EXHIBIT 99.2
LOAN AGREEMENT
THIS AGREEMENT, dated September 20, 1996 by and between Electronics
Communications Corp., with offices located at 00 Xxxx Xxxx, Xxxxxxxxx, Xxx
Xxxxxx 00000 hereinafter referred to as "Borrower" or "the Company" and Marrotta
Group, with offices located at 000-00 Xxxx Xxxx Xxxx, Xxxxxxx, Xxx Xxxx 00000
hereinafter referred to as "Lender."
WHEREAS, the Borrower has requested that the Lender make a loan to the
Borrower in the principal amount of Five Hundred Thousand ($500,000) Dollars for
general corporate purposes, and
WHEREAS, subject to the terms and conditions hereinafter set forth, the
Lender is willing to make such loan to Borrower,
NOW THEREFORE, in consideration of the promises and the mutual covenants
and agreements herein contained, the parties hereto agree as follows:
Section 1. THE LOAN
1.1 LOAN. The Lender agrees, subject to the terms and conditions
hereinafter set forth, to loan to Borrower the aggregate principle
amount of Five Hundred Thousand ($500,000) Dollars. The aggregate
principle amount borrowed by the borrower from the Lender is herein
called the "Loan." The Lender agrees to lend to the Borrower and the
Borrower agrees to borrow from the Lender the sum of Five Hundred
Thousand ($500,000) Dollars which shall hereinafter be classified as a
Senior Debt payable by the Borrower to the Lender, with all rights
attendant thereto.
1.2 PROMISSORY NOTE. The Loan shall be made and evidenced by a promissory
note of the Borrower substantially in the form annexed hereto
("Promissory Note").
1.3 INTEREST. Interest shall be paid at the rate of ten (10%) percent per
annum and will be payable on the first anniversary of the Loan, or at
such time prior to the first anniversary of the Loan should the
Borrower make full payment to the Lender. All interest payments by
the Borrower to the Lender shall be in cash or the common stock of the
Company, the choice of which shall be at the sole discretion of the
Company.
1.4 PRINCIPLE. The aggregate principle amount of the Loan and Promissory
Note is Five Hundred Thousand ($500,000) Dollars.
1.5 PAYMENT. Payment of the loan and Promissory Note shall be made on or
before June 20, 1997. At such time as payment becomes due from
Borrower to Lender, the Borrower may request and the Lender shall be
bound to grant a three (3) month extension of the Loan in which case
full payment shall be due no later than September 20, 1997. Upon the
occurrence of a change in control of the Company or upon a change in
the management of the Company, the Loan shall immediately become due
upon demand of the Lender.
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1.6 USE OF PROCEEDS. The borrower agrees that the proceeds of the Loan
shall be used fully and exclusively for general corporate purposes.
1.7 OTHER CONSIDERATION. In further consideration for making the Loan, in
addition to the foregoing repayment terms, Borrower shall issue to
Lender, or its assignees or assigns, 200,000 shares of the Company's
common stock with Demand and Piggy Back Registration Rights and
400,000 class A warrants of the Company with Demand and Piggy Back
Registration Rights. Lender represents and warrants that the shares
and warrants received under the terms of this Agreement may not be
sold to any foreign entity or person whatsoever.
Section 2. REPRESENTATIONS AND WARRANTIES OF BORROWER
The Borrower represents and warrants that:
2.1 CORPORATE EXISTENCE, POWER AND AUTHORITY OF THE BORROWER. The
Borrower is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation of
formation, and is duly licensed or qualified in each jurisdiction
where the character of the property owned by it or the nature of the
business transacted by it requires such licensing or qualification.
The borrower has all requisite power, authority and legal right to
conduct business as it is now being conducted and to enter into,
consummate and perform all the provisions of this Agreement, and any
instrument, agreement or document referred to herein to which the
Borrower is or shall be a party, have been duly authorized by all
corporate and other required actions.
2.2 NO CONFLICTS. The execution, delivery and performance by the Borrower
of this Agreement, the Promissory Note or any other instrument,
agreement or document, referred to herein does not and will not result
in any violation of, or be in conflict with, any terms or provision of
the Articles of Incorporation or By-Laws of the Borrower, or any
statute, governmental regulation or order, judgment, decree,
agreement, indenture or instrument applicable to any thereof.
2.3 AUTHORIZATIONS. All governmental approvals, licenses, authorizations,
consents, filings and registrations, if any, required for the delivery
and execution of this Agreement, and any applicable instrument,
agreement or document referred to herein have been obtained or made,
and are final and are not subject to review or appeal or, to the
knowledge or belief of the Borrower, the subject of any pending or
threatened attack or appeal to direct proceedings or otherwise.
Section 3. JURISDICTION
3.1 New York Jurisdiction. The Borrower hereby irrevocably submits to the
jurisdiction of the Supreme Court of the State of New York, County of
Nassau in any action, suit, or proceeding brought against the Borrower
and related to or in connection with this Agreement or any other
instrument, agreement or document referred to herein or any
transaction contemplated hereby.
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In Witness Whereof, the parties have caused this Agreement to be duly executed
and delivered as of the date first above written.
Electronics Communications Corp.
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx, President
Marrotta Group
By: /s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx, President
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