Note and Security Agreement
$ 23,000,000.00
December 30, 1997
For value received, and intending to be legally bound,
Undersigned, as defined below, promises to pay to
Mellon Bank, N.A.
("Bank") or its order at Harrisburg, Pennsylvania, the sum of Twenty-Three
Million and NO/100 ($ 23,000,000.00), or such lesser or greater principal amount
as may be outstanding from time to time under the Revolving Line of Credit
Agreement dated August 31, 1994 (as amended and supplemented from time to time,
the "Credit Agreement"), outstanding balance from the date of this Note and
Security Agreement ("Note") at the rate(s) ("Contractual Rate(s)") specified
herein.
Payment and principal and interest shall be due and payable, as set forth in the
attached supplement to Note and Security Agreement.
This Note and Security Agreement is given in replacement of that original Note
and Security Agreement dated August 31, 1994, and as amended and restated on
November 1. 1994, December 29, 1994, February 1, 1995, April 3, 1995, June 21,
1995, and November 14, 1996, in order to extend the maturity date. This is not a
novation of the prior Note and Security Agreement(s). All prior security
interests granted shall carry to this Note and Security Agreement.
After maturity, whether by acceleration or otherwise, interest shall accrue at a
rate 2 percent per annum above the Contractual Rate(s) specified until all sums
due hereunder are paid. Interest shall continue to accrue after the entry of
judgment by confession or otherwise at the Contractual Rate(s) until all sums
due hereunder and/or under the judgment are paid, unless the Contractual Rate(s)
is (are) altered by Subsequent maturity. Undersigned agrees to pay to Bank, as
consideration for Bank's commitment under the Credit Agreement, (i) a commitment
fee equal to N/A % per annum on the unborrowed Commitment Amount (as defined in
the Credit Agreement), from time to time, for each day of the Commitment Period
(as defined in the Credit Agreement), and (ii) a facility fee equal to N/A % per
annum in the Commitment Amount (whether borrowed or unborrowed) for each day of
the Commitment Period, in each base payable for the preceding period for which
such fee has not been paid, (a) on the last day of each N/A, and N/A after the
date hereof, (b) on the date of each reduction of the Commitment amount on the
amount so reduced, and (c) on the last day of the Commitment Period.
If any law, regulation, order, decree or guideline or interpretation or
application thereof by any governmental authority charged with the
interpretation or administration thereof or compliance by Bank with any request
or directive of any governmental authority (whether or not having the force of
law) shall either impose, modify or deem applicable any capital adequacy or
similar requirement against assets (funded or contingent) of, or credits or
commitments to extend credit extended by Bank and the result of any of the
foregoing is to increase the cost to, reduce the income receivable by, or impose
any expense (including loss of margin) upon Bank with respect to the Credit
Agreement, this Note, or the making, maintenance or funding of any part of the
Loans (or, in the case of capital adequacy or similar requirement, to have the
effect of reducing the rate of return on Bank's capital, taking into account
Bank's policies with regard to adequacy) by an amount which Bank deems to be
material, Bank shall from time to time notify Undersigned of the amount
determined in good faith by Bank (which determination shall be conclusive absent
manifest error) to be necessary to compensate Bank for such increase, reduction
or imposition. Such amount shall be due and payable by Undersigned to Bank ten
(10) business days after such notice is given.
So long as Bank is the holder hereof, Bank's book's, and records shall be
presumed, except in the case or manifest error, to accurately evidence at all
times all amounts outstanding under this Note and the date and amount of each
advance and payment made pursuant hereto.
The prompt and faithful performance of all of Undersigned's obligations
hereunder, including without limitation time of payment, is of the essence of
this Note.
Certain terms used in this Note are defined in Section 9 below.
1. Security Interest. Undersigned hereby grants to Bank a security interest in
the following property now owned or hereafter acquired by Undersigned:
(b) all inventory (whether held for sale or lease or to be furnished under
contracts of service), raw materials, work in process, and materials used or
consumed in the conduct of Undersigned's business, and all books, records,
invoices and other documents which describe or evidence the same;
(d) all accounts, contract rights, general intangibles, choses in action,
instruments, chattel paper, documents (including all documents of title and
warehouse receipts) and all rights to the payment of money, however evidenced or
arising;
(g) In addition to the foregoing, Undersigned (1) grants to Bank a security
interest in all accessions, parts, accessories, attachments and appurtenances in
any way used with, attached or related to, installed in, any equipment or
inventory constituting "Collateral" hereunder; (2) grants to Bank a security
interest in all substitutions for, renewals of, improvements, replacements and
additions to, and the products and proceeds (cash and non-cash) of all property
constituting "Collateral" hereunder and any insurance policies relating thereto;
(3) grants to Bank a security interest in, lien upon, and right of setoff
against, all deposit accounts, credits, securities, moneys or other property of
Undersigned which may at any time be in the possession of, delivered to, or owed
by Bank, including any proceeds or returned or unearned premiums of insurance,
and the proceeds (cash and non-cash) of all the foregoing property; and (4)
assigns to Bank all moneys which may become payable on any policy of insurance
required to be maintained under this Note, including any returned or unearned
premiums.
All such property subject to Bank's security interests described in this section
1 is referred to herein collectively as the "Collateral". With respect to
Section 4 hereunder, the term "Collateral" shall not include the property
described in subsections (g) (3) and (g) (4) of this Section 1.
All security interests in Collateral shall be deemed to arise and be perfected
under and governed by the Uniform Commercial Code, except to the extent that
such law does not apply to certain types of transactions or Collateral, in which
case applicable law shall govern.
2. Obligations Secured. The Collateral shall secure the following obligations
("Obligations") of Undersigned to Bank: (a) all amounts at any time owing or
payable under this Note; (b) all costs and expenses incurred by Bank in the
collection or enforcement of this Note or the protection of the Collateral; (c)
all future advances made by bank for taxes, levies, insurance, and repairs to or
maintenance of the Collateral; and (d) any other indebtedness, liability or
obligation of Undersigned to Bank, past, present, or future, direct or indirect,
absolute or contingent, individual, joint or several, now due or to become due,
whether as drawer, maker, endorser, guarantor, surety or otherwise, except that
none of the security interests created herein shall secure any obligation
incurred by Undersigned which is defined as "consumer credit" by Federal Reserve
Board Regulation Z, 12 C.F.R. 226.1 et seq., and is not exempted from the
application of that Regulation.
3. Representations. Undersigned hereby makes the following representations and
warranties which shall be true and correct on the date of this Note and shall
continue to be true and correct at the time of the creation of any Obligation
secured hereby and until the Obligations secured hereby shall have been paid in
full: (a) Undersigned's residence and/or Chief Executive Office, as the case may
be, is as stated below or as otherwise stated in a subsequent written notice
delivered to Bank pursuant to the terms hereof, (b) Undersigned has good and
marketable title to the Collateral subject to no security interest, lien or
encumbrance, except as indicated to the contrary to Bank in writing prior to the
execution of this Note; and (c) if any of the Undersigned is an individual, each
such individual is at least 18 years of age and under no legal disability or
incapacity.
4. Covenants. Undersigned covenants and agrees that until the Obligations
secured hereunder have been paid in full, Undersigned shall: (a) use the
proceeds of the Loans evidenced hereby only for the purpose(s) specified to the
Bank at or prior to the execution hereof, (b) not permit use of the Collateral
for any illegal purposes; (c) promptly notify Bank in writing of any change in
its or their residence or Chief Executive Office; (d) not permit removal of any
of the Collateral from county to county or state to state unless Bank has given
written consent in advance; (e) maintain at all times good and marketable title
to all Collateral, free and clear of any security interest, lien or encumbrance
(except as to which Bank may grant its prior written consent pursuant to section
4(f) below), and defend such title against the claims and demands of all
persons; (f) not (1) affix the Collateral or permit the Collateral to be affixed
to real estate or to any other goods, (2) lease, mortgage, pledge or encumber
the Collateral, (3) permit the Collateral's identity to be lost, (4) permit the
Collateral to be levied upon or attached under any legal process, (5) permit or
cause any security interest or lien to arise with respect to the Collateral
(other than those created in this Note), or (6) except Collateral customarily
sold by Undersigned in the ordinary course of business and so sold in such
manner for full value, sell, consign, part with possession of, or otherwise
dispose of the Collateral or any rights therein, except as Bank may grant its
prior specific written consent with respect to acts or events specified in
subsections (1), (2), (5) or (6) hereof-, (g) maintain the Collateral in good
condition and repair, excepting only reasonable wear and tear; pay and discharge
all taxes and other levies on the Collateral, as well as the costs of repair and
maintenance thereof; and furnish to Bank upon request documentary proof of
payment of such taxes, levies and costs; (h) provide additional collateral at
such times and having such value as Bank may request, if Bank shall have
reasonable grounds for believing that the value of the Collateral has become
insufficient to secure all Obligations evidenced or secured by this Note; (i)
purchase and maintain policies of insurance (including flood insurance) to
protect the Collateral or other property against such risks and casualties, and
in such amounts, as shall be required by Bank and/or applicable law, which
policies shall (1) be in form and substance satisfactory to Bank, (2) designate
Bank as loss payee and, at Bank's option, as additional insured, and (3) be (or
certificates evidencing same shall be deposited with Bank; (j) provide, upon
request, financial or other information, documentation or certifications to Bank
(including balance sheets and income statements), all in form and content
satisfactory to Bank; (k) execute, upon demand by Bank, any financing statements
or other documents which Bank may deem necessary to perfect or maintain
perfection of the security interests created in this Note and pay all costs and
fees pertaining to the filing of any financing, continuation or termination
statements with regard to such security interests; (l) procure, and cause a
statement of Bank's security interest to be noted on, any certificate of title
issued or required by law to be issued with respect to any motor vehicle
constituting part of the Collateral, and cause any such certificate to be
delivered to Bank within 10 days from the later of the date of this Note or the
date of the issuance of such certificate; (m) pay, upon demand, all amounts
incurred by Bank in connection with any action or proceeding taken or commenced
by Bank to enforce or collect this Note or protect, insure or realize upon the
Collateral, including attorney's fees equal to the lesser of (a) 20% of the
above sum and interest then due hereunder, or $500.00, whichever is greater, or
(b) the maximum amount permitted by law, and attorney's costs and all costs of
legal proceedings; and (n) immediately notify Bank if any of Undersigned's
accounts arise out of contracts with the United States or any department, agency
or instrumentality thereof, and execute any instruments and take any steps
required by Bank in order that all moneys due and to become due under any such
contracts shall be assigned to Bank and notice thereof given to the United
States under the Federal Assignment of Claims Act.
5. Events of Default. The occurrence of any of the following shall constitute an
"Event of Default' hereunder:(a) default in payment or performance of any of the
Obligations evidenced or secured by this Note or any other evidence of liability
of Undersigned to Bank; (b) the breach by any Obligor (defined as Undersigned
and each surety or guarantor of any of Undersigned's liabilities to Bank, as
well as any person or entity granting Bank a security interest in property to
secure the Obligations evidenced hereby) of any covenant contained in the Credit
Agreement, this Note, or in any separate security, guarantee or suretyship
agreement between Bank and any Obligor, the occurrence of any default hereunder
or under the terms of any, such agreement or the discovery by Bank of any false
or misleading representation made by any Obligor herein or in any such agreement
or in any other information submitted to Bank by any Obligor; (c) with respect
to any, Obligor: (1) death or incapacity of any individual or general partner;
or (2) dissolution of any partnership or corporation; (d) any assignment for the
benefit of creditors by any Obligor; (e) insolvency of any Obligor; (f) the
filing or commencement of any petition, action, case or proceeding, voluntary or
involuntary, under any state or federal law regarding bankruptcy, insolvency,
reorganization, receivership or dissolution, including the Bankruptcy Reform Act
of 1978, as amended, by or against any Obligor; (g) default under the terms of
any lease of or mortgage on the premises where any Collateral is located; (h)
garnishment, attachment or taking by governmental authority of any Collateral or
other property of the Undersigned which is in Bank's possession; (i) a
determination by bank, which determination shall be conclusive if made in good
faith, that a material adverse change has occurred in the financial or business
condition of Undersigned; or (j) the maturity of any life insurance policy held
as Collateral under this Note by reason of the death of the insured or
otherwise.
6. Acceleration; Remedies. Upon the occurrence of any Event of Default: (a) all
amounts due under this Note, including the unpaid balance of principal and
interest hereof, shall become immediately due and payable at the option of Bank,
without any demand or notice whatsoever; (b) Undersigned shall, upon demand by
Bank, assemble the Collateral and promptly make it available to Bank at any
place designated by Bank with is reasonably convenient to both parties; (c) Bank
may immediately and without demand exercise any of it s rights and remedies
granted herein, under applicable law, or which it may otherwise have, against
the Undersigned, the Collateral, or otherwise; and (d) Bank may, without notice
or process of any sort, peaceably enter any premises where any vehicle
constituting a part of the Collateral is located and take possession, retain and
dispose of such vehicle and all property located in or upon it. Bank shall have
no obligation to return any property not constituting Collateral found in any
such vehicle unless Bank actually receives Undersigned's written request
therefor specifically describing such property within 72 hours after
repossession thereof. Notwithstanding any provision to the contrary contained
herein, upon the occurrence of an Event of Default as described in Section 5 (f)
hereof, all amounts due under this Note shall become immediately due and
payable, without any demand, notice, or further action by Bank whatsoever, and
an action therefor shall immediately accrue.
7. Bank's Rights. Undersigned hereby authorizes Bank, and Bank shall have the
continuing right, at its sole option and discretion, to: (a) do anything which
Undersigned is required but fails to do hereunder, and in particular Bank may,
if Undersigned fails to do so, (1) insure or take any reasonable steps to
protect the Collateral, (2) pay all taxes, levies, expenses and costs arising
with respect to the Collateral, or (3) pay any premiums payable on any policy of
insurance required to be obtained or maintained hereunder, and add any amounts
paid under this Section 7(a) to the principal amount of the indebtedness secured
by this Note; (b) direct any insurer to make payment of any insurance proceeds,
including any returned or unearned premiums, directly to Bank, and apply such
moneys to any Obligations or other amounts evidenced or secured hereby in such
order of fashion as Bank may elect; (c) inspect the Collateral at any reasonable
time; (d) pay any amounts Bank elects to pay or advance hereunder on account of
insurance, taxes, or other costs, fees, or charges arising in connection with
the Collateral, either directly to the payee of such cost, fee, or charge,
directly to Undersigned, or to such payee(s) and Undersigned jointly, and (e)
pay the proceeds of the Loans evidenced by this Note to any or all of the
Undersigned Individually or jointly, or to such other persons as any of the
Undersigned may direct.
In addition to all rights given to Bank by this Note, Bank shall have all the
rights and remedies of a secured party under any applicable law, including
without limitation, the Uniform Commercial Code.
B. Miscellaneous Provisions (a) Undersigned waives protest of all commercial
paper at any time held by Bank on which Undersigned is in any way liable, notice
of nonpayment at maturity of any and all accounts, and (except where requested
hereby) notice of action taken by Bank; and hereby ratifies and confirms
whatever Bank may do. Bank shall be entitled to exercise any right
notwithstanding any prior exercise, failure to exercise or delay in exercising
any such right. (b) Bank shall retain the lien of any judgment entered on
account of the indebtedness evidenced hereby, as well as any security interest
previously granted to secure repayment of the indebtedness evidenced hereby, and
Undersigned warrants that Undersigned has no defense whatsoever to any action or
proceeding that may be brought to enforce or realize on such judgment or
security interest. (c) If any provision hereof shall for any reason be held
invalid or unenforceable, no other provision shall be affected thereby, and this
Note shall be construed as if the invalid or unenforceable provision had never
been a part of it. The descriptive headings of this Note are for convenience
only and shall not in any way affect the meaning or construction of any
provision hereof. (a) The rights and privileges of Bank contained in this Note
shall inure to the benefit of its successors and assigns, and the duties of
Undersigned shall bind all heirs, personal representatives, successors and
assigns. (a) This Note shall in all respects be governed by the laws of the
state in which this Note is payable (except to the extent that federal law
governs), and all references to the Uniform Commercial Code shall be deemed to
refer to the Uniform Commercial Code as enacted in such state. (f) Undersigned
hereby irrevocably appoints Bank and each holder hereof as Undersigned's
attorney-in-fact to: (1) endorse Undersigned's name to any draft or check which
may be payable to Undersigned in order to collect the proceeds of any insurance
or any returned or unearned premiums in respect of any policies of insurance
required to be maintained hereunder; and (2) take any action Bank deems
necessary to perfect or maintain perfection of any security interest granted to
Bank herein, including executing any document on Undersigned's behalf. (g)
Undersigned shall bear the risk of loss of, damage to, or destruction of the
Collateral, and Undersigned hereby releases Bank from all claims for loss or
damage to the Collateral caused by any act or omission on the part of Bank,
except for willful misconduct. (h) Copies or reproductions of this document or
of any financing statement may be filed as a Financing statement.
9. Definitions. As used herein: (a) "account", "chattel paper", "contract
right", "document", "instrument", and "inventory" have the same respective
meanings given to those terms in the Uniform Commercial Code; (b) "general
intangibles" has the meaning given to that term in the Uniform Commercial Code,
including without limitation, customer lists, books and records (including
without limitation, all correspondence, files, tapes, cards, book entries,
computer runs computer programs and other papers and documents, whether in the
possession or control of Undersigned or any computer service bureau), rights in
franchises and sales contracts, patents, copyrights, trademarks, logos,
goodwill, trade names, label designs, royalties, brand names, plans, blueprints,
inventions, patterns, trade secrets, licenses, jigs, dies, molds, and formulas;
(c) "Chief Executive Office" means the place from which the main part of the
business operations of an entity is managed; and (d) "Undersigned" refers
individually and collectively to all makers of this Note, including, in the case
of any partnership, all general partners of such partnership individually and
collectively, whether or not such partners sign below. Undersigned shall be
jointly and severally bound by the terms hereof, and, with respect to any
partnership executing this Note, each general partner shall be bound hereby both
in such general partner's individual and partnership capacities.
Capitalized terms not defined in this Note shall have the same meanings set
forth in the Credit Agreement.
10. Confession of Judgment. Undersigned hereby empowers the prothonotary or any
attorney of any court of record to appear for Undersigned and to confess
judgment as often as necessary against Undersigned in favor of the holder
hereof, as of any term, for the above sum plus interest due under the terms
hereof, together with costs of legal proceedings and an attorney's commission
equal to the lesser of (a) 20% of the above sum and interest then due hereunder
or $500.00, whichever is greater, or (b) the maximum amount permitted by law,
with release of all errors. Undersigned waives all laws exempting real or
personal property from execution.
SIGNATURES
Attest/Witness:
/s/ Xxxxxx X. Xxxxxxx
Controller and Assistant Secretary
Corporation
C-COR Electronics, Inc.
/s/ Xxxxx X. Xxxxxx
VP-Finance
Business Address:
00 Xxxxxxx Xxxx
Xxxxx Xxxxxxx, XX 00000
