Exhibit (10.7) - Loan Agreement with HSK Funding, Inc.
Exhibit
(10.7) - Loan Agreement with HSK
Funding, Inc.
0000
Xxxxx Xxxxxx Xxxxxx, Xxxxx 00
Xxxx
Xxxxx, Xxxxxxx 00000
December
20, 0000
XXX
Funding
000
Xxxxx
Xxxxx
Xxxxxx,
XX 00000
Gentlemen:
Reference
is made to the promissory note (the “Note”) dated the date of this Agreement
issued by Adsouth Partners, Inc., a Nevada corporation (the “Company”), payable
to HSK Funding (“Payee”) in the principal amount of one million dollars
($1,000,000).
In
consideration for the loan by Payee to the Company, the Company hereby agrees
as
follows:
1. The
Company will, subject to its agreement with Marquette Commercial Finance, Inc.
(“Marquette”), grant Payee a security interest in (a) all consignment invoices
issued by the Company to Walgreens, GNC and any other consignment customers
and
(b) the inventory relating to such consignment invoices. As used in this
agreement a consignment invoice is an invoice for goods delivered to a customer
where the payment obligation of the customer under the invoice does not arise
until the products are sold by the customer.
2. The
Company will use its commercially reasonable efforts to obtain a release by
Marquette of the consignment invoices and related inventory from the collateral
granted by the Company to Marquette. In the event the Company obtains such
approval, the Company will pay the cost of filing any UCC-1 financing statements
which Payee may reasonably request.
3. The
Company will pay to Payee all moneys received by it in respect of the
consignment invoices within five (5) business days of receipt and collection
by
the Company.
4. Payee
shall have the right, at Payee’s cost and expense, on reasonable notice to the
Company, to inspect the Company’s books are records to the extent reasonably
necessary to confirm compliance by the Company of its obligations under this
Agreement. Payee shall, and shall cause its representatives, to treat the
information as confidential and proprietary of the Company and shall not
disclose such information for any purpose. The cost of such inspection shall
by
paid by Payee except that, if such inspection results in an increase in payments
by the Company of more than ten percent (10%), the Company shall pay the cost
of
the inspection.
5. The
parties confirm their intention that the Note be replaced by a financing
agreement covering the consignment invoices and related security.
6. This
Agreement constitutes the entire agreement of the parties as to its subject
matter, superseding all prior and contemporaneous oral or written
agreement.
[Signatures
on following page]
Please
confirm your agreement with the foregoing.
| ADSOUTH PARTNERS, INC. | ||
| |
|
|
| By: | /S/ Xxxxx Xxx Xxxxxxxx | |
| Xxxxx Xxx Xxxxxxxx, CFO | ||
AGREED
TO:
| HSK FUNDING | ||
| |
|
|
| By: | /S/ Xxxxxx X. Xxxxxxx | |
| Xxxxxx X. Xxxxxxx | ||
|
$1,000,000
|
Boca
Raton, Florida
December
20, 2005
|
DEMAND
PROMISSORY NOTE
FOR
VALUE
RECEIVED, Adsouth Partners, Inc., a Nevada corporation with offices at 0000
Xxxxx Xxxxxx Xxxxxx, Xxxxx 00, Xxxx Xxxxx, Xxxxxxx 00000 (“Payor”), hereby
promises to pay on demand to order of HSK Funding (“Holder”), the principal
amount of one million dollars ($1,000,000), and to pay interest on the
outstanding principal amount at an interest rate equal to the lesser of eighteen
percent (18%) per annum or the maximum rate of interest which may legally be
charged.
In
any
legal proceeding to enforce payment of this Note, Payor waives trial by jury,
claims for offset and counterclaims. Payor hereby waives presentment, demand,
protest and notice of protest. Payor may prepay this Note in whole at any time
and in part from time to time without payment of any penalty or premium,
provided that accrued interest is paid to the date of such
prepayment.
Payment
of this Note is guaranteed by Xxxx X. Xxxxxx, Xx.
This
Note
replaces and restates, with an increase in the principal amount, the Payor’s
promissory note dated December 7, 2005, in the principal amount of $500,000,
payable to Holder.
In
the
event that Holder commences a legal proceeding in order to enforce its rights
under this Note, Payor shall pay the reasonable legal fees and expenses incurred
by Holder with respect thereto.
This
Note
shall be governed by and construed in accordance with the laws of the State
of
Florida applicable to agreements entered and to be performed wholly within
such
State without regard to principles of conflicts of laws. IN
ANY SUCH ACTION, PAYOR WAIVES ANY RIGHT TO A TRIAL BY JURY.
IN
WITNESS WHEREOF, Payor has executed this Note on the date and year first
aforesaid.
| ADSOUTH PARTNERS, INC. | ||
| |
|
|
| By: | /S/ Xxxxx Xxx Xxxxxxxx | |
| Xxxxx Xxx Xxxxxxxx, CFO | ||
GUARANTEE
For
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Xxxx X. Xxxxxx, Xx. (“Guarantor”), hereby unconditionally and
irrevocably guarantees to HSK Funding (“Holder”), the payment and performance by
Adsouth Partners, Inc., a Nevada corporation (“Payor”), of all of Payor’s
obligations pursuant to Demand Promissory Note in the principal amount of one
million dollars ($1,000,000).
The
liability of Guarantor shall be direct and immediate and not conditional or
contingent upon the pursuance by Holder of whatever remedies it may have, at
law
or in equity, against Payor or any other party. Guarantor hereby waives
presentment for payment, demand, protest and notice of protest and of
nonpayment.
The
obligations of Guarantor shall not be impaired, diminished or discharged, in
whole or in part, by any extension of time granted by the holder of the Note,
by
any course of dealing between the holder of the Note and Payor, or by the
unenforceability of the Note, in whole or in part, for any reason
whatsoever.
Guarantor
agrees to pay on demand any amount which the holder of the Note is required
to
pay under any bankruptcy, insolvency or other similar law on account of any
amount received by the holder of the Note under or with respect to the Note
or
this guarantee.
In
the
event that Holder commences litigation against the Guarantor in order to enforce
its rights under this Guarantee, Guarantor shall be liable for all reasonable
costs and expenses of collection, including, without limitation, reasonable
attorneys' fees and expenses.
This
Guarantee shall be governed by and construed in accordance with the laws of
the
State of Florida applicable to contracts made and to be performed entirely
within such State without regard to principles of conflicts of law. IN
ANY SUCH ACTION, GUARANTOR WAIVES ANY RIGHT TO A TRIAL BY
JURY
IN
WITNESS WHEREOF, Guarantor has executed this Guarantee this 20th
day of
December, 2005.
| |
|
|
| By: | /S/ Xxxx X. Xxxxxx, Xx | |
| Xxxx X. Xxxxxx, Xx. | ||
IV
