SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED DECEMBER 31, 1999 COMMISSION FILE NO. 0-3415
STV GROUP, INCORPORATED
(Exact name of registrant as specified in its charter)
Pennsylvania 23-1698231
(State or other jurisdiction of (I.R.S. Employer Identification)
incorporation or organization)
205 West Welsh Drive, Douglassville, Pennsylvania 19518
(Address of principal executive offices) (Zip Code)
(610) 385-8200
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(g) of the Act:
Common Stock $.50 par value
(Title of class)
As of December 31, 1999, there were 3,836,818 shares of common stock of the
registrant outstanding.
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve months, (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
<PAGE>
TABLE OF CONTENTS
Page
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS......................1
Part I: FINANCIAL INFORMATION
Item 1. Financial Statements.......................................2
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operation.........................6
Item 3. Quantitative and Qualitative Disclosures about Market Risk.8
Part II: OTHER INFORMATION
Item 1. Legal Proceedings..........................................9
Item 2. Changes in Securities......................................9
Item 3. Defaults Upon Senior Securities............................9
Item 4. Submission of Matters to a Vote of Security Holders........9
Item 5. Other Information..........................................9
Item 6. Exhibits and Reports on Form 8-K...........................9
SIGNATURES....................................................................10
<PAGE>
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS
Certain oral statements made by management from time to time and certain
statements contained herein, including certain statements in "Management's
Discussion and Analysis of Financial Condition and Results of Operations" such
as statements regarding the Company's ability to meet its liquidity needs and
control costs, certain statements in Notes to Condensed Consolidated Financial
Statements, and other statements contained herein regarding matters which are
not historical facts are forward looking statements (as such term is defined in
the Securities Act of 1933) and because such statements involve risks and
uncertainties, actual results may differ materially from those expressed or
implied by such forward looking statements. Factors that could cause actual
results to differ materially include, but are not limited to those discussed
below:
1. The Company's ability to secure the capital and the related cost of such
capital necessary to fund its future growth.
2. The Company's continued ability to operate in a heavily regulated
government environment. The Company's government contracts are subject to
termination, reduction or modification as a result of changes in the
government's requirements or budgetary restrictions. In addition,
government contracts are subject to termination at the conveniences of the
government. Under certain circumstances, the government can also suspend or
debar individuals or firms from obtaining future contracts with the
government.
3. The level of competition in the Company's industry, including companies
with significantly larger operations and resources than the Company.
4. The Company's ability to identify and win suitable projects and to
consummate or complete any such projects.
5. The Company's ability to perform design/build projects which may include
the responsibility of ensuring the actual construction of a project for a
guaranteed price.
These and other factors have been discussed in more detail in the Company's
Annual Report on Form 10-K for the fiscal year ended September 30, 1999.
1
<PAGE>
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
STV GROUP, INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
December 31, 1999 September 30, 1999
<S> <C> <C>
ASSETS
Current Assets
Cash and Cash Equivalents $2,385,000 $7,248,000
Accounts Receivable 34,524,000 30,590,000
Costs and Estimated Profits of Uncompleted
Contracts in Excess of Related Billings 16,024,000 17,029,000
Prepaid Expenses and Other Current Assets 509,000 829,000
------- -------
Total Current Assets 53,442,000 55,696,000
Property and Equipment 7,163,000 6,645,000
Less Accumulated Depreciation 5,032,000 4,832,000
--------- ---------
Net Property and Equipment 2,131,000 1,813,000
Deferred Income Taxes 2,443,000 2,443,000
Other Assets 846,000 782,000
------- -------
TOTAL $58,862,000 $60,734,000
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $6,020,000 $7,675,000
Accrued Expenses 9,002,000 10,211,000
Billings on Uncompleted Contracts in Excess of
Related Costs 16,122,000 17,094,000
Current portion of long term debt 103,000 110,000
Deferred income taxes 2,137,000 2,137,000
Income tax payable 1,253,000 876,000
--------- -------
Total Current Liabilities 34,637,000 38,103,000
Long-Term Debt 3,065,000 2,794,000
Post-retirement Benefits 1,070,000 1,070,000
Stockholders' Equity
Common Stock 2,043,000 2,041,000
Capital in Excess of Par 3,461,000 3,445,000
Retained Earnings 15,357,000 14,052,000
---------- ----------
Total 20,861,000 19,538,000
Less: Treasury Stock 771,000 771,000
------- -------
Total Stockholders' Equity 20,090,000 18,767,000
TOTAL $58,862,000 $60,734,000
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
2
<PAGE>
STV GROUP, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
December 31
1999 1998
<S> <C> <C>
Revenues
Total Revenues $34,246,000 $34,221,000
Less Subcontract and Procurement Costs 6,846,000 11,362,000
--------- ----------
Operating Revenue $27,400,000 $22,859,000
Costs and Expenses
Costs of Services and Sales 22,902,000 19,402,000
General and Administrative 2,130,000 1,748,000
--------- ---------
Total Costs and Expenses 25,032,000 21,150,000
Interest Expense (38,000) (74,000)
Interest Income 93,000 73,000
------ ------
Income Before Income Taxes 2,423,000 1,708,000
Income Taxes 1,118,000 796,000
--------- -------
Net Income $1,305,000 $912,000
========== ========
Basic earnings per share: $.34 $.24
Diluted earnings per share: $.31 $.22
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE>
STV GROUP, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
December 31
1999 1998
<S> <C> <C>
Operating Activities
Net Income $1,305,000 $912,000
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation and Amortization 269,000 189,000
Changes in Operating assets and liabilities
Accounts Receivable (3,934,000) (881,000)
Costs of uncompleted contracts in
excess of billings and other current assets 1,325,000 (286,000)
Accounts Payable and accrued expenses (2,593,000) 19,000
Billing in excess of related costs (972,000) (281,000)
Current Income Taxes 377,000 435,000
------- -------
Net Cash provided by operating activities ($4,223,000) $107,000
Investing Activities
Purchase of Property and Equipment (518,000) (189,000)
Purchase of Software (159,000) (119,000)
Decrease in other assets 26,000 2,000
------ -----
Net Cash used in investing activities ($651,000) ($306,000)
Financing Activities
Proceeds from issuance of common stock 18,000 0
Principal payments on line of credit and long
term borrowings (7,000) (260,000)
------ --------
Net Cash used in financing activities $11,000 ($260,000)
Decrease in cash and cash equivalents (4,863,000) (459,000)
Cash and cash equivalents at beginning of year 7,248,000 4,444,000
--------- ---------
Cash and cash equivalents at end of period $2,385,000 $3,985,000
========== ==========
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE>
Notes to Condensed Consolidated Financial Statements (Unaudited)
December 31, 1999
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States for interim financial information and with the instructions to
Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all
of the information and footnotes required by accounting principles generally
accepted in the United States for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the three month period ended December 31, 1999 are not
necessarily indicative of the results that may be expected for the fiscal year
ending September 30, 2000.
2. USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States require management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes.
Actual results could differ from those estimates.
3. EARNINGS PER SHARE
Basic earnings per share (EPS) is computed by dividing net income by the
weighted average number of shares of common stock outstanding during the period.
Diluted EPS recognizes the potential dilutive effects of the future exercise of
common stock options.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
Dec. 31, 1999 Dec. 31, 1998
<S> <C> <C>
Basic earnings per share $0.34 $0.24
Shares outstanding 3,835,557 3,800,318
Diluted earnings per share $0.31 $0.22
Shares outstanding 4,234,123 4,074,906
</TABLE>
5
<PAGE>
Item 2. Management Discussion and Analysis of Financial Condition and Results of
Operation
Results of Operations
Total revenues for the quarter ended December 31, 1999 (first quarter fiscal
2000) remained comparable to the first quarter of fiscal 1999 and decreased 6.7%
as compared to the previous quarter, primarily due to the decrease in revenues
related to pass-through costs. Operating revenues (total revenues excluding
pass-through costs) increased 19.9% as compared to the first quarter of fiscal
1999 and increased 5.5% as compared to the previous quarter.
Pass-through costs decreased 39.7% compared to the first quarter of fiscal 1999
and decreased 36.3% from the previous quarter. Pass-through costs vary depending
on the need for specialty subconsultants and governmental subcontract
requirements.
Costs of services, expressed as a percentage of operating revenues, decreased to
83.6% for the first quarter of fiscal 2000 from 84.9% in the first quarter of
fiscal 1999 and from 84.4% in the previous quarter. While the decrease in the
percentages from the first quarter of fiscal 1999 and the previous quarter was
due to an increase in operating revenues noted above, the absolute costs of
services also increased from the previous quarter due to an increase in labor
related costs.
General and administrative expense, expressed as a percentage of operating
revenue, is 7.8% in the first quarter of fiscal 2000 which is comparable to the
7.6% recorded in the first quarter of fiscal 1999 and a decrease from 9.2% in
the previous quarter. The decrease from the previous quarter is due to an
increase in operating revenues and a decrease in legal, consulting, and office
related expenses.
Interest income, net of interest expense, increased to $55,000 for the first
quarter of fiscal 2000 from net interest expense of $1,000 in the first quarter
of fiscal 1999 and decreased from $76,000 in the previous quarter.
6
<PAGE>
Income tax expense for the first quarter of fiscal 2000 was 46.1% of pre-tax
income compared to 46.6% in the first quarter of fiscal 1999 and 43.9% in the
previous quarter. The increase from the previous quarter is due to the previous
quarter's rate being reduced as a result of increased pre-tax income derived
from the proceeds of a lawsuit settlement, reducing the effect of non-deductible
expenses.
Diluted earnings per common share for the first quarter of fiscal 2000 was $.31
cents versus $.22 for the first quarter of fiscal 1999.
Financial Condition and Liquidity
Working capital increased to $18,805,000 from $17,593,000 in the previous
quarter. Subsequent to December 31, 1999, STV completed negotiations with
another bank and obtained a $12,000,000 committed line of credit. The current
limit is a maximum of $12.0 million based on the Company maintaining certain
financial covenants of which approximately $11.0 million is currently available.
The Company believes that it and the lender will maintain a line of credit
adequate to meet the current and future financial needs of the Company. The
Company is planning to continue its program of purchasing computer-assisted
design and drafting equipment.
The Company's backlog at December 31, 1999 is approximately $220 million.
Year 2000
The Year 2000 issue, or "The Y2K Bug" as it is sometimes called, is the result
of computer programs and equipment that were written and manufactured using two
digits rather than four to define the applicable year. Date-sensitive computer
programs and equipment may recognize a date using only the last two digits. This
could result in the year 2000 being recognized as the year 1900. System failures
or miscalculations can occur, which would cause disruptions in operations and/or
the inability to process normal business transactions. The Company is not aware
of any significant adverse effects of Year 2000 on its systems and operations.
7
<PAGE>
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
Market risk exposures to the Company are not material.
8
<PAGE>
PART II: OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to Vote of Security Holders
Not applicable.
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The following are filed as exhibits to Part I of this Form 10Q:
Exhibit 10.35 - Letter Agreement with PNC Bank
Exhibit 10.36 - Committed Line of Credit Note with PNC Bank
Exhibit 10.37 - Security Agreement with PNC Bank
Exhibit 10.38 - Reimbursement Agreement for Standby Letter(s)
of Credit with PNC Bank
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
The Company filed no reports on Form 8-K for the quarter ended
December 31, 1999.
9
<PAGE>
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 thereunto duly authorized.
STV GROUP, INCORPORATED
(Registrant)
February 14, 2000 By: /s/ Dominick M. Servedio
- ---------------------- -------------------------------------
Date Dominick M. Servedio
President and Chief Executive Officer
February 14, 2000 By: /s/ Peter W. Knipe
- ---------------------- -------------------------------------
Date Peter W. Knipe
Chief Financial Officer
10
PNC Bank, N.A.
1600 Market Street
Philadelphia, PA 19103
215 585 5000 Tel
February 3, 2000 PNC BANK
Peter W. Knipe
Vice President and Chief Financial Officer
STV GROUP, INCORPORATED
205 West Welsh Drive
Douglassville, Pennsylvania 19518
Re: $12,000,000 Committed Line of Credit
Dear Pete:
We are pleased to inform you that PNC Bank, National Association (the
"Bank"), has approved your request for a committed line of credit (the "Loan")
to STV Group, Incorporated and STV Incorporated and its subsidiaries listed on
the attached Schedule A (individually and collectively, the "Borrower"). We look
forward to this opportunity to help you meet the financing needs of your
business. All the details regarding your Loan are outlined in the following
sections of this letter. If these terms are satisfactory, please follow the
instructions for proceeding with your Loan provided at the end of this letter.
1. Facility and Use of Proceeds. This is a committed revolving line of credit
under which the Borrower may request and the Bank, subject to the terms and
conditions of this letter, will make advances to the Borrower from time to time
until the Expiration Date, in an amount in the aggregate at any time outstanding
not to exceed $12,000,000 (the "Line of Credit"). The "Expiration Date" means
December 31, 2001, or such later date as may be designated by the Bank by
written notice to the Borrower. Advances under the Line of Credit will be used
for working capital, acquisitions or other general business purposes of the
Borrower.
The Borrower may request that the Bank, in lieu of cash advances, issue
standby letters of credit (individually, a "Letter of Credit" and collectively
the "Letters of Credit") under the Line of Credit having expiration dates not to
exceed the earlier of one (1) year from the date of issuance and the Expiration
Date; provided, however, that the total amount of outstanding Letters of Credit
issued hereunder (in the Bank's sole discretion and subject to documentation
satisfactory to the Bank) shall not exceed $2,000,000.00. The availability of
advances under the Line of Credit shall be reduced by the face amount of each
Letter of Credit issued and outstanding (whether or not drawn). Each payment by
the Bank under a Letter of Credit shall in the Bank's discretion constitute an
advance of principal under the Line of Credit and shall be
<PAGE>
STV Group, Incorporated
February 3, 2000
Page 2
evidenced by the Note (as defined below). The Letters of Credit shall be
governed by one or more reimbursement agreements executed by the Borrower (the
"Reimbursement Agreement"). Each request for the issuance of a Letter of Credit
must be accompanied by the Borrower's execution of an application on the Bank's
standard forms, together with all supporting documentation. Each Letter of
Credit will be issued in the Bank's sole discretion and in a form acceptable to
the Bank. The Borrower shall pay the Bank a per annum issuance fee in an amount
equal to 1.5% of the face amount of each Letter of Credit, payable quarterly in
arrears on a basis of a year of 360 days, together with such other customary
fees, commissions and expenses therefor as shall be required by the Bank. This
letter is not a pre-advice for the issuance of a letter of credit and is not
irrevocable.
2. Note. The obligation of the Borrower to repay advances under the Line of
Credit shall be evidenced by a promissory note (the "Note") in form and content
satisfactory to the Bank.
This letter (the "Letter Agreement"), the Note and the other loan
documents delivered pursuant hereto will constitute the "Loan Documents."
Capitalized terms not defined herein shall have the meaning ascribed to them in
the Loan Documents.
3. Interest Rate. Interest on the unpaid balance of the Line of Credit advances
will be charged at the rates, and be payable on the dates and times, set forth
in the Note evidencing the Loan.
4. Repayment. Subject to the terms and conditions of this letter, the Borrower
may borrow, repay and reborrow under the Line of Credit until the Expiration
Date, on which date the outstanding principal balance and any accrued but unpaid
interest shall be due and payable.
5. Security. The Borrower must cause or has previously caused the following to
be executed and delivered to the Bank in form and content satisfactory to the
Bank as security for the Loan:
(a) a security agreement granting the Bank a first priority perfected
lien on the Borrower's existing and future personal property, including but not
limited to accounts, inventory, equipment, general intangibles, chattel paper,
documents and instruments.
If all or any portion of the tangible collateral is located on property
which is not owned by the Borrower or which is subject to a mortgage in favor of
another lender, the Borrower will deliver to the Bank Landlord's or Mortgagee's
Waivers, as applicable, acceptable in form and substance to the Bank for each
such location.
<PAGE>
STV Group, Incorporated
February 3, 2000
Page 3
Hazard insurance must be maintained on all inventory, equipment or real
property securing the Loan in such amounts and with such coverages as are
acceptable to the Bank, containing a standard lender loss payable or mortgagee
clause in favor of the Bank.
The Loan will be cross-collateralized and cross-defaulted with all
other present and future Obligations of the Borrower to the Bank.
6. Covenants. Unless compliance is waived in writing by the Bank or until
payment in full of the Loan and termination of the commitment for the Line of
Credit:
(a) The Borrower will promptly submit to the Bank such information
relating to the Borrower's affairs (including but not limited to annual
financial statements for the Borrower) or any security for the Loan as the Bank
may reasonably request.
(b) The Borrower will notify the Bank in writing of the occurrence of
an Event of Default or an act or condition which, with the passage of time, the
giving of notice or both might become an Event of Default.
(c) The Borrower will comply with the financial and other covenants
included in Exhibit "A" hereto.
7. Representations and Warranties. To induce the Bank to extend the Loan and
upon the making of any advance to the Borrower under the Line of Credit, the
Borrower represents and warrants as follows:
(a) The Borrower's latest consolidated financial statements provided to
the Bank are true, complete and accurate in all material respects and fairly
present the financial condition, assets and liabilities, whether accrued,
absolute, contingent or otherwise, and the results of the Borrower's operations
for the period specified therein. The Borrower's consolidated financial
statements have been prepared in accordance with GAAP (as defined in Exhibit A
hereto) consistently applied from period to period subject in the case of
interim statements to normal year-end adjustments. Since the date of the latest
financial statements provided to the Bank, the Borrower has not suffered any
damage, destruction or loss which has materially adversely affected its
business, assets, operations, financial condition or results of operations.
(b) There are no actions, suits, proceedings or governmental
investigations pending or, to the knowledge of the Borrower, threatened against
the Borrower, including without limitation those described on the attached
Exhibit B, which could result in a material adverse change in its business,
assets, operations, financial condition or results of operations and there is
<PAGE>
STV Group, Incorporated
February 3, 2000
Page 4
no basis known to the Borrower or its officers, directors or shareholders for
any such action, suit, proceedings or investigation.
(c) The Borrower has filed all returns and reports that are required to
be filed by it in connection with any federal, state or local tax, duty or
charge levied, assessed or imposed upon the Borrower or its property, including
unemployment, social security and similar taxes and all of such taxes have been
either paid or adequate reserve or other provision has been made therefor.
(d) The Borrower is duly organized, validly existing and in good
standing under the laws of the state of its incorporation or organization and
has the power and authority to own and operate its assets and to conduct its
business as now or proposed to be carried on, and is duly qualified, licensed
and in good standing to do business in all jurisdictions where its ownership of
property or the nature of its business requires such qualification or licensing.
(e) The Borrower has full power and authority to enter into the
transactions provided for in this Letter Agreement and has been duly authorized
to do so by all necessary and appropriate action and when executed and delivered
by the Borrower, this Letter Agreement and the other Loan Documents will
constitute the legal, valid and binding obligations of the Borrower, enforceable
in accordance with their terms.
(f) There does not exist any default or violation by the Borrower of or
under any of the terms, conditions or obligations of: (i) its organizational
documents; (ii) any indenture, mortgage, deed of trust, franchise, permit,
contract, agreement, or other instrument to which it is a party or by which it
is bound; or (iii) any law, regulation, ruling, order, injunction, decree,
condition or other requirement applicable to or imposed upon the Borrower by any
law or by any governmental authority, court or agency.
(g) The Borrower has reviewed the areas within its business and
operations which could be adversely affected by, and has developed or is
developing a program to address on a timely basis the risk that certain computer
applications used by the Borrower may be unable to recognize and perform
properly date-sensitive functions involving dates prior to and after December
31, 1999 (the "Year 2000 Problem"). The Year 2000 Problem will not result, and
is not reasonably expected to result, in any material adverse effect on the
business, properties, assets, financial condition, results of operations or
prospects of the Borrower, or the ability of the Borrower to duly and punctually
pay or perform its obligations hereunder and under the other Loan Documents.
8. Fees. Beginning on the first day of the quarter after the date of the Note
and continuing on the first day of each quarter thereafter until the Expiration
Date, the Borrower shall pay a
<PAGE>
STV Group, Incorporated
February 3, 2000
Page 5
commitment fee to the Bank, in arrears, at the rate of .375 percent (.375%) per
annum on the average daily balance of the Line of Credit which is undisbursed
and uncancelled during the preceding quarter. For the purpose of calculating the
commitment fee, the face amount of any outstanding Letters of Credit issued
under the Line of Credit shall be deemed to be disbursed. The commitment fee
shall be computed on the basis of a year of 360 days and paid on the actual
number of days elapsed.
9. Expenses. The Borrower will reimburse the Bank for the Bank's reasonable
out-of-pocket expenses incurred or to be incurred in conducting UCC, title and
other public record searches, and in filing and recording documents in the
public records to perfect the Bank's liens and security interests. The Borrower
shall also reimburse the Bank for the Bank's expenses (including the reasonable
fees and expenses of the Bank's outside and in-house counsel) in documenting and
closing this transaction, in connection with any amendments, modifications or
renewals of the Loan, and in connection with the collection of all of the
Borrower's obligations to the Bank, including but not limited to enforcement
actions relating to the Loan.
10. Depository. The Borrower will establish and maintain at the Bank the
Borrower's primary depository accounts.
11. Additional Provisions. Before the first advance under the Loan, the Borrower
shall execute and deliver to the Bank the Note and other required Loan Documents
and such other instruments and documents as the Bank may reasonably request,
such as certified resolutions, incumbency certificates or other evidence of
authority. The Bank will not be obligated to make any advance under the Line of
Credit if any Event of Default or event which with the passage of time,
provision of notice or both would constitute an Event of Default shall have
occurred and be continuing.
12. Other Conditions to Advances. The Bank will not be obligated to make an
advance under the Line of Credit until the Borrower has provided the following,
all in form and content satisfactory to the Bank: evidence of cancellation of
all commitments from and evidence of repayment in full of all indebtedness to
First Union National Bank except for obligations relating to four letters of
credit outstanding on the date hereof, which are listed on the attached Schedule
B, which shall be replaced no later than June 30, 2000; evidence of termination
of all existing liens in favor of First Union National Bank; transfer of
Borrower's primary operating accounts to the Bank.
Prior to execution of the final Loan Documents, the Bank may terminate
this Letter Agreement if a material adverse change occurs with respect to the
Borrower, any guarantor, any collateral for the Loan or any other person or
entity connected in any way with the Loan, or if the
<PAGE>
STV Group, Incorporated
February 3, 2000
Page 6
Borrower fails to comply with any of the terms and conditions of this Letter
Agreement, or if the Bank reasonably determines that any of the conditions
cannot be met.
This Letter Agreement is governed by the laws of the Commonwealth of
Pennsylvania. No modification, amendment or waiver of any of the terms of this
Letter Agreement, nor any consent to any departure by the Borrower therefrom,
will be effective unless made in a writing signed by the party to be charged,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. When accepted, this Letter Agreement and
the other Loan Documents will constitute the entire agreement between the Bank
and the Borrower concerning the Loan, and shall replace all prior
understandings, statements, negotiations and written materials relating to the
Loan.
THE BORROWER AND THE BANK IRREVOCABLY WAIVE ANY AND ALL RIGHTS THEY MAY
HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY NATURE ARISING
OUT OF THIS LETTER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY AND
ACKNOWLEDGE THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.
If and when a loan closing occurs, this Letter Agreement (as the same
may be amended from time to time) shall survive the closing and will serve as
our loan agreement throughout the term of the Loan.
To accept these terms, please sign the enclosed copy of this Letter
Agreement as set forth below and the Loan Documents and return them to the Bank
within ten (10) days from the date of this Letter Agreement, or this Letter
Agreement may be terminated at the Bank's option without liability or further
obligation of the Bank.
Thank you for giving PNC Bank this opportunity to work with your
business. We look forward to other ways in which we may be of service to your
business or to you personally.
Very truly yours,
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Amy T. Petersen
Title: Vice President
<PAGE>
STV Group, Incorporated
February 3, 2000
Page 7
ACCEPTANCE
With the intent to be legally bound hereby, the above terms and conditions are
hereby agreed to and accepted as of this 3rd day of February, 2000.
BORROWER:
STV GROUP, INCORPORATED
By: /s/ Peter W. Knipe (SEAL)
Print Name: Peter W. Knipe
Title: CFO
STV INCORPORATED
By: /s/ Peter W. Knipe (SEAL)
Print Name: Peter W. Knipe
Title: CFO
STV CONSTRUCTION SERVICES, INC.
By: /s/ Peter W. Knipe (SEAL)
Print Name: Peter W. Knipe
Title: CFO
STV INTERNATIONAL, INC.
By: /s/ Peter W. Knipe (SEAL)
Print Name: Peter W. Knipe
Title: CFO
[SIGNATURES ARE CONTINUED ON THE FOLLOWING PAGE]
<PAGE>
STV Group, Incorporated
February 3, 2000
Page 8
STV/ENVIRONMENTAL, INC.
By: /s/ Peter W. Knipe (SEAL)
Print Name: Peter W. Knipe
Title: CFO
STV SURVEYING, INC.
By: /s/ Peter W. Knipe (SEAL)
Print Name: Peter W. Knipe
Title: CFO
STV CONSTRUCTION, INC.
By: /s/ Peter W. Knipe (SEAL)
Print Name: Peter W. Knipe
Title: CFO
STV ARCHITECTS, INC.
By: /s/ Peter W. Knipe (SEAL)
Print Name: Peter W. Knipe
Title: Secretary
STV SILVER & ZISKIND ARCHITECTS, P.C.
By: /s/ Peter W. Knipe (SEAL)
Print Name: Peter W. Knipe
Title: Secretary
[SIGNATURES ARE CONTINUED ON THE FOLLOWING PAGE]
<PAGE>
STV Group, Incorporated
February 3, 2000
Page 9
STV ARCHITECTS, P.C.
By: /s/ Michael D. Garz (SEAL)
Print Name: Michael D. Garz
Title: President
COMMITTED LINE OF CREDIT NOTE
(Index LIBOR Note)
$12,000,000.00 February 3, 2000
FOR VALUE RECEIVED, STV GROUP, INCORPORATED and STV INCORPORATED and its
SUBSIDIARIES listed on the attached Schedule A (individually and collectively,
the "Borrower"), with an address at 205 West Welsh Drive, Douglassville,
Pennsylvania 19518, promises to pay to the order of PNC BANK, NATIONAL
ASSOCIATION (the "Bank"), in lawful money of the United States of America in
immediately available funds at its offices located at 1600 Market Street,
Philadelphia, Pennsylvania, 19103, or at such other location as the Bank may
designate from time to time, the principal sum of TWELVE MILLION DOLLARS
($12,000,000.00) (the "Facility") or such lesser amount as may be advanced to or
for the benefit of the Borrower hereunder, together with interest accruing on
the outstanding principal balance from the date hereof, as provided below:
1. Rate of Interest. The principal amount outstanding under this Note will bear
interest at a rate per annum (computed on the basis of actual days elapsed
within a year consisting of 360 days) equal to the sum of (A) LIBOR plus (B) two
hundred (200) basis points (2.0%) (the "Applicable LIBOR"). The Applicable LIBOR
shall remain in effect until adjusted by the Bank as of the first calendar day
of each month, without notice to the Borrower.
For the purpose hereof, the following terms shall have the following meanings:
"Business Day" shall mean any day on which commercial
banks settle payments in U.S. dollars in New York City and London other
than a Saturday or Sunday or a legal holiday on which commercial banks
are authorized or required to be closed for business in Philadelphia,
Pennsylvania.
"LIBOR" shall mean, for all advances outstanding at
any time during any month, the interest rate per annum determined by
the Bank by dividing (the resulting quotient rounded upwards, if
necessary, to the nearest 1/100th of 1%) (i) the Published Rate for
such month by (ii) a number equal to 1.00 minus the LIBOR Reserve
Percentage. As used herein, "Published Rate" shall mean the rate of
interest published on the first Business Day of each month in The Wall
Street Journal "Money Rates" listing under the caption "London
Interbank Offered Rates" for a one month period (or, if no such rate is
published therein for any reason, then such rate published therein on
the most recent Business Day prior to the first day of such month;
provided, that if no such rate of interest is published therein for
longer than 30 consecutive days, then the Published Rate shall be the
eurodollar rate for a one month period, as published in another
publication determined by the Bank).
"LIBOR Reserve Percentage" shall mean the maximum
effective percentage in effect on such day as prescribed by the Board
of Governors of the Federal Reserve System (or any successor) for
determining the reserve requirements (including, without limitation,
<PAGE>
supplemental, marginal and emergency reserve requirements) with respect
to eurocurrency funding (currently referred to as "Eurocurrency
liabilities").
LIBOR shall be adjusted on the effective date of any change in the LIBOR Reserve
Percentage as of such effective date. The Bank shall give prompt notice to the
Borrower of LIBOR as determined or adjusted in accordance herewith, which
determination shall be conclusive absent manifest error.
If the Bank determines (which determination shall be final and conclusive) that,
by reason of circumstances affecting the eurodollar market generally, deposits
in dollars (in the applicable amounts) are not being offered to banks in the
eurodollar market for the selected term, or adequate means do not exist for
ascertaining LIBOR, then the Bank shall give notice thereof to the Borrower.
Thereafter, until the Bank notifies the Borrower that the circumstances giving
rise to such suspension no longer exist, (a) the availability of the Applicable
LIBOR shall be suspended, and (b) the interest rate for all advances then
bearing interest under the Applicable LIBOR shall be converted on the first day
of the next calendar month to a rate of interest per annum (calculated on the
basis of actual days elapsed within a year consisting of 360 days) equal to the
Prime Rate (the "Applicable Base Rate"). For purposes hereof, the term "Prime
Rate" shall mean the rate publicly announced by the Bank from time to time as
its prime rate. The Prime Rate is determined from time to time by the Bank as a
means of pricing some loans to its borrowers. The Prime Rate is not tied to any
external rate of interest or index, and does not necessarily reflect the lowest
rate of interest actually charged by the Bank to any particular class or
category of customers. If and when the Prime Rate changes, the rate of interest
with respect to any amounts hereunder to which the Applicable Base Rate applies
will change automatically without notice to the Borrower, effective on the date
of any such change.
In addition, if, after the date of this Note, the Bank shall determine (which
determination shall be final and conclusive) that any enactment, promulgation or
adoption of or any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by a governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Bank with any guideline, request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency shall make it unlawful or impossible for the
Bank to make or maintain or fund loans bearing interest based on the Applicable
LIBOR, the Bank shall notify the Borrower. Upon receipt of such notice, until
the Bank notifies the Borrower that the circumstances giving rise to such
determination no longer apply, (a) the availability of the Applicable LIBOR
shall be suspended, and (b) the interest rate on all advances then bearing
interest under the Applicable LIBOR shall be converted to the Applicable Base
Rate either (i) on the first day of the next calendar month, if the Bank may
lawfully continue to maintain advances at the Applicable LIBOR to such day, or
(ii) immediately if the Bank may not lawfully continue to maintain advances
under the Applicable LIBOR.
In no event will the rate of interest hereunder exceed the maximum rate allowed
by law.
2. Advances. The Borrower may borrow, repay and reborrow hereunder until the
Expiration Date, subject to the terms and conditions of this Note and the Loan
Documents (as defined herein). The "Expiration Date" shall mean December ___,
2001, or such later date as may be designated by the Bank by written notice from
the Bank to the Borrower. The Borrower acknowledges and agrees that in no event
will the Bank be under any obligation to extend or renew the Facility or this
Note beyond the Expiration Date. In no event shall the aggregate unpaid
principal amount of advances under this Note exceed the face amount of this
Note.
-2-
<PAGE>
3. Advance Procedures. A request for advance made by telephone must be promptly
confirmed in writing by such method as the Bank may require. The Borrower
authorizes the Bank to accept telephonic requests for advances, and the Bank
shall be entitled to rely upon the authority of any person providing such
instructions. The Borrower hereby indemnifies and holds the Bank harmless from
and against any and all damages, losses, liabilities, costs and expenses
(including reasonable attorneys' fees and expenses) which may arise or be
created by the acceptance of such telephone requests or making such advances.
The Bank will enter on its books and records, which entry when made will be
presumed correct, the date and amount of each advance, as well as the date and
amount of each payment made by the Borrower.
4. Payment Terms. Accrued interest will be due and payable monthly in arrears on
the first day of each month, beginning with the payment due on _____________
___, 2000. The outstanding principal balance and any accrued but unpaid interest
shall be due and payable on the Expiration Date.
If any payment under this Note shall become due on a Saturday, Sunday or public
holiday under the laws of the State where the Bank's office indicated above is
located, such payment shall be made on the next succeeding business day and such
extension of time shall be included in computing interest in connection with
such payment. The Borrower hereby authorizes the Bank to charge the Borrower's
deposit account at the Bank for any payment when due hereunder. Payments
received will be applied to charges, fees and expenses (including attorneys'
fees), accrued interest and principal in any order the Bank may choose, in its
sole discretion.
5. Late Payments; Default Rate. If the Borrower fails to make any payment of
principal, interest or other amount coming due pursuant to the provisions of
this Note within 15 calendar days of the date due and payable, the Borrower also
shall pay to the Bank a late charge equal to the lesser of five percent (5%) of
the amount of such payment or $100.00 (the "Late Charge"). Such 15 day period
shall not be construed in any way to extend the due date of any such payment.
Upon maturity, whether by acceleration, demand or otherwise, and at the Bank's
option upon the occurrence of any Event of Default (as hereinafter defined) and
during the continuance thereof, this Note shall bear interest at a rate per
annum (based on a year of 360 days and actual days elapsed) which shall be two
percentage points (2%) in excess of the interest rate in effect from time to
time under this Note but not more than the maximum rate allowed by law (the
"Default Rate"). The Default Rate shall continue to apply whether or not
judgment shall be entered on this Note. Both the Late Charge and the Default
Rate are imposed as liquidated damages for the purpose of defraying the Bank's
expenses incident to the handling of delinquent payments, but are in addition
to, and not in lieu of, the Bank's exercise of any rights and remedies
hereunder, under the other Loan Documents or under applicable law, and any fees
and expenses of any agents or attorneys which the Bank may employ. In addition,
the Default Rate reflects the increased credit risk to the Bank of carrying a
loan that is in default. The Borrower agrees that the Late Charge and Default
Rate are reasonable forecasts of just compensation for anticipated and actual
harm incurred by the Bank, and that the actual harm incurred by the Bank cannot
be estimated with certainty and without difficulty.
6. Prepayment. The indebtedness evidenced by this Note may be prepaid in whole
or in part at any time without penalty.
7. Yield Protection. The Borrower shall pay to the Bank, on written demand
therefor, together with the written evidence of the justification therefor, all
direct costs incurred, losses suffered or payments made
-3-
<PAGE>
by Bank by reason of any change in law or regulation or its interpretation
imposing any reserve, deposit, allocation of capital, or similar requirement
(including without limitation, Regulation D of the Board of Governors of the
Federal Reserve System) on the Bank, its holding company or any of their
respective assets. The Bank's determination of an amount payable under this
paragraph shall, in the absence of manifest error, be conclusive and shall be
payable on demand.
8. Other Loan Documents. This Note is issued in connection with a Letter
Agreement between the Borrower and the Bank dated on or before the date hereof,
and the other agreements and documents executed in connection therewith or
referred to therein, the terms of which are incorporated herein by reference (as
amended, modified or renewed from time to time, collectively the "Loan
Documents"), and is secured by the property described in the Loan Documents (if
any) and by such other collateral as previously may have been or may in the
future be granted to the Bank to secure this Note. All capitalized terms used
herein and not otherwise defined herein have the meanings given them in the Loan
Documents.
9. Events of Default. The occurrence of any of the following events will be
deemed to be an "Event of Default" under this Note: (i) the nonpayment of any
principal, interest or other indebtedness under this Note within two (2) days
after the date when due; (ii) the occurrence of any event of default or default
and the lapse of any notice or cure period under any Loan Document or any other
debt, liability or obligation to the Bank of any Obligor; (iii) the filing by or
against any Obligor of any proceeding in bankruptcy, receivership, insolvency,
reorganization, liquidation, conservatorship or similar proceeding (and, in the
case of any such proceeding instituted against any Obligor, such proceeding is
not dismissed or stayed within 60 days of the commencement thereof, provided
that the Bank shall not be obligated to advance additional funds during such
period); (iv) any assignment by any Obligor for the benefit of creditors, or any
levy, garnishment, attachment or similar proceeding is instituted against any
property of any Obligor held by or deposited with the Bank; (v) a default with
respect to any other indebtedness of any Obligor in excess of $250,000 for
borrowed money, if the effect of such default is to cause or permit the
acceleration of such debt; (vi) the commencement of any foreclosure or
forfeiture proceeding, execution or attachment against any collateral securing
the obligations of any Obligor to the Bank; (vii) any material adverse change in
the business, assets, operations, financial condition or results of operations
of the Obligors, taken as a whole; (viii) the Obligors cease doing business as a
going concern; (ix) any change shall occur in the equity ownership of STV Group,
Incorporated which results in its current employee stock option plan owning less
than sixty percent (60%) of the voting control of STV Group, Incorporated; (x)
any representation or warranty made by any Obligor to the Bank in any Loan
Document, or any other documents now or in the future evidencing or securing the
obligations of any Obligor to the Bank, is false, erroneous or misleading in any
material adverse respect; (xi) any Obligor's failure to observe or perform any
of the Financial Reporting Covenants contained in Section A of Exhibit A to that
certain Letter Agreement dated February ___, 2000 (as amended, modified or
renewed from time to time, the "Letter Agreement"), or any of the Negative
Covenants contained in Section C of Exhibit A to the Letter Agreement, provided,
however, that if such failure is capable of being cured and Borrower promptly
undertakes to effect such cure, such failure shall not constitute an Event of
Default hereunder unless it remains uncured for a period of ten (10) days; or
(xii) any Obligor's failure to observe or perform any covenant or other
agreement with the Bank contained in any Loan Document (other than as provided
in clause (xi) above) or any other documents now or in the future evidencing or
securing the obligations of any Obligor to the Bank provided, however, that if
such failure is capable of being cured and Borrower promptly undertakes to
effect such cure, such failure shall not constitute an Event of Default
hereunder unless it remains uncured for a period of thirty (30) days. As used
herein, the term "Obligor" means any Borrower.
-4-
<PAGE>
Upon the occurrence of an Event of Default: (a) the Bank shall be under no
further obligation to make advances hereunder; (b) if an Event of Default
specified in clause (iii) or (iv) above shall occur, the outstanding principal
balance and accrued interest hereunder together with any additional amounts
payable hereunder shall be immediately due and payable without demand or notice
of any kind; (c) if any other Event of Default shall occur, the outstanding
principal balance and accrued interest hereunder together with any additional
amounts payable hereunder, at the Bank's option and without demand or notice of
any kind, may be accelerated and become immediately due and payable; (d) at the
Bank's option, this Note will bear interest at the Default Rate from the date of
the occurrence of the Event of Default; and (e) the Bank may exercise from time
to time any of the rights and remedies available under the Loan Documents or
under applicable law.
10. Right of Setoff. In addition to all liens upon and rights of setoff against
the Borrower's money, securities or other property given to the Bank by law, the
Bank shall have, with respect to the Borrower's obligations to the Bank under
this Note and to the extent permitted by law, a contractual possessory security
interest in and a contractual right of setoff against, and the Borrower hereby
assigns, conveys, delivers, pledges and transfers to the Bank all of the
Borrower's right, title and interest in and to, all of the Borrower's deposits,
moneys, securities and other property now or hereafter in the possession of or
on deposit with, or in transit to, the Bank or any other direct or indirect
subsidiary of PNC Bank Corp., whether held in a general or special account or
deposit, whether held jointly with someone else, or whether held for safekeeping
or otherwise, excluding, however, all IRA, Keogh, and trust accounts. Every such
security interest and right of setoff may be exercised without demand upon or
notice to the Borrower. Every such right of setoff shall be deemed to have been
exercised immediately upon the occurrence of an Event of Default hereunder
without any action of the Bank, although the Bank may enter such setoff on its
books and records at a later time.
11. Miscellaneous. All notices, demands, requests, consents, approvals and other
communications required or permitted hereunder must be in writing (except as may
be agreed otherwise above with respect to borrowing requests) and will be
effective upon receipt. Such notices and other communications may be
hand-delivered, sent by facsimile transmission with confirmation of delivery and
a copy sent by first-class mail, or sent by nationally recognized overnight
courier service, to the addresses for the Bank and the Borrower set forth above
or to such other address as either may give to the other in writing for such
purpose. No delay or omission on the Bank's part to exercise any right or power
arising hereunder will impair any such right or power or be considered a waiver
of any such right or power, nor will the Bank's action or inaction impair any
such right or power. No modification, amendment or waiver of any provision of
this Note nor consent to any departure by the Borrower therefrom will be
effective unless made in a writing signed by the Bank. The Borrower agrees to
pay on demand, to the extent permitted by law, all reasonable costs and expenses
incurred by the Bank in the enforcement of its rights in this Note and in any
security therefor, including without limitation reasonable fees and expenses of
the Bank's counsel. If any provision of this Note is found to be invalid by a
court, all the other provisions of this Note will remain in full force and
effect. The Borrower and all other makers and indorsers of this Note hereby
forever waive presentment, protest, notice of dishonor and notice of
non-payment. The Borrower also waives all defenses based on suretyship or
impairment of collateral. If this Note is executed by more than one Borrower,
the obligations of such persons or entities hereunder will be joint and several.
This Note shall bind the Borrower and its successors and assigns, and the
benefits hereof shall inure to the benefit of the Bank and its successors and
assigns; provided, however, that the Borrower may not assign this Note in whole
or in part without the Bank's written consent and the Bank at any time may
assign this Note in whole or in part.
-5-
<PAGE>
This Note has been delivered to and accepted by the Bank and will be deemed to
be made in the Commonwealth of Pennsylvania. THIS NOTE WILL BE INTERPRETED AND
THE RIGHTS AND LIABILITIES OF THE BANK AND THE BORROWER DETERMINED IN ACCORDANCE
WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA, EXCLUDING ITS CONFLICT OF
LAWS RULES. The Borrower hereby irrevocably consents to the exclusive
jurisdiction of any state or federal court in the county or judicial district
where the Bank's office indicated above is located; provided that nothing
contained in this Note will prevent the Bank from bringing any action, enforcing
any award or judgment or exercising any rights against the Borrower
individually, against any security or against any property of the Borrower
within any other county, state or other foreign or domestic jurisdiction. The
Borrower acknowledges and agrees that the venue provided above is the most
convenient forum for both the Bank and the Borrower. The Borrower waives any
objection to venue and any objection based on a more convenient forum in any
action instituted under this Note.
12. WAIVER OF JURY TRIAL. THE BORROWER IRREVOCABLY WAIVES ANY AND ALL RIGHTS THE
BORROWER MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY
NATURE RELATING TO THIS NOTE, ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS
NOTE OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS. THE BORROWER
ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.
The Borrower acknowledges that it has read and understood all the provisions of
this Note, including the waiver of jury trial, and has been advised by counsel
as necessary or appropriate.
WITNESS the due execution hereof as a document under seal, as of the date first
written above, with the intent to be legally bound hereby.
WITNESS/ATTEST: STV GROUP, INCORPORATED
/s/ Lori Jo Berk By: /s/ Peter W. Knipe (SEAL)
Print Name: Lori Jo Berk Print Name: Peter W. Knipe
Title: Admin. Asst. Title: CFO
WITNESS/ATTEST: STV INCORPORATED
/s/ Lori Jo Berk By: /s/ Peter W. Knipe (SEAL)
Print Name: Lori Jo Berk Print Name: Peter W. Knipe
Title: Admin. Asst. Title: CFO
[SIGNATURES ARE CONTINUED ON THE FOLLOWING PAGE]
-6-
<PAGE>
WITNESS/ATTEST: STV CONSTRUCTION SERVICES, INC.
/s/ Lori Jo Berk By: /s/ Peter W. Knipe (SEAL)
Print Name: Lori Jo Berk Print Name: Peter W. Knipe
Title: Admin. Asst. Title: CFO
WITNESS/ATTEST: STV INTERNATIONAL, INC.
/s/ Lori Jo Berk By: /s/ Peter W. Knipe (SEAL)
Print Name: Lori Jo Berk Print Name: Peter W. Knipe
Title: Admin. Asst. Title: CFO
WITNESS/ATTEST: STV/ENVIRONMENTAL, INC.
/s/ Lori Jo Berk By: /s/ Peter W. Knipe (SEAL)
Print Name: Lori Jo Berk Print Name: Peter W. Knipe
Title: Admin. Asst. Title: CFO
WITNESS/ATTEST: STV SURVEYING, INC.
/s/ Lori Jo Berk By: /s/ Peter W. Knipe (SEAL)
Print Name: Lori Jo Berk Print Name: Peter W. Knipe
Title: Admin. Asst. Title: CFO
WITNESS/ATTEST: STV CONSTRUCTION, INC.
/s/ Lori Jo Berk By: /s/ Peter W. Knipe (SEAL)
Print Name: Lori Jo Berk Print Name: Peter W. Knipe
Title: Admin. Asst. Title: CFO
WITNESS/ATTEST: STV ARCHITECTS, INC.
/s/ Lori Jo Berk By: /s/ Peter W. Knipe (SEAL)
Print Name: Lori Jo Berk Print Name: Peter W. Knipe
Title: Admin. Asst. Title: Secretary
[SIGNATURES ARE CONTINUED ON THE FOLLOWING PAGE]
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<PAGE>
WITNESS/ATTEST: STV SILVER & ZISKIND ARCHITECTS,
P.C.
/s/ Lori Jo Berk By: /s/ Peter W. Knipe (SEAL)
Print Name: Lori Jo Berk Print Name: Peter W. Knipe
Title: Admin. Asst. Title: Secretary
WITNESS/ATTEST: STV ARCHITECTS, P.C.
/s/ Lori Jo Berk By: /s/ Michael D. Garz (SEAL)
Print Name: Lori Jo Berk Print Name: Michael D. Garz
Title: Admin. Asst. Title: President
-8-
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Agreement") is made as of this 3rd day
of February, 2000, by and between STV GROUP, INCORPORATED and STV INCORPORATED
and its SUBSIDIARIES listed on the attached Schedule A (individually and
collectively, the "Grantor"), with an address at 205 West Welsh Drive,
Douglassville, Pennsylvania 19518 and PNC BANK, NATIONAL ASSOCIATION (the
"Bank"), with an address at 1600 Market Street, Philadelphia, Pennsylvania
19103.
Under the terms hereof, the Bank desires to obtain and the Grantor
desires to grant the Bank security for all of the Obligations (as hereinafter
defined).
NOW, THEREFORE, the Grantor and the Bank, intending to be legally
bound, hereby agree as follows:
1. Definitions.
(a) "Collateral" shall include all personal property of the
Grantor, including the following, all whether now owned or hereafter acquired or
arising and wherever located: (i) accounts, accounts receivable, contract
rights, chattel paper, notes receivable, securities entitlements, securities
accounts, investment property, depository accounts, instruments and documents
(including warehouse receipts); (ii) goods of every nature, including inventory,
stock-in- trade, raw materials, work in process, items held for sale or lease or
furnished or to be furnished under contracts of sale or lease, goods that are
returned, reclaimed or repossessed, together with materials used or consumed in
the Grantor's business; (iii) equipment, including machinery, vehicles,
furniture and fixtures; (iv) general intangibles, of every kind and description,
including all existing and future customer lists, choses in action, claims
(including claims for indemnification or breach of warranty), books, records,
patents and patent applications, copyrights, trademarks, tradenames,
tradestyles, trademark applications, goodwill, blueprints, drawings, designs and
plans, trade secrets, contracts, licenses, license agreements, formulae, tax and
any other types of refunds, returned and unearned insurance premiums, rights and
claims under insurance policies, and computer information, software, source
codes, object codes, records and data; (v) all property of the Grantor now or
hereafter in the Bank's possession or in transit to or from, under the custody
or control of or on deposit with, the Bank or any affiliate thereof, including
deposit and other accounts; (vi) all cash and cash equivalents; and (vii) all
cash and non-cash proceeds (including insurance proceeds) of all of the
foregoing property, all products thereof and all additions and accessions
thereto, substitutions therefor and replacements thereof. The Collateral shall
also include any and all other tangible or intangible property that is described
as being part of the Collateral pursuant to one or more Riders to Security
Agreement that may be attached hereto or delivered in connection herewith,
including the Rider to Security Agreement - Copyrights, the Rider to Security
Agreement - Patents, the Rider to Security Agreement - Trademarks and the Rider
to Security Agreement - Cash Collateral Account.
<PAGE>
(b) "Loan Documents" means this Agreement, that certain Letter
Agreement dated February 3, 2000, that certain Reimbursement Agreement for
Standby Letter(s) of Credit dated February 3, 2000, and any and all notes
evidencing the Obligations, as any of them may be amended, modified or restated
after the date hereof. Any capitalized terms used herein, unless otherwise
defined herein shall have the meanings given them in the Loan Documents.
(c) "Obligations" shall include all loans, advances, debts,
liabilities, obligations, covenants and duties owing from the Grantor to the
Bank or to any other direct or indirect subsidiary of PNC Bank Corp., of any
kind or nature, present or future (including any interest accruing thereon after
maturity, or after the filing of any petition in bankruptcy, or the commencement
of any insolvency, reorganization or like proceeding relating to the Grantor,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding), whether or not evidenced by any note, guaranty or other
instrument, whether arising under any agreement, instrument or document, whether
or not for the payment of money, whether arising by reason of an extension of
credit, opening of a letter of credit, loan, equipment lease or guarantee, under
any interest or currency swap, future, option or other interest rate protection
or similar agreement, or in any other manner, whether arising out of overdrafts
on deposit or other accounts or electronic funds transfers (whether through
automated clearing houses or otherwise) or out of the Bank's non-receipt of or
inability to collect funds or otherwise not being made whole in connection with
depository transfer check or other similar arrangements, whether direct or
indirect (including those acquired by assignment or participation), absolute or
contingent, joint or several, due or to become due, now existing or hereafter
arising, and any amendments, extensions, renewals or increases and all costs and
expenses of the Bank incurred in the documentation, negotiation, modification,
enforcement, collection or otherwise in connection with any of the foregoing,
including reasonable attorneys' fees and expenses.
(d) "UCC" means the Uniform Commercial Code, as adopted and
enacted and as in effect from time to time in the State whose law governs
pursuant to the Section of this Agreement entitled "Governing Law and
Jurisdiction." Terms used herein which are defined in the UCC and not otherwise
defined herein shall have the respective meanings ascribed to such terms in the
UCC.
2. Grant of Security Interest. To secure the Obligations, the Grantor,
as debtor, hereby assigns and grants to the Bank, as secured party, a continuing
lien on and security interest in the Collateral.
3. Change in Name or Locations. The Grantor hereby agrees that if the
location of the Collateral changes from the locations listed on Exhibit "A"
hereto and made part hereof, or if the Grantor changes its name or form or
jurisdiction of organization, or establishes a name in which it may do business
that is not listed as a tradename on Exhibit "A" hereto, the Grantor will
immediately notify the Bank in writing of the additions or changes. The
Grantor's chief executive office, form of organization and jurisdiction of
organization are also shown on Exhibit "A" hereto.
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<PAGE>
4. Representations and Warranties. The Grantor represents, warrants and
covenants to the Bank that: (a) the Grantor has good, marketable and
indefeasible title to the Collateral, has not made any prior sale, pledge,
encumbrance, assignment or other disposition of any of the Collateral, and the
Collateral is free from all encumbrances and rights of setoff of any kind except
the lien in favor of the Bank created by this Agreement and except any account
debtor's right to withhold a percentage of its payment as a retainage in the
ordinary course of business pursuant to the agreement giving rise to such
account ("Retainages"); (b) except as herein provided, the Grantor will not
hereafter without the Bank's prior written consent sell, pledge, encumber,
assign or otherwise dispose of any of the Collateral or permit any right of
setoff (other than Retainages), lien or security interest to exist thereon
except to the Bank; (c) the Grantor will defend the Collateral against all
claims and demands of all persons at any time claiming the same or any interest
therein; (d) each account and general intangible, if included in the definition
of Collateral, is genuine and enforceable in accordance with its terms and the
Grantor will defend the same against all claims, demands, setoffs (other than
valid Retainages) and counterclaims at any time asserted; and (e) at the time
any account or general intangible becomes subject to this Agreement, such
account or general intangible will be a good and valid account representing a
bona fide sale of goods or services by the Grantor and such goods will have been
shipped to the respective account debtors or the services will have been
performed for the respective account debtors, and no such account or general
intangible will be subject to any claim for credit, allowance or adjustment by
any account debtor or any setoff, defense or counterclaim, other than
Retainages.
5. Grantor's Covenants. The Grantor covenants that it shall:
(a) from time to time and at all reasonable times allow the
Bank, by or through any of its officers, agents, attorneys, or accountants, to
examine or inspect the Collateral, notify account debtors of the Bank's security
interest in accounts (if included in the definition of Collateral) and obtain
valuations and audits of the Collateral, at the Grantor's expense, wherever
located. The Grantor shall do, obtain, make, execute and deliver all such
additional and further acts, things, deeds, assurances and instruments as the
Bank may require to vest in and assure to the Bank its rights hereunder and in
or to the Collateral, and the proceeds thereof, including waivers from
landlords, warehousemen and mortgagees;
(b) keep the Collateral in good order and repair at all times
and immediately notify the Bank of any event causing a material loss or decline
in value of the Collateral, whether or not covered by insurance, and the amount
of such loss or depreciation;
(c) only use or permit the Collateral to be used in accordance
with all applicable federal, state, county and municipal laws and regulations;
and
(d) have and maintain insurance at all times with respect to
all Collateral against risks of fire (including so-called extended coverage),
theft, sprinkler leakage, and other risks (including risk of flood if any
Collateral is maintained at a location in a flood hazard zone) as the Bank may
require, in such form, in such amount, for such period and written by such
companies as may be satisfactory to the Bank in its sole discretion. Each such
casualty insurance policy
-3-
<PAGE>
shall contain a standard Lender's Loss Payable Clause issued in favor of the
Bank under which all losses thereunder shall be paid to the Bank as the Bank's
interest may appear. Such policies shall expressly provide that the requisite
insurance cannot be altered or canceled without at least thirty (30) days prior
written notice to the Bank and shall insure the Bank notwithstanding the act or
neglect of the Grantor. Upon the Bank's demand, the Grantor shall furnish the
Bank with duplicate original policies of insurance or such other evidence of
insurance as the Bank may require. In the event of failure to provide insurance
as herein provided, the Bank may, at its option, obtain such insurance and the
Grantor shall pay to the Bank, on demand, the cost thereof. Proceeds of
insurance may be applied by the Bank to reduce the Obligations or to repair or
replace Collateral, all in the Bank's sole discretion.
6. Negative Pledge; No Transfer. The Grantor will not sell or offer to
sell or otherwise transfer or grant or allow the imposition of a lien or
security interest upon the Collateral (except for sales of inventory and
collections of accounts in the Grantor's ordinary course of business) or use any
portion thereof in any manner inconsistent with this Agreement or with the terms
and conditions of any policy of insurance thereon.
7. Covenants for Accounts. If accounts are included in the definition
of Collateral:
(a) The Grantor will, on the Bank's demand, make notations on
its books and records showing the Bank's security interest and make available to
the Bank shipping and delivery receipts evidencing the shipment of the goods
that gave rise to an account, completion certificates or other proof of the
satisfactory performance of services that gave rise to an account, a copy of the
invoice for each account and copies of any written contract or order from which
an account arose. The Grantor shall promptly notify the Bank if an account
becomes evidenced or secured by an instrument or chattel paper and upon the
Bank's request, will promptly deliver any such instrument or chattel paper to
the Bank, including any letter of credit delivered to the Grantor to support a
shipment of inventory by the Grantor.
(b) The Grantor will promptly advise the Bank whenever an
account debtor refuses to retain or returns any goods from the sale of which an
account arose and will comply with any instructions that the Bank may give
regarding the sale or other disposition of such returns. From time to time with
such frequency as the Bank may request, the Grantor will report to the Bank all
credits given to account debtors on all accounts.
(c) Upon request of the Bank, Grantor will immediately notify
the Bank if any account arises out of contracts with the United States or any
department, agency or instrumentality thereof, and will execute any instruments
and take any steps required by the Bank so that all monies due and to become due
under such contract shall be assigned to the Bank and notice of the assignment
given to and acknowledged by the appropriate government agency or authority
under the Federal Assignment of Claims Act.
(d) At any time after the occurrence of an Event of Default,
and without notice to the Grantor, the Bank may direct any persons who are
indebted to the Grantor on any Collateral consisting of accounts or general
intangibles to make payment directly to the Bank of the
-4-
<PAGE>
amounts due. The Bank is authorized to give receipts to such account debtors for
any such payments and the account debtors will be protected in making such
payments to the Bank. Upon the Bank's written request, the Grantor will
establish with the Bank and maintain a lockbox account ("Lockbox") with the Bank
and a depository account(s) ("Cash Collateral Account") with the Bank subject to
the provisions of this subparagraph and such other related agreements as the
Bank may require, and the Grantor shall notify its account debtors to remit
payments directly to the Lockbox. Thereafter, funds collected in the Lockbox
shall be transferred to the Cash Collateral Account, and funds in the Cash
Collateral Account shall be applied by the Bank, daily, to reduce the
outstanding Obligations.
8. Further Assurances. At the Bank's request, the Grantor will join
with the Bank in executing one or more financing, continuation or amendment
statements pursuant to the UCC in form satisfactory to the Bank and will pay the
cost of preparing and filing the same in all jurisdictions in which such filing
is deemed by the Bank to be necessary or desirable in order to perfect, preserve
and protect its security interests. The Grantor authorizes the Bank to file
financing, continuation or amendment statements pursuant to the UCC with respect
to all or any part of the Collateral without the Grantor's signature, where
permitted by law. A carbon, photographic or other copy of this Agreement or of a
UCC financing statement may be filed as and in lieu of a UCC financing
statement. At the Bank's request, the Grantor will execute, in form satisfactory
to the Bank, a Rider to Security Agreement - Copyrights (if any Collateral
consists of registered or unregistered copyrights), a Rider to Security
Agreement - Patents (if any Collateral consists of patents or patent
applications), a Rider to Security Agreement - Trademarks (if any Collateral
consists of trademarks, tradenames, tradestyles or trademark applications). If
any Collateral consists of depository accounts not maintained with the Bank or
one of its affiliates, or any securities entitlement, securities account or
other investment property, then at the Bank's request the Grantor will execute,
and will cause the depository institution or securities intermediary upon whose
books and records the ownership interest of the Grantor in such Collateral
appears, such Pledge Agreements, Notification and Control Agreements or other
agreements as the Bank deems necessary in order to perfect and protect its
security interest in such Collateral, in each case in a form reasonably
satisfactory to the Bank.
9. Events of Default. The Grantor shall, at the Bank's option, be in
default under this Agreement upon the happening of any of the following events
or conditions (each, an "Event of Default"): (a) any Event of Default (as
defined in any of the Obligations); (b) any default under any of the Obligations
that does not have a defined set of "Events of Default" and the lapse of any
notice or cure period provided in such Obligations with respect to such default;
(c) demand by the Bank under any of the Obligations that have a demand feature;
(d) the failure by the Grantor to perform any of its obligations under this
Agreement; (e) falsity, inaccuracy or material breach by the Grantor of any
written warranty, representation or statement made or furnished to the Bank by
or on behalf of the Grantor; (f) an uninsured material loss, theft, damage, or
destruction to any of the Collateral, or the entry of any judgment against the
Grantor or any lien against or the making of any levy, seizure or attachment of
or on the Collateral; (g) the failure of the Bank to have a perfected first
priority security interest in the Collateral; or (h) any indication or evidence
received by the Bank that the Grantor may have directly or indirectly been
engaged
-5-
<PAGE>
in any type of activity which, in the Bank's discretion, might result in the
forfeiture of any property of the Grantor to any governmental entity, federal,
state or local.
10. Remedies. Upon the occurrence of any such Event of Default and at
any time thereafter, the Bank may declare all Obligations secured hereby
immediately due and payable and shall have, in addition to any remedies provided
herein or by any applicable law or in equity, all the remedies of a secured
party under the UCC. The Bank's remedies include, but are not limited to, the
right to (a) peaceably by its own means or with judicial assistance enter the
Grantor's premises and take possession of the Collateral without prior notice to
the Grantor or the opportunity for a hearing, (b) render the Collateral
unusable, (c) dispose of the Collateral on the Grantor's premises, (d) require
the Grantor to assemble the Collateral and make it available to the Bank at a
place designated by the Bank, and (e) notify the United States Postal Service to
send the Grantor's mail to the Bank. Unless the Collateral is perishable or
threatens to decline speedily in value or is of a type customarily sold on a
recognized market, the Bank will give the Grantor reasonable notice of the time
and place of any public sale thereof or of the time after which any private sale
or any other intended disposition thereof is to be made. The requirements of
commercially reasonable notice shall be met if such notice is sent to the
Grantor at least ten (10) days before the time of the intended sale or
disposition. Expenses of retaking, holding, preparing for sale, selling or the
like shall include the Bank's reasonable attorney's fees and legal expenses,
incurred or expended by the Bank to enforce any payment due it under this
Agreement either as against the Grantor, or in the prosecution or defense of any
action, or concerning any matter growing out of or connection with the subject
matter of this Agreement and the Collateral pledged hereunder. The Grantor
waives all relief from all appraisement or exemption laws now in force or
hereafter enacted.
11. Power of Attorney. The Grantor does hereby make, constitute and
appoint any officer or agent of the Bank as the Grantor's true and lawful
attorney-in-fact, with power to (a) endorse the name of the Grantor or any of
the Grantor's officers or agents upon any notes, checks, drafts, money orders,
or other instruments of payment or Collateral that may come into the Bank's
possession in full or part payment of any Obligations; (b) so long as any Event
of Default has occurred and is continuing, sue for, compromise, settle and
release all claims and disputes with respect to, the Collateral; and (c) sign,
for the Grantor, financing, continuation or amendment statements pursuant to the
UCC, or supplemental intellectual property security agreements; granting to the
Grantor's said attorney full power to do any and all things necessary to be done
in and about the premises as fully and effectually as the Grantor might or could
do. The Grantor hereby ratifies all that said attorney shall lawfully do or
cause to be done by virtue hereof. This power of attorney is coupled with an
interest, and is irrevocable.
12. Payment of Expenses. At its option, with notice to the Grantor, the
Bank may discharge taxes, liens, security interests or such other encumbrances
as may attach to the Collateral, may pay for required insurance on the
Collateral and may pay for the maintenance, appraisal or reappraisal, and
preservation of the Collateral, as determined by the Bank to be necessary. The
Grantor will reimburse the Bank on demand for any payment so made or any expense
incurred by the Bank pursuant to the foregoing authorization, and the Collateral
also will secure any advances or payments so made or expenses so incurred by the
Bank.
-6-
<PAGE>
13. Notices. All notices, demands, requests, consents, approvals and
other communications required or permitted hereunder must be in writing and will
be effective upon receipt. Such notices and other communications may be hand
delivered, sent by facsimile transmission with confirmation of delivery and a
copy sent by first-class mail, or sent by nationally recognized overnight
courier service, to a party's address set forth above or to such other address
as any party may give to the other in writing for such purpose.
14. Preservation of Rights. No delay or omission on the Bank's part to
exercise any right or power arising hereunder will impair any such right or
power or be considered a waiver of any such right or power, nor will the Bank's
action or inaction impair any such right or power. The Bank's rights and
remedies hereunder are cumulative and not exclusive of any other rights or
remedies which the Bank may have under other agreements, at law or in equity.
15. Illegality. In case any one or more of the provisions contained in
this Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
16. Changes in Writing. No modification, amendment or waiver of any
provision of this Agreement nor consent to any departure by the Grantor
therefrom will be effective unless made in a writing signed by the Bank, and
then such waiver or consent shall be effective only in the specific instance and
for the purpose for which given. No notice to or demand on the Grantor in any
case will entitle the Grantor to any other or further notice or demand in the
same, similar or other circumstance.
17. Entire Agreement. This Agreement (including the documents and
instruments referred to herein) constitutes the entire agreement and supersedes
all other prior agreements and understandings, both written and oral, between
the parties with respect to the subject matter hereof.
18. Counterparts. This Agreement may be signed in any number of
counterpart copies and by the parties hereto on separate counterparts, but all
such copies shall constitute one and the same instrument. Delivery of an
executed counterpart of signature page to this Agreement by facsimile
transmission shall be effective as delivery of a manually executed counterpart.
Any party so executing this Agreement by facsimile transmission shall promptly
deliver a manually executed counterpart, provided that any failure to do so
shall not affect the validity of the counterpart executed by facsimile
transmission.
19. Successors and Assigns. This Agreement will be binding upon and
inure to the benefit of the Grantor and the Bank and their respective successors
and assigns; provided, however, that the Grantor may not assign this Agreement
in whole or in part without the Bank's prior written consent and the Bank at any
time may assign this Agreement in whole or in part.
-7-
<PAGE>
20. Interpretation. In this Agreement, unless the Bank and the Grantor
otherwise agree in writing, the singular includes the plural and the plural the
singular; words importing any gender include the other genders; references to
statutes are to be construed as including all statutory provisions
consolidating, amending or replacing the statute referred to; the word "or"
shall be deemed to include "and/or", the words "including", "includes" and
"include" shall be deemed to be followed by the words "without limitation";
references to articles, sections (or subdivisions of sections) or exhibits are
to those of this Agreement unless otherwise indicated. Section headings in this
Agreement are included for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose. If this Agreement is
executed by more than one Grantor, the obligations of such persons or entities
will be joint and several.
21. Indemnity. The Grantor agrees to indemnify each of the Bank, its
directors, officers and employees and each legal entity, if any, who controls
the Bank (the "Indemnified Parties") and to hold each Indemnified Party harmless
from and against any and all claims, damages, losses, liabilities and expenses
(including all fees and charges of internal or external counsel with whom any
Indemnified Party may consult and all expenses of litigation or preparation
therefor) which any Indemnified Party may incur or which may be asserted against
any Indemnified Party as a result of the execution of or performance under this
Agreement; provided, however, that the foregoing indemnity agreement shall not
apply to claims, damages, losses, liabilities and expenses solely attributable
to an Indemnified Party's gross negligence or willful misconduct. The indemnity
agreement contained in this Section shall survive the termination of this
Agreement. The Grantor may participate at its expense in the defense of any such
claim.
22. Governing Law and Jurisdiction. This Agreement has been delivered
to and accepted by the Bank and will be deemed to be made in the Commonwealth of
Pennsylvania. THIS AGREEMENT WILL BE INTERPRETED AND THE RIGHTS AND LIABILITIES
OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH
OF PENNSYLVANIA, EXCEPT THAT THE LAWS OF THE STATE WHERE ANY COLLATERAL IS
LOCATED (IF DIFFERENT FROM THE COMMONWEALTH OF PENNSYLVANIA) SHALL GOVERN THE
CREATION, PERFECTION AND FORECLOSURE OF THE LIENS CREATED HEREUNDER ON SUCH
PROPERTY OR ANY INTEREST THEREIN. The Grantor hereby irrevocably consents to the
exclusive jurisdiction of any state or federal court in the county or judicial
district where the Bank's office indicated above is located; provided that
nothing contained in this Agreement will prevent the Bank from bringing any
action, enforcing any award or judgment or exercising any rights against the
Grantor individually, against any security or against any property of the
Grantor within any other county, state or other foreign or domestic
jurisdiction. The Bank and the Grantor agree that the venue provided above is
the most convenient forum for both the Bank and the Grantor. The Grantor waives
any objection to venue and any objection based on a more convenient forum in any
action instituted under this Agreement.
23. WAIVER OF JURY TRIAL. EACH OF THE GRANTOR AND THE BANK IRREVOCABLY
WAIVES ANY AND ALL RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS AGREEMENT, ANY DOCUMENTS
EXECUTED IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED IN
ANY OF SUCH
-8-
<PAGE>
DOCUMENTS. THE GRANTOR AND THE BANK ACKNOWLEDGE THAT THE FOREGOING WAIVER IS
KNOWING AND VOLUNTARY.
24. Additional Provisions. The following shall be excluded from the
definition of Collateral: N/A.
The following additional provisions are made a part of this Security Agreement:
None.
WITNESS the due execution hereof as a document under seal, as of the date first
written above.
BORROWER:
WITNESS/ATTEST: STV GROUP, INCORPORATED
/s/ Lori Jo Berk By: /s/ Peter W. Knipe (SEAL)
Print Name: Lori Jo Berk Print Name: Peter W. Knipe
Title: Admin. Asst. Title: CFO
WITNESS/ATTEST: STV INCORPORATED
/s/ Lori Jo Berk By: /s/ Peter W. Knipe (SEAL)
Print Name: Lori Jo Berk Print Name: Peter W. Knipe
Title: Admin. Asst. Title: CFO
WITNESS/ATTEST: STV CONSTRUCTION SERVICES, INC.
/s/ Lori Jo Berk By: /s/ Peter W. Knipe (SEAL)
Print Name: Lori Jo Berk Print Name: Peter W. Knipe
Title: Admin. Asst. Title: CFO
WITNESS/ATTEST: STV INTERNATIONAL, INC.
/s/ Lori Jo Berk By: /s/ Peter W. Knipe (SEAL)
Print Name: Lori Jo Berk Print Name: Peter W. Knipe
Title: Admin. Asst. Title: CFO
[SIGNATURES ARE CONTINUED ON THE FOLLOWING PAGE]
-9-
<PAGE>
WITNESS/ATTEST: STV/ENVIRONMENTAL, INC.
/s/ Lori Jo Berk By: /s/ Peter W. Knipe (SEAL)
Print Name: Lori Jo Berk Print Name: Peter W. Knipe
Title: Admin. Asst. Title: CFO
WITNESS/ATTEST: STV SURVEYING, INC.
/s/ Lori Jo Berk By: /s/ Peter W. Knipe (SEAL)
Print Name: Lori Jo Berk Print Name: Peter W. Knipe
Title: Admin. Asst. Title: CFO
WITNESS/ATTEST: STV CONSTRUCTION, INC.
/s/ Lori Jo Berk By: /s/ Peter W. Knipe (SEAL)
Print Name: Lori Jo Berk Print Name: Peter W. Knipe
Title: Admin. Asst. Title: CFO
WITNESS/ATTEST: STV ARCHITECTS, INC.
/s/ Lori Jo Berk By: /s/ Peter W. Knipe (SEAL)
Print Name: Lori Jo Berk Print Name: Peter W. Knipe
Title: Admin. Asst. Title: Secretary
WITNESS/ATTEST: STV SILVER & ZISKIND ARCHITECTS,
P.C.
/s/ Lori Jo Berk By: /s/ Peter W. Knipe (SEAL)
Print Name: Lori Jo Berk Print Name: Peter W. Knipe
Title: Admin. Asst. Title: Secretary
WITNESS/ATTEST: STV ARCHITECTS, P.C.
/s/ Lori Jo Berk By: /s/ Michael D. Garz (SEAL)
Print Name: Lori Jo Berk Print Name: Michael D. Garz
Title: Admin. Asst. Title: President
-10-
REIMBURSEMENT AGREEMENT
FOR STANDBY LETTER(S) OF CREDIT
THIS REIMBURSEMENT AGREEMENT FOR STANDBY LETTER(S) OF CREDIT (this
"Agreement") is made as of this 3rd day of February, 2000, by STV GROUP,
INCORPORATED and STV INCORPORATED and its SUBSIDIARIES listed on the attached
Schedule A (individually and collectively, the "Applicant"), with an address at
205 West Welsh Drive, Douglassville, Pennsylvania 19518 in favor of PNC BANK,
NATIONAL ASSOCIATION (the "Bank"), with an address at 237 Fifth Avenue, Third
Floor Annex, Pittsburgh, PA 15222. From time to time by submitting an
application on a form approved by the Bank (an "Application"), the Applicant may
request the Bank to issue one or more letters of credit (each, a "Credit"). The
Bank may issue any such Credit, but the Bank shall have no obligation to do so
unless otherwise agreed in writing. The Applicant agrees that the following
terms and conditions shall apply in the event the Bank issues any Credit:
1. Definitions and Interpretation. (a) In addition to terms defined
elsewhere in this Agreement: "Base Rate" means a fluctuating rate per annum
equal to the greater of (i) the interest rate per annum announced from time to
time by the Bank as its then prime rate, which rate may not be the lowest rate
then being charged commercial borrowers by the Bank; or (ii) the rate applicable
to overnight federal funds transactions, as reasonably determined by the Bank,
plus .50%; "Business Day" means any day other than a Saturday, Sunday or other
day on which banks in Pittsburgh, Pennsylvania, or any other city of which the
Bank may give the Applicant notice from time to time, are authorized or required
by law to close; "Dollar Equivalent" means, with respect to an amount in any
currency other than U.S. dollars, as of any date, the amount of U.S. dollars
into which such amount in such currency may be converted at the spot rate at
which U.S. dollars are offered by the Bank in Pittsburgh for such currency at
approximately 11:00 a.m., Prevailing Time, on such date, plus all actual costs
of settlement, including amounts incurred by the Bank to comply with currency
exchange requirements of any Governmental Authority; "Governmental Authority"
means any de facto or de jure domestic or foreign government, court, tribunal,
agency, or other purported authority; "Prevailing Time" means the prevailing
time in Pittsburgh, Pennsylvania (or any other city of which the Bank may have
given the Applicant notice) on the date in question; "Taxes" means all taxes,
fees, duties, levies, imposts, deductions, charges or withholdings of any kind
(other than taxes on the Bank's net income); and "UCP" means the Uniform Customs
and Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500, and any subsequent official revision thereof.
(b) If this Agreement is signed by two or more persons, each shall be
deemed to make to the Bank all the representations, warranties and covenants
contained herein, and each shall be jointly and severally liable hereunder. Any
reference herein to this Agreement, an Application, a Credit, or any other
instrument, agreement or document related hereto or thereto shall be deemed to
refer to all amendments, modifications, extensions and renewals hereof and
thereof. Except to the extent the context clearly otherwise requires, terms not
defined herein shall have the
<PAGE>
respective meanings ascribed to them by the UCP or, if not defined therein, then
by relevant provisions of the Uniform Commercial Code (the "UCC") of
Pennsylvania or such other jurisdiction of which the Bank may give the Applicant
notice, with the definitions of Article 5 of the UCC controlling over any
conflicting definitions in other UCC Articles. Determinations made by the Bank
pursuant to the terms hereof shall be conclusive absent manifest error.
2. Payments. (a) The Bank will notify Applicant of any demand for
payment made under a Credit, and the Applicant will pay to the Bank the amount
to be paid by the Bank with respect to each draft or other payment demand made
under a Credit no later than 10 a.m., Prevailing Time, on the date such payment
is to be made by the Bank, or such earlier time as the Bank may reasonably
require. If a Credit calls for the delivery by the Bank of an item other than
money, the Applicant shall deliver or cause to be delivered such item to the
Bank at such time, in advance of the time the Bank is to deliver such item, as
the Bank may reasonably require.
(b) The Applicant will pay to the Bank upon receipt of the Bank's
invoice therefor (i) interest on all amounts payable to the Bank hereunder from
the date due to the date of payment, at the Base Rate plus 4% (or, if this
Agreement is delivered in connection with a separate credit agreement, loan
agreement, promissory note or other agreement governing the payment of interest
by the Applicant to the Bank, then at the rate of interest applicable following
the occurrence of an event of default thereunder); provided that in no event
shall the Applicant pay hereunder interest in excess of the maximum rate
permitted by applicable law; (ii) the Bank's fees as separately agreed to by the
Applicant and the Bank, as well as the customary commissions and other charges
regularly charged by the Bank for letters of credit; and (iii) all charges and
expenses paid or incurred by the Bank or any of its correspondents in connection
with this Agreement or any Credit, including all reasonable legal fees and
expenses, whether of internal or external counsel to the Bank. All periodic
interest, fees and commissions shall be calculated on the basis of the actual
days elapsed in a 360 day year, and interest shall continue to accrue at the
applicable rate set forth herein notwithstanding one or more defaults or the
entry of any judgment.
(c) All amounts payable hereunder by the Applicant shall be paid to the
Bank at its address set forth above or at such other place as the Bank may give
notice from time to time, in immediately available funds in the currency
specified by the Bank, without set off, defense, recoupment, deduction,
cross-claim or counterclaim of any kind; and free and clear of, and without
deduction for, any present or future Taxes. If the Bank or the Applicant pays
any Taxes, whether or not correctly or legally assessed, the amounts payable
hereunder shall be increased so that, after the payment of such Taxes, the Bank
shall have received an amount equal to the sum the Bank would have received had
no such Taxes been paid. If any amount payable hereunder is denominated in a
currency other than U.S. dollars, the Applicant shall make payment in such
currency or, at the Bank's option, shall pay the Dollar Equivalent thereof. To
effect any payment due hereunder, the Bank may debit any account that the
Applicant may have with the Bank or any of its affiliates.
-2-
<PAGE>
3. Nature of Obligations. (a) The Applicant's obligations to the Bank
under this Agreement are absolute, unconditional and irrevocable, and shall be
paid and performed in accordance with the terms hereof irrespective of any act,
omission, event or condition, including, without limitation (i) the form of, any
lack of power or authority of any signer of, or the lack of validity,
sufficiency, accuracy, enforceability or genuineness of (or any defect in or
forgery of any signature or endorsement on) any draft, demand, document,
certificate or instrument presented in connection with any Credit, or any fraud
or alleged fraud in connection with any Credit or any obligation underlying any
Credit, in each case, even if the Bank or any of its correspondents have been
notified thereof; (ii) any claim of breach of warranty that might be made by the
Applicant or the Bank against any beneficiary of a Credit, or the existence of
any claim, set off, recoupment, counterclaim, cross-claim, defense, or other
right that the Applicant may at any time have against any beneficiary, any
successor beneficiary, any transferee or assignee of the proceeds of a Credit,
the Bank or any correspondent or agent of the Bank, or any other person, however
arising; (iii) any acts or omissions by, or the solvency of, any beneficiary of
any Credit, or any other person having a role in any transaction or obligation
relating to a Credit; (iv) any failure by the Bank to issue any Credit in the
form requested by the Applicant, unless the Bank receives written notice from
the Applicant of such failure within one Business Day after the Applicant shall
have received (by facsimile transmission or otherwise) a copy of such Credit and
such error is material; and (v) any action or omission (including failure or
compulsion to honor a presentation under any Credit) by the Bank or any of its
correspondents in connection with a Credit, draft or other demand for payment,
document, or any property relating to a Credit, and resulting from any
censorship, law, regulation, order, control, restriction, or the like,
rightfully or wrongly exercised by any Governmental Authority, or from any other
cause beyond the reasonable control of the Bank or any of its correspondents, or
for any loss or damage to the Applicant or to anyone else, or to any property of
the Applicant or anyone else, resulting from any such action or omission.
(b) The Bank is authorized to honor any presentation under a Credit
without regard to, and without any duty on the Bank's part to inquire into, any
transaction or obligation underlying such Credit, or any disputes or
controversies between the Applicant and any beneficiary of a Credit, or any
other person, notwithstanding that the Bank may have assisted the Applicant in
the preparation of the wording of any Credit or documents required to be
presented thereunder or that the Bank may be aware of any underlying transaction
or obligation or be familiar with any of the parties thereto.
(c) The Applicant agrees that any action or omission by the Bank or any
of its correspondents in connection with any Credit or presentation thereunder
shall be binding on the Applicant and shall not result in any liability to the
Bank or any of its correspondents in the absence of the gross negligence or
willful misconduct of the Bank. Without limiting the generality of the
foregoing, the Bank and each of its correspondents (i) may rely on any oral or
other communication believed in good faith by the Bank or such correspondent to
have been authorized or given by or on behalf of the Applicant; (ii) may honor
any presentation if the documents presented appear on their face substantially
to comply with the terms and conditions of the relevant Credit; (iii) shall not
be liable to the Applicant for any consequential, punitive or special damages,
or for any damages resulting from any change in the value of any property
-3-
<PAGE>
relating to a Credit; (iv) may honor a previously dishonored presentation under
a Credit, whether such dishonor was pursuant to a court order, to settle or
compromise any claim of wrongful dishonor, or otherwise, and shall be entitled
to reimbursement to the same extent as if such presentation had initially been
honored, together with any interest paid by the Bank; (v) may honor any drawing
that is payable upon presentation of a statement advising negotiation or
payment, upon receipt of such statement (even if such statement indicates that a
draft or other document is being separately delivered), and shall not be liable
for any failure of any such draft or other document to arrive, or to conform in
any way with the relevant Credit; and (vi) may pay any paying or negotiating
bank claiming that it rightfully honored under the laws or practices of the
place where such bank is located.
(d) If the Applicant or any other person seeks to delay or enjoin the
honor by the Bank of a presentation under a Credit, the Bank shall have no
obligation to delay or refuse to honor the presentation until validly so ordered
by a court of competent jurisdiction.
4. Set Off. The Applicant grants the Bank a right of set off against,
to the fullest extent permitted under applicable law, all of the Applicant's (a)
property relating to any Credit; (b) property relating to any transaction or
obligation underlying a Credit; and (c) property in the possession of, on
deposit with, or in transit to, the Bank, now or hereafter, regardless of how
obtained or held (whether in a general or special account or deposit, jointly or
with someone else, in safekeeping, or otherwise). The Bank's right of set off
may be exercised without demand on or notice to the Applicant. The Bank shall be
deemed to have exercised its right of set off immediately upon the occurrence of
an Event of Default, although the Bank may enter such set off on its books and
records at a later time. The Applicant waives mutuality and maturity of debt in
connection with such right of set off. The Applicant agrees from time to time to
deliver to the Bank, on demand, such security or additional security as the Bank
may require to further secure the Applicant's obligations hereunder.
5. Representations, Warranties, Covenants. The Applicant represents,
warrants, and covenants that (a) if not a natural person, the Applicant is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and duly qualified to do business in those
jurisdictions in which its ownership of property or the nature of its business
activities makes such qualification necessary; (b) the Applicant has the
requisite power and authority to execute and deliver this Agreement and to
perform its obligations hereunder; and all such action has been duly authorized
by all necessary proceedings on the Applicant's part, and neither now nor
hereafter shall contravene or result in a breach of any organizational document
of the Applicant, any agreement, document, or instrument binding on the
Applicant or its property, or any law, treaty, regulation, or order of any
Governmental Authority, or require any notice, filing, or other action to or by
any Governmental Authority; (c) all financial statements and other information
received from the Applicant by the Bank prior to the date hereof fairly and
accurately present its financial condition in accordance with generally accepted
accounting principles, and there shall occur no material adverse change in the
Applicant's financial condition or business operations since the date hereof;
(d) from time to time, the Applicant shall
-4-
<PAGE>
execute and deliver such further instruments and agreements and take and permit
such further actions as may be reasonably necessary to carry out the provisions
and purposes of this Agreement, and the Applicant shall provide such evidence of
compliance with the terms hereof and such financial statements and other
information concerning the Applicant's financial condition and/or business
operations as the Bank may reasonably request; and (e) the Applicant and each
transaction and obligation underlying each Credit are and shall remain in
compliance with all laws, treaties, rules, and regulations of any Governmental
Authority, including, without limitation, foreign exchange control, United
States foreign assets control, and currency reporting laws and regulations, now
or hereafter applicable.
6. Events of Default. The occurrence of any of the following is an
"Event of Default" hereunder: (a) the Applicant's failure to pay when due any
obligation to the Bank or any of its affiliates under this Agreement or
otherwise; (b) the Applicant's failure to perform or observe any other term or
covenant of this Agreement, or any representation or warranty contained in this
Agreement or in any document given now or hereafter by the Applicant in
connection herewith is materially false, erroneous, or misleading; (c) the
occurrence of any event of default or default and the lapse of any notice or
cure period under any other debt, liability or obligation of the Applicant to
the Bank or any of its affiliates; (d) the failure to pay or perform any
material obligation to any other person if such failure may cause any such
obligation to be due or performable immediately; (e) any levy, garnishment,
attachment, or similar proceeding is instituted against the Applicant's property
in possession of, on deposit with, or in transit to, the Bank; (f) the
Applicant's dissolution or termination, or the institution by or against the
Applicant or any of its property of any proceeding relating to bankruptcy,
receivership, insolvency, reorganization, liquidation, conservatorship,
foreclosure, execution, attachment, garnishment, levy, assignment for the
benefit of creditors, relief of debtors, or similar proceeding (and, in the case
of any such proceeding instituted against the Applicant, such proceeding is not
dismissed or stayed within 30 days of the commencement thereof); (g) the entry
of a material final judgment against the Applicant and the failure of the
Applicant to discharge the judgment within 10 days of the final entry thereof;
(h) any material adverse change in the business, assets, operations, financial
condition or results of operations of the Applicant; (i) the death or legal
incompetency of an individual Applicant or, if the Applicant is a partnership,
the death or legal incompetency of any individual general partner; (j) the
occurrence of any of the above events with respect to any person which has now
or hereafter guarantied or provided any collateral for any of the Applicant's
obligations hereunder; or (k) any guarantee, or any document, instrument or
agreement purporting to provide the Bank security for the Applicant's
obligations hereunder shall be challenged, repudiated, or unenforceable for any
reason.
7. Remedies. Upon the occurrence of any Event of Default (a) the Bank
may exercise from time to time any of the rights and remedies available to the
Bank under this Agreement, under any other documents now or in the future
evidencing or securing obligations of the Applicant to the Bank, or under
applicable law, and all such remedies shall be cumulative and not exclusive; and
(b) the Applicant shall promptly deliver to the Bank in immediately available
funds, as collateral for any and all obligations of the Applicant to the Bank,
an amount equal to
-5-
<PAGE>
105% of the maximum aggregate amount then or at any time thereafter available to
be drawn under all outstanding Credits, and the Applicant hereby pledges to the
Bank and grants to the Bank a security interest in all such funds as security
for such obligations, acknowledges that the Bank shall at all times have control
of such funds and shall be authorized to give entitlement orders (as defined in
the UCC) with respect to such funds, without further consent of the Applicant or
any other person, and agrees promptly to do all further things that the Bank may
deem necessary in order to grant and perfect the Bank's security interest in
such funds. The Applicant waives presentment, protest, dishonor, notice of
dishonor, demand, notice of protest, notice of non-payment, and notice of
acceptance of this Agreement, and any other notice or demand of any kind from
the Bank.
8. Subrogation. The Bank, at its option, shall be subrogated to the
Applicant's rights against any person who may be liable to the Applicant on any
transaction or obligation underlying any Credit, to the rights of any holder in
due course or person with similar status against the Applicant, and to the
rights of any beneficiary or any successor or assignee of any beneficiary.
9. Indemnification. The Applicant shall indemnify and hold the Bank and
its affiliates and agents, and each of their respective officers, directors,
shareholders and employees (each, an "Indemnified Party") harmless from and
against any and all claims, liabilities, losses, damages, Taxes, penalties,
interest, judgments, costs and expenses (including reasonable legal fees and
costs, whether of internal or external counsel to the Bank), which may be
incurred by or awarded against any Indemnified Party, and which arise out of or
in connection with (a) any Credit, this Agreement, or the preparation for a
defense of any investigation, litigation, or proceeding arising out of or in
connection herewith or therewith (and irrespective of who may be the prevailing
party); (b) any payment or action taken in connection with any Credit,
including, without limitation, any action or proceeding seeking to restrain any
drawing under a Credit or to compel or restrain any payment or any other action
under a Credit or this Agreement (and irrespective of who may be the prevailing
party); (c) the enforcement of this Agreement or the collection or sale of any
property or collateral; and (d) any act or omission of any Governmental
Authority or other cause beyond the Bank's reasonable control; except, in each
case, to the extent such claim, liability, loss, damage, Tax, penalty, interest,
judgment, cost or expense is found by a final judgment of a court of competent
jurisdiction to have resulted from the Bank's gross negligence or willful
misconduct.
10. Miscellaneous. All notices, demands, requests, consents, approvals
and other communications required or permitted hereunder shall be in writing,
will be effective upon receipt, and shall be delivered by registered mail,
return receipt requested, by facsimile transmission with confirmation of
delivery, or by nationally recognized overnight courier service, to the intended
recipient at its address set forth in this Agreement, or at such other address
of which such party shall have given notice to the other in accordance herewith.
No delay or omission of the Bank to exercise any right or power arising
hereunder shall impair any
-6-
<PAGE>
such right or power or be considered to be a waiver of any such right or power.
No modification, amendment or waiver of any provision of this Agreement, or
consent to any departure therefrom, will be effective unless made in a writing
signed by the Bank, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. If any provision of
this Agreement is found to be invalid by a court, all the other provisions of
the Agreement will remain in full force and effect. If this Agreement is
executed by more than one Applicant, each Applicant waives any and all defenses
to payment and performance hereunder based upon principles of suretyship,
impairment of collateral, or otherwise and, without limiting the generality of
the foregoing, each Applicant consents to: any change in the time, manner, or
place of payment of or in any other term of all or any of the obligations of any
other Applicant hereunder or otherwise, and any exchange or release of any
property or collateral, or the release or other amendment, extension, renewal,
waiver of, or consent to departure from, the terms hereof or of any guaranty or
security agreement or any other agreement related hereto. This Agreement will be
binding upon and inure to the benefit of the Applicant and the Bank and their
respective heirs, executors, administrators, successors and assigns; provided,
however, that the Applicant may not assign this Agreement in whole or in part
without the Bank's prior written consent and the Bank may at any time assign
this Agreement in whole or in part. The Applicant hereby authorizes the Bank,
from time to time without notice to the Applicant, to record telephonic and
other electronic communications of the Applicant and provide any information
pertaining to the financial condition, business operations or creditworthiness
of the Applicant to or at the direction of any Governmental Authority, to any of
the Bank's correspondents, and the Bank's affiliates, and to any of its or their
directors, officers, employees, auditors and professional advisors, to any
person which in the ordinary course of its business makes credit reference
inquiries, to any person which may succeed to or participate in all or part of
the Bank's interest hereunder, and as may be necessary or advisable for the
preservation of the Bank's rights hereunder. This is a continuing Agreement and
shall remain in full force and effect until no obligations of the Applicant and
no Credit exist hereunder; provided, however, that termination of this Agreement
shall not release the Applicant from any payment or performance that is
subsequently rescinded or recouped, and the obligation to make any such payment
or performance shall continue until paid or performed as if no such payment or
performance ever occurred. Provisions concerning payment, indemnification,
increased costs, Taxes, immunity, and jurisdiction shall survive the termination
of this Agreement.
11. Financial Institution Applicant. If one of two or more Applicants
is a financial institution (the "Financial Institution"), the Financial
Institution shall be deemed to request the issuance of any Credit for its
customer (the "Customer") who has also executed this Agreement as an Applicant.
In consideration of any such issuance, and as a direct and primary obligation,
the Financial Institution agrees to pay the Bank all amounts that become due and
payable to the Bank under this Agreement, when and as due, in accordance with
the terms hereof. The Financial Institution hereby assigns to the Bank all
security interests now or at any time existing granted in favor of the Financial
Institution as security for the Customer's obligations to the Financial
Institution arising out of this Agreement or any Credit, and agrees to do all
things necessary from time to time to effect such assignment.
-7-
<PAGE>
12. Representative of Applicant. If this Agreement is executed by more
than one Applicant and neither is a Financial Institution, the Applicant whose
signature is first shown below shall have the exclusive right to deal with the
Bank in connection with the matters addressed herein, notwithstanding
conflicting instructions or requests from any other Applicant.
13. Waiver of Immunity. The Applicant acknowledges that this Agreement
is entered into, and each Credit will be issued, for commercial purposes and, if
the Applicant now or hereafter acquires any immunity (sovereign or otherwise)
from the jurisdiction of any court or from any legal process with respect to
itself or any of its property, the Applicant hereby irrevocably waives such
immunity.
14. Jurisdiction. The Applicant hereby irrevocably consents to the
non-exclusive jurisdiction of any state or federal court in the judicial
district or the state in which the Bank's office set forth above is located,
provided that nothing contained in this Agreement will prevent the Bank from
bringing any action, enforcing any award or judgment, or exercising any right
against the Applicant individually, against any security, or against any
property of the Applicant within any other jurisdiction. The Applicant agrees
that the venue provided above is the most convenient forum for the Bank and the
Applicant. The Applicant waives any objection to venue and any objection based
on a more convenient forum in any action under this Agreement.
15. WAIVER OF JURY TRIAL. THE APPLICANT IRREVOCABLY WAIVES ALL RIGHTS
APPLICANT MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY
NATURE RELATING TO THIS AGREEMENT, ANY CREDIT, ANY DOCUMENTS EXECUTED IN
CONNECTION WITH THIS AGREEMENT OR ANY CREDIT, OR ANY OBLIGATION OR TRANSACTION
UNDERLYING ANY OF THE FOREGOING. THE APPLICANT ACKNOWLEDGES THAT THIS WAIVER IS
KNOWING AND VOLUNTARY.
16. Governing Law. This Agreement and each Credit shall be interpreted,
construed, and enforced according to (a) the laws of the Commonwealth of
Pennsylvania, including, without limitation, the UCC; and (b) the UCP, which is
incorporated herein by reference and which shall control (to the extent not
prohibited by the law referred to in (a)) in the event of any inconsistent
provisions of such law. In the event that a body of law other than that set
forth above is applicable to a Credit, the Applicant shall be obligated to pay
and reimburse the Bank for any payment made under such Credit if such payment
is, in the Bank's judgment, justified under either the law governing this
Agreement or the law governing such Credit.
[SIGNATURES ARE ON THE FOLLOWING PAGE]
-8-
<PAGE>
STV GROUP, INCORPORATED
(First Applicant's Name)
By: /s/ Peter W. Knipe (SEAL)
Print Name: Peter W. Knipe
Title: CFO
STV INCORPORATED
By: /s/ Peter W. Knipe (SEAL)
Print Name: Peter W. Knipe
Title: CFO
STV CONSTRUCTION SERVICES, INC.
By: /s/ Peter W. Knipe (SEAL)
Print Name: Peter W. Knipe
Title: CFO
STV INTERNATIONAL, INC.
By: /s/ Peter W. Knipe (SEAL)
Print Name: Peter W. Knipe
Title: CFO
STV/ENVIRONMENTAL, INC.
By: /s/ Peter W. Knipe (SEAL)
Print Name: Peter W. Knipe
Title: CFO
STV SURVEYING, INC.
By: /s/ Peter W. Knipe (SEAL)
Print Name: Peter W. Knipe
Title: CFO
[SIGNATURES ARE CONTINUED ON THE FOLLOWING PAGE]
-9-
<PAGE>
STV CONSTRUCTION, INC.
By: /s/ Peter W. Knipe (SEAL)
Print Name: Peter W. Knipe
Title: CFO
STV ARCHITECTS, INC.
By: /s/ Peter W. Knipe (SEAL)
Print Name: Peter W. Knipe
Title: Secretary
STV SILVER & ZISKIND ARCHITECTS,
P.C.
By: /s/ Peter W. Knipe (SEAL)
Print Name: Peter W. Knipe
Title: Secretary
STV ARCHITECTS, P.C.
By: /s/ Michael D. Garz (SEAL)
Print Name: Michael D. Garz
Title: President
M:\LEGAL\Simon\STV Group\Reimbursement3 Rev. 3/99
-10-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
TRANSMITTING STV GROUP'S FISCAL 2000 FIRST QUARTER FORM 10Q.
</LEGEND>
<CIK> 0000095045
<NAME> STV GROUP, INCORPORATED
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-2000
<PERIOD-END> DEC-31-1999
<CASH> 2,385,000
<SECURITIES> 34,000
<RECEIVABLES> 34,614,000
<ALLOWANCES> 90,000
<INVENTORY> 16,024,000
<CURRENT-ASSETS> 53,442,000
<PP&E> 7,163,000
<DEPRECIATION> 5,032,000
<TOTAL-ASSETS> 58,862,000
<CURRENT-LIABILITIES> 34,637,000
<BONDS> 0
0
0
<COMMON> 2,043,000
<OTHER-SE> 18,047,000
<TOTAL-LIABILITY-AND-EQUITY> 20,090,000
<SALES> 34,246,000
<TOTAL-REVENUES> 34,246,000
<CGS> 22,902,000
<TOTAL-COSTS> 25,032,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 38,000
<INCOME-PRETAX> 2,423,000
<INCOME-TAX> 1,118,000
<INCOME-CONTINUING> 1,305,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,305,000
<EPS-BASIC> 0.34
<EPS-DILUTED> 0.31
</TABLE>
