Amended and Restated Loan Agreement
THIS AMENDED AND RESTATED LOAN AGREEMENT (this "Agreement") is entered
into as of January 21, 1999 between THE BETHLEHEM CORPORATION, a Pennsylvania
corporation (the "Borrower") and PNC BANK, NATIONAL ASSOCIATION, a national
banking association (the "Bank"). It amends, restates and replaces in it
entirety the similar Loan Agreement between the Borrower and the Bank dated June
2, 1998.
The Borrower and the Bank with the intent to be legally bound, agree as
follows:
1. Loan. The following loan and credit facilities (collectively referred
to as the "Loan"), shall be subject to and governed by this Agreement:
$3,200,000 Committed Line of Credit (the "Committed Line of Credit")
$800,000 Term Loan (the "Term Loan")
The proceeds of each of the Committed Line of Credit and the Term Loan shall be
used to refinance the outstanding balance of term and revolving debt that the
Borrower presently owes to CIT Group/Credit Finance and to finance the ongoing
general corporate and general working capital needs of the Borrower, except as
otherwise set forth herein.
2. Terms and Conditions. Subject to the terms and conditions hereof and
relying upon the representations and warranties herein set forth, the
Bank agrees to make the Loan to the Borrower at any time or from time
to time on or after the date hereof in accordance with the terms of
this Agreement.
2.1 Committed Line of Credit. The Committed Line of Credit shall have
the following terms:
(a) Maturity Date: June 1, 1999, or such later date as may be
designated by the Bank by written notice to the Borrower.
(b) Interest Rate: Prime Rate (as defined hereinafter) plus
one and one-half percent (1.50%) per annum, but in no event
greater than the maximum rate permitted by law. (As used
herein, the "Prime Rate" shall be the rate of interest per
annum announced by the Bank from time to time as its Prime
Rate.)
(c) Facility Fee: The Borrower shall pay to the Bank the
remaining unpaid half of a facility fee in the amount of
$48,000, payable at closing on the entire amount of the
facility.
(d) Borrowing Base/Availability: The Committed Line of Credit
shall be available in amounts determined in accordance with
the Borrowing Base Rider in the form attached hereto as
Exhibit A. Of such amounts,
not more than $500,000 will be made available to the Borrower
in the form of issued and outstanding letters of credit drawn
to or for the account of the Borrower, with maturity dates
that do not exceed the then-current Maturity Date.
(e) Requests. Except as otherwise provided herein, the
Borrower may from time to time prior to the Maturity Date
request the Bank to make a Loan under the Committed Line of
Credit by delivering to the Bank, not later than 2:00 p.m.
Eastern Standard or Daylight Savings Time, as may be in effect
at the time the request for an advance is made, a request by
telephone immediately confirmed in writing by letter,
facsimile or telex in such form as the Bank shall reasonably
require (a "Loan Request"), it being understood that the Bank
may rely on the authority of any individual making such a
telephonic request without the necessity of receipt of such
written confirmation. Each Loan Request shall be irrevocable
and shall specify (i) the proposed borrowing date; and (ii)
the aggregate amount of the proposed Loan. Upon the receipt by
the Bank of a timely and complete Loan Request, the Bank shall
make every reasonable effort to fund the proposed Loan on the
date that it receives such Loan Request, and shall not charge
interest thereon until such time as the proceeds thereof are
in fact made available to the Borrower.
(f) Committed Line of Credit Note. The Obligation of the
Borrower to repay the aggregate unpaid principal amount of the
Committed Line of Credit, together with interest thereon,
shall be evidenced by a promissory note of the Borrower
("Committed Line of Credit Note") payable to the order of the
Bank in a face amount equal to the maximum amount of the
Committed Line of Credit.
(g) Lockbox. The Bank, in its discretion, may establish a
lockbox at the Bank to which account debtors of the Borrower
will submit all payments in respect of the Borrower's accounts
receivable.
(h) Letter of Credit Fees; Renewal Fees. Should the Bank
subsequently elect to extend the term of the Committed Line of
Credit (which decision shall be made at the request of the
Borrower and in the sole and absolute discretion of the Bank),
the fee due and payable to the Bank in connection therewith
shall not exceed one-half percent (0.50%). In addition, the
Bank shall charge fees of one and one-half percent per annum
on stand-by letters of credit and one-eighth of one percent
(0.125%) per annum on trade letters of credit.
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2.2 Term Loan. The Term Loan shall have the following terms:
(a) Maturity Date: June 1, 2003.
(b) Interest Rate: The rate of interest specified in Section 1
of the Term Note (as such term is defined below).
(c) Facility Fee: The Borrower shall pay to the Bank a
facility fee in the amount of $12,000, payable at closing on
the entire amount of the facility.
(d) Term Note. The Obligation of the Borrower to repay the
aggregate unpaid principal amount of the Term Loan, together
with interest thereon, shall be evidenced by a promissory note
of the Borrower (the "Term Note" and together with the
Committed Line of Credit Note, the "Notes") payable to the
order of the Bank in a face amount equal to the maximum amount
of the Term Loan.
3. Security. The security for repayment of the Loan shall include but not
be limited to the collateral, guaranties and other documents
heretofore, contemporaneously or hereafter executed and delivered to
the Bank (the "Security Documents"), which shall secure repayment of
the Loan, the Notes and all other loans, advances, debts, liabilities,
obligations, covenants and duties owing by the Borrower to the Bank of
any kind or nature, present or future, whether or not evidenced by any
note, guaranty or other instrument, whether arising under any
agreement, instrument or document, whether or not for the payment of
money, whether arising by reason of an extension of credit, opening of
a letter of credit, loan or guarantee or in any other manner, whether
arising out of overdrafts on deposit or other accounts or electronic
funds transfers (whether through automatic clearing houses or
otherwise) or out of the non-receipt of or inability to collect funds
or otherwise not being made whole in connection with depository
transfer check or other similar arrangements, whether direct or
indirect (including those acquired by assignment or participation),
absolute or contingent, joint or several, due or to become due, now
existing or hereafter arising, and any amendments, extensions, renewals
or increases and all costs and expenses of the Bank incurred in the
documentation, negotiation, modification, enforcement, collection or
otherwise in connection with any of the foregoing, including but not
limited to reasonable attorneys' fees and expenses, but excluding all
such expenses and costs relating to the salaried employees of the Bank,
and related administrative and overhead expenses (hereinafter referred
to collectively as the "Obligations"). This Agreement (including the
Addendum and any Riders thereto), the Notes and the Security Documents
are collectively referred to as the "Loan Documents".
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4. Representations and Warranties. The Borrower hereby makes the following
representations and warranties to the Bank which shall be true and
correct as of the date of this Agreement and the date of the making of
a Loan, and which shall be true and correct except as otherwise set
forth on the Addendum attached hereto and incorporated herein by
reference (the "Addendum").
4.1. Existence, Power and Authority. The Borrower is duly organized,
validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania 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, except where the failure to be so
qualified or licensed would not have a material adverse effect on
the business, operations or financial condition of the Borrower.
The Borrower is duly authorized to execute and deliver the Loan
Documents, all necessary action to authorize the execution and
delivery of the Loan Documents has been properly taken, and the
Borrower is and will continue to be duly authorized to borrow
under this Agreement and to perform all of the other terms and
provisions of the Loan Documents.
4.2. Financial Statements. The Borrower has delivered or caused to be
delivered to the Bank its balance sheet and income statement for
the eleven month period which ended on April 30, 1998 (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 result 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.
4.3. No Material Adverse Change. Since the date of the Historical
Financial Statements, the Borrower has not suffered any damage,
destruction or loss to its assets, and no event or condition has
occurred or exists, which has resulted or could reasonably be
expected to result in a material adverse change in its business,
assets, operations, financial condition or result of operation.
4.4. Binding Obligations. The Borrower has full power and authority to
enter into the transactions provided for in this Agreement and
has been duly authorized to do so by appropriate action of its
Board of Directors; and the
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Loan Documents, when executed and delivered by the Borrower, will
constitute the legal, valid and binding obligations of the
Borrower enforceable in accordance with their terms.
4.5. No Defaults or Violations. There does not exist any Event of
Default under this Agreement or any material default or violation
by the Borrower of or under any of the terms, conditions or
obligations of: (i) its articles or certificate of incorporation,
regulations or bylaws; (ii) any material indenture, mortgage,
deed of trust, franchise, permit, contract, agreement, or other
instrument to which it is a party or by which it is bound other
than trade payables and any legitimately disputed matter in
litigation with any vendor or customer, in each case where the
amount in controversy does not exceed $15,000 and where the
amount in controversy does not exceed $100,000 on a collective
basis and those litigation matters listed in the Addendum; or
(iii) any law, regulation, ruling, order, injunction, decree,
condition or other requirement applicable to or imposed upon it
by any law, the action by any court or any governmental authority
or agency; and the consummation of this Agreement and the
transactions set forth herein will not result in any such default
or violation.
4.6. Title to Assets. The Borrower has valid title to the assets
reflected on the Historical Financial Statements, free and clear
of all liens and encumbrances, except for (i) current taxes and
assessments not yet due and payable, (ii) liens and encumbrances,
if any, reflected or noted in the Historical Financial
Statements, (iii) assets disposed of by the Borrower in the
ordinary course of business since the date of the Historical
Financial Statements, and (iv) those liens or encumbrances
specified on the Addendum.
4.7. Litigation. There are no actions, suits, proceedings or
governmental investigations pending or, to the Borrower's
knowledge, threatened against the Borrower, which could
reasonably be expected to result in a material adverse change in
its business, assets, operations, financial condition or results
of operations and there is no basis known to the Borrower for any
action, suit, proceedings or investigation which could reasonably
be expected to result in such a material adverse change. All
pending or threatened litigation against the Borrower of which
Borrower has knowledge is listed on the Addendum.
4.8. Tax Returns. 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 it or its property or withheld by it, including
unemployment, social security and similar taxes
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and all of such taxes, have been either paid or adequate reserve
or other provision has been made.
4.9. Employee Benefit Plans. Each employee benefit plan as to which
the Borrower may have any liability complies in all material
respects with all applicable provisions of the Employee
Retirement Income Security Act of 1974 ("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.
4.10. Environmental Matters. The Borrower is in compliance, in all
material respects, with all Environmental Laws, 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 the Addendum, no litigation or proceeding arising
under, relating to or in connection with any Environmental Law is
pending or, to the best of the Borrower's knowledge, threatened
against the Borrower, any real property which the Borrower holds
or has held an interest or any past or present operation of the
Borrower. No release, threatened release or disposal of hazardous
waste, solid waste or other wastes is occurring, or to the best
of the Borrower's knowledge has occurred, on, under or to any
real property in which the Borrower holds any interest or
performs any of its operations, in material violation of any
Environmental Law. As used in this Section, "litigation or
proceeding" means any demand, claim notice, suit, suit in equity,
action, administrative action, investigation or inquiry whether
brought by a governmental authority or other person, and
"Environmental Laws" means all provisions of laws, statutes,
ordinances, rules, regulations, permits, licenses, judgments,
writs, injunctions, decrees, orders, awards and standards
promulgated by any governmental authority concerning health,
safety and protection of, or regulation of the discharge of
substances into, the environment.
4.11. Intellectual Property. The Borrower owns or has the right to use
all patents, patent rights, trademarks, trade names, service
marks, copyrights, intellectual property, technology, know-how
and processes necessary for
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the conduct of its business as currently conducted that are
material to the condition (financial or otherwise), business or
operations of the Borrower.
4.12. Regulatory Matters. No part of the proceeds of the Loan will be
used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation
U of the Board of Governors of the Federal Reserve System as now
and from time to time in effect or for any purpose which violates
the provisions of the Regulations of such Board of Governors.
4.13. Solvency. As of the date hereof and after giving effect to the
transactions contemplated by the Loan Documents, the Borrower
will have sufficient cash flow to enable it to pay its debts as
they mature.
4.14. Disclosure. None of the Loan Documents contains or will contain
any untrue statement of material fact or omits or will omit to
state a material fact necessary in order to make the statements
contained in this Agreement or the Loan Documents not misleading.
There is no fact known to the Borrower which materially adversely
affects or, so far as the Borrower can now reasonably foresee,
might materially adversely affect the business, assets,
operations, financial condition or results of operation of the
Borrower and which has not otherwise been fully set forth in this
Agreement or in the Loan Documents.
5. Affirmative Covenants. The Borrower agrees that from the date of
execution of this Agreement until all Obligations have been fully paid
and any commitments the Bank to the Borrower have been terminated, the
Borrower will:
5.1. Books and Records. Maintain books and records in accordance with
GAAP and give representatives of the Bank access thereto at all
reasonable times following notice from the Bank, 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 or returns which the Borrower may make to or file with
any governmental department, bureau or agency, federal or state.
5.2. Interim Financial Statements and Reports; Certificate of No
Default; Accounts Receivable. Furnish the Bank within ten (10)
days after the end of each month a detailed report on its
accounts receivable and inventory status in such reasonable
detail consistent with the form currently used by the Borrower's
management. A copy of the most recently prepared such form is
attached hereto as Exhibit B. In addition, the Borrower shall
also furnish the Bank with current work in process reports within
fifteen (15)
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days after the end of each month. The Borrower shall also provide
within forty-five (45) days from the end of each of its fiscal
quarters its Financial Statements (as defined hereinafter) for
such period, in reasonable detail, certified by the President,
Chief Executive Officer or Chief Financial Officer of the
Borrower and prepared in accordance with GAAP applied from period
to period. The Borrower shall also deliver, within forty-five
(45) days from the end of its fiscal quarters, a certificate
signed by such officer which verifies compliance with applicable
financial covenants for the period then ended and whether any
Event of Default exists, and, if so, the nature thereof and the
corrective measures the Borrower proposes to take. "Financial
Statements" means the Borrower's separate and unconsolidated
balance sheets, income statements and statements of cash flows
for the year, month or (excepting statements of cash flows)
quarter together with year-to-date figures and comparative
figures for the corresponding periods of the prior year.
5.3. Annual Financial Statements and Fiscal Budget. Furnish the
Borrower's Financial Statements and its then-current fiscal
budget for the immediately succeeding fiscal year of the Borrower
to the Bank within ninety (90) days after the end of each fiscal
year. Those Financial Statements will be prepared in accordance
with GAAP and audited by an independent certified public
accountant selected by the Borrower and satisfactory to the Bank.
Audited Financial Statements shall contain the unqualified
opinion of an independent certified public accountant and its
examination shall have been made in accordance with GAAP
consistently applied from period to period. Annual fiscal budgets
shall be in such form, format and detail as shall be reasonably
acceptable to the Bank. The Borrower will also provide filings
made with any regulatory authority and such other information
reasonably requested by the Bank, from time to time.
5.4. Payment of Taxes and Other Charges. Pay and discharge when due
all indebtedness and all taxes, assessments, charges, levies and
other liabilities imposed upon the Borrower, its income, profits,
property or business, except those which currently are being
contested in good faith by appropriate proceedings and for which
the Borrower shall have set aside adequate reserves in accordance
with GAAP or made other adequate provision with respect thereto
acceptable to the Bank.
5.5. Maintenance of Existence, Operation and Assets. Do all things
necessary to maintain, renew and keep in full force and effect
its organizational existence and all rights, permits and
franchises necessary to enable it to continue its business;
continue in operation in substantially the same manner as at
present; keep its properties in good operating condition
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and repair; and make all necessary and proper repairs, renewals,
replacements, additions and improvements thereto.
5.6. Insurance. 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. (As of the
date of this Agreement, the existing insurance coverage of the
Borrower has been reviewed and approved by the Bank.) In the
event of a conflict between the provisions of this Section and
the terms of any Security Documents relating to insurance, the
provisions in the Security Documents will control.
5.7. Compliance with Laws. Comply in all material respects with all
laws applicable to the Borrower and to the operation of its
business (including any statute, rule or regulation relating to
employment practices and pension benefits or to environmental,
occupational and health standards and controls).
5.8. Bank Accounts. Establish and maintain at the Bank all of the
Borrower's primary depository accounts.
5.9. Financial Covenants. Comply with all of the financial and other
covenants set forth on the Addendum, subject to all applicable
cure periods set forth herein, with the understanding that such
compliance shall be determined based on the then-current
segregated and non-consolidated financial condition of the
Borrower.
5.10. Additional Reports. Provide prompt written notice to the Bank of
the occurrence of any of the following of which the Borrower
obtains knowledge (together with a description of the action
which the Borrower proposes to take with respect thereto): (i)
any Event of Default or potential Event of Default, (ii) any
litigation filed by or against the Borrower, (iii) any Reportable
Event or Prohibited Transaction with respect to any Employee
Benefit Plan(s) (as defined in ERISA) or (iv) any event which
might reasonably be expected to result in a material adverse
change in the business, assets, operations, financial condition
or results of operation of the Borrower other than disputes with
trade debtors and any legitimately disputed matter in litigation
with any vendor or customer, in each case where the amount in
controversy does not exceed $15,000 and where the amount in
controversy does not exceed $100,000 on a collective basis.
6. Negative Covenants. The Borrower covenants and agrees that from the
date of execution of this Agreement until all Obligations have been
fully paid and any
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commitments of the Bank to the Borrower have been terminated, the
Borrower will not, except as set forth in the Addendum, without the
prior written consent of the Bank:
6.1. Indebtedness. Incur any indebtedness for borrowed money other
than: (i) the Loan and any subsequent indebtedness the Bank; (ii)
existing indebtedness disclosed on the Borrower's Historical
Financial Statements referred to in Section 4.2; (iii)
fully-subordinated loans (under terms and conditions which have
been approved in advance by the Bank) from Universal Process
Equipment, Inc. ("UPE"); (iv) capital and operating leases where
the aggregate obligations due thereunder from the Borrower in any
fiscal year of the Borrower does not exceed $50,000 for capital
leases and $50,000 for operating leases; or (v) such payables
incurred in the ordinary course of business. (It is expressly
acknowledged and agreed that the Bank is familiar with and has
approved the terms of the loans from UPE to the Borrower that
existed on the date of this Agreement.)
6.2. Liens and Encumbrances. Except as provided in Section 4.6 and for
a security interest in the Borrower's capital stock in Bethlehem
Advanced Materials Corporation in favor of NationsBank, N.A.,
which is hereby expressly authorized notwithstanding any
expressed or implied restrictions to the contrary in any of the
Loan Documents, create, assume or permit to exist any mortgage,
pledge, encumbrance or other security interest or lien upon any
assets now owned or hereafter acquired or enter into any lease or
any arrangement for the acquisition of property subject to any
conditional sales agreement, other than purchase money security
interests.
6.3. Guarantees. Guarantee, endorse or voluntarily become contingently
liable for the obligations of any person, firm or corporation,
except in connection with the endorsement and deposit of checks
in the ordinary course of business for collection.
6.4. Loans or Advances. Purchase or hold beneficially any stock, other
securities or evidences of indebtedness of any loans or advances
to, or make any investment or acquire any interest whatsoever in,
any other person, firm or corporation, except investments
disclosed on the Borrower's Historical Financial Statements or
investments in the ordinary course of the Borrower's business and
except for the Borrower's existing loan in the original principal
amount of $1,082,717 in favor of Bethlehem Advanced Materials
Corporation.
6.5. Merger or Transfer of Assets. Merge or consolidate with or into
any person, firm or corporation, but only if the aggregate cash
expenditure of the Borrower in connection with any such merger or
consolidation exceeds $100,000, or lease, sell, transfer or
otherwise dispose of property or assets,
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whether now owned or hereafter acquired, except for asset sales,
leases and transfers in the ordinary course of the Borrower's
business.
6.6. Change in Business, Management or Ownership. Make or permit any
material change in the nature of its business as carried on as of
the date hereof, in the composition of its current executive
management (including changes due to death or disability), or in
its equity ownership other than transfers to heirs and
beneficiaries of a stockholder upon the death of a stockholder,
changes due to the exercise of stock options now or hereafter
owned by employees or officers of the Borrower and transfers of
the publicly-traded common stock of the Borrower. (For purposes
of this Agreement, such current executive management shall be
limited to Xxxx X. Xxxxxxxxxxx and Xxxxxxxxxx Xxxxxx, unless the
Bank provides the Borrower with written notice of additions or
deletions from such list.)
6.7. Dividends. Declare or pay any dividends on or make any
distribution with respect to any class of its equity or ownership
interest, or purchase, redeem, retire or otherwise acquire any of
its equity.
6.8. Capital Expenditures. Make capital expenditures in any fiscal
year of the Borrower which exceed an amount equal to $300,000 on
an aggregate basis.
6.9. Use of Loan Proceeds. Directly or indirectly permit the proceeds
of the Loan or any part thereof to be used by Bethlehem Advanced
Materials Corporation.
7. Events of Default. The occurrence of any of the following will be
deemed to be an "Event of Default":
7.1. Payment Default. The Borrower shall fail to pay any payment of
principal or interest within ten (10) calendar days following the
date when due, in respect of the Obligations.
7.2. Material Adverse Change. There shall be a material adverse change
in the business, operations, assets, financial condition or
results of operations of the Borrower, which default shall not
have been cured within twenty (20) days from the receipt by the
Borrower of written notice thereof from the Bank.
7.3. Covenant Default. The Borrower shall default in the performance
of, or violate any of, the covenants or agreements contained in
this Agreement, which default shall not have been cured within
twenty (20) days from the receipt by the Borrower of written
notice thereof from the Bank.
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7.4. Breach of Warranty. Any Financial Statement, representation,
warranty or certificate made or furnished by the Borrower to the
Bank in connection with this Agreement shall be materially false,
incorrect or incomplete when made.
7.5. Bankruptcy or Insolvency. A proceeding shall have been instituted
in a court having jurisdiction over the Borrower seeking a decree
or order for relief in respect of the Borrower in an involuntary
case under any applicable bankruptcy, insolvency reorganization
or other similar law and such involuntary case shall remain
undismissed or unstayed and in effect for a period of ninety (90)
consecutive days (provided that the Bank shall have no obligation
to advance additional funds to the Borrower during such ninety
(90) day period), or the Borrower shall commence a voluntary case
under any such law or consent to the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator,
conservator (or other similar official).
7.6. Other Default. The occurrence of an Event of Default as defined
in the Notes or any of the Security Documents, or a violation of
any of the requirements set forth in the Borrowing Base Rider, or
the occurrence of an Event of Default under the Loan Documents
which now exist or which may hereafter exist in connection with
any present or future loan transaction between NationsBank, N.A.
and Bethlehem Advanced Materials Corporation..
Upon the occurrence of an Event of Default, and at any time
thereafter, the Bank may declare all Obligations hereunder immediately due and
payable will have all rights and remedies (which are cumulative and not
exclusive) specified in the Notes and the Security Documents and available under
applicable law or in equity.
8. Conditions. The Bank's obligation to make any advance or fund any
tranche under the Loan is subject to the following conditions being
satisfied as of the date of the advance:
8.1. No Event of Default. No Event of Default or event which with the
passage of time, provision of notice or both would constitute an
Event of Default shall have occurred and be continuing.
8.2. Authorization Documents. The Borrower shall have furnished to the
Bank a Secretary's Certificate attesting to the Board of
Directors authorization of the execution of this Agreement, the
Notes or any of the Security Documents; or other proof of
authorization satisfactory to the Bank.
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8.3. Delivery of Loan Documents. The Borrower shall have delivered to
the Bank the Loan Documents and such other instruments and
documents which the Bank may reasonably request in connection
with the transactions provided for in this Agreement.
8.4. Opinion of Counsel. Counsel for the Borrower shall have delivered
a written opinion, dated the Closing Date and in form and
substance satisfactory to the Bank and its counsel, as to matters
incident to the transactions contemplated herein as the Bank may
reasonably request.
8.5. Representations and Warranties. The representations and
warranties of the Borrower to the Bank shall be true and correct
in all respects.
8.6. Subordination Agreement. The Bank shall have received from UPE a
Subordination Agreement containing terms and conditions
acceptable to the Bank whereby UPE shall subordinate its claims
against the Borrower for borrowed money (the "Subordinated Debt")
to the indebtedness of the Borrower to the Bank, but only to the
extent necessary to permit the Borrower to comply with the
effective net worth covenant contained in this Agreement. All
promissory notes evidencing the Subordinated Debt shall have been
marked with the legend set forth in the Subordination Agreement.
8.7. Equity Contribution from UPE. Receipt of evidence that UPE has in
fact unconditionally contributed additional equity to the
Borrower in the form of used equipment inventory that is similar
to the Borrower's Bethlehem-Type Equipment with a fair-market
value that is sufficient to cause the Borrower to meet the
minimum effective net worth and maximum leverage covenants
contained in this Agreement.
8.8. Equipment Repurchase Agreement from UPE. Receipt of a signed
agreement from both UPE and the Borrower wherein UPE will be
required to either liquidate or otherwise purchase for its own
account the Borrower's Eligible Inventory on behalf of the
Borrower and for the benefit of the Bank upon the occurrence of a
payment default under the Loan Documents within fifteen (15)
months from the date that the Bank provides UPE with written
notice of an Event of Default arising from the failure of the
Borrower to make timely payments of either principal or interest
due in connection with the Loan to the Bank, subject in all
respects to the terms, restrictions and provisions set forth
therein.
8.9. Collateral Assignment of Life Insurance Policy. Receipt of an
assignment of a $2,500,000 "key man" insurance policy to the Bank
on the life of Xxxx X. Xxxxxxxxxxx within thirty (30) days from
the date of this Agreement.
- 13 -
8.10. Mortgagee Waiver. Receipt of an executed copy of the Bank's
standard Mortgagee Waiver from Ocwen Federal Savings Bank in its
capacity as the holder of a mortgage on the Borrower's Easton
property.
9. Increased Costs. Within twenty (20) days following written demand,
together with the written evidence of the justification therefor, the
Borrower agrees to pay the Bank all direct costs incurred and any
losses suffered or payments made by the Bank as a consequence of making
the Loan by reason of any change in law or regulation or its
interpretation imposing any reserve, deposit, allocation of capital or
similar requirement (including without limitation, Regulation D of the
board of Governors of the Federal Reserve System) on the Bank, its
holding company or any of their respective assets, but only if similar
payment demands are made by the Bank against all of its then-currently
similarly situated customers and borrowers.
10. Miscellaneous.
10.1. Notices. All notices, demands, requests, consents, approvals and
other communications required or permitted hereunder must be in
writing and will be effective upon receipt if delivered
personally to such party, or if sent by facsimile transmission
with confirmation of delivery, or by nationally recognized
overnight courier service, to the address set forth below or to
such other address as any party may give to the other in writing
for such purpose:
To the Bank: To the Borrower:
PNC Bank, N.A. The Bethlehem Corporation
0000 Xxxxxxxx Xxxxx 00xx & Xxxxxx Xxxxxxx
Xxxx Xxxxxxxxxx, XX 00000 Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx Attention: Xxxx X. Xxxxxxxxxxx
Facsimile No.: (000) 000-0000 Facsimile No.: (000) 000-0000
With copies to: With copies to:
Xxxxxxx X. Xxxxxx, Esquire Xxxxx X. Xxxxxxx, Esquire
Blank Rome Xxxxxxx & XxXxxxxx LLP The Law Office of Xxxxx X. Xxxxxxx
0000 Xxxxxx Xxxxxx, 21st Floor 0000 Xxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000 Xxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000 Facsimile No.: (000) 000-0000
- 14 -
10.2. Preservation of Rights. No delay or omission on the part of the
Bank to exercise any right or power arising hereunder will impair
any such right or power or be considered a waiver of any such
right or power or any acquiescence therein, nor will the action
or inaction of the Bank impair any right or power arising
hereunder. The rights and remedies hereunder of the Bank are
cumulative and not exclusive of any other rights or remedies
which the Bank may have under other agreements, at law or in
equity.
10.3. Illegality. In case any one or more of the provisions contained
in this Agreement should be invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be
affected or impaired thereby.
10.4. Changes in Writing. No modification, amendment or waiver of any
provision of this Agreement nor consent to any departure by the
Borrower therefrom, will in any event be effective unless the
same is in writing and signed by the Bank and then such waiver or
consent shall be effective only in the specific instance and for
the purpose for which given. No notice to or demand on the
Borrower in any case will entitle the Borrower to any other or
further notice or demand in the same, similar or other
circumstance.
10.5. Entire Agreement. This Agreement (including the documents and
instruments referred to herein) constitutes the entire agreement
and supersedes all other prior agreements and understandings,
both written and oral, between the parties with respect to the
subject matter hereof.
10.6. Counterparts. This Agreement may be signed in any number of
counterpart copies and by the parties hereto on separate
counterparts, but all such copies shall constitute one and the
same instrument.
10.7. Successors and Assigns. This Agreement will be binding upon and
inure to the benefit of the Borrower and the Bank and their
respective, successors and assigns; provided, however, that the
Borrower may not assign this Agreement in whole or in part
without the prior written consent of the Bank and the Bank at any
time may assign this Agreement in whole or in part, upon prior
written notice to Borrower.
10.8. Interpretation. In this Agreement, unless the Bank and the
Borrower otherwise agree in writing, the singular includes the
plural and the plural the singular; words importing any gender
include the other genders; references to statutes are to be
construed as including all statutory provisions consolidating,
amending or replacing the statute referred to; the word "or"
shall be deemed to include "and/or", the words "including",
- 15 -
"includes" and "include" shall be deemed to be followed by the
words "without limitation"; references to articles, sections (or
subdivisions of sections) or exhibits are to those of this
Agreement unless otherwise indicated; and references to
agreements and other contractual instruments shall be deemed to
include all subsequent amendments and other modifications to such
instruments, but only to the extent such amendments and other
modifications are not prohibited by the terms of this Agreement.
Section headings in this Agreement are included for convenience
of reference only and shall not constitute a part of this
Agreement for any other purpose. Unless otherwise specified in
this Agreement, all accounting terms shall be interpreted and all
accounting determinations shall be made in accordance with GAAP.
If this Agreement is executed by more than one party as Borrower,
the obligations of such persons or entities will be joint and
several.
10.9. Assignments and Participation. Notwithstanding any other
provisions of this Agreement, the Bank may, at any time in its
sole discretion, without any notice to the Borrower, sell,
assign, transfer, negotiate, grant participation in, or otherwise
dispose of all or any part of the Bank's interest in the Loan.
The Borrower hereby authorizes the Bank to provide, without any
notice to the Borrower, any information concerning the Borrower,
including information pertaining to the Borrower's financial
condition, business operations or general creditworthiness, to
any person or entity which may succeed to or participate in all
or any part of the Bank's interest in the Loan, provided that
such person or entity agrees to maintain the confidentiality of
such information. The Bank agrees that it will otherwise maintain
the confidentiality of any proprietary information in its
possession concerning the Borrower which is not otherwise
available to the public.
10.10.Governing Law and Jurisdiction. This Agreement has been delivered
to and accepted by the Bank and will be deemed to be made in the
Commonwealth of Pennsylvania. THIS AGREEMENT WILL BE INTERPRETED
AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED
IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA,
EXCLUDING ITS CONFLICT OF LAWS RULES. The Borrower hereby
irrevocably consents to the exclusive jurisdiction of any state
or federal court seated in Philadelphia County, Pennsylvania, and
consents that all service of process be sent by nationally
recognized overnight courier service directed to the Borrower at
the Borrower's address set forth herein and service so made will
be deemed to be completed on the business day after deposit with
such courier; provided that nothing contained in this Agreement
will prevent the Bank from bringing any
- 16 -
action, enforcing any award or judgment or exercising any rights
against the Borrower individually, against any security or
against any property of the Borrower within any other county,
state or other foreign or domestic jurisdiction. the Bank and the
Borrower agree that the venue provided above is the most
convenient forum for both the Bank and the Borrower. The Borrower
waives any objection to venue and any objection based on a more
convenient forum in any action instituted under this Agreement.
10.11. WAIVER OF JURY TRIAL. EACH OF THE BORROWER AND THE BANK
IRREVOCABLY WAIVES ANY AND ALL RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY NATURE RELATING TO
THIS AGREEMENT, ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH
DOCUMENTS. THE BORROWER AND THE BANK ACKNOWLEDGE THAT THE
FOREGOING WAIVER IS KNOWING AND VOLUNTARY.
The Borrower acknowledges that it has read and understood all the provisions of
this Agreement, including the waiver of jury trial, and has been advised by
counsel as necessary or appropriate.
WITNESS the due execution of this Loan Agreement as a document under
seal, as of the date first written above.
[CORPORATE SEAL] THE BETHLEHEM CORPORATION,
a Pennsylvania corporation
Attest:________________________ By:__________________________(SEAL)
Xxxx X. Xxxxxxxxxxx
President & Chief Executive Officer
PNC BANK, NATIONAL ASSOCIATION,
a national banking association
Witness:______________________ By:__________________________(SEAL)
Xxxxxx X. Xxxxxx
Vice President
- 17 -
ADDENDUM to that certain Loan Agreement dated June 2, 1998 between The
Bethlehem Corporation as the Borrower and PNC Bank, National Association as the
Bank.
I. FINANCIAL COVENANTS
A) Minimum Fixed Charge Coverage Ratio - On a continuous basis, to be
tested by the Bank at least quarterly as of the end of each fiscal
quarter of the Borrower, the Borrower's Fixed Charge Coverage Ratio
shall equal or exceed 1.20 to 1.00. (Herein, the term "Fixed Charge
Coverage Ratio" shall be determined in accordance with GAAP and shall
equal the sum of the Borrower's net income and depreciation and
amortization expenses for the immediately preceding twelve (12) month
period divided by the sum of the Borrower's unfunded capital
expenditures, interest expenses and current maturities of long-term
debt over that same twelve (12) month period.
B) Minimum Effective Net Worth - On a continuous basis, to be tested by
the Bank at least quarterly as of the end of each fiscal quarter of the
Borrower, the Borrower's Effective Net Worth shall equal or exceed
$1,000,000 at all times from and after the closing date through May 31,
1998, and thereafter an amount equal to the sum of $1,000,000 plus an
amount equal to one hundred percent (100%) of the Borrower's annual net
income during each fiscal year of the Borrower from and after the
fiscal year ending on May 31, 1998. (Herein, the term "Effective Net
Worth" shall be determined in accordance with GAAP and shall equal the
sum of the shareholder equity of the Borrower plus all fully-
subordinated debt of the Borrower minus all of the Borrower's
intangible assets.)
C) Maximum Leverage Ratio - On a continuous basis, to be tested by the
Bank at least quarterly as of the end of each fiscal quarter of the
Borrower, the Borrower's Leverage Ratio shall not exceed (i) 14.00 to
1.00 from the closing date through May 30, 1998, (ii) 7.50 to 1.00 from
May 31, 1998 through May 30, 1999 and (iii) 4.00 to 1.00 from and after
May 31, 1999. (Herein, the term "Leverage Ratio" shall be determined in
accordance with GAAP and shall equal the sum of the Borrower's total
liabilities minus all fully-subordinated debt divided by the sum of the
Borrower's Effective Net Worth.)
- 18 -
II. PERMITTED ENCUMBRANCES
None
III. PENDING LITIGATION
Xxxxxx Rule v. The Bethlehem Corporation, et al., Civil Action No.
97003066 22- 2 (C.C.P. Bucks) - This is a products liability action involving
(at this juncture) approximately eight Defendants and Additional Defendants at
this juncture; the primary Defendants are manufacturers of fire-protective
garments worn by the Plaintiff, when he was operating a piece of equipment --
allegedly designed, manufactured and sold by the Bethlehem Corporation --, and a
fire resulted and he was burned; the case is in the discovery phase; it is
believed that the claims against Bethlehem are questionable, and that the
Plaintiff's primary focus is against the manufacturers of the protective
clothing and various component parts, which allegedly failed and resulted in
burn injuries.
Westinghouse Electric Corp. v. Bethlehem Corp., Civil Action No.
1996-C- 8149 (C.C.P. Northampton) - Westinghouse has sued to recover $39,056.22
for services allegedly rendered; Bethlehem has counterclaimed for damages caused
by the poor quality of services rendered, and is also defending on the basis
that the services rendered by Westinghouse were of little or no value; the case
is in the middle of discovery.
SI Handling Systems, Inc. v. The Bethlehem Corporation - The Complaint
in this case was just filed on May 18, 1998; it is a suit for $27,880.59 for
goods and services allegedly rendered; Bethlehem intends to assert by defense
and counterclaim the poor quality of the services rendered, and to recover
damages resulting from failure to properly perform under the agreement between
the parties.
IV. ENVIRONMENTAL MATTERS
None
- 19 -
EXHIBIT A
Borrowing Base Rider
THIS BORROWING BASE RIDER ("Rider") is executed this 21st day
of January 1999, by and between THE BETHLEHEM CORPORATION, a Pennsylvania
corporation (the "Borrower"), and PNC BANK, NATIONAL ASSOCIATION, a national
banking association (the "Bank"). This Rider is incorporated into and made part
of that certain Amended and Restated Loan Agreement dated January 21, 1999, and
also into such other financing documents and security agreements as may be
executed and delivered pursuant to said Loan Agreement (all such documents
including this Rider are collectively referred to as the "Loan Documents"). All
initially capitalized terms not otherwise defined in this Rider shall have the
same meanings ascribed to such terms in the other Loan Documents.
Pursuant to the Loan Documents, the Bank has extended a "Loan"
to the Borrower which includes a "Committed Line of Credit," under which the
Borrower may borrow, repay and reborrow funds at any time prior to the Maturity
Date (such portion of the Loan being referred to together herein as the
"Facility"). As a condition to the Bank's willingness to extend the Facility to
the Borrower, the Bank and the Borrower are entering into this Rider in order to
set forth their agreement regarding the maximum amount which may be outstanding
under the Facility at any time, and for the other purposes set forth below:
NOW, THEREFORE, in consideration of the foregoing and
intending to be legally bound, the parties hereto covenant and agree as follows:
1. Limitations on Borrowings Under Facility. Notwithstanding
any provisions to the contrary in any of the other Loan Documents, at no time
shall the aggregate principal amounts of indebtedness outstanding at any one
time under the Facility exceed the Borrowing Base at such time. If at any time
the aggregate principal amount of indebtedness outstanding under the Facility
exceeds the limitation set forth in this Section 1 for any reason, then the
Borrower shall immediately repay the amount of such excess to the Bank in
immediately available funds.
2. Borrowing Base Certificates. In addition to any and all
provisions of the other Loan Documents which establish conditions to the
Borrower's ability to request and obtain any advance under the Facility, the
Borrower may not request an advance under the Facility unless a Borrowing Base
Certificate shall have been delivered to the Bank via telecopy by 2:00 p.m.
Eastern Standard or Daylight Savings Time, as may be in effect at the time the
request for an advance is made, on the date of such proposed advance. The
Borrower shall also deliver an updated Borrowing Base Certificate upon the
Bank's request and in no event later than on or before the 10th day of each
month or the first business day thereafter if such day falls on a weekend or
holiday, if no new advances have been requested by the Borrower under the
Facility since the date of the preceding Borrowing Base Certificate. Each such
Borrowing Base Certificate shall
- 20 -
be in form and substance identical to the attached Schedule A hereto and shall
separately track advances under the Facility which are supported by each of the
four (4) existing categories of Eligible Inventory that are described below.
3. Certain Defined Terms. In addition to the words and terms
defined elsewhere in this Rider or in the other Loan Documents, as used in this
Rider, the following words and terms shall have the following meanings:
"Account" shall mean an "account" or a "general intangible" as
defined in the Uniform Commercial Code as in effect in the jurisdiction whose
Law governs the perfection of the Bank's security interest therein, whether now
owned or hereafter acquired or arising.
"Account Debtor" shall mean, with respect to any Account, each
Person who is obligated to make payments to the Borrower on such Account.
"Affiliate" of the Borrower or any Account Debtor shall mean
(a) any Person who (either alone or with a group of Persons, and either directly
or indirectly through one or more intermediaries) is in control of, is
controlled by or is under common control with the Borrower or such Account
Debtor, (b) any director, officer, partner, employee or agent of the Borrower or
such Account Debtor, and (c) any member of the immediate family of any natural
person described in the preceding clauses (a) and (b). A Person or group of
Persons shall be deemed to be in control of the Borrower or an Account Debtor
when such Person or group of Persons possesses, directly or indirectly, the
power to direct or cause the direction of the management or policies of the
Borrower or such Account Debtor, whether through the ownership of voting
securities, by contract or otherwise.
"Bethlehem-Type Equipment" shall mean the used resale
equipment inventory of the Borrower that is similar to the new resale equipment
inventory that is currently being manufactured by the Borrower except for the
fact that it was originally manufactured by an entity other than the Borrower
"Borrowing Base" shall mean at any time the lesser of (a)
$3,200,000 (the maximum principal amount of the Facility) and (b) the sum of (i)
60% of Qualified Accounts at such time and (ii) the lesser of $2,250,000 or 50%
of Eligible Inventory at such time. The value at any time of the collateral
described in this definition shall be determined by reference to the most recent
Borrowing Base Certificate delivered by the Borrower to the Bank.
"Borrowing Base Certificate" shall mean each Borrowing Base
Certificate to be delivered by the Borrower to the Bank pursuant to Section 2 of
this Rider, in substantially the form attached as Exhibit A to this Rider, with
blanks appropriately completed, as amended, supplemented or otherwise modified
from time to
- 21 -
time. References in the Borrowing Base Certificate to the "Loan Agreement" shall
be deemed to be references to this Rider and the other Loan Documents.
"Eligible Inventory" shall mean, collectively, all of the
Borrower's then-current Bethlehem-Type Equipment, New Bethlehem Equipment and
Used Bethlehem Equipment.
"Law" shall mean any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, order, injunction, writ, decree or
award of any Official Body.
"Lien" shall mean any mortgage, pledge, security interest,
bailment, encumbrance, claim, lien or charge of any kind, including any
agreement to give any of the foregoing, any conditional sale or other title
retention agreement and any lease in the nature thereof, and the filing of or
agreement to give any financing statement under the Uniform Commercial Code.
"New Bethlehem Equipment" shall mean the new resale equipment
inventory of the Borrower that was manufactured by the Borrower but has not yet
been sold by the Borrower.
"Official Body" shall mean any government or political
subdivision or any agency, authority, bureau, central bank, commission,
department or instrumentality of any government or political subdivision, or any
court, tribunal, grand jury or arbitrator, in each case whether foreign or
domestic.
"Person" shall mean an individual, sole proprietorship,
corporation, partnership (general or limited), trust, business trust, limited
liability company, unincorporated organization or association, joint venture,
joint-stock company, Official Body, or any other entity of whatever nature.
"Qualified Accounts" shall mean Accounts which are and at all
times continue to be acceptable to the Bank in its sole discretion. Standards of
acceptability include but are not limited to the following conditions:
a. The Account duly complies with all applicable Laws,
whether Federal, state or local, including but not
limited to usury Laws, the Federal Truth in Lending
Act, the Federal Consumer Credit Protection Act, the
Fair Credit Billing Act, and Regulation Z of the
Board of Governors of the Federal Reserve Systems;
b. The Account was not originated in or subject to the
Laws of a jurisdiction whose Laws would make the
account or the grant of
- 22 -
the security interest in the Account to the Bank
unlawful, invalid or unenforceable;
c. The Account was originated by the Borrower in
connection with the sale of goods or the rendering of
services by the Borrower in the ordinary course of
business under an enforceable contract, and such sale
has been consummated and such goods have been
delivered or such services have been rendered so that
the performance of such contracts has been completed
by the Borrower and by all parties other than the
Account Debtor, or the cost thereof has been billed
to the Account Debtor prior to delivery pursuant to
an existing milestone or installment-based billing
arrangement;
d. The Account is evidenced by a written invoice or
other documentation and arises from a contract, all
of which are in form and substance satisfactory to
the Bank;
e. The Account does not arise out of a contract with, or
order from, an Account Debtor that, by its terms,
forbids or makes void or unenforceable the grant of
the security interest by the Borrower to the Bank in
and to the Account arising with respect thereto;
f. The title of the Borrower to the Account and, except
as to the Account Debtor, to any related goods is
absolute and is not subject to any Lien except Liens
in favor of the Bank;
g. The Account provides for payment in United States
Dollars by the Account Debtor;
h. The Account shall have amounts owing that are not
less than the amounts represented by the Borrower;
i. The portion of the Account for which income has not
yet been earned or which constitutes unearned
discount, services charges or deferred interest shall
be ineligible;
j. The Account shall be eligible only to the extent that
it is not subject to any defense, claim of reduction,
counterclaim, set-off, recoupment, or any dispute or
claim for credits, allowances or adjustments by the
Account Debtor because of returned, inferior, damaged
goods or unsatisfactory service, or for any other
reason;
k. The goods the sale of which gave rise to the Account
were shipped or delivered or provided to the Account
Debtor on an absolute sale
- 23 -
basis or on a xxxx and hold sale basis, but not on a
consignment sale basis, a guaranteed sale basis, a
sale or return basis, or on the basis of any other
similar terms making the Account Debtor's payment
obligations conditional, or the cost thereof has been
billed to the Account Debtor prior to delivery
pursuant to an existing milestone or
installment-based billing arrangement;
l. The Account Debtor has not returned, rejected or
refused to retain, or otherwise notified the Borrower
of any dispute concerning, or claimed nonconformity
of, any of the goods from the sale of which the
Account arose;
m. No default exists under the Account by any party
thereto, and all rights and remedies of the Borrower
under the Account are freely assignable by the
Borrower;
n. The Account has not been outstanding for more than
ninety (90) days past the invoice date and is not
subject to "dating" terms;
o. The Account shall be ineligible to the extent that
the aggregate amount of all the Accounts of the
Account Debtor and its Affiliates exceed 70% of all
of the Borrower's Accounts;
p. The Borrower has not received any note, trade
acceptance, draft, chattel paper or other instrument
with respect to, or in payment of, the Account,
unless, if any such instrument has been received, the
Borrower immediately notifies the Bank and, at the
Bank's request, endorses or assigns and delivers such
instrument to the Bank;
q. The Borrower has not received any notice of (i) the
filing by or against the Account Debtor of any
proceeding in bankruptcy, receivership, insolvency,
reorganization, liquidation, conservatorship or any
similar proceeding, or (ii) any assignment by the
Account Debtor for the benefit of creditors. Upon
receipt by the Borrower of any such notice, it will
give the Bank prompt written notice thereof;
r. The Account Debtor is not an Affiliate of the
Borrower;
s. The Account shall be ineligible if the Account Debtor
is an Official Body, unless the Borrower shall have
taken all actions deemed necessary by the Bank in
order to perfect the Bank's security interest
therein, including but not limited to any notices or
filings
- 24 -
required under the Assignment of Claims Act of 1940,
as amended, or other applicable Laws; and
t. The Bank has not deemed such Account ineligible
because of uncertainty about the creditworthiness of
the Account Debtor (including, without limitation,
unsatisfactory past experiences of the Borrower or
the Bank with the Account Debtor) or because the Bank
otherwise makes a reasonable determination that the
collateral value of the Account to the Bank is
impaired or that the Bank's ability to realize such
value is insecure.
Standards of acceptability shall be fixed and may be revised from time
to time by mutual agreement of Bank and Borrower. In the case of any dispute
about whether an Account is or has ceased to be a Qualified Account, the
decision of the Bank shall be final.
"Used Bethlehem Equipment" shall mean the used resale
equipment inventory of the Borrower that was originally manufactured and sold by
the Borrower, but was subsequently re-acquired by the Borrower.
4. Governing Law. THIS RIDER WILL BE INTERPRETED AND THE
RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE
LAWS OF THE COMMONWEALTH OF PENNsYLVANIA, EXCLUDING ITS CONFLICTS OF LAW RuLES.
5. Counterparts. This Rider may be signed in any number of
counterpart copies and by the parties hereto on separate counterparts, but all
such copies shall constitute one and the same instrument.
WITNESS the due execution of this Borrowing Base Rider as a
document under seal, as of the date first written above.
[CORPORATE SEAL] THE BETHLEHEM CORPORATION,
a Pennsylvania corporation
Attest:________________________ By:__________________________(SEAL)
Xxxx X. Xxxxxxxxxxx
President & Chief Executive Officer
[CORPORATE SEAL] PNC BANK, NATIONAL ASSOCIATION,
a national banking association
Witness:______________________ By:__________________________(SEAL)
Xxxxxx X. Xxxxxx, Vice President
- 25 -
SCHEDULE A
FORM OF BORROWING
BASE CERTIFICATE
1) Total Accounts Receivable $__________________
2) Less: Unqualified Receivables
C) Over 90 Days Due $________________
D) Retention $________________
E) Foreign Not Supported By
Letter of Credit $________________
F) Over-Concentration Limit $________________
G) Others $________________
TOTAL $__________________
3) Total Qualified Accounts
(Line 1 minus Line 2) $__________________
4) Borrowing Base Availability - Accounts Receivable
(60% of Line 3) $__________________
5) Total Qualified Inventory (By Sub-Category)
A) Bethlehem-Type Equipment $______________
B) New Bethlehem Equipment $______________
C) Used Bethlehem Equipment $______________
TOTAL (Not to exceed $4,500,000) $__________________
6) Borrowing Base Availability - Inventory
(Lesser of 50% of Line 3 or
$2,250,000.) $__________________
7) Total Borrowing Base Availability
(Lesser of Line 4 plus Line 6
or $3,200,000) $__________________
- 26 -
8) Revolving Loan Outstanding
(Not to exceed Line 7) $___________________
9) Borrowing Base Availability
($3,200,000 minus Line 7) $___________________
--------------------------------------------------------------------------------
To induce PNC Bank, National Association ("PNC Bank") to grant advances
or other financial accommodations to us pursuant to the terms of our Loan
Agreement dated as of June 2, 1998 with PNC Bank, as the same may be extended,
amended, and/or restated from time to time (the "Credit Agreement"), we hereby
certify, represent and warrant the following to the PNC Bank, all as of the date
hereof: (1) the foregoing statements of our accounts receivable and inventory
described above are true and complete; (2) the total eligible collateral
described above at Lines three (3) and five (5) represent only Eligible
Inventory and Qualified Accounts, as those terms are defined in the Credit
Agreement; (3) we are in compliance with all of the terms and provisions of the
Credit Agreement; (4) there exists no Default or Event of Default under the
Credit Agreement; and (5) the current unpaid balance of all principal and
interest due in connection with all existing loans or advances from The
Bethlehem Corporation to Bethlehem Advanced Materials Corporation is
$___________________.
DATE: ________________ THE BETHLEHEM CORPORATION,
a Pennsylvania corporation
By:_________________________________
Xxxxxxxxxx Xxxxxx
Chief Financial Officer
- 27 -
EXHIBIT B
FORM OF ACCOUNTS RECEIVABLE AND INVENTORY REPORT
The Exhibit B attached to the original Loan Agreement by and between
the Borrower and the Bank dated June 2, 1998 is hereby incorporated by reference
into this Agreement as Exhibit B hereto.
- 28 -
