EXHIBIT 10.25
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SUPPLEMENTAL PROMISSORY JUDGMENT NOTE
$45,000 October 1, 1996
FOR VALUE RECEIVED AND INTENDING TO BE LEGALLY BOUND HEREBY,
allegheny capital growth limited partnership, a Delaware limited
partnership (the "Undersigned"), promises to pay to the order of
ACTION INDUSTRIES, INC., a Pennsylvania corporation (together with
its successors and assigns, "Action"), at the offices of Action
located at Action Industrial Park, 460 Nixon Road, Cheswick,
Pennsylvania 15024, or at such other place as Action may from time
to time designate in writing, the principal amount of FORTY FIVE
THOUSAND AND 00/100 DOLLARS ($45,000), together with interest
thereon at the rate specified herein.
1. This Note is the "Supplemental Note" referred to in, is
subject to the terms of and is entitled to the benefits of that
certain Settlement Agreement between the parties of even date
herewith (the "Settlement Agreement"), the terms of which are
incorporated herein by reference. Capitalized terms used herein
and not otherwise defined shall have the meanings assigned to those
terms in the Settlement Agreement.
2. This Note shall not bear interest until January 1, 1997.
Thereafter, it shall bear interest at the rate of 7.5% per annum,
which interest shall be payable on the Maturity Date (defined
below).
3. No repayment of the principal amount hereof shall be
required prior to the "Maturity Date," defined as the earliest to
occur of (a) the date which is 18 months after the Effective Date,
(b) the date when the Property or a majority interest in the
Undersigned is sold to an unaffiliated third party (it being
specifically understood that family members of John Karlton to the
third degree of consanguinity and trusts created for his or their
benefit are not unaffiliated third parties) or (c) the date when a
refinancing of the mortgage loan currently owed to Metropolitan
Life Insurance Company (the "Metropolitan Loan") occurs; provided,
that an extension of the Metropolitan Loan shall not be considered
to be such a refinancing unless the principal amount of such loan
is increased in connection with such extension; and further
provided, that the inclusion of any fees, outstanding interest or
similar amounts in the principal amount of such loan as a condition
to such extension shall not constitute an increase in the principal
amount of such loan for the purposes of this sentence. All
outstanding principal, accrued interest and other amounts due
hereunder shall be due and payable on the Maturity Date.
4. Payments due under this Note and the obligations of the
Undersigned hereunder are subject to setoff and deduction in
accordance with the terms of the Settlement Agreement.
5. In the event of any litigation or arbitration between the
Undersigned and Action, the prevailing party shall be entitled to
recover from the other its reasonable costs and expenses (including
reasonable attorneys' fees and court costs) incurred in connection
with such litigation or arbitration. Subject to the foregoing, the
Undersigned agrees to pay, in addition to all other sums due
hereunder, the reasonable costs and expenses incurred by Action in
connection with all actions taken to collect this Note, whether by
legal proceedings or otherwise, including without limitation
reasonable legal fees and court costs.
6. All payments due hereunder which are not paid when due
shall bear interest at the rate of 9.5% per annum.
7. Payments under this Note, including amounts designated as
payments of interest or as prepayments, shall be applied by Action
first to lawful charges (including without limitation costs and
expenses due hereunder), then to interest accrued and then to
principal. The principal amount outstanding hereunder from time to
time may be prepaid, in whole or in part and at the option of the
Undersigned, without penalty or other restriction.
8. Upon the occurrence of any of the events described below
and so long as no Event of Default (as defined in the New Lease)
which has been determined to have occurred under the New Lease has
not been remedied, whether directly by Action or by the Partnership
having the opportunity to exercise offset rights under the
Settlement Agreement (each, an "Event of Default"), Action may,
upon written notice to the Undersigned, declare this Note and all
sums due hereunder to be immediately due and payable, whereupon
such amounts shall be immediately due and payable without
presentment, demand, protest or other formalities of any kind, all
of which are expressly waived by the Undersigned (except that upon
the occurrence of any of the events described in clause (g) below,
this Note and all sums due hereunder shall be immediately due and
payable and without presentment, demand, protest or other formality
of any kind, all of which are expressly waived by the Undersigned):
(a) The Undersigned shall fail to make any payment of
principal, interest or any other sums owing hereunder when due and
such failure shall continue for more than ten (10) days after
written notice thereof from Action to the Undersigned;
(b) The Undersigned shall (i) default (as principal or
as guarantor or other surety) in the payment or performance of any
obligation for Indebtedness (as that term is defined in Section
8(f) of the Settlement Agreement) beyond any period of grace with
respect thereto and (ii) in the case of the Indebtedness secured by
a first mortgage lien on the Property from time to time only, the
mortgagee commences to exercise any of its remedies with respect
thereto; provided, however, that this Event of Default shall be
deemed cured as and to the extent that the holder of such
Indebtedness shall either waive the declaration of such default and
reinstate the obligation or obligations or deem the obligation or
obligations satisfied; and further provided, that notwithstanding
any such default, Action will forbear from exercising its remedies
hereunder for so long as the holders of all such Indebtedness so
forbear, but if any such holders charge interest at a penalty rate
during the period of such forbearance then interest shall accrue
hereunder during the period of such forbearance at the rate
specified in Paragraph 6 above;
(c) The Undersigned shall create, or permit to be
created, voluntarily, involuntarily, by operation of law or
otherwise, any mortgage, security interest or other lien of any
kind upon any of its assets or properties, including without
limitation upon the Property, the EWI Lease or the New Lease,
except for (i) mortgages, security interests and assignments of
leases and rents that secure the Metropolitan Loan and (ii) liens
which are not voluntarily created or assented to by the Partnership
and which are removed, bonded over or, in the case of
materialmens's or mechanics' liens only, adequately reserved
against within 30 days of written notice thereof from Action to the
Undersigned; provided, that the Undersigned shall not be deemed to
be in default under this subparagraph if (A) such lien was created
by an act or omission of a tenant of the Property and (B) the
Undersigned is actively and in good faith pursuing its remedies
against such tenant to have such lien removed or bonded over;
(d) One or more judgments for the payment of money or in
mortgage foreclosure shall have been entered against the
Undersigned, which judgment or judgments exceed $50,000 in the
aggregate, and such judgment or judgments shall have remained
undischarged and unstayed for a period of twenty consecutive days;
(e) Subject to applicable notice and grace periods
contained therein, if any, the Undersigned shall breach any
obligation incurred or covenant made in the New Note or in Section
8(f) of the Settlement Agreement and, in the case of Section 8(f)
of the Settlement Agreement only, such default shall not have been
cured within 30 days after written notice of a default under such
Section 8(f) is given by Action to the Undersigned, except that a
default under this subsection by reason of a default under such
Section 8(f) shall be deemed to be cured whenever the Partnership
provides the information required by such Section 8(f);
(f) The Undersigned shall sell (or otherwise transfer or
convey) any portion of the Property; or
(g) A proceeding shall have been instituted in respect
of the Undersigned:
(i) seeking to have an order for relief entered in
respect of the Undersigned, or seeking a declaration or entailing
a finding that the Undersigned is insolvent or a similar
declaration or finding, or seeking dissolution, winding-up, charter
revocation or forfeiture, liquidation, reorganization, arrangement,
adjustment, composition or other similar relief with respect to the
Undersigned, its assets or its debts under any law relating to
bankruptcy, insolvency, relief of debtors or protection of
creditors, termination of legal entities or any other similar law
now or hereafter in effect; or
(ii) seeking appointment of a receiver, trustee,
custodian, liquidator, assignee, sequestrator or other similar
official for the Undersigned or for all or any substantial party of
its property and such proceeding shall result in the entry, making
or grant of any such order for relief, declaration, finding, relief
or appointment, or such proceeding shall remain undismissed and
unstayed for a period of ninety consecutive days.
provided, that any such proceeding shall not constitute a default
under this subsection if Action institutes, or joins with any other
creditor in instituting, such proceeding.
9. The successors and assigns of the Undersigned shall be
bound by the terms hereof; the rights and privileges of Action
under this Note shall inure to the benefit of its successors and
assigns; the Undersigned may not assign or delegate its rights or
obligations hereunder without the prior written consent of the
holder hereof. This Note shall be governed by the laws of the
Commonwealth of Pennsylvania. Except as expressly provided to the
contrary herein, all persons now or at any time liable for payment
of this Note hereby waive presentment, demand, dishonor, protest,
notice of protest, notice of default and notice of dishonor, and
any other notice or demand of any kind from Action. The
Undersigned expressly consents to any and all extensions and
renewals of this Note, in whole, or in part, and to all delays in
time of payment or other performance under this Note which Action
may grant at any time and from time to time without limitation and
without any notice or further consent of the Undersigned. Action
hereby reserves all rights against the Undersigned.
10. The remedies of Action, as provided herein or by law,
shall be cumulative and concurrent and may be pursued singularly,
successively or together, at the sole discretion of Action, and may
be exercised as often as the occasion therefor shall arise.
11. POWER TO CONFESS JUDGMENT: AT ANY TIME AFTER AN EVENT OF
DEFAULT DESCRIBED IN PARAGRAPH 8(a) HAS OCCURRED, THE UNDERSIGNED
HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS THE PROTHONOTARY OR ANY
ATTORNEY OF ANY COURT OF RECORD WITHIN THE UNITED STATES OR
ELSEWHERE, INCLUDING THE COURT OF COMMON PLEAS OF ALLEGHENY COUNTY,
PENNSYLVANIA, TO APPEAR FOR THE UNDERSIGNED, AND WITH OR WITHOUT
DECLARATION FILED, CONFESS JUDGMENT AGAINST THE UNDERSIGNED IN
FAVOR OF THE HOLDER HEREOF, AS OF ANY TERM, FOR THE UNPAID BALANCE
HEREOF, WHETHER BY ACCELERATION OR OTHERWISE WITH COSTS OF SUIT AND
AN ATTORNEY'S COMMISSION OF $15,000 WITH RELEASE OF ERRORS. THE
UNDERSIGNED HEREBY WAIVES ALL LAWS EXEMPTING REAL OR PERSONAL
PROPERTY FROM EXECUTION, TO THE EXTENT THAT SUCH LAWS MAY LAWFULLY
BE WAIVED BY THE UNDERSIGNED. NO SINGLE EXERCISE OF THE FOREGOING
POWER TO CONFESS JUDGMENT SHALL BE DEEMED TO EXHAUST THE POWER,
WHETHER OR NOT ANY SUCH EXERCISE SHALL BE HELD BY ANY COURT TO BE
INVALID, VOIDABLE OR VOID, BUT THE POWER SHALL CONTINUE
UNDIMINISHED AND IT MAY BE EXERCISED FROM TIME TO TIME AS OFTEN AS
THE HOLDER HEREOF SHALL ELECT, UNTIL SUCH TIME AS HOLDER SHALL HAVE
RECEIVED PAYMENT IN FULL OF THE DEBT EVIDENCED HEREBY.
BY SIGNING THIS INSTRUMENT, THE UNDERSIGNED HEREBY
ACKNOWLEDGES THAT THIS NOTE IS GIVEN IN CONNECTION WITH A
COMMERCIAL TRANSACTION AND THAT IT HAS READ, UNDERSTOOD AND
VOLUNTARILY AGREES TO THE PROVISIONS CONTAINED HEREIN, INCLUDING
THE CONFESSION OF JUDGMENT PROVISION WHICH MAY RESULT IN A COURT
JUDGMENT AGAINST THE UNDERSIGNED WITHOUT PRIOR NOTICE OR HEARING
AND SUBJECT TO ANY OFFSET RIGHTS OF THE UNDERSIGNED.
12. Action agrees that if, in connection with the enforcement
of its rights under this Note, it obtains a lien against the
Property, it will release such lien if (a) the Property is sold to
EWI or its permitted assigns pursuant to the option, and at the
option price, currently set forth in the EWI Lease and (b) Action
receives all proceeds from such sale which are payable to the
Landlord under the EWI Lease (but in no event more than are
necessary to satisfy this Note and the New Note in full.
IN WITNESS WHEREOF, and intending to be legally bound hereby,
the Undersigned has caused this note to be executed and delivered
as of the day and year first above written.
ALLEGHENY CAPITAL GROWTH
LIMITED PARTNERSHIP
By: Third Pennsylvania
Holding Corporation, its
General Partner
By: JOHN KARLTON
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Name: JOHN KARLTON
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Title: PRESIDENT
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