Exhibit 10.7
CHANGE IN TERMS AGREEMENT # 2
==================================
BORROWER: DISCAS, INC. AND DISCAS RECYCLED PRODUCTS CORPORATION
567-1 SOUTH LEONARD STREET
WATERBURY, CT 06708
LENDER: BANK OF BOSTON CONNECTICUT
100 PEARL STREET
HARTFORD, CT 06103
==================================
Principal Amount: $500,000.00 Date of Agreement: November 8, 1995
DESCRIPTION OF EXISTING INDEBTEDNESS. Borrower has executed and delivered to
Lender a certain Promissory Note dated February 23, 1995 In the principal
amount of $300.000.00 (the "Note") and a certain Change In Terms Agreement
dated October 6, 1995 extending the time for payment of the outstanding
Principal amount to November 29, 1995 (the "Agreement" #1).
DESCRIPTION OF COLLATERAL. Borrower has executed and delivered a Commercial
Security Agreement dated February 23, 1995 pursuant to which Borrower pledged
to Lender and granted to Lender a continuing lien and security interest in
certain Collateral as described in such Commercial Security Agreement.
DESCRIPTION OF CHANGE IN TERMS. Borrower and Lender have agreed to increase the
principal amount of the Note from $300,000.00 to $500,000.00 and to extend
payment of the outstanding principal amount of the Note. Accordingly, Borrower
and Lender agree as follows:
1. On the face of the Note, delete "Principal Amount: $300,000.00"
and insert "Principal Amount: $500,000.00"
2. Delete the first full paragraph of the Note and Insert the
following:
"PROMISE TO PAY." For value received, Discas, Inc. and Discas
Recycled Products Corporation ("Borrower") promises to pay to
BANK OF BOSTON CONNECTICUT ("Lender"), or order, at the Head
Office of Lender, 100 Pearl Street, Hartford, Connecticut, in
lawful money of the United States of America, the principal
amount of FIVE HUNDRED THOUSAND AND 00/100 Dollars, ($500,000.00)
or so much as may be outstanding, together with interest on the
unpaid outstanding principal balance of each advance. Interest
shall be calculated from the date of each advance until repayment
of each advance.
3. Delete numbered paragraph 1 of the Agreement #1 and insert
the following:
"Borrower will pay this loan in one payment of all
outstanding principal plus all accrued unpaid interest on
September 30, 1996".
4. During the extended term of the Note, Borrower will continue
to make regular monthly payments of all accrued and unpaid
interest due as of each payment date and a final payment of
all outstanding principal plus all accrued interest on
September 30, 1996.
5. Except as amended and modified above, all other terms and
conditions of the Note remain unchanged and shall be
applicable to the Note as amended and modified hereby.
6. Wherever the term "Note" shall appear in the Business Loan
Agreement dated February 23, 1995 ("Loan Agreement), the
Commercial Security Agreement dated February 23, 1995 or any
other agreement, document or instrument executed in
connection with the Note, the term "Note" shall include the
amendments and modifications to the Note set forth in this
Agreement.
CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms
of the original obligation or obligations, including all agreements evidencing
or securing to obligation(s), remain unchanged and in full force and effort.
Consent by Lender to this Agreement does not waive Lender's right to strict
performance of the obligation(s) as changed, nor obligate Lender to make any
future change in terms. Nothing in this Agreement will constitute a
satisfaction of the obligation(s). It is the intention of Lender to retain a
liable parties all makers and endorsers of the original obligation(s),
including accommodation parties, unless a party is expressly release by Lender
in writing. Any maker or endorser, including accommodation makers, will not be
released by virtue of this Agreement. If any person who signed the original
obligation does not sign this Agreement below, then all persons signing below
acknowledge that this Agreement is given unconditionally, based on the
representation to Lender that the non-signing party consents to the changes and
provisions of this Agreement or otherwise will not be released by it. This
waiver applies not only to any initial extension, modification or release, but
also to all such subsequent actions.
RIGHTS OF LENDER. Nothing In this Agreement shall affect or waive any right of
Lender to accelerate the payment of principal and interest under this Note in
the event of a default as set forth in the Note or a default as set forth in
any agreement, document or instrument executed in connection with the Note or
to make demand the Note is payable on demand.
FINANCIAL STATEMENTS. During the extended term of this Note and without
limiting any rights of Lender set forth in any agreement, document or
instrument in connection with the Note, Borrower agrees to provide financial
statements to Lender or any other financial information as Lender may request
from time to time.
NO DEFAULT. The effectiveness of this Agreement is conditioned on Borrower's
representation and warranty that (i) the representations and warranties made to
Lender in the Note and the other agreements executed in connection therewith or
otherwise made to Lender are true and correct as of the date hereof, and (ii)
no Event of Default under the Note or any agreement executed in connection with
the Note has occurred and is continuing.
ATTACHMENT. This Agreement shall be firmly attached to the Note and Agreement
#1 by stapling or other permanent means of attachment and shall constitute a
part of the Note.
RATIFICATION. Borrower hereby ratifies and confirms the pledge, lien and grant
of security interest in the collateral created by the Commercial Security
Agreement which secures the Note as modified and amended by this Agreement, as
well as the terms and conditions of all agreements, documents and instruments
executed in connection with the Note.
FURTHER AGREEMENTS. Borrower agrees to execute and deliver, from time to time,
such additional documents or instruments and to perform such further acts by
Lender to assure, confirm or continue the continuing lien and security interest
in the Collateral or to keep the Commercial Security Agreement in full force
and effect.
PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS AGREEMENT, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS.
THIS AGREEMENT IS EXECUTED UNDER SEAL. BORROWER AGREES TO THE TERMS OF THE
AGREEMENT AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE AGREEMENT.
BORROWER:
Discas, Inc. and Discas Recycled Products Corporation
By: /s/ Patrick A. DePaolo, Sr.
---------------------------
Patrick A. DePaolo, Sr., President/Treasurer of Discas, Inc.
By: /s/ Patrick A. DePaolo, Sr.
---------------------------
Patrick A. DePaolo, Sr, President/Treasurer of Discas Recycled Products
Corporation
2