Exhibit 1
REVOLVING CREDIT AGREEMENT
BY AND AMONG
XXXXX MEDICAL CORP.,
BANK OF BOSTON CONNECTICUT,
THE OTHER LENDERS WHICH ARE OR MAY
BECOME PARTIES HERETO
AND
BANK OF BOSTON CONNECTICUT, AS AGENT
MADE AS OF THE 9TH DAY OF JANUARY, 1996
TABLE OF CONTENTS
-----------------
(S)1. DEFINITIONS AND RULES OF INTERPRETATION......................................1
(S)1.1. Definitions......................................................1
(S)1.2. Rules of Interpretation..........................................1
(S)2. THE REVOLVING CREDIT FACILITY................................................1
(S)2.1. Commitment to Lend...............................................1
(a)..........................................1
(b)..........................................1
(S)2.2. Commitment Fee...................................................2
(S)2.3. Reduction of Total Commitment....................................2
(S)2.4. The Revolving Credit Notes.......................................2
(S)2.5. Interest on Revolving Credit Loans...............................3
(a)..........................................3
(b)..........................................3
Each Eurodollar Rate Loan shall bear interest for
the period commencing with the Drawdown Date
thereof and ending on the last day of each Interest
Period with respect thereto at the Eurodollar Rate
determined for such Interest Period plus the
Applicable Margin............................3
(c)..........................................4
(S)2.6. Requests for Revolving Credit Loans..............................4
(a)..........................................4
(b)..........................................4
(i)....................................4
(ii)...................................4
(iii)..................................4
(iv)...................................4
(S)2.7. Conversion Options...............................................4
(a)..........................................4
(i)....................................4
(ii)...................................4
(iii)..................................5
(iv)...................................5
(b)..........................................5
(c)..........................................5
(S)2.8. Funds for Revolving Credit Loan..................................5
(a)..........................................5
(b)..........................................6
(i)....................................6
(ii)...................................6
(iii)..................................6
(S)2.9. Settlement; Application of Repayments of Revolving Credit Loans..6
-ii-
(a) The Borrower and each of the Banks agree
that.........................................6
(i)....................................7
(ii)...................................7
(b)..........................................7
(i)....................................7
(ii)...................................7
(iii)..................................7
(iv)...................................7
(c)..........................................7
(i)....................................8
(ii)...................................8
(iii)..................................8
(d)..........................................8
(e)..........................................8
(S)2.10. Change in Borrowing Base...........................................9
(S)3. REPAYMENT OF THE REVOLVING CREDIT LOANS.......................................9
(S)3.1. Maturity............................................................9
(S)3.2. Mandatory Repayments of Revolving Credit Loans......................9
(a)..........................................9
(b)..........................................9
(S)3.3. Optional Repayments of Revolving Credit Loans.......................9
(S)4. LETTERS OF CREDIT.............................................................10
(S)4.1. Letter of Credit Commitments........................................10
(a)..........................................10
(i)....................................10
(ii)...................................10
(b)..........................................10
(c)..........................................10
(i)....................................11
(ii)...................................11
(d)..........................................11
(e)..........................................11
(S)4.2. Reimbursement Obligation of the Borrower............................11
(a)..........................................11
(i)....................................11
(ii)...................................11
(b)..........................................11
(c)..........................................12
(S)4.3. Letter of Credit Payments...........................................12
(a)..........................................12
(b)..........................................12
(c)..........................................12
(S)4.4. Obligations Absolute................................................13
(S)4.5. Reliance by Issuer..................................................13
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(S)4.6. Letter of Credit Fees...............................................13
(i)....................................14
(ii)...................................14
(iii)..................................14
(S)5. GENERAL PROVISIONS............................................................14
(S)5.1. Closing Fee.........................................................14
(S)5.2. Agent's Fee.........................................................14
(S)5.3. Funds for Payments..................................................14
(a)..........................................14
(b)..........................................14
(S)5.4. Computations........................................................15
(S)5.5. Inability to Determine Eurodollar Rate..............................15
(a)..........................................15
(b)..........................................15
(c)..........................................16
(S)5.6. Illegality..........................................................16
(a)..........................................16
(b)..........................................16
(S)5.7. Additional Costs, Etc...............................................16
(a)..........................................16
(b)..........................................16
(c)..........................................17
(d)..........................................17
(i)....................................17
(ii)...................................17
(iii)..................................17
(S)5.8. Capital Adequacy....................................................18
(a)..........................................18
(b)..........................................18
(S)5.9. Certificate.........................................................18
(S)5.10. Indemnity..........................................................18
(a)..........................................18
(b)..........................................19
(c)..........................................19
(S)5.11. Interest After Default.............................................19
(S)6. COLLATERAL SECURITY AND GUARANTIES............................................19
(S)7. REPRESENTATIONS AND WARRANTIES................................................19
(S)7.1. Corporate Authority.................................................19
(a)..........................................19
(i)....................................19
(ii)...................................19
(iii)..................................19
(b)..........................................20
(i)....................................20
(ii)...................................20
-iv-
(iii)..................................20
(iv)...................................20
(c)..........................................20
(S)7.2. Governmental Approvals..............................................20
(S)7.3. Title to Properties; Leases.........................................20
(S)7.4. Financial Statements................................................21
(S)7.5. No Material Changes, Etc............................................21
(S)7.6. Franchises, Patents, Copyrights, Etc................................21
(S)7.7. Litigation..........................................................21
(S)7.8. No Materially Adverse Contracts, Etc................................21
(S)7.9. Compliance with Other Instruments, Laws, Etc........................22
(S)7.10. Tax Status.........................................................22
(a)..........................................22
(b)..........................................22
(c)..........................................22
(S)7.11. No Event of Default................................................22
(S)7.12. Holding Company and Investment Company Acts........................22
(S)7.13. Absence of Financing Statements, Etc...............................22
(S)7.14. Perfection of Security Interest....................................23
(S)7.15. Certain Transactions...............................................23
(S)7.16. Regulations U and X................................................23
(S)7.17. Subsidiaries, etc..................................................23
(S)8. AFFIRMATIVE COVENANTS OF THE BORROWER.........................................23
(S)8.1. Punctual Payment....................................................24
(S)8.2. Maintenance of Office...............................................24
(S)8.3. Records and Accounts................................................24
(a)..........................................24
(b)..........................................24
(S)8.4. Financial Statements, Certificates and Information..................24
(a)..........................................24
(b)..........................................25
(c)..........................................25
(d)..........................................25
(e)..........................................25
(f)..........................................25
(g)..........................................25
(S)8.5. Notices.............................................................26
(a)..........................................26
(b)..........................................26
(i)....................................26
(ii)...................................26
(c)..........................................26
(d)..........................................26
(S)8.6. Corporate Existence; Maintenance of Properties......................27
(a)..........................................27
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(b)..........................................27
(c)..........................................27
(S)8.7. Insurance..............................................................27
(S)8.8. Taxes..................................................................27
(S)8.9. Inspection of Properties and Books, Etc................................28
(a)..........................................28
(b)..........................................28
(S)8.10. Compliance with Laws, Contracts, Licenses, and Permits.............28
(a)..........................................28
(b)..........................................28
(c)..........................................28
(d)..........................................28
(S)8.11. Employee Benefit Plans.............................................29
(i)....................................29
(ii)...................................29
(S)8.12. Use of Proceeds....................................................29
(S)8.13. Deposit of Accounts Receivable.....................................29
(a)..........................................29
(b)..........................................29
(c)..........................................30
(d)..........................................30
(e)..........................................30
(f)..........................................30
(g)..........................................30
(h)..........................................30
(S)8.14. Further Assurances.................................................31
(S)9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER....................................31
(S)9.1. Restrictions on Indebtedness........................................31
(a)..........................................31
(b)..........................................31
(i)....................................31
(ii)...................................31
(c)..........................................31
(d)..........................................31
(e)..........................................32
(f)..........................................32
(g)..........................................32
(h)..........................................32
(S)9.2. Restrictions on Liens...............................................32
(a)..........................................32
(b)..........................................32
(c)..........................................32
(d)..........................................32
(e)..........................................33
(i)....................................33
-vi-
(ii)...................................33
(iii)..................................33
(iv)...................................33
(v)....................................33
(vi)...................................33
(vii)..................................33
(viii).................................33
(ix) purchase moneys...................34
(x)....................................34
(S)9.3. Restrictions on Investments.........................................34
(a)..........................................34
(b)..........................................34
(c)..........................................34
(d)..........................................35
(e)..........................................35
(f)..........................................35
(g)..........................................35
(h)..........................................35
(i)..........................................35
(S)9.4. Distributions.......................................................35
(S)9.5. Merger, Consolidation and Disposition of Assets.....................35
(a) Without the prior written consent of the
Majority Banks, t............................35
(b)..........................................35
(S)9.6. Sale and Leaseback..................................................35
(S)9.7. Compliance with Environmental Laws..................................36
(a)..........................................36
(b)..........................................36
(c)..........................................36
(d)..........................................36
(e)..........................................36
(S)9.8. Employee Benefit Plans..............................................36
(a)..........................................36
(b)..........................................36
(c)..........................................36
(d)..........................................37
(S)10. FINANCIAL COVENANTS OF THE BORROWER..........................................37
(S)10.1. Earnings Before Interest and Taxes to Total Interest Expense.......37
(S)10.2. Cash Flow to Financial Obligations.................................37
(S)10.3. Liabilities to Tangible Net Worth Ratio............................37
(S)10.4. Consolidated Tangible Net Worth....................................37
(S)10.5. Capital Expenditures...............................................37
(S)11. CLOSING CONDITIONS...........................................................37
(S)11.1. Loan Documents.....................................................38
(S)11.2. Certified Copies of Charter Documents..............................38
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(a)..........................................38
(b)..........................................38
(S)11.3. Corporate Action...................................................38
(S)11.4. Incumbency Certificate.............................................38
(a).........................................38
(b).........................................38
(c).........................................38
(S)11.5. Validity of Liens..................................................38
(S)11.6. Perfection Certificates and UCC Search Results.....................39
(S)11.7. Certificates of Insurance..........................................39
(S)11.8. Borrowing Base Report..............................................39
(S)11.9. Accounts Receivable Aging Report...................................39
(S)11.10. Opinion of Counsel................................................39
Xxxxxxxxxxx & Xxxxxx, counsel to the Borrower and its Subsidiaries..........39
(S)11.11. Payment of Fees...................................................39
(S)11.12. Payoff Letter.....................................................40
(S)12. CONDITIONS TO ALL BORROWINGS.................................................40
(S)12.1. Representations True; No Event of Default..........................40
(S)12.2. Proceedings and Documents..........................................40
(S)12.3. Borrowing Base Report..............................................40
(S)13. EVENTS OF DEFAULT; ACCELERATION; ETC.........................................41
(S)13.1. Events of Default and Acceleration.................................41
(a)..........................................41
(b)..........................................41
(c)..........................................41
(d)..........................................41
(e)..........................................41
(f)..........................................41
(g)..........................................42
(h)..........................................42
(i)..........................................42
there shall remain in force, undischarged,
unsatisfied and unstayed, for more than thirty
days, whether or not consecutive, any final
judgment against the Borrower or any of its
Subsidiaries that, with other outstanding final
judgments, undischarged, against the Borrower
or any of its Subsidiaries exceeds in the
aggregate $100,000;..........................42
(j)..........................................42
(k)..........................................43
(l)..........................................43
(m)..........................................43
(n)..........................................43
(o)..........................................43
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(S)13.2. Termination of Commitments.........................................44
(S)13.3. Remedies...........................................................44
(S)13.4. Distribution of Collateral Proceeds................................45
(a).........................................45
(b).........................................45
(i)....................................45
(ii)...................................45
(c).........................................45
(d).........................................45
(S)14. SETOFF.......................................................................45
(a).........................................46
(b).........................................46
(S)15. THE AGENT....................................................................46
(S)15.1. Authorization......................................................46
(S)15.2. Employees and Agents...............................................46
(S)15.3. No Liability.......................................................47
(S)15.4. No Representations.................................................47
(S)15.5. Payments...........................................................47
(a).........................................47
(b).........................................48
(c).........................................48
(i)....................................48
(ii)...................................48
(S)15.6. Holders of Revolving Credit Notes.................................48
(S)15.7. Indemnity.........................................................49
(S)15.8. Agent as Bank.....................................................49
(S)15.9. Resignation.......................................................49
(S)15.10. Notification of Defaults and Events of Default...................49
(S)15.11. Duties in the Case of Enforcement................................50
(a).........................................50
(b).........................................50
(S)16. EXPENSES.....................................................................50
(a).........................................50
(b).........................................50
(c).........................................50
(S)17. INDEMNIFICATION..............................................................50
(a).........................................51
(b).........................................51
(c).........................................51
(d).........................................51
(e).........................................51
(S)18. SURVIVAL OF COVENANTS, ETC...................................................51
(S)19. ASSIGNMENT AND PARTICIPATION.................................................52
(S)19.1. Conditions to Assignment by Banks.................................52
(a).........................................52
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(b).........................................52
(c).........................................52
(d).........................................52
(i)....................................52
(ii)...................................52
(S)19.2. Certain Representations and Warranties; Limitations; Covenants.....52
(a).........................................53
(b).........................................53
(c).........................................53
(d).........................................53
(e).........................................53
(f).........................................53
(g).........................................53
(h).........................................53
(i).........................................53
(S)19.3. Register...........................................................54
(S)19.4. New Revolving Credit Notes.........................................54
(a).........................................54
(b).........................................54
(S)19.5. Participations.....................................................54
(a).........................................54
(b).........................................55
(c).........................................55
(S)19.6. Disclosure.........................................................55
(a).........................................55
(b).........................................55
(c).........................................55
(S)19.7. Assignee or Participant Affiliated with the Borrower...............55
(S)19.8. Miscellaneous Assignment Provisions................................56
(S)19.9. Assignment by Borrower.............................................56
(S)20. NOTICES, ETC.................................................................56
(a).........................................56
(b).........................................56
(c).........................................57
(i)....................................57
(ii)...................................57
(S)21. GOVERNING LAW................................................................57
(S)22. HEADINGS.....................................................................57
(S)23. COUNTERPARTS.................................................................57
(S)24. ENTIRE AGREEMENT, ETC........................................................58
(S)25. WAIVER OF JURY TRIAL.........................................................58
(a).........................................58
(b).........................................58
(S)26. CONSENTS, AMENDMENTS, WAIVERS, ETC...........................................58
(S)27. SEVERABILITY.................................................................59
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(S)28. COMMERCIAL TRANSACTION; PREJUDGMENT REMEDY WAIVER... 59
EXHIBITS AND SCHEDULES
----------------------
Exhibit A Revolving Credit Note
Exhibit B Borrowing Request
Exhibit C Compliance Certificate
Exhibit D Borrowing Base Report
Exhibit E Assignment and Acceptance
Schedule 1 Banks and Commitments
Schedule 2 Definitions
Schedule 7.7 Litigation
Schedule 7.15 Certain Transactions
Schedule 9.1 Existing Indebtedness
Schedule 9.2 Existing Liens
REVOLVING CREDIT
----------------
AGREEMENT
---------
This REVOLVING CREDIT AGREEMENT is made as of the 9th day of January, 1996,
by and among XXXXX MEDICAL CORP. (the "BORROWER"), a Delaware corporation having
its principal place of business at 000 Xxxx Xxxxxx Xxxxx, Xxx Xxxxxxx,
Xxxxxxxxxxx 00000, and BANK OF BOSTON CONNECTICUT and the other lending
institutions listed on Schedule 1 attached hereto and BANK OF BOSTON CONNECTICUT
as agent for itself and such other lending institutions.
(S)1. DEFINITIONS AND RULES OF INTERPRETATION.
---------------------------------------
(S)1.1. DEFINITIONS.
Except as otherwise expressly provided herein, all capitalized terms used
in this Credit Agreement, the exhibits hereto and any Revolving Credit Notes,
certificates, reports or other documents or instruments made or delivered
pursuant to or in connection with this Credit Agreement shall have the meanings
set forth for such terms in Schedule 2 hereto.
(S)1.2. RULES OF INTERPRETATION.
-----------------------
Except as otherwise expressly provided herein, the rules of interpretation
set forth in Schedule 2 hereto shall apply to this Credit Agreement, the
exhibits hereto and any Revolving Credit Notes, certificates, reports or other
documents or instruments made or delivered pursuant to or in connection with
this Credit Agreement.
(S)2. THE REVOLVING CREDIT FACILITY.
-----------------------------
(S)2.1. COMMITMENT TO LEND.
------------------
Subject to the terms and conditions set forth in this Credit Agreement,
each of the Banks severally agrees to lend to the Borrower and the Borrower may
borrow, repay, and reborrow from time to time between the Closing Date and the
Revolving Credit Loan Maturity Date upon notice by the Borrower to the Agent
given in accordance with (S)2.6, such sums as are requested by the Borrower up
to a maximum aggregate amount outstanding (after giving effect to all amounts
requested) at any one time equal to such Bank's Commitment minus such Bank's
Commitment Percentage of the sum of the Maximum Drawing Amount and all Unpaid
Reimbursement Obligations, provided that the sum of the outstanding amount of
the Revolving Credit Loans (after giving effect to all amounts requested) plus
the Maximum Drawing Amount and all Unpaid Reimbursement Obligations shall not at
any time exceed the lesser of
(a)
the Total Commitment and
(b)
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the Borrowing Base. The Revolving Credit Loans shall be made pro rata in
accordance with each Bank's Commitment Percentage. Each request for a Revolving
Credit Loan hereunder shall constitute a representation and warranty by the
Borrower that the conditions set forth in (S)11 and (S)12, in the case of the
initial Revolving Credit Loans to be made on the Closing Date, and (S)12, in the
case of all other Revolving Credit Loans, have been satisfied on the date of
such request.
(S)2.2. COMMITMENT FEE.
The Borrower agrees to pay to the Agent for the accounts of the Banks in
accordance with their respective Commitment Percentages a commitment fee
calculated at the rate of one-quarter of one percent (1/4%) per annum on the
average daily amount during each calendar quarter or portion thereof from the
date hereof to the Revolving Credit Loan Maturity Date by which the Total
Commitment minus the sum of the Maximum Drawing Amount and all Unpaid
Reimbursement Obligations exceeds the outstanding amount of Revolving Credit
Loans during such calendar quarter. The commitment fee shall be payable
quarterly in arrears on the first day of each calendar quarter for the
immediately preceding calendar quarter commencing on the first such date
following the date hereof, with a final payment on the Revolving Credit Maturity
Date or any earlier date on which the Commitments shall terminate.
(S)2.3. REDUCTION OF TOTAL COMMITMENT.
The Borrower shall have the right at any time and from time to time upon
three (3) Business Days' prior written notice to the Agent to reduce by $500,000
or an integral multiple thereof or terminate entirely the Total Commitment,
whereupon the Commitments of the Banks shall be reduced pro rata in accordance
with their respective Commitment Percentages of the amount specified in such
notice or, as the case may be, terminated. Promptly after receiving any notice
of the Borrower delivered pursuant to this (S)2.3, the Agent will notify the
Banks of the substance thereof. Upon the effective date of any such reduction
or termination, the Borrower shall pay to the Agent for the respective accounts
of the Banks the full amount of any commitment fee then accrued on the amount of
the reduction. No reduction or termination of the Commitments may be
reinstated.
(S)2.4. THE REVOLVING CREDIT NOTES.
The Revolving Credit Loans shall be evidenced by separate promissory notes
of the Borrower in substantially the form of Exhibit A hereto (each a "REVOLVING
CREDIT NOTE"), dated as of the Closing Date and completed with appropriate
insertions. One Revolving Credit Note shall be payable to the order of each
Bank in a principal amount equal to such Bank's Commitment or, if less, the
outstanding amount of all Revolving Credit Loans made by such Bank, plus
interest accrued thereon, as set forth below. The Borrower irrevocably
authorizes each Bank to make or cause to be made, at or about the time of the
Drawdown Date of any Revolving Credit Loan or at the time of receipt of any
payment of principal on such Bank's Revolving Credit Note, an appropriate
notation on such Bank's Revolving Credit Note Record reflecting the making of
such Revolving Credit Loan or (as the case may be) the
receipt of such payment. The outstanding amount of the Revolving Credit Loans
set forth on such Bank's Revolving Credit Note Record shall be prima facie
evidence of the principal amount thereof owing and unpaid to such Bank, but the
failure to record, or any error in so recording, any such amount on such Bank's
Revolving Credit Note Record shall not limit or otherwise affect the obligations
of the Borrower hereunder or under any Revolving Credit Note to make payments of
principal of or interest on any Revolving Credit Note when due.
(S)2.5. INTEREST ON REVOLVING CREDIT LOANS.
Except as otherwise provided in (S)5.11,
(a)
Each Base Rate Loan shall bear interest for the period commencing with the
Drawdown Date thereof and ending on the last day of each Interest Period with
respect thereto at the Base Rate.
(b)
Each Eurodollar Rate Loan shall bear interest for the period commencing
with the Drawdown Date thereof and ending on the last day of each Interest
Period with respect thereto at the Eurodollar Rate determined for such
Interest Period plus the Applicable Margin.
With respect to each Eurodollar Rate Loan and each fiscal quarter of the
Borrower, the Applicable Margin will be determined by the Agent after review of
the Leverage Ratio of the Borrower and its Subsidiaries for the fiscal quarter
immediately preceding such fiscal quarter, all as follows:
LEVERAGE RATIO FOR EACH FISCAL QUARTER APPLICABLE MARGIN
-------------------------------------------------------------
Equal to or less than 3.30:1.0 but 1.50%
greater than 2.30.1.0
-------------------------------------------------------------
Less than or equal to 2.30:1.0 but 1.25%
greater than 2.10:1.0
-------------------------------------------------------------
Less than or equal to 2.10:1.0 1.00%
-------------------------------------------------------------
The Agent will determine the Applicable Margin for each fiscal quarter on
the forty-fifth (45th) day following the last day of the immediately preceding
fiscal quarter by reference to the financial statements delivered to the Agent
and the Banks by the Borrower in accordance with the terms hereof with respect
to the immediately preceding fiscal quarter. The Leverage Ratio for the
immediately preceding fiscal quarter must meet the above referenced thresholds
for any decrease in the Applicable Margin to occur. In addition, if the Leverage
Ratio is in excess of 3.30:1.0 for any fiscal quarter or the Agent is unable to
determine the Leverage Ratio for such fiscal quarter because of the failure of
the Borrower to deliver the financial
-4-
statements required by the terms hereof, the Applicable Margin for the next
fiscal quarter shall be two percent (2%).
(c)
The Borrower promises to pay interest on each Revolving Credit Loan in
arrears on each Interest Payment Date with respect thereto.
(S)2.6. REQUESTS FOR REVOLVING CREDIT LOANS.
Except as provided for in the Cash Management Agreements with respect to
Base Rate Loans only, the Borrower shall give to the Agent written notice in the
form of Exhibit B hereto (or telephonic notice confirmed in a writing in the
form of Exhibit B hereto) of each Revolving Credit Loan requested hereunder (a
"LOAN REQUEST")
(a)
no later than 10:00 a.m. (Hartford time) on the proposed Drawdown Date of
any Base Rate Loan and
(b)
no less than three (3) Eurodollar Business Days prior to the proposed
Drawdown Date of any Eurodollar Rate Loan. Each such notice shall specify
(i)
the principal amount of the Revolving Credit Loan requested,
(ii)
the proposed Drawdown Date of such Revolving Credit Loan,
(iii)
the Interest Period for such Revolving Credit Loan and
(iv)
the Type of such Revolving Credit Loan. Promptly upon receipt of any such
notice, the Agent shall notify each of the Banks thereof. Each Loan Request
shall be irrevocable and binding on the Borrower and shall obligate the Borrower
to accept the Revolving Credit Loan requested from the Banks on the proposed
Drawdown Date. Each Loan Request shall be in a minimum aggregate amount of (1)
$1,000,000 or an integral multiple thereof for any Eurodollar Rate Loan and (2)
except as provided for in the Cash Management Agreements, $50,000 or an integral
multiple thereof for any Base Rate Loan.
(S)2.7. CONVERSION OPTIONS.
(a)
The Borrower may elect from time to time to convert any outstanding
Revolving Credit Loan to a Revolving Credit Loan of another Type, provided that
(i)
with respect to any such conversion of a Revolving Credit Loan to a Base
Rate Loan, the Borrower shall give the Agent at least one (1) Business Day's
prior written notice of such election;
(ii)
-5-
with respect to any such conversion of a Base Rate Loan to a Eurodollar Rate
Loan, the Borrower shall give the Agent at least three (3) Eurodollar Business
Days' prior written notice of such election;
(iii)
with respect to any such conversion of a Eurodollar Rate Loan into a Base Rate
Loan, such conversion shall only be made on the last day of the Interest Period
with respect thereto and
(iv)
no Base Rate Loan may be converted into a Eurodollar Rate Loan when any
Default or Event of Default has occurred and is continuing. On the date on
which such conversion is being made each Bank shall take such action as is
necessary to transfer its Commitment Percentage of such Revolving Credit Loans
to its Domestic Lending Office or its Eurodollar Lending Office, as the case may
be. All or any part of outstanding Revolving Credit Loans of any Type may be
converted into a Revolving Credit Loan of another Type as provided herein,
provided that any partial conversion shall be in an aggregate principal amount
of $1,000,000 or a whole multiple thereof. Each Conversion Request relating to
the conversion of a Revolving Credit Loan to a Eurodollar Rate Loan shall be
irrevocable by the Borrower.
(b)
Any Revolving Credit Loan of any Type may be continued as a Revolving
Credit Loan of the same Type upon the expiration of an Interest Period with
respect thereto by compliance by the Borrower with the notice provisions
contained in (S)2.7(a); provided that no Eurodollar 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 Base 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 officers of the Agent active upon the
Borrower's account have actual knowledge. The Agent shall notify the Banks
promptly when any such automatic conversion contemplated by this (S)2.7 is
scheduled to occur.
(c)
Any conversion to or from Eurodollar Rate Loans shall be in such amounts
and be made pursuant to such elections so that, after giving effect thereto, the
aggregate principal amount of all Eurodollar Rate Loans having the same Interest
Period shall not be less than $1,000,000 or a whole multiple of $1,000,000 in
excess thereof.
(S)2.8. FUNDS FOR REVOLVING CREDIT LOAN.
(a)
Not later than 11:00 a.m. (Hartford time) on the proposed Drawdown Date of
any Revolving Credit Loans, each of the Banks will make available to the Agent,
at its Head Office, in immediately available funds, the amount of such Bank's
Commitment Percentage of the amount of the requested Revolving Credit Loans.
Upon receipt from each Bank of such amount, and upon receipt of the documents
required by (S)(S)11 and 12 and the satisfaction of
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the other conditions set forth therein, to the extent applicable, the Agent will
make available to the Borrower the aggregate amount of such Revolving Credit
Loans made available to the Agent by the Banks. The failure or refusal of any
Bank to make available to the Agent at the aforesaid time and place on any
Drawdown Date the amount of its Commitment Percentage of the requested Revolving
Credit Loans shall not relieve any other Bank from its several obligation
hereunder to make available to the Agent the amount of such other Bank's
Commitment Percentage of any requested Revolving Credit Loans.
(b)
The Agent may, unless notified to the contrary by any Bank prior to a
Drawdown Date, assume that such Bank has made available to the Agent on such
Drawdown Date the amount of such Bank's Commitment Percentage of the Revolving
Credit Loans to be made on such Drawdown Date, and the Agent may (but it shall
not be required to), in reliance upon such assumption, make available to the
Borrower a corresponding amount. If any Bank makes available to the Agent such
amount on a date after such Drawdown Date, such Bank shall pay to the Agent on
demand an amount equal to the product of
(i)
the average computed for the period referred to in clause (iii) below, of
the weighted average interest rate paid by the Agent for federal funds acquired
by the Agent during each day included in such period, times
(ii)
the amount of such Bank's Commitment Percentage of such Revolving Credit
Loans, times
(iii)
a fraction, the numerator of which is the number of days that elapse from
and including such Drawdown Date to the date on which the amount of such Bank's
Commitment Percentage of such Revolving Credit Loans shall become immediately
available to the Agent, and the denominator of which is 365. A statement of the
Agent submitted to such Bank with respect to any amounts owing under this
paragraph shall be prima facie evidence of the amount due and owing to the Agent
by such Bank. If the amount of such Bank's Commitment Percentage of such
Revolving Credit Loans is not made available to the Agent by such Bank within
three (3) Business Days following such Drawdown Date, the Agent shall be
entitled to recover such amount from the Borrower on demand, with interest
thereon at the rate per annum applicable to the Revolving Credit Loans made on
such Drawdown Date.
(S)2.9. SETTLEMENT; APPLICATION OF REPAYMENTS OF REVOLVING CREDIT
LOANS.
(a) The Borrower and each of the Banks agree that
BKBCT shall (subject to its termination rights set forth in the Cash
Management Agreements and the conditions set forth herein) fund all Revolving
Credit Loans made in accordance with the provisions of this Credit Agreement and
pursuant to the terms of the Cash Management Agreements. Specifically, as long
as the Cash Management Agreements are in effect and the conditions precedent set
forth herein have been satisfied, BKBCT will make Revolving Credit Loans to the
Borrower which will be used by the Borrower to pay for any negative Operating
Account Net Balances (as defined in the Cash Management
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Agreements). The Borrower and BKBCT hereby also acknowledge that the "line of
credit" referred to in the Cash Management Agreements shall expressly refer to
this Credit Agreement. Without limiting the foregoing, prior to each Settlement
and subject to (S)2.9(e) hereof,
(i)
all payments of the principal of the Revolving Credit Loans shall be
credited to the account of BKBCT and
(ii)
the outstanding amount of Revolving Credit Loans made by BKBCT may exceed
BKBCT's Commitment Percentage of the aggregate outstanding amount of the
Revolving Credit Loans.
(b)
The Banks shall effect Settlements
(i)
on the last Business Day of each week,
(ii)
within one Business Day after each other date on which borrowings of
Revolving Credit Loans (net of payments of principal of Revolving Credit Loans
by the Borrower) or payments of principal of Revolving Credit Loans (net of
borrowings of Revolving Credit Loans by the Borrower) exceed $5,000,000,
(iii)
on the Revolving Credit Loan Maturity Date and
(iv)
within one Business day after any other date on which the outstanding principal
amount of the Revolving Credit Loans becomes due and payable hereunder (each
such date, a "SETTLEMENT DATE"). On the Business Day prior to each such
Settlement Date, the Agent shall give telephonic notice to the Banks of (A) the
respective outstanding amount of Revolving Credit Loans made by each Bank as at
the close of business on the prior day, (B) the amount that any Bank, as
applicable (the "SETTLING BANK"), shall pay to effect a Settlement (the
"SETTLEMENT AMOUNT") and (C) the portion (if any) of the aggregate Settlement
Amount to be paid to each Bank. A statement of the Agent submitted to the Banks
with respect to any amounts owing hereunder shall be prima facie evidence of the
amount due and owing. Each Settling Bank shall, not later than 11:00 a.m.
(Hartford, Connecticut time) on each Settlement Date, effect a wire transfer of
immediately available funds to the Agent at its head office in the amount of
such Bank's Settlement Amount. The Agent shall, as promptly as practicable
during normal business hours on each Settlement Date, effect a wire transfer of
immediately available funds to each Bank of the Settlement Amount to be paid to
such Bank. Subject to the terms of (S)2.9(e) hereof, all funds advanced by any
Bank as a Settling Bank pursuant to this (S)2.9(b) shall for all purposes be
treated as a Revolving Credit Loan made by such Settling Bank to the Borrower
and all funds received by any Bank pursuant to this (S)2.9(b) shall for all
purposes be treated as repayment of amounts owed by the Borrower with respect to
Revolving Credit Loans made by such Bank.
(c)
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The Agent may (unless notified to the contrary by a Settling Bank by 2:00
p.m. (Hartford, Connecticut time) on the Settlement Date) assume that each
Settling Bank has made available to the Agent on such Settlement Date the
Settlement Amount, and the Agent may (but shall not be required to), in reliance
upon such assumption, make available to each applicable Bank its share (if any)
of the aggregate Settlement Amount. If the Settlement Amount of such Settling
Bank is made available to the Agent by such Settling Bank (or, conversely, if
the Agent makes the Settlement Amount available to a Bank entitled thereto) on a
date after such Settlement Date, such Settling Bank shall pay the Agent (or,
conversely, the Agent shall pay such Bank entitled to such Settlement Amount) on
demand an amount equal to the product of
(i)
the average computed for the period referred to in clause (iii) below, of
the weighted average annual interest rate paid by the Agent or such Bank, as
applicable, for federal funds acquired by the Agent or such Bank, as applicable
during each day included in such period times
(ii)
the Settlement Amount, times
(iii)
a fraction, the numerator of which is the number of days that elapse from and
including such Settlement Date to but not including the date on which the
Settlement Amount shall become immediately available to the Agent or such Bank,
as applicable, and the denominator of which is 365. Upon payment of such amount
the Settling Bank shall be deemed to have delivered the Settlement Amount of
such Settling Bank on the Settlement Date and shall become entitled to interest
payable by the Borrower with respect to such Bank's Settlement Amount as if such
amount were delivered on the Settlement Date. If the Settlement Amount is not
in fact made available to the Agent by the Settling Bank within three (3)
Business Days of such Settlement Date, the Agent shall be entitled to debit the
Borrower's account with the Agent to recover such amount from the Borrower and
if the Borrower's account with the Agent does not contain sufficient funds the
Borrower agrees to deposit into the account such amount, with interest thereon
at the rate per annum applicable to any Revolving Credit Loans made on such
Settlement Date. The failure or refusal of any of the Banks to make available
to the Agent at the aforesaid time on any Settlement Date the amount of the
Settlement Amount representing Revolving Credit Loans to be made by such Bank on
such date shall not relieve any other Bank from its obligations hereunder to
make Settlements and Revolving Credit Loans on such Settlement Date or on any
subsequent Settlement Date but in no event shall any Bank or the Agent be
responsible or liable for the failure of any other Bank to make the Revolving
Credit Loans to be made by such other Bank.
(d)
Each payment by the Borrower of Revolving Credit Loans hereunder shall be
allocated among the Banks on the first Settlement Date after such payment, in
amounts determined to provide that after such application the outstanding amount
of Revolving Credit Loans of each Bank equals, as nearly as practicable, such
Bank's Commitment Percentage of all outstanding Revolving Credit Loans.
(e)
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The Borrower, the Banks and the Agent hereby agree that the Settlement
procedures set forth herein will not increase the amounts due and payable
hereunder or alter or affect the effective date of any payment made by the
Borrower with respect to the Obligations.
(S)2.10. CHANGE IN BORROWING BASE.
The Borrowing Base shall be determined monthly (or at such other interval as
may be specified pursuant to (S)8.4(e)) by the Agent by reference to the
Borrowing Base Report delivered to the Banks and the Agent pursuant to
(S)8.4(e).
(S)3. REPAYMENT OF THE REVOLVING CREDIT LOANS.
(S)3.1. MATURITY.
The Borrower promises to pay on the Revolving Credit Loan Maturity Date,
and there shall become absolutely due and payable on the Revolving Credit Loan
Maturity Date, all of the Revolving Credit Loans outstanding on such date,
together with any and all accrued and unpaid interest thereon.
(S)3.2. MANDATORY REPAYMENTS OF REVOLVING CREDIT LOANS.
If at any time the sum of the outstanding amount of the Revolving Credit
Loans, the Maximum Drawing Amount and all Unpaid Reimbursement Obligations
exceeds the lesser of
(a)
the Total Commitment and
(b)
the Borrowing Base, then the Borrower shall immediately pay the amount of such
excess to the Agent for the respective accounts of the Banks for application:
first, to any Unpaid Reimbursement Obligations; second, to the Revolving Credit
Loans; and third, to provide to the Agent cash collateral for Reimbursement
Obligations as contemplated by (S)4.2(b) and (c). Each payment of any Unpaid
Reimbursement Obligations or prepayment of Revolving Credit Loans shall be
allocated among the Banks, in proportion, as nearly as practicable, to each
Reimbursement Obligation or (as the case may be) the respective unpaid principal
amount of each Bank's Revolving Credit Note, with adjustments to the extent
practicable to equalize any prior payments or repayments not exactly in
proportion. At the written request of the Borrower, the Agent shall provide the
Borrower with an accounting of any application of funds made by the Agent and
the Banks pursuant to this (S)3.2.
(S)3.3. OPTIONAL REPAYMENTS OF REVOLVING CREDIT LOANS.
The Borrower shall have the right, at its election, to repay the
outstanding amount of the Revolving Credit Loans, as a whole or in part, at any
time without penalty or premium, provided that any full or partial prepayment of
the outstanding amount of any Eurodollar Rate Loans pursuant to this (S)3.3 may
be made only on the last day of the Interest Period relating thereto. The
Borrower shall give the Agent prior written notice (a) except as expressly
provided for in (S)8.13 hereof, no later than 10:00 a.m., Hartford time of any
proposed prepayment pursuant to this (S)3.3 of Base Rate Loans, and (b) at least
three (3)
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Eurodollar Business Days' notice of any proposed prepayment pursuant to this
(S)3.3 of Eurodollar Rate Loans, in each case specifying the proposed date of
prepayment of Revolving Credit Loans and the principal amount to be prepaid.
Except as expressly provided for in (S)8.13 hereof with respect to Base Rate
Loans only, each such partial prepayment of the Revolving Credit Loans shall be
in an integral multiple of (1) $1,000,000 with respect to Eurodollar Rate Loans
and (2) $50,000 with respect to Base Rate Loans, shall be accompanied by the
payment of accrued interest on the principal prepaid to the date of prepayment
and shall be applied, in the absence of instruction by the Borrower, first to
the principal of Base Rate Loans and then to the principal of Eurodollar Rate
Loans or both, at the Agent's option. Each partial prepayment shall be allocated
among the Banks, in proportion, as nearly as practicable, to the respective
unpaid principal amount of each Bank's Revolving Credit Note, with adjustments
to the extent practicable to equalize any prior repayments not exactly in
proportion.
(S)4. LETTERS OF CREDIT.
(S)4.1. LETTER OF CREDIT COMMITMENTS.
(a)
Subject to the terms and conditions hereof and the execution and delivery
by the Borrower of a letter of credit application on the Agent's customary form
(a "LETTER OF CREDIT APPLICATION"), the Agent (the Agent being the sole issuer
of the Letters of Credit) on behalf of the Banks and in reliance upon the
agreement of the Banks set forth in (S)4.1(d) and upon the representations and
warranties of the Borrower contained herein, agrees, in its individual capacity,
to issue, extend and renew for the account of the Borrower one or more
documentary letters of credit (individually, a "LETTER OF CREDIT"), in such form
as may be requested from time to time by the Borrower and agreed to by the
Agent; provided, however, that, after giving effect to such request,
(i)
the sum of the aggregate Maximum Drawing Amount and all Unpaid Reimbursement
Obligations shall not exceed $5,000,000 at any one time and
(ii)
the sum of (A) the Maximum Drawing Amount on all Letters of Credit, (B) all
Unpaid Reimbursement Obligations, and (C) the amount of all Revolving Credit
Loans outstanding shall not exceed the lesser of (1) the Total Commitment and
(2) the Borrowing Base.
(b)
Each Letter of Credit Application shall be completed to the reasonable
satisfaction of the Agent. In the event that any provision of any Letter of
Credit Application shall be inconsistent with any provision of this Credit
Agreement, then the provisions of this Credit Agreement shall, to the extent of
any such inconsistency, govern.
(c)
Each Letter of Credit issued, extended or renewed hereunder shall, among
other things,
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(i)
provide for the payment of sight or time drafts for honor thereunder when
presented in accordance with the terms thereof and when accompanied by the
documents described therein, and
(ii)
have an expiry date no later than the date which is fourteen (14) days (or,
if the beneficiary is located outside of the United States of America, forty-
five (45) days) prior to the Revolving Credit Loan Maturity Date. Each Letter of
Credit so issued, extended or renewed shall be subject to the Uniform Customs.
(d)
Each Bank severally agrees that it shall be absolutely liable, without
regard to the occurrence of any Default or Event of Default or any other
condition precedent whatsoever, to the extent of such Bank's Commitment
Percentage, to reimburse the Agent on demand for the amount of each draft paid
by the Agent under each Letter of Credit to the extent that such amount is not
reimbursed by the Borrower pursuant to (S)4.2 (such agreement for a Bank being
called herein the "LETTER OF CREDIT PARTICIPATION" of such Bank).
(e)
Each such payment made by a Bank shall be treated as the purchase by such
Bank of a participating interest in the Borrower's Reimbursement Obligation
under (S)4.2 in an amount equal to such payment. Each Bank shall share in
accordance with its participating interest in any interest which accrues
pursuant to (S)4.2.
(S)4.2. REIMBURSEMENT OBLIGATION OF THE BORROWER.
In order to induce the Agent to issue, extend and renew each Letter of
Credit and the Banks to participate therein, the Borrower hereby agrees to
reimburse or pay to the Agent, for the account of the Agent or (as the case may
be) the Banks, with respect to each Letter of Credit issued, extended or renewed
by the Agent hereunder,
(a)
except as otherwise expressly provided in (S)4.2(b) and (c), on each date that
any draft presented pursuant to such Letter of Credit is honored by the Agent,
or the Agent otherwise makes a payment pursuant thereto,
(i)
the amount paid by the Agent pursuant to such Letter of Credit, and
(ii)
the amount of any taxes, fees or charges whatsoever incurred by the Agent or any
Bank in connection with any payment made by the Agent or any Bank pursuant to
such Letter of Credit,
(b)
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upon the reduction (but not termination) of the Total Commitment to an
amount less than the Maximum Drawing Amount, an amount equal to such difference,
which amount shall be held by the Agent for the benefit of the Banks and the
Agent as cash collateral for all Reimbursement Obligations, and
(c)
upon the termination of the Total Commitment, or the acceleration of the
Reimbursement Obligations with respect to all Letters of Credit in accordance
with (S)13, an amount equal to the then Maximum Drawing Amount on all Letters of
Credit, which amount shall be held by the Agent for the benefit of the Banks and
the Agent as cash collateral for all Reimbursement Obligations.
Each such payment shall be made to the Agent at the Agent's Head Office in
immediately available funds. Interest on any and all amounts remaining unpaid
by the Borrower under this (S)4.2 at any time from the date such amounts become
due and payable (whether as stated in this (S)4.2, by acceleration or otherwise)
until payment in full (whether before or after judgment) shall be payable to the
Agent on demand at the rate specified in (S)5.11 for overdue principal on the
Revolving Credit Loans.
(S)4.3. LETTER OF CREDIT PAYMENTS.
If any draft shall be presented or other demand for payment shall be made
pursuant to any Letter of Credit, the Agent shall notify the Borrower of the
date and amount of the draft presented or demand for payment and of the date and
time when it expects to pay such draft or honor such demand for payment. If the
Borrower fails to reimburse the Agent as provided in (S)4.2 on or before the
date that such draft is paid or other payment is made by the Agent, the Agent
may at any time thereafter notify the Banks of the amount of any such Unpaid
Reimbursement Obligation. No later than 3:00 p.m. (Hartford time) on the
Business Day next following the receipt of such notice, each Bank shall make
available to the Agent, at its Head Office, in immediately available funds, such
Bank's Commitment Percentage of such Unpaid Reimbursement Obligation, together
with an amount equal to the product of
(a)
the average, computed for the period referred to in clause (c) below, of the
weighted average interest rate paid by the Agent for federal funds acquired by
the Agent during each day included in such period, times
(b)
the amount equal to such Bank's Commitment Percentage of such Unpaid
Reimbursement Obligation, times
(c)
a fraction, the numerator of which is the number of days that elapse from and
including the date the Agent paid the draft presented for honor or otherwise
made payment to the date on which such Bank's Commitment Percentage of such
Unpaid Reimbursement obligation shall become immediately available to the Agent,
and the denominator of which is 365. The responsibility of the Agent to the
Borrower and the Banks shall be only to determine that the
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documents (including each draft) delivered under each Letter of Credit in
connection with such presentment shall be in conformity in all material respects
with such Letter of Credit.
(S)4.4. OBLIGATIONS ABSOLUTE.
The Borrower's obligations under this (S)4 shall be absolute and
unconditional under any and all circumstances and irrespective of the occurrence
of any Default or Event of Default or any condition precedent whatsoever (other
than the notification required by (S)4.3 hereof) or any setoff, counterclaim or
defense to payment which the Borrower may have or have had against the Agent,
any Bank or any beneficiary of a Letter of Credit. The Borrower further agrees
with the Agent and the Banks that the Agent and the Banks shall not be
responsible for, and the Borrower's Reimbursement Obligations under (S)4.2 shall
not be affected by, among other things, the validity or genuineness of documents
or of any endorsements thereon, even if such documents should in fact prove to
be in any or all respects invalid, fraudulent or forged, or any dispute between
or among the Borrower, the beneficiary of any Letter of Credit or any financing
institution or other party to which any Letter of Credit may be transferred or
any claims or defenses whatsoever of the Borrower against the beneficiary of any
Letter of Credit or any such transferee. The Agent and the Banks shall not be
liable for any error, omission, interruption or delay in transmission, dispatch
or delivery of any message or advice, however transmitted, in connection with
any Letter of Credit. The Borrower agrees that any action taken or omitted by
the Agent or any Bank under or in connection with each Letter of Credit and the
related drafts and documents, if done in good faith, without gross negligence
and without willful misconduct by the Agent, shall be binding upon the Borrower
and shall not result in any liability on the part of the Agent or any Bank to
the Borrower.
(S)4.5. RELIANCE BY ISSUER.
To the extent not inconsistent with (S)4.4, the Agent shall be entitled to
rely, and shall be fully protected in relying upon, any Letter of Credit, draft,
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person or Persons and upon advice and statements of legal
counsel, independent accountants and other experts selected by the Agent. The
Agent shall be fully justified in failing or refusing to take any action under
this Agreement unless it shall first have received such advice or concurrence of
the Majority Banks as it reasonably deems appropriate or it shall first be
indemnified to its reasonable satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement in
accordance with a request of the Majority Banks, and such request and any action
taken or failure to act pursuant thereto shall be binding upon the Banks and all
future holders of the Revolving Credit Notes or of a Letter of Credit
Participation.
(S)4.6. LETTER OF CREDIT FEES.
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The Borrower shall, on the date of issuance or any extension or renewal of
any Letter of Credit and at such other time or times as such charges are
customarily made by the Agent, pay to the Agent in respect of each Letter of
Credit
(i)
the Agent's customary issuance, negotiation and processing fees or
amendment fee, as the case may be, plus
(ii)
the Agent's customary document examination fee plus
(iii)
an amount (in each case, a "LETTER OF CREDIT FEE") equal to one half of one
percent (1/2%) per annum on the face amount of such Letter of Credit with all
Letter of Credit Fees due and payable monthly in arrears on the first day of
each calendar month, commencing on the first such date following the Closing
Date. Seventy-five percent (75%) of each Letter of Credit Fee to be for the
accounts of the Banks in accordance with their respective Commitment Percentages
and the remaining twenty-five percent (25%) of such fee for the Agent's sole
account.
(S)5. GENERAL PROVISIONS.
(S)5.1. CLOSING FEE.
The Borrower agrees to pay to the Agent on the Closing Date a closing fee
and certain other fees in the amounts set forth in a certain letter agreement of
even date herewith between the Agent and the Banks (which letter agreement shall
constitute a Loan Document hereunder).
(S)5.2. AGENT'S FEE.
The Borrower shall pay to the Agent quarterly in arrears, for the Agent's
own account, on the first day of each calendar quarter, commencing on April 1,
1996, an Agent's fee in the amount of $2,500.00.
(S)5.3. FUNDS FOR PAYMENTS.
(a)
All payments of principal, interest, Reimbursement Obligations, commitment
fees, Letter of Credit Fees and any other amounts due hereunder or under any of
the other Loan Documents shall be made to the Agent, for the respective accounts
of the Banks and the Agent, at the Agent's Head Office or at such other location
in the Hartford, Connecticut, area that the Agent may from time to time
designate, in each case in immediately available funds.
(b)
All payments by the Borrower hereunder and under any of the other Loan
Documents shall be made without setoff or counterclaim and free and clear of and
without deduction for
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any taxes, levies, imposts, duties, charges, fees, deductions, withholdings,
compulsory loans, restrictions or conditions of any nature now or hereafter
imposed or levied by any jurisdiction or any political subdivision thereof or
taxing or other authority therein unless the Borrower is compelled by law to
make such deduction or withholding. If any such obligation is imposed upon the
Borrower with respect to any amount payable by it hereunder or under any of the
other Loan Documents, the Borrower will pay to the Agent, for the account of the
Banks or (as the case may be) the Agent, on the date on which such amount is due
and payable hereunder or under such other Loan Document, such additional amount
in Dollars as shall be necessary to enable the Banks or the Agent to receive the
same net amount which the Banks or the Agent would have received on such due
date had no such obligation been imposed upon the Borrower. The Borrower will
deliver promptly to the Agent certificates or other valid vouchers for all taxes
or other charges deducted from or paid with respect to payments made by the
Borrower hereunder or under such other Loan Document.
(S)5.4. COMPUTATIONS.
All computations of interest on the Revolving Credit Loans and of
commitment fees or Letter of Credit Fees 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 Eurodollar 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. The outstanding amount of the Revolving Credit Loans as
reflected on the Revolving Credit Note Records from time to time shall be
considered correct and binding on the Borrower absent manifest error; provided,
that the Borrower may, within ninety (90) days of its receipt of any statement,
notification or other accounting of payments made or amounts due and payable
hereunder, notify the Agent and the Banks of any error in such statement,
notification or accounting; and provided, further, none of the foregoing shall
alter or affect in any way the Borrower's payment or performance of any of the
Obligations hereunder or under any of the Loan Documents until such alleged
error has been resolved to the reasonable satisfaction of the Borrower, the
Agent and the Banks.
(S)5.5. INABILITY TO DETERMINE EURODOLLAR RATE.
In the event, prior to the commencement of any Interest Period relating to
any Eurodollar Rate Loan, the Agent shall determine or be notified by the
Majority Banks that adequate and reasonable methods do not exist for
ascertaining the Eurodollar Rate that would otherwise determine the rate of
interest to be applicable to any Eurodollar Rate Loan during any Interest
Period, the Agent shall forthwith give notice of such determination (which shall
be conclusive and binding on the Borrower and the Banks) to the Borrower and the
Banks. In such event
(a)
any Loan Request or Conversion Request with respect to Eurodollar Rate
Loans shall be automatically withdrawn and shall be deemed a request for Base
Rate Loans,
(b)
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each Eurodollar Rate Loan will automatically, on the last day of the then
current Interest Period relating thereto, become a Base Rate Loan, and
(c)
the obligations of the Banks to make Eurodollar Rate Loans shall be
suspended until the Agent or the Majority Banks determine that the circumstances
giving rise to such suspension no longer exist, whereupon the Agent or, as the
case may be, the Agent upon the instruction of the Majority Banks, shall so
notify the Borrower and the Banks.
(S)5.6. ILLEGALITY.
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 any Bank to make or maintain Eurodollar Rate Loans,
such Bank shall forthwith give notice of such circumstances to the Borrower and
the other Banks and thereupon
(a)
the commitment of such Bank to make Eurodollar Rate Loans or convert Base
Rate Loans to Eurodollar Rate Loans shall forthwith be suspended and
(b)
such Bank's Revolving Credit Loans then outstanding as Eurodollar Rate
Loans, if any, shall be converted automatically to Base Rate Loans on the last
day of each Interest Period applicable to such Eurodollar Rate Loans or within
such earlier period as may be required by law. The Borrower hereby agrees
promptly to pay the Agent for the account of such Bank, upon demand by such
Bank, any additional amounts necessary to compensate such Bank for any costs
incurred by such Bank in making any conversion in accordance with this (S)5.6,
including any interest or fees payable by such Bank to lenders of funds obtained
by it in order to make or maintain its Eurodollar Loans hereunder.
(S)5.7. ADDITIONAL COSTS, ETC.
If any change in any present applicable law or any future applicable
law, which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Bank or the Agent by any central bank or other fiscal,
monetary or other authority (whether or not having the force of law) (each, a
"CHANGE OF LAW"), shall:
(a)
subject any Bank or the Agent to any tax, levy, impost, duty, charge, fee,
deduction or withholding of any nature with respect to this Credit Agreement,
the other Loan Documents, any Letters of Credit, such Bank's Commitment or the
Revolving Credit Loans (other than taxes based upon or measured by the income or
profits of such Bank or the Agent), or
(b)
-17-
materially change the basis of taxation (except for changes in taxes on
income or profits) of payments to any Bank of the principal of or the interest
on any Revolving Credit Loans or any other amounts payable to any Bank or the
Agent under this Credit Agreement or any of the other Loan Documents, or
(c)
impose or increase or render applicable (other than to the extent
specifically provided for elsewhere in this Credit Agreement) any special
deposit, reserve, assessment, liquidity, capital adequacy or other similar
requirements (whether or not having the force of law) against assets held by, or
deposits in or for the account of, or Revolving Credit Loans by, or letters of
credit issued by, or commitments of an office of any Bank, or
(d)
impose on any Bank or the Agent any other conditions or requirements with
respect to this Credit Agreement, the other Loan Documents, any Letters of
Credit, the Revolving Credit Loans, such Bank's Commitment, or any class of
Revolving Credit Loans, letters of credit or commitments of which any of the
Revolving Credit Loans or such Bank's Commitment forms a part, and the net
result of any of the foregoing (after taking into account the effects of all
Changes of Law since the date hereof which reduce any Bank's costs or increase
any amount payable to any Bank or the Agent) is
(i)
to increase the cost to any Bank of making, funding, issuing, renewing,
extending or maintaining any of the Revolving Credit Loans or such Bank's
Commitment or any Letter of Credit, or
(ii)
to reduce the amount of principal, interest, Reimbursement Obligation or
other amount payable to such Bank or the Agent hereunder on account of
such Bank's Commitment, any Letter of Credit or any of the Revolving
Credit Loans, or
(iii)
to require such Bank or the Agent to make any payment or to forego any
interest or Reimbursement Obligation or other sum payable hereunder, the
amount of which payment or foregone interest or Reimbursement Obligation or
other sum is calculated by reference to the gross amount of any sum
receivable or deemed received by such Bank or the Agent from the Borrower
hereunder,
then, and in each such case, the Borrower will, upon demand made by such Bank or
(as the case may be) the Agent at any time and from time to time and as often as
the occasion therefor may arise, pay to such Bank or the Agent such additional
amounts as will be sufficient to compensate such Bank or the Agent for such
additional cost, reduction, payment
-18-
or foregone interest or Reimbursement Obligation or other sum. Each Bank shall,
to the extent possible, allocate such cost increases among its customers in good
faith and on an acceptable basis.
(S)5.8. CAPITAL ADEQUACY.
If after the date hereof any Bank or the Agent determines that
(a)
the adoption of or change in any law, governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law) (each, a "LEGAL
REQUIREMENT") regarding capital requirements for banks or bank holding companies
or any change in the interpretation or application thereof by a court or
governmental authority with appropriate jurisdiction, or
(b)
compliance by such Bank or the Agent or any corporation controlling such
Bank or the Agent with any Legal Requirement of any such entity regarding
capital adequacy, has the net effect (after taking into account all such Legal
Requirements which increase such return) of reducing the return on such Bank's
or the Agent's Commitment with respect to any Revolving Credit Loans to a level
below that which such Bank or the Agent could have achieved but for such Legal
Requirement (taking into consideration such Bank's or the Agent's then existing
policies with respect to capital adequacy and assuming full utilization of such
entity's capital) by any amount deemed by such Bank or (as the case may be) the
Agent to be material, then such Bank or the Agent may notify the Borrower of
such fact. To the extent that the amount of such reduction in the return on
capital is not reflected in the Base Rate, the Borrower and such Bank shall
thereafter attempt to negotiate in good faith, within thirty (30) days of the
day on which the Borrower receives such notice, an adjustment payable hereunder
that will adequately compensate such Bank in light of these circumstances. If
the Borrower and such Bank are unable to agree to such adjustment within thirty
(30) days of the date on which the Borrower receives such notice, then
commencing on the date of such notice (but not earlier than the effective date
of any such Legal Requirement), the fees payable hereunder shall increase by an
amount that will, in such Bank's reasonable determination, provide adequate
compensation. Each Bank shall allocate such cost increases among its customers
in good faith and on an equitable basis.
(S)5.9. CERTIFICATE.
A certificate setting forth any additional amounts payable pursuant to
(S)(S)5.7 or 5.8 and a brief but detailed explanation of such amounts which are
due, submitted by any Bank or the Agent to the Borrower, shall be conclusive,
absent manifest error, that such amounts are due and owing.
(S)5.10. INDEMNITY.
The Borrower agrees to indemnify each Bank and to hold each Bank harmless
from and against any loss, cost or expense (including loss of anticipated
profits) that such Bank may sustain or incur as a consequence of
(a)
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default by the Borrower in payment of the principal amount of or any interest on
any Eurodollar Rate Loans as and when due and payable, including any such loss
or expense arising from interest or fees payable by such Bank to lenders of
funds obtained by it in order to maintain its Eurodollar Rate Loans,
(b)
default by the Borrower in making a borrowing or conversion after the Borrower
has given (or is deemed to have given) a Loan Request or a Conversion Request
relating thereto in accordance with (S)2.6 or (S)2.7 or
(c)
the making of any payment of a Eurodollar Rate Loan or the making of any
conversion of any such Revolving Credit Loan to a Base Rate Loan on a day that
is not the last day of the applicable Interest Period with respect thereto,
including interest or fees payable by such Bank to lenders of funds obtained by
it in order to maintain any such Revolving Credit Loans.
(S)5.11. INTEREST AFTER DEFAULT.
During the continuance of an Event of Default described in (S)(S)13.1(a) or (b)
hereof, the outstanding principal of the Revolving Credit Loans not overdue
shall, until such Event of Default has been cured or remedied or such Event of
Default has been waived by the Majority Banks pursuant to (S)26, bear interest
at a rate per annum equal to the Base Rate plus two percent (2%).
(S)6. COLLATERAL SECURITY AND GUARANTIES.
The Obligations shall be secured by a perfected first priority security
interest (subject only to Permitted Liens entitled to priority under applicable
law) in all Accounts Receivable, Inventory and Intangibles of the Borrower,
whether now owned or hereafter acquired, pursuant to the terms of the Security
Documents to which the Borrower is a party.
(S)7. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Banks and the Agent as
follows:
(S)7.1. CORPORATE AUTHORITY.
(a)
Incorporation; Good Standing. Each of the Borrower and its Subsidiaries
(i)
is a corporation duly organized, validly existing and in good standing
under the laws of its state of incorporation,
(ii)
has all requisite corporate power to own its property and conduct its
business as now conducted and as presently contemplated, and
(iii)
is in good standing as a foreign corporation and is duly authorized to do
business in each jurisdiction where such qualification is necessary except where
a failure to be so qualified
-20-
would not have a materially adverse effect on the business, assets or financial
condition of the Borrower or such Subsidiary.
(b)
Authorization. The execution, delivery and performance of this Credit
Agreement and the other Loan Documents to which the Borrower or any of its
Subsidiaries is or is to become a party and the transactions contemplated hereby
and thereby
(i)
are within the corporate authority of such Person,
(ii)
have been duly authorized by all necessary corporate proceedings,
(iii)
do not conflict with or result in any breach or contravention of any
provision of law, statute, rule or regulation to which the Borrower or any of
its Subsidiaries is subject or any judgment, order, writ, injunction, license or
permit applicable to the Borrower or any of its Subsidiaries and
(iv)
do not conflict with any provision of the corporate charter or bylaws of,
or any agreement or other instrument binding upon, the Borrower or any of its
Subsidiaries.
(c)
Enforceability. The execution and delivery of this Credit Agreement and
the other Loan Documents to which the Borrower or any of its Subsidiaries is or
is to become a party will result in valid and legally binding obligations of
such Person enforceable against it in accordance with the respective terms and
provisions hereof and thereof, except as enforceability is limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating to or
affecting generally the enforcement of creditors' rights and except to the
extent that availability of the remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding
therefor may be brought.
(S)7.2. GOVERNMENTAL APPROVALS.
The execution, delivery and performance by the Borrower and any of its
Subsidiaries of this Credit Agreement and the other Loan Documents to which the
Borrower or any of its Subsidiaries is or is to become a party and the
transactions contemplated hereby and thereby do not require the approval or
consent of, or filing with (other than with the Securities and Exchange
Commission), any governmental agency or authority other than those already
obtained.
(S)7.3. TITLE TO PROPERTIES; LEASES.
Except as indicated on Schedule 7.3 hereto, the Borrower and its
Subsidiaries own all of the assets reflected in the consolidated balance sheet
of the Borrower and its Subsidiaries as at the Balance Sheet Date or acquired
since that date (except property and assets sold or otherwise disposed of in the
ordinary course of business since that date),
-21-
subject to no rights of others, including any mortgages, leases, conditional
sales agreements, title retention agreements, liens or other encumbrances except
Permitted Liens.
(S)7.4. FINANCIAL STATEMENTS.
There has been furnished to each of the Banks a consolidated balance sheet
of the Borrower and its Subsidiaries as at the Balance Sheet Date, and a
consolidated statement of income of the Borrower and its Subsidiaries for the
fiscal year then ended, certified by the Borrower's independent certified public
accountants. Such balance sheet and statement of income have been prepared in
accordance with generally accepted accounting principles and fairly present the
financial condition of the Borrower as at the close of business on the date
thereof and the results of operations for the fiscal year then ended. There are
no contingent liabilities of the Borrower or any of its Subsidiaries as of such
date which were required to be disclosed in accordance with generally accepted
accounting principles and which were not disclosed in such balance sheet or the
notes related thereto.
(S)7.5. NO MATERIAL CHANGES, ETC.
Since the Balance Sheet Date there has occurred no change in the financial
condition or business of the Borrower and its Subsidiaries as shown on or
reflected in the consolidated balance sheet of the Borrower and its Subsidiaries
as at the Balance Sheet Date, or the consolidated statement of income for the
fiscal year then ended which would have a Materially Adverse Effect.
(S)7.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC.
Each of the Borrower and its Subsidiaries possesses all franchises,
patents, copyrights, trademarks, trade names, licenses and permits, and rights
in respect of the foregoing, adequate for the conduct of its business
substantially as now conducted without known conflict with any rights of others.
(S)7.7. LITIGATION.
Except as set forth in Schedule 7.7 hereto (or as otherwise disclosed to
the Agent and the Banks pursuant to (S)8.5(d) hereof), there are no actions,
suits, proceedings or investigations of any kind pending or threatened against
the Borrower or any of its Subsidiaries before any court, tribunal or
administrative agency or board that, if adversely determined, would, either in
any case or in the aggregate, have a Materially Adverse Effect, or which
question the validity of this Credit Agreement or any of the other Loan
Documents, or any action taken or to be taken pursuant hereto or thereto.
(S)7.8. NO MATERIALLY ADVERSE CONTRACTS, ETC.
Neither the Borrower nor any of its Subsidiaries is subject to any
charter, corporate or other legal restriction, or any judgment, decree, order,
rule or regulation that has or is expected in the future to have a Materially
Adverse Effect. Neither the Borrower nor any of
-22-
its Subsidiaries is a party to any contract or agreement that has or is
expected, in the judgment of the Borrower's officers, to have any Materially
Adverse Effect.
(S)7.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC.
Neither the Borrower nor any of its Subsidiaries is in violation of any
provision of its charter documents, bylaws, or any agreement or instrument to
which it may be subject or by which it or any of its properties may be bound or
any decree, order, judgment, statute, license, rule or regulation (including,
without limitation, Environmental and ERISA Laws), in any of the foregoing cases
in a manner that would result in a Materially Adverse Effect.
(S)7.10. TAX STATUS.
The Borrower and its Subsidiaries
(a)
have made or filed all federal and state income and all other tax returns,
reports and declarations required by any jurisdiction to which the Borrower
believes in good faith (and after consultation with counsel) any of them is
subject,
(b)
have paid all taxes and other governmental assessments and charges shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and by appropriate proceedings and
(c)
have set aside on their books provisions reasonably adequate in accordance
with generally accepted accounting principles for the payment of all taxes for
periods subsequent to the periods to which such returns, reports or declarations
apply. There are no unpaid taxes claimed to be due by the taxing authority of
any jurisdiction which, if not paid, would have a Materially Adverse Effect, and
the officers of the Borrower know of no basis for any such claim.
(S)7.11. NO EVENT OF DEFAULT.
No Default or Event of Default has occurred and is continuing.
(S)7.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS.
Neither the Borrower nor any of its Subsidiaries is a "HOLDING COMPANY",
or a "SUBSIDIARY COMPANY" of a "HOLDING COMPANY", or an "AFFILIATE" of a
"HOLDING COMPANY", as such terms are defined in the Public Utility Holding
Company Act of 1935; nor is it an "INVESTMENT COMPANY", or an "AFFILIATED
COMPANY" or a "PRINCIPAL UNDERWRITER" of an "INVESTMENT COMPANY", as such terms
are defined in the Investment Company Act of 1940.
(S)7.13. ABSENCE OF FINANCING STATEMENTS, ETC.
Except with respect to Permitted Liens, there is no financing statement,
security agreement, chattel mortgage, real estate mortgage or other document
filed or recorded with any filing records, registry or other public office, that
purports to cover, affect or give notice
-23-
of any present or possible future lien on, or security interest in, any assets
or property of the Borrower or any of its Subsidiaries or any rights relating
thereto.
(S)7.14. PERFECTION OF SECURITY INTEREST.
All filings, assignments, pledges and deposits of documents or instruments
have been made and all other actions have been taken that are necessary or
advisable, under applicable law, to establish and perfect the Agent's security
interest in the Collateral. The Collateral and the Agent's rights with respect
to the Collateral are not subject to any setoff, claims, withholdings or other
defenses. The Borrower is the owner of the Collateral free from any lien,
security interest, encumbrance and any other claim or demand, except for
Permitted Liens.
(S)7.15. CERTAIN TRANSACTIONS.
Except as disclosed on Schedule 7.15 attached hereto, none of the
officers, directors, or employees of the Borrower or any of its Subsidiaries is
presently a party to any transaction with the Borrower or any of its
Subsidiaries (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Borrower, any corporation,
partnership, trust or other entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.
(S)7.16. REGULATIONS U AND X.
The proceeds of the Revolving Credit Loans shall be used for working
capital and general corporate purposes. The Borrower will obtain Letters of
Credit solely for the purchase of tangible personal property. No portion of any
Revolving Credit Loan is to be used, and no portion of any Letter of Credit is
to be obtained, for the purpose of purchasing or carrying any "MARGIN SECURITY"
or "MARGIN STOCK" as such terms are used in Regulations U and X of the Board of
Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.
(S)7.17. SUBSIDIARIES, ETC.
Xxxxx Pharmaceuticals, Co., and W.W. Supply Corp. are the only
Subsidiaries of the Borrower. Neither the Borrower nor any Subsidiary of the
Borrower is engaged in any joint venture or partnership with any other Person.
(S)8. AFFIRMATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Revolving Credit
Loan, Unpaid Reimbursement Obligation, Letter of Credit or Revolving Credit Note
is outstanding or any Bank has any obligation to make any Revolving Credit Loans
or the Agent has any obligation to issue, extend or renew any Letters of Credit:
-24-
(S)8.1. PUNCTUAL PAYMENT.
The Borrower will duly and punctually pay or cause to be paid the
principal and interest on the Revolving Credit Loans, all Reimbursement
Obligations, the Letter of Credit Fees, the commitment fees, the Agent's fee and
all other amounts provided for in this Credit Agreement and the other Loan
Documents to which the Borrower or any of its Subsidiaries is a party, all in
accordance with the terms of this Credit Agreement and such other Loan
Documents.
(S)8.2. MAINTENANCE OF OFFICE.
The Borrower will maintain its chief executive office in New Britain,
Connecticut, or at such other place in the United States of America as the
Borrower shall designate upon written notice to the Agent, where notices,
presentations and demands to or upon the Borrower in respect of the Loan
Documents to which the Borrower is a party may be given or made.
(S)8.3. RECORDS AND ACCOUNTS.
The Borrower will
(a)
keep, and cause each of its Subsidiaries to keep, true and accurate records
and books of account in which proper entries will be made in accordance with
generally accepted accounting principles and
(b)
maintain adequate accounts and reserves for all taxes (including income
taxes), depreciation, depletion, obsolescence and amortization of its properties
and the properties of its Subsidiaries, contingencies, and other reserves, in
each case in accordance with generally accepted accounting principles.
(S)8.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION.
The Borrower will deliver to each of the Banks:
(a)
as soon as practicable, but in any event not later than ninety (90) days
after the end of each fiscal year of the Borrower, the consolidated balance
sheet of the Borrower and its Subsidiaries as at the end of such year, and the
related consolidated statement of income and consolidated statement of cash flow
for such year, each setting forth in comparative form the figures for the
previous fiscal year and all such consolidated statements to be in reasonable
detail, prepared in accordance with generally accepted accounting principles,
and certified without qualification by Price Waterhouse LLP or by other
independent certified public accountants reasonably satisfactory to the Agent,
together with a written statement from such accountants to the effect that they
have read a copy of this Credit Agreement, and that, in making the examination
necessary to said certification, they have obtained no knowledge of any Default
or Event of Default, or, if such accountants shall have obtained knowledge of
-25-
any then existing Default or Event of Default they shall disclose in such
statement any such Default or Event of Default; provided that such accountants
shall not be liable to the Banks for failure to obtain knowledge of any Default
or Event of Default;
(b)
as soon as practicable, but in any event not later than forty-five (45)
days after the end of each of the fiscal quarters of the Borrower, copies of the
unaudited consolidated balance sheet of the Borrower and its Subsidiaries as at
the end of such quarter, and the related consolidated statement of income and
consolidated statement of cash flow for the portion of the Borrower's fiscal
year then elapsed, all in reasonable detail and prepared in accordance with
generally accepted accounting principles, together with a certification by the
principal financial or accounting officer of the Borrower that the information
contained in such financial statements fairly presents the financial position of
the Borrower and its Subsidiaries on the date thereof (subject to year-end
adjustments);
(c)
simultaneously with the delivery of the financial statements referred to in
subsections (a) and (b) above, a compliance certificate certified by the
principal financial or accounting officer of the Borrower in substantially the
form of Exhibit C hereto;
(d)
contemporaneously with the filing or mailing thereof, copies of all
material of a financial nature filed with the Securities and Exchange Commission
or sent to the stockholders of the Borrower;
(e)
within fifteen (15) days after the end of each calendar month or at such
earlier time as the Agent may reasonably request, a Borrowing Base Report (in
the form attached hereto as Exhibit D) setting forth the Borrowing Base as at
the end of such calendar month or other date so requested by the Agent;
provided, that at any time while the difference between (i) the Borrowing Base
and (ii) the sum of (A) the aggregate principal amount of all Revolving Credit
Loans plus (B) the Maximum Drawing Amount plus (C) all Unpaid Reimbursement
Obligations is less than $5,000,000, the Borrower will deliver to the Bank a
Borrowing Base Report at the end of each calendar week;
(f)
within fifteen (15) days after the end of each calendar month, an Accounts
Receivable aging report; and
(g)
-26-
from time to time such other financial data and information (including
accountants, management letters) as the Agent or any Bank may reasonably
request.
(S)8.5. NOTICES.
(a)
Defaults. The Borrower will promptly notify the Agent and each of the
Banks in writing of the occurrence of any Default or Event of Default. If any
Person shall give any notice or take any other action in respect of a claimed
default (whether or not constituting an Event of Default) under this Credit
Agreement or any other revolving credit note, evidence of indebtedness,
indenture or other obligation to which or with respect to which the Borrower or
any of its Subsidiaries is a party or obligor, whether as principal, guarantor,
surety or otherwise, the Borrower shall forthwith give written notice thereof to
the Agent and each of the Banks, describing the notice or action and the nature
of the claimed default.
(b)
Environmental Events. The Borrower will promptly give notice to the Agent
and each of the Banks
(i)
of any violation of any Environmental Law that the Borrower or any of its
Subsidiaries reports in writing or is reportable by such Person in writing (or
for which any written report supplemental to any oral report is made) to any
federal, state or local environmental agency and
(ii)
upon becoming aware thereof, of any inquiry, proceeding, investigation, or
other action, including a notice from any agency of potential environmental
liability, or any federal, state or local environmental agency or board, that
has the potential to materially affect the assets, liabilities, financial
conditions or operations of the Borrower or any of its Subsidiaries, or the
Agent's security interests pursuant to the Security Documents.
(c)
Notification of Claim Against Collateral. The Borrower will, immediately
upon becoming aware thereof, notify the Agent and each of the Banks in writing
of any setoff, claims (including, with respect to the Real Estate, environmental
claims), withholdings or other defenses to which any of the Collateral, or the
Agent's rights with respect to the Collateral, are subject.
(d)
Notice of Litigation and Judgments. The Borrower will, and will cause each
of its Subsidiaries to, give notice to the Agent and each of the Banks in
writing within fifteen (15) days of becoming aware of any litigation or
proceedings threatened in writing or any pending litigation and proceedings
affecting the Borrower or any of its Subsidiaries or to which the Borrower or
any of its Subsidiaries is or becomes a party involving an uninsured claim
-27-
against the Borrower or any of its Subsidiaries that could reasonably be
expected to have a materially adverse effect on the Borrower or any of its
Subsidiaries and stating the nature and status of such litigation or
proceedings. The Borrower will, and will cause each of its Subsidiaries to,
give notice to the Agent and each of the Banks, in writing, in form and detail
satisfactory to the Agent, within ten (10) days of any judgment not covered by
insurance, final or otherwise, against the Borrower or any of its Subsidiaries
in an amount in excess of $250,000.
(S)8.6. CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES.
The Borrower will do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence, rights and franchises
and those of its Subsidiaries. It
(a)
will cause all of its properties and those of its Subsidiaries used or
useful in the conduct of its business or the business of its Subsidiaries to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment,
(b)
will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Borrower may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times, and
(c)
will, and will cause each of its Subsidiaries to, continue to engage
primarily in the businesses now conducted by them and in related businesses;
provided that nothing in this (S)8.6 shall prevent the Borrower from
discontinuing the operation and maintenance of any of its properties or any of
those of its Subsidiaries if such discontinuance is, in the judgment of the
Borrower, desirable in the conduct of its or their business and that do not or
will not in the aggregate have a Materially Adverse Effect.
(S)8.7. INSURANCE.
The Borrower will, and will cause each of its Subsidiaries to, maintain
with financially sound and reputable insurers insurance with respect to its
properties and business against such casualties and contingencies as shall be in
accordance with the general practices of businesses engaged in similar
activities in similar geographic areas and in amounts, containing such terms, in
such forms and for such periods as may be reasonable and prudent and in
accordance with the terms of the Security Agreement.
(S)8.8. TAXES.
The Borrower will, and will cause each of its Subsidiaries to, duly pay
and discharge, or cause to be paid and discharged, before the same shall become
overdue, all taxes, assessments and other governmental charges imposed upon it
and its real properties, sales and activities, or any part thereof, or upon the
income or profits therefrom, as well as all claims for labor, materials, or
supplies that if unpaid might by law become a lien or charge
-28-
upon any of its property; provided that any such tax, assessment, charge, levy
or claim need not be paid if the validity or amount thereof shall currently be
contested in good faith by appropriate proceedings and if the Borrower or such
Subsidiary shall have set aside on its books adequate reserves with respect
thereto in accordance with generally accepted accounting principles; and
provided further that the Borrower and each Subsidiary of the Borrower will pay
all such taxes, assessments, charges, levies or claims forthwith upon the
commencement of proceedings to foreclose any lien that may have attached as
security therefor.
(S)8.9. INSPECTION OF PROPERTIES AND BOOKS, ETC.
(a)
General. The Borrower shall permit the Banks, through the Agent or any
of the Banks' other designated representatives, to visit and inspect any of the
properties of the Borrower or any of its Subsidiaries, to examine the books of
account of the Borrower and its Subsidiaries (and to make copies thereof and
extracts therefrom), and to discuss the affairs, finances and accounts of the
Borrower and its Subsidiaries with, and to be advised as to the same by, its and
their officers, all at such reasonable times and intervals as the Agent or any
Bank may reasonably request.
(b)
Communications with Accountants. The Borrower authorizes the Agent and, if
accompanied by the Agent, the Banks to communicate directly with the Borrower's
independent certified public accountants and authorizes such accountants, after
notice to the Borrower (unless an Event of Default shall have occurred and be
continuing, whereupon no notice shall be required), to disclose to the Agent and
the Banks any and all financial statements and other supporting financial
documents and schedules reasonably requested by the Agent and the Banks
including copies of any management letter with respect to the business,
financial condition and other affairs of the Borrower or any of its
Subsidiaries. At the request of the Agent, the Borrower shall deliver a letter
addressed to such accountants instructing them to comply with the provisions of
this (S)8.9(b).
(S)8.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS.
The Borrower will, and will cause each of its Subsidiaries to, comply in
all material respects with
(a)
the applicable laws and regulations wherever its business is conducted,
including all Environmental Laws and ERISA,
(b)
the provisions of its charter documents and by-laws,
(c)
all agreements and instruments by which it or any of its properties may be
bound and
(d)
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all applicable decrees, orders, and judgments. If any authorization,
consent, approval, permit or license from any officer, agency or instrumentality
of any government shall become necessary or required in order that the Borrower
or any of its Subsidiaries may fulfill any of its obligations hereunder or any
of the other Loan Documents to which the Borrower or such Subsidiary is a party,
the Borrower will, or (as the case may be) will cause such Subsidiary to,
immediately take or cause to be taken all reasonable steps within the power of
the Borrower or such Subsidiary to obtain such authorization, consent, approval,
permit or license and furnish the Agent and the Banks with evidence thereof.
(S)8.11. EMPLOYEE BENEFIT PLANS.
The Borrower will
(i)
promptly upon any request by the Agent, furnish to the Agent a copy of the
most recent actuarial statement required to be submitted under (S)103(d) of
ERISA and Annual Report, Form 5500, with all required attachments, in respect of
each Guaranteed Pension Plan and
(ii)
promptly upon receipt or dispatch, furnish to the Agent any notice, report
or demand sent or received in respect of a Guaranteed Pension Plan under
(S)(S)302, 4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA, or in respect
of a Multiemployer Plan, under (S)(S)4041A, 4202, 4219, 4242, or 4245 of ERISA.
(S)8.12. USE OF PROCEEDS.
The Borrower will use the proceeds of the Revolving Credit Loans solely
for working capital purposes. The Borrower will obtain Letters of Credit solely
for the purchase of tangible personal property.
(S)8.13. DEPOSIT OF ACCOUNTS RECEIVABLE.
(a)
The Borrower will, and will cause each of its Subsidiaries to, deposit into
a designated account of the Agent (the "CASH COLLATERAL ACCOUNT") immediately
upon its receipt thereof, all payments constituting proceeds of Accounts
Receivable or other Collateral which come into their possession or under their
control, in the identical form received and with any appropriate endorsements.
(b)
Except as otherwise provided herein, the Agent shall accept for deposit to
the Cash Collateral Account each check, draft or money order (collectively, the
"ITEMS") and all cash which are deposited into the Cash Collateral Account. If
not endorsed by the Borrower, the Agent shall, on behalf of the Borrower,
endorse for deposit to the Cash Collateral Account such Items, utilizing an
endorsement stamp for each such Item which the Agent deems appropriate. If any
such Item does not bear a date on its face, the Agent shall insert the date on
which the Item is deposited to the Cash Collateral Account. Unless an Event of
Default
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shall have occurred and be continuing, the Agent shall provisionally credit (on
the Business Day received if received on or before the Agent's applicable cutoff
time for receiving deposits for credit on such Business Day) the Cash Collateral
Account in the amount of all Items accepted for deposit and shall, regardless of
whether a Default or an Event of Default shall have occurred and be continuing,
credit the Cash Collateral Account in the amount of all cash received.
(c)
The Agent shall use reasonable efforts to not accept for deposit or
collection any Item which bears language on its face that the Item represents
payment in full, the final payment or the balance owing to the Borrower (the
"RESTRICTIVE ENDORSEMENT"), if the Restrictive Endorsement is, or appears to be,
handwritten or typed; provided, however, that if the Agent contacts the Borrower
with respect to such Item, and the Borrower directs the Agent to accept such
Item, the Agent shall accept such Item for deposit or collection, as applicable.
(d)
The Agent shall use reasonable efforts to not accept for deposit or
collection any Item (i) which is dated six (6) months or more before the date
such item is received by the Agent, or (ii) which is dated three (3) days or
more from and including the date such Item is received by the Agent.
(e)
The Agent shall use reasonable efforts to not accept for deposit or
collection any Item (i) which does not bear the Borrower as payee or (ii) which
the Agent believes is not properly payable to the Borrower. Notwithstanding the
forgoing, if an Item fails to contain the name of any payee, the Agent may
accept such Item for deposit or collection, as applicable.
(f)
The Agent shall use reasonable efforts to not accept for deposit or
collection any Item which bears a numerical amount which is different from the
written amount thereon, if such written amount is different from the amount of
payment provided on any invoice pertaining thereto.
(g)
The Agent may, in its reasonable discretion, refuse to accept for deposit
or collection any Item which the Agent believes should not be deposited to the
Cash Collateral Account, including, without limitation, any Item which has
already been paid by the drawee bank and any Item which is mutilated.
(h)
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The Borrower acknowledges and agrees that (i) the Borrower shall have no
right to withdraw any sums in the Cash Collateral Account and (ii) the Agent
shall apply the amount on deposit in the Cash Collateral Account, together with
all amounts thereafter deposited or transferred to the Cash Collateral Account,
to the payment of the Obligations immediately after its credit to the Cash
Collateral Account.
(S)8.14. FURTHER ASSURANCES.
The Borrower will, and will cause each of its Subsidiaries to, cooperate
with the Banks and the Agent and execute such further instruments and documents
as the Banks or the Agent shall reasonably request to carry out to their
satisfaction the transactions contemplated by this Credit Agreement and the
other Loan Documents.
(S)9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Revolving Credit
Loan, Unpaid Reimbursement Obligation, Letter of Credit or Revolving Credit Note
is outstanding or any Bank has any obligation to make any Revolving Credit Loans
or the Agent has any obligations to issue, extend or renew any Letters of
Credit:
(S)9.1. RESTRICTIONS ON INDEBTEDNESS.
The Borrower will not, and will not permit any of its Subsidiaries to,
create, incur, assume, guarantee or be or remain liable, contingently or
otherwise, with respect to any Indebtedness other than:
(a)
Indebtedness to the Banks and the Agent arising under any of the Loan
Documents;
(b)
current liabilities and non-capitalized rental obligations of the Borrower
or such Subsidiary incurred in the ordinary course of business not incurred
through
(i)
the borrowing of money, or
(ii)
the obtaining of credit except for credit on an open account basis
customarily extended and in fact extended in connection with normal purchases of
goods and services;
(c)
Indebtedness in respect of taxes, assessments, governmental charges or
levies and claims for labor, materials and supplies to the extent that payment
therefor shall not at the time be required to be made in accordance with the
provisions of (S)8.8;
(d)
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Indebtedness in respect of judgments or awards that have been in force for
less than the applicable period for taking an appeal so long as execution is not
levied thereunder or in respect of which the Borrower or such Subsidiary shall
at the time in good faith be prosecuting an appeal or proceedings for review and
in respect of which a stay of execution shall have been obtained pending such
appeal or review;
(e)
endorsements for collection, deposit or negotiation and warranties of
products or services, in each case incurred in the ordinary course of business;
(f)
Indebtedness under Capitalized Leases plus Indebtedness incurred in
connection with the acquisition after the date hereof of any real or personal
property by the Borrower not exceeding $3,000,000 in an aggregate amount at any
time outstanding;
(g)
Indebtedness existing on the date hereof and listed and described on
Schedule 9.1 hereto; and
(h)
obligations under guaranties in respect of Indebtedness of others in an
aggregate amount not in excess of $100,000 at any time.
(S)9.2. RESTRICTIONS ON LIENS.
The Borrower will not, and will not permit any of its Subsidiaries to,
(a)
create or incur or suffer to be created or incurred or to exist any lien,
encumbrance, mortgage, pledge, charge, restriction or other security interest of
any kind upon any of its property or assets of any character whether now owned
or hereafter acquired, or upon the income or profits therefrom;
(b)
transfer any of such property or assets or the income or profits therefrom for
the purpose of subjecting the same to the payment of Indebtedness or performance
of any other obligation in priority to payment of its general creditors;
(c)
acquire, or agree or have an option to acquire, any property or assets upon
conditional sale or other title retention or purchase money security agreement,
device or arrangement;
(d)
suffer to exist for a period of more than thirty (30) days after the same shall
have been incurred any Indebtedness or claim or demand against it that if unpaid
might by law or upon bankruptcy or insolvency, or otherwise, be given any
priority whatsoever over its general creditors; or
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(e)
sell, assign, pledge or otherwise transfer any accounts, contract rights,
general intangibles, chattel paper or instruments, with or without recourse;
provided that the Borrower and any Subsidiary of the Borrower may create or
incur or suffer to be created or incurred or to exist:
(i)
liens in favor of the Borrower on all or part of the assets of Subsidiaries
of the Borrower securing Indebtedness owing by Subsidiaries of the Borrower
to the Borrower;
(ii)
liens to secure taxes, assessments and other government charges in respect
of obligations not overdue (or as permitted by (S)8.8 hereof) or liens on
properties to secure claims for labor, material or supplies in respect of
obligations not overdue;
(iii)
deposits or pledges made in connection with, or to secure payment of,
workmen's compensation, unemployment insurance, old age pensions or other
social security obligations;
(iv)
liens on properties in respect of judgments or awards, the Indebtedness
with respect to which is permitted by (S)9.1(d);
(v)
liens of carriers, warehousemen, mechanics and materialmen, and other like
liens on properties, in existence less than 120 days from the date of
creation thereof in respect of obligations not overdue;
(vi)
encumbrances on Real Estate consisting of easements, rights of way, zoning
restrictions, restrictions on the use of real property and defects and
irregularities in the title thereto, landlord's or lessor's liens under
leases to which the Borrower or a Subsidiary of the Borrower is a party,
and other minor liens or encumbrances none of which in the opinion of the
Borrower interferes materially with the use of the property affected in the
ordinary conduct of the business of the Borrower and its Subsidiaries,
which defects do not individually or in the aggregate have a Materially
Adverse Effect;
(vii)
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liens existing on the date hereof and listed on Schedule 9.2 hereto;
(viii)
purchase money security interests in or purchase money mortgages on real or
personal property acquired after the date hereof, including property
subject to Capitalized Leases, to secure purchase money Indebtedness of the
type and amount permitted by (S)9.1(f), incurred in connection with the
acquisition of such property or such Capitalized Leases, which security
interests or mortgages cover only the real or personal property so acquired
or subject to such Capitalized Leases;
(ix)
notice liens in favor of lessors arising in connection with non-capitalized
lease obligations of the Borrower covering only the personal property
leased (and not owned) by the Borrower; and
(x)
liens in favor of the Agent for the benefit of the Banks and the Agent
under the Loan Documents.
(S)9.3. RESTRICTIONS ON INVESTMENTS.
The Borrower will not, and will not permit any of its Subsidiaries to,
make or permit to exist or to remain outstanding any Investment except
Investments in:
(a)
marketable direct or guaranteed obligations of the United States of America
that mature within one (1) year from the date of purchase by the Borrower;
(b)
demand deposits, certificates of deposit, bankers acceptances and time
deposits of United States banks having total assets in excess of $1,000,000,000;
(c)
securities commonly known as "COMMERCIAL PAPER" issued by a corporation
organized and existing under the laws of the United States of America or any
state thereof that at the time of purchase have been rated and the ratings for
which are not less than "P 1" if rated by Xxxxx'x Investors Services, Inc., and
not less than "A 1" if rated by Standard and Poor's;
(d)
Investments existing on the date hereof and listed on Schedule 9.3 hereto;
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(e)
Investments by the Borrower in Subsidiaries of the Borrower existing and
not in excess of the amounts outstanding on the Closing Date;
(f)
Investments consisting of promissory notes received as proceeds of asset
dispositions permitted by (S)9.5(b);
(g)
Investments consisting of advances to employees for moving, entertainment,
travel and other similar expenses in the ordinary course of business not to
exceed $250,000 in the aggregate at any time outstanding;
(h)
Securities issued to the Borrower by account debtors in connection with
Accounts Receivable due and owing by such account debtors to the Borrower; and
(i)
Investments consisting of guaranties to the extent permitted by (S)9.1(h)
hereof.
(S)9.4. DISTRIBUTIONS.
If an Event of Default has occurred and is continuing, the Borrower will
not make any Distributions.
(S)9.5. MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS.
(a)
Without the prior written consent of the Majority Banks, the Borrower will
not, and will not permit any of its Subsidiaries to, become a party to any
merger or consolidation, or agree to or effect any asset acquisition or stock
acquisition (other than the acquisition of assets in the ordinary course of
business consistent with past practices and Investments permitted by (S)9.4
hereof) except the merger or consolidation of one or more of the Subsidiaries of
the Borrower with and into the Borrower, or the merger or consolidation of two
or more Subsidiaries of the Borrower.
(b)
The Borrower will not, and will not permit any of its Subsidiaries to,
become a party to or agree to or effect any disposition of assets, other than
the disposition of assets in the ordinary course of business, consistent with
past practices.
(S)9.6. SALE AND LEASEBACK.
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The Borrower will not, and will not permit any of its Subsidiaries to,
enter into any arrangement, directly or indirectly, whereby the Borrower or any
Subsidiary of the Borrower shall sell or transfer any property owned by it in
order then or thereafter to lease such property or lease other property that the
Borrower or any Subsidiary of the Borrower intends to use for substantially the
same purpose as the property being sold or transferred.
(S)9.7. COMPLIANCE WITH ENVIRONMENTAL LAWS.
The Borrower will not, and will not permit any of its Subsidiaries to, in
each case in any manner that would violate any Environmental Law or bring such
Real Estate in violation of any Environmental Law in any manner which would have
a Materially Adverse Effect,
(a)
use any of the Real Estate or any portion thereof for the handling, processing,
storage or disposal of Hazardous Substances,
(b)
cause or permit to be located on any of the Real Estate any underground tank or
other underground storage receptacle for Hazardous Substances,
(c)
generate any Hazardous Substances on any of the Real Estate,
(d)
conduct any activity at any Real Estate or use any Real Estate in any manner so
as to cause a release (i.e. releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, disposing or
dumping) or threatened release of Hazardous Substances on, upon or into the Real
Estate or
(e)
otherwise conduct any activity at any Real Estate or use any Real Estate.
(S)9.8. EMPLOYEE BENEFIT PLANS.
Neither the Borrower nor any ERISA Affiliate will
(a)
engage in any "PROHIBITED TRANSACTION" within the meaning of (S)406 of
ERISA or (S)4975 of the Code which could result in a material liability for the
Borrower or any of its Subsidiaries; or
(b)
permit any Guaranteed Pension Plan to incur an "ACCUMULATED FUNDING
DEFICIENCY", as such term is defined in (S)302 of ERISA, whether or not such
deficiency is or may be waived; or
(c)
fail to contribute to any Guaranteed Pension Plan to an extent which, or
terminate any Guaranteed Pension Plan in a manner which, could result in the
imposition of a lien or
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encumbrance on the assets of the Borrower or any of its Subsidiaries pursuant to
(S)302(f) or (S)4068 of ERISA; or
(d)
permit or take any action which would result in the aggregate benefit
liabilities (with the meaning of (S)4001 of ERISA) of all Guaranteed Pension
Plans exceeding the value of the aggregate assets of such Plans, disregarding
for this purpose the benefit liabilities and assets of any such Plan with assets
in excess of benefit liabilities.
(S)10. FINANCIAL COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Revolving Credit
Loan, Unpaid Reimbursement Obligation, Letter of Credit or Revolving Credit Note
is outstanding or any Bank has any obligation to make any Revolving Credit Loans
or the Agent has any obligation to issue, extend or renew any Letters of Credit:
(S)10.1. EARNINGS BEFORE INTEREST AND TAXES TO TOTAL INTEREST
EXPENSE.
The Borrower will not permit the ratio of Earnings Before Interest and Taxes
to Consolidated Total Interest Expense for any period of four consecutive fiscal
quarters of the Borrower ending after the date hereof to be less than 1.50:1.0
(S)10.2. CASH FLOW TO FINANCIAL OBLIGATIONS.
The Borrower will not permit the ratio of Consolidated Operating Cash Flow
for any period of four consecutive fiscal quarters of the Borrower ending after
the date hereof, to Consolidated Financial Obligations as determined for such
period, to be less than 1.25:1.0.
(S)10.3. LIABILITIES TO TANGIBLE NET WORTH RATIO.
The Borrower will not permit the ratio of Consolidated Total Liabilities
to Consolidated Tangible Net Worth on the last day of any fiscal quarter ending
after the date hereof to exceed 3.30:1.0.
(S)10.4. CONSOLIDATED TANGIBLE NET WORTH.
The Borrower will not permit Consolidated Tangible Net Worth to be less
than the sum of $23,000,000 plus, on a cumulative basis, fifty percent (50%) of
positive Consolidated Net Income for each fiscal year subsequent to the date
hereof.
(S)10.5. CAPITAL EXPENDITURES.
The Borrower will not make or permit any Subsidiary of the Borrower to
make, Capital Expenditures in any fiscal year that exceed, in the aggregate,
$3,000,000.
(S)11. CLOSING CONDITIONS.
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The obligations of the Banks to make the initial Revolving Credit Loans
and of the Agent to issue any initial Letters of Credit shall be subject to the
satisfaction of the following conditions precedent on or prior to January 10,
1996:
(S)11.1. LOAN DOCUMENTS
Each of the Loan Documents shall have been duly executed and delivered
by the respective parties thereto, shall be in full force and effect and shall
be in form and substance satisfactory to each of the Banks. Each Bank shall
have received a fully executed copy of each such document.
(S)11.2. CERTIFIED COPIES OF CHARTER DOCUMENTS.
Each of the Banks shall have received from the Borrower and each of its
Subsidiaries a copy, certified by a duly authorized officer of such Person to be
true and complete on the Closing Date, of each of
(a)
its charter or other incorporation documents as in effect on such date of
certification, and
(b)
its by-laws as in effect on such date.
(S)11.3. CORPORATE ACTION.
All corporate action necessary for the valid execution, delivery and
performance by the Borrower and each of its Subsidiaries of this Credit
Agreement and the other Loan Documents to which it is or is to become a party
shall have been duly and effectively taken, and evidence thereof satisfactory to
the Banks shall have been provided to each of the Banks.
(S)11.4. INCUMBENCY CERTIFICATE.
Each of the Banks shall have received from the Borrower and each of its
Subsidiaries an incumbency certificate, dated as of the Closing Date, signed by
a duly authorized officer of the Borrower or such Subsidiary, and giving the
name and bearing a specimen signature of each individual who shall be
authorized:
(a)
to sign, in the name and on behalf of each of the Borrower of such Subsidiary,
each of the Loan Documents and Subordination Documents to which the Borrower or
such Subsidiary is or is to become a party;
(b)
in the case of the Borrower, to make Loan Requests and Conversion Requests
and to apply for Letters of Credit; and
(c)
to give notices and to take other action on its behalf under the Loan
Documents.
(S)11.5. VALIDITY OF LIENS.
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The Security Documents shall be effective to create in favor of the Agent
a legal, valid and enforceable first (except for Permitted Liens entitled to
priority under applicable law) security interest in and lien upon the
Collateral. All filings, recordings, deliveries of instruments and other
actions necessary or desirable in the opinion of the Agent to protect and
preserve such security interests shall have been duly effected. The Agent shall
have received evidence thereof in form and substance satisfactory to the Agent.
(S)11.6. PERFECTION CERTIFICATES AND UCC SEARCH RESULTS.
The Agent shall have received from each of the Borrower and its
Subsidiaries a completed and fully executed Perfection Certificate and the
results of UCC searches with respect to the Collateral, indicating no liens
other than Permitted Liens and otherwise in form and substance satisfactory to
the Agent.
(S)11.7. CERTIFICATES OF INSURANCE.
The Agent shall have received a certificate of insurance from an
independent insurance broker dated as of the Closing Date, identifying insurers,
types of insurance, insurance limits, and policy terms, and otherwise describing
the insurance obtained in accordance with the provisions of the Security
Agreements.
(S)11.8. BORROWING BASE REPORT.
The Agent shall have received from the Borrower the initial Borrowing Base
Report dated as of December 2, 1995.
(S)11.9. ACCOUNTS RECEIVABLE AGING REPORT.
The Agent shall have received from the Borrower the most recent Accounts
Receivable aging report of the Borrower and its Subsidiaries dated as of a date
which shall be no more than fifteen (15) days prior to the Closing Date and the
Borrower shall have notified the Agent in writing on the Closing Date of any
material deviation from the Accounts Receivable values reflected in such
Accounts Receivable aging report and shall have provided the Agent with such
supplementary documentation as the Agent may reasonably request.
(S)11.10. OPINION OF COUNSEL.
Each of the Banks and the Agent shall have received a favorable legal
opinion addressed to the Banks and the Agent, dated as of the Closing Date, in
form and substance satisfactory to the Banks and the Agent, from
Xxxxxxxxxxx & Xxxxxx, counsel to the Borrower and its Subsidiaries.
(S)11.11. PAYMENT OF FEES.
The Borrower shall have paid to the Banks or the Agent, as appropriate,
the closing fee pursuant to (S)5.2.
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(S)11.12. PAYOFF LETTER.
The Agent shall have received a payoff letter from The CIT Group/ Business
Credit, Inc., as Collateral Agent, indicating the amount of the loan obligations
of the Borrower to The CIT Group/Business Credit, Inc. and Fleet Bank, N.A. to
be discharged on the Closing Date and an acknowledgment by The CIT
Group/Business Credit, Inc., as Collateral Agent, that upon receipt of such
funds it will forthwith execute and deliver to the Agent for filing all
termination statements and take such other actions as may be necessary to
discharge all mortgages, deeds of trust and security interests granted by the
Borrower or any of its Subsidiaries in favor of The CIT Group/Business Credit,
Inc., as Collateral Agent.
(S)12. CONDITIONS TO ALL BORROWINGS.
The obligations of the Banks to make any Revolving Credit Loan, including
the initial Revolving Credit Loan, and of the Agent to issue, extend or renew
any Letter of Credit, in each case whether on or after the Closing Date, shall
also be subject to the satisfaction of the following conditions precedent:
(S)12.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT.
Each of the representations and warranties of any of the Borrower and its
Subsidiaries contained in this Credit Agreement, the other Loan Documents or in
any document or instrument delivered pursuant to or in connection with this
Credit Agreement shall be true as of the date as of which they were made and
shall also be true at and as of the time of the making of such Revolving Credit
Loan or the issuance, extension or renewal of such Letter of Credit, with the
same effect as if made at and as of that time (except to the extent of changes
resulting from transactions contemplated or permitted by this Credit Agreement
and the other Loan Documents and changes occurring in the ordinary course of
business that singly or in the aggregate do not have Materially Adverse Effect,
and to the extent that such representations and warranties relate expressly to
an earlier date) and no Default (which results from the failure of the Borrower
to comply with its covenants set forth in (S)(S)8.4, 9 or 10 hereof or which the
Agent reasonably believes will become an Event of Default) or Event of Default
shall have occurred and be continuing.
(S)12.2. PROCEEDINGS AND DOCUMENTS.
All proceedings in connection with the transactions contemplated by this
Credit Agreement, the other Loan Documents and all other documents incident
thereto shall be reasonably satisfactory in substance and in form to the Banks
and to the Agent and the Agent's Special Counsel, and the Banks, the Agent and
such counsel shall have received all information and such counterpart originals
or certified or other copies of such documents as the Agent may reasonably
request.
(S)12.3. BORROWING BASE REPORT.
The Agent shall have received the most recent Borrowing Base Report
required to be delivered to the Agent in accordance with (S)8.4(e).
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(S)13. EVENTS OF DEFAULT; ACCELERATION; ETC.
(S)13.1. EVENTS OF DEFAULT AND ACCELERATION.
If any of the following events ("EVENTS OF DEFAULT" or, if the giving of
notice or the lapse of time or both is required, then, prior to such notice or
lapse of time, "DEFAULTS") shall occur:
(a)
the Borrower shall fail to pay any principal of the Revolving Credit Loans
or any Reimbursement Obligation when the same shall become due and payable,
whether at the stated date of maturity or any accelerated date of maturity or at
any other date fixed for payment;
(b)
the Borrower or any of its Subsidiaries shall fail to pay any interest on
the Revolving Credit Loans, the commitment fee, any Letter of Credit Fee, the
Agent's fee, or other sums due hereunder or under any of the other Loan
Documents, within five (5) Business Days of when the same shall become due and
payable, whether at the stated date of maturity or any accelerated date of
maturity or at any other date fixed for payment;
(c)
the Borrower shall fail to comply with any of its covenants contained in
(S)9 (other than those set forth in (S)(S)9.2, 9.7 or 9.8) or 10 hereof;
(d)
the Borrower or any of its Subsidiaries shall fail to perform any term,
covenant or agreement contained herein or in any of the other Loan Documents
(other than those specified elsewhere in this (S)13.1) for fifteen (15) days
after written notice of such failure has been given to the Borrower by the
Agent;
(e)
any representation or warranty of the Borrower or any of its Subsidiaries
in this Credit Agreement or any of the other Loan Documents or in any other
document or instrument delivered pursuant to or in connection with this Credit
Agreement shall prove to have been false in any material respect upon the date
when made or deemed to have been made or repeated;
(f)
the Borrower or any of its Subsidiaries shall fail to pay at maturity, or
within any applicable period of grace, any obligation for borrowed money or
credit received or in
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respect of any Capitalized Leases in an aggregate amount in excess of $250,000,
or fail to observe or perform any material term, covenant or agreement contained
in any agreement by which it is bound, evidencing or securing borrowed money or
credit received or in respect of any Capitalized Leases in an aggregate amount
in excess of $1,000,000 for such period of time as would permit (assuming the
giving of appropriate notice if required) the holder or holders thereof or of
any obligations issued thereunder to accelerate the maturity thereof;
(g)
the Borrower or any of its Subsidiaries shall make an assignment for the
benefit of creditors, or admit in writing its inability to pay or generally fail
to pay its debts as they mature or become due, or shall petition or apply for
the appointment of a trustee or other custodian, liquidator or receiver of the
Borrower or any of its Subsidiaries or of any substantial part of the assets of
the Borrower or any of its Subsidiaries or shall commence any case or other
proceeding relating to the Borrower or any of its Subsidiaries under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of any jurisdiction, now or hereafter
in effect, or shall take any action to authorize or in furtherance of any of the
foregoing, or if any such petition or application shall be filed or any such
case or other proceeding shall be commenced against the Borrower or any of its
Subsidiaries and the Borrower or any of its Subsidiaries shall indicate its
approval thereof, consent thereto or acquiescence therein or such petition or
application shall otherwise remain undismissed for a period of forty-five (45)
days;
(h)
a decree or order is entered appointing any such trustee, custodian,
liquidator or receiver or adjudicating the Borrower or any of its Subsidiaries
bankrupt or insolvent, or approving a petition in any such case or other
proceeding, or a decree or order for relief is entered in respect of the
Borrower or any Subsidiary of the Borrower in an involuntary case under federal
bankruptcy laws as now or hereafter constituted;
(i)
there shall remain in force, undischarged, unsatisfied and unstayed,
for more than thirty days, whether or not consecutive, any final judgment
against the Borrower or any of its Subsidiaries that, with other outstanding
final judgments, undischarged, against the Borrower or any of its Subsidiaries
exceeds in the aggregate $100,000;
(j)
if any of the Loan Documents (other than the Cash Management Agreements)
shall be canceled, terminated, revoked or rescinded otherwise than in accordance
with the terms thereof or with the express prior written agreement, consent or
approval of the Banks, or any action at law, suit in equity or other legal
proceeding to cancel, revoke or rescind any of the Loan Documents shall be
commenced by or on behalf of the Borrower or any of its Subsidiaries party
thereto or any of their respective stockholders, or any court or any other
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governmental or regulatory authority or agency of competent jurisdiction shall
make a determination that, or issue a judgment, order, decree or ruling to the
effect that, any one or more of the Loan Documents is illegal, invalid or
unenforceable in accordance with the terms thereof;
(k)
with respect to any Guaranteed Pension Plan, an ERISA Reportable Event
shall have occurred and the Majority Banks shall have determined in their
reasonable discretion that such event reasonably could be expected to result in
liability of the Borrower or any of its Subsidiaries to the PBGC or such
Guaranteed Pension Plan in an aggregate amount exceeding $500,000 and such event
in the circumstances occurring reasonably could constitute grounds for the
termination of such Guaranteed Pension Plan by the PBGC or for the appointment
by the appropriate United States District Court of a trustee to administer such
Guaranteed Pension Plan; or a trustee shall have been appointed by the United
States District Court to administer such Plan; or the PBGC shall have instituted
proceedings to terminate such Guaranteed Pension Plan;
(l)
the Borrower or any of its Subsidiaries shall be enjoined, restrained or in
any way prevented by the order of any court or any administrative or regulatory
agency from conducting any material part of its business and such order shall
continue in effect for more than thirty (30) days;
(m)
there shall occur any material damage to, or loss, theft or destruction of,
any Collateral, or any strike, lockout, labor dispute, embargo, condemnation,
act of God or public enemy, or other casualty, which in any such case causes,
for more than fifteen (15) consecutive days, the cessation or substantial
curtailment of revenue producing activities at any facility of the Borrower or
any of its Subsidiaries if such event or circumstance is not covered by business
interruption insurance and would have a Materially Adverse Effect;
(n)
there shall occur the loss, suspension or revocation of, or failure to
renew, any license or permit now held or hereafter acquired by the Borrower or
any of its Subsidiaries if such loss, suspension, revocation or failure to renew
would have a Materially Adverse Effect; or
(o)
the Borrower or any of its Subsidiaries shall be indicted for a federal
crime, a punishment for which could include the forfeiture of any assets of the
Borrower or such Subsidiary included in the Borrowing Base or any assets of the
Borrower or such Subsidiary not included in the Borrowing Base but having a fair
market value in excess of $1,000,000.
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then, and in the event of any such Event of Default, so long as the same may be
continuing, the Agent may, and upon the request of the Majority Banks shall, by
notice in writing to the Borrower declare all amounts owing with respect to this
Credit Agreement, the Revolving Credit Notes and the other Loan Documents and
all Reimbursement Obligations to be, and they shall thereupon forthwith become,
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby expressly waived by the Borrower; provided
that in the event of any Event of Default specified in (S)(S)13.1(g) or 13.1(h),
all such amounts shall become immediately due and payable automatically and
without any requirement of notice from the Agent or any Bank.
(S)13.2. TERMINATION OF COMMITMENTS.
If any one or more of the Events of Default specified in (S)13.1(g) or
(S)13.1(h) shall occur, any unused portion of the credit hereunder shall
forthwith terminate and each of the Banks shall be relieved of all further
obligations to make Revolving Credit Loans to the Borrower and the Agent shall
be relieved of all further obligations to issue, extend or renew Letters of
Credit. If any other Event of Default shall have occurred and be continuing, or
if on any Drawdown Date or other date for issuing, extending or renewing any
Letter of Credit the conditions precedent to the making of the Revolving Credit
Loans to be made on such Drawdown Date or (as the case may be) to issuing,
extending or renewing such Letter of Credit on such other date are not
satisfied, the Agent may and, upon the request of the Majority Banks, shall, by
notice to the Borrower, terminate the unused portion of the credit hereunder,
and upon such notice being given such unused portion of the credit hereunder
shall terminate immediately and each of the Banks shall be relieved of all
further obligations to make Revolving Credit Loans and the Agent shall be
relieved of all further obligations to issue, extend or renew Letters of Credit.
No termination of the credit hereunder shall relieve the Borrower or any of its
Subsidiaries of any of the Obligations.
(S)13.3. REMEDIES.
In case any one or more of the Events of Default shall have occurred and
be continuing, and whether or not the Banks shall have accelerated the maturity
of the Revolving Credit Loans pursuant to (S)13.1, each Bank, if owed any amount
with respect to the Revolving Credit Loans or the Reimbursement Obligations,
may, with the consent of the Majority Banks but not otherwise, proceed to
protect and enforce its rights by suit in equity, action at law or other
appropriate proceeding, whether for the specific performance of any covenant or
agreement contained in this Credit Agreement and the other Loan Documents or any
instrument pursuant to which the Obligations to such Bank are evidenced,
including as permitted by applicable law the obtaining of the ex parte
appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of such Bank. No remedy herein conferred upon any Bank
or the Agent or the holder of any Revolving Credit Note or purchaser of any
Letter of Credit Participation is intended to be exclusive of any other remedy
and each and every remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
by statute or any other provision of law.
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(S)13.4. DISTRIBUTION OF COLLATERAL PROCEEDS.
In the event that following the occurrence or during the continuance of
any Default or Event of Default, the Agent or any Bank, as the case may be,
receives any monies in connection with the enforcement of any the Security
Documents, or otherwise with respect to the realization upon any of the
Collateral, such monies shall be distributed for application as follows:
(a)
First, to the payment of, or (as the case may be) the reimbursement of the
Agent for or in respect of all reasonable costs, expenses, disbursements and
losses which shall have been incurred or sustained by the Agent in connection
with the collection of such monies by the Agent, for the exercise, protection or
enforcement by the Agent of all or any of the rights, remedies, powers and
privileges of the Agent under this Credit Agreement or any of the other Loan
Documents or in respect of the Collateral or in support of any provision of
adequate indemnity to the Agent against any taxes or liens which by law shall
have, or may have, priority over the rights of the Agent to such monies;
(b)
Second, to all other Obligations in such order or preference as the
Majority Banks may determine; provided, however, that distributions in respect
of such obligations shall be made
(i)
pari passu among Obligations with respect to the Agent's fee payable pursuant to
(S)5.2 and all other Obligations and
(ii)
Obligations owing to the Banks with respect to each type of Obligation such as
interest, principal, fees and expenses, shall be made among the Banks pro rata;
and provided, further, that the Agent may in its discretion make proper
allowance to take into account any Obligations not then due and payable;
(c)
Third, upon payment and satisfaction in full or other provisions for
payment in full satisfactory to the Banks and the Agent of all of the
Obligations, to the payment of any obligations required to be paid pursuant to
(S)9-504(1)(c) of the Uniform Commercial Code of the State of Connecticut; and
(d)
Fourth, the excess, if any, shall be returned to the Borrower or to such
other Persons as are entitled thereto.
(S)14. SETOFF.
Regardless of the adequacy of any Collateral, during the continuance of
any Event of Default, any deposits or other sums credited by or due from any of
the Banks to the
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Borrower and any securities or other property of the Borrower in the possession
of such Bank may be applied to or setoff by such Bank against the payment of
Obligations and any and all other liabilities, direct, or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising, of the
Borrower to such Bank. Each of the Banks agrees with each other Bank that
(a)
if an amount to be setoff is to be applied to Indebtedness of the Borrower to
such Bank, other than Indebtedness evidenced by the Revolving Credit Notes held
by such Bank or constituting Reimbursement Obligations owed to such Bank, such
amount shall be applied ratably to such other Indebtedness and to the
Indebtedness evidenced by all such Revolving Credit Notes held by such Bank or
constituting Reimbursement Obligations owed to such Bank, and
(b)
if such Bank shall receive from the Borrower, whether by voluntary payment,
exercise of the right of setoff, counterclaim, cross action, enforcement of the
claim evidenced by the Revolving Credit Notes held by, or constituting
Reimbursement Obligations owed to, such Bank by proceedings against the Borrower
at law or in equity or by proof thereof in bankruptcy, reorganization,
liquidation, receivership or similar proceedings, or otherwise, and shall retain
and apply to the payment of the Revolving Credit Note or Revolving Credit Notes
held by, or Reimbursement Obligations owed to, such Bank any amount in excess of
its ratable portion of the payments received by all of the Banks with respect to
the Revolving Credit Notes held by, and Reimbursement Obligations owed to, all
of the Banks, such Bank will make such disposition and arrangements with the
other Banks with respect to such excess, either by way of distribution, pro
tanto assignment of claims, subrogation or otherwise as shall result in each
Bank receiving in respect of the Revolving Credit Notes held by it or
Reimbursement obligations owed it, its proportionate payment as contemplated by
this Credit Agreement; provided that if all or any part of such excess payment
is thereafter recovered from such Bank, such disposition and arrangements shall
be rescinded and the amount restored to the extent of such recovery, but without
interest.
(S)15. THE AGENT.
(S)15.1. AUTHORIZATION.
The Agent is authorized to take such action on behalf of each of the Banks
and to exercise all such powers as are hereunder and under any of the other Loan
Documents and any related documents delegated to the Agent, together with such
powers as are reasonably incident thereto, provided that no duties or
responsibilities not expressly assumed herein or therein shall be implied to
have been assumed by the Agent. The relationship between the Agent and the
Banks is and shall be that of agent and principal only, and nothing contained in
this Credit Agreement or any of the other Loan Documents shall be construed to
constitute the Agent as a trustee for any Bank.
(S)15.2. EMPLOYEES AND AGENTS.
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The Agent may exercise its powers and execute its duties by or through
employees or agents and shall be entitled to take, and to rely on, advice of
counsel concerning all matters pertaining to its rights and duties under this
Credit Agreement and the other Loan Documents. The Agent may utilize the
services of such Persons as the Agent in its sole discretion may reasonably
determine, and all reasonable fees and expenses of any such Persons shall be
paid by the Borrower.
(S)15.3. NO LIABILITY.
Neither the Agent nor any of its shareholders, directors, officers or
employees nor any other Person assisting them in their duties nor any agent or
employee thereof, shall be liable for any waiver, consent or approval given or
any action taken, or omitted to be taken, in good faith by it or them hereunder
or under any of the other Loan Documents, or in connection herewith or
therewith, or be responsible for the consequences of any oversight or error of
judgment whatsoever, except that the Agent or such other Person, as the case may
be, may be liable for losses due to its willful misconduct or gross negligence.
(S)15.4. NO REPRESENTATIONS.
The Agent shall not be responsible for the execution or validity or
enforceability of this Credit Agreement, the Revolving Credit Notes, the Letters
of Credit, any of the other Loan Documents or any instrument at any time
constituting, or intended to constitute, collateral security for the Revolving
Credit Notes, or for the value of any such collateral security or for the
validity, enforceability or collectability of any such amounts owing with
respect to the Revolving Credit Notes, or for any recitals or statements,
warranties or representations made herein or in any of the other Loan Documents
or in any certificate or instrument hereafter furnished to it by or on behalf of
the Borrower or any of its Subsidiaries, or be bound to ascertain or inquire as
to the performance or observance of any of the terms, conditions, covenants or
agreements herein or in any instrument at any time constituting, or intended to
constitute, collateral security for the Revolving Credit Notes or to inspect any
of the properties, books or records of the Borrower or any of its Subsidiaries.
The Agent shall not be bound to ascertain whether any notice, consent, waiver or
request delivered to it by the Borrower or any holder of any of the Revolving
Credit Notes shall have been duly authorized or is true, accurate and complete.
The Agent has not made nor does it now make any representations or warranties,
express or implied, nor does it assume any liability to the Banks, with respect
to the credit worthiness or financial conditions of the Borrower or any of its
Subsidiaries. Each Bank acknowledges that it has, independently and without
reliance upon the Agent or any other Bank, and based upon such information and
documents as it has deemed appropriate, made its own credit analysis and
decision to enter into this Credit Agreement.
(S)15.5. PAYMENTS.
(a)
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A payment by the Borrower to the Agent hereunder or any of the other Loan
Documents for the account of any Bank shall constitute a payment to such Bank.
The Agent agrees promptly to distribute to each Bank such Bank's pro rata share
of payments received by the Agent for the account of the Banks except as
otherwise expressly provided herein or in any of the other Loan Documents.
(b)
If in the opinion of the Agent the distribution of any amount received by
it in such capacity hereunder, under the Revolving Credit Notes or under any of
the other Loan Documents might involve it in liability, it may refrain from
making distribution until its right to make distribution shall have been
adjudicated by a court of competent jurisdiction. If a court of competent
jurisdiction shall adjudge that any amount received and distributed by the Agent
is to be repaid, each Person to whom any such distribution shall have been made
shall either repay to the Agent its proportionate share of the amount so
adjudged to be repaid or shall pay over the same in such manner and to such
Persons as shall be determined by such court.
(c)
Notwithstanding anything to the contrary contained in this Credit Agreement
or any of the other Loan Documents, any Bank that fails
(i)
to make available to the Agent its pro rata share of any Revolving Credit Loan
or to purchase any Letter of Credit Participation or
(ii)
to comply with the provisions of (S)14 with respect to making dispositions and
arrangements with the other Banks, where such Bank's share of any payment
received, whether by setoff or otherwise, is in excess of its pro rata share of
such payments due and payable to all of the Banks, in each case as, when and to
the full extent required by the provisions of this Credit Agreement, shall be
deemed delinquent (a "DELINQUENT BANK") and shall be deemed a Delinquent Bank
until such time as such delinquency is satisfied. A Delinquent Bank shall be
deemed to have assigned any and all payments due to it from the Borrower,
whether on account of outstanding Revolving Credit Loans, Unpaid Reimbursement
Obligations, interest, fees or otherwise, to the remaining nondelinquent Banks
for application to, and reduction of, their respective pro rata shares of all
outstanding Revolving Credit Loans and Unpaid Reimbursement Obligations. The
Delinquent Bank hereby authorizes the Agent to distribute such payments to the
nondelinquent Banks in proportion to their respective pro rata shares of all
outstanding Revolving Credit Loans and Unpaid Reimbursement Obligations. A
Delinquent Bank shall be deemed to have satisfied in full a delinquency when and
if, as a result of application of the assigned payments to all outstanding
Revolving Credit Loans and Unpaid Reimbursement Obligations of the nondelinquent
Banks, the Banks' respective pro rata shares of all outstanding Revolving Credit
Loans and Unpaid Reimbursement Obligations have returned to those in effect
immediately prior to such delinquency and without giving effect to the
nonpayment causing such delinquency.
(S)15.6. HOLDERS OF REVOLVING CREDIT NOTES.
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The Agent may deem and treat the payee of any Revolving Credit Note or the
purchaser of any Letter of Credit Participation as the absolute owner or
purchaser thereof for all purposes hereof until it shall have been furnished in
writing with a different name by such payee or by a subsequent holder, assignee
or transferee.
(S)15.7. INDEMNITY.
The Banks ratably agree hereby to indemnify and hold harmless the Agent
from and against any and all claims, actions and suits (whether groundless or
otherwise), losses, damages, costs, expenses (including any expenses for which
the Agent has not been reimbursed by the Borrower as required by (S)16), and
liabilities of every nature and character arising out of or related to this
Credit Agreement, the Revolving Credit Notes, or any of the other Loan Documents
or the transactions contemplated or evidenced hereby or thereby, or the Agent's
actions taken hereunder or thereunder, except to the extent that any of the same
shall be directly caused by the Agent's willful misconduct or gross negligence.
(S)15.8. AGENT AS BANK.
In its individual capacity, BKBCT shall have the same obligations and the
same rights, powers and privileges in respect to its Commitment and the
Revolving Credit Loans made by it, and as the holder of any of the Revolving
Credit Notes and as the purchaser of any Letter of Credit Participations, as it
would have were it not also the Agent.
(S)15.9. RESIGNATION.
The Agent may resign at any time by giving sixty (60) days' prior written
notice thereof to the Banks and the Borrower. Upon any such resignation, the
Majority Banks shall have the right to appoint a successor Agent. Unless an
Event of Default shall have occurred and be continuing, such successor Agent
shall be reasonably acceptable to the Borrower. If no successor Agent shall
have been so appointed by the Majority Banks and shall have accepted such
appointment within thirty (30) days after the retiring Agent's giving of notice
of resignation, then the retiring Agent may, on behalf of the Banks, appoint a
successor Agent, which shall be a financial institution having a rating of not
less than A or its equivalent by Standard & Poor's Corporation. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation, the provisions of this Credit Agreement and the
other Loan Documents shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Agent.
(S)15.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT.
Each Bank hereby agrees that, upon learning of the existence of a Default
or an Event of Default, it shall promptly notify the Agent thereof. The Agent
hereby agrees that
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upon receipt of any notice under this (S)15.10 it shall promptly notify the
other Banks of the existence of such Default or Event of Default.
(S)15.11. DUTIES IN THE CASE OF ENFORCEMENT.
In case one of more Events of Default have occurred and shall be
continuing, and whether or not acceleration of the Obligations shall have
occurred, the Agent shall, if
(a)
so requested by the Majority Banks and
(b)
the Banks have provided to the Agent such additional indemnities and assurances
against expenses and liabilities as the Agent may reasonably request, proceed to
enforce the provisions of the Security Documents authorizing the sale or other
disposition of all or any part of the Collateral and exercise all or any such
other legal and equitable and other rights or remedies as it may have in respect
of such Collateral. The Majority Banks may direct the Agent in writing as to the
method and the extent of any such sale or other disposition, the Banks hereby
agreeing to indemnify and hold the Agent, harmless from all liabilities incurred
in respect of all actions taken or omitted in accordance with such directions,
provided that the Agent need not comply with any such direction to the extent
that the Agent reasonably believes the Agent's compliance with such direction to
be unlawful or commercially unreasonable in any applicable jurisdiction.
(S)16. EXPENSES.
The Borrower agrees to pay to the Agent on behalf of the Banks and the Agent
upon demand
(a)
an amount equal to any and all out-of-pocket costs or expenses (including
reasonable legal fees and disbursements and appraisal expenses) incurred or
sustained by the Agent in connection with the preparation of this Credit
Agreement and related matters,
(b)
from time to time any and all out-of-pocket costs or expenses (including
commercial examiner fees and legal fees and disbursements) hereafter incurred or
sustained by the Agent or any Bank in connection with the preservation of or
enforcement of the Agent's or any Bank's rights under this Credit Agreement, the
Revolving Credit Notes or the other Loan Documents or in respect of any of the
Borrower's other obligations to the Agent and the Banks, and
(c)
any fees, costs, expenses and bank charges, including bank charges for returned
checks, incurred by the Agent in establishing, maintaining or handling agency
accounts, lock box accounts and other accounts for the collection of any of the
Collateral; provided, that unless an Event of Default shall have occurred and be
continuing, the Borrower will not be required to pay more than $5,000 to the
Agent or any Bank semi-annually in connection with commercial finance
examinations.
(S)17. INDEMNIFICATION.
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After prompt notice from any Bank or the Agent, the Borrower agrees to
indemnify and hold harmless the Agent and the Banks from and against any and all
liabilities, losses, damages and expenses of every nature and character arising
in connection with any and all claims, actions and suits whether groundless or
otherwise, involving this Credit Agreement or any of the other Loan Documents or
the transactions contemplated hereby including, without limitation,
(a)
any actual or proposed use by the Borrower or any of its Subsidiaries of the
proceeds of any of the Revolving Credit Loans or Letters of Credit,
(b)
the reversal or withdrawal of any provisional credits granted by the Agent upon
the transfer of funds from bank agency or lock box accounts or in connection
with the provisional honoring of checks or other items,
(c)
any actual or alleged infringement of any patent, copyright, trademark, service
xxxx or similar right of the Borrower or any of its Subsidiaries comprised in
the Collateral,
(d)
the Borrower or any of its Subsidiaries entering into or performing this
Credit Agreement or any of the other Loan Documents or
(e)
with respect to the Borrower and its Subsidiaries and their respective
properties and assets, the violation of any Environmental Law, the presence,
disposal, escape, seepage, leakage, spillage, discharge, emission, release or
threatened release of any Hazardous Substances or any action, suit, proceeding
or investigation brought or threatened with respect to any Hazardous Substances
(including, but not limited to, claims with respect to wrongful death, personal
injury or damage to property), in each case including, without limitation, the
reasonable fees and disbursements of counsel and allocated costs of internal
counsel incurred in connection with any such investigation, litigation or other
proceeding. In litigation, or the preparation therefor, the Borrower shall be
entitled to select counsel reasonably satisfactory to the Agent and the Banks
(except to the extent that the Borrower and the Agent or any Bank have
conflicting or adverse position in such litigation or proceeding whereupon the
Agent and the Banks shall be entitled to select their own counsel). In addition
to the foregoing indemnity, the Borrower agrees to pay promptly the reasonable
fees and expenses of counsel to the Agent and the Banks if required or permitted
by the terms hereof. If, and to the extent that the obligations of the Borrower
under this (S)17 are unenforceable for any reason, the Borrower hereby agrees to
make the maximum contribution to the payment in satisfaction of such obligations
which is permissible under applicable law. The covenants contained in this (S)17
shall survive payment or satisfaction in full of all other Obligations.
(S)18. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made herein,
in the Revolving Credit Notes, in any of the other Loan Documents or in any
documents or other papers delivered by or on behalf of the Borrower or any of
its Subsidiaries pursuant hereto shall be deemed to have been relied upon by the
Banks and the Agent, notwithstanding any investigation heretofore or hereafter
made by any of them, and shall survive the making by
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the Banks of any of the Revolving Credit Loans and the issuance, extension or
renewal of any Letters of Credit, as herein contemplated, and shall continue in
full force and effect so long as any Letter of Credit or any amount due under
this Credit Agreement or the Revolving Credit Notes or any of the other Loan
Documents remains outstanding or any Bank has any obligation to make any
Revolving Credit Loans or the Agent has any obligation to issue, extend or renew
any Letter of Credit, and for such further time as may be otherwise expressly
specified in this Credit Agreement. All statements contained in any certificate
delivered to any Bank or the Agent at any time by or on behalf of the Borrower
or any of its Subsidiaries pursuant hereto or in connection with the
transactions contemplated hereby shall constitute representations and warranties
by the Borrower or such Subsidiary hereunder.
(S)19. ASSIGNMENT AND PARTICIPATION.
(S)19.1. CONDITIONS TO ASSIGNMENT BY BANKS.
Except as provided herein, each Bank may assign to one or more Eligible
Assignees all or a portion of its interests, rights and obligations under this
Credit Agreement (including all or a portion of its Commitment Percentage and
Commitment and the same portion of the Revolving Credit Loans at the time owing
to it, the Revolving Credit Notes held by it and its participating interest in
the risk relating to any Letters of Credit); provided that
(a)
each of the Agent and, unless Default or an Event of Default has occurred and is
continuing, the Borrower shall have given its prior written consent to such
assignment, which consent, in the case of the Borrower, will not be unreasonably
withheld,
(b)
each such assignment shall be of a constant, and not a varying, percentage of
all the assigning Bank's rights and obligations under this Credit Agreement,
(c)
each assignment shall be in an amount that is a whole multiple of $5,000,000,
and
(d)
the parties to such assignment shall execute and deliver to the Agent, for
recording in the Register (as hereinafter defined), an Assignment and
Acceptance, substantially in the form of Exhibit E hereto (an "ASSIGNMENT AND
ACCEPTANCE"), together with any Revolving Credit Notes subject to such
assignment. Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and Acceptance, which
effective date shall be at least five (5) Business Days after the execution
thereof,
(i)
the assignee thereunder shall be a party hereto and, to the extent provided in
such Assignment and Acceptance, have the rights and obligations of a Bank
hereunder, and
(ii)
the assigning Bank shall, to the extent provided in such assignment and upon
payment to the Agent of the registration fee referred to in (S)19.3, be released
from its obligations under this Credit Agreement.
(S)19.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS;
COVENANTS.
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By executing and delivering an Assignment and Acceptance, the parties to
the assignment thereunder confirm to and agree with each other and the other
parties hereto as follows:
(a)
other than the representation and warranty that it is the legal and beneficial
owner of the interest being assigned thereby free and clear of any adverse
claim, the assigning Bank makes no representation or warranty, express or
implied, and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Credit
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Credit Agreement, the other Loan Documents or any
other instrument or document furnished pursuant hereto or the attachment,
perfection or priority of any security interest or mortgage;
(b)
the assigning Bank makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower and its
Subsidiaries or any other Person primarily or secondarily liable in respect of
any of the Obligations, or the performance or observance by the Borrower and its
Subsidiaries or any other Person primarily or secondarily liable in respect of
any of the Obligations of any of their obligations under this Credit Agreement
or any of the other Loan Documents or any other instrument or document furnished
pursuant hereto or thereto;
(c)
such assignee confirms that it has received a copy of this Credit Agreement,
together with copies of the most recent financial statements referred to in
(S)7.4 and (S)8.4 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance;
(d)
such assignee will, independently and without reliance upon the assigning Bank,
the Agent or any other Bank and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Credit Agreement;
(e)
such assignee represents and warrants that it is an Eligible Assignee;
(f)
such assignee appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers under this Credit Agreement and the other
Loan Documents as are delegated to the Agent by the terms hereof or thereof,
together with such powers as are reasonably incidental thereto;
(g)
such assignee agrees that it will perform in accordance with their terms all of
the obligations that by the terms of this Credit Agreement are required to be
performed by it as a Bank;
(h)
such assignee represents and warrants that it is legally authorized to enter
into such Assignment and Acceptance; and
(i)
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such assignee acknowledges that it has made arrangements with the assigning
Bank satisfactory to such assignee with respect to its pro rata share of Letter
of Credit Fees in respect of outstanding Letters of Credit.
(S)19.3. REGISTER.
The Agent shall maintain a copy of each Assignment and Acceptance delivered
to it and a register or similar list (the "REGISTER") for the recordation of the
names and addresses of the Banks and the Commitment Percentage of, and principal
amount of the Revolving Credit Loans owing to and Letter of Credit
Participations purchased by, the Banks from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Agent and the Banks may treat each Person whose name is recorded
in the Register as a Bank hereunder for all purposes of this Credit Agreement.
The Register shall be available for inspection by the Borrower and the Banks at
any reasonable time and from time to time upon reasonable prior notice. Upon
each such recordation, the assigning Bank agrees to pay to the Agent a
registration fee in the sum of $2,500.00.
(S)19.4. NEW REVOLVING CREDIT NOTES.
Upon its receipt of an Assignment and Acceptance executed by the parties
to such assignment, together with each Revolving Credit Note subject to such
assignment, the Agent shall
(a)
record the information contained therein in the Register, and
(b)
give prompt notice thereof to the Borrower and the Banks (other than the
assigning Bank). Within five (5) Business Days after receipt of such notice, the
Borrower, at its own expense, shall execute and deliver to the Agent, in
exchange for each surrendered Revolving Credit Note, a new Revolving Credit Note
to the order of such Eligible Assignee in an amount equal to the amount assumed
by such Eligible Assignee pursuant to such Assignment and Acceptance and, if the
assigning Bank has retained some portion of its obligations hereunder, a new
Revolving Credit Note to the order of the assigning Bank in an amount equal to
the amount retained by it hereunder. Such new Revolving Credit Notes shall
provide that they are replacements for the surrendered Revolving Credit Notes,
shall be in an aggregate principal amount equal to the aggregate principal
amount of the surrendered Revolving Credit Notes, shall be dated the effective
date of such in Assignment and Acceptance and shall otherwise be substantially
the form of the assigned Revolving Credit Notes. The surrendered Revolving
Credit Notes shall be canceled and returned to the Borrower.
(S)19.5. PARTICIPATIONS.
Each Bank may sell participations to one or more banks or other entities
in all or a portion of such Bank's rights and obligations under this Credit
Agreement and the other Loan Documents; provided that
(a)
each such participation shall be in an amount of not less than $5,000,000,
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(b)
any such sale or participation shall not affect the rights and duties of the
selling Bank hereunder to the Borrower and
(c)
the only rights granted to the participant pursuant to such participation
arrangements with respect to waivers, amendments or modifications of the Loan
Documents shall be the rights to approve waivers, amendments or modifications
that would reduce the principal of or the interest rate on any Revolving Credit
Loans, extend the term or increase the amount of the Commitment of such Bank as
it relates to such participant, reduce the amount of any commitment fees or
Letter of Credit Fees to which such participant is entitled or extend any
regularly scheduled payment date for principal or interest.
(S)19.6. DISCLOSURE.
The Borrower agrees that in addition to disclosures made in accordance
with standard and customary banking practices any Bank may disclose information
obtained by such Bank pursuant to this Credit Agreement to assignees or
participants and potential assignees or participants hereunder; provided that
such assignees or participants or potential assignees or participants shall
agree for the benefit of the Borrower
(a)
to treat in confidence such information unless such information otherwise
becomes public knowledge,
(b)
not to disclose such information to a third party, except as required by law or
legal process and
(c)
not to make use of such information for purposes of transactions unrelated to
such contemplated assignment or participation.
(S)19.7. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWER.
If any assignee Bank is an Affiliate of the Borrower, then any such
assignee Bank shall have no right to vote as a Bank hereunder or under any of
the other Loan Documents for purposes of granting consents or waivers or for
purposes of agreeing to amendments or other modifications to any of the Loan
Documents or for purposes of making requests to the Agent pursuant to (S)13.1 or
(S)13.2, and the determination of the Majority Banks shall for all purposes of
this Agreement and the other Loan Documents be made without regard to such
assignee Bank's interest in any of the Revolving Credit Loans. If any Bank
sells a participating interest in any of the Revolving Credit Loans or
Reimbursement Obligations to a participant, and such participant is the Borrower
or an Affiliate of the Borrower, then such transferor Bank shall promptly notify
the Agent of the sale of such participation. A transferor Bank shall have no
right to vote as a Bank hereunder or under any of the other Loan Documents for
purposes of granting consents or waivers or for purposes of agreeing to
amendments or modifications to any of the Loan Documents or for purposes of
making requests to the Agent pursuant to (S)13.1 or (S)13.2 to the extent that
such participation is beneficially owned by the Borrower or any Affiliate of the
Borrower, and the determination
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of the Majority Banks shall for all purposes of this Agreement and the other
Loan Documents be made without regard to the interest of such transferor Bank in
the Revolving Credit Loans to the extent of such participation.
(S)19.8. MISCELLANEOUS ASSIGNMENT PROVISIONS.
Any assigning Bank shall retain its rights to be indemnified pursuant to
(S)17 with respect to any claims or actions arising prior to the date of such
assignment. If any assignee Bank is not incorporated under the laws of the
United States of America or any state thereof, it shall, prior to the date on
which any interest or fees are payable hereunder or under any of the other Loan
Documents for its account, deliver to the Borrower and the Agent certification
as to its exemption from deduction or withholding of any United States federal
income taxes. If any Reference Bank transfers all of its interest, rights and
obligations under this Credit Agreement, the Agent shall, in consultation with
the Borrower and with the consent of the Borrower and the Majority Banks,
appoint another Bank to act as a Reference Bank hereunder. Anything contained
in this (S)19 to the contrary notwithstanding, any Bank may at any time pledge
all or any portion of its interest and rights under this Credit Agreement
(including all or any portion of its Revolving Credit Notes) to any of the
twelve Federal Reserve Banks organized under (S)4 of the Federal Reserve Act, 12
U.S.C. (S)341. No such pledge or the enforcement thereof shall release the
pledgor Bank from its obligations hereunder or under any of the other Loan
Documents.
(S)19.9. ASSIGNMENT BY BORROWER.
The Borrower shall not assign or transfer any of its rights or obligations
under any of the Loan Documents without the prior written consent of each of the
Banks.
(S)20. NOTICES, ETC.
Except as otherwise expressly provided in this Credit Agreement, all
notices and other communications made or required to be given pursuant to this
Credit Agreement or the Revolving Credit Notes or any Letter of Credit
Applications shall be in writing and shall be delivered in hand, mailed by
United States registered or certified first class mail, postage prepaid, sent by
overnight courier, or sent by telegraph, telecopy, facsimile or telex and
confirmed by delivery via courier or postal service, addressed as follows:
(a)
if to the Borrower, at 000 Xxxx Xxxxxx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxxx,
00000, Attention: Xxxx X. Xxxxxx, Vice President-Finance, or at such other
address for notice as the Borrower shall last have furnished in writing to the
Person giving the notice, with an additional copy to Xxxxxxxxxxx & Xxxxxx, 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx
Xxxxxxxxxxx, Esq.;
(b)
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if to the Agent, at 00 Xxxx Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000, XXX,
Attention: Xxxxxx Xxxxxx, Vice President, or such other address for notice as
the Agent shall last have furnished in writing to the Person giving the notice;
and
(c)
if to any Bank, at such Bank's address set forth on Schedule 1 hereto, or
such other address for notice as such Bank shall have last furnished in writing
to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or made and to
have become effective
(i)
if delivered by hand, overnight courier or facsimile to a responsible officer of
the party to which it is directed, at the time of the receipt thereof by such
officer or the sending of such facsimile and
(ii)
if sent by registered or certified first-class mail, postage prepaid, on the
third Business Day following the mailing thereof.
(S)21. GOVERNING LAW.
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE
STATE OF CONNECTICUT AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH (EXCLUDING THE LAWS APPLICABLE TO
CONFLICTS OR CHOICE OF LAW). THE BORROWER AGREES THAT ANY SUIT FOR THE
ENFORCEMENT OF THIS CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE
BROUGHT IN THE COURTS OF THE STATE OF CONNECTICUT OR ANY FEDERAL COURT SITTING
THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE
OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS
SPECIFIED IN (S)20. THE BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT
IS BROUGHT IN AN INCONVENIENT COURT.
(S)22. HEADINGS.
The captions in this Credit Agreement are for convenience of reference
only and shall not define or limit the provisions hereof.
(S)23. COUNTERPARTS.
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This Credit Agreement and any amendment hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which when
executed and delivered shall be an original, and all of which together shall
constitute one instrument. In proving this Credit Agreement it shall not be
necessary to produce or account for more than one such counterpart signed by the
party against whom enforcement is sought.
(S)24. ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection
herewith or therewith express the entire understanding of the parties with
respect to the transactions contemplated hereby. Neither this Credit Agreement
nor any term hereof may be changed, waived, discharged or terminated, except as
provided in (S)26.
(S)25. WAIVER OF JURY TRIAL.
The Borrower hereby waives its right to a jury trial with respect to any
action or claim arising out of any dispute in connection with this Credit
Agreement, the Revolving Credit Notes or any of the other Loan Documents, any
rights or obligations hereunder or thereunder or the performance of which rights
and obligations. Except as prohibited by law, the Borrower hereby waives any
right it may have to claim or recover in any litigation referred to in the
preceding sentence any special, exemplary, punitive or consequential damages or
any damages other than, or in addition to, actual damages. The Borrower
(a)
certifies that no representative, agent or attorney of any Bank or the Agent has
represented, expressly or otherwise, that such Bank or the Agent would not, in
the event of litigation, seek to enforce the foregoing waivers and
(b)
acknowledges that the Agent and the Banks have been induced to enter into this
Credit Agreement and the other Loan Documents to which it is a party by, among
other things, the waivers and certifications contained herein.
(S)26. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Any consent or approval required or permitted by this Credit Agreement to
be given by all of the Banks may be given, and any term of this Credit
Agreement, the other Loan Documents or any other instrument related hereto or
mentioned herein may be amended, and the performance or observance by the
Borrower or any of its Subsidiaries of any terms of this Credit Agreement, the
other Loan Documents or such other instrument or the continuance of any Default
or Event of Default may be waived (either generally or in a particular instance
and either retroactively or prospectively) with, but only with, the written
consent of the Borrower and the written consent of the Majority Banks; provided,
that, notwithstanding the foregoing, the Cash Management Agreements may be
waived, modified or terminated at any time by BKBCT and the Borrower without the
consent of the Banks. Notwithstanding the foregoing, the rate of interest on the
Revolving Credit Notes (other than interest accruing pursuant to (S)5.11
following the effective date of any waiver by the Majority Banks of the Default
or Event of Default relating thereto), the term and maturity of the Revolving
Credit
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Notes, the amount of the Commitments of the Banks, and the amount of commitment
fee or Letter of Credit Fees hereunder may not be changed without the written
consent of the Borrower and the written consent of each Bank affected thereby;
the definition of Majority Banks may not be amended without the written consent
of all of the Banks; and the amount of the Agent's Fee or any Letter of Credit
Fees payable for the Agent's account and (S)15 may not be amended without the
written consent of the Agent. No waiver shall extend to or affect any obligation
not expressly waived or impair any right consequent thereon. No course of
dealing or delay or omission on the part of the Agent or any Bank in exercising
any right shall operate as a waiver thereof or otherwise be prejudicial thereto.
No notice to or demand upon the Borrower shall entitle the Borrower to other or
further notice or demand in similar or other circumstances.
(S)27. SEVERABILITY.
The provisions of this Credit Agreement are severable and if any one
clause or provision hereof shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction, and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Credit Agreement in any jurisdiction.
(S)28. COMMERCIAL TRANSACTION; PREJUDGMENT REMEDY WAIVER.
THE BORROWER REPRESENTS, WARRANTS AND ACKNOWLEDGES THAT THE TRANSACTION OF
WHICH THIS CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS ARE A PART IS A
"COMMERCIAL TRANSACTION" WITHIN THE MEANING OF CHAPTER 903A OF CONNECTICUT
GENERAL STATUTES, AS AMENDED. THE BORROWER HEREBY WAIVES ITS RIGHT TO NOTICE
AND PRIOR COURT HEARING OR COURT ORDER UNDER CONNECTICUT GENERAL STATUTES
SECTIONS 52-278a ET. SEQ. AS AMENDED OR UNDER ANY OTHER STATE OR FEDERAL LAW
WITH RESPECT TO ANY AND ALL PREJUDGMENT REMEDIES THE AGENT OR THE BANKS MAY
EMPLOY TO ENFORCE THEIR RIGHTS AND REMEDIES HEREUNDER AND UNDER THE OTHER LOAN
DOCUMENTS. MORE SPECIFICALLY, BORROWER ACKNOWLEDGES THAT THE AGENT'S ATTORNEY
AND/OR THE BANKS' ATTORNEY MAY, PURSUANT TO CONN. GEN. STAT. (S)52-278f, ISSUE A
WRIT FOR A PREJUDGMENT REMEDY WITHOUT SECURING A COURT ORDER. THE BORROWER
ACKNOWLEDGES AND RESERVES ITS RIGHT TO NOTICE AND A HEARING SUBSEQUENT TO THE
ISSUANCE OF A WRIT FOR PREJUDGMENT REMEDY AS AFORESAID AND THE AGENT AND THE
BANKS ACKNOWLEDGES BORROWER'S RIGHT TO SAID HEARING SUBSEQUENT TO THE ISSUANCE
OF SAID WRIT.
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IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.
XXXXX MEDICAL CORP.
By:_________________________________
Its:_________________________________
BANK OF BOSTON CONNECTICUT
individually and as Agent
By:_________________________________
Its: Vice President
SCHEDULE 2
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DEFINITIONS AND RULES OF INTERPRETATION.
----------------------------------------
Definitions. The following terms shall have the meanings set forth in
this Schedule 2 or elsewhere in the provisions of this Credit Agreement referred
to below:
Accounts Receivable. All rights of the Borrower to payment for goods
sold, leased or otherwise marketed in the ordinary course of business and all
rights of the Borrower to payment for services rendered in the ordinary course
of business and all sums of money or other proceeds due thereon pursuant to
transactions with account debtors, except for that portion of the sum of money
or other proceeds due thereon that relate to sales, use or property taxes in
conjunction with such transactions, recorded on books of account in accordance
with generally accepted accounting principles.
Affiliate. Any Person that would be considered to be an affiliate of
the Borrower under Rule 144(a) of the Rules and Regulations of the Securities
and Exchange Commission, as in effect on the date hereof, if the Borrower were
issuing securities.
Agent. Bank of Boston Connecticut acting as agent for the Banks.
Agent's Special Counsel. Xxxxxxx, Xxxx & Xxxxx or such other counsel as
may be approved by the Agent.
Applicable Margin. See (S)2.5 hereof.
Assignment and Acceptance. See (S)19.1.
Balance Sheet Date. December 31, 1994.
Banks. BKBCT and the other lending institutions listed on Schedule 1
hereto and any other Person who becomes an assignee of any rights and
obligations of a Bank pursuant to (S)19.
Base Rate. The higher of (a) the annual rate of interest announced from
time to time by The First National Bank of Boston at its head office in Boston,
Massachusetts, as its "base rate" and (b) one-half of one percent (1/2%) above
the Federal Funds Effective Rate. For the purposes of this definition, "Federal
Funds Effective Rate" shall mean for any day, the rate per annum equal to the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for such day on such
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transactions received by the Agent from three funds brokers of recognized
standing selected by the Agent.
Base Rate Loans. Revolving Credit Loans bearing interest calculated by
reference to the Base Rate.
BKBCT. Bank of Boston Connecticut, a Connecticut state chartered savings
bank, in its individual capacity.
Borrower. As defined in the preamble hereto.
Borrowing Base. At the relevant time of reference thereto, an amount
determined by the Agent by reference to the most recent Borrowing Base Report
delivered to the Banks and the Agent pursuant to (S)8.4(e), which is equal to
the sum of:
(a) 85% of Eligible Accounts Receivable for which invoices have been
issued and are payable; plus
(b) the lesser of (i) 55% of the net book value (determined on an
average cost basis at lower of cost or market) of Eligible Inventory and (ii)
$33,000,000.
Borrowing Base Report. A Borrowing Base Report signed by the chief
financial officer of the Borrower and in substantially the form of Exhibit D
hereto.
Business Day. Any day on which banking institutions in Hartford,
Connecticut, are open for the transaction of banking business and, in the case
of Eurodollar Rate Loans, also a day which is a Eurodollar Business Day.
Capital Assets. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); provided that Capital Assets shall not
include any item customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with generally accepted
accounting principles.
Capital Expenditures. Amounts paid or indebtedness incurred by the
Borrower or any of its Subsidiaries in connection with the purchase or lease by
the Borrower or any of its Subsidiaries of Capital Assets that would be required
to be capitalized (including, without limitation, indebtedness incurred and
amounts paid in connection with Capitalized Leases) and shown on the balance
sheet as an asset of such Person in accordance with generally accepted
accounting principles.
Capitalized Leases. Leases under which the Borrower or any of its
Subsidiaries is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with generally accepted accounting
principles.
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Cash Collateral Account. See (S)8.13 hereof.
Cash Management Agreements. Collectively, the Cash Management Master
Agreement (New England), to be dated on or after the date hereof, among the
Borrower, BKBCT and certain affiliates of BKBCT, together with all schedules and
exhibits thereto, and the Money Transfer Agreement, to be dated on or after the
date hereof, between the Borrower and BKBCT, together with all exhibits and
schedules thereto.
Closing Date. The first date on which the conditions set forth in (S)11
have been satisfied and any Revolving Credit Loans are to be made or any Letter
of Credit is to be issued hereunder.
Code. The Internal Revenue Code of 1986.
Collateral. All of the property, rights and interests of the Borrower
and its Subsidiaries that are or are intended to be subject to the security
interests and mortgages created by the Security Documents.
Commitment. With respect to each Bank, the amount set forth on Schedule
1 hereto as the amount of such Bank's commitment to make Revolving Credit Loans
to, and to participate in the issuance, extension and renewal of Letters of
Credit for the account of, the Borrower, as the same may be reduced from time to
time; or if such commitment is terminated pursuant to the provisions hereof,
zero.
Commitment Percentage. With respect to each Bank, the percentage set
forth on Schedule 1 hereto as such Bank's percentage of the aggregate
Commitments of all of the Banks.
Consolidated or consolidated. With reference to any term defined herein,
shall mean that term as applied to the accounts of the Borrower and its
Subsidiaries, consolidated in accordance with generally accepted accounting
principles.
Consolidated Financial Obligations. With respect to any fiscal period,
an amount equal to the sum of all payments on Indebtedness that become due and
payable or that are to become due and payable during such fiscal period pursuant
to any agreement or instrument to which the Borrower or any of its Subsidiaries
is a party relating to the borrowing of money or the obtaining of credit or in
respect of Capitalized Leases. Demand obligations shall be deemed to be due and
payable during any fiscal period during which such obligations are outstanding.
Consolidated Net Income (or Deficit). The consolidated net income (or
deficit) of the Borrower and its Subsidiaries, after deduction of all expenses,
taxes, and other proper charges, determined in accordance with generally
accepted accounting principles.
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Consolidated Operating Cash Flow. For any period, an amount equal to
(a) the sum of (i) Earnings Before Interest and Taxes for such period, plus (ii)
depreciation, amortization and all other noncash charges for such period, less
(b) the sum of (i) cash payments for all income taxes paid during such period,
plus (ii) Capital Expenditures made during such period to the extent permitted
by (S)10.5, plus (iii) the aggregate amount of Distributions paid during such
period.
Consolidated Tangible Net Worth. The excess of Consolidated Total
Assets over Consolidated Total Liabilities, and less the sum of:
(a) the total book value of all assets of the Borrower and its
Subsidiaries properly classified as intangible assets under generally accepted
accounting principles, including such items as good will, the purchase price of
acquired assets in excess of the fair market value thereof, trademarks, trade
names, service marks, brand names, copyrights, patents and licenses, and rights
with respect to the foregoing; plus
(b) all amounts representing any write-up in the book value of
any assets of the Borrower or its Subsidiaries resulting from a revaluation
thereof subsequent to the Balance Sheet Date; plus
(c) to the extent otherwise includable in the computation of
Consolidated Tangible Net Worth, any subscriptions receivable.
Consolidated Total Assets. All assets of the Borrower and its
Subsidiaries determined on a consolidated basis in accordance with generally
accepted accounting principles.
Consolidated Total Interest Expense. For any period, the aggregate
amount of interest required to be paid or accrued by the Borrower and its
Subsidiaries during such period on all Indebtedness of the Borrower and its
Subsidiaries outstanding during all or any part of such period, whether such
interest was or is required to be reflected as an item of expense or
capitalized, including payments consisting of interest in respect of Capitalized
Leases and including commitment fees, agency fees, facility fees, balance
deficiency fees and similar fees or expenses in connection with the borrowing of
money, all as determined in accordance with generally accepted accounting
principles.
Consolidated Total Liabilities. All liabilities of the Borrower and
its Subsidiaries determined on a consolidated basis in accordance with generally
accepted accounting principles.
Conversion Request. A notice given by the Borrower to the Agent of
the Borrower's election to convert or continue a Revolving Credit Loan in
accordance with (S)2.7.
Credit Agreement. This Revolving Credit Agreement, including the
Schedules and Exhibits hereto .
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Default. See (S)13.1.
Distribution. The declaration or payment of any dividend on or in
respect of any shares of any class of capital stock of the Borrower, other than
dividends payable solely in shares of common stock of the Borrower; the
purchase, redemption, or other retirement of any shares of any class of capital
stock of the Borrower, directly or indirectly through a Subsidiary of the
Borrower or otherwise; the return of capital by the Borrower to its shareholders
as such; or any other distribution on or in respect of any shares of any class
of capital stock of the Borrower.
Dollars or $. Dollars in lawful currency of the United States of
America.
Domestic Lending Office. Initially, the office of each Bank
designated as such in Schedule 1 hereto; thereafter, such other office of such
Bank, if any, located within the United States that will be making or
maintaining Base Rate Loans.
Drawdown Date. The date on which any Revolving Credit Loan is made or
is to be made, and the date on which any Revolving Credit Loan is converted or
continued in accordance with (S)2.7 or in accordance with the Cash Management
Agreements.
Earnings Before Interest and Taxes. The consolidated earnings (or
loss) from the operations of the Borrower and its Subsidiaries for any period,
after all expenses and other proper charges but before payment or provision for
any income taxes or interest expense for such period, determined in accordance
with generally accepted accounting principles.
Eligible Accounts Receivable. The aggregate of the unpaid portions of
Accounts Receivable (net of any credits, rebates, offsets, holdbacks or other
adjustments or commissions payable to third parties that are adjustments to such
Accounts Receivable) (a) that the Borrower reasonably and in good faith
determines to be collectible; (b) that are with account debtors that (i) are not
Affiliates of the Borrower, (ii) purchased the goods or services giving rise to
the relevant Account Receivable in an arm's length transaction, (iii) are not
insolvent or involved in any case or proceeding, whether voluntary or
involuntary, under any bankruptcy, reorganization, arrangement, insolvency,
adjustment of debt, dissolution, liquidation or similar law of any jurisdiction
and (iv) are not, in the Majority Banks' reasonable judgment, uncreditworthy;
(c) that are in payment of obligations that have been fully performed; (d) that
are not subject to dispute or any other similar claims that would reduce the
cash amount payable therefor; (e) that are not subject to any pledge,
restriction, security interest or other lien or encumbrance other than those
created by the Loan Documents; (f) in which the Agent has a valid and perfected
first priority security interest; (g) that are not outstanding for more than
sixty (60) days past the date of the respective invoices therefor; (h) that are
not outstanding more than ninety (90) days past the date of shipment thereof in
the case of goods or the end of the calendar month following the provision
thereof in the case of services (each such date, a "SHIPMENT DATE"); provided,
that
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Accounts Receivables that otherwise would qualify as Eligible Accounts
Receivable, in an aggregate amount not in excess of ten percent (10%) of all
otherwise Eligible Accounts Receivable, shall be included in the definition of
Eligible Accounts Receivable if such Accounts Receivable are not outstanding
more than three hundred sixty five (365) days past the Shipment Date applicable
thereto; (i) that are not due from any single account debtor if more than
fifteen percent (15%) of the aggregate amount of all Accounts Receivable owing
from such account debtor would otherwise not be Eligible Accounts Receivable;
(j) that are payable in Dollars; and (k) that are not payable from an office
outside of the United States.
Eligible Assignee. Any of (a) a commercial bank or finance company
organized under the laws of the United States, or any State thereof or the
District of Columbia, and having total assets in excess of $10,000,000,000; (b)
a savings and loan association or savings bank organized under the laws of the
United States, or any State thereof or the District of Columbia, and having a
net worth of at least $1,000,000,000, calculated in accordance with generally
accepted accounting principles; (c) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having total assets in excess of $10,000,000,000, provided that
such bank is acting through a branch or agency located in the country in which
it is organized or another country which is also a member of the OECD; (d) the
central bank of any country which is a member of the OECD; and (e) if, but only
if, any Event of Default has occurred and is continuing, any other bank,
insurance company, commercial finance company or other financial institution or
other Person approved by the Agent, such approval not to be unreasonably
withheld.
Eligible Inventory. With respect to the Borrower or any of its
Subsidiaries, finished goods, work in progress and raw materials and component
parts inventory owned by the Borrower or such Subsidiary; provided that Eligible
Inventory shall not include any inventory (i) held on consignment, or not
otherwise owned by the Borrower or such Subsidiary, or of a type no longer sold
by the Borrower or such Subsidiary, (ii) which has been returned by a customer
and not saleable in the ordinary course of the Borrower's business or is damaged
or subject to any legal encumbrance other than Permitted Liens, (iii) which is
not in the possession of the Borrower or such Subsidiary unless the Agent has
received a waiver from the party in possession of such inventory in form and
substance satisfactory to the Agent, (iv) which is held by the Borrower or such
Subsidiary on property leased by the Borrower or a Subsidiary, unless the Agent
has received a waiver from the lessor of such leased property and, if any,
sublessor thereof in form and substance satisfactory to the Agent, (v) as to
which appropriate Uniform Commercial Code financing statements showing the
Borrower or such Subsidiary as debtor and the Agent as secured party have not
been filed in the proper filing office or offices in order to perfect the
Agent's security interest therein, (vi) which has been shipped to a customer of
the Borrower or such Subsidiary regardless of whether such shipment is on a
consignment basis, (vii) which is not located within the United States of
America, or (viii) which the Majority Banks reasonably deem to be obsolete or
not marketable.
-7-
Employee Benefit Plan. Any employee benefit plan within the meaning
of (S)3(3) of ERISA maintained of contributed to by the Borrower or any ERISA
Affiliate, other than a Multiemployer Plan.
Environmental Laws. Any judgment, decree, order, law, license, rule
or regulation pertaining to environmental matters, including without limitation,
those arising under the Resource Conservation and Recovery Act ("RCRA"), the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 as
amended ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986
("XXXX"), the Federal Clean Water Act, the Federal Clean Air Act, the Toxic
Substances Control Act, or any applicable state or local statutes, regulation,
ordinance, order or decree relating to the environment.
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA Affiliate. Any Person which is treated as a single employer
with the Borrower under (S)414 of the Code.
ERISA Reportable Event. A reportable event with respect to a
Guaranteed Pension Plan within the meaning of (S)4043 of ERISA and the
regulations promulgated thereunder as to which the requirement of notice has not
been waived.
Eurocurrency Reserve Rate. For any day with respect to a Eurodollar
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 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.
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 Agent in its
sole discretion acting in good faith.
Eurodollar Lending Office. Initially, the office of each Bank
designated as such in Schedule 1 hereto; thereafter, such other office of such
Bank, if any, that shall be making or maintaining Eurodollar Rate Loans.
Eurodollar Rate. For any Interest Period with respect to a Eurodollar
Rate Loan, the rate of interest equal to (a) the arithmetic average of the rates
per annum for each Reference Bank (rounded upwards to the nearest 1/32 of one
percent) of the rate at which such Reference Bank's Eurodollar Lending Office is
offered Dollar deposits two Eurodollar Business Days prior to the beginning of
such Interest Period in the interbank eurodollar
-8-
market where the eurodollar and foreign currency and exchange operations of such
Eurodollar Lending Office are customarily conducted, for delivery on the first
day of such Interest Period for the number of days comprised therein and in an
amount comparable to the amount of the Eurodollar Rate Loan of such Reference
Bank to which such Interest Period applies, divided by (b) a number equal to
1.00 minus the Eurocurrency Reserve Rate, if applicable.
Eurodollar Rate Loans. Revolving Credit Loans bearing interest
calculated by reference to the Eurodollar Rate.
Event of Default. See (S)13.1.
Generally Accepted Accounting Principles. (a) When used in (S)10,
whether directly or indirectly through reference to a capitalized term used
therein, means (i) principles that are consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, in effect for the fiscal year ended on the Balance Sheet Date, and
(ii) to the extent consistent with such principles, the accounting practice of
the Borrower reflected in its financial statements for the year ended on the
Balance Sheet Date, and (b) when used in general, other than as provided above,
means principles that are (i) consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors, as in
effect from time to time, and (ii) consistently applied with past financial
statements of the Borrower adopting the same principles, provided that in each
case referred to in this definition of "generally accepted accounting
principles" a certified public accountant would, insofar as the use of such
accounting principles is pertinent, be in a position to deliver an unqualified
opinion (other than a qualification regarding changes in generally accepted
accounting principles) as to financial statements in which such principles have
been properly applied.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of (S)3(2) of ERISA maintained or contributed to by the Borrower or any
ERISA Affiliate the benefits of which are guaranteed on termination in full or
in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
Hazardous Substances. Hazardous waste as defined by 42 U.S.C.
(S)9601(5), any hazardous substances as defined by 42 U.S.C. (S)9601(14), any
pollutant or contaminant as defined by 42 U.S.C. (S)9601(33) and any toxic
substances, oil or hazardous materials or other chemicals or substances
regulated by any Environmental Laws.
Head Office. The Agent's head office located at 00 Xxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxxxxx 00000, or at such other location as the Agent may
designate from time to time.
Indebtedness. All obligations, contingent and otherwise, that in
accordance with generally accepted accounting principles should be classified
upon the obligor's balance sheet as liabilities, including in any event and
whether or not so classified: (a) all debt and
-9-
similar monetary obligations, whether direct or indirect; (b) all liabilities
secured by any mortgage, pledge, security interest, lien, charge or other
encumbrance existing on property owned or acquired subject thereto, whether or
not the liability secured thereby shall have been assumed; and (c) all
guarantees, endorsements and other contingent obligations whether direct or
indirect in respect of indebtedness of others, including any obligation to
supply funds to or in any manner to invest in, directly or indirectly, the
debtor, to purchase indebtedness, or to assure the owner of indebtedness against
loss, through an agreement to purchase goods, supplies, or services for the
purpose of enabling the debtor to make payment of the indebtedness held by such
owner or otherwise, and the obligations to reimburse the issuer in respect of
any letters of credit.
Interest Payment Date. (a) As to any Base Rate Loan, the last day of
the fiscal quarter which includes the Drawdown Date thereof; and (b) as to any
Eurodollar Rate Loan in respect of which the Interest Period is (i) 3 months or
less, the last day of such Interest Period and (ii) more than 3 months, the date
that is 3 months from the first day of such Interest Period and, in addition,
the last day of such Interest Period.
Interest Period. With respect to each Revolving Credit Loan, (a)
initially, the period commencing on the Drawdown Date of such Loan and ending on
the last day of one of the periods set forth below, as selected by the Borrower
in a Loan Request (i) for any Base Rate Loan, the last day of the fiscal
quarter; and (ii) for any Eurodollar Rate Loan, 1, 2, 3, or 6 months; and (b)
thereafter, each period commencing on the last day of the next preceding
Interest Period applicable to such Revolving Credit 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 Eurodollar Rate Loan
would otherwise end on a day that is not a Eurodollar Business Day, that
Interest Period shall be extended to the next succeeding Eurodollar 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 Eurodollar Business Day;
(B) if any Interest Period with respect to a Base 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 (S)2.7,
the Borrower shall be deemed to have requested a conversion of the affected
Eurodollar Rate Loan to a Base Rate Loan on the last day of the then current
Interest Period with respect thereto;
(D) any Interest Period relating to any Eurodollar Rate Loan that
begins on the last Eurodollar Business Day of a calendar month (or on a day for
which there is no
-10-
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Eurodollar Business Day of a calendar month; and
(E) any Interest Period relating to any Eurodollar Rate Loan that
would otherwise extend beyond the Revolving Credit Loan Maturity Date shall end
on the Revolving Credit Loan Maturity Date.
Investments. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (a) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (b) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(c) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (d) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (b) may be
deducted when paid; and (e) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
Letter of Credit. See (S)4.1(a).
Letter of Credit Application. See (S)4.1(a).
Letter of Credit Participation. See (S)4.1(d).
Leverage Ratio. With respect to any fiscal quarter of the Borrower,
the ratio of the Consolidated Total Liabilities of the Borrower to the
Consolidated Tangible Net Worth of the Borrower for such fiscal quarter.
Loan Documents. This Credit Agreement, the Notes, the Letter of
Credit Applications, the Letters of Credit, the Security Agreement, the Cash
Management Agreements, and any other agreement, document or instrument executed
in connection with any of the foregoing.
Loan Request. See (S)2.6.
Majority Banks. As of any date, the Banks holding at least fifty-six
percent (56%) of the outstanding principal amount of the Revolving Credit Notes
on such date; and if no such principal is outstanding, the Banks whose aggregate
Commitments constitutes at least fifty-six percent (56%) of the Total
Commitment.
-11-
Materially Adverse Effect: A materially adverse effect on the
financial condition or business operations of the Borrower and its Subsidiaries
taken as a whole which materially impairs the ability of the Borrower and its
Subsidiaries to substantially perform their respective obligations hereunder or
under any of the other Loan Documents.
Maximum Drawing Amount. The maximum aggregate amount from time to
time that the beneficiaries may draw under outstanding Letters of Credit, as
such aggregate amount may be reduced from time to time pursuant to the terms of
the Letters of Credit.
Multiemployer Plan. Any multiemployer plan within the meaning of
(S)3(37) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate.
Obligations. All indebtedness, obligations and liabilities of any of
the Borrower and its Subsidiaries to any of the Banks and the Agent,
individually or collectively, existing on the date of this Credit Agreement or
arising thereafter, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise, arising or
incurred under this Credit Agreement or under any of the other Loan Documents or
in respect of any of the Revolving Credit Loans made or Reimbursement
Obligations incurred or any of the Notes, Letter of Credit Application, Letter
of Credit or other instruments at any time evidencing any thereof.
Outstanding. With respect to the Revolving Credit Loans, the
aggregate unpaid principal thereof as of any date of determination.
PBGC. The Pension Benefit Guaranty Corporation created by (S)4002 of
ERISA and any successor entity or entities having similar responsibilities.
Perfection Certificates. The Perfection Certificates as defined in
the Security Agreements.
Permitted Liens. Liens, security interests and other encumbrances
permitted by (S)9.2.
Person. Any individual, corporation, partnership, trust,
unincorporated association, business, or other legal entity, and any government
or any governmental agency or political subdivision thereof.
Real Estate. All real property at any time owned or leased by the
Borrower or any of its Subsidiaries.
Reference Bank. BKBCT.
Reimbursement Obligation. The Borrower's obligation to reimburse the
Agent and the Banks on account of any drawing under any Letter of Credit as
provided in (S)4.2.
-12-
Revolving Credit Loan Maturity Date. December 31, 1998.
Revolving Credit Loans. Revolving credit loans made or to be made by
the Banks to the Borrower pursuant to (S)2.
Revolving Credit Note Record. The grid attached to a Revolving Credit
Note, or the continuation of such grid, or any other similar record, including
computer records, maintained by any Bank with respect to any Revolving Credit
Loan referred to in such Revolving Credit Note.
Revolving Credit Notes. See (S)2.4.
Security Agreement. The Security Agreement, dated or to be dated on
or prior to the Closing Date, between the Borrower and its Subsidiaries and the
Agent and in form and substance satisfactory to the Banks and the Agent.
Settlement. The making of, or receiving of payments in immediately
available funds, by the Banks to or from the Agent in accordance with (S)2.9(b)
hereof to the extent necessary to cause each Bank's actual share of the
aggregate outstanding principal amount of the Revolving Credit Loans to be equal
to such Bank's Commitment Percentage of such aggregate outstanding principal
amount of the Revolving Credit Loans, in any case when, prior to such event or
action, the actual share is not so equal.
Subsidiary. Any corporation, association, trust, or other business
entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by number
of votes) of the outstanding Voting Stock.
Total Commitment. The sum of the Commitments of the Banks, as in
effect from time to time.
Type. As to any Revolving Credit Loan, its nature as a Base Rate Loan
or a Eurodollar Rate Loan.
Uniform Customs. With respect to any Letter of Credit, the Uniform
Customs and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500 or any successor version thereto adopted
by the Agent in the ordinary course of its business as a letter of credit issuer
and in effect at the time of issuance of such Letter of Credit.
Unpaid Reimbursement Obligation. Any Reimbursement Obligation for
which the Borrower does not reimburse the Agent and the Banks on the date
specified in, and in accordance with, (S)4.2.
-13-
Voting Stock. Stock or similar interests, of any class or classes
(however designated), the holders of which are at the time entitled, as such
holders, to vote for the election of a majority of the directors (or persons
performing similar functions) of the corporation, association, trust or other
business entity involved, whether or not the right so to vote exists by reason
of the happening of a contingency.
-14-
Rules of Interpretation.
(a) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to time in
accordance with its terms and the terms of this Credit Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification
to such law.
(d) A reference to any Person includes its permitted successors
and permitted assigns.
(e) Accounting terms not otherwise defined herein have the meanings
assigned to them by generally accepted accounting principles applied on a
consistent basis by the accounting entity to which they refer.
(f) The words "include", "includes" and "including" are not
limiting.
(g) All terms not specifically defined herein or by generally accepted
accounting principles, which terms are defined in the Uniform Commercial Code as
in effect in the STATE OF CONNECTICUT, have the meanings assigned to them
therein.
(h) Reference to a particular "(S)" refers to that section of this
Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of like import
shall refer to this Credit Agreement as a whole and not to any particular
section or subdivision of this Credit Agreement.
SCHEDULE 7.7
------------
LITIGATION
----------
1. Xxxxxx X. Xxxxxxx and Xxxx Xxxxxxx vs. Xxxxx MedicalCorp., Xxxx X. Xxxx,
Xxxxxx Xxxxxx, Xxxxxx X. Rome, Xxxxx Xxxxxx, Xxxxxx X. Xxxxxx, Xxxxxxx X.
Xxxxx, Xxxxxx X. Xxxxxx, Xx., Xxxx X. Xxxx, Xxxx X. Xxxxxx, and Xxxxx X.
Xxxxx, United States District Court for the Xxxxxxxx Xxxxxxxx xx Xxx Xxxx,
00 Xxx. 0000 (XXX), consolidated action.
SCHEDULE 7.15
-------------
CERTAIN TRANSACTIONS
--------------------
Xxxxxx Xxxxxx, a director of Xxxxx Medical, is President of Xxxxxxxx Xxxxxxxx &
Co. Incorporated, an investment banking firm. From time-to-time Xxxxx Medical
Corp. uses investment banking services of Xxxxxxxx Xxxxxxxx & Co. Incorporated.
SCHEDULE 9.1
------------
PERMITTED INDEBTEDNESS
----------------------
1. Xxxxx Medical Corp. guarantee of a $30,000 loan from Farmers and Mechanics
Bank to Connecticut DataLink Network, Inc. dated December 4, 1995.
SCHEDULE 9.2
------------
PERMITTED LIENS
---------------
None.
SCHEDULE 1
-------- -
TO
--
REVOLVING CREDIT AGREEMENT
--------- ------ ---------
========================================================
BANK COMMITMENT COMMITMENT
---- ---------- ----------
PERCENTAGE
----------
--------------------------------------------------------
Bank of Boston Connecticut 100% $45,000,000
00 Xxxx Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxxx Xxxxxx,
Vice President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
--------------------------------------------------------
TOTAL COMMITMENT $45,000,000
========================================================
SCHEDULE 1
----------
Collateral Locations
--------------------
1. 000 Xxxx Xxxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxxx 00000
2. 0000-0 Xxxxxxxx Xxxxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxxxxx Xxxx
Jacksonville, Florida
3. 0000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
4. 101 Corporate Center of Dupage
20W345-101st Street-Unit A
Xxxxxx, Xxxxxxxx 00000
REVOLVING CREDIT NOTE
---------------------
XXXXX MEDICAL CORP.
$45,000,000 Dated as of January 9, 1996
FOR VALUE RECEIVED, the undersigned, XXXXX MEDICAL CORP., a Delaware
corporation (hereinafter, together with its successors in title and assigns,
called the "Borrower"), promises to pay on or before the Revolving Credit Loan
Maturity Date (as hereinafter defined by reference) to the order of Bank of
Boston Connecticut (hereinafter, together with its successors in title and
assigns, called the "Lender"), at the head office of Bank of Boston Connecticut
(the "Agent") at 00 Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000, the principal sum
of FORTY FIVE MILLION AND 00/100 DOLLARS ($45,000,000) in immediately available
funds or, if less, the aggregate unpaid principal amount of the Revolving Credit
Loans made by the Lender to the Borrower pursuant to the Credit Agreement to
which reference is hereinafter made and to pay interest, in like money, on the
unpaid principal amount owing hereunder from time to time from the date hereof
until payment in full of such principal amount as provided in the Credit
Agreement.
This Note is made and delivered by the Borrower pursuant to (S)2.4 of the
Revolving Credit Agreement dated as of January 9, 1996 by and among the
Borrower, Bank of Boston Connecticut and the other lenders which are or may
become parties to the Credit Agreement and the Agent (as amended and in effect
from time to time, the "Credit Agreement"), and is entitled to the benefits and
is subject to the provisions of the Credit Agreement. All capitalized terms
used herein which are defined in the Credit Agreement shall have the same
meanings herein as therein.
The Borrower also promises to pay interest on the unpaid principal amount
of the Revolving Credit Loans outstanding until paid in full at the rates per
annum set forth in or established pursuant to the Credit Agreement. Such
interest shall be payable on such dates as are determined from time to time
pursuant to the Credit Agreement and shall be calculated as therein provided.
Payments of both principal and interest are to be made in lawful money of the
United States of America in same day or immediately available funds to the
account designated by the Agent pursuant to the Credit Agreement.
The Borrower has the right in certain circumstances to prepay the
principal of this Note on the terms and conditions specified in the Credit
Agreement.
If any Event of Default shall occur, the entire unpaid principal amount
of this Note and all of the unpaid interest accrued thereon may become or be
declared due and payable in the manner and with the effect provided in the
Credit Agreement.
The Borrower and all guarantors and endorsers hereby waive presentment,
demand, protest and notice of any kind in connection with the delivery,
acceptance, performance and enforcement of this Note, and also hereby assent to
extensions of time of payment or forbearance or other indulgences without
notice.
-2-
This Note and the obligations of the Borrower hereunder shall be governed
by, and interpreted and determined in accordance with, the laws of the State of
Connecticut.
THE BORROWER HEREBY REPRESENTS, COVENANTS AND AGREES THAT THE PROCEEDS OF
THE REVOLVING CREDIT LOANS SHALL BE USED FOR GENERAL COMMERCIAL PURPOSES AND
THAT THIS NOTE IS PART OF A "COMMERCIAL TRANSACTION" AS DEFINED BY THE STATUTES
OF THE STATE OF CONNECTICUT. THE BORROWER HEREBY WAIVES ALL RIGHTS TO NOTICE
AND PRIOR COURT HEARING OR COURT ORDER UNDER CONNECTICUT GENERAL STATUES
SECTIONS 52-278A ET SEQ. AS AMENDED OR UNDER ANY OTHER STATE OR FEDERAL LAW WITH
RESPECT TO ANY AND ALL PREJUDGMENT REMEDIES THE LENDER MAY EMPLOY TO ENFORCE ITS
RIGHTS AND REMEDIES HEREUNDER. MORE SPECIFICALLY, THE BORROWER ACKNOWLEDGES
THAT LENDER'S ATTORNEY MAY, PURSUANT TO CONNECTICUT GENERAL STATUES, SECTION
52-278F, ISSUE A WRIT FOR A PREJUDGMENT REMEDY WITHOUT SECURING A COURT ORDER.
THE BORROWER ACKNOWLEDGES AND RESERVES ITS RIGHT TO NOTICE AND A HEARING
SUBSEQUENT TO THE ISSUANCE OF A WRIT FOR PREJUDGMENT REMEDY BY LENDER'S
ATTORNEY. THE LENDER ACKNOWLEDGES THE BORROWER'S RIGHT TO SAID HEARING
SUBSEQUENT TO THE ISSUANCE OF SAID WRIT.
IN WITNESS WHEREOF, the Borrower has caused this Note to be signed in its
partnership name by its duly authorized partner on the day and in the year first
above written.
XXXXX MEDICAL CORP.
By:_______________________________
Name:
Title:
Address: 000 Xxxx Xxxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxxx 00000
