EXHIBIT 10.01
LOAN AGREEMENT AND ASSOCIATED DOCUMENTS DATED JULY 10, 1998
WITH PREMIER BANK, FOR A $300,000 LINE OF CREDIT
This instrument was prepared by:
Premier Bank
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(Name)
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
----------------------------------- [Premier Bank Logo]
(Address)
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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to whom the recorded copy of this
instrument is to be returned.
MORTGAGE
THIS MORTGAGE MADE THIS 10th day of July, 1998, is between DYNASIL
CORPORATION OF AMERICA, INC. AND SUBSIDIARY, with an address of ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ (each jointly and severally, if more than one person, and
hereinafter referred to as "Mortgagor") and Premier Bank, the Mortgagee ("Bank")
with a mailing address of ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇.
In consideration for and to secure payment and performance to Bank of all of the
Obligations, as that term is defined in subparagraphs (a) through (d) below,
Mortgagor has granted, bargained, sold, conveyed, released, assigned,
transferred, pledged, mortgaged and confirmed, and by these presents does hereby
grant, bargain, sell, convey, release, assign, transfer, pledge, mortgage and
confirm unto Bank, its successors and assigns, forever: ALL THAT CERTAIN real
estate situated in the County of Camden, State of New Jersey, known and
designated as ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇, conveyed to Mortgagor by Deed
dated 04/18, 1966, duly recorded in the office for recording of deeds in said
County on 04/21, 1966 at Deed Book 2884, Page 54, as the Premises are therein
described and, necessary, as more particularly described on Exhibit "A" attached
hereto and made a part hereof (hereinafter the "Premises")
Lot & Block 3, 4 & 1910.
THE PREMISES SHALL include all right, title and interest of Mortgagor in and to
all present and future structures, buildings and improvements located thereon,
together with all common areas, streets, lanes, alleys, passageways, passages,
ways, water courses, strips and gores of land, easements, estates, rights,
titles, interests, liberties, privileges, tenements, hereditaments and
appurtenances, whatsoever therunto belonging to or in any way made appurtenant
thereto; all leases and subleases of all or any part of the Premises and rights
of payment thereunder; the air space above and right to use the air space above,
and the drainage, crops, timber, agricultural, horticultural, mineral, water,
oil and gas rights with respect to the Premises, at law or in equity, all
machinery, apparatus, equipment, furniture, fixtures, including without
limitation, trade fixtures, goods, appliances and other property of every kind,
nature and description whatsoever, now or hereafter located in, on or about, or
attached to or used in connection with, the Premises, together with any and all
replacements and substitutions thereof and all accessories, parts or accessions
thereto now or hereafter owned by the Mortgagor or in which Mortgagor has or may
obtain any interest, and all awards, damages, payments and/or claims arising out
of any eminent domain or condemnation proceeding, damage or injury to any part
of the Premises and/or any buildings, structures, or improvements thereon (the
Premises, together with all of the foregoing, is hereinafter referred to as the
"Mortgaged Property");
TO HAVE AND TO HOLD the Mortgaged Property hereby conveyed or mentioned and
intended so to be, unto Bank, to its own use, forever.
PROVIDED, ALWAYS, that this instrument is upon the express condition that, if
Mortgagor promptly satisfied all of the Obligations, as hereinafter defined, in
accordance with the provisions of the Loan Documents, as hereinafter defined,
and this Mortgage, at the times and in the manner specified, without deduction,
fraud or delay, and if all the agreements, conditions, convenants, provisions
and stipulations contained therein and in this Mortgage and in the Loan
Documents are fully performed and complied with then this Mortgage and the
estate hereby granted shall cease, determine and become void.
As used in this Mortgage, "Obligations" means any or all of the following:
(a) The indebtedness, liabilities and obligations of Mortgagor to Bank,
including all present and future advances, arising under a certain
Note dated ___________________, 19___, in the original principal
amount of THREE HUNDRED THOUSAND DOLLARS AND 00/100 Dollars
($300,000.00), plus interest, costs and charges thereon, and/or any
amendment, modification, refinancing, renewal, substitution or
extension of the Note (hereinafter the "Note"), and all other
liabilities of Mortgagor to Bank described in any agreements,
documents and instruments executed in connection therewith
(hereinafter collectively referred to as the "Loan Documents");
(b) All other existing and future indebtedness, liabilities and
obligations of Mortgagor to Bank whether sole, joint or several,
matured or unmatured, direct or indirect, absolute or contingent, or
any nature whatsoever, and out of whatever transactions arising,
including, without limitation, any debt, liability or obligation owing
from Mortgagor to others which Bank may obtain by assignment or
otherwise, excepting only any indebtedness constituting "Consumer
Credit" as that term is defined in Regulation Z, 12 C.F.R. section
226.1 et seq.;
(c) The costs of curing any Event of Default set forth in this Mortgage or
in the Loan Documents which the Bank elects to cure; and
(d) The reasonable costs and expenses, including attorneys' fees incurred
by Bank in enforcing any
of the obligations of Mortgagor specified in (a), (b) and (c)
above.
MORTGAGOR REPRESENTS, COVENANTS AND WARRANTS to and with Bank that, until the
Obligations secured hereby are fully paid and performed:
1. Payment and Performance. Mortgagor shall pay to Bank in accordance
with the terms of the Note, this Mortgage and the other Loan
Documents, the principal, interest and other sums therein and herein
set forth and shall perform and comply with all the agreements,
conditions, covenants, provisions and stipulations of the Note, this
Mortgage and the Loan Documents.
2. Warranty of Title. Mortgagor warrants that Mortgagor possesses good
and marketable fee simple title to the Premises, and has all power and
authority to mortgage the Mortgaged Property to Bank and to grant a
security interest therein in the manner set forth herein.
3. Maintenance of Mortgaged Property. Mortgagor shall keep and maintain
or cause to be kept and maintained the Mortgaged Property, including
all buildings and improvements now or at any time hereafter erected on
the Premises and the sidewalks and curbs abutting them, in good order
and condition and repair and shall abstain from and shall not permit
the commission of waste of, in or about the Mortgaged Property.
4. Insurance. Mortgagor shall keep the Mortgaged Property continuously
insured against fire and such other hazards in such amounts as may be
required by Bank from time to time. All policies and insurance shall
be issued by companies acceptable to Bank, and shall contain a
standard mortgagee clause, in favor of Bank, and shall provide for at
least thirty (30) days prior written notice of cancellation or
reduction in coverage to Bank, all of which policies are hereby
assigned to Bank as additional security for the Obligations. If Bank
shall become the owner of the Mortgaged Property or any part thereof
by foreclosure or otherwise, such policies, including all right, title
and interest of Mortgagor thereunder, shall become the property of
Bank. At least thirty (30) days prior to the expiration date of any
insurance policy, Mortgagor shall deliver to Bank satisfactory
evidence of the renewal of such insurance and the payment of all
premiums therefor. In the event of any loss, Mortgagor will give
immediate notice thereof to Bank and Bank may make proof of loss on
behalf of Mortgagor. Each insurance company concerned is hereby
authorized and directed to make payments under any such policies
directly to Bank, instead of Bank and Mortgagor jointly, and Mortgagor
hereby irrevocably appoints Bank as Mortgagor's attorney-in-fact to
endorse in Mortgagor's name any checks or drafts issued thereon. Bank
shall have the right to retain and apply the proceeds of any such
insurance, at its reasonable election, to reduction of the
Obligations, or to restoration and repair of the property damaged.
5. Taxes and Other Charges. Mortgagor shall pay when due and before
interest or penalties shall accrue thereon, all taxes, charges,
assessments and other governmental charges of any kind whatsoever
including electricity, water and sewer rents, levied or assessed
against the Mortgaged Property and will deliver receipts therefore to
Bank upon request, and shall pay when due all amounts secured by any
prior lien on the Mortgaged Property.
6. Inspection. Bank and any persons authorized by Bank shall have the
right at any time, upon reasonable notice to Mortgagor, to enter the
Premises at a reasonable hour to inspect and photograph its condition
and state of repair.
7. Declaration of No Set-Off. Within one (1) week after request to do so
by Bank, Mortgagor shall certify to Bank or to any assignee or
proposed assignee of this Mortgage, in writing duly acknowledged, the
amount of principal, interest and other charges then owing on the
Obligations and on any obligations secured by prior liens upon the
Mortgaged Property, if any, and whether there are any set-offs or
defenses against them.
8. Required Notices. Mortgagor shall notify Bank promptly of the
occurrence of any of the following:
(a) a fire or other casualty causing damage to all or any part of the
Mortgaged Property;
(b) receipt of notice of eminent domain proceedings or condemnation
of all or any part of the Mortgaged Property and Mortgagor hereby
grants Bank an irrevocable power of attorney to appear and act
for and on behalf of Mortgagor in any and all such proceedings;
(c) receipt of notice from any governmental authority relating to the
structure, use or occupancy of the Mortgaged Property or any real
property adjacent to the Mortgaged Property;
(d) a change in the occupancy of the Mortgaged Property;
(e) receipt of any notice from the holder of any lien or security
interest in all or any part of the Mortgaged Property; or
(f) commencement of any litigation affecting the Mortgaged Property.
9. Mortgage and Liens. Without the prior written consent of Bank,
Mortgagor will not create or permit to be created or filed against the
Mortgaged Property, any mortgage lien or other lien or security
interest superior or inferior to the lien of this Mortgage.
10. No Transfer. Without the prior written consent of Bank, Mortgagor will
not cause nor permit any transfer of legal or equitable title to,
beneficial interest in, or any estate or interest in the Mortgaged
Property, or any part thereof, voluntarily or by operation of law,
whether by sale, exchange, lease, conveyance, merger, consolidation,
the granting of any lien or security interest or otherwise, or any
agreement to do any of the foregoing.
11. Events of default. Any one or more of the following events shall
constitute an Event of Default hereunder:
(a) Failure of Mortgagor to make any payment of principal or interest
or any other sum promptly when due on any of the Obligations;
(b) Mortgagor's nonperformance of or noncompliance in any material
respect with any other agree-
ments, conditions, covenants, provisions or stipulations
contained in the Note, this Mortgage or any of the Loan
Documents;
(c) Any signature, statement, representation or warranty made in the
Note, the Loan Documents or this Mortgage, or in any financial
statement, certificate, application, request or other document
furnished to Bank by Mortgagor at any time prior to, now or
hereafter, is not true and correct in any material respect when
made or delivered;
(d) The occurrence of any default under the Note or any of the Loan
Documents;
(e) The commencement by or against any Mortgagor of any proceeding
under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, the making by any Mortgagor of any
general assignment for the benefit of creditors, the failure of
any Mortgagor generally to pay debts as such debts become due, or
the taking of action by any Mortgagor in furtherance of any of
the foregoing; or
(f) The transfer or sale of any part of the Mortgaged Property or any
interest therein, without the Bank's prior written consent.
12. Remedies of Bank.
(c) Upon the occurrence of any Event of Default, the entire unpaid
balance of the Obligations, including interest as has accrued and
as may thereafter accrue thereon, and all other sums secured by
this Mortgage, shall become immediately due and payable, at the
option of Bank, without notice to or demand upon Mortgagor or any
other person; and thereupon, in addition to all other rights or
remedies available under the Note or any of the Loan Documents,
or at law or in equity, Bank may:
(i) forthwith bring an action of mortgage foreclosure hereon,
and may proceed to judgment and execution to recover the
balance due on the Obligations and any other sums that may
be due thereunder, including attorneys' fees, costs of suit
and costs of sale to the extent, if any, provided in the
Obligations and permitted by law; and
(ii) enter into possession of the Premises, with or without legal
action, lease the same, collect all rents and profits
therefrom and, after deducting all costs of collection and
administrative expenses, apply the net rents and profits to
the payment of taxes and other necessary maintenance and
operational costs (including agents' fees and attorneys'
fees) or on account of the Obligations, in such order and in
such amounts as Bank in its sole discretion may elect, and
Bank shall be liable to account only for rents and profits
actually received by Bank; and
(b) Any real estate sold hereunder or on any other judicial
proceedings, may be sold in one or more parcels, in such order
and manner as Bank, in its sold discretion, may elect.
13. Rights and Remedies Cumulative. The rights and remedies of Bank as
provided in the Note, this Mortgage and the Loan Documents shall be
cumulative and concurrent, may be pursued separately, successively or
together against Mortgagor, against the Mortgaged Property, or any
other person liable hereunder or thereunder, at the sole discretion of
Bank and may be exercised as often as occasion therefor shall arise.
The failure of Bank to exercise any right or remedy on any one or more
occasions shall in no event be construed as a waiver or release
thereof.
14. Mortgagor's Waivers. Mortgagor hereby waives and releases to the
extent permitted by law:
(a) All errors, defects and imperfections in any proceeding
instituted by Bank under the Note or this Mortgage, and/or Loan
Documents;
(b) All benefits that might accrue to Mortgagor by virtue of any
present or future law exempting the Mortgaged Property, or any
part of the proceeds arising from any sale thereof, from
attachment levy or sale on execution, or providing for any stay
of execution, exemption from civil process or extension of time
for payment; and
(c) Unless specifically required herein, all notices of Mortgagor's
default or of Bank's election to exercise, or Bank's actual
exercise of any option under the Note or this Mortgage.
15. Future Advances. Without limiting any other provisions of this
Mortgage, this Mortgage shall also secure additional loans or advances
hereafter made by Bank to or on behalf of Mortgagor. Neither contained
herein shall impose any obligation on the part of Bank to make any
such additional loan(s) to Mortgagor.
16. Communications. All communications required or permitted to be given
under this Mortgage, to be effective, shall be in writing, and shall
be hand delivered or sent by registered mail, postage prepaid, return
receipt requested, addressed to the addresses set forth above or at
such other address as the addressee may hereafter designate in writing
in the manner herein provided.
17. Severability. If for any reason whatsoever any part of this Mortgage
shall be declared void or invalid, by operation of law or otherwise,
in any jurisdiction, then as to such jurisdiction only, such part
shall be void and the remaining provisions of this Mortgage shall
remain in all other respects valid and enforceable, and such
invalidity shall not invalidate or render unenforceable such
provision in any other jurisdiction.
18. Binding Effect--Amendment. This Mortgage is binding upon and shall
inure to the benefit of Mortgagor and Bank, and their respective
successors and assigns. This Mortgage may not be changed or amended
except by agreement in writing signed by the party against whom
enforcement of the change or amendment is sought.
19. Applicable Law. The validity, construction, meaning and effect of the
provisions of this Mortgage shall be governed and determined by and
under the laws of the State of New Jersey.
IN WITNESS WHEREOF, the Mortgagor has hereunto set his hand and seal the day and
year first above written. This instrument is intended to constitute an
instrument under seal.
(INDIVIDUALS SIGN BELOW) (CORPORATIONS OR PARTNERSHIPS SIGN BELOW)
Dynasil Corporation of America, Inc. and Subsidiary
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Name Name of Corp. or Partnership
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
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Name ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. Title President
By: /s/ ▇▇▇▇ ▇▇▇▇
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Name ▇▇▇▇ ▇▇▇▇, CFO Title
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Name Title
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ATTEST/WITNESS Affix Corp. Seal
The undersigned, being authorized to do so, hereby certifies that the precise
address of the within name Mortgagee is ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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S.M.H.
The undersigned hereby acknowledges receipt without cost of a true and correct
copy of the within instrument on behalf of Mortgagor.
By: /s/ ▇▇▇▇ ▇▇▇▇
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J.K.
ACKNOWLEDGMENT
STATE OF NEW JERSEY :
: SS
COUNTY OF :
On _______________________, 19______, before me, the undersigned, personally
appeared _______________________________________________________________________
known to me or satisfactorily proven to me to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged:
/ / that he/she/they executed the same for the purposes therein contained and
desire that it be recorded as such; or
/ / that they are the President/Vice President and the Treasurer/Assistant
Treasurer or Secretary/Assistant Secretary or General Partner of the
corporation/partnership named in the foregoing instrument and that, in such
capacities, being authorized so to do, executed the same for the purposes
therein contained by signing the name and affixing the seal of the said
corporation/partnership by themselves as such officers and desire that it
be recorded as such.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
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Notary Public
My Commission Expires:
MB4-8:88
PREMIER BANK SECURITY AGREEMENT
(all personal property)
Doylestown, Pennsylvania
July 10, 1998
In consideration of any loans, extensions of credit or other financial
accommodations made or extended by PREMIER BANK, (hereinafter called "Bank"),
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged and intending to be legally bound, the undersigned
and the Bank hereby agree as follows:
1. Definitions. (A) The tern "Liabilities" shall include any and all
indebtedness, obligations and liabilities of every kind and description of the
undersigned to the Bank now or hereafter existing, arising directly between the
undersigned and the Bank or acquired outright, conditionally or as collateral
security from another by the Bank, absolute or contingent, primary or secondary,
joint and/or several, secured or unsecured, due or to become due, contractual or
tortious, liquidated or unliquidated, arising by operation of law or otherwise,
direct or indirect including, without limiting the generality of the foregoing,
indebtedness, obligations and liabilities to the Bank of the undersigned as a
member of any partnership, syndicate, association or other group, and whether
incurred by the undersigned as principal, surety, endorser, guarantor,
accommodation party or otherwise.
(B) The term "Collateral" shall mean, whether now owned or hereafter
acquired, each of the following:
(1) All of undersigned's tangible personal property, wheresoever
located, leased or furnished, or held by the undersigned for
sale or for lease or to be furnished under contracts of sale
or service, and all raw materials, components, tools, work in
process and materials used, produced or consumed in the
undersigned's business as now or hereafter conducted,
including all finished merchandise and all other tangible
personal property (i) held by others for sale on consignment
from the undersigned, or sold by the undersigned on a sale-or-
return, on-memorandum or on-approval basis, (ii) returned to
the undersigned by a purchaser following a sale by the
undersigned, or (iii) represented by a document of title; all
equipment, accessories, accessions and parts at any time
attached or added to items of inventory or used in connection
therewith, including packing and shipping materials, all of
which shall herein be deemed parts of the undersigned's
inventory.
(2) All accounts, accounts receivable, contract rights, all other
forms of obligations owing to the undersigned, chattel paper
and general intangibles (including, without limitation, all
existing and future rights, claims, benefits and proceeds
under insurance policies, customer lists, choses in action,
books, records, patents and patent applications, copyrights,
trademarks, tradenames, blueprints and plans, trade secrets,
sales contracts, licenses, formulas, tax and other types of
refunds, tax attributes including carryovers and carrybacks,
returned and unearned insurance premiums, claims, product
designs, drawings and technical data);
(3) All the specific items or units of equipment identified in any
exhibit attached hereto and made a part hereof, every other
item or unit of equipment or fixtures of the undersigned or in
which the undersigned may have any rights, whether now
existing or owned or hereafter created or acquired and
wheresoever located, all accessions, software, parts,
programs, accessories, licenses, patent rights, franchises,
substitutions and replacements and additional equipment now or
hereafter affixed to or used in connection with any of such
equipment, and all guarantees, warranties and other
undertakings of third parties (including insurers) held by or
otherwise running in favor of the undersigned in respect of
any of the foregoing;
(4) All instruments, documents of title, policies and certificates
of insurance, securities, bank deposits, deposit accounts,
checking accounts, cash and currency;
(5) All proceeds (including insurance proceeds) and products and
all accessions, substitutions and replacements of and to any
of the foregoing; and
(6) All ledger sheets, files, books, records, documents and
instruments (including, without limitation, computer programs,
tapes and related electronic data processing software)
("Books and Records") relating to any of the foregoing.
2. Security Interest. In order to secure the due and punctual payment
and performance of the Liabilities, the undersigned hereby grants to the Bank a
continuing security interest in, and a general lien upon and/or right of set-off
against, (a) the Collateral and (b) all property of the undersigned now or
hereafter in possession of the Bank or any affiliate of the Bank in any capacity
whatsoever, including but not limited to, any balance or share of any deposit,
trust or agency account, and the proceeds of such property may be applied at any
time and without notice to the Liabilities. The security interests granted
pursuant hereto are granted as security only and shall not subject the Bank to,
or transfer or in any way affect or modify, any obligation or liability of the
undersigned with respect to any of the Collateral or any transaction which gave
use thereto.
3. Further Assurances; Filings. At any time and from time to time, upon
the demand of the Bank, the undersigned will: (1) deliver and pledge to the
Bank, endorsed and/or accompanied by such instruments of assignment and transfer
in such form and substance as the Bank may request, any and all instruments,
documents and/or chattel paper as the Bank may specify in its demand; (2) give,
execute, deliver, file and/or record any notice, statement, instrument,
document, agreement or other papers that may be necessary or desirable, or that
the bank may request, in order to create, preserve, perfect, or validate any
security interest granted pursuant hereto or to enable the Bank to exercise and
enforce its rights hereunder or with respect to such security interest; (3) keep
and stamp or otherwise ▇▇▇▇ any and all documents and chattel paper and its
individual books and records relating to inventory, accounts and contractual
rights in such manner as the Bank may require; (4) permit representatives of the
Bank at any time to inspect its inventory and to inspect and make abstracts from
the undersigned's Books and Records pertaining to any of the Collateral. The
undersigned hereby irrevocably makes, constitutes and appoints the Bank (and any
of the Bank's officers, employees or agents designated by the Bank) as the
Bank's true and lawful attorney with the power (1) upon the occurrence of an
Event of Default hereunder, to notify the post office authorities to change the
address for delivery of the undersigned's mail to an address designated by the
Bank and to receive, open and distribute all mail addressed to the undersigned,
retaining all mail relating to the Collateral and forwarding all other mail to
the undersigned; (2) at any time and from time to time, to send notices to all
account debtors of the undersigned directing them to make full payment of their
obligations to the undersigned to the Bank; and (3) to sign and file one or more
financing statements under the Uniform Commercial Code naming the undersigned as
debtor and the Bank as secured party and indicating therein the types or
describing the items of Collateral herein specified. If the Bank considers such
necessary or desirable, the Bank may file a carbon, photographic or other
reproduction of this Agreement or any financing statement executed pursuant
hereto as a financing statement in any jurisdiction as permitting. Without the
prior written consent of the Bank the undersigned will not file or authorize or
permit to be filed in any jurisdiction any such financing or like statement in
which the Bank is not named as the sole secured party.
With respect to the Collateral, or any part thereof, which at any time
shall come into the possession or custody or under the control of the Bank or
any of its agents, associates or correspondents, for any purpose, the right is
expressly granted to the Bank, at its discretion, to transfer to or register in
the name of itself or its nominee any of the Collateral, and whether or not so
transferred or registered, to receive the income and dividends thereon,
including stock dividends and rights to subscribe, and to hold the same as a
part of the Collateral and/or apply the same as hereinafter provided; to
exchange any of the Collateral for other property upon the reorganization,
recapitalization or other readjustment of the undersigned and in connection
therewith to deposit any of the Collateral with any nominee or depository upon
such terms as it may determine; upon occurrence of an Event of Default hereunder
to vote the Collateral so transferred or registered and to exercise or cause its
nominee to exercise all or any powers with respect thereto with the same force
and effect as an absolute owner thereof; all without notice and without
liability except to account for property actually received by it.
The bank shall be deemed to have possession of any of the Collateral in
transit to or set apart for it or any of its agents, associates or
correspondents.
4. Representations and Warranties. The undersigned represents and
warrants to the Bank, which representations and warranties shall be continuing
representations and warranties until the later of the occurrence of all of the
undersigned's Liabilities being satisfied in full or the Bank's no longer having
any duties to the undersigned, as follows:
(A) The sole place of business or chief executive office of the
undersigned (if the undersigned has more than one place of
business) or residence (if the undersigned has no place of
business) is located at the address set forth on the signature
page hereof. All other places of business of the undersigned or
other locations of Collateral, if any, are listed on the
signature page hereof.
(B) If a corporation, the undersigned is a corporation duly
organized and existing in good standing under the laws of its
jurisdiction of incorporation and qualified and licensed to do
business in those jurisdictions where the conduct of business
or ownership of properties requires such qualification; if a
partnership, it is duly organized and existing under the laws
of its jurisdiction of organization; and the undersigned has
the power and authority to own the Collateral, to enter into
and perform this Agreement and any other documents or
instruments executed in connection herewith, and to incur the
Liabilities.
(C) This Agreement and any other documents or instruments executed
in connection herewith have been duly authorized and/or
executed and delivered and constitute the legal, valid and
binding obligations of the undersigned, enforceable against the
undersigned in accordance with their terms; and this Agreement
and any other documents or instruments executed in connection
herewith do not and will not violate any law or the charter or
organizational documents or by-laws of the undersigned or any
other agreement or instrument to which the undersigned or any
of its property may be bound or subject.
(D) No consent or approval of any debt or equity holder of the
undersigned or of any public authority is necessary for the
validity of this Agreement or any document or instrument
executed in connection herewith.
(E) The undersigned is, or to the extent that certain of the
Collateral is to be acquired after the date hereof, will be,
the owner of the Collateral free from any adverse lien,
security interest or encumbrance.
(F) The undersigned has filed all federal, state and local tax
returns and other reports required to be filed and has paid or
made adequate provision for all such taxes, assessments and
other governmental charges.
(G) No Reportable Event (as such is defined in the Employee Income
Security Act of 1974, as amended ["ERISA"]) has occurred with
respect to, nor has there been terminated any plan subject to
ERISA and maintained for any employees of the undersigned or of
any member of the control group (as defined in ERISA) of which
the undersigned is a member.
(H) No representation, warranty or statement made by the
undersigned herein or in any certificate or document furnished
or to be furnished pursuant hereto contains or will contain any
untrue statement of a material fact or omits or will omit any
material fact necessary to make it not misleading.
5. Convenants. The undersigned hereby convenants and agrees as follows:
(A) The undersigned will defend the Collateral against all claims
and demands of all persons at any time claiming any interest
therein.
(B) The undersigned will provide the Bank with prompt written
notice of (i) any change in the chief executive office of the
undersigned or the office where the undersigned maintains books
and records pertaining to the Collateral, and (ii) the location
or movement of any Collateral to or at an address other than
one set forth on the signature page hereof, all such notices to
be received by the Bank at least 30 days prior to any such
change.
(C) The undersigned will promptly pay any and all taxes,
assessments and governmental charges upon the Collateral on the
date such taxes, assessments, and governmental charges are due
and payable, except to the extent that such taxes, assessments
and charges shall be contested in good faith by the undersigned
and adequate reserves are maintained therefor. Upon request of
the Bank, the undersigned shall deliver such receipts and
other proofs of payment as the Bank may desire.
(D) The undersigned will immediately notify the Bank of: (i) any
material adverse changes in its business, property or financial
condition; (ii) the occurrence of an Event of Default under
this Agreement; (iii) any seizure of the Collateral or any
claims of third parties to the Collateral; and (iv) the
institution of any litigation, governmental investigation or
administrative proceedings against or materially affecting the
undersigned.
(E) The undersigned will have and maintain insurance at all times
with respect to the Collateral against risks of fire (including
so-called extended coverage) and theft, and such other risks,
including business interruption, as the Bank may reasonably
require containing such terms, in such form and amounts, for
such periods and written by such companies as may be reasonably
satisfactory to the Bank, such insurance to be payable to the
Bank and the undersigned as their interest may appear. All
policies of insurance shall provide for not less than thirty
(30) days written minimum cancellation notice to the Bank, and
the undersigned shall furnish the Bank with certificates or
other evidence satisfactory to the Bank of compliance with the
foregoing insurance provisions.
(F) The undersigned will not sell or offer to sell or otherwise
assign, transfer or dispose of the Collateral or any interest
therein, without the written consent of the Bank; provided,
however, unless the Bank notifies the undersigned otherwise,
the undersigned may sell its inventory in the ordinary course
of its business.
(G) The undersigned will keep the Collateral free from any lien,
security interest or encumbrance except in favor of the Bank
and in good order and repair, reasonable wear and tear
excepted, and will not waste or destroy the Collateral or any
part thereof. The undersigned shall maintain its Books and
Records in accordance with generally accepted accounting
principles consistently applied, being the same accounting
principles which the undersigned used in preparation of the
last financial statements submitted to the Bank prior to the
execution of this Agreement.
(H) The undersigned will not use the Collateral in violation of any
law, statute, regulation or ordinance.
6. General Authority. The Bank at its discretion may, whether or not
any of the Liabilities be due, in its name or in the name of the undersigned or
otherwise, demand, ▇▇▇ for, collect or receive any money or property at any time
payable or receivable on account of or in exchange for, or make any compromise
or settlement deemed desirable with respect to, any of the Collateral, but shall
be under no obligation so to do, or the Bank may extend the time of payment,
arrange for payment in installments, or otherwise modify the terms of, or
release, any of the Collateral, without thereby incurring responsibility to, or
discharging or otherwise affecting any liability of, the undersigned or of any
other obligated party. The undersigned hereby irrevocably appoints the Bank its
true and lawful attorney, with full power of substitution, in the name of the
undersigned, the Bank or otherwise, for the sole use and benefit of the Bank at
the undersigned's expense, to exercise the foregoing powers to the extent
permitted by law. The undersigned hereby ratifies all acts of the attorney.
Neither the Bank nor its attorney will be liable for any acts or omissions or
for any error of judgment or mistake of fact or law. This power, being coupled
with an interest, is irrevocable until the Liabilities have been fully
satisfied. The Bank shall not be required to take any steps necessary to
preserve any rights against prior parties to any of the Collateral.
7. Event of Default and Remedies. It shall be an event of default under
this Agreement upon the occurrence of any of the following events (an "Event of
Default"); if any sum payable upon any of the Liabilities shall not be paid when
due; or if the undersigned shall default in the performance of any of its
agreements herein or in any instrument or document delivered pursuant hereto; or
if the undersigned or any maker, drawer, acceptor, endorser, guarantor, surety,
accommodation party or other person liable upon or for any of the Liabilities or
Collateral ("Obligor") shall default in the performance of any Obligor's
agreement with the Bank, die, dissolve, or become insolvent (however such
insolvency may be evidenced), if a procedure or remedy supplementary to or in
enforcement of judgment shall be resorted to or commenced against, or with
respect to any property of, the undersigned, or any co-partnership or Obligor,
or if a petition in bankruptcy or for any relief under any law relating to the
relief of debtors, readjustment of indebtedness, reorganization, composition or
extension shall be filed, or any proceeding shall be instituted under any such
law, by or against the undersigned or any co-partnership or Obligor; or if any
governmental authority or any court at the instance thereof shall take
possession of any substantial part of the property of, or assume control over
the affairs or operations of, or a receiver shall be appointed for, or for any
substantial part of the property of, or a judgment, writ, or order of attachment
or garnishment shall be issued or made against any of the property of, the
undersigned or any co-partnership or Obligor, or if any indebtedness of the
undersigned or of any co-partnership or Obligor shall become due and payable by
acceleration of maturity thereof; or if the undersigned (if a corporation) or
any Obligor shall be dissolved or be a party to any merger or consolidation
without the written consent of the Bank.
Upon the occurrence of an Event of Default hereunder, unless and to the
extent that the Bank shall otherwise elect, all of the Liabilities shall become
and be due and payable forthwith. Upon the occurrence of any Event of Default
hereunder or in connection with any of the Liabilities (whether such default be
that of the undersigned or of any Obligor), the undersigned shall, at the
request of the Bank, assemble the Collateral at such place or places as the Bank
designates in its request. The Bank shall have the rights and remedies with
respect to the Collateral of a secured party under the Uniform Commercial Code
(whether or not the Code is in effect in the jurisdiction where the rights and
remedies are asserted). In addition, with respect to the Collateral, or any part
thereof, which shall then be or shall thereafter come into the possession or
custody of the Bank or any of its agents, associates or correspondents, the Bank
may sell or cause to be sold, leased or otherwise disposed of, in one or more
sales or parcels, at such price as the Bank may deem best, and for cash or on
credit or for future delivery, without assumption of any credit risk, all or any
of the Collateral, at any broker's board or a public or private sale, without
demand of performance or notice of intention to sell or of time or place of sale
(except such notice as is required by applicable statute and cannot be waived),
and the Bank or anyone else may be the purchaser of any or all of the Collateral
so sold and thereafter hold the same absolutely, free from any claim or right of
whatsoever kind, including any equity of redemption, of the undersigned, any
such demand, notice or right and equity being hereby expressly waived and
released. The undersigned will pay to the Bank all expenses (including expenses
for legal services of every kind) of, or incidental to, the enforcement of any
of the provisions hereof or of any of the Liabilities, or any actual or
attempted sale, or any exchange, enforcement, collection, compromise or
settlement of any of the Collateral or receipt of the proceeds thereof, and for
the care of the Collateral and defending or asserting the rights and claims of
the Bank in respect thereof, by litigation or otherwise, including expense of
insurance; and all such expenses shall be Liabilities within the terms of this
Agreement. The Bank, at any time, at its option, may apply the net cash receipts
from the Collateral to the payment of principal and/or interest on any of the
Liabilities, whether or not then due. Notwithstanding that the Bank, whether in
its own behalf and/or in behalf of another or others, may continue to hold
Collateral and regardless of the value thereof, the undersigned shall be and
remain liable for the payment in full, principal and interest, of any balance of
the Liabilities and expenses at any time unpaid.
The proceeds of any Collateral received by the Bank at any time before
or after an Event of Default, whether from a sale or other disposition of
Collateral or otherwise, or the Collateral itself, may be applied to the payment
in full or in part of such of the Liabilities, and in such order and manner as
the Bank may elect. The undersigned, to the extent of its rights in the
Collateral, waives and releases any rights to require the Bank to collect any or
all of the Liabilities from any of the Collateral under any theory of
marshalling of assets.
8. Right of Set-Off. In furtherance and not in limitation of any
provisions herein contained and in addition to the grant of security interest in
the same Collateral, the undersigned hereby agrees that any and all deposits or
other sums at any time claimed by or due from the Bank to the undersigned shall
at all times constitute security for the Liabilities and the Bank may exercise
any right of set-off against such deposits or other sums as may accrue or exist
under applicable law.
9. Miscellaneous.
(A) No failure on the part of the Bank to exercise, and no delay in
exercising, and no course of dealing with respect to, any
right, power or remedy under this Agreement shall operate as a
waiver thereof; nor shall any single or partial exercise by the
Bank of any right, power or remedy under this Agreement
preclude any other right, power or remedy. The remedies in this
Agreement are cumulative and are not exclusive of any other
remedies provided by law. The undersigned hereby waives
presentment, notice of dishonor and protest of all instruments
included in or evidencing the Liabilities or the Collateral of
any and all other notices and demands whatsoever, whether or
not relating to such instruments. The undersigned also waives
trial by jury in any action on or with respect to this
Agreement.
(B) The Bank may assign, transfer and/or deliver to any transferee
of any of the Liabilities any or all of the Collateral and
thereafter shall be fully discharged from all responsibility
with respect to the Collateral so assigned, transferred and/or
delivered. Such transferee shall be vested with all the powers
and rights of the Bank hereunder with respect to such
Collateral, but the Bank shall retain all rights and powers
hereby given with respect to any of the Collateral not so
assigned, transferred or delivered.
(C) No provisions hereof shall be modified or limited except by a
written instrument expressly referring thereto and to the
provisions so modified or limited.
(D) The undersigned, if more than one, shall be jointly and
severally liable hereunder and all provisions hereof regarding
the Liabilities or Collateral of the undersigned shall apply to
any Liability or any Collateral of any or all of them.
(E) This Agreement shall be binding upon the heirs, executors,
administrators, assigns or successors of the undersigned; shall
constitute a continuing agreement, applying to all future as
well as existing transactions, whether or not of the character
contemplated at the date of this Agreement, and if all
transactions between the Bank and the undersigned shall be at
any time closed, shall be equally applicable to any new
transactions thereafter; and shall be construed according to
the laws of the Commonwealth of Pennsylvania. This Agreement
and the transactions contemplated hereby constitute commercial
activities of the undersigned. The undersigned expressly
submits and consents in advance to the jurisdiction of courts
located in the Commonwealth of Pennsylvania in any action or
proceeding commenced in such court, hereby waiving personal
service of the summons and complaint, or other process or
papers issued therein agreeing that service of such summons and
complaint or other process may be made by registered mail or
certified mail addressed to the undersigned at the address set
forth on the signature page hereof or other address used by the
undersigned in its business or by any other means or service
allowed by law. The exclusive choice of forum set forth in this
Agreement shall not be deemed to preclude the enforcement of
any judgment obtained in such forum or the taking of any action
under this Agreement to enforce same in any appropriate
jurisdiction. Each provision of this Agreement shall be
severable from every other provision of this Agreement for the
purpose of determining the legal enforceability of any specific
provision. All prior agreements, understandings,
representations, warranties and negotiations, if any, are
merged into this Agreement.
Unless the context otherwise requires, all terms used herein
which are defined in the Uniform Commercial code shall have the
meanings therein stated.
(F) The undersigned acknowledges receipt of an executed and
completed copy of this Agreement.
Dynasil Corporation of America, Inc.
and Subsidiary
----------------------------------------
Witness/Attest: (Name)
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. By: /s/ ▇▇▇▇ ▇▇▇▇
------------------------------- ----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇ ▇▇▇▇
Title: President Title: CFO
---------------------------- ----------------------------------------
Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
----------------------------------------
(Number and Street)
West Berlin, Camden Co., West Berlin, NJ
----------------------------------------
(City, County, State) 08091
(Location of Collateral, if different
from above Address):
----------------------------------------
(Number and Street)
----------------------------------------
(City, County, State)
PREMIER BANK
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
----------------------------------------
EXHIBIT FOR EQUIPMENT DESCRIPTION
1238-5 2-88
Dynasil Corporation of America, Inc.
and Subsidiary
TERM AND CONDITIONS:
BORROWER agrees to provide Bank with annual audited financial statements and tax
returns, as well as quarterly compiled financial statements.
BORROWER also agrees to provide Bank with monthly agings of receivables and
payables as well as an inventory break-down including raw materials work in
progress and finished goods.
BORROWER agrees to provide evidence of payment in full of the note receivable
from ▇▇▇▇▇▇▇▇ Pacific of $175,000.00 prior to disbursement of bank funds.
IN THE EVENT Dynasil Corporation extends a Rights Offering, the first
$200,000.00 is to be appplied directly to the principal outstanding term debt
with Premier Bank.
ADDITIONALLY, any use of proceeds of the Rights Offering in excess of $50,000
per three month period is to be approved by Bank in advance.
FINALLY, BORROWER is to submit to Bank to be approved by Bank, any projected use
of funds for capital improvements.
PREMIER BANK
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Vice President
DYNASIL CORPORATION OF AMERICA,
INC, AND SUBSIDIARIES
/s/ ▇▇▇▇ ▇▇▇▇
------------------------------------
▇▇▇▇ ▇▇▇▇, CFO
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., President
Premier Bank (LOGO)
------------------------
LOAN AGREEMENT
THIS AGREEMENT is made this 10th day of July, 1998, by PREMIER BANK, (the
"Bank"), and the undersigned, DYNASIL CORPORATION OF AMERICA, INC. AND
SUBSIDIARY ("Borrower"), with its principal office at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
A. Credit Accommodations. Subject to the terms and conditions hereinafter set
forth, Bank agrees to extend to Borrower the following credit
accommodation(s) ("Credit Accommodations(s)"), which shall be evidenced by
promissory note(s) ("Note(s)"):
1. A Line of Credit, expiring on DEMAND, 19____, under which the Bank, in
its discretion, will make advances to Borrower from time to time and
Borrower may borrow, repay and reborrow from Bank subject to the following
terms:
a. Maximum outstanding principal amount of advances - $300,000.00.
b. Interest on the outstanding principal balance at the following
rate:
i. Bank's base rate of interest plus 0%.
ii. Interest payable (monthly/quarterly) commencing when billed,
19____.
iii. Borrower shall reduce the amount of the outstanding principal
under the Line of Credit to zero for one consecutive 30-day
period during each year after the date hereof while the Line
of Credit is in effect.
c. BORROWER ACKNOWLEDGES THAT THE LINE OF CREDIT AND ANY ADVANCE
THEREUNDER IS PROVIDED SOLELY AT BANK'S DISCRETION AND THE LINE OF
CREDIT MAY BE TERMINATED AT ANY TIME AND FOR ANY REASON WHATSOEVER.
2. A Term Loan subject to the following terms:
a. Principal amount - $ N/A.
b. Interest on the outstanding principal balance at the following
rate:
i. Bank's base rate of interest plus N/A%.
ii. Other rate terms - N/A
c. Payment terms:
i. Interest payable monthly commencing N/A, 19___.
ii. Principal payable in N/A consecutive (monthly/quarterly)
installments in the amount of $N/A each, or in the following
amounts, commencing, N/A, 19___, with a final installment in
the amount of the unpaid balance on N/A, 19___.
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
3. Borrower shall pay the following fees to Bank for the Credit
Accommodations: None
4. When interest hereunder is based on Bank's base rate, it shall be based
upon the rate of interest publicly announced from time to time by Bank in
Doylestown, Pennsylvania as its "Base Rate." The Bank's Base Rate is
defined as the then-published Wall Street Journal Prime Rate of Interest in
effect from time to time plus one percent. The applicable rate will change
when and as Bank changes its base rate.
5. Interest and any fees shall be calculated on the basis of a 360-day year
and the actual number of days elapsed.
6. A late fee will be charged on the portion of any payment made more than
twenty (20) days after it is due equal to five (5%) percent of the unpaid
amount or twenty-five ($25.00) dollars, whichever is greater.
B. Representations and Warranties. Borrower represents and warrants and, at
the request of Bank will provide a legal opinion (stating that subparagraph
1 of this Section is correct and that subparagraphs 2, 3, 4, and 5 are
correct to the best of counsel's knowledge), that:
1. Borrower is a (corporation) duly organized, validly existing and
in good standing under the laws of the state of its organization, and
has the necessary power and authority to enter into and perform this
Agreement, the Note(s) and all other documents required by Bank in
connection herewith; the execution and performance thereof have been duly
authorized by all necessary proceedings, and upon their execution and
delivery, they will be valid, binding and enforceable in accordance with
their terms; Borrower's execution and performance of this Agreement will
not violate any laws or regulations applicable to Borrower, any
organizational documents of Borrower or any agreements (including any
provisions of subordinated debt) to which Borrower is a party or by which
Borrower or any of its properties is bound; and any consents or approval
required in connection with this Agreement have been obtained.
2. The proceeds of the Credit Accommodation(s) will be used only in
connection with Borrower's business, for the following purposes: Support
cash flow needs.
3. All financial statements, statements as to ownership of Borrower and its
assets, and other statements and information delivered to Bank were
prepared in accordance with generally accepted accounting principles
consistently applied, are true and correct, disclose all presently
outstanding indebtedness or obligations of Borrower, including contingent
obligations and obligations under leases of property from others, and all
liens and encumbrances against its properties and assets; and there have
been no adverse changes in Borrower's financial condition or business since
the date of such statements.
4. There are no actions, suits, proceedings or claims pending or threatened
against Borrower or its property; and Borrower's business is in compliance
with all applicable laws and regulations.
5. Any debt of Borrower is not now and at closing hereunder will not be in
default under any provision thereof.
C. Conditions. The obligation of Bank to make the first advance under the
Credit Accommodation(s) shall be subject to Bank's receipt of the following
collateral security and/or duly executed documents, each in form and
substance satisfactory to Bank:
1. The Note(s) executed by Borrower.
2. A certificate as to Borrower's actions authorizing the Credit
Accommodation(s) (i.e., certified Board of Directors resolutions if
Borrower is a corporation; certified copy of partnership agreement if
Borrower is a partnership).
3. The following collateral security, subordination and guaranty documents
including any documents and actions required to perfect any collateral
security: 1st Lien on A/R, inventory, machinery & equipment, leasehold
improvements and 1st mortgage on ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
4. Bank shall have no obligation to make loans hereunder if any Event of
Default described in paragraph G hereof has occurred.
D. Affirmative Covenants. Borrower covenants and agrees that so long as there
is outstanding indebtedness of Borrower to Bank under the Credit
Accommodation(s) or otherwise, Borrower shall:
1. Maintain current assets in excess of current liabilities by at least
$------; maintain current assets of at least -----% of current liabilities;
maintain total liabilities in an amount not in excess of -----% of tangible
net worth; and maintain the following additional financial ratios: -----
---- such foregoing financial terms to be defined in accordance with
generally accepted accounting principles consistently applied.
2. Maintain free balances in demand deposit accounts at Bank in average
amounts calculated as follows: -----------------
3. Deliver to Bank financial statements, including a balance sheet and
income statement and such other financial statements and reports as
requested by Bank, within ninety (90) days of the end of each fiscal year
and within forty-five (45) days of the end of each fiscal quarter; and
permit representatives of Bank to examine and audit Borrower's (and its
subsidiaries) books and records and to inspect Borrower's facilities and
properties. All such reports shall be prepared in accordance with generally
accepted accounting principles consistently applied, certified by a public
accountant satisfactory to Bank. Upon written request of Bank, Borrower
will provide this information in consolidating as well as consolidated
form.
4. Notify Bank of any litigation, proceedings or events involving Borrower
which might have a material adverse effect on Borrower's financial
condition or business or the payment of its indebtedness under the Credit
Accommodation(s).
5. Keep and maintain (and require subsidiaries to keep and maintain) all of
its property and assets in good order and repair and maintain fire, public
liability and other insurance in coverages and amounts customary for
Borrower's business or as Bank from time to time may require and deliver to
Bank certificates of all such insurance in effect; and cause all such
policies covering property given as security for the Credit
Accommodation(s) to have loss payee endorsements in favor of Bank and not
to be subject to cancellation unless thirty (30) days prior written notice
thereof shall have been received by Bank.
6. Pay (and require subsidiaries to pay) and discharge when due all taxes,
assessments or other governmental charges imposed on it or any of its
properties, unless the same are currently being contested in good faith by
appropriate proceedings and adequate reserves are maintained therefor.
E. Negative Covenants. So long as there is outstanding indebtedness of
Borrower to Bank under the Credit Accommodation(s) or otherwise, Borrower
and subsidiaries shall not, without the prior written consent of Bank:
1. Incur any indebtedness, including obligations under capitalized leases,
except indebtedness owing to Bank, existing indebtedness or trade
indebtedness arising in the ordinary course of business; guarantee or
otherwise become liable, directly or indirectly, for the indebtedness or
obligations of another party; make any loans or advances to others; or
create, permit or suffer the creation of any liens, security interests or
any other encumbrances on any of its property, real or personal, except
liens, security interests or encumbrances in favor of Bank or existing on
the date hereof and reported to Bank.
2. Convey, lease, sell, transfer or assign any assets except in the
ordinary course of business for value received; liquidate or discontinue
its normal operations with intention to liquidate; enter into any merger or
consolidation; or acquire assets or stock or other equity interest of
another entity except in the ordinary course of business.
3. Pay any dividends or make any for of withdrawal from capital, or make
any other distributions on, or repurchase, redeem or otherwise acquire, any
of its outstanding stock, partnership interests or other equity interests.
4. Sell, assign, transfer or dispose of any of its accounts or notes
receivable, with or without recourse, except to Bank.
5. Make loans or advances to others.
6. Become a guarantor, surety or otherwise liable for the debts or
obligations of others, except to Bank, and except as an endorser of checks
or drafts negotiated in the ordinary course of business.
7. Incur, create or assume any commitment to make any lease payments except
- - - - - - - - - -
__________________________________________________________________________.
Lease payments are defined as any direct or indirect payment or payments
whether as rent or otherwise, including fees, service or finance charges,
under any lease, rental or other arrangement for the use of property of any
other person and whether or not there is an option to purchase.
8. Enter into any sale-leaseback transactions.
9. Prepay any amounts not required or cause to be accelerated any amounts
on any outstanding indebtedness now existing or hereafter arising, except
to Bank.
10. Pay salaries, withdrawals or compensation to officers or partners of
Borrower in an amount exceeding $ - - - - - - - - - -
__________________________________________
in the aggregate per year.
11. Expend for fixed assets during any one fiscal year an amount in excess
of- - - - - - - - - -
_______________________________________________________________________
________________________ DOLLARS ($ - - - - - - - - - -
______________________________) other
than any fixed assets purchased with the proceeds of loans by Bank to
Borrower.
12. If Borrower is a corporation, sell, issue, or agree to sell or issue,
any shares (voting, non-voting, preferred or common of any class) or
Borrower, or purchase such shares except under such circumstances as will
in the opinion of Bank not result in a material adverse change in the
financial or business condition of Borrower or the value of any security
held by Bank.
F. Additional Collateral. As additional collateral security for the payment of
Borrower's indebtedness and obligations to Bank under the Credit
Accommodation(s) or otherwise, Borrower hereby grants to Bank a security
interest in and lien upon all funds, balances or other property of any kind
of Borrower, or in which Borrower has an interest, now or hereafter in the
possession, custody or control of Bank.
G. Default. Upon the occurrence of any of the following events of default,
Bank may declare the entire unpaid balance, principal and interest, of all
indebtedness of Borrower to Bank under the Credit Accommodation(s) or
otherwise to be immediately due and may exercise all available rights and
remedies under applicable law and agreements:
1. Failure to pay when due any principal or interest or any other sum
payable to Bank under the Credit Accommodation(s) or otherwise.
2. If any representation or warranty made herein or in connection herewith
or in any statement, certificate or other document furnished hereunder
proves to be or becomes false or untrue.
3. Default under any other provision contained herein or in any other
agreement or document executed or delivered in connection herewith and the
continuation of such default, unless cured to Bank's satisfaction, for
twenty (20) days.
4. Default by Borrower in the payment or performance of any material
obligation or indebtedness to another, whether now or hereafter incurred.
5. Any default by Borrower or by any guarantor or surety for Borrower under
the provisions of any note, security agreement, mortgage or other
instrument or agreement incorporated by reference into or executed in
connection with the Agreement or in connection with any other obligation of
Borrower or any guarantor or surety for Borrower to Bank.
6. The determination by an officer of Bank, in such officer's sole and
absolute discretion, that a material, adverse change in the business or
financial condition of Borrower, or of any guarantor or surety for
Borrower, has occurred.
7. If bankruptcy, insolvency, reorganization, receivership, arrangement or
other similar proceedings are commenced or filed by or against Borrower
under state or federal law; or if Borrower shall (i) become insolvent
(which term is defined for purposes thereof as failure to meets its
obligations as the same fall due); (ii) make an assignment for the benefit
of creditor; (iii) apply for, consent to or suffer the appointment of a
custodian, receiver or trustee for any part of its property or assets; or
(iv) fail to satisfy or appeal any material judgment or attachment within
thirty (30) days from the date of entry.
H. Miscellaneous. No consent or waiver under this Agreement shall be effective
unless in writing signed by the party granting the consent or waiver. No
waiver of any default shall be deemed a waiver of any default thereafter
occurring. This Agreement and all documents executed hereunder shall be
binding upon and shall inure to the benefit of all parties hereto and their
respective heirs, personal representatives, successors and assigns, may
only be modified or amended by a written document executed by the parties,
and shall be governed by Pennsylvania law. Borrower shall pay all fees and
costs incurred by Bank (including fees and costs of its legal counsel) in
connection with the creation and perfection of any collateral security
required hereunder or the collection or enforcement of the indebtedness and
collateral security hereunder. Bank is hereby irrevocably appointed
Borrower's attorney-in-fact to do all acts and things which Bank may
determine are necessary to perfect and continue perfected the security
interests created pursuant to this Agreement and to protect and facilitate
the collection of amounts due on any accounts receivable assigned to Bank
and any other property constituting security. Borrower will pay any stamp
taxes or any taxes in the nature thereof which may be payable in connection
with the execution and delivery of the promissory notes and other
documents. Borrower hereby forever indemnifies and saves Bank harmless
against any and all liability which Bank may incur or which may be assessed
against Bank with respect to such tax. The terms of any notes, security
agreements or other instruments executed pursuant to this Agreement are
expressed incorporated herein and made a part hereof; provided, however,
that in any case where a term or condition contained in such note, security
agreement, or other instrument cannot be construed (despite every effect to
do so) as consistent with the terms of this Agreement, this Agreement shall
govern. If any term of this Agreement shall be held to be invalid, illegal
or unenforceable, the validity of all other terms hereof shall in no way
be affected thereby. This Agreement shall be in full force and effect for a
term commencing on the date hereof and terminating at such time as Borrower
shall have satisfied in full or been released from all of Borrower's
liabilities and obligations to Bank hereunder.
I. Additional Terms. Borrower hereby agrees to the following additional terms
attached hereto and forming a part hereof:
[1. Additional Terms Schedule] See attached Term/Conditions
IN WITNESS WHEREOF, the undersigned have executed this Agreement the day and
year first above written.
Attest or Witness: Dynasil Corporation of America, Inc. and Subsidiary
------------------------------------------------------
[Name of Borrower]
By ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. By ▇▇▇▇ ▇▇▇▇
----------------------- ---------------------------------------------------
Title: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., Title: ▇▇▇▇ ▇▇▇▇, CFO
President
PREMIER BANK
By ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------------------------
Title: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Vice President
PREMIER BANK (LOGO)
PROMISSORY NOTE
(JUDGMENT)
Doylestown, Pennsylvania
July 10, 1998
$300,000.00
FOR VALUE RECEIVED, each of the undersigned unconditionally promises to
pay to PREMIER BANK, (the "Bank"), or order, at its office at ▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇, or at any other office of the Bank, the principal sum of
Three Hundred Thousand Dollars and 00/100 United States Dollars ($300,000.00),
together with interest in arrears on the unpaid principal balance from time to
time outstanding from the date hereof until the entire principal amount due
hereunder is paid in full at the rates hereinafter provided.
Principal shall be payable as follows:
/x/ If this box is checked, principal shall be payable on demand.
/ / If the box is checked, principal shall be payable in a single
payment on ___________________________.
/ / If this boxed is checked, principal shall be payable in / / monthly
/ / quarterly / / annual consecutive installments commencing
____________________ and on the same date of each installment period
thereafter, in the following amounts:______________________________
___________________________________________________________________
___________________________________________________________________
except that the last installment, payable on ______________________,
shall be in an amount equal to the principal balance then remaining
outstanding.
Interest shall be payable as follows until this Note is paid in full:
/x/ If this box is checked, monthly on the first day of each month
commencing when billed.
/ / If this box is checked, quarterly on the first day of each quarter
commencing _________________________________.
/ / If this box is checked, semi-annually on the first day of each six
months commencing __________________________.
Interest shall be calculated on the basis of the actual number of days
elapsed over a year of 360 days and shall be payable, before and after maturity
or judgment or entering of a verdict, at the following rate:
/ / If this box is checked, the interest rate shall be ________________
percent (_______%) per annum.
/x/ If this box is checked, the interest rate shall be the Prime Rate
(as defined below) plus zero percent (+ 0 % ) per annum.
Prime Rate means the floating rate of interest publicly announced from
time to time by the Bank in Doylestown, Pennsylvania as its "prime rate", with
the rate charged hereunder changing on the same day on which any change in the
Prime Rate is effective. The obligors under this Note hereby acknowledge that
the Prime rate is not tied by the Bank to any external rate of interest or index
and does not necessarily reflect the lowest rate of interest actually charged by
the Bank to any particular class or category of customer.
This Note may be prepaid in whole or in part at any time; provided that
(a) any prepayment shall include accrued interest to the date of prepayment on
the amount prepaid, and (b) if principal hereunder is payable in installments,
any principal prepaid shall be applied to installments in their inverse order of
maturity.
The Bank is hereby granted a continuing security interest in all
property of the undersigned now or hereafter in the possession of the Bank or
any of its affiliates in any capacity whatsoever, including, but not limited to,
any balance or share of any deposit, trust or agency account, as security for
the payment of this Note and any other liabilities of the undersigned to the
Bank, which security interest shall be enforceable and subject to all the
provisions of this Note, as if such property were specifically pledged hereunder
and the proceeds of such property may be applied at any time and without notice
to any of the undersigned's liabilities. Each of the undersigned hereby
authorizes the Bank to debit any deposit account maintained by any of the
undersigned with the Bank for accrued interest and principal, as and when due.
Such authorization shall not affect the undersigned's obligations to pay when
due all amounts payable hereunder whether or not there are sufficient funds
therefor in any such accounts. The foregoing shall be in addition to, and not in
limitation of, any rights of set-off the Bank may have.
The occurrence of any of the following events shall constitute an
Event of Default under this Note: (i) the failure to make any payments, whether
principal, interest or other payment, under any of the undersigned's
liabilities when the same is due, (ii) death of (if an individual), dissolution
(if a corporation or partnership), suspension of business for any reason or
insolvency (however such insolvency may be evidenced) of any obligor hereunder,
(iii) bankruptcy, insolvency, reorganization, receivership, arrangement or other
similar proceedings are commenced or filed by or against any obligor under state
or federal law; or any obligor shall (a) become insolvent (which term is defined
for purposes hereof as failure to meet its obligations as the same fall due);
(b) make an assignment for the benefit of creditors; or (c) apply for, consent
to or suffer the appointment of a custodian, receiver or trustee for any part of
its property or assets; (iv) the sale, lease, transfer or other disposition,
whether voluntary or involuntary, of all or a substantial part of any obligor's
assets or property, (v) the issuance of a writ, warrant, distraint or order of
attachment or garnishment against any obligor's property or assets, (vi) the
commencement of foreclosure proceedings or any proceedings for the enforcement
of money judgments against any obligor (vii) the occurrence of an event of
default as described and defined in any instrument securing the obligations
hereunder or any agreement under which this Note may be issued or any instrument
evidencing any indebtedness of any of the undersigned to the Bank and the
expiration of any period provided in such instrument to cure such default;
(viii) any of the undersigned shall fail to pay any indebtedness due to third
parties beyond any applicable grace period or (ix) any change shall occur in any
obligor's financial or business condition which, in the Bank's sole judgment, is
materially adverse. Upon the happening of any Event of Default, or upon demand,
if applicable, the holder hereof may declare the entire unpaid principal balance
under this Note and under any and all other liabilities of the undersigned to
the holder hereof immediately due and payable without notice, demand or
presentment and may exercise, without notice, demand or presentment, any of its
rights under any instruments securing the obligations hereunder. In the event
that the Bank or any subsequent holder of this Note shall exercise or endeavor
to exercise any of its remedies hereunder or under any instruments securing the
obligations hereunder, the undersigned shall pay on demand all reasonable costs
and expenses incurred in connection therewith, including, without limitation,
attorney's fees (which attorneys may be employees of the Bank), and the bank may
take judgment for all such amounts in addition to all other sums due hereunder.
Irrespective of the exercise or non-exercise of any of the aforesaid rights, if
any payment of principal or interest hereunder is not paid in full when the same
is due the undersigned shall pay to the holder a fee on such unpaid amount equal
to five percent (5%) of such late payment.
Each of the undersigned waives presentment for payment, protest and
demand, and notice of protest, demand and/or dishonor and nonpayment of this
Note, notice of any event of default under any instrument securing the
obligations hereunder, except as specifically provided therein, and all other
notices or demand otherwise required by law that the undersigned may lawfully
waive. Each obligor expressly agrees that this Note, or any payment hereunder,
may be extended from time to time, without in any way affecting the liability of
any obligor. No unilateral consent or waiver by the Bank with respect to any
action or failure to act which, without consent, would constitute a breach of
any provision of this Note shall be valid and binding unless in writing and
signed by the Bank.
The rights and obligations of the undersigned and all provisions hereof
shall be governed by and construed in accordance with the laws of the
Commonwealth of Pennsylvania.
Each of the undersigned hereby authorizes the Bank to date this Note as
of the date when the initial advance hereunder is made and to complete this Note
in any other particulars according to the terms of the Bank's understanding with
the undersigned. Any consent, agreement, instruction or request pertaining to
any matter under or in connection with this Note signed by any one of the
undersigned shall be binding upon all of them.
THE FOLLOWING SETS FORTH A WARRANT OF AUTHORITY FOR ANY ATTORNEY TO
CONFESS JUDGMENT AGAINST THE UNDERSIGNED. IN GRANTING THIS WARRANT OF ATTORNEY
TO CONFESS JUDGMENT AGAINST THE UNDERSIGNED, THE UNDERSIGNED, FOLLOWING
CONSULTATION WITH (OR DECISION NOT TO CONSULT) SEPARATE COUNSEL FOR THE
UNDERSIGNED AND WITH KNOWLEDGE OF THE LEGAL EFFECT HEREOF, HEREBY WAIVES ANY AND
ALL RIGHTS THE UNDERSIGNED HAS OR MAY HAVE TO PRIOR NOTICE AND AN OPPORTUNITY
FOR HEARING UNDER THE CONSTITUTIONS AND LAWS OF THE UNITED STATES AND THE
COMMONWEALTH OF PENNSYLVANIA. IT IS SPECIFICALLY ACKNOWLEDGED THAT THE BANK HAS
RELIED ON THIS WARRANT OF ATTORNEY IN GRANTING THE FINANCIAL ACCOMMODATIONS
DESCRIBED HEREIN.
EACH OF THE UNDERSIGNED HEREBY EMPOWERS ANY PROTHONOTARY CLERK OF COURT
OR ATTORNEY OF ANY COURT OF RECORD TO APPEAR FOR ANY OF THE UNDERSIGNED IN ANY
AND ALL ACTIONS WHICH MAY BE BROUGHT HEREUNDER, AND CONFESS JUDGMENT AGAINST ANY
OF THE UNDERSIGNED FOR ALL OR ANY PART OF THE UNPAID PRINCIPAL BALANCE HEREUNDER
AND ACCRUED INTEREST, TOGETHER WITH OTHER EXPENSES INCURRED IN CONNECTION
THEREWITH AND ATTORNEYS' FEES OF 5% OF THE TOTAL OF THE FOREGOING SUMS, BUT IN
NO EVENT LESS THAN $3,000, AND FOR SUCH PURPOSE THE ORIGINAL OR ANY PHOTOCOPY OF
THIS NOTE SHALL BE A GOOD AND SUFFICIENT WARRANT OF ATTORNEY. SUCH AUTHORIZATION
SHALL NOT BE EXHAUSTED BY ONE EXERCISE THEREOF, BUT JUDGMENT MAY BE CONFESSED AS
AFORESAID FROM TIME TO TIME. EACH OF THE UNDERSIGNED HEREBY WAIVES ALL ERRORS
AND RIGHTS OF APPEAL AS WELL AS RIGHTS TO STAY OF EXECUTION AND EXEMPTION OF
PROPERTY IN ANY ACTION TO ENFORCE ITS LIABILITY HEREON. EACH OF THE UNDERSIGNED
CONSENTS TO THE JURISDICTION OF THE COURTS OF THE COMMONWEALTH OF PENNSYLVANIA
AND AGREES TO BUCKS COUNTY AS APPROPRIATE VENUE IN ANY SUIT OR ACTION HEREON.
If this Note is signed by more than one maker, the liability of each
shall be joint and several. EACH OF THE UNDERSIGNED HEREBY WAIVES TRIAL BY JURY
AND THE RIGHT TO INTERPOSE ANY COUNTERCLAIM OR OFFSET OF ANY NATURE OR
DESCRIPTION IN ANY LITIGATION RELATING TO THIS NOTE OR ANY LIABILITY HEREUNDER
OR ENFORCEMENT OR REMEDIES HEREUNDER. Any provision of this Note which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity of
enforceability of such provision in any other jurisdiction.
As used herein, the terms, "the undersigned" shall mean the undersigned
or any one or more of them; "liabilities" shall mean any and all debts and
obligations of the undersigned owed to the Bank whether such shall be primary,
direct, contingent, sole, joint or several, due or to become due, or that have
or may hereafter be contracted or incurred; and "obligor' shall mean each of the
undersigned and any co-signer, endorser, guarantor or surety of or for the
undersigned's liabilities.
Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ Dynasil Corporation of America, Inc.
--------------- ---------------------------------------------
West Berlin, NJ and Subsidiary
---------------
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
---------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., President
/s/ ▇▇▇▇ ▇▇▇▇
---------------------------------------------
▇▇▇▇ ▇▇▇▇, CFO
