Exhibit 10.1

 

Execution Copy

 

CREDIT AGREEMENT

 

This Credit Agreement is entered into as of February 2, 2018, by and between
Comerica Bank (“Bank”) and BHT Financial LLC, a Delaware limited liability
company (“Borrower”).

 

In consideration of all present and future loans and credit from time to time
made available by Bank to or in favor of Borrower, and in consideration of all
present and future Indebtedness (as herein defined) of Borrower to Bank,
Borrower represents, warrants, covenants and agrees as follows:

 

1.             DEFINITIONS.

 

1.1           Defined Terms. As used in this Agreement, the following terms
shall have the respective meanings set forth below:

 

“Affiliate” or “Affiliates” means, when used with respect to any Person, any
other Person which, directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with such Person. For
purposes of this definition, “control” (including, with correlative meanings,
the terms “controlled by” and “under common control with”), with respect to any
Person, means possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise.

 

“Affiliate Receivables” means, as of any time of determination, any amounts
(whether in respect of loans or advances, accounts receivable, notes receivable
or otherwise) owing to Borrower or another Loan Party from any of its/their
Subsidiaries or Affiliates (other than Affiliates which are Guarantors of all
Indebtedness) at such time.

 

“Agreement” means this Credit Agreement, as the same may be amended from time to
time.

 

“Authorized Officer” means the chief executive officer, the president or the
chief financial officer, or in his/her absence, another responsible senior
officer, of Borrower or any other Loan Party, or the general partner of, or the
partner or one of the partners required to bind, Borrower or any other Loan
Party, as applicable.

 

“CPA” means independent certified public accountants of recognized standing
selected by Borrower or another Loan Party, as applicable, and acceptable to
Bank.

 

“Collateral” means all property, assets and rights identified in this Agreement,
the Security Agreement or the other Loan Documents in which a Lien or other
encumbrance in favor of or for the benefit of Bank is or has been granted or
arises or has arisen, or may hereafter be granted or arise, under or in
connection with any Loan Document, to secure the payment or performance of any
portion of the Indebtedness.

 

“Collateral Documents” means the security agreements, financing statements and
other agreements for security identified on the attached schedule of Loan
Documents.

 

“Compliance Certificate” means a Compliance Certificate in such form and detail
as may be required by or otherwise satisfactory to Bank, certified by an
Authorized Officer of Borrower, certifying that, as of the date thereof, to the
best of such Authorized Officer’s knowledge, no Default or Event of Default
shall have occurred and be continuing or exist, or if any Default or Event of
Default shall have occurred and be continuing or exist, specifying, in detail,
the nature and period of existence thereof and any action taken or proposed to
be taken by Borrower and/or any other Loan Party in respect thereof, and also
certifying as to whether Borrower and/or any other Loan Party, as applicable,
is/are in compliance with any financial covenant(s) contained in this Agreement
and as more particularly described in said Compliance Certificate (which
Compliance Certificate shall set forth, in reasonable detail, the calculations
and the resultant ratios or financial tests of the Borrower and/or such Loan
Party, as applicable, determined thereunder).

 

 

 

 

“Consolidated” or “consolidated” means, when used with reference to any
financial term in this Agreement, the aggregate for two or more persons of the
amounts signified by such term for all such persons determined on a consolidated
basis in accordance with GAAP. Unless otherwise specified herein, references to
"consolidated" financial statements or data of Borrower includes consolidation
with its Subsidiaries in accordance with GAAP.

 

“Debt” means, as of any applicable date of determination, the total liabilities
of a Person at such time, as determined in accordance with GAAP. In the case of
Borrower, the term "Debt" shall include, without limitation, the Indebtedness.

 

“Default” means any condition or event which, with the giving of notice or the
passage of time, or both, would constitute an Event of Default.

 

“Distributions” means, in respect of any applicable Person(s), dividends on, or
other payments or distributions on account of, or the setting apart of money for
a sinking or other analogous fund for, or the purchase, redemption, retirement
or other acquisition of, any Equity Interest of such Person(s) or of any
warrants, options or other rights to acquire the same.

 

“Effective Date” shall mean the date on which all the conditions precedent set
forth in Section 2.6 have been satisfied.

 

“Environmental Laws” means all laws, statutes, codes, ordinances, rules,
regulations, orders, decrees and directives issued by any federal, state, local,
foreign or other governmental or quasi-governmental authority or body (or any
agency, instrumentality or political subdivision thereof) relating to the
environment or pertaining to Hazardous Materials; any so-called “superfund” or
“superlien” law pertaining to Hazardous Materials on or about any Property at
any time owned, leased or otherwise used by Borrower or any of its Subsidiaries
(if applicable), or any portion thereof, including, without limitation, those
relating to soil, surface, subsurface groundwater conditions and the condition
of the ambient air; and any other federal, state, foreign or local statute, law,
ordinance, code, rule, regulation, order or decree regulating, relating to, or
imposing liability or standards of conduct concerning, any Hazardous Material,
as now or at any time hereafter in effect.

 

“Equity Interest” means, with respect to any Person, (i) all of the shares of
capital stock of (or other ownership or profit interests in) such Person, (ii)
all of the warrants, options or other rights for the purchase or acquisition
from such Person of shares of capital stock of (or other ownership or profit
interests in) such Person, (iii) all of the securities convertible into or
exchangeable for shares of capital stock (or other ownership or profit interests
in) such Person or warrants, rights or options for the purchase or acquisition
from such Person of such shares (or such other interests), and (iv) all of the
other ownership or profit interests in such Person (including, without
limitation, partnership, member or trust interests therein), whether voting or
nonvoting, and whether or not such shares, warrants, options, rights or other
interests are authorized or otherwise existing on any date of determination.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
or any successor act or code.

 

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“Event of Default” means the occurrence or existence of any of the conditions or
events set forth in Section 6 of this Agreement.

 

“GAAP” means generally accepted accounting principles consistently applied.

 

“Guarantor” or “Guarantors” means, as the context dictates, any Person(s) (other
than Borrower) who shall, at any time, guarantee or otherwise be or become
obligated for the repayment of all or any part of the Indebtedness, including
without limitation, Frank E. Celli and James Chambers.

 

“Hazardous Materials” means all of the following: any asbestos, petroleum,
petroleum by-products, flammable explosives, radioactive materials, and any
hazardous or toxic materials, as defined in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections
9601 et seq.), or in any other Environmental Law.

 

“Indebtedness” means any and all present and future indebtedness, obligations or
liabilities of the Borrower and/or any other Loan Party to the Bank, howsoever
arising, evidenced or incurred, whether absolute or contingent, direct or
indirect, voluntary or involuntary, liquidated or unliquidated, joint or
several, now or hereafter existing or arising, due or to become due, whether
known or unknown, and whether originally payable to the Bank or to a third party
and subsequently acquired by the Bank, including, without limitation, (a) any
and all direct indebtedness of the Borrower and/or any other Loan Party to the
Bank, including indebtedness evidenced by any and all promissory notes; (b) any
and all indebtedness, obligations or liabilities of the Borrower and/or any
other Loan Party to the Bank arising under any guaranty where the Borrower
and/or any other Loan Party has guaranteed the payment of indebtedness owing to
the Bank from a third party; (c) any and all indebtedness, obligations or
liabilities of the Borrower and/or any other Loan Party to the Bank arising from
applications or agreements for the issuance of letters of credit; (d) late
charges, loan fees or charges and overdraft indebtedness; (e) any agreement to
indemnify the Bank for environmental liability or to clean up hazardous waste;
(f) any and all indebtedness, obligations or liabilities for which the Borrower
and/or any other Loan Party would otherwise be liable to the Bank were it not
for the invalidity, irregularity or unenforceability of them by reason of any
bankruptcy, insolvency or other law or order of any kind, or for any other
reason, including, without limit, liability for interest and attorneys' fees on,
or in connection with, any of the Indebtedness from and after the filing by or
against the Borrower and/or any other Loan Party of a bankruptcy petition,
whether an involuntary or voluntary bankruptcy case, including, without
limitation, all attorneys' fees and costs incurred in connection with motions
for relief from stay, cash collateral motions, non-dischargeability motions,
preference liability motions, fraudulent conveyance liability motions,
fraudulent transfer liability motions and all other motions brought by the
Borrower, any other Loan Party, the Bank or third parties in any way relating to
the Bank's rights with respect to Borrower, any other Loan Party or third party
and/or affecting any collateral securing any obligation owed to Bank by the
Borrower, any other Loan Party or any third party, probate proceedings, on
appeal or otherwise; (g) any and all amendments, modifications, restatements,
renewals and/or extensions of any of the above, including, without limit,
amendments, modifications, restatements, renewals and/or extensions which are
evidenced by new or additional instruments, documents or agreements; (h) all
costs incurred by Bank in establishing, determining, continuing, or defending
the validity or priority of its security interest, or in pursuing its rights and
remedies under this Agreement, the other Loan Documents or under any other
agreement between Bank and the Borrower and/or any other Loan Party or in
connection with any proceeding involving Bank as a result of any financial
accommodation to Borrower and/or any other Loan Party; and (i) all costs of
collecting Indebtedness, including, without limit, attorneys' fees and costs.

 

“Lien” means any mortgage, pledge, encumbrance, security interest, assignment,
lien or charge or other interest of any kind upon any property or assets,
whether real, personal or mixed, to secure any indebtedness, obligation or
liability owed to or claimed by any Person, whether arising under or based upon
contract, law or otherwise.

 

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“Liquid Assets” shall mean, in respect of any applicable Person(s) and as of any
applicable date of determination thereof, the sum of unrestricted cash,
unrestricted marketable securities, FDIC insured accounts and United States
government securities of such person(s) at such time, but excluding any assets
held in a “401K” account, individual retirement account (IRA), pension or other
type of retirement account or annuity, Rule 144 securities, securities pledged
to secure any debt whether or not the debt is currently outstanding, securities
not fully transferrable until conditions are met, and assets held in joint
accounts (unless such other joint owners of such accounts are also Guarantors).

 

“Loan(s)” means each present or future loan, advance or other extension of
credit made by Bank to or otherwise in favor of Borrower under the following:

 

(a)          $1,000,000.00 secured revolving line of credit (the “Revolving
Credit”).

 

“Loan Documents” means this Agreement, the Collateral Documents, and any and all
notes, instruments, documents, guarantees and agreements at any time evidencing,
governing, securing or otherwise relating to the Loan(s), including without
limitation the Loan Documents listed on the schedule to this Agreement.

 

“Loan Party” means each Borrower, each Guarantor and each other Person who
shall, at any time, be liable for the payment of all or any part of the
Indebtedness under the Loans or who shall own any property that is, at any time,
subject to a Lien which secures all or any part of the Indebtedness under the
Loans.

 

“Master Revolving Note” means that certain Master Revolving Note in the
principal amount of $1,000,000, made by Borrower for the benefit of the Bank
dated as of even date herewith, as amended or restated from time to time.

 

“Material Adverse Effect” means any act, event, condition or circumstance which
has had or could have a material and adverse effect on (i) the business,
operations, condition (financial or otherwise), performance, prospects, assets
or liabilities of any Loan Party, (ii) the ability of any Loan Party to perform
its obligations under any Loan Document to which it is a party or by which it is
bound, or the enforceability of any of the Indebtedness or any Loan Document or
any rights or remedies of Bank thereunder, or (iii) any Loan Party’s interest
in, or the value, perfection or priority of Bank’s security interest or lien in
any Collateral or the ability of Bank to realize on any Collateral.

 

“PBGC” means the Pension Benefit Guaranty Corporation, or any successor thereto.

 

“Person” or “person” means any individual, corporation, partnership, joint
venture, limited liability company, association, trust, unincorporated
association, joint stock company, government, municipality, political
subdivision or agency, or other entity.

 

“Property” means any real or personal property now or at any time owned,
occupied or operated by Borrower and/or any of its Subsidiaries (if applicable).

 

“Subordinated Debt" means any Debt of Borrower which has been subordinated to
the Indebtedness pursuant to a subordination agreement in form and content
satisfactory to Bank.

 

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“Subsidiary” or “Subsidiaries” means as to any particular parent entity, any
corporation, partnership, limited liability company or other entity (whether now
existing or hereafter organized or acquired) in which more than 50% of the
outstanding equity ownership interests having voting rights as of any applicable
date of determination, shall be owned directly, or indirectly through one or
more Subsidiaries, by such parent entity.

 

“Tax Distributions” means, in respect of any applicable Person, dividend
payments and other Distributions made by such Person to its respective
shareholders, members or other Person(s) holding Equity Interests therein, as
applicable, in an amount not to exceed the income tax liability, if any, of such
shareholders, members or other Person(s) arising or incurred directly as a
result of the pass-through of income items to such shareholders, members or
other Person(s) as a result of such Person’s status as a Subchapter S
corporation under the United States Internal Revenue Code, as amended, or as a
limited liability company, as applicable.

 

“Unencumbered” shall mean, in respect of any property or asset of any Person(s),
such property is free and clear of all liens (other than liens to or in favor of
Bank), and no lien of any nature whatsoever (other than liens in favor of Bank)
shall be placed or exist upon or in respect of any such property or asset.

 

“Uniform Commercial Code” means the Michigan Uniform Commercial Code, as
amended, supplemented, revised or replaced from time to time.

 

1.2           Accounting Principles. Unless expressly provided to the contrary,
all accounting and financial terms and calculations hereunder or pursuant hereto
shall be defined and determined in accordance with GAAP.

 

1.3           Section Headings and References. Section headings and numbers have
been set forth herein for convenience only; unless the contrary is compelled by
the context, everything contained in each Section applies equally to this entire
Agreement.

 

1.4           Construction and Interpretation. Unless the context of this
Agreement clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, and the term
“including” is not limiting. The words “hereof,” “herein,” “hereby,”
“hereunder,” and similar terms in this Agreement refer to this Agreement as a
whole and not to any particular provision of this Agreement. Neither this
Agreement nor any uncertainty or ambiguity herein shall be construed or resolved
against Bank or Borrower, whether under any rule of construction or otherwise;
on the contrary, this Agreement has been reviewed by all parties and shall be
construed and interpreted according to the ordinary meaning of the words used so
as to fairly accomplish the purposes and intentions of all parties hereto.

 

2.            LOANS; GUARANTEES; COLLATERAL.

 

2.1          Loans. This Agreement sets forth terms and conditions governing the
Loans including without limitation the following:

 

(a)          Revolving Credit. Subject to the terms and conditions of this
Agreement, Bank agrees to make loans to Borrower under the Revolving Credit on a
revolving basis in such amount as Borrower shall request, pursuant to the Master
Revolving Note, any time from the date hereof until that note becomes due and
payable (whether by demand, maturity, acceleration, or otherwise), up to an
aggregate principal amount outstanding at any time not to exceed the principal
amount of that note as it may be amended from time to time.

 

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(b)          Use of Loan Proceeds. Borrower will use the proceeds of the
Revolving Credit to refinance existing indebtedness owing from Bio Hi Tech
America, LLC owing to Bank, along with financing the Borrower’s working capital
requirements.

 

(c)          Future Loans. Unless Borrower and Bank expressly agree otherwise in
writing, the Loans and all future advances under the Loans will be subject to
this Agreement.

 

(d)          Notes. Each note evidencing one of the Loans shall bear interest at
the rate(s) set forth therein. Each note may be prepaid only in accordance with
its terms. The principal, interest and any other amounts due under each Note
shall be payable in the amounts and at the times set forth therein, with its
remaining balance due and payable on its respective maturity date or such
earlier date that the note becomes due and payable (whether by demand,
acceleration, or otherwise).

 

(e)          Fees for Loans. Borrower shall pay Bank the following fees for the
Loans. Each such fee, when due, shall be fully earned and, when paid, shall be
non-refundable.

 

(i)          On the date hereof Borrower shall pay Bank an upfront fee of
$2,500.00 for the Loans, which fee is deemed earned on the date hereof and when
paid is irrevocable and non-refundable.

 

(ii)          For the Revolving Credit, Borrower shall also pay to Bank an
unused credit fee for the period from the date hereof to and the maturity date
of the Revolving Credit as set forth in the Master Revolving Note, equal to
0.50% per annum on the average daily excess of the maximum amount of the
Revolving Credit over the outstanding principal balance under the Master
Revolving Note. Such unused credit fee shall be (A) calculated for each calendar
quarter (commencing with the quarter ending March 31, 2018), (B) payable on the
first Business Day of the succeeding calendar quarter (being in the first case,
April 1, 2018), and (C) computed on the basis of a year of 360 days and assessed
for the actual number of days elapsed.

 

(f)          [Reserved].

 

2.2           Collateral. To secure full and timely performance of Borrower’s
covenants set out in this Agreement and to secure the payment of the Loans,
Borrower agrees to grant and assign a Lien upon, and security interest in, the
Collateral identified and described in the Security Agreement and the Financing
Statements. Borrower authorizes Bank to file any initial Financing Statements
and all amendments describing any of the Collateral.

 

2.3           Guarantees. Borrower agrees to cause the Guarantors to execute and
deliver to Bank a guaranty of Borrower’s payment and performance of its
obligations under the Loans.

 

2.4           [Reserved].

 

2.5           Loan Documents. Each Loan shall be evidenced by a promissory note
or other agreement or evidence of indebtedness acceptable to Bank, in each case,
executed and delivered by Borrower unto Bank; and each Loan shall be subject to
the terms, covenants and conditions of each such promissory note or other
agreement or evidence of indebtedness, together with this Agreement and the
other Loan Documents. The funding, disbursement and extension of any Loan to or
in favor of Borrower shall be subject to the execution and/or delivery to Bank
of such Loan Documents as Bank may reasonably require, and shall be further
subject to the satisfaction of such other conditions and requirements as Bank
may from time to time require.

 

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2.6           Closing Conditions. Bank’s obligations, if any, to provide any of
the Loans under this Agreement are subject to Bank’s receipt of the following:

 

(a)          Each of the documents listed in the attached Closing Checklist, and
each duly executed by the applicable Loan Party(ies);

 

(b)          Reimbursement from Borrower for all costs and expenses then due in
accordance with Section 14;

 

(c)          Such other documents and completion of such other matters as Bank
may reasonably deem necessary or appropriate.

 

3.            REPRESENTATIONS AND WARRANTIES. Borrower, for and on behalf of
itself, hereby represents and warrants, and such representations and warranties
shall be deemed to be continuing representations and warranties during the
entire life of this Agreement, and thereafter, so long as any Indebtedness
remains unpaid and outstanding:

 

3.1          Authority. It is duly organized, validly existing and in good
standing under the laws of the State of its incorporation or organization, as
applicable; it is duly qualified and authorized to do business in each
jurisdiction where the character of its assets or the nature of its activities
makes such qualification necessary, and it has the legal power and authority to
own its properties and assets and to carry out its business as now being
conducted in each such jurisdiction wherein such qualification is necessary;
execution, delivery and performance of this Agreement, and any and all other
Loan Documents to which Borrower is a party or by which it is otherwise bound,
are within Borrower’s respective powers and authorities, have been duly
authorized by all requisite corporate or other necessary or appropriate action,
and are not in contravention or violation of law or the terms of Borrower’s
organizational or other governing documents, and do not require the consent or
approval of any governmental body, agency or authority.

 

3.2           Members. The members of Borrower are identified on the attached
Schedule of Members.

 

3.3           Enforceability of Agreement and Loan Documents. This Agreement,
and any other Loan Documents contemplated hereby, when executed, issued and/or
delivered by Borrower, or by which Borrower is otherwise bound, will be valid
and binding and legally enforceable against Borrower in accordance with their
terms.

 

3.4           Non-Contravention. The execution, delivery and performance of this
Agreement, and any other Loan Documents required under or contemplated by this
Agreement to which Borrower is a party or by which it is otherwise bound, and
the issuance of this Agreement and any such other Loan Documents by Borrower,
and the borrowings and other transactions contemplated hereby and thereby, are
not in contravention or violation of the unwaived terms of any indenture,
agreement or undertaking to which Borrower is a party or by which it or any of
its property or assets is bound, and will not result in the creation or
imposition of any Lien of any nature whatsoever upon any of the property or
assets of Borrower, except to or in favor of Bank.

 

3.5           [Reserved]

 

3.6           Litigation or Proceedings. No litigation or other proceeding
before any court or administrative agency is pending, or, to the knowledge of
Borrower or any of its officers, is threatened against Borrower, the outcome of
which could result in a Material Adverse Effect.

 

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3.7           Compliance with Law. Borrower has complied with all applicable
laws, rules, regulations and orders relating to Borrower or any aspect of
Borrower’s business or assets, including, without limit, all employment and
labor, pension funding, workplace safety, and environmental and hazardous
materials laws, rules, regulations and orders, except to the extent that failure
to comply therewith count not reasonably be expected to have a Material Adverse
Effect. Borrower agrees to indemnify and hold Bank harmless from any and all
violations by Borrower of any laws, rules, regulations and/or orders.

 

3.8           No Liens. There are no Liens on any of Borrower’s Property or
assets, except Permitted Encumbrances (as hereinafter defined).

 

3.9           Locations; Leases. All of Borrower’s assets and property are
located at the places identified on the attached Schedule of Locations, and at
no other place. Borrower is in compliance with all leases for those locations
and all leases of equipment used in Borrower’s business.

 

3.10         Intellectual Property. Borrower possesses and either owns, or has
the right to use, to the extent required or applicable, all necessary
trademarks, trade names, copyrights, patents, patent rights and licenses, trade
secrets and other intellectual property (“Intellectual Property”) which is
material to the conduct of its business as now operated. Borrower conducts its
business without infringement or, to its knowledge, claim of infringement of any
other intellectual property rights of any other Person, except where such
infringement or claim of infringement could not have a Material Adverse Effect.
There is no infringement or, to Borrower’s knowledge, claim of infringement by
others of any material Intellectual Property of Borrower.

 

3.11         No Defaults. There exists no Default or Event of Default under any
of the Indebtedness.

 

3.12         Financial Statements; No Material Adverse Change. The most recent
financial projections with respect to Borrower delivered to Bank fairly present
the projections of Borrower as of the date thereof and for the period(s) covered
thereby in accordance with GAAP, and there has been no material adverse change
in the condition (financial or otherwise) of Borrower which would negatively
affect those projections in a material manner.

 

3.13         Subsidiaries. As of the date of this Agreement, Borrower has no
Subsidiaries, except the Guarantors as disclosed on the attached Schedule of
Subsidiaries, which Schedule sets forth the name, place of incorporation, and
percentage of ownership of Borrower in each such Subsidiary.

 

3.14         Regulation T, U, or X; Margin Stock. Borrower is not engaged
principally, or as one of its important activities, in the business of extending
credit to others for the purpose of purchasing or carrying “margin stock” or
“margin securities” within the meanings of Regulations T, U or X of the Board of
Governors of the Federal Reserve System, or any regulations, interpretations or
rulings thereunder.

 

3.15         Legal Name. Borrower’s true and correct legal name is that set
forth on the signature page to this Agreement. Except as disclosed in writing to
Bank on or before the date of this Agreement, Borrower has not conducted
business under any name other than that set forth on the signature page to this
Agreement.

 

3.16         Solvency. Borrower is solvent and is able to pay its debts
(including, without limit, trade debts) as they mature.

 

3.17         Taxes. All taxes, assessments and other similar imposts and charges
levied, assessed or imposed upon Borrower and/or any of its property or assets
have been paid, except to the extent being diligently contested in good faith.

 

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3.18         Hazardous Materials. Borrower has not used Hazardous Materials on,
in, under or otherwise affecting any Property now or at any time owned, occupied
or operated by Borrower or upon which Borrower has a place of business in any
manner which violates any Environmental Law(s), to the extent that any such
violation could result in a Material Adverse Effect. Borrower has never received
any notice of any violation of any Environmental Law(s), and to the best of
Borrower’s knowledge, there have been no actions commenced or threatened by any
party against Borrower or any of the Property for non-compliance with any
Environmental Law(s), which, in any case, could result in a Material Adverse
Effect.

 

3.19         Guarantors. Each of the representations and warranties in Sections
3.1, 3.3 through 3.7, and 3.15 through 3.17 is true and correct mutatis mutandis
with respect to each of the Guarantors and, as applicable, the Loan Documents to
which they are parties

 

4.            AFFIRMATIVE COVENANTS. So long as Bank shall have any commitment
or obligation, if any, to make or extend any Loans to or in favor of Borrower,
and/or so long as any Indebtedness remains unpaid and outstanding, Borrower
covenants and agrees that it shall:

 

4.1          Financial Statements; Reporting Requirements. Provide to Bank, or
cause to be provided to Bank, the following, each of which shall be prepared in
accordance with GAAP, and shall be in form and detail acceptable to Bank:

 

(a)          As soon as available, and in any event within 120 days after and as
of the end of each fiscal year of BioHiTech Global, Inc., commencing with the
fiscal year ending December 31, 2017, annual CPA reviewed consolidating
financial statements of BioHiTech Global, Inc. (reflecting breakouts in the
balance sheet and income statement for the Borrower) for and as of the end of
each such fiscal year, containing the balance sheet of BioHiTech Global, Inc. as
of the close of each such fiscal year, statements of income and retained
earnings and a statement of cash flows of BioHiTech Global, Inc. for each such
fiscal year, and such other comments and financial details as are usually
included in similar reports or as may be requested by Bank, certified by an
Authorized Officer of BioHiTech Global, Inc.

 

(b)          As soon as available, and in any event within 35 days after and as
of the end of each month commencing with the month ending January 31, 2018,
internally prepared consolidated and consolidating financial statements of
Borrower, containing the balance sheet of Borrower as of the end of each such
period, statements of income and retained earnings and a statement of cash flows
for Borrower for such period and for the portion of the fiscal year of Borrower
through the end of the period then ending, and such other comments and financial
details as are usually included in similar reports or as may be requested by
Bank, certified by an Authorized Officer of Borrower.

 

(c)          [Reserved]

 

(d)          As soon as available, and in any event no later than the earlier of
fifteen (15) days after filing, and October 30 of every year, federal income tax
returns, together with all schedules, of each of Frank E. Celli and James
Chambers, together with copies of the annual personal financial statements of
Frank E. Celli and James Chambers for and as of the end of each such calendar
year, containing the balance sheet of each such Person as of each such date and
statements of income and contingent liabilities of each such Person for each
such annual period then ending, certified by each such Person as to accuracy and
fairness.

 

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(e)          As soon as available, and in any event within 30 days of the end of
each calendar quarter, such schedules, certificates, reports and other
information respecting all or any of Frank E. Celli’s and James Chambers’ Liquid
Assets as Bank may request, including brokerage account statements, in form and
content satisfactory to Bank. Any schedule, certificate, report or other
document identifying any Liquid Asset shall be accompanied (if Bank so requests)
by evidence of such Person’s ownership of the Liquid Asset, evidence that the
Liquid Asset is unencumbered and evidence of the Liquid Asset’s current value.

 

(f)          Promptly after becoming aware of the occurrence or existence of any
Default or Event of Default, or of any other condition, occurrence or event
which has had or could reasonably be expected to have a Material Adverse Effect,
a written statement of an Authorized Officer of Borrower setting forth the
details of such Default or Event of Default, or such other condition or
occurrence, and the action which Borrower has taken or caused to be taken, or
proposes to take or cause to be taken, with respect thereto.

 

(g)          Such other information concerning Borrower, any Loan Party and/or
any Guarantor as Bank shall reasonably request from time to time.

 

4.2          Financial Covenants. Cause Frank E. Celli and James Chambers to
maintain, in the aggregate, Unencumbered Liquid Assets having a value (as such
value is reasonably determined by Bank) equal to at least one hundred percent
(100%) of all outstanding Indebtedness of Borrower under the Loans. Such
covenant to be measured as of the end of every calendar quarter.

 

4.3          Keeping of Books and Records; Inspections and Audits. Keep proper
books of record and account in which full and correct entries shall be made of
all of its financial transactions and its assets and businesses so as to permit
the presentation of financial statements (including, without limitation, any
financial statements required to be delivered to Bank pursuant to this
Agreement) prepared in accordance with GAAP; permit Bank, or its
representatives, at reasonable times and intervals and upon reasonable prior
notice (provided no such notice is needed if an Event of Default has occurred
and is continuing), to visit all of Borrower’s offices and to make inquiries as
to Borrower’s respective financial matters with its respective directors,
officers, employees, and independent certified public accountants; and permit
Bank, through Bank’s authorized attorneys, accountants and representatives, to
inspect, audit and examine Borrower’s books, accounts, records, ledgers and
assets and properties of every kind and description, wherever located, at all
reasonable times during normal business hours and upon reasonable prior notice
(provided no such notice is needed if an Event of Default has occurred and is
continuing). Borrower shall reimburse Bank for all reasonable costs and expenses
incurred by Bank in connection with such inspections, examinations and audits,
and to pay to Bank such fees as Bank may reasonably charge in respect of such
inspections, examinations and audits, provided that, so long as no Event of
Default has occurred, Borrower shall be responsible for such fees for such
inspections, examinations and audits not more than twice per calendar year.

 

4.4          Maintain Insurance. Keep its insurable properties (including,
without limitation, any Collateral at any time securing all or any part of the
Indebtedness) adequately insured and maintain (i) insurance against fire and
other risks customarily insured against under an “all-risk“ policy and such
additional risks customarily insured against by companies engaged in the same or
a similar business to that of Borrower, (ii) necessary workers’ compensation
insurance, (iii) public liability and product liability insurance, and (iv) such
other insurance as may be required by law or as may be reasonably required in
writing by Bank, all of which insurance shall be in such amounts, contain such
terms, be in such form, be for such purposes, prepaid for such time periods, and
written by such companies as may be satisfactory to Bank. All such policies
shall contain a provision whereby they may not be canceled or materially amended
except upon thirty (30) days’ prior written notice to Bank. Borrower will
promptly deliver to Bank, at Bank’s request, evidence satisfactory to Bank that
such insurance has been so procured and, with respect to casualty insurance,
made payable to Bank. If Borrower fails to maintain satisfactory insurance as
herein provided, Bank shall have the option (but not the obligation) to do so,
and Borrower agrees to repay Bank, upon demand, with interest at the highest
rate of interest applicable to any of the Indebtedness, all amounts so expended
by Bank.

 

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4.5          Pay Taxes. Pay promptly and within the time that they can be paid
without late charge, penalty or interest, all taxes, assessments and similar
imposts and charges of every kind and nature lawfully levied, assessed or
imposed upon Borrower and/or its property or assets, except to the extent being
diligently contested in good faith and, if requested by Bank, bonded in an
amount and manner satisfactory to Bank. If Borrower fails to pay such taxes and
assessments within the time they can be paid without penalty, late charge or
interest, Bank shall have the option (but not the obligation) to do so, and
Borrower agrees to repay Bank, upon demand, with interest at the highest rate of
interest applicable to any of the Indebtedness, all amounts so expended by Bank.

 

4.6          Maintain Existence. Do or cause to be done all things necessary to
preserve and keep in full force and effect Borrower’s corporate or other
applicable existence, rights and franchises and comply with all applicable laws,
ordinances and government rules and regulations to which it is subject; continue
to conduct and operate its business substantially as conducted and operated
during the present and preceding calendar year; at all times maintain, preserve
and protect all franchises and trade names and preserve all the remainder of its
property and keep the same in good repair, working order and condition; maintain
all permits, licenses, approvals and agreements which it is required to maintain
or comply with, where the failure to do so could result in a Material Adverse
Effect; maintain Borrower’s same place(s) of business, chief executive office or
residence, as applicable, as currently exists, and not relocate said address(es)
without giving Bank ninety (90) days’ prior written notice of such proposed
change, but the giving of such notice shall not cure or remedy any Default or
Event of Default caused by such change; and from time to time make, or cause to
be made, all needed and proper repairs, renewals, replacements, betterments and
improvements thereto so that the business carried on in connection therewith may
be properly and advantageously conducted at all times.

 

4.7          Environmental Laws. Comply, and cause each of its Subsidiaries (to
the extent applicable) to comply, in all material respects with all applicable
Environmental Laws, and maintain all material permits, licenses and approvals
required under applicable Environmental Laws, where the failure to do so could
result in a Material Adverse Effect; and promptly provide to Bank, immediately
upon receipt thereof, copies of any material correspondence, notice, pleading,
citation, indictment, complaint, order, decree, or other document from any
source asserting or alleging a violation of any Environmental Laws by Borrower
and/or any of its Subsidiaries, or of any circumstance or condition which
requires or may require a financial contribution by Borrower and/or any of its
Subsidiaries, or a clean-up, removal, remedial action or other response by or on
behalf of Borrower and/or any of its Subsidiaries under applicable Environmental
Law(s), or which seeks damages or civil, criminal, or punitive penalties from
Borrower and/or any of its Subsidiaries for any violation or alleged violation
of any Environmental Law(s) by Borrower and/or any of its Subsidiaries. Borrower
hereby indemnifies, saves and holds Bank, and any of Bank’s past, present and
future officers, directors, shareholders, employees, representatives and
consultants, harmless from and against any and all losses, damages, suits,
penalties, costs, liabilities and expenses (including, without limitation,
reasonable legal expenses and attorneys’ fees) incurred or arising out of any
claim, loss or damage of any property, injuries to or death of any persons,
contamination of or adverse effects on the environment, or other violation or
asserted violation of any applicable Environmental Law(s); provided, however,
that the foregoing indemnification shall not be applicable, and Borrower shall
not be liable for any such losses, damages, suits, penalties, costs, liabilities
or expenses, to the extent (but only to the extent) the same arise or result
from any gross negligence or willful misconduct of Bank or any of its agents or
employees. The provisions of this Section shall survive repayment of the
Indebtedness and satisfaction of all obligations of Borrower to Bank and
termination of this Agreement.

 

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4.8          Maintain Bank Accounts. Establish within 60 days after closing, and
maintain all of Borrower’s and BioHiTech Global, Inc.’s principal bank accounts
with Bank and notify Bank immediately in writing of the establishment or
existence of any other bank account, deposit account or other account into which
money may be deposited (other than with Bank); provided, however, providing any
such notice to Bank shall not waive the occurrence or existence of any Default
or Event of Default arising or existing as a result of the establishment or
existence of any account(s) in violation of this Section.

 

4.9          ERISA Compliance. At all times meet, and cause each of its
Subsidiaries to meet, the minimum funding requirements of ERISA with respect to
any employee benefit plans subject to ERISA; promptly after Borrower knows or
has reason to know of the occurrence of any event, which would constitute a
reportable event or prohibited transaction under ERISA, or that the PBGC or
Borrower has instituted or will institute proceedings to terminate an employee
pension plan, deliver to Bank a certificate of an Authorized Officer of Borrower
setting forth details as to such event or proceedings and the action which
Borrower proposes to take with respect thereto, together with a copy of any
notice of such event which may be required to be filed with the PBGC; and upon
the request of Bank, furnish to Bank (or cause the plan administrator to furnish
Bank) a copy of the annual return (including all schedules and attachments) for
each plan covered by ERISA, and filed with the Internal Revenue Service by
Borrower or any of its Subsidiaries not later than ten (10) days after such
report has been so filed. Borrower shall be permitted to voluntarily terminate
employee pension or benefit plans, so long as any such voluntary termination is
done in accordance with ERISA and does not result in a material liability or
obligation to such Borrower and does not result in a Material Adverse Effect.

 

4.10        Subsidiaries. Cause all of Borrower’s Subsidiaries to comply with
the provisions of Sections 4.3 through 4.9 and 5.3 through 5.16 as if expressly
made by those Subsidiaries mutatis mutandis.

 

4.11        Treasury Management Systems. Maintain, and cause BioHitech Global
Inc. to maintain, at all times, its treasury management systems and loan
management systems with Comerica Bank or its Affiliates.

 

5.            NEGATIVE COVENANTS. So long as Bank shall have any commitment or
obligation, if any, to make or extend any Loans to or in favor of Borrower,
and/or so long as any Indebtedness remains unpaid and outstanding, Borrower
covenants and agrees that it shall not, without the prior written consent of
Bank:

 

5.1          Dividends. Declare or pay any dividends on, or make any other
Distribution (whether by reduction of capital or otherwise).

 

5.2          Redeem Stock. Purchase, redeem, retire or otherwise acquire any of
its Equity Interests, or make any commitment to do so.

 

5.3          Liens. Create, incur, assume or suffer to exist any Lien of any
kind upon any of its property or assets, whether now owned or hereafter
acquired, other than the following (collectively, “Permitted Encumbrances”):

 

(a)          Liens to or in favor of Bank;

 

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(b)          Liens for taxes, assessments or other governmental charges incurred
in the ordinary course of business and for which no interest, late charge or
penalty is attaching or which is being contested in good faith by appropriate
proceedings diligently pursued (provided the period of time for such
contestation does not exceed thirty (30) days and, if requested by Bank, bonded
in an amount and manner satisfactory to Bank;

 

(c)          Liens, not delinquent, created by statute in connection with
workers’ compensation, unemployment insurance, social security, old age pensions
(subject to the applicable provisions of this Agreement) and similar statutory
obligations;

 

(d)          Purchase money security interests to secure purchase money
indebtedness of Borrower otherwise expressly permitted under this Agreement, so
long as such security interests arise or are created substantially
contemporaneously with the purchase or acquisition by Borrower of the respective
property or assets to which such security interests relate and the incurrence of
the respective purchase money indebtedness which such security interests secure,
secure only the respective purchase money indebtedness so incurred by Borrower
to enable Borrower to so purchase or acquire such property or assets, and no
other Debt, and encumber only the respective property or assets so purchased or
acquired, and no other property or assets of Borrower;

 

(e)          Liens in favor of mechanics, materialmen, carriers, warehousemen or
other like statutory or common law Liens securing obligations incurred in good
faith in the ordinary course of business that are not yet due and payable; and

 

(f)          other Liens (if any) existing as of the date hereof and described
in the attached Schedule of Permitted Liens to secure Debt existing and
outstanding as of the date hereof, but no other Debt;

 

provided that, notwithstanding anything herein to the contrary, Borrower shall
not create, incur, assume or suffer to exist any Lien of any kind upon any of
its property or assets, whether now owned or hereafter acquired in favor of
BioHiTech Global, Inc., or any of its Affiliates.

 

5.4          Debt. Incur, create, assume or permit to exist any Debt of any kind
or nature whatsoever, except (without duplication) for (a) the Indebtedness, (b)
Subordinated Debt, (c) existing indebtedness (if any) to the extent set forth in
the attached Schedule of Debt or in the most recent financial statements of
Borrower delivered to Bank prior to the date of this Agreement, and (d)
unsecured trade indebtedness, utility indebtedness and non-extraordinary
accounts payable incurred and paid in the ordinary course of business.

 

5.5          Loans and Advances. Make loans, advances or extensions of credit to
any Person, except sales on open account in the ordinary course of business.

 

5.6          Transactions with Affiliates. Directly or indirectly enter into or
permit to exist any material transaction with any Affiliate of Borrower except
for transactions that are in the ordinary course of Borrower’s business, upon
fair and reasonable terms that are no less favorable to Borrower than would be
obtained in an arm’s length transaction with a non-affiliated Person.

 

5.7          Parent and Affiliate Debt. Incur, create, assume or permit to exist
any Debt of any kind or nature whatsoever from BioHiTech Global, Inc., or any of
its Affiliates, other than unsecured trade payables in connection with services
rendered and equipment purchases in the ordinary course of business.

 

5.8          Guaranties. Guarantee or otherwise, directly or indirectly, in any
way be or become responsible for obligations of any other Person, except (i)
guaranties in favor of Bank; and (ii) the endorsement of negotiable instruments
in the ordinary course of business for deposit or collection.

 

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5.9          Subordinate Indebtedness. Subordinate any indebtedness due to it
from any Person to indebtedness of other creditors of such Person.

 

5.10        Asset Dispositions; Dissolution; Mergers; Capital Structure;
Business Purpose. (a) Sell, lease (as lessor), transfer or otherwise dispose of
any of its properties or assets, except (i) as to the sale of inventory in the
ordinary course of business, or (ii) asset sales in an aggregate amount during
any fiscal year not in excess of One Hundred Thousand Dollars ($100,000.00); (b)
change its name, its corporate identity or structure, its form of organization
or the state in which it has been formed or organized; (c) dissolve or liquidate
or consolidate with or merge into any other Person, or permit any other Person
to merge into it; (d) acquire all or substantially all the properties or assets
of any other Person; (e) enter into any reorganization or recapitalization, or
reclassify its capital stock; (f) enter into any sale-leaseback transaction; (g)
permit any levy, attachment or restraint to be made affecting any of Borrower's
assets; (h) permit any judicial officer or assignee to be appointed or to take
possession of any or all of Borrower's assets; (i) make any other change in
Borrower's financial structure or in any of its business objects, purposes or
operations which, in the opinion of Bank, could result in a Material Adverse
Effect; (j) enter into any transaction not in the ordinary course of Borrower’s
business; or (k) make any payment on account of any Subordinated Debt in
violation of the provisions of any subordination agreement between Bank and the
applicable subordinated debt holder, or otherwise fail to comply with the terms
and conditions set forth in any such subordination agreement.

 

5.11        [Reserved]

 

5.12        Investments. Purchase or hold beneficially any stock or other
securities of, or make any investment or acquire any interest whatsoever in, any
other Person, except for (a) the Equity Interests of any Subsidiaries owned by
Borrower on the date of this Agreement, as more particularly described in the
Schedule of Subsidiaries attached hereto, (b) certificates of deposit or time
deposits with Bank, and (c) direct obligations of the United States of America,
or any agency thereof, maturing within one (1) year from the date of acquisition
thereof.

 

5.13        Apply Proceeds to Purchase or Carry Margin Stock. Apply any of the
proceeds of any loan, advance or other extension of credit by Bank to or in
favor of Borrower, directly or indirectly to the purchase or carrying of any
“margin stock” or “margin securities” within the meanings of Regulation T, U, or
X of the Board of Governors of the Federal Reserve System, or any regulations,
interpretations or rulings thereunder; or extend credit to others directly or
indirectly for the purpose of purchasing or carrying any such margin stock or
margin securities.

 

5.14        Pension Plans; PBGC. Allow any fact, condition or event to occur or
exist with respect to any employee pension or profit sharing plan established or
maintained by it which might constitute grounds for termination of any such plan
or for the court appointment of a trustee to administer any such plan; or permit
any such plan to be the subject of termination proceedings (whether voluntary or
involuntary) from which termination proceedings there may result in a liability
of Borrower to the PBGC which, in the opinion of Bank, will result in a Material
Adverse Effect.

 

5.15        Government Regulation. (a) Be or become subject at any time to any
law, regulation, or list of any government agency (including, without
limitation, the U.S. Office of Foreign Asset Control list) that prohibits or
limits Bank from making any advance or extension of credit to Borrower or from
otherwise conducting business with Borrower, or (b) fail to provide documentary
and other evidence of Borrower’s identity as may be requested by Bank at any
time to enable Bank to verify Borrower’s identity or to comply with any
applicable law or regulation, including, without limitation, Section 326 of the
USA Patriot Act of 2001, 31 U.S.C. Section 5318.

 

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5.16        Anti-Terrorism Laws. (a) Conduct any business or engage in any
transaction or dealing with any Person whose property or interests in property
is blocked or subject to blocking pursuant to Section 1 of Executive Order 13224
of September 23, 2001 (“Blocked Person”), including the making or receiving of
any contribution of funds, goods or services to or for the benefit of any
Blocked Person, (b) deal in, or otherwise engage in any transaction relating to,
any Property or interests in Property blocked under Executive Order No. 13224;
or (c) engage in or conspire to engage in any transaction that evades or avoids,
or has the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in the Executive Order No. 13224, the USA Patriot Act or
any other anti-terrorism law; or (d) fail to deliver to Bank any certification
or other evidence requested by Bank confirming compliance with this Section.

 

5.17        Accounting Changes. Change its fiscal year or make any significant
changes (a) in accounting treatment and reporting practices except as permitted
by GAAP and disclosed to Bank prior to use in any report required hereunder, or
(b) in tax reporting treatment except as permitted by law and disclosed to Bank.

 

6.            EVENTS OF DEFAULT. An “Event of Default” shall be deemed to have
occurred or exist under this Agreement upon the occurrence and/or existence of
any of the following conditions or events:

 

(a)          Borrower and/or any other Loan Party shall fail to pay the
principal of or interest on or shall otherwise fail to pay any other amount
owing by Borrower and/or such Loan Party to Bank, within five (5) days of when
due, whether under any of the Indebtedness or otherwise, and such default in
payment shall continue unremedied or uncured beyond any applicable period of
grace provided with respect thereto, if any, in the relevant Loan Document(s);

 

(b)          any representation, warranty, certification or statement made or
deemed to have been made by Borrower and/or any other Loan Party herein, or in
any certificate, financial statement or other document or agreement delivered by
or on behalf of Borrower and/or any such Loan Party in connection with the
Indebtedness or any of the Loan Documents shall prove to be untrue or incomplete
in any material respect;

 

(c)          Borrower shall fail to observe or perform any condition, covenant
or agreement set forth in Sections 4.1, 4.2, 4.3, 4.4, 4.6 or Section 5 herein;

 

(d)          Borrower and/or any other Loan Party shall fail to observe or
perform any condition, covenant or agreement of Borrower and/or any such Loan
Party set forth herein or in any other Loan Document (other than as provided in
subparagraphs (a) and (c) above) or any other agreement between any such
Person(s) and Bank, and such failure continues for a period of 30 days after the
earlier of written notice from Bank to Borrower or the date upon which Borrower
knew, or should have known, of the occurrence or existence of such failure;

 

(e)          if there shall be any change, for any reason whatsoever, in the
management, ownership or control of Borrower or any other Loan Party which, in
the sole discretion of Bank, could result in a Material Adverse Effect;

 

(f)          if (i) any party subordinating its claims to that of Bank's
terminates, rescinds, revokes or violates the terms of its subordination, or
(ii) any Loan Party (other than Borrower) dies or terminates, rescinds, revokes
or violates the terms of any guaranty, pledge, collateral assignment,
subordination agreement or other document, instrument or agreement entered into
by such Loan Party in favor of Bank, including, without limitation, any document
evidencing the pledge by such Loan Party of property that is subject to a Lien
which secures all or any part of the Indebtedness;

 

 15 

 

 

(g)          Borrower and/or any other Loan Party shall (i) fail to pay when due
any of its Debt (other than to Bank), or shall fail to observe or perform any
term, condition, covenant or agreement of Borrower and/or any such Loan Party
set forth in any document, instrument or agreement evidencing, securing or
relating to such Debt, and such failure shall remain unremedied or uncured
beyond any applicable period of grace or cure, if any, provided with respect
thereto so as to permit the holder(s) of such Debt to accelerate the maturity or
payment of such Debt, or (ii) or shall fail to observe or perform any term,
condition, covenant or agreement of Borrower and/or any such Loan Party set
forth in any material agreement, contract, indenture, instrument or undertaking
to which Borrower and/or any such Loan Party is a party with any one or more
third parties (other than Bank) or by which it may be otherwise bound, and such
failure could result in the acceleration of the maturity or payment of
Borrower's indebtedness to others, whether under any such agreement, contract,
indenture, instrument or undertaking or otherwise, or which failure could result
in a Material Adverse Effect;

 

(h)          if Borrower and/or any other Loan Party (i) become(s) insolvent or
the subject of a voluntary or involuntary proceeding in bankruptcy, or a
reorganization, arrangement or creditor composition proceeding, (ii) cease(s)
doing business as a going concern, (iii) is enjoined restrained or in any way
prevented by court order or other legal or administrative action or proceedings
from continuing to conduct all or any material part of its business affairs,
(iv) is the subject of a dissolution, merger or consolidation, or (v) has any of
its property or assets attached, seized, subject to a writ or distress warrant,
or come into the possession of any trustee, receiver, controller, custodian,
assignee for the benefit of creditors or any other person or entity having
powers or duties like or similar to the powers and duties of trustee, receiver,
controller, custodian or assignee for the benefit of creditors, and the same are
not released, discharged or bonded against within thirty (30) days thereafter;

 

(i)          if any reportable event, which the Bank determines constitutes
grounds for the termination of any deferred compensation plan by the PBGC or for
the appointment by the appropriate United States District Court of a trustee to
administer any such plan, shall have occurred and be continuing thirty (30) days
after written notice of such determination shall have been given to Borrower by
Bank, or any such plan shall be terminated within the meaning of Title IV of
ERISA, or a trustee shall be appointed by the appropriate United States District
Court to administer any such plan, or the PBGC shall institute proceedings to
terminate any plan;

 

(j)          if (i) there shall be rendered against Borrower and/or any other
Loan Party one or more judgments for the payment of money which has or have
become non-appealable and shall remain undischarged, unsatisfied by insurance
and unstayed for more than thirty (30) days, whether or not consecutive; or (ii)
a levy, lien, writ of attachment or garnishment against any of the property or
assets of Borrower and/or any other Loan Party shall be issued and levied in any
action(s) and not released or appealed and bonded in an amount and manner
satisfactory to Bank within thirty (30) days after such issuance and levy, or
(iii) a settlement, or a series of related settlements, is agreed upon by
Borrower and/or any other Loan Party for the payment or money or the delivery of
goods or services by Borrower and/or such Loan Party;

 

(k)          if (i) Bank deems itself insecure, in its commercially reasonable
discretion, believing that the prospect of payment or performance of any of the
Indebtedness is impaired or shall fear deterioration, removal or waste of any of
the Collateral; or (ii) in the opinion of Bank, a Material Adverse Effect has
resulted or occurred or could result or occur; or

 

 16 

 

 

(l)          the occurrence or existence of any “Default” or “Event of Default”,
as the case may be, set forth in any other Loan Document.

 

7.            REMEDIES. Upon the occurrence and at any time during the
continuance or existence of any Event of Default, Bank may, with or without
notice to Borrower, declare all outstanding Indebtedness to be due and payable,
whereupon all such Indebtedness then outstanding shall immediately become due
and payable, without further notice or demand, and any commitment or obligation,
if any, on the part of Bank to make or extend Loans shall immediately terminate.
Further, upon the occurrence or at any time during the continuance or existence
of any Event of Default hereunder, Bank may collect, deal with and dispose of
all or any part of any Collateral in any manner permitted or authorized by the
Uniform Commercial Code or other applicable law (including public or private
sale), and after deducting expenses (including, without limitation, reasonable
attorneys’ fees and expenses), Bank may apply the proceeds thereof in part or
full payment of any of the Indebtedness, whether due or not, in any manner or
order Bank elects. In addition to the foregoing, upon the occurrence and at any
time during the continuance or existence of any Event of Default hereunder, Bank
may exercise any and all rights and remedies available to it as a result
thereof, whether under this Agreement or other Loan Documents, at law
(including, without limit, the Uniform Commercial Code), or otherwise.
Notwithstanding anything to the contrary set forth in any other Loan Document,
Bank shall not be obligated to make or extend any Loans or advances to any
Borrower(s) during the existence of any Default or Event of Default.

 

8.            DEMAND BASIS LOANS. Borrower hereby acknowledges and agrees that
in the event that any of the Indebtedness shall at any time be on a demand
basis, Borrower’s compliance with the terms and conditions set forth herein, and
the absence of any Event of Default hereunder, shall not, in any way whatsoever,
limit, restrict or otherwise affect or impair Bank’s right or ability to make
demand for payment of any or all of such Indebtedness which may be on a demand
basis at any such time, in Bank’s sole and absolute discretion, with or without
reason or cause, and the existence of any Event of Default hereunder shall not
be the sole reason or basis for enabling Bank to make demand for payment of all
or any part of such Indebtedness.

 

9.            WAIVERS OF DEFAULTS; NO FORBEARANCE. No Event of Default shall be
waived by Bank except in writing and a waiver of any Event of Default shall not
be a waiver of any other default or of the same default on a future occasion. No
forbearance on the part of the Bank in enforcing any of its rights or remedies
under this Agreement or any other Loan Document, nor any renewal, extension or
rearrangement of any payment or covenant to be made or performed by Borrower
hereunder or any such other Loan Document, shall constitute a waiver of any of
the terms of this Agreement or such Loan Document or of any such right or
remedy. No single or partial exercise of any right, power or privilege
hereunder, or any delay in the exercise hereof, shall preclude other or further
exercise of the rights of the parties under this Agreement and/or the other Loan
Documents.

 

10.          GOVERNING LAW. THE PARTIES HEREBY AGREE THAT THIS AGREEMENT AND ALL
OTHER DOCUMENTS, INSTRUMENTS AND AGREEMENTS RELATED TO THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MICHIGAN,
WITHOUT REGARD TO ITS CONFLICTS OF LAW PROVISIONS.

 

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11.          VENUE AND JURISDICTION. BORROWER AND BANK EACH HEREBY IRREVOCABLY
AND UNCONDITIONALLY (I) CONSENTS AND SUBMITS TO THE SOLE AND EXCLUSIVE
JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE STATE OF MICHIGAN,
AND ANY APPELLATE COURT THEREOF, (II) AGREES THAT ALL ACTIONS AND PROCEEDINGS
BASED UPON, ARISING OUT OF, RELATING TO OR OTHERWISE CONCERNING THIS AGREEMENT
OR ANY OTHER DOCUMENT, INSTRUMENT OR AGREEMENT RELATED TO THIS AGREEMENT,
INCLUDING ALL CLAIMS FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, SHALL
SOLELY AND EXCLUSIVELY BE BROUGHT, HEARD, AND DETERMINED (LITIGATED) IN SUCH
COURTS, (III) ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, THE SOLE
AND EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS, (IV) WAIVES ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED UPON THE GROUNDS OF
FORUM NON CONVENIENS, THAT IT MAY NOW OR HEREAFTER HAVE TO BRINGING OR
MAINTAINING ANY SUCH ACTION OR PROCEEDING IN SUCH JURISDICTION, AND (V) AGREES
TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT,
OR ANY SUCH OTHER DOCUMENT, INSTRUMENT OR AGREEMENT. NOTHING HEREIN SHALL LIMIT
THE RIGHT OF BANK TO BRING ANY ACTION OR PROCEEDING AGAINST BORROWER OR ITS
PROPERTIES IN THE COURTS OF ANY OTHER JURISDICTION IN CONNECTION WITH THE
ENFORCEMENT OF ANY LIENS OR SECURITY INTERESTS IN FAVOR OF BANK ON ANY OF
BORROWER’S PROPERTIES OR ASSETS.

 

12.          SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and shall be binding upon the parties hereto and their respective successors
and assigns; provided, however, that Borrower shall not assign or transfer any
of its respective rights or obligations hereunder or otherwise in respect of any
of the Indebtedness without the prior written consent of Bank.

 

13.          COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall constitute an original instrument, but when
taken together shall constitute one and the same instrument.

 

14.          NOTICES. Unless otherwise provided in this Agreement, all notices
and other communications by any party to the other party(ies) relating to this
Agreement shall be in writing and shall be given by personal delivery, by United
States mail, postage prepaid, by reputable overnight courier or by facsimile,
and addressed or delivered to the respective party(ies) at the addresses set
forth below such party’s signature to this Agreement, or to such other addresses
as such party(ies) may from time to time specify to the other(s) in writing.
Requests for information made to Borrower by Bank from time to time hereunder
may be made orally or in writing, at Bank’s discretion.

 

15.          COSTS AND EXPENSES. Borrower shall pay or reimburse Bank for (a)
all costs, expenses, fees and charges paid or incurred by Bank (including,
without limitation, Bank's attorneys' fees and costs and/or fees, transfer
charges and costs of Bank's in-house counsel) in connection with the
preparation, closing and consummation of this Agreement and/or the other Loan
Documents and/or the Loans or transactions contemplated hereby or thereby, or in
connection with the administration or enforcement of this Agreement or any of
the other Loan Document, and (b) all stamp and other taxes and duties (except
for taxes on the overall net income of Bank imposed by the jurisdiction in which
Bank's principal executive office is located) payable or determined to be
payable in connection with the execution, delivery, filing or recording of this
Agreement and the other Loan Documents and the consummation of the transactions
contemplated hereby, and any and all liabilities with respect to or resulting
from any delay in paying or omitting to pay such taxes or duties. In addition,
Borrower shall immediately and without demand reimburse Bank for all sums
expended by Bank in connection with any action brought by Bank in respect of any
Default or Event of Default or to enforce any provision of this Agreement or the
other Loan Documents and/or to exercise or enforce any rights or remedies of
Bank. Borrower authorizes and approves all advances and payments by Bank for
items described in this Section as Indebtedness secured by the Collateral.

 

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16.          INDEMNIFICATION AND HOLD HARMLESS. WITHOUT LIMITING ANY OTHER
PROVISIONS OF THIS AGREEMENT, BORROWER AGREES TO INDEMNIFY AND HOLD BANK
HARMLESS FROM AND AGAINST ALL LOSSES, COSTS, DAMAGES, LIABILITIES AND EXPENSES,
INCLUDING, WITHOUT LIMITATION, IN-HOUSE AND OUTSIDE ATTORNEYS’ FEES AND
DISBURSEMENTS, INCURRED BY BANK IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS OR ANY LOANS OR TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY
OR BY REASON OF ANY DEFAULT OR EVENT OF DEFAULT, OR ENFORCING THE OBLIGATIONS OF
BORROWER OR ANY LOAN PARTY UNDER THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS, AS APPLICABLE, OR IN EXERCISING ANY RIGHTS OR REMEDIES OF BANK OR IN
THE PROSECUTION OR DEFENSE OF ANY ACTION OR PROCEEDING CONCERNING ANY MATTER
GROWING OUT OF OR CONNECTED WITH THIS AGREEMENT OR ANY OF THE LOAN DOCUMENTS;
PROVIDED, HOWEVER, THAT THE FOREGOING SHALL NOT BE APPLICABLE, AND THE BORROWER
SHALL NOT BE LIABLE FOR ANY SUCH LOSSES, COSTS, DAMAGES, LIABILITIES OR
EXPENSES, TO THE EXTENT (BUT ONLY TO THE EXTENT) THE SAME ARISE OR RESULT FROM
THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF BANK OR ANY OF ITS AGENTS OR
EMPLOYEES. THE PROVISIONS OF THIS SECTION SHALL SURVIVE REPAYMENT OF THE
INDEBTEDNESS AND SATISFACTION OF ALL OBLIGATIONS OF BORROWER TO BANK AND
TERMINATION OF THIS AGREEMENT.

 

17.          AMENDMENTS AND WAIVERS.         All amendments to or waivers or
terminations of this Agreement or the other Loan Documents must be in writing.
All prior agreements, understandings, representations, warranties, and
negotiations between the parties hereto with respect to the subject matter of
this Agreement and the other Loan Documents, if any, are hereby superseded and
merged into this Agreement and the Loan Documents. Time is of the essence for
the performance of all obligations set forth in this Agreement. Each provision
of this Agreement shall be severable from every other provision of this
Agreement for the purpose of determining the legal enforceability of any
specific provision. Borrower acknowledges that Bank may provide information
regarding Borrower and the Loans to Bank's parent, Subsidiaries, Affiliates and
service providers.

 

18.          [Reserved]

 

19.          REINSTATEMENT; SEVERABILITY. Bank’s rights under this Agreement and
the other Loan Documents shall be reinstated and revived, and the enforceability
of this Agreement and the other Loan Documents shall continue, with respect to
any amount at any time paid on account of the Indebtedness which thereafter
shall be required to be restored or returned by Bank, all as though such amount
had not been paid. The rights of Bank created or granted herein and the
enforceability of this Agreement and the other Loan Documents at all times shall
remain effective to cover the full amount of all the Indebtedness even though
the Indebtedness, including any part thereof or any other security or guaranty
therefor, may be or hereafter may become invalid or otherwise unenforceable as
against Borrower.

 

20.          WAIVER OF JURY TRIAL. BORROWER AND BANK ACKNOWLEDGE THAT THE RIGHT
TO TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED UNDER
CERTAIN CIRCUMSTANCES. TO THE EXTENT PERMITTED BY LAW, EACH PARTY, AFTER
CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR
CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT, WAIVE ANY RIGHT
TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR
ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS AGREEMENT OR THE INDEBTEDNESS.

 

[end of agreement—signature page follows]

 

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This Credit Agreement is effective as of the day and year first set forth above.

 

Comerica Bank   BHT Financial LLC         By:     By: BioHiTech Global, Inc.
Name: Jeff C. Andersen   Its: Member Title: Vice President           By:  
Address for Notices:   Name: Brian C. Essman     Title: Chief Financial Officer
411 W. Lafayette Blvd.     Detroit, Michigan 48226   Address for Notices:      
    80 Red Schoolhouse Road     Chestnut Ridge, New York 10977

 

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