Document:

Exhibit 10

Exhibit 10.8

 

 

	

   

  	

  Private Client Group

  
	

   

  	

   

  
	

   

  	

  Merrill

  Lynch Business

  
	

   

  	

  Financial

  Services Inc.

  
	

  222 North LaSalle Street

  
	

  17th Floor

  
	

  Chicago, Illinois 60601

  
	

  (312) 499-3056

  
	

   

  	

  FAX: (312) 499-3256

  
	

   

  	

   

  
	

   

  	

  April 9, 2002

  

 

 

 

StockerYale,

Inc.

32

Hampshire Road

Salem,

NH 03079

 

Re:  WCMA Line of Credit Increase and

Extension

 

Ladies & Gentlemen:

 

This Letter Agreement will serve to confirm

certain agreements of Merrill Lynch Business Financial Services Inc.

("MLBFS") and StockerYale, Inc. ("Customer") with respect

to: (i) that certain WCMA LOAN AND SECURITY AGREEMENT NO. 794–07E49 between

MLBFS and Customer (including any previous amendments and extensions thereof),

and (ii) all other agreements between MLBFS and Customer in connection

therewith (collectively, the "Loan Documents"). Capitalized terms

used herein and not defined herein shall have the meaning set forth in the Loan

Documents.

 

Subject to the terms hereof, effective as of

the "Effective Date" (as defined below) the Loan Documents are hereby

amended as follows:

 

(a) The "Maturity Date" of the WCMA

Line of Credit is hereby extended to August 31, 2002.

 

(b) The "Maximum WCMA Line of

Credit" is hereby increased to $3,500,000.00.

 

(c) The "Line Fee" for the period

ending August 31, 2002, shall be $10,416.67. Customer hereby authorizes and

directs MLBFS to charge said fee to WCMA Account No. 794–07E49 on or at

any time after the Effective Date. Subject to any further change in the WCMA

Line of Credit and/or other amendment of terms, if the WCMA Line of Credit is

renewed beyond the current Maturity Date, the annual Line Fee during the

renewal period shall be $35,000.00.

 

Except as expressly amended hereby, the Loan

Documents shall continue in full force and effect upon all of their terms and

conditions.

 

Customer acknowledges, warrants and agrees,

as a primary inducement to MLBFS to enter into this Agreement, that: (a) no

Default or Event of Default has occurred and is continuing under the Loan

Documents; (b) each of the warranties of Customer in the Loan Documents are

true and correct as of the date hereof and shall be deemed remade as of the

date hereof; (c) Customer does not have any claim against MLBFS or any of its

affiliates arising out of or in connection with the Loan Documents or any other

matter whatsoever; and (d) Customer does not have any defense to payment of any

amounts owing, or any right of counterclaim for any reason under, the Loan

Documents.

 

 

 

The obligations of MLBFS under this Letter Agreement are

subject to its receipt (where applicable) and satisfaction with the following:

 

Annual 2001 Fiscal Year End 10–K

statement.

 

Provided that no Event of Default, or event

which with the giving of notice, passage of time, or both, would constitute an

Event of Default, shall then have occurred and be continuing under the terms of

the Loan Documents, and the condition specified above shall have been met to

our satisfaction, the amendments and agreements in this Letter Agreement will

become effective on the date (the "Effective Date") upon which: (a)

Customer shall have executed and returned the duplicate copy of this Letter

Agreement enclosed herewith; and (b) an officer of MLBFS shall have reviewed

and approved this Letter Agreement as being consistent in all respects with the

original internal authorization hereof.

 

Notwithstanding the foregoing, if Customer

does not execute and return the duplicate copy of this Letter Agreement within

14 days from the date hereof, or if for any other reason (other than the sole

fault of MLBFS) the Effective Date shall not occur within said 14-day period,

then all of said amendments and agreements will, at the sole option of MLBFS,

be void.

 

Very

truly yours,

 

Merrill Lynch Business Financial Services Inc.

 

 

	

  By:

  	

  /s/ Jessica Schultz

  
	

   

  	

  Jessica Schultz

  
	

   

  	

  Senior Relationship

  Manager

  

 

Accepted:

 

STOCKERYALE, INC.

 

	

  By:

  	

  /s/ Francis J. O'Brien

  
	

  Printed Name:

  	

  Francis J. O'Brien

  
	

  Title:

  	

  Chief Financial Officer

  and Treasurer

  
				

 

 

2

 

	

   

  	

  Private Client Group

  
	

   

  
	

  Merrill

  Lynch Business

  
	

  Financial

  Services Inc.

  
	

  222 North LaSalle Street

  
	

  17th Floor

  
	

  Chicago, Illinois 60601

  
	

  (312) 269-1348

  
	

  FAX: (312) 201-0210

  
	

   

  
	

  May 16, 2001

  

 

 

 

StockerYale, Inc. f/k/a Stocker & Yale,

Inc.

32 Hampshire Road

Salem, NH 03079

 

Re:  Amendment to Loan

Documents

 

Ladies & Gentlemen:

 

This Letter Agreement will serve to confirm

certain agreements of Merrill Lynch Business Financial Services Inc.

("MLBFS") and StockerYale, Inc. f/k/a Stocker & Yale, Inc.

("Customer") with respect to: (i) that certain WCMA REDUCING REVOLVER LOAN AND SECURITY AGREEMENT NO.

794-07E50 between MLBFS and Customer (including any previous

amendments and extensions thereof), and (ii) all other agreements between MLBFS

and Customer in connection therewith (collectively, the "Loan Documents").  Capitalized terms used herein and not

defined herein shall have the meaning set forth in the Loan Documents.

 

Subject to the terms hereof, effective as of

the "Effective Date" (as defined below), the Loan Documents are

hereby amended as follows:

 

(a) 

The term "Interest Rate" shall mean a variable per annum rate

of interest equal to the sum of 2.50% and the One-Month LIBOR.  "One-Month LIBOR" shall mean, as

of the date of any determination, the interest rate then most recently

published in the "Money Rates" section of The Wall Street Journal as the one-month London Interbank

Offered Rate.  The Interest Rate will

change as of the date of publication in The

Wall Street Journal of a One-Month LIBOR that is different from that

published on the preceding Business Day. 

In the event that The Wall Street

Journal shall, for any reason, fail or cease to publish the

One-Month LIBOR, MLBFS will choose a reasonably comparable index or source to

use as the basis for the Interest Rate.

 

Except as expressly amended hereby, the Loan

Documents shall continue in full force and effect upon all of their terms and

conditions.

 

Customer acknowledges, warrants and agrees,

as a primary inducement to MLBFS to enter into this Agreement, that: (a) no

Default or Event of Default has occurred and is continuing under the Loan

Documents; (b) each of the warranties of Customer in the Loan Documents are

true and correct as of the date hereof and shall be deemed remade as of the

date hereof; (c) Customer does not have any claim against MLBFS or any of its

affiliates arising out of or in connection with the Loan Documents or any other

matter whatsoever; and (d) Customer does not have any defense to payment of any

amounts owing, or any right of counterclaim for any reason under, the Loan

Documents.

 

 

 

3

 

 

Provided that no Event of Default, or event

which with the giving of notice, passage of time, or both, would constitute an

Event of Default, shall then have occurred and be continuing under the terms of

the Loan Documents, the amendments and agreements in this Letter Agreement will

become effective on the date (the "Effective Date") upon which: (a)

Customer shall have executed and returned the duplicate copy of this Letter Agreement

and the other document enclosed herewith; and (b) an officer of MLBFS shall

have reviewed and approved this Letter Agreement and said other document as

being consistent in all respects with the original internal authorization

hereof.

 

Notwithstanding the foregoing, if Customer

does not execute and return the duplicate copy of this Letter Agreement and

said other document within 14 days from the date hereof, or if for any other

reason (other than the sole fault of the MLBFS) the Effective Date shall not

occur within said 14-day period, then all of said amendments and agreements

will, at the sole option of MLBFS, be void.

 

Very truly yours,

 

Merrill

Lynch Business Financial Services, Inc.

 

 

	

  By:

  	

  /s/ Stephanie Sparks

  
	

   

  	

  Stephanie Sparks

  
	

   

  	

  Senior Documentation

  Manager

  

 

Accepted:

 

StockerYale,

Inc. f/k/a Stocker & Yale, Inc.

 

 

	

  By:

  	

  /s/ Gary B. Godin

  
	

   

  	

   

  
	

  Printed Name:

  	

  Gary B. Godin

  
	

   

  	

   

  
	

  Title:

  	

  EVP & Chief Financial

  Officer

  
				

 

 

 

4

 

	

  

  	

  WCMA® REDUCING REVOLVER- LOAN AND SECURITY AGREEMENT

  

 

WCMA REDUCING REVOLVERSM LOAN AND SECURITY

AGREEMENT NO. 794–07E5O (“Loan Agreement’) dated as

of May 3, 2001, between STOCKERYALE, INC.

F/K/A

STOCKER & YALE, INC., a corporation organized and existing under

the laws of the State of Massachusetts having its principal office at 32

Hampshire Road, Salem, NH 03079 ("Customer"), and MERRILL

LYNCH BUSINESS FINANCIAL SERVICES INC., a corporation organized and

existing under the laws of the State of Delaware having its principal office at

222 North LaSalle Street, Chicago, IL 60601 (“MLBFS”).

 

In accordance with that certain WORKING

CAPITAL MANAGEMENT®

ACCOUNT AGREEMENT NO. 794–07E50 (“WCMA Agreement”) between

Customer and MLBFS’ affiliate, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

(“MLPF&S”), Customer has subscribed to the WCMA Program

described in the WCMA Agreement. The WCMA Agreement is by this reference

incorporated as a part hereof. In conjunction therewith, Customer has requested

that MLBFS make a WCMA Reducing Revolver Loan (a "Reducing Revolver")

to Customer in the amount and upon the terms hereafter specified, and, subject

to the terms and conditions hereafter set forth, MLBFS has agreed to provide a

Reducing Revolver for Customer.

 

A Reducing Revolver is a term credit

facility, similar to a conventional term loan, but funded out of a line of

credit under the WCMA Program ("WCMA Line of Credit") in the amount

of the initial loan. With a Reducing Revolver: (i) interest will generally be

charged each month to Customer's WCMA account, and, so long as the WCMA Line of

Credit is in effect, paid with an additional loan under the WCMA Line of Credit

(i.e., added to the loan balance), (ii) after an initial interest only period,

the maximum WCMA Line of Credit will be reduced each month by the amount that

would be payable on account of principal if the Reducing Revolver were a

conventional term loan amortized over the same term and in the same manner as

the Reducing Revolver, and (iii) Customer will be required to make sufficient

payments on account of the Reducing Revolver to assure that the outstanding

balance of the Reducing Revolver does not at any time exceed the Maximum WCMA

Line of Credit, as reduced each month.

 

Absent a prepayment by Customer, this

structure results in required monthly payments for the Reducing Revolver that

are substantially the same as the required monthly payments for a conventional

term loan with the same term and amortization. However, unlike most

conventional term loans, because it is funded out of a line of credit, the

Reducing Revolver permits both a prepayment in whole or in part at any time,

and, subject to certain conditions, the re–borrowing on a revolving basis of

any such prepaid amounts up to the Maximum WCMA Line of Credit, as reduced each

month. The structure therefore will enable Customer at its option to use any

excess or temporary cash balances that it may have from time to time to prepay

the Reducing Revolver and thereby effectively reduce interest expense on the

Reducing Revolver without impairing its working capital,

 

Accordingly,

and in consideration of the premises and of the mutual covenants of the parties

hereto. Customer and MLBFS hereby agree as follows:

 

Article I. DEFINITIONS

 

1.1  Specific Terms.  In addition to terms defined elsewhere in this Loan Agreement,

when used herein the following terms shall have the following meanings:

 

(a)

"Account Debtor" shall mean any party who is or may become obligated

with respect to an Account or Chattel Paper.

 

(b) "Additional Agreements" shall

mean all agreements, instruments, documents and opinions other than this Loan

Agreement, whether with or from Customer or any other party, which are

contemplated hereby or otherwise reasonably required by MLBFS in connection

herewith, or which evidence the creation, guaranty or collateralization of any

of the Obligations or the granting or perfection of liens or security interests

upon the Collateral or any other collateral for the Obligations.

 

(c) "Bankruptcy Event" shall mean

any of the following: (i) a proceeding under any bankruptcy, reorganization,

arrangement, insolvency, readjustment of debt or receivership law or statute

shall be filed or consented to by Customer; or (ii) any such proceeding shall

be filed against Customer and shall not be dismissed or withdrawn within sixty

(60) days after filing; or (iii) Customer shall make a general assignment for

the benefit of creditors; or (iv) Customer shall generally fail to pay or admit

in writing its inability to pay its debts as they become due; or (v) Customer

shall be adjudicated a bankrupt or insolvent.

 

(d) "Business Day" shall mean any

day other than a Saturday, Sunday, federal holiday or other day on which the

New York Stock Exchange is regularly closed.

 

(e) "Closing Date" shall mean the

date upon which all conditions precedent to MLBFS’ obligation to make the Loan

shall have been met to the satisfaction of MLBFS.

 

(f) "Collateral" shall mean all

Accounts, Chattel Paper, Contract Rights, Inventory, Equipment, Fixtures,

General Intangibles, Deposit Accounts, Documents, Instruments, Investment

Property and Financial Assets of Customer, howsoever arising, whether now owned

or existing or hereafter acquired or arising, and wherever located; together

with all parts thereof (including spare parts), all accessories and accessions

thereto, all books and records (including computer records) directly related

thereto, all proceeds thereof (including, without limitation, proceeds in the

form of Accounts and insurance proceeds), and the additional collateral

described in Section 4.6 (b) hereof.

 

(g) "Commitment Expiration Date"

shall mean June 2, 2001.

 

(h) "Commitment Fee" shall mean a

fee of $43,750.00 due to MLBFS in connection with this Loan Agreement.

 

 

5

 

(i) "Default" shall mean either an

"Event of Default" as defined in Section 4.5 hereof, or an event

which with the giving of notice, passage of time, or both, would constitute

such an Event of Default.

 

(j) "General Funding Conditions"

shall mean each of the following conditions precedent to the obligation of

MLBFS to make the Loan or any Subsequent WCMA Loan hereunder: (i) Customer

shall have validly subscribed to and continued to maintain the WCMA Account

with MLPF&S, and the WCMA Account shall then be reflected as an active "Commercial"

WCMA Account (i.e., one with line of credit capabilities) on MLPF&S’ WCMA

computer system; (ii) no Default shall have occurred and be continuing or would

result from the making of the Loan or such Subsequent WCMA Loan by MLBFS; (iii)

there shall not have occurred and be continuing any material adverse change in

the business or financial condition of Customer; (iv) all representations and

warranties of Customer herein or in any Additional Agreements shall then be

true and correct in all material respects; (v) MLBFS shall have received this

Loan Agreement and all Additional Agreements, duly executed and filed or

recorded where applicable, all of which shall be in form and substance

reasonably satisfactory to MLBFS; (vi) the Commitment Fee shall have been paid

in full; (vii) MLBFS shall have received, as and to the extent applicable,

copies of invoices, bills of sale, loan payoff letters and/or other evidence

reasonably satisfactory to it that the proceeds of the Loan will satisfy the

Loan Purpose; (viii) MLBFS shall have received evidence reasonably satisfactory

to it as to the ownership of the Collateral and the perfection and priority of

MLBFS' liens and security interests thereon, as well as the ownership of and

the perfection and priority of MLBFS’ liens and security interests on any other

collateral for the Obligations furnished pursuant to any of the Additional

Agreements; (ix) MLBFS shall have received evidence reasonably satisfactory to

it of the insurance required hereby or by any of the Additional Agreements; and

(x) any additional conditions specified in the "WCMA Reducing Revolver

Loan Approval" letter executed by MLBFS with respect to the transactions

contemplated hereby shall have been met to the reasonable satisfaction of MLBFS.

 

(k)

"Interest Due Date" shall mean the last Business Day of each calendar

month during the term hereof (or, if Customer makes special arrangements with

MLPF&S, on the last Friday of each calendar month during the term hereof).

 

(1) "Interest Rate" shall mean a variable per annum rate

equal to the sum of (i) 2.50% per annum, and (ii) the interest rate from time

to time published in the "Money Rates" section of The Wall Street Journal as the

"LIBOR" rate for 30-day high-grade unsecured notes sold through

dealers by major corporations (the "Rate"). The Interest Rate will

change as of the date of publication in The

Wall Street Journal of a Rate that is different from that published

on the preceding Business Day. In the event that The Wall Street Journal shall, for any reason, fail or cease

to publish the Rate, MLBFS will choose a reasonably comparable index or source

to use as the basis for the Interest Rate.

 

(m) "Loan" shall mean the specific

Reducing Revolver by MLBFS to Customer pursuant to this Agreement for the Loan

Purpose and in the Loan Amount.

 

(n) "Loan Amount" shall mean an

amount equal to the lesser of: (i) 100% of the amount required by Customer to

satisfy or fulfill the Loan Purpose, (ii) the aggregate amount which Customer

shall request be advanced by MLBFS on account of the Loan Purpose on the

Closing Date, or (iii) $3,500,000.00.

 

(o) "Loan Purpose" shall mean the

purpose for which the proceeds of the Loan will be used; to wit: to refinance

the existing term note at Wells Fargo Bank and to purchase additional

equipment.

 

(p) "Location of Tangible

Collateral" shall mean the address of Customer set forth at the beginning

of this Loan Agreement, together with any other address or addresses set forth

on an exhibit hereto as being a Location of Tangible Collateral.

 

(q) "Maximum WCMA Line of Credit"

shall mean the maximum aggregate line of credit which MLBFS will extend to

Customer subject to the terms and conditions hereof, as the same shall be

reduced each month in accordance with the terms hereof. On the Closing Date,

the Maximum WCMA Line of Credit will equal the Loan Amount.

 

(r) "Obligations" shall mean all

liabilities, indebtedness and other obligations of Customer to MLBFS, howsoever

created, arising or evidenced, whether now existing or hereafter arising,

whether direct or indirect, absolute or contingent, due or to become due,

primary or secondary or joint or several, and, without limiting the foregoing,

shall include interest accruing after the filing of any petition in bankruptcy,

and all present and future liabilities, indebtedness and obligations of

Customer under this Loan Agreement.

 

(s) "Permitted Liens" shall mean

with respect to the Collateral: (i) liens for current taxes not delinquent,

other non-consensual liens arising in the ordinary course of business for sums

not due, and, if MLBFS’ rights to and interest in the Collateral are not

materially and adversely affected thereby, any such liens for taxes or other

non-consensual liens arising in the ordinary course of business being contested

in good faith by appropriate proceedings; (ii) liens in favor of MLBFS; (iii)

liens which will be discharged with the proceeds of the initial WCMA Loan; and

(iv) any other liens expressly permitted in writing by MLBFS.

 

(t) "Subsequent WCMA Loan" shall

mean each WCMA Loan other than the Loan, including, without limitation, each

WCMA Loan to pay accrued interest.

 

(u) "Termination Date" shall mean

the first to occur of: (i) the last Business Day of the sixty-third (63rd) full

calendar month following the Closing Date, or (ii) if earlier, the date of

termination of the WCMA Line of Credit pursuant to the terms hereof.

 

(v)

"WCMA Account" shall mean and refer to the Working Capital Management

Account of Customer with MLPF&S identified as WCMA Account No. 794–07E50

and any successor Working Capital Management Account of Customer with

MLPF&S.

 

(w) "WCMA Loan" shall mean each

advance made by MLBFS pursuant to the WCMA Line of Credit, including the Loan

and each Subsequent WCMA Loan.

 

(x) "WCMA Loan Balance" shall mean an

amount equal to the aggregate unpaid principal balance of all WCMA Loans.

 

1.2 Other Terms.  Except as otherwise

defined herein: (i) all terms used in this Loan Agreement which are defined in

the Uniform Commercial Code of Illinois (“UCC”) shall have the meanings set

forth in the UCC, and (ii) capitalized terms used herein which are defined in

the WCMA Agreement (including,

 

 

6

 

without limitation, "Money

Accounts", "Minimum Money Accounts Balance", "WCMA Directed

Reserve Program" and "WCMA Program") shall have the meanings set

forth in the WCMA Agreement.

 

Article II. THE LOAN

 

2.1 Commitment.

  Subject to the terms and

conditions hereof, MLBFS hereby agrees to make the Loan to Customer, and

Customer hereby agrees to borrow the Loan from MLBFS. Except as otherwise

provided in Section 3.1 hereof, the entire proceeds of the Loan will be

disbursed by MLBFS out of the WCMA Line of Credit either directly to the

applicable third party or parties on account of the Loan Purpose or to

reimburse Customer for amounts directly expended by it for the Loan Purpose;

all as directed by Customer in a Closing Certificate to be executed and

delivered to MLBFS prior to the date of funding.

 

2.2 Conditions

of MLBFS’ Obligation.  The

Closing Date and MLBFS’ obligations to activate the WCMA Line of Credit, as

hereafter set forth, and make the Loan on the Closing Date are subject to the

prior fulfillment of each of the following conditions: (a) not less than two

Business Days prior to any requested funding date, MLBFS shall have received a

Closing Certificate, duly executed by Customer, setting forth, among other

things, the amount of the Loan and the method of payment and payee(s) of the

proceeds thereof; (b) after giving effect to the Loan, the WCMA Loan Balance

will not exceed either the Maximum WCMA Line of Credit or the Loan Amount; (c)

the Commitment Expiration Date shall not then have occurred; and (d) each of

the General Funding Conditions shall then have been met or satisfied to the

reasonable satisfaction of MLBFS.

 

2.3 Commitment

Fee.  In consideration of the

agreement by MLBFS to extend the Loan and any Subsequent WCMA Loans to Customer

in accordance with and subject to the terms hereof, Customer has paid or shall,

on or before the Closing Date pay, the Commitment Fee to MLBFS. Customer

acknowledges and agrees that the Commitment Fee has been fully earned by MLBFS,

and that it will not under any circumstances be refundable.

 

2.4 Use of

Loan Proceeds.  Unless

otherwise agreed by MLBFS in writing, the proceeds of the Loan shall be used

solely for the Loan Purpose. The Proceeds of each Subsequent WCMA Loan

initiated by Customer shall be used by Customer solely for working capital in

the ordinary course of its business, or, with the prior written consent of

MLBFS, for other lawful business purposes of Customer not prohibited

hereby.  Customer agrees that under no circumstances will the proceeds of the Loan

or any Subsequent WCMA Loan be used: (i) for personal, family or household purposes

of any person whatsoever, or (ii) to purchase, carry or trade in securities, or

repay debt incurred to purchase, carry or trade in securities, whether in or in

connection with the WCMA Account, another account of Customer with MLPF&S

or an account of Customer at any other broker or dealer in securities, or (iii)

unless otherwise consented to in writing by MLBFS, to pay any amount to Merrill

Lynch and Co., Inc. or any of its subsidiaries, other than Merrill Lynch Bank

USA, Merrill Lynch Bank & Trust Co. or any subsidiary of either of them

(including MLBFS and Merrill Lynch Credit Corporation).

 

Article III. THE WCMA LINE OF CREDIT

 

3.1 Activation

of the WCMA Line of Credit. 

Subject to the terms and conditions hereof, on the Closing Date MLBFS

will activate a WCMA Line of Credit for Customer in the Loan Amount.  The Loan will be funded out of the WCMA Line

of Credit immediately after such activation (or, if and to the extent otherwise

expressly contemplated in the definition of Loan Purpose or otherwise directed

in the Closing Certificate and hereafter expressly agreed by MLBFS, all or part

of the Loan may be made available as a WCMA Line of Credit and funded by

Customer.)

 

3.2 Subsequent

WCMA Loans.  Subject to the

terms and conditions hereof, during the period from and after the Closing Date

to the Termination Date: (a) Customer may repay the WCMA Loan Balance in whole

or in part at any time without premium or penalty (except, as hereafter set

forth, upon a refinancing by another lender), and request a re-borrowing of

amounts repaid on a revolving basis, and (b) in addition to Subsequent WCMA

Loans made automatically to pay accrued interest, as hereafter provided, MLBFS

will make such Subsequent WCMA Loans as Customer may from time to time request

or be deemed to have requested in accordance with the terms hereof. Customer

may request Subsequent WCMA Loans by use of WCMA Checks, FTS, Visa® charges,

wire transfers, or such other means of access to the WCMA Line of Credit as may

be permitted by MLBFS from time to time; it being understood that so long as

the WCMA Line of Credit shall be in effect, any charge or debit to the WCMA

Account which but for the WCMA Line of Credit would under the terms of the WCMA

Agreement result in an overdraft, shall be deemed a request by Customer for a

Subsequent WCMA Loan.

 

3.3 Conditions of Subsequent WCMA Loans.  Notwithstanding the foregoing,

MLBFS shall not be obligated to make any Subsequent WCMA Loan, and may without

notice refuse to honor any such request by Customer, if at the time of receipt

by MLBFS of Customer's request: (a) the making of such Subsequent WCMA Loan

would cause the Maximum WCMA Line of Credit, as reduced pursuant to the

provisions of Section 3.6 hereof, to be exceeded; or (b) the Termination Date shall

have occurred; or (c) an event shall have occurred and be continuing which

shall have caused any of the General Funding Conditions to not then be met or

satisfied to the reasonable satisfaction of MLBFS. The making by MLBFS of any

Subsequent WCMA Loan (including, without limitation, the making of a Subsequent

WCMA Loan to pay accrued interest or late charges, as hereafter provided) at a

time when any one or more of said conditions shall not have been met shall not

in any event be construed as a waiver of said condition or conditions or of any

Default, and shall not prevent MLBFS at any time thereafter while any condition

shall not have been met from refusing to honor any request by Customer for a

Subsequent WCMA Loan.

 

3.4 WCMA Note.  Customer hereby promises to

pay to the order of MLBFS, at the times and in the manner set forth in this

Loan Agreement, or in such other manner and at such place as MLBFS may

hereafter designate in writing: (a) the WCMA Loan Balance; (b) interest at the

Interest Rate on the outstanding WCMA Loan Balance (computed for the actual

number of days elapsed on the basis of a year consisting of 360 days), from and

including the date on which the Loan is made until the date of payment of all

WCMA Loans in full; and (c) on demand, all other sums payable pursuant to this

Loan Agreement, including, but not limited to, any late charges. Except as

otherwise expressly set forth herein, Customer hereby waives presentment,

demand for payment, protest and notice of protest, notice of dishonor, notice

of acceleration, notice of intent to accelerate and all other notices and

formalities in connection with this WCMA Note and this Loan Agreement.

 

 

7

 

3.5 Interest.  (a) An amount equal to accrued interest on

the WCMA Loan Balance shall be payable by Customer monthly on each Interest Due

Date, commencing with the Interest Due Date occurring in the calendar month in

which the Closing Date shall occur. Unless otherwise hereafter directed in

writing by MLBFS on or after the Termination Date, such interest will be

automatically charged to the WCMA Account on the applicable Interest Due Date,

and, to the extent not paid with free credit balances or the proceeds of sales

of any Money Accounts then in the WCMA Account, as hereafter provided, such

interest will be paid by a Subsequent WCMA Loan and added to the WCMA Loan

Balance. All Interest shall be computed for the actual number of days elapsed

on the basis of a year consisting of 360 days.

 

(b) Notwithstanding any provision to the

contrary in this Agreement or any of the Additional Agreements, no provision of

this Agreement or any of the Additional Agreements shall require the payment or

permit the collection of any amount in excess of the maximum amount of interest

permitted to be charged by law ("Excess Interest"). If any Excess

Interest is provided for, or is adjudicated as being provided for, in this

Agreement or any of the Additional Agreements, then: (i) Customer shall not be

obligated to pay any Excess Interest; and (ii) any Excess Interest that MLBFS

may have received hereunder or under any of the Additional Agreements shall, at

the option of MLBFS, be either applied as a credit against the then WCMA Loan

Balance, or refunded to the payer thereof.

 

3.6 Periodic

Reduction of Maximum WCMA Line of Credit.  Commencing on the last Business Day of the fourth (4th) full

calendar month following the Closing Date, and continuing on the last Business

Day of each calendar month thereafter to and including the last Business Day of

the sixty-second (62nd) such calendar month, the Maximum WCMA Line of Credit

shall be reduced by an amount equal to one-eighty-fourth (1/84th) of the Loan

Amount per month. Unless the WCMA Line of Credit shall have been earlier

terminated pursuant to the terms hereof, on the last Business Day of the

sixty-third (63rd) such calendar month, the WCMA Line of Credit shall, without

further action of either of the parties hereto, be terminated, Customer shall

pay to MLBFS the entire WCMA Loan Balance, if any, and all other Obligations,

and the WCMA Account, at the option of Customer, will either be converted to a

WCMA Cash Account (subject to any requirements of MLPF&S) or terminated. No

failure or delay on the part of MLBFS in entering into the WCMA computer system

any scheduled reduction in the Maximum WCMA Line of Credit pursuant to this

Section shall have the effect of preventing or delaying such reduction.

 

3.7 Mandatory

Payments.  CUSTOMER

AGREES THAT IT WILL, WITHOUT DEMAND, INVOICING OR THE REQUEST OF MLBFS, FROM

TIME TO TIME MAKE SUFFICIENT PAYMENTS ON ACCOUNT OF THE WCMA LOAN BALANCE TO

ASSURE THAT THE WCMA LOAN BALANCE WILL NOT AT ANY TIME EXCEED THE MAXIMUM WCMA

LIKE OF CREDIT, AS REDUCED EACH MONTH PURSUANT TO SECTION 3.6 HEREOF.

 

3.8 Method of Making Payments.  All payments required or

permitted to be made pursuant to this Loan Agreement shall be made in lawful

money of the United States. Unless otherwise hereafter directed by MLBFS, such

payments may be made by the delivery of checks (other than WCMA Checks), or by

means of FTS or wire transfer of funds (other than funds from the WCMA Line of

Credit) to MLPF&S for credit to the WCMA Account. Payments to MLBFS from

funds in the WCMA Account shall be deemed to be made by Customer upon the same

basis and schedule as funds are made available for investment in the Money

Accounts in accordance with the terms of the WCMA Agreement. The acceptance by

or on behalf of MLBFS of a check or other payment for a lesser amount than

shall be due from Customer, regardless of any endorsement or statement thereon

or transmitted therewith, shall not be deemed an accord and satisfaction or

anything other than a payment on account, and MLBFS or anyone acting on behalf

of MLBFS may accept such check or other payment without prejudice to the rights

of MLBFS to recover the balance actually due or to pursue any other remedy

under this Loan Agreement or applicable law for such balance. All checks

accepted by or on behalf of MLBFS in connection with this Loan Agreement are

subject to final collection.

 

3.9 Irrevocable Instructions to MLPF&S.  In order to minimize the WCMA

Loan Balance, Customer hereby irrevocably authorizes and directs MLPF&S,

effective on the Closing Date and continuing thereafter so long as this Agreement

shall be in effect: (a) to immediately and prior to application for any other

purpose pay to MLBFS to the extent of any WCMA Loan Balance or other amounts

payable by Customer hereunder all available free credit balances from time to

time in the WCMA Account; and (b) if such available free credit balances are

insufficient to pay the WCMA Loan Balance and such other amounts, and there are

in the WCMA Account at any time any investments in Money Accounts (other than

any investments constituting any Minimum Money Accounts Balance under the WCMA

Directed Reserve Program), to immediately liquidate such investments and pay to

MLBFS to the extent of any WCMA Loan Balance and such other amounts the

available proceeds from the liquidation of any such Money Accounts.

 

3.10 Late

Charge.  Any payment or

deposit required to be made by Customer pursuant to this Loan Agreement or any

of the Additional Agreements not paid or made within ten (10) days of the

applicable due date shall be subject to a late charge in an amount equal to the

lesser of: (a) 5% of the overdue amount, or (b) the maximum amount permitted by

applicable law. Such late charge shall be payable on demand, or, without demand, may in the sole

discretion of MLBFS be paid by a Subsequent WCMA Loan and added to the WCMA Loan Balance in the

same manner as provided herein for accrued interest with respect to the WCMA

Line of Credit.

 

3.11 Prepayment.  Customer may prepay the Loan and any

Subsequent WCMA Loan at any time in whole or in part without premium or penalty;

provided, however, that any refinancing of the WCMA Loan Balance by another

financial institution shall: (a) if such refinancing shall occur prior to the

first anniversary of the Closing Date, be accompanied by a premium in an amount

equal to 3% of the amount prepaid by such refinancing; (b) if such refinancing

shall occur thereafter, but prior to the second anniversary of the Closing

Date, be accompanied by a premium in an amount equal to 2% of the amount

prepaid by such refinancing; and (c) if such refinancing shall occur on or at

any time after the second anniversary of the Closing Date, be accompanied by a

premium in an amount equal to 1% of the amount prepaid by such refinancing.

 

3.12 Option

of Customer to Terminate. 

Customer will have the option to terminate the WCMA Line of Credit at

any time upon written notice to MLBFS. Concurrently with any such termination,

Customer shall pay to MLBFS the entire WCMA Loan Balance and all other

Obligations.

 

3.13 Limitation

of Liability.  MLBFS shall

not be responsible, and shall have no liability to Customer or any other party,

for any delay or failure of MLBFS to honor any request of Customer for a WCMA

Loan or any other act or omission of MLBFS, MLPF&S or any of their

affiliates due to or resulting from any system failure, error or delay in

posting or other clerical error, loss of power, fire, Act of God or other cause

beyond the reasonable control of MLBFS, MLPF&S or any of their affiliates

unless directly arising out of the willful wrongful act or active gross

negligence of MLBFS. In no event shall MLBFS be liable

 

 

8

 

to Customer or any other party for any

incidental or consequential damages arising from any act or omission by MLBFS,

MLPF&S or any of their affiliates in connection with the WCMA Line of

Credit or this Loan Agreement.

 

3.14 Statements. MLPF&S Y411 include in each

monthly statement it issues under the WCMA Program information with respect to

WCMA Loans and the WCMA Loan Balance. Any questions that Customer may have with

respect to such information or the Loan should be directed to MLBFS; and any

questions with respect to any other matter in such statements or about or

affecting the WCMA Program should be directed to MLPF&S.

 

Article IV.

GENERAL PROVISIONS

 

4.1 Representations and Warranties.

 

Customer represents and warrants to MLBFS

that:

 

(a) Organization and Existence.  Customer is a corporation, duly organized and validly

existing in good standing under the laws of the State of Massachusetts and is

qualified to do business and in good standing in each other state where the

nature of its business or the property owned by it make such qualification

necessary.

 

(b) Execution, Delivery and Performance.  The execution, delivery and

performance by Customer of this Loan Agreement and such of the Additional

Agreements to which it is a party: (i) have been duly authorized by all

requisite action, (ii) do not and will not violate or conflict with any law or

other governmental requirement, or any of the agreements, instruments or

documents which formed or govern Customer, and (iii) do not and will not breach

or violate any of the provisions of, and will not result in a default by

Customer under, any other agreement, instrument or document to which it is a party

or by which it or its properties are bound.

 

(c) Notices and Approvals.  Except as may have been given or obtained, no notice

to or consent or approval of any governmental body or authority or other third

party whatsoever (including, without limitation, any other creditor) is

required in connection with the execution, delivery or performance by Customer

of such of this Loan Agreement and the Additional Agreements to which it is a

party.

 

(d) Enforceability. 

This Loan Agreement and such of the Additional Agreements to

which Customer is a party are the legal, valid and binding obligations of

Customer, enforceable against it in accordance with their respective terms,

except as enforceability may be limited by bankruptcy and other similar laws

affecting the rights of creditors generally or by general principles of equity.

 

(e) Collateral.  Except

for any Permitted Liens: (i) Customer has good and marketable title to the

Collateral, (ii) none of the Collateral is subject to any lien, encumbrance or

security interest, and (iii) upon the filing of all Uniform Commercial Code

financing statements executed by Customer with respect to the Collateral in the

appropriate jurisdiction(s) and/or the completion of any other action required

by applicable law to perfect its liens and security interests, MLBFS will have

valid and perfected first liens and security interests upon all of the

Collateral.

 

(f) Financial Statements. 

Except as expressly set forth in Customer's financial

statements, all financial statements of Customer furnished to MLBFS have been

prepared in conformity with generally accepted accounting principles,

consistently applied, are true and correct in all material respects, and fairly

present the financial condition of it as at such dates and the results of its

operations for the periods then ended (subject, in the case of interim

unaudited financial statements, to normal year-end adjustments); and since the

most recent date covered by such financial statements, there has been no

material adverse change in any such financial condition or operation.

 

(g) Litigation.  No

litigation, arbitration, administrative or governmental proceedings are pending

or, to the knowledge of Customer, threatened against Customer, which would, if

adversely determined, materially and adversely affect the liens and security

interests of MLBFS hereunder or under any of the Additional Agreements, the

financial condition of Customer or the continued operations of Customer.

 

(h) Tax Returns.  All

federal, state and local tax returns, reports and statements required to be

filed by Customer have been filed with the appropriate governmental agencies

and all taxes due and payable by Customer have been timely paid (except to the

extent that any such failure to file or pay will not materially and adversely

affect either the liens and security interests of MLBFS hereunder or under any

of the Additional Agreements, the financial condition of Customer, or the

continued operations of Customer).

 

(i) Collateral Location. 

All of the tangible Collateral is located at a Location of

Tangible Collateral.

 

(j) No Outside Broker. 

Except for employees of MLBFS, MLPF&S or one of their

affiliates, Customer has not in connection with the transactions contemplated

hereby directly or indirectly engaged or dealt with, and was not introduced or

referred to MLBFS by, any broker or other loan arranger.

 

Each of the foregoing representations and

warranties: (i) has been and will be relied upon as an inducement to MLBFS to

make the Loan and each Subsequent WCMA Loan, and (ii) is continuing and shall

be deemed remade by Customer on the Closing Date, and concurrently with each

request by Customer for a Subsequent WCMA Loan.

 

 

9

 

4.2 Financial and Other Information.

 

(a) Customer shall furnish or cause to be

furnished to MLBFS during the term of this Loan Agreement all of the following:

 

(i) Annual Financial Statements.  Within 120 days after the close of each fiscal year of

Customer, a copy of the annual

audited financial statements of Customer, including in reasonable detail, a

balance sheet and statement of retained earnings as at the close of such fiscal

year and statements of profit and loss and cash flow for such fiscal year;

 

(ii) Interim Financial Statements.  Within 45 days after the close of

each fiscal quarter of  Customer,

a copy of the interim financial statements of Customer for such fiscal quarter

(including in reasonable detail both a balance sheet as of the close of such fiscal period, and statement of profit and

loss for the applicable fiscal period);

 

(iii) A/R

Agings.  Within 45 days after

the close of each fiscal quarter of Customer, a copy of the Accounts Receivable

Aging of Customer as of the end

of such fiscal quarter;

 

(iv) Inventory Reports. 

Within 45 days after the close of each fiscal quarter of

Customer, a copy of  the

Inventory Report (as and to the extent applicable, breaking out Inventory by

location, and separately reporting any work in process) of Customer as of the

end of such fiscal quarter; and

 

(v) Other

Information.  Such other

information as MLBFS may from time to time reasonably request relating to

Customer or the Collateral.

 

(b) General Agreements With Respect to Financial

Information.  Customer agrees

that except as otherwise specified herein or otherwise agreed to in writing by

MLBFS: (i) all annual financial statements required to be furnished by Customer

to MLBFS hereunder will be prepared by either the current independent

accountants for Customer or other independent accountants reasonably acceptable

to MLBFS, and (ii) all other financial information required to be furnished by

Customer to MLBFS hereunder will be certified as correct in all material

respects by the party who has prepared such information, and, in the case of

internally prepared information with respect to Customer, certified as correct

by its chief financial officer.

 

4.3 Other

Covenants.  Customer further

covenants and agrees during the term of  this

Loan Agreement that:

 

(a) Financial Records; Inspection.  Customer will: (i) maintain at

its principal place of business

complete and accurate books and records, and maintain all of  its financial records in a manner

consistent with the financial statements heretofore furnished to MLBFS, or

prepared on such other basis as may be approved in writing by MLBFS; and (ii)

permit MLBFS or its duly authorized representatives, upon reasonable notice and

at reasonable times, to inspect its properties (both real and personal),

operations, books and records.

 

(b) Taxes.  Customer will pay when due all taxes,

assessments and other governmental charges, howsoever designated, and all other

liabilities and obligations, except to the extent that any such failure to pay

will not materially and adversely affect either the liens and security interests

of MLBFS hereunder or under any of  the

Additional Agreements, the financial condition of Customer or the continued

operations of Customer.

 

(c) Compliance

With Laws and Agreements. 

Customer will not violate any law, regulation or other governmental

requirement, any judgment or order of any court or governmental agency or

authority, or any agreement, instrument or document to which it is a party or

by which it is bound, if any such violation will materially and adversely

affect either the liens and security interests of MLBFS hereunder or under any of  the Additional Agreements, or the

financial condition or the continued operations of Customer.

 

(d) No Use of Merrill Lynch Name.  Customer will not directly or

indirectly publish, disclose or otherwise use in any advertising or promotional

material, or press release or interview, the name, logo or any trademark of

MLBFS, MLPF&S, Merrill Lynch and Co., Incorporated or any of their

affiliates.

 

(e) Notification

By Customer.  Customer shall

provide MLBFS with prompt written notification of: (i)  any Default; (ii) any materially adverse

change in the business, financial condition or operations of Customer; (iii)

any information which indicates that any financial statements of Customer fail

in any material respect to present fairly the financial condition and results

of operations purported to be presented in such statements; and (iv) any change

in Customer's outside accountants. Each notification by Customer pursuant

hereto shall specify the event or information causing such notification, and,

to the extent applicable, shall specify the steps being taken to rectify or

remedy such event or information.

 

(f) Notice

of Change.  Customer shall

give MLBFS not less than 30 days prior written notice of any change in the name

(including any fictitious name) or principal place of business or residence of

Customer.

 

(g) Continuity.  Except

upon the prior written consent of MLBFS, which consent will not be unreasonably

withheld: (i) Customer shall not be a party to any merger or consolidation

with, or purchase or otherwise acquire all or substantially all of the assets

of, or any material stock, partnership, joint venture or other equity interest

in, any person or entity, or sell, transfer or lease all or any substantial part

of its assets, if any such action would result in either: (A) a material change

in the principal business, ownership or control of Customer, or (B) a material

adverse change in the financial condition or operations of Customer; (ii)

Customer shall preserve its existence and good standing in the jurisdiction(s)

of establishment and operation; (iii) Customer shall not engage in any material

business substantially different from its business in effect as of the date of

application by Customer for credit from MLBFS, or cease operating any such

material business; (iv) Customer shall not cause or permit any other person or

entity to assume or succeed to any material business or operations of Customer;

and (v) Customer shall not cause or permit any material change in its

controlling ownership.

 

(h) Minimum Tangible Net Worth.  As of December 31, 2000, Customer's "tangible net

worth" shall at all times exceed $7,750,000.00. For the purposes hereof,

the term "tangible net worth" shall mean Customer's net worth as shown

on Customer’s regular financial statements prepared in a manner consistent

 

 

10

 

with the terms hereof, but excluding an

amount equal to (i) any assets which are ordinarily classified as

"intangible" in accordance with generally accepted accounting

principles, and (ii) any amounts now or hereafter directly or indirectly owing

to Customer by officers, shareholders or affiliates of Customer.

 

4.4 Collateral

 

(a) Pledge of Collateral. 

To secure payment and performance of the Obligations,

Customer hereby pledges, assigns, transfers and sets over to MLBFS, and grants

to MLBFS first liens and security interests in and upon all of the Collateral,

subject only to Permitted Liens.

 

(b) Liens.  Except upon the prior written consent of

MLBFS, Customer shall not create or permit to exist any lien, encumbrance or

security interest upon or with respect to any Collateral now owned or hereafter

acquired other than Permitted Liens.

 

(c) Performance of Obligations.  Customer shall perform all of its obligations owing on

account of or with respect to the Collateral; it being understood that nothing

herein, and no action or inaction by MLBFS, under this Loan Agreement or

otherwise, shall be deemed an assumption by MLBFS of any of Customer's said

obligations.

 

(d) Sales and Collections.  So long as no Event of Default shall have occurred and

be continuing, Customer may in the ordinary course of its business: (i) sell

any Inventory normally held by Customer for sale, (ii) use or consume any

materials and supplies normally held by Customer for use or consumption, and

(iii) collect all of its Accounts. Customer shall take such action with respect

to protection of its Inventory and the other Collateral and the collection of

its Accounts as MLBFS may from time to time reasonably request.

 

(e) Account Schedules. 

Upon the request of MLBFS, made now or at any reasonable time

or times hereafter, Customer shall deliver to MLBFS, in addition to the other

information required hereunder, a schedule identifying, for each Account and

all Chattel Paper subject to MLBFS’ security interests hereunder, each Account

Debtor by name and address and amount, invoice or contract number and date of

each invoice or contract. Customer shall furnish to MLBFS such additional

information with respect to the Collateral, and amounts received by Customer as

proceeds of any of the Collateral, as MLBFS may from time to time reasonably

request.

 

(f) Alterations and Maintenance.  Except upon the prior written consent of MLBFS,

Customer shall not make or permit any material alterations to any tangible

Collateral which might materially reduce or impair its market value or utility.

Customer shall at all times keep the tangible Collateral in good condition and

repair, reasonable wear and tear excepted, and shall pay or cause to be paid

all obligations arising from the repair and maintenance of such Collateral, as

well as all obligations with respect to each Location of Tangible Collateral,

except for any such obligations being contested by Customer in good faith by

appropriate proceedings.

 

(g) Location.  Except

for movements required in the ordinary course of Customer's business, Customer

shall give MLBFS 30 days’ prior written notice of the placing at or movement of

any tangible Collateral to any location other than a Location of Tangible

Collateral. In no event shall Customer cause or permit any material tangible

Collateral to be removed from the United States without the express prior

written consent of MLBFS.

 

(h) Insurance.  Customer

shall insure all of the tangible Collateral under a policy or policies of

physical damage insurance providing that losses will be payable to MLBFS as its

interests may appear pursuant to a Lender’s Loss Payable Endorsement and

containing such other provisions as may be reasonably required by MLBFS.

Customer shall further provide and maintain a policy or policies of

comprehensive public liability insurance naming MLBFS as an additional party

insured. Customer shall maintain such other insurance as may be required by law

or is customarily maintained by companies in a similar business or otherwise

reasonably required by MLBFS. All such insurance policies shall provide that

MLBFS will receive not less than 10 days prior written notice of any cancellation,

and shall otherwise be in form and amount and with an insurer or insurers

reasonably acceptable to MLBFS. Customer shall furnish MLBFS with a copy or

certificate of each such policy or policies and, prior to any expiration or

cancellation, each renewal or replacement thereof.

 

(i) Event of Loss. 

Customer shall at its expense promptly repair all repairable

damage to any tangible Collateral. In the event that any tangible Collateral is

damaged beyond repair, lost, totally destroyed or confiscated (an "Event

of Loss") and such Collateral had a value prior to such Event of Loss of

$25,000.00 or more, then, on or before the first to occur of (i) 90 days after

the occurrence of such Event of Loss, or (ii) 10 Business Days after the date

on which either Customer or MLBFS shall receive any proceeds of insurance on

account of such Event of Loss, or any underwriter of insurance on such

Collateral shall advise either Customer or MLBFS that it disclaims liability in

respect of such Event of Loss, Customer shall, at Customer's option, either

replace the Collateral subject to such Event of Loss with comparable Collateral

free of all liens other than Permitted Liens (in which event Customer shall be

entitled to utilize the proceeds of insurance on account of such Event of Loss

for such purpose, and may retain any excess proceeds of such insurance), or

permanently prepay the Loan by an amount equal to the actual cash value of such

Collateral as determined by either the insurance company’s payment (plus any

applicable deductible) or, in absence of insurance company payment, as

reasonably determined by MLBFS; it being further understood that any such

permanent prepayment shall be accompanied by a like permanent reduction in the

Maximum WCMA Line of Credit. Notwithstanding the foregoing, if at the time of

occurrence of such Event of Loss or any time thereafter prior to replacement or

line reduction, as aforesaid, an Event of Default shall have occurred and be

continuing hereunder, then MLBFS may at its sole option, exercisable at any

time while such Event of Default shall be continuing, require Customer to

either replace such Collateral or prepay the Loan and reduce the Maximum WCMA

Line of Credit, as aforesaid.

 

(j) Notice of Certain Events.  Customer shall give MLBFS immediate notice of any

attachment, lien, judicial process, encumbrance or claim affecting or involving

$25,000.00 or more of the Collateral.

 

(k) Indemnification. 

Customer shall indemnify, defend and save MLBFS harmless from

and against any and all claims, liabilities, losses, costs and expenses

(including, without limitation, reasonable attorneys’ fees and expenses) of any

nature whatsoever which may be asserted against or incurred by MLBFS arising

out of or in any manner occasioned by (i) the ownership, collection,

possession, use or operation of any Collateral, or (ii) any failure by Customer

to perform any of its obligations hereunder; excluding, however, from said

indemnity any such claims, liabilities, etc. arising directly out of the

 

 

11

 

willful wrongful act or active gross

negligence of MLBFS. This indemnity shall survive the expiration or termination

of this Loan Agreement as to all matters arising or accruing prior to such

expiration or termination.

 

4.5

Events of Default

 

The occurrence of any of the following events

shall constitute an “Event of Default" under this Loan Agreement:

 

(a) Failure to Pay. 

(i) Customer shall fail to deposit into the WCMA Account an

amount sufficient to assure that the WCMA Loan Balance does not exceed the

Maximum WCMA Line of Credit, as reduced in accordance with the provisions

hereof, or (ii) Customer shall fail to pay to MLBFS, or deposit into the WCMA

Account when due any other amount owing or required to be paid or deposited by

Customer under this Loan Agreement, or (iii) Customer shall fail to pay when

due any other Obligations; and any such failure shall continue for more than

five (5) Business Days after written notice thereof shall have been given by

MLBFS to Customer.

 

(b) Failure

to Perform.  Customer shall

default in the performance or observance of any covenant or agreement on its

part to be performed or observed under this Loan Agreement or any of the

Additional Agreements (not constituting an Event of Default under any other

clause of this Section), and such default shall continue unremedied for ten

(10) Business Days after written notice thereof shall have been given by MLBFS

to Customer,

 

(c) Breach of Warranty. 

Any representation or warranty made by Customer or any other

party providing collateral for the Obligations contained in this Loan Agreement

or any of the other Additional Agreements shall at any time prove to have been

incorrect in any material respect when made.

 

(d) Default Under Other Agreement.  A default or Event of Default by

Customer shall occur under the terms of any other agreement, instrument or

document with or intended for the benefit of MLBFS, MLPF&S or any of their

affiliates, and any required notice shall have been given and required passage

of time shall have elapsed.

 

(e) Bankruptcy Event. 

Any Bankruptcy Event shall occur.

 

(f) Material Impairment. 

Any event shall occur which shall reasonably cause MLBFS to

in good faith believe that the prospect of full payment or performance by Customer

of its liabilities or obligations under this Loan Agreement or any of the

Additional Agreements to which Customer is a party has been materially

impaired. The existence of such a material impairment shall be determined in a

manner consistent with the intent of Section 1-208 of the UCC.

 

(g) Acceleration of Debt to Other Creditors.  Any event shall occur which

results in the acceleration of the maturity of any indebtedness of $100,000.00

or more of Customer to another creditor under any indenture, agreement,

undertaking, or otherwise.

 

(h) Seizure or Abuse of Collateral.  The Collateral, or any material

part thereof, shall be or become subject to any material abuse or misuse, or

any levy, attachment, seizure or confiscation which is not released within ten

(10) Business Days.

 

4.6 Remedies.

 

(a) Remedies Upon Default.  Upon the occurrence and during the continuance of any

Event of Default, MLBFS may at its sole option do any one or more or all of the

following, at such time and in such order as MLBFS may in its sole discretion

choose:

 

(i) Termination.  MLBFS may without notice terminate its

obligation to make the Loan (if the Loan has not then been funded), terminate

the WCMA Line of Credit, and terminate any obligation to make any Subsequent

WCMA Loan (including. without limitation, any Subsequent WCMA Loan to pay

accrued interest) or otherwise extend any credit to or for the benefit of

Customer (it being understood that upon the occurrence of any Bankruptcy Event

the WCMA Line of Credit and all such obligations shall automatically terminate

without any action on the part of MLBFS); and upon any such termination MLBFS

shall be relieved of all such obligations.

 

(ii) Acceleration.  MLBFS

may declare the WCMA Loan Balance and all other Obligations to be forthwith due

and payable, whereupon all such amounts shall be immediately due and payable,

without presentment, demand for payment, protest and notice of protest, notice

of dishonor, notice of acceleration, notice of intent to accelerate or other

notice or formality of any kind, all of which are hereby expressly waived;

provided, however, that upon the occurrence of any Bankruptcy Event the WCMA

Loan Balance and other Obligations shall automatically become due and payable

without any action on the part of MLBFS.

 

(iii) Exercise Other Rights.  MLBFS may exercise any or all of the remedies of a

secured party under applicable law, including, but not limited to, the UCC, and

any or all of its other rights and remedies under this Loan Agreement and the

Additional Agreements.

 

(iv) Possession.  MLBFS

may require Customer to make the Collateral and the records pertaining to the

Collateral available to MLBFS at a place designated by MLBFS which is

reasonably convenient to Customer, or may take possession of the Collateral and

the records pertaining to the Collateral without the use of any judicial

process and without any prior notice to Customer.

 

(v) Sale.  MLBFS may sell any or all of the Collateral

at public or private sale upon such terms and conditions as MLBFS may

reasonably deem proper. MLBFS may purchase any Collateral at any such public

sale. The net proceeds of any such public or private sale and all other amounts

actually collected or received by MLBFS pursuant hereto, after deducting all

costs and expenses incurred at any time in the collection of the Obligations

and in the protection,

 

 

12

 

collection and sale of the Collateral, will

be applied to the payment of the Obligations, with any remaining proceeds paid

to Customer or whoever else may be entitled thereto, and with Customer

remaining liable for any amount remaining unpaid after such application.

 

(vi) Delivery of Cash, Checks, Etc.  MLBFS may require Customer to

forthwith upon receipt, transmit and deliver to MLBFS in the form received, all

cash, checks, drafts and other instruments for the payment of money (properly

endorsed, where required, so that such items may be collected by MLBFS) which

may be received by Customer at any time in full or partial payment of any

Collateral, and require that Customer not commingle any such items which may be

so received by Customer with any other of its funds or property but instead

hold them separate and apart and in trust for MLBFS until delivery is made to

MLBFS.

 

(vii) Notification of Account Debtors.  MLBFS may notify any Account

Debtor that its Account or Chattel Paper has been assigned to MLBFS and direct

such Account Debtor to make payment directly to MLBFS of all amounts due or

becoming due with respect to such Account or Chattel Paper; and MLBFS may

enforce payment and collect, by legal proceedings or otherwise, such Account or

Chattel Paper.

 

(viii) Control of Collateral.  MLBFS may otherwise take control in any lawful manner

of any cash or non–cash items of payment or proceeds of Collateral and of

any rejected, returned, stopped in transit or repossessed goods included in the

Collateral and endorse Customer’s name on any item of payment on or proceeds of

the Collateral.

 

(b) Set–Off. 

MLBFS shall have the further right upon the occurrence and

during the continuance of an Event of Default to set–off, appropriate and

apply toward payment of any of the Obligations, in such order of application as

MLBFS may from time to time and at any time elect, any cash, credit, deposits,

accounts, financial assets, investment property, securities and any other

property of Customer which is in transit to or in the possession, custody or

control of MLBFS, MLPF&S or any agent, bailee, or affiliate of MLBFS or

MLPF&S.  Customer hereby

collaterally assigns and grants to MLBFS a continuing security interest in all

such property as additional Collateral.

 

(c) Power of Attorney. 

Effective upon the occurrence and during the continuance of

an Event of Default, Customer hereby irrevocably appoints MLBFS as its attorney–in–fact,

with full power of substitution, in its place and stead and in its name or in

the name of MLBFS, to from time to time in MLBFS’ sole discretion take any

action and to execute any instrument which MLBFS may deem necessary or

advisable to accomplish the purposes of this Loan Agreement, including, but not

limited to, to receive, endorse and collect all checks, drafts and other

instruments for the payment of money made payable to Customer included in the

Collateral.

 

(d) Remedies are Severable and Cumulative.  All rights and remedies of MLBFS

herein are severable and cumulative and in addition to all other rights and

remedies available in the Additional Agreements, at law or in equity, and any

one or more of such rights and remedies may be exercised simultaneously or

successively,

 

(e) Notices.  To

the fullest extent permitted by applicable law, Customer hereby irrevocably

waives and releases MLBFS of and from any and all liabilities and penalties for

failure of MLBFS to comply with any statutory or other requirement imposed upon

MLBFS relating to notices of sale, holding of sale or reporting of any sale,

and Customer waives all rights of redemption or reinstatement from any such

sale. Any notices required under applicable law shall be reasonably and

properly given to Customer if given by any of the methods provided herein at

least 5 Business Days prior to taking action. MLBFS shall have the right to

postpone or adjourn any sale or other disposition of Collateral at any time without

giving notice of any such postponed or adjourned date. In the event MLBFS seeks

to take possession of any or all of the Collateral by court process, Customer

further irrevocably waives to the fullest extent permitted by law any bonds and

any surety or security relating thereto required by any statute, court rule or

otherwise as an incident to such possession, and any demand for possession

prior to the commencement of any suit or action.

 

4.7 Miscellaneous.

 

(a) Non–Waiver. 

No failure or delay on the part of MLBFS in exercising any

right, power or remedy pursuant to this Loan Agreement or any of the Additional

Agreements shall operate as a waiver thereof, and no single or partial exercise

of any such right, power or remedy shall preclude any other or further exercise

thereof, or the exercise of any other right, power or remedy. Neither any

waiver of any provision of this Loan Agreement or any of the Additional

Agreements, nor any consent to any departure by Customer therefrom, shall be

effective unless the same shall be in writing and signed by MLBFS. Any waiver

of any provision of this Loan Agreement or any of the Additional Agreements and

any consent to any departure by Customer from the terms thereof shall be

effective only in the specific instance and for the specific purpose for which

given. Except as otherwise expressly provided herein, no notice to or demand on

Customer shall in any case entitle Customer to any other or further notice or

demand in similar or other circumstances.

 

(b) Disclosure.  Customer

hereby irrevocably authorizes MLBFS and each of its affiliates, including

without limitation MLPF&S to at any time (whether or not an Event of

Default shall have occurred) obtain from and disclose to each other any and all

financial and other information about Customer.

 

(c) Communications. 

All notices and other communications required or permitted

hereunder or in connection with any of the Additional Agreements shall be in

writing, and shall be either delivered personally, mailed by postage prepaid

certified mail or sent by express overnight courier or by facsimile. Such

notices and communications shall be deemed to be given on the date of personal

delivery, facsimile transmission or actual delivery of certified mail, or one

Business Day after delivery to an express overnight courier. Unless otherwise

specified in a notice sent or delivered in accordance with the terms hereof,

notices and other communications in writing shall be given to the parties

hereto at their respective addresses set forth at the beginning of this Loan

Agreement, or, in the case of facsimile transmission, to the parties at their

respective regular facsimile telephone number.

 

(d) Fees, Expenses and Taxes.  Customer shall pay or reimburse MLBFS for: (i) all

Uniform Commercial Code filing and search fees and expenses incurred by MLBFS

in connection with the verification, perfection or preservation of MLBFS’

rights hereunder or in the Collateral or any other collateral for the

Obligations; (ii) any and all stamp, transfer and other taxes and fees payable

or determined to be payable in connection with the execution, delivery and/or

 

 

13

 

recording of this Loan Agreement or any of

the Additional Agreements; and (iii) all reasonable fees and out-of-pocket

expenses (including, but not limited to, reasonable fees and expenses of

outside counsel) incurred by MLBFS in connection with the collection of any sum

payable hereunder or under any of the Additional Agreements not paid when due,

the enforcement of this Loan Agreement or any of the Additional Agreements and

the protection of MLBFS’ rights hereunder or thereunder, excluding, however,

salaries and normal overhead attributable to MLBFS’ employees. Customer hereby

authorizes MLBFS, at its option, to either cause any and all such fees,

expenses and taxes to be paid with a WCMA Loan, or invoice Customer therefor

(in which event Customer shall pay all such fees, expenses and taxes within 5

Business Days after receipt of such invoice). The obligations of Customer under

this paragraph shall survive the expiration or termination of this Loan

Agreement and the discharge of the other Obligations.

 

(e) Right to Perform Obligations.  If Customer shall fall to do any

act or thing which it has covenanted to do under this Loan Agreement or any

representation or warranty on the part of Customer contained in this Loan

Agreement shall be breached, MLBFS may, in its sole discretion, after 5

Business Days written notice is sent to Customer (or such lesser notice,

including no notice, as is reasonable under the circumstances), do the same or

cause it to be done or remedy any such breach, and may expend its funds for

such purpose. Any and all reasonable amounts so expended by MLBFS shall be

repayable to MLBFS by Customer upon demand, with interest at the Interest Rate

during the period from and including the date funds are so expended by MLBFS to

the date of repayment, and all such amounts shall be additional Obligations.

The payment or performance by MLBFS of any of Customer’s obligations hereunder

shall not relieve Customer of said obligations or of the consequences of having

failed to pay or perform the same, and shall not waive or be deemed a cure of

any Default.

 

(f) Further Assurances. 

Customer agrees to do such further acts and things and to

execute and deliver to MLBFS such additional agreements, instruments and

documents as MLBFS may reasonably require or deem advisable to effectuate the

purposes of this Loan Agreement or any of the Additional Agreements, or to

establish, perfect and maintain MLBFS’ security interests and liens upon the

Collateral, including, but not limited to: (i) executing financing statements

or amendments thereto when and as reasonably requested by MLBFS; and (ii) if in

the reasonable judgment of MLBFS it is required by local law, causing the

owners and/or mortgagees of the real property on which any Collateral may be

located to execute and deliver to MLBFS waivers or subordinations reasonably

satisfactory to MLBFS with respect to any rights in such Collateral.

 

(g) Binding Effect. 

This Loan Agreement and the Additional Agreements shall be

binding upon. and shall inure to the benefit of MLBFS, Customer and their

respective successors and assigns. 

Customer shall not assign any of its rights or delegate any of its

obligations under this Loan Agreement or any of the Additional Agreements

without the prior written consent of MLBFS. Unless otherwise expressly agreed

to in a writing signed by MLBFS, no such consent shall in any event relieve Customer

of any of its obligations under this Loan Agreement or any of the Additional

Agreements.

 

(h) Headings.  Captions

and section and paragraph headings in this Loan Agreement are inserted only as

a matter of convenience, and shall not affect the interpretation hereof.

 

(i) Governing Law. 

This Loan Agreement and, unless otherwise expressly provided

therein, each of the Additional Agreements, shall be governed in all respects

by the laws of the State of Illinois.

 

(j) Severability of Provisions.  Whenever possible, each provision of this Loan

Agreement and the Additional Agreements shall be interpreted in such manner as

to be effective and valid under applicable law. Any provision of this Loan

Agreement or any of the Additional Agreements which is prohibited or

unenforceable in any jurisdiction shall, as to such jurisdiction, be

ineffective only to the extent of such prohibition or unenforceability without

invalidating the remaining provisions of this Loan Agreement and the Additional

Agreements or affecting the validity or enforceability of such provision in any

other jurisdiction.

 

(k) Term.  This Loan Agreement shall become effective

on the date accepted by MLBFS at its office in Chicago, Illinois, and, subject

to the terms hereof, shall continue in effect so long thereafter as: (i) MLBFS

shall be obligated to make the Loan, (ii) the WCMA Line of Credit shall be in

effect, (iii) there shall be any moneys outstanding under this Loan Agreement,

or (iv) there shall be any other Obligations outstanding.

 

(1) Counterparts.  This

Loan Agreement may be executed in one or more counterparts which, when taken

together, constitute one and the same agreement.

 

(m) Jurisdiction; Waiver. 

CUSTOMER ACKNOWLEDGES THAT THIS LOAN AGREEMENT IS BEING ACCEPTED BY

MLBFS IN PARTIAL CONSIDERATION OF MLBFS’ RIGHT AND OPTION, IN ITS SOLE

DISCRETION, TO ENFORCE THIS LOAN AGREEMENT AND THE ADDITIONAL AGREEMENTS IN

EITHER THE STATE OF ILLINOIS OR IN ANY OTHER JURISDICTION WHERE CUSTOMER OR ANY

COLLATERAL FOR THE OBLIGATIONS MAY BE LOCATED. CUSTOMER IRREVOCABLY SUBMITS

ITSELF TO JURISDICTION IN THE STATE OF ILLINOIS AND VENUE IN ANY STATE OR

FEDERAL COURT IN THE COUNTY OF COOK FOR SUCH PURPOSES, AND CUSTOMER WAIVES ANY

AND ALL RIGHTS TO CONTEST SAID JURISDICTION AND VENUE AND THE CONVENIENCE OF

ANY SUCH FORUM AND ANY AND ALL RIGHTS TO REMOVE SUCH ACTION FROM STATE TO

FEDERAL COURT. CUSTOMER FURTHER WAIVES ANY RIGHTS TO COMMENCE ANY ACTION

AGAINST MLBFS IN ANY JURISDICTION EXCEPT IN THE COUNTY OF COOK AND STATE OF

ILLINOIS. MLBFS AND CUSTOMER HEREBY EACH EXPRESSLY WAIVE ANY AND ALL RIGHTS TO

A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF

THE PARTIES AGAINST THE OTHER PARTY WITH RESPECT TO ANY MATTER RELATING TO,

ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE LOAN, THIS LOAN AGREEMENT, ANY

ADDITIONAL AGREEMENTS AND/OR ANY OF THE TRANSACTIONS WHICH ARE THE SUBJECT

MATTER OF THIS LOAN AGREEMENT. CUSTOMER FURTHER WAIVES THE RIGHT TO BRING ANY

NON–COMPULSORY COUNTERCLAIMS.

 

(n) Integration. 

THIS LOAN AGREEMENT, TOGETHER WITH THE ADDITIONAL AGREEMENTS,

CONSTITUTES THE ENTIRE UNDERSTANDING AND REPRESENTS THE FULL AND FINAL

AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF, AND

MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR WRITTEN AGREEMENTS OR PRIOR,

CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO

UNWRITTEN ORAL AGREEMENTS OF THE PARTIES. WITHOUT LIMITING THE FOREGOING,

CUSTOMER ACKNOWLEDGES THAT: (I) NO

PROMISE OR COMMITMENT HAS BEEN MADE TO IT BY MLBFS, MLPF&S OR ANY OF THEIR

 

 

14

 

RESPECTIVE EMPLOYEES, AGENTS OR REPRESENTATIVES TO MAKE THE

LOAN OR ANY SUBSEQUENT WCMA LOAN ON ANY TERMS OTHER THAN AS EXPRESSLY SET FORTH

HEREIN, OR TO MAKE ANY OTHER LOAN OR OTHERWISE EXTEND ANY OTHER CREDIT TO

CUSTOMER OR ANY OTHER PARTY; AND (II) EXCEPT AS OTHERWISE EXPRESSLY PROVIDED

HEREIN, THIS LOAN AGREEMENT SUPERSEDES AND REPLACES ANY AND ALL PROPOSALS,

LETTERS OF INTENT AND APPROVAL AND COMMITMENT LETTERS FROM MLBFS TO CUSTOMER, NONE

OF WHICH SHALL BE CONSIDERED AN ADDITIONAL AGREEMENT. NO AMENDMENT OR

MODIFICATION OF THIS AGREEMENT OR ANY OF THE ADDITIONAL AGREEMENTS TO WHICH

CUSTOMER IS A PARTY SHALL BE EFFECTIVE UNLESS IN A WRITING SIGNED BY BOTH MLBFS

AND CUSTOMER.

 

IN WITNESS WHEREOF, this Loan Agreement has been

executed as of the day and year first above written.

 

STOCKERYALE, INC. F/K/A STOCKER & YALE, INC.

 

	

  By: 

  	

  /s/ Mark W. Blodgett

  	

   

  	

  /s/ Gary B. Godin

  
	

   

  	

  Signature

  (1)

  	

   

  	

  Signature (2)

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  Mark W. Blodgett

  	

   

  	

  Gary B. Godin

  
	

   

  	

  Printed

  Name

  	

   

  	

  Printed Name

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  CEO

  	

   

  	

  CFO

  
	

   

  	

  Title

  	

   

  	

  Title

  
					

 

Accepted at Chicago, Illinois:

 

MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC.

 

	

  By: 

  	

  /s/ Julie Ellman

  

 

 

15

 

 

EXHIBIT A

 

ATTACHED TO

AND HEREBY MADE A PART OF WCMA REDUCING REVOLVERSM LOAN AND SECURITY

AGREEMENT NO. 794–07E50 BETWEEN MERRILL LYNCH BUSINESS FINANCIAL SERVICES

INC. AND STOCKERYALE, INC. F/K/A STOCKER & YALE, INC.

 

 

Additional

Locations of Tangible Collateral:

 

	

  15935 Sturgeon Street

  	

   

  	

  To be

  sold

  
	

  Roseville, Michigan

  	

   

  	

  by May

  31, 2001.

  

 

 

16.

Exhibit 10.1

 

FOURTH AMENDMENT

TO

FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

 

Fourth

Amendment dated as of May 6, 2002 to the Fourth Amended and Restated Credit

Agreement (the “Amendment”), by and among HPSC, INC., a Delaware corporation (the

“Borrower”), AMERICAN COMMERCIAL FINANCE COMPANY, a Delaware corporation

(the “Guarantor” or “ACFC”), FLEET NATIONAL BANK and the other lending

institutions listed on Schedule 1 to the Credit Agreement (as

hereinafter defined) (the “Banks”), and Fleet National Bank as agent for the

Banks (in such capacity, the “Agent”), amending certain provisions of the

Fourth Amended and Restated Credit Agreement dated as of May 12, 2000 (as

amended and in effect from time to time, the “Credit Agreement”) by and among

the Borrower, the Guarantor, the Banks and the Agent.  Terms not otherwise defined herein which are defined in the

Credit Agreement shall have the same respective meanings herein as therein.

 

WHEREAS,

the Borrower and the Banks have agreed to modify certain terms and conditions

of the Credit Agreement, as specifically set fourth in this Amendment;

 

NOW, THEREFORE,

in consideration of the premises and the mutual agreements contained herein and

for other good and valuable consideration, the receipt and sufficiency of which

are hereby acknowledged, the parties hereto hereby agree as follows:

 

§1.  Amendments to Section 1 of the Credit

Agreement.

 

(a)  Section 1.1 of the Credit Agreement is

hereby amended by amending and restating in its entirety the definition of

“Revolving Credit Loan Maturity Date”:

 

Revolving Credit Loan Maturity Date.  The first to occur of (x) June 5, 2002 or

(y) termination, as determined by the Agent in its sole and absolute

discretion, of the Borrower’s proposed financing arrangements with Foothill Capital

Corporation and others described in the Foothill Proposal Letter.

 

(b)  Section 1.1 of the Credit Agreement is

hereby amended by adding the following new definition in the appropriate

alphabetical order:

 

Foothill Proposal Letter.  The letter issued to the Borrower by

Foothill Capital Corporation dated April 10, 2002, proposing up to $90,000,000

of senior secured revolving credit facilities.

 

§2.  Amendment to Section 4.3 of the Credit

Agreement. 

Section 4.3 of the Credit Agreement is hereby deleted in its entirety

and replaced with the following new Section 4.3:

 

4.3 Repayments of the Term Loan.  The Borrower promises to pay to the Agent

for the account of the Banks the principal amount of the Term Loan in four (4)

consecutive quarterly installments, each equal as near as possible to 1/4th

of the principal amount of 

 

 

the Term Loan

outstanding on the Revolving Credit Loan Maturity Date, such installments to be

due and payable on June 30, 2002, September 30, 2002, December 31, 2002 and

March 31, 2003, with a final payment on the Term Loan Maturity Date in an

amount equal to the unpaid balance of the Term Loan.

 

§3.  Amendment to Section 5.1.1.  The words “Revolving Credit Loan Maturity

Date” in Section 5.1.1 are hereby deleted and replaced with “May 5, 2002”.

 

§4.  Amendment to Section 5.1.3.  The words “the date which is fourteen (14)

business days prior to” are hereby deleted from Section 5.1.3.

 

§5.  Section 11.  The first sentence of the provision at the

end of Section 11 is hereby amended to read in its entirety as follows:

 

For purposes

of determining compliance with §11.1 for the fiscal quarter ending March 31,

2002, the Newco Transaction Costs shall be excluded from such calculation.

 

§6.  Amendment to Schedule 1.  Schedule 1 to the Credit Agreement is

hereby replaced by the Schedule 1 attached to this Amendment.

 

§7.  Notice Requirement.  The Borrower will, immediately upon becoming

aware thereof, notify the Agent, in writing, of termination of Borrower’s

proposed financing arrangements with Foothill Capital Corporation.  The Borrower authorizes the Agent to

communicate directly with Foothill Capital Corporation regarding the status of

such financing arrangements.

 

§8.  Conditions to Effectiveness.  This Amendment

shall not become effective until the Agent receives (a) a counterpart of this

Amendment, executed by the Borrower, the Guarantor and all of the Banks and (b)

such other documents as the Agent may request.

 

§9.  Representations and Warranties.  The Borrower hereby repeats, on and as of the

date hereof, each of the representations and warranties made by it in Section

8 of the Credit Agreement, and such representations and warranties remain

true as of the date hereof (except to the extent of changes resulting from

transactions contemplated or permitted by the Credit Agreement and the other

Loan Documents, and to the extent that such representations and warranties

relate expressly to an earlier date), provided, that all amended

hereby.  In addition, the Borrower

hereby represents and warrants that the execution and delivery by the Borrower

of this Amendment and the performance by the Borrower of all of its agreements

and obligations under the Credit Agreement as amended hereby are within the

corporate authority of the Borrower and has been duly authorized by all

necessary corporate action on the part of the Borrower.

 

2

 

§10.  Waiver and Release.  The Borrower (and by its execution of the

Ratification by Guarantor hereto, the Guarantor) hereby represent, warrant and

agree that neither of them has any claims, defenses, counterclaims or offsets

against the Agent or any Bank in connection with the Credit Agreement or the

Obligations and, to the extent that any such claim, defense, counterclaim or

offset may exist, the Borrower and the Guarantor hereby affirmatively WAIVE AND

RELEASE the Agent and the Banks from the same.

 

§11.  Ratification, Ect.  Except as expressly amended hereby, the

Credit Agreement, the Security Documents and all documents, instruments and

agreements related there to are hereby ratified and confirmed in all respects

and shall continue in full force and effect. 

The Credit Agreement and this Amendment shall be read and construed as a

single agreement.  All references in the

Credit Agreement or any related agreement or instrument to the Credit Agreement

or any related agreement or instrument to the Credit Agreement shall hereafter

refer to the Credit Agreement as amended hereby.

 

§12.  No Waiver.  Nothing contained herein shall constitute

a waiver of, impair or otherwise affect any Obligations, any other obligation

of the Borrower or any rights of the Agent or the Bank.

 

§13.  Counterparts.  This Amendment may be executed in one or

more counterparts, each of which shall be deemed an original but which together

shall constitute one and the same instrument.

 

§14.  Governing Law.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN

ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS (WITHOUT

REFERENCE TO CONFLICT OF LAWS).

 

**Next page is

signature page**

 

3

 

IN WITNESS WHEREOF,

the undersigned have duly executed this Amendment as a sealed instrument as of

the date first set forth above.

 

	

   

  	

  HPSC, INC.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ John W.

  Everets

  	

   

  
	

   

  	

  Name:

  	

  John W.

  Everets

  	

   

  
	

   

  	

  Title:

  	

  Chairman

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  FLEET NATIONAL BANK,

  individually and as Agent

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ C.

  Christopher Smith

  	

   

  
	

   

  	

  Name:

  	

  C. Christopher Smith

  	

   

  
	

   

  	

  Title:

  	

  Vice President

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  KEYBANK NATIONAL ASSOCIATION

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Mitchell

  B. Feldman

  	

   

  
	

   

  	

  Name:

  	

  Mitchell B. Feldman

  	

   

  
	

   

  	

  Title:

  	

  Senior VP

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  PNC BANK, NATIONAL ASSOCIATION

  
	

   

  	

  (successor to National Bank of Canada)

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Edward

  Chonko

  	

   

  
	

   

  	

  Name:

  	

  Edward Chonko

  	

   

  
	

   

  	

  Title:

  	

  Asst. VP

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  BANKNORTH 

  	

   

  
	

   

  	

  (f/k/a First Massachusetts Bank, N.A.)

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Jon R.

  Sundstrom

  	

   

  
	

   

  	

  Name:

  	

  Jon R. Sundstrom

  	

   

  
	

   

  	

  Title:

  	

  Senior VP

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  CITIZENS BANK OF MASSACHUSETTS

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/

  Catherine A. Fobes

  	

   

  
	

   

  	

  Name:

  	

  Catherine A. Fobes

  	

   

  
	

   

  	

  Title:

  	

  Asst. VP

  	

   

  
						

 

4

 

Ratification

by Guarantor

 

The

undersigned Guarantor hereby acknowledges and consents to the foregoing

Amendment as of May 6, 2002 and agrees that the Guaranty dated as of June 23,

1994 from the undersigned in favor of the Agent and each of the Banks, as

amended by Omnibus Amendment No. 4 to Security Documents, dated as of May 12,

2000, and each of the other Security Documents to which it is a party remain in

full force and effect, and the Guarantor confirms and ratifies all of its

obligations thereunder.

 

	

   

  	

  AMERICAN COMMERCIAL 

  FINANCE CORPORATION

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

   /s/ John W. Everets

  	

   

  
	

   

  	

  Name: John W. Everets

  	

   

  
	

   

  	

  Title: 

  Chairman

  	

   

  

 

5

 

FOURTH AMENDED AND

RESTATED

REVOLVING CREDIT AGREEMENT

 

Schedule 1

Banks; Addresses; Commitments; Commitment

Percentages

 

	

  Bank’s Name and Address

  	

   

  	

  Commitment

  	

   

  	

  Percentage

  	

   

  
	

  Fleet National Bank
100 Federal Street

  Boston, MA 02110

  Attn:  Elisabet C. Hayes

  Phone:  617-434-5256

  Fax:  617-434-4775

  	

   

  	

  $

  	

  31,437,127.50

  	

   

  	

  41.91617

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  KeyBank National Association
One Canal Plaza

  Portland, ME 04101

  Attn:  Mitchell Feldman

  Phone:  207-874-7017

  Fax:  207-874-7070

  	

   

  	

  $

  	

  16,616,760.00

  	

   

  	

  22.15568

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  PNC Bank, National Association 
70 East 55th Street

  14th Floor

  New York, NY 10022

  Attention: Edward Chonko

  Phone 646-497-0272

  Fax 646-497-0324

  	

   

  	

  $

  	

  8,982,037.50

  	

   

  	

  11.97605

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Banknorth, N.A.

  7 New England Executive Park

  Suite 700

  Burlington, MA 01803

  Attn:  Jon R. Sundrom

  Phone:  781-229-3901

  Fax:  781-229-5663

  	

   

  	

  $

  	

  8,982,037.50

  	

   

  	

  11.97605

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Citizens Bank of Massachusetts
28 State Street

  Boston, MA 02109

  Attn:  David Farwell

  Phone:  617-725-5692

  Fax:  617-725-5693

  	

   

  	

  $

  	

  8,982,037.50

  	

   

  	

  11.97605

  	

  %

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Total

  	

   

  	

  $

  	

  75,000,000

  	

   

  	

  100

  	

  %

  

 

6

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