EXHIBIT 10.7
BORROWER
CET ENVIRONMENTAL SERVICES, INC.
COMPASS BANK A CALIFORNIA CORPORATION COMMERCIAL
11210 HURON VARIABLE RATE
NORTHGLENN, CO 80234 REVOLVING OR
(000) 000-0000 "LENDER" DRAW NOTE
ADDRESS
0000 XXXXX XXXXXX XXXXXXX
XXXXXXXXX, XX 00000
TELEPHONE NO. IDENTIFICATION NO.
(000) 000-0000 00-0000000
OFFICER INTEREST PRINCIPAL AMOUNT/ FUNDING/ MATURITY CUSTOMER LOAN
IDENTIFICATION RATE CREDIT LIMIT AGREEMENT DATE DATE NUMBER NUMBER
DMB VARIABLE $1,000,000.00 12/09/01 06/09/02 10196707
RENEWAL OF EXISTING WORKING CAPITAL LINE OF CREDIT
PROMISE TO PAY: For value received, Borrower promises to pay to the order of
Lender the principal amount of One Million and no/100 Dollars ($1,000,000.00)
or, if less, the aggregate unpaid principal amount of all loans or advances made
by the Lender to the Borrower under this Note plus interest on the unpaid
principal balance at the rate and in the manner described below, until all
amounts owing under this Note are paid in full. All amounts received by Xxxxxx
shall be applied first to accrued unpaid interest, then to unpaid principal and
then to unpaid late charges and expenses, or in any other order as determined by
Xxxxxx, in Xxxxxx's sole discretion, as permitted by law.
REVOLVING OR DRAW FEATURE: [X] This Note possesses a revolving feature. Upon
satisfaction of the conditions set forth in this Note Borrower shall be entitled
to borrow up to the full principal amount of the Note and to repay and reborrow
from time to time during the term of this Note. [ ] This Note possesses a draw
feature. Upon satisfaction of the conditions set forth in this Note, Borrower
shall be entitled to draw one or more times under this Note. Any repayment may
not be reborrowed. The aggregate amount of such draws shall not exceed the full
principal amount of this Note.
Information with regard to any loans or advances under this Note shall be
recorded and maintained by Xxxxxx in its internal records and such records
shall be conclusive of the principal and interest owed by Borrower under this
Note unless there is a material error in such records. The Lender's failure to
record the date and amount of any loan or advance shall not limit or otherwise
affect the obligations of the Borrower under this Note to repay the principal
amount of the loans or advances together with all interest accruing thereon.
Borrower shall be entitled to inspect or obtain a copy of the records during
Xxxxxx's business hours.
CONDITIONS FOR ADVANCES: If no Event of Default has occurred under this Note,
Borrower shall be entitled to borrow monies under this Note (subject to the
limitations described above) under the following conditions:
TO BE DRAWN AS NEEDED, SUBJECT TO BANK APPROVAL.
INTEREST RATE: This Note has a variable rate feature. The interest rate on this
Note may change from time to time if the Index Rate identified below changes.
Interest shall be computed on the basis of the actual number of days over 360
days per year. Interest on this Note shall be calculated and payable at a
variable rate equal to 1.000% per annum over the Index Rate. The initial
interest rate on this Note shall be 6.000% per annum. Any change in the
interest rate resulting from a change in the Index Rate will be effective on:
THE ACTUAL DATE OF CHANGE.
RATE LIMITATIONS: Subject to applicable law, the minimum interest rate on this
Note shall be 5.000% per annum. The maximum interest rate on this Note shall not
exceed 21.000% per annum, or if less, or if a maximum rate is not indicated,
the maximum interest rate Lender is permitted to charge by law. The maximum rate
increase at any one time will be n/a%. The maximum rate decrease at any one
time will be n/a%.
INDEX RATE: The Index Rate for this Note shall be:
The prime rate as published in the Wall Street Journal's "Money Rates"
table. If multiple prime rates are quoted in the table, then the highest
prime rate will be the Index Rate.
If the Index Rate is redefined or becomes unavailable, then Lender may select
another index which is substantially similar.
DEFAULT RATE: If there is an Event of Default under this Note, the Lender may,
in its discretion, increase the interest rate on this Note to: 10.000% over the
promissory note rate or the maximum interest rate Lender is permitted to charge
by law, whichever is less.
PAYMENT SCHEDULE: Borrower shall pay the principal and interest according to the
following schedule:
Interest only payments beginning January 09, 2002 and continuing at monthly
time intervals thereafter. A final payment of the unpaid principal balance plus
accrued interest is due and payable on June 09, 2002.
PREPAYMENT: This Note may be prepaid in part or in full on or before its
maturity date. If this Note contains more than one installment, any partial
prepayment will not affect the due date or the amount of any subsequent
installment, unless agreed to, in writing, by Xxxxxxxx and Lender. If this Note
is prepaid in full, there will be: [X] No minimum finance charge. [ ] A minimum
finance charge of $_________________.
LATE CHARGE: If a payment is received more than 10 days late, Borrower will be
charged a late charge of: [X] 5.00% of the unpaid payment; [ ] $______ or
______% of the unpaid payment, whichever is [ ] greater [ ] less.
SECURITY: To secure the payment and performance of obligations incurred under
this Note, Borrower grants Lender a security interest in all of Borrowers right,
title, and interest in all monies, instruments, savings, checking and other
accounts of Borrower (excluding IRA, Xxxxx, trust accounts and other accounts
subject to tax penalties if so assigned) that are now or in the future in
Lender's custody or control. [ ] If checked, the obligations under this Note are
also secured by the collateral described in any security instrument(s) executed
in connection with this Note, and any collateral described in any other security
instrument(s) securing this Note or all of Borrower's obligations.
RENEWAL: [X] If checked, this Note is a renewal, but not a satisfaction, of
Loan Number 10196682.
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THE PERSONS SIGNING BELOW ACKNOWLEDGE THAT THEY HAVE READ, UNDERSTAND, AND AGREE
TO THE TERMS AND CONDITIONS OF THIS NOTE, INCLUDING THE PROVISIONS ON THE
REVERSE SIDE, AND FURTHER ACKNOWLEDGE RECEIPT OF AN EXACT COPY OF THIS NOTE.
Dated: December 09, 2001
BORROWER: CET ENVIRONMENTAL SERVICES, INC. BORROWER:
A CALIFORNIA CORPORATION
By: /s/ XXXXXX X. XXXXX
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XXXXXX X. XXXXX
PRESIDENT
BORROWER: BORROWER:
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BORROWER: BORROWER:
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BORROWER: BORROWER:
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TERMS AND CONDITIONS
1. EVENTS OF DEFAULT. An Event of Default will occur under this Note in the
event that Borrower, any guarantor or any other third party pledging collateral
to secure this Note:
(a) fails to make any payment on this Note or any other indebtedness to
Lender when due;
(b) fails to perform any obligation or breaches any warranty or covenant
to Lender contained in this Note, any security instrument, or any
other present or future written agreement regarding this or any other
indebtedness of Borrower to Lender;
(c) provides or causes any false or misleading signature or representation
to be provided to Lender;
(d) sells, conveys, or transfers rights in any collateral securing this
Note without the written approval of Xxxxxx; destroys, loses or
damages such collateral in any material respect; or subjects such
collateral to seizure, confiscation or condemnation;
(e) has a garnishment, judgment, tax levy, attachment or lien entered or
served against Borrower, any guarantor, or any third party pledging
collateral to secure this Note or any of their property;
(f) dies, becomes legally incompetent, is dissolved or terminated, ceases
to operate its business, becomes insolvent, makes an assignment for
the benefit of creditors, fails to pay debts as they become due, or
becomes the subject of any bankruptcy, insolvency or debtor
rehabilitation proceeding;
(g) fails to provide Lender evidence of satisfactory financial condition;
(h) has a majority of its outstanding voting securities sold, transferred
or conveyed to any person or entity other than any person or entity
that has the majority ownership as of the date of the execution of
this Note; or
(i) causes Lender to deem itself insecure due to a significant decline in
the value of any real or personal property securing payment of this
Note, or Lender in good faith, believes the prospect of payment or
performance is impaired.
2. RIGHTS OF LENDER ON EVENT OF DEFAULT. If there is an Event of Default under
this Note, Lender will be entitled to exercise one or more of the following
remedies without notice or demand (except as required by law):
(a) to declare the principal amount plus accrued interest under this Note
and all other present and future obligations of Borrower immediately due and
payable in full, such acceleration shall be automatic and immediate if the
Event of Default is a filing under the Bankruptcy Code;
(b) to collect the outstanding obligations of Borrower with or without
resorting to judicial process;
(c) to cease making advances under this Note or any other agreement between
Borrower and Lender;
(d) to take possession of any collateral in any manner permitted by law;
(e) to require Borrower to deliver and make available to Lender any
collateral at a place reasonably convenient to Borrower and Lender,
(f) to sell, lease or otherwise dispose of any collateral and collect any
deficiency balance with or without resorting to legal process;
(g) to set-off Borrower's obligations against any amounts due to Borrower
including, but not limited to, monies, instruments, and deposit accounts
maintained with Lender; and
(h) to exercise all other rights available to Lender under any other
written agreement or applicable law.
Xxxxxx's rights are cumulative and may be exercised together, separately, and in
any order. Xxxxxx's remedies under this paragraph are in addition to those
available at common law, including, but not limited to, the right of set-off.
3. DEMAND FEATURE. [ ] If checked, this Note contains a demand feature. Xxxxxx's
right to demand payment, at any time, and from time to time shall be in Xxxxxx's
sole and absolute discretion, whether or not any default has occurred.
4. FINANCIAL INFORMATION. Borrower will at all times keep proper books of record
and account in which full, true and correct entries shall be made in accordance
with generally accepted accounting principles and will deliver to Lender, within
ninety (90) days after the end of each fiscal year of Borrower, a copy of the
annual financial statements of Borrower relating to such fiscal year, such
statements to include (i) the balance sheet of Borrower as at the end of such
fiscal year and (ii) the related income statement, statement of retained
earnings and statement of cash flow of Borrower for such fiscal year, prepared
by such certified public accountants as may be reasonably satisfactory to
Lender. Xxxxxxxx also agrees to deliver to Lender within fifteen (15) days after
filing same, a copy of Xxxxxxxx's income tax returns and also, from time to
time, such other financial information with respect to Borrower as Xxxxxx may
request.
5. MODIFICATION AND WAIVER. The modification or waiver of any of Borrower's
obligations or Xxxxxx's rights under this Note must be contained in a writing
signed by Xxxxxx. Lender may perform any of Borrower's obligations or delay or
fail to exercise any of its rights without causing a waiver of those obligations
or rights. A waiver on one occasion will not constitute a waiver on any other
occasion. Borrower's obligations under this Note shall not be affected if Lender
amends, compromises, exchanges, fails to exercise, impairs or releases any of
the obligations belonging to any co-borrower or guarantor or any of its rights
against any co-borrower, guarantor, the collateral or any other property
securing the obligations.
6. SEVERABILITY. If any provision of this Note is invalid, illegal or
unenforceable, the validity, legality, and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
7. ASSIGNMENT. Xxxxxxxx agrees not to assign any of Xxxxxxxx's rights, remedies
or obligations described in this Note without the prior written consent of
Lender, which consent may be withheld by Xxxxxx in its sole discretion. Xxxxxxxx
agrees that Xxxxxx is entitled to assign some or all of its rights and remedies
described in this Note without notice to or the prior consent of Borrower.
8. NOTICE. Any notice or other communication to be provided to Borrower or
Lender under this Note shall be in writing and sent to the parties at the
addresses described in this Note or such other address as the parties may
designate in writing from time to time.
9. APPLICABLE LAW. This Note shall be governed by the laws of the state
indicated in Xxxxxx's address. Unless applicable law provides otherwise,
Borrower consents to the jurisdiction and venue of any court located in such
state selected by Lender, in its discretion, in the event of any legal
proceeding under this Note.
10. COLLECTION COSTS. To the extent permitted by law, Xxxxxxxx agrees to pay
Xxxxxx's reasonable fees and costs, including, but not limited to, fees and
costs of attorneys and other agents (including without limitation paralegals,
clerks and consultants), whether or not such attorney or agent is an employee of
Lender, which are incurred by Lender in collecting any amount due or enforcing
any right or remedy under this Note, whether or not suit is brought, including,
but not limited to, all fees and costs incurred on appeal, in bankruptcy, and
for post-judgment collection actions.
11. MISCELLANEOUS. This Note is being executed primarily for commercial,
agricultural, or business purposes. Xxxxxxxx and Xxxxxx agree that time is of
the essence. Xxxxxxxx agrees to make all payments to Lender at any address
designated by Lender and in lawful United States currency. Borrower and any
person who endorses this Note waive presentment, demand for payment, notice of
dishonor and protest and further waive any right to require Lender to proceed
against anyone else before proceeding against Borrower or said person. All
references to Borrower in this Note shall include all of the parties signing
this Note, and this Note shall be binding upon the heirs, successors and assigns
of Xxxxxxxx and Xxxxxx. If there is more than one Borrower their obligations
under this Note shall be joint and several. Information concerning this Note may
be reported to credit reporting agencies and will be made available when
requested by proper legal process. This Note represents the complete and
integrated understanding between Borrower and Lender regarding the terms hereof.
12. JURY TRIAL WAIVER. XXXXXX AND BORROWER HEREBY WAIVE ANY RIGHT TO A TRIAL BY
JURY IN ANY CIVIL ACTION ARISING OUT OF, OR BASED UPON, THIS NOTE OR THE
COLLATERAL SECURING THIS NOTE.
13. ADDITIONAL TERMS:
SEE ADDENDUM TO PROMISSORY NOTE.
