EXECUTION COPY
LOAN AGREEMENT
By and Between
ENVIRONMENTAL SERVICE PROFESSIONALS, INC.
AND
LENDER
dated as of May 26, 2010
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TABLE OF CONTENTS
1. DEFINITIONS
1.1 DEFINED TERMS
1.2 OTHER DEFINITIONAL PROVISIONS
2. THE LOANS; PAYMENT OF PRINCIPAL AND INTEREST; RELATED MATTERS
2.1 MAXIMUM PRINCIPAL AMOUNT OF LOANS; OTHER PROVISIONS RE: THE LOANS
2.2 PROCEDURES FOR DISBURSEMENTS OF FUNDS
2.3 PAYMENT OF PRINCIPAL AND INTEREST
2.4 OTHER PROVISIONS
2.5 PAYMENTS BY ESP
2.6 TERMINATION
3. CONDITIONS PRECEDENT
3.1 CONDITIONS PRECEDENT TO THE INITIAL LOAN
3.2 CONDITIONS PRECEDENT TO ALL LOANS
4. DRAWDOWNS
5. INTEREST
INTEREST, INTEREST CALCULATION, INTEREST PAYMENTS
6. SECURITIES
7. REPRESENTATIONS AND WARRANTIES
7.1 ORGANIZATION AND QUALIFICATION
7.2 DUE AUTHORIZATION
7.3 NO DEFAULT; COMPLIANCE WITH LAWS
7.4 NO REQUIRED GOVERNMENTAL AUTHORIZATIONS
7.5 NO MATERIAL ADVERSE EFFECT
7.6 PERFECTED FIRST PRIORITY LIENS
7.7 TITLE; ABSENCE OF LIENS
7.8 COMPLIANCE WITH LAWS
7.9 NO PROCEEDINGS
7.10 DELIVERY OF DOCUMENTS
7.11 NO VIOLATIONS; TAXES AND ASSESSMENTS
7.12 ENVIRONMENTAL MATTERS
7.13 OTHER REPRESENTATIONS
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7.14 REPRESENTATIONS AND WARRANTIES APPLICABLE TO SUBSIDIARIES
7.15 REAFFIRMATION
8. AFFIRMATIVE COVENANTS
8.1 MAINTENANCE
8.2 COMPLIANCE WITH LAWS
8.3 NOTICE OF ADVERSE EVENTS
8.4 OTHER PROVISIONS
9. NEGATIVE COVENANTS
9.1 AMENDMENTS OF DOCUMENTS
9.2 CONSOLIDATION, MERGER, OR ACQUISITIONS; LIQUIDATION
9.3 OTHER LIENS
9.4 OTHER LIABILITIES
9.5 LOANS OR INVESTMENTS
9.6 GUARANTIES; CONTINGENT LIABILITIES
9.7 DIVIDENDS AND OTHER DISTRIBUTIONS
9.8 TRANSACTIONS WITH AFFILIATES
9.9 OTHER COVENANTS
9.10 SUBSIDIARIES
10. EVENTS OF DEFAULT
10.1 FAILURE TO PAY
10.2 FAILURE TO PERFORM OR OBSERVE COVENANTS
10.3 SECURITY
10.4 TRANSACTION DOCUMENTS
10.5 FALSE REPRESENTATION OR WARRANTY
10.6 DEFAULT ON OTHER DEBT
10.7 CESSATION OF BUSINESS
10.8 INABILITY TO PAY DEBTS; BANKRUPTCY OR INSOLVENCY
10.9 CERTAIN JUDGMENTS
10.10 CHANGE OF CONTROL
11. REMEDIES
11.1 RIGHTS UNDER TRANSACTION DOCUMENTS
11.2 RIGHTS IN GENERAL
11.3 SETOFF RIGHTS
11.4 ADDITIONAL RIGHTS TO TERMINATE THIS AGREEMENT
11.5 CUMULATIVE REMEDIES; NO WAIVER BY LENDER
11.6 WAIVERS AND CONSENTS RELATING TO REMEDIES
11.7 POWERS OF ATTORNEY
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12. COSTS, EXPENSES AND TAXES; INDEMNIFICATION; LIMITATIONS ON LENDER'S
LIABILITY
12.1 COSTS AND EXPENSES
12.2 INDEMNIFICATION BY ESP
12.3 LIMITATIONS ON LENDER'S LIABILITY
13. OTHER PROVISIONS
13.1 ENTIRE AGREEMENT; AMENDMENTS; LENDER'S CONSENT
13.2 SPECIFIC PERFORMANCE
13.3 NOTICES
13.4 NO THIRD PARTY BENEFICIARIES
13.5 JOINT EFFORTS
13.6 GOVERNING LAW
13.7 OTHER PROVISIONS
13.8 NO AGENCY RELATIONSHIP
13.9 FURTHER ACKNOWLEDGMENTS AND AGREEMENTS OF ESP AND LENDER
EXHIBITS
Exhibit A DRAWDOWN NOTICE
Exhibit B DRAWDOWN SCHEDULE
Exhibit C PRE-ADVICE SBLC
Exhibit D PRE-ADVICE REPLY
Exhibit E STAND-BY LETTER OF CREDIT
Exhibit F PRE-ADVICE FUNDS TRANSFER
Exhibit G OMITTED
Exhibit H PROMISSORY NOTE
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LOAN AGREEMENT
This Loan Agreement (this "AGREEMENT") is entered into and made
legally effective as of May 26, 2010 between Environmental Service
Professionals, Inc. having a principal place of business at ▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("ESP"), and Lender having a principal place of
business at ("LENDER").
WITNESSETH:
WHEREAS, Lender has agreed, subject to the terms and conditions
contained in this Agreement, to provide certain loans to ESP in the maximum
principal amount of Two Hundred Million United States Dollars ($200,000,000.00).
AGREEMENT
NOW, THEREFORE, in consideration of the promises and the mutual
covenants herein contained, the parties hereto (the "PARTIES") hereby agree as
follows:
1. DEFINITIONS
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1.1. DEFINED TERMS. As used herein, the following terms shall have the
following meanings (such meanings to be equally applicable to both the singular
and plural forms of the terms defined):
"ADVANCE" means the making of any Loan by or on behalf of Lender
hereunder.
"AFFILIATE" means any corporation, firm, partnership or other
entity which directly or indirectly controls or is controlled by or is under
common control with a Party to this Agreement. For purposes of this definition,
"control" means ownership, directly or through one or more Affiliates, of fifty
percent (50%) or more of the shares of the stock entitled to vote for the
election of directors, in the case of a corporation, or fifty percent (50%) or
more of the equity interests in the case of any other type of legal entity,
status as a general partner in any partnership, or any other arrangement whereby
a Party controls or has the right to control the Board of Directors or
equivalent governing body of a corporation or other entity.
"AGREEMENT" means this Loan Agreement, as amended, supplemented,
restated or otherwise modified from time to time in writing by the Parties.
"BUSINESS DAY" means any day on which banks are open for ordinary
banking business in the State of New York.
"COLLATERAL" or "SECURED ASSETS" means all of the assets in which
ESP has granted or does grant Lender a Lien pursuant to this Agreement and/or
any other Loan Document.
"COMMITMENT FEE" means a fee equal to one percent (1%).
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"DEFAULT RATE" means a rate of interest equal to twelve percent
(12%) per annum in excess of the interest rate or interest rates otherwise
applicable at any time to any Loan.
"DOCUMENT" means any contract, other agreement, instrument,
undertaking, other paper or writing or other document of any kind or nature
whatsoever.
"DRAWDOWN" means each portion of the Loan Sum drawn down by ESP
pursuant to a Drawdown Notice to this Agreement.
"DRAWDOWN NOTICE" means a notice substantially in the form of the
document attached hereto as Exhibit A.
"DRAWDOWN SCHEDULE" means the document attached hereto as Exhibit
B.
"EXHIBIT" means all Exhibits attached hereto and made a part
hereof as if fully set forth herein.
"GAAP" means United States generally accepted accounting
principles as defined by controlling pronouncements of the Financial Accounting
Standards Board, as from time to time supplemented and amended.
"GOVERNMENTAL AUTHORITY" means any United States or foreign
federal, national, state or local governmental authority, agency, department or
instrumentality or other regulatory body of any kind or nature whatsoever,
including any (i) court and (ii) that has jurisdiction in whole or in part
relating to the Products, including the right to issue, condition, otherwise
modify, withdraw or otherwise affect any Governmental Authorization.
"GOVERNMENTAL AUTHORIZATION" means any permit, authorization,
license or other approval of any kind or nature whatsoever issued or issuable by
any Governmental Authority.
"INCLUDING" means "including, without limitation", "INCLUDES"
means "includes, without limitation", and "INCLUDE" means "include, without
limitation".
"INTEREST RATE" means, "the Wall Street Journal Prime Rate, plus
100 basis points (one hundred) bps," as reported in the Wall Street Journal, on
the last reported day prior to funding. Interest rate is to be reset ANNUALLY
thereafter, on the same basis with changes in such rate to take effect with each
change in the Wall Street Journal Prime Rate provided that following the
occurrence of an Event of Default, the interest rate applicable to each Loan
shall be immediately increased to the Default Rate and (b) the highest rate of
interest permitted from time to time by applicable law.
"LIABILITIES" means any liabilities, contractual obligations,
common law obligations, obligations arising under Law or any other obligations
of any kind or nature whatsoever, as determined in accordance with GAAP.
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"LIEN" means any mortgage, security interest, assignment, pledge,
hypothecation, lien, conditional sale or other title retention agreement,
financing lease having substantially the same effect as any of the foregoing,
right, other preferential arrangement or other encumbrance of any kind or nature
whatsoever.
"LOAN" or "LOANS" means any loan made by or on behalf of Lender to
ESP relating to this Agreement.
"LOAN DOCUMENTS" means (i) this Agreement, (ii) the Note and (iii)
any Compliance Certificates and/or Supplemental Certificates and the initial
certificate referred to in Section 3.1(i) hereof.
"LOAN SUM" means the sum of money referred to in Section 4 or the
balance of that sum as may have been advanced to ESP and remains unpaid from
time to time.
"LVR" expressed as a percentage (%) means the Loan to Valuation
Ratio to be applied from time to time.
"MATERIAL ADVERSE EFFECT" means (i) any material adverse change in
ESP' business, operations, properties or other assets, results of operations or
condition (financial or otherwise), (ii) any other material adverse change in,
or other material adverse event, occurrence or other circumstance affecting,
this Agreement, the Securities or the Stand-by Letter of Credit or Lender's
interest therein, or (iii) any other material adverse change in the value of the
assets of ESP its business or operations; or (iv) the existence of, or ability
of Lender to exercise, any right under this Agreement.
"MATURITY DATE" means the date that is one year and 30 days after
the issue date of the Letter of Credit used a security for this Agreement.
"NOTE" means that certain Promissory Note of even date herewith, a
copy of which is attached hereto as Exhibit H, as amended, supplemented,
restated or otherwise modified from time to time.
"OBLIGATIONS" means (i) all of the principal of and all of the
interest on the Loans and (ii) all other monetary and non-monetary obligations
of ESP to Lender under the terms of this Agreement and each other Loan Document.
"ORDER" means any injunction, writ, restraining order or other
similar order of any kind or nature of or by any Governmental Authority.
"ORGANIZATIONAL DOCUMENTS" means the Documents related to the
creation, organization and internal regulation of any Person, including the
certificate of incorporation or articles of incorporation, as applicable, and
by-laws, of any Person, each as amended and/or restated.
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"PERSON" means an individual, limited liability company,
corporation, partnership, business or other trust, unincorporated association,
joint venture, Governmental Authority or other entity of any kind or nature
whatsoever.
"PROCEEDING" means any claim, demand, proceeding, investigation or
other action.
"RELATED TO" means "arising out of, in connection with or
otherwise related to", "RELATES TO" means "arises out of, is in connection with
or otherwise relates to" and "RELATE TO" has a substantially similar meaning.
"SECURITIES" means the transactions and documents required by
Lender to be entered into and given or procured from time to time by ESP as
security for the performance of ESP under this Agreement and includes such
promissory notes and stand-by letter(s) of credit, as may be applicable.
"STAND-BY LETTER OF CREDIT" means a stand-by letter of credit
issued by a commercial bank approved by Lender and which is licensed to carry on
banking business in the United States of America. Such stand-by letter of credit
must be drawn in favor of Lender or its nominee (and their respective successors
and assigns) having a Market Value equivalent, as at the date of issue of such
Letter, to not less than the LVR based letter of credit value, having a term of
not less than one year and one day from the date on which the first Drawdown of
the Loan Sum is advanced and is thereafter capable of being freely renewable for
a term or terms up to the Maturity Date and which is otherwise in a form which
is acceptable to the Funder in all respects.
"SUBSIDIARY" means any Person in which ESP directly or indirectly
owns fifty percent (50%) or more of (i) the Equity Interests generally entitled
to vote on matters and/or (ii) the Equity Interests.
"TAXES" means (i) any tax, levy, charge, impost, duty, fee,
deduction, compulsory loan or withholding; or (ii) any income, stamp or
transactions duty, tax or charge; which is assessed, levied, imposed or
collected by any Governmental Agency and includes, but is not limited to, any
interest, fine, penalty, charge, fee or other amount imposed on or in respect of
any of the above.
"TRANSACTION DOCUMENTS" means this Agreement and all of the other
Loan Documents.
"UCC" means the Uniform Commercial Code as in effect from time to
time in the State of New York.
1.2. OTHER DEFINITIONAL PROVISIONS. The words "hereof", "herein",
"hereto" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement. Section, Subsection, Schedule and Exhibit references are to this
Agreement unless otherwise specified. Amendments and modifications each include
extensions, consolidations, renewals or replacements. In addition, the following
terms are defined herein.
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2. THE LOANS; PAYMENT OF PRINCIPAL AND INTEREST; RELATED MATTERS.
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2.1. PRINCIPAL AMOUNT OF LOANS; OTHER PROVISIONS RE: THE LOANS. Subject
to all of the terms and conditions of this Agreement, including the conditions
precedent hereto, (a) Lender agrees to lend to ESP Two Hundred Million Dollars
($200,000,000) (the "PRINCIPAL AMOUNT OF LOAN") and (b) the Loan shall be made
by Lender to ESP at the time provided for in this Article II. The Loan shall be
payable in accordance with the terms of this Agreement and the Note. Anything to
the contrary notwithstanding in this Agreement, the Parties agree that Lender
shall have no obligation to provide any Loan on or after the earliest of any of
the following occur: (A) an Event of Default occurs and/or (Lender shall not be
obligated to make a Loan to or on behalf of ESP in an amount in excess of the
Principal Amount of Loan.
2.2. PROCEDURES FOR DISBURSEMENTS OF FUNDS. Subject to the other
provisions of this Agreement:
(a) On or following the date hereof, ESP shall submit to
Lender a written request for a Loan in the a principal amount of
$200,000,000.00.
(b) Lender shall, subject to the other provisions of this
Agreement, make the Loan requested by ESP within five (5) Business Days (defined
as any day, other than a Saturday or Sunday, on which federally chartered banks
in the United States are open for business) after the receipt by Lender of a
request for funds meeting the requirements of this Agreement. Upon disbursement
to ESP by Lender of any funds under this Agreement, Lender may, at its election,
present the Note to ESP for notation on Schedule A attached hereto of any
additional principal amount outstanding as a consequence of the Loan by Lender.
2.3. PAYMENT OF PRINCIPAL AND INTEREST.
(a) ESP must pay to Lender the Loan Sum, or so much thereof as
shall remain unpaid by no later than the Maturity Date.
(b) All payments of interest or other moneys due under this
Agreement and all repayments of the Loan Sum must, unless Lender otherwise
directs in writing, be made in US Dollars.
(c) ESP may repay the whole or any part of the Loan Sum to
Lender at any time prior to the Maturity Date by giving not less than 30
Business Days notice in writing to Lender. In that event, interest will be
chargeable on the Loan Sum up to and including the date of repayment only.
(d) Any part of the Loan Sum, when repaid, shall not be
available for re-drawing by the Borrower unless Lender otherwise agrees in
writing.
(e) PAYMENT OF INTEREST. All interest accruing under Section
2.3 on any Loan shall be payable to Lender from time to time on the earliest of
each of the following: (i) five (5) Business Days after each anniversary of the
Note, (ii) on any day on which any payment of principal by ESP is made in whole
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or in part and (iii) on any other day in which any payment of principal is
required to be made in whole or in part, including by reason of any acceleration
of the Loans provided that to the extent that Lender has not accelerated the
Loans and principal is payable, paid or required to be paid in part, then the
interest payable pursuant to this Section 2.4 shall relate only to such
principal.
(f) PAYMENT OF PRINCIPAL. The principal of the Loan shall be
paid to Lender from time to time on the earliest of each of the following times:
(i) (A) principal shall be paid in full upon the Maturity Date.; (ii) the date
that Lender declares an acceleration of the Loan pursuant to an Event of Default
and (iii) at such other times as is or may be provided elsewhere in this
Agreement or in the Note. Lender shall have the right, but not the obligation,
to include as an Exhibit to the Note a grid which identifies the payments made
and any such indications or other determinations by Lender relating thereto
shall conclusively be deemed correct except to the extent of any manifest error.
Upon any repayment by ESP to Lender from time to time of any Loans under this
Agreement, Lender may, at its election, present the Note to ESP for notation of
any reduction in principal amount outstanding as a consequence of such
repayment.
(g) OTHER PROVISIONS RELATING TO PAYMENT OF PRINCIPAL AND
INTEREST. All payments of principal and interest shall be paid in United States
dollars and made by wire transfer of immediately available funds to an account
designated from time to time by Lender in writing. Notwithstanding any other
provisions of this Agreement to the contrary, all Loans shall be immediately due
and payable, together with all accrued interest thereon, upon the declaration of
an Event of Default by Lender and acceleration of any Loans by Lender in
accordance with the terms of this Agreement.
2.4. OTHER PROVISIONS. If the outstanding principal amount or the
accrued interest under this Agreement are not paid when due by ESP, without
demand, presentment or notice by Lender of any kind (all of which are expressly
waived by ESP to the extent permitted by applicable law), as and when due in
accordance with this Article II and Article XI, then, in addition to any other
rights or remedies Lender may have in accordance with the terms hereof, Lender
shall have the right, effective upon written notice to ESP, to withhold and
retain, as an offset against principal and interest due hereunder, up to one
hundred percent (100%) of the proceeds from the Standby Letter of Credit.
2.5. PAYMENTS BY ESP. All payments (including prepayments) to be made
by ESP hereunder on account of principal, interest or otherwise shall be made to
Lender without deduction, set-off or counterclaim of any kind or nature
whatsoever unless otherwise agreed to in writing by Lender and except as
otherwise provided in Section 2.5 above. Notwithstanding the preceding sentence,
ESP may set off any such amounts to the extent it has obtained a final
non-appealable judgment against Lender for a fixed amount from a court of
competent jurisdiction, it being agreed that ESP may not set off for more than
such fixed amount.
2.6. TERMINATION. This Agreement may be terminated by ESP at any time
upon written notice to Lender and repayment of the Obligations in full in
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accordance with the terms of this Agreement. Upon any such termination, Lender
agrees to promptly return the original Note to ESP marked "cancelled".
3. CONDITIONS PRECEDENT.
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3.1. CONDITIONS PRECEDENT TO THE INITIAL LOAN. The agreement of Lender
to make each Loan, including the first loan to be made after the date hereof
(the "INITIAL LOAN"), is subject to the satisfaction or written waiver by
Lender, concurrently with the making of each such Loan (except as otherwise
specified herein), of the following conditions precedent:
(a) The obligation of Lender to advance the Loan Sum (or any
part thereof) to ESP, pursuant to any Drawdown Notice, is subject to the
satisfaction of the following conditions precedent and that Lender has first
received all of the following, in form and substance satisfactory to Lender in
its sole discretion.
(b) Upon the execution of this Agreement ESP, and ESP's Bank,
and Lender and Lender's Bank shall respectively arrange and procure for the
issuance of the following:
i) Within two (2) international banking days of signing
this Agreement ESP shall procure issue by ESP's Bank
of a Pre-advice bank to bank message per Exhibit "C".
ii) Within two (2) international banking days of the
receipt by Lender's Bank of the pre-advice bank to
bank message per Section 3.1.(i) above, Lender's bank
shall issue SWIFT MT199 message to the nominated Bank
per text Exhibit "D".
iii) Within five (5) to fourteen (14) international
banking days of SWIFT reply from per text Exhibit "E"
attached, Lender shall procure issue by Lender's Bank
of a Bank to Bank reply to ESP's Bank per the text of
Exhibit "F".
iv) Prior to any request for Drawdown pursuant to this
Agreement, ESP must procure the issue of Standby
Letter of Credit with face value equal to or greater
than the amount of the first Drawdown per Section 1
(b) (i) of Annexure "H", and at all times in
compliance with all requirements of this Agreement.
(c) If any Security provided by ESP pursuant to this Agreement
is not approved of by Lender by reason of the identity of the Issuer, or if the
Security so provided is not negotiable/fundable by Lender in accordance with the
standards set by the banking laws and regulations of the United States, or the
European Union, then ESP may procure that an aval is issued by the Issuer from
its corresponding bank in Western Europe or in the United States, or other
location acceptable to Lender substantially in a form approved by Lender.
(d) The Conditions Precedent in clause 2.5 are for the benefit
of Lender and may be waived or modified by it in writing at any time. If the
conditions precedent are not otherwise complied with by midnight (EST) on the
21st day after the date of this Agreement then Lender may elect at any time
thereafter to terminate this Agreement by notice to ESP whereupon neither party
shall have any further right or claim against the other.
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(e) PERFECTION OF LIENS. All actions reasonably requested by
Lender to assure that it has, and will continue to have, until the final and
indefeasible payment in full of the Loans, a perfected first priority security
interest and Lien in all of the Collateral shall have been effected and Lender
shall have received evidence reasonably satisfactory to it that all such actions
have been effected in all respects.
(f) REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained in this Agreement and each other Transaction Document by
each Person that is a signatory thereto (other than Lender or any Affiliate of
Lender) shall be true and correct in all material respects (and as to those
representations and warranties containing materiality qualifications shall be
true and correct) on and as of the date the Initial Loan is provided as if such
representations and warranties were made on such date, unless such
representation or warranty specifically refers only to a prior date or unless
such representation or warranty has been affected by an occurrence which is
permitted by the terms of this Agreement, such occurrence to be notified by ESP
to Lender.
(g) NO MATERIAL ADVERSE EFFECT. As of the date of execution of
this Agreement, since March 31, 2010 there shall not have occurred any Material
Adverse Effect.
(h) RECEIPT OF OTHER TRANSACTION DOCUMENTS. All of the other
Transaction Documents, in form and substance reasonably satisfactory to Lender,
shall have been properly executed by each Party thereto and delivered to Lender.
(i) NO EVENT OF DEFAULT OR MATERIAL DEFAULT; COMPLIANCE
CERTIFICATE. There shall be no Event of Default or material default, which, with
or without notice or the lapse of time or both, would become an Event of
Default, and Lender shall have received a certificate, in form and substance
reasonably satisfactory to Lender, signed by the chief financial officer or
treasurer of ESP dated as of the making of the Initial Loan, stating that to his
or her actual knowledge (after reading the Transaction Documents for the purpose
of providing such Certificate) (i) all representations and warranties made by
ESP set forth in this Agreement and the other Transaction Documents are true and
correct on and as of such date (unless such representation or warranty
specifically refers to only a prior date or unless such representation or
warranty has been affected by an occurrence which is permitted by the terms of
this Agreement, such occurrence to be notified by ESP to Lender), (ii) on such
date, after giving effect to the Initial Loan, ESP is in compliance in all
material respects with all the terms and provisions set forth in this Agreement
and the other Transaction Documents and (iii) on such date no Event of Default
or other material default, which, with or without notice or the lapse of time or
both, would become an Event of Default has occurred and is continuing, and such
statements shall be true and correct.
(j) NO ORDER; STATUS OF COLLATERAL. No Order shall have been
issued by any Governmental Authority enjoining or otherwise prohibiting, in any
material respect, the consummation of the transactions contemplated by this
Agreement constituting Collateral shall be determined to be invalid in a final
non-appealable judgment.
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(k) CORPORATE DOCUMENTS. Lender shall have received with
respect to ESP and any other parties to the Transaction Documents copies of
their relevant proceedings relating to the transactions contemplated hereby and
thereby, incumbency certificates, copies of Organizational Documents, good
standing certificates, and similar Documents as Lender reasonably requests, and
all such Documents shall be in form and substance reasonably satisfactory to
Lender.
3.2. CONDITIONS PRECEDENT TO ALL LOANS. The obligation of Lender to
make any Loan after the Initial Loan is subject to the satisfaction of each of
the following conditions precedent as of the date of the making of each such
Loan:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by ESP in or pursuant to this Agreement and in any other
Transaction Document shall be true and correct in all material respects (and as
to those representations and warranties containing materiality qualifications,
shall be true and correct) on and as of the dates the Loan is requested to be
provided and is provided as fully as if made on and as of each such date (or if
expressly applicable only to an earlier date, such as financial statements, as
of such date or unless such representation or warranty has been affected by an
occurrence which is permitted by the terms of this Agreement, such occurrence to
be notified by ESP to Lender); provided, however, ESP may provide a supplement
that is attached to and cross referenced in the Compliance Certificate for
events occurring after the date hereof that cause such representations and
warranties to not be true ("SUPPLEMENTAL CERTIFICATES"), provided further that
the condition in this Section shall not be deemed satisfied if (i) the items
contained in any one or more such Supplemental Certificates individually or in
the aggregate do or will have or, in Lender's reasonable good faith judgment may
be expected to have, a Material Adverse Effect or (ii) the events or
circumstances relating to any such items also relate to a material breach or
other default by ESP or any Affiliate of ESP under any Transaction Document.
(b) NO EVENT OF DEFAULT OR MATERIAL DEFAULT; COMPLIANCE
CERTIFICATE. There shall be no Event of Default or material default, which, with
notice or the lapse of time or both, would become an Event of Default, and, in
addition, Lender shall have received a certificate, in form and substance
reasonably satisfactory to Lender, signed by the chief financial officer of ESP,
dated as of the making of the Loan (the "COMPLIANCE CERTIFICATE"), stating that
to his actual knowledge (after reading the Transaction Documents for the
purposes of providing the Compliance Certificate), (i) all representations and
warranties made by ESP in this Agreement and the other Transaction Documents are
true and correct in all material respects on and as of such date, after giving
effect to the Supplemental Certificate attached thereto, (ii) on such date ESP
is in compliance in all material respects with all the terms and provisions set
forth in this Agreement and the other Transaction Documents and (iii) on such
date no Event of Default or material default, which with or without notice or
the passage of time or both will become an Event of Default, has occurred and is
continuing, and the statements therein shall be true and correct.
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(c) NO ORDER; NO JUDGMENT. No Order shall have been issued by
any Governmental Authority enjoining or otherwise prohibiting, in any material
respect the consummation of the other transactions contemplated by this
Agreement.
The request by or on behalf of ESP for each Loan and making of
each Loan by Lender hereunder shall constitute a representation and warranty by
ESP as of the date of such request for borrowing and the date of the making of
the Loan that the conditions in Sections 3.1 (with respect to the Initial Loan)
and 3.2 (with respect to each Loan after the Initial Loan) have been satisfied.
4. DRAWDOWNS
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4.1. Whenever ESP wishes to make a Drawdown it must give to Lender an
irrevocable Drawdown Notice.
4.2. No Drawdown Notice may be given by ESP:
(a) until ESP has complied with the Conditions Precedent;
(b) if ESP is in default of its obligations under this
Agreement or the Securities.
4.3. Any Drawdown requested by ESP pursuant to the Drawdown Notice must
be in accordance with the Drawdown Schedule and must be used only for the
purpose of funding operations and payment of debt.
4.4. Lender shall be required to fund the Drawdown by the making of a
cash advance to ESP in the amount of the Drawdown request.
5. INTEREST, INTEREST CALCULATIONS AND INTEREST PAYMENT.
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(a) The Loans shall bear interest at the Interest Rate.
Interest shall accrue from the date each such Loan is made. Interest on the
Loans shall be calculated on a daily basis on the basis of a 360 day year, and
on the basis of the actual days elapsed, upon the outstanding principal balance,
including by reason of a deferred payment because the scheduled or actual
payment date is not a Business Day.
(b) Without limiting the generality of the term Interest Rate,
if the interest rate calculated in accordance with any provision of this
Agreement for any Loan (including any application of the Default Rate) would at
any time exceed the maximum permitted by the law of the State of New York, then
for such period as such rate would exceed the maximum permitted by such Law (and
no longer) the rate of interest payable on any such Loan shall be reduced to the
maximum permitted by the law of the State of New York and any interest payments
received in excess of such maximum rate shall be repaid to ESP.
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(c) Interest due under this Agreement: (i) accrues from day to
day from and including the due date for payment up to the actual date of
payment, and, as an additional and independent obligation, from the day after
any judgment or other thing into which the liability to pay the Loan Sum becomes
merged; (ii) may be capitalized by Lender at monthly intervals at its absolute
discretion.
(d) Interest due under this Agreement will be (a) computed
from and including the date on which a Drawdown is advanced to ESP; (b)
calculated and charged to ESP's account on the Interest Payment Dates.
(e) ESP shall pay Lender on the Interest Payment Dates
interest on the Loan Sum or on so much of that sum as has been drawn down and
remains unpaid from time to time calculated at the Interest Rate.
(f) ESP will upon demand by Lender pay all reasonable costs
(including reasonable attorneys fees and costs) and expenses and other amounts
incurred or paid by Lender arising in consequence or on account of any default
by ESP or the exercise or purported or attempted exercise of any of Lender's
rights or Powers in reference to this Agreement and the Securities. In addition
ESP must pay any Taxes arising directly or indirectly in respect of the
Agreement and the Securities including, but not limited to, all and any stamp
duties assessed on the same, but in no event shall ESP be obligated to pay any
income taxes, penalties or assessments of any kind incurred by Lender as a
result of this Agreement.
(g) All payments which ESP is required to make under this
Agreement must be made: (i) without any set-off, counterclaim or condition; and
(ii) without any deduction or withholding for any Taxes or any other reason,
unless, and without limiting the operation of clause 5.5, ESP is required to
make the deduction or withholding by applicable law.
(h) If any amount payable by ESP under this Agreement is not
expressed to be payable on a specified date that amount is payable by ESP on
demand by Lender.
6. SECURITIES
----------
6.1. As security for the performance of ESP contained in this Agreement
ESP will at its sole cost and expense procure for Lender the Securities.
6.2. ESP acknowledges that it is an essential and fundamental term and
condition of this Agreement that where the Securities comprise one or several
Stand-by Letters of Credit that such instruments are confirmable and are
confirmed and cleared as valid and authentic by secure SWIFT communication
between the respective Banks of the parties to this Agreement.
6.3. ESP will punctually and duly perform all of the obligations
stipulations and covenants on the part of ESP contained in or implied by the
Securities or will procure that the parties to the Securities (other than
Lender) will duly and punctually perform all of their respective obligations
stipulations and covenants therein contained to the intent that default in such
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performance and observance will constitute a default under this Agreement and
all moneys secured by this Agreement may be recovered by Lender exercising its
rights and Powers under this Agreement or under the Securities or any of them
without prejudice to Lender's rights under the other. The moneys secured by this
Agreement are the moneys secured by the Securities, and neither this Agreement
nor the Securities are in any way secondary to the other and Lender shall be
entitled to enforce either this Agreement or the Securities without any
reference to the other.
6.4. Where any Stand-by Letter of Credit forming part of the Securities
is for a term or terms which expires on a date prior to the Maturity Date, ESP
must (unless Lender, in its discretion, decides otherwise) ensure that such term
or terms is or are renewed at its cost and expense for successive periods of at
least one year and one day and provided ESP is not otherwise in default under
this Agreement, Lender will release and return to ESP all of the Stand-by
Letters of Credit as it then holds, or pay the face value of such Stand-by
Letter(s) of Credit to ESP in Cleared Funds.
7. REPRESENTATIONS AND WARRANTIES.
------------------------------
ESP represents and warrants to Lender, knowing and intending that
Lender will rely thereon in making each Loan, that the following statements are
true and accurate:
7.1. ORGANIZATION AND QUALIFICATION. ESP is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada. ESP has the power and authority, and all necessary Governmental
Authorizations, to own, lease, operate and encumber its assets and to carry on
its business as now conducted. ESP is duly qualified and in good standing in
each jurisdiction where such qualification is required, except for any
qualifications not obtained which would not be reasonably expected to have a
Material Adverse Effect on ESP.
7.2. DUE AUTHORIZATION. The execution, delivery and performance by ESP
of this Agreement and the other Transaction Documents are within ESP's power and
authority, and have been duly authorized by all necessary action on the part of
ESP. ESP has delivered to Lender true and complete copies of ESP's resolutions
necessary to authorize the transactions contemplated by this Agreement and the
other Transaction Documents and of ESP's Organizational Documents in effect on
the date of the Initial Loan, all certified by a duly authorized officer of ESP.
7.3. NO DEFAULT; COMPLIANCE WITH LAWS. The execution, delivery and
performance by ESP of this Agreement and the other Transaction Documents do not
and will not (i) violate any of ESP's Organizational Documents, and/or any
material United States or foreign federal, state or local regulation, rule,
statute, ordinance, judicial decision or other law of any kind or nature
whatsoever, including any Order of any Governmental Authority applicable to ESP
or its assets (collectively, "LAW" or "LAWS"), (ii) constitute a material
default under (including a breach of) any Document filed by ESP with the SEC to
which ESP is a Party or by which ESP or its assets is subject or bound (any
consents required thereby having previously been obtained), after giving effect
to any applicable grace periods thereto, or (iii) result in the imposition of
any Lien, including any restriction on any assets of ESP (except for the Liens
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granted to Lender, and the restrictions in favor of Lender, contained in this
Agreement and the other Loan Documents). Except for defaults which individually
or in the aggregate are not material, ESP is not in default under any Document
to which it is a party or by which it or its assets is otherwise bound or
subject. This Agreement and each Transaction Document to which ESP is a party or
to which ESP or its assets is subject or bound has been duly executed and
delivered on behalf of ESP and are, and as to those Transaction Documents to
which ESP hereafter becomes a party, subject or bound will be, legal, valid and
binding obligations of ESP, enforceable against ESP in accordance with their
respective terms.
7.4. NO REQUIRED GOVERNMENTAL AUTHORIZATIONS. No Governmental
Authorization is required by, and no other action is required by, and no notice
or filing is required to be given to or made with, any Governmental Authority or
other Person for the due execution, delivery and performance by ESP of, or for
the validity or enforceability of, this Agreement or any other Transaction
Document.
7.5. NO MATERIAL ADVERSE EFFECT. As of the date of execution of this
Agreement, since March 31, 2010 there has not been, and ESP has not suffered or
otherwise incurred, a Material Adverse Effect.
7.6. PERFECTED FIRST PRIORITY LIENS. The security interest and other
Liens granted in the Collateral by ESP constitute first priority Liens in the
Collateral in favor of Lender. No Person other than Lender has any Liens in the
Collateral. ESP acknowledges that any Liens against the Collateral in favor of
any Person other than Lender would constitute a violation of Article IX hereof.
7.7. TITLE; ABSENCE OF LIENS. ESP has good and marketable title to all
of the Collateral. None of the Collateral is subject to any prohibition against
encumbering, pledging, hypothecating or assigning the same or requires notice or
consent (except where consent has been previously and properly obtained) in
connection therewith.
7.8. COMPLIANCE WITH LAWS. ESP is in compliance in all material
respects with all Laws applicable to ESP or the conduct of its business or the
ownership or the ability to negotiate the Collateral. ESP has not received any
written notice alleging any violation of any such Laws.
7.9. NO PROCEEDINGS. As of the date of execution of this Agreement,
there are no Proceedings of any kind or nature whatsoever, including any before
any arbitrator or Governmental Authority, pending or, to ESP's knowledge,
threatened against ESP that may, individually or in the aggregate, be reasonably
expected to have a Material Adverse Effect. All material pending or threatened
Proceedings are described in ESP's March 31, 2010 Annual Report on Form 10-K, in
the footnotes to the financial statements.
7.10. DELIVERY OF DOCUMENTS. All originals or copies of Transaction
Documents and Documents relating to the Secured Assets provided by or on behalf
of ESP to or on behalf of Lender are true, correct and complete.
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7.11. NO VIOLATIONS; TAXES AND ASSESSMENTS. ESP is not in, and no event
or condition has occurred and is continuing which constitutes or results in (in
each case with or without the giving of notice, lapse of time or both), (a) a
default under any term of its Organizational Documents or under any Document
filed by ESP with any governmental authority to which ESP is a party or by which
ESP or any of its assets is subject or bound, except for defaults which will not
have, and could not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, or (b) the imposition of any Lien or
restriction on any Secured Asset. ESP has filed all material federal, state and
local tax returns and other tax reports it is required to file (or has obtained
valid, written extensions which are in full force and effect as to any not so
filed), except where the failure to do so would not be reasonably expected to
have a Material Adverse Effect. ESP has paid all taxes, assessments and other
governmental charges due and payable, except those contested in good faith and
has made adequate provision for the payment of such taxes, assessments and
charges accrued but not yet payable or contested in good faith.
7.12. ENVIRONMENTAL MATTERS. Without limiting the generality of the
other provisions of the Agreement, (a) ESP has been and is in compliance with
(i) all Laws relating to environmental conditions or other environmental matters
of any kind or nature ("ENVIRONMENTAL LAWS") (including that there has been no
release of any hazardous materials by ESP that has not been in compliance in all
material respects with applicable Environmental Laws) and (ii) all Governmental
Authorizations that are required pursuant to Environmental Laws and (b) there
are no claims relating to any actual or alleged environmental Liabilities
pending against or, to ESP's knowledge, threatened against it, except for any
non-compliance and/or claims which will not have or could not be reasonably
expected to have, individually or in the aggregate, a Material Adverse Effect.
To ESP's knowledge, ESP is not subject to any material Liability relating to any
environmental condition or other environmental matter of any kind or nature,
including any past or present use, management, transport, treatment, generation,
storage, disposal, release or other handling of any hazardous materials, which
could be reasonably expected to have a Material Adverse Effect.
7.13. OTHER REPRESENTATIONS. No part of ESP's business is conducted
through any unincorporated association or other Person. ESP has not, within the
five (5) years preceding the date of this Agreement (a) changed its name, (b)
used any name other than ESP, Inc., or (c) merged or consolidated with, or
acquired all or substantially all of the assets of, any other Person or
business. No part of the proceeds of any Loan will be used, directly or
indirectly, to purchase or carry any "margin stock" (as defined in Regulation U
issued by the Board of Governors of the Federal Reserve System), to extend
credit to others for the purpose of purchasing or carrying any such margin
stock, or for any other purpose that violates any provision of Regulations G, T,
U or X issued by the Board of Governors of the Federal Reserve System. ESP is
not an "investment company" registered or required to be registered under the
Investment Company Act of 1940, as amended, nor is ESP controlled by any such
entity.
7.14. REPRESENTATIONS AND WARRANTIES APPLICABLE TO SUBSIDIARIES. All of
the representations and warranties made, or hereafter reaffirmed or deemed made
or reaffirmed, apply to each then existing Subsidiary of ESP, as fully in all
respects as if each representation or warranty specifically so stated.
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7.15. REAFFIRMATION. All of the representations, warranties and
statements made herein shall survive until the full and final and indefeasible
payment of the principal of and interest on the Loans. ESP's requesting any Loan
hereunder ("REQUESTED LOAN") and/or ESP's acceptance of each Loan under this
Agreement shall each automatically constitute, without any further action of any
kind or nature whatsoever on the part of ESP, a complete reaffirmation, as of
the date of each Requested Loan and/or the making of each such Loan, of the
representations and warranties set forth in this Agreement and in the other Loan
Documents and the Research Agreement (or, as to those representations and
warranties expressly applicable only to any earlier date, such as financial
statements, as of such date) as fully as if all such representations were fully
repeated in all respects. Lender's requiring or not requiring from time to time
a Compliance Certificate confirming same shall not in any manner diminish each
such deemed reaffirmation or otherwise change the effect of the preceding
sentence.
8. AFFIRMATIVE COVENANTS.
---------------------
ESP covenants and agrees that, until the later of (i) full and final
payment of the principal of the Loans and all interest thereon and all other
payment obligations under this Agreement and (ii) the expiration of any
obligation by Lender to make any further Loans to ESP, ESP shall, and shall
cause its Subsidiaries to:
8.1. MAINTENANCE. Maintain and preserve in full force and effect its
existence and good standing and all other rights, powers, franchises, licenses
and qualifications necessary for its ownership, lease or use of its assets
and/or the conduct of its business, shall pay before they become delinquent all
taxes, assessments and governmental charges lawfully imposed upon it or any of
its assets or required to be collected by it, and shall pay, when due, all other
Liabilities of any kind or nature now or hereafter owing by it provided that ESP
may delay the payment of any such Liabilities contested in good faith by it.
8.2. COMPLIANCE WITH LAWS. Comply in all material respects with all
applicable Laws.
8.3. NOTICE OF ADVERSE EVENTS. Promptly notify Lender in writing of the
occurrence or existence of any of the following: (a) any Event of Default, any
material default which, with the giving of notice, lapse of time or both, would
become an Event of Default, or any other event, circumstance or condition which
constitutes, or would reasonably be expected to in the future constitute or
cause, a Material Adverse Effect; (b) any material, adverse Proceeding that
relates to any of the Secured Assets filed or instituted by or against it, or to
its knowledge threatened by or against it, which would be reasonably expected to
have a Material Adverse Effect, and (c) any of the representations and
warranties by it contained in this Agreement or any other Loan Document ceases
to be materially true, correct and complete (or true, correct and complete as to
representations and warranties qualified by materiality).
8.4. OTHER PROVISIONS. ESP will from time to time, take such further
actions, including the execution and delivery of such Documents, as Lender may
reasonably request in order to carry out the purposes of this Agreement and the
other Transaction Documents (including to provide Lender with a first priority
perfected lien in the Collateral). ESP shall maintain complete and accurate
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books and records in accordance with GAAP of all its operations and assets,
including records of the Collateral.
9. NEGATIVE COVENANTS
------------------
Any of the financial thresholds mentioned in this Section 9 shall
relate in aggregate to ESP including its subsidiaries.
ESP covenants and agrees that, until the later of (i) full and final
payment of the principal of the Loans and all interest thereon and all other
payment Obligations under this Agreement and the other Loan Documents, and (ii)
the expiration of any obligation by Lender to make any further Loans to ESP, ESP
shall not, directly or indirectly, and will not permit any of its Subsidiaries
to, directly or indirectly:
9.1. AMENDMENTS OF DOCUMENTS. Amend, supplement, restate or otherwise
modify (including terminate) any Document that constitutes a Secured Asset if
such amendment, supplement, restatement or other modification would be
reasonably expected to have a Material Adverse Effect.
9.2. CONSOLIDATION, MERGER, OR ACQUISITIONS; LIQUIDATION. Enter into
any merger, consolidation, reorganization or recapitalization or sale of all or
substantially all of its assets without the prior written consent of Lender,
which will not be unreasonably withheld, other than (i) a merger in which ESP is
the surviving corporation, or (ii) a merger in which the surviving corporation
(other than ESP) expressly assumes its obligations under this Agreement and the
other Transaction Documents in writing and agrees to be bound hereby and
thereby; provided that it is agreed that Lender may for any reason withhold its
consent to any such transaction that would result in a Change of Control of ESP
(except as permitted in Section 10.10); or take any steps in contemplation of
dissolution or liquidation.
9.3. OTHER LIENS. Create or permit to exist any Lien upon or with
respect to any of the Collateral, whether now owned or hereafter acquired.
9.4. Omitted.
9.5. Omitted.
9.6. Omitted.
9.7. Omitted.
9.8. TRANSACTIONS WITH AFFILIATES. Enter into any transaction with any
Affiliate on a basis less favorable to ESP than if such transactions were at
arm's length transaction with a third-party that is not an Affiliate of ESP.
9.9. OTHER COVENANTS. (a) change, alter or modify, or permit any
change, alteration or modification of, its Organizational Documents in a manner
materially adversely affecting Lender; (b) change any of the following prior to
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giving Lender 15 Business Days written notice: (i) the location stated in
Article 7 for the maintenance of its books and records, principal place of
business or chief executive office, or (ii) the name under which ESP conducts
any of its business or operations; or (c) enter into any agreement or other
Document containing any provision that would be violated by the performance or
observance of any of ESP's obligations under this Agreement or any other
Transaction Document.
9.10. SUBSIDIARIES. Permit any Subsidiary to own or acquire any
Intellectual Property that, if owned or acquired by ESP, would be or become a
Secured Asset.
10. EVENTS OF DEFAULT.
-----------------
At such times as any Loans are then outstanding hereunder, the
occurrence of any of the following shall constitute an event of default ("EVENT
OF DEFAULT").
10.1. FAILURE TO PAY. ESP fails to pay within (a) five Business Days of
the due date any principal of or interest on any Loan, whether due pursuant to
any principal payment date, any required prepayment date, any acceleration or
otherwise, or (b) ten (10) Business Days after Lender correctly gives notice
that any monetary Obligation other than principal and interest is due to Lender
pursuant to the terms of any Loan Document.
10.2. FAILURE TO PERFORM OR OBSERVE COVENANTS. ESP fails to perform or
observe in any material respect any covenant, term, condition or other
non-monetary Obligation of this Agreement or any other Transaction Document;
provided that such event shall be an Event of Default only if such default
continues for a period of ten (10) Business Days after Lender has given to ESP
written notice stating such default has occurred.
10.3. SECURITY. Lender shall not have as of the date hereof or shall at
any time hereafter cease to have a valid and perfected first priority Lien in
all of the Collateral other than as a result of any act or omission of Lender,
including that (i) the grant of the Lien in any of the Collateral shall never
have been effective or shall cease to be effective to grant to Lender (or Lender
shall otherwise not have obtained or cease to have) a perfected first priority
security interest and Lien in all of the Collateral.
10.4. TRANSACTION DOCUMENTS. There is a non-appealable judgment that
this Agreement or any other Transaction Document shall not have been as of the
date hereof, or shall cease to be, valid, effective and enforceable in any
material respect.
10.5. FALSE REPRESENTATION OR WARRANTY. Any representation, warranty or
statement by ESP contained in this Agreement or any other Transaction Document
when made, reaffirmed or hereby deemed made or reaffirmed is or was, when made,
reaffirmed or hereby deemed made or reaffirmed, materially incorrect.
10.6. Omitted.
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10.7. CESSATION OF BUSINESS. (a) ESP ceases to do business as a going
concern; or (b) the termination, suspension or loss of any Governmental
Authorization or other asset occurs which results in ESP having to cease a
substantial part of its operations by reason of such loss for a period of more
than twenty (20) Business Days; (c) without limiting the generality of Section
7.9, ESP takes any action to authorize its liquidation or dissolution or suffers
any liquidation or dissolution; (d) any Governmental Authority, or other entity
with power to do so, commences proceedings to condemn, seize or expropriate
assets of ESP necessary for the conduct of ESP's business and such proceedings
remain Un-dismissed for twenty (20) Business Days, or ESP abandons such assets
or suspends operation thereof for a period of twenty (20) Business Days.
10.8. INABILITY TO PAY DEBTS; BANKRUPTCY OR INSOLVENCY. Any one or more
of the following occur: (a) ESP shall commence any Proceeding (i) under any
existing or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or other relief of debtors, seeking to
have an order for relief entered with respect to it or seeking to adjudicate it
a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition with creditors or other
similar relief with respect to it or its debts, or (ii) seeking appointment of a
receiver, trustee, custodian or other similar official for it or for all or any
substantial part of its assets, or ESP shall make a general assignment for the
benefit of its creditors or a bulk sale; (b) there shall be commenced against
ESP any Proceeding of a nature referred to in clause (i) above which (A) results
either in the entry of an Order for relief or an appointment and any such Order
or appointment remains un-dismissed in a manner reasonably satisfactory to
Lender ("UN-DISMISSED") for a period of twenty (20) Business Days; the foregoing
shall include the commencement against ESP of any Proceeding seeking issuance of
a warrant of attachment, execution, distraint or similar process against all or
any substantial part of its assets which results in the entry of an Order for
any such relief which remains Un-dismissed in a manner reasonably satisfactory
to Lender for twenty (20) Business Days; or (c) ESP takes any action
substantially in furtherance of, or expressly authorizing or indicating its
consent to, approval of or acquiescence in or expressly proposes to take any of
the acts set forth in clause (a) or (b) above; or (d) ESP shall generally not be
able to or fail to, or shall expressly admit in writing its inability to, pay
its debts generally as they become due.
10.9. Omitted.
10.10. CHANGE OF CONTROL. There occurs a Change of Control of ESP.
"CHANGE OF CONTROL" means any of the following: (i) any person shall become the
beneficial owner, directly or indirectly, of ESP's securities representing fifty
percent (50%) or more of the voting power of all then outstanding securities of
ESP having the right under ordinary circumstances to vote in an election of the
Board of Directors (including that any ESP securities that any such person has
the right to acquire pursuant to any agreement, or upon exercise of conversion
rights, warrants or options, or otherwise, shall be deemed beneficially owned by
such person); (ii) there shall be consummated any corporate transaction,
including a consolidation or merger, of ESP in which ESP is not the continuing
or surviving corporation or pursuant to which shares of ESP's capital stock are
converted into cash, securities or other property, OTHER THAN (x) a
consolidation or merger of ESP in which the holders of ESP's voting stock
immediately prior to the consolidation or merger shall, upon consummation of the
consolidation or merger, own at least fifty percent (50%) of the voting stock of
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the surviving entity after such consolidation or merger or (y) a consolidation,
merger or other corporate transaction.
11. REMEDIES.
--------
11.1. RIGHTS UNDER TRANSACTION DOCUMENTS. ESP acknowledges that certain
rights and remedies of Lender upon an Event of Default are provided in this
Agreement.
11.2. RIGHTS IN GENERAL. Upon or at any time after the occurrence of
any Event of Default Lender shall have the option, from time to time, to effect
one or more of the following (to be effected by written notice by Lender), (a)
all obligations of Lender to make any Loans after the occurrence of an Event of
Default shall terminate, (b) the principal and interest of the Loans and all
other Obligations shall become and be immediately due and payable, without
presentment, demand, protest, or further notice of any kind or nature
whatsoever, all of which are, to the maximum extent permitted by applicable law,
hereby expressly waived by ESP, (c) Lender shall be entitled to exercise
forthwith (to the extent and in such order as Lender may elect, in its sole and
absolute discretion) any and/or all rights and remedies provided to Lender in
this Agreement and/or any other Transaction Document, all rights and remedies of
Lender under the UCC, and all other rights and remedies that may otherwise be
available to Lender pursuant to any other Document, at law or in equity.
11.3. SETOFF RIGHTS. To the extent that ESP does not timely pay any
amounts under this Agreement or under any other Loan Document, Lender and/or its
Affiliates shall at any time and from time to time have the right to set-off all
of its payment obligations under the Stand-by Letter of Credit against any
amounts due hereunder (including any due by reason of any acceleration) or
thereunder. Upon the occurrence of an Event of Default, Lender is hereby
authorized at any time and from time to time, without notice to ESP (any such
notice being expressly waived by ESP), to set off and apply (and/or to cause any
Affiliate of Lender to set off and apply) any and all amounts due by Lender
and/or any Affiliate of Lender to ESP against any or all of the Obligations of
ESP now or hereafter existing under this Agreement or any other Loan Document,
irrespective of whether or not (a) Lender and/or such Affiliate shall have made
any demand and (b) any such Obligations may be unmatured. ESP further agrees
that the rights stated in this Section 11.3 are in addition to other rights and
remedies (including other rights of set-off such as those pursuant to Section
2.4 hereof) that Lender may have.
11.4. ADDITIONAL RIGHTS TO TERMINATE THIS AGREEMENT. If all of the
conditions precedent to the Initial Loan shall not have been satisfied by ESP,
Lender shall have the right, at its election, to terminate this Agreement and/or
not make any further Loans pursuant to this Agreement. Such termination shall be
treated as an Event of Default for the purposes of this Agreement, including for
the purposes of determining Lender's rights and remedies pursuant to this
Article XI hereof.
11.5. CUMULATIVE REMEDIES; NO WAIVER BY LENDER. No remedy referred to
in this Agreement is intended to be exclusive, but each shall be cumulative and
in addition to any other remedy referred to in this Agreement or otherwise
available to Lender pursuant to any other Transaction Document, at law or in
equity. No express or implied waiver by Lender of any default or Event of
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Default shall in any way be, or be construed to be, a waiver of any future or
subsequent default or Event of Default. Any failure or delay of Lender in
exercising any rights granted it hereunder and/or under any other Transaction
Document, including upon any occurrence of any of the contingencies set forth
herein, shall not constitute a waiver of any such right upon the continuation or
recurrence of any such contingency or similar contingencies, and any single or
partial exercise of any particular right by Lender shall not exhaust the same or
constitute a waiver of any other right.
11.6. WAIVERS AND CONSENTS RELATING TO REMEDIES. In connection with any
action or proceeding relating to this Agreement, any of the Loans, any of the
other Transaction Documents, any of the Collateral, or any act or omission
relating to any of the foregoing: (a) ESP AND LENDER WAIVE THE RIGHT TO TRIAL BY
JURY; (b) ESP agrees and consents to service of any summons, complaint or other
process by delivery of such documents to ESP's counsel ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ at ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or, in the
alternative, in any other form or manner permitted by law; (c) ESP agrees that
all of the Collateral constitutes security for all of the Obligations, and
agrees that Lender shall be entitled to sell, retain or otherwise deal with any
or all of the Collateral, in any order or simultaneously as Lender shall
determine in its sole and absolute discretion; without limiting the generality
of the foregoing, such rights shall be free of any requirement for the
marshaling of assets or any other restriction that, in the absence of this
Agreement and/or the Transaction Documents, may be placed upon Lender in dealing
with the Collateral; (d) ESP consents to any of the following by Lender: (A) any
extension, postponement of time of payment or other indulgence, (B) any
substitution, exchange or release of or failure to perfect or failure to
continue perfection of Collateral, (C) any addition to, or release of, any
Person primarily or secondarily liable for the Obligations, and (D) after the
occurrence and during the continuance of an Event of Default any acceptance of
partial payments and the settlement, compromise or adjustment thereof.
11.7. POWERS OF ATTORNEY. ESP hereby constitutes and appoints Lender
(and any employee or agent of Lender, with full power of substitution) its true
and lawful attorney and agent in fact to take any or all of the actions
described below in Lender's or ESP's name and at ESP's expense:
(a) OTHER ACTIONS. Lender may take any and all action that it
reasonably deems necessary or appropriate to preserve its interest in the
Collateral; to the extent same relates to any default by ESP hereunder or under
any other Transaction Document, ESP shall reimburse Lender for same on demand.
All sums payable by ESP to Lender under Sections 11.7(a) and 11.7(b) herein
shall constitute Obligations, shall be secured by the Collateral, and shall be
payable on ten (10) Business Days notice with interest at the Interest Rate from
the respective dates such sums are expended.
(b) LENDER'S RIGHT TO CURE. In the event ESP fails to perform
any of its Obligations within ten (10) days following notice from Lender, then
Lender may from time to time perform the same but shall not be obligated to do
so (including that Lender shall not be required to perform any Obligations which
are the same type as those which Lender may have at any time hereafter elected
to perform).
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(c) COLLECTIONS; MODIFICATION OF TERMS. Upon the occurrence
and during the continuance of any Event of Default, Lender may (i) demand, ▇▇▇
for, collect and give receipts for any money, instruments or property payable or
receivable on account of or in exchange for any of the Collateral, or make any
compromises it deems necessary or proper, including extending the time of
payment, permitting payment in installments, or otherwise modifying the terms or
rights relating to any of the Collateral, all of which may be effected without
notice to or consent by ESP and without otherwise discharging or affecting the
Obligations, the Collateral or the Liens granted under any of the Loan
Documents, and (ii) take any actions Lender reasonably elects relating to the
Collateral, subject to Section 11.1.
(d) IRREVOCABILITY. Except as may be provided to the contrary
in this Section 11.7 with respect to any power, ESP covenants and agrees
[*****]. ESP further covenants and agrees that the powers of attorney granted by
this Section 11.7 are coupled with an interest and shall be irrevocable until
the later of full and final payment of the principal of the Loans and all
interest thereon and all other payment obligations under this Agreement and the
other Loan Documents, that said powers are granted solely for the protection of
Lender's interest and Lender shall have no duty to exercise any thereof; that
the decision whether to exercise any of such powers, and the manner of exercise,
shall be solely within Lender's discretion; and that neither Lender nor any of
its directors, officers, employees or agents shall be liable for any act of
omission or commission, or for any mistake or error of judgment, in connection
with any such powers except any act of commission constituting gross negligence
or willful misconduct.
12. COSTS, EXPENSES AND TAXES; INDEMNIFICATION; LIMITATIONS ON LENDER'S
LIABILITY.
--------------------------------------------------------------------------------
12.1. COSTS AND EXPENSES. ESP agrees to pay on demand (a) all losses,
costs and expenses (including reasonable fees and expenses of attorneys and
accountants, including any such reasonable fees and expenses of attorneys and
accountants incurred to enforce any rights of Lender or obligations of ESP
hereunder or under any other Loan Document) from time to time incurred by Lender
relating to the enforcement of this Agreement and/or any of the other Loan
Documents and/or (b) the preservation of any rights (including remedies) of
Lender under this Agreement and/or any other Loan Document. With respect to any
amount advanced or expended by Lender and required to be reimbursed by ESP
pursuant to the foregoing provisions of this Section 12.1, ESP shall also pay
Lender interest on such amount at the Interest Rate, such interest to commence
from the date of advance or expenditure. ESP's obligations under Sections 12.1
and 12.2 shall survive termination of the other provisions of this Agreement.
12.2. INDEMNIFICATION BY ESP. ESP hereby covenants and agrees to
indemnify, defend and hold harmless Lender and its officers, directors,
employees and agents (and hereby releases each such Person) from and against any
and all claims, demands, damages, Liabilities, costs and expenses (including the
reasonable fees and out-of-pocket expenses of counsel), other Proceedings and
losses of any kind or nature whatsoever which may be incurred or suffered by or
asserted against or threatened to be asserted against Lender or any such other
Person relating to this Agreement or any Loan, including: (a) any Proceeding
relating to any of the Collateral in which Lender or any of its Affiliates has
the right to enforce its rights hereunder or thereunder or any act or omission
relating to any of the foregoing, (b) any taxes, Liabilities, claims or damages
-25-
relating to the Collateral or Lender's Liens thereon; or (c) the correctness,
validity or genuineness of any instruments or other Documents that may be
released or endorsed to ESP by Lender (which shall automatically be deemed to be
without recourse to Lender in any event), except if the foregoing results from
the gross negligence of willful misconduct of Lender or its employees or agents.
The foregoing provisions of this Section 12.2 shall not constitute a release of
Lender from its obligation to make Loans pursuant to and subject to the terms
hereof, to the extent it breaches its obligation to do so.
12.3. LIMITATIONS ON LENDER'S LIABILITY.
(a) NO INQUIRY OBLIGATION OF LENDER. Lender shall not be
obligated to inquire into the accuracy, correctness, or reasonableness of any
Document furnished to it in connection with any Requested Loan.
(b) NO OBLIGATION OF LENDER. Lender shall not have any
responsibility whatsoever as to use of any Loan. Anything to the contrary in
this Agreement notwithstanding, any approval or non-approval by Lender of any
one or more matters involving any Transaction Document, any of the work done
pursuant thereto or any other actions contemplated by any such Document shall
not create any responsibility or liability of any kind or nature whatsoever for
Lender or in any manner reduce or otherwise affect its rights to repayment of
the Loans.
(c) NO RELIANCE ON LENDER'S PROCEDURES. ESP shall have no
right to rely upon any procedure required by Lender under any Transaction
Document, such procedures being for the sole protection of Lender and no other
Person. Further, Lender is entitled to take any discretionary action permitted
under any Transaction Document solely for its own protection.
13. OTHER PROVISIONS.
----------------
13.1. ENTIRE AGREEMENT; AMENDMENTS; LENDER'S CONSENT. This Agreement
and the other Loan Documents supersede, with respect to their subject matter,
all prior and contemporaneous agreements, understandings, inducements or
conditions among or between the Parties, whether express or implied, oral or
written, and constitute the entire agreement of the Parties. No amendment or
waiver of any provision of this Agreement or any Loan Document, nor consent to
any departure by any Party therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Party against whom enforcement is
sought, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. To the extent this
Agreement and any other Loan Document are actually inconsistent, then this
Agreement shall control except to the extent otherwise expressly provided in
this Agreement or any other Loan Document. If a Schedule is not attached hereto,
or such Schedule does not contain all information contemplated hereby, then
ESP's disclosure re: same shall for the purposes of this Agreement be "none" or
"no exceptions".
13.2. SPECIFIC PERFORMANCE. Subject to the provisions of Section 12.3,
in the event of any breach or threatened breach of any provision of this
Agreement, an aggrieved Party shall have the right, in addition to any other
rights existing in its favor under this Agreement, to enforce its rights and to
enforce the obligations of the breaching Party by an action or actions for
-26-
specific performance and/or injunctive or other equitable relief in order to
enforce or prevent any actual or threatened violations of the provisions of this
Agreement. The exercise of any such rights shall not require the posting of any
bond or other consideration or the proof of any actual damages.
13.3. NOTICES. All notices and other communications relating to this
Agreement or any of the other Loan Documents to be effective shall be in writing
(including by telecopy), and shall be deemed to have been duly given or made
when delivered by hand, or three Business Days after delivery to a nationally
recognized overnight courier service (against a signed receipt) or, in the case
of telecopy notice, when sent and confirmed as received,
addressed to ESP at:
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
with copies to:
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇;
▇▇▇▇▇▇▇▇▇▇ & ASSOCIATES ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ # ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
and to Lender at:
with a copy to:
▇▇▇▇▇ & COMPANY
▇▇▇▇▇▇ ▇▇▇▇▇, Esq
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
or to such other address as the respective Party or its successors or assigns
may subsequently designate by proper notice.
13.4. NO THIRD PARTY BENEFICIARIES. The Parties do not intend that any
other Person shall be a third party beneficiary of this Agreement or that this
Agreement shall otherwise inure to the benefit of any third party, including
that the Parties intend and agree that no other Person shall have the right to
enforce any obligation hereunder. Without limiting the generality of the
foregoing, Loans that are used to make advances or other payments directly to
any Person other than ESP shall not in any manner create or be deemed a
recognition by Lender of any third party beneficiary status of any such Person.
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13.5. JOINT EFFORTS. This Agreement and each of the other Loan
Documents shall each be construed to be the joint efforts of the Parties and
shall not be construed more severely against any one Party.
13.6. GOVERNING LAW. This Agreement and the other Loan Documents shall
be governed by, and construed in accordance with, the laws of the State of New
York (except to the extent otherwise expressly provided in any other Loan
Document) without giving effect to the principles of conflicts of laws.
13.7. OTHER PROVISIONS. ESP shall take all actions, including the
execution and delivery of all Documents, reasonably requested by Lender with
respect to the transactions contemplated hereby. Throughout this Agreement, the
masculine shall include the feminine and vice versa and the singular shall
include the plural and vice versa, unless the context of this Agreement
indicates otherwise. This Agreement shall be binding upon and inure to the
benefit of ESP and Lender and shall not be assignable without the prior written
consent of the other Party, which consent shall not be unreasonably withheld or
delayed (except that Lender may assign this Agreement to an Affiliate without
ESP's consent and except as permitted under Section 9.2), except that no
assignments hereof shall relieve any assigning Party of its obligations
hereunder and any such assigning Party shall continue to be a primary obligor as
fully as if such assignment had not occurred. Any purported assignment not made
in accordance with the terms hereof shall be void. This Agreement may be
executed by fax and in any number of counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute but one and the same agreement. Subject to Section 10.4 hereof, any
provision of this Agreement, the Research Agreement and/or any of the other Loan
Documents that 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 of this
Agreement, the Research Agreement and/or such other Loan Documents, as
applicable, or affecting the validity or enforceability of such provision in any
other jurisdiction and each provision which is not wholly unenforceable shall be
enforced to the maximum extent permitted by law. The table of contents, headings
and schedule of defined terms preceding the text of this Agreement are inserted
solely for convenience of reference and shall not constitute a part of this
Agreement nor affect its meaning, construction or effect. The phrase "amended,
supplemented, restated or otherwise modified" and other reasonably similar
phrases include any change by way of waiver and includes extensions, renewals,
re-financings and replacements. The terms "default", "default under any
Document" and similar terms includes any breach of any Document and any
noncompliance with, and any failure to observe, the terms of any Document. Any
brokerage, commission or finder's fee payable in connection with the Loans and
the transactions contemplated hereby is payable by the Party incurring same and
such Party incurring same shall indemnify the other Party in respect of same.
13.8. NO AGENCY RELATIONSHIP. The Parties agree that neither Party is
in any respect the agent of the other Party for any purpose of any kind or
nature whatsoever.
13.9. FURTHER ACKNOWLEDGMENTS AND AGREEMENTS OF ESP AND LENDER. ESP and
Lender acknowledge and agree that they (i) have independently reviewed and
approved the provisions of this Agreement, including the Exhibits attached
hereto and any and all other Documents as they or their counsel have deemed
-28-
appropriate, and (ii) have entered into this Agreement and have executed the
other Transaction Documents executed by them voluntarily, without duress or
coercion, and have done all of the above with the advice of their legal counsel.
ESP acknowledges and agrees that, to the extent deemed necessary by them or
their counsel, they and their counsel have independently reviewed, investigated
and/or have full knowledge of all aspects of the transactions and the basis for
the transactions contemplated by this Agreement or any other Transaction
Documents and/or have chosen not to so review and investigate (in which case,
ESP acknowledges and agrees that it has knowingly and upon the advice of counsel
waived any claim or defense based on any fact or any aspect of the transaction
that any investigation would have disclosed), including the risks and benefits
of the various waivers of rights contained in this Agreement (including the
waiver of the right to a jury trial).
IN WITNESS WHEREOF, the undersigned have set their hands and seals
or caused these presents to be executed by their proper officers and sealed with
their seal the day and year first above written.
(Corporate Seal) ENVIRONMENTAL SERVICE PROFESSIONALS, INC.
Attest:
By: By:
---------------------------- --------------------------
Name: Name: ▇▇ ▇▇▇▇▇▇
---------------------------- --------------------------
Title: Title: President
---------------------------- --------------------------
LENDER
By: By:
---------------------------- --------------------------
Name: Name:
---------------------------- --------------------------
Title: Title:
---------------------------- --------------------------
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EXHIBIT A
DRAWDOWN NOTICE
TO: Lender
Pursuant to the Loan Agreement dated May 26, 2010;
(a) I give you irrevocable notice that Environmental Service
Professionals, Inc. wishes to draw on __________ _____ 2010 ("Drawdown Date").
(b) the amount to be drawn is US$189,400,000
(c) I request that the amount be remitted to Account
No.___________________ at ____________________________ for credit to the account
of ___________________.
(d) I represent that:
(i) the amount to be remitted will be used for the following
purpose or purposes: (INSERT PARTICULARS OF INTENDED USE OF THE FUNDS.
(ii) the representations and warranties in the Funding
Agreement are and remain true at the Drawdown Date;
(iii) No event of Default has occurred or is subsisting or
will result from the drawing.
DATED:
Signed by: /s/________________________
For
-30-
EXHIBIT B
DRAWDOWN SCHEDULE
1 Subject to the conditions and terms of this Agreement:
(a) Lender will make advances of the Loan Sum to ESP pursuant to
any Drawdown Notices. ESP may not request that the Loan Sum be
drawn down in one advance unless Lender otherwise agrees;
(b) Subject to ESP complying with the Conditions Precedent in
clause 3 of this Agreement, drawdown will be advanced
according to the following schedule:
i) A Drawdown, US$ 189,400,000.00 (One Hundred Eighty
Nine Million, Four Hundred Thousand United States
Dollars), within 5 to 14 Business Days from the date
on which Lender's Bank or it nominee receives,
authenticates, verifies and clears the Securities
delivered by or on behalf of ESP, its agents or its
Bank;
(c) The Drawdown must be used only for the purpose of funding the
acquisitions presented to Lender, and must not be used for the
benefit of any declared enemy of the USA. .
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EXHIBIT C
PRE-ADVICE
(TO BE ▇▇▇▇▇▇▇▇▇▇▇ BY SWIFT OR OTHER SECURE COMMUNICATION BANK TO BANK)
FROM:
BANK NAME: (SBLC ISSUING BANK)
TO:
BANK NAME: xxxx
BANK ADDRESS: xxxx
ACCOUNT NAME: xxxx
SWIFT: xxxx
FOR CREDIT TO: xxxx
BANK OFFICER; xxxx
TRANSACTION CODE: HPExxxxxxxxxx
We are ready and willing to issue and deliver by SWIFT or otherwise on behalf of
our Client [CLIENT NAME] a Standby Letter of Credit (SBLC) as per attached
specimen.
Such SBLC will be drawn per the following specifications:
Amount: $***,000,000 (*** Hundred Million United States Dollars)
Maturity: Minimum one year and one day
Beneficiary: Lender or its Assigns
Issue date:
Ref. Number:
Please notify beneficiary accordingly and please advise your readiness to accept
the above SBLC for verification and authentication by SWIFT.
Sincerely,
(TEXT OF SBLC)
NAME & TITLE OF BANK OFFICER NAME & TITLE OF BANK OFFICER
Sincerely,
---------------------------- ----------------------------
Signature/title Signature/title
Note: The beneficiary of the Letter of Credit will be advised/nominated by
Lender.
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EXHIBIT D
PRE-ADVICE REPLY
(TO BE ▇▇▇▇▇▇▇▇▇▇▇ BY SWIFT OR OTHER SECURE COMMUNICATION BANK TO BANK)
FROM:
BANK NAME: XXXXXXXXXXXXX
TO:
BANK NAME: (SBLC ISSUING BANK)
BANK ADDRESS: xxxx
ACCOUNT NAME: xxxx
SWIFT: xxxx
FOR CREDIT TO: xxxx
REFERENCE: xxxx
We, (xxx bank) hereby acknowledge receipt of your Pre-advice message and
undertaking reference............................dated .......... on behalf of
your customer [CLIENT NAME] in respect of the issuance of a Standby Letter of
Credit as per attached specimen, and according to the below specifications.
We, (xxx bank) are prepared to receive, authenticate and verify such a SBLC as
per attached specimen.
Such SBLC will be drawn per the following specifications:
Amount: $***,000,000 (*** Hundred Million United States Dollars)
Maturity: Minimum One year and one day
Beneficiary: Lender or its Assigns
Issue date:
Ref. Number:
We hereby confirm the above subject to your delivery to us of the SBLC in the
text and specifications as advised within five (5) days from receipt of this
communication.
Sincerely
NAME & TITLE OF BANK OFFICER NAME & TITLE OF BANK OFFICER
---------------------------- ----------------------------
Signature/title Signature/title
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EXHIBIT E
STAND-BY LETTER OF CREDIT
(BY SWIFT OR OTHER SECURE BANK TO BANK COMMUNICATION)
SBLC NUMBER :
ISIN :
CUSIP N(0) :
APPLICANT :
BENEFICIARY :
PLACE/DATE OF ISSUE :
CURRENCY/AMOUNT :
DATE OF MATURITY : (Minimum one year and one day from date of issue)
We...........(bank)...........the undersigned, hereby open our irrevocable,
transferable, unencumbered and confirmable Standby Letter of Credit (SBLC) in
favor of Lender or their assigns for the amount of $***,000,000 (*** Hundred
Million United States Dollars), due one year and one day from the date of issue
(date of issue).
Drafts may be drawn and negotiated on, but not before, the maturity date of
(maturity date), but not later than thirty (30) days after maturity date.
The draft drawn under this letter of Credit must bear on its face the clause:
"DRAWN UNDER STANDBY LETTER OF CREDIT NUMBER (number), DATED (date)".
We hereby agree with the drawer, endorsers, and bone fide holders of the draft
drawn under and in compliance with the terms of this Standby Letter of Credit
that such a draft will be honored upon presentation to the drawer.
This Letter of Credit is transferable without notification and payment of any
transfer fee to the issuing bank being required.
This Letter of Credit is subject to the Uniform Customs and Practices for
Documentary Credits (Latest Revision).
International Chamber of Commerce, Paris, France, Publication 600.
This is an operative instrument. All charges accrue to the account of the
applicant.
Full name and address of issuing Bank.
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EXHIBIT F
(TO BE ▇▇▇▇▇▇▇▇▇▇▇ BY SWIFT OR OTHER SECURE COMMUNICATION BANK TO BANK)
PRE ADVICE
FROM: LENDER BANK
BANK NAME: XXXXXXXXXXXXX
TO: XXXXXXXXXXXXX
BANK NAME: (SBLC ISSUING BANK)
BANK ADDRESS: xxxx
ACCOUNT NAME: xxxx
SWIFT: xxxx
FOR CREDIT TO: xxxx
REFERENCE: xxxx
We, (xxx bank) are ready, willing and able to deliver by SWIFT or otherwise on
behalf of our Client Lender $189,400,000 (One Hundred & Eighty Nine Million Four
Hundred Thousand United States Dollars) to be distributed in one tranche.
One tranche of $189,400,000 (One Hundred & Eighty Nine Million Four Hundred
Thousand United States Dollars) will be distributed within two (2) banking days
from receipt of confirmation by SWIFT from your bank being ready, willing and
able to receive the funds by way of proper bank to bank process.
We hereby confirm that the US$189,400,000 (One Hundred & Eighty Nine Million
Four Hundred Thousand United States Dollars) are clean, clear funds, legally
earned and free of liens and encumbrances.
We hereby confirm with full bank responsibility the above subject to your
delivery to us of the RWA confirmation as advised within five (5) days from
receipt of this communication.
Sincerely
NAME & TITLE OF BANK OFFICER NAME & TITLE OF BANK OFFICER
-35-
EXHIBIT H
(NOTE)
PROMISSORY NOTE
Maximum Principal Balance of Date: May 26, 2010
US$200,000,000.00 Palm Springs, California
This Promissory Note ("Note") is executed and delivered under and
pursuant to the terms of that certain Loan Agreement dated as of the date hereof
(as amended, restated, supplemented or modified from time to time, the "Loan
Agreement") by and between ENVIRONMENTAL SERVICE PROFESSIONALS, INC., an State
of Nevada corporation with a place of business at ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Borrower"), and LENDER, a Delaware limited liability company
with a place of business at ("Lender"). Capitalized terms not otherwise defined
herein shall have the meanings provided in the Loan Agreement.
FOR VALUE RECEIVED, Borrower hereby promises to pay to the order of
Lender, at the office of Lender, Attention: Finance Department or at such other
place as Lender may from time to time designate to Borrower in writing:
(i) the principal sum of TWO HUNDRED MILLION AND 00/100
(US$200,000,000.00) DOLLARS in currency of the United States of America, or,
such lesser amount as shall then equal the aggregate unpaid principal balance of
the Loans as may be due and owing under the Loan Agreement, payable in
accordance with the provisions of the Loan Agreement, subject to acceleration
upon the occurrence of an Event of Default under the Loan Agreement or earlier
termination of the Loan Agreement pursuant to the terms thereof; and
(ii) interest on the principal amount of this Note from time to time
outstanding until such principal amount is paid in full at the applicable
Interest Rate in accordance with the provisions of the Loan Agreement. In no
event, however, shall interest exceed the maximum interest rate permitted by
law. Upon and after the occurrence of an Event of Default, and during the
continuation thereof, interest shall be payable at the Default Rate.
This Note is the Note referred to in the Loan Agreement is entitled to
the benefits of the Loan Agreement and the other Loan Documents and is subject
to all of the agreements, terms and conditions therein contained. This Note may
be prepaid in whole or in part at any time without premium or penalty.
This Note may be assigned only in accordance with the Loan Agreement.
If an Event of Default under Section 10 of the Loan Agreement shall
occur, then this Note shall immediately become due and payable, without notice,
together with reasonable attorneys' fees if the collection hereof is placed in
the hands of an attorney to obtain or enforce payment hereof. If any other Event
of Default shall occur under the Loan Agreement or any of the Loan Documents,
then this Note may, as provided in the Loan Agreement, be declared to be
immediately due and payable, without a notice period, together with reasonable
attorneys' fees, if the collection hereof is placed in the hands of an attorney
to obtain or enforce payment hereof.
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This Note shall be governed by and construed and enforced in accordance
with the laws of the State of New York.
Borrower expressly waives any presentment, demand, protest, notice of
protest, or notice of any kind except as expressly provided in the Loan
Agreement.
ENVIRONMENTAL SERVICE PROFESSIONALS, INC.,
BORROWER
By:
-------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
STATE OF )
SS.:
COUNTY OF )
On the _____________ day of May, 2010, before me personally came
_____________________, to me known, who being by me duly sworn, did depose and
say that he/she is the ______________________ of Environmental Service
Professionals, Inc., the Borrower described in and which executed the foregoing
instrument; and that he/she signed his/her name thereto as the act and deed of
such corporation by order of the board of directors of said corporation.
------------------------------
Notary Public
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