EXHIBIT 10.4
MASTER DEMAND NOTE
$ 1,000,000.00 April 25, 1997
FOR VALUE RECEIVED, each of the undersigned, jointly and severally if more than
one (hereinafter collectively referred to as "Borrower"), pursuant to pay to the
order of CoreStates Bank, N.A.*, a national banking association (the "Bank"), at
any of its banking offices in Pennsylvania, the principal amount of One Million
-------------------------------00/100 DOLLARS in lawful money of the United
States, or, if less, the outstanding principal balance on all loans and advances
made by Bank evidenced by this Note ("Loans"), plus interest. Said principal
and interest shall be payable ON DEMAND
Interest shall accrue at a rate per annum which is at all times equal to 1% in
excess of Bank's Prime Rate, such rate to change each time the Prime Rate
changes, effective on and as of the date of the change.
INTEREST - Interest shall be calculated on the basis of a 360 day year and shall
also be payable on demand and when the entire principal balance of this Note is
paid to Bank. The term "Prime Rate" is defined as the rate of interest for
loans established by Bank from time to time as its prime rate. Interest shall
accrue on each disbursement hereunder from the date such disbursement is made by
Bank, provided, however, that to the extent this Note represents a replacement,
substitution, renewal or refinancing of existing indebtedness, interest shall
accrue from the date hereof. Interest shall accrue on the unpaid balance hereof
at the rate provided for in this Note until the entire unpaid balance has been
paid in full, notwithstanding the entry of any judgment against Borrower.
BANK'S LOAN RECORDS - The actual amount due and owing from time to time under
this Note shall be evidenced by ▇▇▇▇'s books and records of receipts and
disbursements hereunder. Bank shall set up and establish an account on the
books of Bank in which will be recorded Loans evidenced hereby, payments on such
Loans and other appropriate debits and credits as provided herein, including any
Loans which represent reborrowings of amounts previously repaid. Bank shall
also record, in accordance with other items properly chargeable to Borrower
hereunder, and other appropriate debits and credits. Such books and records of
Bank shall be presumed to be complete and accurate and shall be deemed correct,
except to the extent shown by Borrower to be manifestly erroneous;
NOTE NOT A COMMITMENT TO LEND - Borrower acknowledges and agrees that no
provision hereof, and no course of dealing by Bank in connection herewith, shall
be deemed to create or shall imply the existence of any commitment or obligation
on the part of Bank to make Loans. Except as otherwise provided in a currently
effective written agreement by Bank to make Loans, each Loan shall be made
solely at Bank's discretion.
PREPAYMENT - Borrower may at its option prepay all or any portion of the
principal balance of any Loans at any time without premium or penalty.
COLLATERAL - As security for all indebtedness to Bank now or hereafter incurred
by Borrower, under this Note or otherwise, Borrower grants Bank a lien upon and
security interest in any securities, instruments or other personal property of
Borrower now or hereafter in Bank's possession and in any deposit balances now
or hereafter held by Bank for Borrower's account and in all proceeds of any such
personal property or deposit balances. Such liens and security interest shall
be independent of Bank's right of setoff. This Note and the indebtedness
evidenced hereby shall be additionally secured by any lien or security interest
evidenced by a writing (whether now existing or hereafter executed) which
contains a provision to the effect that such lien or security interest is
intended to secure (a) this Note or indebtedness evidenced hereby or (b) any
category of liabilities, obligations or the indebtedness of Borrower to Bank
which includes this Note or the indebtedness evidenced hereby, and all property
subject to any such lien or security interest shall be collateral for this Note.
CONFESSION OF JUDGMENT - ▇▇▇▇▇▇▇▇ irrevocably authorizes and empowers any
attorney or any clerk of any court of record to appear for and confess judgment
against Borrower for such sums as are due and owing on this Note, with or
without declaration, with costs of suit, without stay of execution and with an
amount not to exceed the greater of fifteen percent (15%) of the principal
amount of such judgment or $5,000 added for collection fees. If a copy of this
Note, verified by affidavit by or on behalf of Bank, shall have been filed in
such action, it shall not be necessary to file the original of this Note. The
authority granted hereby shall not be exhausted by the initial exercise thereof
and may be exercised by Bank from time to time. There shall be excluded from
the lien of any judgment obtained solely pursuant to this paragraph all improved
real estate in any area identified under regulations promulgated under the Flood
Disaster Protection Act of 1973, as having special flood hazards if the
community in which such area is located in participating in the National Flood
Insurance Program. Any such exclusion shall not affect any lien upon property
not so excluded.
DEMAND NOTE - This Note is and shall be construed as a "demand instrument" under
the Uniform Commercial Code. Bank may demand payment of the indebtedness
outstanding under this Note or any portion thereof at any time.
BANK REMEDIES - In the event that any payment hereunder is not made when due or
demanded, bank may, immediately or any time thereafter, exercise any or all of
its rights hereunder or under any agreement or otherwise under applicable law
against Borrower, against any person liable, either absolutely or contingently,
or payment of any indebtedness evidenced hereby, and in any collateral, and such
rights may be exercised in any order and shall not be prejudiced by any delay in
Bank's exercise thereof. At any time after such non-payment, Bank may, at its
option and upon five days written notice to Borrower, begin accruing interest on
this Note at a rate not to exceed five percent (5%) per annum in excess of the
rate of interest provided for above on the unpaid principal balance hereof;
provided, however, that no such interest shall accrue hereunder in excess of the
maximum rate permitted by law. All such additional interest shall be payable
upon demand.
NOTICE TO BORROWER - Any notice required to be given by Bank under the
provisions of this Note shall be effective as to each Borrower when addressed to
Borrower and deposited in the mail, postage prepaid, for delivery by first class
mail at Borrower's mailing address as it appears on Bank's records.
DISBURSEMENTS AND PAYMENTS - The proceeds of any Loan may be credited by Bank to
the deposit account of Borrower or disbursed in any other manner requested by
▇▇▇▇▇▇▇▇ and approved by Bank. All payments due under this Note are to be made
in immediately available funds. If Bank accepts payment in any other form, such
payment shall not be deemed to have been made until the funds comprising such
payment have actually been received by or made available to Bank. If Borrower
is not an individual, Borrower authorizes Bank (but Bank shall have no
obligation) to charge any deposit account in borrower's name at Bank for any and
all payments of principal, interest, or any other amounts due under this Note.
PAYMENT OF COSTS - In addition to the principal and interest another sums
payable hereunder, ▇▇▇▇▇▇▇▇ agrees to pay Bank on demand, all costs and expenses
(including reasonable attorneys' fees and disbursements) which may be incurred
by Bank in the collection of this Note or the enforcement of Bank's right and
remedies hereunder.
REPRESENTATIONS BY BORROWER - In order to induce Bank to make loans, Borrower
represents and warrants as follows: if Borrower is a corporation or a general or
limited partnership, Borrower represents and warrants that it is validly
existing and in good standing in the jurisdiction under whose laws it was
organized. If Borrower is a corporation, Borrower represents and warrants that
the execution, delivery and performance of this Note are within Borrower's
corporate powers, have been duly authorized by all necessary action by
▇▇▇▇▇▇▇▇'s Board of Directors, and are not in contravention of the terms of
Borrower's charter, by-laws, or any resolution of its Board of Directors. If
Borrower is a general or limited partnership, Borrower represents and warrants
that the execution, delivery and performance of this Note have been duly
authorized and are not in conflict with any provision of Borrower's partnership
agreement or certificate of limited partnership. Borrower further represents
and warrants that this Note has been validly executed and is enforceable in
accordance with its terms, the execution, delivery and performance of Borrower
of this Note are not in contravention of law and do not conflict with any
indenture, agreement undertaking to which Borrower is a party or is otherwise
bound, and that no consent or approval of any governmental authority or any
third party is required in connection with the execution, delivery and
performance of this Note. If this Note is secured by "margin stock" as defined
in Regulation U of the Board of Governors of the Federal Reserve System,
borrower warrants that no Loan or portion thereof shall be used to purchase or
carry margin stock, and that each Loan shall be used for the purpose or purposes
indicated on the most recent Form FR U-1 executed by Borrower in connection with
Loans made by Bank.
WAIVERS, ETC. - Borrower and each additional obligor on this Note waive
presentment, dishonor, notice of dishonor, protest and notice of protest.
Neither the failure nor any delay on the part of Bank to exercise any right,
remedy, power or privilege hereunder shall operate as a waiver or modification
thereof. No consent, waiver or modification of the terms of this Note shall be
effective unless set forth in a writing signed by Bank. All rights and remedies
of Bank are cumulative and concurrent and no single or partial exercise of any
power or privilege shall preclude any other or further exercise of any right, or
privilege.
MISCELLANEOUS - This Note is the unconditional obligation of Borrower, and
▇▇▇▇▇▇▇▇ agrees that Bank shall not be required to exercise any of its rights or
remedies against any collateral in which it holds a lien or security interest,
or against which it has right or setoff, or against any particular obligor. All
representations, warranties an agreements herein are made jointly and severally
by each Borrower. If any provisions of this Note shall be held invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provision hereof. To the extent that this Note represents a replacement,
substitution, renewal or refinancing of a pre-existing note or other evidence of
indebtedness, the indebtedness represented by such pre-existing note or other
instrument shall not be deemed to have been extinguished hereby. This Note has
been delivered in and shall be governed by and construed in accordance with the
laws of the Commonwealth of Pennsylvania without regard to the law of conflicts.
In the event any due date specified or otherwise provided for in this Notre
shall fall on a day which Bank is not open for business, such due ate shall be
postponed until the next banking day, and interest and any fees or similar
charges shall continue to accrue during such period of postponement. This Note
shall be binding upon each borrower and each additional Obligor and upon their
personal representatives, heirs, successors and assigns, and shall benefit Bank
and its successors and assigns.
CONSENT TO JURISDICTION AND VENUE -- IN ANY LEGAL PROCEEDING INVOLVING, DIRECTLY
OR INDIRECTLY,ANY MATTER ARISING OUT OF OR RELATED TO THIS NOTE OR THE
RELATIONSHIP EVIDENCED HEREBY, EACH UNDERSIGNED PARTY HEREBY IRREVOCABLY SUBMITS
TO THE NONEXCLUSIVE JURISDICTION OF ANY STAT OR FEDERAL COURT LOCATED IN ANY
COUNTY IN THE COMMONWEALTH OF PENNSYLVANIA WHERE BANK MAINTAINS AN OFFICE AND
AGREES NOT TO RAISE ANY OBJECTION TO SUCH JURISDICTION OR TO THE LEAVING OR
MAINTAINING OF THE VENUE OF ANY SUCH PROCEEDING IN SUCH COUNTY. EACH
UNDERSIGNED PARTY AGREES THAT SERVICE OR PROCESS IN ANY SUCH PROCEEDING MAY BE
DULY EFFECTED UPON IT BY MAILING A COPY THEREOF, BY REGISTERED MAIL, POSTAGE
PREPAID, TO EACH UNDERSIGNED PARTY.
WAIVER OF JURY TRIAL -- EACH UNDERSIGNED PARTY HEREBY WAIVES, AND BANK BY ITS
ACCEPTANCE HEREOF THEREBY WAIVES, TRIAL BY JURY IN ANY LEGAL PROCEEDING
INVOLVING DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT
OR OTHERWISE) IN ANY WAY ARISING OUT OF OR RELATED TO THIS NOTE OR THE
RELATIONSHIP EVIDENCED HEREBY, THIS PROVISION IS A MATERIAL INDUCEMENT FOR BANK
TO ENTER INTO, ACCEPT OR RELY UPON THIS NOTE.
IN WITNESS WHEREOF, ▇▇▇▇▇▇▇▇, intending this to be a sealed instrument and
intending to be legally bound hereby, has executed and delivered this Note as of
the day and year first above written.
Name of Corporation
or Partnership Covalent Group, Inc.
______________________________________________________________________________
BY: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ BY:
------------------------------------- -------------------------------------
(Signature of Authorized Signer) (Signature of Authorized Signer)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, CFO & DIRECTOR
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(Print or Type Name an (Print or Type Name and
Title of Signer Above) Title of Signer Above)
INDIVIDUALS SIGN BELOW
________________________________________ ____________________________(Seal)
(Signature of Witness) (Signature of Individual Borrower)
________________________________________ ________________________________
(Print or Type Name of Above Witness) (Print or Type Name or Borrower
Signing Above)
________________________________________ ____________________________(Seal)
(Signature of Witness) (Signature of Individual Borrower)
________________________________________ ________________________________
(Print or Type Name of Above Witness) (Print or Type Name of Borrower
Signing Above)
CERTIFIED COPY OF ▇▇▇▇▇▇▇▇'S RESOLUTIONS
AND CERTIFICATE OF INCUMBENCY
TO: CORESTATES BANK, N.A.
I, the undersigned Secretary of Covalent Group, Inc., a Pennsylvania
corporation (the "Corporation"), hereby certify that (check one) [X] at a
meeting of the Board of Directors of the Corporation, duly called and held in
accordance with its charter and by-laws on February 25, 1997, at which a quorum
was present and voting throughout. [_] by unanimous written consent of the Board
of Directors of the Corporation, dated _____________________, 19__, the
following Resolutions were adopted in accordance with its charter, by-laws, and
applicable law and that said Resolutions have not been altered, amended or
rescinded and are now in full force and effect:
"RESOLVED:
1. That the President, Vice President, Treasurer, Secretary and
_____________________ of this Corporation, or any one of them, are hereby
authorized in the name and on behalf of this Corporation from time to time (1)
to borrow money and to obtain credit from CoreStates Bank, N.A., a national
banking association (the "Bank"), and to sell to or discount with said Bank any
evidences of indebtedness and choses in action owned by this Corporation on such
terms as may be required by said Bank: (2) to authorize and cause the issuance
of letters of credit and the purchase or sale of exchange for future delivery by
said Bank for the account of this Corporation, on such terms as may be required
by said Bank: (3) to give said Bank one or more mortgage or other lien on any
real property of this Corporation or one or more liens on or security interests
in any personal property of this Corporation originally and in addition and in
substitution to secure the payment and performance of this Corporation's
obligations and liabilities of any nature to said Bank; and (4) in connection
with the foregoing, to execute and deliver any instruments and/or agreements
required by said Bank, including those authorizing confession of judgment and
including those contained a provision authorizing said Bank to charge payments
due on loans, advances, fees and other charges to a deposit account maintained
by the Corporation with said Bank and such other terms and provisions as such
officer(s) shall deem appropriate.
2. Any action heretofore taken by any officer of this Corporation with respect
to any of the matters stated above is hereby ratified and confirmed.
3. That the Secretary is ▇▇▇▇▇▇ directed to file with said Bank a certified
copy of these Resolutions and a list of the persons, together with specimens of
their signature, who are the present holders of the said offices, and that said
Bank shall be entitled as against this Corporation to presume conclusively that
the persons so certified as holding such offices continue respectively to hold
the same until otherwise notified in writing by the Secretary.
4. That these Resolutions, insofar as said Bank is concerned , shall continue
in full force and effect until receipt by said Bank of written notice from the
Secretary of the changes, if any, therein."
I hereby further certify that the above Resolutions do not conflict with
the provisions of the Corporation's charter or its by-laws, and that the present
holders of the offices referred to in the foregoing Resolutions and their
specimen signatures are set forth below.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ CFO & DIRECTOR /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------ ------------------------ ------------------------
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Corporate
Seal this 25th day of April, 1997.
(Affix Corporate Seal) /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
SECRETARY
Note: The President or Vice-President must sign the following confirmation, if
applicable:
I, _________________________________ of the above named Corporation, do hereby
(NAME) (TITLE)
certify that the Secretary of said Corporation is duly authorized to borrow and
otherwise act as stated in the above Resolution No. 1 without other signature or
countersignature, that is the present Secretary of the Corporation, and that the
signature of said Secretary above is his or her true signature.
IN WITNESS WHEREOF, I have hereunto set my hand this________day of_______,
19___.
__________________________________
(Signature and Title)
EXPLANATION AND WAIVER OF RIGHTS
REGARDING CONFESSION OF JUDGMENT
1. On the date hereof, Covalent Group, Inc., a corporation (the "Obligor")
is signing and delivering to CoreStates Bank, N.A. (the "Bank") a
[_] Promissory note in the principal sum of One Million--00/100 Dollars ($1,000,000);
[_] Guaranty of Obligations of_______________________________________________;
[X] Other Security Agreement
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(as the same may be renewed, modified, amended, extended, restated or replaced,
whether one or more, the "Obligation"). The Obligor has been advised by the
Bank (and by the Obligor's legal counsel, if applicable) that the Obligation
contains a clause that provides that the Bank may confess judgment against the
Obligor. The Obligor has read the Obligation and clearly and specifically
understands that by signing the Obligation which contains such confession of
judgment clause:
(a) The Obligor is authorizing the Bank to enter a judgment against
the Obligor and in favor of the Bank, which will give the Bank a lien upon any
real estate which the Obligor may own in any county where the judgment is
entered;
(b) The Obligor is giving up an important right to any notice or
opportunity for a hearing before the entry of this judgment on the records of
the Court;
(c) The Obligor is agreeing that the Bank may enter this judgment and
understands that the Obligor will be unable to contest the validity of the
judgment, should the Bank enter it, unless the Obligor successfully challenges
entry of the judgment through a petition to open or strike the judgment, which
will require the Obligor to retain counsel at the Obligor's expense;
(d) The Obligor may be giving up an important right to any notice or
opportunity for a hearing before the Bank may request and use the power of the
state governmental to deprive the Obligor of its property pursuant to the
judgment by seizing or having the Sheriff or other official seize the Obligor's
bank accounts, inventory, equipment, furnishings, or any other personal property
that the Obligor may own, to satisfy the Obligation;
(e) The Obligor may be immediately deprived of the use of any property
that is seized by the bank pursuant to the judgment without notice or a hearing,
and the procedural rules of Pennsylvania's court system do not guarantee that
the Obligor will receive a prompt hearing after the Obligor's property is
seized; and
(f) If the Obligation is the Bank's printed form of Master Demand
Note, Commercial Promissory Note or Security Agreement, or a Master Note
Agreement prepared by the Bank, the Obligor is agreeing that the Bank may enter
judgment whether or not there is a default under the Obligation.
2. The Obligor knows and understands that it is the confession of
judgement clause in the Obligation which give the Bank the right described in
subparagraphs (a) through (f) of paragraph 1 above.
3. Fully and completely understanding the rights which are being given up
if the Obligor signs the Obligation containing the confession of judgment, the
Obligor nevertheless freely, knowingly and voluntarily waives said rights and
chooses to sign the Obligation.
4. The Obligor acknowledges that the proceeds of the Obligation are to be
used for business purposes.
5. If the Obligor is an individual, the Obligor certifies that his/her
annual income exceeds $10,000.00.
Dated this 25th day of April, 1997.
THE OBLIGOR HAS READ THIS EXPLANATION AND WAIVER PRIOR TO SIGNING THE OBLIGATION
AND FULLY UNDERSTANDS ITS CONTENTS.
Covalent Group, Inc.
---------------------------------------------------
[Name of Corporation/Partnership]
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By:__________________________
-----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, CFO & DIRECTOR
----------------------------------- _____________________________
(Print Name and Title) (Print Name and Title)
INDIVIDUALS OR PROPRIETORS SIGN BELOW
------------------------------- ---------------------------------------
(Witness Signature) (Signature of Individual Obligor)
------------------------------- ---------------------------------------
(Witness Signature) (Signature of Individual Obligor)
SECURITY AGREEMENT
(ACCOUNTS)
THIS AGREEMENT is made this 25th day of April, 1997, between CoreStates Bank,
N.A.*, a national banking association (the "Bank"), and Covalent Group, Inc.
(the "Debtor").
1. DEFINITIONS. As used herein and in any separate agreement between the Bank
and the Debtor in connection with this Agreement:
(a) "Account" means any right to payment for goods sold or leased or for
services rendered which is not evidenced by an Instrument or Chattel
Paper, whether or not it has been earned by performance including all
rights to payment under a charter or other contract involving the use or
hire of a vessel and all rights incident to such charter or contract.
(b) "Qualified Account" means any Account meeting all the following
specifications: (i) it is lawfully owned by the Debtor and subject to no
lien, security interest or prior assignment, and the Debtor has the right
of assignment thereof and the power to grant a security interest therein;
(ii) it is a valid and enforceable Account, representing the undisputed
indebtedness of an Account Debtor to the Debtor; (iii) it is not subject
to any defense, set-off, counter-claim, credit, allowance or adjustment;
(iv) no substantial part of any goods the sale of which ha given rise to
the Account has been returned, rejected, lost or damaged; (v) if it arises
from the sale of goods by the Debtor, such sale was an absolute sale and
not on consignment or on approval or on a sale or return basis nor subject
to any other purchase or return agreement, and such goods have been
shipped to the Account Debtor; (vi) if it arises from the performance of
services, such services have actually been performed; (vii) it arose in
the ordinary course of the Debtor's business; (viii) no notice of the
Bankruptcy, receivership, reorganization, insolvency, or financial
embarrassment of the Account Debtor has been received; (ix) the Account
debtor is not a subsidiary or affiliate of the Debtor, does not control
the Debtor, and is not under the control of or under common control with
the Debtor; and (x) the Account meets such other specifications and
requirements which may from time to time be established by the Bank.
(c) "Account Debtor" means the Person who is obligated on an Account or
General Intangible.
(d) "Chattel Paper" means a writing or writings which evidence both a monetary
obligation and a security interest in or a lease or specific goods.
(e) "Collateral" means (i) all of the Debtor's Accounts now existing or
hereafter arising; (ii) all of Debtor's General Intangibles, Chattel Paper
and Instruments now existing or hereafter acquired or arising; (iii) all
guarantees of the Debtor's existing and future Accounts and General
Intangibles and all other security held by the Debtor for the payment or
satisfaction thereof; (iv) the goods or the services the sale or lease or
performance of which gave rise to any Account or General Intangible of the
Debtor including any returned goods; (v) any balance or share belonging to
the Debtor of any deposit, agency or other account with any bank and any
other amounts which may be owing from time to time by any bank to the
Debtor; (vi) all property of any nature whatsoever of the Debtor now or
hereafter in the possession of or assigned or hypothecated to the Bank for
any purpose; and (vii) all Proceeds of all of the foregoing, including all
Proceeds of other Proceeds.
(f) "Debtor" means the Person who executes this Agreement as such. The Debtor
may be either a borrower from the Bank or a guarantor of the indebtedness
of another to the Bank, and in either case is the Person obligated to pay
the Liabilities secured hereby.
(g) "Document of Title" means a bill of leading, dock warrant, dock receipt,
warehouse receipt or order for the delivery of goods, and also any other
document which in the regular course of business or financing is treated
as adequately evidencing that the Person in possession of it is entitled
to receive, hold and dispose of the document and the goods it covers.
(h) "General Intangibles" means all personal property of every kind and
description of Debtor other than goods, Accounts, Chattel Paper, Documents
of Title, Instruments and money, and includes without limitation choses in
action, books, records, customer lists, tax, insurance and other kinds of
refunds, patents, trademarks, copyrights, trade names, plans, licenses and
other rights in personal property.
(i) "Instrument" means a negotiable instrument or a security or any other
writing which evidences a right to the payment of money and is not itself
a security agreement or lease and is of a type which is in ordinary course
of business transferred by delivery with any necessary indorsement or
assignment.
(j) "Inventory" means tangible personal property held by the Debtor for sale
or lease or to be furnished under contracts of service, tangible personal
property which the Debtor has so leased or furnished, and raw materials,
work in process and materials used, produced or consumed in the Debtor's
business, and shall include tangible personal property returned to the
Debtor by the purchaser following a sale thereof by the Debtor and
tangible personal property represented by Documents of Title. All
equipment, accessories and parts at any time attached or added to items of
Inventory or used in connection therewith shall be deemed to be part of
the Inventory.
(k) "Liabilities" means all existing and hereafter incurred or arising
indebtedness, obligations and liabilities of the Debtor to the Bank,
whether absolute or contingent, direct or indirect and out of whatever
transactions arising, and includes without limitation, all matured and
unmatured indebtedness, obligations and liabilities of the Debtor under or
in connection with existing and future loans and advances evidenced by
promissory notes or otherwise, letters of credit, acceptances, all other
extensions of credit, repurchase agreements, security agreements,
mortgages, overdrafts, foreign exchange contracts and all other contracts
for payment or performance, indemnities, and all indebtedness, obligations
and liabilities under any guaranty or surety agreement, or as co-maker or
co-obligor with any person for any of the foregoing, including without
limitation all interest, expenses, costs (including collection costs) and
fees (including reasonable attorney's fees and prepayment fees) incurred,
arising or accruing (whether prior or subsequent to the filing of any
bankruptcy petition by or against any Debtor) under or in connection with
any of the foregoing, and further including all such indebtedness,
obligations and liabilities of the Debtor (i) to others which the Bank may
have obtained by
18. NAME OF DEBTOR. The Debtor represents and warrants that the name of the
Debtor shown on this Agreement is the correct, full legal name of the Debtor
and that the Debtor has not at any time changed its name, identity or
corporate structure, been the surviving corporation in a merger, acquired
any other business, or engaged in business under an assumed name or trade
name except as set forth below.
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto
under seal and intending to be legally bound on the day and year first above
written.
CORESTATES BANK, N.A.
Corporate Group Inc.
-------------------------------------------- By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
(Name of Corporate or Partnership Debtor) (Signature)
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, CO.
------------------------------------------ ------------------------------
(Authorized Signature) (Print Name and Title)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, CFO & Director
-------------------------------------------- Address 55 VALLEY STREAM PARKWAY
(Print Name and Title) -------------------------
(Number, Street)
MALVERN, PA 19355
------------------------------
(City)
____________________________________________(Seal)
(Signature of Individual Debtor)
____________________________________________
(Print Name of Individual Debtor)
____________________________________________
(Print Trade Style or Fictitious Name, if any)
EQUIPMENT
SECURITY AGREEMENT
Made on 4/25/97 between
-----------------------
[Date]
COVALENT GROUP, INC 1 Glenhardie Corporate Center, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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(NAMES OF ALL DEBTORS) (CITY) (STATE) (ZIP CODE)
(herein called "Debtor"), and CoreStates Bank, N.A.*, a national banking
association (the "Bank"), ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Malevern PA 19355
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(STREET AND NO.)
_______________________, Pennsylvania (herein called "Bank"), said address
(CITY) (ZIP CODE)
being ▇▇▇▇'s address at which information concerning Bank's security interest
hereunder may be obtained.
SECURITY INTEREST: In consideration of a loan or loans made or to be made
by Bank, Debtor hereby grants to Bank a security interest in the following
described property and all replacements and proceeds thereof, now owned or
hereafter acquired, and all accessories, parts, equipment, attachments affixed
to or used in connection therewith.
DESCRIPTION OF PROPERTY MAKE OR SERIAL MODEL NUMBER
(State whether new or used) MANUFACTURER NUMBER OR YEAR
All equipment and fixtures now owned or hereafter acquired by
the Debtor and all replacements or substitutions thereof and
all accessories, parts and equipment now and hereafter affixed
thereto or used in connection therewith, together with proceeds
thereof.
all said property being hereinafter collectively called the "Collateral."
Said security interest secures the payment of all existing and future
liabilities whether absolute or contingent, of the Debtor to the Bank of any
nature whatsoever and out of whatever transaction arising.
APPLICATION OF LOAN: If the Collateral is being purchased with a loan
being made by Bank of even date herewith, Debtor will apply the proceeds of said
loan delivered to him in full or partial payment of such purchase price and for
no other purposes, and Debtor hereby authorizes Bank to disburse the proceeds of
said loan directly to the Seller of the Collateral.
DEBTOR WARRANTS AND AGREES THAT:
(i) The Collateral is used, or to be used, primarily in Debtor's
business.
(ii) The Collateral is located or will be located at:
[X] the address stated after the name of the Debtor above
[_] _____________________________________________________
(DESCRIBE REAL ESTATE IF ITEM (iii) - IF APPLICABLE)
(iii)[_] The Collateral is affixed or is to be affixed to the
real estate described in item (ii) above.
(iv) The chief place of business of the Debtor is:
[X] the address stated after the name of the Debtor above
[_] ____________________________________________________
ADDITIONAL TERMS
A. DEBTOR FURTHER REPRESENTS, WARRANTS AND AGREES:
1. The Debtor has or will acquire absolute title to the Collateral free and
clear of all liens, encumbrances and security interest except the
security interest hereby given to the Bank and other rights, if any, of
the Bank, and the Debtor will defend the Collateral against the claims
and demands of all persons.
2. The Debtor will not (a) permit any liens or security interests (other
than the Bank's security interest) to attach to any of the Collateral;
(b) permit any of the Collateral to be levied upon under any legal
process; or (c) permit the Collateral to become a fixture unless this
fact has been disclosed on the face hereof.
3. Without the prior written consent of the Bank, the Debtor will not sell,
exchange, lease or otherwise dispose of the Collateral or any of the
Debtor's rights therein or under this Agreement.
4. The Debtor will maintain the Collateral in good condition and repair,
and will pay the cost or repairs to or maintenance of the same and will
not permit anything to be done that may impair the value of any of the
Collateral or the security intended to be afforded by this Agreement.
5. The Debtor will insure the Collateral against such casualties as the
Bank shall require in such forms and amounts and with such companies as
shall be satisfactory to the Bank. All insurance policies shall include
a Lender's loss payable clause in favor of the Bank, and such policies
evidencing the same shall be furnished to the Bank. The Debtor hereby
assigns to the Bank any return or unearned premiums which may be due
upon cancellation of any such policies for any reason whatsoever and
directs the insurers to pay the Bank any amounts so due. The Bank is
hereby appointed the Debtor's attorney-in-fact to endorse any draft or
check which may be payable to the Debtor in order to collect such return
or unearned premiums or the proceeds of such insurance. Any balance of
insurance proceeds remaining after payment in full of all amounts
secured hereunder shall be paid to the Debtor.
6. The Debtor will not permit any of the Collateral to be removed from the
location specified herein, except for temporary periods in the normal
and customary use thereof, without the prior written consent of the
Bank, and will permit the Bank to inspect the Collateral at any time. 7.
The Debtor will pay all costs of filing any financing, continuation or
termination statements with respect to the security interest created by
the Agreement. The Bank is hereby appointed the Debtor's attorney-in-
fact to do, at the Bank's option and at the Debtor's expense, all acts
and things which the Bank may deem necessary to perfect and continue
perfected the security interest created by this Agreement and to protect
the Collateral.
8. If the Collateral includes a motor vehicle or any other type of property
for which a certificate of title is issuable, the Debtor will join with
the Bank in doing whatever may be necessary to have a statement of the
security interest created by this Agreement noted on said certificate
and will deposit said certificate with the Bank.
9. If the Collateral is used or brought for use primarily for personal,
family, or household purposes, or for farm purposes, the Debtor will
immediately advise the Bank in writing of any change in the Debtor's
residence; or if the Collateral is bought for business purposes, the
Debtor will immediately advise the Bank in writing of any change in any
of the Debtor's places of business, or the opening of any new place of
business.
10.Until default the Debtor may retain possession of the Collateral and use
it in any lawful manner not inconsistent with the agreements herein, or
with the terms and conditions of any policy of insurance thereon.
11.If any of the Collateral is at any time to be located on premises not
owned by the Debtor or owned by the Debtor subject to a mortgage or
other lien, the Debtor shall obtain and deliver to the Bank, an
agreement in form satisfactory to the Bank, waiving the landlord's or
mortgagee's or lienholder's rights to enforce any claim against the
Debtor for moneys due under the lease, mortgage or other lien by ▇▇▇▇ of
distraint or similar proceedings and assuring the Bank's ability to have
access to the Collateral in order to exercise its rights hereunder to
take possession thereof.
B. ENVIRONMENTAL MATTERS:
1. As used in this Agreement, the following terms shall have the following
meanings: (a) "Environmental Law" means any and all applicable federal,
state and local environmental laws, rules and regulations whether now
existing or hereafter enacted together with all amendments,
modifications and supplements thereof; (b) "Hazardous Materials" means
any contaminants, hazardous substances, regulated substances, or
hazardous wastes which may be the subject of liability pursuant to any
Environmental Law.
2. The Debtor represents and warrants that property owned or leased by the
Debtor or any subsidiary of the Debtor is in violation of any
Environmental Laws, no Hazardous Materials are present on said property
and neither the Debtor nor any subsidiary of the Debtor has been
identified in any litigation, administrative proceedings or
investigation as a responsible party for any liability under any
Environmental Laws.
3. The Debtor shall not use, generate, treat, store, dispose of or
otherwise introduce, or permit any subsidiary to use, generate, treat,
store dispose of or otherwise introduce, any Hazardous Materials into or
on any property owned or leased by the Debtor, and will not, permit any
subsidiary to cause, suffer, allow or permit anyone else to do so,
except in an environmentally safe manner through methods which have been
approved by and meet all of the standards of the federal Environmental
Protection Agency and any other federal, state or local agency with
authority to enforce Environmental Laws. The Debtor hereby agrees to
indemnify, reimburse, defend and hold harmless the Bank and it
directors, officers, agents and employees ("Indemnified Parties") for,
from and against all demands, liabilities, damages, costs, claims,
suits, actions, legal or administrative proceedings, interest, losses,
expenses and reasonable attorney's fees (including any such fees and
expenses incurred in enforcing this indemnity) asserted against, imposed
on or incurred by any of the Indemnified Parties, directly or indirectly
pursuant to or in connection with the application of any Environmental
Law to acts or omissions occurring at any time on or in connection with
any property owned or leased by the Debtor or any subsidiary of the
Debtor or any business conducted thereon.
C. DEFAULTS:
Upon default by the Debtor in the performance of any covenant herein, or in
the discharge of any other liability or obligation to the Bank, or if any
warranty should prove untrue, the Bank shall have all of the rights and remedies
of a secured party under the Uniform Commercial Code or other applicable law and
all rights provided herein, in the obligations mentioned above, or in any other
applicable security or loan agreement, all of which rights and remedies shall,
to the full extent permitted by law, be cumulative. The Bank may require the
Debtor to assemble the Collateral and make it available to the Bank at a place
to be designated by the Bank which is reasonably convenient to the Bank and the
Debtor. Any notice of sale, disposition or other intended action by the Bank,
sent to the Debtor at the address specified above, or such other address of the
Debtor as may from time to time be shown on the Bank's records, at least five
days prior to such action, shall constitute reasonable notice to the Debtor.
D. MISCELLANEOUS
1. The rights and privileges of the Bank under this Agreement shall inure
to the benefit of its successors and assigns. All representations,
warranties and agreements of the Debtor contained in this Agreement are
joint and several if the Debtor is more than one, and shall bind the
Debtor's personal representatives, heirs, successors and assigns. The
construction and interpretation of this Agreement and all related
agreements shall be governed by the laws of the Commonwealth of
Pennsylvania. No modification hereof shall be binding or enforceable
unless in writing and signed by the party against whom enforcement is
sought. If any provision of this Agreement shall for any reason be held
to be invalid or unenforceable, such invalidity or unenforceability
shall not affect any other provision hereof, but this Agreement shall be
construed as if such invalid or unenforceable provision had never been
contained herein. This Agreement supplements the Debtor's obligations
under any promissory notes or separate agreements with the Bank.
2. The waiver of any default hereunder shall not be a waiver of any
subsequent default.
3. The Debtor will pay as part of the debt hereby secured all amounts
including reasonable attorneys' fees, filing fees and searches, with
interest thereon, incurred by the Bank in preserving its rights
hereunder or in taking possession of, disposing of or preserving the
Collateral after any default hereinabove described, including amounts
required to satisfy liens and maintain insurance on the Collateral or to
keep the Collateral in good condition and repair.
4. CONSENT TO JURISDICTION AND VENUE - IN ANY LEGAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER, EACH UNDERSIGNED
PARTY HEREBY IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF ANY
STATE OR FEDERAL COURT LOCATED IN ANY COUNTY IN THE COMMONWEALTH OF
PENNSYLVANIA WHERE THE BANK MAINTAINS AN OFFICE AND AGREES NOT TO RAISE
ANY OBJECTION TO SUCH JURISDICTION OR TO THE LAYING OR MAINTAINING OF
THE VENUE OF ANY SUCH PROCEEDING IN SUCH COUNTY. EACH UNDERSIGNED PARTY
AGREES THAT SERVICE OF PROCESS IN ANY SUCH PROCEEDING MAY BE DULY
EFFECTED UPON IT BY MAILING A COPY THEREOF, BY REGISTERED MAIL, POSTAGE
PREPAID, TO EACH UNDERSIGNED PARTY.
5. WAIVER OF JURY TRIAL - EACH UNDERSIGNED PARTY HEREBY WAIVES, AND THE
BANK BY ITS ACCEPTANCE HEREOF THEREBY WAIVES, TRIAL BY JURY IN ANY LEGAL
PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER
SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF OR
RELATED TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED
HEREUNDER. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE BANK TO
ENTER INTO, ACCEPT OR RELY UPON THIS AGREEMENT.
CORESTATES BANK, N.A.
COVALENT GROUP, INC By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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(Name of Corporate or Partnership Debtor) (Signature)
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, CO
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(Authorized Signature) (Print Name and Title)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, CFO & Director
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(Print Name and Title)
------------------------------------------------(Seal)
(Signature of Individual Debtor)
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(Print Name of Individual Debtor)
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(Print Trade Style or Fictitious Name, if any)