EXHIBIT 10(B)
APPENDIX A TO CREDIT AND SECURITY AGREEMENT (REVOLVER)
This Appendix A which is attached to and a part of the Credit and Security
Agreement (Revolver), dated as of July 9, 1997, between Astrex Inc., a Delaware
corporation, (the "Borrower"), X.X. Xxxxxxx, Inc., a Massachusetts corporation
("TFCI"), and Fleet National Bank, a national banking association, having
offices at Xxx Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000, (the "Lender" or
"Bank"), as same may be amended, supplemented or otherwise modified from time to
time (the "Credit Agreement"), is a glossary of certain defined terms which may
be used in the Credit Agreement and/or other Financing Documents and is part of
the substantive agreement of the Borrower and the Lender.
"ACCOUNT": as defined in the UCC as in effect in Connecticut on the date
hereof.
"AFFILIATE": of any Person shall mean (a) any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person or (b) any other Person who is a director or executive officer
of or is in the same family as (i) such Person, (ii) any Subsidiary of such
Person or (iii) any Person described in clause (a) above. For purposes of this
definition, control of a Person shall mean the power, direct or indirect, to (i)
vote 5% or more of the securities having ordinary voting power for the election
of directors of such Person or (ii) direct or cause the direction of the
management and policies of such Person whether by contract or otherwise.
"APPLICABLE LAW": all applicable provisions of all (a) constitutions,
statutes, laws, rules, regulations, guideline ordinances and orders of
governmental bodies, (b) Governmental Approvals and (c) orders, decisions,
rulings, judgments and decrees of all courts and arbitrators.
"AVEST" or "Avest": AVest, Inc., a Delaware corporation.
"BANKRUPTCY CODE": as defined in Section 7.1(i) of the Credit Agreement.
"BORROWER'S QUESTIONNAIRE": the Borrower's Questionnaire of even date
herewith.
"BORROWING BASE": as of any particular time, the sum of (i) eighty-five
percent (85%) of the amount of the then Eligible Receivables and (ii) the lesser
of (a) twenty-five percent (25%) of the amount of the then Eligible Inventory or
(b) $1,000,000.00; provided that it is further understood and agreed that for
purposes of calculating the Borrowing Base, (1) Eligible Inventory of TFCI shall
not exceed $500,000, (2) Eligible Receivables of TFCI shall not exceed $500,000
and (3) Eligible Inventory at the Massachusetts Site shall not exceed $500,000.
The Lender shall have the right to decrease any such percentages provided that
the Lender acts in good faith in doing so.
"BORROWING BASE CERTIFICATE": a borrowing base certificate in the form of
Exhibit C to the Credit Agreement or in such other form as the Lender may
reasonably request, signed by the President of the Borrower and TFCI or other
officer or employee of the Borrower or TFCI who is designated or authorized by
the Borrower or TFCI or its respective President to sign the Borrowing Base
Certificate (the Lender can conclusively presume that any officer or employee
who executes
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any such Certificate is so designated or authorized unless the Borrower or TFCI,
as the case may be, informs the Lender to the contrary prior to the applicable
Certificate being delivered). Any differences in terms used in this Agreement
and such Certificate shall not be interpreted against the Lender. At Lender's
election, the Borrowing Base Certificate may be signed by Borrower and TFCI
together or each of Borrower and TFCI may sign separate Borrowing Base
Certificates.
"BUSINESS DAY": any day other than Saturday, Sunday or other day in which
banks are authorized to be closed in the State of Connecticut, provided, that,
at the Lender's election, with respect to any Loans bearing (or to bear)
interest with reference to the LIBOR Rate, Business Day shall mean a Eurodollar
Business Day.
"CASH CAPITAL EXPENDITURES": with respect to any fiscal period, all capital
expenditures made by the Borrower or its Subsidiaries in such period except that
portion (if any) of such capital expenditures which are financed to the extent
such financing is permitted under the Credit Agreement.
"CLOSING DATE": July 9, 1997.
"CMLTD": with respect to any fiscal period, the aggregate of all principal
and other payments (excluding interest payments) made or payable during such
fiscal period on account of any and all Indebtedness (but excluding from such
Indebtedness for purposes of this definition any Indebtedness which, pursuant to
its original terms, was due within one year of the date such Indebtedness was
created) of the Borrower and/or its Subsidiaries, all on a consolidated basis in
accordance with GAAP.
"CODE": the Internal Revenue Code of 1986, as the same may be amended from
time to time.
"COLLATERAL": as it applies to the Borrower or TFCI, as the case may be,
all personal property and fixtures of the Borrower or TFCI, as the case may be
(the term "Debtor" as used below in this definition shall refer to each of the
Borrower and TFCI), of every kind, nature and description, including, without
limitation, all of the following, in each case whether now or hereafter existing
or now owned or hereafter acquired by any Debtor, or in which any Debtor
otherwise at any time has any right, title or interest, and wherever located and
whether or not the same is subject to Article 8 or 9 of the Uniform Commercial
Code or constitutes Collateral by reason of one or more than one of the
following clauses (or is mentioned once or more than once within a clause):
(a) all Receivables of any Debtor;
(b) all Equipment of any Debtor;
(c) all Inventory of any Debtor;
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(d) all General Intangibles of any Debtor;
(e) all of any Debtor's right, title and interest in and to all goods and
other property, whether or not delivered, (i) the sale or lease of which gives
or purports to give rise to any Receivable, including but not limited to all
merchandise returned or rejected by or repossessed from customers, or (ii)
securing any Receivable, including all of any Debtor's rights as an unpaid
vendor or lienor, including stoppage in transit, replevin and reclamation with
respect to such goods and other properties;
(f) all guaranties, letters of credit, mortgages and other Liens on real or
personal property, leases and other agreements or property securing or relating
to any Receivable or other Collateral, or acquired for the purpose of securing
and enforcing any item thereof;
(g) all documents of title (as defined in the UCC as adopted in Connecticut
as of the date hereof), policies and certificates of insurance, securities,
chattel paper, contracts or other documents or instruments either (i)
evidencing, pertaining to or in any other way relating to any and all goods (as
defined in the UCC as adopted in Connecticut as of the date hereof) of any
Debtor and/or (ii) in which any Debtor, at any time, otherwise has any right,
title or interest;
(h) to the extent not otherwise constituting Collateral, (i) all cash
collateral accounts and (ii) all other deposit and other bank accounts,
certificates of deposit, money, securities, instruments and other property of
any Debtor with, in the possession of, or in transit to or from, or under the
control of the Bank, and any and all other claims of any Debtor against the
Lender at any time existing;
(i) all claims (i) to any items of the Collateral, (ii) under warranties
relating to any of the Collateral, and (iii) against third parties for (A) (l)
loss, destruction, damage, requisition, confiscation, condemnation, seizure,
forfeiture or infringement of, or damage to, and (2) payments due or to become
due under leases, rentals or hires of, any and all of the Collateral and (B)
proceeds payable under, and unearned premiums with respect to, any and all
policies of insurance;
(j) any and all other rights to, and payments under (or other proceeds of),
any and all insurance policies and all rights to make claims thereunder;
(k) all ledger sheets, books, records, files, customer lists,
correspondence, computer hardware, printouts, computer programs, tapes, discs
and related data processing software (owned by any Debtor or in which it has an
interest), or any other documentation, which contain information identifying or
pertaining to any of the Collateral or any account debtor or other obligor, or
showing the amounts thereof or payments thereon or otherwise necessary or
helpful in the realization thereon or the collection thereof; and
(l) any and all accessions to or substitutions for, and any and all
products and proceeds
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(whether cash or non-cash) of, any of the above Collateral, in whatever form.
It is the intent of the parties that the Security Interest and Collateral
cover all personal property and fixtures of each of the Borrower and TFCI of
every kind, nature and description.
"COMMITMENT LETTER": that certain letter dated June 9, 1997, from Lender to
Borrower and accepted by the Borrower setting forth certain of the terms of the
terms hereof.
"COMPANY'S QUESTIONNAIRE": the Company's Questionnaire of even date
herewith.
"CONSOLIDATED CURRENT ASSETS": at any particular date, the aggregate amount
of assets of the Borrower and its Subsidiaries, on a consolidated basis, as of
such date which, in accordance with GAAP, may properly be classified as current
assets.
"CONSOLIDATED CURRENT LIABILITIES": at any particular date, the aggregate
amount of all liabilities of the Borrower and its Subsidiaries, on a
consolidated basis, as of such date which, in accordance with GAAP, may properly
be classified as current liabilities and also including, notwithstanding GAAP,
all Revolving Credit Loans outstanding as of such date.
"CONSOLIDATED EBIT": for the applicable period, consolidated net earnings
(or loss) of the Borrower and its Subsidiaries from continuing operations for
such period before interest expense and income taxes, and excluding any
extraordinary items, all determined in accordance with GAAP.
"CONSOLIDATED EBITDA": for the applicable period, the consolidated net
earnings (or loss) of the Borrower and its Subsidiaries from continuing
operations for such period before interest expense, income taxes, depreciation
and amortization, and excluding any extraordinary items, all determined in
accordance with GAAP.
"CONSOLIDATED LIABILITIES": at any particular date, the aggregate amount of
all Liabilities of the Borrower and its Subsidiaries, on a consolidated basis.
"CONSOLIDATED TANGIBLE NET WORTH": at any particular date, the consolidated
Tangible Net Worth of the Borrower and its Subsidiaries.
"CONTRACT": an indenture, agreement (other than the Credit Agreement),
other contractual restriction, lease, or instrument.
"DEFAULT": any event or circumstance which, with the giving of notice or
passage of time or both, would become an Event of Default.
"ELAPSED FISCAL PERIOD": shall mean the elapsed portion of any fiscal year
of the Borrower ending as of the last day of any fiscal quarter of such year.
For example the four Elapsed Fiscal
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Periods for the Borrower's fiscal year ending March 31, 1998 would be (i) April
1, 1997 to June 30, 1997, (ii) April 1, 1997 to September 30, 1997, (iii) April
1, 1997 to December 31, 1997 and (iv) April 1, 1997 to March 31, 1998.
"ELIGIBLE INVENTORY": Inventory of the Borrower or TFCI (valued at lesser
of cost to Borrower or TFCI (as the case may be) or market value, determined on
a first-in-first-out basis) which consists of finished goods and continually
meets the following additional criteria:
(i) It is in first class condition and not damaged in any way, not
obsolete, not in-transit goods or goods intended to be sold by consignment
sale and is saleable through normal trade channels in the Borrower's or
TFCI's normal course of business and meets all applicable legal
requirements;
(ii) (a) It is new and unused, (b) it is located at either (x) the
Plainview Site or (y) the Massachusetts Site and, if located at the
Massachusetts Site, a maximum of $500,000 of such inventory may be included
in the calculation of Eligible Inventory for purposes of determining the
Borrowing Base and (c) the Lender has a first priority attached and
perfected security interest in such Inventory;
(iii) It is owned by the Borrower or TFCI and is not subject to (a) any
Lien or (b) any dispute, and the Borrower or TFCI had and has the absolute,
lawful, undisputed and unquestioned right to own and sell same (and to
collect any Receivable which results from any potential sale thereof);
(iv) No event has occurred and no condition exists which could impede in
any material manner the Borrower's or TFCI's ability to continue to sell
such Inventory in the normal course (including for normal prices);
(v) Eligible Inventory may include only finished goods and shall
specifically exclude any raw materials or work-in-progress; and
(vi) It is not determined by the Lender to be ineligible for any other
reason generally accepted in the commercial finance business as a reason
for ineligibility.
"ELIGIBLE RECEIVABLES": the net amount of those Accounts of the Borrower or
TFCI (net of any applicable reserves) which arise in the ordinary course of
business and which continually meet the following requirements:
(i) The Account shall not be unpaid more than 90 days from the date of
original invoice and shall not be more than 60 days past due;
(ii) The account debtor with respect to the Account shall not
have more than 50% of its then total outstanding Accounts with
the Borrower or TFCI remaining
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unpaid more than 90 days from the applicable dates of original
invoice or more than 60 days past due;
(iii) The Account arose from the performance of services by the
Borrower or TFCI which have been fully and satisfactorily
performed or from the absolute sale of goods by the Borrower or
TFCI in which Borrower or TFI had the sole and complete ownership
and which have been shipped or delivered to the account debtor
evidencing which delivery the Borrower, TFCI or the Lender has
the possession of shipping and delivery receipts;
(iv) The Account is not subject to any prior or subsequent
assignment, claim, lien, security interest or other Lien except
that of the Lender and is not subordinated in any manner and the
Account does not arise from a Contract prohibiting the assignment
thereof or requiring the consent of any Person to such assignment
(unless such consent is obtained and Lender has given its prior
written approval of the form and substance of such consent);
(v) (a) The Account is not subject to (aa) any set-off,
counterclaim, claim, defense, allowance or adjustment other than
discounts (given in the Borrower's or TFCI's ordinary course of
business) for prompt payment shown on the invoice, or (bb)
dispute, objection or complaint (whether by the Account debtor
concerning its liability on the Account or otherwise), (b) the
goods, the sale of which gave rise to the Account, have not been
returned, rejected, lost or damaged and are not subject to any
right of return sales or guaranty or any consignment, and (c) the
Account is otherwise fully enforceable and the Borrower or TFCI
does not need to be qualified to do business in the State where
the Account Debtor is located in order to enforce the Account;
(vi) The Account arose in the ordinary course of business from a
bona-fide transaction and all transactions relating thereto are
in full compliance with Applicable Law;
(vii) The Account is not due from (a) the United States or any
agency, department or subdivision thereof unless the rights to
such Account have been validly assigned to the Lender in
accordance with all applicable requirements of Applicable Law; or
(b) any state or municipality or any agency, department or
subdivision thereof, or (c) any account debtor located outside
the United States unless such Account is secured by a letter of
credit from a bank acceptable to the Lender and which letter of
credit is in form and substance acceptable to the Lender;
(viii) No petition in bankruptcy or other application for relief
under the Bankruptcy Code or other insolvency law has been filed
with respect to the account debtor; and the account debtor has
not made an assignment for the benefit of
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creditors, become insolvent, or suspended or terminated business;
and the account debtor is generally paying its debts as they
become due;
(ix) The account debtor is not an Affiliate of the Borrower or
its shareholders;
(x) The Lender has a first priority attached and perfected
security interest in the Account;
(xi) The Account complies with Section 6.4(b) hereof and with any
other covenant, agreement, representation, warranty, or other
applicable term or provision of any Financing Document; and
(xii) The Account is not determined by the Lender to be
ineligible for any other reason generally accepted in the
commercial finance business as a reason for ineligibility.
In addition, in the event that the Lender in its reasonable discretion
determines that the Accounts owed by a particular account debtor constitute too
high a percentage of the then aggregate amount of Accounts, the Lender shall
have the right to lower the amount of Accounts of such account debtor which
shall be considered Eligible Receivables.
"ENVIRONMENTAL LAWS": all laws, rules, codes, ordinances, and regulations,
and all consent decrees, administrative orders or judgments relating to public
health or safety and/or the environment, including without limitation those
laws, rules, codes, ordinances and regulations identified in the definition of
the term "Hazardous Materials," all as amended, supplemented or otherwise
modified from time to time.
"EQUIPMENT": (a) all machinery, equipment, spare parts, tools, furniture,
and furnishings and instruments of conveyance, including motor vehicles, (b) all
other goods except goods that constitute Inventory, and (c) all replacements and
substitutions for, and all accessions to, the foregoing, in each case whether
now or hereafter existing or now owned or hereafter acquired by the Borrower or
TFCI, as the case may be, and wherever located and whether or not the same is
subject to Article 9 of the Uniform Commercial Code or constitutes a "fixture"
or constitutes Equipment by reason of any one or more than one of the preceding
clauses.
"ERISA AFFILIATE": any trade or business (whether or not incorporated) that
is member of a group of which the Borrower or any of its Subsidiaries is a
member and which is treated as a single employer under Section 414 of the Code.
"EUROCURRENCY RESERVE REQUIREMENTS": for any day, the aggregate (without
duplication) of the maximum reserve percentages, expressed as a decimal,
including, without limitation, basic, supplemental, marginal and emergency
reserves, in effect on such day, established by the Board of Governors of the
Federal Reserve System (or any successor) or any other banking authority,
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domestic or foreign, to which the Lender is subject, for "Eurocurrency
Liabilities" as defined in Regulation D. Such reserve percentages shall include,
without limitation, those imposed under Regulation D. Loans that are part of any
Libor Revolving Credit Portion shall be considered to constitute Eurocurrency
Liabilities and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to Lender under Regulation D. The Eurocurrency Reserve Requirements shall
be adjusted automatically on and as of the effective date of any change in the
Eurocurrency Reserve Requirements.
"EURODOLLAR BASE RATE": with respect to each day during each Interest
Period, the rate per annum (rounded upwards, if necessary, to the nearest 1/32
of one percent) for deposits in United States dollars for one month, three
month, or six month maturities (as applicable to such Interest Period), as the
case may be, which appears on the Telerate Page 3750 as of 11:00 a.m., London
time, on the day that is two Eurodollar Business Days prior to the commencement
of such Interest Period. If such rate does not appear on the Telerate Page 3750,
the rate to be utilized shall be the offered rate (rounded upwards, if
necessary, to the nearest 1/32 of one percent) which appears, or if two or more
such rates appear, the average (rounded upwards, if necessary, to the nearest
1/32 of one percent) of the offered rates which appear on the Reuters Screen
LIBO Page as of 11:00 a.m., London time, on the day that is two Eurodollar
Business Days prior to the commencement of such Interest Period.
If both the Telerate and Reuters systems are unavailable, then the rate
will be determined on the basis of the offered rates for which deposits in U.S.
dollars for a period equal to or approximately equal to the applicable Interest
Period are offered by four major banks (selected by the Lender) in the London
interbank market, at approximately 11:00 a.m., London time, on the day that is
two Eurodollar Business Days preceding the first day of the proposed Interest
Period. The principal London office of each of the four major banks will be
requested to provide a quotation of its U.S. dollar deposit offered rate. If at
least two such quotations are provided, the rate will be the arithmetic mean of
the quotations. If fewer than two quotations are provided as requested, the rate
will be the arithmetic mean of the rates quoted by major banks in New York City,
selected by the Lender, at approximately 11:00 a.m., New York City time, on the
date that is two Eurodollar Business Days prior to the first day of the
applicable Interest Period, for loans in U.S. dollars to leading European banks
for a period equal to or approximately equal to the applicable Interest Period.
In the event that the Bank is unable to obtain any such quotation as provided
above, interest shall accrue at a rate per annum equal to the Prime Rate.
"EURODOLLAR 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.
"EVENT OF DEFAULT": any of the events specified in Section 7.1 of the
Credit Agreement.
"EXISTING LENDER": Congress Financial Corporation, 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx
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Xxxx, XX 00000.
"FINANCIAL STATEMENTS": the consolidated balance sheet of the Borrower and
its Subsidiaries as at March 31, 1997 and the related statements of operations,
stockholder's equity and cash flows of the Borrower and such Subsidiaries for
the fiscal year then ended, and the accompanying footnotes together with the
report thereon, dated the date hereof, by KPMG Peat Marwick LLP, independent
public accountants, and the interim balance sheet of the Borrower and such
Subsidiaries as at June 30, 1997 and the related statements of operations and
source and use of funds for the three (3) month period then ended.
"FINANCING DOCUMENTS": (a) this Agreement, the Note, the Guaranty
Agreement, of even date herewith, between TFCI and the Lender, and the Guaranty
Agreement, of even date herewith, between AVest, and the Lender, the Pledge
Agreement, of even date herewith, from the Borrower to the Lender, the
Borrower's Questionnaire, and the Company's Questionnaire, any landlord's
waiver(s), and (b) any other written agreement, instrument, certificate,
financing statement or other document, whether now or hereafter existing,
executed or delivered in connection with or otherwise related to any of the
agreements, instruments or other documents referred to in clause (a) or
otherwise relating in any way to any of the Revolving Credit Loans or any
collateral, as any of the foregoing referred to in clause (a) or (b) may be
amended, supplemented or otherwise modified from time to time.
"FOREIGN JURISDICTIONS": as defined in Section 2.1 of the Credit Agreement.
"GAAP": generally accepted accounting principles as in effect in the United
States of America.
"GENERAL INTANGIBLES": (a) any and all intangible, personal property of the
Borrower or TFCI, as the case may be, of every kind, nature and description
including, without limitation, (i) rights to the payment or receipt of money or
other forms of consideration of any kind at any time now or hereafter owing or
to be owed to the Borrower or TFCI, as the case may be, (ii) claims for tax
refunds, (iii) causes of action, whether sounding in tort, contract, patent
infringement or otherwise and whether or not currently in litigation (provided,
that, it is understood and agreed that nothing contained in any Finance Document
shall, or shall be interpreted to, obligate the Lender to prosecute any such
cause of action), (iv) judgments, (v) patents, patent rights, trademarks,
trademark rights, copyrights, trade names, trade name rights, all rights under
applications for any of the foregoing, all rights under licenses relating to any
of the foregoing, and all other rights with respect to the foregoing, (vi)
inventions, (vii) trade secrets, (viii) designs, (ix) goodwill, (x) franchises,
(xi) customer lists, (xii) licenses, and (xiii) corporate and other business
records, and (b) any and all tangible, personal property, in the nature of
documents, records and the like, constituting, evidencing or otherwise relating
to any such intangible personal property, in each case whether now or hereafter
existing or now owned or hereafter acquired by the Borrower or TFCI and whether
the same is subject to Article 8 or 9 of the Uniform Commercial Code or
constitutes a General Intangible by reason of any one or more than one of the
preceding clauses.
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"GOVERNMENT APPROVAL": any authorization, consent, approval, license or
exemption of, registration or filing with, or report or notice to, any
governmental unit.
"GUARANTORS": X.X. Xxxxxxx, Inc., a Massachusetts corporation, AVest, Inc.,
a Delaware corporation, and any other Person (if any) who is a guarantor,
endorser, or surety with respect to any of Secured Obligations.
"HAZARDOUS MATERIAL": (aa) "hazardous substances" or "toxic substances" as
those terms are defined by the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"), 42 U.S.C. ss. 9601, ET SEQ., or the
Hazardous Materials Transportation Act, 49 U.S.C. ss.1801, all as amended and
amended after this date; (bb) "hazardous wastes," as that term is defined by the
Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. ss. 6901, ET SEQ., as
amended and amended after this date; (cc) any pollutant, contaminant or
hazardous, dangerous, or toxic chemicals, materials, or substances within the
meaning of any other applicable federal, state or local law, regulation,
ordinance, or requirement (including consent decrees and administrative orders)
relating to or imposing liability or standards of conduct concerning any
hazardous, toxic or dangerous waste substance or material, all as amended or
amended after this date; (dd) any other substance the presence of which requires
investigation or remediation under any law, regulation, ordinance or
requirement; (ee) crude oil or any fraction thereof which is liquid at standard
conditions of temperature and pressure (60 degrees Fahrenheit and 14.7 pounds
per square inch absolute); (ff) any radioactive material; (gg) asbestos in any
form or condition; and (hh) polychlorinated biphenyls (PCBs) or substances or
compounds containing PCBs.
"INDEBTEDNESS": of any Person at any particular date, without duplication,
(a) all indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services (other than Trade Debt) or which is
evidenced by a note, bond, debenture or similar instrument, (b) all obligations
of such Person upon which interest charges are customarily paid, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property or assets purchased by such Person, (d) all
obligations of such Person under capitalized leases, (e) all obligations of such
Person in respect of acceptances or letters of credit issued or created for the
account of such Person, (f) all liabilities secured by any Lien on any property
owned by such Person, whether or not such Person has assumed or otherwise become
liable for the payment thereof, and (g) all obligations of such Person in
respect of interest rate protection agreements, interest rate future agreements,
foreign currency exchange agreements and any other hedging arrangements.
"INSTITUTIONAL HOLDER": any bank, insurance company, savings and loan
association, trust company, investment company, charitable foundation, employee
benefit plan (as defined in ERISA) or other financial institution or
institutional investor.
"INTANGIBLE ASSETS" with respect to any Person, (i) those assets of such
Person which, in accordance with GAAP, are properly classified as intangible
assets on a balance sheet of such
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Person including without limitation goodwill, franchises, licenses, patents,
trademarks, tradenames, and copyrights, plus (ii) any advance or other loan from
such Person to any officer, shareholder, director or employee of such Person or
of any Affiliate of such Person.
"INTEREST EXPENSE": for the applicable period, all interest paid or payable
by the Borrower or any of its Subsidiaries in such period, including, but not
limited to, interest paid or payable on the Revolving Credit Loans and on all
other Indebtedness (including without limitation imputed interest on capitalized
lease obligations), determined in accordance with GAAP on a consolidated basis.
"INTEREST COVERAGE RATIO": for the applicable period, the ratio of
Consolidated EBIT for such period to Interest Expense for such period.
"INTEREST PERIOD": with respect to any Libor Revolving Credit Portion, any
period of 1, 3 or 6 months, commencing on a Eurodollar Business Day, selected as
provided for in Section 1.6(b) of the Credit Agreement and the definition of
LIBOR Request,
provided, however, that:
(1) any Interest Period (other than an Interest Period determined pursuant
to clause (3) below) that would otherwise end on a day that is not a
Eurodollar Business Day shall be extended to the next succeeding
Business Day unless such Eurodollar Business Day falls in the next
calendar month, in which case such Interest Period shall end on the
immediately preceding Eurodollar Business Day;
(2) any Interest Period that begins on the last Eurodollar Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (3) below, end on the last Eurodollar
Business Day of a calendar month;
(3) any Interest Period that would otherwise end after the Revolving
Credit Maturity Date shall end on the Revolving Credit Maturity Date;
and
(4) notwithstanding clause (2) above, no Interest Period shall (unless
otherwise agreed to by the Lender) have a duration of less than one
month and if any Interest Period would be for a period shorter than
one month, such Interest Period shall (unless the Lender otherwise
agrees) not be available hereunder.
"INVENTORY": (a) all inventory (as defined in the UCC, as adopted in the
State of Connecticut on the date hereof), including, but not limited to, (i) all
goods held by Borrower or TFCI, as the case may be, for sale or lease or to be
furnished under contracts of service or furnished under such contracts; (ii) all
work in process; (iii) all raw materials and other materials and supplies of
every nature and description used or which might be used in connection with the
manufacture,
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packing, shipping, advertising, selling, leasing or furnishing of such inventory
or otherwise used or consumed in Borrower's or TFCI's business; and (b) all
documents evidencing and general intangibles relating to any of the foregoing,
in each case whether now or hereafter existing or now owned or hereafter
acquired by Borrower or TFCI and wherever located and whether or not the same is
subject to Article 9 of the Uniform Commercial Code or constitutes Inventory by
reason of any one or more than one of the preceding clauses.
"LEGAL REQUIREMENT": any requirement imposed upon Lender by any law of the
United States of America or the United Kingdom or by any regulation, order,
interpretation, ruling or official directive (whether or not having the force of
law) of the Federal Reserve Board, the Bank of England or any other board,
central bank or governmental or administrative agency, institution or authority
of the United States of America, the United Kingdom or any political subdivision
of either thereof.
"LIABILITIES": as of any date, shall mean, without duplication, (i) all
indebtedness, obligations and liabilities of the Borrower and/or its
Subsidiaries which would be reflected as liabilities on a balance sheet, as of
such date, of the Borrower prepared in accordance with GAAP, (ii) all
obligations, indebtedness and other liabilities of the Borrower secured by any
Lien on any assets or other properties of such Person.
"LIBOR OPTION" or "LIBOR OPTION": the option granted pursuant to Section
1.6(b) of the Credit Agreement to have the interest on a portion of the
principal amount of the Revolving Credit Loans based on a LIBOR Rate.
"LIBOR RATE" or "LIBOR RATE": means, with respect to each day during each
Interest Period, the rate determined in accordance with the following formula:
EURODOLLAR BASE RATE
------------------------------------------------------
1.00 - Eurocurrency Reserve Requirements
"LIBOR REQUEST" or "LIBOR REQUEST": a notice in writing (or if permitted by
Lender, by telephone) from Borrower to Lender requesting that interest on a
LIBOR Revolving Credit Portion be based on the LIBOR Rate, specifying: (i) the
first day of the Interest Period; (ii) the length of the Interest Period
consistent with the definition of that term; and (iii) the dollar amount of the
LIBOR Revolving Credit Portion consistent with the definition of such term.
"LIBOR REVOLVING CREDIT PORTION" or "LIBOR REVOLVING CREDIT PORTION": that
portion of the Revolving Credit Loans specified in a LIBOR Request (including
any applicable portion of any Revolving Credit Loans which is being borrowed by
Borrower concurrently with such LIBOR Request) which is not less than $500,000
and is an integral multiple of $100,000 which does not exceed the outstanding
balance of Revolving Credit Loans not already subject to a LIBOR Option and,
which, as of the date of the LIBOR Request specifying such LIBOR Revolving
Credit Portion,
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has met the conditions for basing interest on the LIBOR Rate in Section 1.6(b)
of the Credit Agreement and the Interest Period of which has commenced and not
terminated.
"LIEN": any mortgage, security interest, pledge, title retention agreement,
hypothecation, assignment, lien, attachment, garnishment, levy, charge, or other
encumbrance of any kind.
"LOAN" and "LOANS": as those terms are respectively defined in Section 1.2
of the Credit Agreement.
"MASSACHUSETTS SITE": the facility operated by TFCI at 000 Xxxxx Xxxxxx,
Xxxx Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000 or such other location in Massachusetts as
may be approved in writing by the Lender.
"MATERIAL ADVERSE EFFECT": (a) with respect to any Person, a material
adverse effect upon such Person's business, assets, liabilities, financial
condition, results of operations or business prospects, (b) with respect to a
group of Persons "taken as a whole", a material adverse effect upon such
Persons' business, assets, liabilities, financial conditions, results of
operations or business prospects taken as a whole on, where appropriate, a
consolidated basis and (c) with respect to this Agreement, any Contract or any
other obligation, a material adverse effect, as to any party thereto, upon the
binding nature, validity or enforceability thereof or the ability of any party
thereto to perform thereunder.
"NATURAL RESOURCES": each and all of the atmosphere, air, waters, earth,
land, minerals, flora, fauna, fish, shellfish, wildlife, biota and/or other
natural resources.
"OBLIGOR LEGAL OPINION": an opinion of Xxxx X. Xxxxxx, Esq., counsel for
the Borrower and the Guarantors, dated the date of the making of the initial
Revolving Credit Loan.
"PATENTS": patents, patent rights or licenses, trademarks, trademark
rights, trade names, trade name rights, copyrights, and any other rights with
respect to the foregoing.
"PBGC": the Pension Benefit Guaranty Corporation referred to and defined in
ERISA.
"PERMITTED INDEBTEDNESS":
-------------------------
(a) any Revolving Credit Loans and any other Indebtedness owed to the
Lender;
(b) annual real property rental expenses of Borrower permitted under
Section 5.14 of the Credit Agreement;
(c) Indebtedness in respect of taxes, assessments, governmental
charges, levies and claims which at the time are not required to
be paid under Section 4.4 of the Credit Agreement;
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(d) Indebtedness secured by Permitted Liens; and
(e) operating leases for personal property entered into in the
ordinary course of business consistent with the Borrower's past
practices and permitted under Section 5.14 of the Credit
Agreement.
"PERMITTED LIEN":
-----------------
(a) Liens for taxes not yet due or which are being contested as
permitted by and in accordance with Section 4.4 of the Credit
Agreement;
(b) carriers', warehousemen's, mechanics' materialmen's, landlord's,
repairmen's or other like Liens arising in the ordinary course of
business and not overdue for a period of more than 30 days or (in
the case of mechanics' Liens only) the full amount of which has
been bonded;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations,
surety and appeal bonds, performance bonds and other obligations
of a like nature incurred in the ordinary course of business; and
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which,
in the aggregate, are not substantial in amount and which do not
in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct
of the business of the Borrower.
(f) purchase money security interests in equipment or capitalized
leases of equipment which (i) cover only the property purchased
or leased by Borrower, (ii) only secure the related purchase
money debt and (iii) which purchase money debt and capitalized
lease obligations do not exceed, in the aggregate, $50,000 at any
one time outstanding.
"PERMITTED USES": general working capital purposes of the Borrower,
provided that (i) the proceeds of the initial Revolving Credit Loan shall first
be used to pay off any Indebtedness to the Existing Lender and (ii) the Borrower
may, in the ordinary course of its business, loan a portion of the proceeds of
Revolving Credit Loans to TFCI provided that such loans to TFCI shall be no
greater than the approximate amount of the proceeds of Revolving Credit Loans
attributable to Eligible Receivables and Eligible Inventory of TFCI.
"PERSON": any individual, corporation, partnership, trust or unincorporated
organization, a government or any agency or political subdivision thereof, or
any other entity.
"PLAN": as defined in Section 2.17 of the Credit Agreement.
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"PLAINVIEW REAL ESTATE": the real estate (including all buildings and
improvements) located at 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000.
"PLAINVIEW SITE": the Borrower's offices and other facilities at the
Plainview Real Estate.
"PRIME RATE": Lender's annual rate of interest designated by Lender from
time to time as a standard for setting loan rates on certain types of loans, and
is not necessarily the lowest or best rate the Lender charges its customers.
Each change in such Prime Rate shall affect an adjustment in the applicable
interest rate of the day of such change. In the event the Lender no longer has a
prime rate, a reasonably comparable substitute rate (selected by the Lender)
shall be used in its place.
"PRIME RATE REVOLVING CREDIT PORTION": that portion of the Revolving Credit
Loans that is not subject to a LIBOR Option or is not otherwise bearing interest
with reference to the LIBOR Rate.
"RECEIVABLES": any and all rights and claims to the payment or receipt of
money or other forms of consideration or compensation of any kind at any time
now or hereafter owing or to be owing or claimed or which could be claimed to be
owing to Borrower (whether, if subject to the Uniform Commercial Code,
classified thereunder as accounts, contract rights, chattel paper, general
intangibles, instruments, securities or otherwise) including, but not limited
to, any and all such rights and claims in, to and under: (a) (i) all accounts,
(ii) contracts, including guaranties and contracts of insurance of all kinds,
including credit and key-man life insurance and property insurance, (iii)
letters of credit, (iv) chattel paper, (v) notes, (vi) drafts, (vii) instruments
and securities, (viii) documents, (ix) acceptances, (x) tax refunds, (xi)
judgments and (xii) all other debts, obligations and liabilities in whatever
form now or hereafter owing to Borrower, and (b) all causes of action, whether
in sounding in tort, contract or otherwise and whether or not currently in
litigation, in each case whether now or hereafter existing or now owned or
hereafter acquired by Borrower and whether or not the same is subject to Article
8 or 9 of the Uniform Commercial Code or constitutes a Receivable by reason of
one or more than one of the preceding clauses.
"REGULATION D": Regulation D of the Board of Governors of the Federal
Reserve System (or any successor) as from time to time in effect and all
official rulings and interpretations thereunder or thereof.
"RELEASE": any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping, disposing or other
discharging into the environment.
"RESPONSIBLE OFFICER": with respect to any corporation of the chief
executive officer or the president of such corporation and, with respect to any
partnership, any general partner of such partnership.
"REUTERS SCREEN LIBO PAGE": the display designated as page "LIBO" on the
Reuters
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Monitor Money Rates Service (or such other page as may replace the LIBO page on
that service for the purpose of displaying London interbank offered rates of
major banks).
"REVOLVING CREDIT DEFAULT RATE": a rate per annum equal to the Prime Rate
plus two (2%) percent (i.e., 200 basis points).
"REVOLVING CREDIT LOAN" and "REVOLVING CREDIT LOANS": as those terms are
respectively defined in Section 1.2 of the Credit Agreement including any and
all Libor Loans and Prime Rate Loans made pursuant to the Credit Agreement.
"REVOLVING CREDIT FACILITY": the revolving credit borrowing facility
established pursuant to the Credit Agreement.
"REVOLVING CREDIT INTEREST PAYMENT DATE": (i) with respect to the Prime
Rate Revolving Credit Portion, the first day of each and every month, commencing
on August 1, 1997; and (ii) with respect to any Libor Revolving Credit Portion,
the last day of the applicable Interest Period and also, in the case of an
Interest Period of 6 months, that date which is three months after the first day
of such Interest Period.
"REVOLVING CREDIT LOAN TERMINATION DATE": July 9, 1999.
"REVOLVING CREDIT MATURITY DATE": July 9, 1999.
"REVOLVING CREDIT MAXIMUM AMOUNT": at any time, the lesser of (i) Two
Million Five Hundred Thousand Dollars ($2,500,000) or (ii) the Borrowing Base at
such time.
"SECURED OBLIGATIONS": (a) all indebtedness, obligations and liabilities of
the Borrower to the Lender under this Agreement or the Note (including, but not
limited to, any and all principal, interest, and all amounts under Section 8.7
of the Credit Agreement) or any other Financing Documents, whether now existing
or hereafter arising and whether for payment or performance; and (b) all other
indebtedness, obligations, and liabilities of Borrower to the Lender of every
kind, nature and description, direct or indirect, secured or unsecured, joint or
several, absolute or contingent, due or to become due, whether for payment or
performance, now existing or hereafter arising (including, but not limited to,
any and all future advances), regardless of how the same arise or by what
instrument, agreement, or book account they may be evidenced, or whether
evidenced by any instrument, agreement, or book account, including, but not
limited to, all loans (including any loan by renewal or extension), all other
indebtedness, all guarantees, and all reimbursement obligations or other
obligations relating to letters of credit and the like; provided that, with
respect to TFCI and the Security Interest it grants hereunder in its Collateral,
Secured Obligations shall also mean, in addition to the above, all indebtedness,
obligations, and liabilities of TFCI to the Lender of every kind, nature and
description, direct or indirect, secured or unsecured, joint or several,
absolute or contingent, due or to become due, whether for payment or
performance, now existing or hereafter arising (including, but not limited to,
any and all future advances), regardless of how the
-17-
same arise or by what instrument, agreement, or book account they may be
evidenced, or whether evidenced by any instrument, agreement, or book account,
including, but not limited to, all loans (including any loan by renewal or
extension), all other indebtedness, all guarantees, and all reimbursement
obligations or other obligations relating to letters of credit and the like,
including without limitation any guaranty of TFCI under any of the Financing
Documents.
IT IS THE INTENT AND AGREEMENT OF THE PARTIES HERETO THAT ALL INDEBTEDNESS,
OBLIGATIONS AND LIABILITIES OF THE BORROWER (AND, IN THE CASE OF TFCI, OF TFCI)
TO THE LENDER (WHETHER NOW EXISTING OR HEREAFTER ARISING) BE SECURED BY THE
COLLATERAL, REGARDLESS OF WHETHER OR NOT SUCH INDEBTEDNESS, OBLIGATIONS OR
LIABILITIES ARE NOW CONTEMPLATED BY SUCH PARTIES. SUCH INDEBTEDNESS,
OBLIGATIONS, AND LIABILITIES MAY BE REDUCED TO ZERO OR OTHERWISE SATISFIED AND
THEREAFTER NEW INDEBTEDNESS, OBLIGATIONS AND LIABILITIES INCURRED AND ALL SUCH
INDEBTEDNESS, OBLIGATIONS AND LIABILITIES SHALL BE SECURED OBLIGATIONS
HEREUNDER.
"SECURITY INTEREST": shall mean the assignments, security interests, other
Liens and rights of setoff in, or with respect to, the Collateral provided for
or effected by this Agreement.
"SPECIFIED ADDITIONAL CLOSING DOCUMENTS":
(i) a true and complete copy of any such additional financial
statements of the Borrower as Lender shall reasonably request.
(ii) landlord's waivers.
(iii)Pay proceeds letter, termination agreement, mortgage releases
and UCC-3 termination statements executed by the Existing Lender.
(iv) Finance indemnity letter of Existing Lender.
(v) (a) current Borrowing Base Certificate;
(b) inventory listings;
(c) accounts receivable agings; and
(d) accounts receivable reconciliations.
(vi) title report.
(vii)stock certificates and stock powers, in blank with respect to
pledged stock of TFCI
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and AVest.
"SPECIFIED COVENANT TESTS": the covenants set forth in Sections 5.10 to
5.13 of the Credit Agreement.
"SPECIFIED PENNSYLVANIA AND CONNECTICUT TAX RETURNS: certain tax returns
for the States of Pennsylvania and Connecticut for prior years; provided,
however, that the total amount owing with respect to all such years does not
exceed $15,000 in the aggregate.
"SUBSIDIARY": as to any Person, shall mean a corporation, partnership or
other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests having
such power only by reason of the happening of a contingency) to elect a majority
of the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person.
"TANGIBLE NET WORTH": at any particular date, for any Person, the total
shareholder's equity (including capital stock, additional paid-in capital and
retained earnings after deducting treasury stock) which would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP,
LESS the aggregate book value of the Intangible Assets of such Person shown on
such balance sheet.
"TAX": in relation to any LIBOR Revolving Credit Portion and the applicable
LIBOR Rate, any tax, levy, impost, duty, deduction, withholding or charges of
whatever nature required by any Legal Requirement (i) to be paid by Lender
and/or (ii) to be withheld or deducted from any payment otherwise required
hereby to be made by Borrower to Lender; PROVIDED, that the term "Tax" shall not
include any taxes imposed upon the net income of Lender.
"TELERATE PAGE 3750": the display designated as "Page 3750" on the Dow
Xxxxx Telerate Service (or such other page as may replace that page on that
service for the purpose of displaying London interbank offered rates of major
banks).
"TRADE DEBT": Liabilities which consists of trade liabilities incurred in
the ordinary course of business and payable in accordance with customary trade
practices.
"TRADE DEBT DEFAULT AMOUNT": $50,000.
"UCC": the Uniform Commercial Code.
