REVOLVING CREDIT AND TERM LOAN
AGREEMENT
THIS
AGREEMENT, dated as of February 18, 2005, entered into by and among
INTERNATIONAL PLASTICS AND EQUIPMENT CORP., a Pennsylvania
corporation (“Borrower”)
AND
CITIZENS BANK OF PENNSYLVANIA, a
Pennsylvania banking organization (the
“Bank”);
RECITALS:
WHEREAS,
the Borrower has requested, and the Bank has agreed, subject to the
terms and conditions contained herein, to extend to the Borrower a
facility for the making of revolving credit loans in the maximum
principal amount of $3,500,000, a term loan in the original
principal amount of $1,500,000, a multi-draw term loan in the
maximum principal amount of $1,000,000, and a letter of credit
facility in the maximum principal amount of $1,800,000.
NOW,
THEREFORE, in consideration of the premises and of the mutual
covenants contained in this Agreement, and of the loans and
extensions of credit now or after the date of this Agreement made
to or for the benefit of the Borrower by the Bank, and intending to
be legally bound hereby, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.01
Certain Definitions . In addition to other words and terms
defined elsewhere in this Agreement, the following words and terms
have the following meanings, respectively, unless the context
otherwise clearly requires:
“Adjusted
EBITDA” means, as of the date of determination for any
period, Consolidated EBITDA for such period, less (i) non-financed
Capital Expenditures during such period, plus (ii) Lease
Obligations, less (iii) distributions, dividends and advances to
shareholders or Affiliates that are paid in cash, less (iv) taxes
actually paid during such period, all as determined in accordance
with GAAP.
“Affiliate”
means any person or entity which directly or indirectly controls,
or is controlled by, or is under common control with, a Borrower.
For each individual who is an Affiliate within the meaning of the
foregoing, the term “Affiliate” shall include any other
individual related to such Affiliate by consanguinity within the
third degree or in a step or adoptive relationship within such
third degree or related by affinity with such Affiliate or any such
individual, and any person directly or indirectly controlled by any
of the foregoing. The term “control” means the
possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a person or entity,
whether through the ownership of voting securities, by contract or
otherwise.
“Agreement”
means this Revolving Credit and Term Loan Agreement as the same may
be amended, modified, restated or supplemented from time to
time.
“Anti-Terrorism
Laws” shall mean any Laws relating to terrorism or money
laundering, including Executive Order No. 13224, the USA Patriot
Act, the Laws comprising or implementing the Bank Secrecy Act, and
the Laws administered by the United States Treasury
Department’s Office of Foreign Asset Control (as any of the
foregoing Laws may from time to time be amended, renewed, extended,
or replaced).
“Bank”
means Citizens Bank of Pennsylvania, with an office at 525 William
Penn Place, 29 th Floor, Pittsburgh, Pennsylvania
15219.
“Bank
Debt” means (i) all indebtedness, both principal and
interest, of the Borrower to the Bank now or after the date of this
Agreement evidenced by any Notes, including the Revolving Credit
Note and the Term Notes executed and delivered by the Borrower in
connection with this Agreement, (ii) all other debts, liabilities,
duties and obligations of the Borrower to the Bank now existing and
contracted or incurred after the date of this Agreement, whether
arising under or in connection with the Loan Documents or arising
under any other agreement, instrument or undertaking made by or for
the benefit of the Borrower to or for the benefit of the Bank and
whether direct or contingent, including, without limitation, all
reimbursement and other obligations arising under or with respect
to the Letter of Credit Facility, Hedging Contracts, Hedging
Obligations, Interest Rate Protection Agreements, Capitalized Lease
Obligations and letters of credit, (iii) all costs and expenses
incurred by the Bank in the collection of any of the indebtedness
described in this paragraph or in connection with the enforcement
of any of the duties and obligations of the Borrower to the Bank
described in this paragraph, including reasonable attorneys’
fees and legal expenses, and (iv) all future advances made by the
Bank for the maintenance, protection, preservation or enforcement
of, or realization upon, the Collateral or any portion thereof,
including advances for storage, transportation charges, taxes,
insurance, repairs and the like.
“Bankruptcy
Code” means 11 U.S.C. §101 et. seq. as the
same may be modified or amended from time to time.
2
“Base
Rate” means, for any day, with respect to Loans, a
fluctuating rate of interest per annum equal to the higher of (i)
the Federal Funds Rate for such day plus one half of one percent
(0.5%), or (ii) the rate which is publicly announced from time to
time by the Bank as being its so-called “prime rate”;
with each change in the Base Rate automatically, immediately, and
without notice changing the rate applicable to the Loan which is
calculated based upon the Base Rate. The Base Rate is not
necessarily the lowest rate of interest then available from the
Bank on fluctuating rate loans. Each change in any interest rate
provided for herein based upon the Base Rate resulting from a
change in the Federal Funds Rate or the “prime rate”
announced by the Bank shall take effect at the time of such change
in the Federal Funds Rate or the “prime rate” announced
by the Bank.
“Base
Rate Loans” means Loans that bear interest at or based upon
the Base Rate.
“ Base Rate Portion ” means at any time
the part, including the whole, of the unpaid principal amount of
the Loans bearing interest at such time under the Base Rate Option
as provided in Section 2.04(a) of this Agreement.
“Borrower”
means International Plastics and Equipment Corp., a Pennsylvania
corporation, with an address at 185 Northgate Circle, New Castle,
Pennsylvania 16105.
“Borrowing
Base” shall have the meaning given to that term in Section
2.01(a) of this Agreement.
“Borrowing
Base Certificate” shall have the meaning given to that term
in Section 5.01(f) of this Agreement.
“Business
Day” means any day other than a Saturday, Sunday, public
holiday under the laws of the Commonwealth of Pennsylvania or other
day on which the Bank is not open for business in Pittsburgh,
Pennsylvania.
“Capital
Expenditure” means any expenditure made or liability incurred
which is, in accordance with GAAP, treated as a capital expenditure
and not as an expense item for the year in which it was made or
incurred, as the case may be.
“Capitalized
Lease Obligations” means any amount payable with respect to
any lease of any tangible or intangible property (whether real,
personal or mixed), however denoted, which either (1) is required
by GAAP to be reflected as a liability on the face of the balance
sheet of the lessee, or (2) based on actual circumstances existing
and ascertainable either at the commencement of the term of such
lease or at any subsequent time at which any property becomes
subject thereto, can reasonably be anticipated to impose on such
lessee substantially the same economic risks and burdens, having
regard to such lessee’s obligations and the lessor’s
rights under the lease both during and at the termination of the
lease, as would be imposed on the lessee by any lease which is
required to be so reflected on the balance sheet of the lessee or
by the ownership of the leased property.
“Cash
Management Agreement” means any Cash Management Master
Agreement and Cash Sweep Terms and Conditions entered into whether
prior to or after the date of this Agreement by and between the
Bank, as lender and as a depository bank, and the Borrower, as
borrower and beneficial owner of certain depository accounts, as
the same may be amended, restated, supplemented or modified from
time to time.
3
“Closing
Date” means February 18, 2005, or such other date upon which
the parties may agree.
“Code”
means the Uniform Commercial Code as in effect on the date of this
Agreement and as amended from time to time, of the state or states
having jurisdiction with respect to all or any portion of the
collateral granted or assigned to the Bank from time to time under
or in connection with this Agreement.
“Consolidated
EBITDA” means, as of the date of determination, Consolidated
Net Income for such period, (i) plus interest expense and all
provisions for taxes of the Borrower and the Guarantor, (ii) plus
provisions for depreciation and amortization that were deducted
from Consolidated Net Income, (iii) plus (or less) non-cash debits
(or credits) to Consolidated Net Income if any, (iv) plus (or less)
gain (or loss) on sales of assets other than sales of inventory in
the ordinary course of business of the Borrower and the Guarantor,
all as consolidated and determined in accordance with
GAAP.
“Consolidated
Fixed Charges” means, as of the date of determination, for
any period, the sum of (i) Interest Expense and taxes actually paid
during such period, plus (ii) scheduled principal payments on, and
fees paid pursuant to, Debt which constitutes long term
indebtedness during such period, plus (iii) Lease Obligations, all
as consolidated and determined in accordance with GAAP.
“Consolidated
Fixed Charge Coverage Ratio” means for any period as of the
date of determination, the ratio of (a) Adjusted EBITDA for such
period to (b) Consolidated Fixed Charges for such period, as
calculated on a rolling four quarter basis and as determined in
accordance with GAAP.
“Consolidated
Net Income” for any period, with respect to the Borrower and
the Guarantor shall mean the net earnings (or loss) after taxes of
the Guarantor, the Borrower and their consolidated Subsidiaries for
such period determined on a consolidated basis in accordance with
GAAP.
“Consolidated
Tangible Net Worth” means, as of the date of determination,
the tangible net worth of the Borrower and the Guarantor, as
consolidated and determined in accordance with GAAP; provided,
however, that in any event, goodwill, notes and accounts receivable
from officers, directors, shareholders and Affiliates and any other
items deemed by the Bank to be intangible in its sole discretion
shall be excluded.
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“Debt”
means (i) indebtedness or liability for borrowed money, or for the
deferred purchase price of property or services (including trade
obligations) whether such indebtedness or liability is matured or
unmatured, liquidated or unliquidated, direct or contingent, and
joint or several; (ii) Capitalized Lease Obligations; (iii) current
liabilities in respect of unfunded vested benefits under any Plan;
(iv) obligations under letters of credit; (v) all guaranties,
endorsements (other than for collection or deposit in the ordinary
course of business), and other contingent obligations to purchase,
to provide funds for payment, to supply funds to invest in any
person or entity, or otherwise to assure a creditor against loss;
and (vi) obligations secured by any lien on property owned by such
person or entity, whether or not the obligations have been assumed,
provided, that in no event shall “Debt” include the
value of property that is located at a facility of the Borrower but
that is owned by a third party.
“ERISA”
means the Employee Retirement Income Security Act of 1974 as in
effect as of the date of this Agreement and as amended from time to
time in the future.
“Event
of Default” means any of the Events of Default described in
Section 7.01 of this Agreement.
“ Executive Order No. 13224 ” shall mean
the Executive Order No. 13224 on Terrorist Financing, effective
September 24, 2001, as the same has been, or shall hereafter be,
renewed, extended, amended or replaced.
“Expiration
Date” means February 16, 2006, unless extended in writing by
the Bank in its sole and absolute discretion.
“Federal
Funds Rate” means, for any day, the rate per annum
(rounding upwards, if necessary, to the nearest 1/100 of 1%) equal
to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal
Reserve Bank of Cleveland on the Business Day next succeeding such
day, provided that (a) if the day for which such rate is to
be determined is not a Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next
preceding Business Day as so published on the next succeeding
Business Day and (b) if such rate is not so published for any
Business Day, the Federal Funds Rate for such Business Day shall be
the average rate on such transactions as determined by the
Bank.
“GAAP”
means generally accepted accounting principles (as such principles
may change from time to time) applied on a consistent basis (except
for changes in application in which the Borrower’s
independent certified public accountants concur).
“Guaranty”
means the Guaranty and Suretyship Agreement executed and delivered
by the Guarantor to the Bank on the Closing Date, as the same may
be amended, modified or supplemented from time to time.
“Guarantor”
means IPEC Holdings, Inc., a Nevada corporation, with an address of
185 Northgate Circle, New Castle, Pennsylvania 16105.
“ Hedging Contracts ” means interest rate
swap agreements, interest rate cap agreements and interest rate
collar agreements, currency exchange agreements or any other
agreements or arrangements entered into between the Borrower and
the Bank and designed to protect the Borrower against fluctuations
in interest rates or currency exchange rates.
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“ Hedging Obligations ” means, with
respect to the Borrower, all liabilities of the Borrower to the
Bank under Hedging Contracts.
“Interest
Expense” means, as of the date of determination, interest
expense of the Borrower and the Guarantor for such period, as
consolidated and determined in accordance with GAAP.
“Interest
Payment Date” means (i) relative to any LIBOR Rate Loan, the
last Business Day of a Rate Period, provided, however, that if a
Rate Period is longer than three (3) months, on the last day of the
third month of such Rate Period and, thereafter, on the last day of
such Rate Period, and, (ii) relative to any Base Rate Loan or Libor
Advantage Rate Loan, the last Business Day of each month, in
arrears.
“Interest
Rate Protection Agreement ” shall mean, for any
Person, an interest rate swap, cap or collar agreement or similar
arrangement between such Person and one or more financial
institutions providing for the transfer or mitigation of interest
risks either generally or under specific contingencies.
“Landlord’s
Waivers” means Landlord’s Waivers in form and substance
satisfactory to the Bank that are executed and delivered by the
owners of the New Castle, Pennsylvania and Brewton, Alabama
facilities leased by the Borrower and at which the Borrower
maintains inventory and/or equipment. A
“Law”
means any law (including common law), constitution, statute,
treaty, regulation, rule, ordinance, order, injunction, writ,
decree or award of any Official Body.
“Lease
Obligation” means an obligation of a lessee under a lease of
any tangible or intangible property (whether real, personal or
mixed), including without limitation, with respect to any period
under any such lease, the aggregate amounts payable by such lessee
to or on behalf of the lessor for such period, including, without
limitation, property taxes, insurance, interest and amortized
charges which such lessee is required to pay pursuant to such
lease. Whenever it is necessary to determine the amount of Lease
Obligations for any period with respect to which any of the rentals
under the relevant lease are not definitely determinable by the
terms of the lease, all such rentals will be estimated in a
reasonable amount for such period.
“Lessor”
means CRICIPECAL LLC, a Delaware limited liability company, the
lessor of Borrower’s facilities located in Brewton, Alabama
and CRICIPECPA, L.P., a Delaware limited partnership, the lessor of
Borrower’s facilities located in New Castle,
Pennsylvania.
“Letter
of Credit” has the meaning assigned to that term in Section
2.22 of this Agreement.
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“Libor
Advantage Rate” for any day means the one (1) month Libor
Rate selected by the Bank, in its sole discretion, on the first
London Banking Day of each calendar month to be in effect for such
calendar month as its one-month Libor Advantage Rate
product.
“ Libor Advantage Rate Loan ” means
any loan or advance the rate of interest applicable to which is
based upon the LIBOR Advantage Rate.
“Libor
Advantage Rate Portion” means at any time the part, including
the whole, of the unpaid principal amount of the Loans bearing
interest at such time under the LIBOR Advantage Rate Option as
provided in Section 2.04(a) of this Agreement.
“LIBOR
Lending Rate” means, relative to any LIBOR Rate Loan to be
made, continued or maintained as, or converted into, a LIBOR Rate
Loan for any Rate Period, a rate per annum determined pursuant to
the following formula:
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LIBOR Lending
Rate
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=
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LIBOR Rate
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(1.0
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– LIBOR Reserve
Percentage)
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“LIBOR
Rate” means relative to any Rate Period for LIBOR Rate
Loans, the offered rate for deposits of U.S. Dollars in an amount
approximately equal to the amount of the requested LIBOR Rate Loan
for a term coextensive with the designated Rate Period which the
British Bankers’ Association fixes as its LIBOR rate and
which appears on Dow Jones Market Service (formerly known as
Telerate) display page 3750 as of 11:00 a.m. London time on the day
which is two London Banking Days prior to the beginning of such
Rate Period.
“ LIBOR Rate Loan ” means any loan
or advance the rate of interest applicable to which is based upon
the LIBOR Rate.
“ LIBOR Rate Loan Prepayment Fee ” shall
have the meaning ascribed to such term in Section 2.15(b)
hereof.
“ LIBOR Rate Portion ” means at any time
the part, including the whole, of the unpaid principal amount of
the Loans bearing interest at such time under the LIBOR Rate Option
as provided in Section 2.04(a) of this Agreement.
“
LIBOR Reserve Percentage
” means, relative to any day of any Rate Period
for LIBOR Rate Loans, the maximum aggregate (without duplication)
of the rates (expressed as a decimal fraction) of reserve
requirements (including all basic, emergency, supplemental,
marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve
requirements) under any regulations of the Board of Governors of
the Federal Reserve System (the “Board”) or other
governmental authority having jurisdiction with respect thereto as
issued from time to time and then applicable to assets or
liabilities consisting of “Eurocurrency Liabilities”,
as currently defined in Regulation D of the Board, having a term
approximately equal or comparable to such Rate Period.
“Lien”
means any mortgage, deed of trust, pledge, lien, security interest,
charge or other encumbrance or security arrangement of any nature,
including, but not limited to, any conditional sale or title
retention arrangement, and any assignment, deposit arrangement or
lease intended as, or having the effect of, security.
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“Loan
Document” or “Loan Documents” means, singularly
or collectively as the context may require, (i) this Agreement,
(ii) the Revolving Credit Note, (iii) the Term Loan Notes, (iv) the
Security Agreement, (v) the Guaranty, (vi) the UCC-1 financing
statements filed in accordance with the Security Agreement, (vii)
the Landlord’s Waivers, and any and all other documents,
instruments, certificates and agreements executed and delivered in
connection with this Agreement, as any of them may be amended,
modified, extended or supplemented from time to time.
“Loan”
or “Loans” means the Revolving Credit Loans, the Term
Loan, the Multi-Draw Term Loan and any other loan or loans made by
the Bank to the Borrower under this Agreement.
“London
Banking Day” means a day for dealing in deposits in United
States dollars by and among banks in the London interbank
market.
“Multi-Draw
Term Loan” has the meaning assigned to that term in Section
2.03(a) of this Agreement.
“Multi-Draw
Term Note” means the revolving credit note of the Borrower
executed and delivered pursuant to Section 2.03(b) of this
Agreement, together with all extensions, renewals, refinancings or
refundings in whole or in part.
“Note”
or “Notes” means the Revolving Credit Note, the Term
Loan Notes and any other note or notes of the Borrower executed and
delivered pursuant to this Agreement, together with all extensions,
renewals, refinancings or refundings in whole or in
part.
“Notice
of Borrowing” has the meaning set forth in Section 2.01(c) of
this Agreement.
“Office”,
when used in connection with the Bank, means its office located at
525 William Penn Place, 29 th Floor, Pittsburgh,
Pennsylvania 15219 or such other office of the Bank as the Bank may
designate in writing from time to time.
“Official
Body” means any government or political subdivision or any
agency, authority, bureau, central bank, commission, department or
instrumentality of either, or any court, tribunal, grand jury or
arbitrator, in each case whether foreign or domestic.
“Plan”
means any deferred compensation program, including both single and
multi-employer plans, subject to Title IV of ERISA and established
and maintained for employees of any of the Guarantor, the Borrower
or any Subsidiary or any controlled group of trades or businesses
under common control as defined respectively in Sections 1563 and
414(c) of the Internal Revenue Code of 1986, as amended, of which
any of the Guarantor, the Borrower or any Subsidiary is or becomes
a part.
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“ Portion ” means a Base Rate Portion, a
LIBOR Rate Portion or a Libor Advantage Rate Portion, as the case
may be.
“Potential
Default” means any event or condition which with notice or
the passage of time would constitute an Event of
Default.
“Qualified
Accounts” means an account receivable, net of any
prepayments, progress payments, deposits and retentions, owing to
the Borrower which met the specifications established from time to
time by the Bank, in its sole discretion, at the time it came into
existence and continues to meet such specifications until it is
collected in full. As of the date of this Agreement, an account
receivable, to be a Qualified Account, must meet the following
specifications at the time it comes into existence and continue to
meet such specifications until it is collected in full:
(a) The
account is not more than the sooner of (i) ninety (90) days from
the date of the invoice thereof, or (ii) sixty (60) days from the
due date thereof, unless otherwise agreed to in writing by the
Bank;
(b) The
account arose from the performance of services or an outright sale
of goods by the Borrower in the ordinary course of the
Borrower’s business and such goods have been shipped, or
services provided, to the account debtor and the Borrower has
possession of, or has delivered to the Bank, in the case of goods,
shipping and delivery receipts evidencing such shipment and, in the
case of services, receipts or other evidence satisfactory to the
Bank that such services have been provided;
(c) The
account is not subject to any prior assignment, claim, lien, or
security interest, and the Borrower will not make any further
assignment of the account or create any further security interest
in the account, nor permit its rights in the account to be reached
by attachment, levy, garnishment or other judicial
process;
(d) The
account is not subject to set-off, credit, allowance or adjustment
by the account debtor, except discounts allowed for prompt payment,
and the account debtor has not complained as to his liability on
the account and has not returned, or retained the right to return,
any of the goods from the sale of which the account
arose;
(e) The
account does not arise from a sale of goods to a federal, state or
local governmental authority or from a sale of goods that are
delivered or to be delivered outside the United States of America
or Canada or from a sale of goods to an account debtor domiciled
outside of the United States of America or Canada unless the
Borrower has arranged letter of credit facilities, credit insurance
or other payment support satisfactory to the Bank, in its sole
discretion;
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(f) (1)
The account arose in the ordinary course of the Borrower’s
business and did not arise from the performance of services or a
sale of goods to a supplier, an employee or an Affiliate of the
Borrower, and (2) the account does not constitute a progress
billing which, when taken together with all other progress billings
that are included in Qualified Accounts, exceeds $25,000 in the
aggregate;
(g) The
account does not constitute a finance charge, a service charge or
lease receivable;
(h) No
notice of bankruptcy, insolvency or material adverse change of the
account debtor has been received by or is known to the
Borrower;
(i) The
Bank has not notified the Borrower that the Bank has determined
that, in its reasonable discretion, the account or account debtor
is unsatisfactory;
(j) The
account is not payable by an account debtor more than 50% of whose
accounts have remained unpaid for more than ninety (90) days from
the invoice date;
(k) Except
as provided in subpart (l) below, the account is not payable by an
account debtor whose accounts are greater than 25% of the aggregate
of all Qualified Accounts; and
(l) With
respect to accounts owing from Dean Foods and its Affiliates
(“Dean Foods Account Debtors”), “Qualified
Accounts” shall exclude all accounts owing from the Dean
Foods Account Debtors that are in excess of 50% of the aggregate of
all Qualified Accounts.
“Qualified
Inventory” means inventory which is owned by the Borrower and
held for sale; all of which is subject to the Bank’s
perfected first priority lien and security interest as provided in
the Security Agreement and which is not subject to a prior security
interest held by a third party and which is not any of the
Borrower’s (i) inventory-in-transit or inventories not
otherwise in the Borrower’s possession at one of the
locations listed on Schedule 5(d) of the Security Agreement
and as to which the Borrower has delivered to the Bank a
Landlord’s Waiver or, with respect to inventory located at
any other location within the United States, Borrower has provided
evidence satisfactory to the Bank that such inventory is covered by
insurance required by the terms of this Agreement; (ii) inventory
consisting of parts and supplies; (iii) inventory consisting of
custom packaging, shipping materials or supplies; (iv) inventory
determined by the Bank or the Borrower to be not in good condition,
slow-moving, obsolete or not currently usable or salable in the
ordinary course of the Borrower’s business; (v) inventory
consisting of finished goods which do not meet the specifications
of the purchase order for which such inventory was produced; (vi)
inventory consisting of finished goods held pursuant to a
consignment arrangement; (vii) inventory with respect to which the
Bank does not have a first and valid fully perfected security
interest; (viii) inventory produced in violation of the Fair Labor
Standards Act and subject to the “hot goods” provision
contained in Title 29 U.S.C. Section 215(a)(1); (ix) inventory not
in compliance with any warranty made in this Agreement, or (x) work
in process as indentified as such on Borrower’s financial
statements and in accordance with GAAP. Qualified Inventory shall
be valued, for purposes of this Agreement, at the lower of cost or
market value.
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“ Rate Option ” , “
Rate Options ” , “ Rate ” or
“ Rates ” shall have the meaning ascribed
to such terms in Section 2.04(a) hereof.
“ Rate Period ” means relative to any
LIBOR Rate Loans:
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(i)
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initially, the
period beginning on (and including) the date on which such LIBOR
Rate Loan is made or continued as, or converted into, a LIBOR Rate
Loan pursuant to Section 2.01(c) or 2.04 and ending
on (but excluding) the day which numerically corresponds to such
date one month thereafter (or, if such month has no numerically
corresponding day, on the last Business Day of such month), in each
case as the Borrower may select in its notice pursuant to
Section 2.01(c) or 2.04 ; and
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(ii)
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thereafter,
each period commencing on the last day of the next preceding Rate
Period applicable to such LIBOR Rate Loan and ending one month
thereafter; provided, however, that:
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(a)
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the Borrower
shall not be permitted to select Rate Periods to be in effect at
any one time which have expiration dates occurring on more than
three (3) different dates;
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(b)
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Rate Periods
commencing on the same date for LIBOR Rate Loans comprising part of
the same advance under this agreement shall be of the same
duration;
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(c)
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if such Rate
Period would otherwise end on a day which is not a Business Day,
such Rate Period shall end on the next following Business Day
unless such day falls in the next calendar month, in which case
such Rate Period shall end on the first preceding Business Day;
and
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(a)
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no Rate Period
may end later than the termination of this Agreement.
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“Rate
Segment” of the LIBOR Rate Portion at any time shall be the
entire principal amount of such Portion to which at such time there
is applicable a particular Rate Period beginning on a particular
day and ending on another particular day. (By definition, each
Portion is at all times composed of an integral number of discrete
Rate Segments, each corresponding to a particular Rate Period, and
the sum of the principal amounts of all Rate Segments of a
particular portion at any time equals the principal amount of such
Portion at such time.)
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“Responsible
Officer” means the Chief Executive Officer, President, any
Vice President, Chief Financial Officer, Treasurer or Secretary of
the Borrower or any other officer of the Borrower designated to be
a Responsible Officer by any of the foregoing corporate
officers.
“Revolving
Credit Commitment” has the meaning assigned to that term in
Section 2.01(a) of this Agreement.
“Revolving
Credit Loans” has the meaning assigned to that term in
Section 2.01(a) of this Agreement.
“Revolving
Credit Note” means the revolving credit note of the Borrower
executed and delivered pursuant to Section 2.01(b) of this
Agreement, together with all extensions, renewals, refinancings or
refundings in whole or in part.
“Security
Agreement” means that certain Security Agreement dated as of
the date of this Agreement executed and delivered by the Borrower
to the Bank, as the same may be amended, modified or supplemented
from time to time.
“Standard
Notice” means an irrevocable notice provided to the Bank on a
Business Day which is:
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(i)
on the same Business Day in the case of selection of, conversion to
or renewal of the Base Rate Option or the Libor Advantage Rate
Option or prepayment of any Base Rate Portion or Libor Advantage
Rate Portion; and
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(ii)
at least two London Business Days in advance in the case of
selection of, conversion to or renewal of the LIBOR Rate Option or
prepayment of any Libor Portion.
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Standard Notice must be provided
no later than 11:00 a.m., Pittsburgh time, on the last day
permitted for such notice.
“Subsidiary”
of a Borrower at any time means any corporation of which a majority
of the outstanding capital stock entitled to vote for the election
of directors is at such time owned by the Borrower and/or one or
more Subsidiaries.
“Term
Loan” has the meaning assigned to that term in Section
2.02(a) of this Agreement.
“Term
Loan Notes” means the Term Note and the Multi-Draw Term
Note.
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“Term
Note” means the revolving credit note of the Borrower
executed and delivered pursuant to Section 2.03(b) of this
Agreement, together with all extensions, renewals, refinancings or
refundings in whole or in part.
“USA
Patriot Act” shall mean the Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001, Public Law 107-56, as the same has been, or
shall hereafter be, renewed, extended, amended or
replaced.
ARTICLE II
THE CREDITS
2.01 Revolving Credit Loans .
(a)
Revolving Credit Loans . Subject to the terms and
conditions and relying upon the representations and warranties set
forth in this Agreement, the Security Agreement and the other Loan
Documents, the Bank agrees (such agreement is sometimes referred to
in this Agreement as the “Revolving Credit Commitment”)
to make loans (the “Revolving Credit Loans”) to the
Borrower at any time or from time to time on or after the Closing
Date and to and including the day immediately preceding the
Expiration Date in an aggregate principal amount not exceeding at
any one time outstanding the lesser of (i) $3,500,000, or (ii) the
sum equal to (x) eighty-five percent (85%) of the aggregate gross
amount of Qualified Accounts, plus (y) fifty percent (50%) of the
aggregate gross amount of Qualified Inventory (the aggregate amount
of the sum determined by adding subpart (x) and (y) together shall
be referred to as the “Borrowing Base”). If at any time
the sum of all Revolving Credit Loans outstanding exceeds the
Borrowing Base, the Borrower shall immediately repay to the Bank,
in funds immediately available, the amount of such excess together
with all accrued interest on the amount of such repayment. Within
the limits of time and amount set forth in this Section 2.01, and
subject to the provisions of this Agreement, including, without
limitation, the Bank’s right to demand repayment of the
Revolving Credit Loans upon the occurrence of an Event of Default,
the Borrower may borrow, repay and reborrow under this Section
2.01. The Borrower shall use the proceeds of the Revolving Credit
Loans for general working capital and general corporate
purposes.
(b)
Revolving Credit Note . The obligations of the
Borrower to repay the unpaid principal amount of the Revolving
Credit Loans made to the Borrower by the Bank and to pay interest
on the unpaid principal amount will be evidenced in part by the
Revolving Credit Note of the Borrower dated the date of this
Agreement in substantially the form attached as Exhibit
“A” to this Agreement, with the blanks
appropriately filled. The executed Revolving Credit Note will be
delivered by the Borrower to the Bank on the Closing
Date.
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(c)
Making of Revolving Credit Loans . On any Business Day
when the Borrower desires that the Bank make a Revolving Credit
Loan other than pursuant to a Cash Management Agreement, if any,
the Borrower shall provide to the Bank, at its Office, irrevocable
notice of the requested Revolving Credit Loan. Each notice (a
“ Notice of Borrowing ” ) required
pursuant to this Section may be given in writing or by telephonic
request and shall be given no later than 2:00 p.m., prevailing
Pittsburgh time, on the day such Loan is to be made, and if in
writing, shall be signed by a Responsible Officer or other officer
or employee of the Borrower which has been designated by a
Responsible Officer as having the authority to deliver a Notice of
Borrowing, and, in any event, shall include: (i) the date
(which shall be a Business Day) on which the Revolving Credit Loan
is to be made; (ii) the principal amount of the Revolving Credit
Loan; and (iii), if then due, the Borrowing Base Certificate
required pursuant to Section 5.01(f) of this Agreement. Each Notice
of Borrowing shall be irrevocable and shall be sent to the Bank by
(1) facsimile (which shall be effective when received), or by (2)
telephone (which shall be effective when telephoned), or by (3)
hand delivery, first class or first class express mail (which shall
be effective when received), in all cases with charges prepaid.
Subject to the terms and conditions of this Agreement, upon the
Bank’s review, approval and processing of the required Notice
of Borrowing and any other information requested by the Bank, the
Bank shall make the proceeds of the Revolving Credit Loan available
to the Borrower at the Bank’s Office on the date specified in
the Notice of Borrowing, in funds immediately available at the
Office. Notwithstanding the foregoing, any Revolving Credit Loan
made by the Bank in good faith reliance upon a telephonic request
shall be a Revolving Credit Loan under this Agreement upon
disbursement, provided that the Bank shall have the right to
request that the Borrower confirm any telephonic request for a
Revolving Credit Loan in writing. The Borrower and the Bank may
enter into a Cash Management Agreement. If the Borrower and the
Bank enter into a Cash Management Agreement, such Cash Management
Agreement may provide that all cash receipts of the Borrower are to
be deposited into a single deposit account and are to be applied to
checks and other amounts presented for payment against certain of
the Borrower’s checking and disbursement accounts maintained
with the Bank and, to the extent of any excess funds, the
outstanding principal balance of the Revolving Credit Loans on a
daily basis, as more particularly described in any such Cash
Management Agreement. In addition, a Cash Management Agreement may
provide that to the extent that cash receipts in such accounts of
the Borrower with the Bank are less than amounts presented for
payment against such accounts of the Borrower with the Bank,
Revolving Credit Loans shall be made to fund any such shortfall on
a daily basis. The Borrower and the Bank agree that any loans,
advances and fundings made by the Bank under a Cash Management
Agreement, if any, shall be Revolving Credit Loans under this
Section 2.01 and that fundings, notices of advances, payments and
prepayments of Revolving Credit Loans made pursuant to the Cash
Management Agreement shall be controlled by such Cash Management
Agreement. In addition, notwithstanding anything to the contrary
contained herein or in any Cash Management Agreement, Revolving
Credit Loans made pursuant to a Cash Management Agreement shall
bear interest at the Rates applicable to Revolving Credit Loans set
forth in Section 2.04 of this Agreement. Nothing contained herein
or in any Cash Management Agreement shall permit the Borrower to
request or obligate the Bank to make any Revolving Credit Loans in
an amount in excess of the then available Revolving Credit
Commitment.
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2.02 Term
Loan .
(a)
The Term Loan . Subject to the terms and conditions and
relying upon the representations and warranties set forth in this
Agreement, the Security Agreement and the other Loan Documents, the
Bank agrees to make a term loan (the “Term Loan”) to
Borrower on or as of the Closing Date in a principal amount of One
Million Five Hundred Thousand Dollars ($1,500,000) (such agreement
to make the Term Loan shall sometimes be referred to in this
Agreement as the “Term Loan Commitment”). The proceeds
of the Term Loan shall be used by Borrower to refinance existing
Debt of the Borrower payable to Sky Bank.
(b)
Term Note . The obligations of Borrower to repay the unpaid
principal amount of the Term Loan made to Borrower by the Bank and
to pay interest on the unpaid principal amount shall be evidenced
in part by the Term Note of Borrower dated the Closing Date in
substantially the form attached as Exhibit “B”
to this Agreement, with the blanks appropriately filled. The
executed Term Note shall be delivered by Borrower to the Bank on
the Closing Date.
(c)
Payments of Principal and Maturity . Commencing on March 31,
2005 and continuing on the last day of each month thereafter for
fifty-nine (59) consecutive months, through and including January
31, 2010, Borrower shall make equal consecutive monthly payments of
principal, each in the amount equal to Twenty-Five Thousand Dollars
($25,000.00), together with interest on the outstanding principal
balance of the Term Loan at the rate or rates of interest then in
effect and applicable to the Term Loan pursuant to Section
2.04 of this Agreement. If not sooner paid, all unpaid
principal, accrued interest and all other sums and costs incurred
by the Bank in connection with the Term Loan, the Term Note or the
making of the Term Loan, shall be due and payable on February 28,
2010, without notice, presentment or demand.
2.03 Multi-Draw
Term Loan .
(a)
The Multi-Draw Term Loan . Subject to the terms and
conditions and relying upon the representations and warranties set
forth in this Agreement, the Security Agreement and the other Loan
Documents, the Bank agrees to make a multi-draw term loan (the
“Multi-Draw Term Loan”) to the Borrower in a maximum
principal amount of One Million Dollars ($1,000,000) (such
agreement to make the Multi-Draw Term Loan shall sometimes be
referred to in this Agreement as the “Multi-Draw Term Loan
Commitment”). The proceeds of the Multi-Draw Term Loan shall
be used by the Borrower to purchase equipment for use in the
business of the Borrower. The amount of each advance of proceeds of
the Multi-Draw Term Loan shall not exceed 100% of the invoiced cost
of equipment that is the subject of the advance of proceeds of the
Multi-Draw Term Loan. The Multi-Draw Term Loan is a non-revolving
loan and once borrowed and repaid, it may not be
reborrowed.
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(b)
Multi-Draw Term Note . The obligations of the Borrower to
repay the unpaid principal amount of the Multi-Draw Term Loan made
to Borrowers by the Bank and to pay interest on the unpaid
principal amount shall be evidenced in part by the Multi-Draw Term
Note of the Borrower dated the Closing Date in substantially the
form attached as Exhibit “C” to this Agreement,
with the blanks appropriately filled. The executed Multi-Draw Term
Note shall be delivered by the Borrower to the Bank on the Closing
Date.
(c)
Making of Advances of Proceeds of the Multi-Draw Term Loan .
Advances of proceeds of the Multi-Draw Term Loan may only be made
until February 28, 2006 (the “Draw Down Period”).
Thereafter, the Bank shall have no obligation to advance any
proceeds of the Multi-Draw Term Loan, regardless of whether the
Borrower complies with all other conditions to an advance of
proceeds of the Multi-Draw Term Loan. At least three (3) Business
Days prior to the date upon which the Borrower desires that the
Bank make an advance of proceeds of the Multi-Draw Term Loan during
the Draw Down Period, the Borrower shall provide to the Bank, at
its Office, irrevocable notice of the requested advance of proceeds
of the Multi-Draw Term Loan (a “Request for Term Loan
Advance”). Each Request for Term Loan Advance shall be given
in writing and shall be given no later than 11:00 a.m., Pittsburgh
time on the day that is at least three (3) Business Days prior to
the date upon which such advance of proceeds of the Multi-Draw Term
Loan is to be made and shall be signed by a Responsible Officer or
other officer or employee of the Borrower that has been designated
by a Responsible Officer as having the authority to deliver a
Request for Term Loan Advance and, in any event, shall include: (i)
the date (which shall be a Business Day) on which the Multi-Draw
Term Loan advance is to be made; (ii) the principal amount of the
Multi-Draw Term Loan advance requested, which shall not be in
excess of 100% of the cost of the equipment that is the subject of
the Request for Term Loan Advance; (iii) invoices and receipts
supporting costs of equipment that has been purchased by the
Borrower for use in its business and that have not been the subject
of a previous Request for Term Loan Advance. Each Request for Term
Loan Advance shall be irrevocable and shall be sent to the Bank by
(1) facsimile (which shall be effective when received), or by (2)
hand delivery, first class or first class express mail (which shall
be effective when received). Subject to the terms and conditions of
this Agreement, upon the Bank’s review, approval and
processing of the required Request for Term Loan Advance and
supporting information and any other information requested by the
Bank, the Bank shall make the proceeds of the Multi-Draw Term Loan
available to the Borrower at the Bank’s Office, in
immediately available funds. In no event shall the Borrower submit
a Request for Term Loan Advance more frequently than once each
calendar month or after the expiration of the Draw Down
Period.
(d)
Payments of Principal and Maturity . Commencing on March 31,
2005 and on the last day of each month thereafter through and
including February 28, 2006, the Borrower shall make monthly
payments of interest only on the outstanding principal balance of
the Multi-Draw Term Loan at the rate or rates of interest then in
effect and applicable to the Multi-Draw Term Loan pursuant to
Section 2.04 of this Agreement. Commencing on March 31, 2006
and continuing on the last day of each month thereafter for
fifty-nine (59) consecutive months through and including January
31, 2011, the Borrower shall make equal consecutive monthly
payments of principal, each in the amount equal to one/sixtieth
(1/60 th ) of the principal amount of the Multi-Draw
Term Loan that is outstanding on March 1, 2006, together with
interest on the outstanding principal balance of the Multi-Draw
Term Loan at the rate or rates of interest then in effect and
applicable to the Multi-Draw Term Loan pursuant to Section
2.04 of this Agreement. Notwithstanding anything to the
contrary contained herein, if not sooner paid, all unpaid
principal, accrued interest and all other sums and costs incurred
by the Bank pursuant to the Multi-Draw Term Loan, the Multi-Draw
Term Note or the making of the Multi-Draw Term Loan, shall be due
and payable on February 28, 2011, without notice, presentment or
demand.
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2.04 Interest
Rates .
(a)
Interest Rates . The unpaid principal amount of the Loans
shall bear interest for each day until due at a fluctuating rate
per year (computed for the actual number of days elapsed on the
basis of a year of 360 days) equal to one or more bases selected by
Borrower from among the interest rate options set forth below
(collectively, the “Rate” or “Rates” or
“Interest Rate Option” or “Interest Rate
Options”).
Available Interest Rate Options
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Base Rate
Option : The Base Rate
Portion of the Loans shall bear interest at a rate per annum for
each day equal to the Base Rate for such day less 50 basis
points, such interest rate to change automatically from time to
time effective as of the effective date of each change in the Prime
Rate and/or the Federal Funds Rate. The Base Rate Option shall be
available with respect to all of the Loans. B
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Libor
Advantage Rate Option : The Libor Advantage Rate Portion of the
Revolving Credit Loans and the Multi-Draw Term Loan during the Draw
Down Period and all Revolving Credit Loans which are made pursuant
to a Cash Management Agreement shall bear interest for each day
equal to the Libor Advantage Rate for such day plus 150
basis points. The Libor Advantage Rate shall be available only with
respect to the Revolving Credit Loans and the Multi-Draw Term Loan
during the Draw Down Period.
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LIBOR Rate
Option : Each
Rate Segment of the LIBOR Rate Portion of the Loans shall bear
interest for each day equal to the LIBOR Lending Rate for such Rate
Segment for such day plus 150 basis points. The LIBOR Rate
Option shall be available with respect to all of the
Loans.
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Notwithstanding anything
contained in this Agreement to the contrary, prepayment of any
Portion bearing interest at the LIBOR Rate Option shall not be
permitted during a Rate Period or shall be subject to payment of a
prepayment fee as set forth in Section 2.15 hereof.
(b)
Interest After Maturity . After the principal amount of any
part of the Loans shall have become due (at maturity, by
acceleration after the occurrence of an Event of Default or
otherwise), as compensation to the Bank for the increased cost of
administering the Loans, the Loans will bear interest for each day
until paid (before and after judgment) at a rate per year (computed
for the actual number of days elapsed on the basis of a year of 360
days) which will be two percent (2%) above the then current Rate
which is in effect, such interest rate to change automatically from
time to time effective as of the effective date of each change in
the Rate which is in effect.
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(c)
Usury . In the event the rates of interest provided for in
subsections (a) and (b) above or either of them are finally
determined by any Official Body to exceed the maximum rate of
interest permitted by applicable usury or similar Laws, their or
its application will be suspended and there will be charged instead
the maximum rate of interest permitted by such Laws. Any interest
which has been collected by the Bank in excess of the maximum rate
of interest permitted by applicable usury or similar Laws prior to
the suspension of such Rates shall be applied to the principal
balance of the Loans.
(d)
Computation of Interest . In computing interest on any Loan,
the date of the making of the Loan or the first day of a Rate
Period, as the case may be, shall be included and the date of
payment or the expiration date of a Rate Period, as the case may
be, shall be excluded; provided , that if a Loan is repaid
on the same day on which it is made, one day’s interest shall
be paid on that Loan.
2.05
Amounts . Every selection of, conversion to or renewal of a
Portion as to which the LIBOR Rate Option is applicable shall be in
an aggregate minimum principal amount of $500,000 and integral
multiples of $100,000.
2.06
Selection, Conversion or Renewal of Rate Options
.
(a)
Selection of Interest Rate Option . Subject to the other
provisions hereof, the Borrower may select any Interest Rate Option
to apply to the Loans if the Interest Rate Option is available for
the Loan, as provided in Section 2.04 of this Agreement. Subject to
the other provisions hereof, the Borrower may convert any part of
the unpaid principal amount of the Loans from any Interest Rate
Option to any other Interest Rate Option and may renew the LIBOR
Rate Option as to any Rate Segment: (a) at any time with respect to
conversion from the Base Rate Option or Libor Advantage Rate Option
to any other Interest Rate Option and (b) at the expiration of any
Rate Period with respect to conversion from or renewals of the
LIBOR Rate Option as to the Rate Segment corresponding to such
expiring Rate Period. Whenever the Borrower desires to select,
convert or renew the LIBOR Rate Option, the Borrower shall give the
Bank Standard Notice thereof (which shall be irrevocable, except as
provided in Section 2.06 of this Agreement), specifying the date,
amount and type of the proposed new Interest Rate Option. If such
notice has been duly given, on and after the date specified in such
notice, interest shall be calculated upon the unpaid principal
amount of the Loan or Loans in question taking into account such
selection, conversion or renewal. Notwithstanding anything to the
contrary contained in this Agreement, no Portion of the outstanding
principal amount of any Revolving Credit Loans may be converted to,
or continued as, LIBOR Rate Loans (i) when any default or Event of
Default has occurred and is continuing or (ii) if the last date of
such LIBOR Rate Loan Rate Period is after the Expiration Date. The
Bank’s right to payment of principal and interest under the
Loans and the Notes shall in no way be affected by the fact that
one or more Rate Periods may be in effect. In the absence of
delivery of a continuation/conversion notice with respect to any
LIBOR Rate Loan at least three (3) Business Days before the last
day of the then current Rate Period with respect thereto, such
LIBOR Rate Loan shall, on such last day, automatically convert to a
Base Rate Loan.
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(b)
Maximum Number of LIBOR Rate Periods . Notwithstanding any
other provisions in this Agreement to the contrary, at no time
shall more than three (3) different Rate Periods be in existence at
any time during the term of this Agreement. If Borrower attempts to
give notice of selection of a LIBOR Rate Loan when three (3) or
more Rate Periods are in existence, such notification shall be
deemed to request the making of Base Rate Loans instead of the
LIBOR Rate Loans, unless Borrower promptly elects to cancel the
notice to make such new Loans by giving notice of cancellation to
the Bank.
2.07
Base Rate Fallback . If any Rate Period expires, any Loan
corresponding to such Rate Period which has not been converted or
renewed in accordance with Section 2.04 hereof automatically shall
be converted to a Base Rate Loan. If Borrower fails to select, or
if Bank fails to offer, as provided in Section 2.06 of this
Agreement, an Interest Rate Option to apply to any Loans made under
the Notes, such borrowings shall be deemed to be Base Rate
Loans.
2.08
LIBOR Rate Lending Unlawful . If the Bank shall
determine (which determination shall, upon notice thereof to the
Borrower be conclusive and binding on the Borrower) that the
introduction of or any change in or in the interpretation of any
law, rule, regulation or guideline, (whether or not having the
force of law) makes it unlawful, or any central bank or other
governmental authority asserts that it is unlawful, for the Bank to
make, continue or maintain any LIBOR Rate Loan or Libor
Advantage Rate Loan as, or to convert any loan into, a LIBOR Rate
Loan of a certain duration, the obligations of the Bank to make,
continue, maintain or convert into any such LIBOR Rate Loans or
Libor Advantage Rate Loans shall, upon such determination,
forthwith be suspended until the Bank shall notify the Borrower
that the circumstances causing such suspension no longer exist, and
all LIBOR Rate Loans and Libor Advantage Rate Loans of such type
shall automatically convert into Base Rate Loans at the end of the
then current Rate Periods with respect thereto or sooner, if
required by such law or assertion.
2.09
Substitute Rate. If the Bank shall have determined
that:
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(a)
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US dollar
deposits in the relevant amount and for the relevant Rate Period
are not available to the Bank in the London interbank
market;
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(b)
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by reason of
circumstances affecting the Bank in the London interbank, adequate
means do not exist for ascertaining the LIBOR Rate applicable
hereunder to LIBOR Rate Loans of any duration; or
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(c)
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LIBOR no longer
adequately reflects the Bank’s cost of funding
loans
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then, upon notice from the Bank
to the Borrower, the obligations of the Bank under this Article II
to make or continue any Loans as, or to convert any Loans into,
LIBOR Rate Loans of such duration shall forthwith be suspended
until the Bank shall notify the Borrower that the circumstances
causing such suspension no longer exist.
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2.10
Funding by Branch, Subsidiary or Affiliate .
(a)
Notional Funding . The Bank shall have the right from time
to time, prospectively or retrospectively, without notice to the
Borrower, to deem any branch, subsidiary or affiliate of the Bank
to have made, maintained or funded any part of the LIBOR Rate
Portion or LIBOR Advantage Rate Portion of the Loans at any time.
Any branch, subsidiary or affiliate so deemed shall be known as a
“Notional LIBOR Funding Office”. The Bank shall deem
any part of the LIBOR Rate Portion or Libor Advantage Rate Portion
of the Loans or the funding therefore to have been transferred to a
different Notional LIBOR Funding Office if such transfer would
avoid or cure a situation in which the Bank declines to permit the
Borrower to select the LIBOR Rate Option or the Libor Advantage
Rate Option because it is unascertainable or impracticable for the
Bank to provide same or would lessen any compensation or indemnity
payable to the Bank under this Agreement, and if the Bank
determines in its sole discretion that such transfer would be
practicable and would not have a material adverse effect on such
part of the Loans, the Bank or any Notional LIBOR Funding Office
(it being assumed for purposes of such determination that each part
of the LIBOR Rate Portion or Libor Advantage Rate Portion of the
Loans is actually made or maintained by or funded through the
corresponding Notional LIBOR Funding Office). Notional LIBOR
Funding Offices may be selected by the Bank without regard to the
Bank’s actual methods of making, maintaining or funding the
Loans or any sources of funding actually used by or available to
the Bank.
(b)
Actual Funding . The Bank shall have the right from time to
time to make or maintain any part of the LIBOR Rate Portion or
Libor Advantage Rate Portion of the Loans by arranging for a
branch, subsidiary or affiliate of the Bank to make or maintain
such part of the LIBOR Rate Portion or the Libor Advantage Rate
Portion of the Loans. The Bank shall have the right to (i) hold any
applicable Note payable to its order for the benefit and account of
such branch, subsidiary or affiliate or (ii) request the Borrower
to issue one or more promissory notes in the principal amount of
such part of the LIBOR Rate Portion or Libor Advantage Rate Portion
of the Loans payable to such branch, subsidiary or affiliate and
with appropriate changes reflecting that the holder thereof is not
obligated to make any additional Loans to the Borrower. The
Borrower agrees to comply promptly with any request under clause
(ii) of this Section 2.10(b). If the Bank causes a branch,
subsidiary or affiliate to make or maintain any part of the Loans
hereunder, all terms and conditions of this Agreement shall, except
where the context clearly requires otherwise, be applicable to such
part of the Loans and to any note payable to the order of such part
of the LIBOR Rate Portion or Libor Advantage Rate Portion of the
Loans as if the Loans were made or maintained by the Bank and such
note were a Note payable to the Bank’s order.
2.11
Indemnities . In addition to the LIBOR Rate Loan Prepayment
Fee, the Borrower agrees to reimburse the Bank (without
duplication) for any increase in the cost to the Bank, or reduction
in the amount of any sum receivable by the Bank, in respect, or as
a result of: B
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(a)
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any conversion
or repayment or prepayment of the principal amount of any LIBOR
Rate Loans on a date other than the scheduled last day of the Rate
Period applicable thereto, whether pursuant to Section 2.04
or otherwise;
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(b)
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any Loans not
being made as LIBOR Rate Loans in accordance with the borrowing
request thereof, other than solely as a result of the Bank’s
determination not to make a LIBOR Rate Loan; or
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(c)
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any LIBOR Rate
Loans not being continued as, or converted into, LIBOR Rate Loans
in accordance with the continuation/conversion notice thereof,
other than solely as a result of the Bank’s determination not
to make a LIBOR Rate Loan.
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The Bank shall promptly notify
the Borrower in writing of the occurrence of any such event, such
notice to state, in reasonable detail, the reasons therefore and
the additional amount required fully to compensate the Bank for
such increased cost or reduced amount. Such additional amounts
shall be payable by the Borrower to the Bank within fifteen (15)
days of its receipt of such notice, and such notice shall, in the
absence of manifest error, be conclusive and binding on the
Borrower. Any amount payable to the Bank under this Section 2.11
will bear interest at the Base Rate Option from the due date until
paid (before and after judgment). The Borrower understands, agrees
and acknowledges the following: (i) the Bank does not have any
obligation to purchase, sell and/or match funds in connection with
the use of the LIBOR Rate as a basis for calculating the rate of
interest on a LIBOR Rate Loan, (ii) the LIBOR Rate may be used
merely as a reference in determining such rate, and (iii) the
Borrower has accepted the LIBOR Rate as a reasonable and fair basis
for calculating such rate, the LIBOR Rate Prepayment Fee, and other
funding losses incurred by the Bank. Borrower further agrees to pay
the LIBOR Rate Prepayment Fee and other funding losses, if any,
whether or not the Bank elects to purchase, sell and/or match
funds.
2.12
Increased Costs . If on or after the date hereof the
adoption of any applicable law, rule or regulation or guideline
(whether or not having the force of law), or any change therein, or
any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by
the Bank with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable
agency:
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(a)
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shall subject
the Bank to any tax, duty or other charge with respect to its LIBOR
Rate Loans or its obligation to make LIBOR Rate Loans, or shall
change the basis of taxation of payments to the Bank of the
principal of or interest on its LIBOR Rate Loans or any other
amounts due under this agreement in respect of its LIBOR Rate Loans
or its obligation to make LIBOR Rate Loans (except for the
introduction of, or change in the rate of, tax on the overall net
income of the Bank or franchise taxes, imposed by the jurisdiction
(or any political subdivision or taxing authority thereof) under
the laws of the Commonwealth of Pennsylvania); or
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(b)
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shall impose,
modify or deem applicable any reserve, special deposit or similar
requirement (including, without limitation, any such requirement
imposed by the Board of Governors of the Federal Reserve System of
the United States) against assets of, deposits with or for the
account of, or credit extended by, the Bank or shall impose on the
Bank or on the London interbank market any other condition
affecting its LIBOR Rate Loans or its obligation to make LIBOR Rate
Loans;
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and the result of any of the
foregoing is to increase the cost to the Bank of making or
maintaining any LIBOR Rate Loan, or to reduce the amount of any sum
received or receivable by the Bank under this Agreement with
respect thereto, by an amount deemed by the Bank to be material,
then, within 15 day
