REVOLVING CREDIT AND TERM LOAN AGREEMENT
DATED AS OF APRIL 14, 2000
BY AND AMONG
NASHUA CORPORATION
AND CERTAIN OF ITS SUBSIDIARIES
AS THE BORROWER,
AND
THE LENDERS PARTY HERETO
AND
FLEET BANK-NH,
AS AGENT
NASHUA CORPORATION
REVOLVING CREDIT AND TERM LOAN AGREEMENT
TABLE OF CONTENTS
SECTION PAGE
ss.1. DEFINITIONS AND RULES OF INTERPRETATION..........................1
ss.1.1. Definitions..................................................1
ss.1.2. Rules of Interpretation.....................................11
ss.2. THE CREDIT FACILITIES...........................................12
ss.2.1. Amounts and Terms of the Facilities.........................12
ss.2.2. Fees........................................................14
ss.2.3. Reduction of Commitments....................................15
ss.2.4. Revolving Credit Notes......................................15
ss.2.5. Term Notes..................................................15
ss.2.7. Requests for Loans..........................................17
ss.2.8. Conversion and Continuation.................................17
ss.2.9. Funds for Loans.............................................18
ss.2.10. Letter of Credit Request Procedure; Funding;
Obligations.................................................18
ss.2.11. Collateral..................................................21
ss.2.12. Guaranties..................................................21
ss.2.13. Borrowing Base for Revolving Credit Loans...................21
ss.3. PREPAYMENT OF THE LOANS; RESERVES; CROSS DEFAULT
AND TERMINATION..................................................22
ss.3.1. Voluntary Prepayments.......................................22
ss.3.2. Mandatory Prepayments.......................................23
ss.3.3. Prepayment Fee..............................................23
ss.3.4. Cross Default and Termination...............................23
ss.4. CERTAIN GENERAL PROVISIONS.......................................23
ss.4.1. Funds for Payments..........................................23
ss.4.2. Computations................................................24
ss.4.3 Inability to Determine LIBOR................................24
ss.4.4. Illegality..................................................25
ss.4.5. Additional Costs, Etc.......................................25
ss.4.6. Capital Adequacy............................................26
ss.4.7. Certificate.................................................26
ss.4.8. Indemnity...................................................27
ss.4.9. Charges for Overdue Amounts.................................27
ss.4.10. Mitigation..................................................27
ss.4.11. Joint and Several Obligations...............................27
ss.5. REPRESENTATIONS AND WARRANTIES...................................28
ss.5.1 Organization, Standing, etc. of the Borrowers..............28
ss.5.2 Subsidiaries................................................28
ss.5.3 Qualification...............................................28
ss.5.4 Financial Information; Disclosure, Etc......................28
ss.5.5 Licenses, Etc...............................................29
ss.5.6 Tax Returns and Payments....................................29
ss.5.7 Indebtedness, Liens and Investments, Etc....................29
ss.5.8 Title to Properties, Liens..................................29
ss.5.9 Litigation, Etc.............................................30
ss.5.10 Authorization, Compliance with Other Instruments............30
ss.5.11 Governmental Consent........................................30
ss.5.12 Intentionally Omitted.......................................30
ss.5.13 Regulation U, Etc...........................................30
ss.5.14 Employee Retirement Income Security Act of 1974.............30
ss.5.15 Environmental Matters.......................................31
ss.5.16 Use of Proceeds.............................................31
ss.5.17 Investment Company Act, Public Utility Holding
Company Act.................................................32
ss.5.18 Disclosures.................................................32
ss.6. AFFIRMATIVE COVENANTS............................................32
ss.6.1. Records and Accounts..........................................32
ss.6.2. Financial Statements, Certificates and Information............32
ss.6.3. Legal Existence: Compliance with Laws. Etc...................34
ss.6.4. Insurance.....................................................34
ss.6.5. Payment of Taxes..............................................35
ss.6.6. Payment of Other Indebtedness, Etc............................35
ss.6.7. Further Assurances............................................35
ss.6.8. Depository Account............................................35
ss.6.9. Use of Proceeds...............................................35
ss.6.10. Composition of Management.....................................36
ss.6.11. Composition of Board..........................................36
ss.6.12. Operating Account.............................................36
ss.7. CERTAIN NEGATIVE COVENANTS.......................................36
ss.7.1. Indebtedness..................................................36
ss.7.2. Mortgages, Liens, Etc.........................................37
ss.7.3. Loans, Guarantees and Investments.............................37
ss.7.4. Leases........................................................38
ss.7.5. Mergers and Consolidations; Acquisitions......................38
ss.7.6. Sale of Assets................................................39
ss.7.7. Capital Expenditures..........................................39
ss.7.8. Distributions.................................................39
ss.7.9. Compliance with ERISA.........................................39
ss.7.10. Transactions with Affiliates..................................39
ss.7.11. Observance of Subordination Provisions, Etc...................39
ss.7.12. Environmental Liabilities.....................................39
ss.7.13. Subsidiaries..................................................40
ss.7.14. Issuance of Shares............................................40
ss.7.15. Subsidiary Distributions......................................40
ss.7.16. Material Adverse Effect.......................................40
ss.7.17. No Negative Pledges...........................................40
ss.8. FINANCIAL COVENANTS..............................................40
ss.9. DEFAULTS: REMEDIES...............................................41
ss.9.1 Events of Default; Acceleration................................41
ss.9.2 Remedies on Default, Etc.......................................43
ss.10. CLOSING CONDITIONS...............................................43
ss.10.1. Loan Documents, Etc............................................44
ss.10.2. Corporate Action...............................................44
ss.10.3. Incumbency Certificate.........................................44
ss.10.5. Payment of Fees................................................44
ss.10.6. Rittenhouse Transaction........................................45
ss.10.7. Closing Agenda.................................................45
ss.10.8. Title Insurance................................................45
ss.10.9. Employment Agreement...........................................45
ss.10.10.Valuation......................................................45
ss.11. CONDITIONS TO ALL LOANS..........................................45
ss.11.1. Accuracy of Representations: No Event of Default..............45
ss.11.2. Loan Request..................................................46
ss.11.3. No Legal Impediment...........................................46
ss.11.4. Due Diligence Complete........................................46
ss.11.5. No Material Adverse Change....................................46
ss.11.6. Field Audit...................................................46
ss.11.7. Environmental Site Assessment.................................46
ss.11.8. Appraisal.....................................................47
ss.12. THE AGENT........................................................47
ss.12.1. Appointment, Powers and Immunities............................47
ss.12.2. Reliance by Agent.............................................48
ss.12.3. Defaults......................................................48
ss.12.4. Rights as a Lender............................................48
ss.12.5. Indemnification...............................................48
ss.12.6. Non-Reliance on Agent and Other Lenders.......................49
ss.12.7. Failure to Act................................................49
ss.12.8. Resignation of Agent..........................................49
ss.12.9. Cooperation of Lenders........................................49
ss.12.10. Amendment ofss.l2.............................................50
ss.13. SETOFF, ETC......................................................50
ss.14. EXPENSES.........................................................50
ss.15. INDEMNIFICATION.................................................51
ss.15.1. General Indemnification.......................................51
ss.15.2. Foreign Currency Indemnification..............................51
ss.16. SURVIVAL OF COVENANTS. ETC......................................52
ss.17. ASSIGNMENT AND PARTICIPATION.....................................52
ss.17.1. Assignment by the Lenders.....................................52
ss.17.2. Assignment by Borrowers.......................................53
ss.17.3. Participations by the Lenders.................................53
ss.17.4. Replacement of Lender.........................................53
ss.18. FOREIGN LENDER...................................................54
ss.19. NOTICES, ETC.....................................................54
ss.20. GOVERNING LAW; JURISDICTION......................................55
ss.21. HEADINGS.........................................................56
ss.22. COUNTERPARTS.....................................................56
ss.23. ENTIRE AGREEMENT, ETC............................................56
ss.24. WAIVER OF JURY TRIAL.............................................56
ss.25. CONSENTS, AMENDMENTS, WAIVERS, ETC...............................56
ss.26. CONFIDENTIALITY..................................................57
ss.27. SEVERABILITY.....................................................57
ss.28. NATURE OF LENDER'S OBLIGATIONS...................................57
REVOLVING CREDIT AND TERM LOAN AGREEMENT
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This REVOLVING CREDIT AND TERM LOAN AGREEMENT is made as of the
14th day of April, 2000 by and among NASHUA CORPORATION, a Delaware
corporation ("NASHUA"), RITTENHOUSE, L.L.C., an Illinois limited liability
company ("RITTENHOUSE"), RITTENHOUSE PAPER COMPANY, an Illinois corporation
("RPC") (Nashua, Rittenhouse and RPC are referred to individually as a
"Borrower" and collectively as the "Borrowers") and FLEET BANK-NH, a bank
organized under the laws of the State of New Hampshire ("Fleet"), as a
Lender (as defined below), and as Agent (as defined below) for itself and
the other Lender, LASALLE BANK NATIONAL ASSOCIATION, a national banking
association ("LaSalle") and the other Lenders from time to time party
hereto.
ss.1. DEFINITIONS AND RULES OF INTERPRETATION.
ss.1.1. Definitions. The following terms shall have the meanings
set forth in this ss.1 or elsewhere in the provisions of this Credit
Agreement referred to below:
Affected Lender. The meaning specified in ss.17.4.
Affiliate. As applied to any Person, a spouse of such Person, any
relative (by blood, adoption or marriage) of such Person within the third
degree, any managing member, director or officer of such Person, any
corporation, association, firm or other entity of which such Person is a
managing member, director or officer and any other Person directly or
indirectly controlling, controlled by or under direct or indirect common
control with such Person.
Agent. Fleet in its capacity as agent for the Lenders hereunder,
as well as its successors and assigns in such capacity pursuant toss.12.8.
Available Revolving Commitment. The Total Revolving Commitment
less the sum of (a) the outstanding principal amounts advanced as Revolving
Credit Loans and (b) the aggregate amount of Letter of Credit Liabilities.
Base Rate. For any date, the variable per annum rate of interest
designated from time to time by the Agent as its "prime rate" in effect on
such day; provided, however, such prime rate is a reference rate and does
not necessarily represent the lowest or best rate being charged to any
customer. Each time the Base Rate changes, the interest rate on Base Rate
Loans shall change immediately without notice or demand of any kind.
Base Rate Loans. Loans bearing interest calculated by reference to
the Base Rate.
Base Rate Margin. The meaning specified in ss.2.6(a).
Borrower. NASHUA CORPORATION, RITTENHOUSE PAPER COMPANY OR
RITTENHOUSE, L.L.C.
Borrowers. NASHUA CORPORATION, RITTENHOUSE PAPER COMPANY and
RITTENHOUSE, L.L.C.
Borrowing Base. The sum of eighty percent (80%) of the Eligible
Accounts plus fifty percent (50%) of the Eligible Inventory.
Breakage Costs. With respect to any LIBOR Loan means, the product
of (i) the amount of the LIBOR Loan which is pre-paid or failed to be
borrowed times (ii) the difference between the existing effective rate on
such LIBOR Loan and the rate at which the Agent determines that the amount
of any such Loan can be placed in the London Interbank Market or in United
States Government Securities (whichever rate is higher) for the remainder
of the Interest Period times (iii) the number of days until the expiration
of the Interest Period divided by 360, plus any other reasonable costs and
expenses which Lenders incur resulting from any Borrower's prepayment of,
or failure to borrow such Loan.
Business Day. Any day on which banking institutions in Manchester,
New Hampshire and Chicago, Illinois are open for the transaction of banking
business and, in the case of LIBOR Loans, a day which is a LIBOR Business
Day.
Capital Expenditures. Any payment made directly or indirectly by
any Borrower for the purpose of acquiring or constructing fixed assets,
real property or equipment which in accordance with GAAP would be added as
a debit to the Consolidated fixed asset account of the Borrower, including
without limitation amounts paid or payable under any conditional sale or
other title retention agreement or under any lease or other periodic
payment arrangement which is of such a nature that payment obligations of
such Borrower thereunder would be required by GAAP to be capitalized and
shown as liabilities on the Consolidated balance sheet of the Borrower.
Capitalized Leases. Leases under which a Person is the lessee or
obligor, the discounted future rental payment obligations under which are
required to be capitalized on the balance sheet of such Person in
accordance with GAAP.
Change in Control. Shall be deemed to have occurred if any Person
or group (within the meaning of Rule 13d-5 of the Securities and Exchange
Commission as in effect on the date hereof) shall own directly or
indirectly, beneficially or of record, shares representing more than fifty
percent (50%), on a fully-diluted basis, of the aggregate ordinary voting
power of the Borrower.
Change in Control of the Board. The meaning specified in ss.6.11.
Change in Senior Management. The meaning specified in ss.6.10.
Closing Date. The first date on which the conditions set forth
inss.10 andss.11 have been satisfied and any Loans are made.
Code. The Internal Revenue Code of 1986, as amended.
Collateral. All property of any nature whatsoever upon which a
lien or security interest is created or purported to be created by any Loan
Documents as security for the Obligations or any portion thereof.
Commitment. As to any Lender, the Lender's Percentage of the Total
Commitment.
Commitment Fee. The meaning specified in ss.2.2(c).
Consolidated. With reference to any term herein, shall mean that
term as applied to the accounts of the Borrowers consolidated with its
Subsidiaries in accordance with GAAP.
Credit Agreement. This Revolving Credit and Term Loan Agreement,
including the Schedules and Exhibits hereto, as the same may be amended or
otherwise modified.
Current Lines of Business. The lines of business conducted by the
Borrowers on the Closing Date and any business and activities incidental
thereto.
Dollars or $. Dollars in lawful currency of the United States of
America.
Drawdown Date. The date on which any Loan is made or is to be
made, and the date on which any Loan is converted or continued in
accordance with ss.2.8.
EBITDA. The meaning specified inss.8.
Eligible Accounts. Means and refers to such accounts and accounts
receivable of Nashua and Rittenhouse as the Lenders determine to be
satisfactory, in their sole discretion, and which meet the following
specifications:
(a) are not more than ninety (90) days past due from the date of
the invoice therefor. In the event more than twenty percent (20%) of the
accounts receivable from a particular account debtor are more than ninety
(90) days past due from the earlier of the date of the invoice or the date
of shipping, all of the accounts receivable from that particular account
debtor shall be excluded from Eligible Accounts;
(b) do not arise out of the sale by Nashua or Rittenhouse of goods
consigned or delivered to Nashua or Rittenhouse on "sell or return" terms
(whether or not compliance has been made with Section 2-326 of the Uniform
Commercial Code);
(c) arose in the ordinary course of Nashua's or Rittenhouse's
business;
(d) do not arise out of any sale made on a "bill and hold" or
delayed shipping basis in excess of fifteen (15) days;
(e) are generated from customers whose principal place of business
is within the United States (unless supported by letters of credit acceptable
to the Lenders);
(f) are generated from any corporation or other entity or person
other than one which is related to Nashua or Rittenhouse, or is of common
ownership with Nashua or Rittenhouse, or could be treated as a member of
the same controlled group of corporations of which Nashua or Rittenhouse is
a member;
(g) are not subject to any claim, counterclaim, set off, or
chargeback or which include terms which permit the account debtor to return
to Nashua or Rittenhouse for credit or refund, the goods giving rise to
such account or account receivable (other than adjustments made in the
ordinary course of business);
(h) are not evidenced by a promissory note;
(i) are not finance charges;
(j) are not owed by any person employed by, or salesman of,
Nashua or Rittenhouse;
(k) are not owed by an account debtor that is the subject of a
bankruptcy or similar insolvency proceeding, or that has made an assignment
for the benefit of creditors or whose assets have been conveyed to a
receiver or trustee; and
(l) are not contra accounts or re-aged accounts.
Eligible Inventory. Means and refers to Nashua's and Rittenhouse's
inventory as the Lenders determine to be satisfactory, in their sole
discretion, and which meet the following criteria:
(a) inventory which is not in transit and, with regard to
Rittenhouse inventory, is not located outside of New Hampshire, California,
Tennessee, Illinois or Texas and with regard to Nashua inventory, is not
located outside of California, Tennessee, New Hampshire, Nebraska, Indiana,
Nevada, Pennsylvania or Washington;
(b) inventory which is not perishable;
(c) inventory which is in good condition, or currently usable
or currently saleable in the ordinary course of Nashua's or Rittenhouse's
business;
(d) inventory which is not obsolete or out of season;
(e) inventory not consisting of supplies, containers, or other
packaging materials;
(f) inventory which is not subject to a lien in favor of a
person other than the Agent, or is stored only at Nashua's or Rittenhouse's
principal place of business or at locations approved by the Lenders or is
stored at locations leased by Nashua or Rittenhouse or with a bailee,
consignee, warehouseman or similar third party;
(g) inventory which is considered finished goods or raw
material, but not including work in process; and
(h) inventory which does not require the payment of any tax,
impost, duty or other levy prior to Nashua's or Rittenhouse's exercise of
dominion and control with respect thereto.
Employee Benefit Plan. Any employee benefit plan within the
meaning of Section 3(3) of ERISA maintained or contributed to by any
Borrower or any ERISA Affiliate, or with respect to which any Borrower or
any ERISA Affiliate has actual or contingent liability, in each case other
than a Multiemployer Plan.
Environmental Laws. Any and all applicable current and future
treaties, laws, rules, regulations, codes, ordinances, orders, decrees,
judgments, injunctions, notices or binding agreements issued, promulgated
or entered into by any governmental authority, relating in any way to the
environment, preservation or reclamation of natural resources or human
exposure to or the management or Release or threatened Release of any
Hazardous Material.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Affiliate. Any Person which is treated as a single employer
with any Borrower under Section 414 of the Code or Section 4001 of ERISA.
ERISA Reportable Event. A reportable event with respect to a
Guaranteed Pension Plan within the meaning of ss.4043 of ERISA and the
regulations promulgated thereunder as to which the requirement of notice
has not been waived.
Event of Default. The meaning specified in ss.9.1.
Facility Fee. A fee in the amount of $100,000, which Facility Fee
is due and payable ratably to each of the Lenders on the Closing Date, and
which Facility Fee is deemed to be fully earned and non-refundable on the
Closing Date.
Fronting Bank. Means Fleet or such other Lender which is a
commercial bank as the Borrowers and Fleet may mutually designate from time
to time which agrees to be the issuer of a Letter of Credit.
GAAP. Generally accepted accounting principles in the United
States of America.
Guaranteed Pension Plan. Any Employee Benefit Plan, the benefits
of which are guaranteed on termination in full or in part by the PBGC
pursuant to Title IV of ERISA.
Hazardous Materials. All explosive or radioactive substances or
wastes, hazardous or toxic substances or wastes, pollutants, solid, liquid
or gaseous wastes, including petroleum or petroleum distillates, asbestos
or asbestos-containing materials, polychlorinated biphenyls or materials or
equipment containing polychiorinated biphenyls, radon gas, infectious or
medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.
Indebtedness. All obligations, contingent and otherwise, that in
accordance with GAAP should be classified upon a Person's balance sheet as
liabilities for borrowed money, including: (a) all debt for borrowed money
and similar monetary obligations, whether direct or indirect; (b) all
liabilities for borrowed money secured by any mortgage, pledge, security
interest, lien, charge, or other encumbrance existing on property owned or
acquired by such Person subject thereto, whether or not the liability
secured thereby shall have been assumed; (c) all obligations in respect of
Capitalized Leases; and (d) all guarantees, endorsements and other
contingent obligations whether direct or indirect in respect of
indebtedness for borrowed money owed by others, including any obligation to
supply funds to or in any manner to invest in, directly or indirectly, the
debtor, to purchase indebtedness, or to assure the owner of indebtedness
against loss, through an agreement to purchase goods, supplies, or services
for the purpose of enabling the debtor to make payment of the indebtedness
held by such owner or otherwise, and the obligations to reimburse the
issuer in respect of any letters of credit.
Interest Expense. For any period, the aggregate amount (determined
in accordance with GAAP) of interest paid or payable during such period by
any Person in respect of all Indebtedness for borrowed money, Capitalized
Leases and the deferred purchase price of property.
Interest Payment Date. (a) As to any Base Rate Loan, the first day
of every month beginning with the first day of the first month after the
Closing Date and any date on which such Base Rate Loan is converted to a
LIBOR Loan; and (b) as to any LIBOR Loan, the last day of the Interest
Period relating to such LIBOR Loan; provided, that in the event that such
Interest Period is more than 90 days, each 90th day during such Interest
Period and the last day of such Interest Period.
Interest Period. With respect to each LIBOR Loan, the period of
one, two or three months, as selected by any Borrower commencing on the
Drawdown Date of such LIBOR Loan; provided that the foregoing provisions
relating to Interest Periods are subject to the following:
(a) if any Interest Period would otherwise end on a day that
is not a LIBOR Business Day, that Interest Period shall be extended to the
next succeeding LIBOR Business Day unless the result of such extension
would be to carry such Interest Period into another calendar month, in
which event such Interest Period shall end on the immediately preceding
LIBOR Business Day; and
(b) no Interest Period with respect to a LIBOR Loan may
extend beyond the applicable Maturity Date.
Interest Rate Protection Agreement. An interest rate swap, cap or
collar agreement or similar agreement between any Person and a financial
institution providing for the transfer or mitigation of interest risks
either generally or under specific contingencies.
Investments. All expenditures made and all liabilities incurred
(contingently or otherwise), without duplication, for the acquisition of
stock or Indebtedness of, or for loans, advances, capital contributions or
transfers of property to, or in respect of any guaranties (or other
commitments as described under Indebtedness), or obligations of, any
Person. In determining the aggregate amount of Investments outstanding at
any particular time: (a) the amount of any Investment represented by a
guaranty shall be taken at not less than the principal amount of the
obligations guaranteed and still outstanding; (b) there shall be included
as an Investment all interest accrued with respect to Indebtedness
constituting an Investment unless and until such interest is paid; (c)
there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption,
retirement. repayment, liquidating dividend or liquidating distribution);
(d) there shall not be deducted in respect of any Investment any amounts
received as earnings on such Investment, whether as dividends, interest or
otherwise, except that accrued interest included as provided in the
foregoing clause (b) may be deducted when paid; and (e) there shall not be
deducted from the aggregate amount of Investments any decrease in the value
thereof.
Lenders. Each Person which may from time to time own a Percentage
of the Total Commitment, including Fleet in its capacity as a Lender;
provided, however that the term "Lender" shall not include any Participant.
Letter of Credit Agreement. Means, with respect to each Letter of
Credit to be issued by the Fronting Bank therefor, the letter of credit
application and reimbursement agreement which such Fronting Bank requires
to be executed by Borrower in connection with the issuance of such Letter
of Credit.
Letter of Credit Liabilities. Means, at any time, the sum of (a)
the aggregate undrawn face amount of all outstanding Letters of Credit,
plus (b) all unreimbursed drawings under Letters of Credit.
Letters of Credit. Has the meaning specified in ss.2.10.
LIBOR. With respect to any LIBOR Loan for any Interest Period, the
rate per annum (rounded upward, if necessary, to the nearest 1/32 of one
percent) as determined on the basis of the offered rates for deposits in
Dollars, for a period of time comparable to the applicable Interest Period
which appears on the Telerate page 3570 as of 11:00 a.m. London time on the
day that is two London business Days preceding the first day of such
Interest Period; provided, however, if the rate described above does not
appear on the Telerate System on any applicable interest determination
date, the LIBOR shall be the rate (rounded upwards as described above, if
necessary) for deposits in Dollars for a period substantially equal to the
Interest Period on the Rueters page "LIBO" (or such other page as may
replace the LIBO Page on that service for the purpose of displaying such
rates), as of 11:00 a.m. (London Time), on the day that is two (2) London
Business Days prior to the beginning of such Interest Period.
If both the Telerate and Reuters system are unavailable, then the
rate for that date will be determined on the basis of the offered rates for
deposits in Dollars for a period of time comparable to such Interest Period
which are offered by four major banks in the London interbank market at
approximately 11:00 a.m. London time, on the date that is two (2) London
Business Days preceding the first day of such Interest Period as selected
by Agent. The principal London office of each of the four major London
banks will be requested to provide a quotation of its Dollar deposit
offered rate. If at least two such quotations are provided, the rate for
that date will be the arithmetic mean of the quotations. If fewer than two
quotations are provided as requested, the rate for that date will be
determined on the basis of the rates quoted for loans in dollars to leading
European banks for a period of time comparable to such Interest Period
offered by major banks in New York City at approximately 11:00 a.m. New
York City time, on the day that is two London Business Days preceding the
first day of such Interest Period. In the event any Lender is unable to
obtain any such quotation as provided above, it will be deemed that LIBOR
pursuant to a LIBOR Loan cannot be determined. In the event that the Board
of Governors of the Federal Reserve System shall impose a Reserve
Percentage with respect to LIBOR deposits of the Lenders, then for any
period during which such Reserve Percent shall apply, LIBOR shall be equal
to the amount determined above divided by an amount equal to 1 minus the
Reserve Percentage. "Reserve Percentage" shall mean the maximum aggregate
reserve requirement (including all basis, supplemental, marginal and other
reserves) which is imposed on member banks of the Federal Reserve System
against "Euro-currency Liabilities" as defined in Regulation D.
LIBOR Business Day. Any Business Day on which commercial banks are
open for international business (including dealings in Dollar deposits) in
London, England.
LIBOR Loans. Loans bearing interest calculated by reference to the
LIBOR.
LIBOR Margin. The meaning specified in ss.2.6.
Licenses. The meaning specified in ss.5.5.
Loan Documents. This Credit Agreement, the Notes, the Security
Documents, Letters of Credit, the Letter of Credit Agreements, Interest
Rate Protection Agreements among the Borrowers, the Agent and/or any
Lender, and any and all other documents, agreements and instruments now or
hereafter executed and/or delivered in connection with any of the
foregoing, and any and all amendments, modifications, renewals, extensions
or restatements thereof.
Loan Request. The meaning specified in ss.2.7.
Loans. The Term Loan and the Revolving Credit Loans.
Material Adverse Effect. Means, with respect to any Person, any
material adverse effect, or the occurrence of any event or the existence of
any condition that would reasonably be expected to have a material adverse
effect, on (a) the prospects, business or financial condition, or
performance of such Person and its Subsidiaries, taken as a whole, (b) the
ability of such Person to pay and perform the obligations for which such
Person is responsible when due, or (c) with respect to any Borrower, the
validity or enforceability of (i) any of the Loan Documents, (ii) any Lien
created or purported to be created by any of the Loan Documents or the
required priority of any such Lien, or (iii) the rights and remedies of
Agent or the Lenders under any of the Loan Documents.
Material Subsidiary. The meaning specified in ss.5.2.
Maturity Date. June 30, 2005 with respect to the Term Loan and
June 30, 2002 with respect to the Revolving Credit Loans.
Moody's. Moody's Investors Service, Inc.
Multiemployer Plan. Any multiemployer plan within the meaning of
Section 3(37) of ERISA maintained or contributed to by any Borrower or any
ERISA Affiliate or with respect to which any Borrower or any ERISA
Affiliate has actual or contingent liability.
Notes. The Term Note and the Revolving Credit Note.
Obligations. All indebtedness, obligations and liabilities of the
Borrowers to the Lenders, individually or collectively, existing on the
date of this Credit Agreement or arising thereafter, direct or indirect,
joint or several, absolute or contingent, matured or unmatured, liquidated
or unliquidated, secured or unsecured, arising by contract, operation of
law or otherwise, arising or incurred under the Loan Documents, or in
respect of any of the Loans or the Notes or other instruments at any time
evidencing any thereof.
Outstanding. With respect to the Loans, the aggregate unpaid
principal thereof as of any date of determination.
Participant. The meaning specified in ss.17.3.
PBGC. The Pension Benefit Guaranty Corporation created byss.4002
of ERISA and any successor entity or entities having similar
responsibilities.
Percentage. The meaning specified in ss.2.1(a).
Permitted Liens. The meaning specified in ss.7.2.
Person. Any individual, corporation, partnership, limited
liability company, trust, unincorporated association, joint venture,
organization, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
Qualified Plan. A pension plan (as defined in Section 3(2) of
ERISA) intended to be tax-qualified under Section 401(a) of the Code which
any Borrower or any ERISA Affiliate sponsors, maintains, or to which any
such Person makes, is making, or is obligated to make, contributions, or,
in the case of a multiple-employer plan (as described in Section 4064(a) of
ERISA), has made contributions at any time during the immediately preceding
period covering at least five (5) plan years, but excluding any
Multiemployer Plan.
Real Estate. The meaning specified in ss.2.11.
Record. The grid attached to the Revolving Credit Note, or the
continuation of such grid, or any other similar record, including computer
records, maintained by the Agent with respect to any Revolving Credit Loan
referred to in the Revolving Credit Note.
Reimbursement Obligation. Means all indebtedness, liabilities, and
obligations of the Borrowers to reimburse the Agent or the Fronting Bank in
accordance with ss.2.10(d) for any demand for payment or drawing under a
Letter of Credit.
Release. Any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing,
depositing, dispersing, emanating or migrating of any Hazardous Material
in, into, onto or through the environment.
Replacement Lender. The meaning specified in ss.17.4.
Required Lenders. Any two or more Lenders holding in the aggregate
at least sixty six percent (66%) of the amounts Outstanding on the Loans
or, if no amounts are Outstanding hereunder, of the Percentages of the
Total Commitment.
Revolving Credit Loan. A revolving credit loan made pursuant
to ss.2.1(b).
Revolving Credit Note. The meaning specified in ss.2.4.
Revolving Loan Commitment. The meaning specified in ss.2.1.
Rittenhouse Transaction. The transactions contemplated by that
Stock Purchase Agreement among RPC, certain stockholders thereof and Nashua
dated March 21, 2000 regarding the acquisition of all of the stock of RPC.
S&P. Standard & Poor's Ratings Group, a division of the McGraw
Hill Companies, Inc.
Security Documents. Means any guaranty, security agreement,
financing statement, mortgage, collateral assignment or negative pledge
agreement now or hereafter executed and/or delivered by any Borrower or any
Subsidiary thereof in connection with or as security or assurance for the
payment or performance of the Obligations, or the Credit Agreement, as such
agreements may be amended, modified, supplemented or renewed.
Subordinated Debt: (a) The existing Indebtedness of the Borrowers
which is designated as "Subordinated Debt" in Schedule 5.7 attached hereto,
and (b) any other Indebtedness of Borrowers which matures in its entirety
and by its terms (or by the terms of the instrument under which it is
outstanding and to which appropriate reference is made in the instrument
evidencing such Subordinated Debt) is made subordinate and junior in right
of payment to the Notes and to Borrowers' other obligations to the Lenders
hereunder by provisions reasonably satisfactory in form and substance to
the Required Lenders and their counsel.
Subsidiary. Any partnership, corporation, association, trust, or
other business entity of which any Borrower shall at any time own directly
or indirectly through a Subsidiary or Subsidiaries at least a majority (by
number of votes) of the outstanding Voting Interests.
Term Loan. The term loan made in accordance with ss.2.1(d).
Term Loan Commitment. The meaning specified in ss.2.1.
Term Note. The meaning specified in ss.2.5.
Total Commitment. The sum of the Total Revolving Loan Commitment
and the Total Term Loan Commitment.
Total Funded Debt. The meaning specified in ss.8.
Total Revolving Loan Commitment. The meaning specified in ss.2.1.
Total Term Loan Commitment. The meaning specified in ss.2.1.
Type. With respect to any Loan, means a classification of that
Loan as a Base Rate Loan or a LIBOR Loan with a certain Interest Period. By
way of example, a LIBOR Loan with a three month Interest Period ending June
30, 2000 shall be a different Type of Loan than a LIBOR Loan with a two
month Interest Period ending May 15, 2000.
Unfunded Benefit Liability. The excess of a Qualified Plan's or a
multiemployer Plan's benefit liabilities (as defined in Section 4001
(a)(16) of ERISA) over the current value of such plan's assets, determined
in accordance with the assumptions used by the plan's actuaries for funding
the plan pursuant to Section 412 of the Code for the applicable plan year.
Voting Interests. Stock or similar interests, of any class or
classes (however designated) the holders of which are at the time entitled,
as such holders, to vote for the election of a majority of the directors
(or persons performing similar functions) of the partnership, corporation,
association, trust or other business entity involved, whether or not the
right so to vote exists by reason of the happening of a contingency.
ss.1.2. Rules of Interpretation.
(a) A reference to any document or agreement shall include
such document or agreement as amended, modified or supplemented from time to
time in accordance with its terms and the terms of this Credit Agreement.
(b) The singular includes the plural and the plural includes
the singular.
(c) A reference to any law includes any amendment or
modification to such law unless otherwise expressly stated.
(d) A reference to any Person includes its permitted successors
and permitted assigns.
(e) Accounting terms not otherwise defined herein have the
meanings assigned to them by GAAP applied on a consistent basis by the
accounting entity to which they refer.
(f) The words "include", "includes" and "including" are not
limiting.
(g) Reference to a particular "ss." refers to that section of
this Credit Agreement unless otherwise indicated.
(h) The words "herein", "hereof", "hereunder" and words of like
import shall refer to this Credit Agreement as a whole and not to any
particular section or subdivision of this Credit Agreement.
(i) Except as otherwise expressly provided herein, all terms
of an accounting or financial nature shall be construed in accordance with
GAAP, as in effect from time to time; provided that, if Borrowers notify the
Agent that the Borrowers request an amendment to any provision hereof to
eliminate the effect of any change in GAAP occurring after the date hereof
or in the application thereof on the operation of such provision (or if the
Agent notifies Borrower that the Required Lenders request an amendment to
any provision hereof for such purpose), regardless of whether any such
notice is given before or after such change in GAAP or in the application
thereof, then such provision shall be interpreted on the basis of GAAP as
in effect and applied immediately before such change shall have become
effective until such notice shall have been withdrawn or such provision
amended in accordance herewith.
ss.2. THE CREDIT FACILITIES.
ss.2.1. Amounts and Terms of the Facilities.
(a) Commitments. Nashua wishes to establish for the benefit
of the Borrowers (i) a term loan facility in the maximum principal amount of
Twenty Million Dollars ($20,000,000) as further described in ss.2.1(d) (the
"Total Term Loan Commitment"); and (ii) a revolving credit facility in an
aggregate principal amount at any one time outstanding up to Thirty Five
Million Dollars ($35,000,000); provided, however, if the aggregate
principal amount at any one time outstanding under the Revolving Credit
Loan exceeds Fifteen Million Dollars ($15,000,000) or the amount of
Eligible Accounts declines to Twenty Five Million Dollars ($25,000,000) or
less, the maximum principal amount of the Revolving Credit Loan shall be
the lesser of (A) Thirty Five Million Dollars ($35,000,000) or (B) the
Borrowing Base (the "Total Revolving Loan Commitment"). Notwithstanding the
foregoing, the parties hereto acknowledge and agree that until such time as
the conditions of ss.11.7 and ss.11.8 are met and the Lenders have deemed
the Real Estate acceptable collateral in their sole discretion, the amount
of the Total Revolving Loan Commitment and the Revolving Credit Loan shall
be the lesser of (A) Thirty Five Million Dollars ($35,000,000) or (B) the
Borrowing Base minus a reserve equal to the sum of Twenty Million Dollars
($20,000,000) minus eighty percent (80%) of the appraised liquidation value
of the machinery and equipment formally pledged to the Lenders hereunder.
Each Lender is severally willing to establish such revolving credit and
term loan facilities on behalf of the Borrowers, subject to the terms and
conditions set forth herein, in the aggregate maximum amounts at any one
time outstanding set forth below opposite each Lender's name and in the
respective percentages set forth opposite each
Lender's name which shall be applicable to such revolving credit facility
and such term loan facility hereunder (hereinafter referred to as such
Lender's "Percentage"). If, when all of the conditions set forth herein are
met, any Lender does not make available to the Agent the amount required
pursuant to ss.2.1(b), ss.2.1(c) or ss.2.1(d), the Agent shall be entitled
to recover such amount on demand from such Lender, together with interest
thereon for each day from the date of nonpayment until such amount is paid
in full at a rate equal to the Base Rate plus the Base Rate Margin.
- -----------------------------------------------------------------------------------------------
LENDER REVOLVING LOAN % OF REVOLVING LOAN TERM LOAN % OF TERM % OF TOTAL
COMMITMENT COMMITMENT COMMITMENT LOAN COMMITMENT COMMITMENT
- -----------------------------------------------------------------------------------------------
Fleet $19,090,910 54.54545% $10,909,090 54.54545% 54.54545%
- -----------------------------------------------------------------------------------------------
LaSalle $15,909,090 45.45455% $ 9,090,910 45.45455% 45.45455%
- -----------------------------------------------------------------------------------------------
TOTAL $35,000,000 100% $20,000,000 100% 100%
- -----------------------------------------------------------------------------------------------
(b) Revolving Loans. Subject to the terms and conditions set forth
in this Credit Agreement, each Lender hereby severally establishes a
revolving credit facility in favor of the Borrowers in the individual
principal amount of such Lender's Percentage of the Total Revolving Loan
Commitment. Each Lender agrees to lend to the Borrowers, and the Borrowers
may borrow, repay, and reborrow from time to time between the Closing Date
and the Maturity Date, upon notice by the requesting Borrower to the Agent
given in accordance with ss.2.7, such sums as are requested by the
requesting Borrower up to a maximum aggregate principal amount outstanding
(after giving effect to all amounts requested) at any one time equal to
such Lender's Percentage of the Available Revolving Commitment; provided;
however, that the proceeds of any and all borrowings and reborrowings
hereunder shall be used solely for the purposes described in ss.5.16. All
Revolving Credit Loans shall be made as LIBOR Loans or Base Rate Loans, at
the requesting Borrower's option. Base Rate Loans may be converted to LIBOR
Loans; and LIBOR Loans may be continued or converted to Base Rate Loans
under the circumstances, and subject to the conditions, specified in
ss.2.8. Each request for a Revolving Credit Loan hereunder shall constitute
a representation and warranty by the Borrowers that the conditions set
forth in ss.10 and ss.11, in the case of the initial Revolving Credit Loans
to be made on the Closing Date, and ss.11, in the case of all other
Revolving Credit Loans, have been satisfied on the date of such request.
(c) Letters of Credit. The Borrowers may utilize the Revolving
Credit Loans by requesting that the Fronting Bank issue, and the Fronting
Bank, subject to the terms and conditions of this Agreement, shall issue,
standby and commercial letters of credit for the Borrowers' account (such
letters of credit being hereinafter referred to as the "Letters of
Credit"); provided, however, the aggregate amount of outstanding Letter of
Credit Liabilities shall not at any time exceed the lesser of Five Million
Dollars ($5,000,000) or the Available Revolving Commitment. Upon the date
of issue of a Letter of Credit, Agent shall be deemed, without further
action by any party hereto, to have sold to each Lender who holds a
Revolving Loan Commitment, and each such Lender shall be deemed, without
further action by any party hereto, to have purchased from Agent, a
participation to the extent of such Lender's Percentage (calculated with
respect to the Revolving Loan Commitments) in such Letter of Credit and the
related Letter of Credit Liabilities. Upon termination of the Revolving
Loan Commitments, any Letter of Credit then outstanding which has been
fully cash collateralized to the satisfaction of Agent and the Fronting
Bank shall no longer be considered a "Letter of Credit" as defined in this
Agreement and any participating interest heretofore granted by the Fronting
Bank to the Lenders holding Revolving Loan Commitments in such Letter of
Credit shall be deemed terminated but the letter of credit fees payable
hereunder shall continue to accrue to the Fronting Bank with respect to
such Letter of Credit until the expiry thereof.
(d) The Term Loan. On the Closing Date each of the Lenders shall
severally lend to the Borrowers such Lender's Percentage of the Term Loan
Commitment in accordance with a written borrowing request from the
Borrowers pursuant to ss.2.7. Proceeds of the Term Loan Commitment shall be
used by the Borrowers only in connection with the Rittenhouse Transaction.
The Term Loan may consist of one or more LIBOR Loans or Base Rate Loans, at
Borrowers' option, but in the absence of an election by the Borrowers shall
be Base Rate Loans. Base Rate Loans may be converted to LIBOR Loans; and
LIBOR Loans may be continued or converted to Base Rate Loans under the
circumstances, and subject to the conditions, specified in ss.2.8. Each
request for a LIBOR Loan hereunder shall constitute a representation and
warranty by the Borrowers that the conditions set forth in ss.10 and ss.11,
in the case of the initial Loans to be made on the Closing Date, and ss.11,
in the case of all other Loans, have been satisfied on the date of such
request.
ss.2.2. Fees.
(a) Unused Facility Fee. The Borrowers agree to pay to the Agent
for the ratable account of each Lender, a commitment fee (the "Facility
Fee") equal to one quarter of one percent (1/4%) on the daily average
unused portion of such Lender's portion of the Available Revolving
Commitment during the immediately preceding fiscal quarter of the Borrower
(adjusted as appropriate for any reduction or termination of any portion of
the Revolving Loan Commitment during the immediately preceding fiscal
quarter or portion thereof). The Facility Fee shall be computed on the
basis of the actual number of days elapsed in a year of 360 days and shall
be payable quarterly in arrears.
(b) Agent's Fees. The Borrowers agree to pay to the Agent, for the
Agent's own account, on the date hereof and on each anniversary date
hereafter, the agency fee described in the letter to Nashua dated March 17,
2000.
(c) Commitment Fee. On the Closing Date, the Borrowers shall pay
to the Agent for the ratable account of each of the Lenders a Commitment
Fee in the amount of $100,000.
(d) Letter of Credit Fees. The Borrowers will pay to the Agent,
for the ratable account of each Lender holding a Revolving Loan Commitment,
a per annum fee equal to 1.25% of the face amount of each Letter of Credit
which fee shall be due upon issuance of the Letter of Credit and on each
anniversary date thereafter as long as the Letter of Credit remains
outstanding. The Borrowers will pay to the Fronting Bank, for its account
only, all reasonable customary fees for the issuance, amendments to and
processing of Letters of Credit.
ss.2.3. Reduction of Commitments. Subject to the terms and
conditions of ss.3, the Borrowers shall have the right at any time and from
time to time upon two (2) Business Days' prior written notice to the Agent
(which shall in turn give prompt written notice to each Lender) to reduce
by $500,000 or a multiple of $500,000 in excess thereof or terminate
entirely any portion of the Revolving Loan Commitment, pro rata in
accordance with each Lender's Percentage, whereupon the Revolving Loan
Commitment shall be reduced accordingly or, as the case may be, terminated.
Upon the effective date of any such reduction or termination, the Borrowers
shall pay to the Agent for the ratable account of each Lender the full
amount of any Commitment Fee payable pursuant to ss.2.2(a) then accrued on
the amount of the reduction. No reduction of the Revolving Loan Commitment
may be reinstated and no prepayment of the Term Loan may be reinstated or
reborrowed.
ss.2.4. Revolving Credit Notes. The Revolving Credit Loans made
by the Lenders hereunder shall be evidenced by promissory notes of the
Borrowers in substantially the form attached hereto (collectively, the
"Revolving Credit Note"), dated as of the Closing Date. The Revolving
Credit Note shall be payable to the order of each Lender in principal
amounts equal to such Lender's Percentage of the Total Revolving Loan
Commitment or, if less, the aggregate outstanding amount of all Revolving
Credit Loans made by the Lenders hereunder, plus interest accrued thereon,
as set forth below. The Borrowers irrevocably authorize the Agent to make
or cause to be made, at or about the time of the Drawdown Date of any
Revolving Credit Loan or at the time of receipt of any payment of principal
or interest on the Revolving Credit Note, an appropriate notation on its
Record or elsewhere in accordance with the Agent's customary procedures
reflecting the making of such Revolving Credit Loan or (as the case may be)
the receipt of such payment and the respective pro-rata allocations to each
Lender in accordance with its respective Percentage. The Agent shall record
the outstanding amount of the Revolving Credit Loans on the Record or
elsewhere in accordance with the Agent's customary procedures as prima
facie evidence of the principal amount thereof owing and unpaid to the
Lenders, but the failure to record, or any error in so recording, any such
amount on the Record or elsewhere in accordance with the Agent's customary
procedures shall not limit or otherwise affect the obligations of the
Borrowers hereunder or under the Revolving Credit Note to make payments of
principal of or interest on the Revolving Credit Note when due. The
Revolving Credit Note shall be due and payable on the Maturity Date.
ss.2.5. Term Notes. The Term Loan shall be evidenced by
promissory notes in the form attached hereto (collectively, the "Term
Note"), payable to the order of each of the Lenders, dated as of the
Closing Date and in the aggregate principal amount of Twenty Million
Dollars ($20,000,000).
ss. 2.6. Interest on Loans/Principal Repayment.
(a) The Loans shall bear interest, at the Borrowers' option
(subject to the limitations and conditions set forth herein), at a rate per
annum equal to the Base Rate or LIBOR plus the applicable margin set forth
below based on Nashua's net income, as defined in ss.2.6(b) below (which
margins are referred to below as the "Base Rate Margin", the "Revolver
LIBOR Margin" or the "Term LIBOR Margin", respectively, as applicable). The
initial Base Rate Margin is 0%; the initial Revolver LIBOR Margin is 2%;
and the initial Term LIBOR Margin is 2 1/4%. The foregoing initial margins
will apply through the Borrowers' fiscal year end 2000. Thereafter, the
applicable margins will be adjusted quarterly upon the Borrowers' written
request and a change in Nashua's net income which shall be tested on a
rolling four quarter basis as supported by the financial information
contained in Nashua's filings with the Securities and Exchange Commission:
- -------------------------------------------------------------------------------------------
Net Income Base Rate Margin Revolver LIBOR Margin Term LIBOR Margin
- -------------------------------------------------------------------------------------------
Less Than $7,000,000 0% 2% 2 1/4%
- -------------------------------------------------------------------------------------------
Equal to or greater than 0% 1 3/4% 2%
$7,000,000 but less than
$12,000,000
- -------------------------------------------------------------------------------------------
Greater than $12,000,000 0% 1 1/2% 1 3/4%
- -------------------------------------------------------------------------------------------
(b) For purposes of this ss.2.6 only, Net Income shall mean
Nashua's consolidated net income (or loss) as reported in its SEC filings,
excluding non-operating and extraordinary items of income, excluding
extraordinary or one-time losses associated with the Rittenhouse
Transaction (including taxes incurred under Code Section 338(h)(19)),
excluding extraordinary losses associated with the closing of the Cartridge
division; but including any and all other losses, extraordinary or
otherwise, all determined in accordance with GAAP.
(c) During any period when an Event of Default shall have occurred
and be continuing or after the Maturity Date or judgment is rendered on any
of the Notes, then until such Event of Default is cured or the Notes are
paid in full, as the case may be, the applicable margin over Base Rate
Loans and LIBOR Loan shall be 4% higher than the above referenced
applicable margins.
(d) The Borrowers agree to pay to the Agent, for the pro rata
benefit of the Lenders, interest on each Loan in arrears on each Interest
Payment Date with respect thereto. Any adjustments to interest payments
based upon the calculations provided in ss.2.6(a) shall be made on the
Interest Payment Date following the effective date of such adjustment.
(e) The Borrowers agree to pay to the Agent, for the pro rata
benefit of the Lenders, outstanding principal on the Revolving Loans on the
Maturity Date, and agrees to pay to the Agent for the pro rata benefit of
the Lenders, principal on the Term Loan in seventeen consecutive quarterly
payments, each in the amount of $1,176,471 (being one seventeenth of the
initial face amount of the Term Loan) on the last business day of each
fiscal quarter end (June, September, December and March) commencing on June
30, 2001, with any remaining unpaid balance due on the Maturity Date.
(f) The Agent will credit each Lender, pro rata, on the same
Business Day funds are received if such funds are received by the Agent by
1:00 Boston time, or on the next Business Day, if received after such time.
ss.2.7. Requests for Loans. The Borrowers shall give to the Agent
written notice in the form of Exhibit A hereto (or telephonic notice
confirmed in a writing in the form of Exhibit A hereto) of the Loans
requested from the Lenders hereunder (a "Loan Request"), no later than
12:00 noon, Boston time, (i) no less than one (1) Business Day prior to the
proposed Drawdown Date of any Base Rate Loan and (ii) no less than two (2)
LIBOR Business Days prior to the proposed Drawdown Date of any LIBOR Loans.
Each such notice shall be signed by the requesting Borrowers and shall
specify (i) the aggregate principal amount of the Loans requested from the
Lenders (and in any event not in excess of the unused portion of the
Available Revolving Commitment), (ii) whether such Loans are to be LIBOR
Loans or Base Rate Loans, (iii) the proposed Drawdown Date of such Loans,
(iv) in the case of LIBOR Loans, the Interest Period for such Loans, and
(v) such other matters as are set forth on Exhibit A. The Borrowers may not
make a Loan Request for a LIBOR Loan if such a request would require the
Agent to administer concurrently more than five (5) Types of LIBOR Loans.
Each Loan Request with respect to a LIBOR Loan shall be in a minimum amount
of $500,000 or a higher integral multiple of $500,000. The Agent shall then
promptly notify each Lender by written notice of its respective Percentage
of the Loans requested.
ss.2.8. Conversion and Continuation.
The Borrowers shall have the right at any time upon prior
irrevocable notice to the Agent (a) not later than 12:00 noon, Boston time,
one (1) Business Day prior to the date of conversion, to convert any LIBOR
Loan into a Base Rate Loan, (b) not later than 12:00 noon, Boston time, two
(2) LIBOR Business Days prior to conversion or continuation, to convert any
Loan into a LIBOR Loan or to continue any LIBOR Loan for an additional
Interest Period, subject in each case to the following:
(i) each conversion or continuation shall be made pro rata among
the Lenders in accordance with the respective principal amounts of the
Loans comprising the converted or continued Loans;
(ii) if less than all the outstanding principal amount of any
Loans shall be converted or continued, then the resulting Loans shall
satisfy the limitations specified in the penultimate sentence of ss.2.7
regarding the principal amount of Loans;
(iii) each conversion shall be effected by the Agent by recording
for the account of each Lender the new Loan of such Lender resulting from
such conversion and reducing the Loan (or portion thereof) of such Lender
being converted by an equivalent principal amount;
(iv) accrued interest on a LIBOR Loan (or portion thereof being
converted or continued) shall be paid by the Borrowers at the time of
conversion or continuation;
(v) LIBOR Loans may only be converted at a time that is the end of
the Interest Period applicable thereto;
(vi) any portion of a Loan maturing or required to be repaid in
less than one month may not be converted into or continued as a LIBOR Loan;
(vii) any portion of a LIBOR Loan that cannot be converted into or
continued as a LIBOR Loan by reason of the immediately preceding clause
shall be automatically converted at the end of the Interest Period in
effect for such Loan into a Base Rate Loan; and
(viii) no Event of Default and no event which, with the giving of
notice or passage of time or both, would constitute an Event of Default has
occurred and is continuing; provided, however, that the condition set forth
in this clause (viii) shall not be applicable to the conversion of any
LIBOR Loan into a Base Rate Loan pursuant to ss.2.8(a).
Each notice pursuant to this ss.2.8 shall be irrevocable and shall
refer to this Credit Agreement and specify (i) the identity (i.e. whether
the election is for the Term Loan or the Revolving Loans) and amount of the
Loan that such Borrower requests be converted or continued, (ii) whether
such Loan is to be converted to or continued as a LIBOR Loan or a Base Rate
Loan, (iii) if such notice requests a conversion, the date of such
conversion (which shall be a LIBOR Business Day) and (iv) if such Loan is
to be converted to or continued as a LIBOR Loan, the Interest Period with
respect thereto. If no Interest Period is specified in any such notice with
respect to any conversion to or continuation as a LIBOR Loan, the
requesting Borrower shall be deemed to have selected an Interest Period of
one month's duration. The Agent shall promptly advise the other Lenders of
any notice given pursuant to this ss.2.8 and of each Lender's portion of
any converted or continued Loans. If the requesting Borrower shall not have
given notice in accordance with this ss.2.8 to continue any LIBOR Loans
into a subsequent Interest Period (and shall not otherwise have given
notice in accordance with this ss.2.8 to convert such LIBOR Loans), such
LIBOR Loans shall, at the end of the Interest Period applicable thereto
(unless repaid pursuant to the terms hereof), automatically be converted
into Base Rate Loans.
ss.2.9. Funds for Loans. Subject to the satisfaction of the other
conditions set forth herein, to the extent applicable (including the
conditions set forth in ss.2.7), each Lender will make available to the
Agent on the proposed date of any Loan (as specified herein) by wire
transfer of immediately available funds not later than 1:00 P.M., Boston
time, the aggregate amount of its Percentage of such Loans requested by the
Borrowers, and the Agent shall credit the aggregate amount so received to
the respective accounts designated by the requesting Borrower or, if such
Borrower does not designate any account, to such Borrower's regular deposit
account with the Agent, if any. The Lenders shall make such funds available
to the Agent in U.S. Dollars. In no event shall the aggregate of all Dollar
denominated Loans exceed the respective Dollar denominated facility amounts
set forth in ss.2.1(a).
ss.2.10 Letter of Credit Request Procedure; Funding; Obligations.
(a) Except for Letters of Credit issued on the Closing Date, the
Borrowers shall give Agent not less than three (3) Business Days prior
notice (effective upon receipt) specifying the date of each Letter of
Credit and the nature of the transactions to be supported thereby. Upon
receipt of such notice Agent shall promptly notify the Fronting Bank and
each Lender who holds a Revolving Loan Commitment of the contents thereof
and of such Lender's Percentage of the amount of the proposed Letter of
Credit. Each Letter of Credit shall have an expiration date that does not
extend beyond a date which is thirty (30) days prior to the Maturity Date
of the Revolving Credit Loans, shall be payable in Dollars, must support a
transaction entered into in the ordinary course of business of such
Borrower, must be reasonably satisfactory in form and substance to the
Agent and the Fronting Bank, and shall be issued pursuant to such
documentation as Agent and the Fronting Bank may reasonably require,
including, without limitation, the Fronting Bank's standard form Letter of
Credit Agreement; provided that, in the event of any conflict between the
terms of such agreement and the other Loan Documents, the terms of the
other Loan Documents shall control.
(b) Upon receipt from the beneficiary of any Letter of Credit of
any demand for payment or other drawing under such Letter of Credit, the
Fronting Bank shall promptly so notify Agent and Agent shall promptly so
notify the Borrowers and each Lender that holds a Revolving Loan Commitment
as to the amount to be paid as a result of such demand or drawing and the
respective payment date. If the Borrowers have not reimbursed the Fronting
Bank for the amount paid as a result of such demand or drawing pursuant to
ss.2.10(c), each Lender will make available to Agent, by wire transfer of
immediately available funds not later than 1:00 p.m. Boston time on the
applicable payment date, an amount equal to such Lender's Percentage
(calculated based only on the Revolving Loan Commitments) of the amount to
be paid as a result of such demand or drawing which has not been reimbursed
even if the conditions to a Loan under ss.10 and ss.11 hereof have not been
satisfied and Agent shall promptly pay such amounts to the Fronting Bank.
(c) The Borrowers shall be irrevocably and unconditionally
obligated to immediately reimburse the Fronting Bank (through Agent) for
any amounts paid by the Fronting Bank upon any demand for payment or
drawing under any Letter of Credit, without presentment, demand, protest,
or other formalities of any kind provided that in the event payment has
been made by Lenders pursuant to ss.2.10(b) above, such reimbursement
obligation shall extend to the benefit of the Lenders (through Agent). All
payments on the Reimbursement Obligations shall be made to Agent not later
than 1:00 p.m. on the date of the corresponding payment under the Letter of
Credit by the Fronting Bank; provided, that Agent has provided notice to
the Borrowers prior to 11:00 a.m. Boston time on such day that such payment
is due. In the event such notice is received after 11:00 a.m. Boston time
on a Business Day, such payment shall be due not later than 1:00 p.m.
Boston time on the next succeeding Business Day. Subject to the other terms
and conditions of this Agreement, such reimbursement may be made by the
Borrowers requesting a Revolving Loan in accordance with ss.2.7 hereof;
provided, however, the Lenders agree to waive the one (1) day notice
requirement for Base Rate Loans, the proceeds of which shall be credited
against the Borrower's Reimbursement Obligations. The Agent will pay to
each Lender participating in a Letter of Credit such Lender's Percentage
(calculated based only on the Revolving Loan Commitments) of all amounts
received from the Borrowers for application in payment, in whole or in
part, to the Reimbursement Obligation in respect of any Letter of Credit,
but only to the extent such Lender has made payment to Agent in respect of
such Letter of Credit pursuant to clause (b) of this ss.2.10.
(d) The Reimbursement Obligations of the Borrowers under this
Agreement shall be absolute, unconditional, and irrevocable, and shall be
performed strictly in accordance with the terms of the Loan Documents under
all circumstances whatsoever and the Borrowers hereby waive any defense to
the payment of the Reimbursement Obligations based on any circumstance
whatsoever, including, without limitation, in either case, the following
circumstances: (i) any lack of validity or enforceability of any Letter of
Credit or any other Loan Document; (ii) the existence of any claim,
set-off, counterclaim, defense, or other rights which any Person may have
at any time against any beneficiary of any Letter of Credit, the Fronting
Bank, Agent, any Lender, or any other Person, whether in connection with
any Loan Document or any unrelated transaction; (iii) any statement, draft,
or other documentation presented under any Letter of Credit proving to be
forged, fraudulent, invalid, or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect whatsoever;
(iv) payment by the Fronting Bank under any Letter of Credit against
presentation of a draft or other document that does not comply with the
terms of such Letter of Credit; or (v) any other circumstance whatsoever,
whether or not similar to any of the foregoing.
(e) As among the Borrowers and the Lenders, the Borrowers assume
all risks of the acts and omissions of, or misuse of any of the Letters of
Credit by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, subject to the
provisions of the applications for the issuance of Letters of Credit, the
Lenders, the Fronting Bank, and Agent shall not be responsible for:
(i) the form, validity, sufficiency, accuracy, genuineness, or
legal effect of any document submitted by any Person in connection with the
application for and issuance of and presentation of drafts with respect to
any of the Letters of Credit, even if it should prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent, or forged;
(ii) the validity or sufficiency of any instrument transferring or
assigning, or purporting to transfer or assign, any Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in part,
which may prove to be invalid or ineffective for any reason;
(iii) the failure of the beneficiary of any Letter of Credit to
strictly comply with conditions required in order to draw upon such Letter
of Credit;
(iv) errors, omissions, interruptions, or delays in transmission
or delivery of any messages, by mail, cable, telegraph, telex, or
otherwise, whether or not they be in cipher;
(v) errors in interpretation of technical terms;
(vi) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any Letter of Credit or
of the proceeds thereof;
(vii) the misapplication by the beneficiary of any Letter of
Credit of the proceeds of any drawing under such Letter of Credit; or
(viii) any consequences arising from causes beyond the control of
any Lender or the Fronting Bank, including, without limitation, any act of
any governmental authority.
None of the foregoing shall affect, impair, or prevent the vesting of any
of the Lenders, the Fronting Bank or Agent's rights or powers under this
ss.2.10. The Borrowers shall have a claim against the Fronting Bank, and
the Fronting Bank shall be liable to the Borrowers, to the extent of any
direct (but not indirect, consequential, or punitive) damages suffered by
the Borrowers which the Borrowers prove in a final nonappealable judgment
were caused by (A) the Fronting Bank's willful misconduct or gross
negligence in determining whether documents presented under any Letter of
Credit complied with the terms thereof or (B) the Fronting Bank's willful
failure to pay under any Letter of Credit after presentation to it of
documentation strictly complying with the terms and conditions of such
Letter of Credit. The Fronting Bank may accept documents that appear on
their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary.
ss.2.11 Collateral. To secure the full and complete payment and
performance of the Obligations, the Borrowers shall grant to the Agent for
the benefit of the Lenders (a) a perfected first priority security interest
in all of Nashua's and Rittenhouse's accounts receivable, inventory and the
specific items of machinery and equipment owned by Nashua described on
Schedule 2.11(a) hereof with a liquidation value which meets the
requirements of ss.10.10; and (b) a first priority mortgage and collateral
assignment of leases and rents on the real property owned and occupied by
Nashua located at Route 3 in Merrimack, New Hampshire, more particularly
described on Schedule 2.11(b) hereto (the "Real Estate").
ss.2.12 Guaranties. Each Material Subsidiary (as defined in
ss.5.2 hereof) shall guaranty the payment and performance of the
Obligations as more fully set forth in ss.7.13 hereof.
ss.2.13 Borrowing Base for Revolving Credit Loans.
(a) The Lenders may exclude from the Borrowing Base all or a
portion of the Eligible Accounts which the Lenders have, in their sole
discretion, deemed to be ineligible because uncertainty exists as to the
creditworthiness of the account debtor.
(b) With respect to accounts which are Eligible Accounts or which
the Borrowers request that the Lenders consider as Eligible Accounts, the
Borrowers shall be deemed to warrant and represent to the Lenders that (i)
Nashua or Rittenhouse is the owner of such accounts and Nashua or
Rittenhouse has the right to subject the same to a lien in favor of the
Lenders; (ii) such accounts are genuine, are in all respects what they
purport to be, and are not evidenced by a judgment; (iii) the amounts shown
on Nashua's or Rittenhouse's books and records, and all invoices, reports
or statements which may be delivered to the Lenders with respect thereto,
net of customary discounts offered in a manner consistent with Nashua's and
Rittenhouse's previous business practices, are actually and absolutely
owing to Nashua or Rittenhouse and are not in any way contingent; (iv)
except as disclosed to the Lenders, there are no setoffs, counterclaims or
disputes existing or asserted with respect thereto and Nashua and/or
Rittenhouse have not made any agreement with any account debtor for any
deduction therefrom except a discount or allowance for prompt payment; (v)
there are no facts, events or occurrences which would reasonably be likely
to impair the validity or enforcement thereof or would reasonably be likely
to reduce the amount payable thereunder as shown on Nashua's or
Rittenhouse's books and records, and all invoices, reports or statements
which may be delivered to the Lenders with respect thereto; (vi) the
services furnished and/or goods sold giving rise thereto were not, at the
time of sale by Nashua or Rittenhouse to any account debtor, subject to any
lien (other than the rights of any consignee) except that of the Lenders or
as specifically permitted by the Lenders; (vii) Nashua and Rittenhouse have
no knowledge of any fact or circumstance which would reasonably be likely
to impair the collectability thereof; (viii) to the best of the Borrowers'
knowledge, there are no proceedings or actions which are pending or
threatened against any account debtor's financial condition which, if
adversely determined, would have a Material Adverse Affect on Nashua or
Rittenhouse; and (ix) such accounts satisfy the objective criteria set
forth herein for "Eligible Accounts."
(c) With respect to inventory which is Eligible Inventory or which
the Borrowers want the Lenders to consider as Eligible Inventory, the
Borrowers shall be deemed to warrant and represent that (i) Nashua or
Rittenhouse is the lawful owner of such inventory and have the right to
subject the same to a lien in favor of the Lenders; (ii) the inventory is
not subject to any lien except that of the Lenders; and (iii) the inventory
satisfies the objective criteria set forth above for "Eligible Inventory".
(d) The above-described percentages of Eligible Accounts and
Eligible Inventory are intended solely for determination of the Borrowing
Base. The determination that a given asset of any Borrower is eligible for
borrowing shall not be deemed a determination by the Lenders relative to
the actual value of the asset in question. All Collateral given to the
Lenders by the Borrowers not considered eligible for borrowing shall
continue as part of the Collateral security for the prompt, punctual, and
faithful performance by the Borrowers of their Obligations to the Lenders.
ss.3. PREPAYMENT OF THE LOANS; RESERVES; CROSS DEFAULT AND TERMINATION.
ss.3.1. Voluntary Prepayments. The Borrowers shall have the
right, at their election, to prepay the outstanding amount of any Loans, as
a whole or in part, at any time without penalty or premium, except as
provided in ss.3.3 and ss.4.8. The Borrowers shall give irrevocable written
notice to the Agent, no later than 12:00 noon, Boston time, one (1)
Business Day prior to any proposed prepayment of Base Rate Loans pursuant
to this ss.3 and no later than 11:00 a.m., Boston time, and three (3) LIBOR
Business Days prior to any proposed prepayment of LIBOR Loans, pursuant to
this ss.3, in each case specifying the proposed date of prepayment of the
Loans and the principal amount and accrued interest to be prepaid, and the
Agent shall promptly give notice thereof to each Lender. Each such
prepayment of the Base Rate Loans shall be in a minimum amount of the
lesser of (i) $500,000 and (ii) the aggregate amount outstanding under the
Notes being prepaid, and shall be accompanied by the payment of accrued
interest on the principal prepaid to the date of such prepayment.
ss.3.2. Mandatory Prepayments. If at any time the outstanding
principal amount of all Revolving Loans and the Letter of Credit
Liabilities exceeds (or, in the case of any notice of reduction of the
Total Revolving Loan Commitment pursuant to ss.2.3, would exceed) the Total
Revolving Loan Commitment, the Borrowers will immediately prepay the
applicable Note or Notes, subject to ss.3.3 and ss.4.8, in an amount
necessary to cause the outstanding principal amount of all Loans and the
Letter of Credit Liabilities not to exceed the Total Revolving Loan
Commitment.
ss.3.3 Prepayment Fee. If the Borrowers prepay the Loans in whole
due to the sale of any Borrower or due to the refinancing of all of the
Obligations hereunder with a third party, the Borrowers shall pay the Agent
for the ratable account of each Lender a prepayment fee equal to two
percent (2%) of the amount being prepaid at any time from the date hereof
until that date one (1) year from the date hereof; and equal to one percent
(1%) of the amount being prepaid at any time thereafter prior to the
applicable Maturity Date.
ss.3.4 Cross Default and Termination. The Borrowers' Obligations
to the Lenders with respect to the Loans and the Letters of Credit shall be
and hereby are cross defaulted with all Loans and Obligations, now existing
or hereafter arising, of any Borrower or any Subsidiary or Affiliate
thereof owed to any of the Lenders or any Affiliates thereof. The Borrowers
expressly agree that if either the Revolving Credit Loan or the Term Loan
are terminated, or the Revolving Loan Commitment is terminated or reduced
to zero pursuant to ss.2.3, then, at the Lender's discretion, all
Obligations, including any amounts under the Loan that was not terminated,
shall become due and payable in full.
ss.4. CERTAIN GENERAL PROVISIONS.
ss.4.1. Funds for Payments.
(a) All payments of principal, interest, fees and any other
amounts due hereunder or under any of the other Loan Documents shall be
made to the Agent for the ratable account of the Lenders at 1155 Elm
Street, Manchester, New Hampshire 03101, or at such other location as the
Agent may from time to time designate. All payments on all Loans shall be
made in Dollars constituting immediately available funds.
(b) All payments by the Borrowers hereunder and under any of the
other Loan Documents shall be made without setoff or counterclaim and free
and clear of and without deduction for any taxes, levies, imports, duties,
charges, fees, deductions, withholdings, compulsory loans, restrictions or
conditions of any nature now imposed or levied by any jurisdiction or any
political subdivision thereof or taxing or other authority therein unless
any such Borrower is compelled by law to make such deduction or withholding
or if the taxes are based upon or measured by the income or profits of the
Lenders, including profits or receipts with respect to the Loans. If any
such obligation is imposed upon any Borrower with respect to any amount
payable by it hereunder or under any of the other Loan Documents, the
Borrowers will pay to the Agent for the ratable account of the Lenders on
the date on which such amount is due and payable hereunder or under such
other Loan Document, such additional amount in Dollars as shall be
necessary to enable the Lenders to receive the same net amount which the
Lenders would have received on such due date had no such obligation been
imposed upon such Borrower. The Borrowers will deliver promptly to the
Agent certificates or other valid vouchers for all taxes or other charges
deducted from or paid with respect to payments made by the Borrowers
hereunder or under such other Loan Document. In the event any Lender
receives a refund of any taxes or other amounts for which it has received
payment from the Borrowers pursuant to this ss.4.1(b), such Lender shall,
within 30 days from the date of such receipt, pay the amount of such refund
to the Borrowers but only to the extent of payments made by the Borrower
pursuant to this ss.4.1(b) and net of all reasonable costs and expenses of
the Agent and such Lender relating thereto and without interest (other than
interest, if any, paid by the relevant government authority with respect to
such refund); provided, however, that the Borrowers upon request of the
Agent or any Lender, agree to repay the amount paid to the Borrowers by the
Agent or such Lender if the Agent or such Lender is required to repay such
refund to such governmental authority.
ss.4.2. Computations. All computations of interest on the LIBOR
Loans and Base Rate Loans and of commitment or other fees shall be based on
a 360-day year and paid for the actual number of days elapsed. Except as
otherwise provided in the definition of the term "Interest Period" with
respect to LIBOR Loans, whenever a payment hereunder or under any of the
other Loan Documents becomes due on a day that is not a Business Day, the
due date for such payment shall be extended to the next succeeding Business
Day, and interest shall accrue during such extension (unless that day falls
in the next calendar month, in which case that date will be the first
preceding day that is a Business Day).
ss.4.3 Inability to Determine LIBOR. In the event, prior to the
commencement of any Interest Period relating to any LIBOR Loan, the Agent
shall determine that adequate and reasonable methods do not exist in the
marketplace for ascertaining the LIBOR that would otherwise determine the
rate of interest to be applicable to any LIBOR Loan during any Interest
Period, the Agent shall give notice of such determination (which shall be
conclusive and binding on the Borrowers) to the Borrowers. In such event
(a) any Loan Request with respect to LIBOR Loans shall be automatically
withdrawn and shall be deemed a request for Base Rate Loans, (b) each LIBOR
Loan will automatically, on the last day of the then current Interest
Period thereof, become a Base Rate Loan, and (c) the obligations of the
Lenders to make LIBOR Loans shall be suspended until the Agent determines
that the circumstances giving rise to such suspension no longer exist,
whereupon the Agent shall so notify the Borrowers.
ss.4.4. Illegality. Notwithstanding any other provisions herein,
if any present or future law, regulation, treaty or directive or change in
the interpretation or application thereof shall make it unlawful for any
Lender to make or maintain LIBOR Loans, such Lender shall forthwith give
notice of such circumstances to the Agent who shall in turn notify the
Borrowers and thereupon (a) the commitment of such Lender to make LIBOR
Loans shall forthwith be suspended and (b) the Loans then outstanding as
LIBOR Loans from such Lender, if any, shall be converted automatically to
Base Rate Loans on the last day of each Interest Period applicable to such
LIBOR Loans (as applicable) or within such earlier period as may be
required by law. The Borrowers hereby agree promptly to pay the Agent on
behalf of such Lender, upon demand by such Lender accompanied by a
certificate setting forth in reasonable detail such costs, any additional
amounts necessary to compensate such Lender for any reasonable costs
incurred by such Lender in making any conversion in accordance with this
ss.4.4, including any Breakage Costs and other reasonable interest or fees
payable by such Lender to lenders of funds obtained by it in order to make
or maintain its LIBOR Loans hereunder; provided, that to the extent
permitted by applicable law, each Lender shall maintain each LIBOR Loan
until the last day of an Interest Period.
ss.4.5. Additional Costs, Etc. If any change in any present
applicable law or if any future applicable law, which expression, as used
herein, includes statutes, rules and regulations thereunder and
interpretations thereof by any competent court or by any governmental or
other regulatory body with the administration or the interpretation thereof
and directives, instructions and notices at any time or from time to time
hereafter made upon or otherwise issued to any Lender by any central bank
or other fiscal, monetary or other authority (whether or not having the
force of law, but only if it is mandatory that such Lender comply), shall:
(a) subject such Lender to any tax, levy, impost, duty, charge,
fee, deduction or withholding of any nature with respect to this Credit
Agreement, the other Loan Documents, or the Loans (other than taxes based
upon or measured by the income or profits of such Lender, including without
limitation profits or receipts with respect to the Loans and other than any
withholding tax imposed on any payments by the Borrowers to such Lender);
or
(b) materially change the basis of taxation (except for changes in
taxes on income or profits and except for any withholding tax imposed on
any payments by the Borrower to the Lenders) of payments to such Lender of
the principal of or the interest on any Loans or any other amounts payable
to such Lender under this Credit Agreement or the other Loan Documents; or
(c) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Credit Agreement) any
special deposit, reserve, assessment, liquidity, capital adequacy or other
similar requirements (whether or not having the force of law, but only if
it is mandatory that such Lender comply) against assets held by, or
deposits in or for the account of, or loans by, or commitments of an office
of such Lender; or
(d) impose on such Lender any other conditions or requirements
with respect to this Credit Agreement, the other Loan Documents, the Loans,
or any class of loans or commitments of which any of the Loans forms a
part;
and the result of any of the foregoing is to:
(i) increase the cost to such Lender of making, funding, issuing
or maintaining of the Loans, the Letters of Credit or its Percentage of the
Total Commitment; or
(ii) reduce the amount of principal, interest or other amount
payable to such Lender hereunder on account of any of
the Loans or its Percentage of the Total Commitment; or
(iii) require such Lender to make any payment or to forego any
interest or other sum payable hereunder, the amount of which payment or
foregone interest or other sum is calculated by reference to the gross
amount of any sum receivable or deemed received by such Lender from the
Borrower hereunder;
then, and in each such case, the Borrowers will, within ten (10) Business
Days following receipt of written notice from the Agent on behalf of such
Lender, which written notice shall include a description of the relevant
change in law, calculations of the amounts payable, pay to the Agent on
behalf of such Lender such additional amounts as will be sufficient to
compensate such Lender for such additional cost, reduction, payment or
foregone interest or other sum.
ss.4.6. Capital Adequacy. If any change in any present law,
governmental rule, regulation, policy, guideline or directive or if any
future law, governmental rule, regulation, policy, guideline or directive
(in each case whether or not having the force of law, but only if it is
mandatory that the Lender comply) or the interpretation thereof by a court
or governmental authority with appropriate jurisdiction or any change in
any such law or interpretation (including, without limitation, any change
according to a prescribed schedule of increasing requirements, whether or
not known on the date of this Credit Agreement) affects the amount of
capital required or expected to be maintained by any Lender or any
corporation controlling such Lender and such Lender determines that the
amount of capital required to be maintained by it is increased by or based
upon the existence of the Commitments or Loans made pursuant hereto, then
the Agent on behalf of such Lender may notify the Borrowers of such fact.
To the extent that the costs of such increased capital requirements are not
reflected in the applicable rate(s) of interest on the Loans, the Borrowers
and the Agent on behalf of such Lender shall thereafter attempt to
negotiate in good faith, within thirty (30) days of the day on which the
Borrowers receives such notice, an adjustment payable hereunder that will
adequately compensate such Lender in light of these circumstances. If the
Borrowers and the Agent on behalf of such Lender are unable to agree to
such adjustment within thirty (30) days of the date on which the Borrowers
receive such notice, then commencing on the date Borrowers received such
notice (but not earlier than the effective date of any such increased
capital requirement), from time to time the Borrowers will pay to the
Agent, on behalf of such Lender after consultation with the affected
Lender, such additional amount that will, in the Agent's reasonable
determination, provide adequate compensation to such Lender. Such Lender
shall allocate such cost increases among its customers in good faith and on
an equitable basis.
ss.4.7. Certificate. A certificate setting forth any additional
amounts payable pursuant to ss.4.5, ss.4.6 or ss.4.8 and a reasonably
detailed explanation of such amounts which are due, including calculation
of such amounts, submitted by the Agent on behalf of any Lender to the
Borrowers, shall be conclusive, absent manifest error, that such amounts
are due and owing.
ss.4.8. Indemnity. The Borrowers agree to indemnify each Lender
and to hold each Lender harmless from and against any loss, reasonable cost
or expense that such Lender may sustain or incur resulting from (a) a
default by any Borrower in payment of the principal amount of or any
interest on any Loans as and when due and payable, including any Breakage
Costs and other such losses or reasonable expenses arising from interest or
fees payable by such Lender to lenders of funds obtained by it in order to
maintain its Loans, (b) the failure of the Borrowers to make a borrowing
after the Borrowers have given (or is deemed to have given) a Loan Request
relating thereto in accordance with ss.2.7 or (c) the making of any payment
or prepayment of a Loan or the conversion of any LIBOR Loan to a Base Rate
Loan on a day that is not the last day of the applicable Interest Period
with respect thereto, including any Breakage Costs, interest or fees
payable by such Lender to lenders of funds obtained by it in order to
maintain any such Loans.
ss.4.9. Charges for Overdue Amounts. The Borrowers shall pay a
late fee equal to five percent (5%) of the required payment of the entire
amount of any required interest and/or principal that is not paid within
ten (10) days after the same due.
ss.4.10. Mitigation. Each Lender shall take commercially
reasonable efforts (which shall not require such Lender to incur an
unreimbursed loss or unreimbursed cost or expense or otherwise take any
action inconsistent with its internal policies or suffer any disadvantage
or burden deemed by it to be significant) to assign its rights and delegate
and transfer its obligations hereunder to another of its offices to the
extent that such assignment, delegation and transfer would reduce amounts
otherwise payable by the Borrower to such Lender pursuant to ss.4.1(b),
ss.4.4, ss.4.5, ss.4.6 and ss.4.8 or to make or maintain LIBOR Loans
hereunder. The Borrowers agree to pay all reasonable costs and expenses
incurred by any Lender in connection with any such assignment, delegation
and transfer.
ss.4.11. Joint and Several Obligations. Notwithstanding any other
provision of this Credit Agreement, (i) each of the covenants, agreements
and obligations of the Borrowers and the Subsidiaries set forth in this
Credit Agreement or in any other Loan Document shall be the joint and
several covenants, agreements and obligations of the Borrowers, the
Subsidiaries and any other guarantor, co-borrower, endorser or other
surety, regardless of whether any such Borrower or Subsidiary was the
actual recipient of the proceeds of a Loan, (ii) all representations and
warranties of the Borrowers and the Subsidiaries contained in this Credit
Agreement or in any other Loan Document shall be deemed to be separately
made by each Borrower and the Subsidiaries and (iii) any notice, request,
consent, report or other information or agreement delivered by any Borrower
shall be deemed for all purposes to be consented to, ratified and delivered
by the Borrowers and the Subsidiaries. In furtherance of the foregoing, the
Borrowers and the Subsidiaries acknowledge and agree that each covenant,
agreement and obligation of the Borrowers and the Subsidiaries in this
Credit Agreement or any other Loan Document is the joint and several
obligation of the Borrowers and the Subsidiaries.
ss.5. REPRESENTATIONS AND WARRANTIES. In order to induce the Lenders to
enter into this Credit Agreement and to make the Loans provided for
hereunder, the Borrowers and the Subsidiaries (as applicable) make the
following representations and warranties, which shall survive the execution
and delivery hereof and of the Notes:
ss.5.1 Organization, Standing, etc. of the Borrowers. Each
Borrower is a corporation or limited liability company (as applicable) duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
authority to own and operate its properties, to carry on its business as
now conducted and proposed to be conducted, to enter into this Credit
Agreement, the other Loan Documents and all other documents to be executed
by it in connection with the transactions contemplated hereby, to issue the
Notes and to carry out the terms hereof and thereof. Each of this Credit
Agreement and the other Loan Documents is the joint and several legal,
valid and binding obligation of the Borrowers enforceable against each
Borrower in accordance with its terms.
ss.5.2 Subsidiaries. Schedule 5.2 attached hereto correctly sets
forth as to each Subsidiary, its name, the jurisdiction of its
incorporation, the number of shares of its capital stock of each class
outstanding and the number of such outstanding shares owned by any Borrower
and its other Subsidiaries. Each such Subsidiary is a corporation, limited
liability company or partnership, duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation and
has all requisite corporate power and authority to own and operate its
properties and to carry on its business as now conducted and proposed to be
conducted. All of the outstanding capital stock of each Subsidiary is
validly issued, fully-paid and nonassessable, and is owned by the Borrowers
or by the Borrowers' Subsidiaries as specified in Schedule 5.2, in each
case free of any mortgage, pledge, lien, security interest, charge, option
or other encumbrance, other than restrictions imposed by applicable federal
and state securities laws. The Subsidiaries listed on Schedule 5.2 under
the column "Material Subsidiaries" on said Schedule 5.2 constitute any
Subsidiaries which alone account for five percent (5%) or more of the
Borrowers' consolidated total assets or account for five percent (5%) or
more of the Borrowers' consolidated total revenue for continuing operations
for the immediately preceding fiscal year.
ss.5.3 Qualification. Each Borrower and its Subsidiaries are duly
qualified or licensed and in good standing as foreign corporations or
entities duly authorized to do business in each jurisdiction in which the
character of the properties owned or the nature of the activities conducted
makes such qualification or licensing necessary except where failure to
qualify would not likely cause a Material Adverse Effect.
ss.5.4 Financial Information; Disclosure, Etc. The financial
statements heretofore delivered to the Lenders by the Borrowers have been
prepared in accordance with GAAP applied on a consistent basis and fairly
present the financial position and results of operations of the Persons to
which they purport to relate as of the dates and for the periods indicated.
Since the end of the most recent fiscal period shown in such financial
statements or in the most recent financial statements delivered by the
Borrowers under ss.6.2(a), there has not been any Material Adverse Effect
in the business, operations, condition (financial or otherwise) or
properties of any Borrower or any of its respective Subsidiaries, taken as
a whole. Neither this Credit Agreement nor any financial statements,
reports, projections or documents or certificates furnished to the Lenders
by the Borrowers in connection with the transactions contemplated hereby
contain as of their respective dates any untrue statement of a material
fact or omit to state any material fact necessary to make the statements
herein or therein contained not misleading. None of the Loans will render
any Borrower unable to pay its debts as they become due; no Borrower is
contemplating either the filing of a petition by it under any state or
federal bankruptcy or insolvency laws or the liquidation of all or a major
portion of its property; and no Borrower has knowledge of any Person
contemplating the filing of any such petition against it.
ss.5.5 Licenses, Etc. The Borrowers possess all material
authorizations, licenses, permits and franchises of any public or
governmental regulatory body which are necessary for the conduct of the
business of each Borrower and its Subsidiaries as now conducted and the
absence of which would result, either in any case or in the aggregate, in a
Material Adverse Effect on any of the Borrowers, or their Subsidiaries
(such material authorizations, licenses, permits and franchises, together
with any extensions or renewals thereof, being herein sometimes referred to
collectively as the "Licenses"). All of such Licenses are in full force and
effect and the Borrowers and their Subsidiaries have fulfilled and
performed all of their obligations with respect thereto and have full power
and authority to operate thereunder.
ss.5.6 Tax Returns and Payments. Except as set forth on Schedule
5.6, the Borrowers and their Subsidiaries have filed all tax returns
required by law to be filed and have paid all material taxes, assessments
and other governmental charges levied upon any of their respective
properties, assets, income or franchises, other than those not yet
delinquent and those, not material in aggregate amount, being or about to
be contested as provided in ss.6.5. The charges, accruals and reserves on
the books of each Borrower and its Subsidiaries in respect of their
respective taxes are adequate in the opinion of the Borrowers, and the
Borrowers know of no unpaid assessment for additional taxes or of any basis
therefor.
ss.5.7 Indebtedness, Liens and Investments, Etc. Schedule 5.7
attached hereto sets forth, as of the date hereof, (a) the amounts of all
outstanding Indebtedness of each Borrower and its Subsidiaries in respect
of borrowed money, Capitalized Leases and the deferred purchase price of
property, (b) all existing mortgages, liens and security interests in
respect of such Indebtedness, (c) all agreements which directly or
indirectly require any Borrower or its Subsidiaries to make any material
investments, loans or advances and (d) all existing material guarantees by
any Borrower and its Subsidiaries.
ss.5.8 Title to Properties, Liens. Each Borrower and its
Subsidiaries has good and marketable title to all of their respective
properties and assets, and none of such properties or assets is subject to
any mortgage, pledge, lien, security interest, charge or encumbrance except
for (i) Permitted Liens and (ii) minor liens and encumbrances which in the
aggregate are not substantial in amount, do not in any case materially
detract from the value of the property subject thereto or materially impair
the operations of any Borrower or any Subsidiaries and have not arisen
otherwise than in the ordinary course of business. Each Borrower and its
Subsidiaries enjoy quiet possession under all leases to which they are
parties as lessees, and, to the knowledge of the Borrowers, all of such
leases are valid, subsisting and in full force and effect. None of such
leases contains any provision restricting the incurrence of indebtedness by
the lessee.
ss.5.9 Litigation, Etc. Except as set forth in Schedule 5.9
attached hereto, there is no action, proceeding or investigation pending or
threatened (or any basis therefor known to the Borrowers) which questions
the validity of this Credit Agreement, the Notes or the other documents
executed in connection herewith, or any action taken or to be taken
pursuant hereto, or which could reasonably be expected to result, either in
any case or in the aggregate, in any Material Adverse Effect in the
business, operations, affairs, condition (financial or otherwise) or
properties of any Borrower or any of its respective properties or any
material liability on the part of any Borrower.
ss.5.10 Authorization, Compliance with Other Instruments. The
execution, delivery and performance of this Credit Agreement, the Notes and
the other Loan Documents have been duly authorized by all necessary
corporate or other action on the part of each Borrower and any Material
Subsidiary, will not result in any violation of or be in conflict with or
constitute a default under any term of the charter or by-laws of any
Borrower or any Material Subsidiary, or of any material agreement, material
instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to any Borrower or any Material Subsidiary, or result
in the creation of any mortgage, lien, charge or encumbrance upon any of
the properties or assets of any Borrower pursuant to any such term. No
Borrower nor any Subsidiary is in violation of any term of its charter or
by-laws, or of any term of any material agreement or instrument to which it
is a party, or, to any Borrower's knowledge, of any judgment, decree,
order, statute, rule or governmental regulation applicable to it.
ss.5.11 Governmental Consent. No order, consent, approval or
authorization of, or declaration to or filing with, any governmental
authority (collectively, "Consents") is required to be obtained or made by
any Borrower or by any Subsidiary in connection with the execution and
delivery of this Credit Agreement and the Loan Documents and the issuance
and delivery of the Notes pursuant hereto other than those consents which
have been obtained and are in full force and effect and other than the
filing of financing statements.
ss.5.12 Intentionally Omitted.
ss.5.13 Regulation U, Etc. No Borrower and no Subsidiary owns or
has any present intention of acquiring any "margin stock" within the
meaning of Regulation U (CFR 221) of the Board of Governors of the Federal
Reserve System (herein called "margin stock"). None of the proceeds of the
Loans will be used, directly or indirectly, by any Borrower or any
Subsidiary for the purpose of purchasing or carrying, or for the purpose of
reducing or retiring any indebtedness which was originally incurred to
purchase or carry, any margin stock or for any other purpose which might
constitute the transactions contemplated hereby a "purpose credit" within
the meaning of said Regulation U, or cause this Credit Agreement to violate
Regulation U, Regulation T, Regulation X, or any other regulation of the
Board of Governors of the Federal Reserve System or the Securities Exchange
Act of 1934.
ss.5.14 Employee Retirement Income Security Act of 1974. Each
Employee Benefit Plan and to the Borrowers' knowledge, each Multiemployer
Plan, is in compliance in all material respects with applicable provisions
of ERISA and the Code. No ERISA Reportable Event has occurred or, to the
Borrowers' knowledge, is imminent or likely to occur. No Borrower and no
ERISA Affiliate has incurred any material liability to the PBGC or any
Employee Benefit Plan or Multiemployer Plan on account of any failure to
meet the contribution requirements of any such plan, minimum funding
requirements or prohibited transactions under ERISA or the Code,
termination of a single employer plan, partial or complete withdrawal from
a Multiemployer Plan, or the insolvency, reorganization or termination of
any Multiemployer Plan, and no event has occurred or conditions exist which
present a material risk that any Borrower or any ERISA Affiliate will incur
any material liability on account of any of the foregoing circumstances.
The consummation of the transactions contemplated by this Credit Agreement
and the Loan Documents will not result in any prohibited transaction under
ERISA or the Code for which an exemption is not available.
ss.5.15 Environmental Matters. Except as set forth on Schedule
5.15, no Borrower and no Subsidiary nor, to Borrowers' knowledge, any other
Person has ever caused or permitted any Hazardous Material to be disposed
of on or under any real property owned, leased or operated by any Borrower
or any Subsidiary or in which the Borrower or any Subsidiary has ever held,
directly or indirectly, any legal or beneficial interest or estate, and no
such real property has ever been used (either by any Borrower or any
Subsidiary or, to the Borrowers' knowledge, by any other Person) as (i) a
disposal site or permanent storage site for any Hazardous Material or (ii)
except in compliance with and as permitted by Environmental Laws, a
temporary storage site for any Hazardous Material. Each Borrower and each
of its Subsidiaries have been issued and are in compliance in all material
respects with all material permits, certificates, licenses, approvals and
other authorizations relating to environmental matters and necessary or
desirable for their respective businesses, and have filed all notifications
and reports relating to chemical substances, air emissions, underground
storage tanks, effluent discharges and Hazardous Material waste storage,
treatment and disposal required in connection with the operation of their
respective businesses, the failure to have or comply with which would,
individually or in the aggregate, have a Material Adverse Effect on any
Borrower. All Hazardous Materials used or generated by each Borrower and
each Subsidiary and to the best of the Borrowers' knowledge, each business
merged into or otherwise acquired by any Borrower or any Subsidiary have
been generated, accumulated, stored, transported, treated, recycled and
disposed of in compliance in all material respects with all applicable laws
and regulations, the violation of which has any reasonable likelihood of
having a Material Adverse Effect on any Borrower or any Subsidiary. Except
as disclosed on Schedule 5.15, to the best of the Borrowers' knowledge,
neither Borrower nor any Subsidiary has any liabilities with respect to
Hazardous Materials and no facts or circumstances exist which could give
rise to liabilities with respect to Hazardous Materials. To the best of the
Borrower's knowledge, neither Borrower nor any Subsidiary has any
liabilities with respect to Hazardous Materials which individually or in
the aggregate, including those on Schedule 5.15, have a reasonable
likelihood of having a Material Adverse Effect on any Borrower or any
Subsidiary.
ss.5.16 Use of Proceeds. The Borrowers will use the proceeds of
the Revolving Loans solely for working capital, acquisition financing for
the Rittenhouse Transaction, payment of the Ricoh judgement and for other
general corporate purposes of the Borrowers, and Borrowers shall use the
proceeds of the Term Loan only in connection with the Rittenhouse
Transaction.
ss.5.17 Investment Company Act, Public Utility Holding Company
Act. No Borrower and no Subsidiary is (a) an "investment company" as
defined in, or subject to regulation under, the Investment Company Act of
1940 or (b) a "holding company" as defined in or subject to regulation
under, the Public Utility Holding Company Act of 1935.
ss.5.18 Disclosures. Neither this Credit Agreement nor any other
Loan Document contains any untrue statement of material fact or fails to
state a material fact necessary in order to make the statements contained
herein or therein not misleading in light of the circumstances under which
they were made. No fact is known to the Borrowers or the Subsidiaries which
has resulted or may (to the extent foreseeable) result in any Material
Adverse Effect on the business or prospects of any Borrower or any of the
Subsidiaries, except to the extent that future general economic conditions
may result in a Material Adverse Effect.
ss.6. AFFIRMATIVE COVENANTS. Each of the Borrowers covenant and
agree that, so long as any Loan or Note is outstanding or the Lenders have
any Available Revolving Commitment:
ss.6.1 Records and Accounts. Each Borrower will (a) keep true and
accurate records and books of account in which full, true and correct
entries will be made in accordance with GAAP and (b) maintain adequate
accounts and reserves for all taxes (including income taxes), depreciation,
depletion, obsolescence and amortization of its properties, contingencies,
and other reserves, all in accordance with GAAP.
ss.6.2 Financial Statements, Certificates and Information. The
Borrowers will furnish or cause to be furnished to each Lender:
(a) Within one hundred twenty (120) days after the end of each
fiscal year of the Borrowers: (i) the consolidated balance sheets of the
Borrowers and their Subsidiaries as at the end of such year and (ii) the
related consolidated statements of income and surplus and cash flow for
such year, setting forth in comparative form with respect to such
consolidated financial statements figures for the previous fiscal year, all
in reasonable detail, together with the opinion thereon of independent
public accountants selected by the Borrowers and reasonably satisfactory to
the Lenders, which opinion shall be in a form generally recognized as
unqualified and shall state that the financial statements have been
prepared in accordance with GAAP applied on a basis consistent with that of
the preceding fiscal year (except for changes, if any, which shall be
specified and approved in such opinion) and that the audit by such
accountants in connection with such financial statements has been made in
accordance with generally accepted auditing standards related to reporting.
The Borrowers shall promptly deliver to the Lenders upon receipt thereof,
copies of any management letters submitted to any Borrower by such
Borrowers' accountants in connection with any examination of the financial
statements of any Borrower made by such accountants;
(b) Within thirty (30) days after the end of each month during
Borrowers' fiscal year, (i) the unaudited consolidated and consolidating
balance sheets of the Borrowers and the Subsidiaries as at the end of such
period, and (ii) the related unaudited consolidated and consolidating
statements of income and surplus and cash flows for such period and for the
period from the beginning of the current fiscal year to the end of such
period, all in reasonable detail and signed by the chief financial officer
or treasurer of the Borrowers. Upon request of any Lender, such monthly
statements shall include agings, as of the end of said month, of all the
Borrowers' accounts receivable and a monthly inventory position report. All
such statements shall be prepared in the format approved by and reasonably
acceptable to the Lenders. For month ending April, 2000, the foregoing
monthly statements shall only be required for Nashua. Thereafter, such
monthly statements shall be required for all Borrowers;
(c) Together with the financial statements delivered pursuant to
subparagraph (a) above, a statement signed by the accountants who have
reported on the same to the effect that in connection with their
examination of such financial statements they have reviewed the provisions
of this Credit Agreement and have no knowledge of any event or condition
which constitutes an Event of Default or which, after notice or expiration
of any applicable grace period or both, would constitute such an Event of
Default or, if they have such knowledge, specifying the nature and period
of existence thereof; provided, however, that in issuing such statement,
such independent accountants shall not be required to go beyond normal
auditing procedures conducted in connection with their opinion referred to
above;
(d) On an annual basis prior to the Borrowers' fiscal year end,
furnish the Borrowers' business plan and budget for the upcoming fiscal
year which include a projected profit and loss statement, balance sheet,
cash flow projections and a capital budget;
(e) Furnish the Lenders with a fully executed compliance
certificate substantially in the form of compliance certificate attached
hereto as Exhibit B, within thirty (30) days after the end of each fiscal
quarter (the "Compliance Certificate");
(f) Within twenty (20) days after the end of each fiscal month of
the Borrowers, (i) until such time as the conditions of ss.11.7 and ss.11.8
are met and the Lender's deem the Real Estate to be acceptable collateral,
in their sole discretion, or (ii) if the aggregate principal amount
outstanding under the Revolving Credit Loan exceeds Fifteen Million Dollars
($15,000,000) or the amount of the Eligible Accounts is less than or equal
to Twenty Five Million Dollars ($25,000,000), the Borrowers shall deliver
to the Lenders a monthly certificate, in form attached hereto as Exhibit C,
certifying the amount of the Borrowing Base;
(g) Promptly after the same become publicly available, copies of
all periodic and other reports, proxy statements and other materials filed
by with the Securities and Exchange Commission, or any governmental
authority succeeding to any of or all of the functions of said Commission,
or with any national securities exchange, or distributed to its
shareholders generally, as the case may be (with the exhibits relating
thereto to be provided, at Borrowers' expense, upon the request of the
Agent or any Lender);
(h) Promptly upon their becoming available, copies of any periodic
or special reports filed by any Borrower or any Subsidiary with any
federal, state or local governmental agency or authority, if such reports
indicate any material change in the business, operations, affairs or
condition (financial or otherwise) of the Borrowers and Subsidiaries, taken
as a whole, or if copies thereof are requested by any Lender, and copies of
any materially adverse notices and communications from any federal, state
or local governmental agency or authority which specifically relate to any
Borrower or any Subsidiary;
(i) Promptly upon any officer of any Borrower obtaining knowledge
of any condition or event which constitutes an Event of Default or which,
after notice or lapse of time or both, would constitute an Event of
Default, a certificate signed by such officer specifying in reasonable
detail the nature and period of existence thereof and what action the
Borrowers have taken or propose to take with respect thereto;
(j) Promptly upon any officer of any Borrower obtaining knowledge
of any material litigation, arbitration or administrative or quasi-judicial
action brought or threatened, in writing, to be brought against any
Borrower or any of its Subsidiaries, a certificate signed by such officer
specifying in reasonable detail the nature thereof and what action the
Borrowers have taken or propose to take with respect thereto, the amount of
judgment sought together with (if requested by the Agent) copies of any
pleadings filed or to be filed in such proceeding; and
(k) Such other information regarding the business, affairs and
condition of the Borrowers and their respective Subsidiaries as any Lender
may from time to time reasonably request. The Borrowers will permit each
Lender to inspect the books and any of the properties or assets of the
Borrowers and their Subsidiaries, at the expense of the Borrower, at such
reasonable times as such Lender may from time to time request.
ss.6.3 Legal Existence: Compliance with Laws. Etc. Each Borrower
will, and will cause each Subsidiary to maintain its corporate existence
and business; maintain all properties which are reasonably necessary for
the conduct of such business, now or hereafter owned, in good repair,
working order and condition; take all actions necessary to maintain and
keep in full force and effect its Licenses; to the extent applicable, take
all steps necessary to maintain its status as a public company and to
maintain its status as a company listed on the New York Stock Exchange or a
national stock exchange; and, except as otherwise provided herein, comply
with all applicable statutes, rules, regulations and orders of, and all
applicable restrictions imposed by, all governmental authorities in respect
of the conduct of its business and the ownership of its properties; in each
case except to the extent that the failure to comply would not,
individually or in the aggregate, have a Material Adverse Effect on the
business, operations, affairs or condition (financial or otherwise) of any
Borrower or its Subsidiaries, taken as a whole; or any Subsidiary; provided
that no Borrower and no Subsidiary shall be required by reason of this
ss.6.3 to comply therewith at any time while such Borrower or such
Subsidiary shall be contesting its obligations to do so in good faith by
appropriate proceedings promptly initiated and diligently conducted, and if
it shall have set aside on its books such reserves, if any, with respect
thereto as are required by GAAP and deemed adequate by the Borrowers and
their independent public accountants. No Borrower and no Subsidiary will,
without the prior written consent of the Lenders, engage in any business
other than the Current Lines of Business.
ss.6.4 Insurance. Each Borrower will maintain or cause to be
maintained on all insurable properties now or hereafter owned by such
Borrower and any Subsidiary, insurance against loss or damage by fire or
other casualty to the extent customary with respect to like properties of
companies conducting similar businesses, including business interruption
insurance, and will maintain or cause to be maintained public liability and
workmen's compensation insurance insuring such Borrower and its
Subsidiaries to the extent customary with respect to companies conducting
similar businesses and, upon request, will furnish to the Lenders
satisfactory evidence of the same.
ss.6.5 Payment of Taxes. Each Borrower will, and will cause each
Subsidiary to, pay and discharge promptly as they become due and payable
all taxes, assessments and other governmental charges or levies imposed
upon it or its income or upon any of its properties or assets, or upon any
part thereof, as well as all lawful claims of any kind (including claims
for labor, materials and supplies) which, if unpaid, might by law become a
lien or a charge upon its properties or assets provided that no Borrower
and no Subsidiary shall be required to pay any such tax, assessment,
charge, levy or claim if the amount, applicability or validity thereof
shall currently be contested in good faith by appropriate proceedings
promptly initiated and diligently conducted and if such Borrower or such
Subsidiary, as the case may be, shall have set aside on its books such
reserves, if any, with respect thereto as are required by GAAP and deemed
appropriate by the Borrowers and their independent public accountants.
ss.6.6 Payment of Other Indebtedness, Etc. Except as to matters
being contested in good faith and by appropriate proceedings, each Borrower
will, and will cause each Subsidiary to, pay promptly when due, or in
conformance with customary trade terms, all other Indebtedness and
obligations incident to the conduct of its business.
ss.6.7 Further Assurances. From time to time hereafter, the
Borrowers will execute and deliver, or will cause to be executed and
delivered, such additional instruments, certificates or documents, and will
take all such actions, as the Lenders may reasonably request for the
purposes of implementing or effectuating the provisions of this Credit
Agreement or the other Loan Documents. Upon the exercise by the Lenders (or
the Agent on their behalf) of any power, right, privilege or remedy
pursuant to this Credit Agreement or the other Loan Documents which
requires any privilege, consent, approval, registration, qualification or
authorization of any governmental authority or instrumentality, the
Borrowers will execute and deliver, or will cause the execution and
delivery of, all applications, certifications, instruments and other
documents and papers that the Lenders may be required to obtain for such
governmental consent, approval, registration, qualification or
authorization. Upon receipt of an affidavit (with reasonable
indemnification by such Lender thereunder) of an officer of any Lender as
to the loss, theft, destruction or mutilation of any Note or any other
Security Document which is not of public record, and, in the case of any
such loss, theft, destruction or mutilation, upon surrender and
cancellation of such Note or other Security Document, the Borrowers will
issue, in lieu thereof, a replacement Note or other Security Document in
the same principal amount thereof and otherwise of like tenor.
ss.6.8 Depository Account. Subject to ss.6.12, the Borrowers will
maintain their principal operating accounts with the Agent.
ss.6.9 Use of Proceeds. The Borrowers will use the proceeds of
the Loans only for the purposes not prohibited by, and subject to the terms
and conditions of, ss.5.13 and ss.5.16.
ss.6. 10 Composition of Management. Nashua shall maintain the
current role and management responsibilities of the Senior Management of
Nashua (being Gerald Garbacz, as Chairman and Chief Executive Officer, and
Andrew Albert, as President and Chief Operating Officer); provided,
however, the failure of either of the aforesaid individuals to continue
their current role or responsibilities shall not constitute an Event of
Default hereunder if such individual is replaced, within six (6) months,
with another individual acceptable to the Lenders. Failure to replace the
aforesaid individuals within six (6) months with other individuals
acceptable to the Lenders shall constitute a "Change in Senior Management".
ss.6.11 Composition of Board. Nashua will maintain at least
fifty-one percent (51%) of the current members of the board of directors of
Nashua (being those individuals identified on Schedule 6.11 attached
hereto). The failure of at least fifty-one percent (51%) of the current
board of directors of Nashua to remain on the board shall constitute a
"Change in Control of the Board" and shall constitute an Event of Default
hereunder.
ss.6.12 Operating Account. Within ninety (90) days after the
Closing Date, the Borrowers agree to move the primary Rittenhouse operating
account and lockbox, to LaSalle.
ss.7. CERTAIN NEGATIVE COVENANTS. Each of the Borrowers covenant and
agree that, so long as any Loan or Note is outstanding or the Lenders have
any Available Revolving Commitment:
ss.7.1 Indebtedness. The Borrowers will not, nor will the
Borrower permit any Subsidiary to, create, incur, assume or become or
remain liable in respect of any Indebtedness, except:
(a) Indebtedness to the Lenders hereunder;
(b) Current or long term liabilities of the Borrowers and the
Subsidiaries (other than for borrowed money) incurred in the ordinary
course of their businesses and in accordance with customary trade
practices;
(c) Existing Indebtedness of the Borrowers and the Subsidiaries
referred to in Schedule 5.7 attached hereto, and renewals and extensions
thereof, provided that (i) the aggregate principal amount of such
Indebtedness is not at any time increased, and (ii) the interest rate
applicable to such Indebtedness shall be a market interest rate as of the
time of such renewal or extension;
(d) Indebtedness of the Borrowers and Subsidiaries secured by
Permitted Liens;
(e) To the extent not required to be paid by ss.6.5,
Indebtedness in respect of taxes, assessments, governmental changes and claims
for labor, material and supplies;
(f) Indebtedness in respect of deferred taxes arising in the
ordinary course of business;
(g) Indebtedness of the Borrowers to each other; and
(h) Indebtedness in respect of purchase money financing as
limited by ss.7.2(b); and
(i) Indebtedness of any Subsidiary or Borrower to any other
Borrower or Subsidiary to any Subsidiary as limited by ss.7.3(a).
ss.7.2 Mortgages, Liens, Etc. Without the prior written consent
of the Lenders, the Borrowers will not, nor will the Borrowers permit any
Subsidiary to, directly or indirectly, create, incur, assume or suffer to
exist, any mortgage, lien, charge or encumbrance on, or security interest
in, or pledge of, or conditional sale or other title retention agreement
(including any Capitalized Lease) with respect to any real or personal
property or asset now owned or hereafter acquired by the Borrowers or any
Subsidiary, except for the following (collectively, "Permitted Liens"):
(a) The mortgages and security interests referred to in Schedule
7.2 attached hereto, or any renewal, extension or refunding of any such
mortgage or security interest in an amount not exceeding the amount thereof
remaining unpaid immediately prior to such renewal, extension or refunding;
(b) Purchase money liens and other security interests, including
Capitalized Leases, created in respect of property acquired by any Borrower
or any Subsidiary after the date hereof or existing in respect of property
so acquired at the time of acquisition thereof, provided that (i) each such
lien shall at all times be confined solely to the item or items of property
so acquired, and (ii) the aggregate principal amount of Indebtedness
secured by all such liens shall at no time exceed $2,500,000;
(c) Liens for taxes and other amounts not yet delinquent or being
contested in good faith as provided in ss.6.5; liens in connection with
workmen's compensation, unemployment insurance or other social security
obligations; liens securing the performance of bids, tenders, contracts,
leases, statutory obligations, surety and appeal bonds, liens to secure
progress or partial payments and other liens of like nature arising in the
ordinary course of business; mechanics', workmen's, materialmen's or other
like liens arising in the ordinary course of business in respect of
obligations which are not yet due; and
(d) Encumbrances in the nature of (i) zoning restrictions, (ii)
easements, (iii) restrictions of record on the use of real property, (iv)
landlords' and lessors' liens on rented premises and (v) restrictions on
transfers or assignments of leases, which in each case do not, individually
or in the aggregate, materially detract from the value of the encumbered
property or impair the use thereof in the businesses of any Borrower or any
Subsidiaries.
ss.7.3 Loans, Guarantees and Investments. No Borrower will make
or permit to remain outstanding any loan or advance or guarantee or endorse
(except as a result of endorsing negotiable instruments for deposit or
collection in the ordinary course of business) or otherwise assume or
remain liable with respect to any obligation of, or make or own any
investment in, or acquire (except in the ordinary course of business) the
properties or assets of, any Person, except:
(a) Extensions of credit by any Borrower to any Subsidiary in the
ordinary course of business in accordance with customary trade practices
provided the same does not exceed $1,000,000 in the aggregate at any one
time;
(b) Extensions of credit between the Borrowers in the ordinary
course of business;
(c) The presently outstanding investments, loans and advances, if
any, and the presently existing guarantees, if any, of the Borrowers and
the Subsidiaries all to the extent set forth on Schedule 5.7 attached
hereto and any renewal, extension or refunding thereof, provided that (i)
the aggregate principal amount thereof is not at any time increased, and
(ii) the interest rate (if any) applicable thereto shall be a market
interest rate as of the time of such renewal or extension.
(d) Direct obligations of the United States of America or any
department or agency thereof maturing not more than one year from the date
of acquisition thereof,
(e) Certificates of deposit, repurchase agreements, time deposits
(including sweep accounts), demand deposits, bankers acceptances, money
market deposits or other similar types of investments maturing not more
than one year from the date of acquisition thereof and evidencing direct
obligations of any Lender or any lender within the United States of
America, England or Ireland, in each case having capital surplus and
undivided profits in excess of the equivalent of $50,000,000;
(f) Investments in commercial paper maturing within ninety (90)
days from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from Moody's or S&P;
(g) Any mutual fund or other pooled investment vehicle which
invests principally in obligations described in subparagraphs (c), (d) or
(e) above and having, at the date of investment in such fund or vehicle,
one of the two highest credit ratings from Moody's or S&P;
(h) Guarantees by the Borrowers of Indebtedness and other
obligations incurred by Subsidiaries to the extent permitted by ss.7.1.
ss.7.4 Leases. The Borrowers will not enter into any Capitalized
Lease, except as otherwise permitted under ss.7.1 and ss.7.2.
ss.7.5 Mergers and Consolidations; Acquisitions. No Borrower
will, nor will any Borrower permit any Subsidiary to, enter into any merger
or consolidation, except any wholly-owned Subsidiary of any Borrower may
merge or be liquidated into any Borrower so long as after giving effect to
any such merger to which any Borrower is a party, such Borrower shall be
the surviving or resulting person; and provided further that the Borrowers
and the Subsidiaries remain in compliance with all financial covenants
contained herein. No Borrower will, nor will any Borrower permit any
Subsidiary to, acquire the stock or assets of any company, which
transaction entails a purchase price in excess of $1,000,000, without the
prior written consent of the Lenders.
ss.7.6 Sale of Assets. The Borrowers will not permit, nor will it
permit any of its Subsidiaries to sell, lease or otherwise dispose of all
or any substantial part of its properties or assets.
ss.7.7 Capital Expenditures. The Borrowers will not have Capital
Expenditures in excess of $15,000,000 in the aggregate during fiscal year
2000, and in excess of $10,000,000 in the aggregate in any one fiscal year
thereafter.
ss.7.8 Distributions. The Borrowers will not make any
distribution or declare or pay any cash dividends on, or purchase, acquire
or redeem or retire any of its capital stock of any class, whether now or
hereafter outstanding, if there is a violation of or after such
distribution or dividend there would be a violation of any financial
covenants set forth in ss.8 hereof or if there are any Events of Default
under this Credit Agreement or any other Loan Documents.
ss.7.9 Compliance with ERISA. Each Borrower will make, and will
cause all ERISA Affiliates to make, all payments or contributions to
Employee Benefit Plans and Multiemployer Plans required under the terms
thereof and in accordance with applicable minimum funding requirements of
ERISA and the Code and applicable collective bargaining agreements. Each
Borrower will cause all Employee Benefit Plans sponsored by it or any ERISA
Affiliates to be maintained in material compliance with ERISA and the Code.
No Borrower will engage, or permit or suffer any ERISA Affiliate or any
Person entitled to indemnification or reimbursement from such Borrower or
any ERISA Affiliate to engage, in any prohibited transaction under ERISA or
the Code for which an exemption is not available. No Borrower and no ERISA
Affiliate will terminate, or permit the PBGC to terminate, any Employee
Benefit Plan or withdraw from any Multiemployer Plan, in any manner which
would be reasonably likely to cause a Material Adverse Effect and could
result in material liability of the Borrower or any ERISA Affiliate.
ss.7.10 Transactions with Affiliates. Except as set forth on
Schedule 7.10, no Borrower will not, nor will the Borrower permit any
Subsidiary to, directly or indirectly, enter into any lease or other
transaction with any Affiliate of such Borrower or such Subsidiary (other
than the Borrower) on terms that are less favorable to such Borrower or
such Subsidiary than those which could reasonably be obtained at the time
from a non-Affiliate.
ss.7.11 Observance of Subordination Provisions, Etc. No Borrower
will make, nor will the Borrower cause or permit to be made, any payments
in respect of any Subordinated Debt, in contravention of the subordination
provisions contained in the evidence of such Subordinated Debt or in
contravention of any written agreement pertaining thereto, nor will any
Borrower (a) amend, modify or change in any manner any of such
subordination provisions, or (b) amend, modify or change in any manner
adverse to the interests of the Lenders any of the other provisions set
forth in the agreements under which such Subordinated Debt is outstanding
or contained in the evidence of such Subordinated Debt.
ss.7.12 Environmental Liabilities. Except in accordance with
applicable law, no Borrower will make, nor will any Borrower permit any
Subsidiary to, violate any requirement of any material law, rule or
regulation regarding Hazardous Materials; and, without limiting the
foregoing, no Borrower will, nor will any Borrower permit any Subsidiary or
any other Person to dispose of any Hazardous Material into or onto, or
from, any real property owned, leased or operated by any Borrower or any
Subsidiary or in which any Borrower or any Subsidiary holds, directly or
indirectly, any legal or beneficial interest or estate, nor allow any lien
imposed pursuant to any law, regulation or order relating to Hazardous
Materials or the disposal thereof to be imposed or to remain on such real
property, except for liens being contested in good faith by appropriate
proceedings and for which adequate reserves have been established and are
being maintained on the books of the Borrowers and Subsidiaries.
ss.7.13 Subsidiaries. The Borrowers will not create any new
Subsidiaries without the prior consent of the Lenders (which consent shall
not be unreasonably withheld). The Borrowers shall immediately notify the
Lenders whether such new Subsidiary is a Material Subsidiary. Upon the
Lenders' request, the Borrowers shall cause each Material Subsidiary to
execute the joinder to this Credit Agreement and a guaranty of the
Borrowers' Obligations in the form attached hereto as Exhibit C, and to
deliver all such financial statements, information and reports as the
Lenders may reasonably request.
ss.7.14 Issuance of Shares. The Borrowers shall not permit any of
their wholly-owned Subsidiaries to issue or sell any shares of such
Subsidiary's capital stock or other evidence of beneficial ownership to any
Person other than the Borrowers.
ss.7.15 Subsidiary Distributions. The Borrowers shall not permit
any of its wholly-owned Subsidiaries to enter into or become bound by any
agreement (including covenants requiring the maintenance of specified
amounts of net worth or liquidity) restricting the right of any Subsidiary
to make distributions or dividends to any Borrower.
ss.7.16 Material Adverse Effect No Borrower will take nor fail
to take any action that could reasonably be expected to result in a
Material Adverse Effect.
ss.7.17 No Negative Pledges. No Borrower shall, nor will any of
its Subsidiaries, covenant or agree with any Person other than the Lenders
pursuant to this Credit Agreement that it will not directly or indirectly
create, incur, assume or suffer to exist any mortgage, lien, charge or
encumbrance on, or security interest in, or pledge of, or conditional sale
or other title retention agreement with respect to any property or asset
now owned or hereafter acquired by the Borrowers.
ss.8. FINANCIAL COVENANTS. Each Borrower covenants and agrees that,
so long as any Loan or Note is outstanding or the Lenders have any Available
Revolving Commitment, the Borrowers shall maintain or achieve the following
financial covenants subject to paragraph (a) hereof:
(a) Covenant Calculations. The covenants calculations in ss. 8(b)
and ss. 8(c) below shall be based upon the Borrowers' consolidated
financial statements. Such covenant compliance shall be tested as of the
end of each fiscal quarter on a rolling four quarter basis beginning as of
the end of the first quarter of fiscal year 2001. Prior to that period, the
covenants will be tested on a cumulative quarterly basis for each fiscal
quarter commencing after the date hereof, and EBITDA will be annualized for
purposes of determining covenant compliance for ss.8(b) only. The effect of
any changes resulting from the Rittenhouse Transaction and the integration
of the businesses, including without limitation, severance costs, through
the end of December, 2000, will be excluded from the covenant calculations.
(b) Total Funded Debt/EBITDA. Tested as set forth in ss.8(a), the
ratio of the Borrowers' Total Funded Debt to EBITDA shall not exceed 3.0 to
1.0. "Total Funded Debt" means the aggregate amount of all interest bearing
obligations of the Borrowers. "EBITDA" is the sum of the Borrowers' GAAP
net income (minus extraordinary income) plus Interest Expense, taxes,
depreciation and amortization.
(c) Fixed Charge Coverage Ratio. Tested as set forth in ss.8(a),
the Borrower shall maintain a Fixed Charge Coverage Ratio of at least 1.1
to 1.0. The Fixed Charge Coverage Ratio means the ratio of (i) the sum of
the Borrowers' EBITDA minus the sum of unfinanced Capital Expenditures,
dividends and cash taxes to (ii) the sum of Interest Expense and current
maturities of long term debt paid during the measured period.
ss.9. DEFAULTS: REMEDIES.
ss.9.1 Events of Default; Acceleration. If any of the following
events (each an "Event of Default") shall occur:
(a) The Borrowers shall fail to pay when due any principal or
interest on any Loan, any Note or any other Reimbursement Obligation
payable under any of the Loan Documents or any other fee due hereunder,
whether at maturity or at a date fixed for the payment of any installment
or prepayment thereof or otherwise and such default continues uncured for
three (3) calendar days from the due date hereof; or
(b) The Borrowers shall default in the performance of or
compliance with any term contained in ss.6.2(h), ss.6.2(i), ss.6.2(j),
ss.6.3, ss.6.9, ss.6.10 and ss.7.1 through and including ss.7.17, and ss.8;
or
(c) The Borrowers shall default in the performance of or
compliance with any term, conditions covenant or agreement (other than
those listed in ss.9.1 (a) and (b)) to be performed or observed by it under
this Credit Agreement or under any other Loan Document and such default
shall continue for a period after thirty (30) calendar days or more from
dispatch of notice of such default by the Agent or any Lender; or
(d) Any representation or warranty made by the Borrowers herein or
pursuant hereto shall prove to have been false or incorrect in any material
respect when made or when deemed to have been made; or
(e) Any Borrower or any Subsidiary shall default in (i) the
payment of any Indebtedness in respect of borrowed money (other than the
Loans), any Capitalized Lease or the deferred purchase price of any
property and such default (A) shall continue after giving effect to any
applicable grace periods and (B) shall be in respect of any aggregate
amount of principal (whether or not due) and accrued interest exceeding
$250,000; or (ii) the performance or compliance with any term of any
agreement or instrument relating to such Indebtedness in the principal
amount of $250,000 or more and such default (A) shall continue, without
having been duly cured, waived or consented to, beyond the period of grace,
if any, specified in such agreement or instrument, and (B) shall permit the
acceleration of such Indebtedness prior to its stated maturity; or
(f) Any Borrower or any Material Subsidiary shall discontinue its
business or shall make an assignment for the benefit of creditors, or shall
fail generally to pay its debts as such debts become due, or shall apply
for or consent to the appointment or taking possession by a trustee,
receiver or liquidator (or other similar official) of such Borrower or such
Material Subsidiary or any substantial part of the property of any Borrower
or of any Material Subsidiary, or shall commence a case or have an order
for relief entered against it under the federal bankruptcy laws, as now or
hereafter constituted, or any other applicable federal or state bankruptcy,
insolvency or other similar law, or if any Borrower or any Material
Subsidiary shall take any action to dissolve or liquidate such Borrower or
such Material Subsidiary; or
(g) If, within sixty (60) days after the commencement against any
Borrower or any Material Subsidiary of a case under the federal bankruptcy
laws, as now or hereafter constituted, or any other applicable federal or
state bankruptcy, insolvency or other similar law, such case shall have
been consented to or shall not have been dismissed or all orders or
proceedings thereunder affecting the operations or the business of such
Borrower or such Material Subsidiary stayed, or if the stay of any such
order or proceeding shall thereafter be set aside, or if within sixty (60)
days after the entry of a decree appointing a trustee, receiver or
liquidator (or other similar official) of any Borrower or any Material
Subsidiary or any substantial part of the property of the Borrower or such
Material Subsidiary, such appointment shall not have been vacated; or
(h) A final judgment which, with other outstanding final judgments
against such Borrower and its Material Subsidiaries, exceeds an aggregate
of $250,000 shall be rendered against any Borrower or any Material
Subsidiary and if, within sixty (60) days after entry thereof, such
judgment shall not have been discharged or execution thereof stayed pending
appeal, or if, within sixty (60) days after the expiration of any such
stay, such judgment shall not have been discharged, or if any such judgment
shall not be discharged forthwith upon the commencement of proceedings to
foreclose any lien, attachment or charge which may attach as security
therefor and before any of the property or assets of any Borrower or any
Material Subsidiary shall have been seized in satisfaction thereof; or
(i) The Collateral is materially injured or destroyed by fire or
otherwise, which casualty is not insured; or
(j) There shall have occurred a Change in Control or a Change in
Control of the Board; or
(k) There shall have occurred a Change in Senior Management; or
(l) If with respect to any Employee Benefit Plans or Multiemployer
Plans, there shall occur any of the following which would reasonably be
expected to have a material adverse effect on the financial condition of
any Borrower: (i) the violation of any of the provisions of ERISA; (ii) the
loss by such a plan intended to be a Qualified Plan of its qualification
under Section 401 (a) of the Code; (iii) the incurrence of liability under
Title IV of ERISA; (iv) a failure to make full payment when due of all
amounts which, under the provisions of any such plan or applicable law, any
Borrower or any ERISA Affiliate is required to make; (v) the filing of a
notice of intent to terminate such a plan under Section 4041 or 4041 A of
ERISA; (vi) a complete or partial withdrawal of any Borrower or any ERISA
Affiliate from any Qualified Plan resulting in the imposition of a tax
under Section 4980B of the Code:
then, and in any such event, and at any time thereafter, if any Event of
Default (other than an event described in ss.9(f) or ss.9(g) hereof) shall
then be continuing, the Required Lenders may direct the Agent to, by
written notice to the Borrowers, (i) declare the principal of and accrued
interest in respect of the Notes to be forthwith due and payable, whereupon
the principal of and accrued interest in respect of the Notes, and all
other amounts then due hereunder, shall become forthwith due and payable
without presentment, demand, protest or other notice of any kind, all of
which are hereby expressly waived by the Borrowers, and/or (ii) terminate
the Revolving Loan Commitment, whereupon the Revolving Loan Commitment of
the Lenders (and the Commitment of each individual Lender) to make Loans
hereunder shall forthwith terminate without any other notice of any kind;
and with respect to any event described in ss. 9(f) or ss. 9(g) above, the
Commitments shall automatically terminate and the principal of the Notes
then outstanding, together with accrued interest thereon and all other
amounts then due hereunder including all Obligations, shall automatically
become due and payable, without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived by the
Borrowers, anything contained herein or in any other Loan Document to the
contrary notwithstanding.
ss.9.2 Remedies on Default, Etc. In case any one or more Events of
Default shall occur and be continuing, the Lenders may proceed to protect
and enforce their rights by an action at law, suit in equity or other
appropriate proceeding, whether for the specific performance of any
agreement contained herein or in any other Loan Document, or for an
injunction against a violation of any of the terms hereof or thereof, or in
aid of the exercise of any power granted hereby or thereby or by law and
may proceed to liquidate and realize upon any of the Collateral in
accordance with their rights as a secured party and mortgagee under the
Uniform Commercial Code and under the Loan Documents. In case of a default
in the payment of any principal of or interest on any Note, or in the
payment of any fee due hereunder, the Borrowers will pay to the Lenders
such further amount as shall be sufficient to cover the cost and expense of
collection, including the Lenders' reasonable attorneys' fees, expenses and
disbursements. No course of dealing and no delay on the part of the Lenders
in exercising any right shall operate as a waiver thereof or otherwise
prejudice the Lenders' rights. No right conferred hereby or by any other
Loan Document upon the Lenders shall be exclusive of any other right
referred to herein or therein or now or hereafter available at law, in
equity, by statute or otherwise.
ss.10. CLOSING CONDITIONS. The obligations of the Lenders to make the
initial Loans and Letters of Credit shall be subject to the satisfaction of
the following conditions precedent:
ss.10.1. Loan Documents, Etc. Each of the Loan Documents shall
have been duly executed and delivered by the Borrowers shall be in full
force and effect and shall be in form and substance reasonably satisfactory
to the Lenders. The Agent and each Lender shall have received a fully
executed original of each such document.
ss.10.2. Corporate Action. All corporate action necessary for the
valid execution, delivery and performance by the Borrowers and any Material
Subsidiary of this Credit Agreement and the other Loan Documents shall have
been duly and effectively taken, and evidence thereof reasonably
satisfactory to the Agent shall have been provided to the Agent.
ss.10.3. Incumbency Certificate. The Agent shall have received
from the Borrowers and any Material Subsidiary an incumbency certificate,
dated as of the Closing Date, signed by a duly authorized officer of each
Borrower and Material Subsidiary and giving the name and bearing a specimen
signature of each individual who shall be authorized in the name and on
behalf of the Borrowers and any Material Subsidiary, (a) to sign each of
the Loan Documents; (b) to make Loan Requests; and (c) to give notices and
to take other action under the Loan Documents.
ss.10.4. Opinions of Counsel. The Agent shall have received a
favorable opinion addressed to the Lenders, dated as of the Closing Date,
from independent counsel to the Borrowers and the Subsidiaries, in form and
substance acceptable to the Lenders, to the effect that (A) each of the
Borrowers and the Material Subsidiary is a business corporation or limited
liability company, as applicable, duly organized and validly existing under
the laws of the state of its organization and each is duly qualified to do
business in all jurisdictions in which the nature of its business or assets
make such qualification necessary; (B) that the Loan Documents constitute
binding obligations of the Borrowers or the Material Subsidiary enforceable
in accordance with their terms; (C) that the Borrowers' and the Material
Subsidiary's entrance into the obligations evidenced by the Loan Documents
does not constitute a breach of the charter documents, articles of
incorporation or bylaws of any Borrower or any Material Subsidiary or any
other arrangements or agreements by which any Borrower or any Material
Subsidiary is bound and that the Borrowers' and Material Subsidiary's
entrance into and performance of the Borrowers loan obligations will not
require any further approvals or consents; (D) that, to such counsel's
knowledge, there is neither pending nor threatened any litigation,
administrative proceedings or investigations which if adversely determined
would have a Material Adverse Effect on any Borrower or Material Subsidiary
or any Borrower's or any Material Subsidiary's financial condition or
otherwise; (E) that the security interests granted to the Agent, on behalf
of the Lenders, in connection with the Loans constitute a valid perfected
security interest in the collateral described therein; (F) that the Real
Estate and the intended use thereof is in full compliance with zoning and
all other governmental laws and regulation applicable to the Real Estate;
and (G) addressing such other matters as deemed appropriate by the Lenders.
ss.10.5. Payment of Fees. The Borrowers shall have paid to the
Agent (i) the reasonable fees and expenses of the Agent's counsel in
connection with the documentation of the transactions described in this
Credit Agreement and (ii) all fees then due and payable pursuant to
ss.2.2(b), ss.2.2(c) and ss. 2.2(d) and elsewhere under this Credit
Agreement.
ss.10.6. Rittenhouse Transaction. The Borrowers' accountant shall
have conducted the due diligence in connection with the Rittenhouse
Transaction and such due diligence shall be deemed acceptable to the
Lenders in all respects. The Borrowers shall have completed the Rittenhouse
Transaction and Nashua shall have succeeded to all of the stock of RPC as
contemplated by the Rittenhouse Transaction on terms and conditions
acceptable to the Lenders.
ss.10.7 Closing Agenda. The Borrowers and any Material Subsidiary
shall have executed and delivered all of the Loan Documents as described
herein. Without limiting the foregoing, the Borrowers shall have delivered
to the Agent all of those items identified as "Borrowers' Documents" on the
Closing Agenda attached hereto as Exhibit D and made a part hereof, all of
which must be reasonably acceptable, in form and substance, to the Lenders.
ss.10.8 Title Insurance. The Agent shall have received:
(a) a title insurance policy written with a company acceptable to
the Lenders, insuring that the Lenders have a valid first lien of record on
Real Estate and that the title to Real Estate is good and marketable
subject only to those exceptions approved by the Lenders. In addition, the
policy shall have all standard exceptions, so-called, deleted, and shall
include such other affirmative insurance and endorsements as may be
requested by the Lenders;
(b) a survey of Real Estate which shall locate the improvements as
well as all easements and utilities on Real Estate and shall show (u) no
violation of any applicable zoning or building requirements, restrictive
covenants or the terms of any permits; (v) no encroachment of the
improvements onto abutting premises; (w) no encroachment of improvements
located on abutting premises onto Real Estate; (x) no material deviation
from the acreage of Real Estate as the same may have been represented to
the Lenders; (y) that Real Estate has access to or abuts a publicly
accepted way; and (z) that Real Estate is not located in a flood hazard
zone;
ss.10.9 Employment Agreement. The Borrowers shall have entered
into an employment agreement with Andrew Albert, on terms and conditions
acceptable to the Lenders.
ss.10.10 Valuation. The Lenders shall have received an
independent determination of at least Six Million Seventy-Nine Thousand
Dollars ($6,079,000) in orderly liquidation value of Nashua's machinery and
equipment in which a first priority security interest must be granted to
the Lenders pursuant to ss.2.11
ss.11. CONDITIONS TO ALL LOANS AND LETTER OF CREDIT. The obligations of the
Lenders to make any Loan and the obligation of the Fronting Bank to issue
any Letter of Credit whether on or after the Closing Date, shall also be
subject to the satisfaction of the following conditions precedent:
ss.11.1. Accuracy of Representations: No Event of Default. After
giving effect to the Loans proposed to be made on such Drawdown Date and
the issuance of any Letter of Credit, (i) all representations and
warranties of the Borrowers and the Subsidiaries contained in this Credit
Agreement, the other Loan Documents or in any document or instrument
delivered pursuant to or in connection with this Credit Agreement shall be
true and correct, in all material respects, as of the date as of which they
were made and shall also be true and correct, in all material respects, at
and as of the time of the making of such Loan or issuance of Letter of
Credit, with the same effect as if made at and as of that time (except to
the extent of changes resulting from transactions contemplated or permitted
by this Credit Agreement and the other Loan Documents, or to the extent
that such representations and warranties relate expressly to an earlier
date) and (ii) no Event of Default or other event which, with the giving of
notice or passage of time, would constitute an Event of Default shall have
occurred and be continuing. Each notice of request for borrowing by the
Borrowers hereunder and each issuance of a Letter of Credit shall
constitute a representation and warranty that all conditions precedent set
forth in Section 10 and 11 have been satisfied, as of the date of such
borrowing or Letter of Credit.
ss.11.2. Loan Request. The Agent shall have received a Loan
Request in the form required by ss.2.7.
ss.11.3. No Legal Impediment. No change shall have occurred in
any law or regulations thereunder or interpretations thereof that in the
reasonable opinion of any Lender would make it illegal for such Lender to
make such Loan.
ss.11.4 Due Diligence Complete. Before the Agent has any
obligation to make any Loan to the Borrowers, the Borrowers shall have
provided to the Agent copies of its constituent organizational documents,
evidence of its continued legal existence, evidence of its compliance with
the representations, warranties and covenants contained in this Credit
Agreement, with opinions as to the due authorization, execution and
delivery and enforceability of the Loan Documents with respect to such
Borrowers, and such other information as the Agent may reasonably require
of such Borrowers.
ss.11.5 No Material Adverse Change. On and as of the date of such
Loan or the issuance of any Letter of Credit, no material adverse change
shall have occurred with respect to the condition (financial or otherwise),
results of operations, business, operations, capitalization, assets or
liabilities of any Borrower, or any Subsidiary of any Borrower since the
Closing Date.
ss.11.6 Field Audit. Within ninety (90) days of the Closing Date,
the Lenders shall have completed their field audits relating to the
Borrowers and the Collateral and shall have found the results acceptable to
them.
ss.11.7 Environmental Site Assessment. On or before June 1, 2000,
the Lenders shall, have received a phase I environmental site assessment of
the Real Estate (the "Phase I"), which shall be at the Borrowers' expense
and be acceptable to the Lenders in their sole discretion. If the Phase I
recommends additional audits or testing or provides evidence or information
which suggests that potential environmental problems exist on the Real
Estate, the Lenders may, require that a full or supplemental environmental
inspection and audit report with respect to the Real Estate of a scope and
level of detail satisfactory to the Lenders be prepared by an environmental
engineer, at the Borrower's expense. If said report or inspection indicates
the presence of any Hazardous Substance (which is not in material
compliance with Environmental Laws and Permits) or a Release (which is not
in material compliance with Environmental Laws and Permits) or the threat
of a Release (which is not in material compliance with Environmental Laws
and Permits) on, at or from the Real Estate, the Borrowers shall promptly
undertake and diligently pursue to completion all necessary and appropriate
investigative, containment, removal, clean up and other remedial actions,
using methods recommended by the engineer or other person who prepared said
audit report or such other actions or methods acceptable to the Lenders.
Notwithstanding the foregoing, if the Borrower receives written notice from
the Agent (after the Agent receives the foregoing environmental reports)
that the Real Estate is not acceptable to the Required Lenders, the
Borrowers will not be required to pursue the remediation of the Real Estate
and the Term Loan shall be due and payable within ninety (90) days of the
date of said written notice unless the Borrowers provide the Agent with
other collateral acceptable to the Required Lenders in their sole
discretion. Failure to comply with the foregoing shall constitute an Event
of Default under the Loan Documents.
ss.11.8 Appraisal. On or before April 30, 2000, the Lenders shall
have received a full appraisal of the Real Estate indicating a value of not
less than Twenty Million Dollars ($20,000,000) and in form and substance
acceptable to the Lenders in their sole discretion.
ss.12. THE AGENT.
ss.12.1. Appointment, Powers and Immunities. Each Lender hereby
irrevocably appoints and authorizes the Agent to act as its agent hereunder
and under each of the Loan Documents specifically delegated to the Agent by
the terms of this Credit Agreement and the Loan Documents, together with
such other powers as are reasonably incidental thereto. The Agent (which
term as used in this sentence and in ss.12.5 and the first sentence of
ss.12.6 shall include reference to its Affiliates and the respective
officers, directors, employees and agents of the Agent and its Affiliates):
(a) shall have no duties or responsibilities except those expressly set
forth in this Credit Agreement to be a trustee for any Lender; (b) shall
not be responsible to the Lenders for any recitals, statements,
representations or warranties contained in this Credit Agreement, or in any
certificate or other document referred to or provided for in, or received
by any of them under, this Credit Agreement, or for the value, validity,
effectiveness, genuineness, enforceability, perfection or sufficiency of
this Credit Agreement, any Note or any other document referred to or
provided for herein or for any failure by the Borrowers or any other Person
to perform any of its obligations hereunder or thereunder; (c) shall not be
required to initiate or conduct any litigation or collection proceedings
hereunder except to the extent requested by or consented to by the Required
Lenders; and (d) shall not be responsible for any action taken or omitted
to be taken by it hereunder or under any other document or instrument
referred to or provided for herein or in connection herewith, except for is
own gross negligence or willful misconduct. The Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care. Subject to the foregoing, the Agent shall, on behalf of
the Lenders, exercise any and all rights, powers and remedies of the
Lenders under this Credit Agreement and any other Loan Documents, including
the giving of any consent or waiver or the entering into of any amendment,
subject to the provisions of ss.25.
ss.12.2. Reliance by Agent. The Agent shall be entitled to rely
upon any certifications, notices or communications (including any
communications by telephone, telex, telegram or cable) believed by it to be
genuine and correct and to have been signed or sent by or on behalf of the
proper Person or Persons, and upon advice and statements of legal counsel,
independent accountants and other experts selected by the Agent. As to any
matters not expressly provided for by this Credit Agreement, the Agent
shall in all cases be fully protected in acting, or in refraining from
acting, hereunder in accordance with the instructions of the Lenders, and
any action taken or failure to act pursuant thereto shall be binding on all
of the Lenders.
ss.12.3. Defaults. The Agent shall not be deemed to have
knowledge of the occurrence of an Event of Default (other than the
nonpayment of principal of or interest on the Notes or the Reimbursement
Obligations under the Loan Documents) unless the Agent has received written
notice from any Borrower or another Lender specifying such Event of
Default. In the event that the Agent receives such a notice of the
occurrence of an Event of Default, the Agent shall give a notice thereof to
the Lenders (and shall give each Lender prompt notice of each such
nonpayment). The Agent shall (subject to the provisions of ss.2.5 and
ss.12.7) take such action with respect to such Event of Default as shall be
directed by the Lenders, provided that, unless and until the Agent shall
have received such directions, the Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to
such Event of Default as it shall deem advisable and in the best interest
of the Required Lenders.
ss.12.4. Rights as a Lender. With respect to its Percentage Loans
made by it, Fleet Bank-NH, in its capacity as a Lender hereunder shall have
the same rights and powers hereunder as any other Lender and may exercise
the same as though it were not acting as the Agent, and the term "Lender"
or "Lenders" shall, unless the context otherwise indicates, include the
Agent in its individual capacity. The Agent and its Affiliates may (without
having to account therefor to any Lender) accept deposits from, (subject to
ss.7) lend money to and generally engage in any kind of banking, trust or
other business with the Borrowers or their Subsidiaries, as if the Agent
were not acting as the agent hereunder, and the Agent may accept fees and
other consideration from any of such Persons for services as the Agent or
otherwise without having to account for the same to the Lenders.
ss.12.5. Indemnification. The Lenders agree to indemnify the
Agent ratably in accordance with the aggregate principal amount of the
Notes held by the Lenders (or, if no such principal is at the time
outstanding, ratably in accordance with their respective Percentages), for
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or against the Agent in any
way relating to or arising out of this Credit Agreement or any of the other
Loan Documents or referred to herein or the transactions contemplated by or
referred to herein or therein (including the costs and expenses which the
Borrowers are obligated to pay but excluding, unless an Event of Default
has occurred and is continuing, normal administrative costs and expenses
incident to the performance of its agency duties hereunder) or the
enforcement of any of the terms of this Credit Agreement or of any such
other documents, provided that no Lender shall be liable for any of the
foregoing to the extent they arise from the gross negligence or willful
misconduct of the Agent.
ss.12.6. Non-Reliance on Agent and Other Lenders. Each Lender
agrees that it has, independently and without reliance on the Agent or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Borrowers and its own
decision to enter into this Credit Agreement and the other Loan Documents
and that it will, independently and without reliance upon the Agent or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Credit Agreement and the other Loan
Documents. The Agent shall not be required to keep itself informed as to
the performance or observance by the Borrowers of this Credit Agreement or
any other document referred to or provided for herein or to inspect the
properties or books of the Borrowers. Except for notices, reports and other
documents and information expressly required to be furnished to the Lenders
by the Agent hereunder, the Agent shall not have any duty or responsibility
to provide any Lender with any credit or other information concerning the
affairs, financial condition or businesses of the Borrowers which may come
into the possession of the Agent or any of its Affiliates. Notwithstanding
the foregoing, the Agent will use its best efforts to provide to the
Lenders any and all information reasonably requested by them and reasonably
available to the Agent promptly upon such request.
ss.12.7. Failure to Act. Except for action expressly required of
the Agent hereunder, the Agent shall in all cases be fully justified in
failing or refusing to act hereunder unless it shall be indemnified to its
satisfaction by the Lenders against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such
action.
ss.12.8. Resignation of Agent. Subject to the appointment and
acceptance of a successor Agent as provided below, the Agent may resign at
any time by giving notice thereof to the Lenders and the Borrowers. In the
event Agent's Percentage shall at any time be less than 20%, Agent shall
resign if requested by the other Lenders. Upon any such resignation, the
Lenders shall appoint a successor Agent which shall be reasonably
satisfactory to the Borrowers. If no successor Agent shall have been so
appointed by the Lenders and shall have accepted such appointment within 30
days after the retiring Agents giving of notice of resignation, then the
retiring Agent may, on behalf of the Lenders, appoint a successor Agent
which shall be a lender which has a combined capital and surplus of at
least $500,000,000 and which shall be reasonably satisfactory to the
Borrowers. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties if the retiring
Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. After the retiring Agent's resignation hereunder as
Agent, the provisions of this ss.12 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while
it was acting as the Agent.
ss.12.9. Cooperation of Lenders. Each Lender shall (a) endeavor
to and shall not be liable for any failure to promptly notify the other
Lenders and the Agent of any Event of Default known to such Lender under
this Credit Agreement and not reasonably believed to have been previously
disclosed to the other Lenders; and (b) provide the other Lenders and the
Agent with such information and documentation as such other Lender or the
Agent shall reasonably request in the performance of their respective
duties hereunder, including all information relative to the outstanding
balance of principal, interest and other sums owed to such Lender.
ss.12.10. Amendment of ss. l2. Each Borrower hereby agrees that
the provisions of this ss.12 (other than ss.12.8 and ss.12.11) generally
constitute an agreement among the Agent and the Lenders and that any and
all of the provisions of this ss.12 (other than ss.12.8 and ss.12.11) may
be amended at any time by the Lenders without the consent or approval of,
or notice to, any Borrower (other than the requirement of notice to
Borrowers of the resignation of the Agent and other than any provision in
addition to ss. 12.8 and ss. 12.11 to the extent that it directly affects
the Borrowers).
ss.12.11. Reliance. As to any consent that is granted or any other
action that is taken by the Agent hereunder, or under the Loan Documents,
the Borrowers shall be entitled to rely upon any of the foregoing granted,
delivered or taken by the Agent without the necessity of inquiring or
confirming the Agent's authority.
ss.13. SETOFF, ETC. Regardless of the adequacy of any Collateral, each
Borrower hereby grants to the Lenders, a lien, security interest and right
of setoff as security for all liabilities and Obligations to the Lenders,
whether now existing or hereafter arising, upon and against all deposits,
credits, collateral and property, now or hereafter in the possession,
custody, safekeeping or control of the Lenders or any entity under the
control of any of the Lenders or their Affiliates, or in transit to any of
them. At any time, without demand or notice, the Lenders may set off the
same or any part thereof and apply the same to any liability or Obligation
of the Borrowers and any Subsidiary even though unmatured and regardless of
the adequacy of any other collateral securing the loan. ANY AND ALL RIGHTS
TO REQUIRE THE LENDERS TO EXERCISE THEIR RIGHTS OR REMEDIES WITH RESPECT TO
ANY OTHER COLLATERAL WHICH SECURES THE LOANS PRIOR TO EXERCISING THEIR
RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF
THE BORROWER OR ANY SUBSIDIARY, ARE HEREBY KNOWINGLY, VOLUNTARILY AND
IRREVOCABLY WAIVED. The Lenders agree among themselves that, with respect
to all sums received by the Lenders applicable to the payment of principal
of or interest on the Notes, equitable adjustment will be made among the
Lenders so that, in effect, all such sums shall be shared ratably by each
of the Lenders whether received by voluntary payment, by the exercise of
the right of setoff or banker's lien, by counterclaim or cross-claim or by
the enforcement of any or all of the Notes. If any Lender receives any
payment on its Notes of a sum or sums in excess of its pro rata portion,
then such Lender receiving such excess payment shall purchase for cash from
the other Lenders an interest in their Notes in such amounts as shall
result in a ratable participation by each of the Lenders in the aggregate
unpaid amounts of the Notes then outstanding; provided, however, that if
all or any portion of such excess payment is thereafter recovered from such
Lender, the purchase shall be rescinded and the purchase price restored to
the extent of such recovery, but without interest.
ss.14. EXPENSES. Whether or not the transactions contemplated hereby shall
be consummated, each Borrower agrees to pay (a) the reasonable direct,
out-of-pocket costs of reproducing this Credit Agreement, the other Loan
Documents and the other agreements and instruments mentioned herein, (b)
any taxes (including any interest and penalties in respect thereto) payable
by the Lenders (other than taxes based upon the Lender's net income) on or
with respect to the transactions contemplated by this Credit Agreement (the
Borrowers hereby agreeing to indemnify the Lenders with respect thereto),
(c) the reasonable fees, expenses and disbursements of the Agent's counsel
incurred in connection with the preparation of the Loan Documents and other
instruments mentioned herein and the reasonable fees, expenses and
disbursements of the Agent's counsel and any local counsel to the Lenders
in connection, with any amendments, modifications, approvals, consents,
waivers or Replacement Lenders hereto or hereunder and (d) all reasonable
out-of-pocket expenses (including attorneys fees and costs for external
counsel to the Lenders and the allocated costs and disbursements of
internal counsel of the Lenders) incurred by the Lenders in connection with
(i) the enforcement of or preservation of rights under any of the Loan
Documents against Borrowers or the administration thereof after the
occurrence of an Event of Default or any event which, with the giving of
notice or passage of time or both, would constitute an Event of Default,
(ii) any replacement of a Lender pursuant to ss.17.4 and (iii) any
litigation, proceeding or dispute arising hereunder; provided, however,
that the Borrowers shall have no obligation to pay for the expenses of the
Agent or the Lenders to the extent such expenses result from the Agent's or
any Lender's gross negligence, fraud or willful misconduct.
ss.15. INDEMNIFICATION.
ss.15.1. General Indemnification. Each Borrower agrees to
indemnify and hold harmless each Lender from and against any and all
claims, actions and suits whether groundless or otherwise, and from and
against any and all liabilities, losses, damages and expenses of every
nature and character arising out of this Credit Agreement or any of the
other Loan Documents or the transactions contemplated hereby or thereby,
including (a) any actual or proposed use by the Borrowers of the proceeds
of any of the Loans, (b) any Borrower entering into or performing this
Credit Agreement or any of the other Loan Documents or (c) with respect to
any Borrower and its properties and assets, the violation of any
Environmental Law, the presence, disposal, escape, seepage, leakage,
spillage, discharge, emission, release or threatened release of any
Hazardous substances or any action, suit, proceeding or investigation
brought or threatened with respect to any Hazardous Substances (including,
but not limited to claims with respect to wrongful death, personal injury
or damage to property), in each case including the reasonable fees and
disbursements of counsel for the Agent, incurred in connection with any
such investigation, litigation or other proceeding; provided, however, that
the Borrowers shall not have any obligation to indemnify the Agent or the
Lenders for any liabilities, losses, damages or other expenses (i) incurred
in connection with any litigation commenced by any Borrower against the
Agent or any Lender, or by the Agent or any Lender against any Borrower,
which seeks enforcement of any rights hereunder or under any other Loan
Document and is determined adversely to the Agent or the Lenders in a final
non-appealable judgment or (ii) to the extent such liabilities, losses,
damages or other expenses result directly from the Agent's or any Lender's
gross negligence, fraud or willful misconduct. If, and to the extent that
the obligations of any Borrower under this ss.15 are unenforceable for any
reason, the Borrowers hereby agree to make the maximum contribution to the
payment in satisfaction of such obligations which is permissible under
applicable law.
ss.15.2. Foreign Currency Indemnification. Each Borrower waives,
to the extent it may lawfully do so, any right they may have in any
jurisdiction to pay any Loans in a currency other than the currency in
which such Loan is expressed to be payable under the Loan Documents (the
"Agreed Currency"). If a judgment or order is rendered by a court or other
tribunal of competent jurisdiction for the payment of amounts owing to the
Lenders under the Loan Documents and such order or judgment is expressed in
a currency other than the currency agreed to be paid under the Loan
Documents, or in the event that any payment is made in any currency other
than the Agreed Currency, each Borrower shall, to the extent permitted by
applicable law, indemnify and hold the Lenders harmless against any
deficiency arising from or resulting from any variation in rates of
exchange between (i) the rate at which any amount expressed in the Agreed
Currency is converted for purposes of such judgment, order or payment into
an equivalent amount of the payment currency, and (ii) the rate at which at
the time of payment of such amount pursuant to any Loan Document such
Agreed Currency could be purchased by the Agent with the payment currency
in the spot market in the place where such payment was to have been made.
ss.16. SURVIVAL OF COVENANTS. ETC. All covenants, agreements,
representations and warranties made herein, in any of the other Loan
Documents or in any documents or other papers delivered by or on behalf of
the Borrowers pursuant hereto shall be deemed to have been relied upon by
each Lender, notwithstanding any investigation heretofore or hereafter made
by and shall survive the making by the Lenders of the Loans, as herein
contemplated, and shall continue in full force and effect so long as any
amount due under this Credit Agreement or any of the other Loan Documents
remains outstanding or the Lenders have any obligation to make any Loans.
All statements contained in any certificate or other paper delivered to the
Lenders at any time by or on behalf of the Borrowers pursuant hereto shall
constitute representations and warranties as of the date thereof by the
Borrowers hereunder.
ss.17. ASSIGNMENT AND PARTICIPATION.
ss.17.1. Assignment by the Lenders. No Lender shall assign or
transfer any of its rights or obligations under any of the Loan Documents
(i) without the prior written consent of the Borrowers and the Agent, and
(ii) in amounts of less than $5,000,000 unless such Lender assigns its
entire remaining interest under the Loan Documents; provided, however, that
any Lender may, at any time and from time to time, sell, transfer, assign
or otherwise grant an interest in any Loan to a Subsidiary or any Affiliate
of such Lender or to a Federal Reserve Bank of the United States; and
provided, further, that upon the occurrence and during the continuance of
an Event of Default, no consent of the Borrowers shall be required to any
assignment. No assignment of any Lender's interest in the Loans or Loan
Documents shall be effective until the execution and delivery by the
assignee of a counterpart signature page to this Credit Agreement. The
Borrowers shall execute and deliver any Notes and other documents,
instruments and agreements required by the assignee Lender and the Agent to
effectuate such assignment. The assigning Lender shall pay to the Agent an
administrative fee in the amount of $3,500 at the time of such assignment,
in connection with and as a condition to the effectiveness of any such
assignment. Any Lender may at any time pledge all or any portion of its
rights under the Loan Documents including any portion of the Notes to any
of the twelve (12) Federal Reserve Banks organized under Section 4 of the
Federal Reserve Act, 12 U.S.C. Section 341. No such pledge or enforcement
thereof shall release the Lenders from their obligations under any of the
Loan Documents.
ss.17.2. Assignment by Borrowers. The Borrowers shall not assign
or transfer any of their rights or obligations under any of the Loan
Documents without the prior written consent of the Lenders.
ss.17.3. Participations by the Lenders. Any Lender may, without
the consent of Borrowers, the Agent or any other Lender, sell participating
interests to one or more banks or other entities (each a "Participant") in
all or a portion of such Lender's rights and obligations under this Credit
Agreement and the Loan Documents (including all or a portion of its
Commitment and the Loans owing to it); provided, however, that (i) such
Lender's obligations under this Credit Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) the Borrowers, the
Agent, and the other Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations
under this Credit Agreement and (iv) such participation shall be in an
amount of not less than $5,000,000. Any agreement or instrument pursuant to
which a Lender sells such a participation shall provide that such Lender
shall retain the sole right to enforce this Credit Agreement and to approve
any amendment, modification or waiver of any provision of this Credit
Agreement. Each Borrower agrees that each Participant shall be entitled to
the benefits of ss.4.5 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to ss.17.1.
ss.17.4. Replacement of Lender. In the event that any Lender
(other than the Agent in its capacity as a Lender) or, to the extent
applicable, any Participant (the "Affected Lender"):
(a) fails to perform its obligations to fund any portion of any
Loan or Letter of Credit on or after the Closing Date when required to do
so by the terms of this Credit Agreement, or fails to provide its portion
of any LIBOR Loan pursuant to ss.2 or on account of any legal requirement
as contemplated by ss.4.4; or
(b) refuses to consent to a proposed extension of the Maturity
Date that is consented to by all of the other Lenders; or
(c) refuses to consent to a proposed amendment, modification,
waiver or other action requiring consent of all of the Lenders under ss.25
that is consented to by Lenders owning at least 66% of the Percentages of
the Total Commitment;
then, so long as no Event of Default exists, the Borrowers shall have the
right to seek, at their own cost and expense, a replacement lender which is
reasonably satisfactory to the Agent and the Required Lenders (the
"Replacement Lender"). The Replacement Lender shall purchase the interests
of the Affected Lender in the Loans and its Commitment and shall assume the
obligations of the Affected Lender hereunder and under the other Loan
Documents upon execution by the Replacement Lender of an assignment
agreement in form and substance reasonably satisfactory to the Replacement
Lender and Affected Lender, and the tender by the Replacement Lender to the
Affected Lender of a purchase price agreed between the Replacement Lender
and the Affected Lender. Such assignment by any Affected Lender who has
performed its obligations hereunder shall be deemed an early termination of
any Loans to the extent of such Affected Lender's portion thereof, and the
Borrowers will pay to such Affected Lender any resulting amounts due under
ss.4.8. Upon consummation of such assignment, (i) the Replacement Lender
shall become party to this Credit Agreement as a signatory hereto and shall
have all the rights and obligations of the Affected Lender under this
Credit Agreement and the other Loan Documents with a Percentage equal to
the Percentage of the Affected Lender, (ii) the Affected Lender shall be
released from its obligations hereunder and under the other Loan Documents
and (iii) no further consent or action by any party shall be required.
Borrowers shall sign such documents and take such other actions reasonably
requested by the Replacement Lender to enable it to share in the benefits
of the rights created by the Loan Documents. Until the consummation of an
assignment in accordance with the foregoing provisions of this ss.17.4, the
Borrowers shall continue to pay to the Affected Lender any Obligations as
they become due and payable.
ss.18. FOREIGN LENDER. If any Lender is not incorporated or organized
under the laws of the United States of America or a state thereof, such Lender
shall deliver to and the Agent at the following:
(a) Two duly completed copies of United States Internal Revenue
Service Form 1001 or 4224 or successor form, as the case may be, certifying
in each case that such Lender is entitled to receive payments under this
Credit Agreement and the Notes without deduction or withholding of any
United States federal income taxes; provided, however, that if such Lender
is not a "bank" within the meaning of Section 881 (c)(3)(A) of the Code and
cannot deliver Form 100 br 4224, such Lender shall deliver to and the Agent
a certificate to such effect; and
(b) A duly completed Internal Revenue Service Form W-8 or W-9 or
successor form, as the case may be, to establish an exemption from United
States backup withholding tax.
Each such Lender that delivers to and the Agent a Form 1001 or
4224 and Form W-S or 9 pursuant to this ss. 18 further undertakes to
deliver to and the Agent two further copies of Form 1001 or 4224 and Form
W-8 or W-9, or successor applicable form, or other manner of certification,
as the case may be, on or before the date that any such form expires or
becomes obsolete or after the occurrence of any event requiring a change in
the most recent form previously delivered by it to and the Agent. Such
Forms 1001 or 4224 shall certify that such Lender is entitled to receive
payments under this Credit Agreement without deduction or withholding of
any United States federal income taxes. The foregoing documents need not be
delivered in the event any change in treaty, law or regulation or official
interpretation thereof has occurred which renders all such forms
inapplicable or which would prevent such Lender from delivering any such
form with respect to it, or such Lender advises that it is not capable of
receiving payments without any deduction or withholding of United States
federal income tax and, in the case of a Form W-8 or W-9, establishing an
exemption from United States backup withholding tax. Until such time as and
the Agent have received such forms indicating that payments hereunder are
not subject to United States withholding tax or are subject to such tax at
a rate reduced by an applicable tax treaty, Borrowers shall withhold taxes
from such payments at the applicable statutory rate without regard to
ss.4.1(b).
ss.19. NOTICES, ETC. Except as otherwise expressly provided in this Credit
Agreement, all notices and other communications made or required to be
given pursuant to this Credit Agreement or the other Loan Documents shall
be in writing and shall be delivered in hand, mailed by United States
registered or certified first class mail, postage prepaid, sent by
overnight, or sent by telecopy, and confirmed by delivery via courier or
registered or certified first class mail, postage prepaid, addressed as
follows:
(a) if to Borrowers, at 44 Franklin Street, Nashua, New Hampshire
03064, Attention: John L. Patenaude, Chief Financial Officer, and at 250
South Northwest Highway, Park Ridge, Illinois 60068 Attn: ________________,
or at such other address for notice as Borrowers shall last have furnished
in writing to the Person giving the notice;
with a copy to: Mark N. Polebaum, Esquire
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
(b) if to the Agent in its capacity as Agent or as Lender, at 1155
Elm Street, Manchester, New Hampshire 03101, Attention: John A. Hopper,
Senior Vice President, or at such other address for notice as shall last
have furnished in writing to the Person giving the notice;
with a copy to: Camille Holton Di Croce, Esquire
Devine, Millimet & Branch, P.A.
111 Amherst Street
P.O. Box 719
Manchester, New Hampshire 03105
(c) if to any Lender, at such Lender's address as shown on its
signature page, with a copy to any Person designated thereon;
Any such notice or demand shall be deemed to have been duly given or made
and to have become effective (i) if delivered by hand, overnight courier or
facsimile (so long as a confirmation receipt is received) to a responsible
officer of the party to which it is directed, at the time of the receipt
thereof by such officer or the sending of such facsimile and (ii) if sent
by registered or certified first-class mail, postage prepaid, on the third
Business Day following the mailing thereof.
ss.20. GOVERNING LAW; JURISDICTION. This Agreement and the Loan Documents
shall be construed and their provisions interpreted under and in accordance
with the laws of the State of New Hampshire. The Borrowers and the
Subsidiaries, to the extent they may legally do so, hereby consent to the
jurisdiction of the courts of the State of New Hampshire and the United
States District Court for the State of New Hampshire, as well as to the
jurisdiction of all courts from which an appeal may be taken from such
courts for the purpose of any suit, action or other proceeding arising out
of any of their obligations hereunder or with respect to the transactions
contemplated hereby, and expressly waive any and all objections they may
have to venue in any such courts.
ss.21. HEADINGS. The captions in this Credit Agreement are for
convenience of reference only and shall not define or limit the provisions
hereof.
ss.22. COUNTERPARTS. This Credit Agreement and any amendment hereof may be,
executed in several counterparts and by each party on a separate
counterpart, each of which when so executed and delivered shall be an
original, and all of which together shall constitute instrument. In proving
this Credit Agreement it shall not be necessary to produce or account for
more than one such counterpart signed by the party against whom enforcement
is sought. The counterpart signature pages signed by each Lender hereto and
any Material Subsidiary are expressly agreed and acknowledged to be
integrated parts of this Credit Agreement.
ss.23. ENTIRE AGREEMENT, ETC. The Loan Documents and any other documents
executed in connection herewith or therewith express the entire
understanding of the parties with respect to the transactions contemplated
hereby and thereby. Neither this Credit Agreement nor any term hereof may
be changed, waived, discharged or terminated, except as provided in ss.25.
ss.24. WAIVER OF JURY TRIAL. EACH OF THE BORROWERS AND THE SUBSIDIARIES,
THE AGENT AND THE LENDERS HEREBY WAIVE ITS RIGHT TO A JURY TRIAL WITH
RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION
WITH THIS CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS
OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS
AND OBLIGATIONS. EXCEPT AS PROHIBITED BY LAW, AND, EXCEPT IN THE CASE OF
THE GROSS NEGLIGENCE, FRAUD, BAD FAITH OR WILLFUL MISCONDUCT OF THE AGENT
OR ANY LENDER, EACH OF THE BORROWERS AND THE SUBSIDIARIES HEREBY WAIVES ANY
RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THE
PRECEDING SENTENCE ANY SPECIAL EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES
OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. EACH BORROWER
AND EACH SUBSIDIARY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY
OF THE AGENT OR THE LENDERS HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
EACH OF THE AGENT AND THE LENDERS WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVERS AND (B) ACKNOWLEDGES THAT EACH OF THE
LENDERS HAVE BEEN INDUCED TO ENTER INTO THIS CREDIT AGREEMENT AND THE OTHER
LOAN DOCUMENTS TO WHICH IT IS A PARTY BY, AMONG OTHER THINGS, THE WAIVERS
AND CERTIFICATIONS CONTAINED HEREIN.
ss.25. CONSENTS, AMENDMENTS, WAIVERS, ETC. Except as otherwise expressly
provided in this Credit Agreement, any consent or approval required or
permitted by this Credit Agreement to be given by the Lenders or the Agent
may be given, and any term of this Credit Agreement or of any other
instrument related hereto or mentioned herein may be amended, and the
performance or observance by the Borrowers of any terms of this Credit
Agreement or such other instrument or the continuance of any Default or
Event of Default may be waived (either generally or in a particular
instance and either retroactively or prospectively) with, but only with,
the written consent of and the written consent of the Required Lenders.
Notwithstanding the foregoing, no amendment or waiver shall, without the
prior written consent of the Agent and all of the Lenders, (a) extend the
fixed maturity or reduce the principal amount of, or reduce the rate or
extend the time of payment of interest on, or reduce the amount or extend
the time of payment of any principal or interest of, any Note; (b) change
or waive the Total Commitment or Revolving Loan Commitment (other than
reductions in the Revolving Loan Commitments pursuant to ss.2.3) or
Percentage; (c) amend or waive this ss.25 or amend or waive the definition
of Required Lenders; (d) change or waive the amount or payment terms of
fees due hereunder; or (e) amend or waive any of ss.8 or ss.9.1(a), (f) or
(g) or ss.11. No waiver shall extend to or affect any obligation not
expressly waived nor impair any right consequent thereon. No course of
dealing or delay or omission on the part of the Lenders in exercising any
right shall operate as a waiver thereof or otherwise be prejudicial
thereto. No notice to or demand upon the Borrowers shall entitle the
Borrowers to other or further notice or demand in similar other
circumstances.
ss.26. CONFIDENTIALITY. No Lender will make any disclosure of
confidential information furnished to it by the Borrowers or any of
the Subsidiaries unless such information shall have become public, except:
(a) in connection with operations under or the enforcement of or
the protection of a Lender's interest in this Credit Agreement or any other
Loan Document to Persons who have a reasonable need to be furnished such
information;
(b) pursuant to any law, rule or statutory or regulatory
requirement or any court order, subpoena or other legal process;
(c) to any parent or corporate Affiliate of such Lender or to any
Participant, proposed Participant, assignee, proposed assignee, Replacement
Lender or proposed Replacement Lender; provided, however, that any such
Person shall agree to comply with the restrictions set forth in this ss.26
with respect to such information;
(d) to its directors, officers, employees, agents, independent
counsel, auditors and other professional advisors and consultants with an
instruction to such Person to keep such information confidential;
(e) to any other Lender and to the Agent and any successor Agent
or prospective successor Agent; and
(f) with the prior written consent of the Borrowers, to any other
Person.
ss.27. SEVERABILITY. The provisions of this Credit Agreement are severable
and if any one clause or provision hereof shall be held invalid or
unenforceable in whole or in part in any jurisdiction, then such invalidity
or unenforceability shall affect only such clause or provision, or part
thereof, in such jurisdiction, and shall not in any manner affect such
clause or provision in any other jurisdiction, or any other clause or
provision of this Credit Agreement in any jurisdiction.
ss.28. NATURE OF LENDER'S OBLIGATIONS. The Lenders' obligations to make
their respective Loans are several and not joint or joint and several. Any
Lender which is not in default in the performance of its obligations may, in
its discretion, assume the obligations of any other Lender which is in default.
WITNESS our hands and seals as of this 14th day of April, 2000.
WITNESS BORROWER:
NASHUA CORPORATION
/s/ Gregory Shaw By: /s/ John L. Patenaude
______________________________ ______________________________________
John L. Patenaude, Its Duly Authorized
Vice President-Finance and Chief
Financial Officer
RITTENHOUSE PAPER COMPANY
/s/ Gregory Shaw By: /s/ Gerald G. Garbacz
______________________________ ______________________________________
Gerald G. Garbacz, Its Duly Authorized
Chairman of the Board
RITTENHOUSE, L.L.C.
/s/ Gregory Shaw By: /s/ Gerald G. Garbacz
______________________________ ______________________________________
Gerald G. Garbacz, Its Duly Authorized
Chairman of the Executive Committee
AGENT:
FLEET BANK-NH
/s/ Gregory Shaw By: /s/ John A. Hopper
______________________________ ___________________________________
John A. Hopper, Its Duly
Authorized Senior Vice President
STATE OF NEW HAMPSHIRE
COUNTY OF HILLSBOROUGH
The foregoing instrument was acknowledged before me this 14th day
of April, 2000, by John L. Patenaude, the duly authorized Vice
President-Finance and Chief Financial Officer of NASHUA CORPORATION, a
Delaware corporation, on behalf of the same.
/s/ Laura S. Kaplan
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Notary Public
My Commission Expires: January 19, 2005
Notary Seal
STATE OF NEW HAMPSHIRE
COUNTY OF HILLSBOROUGH
The foregoing instrument was acknowledged before me this 14th day
of April, 2000, by Gerald G. Garbacz, the duly authorized Chairman of the
Board of RITTENHOUSE PAPER COMPANY, an Illinois corporation, on behalf of
the same.
/s/ Laura S. Kaplan
-------------------------------------
Notary Public
My Commission Expires: January 19, 2005
Notary Seal
STATE OF NEW HAMPSHIRE
COUNTY OF HILLSBOROUGH
The foregoing instrument was acknowledged before me this 14th day
of April, 2000, by Gerald G. Garbacz, the duly authorized Chairman of the
Executive Committee of RITTENHOUSE, L.L.C., an Illinois limited liability
company, on behalf of the same.
/s/ Laura S. Kaplan
-------------------------------------
Notary Public
My Commission Expires: January 19, 2005
Notary Seal
STATE OF NEW HAMPSHIRE
COUNTY OF HILLSBOROUGH
The foregoing instrument was acknowledged before me this 14th day
of April, 2000, by John A. Hopper, the duly authorized Senior Vice
President, of Fleet Bank-NH, a bank organized under the laws of the State
of New Hampshire, on behalf of the same.
/s/ Laura S. Kaplan
-------------------------------------
Notary Public
My Commission Expires: January 19, 2005
Notary Seal
LENDER COUNTERPART SIGNATURE PAGE TO REVOLVING CREDIT AND TERM AGREEMENT
AMONG NASHUA CORPORATION, RITTENHOUSE PAPER COMPANY
AND RITTENHOUSE, L.L.C. AS BORROWER,
FLEET BANK-NH, AS AGENT
AND THE LENDERS
LENDER:
FLEET BANK-NH
/s/ Gregory Shaw By: /s/ John A. Hopper
______________________________ _________________________________
Witness John A. Hopper, Its Duly
Authorized Senior Vice President
Address for Notices:
Fleet Bank-NH
1155 Elm Street
Manchester, NH 03101
Attn: John A. Hopper, Senior Vice President
Telephone: (603) 647-7936
Telecopier: (603) 647-7617
STATE OF NEW HAMPSHIRE
COUNTY OF HILLSBOROUGH
The foregoing instrument was acknowledged before me this 14th day
of April, 2000, by John A. Hopper, the duly authorized Senior Vice
President, of Fleet Bank-NH, a bank organized under the laws of the State
of New Hampshire, on behalf of the same.
/s/ Laura S. Kaplan
-------------------------------------
Notary Public
My Commission Expires: January 19, 2005
Notary Seal
LENDER COUNTERPART SIGNATURE PAGE TO REVOLVING CREDIT AND TERM LOAN AGREEMENT
AMONG NASHUA CORPORATION, RITTENHOUSE PAPER COMPANY
AND RITTENHOUSE, L.L.C., AS BORROWER,
FLEET BANK-NH, AS AGENT
AND THE LENDERS
LENDER:
LASALLE BANK NATIONAL ASSOCIATION
/s/ Diane Waters By: /s/ Monika Casey
______________________________ _______________________________
Witness Monika Casey, Its Duly
Authorized Vice President
Address for Notices:
LaSalle Bank National Association
135 LaSalle Street
Chicago, IL 60603
Attn: Richard Bott
Telephone: (312) 904-2000
Telecopier: (312) 904-1706
with a copy to:
LaSalle Bank National Association
2355 South Arlington Heights Road
Suite 500
Arlington Heights, IL 60005
Attn: Monika Casey
Telephone: (847) 545-5413
Telecopier: (847) 545-5450
STATE OF NEW HAMPSHIRE
COUNTY OF HILLSBOROUGH
The foregoing instrument was acknowledged before me this 14th day
of April, 2000, by Monika Casey, the duly authorized Vice President, of
LaSalle Bank National Association, a national banking association, on behalf
of the same.
/s/ Diane Waters
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Justice of the Peace/Notary Public
My Commission Expires: 1-14-2003
Notary Seal
COUNTERPART SIGNATURE PAGE TO REVOLVING CREDIT AND TERM LOAN AGREEMENT
AMONG NASHUA CORPORATION, RITTENHOUSE PAPER COMPANY
AND RITTENHOUSE, L.L.C. , AS BORROWER,
FLEET BANK-NH, AS AGENT
AND THE LENDERS
JOINDER OF MATERIAL SUBSIDIARY
The undersigned, being the Person named as a Material Subsidiary
pursuant to ss.7.13 of the Credit Agreement, hereby joins herein and agrees
to be legally and equitably bound by all of the terms, covenants,
warranties, representations, conditions and other provisions thereof, as of
the ____ day of April, 2000.
-----------------------------------
By: _______________________________
______________________, Its Duly
Authorized ____________________
Address for Notices:
____________________________________
____________________________________
STATE OF NEW HAMPSHIRE
COUNTY OF HILLSBOROUGH
The foregoing instrument was acknowledged before me this ____ day
of April, 2000, by _________________, the duly authorized
___________________, of _______________, a _____________________________,
on behalf of the same.
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Justice of the Peace/Notary Public
My Commission Expires:_______________
Notary Seal