Document:

Exhibit 10.15

Exhibit 10.15

LINE OF CREDIT NOTE

			
	 	 	 
	$30,000,000
	 	February 5, 2010

FOR VALUE RECEIVED, PREFORMED LINE PRODUCTS COMPANY (the “Borrower”), with an address at 660 Beta
Drive, Mayfield Village, Ohio 44143, promises to pay to the order of PNC BANK, NATIONAL ASSOCIATION
(the “Bank”), in lawful money of the United States of America in immediately available funds at its
offices located at 1900 East Ninth Street, Cleveland, Ohio 44114, or at such other location as the
Bank may designate from time to time, the principal sum of THIRTY MILLION DOLLARS ($30,000,000)
(the “Facility”) or such lesser amount as may be advanced to or for the benefit of the Borrower
hereunder, together with interest accruing on the outstanding principal balance from the date
hereof, all as provided below.

1. Advances. (a) The Borrower may request advances, repay and request additional advances
hereunder until the Expiration Date, subject to the terms and conditions of this Note and the Loan
Documents (as hereinafter defined). The “Expiration Date” shall mean January 1, 2013, or such
later date as may be designated by the Bank by written notice from the Bank to the Borrower. The
Borrower acknowledges and agrees that in no event will the Bank be under any obligation to extend
or renew the Facility or this Note beyond the Expiration Date. The Borrower may request advances
hereunder upon giving oral or written notice to the Bank by 11:00 a.m. (Cleveland, Ohio time) (a)
on the day of the proposed advance, in the case of advances to bear interest under the Base Rate
Option (as hereinafter defined) and (b) three (3) Business Days prior to the proposed advance, in
the case of advances to bear interest under the LIBOR Option (as hereinafter defined), followed
promptly thereafter by the Borrower’s written confirmation to the Bank of any oral notice. The
aggregate unpaid principal amount of advances under this Note plus the LC Exposure (as defined in
the Loan Agreement (as hereinafter defined)) shall not exceed the face amount of this Note.

(b) The Borrower may request that advances under this Note and subject LCs under the Loan
Documents be made or issued in an Agreed Foreign Currency; provided, that in no event shall
the sum of (i) the aggregate outstanding principal amount of advances under this Note made in
Agreed Foreign Currencies plus (ii) the sum of the aggregate undrawn balance of all then
outstanding subject LCs under the Loan Documents issued in Agreed Foreign Currencies and the
aggregate amount of all unreimbursed draws of all then outstanding subject LCs under the Loan
Documents issued in Agreed Foreign Currencies (the “Foreign LC Exposure”), exceed $10,000,000 at
any one time outstanding (the “Agreed Foreign Currency Limit”). Further, in no event shall the
Foreign LC Exposure exceed $5,000,000 at any one time outstanding. As used herein, the term
“Agreed Foreign Currencies” shall mean Mexican Pesos, Thai Bhat, Australian Dollars and any other
foreign currency requested by the Borrower and approved by the Bank in its sole discretion, and
“Agreed Foreign Currency” shall mean any one of such currencies. Each advance under this Note made
in an Agreed Foreign Currency shall bear interest at the LIBOR Option in accordance with the terms
hereof. The Bank may, with respect to advances made in an Agreed Foreign Currency, engage in
reasonable rounding of the Agreed Foreign Currency amounts requested.

(c) All advances under this Note and subject LCs under the Loan Documents made or issued in
Agreed Foreign Currencies shall be governed by the Bank’s standard fees, charges, agreements,
policy guidelines and other terms and provisions relating to such advances and issuances as in
effect from time to time (collectively, the “Bank’s Standard Foreign Currency Terms”), in addition
to the specific provisions set forth herein. In the event of any conflict between the Bank’s
Standard Foreign Currency Terms and the terms of this Note or any other Loan Document, the Bank’s
Standard Foreign Currency Terms shall govern.

 

 

 

(d) The Bank will determine the Dollar Amount of all outstanding advances under this Note made
in Agreed Foreign Currencies and the Foreign LC Exposure (such outstanding advances and the Foreign
LC Exposure at any time being the “Foreign Currency Outstandings”) from time to time on and as of
any Business Day elected by the Bank in its sole discretion (each such day upon or as of which the
Bank so determines Dollar Amounts being a “Computation Date”). If at any time the Dollar Amount of
Foreign Currency Outstandings (calculated as of the most recent Computation Date) exceeds the
Agreed Foreign Currency Limit, then the Borrower shall immediately prepay such Foreign Currency
Outstandings in an aggregate principal amount sufficient to eliminate any such excess. As used
herein, the term “Dollar Amount” shall mean, with respect to any currency at any date, (i) the
amount of such currency if such currency is in Dollars or (ii) the equivalent in such currency of
such amount of Dollars if such currency is currency other than Dollars, calculated on the basis of
the arithmetical mean of the buy sell spot rates of exchange of the Bank for such currency on the
London market at 11:00 a.m. London time, on or as of the most recent Computation Date. “Dollars”
and “$” mean the lawful currency of the United States of America.

2. Rate of Interest. Each advance outstanding under this Note will bear interest at a rate
or rates per annum as may be selected by the Borrower from the interest rate options set forth
below (each, an “Option”):

(i) Base Rate Option. A rate of interest per annum which is at all times equal to the
Base Rate. If and when the Base Rate (or any component thereof) changes, the rate of interest with
respect to any advance to which the Base Rate Option applies will change automatically without
notice to the Borrower, effective on the date of any such change. There are no required minimum
interest periods for advances bearing interest under the Base Rate Option.

(ii) LIBOR Option. A rate per annum equal to (A) LIBOR plus (B) one hundred
twenty-five (125) basis points (1.25%), for the applicable LIBOR Interest Period.

(iii) Daily LIBOR Option. A rate per annum which is at all time equal to Daily LIBOR,
so long as a Daily LIBOR is offered, ascertainable and not unlawful. If and when Daily LIBOR (or
any component thereof) changes, the rate of interest with respect to any advance to which the Daily
LIBOR Option applies will change automatically without notice to the Borrower, effective on the
date of any such change. There are no required minimum interest periods for advances bearing
interest under the Daily LIBOR Option.

For purposes hereof, the following terms shall have the following meanings:

“Base Rate” shall mean the highest of (A) the Prime Rate, and (B) the sum of the Federal
Funds Open Rate plus fifty (50) basis points (0.50%), and (C) the sum of the Daily
LIBOR plus one hundred (100) basis points (1.0%), so long as a Daily LIBOR is
offered, ascertainable and not unlawful.

“Business Day” shall mean any day other than a Saturday or Sunday or a legal holiday on
which commercial banks are authorized or required by law to be closed for business in
Cleveland, Ohio.

“Change of Control” shall mean (a) the Barbara P Ruhlman Irrevocable Trust Dated July 29,
2008, Barbara P. Ruhlman, Robert G. Ruhlman and Randall M. Ruhlman shall cease to own
directly or beneficially at least 35% of the outstanding voting Equity Interests of the
Borrower on a fully diluted basis, in each case free and clear of all Liens or other
encumbrances; (b) the Borrower shall cease to own, free and clear of all Liens or other
encumbrances, at least the percentage of the outstanding voting Equity Interests of each of
its subsidiaries on a fully diluted basis as is indicated on the corporate structure chart
delivered Bank in connection with the Loan
Agreement (as hereinafter defined) on the date hereof; (c) occupation of a majority of the
seats (other than vacant seats) on the board of directors of the Borrower or any of its
subsidiaries, as the case may be, by Persons who were neither (i) nominated by the board of
directors of such entity nor (ii) appointed by directors so nominated; or (d) the
acquisition of direct or indirect Control of the Borrower by any Person or group other than
the Barbara P Ruhlman Irrevocable Trust Dated July 29, 2008, Barbara P. Ruhlman, Robert G.
Ruhlman and Randall M. Ruhlman.

 

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“Company” shall have the meaning ascribed thereto in the Loan Agreement (as hereinafter
defined).

“Control” means the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the ability to exercise
voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings
correlative thereto.

“Daily LIBOR” shall mean, for any day, the rate per annum determined by the Bank by dividing
(x) the Published Rate by (y) a number equal to 1.00 minus the LIBOR Reserve
Percentage.

“Equity Interests ” means shares of capital stock, partnership interests, membership
interests in a limited liability company, beneficial interests in a trust or other equity
ownership interests in a Person, and any warrants, options or other rights entitling the
holder thereof to purchase or acquire any such equity interest.

“Federal Funds Open Rate” shall mean, for any day, the rate per annum (based on a year of
360 days and actual days elapsed) which is the daily federal funds open rate as quoted by
ICAP North America, Inc. (or any successor) as set forth on the Bloomberg Screen BTMM for
that day opposite the caption “OPEN” (or on such other substitute Bloomberg Screen that
displays such rate), or as set forth on such other recognized electronic source used for the
purpose of displaying such rate as selected by the Bank (an “Alternate Source”) (or if such
rate for such day does not appear on the Bloomberg Screen BTMM (or any substitute screen) or
on any Alternate Source, or if there shall at any time, for any reason, no longer exist a
Bloomberg Screen BTMM (or any substitute screen) or any Alternate Source, a comparable
replacement rate determined by the Bank at such time (which determination shall be
conclusive absent manifest error); provided however, that if such day is not a Business Day,
the Federal Funds Open Rate for such day shall be the “open” rate on the immediately
preceding Business Day. The rate of interest charged shall be adjusted as of each Business
Day based on changes in the Federal Funds Open Rate without notice to the Borrower.

“Governmental Authority” means the government of the United States of America, any other
nation or any political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government.

“LIBOR” shall mean, with respect to any advance to which the LIBOR Option applies for the
applicable LIBOR Interest Period, the interest rate per annum determined by the Bank by
dividing (the resulting quotient rounded upwards, at the Bank’s discretion, to the nearest
1/100th of 1%) (i) the rate of interest determined by the Bank in accordance with its usual
procedures (which determination shall be conclusive absent manifest error) to be the
eurodollar rate two (2) Business Days prior to the first day of such LIBOR Interest Period
for an amount comparable to such advance and having a borrowing date and a maturity
comparable to such LIBOR Interest Period by (ii) a number equal to 1.00 minus the LIBOR
Reserve Percentage.

 

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“LIBOR Interest Period” shall mean, as to any advance to which the LIBOR Option applies, the
period of one (1), two (2), three (3), six (6) or twelve (12) month/months as selected by
the Borrower in its notice of borrowing or notice of conversion, as the case may be,
commencing on the date of disbursement of an advance (or the date of conversion of an
advance to the LIBOR Option, as the case may be) and each successive period selected by the
Borrower thereafter; provided that, (i) if a LIBOR Interest Period would end
on a day which is not a Business Day, it shall end on the next succeeding Business Day
unless such day falls in the next succeeding calendar month in which case the LIBOR Interest
Period shall end on the next preceding Business Day, (ii) the Borrower may not select a
LIBOR Interest Period that would end on a day after the Expiration Date, and (iii) any LIBOR
Interest Period that begins on the last Business Day of a calendar month (or a day for which
there is no numerically corresponding day in the last calendar month of such LIBOR Interest
Period) shall end on the last Business Day of the last calendar month of such LIBOR Interest
Period.

“LIBOR Reserve Percentage” shall mean the maximum effective percentage in effect on such day
as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for
determining the reserve requirements (including, without limitation, supplemental, marginal
and emergency reserve requirements) with respect to eurocurrency funding (currently referred
to as “Eurocurrency liabilities”).

“Person” means any natural person, corporation, limited liability company, trust, joint
venture, association, company, partnership, Governmental Authority or other entity.

“Prime Rate” shall mean the rate publicly announced by the Bank from time to time as its
prime rate. The Prime Rate is determined from time to time by the Bank as a means of
pricing some loans to its borrowers. The Prime 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 the Bank to any particular class or category of customers.

“Published Rate” shall mean the rate of interest published each Business Day in the Wall
Street Journal “Money Rates” listing under the caption “London Interbank Offered Rates” for
a one month period (or, if no such rate is published therein for any reason, then the
Published Rate shall be the eurodollar rate for a one month period as published in another
publication selected by the Bank).

LIBOR and the Daily LIBOR shall be adjusted with respect to any advance to which the LIBOR Option
or Base Rate Option or the Daily LIBOR Option applies, as applicable, on and as of the effective
date of any change in the LIBOR Reserve Percentage. The Bank shall give prompt notice to the
Borrower of LIBOR or the Daily LIBOR as determined or adjusted in accordance herewith, which
determination shall be conclusive absent manifest error.

If the Bank determines (which determination shall be final and conclusive) that, by reason of
circumstances affecting the eurodollar market generally, deposits in dollars (in the applicable
amounts) are not being offered to banks in the eurodollar market for the selected term, or adequate
means do not exist for ascertaining LIBOR, then the Bank shall give notice thereof to the Borrower.
Thereafter, until the Bank notifies the Borrower that the circumstances giving rise to such
suspension no longer exist, (a) the availability of the LIBOR Option and Daily LIBOR Option shall
be suspended, and (b) the interest rate for all advances then bearing interest under the LIBOR
Option or the Daily LIBOR Option, as applicable, shall be converted at the expiration of the then
current LIBOR Interest Period(s) to the Base Rate Option.

 

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In addition, if, after the date of this Note, the Bank shall determine (which determination shall
be final and conclusive) that any enactment, promulgation or adoption of or any change in any
applicable law, rule or regulation, or any change in the interpretation or administration thereof
by a governmental authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Bank with any guideline, request or directive (whether
or not having the force of law) of any such authority, central bank or comparable agency shall make
it unlawful or impossible for the Bank to make or maintain or fund loans based on LIBOR or in an
Agreed Foreign Currency, the Bank shall notify the Borrower. Upon receipt of such notice, until
the Bank notifies the Borrower that the circumstances giving rise to such determination no longer
apply, (a) the availability of the LIBOR Option and the Daily LIBOR Option and the option to
request advances and subject LCs in such Agreed Foreign Currency shall be suspended, and (b) the
interest rate on all advances then bearing interest under the LIBOR Option and the Daily LIBOR
Option shall be converted to the Base Rate Option either (i) on the last day of the then current
LIBOR Interest Period(s) if the Bank may lawfully continue to maintain advances based on LIBOR to
such day, or (ii) immediately if the Bank may not lawfully continue to maintain advances based on
LIBOR, and (c) Borrower will prepay all outstanding advances hereunder made in such Agreed Foreign
Currency, together with interest thereon, and (d) all subject LCs issued in such Foreign Currencies
shall be deemed terminated.

The foregoing notwithstanding, it is understood that the Borrower may select different Options to
apply simultaneously to different portions of the advances and may select up to six (6) different
interest periods to apply simultaneously to different portions of the advances bearing interest
under the LIBOR Option. Interest hereunder will be calculated based on the actual number of days
that principal is outstanding over a year of 360 days. In no event will the rate of interest
hereunder exceed the maximum rate allowed by law.

3. Interest Rate Election. Subject to the terms and conditions of this Note, at the end of
each interest period applicable to any advance, the Borrower may renew the Option applicable to
such advance or convert such advance to a different Option; provided that, during
any period in which any Event of Default (as hereinafter defined) has occurred and is continuing,
any advances bearing interest under the LIBOR Option or the Daily LIBOR Option shall, at the Bank’s
sole discretion, be converted at the end of the applicable LIBOR Interest Period (or immediately in
the case of the Daily LIBOR Option) to the Base Rate Option and the LIBOR Option and the Daily
LIBOR Option will not be available to Borrower with respect to any new advances (or with respect to
the conversion or renewal of any existing advances) until such Event of Default has been cured by
the Borrower or waived by the Bank. The Borrower shall notify the Bank of each election of an
Option, each conversion from one Option to another, the amount of the advances then outstanding to
be allocated to each Option and where relevant the interest periods therefor. In the case of
converting to the LIBOR Option or the Daily LIBOR Option, such notice shall be given at least three
(3) Business Days prior to the commencement of any LIBOR Interest Period or when the Borrower would
like to commence the Daily LIBOR Option, as the case may be. If no interest period is specified in
any such notice for which the resulting advance is to bear interest under the LIBOR Option, the
Borrower shall be deemed to have selected a LIBOR Interest Period of one month’s duration. If no
notice of election, conversion or renewal is timely received by the Bank with respect to any
advance, the Borrower shall be deemed to have elected the Base Rate Option. Any such election
shall be promptly confirmed in writing by such method as the Bank may require.

 

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4. Advance Procedures. A request for advance made by telephone must be promptly confirmed
in writing by such method as the Bank may require. The Borrower authorizes the Bank to accept
telephonic requests for advances, and the Bank shall be entitled to rely upon the authority of any
person providing such instructions. The Borrower hereby indemnifies and holds the Bank harmless
from and against any and all damages, losses, liabilities, costs and expenses (including reasonable
attorneys’ fees and expenses) which may arise or be created by the acceptance of such telephone
requests or making such advances.
The Bank will enter on its books and records, which entry when made will be presumed correct, the
date and amount of each advance, the interest rate and interest period applicable thereto, as well
as the date and amount of each payment.

5. Payment Terms; Commitment Fee. The Borrower shall pay accrued interest on the unpaid
principal balance of this Note in arrears: (a) for the portion of advances bearing interest under
the Base Rate Option and the Daily LIBOR Option, on the first day of each month during the term
hereof, (b) for the portion of advances bearing interest under the LIBOR Option, on the last day of
the respective LIBOR Interest Period for such advance, (c) if any LIBOR Interest Period is longer
than three (3) months, then also on the three (3) month anniversary of such interest period and
every three (3) months thereafter, and (d) for all advances, at maturity, whether by acceleration
of this Note or otherwise, and after maturity, on demand until paid in full. All outstanding
principal and accrued interest hereunder shall be due and payable in full on the Expiration Date.
All advances under this Note shall be repaid and each payment of interest thereon shall be paid in
the currency in which such advance was made. If for any reason Borrower is prohibited by any law,
rule, regulation or any other reason from making any required payment hereunder or under any of the
other Loan Documents in an Agreed Foreign Currency, Borrower will make such payment in Dollars in
the Dollar Amount of such Agreed Foreign Currency payment amount.

If any payment under this Note shall become due on a Saturday, Sunday or public holiday under the
laws of the State where the Bank’s office indicated above is located, such payment shall be made on
the next succeeding Business Day and such extension of time shall be included in computing interest
in connection with such payment. The Borrower hereby authorizes the Bank to charge the Borrower’s
deposit account at the Bank for any payment when due hereunder. Payments received will be applied
to charges, fees and expenses (including attorneys’ fees), accrued interest and principal in any
order the Bank may choose, in its sole discretion.

The Borrower shall pay to the Bank quarterly in arrears, on the last day of each calendar quarter,
a commitment fee in the amount of the product of twenty-five (25) basis points (0.25%) per annum
multiplied by the average daily unused amount of the Facility during the most recently
ended quarter.

Notwithstanding anything to the contrary set forth herein or in any of the other Loan Documents,
if, after the making of any advance under this Note in any currency other than Dollars, currency
control or exchange regulations are imposed in the country which issues such currency with the
result that the type of currency in which such advance was made (the “Original Currency”) no longer
exists or the Borrower is not able to make payment to the Bank in such Original Currency, then all
payments to be made by the Borrower hereunder in such currency shall instead be made when due in
Dollars in an amount equal to the Dollar Amount (as of the date of repayment) of such payment due,
it being the intention of the parties hereto that the Borrower take all risks of the imposition of
any such currency control or exchange regulations.

 

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6. Late Payments; Default Rate. If the Borrower fails to make any payment of principal,
interest or other amount coming due pursuant to the provisions of this Note within fifteen (15)
calendar days of the date due and payable, the Borrower also shall pay to the Bank a late charge
equal to the lesser of five percent (5%) of the amount of such payment or $100.00 (the “Late
Charge”). Such fifteen (15) day period shall not be construed in any way to extend the due date of
any such payment. Upon maturity, whether by acceleration, demand or otherwise, and at the Bank’s
option upon the occurrence of any Event of Default (as hereinafter defined) and during the
continuance thereof, each advance outstanding under this Note shall bear interest at a rate per
annum (based on the actual number of days that principal is outstanding over a year of 360 days)
which shall be two percentage points (2%) in excess of the interest rate in effect from time to
time under this Note but not more than the maximum rate allowed by law (the
“Default Rate”). The Default Rate shall continue to apply whether or not judgment shall be entered
on this Note. Both the Late Charge and the Default Rate are imposed as liquidated damages for the
purpose of defraying the Bank’s expenses incident to the handling of delinquent payments, but are
in addition to, and not in lieu of, the Bank’s exercise of any rights and remedies hereunder, under
the other Loan Documents or under applicable law, and any fees and expenses of any agents or
attorneys which the Bank may employ. In addition, the Default Rate reflects the increased credit
risk to the Bank of carrying a loan that is in default. The Borrower agrees that the Late Charge
and Default Rate are reasonable forecasts of just compensation for anticipated and actual harm
incurred by the Bank, and that the actual harm incurred by the Bank cannot be estimated with
certainty and without difficulty.

7. Prepayment; Reduction of Facility. The Borrower shall have the right to prepay any
advance hereunder at any time and from time to time, in whole or in part; subject, however, to
payment of any break funding indemnification amounts owing pursuant to paragraph 8 below. The
Borrower shall have the right to reduce the Facility from time to time in a minimum of $1,000,000
increments.

8. Yield Protection; Break Funding Indemnification. The Borrower shall pay to the Bank on
written demand therefor, together with the written evidence of the justification therefor, all
direct costs incurred, losses suffered or payments made by Bank by reason of any change in law or
regulation or its interpretation imposing any reserve, deposit, allocation of capital, or similar
requirement (including without limitation, Regulation D of the Board of Governors of the Federal
Reserve System) on the Bank, its holding company or any of their respective assets. In addition,
the Borrower agrees to indemnify the Bank against any liabilities, losses or expenses (including,
without limitation, loss of margin, any loss or expense sustained or incurred in liquidating or
employing deposits from third parties, and any loss or expense incurred in connection with funds
acquired to effect, fund or maintain any advance (or any part thereof) bearing interest under the
LIBOR Option) which the Bank sustains or incurs as a consequence of either (i) the Borrower’s
failure to make a payment on the due date thereof, (ii) the Borrower’s revocation (expressly, by
later inconsistent notices or otherwise) in whole or in part of any notice given to Bank to
request, convert, renew or prepay any advance bearing interest under the LIBOR Option, or (iii) the
Borrower’s payment or prepayment (whether voluntary, after acceleration of the maturity of this
Note or otherwise) or conversion of any advance bearing interest under the LIBOR Option on a day
other than the last day of the applicable LIBOR Interest Period. A notice as to any amounts
payable pursuant to this paragraph given to the Borrower by the Bank shall, in the absence of
manifest error, be conclusive and shall be payable upon demand. The Borrower’s indemnification
obligations hereunder shall survive the payment in full of the advances and all other amounts
payable hereunder.

9. Other Loan Documents. This Note is issued in connection with the Loan Agreement between
the Borrower and the Bank, dated on or before the date hereof (as amended, modified or renewed from
time to time, the “Loan Agreement”), and the other agreements and documents now or hereafter
executed and/or delivered in connection herewith or therewith or referred to herein or therein
(including, without limitation, the subject LCs), the terms of which are incorporated herein by
reference (this Note, the Loan Agreement and such other agreements and documents, each as amended,
modified or renewed from time to time, being collectively referred to as the “Loan Documents”), and
is secured by the property (if any) described in the Loan Documents and by such other collateral as
previously may have been or may in the future be granted to the Bank to secure this Note.
Capitalized and other terms not defined herein shall have the meanings ascribed to them in the
other Loan Documents.

 

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10. Events of Default. The occurrence of any of the following events will be deemed to be
an “Event of Default” under this Note: (i) (A) the nonpayment of (1) any principal under this Note
when due and (2) interest, other indebtedness or any other amounts payable under this Note or any
of the other Loan Documents (other than reimbursements referred to in clause (i)(B) of this Section
10) within ten (10) days after the same is due, and (B) failure to reimburse the Bank for any draft
or other item paid by
Bank pursuant to or otherwise in respect of any subject LC when obligated to do so; (ii) the
occurrence of any event of default or any default and the lapse of any notice or cure period, or
any Obligor’s failure to observe or perform any covenant or other agreement, under or contained in
any Loan Document or any other document now or in the future, relating to, evidencing or securing
any debt, liability or obligation of any Obligor to the Bank; (iii) the filing by or against any
Obligor of any proceeding in bankruptcy, receivership, insolvency, reorganization, liquidation,
conservatorship or similar proceeding (and, in the case of any such proceeding instituted against
any Obligor, such proceeding is not dismissed or stayed within 30 days of the commencement thereof,
provided that the Bank shall not be obligated to advance additional funds hereunder during such
period); (iv) any assignment by any Obligor for the benefit of creditors, or any levy, garnishment,
attachment or similar proceeding is instituted against any property of any Obligor held by or
deposited with the Bank or the cessation of all or a substantial part of the business operations of
any Obligor; (v) a default with respect to any other indebtedness of any Obligor for borrowed
money, if the effect of such default is to cause or permit the acceleration of such debt, provided
that this subsection shall not apply if and only so long as the aggregate unpaid principal balance
of all such indebtedness in default does not exceed five million dollars ($5,000,000) at any one
time outstanding; in this subsection, “default” means that (A) there shall have occurred (or shall
exist) in respect of the indebtedness in question any event, condition or other thing that
constitutes, or that with the giving of notice or the lapse of any applicable grace period or both
would constitute, a default which accelerates (or permits any creditor or creditors or
representative or creditors to accelerate) the maturity of any such indebtedness, (B) any such
indebtedness (other than any payable on demand) shall not have been paid in full at its stated
maturity, or (C) any such indebtedness payable on demand shall not have been paid in full within
ten (10) banking days after any actual demand for payment); (vi) if at any time (A) the aggregate
of all undischarged final judgments (excluding final judgments the execution of which, on the date
of determination, are effectively stayed) against the Obligors or any thereof for the payment of
money shall exceed $5,000,000 or (B) the aggregate of all liabilities of the Obligors arising from
defaults under ERISA (as defined in the Loan Agreement), shall exceed $5,000,000; (vii) the
commencement of any foreclosure or forfeiture proceeding, execution or attachment against any
collateral securing the obligations of any Obligor to the Bank; (viii) any material adverse change
in any Obligor’s business, assets, operations, financial condition or results of operations; (ix)
any Obligor ceases doing business as a going concern; (x) any representation or warranty made by
any Obligor to the Bank in any Loan Document or any other documents now or in the future evidencing
or securing the obligations of any Obligor to the Bank, is false, erroneous or misleading in any
material respect; (xi) if this Note or any guarantee executed by any Obligor is secured, the
failure of any Obligor to provide the Bank with additional collateral if in the Bank’s opinion at
any time or times, the market value of any of the collateral securing this Note or any guarantee
has depreciated below that required pursuant to the Loan Documents or, if no specific value is so
required, then in an amount deemed material by the Bank; (xii) the revocation or attempted
revocation, in whole or in part, of any guarantee by any Obligor; or (xiii) the occurrence of a
Change of Control. As used herein, the term “Obligor” means any Borrower, any other Company and
any guarantor of, or any pledgor, mortgagor or other person or entity providing collateral support
for, the Borrower’s obligations to the Bank existing on the date of this Note or arising in the
future.

Upon the occurrence and during the continuance of an Event of Default: (a) the Bank shall be under
no further obligation to make advances hereunder; (b) if an Event of Default specified in clause
(iii) or (iv) above shall occur, the outstanding principal balance and accrued interest hereunder
together with any additional amounts payable hereunder shall be immediately due and payable without
demand or notice of any kind; (c) if any other Event of Default shall occur, the outstanding
principal balance and accrued interest hereunder together with any additional amounts payable
hereunder, at the Bank’s option and without demand or notice of any kind, may be accelerated and
become immediately due and payable; (d) at the Bank’s option, this Note will bear interest at the
Default Rate from the date of the occurrence of the Event of Default; and (e) the Bank may exercise
from time to time any of the rights and remedies available under the Loan Documents or under
applicable law.

 

8

 

11. Power to Confess Judgment. The Borrower hereby irrevocably authorizes any
attorney-at-law, including an attorney employed by or retained and paid by the Bank, to appear in
any court of record in or of the State of Ohio, or in any other state or territory of the United
States, at any time after the indebtedness evidenced by this Note becomes due, whether by
acceleration or otherwise, to waive the issuing and service of process and to confess a judgment
against the Borrower in favor of the Bank, and/or any assignee or holder hereof for the amount of
principal and interest and expenses then appearing due from the Borrower under this Note, together
with costs of suit and thereupon to release all errors and waive all right of appeal or stays of
execution in any court of record. The Borrower hereby expressly (i) waives any conflict of
interest of the attorney(s) retained by the Bank to confess judgment against the Borrower upon this
Note, and (ii) consents to the receipt by such attorney(s) of a reasonable legal fee from the Bank
for legal services rendered for confessing judgment against the Borrower upon this Note. A copy of
this Note, certified by the Bank, may be filed in each such proceeding in place of filing the
original as a warrant of attorney.

12. Right of Setoff. In addition to all liens upon and rights of setoff against the
Borrower’s money, securities or other property given to the Bank by law, the Bank shall have, with
respect to the Borrower’s obligations to the Bank under this Note and to the extent permitted by
law, a contractual possessory security interest in and a contractual right of setoff against, and
the Borrower hereby grants the Bank a security interest in, and hereby assigns, conveys, delivers,
pledges and transfers to the Bank, all of the Borrower’s right, title and interest in and to, all
of the Borrower’s deposits, moneys, securities and other property now or hereafter in the
possession of or on deposit with, or in transit to, the Bank or any other direct or indirect
subsidiary of The PNC Financial Services Group, Inc., whether held in a general or special account
or deposit, whether held jointly with someone else, or whether held for safekeeping or otherwise,
excluding, however, all IRA, Keogh, and trust accounts. Every such security interest and right of
setoff may be exercised without demand upon or notice to the Borrower. Every such right of setoff
shall be deemed to have been exercised immediately upon the occurrence of an Event of Default
hereunder without any action of the Bank, although the Bank may enter such setoff on its books and
records at a later time.

13. Indemnity. The Borrower agrees to indemnify each of the Bank, each legal entity, if
any, who controls, is controlled by or is under common control with the Bank, and each of their
respective directors, officers and employees (the “Indemnified Parties”), and to defend and hold
each Indemnified Party harmless from and against any and all claims, damages, losses, liabilities
and expenses (including all fees and charges of internal or external counsel with whom any
Indemnified Party may consult and all expenses of litigation and preparation therefor) which any
Indemnified Party may incur or which may be asserted against any Indemnified Party by any person,
entity or governmental authority (including any person or entity claiming derivatively on behalf of
the Borrower), in connection with or arising out of or relating to the matters referred to in this
Note or in the other Loan Documents or the use of any advance hereunder, whether (a) arising from
or incurred in connection with any breach of a representation, warranty or covenant by the
Borrower, or (b) arising out of or resulting from any suit, action, claim, proceeding or
governmental investigation, pending or threatened, whether based on statute, regulation or order,
or tort, or contract or otherwise, before any court or governmental authority; provided,
however, that the foregoing indemnity agreement shall not apply to any claims, damages,
losses, liabilities and expenses solely attributable to an Indemnified Party’s gross negligence or
willful misconduct. The indemnity agreement contained in this Section shall survive the
termination of this Note, payment of any advance hereunder and the assignment of any rights
hereunder. The Borrower may participate at its expense in the defense of any such action or claim.

 

9

 

14. Miscellaneous. All notices, demands, requests, consents, approvals and other
communications required or permitted hereunder (“Notices”) must be in writing (except as may be
agreed otherwise above
with respect to borrowing requests) and will be effective upon receipt. Notices may be given in any
manner to which the parties may separately agree, including electronic mail. Without limiting the
foregoing, first-class mail, facsimile transmission and commercial courier service are hereby
agreed to as acceptable methods for giving Notices. Regardless of the manner in which provided,
Notices may be sent to a party’s address as set forth above or to such other address as any party
may give to the other for such purpose in accordance with this paragraph. No delay or omission on
the Bank’s part to exercise any right or power arising hereunder will impair any such right or
power or be considered a waiver of any such right or power, nor will the Bank’s action or inaction
impair any such right or power. The Bank’s rights and remedies hereunder are cumulative and not
exclusive of any other rights or remedies which the Bank may have under other agreements, at law or
in equity. No modification, amendment or waiver of, or consent to any departure by the Borrower
from, any provision of this Note will be effective unless made in a writing signed by the Bank, and
then such waiver or consent shall be effective only in the specific instance and for the purpose
for which given. The Borrower agrees to pay on demand, to the extent permitted by law, all costs
and expenses incurred by the Bank in the enforcement of its rights in this Note and in any security
therefor, including without limitation reasonable fees and expenses of the Bank’s counsel. If any
provision of this Note is found to be invalid, illegal or unenforceable in any respect by a court,
all the other provisions of this Note will remain in full force and effect. The Borrower and all
other makers and indorsers of this Note hereby forever waive presentment, protest, notice of
dishonor and notice of non-payment. The Borrower also waives all defenses based on suretyship or
impairment of collateral. If this Note is executed by more than one Borrower, the obligations of
such persons or entities hereunder will be joint and several. This Note shall bind the Borrower
and its heirs, executors, administrators, successors and assigns, and the benefits hereof shall
inure to the benefit of the Bank and its successors and assigns; provided, however,
that the Borrower may not assign this Note in whole or in part without the Bank’s written consent
and the Bank at any time may assign this Note in whole or in part.

If for the purposes of obtaining judgment in any court it is necessary to convert a sum due from
the Borrower hereunder in the currency expressed to be payable herein (the “specified currency”)
into another currency, the parties hereto agree, to the fullest extent that they may effectively do
so, that the rate of exchange used shall be that at which in accordance with normal banking
procedures the Bank could purchase the specified currency with such other currency at the Bank’s
main office on the Business Day preceding that on which final, non-appealable judgment is given.
The obligations of the Borrower in respect of any sum due to any Lender or the Agent hereunder
shall, notwithstanding any judgment in a currency other than the specified currency, be discharged
only to the extent that on the Business Day following receipt by Bank of any sum adjudged to be so
due in such other currency Bank may in accordance with normal, reasonable banking procedures
purchase the specified currency with such other currency. If the amount of the specified currency
so purchased is less than the sum originally due to Bank in the specified currency, the Borrower
agrees, to the fullest extent that it may effectively do so, as a separate obligation and
notwithstanding any such judgment, to indemnify Bank against such loss, and if the amount of the
specified currency so purchased exceeds the sum originally due to Bank in the specified currency
Bank agrees to remit such excess to the Borrower.

This Note has been delivered to and accepted by the Bank and will be deemed to be made in the State
where the Bank’s office indicated above is located. This Note will be interpreted and the
rights and liabilities of the Bank and the Borrower determined in accordance with the laws of the
State where the Bank’s office indicated above is located, excluding its conflict of laws
rules. The Borrower hereby irrevocably consents to the exclusive jurisdiction of any state or
federal court in the county or judicial district where the Bank’s office indicated above is
located; provided that nothing contained in this Note will prevent the Bank from bringing any
action, enforcing any award or judgment or exercising any rights against the Borrower individually,
against any security or against any property of the Borrower within any other county, state or
other foreign or domestic jurisdiction. The Borrower acknowledges and agrees that the venue
provided above is the most
convenient forum for both the Bank and the Borrower. The Borrower waives any objection to venue
and any objection based on a more convenient forum in any action instituted under this Note.

 

10

 

15. WAIVER OF JURY TRIAL. The Borrower irrevocably waives any and all rights the
Borrower may have to a trial by jury in any action, proceeding or claim of any nature relating to
this Note, any documents executed in connection with this Note or any transaction contemplated in
any of such documents. The Borrower acknowledges that the foregoing waiver is knowing and
voluntary.

The Borrower acknowledges that it has read and understood all the provisions of this Note,
including the confession of judgment and the waiver of jury trial, and has been advised by counsel
as necessary or appropriate.

[Remainder of Page Intentionally Left Blank]

 

11

 

WITNESS the due execution hereof as a document under seal, as of the date first written above, with
the intent to be legally bound hereby.

WARNING-BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL. IF YOU DO NOT
PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS
OF A COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE
CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE
AGREEMENT, OR ANY OTHER CAUSE.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	WITNESS / ATTEST:	 	 	 	PREFORMED LINE PRODUCTS COMPANY	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By: 	 	/s/ Caroline Vaccariello	 	 	 	 	 	By:	 	/s/ Eric R. Graef	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Name: Caroline Vaccariello
	 	 	 	 	 	Name:
	 	Eric R. Graef	 	 
	 

	 	 	 	 	 	 	 	 	 	Title:
	 	CFO — Vice President of Finance	 	 

Signature Page to Line of Credit NoteExhibit 10.16

Exhibit 10.16

LOAN AGREEMENT

THIS LOAN AGREEMENT (the “Agreement”), is entered into as of February 5, 2010, between
PREFORMED LINE PRODUCTS COMPANY (the “Borrower”), with an address at 660 Beta Drive, Mayfield
Village, Ohio 44143, and PNC BANK, NATIONAL ASSOCIATION (the “Bank”), with an address at 1900 East
Ninth Street, Cleveland, Ohio 44114.

The Borrower and the Bank, with the intent to be legally bound, agree as follows:

1. Loan. The Bank has made or may make one or more loans (collectively and
individually, the “Loan” or a “Loan”) to the Borrower subject to the terms and conditions and in
reliance upon the representations and warranties of the Borrower set forth in this Agreement. The
Loan is or will be evidenced by a promissory note or notes of the Borrower and all renewals,
extensions, amendments and restatements thereof (if one or more, collectively, the “Note”)
acceptable to the Bank, which shall set forth the interest rate, repayment and other provisions,
the terms of which are incorporated into this Agreement by reference.

This Agreement, the Note, the subject LCs (as hereinafter defined) and all other agreements
and documents now or hereafter executed and/or delivered pursuant hereto or thereto, as each may be
amended, modified, extended or renewed from time to time, are collectively referred to as the “Loan
Documents.” Capitalized and other terms not defined herein shall have the meanings ascribed to
them in the Loan Documents.

The term “Companies” shall mean, collectively, the Borrower and the Subsidiaries of the
Borrower, and “Company” means any one of them, as the context may require.

The term “Subsidiary” shall mean a corporation or other business entity if shares constituting
a majority of its outstanding capital stock (or other form of ownership) or constituting a majority
of the voting power in any election of directors (or shares constituting both majorities) are (or
upon exercise of any outstanding warrants, options or other rights would be) owned directly or
indirectly at the time in question by the corporation or other business entity in question or
another “Subsidiary of that corporation or other business entity or any combination of the
foregoing.

2. Letters of Credit. Bank agrees that until the Expiration Date Bank will issue such
letters of credit (each, a “subject LC”) for Borrower’s account as Borrower may from time to time
request subject, however, to the conditions of this Agreement.

2.1 Maximum. Bank shall not issue any subject LC if, after giving effect
thereto,

(a) the sum of (i) the aggregate undrawn balance of all then outstanding
subject LCs plus (ii) the aggregate amount of all unreimbursed draws of all
then outstanding subject LCs (the “LC Exposure”) would exceed Fifteen Million
Dollars ($15,000,000) or

(b) the sum of the then aggregate outstanding Loans plus the then LC Exposure
would exceed $30,000,000.

2.2 Term. No subject LC shall permit any draft to be drawn thereunder on a date (the
“last draw date”) that is more than one (1) year after the date of its issue, nor shall any subject
LC permit the last draw date to be later than the third (3rd) banking day next preceding the
Expiration Date.

 

 

 

2.3 Form. Each subject LC shall:

(a) be issued in such form as Bank may reasonably require,

(b) be either a commercial letter of credit used solely for the importation of
goods in the ordinary course of Borrower’s business or a standby letter of credit,
and

(c) be denominated in Dollars or Agreed Foreign Currencies (as such terms are
defined in the Note).

2.4 Commission. Borrower shall pay Bank at the issuance of each subject LC a
non-refundable commission equal to

(a) Bank’s standard percentage fee of the face amount of each commercial import
letter of credit, or

(b) one and one-quarter percent (1.25%) of the face amount of each standby
letter of credit

plus any other standard fees for issuance, amendment, registration or draws or any
similar act generally charged by Bank in respect of letters of credit issued by it.

2.5 Reimbursement. Borrower agrees to reimburse Bank for each draft or other item
paid by Bank pursuant to or otherwise in respect of any subject LC not later than one (1) Business
Day after the date on which Bank made such payment.

2.6 Subject to Loan Back-up. In the event of a draw under any subject LC, Bank is
irrevocably authorized to prepare, to sign Borrower’s name to, and to deliver on Borrower’s behalf
an appropriate credit request requesting a Loan in an amount equal to the reimbursement amount plus
any interest thereon, in the applicable currency. Bank will make the requested Loan even if any
Event of Default shall then exist and even if Borrower for any other reason would then not be
entitled to obtain any subject loan. Bank shall disburse all such loan proceeds directly to Bank to
satisfy Borrower’s reimbursement liability.

2.7 Unconditional Obligation. The obligation of Bank to make, and of Borrower to pay,
the Loans made pursuant to the preceding section shall be absolute and unconditional and shall be
performed under all circumstances, including (without limitation):

(a) any lack of validity or enforceability of the subject LC in question,

(b) the existence of any claim, offset, defense or other right that Borrower
may have against the beneficiary of such subject LC or any of its successors in
interest,

(c) the existence of any claim, offset, defense or other right that Bank may
have against Borrower or any of its affiliates or against the beneficiary of such
subject LC or any of their successors in interest,

(d) the existence of any fraud or misrepresentation in the presentment of any
draft or other item drawn and paid under such subject LC or

 

 

 

(e) any payment of any draft or other item by Bank which does not strictly
comply with the terms of such subject LC provided such payment shall not have
constituted gross negligence or willful misconduct.

2.8 Cash Collateralization. If any Default or Event of Default shall occur and be
continuing, on the Business Day that the Borrower receives notice from the Bank demanding the
deposit of cash collateral pursuant to this paragraph, the Borrower shall deposit in an account
with the Bank, in the name and for the benefit of the Lender (the “LC Collateral Account”), an
amount in cash equal to 105% of the LC Exposure as of such date plus accrued and unpaid interest
thereon; provided that the obligation to deposit such cash collateral shall become
effective immediately, and such deposit shall become immediately due and payable, without demand or
other notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower
described in clauses (iii), (iv) or (vi) of Section 10 of the Note. Such deposit shall be held by
the Bank as collateral for the payment and performance of the Borrower’s obligations under the Loan
Documents. The Bank shall have exclusive dominion and control, including the exclusive right of
withdrawal, over such account and the Borrower hereby grants the Bank a security interest in the LC
Collateral Account. Other than any interest earned on the investment of such deposits, which
investments shall be made at the option and sole discretion of the Bank and at the Borrower’s risk
and expense, such deposits shall not bear interest. Interest or profits, if any, on such
investments shall accumulate in such account. Moneys in such account shall be applied by the Bank
for draws on subject LCs for which it has not been reimbursed and, to the extent not so applied,
shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC
Exposure at such time or, if the maturity of the Loans has been accelerated, be applied to satisfy
any other obligations.

2.9 Existing Letters of Credit. The parties acknowledge and agree that the following
Letters of Credit have been issued by the Bank in favor of the Borrower and are outstanding on and
as of the date of this Agreement: (i) SCL013677 in the original face amount of $1,916,275 issued
on May 23, 2007 in favor of Borrower for the benefit of Standard Chartered Bank (China), and (ii)
SCL015875 in the original face amount of $2,099,265 issued on December 11, 2009 in favor of
Borrower for the benefit of Citibank, N.A., Bangkok Branch (collectively, the “Existing Letters of
Credit”). It is expressly understood and agreed by each of the parties hereto that the Existing
Letters of Credit shall (i) constitute and be deemed to be subject LCs for all purposes of this
Agreement, the Note and the other Loan Documents, and (ii) remain in full force and effect.
Borrower hereby ratifies, confirms and reaffirms in all respects its obligations under and with
respect to the Existing Letters of Credit.

3. Representations and Warranties. The Borrower hereby makes the following
representations and warranties, which shall be continuing in nature and remain in full force and
effect until the Obligations are paid in full, and which shall be true and correct except as
otherwise set forth on the Addendum attached hereto and incorporated herein by reference (the
“Addendum”):

3.1. Existence, Power and Authority. Each Company is duly organized, validly existing
and in good standing under the laws of the State of its incorporation or organization and has the
organizational power and authority to own and operate its assets and to conduct its business as now
or proposed to be carried on, and is duly qualified, licensed and in good standing to do business
in all jurisdictions where its ownership of property or the nature of its business requires such
qualification or licensing, except where the failure to be so qualified or licensed could not
reasonably be expected to result in a material adverse change in its business, assets, operations,
condition (financial or otherwise) or results of operations. Each Company is duly authorized to
execute and deliver the Loan Documents to which it is a party, all necessary organizational action
to authorize the execution and delivery of the Loan Documents has been properly taken, and the
Borrower is and will continue to be duly authorized to borrow under this Agreement and to perform
all of the other terms and provisions of the Loan Documents.

 

 

 

3.2. Financial Statements. The Borrower has delivered or caused to be delivered to
the Bank its most recent balance sheet, income statement and statement of cash flows (as
applicable, the “Historical Financial Statements”). The Historical Financial Statements are true,
complete and accurate in all material respects and fairly present the financial condition, assets
and liabilities, whether accrued, absolute, contingent or otherwise and the results of the
Companies’ operations for the period specified therein. The Historical Financial Statements have
been prepared in accordance with generally accepted accounting principles in effect from time to
time (“GAAP”) consistently applied from period to period, subject in the case of interim statements
to normal year-end adjustments and to any customary comments and notes reasonably acceptable to the
Bank.

3.3. No Material Adverse Change. Since the date of the most recent Financial
Statements (as hereinafter defined), the Companies on a consolidated basis have not suffered any
damage, destruction or loss, and no event or condition has occurred or exists, which has resulted
or could reasonably be expected to result in a material adverse change in their business, assets,
operations, condition (financial or otherwise) or results of operation.

3.4. Binding Obligations. Each Company has full power and authority to enter into the
transactions provided for in this Agreement and the other Loan Documents; and the Loan Documents,
when executed and delivered by such Company, will constitute the legal, valid and binding
obligations of such Company enforceable in accordance with their terms.

3.5. No Defaults or Violations. There does not exist any Default or Event of Default
or any default or violation by any Company of or under any of the terms, conditions or obligations
of: (i) its partnership agreement if such Company is a partnership, its articles or certificate of
incorporation, regulations or bylaws if such Company is a corporation or its other organizational
documents as applicable; (ii) any indenture, mortgage, deed of trust, franchise, permit, contract,
agreement, or other instrument to which it is a party or by which it is bound, the violation of
which could reasonably be expected to have a material adverse effect on the business, assets,
operations, condition (financial or otherwise) or results of operations of the Companies on a
consolidated basis; or (iii) in any material respect, any law, ordinance, regulation, ruling,
order, injunction, decree, condition or other requirement applicable to or imposed upon it by any
law, the action of any court or any governmental authority or agency; and the consummation of this
Agreement and the transactions set forth herein will not result in any such default or violation or
Event of Default.

3.6. Title to Assets. Each Company has good and marketable title to the assets
reflected on the most recent Financial Statements, free and clear of all liens and encumbrances,
except for (i) current taxes and assessments not yet due and payable, (ii) assets disposed of by
such Company in the ordinary course of business since the date of the most recent Financial
Statements, and (iii) Permitted Encumbrances (as hereinafter defined).

3.7. Litigation. There are no actions, suits, proceedings or governmental
investigations pending or, to the knowledge of the Borrower, threatened against any Company, which
could reasonably be expected to result in a material adverse change in its business, assets,
operations, condition (financial or otherwise) or results of operations of the Companies on a
consolidated basis and there is no basis known to the Borrower for any action, suit, proceeding or
investigation which could reasonably be expected to result in such a material adverse change. All
pending litigation against any domestic Company and litigation threatened in writing, in each case
as of the date of this Agreement, is listed on the Addendum.

3.8. Tax Returns. Each Company has filed all returns and reports that are required to
be filed by it in connection with any federal, state or local tax, duty or charge levied, assessed
or
imposed upon it or its property or withheld by it, including income, unemployment, social
security and similar taxes, and all of such taxes have been either paid or adequate reserve or
other provision has been made therefor.

 

 

 

3.9. Employee Benefit Plans. Each employee benefit plan as to which any Company may
have any liability complies in all material respects with all applicable provisions of the Employee
Retirement Income Security Act of 1974 (as amended from time to time, “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) no Company has withdrawn from any such
plan or initiated steps to do so, and (iv) no steps have been taken to terminate any such plan.

3.10 Environmental Matters. Each Company is in compliance, in all material respects,
with all Environmental Laws (as hereinafter defined), including, without limitation, all
Environmental Laws in jurisdictions in which such Company 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 otherwise disclosed on the Addendum, no litigation or proceeding
arising under, relating to or in connection with any Environmental Law is pending or, to the best
of the Borrower’s knowledge, threatened against any Company, any real property which any Company
holds or has held an interest or any past or present operation of any Company. No release,
threatened release or disposal of hazardous waste, solid waste or other wastes is occurring, or to
the best of the Borrower’s knowledge has occurred, on, under or to any real property in which any
Company holds or has held any interest or performs or has performed any of its operations, in
violation of any Environmental Law. As used in this Section, “litigation or proceeding” means any
demand, claim notice, suit, suit in equity, action, administrative action, investigation or inquiry
whether brought by a governmental authority or other person, and “Environmental Laws” means all
provisions of laws, statutes, ordinances, rules, regulations, permits, licenses, judgments, writs,
injunctions, decrees, orders, awards and standards promulgated by any federal, state or local
governmental authority concerning health, safety and protection of, or regulation of the discharge
of substances into, the environment.

3.11. Intellectual Property. Each Company owns or is licensed to use all patents,
patent rights, trademarks, trade names, service marks, copyrights, intellectual property,
technology, know-how and processes necessary for the conduct of its business as currently conducted
that are material to the condition (financial or otherwise), business or operations of the
Companies on a consolidated basis.

3.12. Regulatory Matters. No part of the proceeds of the Loan will be used for
“purchasing” or “carrying” any “margin stock” within the respective meanings of each of the quoted
terms under Regulation U of the Board of Governors of the Federal Reserve System as now and from
time to time in effect or for any purpose which violates the provisions of the Regulations of such
Board of Governors.

3.13. Solvency. After giving effect to the transactions contemplated by the Loan
Documents, (i) the aggregate value of the Borrower’s assets will exceed its liabilities (including
contingent, subordinated, unmatured and unliquidated liabilities), (ii) the Borrower will have
sufficient cash flow to enable it to pay its debts as they become due, and (iii) the Borrower will
not have unreasonably small capital for the business in which it is engaged.

 

 

 

3.14. Disclosure. None of the Loan Documents contains or will contain any untrue
statement of material fact or omits or will omit to state a material fact necessary in order to
make the statements contained in this Agreement or the Loan Documents not misleading. There is no
fact known to the Borrower which materially adversely affects or, so far as the Borrower can now
foresee, might materially adversely affect the business, assets, operations, condition (financial
or otherwise) or results of operation of any Company and which has not otherwise been fully set
forth in this Agreement or in the Loan Documents.

4. Affirmative Covenants. The Borrower agrees that from the date of execution of this
Agreement until all Obligations have been paid in full and any commitments of the Bank to the
Borrower have been terminated, the Borrower will:

4.1. Books and Records. Maintain, and cause each other Company to maintain, books and
records in accordance with GAAP and give representatives of the Bank access thereto at all
reasonable times, upon reasonable advance notice and in the presence of a representative of the
Borrower, including permission to examine, copy and make abstracts from any of such books and
records and such other information as the Bank may from time to time reasonably request, and the
Borrower will make available to the Bank for examination copies of any reports, statements and
returns which the Borrower or any other Company may make to or file with any federal, state or
local governmental department, bureau or agency. In addition, each Company will permit the Bank at
all reasonable times upon reasonable advance notice to consult with such Company’s directors,
officers, accountants, plan administrators and, in the presence of an officer or designated
representative of the Borrower, employees in respect of its financial condition, properties and
operations, each of which parties is hereby authorized to make such information available to the
Bank to the same extent it would to such Company.

4.2. Interim Financial Statements; Certificate of No Default. Furnish the Bank within
45 days after the end of each of the first three fiscal quarters of each fiscal year the Borrower’s
Financial Statements for such period, in reasonable detail, certified by an authorized officer of
the Borrower and prepared in accordance with GAAP consistently applied from period to period. The
Borrower shall also deliver a certificate as to its compliance with applicable financial covenants
(containing detailed calculations of all financial covenants) for the period then ended and whether
any Event of Default exists, and, if so, the nature thereof and the corrective measures the
Borrower proposes to take. As used in this Agreement, “Financial Statements” means the Borrower’s
consolidated and, if required by the Bank in its reasonable discretion, consolidating balance
sheets, income statements and statements of cash flows for the year, month or quarter together with
year-to-date figures and comparative figures for the corresponding periods of the prior year.

4.3. Annual Financial Statements; Budget; Other Financial Info. (a) Furnish the
Borrower’s Financial Statements to the Bank within 120 days after the end of each fiscal year.
Those Financial Statements will be prepared on an audited basis in accordance with GAAP by an
independent certified public accountant selected by the Borrower and reasonably satisfactory to the
Bank. Audited Financial Statements shall contain the unqualified opinion of an independent
certified public accountant and all accountant examinations shall have been made in accordance with
GAAP consistently applied from period to period. The Borrower shall also deliver to the Bank (i)
copies of any management letters and auditor letters relating to its Financial Statements and (ii)
a certificate as to its compliance with applicable financial covenants (containing detailed
calculations of all financial covenants) for the period then ended and whether any Event of Default
exists, and, if so, the nature thereof and the corrective measures the Borrower proposes to take.

(b) [INTENTIONALLY OMITTED]

 

 

 

(c) promptly following any request therefor, furnish such other information regarding
the operations, business affairs and financial condition of the Borrower or any Subsidiary,
or compliance with the terms of this Agreement, as the Bank may reasonably request.

4.4. Payment of Taxes and Other Charges. Pay and discharge when due all indebtedness
and all taxes, assessments, charges, levies and other liabilities imposed upon any Company, its
income, profits, property or business, except those which currently are being contested in good
faith by appropriate proceedings and for which the Borrower shall have set aside adequate reserves
or made other adequate provision with respect thereto acceptable to the Bank in its reasonable
discretion.

4.5. Maintenance of Existence, Operation and Assets. Do all things necessary to (i)
except as expressly permitted by Section 5.5, maintain, renew and keep in full force and effect
each Company’s organizational existence and all rights, permits and franchises necessary to enable
it to continue its business as currently conducted; (ii) continue in operation in substantially the
same manner as at present; (iii) keep each Company’s properties in good operating condition and
repair, ordinary wear and tear excepted; and (iv) make all necessary and proper repairs, renewals,
replacements, additions and improvements thereto.

4.6. Insurance. Maintain, and will cause each other Company to maintain, with
financially sound and reputable insurers, insurance with respect to its property and business
against such casualties and contingencies, of such types and in such amounts, as is customary for
established companies engaged in the same or similar business and similarly situated.

4.7. Compliance with Laws. Comply. and cause each other Company to, comply, in all
material respects, with all laws applicable to it and each Company and to the operation of its and
each Company’s business (including without limitation any statute, ordinance, rule or regulation
relating to employment practices, pension benefits or environmental, occupational and health
standards and controls).

4.8. Bank Accounts. Establish and maintain at the Bank the Borrower’s primary
domestic depository accounts.

4.9. Financial Covenants. Comply with all of the financial and other covenants, if
any, set forth on the Addendum (the “Financial Covenants”).

4.10. Additional Reports. Provide prompt written notice to the Bank of the occurrence
of any of the following (together with a description of the action which the Borrower or the
applicable Company proposes to take with respect thereto): (i) any Event of Default or any event,
act or condition which, with the passage of time or the giving of notice, or both, would constitute
an Event of Default (a “Default”), (ii) any litigation filed by or against any Company involving
(A) potential damages, amounts in dispute or fines of more than $1,500,000, (B) any temporary or
permanent injunctive relief, or (C) criminal charges, (iii) any Reportable Event or Prohibited
Transaction with respect to any Employee Benefit Plan(s) (as defined in ERISA) or (iv) any event
which likely may result in a material adverse change in the business, assets, operations, condition
(financial or otherwise) or results of operation of the Companies on a consolidated basis.

4.11. Further Assurances. (a) Subject to applicable law, at the request of the Bank, the
Borrower shall cause each of its domestic Subsidiaries formed or acquired after the date of this
Agreement to execute a guaranty in favor of the Bank in form and substance satisfactory to the
Bank, in its sole discretion.

 

 

 

(b) Without limiting the foregoing, Borrower will, and will cause each other Company
to, execute and deliver, or cause to be executed and delivered, to the Bank such documents,
agreements and instruments, and will take or cause to be taken such further actions
(including the filing and recording of financing statements, fixture filings, mortgages,
deeds of trust and other documents), which may be required by law or which the Bank may,
from time to time, reasonably request to carry out the terms and conditions of this
Agreement and the other Loan Documents.

5. Negative Covenants. The Borrower covenants and agrees that from the date of this
Agreement until all Obligations have been paid in full and any commitments of the Bank to the
Borrower have been terminated, except as set forth in the Addendum, the Borrower will not, and will
not permit any other Company to, without the Bank’s prior written consent:

5.1. Indebtedness. Create, incur, assume or suffer to exist any indebtedness for
borrowed money other than: (i) the Loan and any subsequent indebtedness to the Bank; (ii) open
account trade debt incurred in the ordinary course of business, (iii) secured indebtedness
permitted under Section 5.2 hereof and refinancing thereof, provided that the principal amount does
not increase, (iv) indebtedness in favor of the Borrower or any other Company, (v) unsecured
indebtedness in respect of bid, performance or surety, appeal or similar bonds, and completion
guarantees, incurred in the ordinary course of business, (vi) interest rate hedging obligations,
(vii) indebtedness listed on the Addendum existing on the date hereof (the “Existing Indebtedness”)
so long as such indebtedness is unsecured, (viii) additional unsecured indebtedness not exceeding
an aggregate principal amount of three million dollars ($3,000,000) at any one time outstanding for
all Companies, and (ix) other additional unsecured indebtedness not exceeding an aggregate
principal amount of twelve million dollars ($12,000,000) at any one time outstanding for all
Companies (“Additional Unsecured Indebtedness”); provided, however, that in no
event shall any such Additional Unsecured Indebtedness incurred after the date of this Agreement
which is provided by any Domestic Lender to any Company, or by any Foreign Lender to any domestic
Company (x) contain any representations, warranties, indemnities, covenants, pricing terms or any
other terms (whether of a business nature or otherwise) that are more favorable to such Domestic
Lender or Foreign Lender, as applicable, than those contained in the Loan Documents, (y) contain
any terms that conflict with, or that are otherwise more restrictive on any Company than, any of
the terms of the Loan Documents, or (z) confer rights on or to such Domestic Lender or Foreign
Lender, as applicable, that are not conferred on or to the Bank under the Loan Documents or
otherwise.

For purposes of this Section 5.1, the following terms shall have the following meanings:

“Domestic Lender” means (A) a financial institution, or a firm, corporation or other entity
otherwise engaged in making, purchasing, holding or investing in loans and/or other extensions of
credit, in any such case that is (1) organized under the federal laws of the United States of
America, or (2) located in, or organized under the laws of, one of the states of the United States
of America or any territory or other political subdivision of the United States of America, and (B)
any branch, Subsidiary or affiliate of a financial institution, firm, corporation or other entity
described in the immediately preceding clause (A) which is located outside of, or otherwise
organized under the laws of any jurisdiction outside of, the United States of America or any
territory or political subdivision thereof.

“Foreign Lender” means (A) a financial institution, or a firm, corporation or other entity
otherwise engaged in making, purchasing, holding or investing in loans and/or other extensions of
credit, in any such case that is located in, or organized under the laws of, a jurisdiction other
than the United States of America or any one of the states, territories or other political
subdivisions of the United States of America, and (B) any branch, Subsidiary or affiliate of a
financial institution, firm, corporation or other entity described in the immediately preceding
clause (A) which is located in, or otherwise organized
under the laws of, the United States of America or any state, territory or political
subdivision of the United States of America, in each case to the extent not otherwise covered by
the definition of “Domestic Lender”.

 

 

 

5.2. Liens and Encumbrances. Except as provided in Section 3.6, create, assume, incur
or permit to exist any mortgage, pledge, encumbrance, security interest, lien or charge of any kind
upon any of its property, now owned or hereafter acquired, or acquire or agree to acquire any kind
of property subject to any conditional sales or other title retention agreement, other than
(collectively, “Permitted Encumbrances”):

(i) any tax lien, or any lien securing workers’ compensation or unemployment insurance
obligations, or any mechanic’s, carrier’s or landlord’s lien, or any lien arising under ERISA, or
any security interest arising under article four (Bank deposits and collections) or five (letters
of credit) of the Uniform Commercial Code, or any similar security interest or other lien,
provided, however, that this clause (i) shall apply only to security interests and other liens
arising by operation of law (whether statutory or common law) and in the ordinary course of
business and shall not apply to any security interest or other lien that secures any indebtedness
for borrowed money or any guaranty thereof or any obligation that is in material default in any
manner (other than any default contested in good faith by timely and appropriate proceedings
effective to stay enforcement of the security interest or other lien in question);

(ii) zoning or deed restriction, public utility easement, minor title irregularities and
similar matters having no adverse effect as a practical matter on the ownership or use of any of
the property in question;

(iii) any lien securing or given in lieu of surety, stay, appeal or performance bonds, or
securing performance of contracts or bids (other than contracts for the payment of money borrowed),
or deposits required by law or governmental regulations or by any court order, decree, judgment or
rule or as a condition to the transaction of business or the exercise of any right, privilege or
license, provided, however, that this clause (iii) shall not apply to any lien or deposit securing
an obligation that is in material default in any manner (other than any default contested in good
faith by timely and appropriate proceedings effective to stay enforcement of the security interest
or other lien in question);

(iv) any mortgage, security interest or other lien securing only the Loans and other
obligations under this Agreement and the other Loan Documents;

(v) any mortgage, security interest, capitalized lease or other lien (each a “purchase money
security interest”) which is created or assumed in purchasing, constructing or improving any real
property or equipment or to which any such property is subject when purchased, provided,
however, that (A) the purchase money security interest shall be confined to the aforesaid
property, (B) the indebtedness secured thereby does not exceed the total cost of the purchase,
construction or improvement, (C) any such indebtedness, if repaid in whole or in part, cannot be
reborrowed and (D) the aggregate amount of all indebtedness secured by purchase money security
interests permitted by this clause (vi) shall not at any time exceed an aggregate amount equal to
five million dollars ($5,000,000) at any one time outstanding for all Companies;

(vi) any mortgage, security interest or other lien (other than any purchase money security
interest) which encumbers any fixed asset of any corporation or other business entity that is not a
Subsidiary of Borrower on the date of this Agreement but which becomes, by acquisition, a
subsidiary of Borrower after the date of this Agreement, but only if (A) the mortgage, security
interest or other lien in question encumbered the fixed asset in question at the time such
subsidiary is acquired and (B) the
aggregate amount of all indebtedness secured by mortgages, security interests or other liens
permitted by this clause (vi) does not at any time exceed an aggregate amount equal to five million
dollars ($5,000,000) at any one time outstanding for all Companies;

 

 

 

(vii) any lease other than any capitalized lease (it being agreed that a capitalized lease is
a lien rather than a lease for the purposes of this Agreement);

(viii) any mortgage, security interest or other lien which (A) is fully disclosed in
Borrower’s most recent financial statements or in the supplemental schedule and (B) secures only
indebtedness that is fully disclosed in Borrower’s most recent financial statements or in the
supplemental schedule or any renewal or refinancing of any such indebtedness if and to the extent
that the renewal or refinancing does not increase the then amount of the indebtedness renewed or
refinanced;

(ix) any mortgage, security interest or other lien not otherwise permitted under this Section
5.2; provided, however, that the aggregate amount of all indebtedness secured by
mortgages, security interests and other liens permitted by this clause (vii) does not at any time
exceed an aggregate amount equal to ten million dollars ($10,000,000) at any one time outstanding
for all Companies; and

(x) any financing statement perfecting a security interest that would be permissible under
this Section 5.2.

5.3. Guarantees. Guarantee, endorse or become contingently liable for the obligations
of any person, firm, corporation or other entity, except (i) in connection with the endorsement and
deposit of checks in the ordinary course of business for collection, (ii) any existing or future
guaranty by a Company of any liability owing by any other Company, (iii) any guaranty by any
Subsidiary of the Borrower executed in favor of the Bank, and (iv) any existing or future guaranty;
provided, however, that after giving effect thereto, the maximum aggregate amount
of all liabilities incurred by the Companies pursuant to one or more guaranties (exclusive of
guaranties permitted by clauses (i) through (iii) above) would not at any time exceed an amount
equal to ten million dollars ($10,000,000) at any one time outstanding for all Companies.

5.4. Loans or Advances. Purchase or hold beneficially any stock, other securities or
evidences of indebtedness of, or make or have outstanding, any loans or advances to, or otherwise
extend credit to, or make any investment or acquire any interest whatsoever in, any other person,
firm, corporation or other entity, except (i) investments disclosed on the Borrower’s Historical
Financial Statements, (ii) any existing or future advances made to an officer or employee of the
Borrower solely for the purpose of paying ordinary and reasonable business expenses of the
Borrower, (iii) any existing or future investment in direct obligations of the United States of
America or any agency thereof, in certificates of deposit issued by the Bank, or in any other
money-market investment if it carries the highest quality rating of any nationally-recognized
rating agency; provided, however, that no investment permitted pursuant to this
clause (iii) shall mature more than ninety (90) days after the date when made, (iv) any endorsement
of a check or other medium of payment for deposit or collection, or any similar transaction in the
normal course of business, (v) purchases or other acquisitions of all or substantially all of the
capital stock of any corporation or other business enterprise expressly permitted under Section
5.8, or (vi) any existing or future investment, advance or loan; provided, however,
that after giving effect thereto the aggregate amount of all investments, advances and loans
(exclusive of investments, advances and loans permitted under clauses (i) through (v) of this
Section 5.4) made by the Companies would not at any time exceed an aggregate amount equal to
fifteen million dollars ($15,000,000) for all Companies.

 

 

 

5.5. Merger or Transfer of Assets. Liquidate or dissolve, or merge or consolidate
with or into any person, firm, corporation or other entity, or sell, lease, transfer or otherwise
dispose of all
or any substantial part of its property, assets (other than (y) transfers of inventory in the
ordinary course of business and (z) other assets in the ordinary course of business having a value
of not more than $3,000,000 in any fiscal year of Borrower), operations or business, whether now
owned or hereafter acquired, except, so long as both immediately before and after giving effect
thereto, no Default of Event of Default exists or shall exist, a merger or consolidation involving
only Subsidiaries of the Borrower, any merger of Borrower with one or more of its Subsidiaries in
which Borrower is the surviving corporation or any dissolution and liquidation of a Subsidiary of
the Borrower.

5.6. Change in Business, Management or Ownership. Make or permit any change in its
form of organization (except pursuant to a transaction permitted pursuant to Section 5.5), or the
nature of its business as carried on as of the date hereof.

5.7. Dividends. Declare or pay any dividends on or make any distribution with respect
to any class of its equity or ownership interest, or purchase, redeem, retire or otherwise acquire
any of its equity; provided, however, that Borrower may declare and pay dividends
(in cash or in kind) so long as (i) no Default or Event of Default shall then exist or would
thereupon occur, and (ii) the amount or value of such dividend, when added to the amount and/or
value of all dividends made by Borrower in the fiscal year in which such dividend is proposed to be
made, does not exceed five million dollars ($5,000,000); and provided, further,
that any Subsidiary of Borrower may declare and pay dividends to (in cash or in kind) to the
Borrower; and provided, further, that Borrower may purchase, redeem, retire or
otherwise acquire any of its equity so long as (i) no Default or Event of Default shall then exist
or would thereupon occur, and (ii) the dollar amount of such purchase, redemption, retirement or
acquisition, when added to the dollar amounts of all purchases, redemptions, retirements or
acquisitions of its equity made by Borrower during the period commencing on the date hereof and
ending on the date of the proposed transaction, does not exceed fifteen million dollars
($15,000,000).

5.8. Acquisitions. Make acquisitions of all or substantially all of the property or
assets of any person, firm, corporation or other entity, except that the Borrower may make
purchases or other acquisitions of all or substantially all of the capital stock or assets and
business of any corporation, division or other business enterprise so long as (i) the aggregate
consideration of any individual transaction does not exceed $35,000,000 and the aggregate
consideration of all such transactions consummated during the term of this Agreement does not
exceed $55,000,000, (ii) both immediately before and after giving effect to the proposed
transaction, no Default or Event of Default shall exist, (iii) both immediately before and after
giving effect to the proposed transaction, Borrower shall be in compliance with the Financial
Covenants, (iv) (A) not less than 30 days prior to the consummation of the proposed transaction,
the Borrower shall have provided the Bank with notice of such transaction, (B) not less than ten
(10) Business Days prior to the consummation of the proposed transaction, (1) copies of then
available drafts of all agreements and other instruments and documents to be executed in connection
with such transaction and (2) a copy of all business and financial information reasonably requested
by the Bank including pro forma consolidating financial statements and statements of cash flow, and
(C) not less than two (2) Business Days prior to the consummation of the proposed transaction,
copies of the final forms of all agreements and other instruments and documents to be executed in
connection with such transaction (collectively, the “Final Agreements”) (together with all drafts
thereof produced after the delivery of the drafts delivered under clause (iv)(B) of this Section
5.8), and (v) the terms of the proposed transaction are reasonably acceptable to the Bank. So long
as Bank shall have received all of the items referred to in the foregoing clause (iv) of this
Section 5.8 within the time periods set forth therein, the Bank shall notify the Borrower not later
than one (1) Business Day prior to the consummation of the proposed transaction whether or not the
terms of such transaction are acceptable to the Bank. In the event that Bank so notifies the
Borrower that the terms of the proposed transaction are acceptable to the Bank, so long as all of
the conditions set forth in this Section 5.8 shall have been met, the Borrower may proceed to
consummate the proposed transaction in accordance with, and utilizing, the Final Agreements
with respect to such proposed transaction (it being understood that such Final Agreements may
contain minor, non-substantive changes to the non-material terms thereof). Not later than ten (10)
Business Days after the consummation of any such transaction, Borrower shall deliver to Bank copies
of all of the agreements, instruments and other documents executed and delivered in connection
therewith.

 

 

 

5.9 Restrictive Agreements. Directly or indirectly, enter into, incur or permit to
exist any agreement or other arrangement after the date of this Agreement that prohibits, restricts
or imposes any condition upon (a) the ability of the Borrower or any other Company to create, incur
or permit to exist any lien, mortgage, pledge, encumbrance, security interest or charge of any kind
upon any of its property or assets, or (b) the ability of any Company to pay dividends or other
distributions with respect to any shares of its capital stock (or other form of ownership) or to
make or repay loans or advances to the Borrower or any other Company or to guarantee indebtedness
of the Borrower or any other Company; provided that (i) the foregoing shall not apply to
restrictions and conditions imposed by law or by any Loan Document and (ii) clause (a) of the
foregoing shall not apply to restrictions or conditions imposed by any agreement relating to
secured indebtedness permitted by this Agreement if such restrictions or conditions apply only to
the property or assets securing such indebtedness.

6. Events of Default. The occurrence of any of the following will be deemed to be an
Event of Default:

6.1. Covenant Default. Any Company shall fail to observe or perform or otherwise
default in the performance of any of the covenants or agreements contained in Sections 2.4,
2.5,4.1, 4.2, 4.3, 4.5, 4.7, 4.9, 4.10, 4.11 or 5.1 through 5.9 (inclusive) of this Agreement.

6.2. Covenant Default with Grace. Any Company shall fail to observe or perform or
otherwise default in the performance of any covenant or agreement contained in this Agreement
(other than those referred to in Section 6.1 above) and such failure or default shall continue
unremedied or uncured for a period of thirty (30) days after the earlier of knowledge by any
Company of such failure or default or notice thereof from the Bank; provided that in no
event shall this Section 6.2 in any way serve to increase any of the grace periods set forth in
Section 10 of the Note or in any other Loan Document.

6.3. Breach of Warranty. Any Financial Statement, representation, warranty or
certificate made or furnished by the Borrower or any other Company to the Bank in connection with
this Agreement shall be false, incorrect or incomplete in any material respect when made.

6.4. Other Default. The occurrence of an Event of Default as defined in the Note or
any of the Loan Documents.

Upon the occurrence and during the continuance of an Event of Default, the Bank will have all
rights and remedies specified in the Note and the Loan Documents and all rights and remedies (which
are cumulative and not exclusive) available under applicable law or in equity.

7. Conditions. The Bank’s obligation to make any advance under the Loan is subject to
the conditions that as of the date of the advance:

7.1. Conditions to Effectiveness of this Agreement. The obligations of the Bank to
make Loans and to issue subject LCs hereunder shall not become effective until the date on which
each of the conditions set forth on the Closing Checklist is satisfied, which Closing Checklist is
attached hereto as Exhibit A and hereby incorporated herein by reference.

 

 

 

7.2 Conditions to Each Advance. In addition to the satisfaction of the conditions set
forth in Section 7.1 above, the obligation of the Bank to make a Loan and to issue, amend, renew or
extend any subject LC, is subject to the satisfaction of the following conditions:

(a) The representations and warranties of the Borrower set forth in this Agreement
shall be true and correct on and as of the date of such Loan or the date of issuance,
amendment, renewal or extension of such letter of credit, as applicable.

(b) At the time of and immediately after giving effect to such Loan or the issuance,
amendment, renewal or extension of such subject LC, as applicable, no Default or Event of
Default shall have occurred and be continuing.

(c) After giving effect to any Loan or the issuance of any subject LC, the aggregate
outstanding balance of the Loans plus the aggregate face amount of all outstanding subject
LCs shall not exceed $30,000,000.

Each Loan and each issuance, amendment, renewal or extension of a subject LC shall be deemed to
constitute a representation and warranty by the Borrower on the date thereof as to the matters
specified in paragraphs (a), (b) and (c) of this Section.

8. Expenses. The Borrower agrees to pay the Bank, upon the execution of this
Agreement, and otherwise on demand, all reasonable out-of-pocket costs and expenses incurred by the
Bank in connection with the preparation, negotiation and delivery of this Agreement and the other
Loan Documents, and any modifications thereto, and the collection of all of the Obligations,
including but not limited to enforcement actions, relating to the Loan, whether through judicial
proceedings or otherwise, or in defending or prosecuting any actions or proceedings arising out of
or relating to this Agreement, including reasonable fees and expenses of counsel (which may include
costs of in-house counsel), expenses for auditors, appraisers and environmental consultants, lien
searches, recording and filing fees and taxes.

9. Increased Costs. On written demand, together with written evidence of the
justification therefor, the Borrower agrees to pay the Bank all direct costs incurred and any
losses suffered or payments made by the Bank as a consequence of making the Loan by reason of any
change in law or regulation, or the interpretation thereof, imposing any reserve, deposit,
allocation of capital or similar requirement (including without limitation, Regulation D of the
Board of Governors of the Federal Reserve System) on the Bank, its holding company or any of their
respective assets.

10. Miscellaneous.

10.1. Notices: All notices, demands, requests, consents, approvals and other
communications required or permitted hereunder (“Notices”) must be in writing and will be effective
upon receipt. Notices may be given in any manner to which the parties may separately agree,
including electronic mail. Without limiting the foregoing, first-class mail, facsimile
transmission and commercial courier service are hereby agreed to as acceptable methods for giving
Notices. Regardless of the manner in which provided, Notices may be sent to a party’s address as
set forth above or to such other address as any party may give to the other for such purpose in
accordance with this section.

10.2. Preservation of Rights. No delay or omission on the Bank’s part to exercise any
right or power arising hereunder will impair any such right or power or be considered a waiver of
any such right or power, nor will the Bank s action or inaction impair any such right or power.
The Bank’s
rights and remedies hereunder are cumulative and not exclusive of any other rights or remedies
which the Bank may have under other agreements, at law or in equity.

 

 

 

10.3. Illegality. If any provision contained in this Agreement should be invalid,
illegal or unenforceable in any respect, it shall not affect or impair the validity, legality and
enforceability of the remaining provisions of this Agreement.

10.4. Changes in Writing. No modification, amendment or waiver of, or consent to any
departure by the Borrower from, any provision of this Agreement will be effective unless made in a
writing signed by the party to be charged, and then such waiver or consent shall be effective only
in the specific instance and for the purpose for which given. No notice to or demand on the
Borrower will entitle the Borrower to any other or further notice or demand in the same, similar or
other circumstance.

10.5. Entire Agreement. This Agreement (including the documents and instruments
referred to herein) constitutes the entire agreement and supersedes all other prior agreements and
understandings, both written and oral, between the parties with respect to the subject matter
hereof.

10.6. Counterparts. This Agreement may be signed in any number of counterpart copies
and by the parties hereto on separate counterparts, but all such copies shall constitute one and
the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by
facsimile transmission shall be effective as delivery of a manually executed counterpart. Any
party so executing this Agreement by facsimile transmission shall promptly deliver a manually
executed counterpart, provided that any failure to do so shall not affect the validity of the
counterpart executed by facsimile transmission.

10.7. Successors and Assigns. This Agreement will be binding upon and inure to the
benefit of the Borrower and the Bank and their respective heirs, executors, administrators,
successors and assigns; provided, however, that the Borrower may not assign this
Agreement in whole or in part without the Bank’s prior written consent and the Bank at any time may
assign this Agreement in whole or in part.

10.8. Interpretation. In this Agreement, unless the Bank and the Borrower otherwise
agree in writing, the singular includes the plural and the plural the singular; words importing any
gender include the other genders; references to statutes are to be construed as including all
statutory provisions consolidating, amending or replacing the statute referred to; the word “or”
shall be deemed to include “and/or”, the words “including”, “includes” and “include” shall be
deemed to be followed by the words “without limitation”; references to articles, sections (or
subdivisions of sections) or exhibits are to those of this Agreement; and references to agreements
and other contractual instruments shall be deemed to include all subsequent amendments and other
modifications to such instruments, but only to the extent such amendments and other modifications
are not prohibited by the terms of this Agreement. Section headings in this Agreement are included
for convenience of reference only and shall not constitute a part of this Agreement for any other
purpose. Unless otherwise specified in this Agreement, all accounting terms shall be interpreted
and all accounting determinations shall be made in accordance with GAAP. If this Agreement is
executed by more than one party as Borrower, the obligations of such persons or entities will be
joint and several.

10.9. No Consequential Damages, Etc. The Bank will not be responsible for any
damages, consequential, incidental, special, punitive or otherwise, that may be incurred or alleged
by any person or entity, including the Borrower and any Guarantor, as a result of this Agreement,
the other Loan Documents, the transactions contemplated hereby or thereby, or the use of the
proceeds of the Loan.

 

 

 

10.10. Assignments and Participations. At any time, without any notice to the
Borrower, the Bank may sell, assign, transfer, negotiate, grant participations in, or otherwise
dispose of all or any part of the Bank’s interest in the Loan. The Borrower hereby authorizes the
Bank to provide, without any notice to the Borrower, any information concerning the Borrower,
including information pertaining to the Borrower’s financial condition, business operations or
general creditworthiness, to any person or entity which may succeed to or participate in all or any
part of the Bank’s interest in the Loan.

10.11. Governing Law and Jurisdiction. This Agreement has been delivered to and
accepted by the Bank and will be deemed to be made in the State where the Bank’s office indicated
above is located. This Agreement will be interpreted and the rights and liabilities of the
parties hereto determined in accordance with the laws of the State where the Bank’s office
indicated above is located, excluding its conflict of laws rules. The Borrower hereby
irrevocably consents to the exclusive jurisdiction of any state or federal court in the county or
judicial district where the Bank’s office indicated above is located; provided that nothing
contained in this Agreement will prevent the Bank from bringing any action, enforcing any award or
judgment or exercising any rights against the Borrower individually, against any security or
against any property of the Borrower within any other county, state or other foreign or domestic
jurisdiction. The Bank and the Borrower agree that the venue provided above is the most convenient
forum for both the Bank and the Borrower. The Borrower waives any objection to venue and any
objection based on a more convenient forum in any action instituted under this Agreement.

10.12 USA PATRIOT ACT. The Bank that hereby notifies the Borrower that pursuant to
the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”), the Bank is required to obtain, verify and record information that identifies
the Borrower, which information includes the name and address of the Borrower and other information
that will allow the Bank to identify the Borrower in accordance with the Act.

10.13. WAIVER OF JURY TRIAL. EACH OF THE BORROWER AND THE BANK IRREVOCABLY WAIVES ANY
AND ALL RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY NATURE
RELATING TO THIS AGREEMENT, ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS. THE BORROWER AND THE BANK ACKNOWLEDGE THAT THE
FOREGOING WAIVER IS KNOWING AND VOLUNTARY.

[Remainder of Page Intentionally Left Blank]

 

 

 

The Borrower acknowledges that it has read and understood all the provisions of this Agreement,
including the waiver of jury trial, and has been advised by counsel as necessary or appropriate.

WITNESS the due execution hereof as a document under seal, as of the date first written above.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	WITNESS / ATTEST:	 	 	 	PREFORMED LINE PRODUCTS COMPANY	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ Caroline Vaccariello	 	 	 	By:	 	/s/ Eric R. Graef	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	Caroline Vaccariello	 	 	 	 	 	Name:
	 	Eric R. Graef	 	 
	 

	 	 	 	 	 	 	 	 	 	Title:
	 	CFO — Vice President of Finance	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	PNC BANK, NATIONAL ASSOCIATION	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	By:	 	/s/ Christian S. Brown	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	Name:
	 	Christian S. Brown	 	 
	 

	 	 	 	 	 	 	 	 	 	Title:
	 	Vice President	 	 

Signature Page to Loan Agreement

 

 

 

ADDENDUM to that certain Loan Agreement dated February 5, 2010 between PREFORMED LINE PRODUCTS
COMPANY as the Borrower and PNC Bank, National Association, as the Bank. Capitalized terms used in
this Addendum and not otherwise defined shall have the meanings given them in the Agreement.
Section numbers below refer to the sections of the Agreement.

3.6 Title to Assets. Describe additional liens and encumbrances below with respect to
domestic Companies:

3.7 Litigation. Describe pending and threatened litigation, investigations, proceedings,
etc. below with respect to domestic Companies:

5.1 Indebtedness. Describe unsecured indebtedness existing on the date of the Agreement
below:

Signature Page to Loan Agreement

 

 

 

CONTINUATION OF ADDENDUM

FINANCIAL COVENANTS

(1) The Borrower will maintain at all times a minimum Tangible Net Worth of $145,000,000, to be
increased on each December 31 commencing on December 31, 2010, by an amount equal to 50.0% of the
Borrower’s net income after taxes (if a positive number) for the fiscal year then ending.

(2) The Borrower will maintain at all times a ratio of Funded Debt to EBITDA on a rolling four
quarter basis of less than 2.50 to 1.0.

(3) The Borrower will maintain as of the end of each fiscal quarter, on a rolling four quarters
basis, an Interest Coverage Ratio of at least 3.50 to 1.0.

As used herein:

“EBIT” means net income plus interest expense plus federal, state and local income
tax expense.

“EBITDA” means net income plus interest expense plus federal, state and local
income tax expense plus depreciation plus amortization.

“Interest Coverage Ratio” means (i) EBIT, divided by (ii) the sum of interest expense.

“Funded Debt” means all indebtedness for borrowed money having an original term of more than one
year, including but not limited to capitalized lease obligations, reimbursement obligations in
respect of letters of credit, and guaranties of any such indebtedness.

“Tangible Net Worth” means stockholders’ equity in the Borrower less any advances to
affiliated parties less all items properly classified as intangibles.

All of the above financial covenants shall be computed and determined in accordance with GAAP
applied on a consistent basis (subject to normal year-end adjustments).

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