Document:

exhibit10_49.htm

 

  

Exhibit 10.49

[FM Services Company Letterhead]

June 11, 2008

Ms. Nancy Parmelee

Dear Nancy:

In February 2004, I sent you a letter (the “2004 letter”) describing an “Extra Pension Benefit” that Freeport McMoRan Copper & Gold, Inc. (“the Company”) has agreed to pay you.

The Extra Pension Benefit, plus the benefit you actually receive under the FMS Employee Retirement Plan (the “Retirement Plan”), will amount to about the same total benefit as the benefit you would have received under the Retirement Plan if you had been treated as a “grandfathered employee” under that plan.

The 2004 Letter states that the Extra Pension Benefit is paid at your retirement or when you separate from service with the Company and that the Extra Pension Benefit is paid in the same form as your benefit under the Retirement Plan.  The Internal Revenue Code has been changed in a way that prevents us from continuing to link benefits in that way.  In order to comply with new Code Section 409A we have adopted the following new payment rules.

You are now able to elect to receive your Extra Pension Benefit in any form that is allowed under the Retirement Plan, even if you elect to receive your Retirement Plan benefit in a different form.  Also, your Extra Pension Benefit will be paid as of a date you select, which could be different from the date the Retirement Plan benefit is paid.  During a transition period ending December 31, 2008, you can elect the time and form of payment of your Extra Pension Benefit.  The Extra Pension Benefit can be paid no sooner than the earlier of your retirement from the Company or July 1, 2009.  (It can not be paid this year or before July 1 of next year.)

  Your elections are made by completing the attached Payment Election Form and delivering it to me no later than December 31, 2008.   Consider your decision carefully.  Most changes made after the transition period (i.e., after December 31, 2008) can be made only if you comply with the onerous “five-year rule” explained on page 4 of the Payment Election Form.

Coincidentally, in connection with the termination of the Retirement Plan you are receiving forms on which you can elect to have your Retirement Plan benefit paid as an immediate annuity or lump sum benefit, or transferred to a Deferred Annuity.  That election will have no effect on the payment of your Extra Pension Benefit.

In order for you to better understand how much your Extra Pension Benefit will be, depending on the year of payment and whether paid as an annuity or a lump sum, we have fixed the amounts payable, as shown on the attached Table of Benefits.

  

  

  

The Table of Benefits illustrates only the life-only annuity.  On the Benefit Election Form you may elect any of the forms of annuity that are available under the Retirement Plan.  If you wish to receive a calculation of a different form of annuity, please let me know.

The Extra Pension Benefit will be paid by the Company, out of its assets.  Unlike the Retirement Plan, there is no advance funding of the Extra Pension Benefit.  Therefore, the Extra Pension Benefit could be lost if the Company were to become insolvent.

The rules governing the payment of the Extra Pension Benefit are now set forth entirely in this letter, as supplemented by your election on the attached Benefit Election Form, and by the attached Table of Benefits.  The 2004 letter will not apply.  The Company reserves the right to make further changes.

Sincerely yours,

/s/ Pamela Q. Masson

Pamela Q. Masson

Director – HR & Corp. Admin.mpr8k201001bbhex10.htm

    Exhibit (10)(bg)

    Execution
Version

    
 

     

     

     

     

     

      
        	 

      

       

    

     

    FINANCING
AGREEMENT

     

    By and
Among

     

    PERKASIE
BOROUGH INDUSTRIAL DEVELOPMENT AUTHORITY

     

    And

     

    MET-PRO
CORPORATION

     

    And

     

    BROWN
BROTHERS HARRIMAN & CO.

     

    Dated
December 30, 2005

     

     

     

    Relating
to

     

    $4,000,000

    Perkasie
Borough Industrial Development Authority

    Economic
Development Revenue Bond

    (Met-Pro
Corporation Project)

    Series
2005

     

    
      	 

    

     

     

     

     

     

     

    
 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        TABLE
OF CONTENTS

      

    

     

     

    
      	  ARTICLE
      1.         DEFINITIONS	
              3

            
	 	
              SECTION
      1.1

            	
              Definitions.

            	
              8

            
	 	
              SECTION
      1.2

            	
              Rules of
      Construction.

            	
              9

            
	  ARTICLE
      2.         ISSUER
      REPRESENTATIONS	
              9

            
	 	
              SECTION
      2.1

            	
              Organization;
      Authority To Issue Bond.

            	
              9

            
	 	
              SECTION
      2.2

            	
              Authorization for
      Financing.

            	
              9

            
	 	
              SECTION
      2.3

            	
              Resolution.

            	
              9

            
	 	
              SECTION
      2.4

            	
              The
      Bond.

            	
              9

            
	 	
              SECTION
      2.5

            	
              No
      Conflict or Violation.

            	
              9

            
	 	
              SECTION
      2.6

            	
              Litigation.

            	
              10

            
	 	
              SECTION
      2.7

            	
              No
      Repeal.

            	
              10

            
	 	
              SECTION
      2.8

            	
              Limitations on the
      Representation and Warranties of the Issuer.

            	
              10

            
	  ARTICLE
      3.         BORROWER
      REPRESENTATIONS	
              11

            
	 	
              SECTION
      3.1

            	
              Organization and
      Existence.

            	
              11

            
	 	
              SECTION
      3.2

            	
              Consents.

            	
              11

            
	 	
              SECTION
      3.3

            	
              No
      Conflict or Violation.

            	
              11

            
	 	
              SECTION
      3.4

            	
              Litigation or
      Proceedings.

            	
              11

            
	 	
              SECTION
      3.5

            	
              Legal and
      Binding Obligation.

            	
              11

            
	 	
              SECTION
      3.6

            	
              ERISA.

            	
              11

            
	 	
              SECTION
      3.7

            	
              Indebtedness.

            	
              12

            
	 	
              SECTION
      3.8

            	
              Contingent
      Liabilities.

            	
              12

            
	 	
              SECTION
      3.9

            	
              Investment Company
      Act.

            	
              12

            
	 	
              SECTION
      3.10

            	
              Federal
      Reserve Regulations.

            	
              12

            
	 	
              SECTION
      3.11

            	
              Payment
      of Taxes.

            	
              12

            
	 	
              SECTION
      3.12

            	
              No
      Default.

            	
              12

            
	 	
              SECTION
      3.13

            	
              SEC
      Reports.

            	
              12

            
	 	
              SECTION
      3.14

            	
              Title;
      Encumbrances.

            	
              13

            
	 	
              SECTION
      3.15

            	
              Tax
      Status of Bond.

            	
              13

            
	 	
              SECTION
      3.16

            	
              Environmental
      Laws.

            	
              13

            
	 	
              SECTION
      3.17

            	
              No False
      Statements.

            	
              13

            
	ARTICLE
      4.           BANK
      REPRESENTATIONS	
              14

            
	 	
              SECTION
      4.1

            	
              Independent
      Investigation.

            	
              14

            
	 	
              SECTION
      4.2

            	
              Purchase
      for Own Account.

            	
              14

            
	ARTICLE
      5.           THE
      BOND	
              15

            
	 	
              SECTION
      5.1

            	
              Form;
      Amount and Terms.

            	
              15

            
	 	
              SECTION
      5.2

            	
              Payment
      and Dating of the Bond.

            	
              15

            
	 	
              SECTION
      5.3

            	
              Execution.

            	
              15

            
	ARTICLE
      6.           REDEMPTION
      OF BOND BEFORE MATURITY	
              16

            
	 	
              SECTION
      6.1

            	
              Redemption of the
      Bond.

            	
              16

            
	ARTICLE
      7.          ISSUE OF
      BOND	
              18

            
	 	
              SECTION
      7.1

            	
              Sale and
      Purchase of the Bond; Loan of Proceeds; Application of
      Proceeds.

            	
              18

            
	 	
              SECTION
      7.2

            	
              Delivery
      of the Bond.

            	
              18

            
	 	
              SECTION
      7.3

            	
              Disposition of
      Proceeds of the Bond.

            	
              19

            
	ARTICLE
      8.           LOAN
      PAYMENTS AND ADDITIONAL SUMS	
              20

            
	 	SECTION
8.1	Loan
    Payments.	
              20

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        TABLE
OF CONTENTS

      

    

     

     

    
      	 	
              SECTION
      8.2

            	
              Payment
      of Fees, Charges and Expenses.

            	
              20

            
	 	
              SECTION
      8.3

            	
              Maintenance of Loan
      Account.

            	
              21

            
	 	
              SECTION
      8.4

            	
              Repayment.

            	
              21

            
	 	
              SECTION
      8.5

            	
              No
      Abatement or Setoff.

            	
              21

            
	ARTICLE 9. 
              
<Reserved>	
              23

            
	ARTICLE 10. 
             COVENANTS AND AGREEMENTS OF
      ISSUER	
              24

            
	 	
              SECTION
      10.1

            	
              Payment
      of the Bond.

            	
              24

            
	 	
              SECTION
      10.2

            	
              Bond Not
      to Become Taxable.

            	
              24

            
	 	
              SECTION
      10.3

            	
              Performance of
      Covenants.

            	
              24

            
	 	
              SECTION
      10.4

            	
              Priority
      of Pledge.

            	
              24

            
	 	
              SECTION
      10.5

            	
              Rights
      Under Agreement.

            	
              24

            
	 	
              SECTION
      10.6

            	
              Assignment to Bank;
      Security Agreement.

            	
              24

            
	 	
              SECTION
      10.7

            	
              Instruments of
      Further Assurance.

            	
              25

            
	 	
              SECTION
      10.8

            	
              Continued
      Existence, etc.

            	
              25

            
	 	
              SECTION
      10.9

            	
              General
      Compliance with All Duties.

            	
              25

            
	 	
              SECTION
      10.10

            	
              Arbitrage
      Bond Covenant.

            	
              25

            
	 	
              SECTION
      10.11

            	
              Enforcement of
      Duties and Obligations of the Borrower.

            	
              25

            
	 	
              SECTION
      10.12

            	
              Inspection of
      Books.

            	
              25

            
	 	
              SECTION
      10.13

            	
              Filing
      and Recording.

            	
              26

            
	ARTICLE 11.
              COVENANTS OF THE
    BORROWER	
              27

            
	 	
              SECTION
      11.1

            	
              Maintenance and
      Operation of Project Facilities.

            	
              27

            
	 	
              SECTION
      11.2

            	
              Completion of
      Project.

            	
              27

            
	 	
              SECTION
      11.3

            	
              Bond Not
      to Become Taxable.

            	
              27

            
	 	
              SECTION
      11.4

            	
              Deficiencies in
      Revenues.

            	
              27

            
	 	
              SECTION
      11.5

            	
              Books and
      Records; Financial Statements and Other Information.

            	
              27

            
	 	
              SECTION
      11.6

            	
              Compliance with
      Applicable Laws.

            	
              29

            
	 	
              SECTION
      11.7

            	
              ERISA.

            	
              30

            
	 	
              SECTION
      11.8

            	
              Corporate
      Existence.

            	
              30

            
	 	
              SECTION
      11.9

            	
              Inspection.

            	
              30

            
	 	
              SECTION
      11.10

            	
              Additional
      Information.

            	
              30

            
	 	
              SECTION
      11.11

            	
              Payment
      of Taxes and Impositions.

            	
              30

            
	 	
              SECTION
      11.12

            	
              Insurance.

            	
              31

            
	 	
              SECTION
      11.13

            	
              Further
      Assurances; Financing Statements.

            	
              31

            
	 	
              SECTION
      11.14

            	
              Use of
      Project.

            	
              32

            
	 	
              SECTION
      11.15

            	
              Additional Negative
      Covenants.

            	
              32

            
	 	
              SECTION
      11.16

            	
              Financial
      Covenants.

            	
              33

            
	 	
              SECTION
      11.17

            	
              Federal
      Reserve Regulations.

            	
              33

            
	 	
              SECTION
      11.18

            	
              Nondiscrimination
      Clause.

            	
              33

            
	 	
              SECTION
      11.19

            	
              Security
      Documents.

            	
              34

            
	ARTICLE 12. 
             LIMITED OBLIGATION	
              35

            
	 	
              SECTION
      12.1

            	
              Source of
      Payment of the Bond.

            	
              35

            
	ARTICLE
      13.         EVENTS OF DEFAULT AND
      REMEDIES	
              36

            
	 	
              SECTION
      13.1

            	
              Events of
      Default.

            	
              36

            
	 	
              SECTION
      13.2

            	
              Acceleration.

            	
              37

            
	 	
              SECTION
      13.3

            	
              Legal
      Proceedings by Bank.

            	
              37

            
	 	
              SECTION
      13.4

            	
              Application of
      Moneys.

            	
              38

            
	 	
              SECTION
      13.5

            	
              Termination of
      Proceedings.

            	
              38

            

       

      
        
        

        
          
            

          

        

        
          TABLE
OF CONTENTS

        

      

       

       

      	 	
              SECTION
      13.6

            	
              Waivers
      of Events of Default; Rescission of Declaration of
    Maturity.

            	
              38

            
	 	
              SECTION
      13.7

            	
              Notice of
      Defaults; Opportunity of the Borrower to Cure Defaults.

            	
              38

            
	 	
              SECTION
      13.8

            	
              Additional
      Remedies.

            	
              38

            
	ARTICLE
      14.         AMENDMENTS TO
      AGREEMENT	
              39

            
	 	
              SECTION
      14.1

            	
              Amendments to
      Agreement.

            	
              39

            
	ARTICLE
      15.        
MISCELLANEOUS	
              40

            
	 	
              SECTION
      15.1

            	
              Limitation of
      Rights.

            	
              40

            
	 	
              SECTION
      15.2

            	
              Severability.

            	
              40

            
	 	
              SECTION
      15.3

            	
              Notices.

            	
              40

            
	 	
              SECTION
      15.4

            	
              Acts of
      Owner of the Bond.

            	
              41

            
	 	
              SECTION
      15.5

            	
              Exculpation of
      Issuer.

            	
              41

            
	 	
              SECTION
      15.6

            	
              Indemnification
      Concerning the Project; Accuracy of Application and Information in
      Connection Therewith.

            	
              42

            
	 	
              SECTION
      15.7

            	
              Counterparts.

            	
              42

            
	 	
              SECTION
      15.8

            	
              No
      Personal Recourse.

            	
              43

            
	 	
              SECTION
      15.9

            	
              Payment
      of Expenses.

            	
              43

            
	 	
              SECTION
      15.10

            	
              Termination.

            	
              43

            
	 	
              SECTION
      15.11

            	
              Judicial
      Proceedings.

            	
              43

            
	 	
              SECTION
      15.12

            	
              Authorization of
      Agreement; Agreement to Constitute Contract.

            	
              44

            
	 	  	  	  
	 	
              EXHIBIT
      A:

            	
              Form of
      Bond

            	  
	 	
              EXHIBIT
      B:

            	
              Form of
      Mandatory Redemption Notice

            	  
	 	
              EXHIBIT
      C:

            	
              Form of
      Requisition

            	 
  

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    FINANCING
AGREEMENT

     

    FINANCING
AGREEMENT dated December 30, 2005 (the "Agreement") is made by and among MET-PRO
CORPORATION, a corporation organized and existing by virtue of the laws of the
Commonwealth of Pennsylvania (the "Borrower"), the PERKASIE BOROUGH INDUSTRIAL
DEVELOPMENT AUTHORITY (the "Issuer"), a body corporate and politic and a public
instrumentality of the Commonwealth of Pennsylvania (the "Commonwealth")
existing under and by virtue of the Act as herein defined, and BROWN BROTHERS
HARRIMAN & CO., a private bank organized as a partnership (the
"Bank").

     

    W
I T N E S S E T H

     

    WHEREAS,
the Issuer was created and exists under the provisions of the Pennsylvania
Industrial Development Financing Law (formerly the Industrial and Commercial
Development Law), Act of 1957, as from time to time amended (hereinafter
referred to collectively as the "Act"), and is empowered under the Act to
acquire, by purchase or otherwise, any lands or interest therein or other
property for any project and to enter into contracts with respect to the
financing of any project; and

     

    WHEREAS,
the Borrower has applied to the Issuer for financial assistance in connection
with a project (collectively, the "Project") consisting generally of the
expansion of its Fybroc Division Plant in Telford, Pennsylvania (the “Site”), as
more particularly described in the Application (herein defined), and the payment
of the costs and expenses of issuing the Bonds (hereinafter defined), and other
appropriate and lawful purposes, and has requested that the Issuer issue its
Economic Development Revenue Bond (Met-Pro Corporation Project) Series 2005 (the
"Bond"), in the aggregate principal amount of $4,000,000 to fund the costs of
the Project; and

     

    WHEREAS,
the Bond is being issued pursuant to the Act and a resolution of the Issuer
adopted on November 3, 2005 (the "Resolution"); and

     

    WHEREAS,
the Issuer intends to sell the Bond to the Bank at the face amount thereof and
to lend the proceeds from the sale of the Bond to the Borrower to assist in
financing the Project (such loan being hereinafter referred to as the "Loan"),
which loan will be repaid by the Borrower in accordance with the terms hereof;
and

     

    WHEREAS,
payment of the Bond will be secured by an assignment of the Issuer's rights
hereunder (other than its rights to payment of certain fees and expenses and to
indemnification) to the Bank and its successors and assigns; and

     

    WHEREAS,
the obligations of the Borrower hereunder will be secured by (1) a grant to the
Bank of a security interest in certain equipment of the Borrower to be financed
with the proceeds of the Bond pursuant to a Security Agreement dated of even
date herewith (the "Security Agreement"), and (2) a mortgage lien on certain
real property and improvements thereon pursuant to an Open-End Mortgage and
Security Agreement dated of even date herewith (the "Mortgage");
and

     

    WHEREAS,
all acts and things have been done and performed which are necessary to make the
Bond, when executed and delivered by the Issuer, the legal, valid and binding
limited obligation of the Issuer in accordance with its terms and to make this
Agreement a valid and binding agreement;

     

    NOW,
THEREFORE, in consideration of the purchase and
acceptance of the Bond by the Bank and of the mutual covenants and agreements
herein contained, and intending to be legally bound, the parties 

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

     

    hereby
agree as follows:

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
 ARTICLE
1.

    DEFINITIONS

     

    
      SECTION
1.1         Definitions.

    

     

    In
this Agreement and any supplement hereto (except as otherwise expressly
provided), the following words and terms shall have the meanings specified in
the foregoing recitals:

    
    

     

    
      	 	ACT	ISSUER
	 	AGREEMENT	LOAN
	 	BANK  	MORTGAGE
	 	BOND	PROJECT
	 	BORROWER 	RESOLUTION
	 	COMMONWEALTH  	SECURITY
      AGREEMENT

    

    

    In
addition, the following words and terms shall have the following meanings,
unless a different meaning clearly appears from the context:

     

    "AFFILIATE"
means, as to any entity, any corporation controlling, controlled by, or under
common control with such entity.

     

    "APPLICATION"
means the application for financial assistance of the Authority, approved in
accordance with the Resolution and submitted to the Department of Community and
Economic Development in connection with the financing of the
Project.

     

    "AUTHORIZED
OFFICER" means in the case of the Issuer, the Chairman or Vice Chairman of the
Issuer or any other individual or individuals duly authorized in writing by the
Issuer to act on its behalf, and in the case of the Borrower, individuals duly
authorized by the Borrower to act on its behalf as provided in the certificate
delivered in accordance with Section 7.2(b) hereof.

     

    "BASE
RATE" means a fluctuating rate per annum equal to the rate of interest
established by the Bank in Philadelphia, Pennsylvania, from time to time as its
“base rate” charged by Bank to commercial borrowers in the United
States.  The Base Rate is determined from time to time by Bank as a
means of pricing some loans to its borrowers. The Base Rate is not tied to any
external rate of interest or index, and does not necessarily reflect the lowest
rate of interest actually charged by Bank to any particular class or category of
customers.  If and when the Base Rate changes, the rate of interest
with respect to any advance to which the Base Rate applies will change
automatically without notice to Borrower, effective on the date of any such
change.

     

    "BOND
COUNSEL" means Counsel having a national reputation in the field of municipal
and tax-exempt finance whose opinions are generally accepted by purchasers of
municipal bonds and who are reasonably satisfactory to the Issuer and the
Bank.

     

    "BORROWER
FINANCING DOCUMENTS" means this Agreement, each Security Document and the Tax
Agreement.

     

    "BUSINESS
DAY" means any day other than (i) a Saturday or Sunday or a legal holiday, or
(ii) a day on which banking institutions located in the Commonwealth are
required or authorized by law or executive order to be closed for commercial
banking purposes, or (iii) so long as the Bank is the owner of the Bond, any day
on which the Bank's office in Philadelphia, Pennsylvania, is not open for
banking

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    business.

     

    “CHANGE
OF CONTROL” means an event or series of events by which (i) any “person” or
“group” (as such terms are defined in Sections 13(d) and 14(d) of the Exchange
Act), is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that a Person shall be deemed to have “beneficial
ownership” of all shares that any such Person has the right to acquire without
condition, other than passage of time, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of a
Controlling Stake in the Borrower, or (ii) (A) the Borrower consolidates with or
merges into another corporation or conveys, transfers or leases all or
substantially all of its properties and assets (determined on a consolidated
basis for the Borrower and its subsidiaries taken as a whole) to any Person, or
(B) any corporation consolidates with or merges into the Borrower or a
subsidiary of the Borrower in a transaction in which all of the outstanding
voting stock of the Borrower is changed into or exchanged for cash, securities
or other property, other than a transaction solely between the Borrower and a
Subsidiary of the Borrower, other than a merger effected exclusively for the
purpose of changing the domicile of the Borrower.

     

    "CODE"
means the Internal Revenue Code of 1986, as amended, and all applicable
regulations promulgated thereunder.

     

    "COLLATERAL"
means any of the property in which the Bank is granted a lien or security
interest pursuant to the Security Documents.

     

    "CONTROLLING
STAKE" means (i) the ownership of more than 30% of the total voting power of the
then outstanding voting stock of the Borrower by any “person” or “group;” or
(ii) the ownership of more than 20% of the total voting power of the then
outstanding voting stock of the Borrower by any “person” or “group” who owned
less than five percent (5%) of the voting stock of the Borrower during the prior
fiscal year of the Borrower.

     

    "COUNSEL"
means an attorney or firm of attorneys duly admitted to the practice of law
before the highest court of any state in the United States of America or the
District of Columbia.

     

    "CREDIT
OBLIGATION" means any obligation for the payment of borrowed money or the
installment purchase price of property or on account of a lease of property, in
each case of at least $1,000,000 in the aggregate in any one fiscal year of the
Borrower.

     

    "CURRENT
ASSETS" means cash and cash equivalents, accounts receivable, inventory,
marketable securities, prepaid expenses, and other assets that could be
converted to cash in less than one year.

     

    "DETERMINATION
OF TAXABILITY" means (a) the enactment of legislation to or with the effect that
interest payable on the Bond is includable in the gross income of the Bank
(provided that the Bank is not a “substantial user” or “related person” as each
such term is defined in the Code) under the federal income tax laws, any such
determination being deemed to have occurred on the effective date of such
legislation; or (b) receipt by the Borrower, the Issuer or the Bank of notice
that the Commissioner of Internal Revenue or any district director of the
Internal Revenue Service, based upon filings of the Borrower, any review or
audit of the Borrower, or any ground whatsoever, shall have determined that a
Taxable Event has occurred, or the issuance by the Internal Revenue Service of a
preliminary or proposed adverse determination with respect to any examination of
the Bond; provided that the Borrower shall have been afforded a reasonable
opportunity to appeal such determination, but only so long as (i) the Borrower
shall diligently pursue such appeal, and (ii) the Borrower shall provide the
Bank with reasonable assurance 

    
       

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

    

    of
payment of all obligations to the Bank in connection with the Bond as a result
of an adverse determination of such appeal, and (iii) the prosecution of such
appeal does not otherwise adversely affect the Bank in the Bank’s reasonable
judgment; or (c) issuance of a published or private ruling or a technical advice
memorandum by the Internal Revenue Service, or a determination by any court of
competent jurisdiction, that the interest payable on the Bond is includable for
federal income tax purposes in the gross income of the Bank (except as
aforesaid); or (d) an opinion of Bond Counsel addressed to the Bank that such
Bond Counsel cannot conclude that the interest on the Bond qualifies as exempt
income under Section 103 of the Code; provided, however, that the Borrower shall
have been given thirty (30) days’ notice and an opportunity to consult with such
Bond Counsel.

     

    "EXCHANGE
ACT" means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.

     

    "EVENT
OF DEFAULT" means any of the events enumerated in Section 13.1.

     

    “GAAP”
means generally accepted accounting principles and practices applied on a
consistent basis.

     

    "GOVERNMENT
OBLIGATIONS" means direct obligations of, or obligations the principal and
interest on which are unconditionally guaranteed by, the United Sates of
America.

     

    “INDEBTEDNESS”
of a Person shall mean:

     

    (a)           All
obligations on account of money borrowed by, or credit extended to or on behalf
of, or for or on account of deposits with or advances to, such
Person;

     

    (b)           All
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments;

     

    (c)           All
obligations of such Person for the deferred purchase price of property or
services;

     

    (d)           All
obligations secured by a Lien on property owned by such Person (whether or not
assumed); and all obligations of such Person under Capitalized Leases (without
regard to any limitation of the rights and remedies of the holder of such Lien
or the lessor under such Capitalized Lease to repossession or sale of such
property;

     

    (e)           The
face amount of all letters of credit issued for the account of such Person and,
without duplication, the unreimbursed amount of all drafts drawn thereunder, and
all other obligations of such Person associated with such letters of credit or
draws thereon;

     

    (f)           All
obligations of such Person in respect of acceptances or similar obligations
issued for the account of such Person;

     

    (g)           All
obligations of such Person under a product financing or similar arrangement
described in paragraph 8 of FASB Statement of Accounting Standards No. 49 or any
similar requirement of GAAP; and

     

    (h)           All
obligations of such Person under any interest rate or currency protection
agreement, interest rate or currency future, interest rate or currency option,
interest rate or currency 

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      swap or cap or
other interest rate or currency hedge agreement.

       

    

    "INDEMNIFIED
PARTIES" means the Issuer, the Bank, any Person who "controls" the Issuer and
the Bank, within the meaning of Section 15 of the Securities Act, any member,
officer, director, official or employee of the Issuer and the Bank (including
any partner of the Bank) and their respective executors, administrators, heirs,
successors and assigns.

     

    "INTEREST
PAYMENT DATE" means the third day of each January, April, July and October
commencing April 3, 2006.

     

    “LETTER
OF CREDIT" means a letter of credit of a bank or other financial institution
reasonably acceptable to the Bank, in a stated amount equal to 100% of the then
outstanding principal amount of the Bonds plus an amount equal to 100 days'
interest on the Bond at an assumed maximum interest rate on the Bond determined
by the Bank in the Bank's reasonable judgment based upon then prevailing market
interest rates in Philadelphia, Pennsylvania, and having a term of at least one
year, which may be drawn upon by the Bank to pay any interest or scheduled
principal on the Bond, and containing such other terms and conditions as shall
be reasonably satisfactory to the Bank.

     

    “LIEN”
shall mean any mortgage, deed of trust, pledge, lien, security interest, charge
or other encumbrance or security arrangement of any nature whatsoever, including
but not limited to any conditional sale or title retention arrangement, and any
assignment, deposit arrangement or lease intended as, or having the effect of,
security.

     

    "LOAN
ACCOUNT" has the meaning set forth in Section 8.3 hereof.

     

    "MORTGAGED
PROPERTY" means the property subject to the Mortgage.

     

    "OUTSTANDING"
shall mean, as of the time in question, the Bond issued and delivered under this
Agreement, except all or any portion of the principal amount thereof, as the
case may be, such as:

     

    (a)           is
cancelled or required to be cancelled under the terms of this Agreement;
or

     

    (b)           in
substitution for which another Bond has been authenticated and delivered
pursuant hereto; or

     

    (c)           is
paid in part without presentation and surrender of the Bond in accordance with
Section 6.1(f) hereof (but only to the extent of such payments).

     

    "PERSON"
means any natural person, firm, association, corporation, limited liability
company, partnership or public body.

     

    "PERMITTED
CORPORATE TRANSACTIONS" means mergers and acquisitions in which the purchase
price does not exceed twenty five million dollars ($25,000,000) in the aggregate
in any one fiscal year of the Borrower, provided, however, that at the time of
each such transaction, no Event of Default hereunder shall have occurred and
then be continuing.

     

    "PERMITTED
INDEBTEDNESS" means any of the following:  (i) obligations with
respect to the Bond under this Agreement; (ii) the existing term loan in the
original amount of $12,000,000 (with a current balance of $3,600,000) from
Citizens Bank of Pennsylvania (formerly Mellon Bank, N.A.) pursuant to the 1998
Term Loan Agreement dated October 29, 1998 between the Borrower and such bank;
(iii) unsecured

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    working
capital lines of credit, revolving credit loans and similar agreements having an
aggregate credit availability not to exceed $5,000,000; (iv) purchase money
Indebtedness (including capitalized leases) in an aggregate principal amount
outstanding not exceeding $1,000,000; and (v) any other Indebtedness to the
Bank.

     

    "PERMITTED
LIENS" means any of the following:  (i) purchase money liens securing
Permitted Indebtedness; (ii) utility, access or other easements and rights of
way, restrictions and exceptions which do not materially impair the operation or
value thereof; (iii) deposits under workers' compensation, unemployment and
social security or similar laws, or to secure performance of bids, tenders,
contracts (other than for the repayment of borrowed money) or leases to secure
indemnity, performance or similar bonds in the ordinary course of business; (iv)
liens imposed by law (whether or not inchoate), such as carriers',
warehousemen's, materialmen's or mechanics' liens, incurred in good faith in the
ordinary course of business, and which are not delinquent, and liens arising out
of a judgment or award with respect to which an appeal is being prosecuted, a
stay of execution pending such appeal having been secured or applied for and not
denied or rendered ineffective; and (v) liens for taxes, assessments or
governmental charges or levies on property if the same shall not at the time be
delinquent, or are being contested in good faith and by appropriate
proceedings.

     

    "PROJECT
COSTS" shall mean the costs of the Project to the extent permitted to be paid
pursuant to the Act, including, without limitation, the cost of construction of
the Project, the cost of acquisition and installation of machinery and
equipment, the costs of issuance of the Bond, and all costs related thereto
incurred by the Borrower.

     

    "PROJECT
FACILITIES" means the improvements, equipment and other property constituting
the Borrower's facilities located at the Fybroc Division Plant in Telford,
Pennsylvania, for the improvement of which the Issuer is undertaking the
Project.

     

    "RECORD
DATE" means, with respect to any Interest Payment Date, the Business Day
preceding such Interest Payment Date.

     

    "REGULATIONS"
means the United States Treasury Regulations and any pertinent Revenue Rulings,
Revenue Procedures, Notices or Announcements promulgated by the Secretary of the
Treasury of the United States or by the Internal Revenue Service.

     

    "RESERVED
RIGHTS" means the rights of the Issuer to (1) execute and deliver supplements
and amendments to the Agreement pursuant to Section 14.1 hereof, (2) be held
harmless and indemnified pursuant to Section 15.6 hereof, (3) receive any funds
for its own use, whether as administration fees pursuant to Section 8.2 or
reimbursement or indemnification pursuant to Section 15.6 hereof, (4) receive
notices and other documents, and (5) provide any consent, acceptance or approval
with respect to matters as provided herein.

     

    "SECURITIES
ACT" means the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.

     

    "SECURITY
DOCUMENTS" means the Security Agreement and the Mortgage.

     

    "SEC
REPORTS" means the Borrower’s most recently filed Annual Report on Form 10-K and
the Proxy Statement filed in connection with the Borrower’s most recent annual
meeting of stockholders and all Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K filed by the Borrower after January 1, 2005.

     

    
       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

    

     

    "SUBORDINATED
LIENS" means Liens that are subordinate to the Security Documents in right of
payment to the prior payment and performance of all present and future duties,
obligations and liabilities (whether direct or indirect, liquidated or
contingent, presently existing or arising in the future) of the Borrower to the
Bank in any amount now or hereafter existing, whether or not under this
Agreement or any other document, and whether for principal, interest (including,
without limitation, interest, after the filing of a petition initiating any
proceeding referred to in Section 13.1(d) or (e) hereof), fees, expenses or
otherwise.

     

    "TAX
AGREEMENT" means the Federal Tax Certificate executed by the Issuer and the
Borrower, concurrently with the delivery of the Bond, relating to the
expectations of the Issuer and the Borrower with respect to the expenditure of
the proceeds of the Bond and the compliance by the Issuer and the Borrower with
the provisions of the Code as required to ensure the exclusion from gross income
for federal income tax purposes of the interest on the Bond.

     

    "TAXABLE
EVENT" means the application of the proceeds of the Bond in such manner, or the
occurrence or non-occurrence of any other event (except the enactment of
legislation described in clause (a) of the definition of Determination of
Taxability above), whether within or without the control of the Borrower, with
the result that, under the Code, the interest on the Bond is or becomes
includable in the gross income for federal income tax purposes of the Bank
(except as aforesaid).

     

    SECTION 1.2   Rules of
Contruction.

     

    In
this Agreement (except as otherwise expressly provided), the following rules
shall apply unless a different meaning clearly appears from the
context:

     

    (a)   This
Agreement shall be governed by and construed in accordance with the laws of the
Commonwealth.

     

    (b)    The
section and other headings contained in this Agreement and the table of contents
preceding this Agreement are for reference purposes only and shall not control
or affect the construction of this Agreement or the interpretation thereof in
any respect.

     

    (c)   Unless
the context of this Agreement clearly requires otherwise, references to the
plural include the singular, the singular the plural, and the part the
whole.  The words "hereof," "herein," "hereunder" and similar terms in
this Agreement refer to this Agreement as a whole and not to a particular
provision of this Agreement.

     

    (d)   The
provisions of this Agreement are intended to be severable.  If any
provision of this Agreement shall be held invalid or unenforceable in whole or
in part, such provision shall be ineffective to the extent of such invalidity or
unenforceability without in any manner affecting the validity or enforceability
of the remaining provisions of this Agreement.

     

    (e)   Words
importing the singular number include the plural number and vice versa; and all
words importing the masculine gender include the feminine gender.

     

    (f)   All
references herein to financial or accounting terms, except as the context may
clearly otherwise require, shall be construed in accordance with
GAAP.

     

    (g)   All
references to the time of any day shall mean Eastern Standard or Daylight
Savings Time, as prevailing on the applicable date in Philadelphia,
Pennsylvania.

     

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    ARTICLE 2.

    ISSUER
REPRESENTATIONS

     

     

    The
Issuer represents and warrants as follows:

     

    SECTION 2.1   Organization;
Authority To Issue Bond.

     

    The
Issuer is a body corporate and politic and a public instrumentality of the
Commonwealth, duly organized, established and existing under the laws of the
Commonwealth, particularly the Act.  The Issuer is authorized to issue
the Bond in accordance with the Act and to use the proceeds thereof to make the
Loan.

     

    SECTION 2.1   Authorization for
Financing.

     

    The
Issuer has complied with the provisions of the Act and has full power and
authority pursuant to the Act to consummate all transactions contemplated by
this Agreement, the Bond, the Resolution, and any and all agreements relating
thereto and to perform its obligations thereunder and to issue, sell and deliver
the Bond to the Bank as provided herein.

     

    SECTION 2.3   Resolution.

     

    Pursuant
to the Resolution adopted by the Issuer and still in force and effect, the
Issuer has duly authorized the execution, delivery and due performance of this
Agreement and the Bond and the Issuer has duly authorized the taking of any and
all action as may be required on the part of the Issuer pursuant to the express
provisions of this Agreement to perform, give effect to and consummate the
transactions contemplated by this Agreement and all approvals necessary in
connection with the foregoing have been received.

     

    
      SECTION 2.4   The
Bond.

    

     

    When
the Bond is issued, transferred and delivered in accordance with the provisions
of this Agreement, the Bond will have been duly authorized, executed, issued and
delivered and will constitute the valid and special and limited obligation of
the Issuer payable solely from the revenues and other monies derived by the
Issuer from this Agreement.  The Bond shall not be in any way a debt
or liability of the Commonwealth or any political subdivision thereof, except
the non-recourse obligation of the Issuer, and shall not create or constitute
any indebtedness, liability or obligation of the Commonwealth or of any
political subdivision thereof, except the non-recourse obligation of the Issuer,
either legal, moral or otherwise.  The Bond does not now and shall
never constitute a charge against the general credit of the Issuer.

     

    
      SECTION 2.5   No Conflict or Violation.

    

     

    The
execution and delivery of this Agreement and the Bond and compliance with the
provisions thereof, will not conflict with or constitute on the part of the
Issuer a violation of the Constitution of the Commonwealth or violation, breach
of or default under its By-Laws or any statute, indenture, mortgage, deed of
trust, note agreement or other agreement or instrument to which the Issuer is a
party or by which the Issuer is bound, or, to the knowledge of the Issuer, any
order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Issuer or any of its activities or properties, and all
consents, approvals, authorizations and orders of governmental or regulatory
authorities which are required to be obtained by the Issuer for the consummation
of the transactions contemplated thereby have been obtained.

     

    
       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      
        SECTION 2.6   Litigation.

      

    

     

    There
is no action, suit, proceeding or investigation at law or in equity or before or
by any court, public board or body pending or threatened against or affecting
the Issuer, or, to the best knowledge of the Issuer, any basis therefor, wherein
an unfavorable decision, ruling or finding would adversely affect the
transactions contemplated hereby, or which in any way would contest or adversely
affect the validity of the Bond or this Agreement or the power of the Issuer for
the issuance of the Bond, the validity of the Resolution, the validity of, or
power of the Issuer to execute and deliver, any agreement or instrument to which
the Issuer is a party and which is used or contemplated for use in consummation
of the transactions contemplated hereby or the right of the Issuer to finance
the Project.

     

    
      SECTION 2.7   No Repeal.

    

     

    No
authority or proceedings for the issuance of the Bond or documents executed in
connection therewith has been repealed, revoked, rescinded or
superseded.

     

    
      SECTION 2.8   Limitations on the
Representation and Warranties of the
Issuer.

    

     

    The
Issuer makes no representation as to (a) the financial position or business
condition of the Borrower, (b) the value of the Project Facilities or any
Collateral, or their suitability for any particular purpose or (c) the
correctness, completeness or accuracy of any of the statements, materials
(financial or otherwise), representations or certifications furnished or to be
made by the Borrower in connection with the sale or transfer of the Bond, the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby.

     

     

     

     

     

     

     

     

     

    
 

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

       

    

    ARTICLE
3.

    BORROWER
REPRESENTATIONS

     

     

    The
Borrower represents and warrants as follows:

     

    SECTION 3.1   Organization and
Existence.

     

    The
Borrower is a corporation duly organized and existing in good standing under the
laws of the Commonwealth of Pennsylvania, with full power and legal right to
enter into the Borrower Financing Documents and to perform its obligations
thereunder.  The making and performance by the Borrower of its
obligations under this Agreement have been duly authorized by proper corporate
action.

     

    SECTION 3.2   Consents.

     

    No
authorization, consent, approval, license, exemption by or filing or
registration with any court or governmental department, commission, board
(including the Board of Governors of the Federal Reserve System), bureau, agency
or instrumentality is or will be necessary for the valid execution, delivery or
performance by the Borrower of any Borrower Financing Document.

     

    SECTION 3.3   No
Conflict or Violation.

     

    The
execution and delivery of the Borrower Financing Documents and the consummation
of the transactions contemplated thereby does not conflict with or cause or
constitute a breach of or default under any bond, contract, indenture, agreement
or other instrument to which the Borrower is a party or by which it or its
property is bound.

     

    
      SECTION 3.4   Litigation
or Proceedings.

    

     

    There
is no action, suit, proceeding or investigation at law or in equity before or by
any court, arbitration board or tribunal, public board or body pending or, to
the best knowledge of the Borrower, threatened against or affecting the
Borrower, or, to the best knowledge of the Borrower, any basis therefor, wherein
an unfavorable decision, ruling or finding would (i) adversely affect in a
material way the transactions contemplated by the Borrower Financing Documents,
or any other agreement or instrument to which the Borrower is a party, which is
used or contemplated for use in the consummation of the transactions
contemplated by the Borrower Financing Documents, or (ii) adversely affect the
exemption of interest on the Bond from federal income taxation or any state
tax-exemption applicable thereto, or (iii) adversely affect in any material way
the operations, financial condition, earnings, prospects or assets of the
Borrower except as disclosed in SEC Reports.

     

    
      SECTION 3.5   Legal
and Binding Obligation.

    

     

    Each
of the Borrower Financing Documents is a legal, valid and binding obligation of
the Borrower enforceable against it in accordance with its terms except as the
same may be limited by bankruptcy, insolvency, reorganization, moratorium or
other laws relating to or affecting the enforcement of creditors' rights
generally and except to the extent that the enforceability thereof may be
limited by the application of general principles of equity.

     

    
      SECTION 3.6   ERISA.

    

     

    Each
employee benefit plan as to which the Borrower may have any liability complies
in all 

     

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    material
respects with all applicable provisions of ERISA, including minimum funding
requirements, and (i) no “prohibited transaction” (as defined under ERISA) has
occurred with respect to any such plan, (ii) no “reportable event” (as defined
under Section 4043 of ERISA) has occurred with respect to any such plan which
would cause the Pension Benefit Guaranty Corporation to institute proceedings
under Section 4042 of ERISA, (iii) the Borrower has not withdrawn from any such
plan or initiated steps to do so, and (iv) no steps have been taken to terminate
any such plan.

     

    
      SECTION
3.7         Indebtedness.

       

    

    The
Borrower is not liable to any Person for indebtedness for money borrowed that is
not disclosed in the SEC Reports or has been otherwise disclosed in writing to
the Bank.

     

    SECTION
3.8         Contingent
Liabilities.

     

    There
are no suretyship agreements, guarantees or other contingent liabilities of the
Borrower that are not disclosed in the SEC Reports or on the financial
statements heretofore provided to the Bank or as otherwise disclosed in writing
to the Bank, other than guarantees and indemnification covenants given by the
Borrower in the ordinary course of business.

     

    
      SECTION
3.9         Investment Company
Act.

    

     

    The
Borrower is not an “investment company,” or a company “controlled” by an
“investment company,” within the meaning of the Investment Company Act of 1940,
as amended.

     

    
      SECTION
3.10       Federal Reserve
Regulations.

    

     

    No
indebtedness that is required to be, or will be, reduced or retired from the
proceeds of the Bond was incurred 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 (12 C.F.R. 221, as amended), and the Borrower does
not own or have any present intention to acquire any such margin
stock.

     

    
      SECTION
3.11       Payment of
Taxes.

       

    

    Except
for such amounts as the Borrower is contesting in good faith through proper
proceedings, the Borrower has filed or caused to be filed all federal, state and
local tax returns which are required to be filed, and has paid or caused to be
paid all taxes as shown on said returns or on any assessment received by it, to
the extent that such taxes have become due.

     

    
      SECTION
3.12       No
Default

    

     

    The
Borrower is not in default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in any agreement or
instrument to which it is a party or by which it is bound, to the extent such
default would result in a materially adverse impact on the financial position or
condition of the Borrower.

     

    
      SECTION
3.13       SEC
Reports.

    

     

    As
of their respective filing dates, the SEC Reports were prepared in all material
respects in accordance with the requirements of the Securities Act or the
Exchange Act, as the case may be. The audited consolidated financial statements
and unaudited interim financial statements of the Borrower included in the SEC
Reports have been prepared in accordance with GAAP applied on a consistent basis

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    
       

      (except as may be
indicated therein or in the notes thereto) and fairly present, in all material
respects, the financial position of the Borrower as at the dates thereof and the
results of its operations and cash flows for the periods then ended subject, in
the case of the unaudited interim financial statements, to normal year-end
adjustments and any other adjustments described in such financial
statements.

       

      SECTION
3.14       Title;
Encumbrances.

    

     

    Except
as otherwise disclosed in writing to the Bank, the Borrower has good and
indefeasible title to, or a valid and binding leasehold in, all of its
properties and assets.  The Collateral is not subject to any
Lien.

     

    
      SECTION
3.15       Tax Status of
Bond.

    

     

    The
Borrower has not taken any action and knows of no action that any Person has
taken or intends to take, and will not take or permit any Person to take, which
would cause interest on the Bond to be includable in the gross income of the
Bank for federal income tax purposes.

     

    
      SECTION
3.16       Environmental
Laws.

    

     

    The
Borrower, to the best of its knowledge, is in compliance, in all material
respects, with all Environmental Laws (as defined below), including, without
limitation, all Environmental Laws in jurisdictions in which the Borrower owns
or operates, or has owned or operated, a facility or site, stores Collateral,
arranges or has arranged for disposal or treatment of hazardous substances,
solid waste or other waste, accepts or has accepted for transport any hazardous
substances, solid waste or other wastes or holds or has held any interest in
real property or otherwise.  Except as disclosed to the Bank in
writing, no litigation, action, proceeding, inquiry, request for information,
administrative action or overt investigation arising under, relating to or in
connection with any Environmental Law is pending or, to the best knowledge of
the Borrower, threatened against the Borrower, any real property which the
Borrower holds or has held an interest or any past or present operation of the
Borrower.  No release, threatened release or disposal of hazardous
waste, solid waste or other wastes is occurring, or to the best knowledge of the
Borrower, has occurred which has not been remediated, on, under or to any real
property in which the Borrower holds any interest or performs any of its
operations, in violation of any Environmental Law.  As used in this
Section, "Environmental Laws" means all provisions of laws, statutes,
ordinances, rules, regulations, permits, licenses, judgments, writs,
injunctions, decrees, orders, awards and standards promulgated by any
governmental authority  concerning health, safety and protection of,
or regulation of the discharge of substances into, the environment.

     

    
      SECTION
3.17       No False
Statements.

    

     

    As
of the date hereof, neither any Borrower Financing Document nor any other
document, certificate or statement furnished to the Issuer or the Bank by or on
behalf of the Borrower contains any untrue statement of a material fact with
respect to the Borrower or omits to state a material fact with respect to the
Borrower necessary in order to make the statements contained herein and therein
not misleading.  It is specifically understood by the Borrower that
all such statements, representations and warranties shall be deemed to have been
relied upon by the Issuer as an inducement to make the Loan and issue the Bond
and by the Bank to purchase the Bond.

     

     

     

    
 

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

       

    

    ARTICLE
4.

    BANK
REPRESENTATIONS

     

    The
Bank represents and warrants as follows:

     

    
      SECTION
4.1         Independent
Investigation.

    

     

    The
Bank has made an independent investigation and evaluation of the financial
position and business condition of the Borrower and the value of the Project,
the Collateral and the Mortgaged Property or has caused such investigation and
evaluation of the Borrower and the Project to be made by Persons it deems
competent to do so.  All information relating to the business and
affairs of the Borrower that the Bank has requested in connection with the
transactions referred to herein have been provided to the Bank.  The
Bank hereby expressly waives the right to receive such information from the
Issuer and relieves the Issuer of any liability for failure to provide such
information or for the inclusion in such information or in any of the documents,
representations or certifications to be provided by the Borrower under this
Agreement of any untrue fact or for the failure therein to include any
fact.

     

    
      SECTION
4.2         Purchase for Own
Account.

    

     

    The
Bank is purchasing the Bond for its own account, with the purpose of investment
and not with the intention of distribution or resale thereof.  The
Bond will not be sold unless registered in accordance with the rules and
regulations of the Securities and Exchange Commission or unless the Issuer is
furnished with an opinion of Counsel or a "No Action" letter from the Securities
and Exchange Commission that such registration is not required.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
 

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

       

    

    ARTICLE
5.

    THE
BOND

     

     

    
      SECTION
5.1         Form;
Amount and Terms.

       

    

    (a) In
order to provide funds for the Project, the Bond is hereby authorized to be
issued in the aggregate principal amount of $4,000,000, and shall be issued as a
fully registered Bond, without coupons, substantially in the form set forth as
Exhibit "A" hereto, with appropriate insertions and deletions.  The
Bond shall be issued in a single denomination equal to the entire outstanding
principal amount thereof.

     

    (b) The
Bond shall mature on April 6, 2021, shall be subject to optional and mandatory
redemption prior to maturity as provided in Section 6.1 hereof and in the Bond
and shall bear interest from and including the date thereof, or from the most
recent Interest Payment Date to which interest has been fully paid or provided,
until payment of the principal thereof shall have been made in accordance with
the provisions thereof.  Principal of and interest on the Bond shall
be paid as provided for in the form thereof set forth as Exhibit "A" hereto and
made a part hereof, and as otherwise set forth in this Agreement.

     

    
      SECTION
5.2         Payment
and Dating of the Bond.

    

     

    Principal
of the Bond shall be payable to the Bank upon presentation and surrender of the
Bond at the principal office of the Borrower on the maturity date shown thereon
unless previously redeemed by the Issuer pursuant to Section 6.1
hereof.  Interest on the Bond shall be payable on each Interest
Payment Date in the manner provided in Section 8.1(c) hereof.  The
Bond shall bear interest on overdue principal and, to the extent permitted by
law, on overdue interest, at the Base Rate plus 2%. Payment as aforesaid shall
be made in such coin or currency of the United States of America as, at the
respective times of payment, shall be legal tender for the payment of public and
private debts.  Any payment of interest or principal on the Bond that
is due on a day that is not a Business Day shall be due on the next succeeding
Business Day.

     

    The
Bond shall be dated the date of delivery thereof.

     

    
      SECTION
5.3         Execution

    

     

    (a) The
Bond shall be executed on behalf of the Issuer by its Chairman or Vice Chairman
by his or her manual or facsimile signature, and the corporate seal of the
Issuer or a facsimile thereof shall be impressed thereon or affixed thereto and
attested by its Secretary or Assistant Secretary by his or her manual or
facsimile signature.  In case any officer whose signature (or
facsimile thereof) shall appear on the Bond shall cease to be such officer
before the delivery of the Bond, such signature or such facsimile shall
nevertheless be valid and sufficient for all purposes, the same as if such
officer had remained in office until delivery.

     

    (b) The
Bond shall not be valid or obligatory for any purpose unless and until the
Certificate of Authentication attached thereto shall have been duly executed by
the Borrower.  The executed certificate of the Borrower upon the Bond
shall be conclusive evidence that the Bond has been authenticated and delivered
hereunder.  The Borrower is hereby authorized and empowered to
authenticate the Bond on the date of execution hereof and to deliver the Bond to
the Bank thereof upon receipt of the purchase price therefor in accordance with
Section 7.3 hereof.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    ARTICLE
6.

    REDEMPTION
OF BOND BEFORE MATURITY

     

    
      SECTION
6.1         Redemption of the
Bond.

    

     

    (a)   Optional Redemption;
Notice.  The Bond shall be subject to optional redemption by
the Issuer, at the written direction of the Borrower, in whole or in part (but
if in part in the principal amount of $100,000 or integral multiples of $5,000
in excess thereof), on any date at a price equal to 100% of the principal amount
thereof to be redeemed, together with accrued interest to the date of
redemption.  The Borrower shall provide the Bank with notice of the
date of any optional redemption pursuant to this Section 6.1(a) and the
principal amount of the Bond to be redeemed by first-class mail, postage
prepaid, sent at least fifteen (15) days before such redemption date to the Bank
at the registered address of the Bank appearing in this Agreement as of the
close of business on the Business Day prior to such mailing.  On each
such redemption date, payment of the redemption price having been made to the
Bank as provided herein and in the Bond, the Bond or the portion thereof so
called for redemption shall become due and payable on the redemption date and
interest shall cease to accrue thereon from and after the redemption date. Any
amounts applied to an optional redemption shall reduce the mandatory scheduled
redemption obligations of the Issuer described below in the order selected by
the Borrower and approved by the Bank (or in the absence of such approval in
inverse order of payment obligations).

     

    (b)   Mandatory Scheduled
Redemption.  The Outstanding principal of the Bond shall be
redeemed in part by the Issuer in 60 equal quarter-annual installments
commencing on July 3, 2006, and payable thereafter on each Interest Payment
Date, at a redemption price equal to 100% of the principal amount thereof to be
redeemed, without premium; provided, however, that the Bank and the Borrower,
with notice to the Issuer, may agree to a different schedule of principal
amortization provided that (1) no such schedule shall provide for the deferral
of the payment of any principal on the Bond beyond the final maturity date
thereof, and (2) prior to the effectiveness of such schedule there shall be
delivered to the Bank and the Issuer an opinion of Bond Counsel to the effect
that the adoption of such schedule will not cause interest on the Bond to no
longer by excluded from gross income for Federal income tax
purposes.

     

    (c)   Mandatory Redemption at
Option of Bank.  At any time on or after June 1, 2012, all or
any portion of this Bond shall be redeemed by the Issuer, in whole or in part
(but if in part in the principal amount of $100,000 or integral multiples of
$5,000 in excess thereof) at a redemption price equal to 100% of the principal
amount thereof plus accrued interest to the date of redemption, upon not less
than 180 days written demand, in the form attached as Exhibit "B" to the
Agreement, of the Bank, with a copy to the Issuer.  The Bond, or any
portion thereof, shall be redeemed, and the redemption of this Bond shall be
paid to the owner of this Bond, on the date specified by the Bank. However, if
the Bank shall demand the redemption of this Bond in whole pursuant to this
paragraph, the Borrower shall have the right to purchase this Bond on any date
after the date of the Bank's written demand and prior to the next Business Day
preceding the date of the proposed redemption, at a purchase price equal to 100%
of the principal amount of this Bond, together with accrued interest to the date
of purchase.

     

    Notwithstanding
the foregoing, if, prior to the date of redemption otherwise specified in
accordance with this subsection, the Borrower shall cause to be delivered to the
Bank a Letter of Credit, in form and substance reasonably satisfactory to the
Bank, the Bond shall not be subject to mandatory prepayment on the date
specified by the Bank, and thereafter, so long as such Letter of Credit shall be
in effect, the Bank shall have no right to demand the prepayment of the Bond
pursuant to this subsection.

     

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    (d)   Mandatory Redemption Upon
Determination of Taxability.  On the date of the occurrence of
a Determination of Taxability the Bond shall be called for redemption on the
date selected by the Borrower, but not more than ninety (90) days following the
date of the occurrence of the Determination of Taxability, at a redemption price
equal to 100% of the Outstanding principal amount thereof plus accrued interest
to the date of redemption.

     

    If
there shall have occurred a Determination of Taxability and the Borrower shall
fail to give notice thereof within thirty (30) days or shall fail to select a
date within ninety (90) days of the date of the occurrence of the Determination
of Taxability for the redemption of the Bond as provided in this Section 6.1(e),
the Issuer shall call the Bond for redemption on the date ninety (90) days
following the date of the occurrence of the Determination of
Taxability.

     

    The
Issuer or the Borrower, on behalf of the Issuer, shall provide the Bank with
notice of the date of a redemption pursuant to this Section 6.1(e) and the
principal amount of the Bond to be redeemed by first-class mail, postage
prepaid, sent at least fifteen (15) days before such redemption date to the Bank
at the address of the Bank appearing in this Agreement as of the close of
business on the Business Day prior to such mailing.  On each such
redemption date, payment or provision for payment of the redemption price having
been made, the Bond or the portion thereof so called for redemption shall become
due and payable on the redemption date, and interest shall cease to accrue
thereon from and after the redemption date.

     

    (e)   Breakage Fees Upon
Redemption.  Upon any redemption of the Bond other than
pursuant to paragraph (b) above, the Borrower shall pay to Bank, concurrently
therewith, a "breakage fee" equal to the excess, if any, of (A) the amount of
interest which otherwise would have accrued on the principal amount so repaid
for the period from the date of such repayment to the end of the current
quarterly interest period for such amount at the applicable rate of interest for
such amount provided for herein over (B) the interest component of the amount
the Bank would have bid in the London interbank market for Dollar deposits of
leading lenders and amounts comparable to such principal amount and with
maturities comparable to such period (it being conclusively presumed for such
purpose that Bank shall have purchased funds at the LIBOR Rate (as defined in
the Bond).

     

    (f)   Payment Upon Redemption or
Prepayment.  Payment in respect of the redemption or prepayment
of the Bond shall be made by the Borrower by wire transfer of immediately
available funds to the bank account specified by the Bank.  Except in
the event of the redemption of the Bond in its entirety, any such redemption
shall be made without surrender of the Bond by the Bank for payment, provided
that the Borrower's records of such payment shall be conclusive and binding on
the Bank, absent manifest error.

     

     

     

     

     

     

     

     

     

    
 

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

       

    

    ARTICLE
7.

    ISSUE
OF BOND

     

    
      SECTION
7.1         Sale and Purchase of the
Bond; Loan of Proceeds; Application of Proceeds.

    

     

    In
order to provide funds for the payment of the costs of the Project, the Issuer
agrees to issue the Bond, concurrently with the execution and delivery hereof,
and to sell the Bond to the Bank.  The Bank shall purchase the Bond at
a purchase price of 100% of the principal amount thereof in accordance with the
terms and conditions hereof.  The proceeds of the Bond are hereby
loaned to the Borrower to be applied to pay Project Costs in accordance with
Section 7.3 below.

     

    
      SECTION
7.2         Delivery of the
Bond.

    

     

    The
Issuer will issue and deliver the Bond to the Bank upon payment of the purchase
price therefor and the execution and delivery to the Bank of the
following:

     

    (a)   Copies
of the proceedings of the Issuer relating to the issuance of the Bond duly
certified by an Authorized Officer of the Issuer;

     

    (b)   A
written certificate by an authorized officer of the Borrower as to the names and
signa­tures of the officers of the Borrower authorized to sign this
Agreement and the other documents or certificates of the Borrower to be executed
and delivered pursuant hereto.  The Bank may conclusively rely on, and
be protected in acting upon, such certificate until it shall receive a further
certificate by the Secretary or an Assistant Secretary of the Borrower amending
the prior certificate;

     

    (c)   A
copy of the resolutions of the Board of the Borrower certified by the Secretary
or Assistant Secretary thereof authorizing and approving the execution and
delivery of this Agreement and all other documents delivered pursuant to this
Agreement, and such other corporate documents and records as the Bank may
reasonably request;

     

    (d)   Original
executed counterparts of this Agreement, each Security Document, the Tax
Agreement and other appropriate documents;

     

    (e)   Opinions
in form and substance satisfactory to the Issuer and the Bank dated as of the
date of the closing of (i) Counsel for the Issuer, (ii) Bond Counsel and (iii)
Counsel for the Borrower;

     

    (f)   Evidence
satisfactory to the Bank of the maintenance by the Borrower of insurance as
required by Section 11.12 hereof and as required by each Security
Document;

     

    (g)   A
report of title, in form reasonably satisfactory to the Bank, indicating the
absence of any liens or encumbrances with respect to the real property subject
to the Mortgage other than Permitted Encumbrances;

     

    (h)   Evidence
satisfactory to the Bank of the filing of all UCC-1 financing statements
required to perfect the liens and security interests created under the Security
Agreement and the assignment by the Issuer to the Bank of its rights hereunder
in accordance with Section 10.6 hereof or as necessary to confirm the continuing
priority of any lien granted by the Borrower with respect to any of the
Collateral; and

     

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    (i)   Other
customary closing certificates and documents as may reasonably be required by
the Bank, the Issuer or by Bond Counsel.

     

    
      SECTION
7.3         Disposition of Proceeds of
the Bond.

    

     

    Upon
the issuance and sale of the Bond in accordance with Article 7 hereof, the Bank
shall make one or more advances of the purchase price therefor, in increments of
$100,000 or integral multiples of $5,000 in excess thereof, upon requisition of
the Borrower in the form attached hereto as Exhibit "C" hereto; provided,
however, that (a) certain costs of the Project previously paid by the Borrower
or due and payable on the date hereof, including costs of issuing the Bond in an
amount not greater than 2% of the principal amount thereof advanced, shall be
paid to or upon the order of the Borrower as provided in a closing statement
signed by the Borrower and delivered in connection with the sale and delivery of
the Bond, and (b) nothing herein shall obligate the Bank to (i) advance funds
more frequently than once in each month, (ii) advance such amounts so long as
any Event of Default (or any event which with the passage of time or the giving
of notice or both would be an Event of Default) shall have occurred or at any
time after the Bank shall have demanded redemption of the Bond in accordance
with Section 6.1(c) hereof or to advance amounts after July 3, 2006, or (iii)
verify the truth or accuracy of any of the information included in any such
requisition.

     

    The
Issuer shall have the right to receive, upon written request to the Bank, a
record of requisitions for advances hereunder.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    ARTICLE
8.

    LOAN
PAYMENTS AND ADDITIONAL SUMS

     

    
      SECTION
8.1         Loan
Payments.

       

    

    (a)   The
Borrower shall pay to the Bank, on behalf of the Issuer, the following sums as
loan payments hereunder at the following times, in immediately available
funds:

     

    (i)   on
each Interest Payment Date during the term of this Agreement, an amount which is
sufficient to pay the interest then due on the Bond.  The amount of
interest due shall be determined by the Bank and communicated in such manner as
the Bank and the Borrower shall mutually agree;

     

    (ii)   on
the maturity date of the Bond, the principal amount thereof then maturing;
and

     

    (iii)   on
the redemption dates established for the Bond to be redeemed pursuant to Section
6.1 hereof (if any), an amount equal to the redemption price due on such
date.

     

    (b)   In
any event, the sum of the loan payments payable under this Section 8.1 shall be
sufficient to pay the total amount due with respect to such principal and
redemption price of and interest (including but not limited to interest and late
charges payable pursuant to the Bond on any overdue amount) on the Bond, as and
when due, and the Borrower shall forthwith pay any deficiency to the
Bank.  If at any time the Bond has been fully paid and discharged
within the meaning of the terms hereof, the Borrower shall not be obligated to
make any further payments under this Section.

     

    (c)   Payment
by the Borrower of the loan payments set forth above shall be made by bank wire
transfer in immediately available funds to such account of the Bank as the Bank
shall designate or by debit of a deposit account maintained by the Borrower with
the Bank, in either case as the Bank and the Borrower shall agree.

     

    
      SECTION
8.2         Payment of Fees, Charges and
Expenses.

    

     

    (a)   The
Borrower shall pay to, or upon the order of, the Issuer, upon request of the
Issuer, such amounts required to pay the Issuer's customary administrative fees
and to pay or reimburse its reasonable administrative expenses in connection
with the making by the Issuer of the Loan to the Borrower of the proceeds of the
Bond and all other services or actions of the Issuer in connection with this
Agreement, as presented to the Borrower at the closing.

     

    (b)   The
Borrower (1) will reimburse the Bank on demand for the reasonable costs and
expenses of the Bank in connection with the preparation, execution, issuance and
delivery of this Agreement, the Bond, the Security Documents and the other
instruments and documents to be delivered hereunder (including the reasonable
fees and out-of-pocket expenses of Counsel with respect thereto) as presented to
the Borrower at the closing, and (2) will reimburse the Bank on demand for the
reasonable costs and expenses, if any, of the Bank in connection with the
enforcement of this Agreement and the Bond (including the reasonable fees and
out-of-pocket expenses of Counsel with respect thereto).

     

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    
      SECTION
8.3         Maintenance of Loan
Account.

    

     

    The
Bank shall open and maintain on its books a loan account (the “Loan Account”)
with respect to advances made, repayments, prepayments, the computation and
payment of interest and fees and the computation and final payment of all other
amounts due and sums paid to the Bank under this Agreement and the
Bond.  Unless the Borrower objects in writing to the information
contained in a statement delivered to the Borrower by the Bank regarding the
Loan Account within thirty (30) days of receipt of such statement, the
information contained in such statement and in the Loan Account will, absent
manifest error, be conclusive and binding on the Borrower as to the amount at
any time due to the Bank from the Borrower under this Agreement and from the
Issuer to the Bank under the Bond.  The Issuer shall have the right to
receive copies of all statements of the Bank with respect to the Loan Account
upon its written request to the Bank.

     

    
      SECTION
8.4         Repayment.

    

     

    After
payment in full of all sums due hereunder, the Bond shall be marked “paid in
full” but retained by the Bank until the regular limitations period within which
the Internal Revenue Service may claim the interest payable pursuant to the Bond
to be not exempt from federal income taxes has elapsed without such claim being
made.  Notwithstanding such marking of the Bond or its return by the
Bank, the Borrower shall remain liable for payment of sums, if any, required to
be paid under this Agreement.

     

    
      SECTION
8.5         No Abatement or
Setoff.

    

     

    The
Borrower shall pay all loan payments and all additional sums required hereunder
without suspension or abatement of any nature, notwithstanding that all or any
part of the Borrower's facilities shall have been wholly or partially destroyed,
damaged or injured and shall not have been repaired, replaced or
rebuilt.  So long as any portion of the Bond remains Outstanding, the
obligation of the Borrower to pay all sums due from the Borrower hereunder shall
be absolute and unconditional for which the Borrower pledges its full faith and
credit and shall not be suspended, abated, reduced, abrogated, waived,
diminished or otherwise modified in any manner or to any extent whatsoever,
regardless of any rights of setoff, recoupment or counterclaim that the Borrower
might otherwise have against the Issuer, the Bank or any other party or parties
and regardless of any contingency, act of god, event or cause whatsoever and
notwithstanding any circumstances or occurrence that may arise or take place
after the date hereof, including but without limiting the generality of the
foregoing:

     

    (a)           any
damage to or destruction of any part or all of the Borrower's facilities,
including the Project Facilities;

     

    (b)           the
taking or damaging of any part or all of the Borrower's facilities, by any
public authority or agency in the exercise of the power of or in the nature of
eminent domain or by way of a conveyance in lieu of such exercise or
otherwise;

     

    (c)           any
assignment, novation, merger, consolidation, or transfer of assets, whether with
or without the approval of the Issuer;

     

    (d)           any
failure of the Issuer to perform or observe any agreement or covenant, whether
express or implied, or any duty, liability or obligation arising out of or in
connection with this Agreement and the Bond;

     

    (e)           any
act or circumstances that may constitute an eviction or constructive
eviction;

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    (f)           failure
of consideration, failure of title or commercial frustration;

     

    (g)           any
change in the tax laws or other laws of the United States or of any state or
other governmental authority; or

     

    (h)           any
determination that the Bond or the interest payable thereon is subject to
Federal taxation.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
 

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

       

    

    ARTICLE
9.

    <Reserved>

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
 

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

       

    

    ARTICLE
10.

    COVENANTS
AND AGREEMENTS OF ISSUER

     

     

    
      SECTION
10.1       Payment of the
Bond.

    

     

    The
Issuer covenants that it will promptly pay, or cause to be paid, the principal
and redemption price of and interest on the Bond at the places, on the dates and
in the manner provided herein and in the Bond according to the true intent and
meaning thereof, but only from the amounts payable by the Borrower under this
Agreement.  It is hereby acknowledged and agreed that the Bond is a
special obligation of the Issuer payable as above provided, shall not be in any
way a debt or liability of the Commonwealth or any political subdivision
thereof, except the non-recourse obligation of the Issuer, and shall not create
or constitute any indebtedness, liability or obligation of the Commonwealth or
any political subdivision thereof, except the non-recourse obligation of the
Issuer, either legal, moral or otherwise.  The Bond does not now and
shall never constitute a charge against the general credit of the
Issuer.

     

    
      SECTION
10.2       Bond Not to Become
Taxable.

    

     

    The
Issuer hereby covenants that, notwithstanding any other provision of this
Agreement or any other instrument, it will not make any investment or other use
of the proceeds of the Bond which, if such investment or use had been reasonably
expected on the date of issue of the Bond, would cause the Bond to be "arbitrage
bonds" under Section 148 of the Code and the regulations promulgated thereunder;
that it will comply with the requirements of such Section 148 and regulations
throughout the term of the Bond; and that it will not take or omit to take any
action over which it has control, which action or omission, as the case may be,
would impair the exclusion from gross income for federal income tax purposes of
the interest on the Bond.  The terms and provisions of the Tax
Agreement are hereby incorporated by reference.

     

    
      SECTION
10.3       Performance of
Covenants.

    

     

    The
Issuer covenants that it will faithfully perform at all times all covenants,
undertakings, stipulations and provisions contained in this Agreement, in the
Bond and in all proceedings of the Issuer pertaining thereto.

     

    
      SECTION
10.4       Priority of
Pledge.

    

     

    The
pledge herein made of certain payments made by the Borrower hereunder shall at
no time be impaired by the Issuer and such payments shall not otherwise be
pledged and no Persons shall have any rights with respect thereto except as
provided herein.

     

    
      SECTION
10.5       Rights Under
Agreement.

    

     

    The
Issuer and the Borrower agree that the Bank may, as owner of the Bond, in its
own name or to the extent permitted by law in the name of the Issuer, enforce
all rights of the Issuer and all obligations of the Borrower under and pursuant
to this Agreement (except the Reserved Rights of the Issuer, and the obligations
of the Borrower related thereto, that are not assigned for the benefit of the
Bank as specified in Section 10.6 hereof) for and on behalf of the Bank, whether
or not the Issuer is in default hereunder.

     

    
      SECTION
10.6       Assignment to Bank; Security
Agreement.

    

     

    (a)   As
security for the performance of the Issuer's obligations hereunder and with
respect to the Bond, the Issuer hereby pledges, assigns and conveys to the Bank,
and grants to the Bank a security 

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    interest
in, all right, title and interest of the Issuer in and to this Agreement, and
all sums payable in respect of the indebtedness of the Borrower evidenced
hereby, other than the Reserved Rights of the Issuer.  The Issuer
directs that all payments by the Borrower hereunder (except for payments to the
Issuer pursuant to Sections 8.2 or 15.6 hereof) be paid directly to the
Bank.  If, notwithstanding these arrangements, the Issuer shall
receive any such payments, the Issuer shall immediately pay over the same to the
Bank.

     

    (b)   The
Borrower consents to such assignment and, except as otherwise provided in
subsection (a) hereof, agrees to pay all amounts payable hereunder directly to
the Bank.

     

    
      SECTION
10.7       Instruments of Further
Assurance.

    

     

    The
Issuer covenants that it will do, execute, acknowledge and deliver or cause to
be done, executed, acknowledged and delivered, such agreements supplemental
hereto and such further acts, instruments and documents as the Bank may
reasonably require for the better assuring, transferring, conveying, pledging
and assigning to the Bank the rights assigned hereby for the payment of the
principal or redemption price of and interest on the Bond.

     

    
      SECTION
10.8       Continued Existence,
etc.

    

     

    The
Issuer agrees that it will do or cause to be done in a timely manner all things
necessary to preserve and keep in full force and effect its existence so long as
the Bond remains Outstanding and to carry out the terms of this
Agreement.

     

    
      SECTION
10.9       General Compliance with All
Duties.

    

     

    The
Issuer shall faithfully and punctually perform all duties, with respect to the
Project required by the Constitution and laws of the Commonwealth, and by the
terms and provisions of this Agreement.

     

    
      SECTION
10.10     Arbitrage Bond
Covenant

    

     

    The
Issuer hereby covenants to abide by the representations and agreements made by
the Issuer in the Tax Agreement, the terms and provisions of which are herein
incorporated by reference.

     

    
      SECTION
10.11     Enforcement of Duties and
Obligations of the Borrower.

    

     

    The
Issuer may, and at the written direction of the Bank shall, take any legally
available action to cause the Borrower to fully perform all duties and acts and
fully comply with the covenants of the Borrower imposed by this Agreement in the
manner and at the times provided therein.  So long as no Event of
Default hereunder shall have occurred and be continuing, the Issuer may exercise
all its rights under this Agreement, but the Issuer shall not, without the
consent of the Bank, amend any of the same so as to diminish the amounts payable
thereunder or otherwise so as to adversely affect the Issuer's or the Borrower's
ability to perform its covenants under this Agreement.

     

    
      SECTION
10.12     Inspection
of Books.

    

     

    The
Issuer covenants and agrees that all books and documents in its possession
relating to the Project and the Bond shall at all reasonable times be open to
inspection by such accountants or other agents as the Bank or the Borrower may
from time to time designate.

     

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    
       

      SECTION
10.13     Filing and
Recording.

    

     

    The
Issuer, as directed by the Bank, shall cause all documents, statements,
memoranda or other instruments to be registered, filed or recorded in such
manner and at such places as may be required by law fully to protect the
security of the Bank and the right, title and interest of the Bank in and to any
moneys or securities held hereunder or any part thereof (including any
refilings, continuation statements or such other documents as may be
required).

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
 

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

       

    

    ARTICLE
11.

    COVENANTS
OF THE BORROWER

     

    
      SECTION
11.1       Maintenance and Operation of
Project Facilities.

    

     

    The
Borrower shall cause the Project Facilities to be maintained in good condition,
subject to ordinary wear and tear.  This covenant shall not require
the Borrower to operate any portion of the Project Facilities after it is no
longer economic to do so.

     

    
      SECTION
11.2       Completion of
Project.

    

     

    No
funds of the Issuer, other than the proceeds of the sale of the Bond, shall be
available to pay any of the costs of the Project.  To the extent
amounts up to the principal amount of the Bond advanced by the Bank are
insufficient to complete the Project, the Borrower shall use its own funds to
complete the Project, and in such event the Borrower will not be entitled to any
reimbursement from the Issuer or the Bank, nor will it be entitled to any
diminution in or postponement of its payments hereunder.  The Borrower
hereby covenants that in the acquisition, construction, equipping, maintenance,
improvement and operation of the Project Facilities, the Borrower shall at all
times comply in all material respects with all applicable building, zoning and
land use, environmental protection, sanitary and safety and other laws, rules
and regulations and shall not permit a nuisance thereon; but it shall not be a
breach of this Section if the Borrower fails to comply with such laws, rules and
regulations during any period in which the Borrower shall in good faith be
diligently contesting the validity thereof but only so long as such contest does
not adversely affect the security for the Bond. Completion of the Project shall
be evidenced by the filing with the Bank and the Issuer of a certificate signed
by the Borrower stating that the Project has been substantially completed and
setting forth any costs of the Project then remaining to be paid.

     

    
      SECTION
11.3       Bond Not to Become
Taxable.

    

     

    The
Borrower hereby covenants to the Issuer and to the Bank that, notwithstanding
any other provision of this Agreement or any other instrument, it will not make
any investment or other use of the proceeds of the Bond which, if such
investment or use had been reasonably expected on the date of issue of the Bond,
would cause the Bond to fail to qualify as a “qualified small issue bond” as
defined in Section 144(a) of the Code or to be "arbitrage bond" under Section
148 of the Code and the regulations promulgated thereunder; that it will comply
with the requirements of Sections 103 and 141 through 150 of the Code and any
regulations applicable thereto throughout the term of the Bond; and that it will
not take or omit to take any action over which it has control, which action or
omission, as the case may be, would impair the exclusion from gross income for
federal income tax purposes of the interest on the Bond.  The terms
and provisions of the Tax Agreement are hereby incorporated by
reference.

     

    
      SECTION
11.4       Deficiencies in
Revenues.

    

     

    If
for any reason amounts paid by the Borrower hereunder would not be sufficient to
make payments of principal of and interest on the Bond when and as the same
shall become due and payable at maturity or otherwise, the Borrower will pay
promptly the amounts required from time to time to make up any such
deficiency.

     

    
      SECTION
11.5       Books and Records; Financial
Statements and Other Information.

    

     

    The
Borrower covenants that it shall keep proper books of record and account in
which full, true and correct entries will be made of all dealings or
transactions of or in relation to the business and financial 

     

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    affairs
of the Borrower, in accordance with GAAP.  The Bank and its duly
authorized agents shall have the right at all reasonable times to examine and
make copies of the books and records of the Borrower.  The Borrower
shall furnish to the Bank the following:

     

    (a)   Within
ninety (90) days after the last day of each fiscal year of the Borrower, the
Borrower shall furnish a copy of the annual audited consolidated and
consolidating financial statements of the Borrower prepared in accordance with
GAAP which shall be accompanied by an unqualified audit report of the Borrower's
independent  public accountants, who shall be reasonably acceptable to
the Bank, which report and opinion shall not be subject to any “going concern”
or like qualification or exception or any qualification or exception as to the
scope of the audit;

     

    (b)   Within
forty-five (45) days of the end of each fiscal quarter, the Borrower shall
furnish (i) a copy of the Borrower's unaudited consolidated and consolidating
financial statements for Borrower for such quarter and for the fiscal year to
date, including a balance sheet, income statement and statement of cash flows,
and (ii) a letter of the chief executive officer or chief financial officer of
the Borrower to the effect that, in the opinion of such officer (A) such
unaudited financial statements have been prepared in accordance with GAAP
applied on a basis consistent with the Borrower's annual financial statements
and reflect all eliminations and adjustments (consisting only of normal
recurring adjustments, except as noted in such letter) necessary for a fair
presentation of the Borrower's financial position and results of operation for
such quarter and the year to date;

     

    (c)   Together
with each annual or quarterly financial statements described in (a) and (b)
above (or, if applicable, as provided in (d) below), the Borrower shall furnish
a letter of the chief executive officer or chief financial officer of the
Borrower to the effect that to the best of his or her knowledge, no event has
occurred which constitutes or would, with the passage of time or the giving of
notice or both, constitute an Event of Default hereunder, or otherwise
describing any such event known to such chief financial officer, which letter
shall include, in reasonable detail, the calculations demonstrating the
compliance or non-compliance by the Borrower, as of the end of such quarter,
with each applicable financial covenants set forth in Section 11.16
hereof;

     

    (d)   Notwithstanding
the provisions of subsections (a) and (b) above, if and so long as the Borrower
is a reporting company subject to the obligation to file periodic financial and
other reports with the Securities and Exchange Commission (“SEC”) under section
13 of the Exchange Act, the Borrower shall furnish to the Bank the following, in
lieu of the financial information specified in subsections (a) and (b)
above:

     

    (i) as
soon as available, but in any event not later than the date provision thereof is
required by the SEC copies of each annual, quarterly and current report, and any
registration statement or prospectus, filed by the Borrower with the SEC;
and

     

    (ii) annually,
a report and opinion of the Borrower’s independent public accountants prepared
in accordance with generally accepted auditing standards and applicable
requirements of federal securities laws, which report and opinion shall not be
subject to any “going concern” or like qualification or exception or any
qualification or exception as to the scope of such audit and shall include an
attestation report as to the Borrower’s internal controls pursuant to Section
404 of Sarbanes-Oxley expressing no concern that would result in such firm’s
inability to issue a clean and unqualified audit opinion.

     

     

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    (e)   As
soon as practicable, but in any event within ten (10) days of such occurrence,
the Borrower shall furnish notice of any material adverse change in the business
or financial condition of the Borrower;

     

    (f)   As
soon as practicable, but in any event within ten (10) days of the time the
Borrower becomes aware thereof (or should have become so aware with the exercise
of reasonable diligence), the Borrower shall furnish notice of the institution
of (i) any inquiry or investigation, whether formal or informal, with respect to
Borrower’s compliance with the federal securities laws, or (ii) any material
adverse development with respect to, any suit or proceeding, against the
Borrower, which, in the case of either (i) or (ii), the Borrower is required by
the Exchange Act to disclose in its SEC Reports;

     

    (g)   As
soon as possible, but in any event within ten (10) days after the Borrower
becomes aware thereof (or should have become so aware with the exercise of
reasonable diligence), the Borrower shall furnish notice of the occurrence of
any Event of Default or any Taxable Event or of any act, omission, thing or
condition which upon the giving of notice or lapse of time, or both, would or
might constitute an Event of Default or Taxable Event, which notice shall
describe the Event of Default or Taxable Event or other act, omission, thing or
condition in question and shall set forth in detail what action the Borrower
proposes to take with respect thereto;

     

    (h)   As
soon as possible, but in any event no more than two (2) days after the closing,
notice of the occurrence of any Permitted Corporate Transaction in which the
purchase price exceeds five million dollars ($5,000,000) in the aggregate in any
one fiscal year of the Borrower, and

     

    (i)   Upon
request, or within a reasonable time thereafter, the Borrower shall furnish such
other information concerning the Borrower and its operations and financial
condition and results as the Bank or the Issuer may reasonably request, so long
such disclosure does not violate, in the opinion of Borrower’s counsel, the
requirements of the Securities Act or the Exchange Act, as the case may be,
regarding the disclosure of material non-public information.

     

    The
Issuer shall have the right to receive the statements referred to in this
Section upon its written request.

     

    
      SECTION
11.6       Compliance with Applicable
Laws.

    

     

    In
the acquisition, construction, equipping, maintenance, improvement and operation
of the Project Facilities, the Borrower shall comply in all material respects
with the requirements of all applicable building, zoning and land use,
environmental protection, sanitary, safety and other laws, rules, regulations
and orders of any governmental authority and shall not permit a nuisance
thereon, provided that it shall not be a breach of this Section if the Borrower
fails to comply with such laws, rules, regulations and orders during any period
in which the Borrower shall in good faith be diligently contesting the validity
or applicability thereof but only so long as such contest does not adversely
affect the security for the Bond.

     

     

     

     

     

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    
      SECTION
11.7       ERISA.

    

     

    The
Borrower shall comply in all material respects with all applicable provisions of
ERISA with respect to each employee benefit plan that is subject to Title IV of
ERISA as to which the Borrower has any liability, including minimum funding
requirements, and shall not (a) permit to occur any “prohibited transaction” (as
defined under ERISA) with respect to any such plan, (b) permit to occur any
“reportable event” (as defined under Section 4043 of ERISA) with respect to any
such plan which would cause the PBGC to institute proceedings under Section 4042
of ERISA, (c) withdraw from any such plan or initiate steps to do so, except in
compliance with ERISA, or (d) take any steps to terminate any such plan, except
in compliance with ERISA.

     

    
      SECTION
11.8       Corporate
Existence.

    

     

    The
Borrower covenants that it will preserve and maintain its existence as a
corporation under the laws of the Commonwealth of Pennsylvania.

     

    
      SECTION
11.9       Inspection.

    

     

    The
Borrower covenants that the Issuer, by its duly authorized representatives, and
the owner of the Bond at reasonable times, and for purposes of determining
compliance with this Agreement may inspect any part of the Borrower's
facilities.

     

    
      SECTION
11.10     Additional
Information.

    

     

    The
Borrower, whenever requested by the Issuer, will provide and certify or cause to
be provided and certified such information as the Issuer may reasonably require
concerning the Borrower, the finances of the Borrower and other topics as the
Issuer considers necessary to enable it to make any reports or supply any
information required by this Agreement, law, governmental regulation or
otherwise.

     

    
      SECTION
11.11     Payment of Taxes and
Impositions.

    

     

    The
Borrower shall pay or cause to be paid to the public officers charged with the
collection thereof, promptly as the same become due, all taxes (or contributions
or payments in lieu thereof), including but not limited to income, profits or
property taxes, which may now or hereafter be imposed by the United States of
America, any state or municipality or any political subdivision or subdivisions
thereof, and all assessments for public improvements or other assessments,
levies, license fees, charges for publicly supplied water or sewer services,
excises, franchises, imposts and charges, general and special, ordinary and
extraordinary (including interest, penalties and all costs resulting from
delayed payment of any of the foregoing) of whatever name, nature and kind and
whether or not now within the contemplation of the parties, hereto, which are
now or may hereafter be levied, assessed, charged or imposed or which are or may
become a lien upon the revenues of the Borrower, the Borrower's facilities, the
use or occupation thereof or upon the Borrower or the Issuer, or upon any
franchises, businesses, transactions, income, earnings and receipts (gross, net
or otherwise) of the Issuer in connection with this Agreement for payment or
collection of which the Issuer otherwise would be liable or accountable under
any lawful authority whatever; provided, however, that the Borrower shall not be
required to pay or discharge or cause to be paid or discharged any tax,
assessment, lien or other matter hereunder so long as the validity thereof is
being contested by the Borrower in good faith and by appropriate legal
proceedings diligently pursued and neither the Borrower's facilities nor any
rent or income therefrom would be in any immediate danger of being sold,
forfeited, attached or lost.  The Borrower will, upon request, provide
the Issuer and the Bank with copies of any tax returns and receipts for payments
of taxes.

     

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    
      SECTION
11.12     Insurance.

    

     

    (a)   The
Borrower shall (i) keep its property and business insured against fire and other
hazards (so-called “All Risk” coverage) in amounts not less than current amounts
and with companies reasonably satisfactory to the Bank, which policy shall name
the Bank as loss payee as its interest may appear, (ii) maintain public
liability coverage against claims for personal injuries, death or property
damage in an amount deemed reasonable by the Bank, which policy shall name the
Issuer and the Bank as additional insureds as their interests may appear, and
(iii) maintain all worker's compensation, employment or similar insurance as may
be required by applicable law.  The Bank acknowledges that the
Borrower’s current provider of such policy is satisfactory to the
Bank.  All such All-Risk property insurance shall contain an
endorsement identifying the Bank as lienholder and providing for a minimum of
thirty (30) days’ written cancellation notice to the Issuer and the
Bank.  The Borrower agrees to deliver copies of all of the aforesaid
insurance policies to the Issuer and the Bank.  In the event of any
loss or damage to the Collateral, the Borrower shall give immediate written
notice to the Bank and to its insurers of such loss or damage and shall properly
file its proofs of loss with said insurers.  The proceeds of such
insurance shall be paid to the Borrower and shall be applied by the Borrower as
follows:  (1) if the conditions described in the next sentence shall
be satisfied, such proceeds shall be applied by the Borrower to the repair,
restoration or replacement of the damaged property, or (2) if the conditions
described in the next sentence are not satisfied or to the extent that any such
proceeds remain after completion of any repair, restoration or replacement of
property under clause (1), such proceeds shall be applied to reduce the
principal balance of the Bond or, with the Bank’s written consent, to such other
purpose as the Borrower may request.  The conditions referred to in
the preceding sentence are as follows:  (i) no Event of Default shall
have occurred and then be continuing; (ii) the Project Facilities then shall be
operating profitably; (iii) the proceeds of such insurance shall be sufficient
to repair, restore or replace such damaged property to profitable operation
within a reasonable time; and (iv) if the condition in clause (iii) is not
satisfied, the Borrower’s shareholders promptly shall have contributed
additional equity to the Borrower in an amount which, together with such
insurance proceeds, shall be sufficient to repair, restore or replace such
damaged property to profitable operation within a reasonable time.

     

    (b)   The
Borrower shall maintain in full force and effect business interruption
insurance, in amounts not less than current amounts and with companies
reasonably satisfactory to the Bank, but in no event less than an amount
necessary to pay the fixed operating costs of the Borrower, including debt
service on the Bond for a period of one year.  The Bank acknowledges
that the Borrower’s current provider of such policy is satisfactory to the
Bank.  The Borrower shall provide the Bank with evidence satisfactory
to the Bank of the maintenance of such insurance within thirty (30) days of the
date of issuance and delivery of the Bond.

     

    (c)   The
provisions of this Section shall be in addition to any similar requirements set
forth in the Security Documents.

     

    
      SECTION
11.13     Further
Assurances; Financing Statements.

    

     

    The
Borrower shall perform or cause to be performed any such acts, and execute and
cause to be executed any and all further instruments as may be required by law
or as shall reasonably be requested by the Issuer or the Bank to carry out or
effect the terms of this Agreement.  The Borrower, if required by the
Bank, will join with the Issuer and the Bank in executing such financing
statements and other documents under the Uniform Commercial Code as in effect in
the Commonwealth or other applicable law as the Issuer or Bank may specify and
will pay the costs of filing the same in such public offices as the Issuer or
Bank shall designate, in order to preserve the security interests granted under
this Agreement or any other

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    Borrower
Financing Document.  For purposes of carrying out this provision, the
Borrower hereby grants to the Bank an irrevocable power of attorney to execute
on its behalf and to file in all appropriate jurisdictions such instruments as
shall be required, in the judgment of the Bank, to evidence, perfect or preserve
any lien or security interest in favor of the Bank granted in this Agreement or
in any other Borrower Financing Document.

     

    
      SECTION
11.14     Use of
Project.

    

     

    The
Borrower shall use or cause the Project to be used as an authorized project for
a purpose and use as provided for under the Act and for the use set forth in the
Application until payment of the Bond.

     

    
      SECTION
11.15     Additional Negative
Covenants.

    

     

    So
long as the Bond is outstanding, the Borrower shall not, without the written
consent of the Bank:

     

    (a)   Corporate
Transactions.  Except for Permitted Corporate Transactions, (1)
merge or consolidate with any other corporation, partnership, trust or other
entity, (2) sell, lease, transfer or otherwise dispose of all or any material
portion of its assets in the aggregate other than in the ordinary course of
business, (3) directly or through any entity consolidated with the Borrower for
financial reporting purposes, purchase any assets other than in the ordinary
course of business, or (4) acquire any equity interest in any other corporation,
partnership, trust or other entity.  The term “material portion” as
used in the foregoing sentence shall mean the sale, lease, transfer or disposal
of an asset or group of assets for more than five million dollars ($5,000,000)
in any one transaction.

     

    (b)   Nature of
Business.  Make any material change in the nature of its
business as conducted at the date hereof.  Notwithstanding the
forgoing, a Permitted Transaction shall not be deemed
a   material change in the nature of the Borrower’s
business.

     

    (c)   Subordinated
Indebtedness.  The Borrower shall not permit any Lien to exist
on the Collateral other than a Subordinated Lien, provided, however, that at the
time any Subordinated Lien is created (a) no Event of Default hereunder shall
have occurred and then be continuing, (b) the Borrower shall have provided
reasonable prior notice to the Bank regarding the proposed terms of such
Subordinated Lien in excess of $100,000, (c) such Subordinated Lien does not
cause the Borrower to violate the Financial Covenants listed on Schedule 11.16
and (d) the subordinated lender(s) and the Bank shall enter into a subordination
agreement on terms reasonably satisfactory to the Bank.

     

    (d)   Encumbrances.  The
Borrower shall not create, incur, assume or suffer to exist any Lien with
respect to any of its Current Assets unless the Borrower shall have first
provided to the Bank a first priority and perfected secur­ity interest in
the Borrower’s Current Assets as additional Collateral with respect to its
obligations hereunder.  Notwithstanding the foregoing, Borrower may
create, incur, assume or suffer to exist a Lien with respect to any of the
Current Assets acquired in a Permitted Corporate Transaction to the extent such
Lien secures amounts due in respect of any outstanding Debt assumed by the
Borrower in connection with such Permitted Corporate Transaction.

     

    (e)   Transactions with Partners
and Affiliates.  Directly or indirectly, engage in any
transaction with (a) any holder of 5% or more of the equity of the Borrower, or
(b) any corporation or other entity controlling, controlled by, or under common
control with the Borrower or any such holder, on terms that the Exchange Act
requires the Borrower to disclose in its SEC Reports.

     

    (f)   Fiscal
Year.  Change its fiscal year.

     

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

    (g)   Change in Organizational
Documents.  Amend, or consent to, any amendment or supplement
to, their articles or certificate of incorporation, bylaws or other organization
document in any manner which would affect the Bank’s security for the Bond or
the Borrower’s compliance with the provisions of this Agreement, provided that
the Borrower shall provide to the Bank, promptly upon its adoption or
effectiveness, a copy of any such amendment or supplement with respect to which
the Bank’s consent is not required hereunder.

     

    
      SECTION
11.16     Financial
Covenants.

    

     

    Financial
Covenants are as listed on Schedule 11.16.

     

    
      SECTION
11.17     Federal Reserve
Regulations.

    

     

    No
proceeds of the Bond shall be used by the Borrower, directly or indirectly to
purchase or carry any margin stock or to extend credit to others for the purpose
of purchasing or carrying any margin stock.  The Borrower will not,
directly or indirectly, otherwise take or permit to be taken any action which
would result in the issuance of the Bond or the carrying out of any of the other
transactions contemplated by this Agreement, being violative of such Regulation
U or of Regulation T (12 C.F.R. 220, as amended) or of Regulation X (12 C.F.R.
224, as amended) or any other regulation of the Board of Governors of the
Federal Reserve System.

     

    
      SECTION
11.18     Nondiscrimination
Clause.

    

     

    During
the term of this Agreement, the Borrower agrees, as to itself and as to each
occupant of the Project Facilities controlling, controlled by or under common
control with the Borrower (each, a "Contractor") as follows:

     

    (a)   In
the hiring of any employee(s) for the manufacture of supplies, performance of
work, or any other activity required under the contract or any subcontract, the
Contractor, subcontractor, or any person acting on behalf of the Contractor or
subcontractor shall not, by reason of gender, race, creed, or color,
discriminate against any citizen of this Commonwealth who is qualified and
available to perform the work to which the employment relates.

     

    (b)   Neither
the Contractor nor any subcontractor nor any person on their behalf shall in any
manner discriminate against or intimidate any employee involved in the
manufacture of supplies, the performance of work, or any other activity required
under the contract on account of gender, race, creed, or color.

     

    (c)   Contractors
and subcontractors shall establish and maintain a written sexual harassment
policy and shall inform their employees of the policy.  The policy
must contain a notice that sexual harassment will not be tolerated and employees
who practice it will be disciplined.

     

    (d)   Contractors
shall not discriminate by reason of gender, race, creed, or color against any
subcontractor or supplier who is qualified to perform the work to which the
contracts relates.

     

    (e)   The
Contractor and each subcontractor shall furnish all necessary employment
documents and records to and permit access to their books, records, and accounts
by the contracting agency and the Bureau of Contract Administration and Business
Development, for purposes of investigation, to ascertain compliance with
provisions of this Nondiscrimination/Sexual Harassment Clause.  If the
Contractor or any subcontractor does not possess documents or records reflecting
the

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    necessary
information requested, the Contractor or subcontractor shall furnish such
information on reporting forms supplied by the contracting agency or the Bureau
of Contract Administration and Business Development.

     

    (f)   The
Contractor shall include the provisions of this Nondiscrimination/ Sexual
Harassment Clause in every subcontract so that such provisions will be binding
upon each subcontractor.

     

    (g)   The
Commonwealth may cancel or terminate the contract, and all money due or to
become due under the contract may be forfeited for a violation of the terms and
conditions of this Nondiscrimination/Sexual Harassment Clause.  In
addition, the agency may proceed with debarment or suspension and may place the
Contractor in the Contractor Responsibility File.

     

    (h)   The
Issuer’s rights under this Section 11.18 shall not be assigned, whether to
the Bank or otherwise, notwithstanding anything to the contrary
herein.

     

    (i)   The
Issuer acknowledges that the acknowledgement of Paul F. Detweiler & Sons
Inc. dated September 15, 2005 satisfies the foregoing requirements with respect
to such contractor.

     

    
      SECTION
11.19     Security
Documents.

    

     

    The
Borrower acknowledges and agrees that the payment obligations of the Borrower
with respect to the Bond are secured as provided in the Security
Documents.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
 

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

       

    

    ARTICLE
12.

    LIMITED
OBLIGATION

     

     

    
      SECTION
12.1       Source of
Payment of the Bond.

    

     

    The
Bond and all payments by the Issuer thereunder are not general obligations of
the Issuer but are limited obligations payable by the Issuer solely from the
revenues and receipts derived by the Issuer pursuant to this
Agreement.  The Bond and the interest thereon shall not be deemed to
constitute a debt, liability, general obligation or a pledge of the faith and
credit or the taxing power of the Commonwealth or any political subdivision
thereof, and do not directly, indirectly or contingently obligate the
Commonwealth or any political subdivision thereof to levy or to pledge any form
of taxation whatever for the payment of said principal and
interest.  Any liability of any kind whatsoever incurred by the Issuer
under or by reason of this Agreement shall be payable solely from the proceeds
of the Bond and from revenues to be received by the Issuer under the provisions
of this Agreement and not from any other fund or source.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
 

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

       

    

    ARTICLE
13.

    EVENTS
OF DEFAULT AND REMEDIES

     

     

    
      SECTION
13.1       Events of
Default.

    

     

    Each
of the following shall be an "Event of Default" under this
Agreement:

     

    (a)   Failure
to pay any interest on the Bond prior to the tenth Business Day following any
Interest Payment Date; or failure to pay any principal or redemption price of
the Bond when due, whether by redemption or at the stated maturity thereof, by
acceleration or otherwise; or

     

    (b)   Failure
to perform or observe any other of the covenants, agreements or conditions on
the part of the Issuer or the Borrower contained in this Agreement including,
without limitation, the failure of the Borrower to observe its covenants
contained in Section 15.6 hereunder; provided, however, that if such failure
shall be curable, no such failure shall constitute an Event of Default hereunder
unless and until the Borrower shall have become aware of such failure (or should
have become so aware with the exercise of reasonable diligence) and shall not
have cured such failure within forty-five (45) days; or

     

    (c)   The
occurrence of any default under any Security Document; or

     

    (d)   The
Borrower or the Issuer shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself or
its debts under any bankruptcy, insolvency or other similar law now or hereafter
in effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of its
property, or shall consent to any such relief or to the appointment of or taking
position by any such official in an involuntary case or other proceeding
commenced against it, or shall make a general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they become due, or shall
take any corporate action to authorize any of the foregoing; or

     

    (e)   An
involuntary case or other proceeding shall be commenced against the Borrower or
the Issuer seeking liquidation, reorganization or other relief with respect to
it or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of sixty (60) days; or an order for relief
shall be entered against the Borrower or the Issuer under the Federal bankruptcy
laws as now or hereafter in effect; or

     

    (f)   The
occurrence of any Change of Control, unless the Bank has consented in writing to
such Change of Control; or

     

    (g)   If
the Borrower shall fail to pay any Credit Obligation when due, whether such
Credit Obligation shall become due by scheduled maturity, by required
prepayment, by acceleration, by demand or otherwise, or the Borrower shall fail
to perform any term, covenant or agreement on its part to be performed under any
agreement or instrument evidencing or securing or relating to any such Credit
Obligation when required to be performed, if the effect of such failure is to
accelerate, or to permit the holder or holders of such Credit Obligation to
accelerate, the maturity of such Credit Obligation, whether or not such failure
to perform shall be waived by the holder or holders of such Credit Obligation,
unless such waiver has the effect of terminating the right of such holder or
holders to accelerate the maturity of such Credit Obligation as a result of such
failure; or

     

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

    (h)   If
any default shall occur with respect to any other indebtedness of the Borrower
to the Bank; or

     

    (i)   If
any representation or warranty by or on behalf of the Borrower made herein or in
any report, certificate, financial statement or other instrument, including the
Application, shall prove to be false or misleading in any material respect when
made.

     

    
      SECTION
13.2       Acceleration.

    

     

    If
any Event of Default under clause (d) or (e) of Section 13.1 occurs, then the
principal of the Bond then Outstanding, together with interest accrued thereon,
shall become due and payable immediately without notice or
demand.  Upon the occurrence of any Event of Default under Section
13.1 other than an Event of Default under clause (d) or (e), the Bank may, by
notice in writing delivered to the Issuer and the Borrower, declare the
principal of the Bond and the interest accrued thereon to the date of such
acceleration immediately due and payable, and the same shall thereupon become
and be immediately due and payable.  Upon any acceleration of the Bond
under this Section 13.2, the all amounts payable under Section 6.1(g) and 8.1
hereof shall be immediately due and payable.

     

    
      SECTION
13.3       Legal
Proceedings by Bank.

    

     

    Upon
the occurrence of any Event of Default under Section 13.1 hereof, the Bank
may:

     

    (a)   by
mandamus, or other suit, action or proceeding at law or in equity, enforce all
of its rights as owner of the Bond, and require the Borrower to carry out any
other agreements with or for the benefit of the owner of the Bond;

     

    (b)   bring
suit upon the Bond;

     

    (c)   by
action or suit in law or equity enjoin any acts or things which may be unlawful
or in violation of the rights of the owner of the Bond; or

     

    (d)   take
or cause to be taken any action available under applicable law as the
beneficiary of the liens and security interests and other rights created under
the Security Documents.

     

    No
remedy conferred upon or reserved to the Bank is intended to be exclusive of any
other remedy, but each and every such remedy shall be cumulative and shall be in
addition to any other remedy given to the Bank hereunder or now or hereafter
existing at law, in equity or by statute.  Nothing herein contained
shall affect or impair the right of action, which is absolute and unconditional,
of the owner of the Bond to institute suits to enforce payment
thereof.

     

    No
delay or omission to exercise any right or power accruing upon any Event of
Default shall impair any such right or power or shall be construed to be a
waiver of any such Event of Default or acquiescence therein; and every such
right and power may be exercised from time to time and as often as may be deemed
expedient.

     

    No
waiver of any Event of Default hereunder shall extend to or shall affect any
subsequent Event of Default or shall impair any rights or remedies consequent
thereon.

     

     

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

     

    
      SECTION
13.4       Application
of Moneys.

    

     

    All
moneys received by the owner of the Bond upon the exercise of any remedies
provided in Section 13.3 hereof shall be applied ratably to the payment of the
principal, redemption price and interest then due and unpaid upon the Bond
(together with interest on overdue installments of principal and, to the extent
permitted by law, on any overdue interest, at the rate per annum specified in
the Bond for such overdue installments).

     

    
      SECTION
13.5       Termination
of Proceedings.

    

     

    In
case the Bank shall have proceeded to enforce any right under this Agreement,
and such proceedings shall have been discontinued or abandoned for any reason,
or shall have been determined adversely, then and in every such case the Issuer,
the Bank and the Borrower shall be restored to their former positions and rights
hereunder, and all rights, remedies and powers of the Bank shall continue as if
no such proceedings had been taken.

     

    
      SECTION
13.6       Waivers
of Events of Default; Rescission of Declaration of
Maturity.

    

     

    The
Bank may waive any Event of Default under the Agreement and its consequences, or
rescind any declaration of maturity of principal of the Bond.  In case
of any such waiver or rescission, then and in every such case the Issuer, the
Borrower and the Bank, respectively, shall be restored to their former positions
and rights under the Agreement, but no such waiver or rescission shall extend to
any subsequent or other default, or impair any right consequent
thereon.  All waivers under this Agreement shall be in writing and a
copy of each waiver affecting the Bond shall be delivered to the Issuer and the
Borrower.

     

    
      SECTION
13.7       Notice of
Defaults; Opportunity of the Borrower to Cure
Defaults.

    

     

    Anything
herein to the contrary notwithstanding, no default specified in Section 13.1(b)
or 13.1(h) shall constitute an Event of Default until notice of such default
shall have been received by the Borrower and, if such default shall be curable,
the Borrower shall have had thirty days after receipt of such notice to correct
said default or cause said default to be corrected, and shall not have corrected
said default or caused said default to be corrected within the applicable
period.

     

    
      SECTION
13.8       Additional
Remedies.

    

     

    In
addition to the above remedies, if the Borrower commits a breach, or threatens
to commit a breach of this Agreement, or of any other document executed in
connection therewith, the Issuer shall have the right and remedy, without
posting bond or other security, to have the provisions of this Agreement
specifically enforced by any court having equity jurisdiction, it being
acknowledged and agreed that any such breach or threatened breach may cause
immediate and irreparable injury to the Issuer for which money damages may not
provide an adequate remedy.

     

     

     

    
 

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

       

    

    ARTICLE
14.

    AMENDMENTS
TO AGREEMENT

     

    
      SECTION
14.1       Amendments to
Agreement.

    

     

    This
Agreement may be amended only by the written agreement of the Issuer, the
Borrower and the Bank, except that any of the covenants and agreements of the
Borrower set forth in Sections 11.5 (except with respect to reports or notices
required to be delivered to the Issuer), 11.12, 11.15 and 11.16 hereof may be
amended by the Borrower and the Bank, without the consent of the Issuer;
provided, however, that prompt written notice of any such amendment shall be
provided to the Issuer.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
 

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

     

    ARTICLE
15.

    MISCELLANEOUS

     

     

    
      SECTION
15.1       Limitation of
Rights.

    

     

    With
the exception of rights herein expressly conferred, nothing expressed or
mentioned in or to be implied from this Agreement, or the Bond, is intended or
shall be construed to give to any Person, other than the Issuer, the Borrower
and the Bank, any legal or equitable right, remedy or claim under or in respect
to this Agreement or any covenants, conditions and provisions herein contained;
this Agreement and all of the covenants, conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of the Issuer, the
Borrower and the Bank as herein provided.

     

    
      SECTION
15.2       Severability.

    

     

    If
any provision of this Agreement shall be held or deemed to be or shall, in fact,
be inoperative or unenforceable as applied in any particular case in any
jurisdiction or jurisdictions or in all jurisdictions, or in all cases, because
it conflicts with any other provision or provisions hereof or any Constitution
or statute or rule of public policy, or for any other reason, such circumstances
shall not have the effect of rendering the provision in question inoperative or
unenforceable in any other case or circumstance, or of rendering any other
provision or provisions herein contained invalid, inoperative, or unenforceable
to any extent whatever.

     

    The
invalidity of any one or more phrases, sentences, clauses or Sections in this
Agreement contained, shall not affect the remaining portions of this Agreement,
or any part thereof.

     

    
      SECTION
15.3       Notices.

    

     

    All
notices and directions to any party to this Agreement shall be in writing or
sent electronically, and, except as otherwise provided, shall be deemed to be
sufficiently given if sent registered or certified mail, by facsimile, by e-mail
(with receipt confirmed), by overnight national courier service with charges
prepaid, or by delivery during business hours to the parties, at the following
addresses:

     

    Borrower:

     

    Met-Pro
Corporation

    160
Cassell Road

    P.O.
Box 144

    Harleysville,
Pennsylvania 19438

    Attention:  Gary
Morgan

    Title:
Chief Financial Officer

    Fax:
215-723-6226

    E-mail:  gmorgan@met-pro.com

     

    Issuer:

     

    Perkasie
Borough Industrial Development Authority

    c/o
Fox Rothschild LLP

    1250
South Broad Street

    Suite
1000

    P.O.
Box 431

    Lansdale,
PA 19446

     

    
       

      
        
          
          

        

        
          40

          
            

          

        

        
          
          

        

      

       

       

      Attention:  Robert
A. Walper, Esq.

      Fax:  215-699-0231

      E-mail:
rwalper@foxrothschild.com

       

    

    Bank:

     

    Brown
Brothers Harriman & Co.

    1531
Walnut Street

    Philadelphia,
Pennsylvania 19102

    Attention:
Donald H. Roberts, Jr.

    Title:
Senior Vice President

    Fax:
215-864-3989

    E-Mail:  Don.Roberts@bbh.com

     

    or
to such other address as the addressee shall have indicated by prior notice to
the one giving the notice or direction in question.  Any notice
required to be sent to the owner of the Bond shall be sent to such Bank at the
address as shown on the registration books maintained by the Borrower with
respect to the Bond.

     

    
      SECTION
15.4       Acts of Owner of the
Bond.

    

     

    Any
action to be taken by the Bank, as the owner of the Bond may be evidenced by a
written instrument signed or executed by the Bank in person or by an agent
appointed in writing.  The fact and date of the execution by any
Person of any such instrument may be proved by acknowledgment before a notary
public or other officer empowered to take acknowledgments or by an affidavit of
a witness to such execution.  Any action by the owner of the Bond
shall bind any future owner of the Bond.

     

    
      SECTION
15.5       Exculpation of
Issuer.

    

     

    (a) In
the exercise of the power of the Issuer and its members, officers, employees and
agents hereunder, including (without limiting the foregoing) the application of
moneys and any action taken by it in the Event of Default by the Borrower,
neither the Issuer nor its members, officers, employees, or agents shall be
accountable to the Borrower or the Bank for any action taken or omitted by it or
its members, officers, employees and agents in good faith.  The Issuer
and its members, officers, employees, or agents shall be protected in its or
their acting upon any paper or document believed by it or them to be genuine,
and it or they may conclusively rely upon the advice of Counsel (who may also be
Counsel for the Borrower or the Bank) and may (but need not) require further
evidence of any fact or matter before taking any action.

     

    (b) All
covenants, stipulations, promises, agreements and obligations of the Issuer
contained in this Agreement, the Bond or any agreement, instrument or
certificate entered into or delivered by the Issuer in connection therewith
shall be deemed to be the covenants, stipulations, promises, agreements and
obligations of the Issuer and not of any member, officer, employee or agent of
the Issuer in an individual capacity, and no recourse shall be had for the
payment of the Bond or for any claim based thereon or under this Agreement or
any agreement, instrument or certificate entered into by the Issuer in
connection therewith against any member, officer, employee or agent in an
individual capacity.

     

     

     

     

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

     

    
      SECTION
15.6       Indemnification Concerning
the Project; Accuracy of Application and

      Information in Connection
Therewith.

    

     

    (a)   The
Borrower covenants and agrees, at its expense, to pay and to indemnify and save
the Indemnified Parties harmless of, from and against, any and all claims,
damages, demands, expenses, liabilities, and losses of every kind, character and
nature asserted by or on behalf of any Person arising out of, resulting from or
in any way connected with the condition, use, possession, conduct, management,
planning, design, acquisition, construction, installation, financing or sale of,
the Project, or any part thereof, except for any claim, damage, demand, expense,
liability or loss arising out of the Indemnified Parties' own gross negligence
or willful misconduct.

     

    (b)   The
Borrower agrees to indemnify and hold harmless the Indemnified Parties against
any and all losses, claims, damages or liabilities caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Application and pertaining to the Borrower or the Project or in information
submitted to the Issuer or the Bank by the Borrower with respect to the issuance
and purchase of the Bond in the Application or otherwise (the "Borrower
Information") or caused by any omission or alleged omission of any material fact
necessary to be stated in the Borrower Information in order to make such
statements in the Application and pertaining to the Borrower Information not
misleading or incomplete.  The Borrower shall not, however, indemnify
the Issuer or the Bank against claims based upon the bad faith, fraud or deceit
of an Indemnified Party or due to an Indemnified Party's gross negligence or
willful misconduct.

     

    (c)   In
case any action shall be brought against the Indemnified Parties based upon any
of the above and in respect to which indemnity may be sought against the
Borrower, the party involved may request in writing that the Borrower assume the
defense thereof, including the employment of Counsel satisfactory to such party,
the payment of all reasonable costs and expenses and the right to negotiate and
consent to settlement.  Any one or more of the Indemnified Parties
shall have the right to employ separate Counsel in any such action, to
participate in defense thereof and the Borrower shall assume the payment of all
reasonable costs and expenses with respect thereto.  The Borrower
shall not be liable for any settlement of any such action effected without its
consent, but if settled with the consent of the Borrower or if there be a final
judgment for the plaintiff in any such action, the Borrower agrees to indemnify
and hold harmless the Indemnified Parties from and against any loss or liability
by reason of such settlement or judgment.

     

    (d)   Any
provision herein or elsewhere to the contrary notwithstanding, this Section 15.6
shall survive the termination of this Agreement.

     

    (e)    The
Borrower will reimburse the Issuer for the reasonable costs and expenses
(including reasonable attorneys fees and expenses) of any action taken by the
Issuer in connection with any Event of Default by the Borrower.

     

    
      SECTION
15.7       Counterparts.

    

     

    This
Agreement may be simultaneously executed in several counterparts, each of which
shall be an original and all of which shall constitute but one and the same
instrument.

     

     

     

     

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

     

     

    
      SECTION
15.8       No Personal
Recourse.

    

     

    No
recourse shall be had for any claim based on the Agreement or the Bond against
any member, officer or employee, past, present or future, of the Issuer or of
any successor body as such, either directly or through the Issuer or any such
successor body, under any constitutional provision, statute or rule of law or by
the enforcement of any assessment or penalty or by any legal or equitable
proceeding or otherwise.  No covenant, stipulation, obligation or
agreement of the Issuer contained in this Agreement shall be deemed to be a
covenant, stipulation, obligation or agreement of any present or future officer,
employee or agent of the Issuer in his individual capacity, and any officer,
employee or agent of the Issuer executing the Bond shall not be liable
personally thereon or be subject to any personal liability or accountability by
reason of the issuance thereof.

     

    
      SECTION
15.9       Payment of
Expenses.

    

     

    The
Borrower (1) will reimburse the Bank on demand for the reasonable costs and
expenses of the Bank in connection with the preparation, execution, issuance and
delivery of this Agreement, the Bond, the Tax Agreement, the Security Documents
and the other instruments and documents to be delivered hereunder (including the
reasonable fees and out-of-pocket expenses of Counsel with respect thereto) as
presented to the Borrower at the closing and (2) will reimburse the Bank on
demand for the reasonable costs and expenses, if any, of the Bank in connection
with the enforcement of this Agreement and the Bond (including the reasonable
fees and out-of-pocket expenses of Counsel with respect thereto).

     

    
      SECTION
15.10     Termination.

    

     

    Upon
the payment in full of the principal of and interest and premium, if any, due on
the Bond at maturity, or the earlier payment of the redemption price of the Bond
then Outstanding (provided that in the case of payment of the redemption price
of the Bond, the Bond shall have been redeemed and cancelled on the books of the
Borrower), and the payment of, or provision for all other amounts (including
expense reimbursements and indemnity payments) due hereunder to the satisfaction
of the Issuer, this Agreement and the parties obligations hereunder shall
terminate, except for the obligations of the Borrower pursuant to Section 15.6
and Section 15.9, which shall survive the termination of this
Agreement.

     

    
      SECTION
15.11     Judicial
Proceedings.

    

     

    (a)   The
Borrower consents and agrees that any judicial proceedings relating in any way
to this Agreement may be brought in any court of competent jurisdiction in the
Commonwealth of Pennsylvania or in the United States District Court for the
Eastern District of Pennsylvania.  The Borrower hereby accepts, for
itself and its properties, the non-exclusive jurisdiction of such courts, agrees
to be bound by any judgments rendered by them in connection with this Agreement,
and will not move to transfer any such proceeding to any different
court.  The Borrower waives the defense of forum non conveniens
in any such action or proceeding.

     

    (b)   Service
of process in any proceeding arising out of or relating to this Agreement may be
made by any means permitted by the applicable rules of court as then in force,
or may be made by any form of mail requiring a signed receipt.

     

    (c)   Nothing
herein shall limit the right of the Bank to bring proceedings against the
Borrower in the courts of any other jurisdiction or be deemed to constitute a
consent to jurisdiction by 

     

     

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

     

     

    any
party hereto as to Persons not parties to this Agreement or as to matters not
relating to this Agreement.

     

    (d)   THE
BORROWER HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY SUIT,
ACTION OR PROCEEDING.  THE BORROWER FURTHER ACKNOWLEDGES AND AGREES
THAT WAIVER OF JURY TRIAL IS A SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT
AND THAT THE BANK WOULD NOT HAVE AGREED TO MAKE THE LOAN OR ACCEPT THIS
AGREEMENT OR THE BOND WITHOUT SUCH AGREEMENT.

     

    
      SECTION
15.12     Authorization of Agreement;
Agreement to Constitute Contract.

    

     

    This
Agreement is entered into pursuant to the Act and the Resolution and the
provisions of this Agreement shall be deemed to be and shall constitute a
contract among the Issuer, the Borrower and the Bank.

     

    

     

    (Signature
Page Follows)

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

     

     

    IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by
their respective officers thereunto duly authorized all as of the date first
above written.

     

    
      	 	PERKASIE BOROUGH
      INDUSTRIAL
	 	DEVELOPMENT
      AUTHORITY
	 	 	 
	 	 	 
	 	 	 
	 	
              By:

            	/s/ Patrick
      Egan
	 	 	    Name:
      Patrick Egan
	 	 	    Title:
	 	 	 
	 	MET-PRO
      CORPORATION
	 	 	 
	 	 	 
	 	 	 
	 	By:	/s/ Raymond J. De
      Hont
	 	 	    Name:
      Raymond J. De Hont
	 	 	    Title:   
      President
	 	 	 
	 	 	 
	 	BROWN BROTHERS
      HARRIMAN & CO.
	 	 	 
	 	 	 
	 	
              By:

            	/s/ Donald H.
      Roberts, Jr.
	 	 	    Donald
      H. Roberts, Jr.
	 	 	    Senior
      Vice President

    

     

     

     

     

     

     

     

     

     

     

     

     

    

     

     

     

     

    
 

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

       

    

    EXHIBIT
"A"

    [FORM
OF BOND]

    

    PERKASIE
BOROUGH INDUSTRIAL DEVELOPMENT AUTHORITY

    Economic
Development Revenue Bond

    (Met-Pro
Corporation Project)

    Series
2005

     

    
    

     

    
      	No. R-	$4,000,000

    

     

     

    PERKASIE
BOROUGH INDUSTRIAL DEVELOPMENT AUTHORITY (the "Issuer"), a body corporate and
politic and a public instrumentality of the Commonwealth of Pennsylvania (the
"Commonwealth"), for value received, hereby promises to pay (but only from the
special revenues and funds hereinafter described) to BROWN BROTHERS HARRIMAN
&  CO., or its registered assigns (the "Bank"), on April 6, 2021,
upon the presentation and surrender hereof at the principal office of the
Borrower herein described, the principal sum of FOUR MILLION DOLLARS
($4,000,000), or such lesser amount as shall represent the principal amount
hereof advanced in accordance with Section 7.3 of the Agreement (hereinafter
defined), and to pay (but only out of the sources hereinafter mentioned)
interest on said principal sum at the interest rate hereinafter
de­scribed.  Payment of the principal of and interest on this Bond
shall be in any coin or currency of the United States of America as, at the
respective times of pay­ment, shall be legal tender for the payment of
public and private debts.

     

    THIS
BOND IS A LIMITED OBLIGATION OF THE ISSUER AND IS PAYABLE SOLELY OUT OF AMOUNTS
HELD UNDER THE AGREEMENT (HEREAFTER DESCRIBED) AND AMOUNTS TO BE DERIVED FROM
THE AGREEMENT AND IS SECURED AS SET FORTH IN THE AGREEMENT.  THIS BOND
AND THE INTEREST HEREON SHALL NOT BE DEEMED TO CONSTITUTE A DEBT, LIABILITY,
GENERAL OBLIGATION OR A PLEDGE OF THE FAITH AND CREDIT OR THE TAXING POWER OF
THE COMMONWEALTH OF PENNSYLVANIA OR ANY POLITICAL SUBDIVISION
THEREOF.  NEITHER THE COMMONWEALTH OF PENNSYLVANIA NOR ANY POLITICAL
SUBDIVISION THEREOF NOR THE ISSUER SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF
THIS BOND, THE INTEREST HEREON OR OTHER COSTS INCIDENT HERETO EXCEPT FROM THE
REVENUES AND FUNDS PLEDGED THEREFOR, AND NEITHER THE FAITH AND CREDIT NOR THE
TAXING POWER OF THE COMMONWEALTH OF PENNSYLVANIA OR ANY POLITICAL SUBDIVISION
THEREOF IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF THIS BOND OR THE INTEREST
HEREON OR OTHER COSTS INCIDENT THERETO.

     

    The
Agreement and all rights of the Issuer thereunder (except for certain Reserved
Rights of the Issuer) has been assigned to the owner of this Bond to secure
payment of such principal and interest.

     

    This
Bond is one of a duly authorized issue of economic development bonds of the
Issuer issued in the original aggregate principal amount of $4,000,000
designated as Perkasie Borough Industrial Development Authority Economic
Development Revenue Bond (Met-Pro Corporation Project), Series 2005 (the
"Bond"), issued under and pursuant to the constitution and laws of the
Commonwealth, including particularly the Pennsylvania Industrial Development
Financing Law (formerly the Industrial and Commercial Development Law), Act of
1957, as amended (the "Act"), and the Financing Agreement (the "Agreement")
dated December 30, 2005 among the Issuer, Met-Pro Corporation, a Pennsylvania
corporation (the "Borrower"), and Brown Brothers Harriman & Co. (the "Bank")
for the purpose of undertaking the Project more fully described in the
Agreement.  The Issuer has assigned certain of its rights under the
Agreement, including its right to receive loan payments from the Borrower
thereunder, to the owner of this 

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    Bond
to secure the Issuer's obligations with respect to this Bond.  As
security for the payment by the Borrower of its obligations under the Agreement,
the Borrower has granted to the Bank as the owner of this Bond and the assignee
of the Issuer's rights under the Agreement (i) a security interest in certain
property of the Borrower pursuant to a Security Agreement dated December 30,
2005, and (ii) a mortgage lien on certain real property of the Borrower pursuant
to an Open-End Mortgage and Security Agreement dated December 30,
2005.  Reference is made to the Agreement for a description, inter alia,
of the provisions with respect to the nature and extent of the security for this
Bond, the rights, duties, obligations and immunities of the Issuer, the
Borrower, and the Bank of this Bond and the terms upon which this Bond is or may
be issued or secured and transferred.

     

    The
Bond shall be issued in one denomination equal to the entire principal amount
hereof.  All payments of principal by the Issuer whether pursuant to
optional or mandatory redemption or prepayment or otherwise shall be made
directly to the Bank.

     

    INTEREST
RATE PROVISIONS

     

    Tax-Exempt
Rate.  The rate of interest on this Bond shall be a floating
rate equal to the greater of (i) the LIBOR Rate less the LIBOR Adjustment and
(ii) 2.50%.

     

    As
used herein, the following terms are defined as follows:

     

    “LIBOR
Adjustment” means (i) 0.16% (16 basis points), or (ii) if at any time the
Borrower shall have delivered to the Bank a Letter of Credit in accordance with
Section 6.1(c) of the Agreement, and so long as any such Letter of Credit shall
be in effect, 0.66% (66 basis points).

     

    "LIBOR
Rate" means the three-month London Inter-Bank Offered Rate (USD-LIBOR-BBA)
determined as of the opening of business on each Interest Payment Date, in each
case by reference to market reporting services available to banks and financial
institutions, by the Bank.

     

    Tax
Indemnification.  If at any time, either: (a) in the opinion of
counsel for the Bank, any payment of interest or principal or any amount in
respect of or measured in whole or in part by reference to interest on or
principal of this Bond, shall be subject to a preference tax (meaning a tax
imposed by Sections 55-58 of the Code, or any successor sections thereto or any
similar federal tax preferences or similar items), excess profits tax or other
federal tax on a basis other than as existing on the date of original issuance
hereof; or (b) there shall occur any material decrease in the highest marginal
tax rate imposed on individuals for federal income tax purposes; or (c) the Bank
shall otherwise be subject to any increased cost as a result of any change
(whether as a result of a change in law or otherwise) in the tax consequences of
ownership of this Bond (including by reason of the disallowance or diminishment
of any deduction available to the Bank); then, in any case, upon notice to such
effect from the Bank to the Borrower and the Issuer, which notice shall set
forth the date as of which any such event shall have occurred, there shall be
paid to the Bank, as additional interest on this Bond, an amount which, after
giving effect to all taxes, interest and penalties, in addition to any other
charges required to be paid by the Bank as a result of such payment, is equal to
the amount of any such preference, excess profits or other federal taxes and any
interest and penalties, or any other additions to tax, which are payable by the
Bank as a consequence of such change (computed on the assumption that taxes are
payable by the Bank at the highest marginal statutory rate of tax imposed on
individuals), it being the intent and purpose of the parties hereto that the
profit of the Bank with respect to the payment of interest to it on this Bond
shall not be diminished by any such event (whether through or as a result of
direct or indirect federal taxation of the interest on or principal of this
Bond, the disallowance or diminishment of a deduction or
otherwise).

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    Taxable
Rate.  Notwithstanding the foregoing, if at any time hereafter,
either before or after the payment of the entire principal of and interest on
this Bond, there shall be a Determination of Taxability as defined in the
Agreement (hereinafter a "Determination of Taxability"), then, in such event,
the interest rate on this Bond, as in effect during any period from and after
the date of the event giving rise to the Determination of Taxability, shall be
the Base Rate plus 2%.  The failure of the Bank to make a demand
promptly following a Determination of Taxability shall not alter the rights or
obligations of the Issuer or the Bank.  If there is more than one
Determination of Taxability, this paragraph shall be fully applicable to each
such Determination of Taxability, whether or not the Bank exercised any or all
of the rights or remedies that arose under any prior Determination of
Taxability, and all the Bank's rights and remedies shall be cumulative except to
the extent of any written waiver by the Bank.  If the Bank receives
written notice of any Determination of Taxability, it will give prompt written
notice thereof to the Borrower and the Issuer, and the Borrower shall have the
right to require the Bank to prosecute any administrative or judicial remedies
available to it unless the Bank determines, in its sole discretion, that the
prosecution of such remedies is against its best interests, provided that the
Borrower shall pay all expenses of prosecuting any such remedies.

     

    Default and Overdue
Interest.  Upon the occurrence of any Event of Default under
the Agreement, and so long as any such Event of Default shall be continuing, the
interest rate payable on this Bond in accordance with the provisions set forth
above shall be increased by two percent (2%).  This Bond shall bear
interest on the overdue principal and, to the extent permitted by law, on
overdue interest at the Base Rate plus 2%.

     

    General.  Interest,
calculated on the basis of a 360-day year for the actual number of days elapsed,
shall accrue daily in each quarterly interest period and shall be payable
quarterly in arrears on each Interest Payment Date to the registered owner
hereof, as shown on the registration books of the Borrower on the Business Day
preceding such Interest Payment Date (a "Record Date").  The interest
due hereon shall be calculated by the Bank in accordance with Section 8.1(a)(i)
of the Agreement hereinafter described.  Interest on this Bond shall
be paid in such manner as the Borrower and the Bank shall agree.

     

    REDEMPTION
PROVISIONS

     

    Optional
Redemption.  The Bond may be redeemed at the election of the
Issuer at the written direction of the Borrower, in whole or in part (but if in
part in the principal amount of $100,000 or integral multiples of $5,000 in
excess thereof), on any date, at a redemption price equal to the principal
amount so redeemed, together with accrued interest to the date of redemption (as
defined in the Agreement).  The Borrower shall provide the Bank with
notice of the date of any optional redemption pursuant to this paragraph and the
principal amount of this Bond to be redeemed by first-class mail, postage
prepaid, sent at least fifteen (15) days before such redemption date to the Bank
at the registered address of the Bank appearing in the Agreement as of the close
of business on the Business Day prior to such mailing.  On each such
redemption date, payment of the redemption price having been made to the Bank as
provided herein and in the Agreement or the portion thereof so called for
redemption shall become due and payable on the redemption date and interest
shall cease to accrue thereon from and after the redemption date.  Any
amounts applied to an optional redemption shall reduce the mandatory scheduled
redemption obligations of the Issuer described below in the order selected by
the Borrower and approved by the Bank (or in the absence of such selection and
approval in inverse order of payment obligations).

     

    Mandatory Scheduled
Redemption.  The Bond shall be redeemed in part by the Issuer
in 60 equal quarter-annual installments, commencing July 3, 2006, at a
redemption price equal to 100% of the principal amount thereof to be redeemed,
without premium; provided, however, that the Bank and the Borrower, with notice
to the Issuer, may agree to a different schedule of principal amortization
provided that (1) no such

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    schedule
shall provide for the deferral of the payment of any principal on the Bond
beyond the final maturity date thereof, and (2) prior to the effectiveness of
such schedule there shall be delivered to the Bank and the Issuer an opinion of
Bond Counsel to the effect that the adoption of such schedule will not cause
interest on the Bond to no longer by excluded from gross income for Federal
income tax purposes.

     

    Mandatory Redemption at
Option of Bank.  At any time on or after June 1, 2012, all or
any portion of this Bond shall be redeemed by the Issuer, in whole or in part
(but if in part in the principal amount of $100,000 or integral multiples of
$5,000 in excess thereof) at a redemption price equal to 100% of the principal
amount thereof plus accrued interest to the date of redemption, upon not less
than 180 days written demand, in the form attached as Exhibit "B" to the
Agreement, of the Bank, with a copy to the Issuer.  The Bond, or any
portion thereof, shall be redeemed, and the redemption of this Bond shall be
paid to the owner of this Bond, on the date specified by the Bank. However, if
the Bank shall demand the redemption of this Bond in whole pursuant to this
paragraph, the Borrower shall have the right to purchase this Bond on any date
after the date of the Bank's written demand and prior to the next Business Day
preceding the date of the proposed redemption, at a purchase price equal to 100%
of the principal amount of this Bond, together with accrued interest to the date
of purchase.

     

    Notwithstanding
the foregoing, if, prior to the date of redemption otherwise specified in
accordance with this subsection, the Borrower shall cause to be delivered to the
Bank a Letter of Credit, in form and substance reasonably satisfactory to the
Bank, the Bond shall not be subject to mandatory prepayment on the date
specified by the Bank, and thereafter, so long as such Letter of Credit shall be
in effect, the Bank shall have no right to demand the prepayment of the Bond
pursuant to this subsection.

     

    Mandatory Redemption Upon
Determination of Taxability.  On the date of the occurrence of
a Determination of Taxability this Bond shall be called for redemption on the
date selected by the Borrower, but not more than ninety (90) days following the
date of the occurrence of the Determination of Taxability, at a redemption price
equal to 100% of the principal amount thereof plus accrued interest to the date
of redemption.

     

    On
each such redemption date, payment or provision for payment of the redemption
price having been made, this Bond or the portion thereof so called for
redemption shall become due and payable on the redemption date, and interest
shall cease to accrue thereon from and after the redemption date.

     

    Upon
any redemption of the Bond other than pursuant to a Mandatory Schedule
Redemption as discussed above, the Borrower shall pay to Bank, concurrently
therewith, a "breakage fee" equal to the excess, if any, of (A) the amount of
interest which otherwise would have accrued on the principal amount so repaid
for the period from the date of such repayment to the end of the current
quarterly interest period for such amount at the applicable rate of interest for
such amount provided for herein over (B) the interest component of the amount
the Bank would have bid in the London interbank market for Dollar deposits of
leading lenders and amounts comparable to such principal amount and with
maturities comparable to such period (it being conclusively presumed for such
purpose that Bank shall have purchased funds at the LIBOR Rate.

     

    In
the event of a redemption of this Bond in whole, the redemption price shall be
paid to the Bank only upon surrender of this Bond at the principal office of the
Borrower or such other place as the Borrower shall designate on such Interest
Payment Date.  In the event of a partial optional or mandatory
redemption, payment shall be made by wire transfer of immediately available
funds without presentation and surrender of this Bond, provided that the
Borrower's record of such payment shall be conclusive and binding upon the Bank
and each succeeding owner of this Bond, absent manifest error.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    This
Bond is transferable, in accordance with the provisions of the Agreement, by the
owner hereof or its duly authorized attorney at the designated office of the
Borrower, upon surrender of this Bond, accompanied by a duly executed instrument
of transfer, in form satisfactory to the Borrower, and upon payment by the owner
hereof of any taxes, fees or other governmental charges incident to such
transfer.  Upon any such transfer, a new fully-registered Bond in the
same aggregate principal amount will be issued to the transferee.  The
Person in whose name this Bond is registered may be deemed the owner thereof by
the Issuer and the Borrower, and any notice to the contrary shall not be binding
upon the Issuer or the Borrower.

     

    The
Agreement permits the amendment thereof and the modifications of the rights and
obligations of the Issuer and the rights of the owner of this Bond upon the
terms set forth therein.  Any consent or waiver by the owner of this
Bond shall be conclusive and binding upon such Bank and upon all future owners
of this Bond and of any Bond issued upon the transfer of this Bond whether or
not notation of such consent or waiver is made hereon.  The Agreement
also contains provisions permitting the owner of this Bond to waive certain past
defaults under the Agreement and their consequences.

     

    This
Bond is issued under and pursuant to, and in full compliance with the laws of
the Commonwealth, including particularly the Act, which shall govern its
construction, and by appropriate action duly taken by the Issuer which
authorizes the execution and delivery of the Agreement and this
Bond.

     

    No
covenant or agreement contained in this Bond shall be deemed to be the covenant
or agreement of any member, officer, attorney, agent or employee of the Issuer
in an individual capacity.  No recourse shall be had for the payment
of principal, premium, if any, or interest on this Bond or any claim based
thereon or on any instruments and documents executed and delivered by the Issuer
in connection with the Project, against any officer, member, agent, attorney or
employee of the Issuer past, present or future, or any successor body or their
representative heirs, personal representatives, successors, as such, either
directly or through the Issuer, or any such successor body, whether by virtue of
any constitutional provision, statute or rule of law, or by the enforcement of
any assessment or penalty, or otherwise, all of such liability being hereby
released as a condition of and as a consideration for the execution and delivery
of this Bond.

     

    This
Bond shall not constitute the personal obligation, either jointly or severally,
of any director, officer, employee or agent of the Issuer.

     

    IT
IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things
required to exist, happen and be performed precedent to and in the execution and
delivery of the Agreement and issuance of this Bond do exist, have happened,
exist and have been performed.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, the Perkasie Borough Industrial Development Authority has
caused this Bond to be executed in its name by the manual or facsimile signature
of its __________________, and the manual impression or facsimile of its
corporate seal to be affixed hereto and attested by the manual or facsimile
signature of its [Assistant] Secretary.

     

    Dated:  ________,
2005

     

     

    
    

     

    
      	[SEAL]	 	PERKASIE
      BOROUGH INDUSTRIAL
	 	 	 	DEVELOPMENT
      AUTHORITY
	 	 	 	 	 
	 	 	 	 	 
	
              Attest:

            	 	 	 
	 	 	 	 	 
	By:	 	 	By:	 
	 	    Name:	 	 	    Name:
	 	    Title:	 	 	    Title:

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
 

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

       

    

    AUTHENTICATION
CERTIFICATE

     

    This
Bond is the Bond of the issue described in the within-mentioned Agreement,
entitled to the benefits thereof.

     

    Date
of Authentication:

     

    
      	 	 	 	MET-PRO
      CORPORATION
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	By:	 
	 	 	 	 	  
      Name:
	 	 	 	 	  
      Title:

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
 

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    EXHIBIT
"B"

     

    NOTICE
OF MANDATORY REDEMPTION

     

    To:          MET-PRO
CORPORATION

       <Address>

     

     

    Attention:

     

    The
undersigned, being the owner of the Bond issued under and pursuant to that
certain Financing Agreement dated as of _____________ (the "Agreement"), among
the Perkasie Borough Industrial Development Authority (the "Issuer"), Met-Pro
Corporation (the "Borrower") and Brown Brothers, Harriman & Co., hereby
irrevocably elects that [$      
      *] of the principal amount of the Bond
shall be redeemed by the Issuer on __________ [DATE TO BE SPECIFIED BY THE
BANK].

     

    If
the Bond is to be redeemed in full, the undersigned shall surrender the Bond,
duly endorsed for transfer or accompanied by a bond power endorsed in blank, to
the Borrower at its office at the address set forth in the Agreement against
payment of the redemption price.

     

    If
the Bond is to be redeemed in part, payment of the redemption price shall be
made on the redemption date to or to the order of the undersigned, as hereby
authorized, as follows:

     

    
      
        	 	By Wire
      Transfer:  	By
    Check:
	 	 	 
	 
      	
                Bank:____________________

              	
                Payee:_____________________

              
	 
      	
                ABA
      No.:_________________

              	
                Address:___________________

              
	 
      	
                Credit:____________________

              	
                ___________________________

              
	 
      	
                Instructions:________________

              	
                ___________________________

              
	 
      	
                __________________________

              	
                ___________________________

              

      

       

    

    All
capitalized terms not defined herein shall have the meanings assigned to them in
the Agreement.

     

    Dated:

     

     

    
      	 	 	 
	 	Signature of Bank or Authorized Representative	 
	 	 	 
	 	 	 
	 	 	 
	 	Tax Identification Number of Bank	 

    

     

     

    

      

    

    
  
      
        	
                     *

              	
                if less than
      all of the principal amount of the Bond is to be redeemed, the principal
      amount to be redeemed shall be $100,000 or any integral multiple of $5,000
      in excess thereof.

              

      

       

       

      
        
          
          

        

        
          B-1

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
"C"

       

    

    FORM
OF REQUISITION

     

    BROWN
BROTHERS HARRIMAN & CO.

     

    Attention:____________________

     

    RE:           Requisition
No. ____

     

    Gentlemen:

     

    We
hereby request that you advance funds in accordance with Section 7.3 of the
Financing Agreement dated _______________ (the "Agreement"), among the Perkasie
Borough Industrial Development Authority (the "Issuer"), Met-Pro Corporation
(the "Borrower") and you, in the following amounts to the following named
persons:

     

    Payee                                                      Amount

     

    

     

    

     

    We
hereby certify as follows:

     

    1.           The
nature of the property and amount of costs of the Project covered by this
requisition is described herein.

     

    2.           The
amounts requisitioned hereunder (a) are for Project Costs which have not been
the basis of a prior or contemporaneous requisition or of a prior payment of an
external loan or of a prior reimbursement of internal advances and which have
not been paid from gifts or grants received by us for the Project; (b) are for
work actually performed or material, equipment or other property actually
supplied for the Project in accordance with the applicable plans and
specifications; and (c) contain no amount entitled to be retained.

     

    3.           The
work and material, equipment or other property covered by this requisition have
been performed or delivered to us and are in accordance in all material respects
with all applicable building, zoning, land use, environmental protection,
sanitary, safety and educational laws, rules and regulations, all applicable
grant, reimbursement and insurance requirements and the provisions of the
Agreement; and all permits, licenses and approvals required for the items
covered by this requisition have been obtained.

     

    4.           All
property provided by the net proceeds of the Bond is owned by the
Borrower.

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        C-1

        
          

        

      

      
        
        

      

    

     

    All
capitalized terms used herein and not otherwise defined shall have the meanings
set forth in the Agreement.

     

    Date:______________

     

     

    
      	 	 	 	MET-PRO
      CORPORATION
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	By:	 
	 	 	 	 	  
      Name:
	 	 	 	 	  
      Title:

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
 

    
      
        
        

      

      
        C-2

        
          

        

      

      
        
        

      

    

    SCHEDULE
11.16

     

    FINANCIAL
COVENANTS

     

    So
long as any part of the Bond remains Outstanding, the Borrower shall comply with
each of the following financial covenants.  As used in this Section
(and in each definition applicable hereto), the term “Borrower” means the
Borrower and each of its consolidated subsidiaries (if any) on a consolidated or
combined basis.

     

    (a)           Fixed Charges Coverage
Ratio. As of the last day of each fiscal quarter, the Fixed Charges
Coverage Ratio, as measured on a four quarter basis of the four most recent
quarters, shall not be less than 1.05 to 1.00.

     

    (b)           Leverage Ratio. As
measured on a quarterly basis, the Leverage Ratio shall not at any time exceed
1.20 to 1.00.

     

    As
used herein, the following definitions shall apply:

     

    “CAPITAL EXPENDITURES” of any Person shall mean,
for any period, all expenditures (whether paid in cash or accrued as liabilities
during such period) of such Person during such period which would be classified
as capital expenditures in accordance with GAAP (including, without limitation,
expenditures for maintenance and repairs which are capitalized, and Capitalized
Leases to the extent an asset is recorded in connection therewith in accordance
with GAAP).

     

    “FIXED
CHARGES COVERAGE RATIO” for any period shall mean the ratio of (a) the sum of
(i) Net Income for such period, plus (ii) depreciation and amortization for such
period, plus (iii) accrued and unpaid interest on Indebtedness for such period,
less extraordinary gains, to (b) the sum of (v) Capital Expenditures for
Maintenance for such period, plus (x) scheduled principal payments under all
Indebtedness for such period, plus (y) accrued and unpaid interest on
Indebtedness for such period, plus (z) Stock Payments, as presented in the
Borrower’s statement of cash flows for such period prepared in conformity with
GAAP.  For purposes of this definition only, (1) “Capital Expenditures
for Maintenance” shall mean the lesser of (a) the amount of One Million Three
Hundred Thousand Dollars ($1,300,000) or (b) total Capital Expenditures for the
most recent fiscal year, and (2) “Stock Payments” shall exclude treasury stock
transactions of up to twenty five percent (25%) of the net worth of the Borrower
(determined according to GAAP) consummated by Borrower during any one fiscal
year.

     

    “LEVERAGE
RATIO” at any time shall mean the ratio of (a) aggregate liabilities of the
Borrower, determined in accordance with GAAP, to (b) Tangible Net
Worth.

     

    “LIABILITIES”
shall mean “liabilities” as determined in accordance with GAAP.

     

    “STOCK
PAYMENT” by the Borrower shall mean any dividend, distribution or payment in
cash on account of or in respect of any shares of the capital stock (or
warrants, options or rights therefore) of such Person, including but not limited
to any payment on account of the purchase, redemption, retirement, defeasance or
acquisition of any shares of the capital stock (or warrants, options or rights
therefor) of the Borrower, in each case regardless of whether required by the
terms of such capital stock (or warrants, options or rights) or any other
agreement or instrument.

     

    “TANGIBLE
NET WORTH” means the total amount of stockholder’s equity of the Borrower at
such time determined in accordance with GAAP, except that there shall be
deducted therefrom the book 

     

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

       

       

    

    value of all intangible assets of the Borrower at such time determined on
the consolidated basis in accordance with GAAP.
 
       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      
        
          
          

        

        
          2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00170-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00170-of-00352.parquet"}]]