LOAN AND SECURITY AGREEMENT
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THIS LOAN AND SECURITY AGREEMENT entered into this 1st day of April, 1999
by and between NEW BRUNSWICK SCIENTIFIC CO., INC. (the "Borrower"), a
corporation of the State of New Jersey, having an office at 00 Xxxxxxxx Xxxx,
Xxxxxx, Xxx Xxxxxx 00000-0000 and FIRST UNION NATIONAL BANK (the "Bank"), a
national Bank organized under the laws of the United States of America, having
an office at 000 Xxxxxx Xxxx, Xxxx Xxxxxxx, Xxx Xxxxxx 00000.
SECTION 1
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DEFINITIONS
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1.1 As used in this Agreement, the following terms shall have the
meanings hereinafter provided (such meanings to be equally applicable to both
the singular and plural forms of the terms defined):
"Accounts": Accounts has the meaning given to it in paragraph (ii) of the
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definition of the term "Collateral" provided in Subsection 1.1 hereof.
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"Account Debtor": The Person obligated under any Account.
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"Actual/360 Computation": The same meaning ascribed to said term in Subsection
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2.1(c)(iv) hereof.
"Advances": Extensions of credit under the Revolving Loan and the Equipment
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Loan.
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"Affiliate": Any Person or any other Person or any group acting in concert in
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respect of such Person that directly or indirectly, through one or more Persons,
is in control of, is controlled by, or is under common control with such Person.
"Agreement": The contents hereof and of any and all exhibits and schedules
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annexed hereto, all as may be from time to time amended, restated, substituted
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for and/or extended and all other writings submitted by the Borrower to the Bank
pursuant hereto.
"Applicable Margin": Shall mean as follows:
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WITH RESPECT TO EURODOLLAR LOANS WITH RESPECT TO PRIME RATE LOANS
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REVOLVING LOAN . . . . . . . . . . An additional 100 basis points a reduction of 1.25%.
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INCREMENTAL TERM LOANS . . . . . . An additional 125 basis points a reduction of 1.25%.
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EQUIPMENT LOAN . . . . . . . . . . An additional 125 basis points a reduction of 1.25%
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"Assignment of Rents": The Assignment of Leases and Rents, substantially in the
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form annexed as Exhibit A, as may be amended, restated, substituted for and/or
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extended from time to time.
"Bank": FIRST UNION NATIONAL BANK, a national bank organized under the laws of
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the United States of America.
"Bank's Rights and Remedies": All of the rights and remedies of the Bank
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described in Section 11.
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"Borrower": NEW BRUNSWICK SCIENTIFIC CO., INC., a corporation of the State of
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New Jersey.
"Borrower's Rights and Remedies": All of the rights or remedies described in
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Section 12.
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"Business Day": Any day except Saturday or Sunday or other day on which the
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Banks in the State of New Jersey are authorized or required by law to close.
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"Closing Date": The date of this Agreement.
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"Collateral": All -
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(i) inventory of the Borrower, wheresoever located, whether now owned or
hereafter acquired, including, without limitation, raw materials, work in
process, finished goods and materials used or consumed in business and other
goods held for sale or lease or furnished or to be furnished under contracts of
service (the "Inventory");
(ii) accounts of the Borrower, whether now existing or hereafter arising,
including, without limitation, all accounts receivable and contract rights and
any rights to payment for goods sold or leased or for services rendered which
are not evidenced by an instrument or chattel paper, whether or not such rights
have been earned by performance, whether now owned or existing or hereafter
arising or acquired (the "Accounts");
(iii) equipment of the Borrower, wheresoever located, whether now owned or
hereafter acquired, including, without limitation, machinery, motor vehicles,
trailers, tools, trade, sales and production equipment, furniture, furnishings,
fixtures and all other goods in which the Borrower has rights which do not
constitute inventory, whether now owned or existing or hereafter arising or
acquired (the "Equipment");
(iv) instruments (including, without limitation, negotiable instruments and
non-negotiable instruments), chattel paper, letters of credit, and documents of
title (including, without limitation, bills of lading, dock warrants, dock
receipts and warehouse receipts) (the "Instruments"), general intangibles
(including, without limitation, income tax refunds, copyrights, licenses,
rights, patents, patent rights, franchise rights, distributorship rights,
trademarks, trademark rights, formulae, customer lists and goodwill but,
excluding any Swap Agreement) (the "Intangibles"), all of the Borrower, whether
now owned or existing or hereafter arising or acquired;
(v) investment property, whether now owned or existing or hereafter arising or
acquired;
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(vi) interests of the Borrower in Inventory, wheresoever located, whether now
owned or existing or hereafter arising or acquired, as to which an Account,
chattel paper, instrument or general intangible has arisen, whether now owned or
existing or hereafter arising or acquired; and
(vii) as to all of the foregoing (i) through (vi) inclusive, cash proceeds,
non-cash proceeds and products thereof, payments under insurance (whether or not
the Bank is the loss payee thereof or additional insured), additions and
accessions thereto, replacements and substitutions therefor, rent proceeds
arising out of rental or lease agreements and all related books, records,
journals, computer print-outs and data, of the Borrower.
(viii) all other collateral security described in Section 6, including the
Premises.
Notwithstanding anything contained herein to the contrary, the definition of
Collateral shall not include assets or properties owned by Subsidiaries of the
Borrower.
"Controlled Group": As such term is defined in the Internal Revenue Code of
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1986, as amended from time to time.
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"Default": An event or condition which with the passage of time or the giving
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of notice or both would constitute an Event of Default.
"Default Rate": The lesser of (i) that rate of interest per annum equal to 3%
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above the otherwise applicable rate of interest; or (ii) the highest rate
permitted by law.
"DGI": DGI BioTechnologies, L.L.C.
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"Dispute": The same meaning ascribed to said term in Subsection 13.17 hereof.
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"ERISA": The Employee Retirement Income Security Act of 1974, as amended.
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"Equipment": As such term is defined in paragraph (iii) of the definition of
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"Collateral" in this Section 1.1.
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"Equipment Line of Credit Note": The Equipment Line of Credit Note described in
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Subsection 4(g) hereof, as may be amended, restated, substituted for and/or
extended from time to time.
"Equipment Loan": The loan described in Section 4 hereof.
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"Equipment Loan Advances: As described in Subsection 4(a) hereof.
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"Equipment Loan Advance Limit: As described in Subsection 4(a) hereof
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"Equipment Term Notes": The Term Notes described in Subsection 4(g) hereof, as
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may be amended, restated, substituted for and/or extended from time to time.
"Eurodollar Business Day": Any Business Day on which commercial Banks are open
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for international business including dealings in dollar deposits in London,
England.
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"Eurodollar Loan": Any Advance or any outstanding portion of a Loan that is
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based on the Eurodollar Rate.
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"Eurodollar Period": As to each Eurodollar Loan, the period commencing on the
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date specified by the Borrower and ending on a day that is (a) with respect to
the Revolving Loan one (1), two (2), three (3) or six (6) months thereafter, as
specified by the Borrower in any applicable Notice of Borrowing/Conversion, and
(b) with respect to the Equipment Loan and the Incremental Term Loans one (1)
month thereafter, provided that:
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(i) The first day of any Eurodollar Period shall be a Eurodollar Business Day;
(ii) Any Eurodollar Period that would otherwise end on a day that is not a
Eurodollar Business Day shall be extended to the next succeeding Eurodollar
Business Day unless such Eurodollar Business Day falls in another calendar
month, in which case such Eurodollar Period shall end on the next preceding
Eurodollar Business Day; and
(iii) No Eurodollar Period shall extend beyond (a) the Termination Date, with
respect to the Revolving Loan, (b) the next Conversion Date, with respect to
that portion of the Equipment Loan to be converted to a term loan on said
Conversion Date and (c) the maturity date with respect to an Incremental Term
Loan and with respect to any portion of the Equipment Loan which has been
converted to a term loan.
"Eurodollar Rate": A rate per annum for the relevant Eurodollar Period
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determined pursuant to the following formula
[ LIBOR ]*
ER = [ ------------- ]
[ 1.00 - EDRP ]
ER = Eurodollar Rate
LIBOR = London Interbank Offering Rate
EDRP = Eurodollar Reserve Percentage
(* the amount in brackets being rounded upwards, if necessary, to the next
higher 1/16 of 1%).
The Eurodollar Rate shall be adjusted automatically on and as of the
effective date of any change in the Eurodollar Reserve Percentage as it applies
to Eurocurrency liabilities, unless such change does not effect the cost to the
Bank of maintaining the Eurodollar Loan during the Eurodollar Period.
"Eurodollar Reserve Percentage": With respect to any Eurodollar Loan, the
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percentage applicable to new time deposits representing the maximum aggregate
incremental reserve, asset or special deposit requirements of the Bank
(disregarding any offsetting amounts that may be available to the Bank to
decrease such requirements to the extent that such offsetting amounts arose out
of transactions other than those contemplated by this Agreement) under
Regulation D and any other applicable loan laws with respect to new non-personal
time deposits in an aggregate amount equal to the amount of the Eurodollar Loan
and for a time period comparable to the
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number of days in the applicable Eurodollar Period. The determination by the
Bank of any applicable Eurodollar Reserve Percentage shall be conclusive in the
absence of manifest error.
"Event of Default": Any one of the occurrences described in Section 10.
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"Excess Incremental Term Loans": As defined in Subsection 3.1(a).
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"GAAP": Generally accepted accounting principles in effect on the date of this
Agreement, applied on a consistent basis.
"Incremental Term Loan Date": As defined Subsection 3.1(c)(i).
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"Incremental Term Loans": The loans described in Subsection 3.1(a) hereof
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"Incremental Term Notes": The Term Notes described in Subsection 3.1(g) hereof,
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as may be amended, restated, substituted for and/or extended from time to time.
"Indemnified Loss or Expense": The same meaning ascribed to said term in
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Subsection 5.1(d) hereof.
"Instruments": As such term is defined in paragraph (iv) of the definition of
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the term "Collateral" in this Subsection 1.1.
"Intangibles": As such term is defined in paragraph (iv) of the definition of
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the term "Collateral" in this Subsection 1.1.
"Internal Revenue Code": The Internal Revenue Code of 1986, as amended.
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"Interest Rate": The rate of interest applicable to any Loan or portion
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thereof, as more fully described in Subsections 2.1(c), 3.1(c) and 4.1(c)
hereof.
"Inventory": As such term is defined in paragraph (i) of the definition of the
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term "Collateral" in this Subsection 1.1.
"Landlord's/Warehouseman's Agreement": Any waiver or subordination agreement
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from a landlord or a warehouseman, as the case may be, where the Borrower is
located and/or maintains Collateral, in form and substance satisfactory to the
Bank.
"Letters of Credit": The same meaning ascribed to said term in Subsection
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2.1(i) hereof.
"LIBOR" or "London Interbank Offering Rate": With respect to any Eurodollar
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Loan, the rate for U.S. dollar deposits of that many months maturity as reported
on Telerate 3750 as of 11:00 a.m., London time on the second Eurodollar
Business Day before the relevant Eurodollar Period begins (or if not so
reported, the rate as determined by the Bank from another recognized source of
interbank quotation). The Bank's determination of LIBOR shall be conclusive in
the absence of manifest error.
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"Lien": Any mortgage, lien, judicial lien, encumbrance, security interest,
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charge, pledge, hypothecation, assignment, conditional sale or other title
retention agreement, and the like, relating to any real or personal property
interest of the Borrower, whether legal or equitable.
"Loan Documents": This Agreement, the Master Note, the Incremental Term Notes,
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the Equipment Line of Credit Note, the Equipment Term Notes, the Power of
Attorney, the Mortgage, the Assignment of Rents, each Landlord's/Warehousemen's
Agreement, the UCC-1 Financing Statements, and any other document, instrument or
writing executed and delivered pursuant hereto or thereto (excluding Swap
Agreements), and all as amended, restated, substituted for and/or extended from
time to time.
"Loans": Collectively, the Revolving Loan, the Incremental Term Loans
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(including, the Excess Incremental Term Loans) and the Equipment Loan.
"Master Note": The Master Note described in Subsection 2.1(g) hereof, as may be
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amended, restated, substituted for and/or extended from time to time.
"Mortgage": The Mortgage executed by the Borrower, substantially in the form
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annexed as Exhibit B, as may be amended, restated, substituted for and/or
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extended from time to time.
"Notes": The Master Note, the Incremental Term Notes, the Equipment Line of
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Credit Note and the Equipment Term Notes.
"Notice of Borrowing/Conversion": A notice, as described in Subsection 2.1(b)
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with respect to the Revolving Loan, in Subsection 3.1(a) with respect to
Incremental Term Loans and in Subsection 4.1(a) with respect to the Equipment
Term Loan, signed by the Chief Financial Officer or President of the Borrower
requesting an Advance and/or setting forth the information required pursuant to
the applicable Loan .
"Obligations": (i) Any and all indebtedness, obligations, letters of credit,
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including, without limitation, liabilities and agreements of every kind and
nature of the Borrower to or with the Bank, or to or with any affiliate of the
Bank, which affiliate has issued or extended credit to the Borrower on behalf of
or at the direction of the Bank, now existing or hereafter arising, pursuant to
this Agreement, or otherwise, whether in the form of refinancing, loans,
guarantees, the Bankers' acceptances, foreign exchange contracts, existing and
future obligations under or in connection with Swap Agreements, and letters of
credit, interest, charges, expenses, fees (including, without limitation
attorneys' fees); or otherwise, direct or indirect, (including, without
limitation, any participation or interest of the Bank in any obligation of the
Borrower to others) acquired outright, conditionally or as collateral security
from another, absolute or contingent, joint and/or several, liquidated or
unliquidated, due or not due, contractual or tortious, secured or unsecured,
arising by operation of law or otherwise, including, but without limiting
generality of the foregoing, indebtedness, obligations or liabilities to the
Bank by the Borrower as a member of any partnership, syndicate, association or
other group, and whether incurred by the Borrower as principal, surety,
endorser, guarantor, accommodation party or otherwise, together with any
extensions, renewals or modifications thereof; (ii) all obligations of the
Borrower for any future advances made by the Bank to the Borrower whether or not
evidenced by a promissory note and all obligations under any renewals,
extensions or changes in form of, or substitutions for, any of said
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indebtedness, obligations or liabilities; (iii) all sums and charges to be paid
to the Bank pursuant to this Agreement; (iv) all interest and late charges on
any of the foregoing; and (v) all obligations of the Borrower now or hereafter
existing under this Agreement.
"Obligors": The Borrower and any and all other Persons liable, either
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absolutely or contingently in connection with this Agreement not named herein,
including endorsers, sureties, guarantors and owners of any property securing
any sums due in connection with this Agreement.
"PBGC": The Pension Benefit Guaranty Corporation or any successor thereto.
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"Permitted Liens": (i) Liens with respect to equipment which is the subject of
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capitalized leases or purchase money financing to the extent permitted by the
terms of Subsection 9.23(a)(ii), (ii) those Liens described in Schedule 1.1
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annexed hereto, (iii) Liens with respect to assets which are the subject of an
acquisition permitted by the terms hereof and securing indebtedness permit under
Subsection 9.23(a)(iii) hereof.
"Person": An individual, or partnership, limited liability company, corporation
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(including a business trust), joint stock company, trust, unincorporated
association, joint venture or other entity or a governmental or any political
subdivision or agency thereof.
"Plan": Any plan subject to the minimum funding requirements of Section 412 of
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the Internal Revenue Code.
"Power of Attorney": The Power of Attorney executed by the Borrower,
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substantially in the form annexed hereto as Exhibit C.
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"Premises": The real estate located at 00 Xxxxxxxx Xxxx, Xxxxxx, Xxx Xxxxxx, as
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more particularly described on Schedule A to the Mortgage, which description is
incorporated herein by reference.
"Prime Rate": The rate of interest announced by the Bank from time to time as
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its "Prime Rate" and which is one of several interest rates used by the Bank.
The Prime Rate shall change each time the Bank's Prime Rate shall change,
effective on and as of the date of said change. The Bank lends at rates both
above and below the Bank's Prime Rate, and the Borrower acknowledges that the
Bank's Prime Rate is not represented or intended to be the lowest or most
favorable rate of interest offered by the Bank.
"Prime Rate Loan": Any Advance or any outstanding portion of a Loan that is
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based on the Prime Rate.
"Prime Rate Period": As to each Prime Rate Loan, the period commencing on the
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Business Day specified by the Borrower in any applicable Notice of
Borrowing/Conversion or, as to any subsequent borrowing, on the applicable
interest payment date and ending on the Business Day upon which the Borrower
repays that Prime Rate Loan (if available), or converts the Prime Rate Loan to a
Eurodollar Loan, provided no Prime Rate Period shall extend beyond the maturity
of such loan.
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"Reportable Event": As such term is defined in Title IV of ERISA.
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"Revolving Loan": The loan described in Section 2.
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"Subordinated Debt": All debt incurred at any time by the Borrower, the
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repayment of which is subordinated to the Obligations pursuant to a
subordination agreement, in form and substance satisfactory to the Bank.
"Subsidiary": Any corporation or entity with respect to which more than a
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majority (by number of votes) of the common stock of which is owned or
controlled directly or indirectly by the Borrower or one or more Subsidiaries of
the Borrower or by the Borrower and one or more Subsidiaries of the Borrower.
"Swap Agreement": Any swap agreement (as defined in 11 U.S.C. 101) with the
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Bank (or with any of its affiliates)
"Term Notes": The Equipment Term Notes and the Incremental Term Notes.
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"Termination Date": May 31, 2002 or such other date as the Bank may agree in
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writing to extend the Termination Date to, without there being any obligation on
the part of the Bank to extend the Termination Date.
1.2 Accounting Terms and Calculations. Unless otherwise defined or
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specified herein to the contrary, all accounting terms used herein shall be
construed and all accounting determinations hereunder shall be made in
accordance with GAAP.
1.3 Other Terms. Terms such as "accounts", "accounts receivable", "contract
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rights", "letters of credit", "investment property", "advices", "confirmations",
"equipment", "instruments", "chattel paper", "documents of title", "goods",
"general intangibles", "account debtors", "proceeds", "products", and the like,
shall, unless otherwise specifically defined herein, have the meanings
applicable to them for the purposes of Article 9 (Secured Transactions) of the
Uniform Commercial Code in force and effect in the State of New Jersey at the
date of this Agreement.
SECTION 2
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REVOLVING LOAN
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2.1 Subject to the terms and conditions of this Agreement, and provided
that no event or condition constituting a Default or an Event of Default has
occurred:
(a) General Terms. The Bank agrees to lend, re-lend, and make Advances under
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the Revolving Loan to the Borrower from time to time until the Termination Date,
amounts which shall not exceed in the aggregate, at any one time outstanding,
the sum of (i) FIVE MILLION AND 00/00 DOLLARS ($5,000,000) minus (ii) all
outstanding Letters of Credit under Subsection 2.1(i) hereof .
(b) Disbursements. Extensions of credit shall be made to the Borrower pursuant
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to the Revolving Loan either (i) in the form of Advances to any general deposit
account maintained by
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the Borrower with the Bank, or (ii) in the form of Letters of Credit pursuant to
Subsection 2.1(i) hereof. The Borrower shall give the Bank irrevocable
telephonic notice (confirmed in writing) of each proposed Advance or rate
conversion not later than 11:00 a.m. local time at the office of the Bank first
shown above (a) on the same Business Day as each proposed Advance or rate
conversion to a Prime Rate Loan and (b) at least two (2) Eurodollar Business
Days before each proposed Advance or rate conversion to a Eurodollar Loan. Each
such notice (a "Notice of Borrowing/Conversion") shall specify (i) the date of
such Advance or rate conversion, which shall be a Business Day, in the case of a
Prime Rate Loan, and a Eurodollar Business Day, in the case of a Eurodollar Loan
and, in the case of a conversion from a Eurodollar Loan, the last day of a
Eurodollar Period, (ii) the amount of each Advance or the amount to be
converted, (iii) the Interest Rate selected by the Borrower, and (iv) except for
the Prime Rate Loans, the duration of the Eurodollar Period applicable thereto,
which period must correspond to one of the Eurodollar Rate options. Notices
received after 11:00 a.m. local time at the office of the Bank shall be deemed
received on the next Business Day.
(c) Interest Rate.
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(i) At the election of the Borrower, the unpaid principal balance of each
Advance shall bear interest from the date such Advance is made available to the
Borrower at the Eurodollar Rate plus the Applicable Margin or the Prime Rate
minus the Applicable Margin as selected by the Borrower in accordance herewith
(each, an "Interest Rate"). The Borrower shall select the Interest Rate and for
each Interest Rate, except the Prime Rate, the period of time such Interest Rate
will continuously apply to the end of the applicable Eurodollar Period pursuant
to the Notice of Borrowing/Conversion. There shall be no more than three (3)
Eurodollar Loans outstanding with respect to the Revolving Loan at any time and
the minimum amount of any Eurodollar Loan shall be at least $250,000.
(ii) When an Interest Rate based on the Prime Rate is selected for an Advance,
it shall be adjusted daily as applicable to reflect the Bank's Prime Rate, and
the Prime Rate shall continue to apply until another Interest Rate option for
that Advance is selected pursuant to Subsection 2.1(b) hereof. When an Interest
Rate based on a Eurodollar Rate is selected for an Advance, such rate shall be
fixed for the Eurodollar Period and shall apply for that Advance for successive
Eurodollar Periods at the then prevailing successive rate until another Interest
Rate option for that Advance is selected pursuant to Subsection 2.1(b) hereof.
Until the Borrower selects an initial Interest Rate as provided herein, the
Advance shall bear interest at the Prime Rate plus the Applicable Margin.
(iii) In connection with each Eurodollar Loan, the Borrower, by giving notice at
the times described in Subsection 2.1(b), shall select a Eurodollar Period to be
applicable thereto, which Eurodollar Period shall be a period corresponding to
one of the Eurodollar Period options. No Eurodollar Period selection is
required for a Prime Rate Loan.
(iv) Interest and fees, if any, shall be computed on the basis of a 360-day year
for the actual number of days in the applicable period ("Actual/360
Computation"). The Actual/360 Computation determines the annual effective yield
by taking the stated (nominal) rate for a year's period and then dividing said
rate by 360 to determine the daily periodic rate to be applied for each day in
the applicable period. Application of the
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Actual/360 Computation produces an annualized effective rate exceeding that of
the nominal rate.
(d) Payments of Principal and Interest. The unpaid principal balance of
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all Advances made under the Revolving Loan and all unpaid and accrued interest
thereon shall be payable by the Borrower to the Bank on the Termination Date, in
immediately available funds. Payment of interest on all outstanding Advances
shall occur monthly, in arrears, in immediately available funds, on the first
Business Day of each month beginning on the first Business Day in the month next
succeeding the Closing Date. All payments received during normal banking hours
after 2:00 p.m. local time at the office of the Bank first shown above shall be
deemed received at the opening of the next Business Day. All payments of
interest and principal, howsoever designated by the Borrower, shall be applied
first on account of accrued interest and the remainder of such payments, if any,
on account of the unpaid principal balance. However, and notwithstanding
anything to the contrary contained herein, interest on Eurodollar Loans shall be
payable on the last day of each Eurodollar Period and every third month for
Eurodollar Periods longer than three months.
(e) Manner of Payment. The Borrower hereby authorizes (but shall not require)
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the Bank to debit any account maintained by the Borrower with the Bank, at any
time, on any date on which payment of interest and/or principal is due under the
Revolving Loan, in an amount equal to the amount of such payment.
(f) Statement of Account. At least once each month, the Bank shall render and
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send to the Borrower a statement of account showing amounts loaned, all other
charges, expenses and items chargeable to the Borrower, payments made by the
Borrower against the unpaid principal balance on the Revolving Loan, other
appropriate debits and credits and the balance of the unpaid principal amount as
of the date of such statement of account for Advances made under the Revolving
Loan. The statement of account shall be presumed to be correct in all respects,
except for specific objections which the Borrower makes in writing within thirty
(30) days from the date upon which the statement of account is sent. In the
event that the Borrower makes an objection, such objection shall contain
evidence of the alleged error, which evidence shall be reviewed by the Bank.
(g) Master Note. Advances under the Revolving Loan shall be evidenced by the
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Master Note, in substantially the form annexed hereto as Exhibit D, and the
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balance due from time to time on the Master Note shall be conclusively evidenced
by the Bank's records of disbursements and repayments, subject to Subsection
2.1(f).
(h) Prepayment. Eurodollar Loans may be prepaid prior to the end of the
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applicable Eurodollar Period upon three (3) Eurodollar Business Days advance
written notice to the Bank, and upon payment of the sums described in Subsection
5.1(d) hereof. Prime Rate Loans may be prepaid at any time.
(i) Letters of Credit. In lieu of the disbursement of Advances as provided in
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Subsection 2.1(b), the Bank may, at its option and upon the Borrowers'
completion and delivery of a written application therefor, issue Standby Letters
of Credit, in form and substance satisfactory to the Bank (the "Letters of
Credit"), under the Revolving Loan, which Letters of Credit shall not have terms
of greater than two (2) years. The issuance of each Letter of Credit shall be
subject to the Bank's terms and conditions for issuance; provided, however, that
the maximum aggregate amount which
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may be payable under the terms of the Letters of Credit at any time then
outstanding shall not exceed the maximum amount advanceable under the Revolving
Loan reduced by the Advances then outstanding. In no event, however, may the
maximum aggregate amount available to be drawn plus unreimbursed drawings under
the terms of the Letters of Credit exceed the sum of $2,000,000. The Borrower
agrees to pay to the Bank on each Letter of Credit an issuance fee equal to one
half of one percent (1/2%) per annum on the date the Letter of Credit is issued
and on each anniversary date thereof and to pay the Bank its standard fees for
miscellaneous services relating to the issuance and maintenance of the Letters
of Credit, as such fees are announced from time to time by the Bank. The term
of any Letter of Credit shall have an expiration date which is not later than
the Termination Date. The Borrower shall give the Bank at least five (5)
Business Days' notice of its request to issue a Letter of Credit. Each such
notice shall be irrevocable and confirmed immediately by delivery to the Bank of
a request for a Letter of Credit on the Bank's customary form. Each payment by
the Bank under a Letter of Credit, to the extent not reimbursed by the Borrower,
in immediately available funds, on the same date as the Letter of Credit is
drawn, shall, subject to the restrictions set forth herein, be converted to a
Prime Rate Loan under the Revolving Loan.
(j) Unused Line Fee. The Borrower shall pay to the Bank on December 1, March 1,
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June 1, and September 1 of each year an unused line fee equal to one quarter of
one percent (1/4 of 1%) per annum of the difference between (a) Five Million and
00/100 Dollars ($5,000,000) and (b) the average daily balance outstanding under
the Revolving Loan, (including outstanding Letters of Credit) for the prior
quarterly period.
SECTION 3
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INCREMENTAL TERM LOANS
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3.1 Subject to the terms and conditions of this Agreement, and provided no
event or condition constituting a Default or an Event of Default has occurred:
(a) General Terms. The Bank agrees to lend to the Borrower individual term
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loans in increments of $250,000.00 or more (collectively, the "Incremental Term
Loans") up to the aggregate principal sum of $7,692,500, pursuant to the terms
hereof. If the Borrower shall request Incremental Term Loans which, when added
together with all other Incremental Term Loans, would result in the aggregate
principal balance of all Incremental Term Loans exceeding $7,692,500, such
requested Incremental Term Loans (collectively, the "Excess Incremental Term
Loans") shall only be made by the Bank if the Bank, in its sole and absolute
discretion, determines to honor such requests, and if the Bank so desires to
honor such requests, upon the terms and conditions imposed by the Bank, and in
no event shall the aggregate principal amount of all Incremental Term Loans
exceed FIFTEEN MILLION AND 00/100 DOLLARS ($15,000,000.00). The Borrower's right
to request the issuance of Incremental Term Loans from the Bank shall terminate
on the Termination Date and the Bank shall have no obligation to make any
Incremental Term Loans after such date.
(b) Disbursements. The proceeds of the Incremental Term Loans shall be
-------------
delivered to the Borrower by credit to any general deposit account maintained by
the Borrower with the Bank, or in such other manner as the Borrower may
reasonably request. The Borrower shall give the Bank
11
irrevocable telephonic notice (confirmed in writing) of each Incremental Term
Loan or rate conversion not later than 11:00 a.m. local time at the office of
the Bank first shown above (a) on the same Business Day as each proposed
Incremental Term Loan or rate conversion to a Prime Rate Loan and (b) at least
two (2) Eurodollar Business Days before each proposed Incremental Term Loan or
rate conversion to a Eurodollar Loan. Each such notice (a "Notice of
Borrowing/Conversion") shall specify (i) the date of such Incremental Term Loan
or conversion date, which shall be a Business Day, in the case of a Prime Rate
Loan, a Eurodollar Business Day in the case of a Eurodollar Loan and, in the
case of a conversion from a Eurodollar Loan, the last day of a Eurodollar
Period, (ii) the amount of each Incremental Term Loan or the amount to be
converted, (iii) the Interest Rate selected by the Borrower, and (iv) the
selected method of repayment of the Incremental Term Loan provided for in
Subsection 3.1(d)(i) and (ii) hereof. Notices received after 11:00 am local
time at the office of the Bank shall be deemed received on the next Business
Day.
(c) Interest Rate.
--------------
(i) At the election of the Borrower, the unpaid balance of each Incremental
Term Loan shall bear interest from the date said Incremental Term Loan is made
(the "Incremental Term Loan Date") at the Eurodollar Rate plus the Applicable
Margin or the Prime Rate minus the Applicable Margin as selected by the Borrower
in accordance herewith (each, an "Interest Rate"). There shall be no more than
ten (10) Eurodollar Loans outstanding with respect to all Incremental Term Loans
at any one time and the minimum amount of any Eurodollar Loan shall be at least
$250,000. There shall be no Incremental Term Loan bearing interest, in part, at
the Eurodollar Rate plus the Applicable margin and, in part, at the Prime Rate
minus the Applicable Margin.
(ii) When an Interest Rate based on the Prime Rate is selected for an
Incremental Term Loan, it shall be adjusted daily as applicable to reflect the
Bank's Prime Rate and the Prime Rate shall continue to apply until another
Interest Rate option is selected pursuant to 3.1(b)hereof. When an Interest
Rate based on a Eurodollar Rate is selected for an Incremental Term Loan, such
Interest Rate shall be fixed for the Eurodollar Period and shall apply for that
Incremental Term Loan for successive Eurodollar Periods at the then prevailing
successive rate until the Prime Rate option is selected pursuant to Subsection
3.1(b) hereof. Until the Borrower selects an initial Interest Rate as provided
herein, an Incremental Term Loan shall bear interest at the Prime Rate minus the
Applicable Margin.
(iii) In connection with each Eurodollar Loan, the Eurodollar Period shall be a
one month Eurodollar Period. No Eurodollar Period selection is required for a
Prime Rate Loan.
(iv) Interest and fees, if any, shall be computed on the basis of the Actual/360
Computation.
12
(d) Payments of Principal and Interest.
--------------------------------------
(i) Each Incremental Term Loan, which is not an Excess Incremental Term
Loan, shall, at the election of the Borrower (as provided in the Notice of
Borrowing/Conversion) be repaid pursuant to one of the following options:
(A) The unpaid principal balance of such Incremental Term Loan shall be
payable by the Borrower on a term basis over a period not exceeding seven (7)
years from the Incremental Term Loan Date. Payment of principal on each such
Incremental Term Loan shall occur in equal monthly installments, based upon a
fifteen (15) year amortization, in immediately available funds, on the first
Business Day of each month beginning on the first Business Day in the month next
succeeding the Incremental Term Loan Date; or
(B) The unpaid principal balance of such Incremental Term Loan shall be payable
by the Borrower on a full amortizing term basis over a period not exceeding ten
(10) years from the Incremental Term Loan Date. Payment of principal on each
such Incremental Term Loan shall occur in equal monthly installments, in
immediately available funds, on the first Business Day of each month beginning
on the first Business Day in the month next succeeding the Incremental Term Loan
Date.
(ii) The unpaid principal balance of each Excess Incremental Term Loan
shall be payable by the Borrower on a full amortizing term basis over a period
not exceeding seven (7) years from the Incremental Term Loan Date. Payment of
principal on each such Excess Incremental Term Loan shall occur in equal monthly
installments, in immediately available funds, on the first Business Day of each
month beginning on the first Business Day in the month next succeeding the
Incremental Term Loan Date.
(iii) All payments received during normal Banking hours after 2:00 p.m. local
time at the office of the Bank first shown above shall be deemed received at the
opening of the next Business Day. All payments of interest and principal,
howsoever designated by the Borrower, shall be applied first on account of
accrued interest and the remainder of such payments, if any, on account of the
unpaid principal balance. However, and notwithstanding anything to the contrary
contained herein, interest on Eurodollar Loans shall be payable on the last day
of each Eurodollar Period.
(e) Manner of Payment. The Borrower authorizes (but shall not require)
-------------------
the Bank to debit any account maintained by the Borrower with the Bank, at any
date on which a payment is due under any Incremental Term Loan, in an amount
equal to any unpaid portion of such payment.
(f) Statement of Account. At least once each month, the Bank shall render and
---------------------
send to the Borrower a statement of account showing amounts loaned, all other
charges, expenses and items chargeable to the Borrower, payments made by the
Borrower against the unpaid principal balance on the Incremental Term Loans,
other appropriate debits and credits and the balance of the unpaid principal
amount as of the date of such statement of account for Incremental Term Loans
made. The statement of account shall be presumed to be correct in all respects,
except for specific
13
objections which the Borrower makes in writing within thirty (30) days from the
date upon which the statement of account is sent. In the event that the
Borrower makes an objection, such objection shall contain evidence of the
alleged error, which evidence shall be reviewed by the Bank.
(g) Incremental Term Note. The principal amount of each Incremental Term Loan
----------------------
shall be evidenced by an Incremental Term Note, substantially in the form of
attached hereto as Exhibit E, and the balance due from time to time on the
----------
Incremental Term Notes shall be conclusively evidenced by the Bank's records,
disbursements and repayments, subject to Subsection 3.1(f) hereof.
(h) Prepayment. Eurodollar Loans may be prepaid prior to the end of the
----------
applicable Eurodollar Period upon the giving of three (3) Eurodollar Business
Days advance written notice to the Bank, and upon payment of the sums described
in Subsection 5.1(d) hereof. Prime Rate Loans may be repaid at any time.
SECTION 4
---------
EQUIPMENT LOAN
--------------
4.1 Subject to the terms and conditions of this Agreement, and provided no
event or condition constituting a Default or an Event of Default has occurred:
(a) General Terms. The Bank agrees to make Advances (the "Equipment Loan
--------------
Advances") to the Borrower from time to time until the Termination Date, amounts
which shall not exceed in the aggregate, at any time outstanding, the sum of ONE
MILLION AND 00/100 DOLLARS ($1,000,000.00) (the "Equipment Loan Advance Limit").
(b) Disbursements. The proceeds of the Equipment Loan Advances shall be
-------------
delivered to the Borrower by credit to any general deposit account maintained by
the Borrower with the Bank, or in such other manner as the Borrower may
reasonably request. The Borrower shall give to the Bank irrevocable telephonic
notice (confirmed in writing) of each proposed Equipment Loan Advance no later
than 11:00 a.m. local time at the office of the Bank first shown above (a) on
the same Business Day as each proposed Equipment Loan Advance or rate conversion
to a Prime Rate Loan and (b) at least two (2) Eurodollar Business Days before
each such proposed Equipment Loan Advance or rate conversion to a Eurodollar
Loan. Each such notice (a "Notice of Borrowing/Conversion") shall specify
and/or provide (i) the date of such Equipment Loan Advance or conversion, which
shall be a Business Day, in the case of a Prime Rate Loan, a Eurodollar Business
Day, in the case of a Eurodollar Loan and, in the case of a conversion from a
Eurodollar Loan, the last day of the Eurodollar Period, (ii) the amount of each
Equipment Loan Advance or the amount to be converted, (iii) the Interest Rate
selected by the Borrower, and (iv) invoices for the equipment being purchased.
Notices received after 11:00 am local time at the office of the Bank shall be
deemed received on the next Business Day.
(c) Interest Rate.
--------------
(i) At the election of the Borrower, the unpaid principal amount due under the
Equipment Line of Credit Note, as well as the unpaid principal amount of the
Equipment Term Notes, shall bear interest at the Eurodollar Rate plus the
Applicable Margin or the Prime rate minus the
14
Applicable Margin selected by the Borrower in accordance herewith (each an
"Interest Rate"). There shall be no more than one (1) Eurodollar Loan
outstanding with respect to the Equipment Line of Credit Note and with respect
to each Equipment Term Note at any one time and the minimum amount of any
Eurodollar Loan shall be at least $250,000. There shall be no Equipment Term
Note bearing interest, in part, at the Eurodollar Rate plus the Applicable
Margin and, in part, at the Prime Rate minus the Applicable Margin.
(ii) When an Interest Rate based on the Prime Rate is selected for the
Equipment Loan, it shall be adjusted daily as applicable to reflect the Bank's
Prime Rate and the Prime Rate shall continue to apply until another Interest
Rate option is selected pursuant to 4.1(b) hereof. When an Interest Rate based
on a Eurodollar Rate is selected for the Equipment Loan, such Interest Rate
shall be fixed for the Eurodollar Period and shall apply for that portion of the
Equipment Loan for successive Eurodollar Periods at the then prevailing
successive rate until the Prime Rate option is selected pursuant to Subsection
4.1(b) hereof. Until the Borrower selects an initial Interest Rate as provided
herein, the Equipment Loan shall bear interest at the Prime Rate minus the
Applicable Margin.
(iii) In connection with each Eurodollar Loan, the Eurodollar Period shall be a
one month Eurodollar Period. No Eurodollar Period selection is required for a
Prime Rate Loan.
(iv) Interest and fees, if any, shall be computed on the basis of the
Actual/360 Computation.
(d) Payments of Principal and Interest. The unpaid principal balance of each
------------------------------------
Equipment Term Note shall be payable by the Borrower on a fully amortizing term
basis over a period of five (5) years from the issuance of such Equipment Term
Note. Principal payments on each Equipment Term Note shall be made in equal
monthly installments, in immediately available funds, on the first Business Day
of each month beginning on the first Business Day in the month next succeeding
the date of the issuance of such Equipment Term Note.
All payments received during normal the banking hours after 2:00 p.m. local time
at the office of the Bank first shown above shall be deemed received at the
opening of the next Business Day. All payments of interest and principal,
howsoever designated by the Borrower, shall be applied first on account of
accrued interest and the remainder of such payments, if any, on account of the
unpaid principal balance. However, and notwithstanding anything to the contrary
contained herein, interest on Eurodollar Loans shall be payable on the last day
of each Eurodollar Period.
(e) Manner of Payment. The Borrower authorizes (but shall not require) the
-------------------
Bank to debit any account maintained by the Borrower with the Bank, at any date
on which a payment is due under the Equipment Line of Credit Note and/or the
Equipment Term Notes in an amount equal to any unpaid portion of such payment.
(f) Statement of Account. At least once each month, the Bank shall render and
---------------------
send to the Borrower a statement of account showing amounts loaned, all other
charges, expenses and items chargeable to the Borrower, payments made by the
Borrower against the unpaid principal balance on the Equipment Loan, other
appropriate debits and credits and the balance of the unpaid principal amount as
of the date of such statement of account for Equipment Loan made. The statement
of
15
account shall be presumed to be correct in all respects, except for specific
objections which the Borrower makes in writing within thirty (30) days from the
date upon which the statement of account is sent. In the event that the
Borrower makes an objection, such objection shall contain evidence of the
alleged error, which evidence shall be reviewed by the Bank.
(g) Equipment Line of Credit Note. Initially, the principal amount of the
---------------------------------
Equipment Loan Advances to be made by the Bank shall all be evidenced by a
single promissory note of the Borrower (the "Equipment Line of Credit Note"),
substantially in the form of attached hereto as Exhibit F, in the principal face
---------
amount equal to the Equipment Loan Advance Limit. On March 1, 2000, March 1,
2001 and May 31, 2002 ("Conversion Dates"), the outstanding principal amount
advanced by the Bank as Equipment Loan Advances since the Closing Date or the
last Conversion Date, as the case may be, shall be converted to a term loan and
evidenced by a separate promissory note of the Borrower (each such promissory
note, as it may be amended, restated, substituted or extended, an "Equipment
Term Note") in the principal face amount equal to such amount of said Equipment
Loan Advances, substantially in the form attached hereto as Exhibit G. The
---------
Equipment Term Notes shall be dated the date of said Conversion Date.
(h) Prepayment. Eurodollar Loans may be prepaid prior to the end of the
----------
applicable Eurodollar Period upon the giving of three (3) Eurodollar Business
Days advance written notice to the Bank, and upon payment of the sums described
in Subsection 5.1(d) hereof. Prime Rate Loans may be repaid at any time.
SECTION 5
---------
PROVISIONS REGARDING EURODOLLAR LOANS
-------------------------------------
5.1 The following shall apply with respect to Eurodollar Loans provided
for herein:
(a) If on or prior to the first day of any Eurodollar Period with respect
to a Eurodollar Loan, deposits in dollars (in the applicable amounts) are not
being offered to the Bank in the relevant market for such Eurodollar Period, or
the rate being offered does not adequately reflect the cost of funds to the
Bank, the Bank shall forthwith give notice thereof to the Borrower, whereupon
until the Bank notifies the Borrower that the circumstances giving rise to such
suspension no longer exist, the obligations of the Bank to make Eurodollar Loans
shall be suspended. During any such suspension, unless the Borrower notifies
the Bank at least two (2) Business Days before the date of any Eurodollar Loan
for which a Notice of Borrowing/Conversion has previously been given that it
elects not to borrow on such date, the Borrower shall instead borrow at the
Prime Rate minus the Applicable Margin with respect to the Revolving Loan or if
the Borrower has entered into a Swap Agreement with respect to the Loan in
question the rate payable under the Swap Agreement.
(b) If, after the date of this Agreement, the adoption of or any change in any
applicable law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central the Bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by the Bank with any request or directive (whether or not having the
force of law) of any such authority, central the Bank or comparable agency shall
make it unlawful or impossible for the Bank to make, maintain or fund its
Eurodollar Loans, whereupon
16
until the Bank notifies the Borrower that the circumstances giving rise to such
suspension no longer exist, the obligation of the Bank to make Eurodollar Loans
shall be suspended. If the Bank shall determine that it may not lawfully
continue to maintain and fund any of its outstanding Eurodollar Loans to
maturity and shall so specify in such notice, the Borrower shall immediately
prepay in full the then outstanding principal amount of each such Eurodollar
Loan, together with accrued interest thereon and all other amounts to be paid
thereon as if such prepayment were to be made pursuant to Subsection 5.1(d).
During any such suspension, the Borrower shall instead borrow at the Prime Rate
minus the Applicable Margin with respect to the Revolving Loan or if the
Borrower has entered into a Swap Agreement with respect to the Loan in question
at the rate payable under the Swap Agreement.
(c) Increased Cost and Reduced Return.
(1) If after the date hereof, the adoption of, or any change in, any
applicable law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central the Bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by the Bank with any request or directive (whether or not having the
force of law) of any such authority, central the Bank or comparable agency: (A)
shall subject the Bank to any tax, duty or other charge with respect to its
Eurodollar Loans or its obligation to make Eurodollar Loans, or shall change the
basis of taxation of payments to the Bank of the principal of or interest on its
Eurodollar Loans or any other amounts due under this Agreement in respect of its
Eurodollar Loans or its obligation to make Eurodollar Loans (except for changes
in the rate of tax on the overall net income of the Bank imposed by the
jurisdiction in which the Bank's principal executive office is located); or (B)
shall impose, modify or deem applicable any reserve, special deposit, capital
adequacy requirement or similar requirement (including, without limitation, any
such requirement imposed by the Board of Governors of the Federal Reserve
System, but excluding, with respect to any Eurodollar Loan, any such requirement
included in an applicable Eurodollar Reserve Percentage) against assets of,
deposits with or for the account of, or credit extended by, the Bank; or (C)
shall impose on the Bank or on the London interbank market any other condition
affecting its Eurodollar Loans or its obligation to make Eurodollar Loans; and
the result of any of the foregoing is to increase the cost to the Bank of making
or maintaining any Eurodollar Loan, or to reduce any amount received or
receivable by the Bank under this Agreement by an amount deemed by the Bank to
be material, then the Borrower shall pay to the Bank, with respect to any new
Eurodollar Loans (whether in the form of a new borrowing, conversion or
renewal), such additional amount or amounts as will compensate the Bank for such
increased cost or reduction.
(2) The Bank will promptly notify the Borrowers of any event of which it has
knowledge, occurring after the date hereof, which will entitle the Bank to
compensation pursuant to Subsection 5.1(d) and will designate a different
lending office if such designation will avoid the need for, or reduce the amount
of, such compensation and will not, in the reasonable judgment of the Bank, be
otherwise disadvantageous to the Bank. A certificate of the Bank claiming
compensation under Subsection 5.1(d) and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. The Bank shall use its best efforts to provide to the Borrower
with the
17
calculation of the Bank's determination of the amount demanded. In determining
such amount, the Bank may use any reasonable averaging and attribution methods.
(d) The Borrower shall indemnify the Bank against the Bank's loss or
expense in employing deposits as a consequence of (a) the Borrower's failure to
make any payment when due on any Loan or part thereof bearing interest at a
Eurodollar Rate, (b) any payment, prepayment or conversion of any Loan or part
thereof on a date other than the last day of the Eurodollar Period ("Indemnified
Loss or Expense"). The amount of such Indemnified Loss or Expense shall be
determined by the Bank based upon the assumption that the Bank funded 100% of
that portion of the Loan in the London interbank market.
SECTION 6
---------
COLLATERAL
----------
6.1 In consideration of the Bank's making the Loans to the Borrower in
accordance with the terms and conditions of this Agreement, and to secure
payment and performance of all of the Obligations of the Borrower to the Bank:
(a) Grant of Security Interest. The Borrower hereby grants to the Bank a
-----------------------------
security interest in the Collateral, which security interest shall remain in
full force and effect until all of the Obligations of the Borrower to the Bank
are fully paid and satisfied. Notwithstanding anything contained herein to the
contrary, although the Borrower is granting in favor of the Bank a security
interest in all Collateral, no matter where it is located, the Borrower makes no
representation with respect to the enforceability (including the purported grant
of said security interest in the Collateral under the laws of jurisdictions
outside the United States) or perfection of any such security interest in
Collateral located outside the United States.
(b) Collateral in the Bank's Possession. As further security for the full and
------------------------------------
prompt payment of the Obligations, the Borrower hereby grants to the Bank a Lien
upon and security interest in and to all amounts that may be owed from time to
time to the Borrower by the Bank in any capacity, including, but with-out
limitation, any balance or share belonging to the Borrower of any deposit or
other account with the Bank, which Lien and security interest shall be
independent of any right of set off which the Bank may have. The Borrower also
hereby grants the Bank a Lien upon and security interest in any securities,
instruments or other property owned by the Borrower or in which the Borrower has
an interest, which now or hereafter are in the possession or control of the Bank
or in transit by mail or carrier to or from the Bank or in possession of any
Person acting in the Bank's behalf, without regard to whether the Bank received
the same in pledge, for safekeeping or otherwise.
(c) Real Estate. As further security for the full and prompt payment of the
------------
Incremental Term Loans and the Equipment Loan, the Borrower shall grant to the
Bank a first priority lien upon and security interest in and to the Premises, as
well as in and to all fixtures and improvements thereon, pursuant to the terms
of the Mortgage. The Borrower shall also execute the Assignment of Rents, which
shall assign the Borrower's interest in and to all rents and leases in the
Premises to the Bank as additional security.
18
------
SECTION 7
---------
CONDITIONS PRECEDENT
--------------------
7.1 Conditions Precedent to the Loans. The duty of the Bank to make
------------------------------------
the Loans is conditioned upon prior delivery by the Borrower to the Bank of the
following, each completed, executed, dated, and in form and substance
satisfactory to the Bank:
(a) Agreement. This Agreement, properly executed.
---------
(b) Master Note. The Master Note, properly executed.
------------
(c) Incremental Term Note. Any Incremental Term Note, properly executed.
-----------------------
(d) Equipment Line of Credit Note. The Equipment Line of Credit Note,
---------------------------------
properly executed, and dated the date thereof.
(e) Mortgage. The Mortgage, properly executed.
--------
(f) Assignment of Rents. The Assignment of Rents, properly executed.
---------------------
(g) Power of Attorney. The Power of Attorney, properly executed.
-------------------
(h) Resolutions of the Borrower. A copy, certified by the Secretary or
------------------------------
Assistant Secretary of the Borrower, of a resolution of the Borrower, in form
and substance satisfactory to the Bank, authorizing the execution, delivery and
performance of the appropriate Loan Documents, authorizing the granting of the
security interest in the Collateral and the Premises, and authorizing the
transactions contemplated by all of the Loan Documents and all such other and
further actions in connection with this Agreement and the other Loan Documents
as designated officers of the Borrower may deem necessary and proper.
(i) Certificate of Incumbency. A certificate by the Secretary or Assistant
--------------------------
Secretary of the Borrower certifying the names and true signatures and
incumbency of each of the duly elected officers signing the documents described
in Subsection 7.1(h), together with a certificate by another officer of the
Borrower certifying as to the name, true signature and incumbency of the
Secretary or Assistant Secretary of the Borrower.
(j) Certificate of Incorporation of the Borrower. A copy, certified by the
---------------------------------------------
Department of Treasury of the State of New Jersey, of the Certificate of
Incorporation of the Borrower, along with any amendments thereto.
(k) Good Standing. Certificate of the appropriate governmental office of
--------------
each state where the Borrower is qualified to do business, dated within thirty
(30) days prior to the date of this Agreement, as to the good standing of the
Borrower in such jurisdiction.
(l) Bylaws. A copy, certified by the Corporate Secretary or Assistant
------
Secretary of the Borrower, of its Bylaws.
19
(m) Insurance. An endorsement satisfactory to the Bank in form and
---------
substance, of a reputable insurance company, licensed to conduct business in the
State of New Jersey, of appropriate insurance as required by Subsection 9.6.
(n) UCC, Federal Tax Lien, State Tax Lien, Judgment, and Franchise Tax Lien
------------------------------------------------------------------------
Searches. UCC, Federal tax lien, state tax lien, franchise tax lien and
--------
judgment, searches against the Borrower conducted where the Borrower is located,
incorporated, or maintains any of the Collateral, all said searches to be
conducted against the corporate names and any other trade or alternative name of
the Borrower.
(o) Terminations and Discharges. Proof, satisfactory to the Bank in form
-----------------------------
and substance, of the satisfaction, termination and discharge of any Liens other
than Permitted Liens and the Liens created by this Agreement and the other Loan
Documents.
(p) Financing Statements. Proof, in form satisfactory to the Bank, of the
---------------------
filing of UCC-1 financing statements covering the Collateral with the Department
of Treasury of New Jersey, the Middlesex County Clerk and any other jurisdiction
where the Borrower is located or the Collateral is located.
(q) Opinion. The opinion of counsel to the Borrower, in form and substance
-------
satisfactory to the Bank's counsel.
(r) Landlord's/Warehouseman's Agreement. A Landlord's/Warehouseman's
------------------------------------
Agreement, properly executed , for each location leased or warehoused by the
Borrower in the United States, if any, provided that such
Landlord's/Warehouseman's Agreement shall not be required for the Borrower's
present Elmwood Park, New Jersey warehouse location so long as no more than
$20,000 of Inventory is maintained there at any one time.
(s) Leases and Warehouse Agreements. Copies of all leases and warehouse
----------------------------------
agreements where the Borrower leases or warehouses the space in the United
States, if any.
(t) Closing Fee. Payment of the remaining portion of the $30,000 closing
------------
fee.
(u) Pension Plans. Evidence of compliance with ERISA of all pension and
--------------
profit-sharing plans.
(v) A Certificate as to Location of Execution. A certificate as to the
----------------------------------------------
location of the execution of the Loan Documents, signed by the Borrower and the
Bank, in form and substance satisfactory to the Bank.
(w) Environmental Affidavit and Environmental Indemnification. The
-------------------------------------------------------------
Environmental Affidavit and Environmental Indemnification, in form and substance
satisfactory to the Bank.
(x) Letter of Non-Applicability. A Letter of Non-Applicability regarding
-----------------------------
the Premises to the extent that the Borrower acquired the Premises after
December 31, 1983.
20
(y) Affidavit of Title. An Affidavit of Title reflecting, among other
--------------------
things, that there are no Liens upon the Premises which are senior to the Lien
of the Mortgage.
(z) Mortgage Title Insurance Policies. A Mortgage Title Insurance Policy
------------------------------------
("Title Policy") together with all such endorsements as the Bank may request,
issued by a title company satisfactory to the Bank ("Title Company"), insuring
that the Borrower owns the land and improvements constituting the Premises
covered by the Mortgage in fee simple and that the Mortgage is a valid first
lien on the Premises covered thereby and the Premises shall be clear of
mechanics' Liens, municipal Liens except for the Lien of current real estate
taxes not yet due and payable, and free and clear of all other Liens or
objections except those permitted by the Bank.
(aa) Survey. Survey of the Property, which survey shall be certified to the
------
Bank and the Title Company and shall show the location of all improvements
appurtenant thereto, utility facilities servicing same and any driveways,
easements, fences and encroachments and all cross easements for utilities,
parking, ingress and egress, including, but not limited to, all of the
easements, rights of way, encroachments or other title exceptions raised on the
title report, binder or commitment and remaining in the Title Policy as title
exceptions approved by the Bank;
(bb) Appraisal. An appraisal of the Premises performed by the Bank at the
---------
Borrower's expense, which appraisal is satisfactory to the Bank, in its sole and
absolute discretion, and the cost of which appraisal is paid by the Borrower.
(cc) CPLP Coverage. The Borrower shall obtain, and pay all fees and
--------------
expenses with respect thereto, Lender Environmental Collateral Protection
Liability Program (CPLP) Coverage with respect to the Premises, to be maintained
for so long as any Obligations remain outstanding.
(dd) Tax Collector's Letter. Tax collector's letter pertaining to the
------------------------
Premises, duly executed by the Bank and acknowledged by the Borrower;
(ee) Payment of Title Policy. Evidence of payment of premium for the Title
------------------------
Policy;
(ff) Notification Letter. Letter to the tax collector pertaining to the
--------------------
Premises notifying the tax collector of Bank's Mortgage executed by the
Borrower;
(gg) Appraisal Fee and Appraisal Review Fee. Payment to the Bank for the
-----------------------------------------
appraisal fee, in the amount of $2,800, and the appraisal review fee, in the
amount of $500.
(hh) Authorization Change Form. The Bank's Authorization Change Form, duly
--------------------------
completed and executed by the Borrower.
(ii) Other Conditions. All other requirements of the Bank in its sole
-----------------
discretion.
21
7.2 Conditions Precedent to All Advances and Loans. The making by the Bank
-----------------------------------------------
of any Advance , Loan, or the issuance of any Letter of Credit subsequent to the
date of this Agreement is subject to the satisfaction of the following
conditions precedent:
(a) Compliance with this Agreement and other Loan Documents. The Borrower
------------------------------------------------------------
shall have complied and shall then be in compliance with the terms, covenants
and conditions of this Agreement and the other Loan Documents.
(b) No Default or Event of Default. There shall exist no Default or Event of
--------------------------------
Default.
(c) Representations and Warranties. The representations and warranties
--------------------------------
contained in Section 8 hereof shall be true and with the same effect as through
such representations and warranties had been made at the time of the making of
each Advance and/or Loan, and the issuance of each Letter of Credit.
(d) Approvals or Documents. The Bank shall have received such other approvals
-----------------------
or documents as the Bank may reasonably require or request.
(e) No Material Adverse Change. The Chief Executive Officer or Chief Financial
--------------------------
Officer of the Borrower shall have executed a certificate representing that, as
of the date of such Advance, Loan, or issuance of a Letter of Credit, there has
been no material adverse change in the financial condition, assets, nature of
the assets, operations, or prospects of the Borrower.
7.3 Reaffirmation of Representations, Warranties and Other Conditions. Any
-------------------------------------------------------------------
request for an Advance, Incremental Term Loan, Equipment Loan Advance, or a
Letter of Credit subsequent to the date of this Agreement shall constitute a
reaffirmation by the Borrower of the items set forth above under Subsections
7.2(a), (b), (c) and (d).
7.4 Conditions Precedent to Excess Incremental Term Loans. The Bank need
--------------------------------------------------------
not consider the making of any Excess Incremental Term Loan unless the Borrower
has satisfied the following conditions precedent, among other requirements
imposed by the Bank:
(a) Receipt by the Bank of all documentation regarding the acquisition of the
stock and/or assets of the company being acquired or regarding the assets of any
division of a company being acquired, as the case may be;
(b) Receipt by the Bank of fiscal year end financial statements for the three
prior fiscal years of the company or division thereof, as the case may be, which
is the subject of the acquisition or which assets are the subject of the
acquisition, and/or other financial information of such entity as the Bank may
request, all in form and substance satisfactory to the Bank;
(c) Receipt by the Bank of one (1) year cash flow projections for the company
or division thereof, as the case may be, which is the subject of the acquisition
or which assets are the subject of the acquisition;
(d) Evidence that the assets of the company or division thereof, as the case
may be, which is the subject of the acquisition or which assets are the subject
of the acquisition, are free and clear of all liens and encumbrances except
those in favor of the Bank and Permitted Liens;
22
(e) The Bank's determination, in its sole and absolute discretion, that the
projected cash flow for the company or division thereof, as the case may be,
which is the subject of the acquisition or which assets are the subject of the
acquisition, is sufficient to service the Excess Incremental Term Loan over the
term of such Excess Incremental Term Loan; and
(f) Receipt by the Bank of such other information, documents, Loan Documents,
collateral, guarantees, searches and/or certificates as the Bank may request.
SECTION 8
---------
REPRESENTATIONS AND WARRANTIES
------------------------------
The Borrower represents and warrants to the Bank that:
8.1 Corporate Existence. The Borrower is a corporation duly
--------------------
organized, validly existing and in good standing under the laws of the State of
New Jersey, and there are no other jurisdictions in which the character of the
properties owned or the business transacted by the Borrower makes qualification
as a foreign corporation necessary, where the failure to so qualify could have a
material and adverse effect on the business, operations, property or affairs of
the Borrower or impair the Borrower's ability to perform its obligations under
this Agreement or the other Loan Documents.
8.2 Corporate Power. The Borrower has the corporate power to execute,
----------------
deliver and perform this Agreement and the other Loan Documents and to borrow
hereunder and under the Notes, and has taken all necessary corporate action to
authorize (i) the borrowing hereunder on the terms and conditions of this
Agreement and the other Loan Documents and (ii) the execution, delivery and
performance of this Agreement and other Loan Documents. The Borrower has the
corporate power to own, pledge and operate its properties and to conduct its
business.
8.3 Necessary Franchises, Patents, etc. The Borrower possesses, either by
-------------------------------------
direct ownership or as licensee, in full force and effect, all necessary
franchises, patents, licenses, trademarks, trademark rights, trade names, trade
name rights, fictitious name authorizations or certificates and copyrights to
conduct its business as now conducted, without any conflict with the franchises,
patents, licenses, trademarks, trademark rights, trade name, trade name rights,
fictitious name authorizations or certificate and copyrights of others. The
Borrower has never, and does not, transact any business utilizing any trade
names, fictitious names, assumed names and/or alternate names.
8.4 Subsidiaries. Except as disclosed on Schedule 8.4, the Borrower has no
------------ ------------
Subsidiaries.
8.5 Line of Business. The Borrower is currently engaged in the line of
------------------
business described on Schedule 8.5 attached hereto.
-------------
8.6 Financial Condition. The Borrower has furnished to the Bank audited
--------------------
financial statements of the Borrower, on a consolidated basis, opined on by KPMG
Peat Marwick, LLP as of December 31, 1997 and management prepared financial
statements of the Borrower, on a consolidating basis, as of September 30, 1998
(the "Financial Statements"). The Financial
23
Statements are complete and correct in all material respects, have been prepared
in accordance with GAAP, and fairly present the condition and results of
operations of the Borrower for the periods involved. Since the date of the
Financial Statements, there has been no material and/or adverse change in the
financial condition of the Borrower not reflected in the Financial Statements,
and since such date neither the business of nor the financial condition of the
Borrower have been materially and adversely affected by any occurrence, whether
or not insured against.
8.7 Taxes. All tax returns of the Borrower which are due have been duly
-----
filed and are, to the best of its knowledge, correct and all taxes, assessments
and other governmental charges upon the Borrower which are shown to be due and
payable thereon have been paid. The Borrower does not know of any proposed tax
deficiency, assessment, charge or levy against it, the payment of which is not
adequately provided for on the books of the Borrower.
8.8 Judgments, No Material Litigation. There are no outstanding judgments
-----------------------------------
against the Borrower; nor are there any actions, proceedings, claims or
investigations, pending or threatened, before any court or governmental body
which, if adversely determined, may materially and adversely affect the
business, operations, properties, or affairs of the Borrower or impair the
Borrower's ability to perform its obligations under this Agreement and the other
Loan Documents.
8.9 Title to Properties, First Priority Lien. The Borrower has good and
--------------------------------------------
marketable title in all of its properties and assets which it purports to own,
free of all Liens except for those in favor of the Bank and Permitted Liens, and
the Borrower has granted, subject to the provisions of Subsection 6.1 hereof, to
the Bank a valid perfected first lien in the Collateral.
8.10 No Consent or Approval. No consent or approval of any Person, no
-----------------------
waiver of any Lien or right of distraint or other similar right, and no consent,
license, approval or authorization of or registration, qualification,
designation, declaration or filing with any governmental authority (other than
the filing of financing statements in accordance with the Uniform Commercial
Code) is required in connection with the validity, enforceability, execution,
delivery and performance of this Agreement or any of the other Loan Documents or
the consummation of any other transactions contemplated hereby.
8.11 No Burdensome Restriction, No Violations. There is no term of any
--------------------------------------------
contract, bond, note, indenture or other agreement or of any charter or other
corporate restriction or of any judgment, decree, order, statute, rule or
regulation which materially and adversely affects the Borrower's business,
properties, assets, operations, affairs or condition (financial or otherwise)
and the Borrower is not in violation of its certificate of incorporation or
bylaws; nor is the Borrower in default under, or in violation of, any term of,
any agreement, ordinance, resolution, decree, burden, note, indenture, order or
judgment to which it is a party or by which its properties are bound, and the
execution, delivery and performance of, and compliance with, this Agreement and
the other Loan Documents will not (with or without the giving of notice or lapse
of time, or both) result in any violation of, or be in conflict with, or
constitute a default under, any such term or violate, where such violation shall
have a material and adverse effect upon the Borrower, any provision of federal,
state or local law, regulations or ordinances, or result in the creation of any
Lien upon any of the assets of the Borrower, except for the Lien created by this
24
Agreement and the other Loan Documents. The Borrower is in compliance with all
laws, statutes, rules, regulations, ordinances and the like, applicable to it
where the failure to so comply could have a material and adverse effect on the
business, operations, property or affairs of the Borrower or impair the
Borrower's ability to perform its obligations under this Agreement or the other
Loan Documents.
8.12 Changed Name, Merger, Acquisition. Except as disclosed on Schedule
------------------------------------ --------
8.12 attached hereto, the Borrower has not within six years (6) from the date
-
hereof (i) changed its name or been known by any other name, (ii) been the
surviving corporation of a merger or consolidation, (iii) acquired all or
substantially all of the assets of any person or entity.
8.13 Place of Business. The chief executive office and principal place of
-------------------
business of the Borrower and all other places of business of the Borrower and
locations where Collateral is stored or maintained is identified on Schedule
--------
8.13 attached hereto.
-----
8.14 Location of Collateral and Records. Other than (i) Collateral from
--------------------------------------
time to time located at trade shows or loaned to customers of the Borrower, for
a period of no longer than four (4) months or, if such trade shows or loans are
for longer than four (4) months, the aggregate value of all said Collateral
shall not any one time exceed $100,000, (ii) Collateral held by service
personnel having an aggregate value not exceeding $450,000 at any one time,
(iii) Collateral held by sales persons having an aggregate value not exceeding
$50,000 at any one time, (iv) Collateral held in China having an aggregate value
not exceeding $15,000 at any one time and (iv) Inventory in transit to Account
Debtors, all of the Collateral, and the Borrower's books, records, journals,
orders, receipts and correspondence are located only at the Borrower's places of
business set forth in Subsection 8.13, except as to certain records not relating
to Collateral which are maintained at the offices of the Borrower's counsel.
8.15 No Reportable Event. No Reportable Event has occurred with respect to
--------------------
any Plan maintained for employees of: (i) the Borrower; or (ii) any member of a
Control Group of which the Borrower is a part.
8.16 No Default. No event or condition which constitutes a Default or an
-----------
Event of Default has occurred.
8.17 Binding Obligations. This Agreement and the other Loan Documents have
--------------------
been duly executed and delivered and constitute the valid and legally binding
obligations of the Borrower, enforceable in accordance with their terms, except
as may be limited by the Bankruptcy, insolvency or other similar laws affecting
the enforcement of creditor's rights. Enforceability may also be subject to
general principles of equity.
8.18 Accounts. The most recent list of Accounts delivered to the Bank is
--------
true and complete, and contains an accurate aging thereof. None of such
Accounts are subject to counterclaims, defenses, claims for adjustments or
setoffs of any nature whatsoever, and require no further act by the Borrower to
make such Accounts owing by the Account Debtors. None of the Accounts include
any conditional sales, consignments or sales on any basis other than that of
absolute sale in the ordinary and usual course of business. No agreement has
been made under
25
which any deductions or discounts may be claimed as to any such Account except
regular discounts in the usual course of business.
8.19 Inventory. Inventory as of the date hereof consists of items of a
---------
quality and quantity usable and/or saleable in the ordinary course of the
Borrower's business. The value of obsolete items, items below standard quality
and items in the process of repair have been written down to realizable market
value, or adequate reserves have been provided therefor, and the values carried
on the balance sheet are set at the lower of cost to the Borrower or market
value of the Inventory, in accordance with GAAP.
8.20 Compliance with Regulations and Laws. The Borrower has duly complied
--------------------------------------
with, and its facilities, business, assets, property, leaseholds and equipment
are in compliance in all material respects with, the provisions of all
regulations or law applicable to them including, without limitation, the Fair
Labor Standards Act, the Federal Occupational, Safety and Health Act and the
Environmental Protection Act, and all rules and regulations thereunder and all
similar state and local laws, rules and regulations, the violation of which
could materially and adversely affect the properties, business or financial
condition of the Borrower, and there have been no outstanding citations, notices
or orders of noncompliance issued to the Borrower or relating to its business,
assets, property, leaseholds or equipment under any such laws, rules or
regulations.
8.21 Licenses and Permits. The Borrower has been issued all required
----------------------
federal, state and local licenses, certificates or permits relating to, and the
Borrower (except where the failure to obtain such license, permit or certificate
could not have a material adverse effect on the properties, business or
financial condition of the Borrower) and its facilities, business, assets,
property, leaseholds and equipment are in compliance in all material respects
with, all applicable federal, state and local laws, rules and regulations
relating to, air emissions, water discharge, noise emissions, solid or liquid
disposal, hazardous waste or materials, or other environmental health or safety
matters.
8.22 Solvency of Borrower. The Borrower is solvent on the date hereof. For
--------------------
the purpose of this Agreement, the term "solvent" shall mean: (a) the fair
salable value of the Borrower's property is in excess of the total amount of its
debts; (b) the Borrower is able to pay its debts as they mature; and (c) the
Borrower has adequate capital to conduct its business in the ordinary course.
8.23 Labor Matters. Within the last three (3) years, (i) the Borrower has
--------------
not experienced any strike, labor dispute, slowdown or work stoppage due to
labor disagreements and (ii) there is no such strike, dispute, slowdown or work
stop threatened against the Borrower.
8.24 Year 2000 Compatibility. The Borrower shall take all action necessary
------------------------
to ensure that the Borrower's computer based systems are able to operate and
effectively process data including dates on and after January 1, 2000. At the
request of the Bank, the Borrower shall provide The Bank assurance acceptable to
the Bank of the Borrower's Year 2000 compatibility.
26
8.25 Insurance. All insurance policies required hereunder are in place and
---------
are in full force and effect.
SECTION 9
---------
COVENANTS BY BORROWER
---------------------
The Borrower covenants and agrees that:
9.1 Preservation of Corporate Existence and Franchises. The
-------------------------------------------------------
Borrower shall preserve and keep in full force and effect its corporate
existence and all franchises, rights and privileges necessary to the proper
conduct of its business, including, without limitation, all necessary
franchises, patents, licenses, trademarks, trademark rights, trade name rights,
fictitious name authorizations or certificates and copyrights without any
unlawful conflict with such franchises, patents, licenses, trademarks, trademark
rights, fictitious name authorizations or certificates and copyrights of others.
9.2 Amendments. The Borrower shall promptly deliver to the Bank copies
----------
of any amendments or modifications to its certificate of incorporation or
bylaws, certified with respect to the certificate of incorporation by the
Secretary of State of its state of incorporation, and, with respect to the
bylaws, by the secretary of the Borrower.
9.3 Compliance with Laws. The Borrower shall comply with all
----------------------
applicable laws, ordinances, rules and regulations of any Federal, state or
local government or any instrumentality or agency thereof now or hereafter in
effect.
9.4 Taxes. The Borrower shall pay and discharge, as they become due,
-----
all taxes, assessments, claims and other governmental or non-governmental
charges lawfully imposed upon it or incurred by it or its properties and assets,
except taxes, assessments, claims and charges contested in good faith in
appropriate proceedings and in respect of which the Borrower shall have set
aside adequate reserves for the payment of such tax, assessment, claim or charge
in conformity with GAAP. The Borrower shall provide to the Bank, upon the
Bank's request, evidence of payment of such taxes, assessments, claims and
charges satisfactory to the Bank.
9.5 Maintenance of Property. The Borrower shall maintain, preserve and
-----------------------
keep all its properties, equipment and assets in good repair, working order and
condition, and make, or cause to be made, all necessary or appropriate repairs,
renewals replacements, substitu-tions, additions, betterments and improvements
thereto so that efficiency of all such properties and assets shall at all times
be properly preserved and maintained.
9.6 Insurance. The Borrower shall maintain such insurance on its
---------
business, properties and assets, including, without limitation, the Collateral
and the Premises, with responsible insurance companies, against such casualties
and liabilities and in such amounts as is from time to time reasonably required
by the Bank, and as may be required by the other Loan Documents, including
without limitation business interruption insurance and general liability
insurance. The insurance policies shall name the Bank as additional insured,
lender loss payee, and mortgagee, as applicable, and as its interest may appear,
and the proceeds of any such insurance shall be payable to the Bank unless the
Bank, in its sole discretion, directs otherwise. The insurance
27
policies shall be on a full replacement cost basis of the value of the
Collateral and the Premises. All such policies of insurance shall provide for
at least thirty (30) days advance notice in writing to the Bank of any
cancellation or modification thereof. If the Borrower fails to pay the premiums
on any such insurance, the Bank shall have the right (but shall be under no
duty) to pay such premiums for the Borrower's account. The Borrower shall repay
to the Bank any sums which the Bank shall have so paid, together with interest
thereon at the Default Rate. The Borrower shall (a) deliver to the Bank, upon
the request of the Bank, a detailed list of insurance then in effect, stating
(i) the names of the insurance companies, (ii) the amounts and rates of the
insurance, (iii) the dates of expiration thereof and the properties and risks
covered thereby; (b) within fifteen (15) days after notice from the Bank, obtain
such additional insurance as the Bank may reasonably request; (c) provide to the
Bank copies of all insurance policies; and (d) assign to the Bank all rights to
receive proceeds of all insurance. The Borrower hereby authorizes the Bank to
endorse any draft for such proceeds and to use the proceeds thereof to reduce
the Obligations. Notwithstanding the foregoing, the Borrower shall, subject to
the terms, conditions and limitations of the Mortgage, have the right to utilize
certain insurance proceeds to repair or replace damaged or destroyed
improvements at the Premises.
9.7 No Other Liens. The Borrower shall not directly or indirectly
----------------
permit to exist any Lien on the Collateral except the Lien in favor of the Bank
and Permitted Liens.
9.8 Litigation Notice. The Borrower shall promptly notify the Bank of
------------------
(i) any litigation, actions, proceedings, claims or investigations pending or
threatened against any Obligor wherein the claimant seeks to recover in excess
of $100,000 (or its equivalent in another currency or currencies) per claim or
$200,000 in the aggregate and (ii) of the entry of any judgment against the
Borrower or any Obligor or the entry of any Lien, other than the Lien in favor
of the Bank or the Permitted Liens.
9.9 Location of Collateral and Records. Except as disclosed in and
--------------------------------------
permitted by Subsection 8.14 hereto, the Borrower shall keep the Collateral, its
records relating to the Collateral, and its other books, records, journals,
orders, receipts and correspondence at only those locations set forth in
Subsection8.13, unless notice is given to the Bank at least thirty (30) days in
advance of the removal of the Collateral, and the books, records, journals,
orders, receipts and correspondence, to another location provided, however, that
-------- -------
no such removal may be effected before all filings required to be made to
preserve the perfected first priority security interest of the Bank in the
Collateral shall have been made and the Borrower shall deliver to the Bank a new
Landlord's/Warehouseman's Agreement, in form and substance satisfactory to the
Bank, with respect to the new location.
9.10 Conduct of Business. Except as disclosed on Schedule 9.10 attached
--------------------- -------------
hereto, the Borrower shall not engage in any business other than the business
specified in Section 8.5 or any other business related thereto without the prior
written permission of the Bank.
9.11 Change of Location. The Borrower shall not (i) change the location of
-------------------
its chief executive office and principal place of business or (ii) create any
new place(s) of business or (iii) eliminate any existing place of business,
unless the Borrower notifies the Bank in writing thirty (30) days in advance
thereof and further provided that no change in location or creation of a new
------- --------
location may be effected before all filings required to be made to preserve the
first priority
28
security interest of the Bank in the Collateral shall have been made and the
Borrower shall deliver to the Bank a new Landlord's/Warehouseman's Agreement, in
form and substance satisfactory to the Bank, with respect to the new location.
9.12 Financial Statements. The Borrower shall deliver, or cause to be
---------------------
delivered, to the Bank in form and substance satisfactory to the Bank the
following:
(a) Within forty-five (45) days after the close of each first, second and
third fiscal quarter, a balance sheet of the Borrower as at the end of such
fiscal quarterly period, and a statement of cash flows and a statement of income
for such fiscal quarterly period, all for the period from the beginning of the
current fiscal year to the end of such quarter, all prepared in accordance with
GAAP, on a consolidated and consolidating basis (that is, on a consolidating
basis with respect to all domestic and foreign subsidiaries, but not with
respect to the statement of cash flows), all in reasonable detail and prepared
by the Chief Financial Officer of the Borrower, together with a certificate of
the President or the Chief Financial Officer of the Borrower certifying that
said financial statements accurately represent in all material respects the
financial condition and results of operations of the Borrower, subject to
year-end adjustments, and stating whether his or her examination has disclosed
the existence of any condition or event which constitutes (or would, after
notice or lapse of time, or both, constitute) an Event of Default or Default
and, if so, specifying the nature and period of existence thereof and setting
forth any actions which the Borrower is taking or has taken in respect of such
condition or event, and further certifying that such financial statements
constitute a fair presentation of the Borrower and its financial condition and
results of operations;
(b) Within ninety (90) days after the end of each fiscal year of the Borrower,
a balance sheet of the Borrower as at the end of such year and a statement of
income for such year and a statement of cash flows for such year, all in
reasonable detail and audited by independent certified public accountants
acceptable to the Bank, and all on a consolidated basis, accompanied by an
unqualified opinion, and which audit shall be performed in accordance with
standards established by the American Institute of Certified Public Accountants,
together with a balance sheet and a statement of income, on a consolidating
basis with respect to all domestic and foreign subsidiaries, all in reasonable
detail and prepared by the Chief Financial Officer of the Borrower and together
with a certificate of the chief financial officer of the Borrower calculating
all financial covenants hereunder and stating whether his examination has
disclosed the existence of any condition or event which constitutes (or would,
after notice or lapse of time, or both, constitute) an Event of Default or a
Default and, if so, specifying the nature and period of existence thereof and
setting forth any actions which the Borrower is taking or has taken in respect
of such condition or event, and further certifying that the financial statements
constitute a fair presentation of the Borrower and its financial condition and
results of operations;
(c) When available any management letter prepared by the accountants referenced
in Subsection 9.12(b) above;
(d) By January 31st of each year, annual financial statement projections for
the Borrower and its subsidiaries (on a consolidated and consolidating basis),
in form and substance satisfactory to the Bank.
29
(e) Such additional financial information of the Borrower as the Bank shall
reasonably require.
9.13 Costs, Expenses and Attorneys Fees.
--------------------------------------
(a) The Borrower shall pay on demand all reasonable and necessary expenses
and expenditures of the Bank, including, without limitation, reasonable
attorneys' fees and expenses, incurred or paid by the Bank in protecting,
enforcing or exercising its interest, rights or remedies created by, connected
with or provided in this Agreement and the other Loan Documents or in enforcing
performance in accordance herewith and therewith including, but not limited to,
any costs or expenses incurred by the Bank in protecting the Collateral. The
Bank may, at its discretion and at any time when due, after notifying the
Borrower, charge any account maintained by the Borrower with the Bank, in an
amount equal to the sums due hereunder, and all such sums to the extent not paid
shall be added to the outstanding Obligations of the Borrower to the Bank;
(b) The Borrower shall pay on demand all reasonable legal fees (up to $10,000),
recording expenses and other reasonable and necessary disbursements of the Bank
incident to the preparation, execution and delivery of this Agreement and the
other Loan Documents, or any amendment or modification thereto. The Bank may,
at its discretion and at any time when due, after notifying the Borrower, charge
any account maintained by the Borrower with the Bank, in an amount equal to the
sums due hereunder, and all such sums shall be added to the outstanding
Obligations of the Borrower to the Bank; and
(c) In the event a Default or an Event of Default has occurred, the Borrower
shall pay on demand all reasonable fees and costs for each day the Bank conducts
a field exam of the Borrower's activities as compensation for the Bank's
expenses incurred with respect to said field exam regardless of whether the exam
is performed in the field or at a location of the Bank.
9.14 Book and Records. The Borrower shall, at all times and in
------------------
accordance with GAAP, keep complete and accurate books and records concerning
its business, affairs and operations and concerning its properties and assets,
including without limitation, the Collateral.
9.15 Instrument and Documents. Upon the Bank's request, the Borrower shall
-------------------------
deliver to the Bank (i) all instruments and chattel paper (including all
executed copies thereof, except such executed copies retained by the obligors
thereunder) representing proceeds of the Collateral duly endorsed and
accompanied by duly executed instruments of assignment in form and substance
satisfactory to the Bank, and (ii) promptly at the Bank's request, all invoices,
original bills of lading, documents of title, original contracts, chattel paper,
instruments and any other writings relating thereto, and other writings or
evidence of performance of contracts or evidence of shipment or delivery of the
merchandise sold or services rendered in connection therewith. The Borrower
shall deliver to the Bank, promptly at the Bank's request, from time to time,
additional copies of any or all of such papers or writings, and such other
information with respect to any of the Collateral including such schedules of
accounts receivables and other writings as the Bank may, in its sole discretion,
deem to be necessary or effectual to evidence any Advance made pursuant to this
Agreement or to evidence, enforce or perfect the Bank's security interest in the
Collateral, to facilitate collection of the Collateral, or to carry into effect
the provisions and intent of this Agreement, all at the sole expense of the
Borrower.
30
9.16 Field Exam/Inspection. The Borrower shall from time to time, without
----------------------
hindrance or delay, and during normal business hours, permit the Bank, its
representatives, agents and/or designees, upon prior notice to the Borrower, to
inspect or examine the properties and assets of the Borrower, including, without
limitation, the Collateral, and to examine, check, conduct a field examination,
and make copies of or abstracts from any of the Borrower's books, records,
journals, receipts, orders, correspondence or other data, and to verify
independently the orders of the Borrower and Accounts.
9.17 ERISA, SEC Filings. The Borrower shall furnish to the Bank: (i) as
--------------------
soon as possible and in any event within thirty (30) days after the Borrower or
a duly appointed administrator of a Plan knows or has reason to know that any
Reportable Event has occurred with respect to any Plan, a statement of the
Borrower setting forth details as to such Reportable Event and the action which
the Borrower proposes to take with respect thereto, together with a copy of the
notice of such Reportable Event given to the PBGC or a statement that the notice
will be filed with the annual report to the United States Department of Labor
with respect to the Plan if required under applicable regulations; (ii) if
requested by the Bank, copies of each annual and other report with respect to
each Plan filed with the United States Department of Labor, the Internal Revenue
Service or the PBGC; (iii) promptly after receipt thereof, a copy of any notice
of penalties if in excess of $25,000, IRS determination letter, notice of
determination of termination and assumption of trusteeship by PBGC, closing
agreements, notice of compliance or noncompliance from the IRS or audit notice,
and if requested by the Bank, a copy of any other notice the Borrower or any
other member of a Controlled Group may receive from the United States Department
of Labor, the Internal Revenue Service or the PBGC, all with respect to any
Plan; and (iv) promptly after the sending of, making available or filing of the
same, copies of any proxy statements and financial statements which the
Borrower, if any, shall send or make available to all of its stockholders, and
any registration statements and any reports which the Borrower shall file with
the Securities and Exchange Commission; and (v) promptly after receipt thereof,
a copy of any notice the Borrower may receive indicating an actual or potential
violation of any material law or regulation.
9.18 Use of Proceeds. The Borrower shall use the proceeds of the Loans
---------------
as follows:
(a) The Revolving Loan shall be used solely to finance short term working
capital requirements and for the issuance of Letters of Credit;
(b) The Incremental Term Loans shall be used solely to finance acquisitions of
other companies (including divisions thereof), or their assets, and for funding
research and development expenses for DGI. Excess Incremental Term Loans shall
only be used to finance acquisitions of other companies (including divisions
thereof), or their assets; and
(c) The Equipment Loan Advances shall be used solely to finance 100% of the
cost (excluding soft costs, including, but not limited to, taxes) of new
Equipment to be purchased by the Borrower.
9.19 Loss or Damage to Collateral. The Borrower shall immediately
--------------------------------
notify the Bank of any material loss or damage to, or material diminution in, or
any occurrence which would materially adversely affect, the value of any of the
Collateral. In the event that there has been
31
any such loss, damage or material diminution in value, the Borrower shall
whenever the Bank so requests, pay to the Bank, such amount representing such
loss, damage, or material diminution in value, unless such loss, damage or
diminution is fully covered by insurance, which proceeds shall be paid to the
Bank.
9.20 Default Notice. The Borrower shall immediately notify the Bank of the
---------------
occurrence of any Default or Event of Default accompanied by a certificate of
the Borrower specifying the nature and period of existence thereof and stating
what action the Borrower is taking in respect of such Default or Event of
Default. If the Borrower receives a notice of a default from any creditor other
than the Bank, the Borrower shall deliver to the Bank a copy of such notice of
default immediately upon receipt thereof.
9.21 Compliance with Agreement. The Borrower shall observe, perform and
---------------------------
comply with, and shall continue, until all Obligations of the Borrower to the
Bank under this Agreement and the other Loan Documents, are fully paid and
satisfied, to observe, perform and comply with, all of the terms, agreements,
and covenants contained in this Agreement and the other Loan Documents.
9.22 Government Accounts. If 40% or more of all the Borrower's Accounts,
--------------------
contract rights, chattel paper, general intangibles or instruments arise out of
contracts with the United States or any of its departments, agencies or
instrumentalities, or if an Event of Default has occurred and is continuing and
any of the foregoing accounts, contract rights, chattel paper, general
intangibles or instruments exist, the Borrower shall notify the Bank thereof and
execute any necessary writings in order that all money due or to become due
under such contracts shall be assigned to the Bank and proper notice of the
assignment given under the Federal Assignment of Claims Act.
9.23 Negative Covenants. The Borrower shall not without the Bank's prior
-------------------
written consent:
(a) Borrowings. Create, incur or assume any liability for borrowed money,
----------
capital leases, purchase money financing, long-term leases, sale lease backs or
any other indebtedness, except (i) for liabilities heretofore or hereinafter
incurred by the Borrower to the Bank (including any Swap Agreements), (ii)
capital leases and purchase money financing with respect to equipment used in
the Borrower's business provided the aggregate amount outstanding at any one
time shall not exceed $1,000,000 and (iii) any promissory note payable to the
seller of a company (including a division thereof) or the assets of said company
(or division), delivered in connection with an acquisition permitted by the
terms hereof and either (1) financed entirely by the seller accepting the
Borrower's promissory note or (2) financed, in part, with the Borrower's own
funds (which have not been borrowed) or with funds from an Incremental Term Loan
(which is not an Excess Incremental Term Loan), which promissory note and all
other obligations to said seller shall be the subject of a subordination
agreement of payment in favor of the Bank, in form and substance satisfactory to
the Bank (the exception contained in Section 9.23(a)(iii) does not apply to an
acquisition financed, in part, by an Excess Incremental Term Loan, and, in the
event the Bank permits any such indebtedness in connection with an Excess
Incremental Term Loan, a subordination agreement of payment and lien, in form
and substance satisfactory to the Bank, may be required as a condition to the
extension of such Excess Incremental Term Loan).
32
(b) Contingent Liabilities. Assume, guarantee, endorse or otherwise become
-----------------------
liable, in connection with the obligations of any other Person except:
(i) Contingent Liabilities of the Borrower aggregating no more than
$7,000,000, consisting of guarantees of debts owed by the Borrower's
subsidiaries, with no more than $500,000 guaranteed in connection with a
mortgage loan from Amro Bank to NBS Benelux B.V., and no more than $1,000,000
guaranteed in connection with future leases (whether capital or true leases) to
DGI; and
(ii) Liabilities of the Borrower resulting from its endorsement of items or
instruments for deposit or collection in the ordinary course of its business.
(c) Sale or Other Disposition of Assets. Sell, lease, abandon, or
----------------------------------------
otherwise transfer or dispose of its properties or assets, except in the
ordinary course of its business, and except for (i) the sale of the Borrower's
minority interest in Organica, Inc., so long as all proceeds of such sale are
retained by the Borrower and (ii) sale of or dilution of the Borrower's interest
in DGI (including, the issuance of DGI warrants), so long as any proceeds
received by the Borrower as a result thereof are retained by the Borrower.
(d) Acquisition of Assets. Purchase, lease, or otherwise acquire, the
-----------------------
properties, assets or real estate, or any interest therein, of any Person except
(i) the purchasing, leasing or otherwise acquiring of assets by the Borrower in
the ordinary course of its business in bona fide arm's length transactions and
(ii) acquiring an interest in or the assets of a Person, so long as the Borrower
shall remain in compliance with all other terms hereof and the Borrower and its
subsidiaries on a consolidated basis, shall have maintained a Debt Service
Coverage of not less than 1.50 to 1.00 and a ratio of Total Liabilities divided
by Tangible Net Worth of not more than 1.00 to 1.00 for at least the last
previous four consecutive quarters. For the purposes of this Subsection 9.23(d)
hereof, "Debt Service Coverage Ratio" shall be computed on a rolling four
quarter basis and shall mean the sum of net income (adjusted for any noncash
losses, to the extent of the Borrower's investment in DGI, resulting from equity
offerings of the Borrower's ownership interest in DGI, whereby said interest is
reduced from 80% to between 50% and 20%, plus interest expense plus income tax
expense plus depreciation and amortization plus rental or lease (capital and
operating) payments payable or guaranteed by the Borrower, minus dividends paid
for the previous four consecutive quarters divided by interest expense for the
previous four consecutive quarters plus the current maturities of long term debt
plus the current maturities of capital leases plus rental or lease (capital or
operating) payments payable or guaranteed by the Borrower, as reflected on the
Borrower's current financial statements, "Total Liabilities" shall mean all
liabilities of the Borrower, excluding Subordinated Debt but including
capitalized leases and all reserves for deferred taxes and other deferred sums
appearing on the liabilities side of the balance sheet, in accordance with GAAP,
and "Tangible Net Worth" shall mean total assets, minus "accumulated other
comprehensive loss" as reflected on the Borrower's balance sheet as of the
fiscal quarter end being tested minus Total Liabilities. For the purposes of
this calculation, the aggregate amount of any intangible assets of the Borrower,
including, without limitation, goodwill, franchises, licenses, patents,
trademarks, trade names, copyrights, service marks, brand names, loans and
advances, investments (excluding marketable securities) and contributions to
persons other than the Borrower, shall be subtracted from total assets.
33
(e) Mergers, Joint Ventures. Consolidate with, merge into, or participate in
-------------------------
any joint venture with any Person or permit any Person to consolidate with,
merge into or participate in any joint venture with the Borrower.
(f) Subsidiaries or Person. Create or acquire, or permit the creation or
------------------------
acquisition of, any Subsidiary except to the extent permitted by the terms of
Subsection 9.23(d) hereof.
(g) Investments. Purchase or acquire the obligations, securities or stock of,
-----------
or make capital contributions to, any Person, except:
(i) Marketable direct obligations of the United States of America;
(ii) Bonds, bills or notes of any state, county, or municipality of the United
States of America, which are not in default as to principal or interest, and
which are rated AA, or better, by Xxxxx'x Investors Service;
(iii) Customer's notes, chattel paper, or the like received as non-cash
proceeds of the sale of the Inventory of the Borrower in the ordinary course of
its business; and
(iv) Any Swap Agreements; and
(iv) To the extent permitted by the terms of Subsection 9.23(d) hereof.
(h) Loans to Other Persons. Make loans or advances to any of its
-------------------------
officers, directors or shareholders, or to any other Person to the extent that
the aggregate amount of all said loans and advances outstanding at anytime
exceeds $50,000, except (i) loans to employees the proceeds of which shall be
used by said employees to purchase from the Borrower stock issued by the
Borrower pursuant to existing employee stock option plans and (ii) for loans or
advances to Persons in which the Borrower has an interest in, so long as the
Borrower is in compliance with all other terms hereof and the Borrower satisfies
the financial tests provided for in Subsection 9.23(d) hereof.
(i) Liens. Create, assume or suffer to exist any Lien on any of its or its
-----
Subsidiaries' properties or assets whether now owned or hereafter acquired,
except for Liens in favor of the Bank, the Permitted Liens, and Liens created by
capital leases and purchase money security interests.
(j) Assignment of Accounts. Create, assume or suffer to exist any assignment
------------------------
of Accounts.
(k) Capital Expenditures. Enter into any agreements to purchase or pay for or
---------------------
become obligated to pay for capital expenditures during any fiscal year in an
amount aggregating in excess of $2,000,000.
(l) Debt Service Coverage Ratio of Borrower and Subsidiaries. Borrower and its
--------------------------------------------------------
Subsidiaries, on a consolidated basis, shall, at all times, maintain a Debt
Service Coverage Ratio of not less than 1.30 to 1.00. For the purposes of this
Subsection 9.23(l), "Debt Service Coverage Ratio" shall be computed on a rolling
four quarter basis (excluding, however, the losses for DGI
34
for the fiscal year ending 1998) and shall mean the sum of net income (adjusted
for any noncash losses, to the extent of the Borrower's investment in DGI,
resulting from equity offerings of the Borrower's ownership interest in DGI,
whereby said interest is reduced from 80% to between 50% and 20%) plus interest
expense plus income tax expense minus income tax benefit plus depreciation and
amortization plus rental or lease (capital and operating) payments payable or
guaranteed by the Borrower, minus dividends paid for the previous four
consecutive quarters divided by interest expense for the previous four
consecutive quarters plus the current maturities of long term debt plus current
maturities of capital leases, plus rental or lease (capital or operating)
payments payable or guaranteed by the Borrower for the previous four consecutive
quarter, as reflected on the Borrower's current financial statements. This
ratio shall be tested quarterly.
(m) Net Worth of Borrower and Subsidiaries. Borrower and its Subsidiaries, on
---------------------------------------
a consolidated basis, shall at all times maintain a Net Worth of at least (i)
$$28,500,000 for the period commencing on the date hereof and ending December
31, 1999 and (ii) for each fiscal year thereafter, the minimum Net Worth of the
Borrower and its Subsidiaries, on a consolidated basis, shall increase by not
less than 85% of net income for the immediately preceding fiscal year just
ending (with no reduction for losses). For the purposes of this Subsection
9.23(m), "Net Worth" shall mean total assets, plus negative or minus positive
"currency translation adjustment" as reflected on the Borrower's balance sheet
as of the end of the fiscal quarter being tested minus Total Liabilities (as
defined in Subsection 9.23(n) hereof). For the purposes of this calculation,
loans (except as permitted by Subsection 9.23(h)(i) and advances, investments
and contributions to persons other than the Borrower, shall be subtracted from
total assets. This ratio shall be tested quarterly.
(n) Total Liabilities to Tangible Net Worth Ratio of Borrower and Subsidiaries.
--------------------------------------------------------------------------
Borrower and its Subsidiaries, on a consolidated basis, shall, at all times,
maintain a ratio of Total Liabilities divided by Tangible Net Worth of not more
than 1.15 to 1.00. For the purposes of this Subsection 9.23(n) hereof, "Total
Liabilities" shall mean all liabilities of the Borrower, excluding Subordinated
Debt but including capitalized leases and all reserves for deferred taxes and
other deferred sums appearing on the liabilities side of the balance sheet, in
accordance with GAAP, "Tangible Net Worth" shall mean total assets, plus
negative or minus positive "currency translation adjustment" as reflected on the
Borrower's balance sheet as of the end of the fiscal quarter being tested minus
Total Liabilities. For the purposes of this calculation, the aggregate amount
of any intangible assets of the Borrower, including, without limitation
goodwill, franchises, licenses, patents, trademarks, trade names, copyrights,
service marks, brand names, loans and advances, investments (excluding
marketable securities) and contributions to persons other than the Borrower,
shall be subtracted from total assets. This ratio shall be tested quarterly.
(o) Total Net Assets of Borrower to Total Net Assets of Borrower and
----------------------------------------------------------------------
Subsidiaries. Borrower shall, at all times, maintain a ratio of Total Net
-------
Assets of Borrower divided by Total Assets of Borrower and Subsidiaries of not
less than .70 to 1.00. For the purposes of this Subsection 9.23(o), "Total
Assets of Borrower" shall mean (i) total assets of the Borrower, which total
assets shall be reduced by the amount of intercompany accounts due from
Subsidiaries and/or Affiliates of or other related Persons to the Borrower, if
included as an asset on the balance sheet, less (ii) investments in Subsidiaries
of the Borrower and/or other third Persons. "Total Assets of Borrower and
Subsidiaries" shall mean all assets of the Borrower and
35
its Subsidiaries, on a consolidated basis, as reflected on the balance sheet of
the Borrower. This ratio shall be tested quarterly.
9.24 The Bank Account. The Borrower shall maintain its primary
------------------
business operating accounts with the Bank until such time as all Obligations to
the Bank are fully satisfied.
9.25 Margin Stock. The Borrower does not own, or have any present intention
------------
of acquiring, any "Margin Stock" within the meaning of Regulation U (12 CFR Part
221) of the Board of Governors of the Federal Reserve System (herein called
"margin stock"). None of the proceeds of the Revolving Loan made hereunder
shall be used, directly or indirectly, for the purposes of purchasing or
carrying, or for the purpose of reducing or retiring any indebtedness which was
originally incurred for the purposes of purchasing or carrying, any margin stock
or for any other purpose which might cause the transactions contemplated hereby
to be considered a "purpose credit" with the meaning of said Regulation U, or
which might cause this Agreement to violate Regulation U, Regulation T,
Regulation X, or any other regulation of the Board of Governors of the Federal
Reserve System or the Securities Exchange Act of 1934, as amended. If requested
by the Bank, the Borrower will promptly furnish the Bank with a statement or
statements in conformity with the requirements of Federal Reserve Form U-1
referred to in said Regulation U.
9.26 Further Assurances, Warranty of Title. The Borrower shall, procure and
-------------------------------------
deliver to the Bank or execute and deliver any mortgage, security agreement,
financing statement or amendments thereto, or other writing necessary to
evidence, preserve, protect or enforce the Bank's rights and interests to or in
the Collateral. The Borrower will defend the Collateral at its own expense from
all claims and defenses of all other Persons.
SECTION 10
----------
EVENTS OF DEFAULT
-----------------
There shall be an Event of Default by the Borrower under this Agreement
upon the occurrence of any one of the following:
10.1 Non-Payment. The Borrower's failure to pay when due or at
-----------
maturity (whether as stated or by acceleration), as the case may be, any payment
of principal, interest or other charges due and owing to the Bank pursuant to
any Obligations of the Borrower to the Bank, including, without limitation,
those Obligations arising pursuant to this Agreement; or
10.2 Specific Defaults. A breach by the Borrower of any term, agreement or
------------------
covenant contained in Subsections 9.1, 9.3, 9.4, 9.6, 9.7, 9.9, 9.10, 9.11,
9.12, 9.14, 9.15, 9.16, 9.18, 9.19, 9.23, 9.24, 9.25 and 9.26.
10.3 Other Defaults. A breach by the Borrower of any other term, agreement
---------------
or covenant contained in this Agreement, which breach remains uncured for a
period of thirty (30) days from the earlier of (a) the date upon which notice
thereof shall be given to the Borrower by the Bank or (b) the date upon which
the Bank should have been notified pursuant to Subsection 9.20 hereof.
36
10.4 Warranties and Representations. If any warranty or representation or
------------------------------
signatures contained in this Agreement or the other Loan Documents,
including without limitation, the warranties and representations contained in
Section 8, shall be false or incorrect in any material respect when made or
deemed reaffirmed, or if any financial statement given by or on behalf of any
Obligor to the Bank shallbe false, incorrect, incomplete or misleading in any
material respect; or
10.5 The Bankruptcy or Insolvency.
-------------------------------
(i) Any resolution shall be passed or any action shall be taken by any
Obligor for the termination, winding up, liquidation or dissolution of any
Obligor or its debts, or any Obligor shall make an assignment for the benefit of
creditors, become insolvent or be unable to pay (or admit in writing its
inability to pay) any of its debts as they mature, or any Obligor shall file a
petition in voluntary liquidation or the Bankruptcy, or any Obligor shall file a
petition or answer or consent seeking reorganization or the readjustment of any
of its debt under applicable insolvency or the Bankruptcy laws now or hereafter
existing, or any Obligor shall consent to the appointment of any receiver,
administrator, liquidator, custodian or trustee of all or any part of its
property or assets, or corporate action shall be taken by any Obligor for the
purpose of effecting any of the foregoing; or
(ii) By order or decree of any court of competent jurisdiction, any Obligor
shall be adjudicated a the Bankrupt or insolvent, or a petition for proceedings
in the Bankruptcy or liquida-tion or for the reorganization or the readjustment
of its debt under applicable the Bankruptcy or insolvency laws now or hereafter
existing shall be filed against any Obligor, and any Obligor shall admit the
material allegations thereof, or shall not cause such petition to be discharged
within sixty (60) days, or any order (other than a final, non-appealable order
for which there shall be no grace period), judgment or decree shall be made
approving such petition and such order, judgment or decree shall not be vacated,
set aside or stayed within sixty (60) days of their issuance or any receiver,
administrator, liquidator or trustee shall be appointed for any Obligor or for
all or any part of its property and such receiver, administrator, liquidator or
trustee shall not be discharged or his jurisdiction shall not be relinquished,
vacated or stayed, on appeal or otherwise, within sixty (60) days after his
appointment; or
10.6 Cross-Default. The occurrence of any default by any Obligor in
-------------
connection with (i) any loans, advances or other extensions of credit by the
Bank to any Obligor, (ii) any debt or other obligation of any Obligor to any
third party under any agreement or instrument relating to such debt or other
obligation, if the effect of such default is to accelerate, or to permit the
acceleration of, the maturity of such debt or obligations, or any such debt or
obligations shall be declared to be due and payable or required to be prepaid
other than by a regularly scheduled required payment, prior to its stated
maturity thereof; or
10.7 Other Warranties or Representations. If any warranty or representation
-----------------------------------
whether past, contemporaneous or future made in writing by any Obligor or on
behalf of any Obligor to the Bank, other than any warranty or representation set
forth in this Agreement, shall prove to be
37
false, incorrect, incomplete or misleading in any material respect, when made,
or when deemed made; or
10.8 Other Loan Documents. A default occurs under any of the other Loan
----------------------
Documents, and such default is not cured within the applicable grace period
provided therein, if any; or
10.9 ERISA. A Reportable Event shall have occurred which the Bank, in its
-----
sole discretion, shall determine in good faith constitutes grounds for the
termination by the PBGC of any Plan or for the appointment by the appropriate
United States district court of a trustee for any Plan, or if any Plan shall be
terminated or any such trustee shall be requested or appointed, or if the
Borrower is in "default" (as defined in Section 4219(c)(5) of ERISA) with
respect to payments to a Multiemployer Plan resulting from the Borrower's
complete or partial withdrawal from such Plan; or
10.10 Execution; Attachment. Any execution or attach-ment shall be levied
----------------------
against the Collateral or any assets of the Borrower; or
10.11 Judgment. The entry of a final judgment in excess of $100,000 (or
--------
$200,000 in the aggregate) against any Obligor and the failure of any Obligor to
discharge the same within thirty days (30) from the date of the order, decree or
process under which or pursuant to which judgment was entered, or to secure a
stay of execution pending appeal of such judgment unless such judgment is fully
covered by insurance and the insurer has acknowledged liability or unless a bond
for the full amount of said judgment is presented to the entity responsible for
the enforcement of said judgment; or
10.12 Government Investigations. If any threatened action is taken by any
--------------------------
governmental authority for the seizure of Collateral or the assets of any
Obligor; or
10.13 Swap Agreements. Any default by the Borrower (or any of its
----------------
Affiliates) under any Swap Agreement.
SECTION 11
----------
BANK'S RIGHTS AND REMEDIES
--------------------------
11.1 Bank's Rights Exercisable at any Time. Exclusive of the
------------------------------------------
occurrence of an Event of Default or Default, the Bank may:
(a) Whenever the Bank determines in its reasonable discretion that some
event, fact, circumstance or condition has occurred which could materially and
adversely affect the business, operations, properties, and/or financial
condition of the Borrower, the value of or condition of the Collateral, or the
ability of the Borrower to perform its obligations hereunder or under any other
Loan Document, terminate its making of any further Advances and issuing any
Letters of Credit, declare all of the Obligations (exclusive of Obligations
under Swap Agreements which shall be controlled by the Swap Agreements) to the
Bank to be immediately due and payable, and demand payment of all of the
Obligations (exclusive of Obligations under Swap Agreements which shall be
controlled by the Swap Agreements); and
38
(b) Receive from all or any accountants and auditors employed by the Borrower
(which accountants and auditors the Borrower hereby authorizes and directs to
deliver to the Bank), at any time during the term of this Agreement, copies of
any of the financial statements, trial balances or other accounting records of
any sort of the Borrower which are in the possession of such accountants and
auditors;
(c) Receive and have access to printouts and all other information respecting
financial records of the Borrower maintained by external computer service
companies (which the Borrower hereby authorizes and directs to deliver or give
access to the Bank of the same);
(d) Sign financing statements in the name of the Borrower, or file financing
statements without the Borrower's signature or file carbon, photographic or
other reproductions of financing statements, where permitted by law, in any
relevant state to perfect or maintain the Bank's security interest in any or all
of the Collateral, and deliver, to the Borrower, within a reason-able period of
time, copies of such financing statements; and
(e) Take any and all action which in its reasonable discretion is necessary
and proper to preserve its interest in the Collateral, including, without
limitation, paying debts of the Borrower which might, in the Bank's sole
discretion, impair the Collateral, or the Bank's security interest therein or
Lien thereon, including without limitation, paying taxes or assessments imposed
on the Collateral, and the sums so expended by the Bank shall be secured by the
Collateral, shall be added to the amount of the Obligations and shall be payable
on demand with interest at the Default Rate;
11.2 The Bank's Rights and Remedies Upon an Event of Default. Upon
---------------------------------------------------------
the occurrence of an Event of Default the Bank shall have the following rights
and remedies to be exercised within their discretion, without further demand,
presentment, protest, advertisement, or notice of any kind, all of which are
hereby expressly waived by the Borrower except as specified below:
(a) The Bank may exercise any and all of the rights and remedies provided
in this Agreement, the other Loan Documents, the Uniform Commercial Code and
other applicable law in force and effect in the State of New Jersey and in any
other jurisdiction where the Borrower maintains property or assets;
(b) The Bank may elect (i) not to make any further Advances, Incremental Term
Loans, Equipment Loan Advances or issue Letters of Credit under and pursuant to
this Agreement or otherwise and all of the Obligations (exclusive of Obligations
under Swap Agreements which shall be controlled by the Swap Agreements) of the
Borrower to the Bank shall immediately become due and payable and (ii) to
increase the rate of interest with respect to all Obligations to the Default
Rate;
(c) The Bank may receive, open and dispose of mail addressed to the Borrower
and notify the Post Office authorities to change the address for delivery of
mail addressed to the Borrower to such address as the Bank may designate;
(d) The Bank may require the Borrower (and the Borrower hereby agrees), at the
Borrower's own expense, to assemble or to cause to be assembled the Collateral
and make it
39
available at places which the Bank may designate, whether at the Borrower's
premises or elsewhere, and to allow the Banks to take possession or dispose of
the Collateral;
(e) The Bank may forthwith collect, receive, appropriate and realize upon the
Collateral or any part thereof, and/or, forthwith, without advertisement, sell,
lease, assign, give an option or options to purchase, or sell or otherwise
dispose of, the Collateral (or contract to do so), or any part thereof or any
interest which the Borrower may have therein, in one or more parcels at public
or private sale or sales, at any exchange or broker's board or at any of the
Bank's offices or elsewhere at such prices as they may deem best in their
discretion exercised in a commercially reasonable manner, for cash or on credit
or for future delivery without assumption of any credit risk, and if notice of
such sale or of other action by the Bank is required by applicable law, the
Borrower agrees that five (5) days notice (which notification shall be deemed
given when mailed, postage prepaid, addressed to the Borrower at its principal
place of business set forth in Subsection 9.13) of the time and place of any
public sale or of the time after which a private sale may take place shall be
sufficient, which the Bank and the Borrower hereby agree to be commercially
reasonable;
(f) The Bank shall have the right upon any such public sale or sales, and, to
the extent permitted by law, upon any such private sale or sales, to purchase
the whole or any part of the Collateral so sold, free of any right or equity of
redemption in which right or equity of redemption the Borrower hereby waives and
releases;
(g) The Bank may enter upon any and all places of business of the Borrower,
take possession and remove therefrom any and all of the Collateral and the
Borrower's books, records, ledger sheets, correspondence, invoices and
documents, relating to or evidencing any of the Collateral, and/or without cost
or expense to the Bank, make such use of any or all of the Borrower's places of
business as may be reasonably necessary to administer, control and collect the
Collateral, either personally or through any agent, or by means of a receiver
appointed by a court of competent jurisdiction;
(h) The Bank may settle, renew, extend, compromise, compound, exchange or
adjust claims in respect of any of the Collateral or any legal proceedings
brought in respect thereof;
(i) The Bank may subrogate to all of the Borrower's interests, rights and
remedies in respect of the Collateral including the right to stop delivery, and
to reclaim Inventory which any Account Debtor has returned, rejected, revoked
acceptance of and/or failed to return, and which has been consigned or diverted,
and to take possession of and sell or dispose of Inventory;
(j) The Bank may demand, xxx for, collect or receive any money or property, at
any time payable or receivable on account of or in exchange for, or make any
compromises they deem desirable, including, without limitation, extending the
time of payment, arranging for payment in installments, or otherwise modifying
the terms or rights with respect to any of the Collateral, all of which may be
without notice to or consent by any Obligor and without otherwise discharging or
affecting the Obligations, the Collateral or the security interest therein or
Lien thereon;
(k) The Bank may set off and apply to all or any part of the Obligations, all
the Collateral described in Section 6, and the Bank shall be deemed to have
exercised such right of set off and to
40
have made a charge against any such Collateral immediately upon the occurrence
of such Event of Default, even though the actual book entries may be made at
some time subsequent thereto;
(l) The Bank may endorse the name of the Borrower upon any and all checks,
drafts, money orders and other instruments for the payment of monies which are
payable to the Borrower and constitute proceeds of the Collateral;
(m) Communicate with customers and Account Debtors to verify (including phone
verifications) independently orders and Accounts (and the Borrower agrees to
furnish all such assistance and information as the Bank may require in
connection therewith);
(n) Place the Borrower on daily monitoring pursuant to which the Borrower
shall, among other things, report daily sales, receipts, purchases, accounts
payable and inventory to the Bank;
(o) To notify the customers and Account Debtors to make payment directly to the
Bank or its designee;
(p) Institute and maintain foreclosure proceedings against the Collateral in
accordance with the laws of the State of New Jersey, and any other jurisdiction
where the Collateral is located; and
(q) The Bank may do such other and further acts and deeds in the name of the
Borrower which the Bank may deem necessary or advisable to the extent necessary
for the Bank to realize upon the Collateral.
SECTION 12
----------
BORROWER'S RIGHTS AND REMEDIES
------------------------------
12.1 The Borrower shall have all of the rights and remedies provided in
this Agreement, the other Loan Documents and by the Uniform Commercial Code and
other applicable law in force in New Jersey.
SECTION 13
----------
MISCELLANEOUS PROVISIONS
------------------------
13.1 No Liability; Indemnification.
-------------------------------
(a) The Bank shall not be deemed to have assumed any liability or
responsibility to the Borrower or any Person for the correctness, validity or
genuineness of any instruments or documents that may be released or endorsed to
the Borrower by the Bank (which shall automatically be deemed to be without
recourse to the Bank in any event), or for the existence, character, quantity,
quality, condition, value or delivery of any goods purporting to be represented
by any such documents; and the Bank shall not be deemed to have assumed any
obligation or liability to any supplier or Account Debtor or to any other
Person. The Borrower hereby agrees to indemnify and defend the Bank and hold it
harmless in respect to any claim or proceeding arising out of any matter
referred to in this Subsection 13.1.
41
(b) The Borrower hereby agrees to indemnify and to hold harmless the Bank and
each of its respective officers, directors, agents, employees and counsel
harmless from and against any and all claims, damages, liabilities, costs and
expenses (including, without limitation, reasonable fees, expenses and
disbursements of counsel) in connection with or arising out of any
investigation, litigation or proceeding, including without limitation, those
related to violation(s) involving any environmental laws, which may be incurred
by or asserted against the Bank or any such other indemnified Person arising by
virtue of the Bank's relationship with the Obligors as anticipated by this
Agreement or the other Loan Documents, whether or not the Bank is a party
thereto.
(c) The Borrower agrees to indemnify and hold the Bank harmless from and
against any taxes, liabilities, claims and damages, including attorneys' fees
and disbursements and other expenses incurred or arising by reason of the taking
or the failure to take action by the Bank in respect of any transaction effected
under this Agreement or in connection with the Lien provided for herein,
including, without limitation, any taxes payable in connection with the delivery
or registration of any of the Collateral as provided herein.
(d) The obligations of the Borrower under this Subsection 13.1 shall survive
the termination of this Agreement.
13.2 Waivers.
-------
(a) Notice of default and presentment, demand, protest and notice of
protest and of dishonor as to any provision of this Agreement or any other Loan
Document is hereby expressly waived by the Borrower, except as may be otherwise
specifically provided in this Agreement or in the other Loan Documents.
(b) To the extent it may be lawful to do so, the Borrower for itself and for
any Person who may claim through or under it hereby:
(1) agrees that neither it nor any such Person will set up, plead, claim
or in any manner whatsoever take advantage of, any appraisement, valuation,
stay, extension or redemption laws, now or hereafter in force in any
jurisdiction, which may delay, prevent or otherwise hinder (i) the performance
or enforcement of, or foreclosure under, this Agreement or the other Loan
Documents, (ii) the sale of any of the Collateral or (iii) the putting of the
purchaser or purchasers thereof into possession of such property immediately
after the sale thereof;
(2) waives all benefit or advantage of any such laws;
(3) waives and releases all rights to have the Collateral marshaled upon any
foreclosure, sale or other enforcement of this Agreement; and
(4) waives all claims, damages and demands against the Bank's repossession,
retention or sale of the Collateral and all defenses, and rights of set off.
13.3 Successors and Assigns, Assignments. "The Bank" and "the
--------------------------------------
Borrower" as used in this Agreement shall include the successors,
representatives and assigns of those parties, provided, however, that the
Borrower shall not assign or delegate any of its rights, remedies,
42
warranties, representations or covenants arising under this Agreement or any
other Loan Document without the prior written consent of the Bank, and any
purported assignment or delegation without such consent shall be void.
13.4 Applicable Law. This Agreement is to be executed and delivered within
---------------
the State of New Jersey, is to be principally performed within the State of New
Jersey, and the Borrower and the Bank elect that the laws of New Jersey shall
govern the construction of this Agreement and the other Loan Documents and the
rights, remedies, warranties, representations, covenants, and provisions hereof
and thereof.
13.5 Severability. If any of the provisions of this Agreement or any other
------------
Loan Document shall contravene or be held invalid under the laws of any
jurisdiction, this Agreement or any other Loan Document shall be construed as if
not containing such provisions and the rights, remedies, warranties,
representations, covenants and provisions hereof shall be construed and enforced
accordingly in such jurisdiction and shall not in any manner affect such
provision in any other jurisdiction, or any other provisions in this Agreement,
or in any other Loan Documents, as the case may be, in any jurisdiction.
13.6 Remedies Cumulative. The Defaults, Events of Default, rights,
--------------------
remedies, covenants and provisions set forth in this Agreement and any other
Loan Document or as may be provided by applicable law, shall be cumulative and
not alternative or exclusive, and the Bank's Rights and Remedies may be
exercised by the Bank at such time or times, in such order of preference, as the
Bank in its sole discretion may determine.
13.7 Entire Agreement, Survival of Representations, Warranties and
-------------------------------------------------------------------
Modifications. This Agreement and the other Loan Documents embody the entire
--------------
agreement and understanding between the Borrower and the Bank and supersedes all
prior agreements and understandings relating to the subject matter hereof. All
warranties, representations and covenants imposed or made herein, or on the
other Loan Documents shall survive the execution and delivery of this Agreement
and the other Loan Documents. No delay or omission of the Bank in exercising or
enforcing any of the Bank's Rights and Remedies hereunder shall constitute a
waiver thereof; nor shall any single or partial exercise by the Bank of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right; and no waiver by the Bank of any Default or Event of Default
should operate as a waiver of any other Default or Event of Default. No term or
provision of this Agreement, or any other Loan Document shall be waived, altered
or modified except with the prior written consent of the Bank, which consent
makes explicit reference hereto or thereto. Except as provided in the preceding
sentence, no other agreement or transac-tion, of whatsoever nature, entered into
between the Bank and the Borrower at any time (whether before, during or after
the effective date or terms of this Agreement), shall be construed in any
particular as a waiver, modification or limitation of any of the Bank's Rights
and Remedies under this Agreement, or the other Loan Documents nor shall
anything in this Agreement, or in the other Loan Documents be construed as a
waiver, modification or limitation of any of the Bank's Rights and Remedies, not
only under the provisions of this Agreement or the other Loan Documents but also
of any such other agreement or transaction.
13.8 Days. Any and all references to "days" in this Agreement shall mean
----
"calendar days" except as otherwise specifically provided in this Agreement and
by law.
43
13.9 Notices. All notices, requests and other communications pursuant
-------
to this Agreement shall be in writing, either by letter (delivered by hand
or sent certified mail, return receipt requested), or by overnight courier
service, or telegram addressed to the Bank at 0000 Xxxxx 00, Xxxxxx,
Xxx Xxxxxx 00000,Xxxxxxxxx: Xxxxxx Xxxxx, Vice President, or to the Borrower
at its principal place of business as described in Subsection8.13, or at such
other address as either may give notice to the other as herein provided. Any
notice, request or communication hereunder shall be deemed to have been
given in the case of mailing, three (3) Business Days after being deposited in
the mails, in the case of overnight delivery, the day following the date on
which such notice was delivered to such overnight delivery service, or in the
case of facsimile, when sent, or in the case of hand delivery, when delivered,
addressed as aforesaid except where otherwise provided in this Agreement,
provided, however, that notice of a change of address, as hereinabove provided,
shall be deemed to have been given only when actually received by the party to
which it is addressed.
13.10 Agreement and Other Loan Documents Complementary. The provisions of
--------------------------------------------------
this Agreement shall be in addition to those of any guaranty, security
agreement, note or other evidence of liability held by the Bank, all of which
shall be construed as complementary to each other. In the event of ambiguity or
inconsistency between this Agreement, and any other Loan Document, then the
terms of this Agreement will govern.
13.11 The Bank's Relationship. The Bank and the Borrower expressly agree
-------------------------
that the relationship of the Bank to the Borrower is that of a lender only, the
intent of this provision being to clarify and stipulate that the Bank is not a
partner or a co-venturer of the Borrower and that the Bank's sole interest in
the Collateral is for the purpose of security for repayment of the Obligations
of the Borrower.
13.12 Power of Attorney. The Borrower hereby appoints any officer or agent
------------------
of the Bank as its true and lawful attorney-in-fact, with power to endorse the
name of the Borrower upon any notes, checks, drafts, money orders, or other
instruments or demands of payment of the Collateral that may come into
possession of the Bank, to sign or endorse the name of the Borrower upon any
invoices, freight or express bills, bills of lading, storage or warehouse
receipts, drafts against Account Debtors, assignments, verifications and notices
in connection with Accounts, letters of credit or advices or confirmations
thereof, any instruments or documents relating thereto or to the Borrower's
rights therein; and sign and deliver, on behalf of the Borrower any and all
notices direct to any issuer, advising the Bank or confirming the Bank, wherein
such issuer or the Bank is informed of the Bank's security interest in, or the
assignment of any letters of credit or advices or confirmations thereof; and,
upon an Event of Default, to give written notice to such office and officials of
the United States Postal Service to effect such change or changes of address so
that all mail addressed to the Borrower may be delivered directly to the Bank or
a place where the Bank shall designate, granting unto the Borrower's said
attorney full power to do any and all things necessary to be done with respect
to the above transactions as fully and effectually as the Borrower might or
could do, and hereby ratifying all that said attorney shall lawfully do or cause
to be done by virtue hereof. Notwithstanding the terms of the Power of
Attorney, the Power of Attorney shall not be utilized by the Bank unless an
Event of Default has occurred and is continuing.
45
------
13.13 Section Headings. Article and Section headings are for reference only
----------------
and shall not affect the interpretation or meaning of any provision of this
Agreement.
13.14 CONSENT TO JURISDICTION. THE BORROWER AND THE BANK EXPRESSLY AGREE TO
-----------------------
THE JURISDICTION OF THE FEDERAL AND STATE COURTS LOCATED IN NEW JERSEY IN
CONNECTION WITH ANY MATTER ARISING HEREUNDER, INCLUDING THE COLLECTION AND
ENFORCEMENT HEREOF.
13.15 No Duty to Preserve Collateral. The Bank shall be under no duty or
----------------------------------
obligation to: (i) preserve, protect or marshal any Collateral; (ii)preserve or
protect the rights of any Person against any other Person claiming an interest
in any Collateral; (iii) realize upon any Collateral in any particular order or
manner or seek repayment of any Obligation from any particular source; or (iv)
permit any substitution or exchange of all or any part of any Collateral or
release any part of any Collateral from any Lien, even if that substitution or
release would leave the Bank adequately secured.
13.16 Participation. The Bank shall have the right to sell participations
-------------
in the Advances, the Equipment Loan Advances, the Letters of Credit, the
Revolving Loan, the Equipment Term Loans, the Incremental Term Loans and the
Obligations. The Borrower shall provide all required assistance to the Bank in
selling and closing any participation, including permitting any prospective
participant to inspect any Obligor's books and records and the Collateral,
provided, however, the Borrower shall only have to deal with the Bank or its
-------- -------
successors or assigns, or their respective employees or agents, officers, and
shall not, have to deal with any such participants except as agents of the Bank,
its successors and assigns.
13.17 Arbitration, Exemplary Damages, Jury Trial Waiver. (a) Upon demand of
-------------------------------------------------
any party hereto, whether made before or after institution of any judicial
proceeding, any claim or controversy arising out of or relating to the Loan
Documents between parties hereto (a "Dispute") shall be resolved by binding
arbitration conducted under and governed by the Commercial Financial Disputes
Arbitration Rules (the "Arbitration Rules") of the American Arbitration
Association (the "AAA") and the Federal Arbitration Act. Disputes may include,
without limitation, tort claims, counterclaims, a dispute as to whether a matter
is subject to arbitration, claims brought as class actions, or claims arising
from documents executed in the future. A judgment upon the award may be entered
in any court having jurisdiction. Notwithstanding the foregoing, this
arbitration provision does not apply to disputes under or related to swap
agreements. (b) All arbitration hearings shall be conducted in the State of New
Jersey. A hearing shall begin within 90 days of demand for arbitration and all
hearings shall conclude within 120 days of demand for arbitration. These time
limitations may not be extended unless a party shows cause for extension and
then for no more than a total of 60 days. The expedited procedures set forth in
Rule 51 et seq. of the Arbitration Rules shall be applicable to claims of less
-------
than $1,000,000.00. Arbitrators shall be licensed attorneys selected from the
Commercial Financial Dispute Arbitration Panel of the AAA. The parties do not
waive applicable Federal or state substantive law except as provided herein(c)
Notwithstanding the preceding binding arbitration provisions, the parties agree
to preserve, without diminution, certain remedies that any party may exercise
before or after an arbitration proceeding is brought. The parties shall have
the right to proceed in any court of proper jurisdiction or by self-help to
exercise or prosecute the following remedies, as applicable: (i) all rights to
foreclose against any
45
real or personal property or other security by exercising a power of sale or
under applicable law by judicial foreclosure including a proceeding to confirm
the sale; (ii) all rights of self-help including peaceful occupation of real
property and collection of rents, set-off, and peaceful possession of personal
property; (iii) obtaining provisional or ancillary remedies including injunctive
relief, sequestration, garnishment, attachment, appointment of receiver and
filing an involuntary Bankruptcy proceeding; and (iv) when applicable, a
judgment by confession of judgment. Any claim or controversy with regard to any
party's entitlement to such remedies is a Dispute. (d) The parties agree that
they shall not have a remedy of punitive or exemplary damages against other
parties in the Dispute and hereby waive any right or claim to punitive or
exemplary damages they have now or which may arise in the future in connection
with any Dispute whether the Dispute is resolved by arbitration or judicially.
(e) THE PARTIES ACKNOWLEDGE THAT BY AGREEING TO BINDING ARBITRATION THEY HAVE
IRREVOCABLY WAIVED ANY RIGHT THEY MAY HAVE TO JURY TRIAL WITH REGARD TO A
DISPUTE.
IN WITNESS WHEREOF, the parties on the date first above written have caused
this Agreement to be properly executed.
ATTEST: NEW BRUNSWICK SCIENTIFIC CO., INC.
_________________________________ BY:______________________________________
XXXXXX XXXXXXXXXX, XXXX XXXXXXX, PRESIDENT
ASSISTANT SECRETARY
[SEAL]
FIRST UNION NATIONAL BANK
BY:____________________________________
XXXXXXX XXXXXXXX, VICE PRESIDENT
46
FIRST UNION NATIONAL BANK,
TO
NEW BRUNSWICK SCIENTIFIC CO., INC.
21,000,000 Credit Facility
LOAN AND SECURITY AGREEMENT
April 1, 1999
47
INDEX
------
SECTION 1
---------
DEFINITIONS. . . . . . . . . . . . . . 1
SECTION 2
REVOLVING LOAN . . . . . . . . . . . . 8
SECTION 3
INCREMENTAL TERM LOANS . . . . . . . . 11
SECTION 4
EQUIPMENT LOAN . . . . . . . . . . . . 14
SECTION 5
PROVISIONS REGARDING EURODOLLAR LOANS. 16
SECTION 6
COLLATERAL . . . . . . . . . . . . . . 18
SECTION 7
CONDITIONS PRECEDENT . . . . . . . . . 19
SECTION 8
REPRESENTATIONS AND WARRANTIES . . . . 23
SECTION 9
COVENANTS BY BORROWER. . . . . . . . . 27
SECTION 10
EVENTS OF DEFAULT. . . . . . . . . . . 36
SECTION 11
BANK'S RIGHTS AND REMEDIES . . . . . . 38
SECTION 12
BORROWER'S RIGHTS AND REMEDIES . . . . 41
SECTION 13
MISCELLANEOUS PROVISIONS . . . . . . . 41
48
