AMENDED AND RESTATED TERM LOAN AGREEMENT
BETWEEN
BALCHEM CORPORATION
AND THE CHASE MANHATTAN BANK
Dated as of January 15, 1999
Amended and Restated Loan Agreement dated as of January 15, 1999
between BALCHEM CORPORATION, a Maryland corporation with its chief place of
business located at Xxxxx 0 xxx Xxxxx 000, X.X. Xxx 000, Xxxxx Xxxx, Xxx Xxxx
00000 (the "Borrower") and THE CHASE MANHATTAN BANK (formerly known as Chemical
Bank), a New York banking corporation having an office at 000 Xxxxx Xxxxxxxxx,
Xxxxx 000, Xxxxxxx, Xxx Xxxx, 00000 (the "Bank").
Preliminary Statement. The Borrower and the Bank entered into a loan
agreement dated as of January 25, 1995 (as heretofore amended, the "Original
Agreement") pursuant to which the Bank made a term loan to the Borrower in the
original amount of $3,700,000 ("Term Loan A"). The Borrower has requested and
the Bank has agreed, subject to the terms and conditions contained herein, to
make an additional term loan to the Borrower in the amount of $3,000,000. To
that end, the Borrower and the Bank hereby amend and restate the Original
Agreement in its entirety as set forth herein.
Accordingly, the Borrower, the Borrower and the Bank agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used herein the following terms shall have the
following meanings:
"Affiliate", as applied to any Person, means any other Person directly
or indirectly through one or more intermediaries controlling, controlled by, or
under common control with, that Person. For the purposes of this definition,
"control" (including with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as applied to any Person,
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of that Person, whether through the
ownership of voting securities or by contract or otherwise.
"Agreement" shall mean this Amended and Restated Loan Agreement, as the
same from time to time may be amended, supplemented or modified.
"Alternate Base Rate" shall mean a rate per annum equal to 1/2 of 1%
plus the Federal Funds Effective Rate from time to time.
"Base LIBOR Rate" applicable to a particular LIBOR Rate Interest Period
shall mean a rate per annum equal to the product arrived at by multiplying the
Fixed LIBOR Rate applicable to such Interest Period by a fraction (expressed as
a decimal), the numerator of which shall be the number one and the denominator
of which shall be the number one minus the aggregate reserve percentages
(expressed as a decimal) from time to time established by the Board of Governors
of the Federal Reserve System of the United States and any other banking
authority to which the Bank is now or hereafter subject, including, but not
limited to any reserve on Eurocurrency Liabilities as defined in Regulation D of
the Board of Governors of the Federal Reserve System of the United States at the
ratios provided in such Regulation from time to time, it being agreed that any
portion of the Principal Balance bearing interest at a LIBOR Rate shall be
deemed to constitute Eurocurrency Liabilities, as defined by such Regulation,
and it being further agreed that such Eurocurrency Liabilities shall be deemed
to be subject to such reserve requirements without benefit of or credit for
prorations, exceptions or offsets that may be available to the Bank from time to
time under such Regulation and irrespective of whether the Bank actually
maintains all or any portion of such reserve.
"Business Day" shall have the same meaning as "Working Day" set forth
below.
"Calculation Period" shall mean each period commencing on each
anniversary of the date a Loan was made (calculated on the basis of a single
annual payment), except for the initial Calculation Period following prepayment,
which shall commence on the date of such prepayment and end of the next
following anniversary date of the date the Fixed Rate was made.
"Capital Expenditures" shall mean amounts paid or indebtedness incurred
by the Borrower or any Subsidiary in connection with the purchase or lease of
capital assets that would be required to be capitalized and shown on the balance
sheet of the Borrower in accordance with GAAP.
"Cash Flow" shall mean Operating Profit plus depreciation, amortization
and non-cash compensation minus dividends minus Capital Expenditures.
"Contractual Obligations" shall mean as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Controlled" and "Control" shall mean any partnership, corporation or
other entity of which the Borrower, alone, or the Borrower and/or one or more of
its Subsidiaries, either has the power to direct the management or the power to
direct at least a majority of the voting interests.
"Corporate Guarantor" shall mean any Subsidiary of the Borrower.
"Default" shall mean any of the events specified in Section 8, whether
or not any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"Discount Rate" shall mean, for the purposes of Paragraph 2.5(a) and
the calculation pursuant to the formula attached hereto as Exhibit C, for each
Calculation Period, the fixed per annum rate, as determined by the Bank in its
sole discretion on the date of such prepayment, that would be bid by a fixed
rate payor under an arm's-length interest rate swap transaction having (i) a
term approximately equal to such Calculation Period, (ii) a notional amount
equal to the amount of such prepayment, (iii) a floating rate of LIBOR for the
notional amount and (iv) a counterparty of creditworthiness acceptable to the
Bank.
"Dollars" and "$" shall mean dollars in lawful currency of the United
States of America.
"Environmental Laws" shall mean any federal, state or local statute or
regulation relating to hazardous or toxic wastes or substances or the removal
thereof.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurodollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding one billion dollars in
respect of "Eurocurrency Liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the LIBOR Rate is
determined or any category of extensions of credit or other assets which
includes loans by a non-United States office of the Bank to United States
residents). With respect to increases in the Eurodollar Reserve Percentage, the
LIBOR Rate shall be adjusted automatically on and as of the effective date of
any such increase.
"Event of Default" shall mean any of the events specified in Section 8,
provided that any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Federal Funds Effective Rate" shall mean and to the extent necessary
determined by the Bank separately for each day during the term of this Agreement
and shall for each such day be a 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 each such day
(or if any such day is not a Business Day, for the next immediately preceding
Business Day) by the Federal Reserve Bank of New York, or if the weighted
average of such rates is not so published for any such day which is a Business
Day, the average of the quotations for any such day on such transactions
received by the Bank from three Federal funds brokers of recognized standing
selected by the Bank.
"Fixed Rate" shall mean the fixed rate of interest from time to time
offered by the Bank for periods not to exceed in any event the applicable Term
Loan Maturity Date. The Fixed Rate is subject to availability by the Bank.
"Fixed LIBOR Rate" applicable to a particular LIBOR Rate Interest
Period shall mean a rate per annum equal to the rate for U.S. dollar deposits
with maturities comparable to such LIBOR Rate Interest Period which appears on
Telerate Page 3750 as of 11:00 a.m., London Time, three (3) Working Days prior
to the commencement of such LIBOR Rate Interest Period, provided, however, that
if such rate does not appear on Telerate Page 3750, the "Fixed LIBOR Rate"
applicable to a particular LIBOR Rate Interest Period shall mean a rate per
annum equal to the rate at which U.S. dollar deposits in an amount approximately
equal to the Principal Balance (or the portion thereof which will bear interest
at a LIBOR Rate during the LIBOR Rate Interest Period to which such Fixed LIBOR
Rate is applicable in accordance with the provision of this Agreement), and with
maturities comparable to the last day of the LIBOR Rate Interest Period with
respect to which such Fixed LIBOR Rate is applicable, are offered in immediately
available funds in the London Interbank Market to the London office of the Bank
by leading banks in the Eurodollar market at 11:00 a.m., London time, three (3)
Working Days prior to the commencement of the LIBOR Rate Interest Period to
which such Fixed LIBOR Rate is applicable.
"Floating Rate" shall mean a rate per annum equal to the greater on a
daily basis of (a) the Prime Rate and (b) the Alternate Base Rate. If for any
reason the Bank shall have determined (which determination shall be conclusive
and binding on the Borrower) that the Bank is unable to ascertain the Federal
Funds Effective Rate for any reason, including, without limitation, the
inability or failure of the Bank to obtain sufficient bids for the purposes of
determining the Federal Funds Effective Rate in accordance with the provisions
of this Agreement, the Floating Rate shall be determined on the basis of the
Prime Rate until the circumstances giving rise to such inability no longer
exist. Notwithstanding anything to the contrary contained in this Agreement, the
Bank shall have the right in its sole and absolute discretion to calculate
interest on the portion of the Principal Balance from time to time bearing
interest at the Floating Rate during any given period of time, or for any given
day during the term of this Agreement, at a rate per annum based upon the Prime
Rate notwithstanding the fact that a rate per annum based upon the Alternate
Base Rate may, from time to time during such period of time or for any such
given day, in fact be higher, it being agreed that no such election by the Bank
shall in any event or under any circumstance constitute a waiver of the Bank's
right at any time thereafter and without prior notice to the Borrower to charge
interest on the portion of the Principal Balance bearing interest at the
Floating Rate strictly in accordance with the provisions of this provision. Any
change in the Floating Rate as a result of a change in the Prime Rate or the
Federal Funds Effective Rate shall be effective on the effective date of any
such change in the Prime Rate or the Federal Funds Effective Rate, as the case
may be. The Floating Rate and the components thereof shall be calculated for the
actual number of days elapsed on the basis of a 360-day year. Each determination
of the Floating Rate shall be made by the Bank and shall be conclusive and
binding upon the Borrower absent manifest error.
"Funded Debt" shall mean short term debt plus long term debt plus
capital leases.
"Funded Debt/Cash Flow Ratio" shall mean Funded Debt divided by Cash
Flow.
"GAAP" shall mean generally accepted accounting principles applied in a
manner consistent with that employed in the preparation of the financial
statements described in Section 3.1.
"Governmental Authority" shall mean any nation or government, any state
or other political subdivision thereof any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled (through
stock or capital ownership or otherwise) any of the foregoing.
"Guaranty" shall mean the guaranty in the form of Exhibit D hereto,
which shall be executed and delivered to the Bank by the Corporate Guarantor.
"Installment Payment Date" shall mean any date on which all or any
portion of the Principal Balance of a Term Loan is due and payable.
"Interest Period" shall mean any period during which a portion of a
Loan bears interest at a fixed rate as elected by the Borrower in accordance
with the terms of this Agreement.
(a) If any Interest Period would otherwise end on a day which
is not a day on which the Bank is open for business in New York City, that
Interest Period shall be extended to the next succeeding day upon which the Bank
is open for business.
(b) No Interest Period shall extend beyond the applicable Term
Loan Maturity Date.
"LIBOR Margin" shall be the number set forth below based on the
Borrower's Funded Debt/Cash Flow Ratio as evidenced by both (i) the Borrower's
audited year-end financial statements delivered pursuant to Paragraph 5.2(a) and
(ii) evidence from the Borrower of the calculation of its Funded Debt/Cash Flow
Ratio on a rolling four quarter basis. As such time as:
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Funded Debt/Cash Flow Ratio is: LIBOR Margin shall be:
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equal to or greater than 2.0 to 1.0 1.75 percent per annum
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greater than 1.0 to 1.0 but less than 2.0 to 1.0 1.50 percent per annum
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greater than .5 to 1.0 but less than 1.0 to 1.0 1.25 percent per annum
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equal to or less than .50 to 1.00 1.00 percent per annum
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Adjustments in the LIBOR Rate resulting from such calculations shall become
effective as to LIBOR Rate Interest Periods that commence after the date that
such calculations shall have been accepted by the Bank and shall be fixed for
the entirety of such LIBOR Rate Interest Period.
"LIBOR Rate" applicable to a particular LIBOR Rate Interest Period
shall mean a rate per annum equal to the LIBOR Margin plus the Base LIBOR Rate
applicable to such LIBOR Rate Interest Period.
"LIBOR Rate Interest Period" shall mean the period of time during which
a particular LIBOR Rate will be applicable to all or a particular portion of the
Principal Balance of the Term Loan in accordance with the provisions of this
Agreement, it being agreed that:
(i) each LIBOR Rate Interest Period shall
commence and shall terminate on
a Re-Set Date,
(ii) each LIBOR Rate Interest Period shall
be of a duration of either one month, two months,
three months, four months, five months, or six
months,
(iii) no LIBOR Rate Interest Period shall
extend beyond the applicable Term Loan Maturity Date,
and
(iv) except as otherwise specifically
provided to the contrary with respect to the last
LIBOR Rate Interest Period during the term of the
applicable Term Note, and with respect to the
unavailability of a LIBOR Rate or Rates, and with
respect to a prepayment of all or a portion of the
Principal Balance, the entire portion of the
Principal Balance with respect to which a LIBOR Rate
or Rate is or are due to be reset on the first day of
a particular LIBOR Rate Interest Period will bear
interest at the LIBOR Rate pertaining to such LIBOR
Rate Interest Period from and including the first day
of such LIBOR Rate Interest Period to, but not
including, the last day of such LIBOR Rate Interest
Period.
"LIBOR Rate Prepayment Premium" shall have the meaning given therefor
in Paragraph 2.5(b) hereof.
"Lien" shall mean any mortgage, pledge, security interest,
hypothecation, assignment, deposit arrangement, encumbrance, or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, any conditional sale or other
title retention agreement, any financing lease having substantially the same
economic effect as any of the foregoing, and the filing of any financing
statement under the Uniform Commercial Code or comparable law of any
jurisdiction).
"Loan or "Loans" shall mean Term Loan A and/or Term Loan B, as the
context may require.
"Loan Documents" shall mean Term Note A. Term Note B, this Agreement,
the Security Agreement and any other document or instrument executed and
delivered in connection herewith.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, operations, property, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole, (b) the ability
of the Borrower to perform its obligations under the Loan Documents, or (c) the
validity or enforceability of any of the Loan Documents or the rights or
remedies of the Bank hereunder or thereunder.
"Maturity Date" shall mean the date that all or a portion of the
outstanding Principal Balance of a Loan is due and payable pursuant to the terms
hereof which shall include without limitation, each Installment Payment Date and
the final Maturity Date of each Term Loan.
"Note" shall mean Term Note A or Term Note B, as the context may
require.
"Operating Profit" shall mean earnings before interest and taxes.
"Person" shall mean any individual, corporation, partnership, joint
venture, trust, unincorporated organization or any other juridical entity, or a
government or state or any agency or political subdivision thereof.
"Plan" shall mean any plan of a type described in Section 4021(a) of
ERISA in respect of which the Borrower is an "employer" as defined in Section
3(5) of ERISA.
"Post Default Rate" shall mean at any time a rate of interest equal to
2% per annum in excess of the rate (or rates) of interest otherwise in effect
with respect to the Principal Balance.
"Prepayment Premium" shall mean, for the purposes of Paragraph 2.5(a)
and the calculation pursuant to the formula attached hereto as Exhibit C, for
any prepayment of the Principal Balance bearing interest at a Fixed Rate, a
premium (as liquidated damages and not as penalty) equal to (a) in the case of
any such prepayment made within one year period prior to the applicable Term
Loan Maturity Date or the date upon which such Interest Period would otherwise
end, all reasonable losses, expenses and liabilities (including, without
limitation, any interest paid by the Bank to lenders of funds borrowed by it to
make or carry the Fixed Rate and losses sustained by the Bank in connection with
the re-employment of such funds) which the Bank may incur with respect to that
portion of the Principal Balance bearing interest at the Fixed Rate, or (b) in
the case of any such prepayment made earlier than one year prior to the
applicable Term Loan Maturity Date or the date upon which such Interest Period
would otherwise end, the sum of the present values, each determined at the
appropriate Discount Rate, of the excess, if any, of (i) the amount of interest
computed at the Fixed Rate on the Principal Balance (after giving effect to any
scheduled amortization occurring prior to the first day of each Calculation
Period) deemed to be due on the last day of each Calculation Period during the
remaining term of the applicable Term Note, or until the Interest Period
applicable to such Fixed Rate would otherwise end, over (ii) the amount of each
corresponding interest payment computed according to the formula set forth on
Exhibit C.
"Principal Balance" shall mean the outstanding Principal Balance of the
Term Note from time to time.
"Prime Rate" shall mean the rate of interest established from time to
time by the Bank as its "prime rate", as the same shall change from day to day.
"Real Property" shall mean any real property owned or leased by the
Borrower or any of its Subsidiaries.
"Redeployment Rate" shall mean, for the purposes of Paragraph 2.5(a)
and the calculation pursuant to the formula attached hereto as Exhibit C, at any
time, the fixed per annum rate (calculated on the basis of a single annual
interest payment), as determined by the Bank in its sole discretion on the date
of such prepayment, that would be bid by a fixed rate payor under an
arm's-length interest rate swap transaction having (i) a term approximately
equal to the period commencing on the date of such prepayment and ending on the
stated maturity of such Fixed Rate, (ii) a notional amount equal to the amount
of such prepayment, (iii) a floating rate of LIBOR for the notional amount and
(iv) a counterparty of creditworthiness acceptable to the Bank.
"Reference Bank" means one or more of the banks appearing on the
display designated as page "LIBOR" on the Reuters Monitor Money Rates Service
(or such other page as may replace the LIBOR page on that service for the
purpose of displaying London interbank offered rates of major banks); provided
that if no such offered rate shall appear on such display, "Reference Bank"
shall mean one or more major banks in the London interbank market as selected by
the Bank.
"Reportable Event" shall mean any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder.
"Re-Set Date" shall mean consecutive numerically corresponding dates
during the term of this Agreement, the first of which Re-Set Dates shall occur
on a Working Day to be designated by the Bank, which Working Day shall not be
earlier than five (5) Working Days or later than fifteen (15) Working Days
subsequent to the date upon which the Loan is advanced. Each subsequent Re-Set
Date during the term of this Agreement shall be the date in each subsequent
calendar month during the term of this Agreement which numerically corresponds
to the first Re-Set Date during the term of this Agreement, provided, however,
that if the numerically corresponding date in any such subsequent calendar month
during the term of this Agreement shall not be a Working Day, the Re-Set Date
for such calendar month shall be the next succeeding Working Day, unless the
next such succeeding Working Day would fall in the next calendar month, in which
event the Re-Set Date for such calendar month shall be the next preceding
Working Day. For the purposes of this Agreement the period of time between any
two consecutive Re-Set Dates during the term of this Agreement shall be deemed
to be a period of one month.
"Requirements of Law" shall mean as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation, or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Roll Over Date" applicable to a particular LIBOR Rate Interest Period
shall mean the last day of such LIBOR Rate Interest Period.
"Security Agreements" shall mean the Security Agreements referred to in
Paragraph 9(b) hereof substantially in the form of Exhibit E hereto.
"Specified Person" shall mean either the Borrower or any of its
Subsidiaries.
"Subsidiary or Subsidiaries" of any Person shall mean any corporation
or corporations of which the Person alone, or the Person and/or one or more of
its Subsidiaries, owns, directly or indirectly, at least a majority of the
securities having ordinary voting power for the election of directors.
"Telerate Page 3750" shall mean the display designated as "Page 3750"
on the Associated Press-Dow Xxxxx Telerate Service (or such other page as may
replace Page 3750 on the Associated Press-Dow Xxxxx Telerate Service or such
other service as may be nominated by the British Bankers' Association as the
information vendor for the purpose of displaying British Bankers' Association
interest settlement rates for U.S. Dollar deposits). Any Fixed LIBOR Rate
determined on the basis of the rate displayed on Telerate Page 3750 in
accordance with the provisions of this Agreement shall be subject to
corrections, if any, made in such rate and displayed by the Associated Press-Dow
Xxxxx Telerate Service within one hour of the time when such rate is first
displayed by such Service.
"Term Loan(s)" shall mean Term Loan A and/or Term Loan B, as the
context may require.
"Term Loan A" shall mean the term loan made by the Bank to the Borrower
pursuant to Section 2.1 hereof, in the original principal amount of $3,700,000
(the Principal Balance of which is, as of the Restatement Date, $750,000).
"Term Loan B" shall mean the term loan made by the Bank to the Borrower
on the restatement Date pursuant to Section 2.1 hereof, in the original
principal amount of $3,000,000.
"Term Loan A Maturity Date" shall mean April 1, 2000.
"Term Loan B Maturity Date" shall mean January 15, 2004.
"Term Loan Maturity Date" shall mean, with respect to Term Loan A, Term
Loan A Maturity Date, and with respect to Term Loan B, Term Loan B Maturity
Date.
"Term Note(s)" shall mean Term Note A and/or Term Note B, as the
context may require.
"Term Note A" shall mean the note, substantially in the form of Exhibit
A hereto, evidencing Term Loan A.
"Term Note B" shall mean the note, substantially in the form of Exhibit
B hereto, evidencing Term Loan B.
"Working Day" shall mean any day on which the Bank is open for business
in New York City and on which commercial banks in the City of London, England
are open for dealings in U.S. dollar deposits in the London Interbank Market.
1.2 Accounting Terms. As used herein and in any certificate or other
document made or delivered pursuant hereto, accounting terms not specifically
defined herein shall have the respective meanings given to them under generally
accepted accounting principles.
SECTION 2. TERM LOANS
2.1 Term Loan Principal Repayment.
(a) (i) Term Loan A. The Outstanding Principal Balance of Term
Loan A as of the Restatement Date, in the amount of $750,000.00, shall be
repayable in consecutive monthly installments of principal as follows: Subject
to Paragraph (b)(i) below of Section 2.1, commencing on February 1, 1999 and on
the first day of each succeeding month thereafter through and including Term
Loan A Maturity Date, there shall be due and payable installments of principal
each in the amount of $50,000.00.
(ii) Term Loan B. The Outstanding Principal Balance
of Term Loan B shall be repayable in consecutive monthly installments of
principal as follows: Subject to paragraph (b)(ii) below of Section 2.1,
commencing on February 1, 1999 and on the first day of each succeeding month
thereafter through and including Term Loan B Maturity Date, there shall be due
and payable installments of principal each in the amount of $50,000.
(b) (i) Term Loan A. If in any month, it would be necessary
for the Borrower to prepay a Loan which bears interest at a LIBOR Rate in order
to make a regular monthly payment of principal due under Paragraph (a)(i) of
Section 2.1, the Borrower may defer such regular monthly payment until the last
day of the LIBOR Rate Interest Period applicable to such Loan, provided,
however, that the aggregate of all principal payments for: (1) the period
February 1, 1999 through December 31, 1999 shall be no less than $550,000; and
(2) the period February 1, 1999 through Term Loan A Maturity Date shall be no
less than $750,000.
(ii) Term Loan B. If in any month, it would be
necessary for the Borrower to prepay a Loan which bears interest at a LIBOR Rate
in order to make a regular monthly payment of principal due under Paragraph
(a)(ii) of Section 2.1, the Borrower may defer such regular monthly payment
until the last day of the LIBOR Rate Interest Period applicable to such Loan,
provided, however, that the aggregate of all principal payments for (1) the
period February 1, 1999 through December 31, 1999 shall be no less than
$550,000; (2) the period February 1, 1999 through December 31, 2000 shall be no
less than $1,150,000; (3) the period February 1, 1999 through December 31, 2001
shall be no less than $1,750,000; (4) the period February 1, 1999 through
December 31, 2002 shall be no less than $2,350,000; and (5) the period February
1, 1999 through Term Loan B Maturity Date shall be no less than $3,000,000.
(c) In addition to and together with each installment of
principal set forth above, the Borrower shall pay to the Bank interest on the
unpaid Principal Balance of each Term Loan at the rate (or rates) hereinafter
provided and at the times so designated for the particular interest option
selected. The entire Principal Balance of each Term Loan remaining unpaid and
any accrued and unpaid interest shall be due and payable on the Term Loan
Maturity Date applicable to such Term Loan.
2.2 Term Loan Interest
(a) Each Term Loan made by the Bank to the Borrower pursuant
to Section 2.1 hereof shall be evidenced by, in the case of Term Loan A, a
replacement promissory note of the Borrower substantially in the form of Exhibit
A hereto, and in the case of Term Loan B, a promissory note of the Borrower
substantially in the form of Exhibit B hereto, each payable to the order of the
Bank and representing the obligation of the Borrower to pay the Principal
Balance of such Term Loan with interest thereon as hereinafter prescribed. Each
Term Note shall (i) be dated the date hereof, (ii) be stated to mature on, in
the case of Term Loan A, Term Loan A Maturity Date, and, in the case of Term
Loan B, Term Loan B Maturity Date, (iii) provide for principal repayment as set
forth above and (iv) bear interest with respect to the unpaid Principal Balance
thereof from time to time outstanding at a rate (or rates) per annum to be
selected by the Borrower in accordance with the provisions set forth in Section
2.3 hereof, and in the case of the Fixed Rate or the LIBOR Rate for the Interest
Period or the LIBOR Rate Interest Period therein specified, equal to either (1)
the Base LIBOR Rate plus the LIBOR Margin, (2) the Fixed Rate, if available and
at the rate determined by the Bank for the period so designated, or (3) the
Floating Rate (which interest rate will change when and as the Prime Rate or the
Federal Funds Effective Rate changes). In all cases interest shall be computed
on the basis of a 360-day year for actual days elapsed and shall be payable as
provided in Paragraph 2.2(b) hereof. After any stated or accelerated maturity,
such Term Note shall bear interest at the rate set forth in Paragraph 2.2(d)
hereof.
(i) From and including the date on which the Loan is
advanced to, but not including, the first Re-Set Date during the term of this
Agreement, the entire Principal Balance shall bear interest at the Floating
Rate. From and including the first Re-Set Date during the term of this Agreement
to, but not including, the last Re-Set Date during the term of this Agreement
to, but not including, the last Re-Set Date during the term of this Agreement,
the entire Principal Balance shall, except as specifically provided to the
contrary in this Agreement, bear interest at the above referenced Fixed Rate,
Floating Rate or to the extent hereafter provided at one or more of the
available LIBOR Rates. The available LIBOR Rates shall consist of a one-month
LIBOR Rate, a two-month LIBOR Rate, a three-month LIBOR Rate, a four-month LIBOR
Rate, a five-month LIBOR Rate, and a six-month LIBOR Rate determined in
accordance with the provisions of this Agreement, it being agreed that:
(A) the Borrower shall have the right to
select from the available LIBOR Rate (or rates) from time to time applicable to
the Principal Balance, and
(B) each LIBOR Rate from time to time so
selected by the Borrower shall take effect and shall end on a Re-Set Date.
Except as hereinafter specifically provided to the contrary in this paragraph,
the Borrower shall not have the right to select more than one LIBOR Rate to take
effect on any given Re-Set Date.
(ii) Notwithstanding anything to the contrary
hereinabove set forth in Paragraph 2.2(a)(i), the Borrower shall have the option
from time to time during the term of this Agreement to select up to, but not in
excess of, two (2) LIBOR Rates to take effect on any given Re-Set Date with
respect to each Term Loan. The Borrower shall make such election by written
irrevocable notice given to the Bank at least five (5) Working Days prior to the
applicable Re-Set Date, in which notice the Borrower shall specify the two (2)
LIBOR Rates so selected by the Borrower and the respective portions of the
Principal Balance to which such LIBOR Rates are to respectively pertain, it
being agreed that:
(A) the minimum portion of the Principal
Balance to which any such LIBOR Rate may pertain shall be equal to at least
$500,000,
(B) each such LIBOR Rate so selected by the
Borrower shall be applicable to the portion of the Principal Balance to which it
pertains from and including the first day of the applicable LIBOR Rate Interest
Period to, but not including, the Roll Over Date applicable to such LIBOR Rate
Interest Period, and
(C) the Borrower shall not have the right to
exercise its option pursuant to this sentence as of any given Re-Set Date if the
effect thereof would be to cause more than two (2) different LIBOR Rate Interest
Periods to be in effect with respect to the Principal Balance of any individual
Term Loan at any given time during the term of this Agreement.
(b) Interest accrued on each Term Loan shall be
payable, on:
(i) the Maturity Date applicable to such
Term Loan;
(ii) with respect to any portion of the
Principal Balance prepaid pursuant to this
Agreement, the date of such prepayment;
(iii) the first day of each month in each
year during the term of such Term Loan to
and including the Term Loan Maturity Date applicable to such Term Loan,
commencing on the first day of the first month following the Restatement Date;
(iv) with respect to any portion of the
Principal Balance converted to a different rate on a day when interest would not
otherwise have been payable, the date of such conversion.
(c) All payments (including prepayments) to be made by the
Borrower on account of principal or interest with respect to the Loans or on
account of fees or any other obligations of the Borrower to the Bank hereunder
shall be made to the Bank at the office of the Bank set forth in Section 10.1
hereof or at such other place as the Bank may from time to time designate in
writing in lawful money of the United States of America in immediately available
funds. The Borrower hereby authorizes and directs the Bank to charge any account
of the Borrower maintained at any office of the Bank for any such payments.
Subject to the other provisions hereof and the definitions of Interest Period
and LIBOR Rate Interest Period set forth in Section 1.1 hereof, if any payment
to be so made hereunder, or under a Term Note, becomes due and payable on a day
other than a Business Day, such payment shall be extended to the next succeeding
Business Day and, to the extent permitted by applicable law, interest thereon
shall be payable at the then applicable rate during such extension.
(d) If all or a portion of principal or interest shall not be
paid when due (whether at the stated or any accelerated maturity of the Loans)
or if any fee or other amount due hereunder shall not be paid when due, such
Loan, interest, fee or amount due hereunder, to the extent permitted by
applicable law, shall bear interest (payable on demand, and in any event on the
last day of each month, and computed daily on the basis of a 360-day year for
actual days elapsed) at the Post Default Rate. In no event, however, shall
interest payable hereunder be in excess of the maximum rate of interest
permitted under applicable law. The obligation to so pay interest upon any
reimbursement obligation of the Borrower to the Bank shall not be construed so
as to waive the requirement for reimbursement on the same date that payment is
made by the Bank as set forth in this Agreement.
(e) The Borrower hereby expressly authorizes the Bank to
record the rate (or rates) of interest applicable to the Principal Balance (or
portions thereof) and the Interest Period or LIBOR Rate Interest Periods
applicable and all such recordations shall be presumed to be correct.
(f) Notwithstanding anything to the contrary contained herein,
the amount of the Principal Balance of a Loan which may bear interest at a LIBOR
Rate (or rates) and the LIBOR Rate Interest Period (or periods) applicable
thereto shall not be such as would result in a prepayment penalty in order to
satisfy the amortization requirements set forth in Paragraph (a) of Section 2.1
except as permitted by Paragraph (b) of Section 2.1.
2.3 Procedure for Election of Interest Rates.
(a) The Borrower may elect to have interest on all or portions
of the Principal Balance accrue at any of the aforementioned interest rates by
giving the Bank irrevocable notice of a request for an interest election
hereunder (i) in the case of the LIBOR Rate, as set forth below and (ii) in the
case of all other interest rate elections, not less than one nor more than five
Business Days before a proposed election, continuation or conversion, setting
forth (A) the amount of the Principal Balance which will bear interest at such
rate, which shall be not less than $500,000, (B) whether the interest rate for
such principal amount is to be LIBOR Rate, Fixed Rate or Floating rate or a
combination thereof, (C) if a LIBOR or Fixed Rate is selected, the requested
Interest Period or LIBOR Rate Interest Period commencement date, and (D) if
entirely or partially a Fixed Rate or a LIBOR Rate, the length of the Interest
Period or LIBOR Rate Interest Period therefor, which shall be (1) one month, two
months, three months, four months, five months, or six months, in the case of
the LIBOR Rate, and (2) for a period not to exceed the applicable Term Loan
Maturity Date in the case of a Fixed Rate or a LIBOR Rate. As used in this
Section 2.3, "conversion" shall mean the conversion from one interest rate to
another interest rate as more fully described in Section 2.3 hereof. Such notice
may be written (including, without limitation, via facsimile transmission) or
oral and shall be sufficient if received by 1 p.m. on the date on which such
notice is to be given. If any such request is oral it shall be confirmed in
writing sent by the Borrower to the Bank within two Business Days thereafter. If
no interest rate election is made, then the Principal Balance (or any portion
thereof) will automatically then bear interest at the Floating Rate.
(b) The Borrower shall have the right at any time on prior
irrevocable written notice to the Bank as specified in Paragraph 2.3(a) to
continue any interest rate election into a subsequent Interest Period or LIBOR
Rate Interest Period, as the case may be, (ii) to convert any portion of the
Principal Balance bearing interest at a Fixed Rate upon the expiration of the
Interest Period or LIBOR Rate upon the Roll Over Date to bear interest at
another type of Fixed Rate or LIBOR Rate or a Floating Rate (specifying, in the
case of a Fixed Rate or LIBOR Rate, the Interest Period and LIBOR Rate Interest
Period to be applicable thereto), and (iii) to convert interest on any portion
of the Principal Balance bearing interest at the Floating Rate into a Fixed Rate
or LIBOR Rate (specifying the Interest Period or the LIBOR Rate Interest Period
to be applicable thereto), subject to the following:
(i) in the case of a conversion of less than all of
the outstanding Principal Balance of a Term Loan, the aggregate
principal amount of such Term Loan converted shall not be less than
$500,000.00;
(ii) no portion of a Term Loan (other than that
portion bearing interest at a Floating Rate) shall be converted at any
time other than at the end of an Interest Period (or the LIBOR Rate
Interest Period) applicable thereto; and
(iii) no election for a Fixed Rate or a LIBOR Rate
may be made by the Borrower within sixty (60) days of the applicable
Term Loan Maturity Date.
In the event that the Borrower shall not give notice to continue any Fixed Rate
or LIBOR Rate into a subsequent Interest Period or convert any amount of the
Principal Balance of a Term Loan bearing interest at such rate into another
type, on the last day of the Interest Period or LIBOR Rate Interest Period
thereof, such Principal Balance (unless prepaid) shall automatically bear
interest at the Floating Rate. The Interest Period or LIBOR Rate Interest Period
applicable to any portion of the Principal Balance which is to bear interest at
the Fixed Rate or the LIBOR Rate resulting from a conversion or continuation
shall be specified by the Borrower in the irrevocable notice delivered by the
Borrower pursuant to this section; provided, however, that, if such notice does
not specify either rate of interest or the Interest Period or the LIBOR Rate
Interest Period to be applicable thereto, that portion of the Principal Balance
shall automatically be converted into, or continued as, as the case may be, at
the Floating Rate until such required information is furnished pursuant to the
terms hereof. Notwithstanding anything to the contrary contained above, if an
Event of Default shall have occurred and is continuing, no Fixed Rate may be
continued into a subsequent Interest Period or LIBOR Rate may be continued into
a subsequent LIBOR Rate Interest Period and no LIBOR Rate of interest may be
converted to the Fixed Rate or Fixed Rate of Interest into the LIBOR Rate.
2.4 Prepayment.
(a) The Borrower may prepay any portion of the Principal
Balance bearing interest at the Floating Rate in whole or in part without
premium or penalty upon not less than ten (10) business days prior written
notice; provided, however, that each partial prepayment on account of any
portion of the Principal Balance bearing interest at the Floating Rate shall be
in an amount not less than $100,000. Except as provided in Section 2.5 below,
the Borrower may not prepay any portion of a Term Loan bearing interest at the
Fixed Rate or the LIBOR Rate prior to the last day of the Interest Period or
LIBOR Rate Interest Period therefor. Any partial prepayment of a Term Loan shall
be applied to the last maturing installments in inverse order or their
respective maturities. Each prepayment shall be made together with payment of
accrued interest on the amount prepaid to and including the date of prepayment.
2.5 Prepayment Premiums.
(a) If any portion of the Principal Balance of a Term Loan is
bearing interest at the Fixed Rate, then, subject to the following provisions of
this paragraph, the Borrower shall have the right to prepay such portion of the
Principal Balance in multiples of $100,000.00 (with a minimum of $100,000.00),
upon not less than ten (10) business days' prior written irrevocable notice to
the Bank specifying the intended date of prepayment, and the amount to be
prepaid, and such prepayment is accompanied by payment of accrued interest to
and including the date of prepayment and other sums then due and payable
pursuant to the provisions of this Agreement or the other Loan Documents. The
Borrower shall pay to the Bank contemporaneously with any such voluntary
prepayment of the Principal Balance which bears interest at the Fixed Rate a
Prepayment Premium (as hereinafter defined). Any payment of the then outstanding
Principal Balance after the Bank shall have declared the Principal Balance
immediately due and payable, or after the Bank shall have commenced an action or
proceeding as a result of an Event of Default, shall be deemed a voluntary
prepayment for the purposes of this paragraph and a Prepayment Premium
calculated pursuant to the provisions of this paragraph shall be payable with
respect thereto based upon the interest rate specified herein applicable to the
then outstanding principal indebtedness immediately prior to such default,
declaration or commencement. The portion of the Principal Balance specified in
any such irrevocable notice of prepayment shall, notwithstanding anything to the
contrary contained in this Agreement, be absolutely and unconditionally due and
payable on the date specified in such notice.
(b) If any portion of the Principal Balance of a Term Loan is
bearing interest at a LIBOR Rate or rates, then subject to the following
provisions of this paragraph, the Borrower shall have the right to prepay such
Principal Balance (or any portion thereof) in whole, or in part, upon not less
than ten (10) Business Days' prior written irrevocable notice to the Bank
specifying the intended date of prepayment, which date of prepayment shall not
be more than fifteen (15) Business Days days after the date of such notice, and
the amount to be prepaid and upon payment of all interest and other sums then
due and payable pursuant to the provisions of this Agreement and the Loan
Documents. The portion of the Principal Balance specified in any such
irrevocable notice of prepayment shall, notwithstanding anything to the contrary
contained in this Agreement or the Loan Documents, be absolutely and
unconditionally due and payable on the date specified in such notice. Any
partial prepayment of the Principal Balance in accordance with the provisions of
this Paragraph 2.5(b) shall be in a minimum amount of and in multiples of at
least $100,000, and no partial prepayment of the Principal Balance shall be
permitted in accordance with the provisions of this paragraph if such partial
prepayment would reduce the Principal Balance below $100,000. The Bank shall not
be obligated to accept any prepayment of the Principal Balance bearing interest
at a LIBOR Rate or rates unless it is accompanied by the prepayment premium, if
any, due in connection therewith as calculated pursuant to the provisions of
this Paragraph 2.5(b), it being understood and agreed that no LIBOR Rate
Prepayment Premium (as hereinafter defined) payable under this paragraph shall
in any event or under any circumstance be deemed or construed to be a penalty.
No LIBOR Rate Prepayment Premium shall be payable if the portion of the
Principal Balance being prepaid hereunder occurs on the Roll Over Date
pertaining to the portion of the Principal Balance of the Term Note being
prepaid. If any particular portion of the Principal Balance being prepaid is
bearing interest at a LIBOR Rate and such prepayment does not occur on the Roll
Over Date pertaining to the portion of the Principal Balance of the Term Note
being prepaid, the Borrower shall pay to the Bank contemporaneously with any
such prepayment a prepayment premium (the "LIBOR Rate Prepayment Premium") equal
to the portion of the Principal Balance being prepaid, multiplied by a per annum
interest rate equal to the difference between the then applicable Base LIBOR
Rate and the 360-day equivalent interest yield, as adjusted to reflect interest
payments on a monthly basis (the "Reinvestment Rate"), on any U.S. Government
Treasury obligations selected by the Bank, in its sole and absolute discretion,
in an aggregate amount comparable to the portion of the Principal Balance being
prepaid, and with maturities comparable to the next occurring Roll Over Date
applicable to the portion of the Principal Balance being prepaid, calculated
over a period of time from and including the date of prepayment to, but not
including, such next occurring Roll Over Date. If the Base LIBOR Rate applicable
to the portion of the Principal Balance being prepaid is equal to or less than
the Reinvestment Rate, no LIBOR Rate Prepayment Premium, nor any rebate, shall
be due. If a portion of the Principal Balance is bearing interest at a LIBOR
Rate or Rates and a portion of the Principal Balance is bearing interest at the
Floating Rate in accordance with the provisions of this Agreement on the date of
a partial prepayment of the Principal Balance in accordance with the provisions
of this Paragraph 2.5(b), such partial prepayment shall be applied to the
respective portions of the Principal Balance bearing interest at a LIBOR Rate
and the Floating Rate or Rates in such order and manner so as to minimize the
LIBOR Rate Prepayment Premium due with respect thereto as calculated pursuant to
the provisions of this paragraph.
The Bank shall, at the request of the Borrower, deliver to the Borrower
a statement setting forth the amount and basis of determination of the LIBOR
Rate Prepayment Premium, if any, due in connection with a prepayment of any
portion of the Principal Balance of a Term Note bearing interest at a LIBOR Rate
or rates in accordance with the provisions of this paragraph, it being agreed
that:
(i) the calculation of such LIBOR Rate Prepayment
Premium may be based on any U.S. Government Treasury obligations selected by the
Bank, in its sole and absolute discretion,
(ii) no Obligee shall be obligated or required to
have actually reinvested the prepaid portion of the Principal Balance of the
Term Note in any such U.S. Government Treasury obligations as a condition
precedent to the Borrower being obligated to pay a LIBOR Rate Prepayment Premium
calculated as aforesaid, and
(iii) the Borrower shall not have the right to
question the correctness of any such statement or the method of calculation set
forth therein in the absence of manifest error.
The Borrower shall, upon receipt of such statement and contemporaneously with
any such prepayment of the Principal Balance of the Term Note bearing interest
at such a LIBOR Rate, remit to the Bank the LIBOR Rate Prepayment Premium, if
any, due in connection therewith, as calculated pursuant to the provisions of
this paragraph.
Any payment of the Principal Balance after the Bank shall have declared
a Term Loan immediately due and payable in accordance with the provisions of
this Agreement or the other Loan Documents, or after the Bank shall have
commenced an action as a result of an Event of Default under this Agreement or
the other Loan Documents, shall be deemed to be a voluntary prepayment for all
purposes of this paragraph and a LIBOR Rate Prepayment Premium calculated
pursuant to the provisions of this paragraph shall be payable with respect
thereto based upon the Base LIBOR Rate or Rates applicable to the Principal
Balance immediately prior to such default, declaration or commencement.
Notwithstanding the foregoing, however, it is understood and agreed that the
Bank shall not be obligated to accept a prepayment, in whole or in part bearing
interest at a LIBOR Rate (or rates), of the Principal Balance in accordance with
the provisions of this paragraph if any default shall have occurred and shall be
continuing under any Term Note, this Agreement or the other Loan Documents
unless the Bank shall otherwise agree to the contrary in its sole and absolute
discretion. The provisions of this paragraph shall be applicable to any
prepayment of the Principal Balance in whole or in part, by acceleration or
otherwise, it being agreed that any payment of the Principal Balance shall be
deemed to be a voluntary prepayment for the purposes of this paragraph and a
LIBOR Rate Prepayment Premium calculated pursuant to the provisions of this
paragraph shall be payable with respect thereto.
2.6 Use of Proceeds. The proceeds of Term Loan A were used to refinance
the Borrower's existing floating rate term debt and to finance the purchase of
ethylene oxide drums, construction of a drumming station and ancillary expenses.
The proceeds of Term Loan B shall be used to replace short term refinancing of
existing debt of Borrower. No part of the proceeds of the Loans will be used,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, (a) to purchase or to carry margin stock or to extend credit to
others for the purpose of purchasing or carrying margin stock, or to refund
indebtedness originally incurred for such purpose, or (b) for any purpose which
violates or is inconsistent with the provisions of the Regulations G, T, U, or X
of the Board of Governors of the Federal Reserve System.
2.7 Capital Requirements. If after the date of this Agreement the Bank
shall have determined that:
(a) the applicability of any law, rule, regulation or
guideline adopted or arising out of the July 1988 report of the Basle Committee
on Banking Regulations and Supervisory Practices entitled "International
Convergence of Capital Measurement and Capital Standards,"
(b) the adoption, after the date of the Term Notes, of any
other law, rule, regulation or guideline regarding capital adequacy,
(c) any change in any of the foregoing or in the
interpretation or administration of any of the foregoing by any domestic or
foreign governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof, or
(d) the compliance by the Bank with any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has, or would have, the effect of
reducing the rate of return on the Bank's capital, as a consequence of having
made the Loans or any portion thereof, or of having any interest therein, or
under this Agreement or the other Loan Documents, to a level below that which
the Bank could have achieved but for such adoption, change or compliance (taking
into consideration the Bank's policies with respect to capital adequacy) by an
amount deemed by the Bank to be material, then, from time to time, the Borrower
shall pay to the Bank such additional amount or amounts as will compensate the
Bank for such reduction. Any amount or amounts payable by the Borrower to the
Bank in accordance with the provisions of this Section 2.7 shall be paid by the
Borrower to the Bank within ten (10) days of receipt by the Borrower from the
Bank of a statement setting forth the amount or amounts due and the basis for
the determination from time to time of such amount or amounts, which statement
shall be conclusive and binding upon the Borrower absent manifest error.
2.8 Indemnity.
(a) Anything in this Agreement or the other Loan Documents to
the contrary notwithstanding, the Borrower shall indemnify and hold the Bank
harmless and defend the Bank at the Borrower's sole cost and expense against any
loss or liability, cost or expense (including, without limitation, reasonable
attorneys' fees and disbursements of the Bank's counsel, whether in-house staff,
retained firms or otherwise), and all claims, actions, procedures and suits
arising out of or in connection with:
(i) any ongoing matters arising out of this
Agreement, the other Loan Documents or the transaction contemplated hereby or
thereby, including, but not limited to, all costs of appraisal or reappraisal of
all or any portion of any collateral for the Loans;
(ii) any amendment to, or restructuring of, the
Loans, this Agreement or the other Loan Documents,
(iii) any and all lawful action that may be taken by
the Bank in connection with the enforcement of the provisions of this Agreement
or any of the other Loan Documents, whether or not suit is filed in connection
with the same, or in connection with the Borrower, any guarantor of all or any
portion of the Loans and/or any partner, joint venturer or shareholder thereof
becoming a subject of a voluntary or involuntary federal or state bankruptcy,
insolvency or similar proceeding, and
(iv) any liability to brokers, finders or similar
persons and/or under any applicable securities or blue sky laws.
All sums expended by the Bank on account of any of the foregoing shall be
reimbursable on demand, and until reimbursed by the Borrower pursuant hereto,
shall be deemed additional principal evidenced hereby and shall bear interest at
the Default Rate herein set forth. The obligations of the Borrower under this
paragraph shall, notwithstanding any exculpatory or other provisions of any
nature whatsoever which may be set forth herein, or the other Loan Documents,
constitute the personal recourse undertakings, obligations and liabilities of
the Borrower.
(b) In addition, the other provisions herein contained, the
Borrower shall indemnify the Bank against any loss or expense that the Bank may
sustain or incur as a consequence of any failure by the Borrower to take down
all or any portion of the Loans on the date the Borrower requested that the Loan
be advanced or as a consequence of any default by the Borrower in the payment of
any portion of the Principal Balance of the Term Note bearing interest at a
LIBOR Rate or the Fixed Rate, or any part thereof or interest accrued thereon at
a LIBOR Rate or the Fixed Rate, as and when due and payable, or the occurrence
of any default or Event of Default under this Agreement or other Loan Documents,
including, but not limited to, any loss or expense sustained or incurred by any
such Obligee in liquidating or reemploying deposits from third parties acquired
to effect or maintain a LIBOR Rate or a Fixed Rate with respect to all or any
portion of the Principal Balance hereof. The Bank shall provide to the Borrower
a statement explaining the amount of any such loss or expense, which statement
shall be conclusive and binding upon the Borrower absent manifest error.
2.9 Increased Costs. The Borrower recognizes that the cost to the Bank
of making or maintaining LIBOR Rates with respect to the Principal Balance, or
any portion thereof, may fluctuate, and the Borrower agrees to pay the Bank
within ten (10) days after demand by the Bank an additional amount or amounts as
the Bank shall reasonably determine will compensate the Bank for additional
costs incurred by each such Obligee in maintaining LIBOR Rates on the Principal
Balance or any portion thereof as a result of:
(i) the imposition after the date of this Agreement of, or
changes after the date of this Agreement in, the reserve requirements
promulgated by the Board of Governors of the Federal Reserve System of the
United States including, but not limited to, any reserve on Eurocurrency
Liabilities as defined in Regulation D of the Board of Governors of the Federal
Reserve System of the United States at the ratios provided in such Regulation
from time to time, it being agreed that any portion of the Principal Balance
hereof bearing interest at LIBOR Rates from time to time in accordance with the
provisions of this Agreement shall be deemed to constitute Eurocurrency
Liabilities, as defined by such Regulation, and it being further agreed that
such Eurocurrency Liabilities shall be deemed to be subject to such reserve
requirements without benefit of, or credit for, prorations, exceptions or
offsets that may be available to the Bank from time to time under such
Regulations, and irrespective of whether the Bank actually maintains all or any
portion of such reserve; or
(ii) any change, after the date of this Agreement, in
applicable law, rule or regulation, or in the interpretation or administration
thereof, by any domestic or foreign governmental authority charged with the
interpretation or administration thereof (whether or not having the force of
law) or by any domestic or foreign court, changing the basis of taxation of any
payments to the Bank under this Agreement or the other Loan Documents (other
than taxes imposed on all or any portion of the overall net income of the Bank
by any state or country or by any political subdivision or taxing authority), or
imposing, modifying or applying any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, credit
extended by, or any other acquisition of funds for loans by the Bank or imposing
on the Bank, or on the London Interbank Market, any other condition affecting
the Term Note or the other Loan Documents or the portion of the Principal
Balance of the Term Note bearing interest at LIBOR Rates so as to increase the
cost to the Bank of making or maintaining a LIBOR Rate with respect to the
Principal Balance hereof or any portion thereof or to reduce the amount of any
sum received or receivable by the Bank under this Agreement or the other Loan
Documents (whether of principal, interest or otherwise), by an amount deemed by
the Bank in good faith to be material, but without duplication for payments
required under subparagraph (i) above.
Any amount or amounts payable by the Borrower to the Bank pursuant to
subparagraphs (i) or (ii) of this Section 2.9 shall be paid by the Borrower to
the Bank within ten (10) days of receipt by the Borrower from the Bank of a
statement setting forth the amount or amounts due and the basis for the
determination from time to time of such amount or amounts, which statement shall
be conclusive and binding upon the Borrower absent manifest error. Failure on
the part of the Bank to demand compensation for any increased costs in any
Interest Period shall not constitute a waiver of the Bank's right to demand
compensation for any increased costs incurred during any such LIBOR Rate
Interest Period or in any other subsequent or prior LIBOR Rate Interest Period.
2.10 Fees. The Borrower acknowledges and confirms that the Bank may
impose certain administrative processing and/or commitment fees in connection
with any extension, renewal, modification, amendment, termination or the
administration of its loans required due to changes in governmental policy (the
occurrence of any of the above hereinafter called an "Event"). The Borrower
hereby acknowledges and agrees to pay, immediately, with or without demand, all
such fees (as the same may be increased or decreased from time to time), and any
additional reasonable fees of a similar type or nature which may be imposed by
the Bank from time to time, upon the occurrence of any Event.
2.11 Stub Date. If the last LIBOR Rate Interest Period during the term
of a Term Loan which fully complies with the definitions and requirements set
forth herein with respect to a particular portion of the Principal Balance shall
end on a date prior to the applicable Term Loan Maturity Date (the "Stub Date"),
then, if the period from and including the Stub Date to and including such Term
Loan Maturity Date shall be equal to: (i) less than on month, the entire amount
of such portion of the Principal Balance shall, for the remainder of the term,
at the election of the Bank, either bear interest at the Floating Rate or at a
one-month LIBOR Rate determined in accordance with the provisions of this
Agreement, it being agreed that the one-month LIBOR Rate applicable to such
period shall be determined as if it were for a LIBOR Rate Interest Period of one
month, or (ii) more than one month, the outstanding Principal Balance shall bear
interest at an available LIBOR Rate chosen by the Borrower in accordance with
the provisions of this Agreement for a period extending from the Stub Date to
the last Re-Set Date to occur prior to such Term Loan Maturity Date and
thereafter shall bear interest in accordance with (i) above. The foregoing
notwithstanding, in no event shall the Principal Balance bearing interest at any
one LIBOR Rate be less than $500,000.00. Any sums less than $500,000.00 shall
bear interest at the Floating Rate.
2.12 LIBOR Rate Unavailability. In the event, and on each occasion,
that on the day two (2) Working Days prior to the commencement of a particular
LIBOR Rate Interest Period, the Bank shall have determined in good faith (which
determination shall be conclusive and binding upon the Borrower) that U.S.
dollar deposits, in an amount approximately equal to the portion of the
Principal Balance which is to bear interest at a particular LIBOR Rate during
such particular LIBOR Rate Interest Period in accordance with the provisions of
this Agreement, are not generally available at such time in the London Interbank
Market, or reasonable means do not exist for ascertaining a LIBOR Rate for such
particular LIBOR Rate Interest Period, the Bank shall so notify the Borrower,
and the interest rate applicable to the portion of the Principal Balance with
respect to which such LIBOR Rate was to pertain shall automatically convert to
the Floating Rate as of the impending Roll Over Date, it being agreed that the
Floating Rate shall remain in effect thereafter with respect to such portion of
the Principal Balance unless and until the Bank shall have determined in good
faith (which determination shall be conclusive and binding upon the Borrower)
that the aforesaid circumstances no longer exist, whereupon the interest rate
applicable to such portion of the Principal Balance shall be converted back to a
LIBOR Rate determined in the manner hereinabove set forth in this Agreement
effective as of the first Re-Set Date which commences ten (10) Working Days or
more after such good faith determination by the Bank.
2.13 LIBOR Rate Determinations. Each determination of the LIBOR Rate,
the Base LIBOR Rate and the Fixed LIBOR Rate applicable to a particular LIBOR
Rate Interest Period shall be made by the Bank and shall be conclusive and
binding upon the Borrower absent manifest error. Interest at the applicable
LIBOR Rate from time to time shall be calculated for the actual number of days
elapsed on the basis of a 360-day year.
2.14 LIBOR Rate Changes of Law. If any change in any law or regulation
or in the interpretation thereof by any governmental authority charged with the
administration or interpretation thereof shall make it unlawful for the Bank to
make or maintain a LIBOR Rate with respect to the Principal Balance or any
portion thereof or to fund the Principal Balance or any portion thereof at a
LIBOR Rate in the London Interbank Market or to give effect to its obligations
as contemplated by this Agreement, then, upon notice by the Bank to the Borrower
in accordance with the notice provisions set forth herein, the interest rate
applicable to such portion of the Principal Balance shall be automatically
converted to the Floating Rate, it being agreed that any notice given by the
Bank to the Borrower pursuant to this sentence shall, such change in law,
regulation or interpretation permitting, be effective in so far as it pertains
to any particular portion of the Principal Balance bearing interest at a
particular LIBOR Rate on the impending Roll Over Date pertaining to such
particular portion of the Principal Balance, or shall, such change not so
permitting, be effective immediately upon being given by the Bank to the
Borrower, and that the Floating Rate shall thereafter remain in effect with
respect to such portion of the Principal Balance unless and until the Bank shall
have determined in good faith (which determination shall be conclusive and
binding upon the Borrower) that the aforesaid circumstances no longer exist,
whereupon the interest rate applicable to such portion of the Principal Balance
shall be converted to a LIBOR Rate determined in the manner hereinabove set
forth in this Agreement effective as of the first Re-Set Date which commences
ten (10) Working Days or more after such good faith determination by the Bank.
If the interest rate applicable to any portion of the Principal Balance is
converted from a LIBOR Rate to the Floating Rate on a date other than a Roll
Over Date in accordance with the provisions of the preceding sentence, the
Borrower shall pay to the Bank on demand an amount equal to the LIBOR Rate
Prepayment Premium, if any, which would have been due pursuant to the provisions
of this Agreement hereinafter set forth if the portion of the Principal Balance
bearing interest at such LIBOR Rate was prepaid in full on the date of such
conversion.
2.15 Late Payments. If any installment of principal, interest,
additional interest or other sum payable under any Note is not paid when due,
the Borrower shall pay to the Bank upon demand, in addition to any other amounts
which may be due or imposed hereunder, an amount equal to the Floating Rate plus
3% per annum multipled by (i) the amount of such payment overdue times (ii) the
number of days such payment is past due.
SECTION 3. REPRESENTATIONS AND WARRANTIES
In order to induce the Bank to enter into this Agreement and to make
the financial accommodations herein provided for, the Borrower hereby covenants,
represents and warrants to the Bank that:
3.1 Financial Condition. The consolidated balance sheet of the Borrower
as of December 31, 1997, and the related consolidated statements of operations
and retained earnings and cash flows for the fiscal year ended on such date,
prepared by the Borrower, and audited by KPMG Peat, Marwick, L.L.P., such
statements have heretofore been furnished to the Bank, are complete and correct
and present fairly the financial condition of the Borrower as at such date, and
the results of its operations and changes in financial position for the fiscal
year then ended. Such certified financial statements, including schedules and
notes thereto, have been prepared in accordance with generally accepted
accounting principles. The Borrower has no material contingent obligations,
contingent liabilities or liabilities for taxes, long-term leases or unusual
forward or long-term commitments, which are not reflected in the foregoing
certified statements or in the notes thereto. Since the date of the
aforementioned financial statements, there has been no material adverse change
in the business operations, assets or financial or other condition of the
Borrower.
3.2 Corporate Existence: Compliance with Law. The Borrower, (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (b) has the corporate power and authority and
the legal right to own and operate its property, and to conduct the business in
which it is currently engaged, (c) is duly qualified as a foreign corporation
and in good standing under the laws of each jurisdiction where its ownership or
operation of property or the conduct of its business require such qualification,
and (d) is in compliance with all Requirements of Law; except to the extent that
the failure to so qualify as a foreign corporation as required by clause (c) of
this Section 3.2 or to comply with all Requirements of Law as required by clause
(d) of this Section 3.2 could not, in the aggregate, have a material adverse
effect on the business, operations, property or financial or other condition of
any such Person, and could not materially adversely affect the ability of (i)
the Borrower to perform its obligations under this Agreement, the Notes and its
Security Agreement.
3.3 Obligations. The Borrower has the corporate power and authority and
the legal right to make, execute, deliver and perform its obligations under this
Agreement, its Security Agreement and the Notes, and to borrow hereunder and has
taken all necessary corporate action to authorize the borrowings on the terms
and conditions of this Agreement, its Security Agreement and the Notes and to
authorize the execution, delivery and performance of this Agreement, its
Security Agreement and the Notes. No consent or authorization of, filing with,
or other act by or in respect of any other Person (including stockholders and
creditors of such Borrower) or any Governmental Authority, is required in
connection with the borrowings hereunder or with the execution, delivery,
performance, validity or enforceability of this Agreement, its Security
Agreement or any Note. This Agreement, its Security Agreement and the Notes will
be duly executed and delivered on behalf of the Borrower and this Agreement, its
Security Agreement and the Notes, when executed and delivered, will each
constitute a legal, valid and binding obligation of the Borrower enforceable
against the Borrower in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally.
3.4 No Legal Bar. The execution, delivery and performance of this
Agreement, the Security Agreement and the Notes and the borrowings hereunder and
the use of the proceeds thereof by the Borrower will not violate any Requirement
of Law or any Contractual Obligation of the Borrower, and will not result in, or
require, the creation or imposition of any Lien on any of its properties or
revenues pursuant to any Requirement of Law or Contractual Obligation except
those in favor of the Bank as provided herein.
3.5 No Litigation. No litigation, investigation or proceeding of or
before any arbitrator or Governmental Authority is pending by or against any
Specified Person or against any of their properties or revenues (a) with respect
to this Agreement, any Security Agreement, any Note or any of the transactions
contemplated hereby or thereby, or (b) which if adversely determined, would have
an adverse effect on the business, operations, property or financial or other
condition of the Borrower.
3.6 No Default. No Specified Person is in default under or with respect
to any Contractual Obligation in any respect which could be materially adverse
to the business, operations, property or financial or other condition of the
Borrower or which could materially and adversely affect the ability of the
Borrower to perform its obligations under this Agreement, its Security Agreement
or any Note. No Default or Event of Default has occurred and is continuing.
3.7 No Burdensome Restrictions. No Contractual Obligation of any
Specified Person and no Requirement of Law materially adversely affects, or
insofar as the Borrower may reasonably foresee may so affect, the business,
operations, property or financial or other condition of any such Specified
Person.
3.8 Taxes. The Borrower has filed or caused to be filed all tax returns
which to the knowledge of the Borrower are required to be filed, and have paid
all taxes shown to be due and payable on said returns or on any assessments made
against them or any of their property.
3.9 Federal Regulations. The Borrower is not engaged nor will it
engage, principally or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying" any "margin
stock" within the respective meanings of each of the quoted terms under
Regulation U of the Board of Governors of the Federal Reserve System as now and
from time to time hereafter in effect. No part of the proceeds of any Loans
hereunder will be used for "purchasing" or "carrying" "margin stock" as so
defined or for any purpose which violates, or which would be inconsistent with,
the provisions of the Regulations of such Board of Governors.
3.10 Environmental Matters. Except as specifically set forth and as
provided in Schedule 3.10
hereto:
(a) none of the Real Property contains, or has previously
contained, any hazardous or toxic waste or substances or underground storage
tanks.
(b) The Real Property is in compliance with all applicable
federal, state and local environmental standards and requirements affecting such
Real Property, and there are no environmental conditions which could interfere
with the continued use of the Real Property.
(c) The Borrower has not received any notices of violations or
advisory action by regulatory agencies regarding environmental control matters
or permit compliance.
(d) Hazardous waste has not been transferred from any of the
Real Property to any other locations which is not in compliance with all
applicable environmental laws, regulations or permit requirements.
(e) With respect to the Real Property, there are no
proceedings, governmental administrative actions or judicial proceedings pending
or, to the best knowledge of the Borrower, contemplated under any federal, state
or local law regulating the discharge of hazardous or toxic materials or
substances into the environment, to which the Borrower is named as a party.
3.11 Year 2000. Any reprogramming required to permit the proper
functioning, in and following the year 2000, of (a) the Borrower's computer
systems and (b) equipment containing embedded microchips (including systems and
equipment supplied by others or with which Borrower's systems interface) and the
testing of all such systems and equipment, as so reprogrammed, will be completed
by June 1, 1999. The cost to the Borrower of such reprogramming and testing and
of the reasonably foreseeable consequences of year 2000 to the Borrower
(including, without limitation, reprogramming errors and the failure of others'
systems or equipment) will not result in a Default or a Material Adverse Effect.
Except for such of the reprogramming referred to in the preceding sentence as
may be necessary, the computer and management information systems of the
Borrower are and, with ordinary course upgrading and maintenance, will continue
for the term of this Agreement to be, sufficient to permit the Borrower to
conduct its business without Material Adverse Effect.
3.12 Subsidiaries. The Borrower has no active Subsidiaries.
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions of the Term Loans.
The obligation of the Bank to make the Term Loans to the Borrower
hereunder is subject satisfaction of the following conditions precedent:
(a) Note. The Bank shall have received the Term Notes
conforming to the requirements hereof and duly executed by the Borrower.
(b) Security Agreements. The Bank shall have received a
Security Agreement from the Borrower in form and substance satisfactory to the
Bank, together with UCC-l financing statements executed by such entity in favor
of the Bank.
(c) Certificates and Resolutions. The Bank shall have received
(i) copies of the resolutions of the board of directors of the Borrower
authorizing the execution, delivery and performance of this Agreement, the
Security Agreement referred to in Paragraph 9(b) and the Notes certified
respectively by the Secretary or an Assistant Secretary of such corporation; and
(ii) a certificate of the Secretary or an Assistant Secretary of the Borrower
certifying the names and true signatures of the officers of such corporation
authorized to sign any and all documents to be delivered by such corporation or
as required or contemplated hereunder.
(d) Patents and Trademarks. The Bank shall have received a
list of all patents and trademarks held by the Borrower and the same shall be
free of any security interests.
(e) Origination Fee. The Bank shall have received the sum of
$10,000 as an origination fee, which fee shall be deemed earned whether or not
Term Loan B is made hereunder.
(f) Insurance Certificates. The Bank shall have received
certificates of insurance naming the Bank as loss payee on all insurance
policies required hereunder.
(g) Additional Matters. All other documents and legal matters
in connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to the Bank and its counsel.
SECTION 5. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as any Term Note remains
outstanding and unpaid, or any other amount is owing to the Bank hereunder, the
Borrower will and with respect to the agreements set forth in Sections 5.1
through 5.5 hereof will cause each Specified Person as applicable to:
5.1 Corporate Existence and Qualification. Take the necessary steps to
preserve its corporate existence and its right to conduct business in all states
in which the nature of its business requires qualification to do business. In
the event of dispute between the Borrower and the Bank as to when qualification
is necessary, the decision of the Bank shall control.
5.2 Financial Information and Compliance Certificates.
(a) Keep its books of account in accordance with good
accounting practices and furnish to the Bank within 90 days after the last day
of each of its fiscal years, the consolidated and consolidating financial
statements and balance sheets of the Borrower and its Subsidiaries (and to the
extent not furnished therewith, like consolidated and consolidating statements
of each Corporate Guarantor and its Subsidiaries) as at such last day of the
fiscal year and statements of income and retained earnings and cash flows for
such fiscal year each prepared in accordance with generally accepted accounting
principles consistently applied and certified by a firm of independent certified
public accountants satisfactory to the Bank, together with such certified public
accountant's management letter as and when issued; and within 45 days after the
close of each of the first three quarters of each fiscal year consolidated and
consolidating financial statements, balance sheets, statements of income and
retained earnings and cash flows of such Borrower and its Subsidiaries (and to
the extent not furnished therewith, like consolidated and consolidating
statements of each Corporate Guarantor and its Subsidiaries) as of the last day
of and for such quarter and for the period of the fiscal year ended as of the
close of the particular quarter, all such quarterly statements to be unaudited
and in reasonable detail, and certified by the chief financial or accounting
officer of the Borrower as having been prepared in accordance with GAAP (subject
to year-end adjustments) and in comparative form for the corresponding figures
for the comparable period for the preceding fiscal year. The Borrower will also,
with reasonable promptness, furnish such other data as may be reasonably
requested by the Bank and will at all times and from time to time permit the
Bank by or through any of its officers, agents, employees, attorneys or
accountants to inspect and make extracts from such Borrower's books and records.
(b) At the same time as it delivers the financial statements
called for by Paragraph 5.2(a), deliver certificate of the president and the
chief financial or accounting officer of the Borrower evidencing a computation
of compliance with the provisions of Section 6 hereof for each quarter and a
certificate of the auditor for each fiscal year end statement and stating that
in each case except as disclosed in such certificate, the person making such
certificate has no knowledge or any Default or Event of Default their delivery
of annual certified financial statements. The Borrower's certified public
accountants shall also deliver such a certificate, which shall be addressed to
the Borrower and the Bank for the fiscal year end calculations.
(c) Within five days after any officer of the Borrower obtains
knowledge of any Default, if such Default is then continuing, Borrower shall
furnish to the Bank a certificate of the chief financial or accounting officer
of the Borrower setting forth the details thereof and the action which the
Borrower is taking or proposes to take with respect thereto.
(d) As soon as practical, all reports submitted to
governmental agencies and stockholders, except as prepared in the normal course
of business and that would not result in an adverse action to be taken by any
such agencies, and all such other information as the Bank shall reasonably
request.
(e) All reports and forms filed with respect to all pension or
other employee benefit plans under ERISA, except as filed in the normal course
of business and that would not result in an adverse action to be taken by ERISA,
and details related to information of a reportable ERISA event; and
(f) Such other information regarding the operations, business
affairs and financial condition as the Bank may reasonably request.
5.3 Insurance. Maintain insurance with responsible and reputable
insurance companies or associations in such amounts and covering such risks as
is usually carried by companies engaged in similar businesses and owning similar
properties in the same general areas in which the Borrower operates and naming
the Bank as loss payee.
5.4 Preservation of Properties: Compliance with Law. Maintain and
preserve all of its properties which are used or which are useful in the conduct
of its business in good working order and condition, ordinary wear and tear
excepted and comply with all Requirements of Law .
5.5 Taxes. Duly pay and discharge all taxes or other claims which might
become a lien upon any of its property except to the extent that any thereof are
being in good faith appropriately contested with adequate reserves provided
therefor.
5.6 Indemnity (Environmental Matters). With respect to the Real
Property, (a) indemnify the Bank against any liability, loss, cost, damage, or
expense (including, without limitation, reasonable attorneys' fees) arising from
(i) the imposition or recording of a lien by any local, state, or federal
government or governmental agency or authority pursuant to any Environmental
Laws; (ii) claims of any private parties regarding violations of Environmental
Laws; and (iii) costs and expenses (including, without limitation, reasonable
attorneys' fees and fees incidental to the securing of repayment of such costs
and expenses) incurred by any Specified Person or the Bank in connection with
compliance by any Specified Person or the Bank with any statute, regulation or
order issued pursuant to any Environmental Laws by any local, state or federal
government or governmental agency or authority, (b) at any time the Borrower has
knowledge that it has violated, has incurred liability under or any of the Real
Property has any lien or exposure of lien under any Environmental Law, the
Borrower shall furnish to the Bank a certificate as to the action the Borrower
is taking or proposes to take with respect thereto, which action shall be
reasonably satisfactory to the Bank in all respects, and (c) at the request of
the Bank, which request will not be made on more than one occasion during any
twelve month period, the Borrower shall undertake, at its sole expense, any
environmental investigation and examination of the Real Property which the Bank
may require, including without limitation an environmental investigation and
examination by a consultant satisfactory to the Bank.
5.7 Litigation. Promptly notify the Bank of any material adverse
litigation, administrative proceedings, investigation, audit, business
development or change in financial condition.
5.8 Inspection. Allow the Bank to inspect the Borrower's and Corporate
Guarantors' properties and/or books of account.
5.9 Corporate Guarantors. Cause any newly formed or acquired Subsidiary
of the Borrower to become a Corporate Guarantor, which subsidiary shall then
execute and deliver to the Bank the Guaranty and shall be required to comply
with all terms and conditions as herein required of the Borrower.
5.10 ERISA. Maintain compliance with ERISA.
5.11 Requirements of Law. Maintain compliance in all material respects
with all Federal, State and local laws, rules and regulations, including
environmental laws, rules and regulations.
SECTION 6. FINANCIAL COVENANTS
The Borrower hereby agrees that, so long as any Term Note remains
outstanding and unpaid, or any other amount is owing to the Bank hereunder, the
Borrower and its Subsidiaries on a consolidated basis will not:
6.1 Dividends. Declare cash dividends in excess of 5% of each fiscal
year's net income before taxes; provided that no Event of Default exists at the
time of the payment of such dividend or would be created by such payment.
6.2 Losses. Permit any fiscal year losses or losses for any two (2)
consecutive fiscal quarters.
6.3 Consolidated Working Capital. Permit Consolidated Working Capital
(excluding prepaid expenses) to be less than $1,000,000 at any time.
6.4 Debt to Worth Ratio. Permit the ratio of Consolidated Total
Unsubordinated Liabilities to Consolidated Tangible Net Worth (including
Approved Subordinated Debt) to be greater than 1.00 to 1.00 at any time.
6.5 Debt Service Coverage. Permit the Debt Service Coverage to be less
than 1.25 to 1.00 at the end of any fiscal quarter. For the purposes of this
covenant, the term "Debt Service Coverage" shall be defined as the sum of Net
Income Before Taxes and Interest plus Depreciation and Amortization minus
Unfunded Capital Expenditures divided by the sum of the Current Portion of Long
Term Debt plus Interest and Dividends and shall be calculated at the end of any
fiscal quarter for the four (4) quarters then ended.
For the purposes of the above Financial Covenants, each shall be
calculated using the Bank's standard formulas. Any capitalized terms set forth
above not defined shall have the meaning ascribed thereto using generally
accepted accounting principles.
SECTION 7. NEGATIVE COVENANTS.
The Borrower hereby agrees that, so long as any Term Note remains
outstanding and unpaid, or any other amount is owing to the Bank hereunder it
will not, nor will it permit any of its Subsidiaries to:
7.1 Indebtedness for Borrowed Money. Incur, or permit to exist, any
indebtedness for borrowed money except (i) indebtedness incurred hereunder and
under any other loans made by the Bank in its discretion to the Borrower or any
Subsidiary or Corporate Guarantor, (ii) indebtedness existing on the date hereof
and reflected in the financial statements referred to in Section 3.1 hereof;
(iii) purchase money indebtedness incurred in the acquisition of equipment not
to exceed 80% of the purchase price and $500,000 on an annual basis, (iv)
indebtedness subordinated on terms and conditions satisfactory to and with prior
written consent of the Bank, (v) trade payables, advances or progress payments
under contracts as are customarily incurred in the normal course of business,
(vi) indebtedness incurred for the financing of insurance premiums provided such
indebtedness does not exceed $500,000 in the aggregate, and (vii) contingent
liabilities arising from interest rate xxxxxx.
7.2 Mergers, Acquisitions and Sales of Assets. Enter into any merger or
consolidation in which the Borrower is not the surviving corporation or
liquidate, windup or dissolve itself or sell, transfer or lease or otherwise
dispose of all or any substantial part of its assets (other than sales of
inventory and obsolescent equipment in the ordinary course of business) or
acquire by purchase or otherwise the business or assets of, or stock of, another
business entity for a consideration in excess of $250,000; except that any
Subsidiary may merge into or consolidate with any other Subsidiary which is
wholly-owned by the Borrower and any Subsidiary which is wholly-owned by the
Borrower may merge with or consolidate into the Borrower.
7.3 Loans; Investments. Lend or advance money, credit or property to or
invest in (by capital contribution, loan, purchase or otherwise) any firm,
corporation, or other Person except investments in (i) United States Government
obligations, certificates of deposit of any banking institution with combined
capital and surplus of at least $1,000,000,000 which matures no later than one
(1) year from the date of investment, (ii) investments in ready marketable
securities, direct obligations of the United States of America or obligations
guaranteed by the United States of America which mature no later than one (1)
year from the date of investment, (iii) prime (A-1, P-1) rated commercial paper
and (iv) credit advanced in the normal course of business.
7.4 Liens. Create, assume or permit to exist, any Lien on any of its
property or assets now owned or hereafter acquired except (i) Liens in favor of
the Bank; (ii) other Liens incidental to the conduct of its business or the
ownership of its property and assets which were not incurred in connection with
the borrowing of money or the obtaining of advances or credit and which do not
materially impair the use thereof in the operation of its business; (iii) Liens
for taxes or other governmental charges which are not delinquent or which are
being contested in good faith and for which a reserve shall have been
established in accordance with generally accepted accounting principles; (iv)
purchase money Liens granted to secure the unpaid purchase price of any fixed
assets purchased within the limitations of Section 7.1 above; (v) existing liens
scheduled and not to be renewed, extended or increased; and (vi) statutory liens
for deposits under Social Security and similar laws.
7.5 Contingent Liabilities. Assume, endorse, be or become liable for or
guarantee the obligations of any Person excluding however, the endorsement of
negotiable instruments for deposit or collection in the ordinary course of
business.
7.6 Dividends. Declare or pay any dividends in contradiction to the
permitted dividends set forth in the financial covenants hereof.
7.7 Sales of Receivables: Sale - Leasebacks. Sell, discount or
otherwise dispose of notes, accounts receivable or other obligations owing to
the Borrower, with or without recourse, except for the purpose of collection in
the ordinary course of business; or sell any asset pursuant to an arrangement to
thereafter lease such asset from the purchaser thereof.
7.8 Nature of Business. Materially alter the nature of its business.
7.9 Stock of Subsidiaries. Sell or otherwise dispose of any Subsidiary
(except in connection with a merger or consolidation of a Subsidiary into the
Borrower or another Subsidiary) or permit a Subsidiary to issue any additional
shares of its capital stock except pro rata to its stockholders.
7.10 ERISA. (i) Terminate any Plan so as to result in any material
liability to the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA (the "PBGC"), (ii) engage in or permit any
person to engage in any "prohibited transaction" (as defined in Section 406 of
ERISA or Section 4975 of the Internal Revenue Code of 1954, as amended)
involving any Plan which would subject a Borrower to any material tax, penalty
or other liability, (iii) incur or suffer to exist any material "accumulated
funding deficiency" (as defined in Section 302 of ERISA), whether or not waived,
involving any Plan, or (iv) allow or suffer to exist any event or condition,
which presents a material risk incurring a material liability to the PBGC by
reason of termination of any Plan.
7.11 Fiscal Year. Change or consent to a change in the fiscal year end
of the Borrower or any Subsidiary.
SECTION 8. EVENTS OF DEFAULT
Upon the occurrence of any of the following events (each an "Event of
Default"):
(a) Borrower shall fail to pay any interest on or principal of any Term
Note when due or shall fail to pay any other amount payable hereunder; or the
Borrower or any Corporate Guarantor shall default under any other agreement,
instrument or obligation made with or in favor of or owing to the Bank; or
(b) Any representation or warranty made or deemed made by the Borrower
herein or which is contained in any certificate, document or financial or other
statement furnished at any time under or in connection with this Agreement shall
prove to have been false in any material respect on or as of the date made or
deemed made; or
(c) Borrower shall default in the observance or performance of any
covenant or agreement contained in Sections 5, 6 or 7.
(d) Borrower shall default in the observance or performance of any
other agreement contained in this Agreement and such default shall continue
unremedied for a period of 10 days after written notice thereof is given to the
Borrower by the Bank; or
(e) Any Specified Person shall (i) default in any payment of any
indebtedness for borrowed money (other than the Notes) or the obtaining of
advances or credit beyond the period of grace, if any, provided in the
instrument or agreement under which such indebtedness was created; or (ii)
default in the observance or performance of any other agreement or condition
relating to any such indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto or any other event shall occur or
condition exist, in each case the effect of which default or other event or
condition is to cause or permit the holder or holders of such indebtedness (or a
trustee or agent on behalf of such holder or holders) to cause such indebtedness
to become due prior to its stated maturity; or
(f) (i) Any Specified Person shall commence any case, proceeding or
other action (A) under any existing or future law of any jurisdiction, domestic
or foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian or other similar official for it or for all or any
substantial part of its assets, or any Specified Person shall make a general
assignment for the benefit of its creditors; or (ii) there shall be commenced
against any Specified Person any case, proceeding or other action of a nature
referred to in clause (i) above which (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall be
commenced against any Specified Person any case, proceeding or other action
seeking issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets which results in the
entry of an order for any such relief which shall have not been vacated,
discharged, or stayed or bonded pending appeal within 20 days from the entry
thereof; or (iv) any Specified Person shall take any action in furtherance of,
or indicating its consent to, approval of, or acquiescence in, any of the acts
set forth in clause (i), (ii) or (iii) of this Paragraph 8(f); or (v) any
Specified Person shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due; or
(g) (i) any Specified Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan, (iii) a Reportable Event shall occur with respect to, or proceedings shall
commence to have a trustee appointed, or a trustee shall be appointed, to
administer or to terminate, any Plan, which Reportable Event or institution of
proceedings is, in the reasonable opinion of the Bank, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, and, in the case of
a Reportable Event, the continuance of such Reportable Event unremedied for ten
days after notice of such Reportable Event pursuant to Section 4043(a), (c) or
(d) of ERISA is given or the continuance of such proceedings for ten days after
commencement thereof, as the case may be, (iv) any Plan shall terminate for
purposes of Title IV of ERISA, and in each case in clauses (i) through (iv)
above, such event or condition could subject the Borrower to any tax, penalty or
other liabilities in the aggregate material in relation to the business,
operations or property of the Borrower; or
(h) the rendition by any court of a final judgment against any
Specified Person which shall not be satisfactorily stayed, discharged, vacated
or set aside within 60 days after the making thereof; or the attachment of any
property of any Specified Person which has not been released or provided for to
the reasonable satisfaction of the Bank within 60 days after the making thereof;
or
(i) the Guarantees of any of the Corporate Guarantors shall cease to be
in full force and effect other than because of a merger of a subsidiary into the
Borrower;
then, in any such event, the Bank may, at its option, declare the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the Notes to be due and payable and the same, and all interest
accrued thereon, shall forthwith become due and payable without presentment,
demand, protest or notice of any kind, all of which are hereby waived, anything
contained herein or in any instrument evidencing the Loans to the contrary
notwithstanding.
SECTION 9. COLLATERAL SECURITY
(a) General Loan and Collateral Agreement. As collateral security for
the payment of any and all sums owing under the Term Notes and all other
obligations, direct or contingent, joint, several or independent, of the
Borrower now or hereafter existing due or to become due to, or held or to be
held by the Bank, whether created directly or acquired by assignment or
otherwise including, without limitation, any arising under this Agreement (all
of such obligations, including the Notes, being hereinafter called the
"Obligations"), the Borrower hereby grants to the Bank a lien on and security
interest in any and all deposits or other sums at any time credited by or due
from the Bank to the Borrower, whether in regular or special depository accounts
or otherwise, and any and all monies, securities and other property of the
Borrower, and the proceeds thereof, now or hereafter held or received by or in
transit to the Bank from or for the Borrower, whether for safekeeping, custody,
pledge, transmission, collection or otherwise, and any such deposits, sums,
monies, securities and other property, may at any time after the occurrence of
any Event of Default be set-off, appropriated and applied by the Bank against
any of the Obligations whether or not such Obligations are then due or are
secured by any collateral, or, if they are so secured, whether or not such
collateral held by the Bank is considered to be adequate.
(b) Additional Collateral Security. In addition to the collateral
described in Paragraph 9(a) hereof, payment of the Obligations is also secured
by a first priority security interest in all personal property of the Borrower
and its Subsidiaries whether now owned or hereafter acquired, as provided in
security agreements executed or to be executed and delivered by such parties to
the Bank (collectively the "Security Agreements").
SECTION 10. MISCELLANEOUS
10.1 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing unless otherwise
expressly provided herein and shall be deemed to have been duly given or made
when delivered by hand, or when deposited in the mail addressed as follows, or
to such address as may be hereafter notified in writing by the respective
parties hereto and any future holders of any Note:
The Borrower:
Balchem Corporation
Xxxxx 0 xxx Xxxxx 000
Xxxxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxxxxxx
The Bank:
The Chase Manhattan Bank
000 Xxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Vice President
with a copy to:
XxXxxxxx Xxxxxx Xxxxxxx Xxxxxx & Xxxxx
00 Xxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxx, Esq.
10.2 No Waiver: Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Bank, any right, remedy, power or
privilege hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right.
10.3 Survival of Representations and Warranties. All representations
and warranties made hereunder and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement and the Note.
10.4 Payment of Expenses. The Borrower agrees to pay or reimburse the
Bank for all its costs and expenses incurred in connection with (a) the
enforcement or preservation of any rights under this Agreement or any Note or
any other instrument or agreement entered into in connection herewith or
therewith including, without limitation, the reasonable fees and disbursements
of attorneys for the Bank if referred by the Bank to such attorneys for
enforcement and collection, and (b) any claim or action threatened, made or
brought against the Bank arising out of or relating to any extent to this
Agreement, any Security Agreement, any Note or any instrument or agreement
entered into a connection therewith or the transactions contemplated hereby or
thereby if the Bank prevails in any such action or proceeding or Borrower makes
payment to the Bank on account of any sums demanded by it prior to the
disposition of any such action or proceeding or in settlement thereof.
10.5 Waiver of Jury Trial. Set-off and Counterclaim. The Borrower and
the Bank in any litigation (whether or not arising out of or relating to this
Agreement) in which they shall be adverse parties waive the right of trial by
jury and the Borrower waives the right to interpose any set-off or counterclaim
of any kind or description in any such litigation.
10.6 Modification and Waiver. No modification or waiver of, or with
respect to any provision of this Agreement or any document or instrument
delivered in connection therewith shall be effective unless it shall be in
writing and signed by the Bank, and then such modification or waiver shall be
effective only in the specific instance and for the purpose for which given. No
notice to or demand on the Borrower in any case shall, of itself, entitle it to
any other or further notice or demand in similar or other circumstances.
10.7 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Borrower, the Bank, all future holders of the Notes
and its successors and assigns, except that the Borrower may not assign or
transfer any of its rights under this Agreement without the prior written
consent of the Bank. The term "Bank" as used herein shall be deemed to include
the Bank and its successors, endorsees and assigns.
10.8 Governing Law: Consent to Jurisdiction. This Agreement, the Notes
and any documents and instruments delivered in connection herewith and therewith
and the rights and duties of the parties hereunder and thereunder shall be
governed by, and construed and interpreted in accordance with, the law of the
State of New York and the Borrower consents to the jurisdiction of the courts of
the State of New York in any action brought to enforce any rights of the Bank
under this Agreement and any document or instrument related hereto.
10.9 Entire Agreement. This Agreement and any other agreements,
documents and instruments executed and delivered pursuant to or in connection
with the Obligations contain the entire agreement between the parties relating
to the subject matter hereof and thereof. The Borrower expressly acknowledges
that the Bank has not made and the Borrower is not relying on any oral
representations, agreements or commitments of the Bank or any officer, employee,
agent or representative thereof.
10.10 Interest Adjustment. Notwithstanding anything to the contrary
contained in this Agreement or the Notes, the rate of interest payable on the
Notes shall never exceed the maximum rate of interest permitted under applicable
law. If at any time the rate of interest otherwise prescribed herein shall
exceed such maximum rate, and such prescribed rate is thereafter below such
maximum rate, the prescribed rate shall be increased to the maximum rate for
such period of time as is required so that the total amount of interest received
by the Bank is that which would have been received by the Bank except for the
operation of the first sentence of this Section 10.10.
10.11 Participation Interests. The Borrower acknowledges that the Bank
may after the date of the Notes to sell and assign, participation interests in
the Loans to such domestic or foreign banks, insurance companies, pension funds,
trusts or other institutional lenders or other persons, parties or investors
(including, but not limited to, grantor trusts, owner trusts, special purpose
corporations, REMIC's, investment trusts or other similar or comparable
investment vehicles) as may be selected by the Bank in its sole and absolute
discretion and on terms and conditions satisfactory to the Bank in its sole and
absolute discretion (any such bank, insurance company, pension fund, trust or
other institutional lender or other person, party or investor to whom a
participation interest in the Loans is so sold and assigned is herein referred
to as a Participant). The Bank shall at all times during the term of the Loans
act as lead lender and servicer for Participants in accordance with
participation agreements in form and substance satisfactory in all respects to
the Payee and its counsel. Subject to the applicable terms and provisions of the
participation agreements, the Bank shall retain all rights with respect to the
enforcement, collection and administration of the Loans and the security
therefor and shall service the Loans throughout the term thereof. The Borrower
shall cooperate, and shall cause each Corporate Guarantor, indemnitor and other
Person or party associated or connected with the Loans or the collateral
therefore to cooperate, in all respects with the Bank in connection with the
sale of participation interests in the Loans in the manner contemplated by this
paragraph, and shall, in connection therewith, execute and deliver such
estoppels, certificates, instruments and documents as may be requested by the
Bank. The Borrower grants to the Bank, and shall cause each Corporate Guarantor,
indemnitor and other person or party associated or connected with the Loans or
the collateral therefore to grant to the Bank, the right to distribute on a
confidential basis financial and other information concerning the Borrower, each
such Corporate Guarantor, indemnitor and other person or party and other
pertinent information with respect to the Loans to any party who has purchased a
participation interest in the Loans or who has expressed a serious interest in
purchasing a participation interest in the Loans. The Borrower shall execute and
deliver, and shall cause each Corporate Guarantor, indemnitor and other person
or party associated or connected with the Loans or the collateral therefore to
execute and deliver, such documents and instruments as may be necessary to split
the Loans into two or more loans evidenced, secured and advanced by and pursuant
to separate sets of notes, security agreements and other related Loan Documents
to the full extent by the Bank to facilitate the sale of participation interests
in the Loans in the manner contemplated by this paragraph, it being agreed that
(i) any such splitting of the Loans will not adversely affect or diminish the
rights of the Borrower as presently set forth in this Agreement, the Notes, or
the other Loan Documents and will not increase the respective obligations and
liabilities of the Borrower or any such Corporate Guarantor, indemnitor or other
person or party above those presently set forth in this Agreement, the Notes or
the other Loan Documents, (ii) the other documents securing the Loans as so
split will have such priority of lien and security interest as may be specified
by the Bank, and (iii) the retained interest of the Bank in the Loans as so
split shall be allocated to or among one or more of such separate loans in a
manner specified by the Bank in its sole and absolute discretion. The Borrower
shall not incur or be responsible for any additional costs, fees or expenses of
any nature whatsoever as a result of the Bank's sale of participation interests
in all or any portion of the Loans in the manner contemplated by this paragraph,
it being agreed, however, that nothing contained in this sentence shall be
deemed to modify, qualify, limit or affect in any manner whatsoever any of the
terms and provisions of the Notes. If the Borrower shall default in the
performance of its obligation as set forth in this paragraph, and if such
default shall not be remedied by the Borrower within ten (10) days after notice
by the Bank, the Bank shall have the right in its discretion to declare the
Loans immediately due and payable.
10.12 Legal Representation. The Borrower acknowledges that the Bank has
advised it to be represented by legal counsel in the negotiation and execution
of this Agreement and the other Loan Documents and Borrower has elected to
forego such representation.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in White Plains, New York by their proper and duly
authorized officer as of the day and year first above written.
BALCHEM CORPORATION
By: /s/Xxxx X. Xxxxx
----------------
Xxxx X. Xxxxx
President
THE CHASE MANHATTAN BANK
By: /s/Xxxxxx X. Xxxxxxx
--------------------
Xxxxxx X. Xxxxxxx
Vice President
State of New York )
) ss.:
County of )
On the ___________ day of January in the year 1999, before me, the
undersigned, a Notary Public in and for the State of New York, personally
appeared Xxxx X. Xxxxx, personally known to me or proved to me on the basis of
satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individual, or the
person upon behalf of which the individual(s) acted, executed the instrument.
-------------------------------
NOTARY PUBLIC
State of New York )
) ss.:
County of )
On the ___________ day of January in the year 1999, before me, the
undersigned, a Notary Public in and for the State of New York, personally
appeared Xxxxxx X. Xxxxxxx, personally known to me or proved to me on the basis
of satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individual, or the
person upon behalf of which the individual(s) acted, executed the instrument.
-------------------------------
NOTARY PUBLIC
Schedule 3.10
Environmental Matters
None
Exhibit A
TERM NOTE A
$750,000.00 White Plains, New York
Dated as of January 15, 1999
BALCHEM CORPORATION, a Maryland corporation (the "Borrower"), for value
received, hereby promises to pay to the order of THE CHASE MANHATTAN BANK (the
"Bank") at its office specified in Section 10.1 of the Amended and Restated Loan
Agreement dated as of January 15, 1999 between the Borrower and the Bank, as
amended from time to time (as so amended the "Agreement"; terms defined in the
Agreement shall have their defined meanings when used in this Note) in lawful
money of the United States and in immediately available funds, the principal sum
of SEVEN HUNDRED FIFTY THOUSAND and no/100 DOLLARS ($750,000) payable in monthly
principal installments as follows:
Commencing on February 1, 1999 and on the first day of each succeeding
month thereafter through and including Term Loan A Maturity Date, there shall be
due and payable installments of principal each in the amount of $50,000.00; and
On Term Loan A Maturity Date, the entire Principal Balance remaining
unpaid and any accrued and unpaid interest shall be due and payable.
In addition to the aforesaid payments of principal, the Borrower
further promises to pay interest at said office in like money on the unpaid
Principal Balance of this Note from time to time outstanding (computed on the
basis of a 360-day year for actual days elapsed) at the times and at an annual
rate (or rates) as selected by the Borrower pursuant to the terms of Section 2
of the Agreement. Interest shall be payable as provided in Section 2 of the
Agreement. Whenever the entire unpaid principal amount of this Note becomes due
and payable (whether at the stated maturity hereof, by acceleration or
otherwise), interest hereon shall thereafter be payable on demand at a rate as
set forth in Section 2 of the Agreement, but in no event in excess of the
maximum rate of interest permitted under any applicable law.
The foregoing notwithstanding, if in any month, it would be necessary
for the Borrower to prepay a Loan which bears interest at a LIBOR Rate in order
to make a regular monthly payment of principal due hereunder, the Borrower may
defer such regular monthly payment until the last day of the LIBOR Rate Interest
Period applicable to such Loan, provided, however, that the aggregate of all
principal payments for: (1) the period February 1, 1999 through December 31,
1999 shall be no less than $550,000; and (2) the period February 1, 1999 through
Term Loan A Maturity Date shall be no less than $750,000.
This Note is the Term Note A referred to in the Agreement, and is
entitled to the benefits thereof and may be prepaid in whole or in part (subject
to the indemnity provided in the Agreement) as provided therein.
This Note is secured by the collateral described in each Security Agreement.
Upon the occurrence of any one or more of the Events of Default
specified in the Agreement, all amounts then remaining unpaid under the Note may
be declared immediately due and payable as provided in the Agreement.
This Note is a restatement and replacement of, and not in addition to,
the Note dated November 1, 1996 made by the Borrower for the benefit of the
Bank, in the original principal amount of $2,100,000, which, itself, is a
restatement and replacement of, and not in addition to, the Note dated January
25, 1995 made by the Borrower for the benefit of the Bank, in the original
principal amount of $3,700,000.00.
This Note shall be construed in accordance with and governed by the
laws of the State of New York.
BALCHEM CORPORATION
By: _____________________
Name:
Title:
State of New York )
) ss.:
County of )
On the ___________ day of January in the year 1999, before me, the
undersigned, a Notary Public in and for the State of New York, personally
appeared_____________________________________________, personally known to me or
proved to me on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her capacity, and that by his/her signature on the
instrument, the individual, or the person upon behalf of which the individual
acted, executed the instrument.
-------------------------------
NOTARY PUBLIC
Exhibit B
TERM NOTE B
$3,000,000.00 White Plains, New York
Dated as of January 15, 1999
BALCHEM CORPORATION, a Maryland corporation (the "Borrower"), for value
received, hereby promises to pay to the order of THE CHASE MANHATTAN BANK (the
"Bank") at its office specified in Section 10.1 of the Amended and Restated Loan
Agreement dated as of January 15, 1999 between the Borrower and the Bank, as
amended from time to time (as so amended the "Agreement"; terms defined in the
Agreement shall have their defined meanings when used in this Note) in lawful
money of the United States and in immediately available funds, the principal sum
of THREE MILLION and no/100 DOLLARS ($3,000,000.00) payable in monthly principal
installments as follows:
Commencing on February 1, 1999 and on the first day of each succeeding
month thereafter through and including Term Loan B Maturity Date, there shall be
due and payable installments of principal each in the amount of $50,000.00; and
On Term Loan B Maturity Date, the entire Principal Balance remaining
unpaid and any accrued and unpaid interest shall be due and payable.
In addition to the aforesaid payments of principal, the Borrower
further promises to pay interest at said office in like money on the unpaid
Principal Balance of this Note from time to time outstanding (computed on the
basis of a 360-day year for actual days elapsed) at the times and at an annual
rate (or rates) as selected by the Borrower pursuant to the terms of Section 2
of the Agreement. Interest shall be payable as provided in Section 2 of the
Agreement. Whenever the entire unpaid principal amount of this Note becomes due
and payable (whether at the stated maturity hereof, by acceleration or
otherwise), interest hereon shall thereafter be payable on demand at a rate as
set forth in Section 2 of the Agreement, but in no event in excess of the
maximum rate of interest permitted under any applicable law.
The foregoing notwithstanding, if in any month, it would be necessary
for the Borrower to prepay a Loan which bears interest at a LIBOR Rate in order
to make a regular monthly payment of principal due hereunder, the Borrower may
defer such regular monthly payment until the last day of the LIBOR Rate Interest
Period applicable to such Loan, provided, however, that the aggregate of all
principal payments for (1) the period February 1,1999 through December 31, 1999
shall be no less than $550,000; (2) the period February 1, 1999 through December
31, 2000 shall be no less than $1,150,000; (3) the period February 1, 1999
through December 31, 2001 shall be no less than $1,750,000; (4) the period
February 1, 1999 through December 31, 2002 shall be no less than $2,350,000; and
(5) the period February 1, 1999 through Term Loan B Maturity Date shall be no
less than $3,000,000.
This Note is the Term Note B referred to in the Agreement, and is
entitled to the benefits thereof and may be prepaid in whole or in part (subject
to the indemnity provided in the Agreement) as provided therein.
This Note is secured by the collateral described in each Security Agreement.
Upon the occurrence of any one or more of the Events of Default
specified in the Agreement, all amounts then remaining unpaid under the Note may
be declared immediately due and payable as provided in the Agreement.
This Note shall be construed in accordance with and governed by the
laws of the State of New York.
BALCHEM CORPORATION
By: ______________________________
Name:
Title:
State of New York )
) ss.:
County of )
On the ___________ day of January in the year 1999, before me, the
undersigned, a Notary Public in and for the State of New York, personally
appeared_____________________________________________, personally known to me or
proved to me on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her capacity, and that by his/her signature on the
instrument, the individual, or the person upon behalf of which the individual
acted, executed the instrument.
-------------------------------
NOTARY PUBLIC
Exhibit C
Prepayment Formula
n = x
PV = [GRAPHIC-MATH SYMBOL] NETn
n = 1
( P x (L - R) ) x Daysn - Daysn-1
---------------
360
NETn = -----------------------------------
(1 + Zn) Daysn - Daysn
360
X = Number, or fraction thereof, of
Calculation Periods from date of prepayment
to date of final fixed maturity
P = Principal prepaid
L = Fixed Rate
R = Redeployment Rate
Daysn - Daysn-1 = For each Calculation Period "n", the actual
number of days elapsed during that
Calculation Period.
Daysn - Days0 = For each Calculation Period "n", the actual
number of days elapsed from the date of
prepayment to the last day of that
Calculation Period.
Z = For each Calculation Period "n", the
Discount Rate for that Calculation Period.
Exhibit D
[GRAPHIC-CHASE LOGO] THE CHASE MANHATTAN BANK
GUARANTY
__________, New York, ___________, 199_
WHEREAS, __________________________ (hereinafter called the
"Borrower"), desires to transact business with and to obtain credit or a
continuation of credit or other financial accommodations from THE CHASE
MANHATTAN BANK, a New York banking corporation (hereinafter called the "Bank");
and
WHEREAS, the Bank is unwilling to extend or continue credit to or other
financial accommodations to the Borrower, unless it receives the following
guaranty of the undersigned;
NOW, THEREFORE, in consideration of the premises and of other good and
valuable consideration and in order to induce the Bank from time to time, in its
discretion, to extend or continue credit or other financial accommodations to
the Borrower, the undersigned hereby guarantees, absolutely and unconditionally,
to the Bank the payment of all liabilities of the Borrower to the Bank of
whatever nature, whether now existing or hereafter incurred, whether created
directly or acquired by the Bank by assignment or otherwise, whether matured or
unmatured and whether absolute or contingent (all of which are hereinafter
collectively referred to as the "Liabilities of the Borrower").
In order to further secure the payment of the Liabilities of the
Borrower, the undersigned does hereby give the Bank a continuing lien and right
of set-off for the amount of the Liabilities of the Borrower upon any and all
monies, securities and any and all other property of the undersigned and the
proceeds thereof, now or hereafter actually or constructively held or received
by or in transit in any manner to or from the Bank, Chase Securities, Inc., or
any other affiliate of the Bank from or for the undersigned, whether for
safekeeping, custody, pledge, transmission, collection or otherwise or coming
into the possession of the Bank, Chase Securities, Inc., or any other affiliate
of the Bank in any way, or place in any safe deposit box leased by the Bank,
Chase Securities, Inc., or any other affiliate of the Bank to the undersigned.
The Bank is also given a continuing lien and right of set-off for the amount of
said Liabilities of the Borrower upon any and all deposits (general and special)
and credits of, or for the benefit of the undersigned with, and any and all
claims of the undersigned against, the Bank, Chase Securities, Inc., or any
other affiliate of the Bank at any time existing. The Bank is hereby authorized
at any time or times, without prior notice, to apply such deposits or credits,
or any part thereof, to such Liabilities of the Borrower and, although said
Liabilities of the Borrower may be contingent or unmatured, and whether the
collateral security therefor is deemed adequate or not. The undersigned
authorizes the Bank to deliver a copy of this guaranty to others as written
notification of the undersigned's transfer of a security interest in the
collateral described herein to the Bank.
The undersigned agrees that, with or without notice or demand, the
undersigned shall reimburse the Bank for all the Bank's expenses (including
reasonable fees of counsel for the Bank who may be employees thereof) incurred
in connection with any of the Liabilities of the Borrower or the collection
thereof.
This guaranty is a continuing guaranty and shall remain in full force
and effect irrespective of any interruptions in the business relations of the
Borrower with the Bank; provided, however, that the undersigned may, by notice
in writing, delivered personally or received by certified mail, return receipt
requested, addressed to the Bank's office at
_____________________________________________________, terminate this guaranty
with respect to all Liabilities of the Borrower incurred or contracted by the
Borrower or acquired by the Bank after the date on which such notice is so
delivered or received.
All monies available to the Bank for application in payment or
reduction of the Liabilities of the Borrower may be applied by the Bank in such
manner and in such amounts and at such time or times as it may see fit to the
payment or reduction of such of the Liabilities of the Borrower as the Bank may
elect.
The undersigned hereby waives: (a) notice of acceptance of this
guaranty and of extensions of credit or other financial accommodations by the
Bank to the Borrower; (b) presentment and demand for payment of any of the
Liabilities of the Borrower; (c) protest and notice of dishonor or default to
the undersigned or to any other party with respect to any of the Liabilities of
the Borrower; (d) all other notices to which the undersigned may otherwise be
entitled; and (e) any demand for payment hereunder.
All liabilities of the undersigned to the Bank hereunder or otherwise,
whether or not then due or absolute or contingent, shall without notice or
demand become due and payable immediately upon the occurrence of any default or
event of default with respect to any Liabilities of the Borrower (or the
occurrence of any other event which results in acceleration of the maturity of
any thereof) or the occurrence of any default hereunder. This is a guaranty of
payment and not of collection and the undersigned further waives any right to
require that any action be brought against the Borrower or any other person or
to require that resort be had to any security or to any balance of any deposit
account or credit on the books of the Bank in favor of the Borrower or any other
person.
The undersigned hereby consents that from time to time, before or after
any default by the Borrower or any notice of termination hereof, with or without
further notice to or assent from the undersigned, any security at any time held
by or available to the Bank for any obligation of the Borrower, or any security
at any time held by or available to the Bank for any obligation of any other
person secondarily or otherwise liable for any of the Liabilities of the
Borrower, may be exchanged, surrendered or released and any obligation of the
Borrower, or of any such other person, may be changed, altered, renewed,
extended, continued, surrendered, compromised, waived, discharged or released in
whole or in part (including without limitation any such event resulting from any
insolvency, bankruptcy, reorganization or other similar proceeding affecting the
Borrower or its assets) or any default with respect thereto waived, and the Bank
may fail to set off and may release, in whole or in part, any balance of any
deposit account or credit on the Bank's books in favor of the Borrower, or of
any such other person, and may extend further credit in any manner whatsoever to
the Borrower, and generally deal or take action or no action with regard to the
Borrower or any such security or other person as the Bank may see fit; and the
undersigned shall remain bound under this guaranty notwithstanding any such
exchange, surrender, release, change, alteration, renewal, extension,
continuance, compromise, waiver, discharge, inaction, extension of further
credit or other dealing.
The obligations of the undersigned are absolute and unconditional and
are valid irrespective of any other agreement or circumstance which might
otherwise constitute a defense to the obligations hereunder or to the
obligations of others related thereto and the undersigned irrevocably waives the
right to assert defenses, set-offs and counterclaims in any litigation relating
to this guaranty and the Liabilities of the Borrower. This guaranty sets forth
the entire understanding of the parties, and the undersigned acknowledges that
no oral or other agreements, conditions, promises, understandings,
representations or warranties exist in regard to the obligations hereunder,
except those specifically set forth herein.
The undersigned irrevocably waives and shall not seek to enforce or
collect upon any rights which it now has or may acquire against the Borrower,
either by way of subrogation, indemnity, reimbursement or contribution, or any
other similar right, for any amount paid under this guaranty or by way of any
other obligations whatsoever of the Borrower to the undersigned. In the event
either a petition is filed under the Bankruptcy Code in regard to the Borrower
or an action or proceeding is commenced for the benefit of the creditors of the
Borrower, this agreement shall at all times thereafter remain effective in
regard to any payments or other transfers of assets to the Bank received from or
on behalf of the Borrower prior to notice of termination of this guaranty and
which are or may be held voidable or otherwise subject to recission or return on
the grounds of preference, fraudulent conveyance or otherwise, whether or not
the Liabilities of the Borrower have been paid in full.
Each reference herein to the Bank shall be deemed to include its
successors and assigns, in whose favor the provisions of this guaranty shall
also inure. Each reference herein to the undersigned shall be deemed to include
the heirs, executors, administrators, legal representatives, successors and
assigns of the undersigned, all of whom shall be bound by the provisions of this
guaranty.
The term "undersigned" as used herein shall, if this instrument is
signed by more than one party, mean the "undersigned and each of them" and each
undertaking herein contained shall be their joint and several undertaking,
provided, however, that in the next succeeding paragraph hereof the term
"undersigned" shall mean the "undersigned or any of them". If any party hereto
shall be a partnership, the agreements and obligations on the part of the
undersigned herein contained shall remain in force and applicable against the
partnership and all of its partners (notwithstanding any changes in the
individuals composing the partnership or any release of one or more partners)
and the term "undersigned" shall include any altered or successive partnership
but, the predecessor partnerships and their partners shall not thereby be
released from any obligation or liability.
No delay on the part of the Bank in exercising any rights hereunder or
failure to exercise the same shall operate as a waiver of such rights; no notice
to or demand on the undersigned shall be deemed to be a waiver of the obligation
of the undersigned or of the right of the Bank to take further action without
notice or demand as provided herein; nor in any event shall any modification or
waiver of the provisions of this guaranty be effective unless in writing signed
by an authorized officer of the Bank; nor shall any such waiver be applicable
except in the specific instance for which given.
This guaranty is, and shall be deemed to be, a contract entered into
under and pursuant to the laws of the State of New York and shall be in all
respects governed, construed, applied and enforced in accordance with the laws
of said State; and no defense given or allowed by the laws of any other State or
Country shall be interposed in any action hereon unless such defense is also
given or allowed by the laws of the State of New York.
The undersigned hereby unconditionally WAIVES ANY RIGHT TO JURY TRIAL
in connection with actions by or against the Bank arising out of or in
connection with the Liabilities of the Borrower and this guaranty.
Guarantor: ___________________________________
(AFFIX CORPORATE SEAL HERE)
By: ______________________________
Name:
Title:
Address: ____________________________________
____________________________________
Exhibit E
SECURITY AGREEMENT
(General Purpose)
This agreement made this 15th day of January 1999 between The
Chase Manhattan Bank (herein called "Bank") and BALCHEM CORPORATION (herein
called "Borrower").
1. DEFINITIONS OF TERMS USED HEREIN. (a) "Borrower" includes
all individuals executing this agreement as parties hereto and all members of a
partnership when Borrower is a partnership, each of whom shall be jointly and
severally liable individually and as partners hereunder. (b) "Liability" or
"liabilities" includes all liabilities (primary, secondary, direct, contingent,
sole, joint or several) due or to become due, or that may be hereafter
contracted or acquired, of Borrower (including Borrower and any other person) to
Bank, including without limitation all liabilities arising under or from any
note, loan or credit agreement, letter of credit, guaranty, draft, acceptance,
interest rate or foreign exchange agreement or any other instrument or agreement
of (or the responsibility of) the Borrower or any loan, advance or other
extension of credit or financial accommodation to Borrower by Bank. (c)
"Proceeds" means whatever is received when Collateral is sold, exchanged,
leased, collected or otherwise disposed of and includes the account arising when
the right to payment is earned under a contract. (d) "Security interest" means a
lien or other interest in Collateral which secures payment of a liability or
performance of an obligation. (e) "Collateral" means the property described in
Section 2 hereof and the following described property of the Borrower.
SEE RIDER A ATTACHED HERETO AND DEEMED
INSERTED AT THIS POINT.
All terms used herein which are also defined in the New York
or any other applicable Uniform Commercial Code shall also have at least the
meanings herein as therein defined.
2. SECURITY INTEREST. As security for the payment of all loans
and other extensions of credit or other financial accommodations now or in the
future made by Bank to Borrower and all other liabilities of Borrower to Bank,
Borrower hereby grants to Bank a security interest in the above described
Collateral and all and any Proceeds arising therefrom and all and any products
of the Collateral.
Borrower represents and warrants that it is the sole lawful
owner of the Collateral, free and clear of any liens and encumbrances, and has
the right and power to pledge, sell, assign and transfer absolute title thereto
to Bank and that no financing statement covering the Collateral, other than the
Bank's, is on file in any public office.
To further secure the Liabilities, the Borrower hereby grants,
pledges and assigns to the Bank a continuing lien security interest and right of
set-off in and to all money, securities and all other property of the Borrower,
and the proceeds thereof, now or hereafter actually or constructively held or
received by or for the Bank, Chase Securities, Inc or any other affiliate of the
Bank for any purpose, including safekeeping, custody, pledge, transmission and
collection and in and to all of the Borrower's deposits (general and special)
and credits with the Bank, Chase Securities, Inc. or any other affiliate of the
Bank. Borrower authorizes Bank to deliver to others a copy of this agreement as
written notification of the Borrower's transfer of a security interest in the
foregoing property. The Bank is hereby authorized at any time and from time to
time, without notice, to apply all or part of such money, securities, property,
proceed deposits or credits to any of the Liabilities in such amounts as the
Bank may elect in its sole and absolute discretion, although the Liabilities may
then be contingent or unmatured and whether or not the collateral security may
be deemed adequate.
3. USE OF COLLATERAL. Until default, Borrower may use the
Collateral in any lawful manner. If the Collateral is or is about to become
affixed to realty, Borrower will, at Bank's request, furnish to the Bank a
writing executed by the mortgagee of the realty whereby the mortgagee
subordinates its rights and priorities to the Bank's security interest in the
Collateral. If the Collateral is or may become subject to a landlord's lien, the
Borrower will, at Bank's request, furnish the Bank with a landlord's waiver
satisfactory in form to the bank.
4. INSURANCE. Borrower will have and maintain insurance on the
Collateral until this Agreement is terminated against all expected risks to
which it is exposed, including fire, theft and collision, and those which the
Bank may designate, such insurance to be payable to the Bank and Borrower as
their interest may appear; all policies shall provide for thirty (30). days'
written notice minimum cancellation notice to the Bank. Bank may act as attorney
for Borrower in obtaining, adjusting, settling and canceling such insurance.
5. DEFAULT. Default shall exist hereunder (1) if the Borrower
shall fail to pay any amount of the Liabilities when due or if the Borrower
shall fail to keep, observe or perform any provision of this Agreement or of any
note, or other instrument or agreement between Borrower and Bank relating to any
Liabilities or if any default or Event of Default specified or defined in any
such note, instrument or agreement shall occur, (2) if the Borrower shall or
shall attempt to (a) remove or allow removal of the Collateral from the county
where the Borrower now resides or change the location of its chief executive
office or principal place of business, (b) sell, encumber or otherwise dispose
of the Collateral or any interest therein or permit any lien or security
interest (other than the Bank's) to exist thereon or therein, (c) conceal, hire
out or let the Collateral, (d) misuse or abuse the Collateral, or (e) use or
allow the use of the Collateral in connection with any undertaking prohibited by
law; (3) if bankruptcy or insolvency proceedings shall be instituted by or
against the Borrower, or (4) If the Collateral shall be attached, levied upon,
seized in any legal proceedings, or held by virtue of any lien or distress, or
(5) If the Borrower shall make any assignment for the benefit of creditors, or
(6) If the Borrower shall fail to pay promptly all taxes and assessments upon
the Collateral or the use thereof, or (7) If the Borrower shall die, or (8) if
the Bank with reasonable cause determines that its interest in the Collateral is
in jeopardy, or (9) If Borrower should fail to keep the Collateral suitably
insured. In the event of default or the breach of any undertaking of or
conditions to be performed by the Borrower (1) all liabilities shall become
immediately due and payable, and (2) the Borrower agrees upon demand to deliver
the Collateral to the Bank, or the Bank may, with or without legal process, and
with or without previous notice or demand for performance, enter any premises
wherein the Collateral may be, and take possession of the same, together with
anything therein; and the Bank may make disposition of the Collateral subject to
any and all applicable provisions of the law. If the Collateral is sold at
public sale, Bank may purchase the Collateral at such sale. The Bank, provided
it has sent the statutory notice of default, may retain from the proceeds of
such sale all reasonable costs Incurred in the said taking and sale and also,
all sums then owing by the Borrower, and any surplus of any such sale shall be
paid to the Borrower.
6. GENERAL AGREEMENTS. (a) Borrower agrees to pay the costs of
filing financing statements and of conducting searches in connection with this
Agreement (b) Borrower agrees to allow the Bank through any of its officers or
agents, at all reasonable times, to examine or inspect any of the Collateral and
to examine, inspect and make extracts from the Borrower's books and records
relating to the Collateral. (c) Borrower will promptly pay when due all taxes
and assessments upon the Collateral or for its use of operation or upon the
proceeds thereof or upon this Agreement or upon any note or other instrument or
agreement evidencing any of the liabilities. (d) At its option, the Bank may
discharge taxes, liens or security interests or other encumbrances at any time
levied or placed on the Collateral, and may pay for the maintenance and
preservation of the Collateral, and the Borrower agrees to reimburse the Bank on
demand for any payment made or any expense incurred by the Bank pursuant to the
foregoing authorization, Including outside or in-house counsel fees and
disbursements incurred or expended by the Bank in connection with this Agreement
(e) Borrower hereby authorizes the Bank to file financing statements and any
amendments .thereto without the signature of Borrower. Such authorization is
limited to the security Interest granted by this Agreement (f) Borrower agrees
that the Bank has the right to notify (on invoices or otherwise) account debtors
and other obligors or payors on any Collateral of its assignment to the Bank and
that all payments thereon should be made directly to the Bank and that the Bank
has full power and authority to collect, compromise, endorse, sell or otherwise
deal with the Collateral on its own name or that of the Borrower at any time.
(g) The Borrower agrees to pay or reimburse the Bank on demand for all costs and
expenses incurred by it in connection with the administration and enforcement of
this Agreement and the administration, preservation, protection, collection or
realization of any Collateral (including outside or in-house attorneys' fees and
expenses). (h) The Bank shall not be deemed to have waived any of its rights
hereunder or under any other agreement, instrument or paper signed by the
Borrower unless such waiver is in writing and signed by the Bank. No delay or
omission on the part of the Bank in exercising any right shall operate as a
waiver thereof or of any other right. A waiver upon any one occasion shall not
be construed as a bar or a waiver of any right or remedy on any future occasion.
All of the rights and remedies of the Bank, whether evidenced hereby or by any
other Agreement, instrument or paper, shall be cumulative and may be exercised
singly or concurrently. (i) This Agreement shall be governed by and construed In
accordance with the laws of the State of New York. j) This Agreement, and the
security interests, obligations, rights and remedies created hereby, shall inure
to the benefit of the Bank and its successors and assigns and be binding upon
the Borrower and its heirs, executors, administrators, legal representatives,
successors and assigns.
7. EXECUTION BY BANK. This Agreement shall take effect
immediately upon execution by the Borrower, and the execution hereof by the Bank
shall not be required as a condition to the effectiveness of this Agreement. The
provision for execution of this Agreement by the Bank is only for purposes of
filing this Agreement as a Security Agreement under the Uniform Commercial Code,
if execution hereof by the Bank is required for purposes of such filing.
BALCHEM CORPORATION (Borrower)
By: /S/Xxxx Xxxxx
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Xxxx Xxxxx
Route 6 & Route 284
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(Number and Street)
Xxxxx Xxxx, Xxx Xxxx 00000
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(City, County, State)
Places of business in counties other than above.
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THE CHASE MANHATTAN BANK
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(Bank Designation)
By: /S/Xxxxxx X. Xxxxxxx,
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Xxxxxx X. Xxxxxxx
(Name and Title)
Address: 000 Xxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxx Xxxx 00000
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State of New York )
) ss.:
County of Orange )
On the 14th day of January in the year 1999, before me, the
undersigned, a Notary Public in and for the State of New York, personally
appeared Xxxx X. Xxxxx, personally known to me or proved to me on the basis of
satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individual, or the
person upon behalf of which the individual acted, executed the instrument.
/S/ Xxxxx Xxxx
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NOTARY PUBLIC
XXXXX X. XXXX
Notary Public, State of New York
No 4957414
Qualified in Orange County
Commission Expires October 16, 1999
RIDER A TO SECURITY AGREEMENT
BETWEEN THE CHASE MANHATTAN BANK AND BALCHEM CORPORATION
(a) All equipment in all of its forms, wherever located, now
or hereafter existing (including, but not limited to, any specific items or
types of equipment set forth in the Schedule hereto), and all parts thereof and
all accessions thereto (any and all such equipment, parts and accessions being
the "Equipment");
(b) All inventory in all of its forms, wherever located, now
or hereafter existing (including, but not limited to (i) any specific items or
types of inventory set forth in the Schedule hereto and raw materials and work
in process therefor, finished goods thereof, and materials used or consumed in
the manufacture or production thereof, (ii) goods in which the Borrower has an
interest in mass or a joint or other interest or right of any kind and (iii)
goods which are returned to or repossessed by the Borrower, and all accessions
thereto and products thereof (any and all such inventory, accessions and
products being the "Inventory");
(c) All accounts, contract rights, chattel paper, instruments,
general intangibles and other obligations of any kind now or hereafter existing
arising out of or in connection with the sale or lease of goods or the rendering
of services, and all rights now or hereafter existing in and to all security
agreements, leases, and other contracts securing or otherwise relating to any
such accounts, contract rights, chattel paper, instruments, general intangibles
or obligations (any and all such accounts, contract rights, chattel paper,
instruments, general intangibles and obligations being the "Receivables", and
any and all such leases, security agreements and other contracts being the
"Related Contracts") and all rights under any present or future interest rate
protection agreements related to any financial accommodations made by the Bank
for the benefit of the Borrower; and
(d) All proceeds of any and all of the foregoing Collateral
and, to the extent not otherwise included, all payments under insurance (whether
or not the Bank is the loss payee thereof), or any indemnity, warranty or
guaranty, payable by reason of loss or damage to or otherwise with respect to
any of the foregoing Collateral.
