Mark
DuHamel
FirstMerit Corporation
Executive Vice President and Treasurer
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Re:
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$15,000,000.00 Committed Line of Credit
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We are
pleased to inform you that PNC Bank, National Association (the
“Bank” ), has approved your request for a
committed line of credit to FirstMerit Corporation (the
“Borrower” ). We look forward to this
opportunity to help you meet the financing needs of your business.
All the details regarding your line of credit are outlined in the
following sections of this letter.
1.
Facility and Use of Proceeds . This is a committed revolving
line of credit under which the Borrower may request and the Bank,
subject to the terms and conditions of this letter, will make
advances to the Borrower from time to time until the Expiration
Date, in an amount in the aggregate at any time outstanding not to
exceed $15,000,000.00 (the “Line of Credit” or
the “Loan” ). The “Expiration
Date” means December 29, 2010, or such later date as
may be designated by the Bank by written notice to the Borrower.
Advances under the Line of Credit will be used for working capital
or other general business purposes of the Borrower.
2.
Note . The obligation of the Borrower to repay advances
under the Line of Credit shall be evidenced by a promissory note
(the “Note” ) in form and content satisfactory
to the Bank.
This
letter (the “Letter Agreement” ), the Note and
the other agreements and documents executed and/or delivered
pursuant hereto, as each may be amended, modified, extended or
renewed from time to time, will constitute the “Loan
Documents.” Capitalized terms not defined herein shall
have the meaning ascribed to them in the Loan Documents.
The
Loan will be cross-collateralized and cross-defaulted with all
other present and future obligations of the Borrower to the
Bank.
FirstMerit
Corporation
December 30, 2008
Page 2
3.
Interest Rate . Interest on the unpaid balance of the Line
of Credit advances will be charged at the rates, and be payable on
the dates and times, set forth in the Note.
4.
Repayment; Prepayment and Reduction of Line of Credit .
Subject to the terms and conditions of this Letter Agreement, the
Borrower may borrow, repay and reborrow under the Line of Credit
until the Expiration Date, on which date the outstanding principal
balance and any accrued but unpaid interest shall be due and
payable. Interest will be due and payable as set forth in the Note,
and will be computed on the basis of a year of 360 days and
paid on the actual number of days that principal is
outstanding.
The
Borrower shall have the right, at its election, to prepay the
outstanding amount of the Loan, as a whole or in part, at any time
without penalty or premium; provided , that any full or
partial prepayment of any Loans bearing interest at LIBOR made on a
day other than the last day of the LIBOR Interest Period relating
thereto shall be subject to the payment of additional costs
described in Section 7 of the Note and shall be accompanied by
the payment of accrued interest on the principal amount prepaid to
the date of prepayment.
The
Borrower shall have the right, at its election, to terminate in
whole or reduce in part the unused portion of the Line of Credit,
at any time; provided , that each partial reduction shall be
in minimum amounts of $1,000,000.00 or a multiple integral
thereof.
5.
Covenants . Unless compliance is waived in writing by the
Bank, until payment in full of the Loan and termination of the
commitment for the Line of Credit:
(a) The
Borrower will promptly submit to the Bank such information as the
Bank may reasonably request relating to the Borrower’s
affairs (including but not limited to Financial Statements (as
hereinafter defined)) and/or any security for the Loan.
(b) The
Borrower will not make or permit any change in its form of
organization or the nature of its business as carried on as of the
date of this Letter Agreement.
(c) The
Borrower will provide prompt written notice to the Bank of the
occurrence of any of the following (together with a description of
the action which the Borrower proposes to take with respect
thereto): (i) any Event of Default or any event, act or
condition which, with the passage of time or the giving of notice,
or both, would constitute an Event of Default, (ii) any
material litigation filed by or against the Borrower, or a material
investigation of, or material restrictions imposed on, the Borrower
by any governmental authority, (iii) any Reportable Event or
Prohibited Transaction with respect to any Employee Benefit Plan(s)
(as defined in the Employee Retirement Income Security Act of 1974,
as amended from time to time, “ERISA” ) or
(iv) any event which might result in a material adverse change
in the business, assets, operations, condition (financial or
otherwise) or results of operation of the Borrower.
FirstMerit
Corporation
December 30, 2008
Page 3
(d) The
Borrower will maintain, with financially sound and reputable
insurers, insurance with respect to its property and business
against such casualties and contingencies, of such types and in
such amounts, as is customary for established companies engaged in
the same or similar business and similarly situated; and shall,
upon the reasonable request of the Bank provide the Bank with
evidence of such insurance.
(e) The
Borrower will maintain books and records in accordance with GAAP
and give representatives of the Bank access thereto at all
reasonable times, including permission to examine, copy and make
abstracts from any of such books and records and such other
information as the Bank may from time to time reasonably request,
and the Borrower will make available to the Bank for examination
copies of any reports, statements and returns which the Borrower
may make to or file with any federal, state or local governmental
department, bureau or agency.
(f) The
Borrower will comply with all laws applicable to the Borrower and
to the operation of its business (including without limitation any
statute, ordinance, rule or regulation relating to employment
practices, pension benefits or environmental, occupational and
health standards and controls).
(g) The
Borrower will comply with the financial and other covenants
included in Exhibit “A” hereto.
6.
Representations and Warranties . To induce the Bank to
extend the Loan and upon the making of each advance to the Borrower
under the Line of Credit, the Borrower represents and warrants as
follows:
(a) The
Borrower has delivered or caused to be delivered to the Bank its
most recent balance sheet, income statement and statement of cash
flows (as applicable, the “Historical Financial
Statements” ). The Historical Financial Statements are
true, complete and accurate in all material respects and fairly
present the financial condition, assets and liabilities, whether
accrued, absolute, contingent or otherwise and the results of the
Borrower’s operations for the period specified therein. The
Historical Financial Statements have been prepared in accordance
with generally accepted accounting principles (
“GAAP” ) consistently applied from period to
period, subject in the case of interim statements to normal
year-end adjustments and to any comments and notes acceptable to
the Bank in its sole discretion.
(b) Since
the date of the most recent Financial Statements (as hereinafter
defined), the Borrower has not suffered any damage, destruction or
loss, and no event or condition has occurred or exists, which has
resulted or could reasonably result in a material adverse change in
its business, assets, operations, condition (financial or
otherwise) or results of operation.
(c) There
are no actions, suits, proceedings or governmental investigations
pending or, to the knowledge of the Borrower, threatened against
the Borrower, which could reasonably be expected to result in a
material adverse change in its business, assets, operations,
condition (financial or otherwise) or results of operations and
there is no basis known to the Borrower for any action,
FirstMerit
Corporation
December 30, 2008
Page 4
suit,
proceeding or investigation which could result in such a material
adverse change, other than as listed on Exhibit “B”
hereto.
(d) The
Borrower has filed all returns and reports that are required to be
filed by it in connection with any federal, state or local tax,
duty or charge levied, assessed or imposed upon the Borrower or its
property, including unemployment, social security and similar taxes
and all of such taxes have been either paid or adequate reserves of
the estimated amounts thereof or other provisionS has been made
therefor.
(e) The
Borrower is duly organized, validly existing and in good standing
under the laws of the state of its incorporation or organization
and has the power and authority to own and operate its assets and
to conduct its business as now or proposed to be carried on, and is
duly qualified, licensed and in good standing to do business in all
jurisdictions where its ownership of property or the nature of its
business requires such qualification or licensing.
(f) The
Borrower has full power and authority to enter into the
transactions provided for in this Letter Agreement and has been
duly authorized to do so by all necessary and appropriate action
and when executed and delivered by the Borrower, this Letter
Agreement and the other Loan Documents will constitute the legal,
valid and binding obligations of the Borrower, enforceable against
the Borrower in accordance with their terms.
(g) There
does not exist any default or violation by the Borrower of or under
any of the terms, conditions or obligations of: (i) its
organizational documents; (ii) any indenture, mortgage, deed
of trust, franchise, permit, contract, agreement, or other
instrument to which it is a party or by which it is bound; or
(iii) any law, regulation, ruling, order, injunction, decree,
condition or other requirement applicable to or imposed upon the
Borrower by any law or by any governmental authority, court or
agency; and the consummation of this Agreement and the transactions
set forth herein will not result in any such default or violation
or Event of Default.
(h) The
Borrower has good and marketable title to the assets reflected on
the most recent Financial Statements, free and clear of all liens
and encumbrances, except for (i) current taxes and assessments
not yet due and payable, (ii) assets disposed of by the
Borrower in the ordinary course of business since the date of the
most recent Financial Statements, and (iii) those liens or
encumbrances, if any, specified on Exhibit “B”
hereto.
(i) Each
employee benefit plan as to which the Borrower may have any
liability complies in all material respects with all applicable
provisions of ERISA, including minimum funding requirements, and
(i) no Prohibited Transaction (as defined under ERISA) has
occurred with respect to any such plan, (ii) no Reportable
Event (as defined under Section 4043 of ERISA) has occurred
with respect to any such plan which would cause the Pension Benefit
Guaranty Corporation to institute proceedings under
Section 4042 of ERISA, (iii) the Borrower has not
withdrawn from any such plan or initiated steps to do so, and
(iv) no steps have been taken to terminate any such
plan.
FirstMerit
Corporation
December 30, 2008
Page 5
(j) The
Borrower is in compliance, in all material respects, with all
Environmental Laws (as hereinafter defined), including, without
limitation, all Environmental Laws in jurisdictions in which the
Borrower owns or operates, or has owned or operated, a facility or
site, stores Collateral, arranges or has arranged for disposal or
treatment of hazardous substances, solid waste or other waste,
accepts or has accepted for transport any hazardous substances,
solid waste or other wastes or holds or has held any interest in
real property or otherwise. Except as otherwise disclosed on
Exhibit “B”, no litigation or proceeding arising under,
relating to or
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