EXHIBIT C-12
CREDIT AGREEMENT
CREDIT AGREEMENT
BY AND BETWEEN
PMC INTERNATIONAL, INC.
AND
THE ▇▇▇▇▇▇▇ COMPANIES, INC.
DATED AS OF NOVEMBER 3, 1998
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of November 3, 1998 (the "Agreement"), is
by and between PMC INTERNATIONAL, INC. (the "Borrower") and THE ▇▇▇▇▇▇▇
COMPANIES, INC. (the "Lender").
R E C I T A L S
WHEREAS, Borrower has requested that the Lender provide a total of up to
$3,500,000 in revolving credit loans for the purposes hereinafter set forth; and
WHEREAS, the Lender has agreed to make the requested loans available to
Borrower on the terms and conditions hereinafter set forth.
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
CREDIT FACILITY
1.1 Credit Facility. From time to time prior to March 31, 1999 or the
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earlier termination in full of the Lender's obligation to make Loans hereunder
(in either case, the "Termination Date"), and subject to all of the terms,
conditions and limitations hereof, the Lender agrees to make revolving credit
loans (each a "Loan" and collectively, the "Loans")in an aggregate principal
amount not to exceed THREE MILLION FIVE HUNDRED THOUSAND AND 00/100 DOLLARS
($3,500,000) (the "Maximum Amount"). Within such Maximum Amount, Loans may be
repaid and reborrowed in accordance with the provisions of this Agreement. All
Loans hereunder shall be evidenced by the Note. Although the Note shall be
expressed to be payable in the full Maximum Amount, Borrower shall be obligated
to pay only the amounts actually disbursed hereunder, together with accrued
interest on the outstanding balance at the rates and on and the dates specified
herein and such other fees and charges provided for herein.
1.2 Interest Rate. (a) Except as otherwise provided herein, the unpaid
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balance of the Note will bear interest from and including the date of
disbursement until paid in full (both before and after judgment) at a variable
rate equal to the prime rate as published in the Wall Street Journal (Midwest
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Edition) and the rate of interest thereunder shall change with each change in
such variable rate. Borrower promises to pay interest accrued on the unpaid
principal balance of the Note in like money and funds on the Termination Date.
(b) While any Event of Default has occurred and is continuing, Borrower
will, upon demand of the Lender, pay interest during the continuance of the
Event of Default at a per annum rate equal to two percentage points in excess of
the rate of interest specified above on the unpaid balance of the Note.
(c) Interest will be computed on the basis of actual days elapsed and a
year of 360 days.
1.3 Procedure for Borrowing. (a) Borrower will request a Loan hereunder
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by written notice delivered in person, by United States mail, by reputable
overnight courier or by facsimile transmission, which notices will be
irrevocable, to the Lender not later than 12:00 p.m., Milwaukee time, on the
proposed Borrowing Date. Each such request will be effective upon receipt by
the Lender and will specify (i) the amount of the requested Loan and (ii) the
proposed Borrowing Date. Upon its receipt of such notice from Borrower, the
Lender will make a Loan to Borrower in such amount and on such Borrowing Date as
are specified in the borrowing notice.
(b) Loans may be prepaid at the option of Borrower in whole or in part at
any time without premium or penalty. Each prepayment of a Loan shall be in a
minimum amount of $50,000 and in integral multiples of $50,000 above such
minimum. All prepayments of a Loan shall be accompanied by interest accrued on
the amount prepaid through the date of prepayment.
(c) Borrower shall have the right, upon five (5) days' prior written
notice to the Lender, to reduce in part the Loan; provided, however, that each
partial reduction of the Loan shall be in the amount of $500,000 or an integral
multiple thereof. Subject to the limitations of the preceding sentence, the
entire Loan may be terminated by Borrower in whole at any time upon five (5)
days' prior written notice to the Lender.
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ARTICLE II
GENERAL PROVISIONS
2.1 Use of Proceeds. Borrower shall use the proceeds of the Loans to
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retire indebtedness owed to Dundee Bancorp Inc. ("Dundee") arising under that
certain Loan Agreement dated as of July 7, 1998 (the "Dundee Loan Agreement")
and may use the remaining proceeds of the Loans solely for: (i) working capital,
payment of aged payables and other general corporate purposes; (ii) to
compensate investment managers of Borrower and its Subsidiaries; (iii) to make
earnout payments to former shareholders of PMCIS pursuant to the terms of
certain acquisition documents dated on or about September 24, 1997; (iv) to pay
reasonable fees and costs of legal counsel of Borrower; or (v) to pay reasonable
outstanding investment banking fees of Borrower.
2.2 Payment Procedures. All payments of principal, interest, and fees
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hereunder shall be made in immediately available funds to the Lender at the
Lender's address specified pursuant to Section 9.7 hereof by 12:00 p.m.,
Milwaukee, Wisconsin time on the date when due.
2.3 Record keeping. The Lender shall record in its records the date and
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amount of each Loan and each repayment of such Loan. The aggregate amounts so
recorded shall be rebuttable presumptive evidence of the principal and interest
owing and unpaid on the Note. The failure to so record any such amount or any
error in so recording any such amount shall not, however, limit or otherwise
affect the obligations of Borrower under this Agreement or under the Note to
repay the principal amount of the Note together with all interest accruing
thereon.
2.4 Application of Payments. (a) Except as provided herein to the
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contrary, all payments of principal, interest and fees under this Agreement and
the Note shall be made to the Lender for the account of the Lender and the
holder of the Note then outstanding, as appropriate, in respect of amounts then
due hereunder, and any portion of the Note so paid shall not be considered
outstanding for any purpose after the date of such payment.
(b) All payments received by the Lender under this Agreement shall be
applied first, to the payment in full of all fees, costs and expenses under this
Agreement and the other Credit Documents to be delivered by Borrower and the
Subsidiaries to the Lender pursuant to this Agreement; second, to payments of
interest required under this Agreement; and third, to payments of the principal
amounts required under this Agreement.
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ARTICLE III
CONDITIONS
3.1 Deliveries at Closing. This Agreement shall become effective on the
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date that the Lender shall have received each of the following:
(a) the Note, executed by Borrower and dated the Closing Date;
(b) the Guarantees, executed by PMC, PMCIS and PTS, dated the Closing
Date;
(c) the Security Agreements, executed by Borrower, PMC, PMCIS and PTS,
dated the Closing Date, together with UCC financing statements;
(d) a certificate, signed by a duly authorized officer of Borrower and
PMC, PMCIS and PTS, dated the Closing Date, as to: (i) the incumbency and
signature of the officers of Borrower or the Subsidiary, as the case may be, who
have signed or will sign this Agreement and the other Credit Documents to which
it is a party; (ii) the adoption and continued effect of resolutions of Borrower
or the Subsidiary, as the case may be, authorizing the execution, delivery and
performance of this Agreement and the other Credit Documents to which it is a
party; and (iii) the accuracy and completeness of attached copies of the
articles or certificate of incorporation and bylaws of Borrower or the
Subsidiary, as the case may be, as amended to date;
(e) a certificate, signed by a duly authorized officer of Borrower,
stating that on the Closing Date, after giving effect to all amounts outstanding
hereunder: (i) no Default or Event of Default has occurred and is continuing;
and (ii) the representations and warranties contained in this Agreement are true
and correct as of such Closing Date;
(f) a certificate of the Colorado Secretary of State of recent date as
to the existence and good standing of Borrower, Portfolio Management
Consultants, inc. and Portfolio Technology Services, Inc.;
(g) a certificate of the Delaware Secretary of State of recent date as
to the existence and good standing of PMC Investment Services, Inc.;
(h) an opinion letter from Holme ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel to
Borrower and the Subsidiaries, in substantially the form of Exhibit D attached
to this Agreement; and
(i) such additional supporting documents and materials as Lender may
reasonably request on or before the Closing Date.
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3.2 Deliveries Following Closing. Within five (5) calendar days of the
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Closing Date, Borrower shall deliver insurance certificates from Borrower, PMC,
PMCIS and PTS' insurance brokers in form and substance satisfactory to Lender as
to all insurance covering the Collateral and naming the Lender and, if
appropriate, Dundee as an additional insured and lender loss payee thereunder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Borrower hereby represents and warrants to the Lender that, except as set
forth on the applicable schedules hereto:
4.1 Organization and Qualification. Each of Borrower and the Subsidiaries
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is a corporation duly and validly organized and existing under the Laws of its
jurisdiction of incorporation and has all requisite authority to conduct its
business in each jurisdiction in which its business is conducted, other than in
those jurisdictions where the failure to have such authority would not
reasonably be expected to have a Material Adverse Effect.
4.2 Financial Statements. All of the financial statements of Borrower and
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the Subsidiaries heretofore furnished to the Lender by Borrower are accurate and
complete and fairly present in all material respects the financial condition and
the results of operations of Borrower and the Subsidiaries for the periods
covered thereby and as of the relevant dates thereof, all in accordance with
generally accepted accounting principles applied on a consistent basis, subject
in the case of interim financial statements to audit and year-end adjustments.
There has been no material adverse change in the business, properties or
condition (financial or otherwise) of Borrower or any Subsidiary since the date
of the latest of such financial statements not previously disclosed in writing
to the Lender (including in any schedules to that certain Agreement and Plan of
Merger of even date herewith by and between the Borrower and the Lender (the
"Merger Agreement")). Borrower has no knowledge of any material liabilities of
any nature of Borrower or any Subsidiary not previously disclosed in writing to
the Lender (including in any schedules to the Merger Agreement).
4.3 Authorization; Enforceability. The making, execution, delivery and
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performance of this Agreement and the other Credit Documents to which it is a
party by Borrower, PMC, PTS and PMCIS have been duly authorized by all necessary
corporate action of Borrower and such Subsidiary. This Agreement and the other
Credit Documents to which it is a party are the valid and binding obligations of
Borrower, PMC, PTS and PMCIS, enforceable against them in accordance with their
respective terms, except to the
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extent that the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to creditors'
rights generally or by general principles of equity, including (without
limitation) concepts of materiality, reasonableness, good faith and fair dealing
(regardless of whether considered in a proceeding in equity or at law).
4.4 Absence of Conflicting Obligations. The making of the Note, and the
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execution, delivery and performance of this Agreement and the other Credit
Documents to which it is a party by Borrower, PMC, PTS and PMCIS do not violate
any presently existing provision of Law or the articles or certificate of
incorporation or bylaws of Borrower or any such Subsidiary, as the case may be,
or any agreement to which Borrower or any such Subsidiary is a party or by which
Borrower or any such Subsidiary or any of their assets is bound except for the
Dundee Loan Agreement, with respect to which a waiver from Dundee will be
obtained in connection with the transactions contemplated by this Agreement, and
except for any such violations that would not reasonably be expected to have a
Material Adverse Effect.
4.5 Taxes. Borrower and each Subsidiary has filed all federal, state,
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foreign and local tax returns which were required to be filed (subject to any
valid extensions of the time for filing), and has paid, or made provision for
the payment of, all taxes owed by it, and no tax deficiencies have been assessed
or, to Borrower's knowledge, proposed against Borrower or any Subsidiary.
4.6 Absence of Litigation. Except as set forth on Schedule 4.6, neither
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Borrower nor any Subsidiary is a party to, and so far as is known to Borrower
there is no threat of, any litigation or administrative proceeding which would,
if adversely determined, have a Material Adverse Effect.
4.7 Accuracy of Information. All information, certificates or statements
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by Borrower or any Subsidiary given in, or pursuant to, this Agreement (whether
in writing, by electronic messaging or otherwise) shall be accurate, true and
complete when given in all material respects.
4.8 Title to Property. Except as set forth on Schedule 4.8, Borrower and
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each Subsidiary has good title to, or a valid leasehold interest in, or a valid
license to use, all assets and properties necessary to conduct its respective
business as now conducted, and there are no Liens on any of the assets or
properties of Borrower or any Subsidiary other than Permitted Liens. Borrower
and each Subsidiary has all licenses, permits, franchises, patents, copyrights,
trademarks and trade names, or rights thereto, reasonably necessary to conduct
its respective business as now conducted, and neither Borrower nor any
Subsidiary
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knows of any conflict with or violation of any valid rights of others with
respect thereto.
4.9 ERISA. Borrower does not have any knowledge that any Plan is in
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noncompliance with the applicable provisions of ERISA or the Internal Revenue
Code. Except as set forth on Schedule 4.9, Borrower does not have any knowledge
of any pending or threatened litigation or governmental proceeding or
investigation against or relating to any Plan, nor any knowledge of any
reasonable basis for any proceedings, claims or actions against or relating to
any Plan. Borrower does not have any knowledge that it has incurred any
"accumulated funding deficiency" within the meaning of Section 302(a)(2) of
ERISA in connection with any Plan. Borrower does not have any knowledge that
there has been any Reportable Event or Prohibited Transaction (as such terms are
defined in ERISA) with respect to any Plan, or that Borrower has incurred any
liability to the PBGC under Section 4062 of ERISA in connection with any Plan.
Notwithstanding any provision to the contrary contained in this Section 4.9,
Borrower shall not be deemed to be in default hereunder solely by reason of
Borrower's failure to be in compliance with the warranties contained in this
Section 4.9 so long as the sum of (i) the cost of complying with the warranties
contained in this Section 4.9 plus (ii) all fines, penalties, fees and other
costs resulting from such noncompliance would not reasonably be expected to have
a Material Adverse Effect.
4.10 Compliance With Laws. Except as set forth on Schedule 4.10, Borrower
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and each Subsidiary is in compliance with all Laws to which Borrower or such
Subsidiaries are subject, other than such noncompliance as would not reasonably
be expected to have a Material Adverse Effect.
4.11 Regulation U. No part of the proceeds of the Loans will be used,
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directly or indirectly, for the purpose of purchasing or carrying any margin
stock 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.
4.12 Subsidiaries. Borrower has no Subsidiaries, other than Portfolio
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Management Consultants, Inc., Portfolio Technology Services, Inc., Portfolio
Brokerage Services, Inc. and PMC Investment Services, Inc.
4.13 Full Disclosure. No information, exhibit or report furnished by
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Borrower or any Subsidiary to the Lender in connection with the negotiation or
execution of this Agreement contained any material misstatement of fact as of
the date when made or omitted to state a material fact or any fact necessary to
make the statements contained therein not misleading as of the date when made.
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4.14 Absence of Default. Except as disclosed on Schedule 4.14 hereto,
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neither Borrower nor any Subsidiary is in default under any note, loan
agreement, indenture, lease, mortgage, security agreement or other contractual
obligation binding upon such party, other than for such defaults as would not
reasonably be expected to have a Material Adverse Effect.
ARTICLE V
NEGATIVE COVENANTS
From and after the date of this Agreement and until the entire amount of
principal of and interest due on the Loans, and all other fees and payments due
under this Agreement and the other Credit Documents are paid in full, Borrower
shall not, and shall not suffer, cause or permit any Subsidiary to, without the
prior written consent of the Lender:
5.1 Liens. Incur, create, assume or permit to be created or allow to
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exist any Lien upon or in any of its assets or properties, except Permitted
Liens.
5.2 Indebtedness. Incur, create, assume, permit to exist, guarantee,
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endorse or otherwise become directly or indirectly or contingently responsible
or liable for any Indebtedness, except Permitted Indebtedness.
5.3 Consolidation or Merger. Except in a transaction with an Affiliate of
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the Lender, consolidate with or merge into any other Person, or permit another
Person to merge into Borrower or any Subsidiary, or acquire substantially all of
the assets of any other Person, whether in one or a series of transactions.
5.4 Disposition of Assets. Sell, lease, assign, transfer or otherwise
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dispose of all or substantially all of Borrower or any Subsidiary's now owned or
hereafter acquired assets or properties, other than (i) sales of inventory in
the ordinary course of business and (ii) dispositions of assets in an aggregate
amount not to exceed $50,000 (provided that the foregoing limitation shall not
apply if Borrower or the Subsidiary, as the case may be, has entered into a
binding agreement to purchase replacement assets having equal or greater value
for delivery not later than sixty (60) days after the date of such sale, lease
or disposition).
5.5 Sale and Leaseback. Enter into any agreement, directly or indirectly,
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to sell or transfer any real or personal property used in Borrower or a
Subsidiary's business and thereafter to lease back the same or similar property.
5.6 Investments. Make any Investment in or to other Persons, except
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Permitted Investments.
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5.7 Restricted Payments. Other than with respect to the repurchase of
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outstanding warrants of Borrower (up to aggregate amount of $10,000):
(a) Declare or pay any dividends or distributions; or
(b) purchase, redeem, or otherwise acquire for value Borrower or any
Subsidiary's capital stock now or hereafter outstanding; or
(c) make any distribution of assets to Borrower or any Subsidiary's
shareholders, whether in cash, assets or in obligations of Borrower or such
Subsidiary; or
(d) allocate or otherwise set apart any sum for payment of any
dividend or distribution on, or for the purchase or redemption of, any shares of
Borrower or any Subsidiary's capital stock.
5.8 Transactions with Affiliates. Engage in any transaction with an
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Affiliate on terms materially less favorable to Borrower or a Subsidiary, as the
case may be, than would be available at the time from a Person who is not an
Affiliate.
5.9 Loans and Advances. Make any loan or advance to any Person, except
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(i) extensions of credit in the ordinary course of business by Borrower and its
Subsidiaries to its customers; (ii) advances to officers and employees of
Borrower and its Subsidiaries for travel and other expenses in the ordinary
course of business; and (iii) intercompany loans between Borrower and any
Subsidiary; provided, however, that in no event whatsoever shall Borrower or any
Subsidiary make any loans or advances to Portfolio Brokerage Services, Inc. in
an amount representing a net increase greater than $150,000 over the amount
stated on the Borrower's financial statements dated September 30, 1998, without
the written permission of an officer of the Lender.
5.10 Guarantees. Guarantee the Indebtedness of any Person, except for: (i)
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the Guarantees, (ii) the endorsement of instruments for deposit or collection in
the ordinary course of business and (iii) guaranties made pursuant to the Dundee
Loan Agreement.
5.11 Subsidiaries. Form any Subsidiary, other than Portfolio Management
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Consultants, Inc., Portfolio Technology Services, Inc., PMC Investment Services,
Inc., and Portfolio Brokerage Services, Inc.
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ARTICLE VI
AFFIRMATIVE COVENANTS
From and after the date of this Agreement and until the entire amount of
principal of and interest due on the Loans, and all other fees and payments due
under this Agreement and the other Credit Documents are paid in full:
6.1 Payment. Borrower shall timely pay or cause to be paid the principal
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of and interest on the Loans and all other amounts due under this Agreement and
Borrower, PMC, PTS and PMCIS shall timely pay all amounts due under the other
Credit Documents to which it is a party.
6.2 Corporate Existence; Properties; Insurance. Borrower and each
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Subsidiary shall: (a) maintain its existence; (b) conduct its business
substantially as now conducted; (c) maintain all assets (other than assets no
longer used or useful in the conduct of its business) in good repair, working
order and condition, ordinary wear and tear excepted; (d) maintain accurate
records and books of account in accordance with generally accepted principles of
accounting consistently applied throughout all accounting periods; and (e)
maintain insurance of such nature and in such amounts as is customarily
maintained by companies engaged in the same or similar business and as otherwise
required by Section 3.1(h) hereof.
6.3 Licenses. Borrower and each Subsidiary shall maintain in good
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standing and in full force and effect each license, permit and franchise granted
or issued by any federal, state or local governmental agency or regulatory
authority that is reasonably necessary to Borrower or such Subsidiary's
business.
6.4 Reporting Requirements. Borrower shall furnish to Lender such
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information respecting the business, assets and financial condition of Borrower
and its Subsidiaries as the Lender may reasonably request and, without request:
(a) Promptly upon the furnishing thereof to the shareholders of
Borrower, copies of all financial statements, reports and proxy statements so
furnished;
(b) Promptly upon filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular reports which
Borrower or any Subsidiary files with the Securities and Exchange Commission;
and
(c) Such other information as the Lender may from time to time
reasonably request.
6.5 Taxes. Borrower and each Subsidiary shall pay all taxes and
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assessments prior to the date on which penalties attach thereto, except for any
tax or assessment which is either not
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delinquent or which is being contested in good faith and by proper proceedings
and against which adequate reserves have been provided.
6.6 Inspection of Properties and Records. Subject to the terms of that
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certain confidentiality agreement between Borrower and Lender, Borrower, PMC,
PTS and PMCIS shall permit the Lender or its agents or representatives to
inspect any of the properties, books and financial records of Borrower and such
Subsidiary, to examine and make copies of the books of accounts and other
financial records of Borrower, and to discuss the affairs, finances and accounts
of Borrower and such Subsidiary with, and to be advised as to the same by,
Borrower's representatives at such reasonable times and intervals as the Lender
may designate.
6.7 Reference in Financial Statements. Borrower shall include, or cause
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to be included, a general reference to this Agreement in all financial
statements of Borrower which are furnished to financial reporting services,
creditors and prospective creditors.
6.8 Compliance with Laws. Except as disclosed on Schedule 6.8, Borrower
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and each Subsidiary shall: (a) comply with all applicable Environmental Laws and
orders of regulatory and administrative authorities with respect thereto; and
(b) comply with all other Laws applicable to Borrower and its Subsidiaries or
any of their respective assets or operations, in each case, other than for such
noncompliance as would not reasonably be expected to have a Material Adverse
Effect.
6.9 Compliance with Agreements. Except as disclosed on Schedule 6.9,
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Borrower, PMC, PTS and PMCIS shall perform and comply in all respects with the
provisions of any agreement (including without limitation any collective
bargaining agreement), license, regulatory approval, permit and franchise
binding upon Borrower, such Subsidiary, or any of its assets or properties,
other than for such nonperformance or noncompliance as would not reasonably be
expected to have a Material Adverse Effect.
6.10 Notices. Borrower shall:
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(a) as soon as possible and in any event within five (5) Business Days
after becoming aware of the occurrence of any Default or Event of Default,
notify the Lender in writing of such Default or Event of Default and set forth
the details thereof and the action which is being taken or proposed to be taken
by Borrower with respect thereto;
(b) promptly notify the Lender of the commencement of any litigation
or administrative proceeding that would cause the representation and warranty of
Borrower contained in Section 4.6 of this Agreement to be untrue;
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(c) promptly notify the Lender (i) of the occurrence of any Reportable
Event or Prohibited Transaction (as such terms are defined in ERISA) that has
occurred with respect to any Plan, and (ii) of the institution by the PBGC or
Borrower of proceedings under Title IV of ERISA to terminate any Plan;
(d) promptly notify the Lender, and provide copies, immediately upon
receipt, of any notice, pleading, citation, indictment, complaint, order or
decree from any federal, state or local government agency or regulatory body, or
any other source, asserting or alleging a circumstance or condition that
requires or may require a financial contribution by Borrower or any Subsidiary
under Environmental Laws or an investigation, clean-up, removal, remedial action
or other response by or on the part of Borrower or any Subsidiary under
Environmental Laws or which seeks damages or civil, criminal or punitive
penalties from or against Borrower or any Subsidiary for an alleged violation of
Environmental Laws;
(e) notify the Lender at least thirty (30) days prior to any change of
Borrower or any Subsidiary's name or its respective principal business address;
and
(f) promptly notify the Lender of the commencement of any
investigation, litigation, or administrative or regulatory proceeding by, or the
receipt of any notice, citation, pleading, order, decree or similar document
issued by, any federal, state or local governmental agency or regulatory
authority that results in, or may result in, the termination or suspension of
any license, permit or franchise reasonably necessary to Borrower or any
Subsidiary's business, or that imposes, or may result in the imposition of, a
fine or penalty in excess of $100,000 in the aggregate.
ARTICLE VII
REMEDIES
7.1 Acceleration.
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(a) Upon the occurrence of an Automatic Event of Default, then,
without notice or action of any kind by the Lender, the Lender's obligation to
make any Loans hereunder shall immediately terminate and the entire disbursed
unpaid principal of, and accrued interest on, the Note, and any other amount due
under this Agreement and all other Credit Documents to which it is a party by
Borrower or a Subsidiary, as the case may be, pursuant to or in connection
herewith or therewith shall be automatically and immediately due and payable.
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(b) Upon the occurrence of a Notice Event of Default the Lender's
obligation to make any Loans hereunder shall immediately terminate and the
Lender, upon written notice and demand to Borrower, may declare the entire
disbursed unpaid principal of, and accrued interest on, the Note, and any other
amount due under this Agreement, and all other Credit Documents to which it is a
party by Borrower or a Subsidiary, as the case may be, pursuant to or in
connection herewith or therewith immediately due and payable.
7.2 Remedies Not Exclusive. No remedy herein conferred upon the Lender is
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intended to be exclusive of any other remedy and each and every such remedy
shall be cumulative and shall be in addition to every other remedy given under
this Agreement or any Credit Documents to which it is a party by Borrower or a
Subsidiary, as the case may be, pursuant to or in connection herewith or
therewith, or now or hereafter existing at law or in equity. No failure or
delay on the part of the Lender in exercising any right or remedy shall operate
as a waiver thereof nor shall any single or partial exercise of any right
preclude other or further exercise thereof or the exercise of any other right or
remedy.
7.3 Setoff. Borrower agrees that the Lender shall have all rights of
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setoff provided by applicable Law, and in addition thereto, Borrower agrees that
if at any time any payment or other amount owing by Borrower or any Subsidiary
under this Agreement or any other Credit Document to which it is a party is then
due to the Lender, the Lender may apply to the payment of such payment or other
amount any and all balances, credits, deposits, accounts or moneys of Borrower
or any Subsidiary then or thereafter with the Lender.
ARTICLE VIII
DEFINITIONS
When used in this Agreement, the following terms shall have the meanings
specified:
8.1 Affiliate shall mean any Person: (a) that directly or indirectly
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controls, or is controlled by, or is under common control with Borrower; (b)
that directly or indirectly beneficially owns or holds ten percent (10%) or more
of any class of voting stock of Borrower; (c) ten percent (10%) or more of the
voting stock of which Person is directly or indirectly beneficially owned or
held by Borrower; (d) that is an officer or director of Borrower; (e) of which
an Affiliate is an officer or director; or (f) who is related by blood, adoption
or marriage to an Affiliate. The term "control" means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
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8.2 Agreement shall mean this Credit Agreement, together with the Exhibits
---------
and Schedules attached hereto, as the same may be amended from time to time in
accordance with the terms hereof.
8.3 Automatic Event of Default shall mean any one or more of the
--------------------------
following:
(a) Borrower or any Subsidiary shall make a general assignment for the
benefit of creditors or to an agent authorized to liquidate all or substantially
all of its assets; or
(b) Borrower or any Subsidiary shall become the subject of an "order
for relief" within the meaning of the United States Bankruptcy Code, or shall
file a petition in bankruptcy, for reorganization or to effect a plan or other
arrangement with creditors; or
(c) Borrower or any Subsidiary shall have a petition or application
filed against it in bankruptcy or any similar proceeding, or shall have such a
proceeding commenced against it, and such petition, application or proceeding
shall remain undismissed for a period of sixty (60) days or more, or Borrower or
any Subsidiary shall file an answer to such a petition or application, admitting
the material allegations thereof; or
(d) Borrower or any Subsidiary (i) shall apply to a court for the
appointment of a receiver or custodian for any substantial portion of its assets
or properties, or (ii) shall have a receiver or custodian appointed for any
substantial portion of its assets or properties, with or without consent, and
such receiver shall not be discharged within sixty (60) days after his
appointment; or
(e) Borrower or any Subsidiary shall adopt a plan of dissolution or
liquidation of all or substantially all of its assets; or
(f) An "Event of Default" (as that term is defined in the Dundee Loan
Agreement) shall have occurred under or in respect of the Dundee Loan Agreement
(after giving effect to grace or cure periods, if any, provided under such
Agreement).
8.4 Borrower shall mean PMC International, Inc.
--------
8.5 Borrowing Date shall mean each date on which a Loan is made to
--------------
Borrower.
8.6 Business Day shall mean any day other than a Saturday, Sunday, public
------------
holiday or other day when commercial banks in Wisconsin are authorized or
required by Law to close.
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8.7 Closing shall mean the consummation of the transactions contemplated
-------
by this Agreement.
8.8 Closing Date shall mean November 3, 1998.
------------
8.9 Collateral shall have the meaning specified in each of the Security
----------
Agreements.
8.10 Credit Documents shall mean this Agreement, the Note, the Guarantees,
----------------
the Security Agreements, and all other related agreements and documents issued
or delivered hereunder or thereunder or pursuant hereto or thereto.
8.11 Default shall mean any event which would constitute an Event of
-------
Default but for the requirement that notice be given or time elapse or both.
8.11A Dundee shall have the meaning set forth in Section 2.1.
------
8.11B Dundee Loan Agreement shall have the meaning specified in Section 2.1
---------------------
8.12 Environmental Laws shall mean all Laws, judgments, decrees, permits,
------------------
licenses, agreements and other governmental restrictions, now or at any time
hereafter in effect, relating to (a) the emission, discharge or release of
pollutants, petroleum or petroleum products, chemicals or industrial, toxic or
hazardous substances, materials or wastes into the environment, or (b) the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, petroleum or petroleum products, chemicals
or industrial, toxic or hazardous substances or wastes, or (c) the
investigation, clean-up or remediation thereof. These Environmental Laws shall
include but not be limited to the Federal Solid Waste Disposal Act, the Federal
Clean Air Act, the Federal Clean Water Act, the Federal Resource Conservation
and Recovery Act of 1976, the Federal Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Federal Superfund Amendments and
Reauthorization Act of 1986, regulations of the Environmental Protection Agency,
regulations of the Nuclear Regulatory Agency, regulations of any state
department of natural resources or state environmental protection agency now or
at any time hereafter in effect and local health department ordinances.
8.13 ERISA shall mean the Employee Retirement Income Security Act of 1974,
-----
as amended and as in effect from time to time.
8.14 Event of Default shall mean any Automatic Event of Default or any
----------------
Notice Event of Default.
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8.14A Guarantees shall mean those certain Unlimited Guarantees executed by
----------
each of PMC, PTS and PMCIS in the form of Exhibit A attached hereto, as the same
may be amended from time to time.
8.15 Indebtedness shall mean all liabilities or obligations of Borrower or
------------
any Subsidiary, whether primary or secondary or absolute or contingent: (a) for
borrowed money or for the deferred purchase price of property or services
(excluding trade obligations and accrued expenses, in each case incurred in the
ordinary course of business, which are not the result of any borrowing); (b) as
lessee under leases that have been or should be capitalized according to
generally accepted accounting principles; (c) evidenced by notes, bonds,
debentures or similar obligations; or (d) secured by any Liens on assets of
Borrower or any Subsidiary, whether or not the obligations secured have been
assumed by Borrower or such Subsidiary.
8.16 [Reserved].
8.17 Investment shall mean: (a) any transfer or delivery of cash, stock or
----------
other property or value by such Person in exchange for Indebtedness, stock or
any other security of another Person; (b) any loan, advance or capital
contribution to or in any other Person; (c) any guaranty, creation or assumption
of any liability or obligation of any other Person; and (d) any investment in
any fixed property or fixed assets other than fixed properties and fixed assets
acquired and used in the ordinary course of the business of that Person.
8.18 Law shall mean any federal, state, local or other law, rule,
---
regulation or governmental requirement of any kind, and the rules, regulations,
written interpretations and orders promulgated thereunder.
8.19 Lender shall mean The ▇▇▇▇▇▇▇ Companies, Inc.
------
8.20 Lien shall mean, with respect to any asset: (a) any mortgage, pledge,
----
lien, charge, security interest or encumbrance of any kind in respect of such
asset; or (b) the interest of a vendor or lessor under any conditional sale
agreement, financing lease or other title retention agreement relating to such
asset.
8.21 Loans shall have the meaning specified in Section 1.1.
-----
8.22 Material Adverse Effect shall mean a material adverse effect on (a)
-----------------------
the business, operations, property or condition (financial or otherwise) of
Borrower and its Subsidiaries taken as a whole, (b) the ability of Borrower or
any Subsidiary to perform its obligations, when such obligations are required to
be performed, under this Agreement or any of the other Credit Documents to which
it is a party or (c) the validity or
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enforceability of the obligations of Borrower and any Subsidiary under this
Agreement or any of the other Credit Documents or the rights or remedies of the
Lender hereunder or thereunder.
8.23 Maximum Amount shall have the meaning specified in Section 1.1.
--------------
8.24 [Reserved].
8.25 Obligations shall mean, without duplication, all of the obligations of
-----------
Borrower to the Lender (including the obligations to pay the principal amount of
or interest on the Loans and to pay certain expenses and the obligations arising
in connection with various indemnities) whenever arising, under this Agreement
or any of the Credit Documents.
8.26 Note shall mean that certain promissory note from Borrower payable to
----
the order of the Lender in the form of Exhibit B attached to this Agreement.
8.27 Notice Event of Default shall mean any one or more of the following:
-----------------------
(a) Borrower or any Subsidiary shall fail to pay when due any
installment of the disbursed principal of, or interest on, the Note or any
expense or other amount due under this Agreement or any other Credit Document to
which it is a party; or
(b) there shall be a default in the performance or observance of any
of the covenants and agreements contained in Article V or Section 6.2(a) of this
Agreement; or
(c) there shall be a default in the performance or observance of any
of the other covenants, agreements or conditions contained in this Agreement or
any other Credit Document, and such default shall have continued for a period of
ten (10) Business Days after written notice from the Lender to Borrower
specifying such default and requiring it to be remedied; or
(d) any representation or warranty made by Borrower or any Subsidiary
in this Agreement or in any other Credit Document to which it is a party or
financial statement delivered pursuant to or in connection with this Agreement
shall prove to have been false in any material respect as of the time when made
or given; or
(e) any final judgment shall be entered against Borrower or any
Subsidiary which, when aggregated with other final judgments against Borrower
and its Subsidiaries, exceeds $100,000 in the aggregate, and shall remain
outstanding and unsatisfied, unbonded or unstayed after thirty (30) days from
the date of entry thereof; provided that no final judgment shall be included in
the calculation under this subsection to the extent that the claim
-17-
underlying such judgment is covered by insurance and the defense of such claim
has been tendered to and accepted by the insurer without reservation; or
(f) (i) any Reportable Event (as defined in ERISA) shall have occurred
which constitutes grounds for the termination of any Plan by the PBGC or for the
appointment of a trustee to administer any Plan, or any Plan shall be terminated
within the meaning of Title IV of ERISA, or a trustee shall be appointed by the
appropriate court to administer any Plan, or the PBGC shall institute
proceedings to terminate any Plan or to appoint a trustee to administer any
Plan, or Borrower or any trade or business which together with Borrower would be
treated as a single employer under Section 4001 of ERISA shall withdraw in whole
or in part from a multiemployer Plan, and (ii) the aggregate amount of
Borrower's liabilities for all such occurrences, whether to a Plan, the PBGC or
otherwise, is reasonably likely to have a Material Adverse Effect, and such
liability is not covered for the benefit of Borrower by insurance.
8.28 PBGC shall mean Pension Benefit Guaranty Corporation or any entity
----
succeeding to any or all of its functions under ERISA.
8.29 Permitted Indebtedness shall mean: (a) Indebtedness of Borrower or
----------------------
any Subsidiary to the Lender; (b) unsecured accounts payable and other unsecured
obligations (including aged payables) of Borrower or a Subsidiary incurred in
the ordinary course of business of Borrower or such Subsidiary and not as a
result of any borrowing; (c) Indebtedness arising out of the lease or purchase
of goods constituting equipment and either unsecured or secured only by a
purchase money security interest securing such purchase money indebtedness in an
amount which does not exceed $100,000 at any time outstanding in the aggregate
for Borrower and its Subsidiaries; (d) Indebtedness outstanding as of the
Closing Date, and shown on the financial statements referred to in Section 4.2
hereof, provided that such Indebtedness shall not be renewed, extended or
increased; and (e) other Indebtedness of Borrower and its Subsidiaries which
does not exceed $150,000 in the aggregate at any time outstanding.
8.30 Permitted Investments shall mean:
---------------------
(a) Investments in prime commercial paper, rated either P-1 by ▇▇▇▇▇'▇
Investors Service or A-1 by Standard & Poor's Corporation, maturing within
thirty (30) days of the date of acquisition, certificates of deposit, overnight
bank deposits and bankers acceptances (each with a maturity of one year or
less), or in commercial bank accounts of any commercial bank having capital and
surplus in excess of $100,000,000;
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(b) Investments in obligations of a governmental body, rated "A" or
better, or fully guaranteed or insured by the United States or any agency
thereof, in each case maturing within one year of the date of acquisition;
(c) endorsement of instruments for deposit or collection in the
ordinary course of business; and
(d) subject to the restrictions set forth in Section 5.9, intercompany
loans and advances.
8.31 Permitted Liens shall mean:
---------------
(a) Liens in favor of the Lender; and
(b) Liens for taxes, assessments, or governmental charges, or levies
that are not yet due and payable or that are being contested in good faith by
appropriate proceedings and for which adequate reserves have been established;
and
(c) easements, restrictions, minor title irregularities and similar
matters which have no Material Adverse Effect as a practical matter upon the
ownership and use of the affected property; and
(d) Liens or deposits in connection with workers' compensation,
unemployment insurance, social security, ERISA or similar legislation or to
secure customs' duties, public or statutory obligations in lieu of surety, stay
or appeal bonds, or to secure performance of contracts or bids (other than
contracts for the payment of borrowed money) or deposits required by law as a
condition to the transaction of business or other liens or deposits of a like
nature made in the ordinary course of business; and
(e) A purchase money security interest securing Indebtedness permitted
to be outstanding or incurred under Section 8.29(c); and
(f) Liens incurred in connection with Permitted Indebtedness, provided
that no such Lien shall be amended to cover any additional property after the
Closing Date and the amount of Indebtedness secured thereby shall not be
increased; and
(g) attachment or judgment Liens, where the attachment or judgment
which gave rise to such Liens does not constitute an Event of Default hereunder;
and
(h) landlords' or warehousemen's Liens arising by operation of law;
and
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(i) lessors' interests under capitalized leases; and
(j) liens in favor of Citywide Bank/Aurora National Bank pursuant to a
promissory note and security agreement.
8.32 Person shall mean and include an individual, partnership, corporation,
------
trust, unincorporated association and any unit, department or agency of
government.
8.33 Plan shall mean each pension, profit sharing, stock bonus, thrift,
----
savings and employee stock ownership plan established or maintained, or to which
contributions have been made, by Borrower or any Subsidiary or any trade or
business which together with Borrower would be treated as a single employer
under Section 4001 of ERISA.
8.34 Security Agreements shall mean those certain General Business Security
-------------------
Agreements executed by Borrower, PMC, PMCIS and PTS in favor of the Lender as of
the Closing Date, in the form of Exhibit C attached to this Agreement, as the
same may be amended from time to time.
8.35 Subsidiary shall mean: (i) on the Closing Date, Portfolio Management
----------
Consultants, Inc. ("PMC"), Portfolio Technology Services, Inc. ("PTS"), PMC
Investment Services, Inc. ("PMCIS") and Portfolio Brokerage Services, Inc. and
(ii) any corporation, more than fifty percent (50%) of the outstanding stock of
which (of any class or classes, however designated, having ordinary voting power
for the election of at least a majority of the members of the board of directors
of such corporation, other than stock having such power only by reason of the
happening of a contingency) is owned by Borrower.
8.36 Termination Date shall have the meaning specified in Section 1.1.
----------------
ARTICLE IX
MISCELLANEOUS
9.1 Expenses and Attorneys' Fees. Borrower shall pay all reasonable fees
----------------------------
and expenses incurred by the Lender, including the reasonable fees of counsel,
in connection with the preparation, issuance, maintenance and amendment of this
Agreement and all other Credit Documents to be executed, delivered and performed
by Borrower or any Subsidiary pursuant to or in connection herewith or
therewith, and the consummation of the transactions contemplated herein or
therein, and the administration, protection and enforcement of the Lender's
rights under this Agreement and all other Credit Documents to be executed,
delivered and performed by Borrower or any Subsidiary pursuant to or in
connection herewith or therewith, including without limitation the protection
and
-20-
enforcement of such rights in any bankruptcy, reorganization or insolvency
proceeding involving Borrower or any Subsidiary and any and all proceedings
after the entry of judgment hereon. Borrower further agrees to pay on demand all
reasonable audit fees and accountants' fees incurred by the Lender in connection
with the maintenance and enforcement of this Agreement and all other Credit
Documents to be executed, delivered and performed by Borrower or any Subsidiary
pursuant to or in connection herewith or therewith.
9.2 Assignability; Successors. The respective rights, liabilities and
-------------------------
obligations of Borrower under this Agreement are not assignable or delegable, in
whole or in part, without the prior written consent of the Lender. The Lender
agrees that it shall not assign its respective rights, liabilities and
obligations to any party that is not an Affiliate of the Lender without
Borrower's prior written consent, which consent shall not be unreasonably
withheld. The provisions of this Agreement shall inure to the benefit of and be
binding upon the permitted successors and assigns of the parties.
9.3 Survival. All covenants, agreements, representations and warranties
--------
made in this Agreement or in any document delivered pursuant to this Agreement
shall survive the execution and delivery of this Agreement, the issuance of the
Note, the delivery of any such document and the repayment of the Loans pursuant
to the terms of this Agreement.
9.4 Governing Law. This Agreement and the other Credit Documents issued
-------------
pursuant to or in connection herewith or therewith shall be governed by, and
construed and interpreted in accordance with, the internal Laws of the State of
Wisconsin without giving effect to its conflicts of law provisions.
9.5 Counterparts; Headings. This Agreement may be executed in several
----------------------
counterparts, each of which shall be deemed an original, but such counterparts
shall together constitute but one and the same agreement. The article and
section headings in this Agreement are inserted for convenience of reference
only and shall not constitute a part of this Agreement.
9.6 Entire Agreement. This Agreement and the other Credit Documents
----------------
referred to herein and therein contain the entire understanding of the parties
with respect to the subject matter hereof. There are no restrictions, promises,
warranties, covenants or undertakings other than those expressly set forth in
this Agreement. This Agreement supersedes all prior negotiations, agreements
and undertakings between the parties with respect to such subject matter.
9.7 Notices. All communications or notices required or permitted by this
-------
Agreement shall be in writing and shall be deemed
-21-
to have been given (a) upon delivery if hand delivered, or (b) upon deposit in
the United States mail, postage prepaid, or with a nationally recognized
overnight commercial carrier, airbill prepaid, or (c) upon transmission if by
facsimile, provided that such transmission is promptly confirmed by hand
delivery, mail or as otherwise expressly provided herein, and each such
communication or notice shall be addressed as follows, unless and until any
party notifies the other in accordance with this Section of a change of address:
If to Borrower: PMC International, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
If to Lender: The ▇▇▇▇▇▇▇ Companies, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
9.8 Amendment. No amendment of this Agreement shall be effective unless
---------
in writing and signed by Borrower and the Lender.
9.9 Taxes. If any transfer or documentary taxes, assessments or charges
-----
levied by any governmental authority shall be payable by reason of the
execution, delivery or recording of this Agreement or any other Credit Document
issued or delivered pursuant hereto or thereto, Borrower shall pay all such
taxes, assessments and charges, including interest and penalties, and hereby
indemnifies the Lender against any liability therefor.
9.10 Accounting Terms. All accounting terms used in this Agreement shall
----------------
be construed in accordance with generally accepted accounting principles
consistent with those used in the preparation of the financial statements
referred to in Section 4.2 hereof.
9.11 Severability. Any provision of this Agreement which is prohibited or
------------
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Agreement in such jurisdiction or affecting the
validity or enforceability of any provision in any other jurisdiction.
9.12 Indemnification. In consideration of the execution and delivery of
---------------
this Agreement by the Lender and the agreement to extend the credit provided
hereunder, Borrower hereby agrees to indemnify, exonerate and hold the Lender
and each of the officers, directors, employees, agents and attorneys of the
Lender (collectively, the "Lender Parties") free and harmless from and against
any and all actions, causes of action, suits, losses, liabilities, damages and
expenses, including without limitation,
-22-
reasonable attorneys' fees and disbursements (collectively, the "Indemnified
Liabilities"), incurred by the Lender Parties or any of them as a result of, or
arising out of, or relating to (a) the execution, delivery, performance,
enforcement or administration of this Agreement or any other Credit Document
executed or delivered in connection with this Agreement, or (b) the non-
compliance by Borrower or any Subsidiary or by any property of Borrower or any
Subsidiary with Environmental Laws or Borrower or a Subsidiary's liabilities
under such Laws. To the extent that the foregoing undertaking may be
unenforceable for any reason, Borrower hereby agrees to make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable Law. All indemnities set forth
in this Agreement shall survive the execution and delivery of this Agreement and
the Note and the repayment of the Loans.
9.13 Cross Collateral. All of the Collateral shall serve as collateral
----------------
for all of the Obligations under this Agreement and all other Credit Documents
executed in connection herewith and therewith, and Borrower hereby grants a
security interest in the Collateral to the Lender, to the extent of Borrower's
interest in the Collateral, to secure all such Obligations.
9.14 Waiver of Jury Trial. THE LENDER AND BORROWER HEREBY KNOWINGLY,
--------------------
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH, THIS AGREEMENT, THE NOTE, THE SECURITY AGREEMENTS, OR ANY OTHER
CREDIT DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN), OR ACTIONS OF THE LENDER OR BORROWER. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER ENTERING INTO THIS AGREEMENT.
9.15 Conversion. At the option of the Lender, the Note (for the then
----------
outstanding principal and, if desired by Lender, the then outstanding interest,
in part or in whole, at the time of conversion or such lesser amount as selected
by the Lender in a written notice to the Borrower) may be converted, in whole or
in part, without expense to Lender, into Borrower's Common Stock, par value
$.01, ("Common Stock"). The conversion price shall be $.60 for each share of
Common Stock, subject to adjustment as set forth below ("Conversion Price").
The Borrower hereby agrees that at all times the number of shares of Common
Stock that will be delivered upon conversion shall be reserved for exercise. No
fractional shares shall be issued upon conversion.
The Lender, by virtue hereof, shall not be entitled to any rights of a
stockholder in the Borrower, until the Note is converted in whole or in part.
-23-
In case the Borrower shall effect a stock dividend, stock split or reverse
stock split of the outstanding shares of Common Stock or Preferred Stock, the
Conversion Price shall be proportionately decreased in the case of a stock
dividend or stock split or increased in the case of a reverse stock split (on
the date that such transaction shall become effective) by multiplying the
Conversion Price in effect immediately prior to the stock dividend or stock
split by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately prior to such stock dividend or stock split, and
the denominator of which is the number of shares of Common Stock outstanding
immediately after such stock dividend or stock split.
In case of any consolidation or merger of the Borrower with or into another
corporation (other than a merger with a subsidiary, in which merger the Borrower
is the continuing corporation) or in the case of any sale or conveyance to
another corporation of the property of the Borrower as an entirety or
substantially as an entirety, the Borrower shall cause effective provision to be
made so that the Note holder shall have the right thereafter, by exercising this
Note, to purchase the kind and amount of shares of stock and other securities
and property receivable upon such consolidation, merger, sale or conveyance as
may be issued or payable with respect to or in exchange for the number of shares
of the common stock of the Borrower theretofore purchasable upon the exercise of
the Note had such consolidation, merger, sale or conveyance not taken place.
The foregoing provision shall similarly apply to successive consolidations,
mergers, sales or conveyances.
Notwithstanding anything to the contrary, the Borrower shall not be
required to give effect to any adjustment in the Conversion Price unless and
until the net effect of one or more adjustments, determined as above provided,
shall have required a change of the Conversion Price by at least one cent, but
when the cumulative net effect of more than one adjustment so determined shall
be to change the actual Conversion Price by at least one cent, such change in
the Conversion Price thereupon be given effect.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Credit Agreement
as of the day and year first above written.
PMC INTERNATIONAL, INC.
By: /s/ ▇.▇. ▇▇▇▇▇▇
------------------------------
Title: CEO
---------------------------
THE ▇▇▇▇▇▇▇ COMPANIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------
Title: CFO
---------------------------
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