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AXSYS TECHNOLOGIES INC | FLEET NATIONAL BANK. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
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Exhibit 10.1
CREDIT AGREEMENT
dated April 8, 2004
among
AXSYS TECHNOLOGIES, INC., as Borrower,
THE SUBSIDIARY GUARANTORS PARTY HERETO as Subsidiary Guarantors,
and
FLEET NATIONAL BANK
TABLE OF CONTENTS
i
ii
List of Schedules and Exhibits
iii
CREDIT AGREEMENT
Credit Agreement dated and effective as of April 8, 2004 among AXSYS TECHNOLOGIES, INC. , a Delaware corporation with its chief executive office and principal place of business located at 175 Capital Boulevard, Suite 103, Rocky Hill, Connecticut 06067 (the “ Borrower ”), the Subsidiary Guarantors (such term and each other capitalized term used by not defined herein having the meaning given to it in Article I) and FLEET NATIONAL BANK , a national banking institution having an office at 777 Main Street, Hartford, Connecticut 06115 (the “ Bank ”).
PREAMBLE
WHEREAS, Borrower, Bifocal Acquisition Corp., a Massachusetts corporation and wholly-owned Subsidiary of Borrower (“ BAC ”), Telic Optics, Inc., a Massachusetts corporation (“ Telic ”), and the shareholders of Telic named therein have entered into an Agreement and Plan of Merger, dated as of April 5, 2004 (as amended, supplemented or otherwise modified from time to time, the “ Merger Agreement ”) pursuant to which BAC will be merged with and into Telic (the “ Merger ”), with Telic being the survivor of such Merger and a wholly-owned subsidiary of Borrower; and
WHEREAS, Borrower has requested Bank, and Bank has agreed, to (a) extend to Borrower a term loan in the principal amount of $5,000,000, the proceeds of which are to be used to finance of portion of the merger consideration under the Merger Agreement; and (b) extend to Borrower a revolving loan in the principal amount of up to $5,000,000, the proceeds of which are to be used by Borrower for working capital and general corporate purposes, including, but not limited to, the acquisition of Capital Assets.
NOW, THEREFORE, for the mutual considerations contained in this Agreement, Borrower, each Subsidiary Guarantor and Bank agree as follows:
ARTICLE
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Level |
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Consolidated Funded |
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Applicable Margin for LIBOR Loans |
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1 |
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< 1.25x |
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1.00% |
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2 |
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> 1.25x, but < 1.75x |
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1.25% |
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3 |
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> 1.75x |
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1.50% |
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By way of illustration, if Borrower’s Consolidated Funded Debt-to-EBITDA Ratio as of the last day of Borrower’s second fiscal quarter is 1.2 to 1.0, then, effective on the first day of the first fiscal quarter immediately following the date upon which Borrower’s quarterly Covenant Compliance Certificate and quarterly financial statements for its second fiscal quarter are received by Bank the Applicable Margin for all LIBOR Loans shall be adjusted (if not then the same) to 1.00%.
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“Applicable Unused Line Fee Percentage” shall mean, with respect to the calculation of the Unused Line Fees due to the Bank pursuant to Section 3.6 hereof:
(a) for the period commencing on the date hereof and ending on the day immediately preceding the Initial Adjustment Date, 0.20%; and
(b) for each period commencing on an Adjustment Date (including, but not limited to, the Initial Adjustment Date) and ending on the day immediately preceding the next Adjustment Date, the percentage set forth below opposite Borrower’s applicable financial performance level as measured by Borrower’s Consolidated Funded Debt-to-EBITDA Ratio for the then ended Rolling Period (as determined on the basis of the financial statements required to be delivered in respect of such Adjustment Date):
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Level |
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Consolidated Funded |
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Applicable Unused Line Fee Percentage |
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1 |
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< 1.25x |
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0.20% |
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2 |
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> 1.25x, but < 1.75x |
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0.30% |
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3 |
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> 1.75x |
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0.40% |
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By way of illustration, if Borrower’s Consolidated Funded Debt-to-EBITDA Ratio as of the last day of Borrower’s second fiscal quarter is 1.2 to 1.0, then, effective on the first day of the first fiscal quarter immediately following the date upon which Borrower’s quarterly Covenant Compliance Certificate and quarterly financial statements for its second fiscal quarter are received by Bank, the Applicable Unused Line Fee Percentage shall be adjusted (if not then the same) to 0.20%.
“Assignee” shall mean that term as defined in Section 12.8(a) hereof.
“Available Amount” shall mean with respect to any Letter of Credit, at any time, the maximum amount available to be drawn under such Letter of Credit at such time (assuming compliance at such time with all conditions of drawing).
“BAC” shall mean Bifocal Acquisition Corp., a Massachusetts corporation and wholly-owned Subsidiary of Borrower.
“Bank” shall mean Fleet National Bank, together with its successors and assigns.
“Bank Swap Agreement” shall mean the Swap Agreement entered into between Borrower and Bank on or about the date hereof and all Confirmations relating thereto including, without limitation the Confirmation relating to the Term Loan.
“Borrower” shall mean Axsys Technologies, Inc., a Delaware corporation.
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“Business Day” shall mean any day other than a Saturday, Sunday, or other day on which banks in the State of Connecticut or Commonwealth of Massachusetts are required or authorized by law to be closed; provided, however , that when used in connection with a LIBOR Loan, the term “ Business Day ” shall also exclude any day on which banks are not open for business in London and any day on which dealings in Dollar deposits are not carried on in the London interbank market.
“Capital Assets” shall mean assets that are depreciated or amortized on Borrower’s Consolidated balance sheet in accordance with GAAP.
“Capital Expenditures” shall mean, for any period, the aggregate of all expenditures (whether paid in cash or other consideration or accrued as a liability) of Borrower and its Subsidiaries during such period that, in accordance with GAAP, are or should be included in “additions to property, plant and equipment” or similar items reflected in the consolidated balance sheet of Borrower and its Subsidiaries for such period (including the amount of assets leased in connection with any Capital Lease); provided, however , that Capital Expenditures shall not include Capital Expenditures relating to the James Webb Space Telescope to the extent such Capital Expenditures are actually funded by a Governmental Authority or a prime contractor of a Governmental Authority.
“Capital Leases” shall mean capital leases, conditional sales contracts and other title retention agreements relating to the purchase or acquisition of assets that in accordance with GAAP are required or permitted to be depreciated or amortized on the consolidated balance sheet of Borrower and its Subsidiaries.
“Code” shall mean that term as defined in Section 5.1(n)(i) hereto.
“Commitment Fee” shall mean that term as defined in Section 3.7 hereof.
“Companies” shall mean that term as defined in Section 5.1(n)(i) hereof.
“Consolidated Amortization Expense” shall mean, for any period, the amortization expense of Borrower and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.
“Consolidated Current Maturity of Long-Term Debt” shall mean the aggregate of all Indebtedness for borrowed money (including outstanding Indebtedness under the Loans), Indebtedness under Capital Leases and contingent Indebtedness under undrawn letters of credit of Borrower and its Subsidiaries paid or payable during the applicable period.
“Consolidated Depreciation Expense” shall mean, for any period, the depreciation expense of Borrower and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.
“Consolidated EBIT” shall mean, for any period, Consolidated Net Income for such period, adjusted by adding thereto, in each case only to the extent (and in the same
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proportion) deducted in determining such Consolidated Net Income (and with respect to the portion of Consolidated Net Income attributable to any Subsidiary of Borrower only if a corresponding amount would be permitted at the date of determination to be distributed to Borrower by such Subsidiary without prior approval (that has not been obtained), pursuant to the terms of its charter documents and all agreements, instruments, judgments, decrees, orders, statutes, rules, regulations and other restrictions applicable to such Subsidiary or its equityholders):
(a) Consolidated Interest Expense for such period, and
(b) Consolidated Tax Expense for such period;
provided, however, that Consolidated EBIT shall be calculated on a Pro Forma Basis to give effect to the Merger, any Permitted Acquisition and any asset sales (other than dispositions in the ordinary course of business) consummated at any time on or after the first day of the relevant quarterly testing period thereof as if the Merger or Permitted Acquisition had been effected on the first day of such period and as if each such asset sale had been consummated on the day prior to the first day of such period.
“Consolidated EBITDA” shall mean, for any period, Consolidated Net Income for such period, adjusted by adding thereto, in each case only to the extent (and in the same proportion) deducted in determining such Consolidated Net Income (and with respect to the portion of Consolidated Net Income attributable to any Subsidiary of Borrower only if a corresponding amount would be permitted at the date of determination to be distributed to Borrower by such Subsidiary without prior approval (that has not been obtained), pursuant to the terms of its charter documents and all agreements, instruments, judgments, decrees, orders, statutes, rules, regulations and other restrictions applicable to such Subsidiary or its equityholders):
(a) Consolidated Interest Expense for such period,
(b) Consolidated Amortization Expense for such period,
(c) Consolidated Depreciation Expense for such period, and
(d) Consolidated Tax Expense for such period;
provided, however, that Consolidated EBITDA shall be calculated on a Pro Forma Basis to give effect to the Merger, any Permitted Acquisition and any asset sales (other than dispositions in the ordinary course of business) consummated at any time on or after the first day of the relevant quarterly testing period or Rolling Period thereof, as the case may be, as if the Merger or Permitted Acquisition had been effected on the first day of such period and as if each such asset sale had been consummated on the day prior to the first day of such period.
“Consolidated Fixed Charge Coverage Ratio” shall mean, for any period, the ratio of (a) (i) Consolidated EBITDA for such period, less (ii) all cash payments in respect of income
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taxes made during such period by Borrower and its Subsidiaries (net of any cash refund in respect of income taxes actually received during such period), less (iii) thirty percent (30%) of all Capital Expenditures made during such period by Borrower and its Subsidiaries, less (iv) all dividend payments made during such period by Borrower or any of its Subsidiaries (other than dividend payments to Borrower or any of its Subsidiaries), to (b) the sum of (i) Consolidated Current Maturity of Long-Term Debt for such period, plus (ii) Consolidated Interest Expense for such period.
“Consolidated Funded Debt-to-Consolidated EBITDA Ratio” shall mean, for any Rolling Period, the ratio of (a) the aggregate of all Indebtedness for borrowed money (including outstanding Indebtedness under the Loans), Indebtedness under Capital Leases and contingent Indebtedness under undrawn letters of credit of Borrower and its Subsidiaries, in each case as of the last day of such Rolling Period, to (b) Consolidated EBITDA for such Rolling Period.
“Consolidated Interest Coverage Ratio” shall mean, for any period, the ratio of (a) Consolidated EBIT for such period, to (b) Consolidated Interest Expense for such period.
“Consolidated Interest Expense” shall mean, for any period, the total consolidated interest expense in respect of all Indebtedness for borrowed money (including outstanding Indebtedness under the Loans), Indebtedness under Capital Leases and contingent Indebtedness under undrawn letters of credit of Borrower and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.
“Consolidated Net Income” shall mean, for any period, the consolidated net income (or loss) for such period of Borrower and its Subsidiaries determined on a consolidated basis in accordance with GAAP, provided, however, that there shall be excluded from such net income (to the extent otherwise included therein), without duplication:
(a) the net income (or loss) of any person (other than a Subsidiary of Borrower) in which any person other than Borrower and its Subsidiaries has an ownership interest, except to the extent that cash in an amount equal to any such income has actually been received by Borrower or (subject to clause (b) below) any of its Subsidiaries during such period;
(b) the net income of any Subsidiary of Borrower during such period to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary of that income is not permitted by operation of the terms of its charter documents or any agreement, instrument, judgment, decree, order, statute, rule, regulation or other restriction applicable to that Subsidiary during such period, except that Borrower’s equity in net loss of any such Subsidiary for such period shall be included in determining Consolidated Net Income;
(c) any gain (or loss), together with any related provisions for taxes on any such gain (or the tax effect of any such loss), realized during such period by Borrower or any of its Subsidiaries upon any asset sale (other than any dispositions in the ordinary course of business) by Borrower or any of its Subsidiaries;
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(d) gains and losses due solely to fluctuations in currency values and the related tax effects according to GAAP for such period;
(e) earnings resulting from any reappraisal, revaluation or write-up of assets;
(f) unrealized gains and losses for such period with respect to obligations under or with respect to any swap, cap, collar, forward purchase or similar agreements or arrangements dealing with interest rates, currency exchange rates or commodity prices, either generally or under specific contingencies; and
(g) any extraordinary gain (or extraordinary loss), together with any related provision for taxes on any such gain (or the tax effect of any such loss), recorded or recognized by Borrower or any of its Subsidiaries during such period.
“Consolidated Tax Expense” shall mean, for any period, the tax expense of Borrower and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.
“Contaminant” means any pollutants, hazardous or toxic substances or wastes or contaminated materials which are or may be subject to regulation under, or the Release of which or exposure to which is prohibited, limited or regulated under, any Environmental Law.
“Control” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise, and the terms “Controlling” and “Controlled” shall have the meanings correlative thereto.
“Covenant Compliance Certificate” shall have the meaning assigned in Section 7.1(a) hereof.
“Defaulting Event” shall mean the occurrence of an Event of Default or the occurrence of any condition or event which but for the giving of notice or passage of time or both would constitute an Event of Default.
“Distributions” shall mean, for any period of measurement with respect to Borrower and each Subsidiary, the following: (a) the declaration or payment of any dividend or distribution on or in respect of the shares of any class of capital stock of Borrower or each such Subsidiary, except dividends payable solely in shares of such corporation’s capital stock; and (b) any dividend or distribution for any purpose from such corporation (however characterized), including without limitation, inter-company loans and guarantees, to or for the benefit of any or all of its shareholders, whether paid on or in respect of shares of any class of the capital stock of such corporation or otherwise.
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“Dollar” and the sign “$” shall mean lawful money of the United States of America.
“Environment” shall mean ambient air, surface water and groundwater (including potable water, navigable water and wetlands), the land surface or subsurface strata, the workplace or as otherwise defined in any Environmental Law.
“Environmental Claim” means any notice of violation, claim, demand, order, directive having the force of law, cost recovery action or other cause of action by, or on behalf of, the U.S. Environmental Protection Agency, any other Governmental Authority or any other Person, for damages, injunctive or equitable relief, personal injury (including sickness, disease or death), Remedial Action costs, tangible property damage, natural resource damages, nuisance, pollution, any material adverse effect on the Environment caused by any Contaminant, or for fines, penalties or restrictions, resulting from or based upon (a) the existence, or the continuance of the existence, of a Release (including sudden or non-sudden, accidental or non-accidental Releases) or threatened Release, (b) exposure to any Contaminant, (c) the presence, use, handling, transportation, storage, treatment, or disposal of any Contaminant, or (d) the violation of any Environmental Law.
“Environmental Laws” shall mean any and all applicable present and future treaties, laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the Environment, preservation or reclamation of natural resources, the management, use, treatment, storage, disposal, transportation, transfer, generation, processing, production, refining, control, handling, Release or threatened Release of any Contaminant or to health and safety matters (including without limitation the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §9601 et seq . (collectively, “ CERCLA ”); the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976 and the Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §6901 et seq .; the Federal Water Pollution Control Act, as amended by the Clean Water Act of 1977, 33 U.S.C. §1251 et seq .; the Clean Air Act of 1970, as amended, 42 U.S.C. §7401 et seq .; The Toxic Substances Control Act of 1976, as amended, 15 USC §2601 et seq .; the Emergency Planning and Community Right-to-Know Act of 1986 (also known as SARA Title III), as amended, 42 USC § 11001 et seq .; the Safe Drinking Water Act of 1974, as amended, 42 USC §300(f) et seq .; the Federal Insecticide, Fungicide and Rodenticide Act, as amended, 7 USC §136 et seq .; the Occupational Safety and Health Act of 1970, as amended, 29 USC §651 et seq .; the Endangered Species Act, as amended, 16 USC §1531 et seq .; the National Environmental Policy Act, as amended, 42 USC §4321 et seq .; the Rivers and Harbors Act of 1899 33 USC §401 et seq ., and any similar or implementing state or local law, rule or regulation); all laws, rules and regulations governing underground or above-ground storage tanks, conditioning transfer of property upon a form of negative declaration or other approval of a Governmental Authority of the environmental condition of a property or requiring the disclosure of conditions relating to Contaminants in connection with transfer of title to or interest in property; conditions or requirements imposed in connection with any permits; government orders and demands and judicial orders pursuant to any of the foregoing; any and all other laws, rules and regulations of
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any Governmental Authority relating to the protection of human health or the Environment from Contaminants; and all amendments or regulations promulgated under any of the foregoing.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974 and all rules and regulations promulgated pursuant thereto, as the same may from time to time be supplemented or amended.
“Event of Default” shall have the meaning assigned in Section 8.1 hereof.
“Facility” shall mean the Revolving Loan facility being extended to Borrower pursuant to this Agreement.
“Financing Agreements” shall mean this Agreement, the Notes, the Guaranty Agreement, the Reimbursement Agreements, the Joinder Agreements, the Bank Swap Agreement, any and all other instruments, agreements and documents now or hereafter executed by Borrower and/or any Subsidiary in connection herewith or therewith or related hereto or thereto, and all amendments, supplements and modifications hereto or thereto (excluding the Merger Documents).
“GAAP” shall mean in general, generally accepted accounting principles which are (a) consistent with the principles promulgated or adopted by the Financial Accounting Standards Board and its predecessors, consistently applied from year to year, (b) generally accepted in the United States of America, and (c) such that certified public accountants would, insofar as the use of accounting principles is pertinent, be in a position to deliver an unqualified opinion as to financial statements in which such principles have been properly applied.
“Governmental Authority” shall mean any government, any state or other political subdivision thereof, and any entity exercising executive, legislative, judicial, regulatory, or administrative functions of or pertaining to government.
“Guaranty Agreement” shall mean each guaranty agreement executed by a Subsidiary Guarantor in favor of Bank substantially in the form of Exhibit C attached hereto.
“Head Office” shall mean the office of Bank at 777 Main Street, Hartford, Connecticut, or such other place as Bank may designate to Borrower in writing.
“Indebtedness” shall mean with respect to any Person, without duplication: (a) all indebtedness or liability of such Person for borrowed money, or with respect to deposits or advances of any kind; (b) all obligations of such Person evidenced by notes, bonds, debentures or similar instruments; (c) all obligations of such Person under conditional sale or other title retention agreements relating to property or assets purchased by such Person; (d) all obligations of such Person issued or assumed as the deferred purchase price of property or services (excluding trade obligations and accrued obligations incurred in the ordinary course of business not overdue by more than ninety (90) days); (e) all indebtedness or liability of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the
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obligations secured thereby have been assumed; (f) all obligations of such Person under Capital Leases; (g) all net obligations of such Person in respect of interest rate protection agreements, foreign currency exchange agreements or other interest or exchange rate hedging arrangements; (h) current liabilities of such Person in respect of any Plan; (i) obligations of such Person under letters of credit, bankers acceptances or comparable arrangements; (j) all obligations of such Person under guaranties, endorsements (other than for collection or deposit in the ordinary course of business), and other contingent obligations of such Person to purchase, to provide funds for payment, to supply funds to invest in any Person, or otherwise to assure a creditor against loss; and (k) all other indebtedness of such Person that in accordance with GAAP is classified as liabilities upon the balance sheet of such Person or to which reference is made by footnotes thereto. The Indebtedness of any Person (x) shall include the Indebtedness of any partnership in which such Person is a general partner, and (y) in the case of any limited recourse liability, shall not exceed the amount of such recourse.
“Initial Adjustment Date” means the first day of the first fiscal quarter of Borrower following Bank’s receipt of a Covenant Compliance Certificate and Borrower’s quarterly consolidated and consolidating financial statements for the fiscal quarter ended on April 3, 2004.
“Interest Period” shall mean
(a) for each Revolving Loan or any portion or portions thereof which Borrower elects to be or continue to be a LIBOR Loan, an available period of one (1) month commencing on the date upon which such Loan is made as a LIBOR Loan, continued as a LIBOR Loan or converted from a Prime Rate Loan to a LIBOR Loan and ending on the last Business Day of any such Interest Period;
(b) for the Term Loan, successive available periods of one (1) month, the first of which shall commence on the date hereof and each successive period to commence on the first day immediately following the last day of the immediately preceding Interest Period, with the last such Interest Period ending on the Maturity Date of the Term Loan;
provided, however , that the foregoing provisions relating to Interest Periods are subject to the following:
(i) whenever the last day of any Interest Period would otherwise occur on a day other than a Business Day, such Interest Period shall be extended to occur on the next succeeding Business Day, provided, however, that if such extension would cause the last day of such Interest Period to occur in the next following calendar month, the last day of such Interest Period shall occur on the next 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
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in the last calendar month of such Interest Period) shall end on the last Business Day of a calendar month;
(iii) with respect to each Revolving Loan, no Interest Period shall end after the Termination Date; and
(iv) with respect to the Term Loan, no Interest Period shall end after (1) the next regularly-scheduled Principal Repayment Date, and (2) the Maturity Date for the Term Loan.
“Joinder Agreement” shall mean a joinder agreement, substantially in the form of Exhibit C .
“Lender Parties” shall mean that term as defined in Section 12.1(a).
“L/C Disbursement” shall mean a payment or disbursement made by the Bank pursuant to a Letter of Credit.
“Letter of Credit” shall mean each standby commercial letter of credit issued by Bank pursuant to Section 2.1(c) hereof for the account of the Borrower or any Subsidiary Guarantor.
“Letter of Credit Commitment Amount” shall mean ONE MILLION AND NO/100 DOLLARS ($1,000,000).
“Letter of Credit Fees” shall mean that term as defined in Section 3.8 hereof.
“LIBOR Base Rate” means, as applicable to each LIBOR Loan, the rate per annum as determined on the basis of the offered rates for deposits in Dollars, for a period of time comparable to the Interest Period applicable to such LIBOR Loan, which appears on the Telerate page 3750 as of 11:00 a.m. London time on the day that is two (2) Business Days prior to the first day of such Interest Period; provided, however, if the rate described above does not appear on the Telerate System on any applicable interest determination date, the LIBOR Base Rate shall be the rate (rounded upwards, if necessary, to the nearest one hundred-thousandth of a percentage point) determined on the basis of the offered rates for deposits in Dollars for a period of time comparable to the Interest Period applicable to such LIBOR Loan which are offered by four (4) major banks in the London interbank market at approximately 11:00 a.m. London time on the day that is two (2) Business Days prior to the first day of such Interest Period as selected by the Bank. The principal London office of each of the four major London banks will be requested to provide a quotation of its Dollar deposit offered rate. If at least two (2) such quotations are provided, the rate for that date will be the arithmetic mean of the quotations. If fewer than two (2) quotations are provided as requested, the rate for that date will be determined on the basis of the rates quoted for loans in Dollars to leading European banks for a period of time comparable to the Interest Period applicable to such LIBOR Loan offered by major banks in New York City at approximately 11:00 a.m. New York City time, on the day that is two (2) Business Days prior to the first day of the Interest Period. In the event that the Bank is unable to obtain any such quotation as provided above, it will be deemed that a LIBOR Loan is unavailable and,
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accordingly, such LIBOR Loan shall immediately and automatically convert, without notice, to a Prime Rate Loan.
“LIBOR Loan” means the Term Loan and each Revolving Loan at such time as the same bears interest at a rate determined with reference to the LIBOR Rate.
“LIBOR Rate” means, for each LIBOR Loan for each Interest Period, an interest rate per annum determined pursuant to the following formula, as adjusted from time to time in accordance with the applicable provisions of this Agreement:
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LIBOR Rate = |
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LIBOR Base Rate |
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1 - Reserve Percentage |
“Lien” shall mean any mortgage, pledge, hypothecation, assignment, security interest, lien or encumbrance, priority or other security agreement or arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any lease (other than an operating lease) having substantially the same economic effect as a conditional sale or other title retention agreement, and the filing of, or agreement to give, any financing statement or other document under the Uniform Commercial Code or comparable law of any jurisdiction).
“Loan” shall mean any Revolving Loan or the Term Loan.
“Material Adverse Effect” shall mean (a) a material adverse effect on the business, property, results of operations or condition (financial or otherwise), or material agreements of Borrower or of its Subsidiaries taken as a whole, (b) material impairment of the validity or enforceability of this Agreement or any other Financing Agreement, (c) material impairment of the rights of or benefits or remedies available to Bank under any Financing Agreement, or (d) material impairment of the ability of Borrower or of its Subsidiaries taken as a whole to fully and timely perform any of their material obligations under any Financing Agreement to which it is or is to be a party.
“Maturity Date” shall mean April 8, 2009.
“Merger” shall have the meaning assigned to such term in the first recital hereto.
“Merger Agreement” shall have the meaning assigned to such term in the first recital hereto.
“Merger Documents” shall mean the collective reference to the Merger Agreement and the other documents executed and delivered in connection therewith.
“Note” shall mean the Revolving Loan Note or the Term Loan Note.
“Notice of Borrowing” shall have the meaning assigned in Section 2.2(a) hereof.
“Notice of Issuance” shall have the meaning assigned in Section 2.3(a) hereof.
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“Obligations” shall mean and include all loans, advances, interest, Indebtedness, liabilities, obligations, guaranties, covenants and duties at any time owing by any of the Obligors to Bank of every kind and description, whether or not evidenced by any note or other instrument, whether or not for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, including, but not limited to, the Loans, and all other Indebtedness, liabilities and obligations arising under this Agreement and the other Financing Agreements, including, without limitation, all Indebtedness, liabilities and obligations of any of the Obligors arising under any Reimbursement Agreement and the Bank Swap Agreement, and all reasonable out-of-pocket costs, expenses, fees, charges and attorneys’, paralegals’ and professional fees incurred in connection with any of the foregoing, or in any way connected with, involving or relating to the preservation, enforcement, protection or defense of, or realization under this Agreement, any of the Notes, the Guaranty Agreements, the Reimbursement Agreements, any of the other Financing Agreements, any related agreement, document or instrument, and the rights and remedies hereunder or thereunder, including without limitation, all reasonable costs, expenses and fees incurred in connection with any “workout” or default resolution negotiations involving legal counsel or other professionals and further in connection with any re-negotiation or restructuring of the Indebtedness evidenced by this Agreement, any Note, any Guaranty Agreement, any Reimbursement Agreement and/or any of the other Financing Agreements.
“Obligors” shall mean Borrower and each of the Subsidiary Guarantors.
“Participant” shall mean that term as defined in Section 12.8(b) hereof.
“PBGC” shall mean that term as defined in Section 5.1(n)(i) hereof.
“Permitted Acquisition” shall mean an Acquisition in respect of which (a) in the case of each Acquisition of capital stock, such Acquisition was not preceded by an unsolicited tender offer for such capital stock by Borrower or any of its Affiliates, and (b) Borrower shall have delivered to Bank (i) a pro forma consolidated financial statement in form, scope and substance satisfactory to Bank, in its sole but reasonable discretion, reflecting the full financial effects of such Acquisition and the projected financial effects of such Acquisition over Borrower’s immediately succeeding period including at least the next two (2) fiscal year ends of Borrower (or the remaining term of this Agreement, if shorter) and indicating, after giving effect to such Acquisition (which shall include the past twelve month operating performance of such acquired Person or business), Borrower’s continued compliance with the Financial Covenants set forth in Article VII C. hereof, and (ii) a certificate certifying that at the time of and immediately after giving effect to such Acquisition, no Default or Event of Default shall have occurred and be continuing.
“Permitted Liens” shall mean (a) Liens for taxes which are not yet due and payable or which are being contested in good faith provided that such contest stays any enforcement proceeding, (b) materialmen’s, mechanics’, repairmen’s and other like Liens arising in the ordinary course of business securing obligations which are not more than ninety (90) days overdue or which are being contested in good faith or bonded to the reasonable satisfaction of
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Bank, (c) Liens imposed by law in connection with workers’ compensation, unemployment insurance, social security or similar legislation which are not more than ninety (90) days overdue or which are being contested in good faith, (d) Liens set forth on Schedule 5.1(j) attached hereto, (e) purchase money Liens on assets (including, but not limited to, in connection with Capital Leases) so long as (i) each such Lien attaches concurrently or within thirty (30) days after the acquisition of the assets so acquired, (ii) each such Lien shall attach only to the assets so acquired, and (iii) each such Lien secures Indebtedness permitted under Section 7.19 hereof; and (f) Liens in favor of the Bank.
“Person” means any natural person, sole proprietorship, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, organization, joint venture, institution, governmental authority, or other entity of any nature whatsoever.
“Plan” shall mean any employee benefit plan that is covered by Title I of ERISA sponsored or maintained by any Obligor or any Person affiliated with any Obligor.
“Precision” shall mean Precision Aerotech, Inc., a Delaware corporation.
“Premises” shall mean any real property now or hereafter owned, leased or used by any Obligor.
“Prime Rate” shall mean the variable per annum rate of interest so designated from time to time by Bank as its prime rate. The Prime Rate is a reference rate and does not necessarily represent Bank’s lowest or best rate being charged to any customer.
“Prime Rate Loan” shall mean any Loan or a portion or portions thereof which bears interest at or with reference to, as the case may be, the Prime Rate.
“Principal Repayment Date” shall mean with respect to the Term Loan, each date set forth on the amortization schedule attached to the Term Loan Note.
“Pro Forma Basis” shall mean on a basis in accordance with GAAP and otherwise reasonably satisfactory to Bank.
“Reimbursement Agreement” shall mean that term as defined in Section 2.3(a) hereof.
“Related Business” shall mean any business of Borrower and its Subsidiaries as conducted on the date hereof and any business related, ancillary or complementary thereto.
“Release” shall mean any spilling, leaking, migrating, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing, depositing, dispersing, emanating or migrating of any Contaminant in, into, onto or through the Environment.
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“Remedial Action” means (a) “remedial action” as such term is defined in CERCLA, 42 U.S.C. 9601(24), and (b) all other actions required by any Governmental Authority or voluntarily undertaken to (i) clean up, remove, treat, abate or in any way address any Contaminant in the Environment, (ii) prevent the Release or threat of Release, or minimize the further Release of any Contaminant so it does not migrate or endanger or threaten to endanger public health, welfare or the Environment, or (iii) perform studies and investigations in connection with, or as a precondition to, (i) or (ii) above.
“Reserve Percentage” shall mean, for any Interest Period for all LIBOR Loans, the maximum aggregate reserve requirement (including all basic, supplemental, marginal and other reserves) which is imposed on member banks of the Federal Reserve System against “Euro-currency Liabilities” as defined in Regulation D. As of the date hereof, the Reserve Percentage imposed on Bank is zero.
“Revolving Loan” shall have the meaning assigned in Section 2.1(a) hereof.
“Revolving Loan Account” shall have the meaning assigned in Section 2.2(b) hereof.
“Revolving Loan Commitment Amount” shall mean FIVE MILLION AND NO/100 DOLLARS ($5,000,000).
“Revolving Loan Note” shall mean the revolving loan promissory note of Borrower payable to the order of Bank dated as of the date hereof, in the form of Exhibit A attached hereto, evidencing the Obligations arising under the Revolving Loans, and any and all substitutions and replacements thereof, all as the same may be amended, restated, supplemented and/or modified from time to time.
“Rolling Period” shall mean, with respect to any fiscal quarter of Borrower, such fiscal quarter and the three consecutive fiscal quarters immediately prior thereto.
“Solvent” shall mean as to Borrower and each Subsidiary, that Borrower and each Subsidiary (a) has capital sufficient to carry on its business and transactions and all business and transactions in which it is about to engage; (b) is able to pay its debts as they mature; and (c) owns property whose fair salable value is greater than the amount required to pay its debts.
“Speedring” shall mean Speedring, Inc., Delaware corporation.
“Speedring Systems” shall mean Speedring Systems, Inc., a Delaware corporation.
“Subsidiary” shall mean any corporation, partnership, association or other business entity (a) of which securities or other ownership interests representing more than fifty percent (50%) of the equity or more than fifty percent (50%) of the ordinary voting power or more than fifty percent (50%) of the general partnership interests are, at the time any determination is being made, owned, Controlled, or held, or (b) that is, at the time any
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determination is made, otherwise Controlled, by Borrower or one or more Subsidiaries of Borrower or by Borrower and one or more Subsidiaries of Borrower, including without limitation, the Subsidiary Guarantors, each of which is a Subsidiary of Borrower.
“Subsidiary Guarantors” shall mean Speedring Systems, Speedring, Precision, BAC and each other direct or indirect Subsidiary of Borrower that becomes a party to this Agreement and the Guaranty Agreement pursuant to Section 7.12 hereof, including, but not limited to, Telic, and the permitted successors and assigns of each such Subsidiary Guarantor.
“Swap Agreement” shall mean the ISDA Master Agreement or any other swap agreement (as defined in 11 United States Code Section 101) now or hereafter entered into by Borrower with respect to any LIBOR Loan, including the Schedules and all Confirmations related thereto (as such terms are defined in the ISDA Master Agreement).
“Telic” shall mean Telic Optics, Inc., a Massachusetts corporation.
“Term Loan” shall have the meaning assigned in Section 2.1(b) hereof.
“Term Loan Note” shall mean the term loan promissory note of Borrower payable to the order of Bank dated as of the date hereof, in the form of Exhibit B attached hereto, evidencing the Obligations arising under the Term Loan, and any and all substitutions and replacements thereof, all as the same may be amended, restated, supplemented and/or modified from time to time.
“Termination Date” shall mean April 7, 2006 and any subsequent date to which the Termination Date may be extended pursuant to Section 10.1(a) hereof.
“Type”, when used in respect of any Loan, shall refer to the Rate by reference to which interest on such Loan is determined. For purposes hereof, the term “ Rate ” shall mean the LIBOR Rate and the Prime Rate.
“Unused Letter of Credit Commitment Amount” shall mean at any time (a) the Letter of Credit Commitment Amount at such time, minus (b) the aggregate Available Amount of all Letters of Credit outstanding at such time, minus (c) the aggregate amount of all unreimbursed L/C Disbursements at such time.
“Unused Line Fees” shall have the meaning assigned in Section 3.6 hereof.
“Unused Revolving Loan Commitment Amount” shall mean at any time (a) the Revolving Loan Commitment Amount at such time, minus (b) the aggregate principal amount of all Revolving Loans outstanding at such time minus (c) the aggregate Available Amount of all Letters of Credit outstanding at such time, minus (d) the aggregate amount of all unreimbursed L/C Disbursements at such time.
“Yield Maintenance Fee” shall mean, with respect to each repayment or prepayment of principal under any LIBOR Loan (whether such repayment or prepayment is made
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pursuant to Section 3.5 hereof, as a result of acceleration following an Event of Default, or for any other reason), an amount computed as follows: the current rate for United States Treasury securities (bills on a discounted basis shall be converted to a bond equivalent) with a maturity date closest to the maturity date of the Interest Period in effect for such LIBOR Loan at the time of such repayment or prepayment shall be subtracted from the LIBOR Rate component of the interest rate in effect under such LIBOR Loan at the time of such repayment or prepayment. If the result is zero or a negative number, the Yield Maintenance Fee shall be zero. If the result is a positive number, then the resulting percentage shall be multiplied by the amount of the principal balance being prepaid. The resulting amount shall be divided by 360 and multiplied by the number of days remaining in such Interest Period. Said amount shall be reduced to present value calculated by using the above referenced United States Treasury securities rate and the number of days remaining in such Interest Period.
Section 1.2 Computation of Time Periods.
In this Agreement in the computation of periods of time from a specified date to a later specified date, the word “from” shall mean “from and including” and the words “to” and “until” each mean “to but excluding”.
Section 1.3 Accounting Terms.
Unless otherwise defined, all accounting terms shall be construed, and all computations or classifications of assets and liabilities and of income and expenses shall be made or determined in accordance with GAAP.
Section 1.4 Other Definitional Provisions.
The definitions in Section 1.1 shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. All references herein to Articles, Sections, Exhibits and Schedules shall be deemed references to Articles and Sections of, and Exhibits and Schedules to, this Agreement unless the context shall otherwise require. Except as otherwise expressly provided herein, any reference in this Agreement to any Financing Agreement shall mean such document as amended, restated, supplemented or otherwise modified from time to time (subject to the restrictions on such amendments, restatements, supplements or modifications set forth herein). The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The words “hereof”, “herein” and “hereunder” and words of similar import shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The phrase “upon the occurrence and during the continuance of any Event of Default” or phrases of similar import contained herein or in any other Financing Agreement shall not be construed, by implication or otherwise, to mean that Borrower, any Subsidiary Guarantor or any other Person shall have a right to cure any such Event of Default (unless otherwise expressly provided herein or therein), and the only right Borrower, each Subsidiary Guarantor and/or any other Person shall have upon the occurrence of any such Event of Default is to tender payment in full of all outstanding Obligations unless Bank shall have
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agreed in writing to waive such Event of Default and/or otherwise permit Borrower, any Subsidiary Guarantor and/or other Person to cure such Event of Default.
Section 1.5 Conflicting Terms.
It being the express intention and agreement of Obligors and Bank that the provisions of this Agreement shall control and govern the Obligations, in the event and to the extent that any term or provision of this Agreement conflicts with a similar term or provision contained in another Financing Agreement, the term or provision of this Agreement shall govern and control.
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS
Section 2.1 Amounts.
(a) Revolving Loans . Subject to the terms and conditions contained in this Agreement, Bank agrees to make revolving loans (each a “ Revolving Loan ”) to Borrower from time to time on any Business Day during the period from the date hereof until the Termination Date in an amount for each such Revolving Loan not to exceed the Unused Revolving Loan Commitment Amount on such Business Day. Within the limits of the Unused Revolving Loan Commitment Amount, so long as Borrower is in compliance with all of the terms and conditions of this Agreement and no Defaulting Event has occurred, Borrower may borrow Revolving Loans under this Section 2.1(a), repay all or a portion of outstanding Revolving Loans pursuant to Section 3.5 hereof, and re-borrow Revolving Loans under this Section 2.1(a).
(b) Term Loan . Subject to the terms and conditions contained in this Agreement, Bank agrees to extend to Borrower a term loan in the principal amount of $5,000,000 (the “ Term Loan ”) as evidenced by, in addition to this Agreement, the Term Loan Note.
(c) Letters of Credit . Subject to the terms and conditions of this Agreement, Borrower may, from time to time on any Business Day during the period from the date hereof until the Termination Date, request Bank to issue Letters of Credit for drawing in Dollars (or such other currency as shall be approved by Bank) for the account of Borrower or any Subsidiary Guarantor or to amend, renew or extend an existing Letter of Credit. A Letter of Credit shall be issued, amended, renewed or extended on any Business Day, provided that (i) no Letter of Credit shall be issued in an Available Amount which exceeds the Unused Letter of Credit Commitment Amount on such Business Day, and (ii) after giving effect to such issuance, amendment, renewal or extension, the sum of (1) the aggregate outstanding principal amount of all Revolving Loans on such Business Day, (2) the aggregate Available Amount of all outstanding Letters of Credit on such Business Day, and (3) the aggregate outstanding unpaid L/C Disbursements on such Business Day does not exceed the Revolving Loan Commitment Amount.
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(d) Use of Proceeds . Borrower represents that the proceeds of the Revolving Loans shall be used by Borrower for working capital and general corporate purposes, including, but not limited to, the acquisition of Capital Assets and the issuance of Letters of Credit by the Bank on behalf of the Borrower or any Subsidiary Guarantor, and Borrower represents that the Term Loan will be used to finance the acquisition of all of the issued and outstanding capital stock of Telic pursuant to the Merger Agreement.
Section 2.2 Procedure for Revolving Loans.
(a) Notices of Borrowing . Each request for a Revolving Loan may be made only once per Business Day and shall be made on notice, given not later than (i) 1:00 p.m. (Hartford, Connecticut time) on the date of the proposed borrowing, in the case of requests for Prime Rate Loans, and (ii) 1:00 p.m. (Hartford, Connecticut time) on the second Business Day prior to the date of the proposed borrowing, in the case of requests for LIBOR Loans, by Borrower to Bank. Each such notice (which notice shall be irrevocable and binding on Borrower) of a proposed borrowing (a “ Notice of Borrowing ”) shall be by telephone, confirmed immediately in writing, or by telex or telecopier, specifying the date of the proposed borrowing (which shall be a Business Day), the amount to be borrowed and the type of borrowing (which shall be either a Prime Rate Loan, a LIBOR Loan or any combination thereof as Borrower may elect subject to the provisions of this Agreement). If no election as to the Type of Revolving Loan borrowing is specified in any such Notice of Borrowing, then Borrower shall be deemed to have requested such Revolving Loan to be a Prime Rate Loan. All LIBOR Loans shall have an Interest Period of one (1) month. Each borrowing under the Facility shall be in an amount equal to $250,000 or in integral multiples of $100,000 in excess thereof. In the event that written confirmation of a telephonic Notice of Borrowing differs in any respect from the action taken by Bank, the records of Bank shall be presumed correct absent manifest or demonstrable error.
(b) Revolving Loan Account, Monthly Statements . Insofar as Bank shall make Revolving Loans hereunder, Bank shall enter the amounts of such Revolving Loans as debits on an internal ledger account (the “ Revolving Loan Account ”). Bank may also record to the Revolving Loan Account, in accordance with customary banking procedures, all fees, accrued and unpaid interest, late fees, other fees and charges which are properly chargeable to Borrower under this Agreement, all payments, subject to collection, made by Borrower on account of Obligations evidenced by the Revolving Loan Account and, to the extent amounts contained in Borrower’s main operating concentration account maintained with Bank are insufficient to pay the same, usual and customary bank charges for the maintenance and administration of checking and other bank accounts maintained by Borrower. On a monthly basis, Bank may render a statement for the Revolving Loan Account, which statement, if rendered, shall be presumed correct unless Borrower notifies Bank to the contrary within thirty (30) days of the receipt of said statement by Borrower.
(c) Disbursement of Revolving Loans . Insofar as Borrower may request and Bank shall make Revolving Loans hereunder, Bank shall make such funds available to Borrower by crediting Borrower’s main operating concentration account maintained with Bank or such other account (whether or not maintained with Bank) as Borrower may otherwise direct in writing.
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Section 2.3 Procedure for Letters of Credit; Certain Conditions.
(a) Notices of Issuance, Amendment, Renewal, Extension . Requests for the issuance of Letters of Credit (or to amend, renew or extend an existing Letter of Credit) may be made only once per Business Day and shall be made on notice, given not later than 1:00 p.m. (Hartford, Connecticut time) three (3) Business Days prior to the date of the proposed issuance or amendment, renewal or extension, by Borrower to the Bank. Each such notice (which notice shall be irrevocable and binding on Borrower) of a proposed issuance of a Letter of Credit or of an amendment, renewal or extension of an existing Letter of Credit (each, a “ Notice of Issuance ”) shall be by telephone, confirmed promptly in writing, or by telex or telecopier, specifying therein the (i) requested date of issuance, amendment, renewal or extension (which shall be a Business Day), (ii) requested Available Amount of such Letter of Credit in Dollars (or other currency approved by the Bank), (iii) requested expiration date of such Letter of Credit (which shall comply with subsection (c) below), and (iv) the name and address of the beneficiary of such Letter of Credit, and shall be accompanied by such other information as shall be necessary to prepare such Letter of Credit and such application and agreement for letter of credit as the Bank may require Borrower and/or any other Obligor to execute in connection with such requested Letter of Credit (each, a “ Reimbursement Agreement ”). In the event that written confirmation of a telephonic Notice of Issuance differs in any material respect from the action taken by the Bank, the records of the Bank shall control absent manifest or demonstrable error. In the event and to the extent that the provisions of a Reimbursement Agreement shall conflict with this Agreement, the more stringent provisions of each shall govern.
(b) Form of Letter of Credit . Each Letter of Credit shall, among other things, (i) be in a form acceptable to the Bank, and (ii) be governed by, and shall be construed in accordance with, the laws or rules designated in such Letter of Credit or the applicable Reimbursement Agreement, or if no such laws or rules are so designated, the Uniform Customs (in the case of commercial letters of credit) or ISP98 (in the case of standby letters of credit) and, as to matters not governed by the Uniform Customs or ISP98, as applicable, Article 5 of the Uniform Commercial Code as in effect from time to time in the State of Connecticut.
(c) Expiry Dates . Each Letter of Credit shall expire at the close of business on the earlier of the date one (1) year after the date of the issuance of such Letter of Credit or the date that is one hundred eighty (180) Business Days after the Termination Date, unless such Letter of Credit expires by its terms on an earlier date.
(d) Reimbursement; L/C Disbursements as Revolving Loans . If the Bank shall make any L/C Disbursement in respect of a Letter of Credit, Borrower shall pay to the Bank an amount equal to such L/C Disbursement on the date specified for reimbursement in the applicable Reimbursement Agreement. Notwithstanding the foregoing, the Bank shall have the right (but not the obligation), in its sole and absolute discretion, to treat as Revolving Loans any and all L/C Disbursements which are not reimbursed to the Bank on the date specified for reimbursement in the applicable Reimbursement Agreement and, in furtherance thereof, the Bank shall have the right (but not the obligation) to effect payment thereof, together with payment of any of the fees, expenses and charges due and payable in connection therewith, immediately by a
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charge to Borrower’s Revolving Loan Account, notwithstanding that the Bank has, at such time, exercised any right it may have not to make Revolving Loans and further notwithstanding that additional Revolving Loans are not available for borrowing by Borrower. Such treatment shall not constitute a Defaulting Event or an Event of Default. Any L/C Disbursement which Bank elects to treat as a Revolving Loan shall initially be a Prime Rate Loan bearing interest at the Prime Rate, provided that Borrower shall also have the right, subject to the terms and conditions contained in this Agreement, to request Bank to make a Revolving Loan in accordance with Section 2.2(a) hereof, the proceeds of which Borrower intends to use to satisfy any or all of its Obligations in connection with outstanding L/C Disbursements.
(e) No Liability of the Bank . Borrower assumes all risks of the acts or omissions of any beneficiary or transferee of any Letter of Credit with respect to the use of such Letter of Credit, and Borrower’s obligations with respect to L/C Disbursements shall be absolute, unconditional and irrevocable, irrespective of: (i) any lack of validity or enforceability of any Letter of Credit, or any term or provision therein, (ii) the existence of any dispute, claim, setoff, defense or other right that Borrower or any other Person may have against the beneficiary under any Letter of Credit, the Bank or any other Person, whether in connection with this Agreement, any other Financing Agreement or any other related or unrelated agreement or transaction; (iii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by the Bank under a Letter of Credit against presentation of a draft or other documents that substantially complies in all material respects with the terms of such Letter of Credit; and (v) any error, omission, interruption or delay in any transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit.
The foregoing shall not be construed to excuse the Bank from liability to Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by Borrower to the extent permitted by law) suffered by Borrower that are caused by (x) the Bank’s willful misconduct or gross negligence in determining whether documents presented under any Letter of Credit comply with the terms of the Letter of Credit, or (y) the Bank’s willful failure to make lawful payment under a Letter of Credit after presentation to it of a draft or documents strictly complying with the terms and conditions of the Letter of Credit. It is understood that the Bank may, subject to the standard of gross negligence or willful misconduct, accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary and, in making any payment under any Letter of Credit (1) the Bank’s exclusive reliance on the documents presented to it under such Letter of Credit as to any and all matters set forth therein, including reliance on the amount of any draft presented under such Letter of Credit, whether or not the amount due to the beneficiary thereunder equals the amount of such draft and whether or not any document presented pursuant to such Letter of Credit proves to be insufficient in any respect, if such document on its face appears to be in order, and whether or not any other statement or any other document presented pursuant to such Letter of Credit proves to be forged or invalid or any statement therein proves to be inaccurate or untrue in any respect whatsoever and (2) any noncompliance in any immaterial respect of the documents presented under such Letter of Credit with the terms thereof shall, in each case, be deemed not to constitute willful misconduct or gross negligence of the Bank.
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(f) Interim Interest . If the Bank shall make any L/C Disbursement in respect of a Letter of Credit, then, unless Borrower shall reimburse such L/C Disbursement in full on the date specified for reimbursement in the applicable Reimbursement Agreement, the unpaid amount thereof shall bear interest for each day from and including the date of such L/C Disbursement to but excluding the date of payment, at a floating rate per annum equal to the Prime Rate.
(g) Cash Collateralization . If any Event of Default shall occur and be continuing, Borrower shall, on the third Business Day after receipt of notice from the Bank of the amount to be deposited (which notice shall also contain a description of the Event(s) of Default which shall have occurred), deposit in an account with the Bank an amount in cash equal to the aggregate Available Amount of all outstanding Letters of Credit as of such date. Such deposit shall be held by Bank as collateral for the payment and performance of the Obligations. The Bank shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. Such deposits shall not bear interest. Moneys in such account shall (i) first, automatically be applied by the Bank to reimburse itself for L/C Disbursements for which it has not been reimbursed, (ii) second, be held for the satisfaction of the reimbursement obligations of Borrower for the Bank’s exposure under undrawn Letters of Credit, and (iii) third, be applied to satisfy any other Obligations.
Section 2.4 Repayment of Revolving Loans, Obligations Absolute.
(a) Revolving Loan Repayment . NOTWITHSTANDING BANK’S RIGHTS UPON THE OCCURRENCE OF A DEFAULTING EVENT AND WHETHER OR NOT ANY SUCH DEFAULTING EVENT HAS OCCURRED, BORROWER SHALL REPAY TO BANK THE AGGREGATE PRINCIPAL AMOUNT OF ALL OUTSTANDING REVOLVING LOANS ON THE TERMINATION DATE.
(b) Obligations Absolute .
(i) The Obligations of Obligors under this Agreement and all other Financing Agreements shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement and such other Financing Agreements under all circumstances, including without limitation, the following circumstances:
(A) any lack of validity or enforcement of this Agreement, any other Financing Agreement or any other agreement or instrument relating thereto;
(B) any agreed change in the time, manner or in any other term of all or any of the Obligations, or any change in the place of payment of any of the Obligations;
(C) any amendment or waiver of, or consent to departure from, any of the Financing Agreements or all or any of the Obligations;
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(D) the existence of any claim, set-off, defense or other right that any of the Obligors may have, whether in connection with the transactions contemplated by this Agreement or any unrelated transaction;
(E) any document executed and/or delivered by or on behalf of any Obligor or any other Subsidiary proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;
(F) any release or amendment or waiver of or consent to departure from any Guaranty Agreement; or
(G) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including without limitation, any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Obligor.
Without limiting the generality of the foregoing, it is expressly understood and agreed that the absolute and unconditional obligation of the Obligors set forth above shall not be construed as a waiver by the Obligors of any claims or defenses it may have against Bank.
Section 2.5 Method of Payment, Direct Debits, Payment Date Adjustments, Application of Payments.
(a) Method of Payment . The Obligors shall make each payment due under this Agreement and under the Notes to the Bank at the Head Office (or such other place as the Bank may from time to time specify in writing) not later than 3:00 P.M., Hartford, Connecticut time, on the date when due in Dollars in immediately available funds, without setoff, defense or counterclaim and free and clear of, and without any deduction or withholding for, any taxes or other payments as contemplated under Section 4.6 hereof.
(b) Direct Debits . Notwithstanding subsection (a) above, Obligors hereby agree that the Bank may directly debit any demand deposit account of any Obligor held by the Bank for any amount due and payable under this Agreement, any of the Notes, any Guaranty Agreement, any Reimbursement Agreement and/or the Bank Swap Agreement, including, without limitation, principal, interest, fees and charges, provided that Bank shall only debit Borrower’s main operating concentration account maintained with Bank so long as amounts contained therein are sufficient to pay such amount or amounts then due and payable.
(c) Payment Date Adjustments . Whenever any payment of principal of, or interest on, any Prime Rate Loan shall be due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day. Whenever any payment of principal of, or interest on, any LIBOR Loan shall be due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day unless such Business Day falls in another calendar month, in which case the date for payment thereof shall be the next preceding
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Business Day. If the date for any payment of principal is extended by operation of law or otherwise, interest and fees thereon shall be payable for such extended time.
(d) Application of Payments . All payments (including prepayments) by or on behalf of Borrower hereunder and under any of the other Financing Agreements shall be applied first to the payment of all fees, expenses and other amounts due to the Bank (excluding principal and interest), then to accrued interest, and the balance on account of outstanding principal; provided, however , that after the occurrence of an Event of Default, payments will be applied to the Obligations in such manner and order of priority as the Bank determines in its sole discretion.
ARTICLE III
INTEREST, INTEREST PERIODS,
CONVERSIONS,
LATE PAYMENTS, PREPAYMENTS, FEES AND INTEREST RATE
HEDGE
Section 3.1 Interest and Late Payments.
(a) Pre-default Rates .
(i) Revolving Loans . Subject to the provisions of Section 3.1(b) hereof, during the period from the date made through and including the date of payment in full, each Revolving Loan shall bear interest on the outstanding principal amount thereof at a rate per annum equal to, at the election of Borrower subject to the terms of this Agreement: (A) the Prime Rate, or (B) the LIBOR Rate (as determined for each available Interest Period) plus the Applicable Margin for available Interest Periods of one (1) month.
(ii) Term Loan . Subject to the provisions of Sections 3.1(b), 4.1 and 4.3 hereof, the Term Loan shall bear interest at a rate per annum (as determined for each available Interest Period) equal to the LIBOR Rate plus the Applicable Margin for available Interest Periods of one (1) month.
(b) Default Interest . Notwithstanding the foregoing, at all times after the occurrence and during the continuance of an Event of Default (whether or not Bank has accelerated payment of the Obligations) or after maturity (by acceleration or otherwise) or after judgment, Borrower’s right to select pricing options shall cease and interest on all Loans shall, at the option of the Bank, accrue at a rate per annum equal to two percent (2.0%) above the Prime Rate.
(c) Calculation of Interest, Interest Rate Changes . Interest on the Loans shall be calculated on the basis of a 360 day year and the actual number of days elapsed. With respect to each Prime Rate Loan, any change in the interest rate because of a change in the Prime Rate shall become effective, without notice or demand, immediately upon any change in the Prime Rate. With respect to each LIBOR Loan, any change in the interest rate because of a change in the Reserve Percentage shall become effective, without notice or demand, on the date on which such change in the Reserve Percentage becomes effective.
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(d) Payment of Interest .
(i) Prime Rate Loans . Interest on each Prime Rate Loan shall be payable monthly in arrears, in Dollars and in immediately available funds beginning on the first Business Day of the month immediately succeeding the month in which such Loan was made or converted into such Prime Rate Loan and continuing on the first Business Day of each and every month thereafter, without notice or demand, so long such Loan remains outstanding or until such Loan is converted to a LIBOR Loan in accordance with the provisions of this Agreement.
(ii) LIBOR Loans . Interest on each LIBOR Loan shall be payable in Dollars and in immediately available funds on the last Business Day of each applicable Interest Period.
(e) Lawful Interest . All agreements between Borrower, each Subsidiary Guarantor and Bank are hereby expressly limited so that in no contingency or event whatsoever, whether by reason of acceleration of maturity of any of the Obligations or otherwise, shall the amount paid or agreed to be paid to Bank for the use or the forbearance of the Obligations exceed the maximum permissible under applicable law. As used herein, “ applicable law ” shall mean the law in effect as of the date hereof provided, however, that in the event there is a change in the law which results in a higher permissible rate of interest, then this Agreement, the Notes and the other Financing Agreements shall be governed by such new law as of its effective date. In this regard, it is expressly agreed that it is the intent of the Obligors and Bank in the execution, delivery and acceptance of the Financing Agreements to contract in strict compliance with the laws of the State of Connecticut from time to time in effect. If, under or from any circumstances whatsoever, fulfillment of any provision hereof or of any of the other Financing Agreements at the time of performance of such provision shall be due, shall involve transcending the limit of such validity prescribed by applicable law, then the obligation to be fulfilled shall automatically be reduced to the limits of such validity, and if under for from circumstances whatsoever Bank should ever receive as interest an amount which would exceed the highest lawful rate, such amount which would be excessive interest shall be applied to the reduction of the principal balance of the Loans and not to the payment of interest. This provision shall control every other provision of all agreements between Borrower, each Subsidiary Guarantor and Bank.
Section 3.2 Election and Continuation of Interest Periods.
(a) Election . The only Interest Period available for Revolving Loans and the Term Loan shall be an Interest Period of one (1) month.
(b) Continuation .
(i) Revolving Loans . Any Revolving Loan which is a LIBOR Loan shall be automatically continued as a LIBOR Loan (unless repaid in full) upon the expiration of the then current Interest Period with respect thereto without further notice to or from Borrower, provided that no Revolving Loan may be continued as a LIBOR Loan: (A) at a time when any
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Event of Default has occurred and is continuing, or (B) at a time when a LIBOR Loan is unavailable pursuant to Sections 4.1 or 4.3 hereof.
(ii) Term Loan . The Term Loan shall be a LIBOR Loan with available Interest Periods of one (1) month only, and shall be automatically continued as a LIBOR Loan upon the expiration of the then current Interest Period with respect thereto without further notice from or to Borrower, provided that the Term Loan may not be continued as a LIBOR Loan: (A) at a time when any Event of Default has occurred and is continuing, or (B) at a time when a LIBOR Loan is unavailable pursuant to Sections 4.1 or 4.3 hereof.
Section 3.3 Conversion of Revolving Loans.
Borrower may elect from time to time, subject to the provisions of this Agreement, to convert any outstanding Revolving Loan, or a portion or portions thereof, into a Revolving Loan of another available Type by giving Bank not less than two (2) Business Days’ prior irrevocable written notice of such election, provided that any such conversion of a LIBOR Loan to a Prime Rate Loan may only be made on the last Business Day of an Interest Period with respect thereto. Any such notice of conversion to a LIBOR Loan shall specify the amount of the Revolving Loan being converted and, in the case of a conversion to a LIBOR Loan, the length of the initial available Interest Period. All or any part of outstanding Revolving Loans may be converted as provided herein, provided that no Prime Rate Loan may be converted to a LIBOR Loan: (a) at a time when any Event of Default has occurred and is continuing, or (b) in the event a LIBOR Loan is unavailable pursuant to Sections 4.1 or 4.3 hereof. Borrower shall have no ability to convert all or any portion of the Term Loan to a Prime Rate Loan.
Section 3.4 Late Payment.
If the entire amount of any required principal and/or interest is not paid in full within ten (10) days after the same is due and payable (other than as a result of being accelerated after the occurrence of an Event of Default), without in any way affecting Bank’s right to declare an Event of Default to have occurred, Borrower shall pay to Bank a late charge equal to five percent (5%) of the required payment and such late charge shall be immediately due and payable without demand or notice of any kind.
Section 3.5 Repayments and Prepayments.
(a) Revolving Loans . Borrower may, at its option, repay any Revolving Loan at any time and from time to time, in whole or in part, on the following conditions: (i) Borrower shall pay all accrued interest on the principal being paid to the date of the repayment and, in the case of repayments in full, all fees, charges, costs, expenses and other amounts then due under any of the Revolving Loans; and (ii) if such Revolving Loan (or portion thereof being repaid) is then a LIBOR Loan, such LIBOR Loan shall only be repaid on the last Business Day of the then current Interest Period with respect thereto (unless such repayment is accompanied by the required Yield Maintenance Fee and breakage and/or other make-whole amounts, if any, as provided in subsections (c) and (e) below). In its notice, Borrower shall specify the date and
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amount of the prepayment, whether the Revolving Loan being repaid is a Prime Rate Loan, a LIBOR Loan or a combination thereof, and, if a combination thereof, the amount allocable to each.
(b) Term Loan . Borrower may, at its option, prepay the Term Loan, in whole or in part, on the following conditions: (i) Borrower shall pay all accrued interest on the principal being paid to the date of the prepayment and, in the case of prepayments in full, all fees, charges, costs, expenses and other amounts then due under the Term Loan; (ii) if the Term Loan (or portion thereof being prepaid) is then a LIBOR Loan, such LIBOR Loan shall only be prepaid on the last Business Day of the then current Interest Period with respect thereto (unless such repayment is accompanied by the required Yield Maintenance Fee and breakage and/or other make-whole amounts, if any, as provided in subsections (c) and (e) below); and (iii) any partial prepayment of the Term Loan shall be applied to principal installments due thereunder in the inverse order of maturity and shall not relieve Borrower’s obligation to make regularly scheduled principal payments thereunder. In its notice, Borrower shall specify the date and amount of the prepayment.
(c) Indemnity for Repayment or Prepayment of LIBOR Loans; Payment of Yield Maintenance Fee . In the event that a repayment or prepayment of a LIBOR Loan is made, required or permitted on a date other than the last Business Day of the then current Interest Period with respect thereto, Borrower shall indemnify Bank therefor in accordance with Section 4.5 hereof, including but not limited to, paying to Bank the applicable Yield Maintenance Fee, if any.
(d) Prepayment of Loans . In the event Borrower makes, at any time, a repayment or prepayment of a Loan, such repayment or prepayment shall be made without penalty or premium to Borrower (other than, in the case of LIBOR Loans, the payment of the applicable Yield Maintenance Fee and breakage and/or other make-whole amounts, if any).
(e) Effect of Prepayments on Bank Swap Agreement .
(i) The prepayment by Borrower of all or any portion of the Term Loan shall not affect Borrower’s obligation to continue to make payments to Bank under the Bank Swap Agreement (and, if applicable, to pay any breakage or other make-whole amounts with respect thereto), and the Bank Swap Agreement and Borrower’s obligations thereunder shall remain in full force and effect notwithstanding any such prepayment so long as the Bank Swap Agreement remains in full force and effect.
(ii) The prepayment in full of the Term Loan at a time when the Bank Swap Agreement is in effect with respect thereto but prior to the Maturity Date of the Term Loan shall, at Bank’s option, be deemed an “Additional Termination Event” (as such term is defined in the Bank Swap Agreement), the occurrence of which shall entitle Bank, at its option, to terminate the transaction entered into under the Bank Swap Agreement relating to such Term Loan. Upon any such termination of the Bank Swap Agreement, Borrower shall be liable to Bank for all indebtedness and obligations arising under or in connection with such termination, including
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without limitation, all amounts due to Bank, as swap counterparty, as a result of the occurrence of such an “Additional Termination Event”.
(f) Application of Prepayments .
Any and all prepayments shall be applied in accordance with Section 2.5(d) hereof. All partial prepayments, to the extent applied to principal, shall be applied to the principal installments due under the applicable Loan in the inverse order of maturity and shall not relieve Borrower’s obligation to make regularly scheduled principal payments thereunder.
Section 3.6 Unused Line Fees.
No later than five (5) Business Days after Borrower’s receipt of an invoice or other notice as to the amount of such fee, Borrower shall pay to Bank fees based upon the average daily Unused Revolving Loan Commitment Amount for each calendar quarter of Borrower (the “Unused Line Fees” ). The Unused Line Fees shall be calculated as of the end of each calendar quarter of Borrower and on the Termination Date (or such earlier date on which the Revolving Loan has been terminated and all Obligations under the Revolving Loan are fully and finally paid) and shall be determined by multiplying (i) the Applicable Unused Line Fee Percentage for such calendar quarter (or portion thereof) by (ii) the Unused Revolving Loan Commitment Amount for each day during such calendar quarter (or portion thereof).
Section 3.7 Commitment Fee.
On or before the date hereof, Borrower shall pay to Bank a one-time non-refundable commitment fee with respect to the Term Loan in an amount equal to $40,000 (the “Commitment Fee” ).
Section 3.8 Letter of Credit Fees.
In connection with the issuance, extension or renewal of each Letter of Credit, Borrower shall pay to the Bank all standard negotiation and administrative fees and charges imposed by the Bank (collectively, the “ Letter of Credit Fees ”), in each case payable upon issuance, extension or renewal.
Section 3.9 Interest Rate Hedge with Bank.
Borrower acknowledges and affirms its election to enter into the Bank Swap Agreement with Bank in order to hedge the floating interest expense under the Term Loan for the entire term thereof.
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ARTICLE IV
FUNDING AND YIELD PROTECTION
Section 4.1 Illegality.
Notwithstanding any other provisions herein, if, after the date hereof, any applicable law, regulation or directive, or any change therein or in the interpretation or application thereof after the date hereof shall make it unlawful, or any central bank or other governmental authority shall assert that it is unlawful, for Bank to make or maintain any LIBOR Loan as contemplated by this Agreement, then (a) the obligation of Bank to make such LIBOR Loan, continue such LIBOR Loan as such and convert a Prime Rate Loan to such LIBOR Loan shall forthwith be suspended until Bank shall notify Borrower that Bank has determined that the circumstances causing such suspension no longer exist, and (b) all such Loans then outstanding as unlawful LIBOR Loans, if any, shall be converted automatically, without notice on the last day of the then current Interest Periods with respect thereto (or within such earlier period as required by law) to a loan bearing interest at a floating rate per annum equal to the Prime Rate. If any such conversion of a LIBOR Loan is made or required on a day that is not the last Business Day of the then current Interest Period applicable thereto, Borrower shall pay Bank such amount or amounts as may be required pursuant to Sections 3.5 and 4.5 hereof, including, without limitation, the applicable Yield Maintenance Fee, if any.
Section 4.2 Additional Costs.
In the event that applicable law, treaty or regulation or directive from any government, governmental agency or regulatory authority enacted after the date hereof, or any change therein or in the interpretation or application thereof, or compliance by Bank with any request or directive having the force of law enacted after the date hereof from any central bank or government, governmental agency or regulatory authority, shall:
(a) subject Bank to any tax of any kind whatsoever (except taxes on the overall net income, franchise or gross receipts of Bank) with respect to this Agreement, the Notes or any of the Loans made by it, or any of the Letters of Credit issued by it, or change the basis of taxation of payments to Bank of principal, interest or any other amount payable hereunder or thereunder (except for changes in the rate or calculation of tax on the overall net income of Bank);
(b) impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirements against assets held by, or deposits or other liabilities in or for the account of, advances or loans or other extensions of credit by, or any other acquisition of funds by, any office of Bank, including (without limitation) pursuant to Regulations of the Board of Governors of the Federal Reserve System; or
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(c) in the opinion of Bank, cause any Note, any Loan, any Letter of Credit or this Agreement to be included in any calculations used in the computation of regulatory capital standards; or
(d) impose on Bank any other condition;
and the result of any of the foregoing is to increase the cost to Bank of making, converting into, continuing and/or maintaining the Loans (or any part thereof) or issuing Letters of Credit by an amount that Bank deems to be material, or to reduce the amount of any payment (whether of principal, interest or otherwise) with respect of any of the Loans or any of the Reimbursement Agreements by an amount that Bank deems material, then, in any case, Borrower shall promptly pay Bank, upon its demand, such additional amounts necessary, in the reasonable judgment of Bank, to compensate Bank for such additional costs or such reduction, as the case may be (collectively the “ Additional Costs ”). Bank shall give Borrower notice of any such determination as soon as practicable and shall certify the amount of such Additional Costs to Borrower, and such certification, absent manifest or demonstrable error, shall be presumed conclusive.
Section 4.3 Basis for Determining LIBOR Base Rate Inadequate or Unfair.
In the event that Bank shall have determined (which determination shall be conclusive and binding upon Borrower) that (a) by reason of circumstances affecting the interbank LIBOR market in which Bank regularly participates, adequate and reasonable means do not exist for determining the LIBOR Rate, or (b) Dollar deposits in the relevant amount and for the relevant maturity are no longer available to Bank in the interbank LIBOR market in which Bank regularly participates, or (c) the making or continuation of LIBOR Loans has been made impractical or unlawful by the occurrence of a contingency that materially and adversely affects the interbank LIBOR market in which Bank regularly participates, or (d) the LIBOR Base Rate will not adequately and fairly reflect the cost to Bank of making, funding or maintaining LIBOR Loans, or (e) the LIBOR Base Rate shall no longer represent the effective cost to Bank of U.S. Dollar deposits in the relevant market for deposits in which it regularly participates, Bank shall give Borrower notice of such determination as soon as practicable. If such notice is given (i) any requested LIBOR Loan shall be made as a Prime Rate Loan, unless Borrower gives Bank two (2) Business Days’ prior written notice that its request for such borrowing is cancelled, (ii) any Revolving Loan that was to have been converted to a LIBOR Loan shall be converted into or continued as, as the case may be, a Prime Rate Loan, and (iii) any outstanding LIBOR Loan shall be automatically converted, without notice, on the last Business Day of the then current Interest Period applicable thereto: (v) to, in the case of all LIBOR Loans which are Revolving Loans, Prime Rate Loans; (w) to, with respect to the Term Loan, a loan with an interest rate equal to the Prime Rate. Until such notice has been withdrawn, the obligation of Bank to make LIBOR Loans, continue LIBOR Loans as such and convert Revolving Loans to LIBOR Loans shall forthwith be suspended.
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Section 4.4 Capital Adequacy Protection.
If Bank shall have determined that the adoption of any applicable law, governmental rule, regulation or order regarding capital adequacy of banks or bank holding companies, or any change therein, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by Holder with any request or directive regarding capital adequacy (whether or not having the force of law and whether or not failure to comply therewith would be unlawful, so long as Bank believes in good faith that such has the force of law or that the failure to so comply would be unlawful) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on any of Bank’s capital as a consequence of Bank’s obligations hereunder to a level below that which Bank could have achieved but for such adoption, change or compliance (taking into consideration Holder’s policies with respect to capital adequacy immediately before such adoption, change or compliance and assuming that Bank’s capital was fully utilized prior to such adoption, change or compliance) by an amount deemed by Bank in its reasonable judgment to be material, then, upon demand, Borrower shall promptly pay to Bank, from time to time as specified by Bank, such additional amounts as shall be sufficient to compensate Bank for such reduced return, together with interest on each such amount from the date of such specification by Bank until payment in full thereof at the highest rate of interest (other than the default rate of interest) due on the Loans. A certificate of Bank setting forth the amount to be paid to Bank shall, in the absence of manifest error, be presumed conclusive. In determining such amount, Bank shall use any reasonable averaging and attribution methods generally employed by the banking industry under such circumstances.
Section 4.5 Indemnity.
In the event of (a) a default by Borrower in the payment of principal of or interest on any LIBOR Loan, (b) the failure by Borrower to complete a borrowing of, conversion into or continuation of a LIBOR Loan after notice thereof has been given, or (c) the making of a repayment or prepayment of a LIBOR Loan (whether such repayment or prepayment is made pursuant to Sections 3.5 or 4.1 hereof, as a result of termination and/or acceleration following an Event of Default, or for any other reason) on a day which is not the last day of the then current Interest Period applicable thereto, Borrower agrees to pay to Bank, in addition to and not in lieu of Additional Costs and any other amount due hereunder (but without duplication as to amounts paid in respect of the required Yield Maintenance Fee), on demand such amount or amounts as shall be sufficient in the reasonable opinion of Bank to compensate Bank for any loss, cost or expense (including, without limitation, costs or losses associated with prepaying or redeploying deposits, whether or not Bank shall have actually funded the Loan with corresponding deposits) incurred as a result of the occurrence of any of the foregoing conditions (a), (b) or (c). Any demand by Bank for payment pursuant to this Section 4.5 shall be accompanied by a schedule in reasonable detail setting forth its computation of any such loss, cost or expense, such schedule to be conclusive and binding on Borrower absent manifest or demonstrable error.
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Section 4.6 Payments Free of Taxes and Other Deductions.
Any and all payments by or on behalf of Obligors hereunder and under any of the other Financing Agreements shall be made without setoff or counterclaim and free and clear of and without deduction for any and all current and future taxes, levies, imposts, duties, charges, fees, deductions, withholdings, liabilities, compulsory loans, restrictions or conditions of any nature now or hereafter imposed or levied by any jurisdiction or any political subdivision thereof or taxing or other authority therein (collectively or individually called “ Taxes ”). The parties hereto acknowledge that Obligors shall not be responsible for the payment of any taxes on the overall net income of Bank which may arise as a result of the Loans. If any such obligation is imposed upon any of the Obligors with respect to any amount payable by it hereunder or under any of the other Financing Agreements, Obligors will pay to Bank on demand after notice from the Bank (if not otherwise paid to the appropriate taxing authority), such additional amount in Dollars as shall be necessary to enable Bank to receive the same net amount which Bank would have received on such due date had no such obligation been imposed upon Obligors. Obligors will deliver promptly to Bank certificates or other valid vouchers for all taxes or other charges deducted from or paid with respect to payments made by Obligors hereunder or under such other Financing Agreements. Obligors will indemnify Bank for the full amount of Taxes paid by Bank and any liability (including penalties, interest and expenses (including reasonable attorneys’ fees and expenses) arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally asserted by the relevant Government Authority. A certificate as to the amount of such payment or liability prepared by Bank, absent manifest or demonstrable error, shall be final, conclusive and binding for all purposes. Such indemnification shall be made within ten (10) days after the date Bank makes written demand therefor.
Section 4.7 Survival.
All claims by Bank under this Article IV shall be brought within one hundred eighty (180) days of Bank’s actual knowledge of the basis for such claims (which may be after the termination of this Agreement and the payment of the Loans and other Obligations).
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties.
In order to induce Bank to enter into this Agreement and the other Financing Agreements and to make the Loans and to issue the Letters of Credit, each of the Obligors makes the following representations and warranties to Bank, which shall be deemed made as of the date hereof and as of the date of each Revolving Loan (except to the extent such representation or warranty relates to a specified date, in which case such representation or warranty shall be true and correct as of such date), and shall survive the execution and delivery hereof and each performance hereunder. Any knowledge acquired by Bank shall not diminish Bank’s rights to rely upon such representations and warranties.
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(a) Incorporation, Good Standing and Due Qualification .
(i) Borrower (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware; (ii) has all requisite power and authority necessary to own its properties and assets and to carry on the business in which it is now engaged or proposed to be engaged; and (iii) is duly qualified and in good standing to do business as a foreign corporation under the laws of each jurisdiction in which such qualification is required except to the extent such failure to be so qualified would not reasonably be expected to result in a Material Adverse Effect.
(ii) Each Subsidiary Guarantor (i) is a corporation duly organized, validly existing and in good standing under the laws of their respective jurisdictions of incorporation; (ii) has all requisite power and authority necessary to own its properties and assets and to carry on the business in which it is now engaged or proposed to be engaged; and (iii) is duly qualified and in good standing to do business as a foreign corporation under the laws of each jurisdiction in which such qualification is required except to the extent such failure to be so qualified would not reasonably be expected to result in a Material Adverse Effect.
(b) Corporate Authority . Each Obligor has full power and authority to enter into this Agreement and the other Financing Agreements, to make the borrowings and guaranties contemplated herein, to execute and deliver the Notes and the other Financing Agreements as to which they are a party, and to incur the obligations provided for herein and therein, all of which have been duly authorized by all necessary corporate action. No other consent or approval or the taking of any other action in respect of shareholders or of any public authority is required as a condition to the validity or enforceability of this Agreement, the Notes, the Guaranty Agreements, the other Financing Agreements, or any other instrument, document or agreement delivered in connection herewith or therewith, except in each case as would not reasonable be expected to result in a Material Adverse Effect.
(c) Binding Agreements . This Agreement constitutes, and the Notes, the Guaranty Agreements and the other Financing Agreements executed and/or delivered in conn
AGREEMENTS / CONTRACTS
CLAUSES
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