CROSS-COLLATERALIZATION
AND
CROSS-DEFAULT AGREEMENT
-----------------------
THIS AGREEMENT, made this 30th day of May, 1997, by The JPM Company, a
Pennsylvania corporation having its principal offices at Xxxxx 00, Xxxxxxxxx,
Xxxxxxxxxxxx 00000 ("Borrower") in favor of CoreStates Bank, N.A., a national
banking association with offices at 00 Xxxxx Xxxxx Xxxxxx, X.X. Xxx 0000,
Xxxxxxxxxx, Xxxxxxxxxxxx 00000 ("Bank").
W I T N E S S E T H:
WHEREAS, Bank is extending a line of credit facility to Borrower in the
principal amount of Twenty Million Dollars ($20,000,000.00) (the "Loan")
pursuant to the terms and conditions of a certain Master Demand Note, as amended
by an Addendum to Master Demand Note, in the amount of $20,000,000.00 in favor
of Bank of even date herewith ("Line of Credit Note"); and
WHEREAS, Commonwealth Bank, a division of Meridian Bank ("Meridian") has
previously extended other credit accommodations to Borrower, including, but not
limited to, the following (the "Existing Indebtedness"): (i) a real estate term
loan having a current principal balance of approximately $896,347.71 (the "Real
Estate Loan"), which loan is secured, inter alia, by first lien mortgages
----------
against Borrower's real property and improvements located along Route 00, Xxxxx
Xxxxxxxx, Xxxxxxxxx, Xxxxxxxxxxxx and Borrower's real property and improvements
located at the Industrial Park, East Buffalo Township, Pennsylvania; (ii) a
second term loan having a current principal balance of approximately
$1,428,571.52 (the "Term Loan"), which loan is secured by second lien mortgages
against the Route 00, Xxxxx Xxxxxxxx, Xxxxxxxxx, Xxxxxxxxxxxx real property and
improvements, the Industrial Park, East Buffalo Township, Pennsylvania real
property and improvements, a first lien security interests in all business
assets of the Borrower, a pledge and assignment of 60% of the stock of
Borrower's subsidiary, Electronica Pantera, S.A. de C.V.; and (iii) certain
automated clearing house facilities in the aggregate amount of $250,000.00 (the
"ACH Facilities") (all of the mortgages, security interests, financing
statements, liens, encumbrances, documents, instruments and agreements and all
other collateral of any kind or nature whatsoever securing the Real Estate Loan,
the Term Loan and ACH Facilities, or the Loan or Line of Credit Note or any
other debt, liability or obligation whatsoever of the Borrower to Bank, whether
currently existing or hereafter arising, are collectively referred to herein as
the "Common Collateral"); and
WHEREAS, Bank is the successor-in-interest to all of Meridian's right,
title and interest in and to the Real Estate Loan, the Term Loan, the ACH
Facilities and the Common Collateral by virtue of the merger of Commonwealth
into Bank; and
WHEREAS, as an inducement to Bank to accept the Line of Credit Note and to
extend the Loan evidenced thereby to Borrower, Borrower is willing to cross-
collateralize and
cross-default its various obligations to Bank, including, without limitations,
its various obligations to Bank under the Loan, the Real Estate Loan, the Term
Loan and the ACH Facilities.
NOW, THEREFORE, in order to induce Bank to accept the Line of Credit Note
and to extend the Loan thereunder to Borrower, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, Borrower, for itself and for its
successors and assigns, hereby agrees as follows:
It is agreed that a default under the Loan, the Line of Credit Note or any
other note, security agreement, credit agreement, mortgage, document, instrument
or agreement securing or executed in connection with the Loan, the Line of
Credit Note or the Common Collateral, or under any other loan, debt, obligation
or liability pursuant to which Borrower is directly or indirectly obligated to
Bank, presently existing or hereafter made, including, without limitation, the
Existing Indebtedness, shall constitute a default on all such loans, debts,
liabilities and obligations (collectively, the "Cross-Collateralized
Obligations"). It is further agreed that all of the collateral and all other
security given by or on behalf of the Borrower, now or hereafter granted to
Bank, including, without limitation, the Common Collateral, shall collateralize
and secure all of the Cross-Collateralized Obligations. Upon any default under
the Cross-Collateralized Obligations, all Cross-Collateralized Obligations
shall, automatically and without further notice to Borrower, become immediately
due and payable, at the option of the Bank, and the Common Collateral, or any
part thereof at the discretion of the Bank, may be foreclosed, enforced and
realized upon by the Bank to repay all or any portion of the Cross-
Collateralized Obligations in such order and in such amounts as the Bank may
determine.
IN WITNESS WHEREOF, the undersigned, intending to legally bind itself, its
successors and assigns, has hereunto set its hand and seal on the day and year
first above written.
ATTEST: THE JPM COMPANY
/s/ Xxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxx
------------------- ---------------------
Title: Vice President, CFO and
Treasurer
2
COMMONWEALTH OF PENNSYLVANIA )
: SS:
COUNTY OF UNION )
-----
On this the 30th day of May, 1997, before me, the undersigned officer,
----
personally appeared Xxxxxxx X. Xxxxx, who acknowledged himself to be the Vice
---------------- ----
President, CFO and Treasurer of The JPM Company, and as such ________________
---------------------------- ---------------
and being authorized to do so, executed the foregoing instrument for the
purposes therein contained by signing his name as such Xxxxxxx X. Xxxxx on
----------------
behalf of The JPM Company.
---------------
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
Xxxx X. Xxxxxx
--------------
Notary Public
My Commission Expires: Notary Seal
Xxxx X. Xxxxxx, Notary Public
Xxxxx Twp., Union County
My Commission Expires Sept. 6, 1999
