Citizens Bank
Citizens Bank of Massachusetts
Exchange Place, 00 Xxxxx Xxxxxx Xxxxxxxx
Xxxxxx, XX 00000
January 23, 2002
Turbotec Products, Inc.
000 Xxx Xxxx Xxxx
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxxx, President
Gentlemen:
Reference is made to our Amended and Restated Loan and Security Agreement
(Accounts Receivable and Inventory) dated October 31, 1994, together with all
amendments and additions thereto (hereinafter called the "Agreement").
Notwithstanding the provisions of the Agreement, it is agreed, effective as of
November 1, 2000, that the Agreement shall be amended as follows:
1. Section 5.A of the Agreement is hereby stricken in its entirety and the
following new Section 5.A substituted therefor:
"A. Subject to the terms and provisions of this Agreement, the Bank
hereby establishes a discretionary revolving line of credit in Borrower's
favor in the amount set forth below, as determined by Bank from time to
time hereafter. Bank may make such loans to Borrower, based upon such
facts and circumstances existing at the time of the request, as from time
to time Bank elects to make which are secured by Borrower's Inventory,
Accounts and all other Collateral and the proceeds thereof. Without
limiting the discretionary nature of Bank's obligation to make loans
hereunder, or the demand feature of any loans that Bank does make
hereunder, Borrower agrees that the aggregate unpaid principal of all
loans outstanding at any one time shall not exceed the Borrowing Base. The
term "Borrowing Base" as used herein shall mean the sum of the following:
(a) up to eighty (80%) percent of the unpaid face amount of
Qualified Accounts (as defined below) or such other percentage thereof as
may from time to time be fixed by the Bank upon notice to Borrower, PLUS
(b) the lesser of (i) $1,200,000.00, or (ii) up to (A) fifty (50%)
percent of the cost or market value, whichever is lower, of all Eligible
Inventory (as defined below) consisting of raw materials and twisted
tubes, plus (B) the lesser of (1) $350,000.00, or (2) fifty (50%) percent
of the cost or market value, whichever is lower, of all Eligible Inventory
consisting of finished goods, MINUS
(c) one hundred (100%) percent of the aggregate amount then undrawn
on all letters of credit and acceptances issued by the Bank for the
account of the Borrower;
but in no event shall the sum of all direct loans plus the sum of the
aggregate amount undrawn on all letters of credit and acceptances be in
excess of $2,400,000.00 (the "Credit Limit") or such other sum as may from
time to time be fixed by the Bank upon notice to Borrower. All such loans
shall bear interest and at the option of Bank shall be evidenced by demand
notes in form satisfactory to Bank, but in the absence of notes shall be
conclusively evidenced by the Bank's record of disbursements and
repayments and shall be payable ON DEMAND.
(d) All loans made by Bank pursuant to this Section 5 shall bear
interest and, at the option of Bank, shall be evidenced by and repayable
in accordance with a revolving demand note drawn to the order of Bank
substantially the form of Exhibit 1 hereto (the "Note"), as the same may
hereafter be amended, supplemented or restated from time to time and any
note or notes issued in substitution therefor, but in the absence of the
Note shall be conclusively evidenced by Bank's records of loans and
repayments and shall be payable on demand.
Interest, net of those loans (if any) which bear interest calculated
by reference to the LIBOR Rate (as defined below), will be charged to
Borrower at a fluctuating rate which is the daily equivalent to a rate
equal to the Prime Rate, or at such other rate agreed on from time to time
by the parties, upon any balance owing to Bank at the close of each day
and shall be payable on the first day of each month in arrears until the
Bank makes demand. The rate of interest payable by Borrower shall be
changed effective as of that date in which a change in the Prime Rate
becomes effective. Interest shall be computed on the basis of the actual
number of days elapsed over a year of three hundred sixty (360) days. The
term "Prime Rate" as used herein and in any supplement and amendment
hereto shall mean the per annum rate of interest announced from time to
time by Bank at its offices in Boston, Massachusetts, as its Prime Rate
(or if Bank ceases to announce a rate so designated, any similar successor
rate designated by Bank), it being understood that such rate is a
reference rate and not necessarily the lowest rate of interest charged by
Bank. Interest shall be payable in lawful money of the United States of
America to Bank, or as Bank shall direct, without set-off, deduction or
counterclaim monthly, in arrears, on the first day of each month,
commencing on the first day of the month next succeeding the date hereof.
Interest, net of those loans (if any) which bear interest calculated by
reference to the Prime Rate, will be charged to Borrower at a rate which
is the equivalent to the LIBOR Lending Rate (as defined below) plus the
Applicable Margin (as defined below).
(e) As used in this Agreement, the following terms shall have the
following meanings:
"Applicable Margin" shall mean three (3.0%) percent per annum (i.e.,
300 basis points).
"Borrowing Date" shall mean any day upon which a LIBOR Rate Loan is
made.
"Business Day" shall mean:
(i) any day which is neither a Saturday or Sunday nor a legal
holiday on which commercial banks are authorized or required to be
closed in Boston, Massachusetts;
(ii) when such term is used to describe a day on which a
borrowing, payment, prepayment, or repayment is to be made in
respect of any LIBOR Rate Loan, any day which is: (A) neither a
Saturday or Sunday nor a legal holiday on which commercial banks are
authorized or required to be closed in New York City; and (B) a
London Banking Day; and
(iii) when such term is used to describe a day on which an
interest rate determination is to be made in respect of any LIBOR
Rate Loan, any day which is a London Banking Day.
"Dollars" or "$" shall mean currency of the United States of
America.
"Eurodollars" shall mean Dollars acquired by Bank through the
purchase or other acquisition of deposits denominated in Dollars and
made with any bank or branch of a bank (including any branch of the
Bank) located outside the United States of America.
"Hedging Contracts" shall mean interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements, or
any other agreements or arrangements entered into between Borrower
and Bank designed to protect the Borrower against fluctuations in
interest rates or currency exchange rates.
"Hedging Obligations" means, with respect to Borrower, all
liabilities of Borrower to Bank under Hedging Contracts.
"Interbank Market" shall mean, with respect to any LIBOR Rate Loan,
any recognized interbank Eurodollar market chosen in good faith by
Bank.
"Interest Payment Date" shall mean, relative to any LIBOR Rate Loan,
having an Interest Period of three months or less, the last Business
Day of such Interest Period, and as to any LIBOR Rate Loan having an
Interest Period longer than three months, each Business Day which is
three months, or a whole multiple thereof, after the first day of
such Interest Period and the last day of such Interest Period.
"Interest Period" shall mean, relative to any LIBOR Rate Loans:
(i) initially, the period beginning on (and including) the
date on which such LIBOR Rate Loan is made or continued as, or
converted into, a LIBOR Rate Loan pursuant to this Agreement and
ending on (but excluding) the day which numerically corresponds to
such date one, two, or three months thereafter (or, if such month
has no numerically corresponding day, on the last Business Day of
such month), in each case as the Borrower may select in its notice
pursuant to this Agreement; and
(ii) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such LIBOR Rate Loan
and ending one, two or three months thereafter, as selected by the
Borrower by irrevocable notice to the Bank not less than two
Business Days prior to the last day of the then current Interest
Period with respect thereto;
provided, however, that
(i) the Borrower shall not be permitted to select Interest
Periods to be in effect at any one time which have expiration dates
occurring on more than five (5) different dates;
(ii) Interest Periods commencing on the same date for LIBOR
Rate Loans comprising part of the same advance under this Agreement
shall be of the same duration;
(iii) Interest Periods for LIBOR Rate Loans in connection with
which Borrower has or may incur Hedging Obligations with the Bank
shall be of the same duration as the relevant periods set under the
applicable Hedging Contracts;
(iv) if such Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the
next following Business Day unless such day falls in the next
calendar month, in which case such Interest Period shall end on the
first preceding Business Day; and
(v) no Interest Period may end later than the termination date
of this Agreement.
"LIBOR Lending Rate" shall mean, relative to any LIBOR Rate Loan to
be made, continued or maintained as, or converted into, a LIBOR Rate
Loan for any Interest Period, a rate per annum determined pursuant
to the following formula:
LIBOR Lending Rate = LIBOR Rate
-----------------------------------
(1.00 - LIBOR Reserve Percentage)
"LIBOR Rate" shall mean, relative to any Interest Period for LIBOR
Rate Loans, the offered rate for deposits of U.S. Dollars in an
amount approximately equal to the amount of the requested LIBOR Rate
Loan for a term coextensive with the designated Interest Period
which the British Bankers' Association fixes as its LIBOR rate and
which appears on the Telerate Page 3750 as of 11:00 a.m. London time
on the day which is two London Banking Days (as defined below) prior
to the beginning of such Interest Period.
"LIBOR Rate Loan" shall mean, any loan or advance the rate of
interest applicable to which is based upon the LIBOR Rate.
"LIBOR Reserve Percentage" shall mean, relative to any day of any
Interest Period for LIBOR Rate Loans, the maximum aggregate (without
duplication) of the rates (expressed as a decimal fraction) of
reserve requirements (including all basic, emergency, supplemental,
marginal and other reserves and taking into account any transitional
adjustments or other scheduled changes in reserve requirements)
under any regulations of the Board of Governors of the Federal
Reserve System (the "Board") or other governmental authority having
jurisdiction with respect thereto as issued from time to time and
then applicable to assets or liabilities consisting of "Eurocurrency
Liabilities", as currently defined in Regulation D of the Board,
having a term approximately equal or comparable to such Interest
Period.
"London Banking Day" shall mean a day on which dealings in US dollar
deposits are transacted in the London Interbank Market.
"Maturity Date" shall mean the date on which an Interest Period
expires.
"Prime Rate Loan(s)" shall mean, when used in the singular, any
loans on which the interest rate is calculated by reference to the
Prime Rate and, when used in the plural, shall mean all such loans.
(e) Bank shall not be required to make a LIBOR Rate Loan, or convert
a Prime Rate Loan into a LIBOR Rate Loan, unless Bank shall have received
from the Borrower a request for such LIBOR Rate Loan, in the form of
Exhibit 2 annexed hereto (herein a "Notice of Borrowing"). By delivering a
borrowing request (i.e., Notice of Borrowing) to the Bank on or before
10:00 a.m., New York time, on a Business Day, the Borrower may from time
to time irrevocably request, on not less than two nor more than five
Business Days' notice, that a LIBOR Rate Loan be made in a minimum amount
of Five Hundred Thousand ($500,000.00) Dollars and integral multiples of
One Hundred Thousand ($100,000.00) Dollars. On the terms and subject to
the conditions of this Agreement, each LIBOR Rate Loan shall be made
available to the Borrower no later than 11:00 a.m. New York time on the
first day of the applicable Interest Period by deposit to the account of
the Borrower as shall have been specified in its borrowing request.
(f) After receipt from the Borrower of any Notice of Borrowing which
requests a LIBOR Rate Loan, Bank shall determine if it is able to make
such LIBOR Rate Loan (or if it is unable to do so for reasons described in
this section only) and will notify the Borrower upon confirmation of its
ability to do so. If Bank determines in good faith that, by reason of
circumstances affecting the Interbank Market, adequate and reasonable
methods do not exist for ascertaining the LIBOR Rate which would otherwise
be applicable to such LIBOR Rate Loan, then Bank shall so notify the
Borrower on or before 4:00 p.m. on the Business Day prior to the Borrowing
Date specified in
the Notice of Borrowing, and in such event, Bank shall not be obligated to
make such LIBOR Rate Loan and the Notice of Borrowing shall be deemed to
have been withdrawn by the Borrower with Bank's consent and substituted
with a request for a Prime Rate Loan in an amount equal to the requested
LIBOR Rate Loan.
(g) By delivering a continuation/conversion notice to the Bank on or
before 10:00 a.m., New York time, on a Business Day, the Borrower may from
time to time irrevocably elect, on not less than two nor more than five
Business Days' notice, that all, or any portion in an aggregate minimum
amount of Five Hundred Thousand ($500,000.00) Dollars and integral
multiples of One Hundred Thousand ($100,000.00) of any LIBOR Rate Loan be
converted on the last day of an Interest Period into a LIBOR Rate Loan
with a different Interest Period, or continued on the last day of an
Interest Period as a LIBOR Rate Loan with a similar Interest Period,
provided, however, that no portion of the outstanding principal amount of
any LIBOR Rate Loans may be converted to, or continued as, LIBOR Rate
Loans when any default or Event of Default has occurred and is continuing,
and no portion of the outstanding principal amount of any LIBOR Rate Loans
may be converted to, LIBOR Rate Loans of a different duration if such
LIBOR Rate Loans relate to any Hedging Obligations. In the absence of
delivery of a continuation/conversion notice with respect to any LIBOR
Rate Loan at least two Business Days before the last day of the then
current Interest Period with respect thereto, such LIBOR Rate Loan shall,
on such last day, automatically convert to a loan that accrues interest by
reference to the Prime Rate.
(h) Except as otherwise provided herein, any Notice of Borrowing
which requests a LIBOR Rate Loan shall be irrevocable and binding upon the
Borrower. In the event the Borrower fails to borrow the LIBOR Rate Loan
requested on the Borrowing Date specified in such Notice of Borrowing, the
Borrower shall indemnify Bank against any and all losses and expenses
incurred by Bank by reason of such failure including, without limiting the
generality of the foregoing, all losses and expenses incurred by reason of
the liquidation, disposition or reemployment of deposits or other funds
acquired by Bank to fund such LIBOR Rate Loan.
(i) Interest on the outstanding principal amount of each LIBOR Rate
Loan shall accrue during the Interest Period applicable thereto at a rate
equal to the sum of the LIBOR Lending Rate for such Interest Period plus
the Applicable Margin thereto and be payable on each Interest Payment
Date.
(j) LIBOR Rate Loans shall mature and become payable in full on the
last day of the Interest Period relating to such LIBOR Rate Loan. Upon
maturity, a LIBOR Rate Loan may be continued for an additional Interest
Period or may be converted to a Prime Rate Loan, as set forth above.
(k) LIBOR Rate Loans may be prepaid on the terms and conditions set
forth herein. For LIBOR Rate Loans in connection with which the Borrower
has or may incur Hedging Obligations, additional obligations may be
associated with prepayment in accordance with the terms and conditions of
the applicable Hedging Contracts. The Borrower shall give the Bank, no
later than 10:00 a.m., New York City time, at least four (4) Business Days
notice of any proposed prepayment of any LIBOR Rate Loans, specifying the
proposed date of payment of such LIBOR Rate Loans, and the principal
amount to be paid. Each partial prepayment of the principal amount of
LIBOR Rate Loans shall be in an integral multiple of Five Hundred Thousand
($500,000.00) Dollars and accompanied by the payment of all charges
outstanding on such LIBOR Rate Loans and of all accrued interest on the
principal repaid to the date of payment. Borrower acknowledges that
prepayment or acceleration of a LIBOR Rate Loan during an Interest Period
shall result in the Bank incurring additional costs, expenses and/or
liabilities and that it is extremely difficult and impractical to
ascertain the extent of such costs, expenses and/or liabilities.
Therefore, all full or partial prepayments of LIBOR Rate Loans shall be
accompanied by, and the Borrower hereby promises to pay, on each date a
LIBOR Rate Loan is prepaid or the date all sums payable
hereunder become due and payable, by acceleration or otherwise, in
addition to all other sums then owing, an amount ("LIBOR Rate Loan
Prepayment Fee") determined by the Bank pursuant to the following formula:
(i) the then current rate for United States Treasury securities
(bills on a discounted basis shall be converted to a bond
equivalent) with a maturity date closest to the end of the
Interest Period as to which prepayment is made, subtracted
from
(ii) the LIBOR Lending Rate plus the Applicable Margin applicable
to the LIBOR Rate Loan being prepaid.
If the result of this calculation is zero or a negative number, then there
shall be no LIBOR Rate Loan Prepayment Fee. If the result of this
calculation is a positive number, then the resulting percentage shall be
multiplied by:
(iii) the amount of the LIBOR Rate Loan being prepaid.
The resulting amount shall be divided by:
(iv) 360
and multiplied by:
(v) the number of days remaining in the Interest Period as to
which the prepayment is being made.
Said amount shall be reduced to present value calculated by using the
referenced United States Treasury securities rate and the number of days
remaining on the Interest Period for the LIBOR Rate Loan being prepaid.
The resulting amount of these calculations shall be the LIBOR Rate Loan
Prepayment Fee.
(l) If the Bank shall determine (which determination shall, upon
notice thereof to the Borrower be conclusive and binding on the Borrower)
that the introduction of or any change in or in the interpretation of any
law, rule, regulation or guideline (whether or not having the force of
law), makes it unlawful, or any central bank or other governmental
authority asserts that it is unlawful, for the Bank to make, continue or
maintain any LIBOR Rate Loan as, or to convert any loan into, a LIBOR Rate
Loan of a certain duration, the obligations of the Bank to make, continue,
maintain or convert into any such LIBOR Rate Loans shall, upon such
determination, forthwith be suspended until the Bank shall notify the
Borrower that the circumstances causing such suspension no longer exist,
and all LIBOR Rate Loans of such type shall automatically convert into
Prime Rate Loans at the end of the then current Interest Periods with
respect thereto or sooner, if required by such law or assertion.
(m) If, due to payments made by the Borrower pursuant to this
Agreement or due to the acceleration of the Obligations or due to any
other reason, Bank receives payments of principal of any LIBOR Rate Loan
prior to the Maturity Date for such LIBOR Rate Loan, the Borrower shall,
upon demand by Bank, pay to Bank any amounts required to compensate Bank
for any additional losses, costs or expenses which it may reasonably incur
as a result of such payment, including, without limitation, any loss,
costs or expenses incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by Bank to fund or maintain such LIBOR
Rate Loans.
(n) If the Bank shall have determined that
(i) US dollar deposits in the relevant amount and for the relevant
Interest Period are not available to the Bank in the London
Interbank Market;
(ii) by reason of circumstances affecting the Bank in the London
Interbank Market, adequate means do not exist for ascertaining
the LIBOR Rate applicable hereunder to LIBOR Rate Loans of any
duration, or
(iii) the LIBOR Rate no longer adequately reflects the Bank=s cost
of funding loans.
Then, upon notice from the Bank to the Borrower, the obligations of the
Bank to make or continue any loans as, or to convert any loans into, LIBOR
Rate Loans of such duration shall forthwith be suspended until the Bank
shall notify the Borrower that the circumstances causing such suspension
no longer exist.
(o) In addition to the LIBOR Rate Loan Prepayment Fee, the Borrower
agrees to reimburse the Bank (without duplication) for any increase in the
cost to the Bank, or reduction in the amount of any sum receivable by the
Bank, in respect, or as a result of:
(i) any conversion or repayment or prepayment of the principal
amount of any LIBOR Rate Loans on a date other than the
scheduled last day of the Interest Period applicable thereto;
(ii) any loans not being made as LIBOR Rate Loans in accordance
with the borrowing request thereof;
(iii) any LIBOR Rate Loans not being continued as, or converted
into, LIBOR Rate Loans in accordance with the
continuation/conversion notice thereof, or
(iv) any costs associated with marking to market any Hedging
Obligations that (in the reasonable determination of the Bank)
are required to be terminated as a result of any conversion,
repayment or prepayment of the principal amount of any LIBOR
Rate Loan on a date other than the scheduled last day of the
Interest Period applicable thereto;
The Bank shall promptly notify the Borrower in writing of the occurrence
of any such event, such notice to state, in reasonable detail, the reasons
therefor and the additional amount required fully to compensate the Bank
for such increased cost or reduced amount. Such additional amounts shall
be payable by the Borrower to the Bank within five days of its receipt of
such notice, and such notice shall, in the absence of manifest error, be
conclusive and binding on the Borrower. The Borrower understands, agrees
and acknowledges the following: (a) the Bank does not have any obligation
to purchase, sell and/or match funds in connection with the use of LIBOR
Rate as a basis for calculating the rate of interest on a LIBOR Rate Loan,
(b) the LIBOR Rate may be used merely as a reference in determining such
rate, and (c) the Borrower has accepted the LIBOR Rate as a reasonable and
fair basis for calculating such rate, the LIBOR Rate Prepayment Fee, and
other funding losses incurred by the Bank. Borrower further agrees to pay
the LIBOR Rate Prepayment Fee and other funding losses, if any, whether or
not the Bank elects to purchase, sell and/or match funds.
(p) If on or after the date hereof the adoption of any applicable
law, rule or regulation or guideline (whether or not having the force of
law), or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration
thereof, or compliance by the Bank with any request or directive (whether
or not having the force of law) of any such authority, central bank or
comparable agency:
(i) shall subject the Bank to any tax, duty or other charge with
respect to its LIBOR Rate Loans or its obligation to make
LIBOR Rate Loans, or shall change the basis of taxation of
payments to the Bank of the principal of or interest on its
LIBOR Rate Loans or any other amounts due under this Agreement
in respect of its LIBOR Rate Loans or its obligation to make
LIBOR Rate Loans (except for the introduction of, or change in
the rate of, tax on the overall net income of the Bank or
franchise taxes, imposed by the jurisdiction (or any political
subdivision or taxing authority thereof) under the laws of
which the Bank is organized or in which the Bank's principal
executive office is located); or
(ii) shall impose, modify or deem applicable any reserve, special
deposit or similar requirement (including, without limitation,
any such requirement imposed by the Board of Governors of the
Federal Reserve System of the United States) against assets
of, deposits with or for the account of, or credit extended
by, the Bank or shall impose on the Bank or on the London
Interbank Market any other condition affecting its LIBOR Rate
Loans or its obligation to make LIBOR Rate Loans;
and the result of any of the foregoing is to increase the cost to the Bank
of making or maintaining any LIBOR Rate Loan, or to reduce the amount of
any sum received or receivable by the Bank under this Agreement with
respect thereto, by an amount deemed by the Bank to be material, then,
within fifteen (15) days after demand by the Bank, the Borrower shall pay
to the Bank such additional amount or amounts as will compensate the Bank
for such increased cost or reduction.
(q) All payments by the Borrower of principal of, and interest on,
the LIBOR Rate Loans and all other amounts payable hereunder shall be made
free and clear of and without deduction for any present or future income,
excise, stamp or franchise taxes and other taxes, fees, duties,
withholdings or other charges of any nature whatsoever imposed by any
taxing authority, but excluding franchise taxes and taxes imposed on or
measured by the Bank's net income or receipts (such non-excluded items
being called "Taxes"). In the event that any withholding or deduction from
any payment to be made by the Borrower hereunder is required in respect of
any Taxes pursuant to any applicable law, rule or regulation, then the
Borrower will
(i) pay directly to the relevant authority the full amount
required to be so withheld or deducted;
(ii) promptly forward to the Bank an official receipt or other
documentation satisfactory to the Bank evidencing such payment
to such authority; and
(iii) pay to the Bank such additional amount or amounts as is
necessary to ensure that the net amount actually received by
the Bank will equal the full amount the Bank would have
received had no such withholding or deduction been required.
Moreover, if any Taxes are directly asserted against the Bank with respect
to any payment received by the Bank hereunder, the Bank may pay such Taxes
and the Borrower will promptly pay such additional amount (including any
penalties, interest or expenses) as is necessary in order that the net
amount received by the Bank after the payment of such Taxes (including any
Taxes on such additional amount) shall equal the amount the Bank would
have received had not such Taxes been asserted.
If the Borrower fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to the Bank the required receipts or other
required documentary evidence, the Borrower shall indemnify the Bank for
any incremental Taxes, interest or penalties that may become payable by
the Bank as a result of any such failure.
(r) Notwithstanding anything to the contrary contained herein, Bank
and Borrower agree that after the occurrence of an Event of Default which
is continuing, Borrower shall not request and Bank will not make LIBOR
Rate Loan."
2. Section 12(d) of the Agreement is hereby stricken in its entirety and
the following new Section 12(d) substituted therefor:
"(d) On the second business day of each week, Borrower shall furnish to
Bank a certificate describing all of Borrower's Inventory by value based
on the lower of cost or market value, listing all Inventory by nature,
quantity and location, together with such other information as Bank may
require."
3. The following new Section 14(k) is hereby added to the Agreement:
"(k) (Minimum Debt Service Coverage Ratio) permit, on a consolidated
basis with Thermodynetics, Inc., its cash flow for the twelve (12) month
period ending on the last day of each fiscal year of Borrower to be less
than (i) one hundred (100%) percent of its debt service for the twelve
(12) month period ending March 31, 2002 and (ii) one hundred fifteen
(115%) percent of its debt service for the twelve (12) month period ending
March 31, 2003 and thereafter."
4. The following new definitions are hereby added to Section 14 of the
Agreement:
"'cash flow' shall mean the sum of earnings before interest and taxes,
plus depreciation and amortization, minus cash taxes paid in the
applicable period, minus permitted dividends, minus $200,000.00 in
maintenance capital expenditures; "debt service" shall mean the sum of
current maturities of all long term debt plus all interest expense."
Kindly note that the alterations contained herein do not in any way alter,
release or change any other sections contained in the Agreement.
Please acknowledge your agreement to the foregoing by signing the enclosed
copy of this letter and returning the same to the undersigned.
Very truly yours,
CITIZENS BANK OF MASSACHUSETTS
(Successor to USTrust)
By: /s/ Xxxxx X. Xxxxxx, Xx.
------------------------------------
Xxxxx X. Xxxxxx, Xx., Vice President
UNDERSTOOD AND AGREED TO:
TURBOTEC PRODUCTS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------------
Xxxxxx X. Xxxxxxxxx, President
EXHIBIT 1 (of Exhibit 10 (iii)
CITIZENS BANK OF MASSACHUSETTS
REVOLVING DEMAND NOTE
$2,400,000.00 Boston, Massachusetts
January ___, 2002
For value received, the undersigned, Turbotec Products, Inc., a
Massachusetts corporation (the "Borrower"), hereby promises to pay ON DEMAND,
and if demand is not sooner made, then as provided in the Loan Agreement
(defined below), to the order of Citizens Bank of Massachusetts, a Massachusetts
bank (the "Bank"), at its main office in Boston, Massachusetts, or at any other
place designated at any time by the holder hereof, in lawful money of the United
States of America and in immediately available funds, the principal sum of Two
Million Four Hundred Thousand ($2,400,000.00) Dollars or, if less, the aggregate
unpaid principal amount of all loans made by the Bank to the Borrower under the
Loan Agreement, together with interest on the principal amount hereunder
remaining unpaid from time to time, computed on the basis of the actual number
of days elapsed and a 360-day year, from the date hereof until this Note is
fully paid at the rate(s) from time to time in effect under the Amended and
Restated Loan and Security Agreement (Accounts Receivable and Inventory) dated
October 31, 1994, as amended (the "Loan Agreement") by and between the Bank and
the Borrower. The principal hereof and interest accruing thereon shall be due
and payable as provided in the Loan Agreement.
This Note may be prepaid only in accordance with the Loan Agreement.
This Note is issued pursuant, and is subject, to the Loan Agreement, which
provides, among other things, for acceleration hereof. This Note is the "Note"
referred to in the Loan Agreement.
This Note is secured, among other things, pursuant to the Loan Agreement,
and may now or hereafter be secured by one or more other security agreements,
mortgages, deeds of trust, assignments or other instruments or agreements.
The Borrower hereby agrees to pay all costs of collection, including
attorneys' fees and legal expenses in the event this Note is not paid when due,
whether or not legal proceedings are commenced.
Presentment or other demand for payment, notice of dishonor and protest
are expressly waived. All rights and obligations hereunder shall be governed by
the laws of the Commonwealth of Massachusetts and this Note shall be deemed to
be under seal.
By:
-------------------------------------
EXHIBIT 2 (of Exhibit 10 (iii)
NOTICE OF BORROWING
Date: ___________, 200__
To: Citizens Bank of Massachusetts
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Re: Amended and Restated Loan and Security Agreement (Accounts
Receivable and Inventory) dated October 31, 1994, as amended (the
"Loan Agreement") between Citizens Bank of Massachusetts (the
"Bank") and Turbotec Products, Inc. (the "Borrower")
This Notice of Borrowing confirms the following request for [ ] a LIBOR
Rate Loan - [ ] conversion of a Prime Rate Loan (check applicable box)
under the Loan Agreement.
Date of Request:
Date of LIBOR Rate Loan:
Amount of LIBOR Rate Loan at LIBOR Rate: *
Interest Period:
1, 2 or 3 months
[ ] This is a request for a continuation/conversion of a LIBOR loan
described as follows:
Date of Original Loan:
Amount of Original Loan:
Maturity Date:
Interest Period:
Amount of Loan to be Continued or Converted:
The Borrower hereby certifies that all representations and warranties contained
in the Loan Agreement are true and accurate in all material respects on the date
of this Notice of Borrowing as though such representations and warranties had
been made on this date (except to the extent that such representation or
warranty expressly relates to an earlier date).
Terms used herein which are defined in the Loan Agreement are used as so
defined.
By:
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o Minimum of $500,000.00 with increments of $100,000.00
EXHIBIT 3 (of Exhibit 10 (iii)
COMPLIANCE CERTIFICATE
Turbotec Products, Inc. ("Borrower") hereby certifies to Citizens Bank of
Massachusetts ("Bank"), pursuant to the Amended and Restated Loan and Security
Agreement (Accounts Receivable and Inventory) between Borrower and Bank dated
October 31, 1994 as may be amended from time to time ("Loan Agreement"), that:
A. General
1. Capitalized terms not defined herein shall have the meanings set forth
in the Loan Agreement.
2. The Borrower has complied with all the terms, covenants and conditions
to be performed or observed by the Borrower contained in the Loan Agreement and
other documents required to be executed by the Borrower in connection with the
Loan Agreement.
3. Neither on the date hereof nor, if applicable, after giving effect to
the loan made on the date hereof, does there exist an Event of Default or an
event which would with notice or the lapse of time, or both, constitute an Event
of Default.
4. The representations and warranties contained in the Loan Agreement and
in any certificate, document or financial or other statement furnished at any
time thereunder are true, correct and complete in all material respects with the
same effect as though such representations and warranties had been made on the
date hereof, except to the extent that any such representation and warranty
relates solely to an earlier date (in which case such representation and
warranty shall be true, correct and complete on and as of such earlier date).
B. Financial Covenants
As of the date hereof or, for such period as may be designated below, the
computations, ratios and calculations as set forth below in accordance with
Section 15 of the Loan Agreement are true and correct:
1. Cash Flow Coverage Ratio - Section 14(k)
The cash flow of the Borrower for the preceding twelve-month period
was equal to ______ times the amount of the Borrower's fixed charges for
such period, computed as follows:
A. EBITDA ...........................................$___________
B. Cash taxes paid ...................................$___________
C. Permitted dividends ...............................$___________
D. $200,000 maintenance capital expenditures .........$___________
E. A - B - C - D = cash flow ........................$___________
F. Interest .........................................$___________
G. CMLTD ............................................$___________
H. F + G = fixed charges .............................$___________
I. Ratio of E to H = ____ to _____
Required: Not less than 1.0 to 1 for the 12-month period ending
March 31, 2002
Not less than 1.15 to 1 for the 12-month period ending
March 31, 2003 and thereafter
IN WITNESS WHEREOF, the undersigned, a duly authorized officer of
Borrower, has executed and delivered this Certificate in the name and on behalf
of the Borrower on _________________, 200__.
TURBOTEC PRODUCTS, INC.
By:
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