[EXHIBIT 10.7]
[LOAN AGREEMENT WITH SOUTHTRUST BANK, N.A.]
PROMISSORY NOTE
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Principal Loan Date Maturity Loan No. Call/Coll Account Officer Initials
$205,327.00 03-12-2002 03-13-2005 0000250498 001/590 0955232160 LH4
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References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item. Any item
containing "***" has been omitted due to text length limitations.
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Borrower: PET MED EXPRESS, IN. Lender: SouthTrust Bank
(SSN:65-0000000) West Palm Beach
0000 XX 00xx Xxx. (Comm Loans - Ft. Lauderdale)
XXXXXXX XXXXX, XX 00000 000 X. Xxxxxxx Xxxxxxx
(0xx Xxxxx)
Xxxxxxx Xxxxx, XX 00000
(000) 000-0000
==============================================================================
Principal Initial Date of
Amount: $205,327.00 Rate: 5.750% Note: March 12, 2002
PROMISE TO PAY. PET MED EXPRESS, INC. ("Borrower") promises to pay to
SouthTrust Bank ("Lender"), or order, in lawful money of the United
States of America, the principal amount of Two Hundred Five Thousand
Three Hundred Twenty-seven & 00/100 Dollars ($295,327.00), together
with interest on the unpaid principal balance from March 12, 2002,
until paid in full.
PAYMENT. Subject to any payment changes resulting from changes in the
Index, Borrower will pay this loan in 35 principal payments of
$5,703.52 each and one final principal and interest payment of
$5,729.31. Borrower's first principal payment is due April 13, 2002,
and all subsequent principal payments are due on the same day of each
month after that. In addition, Borrower will pay regular monthly
payments of all accrued unpaid interest due as of each payment date,
beginning April 13, 2002, with all subsequent interest payments to be
due on the same day of each month after that. Borrower's final payment
due March 13, 2005, will be for all principal and all accrued interest
not yet paid. Unless otherwise agreed or required by applicable law,
payments will be applied first to accrued unpaid interest, then to
principal, and any remaining amount to any unpaid collection costs and
late charges. The annual interest rate for this Note is computed on a
365/360 basis; that is, by applying the ratio of the annual interest
rate over a year of 360 days, multiplied by the outstanding principal
balance, multiplied by the actual number of days the principal balance
is outstanding. Borrower will pay Lender at Lender's address shown
above or at such other place as Lender may designate in writing.
VARIABLE INTEREST RATE: The interest rate on this Note is subject to
change from time to time based on changes in an index which is the
"base rate." The term "base rate" means the rate of interest
designated by the Lender periodically as its Base Rate (the "Index").
The Index is not necessarily the lowest rate charged by Lender on its
loans and is set by Lender in its sole discretion. If the Index
becomes unavailable during the term of this loan, Lender may designate
a substitute index after notifying Borrower. Lender will tell Borrower
the current Index rate upon Borrower's request. The interest rate
change will not occur more often than each day. The frequency of the
rate change is further defined below in paragraph titled "VARIABLE
RATE CHANGE FREQUENCY". Borrower understands that Lender may make
loans based on other rates as well. The Index currently is 4.750% per
annum. The interest rate to be applied to the unpaid principal balance
of this Note will be at a rate of 1.000 percentage point over the
Index, resulting in an initial rate of 5.750% per annum. NOTICE:
Under no circumstances will the effective rate of interest on this
Note be more than the maximum rate allowed by law.
PREPAYMENT. Borrower may pay without penalty all or a portion of
the amount owed earlier than it is due. Early payments will not,
unless agreed to by Lender in writing, relieve Borrower of Borrower's
obligation to continue to make payments under the payment schedule.
Rather, early payments will reduce the principal balance due and may
result in Borrower's making fewer payments. Borrower agrees not to
send Lender payments marked "paid in full", "without recourse" or
similar language. If Borrower sends such a payment, Lender may accept
it without losing any of the Lender's rights under this Note, and
Borrower will remain obligated to pay any further amount owed to
Lender. All written communications concerning disputed amounts,
including any check or other payment instrument that indicates that
the payment constitutes "payment in full" of the amount owed or that
is tendered with other conditions or limitations or as full
satisfaction of a disputed amount must be mailed or delivered to:
SouthTrust Bank, West Palm Beach (Comm Loans - Ft. Lauderdale), 000 X
Xxxxxxx Xxxxxxx (0xx Xxxxx), Xxxxxxx Xxxxx, XX 00000
LATE CHARGE. If payment is 10 days or more late, Borrower will be
charged 5.000% of the unpaid portion of the regularly scheduled
payment of $10.00, whichever is greater.
INTEREST AFTER DEFAULT. Upon default, including failure to pay upon
final maturity, at Lender's option, and if permitted by applicable
law, Lender may add any unpaid accrued interest to principal and such
sum will bear interest therefrom until paid at the rate provided in
this Note. Upon default, the total sum due under this Note will bear
interest from the date of acceleration of maturity at the variable
interest rate on this Note.
DEFAULT. Each of the following shall constitute an event of default
("Event of Default") under this Note:
Payment Default. Borrower fails to make any payment when due
under this Note.
Other Defaults. Borrower fails to comply with or to perform any
other term, obligation, covenant or condition contained in this
Note or in any of the related documents or to comply with or to
perform any term, obligation, covenant or condition contained in
any other agreement between Lender and Borrower.
Default in Favor of Third Parties. Borrower or any Grantor
defaults under any loan, extension of credit, security agreement,
purchase or sales agreement, or any other agreement, in favor of
any other creditor or person that may materially affect any of
Borrower's property or Borrower's ability to repay this Note or
perform Borrower's obligations under this Note or any of the
related documents.
False statements. Any warranty, representation or statement made
or furnished to Lender by Borrower or on Borrower's behalf under
this Note or the related documents is false or misleading in any
material respect, either now or at the time made or furnished or
becomes false or misleading at any time thereafter.
Insolvency. The dissolution or termination of Borrower's
existence as a going business, the insolvency of Borrower, the
appointment of a receiver for any part of Borrower's property,
any assignment for the benefit of creditors, any type of creditor
workout, or the commencement of any proceeding under any
bankruptcy or insolvency laws by or against Borrower.
Creditor or Forfeiture Proceedings. Commencement of foreclosure
or forfeiture proceedings, whether by judicial proceeding, self-
help, repossession or any other method, by the creditor of
Borrower or by any governmental agency against any collateral
securing the loan. This includes a garnishment of any Borrower's
accounts, including deposit accounts, with Lender. However, this
Event of Default shall not apply if there is a good faith dispute
by Borrower as to the validity or reasonableness of the claim
which is the basis of the creditor or forfeiture proceeding and
if Borrower gives Lender written notice of the creditor or
forfeiture proceeding and deposits with Lender monies or a surety
bond for the creditor or forfeiture proceeding, in an amount
determined by Lender, in its sole discretion, as being an
adequate reserve or bond for the dispute.
Events Affecting Guarantor. Any of the preceding events occurs
with respect to any Guarantor of any of the indebtedness or any
Guarantor dies or becomes incompetent, ore revokes or disputes
the validity of, or liability under, any guaranty of the
indebtedness evidenced by this Note. In the event of a death,
Lender at its option, may, but shall not be required to, permit
the Guarantor's estate to assume unconditionally the obligations
arising under the guaranty in a manner satisfactory to Lender,
and, in doing so, cure any Event of Default.
Change in Ownership. Any change in ownership of twenty-five
percent (25%) or more of the common stock of Borrower.
Adverse Change. A material adverse change occurs in Borrower's
financial condition, or Lender believes the prospect of payment
or performance of this Note is impaired.
Insecurity. Lender in good faith believes itself insecure.
Cure provisions. If any default, other than a default in payment
is curable and if Borrower has not been given a notice of a
breach of the same provision of this Note within the preceding
twelve (12) months, it may be cured (and no event of default will
have occurred) if Borrower, after receiving written notice from
Lender demanding cure of such default: (1) cures the default
within fifteen (15) days; or (2) if the cure requires more than
fifteen (15) days, immediately initiates steps which Lender deems
in Lender's sole discretion to be sufficient to cure the default
and thereafter continues and completes all reasonable and
necessary steps sufficient to produce compliance as soon as
reasonably practical.
LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid
principal balance on this Note and all accrued unpaid interest
immediately due, and then Borrower will pay that amount.
Exhibit 10.7 - Pg. 1
PROMISSORY NOTE
Loan No: 0000250498 (Continued) Page 2
______________________________________________________________________
ATTORNEY'S FEES; EXPENSES. Lender may hire or pay someone else to help
collect this Note if Borrower does not pay. Borrower will pay Lender
the amount of these costs and expenses, which includes, subject to any
limits under applicable law, Lender's reasonable attorneys' fees and
Lender's legal expenses whether or not there is a lawsuit, including
reasonable attorneys' fees and legal expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay
or injunction), and appeals. If not prohibited by applicable law,
Borrower also will pay any court costs, in addition to all other sums
provided by law.
JURY WAIVER. Lender and Borrower hereby waive the right to any jury
trial in any action, proceeding, or counterclaim brought by either
Lender or Borrower against the other. (Initial Here /s/M.A.)
GOVERNING LAW. This Note will be governed by, construed and enforced
in accordance with federal law and the laws of the State of Florida.
This Note has been accepted by Lender in the State of Florida.
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender
reserves a right of setoff in all Borrower's accounts with Lender
(whether checking, savings, or some other account). This includes all
accounts Borrower holds jointly with someone else and all accounts
Borrower may open in the future. However, this does not include any
XXX or Xxxxx accounts, or any trust accounts for which setoff would be
prohibited by law. Borrower authorizes Lender, to the extent permitted
by applicable law, to charge or setoff all sums owing on the
indebtedness against any and all such accounts, and, at Lender's
option, to administratively freeze all such accounts to allow Lender
to protect Lender's charge and setoff rights provided in this
paragraph.
COLLATERAL. Borrower acknowledges this Note is secured by SEE EXHIBIT
"A" ATTACHED HERETO AND MADE A PART THEREOF.
CHANGE IN OWNERSHIP. Any aggregate change of twenty-five (25%) or more
in the ownership of the common stock or other ownership interest in
Borrower in any period of 12 consecutive months shall constitute a
default under this loan.
FINANCIAL STATEMENTS. Until this loan is paid in full, Borrower will
furnish to Lender, as soon as available but in any event within 120
days after the end of each fiscal year, Borrower's balance sheet and
statements of income, cash flows and changes in capital for the fiscal
year just ended, setting forth in comparative form the corresponding
figures for the prior year, together with accompanying schedules and
footnotes. If the financial statements were compiled or certified by a
public accountant, Borrower will also furnish Lender the accountant's
letter accompanying financial statements. Borrower will furnish to
Lender, as soon as available but in any event within 30 days after the
end of the first three quarters of Borrower's fiscal year, Borrower's
balance sheet and profit and loss statement for the quarter just
ended. All financial reports provided to Lender will be certified in
writing by the chief executive officer, chief financial officer,
managing partner or comparable financial officer of Borrower to be
true and complete to the best of his or her knowledge and belief and
to have been prepared in accordance with generally accepted accounting
principles applied on a basis consistent with the financial statements
previously furnished to Lender or, if not so prepared, setting forth
the manner in which the financial statements depart therefrom.
Borrower will furnish Lender, within 30 days after Lender's request
therefore, a copy of the federal income tax return most recently filed
by Borrower. Borrower will cause each guarantor or endorser of this
loan to furnish to Lender, within 30 days after Lender's request
therefore, a current financial statement of such guarantor or endorser
in form acceptable to Lender and a copy of the federal income tax
return most recently filed by such guarantor or endorser.
OBLIGATION TO DEVELOP BUSINESS PLAN. Before approving this loan,
Lender required Borrower to furnish
Lender with financial statements and other information concerning the
financial history and the future prospects of Borrower's business.
Lender requested and reviewed that information solely to enable it to
make a decision whether to extend credit. Borrower understands that
Lender has not necessarily approved Borrower's business plan and has
not undertaken any duty or obligation to advise borrower on business
matters now or in the future. Lender is not a financial or business
advisor, and Borrower will not look to Lender for business advice.
Lender's role is solely that of a Lender, and Borrower's relationship
with Lender is that of debtor and creditor. Lender expressly disclaims
any fiduciary or other duties or obligations to Borrower except those
expressly provided in the written loan documents signed by Lender.
NO ORAL AGREEMENTS. Lender's agreement to lend, Borrower's obligation
to repay the loan, and all other agreements between Lender and
Borrower have been reduced to writing. This instrument and the other
documents signed concurrently with it contain the entire agreement
between Lender and Borrower. Any prior conversations and discussions
that Lender or Borrower may have had concerning the transaction are
not binding unless reflected in the written loan documents. Borrower
acknowledges that the loan documents reflect everything the Lender has
agreed to do or not to do in connection with this transaction.
COMMERCIAL PURPOSES. Borrower intends to use the loan proceeds solely
for business or commercial related purposes and under no circumstances
will such proceeds be used for personal, family or household purposes.
VARIABLE RATE FREQUENCY. The interest rate change will occur each day
the Index Rate changes. This change will not occur more often than
once each day.
CROSS DEFAULT CLAUSE. IT IS UNDERSTOOD AND AGREED THAT IN THE EVENT A
DEFAULT EXISTS UNDER THE LOANS HELD BY THE LENDER IN WHICH PET MED
EXPRESS INC. IS BORROWER THEREUNDER, THEN THE LENDER MAY, AT ITS
OPTION, DECLARE THE ENTIRE ENDEBTEDNESS EVIDENCED HEREBY IMMEDIATELY
DUE AND PAYABLE.
SUCCESSOR INTERESTS. The terms of this Note shall be binding upon
Borrower, and upon Borrower's heirs, personal representatives,
successors and assigns, and shall inure to the benefit of Lender and
its successors and assigns.
NOTIFY US OF INACCURATE INFORMATION WE REPORT TO CONSUMER REPORTING
AGENCIES. Please notify us if we report any inaccurate information
about your account(s) to a consumer reporting agency. Your written
notice describing the specific inaccuracy(ies) should be sent to us at
the following address: SouthTrust Bank, West Palm Beach (Comm Loans -
Ft. Lauderdale), 000 X Xxxxxxx Xxxxxxx (0xx Xxxxx), Xxxxxxx Xxxxx, XX
00000
GENERAL PROVISIONS. If any part of this Note cannot be enforced, this
fact will not affect the rest of the Note. Borrower does not agree or
intend to pay, and Lender does not agree or intend to contract for,
charge, collect, take, reserve or receive (collectively referred to
herein as "charge or collect"), any amount in the nature of interest
or in the nature of a fee for this loan, which would in any way or
event (including demand, prepayment, or acceleration) cause Lender to
charge or collect more for this loan than the maximum Lender would be
permitted to charge or collect by federal law or the law of the State
of Florida (as applicable). Any such excess interest or unauthorized
fee shall, instead of anything stated to the contrary, be applied
first to reduce the principal balance of this loan, and when the
principal has been paid in full, be refunded to Borrower. Lender may
delay or forgo enforcing any of its rights or remedies under this Note
without losing them. Borrower and any other person who signs,
guarantees or endorses this Note, to the extent allowed by law, waive
presentment, demand for payment, and notice of dishonor. Upon any
change in the terms of this Note, and unless otherwise expressly
stated in writing, no party who signs this Note, whether as maker,
guarantor, accommodation maker or endorser, shall be released from
liability. All such parties agree that Lender may renew or extend
(repeatedly and for any length of time) this loan or release any party
or guarantor or collateral; or impair, fail to realize upon or perfect
Lender's security interest in the collateral; and take any other
action deemed necessary by Lender without the consent of or notice to
anyone. All such parties also agree that Lender may modify this loan
without the consent of or notice to anyone other than the party with
whom the modification is made. The obligations under this Note are
joint and several.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INITEREST RATE
PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE.
BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSARY
NOTE.
BORROWER:
PET MED EXPRESS, INC.
By:___________/s/Mendo Akdag________________
MENDO AKDAG, CEO of PET MED EXPRESS, INC.
Exhibit 10.7 - Pg. 2
Schedule A
(Loan Covenants)
To induce SouthTrust Bank (herein referred to as "Lender") to make the
loan pursuant to the Note (attached hereto) Pet Med Express, Inc.,
(herein referred to as "Borrower") and each guarantor hereby covenant
and agree, that so long as any indebtedness whatsoever due and owing
from Borrower to Lender shall remain outstanding and until full and
final payment of all outstanding indebtedness due and owing from
Borrower to Lender, unless the Lender waives compliance in writing,
Borrower and each Guarantor shall comply with the following
covenants:
1. Borrower shall provide to Lender a) Audited Fiscal Year End
Financial Statements of Borrower, in form and substance acceptable to
Lender, as soon as available and in any event no later than one
hundred twenty (120) days following the end of the fiscal year of
Borrower . b) Compiled quarterly Interim Financial Statements within
forty five (45) days of quarter end.
2. Guarantor shall provide to Lender a) Personal Financial
Statements annually, in form and substance to lender, as soon as
available but in any event no later than one hundred twenty (120) days
following year end. B0 Personal Guarantor Tax Returns annually within
fifteen (15) days of filing.
3. Borrower shall maintain an "all-risk" casualty insurance and
flood insurance policy insuring its property, covering full
replacement cost of said property and written through a company and in
an amount acceptable to Lender. Policy must provide at least 30-days
written notice of any cancellation, modification or non-renewal of
coverage, which must be in effect through the term of the loan.
Insurance premiums are required to be paid in full by the required due
dates with evidence of same provided to Lender.
4. Borrower shall not create or incur any future indebtedness except
from SouthTrust Bank. Borrower shall not merge, consolidate or
transfer assets. Borrower shall not guarantee or become contingently
liable for any future debt. Borrower shall not make any future loans.
5. This agreement shall be binding upon the parties hereto, their
respective heirs, personal representatives, successors and permitted
assigns.
Agreed to this 12 day of March, 2002.
BORROWER:
Pet Med Express, Inc.
By:____/s/Mendo Akdag________
Mendo Akdag, CEO
By:___/s/Marc Puleo__________
Xxxx Xxxxx, Guarantor
LENDER:
SouthTrust Bank
____/s/Antonio Coley_________
Xxxxxxx Xxxxx, Vice President
Exhibit 10.7 - Pg. 3
COMMERCIAL SECURITY AGREEMENT
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Principal Loan Date Maturity Loan No. Call/Coll Account Officer Initials
$205,327.00 03-12-2002 03-13-2005 0000250498 0001/590 0955232160 LH4
---------------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item. Any item
containing "***" has been omitted due to text length limitations.
---------------------------------------------------------------------------------------------------
Grantor: PET MED EXPRESS, IN. Lender: SouthTrust Bank
(SSN:65-0000000) West Palm Beach
0000 XX 00xx Xxx. (Comm Loans - Ft. Lauderdale)
XXXXXXX XXXXX, XX 00000 000 X. Xxxxxxx Xxxxxxx
(0xx Xxxxx)
Xxxxxxx Xxxxx, XX 00000
(000) 000-0000
==============================================================================
THIS COMMERCIAL SECURITY AGREEMENT dated March 12, 2002, is made and
executed between PET MED EXPRESS, INC. ("Grantor") and SouthTrust Bank
("Lender").
GRANT OF SECURITY INTEREST. For valuable consideration, Grantor grants
to Lender a security interest in the Collateral to secure the
Indebtedness and agrees that Lender shall have the rights stated in
this Agreement with respect to the Collateral, in addition to all
other rights which lender may have by law.
COLLATERAL DESCRIPTION. The word "Collateral" as used in this
Agreement means the following described property, whether now owned or
hereafter acquired, whether now existing or hereafter arising, and
wherever located, in which Grantor is giving Lender a security
interest for the payment of the Indebtedness and performance of all
other obligations under the Note of this Agreement:
SEE EXHIBIT "A" ATTACHED HERETO AND MADE A PART THEREOF.
In addition, the word "Collateral" also includes all the following,
whether now owned or hereafter acquired, whether now existing or
hereafter arising, and wherever located:
(A) All accessions, attachments, accessories, tools, parts,
supplies, replacements of and additions to any of the
collateral described herein, whether added now or later.
(B) All products and produce of any property described in this
Collateral section.
(C) All accounts, general intangibles, instruments, rents,
monies, payments, and all other rights, arising out of a sale,
lease or other disposition of any of the property described in
this Collateral section.
(D) All proceeds (including insurance proceeds) from the sale,
destruction, loss, or other disposition of any of the property
described in this Collateral section, and sums due from a
third party who has damaged or destroyed the Collateral or
from that party's insurer, whether due to judgment, settlement
or other process.
(E) All records and data relating to any of the property
described in this Collateral section, whether in the form of a
writing, photograph, microfilm, microfiche, or electronic
media, together with all of Grantor's right, title, and
interest in and to all computer software required to utilize,
create, maintain, and process any such records or data on
electronic media.
Despite any other provision of this Agreement, Lender is not granted,
and will not have, a nonpurchase security interest in household goods,
to the extent such a security interest would be prohibited by
applicable law. In addition, if because of the type of any Property,
Lender is required to give a notice of the right to cancel under Truth
in Lending for the Indebtedness, then Lender will not have a security
interest in such Collateral unless and until such a notice is given.
RIGHT OF SETOFF. To the extent permitted by applicable law, Lender
reserves a right of setoff in all Grantor's accounts with Lender
(whether checking, savings, or some other account). This includes all
accounts Grantor holds jointly with someone else and all accounts
Grantor may open in the future. However, this does not include any XXX
or Xxxxx accounts, or any trust accounts for which setoff would be
prohibited by law. Grantor authorizes Lender, to the extent permitted
by applicable law, to charge or setoff all sums owing on the
Indebtedness against any and all such accounts, and, at Lenders
option, to administratively freeze all such accounts to allow Lender
to protect Lender's charge and setoff rights provided in this
paragraph.
GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE
COLLATERAL. With respect to the Collateral, Grantor represents and
promises to Lender that:
Perfection of Security Interest. Grantor agrees to execute
financing statements and to take whatever other actions are
requested by Lender to perfect and continue Lender's security
interest in the Collateral. Upon request of Lender, Grantor will
deliver to Lender any and all of the documents evidencing or
constituting the Collateral, and Grantor will note Lender's
interest upon any and all chattel paper if not delivered to
Lender for possession by Lender.
Notices to Lender. Grantor will promptly notify Lender in writing
at Lender's address shown above (or such other addresses as
Lender may designate from time to time) prior to any (1) change
in Grantor's name; (2) change in Grantor's assumed business
names(s); (3) change in the management of the Corporation
Grantor; (4) change in the authorized signer(s); (5) change in
Grantor's principal office address; (6) change in Grantor's state
of organization; (7) conversion of Grantor to a new or different
type of business entity; or (8) change in any other aspect of
Grantor that directly or indirectly relates to any agreements
between Grantor and Lender. No change in Grantor's name or state
of organization will take effect until after Lender has received
notice.
No Violation. The execution and delivery of this Agreement will
not violate any law or agreement governing Grantor or to which
Grantor is a party, and is certificate or articles of
incorporation and bylaws do no prohibit any term or condition of
this agreement.
Enforceability of Collateral. To the extent the Collateral
consists of accounts, chattel paper, or general intangibles, as
defined by the Uniform Commercial Code, the Collateral is
enforceable in accordance with its terms, is genuine, and fully
complies with all applicable laws and regulations concerning
form, content and matter of preparation and execution, and all
persons appearing to be obligated on the Collateral have
authority and capacity to contract and are in fact obligated as
they appear to be on the Collateral. There shall be no setoffs or
counterclaims against any of the Collateral, and no agreement
shall have been made under which any deductions or discounts may
be claimed concerning the Collateral except those disclosed to
the Lender in writing.
Location of the Collateral. Except in the ordinary course of
Grantor's business, Grantor agrees to keep the Collateral at
Grantor's address shown above or at such other locations
acceptable to Lender. Upon Lender's request, Grantor will deliver
to Lender in form satisfactory to Lender a schedule of real
properties and Collateral locations relating to Grantor's
operations, including without limitation the following: (1) all
real property Grantor owns or is purchasing; (2) all real
property Grantor is renting or leasing; (3) all storage
facilities Grantor owns, rents, leases, or uses; and (4) all
other properties where Collateral is or may be located.
Removal of the Collateral. Except in the ordinary course of
Grantor's business, Grantor shall not remove the Collateral from
its existing location without Lender's prior written consent.
Grantor shall, whenever requested, advise Lender of the exact
location of the Collateral.
Transactions Involving Collateral. Except for inventory sold or
accounts collected in the ordinary course of Grantor's business,
or as otherwise provided for in this Agreement, Grantor shall not
sell, offer to sell, or otherwise transfer or dispose of the
Collateral. Grantor shall not pledge, mortgage, encumber or
otherwise permit the Collateral to be subject to any lien,
security interest, encumbrance, or interests even if junior in
right to the security interest granted under this Agreement.
Unless waived by Lender, all proceeds from any disposition of
the Collateral (for whatever reason) shall be held in trust for
Lender and shall not be commingles with any other funds; provided
however, this requirement shall not constitute consent by Lender
to any sale of other disposition. Upon receipt, Grantor shall
immediately deliver any such proceeds to Lender.
Title. Grantor represents and warrants to Lender that Grantor
holds good and marketable title to the Collateral, free and clear
of all liens and encumbrances except for the lien of this
Agreement. No financing statement covering any of the Collateral
is on file in any public office other than those which reflect
the security interest created by this Agreement or to which
Lender has specifically consented. Grantor shall defend Lender's
rights in the Collateral against the claims and demands of all
other persons.
Repairs and Maintenance. Grantor agrees to keep and maintain, and
to cause others to keep and maintain, the Collateral in good
order, repair and condition at all times while this Agreement
remains in effect. Grantor further agrees to pay when due all
claims for work done on, or services rendered or material
furnished in connection with the Collateral so that no lien or
encumbrance may ever attach to or be
Exhibit 10.7 - Pg. 4
COMMERCIAL SECURITY AGREEMENT
Loan No: 0000250498 (Continued) Page 2
______________________________________________________________________
filed against the Collateral.
Inspection of Collateral. Lender and Lender's designated
representatives and agents shall have the right at all reasonable
times to examine and insect the Collateral wherever located.
Taxes, Assessments and Liens. Grantor will pay when due all
taxes, assessments and liens upon the Collateral, its use or
operation, upon this Agreement, upon any promissory note or notes
evidencing the Indebtedness, or upon any of the other Related
Documents. Grantor may withhold any such payment or may elect to
contest any lien of Grantor is in good faith conducting an
appropriate proceeding to contest the obligation to pay and so
long as Lender's interest in the Collateral is not jeopardized in
Lender's sole opinion. If the Collateral is subjected to a lien
which is not discharged within fifteen (15) days, Grantor shall
deposit with Lender's cash, a sufficient corporate surety bond or
other security satisfactory to Lender in an amount adequate to
provide for the discharge of the lien plus any interest, costs,
reasonable attorneys' fees or other charges that could accrue as
a result of foreclosure or sale of the Collateral. In any contest
Grantor shall defend itself and Lender and shall satisfy any
final adverse judgment before enforcement against the Collateral.
Grantor shall name Lender as an additional obligee under any
surety bond furnished in the contest proceedings. Grantor further
agrees to furnish Lender with evidence that such taxes,
assessments, and governmental and other charges have been paid in
full and in a timely manner. Grantor my withhold any such payment
or may elect to contest any lien if Grantor is in good faith
conducting an appropriate proceeding to contest the obligation to
pay and so long as Lender's interest in the Collateral is not
jeopardized.
Compliance with Governmental Requirements. Grantor shall comply
promptly with all laws, ordinances, rules and regulations of all
governmental authorities, now or hereafter in effect, applicable
to the ownership, production, disposition, or use of the
Collateral. Grantor may contest in good faith any such law,
ordinance or regulation and withhold compliance during any
proceeding, including appropriate appeals, so long as Lender's
interest in the Collateral, in Lender's opinion, is not
jeopardized.
Hazardous Substances. Grantor represents and warrants that the
Collateral never has been, and never will be so long as this
Agreement remains a lien on the Collateral, used in violation of
any Environmental Laws or for the generation, manufacture,
storage, transportation, treatment, disposal, release or
threatened release of any Hazardous Substance. The
representations and warranties contained herein are based on
Grantor's due diligence in investigating the Collateral for
Hazardous Substances. Grantor hereby (1) releases and waives any
future claims against Lender for indemnity or contribution in the
event Grantor becomes liable for cleanup or other costs under any
Environmental Laws, and (2) agrees to indemnify and hold harmless
Lender against any and all claims and losses resulting from a
breach of this provision of this Agreement. The obligation to
indemnify shall survive the payment of the Indebtedness and the
satisfaction of this Agreement.
Maintenance of Casualty Insurance. Grantor shall procure and
maintain all risks insurance, including without limitation fire,
theft and liability coverage together with such other insurance
as Lender may require with respect to the Collateral, in form,
amounts, coverages and basis reasonably acceptable to Lender and
issued by a company or companies reasonably acceptable to Lender.
Grantor, upon request of Lender, will deliver to Lender and
issued by a company or companies reasonably acceptable to Lender.
Grantor, upon request of Lender, will deliver to Lender from time
to time the policies or certificates of insurance in form
satisfactory to Lender, including stipulations that coverages
will not be cancelled or diminished without at least ten (10)
days' prior written notice to Lender and not including any
disclaimer of the insurer's liability for failure to give such a
notice. Each insurance policy also shall include an endorsement
providing that with all policies covering assets in which Lender
holds or is offered a security interest, Grantor will provide
Lender with such loss payable or other endorsements as Lender may
require. If Grantor ay any time fails to obtain or maintain any
insurance as required under this Agreement, Lender may (but shall
not be obligated to) obtain such insurance as Lender deems
appropriate, including if Lender so chooses "single interest
insurance," which will cover only Lender's interest in the
Collateral.
Application of Insurance Proceeds. Grantor shall promptly notify
Lender of any loss or damage to the Collateral. Lender may make
proof of loss if Grantor fails to do so within fifteen (15) days
of the casualty. All proceeds of any insurance on the Collateral,
included accrued proceeds thereon, shall be held by Lender as
part of the Collateral. If Lender consents to repair or
replacement of the damaged or destroyed Collateral, Lender shall,
upon satisfactory proof of expenditure, pay or reimburse Grantor
from the proceeds for the reasonable cost of repair or
restoration. If Lender does not consent to repair or replacement
of the Collateral, Lender shall retain a sufficient amount of the
proceeds to pay all of the Indebtedness, and shall pay the
balance to Grantor. Any proceeds which have not been disburses
within six (6) months after their receipt and which Grantor has
not committed to the repair or restoration of the Collateral
shall be used to prepay the Indebtedness.
Insurance Reserves. Lender may require Grantor to maintain with
Lender reserves for payment of insurance premiums, which reserves
shall be created by monthly payments from Grantor of a sum
estimated by Lender to be sufficient to produce, at least fifteen
(15) days before the premium due date, amounts at least equal to
the insurance premiums to be paid. If fifteen (15) days before
the payment is due, the reserve funds are insufficient, Grantor
shall upon demand pay any deficiency to Lender. The reserve funds
shall be held by Lender as a general deposit and shall constitute
a non-interest-bearing account which Lender may satisfy by
payment of the insurance premiums required to be paid by Grantor
as they become due. Lender does not hold the reserve funds in
trust for Grantor, and Lender is not the agent of Grantor for
payment of the insurance premiums required to be paid by Grantor.
The responsibility for the payment of premiums shall remain
Grantor's sole responsibility.
Insurance Reports. Grantor, upon request of Lender, shall furnish
to Lender reports on each existing policy of insurance showing
such information as Lender may reasonably request including the
following: (1) the name of the insurer; (2) the risks insured;
(3) the amount of the policy; (4) the property insured; (5) the
then current value on the basis of which insurance has been
obtained and the manner of determining that value; and (6) the
expiration date of the policy. In addition, Grantor shall upon
request by Lender (however not more often than annually) have an
independent appraiser satisfactory to Lender determine, as
applicable, the cash value or replacement cost of the Collateral.
Financing Statements. Grantor authorizes Lender to files a UCC-1
financing statement, or alternatively, a copy of this Agreement
to perfect Lender's security interest. At Lender's request,
Grantor additionally agrees to sign all other documents that are
necessary to perfect, protect, and continue Lender's security
interest in the Property. Grantor will pay all filing fees, title
transfer fees, and other fees and costs involved unless
prohibited by law or unless Lender is required by law to pay such
fees and costs. Grantor irrevocably appoints Lender to execute
financing statements and documents of the title in Grantor's name
and to execute all documents necessary to transfer title if there
is a default. Lender may file a copy of the Agreement as a
financing statement. If Grantor changes Grantor's name or
address, or the name or address of any person granting a security
interest under this Agreement changes, Grantor will promptly
notify the Lender of such change.
GRANTOR'S RIGHT TO POSSESSION. Until default, Grantor may have
possession of the tangible personal property and beneficial use of all
the Collateral and may use it in any lawful manner not inconsistent
with this Agreement or the Related Documents, provided that Grantor's
right to possession and beneficial use shall not apply to any
Collateral where possession of the Collateral by Lender is required by
law to perfect Lender's security interest in such Collateral. If
Lender at any time has possession of any Collateral, whether before or
after an Event of Default, Lender shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral if
Lender takes such action for that purpose as Grantor shall request or
as Lender, in Lender's sole discretion, shall deem appropriate under
the circumstances, but failure to honor any request by Grantor shall
not of itself be deemed to be a failure to exercise reasonable care.
Lender shall not be required to take any steps necessary to preserve
any rights in the Collateral against prior parties, nor to protect,
preserve or maintain any security interest given to secure the
Indebtedness.
LENDER'S EXPENDITURES. If any action or proceeding is commenced that
would materially affect Lender's interest in the Collateral or if
Grantor fails to comply with any provision of this Agreement or any
Related Documents, including but not limited to Grantor's failure to
discharge or pay when due any amounts Grantor is required to discharge
or pay under this Agreement or any Related Documents, Lender on
Grantor's behalf may (but shall not be obligated to) take any action
that Lender deems appropriate, including but not limited to
discharging or paying all taxes, liens, security interest,
encumbrances and other claims, at any time levied or placed on the
Collateral and paying all costs for insuring, maintaining and
preserving the Collateral. All such expenditures incurred or paid by
Lender for such purposes will then bear interest at the rate charged
under the Note from the date incurred or paid by Lender to the date of
repayment by Grantor. All such expenses will become a part of the
Indebtedness and, at Lender's option, will (A) be payable on demand;
(B) be added to the balance of the Note and be apportioned among and
be payable with any installment payments to become due during either
(1) the term of any applicable insurance policy; or (2) the remaining
term of the Note; or (C) be treated as a balloon payment which will be
due and payable at the Note's maturity. The Agreement also will secure
payment of these amounts. Such right shall be in addition to all other
rights and remedies to which Lender may be entitled upon Default.
DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:
Exhibit 10.7 - Pg. 5
COMMERCIAL SECURITY AGREEMENT
Loan No: 0000250498 (Continued) Page 3
______________________________________________________________________
Other Defaults. Grantor fails to comply with or to perform any
other term, obligation, covenant or condition contained in this
Agreement or in any of the Related Documents or to comply with
or to perform any term, obligation, covenant or condition
contained in any other agreement between Lender and Borrower.
Default in Favor of Third Parties. Should Borrower or any Grantor
default under any loan, extension of credit, security agreement,
purchase or sales agreement, or any other agreement, in favor of
any other creditor or person that may materially affect any of
Borrower's property or Borrower's ability to repay this Note or
perform Borrower's obligations under this Note or any of the
Related Documents.
False Statements. Any warranty, representation or statement made
or furnished to Lender by Grantor or on Grantor's behalf under
this Agreement or the related documents is false or misleading in
any material respect, either now or at the time made or furnished
or becomes false or misleading at any time thereafter.
Defective Collateralization. This Agreement or any of the Related
Documents ceases to be in full force and effect (including
failure of any collateral document to create a valid and
perfected security interest or lien) at any time for any reason.
Insolvency. The dissolution or termination of Grantor's existence
as a going business, the insolvency of Grantor, the appointment
of a receiver for any part of Grantor's property, any assignment
for the benefit of creditors, any type of creditor workout, or
the commencement of any proceeding under any bankruptcy or
insolvency laws by or against Grantor.
Creditor or Forfeiture Proceedings. Commencement of foreclosure
or forfeiture proceedings, whether by judicial proceeding, self-
help, repossession or any other method, by the creditor of
Grantor or by any governmental agency against any collateral
securing the loan. This includes a garnishment of any Grantor's
accounts, including deposit accounts, with Lender. However, this
Event of Default shall not apply if there is a good faith dispute
by Grantor as to the validity or reasonableness of the claim
which is the basis of the creditor or forfeiture proceeding and
if Grantor gives Lender written notice of the creditor or
forfeiture proceeding and deposits with Lender monies or a surety
bond for the creditor or forfeiture proceeding, in an amount
determined by Lender, in its sole discretion, as being an
adequate reserve or bond for the dispute.
Events Affecting Guarantor. Any of the preceding events occurs
with respect to Guarantor of any Indebtedness or Guarantor dies
or becomes incompetent, ore revokes or disputes the validity of,
or liability under, any guaranty of the indebtedness.
Adverse Change. A material adverse change occurs in Grantor's
financial condition, or Lender believes the prospect of payment
or performance of this Note is impaired.
Insecurity. Lender in good faith believes itself insecure.
Cure provisions. If any default, other than a default in payment
is curable and if Grantor has not been given a notice of a
breach of the same provision of this Agreement within the
preceding twelve (12) months, it may be cured (and no event of
default will have occurred) if Grantor, after receiving written
notice from Lender demanding cure of such default: (1) cures the
default within fifteen (15) days; or (2) if the cure requires
more than fifteen (15) days, immediately initiates steps which
Lender deems in Lender's sole discretion to be sufficient to cure
the default and thereafter continues and completes all reasonable
and necessary steps sufficient to produce compliance as soon as
reasonably practical.
RIGHTS AND REMEDIES ON DEFAULT. If an Event or Default occurs under
this Agreement, at any time thereafter, Lender shall have all the
rights of a secured party under the Florida Uniform Commercial Code.
In addition and without limitation, Lender may exercise any one or
more of the following rights and remedies.
Accelerate Indebtedness. Lender may declare the entire
Indebtedness, including any prepayment penalty which Grantor
would be required to pay, immediately due and payable, without
notice of any kind to Grantor.
Assemble Collateral. Lender may require Grantor to deliver to
Lender all or any portion of the Collateral and any and all
certificates of title and other documents relating to the
Collateral. Lender may require Grantor to assemble the Collateral
and make it available to Lender at a place to be designated by
Lender. Lender also shall have full power to enter upon the
property of Grantor to take possession of and remove the
Collateral. If the Collateral contains other goods not covered by
this Agreement at the time of repossession, Grantor agrees Lender
may take other such goods, provided the Lender makes reasonable
efforts to return them to Grantor after repossession.
Sell the Collateral. Lender shall have full power to sell,
lease, transfer, or otherwise deal with the Collateral or
proceeds thereof in Lender's own name or that of Grantor. Lender
May sell the Collateral at public auction or private sale. Unless
the Collateral threatens to decline speedily in value or is of a
type customarily sold on a recognized market, Lender will give
Grantor, and all other persons required by law, reasonable notice
of the time and place of any pubic sale. The requirements of
reasonable notice shall be met if such notice is given at lease
ten (10) days before the time of the sale or disposition. All
expenses relating to the disposition of the Collateral, including
without limitation the expenses of retaking, holding, insuring,
preparing for sale and selling the Collateral, shall become part
of the Indebtedness secured by this Agreement and shall be
payable on demand, with interest at the Note rate from the date
of expenditure until repaid.
Appoint Receiver. In the event of a suit being instituted to
foreclose this Agreement, Lender shall be entitled to apply at
any time pending such foreclosure suit to the court having
jurisdiction thereof, from whatsoever source. The parties agree
that the court shall forthwith appoint such receiver with the
usual powers and duties of receivers in the cases. Such
appointment shall be made by the court as a matter of strict
right t Lender and without notice to Grantor, and without
reference to the adequacy or inadequacy of the value of the
Collateral, or to Grantor's solvency or any other party defendant
to such suit. Grantor hereby specifically waives the right to
object to the appointment of a receiver and agrees that such
appointment shall be made as admitted equity and as a matter of
absolute right to Lender, and consents to the appointment of any
officer or employee of Lender as receiver. Lender shall have the
right to have a receiver appointed to take possession of all or
any part of the Collateral, with the power to protect and
preserve the Collateral, to operate the Collateral, to operate
the Collateral preceding foreclosure or sale, and to collect the
Rents from the Collateral and apply the proceeds, over and above
the cost of receivership, against the Indebtedness. The receiver
may serve without bond if permitted by law. Lender's right to the
appointment of a receiver shall exist whether or not the apparent
value of the Collateral exceeds the Indebtedness by a substantial
amount. Employment by Lender shall not disqualify a person from
serving as a receiver.
Collect Revenues, Apply Accounts. Lender, either itself or
through a receiver, may collect the payments, rents, income and
revenues from the Collateral. Lender may at any time in Lender's
discretion transfer any Collateral into Lender's own name or that
of Lender's nominee and receive the payments, rents, income and
revenues therefrom and hold the same as security for the
Indebtedness or apply it to payment of the Indebtedness in such
order of preference as Lender may determine. Insofar as the
Collateral consists of accounts, general intangibles, insurance
policies, instruments, chattel paper, choses in action, or
similar property, Lender may demand, collect, receipt for,
settle, compromise, adjust, xxx for, foreclose, or realize on the
Collateral as Lender may determine, whether or not Indebtedness
or Collateral is then due. For these purposes, Lender may, on
behalf of and in the name of Grantor, receive, open and dispose
of mail addressed to Grantor; change any address to which mail
and payments are to be sent; and endorse notes, checks, drafts,
money orders, documents of title, instruments and items
pertaining to payment, shipment, or storage of any Collateral. To
facilitate collection, Lender may notify account debtors and
obligors on any Collateral to may payments directly to Lender.
Obtain Deficiency. If Lender chooses to sell any or all of the
Collateral, Lender may obtain a judgment against Grantor for any
deficiency remaining on the Indebtedness due to Lender after
application of all amounts received from the exercise of the
rights provided in this Agreement. Grantor shall be liable for a
deficiency even if the transaction described in this subsection
is a sale of accounts or chattel paper.
Other Rights and Remedies. Lender shall have all the rights and
remedies of a secured creditor under the provision of the Uniform
Commercial Code, as my be amended from time to time. In addition,
Lender shall have and may exercise any or all other rights and
remedies it may have available at law, in equity, or otherwise.
Election of Remedies. Except as may be prohibited by applicable
law, all of Lender's rights and remedies, whether evidenced by
this Agreement, the Related Documents, or by any other writing,
shall be cumulative and may be exercised singularly or
concurrently. Election by Lender to pursue any remedy shall not
exclude pursuit of any other remedy, and an election to make
expenditures or to take action to perform an obligation of
Grantor under this Agreement, after Grantor's failure to perform,
shall not affect Lender's right to declare a default and exercise
its remedies.
Exhibit 10.7 - Pg. 6
COMMERCIAL SECURITY AGREEMENT
Loan No: 0000250498 (Continued) Page 4
______________________________________________________________________
ADDITIONAL CROSS COLLATERALIZATION. In addition to the Note, this
Agreement secures all obligations, debts and liabilities, plus
interest thereon, of Borrower or Grantor to Lender, or any one or ore
of them, as well as all claims by Lender against Borrower or Grantor
or any on or more of them, whether now existing or hereafter arising,
whether related or unrelated to the purpose of the Note, whether
voluntary or otherwise, whether due or not due, direct or indirect,
determined or undetermined, absolute or contingent, liquidated or
unliquidated whether Borrower or Grantor may be liable individually or
jointly with others, whether obligated as guarantor, surety,
accommodation party or otherwise, and whether recovery upon such
amounts may be or hereafter may become barred by any statue of
limitations, and whether the obligation to repay such amounts may be
or hereafter may become otherwise enforceable.
CROSS DEFAULT CLAUSE. IT IS UNDERSTOOD AND AGREED THAT IN THE EVENT A
DEFAULT EXISTS UNDER THE LOANS HELD BY THE LENDER IN WHICH PET MED
EXPRESS, INC. IS BORROWER THEREUNDER, THEN THE LENDER MAY, AT ITS
OPTION, DECLARE THE ENTIRE INDEBTEDNESS EVIDENCED HEREBY IMMEDIATELY
DUE AND PAYABLE.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a
part of this agreement:
Amendments. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties
as to the matters set forth on this Agreement. No alteration of
or amendment to this Agreement shall be effective unless given in
writing and signed by the party or parties sought to be charged
or bound by the alteration or amendment.
Attorneys' Fees; Expenses. Grantor agrees to pay upon demand all
of Lender's costs and expenses, including Lender's reasonable
attorneys' fees and Lender's legal expenses, incurred in
connection with the enforcement of this Agreement. Lender may
hire or pay someone else to help enforce this Agreement, and
Grantor shall pay the costs and expenses of such enforcement.
Costs and expenses include Lender's reasonable attorneys' fees
and legal expenses whether or not there is a lawsuit, including
reasonable attorneys' fees and legal expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic
stay or injunction), appeals, and any anticipated post-judgment
collection services. Grantor also shall pay all court costs and
such additional fees as may be directed by the court.
Caption Headings. Caption headings in this Agreement are for
convenience purposes only and are not to be used to interpret or
define the provisions of this Agreement.
Governing Law. This agreement will be governed by, construed and
enforced in accordance with federal law and the laws of the Stare
of Florida. This Agreement has been accepted by Lender in the
State of Florida.
No Waiver by Lender. Lender shall not be deemed to have waived
any rights under this Agreement unless such waiver is given in
writing and signed by Lender. No delay or omission on the part of
Lender in exercising any right shall operate as a waiver of such
right or any other right. A waiver by Lender of a provision of
this Agreement shall not prejudice or constitute a waiver of
Lender's right otherwise to demand strict compliance with that
provision or any other provision of this Agreement. No prior
waiver by Lender, nor any course of dealing between Lender and
Grantor, shall constitute a waiver of any of Lender's rights or
of any of Grantor's obligations as to any future transactions.
Whenever the consent of Lender is required under this Agreement,
the granting of such consent by Lender in any instance shall not
constitute continuing consent to subsequent instances where such
consent is required and in all cases such consent may be granted
or withheld in the sole discretion of Lender.
Notices. Any notice required to be given under this Agreement
shall be given in writing, and shall be effective when actually
delivered, when actually received by telefacsimile (unless
otherwise required by law), when deposited with a nationally
recognized overnight courier, or, if mailed, when deposited in
the United States mail, as first class, certified or registered
mail postage prepaid, directed to the addresses shown near the
beginning of this Agreement. Any party may change its address for
notices under this Agreement by giving written notice to the
other parties, specifying that the purpose of the notice is the
change the party's address. For notice purposes, Grantor agrees
to keep Lender informed at all times of Grantor's current
address. Unless otherwise provided or required by law, if there
is more than one Grantor, any notice given by Lender to any
Grantor is deemed to be notice given to all Grantors.
Power of Attorney. Grantor hereby appoints Lender as Grantor's
irrevocable attorney-in-fact for the purpose of executing any
documents necessary to perfect, amend, or to continue the
security interest granted in this Agreement or to demand
termination of filings of other secured parties. Lender may at
any time, and without further authorization from Grantor, file a
carbon, photographic or other reproduction of any financing
statement or of this Agreement for use as a financing statement.
Grantor will reimburse Lender for all expenses for the perfection
and the continuation of the perfection of Lender's security
interest in the Collateral.
Severability. If a court of competent jurisdiction finds any
provision of this Agreement to be illegal, invalid, or
unenforceable as to any circumstance, that finding shall not make
the offending provision illegal, invalid, or unenforceable s to
any other circumstance. If feasible, the offending provision
shall be considered modified so that it becomes legal, valid and
enforceable. If the offending provision cannot be so modified, it
shall be considered deleted from this Agreement. Unless otherwise
required by law, the illegality, invalidity, or unenforceability
of any provision of this Agreement shall not affect the legality,
validity or enforceability of any other provision of this
Agreement.
Successors and Assigns. Subject to any limitations stated in this
Agreement on transfer of Grantor's interest, this Agreement shall
be binding upon and inure to the benefit of the parties, their
successors and assigns. If ownership of the Collateral becomes
vested in a person other than Grantor, Lender, without notice to
Grantor, may deal with Grantor's successors with reference to
this Agreement or liability under the Indebtedness.
Survival of Representations and Warranties. All representations,
warranties, and agreements made by Grantor in this Agreement
shall survive the execution and delivery of this Agreement, shall
be continuing in nature, and shall remain in full force and
effect until such time as Grantor's Indebtedness shall be paid in
full.
Time is of the Essence. Time is of the essence in the performance
of this Agreement.
Waive Jury. All parties to this Agreement hereby waive the right
to any jury trial in any action, proceeding, or counterclaim
brought by any party against any other party. (Initial here /s/M.A.)
DEFINITIONS. The following capitalized words and terms shall have the
following meanings when used in this Agreement. Unless specifically
stated to the contrary, all references to dollar amounts in lawful
money of the United States of America. Words and terms used in the
singular shall include the plural and the plural shall include the
singular, as the context may require. Words and terms not otherwise
defined in this Agreement shall have the meanings attributed to such
terms in the Uniform Commercial Code.
Agreement. The word "Agreement" means this Commercial Security
Agreements, as this Commercial Security Agreement may be amended
or modified from time to time, together with all exhibits and
schedules attached to this Commercial Security Agreement from
time to time.
Borrower. The word "Borrower" means PET MED EXPRESS, INC., and
all other persons and entities signing the note in whatever
capacity.
Collateral. The word "Collateral" means all of Grantor's right,
title and interest in and to all the Collateral as described in
the Collateral Description section of this Agreement.
Default. The word "Default" means the Default set forth in this
Agreement in the section titled "Default".
Environmental Laws. The words "Environmental Laws" mean any and
all state, federal and local statutes, regulations and ordinances
relating to the protection of human health or the environment,
including without limitation the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, 42
U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments
and Reauthorization Act of 1986, Pub. L. No. 99-499 ("XXXX"), the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801,
et seq., the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901, et seq., or other applicable state or federal laws,
rules or regulations adopted pursuant thereto.
Event of Default. The words "Event of Default" mean any of the
events of default set forth in this Agreement in the default
section of this Agreement.
Grantor. The word "Grantor" means PET MED EXPRESS, INC.
Guarantor. The word "Guarantor" means any guarantor, surety, or
accommodation party of any or all of the Indebtedness.
Guaranty. The word "Guaranty" means the guaranty from Guarantor
to Lender, including without limitation a guaranty of all or part
of the Note.
Exhibit 10.7 - Pg. 7
COMMERCIAL SECURITY AGREEMENT
Loan No: 0000250498 (Continued) Page 5
______________________________________________________________________
Hazardous Substances. The words "Hazardous Substances" mean
materials that, because of their quantity, concentration or
physical, chemical or infectious characteristics, may cause or
pose a present or potential hazard to human health or the
environment when improperly used, treated, stored, disposed of,
generated, manufactured, transported or otherwise handled. The
words "Hazardous Substances" are used in their very broadest
sense and include without limitation any and all hazardous or
toxic substances, materials or waste as defined by or listed
under the Environmental Laws. The term "Hazardous Substances"
also includes, without limitation, petroleum and petroleum by-
products or any fraction thereof and asbestos.
Indebtedness. The word "Indebtedness" means the indebtedness
evidenced by the Note or Related Documents, including all
principal and interest together with all other indebtedness and
costs and expenses for which Grantor is responsible under this
Agreement or under any of the Related Documents.
Lender. The word "Lender" means SouthTrust Bank, its successors
and assigns.
Note. The word "Note" means the Note executed by PET MED EXPRESS,
INC. in the principal amount of $205, 327.00 dated March 12,
2002, together with all renewals of, extensions of, modifications
of, refinancings of, consolidations of, and substitutions for the
note or credit agreement.
Property. The word "Property" means all of Grantor's right, title
and interest in and to all the Property as described in the
"Collateral Description" section of this Agreement.
Related Documents. The words "Related Documents" mean all
promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, security agreements,
mortgages, deeds of trust, security deeds, collateral mortgages,
and other instruments, agreements and documents, whether now or
hereafter existing, executed in connection with the Indebtedness.
GRANTOR HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL
SECURITY AGREEMENT AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED
MARCH 12, 2002.
GRANTOR
PET MED EXPRESS, INC.
By:_____/s/Mendo Akdag______________________
MENDO AKDAG, CEO of PET MED EXPRESS, INC.
Exhibit 10.7 - Pg. 8
UCC FINANCING STATEMENT
FOLLOW THE INSTRUCTIONS (front and back) CAREFULLY
A. NAME & PHONE OF CONTACT AT FILER [optional]
B. SEND ACKNOWLEDGEMENT TO: (Name and Address)
SouthTrust Bank
1700 Palm Beach Lakes Blvd
Suite 000
Xxxx Xxxx Xxxxx, XX 00000
THE SPACE ABOVE IS FOR
FILING OFFICE USE ONLY
____________________________________________________________________________
1. DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name (1a or
1b) - do not abbreviate or combine names
1a. ORGANIZATION'S NAME
PET MED EXPRESS, INC. (Loan #0955232160-250498)
OR _________________________________________________________________________
1b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME
SUFFIX
____________________________________________________________________________
1c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
0000 XX 00XX XXX XXXXXXX XXXXX XX 00000 XXX
____________________________________________________________________________
1d. TAX ID#. SSN OR EIN ADD'L INFO RE 1e. TYPE OF ORGANIZATION
ORGANIZATION
00-0000000 DEBTOR Corporation
_________________________________________________________________________
1f. JURISDICTION OR ORGANIZATION 1g. ORGANIZATIONAL ID #, if any
FL N/A [ ] NONE
____________________________________________________________________________
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor
name (2a or 2b) - do not abbreviate or combine names
2a. ORGANIZATION'S NAME
OR _________________________________________________________________________
2b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME
SUFFIX
____________________________________________________________________________
2c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
____________________________________________________________________________
2d. TAX ID#. SSN OR EIN ADD'L INFO RE 2e. TYPE OF ORGANIZATION
ORGANIZATION
DEBTOR
_________________________________________________________________________
2f. JURISDICTION OR ORGANIZATION 2g. ORGANIZATIONAL ID #, if any
[ ] NONE
____________________________________________________________________________
3. SECURED PARTY'S NAME (or NAME of TOTAL ASSIGNEE of ASSIGNOR S/P -
insert only one secured party name (3a or 3b)
3a. ORGANIZATION'S NAME
SouthTrust Bank
OR _________________________________________________________________________
3b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME
SUFFIX
_________________________________________________________________________
3c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY
000 X Xxxxxxx Xxxxxxx XXXXXXX XXXXX XX 00000
(0xx Xxxxx)
____________________________________________________________________________
4. This FINANCING STATEMENT covers the following collateral:
SEE ATTACHED EXHIBIT "A" ATTACHED HERETO AND MADE A PART THEREOF.
____________________________________________________________________________
5. ALTERNATIVE DESIGNATION [if applicable]:
[ ] LESSEE/LESSOR [ ] CONSIGNEE/CONSIGNOR [ ] BAILEE/XXXXXX
[ ] SELLER/BUYER [ ] AG.LIEN [ ] NON-UCC FILING
____________________________________________________________________________
6. [X] THIS FINANCING STATEMENT is to be filed [for record] (or recorded) in
the REAL ESTATE RECORDS
Attach Addendum [if applicable]
____________________________________________________________________________
7. Check to REQUEST SEARCH REPORT (S) on Debtor(s)
[ADDITIONAL FEE] [optional]
[ ] All debtors [ ] Debtor 1 [ ] Debtor 2
____________________________________________________________________________
8. OPTIONAL FILER REFERENCE DATA
FLORIDA DOCUMENTARY STAMP TAX HAS BEEN PAID.
____________________________________________________________________________
FILING OFFICE COPY - NATIONAL UCC FINANCING STATEMENT (FORM UCC1)
(REV. 07/29/98)
Xxxxxxx Financial Solutions
000 X.X. 0xx Xxxxxx, Xxxxxxxx, Xxxxxx 00000
Exhibit 10.7 - Pg. 9
EXHIBIT A
Qty Prod # Description
1 A4902A HP9000 Std Rack System E41 2 A3583A 0D1 Factory integrated
1 A3639C HP server rp7400 Ent. Server Solution 1 B6951BA OV Omniback II Cell Mgr HP-UX, LTU only
6 A6688A 000 XXx XX0000 CPU 2.25MB cache 1 B6951BA 3Y6 Three Years of System Support Option
6 A6688A 0D1 Factory integrated 1 B6960AA OV OB 3.5 all Media, Manuals HP-UX / Win
3 A6689A Processor Support Mod. for 650, 750 CPUs 1 C4315A SMART Field Int. DVD-ROM module
3 A6689A 0D1 Factory integrated 1 C4317A Smart Field Int half-ht Enclosure
4 A4923A 1024MB High Density SyncDRAM Memory Mod 1 C7745RA HP SureStore DLT Autoldr 1/9 HVDS Rk
4 A4923A 0D1 Factory integrated 1 C7745RA ABA U.S. - English localization
1 A4882A HP server rp74X0 Memory Carrier Board 1 A3401A SCSI Cables for HP Storage Solutions
1 A4882A 0D1 Factory integrated 1 A3401A 812 2.5 M VHDCI to 68 pin HD SCSI cable
2 A6739A 18GB HotPlug Ultra160 SCSI LP Disk 1 C2972A SCSI Terminator Active SE HDTS68
2 A6739A 0D1 Factory integrated 9 C5141F HP DLT/IV Data Cartridge,40/70/80GB,qty1
2 A5158A One Port PCI 2x Fibre Channel Adapter 1 C5142A HP DLTtape cleaning cartridge 1 piece.
2 A5158A 0D1 Factory integrated 1 C7740R HP Autoloader 1/9 Rackmount Kit
1 A4800A PCI FWD SCSI-2 card for HP 9000 Servers 1 H4405Y 24x7 System Support, Phone/Updates, 3yr
1 A4800A 0D1 Factory integrated 1 H4405Y 0BC Manuals on CD-ROM
2 A4926A 1000BaseSX PCI LAN Adapter 1 H4405Y 447 Support -SMART Intgr Module
2 A4926A 0D1 Factory integrated 1 H4405Y 451 Support -HP SureStore DLT/LTO Autoloader
1 A6735A Racking Kit for HP server rp7400 1 H4405Y 615 Support - N4000/rp7400 Server Solution
1 A6735A 0D1 Factory integrated 6 H4405Y 616 Support - N4000/rp7400 CPU
1 B7993AA HP-UX Enterprise OE Server Media 2 H4405Y 699 For Internal Entitlement Purposes
1 B7993AA UM9 HP-UX version 11i 6 H4405Y 6M2 Support - Enterprise OE per processor
1 B7993AA AAF CD-ROM (disk only) 1 H4405Y 8AE Support - VA 7100 w/ Dual Controller
1 B7993AA 0D1 Factory integrated 9 H4405Y 8AL Support-EntrprseClass18GB 15K RPM FC HDD
1 B7993AA ABA U.S. - English localization 1 H4405Y AAF CD-ROM (disk only)
6 B9090AC HP-UX Enterprise OE LTU 1 CPU w/ system 1 H4725A Installation - System and Network
1 A6262AZ VA 7100 Dual Cntl,512MB Cache Fact Inst 1 H4725A 562 Installation -Add-On Storage Component
9 A6191A Enterprise Class 18GB 15K RPM FC HDD. 1 H4725A 590 Install - Sure Store Autoloader SA
9 A6191A 0D1 Factory integrated 1 H4725A 594 Installation - SMART Storage Enclosure
1 A6584A PowerTrust II-MR 6.5 kW (9 kVA) UPS 230V 1 H4726A Implementation or Network Configuration
1 A6584A 009 6-50p Input w/PDP-2 Output US/Japan 1 H4726A 510 Installation -N-Class Server
1 A6584A 0D1 Factory integrated 9 H4726A 5CG Installation - HP VA 18GB HDD
1 A5543AZ X00 Xxxxx Xxx. Kit, Factory Integrated 1 H4726A 5CM Installation - HP VA7100, 512MB
1 A5213AZ Rear Door for Std. Rack System E41 1 A6749A PCI 64 port serial MUX adapter
2 A5137AZ Modular Power Dist. Unit for std racks 1 A6749A 001 Port Module Accessory Kit
2 A5137AZ A5N 250V/16Amp 2.5M PDU jumper cord C19/C20 1 A6749A 0D1 Factory integrated
2 A3583A Fbr Optic Cable 2m SC Duplex 50/125 M/M 1 J2485A 16 port RS-232 DB25 Port Module
Exhibit 10.7 - Pg. 10
COMMERCIAL GUARANTY
---------------------------------------------------------------------------------------------------
Principal Loan Date Maturity Loan No. Call/Coll Account Officer Initials
0001/590 0955232160 LH4
---------------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item. Any item
containing "***" has been omitted due to text length limitations.
---------------------------------------------------------------------------------------------------
Borrower: PET MED EXPRESS, IN. Lender: SouthTrust Bank
(SSN:65-0000000) West Palm Beach
0000 XX 00xx Xxx. (Comm Loans - Ft. Lauderdale)
XXXXXXX XXXXX, XX 00000 000 X. Xxxxxxx Xxxxxxx
(0xx Xxxxx)
Xxxxxxx Xxxxx, XX 00000
(000) 000-0000
Guarantor: XXXX XXXXX (SSN: ###-##-####)
0000 X. XXXXXXX XXXX.
XX XXXXXXXXXX, XX 00000
==============================================================================
AMOUNT OF GURANTY. The amount of Guaranty is Unlimited.
CONTINUING UNLIMITED GUARANTY. For good and valuable consideration,
XXXX XXXXX ("Guarantor") absolutely and unconditionally guarantees and
promises to pay to SouthTrust Bank ("Lender") or its order, in legal
tender of the United States of America, the Indebtedness (as that term
is defined below) of PET MED EXPRESS, INC. ("Borrower") to Lender in
the terms and conditions set forth in this Guaranty. Under this
Guaranty, the liability, the liability of Guarantor is unlimited and
the obligations of Guarantor are continuing.
INDEBTEDNESS GUARANTEED. The Indebtedness guaranteed by this Guaranty
includes any and all of Borrower's indebtedness to Lender and is used
in the most comprehensive sense and means and includes any and all of
Borrower's liabilities, obligations and debts to Lender, now existing
or hereinafter incurred or created, including, without limitation, all
loans, advances, interest, costs, debts, overdraft indebtedness,
credit card indebtedness, lease obligations, other obligations, and
liabilities of Borrower, or any of them, and any present or future
judgments against Borrower, or any of them; and whether any such
Indebtedness is voluntarily or involuntarily incurred, due or not due,
absolute or contingent, liquidated or unliquidated, determined or
undetermined; whether Borrower may be liable individually or jointly
with others, or primarily or secondarily, or as guarantor or surety;
whether recovery on the Indebtedness may be or may become barred or
unenforceable against Borrower for any reason whatsoever; and whether
the Indebtedness arises from transactions which may be voidable on
account of infancy, insanity, ultra xxxxx or otherwise.
DURATION OF GUARANTY. This Guaranty will take effect when received by
Lender without the necessity of any acceptance by Lender, or any
notice to Guarantor or to Borrower, and will continue in full force
until all Indebtedness incurred or contracted before receipt by Lender
of any notice of revocation shall have been fully and finally paid and
satisfied an all of Guarantor's other obligations under this Guaranty
shall have been performed in full. If Guarantor elects to revoke the
Guaranty, Guarantor may only do so in writing. Guarantor's written
notice of revocation must be mailed to Lender, by certified mail, at
Lender's address listed above or such other place as Lender may
designate in writing. Written revocation of this Guaranty will apply
only to advances or new Indebtedness created after actual receipt by
Lender of Guarantor's written revocation. For this purpose and without
limitation, the term, "new Indebtedness" does not include Indebtedness
which at the time of notice of revocation is contingent, unliquidated,
undetermined or not due and which later becomes absolute, liquidated,
determined or due. This Guaranty will continue to bind Guarantor for
all Indebtedness incurred by Borrower or committed by Lender prior to
receipt of Guarantor's written notice of revocation is contingent,
unliquidated, undetermined and not due and which later becomes
absolute, liquidated, determined or due. This written notice of
revocation, including any extensions, renewals, substitutions or
modifications of the Indebtedness. All renewals, extensions,
substitutions, and modifications of the Indebtedness granted after
Guarantor's revocation, are contemplated under this Guaranty and,
specifically will not be considered to be new Indebtedness. This
Guaranty shall bind Guarantor's estate as to Indebtedness created both
before and after Guarantor's death or incapacity, regardless of
Lender's actual notice of Guarantor's death. Subject to the foregoing,
Guarantor's executor or administrator or other legal representative
may terminate this Guaranty in the same manner in which Guarantor
might have terminated it and with the same effect. Release of any
other guarantor or termination of any other guaranty of the
Indebtedness shall not affect the liability of Guarantor under this
Guaranty. A revocation Lender receives from any one or more Guarantors
shall not affect the liability of any remaining Guarantors under this
Guaranty. It is anticipated that fluctuations may occur in the
aggregate amount of Indebtedness covered by this Guaranty, and
Guarantor specifically acknowledges and agrees that reductions in the
amount of Indebtedness, even to zero dollars ($0.00), prior to
Guarantor's written revocation of this Guaranty shall not constitute a
revocation of this Guaranty. This Guaranty is binding upon Guarantor
and Guarantor's heirs, successors and assigns so long as any of the
guaranteed Indebtedness remains unpaid and even though the
Indebtedness guaranteed may from time to time be zero dollars ($0.00).
GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender,
either before or after any revocation thereof, without notice or
demand and without lessening Guarantor's liability under this
Guaranty, from time to time: (A) prior to revocation as set forth
above, to make one or more additional secured or unsecured loans to
Borrower, to lease equipment or other goods to Borrower, or otherwise
to extend additional credit to Borrower; (B) to alter, compromise,
renew, extend, accelerate, or otherwise change one or more times the
time for payment or other terms of the Indebtedness or any part of the
Indebtedness, including increases and decreases of the rate of
interest on the Indebtedness; extensions may be repeated and may be
for longer than the original loan term; (C) to take and hold security
for the payment of this Guaranty or the Indebtedness, and exchange,
enforce, waive, subordinate, fail or decide not to perfect, and
release any such security, with or without the substitution of new
collateral; (D) to release, substitute, agree not to xxx, or deal with
any one or more of Borrower's sureties, endorsers, or other guarantors
on any terms or in any manner Lender may choose; (E) to determine how,
when and what application of payments and credits shall be made on the
Indebtedness (F) to apply such security agreement or deed or trust as
Lender in its discretion may determine; (G) to sell, transfer, assign
or grant participations in all or any part of the Indebtedness; and
(H) to assign or transfer this Guaranty in whole or part.
GUARANTOR'S REPRESENTATION AND WARRANTIES. Guarantor represents and
warrants to Lender that (A) no representations or agreements of any
kind have been made to Guarantor which would limit or qualify in any
way the terms of this Guaranty; (B) this Guaranty is executed at
Borrower's request and not at the request of Lender; (C) Guarantor has
full power, right and authority to enter into this Guaranty; (D) the
provisions of this Guaranty do not conflict with or result in a
default under any agreement or other instrument binding upon Guarantor
and do not result in a violation of any law, regulation, court decree
or order applicable to Guarantor; (E) Guarantor has not and will not,
without the prior written consent of Lender, sell, lease, assign,
encumber, hypothecate, transfer, or otherwise dispose of all or
substantially all of Guarantor's assets, or any interest therein; (F)
upon Lender's request, Guarantor will provide to Lender financial and
credit information in form acceptable to Lender, and all such
financial information which currently has been, and all future
financial information which will be provided to Lender is and will be
true and correct in all material respects and fairly present
Guarantors financial condition as of the dates the financial
information is provided; (G) no material adverse change has occurred
in Guarantor's financial condition since the date of the most recent
financial statements provided to Lender and no event has occurred
which may materially adversely affect Guarantor's financial condition;
(H) no litigation, claim, investigation, administrative proceeding or
similar action (including those for unpaid taxes) against Guarantor is
pending or threatened; (I) Lender has made no representation to
Guarantor as to the creditworthiness of Borrower; and (J) Guarantor
has established adequate means of obtaining from Borrower on a
continuing basis information regarding Borrower's financial condition.
Guarantor agrees to keep adequately informed from such means of any
facts, events, or circumstances which might in any way affect
Guarantor's risks under this Guaranty, and Guarantor further agrees
that, absent a request for information, Lender shall have no
obligation to disclose to Guarantor any information or documents
acquired by Lender in the course of its relationship with the
Borrower.
GURANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor
waives any right to require Lender (A) to continue lending money or to
extend other credits to Borrower; (B) to make any presentment,
protest, demand, or notice of any kind, including notice of any
nonpayment of the Indebtedness or of any nonpayment related to any
collateral, or notice of any action or nonaction on the part of
Borrower, Lender, and surety, endorser, or other guarantor in
connection with the Indebtedness or in connection with the creation of
new or additional loans or obligations; (C) to resort for payment or
to proceed directly or at once against any person, including Borrower
or any other guarantor; (D) to proceed directly against or exhaust any
collateral held by Lender from Borrower, or any other guarantor, or
any other person; (E) to give notice of the terms, time, and place of
any public or private sale of personal property security held by
Lender from Borrower or to comply with any other applicable provisions
of the Uniform Commercial Code; (F) to pursue any other remedy within
Lender's power; or (G) to commit any act or omission of any, or at any
time, with respect to any matter whatsoever.
Guarantor also waives any and all rights or defenses arising by reason
of (A) any "one action" or "anti-deficiency" law or any other law
which may prevent Lender from bringing any action, including a claim
for deficiency, against Guarantor, before or after Lender's
commencement or completion of any foreclosure action, either
judicially or by exercise of a power of sale; (B) any election of
remedies by Lender which destroys or otherwise adversely affects
Guarantor's subrogation rights or Guarantor's rights to proceed
against Borrower for reimbursement, including
Exhibit 10.7 - Pg. 11
COMMERCIAL GUARANTY
Loan No: 0000250498 (Continued) Page 2
______________________________________________________________________
without limitation, any loss of rights Guarantor may suffer by reason
of any law limited, qualifying, or discharging the Indebtedness; (C)
any disability or other defense of Borrower, of any other guarantor,
or of any other person, or by reason of the cessation of Borrower's
liability from any cause whatsoever, other than payment in full in
legal tender, of the Indebtedness; (D) any right to claim discharge of
the Indebtedness on the basis of unjustified impairment of any
collateral for the Indebtedness; (E) any statue of limitations, if at
any time any action or suit brought by Lender against Guarantor is
commenced, there is outstanding Indebtedness of Borrower to Lender
which is not barred by any applicable statute of limitations; or (F)
any defenses given to guarantors at law or in equity other than actual
payment and performance of the Indebtedness. If payment is made by
Borrower, whether voluntarily or otherwise, or by any third party, on
the Indebtedness and thereafter Lender is forced to remit the amount
of that payment to Borrower's trustee in bankruptcy or to any similar
person under any federal or state bankruptcy law or law for the relief
of debtors, the Indebtedness shall be considered unpaid for the
purpose of the enforcement of this Guaranty.
Guarantor further waives and agrees not to assert or claim at any time
any deductions to the amount guaranteed under this Guaranty for any
claim of setoff, counterclaim, counter demand, recoupment or similar
right, whether such claim, demand or right may be asserted by the
Borrower, the Guarantor, or both.
GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants
and agrees that each of the waivers set forth above is made with
Guarantor's full knowledge of its significance and consequences and
that, under the circumstances, the waivers are reasonable and not
contrary to public policy or law. If any such waiver is determined to
be contrary to any applicable law or public policy, such waiver shall
be effective only to the extent permitted by law or pubic policy.
SUBORDINATION OF BORROWER'S DEBTED TO GUARANTOR. Guarantor agrees that
the Indebtedness of Borrower to Lender, whether now existing or
hereafter created, shall be superior to any claim that Guarantor may
now have or hereafter acquire against Borrower, whether or not
Borrower becomes insolvent. Guarantor hereby expressly subordinates
any claim Guarantor may have against Borrower, upon any account
whatsoever, to any claim that Lender may now or hereafter have against
Borrower. In the event of insolvency and consequent liquidation of the
assets of Borrower, through bankruptcy, by an assignment for the
benefit of creditors, by voluntary liquidation, or otherwise, the
assets of Borrower applicable to the payment of the claims of both
Lender and Guarantor shall be paid to Lender and shall be first
applied by Lender to the Indebtedness of Borrower to Lender. Guarantor
does hereby assign to Lender all claims which it may have or acquire
against Borrower or Indebtedness of Borrower to Lender. Guarantor does
hereby assign to Lender all claims which it may have or acquire
against Borrower or against any assignee or trustee in bankruptcy of
Borrower; provided however, that such assignment shall be effective
only for the purpose of assuring to Lender full payment in legal
tender of the Indebtedness. If Lender so requests, any notes or credit
agreements now or hereafter evidencing any debts or obligations of
Borrower to Guarantor shall be marked with a legend that the same are
subject to this Guaranty and shall be delivered to Lender. Guarantor
agrees, and Lender is hereby authorized, in the name of Guarantor,
from time to time to execute and file financing statements and
continuation statements and to execute such other documents and take
such other actions as Lender deems necessary or appropriate to
perfect, preserve and enforce its rights under this Guaranty.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a
part of this Guaranty.
Amendments. This Guaranty, together with any Related Documents,
constitutes the entire understanding and agreement of the parties
as to the matters set forth on this Guaranty. No alteration of or
amendment to this Guaranty shall be effective unless given in
writing and signed by the party or parties sought to be charged
or bound by the alteration or amendment.
Attorneys' Fees; Expenses. Guarantor agrees to pay upon demand
all of Lender's costs and expenses, including Lender's attorneys'
fees and Lender's legal expenses incurred in connection with the
enforcement of this Guaranty. Lender may hire or pay someone else
to help enforce this Guaranty, and Guarantor shall pay the costs
and expenses of such enforcement. Costs and expenses include
Lender's attorneys' fees and legal expenses whether or not there
is a lawsuit, including attorneys' fees and legal expenses for
bankruptcy proceedings (including efforts to modify or vacate any
automatic stay or injunction), appeals, and any anticipated post-
judgment collection services. Guarantor also shall pay all court
costs and such additional fees as may be directed by the court.
Caption Headings. Caption headings in this Guaranty are for
convenience purposes only and are not to be used to interpret or
define the provisions of this Guaranty.
Governing Law. This Guaranty will be covered by, construed and
enforced in accordance with federal law and the laws of the State
of Florida. However, in the event that the enforceability or
validity of any provision of this Guaranty is challenged or
questioned, such provision shall be governed by whichever
applicable state or federal law would uphold or would enforce
such challenged or questioned provision. The loan transaction
which is evidenced by the Note and this Guaranty has been applied
for, considered, approved and made, and all necessary loan
documents have been accepted by Lender in the State of Florida.
Integration. Guarantor further agrees that Guarantor has read and
fully understands the terms of this Guaranty; Guarantor has had
the opportunity to be advised by Guarantor's attorney with
respect to this Guaranty; the Guaranty fully reflects Guarantor's
intentions and parol evidence is not required to interpret the
terms of this Guaranty. Guarantor hereby indemnifies and holds
Lender harmless from all losses, claims, damages, and costs
(including Lender's attorneys' fees) suffered or incurred by
Lender as a result of any breach by Guarantor of the warranties,
representations and agreements of this paragraph.
Interpretation. In all cases where there is more than one
Borrower or Guarantor, then all words used in this Guaranty in
the singular shall be deemed to have been sued in the plural
where the context and construction so require; and where there is
more than one Borrower named in this Guaranty or when this
Guaranty is executed by more than one Guarantor, the words
"Borrower" and "Guarantor" respectively shall mean all and any
one or more of them. The words "Guarantor," "Borrower," and
"Lender" includes their heirs, successors, assigns, and
transferees of each of them. If a court finds that any provision
of this Guaranty is not valid or should not be enforced, that
fact by itself will not mean that the rest of this Guaranty will
not be valid or enforced. Therefore, a court will enforce the
rest of the provisions of this Guaranty even if a provision of
this Guaranty may be found to be invalid or unenforceable. If any
one or more of Borrower or Guarantor are corporations,
partnerships, limited liability companies, or similar entities,
it is not necessary for Lender to inquire into the powers of
Borrower or Guarantor or of the officers, directors, partners,
managers, or other agents acting or purporting to act on their
behalf, and any Loan indebtedness made or created in reliance
upon the professed exercise of such powers shall be guaranteed
under this Guaranty.
Notices. Any notice required to be given under this Guaranty
shall be given in writing, and, except for revocation notices by
rantor, shall be effective when actually delivered, when
actually received by telefacsimile (unless otherwise required by
law), when deposited with a nationally recognized overnight
courier, or, if mailed, when deposited in the United States mail,
as first class, certified or registered mail postage prepaid,
directed to the addresses shown near the beginning of this
Guaranty. All revocation notices by Guarantor shall be in writing
and shall be effective upon delivery to Lender as provided in the
section of this Guaranty entitled "DURATION OF GUARANTY." Any
party may change its address for notices under this Guaranty by
giving formal written notice to the other parties, specifying
that the purpose of the notice is to change the party's address.
For notice purpose, Guarantor agrees to keep Lender informed at
all times of Guarantor's current address. Unless otherwise
provided by applicable law, if there is more than one Guarantor,
any notice given by Lender to any Guarantor is deemed to be
notice given to all Guarantors.
No Waiver by Lender. Lender shall not be deemed to have waived
any rights under this Guaranty unless such waiver is given in
writing and signed by Lender. No delay or omission on the part of
Lender in exercising any right shall operate as a waiver of such
right or any other right. A waiver by Lender of a provision of
this Guaranty shall not prejudice or constitute a waiver of
Lender's right otherwise to demand strict compliance with that
provision or any other provision of this Guaranty. No prior
waiver by Lender, not any other course of dealing between Lender
and Guarantor, shall constitute a waiver of any of Lender's
rights or of any Guarantor's obligations as to any future
transactions. Whenever to consent of Lender is required under
this Guaranty, the granting of such consent by Lender in any
instance shall not constitute continuing consent to subsequent
instances where such consent is required and in all cases such
consent is required and in all cases such consent may be granted
or withheld in the sole discretion of Lender.
Successors and Assigns. Subject to any limitations stated in this
Guaranty on transfer of Guarantor's interest, this Guaranty on
transfer of Guarantor's interest, this Guaranty shall be binding
upon and inure to the benefit of the parties, their successors
and assigns.
DEFINITIONS. The following capitalized words and terms shall have the
following meanings when used in this Guaranty. Unless specifically
stated to the contrary, all references to dollar amounts shall mean
amounts in lawful money of the United States of America. Words and
terms used in the singular shall include the plural, and the plural
shall include the singular, as the context may require. Words and
terms not otherwise defined in this Guaranty shall have the meanings
attributed to such terms in the Uniform Commercial Code.
Borrower. The word "Borrower" means PET MED EXPRESS, INC., and
all other persons and entities signing the note in whatever
capacity.
Guarantor. The word "Guarantor" means each and every person or
entity signing this Guaranty, including without limitation MARC
Exhibit 10.7 - Pg. 12
COMMERCIAL GUARANTY
Loan No: 0000250498 (Continued) Page 3
______________________________________________________________________
XXXXX.
Guaranty. The word "Guaranty" means the guaranty from Guarantor
to Lender, including without limitation a guaranty of all or part
of the Note.
Indebtedness. The word "Indebtedness" means Borrower's
Indebtedness to Lender as more particularly described in this
Guaranty.
Lender. The word "Lender" means SouthTrust Bank, its successors
and assigns.
Note. The word "Note" means the promissory note dated March 12,
2002, in the original amount of %205, 327.00 from Borrower to
Lender, together with all renewals of, extensions of,
modifications of, refinancings of, consolidations of, and
substitutions for the promissory note or agreement.
Related Documents. The words "Related Documents" mean all
promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, security agreements,
mortgages, deeds of trust, security deeds, collateral mortgages,
and other instruments, agreements and documents, whether now or
hereafter existing, executed in connection with the Indebtedness.
EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS
OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR
UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION
AND DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL
CONTINUE UNTIL TERMINED IN THE MANNER SET FORTH IN THE SECTION TITLED
"DURATION OF GUARANTY." NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO
MAKE THIS GUARANTY EFFECTIVE. THIS GUARNATY IS DATED MARCH 12, 2002.
GUARANTOR:
/s/___Marc Puleo________
XXXX XXXXX, Individually
Exhibit 10.7 - Pg. 13
CORPORATE RESOLUTION TO BORROW / GRANT COLLATERAL
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Principal Loan Date Maturity Loan No. Call/Coll Account Officer Initials
$205,327.00 03-12-2002 03-13-2005 0000250498 0001/590 0955232160 LH4
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References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item. Any item
containing "***" has been omitted due to text length limitations.
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Corporation: PET MED EXPRESS, IN. Lender: SouthTrust Bank
(SSN:65-0680967) West Palm Beach
0000 XX 00xx Xxx. (Comm Loans - Ft. Lauderdale)
XXXXXXX XXXXX, XX 00000 000 X. Xxxxxxx Xxxxxxx
(0xx Xxxxx)
Xxxxxxx Xxxxx, XX 00000
(000) 000-0000
==============================================================================
I, THE UNDERSIGNED, DO HEREBY CERTIFY THAT:
THE CORPORATION'S EXISTENCE. The complete and correct name of the
Corporation is PET MED EXPRESS, INC. ("Corporation"). The Corporation
is a corporation for profit which is, and at all times shall be, duly
organized, validity existing, and in good standing under and by virtue
of the laws of the State of Florida. The Corporation is duly
authorized to transact business in all other states in which the
Corporation is doing business. Specifically, the Corporation is, and
at all times shall be, duly qualified as a foreign corporation in all
states in which the failure to do so qualify would have a material
adverse effect on its business or financial condition. The Corporation
has the full power and authority to own its properties and to transact
the business in which it is presently engaged or presently proposes to
engage. The Corporation maintains an office at 0000 XX 00XX XXX,
XXXXXXX XXXXX, XX 00000. Unless the Corporation has designated
otherwise in writing, the principal office is the office at which the
Corporation keeps its books and records. The Corporation will notify
Lender prior to any change in the location of the Corporation's state
of organization or any change in the Corporation's name. The
Corporation shall do all things necessary to preserve and to keep in
full force and effect its existence, rights and privileges, and shall
comply with all regulations, rules, ordinances, statues, orders and
decrees of any governmental or quasi-governmental authority or court
applicable to the Corporation and the Corporation's business
activities.
RESOLUTIONS ADOPTED. At a meeting of the Directors of the Corporation,
or if the Corporation is a close corporation having no Board of
Directors then at a meeting of the Corporation's shareholders, duly
called and held on ________________, at which a quorum was present and
voting, or by other duly authorized action in lieu of a meeting, the
resolutions set forth in this Resolution were adopted.
OFFICER. The following named person is an officer of PET MED EXPRESS,
IN.:
NAMES TITLES AUTHORIZED ACTUAL SIGNATURES
----- ------ ---------- -----------------
MENDO AKDAG CEO Y /S/____Mendo Akdag_______
ACTIONS AUTHORIZED. The authorized person listed above may enter into
any agreements of any nature with Lender, and those agreements will
bind the Corporation. Specifically, but without limitation, the
authorized person is authorized, empowered, and directed to do the
following for and on behalf of the Corporation:
Borrow Money. To borrow, as a cosigner or other, from time to
time from Lender, on such terms as may be agreed upon between the
Corporation and Lender, such sum or sums of money as in his or
her judgment should be borrowed, without limitation.
Execute Notes. To execute and deliver to Lender the promissory
note or notes, or other evidence of the Corporation's credit
accommodations, on Lender's forms, at such rates of interest and
on such terms as may be agreed upon, evidencing the sums of money
so borrowed or any of the Corporation's indebtedness to Lender,
and also to execute and deliver to Lender one or more renewals,
extensions, modifications, refinancing, consolidations, or
substitutions for one or more of the notes, or any other evidence
of credit accommodations.
Grant Security. To mortgage, pledge, transfer, endorse,
hypothecate, or otherwise encumber and deliver to Lender any
property now or hereafter belonging to the Corporation or in
which the Corporation now or hereafter may have an interest,
including without limitation all real property and all personal
property (tangible or intangible) of the Corporation, as security
for the payment of any loans or credit accommodations so
obtained, any promissory notes so executed (including any
amendments to or modifications, renewals, and extensions of such
promissory notes), or any other further indebtedness of the
Corporation to Lender at any time owing, however the same may be
evidenced. Such property may be mortgaged, pledged, transferred,
endorsed, hypothecated or encumbered at the time such loans are
obtained or such indebtedness is incurred, or at any time or
times, and may be either in addition to or in lieu of any
property theretofore mortgaged, pledged, transferred, endorsed,
hypothecated or encumbered.
Execute Security Documents. To execute and deliver to Lender the
forms of mortgage, deed of trust, pledge agreement, hypothecation
agreement, and other security agreements and financing statements
which Lender may require and which shall evidence the terms and
conditions under the pursuant to which such liens and
encumbrances, or any of them, are given; and also to execute and
deliver to Lender any other written instruments, and chattel
paper, or any other collateral, or any kind or nature, which
Lender may deem necessary or proper in connection with or
pertaining to the giving of the liens and encumbrances.
Negotiate Items. To draw, endorse, and discount with Lender all
drafts, trade acceptances, promissory notes, or other evidences
of indebtedness payable to or belonging to the Corporation or in
which the Corporation may have an interest, and either to receive
cash for the same or to cause such proceeds to be credited to the
Corporation's account with Lender, or to cause such other
disposition of the proceeds derived therefrom as he or she may
deem advisable.
Further Acts. In the case of lines of credit, to designate
additional or alternate individuals as being authorized to
request advances under such lines, and in all cases, to do and
perform such other acts and things, to pay any and all fees and
costs, and to execute and deliver such other documents and
agreements, including agreements waiving the right to a trial by
jury, as the officer may in his or her discretion deem reasonably
necessary or proper in order to carry into effect the provisions
of this resolution.
ASSUMED BUSINESS NAMES. The Corporation has filed or recorded all
documents or filings required by law relating to all assumed business
names used by the Corporation. Excluding the name of the Corporation,
the following is a complete list of all assumed business names under
which the Corporation does business: None.
NOTICES TO LENDER. The Corporation will promptly notify Lender in
writing at Lender's address shown above (or such other addresses as
Lender may designate from time to time) prior to any (A) change the
Corporation's name; (B) change in the Corporation's assumed business
name(s); (C) change in the management of the Corporation; (D) change
in the authorized signer(s); (E) change in the Corporation's principal
office address; (F) change in the Corporation's state of organization;
(G) conversion of the Corporation to a new or different type of
business entity; or (H) change in any other aspect of the Corporation
that directly or indirectly relates to any agreements between the
Corporation and Lender. No change in the Corporation's name or state
of organization will take effect until after Lender has received
notice.
CERTIFICATION CONCERNING OFFICERS AND RESOLUTIONS. The officer named
above is duly elected, appointed, or employed by or for the
Corporation, as the case may be, and occupies the position set
opposite his or her respective name. This Resolution now stands of
record on the books of the Corporation, is in full force and effect,
and has not been modified or revoked in any manner whatsoever.
NO CORPORATE SEAL. The Corporation has no corporate seal, and
therefore, no seal is affixed to this Resolution.
CONTINUING VALIDITY. Any and all acts authorized pursuant to this
Resolution and performed prior to the passage of this Resolu6tion are
hereby ratified and approved. This Resolution shall be continuing,
shall remain in full force and effect and Lender may rely on it until
written notice of its revocation shall have been delivered to and
received by Lender at Lender's address shown above (or such addresses
as Lender may designate from time to time). Any such notice shall not
affect any of the Corporation's agreements or commitments in effect at
the time notice is given.
IN TESTIMONY WHEREOF, I have hereunto set my hand and attest that the
signature set opposite the name listed above is his or her genuine
signature.
I have read all the provisions in this Resolution, and I personally
and on behalf of the Corporation certify that all statements and
representations made this Resolution are true and correct. This
Corporate Resolution to Borrow / Grant Collateral is
dated_________________.
Exhibit 10.7 - Pg. 14
CORPORATE RESOLUTION TO BORROW / GRANT COLLETERAL
Loan No: 0000250498 (Continued) Page 2
______________________________________________________________________
CERTIFIED TO AND ATTESTED BY:
/S/______Mendo Akdag________________
MENDO AKDAG, CEO
Exhibit 10.7 - Pg. 15
DISBURSEMENT REQUEST AND AUTHORIZATION
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Principal Loan Date Maturity Loan No. Call/Coll Account Officer Initials
$205,327.00 03-12-2002 03-13-2005 0000250498 0001/590 0955232160 LH4
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References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item. Any item
containing "***" has been omitted due to text length limitations.
---------------------------------------------------------------------------------------------------
Borrower: PET MED EXPRESS, IN. Lender: SouthTrust Bank
(SSN:65-0000000) West Palm Beach
0000 XX 00xx Xxx. (Comm Loans - Ft. Lauderdale)
XXXXXXX XXXXX, XX 00000 000 X. Xxxxxxx Xxxxxxx
(0xx Xxxxx)
Xxxxxxx Xxxxx, XX 00000
(000) 000-0000
==============================================================================
LOAN TYPE: This is a Variable Rate Nondisclosable Loan to a
Corporation for $205,327.00 due on March 13, 2005. The reference rate
("base rate". The term "base rate" means the rate of interest
designated by the Lender periodically as its Base Rate, currently
4.750%) is added to the margin of 1.000%, resulting in an initial rate
of 5.750.
PRIMARY PURPOSE OF LOAN. The primary purpose of this loan is for
(please initial):
[ ] _______ Personal, Family or Household Purposes or Personal
Investment
[X] _______ Business (Including Real Estate Investment).
SPECIFIC PURPOSE. The specific purpose of this loan is: CAP
EXPENDITURES - PURCHASE EQUIPMENT.
DISBURSEMENT INSTRUCTIONS. Borrower understands that no loan proceeds
will be disbursed until all of Lender's conditions for making the loan
have been satisfied. Please disburse the loan proceeds of $205,326.00
as follows:
Amount paid to Borrower directly: $202,530.10
$202.530.10 Lender's Check #
Other Charges Financed: $2,796.90
$2,050.00 LOAN FEE
$28.00 UCC FILING FEE
$718.90 DOC STAMP FEE (FLA ONLY)
___________
Note Principal: $205,327.00
AUTOMATIC PAYMENTS. Borrower hereby authorizes Lender automatically to
deduct from Borrower's Checking account numbered 00000000, ABA
numbered the amount of any loan payment. If the funds in the account
are insufficient to cover any payment, Lender shall not be obligated
to advance funds to cover the payment. At any time and for any reason,
Borrower or Lender may voluntarily terminate Automatic Payments.
FINAL CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS
AND WARRANTS TO LENDER THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND
CORRECT AND THAT THERE HAS BEEN NO MATERIAL ADVERSE CHANGE IN THE
BORROWER'S FINANCIAL CONDITION AS DISCLOSED IN BORROWER'S MOST RECENT
FINANCIAL STATEMENT TO LENDER. THIS AUTHORIZATION IS DATED MARCH 12,
2002.
BORROWER:
PET MED EXPRESS, INC.
By:/S/____Mendo Akdag____________________
MENDO AKDAG, CEO of PET MED EXPRESS, INC.
Exhibit 10.7 - Pg. 16
