EXHIBIT 10(d)
LINE OF CREDIT AGREEMENT
LINE OF CREDIT AGREEMENT, dated as of January 14, 1997,
between NUCLEAR RESEARCH CORPORATION, a Pennsylvania corporation, with its
principal place of business at 000 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx,
00000, (the "Borrower") and CORESTATES BANK, N.A. ("Bank"), with offices at 0000
Xxxx Xxxxx Xxxx, Xxxxx 000, Xxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx, 00000. The
parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01. Defined Terms. As used in this Agreement, the
following terms have the following meanings (terms defined in the singular to
have the same meaning when used in the plural and vice versa):
"Affiliate" means any person (1) which directly or indirectly
controls, or is controlled by, or is under common control with the Borrower or a
Subsidiary; (2) which directly or indirectly beneficially owns or holds
twenty-five percent (25%) or more of any class of voting stock of the Borrower
or any Subsidiary; or (3) twenty-five percent (25%) or more of the voting stock
of which is directly or indirectly beneficially owned or held by the Borrower or
a Subsidiary. The term control means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
person, whether through the ownership of voting securities, by contract, or
otherwise.
"Agreement" means this Line of Credit Agreement, as amended,
supplemented, or modified from time to time.
"Bank" means CoreStates Bank, N.A. ("CoreStates"), unless the
context indicates otherwise.
"Borrower" means Nuclear Research Corporation, unless the
context indicates otherwise.
"Business Day" means any day other than a Saturday, Sunday, or
other day on which commercial banks in Philadelphia are authorized or required
to close under the laws of the Commonwealth of Pennsylvania.
"Capitalized Lease Obligations" means any amount payable with
respect to any lease of any tangible or intangible property (whether real,
personal or mixed), however denoted, which either (l) is required by GAAP to be
reflected as a liability on the face of the balance sheet
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of the lessee, or (2) based on actual circumstances existing and ascertainable
either at the commencement of the term of such lease or at any subsequent time
at which any property becomes subject thereto, can reasonably by anticipated to
impose on such lessee substantially the same economic risks and burdens, having
regard to such lessee's obligations and the lessor's rights under the lease both
during and at the termination of the lease, as would be imposed on the lessee by
any lease which is required to be so reflected on the balance sheet of the
lessee or by the ownership of the leased property.
"Collateral" means all property which is subject or is to be
subject to the Lien granted by the Security Agreements.
"Debt" means (l) indebtedness or liability for borrowed money
or for the deferred purchase price of property or service (including trade
obligations); (2) obligations as lessee under Capital Lease Obligations; (3)
current liabilities in respect of unfunded vested benefits under any Plan; (4)
obligations under letters of credit issued for the account of any Person; (5)
all obligations arising under acceptance facilities; (6) all guaranties,
endorsements (other than for collection or deposit in the ordinary course of
business), and other contingent obligations to purchase, to provide funds for
payment, to supply funds to invest in any Person, or otherwise to assure a
creditor against loss; and (7) obligations secured by any Lien on property owned
by any Person, whether or not the obligations have been assumed.
"Default" means any of the events specified in Section 7.01,
whether or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Environmental Law" means any presently existing or hereafter
enacted or decided federal, state or local statutory or common laws relating to
pollution or protection of the environment, including without limitation, any
common law of nuisance or trespass, and any law or regulation relating to
emissions, discharges, releases or threatened release of pollutants,
contaminants or chemicals or industrial, toxic or hazardous substances or wastes
into the environment (including without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants or chemicals or industrial,
toxic or hazardous substances or waste.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations and published
interpretations thereof.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) which together with the Borrower would be treated as a single
employer under Section 4001 of ERISA.
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"Event of Default" means any of the events specified in
Section 7.01, provided that any requirement for the giving of notice, the lapse
of time, or both, or any other condition, has been satisfied.
"GAAP" means generally accepted accounting principles in the
United States.
"Guarantors" mean N.R.C. Acquisition Corp., a Pennsylvania
corporation and Measurement Dynamics LLC, a New Jersey limited liability
company.
"Guaranty Agreements" mean the Guaranty Agreements dated as of
the date of this Agreement, as amended, modified or supplemented from time to
time, executed and delivered by the Guarantors to the Bank.
"Hazardous Materials" means any contaminants, hazardous
substances, regulated substances or hazardous wastes which may be the subject of
liability pursuant to any Environmental Law.
"Head Office" means the principal office of CoreStates Bank,
N.A. at 0000 Xxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000.
"Lending Office" means for each type of Loan, the Lending
Office of the Bank (or of an affiliate of the Bank) designated for such type of
Loan on the signature pages hereof or such other office of the Bank (or of an
affiliate of the Bank) as the Bank may from time to time specify to the Borrower
as the office at which its Loans of such type are to be made and maintained.
"Letters of Credit" has the meaning assigned to that term in
Section 2.14 of this Agreement, but in no event shall such term include the
existing performance Letter of Credit issued by Bank to Kepco in the approximate
amount of $647,109.00 and any other Letters of Credit issued by Bank in
connection with Borrower's sales of large radiation monitoring systems where
Bank, in its sole discretion, upon request of Borrower and after applying Bank's
normal credit extension policies and procedures, approves such performance
Letters of Credit and agrees that same shall not be backed by this Line of
Credit Agreement.
"Lien" means any mortgage, deed of trust, pledge, security
interest, hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or other), or preference, priority, or other security agreement or
preferential arrangement, charge, or encumbrance of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of any financing statement under
the Uniform Commercial Code or comparable law of any jurisdiction to evidence
any of the foregoing).
"Loan(s)" means the Line of Credit Loans.
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"Loan Document(s)" means this Agreement, the Note, the
Mortgage, the Guaranty Agreements, the Assignment of Proceeds of Letter of
Credit, the General Assignment of Government Contracts and Proceeds Thereof, and
the Security Agreements.
"Note" means the Master Demand Note.
"Person" means an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated association, joint
venture, governmental authority, or other entity of whatever nature.
"Prime Rate" means the rate of interest for loans established
by Bank at its Head Office from time to time as its prime rate.
"Security Agreement(s)" means, collectively, the Security
Agreements to be delivered by the Borrower and the Guarantors under the terms of
this Agreement, unless the context indicates otherwise.
"Subsidiary" means a corporation the shares of stock of which
having ordinary voting power (other than stock having such power only by reason
of the happening of a contingency) to elect a majority of the board of directors
or other managers of such corporation are at the time owned, or the management
of which is otherwise controlled, directly or indirectly through one or more
intermediaries or both, by the Borrower or Guarantors.
Section 1.02. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP, and all
financial data submitted pursuant to this Agreement shall be prepared in
accordance with such principles.
ARTICLE II
AMOUNT AND TERMS OF THE LOANS; SECURITY FOR THE LOANS
Section 2.01. Line of Credit. The Bank agrees, on the terms
and conditions hereinafter set forth, to make loans (the "Line of Credit Loans")
to the Borrower from time to time, in accordance with the terms of the Master
Demand Note as defined below, in an aggregate amount not to exceed, at any one
time outstanding, a sum equal to Five Million Five Hundred Thousand Dollars
($5,500,000.00) (the "Borrowing Availability"). The Borrowing Availability shall
be reduced from time to time by the face amount of all Letters of Credit then
outstanding and may, at Borrower's option, be permanently reduced from time to
time in amounts designated by Borrower to Bank. In the event of such reduction
by Borrower, the Note and other Loan Documents shall be modified as required by
Bank to reflect such reduction. Within the limits of the amount set forth in
this Section 2.01, and subject to the provisions of this Agreement, including,
without limitation, the Bank's right to demand repayment of the Line of Credit
Loans at any time, the Borrower may borrow, repay and reborrow under this
Section 2.01.
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Section 2.02. Notice and Manner of Borrowing.
(1) A person duly authorized under Subsection 2.02(b)
below may request Loans by telephonic (confirmed in writing) or written notice
to Bank not in excess of the maximum amount of the Line of Credit in the
aggregate at any time outstanding. If Bank elects to make a Loan, then Bank will
credit Borrower's designated account with Bank or wire such sum upon Borrower's
written instructions. Notwithstanding the foregoing, unless Bank notifies
Borrower to the contrary, Bank agrees, at Borrower's request, to provide to
Borrower a daily automatic sweep service (the "Sweep") by way of a debit against
or credit to Borrower's designated account with Bank by automatically making a
Loan when and in the amount necessary to be applied to cover items charged
against that account not otherwise covered by funds in the account or by
automatically transferring excess funds on deposit in that account to be applied
to pay down Loans, as applicable, as of the close of each banking day. Upon
Borrower's request Bank will forward to Borrower a written advice or statement
of each Loan which will specify the manner of disbursement and such other terms
as may have been agreed to.
(2) Any and all documents required to be executed in
conjunction with Loans may be signed by any of the officers or other persons
duly authorized by Borrower's borrowing resolutions as in effect from time to
time ("Authorized Person"), provided that a copy of all such resolutions is
certified by the Secretary of Borrower's corporation and delivered to Bank. The
Bank shall incur no liability to Borrower or any other person in acting upon any
request for a Loan which Bank believes in good faith to have been made by a
person duly authorized to borrower on Borrower's behalf as set forth in
Borrower's borrowing resolutions.
Section 2.04. Interest. The Borrower shall pay interest to the
Bank on the outstanding and unpaid principal amount of the Line of Credit Loans
made under this Agreement at a rate per annum equal to the Prime Rate.
Any change in the interest rate based on the Prime
Rate resulting from a change in the Prime Rate shall be effective as of the
opening of business on the day on which such change in the Prime Rate becomes
effective.
Interest on each Note shall be calculated on the
basis of a year of three hundred sixty-five (365) days for the actual number of
days elapsed.
Each overdue payment of principal on any Loan and,
to the extent permitted by law, each overdue payment of interest shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to 2% in excess of the rate of interest borne by the overdue Loan; provided that
no interest shall accrue hereunder in excess of the maximum rate permitted by
law.
Interest on the Loans shall be paid monthly in
immediately available funds at the Head Office of Bank or such other location as
Bank may direct in accordance with the terms of the Note.
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Section 2.05. Note. The Line of Credit Loans made by the Bank
under this Agreement shall be evidenced by, and repaid with interest in
accordance with, a single promissory note of the Borrower duly completed, in the
principal amount of Five Million Five Hundred Thousand Dollars ($5,500,000.00),
dated the date of this Agreement, payable to the Bank (said promissory note, as
it may be hereafter amended, renewed or extended, the "Master Demand Note"). The
amount of each Line of Credit Loan and payment of principal and interest
received by the Bank on account of the Line of Credit Loans, shall be evidenced
by the Bank's records, which shall, in the absence of error, be conclusive as to
the outstanding balance of the Line of Credit Loans made by the Bank and
interest thereon.
Section 2.06. Method of Payment. The Borrower shall make each
payment of principal of and interest on the respective shares of all Loans made
under this Agreement and under the Note and all fees owing to the Bank on the
date when due in lawful money of the United States to Bank at its Head Office or
other designated location in immediately available funds. The Borrower hereby
authorizes the Bank to charge from time to time against any account of the
Borrower with Bank any amount so due. Borrower hereby further authorizes Bank to
make the Sweep. Borrower shall pay to Bank promptly such amounts as may be due
if Borrower's deposit account balances are insufficient. Whenever any payment to
be made under this Agreement or under the Note shall be stated to be 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 the computation of the payment of interest.
Section 2.07. Use of Proceeds. The proceeds of the Loans
hereunder shall be used by the Borrower for working capital requirements, and to
back Letters of Credit issued by Bank for the benefit of Borrower, and for
Borrower's other business purposes.
Section 2.08. Security for the Loans. As security for the
Loans and for all amounts payable hereunder and under the Note as well as for
all other existing and future liabilities, whether absolute or contingent, due
or to become due of the Borrower to the Bank under any other loans or extensions
of credit by the Bank to the Borrower, the Bank shall receive the following:
(l) Valid, perfected first liens on and security
interests in the following Collateral:
(i All of the property, real or personal,
tangible or intangible of the Borrower, now owned or hereafter acquired,
referred to in the Security Agreements, including without limiting the
generality of the foregoing, all of the Borrower's accounts, accounts
receivable, inventory and return goods, machinery, equipment, furniture,
fixtures, leasehold improvements, chattel paper, documents of title, contract
rights and general intangibles, including registered trademarks, trade names and
patents. The security agreements, UCC-l Financing Statements, and all other
instruments necessary to create a perfected first lien in the aforesaid assets
shall be referred to herein collectively as the "Borrower's Security
Agreements".
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(ii All of the property, real or personal,
tangible or intangible of the Guarantors, now owned or hereafter acquired,
referred to in the Security Agreements, including without limiting the
generality of the foregoing, all of the Guarantors' accounts, accounts
receivable, inventory and return goods, machinery, equipment, furniture,
fixtures, leasehold improvements, chattel paper, documents of title, contract
rights and general intangibles, including registered trademarks, trade names and
patents. The security agreements, UCC-l Financing Statements, and all other
instruments necessary to create a perfected first lien in the aforesaid assets
shall be referred to herein collectively as the "Guarantors' Security
Agreements."
(2) A valid fifth lien mortgage ("Mortgage")
executed by the Borrower, covering the real estate located at 000 Xxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxxxxxx (the "Real Estate"), and all fixtures, machinery and
equipment necessary or incidental to the general operation and maintenance
thereof and all renewals and replacements thereof or additions thereto, and such
other property as the Bank may reasonably require, all as is more specifically
described in the Mortgage. The Mortgage shall be a fifth lien on a good and
marketable fee simple title to the mortgaged property, free and clear of all
prior liens, restrictions, easements and other encumbrances and title objections
except such as may have been approved in writing by the Bank, and except a
mortgage to Bank in the amount of One Million One Hundred Sixty Thousand Dollars
($1,160, 000.00) dated May 21, 1993, two existing mortgages in favor of Bank
each in the amount of Three Hundred Thousand Dollars ($300,000.00) dated
February 21, 1992 and August 21, 1995, respectively, and a mortgage to Bank in
the amount of One Million Eight Hundred Thousand Dollars ($1,800,000.00), dated
even date herewith.
(3) Unconditional Guaranty Agreements, in favor of
Bank, executed by the Guarantors, which Guaranty Agreements shall guarantee
payment and not merely collection of the entire indebtedness evidenced by the
Note, and also the prompt performance of all obligations under the Note and this
Agreement, and, as to the Guaranty of N.R.C. Acquisition Corp., the prompt
performance of all obligations under all other documents evidencing the Loans
and all other payments and obligations from Borrower to Bank now existing or
hereafter arising, provided, however, that the Guaranty Agreement of Measurement
Dynamics LLC, as such Agreement relates to the Line of Credit Agreement, shall
be limited only to the maximum of Four Hundred Thousand Dollars ($400,000.00)
owed under the Line of Credit Agreement plus interest and costs relating to such
amount.
(4) Assignment of a confirmed letter of credit and
the proceeds thereof in the original face amount of Six Million Four Hundred
Seventy-One Thousand Ninety Dollars and Ninety-Five Cents ($6,471,090.95) issued
by the Korea Exchange Bank, said assignment being referred to herein as the
"Assignment of the Korea Exchange Bank Letter of Credit".
(5) Assignment of all existing and future government
contracts, and the proceeds thereof, between Borrower and the United States
Government, or any agency, department or unit thereof, where the total contract
amount exceeds Five Hundred Thousand Dollars ($500,000.00). Borrower shall
execute a General Assignment of Government Contracts
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on the date hereof and, subject to the provisions set forth below, provide
specific assignments of and consents to the assignment of those contracts
promptly after each such contract is executed.
(6) At Bank's request, confirmation by CoreStates
Trade Finance Department and assignment of any and all future letters of credit,
and the proceeds thereof, to or in favor of Borrower as beneficiary where the
amount of such letter of credit exceeds One Million Dollars ($1,000,000.00).
To the foregoing ends, contemporaneously with the execution
and delivery of this Agreement, (i) the Borrower will execute and deliver to the
Bank the Mortgage and Borrower's Security Agreements, (ii) the Borrower will
execute and deliver to the Bank the Assignment of the Korea Exchange Bank Letter
of Credit and the General Assignment of Government Contracts, (iii) the
Guarantors will execute and deliver to the Bank the Guaranty Agreements, and
(iv) the Guarantors will execute and deliver to the Bank the Guarantors'
Security Agreements. If, as and when letters of credit are issued to or in favor
of Borrower as beneficiary as provided in subsection (6) above, Borrower shall,
promptly upon request of Bank, provide confirmation to the CoreStates Trade
Finance Department and execute all reasonably required documentation to effect
the assignment of the letter of credit to Bank. Borrower shall make all
reasonable efforts and take all required steps to attempt to obtain the specific
assignment of and consent to the assignment of all existing and future contracts
as specified in Section 2.08(5) above, such efforts to include, without
limitation, the preparation and filing of all initial documents and requests,
the preparation and filing of appropriate responses to requests for follow-up
documentation and follow-up efforts on all such requests by telephone and
written correspondence. Copies of any and all correspondence to and from any
government, governmental agency or unit thereof, in connection with all such
Assignments shall be supplied to Bank contemporaneously as such correspondence
is generated or received.
Section 2.09. Line of Credit Agreement Not a Commitment to
Lend. Borrower acknowledges and agrees that no provision hereof, and no course
of dealing by Bank in connection herewith, shall be deemed to create or shall
imply the existence of any commitment or obligation on the part of Bank to make
the Line of Credit Loans or any advances thereunder. The Line of Credit Loans
and all advances thereunder shall be made solely at Bank's discretion.
Section 2.10. Right of Bank to Demand Repayment.
Notwithstanding anything to the contrary in this Agreement or any of the other
agreements or documents executed and delivered in connection herewith, the Bank
may at any time in their sole discretion with or without cause and
notwithstanding that there shall not have occurred a default hereunder demand
payment of the Loans. The defaults described in Article VII hereof shall not
prescribe the conditions under which the Bank may demand payment or limit in any
manner the demand nature of the Master Demand Note issued pursuant to Section
2.05 of this Agreement. Upon the occurrence of any default which is continuing
and which is not otherwise waived by the Bank, the Bank shall have immediately
available to it the rights and remedies set forth under Article VII of this
Agreement.
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Section 2.11. Late Fees. In the event any of the aforesaid
payments of interest, in whole or in part, are fifteen (15) days beyond their
due date, Borrower shall pay Bank a "late charge" of five cents ($.05) for each
dollar ($1.00) so overdue to cover the extra expenses of handling delinquent
payments.
Section 2.12. Unutilized Line Fee. The Borrower shall pay to
the Bank annually, on January l of each year, a fee with respect to the unused
portion of the Borrowing Availability equal to one-quarter percent (1/4%) per
year (based on a three hundred sixty-five [365] day year) of the average unused
portion of the Borrowing Availability for the preceding calendar year (or
portion thereof). The unused portion of the Borrowing Availability shall, for
the purpose of calculating the unutilized line fee pursuant to this Section
2.12, be deemed to be, for any day this Agreement is in effect, the difference
between Five Million Five Hundred Thousand Dollars ($5,500,000.00) and the
principal amount of the Line of Credit Loans outstanding plus the face amount of
the Letters of Credit outstanding on that day (less any draws under the Letters
of Credit which have been reimbursed by the Borrower).
Section 2.13. Letter of Credit Fees. The Borrower shall pay to
the Bank upon the issuance of any Letter of Credit, and thereafter, annually, a
fee equal to one-half percent (1/2%) per annum (based on a three hundred
sixty-five [365] day year) based on the face amount of the Letter of Credit
issued. The Letter of Credit fee shall be paid in full at the time of issuance
of any such Letter of Credit, and thereafter annually, together with issuance
and amendment fees as determined by the Bank from time to time.
Section 2.14. Letters of Credit. Relying on the
representations and warranties set forth in this Agreement, and subject to such
terms and conditions as the Bank may from time to time require (including
without limitation, the execution and delivery by the Borrower of the Bank's
standard form of the letter of credit application in such form as shall be
acceptable to the Bank), the Bank agrees to issue letters of credit (in such
form as shall be acceptable to the Bank) for the account of Borrower and for the
benefit of customers or suppliers of Borrower in an aggregate face or stated
amount at any time outstanding not exceeding the Borrowing Availability;
provided, however, that the aggregate face or stated amount of Letters of Credit
at any time outstanding (less any draws under the Letters of Credit which have
been reimbursed by the Borrower), plus the aggregate principal amount of all
Loans made or extended pursuant to this Agreement at any time outstanding shall
not exceed the Borrowing Availability. On the date when the Loans shall be due
and payable (by demand or otherwise), the Borrowing Availability shall be
automatically reduced to zero, provided, however, that Bank shall have the
right, in its sole discretion, to require collateral and related documentation
from Borrower to secure the aggregate face or stated amount of the then
outstanding Letters of Credit, which collateral and related documentation may
take the form of either i) cash collateral equal the aggregate face or stated
amount of the then outstanding Letters of Credit; or, ii) upon mutual agreement
of Bank and Borrower, either y) a new loan, adequately secured as determined by
Bank, in Bank's sole discretion, or z) the Line of Credit Loan may be permitted
to continue, with the same collateral, with the Borrowing Availability limited
to an amount equal to the aggregate face or stated amount of Letters of Credit
at that time outstanding (less any draws under the Letters of Credit
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which have been reimbursed by the Borrower) to be utilized by the Bank for any
draws under such Letters of Credit for so long as and to the extent such Letters
of Credit remaining outstanding. In the event the Bank elects to continue the
Line of Credit Loan to secure the outstanding Letters of Credit, the Borrower
shall not be permitted to obtain or receive any additional advances under this
Agreement except only to the extent advances are made by the Bank for any draws
under such Letters of Credit.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.01. Condition Precedent to first Line of Credit
Loan. The obligation of the Bank to make the first Line of Credit Loan to the
Borrower is subject to the condition precedent that the Bank shall have received
on or before the day of such Line of Credit Loan each of the following, in form
and substance satisfactory to the Bank and its counsel:
(1) The Master Demand Note duly executed by the
Borrower.
(2) The Mortgage duly executed by the Borrower for
recording as a fifth lien mortgage lien on the Real Estate located at 000 Xxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx.
(3) The Borrower's Security Agreements duly executed
by the Borrower, together with such number of financing statements (UCC-1) duly
executed by the Borrower, as debtor, for filing under the Uniform Commercial
Code of all jurisdictions necessary or, in the opinion of the Bank, desirable to
perfect the security interest created by the Borrower's Security Agreements.
(4) The Assignment of the Korean Exchange Bank
Letter of Credit and the General Assignment of Government Contracts duly
executed by the Borrower.
(5) A certificate (dated the date of this Agreement)
of the Secretary of the Borrower setting forth and certifying as true and
correct all corporate action taken by the Borrower, including resolutions of its
Board of Directors, authorizing the execution, delivery, and performance of the
Loan Documents to which it is a party and each other document to be delivered
pursuant to this Agreement.
(6) The Guaranty Agreements executed by the
Guarantors.
(7) The Guarantors' Security Agreements duly
executed by the Guarantors, together with such number of financing statements
(UCC-1) duly executed by the Guarantors, as debtor, for filing under the Uniform
Commercial Code of all jurisdictions necessary or, in the opinion of the Bank,
desirable to perfect the security interest created by the Guarantors' Security
Agreements.
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(8) A certificate (dated the date of this Agreement)
of the Secretary of the Guarantors (a) setting forth and certifying as true and
correct all corporate action taken by the Guarantors, including resolutions of
its Board of Directors, authorizing the execution, delivery, and performance of
the Loan Documents to which it is a party and each other document to be
delivered pursuant to this Agreement and (b) certifying the names and true
signatures of the officers of the Guarantors authorized to sign the Loan
Documents to which it is a party and the other documents to be delivered by the
Guarantors under this Agreement.
(9) Evidence of all policies of fire insurance with
extended coverage and flood coverage (if necessary), covering any loss or damage
to the Real Estate and insurable equipment, howsoever such loss or damage may
arise, such insurance to be placed with such companies and in such amounts as
Bank shall require. All premiums required to maintain all such insurance in
force and effect shall be paid by Borrower, and evidence of payment shall be
furnished to Bank. All such insurance shall be maintained in such form as to be
available to and for the protection of Borrower and Borrower's agents and Bank.
The fire and casualty insurance policy or policies shall contain the standard
mortgagee and loss payee clause making losses payable thereunder to Bank.
Receipt of evidence of insurance policies acceptable to Bank pursuant to any
provisions hereunder shall not thereafter bar Bank from requiring additional
insurance, as Bank may deem necessary or desirable from time to time.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Bank that:
Section 4.01. Incorporation, Good Standing and Due
Qualification. The Borrower is a corporation duly incorporated, validly
existing, and in good standing under the laws of the jurisdiction of its
incorporation; has the corporate power and authority to own its assets and to
transact the business in which it is now engaged or proposed to be engaged; and,
to the best of Borrower's knowledge, is duly qualified as a foreign corporation
and in good standing under the laws of each other jurisdiction in which such
qualification is required.
Section 4.02. Corporate Power and Authority. The execution,
delivery, and performance by the Borrower of the Loan Documents have been duly
authorized by all necessary corporate action and do not and will not (1) require
any consent or approval of the shareholders of such corporation; (2) contravene
such corporation's charter or bylaws; (3) cause Borrower to violate any
provision of or cause or result in a breach of or constitute a default under any
law, rule, regulation (including, without limitation, all regulations of the
Board of Governors of the Federal Reserve System), order, writ, judgment,
injunction, decree, determination, or award presently in effect having
applicability to such corporation; (4) cause or result in a breach of or
constitute a default by Borrower under any indenture or loan or credit agreement
or any other agreement, lease, or instrument to which such corporation is a
party or by which it or its properties may be bound or affected; or (5) cause or
result in or require the creation or
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imposition of any Lien, upon or with respect to any of the properties now owned
or hereafter acquired by such corporation except as contemplated by this
Agreement.
Section 4.03. Legally Enforceable Agreement. This Agreement
is, and each of the other Loan Documents when delivered under this Agreement
will be, legal, valid and binding obligations of the Borrower, or, Guarantors,
where applicable, enforceable against the Borrower, or, the Guarantors, where
applicable, in accordance with their respective terms, except to the extent that
such enforcement may be limited by applicable bankruptcy, insolvency, and other
similar laws affecting creditor's rights generally.
Section 4.04. Financial Statements; Accuracy of Information.
All information, financial statements, exhibits and reports furnished by the
Borrower and the Guarantors, to the Bank in connection with this Agreement and
the borrowings contemplated hereby are, and all such information, financial
statements, exhibits and reports hereafter furnished by the Borrower and the
Guarantors, to the Bank will be true and correct in every material respect on
the date furnished to the Bank, and no such information, financial statements,
exhibit or report contains or will contain any material misstatement of fact or
omits or will omit to state a material fact or any fact necessary to make the
statement contained therein not materially misleading.
Section 4.05. Labor Disputes and Acts of God. Neither the
business nor the properties of the Borrower or the Guarantors are affected by
any fire, explosion, accident, strike, lockout or other labor dispute, drought,
storm, hail, earthquake, embargo, act of God or of the public enemy or other
casualty (whether or not covered by insurance) materially and adversely
affecting such business or properties or the operation of the Borrower or the
Guarantors.
Section 4.06. Other Agreements. The Borrower is not a party to
any indenture, loan or credit agreement, or to any lease or other agreement or
instrument, or subject to any charter or corporation restriction which is
reasonably likely to have a material adverse effect on the business, properties,
assets, operations, or conditions, financial or otherwise, of the Borrower or
the ability of the Borrower to carry out its obligations under the Loan
Documents to which it is a party. The Borrower is not in default in any respect
in the performance, observance or fulfillment of any of the obligations,
covenants, or conditions contained in any agreement or instrument material to
its business to which it is a party.
Section 4.07. Litigation. There is no pending or, to
Borrower's knowledge, threatened action or proceeding against or affecting the
Borrower before any court, governmental agency, or arbitrator which is
reasonably likely to, in any one case or in the aggregate, materially adversely
affect the financial condition, operations, properties, or business of the
Borrower or the ability of the Borrower to perform its obligation under the Loan
Documents to which it is a party.
Section 4.08. No Defaults on Outstanding Judgments or Orders.
The Borrower has satisfied all judgments and is not in material default with
respect to any judgment, writ, injunction, decree, rule or regulation of any
court, arbitrator, or federal, state, municipal, or other
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governmental authority, commission, board, bureau, agency, or instrumentality,
domestic or foreign.
Section 4.09. Ownership and Liens. The Borrower and the
Guarantors have title to, or valid leasehold interests in, all of their
respective properties and assets, real and personal, (other than any properties
or assets disposed of in the ordinary course of business), and none of the
properties and assets owned by the Borrower or Guarantors is subject to any
Lien, except for existing purchase money liens and liens in favor of Bank.
Section 4.10. ERISA. The Borrower is in compliance in all
material respects with all applicable provisions of ERISA. Neither a Reportable
Event nor a Prohibited Transaction has occurred and is continuing with respect
to any Plan; no notice of intent to terminate a Plan has been filed nor has any
Plan been terminated; no circumstances exist which constitute grounds under
Section 4042 of ERISA entitling the PBGC to institute proceedings to terminate,
or appoint a trustee to administer a Plan, nor has the PBGC instituted any such
proceedings; neither the Borrower nor any ERISA Affiliate has completely or
partially withdrawn under Sections 4201 or 4204 of ERISA from a Multiemployer
Plan; Borrower and each ERISA Affiliate have met their minimum funding
requirements under ERISA with respect to all of their Plans and the present fair
market value of all Plan assets exceeds the present value of all vested benefits
under each Plan, as determined on the most recent valuation date of the Plan and
in accordance with the provisions of ERISA and the regulations thereunder for
calculating the potential liability of the Borrower or any ERISA Affiliate to
PBGC or the Plan under Title IV of ERISA; and neither the Borrower nor any ERISA
Affiliate has incurred any liability to the PBGC under ERISA.
Section 4.11. Operation of Business. The Borrower possesses
all licenses, permits, franchises, patents, copyrights, trademarks, and trade
names, or rights thereto, to conduct its business substantially as now conducted
and as presently proposed to be conducted, and the Borrower is not in material
violation of any valid rights of others with respect to any of the foregoing.
Section 4.12. Taxes. The Borrower and the Guarantors have
filed all tax returns (federal, state and local) required to be filed and have
paid all taxes, assessments, and governmental charges and levies thereon to be
due, including interest and penalties, except the filing of tax returns or the
payment of taxes, if any, being contested by the Borrower or the Guarantors, and
disclosed to the Bank in writing or those where the failure to file or pay is
not reasonably likely to have a material adverse effect on Borrower.
Section 4.13. Debt. The Borrower is not indebted under any
credit agreement, indenture, purchase agreement, guaranty, Capital Lease
Obligations, or other investment, agreement or arrangement except as disclosed
in the Borrower's financial statements or as otherwise disclosed to the Bank in
writing.
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Section 4.14. Environmental Matters. To the best of the
Borrower's knowledge, no real property owned or leased by the Borrower, or owned
by the Guarantors is in material violation of any Environmental Laws, no
Hazardous Materials are present on said real property except for materials used
in Borrower's business which are stored, maintained and utilized in accordance
with all applicable laws, rules and regulations, and neither the Borrower nor
the Guarantors have been identified in any litigation, administrative
proceedings or investigation as a responsible party for any liability under any
Environmental Laws.
Section 4.15. Mortgage Liens. The mortgage lien granted to the
Bank pursuant to the Mortgage will be superior and prior to any liens of all
third persons existing on the date of its execution and delivery or thereafter
arising by way of lien or otherwise to the full extent provided by law upon the
recording of such mortgage in the Office of the Recorder of Deeds of Bucks
County except for existing first, second and third mortgages to Bank and a
mortgage to Bank in the amount of One Million Eight Hundred Thousand Dollars
($1,800,000.00), dated even date herewith. All such action as is necessary to
establish the mortgage lien of the Bank and their priority as described in the
preceding sentence will have been taken, and there will be as of the date of
recording of such mortgage no necessity for any further action in order to
protect, preserve and continue the mortgage lien and such priority, except that
if the failure to record the Mortgage or the recording of the Mortgage in a
different order of priority is the result of the actions or inactions of Bank,
Borrower shall have no obligation or liability in connection therewith. All
recording fees and other expenses in connection with each such action have been
or will be paid by the Borrower.
ARTICLE V
AFFIRMATIVE COVENANTS
So long as the Note shall remain unpaid or this Agreement
shall remain in effect, the Borrower will:
Section 5.01. Maintenance of Existence. Preserve and maintain
its corporate existence and good standing in the jurisdiction of its
incorporation, and qualify and remain qualified as a foreign corporation in each
jurisdiction in which such qualification is required and where the failure to
qualify would have a material adverse effect upon Borrower.
Section 5.02. Maintenance of Records. Keep accurate records
and books of account, in which complete entries will be made in accordance with
the GAAP consistently applied, reflecting all financial transactions of the
Borrower.
Section 5.03. Maintenance of Properties. Maintain, keep and
preserve all of its properties (tangible and intangible) necessary or useful in
the proper conduct of its material business in reasonably good working order and
condition, ordinary wear and tear excepted.
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Section 5.04. Conduct of Business; Permits and Approvals;
Compliance with Laws. Continue to engage in an efficient and economical manner
in a business of the same general type as conducted by it on the date of this
Agreement; maintain in full force and effect, its franchises, and all licenses,
patents, trademarks, tradenames, contracts, permits, approvals and other rights
necessary to the profitable conduct of its business; and comply in all material
respects with all applicable laws, rules, regulations and orders, except for
noncompliance which is not reasonably expected to have any adverse effect on
Borrower.
Section 5.05. Maintenance of Insurance. Maintain insurance,
including the fire insurance and flood insurance policies described in Section
3.01(9) above, naming Bank as Lender Loss Payee, with financially sound and
reputable insurance companies or associations in such amounts and covering such
risks as are usually carried by companies engaged in the same or a similar
business and similar situated, which insurance may provide for reasonable
deductibility from coverage thereof.
Section 5.06. Payment of Debt; Payment of Taxes, Etc.
Promptly pay and discharge:
(1) All of its Debt in accordance with the terms
thereof;
(2) All taxes, assessments, and governmental charges
or levies imposed upon it or upon its income and profits, upon any of its
property, real, personal or mixed, or upon any part thereof, before the same
shall become in default;
(3) All lawful claims for labor, materials and
supplies or otherwise, which, if unpaid, might become a lien or charge upon such
property or any part thereof;
provided, however, that so long as the Borrower first notifies the Bank of its
intention to do so, the Borrower shall not be required to pay and discharge any
such Debt, tax, assessment, charge, levy or claim so long as the failure to so
pay or discharge does not constitute or result in a Default or an Event of
Default under Section 7.01(7) and so long as no foreclosure or other similar
proceeding shall have been commenced against such property or any part thereof
and so long as the validity thereof shall be contested in good faith by
appropriate proceedings diligently pursued and it shall have set aside on its
books adequate reserves with respect thereto.
Section 5.07. Right of Inspection. At any reasonable time and
from time to time, during normal business hours and with reasonable prior
notice, permit the Bank or any agent or representative thereof (a) to examine
and make copies of and abstracts from the records and books of account of, and
visit the properties of, the Borrower and the Guarantors, and to inspect and
verify all inventory of Borrower, and (b) to discuss the affairs, finances, and
accounts of the Borrower and the Guarantors, with any of its officers and
directors and the Borrower's independent accountants. Borrower shall pay all
costs assessed by Bank for such inspections, or field examinations.
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Section 5.08. Reporting Requirements. Furnish to the Bank:
(1) Within sixty (60) days after the end of each
fiscal quarter of the Borrower and the Guarantors, internally prepared financial
statements of the Borrower and the Guarantors, including a balance sheet and
related statements of income and shareholders' equity together with Borrower's
Form 10-Q, as filed;
(2) Within one hundred twenty (120) days after the
close of each fiscal year of the Borrower and the Guarantors, financial
statements of the Borrower and the Guarantors, including a balance sheet and
related statements of income, shareholders' equity, and changes in financial
position together with Borrower's Form 10-K, as filed, all in reasonable detail,
together with all supporting schedules and notes, and prepared on an audited
basis by independent certified public accountants satisfactory to the Bank in
its reasonable discretion. Bank will, on an annual basis, review with Borrower
the quality of the work produced by Borrower's accountants;
(3) Within thirty (30) days after the end of each
fiscal quarter of the Borrower, updated cash flow projections for the current
quarter;
(4) Within fifteen (15) days after the end of each
month, accounts receivables and accounts payable agings; and
(5) Such other information respecting the condition
or operations, financial or otherwise, of the Borrower as the Bank may from time
to time reasonably request, including but not limited to financial projections
tax returns, and listings of assets.
Section 5.09. Financial Covenants. Maintain a debt to worth
ratio not to exceed 1.25 to 1 and a minimum current ratio of 1.5 to 1. For
purposes of calculation of the minimum current ratio, the entire outstanding
balance under this Agreement shall be shown as a current liability. These ratios
will be measured and reviewed annually after receipt of the audited annual
financial statements.
Section 5.10. Further Assurances. Do such further acts and
things and execute and deliver to the Bank such additional assignments,
agreements, powers and instruments, as the Bank may reasonably require or
reasonably deem advisable to carry into effect the purposes of this Agreement or
to better assure and confirm unto the Bank its rights, powers and remedies
hereunder.
Section 5.11. Cross-Default and Cross-Collateralization. Agree
that all existing and future loan obligations of Borrower shall be
cross-collateralized and cross-defaulted.
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ARTICLE VI
NEGATIVE COVENANTS
So long as the Note shall remain unpaid or this Agreement
shall remain in effect, the Borrower will not:
Section 6.01. Liens. Create, incur, assume, or suffer to
exist, any Lien upon or with respect to any of its properties, now owned or
hereafter acquired, except:
(l) Liens in favor of the Bank;
(2) Liens for taxes or assessments or other
government charges or levies if not yet due and payable or, if due and payable,
if they are being contested in good faith by appropriate proceedings promptly
initiated and diligently conducted and for which appropriate reserves are
maintained and so long as no foreclosure, distraint, sale or other similar
proceedings shall have been commenced with respect thereto;
(3) Deposits, or pledges to secure the performance
of bids, tenders, contracts (other than contracts for the payment of money),
leases (permitted under the terms of this Agreement), or public or statutory
obligations; surety, indemnity, performance, or other similar bonds; or other
similar obligations, all arising in the ordinary course of business.
(4) Existing purchase money Liens on equipment and
vehicles so long as each such Lien (i) exists upon the same terms as those
existing on the date hereof and (ii) does not secure indebtedness in a principal
amount greater than that outstanding on the date hereof and no additional assets
are furnished as Collateral to secure such Liens.
(5) Liens securing Debt permitted under Section 6.02
of this Agreement.
Section 6.02. Debt. Create, incur, assume, or suffer to exist
any Debt, except:
(l) Bank Debt under this Agreement, the Note, the
other Loan Documents or under any other document, instrument or agreement
between the Borrower and the Bank, including a Term Loan to Borrower dated even
date herewith in the amount of One Million Eight Hundred Thousand Dollars
($1,800,000.00);
(2) Current accounts payable, accrued expenses and
other current items arising out of transactions (other than borrowings) in the
ordinary course of business;
(3) Indebtedness secured by purchase money security
interests and capitalized leases of equipment and vehicles, provided that the
total aggregate principal amount
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(including Capitalized Lease Obligations) of all such indebtedness incurred
during each calendar year shall not exceed Two Hundred Fifty Thousand Dollars
($250,000.00) and provided that the liens and security interests securing such
indebtedness i) are limited to the specific identified asset purchased with such
indebtedness, and ii) except for the priority obtained as a result of its
classification as a purchase money security interest, shall in no way affect or
impair the existing liens and security interests in favor of Bank; and
(4) Indebtedness hereafter incurred in connection
with a Lien permitted in Section 6.01 above, including debt for existing
purchase money obligations.
Section 6.03. Mergers, Etc. Merge or consolidate with, or
sell, assign, lease, or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to any Person, or acquire all or substantially all
of the assets or the business of any Person, except that Bank shall permit the
acquisition of the assets of TSA Systems, Ltd. and a division of Teledyne
Corporation and the Measurement Dynamics LLC transactions.
Section 6.04. Dividends. Declare or pay any dividends; or
purchase, redeem, retire, or otherwise acquire for value any of its capital
stock now or hereafter outstanding; or make any distribution of assets to its
shareholders as such whether in cash, assets or obligations of the Borrower; or
allocate or otherwise set apart any sum for the payment of any dividend or
distribution on, or for the purchase, redemption, or retirement of, any shares
of its capital stock; or make any other distribution by reduction of capital or
otherwise in respect of any shares of its capital stock, if such dividend, stock
purchase, or other action described in this paragraph would cause or result in
the occurrence of an Event of Default as defined herein.
Section 6.05. Sale of Assets. Sell, lease, assign, transfer,
or otherwise dispose of any of its now owned or hereafter acquired assets
except: (a) for inventory disposed of in the ordinary course of business; (b)
the sale or other disposition of assets no longer used or useful in the conduct
of its business; and (c) the sale or other disposition of assets provided the
proceeds of sale are used either to pay down existing term loans owed by
Borrower to Bank or to purchase substantially similar replacement assets.
Section 6.06. Guaranties, Etc. Assume, guarantee, endorse, or
otherwise be or become directly or contingently responsible or liable,
(including, but not limited to, an agreement to purchase any obligation, stock,
assets, goods, or services, or to supply or advance any funds, assets, goods, or
services, or to maintain or cause such Person to maintain a minimum working
capital or net worth, or otherwise to assure the creditors of any Person against
loss) for obligations of any Person, except guaranties by endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business.
Section 6.07. Hazardous Materials; Indemnification. Use,
generate, treat, store, dispose of or otherwise introduce any Hazardous
Materials into or on any real property owned or leased by it, except in an
environmentally safe manner through methods meet in all material
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respects all of the standards of the Federal Environmental Protection Agency and
any other federal, state or local agency with authority to enforce Environmental
Laws. The Borrower hereby agrees to indemnify, reimburse, defend and hold
harmless the Bank and its director's, officers, agents and employees
("Indemnified Parties") for, from and against all demands, liabilities, damages,
costs, claims, suits, actions, legal or administrative proceedings, interest,
losses, expenses and reasonable attorney's fees (including any such fees and
expenses incurred in enforcing this indemnity) asserted against, imposed on or
incurred by any of the Indemnified Parties, directly or indirectly pursuant to
or in connection with the application of any Environmental Law to acts or
omissions occurring at any time on or in connection with any real estate owned
or leased by the Borrower or any business conducted thereon, except for acts or
omissions of Bank, its employees or authorized agents. None of the aforesaid
shall in any way limit or restrict the right of Borrower to defend claims
asserted against it or any of the Indemnified Parties.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.01. Events of Default. If any of the following
events ("Events of Default") shall occur:
(1) The Borrower shall fail to pay the principal of,
or interest on, the Note or any amount of a commitment fee or any other amount
due hereunder, if such failure is not cured within fifteen (15) days after
written notice thereof has been given to Borrower by Bank;
(2) Any representation or warranty made or deemed
made by the Borrower in this Agreement or the Security Agreements which are
contained in any certificate, document, opinion, or financial or other statement
furnished at any time under or in connection with any Loan Documents shall prove
to have been incorrect in any material respect on or as of the date made or
deemed made and the Borrower shall not have cured the effect of such false or
misleading statements within fifteen (15) days after it occurs;
(3) The Borrower shall fail to perform or observe
any term, covenant, or agreement contained in any Loan Document to which it is a
party on its part to be performed or observed, where such failure to perform or
observe is not cured within thirty (30) days after written notice thereof has
been given to the Borrower by the Bank;
(4) A default in the payment or performance of any
obligation of the Borrower to the Bank other than under this Agreement or the
Note and such default shall have continued uncured after the giving of any
required notice or past the expiration of any applicable grace or cure period;
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(5) The Borrower shall (a) fail to pay any
indebtedness of the Borrower, the principal face amount of which exceeds Two
Hundred Fifty Thousand Dollars ($250,000.00), (other than indebtedness to Bank),
or any interest or premium thereon, within fifteen (15) days of its due date
(whether by scheduled maturity, required prepayment, acceleration, demand, or
otherwise), or (b) fail to perform or observe any term, covenant, or condition
on its part to be performed or observed under any agreement or instrument
relating to any such indebtedness, when required to be performed or observed, if
the effect of such failure to pay or perform or observe is to accelerate, or to
permit the acceleration after the giving of notice or passage of time, or both,
of the maturity of such indebtedness, unless such failure to perform or observe
shall be waived by the holder of such indebtedness; or any such indebtedness
shall be declared to be due and payable, or required to be prepaid (other than
by a regularly scheduled required prepayment), prior to the stated maturity
thereof;
(6) The Borrower (a) shall generally not, or shall
be unable to, or shall admit in writing its inability to pay its debts as such
debts become due; or (b) shall make an assignment for the benefit of creditors,
petition or apply to any tribunal for the appointment of a custodian, receiver,
or trustee for it or a substantial part of its assets; or (c) shall commence any
proceeding under any bankruptcy, reorganization, arrangements, readjustment of
debt, dissolution, or liquidation law or statute of any jurisdiction, whether
now or hereafter in effect; (d) shall have any such petition or application
filed or any such proceeding commenced against it, in which an order for relief
is entered or adjudication or appointment is made and which remains undismissed
for a period of thirty (30) days or more; or (e) by any act or omission shall
indicate its consent to, approval of, or acquiescence in any such petition,
application, or proceeding, or order for relief, or the appointment of a
custodian, receiver, or trustee for all or any substantial part of its
properties; or (f) shall suffer any such custodianship, receivership, or
trusteeship to continue undischarged for a period of thirty (30) days or more;
(7) One or more judgments, decrees, or orders for
the payment of money in excess of Twenty-Five Thousand Dollars ($25,000.00)
shall be rendered against the Borrower, and such judgments, decrees, or orders
shall continue unsatisfied and in effect for a period of fifteen (15)
consecutive days without being vacated, discharged, satisfied or stayed or
bonded pending appeal;
(8) Any of the following events occur or exist with
respect to the Borrower or any ERISA Affiliate: (a) any Prohibited Transaction
involving any Plan; (b) any Reportable Event with respect to any Plan; (c) the
filing under Section 4041 of ERISA of a notice of intent to terminate any Plan
or the termination of any Plan; (d) any event or circumstance that might
constitute grounds entitling the PBGC to institute proceedings under Section
4042 of ERISA for the termination of, or for the appointment of a trustee to
administer, any Plan, or the institution by the PBGC of any such proceedings;
(e) complete or partial withdrawal under Section 4201 or 4204 of ERISA from a
Multiemployer Plan or the reorganization, insolvency, or termination of any
Multiemployer Plan; and in each case above, such event or condition, together
with all other events or conditions, if any, could in the opinion of the Bank
subject the Borrower to any tax, penalty, or other liability to a Plan, a
Multiemployer
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Plan, the PBGC, or otherwise (or any combination thereof) which in the
reasonable determination of the Bank is reasonably likely to have a material
adverse effect on the financial condition, properties or operations of the
Borrower;
then, and in any such event, the Agreement shall terminate and the entire
amounts outstanding under the Loans and all interest thereon and all other
amounts payable under this Agreement shall become and be immediately due and
payable; provided that upon the happening of a Default specified in Section
7.01(6), this Agreement shall terminate and the outstanding Note and all
interest thereon and all other amounts payable thereunder shall be immediately
due and payable without declaration or other prior notice to the Borrower.
Thereupon Bank shall have all of the rights and remedies available to it under
the Loan Documents or otherwise at law or in equity. The Borrower expressly
waive any presentment, demand, protest or further notice of any kind. With
respect to all Loans payable on demand, the Bank's rights to demand payable
shall not be restricted or impaired by the absence, non-occurrence or waiver of
a default, and it is understood that the Bank may demand payment at any time.
ARTICLE VIII
TERMINATION
Section 8.01. So long as no default which is continuing has
occurred hereunder, this Agreement shall remain in full force and effect until
either Borrower gives notice of termination to the Bank or the Bank gives notice
of termination to Borrower (in either case, a "Termination Notice"), which must
be given and confirmed in writing. Upon the giving of a Termination Notice, the
outstanding principal of all Loans plus accrued interest to the date of
repayment outstanding under the terms of this Agreement shall be immediately due
and payable.
ARTICLE IX
CONFESSION OF JUDGMENT
Section 9.01. Upon the occurrence of any default not cured
within the applicable grace period, Borrower irrevocably authorizes and empowers
any attorney or any clerk of any court of record to appear for and confess
judgment against Borrower for such sums as are due and owing on this Line of
Credit Agreement and the Master Demand Note, with or without declaration, with
costs of suit, without stay of execution and with reasonable attorneys' fees
added for collection fees. If a copy of this Agreement and the Master Demand
Note, verified by affidavit by or on behalf of the Bank, shall have been filed
in such action, it shall not be necessary to file the original of this Agreement
and the Master Demand Note. The authority granted hereby shall not be exhausted
by the initial exercise thereof and may be exercised by the Bank from time to
time until all sums payable by Borrower have been paid in full.
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ARTICLE X
MISCELLANEOUS
Section 10.01. Amendments, Etc. No amendment, modification,
termination, or waiver of any provision of any Loan Document to which the
Borrower is a party, nor consent to any departure by the Borrower from any Loan
Document to which it is a party, shall in any event be effective unless the same
shall be in writing and signed by the Bank, (and, if an amendment, modification
or termination, also by Borrower), and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
Section 10.02. Notices, Etc. All notices and other
communications provided for under this Agreement and under the other Loan
Documents to which the Borrower is a party shall be in writing (including
telegraphic and telex transmissions and facsimile transmissions, if subject to
pre-established verification procedures) and mailed or transmitted and
delivered,
if to the Borrower, at:
Nuclear Research Corporation
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
if to CoreStates Bank, N.A. at:
CoreStates Bank, N.A.
0000 Xxxxx Xxxx, Xxxxx 000
Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx,
Vice President
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other party complying as to delivery with the terms
of this Section 10.02.
Section 10.03. No Waiver; Remedies. No failure on the part of
the Bank to exercise, and no delay in exercising, any right, power, or remedy
under any Loan Documents shall operate as a waiver thereof; nor shall any single
or partial exercise of any right under any Loan Documents preclude any other or
further exercise thereof or the exercise of any other right. The remedies
provided in the Loan Documents are cumulative and not exclusive of any remedies
provided by law.
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Section 10.04. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the Borrower and the Bank and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights under any Loan Document to which the Borrower is a
party without the prior written consent of the Bank.
Section 10.05. Costs, Expenses, and Taxes. The Borrower agrees
to pay (a) all costs and expenses in connection with the preparation, execution,
delivery, filing, recording of any of the Loan Documents including but not
limited to the reasonable fees and out-of-pocket expenses of counsel for the
Bank, and local counsel who may be retained by said counsel, with respect
thereto and with respect to advising the Bank as to its rights and
responsibilities under any of the Loan Documents; and (b) all costs and
expenses, if any, in connection with the enforcement of any of the Loan
Documents including but not limited to the reasonable fees and out-of-pocket
expenses of counsel for the Bank and local counsel who may be retained by said
counsel incurred by the Bank in connection with the enforcement and collection
of the Loans and the Loan Documents and with respect to advising the Bank as to
its rights and responsibilities under any of the Loan Documents. In addition,
the Borrower shall pay any and all stamp and similar taxes and fees payable or
determined to be payable in connection with the execution, delivery, filing, and
recording of any of the Loan Documents and the other documents to be delivered
under any such Loan Documents, and agrees to save the Bank harmless from and
against any and all liabilities with respect to or resulting from any delay in
paying or omission to pay such taxes and fees, so long as such delay or omission
is not caused by Bank.
Section 10.06. Right of Setoff. The Bank are hereby authorized
at any time and from time to time, without notice to the Borrower (any such
notice being expressly waived by the Borrower), to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by the Bank to or for the credit
or the account of the Borrower against any and all of the obligations of the
Borrower now or hereafter existing under this Agreement or the Note or any other
Loan Document, irrespective of whether or not the Bank shall have made any
demand under this Agreement or the Note or such other Loan Document and although
such obligations may be unmatured. The Bank agree promptly to notify the
Borrower after any such setoff and application, provided that the failure to
give such notice shall not affect the validity of such setoff and application.
The rights of the Bank under this Section 8.06 are in addition to other rights
and remedies (including, without limitation, other rights of setoff) which the
Bank may have.
Section 10.07 Governing Law. This Agreement and the Note shall
be governed by, and construed in accordance with, the laws of the Commonwealth
of Pennsylvania.
Section 10.08. Severability of Provisions. Any provision of
any Loan Document which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions of such Loan
Document or affecting the validity or enforceability of such provision in any
other jurisdiction.
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Section 10.9. Survival of Agreement. All covenants,
agreements, representations and warranties made herein and in the certificates
delivered pursuant hereto shall survive the making by the Bank of the Loan and
the execution and delivery to the Bank of the Note and shall continue in full
force and effect so long as the Note or any amounts due hereunder are
outstanding and unpaid.
Section 10.10. Headings. Article and Section headings in the
Loan Documents are included in such Loan Documents for the convenience of
reference only and shall not constitute a part of the applicable Loan Documents
for any other purpose.
Section 10.11. JURISDICTION AND VENUE. IN ANY JUDICIAL
PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER ARISING OUT OF OR
RELATED TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER, THE
BORROWER HEREBY IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF ANY
STATE OR FEDERAL COURT LOCATED IN ANY COUNTY IN THE COMMONWEALTH OF PENNSYLVANIA
WHERE BANK OR BORROWER MAINTAIN AN OFFICE AND AGREES NOT TO RAISE ANY OBJECTION
TO SUCH JURISDICTION OR TO THE LAYING OR MAINTAINING OF THE VENUE OF ANY SUCH
PROCEEDING IN SUCH COUNTY.
Section 10.12. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED
HEREUNDER. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE BANK TO ENTER INTO
THIS AGREEMENT.
IN WITNESS WHEREOF, INTENDING TO BE LEGALLY BOUND HEREBY,
the parties have caused this Agreement to be executed by their respective
officers thereunto duly authorized, as of the date first above written.
"Borrower" NUCLEAR RESEARCH CORPORATION
By: /s/ Xxxx X. Xxxxxxx
------------------------- (SEAL)
Name: Xxxx X. Xxxxxxx
Title: President
"Bank" CORESTATES BANK, N.A.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------- (SEAL)
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
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