AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT
--------------------------------------------------
This AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT is made as of
June 30, 1998, by and among CITIZENS BANK OF MASSACHUSETTS, a Massachusetts
banking corporation with its principal office at 00 Xxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000 (the "Lender"); ASAHI/AMERICA, INC., a Massachusetts
business corporation ("AAI"), ASAHI ENGINEERED PRODUCTS, INC., a Massachusetts
business corporation and wholly-owned subsidiary of AAI ("AEPI") and QUAIL
PIPING PRODUCTS, INC., a Massachusetts business corporation and wholly-owned
subsidiary of AAI ("Quail"). AAI, AEPI and Quail are sometimes hereinafter
referred to collectively as the "Borrowers" and individually as a "Borrower".
B A C K G R O U N D:
- - - - - - - - - -
Lender, AAI and AEPI are party to a Credit Agreement dated as of
January 23, 1997 (as amended and now in effect, the "Original Credit
Agreement"), under which Lender maintains a revolving credit facility to provide
funds for working capital for AAI and AEPI.
Citizens Trust Company ("CTC"), an affiliate of Lender, AAI and AEPI
are party to a Loan and Security Agreement dated as of September 23, 1993 (as
amended and now in effect, the "Original Loan Agreement"), under which CTC
issued and maintains for the account of AAI a standby letter of credit dated
March 16, 1994 relating to those certain Massachusetts Industrial Finance Agency
Industrial Revenue Bonds Asahi/America Issue, Series 1994, which letter of
credit has a current undrawn face amount of $3,871,690.83.
Lender holds a 100% participation interest in all indebtedness existing
or arising under the Original Loan Agreement and has assumed from CTC
administration of the the Original Loan Agreement.
Lender has agreed to (i) certain changes to the terms of the Original
Credit Agreement, including an increase in the amount of the committed revolving
line of credit described in ss.2.1 thereof and a change in the manner of fixing
the rate of interest applicable to indebtedness thereunder, and (ii) to succeed
CTC as lender under the Original Loan Agreement, as amended by this Agreement,
and the parties now wish to consolidate the arrangements governed by the
Original Credit Agreement and the Original Loan Agreement (together, the
"Constituent Loan Agreements") into this single agreement, on the terms and
conditions hereinafter provided, with the effect that this Amended and Restated
Credit
and Security Agreement shall take effect as an amendment and restatement of each
of the Constituent Loan Agreements and not as a novation.
Quail, a newly created, wholly-owned subsidiary of AAI, has agreed to
join as an obligor under this Agreement, in consideration of the benefits it
will derive as a borrower under this Agreement and as a member of the
consolidated group of companies controlled by AAI, provided, however, that
Quail's assets shall not be pledged or secured hereunder unless otherwise
specifically set forth herein or in another Loan Document entered into
hereafter.
A G R E E M E N T S:
- - - - - - - - - -
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereby agree that the each of the Constituent Loan
Agreements is hereby amended to provide in its entirety as follows:
In consideration of any loans or other financial accommodations made or
to be made hereunder, including continuation of the Bond Letter of Credit, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties jointly and severally agree as follows:
ss.1. Certain Definitions. The following terms shall have the meanings
set forth in this ss.1 or elsewhere in this Agreement.
Acquisition has the meaning given to it in Section 6.11.
Affiliate means singly and collectively, any Person (including without
limitation a Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with, a Borrower, and the legal
representative, successor or assignee of any such Person. For purposes of this
definition, a Person shall be deemed to be "controlled by" another Person if
such other Person possesses, directly or indirectly, power either to (i) vote
50% or more of the securities having ordinary voting power for the election of
directors of the Person controlled, or (ii) direct or cause the direction of the
management and policies of the Person controlled, whether such power arises by
contract, the holding of any office or management position or otherwise.
Agreement. This Amended and Restated Credit and Security Agreement,
including the Exhibits and Schedules hereto, as in effect at the time of
reference thereto.
2
Applicable LIBOR Increment means that amount, expressed in basis points
(100 = 1%) determined in accordance with Schedule 1 hereto, as from time to time
adjusted and in effect. The Applicable LIBOR Increment shall be determined and
announced by Lender within five (5) Business Days after receipt by Lender of the
Compliance Certificate covering the immediately preceding fiscal quarter, and
shall apply to the then current Interest Period.
Audit Fee means a fee of not more than $1,350 per audit for each
examination performed by the Lender as provided in ss.6.4 hereof, plus any
out-of-pocket costs incurred by the Lender in connection therewith.
Bond Letter of Credit means that certain standby letter of credit dated
March 16, 1994 issued by CTC relating to the Bonds, including any amendment
thereof or replacement therefor.
Bond Letter of Credit Obligations has the meaning given to it in
ss.3.1(c) hereof.
Bond Reimbursement Agreement means that certain Reimbursement Agreement
dated as of March 1, 1994 between AAI and CTC, as amended on or about the date
hereof, with respect to the reimbursement obligations of AAI and AEPI in respect
of the Bond Letter of Credit, including any amendments to, restatements of or
successor agreement to said agreement.
Bonds means those certain Massachusetts Industrial Finance Agency
Industrial Revenue Bonds Asahi/America Issue, Series 1994, including any bonds
issued in renewal or refunding thereof.
Borrowing Limit means an amount equal to the Maximum Availability, less
the aggregate unpaid amount of all then outstanding Loans, including unpaid
Letter of Credit Obligations (but excluding Bond Letter of Credit Obligations).
Business Day. Any day on which (i) Lender's head office in Boston,
Massachusetts is open for the transaction of commercial banking business, and
(ii) in the case of any LIBOR Loan, any such day that the Lender or its
participant in the Loan conducts eurodollar market activities.
Capitalized Lease Obligations means all lease obligations which have
been or should be, in accordance with GAAP, capitalized on the books of the
lessee.
Cash Equivalent Investments means any Investment in (i) direct
obligations of the United States or any agency, authority
3
or instrumentality thereof, or obligations guaranteed by the United States or
any agency, authority or instrumentality thereof, whether or not supported by
the full faith and credit of, a right to borrow from or the ability to be
purchased by the United States; (ii) commercial paper rated in the highest grade
by a nationally recognized statistical rating agency or which, if not rated, is
issued or guaranteed by any issuer with outstanding long-term debt rated A or
better by any nationally recognized statistical rating agency; (iii) demand and
time deposits with, and certificates of deposit and bankers acceptances issued
by, any office of the Lender or any of its Affiliates, or any other bank or
trust company which is organized under the laws of the United States or any
state thereof and has capital, surplus and undivided profits aggregating at
least $500,000,000; (iv) any short-term note which has a rating of MIG-2 or
better by Xxxxx'x Investors Service Inc. or a comparable rating from any other
nationally recognized statistical rating agency; (v) any municipal bond or other
governmental obligation (including without limitation any industrial revenue
bond or project note) which is rated A or better by any nationally recognized
statistical rating agency; (vi) any other obligation of any issuer, the
outstanding long-term debt of which is rated A or better by any nationally
recognized statistical rating agency; (vii) any repurchase agreement with any
financial institution described in clause (iii) above, relating to any of the
foregoing instruments and fully collateralized by such instruments, and (viii)
any time deposits denominated in US dollars and maintained with a commercial
bank located in Europe which and has capital, surplus and undivided profits
aggregating at least $1,000,000,000. Each Cash Equivalent Investment shall have
a maturity of not more than one (1) year at the time of purchase; provided that
the maturity of any repurchase agreement shall be deemed to be the repurchase
date and not the maturity of the subject security and that the maturity of any
variable or floating rate note subject to prepayment at the option of the holder
shall be the period remaining (including any notice period remaining) before the
holder is entitled to prepayment.
Cash Flow means, on a consolidated basis for a particular period,
earnings (before deductions for interest and tax expense) for such period
(wherein the cost of goods sold is determined on the same basis upon which it is
determined for general financial statement reporting purposes), plus all
depreciation, amortization and other non-cash charges taken by AAI and/or its
Subsidiaries in accordance with GAAP and deducted in computing its Net Income
for such period, minus any capital expenditures made during such period, but
only to the extent such capital expenditures were not financed by the incurrence
of long-term indebtedness, as defined in accordance with GAAP, and minus any
taxes paid in cash by AAI and its Subsidiaries during such period.
4
Closing Date means the date on or as of which this Agreement is
executed by the parties.
Collateral means all property, real and personal, tangible, intangible
or mixed, at any time serving as collateral security for any Obligations.
Compliance Certificate has the meaning given in ss.6.5 hereof.
Consolidated Current Assets means as to each Borrower all cash, Cash
Equivalent Investments, trade accounts receivable, inventory, marketable
securities and prepaid expenses of such Borrower and its Subsidiaries which
would, in accordance with GAAP on a consolidated basis, be classified as current
assets of corporations conducting a business the same as or similar to that of
such Borrower and/or its Subsidiaries, excluding any intangible assets (as
intangible assets are defined under the definition of Consolidated Total
Tangible Assets below).
Consolidated Current Liabilities means as to each Borrower all
liabilities of such Borrower and its Subsidiaries which would, in accordance
with GAAP on a consolidated basis, be classified as current liabilities of
corporations conducting a business the same as or similar to that of such
Borrower and/or its Subsidiaries, including, without limitation, all lease
rental payments under Capitalized Lease Obligations and fixed prepayments of,
and sinking fund payments and reserves with respect to, Indebtedness, in each
case required to be made within one year from the date of determination.
Consolidated Total Tangible Assets means as to each Borrower all assets
of such Borrower and its Subsidiaries which would, in accordance with GAAP on a
consolidated basis, be classified as assets of a corporation conducting a
business the same as or similar to that of such Borrower and any of its
Subsidiaries, such total assets to be determined in accordance with GAAP
consistent with those applied in the preparation of the audited financial
statements referred to in ss.6.6, including without limitation the undrawn face
amount of any irrevocable standby letter of credit in favor of AAI issued by a
financial institution satisfactory to Lender securing the then unpaid
subscription commitment of X.X. Xxxxxx to purchase shares of AAI common stock,
but excluding however, from the determination of total assets (i) all assets
which would be classified as intangible assets under GAAP, including without
limitation goodwill (whether representing the excess of cost over book value of
assets acquired or otherwise), patents, trademarks, trade names, copyrights,
franchises, the benefit of a covenant not to compete and deferred charges
5
(including, without limitation, unamortized debt discount and expense,
organization costs, and research and development costs), (ii) treasury stock and
interests of less than 51% of any other corporation or business entity, (iii)
cash set apart and held in a sinking or other analogous fund established for the
purpose of redemption or other retirement of capital stock, (iv) to the extent
not already deducted from total assets, reserves for depreciation, depletion,
obsolescence and/or amortization of properties and all other reserves or
appropriations of retained earnings which, in accordance with GAAP, should be
established in connection with the business conducted by the Person whose
tangible net worth is being determined, (v) any upward revaluation or other
write-up in book value of assets subsequent to the date of the audited financial
statements referred to in ss.6.6, and (vi) loans and advances to shareholders,
directors, officers or employees of a Borrower or any of its Subsidiaries.
Consolidated Total Liabilities means as to each Borrower all
liabilities of such Borrower and its Subsidiaries which would, in accordance
with GAAP on a consolidated basis, be classified as liabilities of a corporation
conducting a business the same as or similar to that of such Borrower and any of
its Subsidiaries, including, without limitation, all lease rental payments under
Capitalized Lease Obligations and fixed prepayments of, and sinking fund payment
and reserves with respect to, Indebtedness.
Default means an event or condition which with the giving of notice or
lapse of time or both would become an Event of Default.
Default Rate means a rate equal to the sum of (i) the rate of interest
otherwise then applicable to the Obligation in question, plus (ii) 350 basis
points.
Event of Default. Has the meaning given to it in ss.7 hereof.
GAAP Has the meaning given to it in ss.4.4 hereof.
Hazardous Material means any substance or material defined or
designated as a hazardous or toxic waste, hazardous or toxic material, hazardous
or toxic substance, or other similar term, by any federal, state or local
environmental statute, regulation or ordinance.
Indebtedness means, for any Person, (i) all indebtedness or other
obligations of said Person for borrowed money or for the deferred purchase price
of property or services, (ii) all indebtedness or other obligations of any other
Person ("Other Person") for borrowed money or for the deferred purchase price of
property or services, the payment or collection of which said Person has
guaranteed (except by reason of endorsement of negotiable instru-
6
ments for collection in the ordinary course of business) or in respect of which
said Person is liable, contingently or otherwise, including, without limitation,
liable by way of agreement to purchase or lease, to provide funds for payment,
to supply funds to purchase, sell or lease property or services primarily to
assure a creditor of such Other Person against loss or otherwise to invest in or
make a loan to the Other Person, or otherwise to assure a creditor of such Other
Person against loss, (iii) all indebtedness or other obligations of any Person
for borrowed money or for the deferred purchase price of property or services
secured by (or for which the holder of such indebtedness has an existing right,
contingent or otherwise, to be secured by) any lien upon or in any property
owned by said Person, whether or not said Person has assumed or become liable
for the payment of such indebtedness or obligations, (iv) Capitalized Lease
Obligations of said Person and (v) all other liabilities or obligations of said
Person which would, in accordance with GAAP, be classified as liabilities of
such a Person. Leases characterized under GAAP as operating leases shall not be
considered Indebtedness.
Interest Period shall mean, with respect to any LIBOR Loans made or
continued by Lender hereunder, a period (in increments of 30 days), as the
Borrowers may as to specific Loans from time to time elect, from 30 to 365
consecutive days, as applicable, during the term of and in accordance with the
provisions of this Agreement; provided, however, that (i) if any Interest Period
pertaining to a LIBOR Loan would otherwise end on a day which is not a Business
Day, such Interest Period shall be extended to the next succeeding Business Day
unless such Business Day falls in the next calendar month, in which case such
Interest Period shall end on the immediately preceding Business Day; (ii) any
Interest Period that begins on the last Business Day of a calendar month (or on
a day for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall, subject to clause (iii) below, end on
the last Business Day of the relevant calendar month; (iii) any Interest Period
that would otherwise end after the Termination Date shall end on the Termination
Date; and (iv) clause (iii) above notwithstanding, no Interest Period shall have
a duration of less than one month, and if any Interest Period applicable to a
LIBOR Loan would be for a shorter period, such Interest Period shall not be
available hereunder.
Letter of Credit means each irrevocable commercial or standby letter of
credit, excluding the Bond Letter of Credit, issued by Lender (or any affiliate
thereof) for the account of any Borrower, subject to and in accordance with this
Agreement (including any Constituent Loan Agreements) and any other applicable
Loan Document, including the Lender's applicable forms of application,
reimbursement agreement and the like.
7
Letter of Credit Obligations means (i) the undrawn face amount of any
Letter of Credit, and (ii) the unreimbursed amount of any draw under a Letter of
Credit, but excluding (unless the context otherwise specifically requires) any
Bond Letter of Credit Obligations.
LIBOR shall mean, with respect to a Loan as to which LIBOR shall serve
as a reference rate hereunder, the rate equal to the rate at which Lender is
offered U.S. Dollar deposits at or about 10:00 A.M., New York City time, two
Business Days prior to the beginning of the applicable Interest Period in the
interbank eurodollar market where the eurodollar and foreign currency and
exchange operations in respect of its LIBOR Loans are then being conducted for
delivery on the first day of such Interest Period for the approximate number of
days comprised therein (as elected by the Borrower) and in an amount comparable
to the amount of its LIBOR Loan to be outstanding during such Interest Period,
in addition to any applicable reserve requirements in effect on such day
(including, without limitation, basic, supplemental, marginal and emergency
reserves under any regulations of the Board of Governors of the Federal Reserve
System or other governmental authority having jurisdiction with respect thereto)
dealing with reserve requirements prescribed for eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of such Board of
Governors) maintained by a member bank of such System.
Loan(s). Any advance(s) by the Lender to or for the account of a
Borrower, made pursuant to ss.2.1 of this Agreement or the similarly numbered
provision of the Original Credit Agreement. Loans may, at the request of any
Borrower, on behalf of itself and as agent for each other Borrower, and the
discretion of the Lender, also take the form of Letter of Credit Obligations.
Loan Documents. Collectively, this Agreement, the Note and any other
instruments or documents delivered or to be delivered pursuant to this
Agreement, as well as the Bond Reimbursement Agreement and any "Other Documents"
(as defined in the Bond Reimbursement Agreement, and any amendment thereto,
restatement thereof or successor agreement thereto.
Maximum Availability means $11,000,000. Notwithstanding the foregoing,
Borrowers may permanently, once during each 12-month period commencing on each
January 1, in each case upon sixty (60) days prior written notice to Lender,
reduce permanently the Maximum Availability.
Maximum Debt to Tangible Net Worth means, as of the end of each fiscal
quarter thereof a ratio of (i) the Borrowers' Consolidated Total Liabilities to
(ii) the Borrowers' Tangible Net Worth, of less than or equal to 2.65 to 1.0.
8
Minimum Debt Service Coverage means, as of the end of each fiscal
quarter thereof a ratio of (i) the Borrowers' consolidated Cash Flow for such
period, to (ii) interest charges accruing during such period plus principal
payments on its Indebtedness payable during such period, including all payments
in respect of Capitalized Lease Obligations, due during such period, of greater
than or equal to 1.2 to 1.0.
Minimum Tangible Net Worth means, as of the end of each fiscal quarter
of the Borrowers commencing January 1, 1998, an amount equal to the sum of (i)
$11,000,000, plus (ii) on a combined, consolidated basis, 50% of the aggregate
Net Income of the Borrowers for each of their fiscal quarters commencing on or
after January 1, 1998.
Minimum Working Capital means, as of the end of each fiscal quarter of
the Borrowers, Working Capital in an amount not less than $3,500,000.
Mortgage means each mortgage, deed of trust or like instrument creating
a lien on real property serving as Collateral for any Obligation, whether now in
existence or hereafter created, in form and substance satisfactory to Lender.
Net Income means the consolidated net, after-tax income (loss) of AAI
and its Subsidiaries determined in accordance with GAAP.
Note. Collectively, the Amended and Restated Revolving Credit Note, as
such term is defined in ss.2, and any other promissory notes from time to time
outstanding as contemplated by ss.2.1(b) hereof.
Obligations. Obligations shall mean all amounts at any time owed to the
Lender in respect of this Agreement, the Note, the Bond Reimbursement Agreement,
any Letter of Credit (including for this purpose the Bond Letter of Credit) or
any other Loan Document executed in connection herewith.
Person. Any individual, corporation, association, partnership, trust,
limited liability company, unincorporated association, business or other legal
entity, and any government or any governmental agency or political subdivision
thereof.
Premises has the meaning given to it in ss.3.2 hereof.
9
Prime Rate means the fluctuating rate of interest per annum designated
by the Lender from time to time as being its "Prime Rate" or "Base Rate" of
interest, it being understood that such rate is a reference rate only and not
necessarily the lowest rate of interest charged by the Lender on commercial
loans.
Security Documents means any and all documents, instruments and
agreements now or hereafter providing security for the Obligations, including
without limitation the following: this Agreement, any Mortgage, UCC-1 financing
statements or similar filings perfecting the above-referenced security
interests, landlord's waivers, any assignment of patents and trademarks or other
intellectual property rights, collateral assignments of life insurance or other
property or rights, all as executed, delivered to and accepted by Lender, as
same may be amended in writing by Lender, Borrowers and any other party thereto.
Subsidiary means any corporation or other legal entity, if any, of
which more than 50% of the outstanding interests having ordinary voting power to
elect a majority of the board of directors or other managers of such entity
(irrespective of whether or not at the time capital stock or other equity
interests of any other class or classes of such corporation or other entity
shall or might have voting power upon the occurrence of any contingency) is at
the time directly or indirectly owned by a Borrower or by a Borrower and/or one
or more Subsidiaries or the management of which corporation or other entity is
under control of a Borrower and/or any other Subsidiary, directly or indirectly
through one or more Persons and any other Person which, under GAAP, should at
any time for financial reporting purposes be consolidated with a Borrower and/or
any other Subsidiary.
Tangible Net Worth means the excess, if any, of the Consolidated Total
Tangible Assets of the Borrowers over the Consolidated Total Liabilities of the
Borrowers.
Termination Date. The later of the date upon which (i) the Lender's
obligation to make Loans in accordance with the provisions of this Agreement
ends, including by reason of an Event of Default, or (ii) the date no further
Obligations may be incurred by any Borrower in respect of the Bond Letter of
Credit, the Bond Reimbursement Agreement or any letter of credit issued
hereunder.
Unused Line Fee means a fee in an amount equal to the product of (i)
the amount (expressed in basis points (100 = 1.0%), on a per annum basis)
determined in accordance with Schedule 2 hereto (the "Unused Line Fee
Multiplier"), multiplied by (ii) the Borrowing Limit, determined as of the end
of each calendar quarter and payable within two (2) Business Days after the last
Business Day of each such quarter during the period the Lender has any
obligation to make such Loans. Notice of such fees shall be promptly given to
Borrowers.
10
Working Capital means the Borrowers' Consolidated Current Assets minus
the Borrowers' Consolidated Current Liabilities.
Any terms not specifically defined herein which are defined in the
Uniform Commercial Code as in effect in the Commonwealth of Massachusetts shall
have the same meanings herein as therein. Each reference herein to a particular
person (including, without limitation, the Lender) shall include a reference to
such person's successors and permitted assigns. The words "herein", "hereof",
"hereunder" and words of like import shall refer to this Agreement as a whole
and not to any particular section or subdivision of this Agreement.
ss.2. THE LOANS; LETTERS OF CREDIT.
ss.2.1. Committed Revolving Credit Line; Limitations; Purposes.
(a) Revolving Credit Loans; Commitment to Lend. Subject to the
terms and conditions set forth herein, the Borrowers (or any of them) may borrow
(including the continuation of any then outstanding LIBOR Loan after the
expiration of the Interest Period applicable to it), repay and reborrow from
time to time between the Closing Date and January 31, 2000 or any earlier
Termination Date, upon notice to the Lender given in such manner as Lender may
from time to time prescribe, such amounts as requested by the Borrower(s) for
the purpose of providing funding for their regular operations, as well as for
Acquisitions in accordance with the provisions of ss.6.11 hereof; provided,
however, that the maximum aggregate principal amount of all advances under this
ss.2.1(a) (including any similar unpaid advances made under the Original Credit
Agreement) outstanding at any time shall not exceed the Maximum Availability
less any then unpaid Letter of Credit Obligations, and any such excess shall
immediately be repaid by the Borrowers and until repaid shall be treated for
purposes of this Agreement as a Loan made in accordance with the provisions of
this Agreement. Each request for a Loan under this ss.2.1(a) shall constitute a
joint and several representation by the Borrowers that all applicable conditions
to such advance have been satisfied on the date of such request. The obligation
of the Lender to make Loans hereunder shall terminate on the Termination Date,
and all Loans then outstanding shall become immediately due and payable without
notice or other action by the Lender. Lender shall endeavor to advise the
Borrowers on or before September 30, 1999 if it does not intend
11
to extend this credit facility beyond January 31, 2000, but the failure to
provide such notice shall not extend the Termination Date. The Borrowers shall
provide the Lender with cash or other Collateral satisfactory to Lender in its
sole discretion to ensure timely payment of any Letters of Credit (including the
Bond Letter of Credit) outstanding on or after the Termination Date; provided,
further, that in the event the revolving line of credit created pursuant to this
ss.2.1 should at Lender's election (but not Borrowers' election) terminate other
than by reason of an Event of Default, then from and after the date that no
Obligations other than Bond Letter of Credit Obligations are outstanding, the
Collateral for the Bond Letter of Credit Obligations shall consist solely of
those items of Collateral described in ss.ss.3.1(a)(ii) and 3.2 hereof, subject
to the limitation on Lender's lien on account proceeds described in said
ss.3.1(a)(ii).
(b) Promissory Note. The indebtedness resulting from Loans
made pursuant to ss.2.1(a) hereof (and Loans outstanding on the date hereof
under the Original Credit Agreement) shall be an absolute, unconditional and
joint and several obligation of the Borrowers, and such indebtedness shall be
evidenced by an Amended and Restated Revolving Credit Note executed and
delivered by the Borrowers to the Lender on the Closing Date in substantially
the form of Exhibit 2.1(b) hereto (the "Revolving Credit Note"), which Revolving
Credit Note shall set forth the interest and payment terms applicable to the
indebtedness represented thereby.
(c) Periodic Review. Lender shall review its revolving credit
commitment under this ss.2.1 periodically, and may in its absolute discretion at
any time elect to terminate such commitment, effective on or after the earlier
of (i) an Event of Default, or (ii) January 31, 2000.
(d) Unused Line Fee. The Borrowers shall pay an Unused Line
Fee in respect of the revolving line of credit established pursuant to this
ss.2.1.
ss.2.2. Letters of Credit Facility; Letter of Credit Obliga-
tions Absolute
(a) Issuance of Letters of Credit. Lender shall from time to time, upon
the request of a Borrower and subject to Lender's customary terms and
procedures, and all applicable provisions of this Agreement, including without
limitation all conditions to the making of Loans, issue Letters of Credit for
the account of the Borrowers.
(b) Payments. At such time as Lender shall make any payment on drafts
presented under Letters of Credit, Borrowers will pay to Lender in immediately
available funds on demand the amount of such payment. Lender may charge to the
account of any Borrower all or any portion of such payment, or advance all or
any part of such payment as a Loan pursuant to ss.2.1.
12
(c) Governing Law. Each Letter of Credit will be subject to, and
performance thereunder by the parties will be governed by, the Uniform Customs
and Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication Number 500, (the "Uniform Customs"), except to the extent
otherwise expressly provided herein. This ss.2.2 shall be deemed to constitute a
contract made under the laws of the Commonwealth of Massachusetts, including
Article 5 of the Uniform Commercial Code thereof, and shall, as to matters not
governed by the Uniform Customs or this Agreement, be governed by and construed
in accordance with said Article 5.
(d) Form and Expiration of Letters of Credit. Each Letter of Credit
issued hereunder and each draft paid under a Letter of Credit, shall be issued
or paid by Lender at Lender's International Department at Lender's address first
set forth above or at such other office of Lender as Lender may hereafter advise
Borrowers. Each Letter of Credit shall be substantially in the form of Lender's
customary commercial letter of credit in effect at the time of issuance and
otherwise in form and substance acceptable to Lender in Lender's sole
discretion.
(e) Letter of Credit Fees. In addition to other fees and expenses
payable in accordance with this Agreement, Borrowers will pay to Lender on each
Letter of Credit Lender's then standard issuance, amendment, transfer and
discrepancy fees.
(f) Letter of Credit Obligations. The Letter of Credit Obligations, and
all Obligations arising in respect of the Bond Letter of Credit and the Bond
Reimbursement Agreement, shall be unconditional and irrevocable and shall be
paid strictly in accordance with the terms of this Agreement and all other
applicable Loan Documents under all circumstances, including, without
limitation, the following circumstances: (i) any lack of validity or
enforceability of the Loan Agreement or any other Loan Documents; (ii) amendment
or waiver of or any consent to departure from all or any of the terms of the
Loan Agreement or any other Loan Documents; (iii) existence of any claim,
set-off, defense or other right which any Borrower may have at any time against
any beneficiary or any transferee of a Letter of Credit or the Bond Letter of
Credit (or any Persons for whom any such beneficiary or any such transferee may
be acting), or against the Lender or any other Person, whether in connection
with this Agreement or any other Loan Document, the transactions contemplated
herein or therein or in any unrelated transaction; (iv) any statement or any
other document presented under a Letter of Credit (including
13
the Bond Letter of Credit) proving to be forged, fraudulent, invalid or (except
as set forth in the proviso in clause (v) below) insufficient in any respect or
any statement therein being untrue or inaccurate in any respect; (v) payment by
the Lender under any Letter of Credit (including the Bond Letter of Credit)
against presentation of a draft or certificate which does not comply with the
terms thereof (provided that the draft or certificate substantially complies
with the terms thereof); or (vi) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing.
ss.2.3. Interest Rate and Related Matters. (a) The rate of interest
applicable to each Loan shall be, as AAI may elect by written notice to Lender
from time to time at least two (2) Business Days prior to the making of such
Loan, either (i) the Prime Rate, or (ii) LIBOR plus the Applicable LIBOR
Increment, each such rate to fluctuate as and when the relevant reference rate
and/or the Applicable LIBOR Increment changes, except that the LIBOR rate and
Applicable LIBOR Increment shall be fixed for the relevant Interest Period. In
the absence of a timely election by AAI as provided above, whether as to an
initial borrowing or the continuation of a LIBOR Loan after the expiration of
the Interest Period applicable to it, the interest rate applicable to any such
Loan shall be the Prime Rate. Once the interest rate applicable to a Loan is so
elected by the Borrowers, it may not be changed except with the written consent
of the Lender, which may be withheld for any reason.
(b) The Borrowers shall have the right at any time to prepay in whole
or in part, without premium or penalty, any Loan as to which interest then is
based upon the Prime Rate rather than LIBOR.
(c) Where interest on a Loan is at the time of any prepayment based
upon LIBOR, the Borrowers shall provide Lender with not fewer than two Business
Days prior written notice of such prepayment and at the time of such prepayment,
and as a condition thereto, also pay to the Lender in the case of a LIBOR Loan
which is paid in whole or part on a day which is not the last day of the then
current Interest Period with respect thereto, an amount equal to any actual or
estimated loss or expense incurred by the Lender by reason of such prepayment
(if estimated loss, such estimated amount to be reconciled with the actual loss
as soon as possible thereafter, with evidence of any adjustment to the
previously estimated loss to be submitted to Borrowers), assuming that the
Lender had match-funded such LIBOR Loan with eurodollar deposits, including any
transaction fees incurred by the Lender in reinvesting the amount prepaid.
14
(d) The Borrowers further hereby jointly and severally agree to
indemnify the Lender and to hold it harmless from any loss or expense which the
Lender may sustain or incur as a consequence of (i) default by a Borrower in
making a borrowing of or continuation of LIBOR Loans after such Borrower has
given a notice requesting the same in accordance with the provisions of this
Agreement, or (ii) default by a Borrower in making any prepayment of any LIBOR
Loan after such Borrower has given a notice thereof in accordance with the
provisions of this Agreement.
(e) If the Borrowers for any reason make any payment of principal of a
LIBOR Loan on any day other than the last day of an applicable Interest Period,
or fail to borrow or continue a LIBOR Loan after having giving notice to Lender
of their intention to do so, the Lender may estimate its losses and expenses
related thereto based upon, in the case of expenses, its experience in
comparable situations and, in the case of losses, the effective interest rate
per annum at which any readily marketable bond or other obligation of the United
States, selected at Lender's sole discretion, maturing on or near the last day
of the then applicable Interest Period of such LIBOR Loan and in approximately
the same amount as such LIBOR Loan or prepaid amount, as the case may be, can be
purchased by the Lender on the day of such prepayment of principal or failure to
borrow or continue such LIBOR Loan (if such losses and/or expenses are so
estimated, such estimated amount(s) shall be reconciled with the actual losses
and/or expenses as soon as possible thereafter, with evidence of any adjustment
to the previously estimated loss to be submitted to Borrowers).
(f) In the event the Lender shall have determined in good faith (which
determination shall be final and conclusive) that: (i) adequate and fair means
do not exist to ascertain LIBOR as of the date any LIBOR Loan is to be made or
continued hereunder, or (ii) the making or continuation of a LIBOR Loan has been
made impracticable or unlawful for any reason, or (iii) that LIBOR no longer
represents the effective cost to the Lender for U.S. dollar deposits in the
interbank market for deposits in which it regularly participates, THEN and in
any such event the Lender shall so notify the Borrowers. Until the Lender
notifies the Borrowers that the circumstances giving rise to such notice no
longer apply, the obligation of the Lender to allow selection by the Borrowers
of LIBOR Loans shall be suspended. If at the time the Lender so notifies the
Borrowers, a Borrower has previously given the Lender a notice of request for
the making or continuation of a LIBOR Loan but such LIBOR Loans have not yet
been made or continued, such notice shall be deemed void and the Borrowers shall
be deemed to have requested such Loan with interest determined with reference to
the Prime Rate. Upon such date as shall be specified in such notice (which shall
not be earlier than the
15
date such notice is given) the Borrowers shall forthwith prepay all outstanding
LIBOR Loans, together with interest thereon, and may borrow a Loan of comparable
amount with interest determined by reference to the Prime Rate.
ss.2.4. Increased Costs. If any law, executive order or regulation, or
any governmental directive (whether or not having the force of law), or any
interpretation of any of the foregoing by any court or administrative or
governmental authority charged with the administration thereof, or any change
therein, shall either (i) impose, modify or deem applicable any reserve, special
deposit or similar requirements against any of the Loans (including any Letters
of Credit issued or arranged by the Lender for the benefit of the Borrowers); or
(ii) impose on the Lender any tax or other condition or requirements relating to
any of the Loans; and the result of any such event shall be to increase the cost
to the Lender of providing any Loans hereunder, then, upon demand by the Lender
and delivery to the Borrowers of a certificate of an officer of the Lender
explaining in reasonable detail such law, executive order, regulation,
directive, or the interpretation thereof, its impact on the Lender and the basis
for determining such increased costs and their allocation, the Borrowers shall
immediately pay to the Lender such amounts as shall be sufficient to compensate
the Lender for such increased cost, including any interest accrued thereon, from
the date of demand through the date of payment, at the rate applicable to the
Loans in question; provided, however, that the foregoing provisions shall not
apply to any law with respect to (a) taxes imposed upon or measured by the net
income of the Lender, or (b) taxes which would have been imposed even if there
had been no provision for LIBOR Loans and/or letters of credit in this
Agreement. The determination of Lender of the amount of such costs, if made in
good faith and in the absence of manifest error, shall be conclusive; and
provided, further, that any increased cost of providing or maintaining LIBOR
Loans related to any reserve or similar requirements shall be reimbursable
hereunder from and after the date such increased cost first was incurred by
Lender, even if demand for reimbursement thereof shall be made thereafter.
ss.2.5. Interest Limitation. Notwithstanding any other term of this
Agreement or any other Loan Document, the maximum amount of interest which may
be charged to or collected from any Person liable hereunder or under any Note,
shall be absolutely limited to, and shall in no event exceed, the maximum amount
of interest which could lawfully be charged or collected under applicable law
(the "Maximum Rate"), so that the total of all amounts constituting interest
under applicable law, howsoever computed, shall never exceed as to any Person
liable therefor the Maximum Rate, and any term of this Agreement or any other
Loan Document which
16
could be construed as providing for interest in excess of such lawful maximum
shall be and hereby is made expressly subject to and modified by the provisions
of this paragraph. If, in any month, the effective interest rate on any amounts
owing in respect of any Loan, absent the Maximum Rate limitation contained
herein, would have exceeded the Maximum Rate, and if in the future months, such
effective interest rate would otherwise be less than the Maximum Rate, then the
effective interest rate for such month shall be increased to the Maximum Rate
until such time as the total amount of interest paid equals the amount of
interest which would have been paid if the same had not been limited by the
Maximum Rate.
ss.2.6. Joint and Several Responsibility to Repay Loans. The
obligations of the Borrowers in respect of Loans to any of them, as well as all
obligations in respect of the Bond Letter of Credit and/or the Bond
Reimbursement Agreement, shall be joint and several, without regard to the
application of the proceeds of any Loan, the Borrowers specifically
acknowledging that their business relationship is such that Loans to any of
them, as well as the continuation of the Bond Letter of Credit, will benefit
each of them.
ss.2.7. Requests for Loans. The Lender is authorized to receive and act
upon telephone, telecopy and written Loan requests from any apparently
authorized officer or other representative of AAI (hereby authorized by each
other Borrower to act on their behalf and as their agent for all purposes of
this Agreement and each other Loan Document, including without limitation
requesting Loans and Letters of Credit), in accordance with the Lender's
applicable procedures as in effect from time to time, and shall not be liable to
the Borrowers on account of any defect therein, if Lender acts in good faith and
without actual knowledge that the person making such request is unauthorized to
do so.
ss.3. SECURITY.
ss.3.1. Grant of Security Interest, etc.. (a) In order to secure the
due and punctual payment and performance of all Obligations, in the manner and
according to the priority hereinafter provided, each of AAI and AEPI hereby
confirms its prior grant to Lender, as a secured party, of a continuing security
interest in and lien on all of AAI's and AEPI's properties, assets and rights of
every kind and nature constituting tangible or intangible personal property,
wherever located, whether now owned or hereafter acquired or arising, and all
proceeds and products thereof, accessions thereto and substitutions therefor
(all of the same being hereinafter called the "Personal Property Collateral")
including, without limiting the generality of the foregoing, the following
properties, assets and rights now or hereafter owned by AAI and/or AEPI:
17
(i) all equipment, furniture, fixtures, machinery, inventory,
raw materials, work in progress, books and records and goods;
(ii) all accounts and all rights to the proceeds thereof as
Collateral for all Obligations, except that Lender's security interest
in accounts as collateral for the Bond Letter of Credit Obligations
(but not its security interest therein as collateral for the other
Obligations) shall be terminated upon Lender's indefeasible receipt,
following its declaration of acceleration of all Loans and other
Obligations due hereunder, of proceeds of such accounts in an aggregate
amount in cash of $1,500,000;
(iii) all rights to the payment of money including tax refund
claims, insurance proceeds and tort claims and all rights to proceeds
of any pension plan termination;
(iv) all chattel paper, documents, instruments and
securities;
(v) all general intangibles, leasehold interests, patents,
trademarks, trade names, service marks, copyrights and the like, and
the good will of the business connected with the use of and symbolized
by such patents, trademarks, trade names, service marks, copyrights and
the like together with all assets which uniquely reflect the good will
of the business of the Borrower, including but not limited to, the
Borrower's customer lists, trade secrets, corporate and other business
records, license rights, franchise agreements, advertising materials,
operating manuals, methods, processes, know-how, technology, sales
literature, drawings, specifications, descriptions, inventions, name
plates, catalogs, dealer contracts, supplier contracts, client
contracts, distribution agreements, confidential information,
consulting agreements, engineering contracts and engineering drawings;
(vi) to the greatest extent permitted by law, all cash,
deposit and other accounts, certificates of deposit, cash equivalents
and the like.
(b) Without limiting the generality of the foregoing, it is agreed that
Lender is hereby granted a purchase money security interest in all assets of AAI
and/or AEPI acquired at any time with proceeds of any Loan; it is further agreed
that Lender's security interest and lien upon the Personal Property
18
Collateral of AAI and AEPI shall be exclusive of all other security interests,
liens and encumbrances ("Encumbrances") except for any Encumbrances (i)
expressly permitted by this Agreement, (ii) hereafter specifically permitted in
writing by Lender, or (iii) set forth in Schedule 3.1(b) hereto ("Permitted
Encumbrances").
(c) To the extent that those Obligations arising from or related to the
Bond Letter of Credit or the Bond Reimbursement Agreement (collectively, the
"Bond Letter of Credit Obligations") are at any time owned by any Person other
than the Person then owning the remaining Obligations, then (but only then),
provided there then is no Default or Event of Default hereunder, the security
interest securing the Bond Letter of Credit Obligations shall be senior and
superior to the security interest securing the other Obligations.
(d) Quail hereby agrees that until such time as no Obligations are
outstanding and Lender no longer has an obligation to make Loans or issue
Letters of Credit hereunder, Quail shall not incur or permit any security
interests, liens or other encumbrances upon any of its assets or property except
for any Encumbrances (i) expressly permitted by this Agreement, (ii) hereafter
specifically permitted in writing by Lender, or (iii) set forth in Schedule
3.1(d) hereto ("Permitted Quail Encumbrances").
ss.3.2. Grant of Mortgage and Security Interest. As further Collateral
for the Obligations, Lender has been, or shall on the Closing Date be, granted a
first mortgage lien upon the premises located at 19 and 00 Xxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx (the "Premises"), being Borrower's chief executive office and a
manufacturing and distribution facility (including all personal property located
thereon or used in connection therewith), pursuant to one or more Mortgages.
ss.3.3. Additional Representations and Agreements Concerning the
Collateral. The Borrowers hereby jointly and severally represents and warrants
to, and agree with, the Lender as follows with respect to the Personal Property
Collateral and the Premises (collectively, the "Collateral"):
(a) each Borrower granting to Lender the security interest or
other lien therein is the owner of each item of Collateral,
free from any adverse lien, security interest or encumbrance
(except for any Permitted Encumbrances), and except for
Permitted Encumbrances, no Borrower shall pledge, mortgage or
create, or suffer to exist, a security interest or other lien
in any of the Collateral in favor of any person other than the
Lender;
19
(b) each Borrower agrees that it will not change the location of
its chief executive office or the location(s) where its books
and records are kept without 30 days' prior written notice to
the Lender. As of the date hereof, the Personal Property
Collateral is kept at the Borrowers' chief executive office
and at the other locations, if any, listed on Schedule 3.3(b)
hereto, and no Borrower will remove such Collateral from such
locations - or add to or change such locations - without 30
days' prior written notice to the Lender, except in connection
with sales of inventory in the ordinary course of business or
as otherwise permitted byss.6.12-(a) hereof;
(c) except as permitted by this ss.3.3 and ss.6.12(a) hereof, no
Borrower will sell or offer to sell or otherwise transfer the
Collateral or any interest therein;
(d) each Borrower shall have and maintain at all times with
respect to the Collateral owned or held by it insurance as
required underss.6.13(a) hereof or under any other Loan
Document securing any Obligations. In the event of a failure
to provide and maintain any such insurance or upon the
occurrence of an Event of Default, the Lender may without
notice to or further act of any Borrower act as
attorney-in-fact for each Borrower in obtaining, reinstating,
adjusting, settling or cancelling such insurance and endorsing
any drafts and apply any amounts collected or received under
any such policies to any Obligations secured hereby in such
order of preference as the Lender in its discretion may
determine, or at the option of the Lender the same may, and
during such period as there then shall be no Default or Event
of Default the same shall, be released to the appropriate
Borrower to apply to the costs of repair or replacement, but
such application or release shall not cure or waive any
Default or Event of Default, and no amount so released shall
be deemed a payment on any Obligation secured hereby. The
foregoing designation to act as attorney-in-fact for each
Borrower shall be deemed coupled with an interest and
irrevocable;
(e) the Borrowers will keep the Collateral and their other
property in good order and repair (ordinary wear and tear,
goods which are not repairable and goods which are no longer
used or useful in its business only excepted) and will not use
the same in violation of law or any policy of insurance
thereon. The Lender may inspect the Collateral and any other
property of any
20
Borrower at any reasonable time, wherever located, and
whenever there then shall not be a Default or Event of Default
upon reasonable prior notice to AAI, and the Borrowers shall
facilitate full and timely access thereto;
(f) the Borrowers will pay promptly all taxes and assessments upon
the Collateral and their other property or for its use or
operation or upon this Agreement prior to the time when any
penalties or interest accrue with respect thereto, or any lien
securing them arises, unless, in any such case, the same is
being contested diligently in good faith by appropriate
proceedings and an adequate reserve therefor has been
established and is maintained in accordance with GAAP;
(g) if any Borrower shall fail to comply with its obligations
herein to maintain, insure and protect the Collateral and its
other property and such failure shall continue for 10 days
after written notice of such failure has been given to the
Borrower by the Lender (except that no such notice shall be
required in the case of (i) a failure to maintain insurance,
or (ii) any failure to maintain or protect the Collateral
which jeopardizes the safety or value of any Collateral or the
Lender's rights therein), the Lender may discharge taxes and
other encumbrances at any time levied or placed on any
Collateral, pay any insurance premiums in respect thereof and
make repairs thereto and pay any necessary filing fees. The
Borrowers agree, jointly and severally, to reimburse the
Lender on demand for any and all expenditures so made, and
until paid the amount thereof shall be an Obligation secured
by the Collateral. The Lender shall have no obligation to the
Borrowers to make any such expenditures, nor shall the making
thereof relieve the Borrowers of any Default or Event of
Default;
(h) the Lender may at any time at its option after an Event of
Default, transfer to itself or any nominee any securities
constituting Collateral, receive any income thereon and apply
it to the Obligations;
(i) the Borrowers shall do, make, execute and deliver all such
additional and further acts, things, deeds, assurances and
instruments as the Lender may require more completely to vest
in and assure to the Lender its rights in any of the
Collateral, including without limitation execution and
delivery of financing statements which the Lender deems
appropriate to perfect and continue the security interests
hereby granted.
21
ss.3.4. Remedies; Waiver. (a) Upon the occurrence of an Event of
Default, the Lender shall thereafter have in any jurisdiction in which
enforcement is sought, in addition to all other rights and remedies, the rights
and remedies of a secured party under the Uniform Commercial Code, including
without limitation the right to take possession of the Personal Property
Collateral, and for that purpose the Lender may, so far as a Borrower can give
authority therefor, enter upon any premises on which the Collateral may be
situated and remove the same therefrom or render the same unusable. Unless the
Collateral is perishable or threatens to decline speedily in value or is of a
type customarily sold on a recognized market, the Lender shall give to the
Borrowers at least ten (10) days' prior written notice of the time and place of
any public sale of Collateral consisting of personal property or of the time
after which any private sale or any other intended disposition thereof is to be
made, and such notice shall be given in the manner and to the relevant address
specified in ss.12 hereof.
(b) With respect to both the Obligations and the Collateral, each
Borrower hereby assents to any extension or postponement of the time of payment
or any other indulgence, to any substitution, exchange or release of Collateral,
to the addition or release of any party or person primarily or secondarily
liable, to the acceptance of partial payment thereon and the settlement,
compromising or adjusting of any thereof, all in such manner and at such time or
times as the Lender may deem advisable. Except as otherwise provided by
applicable law, (i) the Lender shall have no duty as to the collection or
protection of the Collateral or any income thereon, nor as to the preservation
of rights against prior parties, nor as to the preservation of any rights
pertaining thereto beyond the safe custody of any Collateral in its actual
possession; (ii) the Lender may exercise its rights with respect to the
Collateral without resorting or regard to other collateral or sources of payment
for the Obligations; (iii) the Lender shall not be required to marshal any
present or future security (including but not limited to the Collateral) for, or
guaranties of, the Obligations or any of them, or to resort to such security or
guaranties in any particular order, and all of Lender's rights hereunder and in
respect of such security and guaranties shall be cumulative and in addition to
all other rights, however existing or arising. The Lender shall not be deemed to
have waived any of its rights upon or under the Obligations or the Collateral
unless such waiver be in writing and signed by the Lender.
22
ss.3.5. Costs; Application of Proceeds. The Borrowers jointly and
severally agree to pay to the Lender on demand all reasonable expenses actually
incurred (excluding internal overhead items or executive time expended),
including reasonable counsel fees, incurred or paid by the Lender in protecting
or enforcing its rights upon or under the Obligations or as to any Collateral.
After deducting all of said expenses, the residue of any proceeds of collection
or sale of the Obligations or Collateral shall be applied to the payment of the
Obligations in such order as the Lender may determine, proper allowance for
interest on the Obligations not then due being made, and any excess shall be
returned to the Borrowers or any other party claiming a right thereto, as
appropriate, and the Borrowers, jointly and severally, shall remain liable for
any deficiency.
ss.3.6. All Rights as to Collateral Cumulative. All rights, liens and
interests granted to Lender pursuant to this Article 3 shall be in addition to,
and not in lieu of, any other rights granted to Lender in assets and rights of
any Borrower, except that the provisions of ss.3.1(b) hereof shall supersede and
replace any contrary provisions of any existing collateral arrangements.
ss.4. REPRESENTATIONS AND WARRANTIES. The Borrowers jointly and
severally hereby represent and warrant to the Lender as follows:
ss.4.1. Corporate Existence. Each Borrower is a business corporation
duly organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts, (ii) has adequate corporate power and authority
and full legal right to own or to hold under lease its properties and to carry
on the business in which it is presently engaged and will be engaged upon the
Closing Date, and (iii) is qualified as a foreign corporation in each
jurisdiction wherein such qualification is necessary.
ss.4.2. Due Authority, etc. The execution and delivery by each Borrower
of each of the Loan Documents to which it is or is to become a party and the
performance by it of all of its agreements and obligations thereunder are within
its legal power and have been duly authorized by all necessary action on its
part, and do not and will not (i) contravene any provision of law or its
charter, by-laws or other organizational documents (each as from time to time in
effect), (ii) conflict with, or result in a breach of any term, condition or
provision of, or constitute a default under or result in the creation of any
mortgage, lien, pledge, charge, security interest or other encumbrance upon any
of the property of the Borrower under, any agreement, mortgage or other
instrument to which the Borrower is or may become a party or by which it or any
of its property is or may become bound or affected, or (iii) violate any law,
regulation or judicial or administrative order.
23
ss.4.3. Binding Effect of Documents, etc. Each Borrower has duly
executed and delivered each of the Loan Documents to which it is a party and
each such Loan Document is in full force and effect and constitutes the legal,
valid and binding obligation of each Borrower, as the case may be, enforceable
against it in accordance with its terms, subject to bankruptcy, insolvency or
other laws affecting generally the enforcement of creditors' rights and general
principles of equity.
ss.4.4 Financial Statements; No Adverse Change. The Borrowers have
heretofore furnished to Lender those financial statements described in Schedule
4.4 hereto, all of which present fairly the financial condition, assets,
liabilities and income of the subject thereof as of the dates thereof and for
the periods then ended and have been prepared in accordance with generally
accepted accounting principles consistently applied ("GAAP"). There has not been
any material adverse change in the financial condition, assets, liabilities or
income of a Borrower from the date of the most recent balance sheet applicable
to it to the Closing Date.
ss.4.5. Litigation. There is not pending or, to the best knowledge of
any Borrower, threatened, any action, suit, or proceeding before any court,
governmental or regulatory authority, agency, commission, or board of
arbitration against a Borrower, which by itself or taken together with other
such litigation, has a reasonable possibility of materially and adversely
affecting the financial condition, assets or operations of a Borrower, nor is
any basis for any such proceeding or matter known to exist.
ss.4.6. Ownership of Assets; Location of Offices. Each Borrower is the
owner of its properties free and clear of all liens except as may be
specifically set forth in Schedule 4.6 hereto; and each Borrower will defend its
properties against all claims and demands of all persons at any time claiming an
interest therein other than on account of Permitted Encumbrances. The address of
the chief executive office and chief place of business of each Borrower is as
set forth in the first paragraph of this Agreement, and no Borrower has any
other place of business except as set forth in Schedule 3.3(b) hereof.
ss.4.7. Tax Matters. Each Borrower has filed all federal, state and
local tax returns and other reports it is required to file and has paid or made
adequate provision for payment of all such taxes, assessments and other
governmental charges.
24
ss.4.8. No Margin Stock Credit. No Borrower is engaged in the business
of extending credit for the purpose of purchasing or carrying "margin stock"
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System (12 CFR Part 221), nor does any Borrower own or have any present
intention of acquiring any such margin stock or a "margin security" within the
meaning of Regulation G of the Board of Governors of the Federal Reserve System
(12 CFR, Part 207). None of the proceeds of the Loans will be used directly or
indirectly by any Borrower for the purpose of purchasing or carrying, or for the
purpose of reducing or retiring any Indebtedness which was originally incurred
to purchase or carry, any such margin security or margin stock or for any other
purpose which might constitute a transaction contemplated by said Regulation G
or Regulation U, or cause this Agreement to violate any other regulation of the
Board of Governors of the Federal Reserve System or the Securities Exchange Act
of 1934, as amended, or any rules or regulations promulgated under either said
statute.
ss.4.9. No Investment Company. No Borrower is an "investment company"
or a company "controlled" by an "investment company" as such terms are defined
in the Investment Company Act of 1940, as amended.
ss.4.10. Solvency. After giving effect to the Borrowings to be made
under this Agreement, each Borrower (a) will be able to pay its debts as they
become due, (b) will have funds and capital sufficient to carry on its business
and all businesses in which it is about to engage, and (c) will own property
having a value both at fair valuation and at fair saleable value in the ordinary
course of such Borrower's business, greater than the amount required to pay its
Indebtedness, including for this purpose unliquidated and disputed claims. No
Borrower will be rendered insolvent (as such term is defined in 11 U.S.C.
ss.101(31)) by the execution and delivery of this Agreement or the consummation
of any transactions contemplated herein.
ss.4.11. Approvals; Licenses. Any approvals required from all Persons,
including without limitation all governmental authorities, with respect to the
execution and performance of the Loan Documents by the Borrowers have been
obtained. Each Borrower has all permits, governmental licenses, registrations
and approvals, required in carrying out its respective businesses as presently
conducted and as required by law or the rules and regulations of any federal,
foreign, state, county or local association, corporation or governmental agency,
body, instrumentality or commission having jurisdiction over such Borrower,
including but not limited to the United States Environmental Protection Agency,
the United States Department of Labor, the United States Occupational Safety and
Health Administration, the
00
Xxxxxx Xxxxxx Equal Employment Opportunity Commission and analogous and related
state and foreign agencies. There is no violation or failure of compliance or
allegation of such violation or failure of compliance on the part of a Borrower
with any of the foregoing permits, licenses, registrations, approvals, rules or
regulations and there is no action, proceeding or investigation pending or to
the knowledge of any Borrower threatened nor has any Borrower received any
notice of such which might result in the termination or suspension of any such
permit, license, registration or approval.
ss.4.12. Ownership Interests. INTENTIONALLY OMITTED.
ss.4.13. Subsidiaries. AEPI and Quail are the only Subsidiaries of
AAI and no Borrower except AAI has any Subsidiaries as of the date hereof.
ss.4.14. Environmental Matters. Except as previously disclosed in
writing to Lender or as disclosed in Schedule 4.14A hereto, no Borrower nor, to
the best knowledge of each Borrower after due inquiry, any other Person:
(a) has ever caused, permitted, or suffered to exist any
Hazardous Material to be spilled, placed, held, located or disposed of on,
under, or about, nor are any now existing on, under, or about, any premises
owned, leased or otherwise operated by a Borrower ("Property"), or into the
atmosphere, any body of water, any wetlands, or on any other real property
adjacent to the Property, except for any Hazardous Material used or disposed of
in compliance with law;
(b) has any knowledge after due inquiry that any Property or
any other real property adjacent to the Property has ever been used (whether by
a Borrower or, to the best knowledge of each Borrower after due inquiry, by any
other Person) as a treatment, storage (except for its own material in the
ordinary course of business) or disposal (whether permanent or temporary) site
for any Hazardous Material; and
(c) has any knowledge after due inquiry of any notice of
violation, lien or other notice issued by any governmental agency with respect
to the environmental condition of the Property, or any other real property
adjacent to the Property.
ss.4.15. No Adverse Effect on Bond Reimbursement Agreement. The
consummation of the transactions contemplated by this Agreement will not limit,
conflict with or otherwise impair the rights and obligations of CTC, Lender or
the Borrowers in respect of the Bond Reimbursement Agreement, Borrowers hereby
agreeing that Lender has succeeded to, and may from time to time exercise, all
rights previously held by CTC under or in respect of the Bond Reimbursement
Agreement.
26
ss.4.16. Other Representations. Each of the representations and
warranties made by any Borrower in any of the Loan Documents was true and
correct in all material respects when made and continues to be true and correct
in all material respects on the Closing Date, except to the extent that any of
such representations and warranties expressly relate to an earlier date only.
ss.4.17. Disclosure. No information furnished by or on behalf of a
Borrower in any Loan Document or in any other document, certificate, statement
or letter furnished to the Lender in connection with any of the transactions
contemplated by any of the Loan Documents, including information contained in
any tax returns or financial statements, contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained therein not misleading in light of the circumstances in
which they are made. There is no fact known to a Borrower (other than general
economic and political conditions affecting business generally) which materially
and adversely affects, or which is reasonably likely in the future materially
and adversely to affect, the financial position, business, operations, prospects
or affairs of any Borrower.
ss.5. Conditions to Lending. The obligations of the Lender to make any
Loan on or after the Closing Date shall be subject to the satisfaction at such
time of each of the following conditions precedent:
ss.5.1. Representations and Warranties. Each of the representations and
warranties made by or on behalf of the Borrowers to the Lender in this Agreement
or the other Loan Documents, except to the extent that they expressly relate to
an earlier date only, shall then be true and correct in all material respects.
ss.5.2. Legality of Transactions. It shall not then be unlawful for the
Lender or any Borrower to perform any of its respective agreements or
obligations under any of the Loan Documents.
ss.5.3. No Defaults. No Default or Event of Default shall then exist.
ss.5.4 Proceedings and Documents. All corporate, governmental and other
proceedings in connection with the transactions contemplated by the Loan
Documents, and all instruments and documents incidental thereto, shall be in
form and substance satisfactory to the Lender and the Lender shall have
theretofore
27
received all such executed originals or certified or other copies of all such
instruments and documents as the Lender shall have reasonably requested.
ss.5.5 Legal Opinion. The Lender shall have received a written opinion,
addressed to the Lender, dated the Closing Date, from counsel to the Borrowers
in form and substance satisfactory to the Lender and its counsel.
ss.6. Covenants of the Borrowers. The Borrowers hereby covenant,
jointly and severally, that, so long as any Loan is outstanding or the Lender
has any obligation to make any Loan hereunder, unless the Lender otherwise
agrees in writing:
ss.6.1. Legal Existence, etc. Each Borrower will (a) maintain its legal
existence and good standing under the laws of its jurisdiction of organization,
and (b) maintain its qualification to do business in each state in which the
failure to do so would have a material adverse effect on the condition,
financial or otherwise, of a Borrower.
ss.6.2. Use of Loan Proceeds. Each Borrower shall use the proceeds of
all Loans made to it only as permitted by ss.2.
ss.6.3. Conduct of Business. Each Borrower will continue to engage
primarily in the business engaged in by it on the date hereof.
ss.6.4. Access; Audit. Each Borrower will permit the Lender, by its
representatives and agents, to inspect any of its properties, including, without
limitation, books and records, computer files and tapes and financial records,
to audit, examine and make copies of its books of account and other records and
to discuss its affairs, finances and accounts with, and to be advised as to the
same by, its officers and other responsible employees and professional advisers
at such reasonable times and intervals as the Lender may designate. Without
limiting the generality of the foregoing, the Lender shall have the right at any
time to conduct an internal audit of the Borrowers upon not less than ten (10)
days advance notice to AAI's senior management; the Borrowers shall pay all
Audit Fees (not in excess of $1,350 per audit, except that such limitation shall
not apply to Audit Fees incurred (a) during a Default or Event of Default, or
(b) in respect of the first such audit conducted after an Acquisition by AAI or
any of its Affiliates).
ss.6.5. Compliance Certificate. Within ten (10) Business Days after (a)
AAI shall file or be required to file its annual report on Form 10-K (or
successor form), and (b) AAI shall file or be required to file its quarterly
report on Form 10-Q (or
28
successor form), or (c) if such form shall not be required to be filed, then
within 45 days after the end of each calendar quarter of the Borrowers
hereafter, the Borrowers shall deliver to Lender a certificate (the "Compliance
Certificate") of the chief financial officer of AAI which shall contain a
statement to the effect that no Event of Default or Default has occurred,
without having been waived in writing, or if there shall have been an Event of
Default not previously waived in writing pursuant to the provisions hereof, or a
Default, such officer's certificate shall disclose the nature thereof and the
steps being taken to remedy it. In each such Compliance Certificate, the officer
of AAI also shall calculate, set forth and certify to the accuracy of the
amounts required to be calculated in the financial covenants of Borrowers
contained in this Agreement and also shall comment in a reasonably detailed
narrative form as to the results of operations of AAI and its Subsidiaries for
such quarter and shall compare same to the Budget for such quarter (the
Compliance Certificate may omit such narrative commentary and include in its
place a copy of the relevant portion of AAI's then current 10-K and/or 10-Q, as
applicable, including its so-called "management's discussion and analysis of
financial condition and results of operations."
ss.6.6. Financial Information. The Borrowers shall provide to the
Lender (a) within 10 days after the filing thereof, their federal income tax
returns, including those most recently filed before the date hereof, as well as
any quarterly, annual and special reports filed on SEC Forms 10-Q, 10-K and 8-K
(or any successor forms), and any exhibits thereto; (b) within 120 days after
the end of their fiscal year, an income statement, balance sheet and any other
related consolidated financial statements of the Borrowers, prepared in
accordance with GAAP and audited and certified without qualification by the
Borrowers' outside auditors (being Xxxxxx Xxxxxxxx LLP or such other firm as the
Lender may hereafter approve); (c) within 45 days after the end of each fiscal
quarter, internally prepared consolidated financial statements of the Borrowers
similar to those required by clause (b) above, except that they will have been
internally prepared without outside review (together with accounts receivable
agings for and as of the end of such quarter, and from the beginning of the then
current fiscal year to the end of such quarter), certified to by the chief
financial officer of AAI as being in compliance with GAAP, subject only to
normal year-end adjustments and except that such internally prepared statements
need not contain footnotes; (d) promptly upon receipt thereof, copies of all
management letters and other material reports which are submitted to a Borrower
by its independent auditors, if any; (e) within 15 days after their
distribution, copies of reports to and any other communications with their
shareholders; (f) on or before the 90th day after the end of each fiscal year
ending on or after December
29
31, 1997, an updated proposed budget together with cash flow statement, prepared
on an annual basis, and updated financial projections (together, the "Budget")
for the then current fiscal year, setting forth in detail reasonably
satisfactory to the Lender the projected results of operations of AAI and its
Subsidiaries, including without limitation, projected revenues and expenses,
capital expenditures, stating underlying assumptions and certified by an
authorized officer of AAI as being fair and reasonable in the light of AAI's and
its Subsidiaries' business condition and prospects; and (g) promptly upon
request and in form satisfactory to the Lender, all such other information as
the Lender may reasonably request from time to time.
ss.6.7. Maintenance of Banking Relationship; Cash Management. Each
Borrower (other than Quail) will maintain all of its deposit, checking and other
bank accounts with the Lender, excluding only those accounts which are used (a)
solely for the purchase and sale of foreign currency, (b) solely to buy and sell
eurodollar deposits, or (c) solely for payroll purposes.
ss.6.8. Financial Covenants. The Borrowers will maintain, as of the end
of each quarter-annual fiscal period, the Maximum Debt to Tangible Net Worth
ratio, the Minimum Debt Service Coverage ratio, Minimum Tangible Net Worth and
Minimum Working Capital.
ss.6.9. Senior Management. Xxxxxx X. Xxxxx shall remain as chief
executive officer of AAI (or a substantively comparable position); provided,
however, that no Default or Event of Default shall arise by breach of this
ss.6.9 if (a) a replacement CEO satisfactory to Lender is retained within 180
days after the departure of his predecessor, and (b) at all times prior to the
retention of such permanent successor, the duties of the departed CEO shall be
performed by interim personnel in a manner reasonably satisfactory to Lender.
ss.6.10. INTENTIONALLY OMITTED.
ss.6.11. Acquisitions. No Borrower nor any Subsidiary shall acquire,
whether by purchase of capital stock, assets or otherwise, any other Person or
business, except for such an acquisition (an "Acquisition") which satisfies each
of the following conditions: (a) the business acquired is in the same or
compatible industry as that of the purchaser or any subsidiary thereof; and (b)
prior to executing any legally binding agreement to undertake such acquisition,
the purchaser submits to the Lender (i) historical financial statements for the
Person or business to be acquired for at least the two most recent complete
fiscal years, plus any year-to-date interim statements, together with (ii)
projected, pro forma financial statements for the Person or business to be
acquired, as combined with the Borrowers, for at
30
least two complete fiscal years following the anticipated acquisition date,
showing compliance with all financial covenants contained in this Agreement.
Lender shall respond to any written request for approval of an Acquisition
hereunder within ten (10) business days after receipt of all information
necessary to consider such request, and failure of Lender to respond within such
ten (10)-day period shall constitute Lender's consent to such Acquisition under
this ss.6.11. This ss.6.11 shall not apply to acquisitions not financed by
Lender hereunder.
ss.6.12. Other Negative Covenants. No Borrower nor any Subsidiary
shall:
(a) Sell or otherwise transfer any of its assets to any entity,
including Subsidiaries or Affiliates of AAI, other than for equivalent value and
in the ordinary course of its business.
(b) Engage in any transaction or enter into any agreement with any
Affiliate, or in the case of Affiliates or Subsidiaries, with AAI or another
Affiliate or Subsidiary, on other than an arm's length basis.
(c) Change its fiscal year from a year ending on December 31 provided
that the Lender's consent to a fiscal year change shall not be unreasonably
withheld so long as the parties are able to agree to an appropriate adjustment
to the financial covenants contained in this Agreement.
(d) Own any Subsidiary unless the Lender shall have given its prior
written consent thereto (which consent shall not be unreasonably withheld or
delayed) and such Subsidiary shall have become a party hereto as a joint and
several obligor with AAI pursuant to a written assumption agreement and
amendment hereto in form and substance satisfactory to Lender.
(e) Dissolve, liquidate, wind up, merge or consolidate with, or acquire
all or a substantial portion of the assets of (whether in one transaction or a
series of transactions), another Person, other than in the ordinary course of
its business or as permitted by ss.6.11 hereof.
(f) Become involved, or permit any tenant or other occupant of the
Property to become involved, in any operations at the Property generating,
storing, disposing, or handling Hazardous Material or any other activity that
could lead to the imposition on a Borrower, the Lender or the Property, of any
material liability or lien under any environmental laws.
(g) Guarantee or otherwise pledge its credit or assets to assure
payment of the Indebtedness of any other Person, except that AAI may guarantee
Indebtedness for borrowed money incurred by any wholly-owned Subsidiary thereof,
provided that there then shall not be, or be created by such transaction, a
Default or Event of Default.
31
ss.6.13. Other Affirmative Covenants. Each Borrowers shall:
(a) Maintain casualty insurance coverage (including flood insurance),
on its physical assets and other insurance against other risks, including public
liability and product liability insurance in such amounts and of such types as
may be reasonably requested by the Lender, and in any event, as are ordinarily
carried by similar businesses. In the event of acquisition of additional assets
or of incurrence of additional risk of any nature, the Borrowers shall cause
such insurance coverage to be increased or amended in such manner and to such
extent as prudent business judgment would dictate. In the case of all policies
insuring property in which the Lender may from time to time have a security
interest or other lien of any kind whatsoever, all such insurance policies shall
provide that the loss payable thereunder shall be payable to Borrowers and the
Lender, as their respective interests may appear, with the Lender to be named as
an additional insured on any liability policy. A list of all said policies or
certificates thereof, including all endorsements thereof and those required
hereunder, shall be deposited with the Lender, and such policies shall contain
provisions that no such insurance may be cancelled or decreased without at least
twenty (20) days prior written notice to the Lender. At the Lender's request,
copies of all such policies shall be delivered to the Lender. If Borrowers shall
at any time or times hereafter fail to obtain and maintain any of the policies
of insurance required herein, or fail to pay any premium in whole or in part
relating to any such policies, the Lender may, but shall not be obligated to,
obtain and/or cause to be maintained insurance coverage with respect to the
assets of Borrowers, including, at Lender's option, the coverage provided by all
or any of the policies of Borrowers and pay all or any part of the premium
thereunder, without waiving any Event of Default by Borrowers, and any sums so
disbursed by the Lender shall be additional Obligations of Borrowers to Lender
payable on demand. Following an Event of Default, the Lender shall have the
right to settle and compromise any and all claims under any of the policies
required to be maintained by Borrowers hereunder, to demand, receive and receipt
for all monies payable thereunder, and to execute in the name of Borrowers,
Lender or both any proof of loss, notice or other instruments in connection with
such policies or any loss thereunder, and each of the Borrowers hereby
constitutes the Lender its attorney-in-fact for purposes of enforcing Lender's
rights under this ss.6.13(a). Provided that no Default or Event of Default has
occurred, casualty insurance proceeds payable to any Borrower shall upon request
be released to a Borrower to reimburse it for the actual cost of repairing or
replacing damaged, stolen or destroyed Collateral.
32
(b) Promptly notify Lender of any Default or Event of Default, and
promptly notify Lender of any changes in the financial condition of AAI and its
Subsidiaries which, individually or cumulatively, may result in a material
adverse change to AAI and/or its Subsidiaries.
(c) If Borrowers shall now or hereafter maintain an employee benefit
plan subject to the Employee Retirement Income Security Act of 1974, as amended
(hereinafter "ERISA"), it shall promptly: (i) notify Lender of the filing of a
notice with the Pension Benefit Guaranty Corporation ("PBGC") pursuant to ERISA
that the plan is to be terminated; and (ii) notify Lender of receipt of notice
of or institution of any proceedings by the PBGC under ERISA concerning any such
plan.
(d) Notify Lender at least thirty (30) days prior to: (i) any change in
the address of the chief executive office and/or chief place of business of a
Borrower; (ii) any change in the location of any records pertaining to the
accounts receivable of Borrowers; (iii) any change in the address where any
inventory (including returns of inventory) with a cost in excess of $100,000
is or may be stored, and (iv) notify Lender within ten (10) days after the
granting to a Borrower or any Subsidiary of any patent, trademark, copyright or
other intellectual property right. Schedule 6.13 discloses the (i) existing
chief executive office and chief place of business for each Borrower, (ii)
existing location of the records pertaining to the accounts receivable of each
Borrower, (iii) existing locations of all inventory (including returns of
inventory), and (iv) presently owned patents, trademarks, copyrights or other
intellectual property rights.
(e) Keep complete and accurate books and records with respect to the
business of AAI and its Subsidiaries and all its properties, consistent with
good business practice.
(f) Pay or deposit promptly when due all taxes, assessments and
governmental charges upon and relating to its ownership or use of any of its
assets or its income, or the operation of its business or otherwise, for which a
Borrower is or may be liable and submit to Lender proof satisfactory to Lender
that such payments and/or deposits have been made.
(g) Timely pay each Unused Line Fee.
(h) Timely pay each Audit Fee.
33
(i) From time to time hereafter, execute and deliver or cause to be
executed and delivered, such additional instruments, certificates and documents,
and take all such actions, as Lender shall reasonably request for the purpose of
implementing or effectuating the provisions of the Loan Documents, and upon the
exercise by Lender of any power, right, privilege or remedy pursuant to the Loan
Documents which requires any consent, approval, registration, qualification or
authorization of any governmental authority or instrumentality, exercise and
deliver all applications, certifications, instruments and other documents and
papers that Lender may be so required to obtain.
(j) Comply strictly and in all respects with the requirements of all
federal, state, and local laws and regulations, including without limitation
those pertaining to employee compensation and safety, environmental matters and
product safety.
(k) Notify the Lender promptly in the event of any spill, hazardous
waste pollution or contamination affecting any Property for which the Borrowers
could have liability in a material amount; forward to the Lender promptly any
notices relating to such matters received from any governmental agency; and pay
promptly when due any material fine or assessment against the Property for which
the Borrowers have liability in a material amount unless the Borrowers are
contesting the same by appropriate legal action for which appropriate reserves
are maintained.
(l) Immediately contain and remove any Hazardous Material in excess of
maximum amounts permitted by applicable law found on any Property for which the
Borrowers could have liability in a material amount, in compliance with
applicable laws and at Borrowers' expense, subject however, to the right of the
Lender, at the Lender's option but at Borrowers' expense, to have an
environmental engineer or other representative review the work being done.
(m) Promptly upon the request of the Lender, based upon the Lender's
reasonable belief that a hazardous waste or other environmental problem (not
previously disclosed in writing to Lender) exists with respect to Property for
which one or more Borrowers could have liability in a material amount, provide
the Lender with an environmental site assessment report or an update of any
existing report, all in scope, form and content and performed by such company as
may be reasonably satisfactory to the Lender, to the extent that the Borrowers
are permitted to do so under the lease under which they are occupying the
applicable Property.
34
(n) Indemnify, defend, and hold the Lender harmless from and against
any claim, cost, damage (including without limitation consequential damages),
expense (including without limitation attorneys' fees and expenses), loss,
liability, or judgment now or hereafter arising as a result of any claim for
environmental cleanup costs, any resulting damage to the environment and any
other environmental claims against Borrowers, the Lender, or any Property (other
than claims, costs or damages directly resulting from actions of Lender or its
agents in managing the Property). The provisions of this ss.6.13(n) shall
continue in effect and shall survive (among other events) any termination of
this Agreement, foreclosure, a deed in lieu transaction, and payment and
satisfaction of the Note and other obligations of Borrowers hereunder.
(o) Maintain keyman insurance on the life of Xxxxxx X. Xxxxx with an
insurer reasonably satisfactory to Lender and with a death benefit equal to not
less than $5,000,000, including any policies already maintained by any Borrower
for the benefit of the Lender pursuant to prior credit arrangements, and upon
request provide Lender with proper evidence thereof.
ss.7. Events of Default; Acceleration. If any of the following events
(each an "Event of Default") shall occur and be continuing:
(a) if a Borrower shall fail to pay any principal of or
interest on any Loan or other Obligation when the same is due, or fail
to pay any other sums due hereunder or under any other Loan Document,
within 10 days after the same shall have become due and payable,
whether on demand, at the stated date of maturity or any accelerated
date of maturity or at any other date fixed for payment;
(b) if a Borrower shall fail to comply with any of its other
covenants contained herein or in any outstanding Letter of Credit or
Bond Letter of Credit or other Loan Document (or applications or
reimbursement agreements related to any Letter of Credit), including
the Bond Reimbursement Agreement, and not remedy such failure within 30
days after notice thereof from the Lender or, if such cure cannot be
completed within said 30 days, within such longer period (not in any
event to exceed 90 days) as reasonably shall be required working
diligently to effect such cure; provided, however, that there shall be
no cure periods for Defaults or Events of Default arising by reason of
breach of ss.ss.6.3 through 6.8, inclusive, 6.12(a), 6.12(e) or 6.13(o)
hereof;
(c) if any representation or warranty made by a Borrower in
this Agreement or in any other Loan Document or
35
information contained in any other document or instrument delivered
pursuant to or in connection with this Agreement shall prove to have
been false in any material respect upon the date when, or when deemed,
made;
(d) if a Borrower or a Subsidiary thereof shall be involved in
financial difficulties as evidenced:
(i) by its commencement of a voluntary case under
Title 11 of the United States Code as from time to time in
effect, or by its authorizing, by appropriate proceedings of
its board of directors or other governing body, the
commencement of such a voluntary case;
(ii) by the entry of an order for relief against it
in any involuntary case commenced under said Title 11 which
remains undischarged or unstayed for more than sixty (60)
days;
(iii) by its seeking relief as a debtor under any
applicable law, other than said Title 11, of any jurisdiction
relating to the liquidation or reorganization of debtors or to
the modification or alteration of the rights of creditors, or
by its consenting to or acquiescing in such relief;
(iv) by entry of an order by a court of competent
jurisdiction (A) finding it to be bankrupt or insolvent or (B)
ordering or approving its liquidation, reorganization or any
modification or alteration of the rights of its creditors
which remains undischarged or unstayed for more than sixty
(60) days;
(v) by the entry of an order by a court of competent
jurisdiction levying or executing upon, assuming custody of,
or appointing a receiver or other custodian for, all or a
substantial part of its property;
(vi) by its making an assignment for the benefit of,
or entering into a composition with, its creditors, or
appointing or consenting to the appointment of a receiver or
other custodian for all or a substantial part of its property;
(e) if there shall remain in force, undischarged, unsatisfied,
unstayed and unbonded, for more than sixty (60) days, any final
judgment against a Borrower or a Subsidiary from which no further
appeal may be taken and which, with any other outstanding final
judgments, undischarged, unsatisfied, unstayed and unbonded, against
one or more such Person(s) exceeds $100,000 in aggregate amount;
36
(f) if a Borrower (other than one which is inactive and owns
no assets) is dissolved;
(g) If AAI or any Subsidiary shall default (after giving
effect to any applicable grace period) in the due and punctual payment
of the principal of or interest on any Indebtedness exceeding in the
aggregate $100,000 (other than the Obligations), or if any default
shall have occurred and be continuing after any applicable grace period
under any mortgage, note or other agreement evidencing, securing or
providing for the creation of such Indebtedness which results in the
acceleration of such Indebtedness or which permits, or with the giving
of notice would permit, any holder or holders of any such Indebtedness
to accelerate the stated maturity thereof;
(h) Loss, theft, damage or destruction of any material portion
of the property of a Borrower for which there is no insurance coverage
or other provision for repair or replacement satisfactory to Lender in
its discretion;
(i) If there shall be an attachment of any deposits or other
property of AAI and/or any Subsidiary in the possession of Lender or an
attachment of any other property of AAI and/or any Subsidiary in excess
of $100,000 in aggregate amount, which shall not be discharged within
thirty (30) days of the date of such attachment;
(j) If a Borrower is enjoined, restrained or in any way
prevented by court order from conducting all or any material part of
its business affairs;
(k) If there shall be a default or event of default in respect
of the Bond Reimbursement Agreement or, as defined therein, any Related
Document; or
(l) If a Borrower shall purport to terminate the revolving
credit facility created under ss.2.1 hereunder prior to the Termination
Date or if later at a time when the Bond Letter of Credit shall remain
outstanding or any Bond Letter of Credit Obligations shall remain
unpaid.
THEN, the Lender may by notice in writing to the Borrowers terminate its
commitments under this Agreement and upon such termination shall have no further
obligation to make Loans to the Borrowers, and may declare all amounts owing
with respect to this Agreement and the Note to be, and they shall thereupon
forthwith
37
mature and become, immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby expressly waived by
the Borrowers. No remedy herein conferred upon the Lender or the holder of any
Note is intended to be exclusive of any other remedy and each and every remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder, in the other Loan Documents or now or hereafter existing at law or in
equity or by statute or any other provision of law. During the continuation of
any Event of Default, all Obligations shall unless otherwise agreed by Lender
bear interest at the Default Rate.
ss.8. Setoff. Regardless of the adequacy of any collateral for the
Obligations, any deposits or other sums credited by or due from the Lender to a
Borrower may be applied to or set off against the payment of the indebtedness
evidenced by any Note or other Loan Document at any time after the occurrence of
any Default or Event of Default. The Lender will give written notice to the
Borrowers promptly after any exercise of its rights under this ss.8.
ss.9. Expenses. Whether or not the transactions contemplated hereby
shall be consummated, the Borrowers will pay the reasonable costs and expenses
(including the reasonable fees, expenses and disbursements of the Lender's
counsel) incurred by Lender in connection with the preparation and (after any
Default or Event of Default hereunder or under any other Loan Document) the
enforcement of this Agreement and all other Loan Documents, and in connection
with any litigation, proceeding or dispute whether arising hereunder or
otherwise, in any way related to the Lender's relationship with the Borrowers
under this Agreement or with respect to the transactions contemplated hereby,
except for any of the foregoing which result from the gross negligence or
willful misconduct of the Lender. In any investigation, proceeding or
litigation, or the preparation therefor, the Lender shall be entitled to select
its own counsel and, in addition to the foregoing indemnity, the Borrowers agree
jointly and severally to pay promptly the reasonable fees and expenses of such
counsel, on a progress basis if so requested. The covenants of this ss.9 shall
survive payment or satisfaction of all amounts owing with respect to the Note
and the other Loan Documents.
ss.10. Survival of Covenants, Etc. All covenants, agreements,
representations and warranties made herein or in any other Loan Document shall
be deemed to have been relied upon by the Lender, notwithstanding any
investigation heretofore or hereafter made by it, and shall survive the making
by the Lender of any Loans as herein contemplated, and shall continue in full
force and effect so long as any amount remains due under this Agreement or any
Note or the Lender has any obligation to make any further Loans.
38
ss.11. Parties in Interest. All the terms of this Agreement and the
other Loan Documents shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the parties hereto and
thereto; provided that no Borrower shall assign or transfer any of its rights
hereunder or under any other Loan Document without the prior written consent of
the Lender. The Borrowers agree that the Lender may disclose information
obtained by the Lender pursuant to this Agreement or other Loan Documents where
required or requested by governmental or regulatory authorities or in connection
with the proposed sale of any interests in the Loans. If at any time or times by
assignment or otherwise Lender transfers or assigns any or all of the
Obligations, Collateral or the rights of Lender under this Agreement with
respect to the Obligations or Collateral, the assignee or transferee shall
become vested with said powers and rights whether or not they are specifically
referred to in the transfer or assignment, subject to any contrary provisions of
such transfer or assignment documents. If and to the extent Lender retains any
Obligations or Collateral after giving effect to any assignment or transfer,
Lender shall continue to have the rights and powers herein set forth with
respect thereto. In the event Lender shall grant a participation interest in any
or all of the Obligations or Collateral, Lender shall continue to have all of
the rights and powers herein set forth with respect thereto.
ss.12. Notices, Etc. Except as otherwise expressly provided in this
Agreement, all notices and other communications made or required to be given
pursuant to this Agreement or the other Loan Documents shall be in writing and
shall be delivered in hand, mailed by United States registered or certified
first-class mail, postage prepaid, return receipt requested, or sent by
telegraph or telex and confirmed by mail, addressed as follows:
(a) if to any Borrower, addressed to it at: Asahi/America,
Inc., 00 Xxxxx Xxxxxx, Xxxxxx, XX 00000, Attn: Treasurer, or at such
other address for notice as either Borrower shall last have furnished
in writing to the Person giving the notice, with a copy to Xxxxxx
Xxxxxxx, Esq., Xxxxxx & Hannah LLP, 000 Xxxxx Xxxxxx, Xxxxxx, XX 00000;
or
(b) if to the Lender, Xxxxxx Xxxxxx, Vice President, Citizens
Bank of Massachusetts, 00 Xxxxx Xxxxxx, Xxxxxx, XX 00000, or such other
address for notice as the Lender shall last have furnished in writing
to the Person giving the notice, with a copy to Xxxx X. Xxxxxxx, Esq.,
Sherin and Lodgen LLP, 000 Xxxxxx Xxxxxx, Xxxxxx, XX 00000.
39
Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (a) if delivered by hand to an officer of the
party to which it is directed, at the time of the receipt thereof by such
officer, or (b) if sent by registered or certified first-class mail, postage
prepaid, or by a nationally recognized overnight express delivery service upon
the date of first attempted delivery, as shown on the return receipt therefor or
the returned item itself
ss.13. Miscellaneous. Except as otherwise provided therein or required
by the laws of any jurisdiction in which any Collateral is located, the Loan
Documents shall each be deemed to be contracts under seal and shall for all
purposes be construed in accordance with and governed by the internal laws of
the Commonwealth of Massachusetts, without reference to principles of conflicts
of law of any jurisdiction. The captions in this Agreement are for convenience
of reference only and shall not define or limit the provisions hereof. This
Agreement, together with the other Loan Documents, expresses the entire
understanding of the parties with respect to the transactions contemplated
hereby and supersedes any prior or contemporaneous agreement or discussions;
provided, however, that nothing herein supersedes or modifies any provision of
the Bond Reimbursement Agreement or, as therein defined, any Related Document,
and the provisions of all such documents (as from time to time expressly amended
and in effect) shall continue to apply to the Borrowers in accordance with their
terms, with the agreement that Lender has succeeded to and now enjoys all rights
previously held by CTC thereunder. Except as otherwise expressly provided in
this Agreement, any consent or approval required or permitted by this Agreement
to be given by the Lender may be given, and any term of this Agreement or of any
other Loan Document may be amended, and the performance or observance by the
Borrowers of any terms of this Agreement or such other Loan Document or the
continuance of any Event of Default may be waived (either generally or in a
particular instance and either retroactively or prospectively) with, but only
with, the written consent of the Lender. No waiver shall extend to or affect any
obligation not expressly waived or impair any right consequent thereon. No
course of dealing or delay or omission on the part of the Lender in exercising
any right shall operate as a waiver prejudicial thereto. No notice to or demand
upon the Borrowers shall entitle the Borrowers to other or further notice or
demand in similar or other circumstances. All obligations of the Borrowers under
this Agreement and in respect of the Note, the Loans and the other Loan
Documents shall be joint and several.
ss.14. Waiver of Jury Trial; Place of Suit. EACH BORROWER HEREBY WAIVES
ANY RIGHT IT MAY HAVE TO TRIAL BY JURY OF ANY CLAIM
40
EVER BROUGHT BY IT AGAINST THE LENDER (INCLUDING ITS OFFICERS, DIRECTORS,
EMPLOYEES OR COUNSEL) RELATED IN ANY WAY TO THIS AGREEMENT, THE LOANS, THE NOTE
OR ANY OTHER LOAN DOCUMENTS. NO PARTY WILL SEEK TO CONSOLIDATE ANY ACTION IN
WHICH A JURY TRIAL HAS BEEN WAIVED, WITH ANY OTHER ACTION IN WHICH A JURY TRIAL
CANNOT BE OR HAS NOT BEEN WAIVED. THE PROVISIONS OF THIS ss.14 HAVE BEEN FULLY
DISCUSSED BY THE PARTIES HERETO AND THESE PROVISIONS SHALL BE SUBJECT TO NO
EXCEPTIONS. NO PARTY HAS IN ANY WAY AGREED WITH OR REPRESENTED TO ANY OTHER
PARTY THAT THE PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL
INSTANCES. ANY COURT PROCEEDINGS RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS (OR
THE FEDERAL COURTS LOCATED THEREIN) AND EACH BORROWER HEREBY AGREES THAT ANY
LEGAL PROCESS ISSUING FROM ANY SUCH COURT SENT TO IT BY MAIL IN ACCORDANCE WITH
ss.12 SHALL BE SUFFICIENT TO SUBJECT IT TO THE PERSONAL JURISDICTION OF SUCH
COURT.
ss.15. Severability. In the event any provision of this Agreement or
any Loan Document shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other term or provision hereof, and such agreement shall be
interpreted and construed as if such provision, to the extent the same shall
have been invalid, illegal or unenforceable, had never been contained herein.
The parties hereto agree that they will negotiate in good faith to replace any
provision so held invalid, illegal or unenforceable with a valid provision which
is as similar as possible in substance to the invalid, illegal or unenforceable
provision.
41
WITNESS: ASAHI/AMERICA, INC.
-------------------------- By:
-----------------------------
Title:
--------------------------
ASAHI ENGINEERED PRODUCTS, INC.
-------------------------- By:
-----------------------------
Title:
--------------------------
QUAIL PIPING PRODUCTS, INC.
-------------------------- By:
-----------------------------
Title:
--------------------------
CITIZENS BANK OF MASSACHUSETTS
By
-----------------------------
Xxxxxx Xxxxxx, Vice President
42
List of Schedules & Exhibits
Exhibit # Description
--------- -----------
2.1(b) Form of Amended and Restated
Revolving Credit Note
Schedule # Description
---------- -----------
1 Method for Determining Appli-
cable LIBOR Increment
2 Method for Determining Unused
Line Fee Multiplier
3.1(b) Permitted Encumbrances
3.1(d) Permitted Quail Encumbrances
3.3(b) List of Borrower Office/Assets
Locations
4.4 List of Financial Statements
Provided to Lender
4.6 List of Encumbrances on Xxxx-
xxxxx' Assets
4.14A Environmental Matters
6.13 (i) existing chief executive
office and chief place of business for each Borrower, (ii) existing location of
the records pertaining to the accounts receivable of each Borrower, (iii)
existing locations of all inventory (including returns of inventory), and (iv)
presently owned patents, trademarks, copyrights or other intellectual property
rights.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
43
Exhibit 2.1(b)
AMENDED AND RESTATED REVOLVING CREDIT NOTE
$11,000,000.00 June 30, 0000
Xxxxxx, Xxxxxxxxxxxxx
This Amended and Restated Revolving Credit Note amends and, as so
amended restates in its entirety, an original Revolving Credit Note of
ASAHI/AMERICA, INC. and ASAHI ENGINEERED PRODUCTS, INC. (collectively, the
"Original Borrowers") dated January 23, 1997 in the original principal amount of
$5,000,000 (the "Original Note").
Pursuant to that certain Amended and Restated Credit and Security
Agreement of even date herewith among the Original Borrowers and others, this
Note is issued in substitution for the Original Note, and constitutes an
amendment and restatement of the Original Note and not a novation. Now,
therefore,
FOR VALUE RECEIVED, the undersigned ASAHI/AMERICA, INC., a
Massachusetts business corporation ("AAI"), ASAHI ENGINEERED PRODUCTS, INC., a
Massachusetts business corporation and wholly-owned subsidiary of AAI ("AEPI"),
and QUAIL PIPING PRODUCTS, INC., a Massachusetts business corporation and
wholly-owned subsidiary of AAI ("Quail") (AAI, AEPI and Quail are hereinafter
referred to collectively as the "Borrowers"), hereby absolutely, unconditionally
and jointly and severally promise to pay to the order of CITIZENS BANK OF
MASSACHUSETTS, a Massachusetts bank, at its principal office at 00 Xxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000 (hereinafter, including any subsequent holder
hereof, the "Lender"):
(a) the principal amount of ELEVEN MILLION DOLLARS
($11,000,000.00) or, if less or more, the aggregate unpaid principal
amount of revolving credit loans advanced by the Lender from time to
time pursuant to ss.2.1 of that certain Amended and Restated Credit and
Security Agreement dated as of the date hereof (the "Credit
Agreement"), among the Borrowers and the Lender; and
(b) any then unpaid interest on the principal balance hereof
from time to time outstanding from the date hereof through and
including the date on which such principal amount is paid in full.
44
Except as otherwise provided below, revolving credit loans outstanding
from time to time shall bear interest from the date such Loans are made until
repaid in full at the rate provided in ss.2.3 of the Credit Agreement. Interest
shall be computed on the basis of a 360-day year for the number of days actually
elapsed.
Interest on the indebtedness evidenced by this Note shall be payable
monthly in arrears on the 1st day of each succeeding month, with a final payment
at the maturity of this Note. The principal amount of the indebtedness evidenced
by this Note shall be due and payable upon the earlier of (i) January 31, 2000,
(ii) the Termination Date or (iii) the occurrence of an Event of Default,
whereupon the entire unpaid principal amount of this Note and all of the unpaid
interest accrued thereon may be declared and thereby become immediately due and
payable. Lender may charge any Borrower's accounts with Lender for all payments
of interest, principal and fees due in respect of this Note, and Lender shall
within two (2) business days thereafter provide the Borrowers with a statement
of such charges. Whenever a payment hereunder becomes due on a day which is not
a Business Day, the due date for such payment shall be extended to the next
succeeding Business Day, and interest shall accrue during such extension.
Overdue principal and (to the extent permitted by applicable law)
interest on the indebtedness evidenced by this Note, and all other overdue
amounts payable hereunder, shall, upon notice to the Borrowers from the Lender,
bear interest at a rate per annum equal to three hundred fifty (350) basis
points above the rate of interest otherwise payable hereunder, compounded daily
and payable on DEMAND, to accrue from the date of such notice until payment
thereof. Payments (other than of principal) made more than ten (10) days after
their due date shall be subject to a 5% late payment penalty in addition to any
interest accrued thereon.
This Note evidences borrowings under, and has been issued by the
Borrowers in accordance with the terms of, the Credit Agreement. The Lender and
any holder hereof is entitled to the benefits of the Credit Agreement and may
enforce the agreements of the Borrowers contained therein (and in any other Loan
Document), and any holder may exercise the respective remedies provided for
therein or otherwise available in respect thereof, all in accordance with the
respective terms thereof. All initially capitalized terms used but not otherwise
defined in this Note shall have the same meanings herein as in the Credit
Agreement.
The Borrowers shall have the right to prepay the whole or any part of
the principal of this Note, upon the terms and subject to the conditions set
forth in ss.2.3 of the Credit Agreement.
45
The Borrower and every endorser and guarantor of this Note or the
obligation represented hereby waive presentment, demand, notice, protest and all
other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Note, assent to any extension or
postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of collateral and to the addition or release
of any other party or person primarily or secondarily liable in respect of this
Note.
The indebtedness evidenced by this Note is commercial in nature and
shall not be used for personal, family, household or agricultural purposes.
This Note shall be deemed to take effect as a sealed instrument under
the internal laws of the Commonwealth of Massachusetts (excluding the conflict
of law rules thereof) and for all purposes shall be construed in accordance with
such laws.
IN WITNESS WHEREOF, ASAHI/AMERICA, INC. ASAHI ENGINEERED PRODUCTS, INC.
and QUAIL PIPING PRODUCTS, INC. has each executed and delivered this Note by its
duly authorized officer as of the day and year first above written.
WITNESS: ASAHI/AMERICA, INC.
By:
-------------------------- -----------------------------
Title:
--------------------------
ASAHI ENGINEERED PRODUCTS, INC.
By:
-------------------------- -----------------------------
Title:
--------------------------
QUAIL PIPING PRODUCTS, INC.
By:
-------------------------- -----------------------------
Title:
--------------------------
46
47
Schedule 1
to Amended and Restated Credit and Security Agreement
-----------------------------------------------------
The Applicable LIBOR Increment shall be determined quarterly, based
upon information contained in the Compliance Certificate concerning the then
immediately preceding fiscal quarter of AAI and its Subsidiaries, and any change
to the Applicable LIBOR Increment shall take effect as of the first day of the
Interest Period during which such adjustment is determined.
The Applicable LIBOR Increment shall be determined as follows:
A. If the Borrowers' ratio of Debt to Tangible Net Worth, as of the end
of the immediately preceding fiscal quarter, is less than or equal to 1.5:1.0,
then the Applicable LIBOR Increment shall be that number appearing below
opposite the Borrowers' Debt Service Coverage ratio as of the immediately
preceding fiscal quarter:
Debt Service Coverage Ratio Applicable LIBOR Increment
--------------------------- --------------------------
3.0 or greater 155 basis points
2.5 to 2.99 165 basis points
2.0 to 2.49 175 basis points
1.5 to 1.99 185 basis points
1.2 to 1.49 195 basis points
B. If the Borrowers' ratio of Debt to Tangible Net Worth, as of the end
of the immediately preceding fiscal quarter, is greater than 1.50 but less than
2.0 to 1.0, then the Applicable LIBOR Increment shall be that number appearing
below opposite the Borrowers' Debt Service Coverage ratio as of the immediately
preceding fiscal quarter:
Debt Service Coverage Ratio Applicable LIBOR Increment
--------------------------- --------------------------
3.0 or greater 165 basis points
2.5 to 2.99 175 basis points
2.0 to 2.49 190 basis points
1.5 to 1.99 200 basis points
1.2 to 1.49 210 basis points
C. If the Borrowers' ratio of Debt to Tangible Net Worth, as of the
end of the immediately preceding fiscal quarter, is 2.0
48
or greater, then the Applicable LIBOR Increment shall be that number appearing
below opposite the Borrowers' Debt Service Coverage ratio as of the immediately
preceding fiscal quarter:
Debt Service Coverage Ratio Applicable LIBOR Increment
--------------------------- --------------------------
3.0 or greater 180 basis points
2.5 to 2.99 190 basis points
2.0 to 2.49 205 basis points
1.5 to 1.99 220 basis points
1.2 to 1.49 230 basis points
49
Schedule 2
to Amended and Restated Credit and Security Agreement
-----------------------------------------------------
The Unused Line Fee Multiplier shall be determined quarterly, based
upon information contained in the Compliance Certificate concerning the then
immediately preceding fiscal quarter of AAI and its Subsidiaries, and any change
to the Unused Line Fee Multiplier shall take effect as of the first day of the
Interest Period during which such adjustment is determined.
The Unused Line Fee Multiplier shall be determined as follows:
A. If the Borrowers' ratio of Debt to Tangible Net Worth, as of the end
of the immediately preceding fiscal quarter, is less than or equal to 1.5:1.0,
then the Unused Line Fee Multiplier shall be that number (expressed in basis
points) appearing below opposite the Borrowers' Debt Service Coverage ratio as
of the immediately preceding fiscal quarter:
Applicable Unused Line
Debt Service Coverage Ratio Fee Multiplier
--------------------------- --------------
3.0 or greater 15 basis points
2.5 to 2.99 15 basis points
2.0 to 2.49 15 basis points
1.5 to 1.99 15 basis points
1.2 to 1.49 15 basis points
B. If the Borrowers' ratio of Debt to Tangible Net Worth, as of the end
of the immediately preceding fiscal quarter, is greater than 1.50 but less than
2.0 to 1.0, then the Unused Line Fee Multiplier shall be that number (expressed
in basis points) appearing below opposite the Borrowers' Debt Service Coverage
ratio as of the immediately preceding fiscal quarter:
Applicable Unused Line
Debt Service Coverage Ratio Fee Multiplier
--------------------------- --------------
3.0 or greater 15 basis points
2.5 to 2.99 15 basis points
2.0 to 2.49 15 basis points
1.5 to 1.99 15 basis points
1.2 to 1.49 25 basis points
C. If the Borrowers' ratio of Debt to Tangible Net Worth, as of the end
of the immediately preceding fiscal quarter, is 2.0
50
or greater, then the Unused Line Fee Multiplier shall be that number (expressed
in basis points) appearing below opposite the orrowers' Debt Service Coverage
ratio as of the immediately preceding fiscal quarter:
Applicable Unused Line
Debt Service Coverage Ratio Fee Multiplier
--------------------------- --------------
3.0 or greater 15 basis points
2.5 to 2.99 15 basis points
2.0 to 2.49 15 basis points
1.5 to 1.99 25 basis points
1.2 to 1.49 25 basis points
51
Schedule 3.1(b)
Permitted Encumbrances
----------------------
1. Existing encumbrances disclosed on Schedule 4.6 hereto
52
Schedule 3.1(d)
Permitted Quail Encumbrances
----------------------------
1. Existing encumbrances disclosed on Schedule 4.6 hereto
53
Schedule 3.3(b)
Borrower/Asset Locations
1. Office and asset locations listed in Schedule 4.6B to the Original
Credit Agreement, which Schedule is incorporated herein by reference, deleting
therefrom (a) Lake Forest, CA and (b) Tamworth, NH locations.
Borrowers file informational UCC-1 financing statements to protect
assets located at third party locations, including customers and/or vendors.
2. 0000 Xxxxx Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx
54
Schedule 4.4
Financial Statements Provided to Lender
---------------------------------------
All consolidated financial statements included as exhibits to the
Annual and Quarterly Reports of Asahi America, Inc. filed on Forms 10-K and 10-Q
to and including June 30, 1998.
55
Schedule 4.6
Encumbrances on Assets of Borrowers
-----------------------------------
1. Asahi America, Inc.
a. Mortgage on 00 Xxxxx Xxxxxx, in favor of Citizens Trust Company
(securing Bond Letter of Credit Obligations)
b. Liens granted to Citizens Bank of Massachusetts
c. Personal Property Security Interests, as listed in Schedule 4.6A
to the Original Credit Agreement, which Schedule is incorporated
herein by reference
d. Jules & Associates, Inc. (assignee of NBD Equipment Finance,
Inc.)
2. Asahi Engineered Products, Inc.
a. Liens granted to Citizens Bank of Massachusetts
3. Quail Piping Products, Inc.
a. GE Capital Public Finance, Inc. (liens on Equipment, as
described in Exhibit A to 11/1/97 Equipment Loan Agreement,
securing debt arising thereunder)
56
Schedule 4.14A
Environmental Matters
---------------------
Matters listed in Schedule 4.14A to the Original Credit Agreement,
which Schedule is incorporated herein by reference
57
Schedule 6.13
Miscellaneous Information
-------------------------
(i) AAI, AEP & Quail: 00 Xxxxx Xxxxxx, Xxxxxx, XX 00000;
(ii) 00 Xxxxx Xxxxxx, Xxxxxx, XX 00000;
(iii) See Schedule 3.3(b), incorporated herein by reference;
(iv) NONE.
58
