period with respect thereto;
(D) any Interest Period relating to any LIBOR Rate Loan that begins on
the last LIBOR Business Day of a calendar month (or on a day for which
there is no numeri cally corresponding day in the calendar month at the
end of such Interest Period) shall end on the last LIBOR Business Day of a
calendar month; and
(E) any Interest Period relating to any LIBOR Rate Loan that would
otherwise extend beyond the Maturity Date shall end on the Maturity Date.
LIBO Rate. For any Interest Period with respect to a LIBOR Rate Loan, the
interest rate per annum (rounded upwards to the next highest 1/16 of 1%)
determined by the Lender pursuant to the following formula:
Euro Rate = LIBO Bid Rate
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1.00 - Eurocurrency Reserve Rate
LIBO Bid Rate. For any Interest Period with respect to a LIBOR Rate Loan,
the annual rate of interest determined by the Lender on the second Business Day
prior to the first day of such Interest Period to be the rate at which deposits
in U.S. dollars are offered to the Lender by prime banks in whatever Eurodollar
interbank market may be selected by the Lender in its sole discretion, acting in
good faith, at the time of determination and in accordance with the usual
practice in such market for delivery on the first day of such Interest Period
for the number of days comprised therein and in an amount equal (as nearly as
may be) to the principal amount of such LIBOR Rate Loan.
LIBOR Business Day. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other eurodollar interbank market as may be selected by the Lender in its sole
discretion acting in good faith.
LIBOR Rate. For any Interest Period with respect to a LIBOR Rate Loan, an
interest rate per annum equal at all times during such Interest Period to the
(i) LIBO Rate plus (ii) One and Three-Eighths percent (1.375%).
LIBOR Rate Loan. All or any portion of an Advance or the Loan bearing
interest calculated by reference to the LIBOR Rate.
Type of Loan. A Domestic Rate Loan or a LIBOR Rate Loan, as the case may
be.
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2. Any and all terms which are defined in the Loan Agreement shall when used
herein have the meaning set forth in the Loan Agreement, unless otherwise
defined herein.
3. The Loan shall bear interest as follows:
1. For each Interest Period:
i. To the extent that all or any portion of the Loan is a Domestic
Rate Loan, such portion shall bear interest during such Interest
Period at the floating rate equal to the Domestic Rate.
ii. To the extent that all or any portion of the Loan is a LIBOR Rate
Loan, such portion shall bear interest during such Interest
Period at the LIBOR Rate determined for such Interest Period.
iii To the extent that all or any portion of the Loan is a Fixed Rate
Loan, such portion shall bear interest during such Interest
Period at the Fixed Rate determined for such Interest Period.
4. The Borrower promises to pay interest on the Loan in arrears on each
Interest Payment Date applicable to such Interest Period.
5. The Borrower agrees that each request submitted to the Lender requesting an
Advance shall be accompanied by a written notice of Borrower (the
"Conversion Request") specifying (i) the requested Type of Loan comprising
such Advance, (ii) in the case of an Advance comprised of any LIBOR Rate
Loan, the initial Interest Period; and (iii) the amount of each Type of
Loan; provided, however, that each LIBOR Rate Loan and Fixed Rate Loan
shall be in an amount of $100,000.00 or integral multiple thereof. A
Conversion Request with respect to a LIBOR Rate Loan or a Fixed Rate Loan
shall be irrevocable and binding on Borrower. If no Conversion Request is
given by Borrower to the Lender with respect to any request for an Advance,
the Borrower shall be deemed to have selected a Domestic Rate Loan.
6. Upon notice given by Borrower to the Lender not later than 12:00 noon
(Boston time) in the case of Conversions into LIBOR Rate Loans or a Fixed
Rate Loan, on the third Business Day prior to the date of the proposed
Conversion, the Borrower may Convert, on any Business Day, Loans of one
Type made to the Borrower into Loans of another Type, provided, however,
that (a) any Conversion of LIBOR Rate Loans may be made only on the last
day of the respective Interest Period for such Loans, (b) any Loan
Converted to a LIBOR Rate Loan shall be in an amount of at least
$100,000.00 or integral
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multiple thereof, (c) any Loan Converted to a Fixed Rate Loan shall be in
an amount of the outstanding principal balance of the Note, (d) a Fixed
Rate Loan shall not be Converted by the Borrower to a Loan of any other
Type, (e) any Loan Converted to a Fixed Rate Loan shall be for the balance
of the then applicable term of the Loan, and (f) no Advance may be
Converted to a LIBOR Rate Loan or a Fixed Rate Loan when any Default or
Event of Default has occurred and is continuing. Each such Conversion
Request shall be by telephone, telecopy, telex or cable, in each case
confirmed immediately in writing in the manner specified for notices
herein, and shall, within the restrictions specified above, specify (i) the
date of such Conversion, (ii) the Loans to be Converted, and (iii) if such
Conversion is to LIBOR Rate Loan the duration of the initial Interest
Period for such Loans. Each Conversion Request with respect to LIBOR Rate
Loans or a Fixed Rate Loan shall be irrevocable and binding on the
Borrower. Notwithstanding anything stated herein, the Borrower may not
submit a Converstion Request to Convert any Loan into a Domestic Rate Loan.
The Domestic Rate shall only be applicable if the LIBOR Rate or the Fixed
Rate is not available, or except as otherwise provided herein.
7. If after giving a Conversion Request, the Borrower fails to borrow or
Convert any LIBOR Rate Loan or any Fixed Rate Loan, the Borrower shall
indemnify the Lender against any loss or expense incurred by the Lender as
a result of such failure including, without limitation, any loss or expense
incurred by reason of the liquidation or reemployment of deposits or other
funds acquired by the Lender to fund or maintain an Advance to be made by
the Lender and the compensation as provided for in Paragraph 13, herein.
8. Any Loans of any Type (other than a Fixed Rate Loan) may be continued as
such upon the expiration of an Interest Period with respect thereto by
compliance by the Borrower with the notice provisions contained in
Paragraph 6, above; provided that no LIBOR Rate Loan may be continued as
such when any Default or Event of Default has occurred and is continuing,
but shall be automatically converted to a Domestic Rate Loan on the last
day of the first Interest Period relating thereto ending during the
continuance of any Default or Event of Default of which the officers of the
Lender active upon the Borrower's account have actual knowledge.
9. In the event that the Borrower does not notify the Lender of its election
under Paragraph 6, herein, in a timely manner with respect to any Loan upon
the expiration of the applicable Interest Period, such Loan shall be
automatically converted to a Domestic Rate Loan at the end of the
applicable Interest Period.
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10. Upon the expiration of any Interest Period for a Fixed Rate Loan, such Loan
shall be automatically converted to a Domestic Rate Loan.
11. Notwithstanding anything to the contrary contained herein, in no event may
the Borrower select more than three (3) Interest Periods to be in effect at
any one time for any particular Type of Loan.
12. Each determination of an interest rate by the Lender pursuant hereto shall
be conclusive and binding upon the Borrower in the absence of manifest
error.
13. The Borrower agrees to indemnify the Lender and to hold the Lender harmless
from and against any loss, cost or expense (including loss of anticipated
profits) that the Lender may sustain or incur as a consequence of (a) an
Event of Default by the Borrower in payment of the principal amount of or
any interest on any LIBOR Rate Loans or Fixed Rate Loans as and when due
and payable, including any such loss or expense arising from interest or
fees payable by the Lender to lenders of funds obtained by it in order to
maintain its LIBOR Rate Loans or Fixed Rate Loans, (b) an Event of Default
by the Borrower in making a borrowing or conversion after the Borrower has
given (or is deemed to have given) a Conversion Request, or (c) the making
of any payment of any LIBOR Rate Loan or Fixed Rate Loan or the making of
any conversion of any such Loan to a Domestic Rate Loan on a day that is
not the last day of the applicable Interest Period with respect thereto,
whether due to voluntary prepayment, payment realized from the Collateral
or any Guarantor after the occurrence of an Event of Default, or otherwise,
including interest or fees payable by the Lender to lenders of funds
obtained by it in order to maintain any such Loans. Such loss shall
include, without limitation, an amount calculated as follows:
1. First, the Lender shall determine the amount by which (i) the total
amount of interest which would have otherwise accrued hereunder on
each installment of principal so paid or not borrowed, during the
period beginning on the date of such payment or failure to borrow and
ending on the date such installment would have been due (the
"Reemployment Period"), exceeds (ii) the total amount of interest
which would accrue, during the Reemployment Period, on any readily
marketable bond or other obligation of the United States of America
designated by the Lender in its sole discretion at or about the time
of such payment, such bond or other obligation of the United States of
America to be in an amount equal (as nearly as may be) to the amount
of principal so paid or not borrowed and to have a
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maturity comparable to the Reemployment Period, and the interest to
accrue thereon to take account of amortization of any discount from
par or accretion of premium above par at which the same is selling at
the time of designation. Each sum amount is hereafter referred to as
an "Installment Amount".
2. Second, each Installment Amount shall be treated as payable as of the
date on which the related principal installment would have been
payable by the Borrower had such principal installment not been
prepaid or not borrowed.
3. Third, the amount to be paid on each such date shall be the present
value of the Installment Amount determined by discounting the amount
thereof from the date on which such Installment Amount is to be
treated as payable, at the same annual interest rate as that payable
upon the bond or other obligation of the United States of America
designated as aforesaid by the Lender.
14. In the event, prior to the commencement of any Interest Period relating to
any LIBOR Rate Loan, the Lender shall determine that adequate and
reasonable methods do not exist for ascertaining the LIBO Rate that would
otherwise determine the rate of interest to be applicable to any LIBOR Rate
Loan during any Interest Period, the Lender shall forthwith give notice of
such determination (which shall be conclusive and binding on the Borrower)
to the Borrower. In such event (a) any Conversion Request with respect to
LIBOR Rate Loans shall be automatically withdrawn and shall be deemed a
request for Domestic Rate Loans, (b) each LIBOR Rate Loan will
automatically, on the last day of the then current Interest Period thereof,
become a Domestic Rate Loan, and (c) the obligations of the Lender to make
LIBOR Rate Loans shall be suspended until the Lender determines that the
circumstances giving rise to such suspension no longer exist, whereupon the
Lender shall so notify the Borrower.
15. Notwithstanding any other provisions herein, if any present or future law,
regulation, treaty or directive or in the interpretation or application
thereof shall make it unlawful for the Lender to make or maintain LIBOR
Rate Loans, the Lender shall forthwith give notice of such circumstances to
the Borrower and thereupon (a) the commitment of the Lender to make LIBOR
Rate Loans or convert Loans of another type to LIBOR Rate Loans shall
forthwith be suspended and (b) the LIBOR Rate Loans then outstanding shall
be converted auto matically to Domestic Rate Loans on the last day of each
Interest Period applicable to such LIBOR Rate Loans or
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within such earlier period as may be required by law. The Borrower hereby
agrees promptly to pay the Lender, upon demand, any additional amounts
necessary to compensate the Lender for any costs incurred by the Lender in
making any conversion in accordance with this section, including any
interest or fees payable by the Lender to lenders of funds obtained by it
in order to make or maintain its LIBOR Rate Loans hereunder and any amount
payable as provided in Paragraph 13, herein.
16. The Borrower shall have the right at any time to prepay the Note on or
before the Maturity Date, as a whole, or in part, subject to the following
limitations:
1. For any Domestic Rate Loan, without premium or penalty, provided that
any amount prepaid shall be accompanied by accrued interest on the
principal repaid to the date of payment;
2. For any LIBOR Rate Loan, upon not less than three (3) Business Days'
prior written notice to the Lender, without penalty, provided that (1)
each partial prepayment shall be in the principal amount of
$100,000.00 or an integral multiple thereof, (2) if such prepayment is
on any day other than the last day of the Interest Period relating
thereto, such amount prepaid shall be accompanied by any additional
amounts necessary to compensate the Lender for any costs incurred by
the Lender in accordance with Paragraph 13, herein, including any
interest or fees payable by the Lender to lenders of funds obtained by
it in order to make or maintain its LIBOR Rate Loans hereunder and (3)
any amount prepaid shall be accompanied by accrued interest on the
principal repaid to the date of payment.
3. For any Fixed Rate Loan upon not less than thirty (30) Business Days'
prior written notice to the Lender, without penalty, provided that
such amount prepaid shall be accompanied by any additional amount
equal to the amounts necessary to compensate the Lender for any costs
incurred by the Lender in accordance with Paragraph 13, herein,
including any interest or fees payable by the Lender to lenders of
funds obtained by it in order to make or maintain its Fixed Rate Loans
hereunder and any amount prepaid shall be accompanied by accrued
interest on the principal repaid to the date of payment.
4. If the Loan Documents provide at the time of prepayment for periodic
principal payments on the Loan, any prepayment of principal shall be
applied against the
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scheduled installments of principal due on the Loan in the inverse
order of maturity. No amount repaid with respect to the Loan may be
reborrowed.
5. In the event that at the time of any such prepayment Loans are
outstanding of more than one Type, the amount prepaid shall be applied
first to any Domestic Rate Loan prior to application to any LIBOR Rate
Loans or Fixed Rate Loans.
6. Any premium due hereunder upon such prepayment shall be due and
payable upon any prepayment whatsoever, whether voluntary or
involuntary, to the extent permitted by law, and after acceleration of
the unpaid principal balance of the Loan after the occurrence of an
Event of Default.
17. All computations of interest on the Loans and of other fees to the extent
applicable shall be based on a 360-day year and paid for the actual number
of days elapsed. Except as otherwise provided in the definition of the
term "Interest Period" with respect to LIBOR Rate Loans, whenever a payment
hereunder or under any of the other Loan Documents becomes due on a day
that is not a Business Day, the due date for such payment shall be extended
to the next succeeding Business Day, and interest shall accrue during such
extension.
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