SIXTH MODIFICATION AGREEMENT
THIS SIXTH MODIFICATION AGREEMENT ("MODIFICATION") is made with the
intention of it being effective as of November 1, 2000 by and among EA
ENGINEERING, SCIENCE, AND TECHNOLOGY, INC., a Delaware corporation ("BORROWER");
EA FINANCIAL, INC., a Delaware corporation, EA GLOBAL, INC., a Delaware
corporation, and EA INTERNATIONAL, INC., a Maryland corporation (collectively,
"GUARANTORS"); and ALLFIRST BANK, formerly known as THE FIRST NATIONAL BANK OF
MARYLAND ('LENDER").
RECITALS
Pursuant to the terms of a Loan And Security Agreement dated August 22,
1997 by and between the LENDER and the BORROWER, as amended ("LOAN AGREEMENT"),
the LENDER is providing to the BORROWER various credit accommodations
(collectively, "LOANS") including, but not limited to: (a). a revolving line of
credit in the maximum principal amount of Eight Million Five Hundred Thousand
Dollars ($8,500,000.00) ("REVOLVER") as evidenced by a Revolving Loan Promissory
Note dated August 22, 1997 from the BORROWER to the order of the LENDER in the
stated principal amount of Eight Million Five Hundred Thousand Dollars
($8,500,000.00) ("REVOLVER NOTE"); and (b) an equipment line of credit in the
maximum principal amount of One Million Five Hundred Thousand Dollars
($1,500,000.00) ("EQUIPMENT LINE").
The GUARANTORS have each guaranteed all of the BORROWER'S obligations to
the LENDER, whether now existing or hereafter incurred, including, but not
limited to, all obligations in connection with the LOANS, pursuant to the terms
and provisions of certain Guaranty Agreements dated August 22, 1997 from each of
the GUARANTORS to and for the benefit of the LENDER
(collectively, "GUARANTIES".
The BORROWER, the GUARANTOR and the LENDER have agreed to modify certain
terms and provisions of the LOAN AGREEMENT and have entered into this
MODIFICATION to accomplish such modifications.
NOW, THEREFORE, in consideration of the premises, and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:
Section 1. Recitals. The parties hereby acknowledge the accuracy of
the above Recitals and hereby incorporate the Recitals into this MODIFICATION.
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Section 2. Amendment To Loan Agreement. The LOAN AGREEMENT is
hereby amended as follows:
a. Section 1.59. Section 1.59 of the LOAN AGREEMENT is hereby amended
by deleting its present language in its entirety and substituting in lieu
thereof the following:
Section 1.59. Maximum Revolver Amount.
The term "MAXIMUM REVOLVER AMOUNT" means the lesser of: (a) the REVOLVER DOLLAR
CAP; or (b) the BORROWING BASE plus, during the period prior to February 28,
2001, and provided there is no DEFAULT hereunder, that portion (not to exceed
$300,000.00), if any, of the CASH COLLATERAL which the LENDER agrees, in the
exercise of its reasonable discretion, may be used as a basis for advances under
the REVOLVING LOAN; provided, however, that the LENDER may limit the time period
in which any portion of the CASH COLLATERAL may be used as a basis of advances
under the REVOLVING LOAN and any such approval shall immediately terminate,
without notice, upon the principal amount outstanding under the REVOLVING LOAN
being reduced to an amount not exceeding the BORROWING BASE.
b. Section 1.72. Section 1.72 of the LOAN AGREEMENT is hereby amended by
deleting its present language in its entirety and substituting in lieu thereof
the following:
Section 1.72. Revolver Dollar Cap. The term "REVOLVER DOLLAR CAP"
means Seven Million Dollars ($7,000,000.00).
c. Article 1. Article 1 of the LOAN AGREEMENT is hereby amended by
inserting at the end thereof the following new section:
Section 1.81. Cash Collateral. The term "CASH COLLATERAL"
means the amount of cash of EA Financial, Inc., which is held in accounts
maintained at the LENDER which accounts have been pledged to the LENDER as
security for the OBLIGATIONS and in which the LENDER has a first
priority perfected security interest.
d. Section 3.2.2. Section 3.2.2 of the LOAN AGREEMENT is hereby amended by
deleting the first sentence thereof in its entirety and substituting in lieu
thereof the following:
All sums due under the REVOLVING LOAN shall be paid in full on or
before September 30, 2002; provided, however, that the REVOLVING LOAN may
be renewed on an annual basis-by the written agreement of the LENDER and the
BORROWER.
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e. Section 3.4. Section 3.4 of the LOAN AGREEMENT is hereby amended by
deleting its present language in its entirety and substituting in lieu thereof
the following:
Section 3.4. Equipment Ling. The LENDER agrees: (a) to extend to the
BORROWER, under the EQUIPMENT LINE, term loans from time to time in order
to finance the acquisition of items of EQUIPMENT, provided, that the
principal amount of any such term loan shall not exceed eighty percent
(80%) of the lesser of (i) the fair market value for the EQUIPMENT
purchased with such loan advance or (ii) the actual net invoice price paid
by the BORROWER (less the value of all rebates, trade-ins and all shipping
and installation costs) for the EQUIPMENT purchased with such loan advance;
(b) to extend to the BORROWER, under the EQUIPMENT LINE, term loans from
time to time in order to finance acquisitions, investments in joint
ventures and licensing agreement, provided that the LENDER shall have no
obligation to make any such term loan and any such term loan shall be
subject to the LENDER'S review and approval of the acquisition, joint
venture or licensing agreement for which such term loan is being advanced;
and (c) to acquire, or cause LEASECORP to acquire, items of EQUIPMENT
selected. by the BORROWER and lease or cause LEASECORP to lease, such items
of equipment to the BORROWER; provided, however, that the aggregate of the
principal amount of all term loans advanced under the EQUIPMENT LOAN plus
the LEASED EQUIPMENT COSTS shall never exceed the cumulative principal
amount of One Million Five Hundred Thousand Dollars ($1,500,000.00). The
minimum amount of any term loan advanced under the EQUIPMENT LINE shall be
Ten Thousand Dollars ($10,000.00) and the minimum amount of the LEASED
EQUIPMENT COST of any single lease transaction shall be Ten Thousand
Dollars ($10, 000. 00)
f. Section 3.4.1. Section 3.4.1 of the LOAN AGREEMENT is hereby amended by
deleting its present language in its entirety and substituting in lieu thereof
the following:
Section 3.4.1. Term . The EQUIPMENT LINE shall terminate, and the
LENDER'S obligation to make term loans and acquire equipment to be leased
to the BORROWER shall terminate, on September 30, 2002, unless such date is
extended by a written agreement executed by the LENDER.
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g. Section 3.4.2.b. Section 3.4.2.b of the LOAN AGREEMENT is hereby
amended by deleting its present language in its entirety and substituting in
lieu thereof the following:
b. Requisition Procedure. Not less than two (2)
BUSINESS DAYS prior to the date upon which an advance is to be
made under the EQUIPMENT LINE (other than an advance for
purposes of acquisitions, investments in joint ventures or
licensing agreements), the BORROWER shall execute and deliver a
fully completed Requisition in the form attached hereto as
Exhibit B, containing the specifics required therein relating to
the requested advance. Prior to making any advance under the
EQUIPMENT LINE for acquisitions investments in joint ventures or
license agreements, the LENDER shall receive from the BORROWER
such information as the LENDER may request in connection with
such acquisition, investment in joint venture or licensing
agreement. On the date the LENDER is to make an advance of
proceeds under the EQUIPMENT LINE to the BORROWER, the BORROWER
shall execute and deliver to the LENDER an EQUIPMENT NOTE in the
principal amount equal to the sum of the term loan advanced. The
principal .amount of each term loan advance made under the
EQUIPMENT LINE for the acquisition of EQUIPMENT shall be repaid
in even monthly principal installments over a term between three
(3) and five (5) years to be determined by the BORROWER and
LENDER based on the useful life of the EQUIPMENT purchased by
such loan advance. The principal amount of each term loan
advanced under the EQUIPMENT LINE for acquisitions, investments
in joint ventures and license agreements shall be repaid
pursuant to terms agreed to by and between the BORROWER and the
LENDER when such advance is made. The LENDER is hereby
authorized by the BORROWER to make any advances hereunder
directly to the persons or entities supplying EQUIPMENT to the
BORROWER that is the subject of any requested advance.
h. Section 3.4.2-c.(i). Section 3.4.2.c.(i) of the LOAN
AGREEMENT is hereby amended by deleting the second and third sentences thereof
in their entirety and substituting in lieu thereof the following:
... Notwithstanding the foregoing to the contrary, the
BORROWER shall have the right to elect to have interest
accrue on the entire principal balance of any term loan
made under the EQUIPMENT LINE at a fixed annual rate of
interest equal to the COST OF FUNDS RATE, plus the
APPLICABLE MARGIN, all as determined on the date of the
advance. The BORROWER must elect in writing to have
interest accrue based on the COST OF FUNDS RATE not less
than two (2) BUSINESS DAYS prior to the date upon which
such term loan advance is made under the EQUIPMENT LINE.
i. Article 4. Article 4 of the LOAN AGREEMENT is hereby amended by
inserting at the end thereof the following new section:
Section 4.10. Life Insurance. The BORROWER shall maintain the existing
life insurance policies on the life of Dr. Loren Jensen issued by Phoenix Home
Life MutualInsurance Co. (Policy Nos. 05709546 and 05709547)and shall continue
to pay the premiums thereon. Such life insurance policies shall be assigned
to the LENDER as security for the OBLIGATIONS pursuant to the terms and
provisions of assignments in a form acceptable to the LENDER and Pacific Home
Life Mutual Insurance Co.
j. Section 6.22. Section 6.2.2 of the LOAN AGREEMENT is hereby amended by
deleting its present language in its entirety and substituting in lieu thereof
the following:
Section 6.22. Tangible Net Worth. The BORROWER and its SUBSIDIARIES
shall have a TANGIBLE NET WORTH of not less than:
(a) Twelve Million Five Hundred Thousand Dollars
($12,500,000.00) as of November 30, 1998; (b) Ten Million Five
Hundred Thousand Dollars ($10,500,000.00) as of February 28,
1999; (c) Eleven Million Dollars ($11,000,000.00) as of May 31,
1999; (d)Eleven Million Two Hundred Fifty Thousand Dollars
($11,250,000.00) as of August 31, 1999; (e) Eleven million Two
Hundred Fifty Thousand Dollars ($11,250,000.00) as of November
30, 1999; (f) Eleven Million Two Hundred Fifty Thousand Dollars
($11,250,000.00) " as of February 29, 2000; (g) Eleven Million
Three Hundred Seventy-Five Thousand Dollars ($11,375,000.00) as
of May 31, 2000; (h) Eleven Million Three Hundred Thousand
Dollars ($11,300,000.00) as of August 31, 2000; (i) Eleven
million Four Hundred Thousand Dollars ($11,400,000.00) as of
November 30, 2000; (j) Eleven Million Five Hundred Thousand
Dollars ($11,500,000.00) as of February 28, 2001; (k)
ElevenMillion Six Hundred Thousand Dollars ($11,600,000.00) as
of May 31, 2001; (1) Eleven Million Seven Hundred Thousand
Dollars ($11,700,000.00) as of August 31, 2001; (m)Eleven
Million Eight Hundred Thousand Dollars ($11,800,000.00) as of
November 30, 2001; (n) Eleven Million Nine Hundred Thousand
Dollars ($11,900,000.00) as of February 29, 2002; and (o) Twelve
Million Dollars as of May 31, 2002 and as of the end of each
fiscal quarter thereafter.
Section 3. Amendment To Revolver Note. The REVOLVER NOTE is hereby
amended and restated in its entirety in accordance with the terms and provisions
of the Amended And Restated Revolving Loan Promissory Note of even date herewith
from the BORROWER to the order of the LENDER in the stated principal amount of
Seven Million Dollars ($7,000,000.00).
Section 4. Other Terms. Except as specifically modified herein, all
other terms and provisions of the LOAN AGREEMENT and all other documents
evidencing, securing or otherwise documenting the terms and provisions of the
LOANS (collectively, the "LOAN DOCUMENTS") shall remain unchanged and in full
force and effect and are hereby ratified and confirmed.
Section 5. Guarantors. Each of the GUARANTORS consent to the
modifications contained herein and hereby ratify and confirm all of their
respective duties and obligations under the GUARANTIES, which GUARANTIES remain
in full force and effect.
Section 6. Cash Collateral. In consideration for the LENDER'S agreement
to extend the maturity date of the LOANS and its other agreements contained
herein, EA Financial, Inc. hereby agrees to deposit with the LENDER sums in the
aggregate amount of One Million one Hundred Thousand Dollars ($1,100,000.00)
which shall be held in an account maintained at the LENDER ("ACCOUNT") . EA
Financial, Inc. hereby agrees to assign and pledge to the LENDER as collateral
for the LOANS, all of EA Financial, Inc.'s right, title and interest in and to
the ACCOUNT and all sums held therein, pursuant to the terms and provisions of
documents acceptable to the LENDER.
Section 7. Acknowledgment Of Obligations. The OBLIGORS acknowledge that:
(a) the LOAN DOCUMENTS are the valid and binding obligations of the OBLIGORS, as
indicated, and are fully enforceable in accordance with their stated terms; and
(b) the obligations of the OBLIGORS under the LOAN DOCUMENTS are not subject to
any set-off, defense or counterclaim.
Section 8. Representations And Warranties. As an inducement to the
LENDER to enter into this MODIFICATION, the OBLIGORS make the following
representations and warranties to the LENDER and acknowledge the LENDER'S
justifiable reliance thereon:
a. Accuracy Of Information - All information, documents, reports,
statements, financial statements, and data submitted by or on behalf of the
OBLIGORS in connection with the LOANS are true,
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accurate, and complete and contain no false, incomplete or misleading
statements. All information in the possession of any OBLIGOR which might bear on
the LENDER'S decision to enter into this MODIFICATION has been submitted to the
LENDER.
b. No Litigation. Except as previously disclosed in writing to the
LENDER, there is as of the date hereof, no action, suit, or proceeding
pending of which the BORROWER is required to notify the LENDER pursuant to
Section 6.6 of the LOAN AGREEMENT.
c. No Events Of Default. There are no EVENTS OF DEFAULT under the LOAN
AGREEMENT.
Section 9. Expenses. Upon the request of the LENDER, the BORROWER
shall pay the expenses incurred by the LENDER in connection with the
preparation and negotiation of this MODIFICATION.
Section 10. Binding Effect. This MODIFICATION shall inure to the
benefit of the parties hereto, and shall be binding upon their successors,
personal representatives and assigns.
Section 11. ChoiceOf Law. The laws of the State of Maryland (excluding,
however, conflict of law principles) shall govern and be applied to determine
all issues relating to this MODIFICATION and the rights and obligations of the
parties hereto, including the validity, construction, interpretation, and
enforceability of this MODIFICATION and its various provisions and the
consequences and legal effect of all transactions and events which resulted in
the execution of this MODIFICATION or which occurred or were to occur as a
direct or indirect result of this MODIFICATION having been executed.
Section 12. Tense, Gender, Defined Terms, Captions. As used herein, the
plural shall refer to and include the singular, and the singular, the plural and
the use of any gender shall include and refer to any other gender. All defined
terms are completely capitalized throughout this MODIFICATION. All captions are
for the purpose of convenience only.
Section 13. Waiver Of Jury Trial. The parties agree that any suit,
action, or proceeding, whether claim or counterclaim, brought or instituted by,
or against any of them, or any of their successors or assigns, on or with
respect to this MODIFICATION or which in any way relates, directly or
indirectly, to the obligations of any of the OBLIGORS to the LENDER under this
MODIFICATION or the LOAN DOCUMENTS, or the dealings of the parties with respect
thereto, shall not be tried by a jury. THE PARTIES EXPRESSLY WAIVE ANY RIGHT TO
A TRIAL BY JURY IN ANY SUCH ACTION OR PROCEEDINGS. Each of the OBLIGORS
acknowledges and agrees that this provision is a specific and material aspect of
the agreement between the parties and that the LENDER would not enter into this
MODIFICATION if this provision were not contained herein.
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SECTION 14. RELEASE. EACH OF THE OBLIGORS RELEASES, ACQUITS AND FOREVER
DISCHARGES THE LENDER AND THE. LENDER'S SUBSIDIARIES, AFFILIATES, OFFICERS,
DIRECTORS, AGENTS, EMPLOYEES, SERVANTS, ATTORNEYS AND REPRESENTATIVES FROM ANY
AND ALL CLAIMS, DEMANDS, DEBTS, ACTIONS, CAUSES OF ACTION, SUITS, CONTRACTS,
AGREEMENTS, OBLIGATIONS, ACCOUNTS, DEFENSES, OFFSETS AGAINST THE LIABILITIES OF
ANY KIND OR CHARACTER WHATSOEVER, KNOWN OR UNKNOWN, WHICH ANY OBLIGOR EVER HAD
OR HAS THROUGH THE DATE OF THIS MODIFICATION.
Section 15. Counterparts. This MODIFICATION may be executed in
counterparts each of which shall be binding upon the signatory but all of which
shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this MODIFICATION
under seal as of the date first above written.
WITNESS/ATTEST: BORROWER:
EA ENGINEERING, SCIENCE,
AND TECHNOLOGY, INC.,
A Delaware Corporation
/s/ Patricia O'Donnell By: /s/ Barbara L. Posner
Name: Barbara L. Posner
Title: Chief Operating Officer
Chief Financial Officer
Executive Vice President
GUARANTORS:
EA FINANCIAL, INC.,
A Delaware Corporation
/s/ Patricia O'Donnell By: /s/ Barbara L. Posner
Name: Barbara L. Posner
Title: Treasurer
EA GLOBAL, INC.,
A Delaware Corporation
/s/ Patricia O'Donnell By: /s/ Barbara L. Posner
Name: Barbara L. Posner
Title: Treasurer
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WITNESS/ATTEST: GUARANTORS (cont.):
EA INTERNATIONAL, INC.,
A Maryland Corporation
/s/ Patricia O'Donnell By: /s/ Barbara L. Posner
Name: Barbara L. Posner
Title: Treasurer
LENDER:
ALLFIRST BANK
/s/ Charles J. Fleury By: /s/ John P. Wasowicz
John C. Wasowicz,
Vice President
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Baltimore, Maryland $7,000,000.00
November 1, 2000
AMENDED AND RESTATED
REVOLVING LOAN PROMISSORY NOTE
FOR VALUE RECEIVED, the undersigned EA ENGINEERING, SCIENCE, AND
TECHNOLOGY, INC., a Delaware corporation ("BORROWER"), promises to pay to the
order of ALLFIRST BANK ("BANK") , at the BANK'S offices at 25 South Charles
Street, Baltimore, Maryland 21201 or at such other place as the holder of this
Promissory Note may from time to time designate, the principal sum of Seven
Million Dollars ($7,000,000.00), or such other amount as may, from time to time,
be advanced and outstanding hereunder, together with interest at the rate
hereafter specified. The following terms shall apply to this Promissory Note:
Exhibit A attached hereto contains provisions essential to this
Promissory Note and such Exhibit A, and all terms, conditions and provisions
thereof, are incorporated herein and made a part hereof as if fully set forth.
1. Definitions. The following terms have the following definitions:
a. "ACCOUNT" means the commercial checking account maintained by
the BORROWER with the BANK and designated as Account No. 19120379,
together with any replacement account therefor.
b. "BUSINESS DAY" means any day other than Saturday, Sunday or
other day on which commercial banks in the State of Maryland are
authorized to close.
c. "INITIAL EXCESS BALANCE" means, for any BUSINESS DAY, the amount by
which the collected balance in the ACCOUNT at the end of such BUSINESS
DAY after posting all credits to the ACCOUNT (subject to funds
availability), but prior to posting any debits to the ACCOUNT, exceeds
the TARGET BALANCE.
d. "LINE AVAILABILITY" means, for any BUSINESS DAY, an amount equal to
the difference obtained by subtracting the principal balance
outstanding under the LOAN from the MAXIMUM LINE AMOUNT.
e. "LOAN" means the revolving line of credit being provided by the BANK
to the BORROWER pursuant to the LOAN AGREEMENT.
f. "LOAN AGREEMENT" means the Loan And Security Agreement dated August
22, 1997 by and between the BORROWER and the BANK, as amended from time
to time.
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g. "MAXIMUM LINE AMOUNT" means the amount indicated on Exhibit A
as the MAXIMUM LINE AMOUNT, which amount is the maximum
principal balance of the LOAN which may be outstanding at any
one time.
h. "PRESENTED ITEMS" means, for any BUSINESS DAY, the aggregate amount
of debits which have been presented for payment against the ACCOUNT.
i. "TARGET BALANCE" means the amount indicated on Exhibit A as the
TARGET BALANCE, which amount is the minimum collected balance
that must be maintained in the ACCOUNT.
2. Maturity; Acceleration. This Promissory Note evidences the BORROWER'S
obligations to repay to the BANK all sums advanced by the BANK to the BORROWER
under the LOAN. All sums outstanding under this Promissory Note, including all
principal, accrued interest and fees, shall be repaid in full on September 30,
2002; which date is the final and absolute maturity date of this Promissory Note
and the date on which the LOAN terminates. Upon any default under the terms and
provisions of the LOAN AGREEMENT which is not cured within any applicable grace
or cure period, the holder of this Promissory Note may accelerate and demand the
immediate repayment of all sums outstanding under this Promissory Note.
3. Advances. This Promissory Note shall be used to evidence all advances
and payments of principal made hereunder and all interest due hereunder until it
is surrendered to the BORROWER, and it shall continue to be so used even though
there may be periods prior to such surrender when no amount of principal or
interest is owing hereunder. All advances under the LOAN shall be made in the
form of a transfer of funds into the ACCOUNT in accordance with the procedures
set forth in this Section. The BORROWER hereby irrevocably authorizes the BANK
to make advances in accordance with the procedures set forth herein. At the end
of each BUSINESS DAY, the BANK shall calculate the INITIAL EXCESS BALANCE and
the aggregate amount of the PRESENTED ITEMS. In the event the INITIAL EXCESS
BALANCE is less than the aggregate amount of the PRESENTED ITEMS, the BANK shall
make an advance by transferring funds into the ACCOUNT in an amount equal to the
amount, which when added to the INITIAL EXCESS BALANCE, would be equal to the
aggregate amount of the' PRESENTED ITEMS; provided, however, that the principal
amount of any such advance shall not exceed the LINE AVAILABILITY. If at any
time the amount of the INITIAL EXCESS BALANCE is less than the amount of the
PRESENTED ITEMS by an amount greater than the LINE AVAILABILITY, the BANK shall:
(i) make an advance by transferring funds into the ACCOUNT in an amount equal to
the LINE AVAILABILITY; and (ii) determine, in its sole discretion, which
PRESENTED ITEMS will be paid, and which PRESENTED ITEMS will not be paid. In the
event the INITIAL EXCESS BALANCE is greater than the amount of the PRESENTED
ITEMS, the BANK shall post and pay all of the PRESENTED ITEMS. If, following the
BANK'S posting and paying
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of all of the PRESENTED ITEMS, there remains a balance in the ACCOUNT, in excess
of the TARGET BALANCE, the BANK is hereby irrevocably authorized to debit the
ACCOUNT in an amount up to the portion of the balance in the ACCOUNT which
exceeds the TARGET BALANCE, and apply such sums to the outstanding balance of
the LOAN. The BANK agrees to make such debit of the ACCOUNT to repay sums
outstanding under the LOAN as of the end of each BUSINESS DAY. The BANK reserves
the right to terminate the advance procedures set forth in this Promissory Note
by notifying the BORROWER thereof in writing, in which event, this Promissory
Note shall continue to evidence the BORROWER'S repayment obligation in
connection with the LOAN but the LOAN AGREEMENT shall set forth the manner in
which advances are to be made under the LOAN.
4. Interest Rate. Interest shall accrue on the unpaid principal balance
of this Promissory Note until paid in full at the fluctuating annual rate of
interest set forth in the LOAN AGREEMENT.
5. Calculation Of Interest. Interest shall be calculated on the
basis of a three hundred sixty (360) days per year factor applied to the actual
days on which there exists an unpaid balance hereunder.
6. Repayment. Accrued and unpaid interest, plus any then due applicable
late payment charges or default interest shall be paid in consecutive monthly
payments beginning on December 1, 2000 and continuing on the first calendar
day of each succeeding month until all sums outstanding hereunder are paid
in full.
7. Late Payment Charge. If any payment due hereunder including any final
installment, is not received by the holder within fifteen (15) calendar days
after its due date, the BORROWER shall pay a late payment charge equal to five
percent (5%) of the amount then due. The late payment charge shall be due
whether or not the holder declares this Promissory Note in default or
accelerates and demands immediate payment of the sums due hereunder. The
existence of the right by the holder to receive a late payment charge shall not
constitute a grace period or provide any right in the BORROWER to make a payment
other than on its due date.
8. Application Of Payments. All payments made hereunder shall be applied
first to late payment charges or other sums owed to the holder, next to accrued
interest, and then to principal, or in such other order or proportion as the
holder, in the holder's sole discretion, may elect from time to time.
9. Prepayment. The BORROWER may prepay this Promissory Note in whole or
in part at any time or from time to time without premium or additional interest.
All prepayments under this Promissory Note shall be applied to the outstanding,
principal balance in the inverse order of scheduled maturities.
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10. Rights Upon Default. Upon the occurrence of an "EVENT OF DEFAULT"
(as that term is defined in the LOAN AGREEMENT), in addition to all other rights
or remedies available to the holder under the LOAN AGREEMENT and all other
documents evidencing, securing or otherwise documenting the loan evidenced by
this Promissory Note (collectively with the LOAN AGREEMENT, the "LOAN
DOCUMENTS") or under applicable law, the holder of this Promissory Note shall
have the following rights:
a. Acceleration. The holder of this Promissory Note, in the
holder's sole discretion and without notice or demand, may declare the entire
unpaid principal balance plus accrued interest and all other sums due hereunder
immediately due and payable. Reference is made to the LOAN DOCUMENTS for further
and additional rights on the part of the holder to declare the entire unpaid
principal balance plus accrued interest and all other sums due hereunder
immediately due and payable.
b. Default Interest Rate. The holder of this Promissory Note, in
the holder's sole discretion and without notice or demand, may raise the rate of
interest accruing on the unpaid principal balance by two (2) percentage points
above the rate of interest otherwise applicable, independent of whether the
holder elects to accelerate the unpaid principal balance as a result of such
default, unless prior to the imposition of the default rate of interest, the
BORROWER cures such event to the satisfaction of the holder hereof. If the
default rate of interest is imposed by the holder, the default rate shall remain
in effect until the event authorizing the imposition thereof has been cured to
the holder's satisfaction. Any individual waiver of the holder's right to impose
the default rate of interest or to retain the default rate of interest after
imposition thereof shall not be considered a waiver of this section or any
future right of the holder to impose the default rate of interest pursuant to
this Section.
c. Confession Of judgment. The BORROWER authorizes any attorney
admitted to practice before any court of record in the United States to appear
on behalf of the BORROWER in any court in one' or more proceedings, or before
any clerk thereof or prothonotary or other court official, and to confess
judgment against the BORROWER in favor of the holder of this Promissory Note in
the full amount due on this Promissory Note (including principal, accrued
interest and any and all charges, fees and costs) plus attorneys' fees equal to
fifteen percent (15%) of the amount due, plus court costs, all without prior
notice or opportunity of the BORROWER for prior hearing. The BORROWER agrees and
consents that venue and jurisdiction shall be proper in the Circuit Court of any
County of the State of Maryland or of Baltimore City, Maryland, or in the United
States District Court for the District of Maryland. The BORROWER waives the
benefit of any and every statute, ordinance, or rule of court which may be
lawfully waived conferring upon the BORROWER any right or privilege of
exemption, homestead rights, stay of execution, or supplementary
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proceedings, or other relief from the enforcement or immediate enforcement of a
judgment or related proceedings on a judgment; provided, however, the BORROWER
does not waive the right to raise a defense based on an actual controversy as to
the merits of the confession of judgment action under Rule 2-611, Maryland Rules
Annotated Code of Maryland. The authority and power to appear for and enter
judgment against the BORROWER shall not be exhausted by one or more exercises
thereof, or by any imperfect exercise thereof, and shall not be extinguished by
any judgment entered pursuant thereto; such authority and power may be exercised
on one or more occasions from time to time, in the same or different
jurisdictions, as often as the holder shall deem necessary, convenient, or
proper. Notwithstanding the holder's right to obtain a judgment by confession
which includes attorney's fees of fifteen percent of the amount due hereunder,
the holder shall only collect attorney fees in an amount equal to the actual
attorney fees incurred in connection with the enforcement of this Promissory
Note and the LOAN DOCUMENTS.
11. Interest Rate After Judgment. If judgment is entered against the
BORROWER on this Promissory Note, the amount of the judgment entered (which may
include principal, interest, fees, and costs) shall bear interest at the higher
of the maximum interest rate imposed upon judgments by applicable law or the
above described default interest rate, to be determined on the date of the entry
of the judgment.
12. Expenses Of Collection And Attorneys' Fees. Should this Promissory
Note be referred to an attorney for collection, whether or not judgment has been
confessed or suit has been filed, the BORROWER shall pay all of the holder's
reasonable costs, fees and expenses, including reasonable attorneys' fees,
resulting from such referral.
13. Waiver Of Defenses. In the event any one or more holders of this
Promissory Note transfer this Promissory Note for value, the BORROWER agrees
that all subsequent holders of this Promissory Note who take for value and
without actual knowledge of a claim or defense of the BORROWER against a prior
holder shall not be subject to any claims or defenses which the BORROWER may
have against a prior holder, all of which are waived as to the subsequent
holder, and that all such subsequent holders shall have all rights of a holder
in due course with respect to the BORROWER even though the subsequent holder may
not qualify, under applicable law, absent this section, as a holder in due
course. The BORROWER shall retain all rights and claims which the BORROWER may
have against prior holders despite any such transfers and the waiver of defenses
provided in this section as to subsequent holders.
14. Waiver of Protest. The BORROWER, and all parties to this
Promissory Note, whether maker, indorser, or guarantor, waive presentment,
notice of dishonor and protest.
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15. Extensions Of Maturity. All parties to this Promissory Note,
whether maker, indorser, or guarantor, agree that the maturity of this
Promissory Note, or any payment due hereunder, may be extended at any time or
from time to time without releasing, discharging, or affecting the liability of
such party.
16. Manner And Method of Payment. All payments called for in this
Promissory Note shall be made in lawful money of the United States of America.
If made by check, draft, or other payment instrument, such check, draft, or
other payment instrument shall represent immediately available funds. In the
holder's discretion, any payment made by a check, draft, or other payment
instrument shall not be considered to have been made until such time as the
funds represented thereby have been collected by the holder. Should any payment
date fall on a non-banking day, the BORROWER shall make the payment on the next
succeeding banking day.
17. Notices. Any notice or demand required or permitted by or in
connection with this Promissory Note shall be given in the manner specified in
the LOAN AGREEMENT for the giving of notices under the LOAN AGREEMENT.
Notwithstanding anything to the contrary, all notices and demands for payment
from the holder actually received in writing by the BORROWER shall be considered
to be effective upon the receipt thereof by the BORROWER regardless of the
procedure or method utilized to accomplish delivery thereof to the BORROWER.
18. Assignability. This Promissory Note may be assigned by the BANK or
any holder at any time or from time to time.
19. Joint and Several If more than one person or entity is executing
this Promissory Note as a BORROWER, all liabilities under this Promissory Note
shall be joint and several with respect to each of such persons or entities.
20. Binding Nature. This Promissory Note shall inure to the benefit of
and be enforceable by the BANK and the BANK'S successors and assigns and any
other person to whom the BANK or any holder may grant an interest in the
BORROWER'S obligations hereunder, and shall be binding and enforceable against
the BORROWER and the BORROWER'S personal representatives, successors and
assigns.
21. Invalidity Of Any Part. If any provision or part of any provision
of this Promissory Note shall for any reason be held invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Promissory Note and this
Promissory Note shall be construed as if such invalid, illegal or unenforceable
provision or part thereof had never been contained herein, but only to the
extent of its invalidity, illegality, or unenforceability.
22. Choice Of Law. The laws of the State of Maryland (excluding,
however, conflict of law principles) shall govern and
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be applied to determine all issues relating to this Promissory Note and the
rights and obligations of the parties hereto, including the validity,
construction, interpretation, and enforceability of this Promissory Note and its
various provisions and the consequences and legal effect of all transactions and
events which resulted in the issuance of this Promissory Note or which occurred
or were to occur as a direct or indirect result of this Promissory Note having
been executed.
23. Consent To Jurisdiction; Agreement As To Venue. The BORROWER
irrevocably consents to the non-exclusive jurisdiction of the courts of the
State of Maryland and of the United States District Court for the District of
Maryland, if a basis for federal jurisdiction exists. The BORROWER agrees that
venue shall be proper in any circuit court of the State of Maryland selected by
the BANK or in the United States District Court for the District of Maryland if
a basis for federal jurisdiction exists and waives any right to object to the
maintenance of a suit in any of the state or federal courts of the State of
Maryland on the basis of improper venue or of inconvenience of forum.
24. Unconditional Obligations. The BORROWER'S obligations under this
Promissory Note shall be the absolute and unconditional duty and obligation of
the BORROWER and shall be independent of any rights of set-off, recoupment or
counterclaim which the BORROWER might otherwise have against the holder of this
Promissory Note, and the BORROWER shall pay absolutely the payments of
principal, interest, fees and expenses required hereunder, free of any
deductions and without abatement, diminution or set-off.
25. Seal And Effective Date. This Promissory Note is an instrument
executed under seal and is to be considered effective and enforceable as of
the date set forth on the first page hereof, independent of the date of
actual execution and delivery.
26. Tense; Gender; Defined Terms; Section Headings. As used herein,
the singular includes the plural and the plural includes the singular. A
reference to any gender also applies to any other gender. Defined terms are
entirely capitalized throughout. The section headings are for convenience
only and are not part of this Promissory Note.
27. Actions Against Bank. Any action brought by the BORROWER against
the BANK which is based, directly or indirectly, on this Promissory Note or any
matter in or related to this Promissory Note, including but not limited to the
making of the loan evidenced hereby or the administration or collection thereof,
shall be brought only in courts located in the State of Maryland. The BORROWER
may not file a counterclaim against the BANK in a suit brought by the BANK
against the BORROWER in a state other than the State of Maryland unless under
the rules of procedure of the court in which the BANK brought the action the
counterclaim is mandatory, and not merely permissive, and will be considered
waived unless
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filed as a counterclaim in the action instituted by the BANK. The BORROWER
agrees that any forum other than the State of Maryland is an inconvenient forum
and that a suit brought by the BORROWER against the BANK in a court of any
state other than the State of Maryland should be forthwith dismissed or
transferred to a court located in the State of Maryland by that Court.
28. Amendment And Restatement. This Promissory Note is an amendment and
restatement of the BORROWER'S obligations under the Revolving Loan Promissory
Note dated August 22, 1997 from the BORROWER to the order of the BANK in the
stated principal amount of Eight Million Five Hundred Thousand Dollars
($8,500,000.00) ("ORIGINAL NOTE") . This Promissory Note is not a novation of
the BORROWER'S obligations under the ORIGINAL NOTE but merely a decrease in the
maximum principal amount of such obligations and an amendment and restatement of
such obligations.
29. Waiver Of Jury Trial. The BORROWER (by execution of this Promissory
Note) and the BANK (by acceptance of this Promissory Note) agree that any suit,
action, or proceeding, whether claim or counterclaim, brought or instituted by
or against the BORROWER or the BANK, or any successor or assign of the BORROWER
or the BANK, on or with respect to this Promissory Note or any of the other LOAN
DOCUMENTS, or which in any way relates, directly or indirectly, to the
obligations of the BORROWER to the BANK under this Promissory Note or any of the
other LOAN DOCUMENTS, or the dealings of the parties with respect thereto, shall
be tried only by a court and not by a jury. THE BORROWER AND THE BANK HEREBY
EXPRESSLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION, OR
PROCEEDING. The BORROWER and the BANK acknowledge and agree that this provision
is a specific and material aspect of the agreement between the parties and that
the BANK would not enter into the transaction with the BORROWER if this
provision were not part of their agreement.
IN WITNESS WHEREOF, the BORROWER has executed this Promissory Note
specifically intending this Promissory Note to constitute an instrument under
seal.
WITNESS/ATTEST: BORROWER:
EA ENGINEERING, SCIENCE,
TECHNOLOGY, INC.,
A Delaware Corporation
/s/ Patricia O'Donnell By: /s/ Barbara L. Posner
Name: Barbara L. Posner
Title: Chief Operating Officer
Chief Financial Officer
Executive Vice President
<PAGE>
EXHIBIT A - PROMISSORY NOTE
Commercial Checking Account Number 19120379
Target Balance $0.00
Maximum Line Amount the "MAXIMUM REVOLVER
AMOUNT" as defined in
the LOAN AGREEMENT
WITNESS/ATTEST: BORROWER:
EA ENGINEERING, SCIENCE,
TECHNOLOGY, INC.,
A Delaware Corporation
/s/ Patricia O'Donnell By: /s/ Barbara L. Posner
Name: Barbara L. Posner
Title: Chief Operating Officer
Chief Financial Officer
Executive Vice President
<PAGE>
