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EXHIBIT 10.18
AMENDED AND RESTATED LINE OF CREDIT AGREEMENT
THIS AGREEMENT dated as of October 15, 1996 is executed among WALLACE
INTERNATIONAL DE PUERTO RICO, INC. and INTERNATIONAL SILVER DE PUERTO RICO, INC.
(collectively, the "Borrower"), both corporations organized and existing under
the laws of the State of Delaware, authorized to do business in the Commonwealth
of Puerto Rico (the "Commonwealth"), with principal offices in San German,
Puerto Rico, and BANCO POPULAR DE PUERTO RICO (the "Bank"), a banking
corporation organized and existing under the laws of Puerto Rico, with principal
offices at Popular Center Building, Hato Rey, San Juan, Puerto Rico.
WITNESSETH
WHEREAS, the Borrower and the Bank entered into a Line of Credit Agreement
dated January 25, 1993 (the "Line of Credit Agreement") pursuant to which the
Bank agreed to make available for Loan to the Borrower (the "Line of Credit") up
to a maximum aggregate principal amount of FOUR MILLION DOLLARS ($4,000,000) for
purposes of the working capital needs of the Borrower; and
WHEREAS, the Borrower has requested from the Bank to make available an
additional $6,000,000 under the Line of Credit originally extended to the
Borrower under the Line of Credit Agreement increasing the maximum aggregate
principal amount to be available thereunder to up to $10,000,000; and,
WHEREAS, the Bank has agreed to the increase in the Line of Credit as
hereinabove set forth, subject to the terms hereof; and,
WHEREAS, in addition to the above the parties have agreed to make certain
amendments to the Line of Credit Agreement, for which they have agreed to enter
into this Amended and Restated Line of Credit Agreement.
NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto follows:
Section 1. DEFINITIONS:
As used herein and in any other document made or delivered pursuant to
this Agreement, the following terms shall have the following meanings, unless
the context otherwise requires:
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A. Advance - shall mean the definition assigned such term in Section 2.02
hereof.
B. Affiliate - means any Person (1) which directly or controlled by, or is
under common indirectly controls, or is controlled by, or is under common
control with the Borrower or a Subsidiary; (2) which directly or indirectly
beneficially owns or holds five per cent 15%) or more of any class of voting
stock of the Borrower or any Subsidiary; or which directly or stock of which is
(3) five percent (5%) or more of the voting stock of which is directly or
indirectly beneficially owned or held by the Borrower or a Subsidiary. The term
"control" means the possession, directly, or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract, or otherwise, but shall
not include potential ownership of any Person of stocks through options rights
or warrants prior to such time as such options, rights or warrants are exercised
in a manner which results in such Person having actual and immediate voting
power with respect to five percent (5%) or more of such stock.
C. Agreement - shall mean this Amended and Restated Line of Credit
Agreement as the same may from time to time be amended or supplemented.
D. Applicable Interest Rate - shall mean the interest rate to be paid by
Borrower to the Bank pursuant to Section 2.05 of the Agreement.
E. Bank - shall mean BANCO POPULAR DE PUERTO RICO, a banking corporation
organized and existing under the laws of the Commonwealth and any surviving or
resulting corporation.
F. Borrower - shall mean WALLACE INTERNATIONAL DE PUERTO RICO, INC. and
INTERNATIONAL SILVER DE PUERTO RICO, INC. both corporations organized and
existing under the laws of the State of Delaware, authorized to do business in
the Commonwealth, and their successors and assigned and any surviving, resulting
or transferee corporation.
G. Borrowing Date - shall mean the day an Advance is disbursed by the Bank
hereunder as set forth in Section 204 hereof.
H. Business Day - shall mean a day other than a Saturday, a Sunday or any
other day on which banking institutions in the Commonwealth are authorized or
required by law to close.
I. Closing Date - means October 15, 1996.
J. Continuing and Unlimited Guaranty - shall mean each of those Continuing
and Unlimited Guaranty subscribed by each Guarantor on September 30, 1992 as
each have been
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amended and restated by those Amended and Restated Guaranty Agreements dated as
of the date hereof (herein the "Amended and Restated Guaranty Agreements").
K. Commonly Controlled Entity - shall mean an entity, whether or not
incorporated, which is under common control with the Borrower within the meaning
of Section 414 (b) or 414(c) of the U.S. Internal Revenue Code, as amended.
L. ERISA - shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations and published interpretations
thereof.
M. Event of Default - shall mean any of those events specified in Section
11 of the Agreement.
N. Final Payment Date - shall have the meaning assigned to such term in
Section 2.03 hereof.
O. GAAP - shall mean generally accepted accounting principles in effect
from time to time in the United States of America.
P. Guarantors shall mean WALLACE INTERNATIONAL SILVERSMITHS, INC., TOWLE
MANUFACTURING COMPANY and SYRATECH CORPORATION.
Q. Interest Period - shall have the definition assigned such term in
Section 2.05 hereof.
R. LIBOR Rate shall mean, with respect to any Borrowing Date on which the
Applicable Interest Rate shall be set, the offered quotation for the rate of
interest on deposits of United States dollars with a term equal to the
applicable Interest Period, in the London interbank market, as published by
Telerate Systems, Inc. (currently on page [4838] of the financial information
reporting services furnished electronically by Telerate Systems, Inc.) at 9:00
a.m. Eastern Standard Time of the applicable Borrowing Date. If on any Borrowing
Date the Bank cannot determine the LIBOR Rate on the basis of the foregoing
procedure, the LIBOR Rate shall be such rate as set forth above for the Business
Day immediately preceding the Borrowing Date.
S. Line of Credit - shall mean the revolving line of credit up to the
aggregate principal SUM of TEN MILLION DOLLARS ($10,000,000.00) established
pursuant to the Agreement.
T. Loan Documents - shall mean the Agreement, the Continuing and Unlimited
Guaranties and the Master Promissory Note.
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U. Substitute Master Promissory Note - shall mean the Master Promissory
Note issued as of the date hereof by the Borrower in favor of the Bank for the
principal amount of $10,000,000, in substitution of that certain Master
Promissory Note for $4,000,000 issued by the Borrower to the Bank as January 25,
1993.
V. Multiemployer Plan - shall mean a Plan described in Section 4001(a)(3)
of ERISA.
W. PBGC - shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
X. Person - shall mean an individual partnership corporation, business
trust, joint stock company, trust, unincorporated association, joint venture,
governmental authority, or other entity of whatever nature.
Y. Plan - shall mean any pension plan which is covered by Title IV of
ERISA and in respect of which the Borrower or a Commonly Controlled Entity is an
"employer" as defined in Section 3(5) of ERISA.
Z. Pricing Discount - shall mean 0.30%.
AA. Pricing Margin - shall mean 1.70%.
BB. Prime Rate - shall mean the rate of interest published in "The Wall
Street Journal" as the prime rate charged by the principal commercial banks in
the City of New York, New York. Provided, that in the event of more than one
such published rate on any given date, the highest of such rates that legally
may be charged to Borrower in accordance with the applicable laws and
regulations shall apply. Changes in the interest rate shall be effective on the
announced date of any change in the Prime Rate. No representation is made by the
Bank that the Prime Rate is the lowest, the best or a preferred rate of
interest.
CC. Principal Office - shall mean than Bank's office at Popular Center
Building, 209 Munoz Rivera Avenue, Hato Rey, Puerto Rico 00918.
DD. Prohibited Transaction - shall mean any transaction set forth in
Section 406 of ERISA or Section 4935 of the U.S. Internal Revenue Code of 1986,
as amended.
EE. Regulatory Change - shall mean any change after the date of this
Agreement in United States, Commonwealth or municipal laws, ordinances or
regulations or the adoption or making after such date of any interpretations,
directives or requests applying to a class of banks, including the Bank, under
any United States, Commonwealth or municipal laws, ordinances or regulations by
any court or governmental or monetary authority charged with the interpretation
or administration thereof.
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FF. Reportable Event - shall mean any of the events set forth in Section
4043 of ERISA.
GG. Subsidiary - shall mean as to the Borrower a corporation of which
shares of stock having ordinary voting power (other than stock having such power
only by reason of the happening of a contingency) to elect a majority of the
board of directors or the managers of such corporation are at the time owned, or
the management of which is otherwise controlled, directly, or indirectly through
one or more intermediaries, or both, by the Borrower.
HH. Termination Date - shall have the definition assigned in Section 2.03
hereof.
Section 2. THE LINE OF CREDIT
Section 2.01 The Commitment
The Bank agrees to establish and does hereby establish in favor of the
Borrower a revolving line of credit (the "Line of Credit"), including whatever
loans or advances the Bank may have made to Borrower prior to this date or which
may hereinafter make under the Line of Credit. The Line of Credit shall be for
the sum of up to TEN MILLION DOLLARS ($10,000,000) and shall be used by the
Borrower for its working capital requirements and/or to advance funds as
intercompany loans to its parent company, Wallace International Silversmiths,
Inc. and its ultimate parent Syratech Corporation, for their respective working
capital needs.
Section 2.02 The Master Promissory Note
The advances to be made by the Bank to the Borrower under the Line of
Credit (each, an "Advance") shall be evidenced by a Master Promissory Note of
Borrower to the order of the Bank" substantially in the form of Exhibit A
hereto.
Section 2.03 Duration of the Line of Credit
The Line of Credit shall be in effect for the term commencing from the
date hereof until May 31, 1997 (the "Termination Date"), unless sooner
terminated for the reasons hereinafter set forth; provided, however, that the
Bank, based on the Borrower's financial performance and compliance with this
Agreement and with any other agreement with the Bank, may agree to extend the
Line of Credit beyond the Termination Date for such period of time as agreed to
by the Bank and the Borrower under same terms and conditions, or modified terms
and conditions. In the event of any extension of the Line of Credit beyond the
Termination Date, the expiration of such extension period shall be the
Termination Date for all purposes of this Agreement. Upon the expiration of the
Line of Credit on the Termination Date, or any renewal thereof, all moneys owing
to the Bank under or related, with the Line of Credit shall become due and
payable within thirty (30) days after the Termination Date, as it
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may be extended as herein provided (herein the "Final Payment Date"), it being
hereby acknowledged and agreed that the Bank will not disburse any Advance
hereunder to which the Borrower has selected the Applicable Interest Rate to be
the LIBOR Rate, for an Interest Period maturing more than thirty (30) days
beyond the Termination Date.
Section 2.04 Disbursement; Notice and Manner of Borrowing.
(a) The Line of Credit shall be disbursed in Advances in such amounts as
periodically requested by the Borrower in accordance with the terms hereof. The
day that the Bank disburses any Advance to the Borrower hereunder shall be a
Borrowing Date and on such date the Applicable Interest Rate to accrue on such
Advance shall be determined. Thereupon, any such Advance shall accrue interest
at the Applicable Interest Rate selected by the Borrower in accordance with the
terms of Section 2.05 hereof.
Section 2.05 Applicable Interest Rate and Payment of Principal
(a) On each Borrowing Date, the Borrower shall have the option to select
the Applicable Interest Rate to be applied to Advances. In this respect, the
Borrower shall select among either (i) the Prime Rate less the Pricing Discount
with the Prime Rate fluctuating concurrently with any changes in the Prime Rate
from time to time, and/or (ii) LIBOR Rate plus the Pricing Margin. The
Applicable Interest Rate on all moneys advanced by the Bank to the Borrower
under the Line of Credit shall be paid monthly in arrears, on the twenty-fifth
(25th) day of each month on the unpaid principal balance thereof and until
payment in full, calculated on a daily basis, based upon a 360-days year,
but computed for the actual number of days elapsed for the term of each Advance.
The Borrower hereby agrees and acknowledges that any Advances to be made
hereunder at the LIBOR Rate shall be subject to the Bank's availability of funds
therefor and that to the extent that no such funds are available, the Applicable
Interest Rate to such Advance shall be the Prime Rate less the Pricing Discount.
(b) The principal amount of any Advance requested by the Borrower to the
Bank at the Prime Rate shall be payable at any time during the term of the Line
of Credit, subject to the provisions of Section 4 hereof, but in no event later
than the Final Payment Date, except that in the event of any extension hereof in
accordance with Section 2.03, the aggregate principal amount of all Advances to
which the Applicable Interest Rate is based on the Prime Rate shall become due
and payable thirty (30) days after the expiration of such extension. With
respect to any Advance requested by the Borrower to the Bank to which the
Applicable Interest Rate is based on the LIBOR Rate, the Borrower shall, at its
option, select among interest and maturity periods (the "Interest Periods") of
up to 30, 60 or 90 days, provided that interest thereon shall be paid monthly as
set forth in (a) above and principal upon maturity at the expiration of such
Interest Period. Notwithstanding any provision herein to the contrary
notwithstanding, all amounts of principal and interest outstanding hereunder
shall become due and payable on the Final Payment Date, subject to any
extensions of the Termination Date as provided in Section 2.03 of this
Agreement.
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(c) Upon the occurrence and continuance of an Event of Default hereunder
the Applicable Interest Rate shall be 2% over the then Applicable Interest Rate
(the "Default Rate").
Section 2.06. Composition of Collateral. To secure the full payment of
the Line of Credit, interest thereon, all costs and to further secure compliance
by the Borrower with each and every one of its obligations and expenses as
provided herein, the Guarantors shall execute Amended and Restated Guaranty
Agreements pursuant to which the Guarantors acknowledge and agree to the
continuation and effectiveness of the respective Continuing and Unlimited
Guaranty executed by each of them jointly and severally ("in solidium")
guaranteeing and securing the due payment and performance of the obligations of
the Borrower hereunder.
Section 3. COMMITMENT AND SERVICE FEES - No commitment fee will be levied
as part of the transaction subject of the Agreement.
Section 4. PREPAYMENTS
The Borrower may prepay the Loan in whole or in part at any time subject
to the provisions hereof. Any partial prepayment shall be made in an aggregate
amount of not less than FIFTY THOUSAND DOLLARS ($50,000) and shall be applied to
the Advances disbursed hereunder in the inverse order of their respective
maturities. In the event, nonetheless, of any prepayment of Advances to which
the Applicable Interest Rate is determined based on the LIBOR Rate made on a
date other than on the last day of the Interest Period applicable thereto, the
Borrower shall reimburse the Bank on demand for any loss or expense that the
Bank may incur by reason of the liquidation or reemployment of deposits or other
funds acquired by the Bank to fund any such Advances. Any communication by the
Bank to the Borrower in such connection shall be conclusive and binding absent
manifest error. Any prepayment of Advances to which the Applicable Interest Rate
is based on the Prime Rate shall not entail the payment of a prepayment penalty
upon the amount so prepaid.
Section 5. REGULATORY CHANGE
If, by any reason of any Regulatory Change the Bank is subjected to any
tax or levy or any additional condition in respect of its obligations or rights
hereunder, and if any such Regulatory Change results in an increase in the cost
to the Bank of making, accepting, funding, or maintaining such obligations or
rights or a decrease in the total amount payable to the Bank hereunder, then
Borrower will pay to the Bank such additional amount as will fully compensate
the Bank for such increased cost or payment of such reduction. The Bank shall
set forth such additional amounts and the cause thereof in a notice to Borrower,
which notice shall be conclusive in the absence of demonstrable error.
Section 6. CONDITIONS PRECEDENT
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A. Conditions Precedent to Agreement. The obligations of the Bank under
this Agreement are subject to the conditions the Bank under this agreement are
precedent that the Bank shall have received on or before the day of its
execution, or at such later dates specified by the Bank, each of the following,
in form and substance satisfactory to the Bank:
(a) the Master Promissory Note;
(b) the Amended and Restated Guaranty Agreements;
(c) a recent Good Standing Certificate from the Department of State
of the Commonwealth and of the State of Delaware of each Borrower;
(d) a certificate signed by Borrower's Chief Financial Officer
certifying that no Event of Default and no event which with the lapse of time or
giving of notice or both would become an Event of Default, shall have occurred
and be continuing;
(e) certified copies of all corporate actions taken by Borrower and
Guarantors, including resolutions of their Boards of Directors, authorizing the
execution, delivery and performance of the Loan Documents to which they are
party and each other document to be delivered pursuant to this Agreement;
(f) a certificate (dated as of the date of this Agreement) of the
Secretary of Borrower and Guarantors certifying the names and true signatures of
the officers of Borrower and Guarantors authorized to sign the Loan Documents to
which they are party and the other documents to be delivered by Borrower under
the Agreement;
(g) such additional documents which the Bank may reasonably request.
B . Additional Conditions Precedent to Effectiveness of the Line of
Credit. The obligation of the Bank to disburse any Advance shall be subject to
the further conditions precedent that on the Closing Date:
(a) The following statements shall be true and shall be deemed to
have been represented by the Borrower as being true on the Closing Date, and the
Bank shall have received certificates signed on behalf of the Borrower by its
designated representative and its chief financial officer, dated the Closing
Date, stating that:
(i) The representations and warranties contained in Section 10
of this Agreement are true and correct on and as of the Closing Date,
(ii) The covenants contained in Sections 7, 8 and 9 of the
Agreement have been fully complied with in all material respects on and as of
the Closing Date, and
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(iii) No event has occurred and is continuing, or would result
from the granting of the Line of Credit, or the other transactions contemplated
hereby, which constitutes an Event of Default or would constitute an Event of
Default but for the giving of notice or the lapse of time or both.
Section 6.01. Conditions Precedent to the disbursement of Advances.
The disbursement of any Advance hereunder by the Bank shall be further
subject to the following conditions precedent:
(a) Representations and Warranties. The representations and
warranties contained in Section 10 hereof shall be true in all material respects
on and as of the date of making any such Advance with the same effect as if such
representations and warranties had been made on and as of the date hereof,
except to the extent that such representations and warranties expressly relate
to an earlier date, and on the date of any Advance, no Event of Default shall
have occurred and be continuing.
(b) Covenants. All the respective covenants set forth in sections 7,
8 and 9 hereof shall have been fully complied with in all material respects.
(c) Collateral. The Continuing and Unlimited Guaranties shall be and
remain in full force and effect and any additional collateral pertaining to any
such Advance shall have been duly executed, granted and delivered.
(d) No material adverse change shall have occurred in the financial
condition of the Borrower since the date of this Agreement.
Section 7- AFFIRMATIVE COVENANTS
So long as any obligation made under the terms of this Agreement is
outstanding:
(a) Punctual Payment - The Borrower shall duly and punctually pay
the interest accrued and/or principal pursuant to the terms of this Agreement.
(b) Application of Advances. The Borrower shall apply the proceeds
advanced under the Line of Credit for the specific purpose herein agreed to by
the Borrower and the Bank.
(c) Insurance - The Borrower shall at all times keep insured all
real and personal property owned by it with financially sound and responsible
insurance companies reasonably acceptable to the Bank in at least the amounts
and against such risks of the kinds customarily insured against by corporations
of established reputation engaged in the same or similar business and consistent
with industry practice. In respect to property specifically
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pledged to the Bank, such insurance shall contain a standard loss payable
endorsement in favor of the Bank. Borrower shall also maintain public liability
insurance against claims for personal injury, death or property damage suffered
by others upon or in or about the premises used by the Borrower in its
operations and maintain all such workmen's compensation or similar insurance as
may be required under the laws of any jurisdiction in which it may be engaged in
business. At the request of the Bank, Borrower shall from time to time deliver
to the Bank a copy of the insurance policies carried by Borrower.
(d) Maintenance of Properties - The Borrower shall maintain in sound
operating conditions all material items of the properties owned by it and shall
carry out all the appropriate and necessary improvements and repairs in order to
maintain the highest efficiency of said properties. For these purposes, it shall
be understood that the Borrower may carry out improvements, replacements and
reconstructions which may add to the value of the properties.
(e) Inspections - The Bank shall have the right to examine and
inspect, from time to time, during normal business hours, the books and records
of the Borrower. Prior to any inspection, the Bank shall give Borrower ten (10)
days prior written notice.
(f) Operating Account - Borrower agrees to maintain its main
operating accounts with the Bank.
(g) ERISA - In the event that ERISA applies or may apply to Borrower
at any time in the future, Borrower shall comply in all material respects with
the applicable provisions of ERISA, as the same may be amended, and furnish to
the Bank, (i) as soon as possible, and in any event within thirty (30) days
after any executive officer of the Borrower knows or has reason to know that any
circumstances exist that constitute grounds entitling the PBGC to institute
proceedings to terminate a Plan subject to ERISA with respect to the Borrower or
any Commonly Controlled Entity, and promptly but in any event within five (5)
Business Days of receipt by the Borrower or any Commonly Controlled Entity of
notice that the PBGC intends to terminate a Plan or appoint a trustee to
administer the same, and promptly but in any event within five (5) Business Days
of the receipt of notice concerning the imposition of withdrawal liability with
respect to the Borrower or any Commonly Controlled Entity, the Borrower will
deliver to the Bank a certificate of the Chief Financial Officer of the Borrower
setting forth all relevant details' and the action which, the Borrower proposes
to take with respect thereto.
(h) Reports to other creditors - In the event Borrower incurs in a
material default under any indenture, loan, credit, or similar agreement it
shall promptly after the furnishing thereof, deliver to the Bank copies of any
statement or report furnished to any other party pursuant to the terms of such
indenture, loan, credit, or similar agreement and not otherwise required to be
furnished to the Bank pursuant to the Agreement.
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(i) Proxy statements, etc. - Promptly after the sending or filing
thereof, the Borrower shall furnish to the Bank copies of all proxy statements,
financial statements, and reports which the Borrower or any Subsidiary sends to
its stockholders, and copies of all regular, periodic, and special reports, and
all registration statements which the Borrower or any Subsidiary files with any
governmental authority.
(j) Rights and Franchises - Borrower will maintain, preserve and
renew all material rights, powers, licenses, privileges, franchises and tax
exemption grants possessed by it in Puerto Rico, insofar as in the bona fide
opinion of the Board of Directors of Borrower such rights, powers, privileges,
licenses, franchises and grants continue to be advantageous to Borrower.
(k) Environmental - Borrower shall be and remain in all of all
material respects, in compliance with the provisions federal, state, and local
environmental, health, and safety laws, codes and ordinances, and all rules and
regulations issued any notice of a received from any thereunder; notify the Bank
immediately of any notice of a hazardous discharge or environmental complaint
received from any governmental agency or any other party; notify the Bank
governmental agency or any other party; notify the Bank immediately of any
material hazardous discharge from or affecting its premises; immediately contain
and remove the same, in compliance with all applicable laws; promptly pay any
fine or penalty assessed in connection therewith; and upon receipt of notice by
the Bank of a complaint from any governmental agency or any other party, permit
the Bank during normal business hours and upon ten (10) days prior written
notice, to inspect the premises, and to inspect all books, correspondence, and
records pertaining thereto.
(l) Change of Principal Office. The Borrower will give the Bank at
least sixty (60) days prior written notice of any relocation of its chief
executive office or principal place of business.
(m) Litigation and Notice of Dispute. The Borrower will, promptly
after obtaining knowledge thereof, notify the Bank in writing of (i) any action,
suit or proceeding at law or in equity or by or before any governmental
instrumentality or agency involving a claim not covered by insurance involving
the Borrower which (A) has remained unsettled for a period of 180 days from the
commencement thereof and involves claims for damages or relief in an amount
greater than $1,000,000, or (B) has resulted in a final judgment or judgments
for the payment of money in an amount greater than $1,000,000, or (C) has
resulted in an attachment or lien on the Borrower's assets or holdings for said
amount, or (ii) any material labor dispute resulting in or threatening to result
in a strike against the Borrower and which might have a material adverse effect
on its operations or financial position.
(n) Defaults. The Borrower shall promptly notify the Bank of the
occurrence of any event, which with the giving of notice or the lapse of time,
or both, would
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result in an Event of Default, and the action that the Borrower proposes to take
with respect thereto.
Section 8. NEGATIVE COVENANTS
So long as the Borrower is owing any amounts, or has any obligation in
favor of the Bank arising from or related to this Agreement, the Borrower will
not, without the prior written consent of the Bank, which consent shall not be
unreasonably withheld:
(a) liquidate or dissolve;
(b) sell, lease, transfer or dispose of any of their assets other
than in the ordinary course of business and for adequate consideration;
(c) merge, consolidate with or into any other entity;
(d) directly or indirectly create, incur, assume or suffer to exist
any mortgage, pledge, encumbrance, lien, assignment or charge of any kind upon
their properties or assets including but not limited to its inventory of silver,
whether now owned or hereinafter acquired, other than those agreed with the
Bank; except (i) any mortgage, pledge, encumbrance, lien, assignment or charge
existing in favor of the Bank on the date of this Agreement, (ii) liens for
taxes, assessments or other government charges or levies on any property
provided that they are being contested in good faith and by appropriate
proceeding, (iii) surety, utility, appeal or similar bonds in the ordinary
course of business, (iv) pledges or deposits to secure obligations under
workmen's compensation, (v) good faith deposits in the ordinary course of
business made in connection with bids, contracts or leases, (vi) purchase money
mortgages constituted in the ordinary course of business; (vii) leases
reasonably necessary for Borrower's operations; and (viii) in addition to the
foregoing, any mortgage, pledge, encumbrance, lien, assignment or charge not to
exceed in the aggregate $750,000.00;
(e) secure, issue, assure or incur in any indebtedness for borrowed
money on behalf of or to guaranty the obligations of any other Person; except
that Borrower may advance funds as loans to its parent company Wallace
International Silversmiths, Inc. and its ultimate parent Syratech Corporation in
a sum not to exceed TEN MILLION DOLLARS ($10,000,000) in the aggregate;
(f) purchase or acquire any shares of stock or obligation or make
loans or advances to or investment in any individual, firm or corporation,
except in the ordinary course of business;
(g) engage in any other business activity other than the present
operations of Borrower and related business activities for which Borrower was
organized;
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(h) make or have outstanding at any time any loan, advance, other
than that extended in connection with their regular trade activity and in the
ordinary course of business; and other than in respect to the permitted
exceptions set forth in Section 8(d) and (e) above;
(i) purchase, acquire, redeem, retire or become obligated to
purchase, acquire, redeem or retire any of the outstanding shares of the capital
stock of Borrower and/or of Guarantor whether now or hereinafter outstanding;
(j) permit their financial condition to suffer adverse material
changes;
(k) permit their stockholders to pledge, assign or encumber their
stock.
(l) become involved in any form whatsoever in any legal matter which
may result in a detrimental effect to its going concern.
(m) permit any merger or consolidation of any of the Guarantors.
Section 9- FINANCIAL COVENANTS
As long as the Borrower is owing any amounts under this Agreement, the
Borrower covenants that it will:
(a) within a period not exceeding one hundred twenty (120)days after
the end of each fiscal year, provide the Bank with:
(i) the annual audited financial statements of Borrower
(including Balance Sheet, Income Statement, Statement of Changes in
Stockholder's Equity and a Statement of Cash Flow) duly audited by a Certified
Public Accountant acceptable to the Bank all prepared in accordance to GAAF; it
being understood that Deloitte & Touche is presently acceptable to the Bank;
(ii) the annual audited financial statements of Syratech
Corporation (including Balance Sheet, Income Statement, Statement of Changes in
Stockholder's Equity and a Statement of Cash Flow) duly audited by a Certified
Public Accountant acceptable to the Bank all prepared in accordance to GAAP; it
being understood that Deloitte & Touche is presently acceptable to the Bank;
(iii) the annual unaudited financial statements of Wallace
International silversmiths, Inc. and Towle Manufacturing Company (including
Balance Sheet and Income Statement) all prepared in accordance with GAAP;
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14
(iv) evidence satisfactory to the Bank that all premiums in
respect to all required insurance policies have been paid;
(v) annual consolidating Balance Sheet, Income Statement and
Statement of Cash Flows of Syratech Corporation and its wholly owned
subsidiaries;
(vi) a certificate signed- by Borrower's President or Chief
Financial officer certifying that no Event of Default and no event which with
the lapse of time or giving of notice or both would become an Event of Default,
shall have occurred and be continuing. If an Event of Default has occurred and
is continuing a statement as to the nature thereof and the action which Borrower
proposes to take to cure it.
(b) Within a period not exceeding forty five (45) days after the
close of each quarter of Borrower's fiscal year, Borrower shall provide the Bank
with:
(i) unaudited financial statements, including Balance Sheet
and Income Statement of Borrower and Guarantors all prepared in accordance to
GAAP.
(ii) Combining statements of Syratech Corporation prepared in
accordance to GAAP.
(c) Maintain at all times a standard system of accounting and proper
books of record and of account in which full and correct entries shall be made
of its transactions, all in accordance with sound accounting practices; and will
provide on its books for each fiscal year, in accordance with sound accounting
practices, all proper reserves, including reserves for depreciation, depletion,
obsolescence and/or amortization of its properties and assets during such year.
(d) Pay and discharge, if so required, all taxes, assessments and
governmental charges or levies imposed upon it, its income, its profits, its
properties, real, personal or mixed, or its assets, and all claims for labor,
services, materials and supplies which, if unpaid, might by law become a lien or
charge upon any of its property or assets; provided that the Borrower shall not
be required to pay any such tax, assessment, charge, levy, or claim while it
shall be contesting the same in good faith by appropriate proceedings if it
shall have provided on its books the appropriate and adequate reserves as may be
required by sound practice (segregated to the extent required by sound practice)
with respect thereto.
(e) Comply in all material respects with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic, federal or foreign, in respect of the conduct of
its business and property (including applicable statutes, the ownership of its
property (including applicable statutes, regulations, orders and restrictions
relating to environmental standards or controls and relating to restrictions on
prices, wages and profits).
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15
(f) Furnish to the Bank -such other information regarding its
business affairs as reasonably requested.
Section 10. REPRESENTATIONS AND WARRANTIES OF BORROWER
The Borrower represents and warrants as follows:
(a) The Borrower is a corporation organized and existing in good
standing under the laws of the State of Delaware authorized to do business and
in good standing in Puerto Rico.
(b) Since December 31, 1995, neither the business, operations,
affairs, the property nor the projects of the Borrower have been materially and
adversely affected in any way as a result of any statutory or regulatory change,
condemnation or acquisition, intended or actual, renegotiation, price
redetermination or revocation of license, permit or right to do business, or of
loss or damage (whether or not insured against) by fire, explosion, accident,
strike, lockout, riot, flood, drought, storm, earthquake, lightning, fraud,
civil commotion, sabotage, malicious mischief, aircraft, vehicle, smoke,
embargo, or act of God.
(c) The execution and delivery and performance by Borrower of the
Loan Documents and the other documents to which it is or is to be a party have
been duly authorized by all necessary official action and do not (i) require any
consent or approval of the Commonwealth of Puerto Rico or any instrumentality,
branch or subdivision thereof, (ii) violate in any material respects any
provision of any law, rule, regulation, order, writ, Judgment, injunction,
decree, determination or award presently in effect having applicability to it or
of its enabling legislation, or (iii) result in a material breach of or
constitute a default under any indenture or loan or credit agreement or any
other agreement, lease or instrument to which it is a party or by which its
properties may be bound or affected.
(d) No authorization, consent, approval, license, exemption of or
filing or registration with any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, is or will be
necessary to the valid execution, delivery or performance by it of the Loan
Documents or of any document related to or pertaining to the same.
(e) The Loan Documents constitute, and all of the other related
documents to which Borrower is or is to be a party, when delivered hereunder
will constitute, legal, valid and binding obligations of Borrower enforceable
against it in accordance with their respective terms, except as enforceability
thereof may be limited by (i) bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors rights in general; and (ii) general
principles of equity (regardless of whether enforcement is sought by proceedings
in equity or at law).
(f) Its balance sheet as of December 31, 1995 and its related
statements of income and of cash flow for the fiscal year then ended, evidence
and fairly represent its
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16
financial condition as at such dates and the results of Borrower's operations
for the periods ended on such date, all in accordance with GAAP applied on a
consistent basis, and since December 31, 1995, there has been no material
adverse change in such condition or operation.
There are no material actions, suits or proceedings pending or, to its
best knowledge, threatened against or affecting it or its properties, before any
court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which, in the opinion of Borrower's
management, the Borrower's potential liability on all known claims if determined
adversely to it, would have a material adverse effect an the financial position
of Borrower.
(h) It is not in default in any material respects in the
performance of any term, covenant or agreement on its part to be performed
under any agreement or instrument evidencing or securing or relating to any
indebtedness owed or to be owed by it, when required to be performed (or, if
permitted by the terms of the relevant document, within any applicable grace
period).
(i) It has paid or properly discharged all material taxes,
assessments, or liens imposed upon its income, operations and properties.
(j) Borrower has duly complied in all material respects with, and
its businesses, operations, assets, equipment, property, leaseholds, or other
facilities are in compliance in all material respects with, the provisions of
all federal, state, and local environmental, health, and safety laws, codes and
ordinances and all rules and regulations promulgated thereunder. The Borrower
has been issued and will maintain all required federal, state, and local
permits, licenses, certificates, and approvals relating to (1) air emissions;
(2) discharges to surface water or groundwater; (3) noise emissions; (4) solid
or liquid waste disposal; (5) the use, generation, storage, transportation, or
disposal of toxic or hazardous substances or wastes (intended hereby and
hereafter to include any and all such materials listed in any federal, state, or
local law, code, or ordinance and all rules and regulations promulgated
thereunder as hazardous or potentially hazardous; or (6) other environmental,
health, or safety matters. Borrower has not received notice of, or to the best
of its knowledge knows of, or suspects facts which might constitute any material
violations of any federal, state, or local environmental, health, or safety
laws, codes or ordinances and any rules or regulations promulgated thereunder
with respect to its businesses, operations, assets, equipment, property,
leaseholds, or other facilities. Except in accordance with a valid governmental
permit, license, certificate or approval, copies of which Borrower shall deliver
to the Bank, upon request, to the best of Borrower's knowledge, there has been
no material emission, spill, release, or discharge into or upon (1) the air; (2)
soils, or any improvements located thereon; (3) surface water or groundwater; or
(4) the sewer, septic system or waste treatment, storage or disposal system
servicing the premises, of any toxic or hazardous substances or wastes at or
from the premises; and accordingly, to the best of Borrower's knowledge, the
premises of the Borrower are free of all such toxic or hazardous substances or
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17
wastes. To the best of Borrower's knowledge, there has been no complaint, order,
directive, claim, citation, or notice by any governmental authority or any
person or entity with respect to (1) air emissions; (2) spills, releases, or
discharges to soils or improvements located thereon, surface water, groundwater
or the sewer, septic system or waste treatment, storage or disposal systems
servicing the premises; (3) noise emissions; (4) solid or liquid waste disposal;
(5) the use, generation, storage, transportation, or disposal of toxic or
hazardous substances or waste; or (6) other environmental, health, or safety
matters affecting the Borrower or its business, operations, assets, equipment,
property, leaseholds, or other facilities. To the best of Borrower's knowledge,
Borrower does not have any material indebtedness, obligation, or liability,
absolute or contingent, matured or not matured, with respect to the storage,
treatment, cleanup, or disposal of any solid wastes, hazardous wastes, or other
toxic or hazardous substances (including without limitation any such
indebtedness, obligation, or liability with respect to any current regulation,
law, or statute regarding such storage, treatment, cleanup, or disposal).
(k) Margin Regulation; Use of Proceeds. The Borrower is not engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of "purchasing" or "carrying" any "margin stock" within
the meaning of Regulation U of the Board of Governors of the Federal Reserve
System. The proceeds of the Revolving Loan shall be used solely to fund the
activities set forth in Section 2.01 hereof. No part of the proceeds of the
Revolving Loan will be used to purchase or carry any margin stock, or to extend
credit to others for that purpose, or for any purpose that violates the
provisions of Regulations U or X of the Board of Governors of the Federal
Reserve System.
(l) Investment Company Act. The Borrower is not an "investment
company", or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
(m) No Material Misstatements. None of the Loan Documents or any
certificate, schedule or statement, financial or otherwise, furnished to the
Bank by the Borrower and referred to in the Loan Documents contain a
misstatement of a material fact or omit to state any material fact necessary in
order to make the statements contained therein or herein not misleading, and
there is no fact which the Borrower has not disclosed to the Bank in writing
which materially adversely affects or so far as the Borrower can now foresee,
will materially adversely affect the properties, business prospects, profits or
condition (financial or otherwise) of the Borrower taken as a whole or the
ability of the Borrower to perform this Agreement or any transactions
contemplated therein or thereby.
(n) Compliance. As of the date hereof, the Borrower complies with
all applicable laws, rules and regulations and orders of any governmental
authority, non-compliance with which would have a material adverse effect on its
business, financial condition or results of operations or would materially
adversely affect the Borrower's ability to perform its obligations under the
Loan Documents, except laws, rules, regulations or orders
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18
being contested by it in good faith and by appropriate proceedings which provide
for the stay of the applicability of such law, rule, regulation or order during
the pendency thereof.
(o) Tax Returns. The Borrower has filed all tax returns required by law
to be filed, and has paid all taxes, assessments and other governmental charges
levied upon the Borrower and its properties, assets, income and franchises,
which are due and payable, other than those presently payable without penalty or
interest. The charges, accruals and reserves on the books of the Borrower in
respect of Federal and state or Commonwealth taxes for all fiscal periods are
adequate in the opinion of the Borrower.
(p) Location of the Borrower. The principal place of business or the chief
executive office of the Borrower is located at
(q) ERISA. Each Plan (including any Multiemployer Plan) adopted by the
Borrower is in compliance in all material respects with the applicable
provisions of ERISA and the regulations and published interpretations
thereunder. The Borrower and each ERISA Affiliate have paid all contributions
required to be paid pursuant to the terms of any Plan adopted for the Borrower
and its employees. There are no unfunded liabilities (as such term is defined in
ERISA) in existence as of the Closing Date with respect to any Plan. There has
been no complete or partial withdrawal and there exists no conditions which
could result in a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from any Multiemployer Plan within the contemplation of the
Multiemployer Pension Plan Amendments Act of 1980; and there is no proceeding by
a fiduciary of any Multiemployer Plan against the Company or any ERISA Affiliate
to enforce Section 515 of ERISA.
(r) Other Information. The Borrower represents and warrants to the Bank
that all information previously furnished in writing by the Borrower to the Bank
is true and correct, in all material respects.
Section 11. EVENTS OF DEFAULT
Whenever and as often as any of the following events occur and shall
continue beyond any applicable notice, grace or cure period, then, at the option
of Bank, the outstanding balance of any and all sums advanced hereunder with
accrued interest thereon shall become immediately due and payable without
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived:
(a) If the Borrower fails to pay the Bank five (5) Business Days after the
due date any sum of money which Borrower is obligated to pay hereunder whether
of principal or interest, or otherwise.
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19
(b) If the Borrower fails, within a term of 30 days after written notice
from the Bank, to comply with, perform or fulfill any of the terms, covenants or
conditions of any of the Loan Documents or of any document related to the same,
or of any other agreement with the Bank.
(c) If any representation or covenant herein made, or any certificate,
statement or information furnished by Borrower or the Guarantors pursuant to any
of the Loan Documents shall prove to be false or misleading in any material
respect.
(d) If the Borrower or any of its Affiliates or Subsidiaries, or the
Guarantors, shall (i) apply or consent to the appointment of a receiver, trustee
or liquidator of all or a substantial part of its assets, (ii) be unable, or
admit in writing its inability to pay its debts as they mature; (iii) make a
general assignment for the benefit of creditors; (iv), be adjudicated a bankrupt
or become insolvent, or (v) file a voluntary petition in bankruptcy or a
petition or an answer seeking an arrangement with creditors or to take
advantage of any bankruptcy, insolvency or readjustment of debt law or statute
or an answer admitting the material allegations of, or consent to, or default in
answering, a petition filed against the Borrower or the Guarantors in any
proceeding under any such law or statute and such Proceeding shall remain
undismissed and unstayed for a period of sixty (60) consecutive days.
(e) If an order, judgment or decree shall be entered, without the
application, approval or consent of the Borrower or the Guarantors, by any court
or competent jurisdiction, appointing a receiver, trustee or liquidator of all
or a substantial part of the assets of the Borrower or the Guarantors, and such
order, judgment or decree shall continue unstated and in effect for any period
of sixty (60) consecutive days.
(f) If after thirty (30) days prior written notice to Borrower any of the
Loan Documents, or any other legal document related with any of the foregoing
is invalidated, canceled, revoked or otherwise terminated.
(g) The filing of criminal charges against Borrower in connection with any
matter for which forfeiture of property of Borrower is a possible consequence.
(h) If any of the following events shall occur or exist with respect to the
Borrower and any Commonly Controlled Entity under ERISA which were not cured
within the time and as required by the PBGC: any Reportable Event shall occur;
complete or partial withdrawal from any Multiemployer Plan shall take place; any
Prohibited Transaction shall occur; a notice of intent to terminate a Plan shall
be filed, or a Plan shall be terminated; or circumstances shall exist which
constitute grounds entitling the PBGC to institute proceedings to terminate a
Plan, or the PBGC shall institute such proceedings; and in each case above, such
event or condition, together with all other events or conditions, if any, could
subject the Borrower to any tax, penalty, or other liability.
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20
(i) If the Bank receives notice of any hazardous discharge or an
environmental complaint related to Borrower, its operations or the premises from
which it conducts its business, from a source other than the Borrower, and the
Bank does not receive notice of such hazardous discharge or environmental
complaint from the Borrower within twenty-four (24) hours of the time the Bank
first receives said notice from a source other than the Borrower; or if any
federal, state or local agency asserts or creates a lien upon any or all of the
assets, equipment, property, leaseholds, or other facilities of the Borrower by
reason of the occurrence of a hazardous discharge or an environmental complaint;
or if any federal, state, or local agency asserts a claim against the Borrower
and/or its assets, equipment, property, leaseholds, or other facilities for
damages or cleanup costs relating to a hazardous discharge or an environmental
complaint; provided, however, that such claim shall not constitute a default if,
within sixty (60) Business Days of the occurrence giving rise to the claim, (a)
the Borrower can prove to the Bank's reasonable satisfaction that the Borrower
has commenced and is diligently pursuing either (i) a cure or correction of the
event which constitutes the basis for the claim, and continues diligently to
pursue such cure or correction to completion or (ii) proceedings for an
injunction, a restraining order, or other appropriate emergent relief preventing
such agency or agencies from asserting such claim, which relief is granted
within ten (10) Business Days of the occurrence giving rise to the claim and the
injunction, order, or emergent relief is not thereafter resolved or reversed on
appeal; and (b) in either of the foregoing events, the Borrower has posted a
bond, letter of credit, or other security satisfactory in form, substance, and
amount of both the Bank and the agency or entity asserting the claim to secure
the proper and complete cure or correction of the event which constitutes the
basis for the claims.
(j) If NationsBank or any of its successors or assigns shall have declared
a default under any agreement existing with the Guarantors and/or Borrower.
Section 12. MISCELLANEOUS
Section 12.01. Payments
(a) Unless otherwise directed by the Bank, all payments made by Borrower
of all amounts payable hereunder shall be made to the Bank at its Principal
Office, in lawful money of the United States of America.
(b) The obligation of Borrower to repay all amounts under this Agreement
shall be dischargeable only by payment in United States dollars.
Section 12.02. Payment; Performance of Any Act or Exercising of Any Right
on Non-Business Days
Whenever any payment to be made hereunder or under any related instrument
shall be stated to be due on a day which is not a Business Day, such payment
shall be made on the next
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21
succeeding Business Day with the same force and effect as if done on the
nominal date provided in this Agreement, and such extension of time shall in
such case be included in the computation of payment of interest. Likewise, if
the last date for performance of any act or the exercising of any right, as
provided in any of the Loan Documents, shall be a non-Business Day, such act
shall be performed or right exercised on the next succeeding Business Day with
the same force and effect as if done on the nominal date provided in the
applicable Loan Document.
Section 12.03. No Waiver; Cumulative Remedies
No failure or delay on the part of the Bank or any other holder of the
Master Promissory Note in exercising any right, power or remedy under any of the
Loan Documents or under any of the other related documents shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise or the exercise of any
other right, power or remedy hereunder or within any of the related documents.
The remedies provided under the Loan Documents and in the other related
documents provided are cumulative and not exclusive of any remedies provided by
law.
Section 12.04. Amendments
No amendment, modification, termination, or waiver of any provision of any
of the Loan Documents or any of the other related documents nor consent to any
departure by Borrower therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Bank and the Borrower, and then such
amendment, modification, termination or waiver shall be effective only in the
specific instance and for the specific purpose for which given. No notice to or
demand on Borrower in any case shall entitle Borrower to any other or further
notice or demand in similar or other circumstances.
Section 12.05. Addresses for Notices, etc.
All notices, requests, demands, directions and other communications
provided for in any of the Loan Documents and under the other related documents
shall be in writing and mailed or delivered to the applicable party at the
addresses indicated below:
If to Borrower:
WALLACE INTERNATIONAL DE PUERTO RICO, INC.
Attention: Mr. E. Merle Randolph
175 McClellan Highway
East Boston, Massachusetts 02128
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22
If to the Bank:
BANCO POPULAR DE PUERTO RICO
P.0. Box 362708
San Juan, Puerto Rico 00936-2708
Attention: Manager, Corporate Banking
or, as to each party, at such other address as shall be designated by such
party in a written notice to each other party complying as to delivery with the
terms of this Section. All such notices, requests, demands, directions and
other communications shall be effective when deposited in the mail or delivered
to addressed as aforesaid.
Section 12.06. Governing Law
This Agreement shall be governed by, and construed accordance with, the
laws of the Commonwealth of Puerto Rico.
Section 12.07. Severability of Provisions
Any provision of any of the Loan Documents which is prohibited or
unenforceable shall be ineffective to the extent of such prohibition or
enforceability without invalidating the remaining provisions hereof or thereof.
Section 12.08 Right of Set-off
Upon the occurrence and during the continuance of any Event of Default,
and to the extent permitted by law, the Bank is hereby authorized at any time
and from time to time, upon notice to Borrower to set off and apply any and all
deposits (other than special, escrow or similar type of deposits) at any time
held and other indebtedness at any time owing by the Bank to or for the credit
or account of Borrower against any and all obligations of Borrower now or
hereafter existing under any of the Loan Documents or under any other legal
instrument provided hereunder irrespective of whether or not the Bank shall
have made any demand under such Loan Documents or such other legal instruments
except in the case that prior notice is required hereunder. The rights of the
Bank under this provision are in addition to other rights and remedies
(including, without limitation, other right of set off), which the Bank may
have.
Section 12.09. Headings
Section headings in this Agreement are included herein for convenience of
reference only and shall not constitute a part of this Agreement for any other
purpose.
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Section 12.10. Singular and Plural Gender
Whenever used, the singular number shall include the plural, the plural
the singular, and the use of any gender shall be applicable to all genders.
Section 12.11. Execution in Counterparts
This Agreement may be executed on different dates and in several
counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
Section 12.12. Further Assurances
Borrower shall, upon the Bank's request, execute, acknowledge and deliver
any and all further instruments, documents, deeds, agreements and assurances as
may be reasonably necessary to confirm or perfect upon the Bank all rights and
privileges granted to the Bank under any of the Loan Documents.
Section 12.13. Assignment
The Bank shall have the right to assign this Agreement or any of the Loan
Documents or any of the Loan Documents or any of its rights hereunder and
thereunder and/or delegate any of its obligations hereunder and/or thereunder
to any third party or parties, provided, however that absent any Event of
Default, such assignment and/or delegation to such party may be made only to a
bank with a capital of no less than $1 billion. Borrower may not assign any of
its rights or delegate any of its obligations under this Agreement without the
prior written consent of the Bank.
Section 12.14. Indemnification
To the fullest extent permitted by law, Borrower agrees to protect,
indemnify, defend and save harmless the Bank, its directors, officers, agents,
consultants, attorneys and employees from and against any and all liability,
expense or damage of any kind or nature and from any suits, claims or demands,
including reasonable legal fees and expenses on account of any action or failure
to act by Borrower, whether in suit or not, arising out of any of the Loan
Documents or in connection therewith, including any and all environmental claims
and actions of whatever nature, unless such suit, claim or damage is caused by
the gross negligence and/or willful misconduct of the Bank, its directors,
officers, agents and employees. Upon receiving knowledge of any suit, claim or
demand asserted by a third party that the Bank believes is covered by this
Indemnity, the Bank shall give Borrower notice of the matter and an opportunity
to defend it, at Borrower's sole cost and expense, with legal counsel reasonably
satisfactory to the Bank The Bank may also decide to defend the matter through
counsel selected by it, the reasonable cost thereof to be for the account of
Borrower.
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Section 12.15. Benefits only for Parties
Nothing expressed or referred to in any of the Loan Documents, or in any
provision therein contained, is intended or will be construed to give any legal
or equitable right, remedy or claim under or in respect thereunder, to any
person other than the parties hereto, it being the intention of such parties
that the Loan Documents, the assumption of obligations and statements of
responsibilities thereunder and all other conditions and provisions thereof are
for the sole and exclusive benefit of such parties or their successors or
assigns and for the benefit of no other person, including, but not limited to
the stockholders, Subsidiaries, or Affiliates of Borrower.
Section 12.16. Payments by Bank
If Borrower shall fail to make any payment or to perform any act required
to be made or performed under any of the Loan Documents (other than payment of
principal or interest on the Loan) or if Borrower shall fail to make any payment
or to perform any act required to be made or performed under any other agreement
entered into by Borrower and any other party or parties; the Bank, fifteen (15)
days after prior written notice to the Borrower and without waiving or releasing
any obligation, default or Event of Default, may (but shall be under no
obligation to) at any time thereafter, make such payment or perform such act for
the account and at the expense of Borrower. All sums paid by the Bank, and all
costs and expenses (including, without limitation, reasonable attorney's fees
and expenses) so incurred, together with interest thereon at the rate then
applicable to the Line of Credit from the date of payment or incurring, to the
date of reimbursement, shall be refunded by Borrower, on demand, and shall
constitute additional indebtedness of Borrower to the Bank under this Agreement.
Section 12.17. Survival of Representations. etc.
All representations, warranties, covenants, releases, indemnities and
agreements of Borrower in the Loan Documents, or in any notice, certificate or
other document delivered by Borrower pursuant thereto are material and shall be
deemed to have been relied upon by the Bank, notwithstanding any investigation
made by it or on its behalf, and shall survive the delivery of the Loan
Documents, the disbursement of the Line of Credit and the repayment thereof.
Section 12.18. Costs, Expenses and Taxes
The Borrower agrees to pay on demand all reasonable costs and expenses
incurred by the Bank in connection with the preparation, execution, delivery,
filing, and administration of the Loan Documents and of any amendment,
modification, or supplement to the Loan Documents, including, without
limitation, the reasonable fees and out-of-pocket expenses of the counsel for
the Bank incurred in connection with advising the Bank as to its rights and
responsibilities under
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25
the Loan Documents. The Borrower also agrees to pay all such reasonable costs
and expenses, including court costs, incurred in connection with enforcement of
any of the Loan Documents, or any amendment, modification, or supplement
thereto, whether by negotiation, legal proceedings, or otherwise. In addition,
the Borrower shall pay any and all stamp and other taxes and fees payable or
determined to be payable in connection with the execution, delivery, filing, and
recording of any of the Loan Documents and the other documents to be delivered
under any such Loan Documents, and agrees to hold the Bank harmless from and
against any and all liabilities with respect to or resulting from any delay in
paying or omission to pay such taxes and fees.
Section 12-19. Entire Agreement
The Loan Documents contain the entire agreement between Borrower and the
Bank hereto with respect to the subject matter hereof and supersede all
negotiations, prior discussions, agreements, arrangements and understandings,
whether written or oral, relating to the subject matter hereof.
Section 12.20. General Provision. Whenever under the terms of this
Agreement the consent of the Bank is required, such consent shall not be
unreasonably withheld, delayed or denied.
Section 12.21. Controlling Agreement. In the event of any inconsistency
between this Agreement and the other Loan Documents, the provisions of this
Agreement shall be controlling.
IN WITNESS WHEREOF, the parties execute this Agreement at San Juan, Puerto
Rico, on the date(s) hereinbefore stated.
WALLACE INTERNATIONAL DE
PUERTO RICO RICO, INC.
By:________________________________
E. Merle Randolph
Vice President
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26
INTERNATIONAL SILVER DE
PUERTO RICO, INC.
By:_____________________________
E. Merle Randolph
Vice President
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COUNTY OF SUFFOLK
COMMONWEALTH OF MASSACHUSETTS ) SS
On this ____ day of October, 1996 before me appeared E. Merle Randolph,
Vice President of WALLACE INTERNATIONAL DE PUERTO RICO, INC. and INTERNATIONAL
SILVER DE PUERTO RICO, INC., to me known and known by me to be the party
executing the foregoing instrument by him to be his free act and deed and the
free act and deed of said corporation.
_____________________________
NOTARY PUBLIC
My Commission expires:
ATTACH COUNTY CLERK CERTIFICATE
BANCO POPULAR DE PUERTO RICO
By: ________________________________
Carmen Raquel Garcia Rullan
Assistant Vice President
AFFIDAVIT NO.:
Subscribed to before me by Carmen Raquel Garcia Rullan, of legal age,
married, banker and resident of Guaynabo, Puerto Rico, as Assistant Vice
President of BANCO POPULAR DE PUERTO RICO, personally known to me at San Juan,
Puerto Rico, this ___ day of October, 1996.
______________________________
NOTARY PUBLIC
157316-1
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