EXHIBIT 10.29
TERM LOAN NOTE
$625,000.06 March 16, 1999
FOR VALUE RECEIVED, CECO FILTERS, INC. AIR PURATOR CORPORATION, NEW ▇▇▇▇▇ CO.,
INC. and U.S. FACILITIES MANAGEMENT COMPANY, INC. (collectively, the
"Borrowers"), with an address at c/o CECO Filters, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, jointly and severally, promise to pay to the order of
PNC BANK, NATIONAL ASSOCIATION (the "Bank"), in lawful money of the United
States of America in immediately available funds at its offices located at ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or at such other location as the Bank may
designate from time to time, the principal sum of SIX HUNDRED TWENTY FIVE
THOUSAND AND 06/100 DOLLARS ($625,000.06) (the "Term Loan"), together with
interest accruing on the outstanding principal balance from the date hereof, as
provided below:
1. Rate of Interest. Amounts outstanding under this Note will bear interest as
follows:
(a) A rate per annum (the "Floating Rate") which is equal to the Prime Rate plus
(i) at all times prior to the USFM Date (as defined below), one half of one
percent (1/2%) and (ii) at all times from and after the USFM Date to September
1, 2001, one quarter of one percent (1/4%); provided that the Borrowers shall
have the one time option to convert from the Floating Rate and fix the interest
at a rate (the "Fixed Rate") offered by the Bank as its cost of funds rate for
the then remaining term of the Facility plus (i) at all times prior to the USFM
Date, two and three quarters percent (2 3/4%) and (ii) at all times from and
after the USFM Date to September 1, 2001, two and one-half percent (2 1/2%).
(b) Interest will be calculated on the basis of a year of 360 days and the
actual number of days elapsed. As used herein, "Prime Rate" shall mean the rate
publicly announced by the Bank from time to time as its prime rate. The Prime
Rate is determined from time to time by the Bank as a means of pricing some
loans to its borrowers. The Prime Rate is not tied 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 customers.
If and when the Prime Rate changes, the rate of interest under this Note will
change automatically without notice to the Borrowers, effective on the date of
any such change. For purposes of this Note, the "USFM Date" is the last day of
the second of two consecutive fiscal quarters of U.S. Facilities Management
Company, Inc. ("USFM") during both of which USFM has had net income determined
in accordance with generally accepted accounting principles equal to or greater
than zero (0).
2. Payment Terms.
(a) Interest. Interest on the Term Loan shall be due and payable monthly
commencing on April 1, 1999 and continuing on the first day of each month
thereafter until September 1, 2001.
(b) Principal. Principal shall be payable in consecutive equal monthly
installments each in the amount of $20,833 which shall be due and payable on the
first day of each month commencing April 1, 1999. The outstanding balance of
principal and accrued interest shall be due and payable on September 1, 2001,
subject to the provisions of Section 11 of the Letter Agreement.
(c) General Provisions. If any payment under this Note shall become due on a
Saturday, Sunday or public holiday under the laws of the State where the Bank's
office indicated above is located, such payment shall be made on the next
succeeding business day and such extension of time shall be included in
computing interest in connection with such payment. The Borrowers hereby
authorize the Bank to charge CECO Filters, Inc.'s deposit account at the Bank
for any payment when due hereunder. Payments received will be applied to
charges, fees and expenses (including attorneys' fees), accrued interest and
principal in any order the Bank may choose, in its sole discretion.
3. Late Payments; Default Rate. If the Borrowers fail to make any payment of
principal, interest or other amount coming due pursuant to the provisions of
this Note within five business days of the date due and payable, the Borrowers
also shall pay to the Bank a late charge equal to three percent (3%) of the
amount of such payment. Such five day period shall not be construed in any way
to extend the due date of any such payment. The late charge is imposed for the
purpose of defraying the Bank's expenses incident to the handling of delinquent
payments and is in addition to, and not in lieu of, the exercise by the Bank of
any rights and remedies hereunder, under the other Loan Documents or under
applicable laws, and any fees and expenses of any agents or attorneys which the
Bank may employ. Upon maturity, whether by acceleration, demand or otherwise,
and at the option of the Bank upon the occurrence of any Event of Default (as
hereinafter defined) and during the continuance thereof, this Note shall bear
interest at a rate per annum (based on a year of 360 days and actual days
elapsed) which shall be two percent (2%) in excess of the interest rate in
effect from time to time under this Note but not more than the maximum rate
allowed by law (the "Default Rate"). The Default Rate shall continue to apply
whether or not judgment shall be entered on this Note.
4. Prepayment. If this Note bears interest at the Floating Rate, the
indebtedness may be prepaid in whole or in part at any time without penalty. If
this Note bears interest at a Fixed Rate, the indebtedness may be prepaid in
whole or in part at any time provided however, notwithstanding anything
contained herein to the contrary, upon such prepayment (other than a prepayment
which is the result of the expiration of the Refinancing Extension) by or on
behalf of the Borrowers (whether voluntary, on default or otherwise) of
indebtedness hereunder which bears interest at a fixed rate, the Bank may
require, if it so elects, the Borrowers to pay the Bank as compensation for the
cost of being prepared to advance fixed rate funds hereunder an amount equal to
the Cost of Prepayment. "Cost of Prepayment" means an amount equal to the
present value, if positive, of the product of (a) the difference between (i) the
yield, on the beginning date of the applicable interest period, of a U.S.
Treasury obligation with a maturity similar to the applicable interest period
minus (ii) the yield on the prepayment date, of a U.S. Treasury obligation with
a maturity similar to the remaining maturity of the applicable interest period,
and (b) the principal amount to be prepaid, and (c) the number of years,
including fractional years, from the prepayment date to the end of the
applicable interest period. The yield on any U.S. Treasury obligation shall be
determined by reference to Federal Reserve Statistical Release H.15(519)
"Selected Interest Rates". For purposes of making present value calculations,
the yield to maturity of a similar maturity U.S. Treasury obligation on the
prepayment date shall be deemed the discount rate and the term "applicable
interest period" shall mean the number of months or a fraction thereof remaining
in the term of the loan through the maturity date of this Note. The Cost of
Prepayment shall also apply to any payments made after acceleration of the
maturity of this Note.
5. Other Loan Documents. This Note is issued in connection with a certain letter
agreement dated March 16, 1999 (the "Letter Agreement") and the other documents
referred to therein, the terms of which are incorporated herein by reference
(collectively, the "Loan Documents"), and is secured by the property described
in the Loan Documents (if any) and by such other collateral as previously may
have been or may in the future be granted to the Bank to secure this Note.
6. Events of Default. The occurrence of any of the following events will be
deemed to be an "Event of Default" under this Note: (i) the nonpayment of any
principal, interest or other indebtedness under this Note when due; (ii) the
occurrence of any event of default or default and the lapse of any notice or
cure period under any Loan Document or any other debt, liability or obligation
to the Bank of any Obligor; (iii) the filing by or against any Obligor of any
proceeding in bankruptcy, receivership, insolvency, reorganization, liquidation,
conservatorship or similar proceeding (and, in the case of any such proceeding
instituted against any Obligor, such proceeding is not dismissed or stayed
within sixty (60) days of the commencement thereof, provided that the Bank shall
not be obligated to advance additional funds during such period); (iv) any
assignment by any Obligor for the benefit of creditors, or any levy,
garnishment, attachment or similar proceeding is instituted against any property
of any Obligor held by or deposited with the Bank and such proceeding is not
dismissed within thirty (30) days of the commencement thereof; (v) a default
with respect to any other indebtedness of any Obligor for borrowed money, if the
effect of such default is to cause the acceleration of such debt; (vi) the
commencement of any foreclosure or forfeiture proceeding, execution or
attachment against any collateral securing the obligations of any Obligor to the
Bank and such proceeding is not dismissed or stayed within thirty (30) days of
the commencement thereof; (vii) the entry of a final judgment in excess of
$25,000 against any Obligor and the failure of such Obligor to discharge
the judgment within thirty (30) days of the entry thereof, unless the same has
been appealed and a stay of the enforcement thereof has been obtained; (viii)
any material adverse change in the business, assets, operations, financial
condition or results of operations of any Obligor of which the Bank has given
the Borrowers' Representative one hundred twenty (120) days notice; (ix) the
Borrowers cease doing business as a going concern; (x) any representation or
warranty made by any Obligor to the Bank in any Loan Document, or any other
documents now or in the future securing the obligations of any Obligor to the
Bank, proves to be false, erroneous or misleading in any material respect when
made; (xi) the failure of any Obligor to observe or perform any covenant or
other agreement with the Bank contained in any Loan Document or any other
documents now or in the future securing the obligations of any Obligor to the
Bank and the lapse of any applicable notice and cure period in connection
therewith; or (xii) any change of control of any Obligor shall occur (as used
herein, the term "change of control" means either any change in ownership of any
class of stock or capital stock generally of any Obligor which would result in a
change or transfer of power to control the election of a majority of the board
of directors or in other indicia of majority voting control to persons or
entities other than the Obligors). As used herein, the term "Obligor" means any
Borrower and any Guarantor, and the term "Guarantor" means any guarantor of the
obligations of the Borrowers to the Bank existing on the date of this Note or
arising in the future.
Upon the occurrence of an Event of Default: (a) the Bank shall be under no
further obligation to make advances hereunder; (b) if an Event of Default
specified in clause (iii) or (iv) above shall occur, the outstanding principal
balance and accrued interest hereunder together with any additional amounts
payable hereunder shall be immediately due and payable without demand or notice
of any kind; (c) if any other Event of Default shall occur, the outstanding
principal balance and accrued interest hereunder together with any additional
amounts payable hereunder, at the option of the Bank and without demand, may be
accelerated and become immediately due and payable; (d) at the option of the
Bank, this Note will bear interest at the Default Rate from the date of the
occurrence of the Event of Default; and (e) the Bank may exercise from time to
time any of the rights and remedies available to the Bank under the Loan
Documents or under applicable law.
7. Power to Confess Judgment. The Borrowers hereby empower any attorney of any
court of record, after the occurrence of any Event of Default hereunder, to
appear for the Borrowers and, with or without complaint filed, confess judgment,
or a series of judgments, against the Borrowers in favor of the Bank or any
holder hereof for the entire principal balance of this Note, all accrued
interest and all other amounts due hereunder, together with costs of suit and an
attorney's commission of the greater of 3% of such principal and interest or
$5,000 added as a reasonable attorney's fee, and for doing so, this Note or a
copy verified by affidavit shall be a sufficient warrant. The Borrowers hereby
forever waive and release all procedural errors in said proceedings and all
rights of appeal and all relief from any and all appraisement, stay or exemption
laws of any state now in force or hereafter enacted. Interest on any such
judgment shall accrue at the Default Rate.
No single exercise of the foregoing power to confess judgment, or a series of
judgments, shall be deemed to exhaust the power, whether or not any such
exercise shall be held by any court to be invalid, voidable, or void, but the
power shall continue undiminished and it may be exercised from time to time as
often as the Bank shall elect until such time as the Bank shall have received
payment in full of the debt, interest and costs.
8. Right of Setoff. In addition to all liens upon and rights of setoff against
the money, securities or other property of each Borrower given to the Bank by
law, the Bank shall have, with respect to such Borrower's obligations to the
Bank under this Note and to the extent permitted by law, a contractual
possessory security interest in and a contractual right of setoff against, and
each Borrower hereby assigns, conveys, delivers, pledges and transfers to the
Bank all of such ▇▇▇▇▇▇▇▇'s right, title and interest in and to, all deposits,
moneys, securities and other property of such Borrower now or hereafter in the
possession of or on deposit with, or in transit to, the Bank whether held in a
general or special account or deposit, whether held jointly with someone else,
or whether held for safekeeping or otherwise, excluding, however, all IRA,
▇▇▇▇▇, and trust accounts. Every such security interest and right of setoff may
be exercised without demand upon any Borrower. Every such right of setoff shall
be deemed to have been exercised immediately upon the occurrence of an Event of
Default hereunder without any action of the Bank, although the Bank may enter
such setoff on its books and records at a later time.
9. Miscellaneous. No delay or omission of the Bank to exercise any right or
power arising hereunder shall impair any such right or power or be considered to
be a waiver of any such right or power, nor shall the Bank's action or inaction
impair any such right or power. Each Borrower agrees to pay on demand, to the
extent permitted by law, all costs and expenses incurred by the Bank in the
enforcement of its rights in this Note and in any security therefor, including
without limitation reasonable fees and expenses of the Bank's counsel. If any
provision of this Note is found to be invalid by a court, all the other
provisions of this Note will remain in full force and effect. Each Borrower and
all other makers and indorsers of this Note hereby forever waive presentment,
protest, notice of dishonor and notice of non-payment. Each Borrower also waives
all defenses based on suretyship or impairment of collateral. If this Note is
executed by more than one Borrower, the obligations of such persons or entities
hereunder will be joint and several. This Note shall bind each Borrower and its
successors and assigns, and the benefits hereof shall inure to the benefit of
the Bank and its successors and assigns.
This Note has been delivered to and accepted by the Bank and will be deemed to
be made in the State where the Bank's office indicated above is located. THIS
NOTE WILL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE BANK AND THE
BORROWER DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE WHERE THE BANK'S
OFFICE INDICATED ABOVE IS LOCATED, EXCLUDING ITS CONFLICT OF LAWS RULES. Each
Borrower hereby irrevocably consents to the exclusive jurisdiction of any state
or federal court for the county or judicial district where the Bank's office
indicated above is located, and consents that all service of process be sent by
nationally recognized overnight courier service directed to the Borrowers at the
address set forth herein and service so made will be deemed to be completed on
the business day after deposit with such courier; provided that nothing
contained in this Note will prevent the Bank from bringing any action, enforcing
any award or judgment or exercising any rights against each Borrower
individually, against any security or against any property of such Borrower
within any other county, state or other foreign or domestic jurisdiction. Each
Borrower acknowledges and agrees that the venue provided above is the most
convenient forum for both the Bank and such Borrower. The Borrower waives any
objection to venue and any objection based on a more convenient forum in any
action instituted under this Note.
10. WAIVER OF JURY TRIAL. EACH BORROWER IRREVOCABLY WAIVES ANY ALL RIGHTS SUCH
BORROWER MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY
NATURE RELATING TO THIS NOTE, ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS
NOTE OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS. EACH BORROWER
ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.
Each Borrower acknowledges that it has read and understood all the provisions of
this Note, including the waiver of jury trial, and has been advised by counsel
as necessary or appropriate.
WITNESS the due execution hereof as a document under seal, as of the date first
written above, with the intent to be legally bound hereby.
CECO FILTERS, INC.
By: /▇▇▇▇▇▇ ▇▇▇▇/
--------------------------
Print Name: /▇▇▇▇▇▇ ▇▇▇▇/
Title: /President/
AIR PURATOR CORPORATION
By: /▇▇▇▇▇▇ ▇▇▇▇/
--------------------------
Print Name: /▇▇▇▇▇▇ ▇▇▇▇/
Title: /President/
NEW ▇▇▇▇▇ CO., INC.
By: /▇▇▇▇▇▇ ▇▇▇▇/
--------------------------
Print Name: /▇▇▇▇▇▇ ▇▇▇▇/
Title: /President/
U.S. FACILITIES MANAGEMENT COMPANY, INC.
By: /▇▇▇▇▇▇ ▇▇▇▇/
--------------------------
Print Name: /▇▇▇▇▇▇ ▇▇▇▇/
Title: /President/