EXHIBIT 10.21
SCHEDULE I
Exceptions (if any) to Representations
None.
[PNCBANK LOGO]
AMENDED AND RESTATED
COMMITTED LINE OF CREDIT NOTE
$2,000,000 November 16, 2001
FOR VALUE RECEIVED, ESCALON MEDICAL CORP, (the "Borrower"), with an address at
351 E. Conestoga Road, Wayne, Pennsylvania 19087, jointly and severally promise
to pay to the order of PNC BANK, NATIONAL ASSOCIATION (the "Bank"), in lawful
money of the United States of America in immediately available funds at its
offices located at 1600 Market Street, Philadelphia, Pennsylvania 19103, or at
such other location as the Bank may designate from time to time, the principal
sum of TWO MILLION DOLLARS ($2,000,000) (the "Facility") or such lesser amount
as may be advanced to or for the benefit of the Borrower hereunder, together
with interest accruing on the outstanding principal balance from the date
hereof, as provided below:
1. RATE OF INTEREST. Amounts outstanding under this Note will
bear interest as set forth in the Letter Agreement referred to
in Section 6 hereof.
2. ADVANCE PROCEDURES. A request for advance made by telephone
must be promptly confirmed in writing by such method as the
Bank may require. The Borrower authorizes the Bank to accept
telephonic requests for advances, and the Bank shall be
entitled to rely upon the authority of the Chief Executive
Officer, the Senior Vice President of Finance and the
Corporate Controller of the Borrower in providing such
instructions. The Borrower hereby indemnifies and holds the
Bank harmless from and against any and all damages, losses,
liabilities, costs and expenses (including reasonable
attorneys' fees and expenses) which may arise or be created by
the acceptance of such telephone requests or making such
advances. The Bank will enter on its books and records, which
entry when made will be
Escalon Medical Corp.
November 16, 2001
Page 2
presumed correct, the date and amount of each advance, as well
as the date and amount of each payment made by the Borrower.
3. PAYMENT TERMS. Accrued interest will be due and payable on the
first day of each month, beginning with the payment due on the
first day of the month following the date hereof. The
outstanding principal balance and any accrued but unpaid
interest shall be due and payable on the Expiration Date (as
defined in the Letter Agreement).
If any payment under this Note shall become due on a Saturday, Sunday or public
holiday under the laws of the State where the Bank's office indicated above is
located, such payment shall be made on the next succeeding business day and such
extension of time shall be included in computing interest in connection with
such payment. The Borrower hereby authorizes the Bank to charge the Borrower's
deposit account at the Bank for any payment when due hereunder. Payments
received will be applied to charges, fees and expenses (including attorneys'
fees), accrued interest and principal in any order the Bank may choose, in its
sole discretion.
4. LATE PAYMENTS; DEFAULT RATE. If the Borrower fails to make any
payment of principal, interest or other amount coming due
pursuant to the provisions of this Note within 15 calendar
days of the date due and payable, the Borrower also shall pay
to the Bank a late charge equal to the lesser of five percent
(5%) of the amount of such payment or $100. Such 15 day period
shall not be construed in any way to extend the due date of
any such payment. The late charge is imposed for the purpose
of defraying the Bank's expenses incident to the handling of
delinquent payments and is in addition to, and not in lieu of,
the exercise by the Bank of any rights and remedies hereunder,
under the other Loan Documents or under applicable laws, and
any fees and expenses of any agents or attorneys which the
Bank may employ. Upon maturity, whether by acceleration,
demand or otherwise, and at the option of the Bank upon the
occurrence of any Event of Default (as hereinafter defined)
and during the continuance thereof, this Note shall bear
interest at a rate per annum (based on a year of 360 days and
actual days elapsed) which shall be four (4) percentage points
in excess of the interest rate in effect from time to time
under this Note but not more than the maximum rate allowed by
law (the "Default Rate"). The Default Rate shall continue to
apply whether or not judgment shall be entered on this Note.
5. PREPAYMENT. The indebtedness evidenced by this Note may be
prepaid in whole or in part at any time without penalty.
6. OTHER LOAN DOCUMENTS. This Note is issued in connection with a
Letter Agreement (as amended,
Escalon Medical Corp.
November 16, 2001
Page 3
supplemented or otherwise modified from time to time, the
"Letter Agreement") of even date between Bank, Borrower and
the subsidiaries of Borrower party thereto and related
documents, the terms of which (together with the terms of the
Guaranty and Suretyship Agreements previously executed by the
subsidiaries of the Borrower) are incorporated herein by
reference (the "Loan Documents"), and is secured by the
property described in the Loan Documents (if any) and by such
other collateral as previously may have been or may in the
future be granted to the Bank to secure this Note.
7. EVENTS OF DEFAULT. The occurrence of any of the following
events will be deemed to be an "Event of Default" under this
note: (i) the nonpayment of any principal, interest or other
indebtedness under this Note when due; (ii) the occurrence of
any event of default or default and the lapse of any notice or
cure period under any Loan Document or any other debt,
liability or obligation to the Bank of any Obligor; (iii) the
filing by or against any Obligor of any proceeding in
bankruptcy, receivership, insolvency, reorganization,
liquidation, conservatorship or similar proceeding (and, in
the case of any such proceeding instituted against any
Obligor, such proceeding is not dismissed or stayed within
ninety (90) days of the commencement thereof, provided that
the Bank shall not be obligated to advance additional funds
during such period); (iv) any assignment by any Obligor for
the benefit of creditors, or any levy, garnishment, attachment
or similar proceeding is instituted against any property of
any Obligor held by or deposited with the Bank; (v) a default
with respect to any other indebtedness of one or more Obligors
for borrowed money aggregating $100,000 or more, if the effect
of such default is to cause or permit the acceleration of such
debt; (vi) the commencement of any foreclosure or forfeiture
proceeding, execution or attachment against any collateral
securing the obligations of any Obligor to the Bank; (vii) the
entry of a final judgment against any Obligor and the failure
of such Obligor to discharge the judgment within thirty (30)
days of the entry thereof; (viii) [INTENTIONALLY OMITTED];
(ix) in the opinion of the Bank, any material adverse change
in the financial condition of the Obligors taken as a whole;
(x) the Borrower or any other material Obligor ceases doing
business as a going concern; (xi) the revocation or attempted
revocation, in whole or in part, of any guarantee by any
Guarantor; (xii) the death or legal incompetency of any
individual Obligor or, if any Obligor is a partnership, the
death or legal
Escalon Medical Corp.
November 16, 2001
Page 4
incompetency of any individual general partner; (xiii) any
representation or warranty made by any Obligor to the Bank in
any Loan Document, or any other documents now or in the future
securing the obligations of any Obligor to the Bank, is false,
erroneous or misleading in any material respect; or (xiv) the
failure of any Obligor to observe or perform any covenant or
other agreement with the Bank contained in any Loan Document
or any other documents now or in the future securing the
obligations of any Obligor to the Bank which is not cured
within fifteen days after the earlier of any Obligor's
knowledge thereof and an Obligor's receipt of written notice
thereof from the Bank. As used herein, the term "Obligor"
means any Borrower and any Guarantor, and the term "GUARANTOR"
means any guarantor of the obligations of the Borrower to the
Bank existing on the date of this Note or arising in the
future.
Upon the occurrence of an Event of Default: (a) the Bank shall be under no
further obligation to make advances hereunder; (b) if an Event of Default
specified in clause (iii) or (iv) above shall occur, the outstanding principal
balance and accrued interest hereunder together with any additional amounts
payable hereunder shall be immediately due and payable without demand or notice
of any kind; (c) if any other Event of Default shall occur, the outstanding
principal balance and accrued interest hereunder together with any additional
amounts payable hereunder, at the option of the Bank and without demand or
notice of any kind, may be accelerated and become immediately due and payable;
(d) at the option of the Bank, this Note will bear interest at the Default Rate
from the date of the occurrence of the Event of Default; and (e) the Bank may
exercise from time to time any of the rights and remedies available to the Bank
under the Loan Documents or under applicable law.
8. POWER TO CONFESS JUDGMENT. THE BORROWER HEREBY EMPOWERS ANY
ATTORNEY OF ANY COURT OF RECORD, AFTER THE OCCURRENCE OF ANY
EVENT OF DEFAULT HEREUNDER, TO APPEAR FOR THE BORROWER AND,
WITH OR WITHOUT COMPLAINT FILED, CONFESS JUDGMENT, OR A SERIES
OF JUDGMENTS, AGAINST THE BORROWER IN FAVOR OF THE BANK OR ANY
HOLDER HEREOF FOR THE ENTIRE PRINCIPAL BALANCE OF THIS NOTE,
ALL ACCRUED INTEREST AND ALL OTHER AMOUNTS DUE HEREUNDER,
TOGETHER WITH COSTS OF SUIT AND AN ATTORNEY'S COMMISSION OF
THE GREATER OF TEN PERCENT (10%) OF SUCH PRINCIPAL AND
INTEREST OR $1,000 ADDED AS A REASONABLE ATTORNEY'S FEE, AND
FOR DOING SO THIS NOTE OR A COPY VERIFIED BY AFFIDAVIT SHALL
BE A SUFFICIENT WARRANT THE BORROWER HEREBY FOREVER WAIVES AND
RELEASES ALL RIGHTS OF APPEAL AND ALL RELIEF FROM ANY AND ALL
APPRAISEMENT, STAY OR EXEMPTION LAWS OF ANY STATE NOW IN FORCE
OR HEREAFTER ENACTED. INTEREST ON ANY SUCH JUDGMENT SHALL
ACCRUE AT THE DEFAULT RATE.
Escalon Medical Corp.
November 16, 2001
Page 5
NO SINGLE EXERCISE OF THE FOREGOING POWER TO CONFESS JUDGMENT, OR A SERIES OF
JUDGMENTS, SHALL BE DEEMED TO EXHAUST THE POWER, WHETHER OR NOT ANY SUCH
EXERCISE SHALL BE HELD BY ANY COURT TO BE INVALID, VOIDABLE, OR VOID, BUT THE
POWER SHALL CONTINUE UNDIMINISHED AND IT MAY BE EXERCISED FROM TIME TO TIME AS
OFTEN AS THE BANK SHALL ELECT UNTIL SUCH TIME AS THE BANK SHALL HAVE RECEIVED
PAYMENT IN FULL OF THE DEBT, INTEREST AND COSTS.
9. RIGHT OF SETOFF. In addition to all liens upon and rights of
setoff against the money, securities or other property of the
Borrower given to the Bank by law, the Bank shall have, with
respect to the Borrower's obligations to the Bank under this
Note and to the extent permitted by law, a contractual
possessory security interest in and a contractual right of
setoff against, and the Borrower hereby assigns, conveys,
delivers, pledges and transfers to the Bank all of the
Borrower's right, title and interest in and to, all deposits,
moneys, securities and other property of the Borrower now or
hereafter in the possession of or on deposit with, or in
transit to, the Bank whether held in a general or special
account or deposit, whether held jointly with someone else, or
whether held for safekeeping or otherwise, excluding, however,
all IRA, Keogh, and trust accounts. Every such security
interest and right of setoff may be exercised without demand
upon or notice to the Borrower. Every such right of setoff
shall be deemed to have been exercised immediately upon the
occurrence of an Event of Default hereunder without any action
of the Bank, although the Bank may enter such setoff on its
books and records at a later time.
10. MISCELLANEOUS. No delay or omission of the Bank to exercise
any right or power arising hereunder shall impair any such
right or power or be considered to be a waiver of any such
right or power, nor shall the Bank's action or inaction impair
any such right or power. The Borrower agrees to pay on demand,
to the extent permitted by law, all costs and expenses
incurred by the Bank in the enforcement of its rights in this
Note and in any security therefor, including without
limitation reasonable fees and expenses of the Bank's counsel.
If any provision of this Note is found to be invalid by a
court, all the other provisions of this Note will remain in
full force and effect. The Borrower and all other makers and
endorsers of this Note hereby forever waive presentment,
protest, notice of dishonor and notice of nonpayment.
Borrower also waives all defenses based on suretyship or impairment of
collateral. If this Note is executed by more than one Borrower, the obligations
of such persons or
Escalon Medical Corp.
November 16, 2001
Page 6
entities hereunder will be joint and several. This Note shall bind the Borrower
and its heirs, executors, administrators, successors and assigns, and the
benefits hereof shall inure to the benefit of the Bank and its successors and
assigns.
This Note has been delivered to and accepted by the Bank and will be deemed to
be made in the State where the Bank's office indicated above is located. THIS
NOTE WILL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE BANK AND THE
BORROWER DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE WHERE THE BANK'S
OFFICE INDICATED ABOVE IS LOCATED, EXCLUDING ITS CONFLICT OF LAWS RULES. The
Borrower hereby irrevocably consents to the exclusive jurisdiction of any state
or federal court for the county or judicial district where the Bank's office
indicated above is located, and consents that all service of process be sent by
nationally recognized overnight courier service directed to the Borrower at the
Borrower's address set forth herein and service so made will be deemed to be
completed on the business day after deposit with such courier; provided that
nothing contained in this Note will prevent the Bank from bringing any action,
enforcing any award or judgment or exercising any rights against the Borrower
individually, against any security or against any property of the Borrower
within any other county, state or other foreign or domestic jurisdiction. The
Borrower acknowledges and agrees that the venue provided above is the most
convenient forum for both the Bank and the Borrower. The Borrower waives any
objection to venue and any objection based on a more convenient forum in any
action instituted under this Note.
11. WAIVER OF JURY TRIAL. THE BORROWER IRREVOCABLY WAIVES ANY AND
ALL RIGHTS THE BORROWER MAY HAVE TO A TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS
NOTE, ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS NOTE OR
ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS. THE
BORROWER ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING AND
VOLUNTARY.
THE BORROWER ACKNOWLEDGES THAT IT HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE CONFESSION OF JUDGMENT AND WAIVER OF JURY TRIAL, AND
HAS BEEN ADVISED BY COUNSEL AS NECESSARY OR APPROPRIATE. THE OBLIGATIONS UNDER
THIS NOTE ARE JOINT AND SEVERAL.
Escalon Medical Corp.
November 16, 2001
Page 7
WITNESS the due execution hereof as a document under seal, as of the date first
written above, with the intent to be legally bound hereby.
ESCALON MEDICAL CORP.
Attest: /s/ By: /s/
------------------------------ ----------------------------------
Print Name: H.M. Rimmer Print Name: Richard J. DePiano
-------------------------- --------------------------
Title: SVP Finance Title: Chairman & CEO
------------------------------- -------------------------------