Loan and Security Agreement
LOAN
AND
SECURITY AGREEMENT made as of the 12th day of March, 2006 between StarInvest
Group, Inc.,
a
Nevada corporation whose principal place of business is located at 0000 Xxxxx
X
Xxxxxx, Xxxxx 0-000, Xxxxxxx Xxxxx 00000 (the “Company”), in favor of
Strasbourger Xxxxxxx Tulcin & Xxxxx Inc., having an address at 00 Xxxxxxxxx
Xxxxxx, 00xx
Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, as agent for the Note holders (the “Secured
Party”).
Recitals
A. The
Holders identified in Schedule A attached hereto have loaned monies (the “Loan”
or plural “Loans” and sometimes referred to as “Obligations”) and hold
promissory notes dated of even date herewith (the “Notes” and singular “Note”)
in an aggregate principal amount of up to $750,000.
B. As
an
inducement to the Holders to make the Loans to the Company, the Company has
agreed to secure the payment and performance of its obligations under the Notes
and this Loan Agreement.
C. The
Holders have appointed the Secured Party to act as their agent under this Loan
Agreement for the benefit of all Holders.
D. In
consideration of the Loans and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company wishes
to
grant a security interest in the Collateral to the Secured Party for the benefit
of all Holders.
Accordingly,
the parties agree as follows:
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1.
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Loan
and Interest.
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(a)
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Holders
hereby make Loans to the Company for a term of one (1) year at an
annual
interest rate of 8%, as more particularly defined in the Notes, each
Holder’s Loan, as evidenced by the Note, is reflected on Schedule A
attached hereto.
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(b)
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All
payment of the Obligations shall be made by the Company in United
States
currency and in immediately available funds at the respective offices
or
residences of the Holders listed on Schedule A attached hereto or
as
otherwise noticed by Holders to the Company in accordance with Section
17
of this Loan Agreement.
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(c)
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The
Company promises to use the proceeds of the Loans solely for (i)
the
payment of indebtedness and claims as provided for on Schedule A
to the
Notes, and (ii) working capital, the later up to a maximum of $300,000
of
the Loans.
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2.
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Security
Interest.
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(a)
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To
secure prompt and complete payment and performance of the Obligations
(as
defined below), the Company hereby pledges, assigns, transfers and
grants
to Secured Party a continuing security interest in all properties,
assets
and rights of the Company now owned or at any time hereafter acquired
by
the Company or in which the Company now has or at any time in the
future
may acquire any right, title or interest, wherever located or situated
(hereinafter, collectively called the “Collateral”). Without limitation of
the foregoing, the Collateral includes, among all the assets of the
Company, the following:
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i)
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all
Accounts;
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ii)
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all
As-Extracted Collateral;
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iii)
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all
Chattel Paper;
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iv)
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all
Commercial Tort Claims;
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v)
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all
Consignments;
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vi)
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all
Contracts;
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vii)
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all
Copyrights;
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viii)
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all
Copyright Licenses;
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ix)
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all
Deposit Accounts;
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x)
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all
Documents;
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xi)
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all
Encumbrance(s);
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xii)
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all
Equipment;
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xiii)
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all
Fixtures;
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xiv)
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all
Goods;
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xv)
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all
General Intangibles;
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xvi)
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all
Health-Care-Insurance Receivables;
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xvii)
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all
Instruments;
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xviii)
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all
Inventory;
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xix)
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all
Investment Property;
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xx)
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all
Letter-of-Credit Rights;
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xxi)
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all
Letters of Credit;
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xxii)
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all
Patents;
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xxiii)
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all
Patent Licenses;
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xxiv)
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all
Payment Intangibles;
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xxv)
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all
Promissory Note(s);
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xxvi)
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all
Software;
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xxvii)
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all
Supporting Obligations;
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xxviii)
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all
Tangible Chattel Paper;
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xxix)
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all
Trademarks;
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xxx)
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all
Trademark Licenses;
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xxxi)
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all
Vehicles; and
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xxxii)
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to
the extent not otherwise included, all Proceeds (including condemnation
proceeds), all Accessions and additions thereto and all substitutions
and
replacements therefore and products of any and all of the
foregoing.
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(b)
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The
Company expressly acknowledges that the security interest granted
hereunder shall remain as security for payment and performance of
the
Obligations, whether now existing or which may hereafter be incurred
by
future advances, or otherwise. The notice of the continuing grant
of this
security interest therefore shall not be required to be stated on
the face
of any document representing any such Obligations, nor otherwise
identify
it as being secured hereby.
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The
security interest granted herein to the Secured Party is for the ratable benefit
of all Holders and each Holder may realize upon the Collateral to the extent
of
its Note Percentage, as computed from time to time. The amount of each Holder’s
“Note Percentage” shall be the percentage computed by dividing the Obligations
owed to such Holder by the aggregate Obligations owed to all
Holders.
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3.
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Priority
of Lien.
The Company represents and warrants to the Secured Party that (a)
the lien
granted by the Company to the Secured Party in the Collateral is
a first
priority security interest subject only to the lien granted in favor
of
New Canaan Investment Partners, LLC (“New Canaan”), pursuant to a Security
Agreement dated December 31, 2001 between New Canaan and the Company
as
security for a $218,700 loan provided by New Canaan (hereinafter
the
“Permitted Encumbrance”). The lien granted herein shall also be senior to
any and all other Company credit facilities, debts, obligations,
liabilities, financings or refinancings, whether existing or with
a new
lender.
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4.
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Cross-Collateralization.
All Collateral which Secured Party may at any time acquire from the
Company or from any other source in connection with any of the Obligations
shall constitute Collateral for each and every Obligation, without
apportionment or designation as to particular Obligations, and all
Obligations, however and whenever incurred, shall be secured by all
Collateral, however and whenever acquired, and Secured Party shall
have
the right, in its sole discretion, to determine the order in which
Secured
Party's rights in, or remedies against, any Collateral are to be
exercised, and which type or which portions of Collateral are to
be
proceeded against and the order of application of Proceeds of Collateral
as against particular Obligations.
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5.
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Definitions.
The following terms shall have the following
meanings
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(a)
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“Accessions”
means all Accessions as that term is defined in Article 9 of the
UCC;
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(b)
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“Accounts”
means all Accounts as that term is defined in Article 9 of the
UCC;
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(c)
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“As-Extracted
Collateral” means all As-Extracted Collateral as that term is defined in
Article 9 of the UCC;
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(d)
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“Chattel
Paper” means all Chattel Paper as that term is defined in Article 9 of the
UCC;
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(e)
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“Collateral”
shall have the meaning assigned to it in Section 1 of this Loan
Agreement;
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(f)
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“Commercial
Tort Claims” means all Commercial Tort Claims as that term is defined in
Article 9 of the UCC, including without limitation, those more
specifically described on Schedule 5(f) attached hereto and made
a part
hereof;
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(g)
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“Consignments”
means all Consignments as that term is define in Article 9 of the
UCC;
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(h)
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“Contracts”
means all contracts, undertakings, franchise agreements or other
agreements (other than rights evidenced by Chattel Paper, Documents
or
Instruments, as those terms are defined above and below) in or under
which
the Company may now or hereafter have any right, title or interest,
including, without limitation, with respect to an Account, and any
agreement relating to the terms of payment or the terms of performance
thereof;
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(i)
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“Copyrights”
means (a) all copyrights of the United States or any other country;
(b)
all copyright registrations filed in the United States or in any
other
country; and (c) all proceeds thereof;
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(j)
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“Copyright
License” means all agreements, whether written or oral, providing for the
grant by the Company of any right to use any Copyright;
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(k)
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“Deposit
Accounts” means all Deposit Accounts at that term is defined in Article 9
of the UCC;
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(l)
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“Documents”
means all Documents as that term is defined in Article 9 of the
UCC;
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(m)
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“Encumbrance(s)”
means all Encumbrance(s) as that term is defined in Article 9 of
the
UCC;
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(n)
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“Equipment”
means all Equipment as that term is defined in Article 9 of the
UCC;
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(o)
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“Financing
Agreements” means this Loan Agreement, and any and all agreements, notes,
guaranties, instruments, security agreements and documents evidencing,
governing, securing or relating in any way to the Notes in favor
of
Secured Party;
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(p)
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“Fixtures”
means all Fixtures as that term is defined in Article 9 of the
UCC;
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(q)
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“General
Intangibles” means all General Intangibles as that term is defined in
Article 9 of the UCC;
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(r)
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“Goods”
means all Goods as that term is defined in Article 9 of the
UCC;
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(s)
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“Health-Care-Insurance
Receivables” means all Health-Care-Insurance Receivables as that term is
defined in Article 9 of the UCC;
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(t)
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“Instruments”
means all Instruments as that term is defined in Article 9 of the
UCC;
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(u)
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“Inventory”
means all Inventory as that term is defined in Article 9 of the
UCC;
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(v)
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“Investment
Property” means all Investment Property as that term is defined in Article
9 of the UCC;
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(w)
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“Letters
of Credit” means all Letters of Credit as that term is defined in the
UCC;
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(x)
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“Letter-of-Credit
Rights” means all Letter-of-Credit Rights as that term is defined in
Article 9 of the UCC;
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(y)
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“Obligations”
means any and all obligations, indebtedness, liabilities, guaranties,
covenants and duties owing by the Company to the Holders and/or Secured
Party, including without limitation, the Notes and any obligations
under
any of the Financing Agreements, whether due or to become due, absolute
or
contingent, now existing or hereafter incurred or arising, whether
or not
otherwise guaranteed or secured and whether evidenced by any note
or draft
or documented on the books and records of Secured Party or otherwise
on
open account, including without limitation, all costs, expenses,
fees,
charges and attorneys' and other professional fees incurred by Secured
Party in connection with, involving or related to the administration,
protection, modification, collection, enforcement, preservation or
defense
of any of the Secured Party's rights with respect to any of the
Obligations, the Collateral or any agreement, instrument or document
evidencing, governing, securing or relating to any of the foregoing,
including without limitation, all costs and expenses incurred in
inspecting or surveying mortgaged real estate, if any, or conducting
environmental studies or tests, and in connection with any “workout” or
default resolution negotiations involving legal counsel or other
professionals and any re-negotiation or restructuring of any of the
Obligations;
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(z)
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“Patents”
means (a) all letters patent of the United States and all reissues
and
extensions thereof, (b) all applications for letters patent of the
United
States and all divisions, continuations and continuations-in-part
thereof
or any other country, including, without limitation, any thereof
referred
to in any schedule attached hereto and (c) all proceeds thereof,
including
the goodwill of the business connected with the use of and symbolized
by
the Patents;
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(aa)
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“Patent
License” means all agreements, whether written or oral, providing for the
grant by the Company of any right to manufacture, use or sell any
invention covered by a Patent, including, without limitation, any
thereof
referred to in any schedule attached hereto;
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(bb)
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“Payment
Intangibles” means all Payment Intangibles as that term is defined in
Article 9 of the UCC;
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(cc)
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“Proceeds”
means all Proceeds as that term is defined in Article 9 of the
UCC;
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(dd)
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“Promissory
Note(s)” means all Promissory Note(s) as that term is defined in Article 9
of the UCC;
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(ee)
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“Software”
means all Software as that term is defined in Article 9 of the
UCC;
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(ff)
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“Supporting
Obligations” means all Supporting Obligations as that term is defined in
Article 9 of the UCC;
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(gg)
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“Tangible
Chattel Paper” means all Tangible Chattel Paper as that term is defined in
Article 9 of the UCC;
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(hh)
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“Trademarks”
means (a) all trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, service
marks,
logos and other source or business identifiers and the goodwill associated
therewith, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications in connection
therewith, whether registered in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any
State
thereof or any other country or any political subdivision thereof
or
otherwise; (b) all renewals thereof; and (c) all proceeds thereof,
including the goodwill of the business connected with the use of
and
symbolized by the Trademarks;
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(ii)
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“Trademark
License” means any agreement, written or oral, providing for the grant by
the Company of any right to use any Trademark;
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(jj)
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“UCC”
means the Uniform Commercial Code as in effect from time-to-time
in the
State of New York; and
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(kk)
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“Vehicles”
means all cars, trucks, trailers, construction and earth moving equipment
and other vehicles owned by the Company and covered by a certificate
of
title law of any state and, in any event, shall include, without
limitation, the vehicles listed in any schedule attached hereto and
all
tires and other appurtenances to any of the
foregoing.
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6.
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The
Company’s Representations and Warranties.
The Company represents and warrants to Secured Party and the Holders
as
follows:
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(a)
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Good
Standing and Qualification/Legal Capacity.
The Company is a corporation duly organized, validly existing and
in good
standing under the laws of the State of Nevada (“Company’s State”) and has
all requisite corporate power and authority to own and operate its
properties and to carry on its business as now being conducted. The
Company is not organized under the laws of any jurisdiction other
than the
Company’s State. The Company is duly qualified as a foreign corporation
and is in good standing and duly authorized to do business in every
jurisdiction wherever the nature of its properties or the conduct
of its
business requires such qualification and authorization.
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(b)
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Authority.
The Company has full power and authority to enter into and perform
the
obligations under this Loan Agreement, to execute and deliver the
Financing Agreements and to incur the obligations provided for herein
and
therein, all of which have been duly authorized by all necessary
and
proper corporate or partnership action, if and as the case may be.
No
other consent or approval or the taking of any other action is required
as
a condition to the validity or enforceability of this Loan Agreement
or
any of the other Financing Agreements.
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(c)
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Binding
Agreements.
This Loan Agreement and the other Financing Agreements constitute
the
valid and legally binding obligations of the Company, enforceable
in
accordance with their respective terms, except as enforcement may
be
limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally.
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(d)
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Litigation.
There are no actions, suits, proceedings or investigations pending
or
threatened against the Company before any court or administrative
agency,
which either in any case or in the aggregate, if adversely determined,
would materially and adversely affect the financial condition, assets
or
operations of the Company, or which question the validity of this
Loan
Agreement or any of the other Financing Agreements, or any action
to be
taken in connection with the transactions contemplated hereby or
thereby
except to matters noted in the Company’s December 31, 2005 annual 10K
report.
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(e)
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No
Conflicting Law or Agreements.
The execution, delivery and performance by the Company of this Loan
Agreement and the other Financing Agreements: (i) do not violate
any
provision of the Articles of Incorporation and By-laws of the Company,
as
amended or restated, (ii) do not violate any order, decree or judgment,
or
any provision of any statute, rule or regulation, (iii) do not, violate
or
conflict with, result in a breach of or constitute (with notice or
lapse
of time, or both) a default under any shareholder agreement, partnership
agreement, stock preference agreement, mortgage, indenture, contract
or
other agreement to which the Company is a party, or by which any
of the
Company’s properties are bound, which breach or default would result in
the creation, imposition or enforcement of any lien against any of
the
Collateral, or would have a material adverse effect on the conduct
of the
Company’s business as it is now being conducted and proposed to be
conducted while this Loan Agreement is in effect, or would otherwise
impair the value of the security interest granted to the Secured
Party on
behalf of the Holders hereunder; or (iv) except for the liens and
mortgages granted to Secured Party hereunder, do not result in the
creation or imposition of any lien, charge or encumbrance of any
nature
whatsoever upon any property or assets of the
Company.
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(f)
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Taxes.
With respect to all taxable periods of the Company, the Company has
not
filed all tax returns which are required to be filed and all federal,
state, municipal, franchise and other taxes to be filed on such filed
returns have not been paid.
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(g)
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Compliance.
The Company is not in default with respect to or in violation of
any
order, writ, injunction or decree of any court or of any federal,
state,
municipal or other governmental department, commission, board, bureau,
agency, authority or official, or in violation of any law, statute,
rule
or regulation to which the Company is or the Company’s properties are
subject, where such default or violation would materially and adversely
affect the financial condition of the Company. The Company represents
that
it has not received notice of any such default or violation from
any
party. The Company is not in default in the payment or performance
of any
of the Company’s obligations to any third parties or in the performance of
any mortgage, indenture, lease, contract or other agreement to which
the
Company is a party or by which any of the Company’s assets or properties
are bound, where such default would materially and adversely affect
the
financial condition of the Company.
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(h)
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Office.
The chief executive office and principal place of business of the
Company,
and the office where the Company’s books and records concerning Collateral
are kept, and is as set forth in the first paragraph of this Loan
Agreement.
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(i)
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Places
of Business.
The Company has no other places of business and locates no Collateral,
specifically including books and records, at any location other than
at
the Company’s place of business set forth in the first paragraph of this
Loan Agreement.
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(j)
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Contingent
Liabilities.
The Company is not a party to any suretyship, guarantyship, or other
similar type agreement; nor has the Company offered its endorsement
to any
individual, concern, corporation or other entity or acted or failed
to act
in any manner which would in any way create a contingent liability
(except
for endorsement of negotiable instruments in the ordinary course
of
business).
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(k)
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Licenses.
The Company has all licenses, permits and other permissions required
by
any government, agency or subdivision thereof, or from any licensing
entity necessary for the conduct of the Company’s business, all of which
the Company represents to be in good standing and in full force and
effect.
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(l)
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Collateral.
The Company is and shall continue to be the sole owner of the Collateral
free and clear of all liens, encumbrances, security interests and
claims
except the liens granted to Secured Party hereunder; the Company
is fully
authorized to sell, transfer, pledge and/or grant a security interest
in
each and every item of the Collateral to Secured Party; all documents
and
agreements related to the Collateral shall be true and correct and
in all
respects what they purport to be; all signatures and endorsements
that
appear thereon shall be genuine and all signatories and endorsers
shall
have full capacity to contract; none of the transactions underlying
or
giving rise to the Collateral shall violate any applicable state
or
federal laws or regulations; all documents relating to the Collateral
shall be legally sufficient under such laws or regulations and shall
be
legally enforceable in accordance with their terms; and the Company
agrees
to defend the Collateral against the claims of all persons other
than
Secured Party.
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(m)
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Environmental,
Health, Safety Laws.
The Company has not received any notice, order, petition or similar
document in connection with or arising out of any violation of any
environmental, health or safety law, regulation, rule or order, and
the
Company knows of no basis for any claim of such violation or of any
threat
thereof.
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(n)
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Accounts.
The amount represented by the Company to Secured Party from time
to time
as owing by each account debtor or by all account debtors in respect
of
the Accounts will at such time, to the best of the Company’s knowledge, be
the correct amount actually owing by such account debtor or debtors
thereunder in all material respects. No amount payable to the Company
under or in connection with any Account is evidenced by any Instrument
or
Chattel Paper (other than customer contracts constituting Chattel
Paper)
which has not been delivered to Secured Party.
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(o)
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Contracts.
No consent of any party (other than the Company) to any Contract
is
required, or purports to be required, in connection with the execution,
delivery and performance of this Loan Agreement. Each Contract is
in full
force and effect and constitutes a valid and legally enforceable
obligation of the parties thereto, except as enforceability may be
limited
by bankruptcy, insolvency, reorganization, moratorium or similar
laws
affecting the enforcement of creditor’s rights generally. No consent or
authorization of, filing with or other act by or in respect of any
governmental authority is required in connection with the execution,
delivery, performance, validity or enforceability of any of the Contracts
by any party thereto other than those which have been duly obtained,
made
or performed, are in full force and effect and do not subject the
scope of
any such Contract to any material adverse limitation, either specific
or
general in nature. Neither the Company nor (to the best of the Company’s
knowledge) any other party to any Contract is in default in a manner
which
could reasonably be expected to materially adversely affect the value
of
all such Contracts as Collateral or is reasonably likely to become
in
default in the performance or observance of any of the terms thereof
in
any material respect. The Company has fully performed all its current
obligations under each Contract. The right, title and interest of
the
Company in, to and under each Contract are not subject to any defense,
offset, counterclaim or claim which in the aggregate could reasonably
be
expected to have a material adverse effect to the Collateral, the
Company’s operations or the Company’s ability to satisfy its obligations
hereunder. No amount payable to the Company under or in connection
with
any Contract is evidenced by any Instrument or Chattel Paper (other
than
customer contracts constituting Chattel Paper) which has not been
delivered to Secured Party.
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(p)
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Copyrights,
Patents and Trademarks.
All Copyrights, Copyright Licenses, Patents and Patent Licenses owned
by
the Company in its own name as of the date hereof are listed on Schedule
6(p) attached hereto and made a part hereof, which listing includes
all
Trademarks and Trademark Licenses owned by the Company in its own
name as
of the date hereof. Each Copyright, Patent and Trademark is valid,
subsisting, unexpired, enforceable and has not been abandoned. Except
as
set forth in Schedule 6(p), none of such Copyrights, Patents and
Trademarks is the subject of any licensing or franchise agreement.
No
holding, decision or judgment has been rendered by any governmental
authority which would limit, cancel or question the validity of any
Copyright, Patent or Trademark. No action or proceeding is pending
seeking
to limit, cancel or question the validity of any Copyright, Patent
or
Trademark.
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(q)
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Governmental
Obligors.
None of the obligors on any Accounts, and none of the parties to
any
Contracts, is a governmental authority with respect to which the
Federal
Assignment of Claims Act is applicable.
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(r)
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Government
Consent.
The execution and delivery of this Loan Agreement and the Notes and
the
other Loan Documents and the performance of the transactions contemplated
hereby and thereby do not require any approval or consent of any
governmental agency or authority.
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(s)
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Financial
Statements.
The Company has delivered to each Holder copies of its annual report
on
Form 10-K for the year ended December 31, 2004, and its quarterly
reports
for the first three quarters of fiscal 2005, ending March 31, 2005,
June
30, 2005 and September 30, 2005, respectively (collectively the “Financial
Statements”). All of these Financial Statements are true and correct,
present fairly and completely the financial condition of the Company
in
all material respects for the periods covered therein and are in
accordance with the books of account and records of the
Company.
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(t)
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No
change in Financial Condition.
Since the ending date of the Financial Statements, September 30,
2005,
described in subsection (s) above, there has been no material adverse
change in the assets, liabilities, financial condition or operations
of
the Company, other than changes in the ordinary course of
business.
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(u)
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No
Other Liabilities.
Except to the extent reflected in the Financial Statements described
in
subsection (s) above, the Company, as of the date of this Loan Agreement,
does not know or have reasonable grounds to know of any basis for
the
assertion against it of any liabilities or obligations of any nature,
direct or indirect, accrued, absolute or contingent, including, without
limitation, liabilities for taxes then due or to become due whether
incurred in respect of or measured by the income of the Company for
any
period prior to the date of this Loan Agreement or arising out of
transactions entered into, or any state of facts existing prior
thereto.
|
|
(v)
|
Accuracy
of Representations.
No representation or warranty by or with respect to the Company contained
herein or in any certificate or other document furnished by the Company
pursuant hereto contains any untrue statement of a material fact
or omits
to state a material fact necessary to make such representation or
warranty
not misleading in light of the circumstances under which it was
made.
|
|
(w)
|
Representations
as Inducement to Holders.
The foregoing representations and warranties are made by the Company
with
the knowledge and intention that the Secured Party and the Holders
will
rely thereon, and shall survive the execution and delivery of this
Loan
Agreement.
|
|
7.
|
Affirmative
Covenants of the Company.
The Company covenants and agrees that from the date hereof until
full and
final payment and performance of all Obligations, the Company
shall:
|
|
(a)
|
Perform
Obligations.
Pay and perform all of the Obligations secured by this Loan Agreement
according to their terms.
|
|
(b)
|
Financial
Information.
Deliver to Secured Party: promptly upon Secured Party's request,
such
documentation and information about the Company’s financial condition,
business and/or operations as Secured Party may, at any time and
from time
to time, reasonably request, including without limitation, copies
of
federal and state income tax returns and all schedules thereto, a
listing
of Company’s Accounts and accounts payable and a listing of Company’s
Inventory and Equipment, all of which shall be in form, scope and
content
reasonably satisfactory to Secured Party, in its sole
discretion.
|
|
(c)
|
Insurance
and Endorsement.
(i) Keep the Collateral and Company’s other properties insured against
loss or damage by flood (if applicable) and by fire and other hazards
(so-called “All Risk” coverage) in amounts and with companies satisfactory
to Secured Party to the same extent and covering such risks as is
customary in the same or a similar business; maintain public liability
coverage, including without limitation, products liability coverage,
against claims for personal injuries or death; and maintain all worker's
compensation, employment or similar insurance as may be required
by
applicable law; (ii) All insurance shall contain such terms, be in
such
form, and be for such periods reasonably satisfactory to Secured
Party,
and be written by such carriers duly licensed and reasonably satisfactory
to Secured Party. Without limiting the generality of the foregoing,
such
insurance must provide that it may not be canceled without ten (10)
days
prior written notice to Secured Party. The Company shall cause Secured
Party to be endorsed as a loss payee with a long form Holder’s loss
payable clause, in form and substance reasonably acceptable to Secured
Party on all such insurance. In the event of a failure to provide
and
maintain insurance as herein provided, Secured Party may, at its
option,
provide such insurance and charge the amount thereof to the Company.
The
Company shall furnish to Secured Party certificates or other satisfactory
evidence of compliance with the foregoing insurance provisions. The
Company hereby irrevocably appoints Secured Party as its attorney-in-fact,
coupled with an interest, to make proofs of loss and claims for insurance,
and to receive payments of the insurance and execute all documents,
checks
and drafts in connection with payment of the insurance. Any Proceeds
received by Secured Party shall be applied to the Obligations in
such
order and manner as Secured Party shall determine in its sole discretion,
or shall be remitted to the Company, in either event at Secured Party's
sole discretion.
|
|
(d)
|
Tax
and Other Liens.
Comply with all statutes and government regulations and pay all taxes
(including withholdings), assessments, governmental charges or levies,
or
claims for labor, supplies, rent and other obligations made against
it or
its property which, if unpaid, might become a lien or charge against
the
Company or its properties, unless and to the extent being contested
in
good faith with the prior written consent of Secured Party and against
which, if requested by Secured Party as a condition to its consent,
the
Company shall set up a cash reserve or post a surety bond in an amount
equal to the total amount of the tax or lien being contested. Keep
the
Collateral free and clear of all liens, encumbrances, and security
interests of any kind other than the security interest granted hereby
and
the Permitted Encumbrance.
|
|
(e)
|
Permitted
Encumbrance.
Pay and perform all of the obligations secured by the Permitted
Encumbrance when due.
|
|
(f)
|
Litigation.
Promptly advise Secured Party of the commencement or threat of litigation,
including arbitration proceedings and any proceedings before any
governmental agency (collectively, “Litigation”), which is instituted
against the Company and which, if adversely determined, would have
a
material adverse affect on the Company or its
assets.
|
|
(g)
|
Maintenance
of Existence.
Maintain its corporate existence and comply with all valid and applicable
statutes, rules and regulations, and maintain its properties and
the
Collateral in good repair, working order and operating condition.
The
Company shall immediately notify Secured Party of any event causing
material loss in the value of its assets.
|
|
(h)
|
Collateral
Duties.
Do whatever Secured Party may request from time to time by way of
obtaining, executing, delivering and filing financing statements,
assignments, landlord's or mortgagee's waivers, and other notices
and
amendments and renewals thereof, and the Company will take any and
all
steps and observe such formalities as Secured Party may request in
order
to create and maintain a valid and enforceable first lien upon, pledge
of,
and first priority security interest in, any and all of the Collateral.
Secured Party is authorized to file financing statements without
the
signature of the Company and to execute and file such financing statements
on behalf of the Company as specified by the UCC to perfect or maintain
Secured Party's security interest in all of the Collateral. All charges,
expenses and fees Secured Party may incur in filing any of the foregoing,
together with reasonable costs and expenses of any lien search required
by
Secured Party, and any taxes relating thereto, shall be charged to
the
Company and added to the Obligations. Take all commercially reasonable
action necessary to defend the title to the Collateral against all
persons
and against all claims and demands whatsoever. Keep the Collateral
and the
records relating to the Collateral available for inspection at all
reasonable times during normal business hours.
|
|
(i)
|
Notice
of Default.
Provide to Secured Party, within one business day after becoming
aware of
the occurrence or existence of an Event of Default or a condition
which
would constitute an Event of Default but for the giving of notice
or
passage of time or both, notice in writing of such Event of Default
or
condition.
|
|
(j)
|
Location.
Promptly advise the Secured Party in writing prior to any change
in the
location of the Company’s place of business and chief executive office in
order to permit the Secured Party to take such actions as it may
deem
necessary or advisable to protect and preserve the security interests
of
the Holders.
|
|
8.
|
Negative
Covenants of the Company.
The Company covenants and agrees that from the date hereof until
full and
final payment and performance of all Obligations, the Company shall
not
without the prior written consent of Secured
Party:
|
|
(a)
|
Encumbrances.
Incur or permit to exist any lien, mortgage, charge or other encumbrance
against any of the Collateral which is prior to that of Secured Party,
whether now owned or hereafter acquired, except: (i) liens required
or
expressly permitted by this Loan Agreement; (ii) pledges or deposits
in
connection with or to secure worker's compensation, unemployment
or
liability insurance; and (iii) tax liens which are being contested
in good
faith with the prior written consent of Secured Party and against
which,
if requested by Secured Party as a condition to its consent, the
Company
shall set up a cash reserve or post a surety bond in an amount equal
to
the total amount of the lien being
contested.
|
|
(b)
|
Consolidation,
Merger, Conversion, or Transfer.
Merge into or consolidate with or into any corporation or other entity,
convert into any other entity or transfer to or domesticate in any
jurisdiction other than the jurisdiction set forth in Section 5(a)
of this
Loan Agreement.
|
|
(c)
|
Sale,
Lease, and/or License of Assets.
Sell, lease, license or otherwise dispose of any of its assets, except
in
the ordinary course of business.
|
|
(d)
|
Name
Changes.
Change its corporate name, identity or structure, or conduct its
business
under any trade name or style other than as set forth in this Loan
Agreement.
|
|
(e)
|
Maintenance
of Collateral.
Permit to incur or suffer any loss, theft, substantial damage or
destruction of any of the Collateral which is not immediately replaced
with Collateral of equal or greater value, or which is not fully
covered
by insurance, the proceeds of which shall have been endorsed over
to
Secured Party in accordance with Section 7(c) hereof.
|
|
(f)
|
Maintenance
of Existence.
Fail to preserve and maintain its corporate existence in the jurisdiction
of its incorporation, organization or formation.
|
|
(g)
|
UCC-3
Termination Statements.
File any UCC-3 termination statement affecting any UCC-1 Financing
Statement in favor of Secured Party.
|
|
(h)
|
Chattel
Paper.
Create any Chattel Paper without placing a legend thereon acceptable
to
Secured Party indicating that Secured Party has a security interest
therein.
|
|
9.
|
Rights
of Secured Party.
Upon the occurrence of any Event of Default, Secured Party shall
have the
right to declare all of the Obligations to be immediately due and
payable
and shall then have the rights and remedies of a secured party under
the
UCC or under any other applicable law, including, without limitation,
the
right to take possession of the Collateral, and in addition thereto,
the
right to enter upon any premises on which the Collateral or any part
thereof may be situated and remove the same therefrom and the right
to
occupy the Company’s premises for the purposes of liquidating Collateral,
including without limitation, conducting an auction thereon. Secured
Party
may require the Company to make the Collateral (to the extent the
same is
moveable) available to Secured Party at a place to be designated
by
Secured Party. Secured Party may, at its option, sell the Collateral
on
credit, and furthermore may sell the Collateral without giving any
warranties as to the Collateral and may specifically disclaim any
warranties of title or the like, which shall not be considered to
adversely affect the commercial reasonableness of any sale of the
Collateral. Unless the Collateral is perishable or threatens to decline
speedily in value or is of a type customarily sold on a recognized
market,
Secured Party will give the Company at least ten (10) days' prior
written
notice at the address of the Company set forth above (or at such
other
address or addresses as the Company shall specify in writing to Secured
Party) of the time and place of any public sale thereof or of the
time
after which any private sale or any other intended disposition thereof
is
to be made. Any such notice shall be deemed to meet any requirement
hereunder or under any applicable law (including the UCC) that reasonable
notification be given of the time and place of such sale or other
disposition. After deducting all costs and expenses of collection,
storage, custody, sale or other disposition and delivery (including
reasonable attorneys' fees) and all other reasonable charges against
the
Collateral, the residue of the Proceeds of any such sale or disposition
shall be applied to the payment of the Obligations in such order
of
priority as Secured Party shall determine and any surplus shall be
returned to the Company or to any person or party lawfully entitled
thereto. In the event the Proceeds of any sale, lease or other disposition
of the Collateral hereunder, including without limitation, the Proceeds
from the collection of Accounts, are insufficient to pay all of the
Obligations in full, the Company will be liable for the deficiency,
together with interest thereon, at the maximum rate allowable by
law, and
the costs and expenses of collection of such deficiency, including
(to the
extent permitted by law) without limitation, attorneys' fees, expenses
and
disbursements.
|
|
10.
|
Right
of Secured Party to Use and Operate Collateral, Etc.
Upon the occurrence of any Event of Default, Secured Party shall
have the
right and power to take possession of all or any part of the Collateral,
and to exclude the Company and all persons claiming under the Company
wholly or partly therefrom, and thereafter to hold, store, and/or
use,
operate, manage and control the same. Upon any such taking of possession,
Secured Party without obligation to do so, may, from time to time,
at the
expense of the Company, make all such repairs, replacements, alterations,
additions and improvements to the Collateral as Secured Party may
deem
proper. The Company hereby expressly waives any obligation of the
Secured
Party to process and/or prepare any Collateral prior to any sale
or other
disposition thereof. Upon any taking of possession of all or any
part of
the Collateral, Secured Party shall have the right to manage and
control
the Collateral and to carry on the business and to exercise all rights
and
powers of the Company in respect thereto as Secured Party shall reasonably
deem best, including the right to enter into any and all such agreements
with respect to the operation of the Collateral or any part thereof
as
Secured Party may see fit; and Secured Party shall be entitled to
collect
and receive all issues, profits, fees, revenues and other income
of the
same and every part thereof. Such issues, profits, fees, revenues
and
other income shall be applied to pay the expenses of holding and
operating
the Collateral and of conducting the business thereof, and of all
maintenance, repairs, replacements, alterations, additions and
improvements, and to make all payments which Secured Party may be
required
or may elect to make, if any, for taxes, assessments, insurance and
other
charges upon the Collateral or any part thereof, and all other payments
which Secured Party may be required or authorized to make under any
provision of this Loan Agreement (including legal costs and attorneys'
fees). The remainder of such issues, profits, fees, revenues and
other
income shall be applied to the payment of the Obligations in such
order of
priority as Secured Party shall determine. Without limiting the generality
of the foregoing, Secured Party shall have the right to apply for
and have
a receiver appointed by a court of competent jurisdiction in any
action
taken by Secured Party to enforce its rights and remedies hereunder
in
order to manage, protect and preserve the Collateral and continue
the
operation of the business of the Company and to collect all revenues
and
profits thereof and apply the same to the payment of all expenses
and
other charges of such receivership including the compensation of
the
receiver and to the payment of the Obligations as aforesaid until
a sale
or other disposition of such Collateral shall be finally made and
consummated.
|
|
(a)
|
At
any time after an Event of Default, Secured Party shall have the
right to
require the Company to and the Company shall, upon written notice
from
Secured Party:
|
|
i)
|
Make
collections of Proceeds upon its Accounts, hold the Proceeds received
from
collections in trust for Secured Party and turn over such Proceeds
to
Secured Party daily in the exact form in which they are received,
together
with a collection report in form satisfactory to Secured Party. Secured
Party shall immediately apply, subject to collection, such Proceeds
and
any Proceeds of Accounts received by it pursuant to the following
provisions of this Section 10, to the payment of the Obligations
in such
order of priority as Secured Party shall
determine;
|
|
ii)
|
Assign
or endorse the Accounts to Secured Party, and notify account debtors
that
the Accounts have been assigned and should be paid directly to Secured
Party;
|
|
iii)
|
Turn
over to Secured Party all Inventory returned in connection with any
of the
Accounts;
|
|
iv)
|
Xxxx
or stamp each of its individual ledger sheets or cards pertaining
to its
Accounts with the legend “Assigned to Strasbourger Xxxxxxx Tulcin Xxxxx
Inc.,” and stamp or otherwise xxxx and keep its books, records, documents
and instruments relating to the Accounts in such manner as Secured
Party
may require; and
|
|
v)
|
Xxxx
or stamp all invoices with a legend satisfactory to Secured Party
so as to
indicate that the same should be paid directly to Secured
Party.
|
Notwithstanding
the foregoing, Secured Party shall have the right, at any time after the
occurrence of an Event of Default, to itself so notify such account debtors
to
make such payments of the Accounts directly to Secured Party and Secured Party
shall have the further right to notify the post office authorities to change
the
address for delivery of mail of the Company to an address designated by Secured
Party and to receive, open and dispose of all mail addressed to the
Company.
For
the
purposes of this Section 10, the Company hereby irrevocably constitutes Secured
Party as the Company’s attorney-in-fact to issue in the name and execute or
endorse on behalf of the Company each and every notice, instrument and document
necessary to carry out the purposes of the provisions of this Section 10, and
to
take such action in connection with the collection of the Accounts or the
promissory note(s), including without limitation, suing thereon, compromising
or
adjusting the same, as Secured party, in its sole discretion, deems necessary.
The power of attorney granted hereby shall be self-executing, but the Company
shall promptly execute and deliver to Secured Party, upon written request of
Secured Party, such additional separate powers of attorney as Secured Party
may
from time to time request.
|
11.
|
Events
of Default.
The Company shall be in default under this Loan Agreement upon the
happening of any of the following events or conditions (herein
individually called an “Event of Default” and collectively called “Events
of Default”);
|
|
(a)
|
Failure
by the Company to do anything required by the Note and other Financing
Agreements and, if curable, the Company’s failure to fully cure such
failure within thirty (30) days of written notice thereof from Secured
Party;
|
|
(b)
|
Failure
by the Company to preserve, or account to Secured Party’s reasonable
satisfaction for, any of the Collateral or its proceeds and, if curable,
the Company’s not curing such failure within thirty (30) days of written
notice thereof from Secured Party;
|
|
(c)
|
Default
by the Company on any loan or agreement with another creditor, if
Secured
Party reasonably believes the default may materially affect the Company’s
ability to pay the Note;
|
|
(d)
|
Other
than as otherwise provided in this Section 11, breach of or failure
in the
due observance or performance of any covenants, condition or agreement
on
the part of the Company to be observed or performed pursuant to this
Loan
Agreement, and, if curable, the failure to cure any such breach or
failure
within thirty (30) days after written notice thereof from Secured
Party to
the Company;
|
|
(e)
|
The
Company’s becoming the subject of a proceeding under any bankruptcy or
insolvency law;
|
|
(f)
|
The
Company’s having a receiver or liquidator appointed for any part of its
business or property;
|
|
(g)
|
The
Company’s making an assignment for the benefit of
creditors;
|
|
(h)
|
Reorganization,
merger, consolidation or other change of ownership or business structure
of the Company without Secured Party’s prior written
consent;
|
|
(i)
|
The
Secured Party receiving at any time after the date hereof, a UCC
lien
search report indicating that the Secured Party’s security interest in the
Collateral is not prior to all other security interests or other
interests
reflected in the report, and the Company’s failure to have any such prior
security or other interests fully released, terminated or subordinated
within 45 days of written notice of such report from Secured Party
to the
Company; or
|
|
(j)
|
Any
representation or warranty of the Company set forth herein or in
the Note
shall have been false or misleading in any material
respect.
|
|
12.
|
Perfection
by Filing.
The Secured Party may at any time and from time to time, at the Company’s
expense, file financing statements, continuation statements and amendments
thereto that describe the Collateral as all assets of the Company
or words
of similar effect and which contain any other information required
by the
UCC for the sufficiency or filing office acceptance of any financing
statement, continuation statement or amendment, including whether
the
Company is an organization, the type of organization and any tax
and/or
organization identification number issued to the Company. The Company
agrees to furnish any such information to the Secured Party promptly
upon
request. Any such financing statements, continuation statements or
amendments may be signed, if so required, by the Secured Party on
behalf
of the Company, and may be filed at any time in any jurisdiction
as
necessary. The Company hereby irrevocably appoints the Secured Party,
through any of its chosen agents or designees, as the Company’s
Attorney-In-Fact, coupled with an interest, for the purposes
hereof.
|
|
13.
|
Other
Perfection, etc.
The Company shall at any time and from time to time, at Company’s expense,
take such steps as the Secured Party may reasonably request for the
Secured Party (a) to obtain an acknowledgement, in form and substance
satisfactory to the Secured Party, of any bailee having possession
of any
of the Collateral that the bailee holds such Collateral for the Secured
Party, (b) to obtain “control” of any Investment Property, Deposit
Accounts, Letter-Of-Credit Rights or electronic Chattel Paper, with
any
agreements establishing control to be in form and substance satisfactory
to the Secured Party, (c) to obtain possession of all or any portion
of
the Collateral in order to perfect its security interest therein
in
addition to the filing of a financing statement, and (d) otherwise
to
insure the continued perfection and priority of the Secured Party’s
security interest in any of the Collateral and of the preservation
of its
rights therein.
|
|
14.
|
Application
of Payments.
To the extent that the Company uses the proceeds of the loan secured
hereby to purchase any Collateral, the Company’s repayment shall be
applied on a “first-in-first-out” basis so that the portion of said loan
used to purchase a particular item of Collateral shall be paid in
the
chronological order the Company purchased such
Collateral.
|
|
15.
|
The
Secured Party.
|
|
(a)
|
Authorization.
|
|
i)
|
Each
Holder irrevocably authorizes Secured Party to take such action on
his
behalf and as his agent under this Loan Agreement, the Note executed
in
favor of such Holder and all other documents executed in connection
therewith (collectively, the “Loan Documents”), and to exercise such
powers as are specifically delegated to it hereunder and thereunder,
including, without limitation, powers with respect to the enforcement
and
collection of the Obligations, and to exercise such other powers
as are
reasonably incidental thereto; provided, however, that Secured Party
shall
not, without the express authorization of the Holders of 75% of the
aggregate principal amount of all outstanding Notes (the “Required
Holders”), be authorized to waive any payment default under the
Notes.
|
|
ii)
|
Except
as set forth in subparagraph i) hereinabove, Secured Party shall
not be
required to but may, in its sole discretion, exercise any discretion
or
take any action, but shall be required to act or refrain from acting
(and
shall be fully protected in so acting or refraining from acting)
upon the
instructions of the Required Holders, and such instructions shall
be
binding upon all Holders, provided, however, that Secured Party shall
not
be required to take any action that exposes Secured Party to personal
liability or which is contrary to this Loan Agreement or applicable
law.
|
|
(b)
|
Notices.
|
|
i)
|
Secured
Party shall transmit promptly to each Holder each notice received
by it
from the Company that the Company is not required to furnish to the
Holders and each of the Holders shall transmit promptly to Secured
Party
each notice received by it from the Company that is not otherwise
required
to be delivered to Secured Party by the terms hereof. Secured Party
shall
be under no obligation toward any Holder to ascertain or inquire
as to the
performance or observance of any of the terms, covenants or conditions
hereof to be performed or observed by the Company, but Secured Party
and
each Holder shall promptly notify one another of any Event of Default
of
which it has actual notice.
|
|
ii)
|
Each
Holder expressly authorizes Secured Party to collect all sums due
such
Holder under the Loan Documents. Secured Party shall promptly disburse
to
the Holders (to the extent of their ratable interest therein according
to
the outstanding Note Percentage of each Holder) available funds received
by it for the benefit of the
Holders.
|
|
(c)
|
Exculpation.
In exercising its duties and powers hereunder, the Secured Party
shall
exercise the same care that it would exercise in dealing with loans
for
its own account, but neither Secured Party nor any of its directors,
officers, employees or attorneys shall be responsible for the truth
or
accuracy of any representations or warranties given or made herein
or for
the validity, effectiveness, sufficiency or enforceability of this
Loan
Agreement, or any other Loan Documents, and Secured Party or any
of its
directors, officers, employees or attorneys shall not be liable to
any of
the Holders for any action taken or omitted to be taken by it or
any of
them under the Loan Documents, except in the case of its or their
willful
misconduct or gross negligence. Each of the Holders represents and
warrants to Secured Party that it has made its own independent judgment
with respect to entering into this Loan Agreement and the other Loan
Documents and undertaking its obligations hereunder and thereunder.
Each
Holder also acknowledges that it will, independently and without
reliance
upon the Secured Party or any other Holder and based on such documents
and
information as it shall deem appropriate at the time, continue to
make its
own credit decisions in taking or not taking action under this Loan
Agreement and the Loan Documents. The powers conferred by this Loan
Agreement on Secured Party hereunder are solely to protect the Holders’
interest in the Collateral and shall not impose any duty upon Secured
Party to exercise any such powers. Except for the safe custody of
any
Collateral in its possession and the accounting for monies actually
received by it hereunder, Secured Party shall have no duty as to
any
Collateral or as to the taking of any necessary steps to preserve
rights
against prior parties or any other rights pertaining to the Collateral.
Neither Secured Party nor any of its directors, officers, employees
(excluding any independent contractors employed by Secured Party)
or
attorneys shall have any responsibility (1) to the Company on account
of
the failure or delay in performance or breach of any Holder of any
of its
obligations hereunder, or (2) to any Holder on account of the failure
of
or delay in performance or breach by any other Holder or the Company
of
any of their obligations hereunder.
|
|
(d)
|
Reliance.
Secured Party:
|
|
i)
|
shall
be entitled to rely on any communication, instrument or document
believed
by it to be genuine or correct and to have been signed or sent by
a person
or persons believed by it to be the proper person or
persons;
|
|
ii)
|
shall
be entitled to consult with legal counsel, independent public accountants
and other professional advisers and experts selected by it, and shall
not
be liable for any action taken or omitted to be taken in good faith
by
Secured Party in accordance with the advice of such counsel, accountants
or experts;
|
|
iii)
|
makes
no warranty or representation to any Holder and shall not be responsible
to any Holder for any statements, warranties or representations made
in or
in connection with this Loan Agreement;
|
|
iv)
|
shall
not have any duty to ascertain or to inquire as to the performance
or
observance of any of the terms, covenants or conditions of this Loan
Agreement on the part of the Company or to inspect the property (including
the books and records) of the Company;
|
|
v)
|
shall
not be responsible to any Holder for the due execution, legality,
validity, enforceability, genuineness, sufficiency or venue of this
Loan
Agreement or any other instrument or document furnished pursuant
hereto;
and
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vi)
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shall
incur no liability under or in respect of this Loan Agreement by
acting
upon notice, consent, certificate or other instrument or writing
(which
may be by telegram, telecopier, cable or telex) believed by it to
be
genuine and signed or sent by the proper party or
parties.
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(e)
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Expenses
and Indemnification.
Each Holder agrees:
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i)
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to
reimburse Secured Party, as agent hereunder, on demand, pro rata
in
accordance with its Note Percentage, for all reasonable expenses
incurred
by Secured Party in connection with the preparation, execution, operation
and enforcement of, or legal advice in respect of rights or
responsibilities under, this Loan Agreement and any document delivered
in
connection herewith, to the extent that such expenses are not timely
reimbursed or reimbursable by the Company, and
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ii)
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to
indemnify and hold harmless Secured Party and any of its directors,
officers or employees, on demand, pro rata in accordance with its
Note
Percentage, from and against all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be imposed
on,
incurred by, or asserted against Secured Party in any way relating
to or
arising out of the Loan Documents or any action taken or omitted
by
Secured Party under the Loan Documents, to the extent that expenses
and
costs incurred by it in connection with such liability are not reimbursed
by the Company; provided that no Holder shall be liable for any portion
of
such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from
the
Secured Party’s gross negligence or willful
misconduct.
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(f)
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Other
Holders.
None of the Holders shall be deemed to be an agent of any other Holder;
none of such Holders or any of their respective directors, officers
or
employees shall have any responsibility to the Company on account
of the
failure or delay in performance or breach of any other Holder of
any of
its obligations hereunder or to any other Holder on account of the
failure
of or delay in performance or breach by any other Holder or the Company
of
its obligations hereunder.
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(g)
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Removal
or Resignation of Secured Party.
Secured Party may resign at any time by giving written notice thereof
to
the Holders and the Company and upon any such resignation the Required
Holders shall have the right to appoint a successor Secured Party.
If no
successor Secured Party shall have been so appointed by the Required
Holders, and shall have accepted such appointment, within thirty
(30) days
after the retiring Secured Party’s giving of notice of resignation or the
Required Holders’ removal of the retiring Secured Party, then the retiring
Secured Party may, on behalf of the Holders, appoint a successor
Secured
Party. Upon the acceptance by a successor Secured Party of its appointment
as Secured Party hereunder, such successor Secured Party shall thereupon
succeed to and become vested with all the rights, powers, privileges
and
duties of the retiring Secured Party, and the retiring Secured Party
shall
be discharged from its duties and obligations under this Loan Agreement.
After any retiring Secured Party’s resignation or removal hereunder as
Secured Party, the provisions of this Section 15 shall inure to its
benefit as to any actions taken or omitted to be taken by it while
it was
Secured Party under this Loan
Agreement.
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16.
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Termination;
Assignment, Etc.
This Loan Agreement and the security interest in the Collateral created
hereby shall terminate when all of the Obligations have been fully
and
finally paid, performed and discharged, whereupon Secured Party will
promptly provide the Company with appropriate releases/terminations
of the
security interests granted hereby. No waiver by Secured Party or
by any
other holder of the Obligations of any default shall be effective
unless
in writing signed by Secured Party nor shall any waiver granted on
any one
occasion operate as a waiver of any other default or of the same
default
on a future occasion. In the event of a sale or assignment by Secured
Party of all or any of the Obligations held by Secured Party, Secured
Party may assign or transfer its respective rights and interests
under
this Loan Agreement in whole or in part to the purchaser or purchasers
of
such Obligations, whereupon such purchaser or purchasers shall become
vested with all of the powers and rights hereunder, and Secured Party
shall thereafter be forever released and fully discharged from any
liability or responsibility hereunder with respect to the rights
and
interests so assigned except that Secured Party shall be liable for
damages suffered by the Company as a result of actions taken by Secured
Party in bad faith or with willful misconduct.
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17.
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Notices.
Except as otherwise provided herein, notice to the Company or to
Secured
Party shall be in writing and shall be deemed to have been sufficiently
given or served for all purposes hereof when (a) delivered personally,
(b)
deposited with a commercially recognizable national overnight courier,
or
(c) mailed by certified or registered mail, postage prepaid and return
receipt requested, when deposited in the U.S. mail, to the parties
as
follows (or to such other address as a party may have signified by
notice
given to the other party in accordance with this provision):
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(a)
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if
to the Company:
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0000
Xxxxx X Xxxxxx Xxxxx 0-000
Xxxxxxx,
Xxxxx 00000
Attn:
Xxxxx X. Xxxxxx, CEO
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(b)
|
if
to Secured Party:
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Strasbourger
Xxxxxxx Tulcin Xxxxx Inc.
00
Xxxxxxxxx Xxxxxx
00xx
Xxxxx
Xxx
Xxxx,
XX 00000
Attn:
Xxx
Xxxxxxxxx
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00.
|
Miscellaneous.
This Loan Agreement shall inure to the benefit of and be binding
upon
Secured Party and the Company and their respective successors and
assigns.
In case any provision in this Loan Agreement shall be invalid, illegal
or
unenforceable, the validity, legality, and enforceability of the
remaining
provisions shall not in any way be affected or impaired thereby.
This Loan
Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which
shall be
an original, but all of which together shall constitute one instrument.
The paragraph headings used in this Loan Agreement are for convenience
of
reference only and are not to affect the construction hereof or to
be
taken into consideration in the interpretation hereof. This Loan
Agreement
may not be amended except in
writing.
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19.
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Governing
Law.
This Loan Agreement shall be governed by the laws of the State of
New York
(but not its conflicts of law provisions except to the extent that
Part 3
of the UCC requires the application of the laws of another jurisdiction
with regard to the perfection and priority of security
interests).
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20.
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Waiver.
IN ANY ACTION TO ENFORCE THIS LOAN AGREEMENT OR TO COLLECT THE NOTE
SECURED HEREBY OR TO COLLECT A DEFICIENCY AFTER THE ENFORCEMENT OF
THIS
LOAN AGREEMENT, THE COMPANY HEREIN SPECIFICALLY WAIVES ITS RIGHT
TO ANY
NOTICE OF HEARING OR HEARING, OR THE ESTABLISHMENT OF A BOND, WITH
OR
WITHOUT SURETY, WHICH THE COMPANY WOULD OTHERWISE BE ENTITLED TO
UNDER
STATE OR FEDERAL LAW PRIOR TO AN ATTACHMENT BEING PLACED AGAINST
ANY
PROPERTY OWNED BY THE COMPANY IN THE STATES OF NEW YORK OR NEVADA,
OR
PRIOR TO SECURED PARTY’S RESORT TO ANY OTHER PREJUDGMENT REMEDY ALLOWED BY
LAW. THE COMPANY ACKNOWLEDGES THAT THIS LOAN AGREEMENT AND THE NOTE
SECURED HEREBY EVIDENCE A COMMERCIAL TRANSACTION. THE COMPANY EXPRESSLY
WAIVES ALL REQUIREMENTS OF PRESENTMENT, PROTEST, NOTICE OF DISHONOR
OR
NON-PAYMENT, NOTICE OF PROTEST AND ALL
DILIGENCE.
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21.
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Jury
Waiver.
THE COMPANY HEREBY WAIVES TRIAL BY JURY IN ANY COURT IN ANY SUIT,
ACTION
OR PROCEEDING ON ANY MATTER ARISING IN CONNECTION WITH OR IN ANY
WAY
RELATED TO THE FINANCING TRANSACTIONS OF WHICH THIS LOAN AGREEMENT
IS A
PART AND/OR THE ENFORCEMENT OF ANY OF SECURED PARTY'S RIGHTS AND
REMEDIES,
INCLUDING WITHOUT LIMITATION, TORT CLAIMS. THE COMPANY ACKNOWLEDGES
THAT
THE COMPANY MAKES THIS WAIVER VOLUNTARILY, INTELLIGENTLY, KNOWINGLY,
WITHOUT DURESS AND ONLY AFTER EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS
THEREOF.
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IN
WITNESS WHEREOF, the parties have executed this Loan Agreement as a sealed
instrument as of the date first above written.
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Witnessed
by:
_____________________________________
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By:
_____________________________________
Xxxxx
X. Xxxxxx
Its
CEO
Duly
Authorized
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_____________________________________
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STRASBOURGER
XXXXXXX TULCIN XXXXX INC.
By:
_____________________________________
Xxx
Xxxxxxxxx
Its
____________________
Duly
Authorized
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