PROMISSORY NOTE
LINE OF CREDIT AGREEMENT
Amount Of Line of Credit Date
$5,250,000.00 March 1, 1996
FOR VALUE RECEIVED, EIF HOLDINGS, INC., ("Borrower"), a Hawaii
corporation, hereby enters into this line of credit agreement,
("Line of Credit") and promises to pay to the order AMERICAN ECO
CORPORATION, ("Lender"), an Ontario Canada corporation, its
successors and assigns at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇,
or at other place as might be designated in writing by the
Lender, the outstanding principal sum of Line of Credit, together
with interest with a variable rate, equal to the Line of Credit
Rate, (as hereafter defined), in United States dollars.
1. Interest:
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The interest rate on the outstanding principal balance shall
be equal to two percent (2%) in excess of the Prime Rate (as
herein after defined) per annum, (the "Line of Credit Rate").
The Line of Credit Rate charged hereunder will change effective
on the date of change in the Prime Rate without notice to the
Borrower. As used in this Line of Credit, the term "Prime Rate"
means the interest per annum most recently announced by Citibank,
N.A. New York, New York, for the guidance of its officer as its
prime lending rate or, if the foregoing index is not available,
the highest prevailing base interest rate charged on corporate
loans by large United States money center commercial banks as
published from time to time in the "Money Rates" column of the
Wall Street Journal. Prime rate is currently eight percent
(8.0%) per annum and the Borrower acknowledges that this Line of
Credit will bear interest at rate two percent (2.0%) in excess of
eight percent (8.0%) or ten percent (10%) per annum, until the
date of a change in the Prime Rate. Interest will be calculated
on the basis of the actual days elapsed based on a per diem
charge computed over a year composed of three hundred sixty-five
(365) days.
2. Advances:
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Borrower must request all advances under this Line of Credit
in writing and signed by as authorized party, as designated in
advance by the Borrower. All authorized parties must be so
designated in writing by the Borrower's Board of Directors. If
the Borrower is not in default or an Event of Default (as
hereafter defined), has not occurred, Borrower may request an
advance up to the total amount of this Line of Credit, less the
then current outstanding principal balance. In no event shall
the advance requested plus the unpaid principal balance exceed
the total amount of the Line of Credit. No advances will be made
after the Maturity Date (as hereafter defined). Advances will be
transferred to the designated bank account via bank draft, check
or wire transfer as requested by the Borrower. On the date the
advance is sent by the Lender, it will be added to the unpaid
principal balance and accrue interest as indicated above. Any
costs charged by a third-party for sending the advance, or wire,
will be deducted from the amount of the advance or added to the
outstanding principal balance of the Line of Credit.
3. Payments:
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The entire outstanding Principal balance of the Line of
Credit will be due and payable on July 31, 1997 ("Maturity
Date"). Interest on the outstanding Principal balance is due and
payable on the first day of each and every month. All payments
received by the Lender shall be first applied to any interest
balance due, at the rate herein specified, on the date the
payment is received and then to principal. The Borrower shall
have the right at any time to prepay the Line of Credit, in whole
or in part, without penalty. The Line of Credit will not be paid
in full however, until all outstanding principal and accrued
interest is paid in full. This is not a revolving line of
credit, and Borrower shall not be entitled to re-advances of
principal payments made by the Borrower.
4. Borrower's Breach of Default:
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On the breach by the Borrower of any material provision of
this Line of Credit or the occurrence of any Event of Default (as
defined herein), or the occurrence of a default by Borrower under
any other instrument now or hereafter evidencing or securing
payment of the indebtedness hereby evidenced or on the default in
payment or performance under any instrument governing, evidencing
or securing payment of the Principal balance of this Line of
Credit, at the option of the Lender and upon immediate written
notice to the Borrower, the entire indebtedness evidenced by this
Line of Credit will become immediately due, payable and
collectible then or thereafter as the Lender might elect,
regardless of the date of maturity of this Line of Credit.
Failure by the Lender to exercise such option will not constitute
a waiver of the right to exercise the same on the occurrence of
any subsequent Event of Default.
The makers, endorsers, sureties, guarantors and all other
persons who might become liable for all or any part of this
obligation severally waive presentment for payment, protest and
notice of nonpayment. Such parties consent to any extension of
time (whether one or more) of payment hereof, release of all or
any part of the collateral securing payment hereof or release of
any party liable for the payment of this obligation. Any such
extension or release may be made without notice to any such party
and without discharging such party's liability hereunder. If
more than one maker executes this Line of Credit, the liability
of each of the undersigned is and shall be joint and several.
5. Event of Default:
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When used herein, the term "Event of Default" shall include
the following events:
A. Nonpayment. The nonpayment when due of any installment
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of interest or principal owing under the Line of Credit.
B. Representations and Warranties. Any representations,
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statement, certificate, schedule or report made or furnished
to the Lender by or on behalf of the Borrower proves to be
false or erroneous in any material respect at the time of
the making thereof.
C. Insolvency; Bankruptcy. The insolvency (meaning an
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inability to pay debts as the same become due or the
existence of liabilities in excess of assets) of Borrower,
or the institution of bankruptcy, reorganization,
liquidation, receivership or conservatorship proceeding by
or against Borrower.
D. Judgment. Entry by any court of a final uninsured
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judgment against Borrower which is not discharged or stayed
to the satisfaction of the Lender.
E. Other Borrowing. If any debt that is not currently
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senior, becomes senior to this promissory note.
F. Other Debt. The default in payment or acceleration of
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the maturity of any indebtedness of Borrower owing to any
other person.
G. Adverse Change. The occurrence of a material adverse
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change in the financial condition of Borrower.
H. Ownership and Management. A change in the ownership or
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management of Borrower shall occur which is unsatisfactory
to Lender.
I. Corporate Existence. Any act or omission (formal or
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informal) of Borrower leading to, or resulting in, the
termination, invalidation (partial or total), revocation,
suspension, interruption or unenforcibility of Borrower's
corporate existence, rights, licenses, franchises or
permits, or the transfer or disposition (whether by sale,
lease or otherwise) to any person of all of a substantial
part of the Borrower's property outside of the ordinary
course of business.
J. Other Events of Default. Any sale, transfer or pledge
of
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permits, equipment, common stock in subsidiary or any other
asset of Borrower without Lender's prior written consent.
This Line of Credit is intended to strictly conform with all
usury laws to the extent applicable to the transactions
contemplated hereby. The provisions of this Line of Credit and
of all agreements between the Borrower and the Lender are hereby
expressly limited so that in no contingency or event whatsoever,
shall the amount contracted for, charged, paid or agreed to be
paid to the Lender for the use, forbearance or retention of money
or credit hereunder or otherwise exceed the maximum rate
permitted by laws therefor. If, from any circumstance
whatsoever, performance or fulfillment any provision hereof or of
any agreement between the Borrower and Lender shall, at the time
of the execution and delivery thereof, or at the time or
performance of such provision shall be due, involve or purport to
require any payment in excess of the limits prescribed by law,
the obligation to be performed or fulfilled shall be reduced
automatically to the limit prescribed by law without the
necessity of the execution of any amendment or new document.
6. Late Charges and Collection Costs:
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The Borrower agrees that if, and as often as, this Line of
Credit is placed in the hands of an attorney for collection or to
defend or enforce any of the Lender's rights under this Line of
Credit or otherwise relating to the indebtedness hereby
evidenced, the Borrower will pay the Lender's reasonable
attorney's fees, all court costs and all other expenses incurred
by the Lender in connection therewith. The Lender may collect a
late charge equal to one percent (1%) of the outstanding
principal balance if monthly interest payments are not received
by the Lender within ten (10) days after the due date of such
payment. Such late charge represents the estimate of reasonable
compensation for the loss which will be sustained by the Lender
arising from the Borrower's failure to make timely payments and
may be collected without prejudice to the rights of the Lender to
collect any other amounts arising from the Borrower's default in
payment or to accelerate the maturity of the indebtedness hereby
evidenced.
7. Default Rate of Interest:
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In addition to the foregoing late charge, at the option of
the Lender, after the occurrence of any Event of Default (as
defined herein), the unpaid balance of this Line of Credit will
bear interest at that rate which is equal to ten percent (10%)
per annum in excess of the Prime Rate and such interest which has
accrued will be paid at the time of and as a condition precedent
to curing any Default (as defined herein). During the existence
of any Default, the Lender may apply payments received on any
amount due hereunder or under the terms of any instrument now or
hereafter evidencing or securing payment of this indebtedness as
the Lender determines from time to time.
This Line of Credit is issued by the Borrower and accepted
by the Lender pursuant to a lending transaction negotiated,
consummated and to be performed in City of Industry, California.
This Line of Credit is to be construed according to the internal
laws of the State of California. All actions with respect to
this Line of Credit or any other instrument securing payment of
this Line of Credit will be instituted in a state or federal
court sitting in Orange County, California. By the execution of
this Line of Credit, the Borrower irrevocably and unconditionally
submits to the jurisdiction (both subject matter and personal) of
each such court and irrevocably and unconditionally waives: (a)
any objection the Borrower might now or hereafter have to the
venue in any court; and (b) any claim that any action or
proceeding brought in any such court has been brought in an
inconvenient forum.
8. Waiver and Notice:
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Borrower hereby otherwise waives presentment, demand for
payment, notice of dishonor, notice of default or Event of
Default, notice of protest, and all other notices or demands in
connection with the delivery, acceptance, performance, default or
guarantee of this Line of Credit. No delay or omission on the
part of the Lender in exercising any right hereunder against the
Borrower, shall operate as a waiver of such right or of any other
rights under this Line of Credit. Waiver on any specific
occasion against the Borrower shall not be construed as a bar to
or waiver of any right and/or remedy on any future occasion. All
waivers of any rights by the Lender must be in writing.
Unless applicable law requires a different method, any
notice that must be given to the Lender under this Note will be
given by delivering it or by mailing it by first class mail to
the Lender at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇, or to such other
address as notified by the Lender in writing.
IN WITNESS WHEREOF, the undersigned has caused these presents to
be signed by a duly authorized officer of the Borrower and its
corporate seal to be hereunto affixed and attested by its
Secretary, as of the date first above written.
BORROWER: LENDER:
EIF HOLDINGS, INC. AMERICAN ECO CORPORATION.
a Hawaii corporation an Ontario Canada corporation
By: /s/▇. ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title: President & CEO Title: President & CEO
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By: By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Title: Title: Assistant Secretary
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