Exhibit 10.17
REVOLVER/TERM LOAN AGREEMENT
MIKRON INSTRUMENT COMPANY, INC. of 00 XXXXXXXX XXXX, XXXXXXX, XX 00000-0000,
(jointly and severally if more than one, the "Borrower") and FLEET BANK, N.A., a
national banking association created and existing under the laws of the United
States of America with a principal office located at 00 Xxxxxxxxxx Xxxxxx,
Xxxxxx Xxxx, Xxx Xxxxxx 00000, (the "Bank"), for valuable consideration, the
receipt of which is hereby acknowledged, agree as follows:
I. DEFINITIONS.
Each reference herein to:
a. "Accounts", "Chattel Paper", "Consumer Goods", "Documents",
"Equipment", "Farm Products", "Fixtures", "General Intangibles",
"Goods", "Instruments", "Inventory", "Money", and "Securities" shall
have the meaning assigned to each in the Uniform Commercial Code
from time to time in effect in the State (the "UCC");
b. "Affiliates of Borrower" means any person or entity that, directly
or indirectly, controls, is controlled by or is under common control
with the Borrower or is an inside director or officer of the
Borrower. For purposes of this definition, the term "control"
(including the terms "controlling", "controlled by" and "under
common control with") means the possession, direct or indirect, of
the power to vote five percent (5%) or more of (i) the voting stock
of a corporation, (ii) the partnership interests of a partnership,
or (iii) the membership interests of a limited liability company, or
to direct or cause the direction of the management and policies of
any such entity, whether through the ownership of voting stock,
partnership interests, membership interests, by contract or
otherwise;
c. "Books and Records" shall mean all books, correspondence, credit
files, records and other documents relating directly or indirectly
to the Obligations and the Collateral, including, without
limitation, all tapes, cards, runs, data bases, software programs,
diskettes, and other papers and documents in the possession or
control of the Borrower, any computer service bureau, or other agent
or independent contractor,
d. "Conversion Date" shall be deemed to refer to AUGUST 14, 2000;
e. "Loan Documents" shall mean this Agreement, the Note, any Bank
issued Commitment Letter and any amendments thereto, and any and all
mortgages, pledge agreements, security agreements, financing
statements, guaranties and other documents related to this Agreement
and/or the Loan;
f. "Material Adverse Change" shall mean with respect to the Borrower
and any guarantors and any of their respective properties or
revenues, an event, action or condition that would or is reasonably
likely to (i)
adversely affect the validity or enforceability of, or the authority
of the Borrower and/or any guarantor to perform their respective
obligations under, the Loan Documents, or (ii) materially adversely
affect the business, operations, assets or condition (financial or
otherwise) of the Borrower and/or any guarantor or the ability of
the Borrower and/or any guarantor to perform their respective
obligations under any of the Loan Documents, or (iii) materially
adversely affect the value of any Collateral;
g. "Prime Rate" shall mean the prime rate designated from time to time
by the Bank as being its "prime rate" of interest, such interest
rate to change on the effective date of each change in the Prime
Rate, which rate of interest may not necessarily be the lowest rate
of interest charged by the Bank to anyone of its customers or any
particular class of customers. Changes in the rate of interest
resulting from changes in the Prime Rate shall take place
immediately without notices or demand of any kind.
h. "State" shall mean the State of New Jersey.
i. "Year 2000 Compliant" shall mean, with regard to the Borrower and/or
its suppliers, vendors and customers, that all software, embedded
microchips, and other processing capabilities utilized by, and
material to the business operations or financial condition of, such
entity are able to interpret and manipulate data on and involving
all calendar dates correctly and without causing any abnormal ending
scenario, including in relation to dates on and after January 1,
2000.
j. "Year 2000 Risk" shall mean the risk that computer applications used
by the Borrower and/or its suppliers, vendors and customers may be
unable to recognize and perform without error date - sensitive
functions involving certain dates prior to and any date after
December 31, 1999.
II. LOAN.
1. Credit Limit. This Agreement evidences a line of credit (with a term
loan conversion feature hereinafter referenced) for the Borrower's
short-term borrowing needs (the "Loan") with a credit limit (the
"Credit Limit") in the maximum principal sum of One Million
Dollar(s) and No Cent(s) ($1,000,000.00).
Within such Credit Limit, until (i) demand by the Bank and/or
termination of the Bank's commitment upon the occurrence of an Event
of Default or (ii) the Conversion Date, the Borrower may borrow
hereunder. All principal repayments shall reduce the Loan and the
Bank's commitment, and principal amounts repaid may not be
re-borrowed.
2. Advances. The Bank agrees to make advances to the Borrower until (i)
demand by the Bank and/or termination of the Bank's commitment upon
the occurrence of an Event of Default or (ii) the Conversion Date,
provided that the aggregate principal amount of the Loan does not
exceed at any one time the Credit Limit.
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3. "LIBOR Rate" shall mean, as applicable to any interest Period, the
rate per annum, as determined on the basis of the offered rate for
deposits in U.S. dollars, for a period of time comparable to such
Interest Periods, which appears on Telerate Page 3750 as of 11:00
a.m. London time on the day that is two (2) London Banking Days
preceding the first day of such Interest Period; provided however,
if the rate described above does not appear on the Telerate System
on any applicable interest determination date, then the LIBOR Rate
shall be the rate offered for deposits in U.S. dollars in the London
Interbank market for a period substantially equal to the interest
Periods, determined by the Bank in a commercially reasonable manner,
"Banking Day" means, in respect of any city, any date on which
commercial banks are open for business in that city, in the event
that he Board of Governors of the Federal Reserve System shall
impose a Reserve Percentage with respect to LIBOR deposits of the
Bank then for any period during which such Reserve Percentage shall
apply, the LIBOR Rate shall be equal to the amount determined above
divided by an amount equal to one (1) minus the Reserve Percentage.
"Reserve Percentage" shall mean the Maximum aggregate reserve
requirement (including all basic, supplemental, marginal and other
reserves) which is imposed on member banks of the Federal Reserve
System against "Euro-currency Liabilities" as defined in Regulation
D;
4. Minimum Amount of Advance. Each advance under this Agreement shall
be in the minimum amount of One Thousand Dollars ($1,000.00).
5. Direct Deposit of Loan Proceeds. All advances shall be disbursed by
the Bank by deposit of the Loan proceeds to the Borrower's deposit
account with the Bank.
6. Demand Loan. On demand by the Bank prior to the Conversion Date, the
entire outstanding principal balance of the Loan and all accrued
interest shall immediately become due and payable.
7. Term Loan Conversion. If on the Conversion Date (i) the Bank has not
made demand for payment in full of the Loan and/or (ii) no Event of
Default has occurred and is continuing, the demand Loan shall
convert to a term Loan, and the Borrower shall amortize the then
outstanding principal balance of the Loan in accordance with the
payment schedule disclosed in the Borrower's note of even date with
this Agreement (as hereinafter defined).
8. Note; Interest Calculation. The Loan shall be evidenced by the
Borrower's note of even date with this Agreement (which note and all
amendments thereto and any additional and supplementary notes
executed pursuant to this Agreement are herein referred to
collectively as the "Note"). The interest rate initially set forth
in the Note is a variable rate. From and after maturity (including
any accelerated maturity), the interest rate on the Note shall
increase to sixteen percent (16%) per annum. Interest shall be
calculated on the basis of a 360-day year using the actual number of
days
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elapsed. On maturity, whether scheduled or otherwise, both principal
and all accrued and unpaid interest shall be immediately due and
payable .
9. Late Fee. If the entire amount of any required principal and/or
interest is not paid in full within ten (10) days after the same is
due, the Borrower shall pay to the Bank a late fee equal to five
percent (5%) of the required payment.
10. Prepayment. The Borrower shall have the right at any time and from
time to time to prepay the Loan in whole or in part, without premium
or penalty, but with accrued interest to the day of such prepayment
on the amount prepaid.
III. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants that:
1. Organization and Powers. (a) If a corporate, partnership, limited
liability company or trust Borrower, it is duly organized, validly
existing and in good standing under the laws of the state of its
formation and in every other jurisdiction, except where the failure
to do so qualify would not have a material adverse effect upon the
Borrower, its property, its financial condition, or otherwise, (b)
it has the power and authority to own its properties and to carry on
its business as now being conducted and, if a corporate,
partnership, limited liability company or trust Borrower, is
qualified to do business in every jurisdiction where such
qualification is necessary, (c) it has the power to execute, deliver
and perform the Loan Documents, (d) the execution, delivery and
performance of the Loan Documents have been duly authorized by all
requisite action, (e) the execution, delivery and performance of the
Loan Documents will not violate any provision of law, any order of
any court or other agency of government, the Articles of
Incorporation, Certificate of Incorporation, or By-laws of a
corporate Borrower, the partnership agreement of a partnership,
Borrower, the Articles of Incorporation or Operating Agreement of a
limited liability company Borrower, or the trust agreement of a
trust Borrower, or any indenture, agreement or other instrument to
which it is a party, or by which it is bound, or be in conflict
with, result in a breach of or constitute (with due notice or lapse
of time or both) a default under any such indenture, agreement or
other instrument, or result in the creation or imposition of any
lien, charge or encumbrance of any nature whatsoever upon any of the
property or assets of the Borrower (other than in favor of the Bank)
or the acceleration of any of its outstanding indebtedness.
2. Financial Statements. The Borrower has heretofore furnished to the
Bank accurate and complete financial data and other information
based on its operations in previous years, and said financial data
fairly presents the financial position and the results of operations
for the periods indicated
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therein. There has been no Material Adverse Change since the date of
the most recent financial statement.
3. Litigation. There is no action, suit or proceeding at law or in
equity or by or before any governmental instrumentality or other
agency now pending or threatened against or affecting the Borrower.
4. No Conflict. The Borrower is not a party to any agreement or
instrument or subject to any restriction materially or adversely
affecting its business, properties or assets, operations or
condition, financial or otherwise. The Borrower has no knowledge
that it is in default in the performance, observance or fulfillment
of any of the obligations, covenants or conditions contained in any
agreement or instrument to which it is a party.
5. Use of Proceeds. No part of the proceeds of the Loan will be used
for consumer purposes or will be used to purchase or carry, directly
or indirectly, any margin stock or margin security (within the
meaning of Regulation U of the Board of Governors of the Federal
Reserve System) or to extend credit to others for the purpose of
purchasing or carrying any such margin stock or margin security. If
requested by the Bank, the Borrower will furnish in connection with
this Agreement a statement in conformity with the requirements of
Federal Reserve Form U-1 referred to in said Regulation U.
6. Year 2000 Plan. The Borrower has reviewed the Year 2000 Risk and is
taking such action as may be necessary to ensure that the Year 2000
Risk will not adversely affect its business operations and/or
financial condition.
IV. CONDITIONS OF LENDING.
The Bank shall be obligated to make the advances under this Agreement only
if on the date such advance is requested:
a. The Bank shall have received, to the extent applicable (i) copies of
the Articles of Incorporation, Certificate of Incorporation,
Certificate of Limited Partnership, or Certificate of a Limited
Liability Company or Partnership, each certified by the secretary of
state of the state of its formation, (ii) copies of partnership,
trust, or operating agreements, each certified to the Bank by a duly
authorized representative of such Borrower, (iii) Good Standing,
Subsistence and/or Existing Certificates of the state of formation
of the Borrower and from all other states where such Borrower
conducts its business or holds property, (iv) duly adopted
resolutions authorizing the execution, delivery and performance
under the Loan Documents certified by an officer of the Borrower.
b. The representations and warranties in Part III hereof are true and
correct;
c. No Event of Default exists;
V. COVENANTS.
The Borrower covenants and agrees that it will:
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1. (a) Legal Existence; Insurance; Etc. Keep in full force and effect
its legal existence (if a corporation, partnership, limited
liability company or trust), rights, licenses, permits and
franchises and operate its business as conducted prior to the date
hereof; maintain all property used in the conduct of its business
and keep the same in good repair, working order and condition; and
maintain adequate insurance on its properties against fire, theft,
and extended coverage risks and against public liability and
property damage and products liability and such other risks as may
be required by law or as may be reasonably required by the Bank, in
such form, for such periods, and written by such companies as may be
satisfactory to the Bank, such insurance in the case of a secured
loan to name the Bank as additional insured and/or mortgagee/loss
payee. All policies of insurance shall provide for at least twenty
(20) days' written notice to the Bank prior to cancellation or
change in the coverage, scope or amount of any such policy or
policies. Borrower shall furnish the Bank with certificates of
compliance with the foregoing insurance provision.
(b) Compliance with Laws. Comply with all present and future
applicable laws, ordinances, rules, regulations, directives and
other requirements of all governmental instrumentalities, including
without limitation those relating to Hazardous Substances, within
such time periods as required thereby, with time being of the
essence.
2. Operation of Business. Maintain and operate its business in a proper
and efficient manner.
3. Payment of Taxes. Pay and discharge all taxes, assessments, and
governmental charges imposed upon Borrower, its income or its
property before the same shall be in default, as well as all lawful
claims for labor, materials and supplies or otherwise which, if
unpaid, might become a lien upon any such properties.
4. Financial Statements. Furnish to the Bank:
(a) promptly, from time to time as requested by the Bank, and in
all events within one hundred twenty (120) days after the
close of each applicable party's tax year, (i) with respect to
the Borrower and all corporate, partnership or trust
guarantors, financial statements (audited if requested),
balance sheets, profit and loss statements, together with
supporting schedules, signed and in such form as may be
acceptable to the Bank; (ii) with respect to all individual
guarantors, signed personal financial statements; and (iii)
with respect to all entities and individuals referred to in
(i) and (ii), current Federal income tax returns (with all
schedules and exhibits), or in the case of a partnership,
Form1065 (with all schedules and exhibits). In any event, all
the documents referred to in this subparagraph (a), regardless
of when last submitted, must be submitted to the Bank, as
often as the Bank shall deem necessary, if there occurs a
Material Adverse Change.
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(b) promptly, from time to time, such other information regarding
the operations, assets, business, affairs and financial
condition of the Borrower and all guarantors, as the Bank may
reasonably request; and
(c) with respect to all personal financial statements submitted by
individual guarantors, such statements shall be on forms
prescribed by the Bank.
5. Inspection. Permit agents or representatives of the Bank, at
reasonable hours and upon reasonable notice, to inspect the Books
and Records of the Borrower and to make abstracts or reproductions
thereof, all at the Borrower's expense.
6. Averse Changes. Promptly advise the Bank of any Material Adverse
Change.
7. Accounting System. Maintain a standard system of accounting in
accordance with generally accepted accounting principles.
8. Depository. Maintain the Bank as the Borrower's principal
depository.
9. Indebtedness. Not incur or permit to exist any indebtedness or
liability except indebtedness to the Bank or any Bank affiliate,
indebtedness with respect to warranty, trade obligations and other
liabilities incurred in the ordinary course of business, and any
indebtedness or liability permitted in writing by the Bank.
10. Liens. Not create, assume or suffer to exist any mortgage, security
interest, or lien on any of its assets, now or hereafter owned,
other than liens securing indebtedness to the Bank or any Bank
affiliate, liens securing the payment of taxes not yet due, liens
imposed by law (other than for borrowed money), liens incurred by
the Borrower in good faith in the ordinary course of business, and
other liens permitted in writing by the Bank.
11. Guaranties; Etc. Not guarantee, endorse or otherwise become or be
responsible for obligations of any other person or entity, whether
by agreement to purchase the indebtedness of any other person or
entity or agreement for the furnishing of funds to any other person
or entity through purchase of Goods, supplies or services, or by way
of stock purchase, capital contribution, advance or loan, for the
purpose of paying or discharging any indebtedness or obligation of
such other person or entity, or otherwise, except endorsements of
negotiable instruments for collection in the ordinary course of
business.
12. Investments. Not purchase, invest in or otherwise acquire or hold
Securities including, without limitation, capital stock (including
closely held stock) and evidences of indebtedness of, or make loans
or advances to, or enter into any arrangement for the purpose of
providing funds or credit to, any other person or entity (including,
without limitation, all Affiliates of the Borrower), except
investments in short-term obligations of
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the United States and certificates of deposit issued by the Bank or
any Bank Affiliate.
13. Sales of Accounts and Instruments. Not sell, assign, discount or
dispose of any Accounts or Instruments held by the Borrower, with or
without recourse, except for collection (including endorsements) in
the ordinary course of business,
14. Sales and Transfers. Not sell, assign, lease, transfer, sell and
leaseback, or otherwise dispose of all or any material amount of its
assets not in the ordinary course of business to any person or
entity or turn over the management of, or enter into a management
contract with respect to, such assets.
15. Valuation. Not write up (by creating an appraisal surplus or
otherwise) the value of any capital assets above their cost less the
depreciation regularly allowable thereon.
16. Fundamental Changes. Not dissolve, liquidate, consolidate with or
merge with any corporation, limited liability company or other
entity or agree to do any of the foregoing.
17. Distributions. If a corporate Borrower, not declare or pay any
dividends, or make any distribution to holders of shares of its
capital stock, (and on account of such capital stock) of cash,
capital stock or other property, or directly or indirectly, redeem,
purchase or otherwise acquire any shares of its capital stock of any
class; and if a partnership or limited liability company Borrower,
not permit the return or withdrawal of any capital contributions;
provided, however, that if the Borrower is an "S" Corporation under
the Internal Revenue Code, the Borrower may make annually such cash
distributions to its shareholders as shall equal the sum of federal
income taxes which are allocable to such shareholders' income
received or deemed to have been received on account of such
shareholders' capital stock in the Borrower.
18. Additional Covenants. Comply with the additional covenants, if any,
set forth on affixed Exhibit A-1.
VI. SECURITY AGREEMENT AND OTHER SECURITY DOCUMENTS.
1. Security Interest; Collateral; Obligations. The Borrower hereby
grants to the Bank, as security for any and all obligations
whatsoever of the Borrower to the Bank, whether direct, indirect,
absolute or contingent, due or to become due, and whether now
existing or hereafter arising and howsoever evidenced or acquired,
including without limitation all indebtedness and liabilities
evidenced by the Loan, this Agreement, the other Loan Documents,
checking account overdrafts, and letter of credit reimbursement
agreements, excluding, however, indebtedness incurred primarily for
personal, family or household purposes (collectively, the
"Obligations"), a first lien on,
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and, security interest in and agrees and acknowledges that the Bank
has and will continue to have a first lien on, and a perfected
security interest in all of the Collateral described below, both
presently owned and after acquired, together with all proceeds and
products thereof, additions and accessions thereto, and all
replacements and substitutions therefor (collectively, the
"Collateral"), excluding, however, all such Collateral which
constitutes Consumer Goods in the hands of the Borrower: Accounts,
Inventory, Equipment, Fixtures, Books and Records, Chattel Paper,
Documents, General Intangibles, Instruments, Machinery, Contract
Rights and Furniture
2. Borrower hereby warrants, covenants and agrees that:
a. Title; Adverse Liens. Except for prior security interests
disclosed on Exhibit A-2 (if any) and except for the security
interest granted hereby, the Borrower is the owner of
presently owned Collateral and will be the owner of Collateral
hereafter acquired free from any lien or encumbrance (other
than those in favor of Bank), and Borrower will defend the
Collateral against the claims and demands of all persons at
any time claiming the same or any interest therein.
b. Financing Statements. Except for financing statements
evidencing the security interests which may be listed on
Exhibit A-2 (if any), no financing statements covering any
Collateral are on file in any public office. At the request of
the Bank, the Borrower will execute one or more (i) financing
statements pursuant to the UCC; (ii) title certificate lien
application forms; and (iii) other documents necessary or
advisable to perfect the security interests evidenced hereby,
all in form satisfactory to the Bank. Where allowed by law,
the Borrower hereby irrevocably authorizes the Bank to file
financing statements and amendments without the signature of
the Borrower. The Borrower will pay the cost of filing the
aforesaid documents or filing or recording this Agreement in
all public offices wherever filing or recording is deemed by
the Bank to be necessary or desirable.
3. Adverse Liens. The Borrower will keep the Collateral free from any
future adverse liens.
a. Equipment. If the Borrower has granted a security interest in
Equipment:
i. The Equipment is used primarily for business purposes.
ii. The Equipment will be kept at the location listed on
affixed Exhibit A-3. Borrower will promptly notify Bank
of any change in the location of the Equipment, and
Borrower will not remove the Equipment from such
location without the prior written consent of the Bank.
b. Inventory. If the Borrower has granted a security interest in
Inventory:
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i. Inventory is acquired for business purposes. In the
absence of an Event of Default hereunder, the Borrower
may sell the Inventory in the ordinary course of its
business upon terms not exceeding thirty (30) days, or
upon such further terms as the Bank may from time to
time approve. The Borrower shall not without the consent
of the Bank sell the Inventory to any supplier or
employee of the Borrower or to any person to whom the
Borrower is indebted or under circumstances which would
otherwise create a lien or encumbrance (other than those
in favor of Bank), including a right of set-off, against
the Account resulting from such sale.
4. Inventory will be kept at the location listed on affixed Exhibit
A-3. The Borrower will promptly notify the Bank of any change in the
location of the Inventory, and the Borrower will not remove the
Inventory from such location without the prior written consent of
the Bank.
a. Accounts. If the Borrower has granted a security interest in
Accounts:
i. The Borrower will upon demand render to the Bank a
statement indicating the total dollar value of the
Accounts.
ii. The only offices where the Borrower keeps Books and
Records concerning any Accounts is at the location
listed on affixed Exhibit A-3. The Borrower will not
remove any of such Books and Records from said offices
without the prior written consent of the Bank.
iii. During the five years immediately preceding the grant of
the security interest hereby to Bank, Borrower has
maintained its chief executive office at the
address(es), and during the time periods, set forth on
Exhibit A-3. Without the prior written consent of Bank,
Borrower will not change its chief executive office.
iv. The Borrower will at all times keep accurate and
complete Books and Records of its Accounts, and the Bank
or any of its agents shall have the right to inspect the
Borrower's Books and Records relating to said Accounts
or to any other transactions to which the Borrower is a
party and from which an Account might arise and to make
extracts from said Books and Records, all at the
Borrower's expense. The Bank may in its own name or in
the names of others, communicate with account debtors in
order to verify with them, to the Bank's satisfaction,
the existence, amount and terms of any Accounts. The
Borrower shall immediately notify the Bank of any event
causing loss or depreciation in value of any of its
Accounts and the amount of such loss or depreciation.
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v. If any of the Borrower's Accounts arise out of contracts
with the United States or any department, agency or
instrumentality thereof, the Borrower will immediately
notify the Bank thereof in writing and execute any
instruments and take any steps required by the Bank in
order that all moneys due and to become due under such
contracts shall be assigned to the Bank and notice
thereof given to the government under the Federal
Assignment of Claims Act.
vi. If any of the Borrower's Accounts should be evidenced by
Instruments, the Borrower will immediately deliver such
Instruments to the Bank, appropriately endorsed to the
Bank's order and, regardless of the form of such
endorsement, the Borrower hereby waives presentment,
demand or notice of any kind with respect thereto.
5. This Agreement may, but need not be supplemented by separate
assignments of Accounts to the Bank, and if such assignments are
given, the rights given thereby shall be in addition to and not in
limitation of the rights and security interests given by this
Agreement.
a. Fixtures; Farm Products. If the Borrower has granted a
security interest in Fixtures and/or Farm Products, there is
affixed hereto as Exhibit A-4 a description of the applicable
real estate and the name(s) of the record owner.
b. Investment Securities. If the Borrower has granted a security
interest in Investment Securities the Bank may transfer
Collateral into its name or that of its nominee and may
receive the income and any distributions thereon and hold the
same as Collateral for the Obligations, or apply the same to
any Obligation, whether or not an Event of Default has
occurred.
c. Taxes. The Borrower will pay promptly when due all taxes and
assessments upon the Collateral or for its use or operation or
upon this Agreement and any of the other Loan Documents.
d. Insurance. With respect to all required insurance policies and
coverage, the Bank may act either in its name or as attorney
for the Borrower (for that purpose by these presents duly
authorized and appointed with full power of substitution and
revocation) in obtaining, adjusting, settling and canceling
such insurance and endorsing any drafts in payment of any
loss.
e. Preservation of Collateral. The Bank may, at its election,
discharge taxes and liens levied or placed on the Collateral,
pay for insurance on the Collateral and pay for the
maintenance and preservation of the Collateral. The Borrower
agrees to reimburse Bank on demand for any payment made, or
any expense incurred by the Bank pursuant to the foregoing
authorization, and in any event all such
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payments and expenses shall constitute an Obligation
hereunder. If the Borrower fails to insure Collateral as
required by this Agreement or any of the Loan Documents, the
Borrower shall pay to the Bank on the date of such failure a
nonrefundable fee for each such failure equal to the sum of
(i) $100 plus (ii) the amount of the insurance premium cost
incurred by the Bank. Notwithstanding the foregoing, neither
the charging or payment of such fee nor this provision shall
in any way be deemed to waive or imply or constitute a basis
for waiver of any default occasioned by Borrower's failure to
comply with the insurance requirements of this Agreement or
any of the Loan Documents.
f Possession and Use. Other than with respect to Collateral in
which Bank's security interest is perfected by the Bank's
possession thereof, such as instruments, documents, cash, bank
accounts, etc., which so long as any of the Obligations remain
outstanding and unpaid shall remain in the possession of Bank,
until an Event of Default, the Borrower may have possession of
the collateral, provided that the Borrower will not use the
Collateral in any unlawful manner or in a manner in consistent
with this Agreement, the Loan Documents, or any policy of
insurance thereon.
g. Power of Attorney. The Borrower irrevocably designates and
appoints the Bank its true and lawful attorney with full power
of substitution and revocation to execute, deliver, and record
in the name of the Borrower all financing statements,
amendments, continuation statements, title certificate lien
applications and other documents deemed by the Bank to be
necessary or advisable to perfect or to continue the
perfection of the security interests granted hereunder.
h. Reproduction as Financing Statement. A carbon, photographic,
or other reproduction of a security agreement or a financing
statement is sufficient as a financing statement.
i. Remedies. If an Event of Default occurs, the Bank shall have
the rights and remedies provided in this Agreement, including
without limitation in Part VII hereof. In addition, the Bank
may exercise and shall have any and all rights and remedies
accorded it by the UCC. The Bank may require the Borrower to
assemble the Collateral and make it available to the Bank at a
place to be designated by the Bank which is reasonably
convenient to both parties. The requirement of reasonable
notice shall be met, if notice is mailed, postage prepaid, to
the Borrower or other person entitled thereto at least ten
(10) days (including non-business days) before the time of
sale or disposition of the Collateral. The Bank at its option
may have a receiver appointed to take possession of the
Collateral, to use and operate the Collateral, to collect the
profits
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and proceeds therefrom, and to apply the same as the court may
direct. The Borrower agrees that the Bank's legal remedies are
inadequate and that the Bank shall be entitled to obtain
equitable relief upon the occurrence of an Event of Default.
The Borrower shall pay to the Bank on demand all expenses,
including reasonable legal expenses and attorney's fees (which
may include costs allocated by the Bank's internal legal
department), incurred or paid by the Bank in protecting or
enforcing any rights of the Bank hereunder, including its
right to take possession of the Collateral, storing and
disposing of the same or in collecting the proceeds thereof.
j. Notification of Account Debtors. The Bank shall have the right
to demand from the Borrower a list of all Accounts and to
notify any and all account debtors to make payment thereof
directly to the Bank. The Borrower irrevocably designates and
appoints the Bank its true and lawful attorney with full power
of substitution and revocation in its own name or in the name
of the Borrower to demand, collect, receive, receipt for, and
xxx for all amounts due and to become due on the Accounts and
to endorse the name of the Borrower on all commercial paper
given in payment or part-payment thereof and in its discretion
to file any claim or take any other action which the Bank may
deem necessary or appropriate to protect and preserve and
realize upon the security interest of the Bank in the Accounts
or the proceeds thereof. The Bank shall also have the right to
(i) open all mail addressed to the Borrower; (ii) change the
Post Office box or mailing address of Borrower; and (iii) use
the Borrower's stationery and billing forms or facsimiles
thereof, for the purpose of collecting Accounts and realizing
upon the Collateral.
Inspection and Appraisal. The Bank and its agents and
representatives (including without limitation appraisers, engineers,
and other professionals) shall, upon reasonable advance notice, have
access to the Borrower's premises for the purpose of inspecting and
appraising the Collateral and/or performing environmental site
assessments. All fees and expenses incurred by the Bank in
connection with such inspections, appraisals and site assessments
shall be payable by the Borrower to the Bank upon demand, and until
paid in full, shall be secured by the Bank's security interests.
VII. EVENTS OF DEFAULT.
THE ITEMIZATION OF THE FOLLOWING EVENTS OF DEFAULT DOES NOT CHANGE THE
PRE-CONVERSION DATE DEMAND NATURE OF THE OBLIGATIONS EVIDENCED BY THIS
AGREEMENT AND THE NOTE
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1. Listing of Events of Default. The happening of any of the following
events or conditions with respect to the Borrower, individually and
collectively, shall constitute an "Event of Default":
a. any representation or warranty made herein or in any report,
certificate, financial statement or other instrument furnished
in connection with this Agreement or the Loan shall prove to
be false or misleading in any material respect;
b. failure to pay the principal of, or interest on, the Note or
any other indebtedness of the Borrower to the Bank, within ten
(10) days from the date the same or any installment thereof
shall become due and payable, whether at the due date thereof
or at a date fixed for prepayment or by acceleration or
otherwise;
c. default in the due observance or performance of any other
covenant, condition or agreement contained in this Agreement,
any of the other Loan Documents, or in any other agreement or
document evidencing or pertaining to Obligations, and such
other default shall remain unremedied for ten (10) days;
d. the acceleration of the maturity of any of the Borrower's
indebtedness other than to the Bank;
e. involvement in financial difficulties as evidenced by:
i. an attachment made on the Borrower's property or assets
which remains unreleased for a period in excess of
forty-five (45) days; or
ii. the inability to pay its debts (including without
limitation taxes) generally as they become due; or
iii. the appointment or authorization of a custodian as
defined in the Bankruptcy Code; provided, however, that
in the case of the appointment of a receiver in an
involuntary proceeding such appointment continues in
effect and undischarged for a period of thirty (30)
days; or
iv. the entry of an order for relief in a voluntary case
under any chapter of the Bankruptcy Code; or
v. the filing of an involuntary petition under any chapter
of the Bankruptcy Code, which petition remains
undismissed for a period of thirty (30) days; or
vi. any other judicial modification or adjustment of the
rights of Borrower's creditors;
f. final judgment for the payment in excess of an aggregate of
Ten Thousand Dollars ($10,000.00) shall be rendered against
the Borrower and the same shall remain undischarged for a
period of thirty (30) consecutive days during which execution
shall not be effectively stayed;
g. any transfer (which shall include, without limitation, by
sale, exchange, gift, pledge, hypothecation, or by other means
except
14
transfers by operation of law) to any person who is not
presently a shareholder of a corporate Borrower or the spouse
or child of a shareholder of a corporate Borrower of any
voting capital stock of the Borrower, except any transfers of
such shares upon the death of a shareholder either by will or
by intestacy;
h. any transfer (as defined in (g)) to any person who is not
presently a partner of a partnership Borrower or the spouse or
child of a partner of a partnership Borrower of any
partnership interest in the Borrower, except any transfer of
such interest upon the death of a partner either by will or
intestacy,
i. any transfer (as defined in (g)) to any person who is not
presently a member of a limited liability company Borrower or
the spouse or child of a member of a limited liability company
Borrower of any membership interest in the Borrower, except
any transfer of such interest upon the death of a member
either by will or intestacy;
j. in the case of a trust Borrower, (i) any change in the
beneficiaries of the trust; (ii) any dilution of the
beneficial interest of one or more of the beneficiaries; or
(iii) any change in the trustee or trustees;
k. the suspension of business for cause, other than strike,
casualty or other cause beyond the Borrower's control and in
the event of such suspension for cause beyond the Borrower's
control, failure to resume operations as soon as possible;
l. dissolution or termination of the legal existence of the
Borrower;
m. participation in any illegal activity or in any activity,
whether or not related to the business of the Borrower, that
may subject the assets of the Borrower to (i) a restraining
order or any form of injunction issued by any federal or state
court, or (ii) seizure, forfeiture or confiscation by any
federal or state governmental instrumentality;
n. if the Bank believes in good faith, at any time, that either
(a) the prospect of the Borrower's (i) repayment of the Loan
or payment of any of its other obligations under the Loan
Documents or (ii) performance of its duties thereunder is
impaired or (b) there is any Material Adverse Change; or
o. with respect to any guaranty and/or subordination agreement
included in the Loan Documents, the failure of the same to
remain in full force and effect until the Loan is paid in full
and this Agreement is terminated.
2. Certain Cross-Defaults. The happening of any event or condition set
forth in subsection l(e), (f), (l), or (m) above, with respect to a
general partner of a partnership Borrower or any guarantor of the
Loan shall likewise constitute an Event of Default.
3. Termination of Commitment; Acceleration. If an Event of Default
occurs prior to the Conversion Date, the Bank, at its option, may
(i) make
15
demand for payment of the entire outstanding principal balance and
all accrued interest on account of the advances (the Bank having the
right at all times, whether or not an Event of Default has occurred,
to make such demand); and (ii) tenninate the Bank's commitment to
make advances under this Agreement (provided, however, that if the
Bank shall exercise its discretionary right to make demand, such
demand shall also terminate the Bank's commitment to make advances,
whether or not an Event of Default has occurred). If an Event of
Default occurs from and after the Conversion Date, the Bank may
declare all Obligations to be immediately due and payable.
VIII. MISCELLANEOUS.
1. Waiver of Event of Default. No delay in terminating the Bank's
commitment under this Agreement and/or in making demand shall affect
the rights of the Bank later to take such action with respect
thereto, and no waiver as to one Event of Default shall affect
rights as to any other default.
2. Notices. Except as otherwise specifically provided for herein, any
notice, demand or communication hereunder shall be given in writing
(including facsimile transmission or telex) and mailed or delivered
to each party at its address set forth below, or, as to each party,
at such other address as shall be designated by such party by a
prior notice to the other party in accordance with the terms of this
provision. Any notice to the Borrower shall be sent as follows:
MIKRON INSTRUMENT COMPANY, INC., 00 XXXXXXXX XXXX, XXXXXXX, XX
00000-0000. All notices hereunder shall be effective upon the
earliest to occur of (i) five (5) business days after such notice is
mailed, by registered or certified mail, postage prepaid (return
receipt requested), (ii) upon delivery by hand, (iii) upon delivery
if delivered by overnight courier (such delivery to be evidenced by
the courier's records), and (iv) in the case of any notice or
communication by telex or telecopy, on the date when sent.
3. Survival. This Agreement and all covenants, agreements,
representations and warranties made herein and in the certificates
delivered pursuant hereto shall survive any making by the Bank of
the Loan and the execution and delivery of any Loan Documents and
shall continue in full force and effect until this Agreement is
terminated and all the Obligations are paid in full.
4. Legal Fees and Expenses; Service Fees. The Borrower will pay all
expenses incurred by the Bank in connection with the preparation of
the Loan Documents, the making of the Loan, and the enforcement of
the rights of the Bank in connection with this Agreement, any of the
other Loan Documents and the Loan, including, but not limited to,
the reasonable fees of its counsel (which may include costs
allocated by the Bank's internal legal department), plus the
disbursements of said counsel. Borrower further agrees to pay to the
Bank on demand all reasonable fees,
16
costs and expenses incurred by the Bank in connection with the
administration of the Loan, including, without limitation, overnight
courier fees, lien search fees, and filing and recording fees.
The Borrower agrees to pay on demand the Bank's service fees
and charges for administrative costs as in effect from time to time
(including, without limitation, such fees and charges as may be
expressly provided for in this Agreement). Any such fee or charge
may be implemented by the Bank from time to time or, in the case of
any such existing fee or charge, the amount thereof may be increased
by the Bank from time to time, in each instance, in or to such
amount as the Bank in its sole discretion deems reasonable.
5. Choice of Law. This Agreement and all the other Loan Documents shall
be construed in accordance with and governed by the local laws
(excluding the conflict of laws rules, so-called) of the State.
6. Written Modification and Waiver. No modification or waiver of any
provision of this Agreement or of any of the other Loan Documents
nor consent to any departure by the Borrower therefrom shall in any
event be effective unless the same shall be in writing, and then
such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice to or demand
on the Borrower in any case shall entitle the Borrower to any other
or further notice or demand in the same, similar or other
circumstances.
7. Accounting Practice. All matters involving accounting practice are
to be determined both as to classification of items and amounts in
accordance with generally accepted principles of accounting practice
consistently applied by the Borrower's accountants in the
preparation of its previous annual financial statements.
8. Documentation. All documents required hereunder shall be in form and
substance satisfactory to the Bank.
9. Replacement Docs. Upon receipt of an affidavit of an officer of Bank
as to the loss, theft, destruction or mutilation of the Note or any
security document which is not of public record, and, in the case of
any such loss, theft, destruction, mutilation, upon cancellation of
such Note or other security document, Borrower will issue, in lieu
thereof, a replacement note or other security document in the same
principal amount thereof and otherwise of like tenor.
10. Joint and Several Obligations. If this Agreement is signed by more
than one Borrower, all obligations of the Borrowers are their joint
and several obligations, and all references to the Borrower herein
shall be deemed to refer to each of them, either of them, and all of
them.
11. Unenforceability. In the event any term or provision of this
Agreement or the application thereof to any person or circumstance
shall, to any extent, be held invalid or unenforceable, the
remainder of this Agreement or the application of such term or
provision to persons or circumstances other
17
than those to which it is held invalid or unenforceable, shall be
valid and enforceable to the fullest extent permitted by law.
12. Cumulative Remedies; Setoff. Borrower and any Guarantor hereby grant
to Bank, a lien, security interest and right of setoff as security
for all liabilities and obligations to Bank, whether now existing or
hereafter arising, upon and against all deposits, credits,
collateral and property, now or hereafter in the possession,
custody, safekeeping or control of Bank or any entity under the
control of Fleet Financial Group, Inc., or in transit to any of
them. At any time, without demand or notice, Bank may set off the
same or any part thereof and apply the same to any liability or
obligation of Borrower and any Guarantor even though unmatured and
regardless of the adequacy of any collateral securing the Loan. ANY
AND ALL RIGHTS TO REQUIRE BANK TO EXCERCISE ITS RIGHTS OR REMEDIES
WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE LOAN, PRIOR
TO EXCERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS,
CREDITS OR OTHER PROPERTY OF THE BORROWER OR ANY GUARANTOR, ARE
HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.
13. Assignments and Participations. The Borrower agrees that the Bank
shall have the right at all times to sell all or any portion of the
Loan and all Loan Documents, and to grant one or more participations
in the Loan and in all Loan Documents. In connection therewith, the
Borrower hereby irrevocably authorizes the Bank to deliver to each
such purchaser, participant and prospective purchaser and
prospective participant originals and copies of all Loan Documents
and all financial statements and other credit and factual data from
time to time in the Bank's possession which relate to the Borrower
and/or all guarantors, if any, of the Loan. The Borrower further
agrees that the Bank shall have the right at all times to disclose
and report to credit reporting agencies such information pertaining
to the Borrower and/or all guarantors, if any, as is consistent with
the Bank's policies and practices from time to time in effect.
14. Pledge to Federal Reserve. Bank may at any time pledge all or any
portion of its rights under the loan documents including any portion
of the promissory note to any of the twelve (12) Federal Reserve
Banks organized under Section 4 of the Federal Reserve Act, 12
U.S.C. Section 341. No such pledge or enforcement thereof shall
release Bank from its obligations under any of the loan documents.
15. Maximum Rate of Interest. All provisions of this Agreement are
expressly subject to the condition that in no event, whether by
reason of acceleration of the maturity of the Loan or otherwise,
shall the amount paid or agreed to be paid to the Bank hereunder and
deemed interest under applicable law exceed the maximum rate of
interest on the unpaid principal balance of the Loan allowed by
applicable law (the "Maximum
18
Allowable Rate"), which shall mean the law in effect on the date of
this Agreement, except that if there is a change in such law which
results in a higher Maximum Allowable Rate being applicable to this
Agreement, then this Agreement shall be governed by such amended law
from and after its effective date. In the event that fulfillment of
any provision of this Agreement results in the interest rate
hereunder being in excess of the Maximum Allowable Rate, the
obligation to be fulfilled shall automatically be reduced to
eliminate such excess. If, notwithstanding the foregoing, the Bank
receives an amount which under applicable law would cause the
interest rate set forth in this Agreement to exceed the Maximum
Allowable Rate, the portion thereof which would be excessive shall
automatically be applied to and deemed a prepayment of the unpaid
principal balance of the Loan and not a payment of interest.
16. WAIVER OF JURY TRIAL THE BORROWER WAIVES ANY RIGHTS IT MAY HAVE TO A
TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
AGREEMENT AND ANY OF THE OTHER LOAN DOCUMENTS, AND AGREES THAT ANY
SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.
17. Jurisdiction and Venue. The Borrower irrevocably consents that any
legal action or proceeding against it or any of its property with
respect to any matter arising under or relating to this Agreement
and the other Loan Documents may be brought in any court of the
State, or any Federal Court of the United States of America located
in the State, as the Bank may elect, and by execution and delivery
of this Agreement the Borrower hereby submits to and accepts with
regard to any such action or proceeding, for itself and in respect
of its property, generally and unconditionally, the jurisdiction of
the aforesaid courts. The Borrower further irrevocably consents to
the service of process in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage
prepaid, to the Borrower at its address set forth herein. The
foregoing, however, shall not limit the Bank's rights to serve
process in any other manner permitted by law or to bring any legal
action or proceeding or to obtain execution of judgment in any other
jurisdiction. The Borrower irrevocably waives any objection which it
may now or hereafter have to the laying of the venue of any suit,
action or proceeding arising out of or relating to this Agreement
and the other Loan Documents, and further irrevocably waives any
claim that the State is not a convenient forum for any such suit,
action or proceeding.
18. Presentment; Etc. The Borrower waives presentment, notice of
dishonor, protest, notice of non-payment, and (from and after the
Conversion Date) demand and other notice of any kind.
19. Debit. The Borrower hereby irrevocably authorizes the Bank and any
subsequent holder of the Note, both before and after demand, to
debit any
19
of the Borrower's business accounts maintained with the Bank (or
subsequent holder for all sums (including without limitation
principal, interest, late fees, and other fees) payable from time to
time under this Agreement and the other Loan Documents. In addition,
if the Borrower has signed a separate authorization, the Bank is
authorized to initiate ACH debit transfers for the Loan payments and
on the business account(s) specified in the authorization. These
provisions shall not obligate the Bank to create or allow any
overdraft, and such authority shall not relieve the Borrower of the
obligation to assure that payments are made when due.
20. Integration. The Loan Documents supersede all prior agreements
between the parties with respect to the Loan, whether oral or
written, including, without limitation, all correspondence between
counsel for the respective parties and commitment letters. The Loan
Documents constitute the entire agreements between the parties with
respect to the Loan, and the rights, duties, and obligations of the
par-ties with respect thereto.
21. Lender Liability. The Bank shall not be liable for any loss
sustained by any party resulting from any action, omission, or
failure to act by the Bank, whether with respect to the exercise or
enforcement of the Bank's rights or remedies under the Loan
Documents, the Loan, or otherwise, unless such loss is caused by the
actual willful misconduct of the Bank conducted in bad faith. IN NO
EVENT SHALL THE BANK EVER BE LIABLE FOR CONSEQUENTIAL OR PUNITIVE
DAMAGES, ANY RIGHT OR CLAIM THERETO BEING EXPRESSLY AND
UNCONDITIONALLY WAIVED.
22. Bank's Decisional Standards. To the extent that applicable laws
require the Bank's actions or decisions under the Loan Documents to
be conducted in good faith, the term "good faith" shall be defined
(using a subjective standard) as honesty in fact with regard to the
conduct or transaction concerned based upon the facts and
circumstances actually known to the individual(s) acting for the
Bank, and such requirement may be satisfied by reliance upon the
advice of attorneys, accountants, appraisers, architects, engineers,
or other qualified professionals.
23. Descriptive Headings; Context. The captions in this Agreement are
for convenience of reference only and shall not define or limit any
provision. Whenever the context requires, reference in this
Agreement to the neuter gender shall include the masculine and/or
feminine gender, and the singular number shall include the plural,
and, in each case, vice versa.
24. Acknowledgment of Copy. The Borrower acknowledges that it has
received a fully executed copy of this Agreement.
IN WITNESS WHEREOF, the Borrower and the Bank, by persons duly authorized, have
executed this Agreement as of _________________, 2000.
WITNESS:
20
