EXECUTION
SECOND AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
By and Among
BOSTON BIOMEDICA, INC., BTRL CONTRACTS AND
SERVICES, INC. and BBI-NORTH AMERICAN CLINICAL LABORATORIES, INC.
as the Borrower
and
THE FIRST NATIONAL BANK OF BOSTON
as the Lender
Dated: As of August 2, 1995
SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
TABLE OF CONTENTS
Page
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Preamble......................................................................................... 1
Section 1 - Definitions; Use of Terms; Incorporation by Reference................................ 2
Section 2 - Establishment of Loan Account and Description of Loan Arrangement
and Credit Facilities.......................................................... 7
2.1 Amounts and Types of Loans; Notes Evidencing Loans.......................................... 7
2.2 Interest Rate on Loans...................................................................... 8
2.3 Repayment of Loans.......................................................................... 8
2.4 Security for the Loans...................................................................... 8
2.5 Use of Proceeds ............................................................................ 8
2.6 Loan Advances............................................................................... 8
2.7 Other Advances and Payments................................................................. 9
2.8 Loan Statements............................................................................. 9
2.9 Release of Guaranty......................................................................... 10
2.10 Review of Line of Credit................................................................... 10
Section 3 - Security Interest in Collateral...................................................... 10
3.1 Granting Clause; Description of Collateral................................................... 10
3.2 Certain Representations, Warranties, and Covenants Regarding the Collateral.................. 12
3.2.1 Lock Box Agreement.................................................................... 12
3.2.2 Schedules and Assignments of Account/Consents to Assignments.......................... 12
3.2.3 Bona Fide Accounts.................................................................... 13
3.2.4 Notification To Account Debtors and Others by Lender.................................. 13
3.2.5 Allowances and Adjustments............................................................ 13
3.2.6 Notification To Account Debtors by Borrower........................................... 14
3.2.7 Title to Collateral................................................................... 14
3.2.8 Actions To Maintain Perfection........................................................ 14
3.2.9 Lender's Payment of Taxes and Other Payments.......................................... 14
3.2.10 Verification.......................................................................... 15
3.2.11 Location of Collateral................................................................ 15
3.2.12 Powers of Attorney.................................................................... 15
3.2.13 Ratification and Indemnification Under Power of Attorney.............................. 17
3.2.14 Motor Vehicle Certificates of Title................................................... 17
3.2.15 Audit Fees............................................................................ 17
3.2.16 Borrowing Base Determinations......................................................... 17
3.3 Inventory Collateral........................................................................ 18
3.4 Equipment Collateral........................................................................ 18
3.4.1 Business Use; Purchase Money Acquisitions............................................. 18
3.4.2 Fixtures.............................................................................. 18
Section 4 - Representations, Covenants and Warranties............................................ 19
4.1 General Representations, Covenants and Warranties............................................ 19
4.1.1 Business; Supplementary Information Regarding Borrower................................. 19
4.1.2 Due Organization and Existence; Authorization.......................................... 19
4.1.3 Articles of Organization; Stock; Accurate Records...................................... 20
4.1.4 Binding Documents; Violation of Other Agreements....................................... 20
4.1.5 Title To Assets; Security Interests and Mortgages; Leases;
Royalties; etc................................................................. 20
4.1.6 Investments............................................................................ 20
4.1.7 Litigation; Outstanding Orders......................................................... 20
4.1.8 Financial Statements Delivered......................................................... 21
4.1.9 Current Stockholders................................................................... 21
4.1.10 Other Liabilities; Tax Returns; No Adverse Changes.................................... 21
4.1.11 No Agency Between Borrower and Lender................................................. 21
4.1.12 Regulation U.......................................................................... 22
4.1.13 ERISA................................................................................. 22
4.1.14 Necessary Permits and Licenses........................................................ 22
4.1.15 Governmental Approvals Not Required................................................... 22
4.1.16 Adequate Financing.................................................................... 23
4.1.17 No Event of Default................................................................... 23
4.1.18 Compliance with Leases................................................................ 23
4.1.19 President and Chief Executive Officer; Major Stockholder.............................. 23
4.1.20 Compliance with Certain Environmental Laws............................................ 23
4.1.21 Recent Changes of Name or Structure................................................... 24
4.1.22 Payment of Wages...................................................................... 24
4.2 Certain Affirmative Covenants................................................................ 24
4.2.1 Payment of Obligations................................................................. 24
4.2.2 Books and Records...................................................................... 24
4.2.3 Inspection............................................................................. 24
4.2.4 Commercial Purposes.................................................................... 25
4.2.5 Notice of Adverse Matters.............................................................. 25
4.2.6 Principal Lending Business............................................................. 25
4.2.7 Maintenance of Corporate Existence; Compliance with Laws.............................. 25
4.2.8 Payment of Taxes and Filing of Returns................................................ 25
4.2.9 Maintenance of Properties............................................................. 26
4.2.10 Collection Costs; Legal Fees; etc..................................................... 26
4.2.11 Insurance............................................................................. 26
4.2.12 Further Agreements; Compliance with Other Obligations; Tax Returns;
Notice of Litigation and of Events of Default.................................. 27
4.2.13 Certain Environmental Matters......................................................... 28
4.2.14 Changes in Master Exhibit............................................................. 29
4.2.15 Government Approvals.................................................................. 29
4.2.16 Key Man Life Insurance................................................................ 29
4.3 General Negative Covenants.................................................................. 29
4.3.1 Other Debt............................................................................. 29
4.3.2 Payment of Dividends................................................................... 30
4.3.3 Loans by the Borrower.................................................................. 30
4.3.4 Investments............................................................................ 30
4.3.5 Mergers, etc........................................................................... 30
4.3.6 Sales of Assets........................................................................ 30
4.3.7 No Liens; Permitted Encumbrances ...................................................... 30
4.3.8 Continuance of Business................................................................ 30
Section 5 - Financial and Reporting Covenants.................................................... 31
5.1 Reporting Covenants.......................................................................... 31
5.1.1 Quarterly Financial Statements......................................................... 31
5.1.2 Annual Financial Statements............................................................ 32
5.1.3 Monthly and Weekly Reports............................................................. 32
5.1.4 Officer's Certificate.................................................................. 33
5.1.5 Other Information...................................................................... 33
5.2 Financial Covenants......................................................................... 33
Section 6 - Events of Default.................................................................... 35
Section 7 - Remedies............................................................................. 37
7.1 General Remedies............................................................................. 37
7.2 License ..................................................................................... 39
7.3 No Duty of Preservation; Joint Property...................................................... 39
7.4 Cumulative Remedies ......................................................................... 39
Section 8 - Waiver; Termination ................................................................. 40
8.1 Waiver By The Borrower....................................................................... 40
8.2 Lender's Option To Waive..................................................................... 40
Section 9 - Miscellaneous........................................................................ 40
9.1 Deposits As Collateral; Set-Off.............................................................. 40
9.2 Transfer of Collateral to Bank............................................................... 41
9.3 No Duty To Preserve or Collect............................................................... 41
9.4 Survival of Covenants; Binding Effect........................................................ 41
9.5 Termination of Agreement..................................................................... 42
9.6 Conflict of Terms............................................................................ 42
9.7 Prior Discussions; Amendments in Writing; Counterparts;
Filing As Financing Statement.................................................. 42
9.8 General Indemnification...................................................................... 43
9.9 Destruction of Documents; Jurisdiction....................................................... 43
9.10 Notices..................................................................................... 43
9.11Application of Proceeds...................................................................... 44
9.12 Continuance of Defaults..................................................................... 44
9.13 Severability................................................................................ 44
9.14 Headings.................................................................................... 44
9.15 Governing Law; Sealed Instrument............................................................ 45
9.16 Force Majeure............................................................................... 45
9.17 Interpretation of Agreement................................................................. 45
Master Exhibit
Exhibit 1.4.1 1994 BBI, BTRL and NACL Equipment Appraisal Report
Exhibit 1.8 Existing Government Contracts
Exhibit 3.2.1 Form of Lock Box Agreement
Exhibit 4.2.15(A) Form of Collateral Assignment
Exhibit 4.2.15(B) Form of Notice of Collateral Assignment
Exhibit 5.2.3 Calculation of Debt Service Ratios
SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
-------------------------------------------------------
This Second Amended and Restated Loan and Security Agreement (this
"Agreement") is dated as of August 2, 1995, and is by and among BOSTON
BIOMEDICA, INC. ("BBI"), BTRL CONTRACTS AND SERVICES, INC. ("BTRL"), and
BBI-NORTH AMERICAN CLINICAL LABORATORIES, INC. ("NACL"), formerly known as NORTH
AMERICAN LABORATORY GROUP, INC., each of which is a Massachusetts corporation
validly created, legally existing and in good standing under the laws of the
Commonwealth of Massachusetts and each of which has its "Notice Address" at 375
West Street, West Bridgewater, Massachusetts 02379 (BBI, BTRL and NACL, together
with their respective successors and assigns, are collectively referred to
herein as the "Borrower") and THE FIRST NATIONAL BANK OF BOSTON, a national
banking association having an office and "Notice Address" at Bank of
Boston-Worcester Tower, P.O. Box 15073, 100 Front Street, Worcester,
Massachusetts 01608-1438 (together with its successors and assigns, the
"Lender"), successor-by-merger to WORCESTER COUNTY INSTITUTION FOR SAVINGS, a
Massachusetts savings bank ("WCIS").
WHEREAS, the Borrower and the Lender entered into a certain amended and
restated loan arrangement (the "Loan Arrangement") as evidenced by a certain
Amended and Restated Loan and Security Agreement dated as of June 18, 1993 (the
"Amended and Restated Agreement"), which Loan Arrangement has been subsequently
amended by a certain letter agreement dated August 26, 1993 ("Amendment No. 1")
by and between the Borrower and the Lender, further amended by a certain
Amendment No. 2 to Amended and Restated Loan Agreement dated as of July 29, 1994
("Amendment No. 2") by and between the Borrower and the Lender and further
amended by Amendment No. 3 to Amended and Restated Loan and Security Agreement
dated as of October 11, 1994 ("Amendment No. 3") by and between the Borrower and
the Lender (the Amended and Restated Agreement as amended by Amendment No. 1,
Amendment No. 2 and Amendment No. 3 is sometimes hereinafter referred to as the
"Amended Agreement"); and
WHEREAS, BTRL and NACL are each wholly-owned subsidiaries of BBI,
formed to acquire certain assets determined to be useful and necessary to the
business conducted by BBI; and
WHEREAS, the Borrower and the Lender desire to again restate in their
entirety all of the provisions of the Loan Arrangement, to amend certain
provisions of the Loan Arrangement as more particularly described herein, and to
further increase the amount of credit available to the Borrower; and
WHEREAS, the Lender is willing to enter into this Agreement and grant
such financial accommodations to or for the benefit of the Borrower in
accordance with the terms of this Agreement only if the Borrower shall make and
enter into certain agreements, covenants, representations and warranties as set
forth herein and as further set forth and contained in the Financing Instruments
(as hereinafter defined), all of the terms and conditions of which Financing
Instruments are hereby incorporated herein by reference;
NOW THEREFORE, in order to induce the Lender to lend certain sums, to
extend such additional credit and to grant financial accommodations, all to or
for the benefit of the Borrower, and in consideration thereof and in
consideration of the mutual covenants herein contained, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrower hereby represents and warrants to the Lender, and
hereby covenants and agrees with the Lender, all as follows:
SECTION 1
DEFINITIONS; USE OF TERMS;
INCORPORATION BY REFERENCE
--------------------------
In this Agreement:
1.1 "Accounts" shall mean and refer to any and all of Borrower's rights
to payment for goods sold or leased or for services rendered, which are not
evidenced by an Instrument or Chattel Paper, whether or not such
rights have been earned by performance, and shall include all receivables,
notes, drafts, acceptances, other forms of obligations and "accounts" as defined
in the UCC, all in whatever form and however arising or created;
1.2 "Borrowing Base" shall mean and refer to the lesser of the Line of
Credit Maximum Amount (defined below), or the Calculated Amount (defined below),
where:
1.2.1 "Line of Credit Maximum Amount" shall mean and refer to
the amount of THREE MILLION FIVE HUNDRED THOUSAND DOLLARS ($3,500,000);
and
1.2.2 "Calculated Amount" shall mean and refer to the sum of
the following items:
1.2.2.1 Eighty Percent (80%) of the net amount of
Eligible Accounts; plus
1.2.2.2 the lesser of Forty percent (40%) of all
Eligible Inventory, or One Million Five Hundred Thousand
Dollars ($1,500,000);
1.3 "Eligible Accounts" shall mean and refer to that portion of
Borrower's Accounts which arise in the ordinary course of Borrower's business,
which have been earned by performance and which are not:
1.3.1 outstanding more than ninety (90) days;
1.3.2 based on payment terms other than those which are usual
and customary to the Borrower's business;
1.3.3 due from any Account Debtor which holds or is entitled
to any claim, counterclaim, setoff or chargeback or which has the right
to return to the Borrower for credit or refund the goods giving rise to
such Account;
1.3.4 based on any sale made on, so-called, "delayed
shipping", "bill and hold" or "dating" basis;
1.3.5 evidenced by a promissory note;
1.3.6 due from any Person employed by, or any salesman or
independent contractor of, the Borrower;
1.3.7 due from any Guarantor or any past, present or future
affiliate, parent or subsidiary of BBI, BTRL or NACL;
1.3.8 due from Account Debtors with respect to which the
Borrower is an Account Debtor (to the extent of the amount payable by
Borrower);
1.3.9 based on delivery of goods on consignment or otherwise
on "sale on approval", "sale or return" or similar terms (whether or
not compliance has been made with Section 2-326 of the UCC); or
1.3.10 determined by the Lender, in the exercise of reasonable
judgment, to be difficult to collect, to be of diminished or uncertain
value, or in which the Lender may not have a perfected security
interest pursuant to the provisions of the Financing Instruments.
Notwithstanding the foregoing, if at any time, fifty percent (50%) or
more of the Accounts due from any particular patient Account Debtor of
NACL remain unpaid (in whole or in part) after the passage of more
than ninety (90) days from the respective dates of each such patient
Account invoice from NACL, then from and after such determination, none
of the Accounts (then existing or thereafter arising) due from such
patient Account Debtor shall be deemed to be Eligible Accounts until
such time as all patient Accounts due from such patient Account Debtor
are no more than ninety (90) days past due from date of invoice as a
result of actual payments received thereon.
In addition, Eligible Accounts shall not include Accounts relating to
Existing Government Contracts (as hereinafter defined) until such time
as the same have been novated into the name of BTRL and are otherwise
in full compliance with 48 C.F.R. ss.42.12 (1991) to the satisfaction
of Lender;
Characterization of any account due from an Account Debtor as an
Eligible Account shall not be deemed a determination by the Lender as
to its actual value nor in any way obligate the Lender to accept any
Account subsequently arising from such Account Debtor to be, or to
continue to open such account to be, an Eligible Account; it is
Borrower's responsibility to determine the creditworthiness of Account
Debtors and all risks concerning the same and collection of Accounts
are with Borrower. All Accounts whether or not Eligible Accounts
constitute Collateral hereunder.
1.4 "Eligible Equipment" shall mean
1.4.1 that part of BBI's Equipment purchased in 1994
appraised by the appraisal dated August 9, 1994
conducted by Frank Ronne & Associates, which Eligible
Equipment is listed in Exhibit 1.4.1 annexed hereto;
1.4.2 Equipment owned by BTRL (the "BTRL Equipment"), which
was appraised by appraisal dated August 9, 1994
conducted by Frank Ronne & Associates, which Eligible
Equipment is listed in Exhibit 1.4.1 annexed hereto;
1.4.3 Equipment owned by NACL (the "NACL Equipment"), which
was appraised by appraisal dated August 9, 1994
conducted by Frank Ronne & Associates, which Eligible
Equipment is listed in Exhibit 1.4.1 annexed hereto;
and
1.4.4 Equipment to be purchased by the Borrower ("New
Eligible Equipment").
1.5 "Eligible Inventory" shall mean that part of BBI's Inventory which
the Lender determines, from time to time and in its sole discretion, to be
eligible for purposes of determining the Calculated Amount;
1.6 "Equipment" shall mean all motor vehicles (whether or not subject
to motor vehicle registration), rolling stock, machinery, furniture, office
equipment, plant equipment, laboratory equipment, fixtures, tools, spare parts,
accessories, dies, molds and all other like goods, property and assets owned now
or hereafter by Borrower and used in the operation or furtherance of Borrower's
business (whether or not Eligible Equipment or New Eligible Equipment); and
"equipment" as defined in the UCC;
1.7 "Equipment Collateral" shall mean all Equipment and all Documents
(whether negotiable or non-negotiable) which relate to Equipment;
1.8 "Existing Government Contracts" means the United States contracts,
subcontracts and agreements relating to BTRL which are listed on Exhibit 1.8
annexed hereto;
1.9 "Financing Instruments" shall mean and refer to any and all
agreements (including this Agreement), Instruments, Documents, and other
writings including without limitation, security agreements, loan agreements,
notes, guarantees, mortgages, deeds of trust, collateral assignments,
subordination agreements, contracts, notices, leases, financing statements and
all other written matter, whether heretofore, now, or hereafter executed by or
on behalf of the Borrower and delivered to the Lender in connection with the
transactions described in this Agreement or contemplated hereby, together with
all agreements and documents referred to therein or contemplated thereby;
1.10 "GAAP" shall mean and refer to generally accepted accounting
principles in the United States;
1.11 "Inventory" shall mean and refer to any and all of the following
owned by Borrower: goods, wares, merchandise, raw materials, supplies,
components, work in process, finished goods and all packaging, advertising,
shipping material, labels and other devices, names, or marks affixed thereto for
purpose of selling the same; tangible personal property held by the Borrower for
processing, sale, license, or lease, or furnished or to be furnished by the
Borrower under contracts of sale or service or to be used or consumed in the
Borrower's business (whether or not Eligible Inventory); items referred to above
which are in transit, returned, rejected, repossessed or detained (whether or
not Eligible Inventory); and "inventory" as defined in the UCC;
1.12 "Inventory Collateral" shall mean all Inventory and all Documents
(whether negotiable or non-negotiable) which relate to Inventory;
1.13 "IRC" shall mean and refer to the Internal Revenue Code of 1986,
as amended, and regulations as promulgated and in effect, from time to time,
thereunder;
1.14 "Liens" shall mean and refer to any and all: mortgages, pledges,
security interests, encumbrances, liens, or charges of any kind including, but
not limited to, agreements to give any of the foregoing; conditional sales or
other title retention agreements or devices, or any leases in the nature
thereof; and the filing of, or agreement to give, any financing statement under
the Uniform Commercial Code of any jurisdiction;
1.15 "Obligations" shall mean and refer to any and all indebtedness,
liabilities, duties, undertakings, covenants and agreements (including those of
payment or of performance) of the Borrower to the Lender, all of every kind,
nature and description, and arising pursuant to the terms of the Financing
Instruments or otherwise, including, without limitation:
1.15.1 Borrower's liability to repay the Loans (hereinafter
defined), together with the payment of all interest and other monies
due pursuant to the terms of any and all notes, and any and all
substitutions, renewals, extensions, amendments and rewritings of the
Loans or such notes and all present and future advances made
thereunder;
1.15.2 the faithful performance and observance by the Borrower
of all agreements, covenants and conditions contained in this Agreement
and in each of the other Financing Instruments; and
1.15.3 any and all such indebtedness, liabilities, duties,
undertakings, covenants and agreements whether or not the same are: now
existing or hereafter arising; imposed by agreement or by operation of
law; due or not due, absolute or contingent, liquidated or
unliquidated, voluntary or involuntary; evidenced by a writing;
presently contemplated by the parties; the joint or the several
liabilities of the Borrower; direct or indirect; related or unrelated
to the transactions described in or contemplated by the Financing
Instruments; liabilities or undertakings of the Borrower as surety,
guarantor or endorser with respect to obligations of one or more other
parties; specifically described as secured or unsecured; hereafter
acquired by Lender by assignment, other transfer or operation of law;
the result of any transaction whatsoever between the Borrower and the
Lender; or by reason of any cause of action which the Lender may have
against the Borrower.
1.16 "Persons" shall mean and refer to any and all individuals,
corporations, partnerships, joint stock associations, business or other trusts,
governments or any agencies or subdivisions thereof, joint ventures or other
entities or associations whatsoever;
1.17 "UCC" shall mean the Uniform Commercial Code as in effect from
time to time in the Commonwealth of Massachusetts;
1.18 The following terms shall have the respective meanings ascribed to
them in the UCC: "Account Debtor", "Chattel Paper", "Deposit Account",
"Document", "Equipment", "General Intangibles" and "Instrument";
1.19 Terms defined elsewhere in this Agreement shall have the
respective meanings ascribed to them where so defined;
1.20 All exhibits to this Agreement are hereby incorporated herein by
reference;
1.21 The use of the singular of terms which are defined in the plural
shall mean and refer to any one of the matters or items or entities included in
such definition; and
1.22 Use of the connective "or" is not intended to be exclusive; the
term "may not" is intended to be prohibitive and not permissive; use of
"includes" and "including" is intended to be interpreted as expansive and
amplifying and not as limiting in any way; and pronouns used herein shall be
deemed to include the singular and the plural and all genders.
SECTION 2
ESTABLISHMENT OF LOAN ACCOUNT AND
DESCRIPTION OF LOAN ARRANGEMENTS AND CREDIT FACILITIES
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Upon all the terms and conditions established by the Financing
Instruments, the Lender and the Borrower agree to enter into certain loan
transactions, pursuant to which the Lender agrees to lend (or otherwise extend
credit or provide other financial accommodations) to or for the benefit of the
Borrower, and the Borrower agrees to borrow (or otherwise guarantee, undertake
to repay or be liable for) the amount and the Obligations described below
(altogether, the "Loans"), and the Lender hereby opens for and in the name of
the Borrower one or more loan accounts for the purposes of administering the
following Loans:
2.1 Amounts and Type of Loans; Notes Evidencing Loans. The respective
amounts and types of the Loans shall be:
2.1.1 a Three Million Five Hundred Thousand Dollars
($3,500,000) term revolving line of credit (the "Line of Credit") (the
authorized maximum principal amount outstanding from time to time, of
which shall not exceed the Borrowing Base), which is evidenced by
Borrower's Second Amended and Restated Term Revolving Promissory Note
(the "Line of Credit Note") dated of even date herewith in the face
amount of the Line of Credit Maximum Amount;
2.1.2 a term loan in the original principal amount of Eight
Hundred Forty-nine Thousand Dollars ($849,000) (the "Amended and
Restated Term Loan"), evidenced by the Borrower's Amended and Restated
Term Promissory Note (the "Amended and Restated Term Note") dated
October 11, 1994;
2.1.3 a term loan in the original principal amount of Two
Hundred Thousand Dollars ($200,000) (the "$200,000 Term Loan"),
evidenced by the Borrower's Term Promissory Note (the "$200,000 Term
Note") dated October 11, 1994 in the face amount of the full principal
thereof; and
2.1.4 a term loan in the original principal amount of Three
Hundred Fifty Thousand Dollars ($350,000) (the "$350,000 Term Loan"),
evidenced by the Borrower's Term Promissory Note (the "$350,000 Term
Note") dated of even date herewith in the face amount of the full
principal thereof.
(The Line of Credit Note, the Amended and Restated Term Note, the $200,000 Term
Note and the $350,000 Term Note may each be referred to as a "Note" and
collectively as the "Notes".)
2.2 Interest Rate on Loans. The principal amount outstanding, from time
to time, of each of the Loans shall bear interest at the respective rates
applicable to each Loan in accordance with the provisions of the Notes.
2.3 Repayment of Loans. Principal and interest of the Loans shall be
paid to the Lender in accordance with the provisions of the Notes.
2.4 Security for the Loans. All of the Loans shall be secured by the
security interests granted in the Collateral (as hereinafter defined) as
provided by this Agreement.
2.5 Use of Proceeds. The proceeds of the Loans shall be used:
2.5.1 with respect to the Line of Credit, for working capital
purposes;
2.5.2 with respect to the Amended and Restated Term Loan,
advances up to the full amount of the Amended and Restated Term Note
have been made for the purchase by the Borrower of laboratory
equipment, furniture and computer equipment, and to pay down the Line
of Credit;
2.5.3 with respect to the $200,000 Term Loan, advances up to
the full amount of the $200,000 Term Loan have been made for purposes
of the purchase and installation by BBI, BTRL and NACL of Eligible
Equipment; and
2.5.4 with respect to the $350,000 Term Loan, advances shall
be made at the request of the Borrower from time to time for a period
of six (6) months from the date hereof for purposes of the purchase of
New Eligible Equipment, but such advances shall not exceed seventy-five
percent (75%) of the purchase price of such New Eligible Equipment.
2.6 Loan Advances. After the date hereof, Loans shall be made by
advances by the Lender to one or more of the accounts maintained by the Borrower
pursuant to Section 4.2.6 hereof (hereafter, the "Main Operating Account").
Subject to the terms and conditions hereof, the Lender may make Loans to the
Borrower (i) to cover checks drawn by Borrower on the Main Operating Account and
(ii) to cover other authorized charges whether given to the Lender orally,
telephonically or in writing and (iii) to cover other charges due and payable
hereunder. As an accommodation to the Borrower, and to facilitate the "zero
balance account" relationship contemplated by this Agreement, and to avoid the
necessity that the Lender communicate with the Borrower each time checks are
presented for payment against the Main Operating Account, the Borrower requests
the Bank to make a Loan charged to the Loan Account sufficient to cover checks
and other authorized charges on each occasion that the same are presented. All
actions of the Lender in connection with the ordinary administration of the
foregoing are hereby ratified and confirmed and shall be conclusive and binding
upon the Borrower. Each request by the Borrower to Lender for an advance under
the Line of Credit or the $350,000 Term Loan shall constitute a representation
by the Borrower that as of the date of such request (a) each of the
representations and warranties set
forth herein are true, (b) the Borrower is in compliance with all of the
covenants, terms and conditions hereof, and (c) no event or circumstances exist
which constitute or with the lapse of time or notice, or both, would constitute
or result in the occurrence of an Event of Default (as hereinafter defined).
2.7 Other Advances and Payments. Whether or not the entire amount
available under the Line of Credit shall have been advanced to or for the
benefit of the Borrower, and whether or not the Loans shall be payable (by
maturity or by acceleration) or an Event of Default shall have occurred under
this Agreement, the Lender shall be entitled (but shall not be obligated and may
not be required) to make, at its sole discretion, additional advances from time
to time:
2.7.1 in payment or reimbursement, as the case may be, of any
and all payments made or amounts owing pursuant to applicable
provisions of the Financing Documents;
2.7.2 to pay the Lender's usual and customary charges for (a)
services rendered by it to the Borrower at the Borrower's request which
charges relate to the Obligations; and (b) charges otherwise required
to be paid by the Borrower pursuant to this Agreement; and
2.7.3 otherwise to or for the benefit of the Borrower, as
requested or consented to by the Borrower, as the Lender may in its
discretion deem proper or expedient;
and each such additional advance shall be a part of the Obligations and shall at
all times be subject to the terms and conditions of this Agreement and secured
as provided in the Financing Instruments.
2.8 Loan Statements. All advances to or for the benefit of the Borrower
pursuant to this Agreement shall be charged to the loan account or accounts
opened in the Borrower's name on the Lender's books. The Lender periodically
shall render to the Borrower statements of such loan account or accounts,
setting forth the daily loan balance and total accrued interest during the
subject period, which, when so rendered, shall be considered prima facie
evidence of the correctness thereof except to the extent that the Lender
receives written notice of any exceptions proposed by the Borrower within a
reasonable time, but in no event later than one hundred twenty (120) days from
the date of such statement. If for any reason the Borrower has not paid interest
charges and/or any fees for services, expenses incurred or other charges owed to
the Lender by the Borrower, the Lender, at its option and discretion, may at any
time or times debit such charges, expenses, and fees to the Borrower's loan
account and such amounts shall be added to the principal amount thereof, or the
Lender may debit such interest, charges and fees, and any other unpaid
Obligations then due, to any deposit or other account of the Borrower at the
Lender. Such debits shall not constitute a waiver of any Event of Default. Any
item received in payment towards the Borrower's outstanding indebtedness which
requires clearance or payment shall not be considered to have been credited
until final clearance and final payment.
2.9 Additional Term Loan. Provided that there exists no Event of
Default hereunder, and no event shall have occurred which with the passage of
time or the giving of notice, or both, could become an Event of Default
hereunder, the Lender agrees to provide the Borrower, by January 1, 1996, with
an additional term loan in an original principal amount not to exceed One
Hundred Thousand Dollars ($100,000) for purposes of paying down the balance of
the Line of Credit then outstanding. Such additional term loan shall have a
five-year term and shall be upon such additional terms, and shall bear interest
at a rate, as shall be determined by the Lender in its sole and absolute
discretion.
2.10 Review of Line of Credit. The Lender agrees (a) to review the Line
of Credit annually on or before July 30 of each year commencing in 1996, to
determine whether the Maturity Date (as defined in the Line of Credit Note)
thereof will be extended for an additional twelve-month period beyond the
Maturity Date then in effect; and (b) to notify the Borrower of such
determination in accordance with the notice provisions of the Agreement.
Notwithstanding the foregoing, any determination by the Lender to extend the
Maturity Date shall not be binding and enforceable against the Lender until the
execution of an Extension Agreement, executed by the parties hereto.
SECTION 3
SECURITY INTEREST IN COLLATERAL
-------------------------------
3.1 Granting Clause; Description of Collateral. As security for the
prompt and full repayment (and performance as the case may be) of the
Obligations, the Borrower hereby grants to the Lender a continuing security
interest in and to all of the Borrower's present and future right, title and
interest in and to the following assets and property, and each item thereof,
whether now or hereafter existing, owned or acquired by Borrower, or now or
hereafter arising or due or to become due, wherever such assets and property may
be located, together with all substitutions, replacements, additions,
accessions, products and proceeds (of every kind and nature, cash and non-cash,
including, without limitation, insurance proceeds and proceeds which may be
property of any type described below) of or to any of the following, (all of
which, together with any other property in which the Lender may in the future be
granted a security interest to secure the Obligations, is collectively included
within the meaning of "Collateral" as used herein):
3.1.1 all Inventory and all Documents (whether negotiable or
non-negotiable);
3.1.2 all Accounts (whether or not Eligible Accounts for
purposes of determining the Borrowing Base hereunder); all rights of
Borrower to draw under letters of credit; and all rights of Borrower in
and to the Inventory which gave rise to any Account, and all liens,
guaranties and security granted to or held by Borrower with respect to
Accounts or other obligations owing to Borrower (all of the foregoing
are collectively referred to herein as the "Receivables Collateral");
3.1.3 all contract rights, including, without limitation, all
rights to payment under Existing Government Contracts and contracts not
yet earned by performance and not evidenced by an Instrument or Chattel
Paper;
3.1.4 all General Intangibles, including without limitation
all goodwill, customer lists, judgments, licenses, permits, trade
names, logos, trademarks, service marks, patents, patent applications,
copyrights, blueprints, drawings, designs, papers, rights to
performance, intellectual property, trade secrets, proprietary
processes, developmental ideas and concepts, and proprietary rights,
information and property of any kind and nature;
3.1.5 all Equipment, whether or not Eligible Equipment or New
Eligible Equipment;
3.1.6 all items of tangible and intangible personal property
of any and every kind and description which are not otherwise described
in this subsection 3.1;
3.1.7 all Instruments (whether negotiable or non-negotiable,
and regardless of their being attached to Chattel Paper), Chattel
Paper, policies and certificates of insurance, securities, deposits,
Deposit Accounts, money, cash and other property;
3.1.8 all liens, guarantees, rights, remedies and privileges
pertaining to any of the Collateral, including the right of stoppage in
transit;
3.1.9 all federal, state, and local tax refunds and/or
abatements to which the Borrower is, or becomes, entitled no matter how
or when arising, including but not limited to any loss carryback tax
refunds;
3.1.10 all books, records and information relating to any of
the Collateral or the operation of the Borrower's business in whatever
medium the same may be stored, contained, recorded or maintained,
including without limitation all electronically recorded information
and all rights of access to such books, records and information,
computer software and information (and all rights, programs, manuals,
storage, backup, service contracts, licenses and source codes with
respect thereto), and all property in which such books, records and
information are stored, contained, recorded or maintained; and
3.1.11 all insurance proceeds, refunds, and premium rebates,
whether arising out of insurance relating to any of the foregoing or
otherwise.
3.2 Certain Representations, Warranties, and Covenants Regarding the
Collateral. In addition to the warranties, representations and covenants of the
Borrower set forth elsewhere in this Agreement, the Borrower hereby warrants,
represents, and covenants as follows:
3.2.1 Lock Box Agreement. The Borrower shall hereafter make
collection of all Receivables Collateral in accordance with the terms
and provisions of the form of Lock Box Agreement attached hereto as
Exhibit 3.2.1 (the "Lock Box Agreement"), and shall immediately
instruct its Account Debtors to remit all payments, including without
limitation all checks, drafts, cash, instruments, and other items and
forms of payment which represent, or constitute proceeds or collections
of, the Receivables Collateral, in accordance with the terms and
provisions of the Lock Box Agreement. Upon receipt, Lender shall
deposit all such Receivables Collateral in a collateral account with
the Lender (the "Collateral Account"), subject to the provisions of
this subsection 3.2.1. After allowing two (2) business days for
collection of checks and other instruments, Lender will credit (but
conditional upon final collection) such payments to Borrower's Line of
Credit loan account (except foreign collection items received by check
of a foreign bank drawn on U.S. Dollars which shall be credited when
actually received in immediately available funds by the Lender). Such
credits shall be conditional upon final payment in cash or solvent
credits of the items giving rise to them. If any item is not so paid,
the Lender, in its discretion, whether or not the item is returned, may
either reverse any credit given for the item or charge it to Borrower's
Deposit Account. Any surplus remaining in the Collateral Account after
payment of any then due amounts under the Loans shall be then deposited
in Borrower's Deposit Account and may be used by Borrower in its
discretion subject to the terms and conditions of this Agreement.
3.2.2 Schedules and Assignments of Accounts/Consents to
Assignments. As and to the extent the Lender may from time to time
request, the Borrower shall provide the Lender with schedules
describing all Accounts created or acquired by the Borrower, and the
Borrower shall execute and deliver written assignments of such Accounts
to the Lender, including without limitation the Collateral
Assignments contemplated by Section 4.2.15 hereof when applicable,
provided, however, that the Borrower's failure to execute and deliver
such schedules and/or assignments shall not affect or limit the
Lender's security interest or other rights in and to each Account.
Together with each schedule so requested, the Borrower shall furnish
its sales and cash journals or equivalents acceptable to the Lender,
and shall warrant the genuineness thereof. the Borrower shall also, on
request of the Lender, furnish the Lender with the original shipping
and/or delivery receipts for all merchandise sold.
3.2.3 Bona Fide Accounts. The Borrower hereby warrants that
all Accounts are and will be bona fide existing obligations created by
the sale and delivery of merchandise (not on consignment or approval)
or the rendition of services to customers in the ordinary course of
business, free of Liens, and unconditionally owed to the Borrower,
without defense, offset or counterclaim, or that in the event the
Borrower becomes aware of the existence of a claim of defense, offset
or counterclaim, the Borrower will promptly notify the Lender of such
status of any such Account, and the portion of such Account subject to
defense, offset or counterclaim shall be excluded from classification
as an Eligible Account until such time as the Lender is satisfied that
such Account is no longer subject to claim of defense, offset or
counterclaim.
3.2.4 Notification To Account Debtors and Others by the
Lender. The Lender or the Lender's designee may, at any time or times
thereafter, with notice to the Borrower (given before, concurrently
with or within a reasonably prompt time thereafter, except that no
notice shall be required if an Event of Default has occurred and is
continuing), notify customers or Account Debtors of the Borrower,
either in the name of the Lender or the Borrower, that Accounts have
been assigned to the Lender and of the Lender's security interest
therein, and may instruct such customers and Account Debtors to make
payment directly to the Lender or such other address as may be
specified by the Lender, and the Lender may collect directly from the
obligors thereon all amounts due on account of any or all of the
Collateral and may charge the collection costs and expenses to the
Borrower, and the Lender may, at any time or times, advise any Person
of the Lender's security interest in and to the Collateral.
3.2.5 Allowances and Adjustments. Unless and until otherwise
directed by the Lender acting in its sole discretion, the Borrower may
grant such allowances or other adjustments to Account Debtors as may
reasonably accord with sound business practice; provided however that
no extension of time for payment shall be granted without the Lender's
prior written consent and provided that the Borrower shall furnish the
Lender with all reports required hereby with respect to such allowances
and adjustments. If any Inventory is returned to or repossessed by the
Borrower (other than for any routine warranty, modification or repair
service) or is downgraded in quality or has its marketability adversely
affected, or is detained from or refused entry to the United States, or
required to be removed from the United States, the Borrower shall
report any such occurrence to the Lender in writing in accordance with
the provisions hereof, and if within three (3) days after receipt by
the Lender of such written report thereof, the Lender fails to issue
specific instructions to the Borrower concerning such Inventory, the
Borrower shall have the right to dispose of the same in accordance with
sound business practices, subject, however, to the Lender's security
interest therein and in any Collateral arising from the disposition
thereof. Upon the occurrence of an Event of Default, the Lender may
settle or adjust disputes and claims directly with customers or Account
Debtors for amounts and upon terms which the Lender considers
advisable, and in all cases the Lender will credit the Borrower's Line
of Credit loan account with only the net amounts received by the Lender
in payment of such Accounts.
3.2.6 Notification To Account Debtors by the Borrower. At the
request of the Lender made at any time or times, the Borrower will
provide written notifications to any or all of the Borrower's Account
Debtors concerning the Lender's security interest in the Collateral and
will request that such Account Debtors forward payment thereof directly
to the Lender or as the Lender may direct.
3.2.7 Title to Collateral. Except for the security interest
hereby granted or previously granted and the Permitted Encumbrances (as
hereinafter defined), the Borrower is and shall remain the owner of the
Collateral free from all Liens, and the Borrower will defend the
Collateral against all claims and demands of all persons at any time
claiming the same or any interest therein, and, except with respect to
the Permitted Encumbrances, no financing statement covering any of the
Collateral is on file in any public office in any jurisdiction. The
Borrower will promptly upon learning thereof report to the Lender all
matters materially adversely affecting the value, collectibility or
enforceability of any Collateral. The Borrower does not have presently,
and shall not have hereafter, possession of any Inventory on
consignment.
3.2.8 Actions To Maintain Perfection. From time to time,
whether or not requested by the Lender, the Borrower will take all
steps and actions necessary in order to create, confirm and maintain a
valid and perfected security interest in favor of the Lender in the
Collateral, subject only to the Permitted Encumbrances, and will join
with the Lender in taking any such actions reasonably requested by the
Lender, including without limitation executing one or more financing
statements in form satisfactory to the Lender, and will pay the cost of
filing the same in all public offices wherever filing is deemed by the
Lender to be necessary for the purpose of creating, perfecting, or
maintaining the perfection or priority of the security interests
granted herein; and the Borrower will from time to time at the request
of the Lender also do, or execute and deliver, such additional and
further acts, things, assurances and instruments as are deemed
desirable by the Lender in order to more completely vest in and assure
to the Lender all of its rights hereunder and in or to the Collateral.
3.2.9 Lender's Payment of Taxes and Other Payments. At the
Lender's option, the Lender may at any time or times (but shall have no
obligation to):
3.2.9.1 discharge taxes, Liens, or security interests
or other encumbrances (other than Permitted Encumbrances, and
other than taxes being contested in good faith in accordance
with and to the extent permitted by this Agreement, unless in
either case an Event of Default shall have occurred and be
continuing) at any time levied, placed or assessed on the
Collateral;
3.2.9.2 pay for insurance on the Collateral if the
Borrower shall at any time fail to maintain such insurance, or
if the Lender shall at any time receive notice or otherwise
become aware that such insurance may be cancelled or become
cancelable within twenty (20) days; and
3.2.9.3 pay for the maintenance and preservation of
the Collateral.
The Borrower shall reimburse the Lender on demand for any payment made
or expense incurred by the Lender pursuant to the foregoing
authorization, and such obligation to reimburse the Lender shall
constitute part of the Obligations secured by this Agreement.
3.2.10 Verification. The Borrower hereby authorizes the Lender
to verify the Collateral, and any portion thereof, including
verification with Account Debtors, and with the Borrower's billing
companies, collection agencies, and accountants at any time and from
time to time, and to sign the Borrower's name to any notice to Account
Debtors or any notice relative to such verification of Collateral.
3.2.11 Location of Collateral. Such of the Collateral as
constitutes tangible property will be kept at all times at the
Borrower's Notice Address or at the Maryland Office (as hereinafter
defined) or the Connecticut Office (as hereinafter defined), wherever
the same is currently located. The Borrower will not remove such
Collateral from such location without the prior written consent of the
Lender. All the
Borrower's books and records regarding Collateral are and will be kept
and maintained at the Borrower's Notice Address or at BTRL's principal
office at 3 Taft Court, Rockville, Maryland 20850 (the "Maryland
Office") or at NACL's principal office at 75 North Mountain Road, New
Britian, Connecticut 06053 (the "Connecticut Office"), wherever the
same are currently located and shall not be removed from those
locations without the Lender's prior written consent.
3.2.12 Powers of Attorney. The Borrower hereby irrevocably
constitutes and appoints the Lender as the Borrower's true and lawful
attorney, with full power of substitution (in each case at the sole
risk, cost and expense of the Borrower but for the benefit of the
Lender) to do the following:
3.2.12.1 at any time or times (whether or not an
Event of Default has occurred), to file and record without the
Borrower's signature, or sign the Borrower's name to and file
and record, financing statements and any other instruments
(including without limitation applications to name the Lender
as lienholder on any motor vehicle or other Certificates of
Title), and to take such other actions as the Lender may deem
necessary in order to, perfect or maintain the perfection or
priority of or disclose or protect the Lender's security
interests in the Collateral or any portion thereof; to receive
and open the Borrower's mail, remove therefrom and hold or
apply any Collateral and dispose of such mail or turn over
such mail (other than such Collateral) to the Borrower or any
trustee in bankruptcy, receiver, assignee for benefit of
creditors or other legal representatives to whom the Lender
determines to be the appropriate Person to turn over such
mail; to endorse the name of the Borrower in favor of the
Lender upon any and all checks, drafts, notes, money orders,
acceptances and other items, Instruments and forms of payment,
and to sign and endorse the name of the Borrower on, and
receive as secured party, any of the Collateral; to sign the
Borrower's name to any invoices, schedules, freight or express
receipts, bills of lading, and other Documents or writings of
a similar or different nature, relating to the Collateral; to
sign the name of the Borrower on any schedules and assignments
of Accounts, and on notices of assignment, financing
statements and other public records relating to the
Collateral, and on any notice to the Borrower's Account
Debtors for verification of the Receivables Collateral; and to
receive and apply any proceeds of any Collateral and to
otherwise exercise any rights or remedies available to the
Lender hereunder or under any of the Financing Instruments or
otherwise under agreement or applicable law, to the extent
exercisable or available to the Lender prior to an Event of
Default; and
3.2.12.2 at any time or times after an Event of
Default has occurred and is continuing, in addition to the
actions described in subsection 3.2.12.1 above, to prosecute,
defend, compromise or release any action relating to the
Collateral; to notify the post office authorities to change
the address for delivery of the Borrower's mail to an address
designated by the Lender, and to sign change of address forms
therefor; to sign the Borrower's name in proofs of claim in
bankruptcies of Account Debtors, notices of lien, claims of
mechanics' liens, or assignments or releases of mechanics'
liens securing the Accounts; to take any such actions as may
be necessary to obtain payment of any letter of credit of
which the Borrower is a beneficiary; to repair, manufacture,
assemble, complete, package, deliver, alter or supply goods,
if any, necessary to fulfill in whole or in part the purchase
order of any customer of the Borrower; to take any and all
other actions (including, without limitation, the right to sue
in the name of the Borrower or the Lender to collect upon any
and all Collateral and to settle, adjust or compromise any and
all claims with respect to Collateral including insurance
claims) as the Lender shall deem necessary or expedient to
convert the Collateral into cash; and to otherwise exercise
any rights or remedies to the Lender hereunder or under any of
the Financing Instruments, or otherwise under agreement or
applicable law.
3.2.13 Ratification and Indemnification Under Power of
Attorney. In connection with all powers of attorney set forth in this
Agreement or in the other Financing Instruments, the Lender shall have
full power to exercise such powers as fully and effectually as the
Borrower might or could do; and the Borrower agrees that the Lender
shall not be obligated to exercise any of the powers authorized herein,
and shall be free to exercise or refrain from exercising any of such
powers at any time or times in its absolute discretion, and, if the
Lender elects to exercise any of such powers, it shall not be
accountable for more than it actually receives as a result of such
exercise of power, and shall not be responsible to the Borrower except
for the Lender's actual bad faith or gross negligence; and that all
powers conferred upon the Lender by this Agreement, being coupled with
an interest, shall be irrevocable until such time as all Obligations
have been paid or performed and the Lender's agreement to make advances
has terminated.
3.2.14 Motor Vehicle Certificates of Title. The Borrower
hereby represents and warrants that, with the exception of Equipment
which has been financed in compliance with Section 4.3.1 hereof, it
will promptly deliver to the Lender upon request the originals of all
Certificates of Title within its possession or control pertaining to
any Equipment owned by it for which Certificates of Title are currently
issued, together with a duly completed and executed Application to Add
Lienholder for each such Certificate; and the Borrower covenants and
agrees that it will promptly deliver to the Lender upon request all
Certificates of Title relating to any Equipment hereafter acquired by
it, together with a duly completed and executed Application to Add
Lienholder therewith (in form and content satisfactory for filing with
the appropriate office), and that the Borrower shall not seek to obtain
any Certificate of Title for any Equipment currently lacking such a
Certificate, and it shall not attempt to recertify or obtain a new
Certificate for any Equipment currently evidenced by a Certificate of
Title (whether in the Commonwealth of Massachusetts or any other
jurisdiction) without first notifying the Lender, and only if the
original of such Certificate of Title properly names the Lender as
first lienholder thereon (subject only to any Permitted Encumbrances),
in each case duly perfecting the Lender's security interest granted
under this Agreement.
3.2.15 Audit Fees. The Borrower shall pay to the Lender the
Lender's usual audit fees (as determined by the Lender for accounts of
the type and size of the Borrower) per audit conducted by the Lender,
from time to time, of the Collateral located outside of Massachusetts,
plus any reasonable out-of-pocket expenses of the Lender associated
therewith.
3.2.16 Borrowing Base Determinations. The calculations used to
determine the Borrowing Base are intended solely for purposes of
determining the aggregate amount of Loans which the Lender is presently
willing to make to the Borrower. The Borrower and the Lender expressly
agree that such calculations are not intended to and shall not
constitute for any purposes:
3.2.16.1 a determination by the Lender of the actual
present or future value of any Collateral;
3.2.16.2 any limitation with respect to the
description of Collateral;
3.2.16.3 any determination by the Lender with respect
to the creditworthiness of Account Debtors or any assumption
by the Lender of any risk concerning such creditworthiness; or
3.2.16.4 any limitation, reduction or diminution of
the Obligations or the security therefor, all as provided in
this Agreement and the other Financing Instruments.
3.3 Inventory Collateral. With respect to all Inventory Collateral, so
long as no Event of Default has occurred, the Borrower may sell items of
Inventory Collateral:
3.3.1 Pricing and Cash Sales. for cash in amounts not less
than the Borrower's published, usual or customary prices, less only
usual and customary discounts for volume sales or prompt payment; or
3.3.2 Credit Terms and Accounts. on credit terms usual and
customary in the business conducted by the Borrower, at prices which
conform to the terms of subsection 3.3.1, above, and under such
circumstances as give rise to Accounts subject to this Agreement.
Any Inventory Collateral which will be acquired with proceeds of the Loans is
described on the Master Exhibit.
3.4 Equipment Collateral. With respect to all Equipment Collateral:
3.4.1 Business Use; Purchase Money Acquisitions. all of the
Equipment Collateral is and will be used by the Borrower in the
ordinary course of its business operations, and the Equipment
Collateral which is being acquired with proceeds of the Loans is
specifically described on the Master Exhibit; and
3.4.2 Fixtures. if any part of the Equipment Collateral is or
will be a Fixture (as defined in the UCC), the same shall be affixed to
the real property at the Notice Address of the Borrower or to the real
property at the Maryland Office or at the Connecticut Office and to
such additional locations as are specifically identified and designated
in the Master Exhibit; and, with respect to all items of Collateral
which are or become Fixtures prior to the perfection of, or in such
circumstances as the interests of any other Person may have priority
over, the security interest granted to the Lender under this Agreement,
the Borrower will, on demand of the Lender, furnish to the Lender such
waivers or disclaimers of any and all interests in and to the
Collateral which could claim or have priority over the interests of the
Lender, in each case in such form and upon such terms as the Lender may
request.
SECTION 4
REPRESENTATIONS, COVENANTS AND WARRANTIES
In addition to such other representations, covenants and warranties as
are contained herein, or elsewhere in the Financing Instruments or as have
otherwise been made to the Lender, the Borrower hereby represents, covenants and
warrants that:
4.1 General Representations, Covenants and Warranties.
4.1.1 Business; Supplemental Information Regarding the
Borrower. BBI is engaged in the business of assaying, processing,
manufacturing, selling, and distributing human blood-based products;
BTRL is engaged in the business of biomedical and biotechnical contract
research and services; NACL is engaged in the business of providing
clinical reference laboratory services; BBI's principal place of
business and chief executive office and mailing address is located at
the Notice Address set forth at the beginning of this Agreement; BTRL's
principal place of business and mailing address is the address of the
Maryland Office and NACL's principal place of business and mailing
address is the address of the Connecticut Office. The Borrower does not
and will not conduct any business under any trade name or trade style
other than the Borrower's legal name or as set forth in the Master
Exhibit. Set forth in the Master Exhibit attached hereto are the names
and addresses of the respective officers and members of the Board of
Directors of each Borrower, the name and title of each officer
authorized to execute the Financial Instruments and thereafter deal
with the Lender on behalf of the Borrower, and locations of all the
Borrower's other places of business or at which the Borrower's
properties may be kept or located, which information is true, accurate
and complete; the Borrower agrees to furnish the Lender with written
notice
within ten (10) days of any changes in such information, or any
additional information necessary to insure that said Master Exhibit
remains true, accurate and complete. Nothing in this subsection 4.1.1
shall be construed to permit any action which is otherwise restricted
or prohibited pursuant to the terms of this Agreement.
4.1.2 Due Organization and Existence; Authorization. Each of
BBI, BTRL and NACL (a) is duly organized, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts, (b) has
adequate corporate power and authority to own its properties and assets
and to carry on its business activities as and where now conducted, (c)
is qualified to do business as a foreign corporation and is in good
standing in each jurisdiction wherein such qualification is necessary,
and where the failure to so qualify would have a material adverse
effect on the business or property of the Borrower, and (d) has the
corporate power and authority to execute and deliver such of the
Financing Instruments as have been executed by it, and to perform the
Financing Instruments in accordance with the terms thereof.
4.1.3 Articles of Organization; Stock; Accurate Records. The
Articles of Organization and all amendments thereto of each of BBI,
BTRL and NACL have been duly filed and are in proper order. All capital
stock issued by BBI, BTRL and NACL and currently outstanding is
properly issued, and all books and records of BBI, BTRL and NACL ,
including but not limited to, its minute book, by-laws and books of
account, are accurate and up-to-date and will be so maintained.
4.1.4 Binding Documents; Violation of Other Agreements. Each
of BBI, BTRL and NACL has taken all steps required by applicable law to
make this Agreement, and each of such Financing Instruments, its legal,
valid and binding obligation enforceable in accordance with its terms,
and neither the execution, delivery nor performance of this Agreement
or any of the Financing Instruments is in violation of any law, the
Articles of Organization, Bylaws or other organizational documents of
it, or of any other agreement or instrument to which it is a party or
by which it or any of its assets is or may be bound, and does not
constitute a default under any of the foregoing, or result in the
creation or imposition of a Lien upon any of its properties or assets
other than that in favor of the Lender.
4.1.5 Title To Assets; Security Interests and Mortgages;
Leases; Royalties; etc. The Borrower has title (and good, clear, record
and marketable title in the case of real property) to all assets
reflected in the financial statements hereinafter referred to and
delivered to the Lender, and to all assets acquired since the date of
said financial statements (other than those assets subsequently
disposed of in the ordinary course of business), free of any Lien
except in favor of the Lender and except for the Permitted
Encumbrances.
4.1.6 Investments. The Borrower has no investment, in equity
or debt, in any Person other than obligations of the United States or
Deposit Accounts.
4.1.7 Litigation; Outstanding Orders. Except as disclosed on
the Master Exhibit attached hereto, there are no actions, suits,
proceedings or investigations pending or, to the knowledge of the
Borrower, any of its agents, servants or employees, threatened against
the Borrower or any of its properties in any court, before any other
tribunal or any federal, state, municipal or other governmental
authority. The Borrower is not in default with respect to any order of
any court, or other tribunal or governmental authority. The execution,
delivery and performance of this Agreement and each of the Financing
Instruments by the Borrower will not constitute a default of any order
of any court, or any other tribunal or governmental authority.
4.1.8 Financial Statements Delivered. The Borrower has
furnished to the Lender its financial statements, including
consolidated balance sheet and statement of profit and loss as at and
for the fiscal years ended December, 1993 and 1994, as audited by
Coopers & Lybrand, LLP. Said financial statements fairly present the
financial position of the Borrower as at the dates thereof and said
statement of profit and loss fairly presents the results of the
operations of the Borrower for the fiscal years indicated, all in
conformity with GAAP consistently applied.
4.1.9 Current Stockholders. Set forth on the Master Exhibit
annexed hereto and made a part hereof are the names and addresses of
each shareholder of the Borrower holding 5% or more of any class of the
outstanding capital stock of the Borrower having ordinary voting power
and the number of fully paid and non-assessable shares held by each.
4.1.10 Other Liabilities; Tax Returns; No Adverse Changes.
Except as may be set forth in the Master Exhibit annexed hereto, (a)
the Borrower has no knowledge of any contingent obligations or
liabilities of the Borrower for taxes or long-term commitments which
are not shown in the balance sheets included in said statements or
noted therein; (b) the Borrower has filed all required tax returns or
extensions therefor and has paid all applicable federal, state and
local taxes shown to be due (other than taxes which may hereafter be
paid without penalty) and the Borrower has no knowledge of any
deficiency or additional assessment in connection therewith for which
no provision has been made on its books; (c) there has been no material
adverse change in the business, properties or condition (financial or
otherwise) of the Borrower since the date of the most recent financial
statement referred to above and (d) the Borrower's Taxpayer
Identification Numbers are 04-2652826 (BBI), 04-3152484 (BTRL) and
04-3196246 (NACL). The Borrower's federal income tax returns have been
prepared and filed for its fiscal year(s) stated in the Master Exhibit.
4.1.11 No Agency Between the Borrower and the Lender. Nothing
herein contained shall be construed to constitute the Borrower as the
Lender's agent for any purpose whatsoever, and the Lender shall not be
responsible or liable for any shortage, discrepancy, damage, loss or
destruction of any part of any Collateral wherever the same may be
located and regardless of the cause thereof other than as a direct and
proximate result of the Lender's actual bad faith or negligence
provided however that a standard of "gross negligence" shall be used
with respect to the Lender's engagement of third parties with respect
to the foregoing. The Lender does not, by anything herein or in any
assignment or otherwise, assume any of the Borrower's obligations under
any contract or agreement assigned to the Lender, and the Lender shall
not be responsible in any way for the performance by the Borrower of
any of the terms and conditions thereof.
4.1.12 Regulation U. The Borrower does not own, nor has any
present intention of acquiring, any "margin security" as defined in
Regulation U (12 C.F.R. Part 221) of the Board of Governors of the
Federal Reserve System (herein called a "margin security"). None of the
proceeds of the Loans will be used, directly or indirectly, for the
purpose of purchasing or carrying any margin security or for the
purpose of reducing or retiring any indebtedness which was originally
incurred to purchase or carry a margin security or for any other
purpose which might constitute this transaction a "purpose credit"
within the meaning of said Regulation U.
4.1.13 ERISA. The Borrower has not incurred any material
accumulated funding deficiency within the meaning of the Employee
Retirement Income Security Act of 1974, as amended, or incurred any
material liability to the Pension Benefit Guaranty Corporation
established under such Act (or any successor thereto under such Act),
nor does the Borrower foresee that it will incur any such material
accumulated funding deficiency or material liability in the future, in
connection with any employee benefit plan established or maintained by
the Borrower. The making of the Loans will not involve any prohibited
transaction within the meaning of the Employee Retirement Income
Security Act of 1974 or Section 4975 of the Internal Revenue Code, as
amended. There are no facts known to the Borrower which create, or in
the future may (so far as the Borrower can now foresee) create, any
withdrawal or other liability of the Borrower under the Multi-employer
Pension Plan Amendment Act of 1980.
4.1.14 Necessary Permits and Licenses. The Borrower possesses
all franchises, rights, certificates, variances, licenses, permits and
other authorizations, consents and approvals from all administrative,
regulatory or governmental bodies and all patents, trademarks, service
marks, trade names, copyrights, licenses and other rights, in each
case, free from burdensome restrictions, that are necessary in any
material respect for the ownership, maintenance and operation of its
business, properties and assets, and the Borrower is not in violation
of any thereof in any material respect.
4.1.15 Governmental Approvals Not Required. Neither the nature
of the Borrower nor its business or property, nor any relationship
between or among the Borrower and any other Person is such as to
require any consent, authorization, waiver, approval or other action by
or any notice to or filing with any court or administrative, regulatory
or governmental body, including, without limitation, government
agencies, offices and instrumentalities with which the Borrower has
contracts, in connection with the execution and delivery by the
Borrower of this Agreement or the other Financing Instruments or the
fulfillment of or compliance by the Borrower with, or the enforcement
by the Lender of, the terms and provisions hereof or thereof.
4.1.16 Adequate Financing. The Borrower has no reason to
believe that the proceeds of the Loans, together with such other
sources of funds as are now directly and immediately available to the
Borrower, will not be adequate to finance its business operations for
the terms of the Amended and Restated Term Loan, the $200,000 Term Loan
and the $350,000 Term Loan.
4.1.17 No Event of Default. As of the date hereof, there does
not exist any Event of Default or any event which, but for the giving
of notice or the lapse of time or both, would constitute an Event of
Default under this Agreement, any of the Financing Instruments or under
the provisions of any instrument evidencing any indebtedness of the
Borrower to any other Person.
4.1.18 Compliance with Leases. The Borrower enjoys peaceful
and undisturbed possession as lessee under all leases necessary in any
material respect for the operation of its business or of its properties
and assets, none of which contains any provisions which might
materially affect or impair the operation of its business or such
properties and assets. All such leases are valid and subsisting and are
in full force and effect.
4.1.19 President and Chief Executive Officer; Major
Stockholder. RichardET. Schumacher shall continue to perform the
traditional functions of President and chief executive officer of the
Borrower and shall continue to exercise the traditional authority of
such officer. In addition, Richard T. Schumacher shall continue to own
and exercise complete control over not less than twenty-five percent
(25%) of the outstanding capital stock of BBI; provided however that
such limitation shall not apply in the event that BBI offers stock in
BBI pursuant to an initial public offering or private placement to
investors. In addition, while any Obligations remain outstanding, BBI
shall continue to own one hundred percent (100%) of the issued and
outstanding capital stock of BTRL and NACL.
4.1.20 Compliance with Certain Environmental Laws. Neither the
Borrower, nor any Person for whose conduct the Borrower is responsible,
owns, occupies or operates, or has ever owned, occupied or operated a
site or vessel on which has been stored any hazardous material or oil,
without compliance with all statutes, regulations, ordinances,
directives, and orders of every federal, state, municipal and other
governmental authority which has or claims jurisdiction relative
thereto (the terms "site", "vessel", and "hazardous material",
respectively, as used herein include the definitions of those terms in
Massachusetts General Laws, Ch. 2lE); neither the Borrower, nor any
Person for whose conduct the Borrower is responsible, has ever disposed
of, transported, or arranged for the transport of any hazardous
material or oil without compliance with all such statutes, regulations,
ordinances, directives, and orders; and neither the Borrower, nor any
Person for whose conduct the Borrower is responsible, has ever been
legally responsible for any release or threat of release of any
hazardous material or oil; received notification of any potential or
known release or threat of release of any hazardous material or oil
from any site or vessel owned, occupied or operated by the Borrower, or
any Person for whose conduct the Borrower is responsible, or of the
incurrence of any expense or loss in connection with the assessment,
containment, or removal of any release or threat of release of any
hazardous material or oil from any such site or vessel.
4.1.21 Recent Changes of Name or Structure. Except as
reflected in the Master Exhibit with respect to the corporate name of
NACL, the Borrower has not within the preceding four (4) months changed
its name, identity or corporate structure and has not previously had a
principal place of business or chief executive office located outside
the Commonwealth of Massachusetts; and no Collateral has been brought
into this Commonwealth within the past four (4) months subject to a
security interest in favor of a third party perfected in any manner
under the law of the jurisdiction from which said Collateral was
removed.
4.1.22 Payment of Wages. The Borrower represents and warrants
that all currently owed wages to employees have been paid, and agrees
and covenants that all wages to employees will be paid as and when due.
4.2 Certain Affirmative Covenants.
4.2.1 Payment of Obligations. The Borrower will duly and
punctually pay or cause to be paid, and perform or observe, or cause to
be performed or observed, as the case may be, all of the Obligations
and will pay and perform or observe, or cause to be paid, performed or
observed all other duties or liabilities of any kind of the Borrower to
the Lender, under or as provided in the Financing Instruments, or
otherwise by agreement or applicable law.
4.2.2 Books and Records. The Borrower will maintain its
financial books and records in an accurate, up-to-date, complete and
standardized fashion in accordance with GAAP consistently applied, and
in accordance with any state or federal regulatory requirements
applicable to the Borrower's business or activities.
4.2.3 Inspection. The Borrower will, at all reasonable times
during regular business hours, and upon reasonable advance notice, make
available in its offices, and shall allow the Lender, at the Lender's
expense, access to, all of the Borrower's books and records for
inspection, audit, examination and copying by the Lender and the
Lender's representatives, and the Borrower will, at all reasonable
times, permit entry by the Lender upon the Borrower's premises for
purpose of inspection of its properties by the Lender and the Lender's
representatives and agents, including but not limited to the Collateral
or any portion thereof.
4.2.4 Commercial Purposes. All advances under the Loans shall
be used exclusively for the Borrower's business purposes and operations
and shall not in any respect be used for personal, family or household
purposes.
4.2.5 Notice of Adverse Matters. The Borrower will,
immediately upon learning thereof, report to Lender all matters
materially adversely affecting the Borrower's business or financial
condition or properties, including, without limitation, any damage or
destruction of any material amount of the Borrower's properties
(whether or not constituting Collateral) by fire or other casualty,
whether or not insured against.
4.2.6 Principal Lending Business. The Borrower will use the
Lender as its sole lender of account and depository for BBI's main
operating accounts; provided however that BTRL and NACL may maintain
checking accounts at banks other than the Lender for purposes of
handling their accounts payable and payroll.
4.2.7 Maintenance of Corporate Existence; Compliance with
Laws. The Borrower will maintain and keep in full force its corporate
existence and good standing and comply with all laws, regulations and
orders of the United States and of any state or states, and other
political subdivision thereof, and of any other governmental authority
which may have jurisdiction over the Borrower or its properties or
businesses.
4.2.8 Payment of Taxes and Filing of Returns. The Borrower
will pay when due all taxes, including without limitation all real and
personal property taxes, assessments and charges and all franchise,
income, unemployment, old age benefit, withholding, sales and other
taxes assessed against it or any of its properties, and otherwise
payable by it, at such times and in such manner as is necessary to
prevent any penalty from accruing or any Lien or charge from attaching
to its properties. The Borrower shall prepare and file when due all
federal, state and local tax, informational and other governmental
returns, reports, extensions, and filings, as may be applicable to the
Borrower. The provisions of this subsection, however, shall not
preclude the Borrower from contesting in good faith and by expeditious
process any such tax, and the Borrower shall not be in default under
this subsection by reason of the existence of a Lien for taxes not then
due, all provided that: (a) an adequate reserve therefor is maintained
on the books of the Borrower; (b) the Lender has been notified in
writing by the Borrower of such contest; (c) the enforcement of any and
all Liens for non-payment of such taxes is effectively stayed and the
Lender is satisfied, in its judgment, that such contest or dispute does
not materially affect the existence, perfection or priority of the
Lender's security interest in any of the Collateral; (d) the Lender is
reasonably satisfied that the Borrower has reasonable basis for such
contest or dispute; and (e) the Borrower shall immediately pay the full
amount of such charges and claims in the event the Borrower's contest
or dispute is unsuccessful.
4.2.9 Maintenance of Properties. The Borrower will safeguard,
protect and preserve the Collateral for the benefit of the Lender, will
keep the Collateral free from any adverse lien, security interest or
encumbrance taking priority over the security interest of the Lender
(other than Permitted Encumbrances), will keep all tangible property
constituting part of the Collateral in good working order and repair,
will preserve all beneficial contract rights, will take commercially
reasonable steps to collect all Accounts, and will not waste or destroy
the Collateral or any part thereof; and the Borrower will otherwise
preserve, maintain and protect its rights and keep its properties and
assets in good repair, working order and condition, and capable of
identification, and make (or cause to be made) all needful and proper
repairs or renewals, replacements, additions and improvements thereto,
and shall use its assets only in the ordinary course of business.
4.2.10 Collection Costs; Legal Fees; etc. The Borrower agrees
to pay, and to reimburse the Lender, on demand, for all fees, costs and
expenses (including, without limitation, attorneys' reasonable fees and
expenses) incurred or paid by the Lender in connection with the
preparation, negotiation, interpretation or amendment of this
Agreement, and of any or all of the Financing Instruments, and of any
other instrument, agreement or document executed and delivered pursuant
thereto or in connection therewith, and for any and all such fees,
costs and expenses incurred in connection with collection of the
Obligations or the enforcement of the Lender's rights and remedies
under this Agreement or any of the Financing Instruments or otherwise
against the Borrower, or in the administration, supervision, protection
of or realization on any Collateral held as security for any
Obligation, or in the defense of any action against the Lender with
respect to the Lender's rights or remedies in respect of any
Obligation; and all of the foregoing fees, costs, and expenses shall be
part of the Obligations secured by this Agreement, and the other
Financing Instruments.
4.2.11 Insurance. The Borrower will maintain insurance at all
times with financially sound and reputable companies as are reasonably
satisfactory to the Lender, in such amounts and against such risks as
are customarily insured against by businesses operating in a similar
line of business in a similar area, and consistent with sound business
practice, in no event less than the greater of (a) the amount required
to avoid coinsurance or (b) the total aggregate outstanding principal
indebtedness owing by the Borrower to the Lender, including without
limitation casualty insurance covering the Collateral and other
property of the Borrower against the hazards of fire, flood, sprinkler
leakage, burglary, theft, pilferage, loss in transit, those hazards
covered by extended coverage, and such other hazards as the Lender may
require, all such insurance to be in such form, for such periods and
with such companies as shall be reasonably acceptable to the Lender.
All premiums thereon shall be paid by the Borrower and if the Borrower
fails to do so, the Lender may at its option (but without obligation)
procure such insurance and charge the cost to the Borrower's Line of
Credit account; provided, however, that any such payment by the Lender
shall not constitute satisfaction of the Borrower's obligations with
respect to payment hereunder, or a waiver by the Lender of any Event of
Default with respect to such non-payment. Without limiting the
generality of the foregoing, all such insurance policies shall provide,
in form and substance satisfactory to the Lender, that (i) any loss
thereunder shall be payable to the Lender as loss payee (first to the
Lender and then to the Borrower, as their interests may appear), (ii)
any such payment to the Lender shall be made by an instrument to the
Lender alone and not to the Borrower and Lender jointly and (iii) no
cancellation or modification of such policy shall be effective without
at least thirty (30) days prior written notice to the Lender. If any
insurance losses are paid by check, draft or other instrument payable
to the Borrower and the Lender jointly, the Lender may endorse the
Borrower's name thereon and do such other things as the Lender may deem
advisable to reduce the same to cash. All loss recoveries received by
the Lender upon any such insurance shall be applied to the Obligations
in such order as the Lender in its sole discretion may determine,
unless otherwise expressly consented to in writing by the Lender. Any
surplus shall be paid by the Lender to the Borrower or applied as may
be otherwise required by law. Certificates of insurance of, and true
and complete copies of, and upon request the originals of, all such
casualty insurance policies and endorsements thereto shall be delivered
to the Lender contemporaneously with the execution of this Agreement.
Annually thereafter, the Borrower shall deliver certificates of such
insurance coverages to the Lender, along with satisfactory evidence of
general liability, products liability, workmens compensation and other
insurance coverage, in form and substance satisfactory to the Lender.
The Borrower shall advise the Lender of each claim made by the Borrower
under any policy of insurance which covers the Collateral and will
permit the Lender, to the exclusion of the Borrower, at the Lender's
option in each instance, to conduct the adjustment of each such claim.
The Borrower hereby appoints the Lender as the Borrower's attorney to
obtain, adjust, settle, and cancel any insurance described in this
section and to endorse in favor of the Lender any and all drafts and
other instruments with respect to such insurance. The foregoing
appointment being coupled with an interest is irrevocable until the
within Agreement is terminated by a written instrument executed by a
duly authorized officer of the Lender. The Lender shall not be liable
on account of any exercise pursuant to said power except for any
exercise in actual wilful bad faith. The Lender may apply any proceeds
of such insurance against the Obligations at any time, whether or not
such have matured, in such order of application as the Lender may
determine.
4.2.12 Further Agreements; Compliance With Other Agreements;
Payment of Other Obligations; Tax Returns; Notice of Litigation and of
Events of Default.
The Borrower will:
4.2.12.1 from time to time execute and deliver or
cause to be executed and delivered, and furnish to the Lender
such other agreements, documents, instruments or statements,
and do or cause to be done such other acts as the Lender may
reasonably request, to effect, confirm and secure to the
Lender all rights and advantages intended by this Agreement
and the Financing Instruments;
4.2.12.2 comply with all leases, and with all other
agreements to which the Borrower is a party if a default under
any such agreement could materially adversely affect the
Collateral;
4.2.12.3 generally pay all other debts and
liabilities as they become due (except for liabilities, other
than the Obligations, being contested in good faith for which
adequate provision has been made on the books of the Borrower,
provided that all enforcement proceedings are effectively
stayed pending such contest) and not permit the acceleration
of any indebtedness owed by the Borrower to any Person; and
4.2.12.4 give written notice to the Lender within ten
(10) days of the occurrence thereof of any litigation filed by
or against the Borrower which claims in connection therewith
exceed, either individually or when aggregated with other
existing litigation filed by or against the Borrower, the sum
of Twenty-Five Thousand Dollars ($25,000), and the occurrence
or existence of any Event of Default hereunder, or the
existence of any situation or state of facts which, either
with notice or lapse of time, or both would constitute an
Event of Default hereunder, and the action the Borrower has
taken or proposes to take with respect thereto, all provided
that the receipt of such notice shall not limit or impair, in
any way the Lender's rights hereunder.
4.2.13 Certain Environmental Matters. The Borrower shall:
4.2.13.1 not store (except in compliance with all
laws, ordinances, and regulations pertaining thereto), or
dispose of any hazardous material or oil on any site or vessel
owned, occupied, or operated by the Borrower or by any Person
for whose conduct the Borrower is responsible;
4.2.13.2 neither directly nor indirectly transport or
arrange for the transport of any hazardous material or oil
except in compliance with all laws, ordinances and regulations
pertaining thereto;
4.2.13.3 provide the Lender with written notice: (a)
upon the Borrower's obtaining knowledge of any potential or
known release, or threat of release, in violation of any
federal, state or local law, ordinance or regulation
pertaining thereto, of any hazardous material or oil at or
from any site or vessel owned, occupied or operated by the
Borrower, or by any Person for whose conduct the Borrower is
responsible or whose liability may result in any lien on any
Collateral; (b) upon the Borrower's receipt of any notice to
such effect from any federal, state or other governmental
authority; or (c) upon the Borrower's obtaining knowledge of
any incurrence of any expense or loss by such governmental
authority in connection with the assessment, containment or
removal of any hazardous material or oil for which expense or
loss the Borrower may be liable or for which expense a Lien
may be imposed on any Collateral.
4.2.14 Changes in Master Exhibit. The Borrower shall promptly
notify the Lender in writing of any changes in or additions to the
information set forth in the Master Exhibit.
4.2.15 Governmental Approvals. To the extent that the Borrower
has entered into, or enters into in the future, any contract subject to
the provisions of the Assignment of Claims Act of 1940, as amended, 31
U.S.C. 3727 (the "Assignment of Claims Act"), the Borrower covenants
and agrees to promptly execute and deliver to Lender a Collateral
Assignment for each such contract in the form of the Collateral
Assignment annexed hereto as Exhibit 4.2.15(A) and to complete, execute
and send by certified mail return receipt requested a Notice of
Assignment of Contract (the "Notice") in the form of the Notice annexed
hereto as Exhibit 4.2.15(B) to (a) the Contracting Officer or the
agency head; (b) surety on any bond applicable to the contract; and (c)
the Disbursing officer designated in the contract to make payment.
Furthermore, the Borrower agrees to seek acknowledgement of each such
Notice from the addressees thereof as provided in the form of Notice in
Exhibit 4.2.15(B) and to transmit the same to the Lender upon receipt
thereof.
4.2.16 Key Man Life Insurance. So long as any of the
Obligations remain outstanding, the Borrower agrees to maintain life
insurance on the life of Richard T. Schumacher providing for a net
payment in cash upon the death of said Richard T. Schumacher in an
amount of not less than Two Million Dollars ($2,000,000), and the
Borrower shall pledge or collaterally assign such policy or policies to
the Lender and, at all times, maintain such pledge or collateral
assignment. Such insurance coverage shall include a disability rider in
the full amount of such coverage.
4.3 General Negative Covenants.
4.3.1 Other Debt. The Borrower will not issue any evidence of
indebtedness or create, or incur, assume, guarantee, become
contingently liable for or suffer to exist, any indebtedness in excess
of One Hundred Fifty Thousand Dollars ($150,000) (other than
indebtedness to the Lender), without the prior written consent of the
Lender which consent will not be unreasonably withheld or delayed;
provided, however, that the Borrower may incur liabilities which are
incurred or arise in the ordinary course of the Borrower's business
(other than liabilities incurred or arising with respect to money
borrowed or for the purchase or lease of assets) without the prior
written consent of the Lender. The Borrower shall not enter into or
participate in any agreement, arrangement or transaction with any
Person without the prior written consent of the Lender, if the effect
of such agreement, arrangement or transaction has, or could reasonably
be expected in the future to have, the effect of (i) rendering the
Borrower either primarily or contingently liable for any indebtedness
or other obligation of any Person (ii) transferring any asset of the
Borrower to or for the benefit of any Person (except as may be
otherwise expressly permitted by this Agreement); or (iii) subjecting
any of the Collateral to any lien in favor of any third party (other
than Permitted Encumbrances), including but not limited to any creditor
or obligee of any Person. Notwithstanding the foregoing, the Borrower
shall be permitted to grant purchase money security interests for the
purchase of assets otherwise permitted hereunder.
4.3.2 Payment of Dividends. The Borrower will not pay any
dividends either in cash or kind on any class of its stock nor make any
distribution on account of their stock, nor redeem, purchase or
otherwise acquire directly or indirectly any of their stock, without
prior written notice to and written consent of the Lender except in
compliance with this subparagraph 4.3.2. During any period that the
Borrower is a "Subchapter S" corporation pursuant to the IRC, the
Borrower may pay dividends to its shareholders in the amounts necessary
to permit such shareholders to pay the portion of their federal and
state income taxes which is directly related to the Borrower's net
income attributable to such shareholders.
4.3.3 Loans By the Borrower. The Borrower will not make any
loan or advances to any Person, including, without limitation, its
officers and employees.
4.3.4 Investments. The Borrower will not invest in equity or
debt of any Person other than obligations of the United States or
Deposit Accounts.
4.3.5 Mergers, etc. The Borrower will not merge or consolidate
or be merged or consolidated with or into any other Person, or be a
party to any reorganization, change in legal structure or any sale,
lease, transfer or other disposition of all or substantially all of its
assets.
4.3.6 Sales of Assets. The Borrower will not sell, lease, or
dispose of any of its assets except for sales of Inventory in the
ordinary and usual course of its business, and for Equipment no longer
needed in the operation of its business, so long as the Borrower
receives therefor a sum substantially equal to such Equipment's fair
value and such sum is immediately paid to Lender to be applied to the
Loan.
4.3.7 No Liens; Permitted Encumbrances. The Borrower will not
grant or assume or suffer to exist any Lien with respect to any of its
assets or property, tangible or intangible, whether now owned or
hereafter acquired, except for Liens granted to the Lender pursuant to
this Agreement, and except for the following (collectively, the
"Permitted Encumbrances"): (a) liens in respect of taxes, fees,
assessments and other governmental charges not yet due and payable, or
with respect to which the validity thereof is currently being contested
in good faith by appropriate proceedings in accordance with the
provisions of this Agreement; (b) landlord's liens in respect of rent
not in default or Liens in respect of pledges or deposits under
worker's compensation, unemployment insurance, social security laws or
similar legislation or in connection with appeal and similar bonds
incidental to litigation, mechanics', laborers', and materialmen's and
similar liens, if the obligations secured by such liens are not then
delinquent, and liens securing statutory obligations incidental to the
conduct of the business of the Borrower which do not in the aggregate
materially detract from the value of the property of the Borrower or
materially impair the use thereof in the operation of their respective
businesses; (c) judgment liens which shall not have been in existence
for a period longer than thirty (30) days after the creation thereof
(provided no foreclosure or execution action shall have been commenced)
or if a stay of execution shall have been obtained for a period longer
than thirty days after the expiration of such stay (provided no
foreclosure or execution action shall have yet been commenced) or
judgment liens for which the Borrower has obtained a bond in favor of
the judgment holder in the full amount of the lien and which bond is
otherwise satisfactory to Lender; (d) the security interests, mortgages
or Liens, if any, described in the Master Exhibit annexed hereto; and
(e) Liens otherwise permitted pursuant to Section 4.3.1 hereof.
4.3.8 Continuance of Business. The Borrower will not engage in
any business other than the businesses in which it is currently engaged
or a business reasonably allied thereto, and the Borrower will continue
to conduct and operate its business actively and in good faith.
SECTION 5
FINANCIAL AND REPORTING COVENANTS
5.1 Reporting Covenants. The Borrower agrees to provide the Lender with
the reports, statements, certificates and information set forth in this Section
5, all of which are referred to as the "Reporting Requirements".
5.1.1 Quarterly Financial Statements. The Borrower will
furnish to the Lender, within forty-five (45) days after the close of
each calendar quarter of its fiscal year, consolidated and
consolidating (except
the last in each fiscal year) financial statements, including a balance
sheet, and a statement of profit and loss reflecting the financial
condition of the Borrower at the end of such period and the results of
its operations for such period and for the period from the beginning of
the current fiscal year to the end of such period, in comparative form
with figures for the corresponding periods of the previous fiscal year
accompanied by a certificate by the Borrower's chief financial officer
or President to the effect that such financial statements fairly
present such financial condition and results of operations as of the
end of and during such period, in accordance with GAAP consistently
applied, subject only to year-end adjustments and audit.
5.1.2 Annual Financial Statements. The Borrower will furnish
the Lender, within one hundred twenty (120) days after the close of
each fiscal year, consolidated and consolidating financial statements,
including a balance sheet, statement of profit and loss, statements of
cash flow, and a statement of changes in shareholders equity,
reflecting the financial condition of the Borrower at the end of such
fiscal year and the results of its operations during such fiscal year
(in each case setting forth in comparative form the corresponding
figures for the preceding year) audited and reported upon (in form
generally recognized as "unqualified") by Coopers & Lybrand, LLP, or
such other independent certified public accountant satisfactory to the
Lender, prepared in accordance with GAAP, applied consistently in the
preparation thereof and with prior periods, and accompanied by a
certificate by the Borrower's chief financial officer or president that
such financial statements fairly present such financial condition and
results of operations as of the end of and during such period; together
with, upon request of the Lender, an opinion of such certified public
accountant that to its knowledge there has occurred no event which
constitutes, or which with the lapse of time or giving of notice or
both would constitute an Event of Default hereunder, or, if the
contrary appears to be true, a statement of such Event of Default and
the nature thereof.
5.1.3 Monthly and Weekly Reports. The Borrower shall also
furnish to the Lender monthly, within fifteen (15) days of the last day
of each month hereafter:
5.1.3.1 an accounts receivable agings and collections
report in sufficient detail to allow Lender to determine if
the Borrower is in compliance with the Borrowing Base;
5.1.3.2 a Borrowing Certificate detailing the
Eligible Accounts and Eligible Inventory then available to
support the Line of Credit in accordance with this Agreement;
and
5.1.3.3 an Inventory breakdown report, with
certificates of the Borrower's President or chief financial
officer as to the values of the Borrower's Inventory, each in
form satisfactory to Lender, together with evidence of
shipments or deliveries and such other information regarding
Inventory as Lender may request.
The Borrower shall also furnish to the Lender weekly, within two (2)
business days of the end of each week, copies of its weekly sales and
cash journals.
All of such reports, to the extent governed by GAAP, shall be
prepared in accordance with GAAP, applied consistently in the
preparation thereof and with prior periods.
5.1.4 Officer's Certificates. The Borrower will, upon request
of the Lender but in any event within thirty (30) days of the end of
each calendar quarter, deliver to the Lender an officer's certificate
signed by its President or chief financial officer certifying that: (a)
the signer has reviewed the relevant terms of the Financing Instruments
and is familiar with the operations and financial condition of the
Borrower; (b) there is in existence no Event of Default described in
any of the Financing Instruments and no event which, with the giving of
notice or lapse of time, or both, would result in the occurrence of an
Event of Default; or (c) if there is a continuing Event of Default or a
continuing condition which, with the giving of notice or lapse of time,
or both, would result in the occurrence of an Event of Default, the
nature and period thereof and the action which has been taken, is being
taken or is proposed to be taken with respect thereto, provided that no
such notice, action or proposed action shall affect Lender's rights
hereunder with respect to any Event of Default.
5.1.5 Other Information. In addition to the foregoing, the
Borrower will furnish the Lender from time to time with such financial
information and statements as the Lender may reasonably request, and,
upon request of the Lender, with copies of all financial statements and
financial reports that the Borrower sends or makes available to its
members of its Board of Directors or to any governmental authority,
together with copies of all management letters of substance and other
reports of substance submitted to the Borrower by its independent
accountants in connection with any annual or interim audit; and, upon
request of the Lender, the Borrower will authorize and direct all
accountants and auditors to exhibit and deliver copies of any financial
statements, trial balances or other accounting records of any sort, and
to disclose to the Lender any information they may have concerning the
Borrower's financial or business condition.
5.2 Financial Covenants.
The Borrower shall maintain and observe all of the following financial
standards, in each case, determined and classified in accordance with GAAP
applied on a consistent basis at the applicable dates or during the applicable
time periods indicated in the following table:
====================================================================================================================
APPLICABLE DATE OR TIME APPLICABLE RATIOS
FINANCIAL STANDARDS PERIOD OR MONETARY REQUIREMENTS
- --------------------------------------------------------------------------------------------------------------------
5.2.1: Consolidated Debt Service Quarterly, at the end of At least 1.25:1 (rounded to nearest hundredth)
Ratio each quarter on an average four- quarter rolling basis
- --------------------------------------------------------------------------------------------------------------------
5.2.2: Consolidated Total Debt: Quarterly Not to exceed 3.0:1 (in each case rounded to the
Tangible Net Worth Ratio nearest hundredth)
- --------------------------------------------------------------------------------------------------------------------
5.2.3: Fixed Asset Expenditures Annually For 1995, the Borrower will not make
Expenditures (as hereinafter defined) for the
purchase of fixed assets from the proceeds of
any debt financing (including the Line of Credit
or the other Loans) in excess of an aggregate of
$600,000; provided however that the Borrower may
$150,000 for such Expenditures. Thereafter, the
Borrower will not make Expenditures for the
purchase of fixed assets from the proceeds of
the Line of Credit in any fiscal year in excess
of an aggregate of $150,000 per year, without
the prior written consent of the Lender, which
consent will not be unreasonably withheld or
delayed; provided however that this covenant
shall not reduce the level of indebtedness of
$150,000 which is permitted to be incurred by
the Borrower pursuant to subsection 4.3.1
hereof. This covenant shall be reviewed
annually by the Lender and any change therein
shall be determined by the Lender by notice to
the Borrower.
=====================================================================================================================
3.3.6 As used in this Agreement:
(a) "Total Debt" means the aggregate of all liabilities of the
Borrower for money borrowed, incurred from any source and in any manner
whatsoever, all in accordance with GAAP, including all subordinated
debt, plus the capitalization of all obligations on leases of real and
personal property;
(b) "Tangible Net Worth" means the aggregate tangible assets
of the Borrower after excluding the book value of all Intangible
Assets, minus the amount of aggregate liabilities, including all
deferred income taxes, and "Intangible Assets" shall include all
goodwill, organizational expense, licenses, patents, trademarks,
tradenames, copyrights, capitalized research and development expenses,
deferred charges, and all other intangible assets as determined in
accordance with GAAP consistently applied);
(c) "Consolidated Debt Service Ratio" means Adjusted Operating
Cash Flow (as described on Exhibit 5.2.1 attached hereto) divided by
Total Debt Service (as described on Exhibit 5.2.1 attached hereto).
(d) "Expenditures" shall refer to entire purchase price of any
fixed asset in the event of purchase, and the aggregate rental over the
entire rental period in the case of a lease. The acquisition of any
fixed asset under a lease shall be deemed a purchase of a fixed asset.
3.3.6 Computation According to GAAP. All of the terms used in
the foregoing financial covenants, except to the extent otherwise
specifically defined herein, and all computations made under the
foregoing covenants, shall in all respects be governed by and performed
in accordance with GAAP consistently applied.
SECTION 6
EVENTS OF DEFAULT
Notwithstanding any provision to the contrary in any instrument
evidencing any Obligation, the occurrence of any one or more of the following
shall constitute and mean an "Event of Default" under this Agreement:
6.1 Any statement, report, certificate, representation or warranty,
made or furnished by the Borrower in, or in connection with the execution and
delivery of this Agreement or any of the Financing Instruments, or in compliance
with the provisions of this Agreement or any of the Financing Instruments, or
otherwise furnished to the Lender at any time, shall prove to have been false or
erroneous when made in any material respect, or omits or fails to state a
material fact necessary in order to make the statements contained therein or
herein not misleading;
6.2 The Borrower shall fail to make payment of the principal or
interest on the Loans when and as due;
6.3 The Borrower shall fail to make payment of any other Obligation
within fifteen (15) days of the date when and as due;
6.4 The Borrower shall fail to perform, observe, comply with or satisfy
any covenant, agreement or condition contained in this Agreement (other than
payment of any Obligation) not cured within thirty (30) days of the earlier of
(i) notice by the Lender to the Borrower or (ii) actual knowledge by the
Borrower of the occurrence thereof, plus such additional time as may be required
to cure such default because of delays beyond the Borrower's control, if such
default is susceptible of being cured and if the Borrower is acting in good
faith and is making diligent efforts to cure such default; provided, however,
that such cure period shall not exceed the aggregate of ninety (90) days and
shall not apply to: (a) any transfer or voluntary encumbrance of assets
(including Collateral); (b) any failure with respect to any requirement of the
Borrower to give notice to the Lender as provided herein; (c) the Reporting
Requirements; or (d) any event which is otherwise an Event of Default pursuant
to any other subsections of this Section 6; and such cure period shall run
concurrently with, and not in addition to, any and all applicable grace or cure
periods contained in any of the other Financing Instruments;
6.5 The Borrower shall default in payment of (a) any obligations under
the lease between BBI and C.W.B. Realty Trust concerning the premises from which
the Borrower operates its business; or (b) any obligation under any lease which
default could materially adversely affect the Collateral or the business
operations of the Borrower; or (c) any obligation or indebtedness to any other
Person at any time outstanding, continued for a period sufficient to cause the
acceleration of the maturity of such obligation or indebtedness (whether or not
such obligation or indebtedness is actually accelerated) and such acceleration
could materially adversely affect the Collateral or the business operations of
the Borrower;
6.6 Failure, generally, of the Borrower to pay its debts when due and
such failure could materially adversely affect the Collateral or the business
operations of the Borrower; or the taking of possession, custody or control of,
or the attachment by judicial process of, or issuance of an injunction against,
or creation of any other Lien (other than in favor of the Lender) upon, any part
of the Borrower's assets by any Person, which action is not dissolved within
thirty (30) days;
6.7 The Borrower:
6.7.1 files a voluntary petition in bankruptcy (which term
includes any action under Title 11 of the United States Code entitled
"Bankruptcy" and commonly referred to as the "Bankruptcy Code"); or
6.7.2 is adjudicated a bankrupt or insolvent; or
6.7.3 files any petition or answers seeking or acquiescing in
any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief for itself under any law
relating to bankruptcy, insolvency or other relief for debtors; or
6.7.4 seeks or consents to or acquiesces in the appointment of
any trustee, receiver, master or liquidator (or other similar official)
of itself or of all or any substantial part of its property; or
6.7.5 makes any general assignment for the benefit of
creditors; or
6.7.6 admits in writing to its general inability to pay its
debts as they become due;
6.8 Commencement of any bankruptcy, insolvency, or other creditor's
relief proceedings against, or entry by a court of competent jurisdiction of any
order, judgment or decree approving a petition filed against the Borrower,
seeking any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any present or future federal or state law
or regulation relating to bankruptcy, insolvency, or other relief for debtors,
which proceeding, order, judgment or decree remains unvacated or unstated for an
aggregate of thirty (30) days, whether or not consecutive, from the date of
entry thereof;
6.9 A material portion of the Borrower's assets shall be damaged by
fire or other casualty, the restoration or replacement cost of which damage
exceeds, in the aggregate, the amount of insurance proceeds readily available
(less applicable deductibles and plus capital in an amount which, in Lender's
sole discretion (a) is available for such purposes and (b) expenditure of such
capital for such purposes is appropriate under the circumstances) for such
restoration or replacement;
6.10 The issuance or existence of any judgment or judgments against the
Borrower by any court of competent jurisdiction, or other governmental authority
of competent jurisdiction, aggregating in excess of One Hundred Thousand Dollars
($100,000) in any fiscal year, and not covered by insurance, not paid within
thirty (30) days of the date thereof;
6.11 The loss, suspension or revocation of any governmental license
required or necessary in connection with the operation of the Borrower's
business;
6.12 The termination or revocation of any guaranty given by any
Guarantor to guarantee payment of any of the Obligations;
6.13 Service of any process upon the Lender seeking to attach by means
of trustee process any funds of the Borrower or of any Affiliate on deposit with
Lender, which attachment or process is not dissolved within thirty (30) days; or
6.14 The occurrence of any change in the Borrower's condition or
affairs (financial or otherwise) that, in the Lender's reasonable opinion,
impairs the Lender's security or materially increases the Lender's risk under
this Agreement or the Financing Instruments, or the occurrence of any event or
circumstance with respect to the Borrower such that the Lender reasonably deems
itself insecure.
SECTION 7
REMEDIES
7.1 General Remedies. In addition to and without in any way limiting
any other rights and remedies available to the Lender under this Agreement prior
to an Event of Default, or any other rights and remedies available to the Lender
(whether prior to or after an Event of Default) under any of the Financing
Instruments or under applicable law or in equity, upon and at any time or times
after the occurrence of any Event of Default hereunder:
7.1.1 the Lender may declare and cause all or any portion of
the Obligations to be immediately due and payable;
7.1.2 the Lender may decline to honor the credit of the
Borrower or may refuse to make further advances to the Borrower;
7.1.3 The Lender may collect the Receivables Collateral with
or without taking possession of the Collateral;
7.1.4 the Lender shall be entitled to immediate possession of
the Collateral or any portion or portions thereof and may enter upon
the Borrower's premises to take possession thereof; may require the
Borrower to assemble the Collateral and make it available to the Lender
at a place to be designated by the Lender which is reasonably
convenient to both parties; and/or may require the Borrower to deliver
all books, records and accounts relating to the Collateral to the
Lender;
7.1.5 the Lender may enter upon, occupy, and use any premises
owned or occupied by the Borrower, and may exclude the Borrower from
such premises or portion thereof as may have been so entered upon,
occupied, or used by the Lender. The Lender shall not be required to
remove any of the Collateral from any such premises upon the Lender's
taking possession thereof, and may render any Collateral unusable to
the Borrower. In no event shall the Lender be liable to the Borrower
for use or occupancy by the Lender of any premises pursuant to this
Agreement except for claims arising out of the Lender's gross
negligence, willful misconduct or bad faith, nor for any charge (such
as wages for the Borrower's employees and utilities) incurred in
connection with the Lender's exercise of the Lender's rights and
remedies;
7.1.6 the Lender may take such steps as it deems necessary to
protect the Lender's interest in and to preserve the Collateral and the
Borrower agrees to cooperate fully with all of Lender's efforts to
preserve, and will take such actions as the Lender shall direct to
preserve, the Collateral;
7.1.7 the Lender shall have the rights and remedies of a
secured party under the UCC and other applicable laws, the choice and
manner of exercise of any right or remedy being in the Lender's sole
discretion; and pursuant thereto the Lender shall have the right to
foreclose the security interest granted in any Collateral by any
available judicial procedure and to take possession of and sell any or
all of the Collateral with or without judicial process; the Lender may
lease or otherwise dispose of the Collateral, or may sell the
Collateral, or any part thereof, at public or private sale, at any time
or place, in one or more sales, at such price or prices, and upon such
terms, either for cash, credit or future delivery, as the Lender may
elect, and, except as to that part of the Collateral which is
perishable or threatens to decline steadily in value, or is of the type
customarily sold on a recognized market, the Lender shall give the
Borrower reasonable notification of such sale or sales, it being agreed
that in all events written notice mailed to the Borrower at least seven
(7) days prior to such sale or sales is reasonable notification, and it
is hereby further agreed that at any public sale the Lender may (but
shall have no obligation to) bid for and become the purchaser of any
Collateral; the Borrower hereby waives any and all rights it may have
to judicial hearing in advance of the enforcement of any of the
Lender's rights hereunder, indicting without limitation the Lender's
right to take immediate possession of the Collateral; and the Lender
may do any of the foregoing or otherwise deal with the Collateral in
its then condition or following such preparation as the Lender deems
advisable, with or without taking possession thereof;
7.1.8 the Lender shall have the right to apply to the
Obligations any deposits or other sums at any time credited by or due
from the Lender to the Borrower; and
7.1.9 the Lender may treat any or all of the Financing
Instruments as being in default and may exercise any rights and
remedies thereunder as it shall deem appropriate.
7.2 License. The Borrower hereby grants to the Lender a nonexclusive
irrevocable license to use, apply, and affix any trademark, trade name, logo, or
the like in which the Borrower or any Affiliate now or hereafter has rights,
such license being granted in connection with the completion of the manufacture
of Inventory or sale or other disposition of Inventory by Lender in the exercise
of its rights and remedies hereunder.
7.3 No Duty of Preservation; Joint Property. The Lender may at all
times proceed directly against the Borrower to enforce the payment of the
Borrower's Obligations to the Lender, and shall not be required to take any
action of any kind to preserve, collect upon or protect the rights of the Lender
in any Collateral obtained pursuant to the Financing Instruments. In the event
any Collateral, or any Deposit Account, is held in joint or common names, the
Lender may deal with such Collateral, or any Deposit Account, for all purposes
hereunder, and under any or all of the Financing Instruments, as if belonging to
any one, and no more than one, of such joint or common owners.
7.4 Cumulative Remedies. The enumeration of rights and remedies herein,
and in each of the Financing Instruments, shall be cumulative and not exclusive,
and shall be in addition to, and shall not exclusive of, any other rights or
remedies the Lender may have, whether under the UCC or other applicable law, or
in equity, or otherwise. The Lender shall, in its discretion, determine its
choice of rights and remedies and the order in which they shall be exercised,
and whether or not, and which, Collateral is to be proceeded against, and in
which order. The exercise of any right or remedy shall not preclude the exercise
of others.
SECTION 8
WAIVER; TERMINATION
8.1 Waiver By the Borrower. The Borrower hereby waives demand,
presentment, protest and notice thereof with respect to any and all instruments,
notice of acceptance hereof, notice of Loan or advances made, credit extended,
Collateral received or delivered, or any other action taking in reliance herein,
and all other notices and demands of any kind except as expressly set forth
herein.
8.2 Lender's Option To Waive. The Lender may at its sole discretion, at
any time and from time to time, waive any of the requirements or provisions
hereof, or contained within any of the Financing Instruments, or any default
hereunder or under any of the Financing Instruments, but only by an express
written waiver signed by an authorized officer of the Lender; no act other than
an express written waiver, nor any failure to act or delay by the Lender shall
constitute a waiver of any requirement or provision of, or any default under, or
any of the Lender's rights or remedies under, this Agreement or any of the
Financing Instruments. No single or partial waiver by the Lender of any
provision of this Agreement or any of the Financing Instruments, or any breach
or default thereunder, or of any right or remedy which the Lender may have,
shall operate as a waiver of any other provision, breach, default, right or
remedy, nor of the same one on any future occasion.
SECTION 9
MISCELLANEOUS
9.1 Deposits As Collateral; Set-Off. Any and all deposits, Deposit
Accounts, and other sums at any time credited by or due to the Borrower from the
Lender or any of its banking or lending affiliates or any lender acting as a
participant under any loan arrangement between the Lender and the Borrower, and
any cash, certificates of deposit, securities, instruments, documents, policies
and certificates of insurance, goods, Accounts, choses in action, Chattel Paper,
and other property of the Borrower in the possession or control of, or in
transit to or from, the Lender, or any of its banking or lending affiliates, or
any lender acting as a participant under any loan arrangement between the Lender
and the Borrower, or any third party acting on the Lender's behalf, regardless
of the reason the Lender, or such other party, receives or is to receive the
same (whether in pledge, or for safekeeping, or as agent for collection or
transmission or otherwise) and regardless of whether the Lender has
conditionally released the same, shall at all times constitute security for any
and all Obligations, and may be applied or set off against such Obligations at
any time, whether or not other collateral is available to the Lender. Lender
shall have the unrestricted right from time to time to apply (or to change the
application already made of) proceeds of Collateral to any Obligations, as
Lender in its discretion may determine.
9.2 Transfer of Collateral to Bank. Upon the occurrence of an Event of
Default, the Lender may at any time thereafter transfer any securities or other
property constituting Collateral into its own name or that of its nominee and
receive the income thereon and hold the same as security for Obligations or
apply it to principal or interest due on Obligations. Insofar as Collateral
shall consist of Accounts, contract rights, other claims and rights to the
payment of money, insurance policies, instruments, chattel paper, chose in
action or the like, the Lender may, without notice to or demand on the Borrower,
demand, collect, receipt for, settle, compromise, adjust, use, sue for,
foreclosure or realize upon Collateral as the Lender may determine, whether or
not Obligations or Collateral are then due, and for the purpose of realizing the
Lender's rights therein, the Lender may receive and open mail addressed to the
Borrower and endorse and/or remove notes, checks, drafts, money orders,
documents of title or other evidences of payment, shipment or storage or any
form of Collateral or items which relate directly to any of the Collateral on
behalf of and in the name of the Borrower. All contents of mail opened by the
Lender, except for removal of Collateral therefrom, shall be forwarded to the
Borrower and the Lender shall not disclose the contents thereof to any other
party, except Bank's attorneys, agents and independent contractors who are
directly involved with the Lender's relationship with the Borrower, unless any
such contents relate directly to Collateral. The powers conferred on the Lender
by this subsection are solely to protect the interest of the Lender and shall
not impose any duties on the Lender to exercise any powers.
9.3 No Duty To Preserve or Collect. The Lender shall have no duty as to
the collection or protection of the Collateral beyond the safe custody of such
of the Collateral as may come into possession of the Lender and shall have no
duty as to the preservation of rights against prior parties or any other rights
pertaining thereto. The Lender's rights and remedies may be exercised without
resort or regard to any other source of satisfaction of the Obligations.
9.4 Survival of Covenants; Binding Effect. All agreements,
representations, covenants and warranties made by the Borrower in this
Agreement, the Financing Instruments, or in any certificate or other document
delivered to the Lender in connection herewith shall survive the termination of
this Agreement and survive the execution and delivery of this Agreement, and
shall remain in full force and effect until all Obligations to the Lender have
been paid in full and satisfied, and the security interest, lien and rights
granted to the Lender in any Collateral and its rights and remedies hereunder
and under the Financing instruments shall continue in full force and effect
notwithstanding the fact that the Borrower's Line of Credit loan account may
from time to time be in a zero or credit position, until all Obligations have
been satisfied. All the terms and provisions of this Agreement and the Financing
Instruments shall be binding upon and inure to and be enforceable by and against
the parties hereto and their respective successors and assigns.
9.5 Termination of Agreement.
9.5.1 This Agreement shall terminate upon the final and
irrevocable payment in full by the Borrower of the Obligations, or upon
acceleration of the Obligations pursuant to the terms of this
Agreement.
9.5.2 The termination of this Agreement shall not affect any
rights of the Borrower or the Lender arising prior to the effective
date of such termination, as the case may be, and the provisions hereof
shall continue to be fully operative until all transactions entered
into, rights created or Obligations incurred prior to such occurrence
or termination shall have been fully disposed of, concluded or
liquidated. Upon termination of this Agreement, all Obligations
(including, without limitation, the Loans) shall be due and payable
without notice or demand. The security interests, liens and rights
granted to the Lender hereunder and under any instrument or document
delivered pursuant hereto or in connection herewith shall continue in
full force and effect, notwithstanding the termination of this
Agreement or the fact that the Borrower's Accounts may from time to
time be temporarily in a credit position, until all of the Obligations
have been paid in full after the termination hereof. All
representations, warranties, covenants, waivers and agreements
contained herein shall survive the termination hereof unless otherwise
provided.
Notwithstanding the foregoing, if after receipt of any payment of all
or any part of the Obligations, the Lender is for any reason compelled
to surrender such payment to any person or entity because such payment
is determined to be void or voidable as a preference, impermissible
setoff, a diversion of trust funds or for any other reason, this
Agreement shall continue in full force and the Borrower shall be liable
to, and shall indemnify and hold the Lender harmless for, the amount of
such payment surrendered until the Lender shall have been finally and
irrevocably paid in full. The provisions of the foregoing sentence
shall be and remain effective notwithstanding any contrary action which
may have been taken by the Lender in reliance upon such payment, and
any such contrary action so taken shall be without prejudice to the
Lender's rights under this Agreement and shall be deemed to have been
conditioned upon such payment having become final and irrevocable.
9.6 Conflict of Terms. In the event of any conflict or contradiction
between or among any provision or provisions of this Agreement and any provision
or provisions of any of the other Financing Instruments, the provisions of this
Agreement shall govern.
9.7 Prior Discussions; Amendments in Writing; Counterparts; Filing As
Financing Statement. This Agreement and all other Financing Instruments
incorporate all discussions and negotiations between the Borrower and the
Lender, either express or implied, concerning the matters included herein and
therein, any custom or usage to the contrary notwithstanding. No such
discussions or negotiations shall limit, modify, or otherwise affect the
provisions of the Financing Instruments. This Agreement may be amended or
modified only in writing signed by the parties hereto, and in the case of the
Lender signed by a duly authorized officer thereof. This Agreement may be
executed in two or more counterparts, each of which shall constitute an
original, but such counterparts together shall constitute one and the same
instrument. A carbon, photographic or other reproduction of this Agreement or of
any financing statement executed to perfect the security interest created herein
may be filed as a financing statement under the UCC (or under the Uniform
Commercial Code in effect in any jurisdiction outside Massachusetts).
9.8 General Indemnification. The Borrower shall, and does hereby,
further indemnify and save the Lender harmless from any and all liabilities,
damages, costs, losses and expenses (including, without limitation, court costs
and attorney's reasonable fees and expenses) that the Lender may sustain or
incur by reason of, relating to or arising out of the preparation of this
Agreement, the defending or protecting of any Collateral or the priority of
Lender's interest therein, or in collecting or enforcing the Obligations, or in
enforcing any of Lender's rights or remedies, or in the prosecution or defense
of any action or proceeding concerning any matter growing out of or connected
with this Agreement, any of the Financing Instruments, the Obligations, or the
Collateral, or on account of the Lender's relationship with the Borrower (each
of which may be defended, compromised, settled or pursued by the Lender with
counsel of Lender's selection, at expense of the Borrower) except for such
claims which have been determined by a court of competent jurisdiction to have
arisen out of the Lender's gross negligence or bad faith. The within
indemnification shall survive termination of this Agreement. The Borrower's
obligations under this subsection constitute part of the Obligations secured by
the security interest created by this Agreement and by the other Financing
Instruments.
9.9 Destruction of Documents; Jurisdiction. This Agreement and all
other Financing Instruments, may be reproduced by the Lender by any
photographic, photostatic, microfilm, or similar process, and the Lender may
destroy the original from which any document was so reproduced. Any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made in the regular course of
business). The Borrower acknowledges receipt of a true, correct and complete
copy or counterpart of this Agreement.
9.10 Notices.
9.10.1 All notices or demands hereunder to the parties hereto
shall be made in writing and shall be deemed to have been sufficiently
given for all purposes one business day after being sent by recognized
overnight delivery service for next day delivery service, on the same
business day if delivered by hand and three business days after being
sent by United States mail, certified mail return receipt requested,
first class, postage prepaid, and addressed to the parties at their
respective Notice Addresses set forth above, together with the
following additions: (a) for the Lender, "Attention: Commercial Banking
Group" and (b) for the Borrower, "Attention: Richard T. Schumacher,
President". Either of the parties may change its Notice Address
hereunder by giving notice of such change to the other party in
accordance with the provisions of this subsection.
9.10.2 Notwithstanding any provision herein to the contrary,
the Borrower agrees that the failure or delay by the Lender in giving
any notice or statement hereunder, or any inaccuracy therein or
incompleteness thereof, shall not in any way alter or affect the
absolute and unconditional obligation of the Borrower to pay and
perform in full the Obligations, but any action taken or not taken by
the Borrower as a direct result of such lack or delay of notice, or of
the Borrower's good faith reliance upon a material inaccuracy therein
or the material incompleteness thereof, as the case may be, shall not
in of itself, and to the extent thereof, constitute an Event of Default
hereunder, so long as the Borrower does not otherwise have or receive
notice or knowledge of the material contents or substance of such
notice, or of the inaccuracy or incompleteness thereof, as the case may
be, and the Borrower acts at all times in good faith.
9.11 Application of Proceeds. The proceeds of any collection, sale or
disposition of the Collateral, or of any other payments received hereunder,
shall be applied toward the Obligations in such order and manner as the Lender
determines in its sole discretion, any statute (the application of which may be
waived or modified by agreement), customs or usage to the contrary
notwithstanding. The Borrower shall remain liable to the Lender for any
deficiency remaining following such application.
9.12 Continuance of Defaults. As used herein, and in any of the
Financing Instruments, upon any and each occurrence of an Event of Default, such
Event of Default shall be deemed to continue until cured by the Borrower in
accordance with this Agreement (and the applicable provisions of the Financing
Instruments, as the case may be), and until such time as the Borrower requests
and receives from the Lender the Lender's written acknowledgment that such Event
of Default (as specified in the request) has been cured and is no longer
continuing, which acknowledgment the Lender shall not unreasonably withhold or
delay.
9.13 Severability. If any provision of this Agreement or any of the
Financing Instruments, or any portion of such provision, or the application
thereof to any person or circumstance, shall to any extent be held invalid or
unenforceable, the remainder of this Agreement and the Financing Instruments or
the remainder of such provision and the application thereof to other persons or
circumstances (other than those as to which it is held invalid or unenforceable)
shall not be affected thereby, and each term and provision hereof and of the
Financing Instruments shall be valid and enforced to the fullest extent
permitted by law. To the extent permitted by law, the parties hereto waive any
provision of law which renders any such provision prohibited or unenforceable in
any respect.
9.14 Headings. Headings appearing in this Agreement are intended for
convenience only and do not constitute and shall not be interpreted to be a part
of this Agreement.
9.15 Governing Law; Sealed Instrument. This Agreement is executed and
delivered in The Commonwealth of Massachusetts, and for all purposes shall be
construed in accordance with and governed by the laws of The Commonwealth of
Massachusetts, and shall take effect as a sealed instrument. The Borrower
submits
itself to the jurisdiction of the Courts of The Commonwealth of Massachusetts
for all purposes with respect to this Agreement and the Borrower's relationship
with the Lender.
9.16 Force Majeure. The Lender shall not be responsible for delays or
failures in performance hereunder resulting from causes beyond its control,
including without limitation, acts of God, strikes, lockouts, riots, acts of
war, governmental regulations, fire, communication line failures, power
failures, earthquakes or other disasters.
9.17 Interpretation of Agreement. Should any provision of this
Agreement or the other Financing Instruments require interpretation or
construction, it is agreed by the parties hereto that the court, administrative
body, or other entity interpreting or construing this Agreement or the other
Financing Instruments shall not apply a presumption that the provisions thereof
shall be more strictly construed against one party by reason of the rule of
construction that a document is to be construed more strictly against the party
who itself or through its agents prepared the same, it being agreed that the
parties and/or their respective attorneys and agents have fully participated in
the preparation of all provisions of this Agreement and the other Financing
Instruments.
EXECUTED as an instrument under seal as of the day and year first
stated above.
Borrower:
Signed in the presence of: BOSTON BIOMEDICA, INC.
______________________________ By:_________________________________
Witness Kevin W. Quinlan, Treasurer, hereunto
duly authorized
BTRL CONTRACTS AND SERVICES, INC.
By:_________________________________
Kevin W. Quinlan, Treasurer,
hereunto duly authorized
BBI-NORTH AMERICAN CLINICAL
LABORATORIES, INC.
By:_________________________________
Kevin W. Quinlan, Treasurer,
hereunto duly authorized
Lender:
THE FIRST NATIONAL BANK OF BOSTON
By:_________________________________
Roger F. Allard
Vice President/Director
EXHIBIT 1.4.1
Appraisal conducted by Frank Ronne & Associates dated
August 9, 1994 of BBI, BTRL and NACL Eligible
Equipment is held
in the Lender's files
EXHIBIT 1.8
TO SECOND AMENDED AND RESTATED LOAN
AND SECURITY AGREEMENT
1) Contract Number: 263-MQ-519321-1
Issued By: National Cancer Institute, NIH
Contracting
Officer: Ms. Patricia Haun
Description: LN2 Freezer Maintenance Contract (#108)
Disbursing
Officer: Chief, Contracts Section, FAAB, Division of
Financial Mgmt. Bldg. 31, Rm. B1B05A,
9000 Rockville Pike, Bethesda, MD 20892
Sureties: N/A
2) Contract Number: NO1-CP-33060
Issued By: Cancer Etiology Contracts Section, NCI, NIH
Contracting
Officer: Nancy E. Coleman
Description: Repository for Cancer Study (#115)
Disbursing
Officer: Chief, Contracts Section, FAAB, Division of
Financial Mgmt. Bldg. 31, Rm. B1B05A,
9000 Rockville Pike, Bethesda, MD 20892
Sureties: N/A
3) Contract Number: 2-R44-AI29224
Issued By: National Institute of Allergy &
Infectious Diseases, NIH
Contracting
Officer: Todd Ball, Grants Mgmt. Officer, GMB, DEA-NIAID
Description: Lyme PCR (#117)
Disbursing
Officer: Ms. Jessilynn Elliott, Division of Payment
Management, P.O. Box
6021, Rockville, MD 20852
Sureties: N/A
4) Grant Number: 5-RO1-AI-33066 (NIH, NIAID)
Subcontract No.: 5-50257
Issued By: University of North Carolina
Contracting
Officer: Ms. Carol Alderson, NIAID Contract Specialist
Description: Plant Anti-HIV Drug Testing (#112)
Disbursing
Officer: Mary Fedash, Chief, Contracts Section, FAAB, Div. of
Financial Mgmt. Bldg. Rm. B1B05A,
9000 Rockville Pike, Bethesda, MD 20892
Sureties: N/A
5) Contract Number: N01-HD-33183
Issued By: NICHD, NIH
Contracting
Officer: Harvey Shifrin
Description: Repository for PAMA Studies (116)
Disbursing
Officer: Chief, Contracts Section, FAAB, Division of
Financial Mgmt. Bldg. 31, Rm. B1B05A,
9000 Rockville Pike, Bethesda, MD 20892
Sureties: N/A
6) Contract Number: 1 R43 HL54370
Issued By: National Heart, Lung & Blood Institute, NIH
Contracting Officer: Jane R. Davis, Section Grants Mgmt. Officer, GOB
Description: Multiplex PCR (#120)
Disbursing
Officer: Ms. Mary S. Reid, Division of Financial
Management, NIH
Building 31, Room B1B11, Bethesda, MD 20892
Sureties: N/A
7) Contract Number: N01-HD-5-3232
Issued By: NICHD, NIH
Contracting Officer: Ms. Mya Hlaing
Description: Repository for MFMU Studies (122)
Disbursing
Officer: Chief, Contracts Section, FAAB, Division of
Financial Mgmt. Bldg. 31, Rm. B1B05A,
9000 Rockville Pike, Bethesda, MD 20892
Sureties: N/A
8) Contract Number: 263-00045134-03-BPA/G
Issued By: NIH, PHS, DHHS
Contracting Officer: Bill Ainsworth
Description: NIH BPA
Disbursing
Officer: Accounts Payable Section, DFM, Bldg. 31,
Rm. B1B39
Sureties: N/A
9) Contract Number: FDA 001273-00-95-00 00
Issued By: FDA, Supply Contracts Section, HFA-513
Contracting
Officer: Donald W. Broome
Description: FDA BPA
Disbursing
Officer: DHHS/FDS/Commercial Accts., 5600 Fishers Lane,
HFA-122, Rockville, MD 20857
Sureties: N/A
10) Contract Number: DAMD17-94-A-4011 (BPA)
Issued By: U.S. Army Medical Research Acquisition Activity
Contracting
Officer: Herman F. Willis, Jr.
Description: Army BPA
Disbursing
Officer: Finance & Accounting Office, Bldg. 810,
Fort Detrick, MD 21702-5000
Sureties: N/A
11) Contract Number: N01-AI-42902 (MAA)
Issued By: National Institute of Allergy and Infectious Disease,
NIH
Contracting
Officer: Toni A. Kuhn
Description: NIAID Master Agreement
Disbursing
Officer: Chief, Contracts Section, FAAB, Division of
Financial Mgmt. Bldg. 31, Rm. B1B05A,
9000 Rockville Pike, Bethesda, MD 20892
Sureties: N/A
EXHIBIT 3.2.1
LOCK BOX AGREEMENT
This Lock Box Agreement (the "Agreement"), dated as of this ___ day of
________ , 199_ , by and between ______________ , a Massachusetts corporation
("________"), and THE FIRST NATIONAL BANK OF BOSTON (the "Lender"). Capitalized
terms used without definition shall have the meanings given them in the Loan
Agreement (as hereinafter defined).
WHEREAS, the Lender has entered into a Second Amended and Restated Loan
and Security Agreement with Boston Biomedica, Inc., BTRL Contracts and Services,
Inc. and BBI - North American Clinical Laboratories, Inc. (together, the
"Borrower") dated as of August 2, 1995 (the "Loan Agreement") pursuant to which
the Borrower has granted the Lender a security interest in, inter alia, its
present and future Eligible Accounts and proceeds thereof; and
WHEREAS, the Loan Agreement provides that all collections and proceeds of
such Eligible Accounts shall be remitted in kind to the Lender in accordance
with the provisions of this Agreement and the Loan Agreement.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. Post Office Box. The Lender has rented a Post Office Box (the "Lock
Box") at the post office located at , in the name of for the benefit of the
Lender under United States Post Office Box No. . hereby authorizes Lender to
date and deliver the executed Notice to Postmaster to the Post Office attached
hereto as Exhibit A. __________ hereby represents, warrants and covenants that
all customers of have been instructed to mail their remittances to the Lock Box
in accordance with the terms of the Loan Agreement. In the event that receives
any such remittances, shall promptly deliver such remittances to the Lender.
2. Access to Contents of Lock Box. The Lender will have exclusive and
unrestricted access to the Lock Box and will have complete and exclusive
authority to receive, pick up and open all regular, registered, certified or
insured mail addressed to at the Lock Box. Such mail will be picked up by the
Lender at the same time as its own mail is collected throughout the working day.
3. Remittance Collection. The Lender will open all mail addressed to the
Lock Box and will remove and inspect the enclosures. All checks, money orders
and other forms or orders for the payment of money and other collection
remittances (hereinafter collectively referred to as "checks") shall be
processed by the Lender as follows:
(a) Missing Date. All undated checks will be dated by the Lender
as of the date of receipt and processed as hereafter provided.
(b) Postdated. Checks postdated two days from date of receipt
will be processed on the date of receipt. Checks postdated three days or
more from the date of receipt will be processed on the date of receipt in
the absence of notice of a specific agreement between ________ and the
Lender in which case the Lender will consult with ___________ .
(c) Stale Date. Checks dated six months or more prior to the date
of collection will be deposited on the date of receipt.
(d) Differing Amounts. Where written and numeric amounts differ,
a check will be processed by the Lender in accordance with the written
amount.
(e) Signature Missing. Checks which do not bear the drawer's
signature will be deposited and processed by affixing a notice thereto
requesting that the drawee Lender contact the drawer thereof for authority
to pay thereunder.
(f) Alterations and Restrictions. The Lender will consult with
__________ regarding checks with alterations and checks bearing
restrictive notations such as those marked "Payment in Full", and the
Lender will either deposit such checks or return them to the maker.
(g) Foreign Currency. Checks drawn in foreign currency will be
processed in accordance with the Lender's normal procedure for such
checks.
4. Processing of Acceptable Checks. All checks, except those not
acceptable for deposit under the terms of this Agreement, shall be deposited on
the day of receipt by the Lender to Account _______________ , and shall be
endorsed as follows:
CREDIT TO THE ACCOUNT OF THE WITHIN NAMED PAYEE. PAYMENT ACCEPTED WITHOUT
PREJUDICE. ABSENCE OF ENDORSEMENT GUARANTEED. WORCESTER COUNTY INSTITUTION
FOR SAVINGS.
__________________ agrees to indemnify the Lender from and against any and
all losses, costs and expenses incurred by it which result from such
endorsement.
All remittances, advices, envelopes and written matter (except as
expressly provided herein) received in the Lock Box shall be sent by the Lender
to ____________ . On each day on which there is a deposit to said account, the
Lender shall send by telecopier to a detailed analysis of the check amount, the
check number and the invoices being paid, and the Lender shall mail a monthly
statement of account to ______________.
5. Returned Checks. Checks deposited in said account which are returned
unpaid because of insufficient or uncollected funds will be redeposited by the
Lender only once. If redeposit is not warranted because payment has been stopped
on the check or because the account on which the check was drawn has been
closed, or if a check is returned a second time, the Lender will charge said
account and send a debit advice with the item to ____.
6. Remittances Received by _______. will forward to the Lock Box on the
day received any remittances which are sent directly to ____.
7. Record Maintenance. All deposited checks will be microfilmed on front
and back by the Lender and retained for seven years by the Lender prior to
destruction thereof.
8. Lender Charges. All charges of the Lender for services rendered
pursuant to this Agreement shall be debited to ______'s account.
9. Force Majeure. The Lender shall not be responsible for delays or
failures in performance hereunder resulting from causes beyond its control,
including without limitation, acts of God, strikes, lockouts, riots, acts of
war, governmental regulations, fire, communication line failures, power
failures, earthquakes or other disasters.
10. Term. This Agreement shall continue in full force and effect until
termination by the Lender in accordance with the Loan Agreement or prior written
notice to _____.
11. Modification. This Agreement may be modified only by a writing signed
by all of the parties hereto.
12. Addresses. All notices, including phone notices, daily deposit
advices, monthly statements of account and copies of all checks and the
documents which are to be given or sent hereunder shall be sent as provided in
the Loan Agreement and, where applicable, given at the following phone numbers:
If to the Lender: The First National Bank of Boston
ATTN: Roger F. Allard, Vice President/Director
(508) 770-7125
If to the Borrower: ________________________________
ATTN: Kevin J. Quinlan, Chief
Financial Officer
(508) 580-1900
13. Jurisdiction. This Agreement shall be governed by the laws of the
Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date and year first above written.
THE FIRST NATIONAL BANK OF BOSTON
By:
---------------------------
Roger F. Allard
Vice President/Director
By:
-----------------------------
Kevin W. Quinlan, Treasurer
EXHIBIT A
____________
DATE __________, 199
Postmaster
Worcester, Massachusetts
Dear Sir/Madam:
We request and authorize that you rent to The First National Bank of
Boston ("FNBB") a post office box in our name and to grant representatives of
FNBB unrestricted access to the post office box for the removal of any mail
placed therein.
______________
By:____________________
Name: Kevin W. Quinlan
Title: Treasurer
EXHIBIT 4.2.15 (A)
[FORM OF COLLATERAL ASSIGNMENT]
This Collateral Assignment (the "Assignment") is made this ___ day of
_______, 19___ by _____________________________________________, a Massachusetts
corporation having a principal place of business at
_________________________________ (the "Assignor") to
____________________________, a Massachusetts bank having a principal place of
business at _____________________________________________ (the "Assignee").
This Assignment is executed and delivered by the Assignor to the
Assignee pursuant to and in furtherance of a certain
_____________________________________ executed and delivered by the Assignor to
the Assignee dated _____________________ (the "Loan Agreement").
FOR VALUE RECEIVED, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Assignor does
hereby transfer, assign, convey, set over and deliver to the Assignee all of
Assignor's rights, title and interests in and to all moneys due or to become due
under the contracts listed on Schedule A attached hereto and incorporated herein
by reference and entered into by and between the Assignor and the United States
of America and amendments thereof and supplements thereto heretofore or
hereafter made (the "Contracts").
This Assignment shall be deemed to include, and the Assignor does
hereby assign to the Assignee all moneys due or to become due to the Assignor
from the UNITED STATES OF AMERICA, under any letter of intent, letter of award,
acceptance of bid or proposal, other contract, order, authorization to commence
performance, communication or instruction received by the Assignor relative to
or in anticipation of said Contracts, including said Contracts in their final
definitive form and any amendments thereof and supplements thereto, all of which
shall be included in the term "Contracts" as herein used. Assignor warrants that
the property purported to be assigned hereby is assignable by it to the
Assignee, that it has full right to make this Assignment and that it has not
made any prior assignment of the Contracts or of any moneys due or to become due
thereunder. Assignor will execute and deliver such further instruments and do
such further acts as the Assignee may request or as shall be necessary or
desirable for the further assurance of the Assignee of the moneys due or to
become due from the UNITED STATES OF AMERICA under the Contracts, will deliver
and transfer to the Assignee upon request all books, correspondence and other
papers appropriate to verify or substantiate such moneys, and will give the
Assignee all reasonable assistance in collecting such. Assignor will hold in
trust for the Assignee all such moneys hereafter received by it and will
forthwith transmit the same in specie (after first making any necessary
endorsements) to the Assignee.
This Assignment is executed in accordance with the provisions of the
Assignment of Claims Act of 1940 as amended.
The Assignee is authorized and shall be entitled to do in its name, or
in the name of the Assignor, all things with reference to the moneys due under
the Contracts or any of them and hereby assigned under the terms of this
instrument, that the Assignor might have done but for this Assignment. Such
include, without limitation, the following:
1. To receive, collect (by suit or otherwise) and receipt for the
payment of all moneys due or hereafter to become due under any of
the Contracts;
2. To endorse in the name of the Assignor any checks or drafts
payable to the Assignor which shall be collected or received on
account of or in payment of any moneys due or which shall
hereafter become due under the terms of any of the Contracts;
3. To settle, adjust and compromise all present and future claims
arising out of any of the moneys due or hereafter to become due
under the terms of the Contracts or any of them, without liability
except for its own wilful malfeasance in connection therewith.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Assignor has caused this instrument to be
executed and delivered in its name and on its behalf by an officer duly
authorized, as an instrument under seal, as of the date first written above.
ATTEST: ASSIGNOR:
_____________________________
________________________ By: ______________________________
Clerk/Assistant Clerk
Its: ____________________
[AFFIX CORPORATE SEAL OR
ATTACH CERTIFIED COPY OF
BOARD OF DIRECTORS' RESOLUTION
AUTHORIZING EXECUTION BY SIGNOR]
COMMONWEALTH OF MASSACHUSETTS
___________________, ss. Date: __________________
Then personally appeared the above named ________________________ who
being by me duly sworn, said that he is the _________________ of
_______________________ the corporation described above and which executed the
foregoing instrument, and that he is duly authorized to so execute said
instrument as aforesaid, before me.
----------------------------
Notary Public
My Commission Expires:
SCHEDULE A
TO COLLATERAL ASSIGNMENT BETWEEN ___________________________ AND
______________________________________________
1) Contract Number:
Issued By:
Contracting
Officer:
Disbursing
Officer:
2) Contract Number:
Issued By:
Contracting
Officer:
Disbursing
Officer:
EXHIBIT 4.2.15 (B)
[FORM OF NOTICE OF COLLATERAL ASSIGNMENT]
Certified Mail Date: _________, 199__
Return Receipt Requested
Receipt No. __________________
________________________ ________________________
________________________ ________________________
________________________ ________________________
ATTN: ____________ ATTN:___________________
(CONTRACTING OFFICER OR
DISBURSING OFFICER OR DESIGNATED
AGENCY HEAD IN THE CONTRACT
TO MAKE PAYMENT)
Re: NOTICE OF ASSIGNMENT OF CONTRACTS as more particularly described
on Schedule A attached hereto (hereinafter referred to as the
"Contracts") made by _________________________________________
with BTRL Contracts and Services, Inc., a Massachusetts
corporation with a principal place of business at 375 West
Street, West Bridgewater, MA 02379 (hereinafter called the
"Corporation")
Dear Sir/Madam:
Please take notice that all of the Corporation's rights, title and
interest in and to all monies due or to become due under the above-described
Contracts, including all amendments thereof and supplements thereto, have been
assigned to The First National Bank of Boston having a principal office at 100
Front Street, Worcester, MA 01608 (hereinafter called "FNBB") pursuant to the
provisions of the Assignment of Claims Act of 1940, as amended, 31 U.S.C. 3727,
41 U.S.C. 15 (the "Act").
A true copy of the instrument of assignment executed by the Corporation as
Contractor on / / is attached to this notice.
Pursuant to the Act, we advise you that:
1. FNBB is a Massachusetts bank;
2. The assignment covers all amounts payable to the Corporation
under the Contracts which have not already been paid;
3. The assignment has been made to FNBB and no part thereof has been
made to any other parties; and
4. No further assignment has been made.
The copy of the Contracts we have reviewed does not indicate any sureties
with respect to the Contracts. We would appreciate your confirming this fact or,
if such is not the case, please supply us with appropriate names and addresses
of all sureties with respect to the Contracts, so that they can be notified
under the Act.
The Contracts also indicate that payment will be made by the "disbursing
officer" as defined under the Act unless you advise us further below.
All payments due or to become due on the Contracts should be made payable
to: FNBB, and should be mailed to: 100 Front Street, Worcester, MA 01615-0073
Attention: Commercial Banking Group.
Please return to the undersigned the three enclosed copies of this Notice
with the appropriate notations (showing the date and hour of receipt, and
confirming the above information concerning sureties and disbursing officer) and
duly signed by the addressee or person acknowledging receipt on behalf of the
addressee, to: First National Bank of Boston, 100 Front Street, Worcester, MA
01608, Attention: Commercial Banking Group.
If you have any questions or problems, please contact the undersigned.
Thank you for your cooperation.
Very truly yours,
FIRST NATIONAL BANK OF BOSTON
By: _______________________________
(Signature of Signing Officer)
Its: _______________________________
(Title of Signing Officer)
100 Front Street
Worcester, MA 01615-0073
Address of Assignee
ACKNOWLEDGMENT
The addressee designated above hereby acknowledges receipt of the above
Notice of Assignment of Contracts and of a copy of the instrument of assignment
attached hereto at _______, __m. on ________________, 19___.
----------------------------
Title: ________________________
ON BEHALF OF:
----------------------------
EXHIBIT 5.2.1
A. OPERATING CASH FLOW ("OCF")
Add: 1. Earnings before interest and taxes (EBIT)
2. Depreciation and Amortization
3. Non-cash related and other
Less: 4. Cash taxes
5. Capital Expenditures (CAPEX)
6. OCF
B. ADJUSTMENTS TO OCF ("Adjusted OCF")
Add: 7. Net Equity Raised (1)
8. Financed Capex (2)
9. Adjusted OCF
C. TOTAL DEBT SERVICE ("TDS")
1. Interest Expense
2. Current Maturities of Long Term Debt (CMLTD)
3. TDS
Adjusted OCF/TDS = Debt Service Ratio
Note:
(1) Net equity raised is less any equity used to finance acquisitions.
(2) Financed Capex is bank/lease debt used to offset capital purchases.
EXECUTION
FIRST AMENDMENT TO SECOND AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
This First Amendment to Second Amended and Restated Loan and Security
Agreement (this "Agreement") is dated as of December ___, 1995, and is by and
among BOSTON BIOMEDICA, INC., ("BBI"), BTRL CONTRACTS AND SERVICES, INC.
("BTRL") and BBI - NORTH AMERICAN CLINICAL LABORATORIES, INC., formerly known as
NORTH AMERICAN LABORATORY GROUP, INC. ("NACL"), each of which is a Massachusetts
corporation validly created, legally existing and in good standing under the
laws of the Commonwealth of Massachusetts and each of which has its "Notice
Address" at 375 West Street, West Bridgewater, Massachusetts 02379 (BBI, BTRL
and NACL, together with their successors and assigns, are collectively referred
to herein as the "Borrower") and THE FIRST NATIONAL BANK OF BOSTON, a national
banking association having an office and "Notice Address" at Bank of
Boston-Worcester Tower, P.O. Box 15073, 100 Front Street, Worcester,
Massachusetts 01608-1438 (together with its successors and assigns, the
"Lender").
WHEREAS, the Borrower and the Lender are parties to a certain Second
Amended and Restated Loan and Security Agreement (the "Loan Agreement") dated as
of August 2, 1995 (the Loan Agreement, together with any other documents and
instruments executed and delivered in connection therewith or securing the
payment and performance obligations of the Borrower thereunder shall be referred
to collectively as the "BBI Commercial Financing Documents"); and
WHEREAS, the Borrower has requested that the Lender extend to the Borrower
and the Lender has agreed to so extend a loan (the "Real Estate Loan") in the
original amount of $750,000 to finance BBI's acquisition of two parcels of real
property with the improvements thereon known as and numbered 375 West Street and
80 Manley Street, West Bridgewater, Plymouth County, Massachusetts (referred to
together as the "Property"); and
WHEREAS, the Real Estate Loan is to be evidenced by a Term Promissory Note
given by the Borrower to the Lender in the original principal amount of the Real
Estate Loan and a Real Estate Loan Agreement, which is, in turn, secured in part
by two certain Mortgage, Financing Statement and Security Agreements, two
certain Assignments of Rents and Leases and two certain Assignments of
Agreements, Permits and Rights, each with respect to the Property, and an
Environmental Indemnification (the foregoing documents referred to together as
the "Real Estate Loan Documents"); and
WHEREAS, the Lender is willing to extend the Real Estate Loan to or for
the benefit of the Borrower in accordance with the terms of the Real Estate Loan
Documents only if the Borrower agrees to amend the Loan Agreement to provide
that (i) the payment and performance obligations of the Borrower under the Real
Estate Loan Documents are "Obligations" under the Loan Agreement, which
Obligations are secured, in part, by the BBI Commercial Financing Documents and
in part by the Real Estate Loan Documents, and (ii) the occurrence of any Event
of Default, as defined in the Real Estate Loan Documents, shall constitute an
Event of Default under the Loan Agreement and the other BBI Commercial Financing
Documents;
NOW, THEREFORE, in order to induce the Lender to extend the Real Estate
Loan and to grant certain other financial accommodations, all to or for the
benefit of the Borrower, and in consideration thereof and in consideration of
the mutual covenants herein contained, the parties hereby agree as follows:
1. Definitions. Terms not otherwise specifically defined in this Agreement
shall have the respective meanings given to them in the Loan Agreement or in the
Real Estate Loan Documents.
2. Amendments to the Loan Agreement. The Loan Agreement is hereby amended
as follows:
A. Section 2.1 Amounts and Types of Loans; Notes Evidencing
Loans. The word "and" at the end of subsection 2.1.3 is hereby deleted.
The period at the end of subsection 2.1.4 is hereby deleted and "; and"
substituted therefor. The following subsection 2.1.5 is hereby added at
the end of Section 2.1:
2.1.5 a term loan in the original principal amount of
Seven Hundred Fifty Thousand Dollars ($750,000) (the "$750,000
Real Estate Term Loan"), evidenced by the Borrower's Term
Promissory Note (the "$750,000 Term Note") dated December 11,
1995 in the face amount of the full principal thereof.
and the sentence in parentheses at the end of Section 2.1 is hereby
deleted and the following substituted therefor:
(The Line of Credit Note, the Amended and Restated Term Note,
the $200,000 Term Note, the $350,000 Term Note and the $750,000
Term Note may each be referred to as a "Note" and collectively
as the "Notes".
B. Section 2.5 Use of Proceeds. The word "and" at the end of
subsection 2.5.3 is hereby deleted. The period at the end of subsection
2.5.4 is hereby deleted and ";and" substituted therefor. The following
subsection 2.5.5 is hereby added at the end of Section 2.5:
2.5.5 with respect to the $750,000 Real Estate Term Loan,
advances up to the full amount of the $750,000 Real Estate Term
Loan shall be made to acquire two parcels of real estate, with
the buildings and other improvements thereon, known as 375 West
Street and 80 Manley Street, West Bridgewater, Massachusetts
(together, the "Property") as more particularly described in the
Mortgages.
C. Section 3.1 Granting Clause; Desription of Collateral. The
word "and" at the end of subsection 3.1.10 is hereby deleted. The period
at the end of subsection 3.1.11 is hereby deleted and ";and" substituted
therefor. The following subsection 3.1.12 is hereby added at the end of
Section 3.1:
3.1.12 The "Mortgaged Estate" as defined in the
Mortgages.
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D. Section 6.4. The phrase "or any Financing Instrument" is
hereby added after the word "Agreement" in the second line of Section
6.4.
2. Ratification and Confirmation of Representations, Covenants and
Warranties. In order to induce the Lender to enter into this Agreement, the
Borrower hereby ratifies and confirms all representations, covenants and
warranties contained in the Loan Agreement and all other Financing Instruments,
and the Borrower hereby restates all such representations, covenants and
warranties as of the date of this Agreement.
3. Incorporation of Agreement into the Loan Agreement. Except as expressly
amended hereby, the Loan Agreement shall continue in full force and effect, and
all references to the Loan Agreement in any of the Financing Instruments
hereafter shall mean the Loan Agreement as amended by this Agreement.
4. Counterpart Execution. To facilitate execution, this Agreement may be
executed in as many counterparts as may be convenient or required. It shall not
be necessary that the signature and acknowledgment of, or on behalf of, each
party, or that the signature and acknowledgment of all persons required to bind
any party, appear on each counterpart. All counterparts shall collectively
constitute a single instrument. It shall not be necessary in making proof of
this Agreement to produce or account for more than a single counterpart
containing the respective signatures and acknowledgment of, or on behalf of,
each of the parties hereto.
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EXECUTED AS A SEALED INSTRUMENT as of the day and year first stated above.
BOSTON BIOMEDICA, INC.
__________________________ By:_______________________________
Witness as to Borrower Richard T. Schumacher
President
Hereunto duly authorized
BTRL CONTRACTS AND SERVICES,
INC.
By:__________________________
Richard T. Schumacher
President
Hereunto duly authorized
BBI - NORTH AMERICAN CLINICAL
LABORATORIES, INC.
By:__________________________
Richard T. Schumacher
President
Hereunto duly authorized
THE FIRST NATIONAL BANK OF BOSTON
By:_________________________
Witness as to Lender Roger F. Allard
Vice President/Director
Hereunto duly authorized
PABOS:SCS:201888_2
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