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EXHIBIT 10.5
[MELLON LOGO] MELLON GLOBAL CASH MANAGEMENT(SM) SERVICES
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AUTOMATIC BORROWING SERVICE - MELLON BANK, N.A. Page 1 of 3
Agreement Letter
Sylvan Inc. (the "Company") has requested that Mellon Bank, N.A. (the "Bank")
provide the Company with that service which the Bank refers to as its Automatic
Borrowing Service (the "Service") pursuant to which the Bank shall automatically
make advances of funds ("Advances") to and accept repayments thereof
("Payments") from Bank customers. In order to induce the Bank to make the
Service available to the Company, the Company agrees that the following terms
and conditions will govern the Bank's provision and the Company's receipt of the
Service:
1. Prior to the Company's use of the Service, the Bank will have granted
the Company a line of credit and the Company will have executed and
entered into with the Bank, an agreement providing for such line of
credit in the form attached hereto as Exhibit A to this Agreement (the
"Credit Agreement"). The Company agrees with the Bank that in addition
to the terms and conditions of this Agreement, the Credit Agreement
will govern all Advances and Payments and matters related thereto and
is expressly incorporated herein.
2. The Company hereby designates the account identified in Exhibit B to
this Agreement as the account to be used in connection with the Service
(the "Account"). All Advances made by the Bank will be credited to the
Account and all Payments made by the Company will be debited from the
Account. The Company acknowledges and agrees that in addition to the
terms and conditions of this Agreement, the Account will be subject to
the terms and conditions applicable to demand deposit accounts
maintained at the Bank.
3. (a) As a means to utilizing the Service, the Company and the Bank have
agreed upon each of the following:
(i) a target balance ("Target Balance") which shall be the
balance which, except as otherwise specified in this
Agreement, the Service shall attempt to maintain in the
Account;
(ii) an advance trigger amount ("Advance Trigger") which shall be
the Account balance amount which, if reached, shall trigger
an automatic Advance by the Bank to the Company by means of a
credit to the Account;
(iii) an advance increment ("Advance Increment") which shall be the
incremental amount of any Advance made by the Bank to the
Company;
(iv) a payment trigger amount ("Payment Trigger") which shall be
the Account balance amount which, if reached, shall trigger a
Payment to the Bank by means of a debit to the Account;
(v) a payment increment ("Payment Increment") which shall be the
incremental amount of any Payment made by the Company
pursuant to the Service.
(b) The Target Balance, Advance Trigger, Payment Trigger, Advance
Increment and Payment Increment, which the Company and the Bank
have agreed upon are set forth on Exhibit B attached hereto. For
all purposes of this Agreement, the Company and the Bank may amend
Exhibit B from time to time by mutual agreement. Such agreement may
be reached by telephone in which event the Bank shall proceed to
revise Exhibit B accordingly. The Bank's records shall be presumed
correct, absent manifest error.
4. (a) On each banking day at the cutoff time selected by the Company
(from the time or times then currently available), the Bank shall
review all debits and credits posted to the Account on such banking
day prior to such cutoff time. All debits and credits to the
Account shall be in accordance with the terms and conditions
established by the Bank as applicable to such matters. For all
purposes of this Agreement "banking day" shall refer to any day
upon which the Bank's principal office in Pittsburgh, Pennsylvania
is open for the conduct of substantially all of the Bank's banking
functions. The cutoff time selected by the Company is set forth on
Exhibit B.
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(b) If, during its review of the Account at the agreed upon cutoff
time, the Bank determines that the balance within the account is
less than the Target Balance and provided the Advance Trigger
Amount is reached, the Bank shall make an Advance to the Company in
one or more Advance Increments in order to bring the Account
balance as close as possible to the Target Balance.
(c) It, during its review of the Account at the agreed upon cutoff
time, the Bank determines that the balance within the Account is in
excess of the Target Balance and provided the Payment Trigger
amount is reached, the Bank shall debit the Account in one or more
Payment Increments in order to bring the balance in the Account as
close as possible to the Target Balance. In no event shall the
amount of any Payment exceed the Company's total indebtedness to
the Bank.
5. (a) On any business day, the Company may request that the Bank lend
additional funds in excess of Advances made automatically as part
of the Service. Such requests may be made by either of the
following means:
(i) by telephone call to the Bank at the telephone number
specified on Exhibit B; provided, however, that prior to
making any such request the Company shall have designated on
Exhibit B two or more individuals authorized to act for the
Company ("Authorized Representatives") in requesting
additional Advances hereunder. The Bank shall assign each
Authorized Representative a Person Identification Number
("PIN") to be used by such Authorized Representative in
requesting additional Advances. The Bank shall be authorized
and entitled to rely upon any telephonic communication
received from any person identifying himself/herself as an
Authorized Representative by means of an appropriate PIN; or
(ii) by utilization of the Bank's Telecash System in accordance
with the terms and conditions of the Bank's Telecash
Agreement.
(b) The Company expressly agrees and acknowledges that in no event
shall the aggregate amount of funds lent to the Company by the Bank
(whether automatically as part of the Service or pursuant to the
Company's request in accordance with this Section 5) exceed the
credit limit applicable to the Company as such limit is set forth
in the Credit Agreement.
6. (a) The Company will pay the Bank for the Service in accordance
with the Bank's current fees for the Service as then in effect. The
Bank may amend all fees from time to time upon thirty (30) days'
written notice to the Company.
(b) The Company agrees to pay all invoices submitted by the Bank within
thirty (30) days of the billing date set forth in the invoice. The
Company may elect to receive a credit against fees owed to the Bank
hereunder based upon the dollar amount of the balances maintained
by the Company in its accounts at the Bank. The amount of such
credit shall be determined in accordance with the Bank's then
current formulae and procedures. The Bank reserves the right to
debit the Company's account in the amount of all fees not paid when
due.
7. (a) Unless the Bank is negligent or does not act in good faith with
respect to its performance of the Service, the Company agrees to
hold the Bank harmless and indemnify the Bank from and against any
and all liabilities, losses, claims, or damages or expenses,
including reasonable attorneys' fees, which the Bank may incur in
connection with this Agreement and its performance of the Services
hereunder.
(b) In the event that the Bank breaches the standard of care set forth
in this Section 7, the Bank will be liable to the Company only for
actual damages directly caused by the Bank's breach. The Company
expressly agrees that in no event will the Bank be liable for any
indirect, special, consequential or punitive damages in connection
with the Bank's performance of the Service.
(c) Notwithstanding any other provision of this Agreement, the Bank
shall not be liable for any failure or inability to perform or any
delay in performance hereunder if such failure, inability or delay
is due to acts of God, war, civil or industrial disturbance,
strikes, natural disaster, equipment malfunction or any other cause
which are beyond the Bank's reasonable control.
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8. (a) Either party may terminate this Agreement at any time either:
(i) immediately for cause; or (ii) without cause upon prior written
notice to the other party of at least thirty (30) days.
Notwithstanding such termination, this Agreement shall remain in
full force and effect with respect to all transactions hereunder
occurring prior to the date of such termination.
(b) The Bank reserves the right to change any aspect of the Service
upon thirty (30) days' written notice to the Company.
9. (a) All notices permitted or required by this Agreement shall be in
writing and shall be deemed to have been duly given if sent by
personal delivery, mail, telegram or telex addressed to the address
specified for such party in Exhibit B.
(b) This Agreement shall inure to the benefit of and shall be binding
upon the respective successors and assigns of the parties hereto,
but it may not be assigned in whole or in part by either party
without the prior written consent of the other, except that the
Bank may freely assign this Agreement to any company that is
directly or indirectly: (i) in control of the Bank; or, (ii) under
the control of the Bank; or, (iii) under common control with the
Bank.
(c) Nothing contained in this Agreement shall be deemed to impair any
rights which the Bank may have arising out of the Credit Agreement
or by operation of law.
(d) This Agreement supersedes any prior agreements or representations
relating to the subject matter hereof. Except as specified herein,
no amendment or waiver of any provision of this Agreement shall be
effective unless evidenced in writing and signed by the Bank and
the Company.
(e) This Agreement shall be governed by the laws of the Commonwealth of
Pennsylvania.
The Company, by a duly authorized officer, agrees and assents to the matters set
forth as of the date of this letter and with an intent to be legally bound.
Very truly yours,
MELLON BANK, N.A. SYLVAN INC.
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Company
By: /s/ XXXX XXXXX-XXXXXXX By: /s/ XXXXXX X. XXXXX
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Signature Signature
Name: Xxxx Xxxxx-Xxxxxxx Name: Xxxxxx X. Xxxxx
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Title: Assistant Vice President Title: Principal Accounting Officer
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Rev 10/15/97
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Exhibit A
Credit Agreement
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Mellon will attach the loan documents for the Company's line of credit to this
Exhibit.
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Exhibit B
All information in this Exhibit must be supplied by the Company.
1. Mellon Demand Deposit Account Number: 193-7794
2. Borrowing Parameters:
Target Balance: $125,000.00
Advance Trigger: $1.00
Advance Increment: $1.00
Payment Trigger: $1.00
Payment Increment: $1.00
3. Cutoff Time: 4:30 P.M.
(The Automatic Borrowing Service operates at either 1:30 p.m. or 4:00 p.m.,
Pittsburgh time. No other time will be accepted.)
4. Mellon Bank ABS Telephone Numbers:
Pittsburgh 234-3050
In Pennsylvania 000-000-0000
Outside Pennsylvania 000-000-0000
5. Authorized Company Representatives:
(These Authorized Representatives will be permitted to request that Mellon
lend the Company additional funds.)
Name: /s/ XXXXXX X. XXXXX
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Title: CORPORATE CONTROLLER
Name:______________________
Title:_____________________
6. Company Mailing Address and Telephone Number:
(Mellon will mail material to the Company at this address and will contact
the Company by phone at this number.)
Mailing Address:
000 XXXX XXXXXX, XX XXX 000
XXXXXXXXX, XX 00000
Telephone Number: 000-000-0000
