EXHIBIT 4.3
THIRD AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
THIS THIRD AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (the
"Agreement") made the 3rd day of September, 1996 by and between MIDLANTIC BANK,
N.A., successor by merger to CONTINENTAL BANK ("Lender"), having
offices at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000; JUDGE, INC., a
corporation organized under the laws of the Commonwealth of Pennsylvania
("Judge, Inc.") having its principal place of business at Xxx Xxxx Xxxxx, Xxxxx
000, Xxxx Xxxxxx, Xxxxxxxxxxxx 00000, JUDGE TECHNICAL SERVICES, INC., a
corporation organized under the laws of the Commonwealth of Pennsylvania ("Judge
Technical") having its principal place of business at Xxx Xxxx Xxxxx, Xxxxx 000,
Xxxx Xxxxxx, Xxxxxxxxxxxx 00000; JUDGE PROFESSIONAL SERVICES, INC., a
corporation organized under the laws of the Commonwealth of Pennsylvania ("Judge
Professional") having its principal place of business at Xxx Xxxx Xxxxx, Xxxxx
000, Xxxx Xxxxxx, Xxxxxxxxxxxx 00000; JUDGE IMAGING SYSTEMS, INC., a Delaware
corporation ("Judge Imaging"), successor by merger to JUDGE COMPUTER
CORPORATION, a corporation organized under the laws of the State of New Jersey
and to DATAIMAGE, INC., a Delaware corporation ("DataImage"), having its
principal place of business at 000 Xxxxxxxxx Xxxxx, Xxxxx 0, Xxxxxxxxxx, Xxx
Xxxxxx 00000; Judge Electronics Services of Florida, Inc., a Florida corporation
("Judge of Florida") having its principal place of business at 000 X. Xxxxxxxxx
Xxxxxxxxx, Xxxxx 000, Xxxxx, Xxxxxxx 00000; Judge, Inc. of New Jersey, a New
Jersey corporation ("Judge of New Jersey") having its principal place of
business at 000 Xxxxxxxx Xxxx, 0xx Xxxxx, Xxxxxx, Xxx Xxxxxx 00000 and Judge
Technical Services of N.J., Inc. a New Jersey corporation ("Judge Technical of
NJ") having its principal place of business at 000 Xxxxxxxx Xxxx, 0xx Xxxxx,
Xxxxxx, Xxx Xxxxxx 00000 (hereinafter Judge, Inc., Judge Technical, Judge
Professional, Judge Imaging, Judge of Florida, Judge of New Jersey and Judge
Technical of N.J. are collectively called "Borrower or Borrowers"); and Xxxxxx
X. Judge, Jr., ("Surety"), residing at 000 Xxxxxxxxxx Xxxxx, Xxxxxx, Xxx Xxxxxx
00000, Xxxxxxx X. Xxxx ("Surety") and Xxxxxxxx X. Xxxx ("Surety"), husband and
wife, each residing at 00 Xxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxx Xxxxxx 00000 (each
of the foregoing three Sureties being collectively called the "Sureties").
A. BACKGROUND
Commencing on December 10, 1992, Lender loaned to Judge, Inc. and Judge
Technical a revolving line of credit loan facility in the maximum principal sum
of up to Two Million Dollars ($2,000,000) pursuant to the terms of a Revolving
Security Agreement of even date. Thereafter, Lender loaned various amounts to
the Borrowers or to some of the Borrowers in the form of a revolving line of
credit loan facility, which as of October 1, 1995, was in the principal sum of
Five Million Five Hundred Thousand Dollars ($5,500,000). On June 2, 1995,
pursuant to a Second Amended and Restated Loan and Security Agreement of that
date, all of the Borrowers became co-borrowers for the amounts due the Lender
for the revolving line of credit loan facilities.
All of the extensions of credit by the Lender to Borrowers were secured
by a first security interest in all of the assets of the Borrowers and by the
surety agreement of the Sureties. All of the extensions of credit by the Lender
to the Borrowers were evidenced by promissory notes, by a Loan and Security
Agreement as restated and amended on October 15, 1993, March 8, 1994, February
16, 1995, June 2, 1995, October 1, 1995 and on March 1, 1996, by financing
statements filed by Lender with the applicable recording offices, and by other
Relevant Documents (hereafter defined) executed and delivered by the Borrowers
and/or Sureties to the Lender.
The Borrowers and the Sureties have now requested the Lender to renew
and/or increase the principal amount of the Revolving Loan (hereafter defined in
Section 2A) to Eleven Million Dollars ($11,000,000), subject to the terms and
conditions herein and to the Relevant Documents (hereafter defined), and the
Lender, subject to the terms and conditions in the Relevant Documents, has
agreed to renew and increase the principal amount of the Revolving Loan to
Eleven Million Dollars ($11,000,000).
B. INCORPORATION OF RECITALS
The recitals set forth in the Background section of this Agreement are
hereby incorporated by reference into this Agreement as if same had been fully
set forth at length herein.
C. REAFFIRMATION OF AMOUNT DUE
Borrower and Sureties hereby acknowledge and agree that as of August
31, 1996, there is due and owing to Lender on the Revolving Loan the principal
sum of Seven Million Eight Hundred Fifty Seven Thousand Three Hundred Sixty
Seven and 87/100 Dollars ($7,857,367.87) and all accrued and unpaid interest
thereon.
D. AGGREGATE PRINCIPAL SUM DUE; RENEWAL
NON DISCOUNT NOTE
At the request of Borrower, the Lender has increased the line of credit
due the Lender by the Borrower from Five Million Five Hundred Thousand Dollars
($5,500,000.00) to Eleven Million Dollars ($11,000,000) (defined hereinbelow as
the "Revolving Loan") as evidenced by the renewal Non Discount Note of the
Borrower of even date herewith (the "Non Discount Note"). Anything to the
contrary contained herein, in the Non Discount Note or any other Loan Documents
notwithstanding, at no time shall the aggregate principal amount of the
Revolving Loan and the Term Loan outstanding and due the Lender by the Borrower
exceed the principal sum of Eleven Million Dollars ($11,000,000).
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NOW, THEREFORE, in consideration of the foregoing and the mutual
promises contained herein and intending to be legally bound hereby, the parties
restate their agreements and understandings as follows:
1. DEFINITIONS
"Account" - as defined in Section 2A.1(c)(i).
"Banking Day" - any day other than a Saturday, Sunday or legal
holiday for banks under the laws of the State of New Jersey.
"Capital Expenditures" as defined in Section 6.19.
"Collateral" - as defined in Section 3.2(b).
"Default Rate" - a rate of interest per annum in excess of the rate
otherwise applicable at the time to the Revolving Loan or the Term Loan as set
forth in the Notes.
"Equipment" - as defined in Section 3.2(c).
"ERISA" - as defined in Section 4.17.
"Event of Default" - as defined in Section 8.
"Immediately" - shall mean within three (3) business days.
"Initial Public Offering" - as described in Section 2B.
"Interest Coverage" - as defined in Section 6.18.
"Inventory" - as defined in Section 2A.1(c)(iv).
"Liabilities" - shall mean liabilities as determined in accordance
with generally accepted accounting principles but excludes debt subordinated to
the Obligations due the Lender.
"Limitation on Compensation" - as defined in Section 6.20.
"Loans" - the Revolving Loan and the Term Loan.
"Non Discount Note" - the Eleven Million Dollar ($11,000,000)
Renewal Non Discount Note and Addendum thereto evidencing the Revolving Loan and
dated of
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even date herewith, when not referred to by its full title as more fully
described in Section 2A.1(a).
"Notes" - The Non Discount Note and the Term Loan Note.
"Obligations" - as defined in Section 3.2(a).
"Prime Rate" - the rate of interest announced from time to time by
Lender as its "prime rate" or "prime lending rate," which rate is determined
from time to time by Lender as a means of pricing some loans to its customers
and is neither tied to any external rate of interest or index nor necessarily
reflects the lowest rate of interest actually charged by Lender to any
particular class or category of customers. The prime rate of the Lender may not
necessarily be the same rate of interest as charged by other lenders as their
prime or base rate of interest.
"Qualified Accounts" - as defined in Section 2A.1(c)(ii).
"Ratio of Liabilities" - as defined in Section 5.15.
"Related Entity" - any corporate subsidiary of Borrower, and any
unincorporated association or other entity through which Borrower conducts any
part of its business.
"Relevant Documents" - any and all documents and instruments
delivered to Lender pursuant or incident to this Agreement or the Loans (a) by
Borrower or any Related Entity, (b) by any pledgor or grantor of a lien,
security interest or other right, or (c) by any guarantor of any of the
Obligations, including without limitation the guaranty of the Obligations of
Borrower executed by the Sureties on even date.
"Revolving Loan" - as defined in Section 2A.
"Revolving Loan Limit" - as defined in Section 2A.1(b).
"Sureties" shall mean Xxxxxx X. Judge, Jr., individually; Xxxxxxx X.
Xxxx, individually and Xxxxxxxx X. Xxxx, individually, husband and wife.
"Tangible Net Worth" - as defined in Section 5.15.
"Term Loan" - as defined in Section 2D.
"Term Loan Note" - the promissory Commercial Term Note evidencing
the Term Loan of Lender to Borrower.
"UCC" - the Uniform Commercial Code as in effect from time to time
in the Commonwealth of Pennsylvania.
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"Unbilled Receivables" shall mean amounts which are due for services
rendered for which an invoice has not as yet been issued to a customer.
"Working Capital" - as defined in Section 6.18.
2A. REVOLVING LOAN; ACCOUNTS; LETTERS OF CREDIT;
INVENTORY
2A.1 Amount and Certain Definitions.
(a) Lender may at its discretion, upon the request
of Borrower, make loans hereunder to Borrower ("Revolving Loan") from time to
time on a revolving loan basis in an aggregate principal amount not in excess at
any time outstanding of the Borrower's Revolving Loan Limit; provided that, if
the outstanding amount of the Revolving Loan should exceed the Revolving Loan
Limit at any time, such excess (i) shall nevertheless be secured by the
Collateral and be subject to the terms of this Agreement, and (ii) shall be
payable immediately upon demand by Lender. No out-of-formula overadvances shall
be permitted at any time. The Revolving Loan shall be payable (i) on the
maturity date of the Revolving Loan as set forth in the Non Discount Note, or
(ii) at such other time as is provided in Section 9 or elsewhere in this
Agreement, whichever of (i) or (ii) shall first occur. The Revolving Loan shall
be evidenced by the Non Discount Note; except as may be otherwise provided in
the Non Discount Note, the Revolving Loan shall be payable in accordance with
the terms of this Agreement.
(b) Definition of Revolving Loan Limit. Borrower's
Revolving Loan Limit shall, subject to Sections 2A.1(d) and 2D hereinbelow, be
the lesser of:
(i) Eleven Million Dollars ($11,000,000) less
the principal balance due by the Borrower on the Term Loan described in
Section 2D below and the outstanding principal balance due by the Borrower on
the Letters of Credit described in Section 2A.1(d) below; or
(ii) The value of the following Collateral determined
as follows:
(A) Eighty (80%) percent of the Qualified
Accounts (less reserves determined by Lender for advertising allowances,
warranty claims and other contingencies) of Judge, Inc., Judge Technical, Judge
Professional, Judge of Florida, Judge of New Jersey, Judge Technical of NJ and
Judge Imaging; plus
(B) Subject to Section 2B herein below, sixty
(60%) percent of the Unbilled Receivables of Judge Technical, but in no event
may advances
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to be made by the Lender against said Unbilled Receivables exceed One Million
Dollars ($1,000,000); less
(C) Fifty percent (50%) of the outstanding
principal balance due Lender at any given time on the Term Loan.
Anything to the contrary contained hereinbelow
notwithstanding, the Lender may increase or decrease the stated advance rates
with respect to Qualified Accounts and Unbilled Receivables of the Borrower as
Lender in its sole and absolute discretion may determine. As provided in Section
2A.1(d) and in Section 2D below, as the Borrower commences making monthly
payments to the Lender on the Term Loan, subject to the terms of this Agreement,
the Borrower's availability under the Revolving Loan Limit shall increase in an
amount equal to the principal reduction made by the Borrower on the Term Loan as
of the date said principal payment is made by the Borrower, but in no event
shall the Revolving Loan Limit exceed Eleven Million Dollars ($11,000,000.00).
Notwithstanding anything herein to the contrary, Borrower
acknowledges that the Revolving Loan matures on May 31, 1998 and that during the
time the Revolving Loan is outstanding, the aforementioned advance rate of
eighty (80%) percent may be reduced by the Lender at its sole discretion and
that the Lender may establish reserves or reduce advance rates with respect to
Qualified Accounts or limit advances in the nature of letters of credit, at its
sole and absolute discretion; provided, however, the Lender agrees to notify the
Borrower in writing at least fifteen (15) days in advance of any decrease in the
advance rate.
Lender, upon fifteen (15) days prior written notice to the
Borrower, shall have the right to increase or decrease the Revolving Loan Limit
from time to time.
(c) Definitions of Account; Qualified Account;
Inventory; Qualified Inventory; Net Value of
Qualified Inventory.
(i) The term "Account" shall mean all items
described in the UCC definition thereof and all of the following, whether or not
so described (in all cases whether now existing or hereafter created): all
obligations of any kind at any time due or owing to Borrower and all rights of
Borrower to receive payment or any other consideration (whether classified under
the UCC or the law of any other state as accounts, accounts receivable, contract
rights, chattel paper, general intangibles, or otherwise) including without
limitation invoices, contract rights, accounts receivable, general intangibles,
choses-in-action, notes, drafts, acceptances, instruments and all other debts,
obligations and liabilities in whatever form owing to Borrower from any person,
firm, corporation, governmental authority or other entity, together with all
security for any thereof, and all of Borrower's rights to goods sold (whether
delivered, undelivered, in
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transit or returns), represented by any thereof, together with all proceeds and
products of any of the foregoing.
(ii) The term "Qualified Account" shall
mean an account or accounts which have been identified and described to Lender's
satisfaction, are represented by Borrower (by its acceptance of the Revolving
Loan thereon) as meeting all of the following criteria on its origination date
and thereafter until collected, and is in all other respects acceptable to
Lender:
(A) Borrower is the sole owner of the account
and has not sold, assigned or otherwise transferred it, and the Account is not
subject to any claim, lien or security interest;
(B) The Account is bona fide and legally
enforceable and owing to Borrower for the sale of goods or performance of
services in the United States and in the ordinary course of business and the
Account does not require any further act on the part of Borrower to make it
owing by the Account debtor, and Borrower has delivered to Lender (or, at the
time of origination of the Account, if required by Lender, will deliver to
Lender) invoices, xxxxxxxx, shipping documents and other documents evidencing
the obligation to pay the account;
(C) The Account does not represent a conditional
sale, consignment or other sale on a basis other than that of absolute sale, is
not evidenced by any note, instrument, chattel paper or like document, and does
not arise out of a contract with the United States or any of its departments,
agencies or instrumentalities;
(D) The Account is invoiced, for payment within
five (5) days, on the date services are rendered or Inventory or other goods
represented thereby are shipped to the Account debtor, and the Borrower's
invoice has not been outstanding for more than ninety (90) days, except with
respect to Accounts due Judge Imaging by municipalities or school districts
where the Borrower's invoice has not been outstanding thirty (30) days after the
actual due date up to a maximum of one hundred twenty (120) days;
(E) The amount of the Account included in
calculating the Revolving Loan Limit does not exceed twenty (20%) percent of
Borrower's total Qualified Account at the time outstanding;
(F) The Account is not subject to any defense,
offset, counterclaim, credit, allowance or adjustment except usual and customary
prompt payment discounts, nor has the Account debtor returned the goods or
indicated any dispute or complaint concerning them;
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(G) No other Account of the Account debtor is
overdue in payment, the Borrower has not received any notice, nor has it any
knowledge, of any facts which adversely affect the credit of the Account debtor;
(H) The Account debtor is not a Related Entity
or other affiliate of Borrower nor a director or officer of Borrower or an
affiliate of any director or officer; and
(I) Any contracted imaging sale by Borrower
assigned to the Lender must be accompanied by a signed customer acceptance
criteria sheet.
(d) Letters of Credit.
Lender, at its sole discretion, may issue for the account of
Borrower merchandise or stand-by letters of credit in form and content
satisfactory to Lender, at its sole discretion, with a term not to extend beyond
December 31, 1997. Notwithstanding the foregoing, at no time shall the aggregate
face amount of all outstanding letters of credit issued under the Revolving Loan
exceed the amount of Fifty Thousand Dollars ($50,000). Borrower's ability to
borrow under the Revolving Loan from time to time shall be reduced by an amount
equal to the aggregate face amount of outstanding letters of credit. In the
event the Lender is required to fund any letters of credit, the amount advanced
by the Lender shall bear interest at the Default Rate of interest applicable in
the Non Discount Note.
In the event the Revolving Loan is terminated for any reason
or demand is made thereunder, Borrower will deposit with Lender an amount equal
to the face amount of all letters of credit then outstanding which have been
issued under the Revolving Loan, plus all fees related thereto or to accrue
thereunder. Such funds will be held by Lender as cash collateral to secure
Borrower's obligations hereunder.
(e) The term "Inventory" shall mean all items
described in the UCC definition thereof and all of the following, whether or not
so described (in all cases whether now owned or hereafter acquired by Borrower
and wherever located): all goods, merchandise or other personal property held by
Borrower for sale or lease or to be furnished under labels and other devices,
names or marks affixed thereto for purposes of selling or identifying the same
or the seller or manufacturer thereof, and all right, title and interest of
Borrower therein and thereto; all raw materials, work or goods in process; and
all materials and supplies of any kind or description used or usable in
connection with the manufacture, packaging, shipping, advertisement, sale or
finishing of any of the foregoing, together with all proceeds and products of
any of the foregoing.
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2A.2 Interest Rate. Except in the event of the occurrence of
an Event of Default as provided in the Non Discount Note and subject to Section
2B.2(b)(iii) below, the Revolving Loan portion of the Loan (i.e., excluding any
principal balance due by the Borrowers to the Lender on the Term Loan) shall
bear interest at a fluctuating interest rate per annum equal at all times to one
(1%) percent above Lender's Prime Rate in effect from time to time, each change
in such fluctuating rate to take effect simultaneously with the corresponding
change in the Lender's Prime Rate, without notice to Borrower; provided,
however, upon the occurrence of an Event of Default, the Revolving Loan shall
bear interest at the default rate of interest set forth in the Non Discount
Note.
2A.3 Payment of Interest. Interest on the Revolving Loan shall
be debited, on the due date from any account maintained by Borrower with Lender.
Otherwise, Borrower will be obligated to make such payments directly to Lender.
All payments are to be made in immediately available funds. If Lender accepts
payment in any other form, such payments shall not be deemed to have been made
until the funds comprising such payment have actually been received by or made
available to Lender.
2A.4 Collection and Remittance.
(a) Borrower shall collect its accounts receivable only
in the ordinary course of Business. All accounts receivable collections
of Borrower will be deposited in a non-interest bearing cash collateral account
maintained at Lender (the "Collection Account"). Lender will have sole dominion
and control over all items and funds in the Collection Account and such items
and funds may be withdrawn only by Lender. Lender will have the right to apply
all or any part of such funds towards payment of any of the indebtedness of
Borrower to Lender under the Revolving Loan; provided, however, upon the
occurrence of a default or an event with which the giving of notice or the
passage of time or both would be a default hereunder or under the Loan
Documents, Lender may apply all or any part of such funds towards payment of any
indebtedness of Borrower to Lender.
(b) All items deposited into the Collection Account will
be credited by Lender as payments of the principal balance of the Revolving Loan
on the day on which such items are deposited into the Collection Account. As
compensation for the foregoing arrangement, Borrower will pay to Lender a sum
equal to three (3) Banking Days interest on all such deposits at the interest
rate for the Revolving Loan. Borrower will reimburse Lender on demand for the
amount of any items credited as provided above and subsequently returned unpaid.
Lender may terminate the foregoing arrangement upon notice to Borrower.
(c) Borrower agrees that all monies, checks, notes,
instruments, drafts or other payments relating to or constituting proceeds of
any accounts receivable of Borrower which come into the possession or under the
control of Borrower or any
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employees, agents or other persons acting for or in concert with Borrower, shall
be received and held in trust for Lender and such items shall be the sole and
exclusive property of Lender. Immediately upon receipt thereof, Borrower and
such other persons shall remit the same or cause the same to be remitted, in
kind, to Lender. Borrower shall deliver or cause to be delivered to Lender, with
appropriate endorsement and assignment to Lender with full recourse to Borrower,
all instruments, notes and chattel paper constituting an account receivable.
Lender is hereby authorized to open all mail addressed to Borrower and endorse
all checks, drafts or other items for payment on behalf of Borrower. Lender is
granted a power of attorney by Borrower with full power of substitution to
execute on behalf of Borrower and in Borrower's name or to endorse Borrower's
name on any check, draft, instrument, note or other item of payment or to take
any other action or sign any document in order to effectuate the foregoing. Such
power of attorney being coupled with an interest is irrevocable.
2A.5 Determination of Balance of Revolving Loan.
(a) In determining the outstanding balance of the
Revolving Loan, (i) domestic checks received by Lender's Asset Based Secured
Lending Department before three o'clock p.m. (3:00 p.m.) of a Banking Day will
be credited on that Banking Day, and thereafter on the following Banking Day;
(ii) any other form of funds received by Lender's Asset Based Secured Lending
Department will be credited on the Banking Day when that Department has received
notification of collection if before three o'clock p.m. (3:00 p.m.), and
thereafter on the following Banking Day; and (iii) all credits shall be
conditional upon final payment to Lender in cash or solvent credits of the items
giving rise to them and, if any item is not so paid, the amount of any credit
given for it shall be charged to the balance of the Revolving Loan whether or
not the item is returned.
(b) For the purpose of computing interest on the
Revolving Loan and other Obligations, interest shall continue to accrue on the
amount of any payment received by Lender's Asset Based Secured Lending
Department for a period of three (3) Banking Days after it is credited.
2A.6 Monthly and Interim Statements. Once each month Lender
shall render a statement of account to Borrower showing the current status of
principal, interest and service charges with respect to the Revolving Loan. If
these statements or any interim statements indicate that the outstanding balance
of the Revolving Loan exceeds the Revolving Loan Limit, Borrower, at Lender's
option, forthwith shall either furnish additional Collateral satisfactory to
Lender or pay the difference in cash. The statement of account rendered by
Lender shall be considered correct, accepted by Borrower and conclusively
binding upon Borrower, unless Borrower gives Lender written notice to the
contrary within ten (10) Banking Days after the sending of the statement by
Lender. If Borrower disputes the correctness of Lender's statement, Borrower's
notice shall specify in detail the particulars of its basis for contending that
Lender's statement is incorrect.
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2A.7 Overdrafts. In the event Lender honors a check of
Borrower resulting in Borrower's checking account being overdrawn, then Lender
shall be deemed to have loaned the amount of such overdraft to Borrower,
pursuant to the terms of this Section 2A, on the Lender's Banking Day
immediately preceding the day on which the Borrower's check is tendered to
Lender for collection. Lender shall not be obligated to honor any overdraft of
Borrower, whether or not it has done so in the past.
2A.8 Audit Fees. There will be an annual audit fee of One
Thousand Five Hundred Dollars ($1,500) due and payable in advance on December
31, 1996, and on December 31 of each calendar year thereafter while the
Revolving Loan remains outstanding.
2A.9 Revolving Loan Facility Fee. The Borrower shall pay to
the Lender a fee equal to one-fourth (1/4%) percent of the unused portion of the
Revolving Loan, which fee shall be due and payable quarterly and in arrears five
(5) business days after the end of each calendar quarter (three (3) months)
commencing with the quarter ended September 30, 1996 and on the fifth (5th)
business day after the end of each December, March, June and September of each
calendar year while the Revolving Loan is outstanding.
2A.10 Prepayment. The Revolving Loan may be prepaid in full
and the Revolving Loan terminated by Borrower at any time; provided, however,
any prepayment and termination of the Revolving Loan by the Borrower shall be
accompanied by the following:
(a) One (1%) percent of the total Revolving Loan credit
facility if prepayment occurs in the first twelve (12) months after the date
hereof ("Year 1"); and
(b) One-half of one (.5%) percent of the total Revolving
Loan credit facility if prepayment occurs in the second twelve (12) months after
the date hereof ("Year 2").
2B. INITIAL PUBLIC OFFERING BY BORROWER
2B.1 Borrowers' Intention To Do An Initial Public Offering.
The Borrower has advised the Lender that it intends to increase shareholders'
equity by at least Twenty Million Dollars ($20,000,000) by means of the sale of
capital stock in an initial public offering (the "Initial Public Offering"). The
Borrower anticipates that the Initial Public Offering will be completed by
December 31, 1996.
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2B.2 Modification of Loan Terms Upon Completion of Public Offering.
(a) The Lender agrees to modify the terms of the Loans as
set forth below in Section 2B.2(b), provided the following conditions precedent
are first fulfilled by the Borrower:
(i) The Borrower receives net proceeds from the
Initial Public Offering of at least Twenty Million Dollars ($20,000,000) and the
same has increased the Tangible Net Worth of Borrower and the ratio of
Liabilities to Tangible Net Worth as described in Section 5.15 hereof does not
exceed 2:1;
(ii) The Term Loan due the Lender described in
Section 2D below has been paid in full from the proceeds of the Initial Public
Offering; and
(iii) The Borrower is not in default on the Loans due
the Lender and is otherwise in compliance with all of the terms and conditions
of the Relevant Loan Documents.
(b) Upon receipt from the Borrower of a written
request to modify the terms of the Loans and a certification by the Chief
Executive Officer of the Borrower that the conditions precedent set forth in
Section 2B.2(a) above have been fulfilled, the Lender agrees to modify the terms
of the Revolving Loan as follows:
(i) The Unlimited Surety Agreement of the Sureties
shall be released;
(ii) The Lender shall no longer be required to make
advances for the Revolving Loan based upon the Unbilled Receivables of Judge
Technical as set forth in Section 2A1.b(ii)(B) above;
(iii) The interest rate on the Revolving Loan shall
be reduced to a fluctuating interest rate per annum equal at all times to the
Lender's Prime Rate in effect from time to time, each change in such fluctuating
rate to take effect simultaneously with the corresponding change in the Lender's
Prime Rate, without prior notice to Borrower; provided, however, upon the
occurrence of an Event of Default, the Revolving Loan shall bear interest at the
default rate of interest set forth in the Non Discount Note; and
(iv) The Lender agrees to review and reset, in the
Lender's sole discretion, the financial reporting requirements in Section 5.5
and the Financial Covenants set forth in Sections 5.15, 6.3 and 6.19
hereinbelow.
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2C. ADDITIONAL PROVISIONS RE: INTEREST AND PAYMENTS ON
ALL THE LOANS
2C.1 Interest Calculation; Lawful Rate. Interest on the Loans shall
be calculated on a daily basis upon the unpaid principal balance, with each day
representing 1/360th of a year. If the interest rate calculated in accordance
with any provision of this Agreement for the Loans would at any time exceed the
maximum permitted by any law then applicable to such Loans, then for such period
as such rate would exceed the maximum permitted by such law (and no longer), the
rate of interest payable on such Loans shall be reduced to the maximum permitted
by such law.
2C.2 Charge Against Borrower. Lender may, at its discretion, charge
the amount of any payment of principal or interest on the Loans to any checking
or loan account of Borrower, deduct such amount from any future Loan to
Borrower, or apply any Collateral proceeds or other funds received by Lender
against payment of such amount.
2C.3 Non-Banking Days. If any payment pursuant to this Agreement or
any of the Relevant Documents shall be stated to be due on a day other than a
Banking Day, such payment may be made on the next succeeding Banking Day and
such extension of time shall be included in computation of the interest or other
payment due.
0X.0 Xxxxxxxxxxxxx of Increased Cost to Lender. If any law,
regulation or guideline, or change in any law, regulation or guideline or in the
interpretation thereof, or any order or ruling by any regulatory body, court or
other governmental authority, or compliance by the Lender with any request or
directive (whether or not having the force of law) of any such regulatory body,
court or authority, shall impose, modify, or deem applicable to Lender any
reserve, capital, special deposit or other requirement or condition in respect
of this Agreement or any of the Loans, which results in an increased cost or
reduced benefit to Lender in maintaining any of the Loans (as determined by
reasonable allocation of the aggregate of such increased costs or reduced
benefits to Lender resulting from such event), then Borrower shall pay to Lender
from time to time, upon demand, additional amounts sufficient to compensate
Lender for such increased costs or reduced benefits, together with interest on
each such amount from a date ten (10) days after the date demand until payment
in full thereof, at the highest rate then applicable to the Loans. A certificate
setting forth in reasonable detail such increased cost incurred or reduced
benefit realized by Lender as a result of any such event shall be conclusive as
to the amount thereof, absent manifest error.
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2D. TERM LOAN
2D.1 Amount and Terms of Term Loan; Documents; Collateral.
(a) Subject to Section 2B hereof, Lender agrees to lend to
Borrower on the date hereof as a Term Loan the principal sum of One Million
Dollars ($1,000,000) to refinance, in part, amounts previously borrowed by
Borrower from the Lender on the Revolving Loan. Borrower's ability to borrow
under the Revolving Loan from time to time shall be reduced by an amount equal
to the principal balance outstanding on the Term Loan; provided, however, as the
Term Loan principal is reduced (repaid), the availability for borrowing under
the Revolving Loan shall be correspondingly restored as is provided in Section
2A.1(b)(i) above.
(b) The proceeds of the Term Loan were used by the Borrower to
satisfy the indebtedness now due by the Borrower to the Internal Revenue Service
for past due withholding taxes, interest and penalties of approximately Four
Hundred Sixty-Five Thousand Dollars ($465,000.00), to repay an indebtedness due
by the Borrower in the approximate amount of $322,000.00 to Xxxx Xxxxxx, a prior
shareholder, and to fund miscellaneous capital expenditures. The Borrower shall
provide evidence satisfactory to the Bank of the disbursement of the Term Loan
proceeds for such purposes (including proof of satisfaction of the Internal
Revenue Service indebtedness) within thirty (30) days after the date hereof.
(c) Borrower agrees to execute and deliver to Lender at the
time the Loan Term is made by Lender, the Term Loan Note and such other
documents as Lender may require.
(d) The Collateral defined hereinbelow in Section 3.2(b) shall
serve as Collateral for the Term Loan and all other Borrower's Obligations due
the Lender.
2D.2. Interest Rate. Except in the event of a default as provided
in the Term Loan Note, the Term Loan shall bear interest at a fluctuating
interest rate per annum equal at all times to one and one-half (1 1/2%) percent
above the Lender's Prime Rate in effect from time to time, each change in such
fluctuating rate to take effect simultaneously with the corresponding change in
the Prime Rate, without notice to Borrower; provided, however, upon the
occurrence of an Event of Default, the Term Loan shall bear interest at the
default rate of interest set forth in the Term Loan Note.
2D.3. Payment of Principal and Interest. The Borrower shall
repay the Term Loan to the Lender in monthly principal payments plus interest at
the interest rate set forth above and in the amounts as provided in the Term
Loan Note.
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2D.4. Term of Term Loan. Subject to Section 2B.2(a)(ii) above,
the Term Loan will be for a term of the lesser of sixty (60) months or the
completion date of the Initial Public Offering, whichever first occurs.
2D.5. Prepayment. The Term Loan may be prepaid in full, at any
time, without prepayment premium or penalty.
3. SECURITY INTEREST; ADDITIONAL DEFINITIONS
3.1 Reaffirmation of Collateral; Grant of Security Interests.
As security for the due and punctual payment and performance
of all of the Obligations (defined below), whether pursuant to this Agreement or
otherwise, on June 2, 1995 and prior thereto, Borrowers executed and delivered
to the Lender their respective General Security Agreements and forms UCC-1 or
forms UCC-3, financing statements, pursuant to which the Borrowers pledged,
transferred and assigned to Lender, and granted to Lender security interests in
(a) all of the Collateral wherever located and whether now existing or hereafter
created and whether now owned or hereafter acquired by Borrower, and (b) all
accessions and additions thereto, replacements and substitutions therefor, and
proceeds and products thereof. Borrowers hereby reaffirm, pledge, transfer and
assign to Lender, and reaffirm their continuing grants to Lender of security
interests in (a) all of the Collateral wherever located and whether now existing
or hereafter created and whether now owned or hereafter acquired by Borrowers,
and (b) all accessions and additions thereto, replacements and substitutions
therefor, and proceeds and products thereof. It is the intent of the Borrowers
that the security interests of the Lender in the Collateral shall continue to
secure the Loans due the Lender by the Borrowers without the necessity on this
date of re-filing additional financing statements. The security interests
reaffirmed and granted in hereby, and all remedies and other rights stated or
referred to in this Agreement or any of the Relevant Documents, shall continue
in full force and legal effect until full and final payment and performance of
the Loans and all other Obligations under this Agreement and the Relevant
Documents.
3.2 Definitions of "Obligations," "Collateral" and "Equipment"
(a) The term "Obligations" shall mean:
(i) all principal of and interest on the Revolving Loan or
the Term Loan, and all other sums payable by Borrower or any Related Entity
under the terms of this Agreement or any of the Relevant Documents,
(ii) all other indebtedness, liabilities, obligations and
agreements of every kind and nature of Borrower or any Related Entity to or with
Lender or any affiliate of Lender,
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(iii) all guaranties of any of Borrower's Obligations, and
(iv) any participation or interest of Lender or any
affiliate of Lender in any indebtedness, liabilities, obligations or agreements
of Borrower, any Related Entity or any such guarantor to or with others, in each
case whether now existing or hereafter created, whether now or hereafter
contemplated, whether pursuant to this Agreement, any of the Relevant Documents
or otherwise, whether in the form of refinancing, letters of credit, bankers
acceptances, guaranties, loans, interest, charges, fees, expenses or otherwise,
whether direct or indirect, whether acquired outright, conditionally or as
collateral security from another, whether absolute or contingent, joint or
several, liquidated or unliquidated, secured or unsecured, and whether arising
by operation of law or otherwise, and including without limitation any future
advances, renewals, extensions, modifications or changes in form of, or
substitutions for, any of the items described in this clause and in the
preceding clauses (i) through (iii).
(b) The term "Collateral" shall mean the following, wherever
located and whether now subject to Section 2B with respect to the Sureties,
existing or hereafter created and whether now owned or hereafter acquired:
(i) the Borrower's Accounts; (ii) the Borrower's Inventory; (iii) the Borrower's
Equipment; (iv) the unlimited continuing guaranty as sureties, of Xxxxxx X.
Judge, Jr., individually; Xxxxxxx X. Xxxx, individually and Xxxxxxxx X. Xxxx,
individually, husband and wife; (v) all guaranties, security and liens for
payment of any of Borrower's Accounts, and all of Borrower's documents of title,
policies or certificates of insurance, insurance proceeds, proceeds of
condemnation or other seizure, securities, chattel paper and other documents and
instruments evidencing or pertaining to any thereof; all claims of Borrower
against third parties for loss of or damage to, or otherwise relating to, any of
the Collateral; and all files, correspondence, customer lists, computer
programs, tapes, discs and related data processing software, owned by Borrower
or in which Borrower has an interest, which contains information identifying any
of the Collateral or identifying an Account debtor or the amount owed by same,
or which would otherwise be necessary or helpful in the realization on any of
the Collateral; (vi) all of Borrower's moneys, securities, drafts, notes, items,
contract rights, leases, licenses and general intangibles, and all general or
special deposits, balances, sums, proceeds and credits of Borrower; (vii) all of
Borrower's trade names, trademarks, trademark registrations, copyrights,
patents, patent applications and licenses, and other franchises and licenses in
which Borrower has an interest, and all other tangible personal property similar
to any of the foregoing; (viii) all other property of Borrower; (ix) all rights
and remedies which Borrower might exercise with respect to any of the foregoing
but for the execution of this Agreement; and (x) all accessions and additions
to, replacements and substitutions for, and proceeds and products of, the items
described in the preceding clauses (i) through (ix).
(c) The term "Equipment" shall mean all items described in the
UCC definition thereof and all of the following, whether or not so described (in
all cases whether now owned or hereafter acquired by Borrower and wherever
located): all of
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Borrower's equipment, machinery, furniture, fixtures, motor vehicles, parts,
supplies and tools, and all other tangible personal property similar to any of
the foregoing, and all repairs, modifications, alterations, replacements,
additions, controls and operating accessories therefor.
3.3 Reaffirmation of Sureties. Xxxxxx X. Judge, Jr., Xxxxxxx
X. Xxxx and Xxxxxxxx X. Xxxx, husband and wife, who have re-executed Unlimited
Surety Agreements of payment to the Lender, hereby reaffirm their respective
Unlimited Surety Agreements as sureties as to all liabilities due the Lender by
the Borrower and agree that said Unlimited Surety Agreements will remain in full
force and effect as to all said liabilities due the Lender.
3.4 Further Assurances. Borrower shall execute and deliver
such financing statements and other documents (in form and substance
satisfactory to Lender) and take such other actions as Lender may request from
time to time in order to create, perfect or continue the security interests and
other liens provided for by this Agreement under the UCC or other laws of the
State of New Jersey or under any other state or federal law.
4. REPRESENTATIONS AND WARRANTIES
All of the representations and warranties set forth in the
Relevant Documents are hereby restated and reaffirmed by the Borrowers as of the
date hereof, as if such representations and warranties were set forth at length
herein. The Borrowers hereby acknowledge that such representations and
warranties are being specifically relied upon by the Bank as an inducement to
the Bank to enter into this Agreement and as partial consideration for the terms
and conditions contained herein. In addition to the representations and
warranties already contained in the Relevant Documents, the Borrowers, as a
material inducement to the Bank to enter into this Agreement, hereby
acknowledge, confirm, represent and warrant that:
4.1 Organization and Qualification.
(a) Except Judge of Florida, which is present not validly
existing and in good standing under the laws of Florida, but which is taking
steps to restore its valid existence and its good standing, each of the entities
comprising Borrower are corporations duly organized, validly existing and in
good standing under the laws of the jurisdiction stated at the beginning of this
Agreement.
(b) Borrower has the power and authority, and all necessary
licenses or other authorizations, to own its properties and to carry on its
business as now conducted, and is duly qualified and in good standing in each
jurisdiction wherein the nature of the property owned or used or of the business
conducted requires such qualification.
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4.2 Due Authorization; No Default.
(a) The execution, delivery and performance by Borrower of this
Agreement, the Notes and the Relevant Documents are within Borrower's powers,
have been duly authorized by all necessary action on the part of Borrower, and
do not and will not (i) violate Borrower's Certificate or Articles of
Incorporation or ByLaws, or any applicable law or regulation, or any judgment,
order or decree of any judicial or other governmental body, (ii) constitute a
breach of, or default under, any agreement, undertaking or instrument to which
Borrower is a party or by which it may be affected, or (iii) result in the
imposition of any lien, encumbrance or restriction on any assets of Borrower.
(b) Borrower has delivered to Lender true and complete copies of
Borrower's resolutions necessary to authorize the transactions contemplated by
this Agreement, and of Borrower's Certificate or Articles of Incorporation and
ByLaws, all as in effect on the date hereof and certified by a duly authorized
officer of the Borrower.
(c) This Agreement and the Relevant Documents upon their
execution and delivery, and the Notes upon their issuance, will be legal, valid
and binding obligations of Borrower, enforceable against Borrower in accordance
with their respective terms.
(d) The Borrowers have no defenses, charges, claims, demands,
pleas or offsets whatsoever in law or equity against the Lender or against the
enforcement of the Loan Documents;
4.3 No Governmental Consent Necessary. No authorization, approval
or other action by, and no notice to or filing with, any governmental authority
or regulatory body is required for the due execution, delivery and performance
by Borrower of this Agreement, the Notes or any of the Relevant Documents.
4.4 No Proceedings. Except for the tax assessment proceedings
by the United States and the Commonwealth of Pennsylvania against Judge
Technical previously disclosed to the Lender and now paid and concluded by the
Borrower, and except for the involuntary dissolution of Judge of Florida on
August 29, 1996 (which Judge of Florida is taking steps to reverse), there are
no pending or threatened claims, actions, proceedings or investigations before
any court, arbitrator, or governmental body or agency that may, singly or in the
aggregate, have a material adverse effect on (a) the validity or enforceability
of this Agreement, the Notes or any of the Relevant Documents, or the ability of
Borrower to perform any of its Obligations, or (b) the financial condition or
the properties or operation of Borrower.
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4.5 Financial Statements.
(a) Subject to any limitation stated therein, all balance
sheets, income statements and other financial data which have been or shall
hereafter be furnished to Lender do and will truly and fairly present the
financial condition of Borrower as at the respective dates thereof and the
results of its operations for the respective dates thereof and the results of
its operations for the periods ended on such dates, in accordance with generally
accepted accounting principles consistently applied during all periods. All
other information, reports and other papers and data furnished to Lender are, or
will be at the time the same are so furnished, true, accurate and complete in
all material respects.
(b) Except as shown on the most recent financial statements set
forth on Schedule 1 to this Agreement, Borrower has no liabilities as of the
date hereof which would have an adverse effect on the Collateral or on the
financial condition, operations or other properties of Borrower.
4.6 No Change in Financial Condition; Solvency.
(a) There has been no material change in Borrower's financial
condition since the date of its last financial statements as set forth on
Schedule 1 to this Agreement.
(b) Borrower's assets, at a fair valuation, exceed Borrower's
liabilities (including, without limitation, contingent liabilities), Borrower is
paying its debts as they become due, and Borrower has capital and assets
sufficient to carry on its business.
4.7 Compliance With Laws. Except for Judge of Florida, Borrower
is in compliance with all federal, state and local statutes, rules,
regulations, orders and other provisions of law applicable to its ownership or
use of properties or the conduct of its business; Borrower has not received any
notice of violation of any of the foregoing; and Borrower is not in violation of
any judgment, order or decree of any judicial or other governmental body.
4.8 No Other Violation. Except for Judge of Florida, Borrower is
not in violation of any term of its Certificate or Articles of Incorporation or
ByLaws, and no event or condition has occurred and is continuing which
constitutes or results in (or would constitute or result in, with the giving of
notice, lapse of time or other condition) (a) breach of, or a default under, any
material agreement, undertaking or instrument to which Borrower is a party or by
which it may be affected, or (b) the imposition of any lien, encumbrance or
restriction on any property of Borrower.
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4.9 Taxes and Assessments. Except for Judge of Florida, Borrower
has filed all federal, state and local tax returns and other reports it required
to file to the date hereof (or has obtained valid, written extensions as to any
not so filed), has paid all taxes, assessments and other governmental charges
due and payable to the date hereof except as has been reported to the Lender in
writing, and has made adequate provision for the payment of such taxes,
assessments and charges accrued but not yet payable. Borrower has no knowledge
of any deficiency or additional assessment in a materially important amount in
connection with any taxes, assessments or other governmental charges not
provided for or disclosed in the financial statements set forth on Schedule 1 to
this Agreement. Borrower's federal income tax returns for the year ended 1990
have been audited by the Internal Revenue Service, and the tax liability of
Borrower for such periods has been fully determined by the Internal Revenue
Service and satisfied.
4.10 Accounts. The list of Accounts delivered to Lender is complete
and contains an accurate aging thereof and, except as otherwise specified by
Borrower to Lender in writing, each of said Accounts meets the criteria for a
Qualified Account stated in Section 2A.1(c)(ii) of this Agreement.
4.11 Inventory. Borrower's Inventory, as reflected by its most
recent balance sheet included on Schedule 1 to this Agreement, consists of items
of a quality and quantity usable or saleable in the ordinary course of its
business; the values of obsolete items, items below standard quality and items
in the process of repair have been written down to realizable market value, or
adequate reserves have been provided therefore; and the values carried on said
balance sheet are set at the lower cost or market, in accordance with generally
accepted accounting principles consistently applied.
4.12 Books and Records. Judge, Inc., Judge Technical, Judge
Professional, Judge of Florida and Judge of New Jersey and Judge Technical of NJ
maintains books and records relative to their Accounts at Xxx Xxxx Xxxxx, Xxxxx
000, Xxxx Xxxxxx, Xxxxxxxxxxxx 00000. Judge Imaging maintains its books and
records relative to its Accounts and its Inventory at 000 Xxxxxxxxx Xxxxx, Xxxxx
0, Xxxxxxxxxx, Xxx Xxxxxx 00000.
4.13 Location of Collateral. None of the Inventory, Equipment or
other tangible property constituting part of the Collateral is or will be, or
has been during the six (6) months preceding execution of this Agreement,
located in or on any premises other than those identified in Schedule 2 to this
Agreement. Schedule 2 contains an accurate record of all landlords of premises
leased by Borrower and of all mortgagees of premises owned by Borrower.
4.14 Places of Business. The principal place of business and chief
executive office of each of the Borrowers is set forth on Schedule 3 to this
Agreement.
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4.15 Other Name or Entities. Except as disclosed on Schedule 4 to
this Agreement, none of Borrower's business is conducted through any corporate
subsidiary, unincorporated association or other entity and Borrower has not,
within the seven (7) years preceding the date of this Agreement (a) changed its
name, (b) used any name other than the name stated at the beginning of this
Agreement, or (c) merged or consolidated with, or acquired the assets of, any
corporation or other business. Except as set forth in this Agreement, there are
no other entities through or by which the Borrower or any affiliate of Borrower
transacts business.
4.16 Title and Liens. Borrower has good and marketable title to all
of the Collateral as sole owner thereof, free and clear of any mortgage,
security interest, assignment, pledge, hypothecation, or other lien or
encumbrance, except the liens created by this Agreement and any identified on
Schedule 5 to this Agreement. None of the Collateral is subject to any
prohibition against encumbering, pledging, hypothecating or assigning the same
or requires notice or consent in connection therewith.
4.17 ERISA. Borrower is in compliance in all material respects with
the provisions of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and the related provisions of the Internal Revenue Code, and
with all regulations and published interpretations issued thereunder by the
United States Treasury Department, the United States Department of Labor and the
Pension Benefit Guaranty Corporation ("PBGC"). Neither a reportable event as
defined in Section 1343 of ERISA, nor a prohibited transaction as defined in
Section 406 of ERISA or Section 4975 of the Internal Revenue Code, has occurred
and is continuing with respect to any employee benefit plan subject to ERISA
established or maintained or to which contributions have been or may be made, by
Borrower or by any trade or business (whether or not incorporated) which
together with Borrower would be treated as a single employer under Section 4001
of ERISA (any such trade or business being referred to hereinafter as an "ERISA
Affiliate," and any such employee benefit plan being referred to hereinafter as
a "Plan"). No notice of intention to terminate a Plan has been filed nor has any
Plan been terminated; the PBGC has not instituted proceedings to terminate, or
to appoint a trustee to administer, and Plan, nor do circumstances exist that
constitute grounds for any such proceedings; and neither Borrower nor any ERISA
Affiliate has completely or partially withdrawn from any multiemployer Plan
described in Section 4001(a)(3) of ERISA. Borrower and each ERISA Affiliate has
met the minimum funding standards under ERISA with respect to each of its Plans;
no Plan of Borrower or of any ERISA Affiliate has an accumulated funding
deficiency or waived funding deficiency within the meaning of ERISA; and no
material liability to the PBGC under ERISA has been incurred by Borrower or any
ERISA Affiliate.
4.18 O.S.H.A. Borrower has duly complied with, and its facilities,
business, leaseholds, equipment and other property are in compliance in all
material respects with, the provisions of the federal Occupational Safety and
Health Act and all rules and regulations thereunder and all similar state and
local laws, rules and regulations;
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and there are no outstanding citations, notices or orders of non-compliance
issued to Borrower or relating to its facilities, business, leaseholds,
equipment or other property under any such law, rule or regulation.
4.19 Environmental Matters.
(a) Except as disclosed in Schedule 6 to this Agreement, no
property owned or used by Borrower and located in the State of New Jersey is an
"industrial establishment" within the meaning of the New Jersey Environmental
Cleanup Responsibility Act ("ECRA") as superseded by the Industrial Site
Recovery Act ("ISRA") or is or has been used for the generation, manufacture,
refining, transportation, treatment, storage, handling or disposal of any
"hazardous substances" or "hazardous wastes" within the meaning of ECRA or ISRA.
The following are all of the Standard Industrial Classification Codes applicable
to the properties and operations of Borrower:
7361 and 5734
(b) Except as disclosed in Schedule 6 to this Agreement, no
property owned or used by Borrower and located in the Commonwealth of
Pennsylvania has been used for the generation, manufacture, refining,
transportation, treatment, storage, handling, disposal, transfer, production or
processing of hazardous substances except in compliance with all applicable
federal, state and local laws or regulations. Without limiting the generality of
the foregoing, no property owned or used by Borrower and located in the
Commonwealth of Pennsylvania or any other property owned or operated by the
Borrower, is being used, nor has it ever been used in the past for a landfill,
surface impoundment or other area for the treatment, storage, or disposal of
solid waste (including solid waste such as sludge). For purposes of this
paragraph, "hazardous substances" shall have the meanings ascribed thereto as
set forth in Sections 101(14) and (33) of the Comprehensive Environmental
Response, Compensation and Liability Act (42 USC Section 9601(14) and (33)) or
40 CFR Part 302 of the Federal Water Pollution Control Act Amendments of 1972,
33 U.S.C. 1321, or Section 103 of the Pennsylvania Hazardous Sites Cleanup Act
(35 P.S. Section 6020.101), or Section 103 of the Pennsylvania Hazardous
Materials Emergency Planning and Responsibility Act (35 P.S. Section 6022.103),
or in any amendment thereto or any replacement thereof.
(c) Borrower is in compliance in all material respect with all
applicable federal, state and local statues, rules, regulations, orders and
other provisions of law relating to air emissions, water discharge, noise
emissions, solid and liquid disposal, hazardous waste and substances, and other
environmental, health and safety matters.
4.20 Margin Stock. No part of the proceeds of the Revolving Loan
will be used, directly or indirectly, to purchase or carry any "margin stock"
(as defined in Regulation U issued by the Board of Governors of the Federal
Reserve System), to
22
extend credit to others for the purpose of purchasing or carrying any such
margin stock, or for any purpose that violates any provision of Regulations G,
T, U or X issued by the Board of Governors of the Federal Reserve System.
4.21 Representations and Warranties True, Accurate and Complete;
Confirmation With Each Loan; Adequate Professional
Representation.
(a) None of the representations, warranties or statements to
Lender contained in this Agreement, in any of the Relevant Documents or in any
other writing delivered to Lender in connection with the Collateral, this
Agreement or any of the transactions contemplated thereby, contains or will
contain any untrue statement of a material fact or omits or will omit to state a
material fact necessary not misleading to make such representation, warranty or
statement in light of the circumstances under which it is made. All of such
representations, warranties and statements shall survive until full and final
payment and performance of the Loans and all other Obligations under this
Agreement and the Relevant Documents.
(b) Borrower's acceptance of each advance on the Revolving
Loan under this Agreement shall constitute a confirmation of the matters set
forth in the preceding Sections 4.1 through 4.21(a) as of the date of such
Loans. If requested by Lender, Borrower shall further confirm such matters by
delivery of a certificate dated the day of the Revolving Loan and signed by a
duly authorized officer of Borrower satisfactory to Lender.
(c) The Borrower and the Sureties represent to the Lender that
they have, at all times relevant to this Agreement, been represented by advisors
of their own selection including but not limited to attorneys at law and
certified public accountants; that they have not relied upon any representation,
warranty, agreement or information provided by the Lender, its employees, agents
or attorneys; that they acknowledge that they have been and are informed of
their rights, duties and obligations with respect to the Loans due the Lender
under all applicable laws; that they have no set-offs, defenses, claims or
recoupments against the Lender with respect to the Loans due the Lender by the
Borrower.
(d) The Borrower and the Sureties acknowledge and agree that
the Lender has made no representations, warranties, agreements or provided
information to them in order to induce the execution of this Agreement. The
Borrowers and the Sureties further acknowledge and agree that all agreements of
the parties are set forth in this Agreement and/or in the Relevant Loan
Documents or written documentation evidencing and/or amending the Revolving Loan
or the Term Loan.
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5. AFFIRMATIVE COVENANTS
Borrower covenants and agrees that, until full and final payment and
performance of the Loans and all other Obligations under this Agreement and the
Relevant Documents, Borrower shall, unless Lender shall otherwise consent in
writing:
5.1 Maintenance of Existence and Qualifications. Maintain and preserve
in full force and effect (or in the case of Judge of Florida, restore) its
existence and good standing and all other rights, powers, franchises, licenses
and qualifications necessary or desirable for its ownership or use of properties
or the conduct of its business.
5.2 Payment of Taxes and Other Obligations. Pay (a) before they become
delinquent, all taxes, assessments and governmental charges imposed upon it or
any of its property or required to be collected by it, and (b) when due, all
other indebtedness and liabilities of any kind now or hereafter owing by it.
5.3 Maintenance of Properties. Maintain its properties in good working
order and condition.
5.4 Notice of Adverse Events. Promptly notify Lender in writing of the
occurrence or existence of any of the following: (a) any Event of Default as
defined in this Agreement or any event which, with the giving of notice, lapse
of time or other condition, would become such an Event of Default; (b) any
matter or event which has resulted in, or may result in, a material adverse
change in the financial condition or any property or operations of Borrower;
(c) any material claim, action, proceeding or investigation filed or instituted
against Borrower, or any adverse determination in any material pending action,
proceeding or investigation affecting it; (d) any loss from casualty or theft in
excess of Fifty Thousand Dollars ($50,000), whether or not insured, affecting
property of Borrower; (e) whether or not otherwise reportable under this Section
5.4, any complaint, citation, order or other notice of a violation or a claim
involving any of the following, if the liability or penalty therefor may exceed
One Hundred Thousand Dollars ($100,000) singly or in the aggregate: any
applicable federal, state or local statute, rule, regulation, order or other
provision of law relating to air emissions, water discharge, noise emissions,
solid or liquid disposal, hazardous waste or substances, or other environmental,
health or safety matters (the notice to Lender to include, along with other
relevant information, the name of the complainant or claimant and the nature and
potential amount of the claim); (f) any event or condition described in Section
8.15 of this Agreement relating to ERISA; or (g) if any of the representations
and warranties contained in this Agreement, or in any of the Relevant Documents
or any other writing delivered to Lender by Borrower in connection with this
Agreement or any of the transactions contemplated thereby, ceases to be true,
correct and complete.
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5.5 Information and Documents to be Furnished to Lender. Furnish to
Lender in form and substance satisfactory to it:
(a) Financial Statements:
(i) Annual Statements. As soon as available and in any
event within one hundred twenty (120) days after the end of such fiscal year of
each Borrower:
(A) The certified and audited consolidated and
consolidating income and retained earnings statements of each Borrower for
each fiscal year;
(B) The certified and audited consolidated and
consolidating balance sheet of each Borrower as at the end of such fiscal year;
and
(C) The certified and audited consolidated and
consolidating statement of cash flows of each Borrower for such fiscal year;
each setting forth in comparative form the corresponding
figures as at the end of the previous fiscal year, all in reasonable detail,
including all supporting schedules and comments. The foregoing statements and
balance sheets shall be prepared in accordance with generally accepted
accounting principles consistently applied and maintained ("GAAP") and shall be
certified and audited by independent certified public accountants of recognized
standing acceptable to Lender in the reasonable exercise of its discretion with
respect to which such accountants shall deliver their opinion.
(ii) Monthly Financial Statements. As soon as available but in
no event later than thirty (30) days after the end of each month, a balance
sheet of each Borrower as of the end of such month and statements of income,
cash flows and changes in stockholders' equity for such month and for the period
commencing at the end of the previous fiscal year and ending with the end of
such month (all in reasonable detail and with all notes and supporting
schedules), prepared on a consolidated and consolidating basis, certified by the
Chief Executive Officer or the Chief Financial Officer of Borrower as presenting
fairly the financial condition of each Borrower as of the dates and for the
periods indicated and as having been prepared in accordance with generally
accepted accounting principles consistently applied, except as may be otherwise
disclosed in such financial statements or the notes thereto.
(b) Accounts, Inventory and Accounts Payable Reports. On or before
the fifteenth (15th) day of each month as at the close of the preceding month,
and from time to time as Lender may require: certificates and assignment
schedules describing the Qualified Accounts and Inventory in detail and total,
aging reports of
25
Accounts, Accounts Payable aging reports, and Collateral and Loan Reconciliation
reports, all in such form as Lender may require.
Borrower shall at least once each week, submit a borrowing
base certificate to Lender in such form and containing such information as may
be required by the Lender.
(c) Change in Status. Immediately, notice identifying any Inventory
or Account that has ceased to be Qualified.
(d) Rejection, Delay, Claims. Immediately, notice of the rejection
of goods, delay in performance, or claims made in regard to Accounts.
(e) ERISA Documents. As soon as filed or distributed, all ERISA
reports, notices, returns and other documents filed as required by or in
compliance with ERISA, whether to the Internal Revenue Service, the Department
of Labor, the Pension Benefit Guaranty Corporation or any other appropriate
agency.
(f) Violations. Immediately, a copy of any complaint, citation,
order or other notice of a violation or claim required to be reported pursuant
to Section 5.4(e) of this Agreement.
(g) Other Documents.
(i) Within thirty (30) days after the last day of each calendar
quarter, a certificate executed by the Chief Executive Officer or Chief
Financial Officer of Borrower satisfactory to Lender stating that there then
exists no Event of Default hereunder and no event which, with the giving of
notice or lapse of time or other condition, would constitute an Event of
Default;
(ii) Immediately upon demand of the Bank, all original and other
documents evidencing right to payment, including but not limited to invoices,
original orders, and shipping and delivery receipts; and
(iii) Immediately upon demand of the Bank, such other documents
or information as Lender may reasonably request, including financial projections
and cash flow analysis.
5.6 Access to Records and Property. At any time and from time to time,
upon request by Lender (but not in excess of four (4) times annually unless in
the opinion of Lender, the Borrower's financial condition or the Collateral is
deteriorating in which case there shall be no limitation on the number of
reviews by the Lender), give any representative of Lender access during normal
business hours to inspect any of Borrower's properties and to examine, copy and
make extracts from any and all books,
26
records and documents in the possession of Borrower or any independent
contractor relating to Borrower's affairs or the Collateral (including without
limitation returns for federal income tax and other taxes).
5.7 Insurance at Borrower's Expense.
(a) Liability and Property Insurance. Maintain at Borrower's
expense (with such insurers, in such amounts and with such deductibles as is
satisfactory to Lender) public liability and third party property damage
insurance and insurance on the Collateral (including without limitation
insurance against fire, explosion, boiler damage, theft, burglary, spoilage,
pilferage, loss in transit and all other hazards and risks ordinarily insured
against by other owners or users of such properties in similar businesses),
which insurance shall be evidenced by policies (i) in form and substance
satisfactory to Lender, (ii) designating Lender and its assigns as additional
co-insureds or loss payees as their interests may appear from time to time,
(iii) containing a "breach of warranty clause" whereby the insurer agrees that a
breach of the insuring conditions or any negligence of Borrower or any other
person shall not invalidate the insurance as to Lender and its assigns, and
(iv) requiring at least thirty (30) days prior written notice to Lender and its
assigns before cancellation or any material change shall be effective.
(b) Copies of Policies. Upon demand, deliver to Lender the original
of each policy evidencing insurance required by this Section 5.7, together with
evidence of payment of all premiums.
(c) Notice and Proof of Loss. In the event of loss or damage,
forthwith notify Lender and file proofs of loss satisfactory to Lender with the
appropriate insurer, but without limiting the rights of Lender pursuant to
Section 7.1(k).
(d) Proceeds. Forthwith upon receipt, endorse and deliver
insurance proceeds to Lender, but without limiting the rights of Lender pursuant
to Section 7.1(k).
In no event shall Lender be required either to (i) ascertain the
existence of or examine any insurance policy, or (ii) advise Borrower in the
event such insurance coverage shall not comply with the requirements of this
Agreement.
5.8 Condition of Collateral; No Liens. Maintain the Collateral in good
condition and repair at all times, preserve the Collateral from loss, damage, or
destruction of any nature whatsoever, and keep the Collateral free and clear of
any mortgage, security interest, assignment, pledge, hypothecation, or other
lien or encumbrance, except the liens created by this Agreement and any
identified on Schedule 5 to this Agreement.
27
5.9 Proceeds of Collateral. Forthwith upon receipt, pay to Lender all
proceeds of Collateral, whereupon such proceeds shall become Lender's sole
property.
5.10 Records. Maintain complete and accurate books and records of all
its operations and properties, including records of the Collateral and the
status of each of the Accounts.
5.11 Delivery of Documents. If any proceeds of Accounts shall include,
or any of the Accounts shall be evidenced by, notes, trade acceptances or
instruments or documents, or if any Inventory is covered by documents of title
or chattel paper, whether or not negotiable, immediately deliver them to Lender
appropriately endorsed. Borrower waives protest regardless of the form of the
endorsement. If Borrower fails to endorse any instrument or document, Lender is
authorized to endorse it on Borrower's behalf.
5.12 United States Contracts. If any of the Accounts arises out of a
contract with the United States or any of its departments, agencies or
instrumentalities, immediately notify Lender and execute any necessary
instruments in order that all money due or to become due under such contract
shall be assigned to Lender and proper notice of the assignment given under the
Federal Assignment of Claims Act.
5.13 Further Assurances.
(a) From time to time, execute and deliver such further documents
and take such further actions as Lender may reasonably request in order to carry
out the purposes of this Agreement, the Relevant Documents and any other
instruments, documents and agreements which shall be executed concurrently
herewith or thereafter with regard to the transactions contemplated by this
Agreement.
(b) In addition, if Judge Hospitality Services, Inc. or Judge
Electronic Services of Boston, Inc. operate any business activity after the date
hereof, the Borrower shall immediately notify Lender of such business activity,
shall grant to Lender a first lien or security interest in the assets of said
entity, execute and deliver to Lender such further documents and take such
further actions as Lender may reasonably request, and reimburse Lender for all
costs and expenses incurred by Lender in connection with such transactions
including but not limited to reasonable attorneys fees and costs.
5.14 Related Entities. Cause each Related Entity to comply with the
covenants stated in this Section 5, to the extent relevant to such Entity, as if
stated with reference to such Entity.
5.15 Affirmative Financial Covenants. The Borrowers shall comply with
the following financial covenants, (the "Financial Covenants") at all times
during the term of the Loans. The Financial Covenants shall be tested by the
Lender on a calendar quarter basis, i.e. September 30, December 31, March 31 and
June 30 of each calendar
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year during the term of the Loans. The Borrower shall deliver to the Lender
within forty-five (45) days after the end of each calendar quarter, schedules
setting forth in such detail as may reasonably be required by the Lender, a
computation of the Financial Covenants and certified by the Chief Executive
Officer or the Chief Financial Officer of Borrowers to be true and correct. The
Affirmative Financial Covenants are as follows:
(a) Tangible Net Worth. "Tangible Net Worth" shall mean the
Borrowers' net worth plus subordinated debt plus subordinated advances from
shareholders less officers'/employees' receivables less amounts due on covenants
not to compete, all of the foregoing as set forth on the Borrowers' consolidated
financial statements prepared in accordance with GAAP. Borrowers' Tangible Net
Worth shall not be less than the following amounts at the dates set forth:
As of Tangible Net Worth
----- ------------------
September 30, 1996 $1,000,000
December 31, 1996 1,900,000
March 31, 1997 2,800,000
June 30, 1997 4,000,000
September 30, 1997 6,000,000
December 31, 1997 8,500,000
March 31, 1998 at least 95% of Tangible
Net Worth as of December 31, 1997
June 30, 1998 at least 105% of Tangible
Net Worth as of December 31, 1997
September 30, 1998 at least 115% of Tangible
Net Worth as of December 31, 1997
December 31, 1998 at least 125% of Tangible
Net Worth as of December 31, 1997
(b) Ratio of Liabilities to Tangible Net Worth. The ratio of
Borrowers' consolidated Liabilities to Borrowers' Tangible Net Worth shall not
exceed the following ratios at the dates indicated:
As of Ratio Not to Exceed
----- -------------------
September 30, 1996 15.0 to 1
December 31, 1996 8.5 to 1
March 31, 1997 6.5 to 1
June 30, 1997 4.5 to 1
September 30, 1997 3.0 to 1
December 31, 1997 and thereafter 3.0 to 1
29
(c) Ratio of Liabilities Service Coverages. During the terms of the
Loans the Borrowers' Liabilities Service Coverage ratio shall be at least 1.5 to
1 measured on a rolling four (4) calendar quarter basis and shall be determined
as follows, all as set forth in the Borrowers' consolidated financial statements
prepared in accordance with GAAP:
Net profit plus depreciation plus amortization less
unfunded capital expenditures less dividends paid
---------------------------------------------------
Current portion of long term Liabilities
6. NEGATIVE COVENANTS
Borrower covenants and agrees that, until full and final
payment and performance of the Loans and all other Obligations under this
Agreement and the Relevant Documents, Borrower shall not, unless Lender shall
otherwise consent in writing:
6.1 No Consolidation, Merger, Acquisition, Liquidation. Enter into any
merger, consolidation, reorganization or recapitalization; take any steps in
contemplation of dissolution or liquidation; conduct any part of Borrower's
business through any corporate subsidiary, unincorporated association or other
entity not disclosed on Schedule 4 to this Agreement; or acquire the stock or
assets of any person, firm, joint venture, partnership, corporation or other
entity, whether by merger, consolidation, purchase of stock or otherwise.
6.2 Disposition of Assets or Collateral. Sell, lease, or otherwise
transfer or dispose of any or all of the Collateral or other assets of Borrower,
other than the sale of Inventory in the ordinary course of business and the
retirement of other assets in the normal course of operations.
6.3 Other Liens. Incur, create or permit to exist, any mortgage,
security interest, assignment, pledge, hypothecation, lien, encumbrance,
conditional sale or other title retention agreement, financing lease having
substantially the same effect as any of the foregoing, or other preferential
arrangement of any type, in each case upon or with respect to any assets of
Borrower, whether now owned or hereafter acquired, except (a) liens for taxes
not delinquent, (b) the liens created by this Agreement and the Relevant
Documents, (c) any liens identified on Schedule 5 to this Agreement, or
(d) liens in an aggregate amount at any time outstanding not exceeding Six
Hundred Thousand Dollars ($600,000) in 1996 and thereafter.
6.4 Other Liabilities. Incur, create, assume or permit to exist any
indebtedness or liability on account of either borrowed money or the deferred
purchase price of property or services, except (a) Obligations to Lender,
(b) indebtedness subordinated to payment of the Obligations on terms approved by
Lender in writing, (c) those liabilities existing on the date of this Agreement
and shown by the financial
30
statements attached as Schedule 1 to this Agreement, and (d) liabilities secured
by liens permitted under Section 6.3.
6.5 Loans. Makes loans to any person or entity except for loans to
each of the Borrower, inter se.
6.6 Guaranties; Contingent Liabilities. (a) Assume, guarantee, endorse,
contingently agree to purchase or otherwise become liable upon the obligation of
any person or entity, except by the endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of
business, or (b) agree to maintain the working capital or net worth of any
person or entity or to make investment in any person or entity (except for
short-term investment of excess cash), or (c) guarantees of liabilities under
Section 6.4.
6.7 Dividends and Other Distributions. Declare or pay any cash dividend
or make any distribution on, or redeem, retire or otherwise acquire directly or
indirectly, any share of its stock, or make any distribution of assets to its
stockholders.
6.8 Transactions with Affiliates. Except for transactions among
Borrower, inter se, Enter into any transaction with a person or entity directly
or indirectly controlling, controlled by or under the direct or indirect common
control of Borrower, on a basis less favorable in a material respect to Borrower
than if such transactions were not with such a person or entity.
6.9 Sale of Inventory. Sell any of the Inventory or a xxxx-and-hold,
guaranteed sale, sale-and-return, sale on approval or consignment basis, or any
other basis subject to a repurchase obligation or return right.
6.10 Removal of Collateral. Remove, or cause or permit to be removed,
any of the Collateral or other assets from the premises listed with the Lender,
except for sales of Inventory in the ordinary course of business.
6.11 Transfer of Notes or Accounts. Sell, assign, transfer, discount or
otherwise dispose of any Accounts or any promissory note or other instrument
payable to it with or without recourse, except for collection without recourse
in the ordinary course of business.
6.12 Settlements. Compromise, settle or adjust any claim in a material
amount relating to any of the Collateral.
6.13 Modification of Governing Documents. Change, alter or modify, or
permit any change, alteration or modification of, its Certificate of
Incorporation or Bylaws or other governing documents in any way that will have
any adverse effect on the Borrower's Obligations to the Lender.
31
6.14 Change Business. Cause or permit a material change in the nature
of its business as conducted on the date of this Agreement.
6.15 Change of Location or Name. Change any of the following:
(a) the locations stated in Section 4.12 of this Agreement for the maintenance
of the books and records relative to the Accounts and Inventory, (b) the
location of the principal place of business or chief executive office of
Borrower as stated in Section 4.14 of this Agreement, or (c) the name under
which Borrower conducts any of its business operations.
6.16 Change of Accounting Practices. Change its present accounting
principles or practices in any material respect, except as may be required by
changes in generally accepted accounting principles.
6.17 Inconsistent Agreement. Enter into any agreement containing any
provision that would be violated by the performance of Borrower's obligations
under this Agreement or any of the Relevant Documents or under any document
delivered or to be delivered by it in connection therewith.
6.18 Intentionally Omitted.
6.19 Capital Expenditures. During any fiscal year, enter into any
agreement to purchase or pay for, or become obligated to pay for, capital
expenditures, long term leases, capital leases or sale lease backs, in an amount
aggregated in excess of the following amounts:
As of Not to Exceed
----- -------------
January 1, 1996 to December 31, 1996 $1,500,000
January 1, 1997 to December 31, 1997
and in each year thereafter 750,000
6.20 Limitation on Compensation. In any fiscal year of Borrower, pay or
become obligated to pay in salaries, bonuses or other compensation to Xxxxxx X.
Judge, Jr., a total amount more than fifteen (15%) percent in excess of the
total amount Borrower paid or became obligated to pay Xxxxxx X. Judge, Jr. in
its immediately preceding fiscal year.
6.21 Related Entities. Cause, suffer or permit any Related Entity to
fail to observe any covenant stated in this Section 6. as if stated with
reference to such Entity.
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7. ADDITIONAL POWERS OF LENDER
7.1 Powers of Attorney. Borrower hereby constitutes and appoints Lender
(and any employee or agent of Lender, with full power of substitution) its true
and lawful attorney and agent in fact to take any or all of the actions
described below in Lender's or Borrower's name and at Borrower's expense:
(a) Charges Against Credit Balances. Lender, without demand, may
charge and withdraw from any credit balance that Borrower may have with Lender,
or with any affiliate of Lender, any amount that shall become due from Borrower
to Lender under this Agreement or any of the Relevant Documents.
(b) Evidence of Liens. Lender may execute such financing statements
and other documents and take such other actions as Lender deems necessary or
proper in order to create, perfect or continue the security interests and other
liens provided for by this Agreement or any of the Relevant Documents, and
Lender may file the same (or a photocopy of this Agreement or of any financing
statement signed by Borrower) in any appropriate governmental office.
(c) Preservation of Collateral. Lender may take any and all action
that it deems necessary or proper to preserve its interest in the Collateral,
including without limitation the payment of debts of Borrower that might impair
the Collateral or Lender's security interest therein, the purchase of insurance
on Collateral, the repair or safeguarding of Collateral, or the payment of
taxes, assessment or other liens thereon. All sums so expended by Lender shall
be added to the Obligations, shall be secured by the Collateral, and shall be
payable on demand with interest at the Default Rate from the respective dates
such sums are expended.
(d) Lender's Right to Cure. In the event Borrower fails to perform
any of its Obligations, then Lender may perform the same but shall not be
obligated to do so. All sums so expended by Lender shall be added to the
Obligations, shall be secured by the Collateral, and shall be payable on demand
with interest at the Default Rate from the respective dates such sums are
expended.
(e) Verification of Accounts. Lender may make test verifications of
any and all Accounts in any manner and through any medium Lender considers
advisable, and Borrower shall render any necessary assistance.
(f) Collections; Modifications of Terms. Upon the occurrence and
continuance of any Event of Default, Lender may demand, xxx for, collect and
give receipts for any money, instruments or property payable or receivable on
account for or in exchange for any of the Collateral, or make any compromises it
deems necessary or proper, including without limitation extended the time of
payment, permitting payment in installments, or otherwise modifying the terms or
rights relating to any of the
33
Collateral, all of which may be effected without notice to or consent by
Borrower and without otherwise discharging or affecting the Obligations, the
Collateral or the security interest granted under this Agreement or any of the
Relevant Documents.
(g) Notification of Account Debtors. Borrower, at the request of
Lender, shall notify the Account Debtors of Lender's security interest in its
Accounts. Upon the occurrence and continuance of any Event of Default, Lender
may notify the Account debtors on any of the Accounts to make payment directly
to Lender, and Lender may endorse all items of payment received by it that are
payable to Borrower; until such time as Lender elects to exercise such right of
notification, Borrower is authorized to collect and enforce the Accounts in
accordance with Section 2A.4.
(h) Notification as to Inventory. Lender may notify the bailee of
any Inventory of Lender's security interest therein.
(i) Endorsements. Lender may endorse Borrower's name on checks,
notes, acceptances, drafts, invoices, bills of lading and any other documents or
instruments requiring Borrower's endorsement.
(j) Mails. Upon the occurrence and continuance of any Event of
Default, Lender may notify the postal authorities to deliver all mail, parcels,
and other material addressed to Borrower to Lender at such address as Lender may
direct, and Lender may open and deal with same as it deems necessary or proper.
(k) Insurance. Lender may file proofs of loss and claim with
respect to any of the Collateral with the appropriate insurer, and may endorse
in its own and Borrower's name any checks or drafts constituting insurance
proceeds.
7.2 Irrevocability; Lender's Discretion. Borrower covenants and
agrees that any action in Section 7.1 may be taken at Lender's sole and absolute
discretion, at any time and from time to time, and (unless stated specifically
to the contrary in Section 7.1 with respect to any power) whether prior or
subsequent to an Event of Default, and Borrower hereby ratifies and confirms all
action so taken. Borrower further covenants and agrees that the powers of
attorney granted by Section 7.1 are coupled with an interest and shall be
irrevocable until full and final payment and performance of the Loans and all
other Obligations under this Agreement and the Relevant Documents; that said
powers are granted solely for the protection of Lender's interest and Lender
shall have no duty to exercise any thereof; that the decision whether to
exercise any of such powers, and the manner of exercise, shall be solely within
Lender's discretion; and that neither Lender nor any of its directors, officers,
employees or agents shall be liable for any act of omission or commission, or
for any mistake or error of judgment, in connection with any such powers.
34
8. EVENTS OF DEFAULT
The occurrence of any of the following shall constitute an Event of
Default:
8.1 Failure to Pay. Borrower fails to pay when due any principal of or
interest on any Revolving Loan or any other sum owing to Lender, including
without limitation any of the Obligations arising under this Agreement or any of
the Relevant Documents or under any other agreement with Lender;
8.2 Failure to Perform. Borrower fails to perform or observe (a) any
covenant, term or condition of this Agreement or any of the Relevant Documents,
and (b) any of the other Obligations;
8.3 Cross Default; Default on Other Debt. (a) Any other default on any
of the Obligations or under any of the Relevant Documents occurs, or (b) default
occurs under any indebtedness or other obligation of Borrower or of any
guarantor of any of the Obligations, or to any third party that entitles such
third party to declare such indebtedness or other obligation due prior to its
date of maturity;
8.4 False Representation or Warranty. Any representation, warranty or
statement contained in this Agreement, in any of the Relevant Documents or in
any other writing delivered to Lender in connection with the Collateral, this
Agreement or any of the transactions contemplated thereby, proves to have been
incorrect in any material respect when made;
8.5 Cessation of Business. Borrower ceases to do business as a going
concern;
8.6 Change in Condition. There occurs any change in the condition or
affairs, financing or otherwise, of Borrower or of any endorser, guarantor or
surety for any of the Obligations, which in the opinion of Lender impairs
Lender's security or increases its risks;
8.7 Change in Ownership. Except with respect to shares of the
outstanding voting stock sold by Borrower as part of the Initial Public Offering
and except for 3,000 shares of Judge, Inc. being transferred from Xxxxxx X.
Judge, Jr. and Xxxxxxx Xxxx to Xxxxxxxxx X. Xxxxxxxxxx, Xxxxxxx Xxxxxxx and
Xxxxxxxx Xxxxxxx, if at any time less than one hundred (100%) percent of the
issued and outstanding voting stock of Borrower is owned by persons other than
the shareholders holding voting stock of the Borrower on the date of this
Agreement; anything to the contrary in the foregoing sentence notwithstanding,
at any time, Xxxxxx X. Judge, Jr., shall own less than fifty one percent (51%)
of the voting stock of Borrower;
35
8.8 Insecurity. At any time Lender believes that the prospect of
payment or performance of any of the Obligations is impaired;
8.9 Liquidation or Dissolution. Borrower takes any action to authorize
its liquidation or dissolution;
8.10 Inability to Pay Debts. Borrower (a) becomes unable or fails to
pay its debts generally as they become due, (b) admits in writing its inability
to pay its debts, or (c) proposes or makes a composition agreement with
creditors, a general assignment for the benefit of creditors; or a bulk sale;
8.11 Bankruptcy; Insolvency. Any proceeding is instituted by or against
Borrower (and such proceeding is not dismissed within sixty (60) days after it
is filed) (a) seeking to adjudicate it bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment or composition of its or its debts under
any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or (b) seeking appointment of a receiver, trustee, or other similar
official for it or for any substantial part of its property, or Borrower takes
any action to authorize or consent to any action described in this Section 8.11;
8.12 Judgments. One or more judgment or orders for the payment of money
exceeding One Hundred Thousand Dollars ($100,000) in the aggregate are rendered
against Borrower, and such judgment or order continues unsatisfied and not
effectively stayed for a period of thirty (30) consecutive days;
8.13 Attachment. Any substantial part of the assets of Borrower becomes
subject to attachment, execution, levy or like process which shall not have been
effectively stayed within thirty (30) days after it is served upon the Borrower;
8.14 Condemnation. Any governmental agency, or other entity with power
to do so, commences proceedings to condemn, seizes or expropriates assets of
Borrower necessary for the conduct of Borrower's business as conducted on the
date of this Agreement, without material change, or Borrower abandons such
assets or suspends operation thereof for a period of thirty (30) consecutive
days;
8.15 ERISA. With respect to any Plan (as defined in Section 4.17 of
this Agreement), there occurs or exists any of the events or conditions
described in the following clauses (a) through (h) and such event or condition,
together with all like events or conditions, could in the opinion of Lender
subject Borrower to any tax, penalty or other liability that might, singly or in
the aggregate, have a material adverse effect on the financial condition or the
properties or operations of Borrower: (a) a reportable event as defined in
Section 4043 of ERISA, (b) a prohibited transaction as defined in Section 406 of
ERISA or Section 4975 of the Internal Revenue Code, (c) termination of the Plan
or filing of notice of intention to terminate, (d) institution by the Pension
Benefit Guaranty
36
Corporation of proceedings to terminate, or to appoint a trustee to administer,
the Plan, or circumstances that constitute grounds for any such proceedings,
(e) complete or partial withdrawal from a multiemployer Plan, or the
reorganization, insolvency or termination of a multiemployer Plan, (f) an
accumulation funding deficiency within the meaning of ERISA, (g) violation of
the reporting, disclosure or fiduciary responsibility requirements of ERISA or
the Internal Revenue Code, or (h) any act or condition which could result in
direct, indirect or contingent liability to any Plan or the Pension Benefit
Guaranty Corporation; or
8.16 Guaranty. Any guaranty of any of the Obligations ceases to be
effective or any guarantor denies liability thereunder.
9. REMEDIES
9.1 Rights in General. Upon the occurrence of an Event of Default
described in Section 8.11, and at the option of Lender upon the occurrence of
any other Event of Default and upon ten (10) days written notice of a breach of
Sections 8.1, 8.4, 8.5, or 8.10, and upon thirty (30) days written notice of a
breach of Sections 8.2, 8.3, 8.6, 8.7, 8.8, 8.9, 8.11, 8.12, 8.13, 8.14, 8.15 or
8.16, (a) all provisions for additional Loans under this Agreement shall
terminate, (b) the principal and interest of the Revolving Loan and all other
amounts payable under this Agreement and all other Obligations shall become and
be immediately due and payable, without presentment, demand, protest, or further
notice of any kind, all of which are hereby expressly waived by Borrower, and
(c) Lender shall be entitled to exercise forthwith (to the extent and in such
order as Lender may elect, in its sole and absolute discretion) any or all
rights and remedies provided for in this Agreement, any Notes, or any Relevant
Documents, all rights and remedies of a secured party under the UCC, and all
other rights and remedies that may otherwise be available to Lender by agreement
or at law or in equity.
9.2 Specific Rights Regarding Collateral. In addition to the rights as
stated generally in Section 9.1, Borrower agrees that, upon the occurrence of an
Event of Default, Lender shall be entitled to the rights and remedies, and
Borrower shall have the obligations, set forth below:
(a) Lender may enter upon the premises where any of the Collateral
is located and take possession thereof and, at Lender's option, remove or sell
in place any or all thereof.
(b) Upon notice from Lender, Borrower shall promptly at its expense
assemble any or all of the Collateral and make it available at a reasonably
convenient place designated by Lender.
(c) Lender may, with or without judicial process, sell, lease or
otherwise dispose of any or all of the Collateral at public or private sale or
proceedings,
37
by one or more contracts, in one or more parcels, at the same or different times
and places, with or without having the Collateral at the place of sale or other
disposition, to such persons or entities, for cash or credit or for future
delivery and upon such other terms, as Lender may in its discretion deem best in
each such matter. The purchaser of any of the Collateral at any such sale shall
hold the same free of any equity or redemption or other right or claim of
Borrower, all of which - together with all rights of stay, exemption or
appraisal under any statute or other law now or hereafter in effect Borrower
hereby unconditionally waives to the fullest extent permitted by law. If any of
the Collateral is sold on credit or for future delivery, Lender shall not be
liable for the failure of the purchaser to pay for same and, in the event of
such failure, Lender may resell such Collateral.
(d) Borrower hereby further agrees that notice of the time and
place of any public sale, or of the time after which any private sale or other
intended disposition or action relating to any of the Collateral is to be made
or taken, shall be deemed commercially reasonable notice thereof, and shall
satisfy the requirements of any applicable statute or other law, if such notice
(i) is delivered not less than three (3) business days prior to the date of the
sale, disposition or other action to which the notice relates, or (ii) is mailed
(by ordinary first class mail, postage prepaid) not less than five (5) business
days prior thereto. Lender shall not be obligated to make any sale or other
disposition or take other action pursuant to such notice and may, without other
notice or publication, adjourn or postpone any public or private sale or other
disposition or action by announcement at the time and place previously fixed
therefor, and such sale, disposition or action may be held or accomplished at
any times or places to which the same may be so adjourned or postponed.
(e) Lender may purchase any or all of the Collateral at any public
sale and may purchase at private sale any of the Collateral that is of a type
customarily sold in a recognized market or the subject of widely distributed
price quotations or as may be further permitted by law. Lender may make payment
of the purchase price for any Collateral by credit against the then outstanding
amount of the Obligations.
(f) Lender may at its discretion retain any or all of the
Collateral and apply the same in satisfaction of part or all of the Obligations.
(g) Any cash proceeds of sale, lease or other disposition of
Collateral shall be applied as follows:
First: To the expenses of collecting, enforcing, safeguarding,
holding and disposing of Collateral, and to other expenses of
Lender in connection with the enforcement of this Agreement, the
Notes, any of the Relevant Documents, or any other agreement
relating to any of the Obligations (including without limitation
court costs and the fees and expenses of attorneys, accountants and
appraisers),
38
together with interest at the Default Rate from the respective date
such sums are expended;
Second: Any surplus then remaining to the payment of
interest and principal of the Loans and other sums payable as part
of the Obligations, in such order as Bank elects; and
Third: Any surplus then remaining to Borrower or whomever
may be lawfully entitled thereto.
9.3 Set-Off. Borrower further agrees that:
(a) Upon the occurrence of an Event of Default, Lender is hereby
authorized at any time from time to time, without notice to Borrower (any such
notice being expressly waived by Borrower), to set off and apply (or cause any
affiliate of Lender to set off and apply) any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by Lender or such affiliate to or for the credit
or the account of Borrower, against any or all of the Obligations of Borrower
now or hereafter existing under this Agreement, the Notes or otherwise,
irrespective of whether or not Lender shall have made any demand and although
such Obligations may be unmatured.
(b) If any other lender has participated with Lender with respect
to any of the Loans, Borrower hereby authorizes such participating lender, upon
the occurrence of any Event of Default, immediately and without notice or other
action, at request of Lender, to set off against any of Borrower's Obligations
to Lender any deposits held or money owed by such participating lender in any
capacity to Borrower, whether or not due, and to remit the money set off to
Lender.
(c) The rights stated in this Section 9.3 are in addition to other
rights and remedies (including, without limitation, other rights of set-off or
lien) that Lender or any participating lender may have.
9.4 Cumulative Remedies; No Waiver by Lender. No remedy referred to
in this Agreement is intended to be exclusive, but each shall be cumulative and
in addition to any other remedy referred to in this Agreement or otherwise
available to Lender by agreement or at law or in equity. No express or implied
waiver by Lender of any default or Event of Default shall in any way be, or be
construed to be, a waiver of any future or subsequent default of Event of
Default. The failure or delay of Lender in exercising any rights granted it
hereunder upon any occurrence of any of the contingencies set forth herein shall
not constitute a waiver of any such right upon the continuation or recurrence of
any such contingency or similar contingencies, and any single or partial
exercise of any particular right by Lender shall not exhaust the same or
constitute a waiver of any other right.
39
9.5 Waivers and Consents Relating to Remedies. In connection with any
action or proceeding arising out of or relating in any way to this Agreement,
the Notes, any of the Loans, any of the Relevant Documents, any other agreement
relating to any of the Obligations, any of the Collateral, or any act or
omission relating to any of the foregoing:
(a) BORROWER AND LENDER WAIVE THE RIGHT TO TRIAL BY JURY AS MORE
FULLY SET FORTH IN SECTION 14.15 BELOW;
(b) Borrower and Lender consent to the jurisdiction of any court of
the Commonwealth of Pennsylvania and of any federal court located in
Pennsylvania, and waive any right to object to such court as an inconvenient
forum;
(c) Borrower agrees that all of the Collateral constitutes equal
security for all of the Obligations, and agrees that Lender shall be entitled to
sell, retain or otherwise deal with any or all of the Collateral, in any order
or simultaneously as Lender shall determine in its sole and absolute discretion,
free of any requirement for the marshalling of assets or other restriction upon
Lender in dealing with the Collateral; and
(d) Borrower agrees that Lender may proceed directly against
Borrower for collection of any or all of the Obligations without first selling,
retaining or otherwise dealing with any of the Collateral.
10. ADDITIONAL WAIVERS AND CONSENTS OF BORROWER.
10.1 Waivers. Borrower waives demand, presentment, notice of dishonor
or protest of any instruments either of Borrower or others which may be included
in the Collateral.
10.2 Consents. Borrower consents to (a) any extension, postponement of
time of payment or other indulgence, (b) any substitution, exchange or release
of Collateral, (c) any addition to, or release of, any party or person primarily
or secondarily liable, and (d) any acceptance of partial payment on any Accounts
or instruments and the settlement, compromising or adjustment thereof.
11. RELEASE UPON PAYMENT IN FULL
11.1 Mutual Release. Upon full and final payment and performance of the
Loans and all other Obligations under this Agreement and the Relevant Documents,
Borrower, Lender and any sureties shall thereupon automatically each be fully,
finally and forever released and discharged from any and all claims, liabilities
and obligations, whether in contract or tort, arising out of or relating in any
way to this Agreement, the
40
Notes or Loans, or any act or omission relating to any of the foregoing or to
any of the Collateral or Relevant Documents.
12. COSTS, EXPENSES AND TAXES
Borrower agrees to pay on demand:
(a) all costs and expenses in connection with the preparation,
execution, delivery and administration of this Agreement, the Notes, the
Relevant Documents, and the other documents to be delivered in connection with
this Agreement, or any amendments to any of the foregoing (including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel for Lender
and the cost of appraisals and reappraisals of Collateral).
(b) all losses, costs and expenses incurred by Lender in
connection with the enforcement of this Agreement, the Notes, any of the
Relevant Documents, or any other agreement relating to any of the Obligations,
or in the preservation of any rights of Lender under any thereof, or in
connection with legal advice relating to the rights or responsibilities of
Lender under any thereof (including without limitation court costs and the
reasonable fees and expenses of attorneys, accountants and appraisers), and any
expenditure made by Lender in accordance with Section 7.1(b) or (c) of this
Agreement; and
(c) any and all stamp and other taxes payable or determined to
be payable in connection with the execution and delivery of this Agreement, the
Notes, or any of the Relevant Documents, and all liabilities to which Lender may
become subject as the result of delay in paying or omission to pay such taxes.
With respect to any amount advanced by Lender and required to
be reimbursed by Borrower pursuant to the foregoing provisions of this Section
12, Borrower shall also pay Lender interest on such amount at the Default Rate.
Borrower's obligations under this Section 12 shall survive termination of the
other provisions of this Agreement.
13. INDEMNIFICATION BY BORROWER
Borrower hereby covenants and agrees to indemnify, defend and
hold harmless Lender and its officers, directors, employees and agents from and
against any and all claims, damages, liabilities, costs and expenses (including
without limitation, the fees and out-of-pocket expenses of counsel) which may be
incurred by or asserted against Lender or any such other individual or entity in
connection with:
41
(a) any investigation, action or proceeding arising out of or in
any way relating to this Agreement, the Notes, the Loans, any of the Relevant
Documents, any other agreement relating to any of the Obligations, any of the
Collateral, or any act or omission relating to any of the foregoing;
(b) any taxes, liabilities, claims or damages relating to the
Collateral or Lender's liens thereon;
(c) the correctness, validity or genuineness of any instruments or
documents that may be released or endorsed to Borrower by Lender (which shall
automatically be deemed to be without recourse to Lender in any event), or the
existence, character, quantity, quality, condition, value or delivery of any
goods purporting to be represented by any such documents; or
(d) the requirement of this Section 13 by the Borrower to indemnify
the Lender shall not apply in any litigation between the Lender and the
Borrower.
14. MISCELLANEOUS
14.1 Opinion of Counsel for Borrower and Sureties. The Borrower
shall cause its attorneys to issue an opinion to the Lender on such matters as
the Lender may require from time to time including but not limited to the
organization and existence of the Borrower and Sureties, the enforceability
and validity of the Loan Documents, the enforceability of the Loans and
opinions on such other matters as Lender may reasonably request.
14.2 Entire Agreement; Amendments; Lender's Consent. This Agreement
(including the Schedules thereto), the Notes, and the Relevant Documents
supersede, with respect to their subject matter, all prior and contemporaneous
agreements, understandings, inducements or conditions between the respective
parties, whether express or implied, oral or written. No amendment or waiver of
any provision of this Agreement, the Notes or any of the Relevant Documents, nor
consent to any departure by Borrower therefrom, shall in any event be effective
unless the same shall be in writing and signed by Lender, and then such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given.
14.3 Notices. All notices and other communications relating to this
Agreement or the Notes (or to any of the Relevant Documents, unless otherwise
specified therein) shall be in writing and addressed as follows:
42
If to Lender: Midlantic Bank, N.A.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Commercial Finance Department
If to Borrower: c/o Judge, Inc., et al.
Xxx Xxxx Xxxxx, Xxxxx 000,
Xxxx Xxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Judge, Jr.,
Chief Executive Officer
or to such other address as the respective party or its successors or
assigns may subsequently designate by proper notice.
14.4 Gender. Throughout this Agreement, the masculine shall include the
feminine and vice versa and the singular shall include the plural and vice
versa, unless the context of this Agreement indicates otherwise.
14.5 Joint Borrowers. If more than one party executes this Agreement as
Borrower, then for the purpose of this Agreement the term Borrower shall mean
each such party and each such party shall be jointly and severally liable as
Borrower for the Obligations as defined herein without regard to which party
receives the proceeds of any of the Loans. Each such party hereby acknowledges
that it expects to derive economic advantage from each of the Loans.
14.6 Cross Default; Cross Collateral. Borrower hereby agrees that
(a) all other agreements between Borrower and Lender or any of its affiliates is
hereby amended so that a default under this Agreement is a default under all
other agreements and a default under any one of the other agreements is a
default under this Agreement, and (b) the Collateral under this Agreement
secures the Obligations now or hereafter outstanding under all other agreements
between Borrower and Lender or any of its affiliates and the collateral pledged
under any other agreement with Lender or any of its affiliates secures the
Obligations under this Agreement.
14.7 Binding Effect; Governing Law. This Agreement shall be binding
upon and inure to the benefit of Borrower and Lender and their respective
successors and assigns, except that Borrower shall not have the right to assign
its rights hereunder or any interest herein without the prior written consent of
Lender. This Agreement, the Notes, the Relevant Documents and the other
documents delivered in connection with this Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of Pennsylvania.
Anything to the contrary contained herein notwithstanding, this Agreement and
the Relevant Documents executed by the Borrower and/or the Sureties in
connection herewith, shall not be effective until
43
(i) executed by the Borrower and delivered to the Bank's offices in Pennsylvania
and (ii) duly signed by two officers of the Bank in Pennsylvania.
14.8 Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute but one and the same
agreement.
14.9 Severability of Provisions. Any provision of this Agreement, the
Notes or any of the Relevant Documents that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement, such Notes or such Documents or affecting the
validity or enforceability of such provision in any other jurisdiction.
14.10 Headings. The headings preceding the text of this Agreement are
inserted solely for convenience of reference and shall not constitute a part of
this Agreement nor affect its meaning, construction or effect.
14.11 Schedules. All of the Schedules to this Agreement are hereby
incorporated by reference herein and made a part hereof.
14.12 Further Acknowledgements and Agreements of Borrower and the
Lender.
(a) General Acknowledgements.
(1) Borrower and the Lender acknowledge and agree that
they (i) have independently reviewed and approved each and every provision of
this Agreement, including the Exhibits attached hereto and any and all other
documents and items as they or their counsel have deemed appropriate, and
(ii) have entered into this Agreement and have executed the closing documents
voluntarily, without duress or coercion, and have done all of the above with the
advice of their legal counsel.
(2) Borrower and Lender acknowledge and agree that, to
the extent deemed necessary by them or their counsel, they and their counsel
have independently reviewed, investigated and/or have full knowledge of all
aspects of the transaction and the basis for the transaction contemplated by
this Agreement and/or have chosen not to so review and investigate (in which
case, Borrower acknowledges and agrees that it has knowingly and upon the advice
of counsel waived any claim or defense based on any fact or any aspect of the
transaction that any investigation would have disclosed), including without
limitation:
44
(i) the risks and benefits of the various waivers of
rights contained in this Agreement, including
but not limited to, the waiver of the right to a
jury trial;
(ii) the adequacy of the consideration being
transferred under this Agreement, including the
adequacy of the consideration for the Mutual Release
as set forth in Section 11.3 hereof;
(3) Borrower has made its own investigation or elected not
to make such investigation as to all matters it deems material to this
transaction and has not relied on any statement of fact or opinion, disclosure
or non-disclosure of the Lender, and has not been induced by the Lender in any
way, except for the consideration recited herein, in entering into this
Agreement and executing the closing documents contemplated hereby, and further
acknowledges that the Lender has not made any warranties or representations of
any kind in connection with this transaction except as specifically set forth
herein or in the documents executed in connection with this Agreement, and
Borrower is not relying on any such representations or warranties.
(4) Borrower acknowledges and agrees that, after careful
consideration, it does not deem any matter not reviewed or investigated by it to
be material to this Agreement and the transaction contemplated hereby.
14.13 Prior Agreements. This Agreement is an amendment and restatement
of the terms and conditions of the lending relationship between Borrower and
Lender as previously set forth in Relevant Documents, and any amendments or
supplements to the aforementioned agreements, and is not a new loan agreement,
and all of the terms and conditions of the aforementioned agreements shall
remain in full force and effect as though set forth herein at length, to the
extent not inconsistent with the terms of this Agreement. To the extent of any
inconsistencies, the terms of this Agreement shall control.
14.14 Liability of Sureties. By executing this Agreement, the Lender is
not releasing any existing Surety with respect to the obligations of Borrower to
the Lender.
14.15 WAIVER OF JURY TRIAL.
BORROWER, SURETIES AND LENDER, UPON ADVICE FROM THEIR RESPECTIVE
COUNSEL, HEREBY INTENTIONALLY, KNOWINGLY, VOLUNTARILY, EXPRESSLY AND
MUTUALLY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE
OF ACTION (A) ARISING UNDER THIS AGREEMENT OR ANY OTHER DOCUMENTS
45
EVIDENCING THE LOAN, OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL
TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS
AGREEMENT OR ANY OF THE OTHER DOCUMENTS EVIDENCING THE LOAN, OR THE TRANSACTIONS
RELATED HERETO OR THERETO, OR (C) IN ANY LITIGATION BETWEEN THE PARTIES, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER IN CONTRACT OR TORT
OR OTHERWISE, AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A
JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE THIS ORIGINAL AGREEMENT OR A
COPY THEREOF WITH ANY COURT AS WRITTEN EVIDENCE TO THE CONSENT OF THE PARTIES
HERETO TO THE WAIVER OF THEIR RIGHT TO A TRIAL BY JURY.
IN WITNESS WHEREOF, the undersigned have set their hands and
seals or caused these presents to be executed by their proper corporate officers
and sealed with their seal the day and year first above written.
JUDGE, INC. (Borrower)
Attest:
/s/ Xxxxxxxxx X. Xxxxxxxxxx By: /s/ Xxxxxx X. Judge, Jr.
---------------------------------- ----------------------------------
Xxxxxxxxx X. Xxxxxxxxxx, Secretary Xxxxxx X. Judge, Jr.,
(Corporate Seal) Chief Executive Officer
JUDGE TECHNICAL SERVICES, INC.
(Borrower)
Attest:
/s/ Xxxxxxxxx X. Xxxxxxxxxx By: /s/ Xxxxxx X. Judge, Jr.
---------------------------------- -----------------------------------
Xxxxxxxxx X. Xxxxxxxxxx, Secretary Xxxxxx X. Judge, Jr.,
(Corporate Seal) Chief Executive Officer
SIGNATURES CONTINUED ON PAGE 47
46
SIGNATURES CONTINUED FROM PAGE 46
JUDGE PROFESSIONAL SERVICES, INC.
(Borrower)
Attest:
/s/ Xxxxxxxxx X. Xxxxxxxxxx By: /s/ Xxxxxx X. Judge, Jr.
---------------------------------- ----------------------------------
Xxxxxxxxx X. Xxxxxxxxxx, Secretary Xxxxxx X. Judge, Jr.,
(Corporate Seal) Chief Executive Officer
JUDGE IMAGING SYSTEMS, INC.
(Borrower)
Attest:
/s/ Xxxxxxxxx X. Xxxxxxxxxx By: /s/ Xxxxxx X. Judge, Jr.
---------------------------------- ----------------------------------
Xxxxxxxxx X. Xxxxxxxxxx, Secretary Xxxxxx X. Judge, Jr.,
(Corporate Seal) Chief Executive Officer
JUDGE ELECTRONICS SERVICES OF
FLORIDA, INC.
Attest: (Borrower)
/s/ Xxxxxxxxx X. Xxxxxxxxxx By: /s/ Xxxxxx X. Judge, Jr.
---------------------------------- ----------------------------------
Xxxxxxxxx X. Xxxxxxxxxx, Secretary Xxxxxx X. Judge, Jr.,
(Corporate Seal) Chief Executive Officer
JUDGE INC. OF NEW JERSEY
Attest: (Borrower)
/s/ Xxxxxxxxx X. Xxxxxxxxxx By: /s/ Xxxxxx X. Judge, Jr.
---------------------------------- ----------------------------------
Xxxxxxxxx X. Xxxxxxxxxx, Secretary Xxxxxx X. Judge, Jr.,
(Corporate Seal) Chief Executive Officer
JUDGE TECHNICAL SERVICES OF
N.J., INC.
Attest: (Borrower)
/s/ Xxxxxxxxx X. Xxxxxxxxxx By: /s/ Xxxxxx X. Judge, Jr.
---------------------------------- ----------------------------------
Xxxxxxxxx X. Xxxxxxxxxx, Secretary Xxxxxx X. Judge, Jr.,
(Corporate Seal) Chief Executive Officer
SIGNATURES CONTINUED ON PAGE 48
47
SIGNATURES CONTINUED FROM PAGE 47
Witness:
/s/ Xxxxxx X. Xxxxxx /s/ Xxxxxx X. Judge, Jr. (Seal)
-------------------------------- -------------------------------------------
Xxxxxx X. Judge, Jr., individually (Surety)
Witness:
/s/ Xxxxxx X. Xxxxxx /s/ Xxxxxxx X. Xxxx (Seal)
-------------------------------- -------------------------------------------
Xxxxxxx X. Xxxx, individually (Surety)
Witness:
/s/ Xxxxxx X. Xxxxxx /s/ Xxxxxxxx X. Xxxx (Seal)
-------------------------------- -------------------------------------------
Xxxxxxxx X. Xxxx, individually (Surety)
MIDLANTIC BANK, N.A. (Lender)
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Xxxxxx X. Xxxxxx, Vice President
48
