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EXHIBIT 99.7
PROMISSORY NOTE
$4,000,000.00 October 18, 1996
FOR VALUE RECEIVED, the undersigned, Republic Environmental Systems,
Inc., a Delaware corporation (the "Maker"), hereby unconditionally promises to
pay to the order of Alliance Holding Corporation (the "Payee"), at 10055 Sweet
Valley Drive, Valley View, Ohio 44125 or such other address as may be given to
the Maker by the Payee, the principal sum of FOUR MILLION AND NO/100 DOLLARS
($4,000,000.00), in lawful money of the United States of America, together with
interest on the unpaid principal balance at the three-month LIBOR rate per
annum compounded daily or, in the event of default of timely payment thereof,
the three-month LIBOR rate plus five percent (5%) per annum compounded daily
from the date thereof or (if less) the highest rate permitted by applicable
law.
Principal shall be due and payable in ten equal quarterly installments
of $400,000.00, together with accrued and unpaid interest, computed as follows:
(1) for the first installment, based on the three-month LIBOR rate per annum in
effect on the Closing Date (as defined in that certain Agreement and Plan of
Merger executed by Maker and Payee dated as of May 19, 1996); and (2) for all
subsequent installments, based on the three-month LIBOR rate per annum in
effect on the date the prior installment was due. The first installment of
principal and interest shall be due and payable on the later of the Closing
Date or September 15, 1996. Each subsequent installment of principal and
interest shall be due and payable on the 15th day of the last month of each
calendar quarter thereafter until December 15, 1999, when the entire
outstanding principal amount of this Promissory Note, together with all accrued
and unpaid interest, shall be due and payable aforesaid.
The Maker shall have the right to prepay, in full or from time to time
in part, the then unpaid principal balance on this Promissory Note (together
with all accrued and unpaid interest then due) at any time without premium or
penalty. All prepayments shall be applied first to unpaid accrued interest,
with the balance being applied to principal. All prepayments made at any time
on the unpaid principal balance on this Promissory Note shall be listed on
Schedule A which is attached hereto and made a part hereof for all purposes.
The Holder of this Promissory Note (the "Holder") is hereby authorized to
record on Schedule A the dates and amounts of any prepayments of principal and
the aggregate amount of principal then outstanding. Such recordation shall
constitute prima facie evidence of the accuracy of the information recorded in
the absence of manifest error; provided, however, that failure by the Holder to
make such recordation shall not effect the Maker's obligations hereunder.
Should the Maker fail to make any payment of principal or interest
hereunder on or before ten days after the date such payment is due and such
failure be continuing, the Holder at its option, and in addition to any other
remedies that may be available, may declare the entire principal balance and
accrued interest hereon to be due and payable by giving written notice
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thereof to Maker. Failure to exercise this option shall not constitute a
waiver of the right to exercise the same with respect to any subsequent Event
of Default.
If this Promissory Note shall be collected by legal proceedings or
through a probate or bankruptcy court, or shall be placed in the hands of an
attorney for collection after default or maturity, the Maker agrees to pay all
costs of collection, including, without limitation, reasonable attorneys' fees.
This Promissory Note has not been registered under the Securities Act
of 1933, as amended, or the securities laws of any state. Without such
registration, this Promissory Note may not be sold, pledged, hypothecated, or
otherwise transferred, unless an exemption from registration under the
Securities Act of 1933, as amended, and any applicable state securities laws or
any rule or regulation promulgated thereunder, is available.
THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE.
THIS PROMISSORY NOTE, TOGETHER WITH SCHEDULE A HERETO, REPRESENTS THE
FINAL AGREEMENT OF THE PARTIES HERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
Any notice, demand or other communication to be given under or for the
purposes of this Promissory Note shall be in writing (including telecopy with
prompt written confirmation thereafter, such telecopy notice to be deemed given
upon receipt of such written confirmation) and shall be treated as properly
served or given if hand-delivered or sent by first class prepaid mail (airmail
if appropriate);
If to Payee:
Alliance Holding Corporation
10055 Sweet Valley Drive
Valley View, Ohio 44125
Attention: Mr. Joseph E. LoConti
Telecopy: (216) 447-9137
With a copy to:
Anne L. Meyers & Associates Co., L.P.A.
2 Summit Park Drive, Suite 150
Independence, Ohio 44131-2553
Attention: Anne L. Meyers, Esq.
Telecopy: (216) 520-4350
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If to Maker:
Republic Environmental Systems, Inc.
16 Sentry Park West
1787 Sentry Parkway West, Suite 400
Blue Bell, Pennsylvania 19422
Attention: Douglas R. Gowland
Telecopy: (215) 283-4809
With a copy to:
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
711 Louisiana, Suite 1900
Houston, Texas 77002
Attention: Mr. Rick L. Burdick
Fax: (713) 236-0822
or to such other address any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall only be
effective upon receipt.
All such notices and communications shall, when mailed or telecopied,
be effective upon the earlier of actual receipt (in case of telecopy, of the
written confirmation thereof) or three business days from the date when
deposited in the mails (or in the case of telecopy, of receipt of the written
confirmation thereof).
This Promissory Note has been executed and delivered pursuant to, and
is subject to certain terms and conditions set forth in, that certain Agreement
and Plan of Merger among the Maker, Republic/CSC Acquisition Corporation and
Republic/CSU Acquisition Corporation, each Delaware corporations and
wholly-owned subsidiaries of the Maker, the Payee, and Century Surety Company
and Commercial Surety Agency, Inc., d/b/a Century Surety Underwriters, each
Ohio corporations and wholly-owned subsidiaries of the Payee, dated as of May
19, 1996 (as the same may be amended from time to time, the "Merger
Agreement"), and is the "Note" referred to therein. All capitalized terms used
herein and not otherwise defined herein shall have the meanings given thereto
in the Merger Agreement.
This Promissory Note shall be governed by, and construed in accordance
with, the laws of the State of Delaware.
Maker:
REPUBLIC ENVIRONMENTAL SYSTEMS, INC.
By: /s/ Michael G. DeGroote
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Name: Michael G. DeGroote
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Title: President & Chief Executive Officer
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