SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO
SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): October 16, 1997
THERMO-MIZER ENVIRONMENTAL CORP.
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(Exact name of Registrant as specified in charter)
DELAWARE 33-87284-N4 22-2312917
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(State or other (Commission (I.R.S Employer
jurisdiction File Number) Identification
of incorporation) Number)
528 Oritan Avenue, Ridgefield, New Jersey 07657
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(Address of Principal Executive Offices) (Zip Code)
201-941-5805
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Registrant's Telephone number including area code
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ITEM 2. Acquisition or Disposition of Assets.
a) Acquisition of Laminaire Corporation
On October 16, Thermo-Mizer Environmental Corp. (the "Registrant")
acquired all of the outstanding shares of Common Stock of the Laminaire
Corporation ("Laminaire") from Garay LLC for a purchase price of $3,000,000,
subject to adjustment. Laminaire, based in Rahway, New Jersey, manufactures and
distributes cleanroom products and also produces a variety of electronic circuit
boards. The purchase price consisted of a cash payment of $1,000,000, a
convertible promissory note in the principal amount of $2,200,000 and a
promissory note with a principal amount to be determined (the "Second Note").
The First Note bears interest at the rate of 10% per annum and is
payable in 60 equal installments of principal and interest of $33,829.79
commencing November 16, 1997 with a final payment of principal of $1,000,000 due
on October 16, 2002. The First Note is convertible into shares of Common Stock
at a conversion price per share equal to the average closing bid price for
the five trading days prior to closing. The First Note is convertible
commencing April 16, 1998 for two years in amounts not exceeding $500,000 for
each four month period. The holder of the Convertible Debenture is entitled to
demand registration of the Common Stock issuable upon conversion of the First
Note one time at the Registrant's expense commencing April 16, 1999. The holder
of the First Note is also entitled to piggyback registration with respect to
such shares of Common Stock with respect to any registration statement filed by
the Registrant with the exception of the registration statement to be filed in
connection with any of the securities issued in connection with obtaining the
financing for the acquisition of the stock of Laminaire.
The Second Note will be in a principal amount equal to the difference
between (a) the Stockholders' Equity (as hereinafter defined) of Laminaire as of
September 30, 1997 minus $200,000 minus (b) the Stockholders' Equity of
Laminaire as of September 30, 1996. In the event that the adjustment as
determined in accordance with clause (iii) is less than $0, then the principal
amount of the First Note shall be reduced by such amount. The term
"Stockholders' Equity" shall mean as of the time of any determination thereof,
the net worth of Laminaire, all as determined by the Company in accordance with
generally accepted accounting principles. The Second Note bears interest at the
rate of 15% per anum. The principal amount of the Second Note, and all accrued
interest thereon, is due on March 31, 1998.
In conjunction with the acquisition of Laminaire, the Registrant issued
a promissory note to Charles Garay in the principal amount of $90,479.27 (the
"Third Note"). The Third Note bears interest at the rate of 15% per annum and
the principal amount of the Third Note, and all accrued interest thereon, is due
on February 13, 1998.
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The Registrant's obligations under the First Note, the Second Note and
the Third Note are secured by first priority security interests in the real
property and all tangible and intangible personal property including inventory
and accounts receivables of Laminaire and the inventory and equipment of the
Registrant and a subordinate security interest in the accounts receivable of the
Registrant. The subordinate security interest is subordinate to the interests of
the holders of convertible debentures and convertible promissory notes in the
principal amount of $550,000.
In conjunction with the acquisition of all of the outstanding stock of
Laminaire, the Registrant paid all of Laminaire's obligations to Corestates
National Bank ("Corestates") under a mortgage secured by Laminaire's interest in
its real property and building located in Rahway, New Jersey. The Registrant
paid Corestates approximately $1,100,000 on October 16, 1997. Laminaire's
obligations to Corestates had been guaranteed by Charles J. Garay, which
guaranty was terminated upon payment of the mortgage. Upon satisfaction of its
obligations to Corestates, Laminaire owed its property free of any liens or
encumbrances, except for the security interest granted in connection with the
First, Second and Third Notes.
Laminaire has used the building located on its property in Rahway, New
Jersey as its principal office and manufacturing facility for the manufacture of
cleanroom products and a variety of electronic circuit boards.. The Registrant
anticipates continuing Laminaire's operations at such location and may relocate
the Registrant's principal executive offices from Ridgefield, New Jersey to
Laminaire's facility.
Garay LLC, the seller of the common stock of Laminaire, is a New Jersey
limited liability company which is partially owed by Charles J Garay and Antonio
Garay. Charles J. Garay is a director of Laminaire and became a director of the
Registrant on October 28, 1997. He is also serving as a consultant to Laminaire
through January 16, 1998. Antonio Garay became the President and Chief Operating
Officer of Laminaire on October 16, 1997.
b) Source of Funds
The funds utilized by the Registrant to purchase the capital stock of
Laminaire and satisfy Laminaire's obligations to Corestates were obtained from
the issuance of Common Stock of the Registrant for aggregate consideration of
$200,000 and the issuance of convertible promissory notes and debentures for the
balance.
i. Concurrent with the closing of the acquisition of Laminaire
on October 16, 1997, the Registrant issued convertible debentures (the
"Debentures") to three investors in the principal amount of $300,000 pursuant to
Regulation S under the Securities Act. The Registrant will pay interest to the
holders of the Debenture at the rate of 5% per annum. Interest on the Debentures
is payable in cash or Common Stock of the Registrant, at the Registrant's
discretion. The Registrant's obligations under the Debentures are unsecured. The
Debentures are convertible into shares of the Registrant's
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Common Stock at any time beginning forty-one (41) days after the date of
issuance, at a price per share (the "Conversion Price") equal to the lesser of
70% of the average closing bid price for the five trading days preceding: (i)
the date of conversion or, (ii) the date of closing, October 16, 1997.
The Registrant received net proceeds of $280,000 from the sale
of the Debentures, after deduction of expenses, including placement agent's
commission of $20,000. The placement agent for the transaction is Monetary
Advancement International, Ltd.
The Debentures have been issued to three investors, who have
warranted that they are not related or affiliated, and that they are (i) not a
"U.S. Person", (as that term is defined in Rule 902(o) of Regulation S), and
(ii) an "accredited investor" as defined in Rule 501 of Regulation D. The
Debentures cannot be transferred, offered or sold in the "U.S.", or to "U.S.
persons," as such term is defined in Rule 902(o) of Regulation S, until after
forty-one (41) days from issuance.
ii. Concurrent with the closing of the acquisition of
Laminaire on October 16, 1997, the Registrant issued 326,521 shares of Common
Stock to a single investor, the Optimum Fund for aggregate consideration of
$200,000 pursuant to Regulation S under the Securities Act. The Optimum Fund
warranted that it is (1) not a "U.S. Person", (as that term is defined in Rule
902(o) of Regulation S), and (2) an "accredited investor" as defined in Rule 501
of Regulation D. The shares of Common Stock cannot be transferred, offered or
sold in the "U.S.", or to "U.S. persons," as such term is defined in Rule 902(o)
of Regulation S, until after forty-one (41) days from issuance. The placement
agent for the transaction was U.S. Milestone, Inc.
iii. Concurrent with the closing of the acquisition of
Laminaire on October 16, 1997, the Registrant issued convertible promissory
notes ( the "Convertible Notes") to Norwood Venture Corp. in the principal
amount of $500,000 pursuant to Regulation D under the Securities Act. The
Registrant will pay interest to the holders of the Debenture at the rate of 10%
per annum. The Registrant's obligations under the Debentures are secured by a
first lien (except for an existing lien to secure indebtedness in the principal
amount of $50,000) in the Registrant's accounts receivables and a lien that is
second in priority to that of Garay LLC, the seller of the capital stock of
Laminaire, with respect to the inventory and equipment of the Registrant and the
accounts receivable, inventory and equipment of Laminaire. Laminaire also
executed a guaranty in favor of Norwood with respect to the Registrant's under
the Convertible Note. The Convertible Notes are convertible into shares of the
Registrant's Common Stock at any time at a price per share (the "Conversion
Price") equal to the lesser of 70% of the average closing bid price for the five
trading days preceding: (i) the date of conversion or, (ii) the date of closing,
October 16, 1997. The Registrant agreed to register the shares of Common Stock
issuable upon conversion of the Convertible Note under the Securities Act.
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The Registrant received net proceeds of $440,000 from the sale
of the Debentures, after deduction of expenses, including placement agent's
commission of $50,000 and legal fees payable to Norwood's counsel of $10,000.
The placement agent for the transaction is Monetary Advancement International,
Ltd.
iv. The balance of the purchase price for the capital stock of
Laminiare, including the amounts paid toe Corestates, was obtained by the
Registrant from the issuance of convertible debentures in the aggregate
principal amount of $1,500,000 in July, August and September 1997.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS
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(A -B) The financial statements with respect to the acquisition of Laminaire are
also included in, and incorporated by reference to, the Company's report on Form
10-KSB filed on October 13, 1997
(C) EXHIBITS.
Exhibit Number Title
10.19 Purchase Agreement between the Company and Laminaire Corporation
dated October 13, 1997 (1)
10.20 Promissory Note in Principal Amount of $2,200,000 dated October 16,
1997 executed by the Company in favor of Garay LLC
10.21 Promissory Note dated October 16, 1997 executed by the Company in
favor of Garay LLC
10.22 Promissory Note in Principal Amount of $90,479 dated October 16, 1997
executed by Company in favor of Charles Garay.
10.23 Guaranty executed by Laminaire Corporation on October 16, 1997. 10.24
Mortgage and Security Agreement executed by Laminaire Corporation 10.25
Employment Agreement of Charles J. Garay dated October 16, 1997 10.26 Employment
Agreement of Antonio Garay dated October 16, 1997 10.27 Employment Agreement of
Gerald E. Really dated October 16, 1997 10.28 Employment Agreement of Etta
Monteleone dated October 16, 1997 10.29 Form of 5%Convertible Debenture issued
by the Company on October 16,
1997 in aggregate principal amount of $300,000
10.30 Convertible Note Purchase Agreement between the Company and
Norwood Venture Corp. dated October 16, 1997, with form of
Convertible Promissory Note executed by the Company in favor of
Norwood Venture Corp. dated October 16, 1997
10.31 Security Agreement executed by the Company in favor of Norwood
Venture Corp. dated October 16, 1997
10.32 Security Agreement executed by Laminaire Corporation in favor of
Norwood Venture Corp. dated October 16, 1997
10.33 Guaranty executed by Laminaire Corporation in favor of Norwood Venture
Corp. dated October 16, 1997
(1) Included in, and incorporated by reference to, the Company's report on
Form 10-KSB filed on October 13, 1997
ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S.
Reference is made to the response to Item 2.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THERMO-MIZER ENVIRONMENTAL CORP.
/s/ Jon J. Darcy
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By: Jon J. Darcy
President
Date: October 27, 1997
laminaire\8k1026.97
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EXHIBIT 10.20 PROMISSORY IN PRINCIPAL AMOUNT OF $2,200,000 DATED OCTOBER
16, 1997 EXECUTED BY THE COMPANY IN FAVOR OF GARAY LLC.
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EXHIBIT 10.20
US $2,200,000
THERMO-MIZER ENVIRONMENTAL CORP.
10% CONVERTIBLE NOTE DUE OCTOBER 16, 2002
FOR VALUE RECEIVED, the Thermo-Mizer Environmental Corp., a corporation
duly organized and existing under the laws of Delaware (the "Company") promises
to pay to the order of Garay LLC, the registered holder hereof and its
successors and assigns (the "Holder"), the principal sum of Two Million Two
Hundred Thousand Dollars (US $2,200,000) on October 16, 2002 (five years from
the date hereof) (the "Maturity Date"), and to pay interest on the principal sum
outstanding at the rate of ten percent (10%) per annum as follows:
The principal and interest shall be repaid in 60 consecutive monthly
installments each in the amount of $33,829.79, commencing on the 16th
day of November, 1997 and on the 16th day of each month thereafter, and
the final installment shall be paid on the 16th day of October, 2002 in
the principal amount of $1,000,000.
Accrual of interest on the unpaid outstanding principal balance shall commence
on the date hereof and shall continue each day until payment in full of the
outstanding principal sum has been made or duly provided for. The interest so
payable will be paid to the Holder, at the address last designated in writing by
the Holder hereof from time to time. Accrued interest shall also be payable when
the entire principal balance of this Note becomes due and payable (whether by
demand, stated maturity or acceleration), or, if earlier, when such principal
balance is actually paid.
In the event of default, the interest rate shall be increased to 15% as of the
date of default, and such interest shall accrue on the unpaid balance hereof
until the entire balance has been paid in full, notwithstanding the entry of any
judgment against the Company.
This Note is secured by a Security Agreement of even date.
Interest shall be calculated on the basis of a 360 day year and shall be charged
for the actual number of days elapsed. Interest shall be invoiced for any
payment received after the 16th day of the month and computed on a daily basis.
This Note is subject to the following additional provisions:
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1. The Note may be prepaid by the Company for the total amount of the
then outstanding balance of the Note, plus all accrued interest thereon, at the
option of the Company at any time without penalty. Any partial prepayment shall
be applied against the outstanding principal and shall not postpone the due date
of any subsequent payments..
2. Prior to due presentment for transfer of this Note, the Company and
any agent of the Company may treat the person in whose name this Note is duly
registered on the Company's books and records as the owner hereof for the
purpose of receiving payment as herein provided and for all other purposes,
whether or not this Note be overdue.
3. The Holder of this Note is entitled, at its option, at any time
commencing six months after issue hereof and ending two years from the date
hereof, to convert up to Five Hundred Thousand (US$500,000) Dollars of the
principal amount of the Note, in each four-month period, into shares of the
Company's common stock, $0.01 par value per share, of the Company (the
"Registrable Stock"), at the Conversion Price, as hereinafter defined. The
Conversion Price shall equal the Market Price (as defined below) of the
Company's Common Stock. For purposes of this Section 3, the "Market Price" shall
be the average closing bid price of the Common Stock for the five (5) business
days immediately preceding the acquisition of Laminaire Corporation
("Laminaire"). Such conversion shall be effectuated by surrendering the Note to
be converted with the form of conversion notice attached hereto as Exhibit I,
executed by the Holder of this Note evidencing such Holder's intention to
convert this Note or a specified portion (as above provided) hereof, and
accompanied by proper assignment hereof in blank. Accrued but unpaid interest
shall be subject to conversion. No fractional shares or scrip representing
fractions of shares will be issued on conversion, but the number of shares
issuable shall be rounded to the nearest whole share, with the fraction paid in
cash at the discretion of the Company. The date on which notice of conversion is
given shall be deemed to be the date on which the Holder has delivered this
Note, with the conversion notice duly executed, to the Company. In the event of
the prepayment of a portion of the principal amount of the Note, only the
outstanding principal amount of the Note can be converted on the Maturity Date
after giving effect to such prepayment. Upon the conversion of a portion of the
outstanding principal amount of the Note, the Company will reissue a new
promissory note to the Holder with the same terms and conditions as this Note
for the balance of the outstanding principal amount of the Note.
4. Registration.
(a) If the Company at any time proposes to register any of its
Common Stock under the Securities Act of 1933 (the "Securities Act") (other than
a registration pursuant to form S-8, or a merger, acquisition or exchange offer
as to which Rule 145 promulgated under the Securities Act is applicable, or a
registration with respect to securities issued in connection with financing the
acquisition of Laminaire Corporation), the Company shall give prompt written
notice to the Holder of each such intended registration by the Company and the
Holder shall be entitled to request that the Company or such Controlling
Stockholder include in any such registration any number of Registrable Stock
then owned (or issuable upon conversion of the Note) by the Holders,
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subject to the limitations set forth in Paragraph 4 hereof. There can be no
assurance that the Company will effectuate any public offering of its
securities.
Upon the written request of any Holder made within 20 days after the giving
by the Company of any such notice of intention to register (which request shall
specify the number of Registrable Stock intended to be disposed of by such
Holder), the Company shall use its best efforts to effect the registration under
the Securities Act of all Registrable Stock which the Company has been so
requested to register by such Holder (subject to the restrictions set forth in
Paragraph 4 hereof).
If the managing underwriter in such underwritten offering shall advise the
Company that it declines to include a portion or all of the shares of
Registrable Stock requested by the Holder or its Permitted Assignee
(collectively, the "Securityholders") to be included in the registration
statement, then (A) registration of all of the shares sold in connection with
the offering shall be excluded from such Registration Statement on the condition
that all securities to be registered by other selling securityholders, if any,
are also excluded and (B) registration of a portion of such shares of
Registrable Stock shall be excluded if, such portion is allocated among the
Securityholders and any other selling securityholders in proportion to the
respective numbers of securities to be registered by each such Securityholders
and other selling securityholder. In such event the Company shall give the
Securityholder prompt notice of the number of shares of Registrable Stock
excluded.
Notwithstanding the provisions of this Paragraph 4, the Company shall have
the right at any time after it shall have given written notice pursuant to this
Section (irrespective of whether a written request for inclusion of the shares
of Registrable Stock shall have been made) to elect not to file any such
proposed registration statement, or to withdraw the same after the filing but
prior to the effective date thereof, and the Company will be relieved of its
obligation to register any shares of Registrable Stock on behalf of such Holder
in connection with such registration, but not with respect to subsequent
registrations.
(b) If on any one occasion commencing 18 months from the date
hereof, the Company shall receive from the Holder (or, if the Note has been
transferred to more than one Holder, from holders of a majority of the principal
amount of the Note) a written request that the Company effect the registration
of all of the Registrable Stock owned by such holders, the Company will, at its
expense,
(i) as soon as practicable, use all commercially
reasonable efforts to effect such registration as may be so
requested and as would permit or facilitate the sale and
distribution of the Registrable Stock of the Holder . If the
underwriter managing the offering advises the Holders who have
requested inclusion of their Registrable Stock in such
registration that marketing considerations require a
limitation on the number of Registrable Stock offered, such
limitation shall be imposed pro rata among such Holders who
requested inclusion of Registrable Stock in such registration
according to the number of Registrable Stock each such Holder
requested to be included in such
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registration. Neither the Company nor any other shareholder
may include Registrable Stock in a registration effected under
this Section without the consent of other Holders holding a
majority of the Registrable Stock sought to be included in
such registration if the inclusion of Registrable Stock by the
Company or the other shareholders would limit the number of
Registrable Stock sought to be included by the Holders or
reduce the offering price thereof. No registration initiated
by the Holder hereunder shall count as a registration under
this Section unless and until it shall have been declared
effective.
(ii) The underwriter of any underwriting requested
under this Section shall be selected by the Holder holding a
majority of the Registrable Stock included therein; provided
that such underwriter must be reasonably acceptable to the
Company.
(c) In the case of each registration effected by the Company
pursuant to Paragraph 4, the Company will keep the Holder or its Permitted
Assignee advised in writing as to the initiation of each registration and as to
the completion thereof. As used in this Agreement, "Permitted Assignee" shall
mean an "affiliate" of the Holder as defined in Rule 144 of the Securities Act
or any other transferee pursuant to a transfer made in compliance with
applicable state and federal securities laws. At its expense, the Company will:
(i) Keep such registration effective for a period of
9 months or until the Holder or its Permitted Assignee has
completed the distribution described in the registration
statement relating thereto, whichever occurs earlier.
(ii) Furnish such number of prospectuses and other
documents incident thereto as the Holder or its Permitted
Assignee from time to time may reasonably request.
(d) Indemnification will be furnished as follows:
(i) The Company will indemnify the Holder and any
Permitted Assignees whose Registrable Stock is included in any
registration when registration has been effected pursuant to
paragraph (a), and each underwriter, if any, and each person
who controls any underwriter within the meaning of the
Securities Act or the Securities Exchange Act of 1934, as
amended, (the "Exchange Act") against all claims, losses,
damages and liabilities (or actions in respect thereof)
arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any
registration statement or prospectus incident to any such
registration or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading,
provided that the Company will be not be liable in any such
case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue
statement or omission based upon information furnished to the
Company in writing by the Holder
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or a Permitted Assignee whose Registrable Stock are included
in such registration or by any underwriter specifically for
use herein.
(ii) The Holder and each Permitted Assignee will, if
Registrable Stock held by them are included in the securities
as to which such registration is being effected, indemnify the
Company, each of its directors, and officers and counsel and
each underwriter, if any, of the Company's securities covered
by the Registration Statement, each person who controls the
Company or such underwriter within the meaning of the Exchange
Act and the Securities Act and the rules and regulations
thereunder, each other stockholder participating in such
distribution and each of his officers, directors and partners,
and each person controlling such other stockholder, against
all claims, losses, damages and liabilities (or actions in
respect thereto) arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact
contained in any such registration statement, prospectus, or
any omission (or alleged omission) to state therein a material
fact required to be stated therein in order to make the
statements therein not misleading in each case to the extent,
but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in
such document in reliance upon and in conformity with
information furnished to the Company in writing by the Holder
and each Permitted Assignee; provided, however, that the
obligations of the Holder and each Permitted Assignee
hereunder shall be limited to an amount equal to the proceeds
received by such Holder or each Permitted Assignee, as the
case may be, of securities sold as contemplated herein.
(iii) Each party entitled to indemnification under
this agreement (the "Indemnified Party") shall give notice to
the party required to provide indemnification (the
"Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the
defense of any such claim or any litigation resulting
therefrom, provided that counsel for the Indemnifying Party,
who shall conduct the defense of such claim or any litigation
resulting therefrom, shall be approved by the Indemnified
Party (whose approval shall not be unreasonably withheld), and
the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this
Section 4.
Each Indemnified Party shall furnish such information
regarding itself or the claim in question as an Indemnifying
Party may reasonably request in writing and as shall be
reasonably required in connection with defense of such claim
and any litigation resulting therefrom.
(e) The Holder shall furnish to the Company such information
regarding the Holder and any information relating to the registration of any of
the Company's securities proposed
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by the Holder as the Company may reasonably request in writing and as shall be
reasonably required in connection with any registration.
5. No provision of this Note shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the principal of, and
interest on, this Note at the time, place, and rate, and in the coin currency,
herein prescribed.
6. The obligations of the Company hereunder are secured by the
collateral (the "Collateral") and on the terms as set forth in that certain
security agreement dated as of the date hereof by and among the Company and the
Holder (the "Security Agreement").
7. (a) In case the Company shall at any time after the date of this
Note (i) declare a dividend on the outstanding Common Stock in shares of Common
Stock of its capital stock, (ii) subdivide the outstanding Common Stock, (iii)
combine the outstanding Common Stock into a smaller number of shares of Common
Stock, or (iv) issue any shares of Common Stock of its capital stock by
reclassification of the Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
corporation), then, in each case, the Conversion Price, and the number and kind
of Registrable Stock receivable upon exercise, in effect at the time of the
record date for such dividend or of the effective date of such subdivision,
combination, or reclassification shall be proportionately adjusted so that the
holder of the Note exercised after such time shall be entitled to receive the
aggregate number and kind of Registrable Stock which if such Note had been
exercised immediately prior to such time, he would have owned upon such exercise
and been entitled to receive by virtue of such dividend, subdivision,
combination, or reclassification. Such adjustment shall be made successively
whenever any event listed above shall occur.
(b) In case the Company shall distribute to all holders of
Common Stock (including any such distribution made to the stockholders of the
Company in connection with a consolidation or merger in which the Company is the
continuing corporation) evidences of its indebtedness or assets (other than cash
dividend distributions and dividends payable in shares of Common Stock),
subscription rights, options, or Notes or convertible or exchangeable securities
containing the right to subscribe for or purchase shares of Common Stock, then
in each case, the Conversion Price shall be adjusted by multiplying the
Conversion Price in effect immediately prior to the record date for the
determination of stockholders entitled to receive such distribution by a
fraction of which the numerator shall be the "current market price" per share of
Common Stock (as defined in Section 7(c) on such record date, less the fair
market value (as determined in good faith by the board of directors of the
Company, whose determination shall be conclusive absent manifest error) of the
portion of the evidences of indebtedness or assets so to be distributed, or of
such subscription rights, options, or Notes, convertible or exchangeable
securities containing the right to subscribe for or purchase shares of Common
Stock, applicable to the share, and of which the denominator shall be such
"current market price" per share of Common Stock. Such adjustment shall be made
whenever any such distribution is made, and shall become effective on the date
of such
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distribution retroactive to the record date for the determination of
stockholders entitled to receive such distribution.
(c) For the purpose of any computation under Section 7(b) the
"current market price" per share of Common Stock on any date shall be deemed to
be the average of the daily closing prices for the 30 consecutive trading days
commencing 45 trading days before such date. The closing price for each day
shall be the last reported sales price regular way or, in case no such reported
sale takes place on such day, the closing bid price regular way, in either case
on the principal national securities exchange on which the Common Stock is
listed or admitted to trading or, if the Common Stock is not listed or admitted
to trading on any national securities exchange, the highest reported bid price
as furnished by the NASDAQ Stock market ("NASDAQ") or the electronic bulletin
board. If on any such date the Common Stock is not quoted in any such
organization, the fair value of the Common Stock on such date, as determined in
good faith by the board of directors of the Company, whose determination shall
be conclusive absent manifest error, shall be used.
(d) No adjustment in the Conversion Price shall be required if
such adjustment is less than $.05; provided, however, that any adjustments which
by reason of this Section 7(d) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 6 shall be made to the nearest cent or to the nearest
one-thousandth of a share, as the case may be.
(e) In any case in which this Section 7 shall require that an
adjustment in the Conversion Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event issuing to the holder of any Note exercised after such record date the
shares of Common Stock, if any, issuable upon such exercise over and above the
shares of Common Stock, if any, issuable upon such exercise on the basis of the
Conversion Price in effect prior to such adjustment, provided, however, that the
Company shall deliver to such holder a due bill or other appropriate instrument
evidencing such holder's right to receive such additional shares of Common Stock
upon the occurrence of the event requiring such adjustment.
(f) Upon such adjustment of the Conversion Price as a result
of the calculations made in Sections 6(a) or (b), each Note outstanding prior to
the making of the adjustment in the Conversion Price shall thereafter evidence
the right to purchase, at the adjusted Conversion Price, that number of
Registrable Stock (calculated to the nearest thousandth) obtained by dividing
(A) the product obtained by multiplying the number of Registrable Stock
purchasable upon exercise of a Note prior to adjustment of the number of shares
of Common Stock by the Conversion Price in effect prior to adjustment of the
Conversion Price by (B) the Conversion Price in effect after such adjustment of
the Conversion Price.
(g) In case of any capital reorganization of the Company, or
of any reclassification of the Common Stock (other than a reclassification of
the Common Stock referred to in Section 7 (a), or in the case of the
consolidation of the Company with or the merger of the Company into any other
corporation or of the sale, transfer, or lease of the properties and assets of
the Company as, or
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<PAGE>
substantially as, an entirety to any other corporation or other entity, each
Note shall after such capital reorganization, reclassification of Common Stock,
consolidation, merger, sale, transfer, or lease, be exercisable, on the terms
and conditions specified in this Note, for the number of shares of Common Stock
or other securities, assets or cash to which a holder of the number of shares of
Common Stock purchasable (at the time of such capital reorganization,
reclassification of Common Stock, consolidation, merger, sale, transfer, or
lease) upon exercise of such Note would have been entitled upon such capital
reorganization, reclassification of Common Stock, consolidation, merger, sale,
transfer, or lease; and in any such case, if necessary, the provisions set forth
in this Section 7 with respect to the rights and interests thereafter of the
holders of the Note shall be appropriately adjusted so as to be applicable, as
nearly as may reasonably be, to any shares of stock, other securities, assets,
or cash thereafter deliverable on the exercise of the Note. The subdivision or
combination of shares of Common Stock at any time outstanding into a greater or
lesser number of shares shall not be deemed to be a reclassification of the
Common stock for the purposes of this subsection. The Company shall not effect
any such consolidation, merger, transfer, or lease, unless prior to or
simultaneously with the consummation thereof, the successor corporation (if
other than the Company) resulting from such consolidation or merger or the
Corporation purchasing, receiving, or leasing such assets or other appropriate
corporation or entity shall expressly assume, by written instrument in form
satisfactory to the Holder and duly executed and delivered to the Holder, the
obligation to deliver to the Holder such shares of stock, securities, or assets
as, in accordance with the foregoing provisions, such Holder may be entitled to
purchase and to perform the other obligations of the Company under this Note.
8. The Company hereby expressly waives demand and presentment for
payment, notice of nonpayment, protest, notice of protest, notice of dishonor,
notice of acceleration or intent to accelerate, bringing of suit and diligence
in taking any action to collect amounts called for hereunder and shall be
directly and primarily liable for the payment of all sums owing and to be owing
hereon, regardless of and without any notice, diligence, act or omission as or
with respect to the collection of any amount called for hereunder.
9. The Company agrees to pay all costs and expenses, including
reasonable attorneys' fees, which may be incurred by the Holder in collecting
any amount due under this Note, or to enforce its rights and remedies against
the Collateral or under the Security Agreement of even date.
10. The Company covenants and agrees that:
(a) Preservation of Corporate existence and franchises. The
Company shall preserve and keep in full force and effect its corporate existence
and all franchises, rights and privileges necessary to the proper conduct of its
business, including, without limitation, all necessary franchises, patents,
licenses, trademarks, trademark rights, trade name rights, fictitious name
authorizations or certificates and copyrights without any unlawful conflict with
such franchises, patents, licenses, trademarks, trademark rights, fictitious
name authorizations or certificates and copyrights of others. It shall also
maintain the existence of Laminaire as a separate subsidiary.
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<PAGE>
(b) Amendments. The Company shall promptly deliver to the
Holder copies of any amendments or modifications to its certificate of
incorporation or bylaws, certified with respect to the certificate of
incorporation by the Secretary of State of Delaware, and, with respect to the
bylaws, by the secretary of the Company.
(c) Compliance with Laws. The Company shall comply with all
applicable laws, ordinances, rules and regulations of any Federal, state or
local government or any instrumentality or agency thereof now or hereafter in
effect, the failure of which to comply may have a material adverse effect on the
Company, the collateral, or the Holder in enforcing its rights hereunder against
the Company or the Collateral.
(d) Taxes. The Company shall pay and discharge, as they become
due, all taxes, assessments, debts, claims and other governmental or
non-governmental charges lawfully imposed upon it or incurred by it or its
properties and assets, except taxes, assessment, claim or charge. The Company
shall provide to the Holder, upon the Holder's request, evidence or payment of
such taxes, assessments, debts, claims and charges satisfactory to the Holder.
(e) Maintenance of Property. The Company shall maintain,
preserve and keep all its properties, equipment and assets in good repair,
working order and condition, and make, or cause to be made, all necessary or
appropriate repairs, renewals, replacements, substitutions, additions,
betterments and improvements thereto so that efficiency of all such properties
and assets shall at all times be properly preserved and maintained.
(f) Insurance. The Company shall maintain, or cause to be
maintained, such insurance on its properties and assets, including, without
limitation, the Collateral, with responsible insurance companies against such.
The Company shall also maintain, or cause to be maintained, adequate general
liability insurance and worker's compensation insurance. The Company shall
deliver to the Holder, upon its reasonable request, a detailed list of insurance
then in effect, stating the names of the insurance companies and the amounts and
rates of the insurance. All insurances shall be on a replacement cost basis.
(g) No Other Liens. The Company shall not directly or
indirectly permit to exist any Lien on the Collateral except for the Lien in
favor of the Holder, the existing liens against Company's accounts receivable
and proceeds therefrom to secure indebtedness in the principal amount of $50,000
in favor of A.T. Investments Ltd. and against accounts receivable, inventory and
equipment and proceeds therefrom to secure indebtedness in the aggregate
principal amount of $500,000 in favor of Norwood Venture Corp.
(h) Litigation Notice. The Company shall promptly notify the
Holder of any litigation, legal actions, proceedings, claims or investigations
pending or threatened against the Company and/or of the entry of any judgment
against the Company or the entry of any Lien, other than the Lien in favor of
the Holder against any of the Collateral.
9
<PAGE>
(i) Location of Collateral and Records. The Company shall keep
the Collateral, its records relating to the Collateral and its other books,
journals, records, orders, receipts and correspondence at 960 East Hazelwood
Avenue, Rahway, New Jersey 06065 or 528 Oritan Avenue, Ridgefield, New Jersey
06656 unless notice is given to the Holder at least thirty (30) days in advance
of the removal of the Collateral, and the books, records, journals, orders,
receipts and correspondence, to another location.
(j) Financial Statements. The Company shall deliver, or cause
to be delivered, to the Holder the following:
(i) Within forty-five (45) days after the end of each
of the first three quarterly fiscal periods of each fiscal
year a copy of its Form 10-QSB as filed with the Securities
and Exchange Commission (the "SEC");
(ii) Within ninety (90) days after the end of each
fiscal year of the Company, a copy of its Annual Report filed
on Form 10-KSB as filed with the SEC;
(iii) Within fifteen (15) days of the end of each
quarterly fiscal period an aging schedule of Laminaire
receivables.
(k) Books and Records. The Company shall, at all times and in
conformity with generally accepted accounting principles, consistently applied,
keep complete and accurate and separate books and records concerning its
business, affairs and operations and concerning its properties and assets,
including, without limitation, the Collateral, and those of Laminaire.
(l) Default Notice. The Company shall immediately notify the
Holder of the occurrence of any Default or Event of Default accompanied by a
certificate of the Company specifying the nature and period of existence
thereof. If the Company receives a notice of a default from any creditor other
than the Holder. The Company shall deliver to the Holder a copy of such notice
of default immediately upon receipt thereof.
(m) Compliance with Agreement. The Company shall observe,
perform and comply with, and shall continue, until all obligations of the
Company to the Holder under this Note, are fully paid and satisfied, to observe,
perform and comply with, all of the terms, agreements, and covenants contained
in this Note.
11. The Company shall not without the Holder's prior written consent:
(a) Borrowings. Create, incur or assume any liability for
borrowed money, the payment of which is senior to the obligations of the Holder,
except for liabilities heretofore or hereinafter incurred by the Company to the
Holder.
10
<PAGE>
(b) Contingent Liabilities. Assume, guarantee, endorse or
otherwise become liable, in connection with the obligations of any person
except:
(i) Liabilities of the Company resulting from product warranties made by
the Company in the ordinary course of its business; and
(ii) Liabilities of the Company resulting from its
endorsement of items or instruments for deposit or collection
in the ordinary course of its business.
(c) Sale or Other Disposition of Assets. Sell, lease, abandon,
or otherwise dispose of its properties or assets, except for the selling,
leasing or otherwise disposing of its properties or assets to a person or entity
in the ordinary course of its business in commercially reasonable and bona fide
arm's length transactions for fair consideration.
(d) Dividends and Redemption. Declare or pay any cash dividend
or distribution on any shares of stock of the Company.
(e) Loans to Other Persons. Make any new loans or advances to
any of its officers or directors in excess an amount of $25,000 to any one
individual or an aggregate of $100,000 or make any loans or advances to any
other parties other than the Laminaire Corporation.
(f) Lien. Create, assume or suffer to exist any lien on any of
its properties or assets whether now owned or hereafter acquired, except any
lien in favor of the Holder or otherwise permitted herein.
(g) Assignment of Accounts. Create, assume or suffer to exist
any assignment of accounts receivable.
(h) Maximum Debt to Stockholder Equity. Cause, suffer or
permit the Company's ratio of Debt to Stockholder Equity (as each term is
hereinafter defined) to be more than 2.5 to 1.00. The term "Stockholder Equity"
shall mean as of the time of any determination thereof, Net Worth of the Company
plus all subordinated indebtedness, if any, all as determined by the Company in
accordance with generally accepted accounting principles, consistently applied.
The term "Debt" shall mean total liabilities of the Company minus all
subordinated debt, if any (which debt must be subordinated to the Company's
obligations under this Note) but shall not give effect to debt incurred in
connection with financing the acquisition of Laminaire, all as determined by the
Company in accordance with generally accepted accounting principles,
consistently applied.
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<PAGE>
(i) Minimum Debt Service Coverage. Cause, suffer or permit
Debt Service Coverage Ratio (as hereinafter defined) at any time to be less than
1.25 to 1.00. "Debt Service Coverage Ratio" due under this Note shall mean
pre-tax income of the Company plus depreciation, other non-cash charges, and
amortization of purchase adjustments divided by current portion of Debt due
under this Note for the applicable period (except the balloon payment due in the
final year of the note), in conformity with generally acceptable accounting
principles, consistently applied.
(j) Intercompany Transfers. The Company shall not remove or
withdraw any cash or assets from Laminaire in excess of its own investment
therein, except that it shall be permitted to allocate a reasonable portion of
joint costs and expenses. For this purpose, investment shall be defined as (i)
cash provided to Laminaire by the Company subsequent to the acquisition of
Laminaire by the Company; and (ii) cash required to repay this Note and any
promissory notes executed in connection with the acquisition of Laminaire.
The financial covenants set forth in paragraphs (h) and (i) shall be
determined on an annual basis commencing with the results for the fiscal quarter
ended September 30, 1998.
12. Each of the following shall be an Event of Default after the
expiration of any cure period, if any, set forth herein, or under the Security
Agreement.
(a) the nonpayment when due of any amount payable under this
Note within 5 days after its due date, or the failure to duly observe any
covenant, condition or agreement with respect to the payment of monies other
than principal or interest within 15 days after notice to the Company; or the
failure to perform any non-monetary covenant or condition within 30 days after
notice to the Company;
(b) the Company has failed to observe or perform any promise
or comply with any covenant or condition hereunder, subject to the cure periods
set forth in (a);
(c) if any representation, warranty, certificate, financial
statement or other information made or given by the Company to the Holder is
materially incorrect or misleading;
(d) the entry of any judgment or the issuance of any
attachment, tax lien, levy or garnishment in excess of $100,000 against any
property of material value in which the Company has an interest which remains
unsatisfied for 15 days;
(e) the dissolution, merger or consolidation of the Company,
to the sale or transfer of any substantial portion of the Company's assets, or
if any agreement for such action is entered into by the Company without the
written consent of the Holder;
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<PAGE>
(f) the Company shall fail to remit promptly when due to the
appropriate government agency or authorized depository any amount collected or
withheld from any employee for payroll taxes, social security and similar
required payroll deduction.
(g) the Company shall (1) become insolvent for a period of 30
days, (2) admit in writing its inability to pay its debts generally as they
mature; (3) make an assignment for the benefit of creditors; or (4) apply for or
consent to the appointment of a trustee, liquidator or receiver for its or for a
substantial part of its property or business, or
(h) a trustee, liquidator or receiver shall be appointed for
the Company or for a substantial part of its property or business without its
consent and shall not be discharged within sixty (60) days after such
appointment; or
(i) Any governmental agency or any court of competent
jurisdiction at the instance of any governmental agency shall assume custody or
control of the whole or any substantial portion of the properties or assets of
the Company and shall not be dismissed within sixty (60) days thereafter; or
(j) Bankruptcy, reorganization, insolvency or liquidation
proceedings or other proceedings for relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by or against the Company and, if
instituted against the Company, shall not be dismissed within sixty (60) days
after such instruction of the Company shall by any action or answer approve of,
consent to, or acquiesce in any such proceedings or admit the material
allegations of, or default in answering a petition filed in any such proceeding.
Upon the happening of an Event of Default, the entire unpaid
balance of this Note and all accrued interest shall be immediately due and
payable without notice to the Company, and the Holder may, immediately or at any
time thereafter, exercise any or all of its rights and remedies hereunder, or
under any agreement or otherwise under applicable law against the Company and
any and all Collateral. The Holder may exercise its rights and remedies in any
order and may, at its option, delay in or refrain from exercising some of all of
its rights and remedies without prejudice.
13. This Note represents a general obligation of the Company. No
recourse shall be had for the payment of the principal of, or the interest on,
this Note, or for any claim based hereon, or otherwise in respect hereof,
against any incorporator, shareholder, officer or director, as such, past,
present or future, of the Company or any successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issue hereof, expressly waived
and released.
14. The Holder of this Note, by acceptance hereof, agrees that this
Note is being acquired for investment and that such Holder will not offer, sell
or otherwise dispose of this Note or the shares of Common Stock issuable upon
exercise thereof except under circumstances which will not result
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<PAGE>
in a violation of the Securities Act or any applicable state Blue Sky law or
similar laws relating to the sale of securities.
15. In case any provision of this Note is held by a court of
competent jurisdiction to be excessive in scope or otherwise invalid or
unenforceable, such provision shall be adjusted rather than voided, if possible,
so that it is enforceable to the maximum extent possible, and the validity and
enforceability of the remaining provisions of this Note will not in any way be
affected or impaired thereby.
16. This Note and the agreements referred to in this Note constitute
the full and entire understanding and agreement between the Company and the
Holder with respect to the subject hereof. Neither this Note nor any term hereof
may be amended, waived, discharged or terminated other than by a written
instrument signed by the Company and the Holder.
17. This Note shall be governed by and construed in accordance with
the laws of New Jersey.
18. All notices required or permitted under this Note shall be in
writing and shall be effective upon the earlier of receipt or three (3) business
days after deposit in the United States mail, postage prepaid, registered or
certified, return receipt requested, and addressed to the address of the party
as stated in the first paragraph of this Note or to such address as a party
provides to the other by notice.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by an officer thereunto duly authorized.
Dated:October 16, 1997
THERMO-MIZER ENVIRONMENTAL
CORP.
By: Jon Darcy
Title: President
14
<PAGE>
EXHIBIT I
NOTICE OF CONVERSION
(To be Executed by the Registered Holder in order to Convert the Note)
The undersigned hereby irrevocably elects to convert $_____________
of the above Note into shares of Common Stock of Thermo-Mizer Environmental
Corp. (the "Company") according to the conditions set forth in such Note. The
original Note and Notice of Conversion must be received by the Company in order
to effectuate conversion.
Signature
[Name]
Address:
thermomi\\laminairre\note110.13
<PAGE>
EXHIBIT 10.21 PROMISSORY NOTE DATED OCTOBER 16, 1997 EXECUTED BY THE COMPANY IN
FAVOR OF GARAY LLC
<PAGE>
EXHIBIT 10.21
US $
THERMO-MIZER ENVIRONMENTAL CORP.
15% NOTE DUE MARCH 31, 1998
FOR VALUE RECEIVED, the Thermo-Mizer Environmental Corp., a corporation
duly organized and existing under the laws of Delaware (the "Company") promises
to pay to the order of Garay LLC, the registered holder hereof and its
successors and assigns (the "Holder"), the Principal (as hereinafter defined),
and all accrued and unpaid interest thereon, on March 31, 1998 (the "Maturity
Date"). Interest on the principal sum outstanding shall be paid at the rate of
fifteen percent (15%) per annum.
The Principal shall be defined as the difference between (i) the
Stockholders' Equity of Laminaire Corporation as of the end of the month before
the date of this Note minus the Stockholders' Equity of Laminaire Corporation as
of September 30, 1996, and (ii) $200,000. The term "Stockholders' Equity" shall
have the meaning defined in the Purchase Agreement between the Company and the
Holder dated as of October 9, 1997. The Company and the Holder shall calculate
and agree as to the Stockholders' Equity of Laminaire Corporation and the
Principal no later than December 31, 1997. In the event that the Company and the
Holder cannot agree as to the amounts of Stockholders' Equity and Principal as
of December 31, 1997, the parties agree to submit the dispute to arbitration
before a single arbitrator chosen by the Company and the Holder, which
arbitrator shall be a certified public accountant from a "Big 6" accounting firm
other than Deloitte and Touche and that the decision of such arbitrator shall be
final and binding upon the parties.
Accrual of interest shall commence on the date hereof and shall continue each
day until payment in full of the outstanding principal sum has been made or duly
provided for. The interest so payable will be paid to the Holder, at the address
last designated in writing by the Holder hereof from time to time. Accrued
interest shall also be payable when the entire principal balance of this Note
becomes due and payable (whether by demand, stated maturity or acceleration),
or, if earlier, when such principal balance is actually paid.
In the event of default, the interest rate shall be increased to 20% as of the
date of default, and such interest shall accrue on the unpaid balance hereof
until the entire balance has been paid in full, notwithstanding the entry of any
judgment against the Company.
This Note is secured by a Security Agreement of even date.
Interest shall be calculated on the basis of a 360 day year and shall be charged
for the actual number of days elapsed. Interest shall be invoiced for any
payment received after the due date and computed on a daily basis.
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<PAGE>
This Note is subject to the following additional provisions:
1. The Note may be prepaid by the Company for the total amount of the
then outstanding balance of the Note, plus all accrued interest thereon, at the
option of the Company at any time without penalty. Any partial prepayment shall
be applied against the outstanding principal and shall not postpone the due date
of any subsequent payments..
2. Prior to due presentment for transfer of this Note, the Company and
any agent of the Company may treat the person in whose name this Note is duly
registered on the Company's books and records as the owner hereof for the
purpose of receiving payment as herein provided and for all other purposes,
whether or not this Note be overdue.
3. No provision of this Note shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the principal of, and
interest on, this Note at the time, place, and rate, and in the coin currency,
herein prescribed.
4. The obligations of the Company hereunder are secured by the
collateral (the "Collateral") and on the terms as set forth in that certain
security agreement dated as of the date hereof by and among the Company and the
Holder (the "Security Agreement").
5. The Company hereby expressly waives demand and presentment for
payment, notice of nonpayment, protest, notice of protest, notice of dishonor,
notice of acceleration or intent to accelerate, bringing of suit and diligence
in taking any action to collect amounts called for hereunder and shall be
directly and primarily liable for the payment of all sums owing and to be owing
hereon, regardless of and without any notice, diligence, act or omission as or
with respect to the collection of any amount called for hereunder.
6. The Company agrees to pay all costs and expenses, including
reasonable attorneys' fees, which may be incurred by the Holder in collecting
any amount due under this Note or to enforce its rights and remedies against the
Collateral or under the Security Agreement of even date.
7. The Company covenants and agrees that:
(a) Preservation of Corporate existence and franchises. The
Company shall preserve and keep in full force and effect its corporate existence
and all franchises, rights and privileges necessary to the proper conduct of its
business, including, without limitation, all necessary franchises, patents,
licenses, trademarks, trademark rights, trade name rights, fictitious name
authorizations or certificates and copyrights without any unlawful conflict with
such franchises, patents, licenses, trademarks, trademark rights, fictitious
name authorizations or certificates and copyrights of others. It shall also
maintain the existence of Laminaire as a separate subsidiary.
2
<PAGE>
(b) Amendments. The Company shall promptly deliver to the
Holder copies of any amendments or modifications to its certificate of
incorporation or bylaws, certified with respect to the certificate of
incorporation by the Secretary of State of Delaware, and, with respect to the
bylaws, by the secretary of the Company.
(c) Compliance with Laws. The Company shall comply with all
applicable laws, ordinances, rules and regulations of any Federal, state or
local government or any instrumentality or agency thereof now or hereafter in
effect, the failure of which to comply may have a material adverse effect on the
Company, the collateral, or the Holder in enforcing its rights hereunder against
the Company or the Collateral.
(d) Taxes. The Company shall pay and discharge, as they become
due, all taxes, assessments, debts, claims and other governmental or
non-governmental charges lawfully imposed upon it or incurred by it or its
properties and assets, except taxes, assessment, claim or charge. The Company
shall provide to the Holder, upon the Holder's request, evidence or payment of
such taxes, assessments, debts, claims and charges satisfactory to the Holder.
(e) Maintenance of Property. The Company shall maintain,
preserve and keep all its properties, equipment and assets in good repair,
working order and condition, and make, or cause to be made, all necessary or
appropriate repairs, renewals, replacements, substitutions, additions,
betterments and improvements thereto so that efficiency of all such properties
and assets shall at all times be properly preserved and maintained.
(f) Insurance. The Company shall maintain, or cause to be
maintained, such insurance on its properties and assets, including, without
limitation, the Collateral, with responsible insurance companies against such.
The Company shall also maintain, or cause to be maintained, adequate general
liability insurance and worker's compensation insurance. The Company shall
deliver to the Holder, upon its reasonable request, a detailed list of insurance
then in effect, stating the names of the insurance companies and the amounts and
rates of the insurance. All insurances shall be on a replacement cost basis.
(g) No Other Liens. The Company shall not directly or
indirectly permit to exist any Lien on the Collateral except for the Lien in
favor of the Holder, the existing liens against Company's accounts receivable
and proceeds therefrom to secure indebtedness in the principal amount of $50,000
in favor of A.T. Investments Ltd. and against accounts receivable, inventory and
equipment and proceeds therefrom to secure indebtedness in the aggregate
principal amount of $500,000 in favor of Norwood Venture Corp.
(h) Litigation Notice. The Company shall promptly notify the
Holder of any litigation, legal actions, proceedings, claims or investigations
pending or threatened against the Company and/or of the entry of any judgment
against the Company or the entry of any Lien, other than the Lien in favor of
the Holder against any of the Collateral.
3
<PAGE>
(i) Location of Collateral and Records. The Company shall keep
the Collateral, its records relating to the Collateral and its other books,
journals, records, orders, receipts and correspondence at 960 East Hazelwood
Avenue, Rahway, New Jersey 06065 or 528 Oritan Avenue, Ridgefield, New Jersey
06656 unless notice is given to the Holder at least thirty (30) days in advance
of the removal of the Collateral, and the books, records, journals, orders,
receipts and correspondence, to another location.
(j) Financial Statements. The Company shall deliver, or cause
to be delivered, to the Holder the following:
(i) Within forty-five (45) days after the end of each
of the first three quarterly fiscal periods of each fiscal
year a copy of its Form 10-QSB as filed with the Securities
and Exchange Commission (the "SEC");
(ii) Within ninety (90) days after the end of each
fiscal year of the Company, a copy of its Annual Report filed
on Form 10-KSB as filed with the SEC;
(iii) Within fifteen (15) days of the end of each
quarterly fiscal period an aging schedule of Laminaire
receivables.
(k) Books and Records. The Company shall, at all times and in
conformity with generally accepted accounting principles, consistently applied,
keep complete and accurate and separate books and records concerning its
business, affairs and operations and concerning its properties and assets,
including, without limitation, the Collateral, and those of Laminaire.
(l) Default Notice. The Company shall immediately notify the
Holder of the occurrence of any Default or Event of Default accompanied by a
certificate of the Company specifying the nature and period of existence
thereof. If the Company receives a notice of a default from any creditor other
than the Holder. The Company shall deliver to the Holder a copy of such notice
of default immediately upon receipt thereof.
(m) Compliance with Agreement. The Company shall observe,
perform and comply with, and shall continue, until all obligations of the
Company to the Holder under this Note, are fully paid and satisfied, to observe,
perform and comply with, all of the terms, agreements, and covenants contained
in this Note.
8. The Company shall not without the Holder's prior written consent:
(a) Borrowings. Create, incur or assume any liability for
borrowed money, the payment of which is senior to the obligations of the Holder,
except for liabilities heretofore or hereinafter incurred by the Company to the
Holder.
4
<PAGE>
(b) Contingent Liabilities. Assume, guarantee, endorse or
otherwise become liable, in connection with the obligations of any person
except:
(i) Liabilities of the Company resulting from product warranties made by
the Company in the ordinary course of its business; and
(ii) Liabilities of the Company resulting from its
endorsement of items or instruments for deposit or collection
in the ordinary course of its business.
(c) Sale or Other Disposition of Assets. Sell, lease, abandon,
or otherwise dispose of its properties or assets, except for the selling,
leasing or otherwise disposing of its properties or assets to a person or entity
in the ordinary course of its business in commercially reasonable and bona fide
arm's length transactions for fair consideration.
(d) Dividends and Redemption. Declare or pay any cash dividend
or distribution on any shares of stock of the Company.
(e) Loans to Other Persons. Make any new loans or advances to
any of its officers or directors in excess an amount of $25,000 to any one
individual or an aggregate of $100,000 or any loans or advances to other parties
other than Laminaire.
(f) Lien. Create, assume or suffer to exist any lien on any of
its properties or assets whether now owned or hereafter acquired, except any
lien in favor of the Holder or otherwise permitted herein.
(g) Assignment of Accounts. Create, assume or suffer to exist
any assignment of accounts receivable.
(h) Intercompany Transfers. The Company shall not remove or
withdraw any cash or assets from Laminaire in excess of its own investment
therein, except that it shall be permitted to allocate a reasonable portion of
joint costs and expenses. For this purpose, investment shall be defined as (i)
cash provided to Laminaire by the Company subsequent to the acquisition of
Laminaire by the Company; and (ii) cash required to repay this Note and any
promissory notes executed in connection with the acquisition of Laminaire.
9. Each of the following shall be an Event of Default after the
expiration of any cure period, if any, set forth herein, or in the Security
Agreement.
(a) the nonpayment when due of any amount payable under this
Note within 5 days after its due date, or the failure to duly observe any
covenant, condition or agreement with respect to the payment of monies other
than principal or interest within 15 days after notice to the
5
<PAGE>
Company; or the failure to perform any non-monetary covenant or condition within
30 days after notice to the Company;
(b) the Company has failed to observe or perform any promise
or comply with any covenant or condition hereunder, subject to the cure periods
set forth in (a);
(c) if any representation, warranty, certificate, financial
statement or other information made or given by the Company to the Holder is
materially incorrect or misleading;
(d) the entry of any judgment or the issuance of any
attachment, tax lien, levy or garnishment in excess of $100,000 against any
property of material value in which the Company has an interest which remains
unsatisfied for 15 days;
(e) the dissolution, merger or consolidation of the Company,
to the sale or transfer of any substantial portion of the Company's assets, or
if any agreement for such action is entered into by the Company without the
written consent of the Holer;
(f) the Company shall fail to remit promptly when due to the
appropriate government agency or authorized depository any amount collected or
withheld from any employee for payroll taxes, social security and similar
required payroll deduction.
(g) the Company shall (1) become insolvent for a period of 30
days, (2) admit in writing its inability to pay its debts generally as they
mature; (3) make an assignment for the benefit of creditors; or (4) apply for or
consent to the appointment of a trustee, liquidator or receiver for its or for a
substantial part of its property or business, or
(h) a trustee, liquidator or receiver shall be appointed for
the Company or for a substantial part of its property or business without its
consent and shall not be discharged within sixty (60) days after such
appointment; or
(i) Any governmental agency or any court of competent
jurisdiction at the instance of any governmental agency shall assume custody or
control of the whole or any substantial portion of the properties or assets of
the Company and shall not be dismissed within sixty (60) days thereafter; or
(j) Bankruptcy, reorganization, insolvency or liquidation
proceedings or other proceedings for relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by or against the Company and, if
instituted against the Company, shall not be dismissed within sixty (60) days
after such instruction of the Company shall by any action or answer approve of,
consent to, or acquiesce in any such proceedings or admit the material
allegations of, or default in answering a petition filed in any such proceeding.
6
<PAGE>
Upon the happening of an Event of Default, the entire unpaid
balance of this Note and all accrued interest shall be immediately due and
payable without notice to the Company, and the Holder may, immediately or at any
time thereafter, exercise any or all of its rights and remedies hereunder, or
under any agreement or otherwise under applicable law against the Company and
any and all Collateral. The Holder may exercise its rights and remedies in any
order and may, at its option, delay in or refrain from exercising some of all of
its rights and remedies without prejudice.
10. This Note represents a general obligation of the Company. No
recourse shall be had for the payment of the principal of, or the interest on,
this Note, or for any claim based hereon, or otherwise in respect hereof,
against any incorporator, shareholder, officer or director, as such, past,
present or future, of the Company or any successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issue hereof, expressly waived
and released.
11. The Holder of this Note, by acceptance hereof, agrees that this
Note is being acquired for investment and that such Holder will not offer, sell
or otherwise dispose of this Note or the shares of Common Stock issuable upon
exercise thereof except under circumstances which will not result in a violation
of the Securities Act or any applicable state Blue Sky law or similar laws
relating to the sale of securities.
12. In case any provision of this Note is held by a court of competent
jurisdiction to be excessive in scope or otherwise invalid or unenforceable,
such provision shall be adjusted rather than voided, if possible, so that it is
enforceable to the maximum extent possible, and the validity and enforceability
of the remaining provisions of this Note will not in any way be affected or
impaired thereby.
13. This Note and the agreements referred to in this Note constitute
the full and entire understanding and agreement between the Company and the
Holder with respect to the subject hereof. Neither this Note nor any term hereof
may be amended, waived, discharged or terminated other than by a written
instrument signed by the Company and the Holder.
14. This Note shall be governed by and construed in accordance with the
laws of New Jersey.
15. All notices required or permitted under this Note shall be in
writing and shall be effective upon the earlier of receipt or three (3) business
days after deposit in the United States mail, postage prepaid, registered or
certified, return receipt requested, and addressed to the address of the party
as stated in the first paragraph of this Note or to such address as a party
provides to the other by notice.
7
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by an officer thereunto duly authorized.
Dated:
THERMO-MIZER ENVIRONMENTAL CORP.
By: /s/Jon J. Darcy
Title:
thermomi\\laminairre\note210.13
<PAGE>
EXHIBIT 10.22 PROMISSORY NOTE IN PRINCIPAL AMOUNT OF $90,479 DATED OCTOBER 16,
1997 EXECUTED BY COMPANY IN FAVOR OF CHARLES GARAY
<PAGE>
EXHIBIT 10.22
US $90,479.27
THERMO-MIZER ENVIRONMENTAL CORP.
15% NOTE DUE FEBRUARY 13, 1998
FOR VALUE RECEIVED, the Thermo-Mizer Environmental Corp., a corporation
duly organized and existing under the laws of Delaware (the "Company") promises
to pay to the order of Charles J. Garay, the registered holder hereof and its
successors and assigns (the "Holder"), the principal sum of Ninety Thousand Four
Hundred Seventy Nine Dollars and Twenty-Seven Cents (US $90,479.27) on February
13, 1998 (120 days from the date hereof) (the "Maturity Date"), and to pay
interest on the principal sum outstanding at the rate of fifteen percent (15%)
per annum.
Accrual of interest shall commence on the date hereof and shall continue each
day until payment in full of the outstanding principal sum has been made or duly
provided for. The interest so payable will be paid to the Holder, at the address
last designated in writing by the Holder hereof from time to time. Accrued
interest shall also be payable when the entire principal balance of this Note
becomes due and payable (whether by demand, stated maturity or acceleration),
or, if earlier, when such principal balance is actually paid.
In the event of default, the interest rate shall be increased to 20% as of the
date of default, and such interest shall accrue on the unpaid balance hereof
until the entire balance has been paid in full, notwithstanding the entry of any
judgment against the Company.
This Note is secured by a Security Agreement of even date.
Interest shall be calculated on the basis of a 360 day year and shall be charged
for the actual number of days elapsed. Interest shall be invoiced for any
payment received after the due date and computed on a daily basis.
This Note is subject to the following additional provisions:
1. The Note may be prepaid by the Company for the total amount of the
then outstanding balance of the Note, plus all accrued interest thereon, at the
option of the Company at any time without penalty. Any partial prepayment shall
be applied against the outstanding principal and shall not postpone the due date
of any subsequent payments.
The Maturity Date may be extended at the discretion of the
Company for one additional 120 day period upon the payment to the Holder of
$10,000 no later than the Maturity Date being extended.
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<PAGE>
2. Prior to due presentment for transfer of this Note, the Company and
any agent of the Company may treat the person in whose name this Note is duly
registered on the Company's books and records as the owner hereof for the
purpose of receiving payment as herein provided and for all other purposes,
whether or not this Note be overdue.
3. No provision of this Note shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the principal of, and
interest on, this Note at the time, place, and rate, and in the coin currency,
herein prescribed.
4. The Company hereby expressly waives demand and presentment for
payment, notice of nonpayment, protest, notice of protest, notice of dishonor,
notice of acceleration or intent to accelerate, bringing of suit and diligence
in taking any action to collect amounts called for hereunder and shall be
directly and primarily liable for the payment of all sums owing and to be owing
hereon, regardless of and without any notice, diligence, act or omission as or
with respect to the collection of any amount called for hereunder.
5. The Company agrees to pay all costs and expenses, including
reasonable attorneys' fees, which may be incurred by the Holder in collecting
any amount due under this Note or to enforce its rights and remedies against the
Collateral or under the Security Agreement of even date.
6. The Company covenants and agrees that:
(a) Preservation of Corporate existence and franchises. The
Company shall preserve and keep in full force and effect its corporate existence
and all franchises, rights and privileges necessary to the proper conduct of its
business, including, without limitation, all necessary franchises, patents,
licenses, trademarks, trademark rights, trade name rights, fictitious name
authorizations or certificates and copyrights without any unlawful conflict with
such franchises, patents, licenses, trademarks, trademark rights, fictitious
name authorizations or certificates and copyrights of others. It shall also
maintain the existence of Laminaire as a separate subsidiary.
(b) Amendments. The Company shall promptly deliver to the
Holder copies of any amendments or modifications to its certificate of
incorporation or bylaws, certified with respect to the certificate of
incorporation by the Secretary of State of Delaware, and, with respect to the
bylaws, by the secretary of the Company.
(c) Compliance with Laws. The Company shall comply with all
applicable laws, ordinances, rules and regulations of any Federal, state or
local government or any instrumentality or agency thereof now or hereafter in
effect, the failure of which to comply may have a material adverse effect on the
Company, the collateral, or the Holder in enforcing its rights hereunder against
the Company or the Collateral.
(d) Taxes. The Company shall pay and discharge, as they become
due, all taxes, assessments, debts, claims and other governmental or
non-governmental charges lawfully imposed
2
<PAGE>
upon it or incurred by it or its properties and assets, except taxes,
assessment, claim or charge. The Company shall provide to the Holder, upon the
Holder's request, evidence or payment of such taxes, assessments, debts, claims
and charges satisfactory to the Holder.
(e) Maintenance of Property. The Company shall maintain,
preserve and keep all its properties, equipment and assets in good repair,
working order and condition, and make, or cause to be made, all necessary or
appropriate repairs, renewals, replacements, substitutions, additions,
betterments and improvements thereto so that efficiency of all such properties
and assets shall at all times be properly preserved and maintained.
(f) Insurance. The Company shall maintain, or cause to be
maintained, such insurance on its properties and assets, including, without
limitation, the Collateral, with responsible insurance companies against such.
The Company shall also maintain, or cause to be maintained, adequate general
liability insurance and worker's compensation insurance. The Company shall
deliver to the Holder, upon its reasonable request, a detailed list of insurance
then in effect, stating the names of the insurance companies and the amounts and
rates of the insurance. All insurances shall be on a replacement cost basis.
(g) No Other Liens. The Company shall not directly or
indirectly permit to exist any Lien on the Collateral except for the Lien in
favor of the Holder, the existing liens against Company's accounts receivable
and proceeds therefrom to secure indebtedness in the principal amount of $50,000
in favor of A.T. Investments Ltd. and against accounts receivable, inventory and
equipment and proceeds therefrom to secure indebtedness in the aggregate
principal amount of $500,000 in favor of Norwood Venture Corp
(h) Litigation Notice. The Company shall promptly notify the
Holder of any litigation, legal actions, proceedings, claims or investigations
pending or threatened against the Company and/or of the entry of any judgment
against the Company or the entry of any Lien, other than the Lien in favor of
the Holder against any of the Collateral.
(i) Location of Collateral and Records. The Company shall keep
the Collateral, its records relating to the Collateral and its other books,
journals, records, orders, receipts and correspondence at 960 East Hazelwood
Avenue, Rahway, New Jersey 06065 or 528 Oritan Avenue, Ridgefield, New Jersey
06656 unless notice is given to the Holder at least thirty (30) days in advance
of the removal of the Collateral, and the books, records, journals, orders,
receipts and correspondence, to another location.
(j) Financial Statements. The Company shall deliver, or cause
to be delivered, to the Holder the following:
(i) Within forty-five (45) days after the end of each
of the first three quarterly fiscal periods of each fiscal
year a copy of its Form 10-QSB as filed with the Securities
and Exchange Commission (the "SEC");
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<PAGE>
(ii) Within ninety (90) days after the end of each
fiscal year of the Company, a copy of its Annual Report filed
on Form 10-KSB as filed with the SEC;
(iii) Within fifteen (15) days of the end of each
quarterly fiscal period an aging schedule of Laminaire
receivables.
(k) Books and Records. The Company shall, at all times and in
conformity with generally accepted accounting principles, consistently applied,
keep complete and accurate and separate books and records concerning its
business, affairs and operations and concerning its properties and assets,
including, without limitation, the Collateral, and those of Laminaire.
(l) Default Notice. The Company shall immediately notify the
Holder of the occurrence of any Default or Event of Default accompanied by a
certificate of the Company specifying the nature and period of existence
thereof. If the Company receives a notice of a default from any creditor other
than the Holder. The Company shall deliver to the Holder a copy of such notice
of default immediately upon receipt thereof.
(m) Compliance with Agreement. The Company shall observe,
perform and comply with, and shall continue, until all obligations of the
Company to the Holder under this Note, are fully paid and satisfied, to observe,
perform and comply with, all of the terms, agreements, and covenants contained
in this Note.
7. The Company shall not without the Holder's prior written consent:
(a) Borrowings. Create, incur or assume any liability for
borrowed money, the payment of which is senior to the obligations of the Holder,
except for liabilities heretofore or hereinafter incurred by the Company to the
Holder.
(b) Contingent Liabilities. Assume, guarantee, endorse or
otherwise become liable, in connection with the obligations of any person
except:
(i) Liabilities of the Company resulting from product warranties made by
the Company in the ordinary course of its business; and
(ii) Liabilities of the Company resulting from its
endorsement of items or instruments for deposit or collection
in the ordinary course of its business.
(c) Sale or Other Disposition of Assets. Sell, lease, abandon,
or otherwise dispose of its properties or assets, except for the selling,
leasing or otherwise disposing of its properties or assets to a person or entity
in the ordinary course of its business in commercially reasonable and bona fide
arm's length transactions for fair consideration.
4
<PAGE>
(d) Dividends and Redemption. Declare or pay any cash dividend
or distribution on any shares of stock of the Company.
(e) Loans to Other Persons. Make any new loans or advances to
any of its officers or directors in excess an amount of $25,000 to any one
individual or an aggregate of $100,000 or any loans or advances to other parties
other than Laminaire.
(f) Lien. Create, assume or suffer to exist any lien on any of
its properties or assets whether now owned or hereafter acquired, except any
lien in favor of the Holder or otherwise permitted herein.
(g) Assignment of Accounts. Create, assume or suffer to exist
any assignment of accounts receivable.
(h) Intercompany Transfers. The Company shall not remove or
withdraw any cash or assets from Laminaire in excess of its own investment
therein, except that it shall be permitted to allocate a reasonable portion of
joint costs and expenses. For this purpose, investment shall be defined as (i)
cash provided to Laminaire by the Company subsequent to the acquisition of
Laminaire by the Company; and (ii) cash required to repay this Note and any
promissory notes executed in connection with the acquisition of Laminaire.
8. Each of the following shall be an Event of Default after the
expiration of any cure period, if any, set forth herein, or in the Security
Agreement.
(a) the nonpayment when due of any amount payable under this
Note within 5 days after its due date, or the failure to duly observe any
covenant, condition or agreement with respect to the payment of monies other
than principal or interest within 15 days after notice to the Company; or the
failure to perform any non-monetary covenant or condition within 30 days after
notice to the Company;
(b) the Company has failed to observe or perform any promise
or comply with any covenant or condition hereunder, subject to the cure periods
set forth in (a);
(c) if any representation, warranty, certificate, financial
statement or other information made or given by the Company to the Holder is
materially incorrect or misleading;
(d) the entry of any judgment or the issuance of any
attachment, tax lien, levy or garnishment in excess of $100,000 against any
property of material value in which the Company has an interest which remains
unsatisfied for 15 days;
(e) the dissolution, merger or consolidation of the Company,
to the sale or transfer of any substantial portion of the Company's assets, or
if any agreement for such action is entered into by the Company without the
written consent of the Holer;
5
<PAGE>
(f) the Company shall fail to remit promptly when due to the
appropriate government agency or authorized depository any amount collected or
withheld from any employee for payroll taxes, social security and similar
required payroll deduction.
(g) the Company shall (1) become insolvent for a period of 30
days, (2) admit in writing its inability to pay its debts generally as they
mature; (3) make an assignment for the benefit of creditors; or (4) apply for or
consent to the appointment of a trustee, liquidator or receiver for its or for a
substantial part of its property or business, or
(h) a trustee, liquidator or receiver shall be appointed for
the Company or for a substantial part of its property or business without its
consent and shall not be discharged within sixty (60) days after such
appointment; or
(i) Any governmental agency or any court of competent
jurisdiction at the instance of any governmental agency shall assume custody or
control of the whole or any substantial portion of the properties or assets of
the Company and shall not be dismissed within sixty (60) days thereafter; or
(j) Bankruptcy, reorganization, insolvency or liquidation
proceedings or other proceedings for relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by or against the Company and, if
instituted against the Company, shall not be dismissed within sixty (60) days
after such instruction of the Company shall by any action or answer approve of,
consent to, or acquiesce in any such proceedings or admit the material
allegations of, or default in answering a petition filed in any such proceeding.
Upon the happening of an Event of Default, the entire unpaid
balance of this Note and all accrued interest shall be immediately due and
payable without notice to the Company, and the Holder may, immediately or at any
time thereafter, exercise any or all of its rights and remedies hereunder, or
under any agreement or otherwise under applicable law against the Company and
any and all Collateral. The Holder may exercise its rights and remedies in any
order and may, at its option, delay in or refrain from exercising some of all of
its rights and remedies without prejudice.
9. This Note represents a general unsecured obligation of the Company.
No recourse shall be had for the payment of the principal of, or the interest
on, this Note, or for any claim based hereon, or otherwise in respect hereof,
against any incorporator, shareholder, officer or director, as such, past,
present or future, of the Company or any successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issue hereof, expressly waived
and released.
10. The Holder of this Note, by acceptance hereof, agrees that this
Note is being acquired for investment and that such Holder will not offer, sell
or otherwise dispose of this Note or the shares of Common Stock issuable upon
exercise thereof except under circumstances which will not result
6
<PAGE>
in a violation of the Securities Act or any applicable state Blue Sky law or
similar laws relating to the sale of securities.
11. In case any provision of this Note is held by a court of competent
jurisdiction to be excessive in scope or otherwise invalid or unenforceable,
such provision shall be adjusted rather than voided, if possible, so that it is
enforceable to the maximum extent possible, and the validity and enforceability
of the remaining provisions of this Note will not in any way be affected or
impaired thereby.
12. This Note and the agreements referred to in this Note constitute
the full and entire understanding and agreement between the Company and the
Holder with respect to the subject hereof. Neither this Note nor any term hereof
may be amended, waived, discharged or terminated other than by a written
instrument signed by the Company and the Holder.
13. This Note shall be governed by and construed in accordance with the
laws of New Jersey.
14. All notices required or permitted under this Note shall be in
writing and shall be effective upon the earlier of receipt or three (3) business
days after deposit in the United States mail, postage prepaid, registered or
certified, return receipt requested, and addressed to the address of the party
as stated in the first paragraph of this Note or to such address as a party
provides to the other by notice.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by an officer thereunto duly authorized.
Dated:
THERMO-MIZER ENVIRONMENTAL
CORP.
By: /s/Jon J. Darcy
Title:
thermomi\\laminairre\note410.13
7
<PAGE>
EXHIBIT 10.23 GUARANTY EXECUTED BY LAMINAIRE CORPORATION OF OCTOBER 16, 1997
<PAGE>
<PAGE>
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT (the "Guaranty") is made as of the
____ day of October, 1997, by and between Laminaire Corporation, a New Jersey
corporation ("Guarantor"), and Garay, LLC, a New Jersey limited liability
company ("Garay").
A. Guarantor is the owner of a business located at and a
parcel of land commonly known as 960 East Hazelwood Avenue, Rahway, Union
County, New Jersey (the "Property"),
B. Guarantor has agreed to unconditionally guarantee the
payment and all performance obligations of the Thermo-Mizer Corp.
("Thermo-Mizer) under those certain Notes and Security Agreement (the
"Obligations") dated as of October ____, 1997;
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Guarantor and Garay
hereby agree as follows:
1. Guarantee. Guarantor hereby irrevocably and unconditionally
guarantees the full payment when due and performance of the Obligations, and
agrees to indemnify Garay and hold it harmless from and against all cost and
expense, damage and loss, including reasonable attorneys' fees, incurred by it
by reason of a breach by Thermo-Mizer of the Obligations and/or a breach by
Guarantor of its obligations hereunder.
2. Satisfaction of Obligations. Upon the full satisfaction of the
Obligations, this Guaranty shall become null and void and of no further force or
effect.
3. No Waiver. Guarantor unconditionally consents to, and waives as a
defense to liability hereunder, each of the following:
(a) any release, waiver, inaction, delay or lack of diligence by
Garay in enforcing its rights against any obligor or in any
property or collateral, or the unenforceability of any such
rights, including any failure to perfect, protect, preserve or
foreclose or collect on any lien or security interest which
may be intended, directly or indirectly, to secure any of the
Obligations, and the absence of notice thereof to Guarantor;
(b) the absence of any notice of the incurrence or existence of
any additional obligation undertaken by Thermo-Mizer and of
any default thereon;
(c) any action or failure of action and the absence of notice
thereof to Guarantor, taken or not taken by Garay with respect
to any of the Obligations, including any release,
subordination, or substitution of any collateral or release,
termination, compromise, modification, extension or amendment
of any instrument executed by or applicable to any Obligor or
of any claim, right or remedy against any Obligor or property;
(d) any impairment of Guarantor's right to reimbursement by way of
subrogation, indemnification or contribution;
(e) any other action or inaction taken or omitted by Garay in its
sole discretion with respect to the Obligations or the
collateral;
(f) the absence or inadequacy of any formalities of every kind in
connection with enforcement of the Obligations, including
presentment, demand, notice and protest;
(g) the waiver of any rights of Garay under or any action taken or
omitted by Garay with respect to any other guaranty of the
Obligations;
1
<PAGE>
and no amendment, substitution, modification or extension or
release of the Obligations shall constitute a release or
waiver by Garay of the obligations of Guarantor under this
Guaranty. This is a continuing and unconditional guaranty and
shall remain in full force and effect and be binding upon
Guarantor until the Obligations are fully satisfied.
4. The Guarantor agrees to pay all costs and expenses, including
reasonable attorneys' fees, which may be incurred by Garay collecting any amount
due under this Guarantee or to enforce its rights and remedies under the
accompanying mortgage and Security Agreement.
5. The Guarantor covenants and agrees that:
(a) Preservation of Corporate existence and franchises. The Guarantor shall
preserve and keep in full force and effect its corporate existence and all
franchises, rights and privileges necessary to the proper conduct of its
business, including, without limitation, all necessary franchises, patents,
licenses, trademarks, trademark rights, trade name rights, fictitious name
authorizations or certificates and copyrights without any unlawful conflict with
such franchises, patents, licenses, trademarks, trademark rights, fictitious
name authorizations or certificates and copyright of others. It shall also
maintain the existence of Laminaire as a separate subsidiary.
(b) Amendments. The Guarantor shall promptly deliver to Garay copy
of any amendments or modifications or modifications to its
certificate of incorporation bylaws, certified with respect to
the certificate of or incorporation by the Secretary of State
of Delaware, and, with respect to the bylaws, by the Secretary
of the Guarantor.
(c) Compliance with Laws. The Guarantor shall comply with all the
applicable laws,ordinances,rules and regulation of any
Federal, state or local government or any instrumentality or
agency thereof now or hereafter in effect, the failure of
which to comply may have a material adverse effect on the
Guarantor, the collateral, or Garay in enforcing its rights
hereunder against the Company or the Collateral.
(d) Taxes. The Company shall pay and discharge, as they become
due, all taxes, assessments, debts, claims and other
governmental or non-governmental charges lawfully imposed upon
it or incurred by it or its properties and assets, except
taxes, assessments, debts, claims and charges, contested in
good faith in appropriate proceedings for which the Guarantor
shall have set aside adequate reserves for the payment of such
tax, assessment, claim or charge. The Guarantor shall provide
to Garay, upon Garay's request, evidence or payment of such
taxes, assessments, debts, claims and charges satisfactory to
Garay.
(e) Maintenance of Property. The Guarantor shall maintain,
preserve and keep all its properties, equipment and assets in
good repair, working order and condition, and make, or cause
to be made, all necessary or appropriate repairs, renewals,
replacements, substitutions, additions, betterments and
improvements thereto so that efficiency of all such properties
and assets shall at all times be properly preserved and
maintained.
(f) Insurance. The Guarantor shall maintain, or cause to be maintained,
such insurance on its properties and assets, including, without limitation, the
Collateral, with responsible insurance companies against such casualties and in
such amounts as is from time to time reasonably required by Garay, who shall be
named loss payee therein.. The insurance policies shall be on a full replacement
cost basis of the fair market value of the collateral. The Guarantor shall also
maintain, or cause to be maintained, adequate general liability insurance and
workers compensation insurance. The Guarantor shall deliver to Garay, upon its
reasonable request, a detailed list of insurance then in effect, stating the
names of the insurance companies and the amounts and rates of the insurance. 2
<PAGE>
(g) No Other Liens. The Guarantor shall not directly or indirectly
permit to exist any Lien on the Collateral except for the Lien
in favor of Garay, and except that the Mortgagor may grant a
security interest in its accounts, inventory, equipment, and
the proceeds therefrom to Norwood Venture Corp., which
security interest shall be subject and subordinate to the
security interest of Garay.
(h) Litigation Notice. The Company shall promptly notify Garay of
any litigation legal actions, proceedings, claims or
investigations pending or threatened against the Company and/
or of the entry of any judgement against the Company or the
entry of any Lien, other than the Lien in favor of Garay
against any of the Collateral.
(i) Location of Collateral and Records. The Guarantor shall keep
the Collateral, its record relating to the Collateral and its
other books, journals, records, orders, receipts and
correspondence at 960 east Hazelwood Avenue, Rahway, New
Jersey 06065 or 528 Oritan Avenue, Ridgefield, New Jersey
06656 unless notice is given to Garay at least thirty (30)
days in advance of the removal of the Collateral, and the
books, records, journals, orders, receipts and correspondence,
to another location.
(j) Financial Statements. The Guarantor shall deliver, or cause to
be delivered to Garay the following:
(i) Within 45 days after the end of each
quarter, corporate financial statements
showing cash flows, income, expenses,
assets, and liabilities.
(ii) Within 90 days after receipt, audited year
end financial statements per GAAP.
(k) Books and Records. The Guarantor shall, at all times and
in conformity with generally accepted accounting principles,
consistently applied, keep complete and accurate and separate
books and records concerning its business, affairs,
operations, properties and assets.
(l) Default Notice. The Guarantor shall immediately notify
Garay of the occurrence of any default or Event of Default
accompanied by a certificate of the Guarantor specifying the
nature and period of existence thereof. If the Guarantor
receives a notice of a Default from any creditor other than
Garay. The Guarantor shall deliver to Garay a copy of such
notice of default immediately upon receipt thereof.
(m) Compliance with Agreement. The Guarantor shall observe,
perform and comply with, and shall continue, until all
obligations of the Guarantor to Garay under this Guarantee,
are fully paid and satisfied, to observe, perform and comply
with, all of the terms, agreements, and covenants contained in
this Guarantee and the Mortgage and Security Agreement of even
date.
(n) Inspection. Guarantor shall permit Garay or his authorized
representative to inspect the books and records of the
Guarantor and the Collateral on reasonable notice to the
Guarantor.
(o) Loss or damage to Collateral. Guarantor shall immediately
notify Garay of any material loss or damage to the collateral.
6. The Guarantor shall not without Garay's prior written consent:
(a) Borrowings: Create, incur or assume any liability for borrowed
money, the payment of which is senior to the obligations of
Garay, except for liabilities heretofore or hereinafter
incurred by
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the Guarantor to Garay.
(b) Contingent Liabilities. Assume, guarantee, endorse or
otherwise become liable in connection with the obligations
of any person except
(i) Liabilities of the Guarantor resulting from product
warranties made by the Company in the ordinary course
of its business; and
(ii) Liabilities of the Guarantor resulting from its
endorsement of items or instruments for deposit or collection in the
ordinary course of its business.
(c) Sale or Other Disposition of Assets. Sell, lease, abandon, or
otherwise dispose of its properties or assets, except for the
selling, leasing or otherwise disposing of its properties or
assets to a person or entity in the ordinary course of its
business in commercially reasonable and bona fide arm's length
transactions for a full and fair consideration.
(d) Dividends and Redemption. Declare or pay any cash dividend or
distribution on any shares of stock of the Guarantor.
(e) Loans to Other Persons. Make any loans or advances to any of
its officers or directors or shareholders, or to any other
person, firm or Corporation.
(f) Lien Create, assume or suffer to exist any lien on any of its
properties or assets whether now owned of hereafter acquired,
except any lien in favor of Garay or otherwise permitted
herein, and except that the Mortgagor may grant a security
interest in its accounts, inventory, equipment, and the
proceeds therefrom to Norwood Venture Corp., which security
interest shall be subject and subordinate to the security
interest of Garay.
(g) Assignment of Accounts. Create, assume or suffer to exist any
assignment of accounts receivable or grant any security
interest therein, and except that the Mortgagor may grant a
security interest in its accounts, and the proceeds therefrom
to Norwood Venture Corp., which security interest shall be
subject and subordinate to the security interest of Garay.
(h) Maximum Debt to Stockholder Equity. Cause, suffer or permit
the Guarantor's ratio of Debt to Stockholder Equity ( as each
term is hereinafter defined) to be more than 2.50 to 1.00. The
term "Stockholder Equity" shall mean as of the time of any
determination thereof, the Net Worth ( without any deduction
for debt incurred in connection with financing the acquisition
of Laminaire or the repayment of bank indebtedness previously
incurred by Laminaire regarding its real property) of the
Guarantor, as determined in accordance with GAAP.
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The term "Debt" shall mean total liabilities of the Guarantor
as determined in accordance with GAAP.
(i) Minimum Debt Service Coverage. Cause, suffer or permit Debt
Service Coverage Ratio (as hereinafter defined) at any time to
be less than 1.25 to 1.00. "Debt Service Coverage Ratio" shall
mean pre-tax income of the Guarantor plus depreciation, other
non-cash charges, and amortization of purchase adjustments
divided by the current portion of Debt due under this
Guarantee for the applicable period (except the balloon
payment due in the final year of the Note for $2,200.000), in
conformity with generally acceptable accounting principles,
consistently applied.
The financial covenants set forth in paragraph (h) and (I) above shall be
determined on an annual basis commencing with the results for the fiscal year
ended June 30, 1998.
(j) Intercompany Transfers. Thermo-Mizer shall not remove or
withdraw any cash or assets from Laminaire in excess of its"
investment" therein. For this purpose," investment" shall be
defined as (I) cash provided to Laminaire by the Guarantor
subsequent to the acquisition of Laminaire stock by
Thermo-Mizer and (ii) cash required to repay any promissory
notes executed in connection with the acquisition of Laminaire
stock.
(k) Change of Ownership. Permit or cause a change in the ownership of
the presently issued and outstanding capital stock of the
Guarantor.
7. If one or more of the following described "Events of Default" shall
occur:
(a) The Guarantor shall default in the payment of principal or
interest on the Notes and such failure shall continue uncured
for a period of five (5) days; or
(b) The Guarantor shall fail to perform or observe, in any
material respect, any other covenant, term, provision,
condition, agreement or obligation of the Guarantor under the
Notes, Mortgage and Security Agreement and this Guarantee, and
such failure shall continue uncured for a period of thirty
(30) days ; or
(c) The Guarantor shall (1) admit in writing its inability to pay
its debts generally as they mature; (2) make an assignment for
the benefit of creditors or commence proceedings for its
dissolution; or (3)apply for or consent to the appointment of
a trustee, liquidator or receiver for its or for a substantial
part of its property or business, or
(d) A trustee, liquidator or receiver shall be appointed for the
Guarantor or for a substantial part of its property or
business without its consent and shall not be discharged
within sixty (60) days after such appointment; or
(e) Any governmental agency or any court of competent jurisdiction
at the instance of any governmental agency shall assume
custody or control of the whole or any substantial portion of
the properties or assets of the Guarantor shall not be
dismissed within sixty (60) days thereafter; or
(f) Bankruptcy, reorganization, insolvency or liquidation
proceedings or other proceedings for relief under any
bankruptcy law or any law for the relief of debtors shall be
instituted by or against the Guarantor and, if instituted
against the Guarantor, shall not be dismissed within sixty
(60) days after such instruction of the Guarantor shall be any
action or answer approve of, consent to, or acquiesce in any
such proceedings or admit the material allegations of, or
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default in answering a petition filed in any such proceeding.
Then, or at any time thereafter, and in each and every such case,
unless such Event of Default shall have been waived in writing by Garay (which
waiver shall not be deemed to be a waiver of any subsequent default) at the
option of Garay and in Garay's sole discretion, Garay may consider this Guaranty
in breach and default,
without presentment, demand, protest or notice of any kind, all of which are
hereby expressly waived, anything herein or in any note or other instruments
contained to the contrary notwithstanding, and Garay may immediately, and
without expiration of any period of grace, enforce any and all of Garay's rights
and remedies provided herein or any other rights or remedies afforded by law or
by the Notes and Mortgage and Security Agreement of even date.
8. Miscellaneous. This Guaranty (i) will bind and inure to the benefit
of the parties hereto and their respective heirs, successors and assigns; (ii)
represents the entire agreement between the parties hereto with respect to the
subject matter hereof, and supersedes all prior and contemporaneous agreements
and understanding,inducements or conditions, express or implied, oral or
written; (iii) may be amended only in writing, executed by the party against
whom enforcement is sought; (iv) may be executed in one or more counterparts,
each of which shall be deemed an original, but which together shall constitute
one and the same instrument; and (v) shall be governed by, and construed in
accordance with, the laws of the State of New Jersey.
IN WITNESS WHEREOF, the parties hereto have executed this
Guaranty the day and year first above written.
ATTEST: LAMINAIRE CORPORATION
_________________________ By:______________________
Secretary Pres.
[Corporate Seal] GARAY, L.L.C.
By:_____________________
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EXHIBIT 10.24 MORTGAGE AND SECURITY AGREEMENT EXECUTED BY LAMINAIRE
CORPORATION
<PAGE>
MORTGAGE AND SECURITY AGREEMENT
THIS MORTGAGE made this 16th day of October,1997, between LAMINAIRE
CORPORATION, A New Jersey Corporation, with offices at 960 East Hazelwood
Avenue, Rahway, NJ 07065 (herein called the "Debtor" or "Mortgagor") and GARAY,
LLC, a New Jersey Limited Liability Company, with offices at 480 Stalevicz Lane,
Rahway, NJ 07065 (herein called the "Creditor" or "Mortgagee")
W I T N E S S E T H:
WHEREAS, the Mortgagor has guaranteed an indebtedness to the Mortgagee
in the principal amounts with interest thereon at the rates and upon the terms
and conditions and due and payable at the times more particularly set forth in
three (3) Promissory Notes of even date herewith from the Thermo-Mizer
Environmental Corporation to the Mortgagee herein as Payee (the "Notes"); and
WHEREAS, the Mortgagor is the owner in fee simple of a certain tract or
parcel of real property and improvements thereon located in the City of Rahway,
County of Union, and State of New Jersey;
NOW, THEREFORE, for the better securing of the payment of the moneys
owing on said Notes and all extensions and renewals thereof and substitution
therefor, including other payments mentioned therefor for the protection of the
security as well as to the Mortgagor with interest thereon as may from time to
time be agreed upon, the Mortgagor has granted, bargained, sold and conveyed and
by these presents does grant, bargain, sell and convey to the Mortgagee and to
its successors and assigns, ALL the following tract or parcel of land and
premises located in the City of Rahway, County of Union, and State of New
Jersey, as more particularly described in Schedule A attached hereto and made a
part hereof (hereinafter referred to as the "Mortgaged Premises").
This is a first mortgage.
TOGETHER with:
A. All and singular any tenements, hereditament, and appurtenances
thereunto belonging, or in anywise appertaining, and the reversion or
reversions, remainder and remainders; and also all the estate, right, title,
interest, property, possession, claim and demand whatsoever, in Law as well as
in Equity, of the Mortgagor, of, in and to the same and every part and parcel
thereof, with appurtenances; including all fixtures presently affixed to the
same, and also all equipment and improvements now in, upon, or which may
hereafter be installed or placed in or upon the same, adapted to or necessary
for the complete and comfortable use, enjoyment or occupancy thereof;
B. All right, title and interest of the Mortgagor in and to the land
lying in the streets and roads in front of and adjoining the Premises; and
C. All awards heretofore and hereafter made to the Mortgagor for taking
by eminent domain the whole or any part of the Premises or any easement therein,
including any awards for changes of grade of streets, which said awards are
hereby assigned to the Mortgagee, who is hereby authorized to collect and
receive the proceeds of such awards and to give proper receipts and acquittances
therefore, and to apply the same toward the payment of the Mortgage Debt,
notwithstanding the fact that the amount owing thereon may not then be due and
payable; and the Mortgagor hereby agrees upon request, to make, execute and
deliver any and all assignments and other instruments sufficient for the purpose
of assigning said awards to the Mortgagee, free, clear and discharged of any
encumbrances of any kind or nature whatsoever.
TO HAVE AND TO HOLD, the above granted and described Mortgaged Premises,
with the
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appurtenances, fixtures, equipment and improvements, unto the Mortgagee,
its successors and assigns, to its and their proper use and benefit forever;
PROVIDED ALWAYS, and these premises are upon the express condition,
that if the Mortgagor shall well and truly pay to the Mortgagee all money
secured hereby when the same shall become due and payable, without deduction or
credit for any amount payable for taxes, then these presents and the estate
hereby granted shall cease, terminate and be void.
THE MORTGAGOR REPRESENTS, WARRANTS, COVENANTS AND AGREES WITH THE
MORTGAGEE AS FOLLOWS:
1. The Mortgagor shall comply with all provisions hereof and of the
Notes evidencing the indebtedness secured hereby, and the Guaranty Agreement
,(which Notes and Guaranty Agreement are made a part hereof as if recited at
length herein).
2. The Mortgagor shall pay to the Mortgagee said sum of money as
mentioned above and interest thereon and additions thereof, as expressed herein
and expressed in the conditions of the Notes and the Guaranty Agreement.
3. If required by the Mortgagor, in order to more fully protect the
security of the within Mortgage and to insure the payment of real estate taxes,
water rents, sewer rents, insurance premiums the Mortgagor agrees to pay to the
Mortgagee a sum equal to 1/12th of the annual real estate taxes, water rates,
sewer rents, assessments, fire insurance with extended coverage on a replacement
basis, on the first day of each and every month together with the monthly
principal and interest payments due hereunder. The Mortgagor shall also pay to
the Mortgagee such additional amounts as may be determined by the Mortgagee from
time to time in order to provide the Mortgagee with a fund at least 30 days
prior to the due date for the payment or deposit required to be made with any
prior mortgagee, of the next installment of such taxes, water rents, sewer
rents, assessments, insurance premiums and interest and amortization on prior
mortgage(s), sufficient to pay said installment. If on a date 30 days prior to
the due date for the payment of any such items there shall be insufficient funds
on hand with the Mortgagee to pay the same, Mortgagor shall forthwith make a
deposit sufficient to permit the payment of each to be made in full when due. It
is the intention of the parties that the Mortgagor shall deposit with the
Mortgagee the necessary funds so that the Mortgagee at all times during the term
of this mortgage and any extension thereof have on hand sufficient deposits
covering the various items for the respective accrued periods pertaining to each
of them so that the deposits of one shall not be used for the payment of another
except however that the Mortgagee, at its option, may use the deposits of one
for the payment of another and any resulting deficiencies shall forthwith be
paid by the Mortgagor. The said funds shall bear no interest. Upon an assignment
of said mortgage, the Mortgagee shall have the right to pay over the balance of
such deposits in its possession to the assignee and the Mortgagee shall
thereupon be compleely released from all liability with respect to such deposits
and the Mortgagor or owner of the premises shall look solely to the assignee or
transferee in reference thereto. This provision shall apply to every transfer of
such deposits to a new assignee. Upon full payment of the mortgage indebtedness
or at any time prior at the election of Garay of said mortgage, the balance of
the deposits in its possession shall be paid over to the record owner of the
premises and no other party shall have any right or claim thereto in any event.
Mortgagor agrees, at Mortgagee's request to make the aforesaid deposits with the
Mortgagee's servicing agent;
However, it is understood and agreed that Garay shall only request
direct payment to it of the foregoing items if the Mortgagor shall have failed
to make timely payment and any default in payment remains uncured for a period
of 15 days after the payment was due.
4. The Mortgagor is seized of an indefeasible estate in fee simple in
the Mortgaged Premises, and the Mortgagor warrants title to the Mortgaged
Premises.
5. The Mortgagor shall keep any buildings and other structures to be
erected upon the Mortgaged
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Premises, including fixtures and equipment, insured against loss or damage by
fire, and with extended coverage, by insurers having a Bests Rating of A+ or
greater and in the face amount of not less than the full replacement value, with
loss payable to the Mortgagee as first mortgagee and co-insured under a N.J.
mortgage insurance clause, and shall deliver said policy or policies to the
Mortgagee; and in default thereof, the Mortgagee may effect such insurance. The
Mortgagor hereby assigns to the Mortgagee all rights to demand and receive all
money payable under any of said policies of insurance, or certificates of
insurance with respect to public liability insurance, and the rights to settle
or compromise all claims thereunder; and all money received may be applied on
account of the indebtedness secured hereby or used to repair or replace the
buildings on the Mortgaged Premises, as the Mortgagee shall elect; provided
however, that the Mortgagee's consent to the use of the proceeds to repair or
replace damaged buildings or structures shall not be unreasonably withheld. The
Mortgagee shall consent to the use of the insurance proceeds to restore or
repair any damage if the restoration or repair is economically feasible and
Mortgagee's security is not lessened. If the restoration or repair is not
economically feasible or Mortgagee's security would be lessened, the insurance
proceeds shall be applied to the sums secured by this Mortgage, whether or not
then due, with any excess to be paid to Mortgagor. In the event of loss or
damage, the Mortgagor shall give immediate notice thereof to the Mortgagee. The
Mortgagee may make proof of loss if not made promptly by the Mortgagor, and each
insurance company concerned is hereby authorized and directed to make payment
for such loss or damage directly to the Mortgagee instead of to the Mortgagor
and the Mortgagee jointly. At least thirty (30) days prior to the expiration of
any such policies the Mortgagor shall furnish evidence satisfactory to the
Mortgagee that the policies have been renewed or replaced or are no longer
required. The fire insurance policies required by this paragraph shall contain
the usual extended coverage endorsement; that in addition thereto the Mortgagor,
immediately after notice and demand, will keep the Premises insured against wr
risk and any other hazard that may reasonably be required by the Mortgagee.
6. In the event the Mortgaged Premises, or any part thereof, shall be
taken and condemned for public purposes by the proper governmental authorities,
the Mortgagor shall have no claim against the award for damages, or be entitled
to any portion of the award until the entire indebtedness secured by this
Mortgage shall be paid in full, and all rights to damages of the Mortgagor are
hereby assigned to the Mortgagee to the extent of the principal indebtedness as
remains unpaid (the Mortgagor, however, having the right to appeal said award to
the courts of competent jurisdiction). The satisfaction of the principal amount
of any portion thereof by virtue of application of any condemnation award upon
exercise of any authority with the right of eminent domain shall constitute a
prepayment to the full extent thereof and the agreement, if any, between the
parties hereto relating to a privilege to the Mortgagor to prepay the
indebtedness secured hereby and providing for premiums to the Mortgagee in
certain events upon prepayment shall be fully applicable in such circumstances.
7. The Mortgagor agrees to comply with all laws, rules, regulations and
ordinances made or promulgated by lawful authority and now or hereafter
applicable to the Mortgaged Premises within such time as required by law.
8. The Mortgagor shall keep and maintain any buildings, other
structures, and improvements on the Mortgaged Premises, including fixtures and
equipment, in good and substantial repair, and will make such repairs as may be
reasonably required within thirty (30) days from written notice from the
Mortgagee. The Mortgagor shall not do, and shall not permit to be done, any act
which may in any way impair or weaken the security under this Mortgage, and the
Mortgagor shall not do anything which shall diminish the value of the
collateral.
9. The Mortgagee may collect a late charge not to exceed ten ($.10)
cents for each dollar on each payment of principal and/or interest more than
five (5) days in arrears, to cover the extra expense involved in handling said
delinquent payments.
10. The Mortgagor shall pay any taxes, assessments, municipal or
governmental rates, charges, impositions, liens and water and sewer rents or any
part thereof, heretofore or hereafter imposed upon or which may become a lien
against the Mortgaged Premises within ten (10) days after the same is due and
payable and shall submit receipt therefor on request.
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11. The Mortgagor hereby unconditionally assigns all rents, issues, and
profits arising out of or from the Mortgaged Premises to the Mortgagee. Upon the
occurrence of a default by the Mortgagor under this Mortgage or under the Notes
or the Guaranty Agreement, then the Mortgagee shall be entitled to enter upon
and take possession of the Mortgaged Premises, and collect and receive all
rents, issues and profits arising from the Mortgaged Premises, including the
rents, issues and profits then due and unpaid to the Mortgagor and also those
thereafter to fall due. No tenant shall be privileged to pay any rent in
advance, and Mortgagor shall not request or accept any rent in advance.
12. Each party shall, upon written request of the other, certify within
seven (7) days to such person as the other may designate, by writing duly
acknowledged, the amount of principal and interest then owing on this Mortgage,
and whether any offsets or defenses exist against the indebtedness by the Note.
13. The Mortgagee may, at its option, expend money for insurance,
payment of taxes, assessments, municipal or governmental rates, charges,
impositions, liens and water and sewer rents or any part thereof and for repair,
maintenance and preservation of the Mortgaged Premises, or for any buildings or
other structures thereon, including fixtures, or for the discharge of any liens
or encumbrances on the Mortgaged Premises, or for perfecting the title thereto,
or for enforcing collection of the indebtedness secured thereby, or for any
water, gas or electric charge imposed for any services rendered to the Mortgaged
Premises, or for the protecting or preserving any use being made of the
Mortgaged Premises, or for advances of any trustee or receiver of the Mortgaged
Premises, or for any additions or improvements to the Mortgaged Premises, or to
any buildings or other structures thereon, including fixtures, considered
desirable by the Mortgagee while it or any receiver or trustee is in possession
thereof; and all money so paid, with interest of the rate fixed in the Notes
plus 5%, shall be a lien on the Mortgaged Premises and added to the amount of
the Notes and secured by this Mortgage and shall be due and payable upon demand.
Mortgagee shall also be entitled to collect all advances made to protect its
interests hereunder after any foreclosure judgment or foreclosure sale.
14. No owner of the Mortgaged Premises shall be entitled to any credit
by reason of payment of any tax thereon.
15. This Mortgage also constitutes a security agreement under the
Uniform Commercial Code as adopted by the New Jersey Statutes and, except as
otherwise provided herein, the Mortgagor's title and interest in and to all
present and future tangible assets, including without limitation, goods,
chattels, fixtures, furniture, machinery, equipment, inventory and property of
Mortgagor used in and necessary to the operation of the business and building(s)
and structure(s), including, without limitation, all carpets, furniture,
furnishings, screens, curtains, awnings, windowshades, all lighting, heating,
ventilating, air-conditioning, sprinkling, plumbing, gas, water, power,
incinerating, and laundry systems and fixtures, all engines, machinery, boilers,
ranges, furnaces, elevators and meters, mirrors, refrigerators, refrigeration
plants,
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cabinets, shades, storm and screen windows, doors and appliances, which are now,
located in, on, or upon the Mortgaged Premises herein defined, together with all
additions and accessories thereto, substitutions therefor, and replacements
thereof and all cash and non-cash proceeds thereof.
Also, the Mortgagee is hereby granted a security interest in the Debtor's
present and future inventory and general intangibles, accounts, accounts
receivable, contract rights, chattel paper, instruments and documents, and all
cash and non-cash proceeds thereof and all books and records relating to the
foregoing, together will accessories, substitutions, additions, replacements,
parts and accessions affixed to or used in connection with the collateral. The
Mortgagor shall execute, deliver, file and refile any financing statements,
continuation statements, or other security agreements that the Mortgagee may
require from time to time to confirm the lien of this Mortgage with respect to
such property. Without limiting the foregoing, the Mortgagor hereby irrevocably
appoints the Mortgagee attorney-in-fact for the Mortgagee to execute, deliver
and file such instruments for and on behalf of the Mortgagor. Notwithstanding
the release of any or all of that property included in the Mortgaged Premises
which is deemed "real property," and proceedings to foreclose this Mortgage or
its satisfaction or record, the terms hereof shall survive as a security
agreement with respect to the security interest created hereby and referred to
above until the repayment or satisfaction in full of the obligations of the
Mortgagor as are now or hereafter secured hereby.
16. During the term of the Notes and Guaranty Agreement, in the event
of the passage after the date of any law of the State of New Jersey, or any
other governmental entity imposing any tax in addition to income taxation upon
the profit realized by the Mortgagee from this transaction, whether such
imposition arises from a new law or the change in any existing laws now in force
for the taxation of mortgages, or debts secured thereby, for state or local
purposes, or the manner of the operation of any such law, so as to affect the
interest of the Mortgagee, then and in such event, the Mortgagor shall bear and
pay the full amount of such taxes, provided that if for any reason payment
thereof would constitute usury or render the loan or indebtedness secured hereby
wholly or partially usurious under any of the terms or provisions of the
obligation secured hereunder, or this Mortgage, or otherwise, the Mortgagee may,
at the Mortgagee's option, pay the amount or portion of such taxes as renders
the loan or indebtedness secured thereby unlawful or usurious in which event the
Mortgagor shall concurrently therewith pay the remaining lawful and nonusurious
portion or balance of said taxes. In the event of the passage of any law as
aforesaid which is prospective in nature, then prior to the effective date of
any such law, the Mortgagor shall have the right to prepay the Note for which
this Mortgage serves as security in full and not in part and thereafter
discharge the lien of this Mortgage from the Mortgaged Premises. Nothing herein
shall require the Mortgagor to pay any taxes on income of the Mortgagee except
in the event of the passage of any law as aforesaid when the Mortgagor does not
elect to pay the Note in full prior to its effective date or wherein the
effective date of the law is retroactive.
17. In the event that the mortgaged premises are in violation of any
state, federal or other governmental environmental law or regulation ("Law") as
the result of any condition which occurs after the date hereof, or if the
mortgaged premises are hereafter used for a use which has an SIC classification
that would bring the premises within the jurisdiction of the New Jersey
Industrial Site Recovery Act ("ISRA"), Mortgagor shall, at its own cost and
expense and upon the written request of Mortgagee, provide Mortgagee with a
written environmental law compliance report from an engineering or other
qualified environmental service company approved by Mortgagee. Such report shall
certify that all necessary inspections and tests have been made and that the
mortgaged premises are not in violation of any Law. The report shall be
submitted within 90 days from the date of the request. If the report discloses
any violation of any Law to the extent that any remediation is required or
enforcement action is taken, Mortgagor shall promptly obtain an estimate of the
amount necessary to eliminate the violation and shall deposit in escrow with
Mortgagee an amount equal to 110% of such estimate. Mortgagor shall immediately
commence the elimination of the violation and, if that fails to do so, the
failure shall constitute a default under the terms of this Mortgage, and the
obligation which it secures, and Mortgagee shall have the right but not the
obligation to use the escrow funds to eliminate the violation. Mortgagee agrees
not to request a compliance report more than once in each calendar year, unless
there is a change in the use of the mortgaged premises or an occurrence on the
mortgaged premises or premises adjacent thereto that could cause a violation of
any law.
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18. The Mortgagor agrees that if the Mortgagee expends any funds to
bring the mortgaged premises into compliance with N.J.S. 58:10-23.11 et seq.
(the Spill Compensation & Control Act) or N.J.S. 13:1k-6 et seq. (the Industrial
Site Recovery Act); N.J.S.A 58:10A-1 et set. (the Underground Storage of
Hazardous Substances Act), or any other state of federal environmental law now
or hereafter in effect, or to clear a lien imposed on the mortgaged premises
pursuant to said laws, the total amount of such funds shall be added to the
principal balance of the Note secured by this Mortgage, provided the condition
which causes such expenditure commences after the date hereof. Such added amount
shall bear interest as provided for in the Note.
THE MORTGAGOR SHALL BE IN DEFAULT OF THIS MORTGAGE AND SECURITY
AGREEMENT UPON THE OCCURRENCE OF ANY OF THE FOLLOWING EVENTS:
1. In the event that any covenant, representation or warranty made by
the Mortgagor in this Mortgage, in the Notes, or in the Guaranty Agreement or in
any other writing used in connection herewith, shall prove to be false,
incorrect, or misleading in any substantial and material respect as of the date
when made;
2. In the event that the Mortgagor shall have failed to make any
payment of any installment of principal or interest on the Notes within 5 days
after its due date set forth in the Note;
3. In the event that the Mortgagor shall have failed to duly observe
any covenant, condition or agreement with respect to the payment of monies other
than principal or interest on the part of Mortgagor, to be observed or performed
pursuant to the terms of the Mortgage, the Notes, the Guaranty Agreement , or in
any other loan document, and such default shall have remained uncured for a
period of fifteen (15) days after notice thereof to the Mortgagor by the
Mortgagee;
4. In the event the Mortgagor shall have failed to duly observe or
perform any covenant, condition or agreement on the part of the Mortgagor to be
observed or performed pursuant to the terms of the Mortgage, the Notes, the
Guaranty Agreement, or any other loan document, other than the payment of monies
which shall be governed by paragraphs 2 and 3 above, and such default shall have
remained uncured for a period of thirty (30) days after notice thereof to the
Mortgagor by the Mortgagee;
5. In the event that the Mortgagor shall have applied for or consented
to the appointment of a custodian, receiver, trustee or liquidator of all or a
substantial part of its assets; or shall generally be unable to pay its debts
when due; or shall have admitted in writing its inability to pay its debts as
they mature; or shall have made a general assignment for the benefit of
creditors; or shall have a petition or an answer seeking reorganization or an
arrangement with its creditors or shall have a petition of any insolvency law,
or shall have submitted an answer admitting the material allegations of a
petition in bankruptcy, reorganization or insolvency proceeding, or for an
order, judgment or decree shall have been entered, without the application,
approval or consent of the Mortgagor, by any Court of competent jurisdiction
approving a petition seeking reorganization of the Mortgagor, or appointing a
custodian, receiver, trustee or liquidator of the Mortgagor, or a substantial
part of its assets and such order, judgment or decree shall have continued
unstayed and in effect for any period of sixty (60) consecutive days,; or shall
have failed to remove an involuntary petition in bankruptcy filed against it
within sixty (60) days of the filing thereof; or if any Order for Relief shall
have been entered under the Federal Bankruptcy Code of 1978;
6
<PAGE>
6. In the event of any change in the ownership of the Mortgaged
Premises, or if the Mortgagor is a corporation, the sale or transfer of any part
of the stock of the Mortgagor to anyone not presently a stockholder;
7. In the event that the Mortgagor shall have suffered a lien upon,
encumbered, mortgaged or given a security interest in any of its tangible or
intangible assets, except that the Mortgagor may grant a security interest in
its accounts, inventory, equipment, and the proceeds therefrom to Norwood
Venture Corp., which security interest shall be subject and subordinate to the
security interest of Garay.
8. In the event that proceedings be instituted for the foreclosure or
collection of any mortgage, judgment, or lien prior or subordinate to the lien
of this Mortgage, affecting the Mortgaged Premises;
9. In the event that any insurance company authorized to do business in
the State of New Jersey by the Department of Insurance, shall refuse to insure
said Mortgaged Premises in the form of policy approved by the Mortgagee, for a
sum equal to the full insurable value of the Mortgaged Premises;
10. In the event that the Mortgagor shall have entered into any
secondary financing or shall have consented to the placing of any lien on the
Mortgaged Premises or other Collateral, whether or not such financing or lien is
prior to or subordinate to the lien of the Mortgage or other Collateral, except
that the Mortgagor may grant a security interest in its accounts, inventory,
equipment, and the proceeds therefrom to Norwood Venture Corp., which security
interest shall be subject and subordinate to the security interest of Garay.
11. In the event that the Mortgagor shall have transferred or caused to
have been transferred title to or possession of any interest in the Mortgaged
Premises, or any part thereof, or if the Borrower is a corporation or
partnership, in the event there is a change in the management or controlling
interest in the Mortgagor to any party without the express prior written consent
of the Mortgagee;
12. The failure by Thermo-Mizer Environmental Corp. to obtain the
release of its accounts receivable from the existing security interest within 90
days from the date this Mortgage is executed, but not including a security
interest in accounts receivable and proceeds therefrom held by Norwood Venture
Corp.
13. Any default under any Agreement given for the debt secured by this
Mortgage;
14. The occurrence of any condition or event commencing after the date
hereof which causes the imposition of a lien on the Mortgaged Premises pursuant
to N.J.S. 10-23.11 (the Spill Compensation and Control Act) or the commencement
of any enforcement action for violation of N.J.S. 12:1k-6 et seq. (the
Industrial Site Recovery Act) or any other federal or state environmental law
now or hereafter in effect if not cured within thirty (30) days following such
occurrence, event, commencement of enforcement action, or imposition of lien or
if such event cannot be cured within thirty (30) days, then the commencement of
such cure provided that the same may be accomplished within a reasonable time
thereafter and provided further no imposition of a lien has been imposed upon
the Mortgaged Premises.
SHOULD ANY DEFAULT BE MADE BY THE MORTGAGOR THE MORTGAGEE MAY TAKE ANY
OR ALL OF THE FOLLOWING ACTIONS, AT THE SAME OR AT DIFFERENT TIMES:
1. Declare the entire amount of unpaid principal, accrued and unpaid
interest and other money due under this Mortgage and the Note secured hereby,
immediately due and payable.
7
<PAGE>
2. Subject to any other agreement permitted hereunder, all proceeds
from sale or condemnation or insurance proceeds collected or received by the
Mortgagor shall be accepted and held for the Mortgagee in trust and shall not be
co-mingled with the funds and property of the Mortgagor but shall be promptly
paid over to the Mortgagee. The Mortgagor shall pay to the Mortgagee a
reasonable rental for the Mortgaged Premises occupied by the Mortgagor on the
first day of each and every month in advance, as a tenant from month to month
thereby recognizing the Mortgagee as landlord; and upon default in any such
payment, the Mortgagor shall vacate and surrender possession of the Mortgaged
Premises to the Mortgagee or to any receiver, if one has been appointed, and in
default thereof, the Mortgagor may be dispossessed by the usual summary
proceedings. The Mortgagor agrees that this covenant shall be effective either
with or without any action being brought to foreclose this Mortgage, and with or
without the Mortgagee having applied for a receiver to collect the rents. Any
such tenancy of the Mortgagor shall terminate at the option of the Mortgagee and
in any event, upon the delivery of the deed of any Sheriff or Master following
foreclosure.
3. The Mortgagee may enter upon and take possession of the Mortgaged
Premises and rent the same, either in its name or in the name of the owner of
such property, and receive the rents, issues and profits, thereof, and apply the
same, after the payment of the necessary charges and expenses, including
management commissions, on account of the debt secured hereby, being accountable
only for such rents and profits as are collected by it while in possession.
4. The Mortgagee, at its option, may sue on the Guaranty, the Notes, or
it may foreclose this Mortgage or other Collateral, and upon the filing of a
complaint in Foreclosure, the Mortgagee shall be entitled to the appointment of
a receiver of the rents of the Mortgaged Premises without the necessity of
proving either inadequacy of the security or insolvency of the Mortgagor or of
any person who may be legally or equitably liable to pay money secured hereby,
and the Mortgagor and each such person waive proof and consent to the
appointment of such receiver.
5. In the event of a foreclosure sale of the Mortgaged Premises or
other Collateral, the Mortgaged Premises or other Collateral may, at the option
of the Mortgagee, be sold in one or several parcels.
6. The Mortgagee may apply on account of the unpaid principal and
interest thereon or account of any arrearage of interest thereon, or on account
of any balance due to the Mortgagee after a foreclosure sale of the Mortgaged
Premises whether or not a deficiency action shall have been instituted, any
unexpended moneys still retained by the Mortgagee that were paid by the
Mortgagor to the Mortgagee, for the payment of, or as security for the payment
of taxes, assessments, municipal or governmental rates, charges, impositions,
liens, water or sewer rents, or insurance premiums, if any, or in order to
secure the performance of some act by the Mortgagor.
MISCELLANEOUS
1. The parties to this mortgage may agree to change the interest rate,
due date or such other term or terms of this mortgage or of the obligation
secured by the mortgage and upon any such modification as defined in N.J.S.A.
46:9-8.1, the priority of the lien of the mortgage shall relate back to and
remain as it was at the time of the recording of the mortgage, as if the
modification was originally included in this mortgage or as if the modification
occurred at the time of recording of this mortgage.
2. The rights and remedies herein expressed to be vested in or
conferred upon the Mortgagee shall be cumulative and shall be in addition to and
not in substitution for or in derogation of the rights and remedies conferred by
any applicable law. The failure, at any one or more times, of the Mortgagee to
assert the right to declare the principal indebtedness due or the granting of
any extension or extensions of time of payment of the Note either to the maker
thereof or to any other person, or taking of other or additional security for
the payment thereof, or releasing any security, or changing any of the terms of
the within Mortgage, or the Note, or other obligation accompanying this Mortgage
or waiver of or failure to exercise any right under any covenant or stipulation
herein contained shall not in any way affect this Mortgage nor the rights of the
Mortgagee hereunder nor operate as a release from any personal liability upon
the Note or other obligation
8
<PAGE>
accompanying this Mortgage, nor under any covenant or stipulation therein
contained, nor under any agreement assuming the payment of said Note or
obligation.
3. All notices to be given hereunder shall be given by certified mail
directed to the Mortgagor or to the Mortgagee at the address shown at the head
of this Mortgage.
4. If any action or proceeding be commenced (except an action to
foreclose this Mortgage or to collect the debt secured thereby), to which action
or proceeding the Mortgagee is made a party, or in which it becomes necessary to
defend or uphold the lien of this Mortgage, all sums paid by the Mortgagee for
the expense of any litigation to prosecute or defend the rights and lien created
by this Mortgage, including reasonable counsel fees, shall be added to the
Mortgage Debt and bear interest at the interest rate set forth in the Note, and
any such sum and the interest thereon shall be a lien on the Premises, prior to
any right or title to interest in or claim upon the Premises attaching or
accruing subsequent to the lien of this Mortgage, and shall be deemed to be
secured by this Mortgage. In any action or proceeding to foreclose this
Mortgage, or to recover or collect the Mortgage Debt, the provisions of law
respecting the recovering of costs, disbursements and allowances shall prevail
unaffected by this covenant.
5. All of the terms, covenants, provisions and conditions herein
contained shall be for the benefit of, apply to, and bind the heirs, executors,
administrators, successors, and assigns of the Mortgagor and the Mortgagee, and
are intended and shall be held to be real covenants running with the land, and
the term "Mortgagor" shall also include any and all subsequent owners and
successors in title of the Mortgaged Premises.
6. All references herein to "Note" shall be construed to include the
Guaranty or any other evidence of indebtedness.
7. When such interpretation is appropriate, any word denoting gender
used herein shall include all persons, natural or artificial, and words used in
the singular shall include the plural.
8. This Mortgage, the loan made hereunder and the rights of the parties
shall be governed by and construed under the laws of and by the courts of the
State of New Jersey.
MORTGAGOR ACKNOWLEDGES RECEIPT OF A TRUE COPY HEREOF WITHOUT CHARGE.
IN WITNESS WHEREOF, the Mortgagor has caused this Mortgage to be duly
executed as of the day and year first above written.
LAMINAIRE CORPORATION
---------------------------
PRESIDENT
---------------------------
SECRETARY
9
<PAGE>
<PAGE>
EXHIBIT 10.25 EMPLOYMENT AGREEMENT OF CHARLES J. GARAY DATED OCTOBER 16, 1997
<PAGE>
1
Employment Agreement
THIS AGREEMENT effective the 16th Day of October, 1997, by and between
Laminaire Corporation, a New Jersey corporation with offices at 960 East
Hazelwood Avenue, Rahway, NJ 07065 (the "Corporation") and Charles J. Garay (the
"Employee").
WITNESSETH
WHEREAS, the Corporation, having been organized for the purpose of engaging
in the business of manufacturing, designing, assembling and selling a family of
products used for clean rooms and providing services for electronics assembly,
desires to contract with Employee to devote full time to the business of the
Corporation; and
WHEREAS, Employee, understanding and accepting the conditions of this
employment agreement set forth herein, desires to be so contracted.
NOW, THEREFORE, in consideration of the promises and the mutual covenants
set forth herein, and for other good and valuable consideration, the receipt
whereof is hereby duly acknowledged, the parties hereto covenant and agree as
follows:
1. Employment
Corporation agrees to continue employment and Employee agrees to provide
such services, in the capacity of Advisor to the Corporation, and for such
services for the Corporation as may be determined and assigned to him from time
to time by the Board of Directors. Employee shall devote his entire knowledge
and best skills to the furtherance of the business purposes of the Corporation
as shall be entrusted to him under the general rules from time to time
promulgated by the Corporation through its Board of Directors.
2. Term
Employment Services shall be for a term of thirteen weeks effective as of
October 16, 1997 and terminating on January 2, 1998, unless sooner terminated by
the death or permanent disability of Employee. This Agreement shall be mutually
extended on
<PAGE>
a week by week basis unless terminated by either party.
3. Compensation
Compensation for services rendered to or on behalf of the Corporation shall
be at a rate of $3,846.15 per week, payable through the current weekly payroll
system. All privledges and benefits previous enjoyed are to be continued while
employed.
4. Expenses
The Corporation shall reimburse Employee for all reasonable and necessary
expenses incurred in carrying out his duties under this Agreement. Employee
shall present to the Corporation from time to time an itemized account of such
expenses in any form required by the Corporation. Such expenses shall be subject
to review by the Chief Executive Officer and the Audit Committee of the Board of
Directors.
5. Confidential Matters
All confidential information relating to the Corporation's business shall be
kept confidential by Employee and shall not be disclosed by him except to the
extent necessary for performance of his services and obligations as set forth
herein and in all such instances Employee will take reasonable steps to
safeguard the confidentiality of all such information.
Employee acknowledges his understanding that in the performance of his
duties and obligations hereunder he may obtain knowledge of "confidential
information" as hereinafter defined, relating to the business of the
Corporation. As used herein, "confidential information" means any information
(including, without limitation, any formula, pattern, device, plan, process or
compilation of information) which (i) is, or is designed to be, used in the
business of the Corporation or results from its research or development
activities; (ii) is private or confidential in that it is not generally known or
available to the public; and (iii) gives the Corporation an opportunity to
obtain an advantage over competitors who do not know or use it.
Employee shall not, without the prior written consent of the Corporation,
either during the term of this Agreement or after any termination thereof:
use or disclose any such confidential information outside the Corporation;
publish any writing with respect thereto; or
except in the performance of his duties hereunder, remove or aid in the removal
of any such confidential information or any property or material relating
thereto from the Corporation.
<PAGE>
6. Inventions
Employee shall promptly disclose to the Corporation any and all inventions;
improvements, machines, appliances, processes, products, or the like (all of
which are referred to herein as "inventions") which Employee may invent,
conceive, produce, or reduce to practice, either solely or jointly with others,
at any time, in furtherance or in the performance of his duties as set forth in
this Agreement.
Any and all such inventions which in any way relate to the products
manufactured, sold, or used by the Corporation, or to any methods, processes, or
apparatus used in connection with the production of such goods or materials, or
in either case which are or may be or may become capable of use in the business
of the Corporation, shall at all times and for all purposes be regarded as
acquired and held by Employee in a fiduciary capacity and solely for the benefit
of the Corporation.
With respect to all such inventions, Employee shall:
treat all information with respect thereto as confidential information within
the meaning of and subject to Article 9 of this Agreement;
keep complete and accurate records thereof which records shall be the property
of the Corporation;
execute any application for letters patent of the United States and of any and
all other countries covering such inventions, and give the Corporation, its
attorneys and counsel all reasonable and requested assistance in preparing such
application; any such patent issued in your name shall be sold to the company
for $1.00;
from time to time, upon the request and at the expense of the Corporation, but
without charge for services beyond the payments herein provided for, execute all
assignments or other instruments required to transfer and assign to the
Corporation (or as the Corporation may otherwise direct)) all inventions and all
patents and applications for patents covering such inventions or otherwise
required to protect the rights and interests of the Corporation;
testify in any proceedings or litigation as to all such inventions; and
in case the Corporation shall desire to keep secret any such invention, or shall
for any reason decide not to have letters patent applied for thereon, refrain
from applying for such letters patent thereon.
No termination of this agreement by the Corporation or the Employee shall
release the Employee or his heirs or legal representatives from complying with
the foregoing
<PAGE>
obligations as to such inventions. To that extent, the terms of this Article 6
shall survive this Agreement.
7. Governing Law
This Agreement shall be construed and enforced in accordance with the
laws of the State of New Jersey.
8. Entire Contract
This Agreement constitutes the entire understanding and agreement between
the Corporation and the Employee with regard to all matters referred to herein.
There are no other agreements, conditions or representations, oral or written,
express or implied, with regard thereto. This Agreement may be amended only in
writing signed by both parties.
9. Non-Waiver
A day or failure by either party to exercise a right under this Agreement,
or a partial or single exercise of that right, shall not constitute a waiver of
that or any other right.
10. Assignment
This Agreement shall not be assigned by Employee, except that any benefits
which inure at any time to his estate or personal representative shall be
transferable as a matter of right to such entity or entities. The Corporation
shall have the right to transfer and assign this Agreement and its rights
hereunder in its entirety in its sole discretion and, upon doing so, all of the
rights and obligations of the Corporation hereunder shall thereafter inure and
apply to its assignees and successors on condition such succeeding entity
assumes in writing at the time of any such assignment all the obligations of
Corporation hereunder.
11. Enforceability
The invalidity or non-enforceability of any provision, term, or condition
hereof shall in no way effect the validity or enforceability of any other
provision or of this Agreement or of the Agreement in its entirety.
12. Restrictive Covenant
<PAGE>
When this agreement is terminated by either party for any reason, the
Employee for a period of twelve (12) months from the date of the termination
shall be and hereby agrees to be prohibited from directly or indirectly, either
as a principal, agent, manager, employee, owner, partner, stockholder, director,
or officer of a corporation or otherwise from engaging or becoming interested
in, financially or otherwise, in any business, trade, or occupation similar to
or in competition with the business of the Corporation within a radius of one
hundred miles of the main office or any branch office of the Corporation then
existing at that time. The Corporation shall have the right to assign this
restrictive covenant in the event that the Corporation desires at a date
subsequent hereto to sell or otherwise transfer all of the stock or other assets
of the Corporation, and Employee agrees to remain bound by the terms and
conditions of this restrictive covenant to any and all subsequent purchasers of
the stock and/or assets of the Corporation.
13. Headings
Headings in this Agreement are for the convenience of the parties hereto
only and shall not be used to interpret or construe its provisions.
14. Counterparts
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original of which together shall constitute one and the same
agreement.
15. Binding Effect
The provisions of this Agreement shall be binding upon and inure to the
benefit of both parties and their respective successors and assigns.
<PAGE>
IN WITNESS WHEREOF, Corporation has, by its appropriate officers, signed and
sealed, and Employee has signed this Agreement.
LAMINAIRE CORPORATION
BY: _________________
ATTEST:
SECRETARY
By:______________________
ATTEST:
EMPLOYEE
<PAGE>
EXHIBIT 10.26 EMPLOYMENT AGREEMENT OF ANTONIO GARAY DATED OCTOBER 16, 1997
<PAGE>
Employment Agreement
THIS AGREEMENT effective the 16th day of October, 1997 by and between
Thermo-Mizer Environmental Corp, a Delaware corporation, and its subsidiaries
present or future, with offices at 960 East Hazelwood Avenue, Rahway, NJ 07065
and its subsididries, present and future,(the "Corporation") and Antonio Garay,
Rahway NJ 07065 (the "Employee").
WITNESSETH
WHEREAS, the Corporation, having been organized for the purpose of engaging
in the business of manufacturing, designing, assembling, purchasing and selling
a family of products used for clean rooms and electronic assembly desires to
employ Employee to devote full time to the business of the Corporation; and
WHEREAS, Employee, understanding and accepting the conditions of employment
set forth herein, desires to be so employed.
NOW, THEREFORE, in consideration of the promises and the mutual covenants
set forth herein, and for other good and valuable consideration, the receipt
whereof is hereby duly acknowledged, the parties hereto covenant and agree as
follows:
1. Employment
Corporation agrees to employ Employee and Employee agrees to be so employed
as a full time Employee with no other commercial commitments or
responsibilities, in the capacity of President and Chief Operating Officer or
for such other duties and services for the Corporation as may be determined and
assigned to him from time to time by the Chief Executive Officer or Board of
Directors. Employee shall devote his entire employment, knowledge and best
skills to the furtherance of the business purposes of the Corporation as shall
be entrusted to him under the general rules from time to time promulgated by the
Corporation through its Chief Executive Officer. The duties, responsibilities
and accountability of the Employee are described in the attached Job
Description. The Company from time to time may make minor changes or otherwise
adjust the Job Description.
2. Term
Employment shall be for a term of three years effective as of October 16,
1997 and terminating on October 16, 2000, unless sooner terminated by the death
or permanent disability of Employee or by written notice given by either party
as hereinafter provided. The year ending October 16, 1998 is referred to
hereafter as "Year 1"; the year ending October 16, 1999 is referred to hereafter
as "Year 2"; and the year ending October 16, 2000 is referred to hereafter as
"Year 3." This Agreement may be automatically extended for additional one-year
periods, with negotiated salary and benefits, unless terminated pursuant to the
provisions of Paragraph 3.
3. Termination
This Agreement and the employment of the Employee may be terminated by
either party with or without stated cause. Employee is required to provide the
company with 30 days notice of termination and entitled to receive accumulated
and unused vacation benefits, sixteen weeks of severance pay, and stock options
so vested in accordance with the Stock Option Plan. Upon notice received from
the Employee, the Company at its option may ask the Employee to leave
immediately without continuation of pay. The Company is required to provide the
Employee with 30 days notice of termination, and may ask the Employee to leave
immediately with the thirty days pay plus accumulated unused benefits, plus
severance pay of thirty nine weeks. The Employee will receive twenty six weeks
of severance pay upon termination for cause other than as set forth below. The
Employee will receive no severance pay upon termination for cause as set forth
below. Termination for cause shall include, but not necessarily be limited to,
the following:
..Employee's failure to report for work in excess of five days (or repeat
absences without acceptable reasons) without appropriate reasons of medical
illness causing incapacity, death in the immediate family, or without approval
of the CEO;
...Employee's final conviction of a felony involving a crime of moral
turpitude;
..Judgment of the Board of Directors that Employee committed acts that
constitute willful fraud on the part of the Employee in connection with his
duties under this Agreement, including but not limited to misappropriation or
embezzlement in the performance of duties as an Employee of the Company, or
willfully engaging in conduct materially injurious to the Company and in
violation of the covenants contained in this agreement;
...Employee's gross misconduct, including by not limited to the willful
failure of Employee either to a) continue to obey lawful written instruction of
the Board of Directors after thirty (30) days notice in writing of Employee's
failure to do so and the Board of Directors' intention to terminate Employee if
such failure is not corrected, or (b) correct any conduct of Employee which
constitutes a material breach of this agreement after thirty (30) days notice in
writing of Employee's failure to do so and the Board of Directors intention to
terminate Employee if such failure is not corrected.
The Severance pay, as set forth above, will survive this contract and all
future contracts. Severance pay at termination will be at the then existing rate
of pay. Payment of Severance will be made weekly until such time as the
Severance pay as defined above is paid in full.
4. Board of Directors
Employee shall at all times discharge his duties in consultation with and
under the supervision of the Corporation's Board of Directors, its Committees,
and the Chief Executive Officer. In the performance of his duties, Employee
shall make his principal office in such place as the Corporation's Board of
Directors shall determine. Should the Employee decide not to relocate, severance
pay will be granted as if terminated without cause at the convenience of the
Corporation under paragraph 3. above.
5. Compensation
Employee's total compensation for employment on a full time basis (which
from time to time may include travel, working beyond forty hours in any given
week to complete work or special project, and assisting others in other
departments without additional compensation) rendered to or on behalf of the
Corporation for each fiscal year for which this Agreement is in effect shall be
$120,000 plus an increase of 6% the following year and 7% the third year based
on company performance. Company performance shall mean that net sales of the
Laminaire Corp. in each of those years have met or exceeded positive growth
corresponding to those same percentages. Growth less than those percentages
shall mean the next year's raise in compensation shall be appropriately
prorated. Compensation shall be paid in weekly installments. The Board of
Directors may, at its sole discretion, provide additional compensation to
Employee based on the operating performance of the Corporation.
In addition, the Company, in each fiscal year, shall provide stock options
to Employee in accordance with the Company's Stock Option Plan. A copy of this
plan is attached to this agreement.
In addition, the company shall authorize the Employee vacation, sick or
otherwise personal days, each year accrued at a rate of sixteen hours per month,
as accrued for corporate officers.
In addition, the Employee shall be eligible to participate in the Company's
401K plan when plan requirements have been met.
In addition, any and all benefits to Laminaire Corporation employees as a
group will be granted to the Employee.
6. Expenses
(A) Reimbursements: The Corporation shall reimburse Employee for all
reasonable and necessary expenses incurred in carrying out his duties under this
Agreement. Employee shall present to the Corporation within thirty days an
itemized account of such expenses in any form required by the Corporation. Such
expenses shall be subject to approval by the Chief Executive Officer and to
review by the Audit Committee of the Board of Directors.
(B) Automobile: The Corporation recognizes Employee's need for an
automobile allowance for business purposes. The Corporation shall pay such
allowance as currently received.
(C) Disability: In the event any illness or accident renders Employee
disabled and unable to carry out all of his duties extending beyond 60 days and
certified as disabled by a least two (2) duly licensed and qualified physicians,
one (1) approved by the Board of Directors of the Company and one (1) approved
by Employee, Corporation's obligations under this Agreement may terminate at a
time and in a manner and under such conditions as the Board of Directors may
then determine in its own discretion at such time in accordance with state law.
The company may chose to provide a disability plan or chose to reimburse
Employee for an individual plan. Additionally, the existing disability accruals
for all employees will remain in place and are to be paid to the extent of the
balance accrued for as long as Employee is disabled.
(D) Notices: All notices required or permitted to be given under this
Agreement shall be given by certified mail, return receipt requested, to the
parties at the following addresses or to such other addresses as either may
designate in writing to the other party.
If to Corporation Laminaire Corporation, 960 East Hazelwood Avenue Rahway,
NJ 07065
If to Employee Antonio Garay, (address above)
7. Certificate of Incorporation and Bylaws
Employee agrees that the Corporation's articles of incorporation and
bylaws, together with all currently effective rules and regulations made
thereunder, are hereby included in and made a part of this Agreement. Employee
further agrees that all new rules and regulations and all resolutions affecting
employees of the Corporation generally shall modify this Agreement as if they
had been included in it and had been made a part of it from the date of its
execution.
8. Restrictions
Employee hereby covenants and agrees that:
he will not for his personal benefit, make, draw, accept, or endorse any
promissory note, bill of exchange, lease, contract, or other obligation for the
payment of money or its equivalent by or in the name of the Corporation;
<PAGE>
he will not pledge the credit of the Corporation in any way whatsoever
except as he may be authorized to do so by the Corporation's Board of Directors;
and
any breach of this Article 8 by him shall entitle the Corporation to
recover from him any expense in which it may become involved as a result of such
prohibited action.
9. Confidential Matters
All confidential information relating to the Corporation's business shall
be kept confidential by Employee and shall not be disclosed by him except to the
extent necessary for performance of his services and obligations as set forth
herein and in all such instances Employee will take reasonable steps to
safeguard the confidentiality of all such information.
Employee acknowledges his understanding that in the performance of his
duties and obligations hereunder he may obtain knowledge of "confidential
information" as hereinafter defined, relating to the business of the
Corporation. As used herein, "confidential information" means any information
(including, without limitation, any formula, pattern, device, plan, process or
compilation of information) which (i) is, or is designed to be, used in the
business of the Corporation or results from its research or development
activities; (ii) is private or confidential in that it is not generally known or
available to the public; and (iii) gives the Corporation an opportunity to
obtain an advantage over competitors who do not know or use it.
Employee shall not, without the prior written consent of the Corporation,
either during the term of this Agreement or after any termination thereof:
use or disclose any such confidential information outside the Corporation;
publish any writing with respect thereto; or
except in the performance of his duties hereunder, remove or aid in the
removal of any such confidential information or any property or material
relating thereto from the Corporation.
10. Governing Law
This Agreement shall be construed and enforced in accordance with the laws
of the State of New Jersey.
11. Inventions
Employee shall promptly disclose to the Corporation any and all inventions.
improvements, machines, appliances, processes, products, or the like (all of
which are referred to herein as "inventions") which Employee may invent,
conceive, produce, or reduce to practice, either solely or jointly with others,
at any time, in furtherance or in the performance of his duties as set forth in
this Agreement.
Any and all such inventions which in any way relate to the products
manufactured, sold, or used by the Corporation, or to any methods, processes, or
apparatus used in connection with the production of such goods or materials, or
in either case which are or may be or may become capable of use in the business
of the Corporation, shall at all times and for all purposes be regarded as
acquired and held by Employee in a fiduciary capacity and solely for the benefit
of the Corporation.
With respect to all such inventions, Employee shall:
treat all information with respect thereto as confidential information
within the meaning of and subject to Article 9 of this Agreement;
keep complete and accurate records thereof which records shall be the
property of the Corporation;
execute any application for letters patent of the United States and of any
and all other countries covering such inventions, and give the Corporation, its
attorneys and counsel all reasonable and requested assistance in preparing such
application;
from time to time, upon the request and at the expense of the Corporation,
but without charge for services beyond the payments herein provided for, execute
all assignments or other instruments required to transfer and assign to the
Corporation (or as the Corporation may otherwise direct)) all inventions and all
patents and applications for patents covering such inventions or otherwise
required to protect the rights and interests of the Corporation; testify in any
proceedings or litigation as to all such inventions; and
in case the Corporation shall desire to keep secret any such invention, or
shall for any reason decide not to have letters patent applied for thereon,
refrain from applying for such letters patent thereon.
No termination of employment of the Employee by the Corporation or of this
Agreement shall release the Employee or his heirs or legal representatives from
complying with the foregoing obligations as to such inventions. To that extent,
the terms of this Article 11 shall survive this Agreement.
12. Entire Contract
This Agreement constitutes the entire understanding and agreement between
the Corporation and the Employee with regard to all matters referred to herein.
There are no other agreements, conditions or representations, oral or written,
express or implied, with regard thereto. This Agreement may be amended only in
writing signed by both parties.
13. Non-Waiver
A failure by either party to exercise a right under this Agreement, or a
partial or single exercise of that right, shall not constitute a waiver of that
or any other right.
14. Assignment
This Agreement shall not be assigned by Employee except that any benefits
which inure at any time to his estate or personal representative shall be
transferable as a matter of right to such entity or entities. The Corporation
shall have the right to transfer and assign this Agreement and its rights
hereunder in its entirety in its sole discretion and, upon doing so, all of the
rights and obligations of the Corporation hereunder shall thereafter inure and
apply to its assignees and successors on condition such succeeding entity
assumes in writing at the time of any such assignment all the obligations of
Corporation hereunder.
15. Enforceability
The invalidity or non-enforceability of any provision, term, or condition
hereof shall in no way effect the validity or enforceability of any other
provision or of this Agreement or of the Agreement in its entirety.
16. Non-Compete
In consideration of the stock options and other incentives awarded to me by
the company at anytime during employment, and should termination from employment
with Thermo-Mizer, or any subsidiary there of, occur for any reason, Employee
agrees to refrain, for a period of twelve (12) months, from selling, soliciting
or otherwise contacting customers of the Company or its subsidiaries, for the
purpose of competing with goods and services provided these customers by the
Company. Employee agrees not to divulge to any party or otherwise use trade
secrets, pricing policies, costs, designs and any other proprietary or sensitive
information accumulated during employment at Thermo-Mizer Environmental Corp or
its subsidiaries.
17. Headings
Headings in this Agreement are for the convenience of the parties hereto
only and shall not be used to interpret or construe its provisions.
18. Counterparts
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original of which together shall constitute one and the same
agreement.
19. Binding Effect
The provisions of this Agreement shall be binding upon and inure to the
benefit of both parties and their respective successors and assigns.
IN WITNESS WHEREOF, Corporation has, by its appropriate officers, signed
and sealed, and Employee has signed this Agreement.
THERMO-MIZER ENVIRONMENTAL CORPORATION
BY: _______________________
ATTEST:
SECRETARY
BY: ____________________
EMPLOYEE:
<PAGE>
EXHIBIT 10.27 EMPLOYMENT AGREEMENT OF GERALD E. REILLY DATED OCTOBER 16, 1997
<PAGE>
Employment Agreement
THIS AGREEMENT effective the 16th day of October, 1997 by and between
Thermo-Mizer Environmental Corp, a Delaware corporation, and its subsidiaries
present or future, with offices at 960 East Hazelwood Avenue, Rahway, NJ 07065
and its subsididries, present and future,(the "Corporation") and Gerald E.
Reilly, 28 Evergreen Drive, Berkeley Heights, NJ 07922 (the "Employee").
WITNESSETH
WHEREAS, the Corporation, having been organized for the purpose of engaging
in the business of manufacturing, designing, assembling, purchasing and selling
a family of products used for clean rooms and electronic assembly desires to
employ Employee to devote full time to the business of the Corporation; and
WHEREAS, Employee, understanding and accepting the conditions of employment
set forth herein, desires to be so employed.
NOW, THEREFORE, in consideration of the promises and the mutual covenants
set forth herein, and for other good and valuable consideration, the receipt
whereof is hereby duly acknowledged, the parties hereto covenant and agree as
follows:
1. Employment
Corporation agrees to employ Employee and Employee agrees to be so employed
as a full time Employee with no other commercial commitments or
responsibilities, in the capacity of Vice President and Chief Financial Officer
or for such other duties and services for the Corporation as may be determined
and assigned to him from time to time by the Chief Executive Officer or Board of
Directors. Employee shall devote his entire employment, knowledge and best
skills to the furtherance of the business purposes of the Corporation as shall
be entrusted to him under the general rules from time to time promulgated by the
Corporation through its Chief Executive Officer. The duties, responsibilities
and accountability of the Employee are described in the attached Job
Description. The Company from time to time may make minor changes or otherwise
adjust the Job Description.
2. Term
Employment shall be for a term of three years effective as of October 16,
1997 and terminating on October 16, 2000, unless sooner terminated by the death
or permanent disability of Employee or by written notice given by either party
as hereinafter provided. The year ending October 16, 1998 is referred to
hereafter as "Year 1"; the year ending October 16, 1999 is referred to hereafter
as "Year 2"; and the year ending October 16, 2000 is referred to hereafter as
"Year 3." This Agreement may be automatically extended for additional one-year
periods, with negotiated salary and benefits, unless terminated pursuant to the
provisions of Paragraph 3.
3. Termination
This Agreement and the employment of the Employee may be terminated by
either party with or without stated cause. Employee is required to provide the
company with 30 days notice of termination and entitled to receive accumulated
and unused vacation benefits, sixteen weeks of severance pay, and stock options
so vested in accordance with the Stock Option Plan. Upon notice received from
the Employee, the Company at its option may ask the Employee to leave
immediately without continuation of pay. The Company is required to provide the
Employee with 30 days notice of termination, and may ask the Employee to leave
immediately with the thirty days pay plus accumulated unused benefits, plus
severance pay of thirty nine weeks. The Employee will receive twenty six weeks
of severance pay upon termination for cause other than as set forth below. The
Employee will receive no severance pay upon termination for cause as set forth
below. Termination for cause shall include, but not necessarily be limited to,
the following:
..Employee's failure to report for work in excess of five days (or repeat
absences without acceptable reasons) without appropriate reasons of medical
illness causing incapacity, death in the immediate family, or without approval
of the CEO;
...Employee's final conviction of a felony involving a crime of moral
turpitude;
..Judgment of the Board of Directors that Employee committed acts that
constitute willful fraud on the part of the Employee in connection with his
duties under this Agreement, including but not limited to misappropriation or
embezzlement in the performance of duties as an Employee of the Company, or
willfully engaging in conduct materially injurious to the Company and in
violation of the covenants contained in this agreement;
...Employee's gross misconduct, including by not limited to the willful
failure of Employee either to a) continue to obey lawful written instruction of
the Board of Directors after thirty (30) days notice in writing of Employee's
failure to do so and the Board of Directors' intention to terminate Employee if
such failure is not corrected, or (b) correct any conduct of Employee which
constitutes a material breach of this agreement after thirty (30) days notice in
writing of Employee's failure to do so and the Board of Directors intention to
terminate Employee if such failure is not corrected.
The Severance pay, as set forth above, will survive this contract and all
future contracts. Severance pay at termination will be at the then existing rate
of pay. Payment of Severance will be made weekly until such time as the
Severance pay as defined above is paid in full.
4. Board of Directors
Employee shall at all times discharge his duties in consultation with and
under the supervision of the Corporation's Board of Directors, its Committees,
and the Chief Executive Officer. In the performance of his duties, Employee
shall make his principal office in such place as the Corporation's Board of
Directors shall determine. Should the Employee decide not to relocate, severance
pay will be granted as if terminated without cause at the convenience of the
Corporation under paragraph 3. above.
5. Compensation
Employee's total compensation for employment on a full time basis (which
from time to time may include travel, working beyond forty hours in any given
week to complete work or special project, and assisting others in other
departments without additional compensation) rendered to or on behalf of the
Corporation for each fiscal year for which this Agreement is in effect shall be
$110,000 plus an increase of 6% the following year and 7% the third year based
on company performance. Company performance shall mean that net sales of the
Laminaire Corp. in each of those years have met or exceeded positive growth
corresponding to those same percentages. Growth less than those percentages
shall mean the next year's raise in compensation shall be appropriately
prorated. Compensation shall be paid in weekly installments. The Board of
Directors may, at its sole discretion, provide additional compensation to
Employee based on the operating performance of the Corporation.
In addition, the Company, in each fiscal year, shall provide stock options
to Employee in accordance with the Company's Stock Option Plan. A copy of this
plan is attached to this agreement.
In addition, the company shall authorize the Employee vacation, sick or
otherwise personal days, each year accrued at a rate of sixteen hours per month,
as accrued for corporate officers.
In addition, the Employee shall be eligible to participate in the Company's
401K plan when plan requirements have been met.
In addition, any and all benefits to Laminaire Corporation employees as a
group will be granted to the Employee.
6. Expenses
(A) Reimbursements: The Corporation shall reimburse Employee for all
reasonable and necessary expenses incurred in carrying out his duties under this
Agreement. Employee shall present to the Corporation within thirty days an
itemized account of such expenses in any form required by the Corporation. Such
expenses shall be subject to approval by the Chief Executive Officer and to
review by the Audit Committee of the Board of Directors. Certain professional
fees, continuing professional education courses, or other requirements to keep
Employee's Certified Public Accountant licenses current shall be reimbursed.
(B) Automobile: The Corporation recognizes Employee's need for an
automobile allowance for business purposes. The Corporation shall pay such
allowance as currently received.
(C) Disability: In the event any illness or accident renders Employee
disabled and unable to carry out all of his duties extending beyond 60 days and
certified as disabled by a least two (2) duly licensed and qualified physicians,
one (1) approved by the Board of Directors of the Company and one (1) approved
by Employee, Corporation's obligations under this Agreement may terminate at a
time and in a manner and under such conditions as the Board of Directors may
then determine in its own discretion at such time in accordance with state law.
The company may chose to provide a disability plan or chose to reimburse
Employee for an individual plan. Additionally, the existing disability accruals
for all employees will remain in place and are to be paid to the extent of the
balance accrued for as long as Employee is disabled.
(D) Notices: All notices required or permitted to be given under this
Agreement shall be given by certified mail, return receipt requested, to the
parties at the following addresses or to such other addresses as either may
designate in writing to the other party.
If to Corporation Laminaire Corporation, 960 East Hazelwood Avenue Rahway,
NJ 07065
If to Employee Gerald E. Reilly, (address above)
7. Certificate of Incorporation and Bylaws
Employee agrees that the Corporation's articles of incorporation and
bylaws, together with all currently effective rules and regulations made
thereunder, are hereby included in and made a part of this Agreement. Employee
further agrees that all new rules and regulations and all resolutions affecting
employees of the Corporation generally shall modify this Agreement as if they
had been included in it and had been made a part of it from the date of its
execution.
8. Restrictions
Employee hereby covenants and agrees that:
he will not for his personal benefit, make, draw, accept, or endorse any
promissory note, bill of exchange, lease, contract, or other obligation for the
payment of money or its equivalent by or in the name of the Corporation;
he will not pledge the credit of the Corporation in any way whatsoever
except as he may be authorized to do so by the Corporation's Board of Directors;
and
any breach of this Article 8 by him shall entitle the Corporation to
recover from him any expense in which it may become involved as a result of such
prohibited action.
9. Confidential Matters
All confidential information relating to the Corporation's business shall
be kept confidential by Employee and shall not be disclosed by him except to the
extent necessary for performance of his services and obligations as set forth
herein and in all such instances Employee will take reasonable steps to
safeguard the confidentiality of all such information.
Employee acknowledges his understanding that in the performance of his
duties and obligations hereunder he may obtain knowledge of "confidential
information" as hereinafter defined, relating to the business of the
Corporation. As used herein, "confidential information" means any information
(including, without limitation, any formula, pattern, device, plan, process or
compilation of information) which (i) is, or is designed to be, used in the
business of the Corporation or results from its research or development
activities; (ii) is private or confidential in that it is not generally known or
available to the public; and (iii) gives the Corporation an opportunity to
obtain an advantage over competitors who do not know or use it.
Employee shall not, without the prior written consent of the Corporation,
either during the term of this Agreement or after any termination thereof:
use or disclose any such confidential information outside the Corporation;
publish any writing with respect thereto; or
except in the performance of his duties hereunder, remove or aid in the
removal of any such confidential information or any property or material
relating thereto from the Corporation.
10. Governing Law
This Agreement shall be construed and enforced in accordance with the laws
of the State of New Jersey.
11. Inventions
Employee shall promptly disclose to the Corporation any and all inventions.
improvements, machines, appliances, processes, products, or the like (all of
which are referred to herein as "inventions") which Employee may invent,
conceive, produce, or reduce to practice, either solely or jointly with others,
at any time, in furtherance or in the performance of his duties as set forth in
this Agreement.
Any and all such inventions which in any way relate to the products
manufactured, sold, or used by the Corporation, or to any methods, processes, or
apparatus used in connection with the production of such goods or materials, or
in either case which are or may be or may become capable of use in the business
of the Corporation, shall at all times and for all purposes be regarded as
acquired and held by Employee in a fiduciary capacity and solely for the benefit
of the Corporation.
With respect to all such inventions, Employee shall:
treat all information with respect thereto as confidential information
within the meaning of and subject to Article 9 of this Agreement;
keep complete and accurate records thereof which records shall be the
property of the Corporation;
execute any application for letters patent of the United States and of any
and all other countries covering such inventions, and give the Corporation, its
attorneys and counsel all reasonable and requested assistance in preparing such
application;
from time to time, upon the request and at the expense of the Corporation,
but without charge for services beyond the payments herein provided for, execute
all assignments or other instruments required to transfer and assign to the
Corporation (or as the Corporation may otherwise direct)) all inventions and all
patents and applications for patents covering such inventions or otherwise
required to protect the rights and interests of the Corporation;
testify in any proceedings or litigation as to all such inventions; and
in case the Corporation shall desire to keep secret any such invention, or
shall for any reason decide not to have letters patent applied for thereon,
refrain from applying for such letters patent thereon.
No termination of employment of the Employee by the Corporation or of this
Agreement shall release the Employee or his heirs or legal representatives from
complying with the foregoing obligations as to such inventions. To that extent,
the terms of this Article 11 shall survive this Agreement.
12. Entire Contract
This Agreement constitutes the entire understanding and agreement between
the Corporation and the Employee with regard to all matters referred to herein.
There are no other agreements, conditions or representations, oral or written,
express or implied, with regard thereto. This Agreement may be amended only in
writing signed by both parties.
13. Non-Waiver
A failure by either party to exercise a right under this Agreement, or a
partial or single exercise of that right, shall not constitute a waiver of that
or any other right.
14. Assignment
This Agreement shall not be assigned by Employee except that any benefits
which inure at any time to his estate or personal representative shall be
transferable as a matter of right to such entity or entities. The Corporation
shall have the right to transfer and assign this Agreement and its rights
hereunder in its entirety in its sole discretion and, upon doing so, all of the
rights and obligations of the Corporation hereunder shall thereafter inure and
apply to its assignees and successors on condition such succeeding entity
assumes in writing at the time of any such assignment all the obligations of
Corporation hereunder.
15. Enforceability
The invalidity or non-enforceability of any provision, term, or condition
hereof shall in no way effect the validity or enforceability of any other
provision or of this Agreement or of the Agreement in its entirety.
16. Non-Compete
In consideration of the stock options and other incentives awarded to me by
the company at anytime during employment, and should termination from employment
with Thermo-Mizer, or any subsidiary there of, occur for any reason, Employee
agrees to refrain, for a period of twelve (12) months, from selling, soliciting
or otherwise contacting customers of the Company or its subsidiaries, for the
purpose of competing with goods and services provided these customers by the
Company. Employee agrees not to divulge to any party or otherwise use trade
secrets, pricing policies, costs, designs and any other proprietary or sensitive
information accumulated during employment at Thermo-Mizer Environmental Corp or
its subsidiaries.
17. Headings
Headings in this Agreement are for the convenience of the parties hereto
only and shall not be used to interpret or construe its provisions.
18. Counterparts
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original of which together shall constitute one and the same
agreement.
19. Binding Effect
The provisions of this Agreement shall be binding upon and inure to the
benefit of both parties and their respective successors and assigns.
IN WITNESS WHEREOF, Corporation has, by its appropriate officers, signed
and sealed, and Employee has signed this Agreement.
THERMO-MIZER ENVIRONMENTAL CORPORATION
BY: _______________________
ATTEST:
SECRETARY
BY: ____________________
EMPLOYEE:
<PAGE>
EXHIBIT 10.28 EMPLOYMENT AGREEMENT OF ETTA MONTELEONE DATED OCTOBER 16, 1997
<PAGE>
Employment Agreement
THIS AGREEMENT effective the 16th day of October, 1997 by and between
Thermo-Mizer Environmental Corp, a Delaware corporation, and its subsidiaries
present or future, with offices at 960 East Hazelwood Avenue, Rahway, NJ 07065
and its subsididries, present and future,(the "Corporation") and Etta
Monteleone, 1 Dunster St., Carteret, NJ 07008 the "Employee").
WITNESSETH
WHEREAS, the Corporation, having been organized for the purpose of engaging
in the business of manufacturing, designing, assembling, purchasing and selling
a family of products used for clean rooms and electronic assembly desires to
employ Employee to devote full time to the business of the Corporation; and
WHEREAS, Employee, understanding and accepting the conditions of employment
set forth herein, desires to be so employed.
NOW, THEREFORE, in consideration of the promises and the mutual covenants
set forth herein, and for other good and valuable consideration, the receipt
whereof is hereby duly acknowledged, the parties hereto covenant and agree as
follows:
1. Employment
Corporation agrees to employ Employee and Employee agrees to be so employed
as a full time Employee with no other commercial commitments or
responsibilities, in the capacity of Administrative Manager or for such other
duties and services for the Corporation as may be determined and assigned to her
from time to time by the Chief Executive Officer or Board of Directors. Employee
shall devote her entire employment, knowledge and best skills to the furtherance
of the business purposes of the Corporation as shall be entrusted to her under
the general rules from time to time promulgated by the Corporation through its
Chief Executive Officer. The duties, responsibilities and accountability of the
Employee are described in the attached Job Description. The Company from time to
time may make minor changes or otherwise adjust the Job Description.
2. Term
Employment shall be for a term of three years effective as of October 16,
1997 and terminating on October 16, 2000, unless sooner terminated by the death
or permanent disability of Employee or by written notice given by either party
as hereinafter provided. The year ending October 16, 1998 is referred to
hereafter as "Year 1"; the year ending October 16, 1999 is referred to hereafter
as "Year 2"; and the year ending October 16, 2000 is referred to hereafter as
"Year 3." This Agreement may be automatically extended for additional one-year
periods, with negotiated salary and benefits, unless terminated pursuant to the
provisions of Paragraph 3.
3. Termination
This Agreement and the employment of the Employee may be terminated by
either party with or without stated cause. Employee is required to provide the
company with 30 days notice of termination and entitled to receive accumulated
and unused vacation benefits, thirteen weeks of severance pay, and stock options
so vested in accordance with the Stock Option Plan. Upon notice received from
the Employee, the Company at its option may ask the Employee to leave
immediately without continuation of pay. The Company is required to provide the
Employee with 30 days notice of termination, and may ask the Employee to leave
immediately with the thirty days pay plus accumulated unused benefits, plus
severance pay of twenty six weeks. The Employee will receive nineteen weeks of
severance pay upon termination for cause other than as set forth below. The
Employee will receive no severance pay upon termination for cause as set forth
below. Termination for cause shall include, but not necessarily be limited to,
the following:
..Employee's failure to report for work in excess of five days (or repeat
absences without acceptable reasons) without appropriate reasons of medical
illness causing incapacity, death in the immediate family, or without approval
of the CEO;
...Employee's final conviction of a felony involving a crime of moral
turpitude;
..Judgment of the Board of Directors that Employee committed acts that
constitute willful fraud on the part of the Employee in connection with her
duties under this Agreement, including but not limited to misappropriation or
embezzlement in the performance of duties as an Employee of the Company, or
willfully engaging in conduct materially injurious to the Company and in
violation of the covenants contained in this agreement;
...Employee's gross misconduct, including by not limited to the willful
failure of Employee either to a) continue to obey lawful written instruction of
the Board of Directors after thirty (30) days notice in writing of Employee's
failure to do so and the Board of Directors' intention to terminate Employee if
such failure is not corrected, or (b) correct any conduct of Employee which
constitutes a material breach of this agreement after thirty (30) days notice in
writing of Employee's failure to do so and the Board of Directors intention to
terminate Employee if such failure is not corrected.
The Severance pay, as set forth above, will survive this contract and all
future contracts. Severance pay at termination will be at the then existing rate
of pay. Payment of Severance will be made weekly until such time as the
Severance pay as defined above is paid in full.
4. Board of Directors
Employee shall at all times discharge her duties in consultation with and
under the supervision of the Corporation's Board of Directors, its Committees,
and the Chief Executive Officer. In the performance of her duties, Employee
shall make her principal office in such place as the Corporation's Board of
Directors shall determine. Should the Employee decide not to relocate, severance
pay will be granted as if terminated without cause at the convenience of the
Corporation under paragraph 3. above.
5. Compensation
Employee's total compensation for employment on a full time basis (which
from time to time may include travel, working beyond forty hours in any given
week to complete work or special project, and assisting others in other
departments without additional compensation) rendered to or on behalf of the
Corporation for each fiscal year for which this Agreement is in effect shall be
$95,000 plus an increase of 6% the following year and 7% the third year based on
company performance. Company performance shall mean that net sales of the
Laminaire Corp. in each of those years have met or exceeded positive growth
corresponding to those same percentages. Growth less than those percentages
shall mean the next year's raise in compensation shall be appropriately
prorated. Compensation shall be paid in weekly installments. The Board of
Directors may, at its sole discretion, provide additional compensation to
Employee based on the operating performance of the Corporation.
In addition, the Company, in each fiscal year, shall provide stock options
to Employee in accordance with the Company's Stock Option Plan. A copy of this
plan is attached to this agreement.
In addition, the company shall authorize the Employee vacation, sick or
otherwise personal days, each year accrued at a rate of fourteen hours per
month, as accrued for senion management.
In addition, the Employee shall be eligible to participate in the Company's
401K plan when plan requirements have been met.
In addition, any and all benefits to Laminaire Corporation employees as a
group will be granted to the Employee.
6. Expenses
(A) Reimbursements: The Corporation shall reimburse Employee for all
reasonable and necessary expenses incurred in carrying out her duties under this
Agreement. Employee shall present to the Corporation within thirty days an
itemized account of such expenses in any form required by the Corporation. Such
expenses shall be subject to approval by the Chief Executive Officer and to
review by the Audit Committee of the Board of Directors.
(B) Automobile: The Corporation recognizes Employee's need for an
automobile allowance for business purposes. The Corporation shall pay such
allowance as currently received.
(C) Disability: In the event any illness or accident renders Employee
disabled and unable to carry out all of her duties extending beyond 60 days and
certified as disabled by a least two (2) duly licensed and qualified physicians,
one (1) approved by the Board of Directors of the Company and one (1) approved
by Employee, Corporation's obligations under this Agreement may terminate at a
time and in a manner and under such conditions as the Board of Directors may
then determine in its own discretion at such time in accordance with state law.
The company may chose to provide a disability plan or chose to reimburse
Employee for an individual plan. Additionally, the existing disability accruals
for all employees will remain in place and are to be paid to the extent of the
balance accrued for as long as Employee is disabled.
(D) Notices: All notices required or permitted to be given under this
Agreement shall be given by certified mail, return receipt requested, to the
parties at the following addresses or to such other addresses as either may
designate in writing to the other party.
If to Corporation Laminaire Corporation, 960 East Hazelwood Avenue Rahway,
NJ 07065
If to Employee Etta Monteleone, (address above)
7. Certificate of Incorporation and Bylaws
Employee agrees that the Corporation's articles of incorporation and
bylaws, together with all currently effective rules and regulations made
thereunder, are hereby included in and made a part of this Agreement. Employee
further agrees that all new rules and regulations and all resolutions affecting
employees of the Corporation generally shall modify this Agreement as if they
had been included in it and had been made a part of it from the date of its
execution.
8. Restrictions
Employee hereby covenants and agrees that:
she will not for her personal benefit, make, draw, accept, or endorse any
promissory note, bill of exchange, lease, contract, or other obligation for the
payment of money or its equivalent by or in the name of the Corporation;
<PAGE>
she will not pledge the credit of the Corporation in any way whatsoever
except as she may be authorized to do so by the Corporation's Board of
Directors; and
any breach of this Article 8 by her shall entitle the Corporation to
recover from her any expense in which it may become involved as a result of such
prohibited action.
9. Confidential Matters
All confidential information relating to the Corporation's business shall
be kept confidential by Employee and shall not be disclosed by her except to the
extent necessary for performance of her services and obligations as set forth
herein and in all such instances Employee will take reasonable steps to
safeguard the confidentiality of all such information.
Employee acknowledges her understanding that in the performance of her
duties and obligations hereunder she may obtain knowledge of "confidential
information" as hereinafter defined, relating to the business of the
Corporation. As used herein, "confidential information" means any information
(including, without limitation, any formula, pattern, device, plan, process or
compilation of information) which (i) is, or is designed to be, used in the
business of the Corporation or results from its research or development
activities; (ii) is private or confidential in that it is not generally known or
available to the public; and (iii) gives the Corporation an opportunity to
obtain an advantage over competitors who do not know or use it.
Employee shall not, without the prior written consent of the Corporation,
either during the term of this Agreement or after any termination thereof:
use or disclose any such confidential information outside the Corporation;
publish any writing with respect thereto; or
except in the performance of her duties hereunder, remove or aid in the
removal of any such confidential information or any property or material
relating thereto from the Corporation.
10. Governing Law
This Agreement shall be construed and enforced in accordance with the laws
of the State of New Jersey.
11. Inventions
Employee shall promptly disclose to the Corporation any and all inventions.
improvements, machines, appliances, processes, products, or the like (all of
which are referred to herein as "inventions") which Employee may invent,
conceive, produce, or reduce to practice, either solely or jointly with others,
at any time, in furtherance or in the performance of her duties as set forth in
this Agreement.
Any and all such inventions which in any way relate to the products
manufactured, sold, or used by the Corporation, or to any methods, processes, or
apparatus used in connection with the production of such goods or materials, or
in either case which are or may be or may become capable of use in the business
of the Corporation, shall at all times and for all purposes be regarded as
acquired and held by Employee in a fiduciary capacity and solely for the benefit
of the Corporation.
With respect to all such inventions, Employee shall:
treat all information with respect thereto as confidential information
within the meaning of and subject to Article 9 of this Agreement;
keep complete and accurate records thereof which records shall be the
property of the Corporation;
execute any application for letters patent of the United States and of any
and all other countries covering such inventions, and give the Corporation, its
attorneys and counsel all reasonable and requested assistance in preparing such
application;
from time to time, upon the request and at the expense of the Corporation,
but without charge for services beyond the payments herein provided for, execute
all assignments or other instruments required to transfer and assign to the
Corporation (or as the Corporation may otherwise direct)) all inventions and all
patents and applications for patents covering such inventions or otherwise
required to protect the rights and interests of the Corporation;
testify in any proceedings or litigation as to all such inventions; and
in case the Corporation shall desire to keep secret any such invention, or
shall for any reason decide not to have letters patent applied for thereon,
refrain from applying for such letters patent thereon.
No termination of employment of the Employee by the Corporation or of this
Agreement shall release the Employee or her heirs or legal representatives from
complying with the foregoing obligations as to such inventions. To that extent,
the terms of this Article 11 shall survive this Agreement.
12. Entire Contract
This Agreement constitutes the entire understanding and agreement between
the Corporation and the Employee with regard to all matters referred to herein.
There are no other agreements, conditions or representations, oral or written,
express or implied, with regard thereto. This Agreement may be amended only in
writing signed by both parties.
13. Non-Waiver
A failure by either party to exercise a right under this Agreement, or a
partial or single exercise of that right, shall not constitute a waiver of that
or any other right.
14. Assignment
This Agreement shall not be assigned by Employee except that any benefits
which inure at any time to her estate or personal representative shall be
transferable as a matter of right to such entity or entities. The Corporation
shall have the right to transfer and assign this Agreement and its rights
hereunder in its entirety in its sole discretion and, upon doing so, all of the
rights and obligations of the Corporation hereunder shall thereafter inure and
apply to its assignees and successors on condition such succeeding entity
assumes in writing at the time of any such assignment all the obligations of
Corporation hereunder.
15. Enforceability
The invalidity or non-enforceability of any provision, term, or condition
hereof shall in no way effect the validity or enforceability of any other
provision or of this Agreement or of the Agreement in its entirety.
16. Non-Compete
In consideration of the stock options and other incentives awarded to me by
the company at anytime during employment, and should termination from employment
with Thermo-Mizer, or any subsidiary there of, occur for any reason, Employee
agrees to refrain, for a period of twelve (12) months, from selling, soliciting
or otherwise contacting customers of the Company or its subsidiaries, for the
purpose of competing with goods and services provided these customers by the
Company. Employee agrees not to divulge to any party or otherwise use trade
secrets, pricing policies, costs, designs and any other proprietary or sensitive
information accumulated during employment at Thermo-Mizer Environmental Corp or
its subsidiaries.
17. Headings
Headings in this Agreement are for the convenience of the parties hereto
only and shall not be used to interpret or construe its provisions.
18. Counterparts
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original of which together shall constitute one and the same
agreement.
19. Binding Effect
The provisions of this Agreement shall be binding upon and inure to the
benefit of both parties and their respective successors and assigns.
IN WITNESS WHEREOF, Corporation has, by its appropriate officers, signed
and sealed, and Employee has signed this Agreement.
THERMO-MIZER ENVIRONMENTAL CORPORATION
BY: _______________________
ATTEST:
SECRETARY
BY: ____________________
EMPLOYEE:
<PAGE>
EXHIBIT 10.29 FORM OF 5%CONVERTIBLE DEBENTURE ISSUED BY THE COMPANY ON OCTOBER
` 16, 1997 IN AGGREGARTE PRINCIPAL AMOUNT OF $300,000
<PAGE>
DEBENTURE
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY
NOT BE OFFERED OR SOLD IN THE UNITED STATES (AS DEFINED IN REGULATION S
UNDER THE ACT) OR TO, OR FOR THE ACCOUNT OR BENEFIT OF U.S. PERSONS (AS
DEFINED IN REGULATION S UNDER THE ACT) EXCEPT PURSUANT TO REGISTRATION
UNDER THE ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
ACT AND APPLICABLE STATE SECURITIES LAWS.
THE CONVERTIBLE DEBENTURES OF THERMO-MIZER ENVIRONMENTAL CORP. (THE
"COMPANY:") REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED PURSUANT
TO REGULATION S, PROMULGATED UNDER THE ACT, AND HAVE NOT BEEN
REGISTERED UNDER THE ACT OR ANY APPLICABLE STATE SECURITIES LAWS. THESE
SHARES MAY NOT BE OFFERED OR SOLD WITHIN ;THE UNITED STATES OR TO OR
FOR THE ACCOUNT OF A "U.S. PERSON" (AS THAT TERM IS DEFINED IN
REGULATION S) DURING THE PERIOD COMMENCING ON THE SALE OF THESE
SECURITIES AND ENDING ON THE FORTIETH (40TH) DAY FOLLOWING COMPLETION
OF THE REGULATION S OFFERING OF THE COMPANY PURSUANT TO WHICH THESE
SHARES HAVE BEEN ISSUED, WHICH DAY IS NOVEMBER 25, 1997 (THE
"RESTRICTED PERIOD"). THE CONVERTIBLE DEBENTURES REPRESENTED BY THIS
CERTIFICATE MAY FIRST BE CONVERTED INTO COMMON STOCK OF THE COMPANY ON
NOVEMBER 26, 1997. THE COMPANY WILL NOTIFY THE TRANSFER AGENT OF THE
DATE OF COMPLETION OF SUCH OFFERING AND OF THE EXPIRATION OF SUCH
RESTRICTED PERIOD.
No. OCT-1 US $
THERMO-MIZER ENVIRONMENTAL CORP.
5% CONVERTIBLE DEBENTURE DUE OCTOBER 16, 2000
THIS DEBENTURE is one of a duly authorized issue of Debentures of
Thermo-Mizer Environmental Corp., a corporation duly organized and existing
under the laws of Delaware (the "Company") designated as its 5% Convertible
Debenture Due October 16, 2000, in an aggregate principal amount not exceeding
Two Million Seven Hundred Fifty Thousand Dollars (U.S. $2,750,000).
FOR VALUE RECEIVED, the Company promises to pay to___________________,. the
registered holder hereof and its successors and assigns (the "Holder"), the
principal sum of Fifty Thousand
1
<PAGE>
Dollars (US $50,000) on (three years from the date hereof) (the "Maturity
Date"), and to pay interest on the principal sum outstanding, at the rate of 5%
per annum due and payable quarterly in arrears. Accrual of interest shall
commence on the date hereof and shall continue until payment in full of the
outstanding principal sum has been made or duly provided for. The interest so
payable will be paid to the person in whose name this Debenture (or one or more
predecessor Debentures) is registered on the records of the Company regarding
registration and transfers of the Debentures (the "Debenture Register");
provided, however, that the Company's obligation to a transferee of this
Debenture arises only if such transfer, sale or other disposition is made in
accordance with the terms and conditions of the Offshore Securities Subscription
Agreement dated as of October 16, 1997 between the Company and the Holder (the
"Subscription Agreement"). The principal of, and interest on, this Debenture are
payable in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts, at the
address last appearing on the Debenture Register of the Company as designated in
writing by the Holder hereof from time to time. The Company will pay the
outstanding principal of and all accrued and unpaid interest due upon this
Debenture on the Maturity Date, less any amounts required by law to be deducted
or withheld, to the Holder of this Debenture as of the tenth (10th) day prior to
the Maturity Date and addressed to such Holder at the last address appearing on
the Debenture Register. The forwarding of such check shall constitute a payment
of outstanding principal and interest hereunder and shall satisfy and discharge
the liability for principal and interest on this Debenture to the extent of the
sum represented by such check plus any amounts so deducted.
This Debenture is subject to the following additional provisions:
1. The Debentures are issuable in denominations of Fifty Thousand
Dollars (US$50,000) and integral multiples thereof. The Debentures are
exchangeable for an equal aggregate principal amount of Debentures of different
authorized denominations, as requested by the Holders surrendering the same but
not less than U.S. $25,000. No service charge will be made for such registration
or transfer or exchange.
2. The Company shall be entitled to withhold from all payments of
principal of, and interest on, this Debenture any amounts required to be
withheld under the applicable provisions of the United States income tax or
other applicable laws at the time of such payments.
3. This Debenture has been issued subject to investment representations
of the original purchaser hereof and may be transferred or exchanged in the U.S.
only in compliance with the Securities Act of 1933, as amended (the "Act") and
applicable state securities laws. Prior to due presentment for transfer of this
Debenture, the Company and any agent of the Company may treat the person in
whose name this Debenture is duly registered on the Company's Debenture Register
as the owner hereof for the purpose of receiving payment as herein provided and
for all other purposes, whether or not this Debenture be overdue, and neither
the Company nor any such agent shall be affected or bound by notice to the
contrary. Any holder of this Debenture, electing to n exercise the right of
conversion set forth in Section 4(a) hereof, in addition to the requirements set
forth in Section 4(a), is also required to give the Company (i) written
confirmation that it is not a U.S. Person and the
2
<PAGE>
Debenture is not being converted on behalf of a U.S. Person ("Notice of
Conversion") or (ii) an opinion of U.S. counsel to the effect that the Debenture
and shares of common stock issuable upon conversion thereof have been registered
under the 1933 Act or are exempt from such registration. In the event , either
(i) Notice of Conversion, or (ii) an opinion of counsel is not provided, the
Holder hereof will not be entitled to exercise the right to convert the
Debentures pursuant to Section 4(a) herein.
4. (a) The Holder of this Debenture is entitled, at its option, at any
time commencing 41 days after issue hereof to convert any or all of the original
principal amount of this Debenture into shares of common stock, $0.01 par value
per share, of the Company (the "Common Stock"), at a conversion price for each
share of Common Stock equal to Seventy Percent (70%) of the Market Price (as
defined below) of the Company's Common Stock. For purposes of this Section 4(a),
the "Market Price" shall be the lower of (a) the average closing bid price of
the Common Stock for the five (5) business days immediately preceding the
conversion date or (b) the average of the closing bid price of the Common Stock
for the five (5) business days immediately preceding the date of Subscription by
the Holder as reported by the National Association of Securities Dealers
Automated Quotation System ("NASDAQ"). Such conversion shall be effectuated by
surrendering the Debentures to be converted (with a copy, by facsimile or
courier, to the Company) to the Company with the form of conversion notice
attached hereto as Exhibit I, executed by the Holder of this Debenture
evidencing such Holder's intention to convert this Debenture or a specified
portion (as above provided) hereof, and accompanied by proper assignment hereof
in blank. Accrued but unpaid interest shall be subject to conversion. No
fractional shares or scrip representing fractions of shares will be issued on
conversion, but the number of shares issuable shall be rounded to the nearest
whole share, with the fraction paid in cash at the discretion of the Company.
The date on which notice of conversion is given shall be deemed to be the date
on which the Holder has delivered this Debenture, with the conversion notice
duly executed, to the Company or, if earlier, the date set forth in such notice
of conversion if the Debenture is received by the Company within five (5)
business days thereafter.
Delivery of the shares of Common Stock shall be made to the Holder within 5
business days of receipt of Notice of Conversion provided that the Holder has
submitted all necessary documents duly executed and in proper form required for
conversion.
(b) Notwithstanding the provisions of paragraph 4(a) hereof
including, but not limited to the prior delivery of the conversion notice
referred to therein, the Company is entitled, at its option, by written notice
to the Holder to redeem part or all of the Debentures 45 days after issue hereof
to the e x tent that conversion of any of the Debentures would result in the
issuance by the Company of common shares in excess of 19.99% of the total issued
common shares to any single holder of Debentures or "group" of holders (as such
term is used in Section 13 of the Securities Exchange Act of 1934) by paying to
the Holder thereof an amount equal to the product of (i) the Market Price, and
(ii) the higher number of shares of Common Stock that would be issuable for such
Debentures pursuant to the calculations in paragraph 4(a). Such payment shall
include accrued interest to such date, and shall be less any amounts required by
law to be deducted or withheld. Such
3
<PAGE>
payment shall be made by delivering immediately available funds in United States
Dollars by wire transfer to the Holder, or if no wiring instructions have been
provided to the Company, by cashier's or certified check to the last address of
Holder appearing on the Debenture Register, within 30 days of the date of the
Company's notice to the holder of the Company's intention to redeem all or part
of the Debentures. The wiring of such funds or the forwarding of such check
shall constitute a payment of principal and interest hereunder and shall
automatically satisfy and discharge the liability for principal and interest on
this Debenture to the extent of the sum represented by such wire or check plus
any amount so deducted.
5. No provision of this Debenture shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the principal of,
and interest on, this Debenture at the time, place, and rate, and in the coin
currency, herein prescribed.
6. The Company hereby expressly waives demand and presentment for
payment, notice of nonpayment, protest, notice of protest, notice of dishonor,
notice of acceleration or intent to accelerate, bringing of suit and diligence
in taking any action to collect amounts called for hereunder and shall be
directly and primarily liable for the payment of all sums owing and to be owing
hereon, regardless of and without any notice, diligence, act or omission as or
with respect to the collection of any amount called for hereunder.
7. The Company agrees to pay all costs and expenses, including
reasonable attorneys' fees, which may be incurred by the Holder in collecting
any amount due under this Debenture.
8. If one or more of the following described "Events of Default" shall
occur:
(a) The Company shall default in the payment of principal or interest on
this Debenture; or
(b) Any of the representations or warranties made by the Company herein, in
the Subscription Agreement, or in any certificate or financial or other written
statements heretofore or hereafter furnished by or on behalf of the Company in
connection with the execution and delivery of this Debenture or the Subscription
Agreement shall be false or misleading in any material respect at the time made;
or
(c) The Company shall fail to perform or observe, in any material respect,
any other covenant, term, provision, condition, agreement or obligation of the
Company under this Debenture and such failure shall continue uncured for a
period of seven (7) days after notice from the Holder of such failure; or
(d) The Company shall (1) become insolvent; (2) admit in writing its
liability to pay its debts generally as they mature; (3) make an assignment for
the benefit of creditors or commence proceedings for its dissolution; or (4)
apply for or 4
<PAGE>
consent to the appointment of a trustee, liquidator or receiver for its or
for a substantial part of its property or business, or
(e) A trustee, liquidator or receiver shall be appointed for the Company or
for a substantial part of its property or business without its consent and shall
not be discharged within thirty (30) days after such appointment; or
(f) Any governmental agency or any court of competent jurisdiction at the
instance of any governmental agency shall assume custody or control of the whole
or any substantial portion of the properties or assets of the Company and shall
not be dismissed within thirty (30) days thereafter; or
(g) Any money judgment, writ or warrant of attachment, or similar process
in excess of One Hundred Thousand ($100,000) Dollars in the aggregate shall be
entered or filed against the Company or any of its properties or other assets
and shall remain unpaid, unvacated, unbonded or unstayed for a period of fifteen
(15) days or in any event later than five (5) days prior to the date of any
proposed sale thereunder; or
(h) Bankruptcy, reorganization, insolvency or liquidation proceedings or
other proceedings for relief under any bankruptcy law or any law for the relief
of debtors shall be instituted by or against the Company and, if instituted
against the Company, shall not be dismissed within thirty (30) days after such
instruction of the Company shall by any action or answer approve of, consent to,
or acquiesce in any such proceedings or admit the material allegations of, or
default in answering a petition filed in any such proceeding; or
(i) The Company's Common Stock is no longer listed on Nasdaq Smallcap.
Then, or at any time thereafter, and in each and every such case, unless such
Event of Default shall have been waived in writing by the Holder (which waiver
shall not be deemed to be a waiver of any subsequent default) at the option of
the Holder and in the Holder's sole discretion, the Holder may consider this
Debenture immediately due and payable, without presentment, demand, protest or
notice of any kinds, all of which are hereby expressly waived, anything herein
or in any note or other instruments contained to the contrary notwithstanding,
and the Holder may immediately, and without expiration of any period of grace,
enforce any and all of the Holder's rights and remedies provided herein or any
other rights or remedies afforded by law.
9. This Debenture represents a general unsecured obligation of the
Company. No recourse shall be had for the payment of the principal of, or the
interest on, this Debenture, or for any claim based hereon, or otherwise in
respect hereof, against any incorporator, shareholder, officer or director, as
such, past, present or future, of the Company or any successor corporation,
whether by
5
<PAGE>
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issue hereof, expressly waived
and released.
10. The Holder of this Debenture, by acceptance hereof, agrees that
this Debenture is being acquired for investment and that such Holder will not
offer, sell or otherwise dispose of this Debenture or the Shares of Common Stock
issuable upon exercise thereof except under circumstances which will not result
in a violation of the Act or any applicable state Blue Sky law or similar laws
relating to the sale of securities.
11. As set forth herein, the Company shall use all reasonable efforts
to issue and deliver, within five (5) business days after the Holder has
fulfilled all conditions and submitted all necessary documents duly executed and
in proper form required for conversion (the "Deadline"), to the Escrow Agent,
such number of common shares issued free of a restrictive legend as Holder is
entitled subject to such conversion notice submitted pursuant to calculations
derived from the formula outlined in Paragraph 4(a) of the Form of Debenture.
The Company understands that a delay in the issuance of the
Shares of Common Stock beyond the Deadline could result in economic loss to the
Holder. As compensation to the Holder for such loss, the Company agrees to pay
as liquidated damages to the Holder for late issuance of Shares upon conversion
in accordance with the following schedule (where "No Business Days Late" is
defined as the number of business days beyond five (5) business days) from the
date of receipt by the Company or Escrow Agent of a Notice of Conversion of all
necessary documentation duly executed and in proper form required for
conversion, including the original Debenture to be converted, all in accordance
with the debenture and Subscription Agreement.
No. Business Days Late: Liquidated Damages per $100,000
- --------------------------------------------------------------------------------
1 $500.00
2 $1,000.00
3 $1,500.00
4 $2,000.00
6
<PAGE>
No. Business Days Late: Liquidated Damages per $100,000
- --------------------------------------------------------------------------------
5 $2,500.00
6 $3,000.00
7 $3,500.00
8 $4,000.00
9 $4,500.00
10 $5,000.00
11 $5,000.00 plus $1,000 each
Business Day Late
Beyond 10 Days
The Company shall pay the Holder any liquidated damages
incurred under this Section by check upon the earlier to occur of (i) issuance
of the Shares to the Holder or (ii) each monthly anniversary of the receipt by
the Company of such Holder's Notice of Conversion.
Notwithstanding the foregoing, nothing herein shall limit the
Holder's right to pursue actual damages for the Company's failure to issue and
deliver shares of Common Stock to the Holder in accordance with the terms of the
Debenture.
12. In case any provision of this Debenture is held by a court of
competent jurisdiction to be excessive in scope or otherwise invalid or
unenforceable, such provision shall be adjusted rather than voided, if possible,
so that it is enforceable to the maximum extent possible, and the validity and
enforceability of the remaining provisions of this Debenture will not in any way
be affected or impaired thereby.
13. This Debenture and the agreements referred to in this Debenture
constitute the full and entire understanding and agreement between the Company
and the Holder with respect to the subject hereof. Neither this Debenture nor
any term hereof may be amended, waived, discharged or terminated other than by a
written instrument signed by the Company and the Holder.
14. This Debenture shall be governed by and construed in accordance
with the laws of New Jersey.
7
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by an officer thereunto duly authorized.
Dated:
THERMO-MIZER ENVIRONMENTAL CORP.
By:
Title:
8
<PAGE>
EXHIBIT I
NOTICE OF CONVERSION
(To be Executed by the Registered Holder in order to Convert the Debenture)
The undersigned hereby irrevocably elects to convert $_____________ of the
above Debenture No. ___ into Shares of Common Stock of Thermo-Mizer
Environmental Corp. (the "Company") according to the conditions set forth in
such Debenture, as of the date written below.
The undersigned represents that it is not a U.S. Person as defined in
Regulation S promulgated under the Securities Act of 1933, as amended, and is
not converting the Debenture on behalf of any U.S. Person and the
representations contained int he Subscription Agreement are true.
Date of Conversion 1
Applicable Conversion Price
Signature
[Name]
Address:
thermomi\regs\debentur41.14
- --------
1 This original Debenture and Notice of Conversion must be received by the
Company by the fifth business date following the Date of Conversion.
9
<PAGE>
<PAGE>
EXHIBIT 10.30 CONVERTIBLE NOTE PURCHASE AGREEMENT BETWEEN THE COMPANY AND
NORWOOD VENTURE CORP. DATED OCTOBER 16, 1997, WITH FORM OF
CONVERTIBLE PROMISSORY NOTE EXECUTEDD BY THE COMPANY IN FAVOR OF
NORWOOD VENTURE CORP. DATED OCTOBER 16, 1997
<PAGE>
CONVERTIBLE NOTE PURCHASE AGREEMENT
Section 1. Purchase and Sale of Note. On the date hereof, Norwood
Venture Corp. ("NVC") agrees to purchase from Thermo-Mizer Environmental Corp.,
a Delaware corporation (the "Company"), and the Company agrees to sell to NVC,
for $500,000, the Company's 12% Convertible Note due November 1, 2002 in the
principal amount of $500,000 (the "Note"). The Note is to be secured by (a) the
pledge of certain Collateral described in a General Security Agreement (the
"Company Security Agreement") executed by the Company in favor of NVC and (b)
the Guaranty (the "Guaranty") of Laminaire Corporation, a New Jersey corporation
all of the outstanding capital stock of which is owned by the Company. The
Guaranty is to be secured by the pledge of certain Collateral described in a
General Security Agreement (the "Laminaire Security Agreement"; the Company
Security Agreement and the Laminaire Security Agreement being hereinafter
referred to collectively as the "Security Agreements") executed by Laminaire in
favor of NVC. The form of the Note is attached hereto as Exhibit A. The purchase
and sale of the Note is subject to the agreements, and based on the
representations and warranties, set forth in this Agreement.
Section 2. Representations. The Company represents and warrants as follows:
(a) Each of the Company and Laminaire is a corporation duly organized,
validly existing in good standing under the laws of the state of its
incorporation and has all requisite corporate power and authority to carry on
its business as now conducted, to execute, deliver and perform its obligations
under the Closing Documents (defined below) executed by and to carry out the
transactions contemplated by the Closing Documents (the "Transactions"). In this
Agreement, "Closing Documents" means this Agreement, the Note, the Guaranty, the
General Security Agreements and the UCC-1 financing statements (the "Financing
Statements") being executed by the Company and/or Laminaire in favor of NVC.
(b) The execution, delivery and performance by the Company and
Laminaire of the Closing Documents executed by the Company and Laminaire
respectively have been duly authorized by the Company and Laminaire, do not
necessitate the obtaining of any consent, the making of any filing (except the
filing of the Financing Statements and the filing contemplated by Section 8 of
this Agreement) or the satisfaction of any similar requirement and will not
contravene the certificate of incorporation or by-laws of the Company or
Laminaire (true copies of which have been furnished to NVC), or any permit,
agreement, instrument, law, regulation or court determination affecting the
Company or Laminaire or create any encumbrance on the Company's or Laminaire's
assets which does not secure the obligations of the Company on the Note or the
obligations of Laminaire under the Guaranty.
(c) The Closing Documents are the Company's and Laminaire's respective
legal, valid and binding obligations enforceable in accordance with their terms.
(d) There are no pending or threatened investigations or legal
proceedings which question
<PAGE>
the Transactions or which would, if adversely determined, have a material
adverse effect on the Company or any entity which the Company directly or
indirectly controls (any entity now or hereafter so controlled being hereinafter
referred to as a "Subsidiary").
(e) The Company has duly reserved for issuance to NVC the shares of its
$.001 par value Common Stock ("Common Stock") into which the Note is convertible
and any such shares issued on such conversion will, on issuance, be fully paid
and non-assessable.
(f) On the date hereof and after the purchase of the Note, no event has
or will have occurred which with the giving of notice or lapse of time or both
would constitute one or more of the events specified in Section 5 (a "Default").
(g) On or before the date hereof, pursuant to the terms of documents
(the "Laminaire and Financing Documents") submitted to NVC herewith and listed
on Exhibit B, (i) the Company has acquired all the outstanding capital stock of
Laminaire and (ii) received not less than $2,000,000 from the issuance during
the months of August, 1997, September, 1997 and October, 1997 of notes
convertible to shares of its Common Stock (the "Other Notes").
(h) Except for the Transactions and as set forth in the Laminaire and
Financing Documents, (i) no event has occurred and no circumstance exists which
the Company is required on the date hereof, or which the Company will be
required hereafter with the lapse of time, to disclose in filings required to be
made with the Securities and Exchange Commission (the "SEC"), other than events
or circumstances which the Company has already disclosed in such filings (true
copies of which have been given by the Company to NVC) and the financial
information which will be filed with the SEC promptly after the execution of
this Agreement in substantially the form submitted to NVC herewith and (ii)
since March 31, 1997, (A) nothing has occurred or failed to occur which
occurrence or failure has, or can reasonably be anticipated to have, a material
adverse effect upon the condition, assets or prospects of the Company or its
Subsidiaries (together, the Company's "Financial Condition") except for losses
in the ordinary course of business and (B) neither the Company nor any
Subsidiary has incurred any indebtedness for borrowed money other than the Other
Notes or the indebtedness to Garay LLC described in the Laminaire and Financing
Documents or $200,000 borrowed from Frank Pinella.
Section 3. Affirmative Covenants. The Company will:
(a) Comply with all laws, regulations, court determinations and
permits, and comply with the terms of all agreements, the failure to comply with
which could have a material adverse effect on the Company or its Financial
Condition.
(b) Maintain a system of accounting and keep such books and records as
shall be necessary to provide (a) the financial statements which the Company is,
on the date hereof, required to provide pursuant to Federal securities laws and
(b) the financial statements required
- 2 -
<PAGE>
by this Agreement. The Company shall provide NVC with such financial statements
whether or not the Company continues to be required to furnish such statements
pursuant to Federal securities laws.
(c) Use the proceeds from the sale of the Note to NVC for the partial
payment of the purchase price of all the outstanding capital stock of Laminaire,
the repayment of outstanding indebtedness of Laminaire to CoreStates Bank, the
working capital of the Company and Laminaire and to pay, on the date hereof, (a)
the reasonable fees of NVC's counsel (in the amount of $10,000) for the
negotiation and preparation of the Closing Documents and (b) the $50,000 fee
which is payable by the Company to Monetary Advancement International Inc.
("MAI") for arranging the purchase and sale of the Note. The Company authorizes
NVC, and NVC agrees, to withhold $60,000 of the purchase price and to pay such
fees directly to NVC's counsel and MAI from the amount so withheld.
(d) Maintain such insurance as is required by law, as is customary for
companies engaged in similar businesses or as may be reasonably requested by
NVC.
(e) Provide (i) prompt written notice of any Default and (ii) promptly,
such other information concerning its business as NVC shall reasonably request.
(f) Permit NVC or its representatives to (i) visit and inspect any
properties in which the Company might have an interest, (ii) inspect and make
extracts from the Company's books and records, including but not limited to
management letters prepared by the Company's independent accountants and (iii)
discuss with the Company's principal officers and its independent accountants
the Company's Financial Condition.
(g) Prior to the date on which the Note is paid in full, engage only in
the areas of business in which the Company and Laminaire are now engaged.
(h) Cause each of its Subsidiaries to comply with Sections 3 and 4 (not
including clauses (i), (j) and (k) of this Section 3) as if it were the Company
referred to therein.
(i) Continue to reserve and keep available for issuance on conversion
of the Note the number of shares of Common Stock and other securities into which
such Note is convertible.
(j) Maintain the Company's listing on the NASDAQ Small Cap Market.
(k) Furnish to the Company before the end of each week a detailed
report (in the form previously furnished to NVC) of its receivables and the age
thereof as of the end of the preceding week and maintain (a) total receivables
in an amount at least equal to 175% of the outstanding principal amount of the
Note and (b) receivables which have been outstanding less than 90 days in an
amount equal to 100% of the outstanding principal amount of the Note. The
Company shall, to the extent necessary to comply with this clause (k), promptly
prepay the Note.
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<PAGE>
Section 4. Negative Covenants. The Company will not:
(a) Lend money or extend credit, or make or permit to be outstanding
loans or advances by it, to any individual or entity ("Person").
(b) Declare, pay or make any dividend or other distribution on any
shares of its capital stock or redeem, retire, purchase or acquire, directly or
indirectly, any shares of its capital stock now or hereafter outstanding or
return any capital to its stockholders.
(c) Merge or consolidate with any other business entity, liquidate or
wind up its business, or sell, lease, transfer or otherwise dispose of, all or
substantially all of its assets.
(d) Suffer or permit any diversion for personal benefit by its
officers, directors or shareholders of opportunities in the areas of business in
which the Company is at the time engaged.
Section 5. Defaults. Any of the following events shall cause the Note
and accrued and unpaid interest thereon to become immediately due and payable
(in which case the Company shall pay all expenses, including attorneys' fees,
incurred by NVC in the collection thereof):
(a) The Company shall fail to make, when due, any payment of principal
and/or interest in accordance with the terms of the Note or Laminaire shall fail
to make, when due, any payment required by the Guaranty.
(b) Any representation or warranty made by the Company or Laminaire in
any Closing Document or in any document delivered pursuant thereto shall prove
to have been incorrect or misleading in any material respect when made.
(c) The Company shall cease to maintain its corporate existence, fail
to perform any covenant in Section 4 or fail for a period of 30 days to perform
any covenant in Section 3 or the Company or Laminaire shall fail to perform any
other covenant (not including the covenant by the Company to pay principal and
interest on the Note or the covenant of Laminaire to make payments under the
Guaranty) contained in any Closing Document.
(d) The Company or Laminaire shall fail to pay when due and payable,
the principal of or interest on any indebtedness for borrowed money other than
the indebtedness represented by the Note.
(e) The Company or Laminaire shall default in the payment when due, or
in the performance or observance, of any other obligation or condition of any
Closing Document or any other material contract.
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<PAGE>
(f) The Company or Laminaire shall commence a voluntary case under
Federal bankruptcy laws, file a petition seeking to take advantage of any other
laws relating to bankruptcy, insolvency, reorganization, winding up or
composition or adjustment of debts, fail to contest in a timely and appropriate
manner, or fail to have discharged within 60 days, any proceedings against it
under such laws, admit in writing its inability to pay, or generally not be
paying, its debts as they become due, or make a general assignment for the
benefit of creditors.
(g) Any Closing Document shall be held, or shall be claimed by any
person or entity which is a party thereto (other than NVC), to be invalid or not
to have full force and effect.
Section 6. Termination. The provisions of Sections 4(a), (b), (c) and
(k) shall terminate on such date as the Note ceases to be outstanding whether as
a result of the payment thereof in full or the conversion thereof in full. The
other provisions of Section 4 and the provisions of Section 3 shall terminate
thereafter at such time as NVC shall cease to own any capital stock of the
Company acquired by it on conversion of the Note.
Section 7. Representation of NVC. NVC represents and warrants to the
Company that it is acquiring the Note for its own account for investment and not
with a view to the resale or distribution thereof or of the securities into
which the Note is convertible, absent appropriate registration of such
securities under applicable securities laws.
Section 8 Registration.
Section 8.1 Best Efforts; Liquidated Damages. The Company shall use its
best efforts to (a) effect, at the earliest possible date, the registration,
under the Securities Act of 1933 (the "Securities Act"), of all securities into
which the Note is convertible, (b) keep such registration effective for such
period or periods of time (not to exceed two years) as to permit NVC to dispose
of all of such securities in the public market therefor, (c) furnish to NVC such
numbers of copies of such current prospectus and other documents as NVC may
reasonably require in order to facilitate the disposition of such securities,
(d) register and qualify such securities under such other securities or "Blue
Sky" laws of such jurisdictions as shall be reasonably requested by NVC, (e)
notify NVC immediately of the happening of any event as a result of which any
such prospectus includes an untrue statement of material fact or omits to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing,
(f) update and or correct any such prospectus as necessary and (g) list such
securities with any national market or securities exchange on which such
securities are then listed. Such registration shall be effected by the filing of
one or more registration statements on Form S-3 (or, if such form is
unavailable, on such other form as is necessary to obtain similar registration
and permit free disposition of such securities by NVC to the public). If such
registration is not effective by the 90th day following the date hereof, or if
following such 90th day the effectiveness of such registration is suspended or a
current prospectus meeting the
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<PAGE>
requirements of Section 10 of the Securities Act is not available for delivery
by NVC, the Company shall pay NVC as liquidated damages promptly at the end of
each thirty day period thereafter an amount equal to $10,000 multiplied by the
percentage of the days during such thirty day period that such registration was
not in effect or the effectiveness thereof was suspended or such prospectus was
unavailable.
Section 8.2 Expenses. The costs and expenses (other than underwriting
discounts or commissions) of all registrations and qualifications under the
Securities Act, and of all other actions, that the Company is required to take
or effect pursuant to this Agreement shall be paid by the Company (including,
without limitation, all registration and filing fees, printing expenses, costs
of special audits incident to or required by any such registration or
qualification, and fees and disbursements of counsel for the Company and the
reasonable fees and disbursements of one counsel for NVC and any other holders
of shares being registered pursuant to the same registration statement).
Section 8.3 Indemnification. (a) In the event of a registration of
securities required by this Agreement, the Company shall:
(1) indemnify and hold harmless NVC and each Person, if any,
who controls NVC within the meaning of the Securities Act, against any
losses, claims, damages, expenses (including attorneys' fees), or
liabilities (or actions in respect thereof) under the Securities Act or
otherwise, that arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in any such
registration statement, any preliminary prospectus or final prospectus,
or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or any other violation of law by the Company
with respect thereto, and
(2) reimburse NVC and each such controlling Person for any
legal or other expenses reasonably incurred by NVC or such controlling
Person in connection with defending against any such loss, claim,
damage, expense, liability or action (together,"Losses");
provided, however, that the Company shall not be liable to NVC or to any Person
who controls NVC within the meaning to the Securities Act in any such case to
the extent that any such Loss arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in any such
registration statement, preliminary prospectus or final prospectus, or any
amendment or supplement thereto, in reliance upon and in conformity with written
information furnished by NVC or such controlling Person expressly for use in the
preparation thereof.
(b) In the event of a registration of securities pursuant to this
Agreement, NVC shall
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<PAGE>
(1) indemnify and hold harmless the Company, each of its
directors, each of its officers who have signed any such registration
statement, and any Person who controls the Company within the meaning
of the Securities Act, against any Losses to which the Company or any
such director, officer or controlling Person may become subject, under
the Securities Act or otherwise, insofar as such Losses arise out of or
are based upon any untrue or alleged untrue statement of any material
fact contained in any such registration statement, preliminary
prospectus or final prospectus, or any amendment or supplement thereto,
or arise out of or are based upon the omission or the alleged omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any other
violation of law by NVC with respect thereto, in each case to the
extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in such
registration statement, preliminary prospectus or final prospectus, or
amendment or supplement, in reliance upon and in conformity with
written information furnished by NVC for use in such disclosure
documents, and
(2) reimburse the Company or any such director, officer or
controlling Person for any legal or other expenses reasonably incurred
by it or him in connection with defending against any such Loss.
(c) Promptly after receipt by an indemnified party under this Section
8.3 of notice of the commencement of any action which may involve a Loss
indemnified hereunder, such indemnified party shall, if a claim in respect
thereof is to be made against an indemnifying party under this Section 8.3,
notify the indemnifying party of the commencement thereof, but the omission so
to notify the indemnifying party shall not relieve it from any liability that it
may have to any indemnified party except, and then only, to the extent such
indemnifying party is prejudiced by such omission.
(d) In case any Action is brought against any indemnified party, and it
notifies an indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate in and, to the extent that it may wish,
jointly with any other indemnifying party similarly notified, assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party. In the
event the indemnifying party gives notice to the indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under this Section 8.3 for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof subsequent to the date of such notice.
Section 8.4. Assignability. NVC's rights to cause the Company to
register securities pursuant to this Agreement may be assigned by NVC to a
transferee or assignee. Within a reasonable time after such transfer, NVC shall
notify the Company of the name and address of any such transferee or assignee,
and the securities with respect to which such registration rights are being
assigned.
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<PAGE>
Section 8.5 Other Registrations. Except as set forth on Exhibit C,
until the registration required by this Agreement has been effective for a
period of 120 days, the Company will not register any other securities for sale,
grant to any Person the right to have the Company effect such a registration of
securities or sell any Common Stock or any securities similar thereto at a price
which is less than the price at which the obligations represented by the Note
are convertible to shares of Common Stock. The Company shall not permit the
holders of any securities of the Company to include any of their securities in
any registration statement filed by the Company pursuant to this Agreement
unless such inclusion will not reduce the amount of the securities registered or
sold by NVC thereunder.
Section 9. Notices. All notices and other communications under this
Agreement shall (a) be in writing, (b) be sent by registered or certified mail,
postage prepaid, return receipt requested, delivered by hand or sent by
facsimile machine transmission (with facsimile machine verification and hard
copy received by one of the other methods permitted under this Section 9) and
(c) be given at the following respective addresses:
(i) if to the Company, to it at:
528 Oritan Avenue
Ridgefield, New Jersey 07657
Facsimile No.: (201) 941-5821
with a copy to:
Steven W. Schuster, Esq.
McLaughlin & Stern, LLP
260 Madison Avenue
New York, New York 10016
Facsimile No.: (212) 448-0066
(ii) if to NVC, to it at:
Suite 1607
1430 Broadway
New York, New York 10018
Facsimile No.: (212) 869-5331
with a copy to: DeForest & Duer, 90 Broad Street, New York, New York 10004,
Attn.: Arthur A. Lane, Facsimile No.: (212) 425-7593.
The address of any party may be changed by such party by a
notice to the other party specifically captioned "Notice of Change of Address
Pursuant to Section 9". All notices
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<PAGE>
and other communications shall be effective (i) if given by mail, on the third
business day after such communication is deposited in the mail, addressed as
above provided, (ii) if given by hand delivery, when left at the address of the
addressee as above provided, and (iii) if given by facsimile machine
transmission, upon facsimile machine verification of receipt, except that
notices of a change of address shall not be effective until received. No other
method of giving notice is hereby precluded.
Section 10. Waiver of Jury Trial. The Company waives trial by jury in any
judicial proceeding arising out of or involving the Transactions.
Section 11. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date specified below.
Dated: October 16, 1997
THERMO-MIZER ENVIRONMENTAL CORP.
By:
NORWOOD VENTURE CORP.
By:
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<PAGE>
EXHIBIT A
FORM OF NOTE
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE TRANSFERRED IN VIOLATION OF SUCH ACT OR SUCH LAWS, OR THE RULES
AND REGULATIONS THEREUNDER.
THERMO-MIZER ENVIRONMENTAL CORP.
12% Convertible Note
$500,000 New York, New York
October 16, l997
FOR VALUE RECEIVED, the undersigned, THERMO-MIZER
ENVIRONMENTAL CORP., a Delaware corporation (the "Company"), hereby promises to
pay to the order of NORWOOD VENTURE CORP. at its office located at 1430
Broadway, New York, New York 10018, the principal sum of FIVE HUNDRED THOUSAND
AND NO/100 DOLLARS ($500,000) in lawful money of the United States of America on
or before November 1, 2002 and to pay interest on the unpaid principal amount
hereof from the date hereof until such principal amount is paid in full, at the
rate of 12% per annum, which rate shall be calculated on the basis of a 360-day
year and actual days elapsed. Overdue principal and (to the extent permitted by
law) overdue interest shall bear interest at the rate of 14 percent per annum,
calculated in the same manner, payable on demand. Nothing herein shall at any
time require the Company to pay interest at a rate in excess of the maximum rate
permitted by applicable law.
Interest shall be payable on the last business day of each
calendar quarter, commencing December 31, 1997 until the entire principal amount
hereof is paid in full and on each other date on which a payment of principal is
made. The Company shall pay $41,666.66 of the principal amount of this Note on
the last business day of each March, June, September and December, commencing
December, 1999, until this Note is paid in full.
This Note is the Note (the "Note") referred to in the
Convertible Note Purchase Agreement dated October 16, l997 (the "Purchase
Agreement") among the Company and Norwood Venture Corp. The Purchase Agreement
provides, among other things, for the acceleration of the maturity of this Note
upon the happening of certain events as set forth in the Purchase Agreement. The
Note is secured by Collateral pursuant to a General Security
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<PAGE>
Agreement executed by the Company and a Guaranty (the "Guaranty") executed by
Laminaire Corporation, a New Jersey corporation. The Guaranty is secured by
Collateral pursuant to a General Security Agreement executed by Laminaire.
The holder of this Note shall have the right at any time, to
convert any part or all of the obligations represented by this Note into shares
of the $.001 par value Common Stock ("Common Stock") of the Company. The number
of shares of Common Stock issued on conversion shall equal the result obtained
by dividing the dollar amount of such obligations being converted by 70% of the
average of the closing price of the Common Stock for the five trading days
preceding either (a) the date of conversion or (b) the date hereof, whichever
average closing price is less.
The Company shall have the right at any time or from time to time, on
15 days' prior written notice, to prepay this Note in whole or in part, without
premium or penalty. In the event of any such prepayment or any other payment of
part or all of the principal amount of this Note prior to its final scheduled
maturity the Company shall simultaneously issue or cause to be transferred to
the holder of this Note either (a) the number of freely tradeable shares equal
to the excess (such excess being hereinafter referred to as the "Number of
Shares") of (i) the number of shares of Common stock which would have been
issuable if an amount of obligations represented by the Note equal to the amount
prepaid had been converted on such date over (ii) the number of shares of Common
Stock which could be purchased with such amount if such amount were used to
purchase Common Stock at the reported closing price (the"Last Price") of Common
Stock on the day preceding the date on which such payment of the Note was made
or (b) the product of the Number of Shares multiplied by the Last Price. Any
reduction of the obligations of the Company hereunder by any payment on account
thereof or any conversion of this Note shall first reduce the interest accrued
and unpaid hereon, with any balance reducing the unpaid principal.
The holder of this Note shall exercise such right of
conversion by written notification signed by the holder that such holder elects
to convert all or part of the obligations represented by this Note, designating
the amount of the obligations represented hereby which are to be so converted
and the names and addresses of the individuals or entities ("Persons") to whom
the shares are to be issued. The Company shall, as soon as practicable
thereafter, issue and deliver to such holder's designee or designees
certificates evidencing the shares of Common Stock to which such holder is
entitled. Conversion shall be deemed to have been made as of the date of such
notification and the Person or Persons entitled to receive the Common Stock
issuable upon such conversion shall be treated for all purposes as the holders
thereof on such date.
The number and type of securities issuable on conversion of
this Note shall be appropriately changed and adjusted so that in all events
(whether the Company subdivides, reclassifies or combines or declares or pays a
dividend (other than a cash dividend) on its Common Stock or merges or
consolidates with any other corporation, reorganizes or transfers all
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<PAGE>
or substantially all of the assets of the Company or liquidates or dissolves or
is subject to any other change which might otherwise affect the securities into
which this Note is convertible) the holder shall continue to be entitled to
receive upon conversion of any portion of the obligations represented by this
Note shares of the Company's capital stock and other securities and
consideration equal in economic value to, and at an equivalent discount to the
market value of, the shares it would have been entitled to receive on such
conversion if such event had not occurred, except that the holder of this Note
shall, in addition, be entitled to receive any additional benefit to which it
would have been entitled as a holder of shares of Common Stock if this Note had
been converted into Common Stock immediately prior to such event.
The Company shall give written notice to the record holder of
this Note at such holder's address appearing on the Company's records of any of
the events which would cause a change or adjustment pursuant to the preceding
paragraph and of any proposed payment of any dividend or other distribution to
the holders of Common Stock, which notice shall be given at least twenty days
prior to the earlier of (a) the date on which such event is to occur or such
payment to be made and (b) the record date, if any, with respect thereto. Such
notice shall specify any such record date, the date on which such event is to
take place and such facts as shall be reasonably necessary to indicate the
effect of such event on the number, kind or class of shares or other securities
or consideration that shall be deliverable or purchasable upon the occurrence of
such event or upon conversion of this Note. As to any change or adjustment to be
made pursuant to the preceding paragraph, the determination of the Company's
independent certified public accountants shall be determinative absent manifest
error.
Presentment, demand, protest and notice of dishonor are hereby
waived by the Company.
This Note shall be construed in accordance with and governed
by the laws of the State of New York.
THERMO-MIZER ENVIRONMENTAL CORP.
By:
Name:
Title: President
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<PAGE>
EXHIBIT B
LIST OF (A) EVENTS WHICH WILL BE REQUIRED TO BE DISCLOSED PURSUANT TO
SECURITIES LAWS, (B) MATERIAL ADVERSE EVENTS, (C) LAMINAIRE AND FINANCING
DOCUMENTS AND (D) BORROWINGS.
<PAGE>
EXHIBIT C
EXCEPTIONS TO SECTION 8.5.
None
<PAGE>
To: Monetary Advancement International Inc.
Time Value Resources LLC.
In consideration of the introduction by Time Value Resources LLC
("TVR") and Monetary Advancement International Inc. ("MAI") of Norwood Venture
Corp. ("NVC") to Thermo-Mizer Environmental Corp. ("Thermo-Mizer"), NVC hereby
agrees to pay to each of TVR and MAI, promptly as, if and when realized, 15% of
any profit which NVC realizes on the sale of any securities received by it on
conversion or prepayment of the 12% Convertible Note of Thermo-Mizer due
November 1, 2002 issued to NVC on the date hereof in the principal amount of
$500,000, provided that the profit to Norwood on such sale equals or exceeds an
annualized rate of 60%.
Dated: October 16, 1997
NORWOOD VENTURE CORP.
By:
<PAGE>
EXHIBIT 10.31 SECURITY AGREEMENT EXECUTED BY THE COMPANY IN FAVOR OF
NORWOOD VENTURE CORP. DATED OCTOBER 16, 1997.
<PAGE>
GENERAL SECURITY AGREEMENT
October 16, 1997
The undersigned (herein, whether one or more in number, referred to as
Debtor and which, if two or more in number, shall be jointly and severally
bound) with an address as it appears with the signature below, hereby agree(s)
in favor of Norwood Venture Corp. (herein referred to as Secured Party) as
follows:
1. In consideration of one or more loans, advances, or other financial
accommodations at any time before, at or after date made or extended by Secured
Party to Debtor, directly or indirectly, as principal, guarantor or otherwise,
at the sole discretion of Secured Party in each instance, including the purchase
of the 12% Convertible Note due November 1, 2002 issued by Debtor to the Secured
Party pursuant to that certain Convertible Note Purchase Agreement dated the
date hereof (the "Purchase Agreement"), Debtor hereby grants to Secured Party a
security interest in, a continuing lien upon and a right of set-off against, and
Debtor hereby assigns to Secured Party, the Collateral described in Paragraph 2,
to secure the payment, performance and observance of all indebtedness,
obligations, liabilities and agreements of any kind of Debtor to Secured Party,
now existing or hereafter arising, direct or indirect (including participations
or any interest of Secured Party in obligations of Debtor to others), acquired
outright, conditionally, or as collateral security from another, absolute or
contingent, joint or several, secured or unsecured, due or not, contractual or
tortious, liquidated or unliquidated, arising by operation of law or otherwise,
and of all loan agreements, documents and instruments evidencing any of the
foregoing obligations or under which any of the foregoing obligations may have
been issued, created, assumed or guaranteed (all of the foregoing being herein
referred to as the "Obligations"). Notwithstanding anything else in this
Agreement to the contrary, the security interest created hereby shall, as to
Collateral other than Accounts (as defined in Schedule A), be subordinate to the
security interest created on the date hereof in favor of Garay LLC and Charles
Garay.
2. The Collateral is described as follows and/or on Schedule A, if any,
annexed hereto as part hereof and on any separate schedule at any time furnished
by Debtor to Secured Party (all of which are hereby deemed part of this Security
Agreement), which Collateral includes all attachments, accessions and equipment
now or hereafter affixed to the Collateral or used in connection therewith,
substitutions and replacements thereof, and (unless the description of the
Collateral expressly excludes after acquired (Collateral) all items of the
Collateral both now owned or existing and hereafter acquired, created or
arising, and any and all products and proceeds thereof (including, without
limitation, any claims of Debtor against third parties, for loss or damage to or
destruction of any or all of the Collateral):
SEE ATTACHED SCHEDULE A ANNEXED HERETO AND MADE A PART HEREOF.
together with any and all monies, securities, drafts, notes, items and other
property of the Debtor and the proceeds thereof, now or hereafter held or
received by or in transit to, Secured Party from or for the Debtor, whether for
safekeeping, custody, pledge, transmission, collection or otherwise, and any and
all deposits (general or special), balances, sums, proceeds, and credits of the
Debtor with, and any and all claims of the Debtor against, Secured Party, at any
time existing. In the event that the Collateral includes inventory, Debtor also
grants to Secured Party a security interest in, and the collateral shall
include, all labels and other devices, names, or marks affixed or to be affixed
to inventory for purposes of selling or of identifying the same or the seller or
manufacturer thereof and all right, title and interest of Debtor therein and
thereto.
3. Debtor warrants, represents and covenants that: (a) the chief and
other places of business of Debtor, the books and records relating to the
Collateral and the Collateral are located at the addresses set forth below and
Debtor will not change any of the same without prior written notice to and
consent of Secured Party; (b) the Collateral is and will be used in Debtor's
business and not for personal, family, household or farming use; (c) the
Collateral is now, and at all times will be, owned by Debtor free and clear of
all liens, security interests, claims and encumbrances except for those which
are shown on Schedule B attached hereto; (d) Debtor will not assign, sell,
mortgage, lease, transfer, pledge, grant a security interest in or lien upon,
encumber or otherwise dispose of or abandon, nor will Debtor suffer or permit
any of the same to occur with respect to, any part or all of the Collateral,
without prior written consent of Secured Party, except for the sale from time to
time in the ordinary course of business of Debtor of such items of Collateral as
may constitute part of the business inventory of Debtor, and the inclusion of
"proceeds" of the Collateral under the security interest granted herein, shall
not be deemed a consent by Secured Party to any sale or other disposition of any
part or all of the Collateral except as expressly permitted herein; (e) Debtor
has made, and will continue to make payment or deposit or otherwise provide for
the payment, when due, of all taxes, assessments or contributions required by
law which have been or may be levied or assessed against the Debtor, whether
with respect to any of the Collateral, to any wages or salaries paid by Debtor,
or otherwise, and will deliver to Secured Party, on demand, certificates or
other evidence satisfactory to Secured Party attesting thereto; (f) Debtor will
use the Collateral for lawful purposes only, with all reasonable care and
caution; (g) Debtor will keep the Collateral in reasonably good repair at
Debtor's own cost and expense; (h) Secured Party shall at all times have free
access to and right of inspection of the Collateral and any records pertaining
thereto (and the right to make extracts from and to receive from Debtor
originals or true copies of such records and any papers and instruments relating
to any or all of the Collateral and to receive from Debtor originals or true
copies of such records and any papers and instruments relating to any or all of
the Collateral upon request therefor) and Debtor hereby grants to Secured Party
a security interest in all such records, papers and instruments to secure the
payment, performance and observance of the Obligations; (i) the Collateral is
now and shall remain personal property and Debtor will not permit any of the
Collateral to become a part of or affixed to real property without prior written
notice to Secured Party and without first making all arrangements, and
delivering, or causing to be delivered, to Secured Party all instruments and
documents, including, without limitation, waivers and subordination agreements
by any landlords or mortgagees, requested by and satisfactory to Secured Party
to preserve and protect the primary security interest granted herein against all
persons; (j) Debtor will, at its expense, perform all acts and execute all
documents reasonably requested by Secured party at any time to evidence,
perfect, maintain and enforce Secured Party's primary security interest in the
Collateral or otherwise in furtherance of the provisions of this Security
Agreement; (k) Debtor assumes all responsibility and liability arising from the
use of the Collateral; (l) upon request of Secured Party, at any time and from
time to time, Debtor shall, at its sole cost and expense, execute and deliver to
Secured Party one or more financing statements pursuant to the Uniform
Commercial Code ("UCC") and one or more applications for certificate of title
and any other papers, documents or instruments requested by Secured Party in
connection with this Security Agreement, and Debtor hereby authorizes Secured
Party to execute and file at any time
<PAGE>
or times, one or more financing statements with respect to all or any part of
the Collateral, signed only by the Secured Party; (m) in its discretion, Secured
Party may, only after a Default (as hereinafter defined) has occurred, in its
name or Debtor's or otherwise, notify any account debtor or obligor of any
account, contract, instrument, chattel paper or general intangible included in
the Collateral to make payment to Secured Party; (n) Secured Party may, in its
reasonable discretion at any time after a Default demand, sue for, collect or
receive any money or property at any time payable or receivable on account of or
in exchange for, or make any compromise or settlement deemed desirable by
Secured Party with respect to, any of the Collateral, and/or extend the time of
payment, arrange for payment in installments, or otherwise modify the terms of,
or release, any of the collateral or the Obligations, all without consent by
Debtor and without otherwise discharging the Obligations, the Collateral or the
security interest granted herein; (o) Secured Party may, in its reasonable
discretion, after a Default, for the account and expense of Debtor, pay any
amount or do any act required of Debtor hereunder or requested by Secured Party
to preserve, protect, maintain or enforce the Obligations, the Collateral or the
primary security interest granted herein, and which Debtor fails to do or pay,
and any such payment shall be deemed an advance by Secured Party to Debtor and
shall be payable on demand together with interest at the highest rate then
payable on any of the Obligations; (p) Debtor will promptly pay Secured Party
for any and all sums, costs and expenses which Secured Party may reasonably pay
or reasonably incur pursuant to the provisions of this Security Agreement or in
defending, protecting or enforcing the security interest granted herein or in
enforcing payment of the Obligations or otherwise in connection with the
provisions hereof, including but not limited to all court costs, collection
charges, reasonable travel, and reasonable attorney's fees (not less than 15% of
the outstanding Obligations where permitted by applicable law), all of which,
together with interest at a rate equal to the highest rate then payable on any
of the Obligations, shall be part of the Obligations and be payable on demand;
(q) whether or not a Default has occurred, Secured Party, in its discretion, may
transfer to or register in the name of Secured Party or its nominee all or any
of the Collateral consisting of securities, and whether or not so transferred or
registered, Secured Party shall be entitled to receive and retain all income,
dividends (including stock dividends and rights to subscribe) and other
distributions thereon as part of the Collateral and to exchange any or all such
Collateral upon the reorganization, recapitalization, or readjustment of any
entity issuing such securities, and to exercise all rights with respect thereto
as if it was the absolute owner thereof, provided that until the occurrence of a
Default and whether or not the Collateral is transferred to or registered in the
name of Secured Party or its nominee, Debtor alone shall be entitled to exercise
the right to vote such Collateral, and if the Collateral has been so transferred
or registered, Secured Party shall take such action as Debtor may reasonably
request to enable Debtor to exercise the right to vote such Collateral or any
part thereof for any purpose which is not inconsistent with the terms of this
Security Agreement or the Obligations or which would not have an adverse effect
on the value of the Collateral or any part thereof; (r) after a Default any of
the proceeds of the Collateral received by Debtor shall not be commingled with
other property of Debtor, but shall be segregated, held by the Debtor in trust
as the exclusive property of Secured Party, and Debtor will immediately deliver
to Secured Party the identical checks, monies, or other proceeds of Collateral
received, duly endorsed in blank where appropriate to effectuate the provisions
hereof, the same to be held by Secured party as additional Collateral hereunder
or, at secured Party's option, to be applied to payment of any of the
Obligations, whether or not due and in any order; and (s) at any time Secured
Party may assign, transfer and deliver to any transferee of any of the
Obligations, any or all of the Collateral, whereupon Secured Party shall be
fully discharged from all responsibility and the transferee shall be vested with
all powers and rights of Secured Party hereunder with respect thereto, but
Secured Party shall retain all rights and powers with respect to any Collateral
not assigned, transferred or delivered.
4. The occurrence of any one of more "Defaults" or "Events of Default",
as defined in the Purchase Agreement shall constitute an event of default
("Default") by Debtor under this Security Agreement.
5. Upon the occurrence of any Default and at any time thereafter,
Secured Party may, without demand upon Debtor, declare any or all Obligations of
Debtor immediately due and payable and Secured Party shall have the following
rights and remedies (to the extent permitted by applicable law) in addition to
all rights and remedies of a secured party under the UCC, or of Secured Party
under the Obligations, all such rights and remedies being cumulative, not
exclusive and enforceable alternatively, successively or concurrently; (a)
Secured Party may at any time and from time to time, with or without judicial
process or the aid and assistance of others, enter upon any premises in which
any of the Collateral may be located and, without resistance or interference by
Debtor, take possession of the Collateral; and/or dispose of any part or all of
the Collateral on any premises of Debtor; and/or require Debtor to assemble and
make available to Secured Party at the expense of Debtor any part or all of the
Collateral at any place and time designated by Secured Party which is reasonably
convenient to both parties; and/or remove any part or all of the Collateral from
any premises on which any part may be located for the purpose of effecting sale
or other disposition thereof (and if any of the Collateral consists of motor
vehicles, Secured Party may use Debtor's license plates); and/or sell, resell,
lease, assign and deliver, grant options for or otherwise dispose of any or all
of the Collateral in its then condition or following any commercially reasonable
preparation or processing, at public or private sale or proceedings or
otherwise, by one or more contracts, in one or more parcels, at the same or
different times, with or without having the Collateral at the place of sale or
other disposition, for cash and/or credit, and upon any terms, at such place(s)
and time(s) and to such persons, firms or corporations as Secured Party deems
best, all without demand for performance or any notice or advertisement
whatsoever except that where an applicable statute requires reasonable notice of
sale or other disposition Debtor hereby agrees that five days notice by ordinary
mail, postage prepaid, to any address of Debtor set forth in this Security
Agreement of the place and time of any public sale or of the time after which
any private sale or other intended disposition is to be made, shall be deemed
reasonable notice thereof. If any of the Collateral is sold by Secured Party
upon credit or for future delivery, Secured Party shall not be liable for the
failure of the purchaser to pay for same and in such event Secured Party may
resell such Collateral. Secured Party may buy any part or all of the Collateral
at any public sale and if any part or all of the Collateral is of a type
customarily sold in a recognized market or is of the type which is the subject
of widely distributed standard price quotations Secured Party may buy at private
sale and may make payment therefor by any means. Secured Party may apply the
cash proceeds actually received from any sale or other disposition to the
reasonable expenses of retaking, holding, preparing for sale, selling, leasing
and the like, to reasonably attorney's fees (not exceeding 15% of the
outstanding Obligations) and all reasonable travel and other expenses which may
be incurred by Secured Party in attempting to collect the Obligations or enforce
this Security Agreement or in the prosecution or defense of any action or
proceeding related to the subject matter of this Security Agreement; and then to
the Obligations in such order and as to principal or interest as Secured Party
may desire; and Debtor shall remain liable and will pay Secured Party on demand
any deficiency remaining, together with interest thereon at a rate equal to the
highest rate then payable on the Obligations and the balance of any expenses
unpaid, with any surplus to be paid to Debtor, subject to any duty of Secured
Party imposed by law to the holder of any subordinate security interest in the
Collateral. Debtor recognizes that the Secured Party may be unable to effect a
public sale of all or a part of the Collateral consisting of securities by
reason of certain prohibitions contained in the Securities
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Act of 1933, but may be compelled to resort to one or more private sales to a
restricted group of purchasers who will be obliged to agree, among other things,
to acquire such securities for their own account, for investment and not with a
view to the distribution or resale thereof. Debtor agrees that any such private
sales may be at prices and other terms less favorable to the seller than if sold
at public sales and that such private sales shall be deemed to have been made in
a commercially reasonable manner. Secured Party has no obligation to delay sale
of any such securities for the period to time necessary to permit the issuer of
such securities, even if such issuer would agree, to register such securities
for public sale under the Securities Act of 1933; (b) Secured Party may
appropriate, set off and apply to the payment of any or all of the Obligations,
any and all Collateral in or coming into the possession of Secured Party or its
agents and belonging or owing to Debtor, without notice to Debtor, and in such
manner as Secured Party may in its discretion determine; (c) Secured Party may
exercise all voting rights with respect to all or any of the Collateral
consisting of securities and may exercise all powers with respect thereto as if
an absolute owner thereof, none of which shall adversely affect the security
interests granted herein or the Obligations.
6. To effectuate the terms and provisions hereof, Debtor hereby
designates and appoints Secured Party and its designees or agents as
attorney-in-fact of Debtor, irrevocably and with power of substitution, with
authority, after a Default, to receive, open and dispose of all mail addressed
to Debtor, to notify the Post Office authorities to change the address for
delivery of mail addressed to Debtor to such address as Secured Party may
designate; to endorse the name of Debtor on any notes, acceptances, checks,
drafts, money orders, instruments or other evidences of payment or proceeds of
the Collateral that may come into Secured Party's possession; to sign the name
of Debtor on any invoices, documents, drafts against and notices to account
debtors or obligors of Debtor, assignments and requests for verification of
accounts; to execute proofs of claim and loss; to execute any endorsements,
assignments, or other instruments of conveyance or transfer; to adjust and
compromise any claims under insurance policies; to execute releases; and to do
all other acts and things (before as well as after a Default) necessary and
advisable in the reasonable discretion of Secured Party to carry out and enforce
this Security Agreement. All lawful and reasonable acts of said attorney or
designee are hereby ratified and approved and, except for willful misconduct or
gross negligence, said attorney or designee shall not be liable for any acts of
commission or omission, nor for any error of judgment or mistake of fact or law.
This power of attorney being coupled with an interest is irrevocable while any
of the Obligations shall remain unpaid.
7. Secured Party shall have the duty to exercise reasonable care in the
custody and preservation of any securities in its possession included in the
Collateral, which duty shall be fully satisfied if Secured Party maintains safe
custody of any such securities, and, with respect to any maturities, calls,
conversions, exchanges, redemption, offers, tenders or similar matters relating
to any of such securities (herein called "events"), in the exercise of its sole
discretion (a) Secured Party endeavors to take such action with respect to any
of the events as Debtor may reasonably and specifically request in writing in
sufficient time for such action to be evaluated and taken or (b) if Secured
Party determines that the action requested might adversely affect the value of
the securities as collateral, the collection of the Obligations secured, or
otherwise prejudice the interests of Secured Party, Secured Party gives
reasonable notice to Debtor that any such requested action will not be taken and
if Secured Party makes such determination or if Debtor fails to make such timely
request, Secured Party takes such other action as it deems advisable in the
circumstances. Secured Party shall have no further obligation to ascertain the
occurrence of, or to notify Debtor with respect to, any events and shall not be
deemed to assume any such obligation as a result of the establishment by Secured
Party of any internal procedures with respect to any securities in its
possession, nor shall Secured Party be deemed to assume any responsibility for,
or obligation or duty with respect to, any part or all of the Collateral, of any
nature or kind, or any matter or proceedings arising out of or relating thereto,
including, without limitation, any obligation or duty to take any action to
collect, preserve or protect its or Debtor's rights in the Collateral or against
any prior parties thereto, but the same shall be at Debtor's sole risk at all
times. If the Collateral hereunder includes "stock" as defined in Regulation U
of the Federal Reserve Board, it is hereby agreed such "stock" shall not secure
Obligations which are "purpose credits", as that term is used in Regulation U,
and (i) are secured solely by collateral other than "stock" or (ii) are
unsecured. Secured Party's prior recourse to any part or all of the Collateral
shall not constitute a condition of any demand, suit or proceeding for payment
or collection of the Obligations. No act, failure or delay by Secured Party
shall constitute a waiver of its rights and remedies hereunder or otherwise. No
single or partial waiver by the Secured Party of any Default or right or remedy
which it may have shall operate as a waiver of any other Default, right or
remedy or of the same Default, right or remedy on a future occasion. Debtor
hereby waives presentment, notice of dishonor and protest of all instruments
included in or evidencing any of the Obligations or the Collateral, and any and
all other notices and demands whatsoever (except as expressly provided herein).
Debtor agrees to pay, on demand, all reasonable out-of-pocket expenses incurred
by Secured Party in connection with the enforcement of this Security Agreement,
the Obligations, and the transactions contemplated hereunder and thereunder,
including but not limited to the reasonable fees and expenses of counsel to
Secured Party. In the event of any litigation, with respect to any matter
connected with this Security Agreement, the Obligations or the Collateral,
Debtor hereby waives the right to a trial by jury and all defenses, including
any defense based on any Statute of Limitations, any claim of laches, rights of
setoff and the rights to interpose counterclaims of any nature other than
mandatory counterclaims. Debtor hereby irrevocably consents to the jurisdiction
of the courts of the State of New York and of any Federal Court located in such
State in connection with any action or proceeding arising out of or relating to
the Obligations, this Security Agreement or the Collateral, or any document or
instrument delivered with respect to any of the Obligations. Debtor hereby
waives personal service of any summons, complaint or other process in connection
with any such action or proceeding and agrees that the service thereof may be
made by certified or registered mail directed to Debtor at any place of business
set forth below, or at such other address as Debtor may designate by written
notification by certified or registered mail directed to and received by Secured
Party at its office set forth in the financing statements filed hereunder (or if
no such financing statements have been filed, at the office of Secured Party at
which is located the officer in direct supervision of the within security
interest). The Debtor so served shall appear or answer to such summons,
complaint or other process within thirty days after the mailing thereof. Should
the Debtor so served fail to appear or answer within said thirty-day period,
such Debtor shall be deemed in default and judgment may be entered by Secured
Party against such Debtor for the amount or such other relief as may be demanded
in any summons, complaint or other process so served. In the alternative, in its
discretion Secured Party may effect service upon Debtor in any other form or
manner permitted by law. All terms used herein shall have the meanings as
defined in the UCC, unless the context otherwise requires. No provision hereof
shall be modified, altered or limited except by a written instrument expressly
referring to this Security Agreement and to such provision, and executed by the
party to be charged. The execution and delivery of this Security Agreement has
been authorized by the Board(s) of Directors of Debtor and by any necessary vote
or consent of stockholders of Debtor (if a corporation). This Security Agreement
and all Obligations shall be binding upon the heirs executors, administrators,
successors, or assigns of Debtor, and all, together with the rights and remedies
of Secured Party hereunder, inure to the
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benefit of Secured Party, its successors, endorsees and assigns. This Security
Agreement and the Obligations shall be governed in all respects by the laws of
the State of New York. If any term of this Security Agreement shall be held to
be invalid, illegal or unenforceable, the validity of all other terms hereof
shall in no way be affected thereby. Secured Party is authorized to annex hereto
any schedules referred to herein. Debtor acknowledges receipt of a copy of this
Security Agreement.
IN WITNESS WHEREOF, the undersigned has executed or caused this
Security Agreement to be executed in the State of New York, the date first above
set forth.
(CORPORATE SEAL) THERMO-MIZER ENVIRONMENTAL CORP.
By
(Name)
(Title)
Trade Name (if any)
Chief Place of Business: All location(s) of Collateral:
(Also set forth the Section,
Block and Lot where there is located
any of the Collateral which is or may
be affixed to realty.)
Other Places of Business:
Location of Books and Records Name of record owner of real estate
Relating to the Collateral: where any of the Collateral is or may
be affixed to realty:
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<PAGE>
Schedule A
Collateral shall mean and include all of Debtor's right, title and
interest in and to:
1. All Accounts;
2. All Inventory;
3. All Equipment; and
4. All Proceeds and products of any or all of the foregoing, to the
extent not otherwise included.
For purposes of this Schedule A, the following terms shall have the following
meanings:
"Accounts" shall mean all "accounts", as such term is defined
in Section 9-106 of the Uniform Commercial Code as in effect on the
date hereof in the State of New York (the "Code"), in which Debtor now
or hereafter has any right, title or interest.
"Equipment" shall mean all "equipment", as such term is
defined in Section 9-109 of the Code, in which Debtor now or hereafter
has any right, title or interest.
"Inventory" shall mean all "inventory", as such term is
defined in Section 9-109 of the Code, in which Debtor now or hereafter
has any right, title or interest.
"Proceeds" shall mean "proceeds", as such term is defined in
Section 9-306 of the Code including, but not limited to (i) any and all
proceeds of any insurance, indemnity, warranty or guaranty payable to
Debtor from time to time with respect to any of the Collateral, (ii)
any and all payments (in any form whatsoever) made or due and payable
to Debtor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of
the Collateral by any governmental body, authority, bureau or agency
(or any person, corporation, agency, authority or other entity acting
under color of governmental authority) and (iii) any and all other
amounts from time to time paid or payable under or in connection with
any of the Collateral.
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EXHIBIT 10.32 SECURITY AGREEMENT EXECUTED BYLAMINAIRE CORPORATION IN FAVOR OF
NORWOOD VENTURE CORP. DATED OCTOBER 16, 1997
<PAGE>
GENERAL SECURITY AGREEMENT
October 16, 1997
The undersigned (herein, whether one or more in number, referred to as
Debtor and which, if two or more in number, shall be jointly and severally
bound) with an address as it appears with the signature below, hereby agree(s)
in favor of Norwood Venture Corp. (herein referred to as Secured Party) as
follows:
1. In consideration of one or more loans, advances, or other financial
accommodations at any time before, at or after date made or extended by Secured
Party to Debtor or Thermo-Mizer Environmental Corp., a Delaware corporation
which owns all of the issued and outstanding capital stock of Debtor (the
"Company"), directly or indirectly, as principal, guarantor or otherwise, at the
sole discretion of Secured Party in each instance, including the purchase, at
par, by the Secured Party of the Company's 12% Convertible Note due November 1,
2002 in the principal amount of $500,000 (the "Note") pursuant to that certain
Convertible Note Purchase Agreement dated the date hereof ( the "Purchase
Agreement"), part of the proceeds from which purchase are being transferred by
the Company to Debtor, and in order to secure Debtor's obligations to Secured
Party under the Guaranty of the Note executed and delivered by Debtor to Secured
Party on the date hereof, Debtor hereby grants to Secured Party a security
interest in, a continuing lien upon and a right of set-off against, and Debtor
hereby assigns to Secured Party, the Collateral described in Paragraph 2, to
secure the payment, performance and observance of all indebtedness, obligations,
liabilities and agreements of any kind of Debtor to Secured Party, now existing
or hereafter arising, direct or indirect (including participations or any
interest of Secured Party in obligations of Debtor to others), acquired
outright, conditionally, or as collateral security from another, absolute or
contingent, joint or several, secured or unsecured, due or not, contractual or
tortious, liquidated or unliquidated, arising by operation of law or otherwise,
and of all loan agreements, documents and instruments evidencing any of the
foregoing obligations or under which any of the foregoing obligations may have
been issued, created, assumed or guaranteed (all of the foregoing being herein
referred to as the "Obligations"). Notwithstanding anything else in this
Agreement to the contrary, the security interest created hereby shall be
subordinate to the security interest created on the date hereof in favor of
Garay LLC and Charles Garay.
2. The Collateral is described as follows and/or on Schedule A, if any,
annexed hereto as part hereof and on any separate schedule at any time furnished
by Debtor to Secured Party (all of which are hereby deemed part of this Security
Agreement), which Collateral includes all attachments, accessions and equipment
now or hereafter affixed to the Collateral or used in connection therewith,
substitutions and replacements thereof, and (unless the description of the
Collateral expressly excludes after acquired (Collateral) all items of the
Collateral both now owned or existing and hereafter acquired, created or
arising, and any and all products and proceeds thereof (including, without
limitation, any claims of Debtor against third parties, for loss or damage to or
destruction of any or all of the Collateral):
SEE ATTACHED SCHEDULE A ANNEXED HERETO AND MADE A PART HEREOF.
together with any and all monies, securities, drafts, notes, items and other
property of the Debtor and the proceeds thereof, now or hereafter held or
received by or in transit to, Secured Party from or for the Debtor, whether for
safekeeping, custody, pledge, transmission, collection or otherwise, and any and
all deposits (general or special), balances, sums, proceeds, and credits of the
Debtor with, and any and all claims of the Debtor against, Secured Party, at any
time existing. In the event that the Collateral includes inventory, Debtor also
grants to Secured Party a security interest in, and the collateral shall
include, all labels and other devices, names, or marks affixed or to be affixed
to inventory for purposes of selling or of identifying the same or the seller or
manufacturer thereof and all right, title and interest of Debtor therein and
thereto.
3. Debtor warrants, represents and covenants that: (a) the chief and
other places of business of Debtor, the books and records relating to the
Collateral and the Collateral are located at the addresses set forth below and
Debtor will not change any of the same without prior written notice to and
consent of Secured Party; (b) the Collateral is and will be used in Debtor's
business and not for personal, family, household or farming use; (c) the
Collateral is now, and at all times will be, owned by Debtor free and clear of
all liens, security interests, claims and encumbrances except for those which
are shown on Schedule B attached hereto; (d) Debtor will not assign, sell,
mortgage, lease, transfer, pledge, grant a security interest in or lien upon,
encumber or otherwise dispose of or abandon, nor will Debtor suffer or permit
any of the same to occur with respect to, any part or all of the Collateral,
without prior written consent of Secured Party, except for the sale from time to
time in the ordinary course of business of Debtor of such items of Collateral as
may constitute part of the business inventory of Debtor, and the inclusion of
"proceeds" of the Collateral under the security interest granted herein, shall
not be deemed a consent by Secured Party to any sale or other disposition of any
part or all of the Collateral except as expressly permitted herein; (e) Debtor
has made, and will continue to make payment or deposit or otherwise provide for
the payment, when due, of all taxes, assessments or contributions required by
law which have been or may be levied or assessed against the Debtor, whether
with respect to any of the Collateral, to any wages or salaries paid by Debtor,
or otherwise, and will deliver to Secured Party, on demand, certificates or
other evidence satisfactory to Secured Party attesting thereto; (f) Debtor will
use the Collateral for lawful purposes only, with all reasonable care and
caution; (g) Debtor will keep the Collateral in reasonably good repair at
Debtor's own cost and expense; (h) Secured Party shall at all times have free
access to and right of inspection of the Collateral and any records pertaining
thereto (and the right to make extracts from and to receive from Debtor
originals or true copies of such records and any papers and instruments relating
to any or all of the Collateral and to receive from Debtor originals or true
copies of such records and any papers and instruments relating to any or all of
the Collateral upon request therefor) and Debtor hereby grants to Secured Party
a security interest in all such records, papers and instruments to secure the
payment, performance and observance of the Obligations; (i) the Collateral is
now and shall remain personal property and Debtor will not permit any of the
Collateral to become a part of or affixed to real property without prior written
notice to Secured Party and without first making all arrangements, and
delivering, or causing to be delivered, to Secured Party all instruments and
documents, including, without limitation, waivers and subordination agreements
by any landlords or mortgagees, requested by and satisfactory to Secured Party
to preserve and protect the primary security interest granted herein against all
persons; (j) Debtor will, at its expense, perform all acts and execute all
documents reasonably requested by Secured party at any time to evidence,
perfect, maintain and enforce Secured Party's primary security interest in the
Collateral or otherwise in furtherance of the provisions of this Security
Agreement; (k) Debtor assumes all responsibility and liability arising from the
use of the Collateral; (l) upon request of Secured Party, at any time
<PAGE>
and from time to time, Debtor shall, at its sole cost and expense, execute and
deliver to Secured Party one or more financing statements pursuant to the
Uniform Commercial Code ("UCC") and one or more applications for certificate of
title and any other papers, documents or instruments requested by Secured Party
in connection with this Security Agreement, and Debtor hereby authorizes Secured
Party to execute and file at any time or times, one or more financing statements
with respect to all or any part of the Collateral, signed only by the Secured
Party; (m) in its discretion, Secured Party may, only after a Default (as
hereinafter defined) has occurred, in its name or Debtor's or otherwise, notify
any account debtor or obligor of any account, contract, instrument, chattel
paper or general intangible included in the Collateral to make payment to
Secured Party; (n) Secured Party may, in its reasonable discretion at any time
after a Default demand, sue for, collect or receive any money or property at any
time payable or receivable on account of or in exchange for, or make any
compromise or settlement deemed desirable by Secured Party with respect to, any
of the Collateral, and/or extend the time of payment, arrange for payment in
installments, or otherwise modify the terms of, or release, any of the
collateral or the Obligations, all without consent by Debtor and without
otherwise discharging the Obligations, the Collateral or the security interest
granted herein; (o) Secured Party may, in its reasonable discretion, after a
Default, for the account and expense of Debtor, pay any amount or do any act
required of Debtor hereunder or requested by Secured Party to preserve, protect,
maintain or enforce the Obligations, the Collateral or the primary security
interest granted herein, and which Debtor fails to do or pay, and any such
payment shall be deemed an advance by Secured Party to Debtor and shall be
payable on demand together with interest at the highest rate then payable on any
of the Obligations; (p) Debtor will promptly pay Secured Party for any and all
sums, costs and expenses which Secured Party may reasonably pay or reasonably
incur pursuant to the provisions of this Security Agreement or in defending,
protecting or enforcing the security interest granted herein or in enforcing
payment of the Obligations or otherwise in connection with the provisions
hereof, including but not limited to all court costs, collection charges,
reasonable travel, and reasonable attorney's fees (not less than 15% of the
outstanding Obligations where permitted by applicable law), all of which,
together with interest at a rate equal to the highest rate then payable on any
of the Obligations, shall be part of the Obligations and be payable on demand;
(q) whether or not a Default has occurred, Secured Party, in its discretion, may
transfer to or register in the name of Secured Party or its nominee all or any
of the Collateral consisting of securities, and whether or not so transferred or
registered, Secured Party shall be entitled to receive and retain all income,
dividends (including stock dividends and rights to subscribe) and other
distributions thereon as part of the Collateral and to exchange any or all such
Collateral upon the reorganization, recapitalization, or readjustment of any
entity issuing such securities, and to exercise all rights with respect thereto
as if it was the absolute owner thereof, provided that until the occurrence of a
Default and whether or not the Collateral is transferred to or registered in the
name of Secured Party or its nominee, Debtor alone shall be entitled to exercise
the right to vote such Collateral, and if the Collateral has been so transferred
or registered, Secured Party shall take such action as Debtor may reasonably
request to enable Debtor to exercise the right to vote such Collateral or any
part thereof for any purpose which is not inconsistent with the terms of this
Security Agreement or the Obligations or which would not have an adverse effect
on the value of the Collateral or any part thereof; (r) after a Default any of
the proceeds of the Collateral received by Debtor shall not be commingled with
other property of Debtor, but shall be segregated, held by the Debtor in trust
as the exclusive property of Secured Party, and Debtor will immediately deliver
to Secured Party the identical checks, monies, or other proceeds of Collateral
received, duly endorsed in blank where appropriate to effectuate the provisions
hereof, the same to be held by Secured party as additional Collateral hereunder
or, at secured Party's option, to be applied to payment of any of the
Obligations, whether or not due and in any order; and (s) at any time Secured
Party may assign, transfer and deliver to any transferee of any of the
Obligations, any or all of the Collateral, whereupon Secured Party shall be
fully discharged from all responsibility and the transferee shall be vested with
all powers and rights of Secured Party hereunder with respect thereto, but
Secured Party shall retain all rights and powers with respect to any Collateral
not assigned, transferred or delivered.
4. The occurrence of any one of more "Defaults" or "Events of Default",
as defined in the Purchase Agreement shall constitute an event of default
("Default") by Debtor under this Security Agreement.
5. Upon the occurrence of any Default and at any time thereafter,
Secured Party may, without demand upon Debtor, declare any or all Obligations of
Debtor immediately due and payable and Secured Party shall have the following
rights and remedies (to the extent permitted by applicable law) in addition to
all rights and remedies of a secured party under the UCC, or of Secured Party
under the Obligations, all such rights and remedies being cumulative, not
exclusive and enforceable alternatively, successively or concurrently; (a)
Secured Party may at any time and from time to time, with or without judicial
process or the aid and assistance of others, enter upon any premises in which
any of the Collateral may be located and, without resistance or interference by
Debtor, take possession of the Collateral; and/or dispose of any part or all of
the Collateral on any premises of Debtor; and/or require Debtor to assemble and
make available to Secured Party at the expense of Debtor any part or all of the
Collateral at any place and time designated by Secured Party which is reasonably
convenient to both parties; and/or remove any part or all of the Collateral from
any premises on which any part may be located for the purpose of effecting sale
or other disposition thereof (and if any of the Collateral consists of motor
vehicles, Secured Party may use Debtor's license plates); and/or sell, resell,
lease, assign and deliver, grant options for or otherwise dispose of any or all
of the Collateral in its then condition or following any commercially reasonable
preparation or processing, at public or private sale or proceedings or
otherwise, by one or more contracts, in one or more parcels, at the same or
different times, with or without having the Collateral at the place of sale or
other disposition, for cash and/or credit, and upon any terms, at such place(s)
and time(s) and to such persons, firms or corporations as Secured Party deems
best, all without demand for performance or any notice or advertisement
whatsoever except that where an applicable statute requires reasonable notice of
sale or other disposition Debtor hereby agrees that five days notice by ordinary
mail, postage prepaid, to any address of Debtor set forth in this Security
Agreement of the place and time of any public sale or of the time after which
any private sale or other intended disposition is to be made, shall be deemed
reasonable notice thereof. If any of the Collateral is sold by Secured Party
upon credit or for future delivery, Secured Party shall not be liable for the
failure of the purchaser to pay for same and in such event Secured Party may
resell such Collateral. Secured Party may buy any part or all of the Collateral
at any public sale and if any part or all of the Collateral is of a type
customarily sold in a recognized market or is of the type which is the subject
of widely distributed standard price quotations Secured Party may buy at private
sale and may make payment therefor by any means. Secured Party may apply the
cash proceeds actually received from any sale or other disposition to the
reasonable expenses of retaking, holding, preparing for sale, selling, leasing
and the like, to reasonably attorney's fees (not exceeding 15% of the
outstanding Obligations) and all reasonable travel and other expenses which may
be incurred by Secured Party in attempting to collect the Obligations or enforce
this Security Agreement or in the prosecution or defense of any action or
proceeding related to the subject matter of this Security Agreement; and then to
the Obligations in such order and as to principal or interest as Secured Party
may desire; and Debtor shall remain liable and will pay Secured Party on demand
any deficiency remaining, together with interest thereon at a rate equal to the
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highest rate then payable on the Obligations and the balance of any expenses
unpaid, with any surplus to be paid to Debtor, subject to any duty of Secured
Party imposed by law to the holder of any subordinate security interest in the
Collateral. Debtor recognizes that the Secured Party may be unable to effect a
public sale of all or a part of the Collateral consisting of securities by
reason of certain prohibitions contained in the Securities Act of 1933, but may
be compelled to resort to one or more private sales to a restricted group of
purchasers who will be obliged to agree, among other things, to acquire such
securities for their own account, for investment and not with a view to the
distribution or resale thereof. Debtor agrees that any such private sales may be
at prices and other terms less favorable to the seller than if sold at public
sales and that such private sales shall be deemed to have been made in a
commercially reasonable manner. Secured Party has no obligation to delay sale of
any such securities for the period to time necessary to permit the issuer of
such securities, even if such issuer would agree, to register such securities
for public sale under the Securities Act of 1933; (b) Secured Party may
appropriate, set off and apply to the payment of any or all of the Obligations,
any and all Collateral in or coming into the possession of Secured Party or its
agents and belonging or owing to Debtor, without notice to Debtor, and in such
manner as Secured Party may in its discretion determine; (c) Secured Party may
exercise all voting rights with respect to all or any of the Collateral
consisting of securities and may exercise all powers with respect thereto as if
an absolute owner thereof, none of which shall adversely affect the security
interests granted herein or the Obligations.
6. To effectuate the terms and provisions hereof, Debtor hereby
designates and appoints Secured Party and its designees or agents as
attorney-in-fact of Debtor, irrevocably and with power of substitution, with
authority, after a Default, to receive, open and dispose of all mail addressed
to Debtor, to notify the Post Office authorities to change the address for
delivery of mail addressed to Debtor to such address as Secured Party may
designate; to endorse the name of Debtor on any notes, acceptances, checks,
drafts, money orders, instruments or other evidences of payment or proceeds of
the Collateral that may come into Secured Party's possession; to sign the name
of Debtor on any invoices, documents, drafts against and notices to account
debtors or obligors of Debtor, assignments and requests for verification of
accounts; to execute proofs of claim and loss; to execute any endorsements,
assignments, or other instruments of conveyance or transfer; to adjust and
compromise any claims under insurance policies; to execute releases; and to do
all other acts and things (before as well as after a Default) necessary and
advisable in the reasonable discretion of Secured Party to carry out and enforce
this Security Agreement. All lawful and reasonable acts of said attorney or
designee are hereby ratified and approved and, except for willful misconduct or
gross negligence, said attorney or designee shall not be liable for any acts of
commission or omission, nor for any error of judgment or mistake of fact or law.
This power of attorney being coupled with an interest is irrevocable while any
of the Obligations shall remain unpaid.
7. Secured Party shall have the duty to exercise reasonable care in the
custody and preservation of any securities in its possession included in the
Collateral, which duty shall be fully satisfied if Secured Party maintains safe
custody of any such securities, and, with respect to any maturities, calls,
conversions, exchanges, redemption, offers, tenders or similar matters relating
to any of such securities (herein called "events"), in the exercise of its sole
discretion (a) Secured Party endeavors to take such action with respect to any
of the events as Debtor may reasonably and specifically request in writing in
sufficient time for such action to be evaluated and taken or (b) if Secured
Party determines that the action requested might adversely affect the value of
the securities as collateral, the collection of the Obligations secured, or
otherwise prejudice the interests of Secured Party, Secured Party gives
reasonable notice to Debtor that any such requested action will not be taken and
if Secured Party makes such determination or if Debtor fails to make such timely
request, Secured Party takes such other action as it deems advisable in the
circumstances. Secured Party shall have no further obligation to ascertain the
occurrence of, or to notify Debtor with respect to, any events and shall not be
deemed to assume any such obligation as a result of the establishment by Secured
Party of any internal procedures with respect to any securities in its
possession, nor shall Secured Party be deemed to assume any responsibility for,
or obligation or duty with respect to, any part or all of the Collateral, of any
nature or kind, or any matter or proceedings arising out of or relating thereto,
including, without limitation, any obligation or duty to take any action to
collect, preserve or protect its or Debtor's rights in the Collateral or against
any prior parties thereto, but the same shall be at Debtor's sole risk at all
times. If the Collateral hereunder includes "stock" as defined in Regulation U
of the Federal Reserve Board, it is hereby agreed such "stock" shall not secure
Obligations which are "purpose credits", as that term is used in Regulation U,
and (i) are secured solely by collateral other than "stock" or (ii) are
unsecured. Secured Party's prior recourse to any part or all of the Collateral
shall not constitute a condition of any demand, suit or proceeding for payment
or collection of the Obligations. No act, failure or delay by Secured Party
shall constitute a waiver of its rights and remedies hereunder or otherwise. No
single or partial waiver by the Secured Party of any Default or right or remedy
which it may have shall operate as a waiver of any other Default, right or
remedy or of the same Default, right or remedy on a future occasion. Debtor
hereby waives presentment, notice of dishonor and protest of all instruments
included in or evidencing any of the Obligations or the Collateral, and any and
all other notices and demands whatsoever (except as expressly provided herein).
Debtor agrees to pay, on demand, all reasonable out-of-pocket expenses incurred
by Secured Party in connection with the enforcement of this Security Agreement,
the Obligations, and the transactions contemplated hereunder and thereunder,
including but not limited to the reasonable fees and expenses of counsel to
Secured Party. In the event of any litigation, with respect to any matter
connected with this Security Agreement, the Obligations or the Collateral,
Debtor hereby waives the right to a trial by jury and all defenses, including
any defense based on any Statute of Limitations, any claim of laches, rights of
setoff and the rights to interpose counterclaims of any nature other than
mandatory counterclaims. Debtor hereby irrevocably consents to the jurisdiction
of the courts of the State of New York and of any Federal Court located in such
State in connection with any action or proceeding arising out of or relating to
the Obligations, this Security Agreement or the Collateral, or any document or
instrument delivered with respect to any of the Obligations. Debtor hereby
waives personal service of any summons, complaint or other process in connection
with any such action or proceeding and agrees that the service thereof may be
made by certified or registered mail directed to Debtor at any place of business
set forth below, or at such other address as Debtor may designate by written
notification by certified or registered mail directed to and received by Secured
Party at its office set forth in the financing statements filed hereunder (or if
no such financing statements have been filed, at the office of Secured Party at
which is located the officer in direct supervision of the within security
interest). The Debtor so served shall appear or answer to such summons,
complaint or other process within thirty days after the mailing thereof. Should
the Debtor so served fail to appear or answer within said thirty-day period,
such Debtor shall be deemed in default and judgment may be entered by Secured
Party against such Debtor for the amount or such other relief as may be demanded
in any summons, complaint or other process so served. In the alternative, in its
discretion Secured Party may effect service upon Debtor in any other form or
manner permitted by law. All terms used herein shall have the meanings as
defined in the UCC, unless the context otherwise requires. No provision hereof
shall be modified, altered or limited except by a written instrument expressly
referring to this Security Agreement and to such provision, and executed by the
party
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<PAGE>
to be charged. The execution and delivery of this Security Agreement has been
authorized by the Board(s) of Directors of Debtor and by any necessary vote or
consent of stockholders of Debtor (if a corporation). This Security Agreement
and all Obligations shall be binding upon the heirs executors, administrators,
successors, or assigns of Debtor, and all, together with the rights and remedies
of Secured Party hereunder, inure to the benefit of Secured Party, its
successors, endorsees and assigns. This Security Agreement and the Obligations
shall be governed in all respects by the laws of the State of New York. If any
term of this Security Agreement shall be held to be invalid, illegal or
unenforceable, the validity of all other terms hereof shall in no way be
affected thereby. Secured Party is authorized to annex hereto any schedules
referred to herein. Debtor acknowledges receipt of a copy of this Security
Agreement.
IN WITNESS WHEREOF, the undersigned has executed or caused this
Security Agreement to be executed in the State of New York, the date first above
set forth.
(CORPORATE SEAL) LAMINAIRE CORPORATION
By
(Name)
(Title)
Trade Name (if any)
Chief Place of Business: All location(s) of Collateral:
(Also set forth the Section,
Block and Lot where there is located
any of the Collateral which is or may
be affixed to realty.)
Other Places of Business:
Location of Books and Records Name of record owner of real estate
Relating to the Collateral: where any of the Collateral is or may
be affixed to realty:
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<PAGE>
Schedule A
Collateral shall mean and include all of Debtor's right, title and
interest in and to:
1. All Accounts;
2. All Inventory;
3. All Equipment; and
4. All Proceeds and products of any or all of the foregoing, to the
extent not otherwise included.
For purposes of this Schedule A, the following terms shall have the following
meanings:
"Accounts" shall mean all "accounts", as such term is defined
in Section 9-106 of the Uniform Commercial Code as in effect on the
date hereof in the State of New Jersey (the "Code"), in which Debtor
now or hereafter has any right, title or interest.
"Equipment" shall mean all "equipment", as such term is
defined in Section 9-109 of the Code, in which Debtor now or hereafter
has any right, title or interest.
"Inventory" shall mean all "inventory", as such term is
defined in Section 9-109 of the Code, in which Debtor now or hereafter
has any right, title or interest.
"Proceeds" shall mean "proceeds", as such term is defined in
Section 9-306 of the Code including, but not limited to (i) any and all
proceeds of any insurance, indemnity, warranty or guaranty payable to
Debtor from time to time with respect to any of the Collateral, (ii)
any and all payments (in any form whatsoever) made or due and payable
to Debtor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of
the Collateral by any governmental body, authority, bureau or agency
(or any person, corporation, agency, authority or other entity acting
under color of governmental authority) and (iii) any and all other
amounts from time to time paid or payable under or in connection with
any of the Collateral.
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EXHIBIT 10.33 GUARANTY EXECUTED BY LAMINAIRE CORPORATION IN FAVOR OF NORWOOD
VENTURE CORP. DATED OCTOBER 16, 1997
<PAGE>
GUARANTY
GUARANTY dated as of October 16 , 1997 made by the undersigned guarantor
(the "Guarantor"), in favor of Norwood Venture Corp. ("NVC").
WHEREAS, NVC is, on the date hereof, purchasing, at par, from Thermo-Mizer
Environmental Corp., a Delaware corporation which owns all of the issed and
outstanding capital stock of the Guarantor (the "Company"), the Company's 12%
Convertible Note due November 1, 2002 in the principal amount of $500,000 (the
"Note") pursuant to a Convertible Note Purchase Agreement dated the date hereof
(the "Purchase Agreement") and the Company is transferring to the Guarantor part
of the proceeds received by it from the sale of the Note; and
WHEREAS, it is a condition to NVC's consummating the transactions
contemplated by the Purchase Agreement that the Guarantor executes and delivers
this Guaranty to NVC.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guarantor hereby agrees for the benefit of NVC and the successors and assigns of
NVC, as follows:
Guaranty of Payment. The Guarantor hereby unconditionally and
irrevocably guarantees for the benefit of NVC and the successors and assigns of
NVC (a) the prompt and complete payment when due (whether at the scheduled date
for payment or on acceleration, including amounts which would become due but for
the operation of the automatic stay under Section 362(a) of the Bankruptcy Code,
11 U.S.C. ss.362(a) or any successor provision thereto or any comparable
provision under the laws of any foreign jurisdiction) of all indebtedness,
obligations and liabilities of the Company to NVC under the Note (all such
indebtedness, obligations and liabilities being herein called the
"Obligations"), and (b) the prompt and complete payment on demand of any and all
reasonable out-of-pocket expenses incurred by NVC in enforcing any rights under
this Guaranty ("Expenses").
No Subrogation. Notwithstanding any payment or payments made by the
Guarantor hereunder or any setoff or application of funds of the Guarantor by
NVC, the Guarantor shall not be entitled to be subrogated to any of the rights
of NVC against the Company or any collateral security or guaranty or right of
offset held by NVC for the payment of the Obligations, nor shall the Guarantor
seek any reimbursement from the Company in respect of payments made by the
Guarantor hereunder.
No Release of Guarantor's Obligations. The Guarantor hereby consents that,
without the necessity of any reservation of rights against the Guarantor and
without notice to or further assent by the Guarantor:
any demand for payment of any of the Obligations made by NVC may be
rescinded by NVC;
the Obligations, or the liability of the Company or any other party upon or
for any part thereof, or any collateral security or guaranty therefor or right
of offset with respect thereto, may, from time to time, in whole or in part, be
renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released;
the Purchase Agreement, the Note and any agreement, instrument, schedule,
annexure, supplement, collateral security document or guaranty, or other
document delivered in connection therewith, may be amended, modified, renewed,
extended, supplemented or terminated, in whole or in part; and
AAL\Norwood\Thermo
9/25/97
<PAGE>
any collateral security or guaranty or right of offset at any time held by
NVC for the payment of the Obligations may be sold, exchanged, waived,
surrendered or released;
all without the necessity of any reservation of rights against the Guarantor and
without notice to or further assent by the Guarantor, and the Guarantor will
remain bound hereunder, notwithstanding any such renewal, extension,
modification, acceleration, compromise, amendment, supplement, termination,
sale, exchange, waiver, surrender or release. NVC shall have no obligation to
protect, secure, perfect or insure any collateral security document or property
subject thereto at any time held as security for the Obligations or this
Guaranty. When making any demand hereunder against the Guarantor, NVC may, but
shall be under no obligation to, make a similar demand on the Company or any
other obligor, and any failure by NVC to make any such demand or to collect any
payments from the Company or any other obligor or any release of the Company or
any other obligor shall not relieve the Guarantor of its obligations or
liabilities hereunder, and shall not impair or affect the rights and remedies,
express or implied, or as a matter of law, of NVC against the Guarantor. For the
purposes hereof, "demand" shall include the commencement and continuance of any
legal proceedings.
Reliance; Obligations Absolute; Etc. The Guarantor waives any and all
notice of the creation, renewal, extension or accrual of any of the Obligations
and notice of or proof of reliance by NVC upon this Guaranty or acceptance of
this Guaranty, and the Obligations, and any of them, shall conclusively be
deemed to have been created, contracted or incurred in reliance upon this
Guaranty, and all dealings between the Company or the Guarantor and NVC shall
likewise be conclusively presumed to have been had or consummated in reliance
upon this Guaranty. The Guarantor waives notice of acceptance hereof, diligence,
presentment, protest, notice of protest, demand for payment and notice of
default or nonpayment to or upon the Company or the Guarantor with respect to
the Obligations. This Guaranty shall be construed as a continuing, absolute and
unconditional guaranty of payment (and not merely of collection). The
obligations and liabilities of the Guarantor hereunder shall not be conditioned
or contingent upon the pursuit by NVC, or any other person at any time of any
right or remedy against the Company or any other person which may be or become
liable in respect of all or any part of the Obligations or against any
collateral security or guaranty therefor or right of offset with respect
thereto. This Guaranty shall remain in full force and effect and be binding in
accordance with and to the extent of its terms upon the Guarantor and its
successors and assigns, and shall inure to the benefit of NVC and the successors
and assigns of NVC, until all the Obligations and the obligations of the
Guarantor under this Guaranty shall have been irrevocably satisfied by payment
in full.
Reinstatement. This Guaranty shall continue to be effective, or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any of the Obligations is rescinded or must otherwise be restored or returned,
and in each case shall have actually been repaid, by NVC upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Company or the
Guarantor, or upon or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, the Company or the
Guarantor, or any substantial part of their property, or otherwise, all as
though such payments had not been made. This provision shall survive any
termination of this Guaranty.
Payments. The Guarantor agrees that any amounts for which the Guarantor is
liable hereunder will be paid in lawful currency of the United States of
America. All payments hereunder shall be made to NVC in immediately available
funds or such other funds and in such manner as NVC may require.
No Waiver; Remedies Cumulative. No failure to exercise and no delay in
exercising, on the part of NVC, any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege preclude any other or further exercise thereof, or the
exercise of any other power or right. The rights and remedies herein provided
are cumulative and not exclusive of any rights or remedies provided by law.
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<PAGE>
Waivers; Amendments; Governing Law. No provision of this Guaranty shall be
waived, amended or supplemented except by a written instrument executed by the
Guarantor and NVC. This Guaranty shall be binding upon the successors and
assigns of the Guarantor, and shall, together with the rights and remedies of
NVC hereunder, inure to the benefit of NVC and the successors and assigns of
NVC. The Guarantor may not assign any of its rights or obligations under this
Guaranty without the prior written consent of NVC. This Guaranty shall be
governed by and be construed and interpreted in accordance with the laws of the
State of New York.
Severability. Any provision of this Guaranty which 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 hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Notices. All notices, requests, demands or other communications pursuant to
or in connection with this Guaranty shall be given in writing (and shall become
effective) when deposited in the mails, postage prepaid, addressed to the
Guarantor at the address set forth below, and to NVC at 1430 Broadway, New York,
New York 10018 or to such other address as shall be specified in writing by one
to the other. No other method of giving notice is hereby precluded.
Submission to Jurisdiction; Waiver of Jury Trial. The Guarantor agrees that
any legal or equitable action or proceeding with respect to this Guaranty or the
enforcement thereof may be brought in any Federal or State court of competent
jurisdiction located in the City of New York and irrevocably waives any
objection the Guarantor may now or hereafter have as to the venue of any such
action or proceeding brought in such a court or that such court is an
inconvenient forum. The Guarantor consents to the service of process out of any
of the aforementioned courts in any such action or proceeding by mailing of
copies thereof by registered mail, postage prepaid, such service to become
effective five (5) business days after such mailing. Nothing herein shall affect
NVC's right to serve process in any other manner prescribed by law or the right
to bring legal or equitable actions or proceedings in other competent
jurisdictions. Any judicial proceeding by the Guarantor against NVC involving,
directly or indirectly, any matter in any way arising out of, related to or
connected with this Guaranty shall be brought only in a court located in the
City of New York.
THE GUARANTOR HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING BROUGHT BY THE GUARANTOR OR NVC INVOLVING, DIRECTLY OR INDIRECTLY,
ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS
GUARANTY.
LAMINAIRE CORPORATION
By:__________________________________
Address for Notices:
Laminaire Corporation
528 Oritan Avenue
Ridgefield, New Jersey 07657
Attention: Jon Darcy
Charles Garay
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<PAGE>
STATE OF NEW YORK )
: SS.:
COUNTY OF NEW YORK )
On this day of October, 1997, before me personally came , to me known, who
by me duly sworn, did depose and say that deponent resides at
,
that deponent is the of Laminaire Corporation, the corporation described in and
which executed the foregoing Guaranty, that deponent knows the seal of the
corporation, that the seal affixed to the Guaranty is the corporate seal, that
it was affixed by order of the board of directors of the corporation; and that
deponent signed deponent's name by like order.
Notary Public
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<PAGE>
