1
Exhibit 4.17
THIRTEENTH AMENDMENT TO
SECURED TERM LOAN, REVOLVING CREDIT
AND LINE OF CREDIT AGREEMENT
-----------------------------------
THIS THIRTEENTH AMENDMENT (this "Amendment") made as of the 31st day of
May, 1995 by and between TUSCARORA INCORPORATED, a Pennsylvania corporation
(the "Company"), and MELLON BANK, N.A., a national banking association (the
"Bank");
WITNESSETH:
WHEREAS, the Company and the Bank entered into a Secured Term Loan,
Revolving Credit and Line of Credit Agreement dated July 27, 1983 (herein, as
the same has heretofore been supplemented and amended by the First Amendment
dated September 4, 1984, the Second Amendment dated October 2, 1985 (the
"Second Amendment"), the Third Amendment dated as of January 30, 1987 (the
"Third Amendment"), the Fourth Amendment dated as of August 31, 1987, the Fifth
Amendment dated as of February 29, 1988 (the "Fifth Amendment"), the Sixth
Amendment dated as of August 1, 1989, the Seventh Amendment dated as of May 31,
1990, the Eighth Amendment dated as of August 1, 1991, the Ninth Amendment
dated as of December 18, 1991 (the "Ninth Amendment"), the Tenth Amendment
dated as of August 18, 1992 (the "Tenth Amendment"), the Eleventh Amendment
dated as of February 26, 1993 (the "Eleventh Amendment"), and the Twelfth
Amendment dated as of June 30, 1994, the "Agreement") (except where separate
references are made to the Agreement as executed on July 27, 1983 or to one of
the Amendments enumerated herein) whereby the Bank has extended credit to the
Company;
WHEREAS, there is currently outstanding a Revolving Credit Loan
facility with a conversion date of January 31, 1997, when the facility is
scheduled to convert to a term loan;
WHEREAS, the parties wish to extend said conversion date to January 31,
1998 and to make a corresponding change in the maturity date of the term loan
to January 1, 2003;
WHEREAS, the Company has also requested an increase from $12,000,000 to
$14,000,000 in availability under the Revolving Credit Note; and
WHEREAS, the Bank has agreed, effective June 30, 1995, to extend an
additional term loan to the Company in the principal amount of $12,000,000;
PI1-520998.5
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NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, and intending to be legally bound hereby, the parties
hereby agree as follows:
1. DEFINITIONS. Capitalized words and terms which are defined in the
Agreement are herein used as therein defined, unless provision is made herein
to the contrary. Certain definitions provided in the Agreement are, however,
modified as follows:
"AGREEMENT" shall have the meaning ascribed to such term in
the first recital of this Thirteenth Amendment.
"COMMITMENT" shall mean the face principal amount of the
Revolving Credit Loan as the same may be amended from time to time.
"CONVERSION DATE" shall, effective June 30, 1995, mean
January 31, 1998.
"EBIT" shall mean with respect to any person for any
period net income before the payment or deduction of interest
expense and income taxes MINUS, to the extent included in the
calculation of net income, extraordinary gains, in each case of such
person for such period, computed and calculated on a consolidated basis
in accordance with GAAP.
"EXPIRATION DATE" shall mean the earlier of (i) January 31,
1998 or (ii) the date on which the Commitment is terminated pursuant to
subsection 2(e)(ii) of the Second Amendment.
"INTEREST COVERAGE RATIO" shall mean for any period the ratio
computed by dividing EBIT by Interest Expense.
"INTEREST EXPENSE" shall mean for any period the amount of
interest accrued on indebtedness during such period, including, without
limitation, all interest required under GAAP to be capitalized during
such period.
The phrases "HEREIN", "HEREOF", and "HEREUNDER" and the like
shall mean this Thirteenth Amendment as a whole and not any particular
section or other subdivision.
2. REVOLVING CREDIT LOAN/ADDITIONAL TERM LOAN.
(a) REVOLVING CREDIT FACILITY; CONVERSION. As set forth in the
Revolving Credit Note, subject to the terms and conditions of the
Agreement, availability under the Revolving Credit Note shall be,
effective June 8, 1995, and shall continue to be in the principal
amount of $14,000,000.
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Effective June 30, 1995, the Revolving Credit Loan shall be
converted to a term loan on January 31, 1998.
(b) REVOLVING CREDIT NOTE. In view of the amendments to the
terms "Conversion Date" and "Expiration Date" made in Section 1 of this
Amendment and the increase in the Commitment made in subsection (a) of
this Section 2, the Revolving Credit Note shall be amended and
restated, effective June 8, 1995, in the form attached as Exhibit A to
this Amendment (the Revolving Credit Note").
(c) ADDITIONAL TERM LOAN. In view of the change of the
Conversion Date, effective June 30, 1995, to January 31, 1998, the
repayment terms of the term loan to be extended on the Conversion Date
are hereby amended, effective June 30, 1995, to provide that the
principal amount of such term loan shall be repaid in 20 equal
quarterly installments of principal, due and payable on the first day
of each January, April, July and October of each year, commencing on
April 1, 1998 and ending on January 1, 2003, each in an amount equal to
one-twentieth of the original principal amount thereof, together with
interest on each such date at one or more of the rates provided for in
a Supplement to Conversion Note in the form attached as Exhibit B to
this Agreement, which supplement to Conversation Note would be attached
to and become a part of a promissory note evidencing the obligation to
repay the term loan to be extended on the Conversion Date.
(d) EFFECT OF AMENDMENTS. The terms and conditions of the
Revolving Credit Loan provided for in the Agreement, are hereby
confirmed, except to the extent modified by the foregoing provisions of
this Section 2.
3. TERM LOAN NO. 10.
(a) TERM LOAN. Subject to the terms and conditions of the
Agreement and in reliance upon the representations, warranties and
covenants contained therein, the Bank shall make Term Loan No. 10 to
the Company on the date when the conditions precedent thereto stated in
Section 8 hereof are satisfied, but in no event before June 30, 1995
(for purposes of Term Loan No. 10, the "Closing Date") in the principal
amount of Twelve Million Dollars ($12,000,000). The principal amount of
Term Loan No. 10, which shall be evidenced by a term note in the form
of Exhibit C hereto ("Term Note No. 10"), shall be payable in 40
quarterly installments of Three Hundred Thousand Dollars ($300,000)
each, together with interest at the rate provided for in Term Note No.
10, commencing on October 1, 1995 and continuing on the first day of
each January, April, July, and October thereafter until July 1, 2005.
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(b) INTEREST/INTEREST RATE OPTIONS. Interest shall accrue upon
the unpaid principal balance of Term Loan No. 10 commencing on the date
of the making of such Loan and shall be payable in accordance with the
terms of this Amendment. The Company agrees to pay interest upon such
unpaid principal balance of Term Loan No. 10 from time to time in
accordance with the provisions of the Supplement to Term Note No. 10
which is attached to Term Note No. 10 and incorporated by reference
therein.
4. MORTGAGES AND SECURITY INTERESTS/CROSS COLLATERAL.
Upon the execution and delivery of this Thirteenth Amendment, all
obligations of the Company to the Bank arising hereunder shall be secured by
the liens and security interests granted to the Bank pursuant to Section 2.17
of the Agreement, Section 5 of the First Amendment and subsection 8(d) of the
Third Amendment, as amended by Section 2 of the Ninth Amendment, except to the
extent that such liens and security interests have been released. All
indebtedness of the Company to the Bank whether now outstanding or arising
hereafter shall be secured by the security interests and liens granted in the
documents described in the immediately preceding sentence, as described in
greater detail in subsection 5(b) hereof.
5. REPRESENTATIONS AND WARRANTIES.
(a) CONFIRMATION OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties made by the Company in sections 3.01 - 3.11, inclusive, of the
Agreement are confirmed and ratified as if stated herein in their entirety,
except to the extent that such representations and warranties are modified
herein for purposes of this Thirteenth Amendment, as follows: references to the
Agreement in Article III of the Agreement shall be deemed to include this
Thirteenth Amendment.
(b) MORTGAGES AND SECURITY INTERESTS. The Company represents and
warrants that the liens and security interests granted to the Bank pursuant to
Section 2.17 of the Agreement, Section 5 of the First Amendment and subsection
8(d) of the Third Amendment, as amended by Section 2 of the Ninth Amendment,
shall, except to the extent that such liens and security interests shall have
been released, secure, inter alia, the obligations of the Company arising under
the Agreement. The obligations of the Company arising pursuant to this
Thirteenth Amendment shall constitute "Debt" as defined in:
(i) the mortgages described in subsection 2.17(i) of the
Agreement, except to the extent such mortgages have been released;
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(ii) the Deed to Secure Debt and the Deed of Trust; and
(iii) the First Security Agreement.
The definition of "Debt" in each of the documents described in this
subsection 5(b) is hereby amended to include all indebtedness of the Company
arising under the Agreement including without limitation the Debt arising
pursuant to this Thirteenth Amendment.
6. COMMITMENT FEES. Section 2.(e)(i) of the Second Amendment, as
previously amended by the Fifth Amendment, the Tenth Amendment and the Eleventh
Amendment, is, effective June 30, 1995, hereby amended and restated in its
entirety as follows:
The Company agrees to pay the Bank, as a consideration for its
Commitment hereunder, a Commitment Fee calculated at the rate of 1/8 of
1% per annum (based on a year of 365 or 366 days, as the case may be)
from the date hereof until and including the Expiration Date on the
average daily unborrowed principal amount of the Bank's Commitment
hereunder.
7. COVENANTS.
(a) Section 5.01(g) of the Agreement is amended to add the
following proviso at the end of that Section:
"; provided, however, that nothing in this Section 5.01(g) will
prohibit a transaction otherwise permitted by Section 5.02(h) of
this Agreement."
(b) Section 5.02(i) of the Agreement is deleted in its entirety
and replaced with the following new covenant:
"(i) CAPITAL EXPENDITURES. Make or commit to make, or permit any
Subsidiary to make or commit to make, any Capital Expenditures in any
fiscal year aggregating more than the sum of (i) $25,000,000 plus
(ii) the proceeds of capital assets disposed of pursuant to Section
5.02(g) of this Agreement if equivalent amounts have been applied to
the purchase of new capital assets."
(c) Section 5.02(b) of the Agreement is deleted in its entirety
and replaced with the following new covenant:
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"(b) Interest Coverage Ratio. Permit the Interest Coverage Ratio,
measured at the end of any fiscal quarter for the then most recent
four fiscal quarters, to be less than 3.0:1."
(d) Section 5.02(c) of the Agreement is amended to add new
subsections (9) - (11) as follows:
"(9) Indebtedness in respect of Tuscarora Limited's obligations to
Mellon Europe Limited and to the Bank;
(10) Indebtedness in respect of the Company's obligations to the Bank
and to Mellon Europe Limited pursuant to Guarantee and Suretyship
Agreements in favor of the Bank and Mellon Europe Limited, to be
executed by the Company, in form and substance satisfactory to the
Bank, as the same may be amended from time to time.
(11) Indebtedness in respect of the Company's earnout obligations to
Styro-Molders Corporation under the Agreement, dated March 21, 1994,
between the Company and Styro-Molders Corporation."
(e) Section 5.02(f) of the Agreement, as amended by the Ninth
Amendment, is hereby deleted and shall have no further force or effect.
(f) Section 5.02(g) of the Agreement is deleted in its entirety
and replaced with the following new covenant:
"(g) sell, assign, lease, transfer or otherwise dispose of, or
permit any Subsidiary to sell, assign, lease, transfer or
otherwise dispose of, voluntarily or involuntarily, any of its
capital assets (consisting of property, plant and equipment)
during any fiscal year except for dispositions of capital assets
in the ordinary course of business or dispositions of capital
assets no longer useful in its business; provided, that during
such fiscal year an amount equal to the proceeds of such
dispositions is applied to (i) the purchase of new capital assets
useful in the business of the Company or a Subsidiary or (ii) the
outstanding balance of any Term Loan or, if all Term Loans have
been repaid in full, to the outstanding principal balance of the
Revolving Credit Loan."
(g) Section 11(b) of the Third Amendment is hereby deleted and
shall have no further force or effect.
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8. CONDITIONS PRECEDENT. The conditions precedent to the effectiveness
of this Amendment are as follows:
(a) a duly executed Revolving Credit Note in the form of
Exhibit A hereto together with the Supplement thereto shall have been
delivered to the Bank;
(b) a duly executed Term Note No. 10 in the form of Exhibit B
hereto together with the Supplement thereto shall have been delivered
to the Bank;
(c) the representations and warranties of the Company contained
in the Agreement shall be true and no Event of Default shall have
occurred and no condition or event shall have occurred or existed which
would, after notice or lapse of time or both constitute such an Event
of Default;
(d) there shall have been delivered to the Bank copies of all
documents evidencing corporate action taken by the Company relative to
this Thirteenth Amendment and the transaction contemplated hereby in
form and scope satisfactory to the Bank and special counsel for the
Bank, certified by the Secretary or an Assistant Secretary of the
Company;
(e) there shall have been delivered to the Bank certificates,
signed by the Secretary or an Assistant Secretary of the Company,
certifying as to the name of the officer or officers of the Company
authorized to sign this Thirteenth Amendment and the other documents
delivered hereunder and as to the specimens of the true signatures of
such officer or officers, on which the Bank may rely conclusively; and
(f) all details and proceedings in connection with this
Thirteenth Amendment shall be satisfactory in form and substance to the
Bank and its special counsel and there shall have been delivered to the
Bank and its special counsel counterpart originals, certificates or
other copies of such documents and proceedings in connection therewith
and in such quantities as the Bank or its special counsel may
reasonably request.
9. EXECUTION AND VALIDITY. The references to documents in Section 3.02
of the Agreement shall be deemed to include this Thirteenth Amendment in
addition to the other documents described therein.
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10. MISCELLANEOUS.
(a) RATIFICATION. Except as provided otherwise or modified
herein, the terms and provisions of the Agreement are ratified and
confirmed.
(b) NO WAIVER. The execution of this Thirteenth Amendment and
the consummation of the transactions contemplated hereby shall not be
deemed to constitute (i) a waiver by the Bank of any Event of Default
or event which with the passage of time or notice would constitute an
Event of Default under the Agreement or (ii) a waiver by the Bank of
any existing breach or violation of any warranty or covenant by the
Company under the Agreement.
WITNESS the due execution hereof as of the day and year first above
written.
ATTEST: TUSCARORA INCORPORATED
By: /s/ XXXXX X. XXXXXXX By: /s/ XXXX X. X'XXXXX, XX.
----------------------------- ----------------------------
Title: Vice President & Treasurer Title: President & CEO
-------------------------- -------------------------
[Corporate Seal]
MELLON BANK, N.A.
By: /s/ XXXX X. XXXXXX
-----------------------------
Vice President
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EXHIBIT A
TUSCARORA INCORPORATED
Revolving Credit Note
----------------------
$14,000,000 Pittsburgh, Pennsylvania
June 8, 1995
On January 31, 1998, for value received, the undersigned, TUSCARORA
INCORPORATED, a Pennsylvania corporation and the successor by change of name to
Tuscarora Plastics, Inc., (herein called the "Company"), hereby promises to pay
to the order of MELLON BANK, N.A. (the "Bank") the principal sum of Fourteen
Million Dollars ($14,000,000) or the aggregate unpaid amount of the Revolving
Credit Loan (as that term is defined in the Agreement referred to below) made
by the Bank to the Company pursuant to said Agreement, whichever is less,
together with interest on the unpaid balance of said principal sum from time to
time outstanding from the date hereof payable in accordance with the Supplement
to Revolving Credit Note which is attached hereto and incorporated by reference
herein.
If any payment of principal or interest on this Note shall become due
on a day which is not a business day, such payment shall be made on the next
succeeding business day and such extension of time shall in such case be
included in computing interest in connection with such payment.
Payments of both principal and interest are to be made at the office of
the Bank at Mellon Square, Pittsburgh, Pennsylvania, in lawful money of the
United States of America and in immediately available funds.
This Note is the "Revolving Credit Note" referred to in, is entitled to
the benefits of, and is subject to the provisions of, the Secured Term Loan,
Revolving Credit and Line of Credit Agreement, dated July 27, 1983, by and
between Tuscarora Plastics, Inc. and Mellon Bank, N.A., as amended (the
"Agreement"), which Agreement, among other things, contains provisions for
acceleration of the maturity hereof upon the happening of certain stated
events, and also for prepayments on account of principal hereof prior to
maturity upon terms and conditions therein specified.
This Revolving Credit Note evidences a continuing, pre-existing debt.
It is not intended as a novation of such debt, and neither delivery of this
promissory note to the Bank nor the Bank's surrender or cancellation of any
prior note evidencing such debt shall constitute a payment or discharge
of such debt.
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This promissory note in no way alters, amends, renews, extinguishes or
affects in any other way any collateral security for the debt or any document
relating to such collateral security.
POWER TO CONFESS JUDGMENT: THE COMPANY HEREBY AUTHORIZES AND EMPOWERS
THE PROTHONOTARY OR ANY ATTORNEY OF ANY COURT OF RECORD WITHIN THE COMMONWEALTH
OF PENNSYLVANIA OR ELSEWHERE TO APPEAR FOR THE COMPANY, AND, WITH OR WITHOUT
DECLARATION FILED, CONFESS JUDGMENT AGAINST THE COMPANY IN FAVOR OF THE HOLDER
HEREOF, AS OF ANY TERM, FOR THE UNPAID BALANCE HEREOF AND INCLUDING, WITHOUT
LIMITATION, ALL ACCRUED AND UNPAID INTEREST, CHARGES, EXPENSES OR OTHER
IMPOSITIONS PAYABLE HEREUNDER, OR UNDER THE AGREEMENT OR THE SECURITY DOCUMENTS
WHETHER BY ACCELERATION OR OTHERWISE WITH COSTS OF SUIT AND A REASONABLE
ATTORNEY'S COMMISSION AS CERTIFIED BY THE HOLDER HEREOF WITH RELEASE OF ALL
ERRORS, WAIVING ALL LAWS EXEMPTING REAL OR PERSONAL PROPERTY FROM EXECUTION, TO
THE EXTENT THAT SUCH LAWS MAY LAWFULLY BE WAIVED BY THE COMPANY. NO SINGLE
EXERCISE OF THE FOREGOING POWER TO CONFESS JUDGMENT SHALL BE DEEMED TO EXHAUST
THE POWER, WHETHER OR NOT ANY SUCH EXERCISE SHALL BE HELD BY ANY COURT TO BE
VALID, VOIDABLE, OR VOID, BUT THE POWER SHALL CONTINUE UNDIMINISHED AND IT MAY
BE EXERCISED FROM TIME TO TIME AS OFTEN AS HOLDER SHALL ELECT, UNTIL SUCH TIME
AS HOLDER SHALL HAVE RECEIVED PAYMENT IN FULL.
WITNESS the due execution hereof.
ATTEST: TUSCARORA INCORPORATED
By: ___________________________ By: ______________________________
Title: ________________________ Title: ___________________________
[CORPORATE SEAL]
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SUPPLEMENT TO REVOLVING CREDIT NOTE
-----------------------------------
This Supplement to Revolving Credit Note (this "Supplement") is annexed
to and is part of the Revolving Credit Note dated June 8, 1995 of Tuscarora
Incorporated ("Borrower") payable to Mellon Bank, N.A. ("Bank") in the stated
principal amount of Fourteen Million Dollars ($14,000,000). Such Revolving
Credit Note, as supplemented by this Supplement, shall be referred to as the
"Note".
1. INTEREST PAYMENTS. Interest on the unpaid principal amount of this
Note under the Prime Rate Portion shall be payable quarterly on the last day of
each January, April, July and October and on the date of payment in full.
Interest on the unpaid principal amount of the Note under the As-Offered Rate,
Euro-Rate and CD Rate Portions shall be payable on the last day of the Rate
Period of the corresponding interest rate option.
2. INTEREST RATE OPTIONS. The unpaid principal amount of this Note
shall bear interest for each day until due on one or more bases selected by
Borrower from among the interest rate Options set forth below. Borrower
understands and agrees: (a) that the Bank may in its sole discretion from time
to time determine that the right of Borrower to select, convert to or renew the
As-Offered Rate Option, the Euro-Rate Option or the CD Rate Option is not
available and (b) that subject to the provisions of this Note Borrower may
select any number of such Options to apply simultaneously to different parts of
the unpaid principal amount of this Note and may select any number of Rate
Segments to apply simultaneously to different parts of the As-Offered Rate
Portion, the Euro-Rate Portion or the CD Rate Portion. Provided, however, that
borrowings under the Euro-Rate Option or CD Rate Option shall be in minimum
amounts of $500,000 and borrowings under As-Offered Rate Option shall be in the
minimum amount of $1,000,000.
Available Interest Rate Options
-------------------------------
PRIME RATE OPTION: A rate per annum (computed on the basis of a year
of 365 or 366 days, as the case may be) for each day equal to the
Prime Rate for such day.
AS-OFFERED RATE OPTION: For each Rate Segment of the As-Offered Rate
Portion, a rate per annum (computed on the basis of a year of 360 days
and actual days elapsed) for each day equal to the As-Offered Rate for
such Rate Segment for such day.
EURO-RATE OPTION: For each Rate Segment of the Euro-Rate Portion,
a rate per annum (computed on the basis of a year of 360 days and
actual days elapsed) for each day equal to the Euro-Rate for such Rate
Segment for such day plus 1.00%.
CD RATE OPTION: For each Rate Segment of the CD Rate Portion, a rate
per annum (computed on the basis of a year of 360 days and actual days
elapsed) for each day equal to the CD Rate for such Rate Segment for
such day plus 1.00%.
3. RATE PERIODS. At any time when Borrower selects, converts to or
renews the As-Offered Rate Option, CD Rate Option or the Euro-Rate Option, the
Borrower shall fix a period acceptable to the Bank in the Bank's sole
discretion (the "Rate Period") during which such Option shall apply to the
corresponding Rate Segment. In no event, however, shall a Rate Period exceed
180 days. The Bank's right to payment of principal and interest under this Note
shall in no way be affected by the fact that one or more Rate Periods may be in
effect.
4. RATE SEGMENTS. Every selection of, conversion to or renewal of the
As-Offered Rate Option, CD Rate Option or the Euro-Rate Option shall be in a
principal amount selected by the Borrower and acceptable to the Bank in the
Bank's sole discretion.
5. INTEREST AFTER MATURITY. After the principal amount of any part of
the Prime Rate Portion shall have become due, such Prime Rate Portion shall
bear interest for each day until paid (before and after judgment) at a rate per
annum (based on a year of 365 or 366 days, as the case may be) which for each
day shall be the greater of (a) 2% above the Prime Rate Option on the day such
part of the Prime Rate Portion became due and (b) 2% above the Prime Rate
Option, such interest rate to change automatically from time to time effective
as of the effective date of each change in the Prime Rate. After the principal
amount of any part of the As-Offered Rate Portion, the Euro-Rate Portion or CD
Rate Portion shall have become due, such part shall bear interest for each day
until paid (before and after judgment) (c) until the end of the applicable
then-current Rate Period at a rate per annum 2% above the As-Offered Rate
Option, CD Rate Option or Euro-Rate Option otherwise applicable to such part
and (d) thereafter in accordance with the previous sentence.
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6. SELECTION, CONVERSION OR RENEWAL OF RATE OPTIONS. Subject to the
other provisions of this Note, the Borrower may select any interest rate Option
to apply to any borrowing evidenced by this Note. Subject to the other
provisions of this Supplement, the Borrower may convert any part of the unpaid
principal amount of the Note from any interest rate Option to any other
interest rate Option and may renew the As-Offered Rate Option, CD Rate Option
or the Euro-Rate Option as to any Rate Segment: (a) at any time with respect to
conversion from the Prime Rate Option to another Option and (b) at the
expiration of any Rate Period with respect to conversion from or renewals of
the As-Offered Rate Option, CD Rate Option or the Euro-Rate Option, as the case
may be, as to the Rate Segment corresponding to such expiring Rate Period.
Whenever the Borrower desires to select, convert or renew any interest rate
Option, the Borrower shall give the Bank notice (which shall be irrevocable) no
later than 10:00 a.m., Pittsburgh time, on a Business Day which is at least two
Business Days (or, in the case of selection of, conversion to or renewal of the
Euro-Rate Option, at least two London Business Days) in advance of the day
(which shall be a Business Day) on which such selection, conversion or renewal
is to occur. If such notice has been duly given, and if the Bank in its sole
discretion approves the proposed selection, conversion or renewal, after the
date specified in such notice interest shall be calculated upon the unpaid
principal amount of the Note taking into account such selection, conversion or
renewal.
7. PRIME RATE FALLBACK. If any Rate Period expires, any part of the
Rate Segment corresponding to such Rate Period which has not been converted or
renewed in accordance with Section 6 hereof automatically shall be converted to
the Prime Rate Option. If the Borrower fails to select, or if the Bank fails to
approve, an interest rate Option to apply to any new borrowing evidenced by the
Note, such new borrowing shall be deemed to be at the Prime Rate Option.
8. PREPAYMENTS. The Borrower shall have the right at its option from
time to time to prepay the Prime Rate Portion in whole or in part. The Borrower
shall have no right to prepay any part of the As-Offered Rate Portion, CD Rate
Portion or the Euro-Rate Portion at any time without the prior written consent
of Bank except that the Borrower may prepay any part of any Rate Segment at the
expiration of the Rate Period corresponding to such Rate Segment.
9. INDEMNITY. The Borrower shall indemnify the Bank against any loss or
expense (including loss of margin) which the Bank has sustained or incurred as
a consequence of:
(i) payment, prepayment or conversion of any part of any Rate
Segment of the As-Offered Rate Portion, the Euro-Rate Portion or the CD
Rate Portion on a day other than the last day of the corresponding Rate
Period (whether or not any such payment is pursuant to demand by the
Bank under this Note and whether or not any such payment, prepayment or
conversion is consented to by the Bank, unless the Bank shall have
expressly waived such indemnity in writing);
(ii) attempt by the Borrower to revoke in whole or part any
irrevocable notice given pursuant to Section 6 of this Note; or
(iii) breach of or default by any Debtor in the performance or
observance of any covenant or condition contained in this Note or any
separate security, guarantee or suretyship agreement between Bank and
any Debtor.
If the Bank sustains any such loss or expense it shall from time to time notify
the Borrower of the amount determined in good faith by the Bank (which
determination shall be conclusive) to be necessary to indemnify the Bank for
such loss or expense. Such amount shall be due and payable by the Borrower on
demand.
10. COMPENSATION FOR TAXES, RESERVES AND EXPENSES ON OUTSTANDING LOANS.
If any Law or guideline or interpretation or application thereof by any
Official Body charged with the interpretation or administration thereof or
compliance with any request or directive of any central bank or other Official
Body (whether or not having the force of law):
(i) subjects the Bank or any Notional Euro-Rate Funding Office
to any tax, or changes the basis of taxation with respect to the
Agreement, the Notes, the Loans or payments by the Company of
principal, interest or other amounts due from the Company hereunder or
under the Notes (except for taxes on the overall net income of the Bank
or such Notional Euro-Rate Funding Office imposed by the jurisdiction
in which the Bank's principal executive office or Notional Euro-Rate
Funding Office is located:
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(ii) imposes, modifies or deems applicable any reserve, special
deposit or similar requirement against assets held by, credit extended
by, deposits with or for the account of, or other acquisition of funds
by, the Bank of any Notional Euro-Rate Funding Office (other than
requirements expressly included herein in the determination of the CD
Rate or Euro-Rate, as the case may be, hereunder); or
(iii) imposes upon the Bank or any Notional Euro-Rate Funding
Office any other condition or expense with respect to the Agreement,
the Notes, or its making, maintenance or funding of any part of the
Loans, including, without limitation, any capital adequacy or similar
requirements;
and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, or impose any expense upon the Bank or any Notional
Euro-Rate Funding Office with respect to the Agreement, the Notes or the
making, maintenance or funding of any part of the Loans by an amount which the
Bank deems to be material (the Bank being deemed for this purpose to have made,
maintained or funded each Rate Segment of the CD Rate Portion Source of Funds),
the Bank shall from time to time notify the Company of the amount determined in
good faith (using any averaging and atribution methods employed in good faith)
by the Bank (which determination shall be conclusive) to be necessary to
compensate the Bank or such Notional Euro-Rate Funding Office for such increase
in cost, reduction in income or additional expense. Such amount shall be due
and payable by the Company to the Bank ten (10) Business Days after such notice
is given.
11. RECORDS. The unpaid principal amount of this Note, the unpaid
interest accrued hereon, the interest rate or rates applicable to such unpaid
principal amount, and the duration of such applicability shall at all times be
ascertained from the records of Bank, which shall be conclusive absent manifest
error.
12. NOTICES. All notices under this Note shall be in writing or by
telephone promptly confirmed in writing, and all such writings shall be sent by
first-class express or certified mail or by hand delivery, in all cases with
charges prepaid. All notices shall be sent to the applicable party at the
address stated below or in accordance with the last unrevoked written direction
from such party to the other parties hereto. All notices by the Borrower shall
be effective when received by the Bank and all notices by the Bank shall be
effective when telephoned, deposited in the mail or received, whichever is
first. Written notices or confirmations by the Borrower shall not be deemed
records of the Bank within the meaning of Section 11 of this Note regardless of
whether received by the Bank. The Bank may conclusively rely without inquiry on
any notice or confirmation purporting to be from or authorized by the Borrower.
13. DEFINITIONS. As used in this supplement:
"As-Offered Rate" shall mean a rate per annum offered by Bank in its
sole discretion, such interest rate to remain fixed for the duration of such
Rate Period.
"Assessment Rate" for any day shall mean the rate per annum (rounded
upward to the nearest 1/100 of 1%) determined in good faith by Bank (which
determination shall be conclusive) as representing for such day the maximum
effective rate per annum payable by Bank to the Federal Deposit Insurance
Corporation (or any successor) for such day for insurance on dollar time
deposits of any maturity, exclusive of any credit allowed against such annual
assessment on account of assessment payments made or to be made by Bank. Each
CD Rate shall be adjusted automatically as of the effective date of any change
in the Assessment Rate.
"Business Day" shall mean any day on which Bank is open for business at
the location where the Note is payable.
"Corresponding Source of Funds" shall mean: (i) in the case of any
Funding Segment of a CD Rate Portion, the proceeds of hypothetical issuances by
the Bank of one or more of its certificates of deposit at the beginning of the
CD Rate Funding Period corresponding to such Funding Segment, having maturities
approximately equal to such CD Rate Funding period and in an aggregate amount
approximately equal to such Funding Segment; and (ii) in the case of any
Funding Segment of a Euro-Rate Portion, the proceeds of hypothetical receipts
by a Notional Euro-Rate Funding Office or by the Bank through a Notional
Euro-Rate Funding Office of one or more Dollar deposits in the interbank
eurodollar market at the beginning of the Euro-Rate Funding Period
corresponding to such Funding Segment, having maturities approximately equal to
such Euro-Rate Funding Period and in an aggregate amount approximately equal to
such Funding Segment.
- 3 -
14
"CD Rate Reserve Percentage" for any day shall mean the percentage
(rounded upward to the nearest 1/100 of 1%), as determined in good faith by
Bank (which determination shall be conclusive) as representing for such day the
maximum effective reserve requirement (including without limitation
supplemental, marginal and emergency requirements) for Bank in respect of
nonpersonal time deposits of any maturity in dollars in the United States. Each
CD Rate shall be adjusted automatically as of the effective date of any change
in the CD Rate Reserve Percentage.
"CD Rate" for any day for any proposed or existing Rate Segment
corresponding to a Rate Period shall mean the rate per annum determined by Bank
by adding
(A) the rate per annum obtained by dividing (the resulting
quotient to be rounded upward to the nearest 1/100 of 1%) (1) the rate
of interest (which shall be the same for each day in such Rate Period)
estimated in good faith by Bank in accordance with its usual procedures
(which determination shall be conclusive) to be the average of the
secondary market bid rates at or about 11:00 a.m., Eastern time, on
the first day of such Rate Period by dealers of recognized standing for
negotiable certificates of deposit of major money center banks for
delivery on such day in amounts comparable to such Rate Segment (or, if
there are no such comparable amounts actively traded, the smallest
amounts actively traded) and having maturities comparable to such Rate
Period by (2) a number equal to 1.00 minus the CD Rate Reserve
Percentage for such day and
(B) the Assessment Rate for such day.
The "CD Rate" may also be expressed by the following formula:
[average of secondary market bid ]
[rates estimated by the Bank per ]
CD Rate = [subsection (A) (1) ] + Assessment
---------------------------------- Rate
[1.00 - CD Rate Reserve Percentage]
"Euro-Rate Reserve Percentage" for any day shall mean the percentage
(rounded upward to the nearest 1/100 of 1%), as determined in good faith by the
Bank (which determination shall be conclusive) as representing for such day the
maximum effective reserve requirement (including without limitation
supplemental, marginal and emergency requirements) for member banks of the
Federal Reserve System with respect to eurocurrency funding (currently referred
to as "Eurocurrency liabilities") of any maturity. Each Euro-Rate shall be
adjusted automatically as of the effective date of each change in the Euro-Rate
Reserve Percentage.
"Euro-Rate" for any day for any proposed or existing Rate Segment
corresponding to a Rate Period shall mean the rate per annum determined by the
Bank to be the rate per annum obtained by dividing (the resulting quotient to
be rounded upward to the nearest 1/100 of 1%) (A) the rate of interest (which
shall be the same for each day in such Rate Period) determined in good faith by
the Bank in accordance with its usual procedures (which determination shall be
conclusive) to be the average of the rates per annum for deposits in United
States dollars offered to major money center banks in the London interbank
market at approximately 11:00 a.m., London time, two London Business Days
prior to the first day of such Rate Period for delivery on the first day of
such Rate Period in amounts comparable to such Rate Segment (or, if there are
no such comparable amounts actively traded, the smallest amounts actively
traded) and having maturities comparable to such Rate Period by (B) a number
equal to 1.00 minus the Euro-Rate Reserve Percentage for such day.
The "Euro-Rate" may also be expressed by the following formula:
[average of rates offered to major ]
[money center banks in the London ]
[interbank market determined by the ]
Euro-Rate = [Bank per subsection (A) ]
-------------------------------------
[1.00 - Euro-Rate Reserve Percentage]
"Law" shall mean any law (including common law), constitution, statute,
treaty, regulation, rule, ordinance, order, injunction, writ, decree or award
of any Official Body.
"London Business Day" shall mean a day for dealings in deposits in
United States dollars by and among banks in the London interbank market.
- 4 -
15
"Notional Euro-Rate Funding Office" shall mean any branch, subsidiary
or affiliate of the Bank which the Bank, in its sole discretion, deems from
time to time to have made, maintained or funded any part of the Euro-Rate
Portion of the Loans at any time.
"Official Body" shall mean the United States of America or any foreign
government or state, any state and any political subdivision thereof, and any
agency, department, court, commission, board, bureau or instrumentality of any
of them.
"Portion": "Prime Rate Portion" shall mean at any time the part,
including the whole, of the unpaid principal amount of the Note bearing
interest at such time under the Prime Rate Option or in accordance with the
first sentence of Section 5 hereof. "Euro-Rate Portion", "As-Offered Rate
Portion" or "CD Rate Portion" shall mean at any time the part, including the
whole, of the unpaid principal amount of the Note bearing interest at such time
under the applicable option or at a rate determined by reference to the
applicable option pursuant to Section 5 (c) hereof. (By definition, the sum of
the Prime Rate Portion, the As-Offered Rate Portion, the Euro-Rate Portion and
the CD Rate Portion at any time equals the unpaid principal amount of the Note
at such time.)
"Prime Rate" shall mean the interest rate per annum announced from time
to time by Bank as its Prime Rate, such interest rate to change automatically
from time to time as of the effective date of each announced change in such
Prime Rate. The Prime Rate may be greater or less than other interest rates
charged by Bank to other borrowers and is not solely based or dependent upon
the interest rate which Bank may charge any particular borrower or class of
borrowers.
"Rate Segment" of the As-Offered Rate Portion, the Euro-Rate Portion or
the CD Rate Portion at any time shall mean 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, the As-Offered Rate Portion, the Euro-Rate Portion or the CD Rate
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 the As-Offered Rate Portion, the
Euro-Rate Portion or the CD Rate Portion at any time equals the principal
amount of such Portions at such time.)
WITNESS the due execution hereof:
Attest: TUSCARORA INCORPORATED
By: _______________________________ By: _______________________________
Title: _____________________________
(Corporate Seal)
Address for Notices to Borrower:
Tuscarora Incorporated
000 Xxxxx Xxxxxx
X.X. Xxx 000
Xxx Xxxxxxxx, XX 00000
Address for Notices to Bank:
Mellon Bank, N.A.
Two Mellon Bank Center
Room 152-0270
Xxxxxxxxxx, XX 00000-0000
ATTN: Middle Market Banking Dept.
- 5 -
16
Exhibit B
Supplement to Conversion Note
-----------------------------
This Supplement to Conversion Note (this "Supplement") is annexed to
and is part of Conversion Note dated January 31, 1998 of Tuscarora Incorporated
("Borrower") payable to Mellon Bank, N.A. ("Bank") in the stated principal
amount of Fourteen Million Dollars ($14,000,000). Such Conversion Note, as
supplemented by this Supplement, shall be referred to herein as the "Note".
1. INTEREST PAYMENTS. Interest on the unpaid principal amount of this
Note under the Prime Rate Portion shall be payable quarterly on the first day
of each January, April, July, and October and on the date of payment in full.
Interest on the unpaid principal amount of the Note under the As-Offered Rate,
Euro-Rate and CD Rate Portions shall be payable on the last day of the Rate
Period of the corresponding interest rate option.
2. INTEREST RATE OPTIONS. The unpaid principal amount of this Note
shall bear interest for each day until due on one or more bases selected by
Borrower from among the Interest Rate Options set forth below. Borrower
understands and agrees: (a) that the Bank may in its sole discretion from time
to time determine that the right of Borrower to select, convert to or renew the
As-Offered Rate Option, the Euro-Rate Option or the CD Rate Option is not
available and (b) that subject to the provisions of this Note Borrower may
select any number of such Options to apply simultaneously to different parts of
the unpaid principal amount of this Note and may select any number of Rate
Segments to apply simultaneously to different parts of the As-Offered Rate
Portion, the Euro-Rate Portion or the CD Rate Portion. Provided, however, that
borrowings under the Euro-Rate Option or CD Rate Option shall be in minimum
amounts of $500,000 and borrowings under As-Offered Rate Option shall be in the
minimum amount of $1,000,000.
Available Interest Rate Options
-------------------------------
PRIME RATE OPTION: A rate per annum (computed on the basis of a
year of 365 or 366 days, as the case may be) for each day equal to the
Prime Rate plus 0.125% for such day.
AS-OFFERED RATE OPTION: For each Rate Segment of the As-Offered
Rate Portion, a rate per annum (computed on the basis of a year of 360
days and actual days elapsed) for each day equal to the As-Offered Rate
for such Rate Segment for such day.
EURO-RATE OPTION: For each Rate Segment of the Euro-Rate Portion, a
rate per annum (computed on the basis of a year of 360 days and actual
days elapsed) for each day equal to the Euro-Rate for such Rate
Segment for such day plus 1.375%.
CD RATE OPTION: For each Rate Segment of the CD Rate Portion, a rate
per annum (computed on the basis of a year of 360 days and actual days
elapsed) for each day equal to the CD Rate for such Rate Segment for
such day plus 1.375%.
3. RATE PERIODS. At any time when Borrower selects, converts to or
renews the As-Offered Rate Option, CD Rate Option or the Euro-Rate Option, the
Borrower shall fix a period acceptable to the Bank in the Bank's sole
discretion (the "Rate Period"), which Rate Period shall not exceed 180 days,
during which such Option shall apply to the corresponding Rate Segment. The
Bank's right to payment of principal and interest under this Note shall in no
way be affected by the fact that one or more Rate Periods may be in effect.
Interest Rate Options shall be selected in a manner which shall ensure that
Borrower shall be able to make scheduled payments of principal under the Note
without incurring liability under Section 9 hereof; provided, however, that in
the event that Borrower prepays any Rate Segment bearing interest under the
As-Offered Rate Portion, the Euro-Rate Portion or the CD Rate Portion in order
to make a scheduled payment of principal under the Note, Borrower shall
indemnify the Bank as provided in Section 9 hereof.
4. RATE SEGMENTS. Every selection of, conversion to or renewal of the
As-Offered Rate Option, CD Rate Option or the Euro-Rate Option shall be in a
principal amount selected by the Borrower and acceptable to the Bank in the
Bank's sole discretion.
17
5. INTEREST AFTER MATURITY. After the principal amount of any part of
the Prime Rate Portion shall have become due, such Prime Rate Portion shall
bear interest for each day until paid (before and after judgment) at a rate per
annum (based on a year of 365 or 366 days, as the case may be) which for each
day shall be the greater of (a) 2% above the Prime Rate Option on the day such
part of the Prime Rate Portion became due and (b) 2% above the Prime Rate
Option, such interest rate to change automatically from time to time effective
as of the effective date of each change in the Prime Rate. After the principal
amount of any part of the As-Offered Rate Portion, the Euro-Rate Portion or CD
Rate Portion shall have become due, such part shall bear interest for each day
until paid (before and after judgment) (c) until the end of the applicable
then-current Rate Period at a rate per annum 2% above the As-Offered Rate
Option, CD Rate Option or Euro-Rate Option otherwise applicable to such part
and (d) thereafter in accordance with the previous sentence.
6. SELECTION, CONVERSION OR RENEWAL OF RATE OPTIONS. Subject to the
other provisions of this Note, the Borrower may select any interest rate Option
to apply to any borrowing evidenced by this Note. Subject to the other
provisions of this Supplement, the Borrower may convert any part of the unpaid
principal amount of the Note from any interest rate Option to any other
interest rate Option and may renew the As-Offered Rate Option, CD Rate Option
or the Euro-Rate Option as to any Rate Segment: (a) at any time with respect to
conversion from the Prime Rate Option to another Option and (b) at the
expiration of any Rate Period with respect to conversion from or renewals of
the As-Offered Rate Option, CD Rate Option or the Euro-Rate Option, as the
case may be, as to the Rate Segment corresponding to such expiring Rate Period.
Whenever the Borrower desires to select, convert or renew any interest rate
Option, the Borrower shall give the Bank notice (which shall be irrevocable) no
later than 10:00 a.m., Pittsburgh time, on a Business Day which is at least two
Business Days (or, in the case of selection of, conversion to or renewal of the
Euro-Rate Option, at least two London Business Days) in advance of the day
(which shall be a Business Day) on which such selection, conversion or renewal
is to occur. If such notice has been duly given, and if the Bank in its sole
discretion approves the proposed selection, conversion or renewal, after the
date specified in such notice interest shall be calculated upon the unpaid
principal amount of the Note taking into account such selection, conversion or
renewal.
7. PRIME RATE FALLBACK. If any Rate Period expires, any part of the
Rate Segment corresponding to such Rate Period which has not been converted or
renewed in accordance with Section 6 hereof automatically shall be converted to
the Prime Rate Option. If the Borrower fails to select, or if the Bank fails to
approve, an interest rate Option to apply to any new borrowing evidenced by the
Note, such new borrowing shall be deemed to be at the Prime Rate Option.
8. PREPAYMENTS. The Borrower shall have the right at its option from
time to time to prepay the Prime Rate Portion in whole or in part. The Borrower
shall have no right to prepay any part of the As-Offered Rate Portion, CD Rate
Portion or the Euro-Rate Portion at any time without the prior written consent
of Bank except that the Borrower may prepay any part of any Rate Segment at the
expiration of the Rate Period corresponding to such Rate Segment.
9. INDEMNITY. The Borrower shall indemnify the Bank against any loss or
expense (including loss of margin) which the Bank has sustained or incurred as
a consequence of:
(i) payment, prepayment or conversion of any part of any Rate
Segment of the As-Offered Rate Portion, the Euro-Rate Portion or the CD
Rate Portion on a day other than the last day of the corresponding Rate
Period (whether or not any such payment is pursuant to demand by the
Bank under this Note and whether or not any such payment, prepayment or
conversion is consented to by the Bank, unless the Bank shall have
expressly waived such indemnity in writing);
(ii) attempt by the Borrower to revoke in whole or part any
irrevocable notice given pursuant to Section 6 of this Note; or
(iii) breach of or default by any Debtor in the performance or
observance of any covenant or condition contained in this Note or any
separate security, guarantee or suretyship agreement between Bank and
any Debtor.
If the Bank sustains any such loss or expense it shall from time to time notify
the Borrower of the amount determined in good faith by the Bank (which
determination shall be conclusive) to be necessary to indemnify the Bank for
such loss or expense. Such amount shall be due and payable by the Borrower on
demand.
- 2 -
18
10. COMPENSATION FOR TAXES, RESERVES AND EXPENSES ON OUTSTANDING LOANS.
If any Law or guideline or interpretation or application thereof by any Of-
ficial Body charged with the interpretation or administration thereof or
compliance with any request or directive of any central bank or other Official
Body (whether or not having the force of law):
(i) subjects the Bank or any Notional Euro-Rate Funding Office
to any tax, or changes the basis of taxation with respect to the
Agreement, the Notes, the Loans or payments by the Company of
principal, interest or other amounts due from the Company hereunder or
under the Notes (except for taxes on the overall net income of the Bank
or such Notional Euro-Rate Funding Office imposed by the jurisdiction
in which the Bank's principal executive office or Notional Euro-Rate
Funding Office is located:
(ii) imposes, modifies or deems applicable any reserve, special
deposit or similar requirement against assets held by, credit extended
by, deposits with or for the account of, or other acquisition of funds
by, the Bank of any Notional Euro-Rate Funding Office (other than
requirements expressly included herein in the determination of the CD
Rate or Euro-Rate, as the case may be, hereunder); or
(iii) imposes upon the Bank or any Notional Euro-Rate Funding
Office any other condition or expense with respect to the Agreement,
Notes, or its making, maintenance or funding of any part of the Loans,
including, without limitation, any capital adequacy or similar
requirements;
and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, or impose any expense upon the Bank or any Notional
Euro-Rate Funding Office with respect to the Agreement, the Notes or the
making, maintenance or funding of any part of the Loans by an amount which the
Bank deems to be material (the Bank being deemed for this purpose to have made,
maintained or funded each Rate Segment of the CD Rate Portion, the As-Offered
Rate Portion and the Euro-Rate Portion from a Corresponding Source of Funds),
the Bank shall from time to time notify the Company of the amount determined in
good faith (using any averaging and atribution methods employed in good faith)
by the Bank (which determination shall be conclusive) to be necessary to
compensate the Bank or such Notional Euro-Rate Funding Office for such increase
in cost, reduction in income or additional expense. Such amount shall be due
and payable by the Company to the Bank ten (10) Business Days after such notice
is given.
11. RECORDS. The unpaid principal amount of this Note, the unpaid
interest accrued hereon, the interest rate or rates applicable to such unpaid
principal amount, and the duration of such applicability shall at all times be
ascertained from the records of Bank, which shall be conclusive absent manifest
error.
12. NOTICES. All notices under this Note shall be in writing or by
telephone promptly confirmed in writing, and all such writings shall be sent by
first-class express or certified mail or by hand delivery, in all cases with
charges prepaid. All notices shall be sent to the applicable party at the
address stated below or in accordance with the last unrevoked written direction
from such party to the other parties hereto. All notices by the Borrower shall
be effective when received by the Bank and all notices by the Bank shall be
effective when telephoned, deposited in the mail or received, whichever is
first. Written notices or confirmations by the Borrower shall not be deemed
records of the Bank within the meaning of Section 11 of this Note regardless of
whether received by the Bank. The Bank may conclusively rely without inquiry on
any notice or confirmation purporting to be from or authorized by the Borrower.
13. DEFINITIONS. As used in this supplement:
"As-Offered Rate" shall mean a rate per annum offered by Bank in its
sole discretion, such interest rate to remain fixed for the duration of such
Rate Period.
"Assessment Rate" for any day shall mean the rate per annum (rounded
upward to the nearest 1/100 of 1%) determined in good faith by Bank (which
determination shall be conclusive) as representing for such day the maximum
effective rate per annum payable by Bank to the Federal Deposit Insurance
Corporation (or any successor) for such day for insurance on dollar time
deposits of any maturity, exclusive of any credit allowed against such annual
assessment on account of assessment payments made or to be made by Bank. Each
CD Rate shall be adjusted automatically as of the effective date of any change
in the Assessment Rate.
"Business Day" shall mean any day on which Bank is open for business at
the location where the Note is payable.
- 3 -
19
"Corresponding Source of Funds" shall mean: (i) in the case of any
Funding Segment of a CD Rate Portion, the proceeds of hypothetical issuances by
the Bank of one or more of its certificates of deposit at the beginning of the
CD Rate Funding Period corresponding to such Funding Segment, having maturities
approximately equal to such CD Rate Funding period and in an aggregate amount
approximately equal to such Funding Segment; and (ii) in the case of any
Funding Segment of a Euro-Rate Portion, the proceeds of hypothetical receipts
by a Notional Euro-Rate Funding Office or by the Bank through a Notional
Euro-Rate Funding Office of one or more Dollar deposits in the interbank
eurodollar market at the beginning of the Euro-Rate Funding Period
corresponding to such Funding Segment, having maturities approximately equal to
such Euro-Rate Funding Period and in an aggregate amount approximately equal to
such Funding Segment.
"CD Rate Reserve Percentage" for any day shall mean the percentage
(rounded upward to the nearest 1/100 of 1%), as determined in good faith by
Bank (which determination shall be conclusive) as representing for such day the
maximum effective reserve requirement (including without limitation
supplemental, marginal and emergency requirements) for Bank in respect of
nonpersonal time deposits of any maturity in dollars in the United States. Each
CD Rate shall be adjusted automatically as of the effective date of any change
in the CD Rate Reserve Percentage.
"CD Rate" for any day for any proposed or existing Rate Segment
corresponding to a Rate Period shall mean the rate per annum determined by Bank
by adding
(A) the rate per annum obtained by dividing (the resulting
quotient to be rounded upward to the nearest 1/100 of 1%) (1) the rate
of interest (which shall be the same for each day in such Rate Period)
estimated in good faith by Bank in accordance with its usual procedures
(which determination shall be conclusive) to be the average of the
secondary market bid rates at or about 11:00 a.m., Eastern time, on
the first day of such Rate Period by dealers of recognized standing for
negotiable certificates of deposit of major money center banks for
delivery on such day in amounts comparable to such Rate Segment (or, if
there are no such comparable amounts actively traded, the smallest
amounts actively traded) and having maturities comparable to such Rate
Period by (2) a number equal to 1.00 minus the CD Rate Reserve
Percentage for such day and
(B) the Assessment Rate for such day.
The "CD Rate" may also be expressed by the following formula:
[average of secondary market bid ]
[rates estimated by the Bank per ]
CD Rate = [subsection (A)(1) ] + Assessment
----------------------------------
[1.00 - CD Rate Reserve Percentage] Rate
"Euro-Rate Reserve Percentage" for any day shall mean the percentage
(rounded upward to the nearest 1/100 of 1%), as determined in good faith by the
Bank (which determination shall be conclusive) as representing for such day the
maximum effective reserve requirement (including without limitation
supplemental, marginal and emergency requirements) for member banks of the
Federal Reserve System with respect to eurocurrency funding (currently referred
to as "Eurocurrency liabilities") of any maturity. Each Euro-Rate shall be
adjusted automatically as of the effective date of each change in the Euro-Rate
Reserve Percentage.
"Euro-Rate" for any day for any proposed or existing Rate Segment
corresponding to a Rate Period shall mean the rate per annum determined by the
Bank to be the rate per annum obtained by dividing (the resulting quotient to
be rounded upward to the nearest 1/100 of 1%) (A) the rate of interest (which
shall be the same for each day in such Rate Period) determined in good faith by
the Bank in accordance with its usual procedures (which determination shall be
conclusive) to be the average of the rates per annum for deposits in United
States dollars offered to major money center banks in the London interbank
market at approximately 11:00 a.m., London time, two London Business Days
prior to the first day of such Rate Period for delivery on the first day of
such Rate Period in amounts comparable to such Rate Segment (or, if there are
no such comparable amounts actively traded, the smallest amounts actively
traded) and having maturities comparable to such Rate Period by (B) a number
equal to 1.00 minus the Euro-Rate Reserve Percentage for such day.
The "Euro-Rate" may also be expressed by the following formula:
[average of rates offered to major ]
[money center banks in the London ]
[interbank market determined by the]
Euro-Rate = [Bank per subsection (A) ]
----------------------------------
[1.00 - Euro-Rate Reserve Percentage]
- 4 -
20
"Law" shall mean any law (including common law), constitution, statute,
treaty, regulation, rule, ordinance, order, injunction, writ, decree or award
of any Official Body.
"London Business Day" shall mean a day for dealings in deposits in
United States dollars by and among banks in the London interbank market.
"Notional Euro-Rate Funding Office" shall mean any branch, subsidiary
or affiliate of the Bank which the Bank, in its sole discretion, deems from
time to time to have made, maintained or funded any part of the Euro-Rate
Portion of the Loans at any time.
"Official Body" shall mean the United States of America or any foreign
government or state, any state and any political subdivision thereof, and any
agency, department, court, commission, board, bureau or instrumentality of any
of them.
"Portion": "Prime Rate Portion" shall mean at any time the part,
including the whole, of the unpaid principal amount of the Note bearing
interest at such time under the Prime Rate Option or in accordance with the
first sentence of Section 5 hereof. "Euro-Rate Portion", "As-Offered Rate
Portion" or "CD Rate Portion" shall mean at any time the part, including the
whole, of the unpaid principal amount of the Note bearing interest at such time
under the applicable option or at a rate determined by reference to the
applicable option pursuant to Section 5(c) hereof. (By definition, the sum of
the Prime Rate Portion, the As-Offered Rate Portion, the Euro-Rate Portion and
the CD Rate Portion at any time equals the unpaid principal amount of the Note
at such time.)
"Prime Rate" shall mean the interest rate per annum announced from time
to time by Bank as its Prime Rate, such interest rate to change automatically
from time to time as of the effective date of each announced change in such
Prime Rate. The Prime Rate may be greater or less than other interest rates
charged by Bank to other borrowers and is not solely based or dependent upon
the interest rate which Bank may charge any particular borrower or class of
borrowers.
"Rate Segment" of the As-Offered Rate Portion, the Euro-Rate Portion or
the CD Rate Portion at any time shall mean 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, the As-Offered Rate Portion, the Euro-Rate Portion or the CD Rate
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 the As-Offered Rate Portion, the
Euro-Rate Portion or the CD Rate Portion at any time equals the principal
amount of such Portions at such time.)
WITNESS the due execution hereof.
Attest: TUSCARORA INCORPORATED
By: _____________________________ By: _____________________________
Title: __________________________
(Corporate Seal)
Address for Notices to Borrower:
Tuscarora Incorporated
000 Xxxxx Xxxxxx
P. O. Xxx 000
Xxx Xxxxxxxx, XX 00000
Address for Notices to Borrower:
Mellon Bank, N.A.
Two Mellon Bank Center
Room 152-0270
Xxxxxxxxxx, XX 00000-0000
Attn: Middle Market Banking Dept.
- 5 -
21
EXHIBIT C
TUSCARORA INCORPORATED
Term Note No. 10
----------------
$12,000,000 Pittsburgh, Pennsylvania
June 30, 1995
FOR VALUE RECEIVED, the undersigned TUSCARORA INCORPORATED (the
"Company"), hereby promises to pay to the order of MELLON BANK, N.A. (the
"Bank"), the principal sum of Twelve Million Dollars ($12,000,000), in lawful
money of the United States, in 39 equal principal quarterly installments,
commencing on October 1, 1995 and continuing on the first day of each January,
April, July, and October thereafter through April 1, 2005, each such
installment to be in the amount of Three Hundred Thousand Dollars ($300,000),
plus a final installment payable July 1, 2005 in an amount equal to the then
unpaid balance hereof, if any; each principal payment to be made together with
interest from the date hereof on the unpaid balance of said principal sum
payable on the first day of each January, April, July, and October and on the
date of payment in full and after maturity, on demand, until payment in full,
at a rate per annum (based on a year of 365 or 366 days as the case may be)
which shall be the rate of interest then governing under the Secured Term Loan,
Revolving Credit and Line of Credit Agreement dated July 27, 1983 between the
Company and the Bank, as amended (as so amended, the "Agreement") and under the
Supplement to Term Note No. 10 which is attached hereto and incorporated by
reference herein.
Payments of both principal and interest are to be made at the principal
office of the Bank at Pittsburgh, Pennsylvania, in lawful money of the United
States of America in funds immediately available at such office. If any payment
of principal or interest on this Term Note shall become due on a Saturday,
Sunday, or bank holiday under the laws of the place where payment is received,
such payment shall be made on the next succeeding business day and such
extension of time shall in such case be included in computing interest in
connection with such payment.
The undersigned waives presentment, demand, notice, protest and all
other demands and notices in connection with delivery, acceptance, performance,
default or enforcement of this Term Note and the Agreement. In an action on
this Term Note, the Bank or its assignee need not produce or file the original
of this Term Note, but only need produce or file a photocopy of this Term Note
certified by the Bank or such assignee to be a true and correct copy.
22
This Term Note is issued pursuant to the Agreement and the Bank or any
subsequent holder hereof is entitled to the benefits thereof and shall be bound
thereby. As provided in the Agreement, this Term Note is secured by mortgage
liens and security interests. The Agreement also contains provisions, among
others, for the acceleration of the maturity hereof upon the happening of
certain events and for prepayment at the option of the Company on account of
principal hereof prior to maturity upon the terms and conditions therein
specified.
POWER TO CONFESS JUDGMENT: THE COMPANY HEREBY AUTHORIZES AND EMPOWERS
THE PROTHONOTARY OR ANY ATTORNEY OF ANY COURT OF RECORD WITHIN THE COMMONWEALTH
OF PENNSYLVANIA OR ELSEWHERE TO APPEAR FOR THE COMPANY, AND, WITH OR WITHOUT
DECLARATION FILED, CONFESS JUDGMENT AGAINST THE COMPANY IN FAVOR OF THE HOLDER
HEREOF, AS OF ANY TERM, FOR THE UNPAID BALANCE HEREOF AND INCLUDING, WITHOUT
LIMITATION, ALL ACCRUED AND UNPAID INTEREST, CHARGES, EXPENSES OR OTHER
IMPOSITIONS PAYABLE HEREUNDER, OR UNDER THE AGREEMENT OR THE SECURITY DOCUMENTS
WHETHER BY ACCELERATION OR OTHERWISE WITH COSTS OF SUIT AND A REASONABLE
ATTORNEY'S COMMISSION AS CERTIFIED BY THE HOLDER HEREOF WITH RELEASE OF ALL
ERRORS, WAIVING ALL LAWS EXEMPTING REAL OR PERSONAL PROPERTY FROM EXECUTION, TO
THE EXTENT THAT SUCH LAWS MAY LAWFULLY BE WAIVED BY THE COMPANY. NO SINGLE
EXERCISE OF THE FOREGOING POWER TO CONFESS JUDGMENT SHALL BE DEEMED TO EXHAUST
THE POWER, WHETHER OR NOT ANY SUCH EXERCISE SHALL BE HELD BY ANY COURT TO BE
VALID, VOIDABLE, OR VOID, BUT THE POWER SHALL CONTINUE UNDIMINISHED AND IT MAY
BE EXERCISED FROM TIME TO TIME AS OFTEN AS HOLDER SHALL ELECT, UNTIL SUCH TIME
AS HOLDER SHALL HAVE RECEIVED PAYMENT IN FULL.
WITNESS the due execution hereof.
ATTEST: TUSCARORA INCORPORATED
By: ________________________________ By: _______________________________
Title: _____________________________ Title: ____________________________
[CORPORATE SEAL]
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23
Supplement to Term Note No. 10
------------------------------
This Supplement to Term Note No. 10 (this "Supplement") is annexed to
and is part of Term Note No. 10 dated June 30, 1995 of Tuscarora Incorporated
("Borrower") payable to Mellon Bank, N.A. ("Bank") in the stated principal
amount of Twelve Million Dollars ($12,000,000). Such Term Note, as supplemented
by this Supplement, shall be referred to herein as the "Note".
1. INTEREST PAYMENTS. Interest on the unpaid principal amount of this
Note under the Prime Rate Portion shall be payable quarterly on the first day
of each January, April, July and October and on the date of payment in full.
Interest on the unpaid principal amount of the Note under the As-Offered Rate,
Euro-Rate and CD Rate Portions shall be payable on the last day of the Rate
Period of the corresponding interest rate option.
2. INTEREST RATE OPTIONS. The unpaid principal amount of this Note
shall bear interest for each day until due on one or more bases selected by
Borrower from among the Interest Rate Options set forth below. Borrower
understands and agrees: (a) that the Bank may in its sole discretion from time
to time determine that the right of Borrower to select, convert to or renew the
As-Offered Rate Option, the Euro-Rate Option or the CD Rate Option is not
available and (b) that subject to the provisions of this Note Borrower may
select any number of such Options to apply simultaneously to different parts of
the unpaid principal amount of this Note and may select any number of Rate
Segments to apply simultaneously to different parts of the As-Offered Rate
Portion, the Euro-Rate Portion or the CD Rate Portion. Provided, however, that
borrowings under the Euro-Rate Option or CD Rate Option shall be in minimum
amounts of $500,000 and borrowings under As-Offered Rate Option shall be in the
minimum amount of $1,000,000.
Available Interest Rate Options
-------------------------------
PRIME RATE OPTION: A rate per annum (computed on the basis of a year
of 365 or 366 days, as the case may be) for each day equal to the
Prime Rate plus 0.25% for such day.
AS-OFFERED RATE OPTION: For each Rate Segment of the As-Offered
Rate Portion, a rate per annum (computed on the basis of a year of 360
days and actual days elapsed) for each day equal to the As-Offered Rate
for such Rate Segment for such day.
EURO-RATE OPTION: For each Rate Segment of the Euro-Rate Portion, a
rate per annum (computed on the basis of a year of 360 days and actual
days elapsed) for each day equal to the Euro-Rate for such Rate
Segment for such day plus 1.50%.
CD RATE OPTION: For each Rate Segment of the CD Rate Portion, a rate
per annum (computed on the basis of a year of 360 days and actual days
elapsed) for each day equal to the CD Rate for such Rate Segment for
such day plus 1.50%.
3. RATE PERIODS. At any time when Borrower selects, converts to or
renews the As-Offered Rate Option, CD Rate Option or the Euro-Rate Option, the
Borrower shall fix a period acceptable to the Bank in the Bank's sole
discretion (the "Rate Period"), which Rate Period shall not exceed 180 days,
during which such Option shall apply to the corresponding Rate Segment. The
Bank's right to payment of principal and interest under this Note shall in no
way be affected by the fact that one or more Rate Periods may be in effect.
Interest Rate Options shall be selected in a manner which shall ensure that
Borrower shall be able to make scheduled payments of principal under the Note
without incurring liability under Section 9 hereof; provided. however, that in
the event that Borrower prepays any Rate Segment bearing interest under the
As-Offered Rate Portion, the Euro-Rate Portion or the CD Rate Portion in order
to make a scheduled payment of principal under the Note, Borrower shall
indemnify the Bank as provided in Section 9 hereof.
4. RATE SEGMENTS. Every selection of, conversion to or renewal of the
As-Offered Rate Option, CD Rate Option or the Euro-Rate Option shall be in a
principal amount selected by the Borrower and acceptable to the Bank in the
Bank's sole discretion.
24
5. INTEREST AFTER MATURITY. After the principal amount of any part of
the Prime Rate Portion shall have become due. such Prime Rate Portion shall
bear interest for each day until paid (before and after judgment) at a rate
per annum (based on a year of 365 or 366 days, as the case may be) which for
each day shall be the greater of (a) 2% above the Prime Rate Option on the day
such part of the Prime Rate Portion became due and (b) 2% above the Prime Rate
Option, such interest rate to change automatically from time to time effective
as of the effective date of each change in the Prime Rate. After the principal
amount of any part of the As-Offered Rate Portion, the Euro-Rate Portion or CD
Rate Portion shall have become due, such part shall bear interest for each day
until paid (before and after judgment) (c) until the end of the applicable
then-current Rate Period at a rate per annum 2% above the As-Offered Rate
Option, CD Rate Option or Euro-Rate Option otherwise applicable to such part
and (d) thereafter in accordance with the previous sentence.
6. SELECTION, CONVERSION OR RENEWAL OF RATE OPTIONS. Subject to the
other provisions of this Note, the Borrower may select any interest rate Option
to apply to any borrowing evidenced by this Note. Subject to the other
provisions of this Supplement, the Borrower may convert any part of the unpaid
principal amount of the Note from any interest rate Option to any other
interest rate Option and may renew the As-Offered Rate Option, CD Rate Option
or the Euro-Rate Option as to any Rate Segment: (a) at any time with respect to
conversion from the Prime Rate Option to another Option and (b) at the
expiration of any Rate Period with respect to conversion from or renewals of
the As- Offered Rate Option, CD Rate Option or the Euro-Rate Option, as the
case may be, as to the Rate Segment corresponding to such expiring Rate Period.
Whenever the Borrower desires to select, convert or renew any interest rate
Option, the Borrower shall give the Bank notice (which shall be irrevocable) no
later than 10:00 a.m., Pittsburgh time, on a Business Day which is at least two
Business Days (or, in the case of selection of, conversion to or renewal of the
Euro-Rate Option, at least two London Business Days) in advance of the day
(which shall be a Business Day) on which such selection, conversion or renewal
is to occur. If such notice has been duly given, and if the Bank in its sole
discretion approves the proposed selection, conversion or renewal, after the
date specified in such notice interest shall be calculated upon the unpaid
principal amount of the Note taking into account such selection, conversion or
renewal.
7. PRIME RATE FALLBACK. If any Rate Period expires, any part of the
Rate Segment corresponding to such Rate Period which has not been converted or
renewed in accordance with Section 6 hereof automatically shall be converted to
the Prime Rate Option. If the Borrower fails to select, or if the Bank fails to
approve, an interest rate Option to apply to any new borrowing evidenced by the
Note, such new borrowing shall be deemed to be at the Prime Rate Option.
8. PREPAYMENTS. The Borrower shall have the right at its option from
time to time to prepay the Prime Rate Portion in whole or in part. The Borrower
shall have no right to prepay any part of the As-Offered Rate Portion, CD Rate
Portion or the Euro-Rate Portion at any time without the prior written consent
of Bank except that the Borrower may prepay any part of any Rate Segment at the
expiration of the Rate Period corresponding to such Rate Segment.
9. INDEMNITY. The Borrower shall indemnify the Bank against any loss or
expense (including loss of margin) which the Bank has sustained or incurred as
a consequence of:
(i) payment, prepayment or conversion of any part of any Rate
Segment of the As-Offered Rate Portion, the Euro-Rate Portion or the CD
Rate Portion on a day other than the last day of the corresponding Rate
Period (whether or not any such payment is pursuant to demand by the
Bank under this Note and whether or not any such payment, prepayment or
conversion is consented to by the Bank, unless the Bank shall have
expressly waived such indemnity in writing);
(ii) attempt by the Borrower to revoke in whole or part any
irrevocable notice given pursuant to Section 6 of this Note; or
(iii) breach of or default by any Debtor in the performance or
observance of any covenant or condition contained in this Note or any
separate security, guarantee or suretyship agreement between Bank and
any Debtor.
If the Bank sustains any such loss or expense it shall from time to time notify
the Borrower of the amount determined in good faith by the Bank (which
determination shall be conclusive) to be necessary to indemnify the Bank for
such loss or expense. Such amount shall be due and payable by the Borrower on
demand.
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25
10. COMPENSATION FOR TAXES, RESERVES AND EXPENSES ON OUTSTANDING LOANS.
If any Law or guideline or interpretation or application thereof by any Of-
ficial Body charged with the interpretation or administration thereof or
compliance with any request or directive of any central bank or other Official
Body (whether or not having the force of law):
(i) subjects the Bank or any Notional Euro-Rate Funding Office
to any tax, or changes the basis of taxation with respect to the
Agreement, the Notes, the Loans or payments by the Company of
principal, interest or other amounts due from the Company hereunder or
under the Notes (except for taxes on the overall net income of the Bank
or such Notional Euro-Rate Funding Office imposed by the jurisdiction
in which the Bank's principal executive office or Notional Euro-Rate
Funding Office is located:
(ii) imposes, modifies or deems applicable any reserve, special deposit
or similar requirement against assets held by, credit extended by,
deposits with or for the account of, or other acquisition of funds by,
the Bank of any Notional Euro-Rate Funding Office (other than
requirements expressly included herein in the determination of the CD
Rate or Euro-Rate, as the case may be, hereunder); or
(iii) imposes upon the Bank or any Notional Euro-Rate Funding
Office any other condition or expense with respect to the Agreement,
Notes, or its making, maintenance or funding of any part of the Loans,
including, without limitation, any capital adequacy or similar
requirements;
and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, or impose any expense upon the Bank or any Notional
Euro-Rate Funding Office with respect to the Agreement, the Notes or the
making, maintenance or funding of any part of the Loans by an amount which the
Bank deems to be material (the Bank being deemed for this purpose to have made,
maintained or funded each Rate Segment of the CD Rate Portion, the As-Offered
Rate Portion and the Euro-Rate Portion from a Corresponding Source of Funds),
the Bank shall from time to time notify the Company of the amount determined in
good faith (using any averaging and atribution methods employed in good faith)
by the Bank (which determination shall be conclusive) to be necessary to
compensate the Bank or such Notional Euro-Rate Funding Office for such increase
in cost, reduction in income or additional expense. Such amount shall be due
and payable by the Company to the Bank ten (10) Business Days after such notice
is given.
11. RECORDS. The unpaid principal amount of this Note, the unpaid
interest accrued hereon, the interest rate or rates applicable to such
unpaid principal amount, and the duration of such applicability shall at
all times be ascertained from the records of Bank, which shall be conclusive
absent manifest error.
12. NOTICES. All notices under this Note shall be in writing or by
telephone promptly confirmed in writing, and all such writings shall be sent by
first-class express or certified mail or by hand delivery, in all cases with
charges prepaid. All notices shall be sent to the applicable party at the
address stated below or in accordance with the last unrevoked written direction
from such party to the other parties hereto. All notices by the Borrower shall
be effective when received by the Bank and all notices by the Bank shall be
effective when telephoned, deposited in the mail or received, whichever is
first. Written notices or confirmations by the Borrower shall not be deemed
records of the Bank within the meaning of Section 11 of this Note regardless of
whether received by the Bank. The Bank may conclusively rely without inquiry on
any notice or confirmation purporting to be from or authorized by the Borrower.
13. DEFINIATIONS. As used in this supplement:
"As-Offered Rate" shall mean a rate per annum offered by Bank in its
sole discretion, such interest rate to remain fixed for the duration of such
Rate Period.
"Assessment Rate" for any day shall mean the rate per annum (rounded
upward to the nearest 1/100 of 1%) determined in good faith by Bank (which
determination shall be conclusive) as representing for such day the maximum
effective rate per annum payable by Bank to the Federal Deposit Insurance
Corporation (or any successor) for such day for insurance on dollar time
deposits of any maturity, exclusive of any credit allowed against such annual
assessment on account of assessment payments made or to be made by Bank. Each
CD Rate shall be adjusted automatically as of the effective date of any change
in the Assessment Rate.
"Business Day" shall mean any day on which Bank is open for business at
the location where the Note is payable.
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26
"Corresponding Source of Funds" shall mean: (i) in the case of any
Funding Segment of a CD Rate Portion, the proceeds of hypothetical issuances by
the Bank of one or more of its certificates of deposit at the beginning of the
CD Rate Funding Period corresponding to such Funding Segment, having maturities
approximately equal to such CD Rate Funding period and in an aggregate amount
approximately equal to such Funding Segment; and (ii) in the case of any
Funding Segment of a Euro-Rate Portion, the proceeds of hypothetical receipts
by a Notional Euro-Rate Funding Office or by the Bank through a Notional
Euro-Rate Funding Office of one or more Dollar deposits in the interbank
eurodollar market at the beginning of the Euro-Rate Funding Period
corresponding to such Funding Segment, having maturities approximately equal to
such Euro-Rate Funding Period and in an aggregate amount approximately equal to
such Funding Segment.
"CD Rate Reserve Percentage" for any day shall mean the percentage
(rounded upward to the nearest 1/100 of 1%), as determined in good faith by
Bank (which determination shall be conclusive) as representing for such day the
maximum effective reserve requirement (including without limitation
supplemental, marginal and emergency requirements) for Bank in respect of
nonpersonal time deposits of any maturity in dollars in the United States. Each
CD Rate shall be adjusted automatically as of the effective date of any change
in the CD Rate Reserve Percentage.
"CD Rate" for any day for any proposed or existing Rate Segment
corresponding to a Rate Period shall mean the rate per annum determined by Bank
by adding
(A) the rate per annum obtained by dividing (the resulting
quotient to be rounded upward to the nearest l/l00 of 1%) (1) the rate
of interest (which shall be the same for each day in such Rate Period)
estimated in good faith by Bank in accordance with its usual procedures
(which determination shall be conclusive) to be the average of the
secondary market bid rates at or about 11 :00 a.m., Eastern time, on
the first day of such Rate Period by dealers of recognized standing for
negotiable certificates of deposit of major money center banks for
delivery on such day in amounts comparable to such Rate Segment (or, if
there are no such comparable amounts actively traded, the smallest
amounts actively traded) and having maturities comparable to such Rate
Period by (2) a number equal to 1.00 minus the CD Rate Reserve
Percentage for such day and
(B) the Assessment Rate for such day.
The "CD Rate" may also be expressed by the following formula:
[average of secondary market bid ]
[rates estimated by the Bank per ]
CD Rate = [subsection (A)(1) ] + Assessment
-------------------------------- Rate
[1.00 - CD Rate Reserve Percentage]
"Euro-Rate Reserve Percentage" for any day shall mean the percentage
(rounded upward to the nearest 1/100 of 1%), as determined in good faith by the
Bank (which determination shall be conclusive) as representing for such day the
maximum effective reserve requirement (including without limitation
supplemental, marginal and emergency requirements) for member banks of the
Federal Reserve System with respect to eurocurrency funding (currently referred
to as "Eurocurrency liabilities") of any maturity. Each Euro-Rate shall be
adjusted automatically as of the effective date of each change in the Euro-Rate
Reserve Percentage.
"Euro-Rate" for any day for any proposed or existing Rate Segment
corresponding to a Rate Period shall mean the rate per annum determined by the
Bank to be the rate per annum obtained by dividing (the resulting quotient to
be rounded upward to the nearest 1/100 of 1%) (A) the rate of interest (which
shall be the same for each day in such Rate Period) determined in good faith by
the Bank in accordance with its usual procedures (which determination shall be
conclusive) to be the average of the rates per annum for deposits in United
States dollars offered to major money center banks in the London interbank
market at approximately 11 :00 a.m., London time, two London Business Days
prior to the first day of such Rate Period for delivery on the first day of
such Rate Period in amounts comparable to such Rate Segment (or, if there are
no such comparable amounts actively traded, the smallest amounts actively
traded) and having maturities comparable to such Rate Period by (B) a number
equal to 1.00 minus the Euro-Rate Reserve Percentage for such day.
The "Euro-Rate" may also be expressed by the following formula:
[average of rates offered to major ]
[money center banks in the London ]
[interbank market determined by the]
Euro-Rate =[Bank per subsection (A) ]
-----------------------------------
[1.00 - Euro-Rate Reserve Percentage]
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27
"Law" shall mean any law (including common law), constitution, statute,
treaty, regulation, rule, ordinance, order, injunction, writ, decree or award
of any Official Body.
"London Business Day" shall mean a day for dealings in deposits in
United States dollars by and among banks in the London interbank market.
"Notional Euro-Rate Funding Office" shall mean any branch, subsidiary
or affiliate of the Bank which the Bank, in its sole discretion, deems from
time to time to have made, maintained or funded any part of the Euro-Rate
Portion of the Loans at any time.
"Official Body" shall mean the United States of America or any foreign
government or state, any state and any political subdivision thereof, and any
agency, department, court, commission, board, bureau or instrumentality of any
of them.
"Portion": "Prime Rate Portion" shall mean at any time the part,
including the whole, of the unpaid principal amount of the Note bearing
interest at such time under the Prime Rate Option or in accordance with the
first sentence of Section 5 hereof. "Euro-Rate Portion", "As-Offered Rate
Portion" or "CD Rate Portion" shall mean at any time the part, including the
whole, of the unpaid principal amount of the Note bearing interest at such time
under the applicable option or at a rate determined by reference to the
applicable option pursuant to Section 5 (c) hereof. (By definition, the sum of
the Prime Rate Portion, the As-Offered Rate Portion, the Euro-Rate Portion and
the CD Rate Portion at any time equals the unpaid principal amount of the Note
at such time.)
"Prime Rate" shall mean the interest rate per annum announced from time
to time by Bank as its Prime Rate, such interest rate to change automatically
from time to time as of the effective date of each announced change in such
Prime Rate. The Prime Rate may be greater or less than other interest rates
charged by Bank to other borrowers and is not solely based or dependent upon
the interest rate which Bank may charge any particular borrower or class of
borrowers.
"Rate Segment" of the As-Offered Rate Portion, the Euro-Rate Portion or
the CD Rate Portion at any time shall mean 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, the As-Offered Rate Portion, the Euro- Rate Portion or the CD Rate
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 arnounts of all Rate Segments of the As-Offered Rate Portion, the
Euro-Rate Portion or the CD Rate Portion at any time equals the principal
amount of such Portions at such time.)
WITNESS the due execution hereof.
Attest: TUSCARORA INCORPORATED
By: ________________________________ By: _______________________________
Title: ____________________________
(Corporate Seal)
Address for Notices to Borrower:
Tuscarora Incorporated
000 Xxxxx Xxxxxx
X.X. Xxx 000
Xxx Xxxxxxxx, XX 00000
Address for Notices to Bank:
Mellon Bank, N.A.
Two Mellon Bank Center
Room 152-0270
Xxxxxxxxxx, XX 00000-0000
ATTN: Middle Market Banking Dept.
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