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EXHIBIT 4.4
LOAN AGREEMENT
This Loan Agreement (this "Agreement"), dated as of the 3rd
day of August, 2000, by and between PDG ENVIRONMENTAL, INC., a Delaware
corporation ("Parent"), PROJECT DEVELOPMENT GROUP, INC., a Pennsylvania
corporation ("Project"), ENVIRO-TECH ABATEMENT SERVICES, CO., a North Carolina
corporation ("Enviro-Tech"), and PDG, INC., a Pennsylvania corporation ("PDG"),
(collectively, "Borrowers"), and SKY BANK, an Ohio banking institution, having
an office at 000 Xxxx Xxxxxxxxxx Xxxxxx, Xxx Xxxxxx, Xxxxxxxxxxxx 00000
("Bank").
W I T N E S S E T H:
WHEREAS, Borrowers have requested Bank (i) to extend credit to
Borrowers in an amount not to exceed Four Hundred Thousand and 00/100 Dollars
($400,000.00), the proceeds of which will be used as working capital and to
refinance certain debt ("Facility A"), (ii) to extend credit to Borrowers in an
amount not to exceed One Million and 00/100 Dollars ($1,000,000.00), the
proceeds of which will be used as working capital and to refinance certain other
debt ("Facility "B"), (iii) to extend credit to Borrowers in an amount not to
exceed Three Hundred Thousand and 00/100 Dollars ($300,000.00), the proceeds of
which will be used to finance a portion of certain capital asset purchases
("Facility "C") and (iv) to extend credit to Borrowers in an amount not to
exceed Three Million and 00/100 Dollars ($3,000,000.00), the proceeds of which
will be used to refinance an existing line of credit ("Facility "D"); and
WHEREAS, Bank is willing to extend such credit to Borrowers
pursuant to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants contained in this Agreement, the receipt and sufficiency of
which are hereby acknowledged, and intending to be legally bound hereby, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.01 Certain Definitions. In addition to other words and terms
defined elsewhere in this Agreement, the following words and terms have the
following meanings, respectively, unless the context otherwise clearly requires:
"Affiliate" shall mean, as of the date hereof or any time
during the term of this Agreement, any Person which directly or indirectly
controls, is controlled by, or is under common control with, any of the
Borrowers. The term "control" shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
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"Agreement" shall mean this Loan Agreement as amended,
modified or supplemented from time to time.
"Bank" shall mean Sky Bank, an Ohio banking institution, with
an office located at 000 Xxxx Xxxxxxxxxx Xxxxxx, Xxx Xxxxxx, Xxxxxxxxxxxx 00000.
"Borrowers" shall mean collectively, Parent, Project,
Enviro-Tech and PDG, each corporation with its principal place of business
located at 000 Xxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxxxxx 00000.
"Borrowing Base" shall have the meaning assigned to that term
in Section 2.04(c) of this Agreement.
"Change of Control" shall mean any Person or group of Persons
(as used in Sections 13 and 14 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the rules and regulations thereunder) shall
have become the beneficial owner (as defined in Rules 13d-3 and 13d-5
promulgated by the Securities and Exchange Commission (the "SEC") under the
Exchange Act) of 50% or more of the combined voting power of all the outstanding
voting securities of Parent.
" Change of Management" shall mean that Xxxx X. Xxxxx shall be
terminated from employment with Borrowers (voluntarily or involuntarily), or for
any reason shall cease to serve as Chairman of the Board of Directors and Chief
Executive Officer of each of the Borrowers, having duties and responsibilities
substantially similar to those held by him on the date hereof.
"Closing" shall mean the closing of the transactions provided
for in this Agreement on the Closing Date.
"Closing Date" shall mean August 3, 2000, or such other date
upon which the parties may agree.
"Code" shall mean the Internal Revenue Code of 1986 as amended
along with the rules, regulations, decisions and other official interpretations
in connection therewith.
"Compensating Balances" shall mean, for the period of
determination, that percentage determined by dividing (i) the average balance
maintained by Borrowers in deposit accounts with Bank that are not subject to
any liens or rights of third parties, over such period, divided by (ii) the
average balance of the outstanding principal amount all of the Loans.
"Debt" shall mean collectively (A) all Indebtedness, whether
of principal, interest, fees, expenses or otherwise, of the Borrowers or any of
them to Bank, whether now existing or hereafter incurred including, but not
limited to, future loans and advances, if any, under this Agreement, the Notes
and the other Loan Documents, as the same may from time to time be amended,
together with any and all extensions, renewals, refinancings or refundings
thereof in whole or in part; (B) all other obligations for repayment of borrowed
money, whether of principal, interest, fees, expenses or otherwise, of the
Borrowers or any of them to Bank, now existing or hereafter incurred, whether
under letters or advices of credit, lines of credit, other financing
arrangements or otherwise (including, but not limited to, any obligations
arising as a result of any overdrafts), whether or not related to this Agreement
or to the Notes, whether or not contemplated by Bank or any of the Borrowers at
the date hereof and whether direct, indirect, matured or contingent, joint or
several, or otherwise, together with any and all extensions, renewals,
refinancings or refundings thereof in whole or in part; (C) all costs and
expenses including, without limitation, to the extent permitted by law,
reasonable attorneys' fees and legal expenses, incurred by Bank in the
collection of any of the indebtedness referred to in clauses (A)
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or (B) above in amounts due and owing to Bank under this Agreement; and (D) any
advances made by Bank for the maintenance, preservation, protection or
enforcement of, or realization upon, any property or assets now or hereafter
made subject to a mortgage, pledge, lien or security interest granted pursuant
hereto or pursuant to this Agreement or the other Loan Documents or pursuant to
any agreement, instrument or note relating to any of the Debt, including,
without limitation, advances for taxes, insurance, repairs and the like.
"Debt Service Coverage Ratio" shall mean, for the period of
determination, with respect to the Borrowers, (i) net income plus interest
expense, depreciation and amortization (excluding non-recurring or extraordinary
items) for such period, divided by (ii) the sum of Interest Expense, all
scheduled principal payments with respect to Indebtedness and all payments under
or with respect to leases (whether direct or contingent) for such period, all as
determined on a consolidated basis in accordance with GAAP.
"Debt to Worth Ratio" shall mean, as of the date of
determination, with respect to the Borrowers, the ratio of (i) Total Liabilities
at such date to (ii) Tangible Net Worth at such date.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as in effect as of the date of this Agreement and as amended from time
to time in the future.
"ERISA Affiliate" shall mean a Person which is under common
control with any Borrower within the meaning of Section 414(b) of the Code
including, but not limited to, a Subsidiary of any Borrower.
"Event of Default" shall mean any of the Events of Default
described in Section 7.01 of this Agreement.
"Facility A Expiry Date" shall mean August 1, 2015.
"Facility B Expiry Date" shall mean August 1, 2005.
"Facility C Expiry Date" shall mean August 1, 2005.
"Facility D Expiry Date" shall mean August 1, 2003.
"Facility A Loan" shall mean as set forth in Section 2.01(a)
of this Agreement.
"Facility B Loan" shall mean as set forth in Section 2.02(a)
of this Agreement.
"Facility C Loan" shall mean as set forth in Section 2.03(a)
of this Agreement.
"Facility D Loan" shall mean as set forth in Section 2.04(a)
of this Agreement.
"Facility A Note" shall mean as set forth in Section 2.01(b)
of this Agreement.
"Facility B Note" shall mean as set forth in Section 2.02(b)
of this Agreement.
"Facility C Note" shall mean as set forth in Section 2.03(b)
of this Agreement.
"Facility D Note" shall mean as set forth in Section 2.04(b)
of this Agreement.
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"Facility A Rate" shall mean an annual rate of interest equal
to (i) during the period from and including the Closing Date through July 31,
2003, 9.15% and (ii) thereafter, during each three year period commencing on a
Facility A Rate Change Date, 2.75% above the then current weekly average yield
(rounded to one-eighth of one percent (1/8th %)) on three (3) year U.S. Treasury
securities "Constant Maturities" as published 45 days prior to such Facility A
Rate Change Date by the Federal Reserve in its weekly statistical release (the
"Index"). If the Index becomes unavailable during the term of the Facility A
Loan, Bank may designate a substitute Index after notice to Borrower.
"Facility A Rate Change Dates" shall mean August 1, 2003,
August 1, 2006, August 1, 2009, and August 1, 2012.
"GAAP" means generally accepted accounting principles (as such
principles may change from time to time) applied on a consistent basis (except
for changes in application in which Parent's independent certified public
accountants concur).
"Guarantor" shall mean Xxxx X. Xxxxx.
"Guaranty" shall mean that certain Guaranty and Suretyship
Agreement, dated the date hereof, made by Guarantor in favor of Bank.
"Inactive Subsidiary" shall mean a Subsidiary of a Borrower
that exists on the date hereof and is totally inactive, carrying on no business
or operations, having no assets, obligations or liabilities and having no
revenues, expenses, income, losses or taxes.
"Indebtedness" shall mean (i) all obligations for borrowed
money (including, without limitation, all notes payable and drafts accepted
representing extensions of credit, all obligations evidenced by bonds,
debentures, notes or similar instruments, all obligations on which interest
charges are customarily paid, all obligations under conditional sale or other
title retention agreements and all obligations issued or assumed as full or
partial payment for property whether or not any such notes, drafts or
obligations are obligations for borrowed money), (ii) all obligations secured by
any mortgage, lien, pledge, charge or security interest or encumbrance existing
on property owned or acquired subject thereto, whether or not the obligations
secured thereby shall have been assumed, (iii) all obligations to repay amounts
drawn down by beneficiaries of letters of credit, (iv) all indebtedness and
other obligations for the payment or purchase of which any Borrower has agreed
contingently or otherwise to advance or supply funds and (v) indebtedness
represented by obligations under a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP and the amount of such
indebtedness shall be the capitalized amount of such obligations as determined
in accordance with such principles.
"Indemnity Agreement" shall mean that certain Hazardous
Materials Certificate and Indemnity Agreement, dated the date hereof, made by
Borrowers in favor of Bank.
"Interest Expense" shall mean, for the period of the
determination, with respect to the Borrowers, all interest accrued on
Indebtedness during such period, including without limitation all interest
required under GAAP to be capitalized during such period, as determined on a
consolidated basis in accordance with GAAP.
"Law" shall mean any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, order, injunction, writ, decree or
award of any Official Body.
"Lien" shall mean any mortgage, deed of trust, pledge, lien,
security interest, charge or other encumbrance or security arrangement of any
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nature including, but not limited to, any conditional sale or title retention
arrangement, and any assignment, deposit arrangement or lease intended as, or
having the effect of, security.
"Loan" or "Loans" shall mean Facility A, Facility B, Facility
C, Facility D and any other credit to Borrower extended by Bank in accordance
with Article II hereof as evidenced by the Notes, as the case may be.
"Loan Document" or "Loan Documents" mean, singularly or
collectively as the context may require, this Agreement, the Notes, the Security
Agreements, the Mortgage, the Indemnity Agreement, the Guaranty, the Lock Box
Agreement dated as of the date hereof between Borrowers and Bank, and any and
all other documents, instruments, certificates and agreements executed and
delivered in connection with this Agreement, as any of them may be amended,
modified, extended or supplemented from time to time.
"Loan Year" shall mean the one year period commencing on the
Closing Date and ending on July 31, 2001 and each one year period thereafter
ending July 31 of each following year.
"Mortgage" shall mean that certain Open-End Mortgage and
Security Agreement, dated the date hereof, made by Project in favor of Bank.
"Net Income" means, for the period of determination, net
income (after taxes) as determined in accordance with GAAP (excluding any
extraordinary items).
"Notes" shall collectively mean the (i) the Facility A Note,
(ii) the Facility B Note, (iii) the Facility C Notes and (iv) the Facility D
Note, and any other note of Borrowers executed and delivered pursuant to this
Agreement, together with all extensions, renewals, refinancings or refundings in
whole or in part.
"Office", when used in connection with Bank, means its
designated office located at 000 Xxxx Xxxxxxxxxx Xxxxxx, Xxx Xxxxxx,
Xxxxxxxxxxxx 00000, or such other office of Bank as Bank may designate in
writing from time to time.
"Official Body" means any government or political subdivision
or any agency, authority, bureau, central bank, commission, department or
instrumentality of either, or any court, tribunal, grand jury or arbitrator, in
each case whether foreign or domestic.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Title IV of ERISA.
"Person" shall mean an individual, corporation, partnership,
limited liability company, joint venture, trust, or unincorporated organization
or government or agency or political subdivision thereof.
"Plan" means any deferred compensation program, including both
single and multi-employer plans, subject to Title IV of ERISA and established
and maintained for employees of any Borrower or any Subsidiary or any controlled
group of trades or businesses under common control as defined respectively in
Sections 1563 and 414(c) of the Code, of which any Borrower or any Subsidiary is
or becomes a part.
"Potential Default" shall mean any event or condition which
with notice, passage of time or determination by Bank, or any combination of the
foregoing, would constitute an Event of Default.
"Prime Rate" shall mean that rate of interest per annum
announced by Bank from time to time as its Prime Rate which may not represent
the lowest rate charged by Bank to other borrowers at any time or from time to
time.
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"Prime Rate Loan" shall mean any Loan or portion of any Loan
that bears interest with reference to the Prime Rate.
"Prohibited Transaction" shall mean any transaction which is
prohibited under Section 4975 of the Code or Section 406 of ERISA and not exempt
under Section 4975 of the Code or Section 408 of ERISA.
"Qualified Accounts" means an account receivable (net of any
prepayments, progress payments, deposits and retentions) owing to a Borrower
which, as determined by Bank in its sole discretion exercised in good faith, met
the specifications established from time to time by Bank, in its reasonable
discretion, at the time it came into existence and continues to meet such
specifications until it is collected in full . As of the date of this Agreement,
an account receivable, to be a Qualified Account, must meet the following
specifications at the time it comes into existence and continue to meet such
specifications until it is collected in full:
(a) The account is not more than ninety (90) days
from the due date thereof or one hundred twenty (120) days from the date of the
invoice therefor;
(b) The account arose from the performance of
services or an outright sale of goods by such Borrower in the ordinary course of
such Borrower's business and such goods have been shipped, or services provided,
to the account debtor and such Borrower has possession of, or has delivered to
Bank, in the case of goods, shipping and delivery receipts evidencing such
shipment;
(c) The account is not subject to any prior
assignment, claim, lien, or security interest, and such Borrower will not make
any further assignment of the account or create any further security interest in
the account (other than unperfected security interests granted to sureties
issuing surety bonds for Borrowers in the ordinary course of business of
Borrowers, provided such security interests are and at all times remain subject
and subordinate to Bank's security interests in such accounts), nor permit its
rights in the account to be reached by attachment, levy, garnishment or other
judicial process;
(d) The account is not subject to set-off, credit,
allowance or adjustment by the account debtor, and the account debtor has not
complained as to its liability on the account and has not (i) returned, or
retained the right to return, any of the goods from the sale of which the
account arose or (ii) complained as to or disputed, any of the services from
which the account arose;
(e) The account does not arise from a sale of goods
to an account debtor domiciled outside of the United States of America, Canada,
or Puerto Rico, unless such Borrower has arranged letter of credit facilities or
foreign credit insurance satisfactory to Bank;
(f) The account arose in the ordinary course of such
Borrower's business and did not arise from the performance of services or a sale
of goods to a supplier, an employee, a stockholder or an Affiliate of any
Borrower;
(g) The account does not arise with respect to an
account debtor from whom more than 15% of whose accounts are more than ninety
(90) days from the due date thereof or one hundred twenty (120) days from the
date of the invoice therefor;
(h) The account does not arise out of contracts with
the United States, any state or any department, agency, or instrumentality
thereof, unless such Borrower has executed all instruments and taken all steps
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required by Bank including, but not limited to, steps to ensure that all monies
due and to become due under such contracts shall be assigned to Bank and notice
thereof given to the government under the Federal Assignment of Claims Act, and
an agreement by such account debtor to make payment directly to Bank;
(i) The account does not constitute a finance charge
or lease receivable;
(j) No notice of bankruptcy, insolvency or material
adverse change of the account debtor has been received by or is known to
Borrower;
(k) Bank has not notified Borrowers that Bank has
determined, in its reasonable discretion, that the account or account debtor is
unsatisfactory;
(l) The account is not such that such Borrower is or
may become liable to the account debtor for any reason; and
(m) The account is not an account with respect to
which the account debtor is located in New Jersey, Minnesota, or any other state
denying creditors access to its courts in the absence of a Notice of Business
Activities Report or other similar filing unless such Borrower has either
qualified as a foreign corporation authorized to transact business in such state
or has filed a Notice of Business Activities Report or similar filing with the
applicable state agency for the current year.
"Qualified Inventory" shall mean Inventory (as such term is
defined in the UCC) which is owned by a Borrower and held for sale in the
ordinary course of such Borrower's business which, as determined by Bank in its
sole discretion exercised in good faith, meet the specifications established by
Bank in its reasonable discretion from time to time including, but not limited
to:
(a) Bank has a perfected first priority security
interest in such Inventory;
(b) such Inventory is not subject to a security
interest, lien or other encumbrance in favor of any other Person;
(c) such Inventory is of good and merchantable
quality free from defects;
(d) such Inventory is raw materials, work in process
or finished goods ready and able to be sold;
(e) the Inventory is not out of date, broken or
otherwise unsaleable;
(f) the Inventory is not finished goods held pursuant
to a consignment arrangement;
(g) the Inventory is not stored with a bailee or
warehouseman and does not include inventory-in-transit or inventory not
otherwise in such Borrower's possession at one of the locations set forth in the
Security Agreements;
(h) the Inventory was not produced in violation of
the Fair Labor Standards Act and subject to the "hot goods" provision contained
in Title 29 U.S.C., Section 215(a)(1);
(i) the Inventory is not allocated or identified to
purchase orders or contracts received from any customer of such Borrower, as
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to which such inventory such customer has filed or intends to file UCC-1
financing statements or to otherwise perfect a security interest; and
(j) Bank has not notified Borrowers that the
Inventory is unsatisfactory in its reasonable and good faith judgment.
"Reportable Event" shall mean any of the events set forth in
Section 4043(b) of ERISA or the regulations thereunder, except any such event as
to which the provision for thirty (30) days notice to the PBGC is waived under
applicable regulations.
"Security Agreements" means the four Security Agreements, each
dated as of the date of this Agreement, by and between a Borrower and Bank, as
amended, modified or supplemented from time to time.
"Subsidiary" of a Person at any time means any corporation of
which a majority of the outstanding capital stock entitled to vote for the
election of directors is at such time owned by such Person and/or one or more of
its Subsidiaries.
"Tangible Net Worth" shall mean, as of the date of
determination, the excess of total assets over total liabilities of the
Borrowers at such date, as determined on a consolidated basis in accordance with
GAAP, except that there shall be excluded from total assets all intangible
assets as determined on a consolidated basis in accordance with GAAP
"Termination Event" shall mean (i) a "Reportable Event, (ii)
the termination of a single employer Plan or the treatment of a single employer
Plan amendment as the termination of such Plan under Section 4041 of ERISA, or
the filing of a notice of intent to terminate a single employer Plan, or (iii)
the institution of proceedings to terminate a single employer Plan by the PBGC
under Section 4042 of ERISA, or (iv) the appointment of a trustee to administer
any single employer Plan.
"Total Liabilities" shall mean, as of the date of
determination, with respect to the Borrowers, all items (including taxes accrued
as estimated) included as liabilities on a balance sheet, as determined on a
consolidated basis in accordance with GAAP.
"UCC" shall mean the Uniform Commercial Code as in effect on
the date of this Agreement and as amended from time to time, of the state or
states having jurisdiction with respect to all or any portion of the collateral
granted or assigned to Bank from time to time under or in connection with this
Agreement.
ARTICLE II
THE CREDIT FACILITIES
2.01 Facility A.
(a) Facility A Loan. Subject to the terms and
conditions and relying upon the representations and warranties set forth in this
Agreement and the other Loan Documents, Bank agrees to make a term loan
("Facility A Loan") to Borrowers on the Closing Date in the principal amount of
Four Hundred Thousand and 00/100 Dollars ($400,000.00).
(b) Facility A Note. The obligations of Borrowers to
repay the unpaid principal amount of the Facility A Loan and to pay interest on
the unpaid principal amount thereof shall be joint and several and shall be
evidenced in part by the Facility A Note dated the Closing Date, in
substantially the form attached as Exhibit "A" to this Agreement, with the
blanks appropriately filled. The executed Facility A Note will be delivered by
Borrowers to Bank on the Closing Date.
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(c) Payments of Principal and Interest; Maturity. Commencing
on September 1, 2000, and continuing on the first day of each calendar month
thereafter, through and including August 1, 2015, Borrowers shall make a payment
on the Facility A Loan in the amount of Four Thousand Ninety Five and 00/100
Dollars ($4,095.00), such payment to be applied first to accrued interest and
the balance to the reduction of principal. Upon each Facility A Rate Change
Date, effective with the first payment thereafter, the amount of the monthly
installment of principal and interest shall be adjusted by Bank to that amount
which would fully amortize the then principal balance of the Facility A Loan at
the new interest rate over the remaining term of the Facility A Loan ending on
the Facility A Expiry Date. All remaining unpaid principal, accrued interest and
all other sums and costs incurred by Bank, pursuant to this Agreement, the
Facility A Note or the making of the Facility A Loan, shall be immediately due
and payable on the Facility A Expiry Date without notice, presentment or demand.
2.02 Facility B.
(a) Facility B Loan. Subject to the terms and conditions of,
and relying upon the representations and warranties set forth in, this Agreement
and the Loan Documents, Bank agrees to make a term loan ("Facility B Loan") to
Borrowers on the Closing Date in the principal amount of One Million and 00/100
Dollars ($1,000,000.00).
(b) Facility B Note. The obligations of Borrowers to repay the
unpaid principal amount of the Facility B Loan and to pay interest on the unpaid
principal amount thereof shall be joint and several and shall be evidenced in
part by the Facility B Note of Borrowers, dated the Closing Date, in
substantially the form attached as Exhibit "B" to this Agreement, with the
blanks appropriately filled. The executed Facility B Note shall be delivered by
Borrowers to Bank on the Closing Date.
(c) Payments of Principal and Interest; Maturity. Commencing
on September 1, 2000, and continuing on the first day of each calendar month
thereafter, through and including August 1, 2005, Borrowers shall make a payment
on the Facility B Loan in the amount of Twenty-One Thousand Four Hundred
Ninety-Five and 00/100 Dollars ($21,495.00), such payment to be applied first to
accrued interest and the balance to the reduction of principal. Upon each change
in the interest rate applicable to the Facility B Loan, effective with the first
payment thereafter, the amount of the monthly installment of principal and
interest shall be adjusted by Bank to that amount which would fully amortize the
then principal balance of the Facility B Loan at the new interest rate over the
remaining term of the Facility B Loan ending on the Facility B Expiry Date. All
remaining unpaid principal, accrued interest and all other sums and costs
incurred by Bank, pursuant to this Agreement, the Facility B Note or the making
of the Facility B Loan, shall be immediately due and payable on the Facility B
Expiry Date without notice, presentment or demand.
2.03 Facility C.
(a) Facility C Loans. Subject to the terms and conditions of,
and relying upon the representations and warranties set forth in, this Agreement
and the Loan Documents, Bank agrees to make term loans ("Facility C Loans") to
any of the Borrowers at any time or from time to time on or after the Closing
Date and to and including the day immediately preceding the Facility C Expiry
Date, in an aggregate principal amount not to exceed Three Hundred Thousand and
00/100 Dollars ($300,000.00). Each Borrower may borrow under this Section 2.03.
The proceeds of each Facility C Loan shall be used by such Borrower only to make
the capital expenditure actually incurred by such Borrower in connection with a
capital asset purchase of personal property (not real property). The amount of
each Facility C Loan shall be limited to 90% of such capital expenditure
incurred and such Borrower shall concurrently pay the other 10% from its own
funds.
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(b) Facility C Note. The obligations of Borrowers to repay the
unpaid principal amount of each Facility C Loan made to any Borrower by Bank and
to pay interest on the unpaid principal amount thereof shall be joint and
several and shall be evidenced in part by a Facility C Note of Borrowers, dated
the Closing Date, in substantially the form attached as Exhibit "C" to this
Agreement, with the blanks appropriately filled. Each executed Facility C Note
shall be delivered by Borrowers to Bank on the date the related Facility C Loan
is made by Bank.
(d) Making of Facility C Loans. Subject to the terms and
conditions of this Agreement and the other Loan Documents, no Facility C Loans
shall be made until Borrowers have satisfied all applicable conditions specified
in Article IV hereof and have furnished to Bank evidence satisfactory to Bank of
compliance with the requirements of Section 2.03(a) hereof. Each Facility C Loan
that is made shall be made on such Business Day and in such amount as the
Borrower to whom such Loan is to be made shall request by written notice
(together with the aforesaid evidence) received by Bank no later than 2:00 p.m.
(New Castle, Pennsylvania time) on the date which is five (5) Business Days
before the date of requested disbursement for such Loan (the "Loan Disbursement
Date"). Bank shall make the proceeds of such Loan available to such Borrower at
Bank's Office in immediately available funds not later than 3:00 p.m., New
Castle, Pennsylvania, time on the Loan Disbursement Date.
(c) Payments of Principal and Maturity. On the first day of
the first calendar month after the date a Facility C Loan is made, Borrowers
shall pay to Bank the amount of interest accruing on such Loan to such day. On
the first day of each calendar month thereafter, through and including August 1,
2005, Borrowers shall make a payment of principal and interest on such Loan in
that amount, as determined by Bank at the time such Loan is made, which would
fully amortize the then principal balance of such Loan in equal monthly
installments, at the interest rate applicable to such Loan at the time of
determination, over the term of such Loan ending on the Facility C Expiry Date.
Each such payment shall be applied first to accrued interest and the balance to
the reduction of principal. Upon each change in the interest rate applicable to
the Facility C Loans, effective with the first payment thereafter, the amount of
the monthly installment of principal and interest for each Facility C Loan shall
be adjusted by Bank to that amount which would fully amortize the then principal
balance of such Loan at the new interest rate over the remaining term of such
Loan ending on the Facility C Expiry Date. All remaining unpaid principal,
accrued interest and all other sums and costs incurred by Bank, pursuant to this
Agreement, the Facility C Notes or the making of the Facility C Loans, shall be
immediately due and payable on the Facility C Expiry Date without notice,
presentment or demand.
2.04 Facility D.
(a) Facility D Loan. Subject to the terms and
conditions and relying upon the representations and warranties set forth in this
Agreement and the other Loan Documents, Bank agrees to make loans ("Facility D
Loans") any of the Borrowers at any time or from time to time on or after the
Closing Date and to and including the day immediately preceding the Facility D
Expiry Date, in an aggregate principal amount not exceeding at any one time
outstanding the Borrowing Base. Each Borrower may borrow, repay and reborrow
under this Section 2.04. All remaining unpaid principal, accrued interest and
all other sums and costs incurred by Bank, pursuant to the Facility D Note or
the making of the Facility D Loans, shall be due and payable on the Facility D
Expiry Date without notice, presentment or demand.
(b) Facility D Note. The obligations of Borrowers to
repay the unpaid principal amount of the Facility D Loans made to any Borrower
11
by Bank and to pay interest on the unpaid principal amount thereof shall be
joint and several and shall be evidenced in part by the Facility D Note dated
the Closing Date, in substantially the form attached as Exhibit "D" to this
Agreement, with the blanks appropriately filled. The executed Facility D Note
will be delivered by Borrowers to Bank on the Closing Date.
(c) Borrowing Base. Subject to the terms and
conditions of this Agreement, the maximum borrowing availability under this
Agreement applicable to the Facility D Loans shall be equal to the lesser of (i)
Three Million and 00/100 Dollars ($3,000,000.00) or (ii) eighty percent (80%) of
the aggregate gross amount of Qualified Accounts plus fifty percent (50%) of the
aggregate value of Qualified Inventory (the lesser of the amounts described in
clauses (i) and (ii) of this sentence is sometimes referred to in this Agreement
as the "Borrowing Base").
(d) Making of Facility D Loans. (i) Subject to the
terms and conditions of this Agreement and the other Loan Documents, no Facility
D Loans shall be made until Borrowers have satisfied all applicable conditions
specified in Article IV hereof, and Bank has received, reviewed and approved a
completed borrowing base certificate, in the form attached as Exhibit "E" to
this Agreement (the "Borrowing Base Certificate"), setting forth the Borrowing
Base calculations for Borrowers, together with the appropriate backup
documentation and evidence.
(ii) Each Facility D Loan that is made shall be made
on such Business Day and in such amount as the Borrower to whom such Loan is to
be made shall request by written notice received by Bank no later than 2:00 p.m.
(New Castle, Pennsylvania time) on the date of requested disbursement for such
Loan (the "Loan Disbursement Date"). Subject to Bank's review, approval and
processing of the Borrowing Base Certificate and any other information requested
by Bank, Bank shall make the proceeds of such Loan available to such Borrower at
Bank's Office in immediately available funds not later than 3:00 p.m., New
Castle, Pennsylvania, time on the Loan Disbursement Date.
(e) Maximum Principal Balance of Revolving Credit
Loans. The aggregate principal amount of all Facility D Loans shall not exceed
the Borrowing Base. Borrowers agree that if at any time the aggregate principal
amount of all Facility D Loans outstanding exceeds the Borrowing Base, Borrowers
shall promptly pay to Bank such amount as may be necessary to eliminate such
excess together with all accrued interest on the amount of such excess. If not
sooner paid, all of the Facility D Loans, all unpaid accrued interest thereon
and all other sums and costs incurred by Bank pursuant to this Agreement with
respect to the Facility D Loans, shall be immediately due and payable on the
Facility D Expiry Date, without notice, presentment or demand.
2.05 Interest Rates.
(a) Interest on Facility A. Subject to the terms and
conditions of this Agreement, the aggregate outstanding principal balance of the
Facility A Loan shall bear interest at a rate per annum equal to the Facility A
Rate.
(b) Interest on Facilities B, C and D. Subject to the terms
and conditions of this Agreement, the aggregate outstanding principal balance of
the Facility B Loan, the Facility C Loans and the Facility D Loans shall bear
interest at a rate per annum equal to one percent (1%) above the Prime Rate.
(c) Adjustment to Prime Rate, Calculation of Interest. In the
event of any change in the Prime Rate, the rate of interest upon each Prime Rate
Loan shall be adjusted to immediately correspond with such change, except any
interest rate charged hereunder shall not exceed the highest rate permitted by
law. Interest on Loans, unpaid fees and other sums payable hereunder, shall be
computed on the basis of a year of three hundred sixty (360) days and paid for
the actual number of days elapsed.
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2.06 Interest After Default; Usury. Whenever the unpaid
principal amount of the Loans, accrued interest thereon, any fees, or any other
sums payable hereunder shall become due and payable and remain unpaid (whether
at maturity, upon the occurrence of an Event of Default, by acceleration, demand
or otherwise) the amount thereof shall thereafter until paid in full bear
interest at a rate per annum equal to the interest rate otherwise applicable to
such Loan, plus five percent (5.00%). In the event the rates of interest
provided for herein are finally determined by any Official Body to exceed the
maximum rate of interest permitted by applicable usury or similar laws, their or
its application will be suspended and there will be charged instead the maximum
rate of interest permitted by such laws.
2.07 Late Charge. Upon the occurrence of an Event of Default
with respect to the payment of any installment of interest or principal or
principal and interest on the Notes for more than ten (10) days after the said
installment becomes due, in addition to making a payment of the installment due
and any interest thereon at the applicable default interest rate, Borrowers
shall pay to Bank a late charge in an amount equal to five percent (5%) of any
such overdue installment.
2.08 Facility D Origination Fee. Borrowers shall pay to Lender
a commitment fee for Facility D of $5,000 per annum in advance payable on the
Closing Date and on each August 1 of each year thereafter to but excluding the
Facility D Expiry Date.
2.09 Additional Costs. If either (i) the introduction of, or
any change in, or in the interpretation of, any law or regulation or (ii) the
compliance with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law), affects or
would affect the amount of capital required or expected to be maintained by Bank
or any corporation controlling Bank and Bank determines that the amount of such
capital is increased by or based upon the existence of the Loans (or commitment
to make the Loans) and other extensions of credit (or commitments to extend
credit) of similar type, then, within 30 days following demand by Bank,
Borrowers shall pay to Bank from time to time as specified by Bank additional
amounts sufficient to compensate Bank in the light of such circumstances, to the
extent that Bank reasonably determines such increase in capital to be allocable
to the existence of the Loans (or commitment to make the Loans). A certificate
of Bank in good faith submitted to Borrowers as to such amounts shall be
conclusive and binding for all purposes, absent manifest error. Bank will not
retroactively assess Borrowers for such costs unless Bank is retroactively
charged or such guideline or request applicable to Bank is retroactive in its
application.
2.10 Payments. All payments to be made with respect to
principal, interest, fees or other amounts due from Borrowers under this
Agreement or under the Notes are payable at 12:00 noon (New Castle, Pennsylvania
Time), on the day when due, without presentment, demand, protest or notice of
any kind, all of which are hereby expressly waived, and an action for the
payments will accrue immediately. All such payments must be made to Bank at its
Office in U.S. Dollars and in funds immediately available at such Office,
without setoff, counterclaim or other deduction of any nature. Bank may in its
discretion deduct such payments from any Borrower's demand or deposit accounts
with Bank after an Event of Default. All such payments shall be applied at the
option of Bank to accrued and unpaid interest, outstanding principal and other
sums due under this Agreement in such order as Bank, in its sole discretion,
shall elect. All such payments shall be made absolutely net of, without
deduction or offset, and altogether free and clear of any and all present and
future taxes, levies, deductions, charges, and withholdings and all liabilities
with respect thereto, excluding income and franchise taxes imposed on Bank under
the laws of the United States or any state or political
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subdivision thereof. If any Borrower is compelled by law to deduct any such
taxes or levies (other than such excluded taxes) or to make any such other
deductions, charges, or withholdings, it will pay such additional amounts as may
be necessary in order that the net payments after such deduction, and after
giving effect to any United States federal or state income taxes required to be
paid by Bank in respect of such additional amounts, shall equal the amount of
such payment without such tax, deduction or withholding.
2.11 Loan Account. Bank will open and maintain on its books a
loan account (the "Loan Account") for Borrowers with respect to Loans made,
repayments, prepayments, the computation and payment of interest and fees and
the computation and final payment of all other amounts due and sums paid to Bank
under this Agreement. Except in the case of manifest error in computation, the
Loan Account for Borrowers will be conclusive and binding on Borrowers as to the
amount at any time due to Bank from Borrowers under this Agreement or the Notes.
2.12 Financing Statements. Promptly upon request by Bank,
Borrowers agree to execute or cause to be executed all financing statements
describing the property in which Bank has a security interest under the Security
Agreements. Borrowers irrevocably appoint Bank as their agent and attorney to
execute any such financing statements in Borrowers' name if Borrowers fail to
execute the same after a request from Bank to do so. Borrowers further agree
that a carbon, photographic or other reproduction of a financing statement or a
Security Agreement is sufficient as a financing statement and may be filed as
such.
2.13 Security. The Loans shall be secured by a first lien
perfected security interest in all personal property and fixtures of Borrowers,
as set forth in the Security Agreements, the first lien in real property set
forth in the Mortgage, and all UCC-1 financing statements executed and recorded
with respect thereto.
2.14 Interest Rate Incentive Pricing.
(a) If, for any fiscal year based on the annual financial
statements for such fiscal year furnished to Bank pursuant to Section 5.01
hereof, all of the following conditions are satisfied: (a) the Debt Service
Coverage Ratio for such fiscal year is at least 1.3 to 1, (b) the Debt to Equity
Ratio at January 31, the last day of such fiscal year, is not greater than 2 to
1, (c) Tangible Net Worth at January 31, the last day of such fiscal year, is at
least $4,500,000 and (d) Compensating Balances at January 31, the last day of
such fiscal year, are at least 10%, then, during the subsequent fiscal year (and
only the subsequent fiscal year unless the conditions are satisfied again),
interest on the Facility B Loan, the Facility C Loans and the Facility D Loans,
shall be reduced to an annual rate equal to one-half of one percent (1/2%) above
the Prime Rate.
(b) If, for any fiscal year based on the annual financial
statements for such fiscal year furnished to Bank pursuant to Section 5.01
hereof, all of the following conditions are satisfied: (a) the Debt Service
Coverage Ratio for such fiscal year is at least 1.5 to 1, (b) the Debt to Equity
Ratio at January 31, the last day of such fiscal year, is not greater than 1.5
to 1, (c) Tangible Net Worth at January 31, the last day of such fiscal year, is
at least $5,000,000 and (d) Compensating Balances at January 31, the last day of
such fiscal year, are at least 15%, then, during the subsequent fiscal year (and
only the subsequent fiscal year unless the conditions are satisfied again),
interest on the Facility B Loan, the Facility C Loans and the Facility D Loans,
shall be reduced to an annual rate equal to the Prime Rate.
2.15 Optional Prepayment. Borrowers may at any time, upon
giving Bank seven (7) days' prior written notice, prepay any or all of the Loans
in whole or in part without penalty or premium, except that, if the amount of
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such Loan to be prepaid is being refinanced by another financial institution,
Borrowers shall pay to Bank, on the date of prepayment, a prepayment premium as
follows: (a) for the Facility A Loan, (i) three percent (3%) of the principal
amount prepaid, if prepaid during the first Loan Year, (ii) two percent (2%) of
the principal amount prepaid, if prepaid during the second Loan Year, or (iii)
one percent (1%) of the principal amount prepaid, if prepaid during the third or
fourth Loan Years; (b) for the Facility B Loan, (i) two percent (2%) of the
principal amount prepaid, if prepaid during the first Loan Year, or (ii) one
percent (1%) of the principal amount prepaid, if prepaid during the second Loan
Year; and (c) for any Facility C Loan, (i) two percent (2%) of the principal
amount prepaid, if prepaid within prior to the first anniversary of the Loan
Disbursement Date for such Loan, or (ii) one percent (1%) of the principal
amount prepaid, if prepaid during the period from and including the first
anniversary of the Loan Disbursement Date to and including the day before the
second anniversary of the Loan Disbursement Date. With any prepayment, Borrowers
will also pay on the date of prepayment all accrued interest on the principal
amount prepaid.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each Borrower represents and warrants to Bank that:
3.01 Organization and Qualification. Each Borrower is a
corporation duly organized, validly existing and in good standing under the laws
of the state of its incorporation. Parent is duly qualified to do business as a
foreign corporation in and is in good standing in the Commonwealth of
Pennsylvania. Each Borrower is duly qualified or licensed to do business as a
foreign corporation and is in good standing in all jurisdictions in which the
ownership of its properties or the nature of its activities or both makes such
qualification or licensing necessary.
3.02 Power to Carry on Business; Licenses. Each Borrower has
all requisite power and authority to own and operate its properties and to carry
on its business as now conducted and as presently planned to be conducted. Each
Borrower has all licenses, permits, consents and governmental approvals or
authorizations necessary to carry on its business as now conducted or as
presently planned to be conducted.
3.03 Execution and Binding Effect. This Agreement, the Notes,
the Mortgage, the Security Agreements and the other Loan Documents to which
Borrowers or any of them is a party have been duly and validly executed and
delivered by such Borrower or Borrowers, and each such document or agreement
constitutes a legal, valid and binding obligation of such Borrower or Borrowers,
enforceable in accordance with its terms. The Guaranty has been duly and validly
executed and delivered by the Guarantor and constitutes a legal, valid and
binding obligation of the Guarantor, enforceable in accordance with its terms.
3.04 Absence of Conflicts. Neither the execution and delivery
of this Agreement, the Notes, the Mortgage, the Security Agreements or the other
Loan Documents, nor the consummation of the transactions contemplated in any of
them, nor the performance of or compliance with their terms and conditions will
(a) violate any Law, (b) conflict with or result in a breach of or a default
under the articles of incorporation or by-laws of any Borrower, (c) conflict
with or result in a breach or a default under any material agreement or
instrument to which any Borrower or the Guarantor is a party or by which any of
them or any of their properties (now owned or acquired in the future) may be
subject or bound or (d) result in the creation or imposition of any Lien upon
any property (owned or leased) of any Borrower or the Guarantor.
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3.05 Authorizations and Filings. No authorization, consent,
approval, license, exemption or other action by, and no registration,
qualification, designation, declaration or filing with, any Official Body is or
will be necessary or advisable in connection with the execution and delivery of
this Agreement, the Notes, the Security Agreements or the other Loan Documents,
the consummation of the transactions contemplated in any of them, or the
performance of or compliance with the terms and conditions of this Agreement,
the Notes, the Mortgage, the Security Agreements or the other Loan Documents.
3.06 Ownership and Control. Schedule 3.06 to this Agreement
states as of the Closing Date the authorized capitalization of each Borrower
(including capital stock of such Borrower held in treasury), the number of
shares of each class of capital stock issued and outstanding of such Borrower,
the number and percentage of outstanding shares of each such class of capital
stock. The outstanding shares have been duly authorized and validly issued and
are fully paid and nonassessable. Schedule 3.06 to this Agreement describes as
of the Closing Date all outstanding options, rights and warrants issued by each
Borrower for the acquisition of shares of the capital stock of such Borrower,
all outstanding securities or obligations convertible into such shares and all
agreements by such Borrower to issue or sell such shares. Schedule 3.06 to this
Agreement describes as of the Closing Date all options, sale agreements,
pledges, proxies, voting trusts, powers of attorney and other agreements or
instruments binding upon any of its shareholders with respect to beneficial or
record ownership of or voting rights with respect to shares of the capital stock
of each Borrower.
3.07 Officers and Directors of Borrower. Schedule 3.07 to this
Agreement states as of the Closing Date the officers and directors of each
Borrower.
3.08 Business. Schedule 3.08 to this Agreement describes the
business of each Borrower as presently conducted and presently planned to be
conducted.
3.09 Title to Property. Each Borrower has good and marketable
title in fee simple to all real property and good and marketable title to all
other property purported to be owned by it, including that reflected in the most
recent balance sheet referred to in Section 3.10 of this Agreement or submitted
pursuant to Section 5.01(a) of this Agreement (except as sold or otherwise
disposed of in the ordinary course of business), subject only to Liens not
forbidden by Section 6.01 of this Agreement.
3.10 Financial Statements.
(a) Borrowers have delivered to Bank a consolidated balance
sheet and related consolidated statements of income and retained earnings and
cash flow of Borrowers for the fiscal year ending January 31, 2000 as audited by
Xxxxxx, Xxxxx and Xxxxx, L.L.C. with only such qualifications as are set forth
in such audit. Such financial statements (including the notes) present fairly in
all material respect the financial condition of Borrowers as of the end of such
fiscal periods and results of their operations and the changes in financial
position for the fiscal periods then ended, all in conformity with GAAP applied
on a basis consistent with that of the preceding fiscal periods.
(b) Borrowers have delivered to Bank internally prepared
consolidated balance sheets and related consolidated statements of income, cash
flow and retained earnings of Borrowers as of, and for the portion of the fiscal
year and fiscal quarter ending, April 30, 2000, respectively. Such financial
statements provided by Borrowers present fairly in all material respect the
financial condition of Borrowers as of the end of such period and the results of
their operations for the period then ended, all in conformity with GAAP, subject
to year end adjustments applied on a basis consistent with that of the preceding
fiscal year's audited financial statements.
16
3.11 Taxes. All tax returns required to be filed by any
Borrower have been properly prepared, executed and filed. All taxes,
assessments, fees and other governmental charges upon any Borrower or upon any
of their respective properties, income, sales or franchises which are due and
payable have been paid. The reserves and provisions for taxes on the books of
each Borrower are adequate for all open years and for their current fiscal
period. No Borrower knows of any proposed additional assessment or basis for any
assessment for additional taxes (whether or not reserved against).
3.12 Contracts. Except as described in Schedule 3.12 to this
Agreement and except for purchase orders with suppliers or purchase orders with
customers, no Borrower is a party to or subject to any agreement, lease or
instrument of any kind other than agreements, leases or instruments which are
terminable at will upon not more than 90 days notice by such Borrower without
penalty or which are not material to the assets, business, operations or
financial condition of such Borrower in the aggregate. No Borrower shall modify
any of the terms and conditions of any material agreements to which it is a
party in a manner which will have a material adverse affect on such Borrower.
3.13 Litigation. Except as described in Schedule 3.13 to this
Agreement, there is no pending, or to the best knowledge of any Borrower,
contemplated or threatened, action, suit or proceeding by or before any Official
Body against or affecting any Borrower or the Guarantor, at law or equity,
which, if adversely decided, would have a material adverse effect on the assets,
business, operations or financial condition of any Borrower or the Guarantor or
on the ability of any Borrower or the Guarantor to perform its obligations under
the Loan Documents.
3.14 Compliance with Laws. No Borrower is in violation of or
subject to any material contingent liability on account of any Law.
3.15 Pension Plans. Except as described in Schedule 3.15 to
this Agreement, (a) each Plan has been and will be maintained and funded in
accordance with its terms and with all provisions of ERISA and other applicable
laws; (b) no Reportable Event as defined in ERISA has occurred and is continuing
with respect to any Plan; (c) no liability to the PBGC has been incurred with
respect to any Plan, other than for premiums due and payable; (d) no Plan has
been terminated, no proceedings have been instituted to terminate any Plan, and
there exists no intent to terminate or institute proceedings to terminate any
Plan; (e) no withdrawal, either complete or partial, has occurred or commenced
with respect to any multi-employer Plan, and there exists no intent to withdraw
either completely or partially from any multi-employer Plan; and (f) there has
been no cessation of, and there is no intent to cease, operations at a facility
or facilities where such cessation could reasonably be expected to result in a
separation from employment of more than 20% of the total number of employees who
are participants under a Plan.
3.16 Patents, Licenses, Franchises. Each Borrower owns or
possesses all of the patents, trademarks, service marks, trade names,
copyrights, licenses, franchises and permits and rights with respect to the
foregoing necessary to own and operate its properties and to carry on its
business as presently conducted and presently planned to be conducted without
conflict with the rights of others. Schedule 3.16 to this Agreement sets forth a
true and correct list and description of each such patent, trademark, service
xxxx, trade name, copyright, license, franchise and permit and right with
respect to the foregoing. Except as described in Schedule 3.16 to this
Agreement, no patent, trademark, service xxxx, trade name, copyright, license,
franchise or permit or right with respect to the foregoing is of material
importance to the assets, business, operations or financial condition of any
Borrower and there is no reason to anticipate any material liability to any
Borrower in respect to any claim of infringement of any of the foregoing.
17
3.17 Environmental Matters. (a) No Borrower is in violation of
The Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, The
Resource Conservation and Recovery Act of 1976, as amended by the Hazardous and
Solid Waste Amendments of 1984, The Clean Water Act, The Toxic Substances
Control Act and The Clean Air Act or any rule or regulation promulgated pursuant
to any of the foregoing statutes, or any other federal, state or local
environmental law, statute, rule, regulation or ordinance applicable to any
Borrower or their respective properties (all of the foregoing are sometimes
collectively referred to in this Section 3.17 as the "Environmental Laws");
(b) Neither any Borrower nor any of their respective
directors, officers, employees, agents or independent contractors have arranged,
by contract, agreement or otherwise, (i) for the disposal or treatment of, or
(ii) with a transporter for the transport, disposal or treatment of, any
Hazardous Substance (as defined by CERCLA, as amended), owned, used or possessed
by any Borrower, whether or not to a location identified by the EPA on the
National Priorities List, 40 C.F.R. Part 300, (or proposed by the EPA in the
Federal Register for listing on such National Priorities List) or identified
under any corresponding state statute or regulation concerning cleanup of waste
disposal sites (a "State Superfund Law"), at any location except Hazardous
Substances used in the ordinary course of such Borrower's business in compliance
with Laws;
(c) To the best knowledge of each Borrower after due
inquiry, no Predecessor (as defined by CERCLA, as amended) has arranged by
contract, agreement or otherwise, (i) for the disposal or treatment of, or (ii)
with a transporter for transport for the disposal or treatment of, any Hazardous
Substance (as defined by CERCLA, as amended), owned, used or possessed by any
Predecessor at any location except Hazardous Substances used in the ordinary
course of Predecessor's business in compliance with Laws;
(d) No Borrower is an "owner" or "operator" of a
"facility", as defined by CERCLA, as amended, or any State Superfund Law; and
(e) No Borrower "owned" or "operated" any "facility"
at the time any Hazardous Substances were disposed of within the meaning of
CERCLA, as amended, or any State Superfund Law.
3.18 Proceeds. Borrowers will use the proceeds of the Loans as
set forth in the Preamble of this Agreement.
3.19 Margin Stock. Borrowers will make no borrowing under this
Agreement for the purpose of buying or carrying any "margin stock", as such term
is used in Regulation U and related regulations of the Board of Governors of the
Federal Reserve System, as amended from time to time. No Borrower owns any
"margin stock". No Borrower is engaged in the business of extending credit to
others for such purpose, and no part of the proceeds of any borrowing under this
Agreement will be used to purchase or carry any "margin stock" or to extend
credit to others for the purpose of purchasing or carrying any "margin stock".
3.20 No Event of Default; Compliance with Agreements. No event
has occurred and is continuing and no condition exists which constitutes an
Event of Default or Potential Default. No Borrower is (i) in violation of any
term of any charter instrument or bylaw or (ii) in default under any material
agreement, lease or instrument to which such Borrower is a party or by which it
or any of its properties (owned or leased) may be subject or bound.
3.21 No Material Adverse Change. Since April 30, 2000, there
has been no material adverse change in the assets, business, operations,
management or financial condition of Borrowers or any of them or in the assets
or financial condition of the Guarantor.
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3.22 Subsidiaries. Project, Enviro-Tech and PDG are wholly
owned Subsidiaries of Parent. No Borrower has or will have any other
Subsidiaries, other than Inactive Subsidiaries.
3.23 Labor Controversies. There are no labor controversies
pending or, to the best knowledge of any Borrower, threatened against any
Borrower which, if adversely determined, would have a material adverse effect on
the assets, business, operations, management or financial condition of Borrowers
or any of them.
3.24 Solvency. After the making of the Loans, each Borrower
(a) will be able to pay its debts as they become due, (b) will have funds and
capital sufficient to carry on its business and all business in which it is
about to engage, and (c) will own property having a value at both the fair
valuation and at fair salable value in the ordinary course of such Borrower's
business greater than the amount required to pay such Borrower's debts as they
become due. No Borrower was insolvent immediately prior to the date of this
Agreement and no Borrower will be rendered insolvent by the execution and
delivery of this Agreement, the borrowings hereunder and/or the consummation of
any transactions contemplated by this Agreement, the Notes or the other Loan
Documents.
3.25 Accurate and Complete Disclosure. No representation or
warranty made by any Borrower under this Agreement, the Notes, the Security
Agreements, the Mortgage or the other Loan Documents and no statement made by
any Borrower in any financial statement (furnished pursuant to Sections 3.10 or
5.01 or otherwise), certificate, report, exhibit or document furnished by any
Borrower to Bank pursuant to or in connection with this Agreement is false or
misleading in any material respect (including by omission of material
information necessary to make such representation, warranty or statement not
misleading). No Borrower is aware of any facts which it has not disclosed to
Bank in writing which materially and adversely affects, and would materially and
adversely affect, the assets, business, operations or financial condition of
Borrowers or any of them or the ability of Borrowers or any of them to perform
their obligations under this Agreement, the Notes, the Security Agreements, the
Mortgage and the other Loan Documents.
3.26 Security Interest. The security interest in the
Collateral (as defined in the Security Agreements) granted to Bank pursuant to
the Security Agreements and the Mortgage, (i) constitutes and will continue to
constitute a perfected security interest under the UCC entitled to all of the
rights, benefits and priorities provided by the UCC and (ii) except as otherwise
permitted under Section 6.01 of this Agreement, is and will continue to be
superior and prior to the rights of all third parties existing on the date of
this Agreement or arising after the date of this Agreement whether by lien or
otherwise, to the full extent provided by Law. All such action as is necessary
or advisable to establish such rights of Bank has been taken or will be taken at
or prior to the time required for such purpose and there will be upon execution
and delivery of the Loan Documents no necessity of any further action in order
to preserve, protect and continue such rights except the filing of continuation
statements with respect to filed financing statements within six months prior to
each five year anniversary of the filing of such financing statements. All
filing fees and other expenses in connection with each such action shall be paid
by Borrowers and Bank shall be reimbursed by Borrowers for any such fees and
expenses incurred by Bank.
3.27 Account Warranties. With respect to all accounts from
time to time scheduled, listed or referred to in any certificate, statement or
report delivered to Bank by Borrowers or any of them pursuant to this Agreement
or the Loan Documents, each Borrower warrants and represents to Bank that as of
the date of such certificate, statement or report: (a) the accounts are genuine,
are in all respects what they purport to be, and are not evidenced by a note,
instrument or judgment; (b) the accounts represent
19
undisputed bona fide transactions completed in accordance with the terms and
provisions contained in the documents delivered to Bank with respect to the
accounts, if any; (c) there are no material setoffs, counterclaims or disputes
existing or asserted with respect to the accounts and no Borrower has made any
agreement with any account debtor for any deduction from any account; (d) there
are no facts, events or occurrences which in any way impair the validity or
enforcement of any account or tend to reduce the amount payable under any
account as shown on the respective certificates and statements, Borrower's books
and records and all invoices and statements delivered to Bank with respect to
any account; (e) to each Borrower's knowledge, all account debtors have the
capacity to contract and are solvent; (f) the services furnished and/or goods
sold giving rise to any account are not subject to any lien, claim, encumbrance
or security interest except that of Bank; (g) to each Borrower's knowledge,
there are no proceedings or actions which are threatened or pending against any
account debtor which might result in any material adverse change in such account
debtor's financial condition; (h) the account is not an account with respect to
which the account debtor is an Affiliate or a director, officer or employee of
any Borrower; (i) the account does not arise with respect to goods which have
not been shipped or arise with respect to services which have not been fully
performed and accepted as satisfactory by the account debtor; (j) the account is
not an account with respect to which the account debtor's obligation to pay the
account is conditional upon the account debtor's approval or is otherwise
subject to any repurchase obligation or return right, as with sales made on a
xxxx-and-hold, guaranteed sale, sale-and-return, or sale on approval basis; and
(k) the amounts shown on the applicable certificates, statements, Borrower's
books and records and all invoices and statements which may be delivered to Bank
with respect to such accounts are actually and absolutely owing to such Borrower
and are not in any way contingent. Borrowers shall promptly but in any event
within five (5) Business Days, notify Bank in the event that any such account
ceases to satisfy the above representations and warranties.
3.28 Inventory Warranties. With respect to all inventory from
time to time scheduled, listed or referred to in any certificate, statement or
report delivered to Bank, each Borrower warrants and represents that as of the
date of such certificate, statement or report: (a) such inventory is located on
the premises listed in a Security Agreement and is not in transit; (b) the
applicable Borrower has good, indefeasible and merchantable title to such
inventory and such inventory is not subject to any lien or security interest
whatsoever except for the security interest granted to Bank; (c) such inventory
is of good and merchantable quality, free from any defects or obsolescence; (d)
such inventory is not subject to any licensing, patent, royalty, trademark,
tradename or copyright agreement with any third party; and (e) the completion of
the manufacture and sale or other disposition of such inventory by Bank
following an Event of Default shall not require the consent of any Person and
shall not constitute a breach or default under any contract or agreement to
which any Borrower is a party or to which the inventory is subject. Borrowers
shall promptly, but in any event within five (5) Business Days, notify Bank that
such inventory ceases to satisfy the above representations and warranties.
ARTICLE IV
CONDITIONS OF LENDING
The obligation of Bank to make any Loan is subject to the
accuracy as of the Closing Date of the representations and warranties contained
in this Agreement and the other Loan Documents, to the performance by Borrowers
of their respective obligations to be performed under this Agreement and under
the other Loan Documents on or before the date of such Loan and to the
satisfaction of the following further conditions:
4.01 Representations and Warranties; Events of Default and
Potential Defaults. The representations and warranties contained in Article III
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shall be true and correct on and as of the date of each Loan with the same
effect as though made on and as of each such date. On the date of each Loan, no
Event of Default and no Potential Default shall have occurred and be continuing
or exist or shall occur or exist after giving effect to the Loan to be made on
such date. Each request by a Borrower for any Loan shall constitute a
representation and warranty by the Borrowers that the conditions set forth in
this Section 4.01 and all other conditions to such Loan have been satisfied.
4.02 Proceedings and Incumbency. On the Closing Date, each
Borrower shall have delivered to Bank a certificate, in form and substance
satisfactory to Bank, dated the Closing Date and signed on behalf of such
Borrower by the Secretary of such Borrower, certifying as to (a) true copies of
the articles of incorporation and bylaws of such Borrower and any shareholders
agreement concerning such Borrower, all as in effect on such date, (b) true
copies of all corporate action taken by such Borrower relative to this
Agreement, the Notes and the other Loan Documents including, but not limited to,
that described in Section 3.03 of this Agreement, (c) the names, true signatures
and incumbency of the officers of such Borrower authorized to execute and
deliver this Agreement, the Notes and the other Loan Documents, and (d) a list
of all fictitious or trade names of such Borrower. Bank may conclusively rely on
each such certificate unless and until a later certificate revising the prior
certificate has been furnished to Bank.
4.03 Agreement and Notes. On the Closing Date, this Agreement
and the Notes, satisfactory in terms, form and substance to Bank, shall have
been executed and delivered by Borrowers to Bank.
4.04 Security Documents. On the Closing Date, the Mortgage,
the Security Agreements, the Indemnity Agreement and the Guaranty shall have
been executed and delivered by Borrowers (or in the case of the Guaranty, the
Guarantor) to Bank, and shall be in effect and all filings contemplated thereto
shall have been made.
4.05 Other Loan Documents. On the Closing Date, all other Loan
Documents, satisfactory in terms, form and substance to Bank, shall have been
executed and delivered by Borrowers to Bank.
4.06 UCC Financing Statements. On or before the Closing Date,
all UCC-l financing statements to be filed pursuant to the Security Agreements
and the other Loan Documents shall have been duly filed and shall be in effect.
4.07 Opinion of Counsel. On the Closing Date, there shall have
been delivered to Bank a written opinion, dated the Closing Date, of Xxxxx &
Xxxxxxx, counsel to Borrowers, in form and substance satisfactory to Bank and
its counsel.
4.08 Other Documents and Conditions. On or before the Closing
Date, the following documents and conditions shall have been delivered to Bank
or satisfied by or on behalf of Borrowers:
(a) Good Standing and Tax Lien Certificates. As to
each Borrower, a good standing certificate of such Borrower certifying to the
good standing and corporate status of such Borrower, good standing/foreign
qualification certificates from other jurisdictions in which such Borrower is
qualified to do business and tax lien certificates of such Borrower from its
jurisdiction of incorporation and each jurisdiction in which such Borrower is
qualified to do business.
(b) Financial Statements. The financial statements
described in Section 3.10 of this Agreement.
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(c) Insurance. Evidence, in form and substance
satisfactory to Bank, that the business and all assets of such Borrower is
adequately insured and that Bank has been named as loss payee, entitled to
thirty (30) days notice of cancellation or modification, on all policies of
insurance covering the Collateral (as defined in the Security Agreements) and
the Mortgage.
(d) Lockbox Agreement. A fully executed Lockbox
Agreement.
(e) Lien Search. Copies of record searches (including
UCC searches, real property title reports, and judgment, suits, tax and other
lien searches) evidencing that Bank has a first priority security interest in
the Collateral except for those Liens permitted pursuant to Section 6.01 hereof.
(f) No Material Adverse Change. Evidence satisfactory
to Bank that no material adverse change has occurred with respect to of Borrower
since April 30, 2000.
(g) Termination Statements - Releases. Evidence
satisfactory to Bank that UCC termination or release statements with respect to
the Liens on the property of any Borrower not permitted under Section 6.01 of
this Agreement have been filed or satisfactory arrangements have been made for
such filing.
(h) Leases. Certified copies of all of the real
property leases of each Borrower in which such Borrower is a tenant.
(i) Other Documents and Conditions. Such other
documents and conditions as may be required to be submitted to Bank by the terms
of this Agreement or of any Loan Document or set forth on the Closing Checklist
with respect to the transaction contemplated by this Agreement.
4.09 Details Proceedings and Documents. All legal details and
proceedings in connection with the transactions contemplated by this Agreement
shall be satisfactory to Bank and Bank shall have received all such counterpart
originals or certified or other copies of such documents and proceedings in
connection with such transactions, in form and substance satisfactory to Bank,
as Bank may from time to time request.
4.10 Fees and Expenses. Borrowers shall have paid all fees and
charges as required for the Closing and relating to the Closing, including
without limitation, survey costs, title insurance premiums, environmental
investigation fees, appraisal fees, reasonable legal fees, closing costs, filing
and notary fees and any other matters pertinent to the Closing.
ARTICLE V
AFFIRMATIVE COVENANTS
Borrowers jointly and severally covenant to Bank as follows:
5.01 Reporting and Information Requirements.
(a) Annual Audited Reports. As soon as practicable,
and in any event within one hundred twenty (120) days after the close of each
fiscal year of Borrowers, Borrowers will furnish to Bank (i) consolidated
statements of income, retained earnings and cash flow of Borrowers for such
fiscal year and a consolidated balance sheet of Borrowers as of the close of
such fiscal year, and notes to each, all in reasonable detail, setting forth in
comparative form the corresponding figures for the preceding fiscal year,
prepared in accordance with GAAP applied on a basis consistent with that of
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the preceding fiscal year (except for changes in application in which such
accountants concur) with such statements and balance sheet to be audited by
Xxxxxx, Xxxxx and Xxxxx, L.L.C., or other independent certified public
accountants of recognized standing selected by Borrowers and satisfactory to
Bank. The report of such accountants shall not set forth exceptions or
qualifications not acceptable to Bank. Such opinion in any event shall contain a
written statement of such accountants substantially to the effect that (i) such
accountants examined such financial statements in accordance with generally
accepted auditing standards and accordingly made such tests of accounting
records and such other auditing procedures as such accountants considered
necessary in the circumstances and (ii) in the opinion of such accountants such
financial statements present fairly the financial position of the Borrowers as
of the end of such fiscal year and the results of their operations and their
cash flows and changes in stockholders' equity for such fiscal year, in
conformity with GAAP.
(b) Guarantor Financial Reports. As soon as
practicable, and in any event within ninety (90) days after the end of each
calendar year during the term of this Agreement, Borrowers shall cause the
Guarantor to furnish to Bank (i) a personal financial statement of the Guarantor
for such year in form and scope satisfactory to Bank and certified by the
Guarantor and (ii) a copy of the Federal income tax return of the Guarantor for
such year.
(c) Officer's Certificate. Each set of statements and
balance sheets delivered pursuant to Section 5.01(a) of this Agreement shall be
accompanied by a compliance certificate, substantially in the form of Exhibit F
attached hereto and made a part hereof, executed by the President or any Vice
President of Parent, stating that no Event of Default or Potential Default
exists and that Borrower is in compliance with the financial covenants set forth
in Sections 5.13, 5.14 and 5.15 of this Agreement. Such certificate shall
include all figures necessary to calculate Borrowers' compliance with such
financial covenants. If an Event of Default or Potential Default has occurred
and is continuing or exists, such certificate shall specify in detail the nature
and period of existence of the Event of Default or Potential Default and any
action taken or contemplated to be taken by Borrowers.
(d) Other Reports. Promptly upon receipt thereof,
Borrowers will deliver to Bank one copy of each other report submitted to any
Borrower by independent accountants, including comment or management letters, in
connection with any annual, interim or special report made by them of the books
of any Borrower.
(e) Borrowing Base Certificates and Other Reports.
Borrowers shall furnish to Bank a Borrowing Base Certificate within ten (10)
days after the end of each calendar month. In addition, within fifteen (15) days
after the end of each calendar month, Borrowers will deliver to Bank a schedule
of all of their accounts receivable, identifying all accounts, and the aging
thereof by open invoice for each customer of each Borrower and such other
reports concerning the accounts receivable as Bank shall require, all certified
as to accuracy by the President or any Vice President of Parent and all in such
form as Bank shall require. Borrowers shall also promptly provide Bank with all
information requested by Bank with respect to any account debtor. In addition,
within twenty (20) days after the end of each calendar month, Borrowers shall
provide Bank with a schedule containing a description or recap of the inventory
purchased and sold by each Borrower for such month, and such other reports
concerning the inventory of each Borrower as Bank shall require, all certified
as to accuracy by the appropriate officer of Parent and all in such form as Bank
shall require.
(f) Visitation: Audits. Borrowers will permit, upon
reasonable notice, such persons as Bank may designate to visit and inspect any
of the properties of Borrowers, to examine, and to make copies and extracts
23
from, the books and records of Borrowers, and to discuss their affairs with
their officers, employees and independent accountants during normal business
hours. Each Borrower authorizes its officers, employees and independent
accountants to discuss with Bank its affairs.
(g) Notice of Event of Default. Promptly upon any
Borrower becoming aware of an Event of Default or Potential Default, Borrowers
will give Bank notice of the Event of Default or Potential Default, together
with a written statement of the President, Treasurer or Chief Financial Officer
of Parent setting forth the details of the Event of Default or Potential Default
and any action taken or contemplated to be taken by Borrowers.
(h) Notice of Material Adverse Change. Promptly upon
any Borrower becoming aware thereof, Borrowers will give Bank telephonic or
telegraphic notice (with written confirmation sent on the same or next Business
Day) with respect to any material adverse change in the assets, business,
operations, management or financial condition of Borrowers or any of them or any
development or occurrence which would materially and adversely affect Borrowers
or any of them.
(i) Notice of Proceedings. Promptly upon any Borrower
becoming aware thereof, Borrowers will give Bank notice of the commencement,
existence or threat of all proceedings by or before any Official Body against or
affecting any Borrower which, if adversely decided, would have a material
adverse effect on the assets, business, operations, management or financial
condition of Borrowers or any of them, or which relates to any Environmental Law
or any hazardous substance or other substance or material regulated thereunder.
(j) Further Information. Borrowers will promptly
furnish to Bank such other information, and in such form, as Bank may reasonably
request from time to time.
5.02 Preservation of Existence and Franchises. Each Borrower
will maintain its corporate existence, rights and franchises in full force and
effect in its jurisdiction of incorporation. Each Borrower will qualify and
remain qualified as a foreign corporation in each jurisdiction in which failure
to receive or retain qualification would have a material adverse effect on the
assets, business, operations or financial condition of Borrowers or any of them.
5.03 Insurance. Each Borrower will maintain, at its own cost
and expense, insurance with respect to its properties and business against such
liabilities, casualties and contingencies, of such types, with such insurers and
in such amounts as is reasonably satisfactory to Bank from time to time and in
any case as is customary in the case of corporations or other entities engaged
in the same or similar business or having similar properties similarly situated.
Without limitation on the foregoing, Borrowers shall maintain the insurance
required by the Mortgage and the Security Agreements.
5.04 Maintenance of Properties. Each Borrower will maintain or
cause to be maintained in good repair, working order and condition, the
properties now or in the future owned, leased or otherwise possessed by such
Borrower and necessary in the operation of its business and shall make or cause
to be made all needful and proper repairs, renewals, replacements and
improvements to the properties so that the business carried on in connection
with the properties may be properly and advantageously conducted at all times.
Each Borrower shall notify Bank prior to the creation of a new location for any
of its properties or businesses (other than those disclosed to Bank in
connection with the execution and delivery of this Agreement).
5.05 Payment of Liabilities. Each Borrower will pay or
discharge:
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(a) on or prior to the date on which penalties
attach, all taxes, assessments and other governmental charges or levies imposed
upon it or any of its properties or income;
(b) on or prior to the date when due, all lawful
claims of materialmen, mechanics, carriers, warehousemen, landlords and other
like persons which, if unpaid, might result in the creation of a Lien upon any
of its property;
(c) on or prior to the date when due, all other
lawful claims which, if unpaid, might result in the creation of a Lien upon any
of its property; and
(d) all other current liabilities so that none is
unpaid more than ninety (90) days after the due date for such liability.
5.06 Financial Accounting Practices. Each Borrower will make
and keep books, records and accounts which, in reasonable detail, accurately and
fairly reflect its transactions and dispositions of assets and maintain a system
of internal accounting controls sufficient to provide reasonable assurances that
(a) transactions are executed in accordance with management's general or
specific authorization, (b) transactions are recorded as necessary (i) to permit
preparation of financial statements in conformity with GAAP and (ii) to maintain
accountability for assets, (c) to ensure access to assets is permitted only in
accordance with management's general or specific authorization and (d) to ensure
the recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
5.07 Compliance with Laws. Borrowers shall comply with all
applicable Laws the non-compliance with which would have a material adverse
affect on the assets, business, operations or financial condition of Borrowers
or any of them, and with all Environmental Laws.
5.08 Pension Plans. Borrowers shall (a) keep in full force and
effect any and all Plans which are presently in existence or may, from time to
time, come into existence under ERISA, unless such Plans can be terminated
without material liability to Borrowers or any of them in connection with such
termination; (b) make contributions to each of its Plans in a timely manner and
in a sufficient amount to comply with the requirements of ERISA; (c) comply with
all material requirements of ERISA which relate to such Plans so as to preclude
the occurrence of any Reportable Event, Prohibited Transaction (other than a
Prohibited Transaction subject to an exemption under ERISA) or material
accumulated funding deficiency as such term is defined in ERISA; and (d) notify
Bank immediately upon receipt by any Borrower of any notice of the institution
of any proceeding or other action which may result in the termination of any
Plan. Borrowers shall deliver to Bank, promptly after the filing or receipt
thereof, copies of all reports or notices which any Borrower files or receives
under ERISA with or from the Internal Revenue Service, the PBGC, or the U.S.
Department of Labor, other than reports or notices which do not materially or
adversely affect the businesses, assets or financial condition of Borrowers or
any of them, or the ability to perform their obligations under this Agreement.
5.09 Use of Proceeds. Borrowers shall use the proceeds of the
Loans in the manner set forth in Section 3.18 hereof.
5.10 Continuation of and Change in Business. Borrowers will
continue to engage in the business and activities described in Schedule 3.08 to
this Agreement and Borrowers will not engage in any other business or activities
without the prior written consent of Bank.
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5.11 Lien Searches. Bank may, but shall not be obligated to,
conduct lien searches of Borrowers and their assets and properties on an annual
basis and at such other times as Bank, in its sole discretion, may determine to
be necessary. Borrowers shall reimburse Bank for Bank's out of pocket costs in
connection with such lien searches.
5.12 Further Assurances. Borrowers, at their own cost and
expense, will cause to be promptly and duly taken, executed, acknowledged and
delivered all such further acts, documents and assurances as Bank may from time
to time request in order to more effectively carry out the intent and purposes
of this Agreement and the transactions contemplated by this Agreement and to
cause the security interest or interests, the liens or conveyances granted under
the Security Agreements, the Mortgage or any other Loan Document to be, at all
times, valid, perfected and enforceable against Borrowers and all third parties.
All expenses of such filings, recordings, refilings and rerecordings, shall be
borne by Borrowers.
5.13 Debt Service Coverage Ratio. Borrowers shall maintain a
Debt Service Coverage Ratio of at least 1.3 to 1 for the year ending on January
31, 2001 and for each year thereafter.
5.14 Debt to Worth Ratio. Borrowers shall maintain a Debt to
Worth Ratio of not greater than 2 to 1 at January 31, 2001 and at each January
31 thereafter.
5.15 Tangible Net Worth. Borrowers shall maintain a Tangible
Net Worth of at least $4,000,000 at January 31, 2001 and at each January 31
thereafter.
5.16 Depository Accounts. Each Borrower shall maintain its
primary depository account(s) with Bank.
ARTICLE VI
NEGATIVE COVENANTS
Borrowers jointly and severally covenant to Bank as follows:
6.01 Liens. No Borrower shall, at any time incur, create,
assume or permit to exist, any Lien on any of its assets or property, tangible
or intangible, now or hereafter owned, or agree to become liable to do so,
except:
(i) such Liens existing on the Closing Date and
described in Schedule 6.01 to this Agreement;
(ii) Liens granted in favor of Bank;
(iii) pledges or deposits under worker's
compensation, unemployment insurance and social security laws, or to secure the
performance of bids, tenders, contracts (other than for the repayment of
borrowed money) or leases or to secure statutory obligations or surety or
similar bonds used in the ordinary course of business;
(iv) any unfiled materialmen's, mechanic's,
workmen's, and repairmen's liens (provided, that if such a lien shall be
perfected, it shall be discharged of record immediately by payment, bond or
otherwise); and
(v) liens arising from taxes, assessments, charges,
levies or claims described in Section 5.05 of this Agreement that are not yet
due and payable.
6.02 Indebtedness. No Borrower shall, at any time, create,
incur, assume or suffer to exist any Indebtedness, except:
26
(a) Indebtedness under this Agreement, the Notes, the
other Loan Documents or under any other document, instrument or agreement
between Borrower and Bank;
(b) Indebtedness existing on the date hereof, and
described in Schedule 6.02 to this Agreement, provided, however, that none of
such Indebtedness shall be extended, renewed or refinanced without the prior
written consent of Bank; and
(c) Current accounts payable, accrued expenses and
other current items arising out of transactions (other than borrowings) in the
ordinary course of business.
6.03 Guarantees and Contingent Liabilities. Except as set
forth in Schedule 6.03, no Borrower shall at any time directly or indirectly
assume, guarantee, endorse or otherwise agree, become or remain directly or
contingently liable upon or with respect to any obligation or liability of any
other Person except that any Borrower may endorse negotiable or other
instruments in any amount for deposit or collection or similar transactions in
the ordinary course of its business.
6.04 Loans and Investments. No Borrower shall at any time make
or suffer to remain outstanding any loan or advance to, or purchase, acquire, or
own any stock, bonds, notes or securities of, or any partnership interest
(whether general or limited) in, or any other interest in, or make any capital
contribution or loan to, any other Person, or agree, become or remain liable to
do any of the foregoing, except:
(a) Trade accounts receivable resulting from a
Borrower's sale of goods or services made in the ordinary course of its
business;
(b) obligations backed by the full faith and credit
of the United States of America maturing not in excess of nine months from the
date of acquisition;
(c) demand deposits, time deposits or certificates of
deposit in Bank or in United States FDIC insured commercial banks having
shareholders' equity of at least $100,000,000 and maturing not in excess of nine
months from the date of acquisition; and
(d) commercial paper maturing not in excess of six
months from the date of acquisition and either issued by Bank or rated P-1 by
Xxxxx'x Investors Service, Inc. or A-1 by Standard & Poor's Corporation on the
date of acquisition.
6.05 Dividends and Related Distributions. Parent will not
declare, make, pay, or agree, become or remain liable to make or pay, any
dividend or other distribution of any nature (whether in cash, property,
securities or otherwise) on account of or in respect of any shares of the
capital stock of Parent or on account of the purchase, redemption, retirement or
acquisition of any shares of the capital stock (or warrants, options or rights
for any shares of the capital stock) of Parent without the prior written consent
of Bank, which consent will not be unreasonably withheld.
6.06 Merger; Consolidation; Business Acquisitions. No Borrower
will merge or agree to merge with or into or consolidate with any other Person
without the prior written consent of Bank. No Borrower will acquire any material
portion of the stock or assets or business of any other Person without the prior
written consent of Bank, which consent will not be unreasonably withheld.
6.07 Dispositions of Assets. No Borrower will sell, convey,
27
pledge, assign, lease, abandon or otherwise transfer or dispose of, voluntarily
or involuntarily (any of the foregoing being referred to in this Section as a
transaction and any series of related transactions constituting but a single
transaction), any of its properties or assets, tangible or intangible (including
stock of Subsidiaries), except for sales of inventory in the ordinary course of
business and except sales of equipment which is replaced with equipment of equal
or higher value and other dispositions of equipment in an aggregate amount not
to exceed $25,000 in aggregate net book value in any fiscal year.
6.08 Margin Stock. No Borrower will use the proceeds of any
Loans directly or indirectly to purchase or carry any "margin stock" (within the
meaning of Regulations U, G, T, or X of the Board of Governors of the Federal
Reserve System) or to extend credit to others for the purpose of purchasing or
carrying, directly or indirectly, any margin stock.
6.09 Changes in Ownership or Control. Project, Enviro-Tech and
PDG shall at all times remain wholly owned Subsidiaries of Parent and no
Borrower shall at any time have any other Subsidiaries other than Inactive
Subsidiaries. Parent will not transfer any of its interest in the Mortgaged
Property (as defined in the Mortgage).
6.10 Self Dealing. No Borrower shall enter into or carry out
any loan, advance or other transaction (including, without limitation,
purchasing property or services or selling property or services) with any
Affiliate except that shareholders, directors or officers of any Borrower may
render services to any Borrower for compensation at the same rates generally
paid by corporations engaged in the same or similar businesses for the same or
similar services.
ARTICLE VII
DEFAULTS
7.01 Events of Default. An Event of Default means the
occurrence or existence of one or more of the following events or conditions
(whatever the reason for such Event of Default and whether voluntary involuntary
or effected by operation of Law):
(a) Borrowers shall fail to pay principal on any of
the Notes when due and such failure shall continue for five (5) days; or
(b) Borrowers shall fail to pay interest on the Loans
or any fees payable pursuant to Article II of this Agreement when due and such
failure shall continue for five (5) days; or
(c) Any Borrower or the Guarantor shall fail to pay
any other fee, or other amount payable pursuant to this Agreement, the Notes,
the Security Agreements or any of the other Loan Documents when due and such
failure shall continue for five (5) days; or
(d) Any representation or warranty made by any
Borrower or the Guarantor under this Agreement, the Notes, or any of the other
Loan Documents, or any statement made by any Borrower or the Guarantor in any
financial statement, certificate, report, exhibit or document furnished by any
Borrower or the Guarantor to Bank pursuant to this Agreement or the other Loan
Documents, shall prove to have been false or misleading in any material respect
as of the time when made; or
(e) Bank's security interest under any Security
Agreement or any of the other Loan Documents is or shall become unperfected; or
28
(f) Any Borrower shall default in the performance or
observance of any covenant, agreement or duty contained in Article VI hereof or
in Sections 5.01(g), 5.09, 5.10, 5.13, 5.14, 5.15 or 5.16 hereof; or
(g) Any Borrower or the Guarantor shall (i) default
(as principal or guarantor or other surety) in any payment of principal of or
interest on any obligation (or set of related obligations) for borrowed money in
excess of $50,000, beyond any period of grace with respect to the payment or, if
any obligation (or set of related obligations) for borrowed money in excess of
$50,000 is or are payable or repayable on demand, fails to pay or repay such
obligation or obligations when demanded, or (ii) default in the observance of
any other covenant, term or condition contained in any agreement or instrument
by which an obligation (or set of related obligations) for borrowed money in
excess of $50,000 is or are created, secured or evidenced, if the effect of such
default is to cause, or commit the holder or holders of such obligation or
obligations (or a trustee or agent on behalf of such holder or holders) to
cause, all or part of such obligation or obligations to become due before its or
their otherwise stated maturity; or
(h) Any Borrower or the Guarantor shall default in
the performance or observance of any other covenant, agreement or duty under
this Agreement, the Notes or the other Loan Documents and such default shall
continue for 30 days, or an Event of Default as defined in any other Loan
Document shall occur; or
(i) One or more judgments for the payment of money in
excess of $50,000 shall have been entered against any Borrower or the Guarantor;
or
(j) A writ or warrant of attachment, garnishment,
execution, distraint or similar process shall have been issued against any
Borrower or any of their respective properties; or
(k) (i) A Termination Event with respect to a Plan
shall occur, (ii) any Person shall engage in any prohibited transaction
involving any Plan, (iii) an accumulated funding deficiency, whether or not
waived, shall exist with respect to any Plan, (iv) any Borrower or any ERISA
Affiliate shall be in "Default" (as defined in Section 4219(c)(5) of ERISA with
respect to payments due to a multi-employer Plan resulting from any Borrower's
or any ERISA affiliate's, complete or partial withdrawal (as described in
Section 4203 or 4205 of ERISA) from such Plan, or (v) any other event or
condition shall occur or exist with respect to a single employer Plan, except
that no such event or condition shall constitute an Event of Default if it,
together with all other events or conditions at the time existing, would not
subject any Borrower or any of its Subsidiaries to any tax, penalty, debt or
liability which, alone or in the aggregate, would have a material adverse effect
on Borrowers or any of them; or
(l) A Change of Control or Change of Management shall
occur; or
(m) A proceeding shall be instituted in respect of
any Borrowers or the Guarantor:
(i) seeking to have an order for relief entered in
respect of such Borrower or the Guarantor, or seeking a declaration or entailing
a finding that such Borrower or the Guarantor is insolvent or a similar
declaration or finding, or seeking dissolution, winding-up, charter revocation
or forfeiture, liquidation, reorganization, arrangement, adjustment, composition
or other similar relief with respect to such Borrower or the Guarantor, its
assets or debts under any law relating to bankruptcy, insolvency, relief of
debtors or protection of creditors, termination of legal entities or any other
similar law now or in the future which shall not have been dismissed or stayed
within sixty (60) days after such proceedings were instituted; or
29
(ii) seeking appointment of a receiver, trustee,
custodian, liquidator, assignee, sequestrator or other similar official for such
Borrower or the Guarantor or for all or any substantial part of its property
which shall not have been dismissed or stayed within sixty (60) days after such
proceedings were instituted; or
(n) Any Borrower or the Guarantor shall become
insolvent, shall become generally unable to pay its debts as they become due,
shall voluntarily suspend transaction of its businesses, shall make a general
assignment for the benefit of creditors, shall institute a proceeding described
in Section 7.01(l)(i) of this Agreement or shall consent to any order for
relief, declaration, finding or relief described in Section 7.01(l)(i) of this
Agreement, shall institute a proceeding described in Section 7.01(l)(ii) of this
Agreement or shall consent to the appointment or to the taking of possession by
any such official of all or any substantial part of its property whether or not
any proceeding is instituted, dissolve, wind-up or liquidate itself or any
substantial part of their property, or shall take any action in furtherance of
any of the foregoing.
7.02 Consequences of an Event of Default.
(a) If an Event of Default specified in subsections
(a) through (l) of Section 7.01 of this Agreement occurs, Bank will be under no
further obligation to make Loans and may at its option demand the unpaid
principal amount of the Notes, interest accrued on the unpaid principal amount
and all other amounts owing by any Borrower or the Guarantor under this
Agreement, the Notes and the other Loan Documents to be immediately due and
payable without presentment, demand, protest or further notice of any kind, all
of which are expressly waived, and an action for any amounts due shall accrue
immediately.
(b) If an Event of Default specified in subsections
(m) or (n) of Section 7.01 of this Agreement occurs and continues or exists,
Bank will be under no further obligation to make Loans and the unpaid principal
amount of the Notes, interest accrued on the unpaid principal amount and all
other amounts owing by any Borrower or the Guarantor under this Agreement, the
Notes and the other Loan Documents shall automatically become immediately due
and payable without presentment, demand, protest or notice of any kind, all of
which are expressly waived, and an action for any amounts due shall accrue
immediately.
7.03 Set-Off. If the unpaid principal amount of the Notes,
interest accrued on the unpaid principal amount or other amount owing by any
Borrower under this Agreement, the Notes or the other Loan Documents shall have
become due and payable (at maturity, by acceleration or otherwise), Bank and the
holder of any participation in any Loan will each have the right, in addition to
all other rights and remedies available to it, without notice to Borrower, to
set-off against and to appropriate and apply to such due and payable amounts any
debt owing to, and any other funds held in any manner for the account of, any
Borrower by Bank or by such holder including, without limitation, all funds in
all deposit accounts (whether time or demand, general or special, provisionally
credited or finally credited, or otherwise) now or in the future maintained by
any Borrower with Bank or such holder. Each Borrower consents to and confirms
the foregoing arrangements and confirms Bank's rights and such holder's rights
of banker's lien and set-off. Nothing in this Agreement will be deemed a waiver
or prohibition of or restriction on Bank's rights or any such holder's rights of
banker's lien or set-off.
30
ARTICLE VIII
MISCELLANEOUS
8.01 Business Days. Except as otherwise provided in this
Agreement, whenever any payment or action to be made or taken under this
Agreement, or under the Notes or under any of the other Loan Documents is stated
to be due on a day which is not a Business Day, such payment or action will be
made or taken on the next following Business Day and such extension of time will
be included in computing interest or fees, if any, in connection with such
payment or action.
8.02 Records. The unpaid principal amount of the Notes, the
unpaid interest accrued thereon, the interest rate or rates applicable to such
unpaid principal amount and the duration of such applicability shall at all
times be ascertained from the records of Bank, which shall be conclusive absent
manifest error.
8.03 Amendments and Waivers. Bank and Borrowers may from time
to time enter into agreements amending, modifying or supplementing this
Agreement, the Notes or any other Loan Document or changing the rights of Bank
or of Borrowers under this Agreement, under the Notes or under any other Loan
Document and Bank may from time to time grant waivers or consents to a departure
from the due performance of the obligations of Borrowers under this Agreement,
under the Notes or under any other Loan Document. Any such agreement, waiver or
consent must be in writing and will be effective only to the extent specifically
set forth in such writing. In the case of any such waiver or consent relating to
any provision of this Agreement, any Event of Default or Potential Default so
waived or consented to will be deemed to be cured and not continuing, but no
such waiver or consent will extend to any other or subsequent Event of Default
or Potential Default or impair any right consequent to any other or subsequent
Event of Default or Potential Default or impair any right consequent thereto.
8.04 No Implied Waiver: Cumulative Remedies. No course of
dealing and no delay or failure of Bank in exercising any right, power or
privilege under this Agreement, the Notes or any other Loan Document will affect
any other or future exercise of any such right, power or privilege or exercise
of any other right, power or privilege except as and to the extent that the
assertion of any such right, power or privilege shall be barred by an applicable
statute of limitations; nor shall any single or partial exercise of any such
right, power or privilege or any abandonment or discontinuance of steps to
enforce such a right, power or privilege preclude any further exercise of such
right, power or privilege or of any other right, power or privilege. The rights
and remedies of Bank under this Agreement, the Notes or any other Loan Document
are cumulative and not exclusive of any rights or remedies which Bank would
otherwise have.
8.05 Notices. All notices, requests, demands, directions and
other communications (collectively notices) under the provisions of this
Agreement or the Notes must be in writing (including telexed or telecopied
communication) unless otherwise expressly permitted under this Agreement and
must be sent by first-class or first-class express mail, private overnight or
next Business Day courier or by telex or telecopy with confirmation in writing
mailed first class, in all cases with charges prepaid, and any such properly
given notice will be effective when received. All notices will be sent to the
applicable party at the addresses stated below or in accordance with the last
unrevoked written direction from such party to the other parties.
If to Borrowers
or any of them: PDG Environmental, Inc.
000 Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxx
31
and a copy to: Xxxxx X. Xxxxxxxxx, Esq.
Xxxxx & Xxxxxxx, P.C.
00 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
If to Bank: Commercial Loan Department
Sky Bank
Xxxxxxx X. Xxxx, Vice President
000 Xxxx Xxxxxxxxxx Xxxxxx
Xxx Xxxxxx, Xxxxxxxxxxxx 00000
and copy to: Xxxxxx X. Gacse
c/o Sky Bank
00 Xxxxxxx Xxxxx
Xxxxxxxxxx, Xxxx 00000
8.06 Expenses; Taxes; Attorneys Fees. Borrowers agree to pay
or cause to be paid and to save Bank harmless against liability for the payment
of all reasonable expenses, including, but not limited to reasonable fees and
expenses of counsel and paralegals for Bank, incurred by Bank from time to time
(i) arising in connection with the preparation, execution, delivery and
performance of this Agreement, the Notes and the other Loan Documents, (ii)
relating to any requested amendments, waivers or consents to this Agreement, the
Notes or any of the other Loan Documents and (iii) arising in connection with
Bank's enforcement or preservation of rights under this Agreement, the Notes or
any of the other Loan Documents, including but not limited to such expenses as
may be incurred by Bank in the collection of the outstanding principal amount of
the Loans. Borrowers agree to pay all stamp, document, transfer, recording or
filing taxes or fees and similar impositions now or in the future determined by
Bank to be payable in connection with this Agreement, the Notes or any other
Loan Document. Borrowers agree to save Bank harmless from and against any and
all present or future claims, liabilities or losses with respect to or resulting
from any omission to pay or delay in paying any such taxes, fees or impositions.
In the event of any action at law or suit in equity in relation to this
Agreement, the Notes or the other Loan Documents, Borrowers will pay, in
addition to all other sums which Borrowers may be required to pay, a reasonable
sum for attorneys and paralegals fees incurred by Bank or the holder of the
Notes in connection with such action or suit. All payments due from Borrowers
under this Section will be added to and become part of the Loans until paid in
full.
8.07 Severability. The provisions of this Agreement are
intended to be severable. If any provision of this Agreement is held invalid or
unenforceable in whole or in part in any jurisdiction, the provision will, as to
such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without in any manner affecting the validity or enforceability
of the provision in any other jurisdiction or the remaining provisions of this
Agreement in any jurisdiction.
8.08 Governing Law: Consent to Jurisdiction. This Agreement
will be deemed to be a contract under the laws of the Commonwealth of
Pennsylvania and for all purposes will be governed by and construed and enforced
in accordance with the substantive laws, and not the laws of conflicts, of said
Commonwealth. Borrower consents to the exclusive jurisdiction and venue of the
federal and state courts located in Xxxxxxxx County or Allegheny County,
Pennsylvania, in any action on, relating to or mentioning this Agreement, the
Notes, the other Loan Documents, or any one or more of them.
8.09 Prior Understandings. This Agreement, the Notes and the
other Loan Documents supersede all prior understandings and agreements, whether
written or oral, among the parties relating to the transactions provided for in
this Agreement, the Notes and the other Loan Documents, except that the
commitment letter dated July 14, 2000 issued by Bank and accepted by
32
Parent shall survive the execution and delivery hereof and shall be binding upon
Borrowers with the same force and effect as though accepted by all of them. To
the extent of any inconsistencies between the provisions of this Agreement and
the provisions of said commitment letter, the provisions of this Agreement shall
control.
8.10 Duration: Survival. All representations and warranties of
Borrowers contained in this Agreement or made in connection with this Agreement
or any of the other Loan Documents shall survive the making of and will not be
waived by the execution and delivery of this Agreement, the Notes or the other
Loan Documents, by any investigation by Bank, or the making of any Loan.
Notwithstanding termination of this Agreement or an Event of Default, all
covenants and agreements of Borrowers will continue in full force and effect
from and after the date of this Agreement so long as Borrowers may borrow under
this Agreement and until payment in full of the Notes, interest thereon, and all
fees and other obligations of Borrowers under this Agreement, the Notes or the
other Loan Documents. Without limitation, it is understood that all obligations
of Borrowers to make payments to or indemnify Bank will survive the payment in
full of the Notes and of all other obligations of Borrower under this Agreement,
the Notes, the Security Agreements and the other Loan Documents.
8.11 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties to this Agreement on
separate counterparts each of which, when so executed, will be deemed an
original, but all such counterparts will constitute but one and the same
instrument.
8.12 Successors and Assigns. This Agreement will be binding
upon and inure to the benefit of Bank, Borrowers and their successors and
assigns, except that Borrowers may not assign or transfer any of their rights
under this Agreement without the prior written consent of Bank. All obligations
of Borrowers under this Agreement are joint and several.
8.14 No Third Party Beneficiaries. The rights and benefits of
this Agreement and the other Loan Documents are not intended to, and shall not,
inure to the benefit of any third party.
8.15 Participation. Bank may from time to time sell, assign or
grant one or more participation in all or any part of the Loans made by Bank or
which may be made by Bank, or its right, title and interest in the Loans in or
to this Agreement, to another lending officer, lender or financial institution.
With respect to such participation, Bank shall act as lead bank or managing
agent. Except to the extent otherwise required by the context of this Agreement,
the word "Bank" where used in this Agreement means and includes any holder of a
note originally issued to Bank and each such holder of a note will be bound by
and have the benefits of this Agreement, the same as such holder had been a
signatory to this Agreement. In connection with any such sale, assignment or
grant of participation, Bank may make available to any prospective purchaser,
assignee or participant any information relative to Borrowers in Bank's
possession.
8.16 Construction. Unless the context of this Agreement
otherwise clearly requires, references to the plural include the singular, the
singular the plural, the part the whole and "or" has the inclusive meaning
represented by the phrase "and/or". References in this Agreement to "judgments"
of Bank include good faith estimates by Bank (in the case of quantitative
judgments) and good faith beliefs by a Bank (in the case of qualitative
judgments).
8.17 Exhibits. All exhibits and schedules attached to this
Agreement are incorporated and made a part of this Agreement.
33
8.18 Headings. The section headings contained in this
Agreement are for convenience only and do not limit or define or affect the
construction or interpretation of this Agreement in any respect.
10.7 WAIVER OF TRIAL BY JURY.
BORROWERS AND BANK EXPRESSLY,
KNOWINGLY AND VOLUNTARILY WAIVE ALL INITIALS:
BENEFIT AND ADVANTAGE OF ANY RIGHT TO A
TRIAL BY JURY, AND NEITHER WILL AT ANY TIME
INSIST UPON, OR PLEAD OR IN ANY MANNER
WHATSOEVER CLAIM OR TAKE THE BENEFIT OR JCR
ADVANTAGE OF A TRIAL BY JURY IN ANY ACTION ----------
ARISING IN CONNECTION WITH THIS AGREEMENT, Borrowers
THE NOTES OR ANY OF THE LOAN DOCUMENTS.
DKP
----------
Bank
IN WITNESS WHEREOF, and intending to be legally bound, the
parties, by their duly authorized officers, have executed and delivered this
Agreement as of the date set forth at the beginning of this Agreement.
ATTEST: PDG Environmental, Inc.
By: /s/ Xxxx X. Xxxxx
-----------------------------------
Assistant Secretary Title: CEO
-------------------------------
ATTEST: Project Development Group, Inc.
By: /s/ Xxxx X. Xxxxx
-----------------------------------
Assistant Secretary Title: CEO
-------------------------------
ATTEST: Enviro-Tech Abatement Services, Co.
By: /s/ Xxxx X. Xxxxx
-----------------------------------
Assistant Secretary Title: CEO
--------------------------------
ATTEST: PDG, Inc.
By: /s/ Xxxx X. Xxxxx
-----------------------------------
Assistant Secretary Title: CEO
--------------------------------
Sky Bank
By: Xxxxxxx X. Xxxx
-----------------------------------
Title: Vice President
--------------------------------
34
Exhibit "A"
FACILITY A NOTE
$400,000 Pittsburgh, Pennsylvania
August 3, 2000
FOR VALUE RECEIVED, the undersigned, PDG Environmental, Inc.,
a Delaware corporation, Project Development Group, Inc., a Pennsylvania
corporation, Enviro-Tech Abatement Services, Co., a North Carolina corporation,
and PDG, Inc., a Pennsylvania corporation (collectively, "Borrowers"), hereby
jointly and severally promise to pay to the order of Sky Bank, an Ohio banking
institution, having an office at 000 Xxxx Xxxxxxxxxx Xxxxxx, Xxx Xxxxxx,
Xxxxxxxxxxxx 00000 ("Bank"), on or before the Facility A Loan Expiry Date, and
at such earlier dates as may be required by the Loan Agreement (as defined
below), the principal sum of Four Hundred Thousand and 00/100 Dollars
($400,000.00). Borrowers hereby further jointly and severally promise to pay to
the order of Bank interest on the unpaid principal amount of this Facility A
Note from time to time outstanding at the rate or rates per annum determined
pursuant to Article II of, or as otherwise provided in, the Loan Agreement, and
with such amounts being payable on the dates set forth in Article II of, or as
otherwise provided in, the Loan Agreement.
All payments and prepayments to be made in respect of
principal, interest, or other amounts due from Borrowers under this Facility A
Note shall be payable at 12:00 noon, New Castle, Pennsylvania time, on the day
when due, without presentment, demand, protest or notice of any kind, all of
which are expressly waived, and an action therefor shall immediately accrue. All
such payments shall be made to Bank at its designated office located at 000 Xxxx
Xxxxxxxxxx Xxxxxx, Xxx Xxxxxx, Xxxxxxxxxxxx, in lawful money of the United
States of America in immediately available funds without setoff, counterclaim or
other deduction of any nature.
Except as otherwise provided in the Loan Agreement, if any
payment of principal or interest under this Facility A Note shall become due on
a day which is not a Business Day, such payment shall be made on the next
following Business Day and such extension of time shall be included in computing
interest in connection with such payment.
This Facility A Note is one of the Notes referred to in, and
is entitled to the benefits of, that certain Loan Agreement of even date
herewith by and between Borrowers and Bank (as such agreement may be amended,
modified or supplemented from time to time, the "Loan Agreement"), which among
other things provides for the acceleration of the maturity hereof upon the
occurrence of certain events and may provide for prepayments in certain
circumstances and upon certain terms and conditions. This Facility A Note is
secured by, and is entitled to the benefits of, the Loan Documents, as the same
may be amended, modified or supplemented from time to time. Capitalized terms
used in this Facility A Note which are defined in the Loan Agreement shall have
the meanings assigned to them therein unless otherwise defined in this Facility
A Note.
This Facility A Note shall be governed by, and shall be
construed and enforced in accordance with, the laws of the Commonwealth of
Pennsylvania without regard to the principles of the conflicts of laws thereof.
Each Borrower hereby consents to the jurisdiction and venue of the Court of
Common Pleas of Allegheny County, Pennsylvania, Court of Common Pleas of
Xxxxxxxx County, Pennsylvania and the United States District Court for the
Western District of Pennsylvania with respect to any suit arising out of or
mentioning this Facility A Note.
Exhibit A-51
35
WARRANT OF ATTORNEY TO CONFESS JUDGMENT. EACH BORROWER HEREBY
IRREVOCABLY AUTHORIZES AND EMPOWERS THE PROTHONOTARY, ANY ATTORNEY OR ANY CLERK
OF ANY COURT OF RECORD, TO APPEAR FOR AND CONFESS JUDGMENT AGAINST SUCH
BORROWER, UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, FOR SUCH SUMS AS ARE DUE
AND/OR MAY BECOME DUE UNDER THIS FACILITY A NOTE, THE LOAN AGREEMENT AND THE
OTHER LOAN DOCUMENTS, WITH OR WITHOUT DECLARATION, WITH COSTS OF SUIT, WITHOUT
STAY OF EXECUTION AND WITH AN AMOUNT EQUAL TO TEN PERCENT (10%) OF THE AMOUNT OF
SUCH JUDGMENT, BUT NOT LESS THAN ONE THOUSAND DOLLARS ($1,000), ADDED FOR
ATTORNEYS' COLLECTION FEES. NOTWITHSTANDING THE ATTORNEY'S COMMISSION PROVIDED
FOR IN THE PRECEDING SENTENCE (WHICH IS INCLUDED IN THE WARRANT FOR PURPOSES OF
ESTABLISHING A SUM CERTAIN), THE AMOUNT OF ATTORNEYS' FEES THAT THE BANK MAY
RECOVER FROM SUCH BORROWER SHALL NOT EXCEED THE ACTUAL ATTORNEYS' FEES INCURRED
BY THE BANK. TO THE EXTENT PERMITTED BY LAW, EACH BORROWER RELEASES ALL ERRORS
IN SUCH PROCEEDINGS. IF A COPY OF THIS FACILITY A NOTE, VERIFIED BY AFFIDAVIT BY
OR ON BEHALF OF THE HOLDER OF THIS FACILITY A NOTE SHALL HAVE BEEN FILED IN SUCH
ACTION, IT SHALL NOT BE NECESSARY TO FILE THE ORIGINAL FACILITY A NOTE AS A
WARRANT OF ATTORNEY. THE AUTHORITY AND POWER TO APPEAR FOR AND CONFESS JUDGMENT
AGAINST BORROWERS SHALL NOT BE EXHAUSTED BY THE INITIAL EXERCISE THEREOF AND MAY
BE EXERCISED AS OFTEN AS THE HOLDER SHALL FIND IT NECESSARY AND DESIRABLE AND
THIS FACILITY A NOTE SHALL BE A SUFFICIENT WARRANT THEREFOR. THE HOLDER HEREOF
MAY CONFESS ONE OR MORE JUDGMENTS IN THE SAME OR DIFFERENT JURISDICTIONS FOR ALL
OR ANY PART OF THE AMOUNT OWING HEREUNDER, WITHOUT REGARD TO WHETHER JUDGMENT
HAS THERETOFORE BEEN CONFESSED ON MORE THAN ONE OCCASION FOR THE SAME AMOUNT. IN
THE EVENT ANY JUDGMENT CONFESSED AGAINST ANY BORROWER HEREUNDER IS STRICKEN OR
OPENED UPON APPLICATION BY OR ON SUCH BORROWER'S BEHALF FOR ANY REASON, HOLDER
IS HEREBY AUTHORIZED AND EMPOWERED TO AGAIN APPEAR FOR AND CONFESS JUDGMENT
AGAINST SUCH BORROWER FOR ANY PART OR ALL OF THE AMOUNTS OWING HEREUNDER, AS
PROVIDED FOR HEREIN, IF DOING SO WILL CURE ANY ERRORS OR DEFECTS IN SUCH PRIOR
PROCEEDINGS.
Exhibit A-52
36
IN WITNESS WHEREOF, and intending to be jointly and severally
and legally bound hereby, each Borrower, by its duly authorized officers, has
executed, issued and delivered this Facility A Note in Pittsburgh, Pennsylvania
on the day and year written above.
ATTEST: PDG Environmental, Inc.
By: Xxxx X. Xxxxx
------------------------------------
Secretary Title: CEO
---------------------------------
ATTEST: Project Development Group, Inc.
By: Xxxx X. Xxxxx
------------------------------------
Secretary Title: CEO
---------------------------------
ATTEST: Enviro-Tech Abatement Services, Co.
By: Xxxx X. Xxxxx
------------------------------------
Secretary Title: CEO
---------------------------------
ATTEST: PDG, Inc.
By: Xxxx X. Xxxxx
------------------------------------
Secretary Title: CEO
---------------------------------
Exhibit A-53
37
FACILITY B NOTE
$1,000,000 Pittsburgh, Pennsylvania
August 3, 2000
FOR VALUE RECEIVED, the undersigned, PDG Environmental, Inc.,
a Delaware corporation, Project Development Group, Inc., a Pennsylvania
corporation, Enviro-Tech Abatement Services, Co., a North Carolina corporation,
and PDG, Inc., a Pennsylvania corporation (collectively, "Borrowers"), hereby
jointly and severally promise to pay to the order of Sky Bank, an Ohio banking
institution, having an office at 000 Xxxx Xxxxxxxxxx Xxxxxx, Xxx Xxxxxx,
Xxxxxxxxxxxx 00000 ("Bank"), on or before the Facility B Loan Expiry Date, and
at such earlier dates as may be required by the Loan Agreement (as defined
below), the principal sum of One Million and 00/100 Dollars ($1,000,000.00).
Borrowers hereby further jointly and severally promise to pay to the order of
Bank interest on the unpaid principal amount of this Facility B Note from time
to time outstanding at the rate or rates per annum determined pursuant to
Article II of, or as otherwise provided in, the Loan Agreement, and with such
amounts being payable on the dates set forth in Article II of, or as otherwise
provided in, the Loan Agreement.
All payments and prepayments to be made in respect of
principal, interest, or other amounts due from Borrowers under this Facility B
Note shall be payable at 12:00 noon, New Castle, Pennsylvania time, on the day
when due, without presentment, demand, protest or notice of any kind, all of
which are expressly waived, and an action therefor shall immediately accrue. All
such payments shall be made to Bank at its designated office located at 000 Xxxx
Xxxxxxxxxx Xxxxxx, Xxx Xxxxxx, Xxxxxxxxxxxx, in lawful money of the United
States of America in immediately available funds without setoff, counterclaim or
other deduction of any nature.
Except as otherwise provided in the Loan Agreement, if any
payment of principal or interest under this Facility B Note shall become due on
a day which is not a Business Day, such payment shall be made on the next
following Business Day and such extension of time shall be included in computing
interest in connection with such payment.
This Facility B Note is one of the Notes referred to in, and
is entitled to the benefits of, that certain Loan Agreement of even date
herewith by and between Borrowers and Bank (as such agreement may be amended,
modified or supplemented from time to time, the "Loan Agreement"), which among
other things provides for the acceleration of the maturity hereof upon the
occurrence of certain events and may provide for prepayments in certain
circumstances and upon certain terms and conditions. This Facility B Note is
secured by, and is entitled to the benefits of, the Loan Documents, as the same
may be amended, modified or supplemented from time to time. Capitalized terms
used in this Facility B Note which are defined in the Loan Agreement shall have
the meanings assigned to them therein unless otherwise defined in this Facility
B Note.
This Facility B Note shall be governed by, and shall be
construed and enforced in accordance with, the laws of the Commonwealth of
Pennsylvania without regard to the principles of the conflicts of laws thereof.
Each Borrower hereby consents to the jurisdiction and venue of the Court of
Common Pleas of Allegheny County, Pennsylvania, Court of Common Pleas of
Xxxxxxxx County, Pennsylvania and the United States District Court for the
Western District of Pennsylvania with respect to any suit arising out of or
mentioning this Facility B Note.
Exhibit A-54
38
WARRANT OF ATTORNEY TO CONFESS JUDGMENT. EACH BORROWER HEREBY
IRREVOCABLY AUTHORIZES AND EMPOWERS THE PROTHONOTARY, ANY ATTORNEY OR ANY CLERK
OF ANY COURT OF RECORD, TO APPEAR FOR AND CONFESS JUDGMENT AGAINST SUCH
BORROWER, UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, FOR SUCH SUMS AS ARE DUE
AND/OR MAY BECOME DUE UNDER THIS FACILITY B NOTE, THE LOAN AGREEMENT AND THE
OTHER LOAN DOCUMENTS, WITH OR WITHOUT DECLARATION, WITH COSTS OF SUIT, WITHOUT
STAY OF EXECUTION AND WITH AN AMOUNT EQUAL TO TEN PERCENT (10%) OF THE AMOUNT OF
SUCH JUDGMENT, BUT NOT LESS THAN ONE THOUSAND DOLLARS ($1,000), ADDED FOR
ATTORNEYS' COLLECTION FEES. NOTWITHSTANDING THE ATTORNEY'S COMMISSION PROVIDED
FOR IN THE PRECEDING SENTENCE (WHICH IS INCLUDED IN THE WARRANT FOR PURPOSES OF
ESTABLISHING A SUM CERTAIN), THE AMOUNT OF ATTORNEYS' FEES THAT THE BANK MAY
RECOVER FROM SUCH BORROWER SHALL NOT EXCEED THE ACTUAL ATTORNEYS' FEES INCURRED
BY THE BANK. TO THE EXTENT PERMITTED BY LAW, EACH BORROWER RELEASES ALL ERRORS
IN SUCH PROCEEDINGS. IF A COPY OF THIS FACILITY B NOTE, VERIFIED BY AFFIDAVIT BY
OR ON BEHALF OF THE HOLDER OF THIS FACILITY B NOTE SHALL HAVE BEEN FILED IN SUCH
ACTION, IT SHALL NOT BE NECESSARY TO FILE THE ORIGINAL FACILITY B NOTE AS A
WARRANT OF ATTORNEY. THE AUTHORITY AND POWER TO APPEAR FOR AND CONFESS JUDGMENT
AGAINST BORROWERS SHALL NOT BE EXHAUSTED BY THE INITIAL EXERCISE THEREOF AND MAY
BE EXERCISED AS OFTEN AS THE HOLDER SHALL FIND IT NECESSARY AND DESIRABLE AND
THIS Facility B NOTE SHALL BE A SUFFICIENT WARRANT THEREFOR. THE HOLDER HEREOF
MAY CONFESS ONE OR MORE JUDGMENTS IN THE SAME OR DIFFERENT JURISDICTIONS FOR ALL
OR ANY PART OF THE AMOUNT OWING HEREUNDER, WITHOUT REGARD TO WHETHER JUDGMENT
HAS THERETOFORE BEEN CONFESSED ON MORE THAN ONE OCCASION FOR THE SAME AMOUNT. IN
THE EVENT ANY JUDGMENT CONFESSED AGAINST ANY BORROWER HEREUNDER IS STRICKEN OR
OPENED UPON APPLICATION BY OR ON SUCH BORROWER'S BEHALF FOR ANY REASON, HOLDER
IS HEREBY AUTHORIZED AND EMPOWERED TO AGAIN APPEAR FOR AND CONFESS JUDGMENT
AGAINST SUCH BORROWER FOR ANY PART OR ALL OF THE AMOUNTS OWING HEREUNDER, AS
PROVIDED FOR HEREIN, IF DOING SO WILL CURE ANY ERRORS OR DEFECTS IN SUCH PRIOR
PROCEEDINGS.
IN WITNESS WHEREOF, and intending to be jointly and severally
and legally bound hereby, each Borrower, by its duly authorized officers, has
executed, issued and delivered this Facility B Note in Pittsburgh, Pennsylvania
on the day and year written above.
ATTEST: PDG Environmental, Inc.
By: Xxxx X. Xxxxx
----------------------------------------
Secretary Title: CEO
-------------------------------------
ATTEST: Project Development Group, Inc.
By: Xxxx X. Xxxxx
----------------------------------------
Secretary Title: CEO
-------------------------------------
ATTEST: Enviro-Tech Abatement Services, Co.
By: Xxxx X. Xxxxx
----------------------------------------
Secretary Title: CEO
-------------------------------------
ATTEST: PDG, Inc.
By: Xxxx X. Xxxxx
----------------------------------------
Secretary Title: CEO
-------------------------------------
39
FACILITY C NOTE
$______________ Pittsburgh, Pennsylvania
-------------, ----
FOR VALUE RECEIVED, the undersigned, PDG Environmental, Inc.,
a Delaware corporation, Project Development Group, Inc., a Pennsylvania
corporation, Enviro-Tech Abatement Services, Co., a North Carolina corporation,
and PDG, Inc., a Pennsylvania corporation (collectively, "Borrowers"), hereby
jointly and severally promise to pay to the order of Sky Bank, an Ohio banking
institution, having an office at 000 Xxxx Xxxxxxxxxx Xxxxxx, Xxx Xxxxxx,
Xxxxxxxxxxxx 00000 ("Bank"), on or before the Facility C Loan Expiry Date, and
at such earlier dates as may be required by the Loan Agreement (as defined
below), the principal sum of ______________________ and 00/100 Dollars
($__________). Borrowers hereby further jointly and severally promise to pay to
the order of Bank interest on the unpaid principal amount of this Facility C
Note from time to time outstanding at the rate or rates per annum determined
pursuant to Article II of, or as otherwise provided in, the Loan Agreement, and
with such amounts being payable on the dates set forth in Article II of, or as
otherwise provided in, the Loan Agreement.
All payments and prepayments to be made in respect of
principal, interest, or other amounts due from Borrowers under this Facility C
Note shall be payable at 12:00 noon, New Castle, Pennsylvania time, on the day
when due, without presentment, demand, protest or notice of any kind, all of
which are expressly waived, and an action therefor shall immediately accrue. All
such payments shall be made to Bank at its designated office located at 000 Xxxx
Xxxxxxxxxx Xxxxxx, Xxx Xxxxxx, Xxxxxxxxxxxx, in lawful money of the United
States of America in immediately available funds without setoff, counterclaim or
other deduction of any nature.
Except as otherwise provided in the Loan Agreement, if any
payment of principal or interest under this Facility C Note shall become due on
a day which is not a Business Day, such payment shall be made on the next
following Business Day and such extension of time shall be included in computing
interest in connection with such payment.
This Facility C Note is one of the Notes referred to in, and
is entitled to the benefits of, that certain Loan Agreement dated __________,
2000 by and between Borrowers and Bank (as such agreement may be amended,
modified or supplemented from time to time, the "Loan Agreement"), which among
other things provides for the acceleration of the maturity hereof upon the
occurrence of certain events and may provide for prepayments in certain
circumstances and upon certain terms and conditions. This Facility C Note is
secured by, and is entitled to the benefits of, the Loan Documents, as the same
may be amended, modified or supplemented from time to time. Capitalized terms
used in this Facility C Note which are defined in the Loan Agreement shall have
the meanings assigned to them therein unless otherwise defined in this Facility
C Note.
This Facility C Note shall be governed by, and shall be
construed and enforced in accordance with, the laws of the Commonwealth of
Pennsylvania without regard to the principles of the conflicts of laws thereof.
Each Borrower hereby consents to the jurisdiction and venue of the Court of
Common Pleas of Allegheny County, Pennsylvania, Court of Common Pleas of
Xxxxxxxx County, Pennsylvania and the United States District Court for the
Western District of Pennsylvania with respect to any suit arising out of or
mentioning this Facility C Note.
WARRANT OF ATTORNEY TO CONFESS JUDGMENT. EACH BORROWER HEREBY
IRREVOCABLY AUTHORIZES AND EMPOWERS THE PROTHONOTARY, ANY ATTORNEY OR ANY
40
CLERK OF ANY COURT OF RECORD, TO APPEAR FOR AND CONFESS JUDGMENT AGAINST SUCH
BORROWER, UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, FOR SUCH SUMS AS ARE DUE
AND/OR MAY BECOME DUE UNDER THIS Facility C NOTE, THE LOAN AGREEMENT AND THE
OTHER LOAN DOCUMENTS, WITH OR WITHOUT DECLARATION, WITH COSTS OF SUIT, WITHOUT
STAY OF EXECUTION AND WITH AN AMOUNT EQUAL TO TEN PERCENT (10%) OF THE AMOUNT OF
SUCH JUDGMENT, BUT NOT LESS THAN ONE THOUSAND DOLLARS ($1,000), ADDED FOR
ATTORNEYS' COLLECTION FEES. NOTWITHSTANDING THE ATTORNEY'S COMMISSION PROVIDED
FOR IN THE PRECEDING SENTENCE (WHICH IS INCLUDED IN THE WARRANT FOR PURPOSES OF
ESTABLISHING A SUM CERTAIN), THE AMOUNT OF ATTORNEYS' FEES THAT THE BANK MAY
RECOVER FROM SUCH BORROWER SHALL NOT EXCEED THE ACTUAL ATTORNEYS' FEES INCURRED
BY THE BANK. TO THE EXTENT PERMITTED BY LAW, EACH BORROWER RELEASES ALL ERRORS
IN SUCH PROCEEDINGS. IF A COPY OF THIS FACILITY C NOTE, VERIFIED BY AFFIDAVIT BY
OR ON BEHALF OF THE HOLDER OF THIS FACILITY C NOTE SHALL HAVE BEEN FILED IN SUCH
ACTION, IT SHALL NOT BE NECESSARY TO FILE THE ORIGINAL FACILITY C NOTE AS A
WARRANT OF ATTORNEY. THE AUTHORITY AND POWER TO APPEAR FOR AND CONFESS JUDGMENT
AGAINST BORROWERS SHALL NOT BE EXHAUSTED BY THE INITIAL EXERCISE THEREOF AND MAY
BE EXERCISED AS OFTEN AS THE HOLDER SHALL FIND IT NECESSARY AND DESIRABLE AND
THIS FACILITY C NOTE SHALL BE A SUFFICIENT WARRANT THEREFOR. THE HOLDER HEREOF
MAY CONFESS ONE OR MORE JUDGMENTS IN THE SAME OR DIFFERENT JURISDICTIONS FOR ALL
OR ANY PART OF THE AMOUNT OWING HEREUNDER, WITHOUT REGARD TO WHETHER JUDGMENT
HAS THERETOFORE BEEN CONFESSED ON MORE THAN ONE OCCASION FOR THE SAME AMOUNT. IN
THE EVENT ANY JUDGMENT CONFESSED AGAINST ANY BORROWER HEREUNDER IS STRICKEN OR
OPENED UPON APPLICATION BY OR ON SUCH BORROWER'S BEHALF FOR ANY REASON, HOLDER
IS HEREBY AUTHORIZED AND EMPOWERED TO AGAIN APPEAR FOR AND CONFESS JUDGMENT
AGAINST SUCH BORROWER FOR ANY PART OR ALL OF THE AMOUNTS OWING HEREUNDER, AS
PROVIDED FOR HEREIN, IF DOING SO WILL CURE ANY ERRORS OR DEFECTS IN SUCH PRIOR
PROCEEDINGS.
IN WITNESS WHEREOF, and intending to be jointly and severally
and legally bound hereby, each Borrower, by its duly authorized officers, has
executed, issued and delivered this Facility C Note in Pittsburgh, Pennsylvania
on the day and year written above.
ATTEST: PDG Environmental, Inc.
By:
------------------------------------
Secretary Title:
---------------------------------
ATTEST: Project Development Group, Inc.
By:
------------------------------------
Secretary Title:
---------------------------------
ATTEST: Enviro-Tech Abatement Services, Co.
By:
------------------------------------
Secretary Title:
---------------------------------
ATTEST: PDG, Inc.
By:
------------------------------------
Secretary Title:
---------------------------------
41
FACILITY D NOTE
$3,000,000 Pittsburgh, Pennsylvania
August 3, 2000
FOR VALUE RECEIVED, the undersigned, PDG Environmental, Inc.,
a Delaware corporation, Project Development Group, Inc., a Pennsylvania
corporation, Enviro-Tech Abatement Services, Co., a North Carolina corporation,
and PDG, Inc., a Pennsylvania corporation (collectively, "Borrowers"), hereby
jointly and severally promise to pay to the order of Sky Bank, an Ohio banking
institution, having an office at 000 Xxxx Xxxxxxxxxx Xxxxxx, Xxx Xxxxxx,
Xxxxxxxxxxxx 00000 ("Bank"), on or before the Facility D Loan Expiry Date, and
at such earlier dates as may be required by the Loan Agreement (as defined
below), the lesser of (i) the principal sum of Three Million and 00/100 Dollars
($3,000,000.00), or (ii) the aggregate unpaid principal amount of all Facility D
Loans made by Bank to Borrower pursuant to the Loan Agreement. Borrowers hereby
further jointly and severally promise to pay to the order of Bank interest on
the unpaid principal amount of this Facility D Note from time to time
outstanding at the rate or rates per annum determined pursuant to Article II of,
or as otherwise provided in, the Loan Agreement, and with such amounts being
payable on the dates set forth in Article II of, or as otherwise provided in,
the Loan Agreement.
All payments and prepayments to be made in respect of
principal, interest, or other amounts due from Borrowers under this Facility D
Note shall be payable at 12:00 noon, New Castle, Pennsylvania time, on the day
when due, without presentment, demand, protest or notice of any kind, all of
which are expressly waived, and an action therefor shall immediately accrue. All
such payments shall be made to Bank at its designated office located at 000 Xxxx
Xxxxxxxxxx Xxxxxx, Xxx Xxxxxx, Xxxxxxxxxxxx, in lawful money of the United
States of America in immediately available funds without setoff, counterclaim or
other deduction of any nature.
Except as otherwise provided in the Loan Agreement, if any
payment of principal or interest under this Facility D Note shall become due on
a day which is not a Business Day, such payment shall be made on the next
following Business Day and such extension of time shall be included in computing
interest in connection with such payment.
This Facility D Note is one of the Notes referred to in, and
is entitled to the benefits of, that certain Loan Agreement of even date
herewith by and between Borrowers and Bank (as such agreement may be amended,
modified or supplemented from time to time, the "Loan Agreement"), which among
other things provides for the acceleration of the maturity hereof upon the
occurrence of certain events and may provide for prepayments in certain
circumstances and upon certain terms and conditions. This Facility D Note is
secured by, and is entitled to the benefits of, the Loan Documents, as the same
may be amended, modified or supplemented from time to time. Capitalized terms
used in this Facility D Note which are defined in the Loan Agreement shall have
the meanings assigned to them therein unless otherwise defined in this Facility
D Note.
This Facility D Note shall be governed by, and shall be
construed and enforced in accordance with, the laws of the Commonwealth of
Pennsylvania without regard to the principles of the conflicts of laws thereof.
Each Borrower hereby consents to the jurisdiction and venue of the Court of
Common Pleas of Allegheny County, Pennsylvania, Court of Common Pleas of
Xxxxxxxx County, Pennsylvania and the United States District Court for the
Western District of Pennsylvania with respect to any suit arising out of or
mentioning this Facility D Note.
WARRANT OF ATTORNEY TO CONFESS JUDGMENT. EACH BORROWER HEREBY
IRREVOCABLY AUTHORIZES AND EMPOWERS THE PROTHONOTARY, ANY ATTORNEY OR ANY CLERK
OF ANY COURT OF RECORD, TO APPEAR FOR AND CONFESS JUDGMENT AGAINST SUCH
BORROWER, UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, FOR SUCH SUMS AS ARE DUE
AND/OR MAY BECOME DUE UNDER THIS FACILITY D NOTE, THE LOAN AGREEMENT AND THE
OTHER LOAN DOCUMENTS, WITH OR WITHOUT DECLARATION, WITH COSTS OF SUIT, WITHOUT
STAY OF EXECUTION AND WITH AN AMOUNT EQUAL TO TEN PERCENT (10%) OF THE AMOUNT OF
SUCH JUDGMENT, BUT NOT LESS THAN ONE THOUSAND DOLLARS ($1,000), ADDED FOR
ATTORNEYS' COLLECTION FEES. NOTWITHSTANDING THE ATTORNEY'S COMMISSION PROVIDED
FOR IN THE PRECEDING SENTENCE (WHICH IS INCLUDED IN THE WARRANT FOR PURPOSES OF
ESTABLISHING A SUM CERTAIN), THE AMOUNT OF ATTORNEYS' FEES THAT THE BANK MAY
RECOVER FROM SUCH BORROWER SHALL NOT EXCEED THE ACTUAL ATTORNEYS' FEES INCURRED
BY THE BANK. TO THE EXTENT PERMITTED BY
42
LAW, EACH BORROWER RELEASES ALL ERRORS IN SUCH PROCEEDINGS. IF A COPY OF THIS
FACILITY D NOTE, VERIFIED BY AFFIDAVIT BY OR ON BEHALF OF THE HOLDER OF THIS
FACILITY D NOTE SHALL HAVE BEEN FILED IN SUCH ACTION, IT SHALL NOT BE NECESSARY
TO FILE THE ORIGINAL Facility D NOTE AS A WARRANT OF ATTORNEY. THE AUTHORITY AND
POWER TO APPEAR FOR AND CONFESS JUDGMENT AGAINST BORROWERS SHALL NOT BE
EXHAUSTED BY THE INITIAL EXERCISE THEREOF AND MAY BE EXERCISED AS OFTEN AS THE
HOLDER SHALL FIND IT NECESSARY AND DESIRABLE AND THIS FACILITY D NOTE SHALL BE A
SUFFICIENT WARRANT THEREFOR. THE HOLDER HEREOF MAY CONFESS ONE OR MORE JUDGMENTS
IN THE SAME OR DIFFERENT JURISDICTIONS FOR ALL OR ANY PART OF THE AMOUNT OWING
HEREUNDER, WITHOUT REGARD TO WHETHER JUDGMENT HAS THERETOFORE BEEN CONFESSED ON
MORE THAN ONE OCCASION FOR THE SAME AMOUNT. IN THE EVENT ANY JUDGMENT CONFESSED
AGAINST ANY BORROWER HEREUNDER IS STRICKEN OR OPENED UPON APPLICATION BY OR ON
SUCH BORROWER'S BEHALF FOR ANY REASON, HOLDER IS HEREBY AUTHORIZED AND EMPOWERED
TO AGAIN APPEAR FOR AND CONFESS JUDGMENT AGAINST SUCH BORROWER FOR ANY PART OR
ALL OF THE AMOUNTS OWING HEREUNDER, AS PROVIDED FOR HEREIN, IF DOING SO WILL
CURE ANY ERRORS OR DEFECTS IN SUCH PRIOR PROCEEDINGS.
IN WITNESS WHEREOF, and intending to be jointly and severally
and legally bound hereby, each Borrower, by its duly authorized officers, has
executed, issued and delivered this Facility D Note in Pittsburgh, Pennsylvania
on the day and year written above.
ATTEST: PDG Environmental, Inc.
By: Xxxx X. Xxxxx
--------------------------------
Secretary Title: CEO
-----------------------------
ATTEST: Project Development Group, Inc.
By: Xxxx X. Xxxxx
--------------------------------
Secretary Title: CEO
-----------------------------
ATTEST: Enviro-Tech Abatement Services, Co.
By: Xxxx X. Xxxxx
--------------------------------
Secretary Title: CEO
-----------------------------
ATTEST: PDG, Inc.
By: Xxxx X. Xxxxx
--------------------------------
Secretary Title: CEO
-----------------------------
