EXHIBIT 10.3
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 Xxxxx 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 the 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 principal 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 be 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
