NOTE
Date: February 14, 1996
MOTHERS WORK, INC.
456 North Fifth Street
Philadelphia, Pennsylvania
to
PIDC LOCAL DEVELOPMENT CORPORATION
2600 Centre Square West
1500 Market Street
Philadelphia, Pennsylvania 19102
FOR VALUE RECEIVED, without defalcation, the undersigned, MOTHERS WORK,
INC., a Delaware Corporation, having its principal place of business in
Philadelphia County, Pennsylvania, (hereinafter called the "Maker"), does hereby
promise to pay to the order of PIDC LOCAL DEVELOPMENT CORPORATION (hereinafter
called "Holder"), at the office of said Holder in Philadelphia, Pennsylvania,
the sum of Five Hundred Ninety Thousand Dollars and No Cents ($590,000.00)
lawful money of the United States of America, together with interest on the
unpaid balance at the rates set forth below from the date hereof until fully
paid, said principal and interest to be payable as follows:
Interest only at the rate of four and one-quarter percent (4-1/4%) per
annum on that portion of the Two Hundred Ninety Thousand Dollars and No Cents
($290,000.00) amount of principal actually advanced by the Holder to the Maker
pursuant to Program "A" under the Commitment Letter issued by Holder to Maker
dated November 28, 1995 (hereinafter referred to as "Commitment Letter") and
interest only at the rate of two percent (2%) per annum on that portion of the
Three Hundred Thousand Dollars and No Cents ($300,000.00) amount of principal
actually advanced by the Holder to the Maker pursuant to Program "B" under the
aforesaid Commitment Letter. All of the aforesaid interest payments shall be
paid on the first day of the first full calendar month following the initial
disbursement hereunder and continuing until either March 1, 1996 or the first
day of the first month after all sums have been advanced under the Commitment
Letter, whichever shall first occur.
Thereafter, commencing on the first day of the second month after all
sums have been advanced under the Commitment Letter or the first day of April,
1996, whichever shall first occur, Maker shall pay to Holder the sum of
$290,000.00 due under Program "A" together with interest thereon at the rate of
4-1/4% per annum in sixty (60) consecutive equal monthly installments of Five
Thousand Three Hundred Seventy Three Dollars and Fifty Seven Cent. ($5,373.57)
each. The monthly installment shall be adjusted in the event the entire
$290,000.00 is not advanced under Program "A" of the Commitment Letter. Each
such installment shall first be applied on account of interest at the aforesaid
rate and the balance thereon shall be applied on account of principal. In the
event any such installment due under this paragraph is more than fifteen (15)
days late, Maker shall pay to Holder a late charge of three percent (3%) of such
installment.
In addition, commencing on the first day of the second month after all
sums have been advanced under the Commitment Letter or the first day of April,
1996, whichever shall first occur, Maker shall pay to Holder the sum of
$300,000.00 due under Program "B" together with interest thereon at the rate of
2% per annum in one hundred eighty (180) consecutive equal monthly installments
of One
Thousand Nine Hundred Thirty Dollars and Fifty Three Cents ($1,930.53) each. The
monthly installment shall be adjusted in the event the entire $300,000.00 is not
advanced under Program "B" of the Commitment Letter. Each such installment shall
first be applied on account of interest at the aforesaid rate and the balance
thereon shall be applied on account of principal. In the event any such
installment due under this paragraph is more than fifteen (15) days late, Maker
shall pay to Holder a late charge of three percent (3%) of such installment.
Maker shall pay to the Philadelphia Industrial Development Corporation,
agent for Holder, for services rendered a monthly service charge of Seventy
Three Dollars and Four Cents ($73.04) commencing not later than April 1, 1996
and continuing for 60 months, and thereafter the monthly service charge shall be
reduced to Twenty Five Dollars and No Cents ($25.00) and shall continue
throughout the remaining term of this Note. In addition, in the event Maker
prepays all or part of the principal due hereunder, Maker shall pay to the
Philadelphia Industrial Development Corporation, agent for Holder, at the time
of such prepayment, an amount equal to 1/2 of 1% of the total amount prepaid.
On or before March 1, 2011, the balance of the principal together with
interest accrued and unpaid shall be paid by Maker to Holder.
All of the terms, covenants and conditions of the aforesaid Commitment
Letter are hereby incorporated by reference herein and any default by Maker
under said Commitment Letter shall be an event of default herein.
The said payments shall be applied on account of the interest,
principal or other sums payable hereunder in such priority as the Holder may
determine. In accordance with the provisions of the Commitment Letter, Maker
shall issue two separate checks each month to Holder.
The payment of this Note is secured by a Security Agreement of even
date herewith from Maker to Holder granting Holder a first priority
security interest in all of Maker's right title and interest in and to a certain
Electra Systems, Inc. High Ply Knife Cutter-Model #VT7000 together with all
increases, parts, fittings, accessories and attachments located at 456 North
Fifth Street, Philadelphia, Pennsylvania and the proceeds thereof.
Upon default hereunder, and after thirty (30) days written notice to
Maker and the failure of Maker to cure said default within the aforesaid time
period, the Maker does hereby empower any attorney of any Court of Record within
the United States or elsewhere to appear for Maker, with or without a
declaration filed, and confess judgment or judgments against said Maker in favor
of the Holder or any subsequent holder hereof, as of any term, for the entire
unpaid principal of this Note, and all arrearages of installment payments,
together with costs of suit, attorney's commission of five percent (5%) for
collection, and a release of all errors, on which judgment, execution or
executions may issue forthwith. The Maker hereby waives the right of inquisition
on all property levied upon to collect the indebtedness evidenced hereby and
does voluntarily condemn the same and authorizes the Prothonotary to enter such
condemnation, and waives and releases all laws, now in force or hereinafter
enacted, relating to exemption, appraisement or stay of execution.
If this Note is placed in an attorney's hands for collection, or
collected by a suit or through a bankruptcy, or probate, or any other court,
either before or after maturity, then in any of said events, there shall be paid
to the holder of this Note reasonable attorney's fees and all costs and other
expenses incurred by said holder in enforcing the terms of this Note.
Failure to pay any part of principal or interest of this Note when due,
or failure to carry out any of the terms, covenants or conditions of said
Commitment Letter shall authorize the Holder to declare immediately due the
whole of the same and exercise any and all the rights and remedies provided by
the Uniform Commercial Code as well as other rights and remedies possessed by
the Holder.
The Maker and endorsers of this Note severally waive demand,
presentment, notice of dishonor, diligence in collection, notice of protest, and
agree to all extensions. and partial payments before or after maturity without
prejudice to the Holder.
IN WITNESS WHEREOF, Maker has executed this Note the day and year first
above written.
MOTHERS WORK, INC.
Attest: /s/ Elan M. Hitchner, III By: /s/ Thomas Frank CFO
------------------------- ------------------------
Assistant Secretary