1.	FACILITY: LINE OF CREDIT AMOUNT AND TERMS

1.1	Line of Credit Amount

 

(a)	During the availability period described below, the Bank will provide a line of credit to the Borrowers. The amount of the line of credit (the “Facility Commitment”) is Twelve Million Dollars ($12,000,000).

(b)	This is a revolving line of credit. During the availability period, the Borrowers may repay principal amounts and reborrow them.

(c)	The Borrowers agree not to permit the principal balance outstanding to exceed the Facility Commitment. If the Borrowers exceed this limit, the Borrowers will immediately pay the excess to the Bank upon the Bank’s demand.

1.2	Availability Period

 

 

1.3	Repayment Terms

 

(a)	The Borrowers will pay interest on May 1, 2007, and then on the same day of each month thereafter until payment in full of any principal outstanding under this facility.

(b)	The Borrowers will repay in full any principal, interest or other charges outstanding under this facility no later than the Facility Expiration Date. Any interest period for an optional interest rate (as described below) shall expire no later than the Facility Expiration Date.

1.4	Interest Rate

 

(a)	The interest rate is a rate per year equal to the Bank’s Prime Rate minus one percentage point(s).

(b)

The Prime Rate is the rate of interest publicly announced from time to time by the Bank as its Prime Rate. The Prime Rate is set by the Bank based on various factors, including the Bank’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans. The Bank may price loans to its customers at, above, or below the Prime Rate. Any change in the Prime Rate shall take effect at the opening of business on the day specified in the public announcement of a change in the Bank’s Prime Rate.

1.5	Optional Interest Rates

 

 

 

 

(a)	The LIBOR Rate plus one hundred seventy-five percentage point(s).

1.6	Letters of Credit

 

(a)	During the availability period, at the request of the Borrowers, the Bank will issue:

(i)	Standby letters of credit with a maximum maturity of 365 days but not to extend more than 180 days beyond the Facility Expiration Date.

(ii)	The amount of the letters of credit outstanding at any one time (including the drawn and unreimbursed amounts of the letters of credit) may not exceed Two Million Dollars ($2,000,000).

(b)	In calculating the principal amount outstanding under the Facility Commitment, the calculation shall include the amount of any letters of credit outstanding, including amounts drawn on any letters of credit and not yet reimbursed.

(c)	The Borrowers agree:

(i)	Any sum drawn under a letter of credit may, at the option of the Bank, be added to the principal amount outstanding under this Agreement. The amount will bear interest and be due as described elsewhere in this Agreement.

(ii)	If there is a default under this Agreement, to immediately prepay and make the Bank whole for any outstanding letters of credit.

(iii)

The issuance of any letter of credit and any amendment to a letter of credit is subject to the Bank’s written approval and must be in form and content satisfactory to the Bank and in favor of a beneficiary acceptable to the Bank.

(iv)	To sign the Bank’s form Application and Agreement for Standby Letter of Credit.

(v)	To pay any issuance and/or other fees that the Bank notifies the Borrowers will be charged for issuing and processing letters of credit for the Borrowers.

(vi)	To allow the Bank to automatically charge its checking account for applicable fees, discounts, and other charges.

(vii)

To pay the Bank a non-refundable fee equal to 1.25% per annum of the outstanding undrawn amount of each standby letter of credit, payable quarterly in advance, calculated on the basis of the face amount outstanding on the day the fee is calculated. If there is a default under this Agreement, at the Bank’s option, the amount of the fee shall be increased to 6% per annum, effective starting on the day the Bank provides notice of the increase to the Borrowers.

2.	OPTIONAL INTEREST RATES

2.1	Optional Rates

 

 

2.2	LIBOR Rate

 

(a)

The interest period during which the LIBOR Rate will be in effect will be one or two weeks, or one, two, three, four or six months. The first day of the interest period must be a day other than a Saturday or a Sunday on which banks are open for business in New York and London and dealing in offshore dollars (a “LIBOR Banking Day”). The last day of the interest period and the actual number of days during the interest period will be determined by the Bank using the practices of the London inter-bank market.

(b)	Each LIBOR Rate Portion will be for an amount not less than One Hundred Thousand Dollars ($100,000).

(c)	The “LIBOR Rate” means the interest rate determined by the following formula. (All amounts in the calculation will be determined by the Bank as of the first day of the interest period.)

LIBOR Rate =	London Inter-Bank Offered Rate
	(1.00 - Reserve Percentage)

(i)

“London Inter-Bank Offered Rate” means, for any applicable interest period, the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as selected by the Bank from time to time) at approximately 11:00 a.m. London time two (2) London Banking Days before the commencement of the interest period, for U.S. Dollar deposits (for delivery on the first day of such interest period) with a term equivalent to such interest period. If such rate is not available at such time for any reason, then the rate for that interest period will be determined by such alternate method as reasonably selected by the Bank. A “London Banking Day” is a day on which banks in London are open for business and dealing in offshore dollars.

(ii)

“Reserve Percentage” means the total of the maximum reserve percentages for determining the reserves to be maintained by member banks of the Federal Reserve System for Eurocurrency Liabilities, as defined in Federal Reserve Board Regulation D, rounded upward to the nearest 1/100 of one percent. The percentage will be expressed as a decimal, and will include, but not be limited to, marginal, emergency, supplemental, special, and other reserve percentages.

(d)

The Borrowers shall irrevocably request a LIBOR Rate Portion no later than 12:00 noon Philadelphia time on the LIBOR Banking Day preceding the day on which the London Inter-Bank Offered Rate will be set, as specified above. For example, if there are no intervening holidays or weekend days in any of the relevant locations, the request must be made at least three days before the LIBOR Rate takes effect.

(e)	The Bank will have no obligation to accept an election for a LIBOR Rate Portion if any of the following described events has occurred and is continuing:

(i)	Dollar deposits in the principal amount, and for periods equal to the interest period, of a LIBOR Rate Portion are not available in the London inter-bank market; or

(ii)	the LIBOR Rate does not accurately reflect the cost of a LIBOR Rate Portion.

(f)

Each prepayment of a LIBOR Rate Portion, whether voluntary, by reason of acceleration or otherwise, will be accompanied by the amount of accrued interest on the amount prepaid and a prepayment fee as described below. A “prepayment” is a payment of an amount on a date earlier than the scheduled payment date for such amount as required by this Agreement.

(g)

The prepayment fee shall be in an amount sufficient to compensate the Bank for any loss, cost or expense incurred by it as a result of the prepayment, including any loss of anticipated profits and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Portion or from fees payable to terminate the deposits from which such funds were obtained. The Borrowers shall also pay any customary administrative fees charged by the Bank in connection with the foregoing. For purposes of this paragraph, the Bank shall be deemed to have funded each Portion by a matching deposit or other borrowing in the applicable interbank market, whether or not such Portion was in fact so funded.

3.	FEES AND EXPENSES

3.1

Fees

 

 

 

(a)

Unused Commitment Fee. The Borrowers agree to pay a fee on any difference between the Facility Commitment and the amount of credit it actually uses, determined by the average of the daily amount of credit outstanding during the specified period. The fee will be calculated at 0.25% per year. The calculation of credit outstanding shall include the undrawn amount of letters of credit.

(b)

Waiver Fee. If the Bank, at its discretion, agrees to waive or amend any terms of this Agreement, the Borrowers will, at the Bank’s option, pay the Bank a fee for each waiver or amendment in an amount advised by the Bank at the time the Borrowers request the waiver or amendment. Nothing in this paragraph shall imply that the Bank is obligated to agree to any waiver or amendment requested by the Borrowers. The Bank may impose additional requirements as a condition to any waiver or amendment.

(c)

Late Fee. To the extent permitted by law, the Borrowers agree to pay a late fee in an amount not to exceed two percent (2%) of any payment that is more than fifteen (15) days late. The imposition and payment of a late fee shall not constitute a waiver of the Bank’s rights with respect to the default.

3.2

Expenses

 

3.3	Reimbursement Costs

 

(a)

The Borrowers agree to reimburse the Bank for any expenses it incurs in the preparation of this Agreement and any agreement or instrument required by this Agreement. Expenses include, but are not limited to, reasonable attorneys’ fees, including any allocated costs of the Bank’s in-house counsel to the extent permitted by applicable law.

(b)

The Borrowers agree to reimburse the Bank for the cost of periodic field examinations of any Borrower’s books, records and collateral, and appraisals of the collateral, at such intervals as the Bank may reasonably require. The actions described in this paragraph may be performed by employees of the Bank or by independent appraisers. The Bank reserves the right to conduct field examinations, the cost of which will be borne by the Borrowers. Unless the Borrowers are in default, field examinations will be conducted no more frequently than once per fiscal year.

4.	COLLATERAL

4.1	Personal Property

 

 

 

 

(a)	Equipment;

(b)	Inventory;

(c)	Receivables;

(d)	General Intangibles.

5.	DISBURSEMENTS, PAYMENTS AND COSTS

5.1	Disbursements and Payments

 

(a)

Each payment by the Borrowers will be made in U.S. Dollars and immediately available funds by direct debit to a deposit account as specified below or, for payments not required to be made by direct debit, by mail to the address shown on the Borrowers’ statement or at one of the Bank’s banking centers in the United States.

(b)	Each disbursement by the Bank and each payment by the Borrowers will be evidenced by records kept by the Bank. In addition, the Bank may, at its discretion, require the Borrowers to sign one or more promissory notes.

5.2	Requests for Credit; Equal Access by all Borrowers

 

5.3	Telephone and Telefax Authorization

 

(a)

The Bank may honor telephone or telefax instructions for advances or repayments or for the designation of optional interest rates and telefax requests for the issuance of letters of credit given, or purported to be given, by any one of the individuals authorized to sign loan agreements on behalf of the Borrowers, or any other individual designated by any one of such authorized signers.

(b)	Advances will be deposited in and repayments will be withdrawn from account number __________ owned by ______________, or such other of any Borrower’s accounts with the Bank as designated in writing by the Borrowers.

(c)

The Borrowers will indemnify and hold the Bank harmless from all liability, loss, and costs in connection with any act resulting from telephone or telefax instructions the Bank reasonably believes are made by any individual authorized by the Borrowers to give such instructions. This paragraph will survive this Agreement’s termination, and will benefit the Bank and its officers, employees, and agents.

5.4	Direct Debit (Pre-Billing)

 

 

 

(a)

The Borrowers agree that the Bank will debit deposit account number ____________ owned by ___________, or such other of the Borrowers’ accounts with the Bank as designated in writing by the Borrowers (the “Designated Account”) on the date each payment of principal and interest and any fees from the Borrowers becomes due (the “Due Date”).

(b)

Prior to each Due Date, the Bank will mail to the Borrowers a statement of the amounts that will be due on that Due Date (the “Billed Amount”). The bill will be mailed a specified number of calendar days prior to the Due Date, which number of days will be mutually agreed from time to time by the Bank and the Borrowers. The calculations in the bill will be made on the assumption that no new extensions of credit or payments will be made between the date of the billing statement and the Due Date, and that there will be no changes in the applicable interest rate.

(c)	The Bank will debit the Designated Account for the Billed Amount, regardless of the actual amount due on that date (the “Accrued Amount”). If the Billed Amount debited to the Designated Account differs from the Accrued Amount, the discrepancy will be treated as follows:

(i)	If the Billed Amount is less than the Accrued Amount, the Billed Amount for the following Due Date will be increased by the amount of the discrepancy. The Borrowers will not be in default by reason of any such discrepancy.

(ii)	If the Billed Amount is more than the Accrued Amount, the Billed Amount for the following Due Date will be decreased by the amount of the discrepancy.

(d)	The Borrowers will maintain sufficient funds in the Designated Account to cover each debit. If there are insufficient funds in the Designated Account on the date the Bank enters any debit authorized by this Agreement, the Bank may reverse the debit.

5.5	Banking Days

 

5.6	Interest Calculation

 

5.7	Default Rate

 

 

6.	CONDITIONS

6.1	Authorizations

 

6.2	Governing Documents

 

6.3	Security Agreements

 

6.4	Perfection and Evidence of Priority

 

6.5	Payment of Fees

 

6.6	Repayment of Other Credit Agreement

 

6.7	Good Standing

 

6.8	Legal Opinion

 

6.9	Landlord Agreement

 

6.10

Insurance

 

7.	REPRESENTATIONS AND WARRANTIES

 

7.1

Formation

 

7.2	Authorization

 

7.3	Enforceable Agreement

 

7.4	Good Standing

 

7.5	No Conflicts

 

7.6	Financial Information

 

7.7

Lawsuits

 

7.8	Collateral

 

7.9	Permits, Franchises

 

7.10	Other Obligations

 

7.11	Tax Matters

 

7.12	No Event of Default

 

 

 

7.13

Insurance

 

7.14	ERISA Plans

 

(a)

Each Plan (other than a multiemployer plan) is in compliance in all material respects with the applicable provisions of ERISA, the Code and other federal or state law. Each Plan has received a favorable determination letter from the IRS and to the best knowledge of each Borrower, nothing has occurred which would cause the loss of such qualification. Each Borrower has fulfilled its obligations, if any, under the minimum funding standards of ERISA and the Code with respect to each Plan, and has not incurred any liability with respect to any Plan under Title IV of ERISA.

(b)	There are no claims, lawsuits or actions (including by any governmental authority), and there has been no prohibited transaction or violation of the fiduciary responsibility rules, with respect to any Plan which has resulted or could reasonably be expected to result in a material adverse effect.

(c)	With respect to any Plan subject to Title IV of ERISA:

(i)	No reportable event has occurred under Section 4043(c) of ERISA for which the PBGC requires 30-day notice.

(ii)	No action by any Borrower or any ERISA Affiliate to terminate or withdraw from any Plan has been taken and no notice of intent to terminate a Plan has been filed under Section 4041 of ERISA.

(iii)

No termination proceeding has been commenced with respect to a Plan under Section 4042 of ERISA, and no event has occurred or condition exists which might constitute grounds for the commencement of such a proceeding.

(d)	The following terms have the meanings indicated for purposes of this Agreement:

(i)	“Code” means the Internal Revenue Code of 1986, as amended from time to time.

(ii)	“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

(iii)

“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with any Borrower within the meaning of Section 414(b) or (c) of the Code.

(iv)	“PBGC” means the Pension Benefit Guaranty Corporation.

(v)	“Plan” means a pension, profit-sharing, or stock bonus plan intended to qualify under Section 401(a) of the Code, maintained or contributed to by any Borrower or any ERISA Affiliate, including any multiemployer plan within the meaning of Section 4001(a)(3) of ERISA.

7.15	Location of Borrowers

 

8.

COVENANTS

 

8.1	Use of Proceeds

 

 

 

 

(b)

The proceeds of the credit extended under this Loan Agreement may not be used directly or indirectly to purchase or carry any “margin stock” as that term is defined in Regulation U of the Board of Governors of the Federal Reserve System, or extend credit to or invest in other parties for the purpose of purchasing or carrying any such “margin stock,” or to reduce or retire any indebtedness incurred for such purpose.

 

8.2	Financial Information

 

(a)

Within 120 days of the fiscal year end, the annual financial statements of the Borrowers. These financial statements must be audited (with an opinion satisfactory to the Bank) by a Certified Public Accountant acceptable to the Bank, which includes J.H. Cohn LLP. The statements shall be prepared on a consolidated basis.

(b)	Within 50 days of the period’s end (not including the last period in each fiscal year), quarterly financial statements of the Borrowers, certified and dated by an authorized financial officer.

(c)

Promptly, upon sending or receipt, copies of any management letters and correspondence relating to management letters, sent or received by the Borrowers to or from the Borrowers’ auditor. If no management letter is prepared, the Bank may, in its discretion, request a letter from such auditor stating that no deficiencies were noted that would otherwise be addressed in a management letter.

(d)	Copies of the Form 10-K Annual Report, Form 10-Q Quarterly Report and Form 8-K Current Report within two business days of the date of filing with the Securities and Exchange Commission.

(e)	Financial projections covering a time period acceptable to the Bank and specifying the assumptions used in creating the projections. The projections shall be provided to the Bank no less often than 60 days after the end of each fiscal year.

(f)

Within 120 days of the end of each fiscal year and within 50 days of the end of each quarter, a compliance certificate of the Borrowers, signed by an authorized financial officer and setting forth (i) the information and computations (in sufficient detail) to establish that the Borrowers are in compliance with all financial covenants at the end of the period covered by the financial statements then being furnished and (ii) whether there existed as of the date of such financial statements and whether there exists as of the date of the certificate, any default under this Agreement and, if any such default exists, specifying the nature thereof and the action the Borrowers are taking and proposes to take with respect thereto.

(g)

Promptly upon the Bank’s request, such other books, records, statements, lists of property and accounts, budgets, accounts receivable agings, backlog reports, work-in-process, forecasts or reports as to the Borrowers and as to each guarantor of the Borrowers’ obligations to the Bank as the Bank may request.

8.3	Intentionally Left Blank

 

8.4	Funded Debt to Tangible Net Worth Ratio

8.5	Interest Coverage Ratio

 

 

8.6	Bank as Principal Depository

 

8.7	Other Debts

(a)	Acquiring goods, supplies, or merchandise on normal trade credit.

(b)	Endorsing negotiable instruments received in the usual course of business.

(c)	Obtaining surety bonds in the usual course of business.

(d)	Liabilities, lines of credit and leases in existence on the date of this Agreement disclosed in writing to the Bank.

(e)	Additional purchase money and lease obligations for business purposes which do not exceed a total principal amount of One Million Dollars ($1,000,000) in the aggregate for the Borrowers outstanding at any one time.

8.8	Other Liens

 

 

 

(a)	Liens and security interests in favor of the Bank.

(b)	Liens for taxes not yet due.

(c)	Liens outstanding on the date of this Agreement disclosed in writing to the Bank.

(d)	Additional purchase money security interests in assets acquired after the date of this Agreement, if the total principal amount of debts secured by such liens does not exceed Five Hundred Thousand Dollars ($500,000) in the aggregate for the Borrowers at any one time.

8.9	Maintenance of Assets

 

(a)

Not to sell, assign, lease, transfer or otherwise dispose of any part of any Borrower’s business or any Borrower’s assets except for inventory in the ordinary course of the Borrower’s business and in an aggregate amount for all of the Borrowers not exceeding Five Hundred Thousand Dollars ($500,000) in any fiscal year.

(b)	Not to sell, assign, lease, transfer or otherwise dispose of any assets for less than fair market value, or enter into any agreement to do so.

(c)	Not to enter into any sale and leaseback agreement covering any of its fixed assets.

(d)	To maintain and preserve all rights, privileges, and franchises any Borrower now has.

(e)	To make any repairs, renewals, or replacements to keep each Borrower’s properties in good working condition.

8.10	Investments

 

 

(a)	Existing investments disclosed to the Bank in writing.

(b)	Investments in each Borrower’s current subsidiaries.

(c)	Investments in any of the following:

(i)	certificates of deposit;

(ii)	U.S. treasury bills and other obligations of the federal government;

(iii)

readily marketable securities (including commercial paper, but excluding restricted stock and stock subject to the provisions of Rule 144 of the Securities and Exchange Commission).

8.11

Loans

(a)	Existing extensions of credit disclosed to the Bank in writing.

(b)	Extensions of credit to the Borrowers’ current subsidiaries or newly acquired subsidiaries which become parties to this Agreement.

(c)	Extensions of credit in the nature of accounts receivable or notes receivable arising from the sale or lease of goods or services in the ordinary course of business to non-affiliated entities.

8.12	Change of Management

 

8.13	Change of Ownership

8.14	Additional Negative Covenants

 

 

 

(a)	Enter into any consolidation, merger, or other combination, or become a partner in a partnership, a member of a joint venture, or a member of a limited liability company, except that any Borrower may merge into WPCS.

(b)	Have any subsidiary, unless such subsidiary has joined in this Agreement as an additional Borrower pursuant to Section 8.15.

(c)

Acquire or purchase a business or its assets, unless (i) such acquisition is entered into by a Borrower and for a controlling interest of the capital stock or a substantial part of the assets or business of any person or entity, (ii) the business to be acquired is in the same line of business as that of the Borrowers; (iii) the Borrower entering into such acquisition delivers to the Bank all documentation to grant the Bank a security interest in the acquired assets; (iv) if a subsidiary is created to effect such acquisition, such subsidiary joins in this Agreement as an additional Borrower pursuant to Section 8.15 and delivers to the Bank all the documentation required by Section 8.15; (v) the Borrowers deliver to the Bank the acquisition agreement satisfactory to the Bank within five (5) Business Days prior to any acquisition; (vi) the Borrowers deliver to the Bank in connection with any such acquisition, a certificate demonstrating the Borrowers’ compliance with the financial covenants under this Agreement on an historical and projected basis on updated financial projections; (vii) no default or event of default shall exist under this Agreement or would occur as a result of such acquisition; and (viii) the Borrowers shall deliver to the Bank appropriate UCC-1 financing statements, organizational documents and opinions, all in form, content and scope reasonably satisfactory to the Bank. Notwithstanding the above, if the total consideration for any single acquisition exceeds $10,000,000 the Borrowers shall obtain the prior written approval of the Bank and demonstrate to the Bank that the Borrowers will have at least $2,000,000 of availability under the Facility after giving effect to the acquisition.

(d)	Engage in any business activities substantially different from any Borrower’s present business.

(e)	Liquidate or dissolve any Borrower’s business, except as permitted by Section 8.14(a).

(f)	Voluntarily suspend its business for more than ten (10) days in any three hundred sixty-five (365) day period.

8.15	Additional Borrowers

 

8.16	Notices to Bank

 

(a)	Any lawsuit(s) over Five Hundred Thousand Dollars ($500,000) in the aggregate against the Borrowers.

(b)	Any substantial dispute between any governmental authority and any Borrower.

(c)	Any event of default under this Agreement, or any event which, with notice or lapse of time or both, would constitute an event of default.

(d)	Any material adverse change in any Borrower’s business condition (financial or otherwise), operations, properties or prospects, or ability to repay the credit.

(e)	Any change in any Borrower’s name, legal structure, place of business, or chief executive office if any Borrower has more than one place of business.

(f)	Any actual contingent liabilities of any Borrower, and any such contingent liabilities which are reasonably foreseeable, where such liabilities are in excess of Five Hundred Thousand Dollars ($500,000) in the aggregate for all of the Borrowers.

8.17

Insurance

 

(a)

General Business Insurance. To maintain insurance satisfactory to the Bank as to amount, nature and carrier covering property damage (including loss of use and occupancy) to any Borrower’s properties, business interruption insurance, public liability insurance including coverage for contractual liability, product liability and workers’ compensation, and any other insurance which is usual for any Borrower’s business. Each policy shall provide for at least thirty (30) days prior notice to the Bank of any cancellation thereof.

(b)

Insurance Covering Collateral. To maintain all risk property damage insurance policies covering the tangible property comprising the collateral. Each insurance policy must be for the full replacement cost of the collateral and include a replacement cost endorsement in an amount acceptable to the Bank. The insurance must be issued by an insurance company acceptable to the Bank and must include a lender’s loss payable endorsement in favor of the Bank in a form acceptable to the Bank.

(c)	Evidence of Insurance. Upon the request of the Bank, to deliver to the Bank a copy of each insurance policy, or, if permitted by the Bank, a certificate of insurance listing all insurance in force.

8.18	Compliance with Laws

 

8.19	ERISA Plans

 

 

 

 

8.20	ERISA Plans - Notices

 

(a)	The occurrence of any reportable event under Section 4043(c) of ERISA for which the PBGC requires 30-day notice.

(b)	Any action by any Borrower or any ERISA Affiliate to terminate or withdraw from a Plan or the filing of any notice of intent to terminate under Section 4041 of ERISA.

(c)	The commencement of any proceeding with respect to a Plan under Section 4042 of ERISA.

8.21	Books and Records

 

8.22

Audits

 

8.23	Perfection of Liens

 

8.24	Cooperation

 

9.	HAZARDOUS SUBSTANCES

9.1	Indemnity Regarding Hazardous Substances

 

9.2	Compliance Regarding Hazardous Substances

 

9.3	Notices Regarding Hazardous Substances

 

 

 

 

9.4	Site Visits, Observations and Testing

 

9.5	Definition of Hazardous Substances

 

9.6	Continuing Obligation

 

10.	DEFAULT AND REMEDIES

 

 

 

 

10.1	Failure to Pay

 

10.2	Other Bank Agreements

 

10.3	Cross-default

 

10.4	False Information

 

10.5	Bankruptcy

 

10.6

Receivers

 

10.7	Lien Priority

 

10.8

Lawsuits

 

10.9

Judgments

 

10.10

Death

 

10.11

Material Adverse Change

 

10.12

Government Action

 

 

10.13

Default under Related Documents

 

10.14

ERISA Plans.

(a)	A reportable event shall occur under Section 4043(c) of ERISA with respect to a Plan.

(b)	Any Plan termination (or commencement of proceedings to terminate a Plan) or the full or partial withdrawal from a Plan by any Borrower or any ERISA Affiliate.

10.15

Other Breach Under Agreement.

 

11.	ENFORCING THIS AGREEMENT; MISCELLANEOUS

11.1

GAAP

 

11.2	Governing Law

 

11.3	Successors and Assigns

 

11.4	Waiver of Jury Trial

 

 

 

 

11.5	Severability; Waivers

 

11.6	Attorneys’ Fees

 

11.7	Joint and Several Liability

(a)

Each Borrower agrees that it is jointly and severally liable to the Bank for the payment of all obligations arising under this Agreement, and that such liability is independent of the obligations of the other Borrower(s). Each obligation, promise, covenant, representation and warranty in this Agreement shall be deemed to have been made by, and be binding upon, each Borrower, unless this Agreement expressly provides otherwise. The Bank may bring an action against any Borrower, whether an action is brought against the other Borrower(s).

(b)	Each Borrower agrees that any release which may be given by the Bank to the other Borrower(s) or any guarantor will not release such Borrower from its obligations under this Agreement.

(c)	Each Borrower waives any right to assert against the Bank any defense, setoff, counterclaim, or claims which such Borrower may have against the other Borrower(s) or any other party liable to the Bank for the obligations of the Borrowers under this Agreement.

(d)

Each Borrower waives any defense by reason of any other Borrowers’ or any other person’s defense, disability, or release from liability. The Bank can exercise its rights against each Borrower even if any other Borrower or any other person no longer is liable because of a statute of limitations or for other reasons.

(e)

Each Borrower agrees that it is solely responsible for keeping itself informed as to the financial condition of the other Borrower(s) and of all circumstances which bear upon the risk of nonpayment. Each Borrower waives any right it may have to require the Bank to disclose to such Borrower any information which the Bank may now or hereafter acquire concerning the financial condition of the other Borrower(s).

(f)

Each Borrower waives all rights to notices of default or nonperformance by any other Borrower under this Agreement. Each Borrower further waives all rights to notices of the existence or the creation of new indebtedness by any other Borrower and all rights to any other notices to any party liable on any of the credit extended under this Agreement.

(g)

The Borrowers represent and warrant to the Bank that each will derive benefit, directly and indirectly, from the collective administration and availability of credit under this Agreement. The Borrowers agree that the Bank will not be required to inquire as to the disposition by any Borrower of funds disbursed in accordance with the terms of this Agreement.

(h)

Until all obligations of the Borrowers to the Bank under this Agreement have been paid in full and any commitments of the Bank or facilities provided by the Bank under this Agreement have been terminated, each Borrower (a) waives any right of subrogation, reimbursement, indemnification and contribution (contractual, statutory or otherwise), including without limitation, any claim or right of subrogation under the Bankruptcy Code (Title 11, United States Code) or any successor statute, which such Borrower may now or hereafter have against any other Borrower with respect to the indebtedness incurred under this Agreement; (b) waives any right to enforce any remedy which the Bank now has or may hereafter have against any other Borrower, and waives any benefit of, and any right to participate in, any security now or hereafter held by the Bank.

(i)

Each Borrower waives any right to require the Bank to proceed against any other Borrower or any other person; proceed against or exhaust any security; or pursue any other remedy. Further, each Borrower consents to the taking of, or failure to take, any action which might in any manner or to any extent vary the risks of the Borrowers under this Agreement or which, but for this provision, might operate as a discharge of the Borrowers.

11.8	Individual Liability

 

 

 

 

 

11.9	One Agreement

 

(a)	represent the sum of the understandings and agreements between the Bank and the Borrowers concerning this credit;

(b)	replace any prior oral or written agreements between the Bank and the Borrowers concerning this credit; and

(c)	are intended by the Bank and the Borrowers as the final, complete and exclusive statement of the terms agreed to by them.

 

11.10

Indemnification

 

11.11

Notices

 

11.12

Headings

 

11.13

Waiver of Immunity

 

11.14

Venue; Service of Process

 

11.15

Counterparts

 

11.16

Commitment Expiration

 

11.17

Limitation of Interest and Other Charges

 

11.18

USA Patriot Act Notice

 

11.19

Right to Setoff